Sitting of 9 December 1946

Preamble
The House met at Half fast Two o'Clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  ST. ANDREWS LINKS ORDER CONFIRMATION BILL
  Read the Third time, and passed.
  ARBROATH GAS PROVISIONAL ORDER BILL
  Considered; to be read the Third time Tomorrow.
ORAL ANSWERS TO QUESTIONS
  SHIPPING

    Ballast Sailings, North America
    Brigadier Mackesonasked the Minister of Transport how many ships have, during the last six months, sailed to the U.S.A. and Canada in ballast; and what proportion of ships sailing have been short-loaded.
    The Minister of Transport (Mr. Barnes): During the past six months, 650 British ships, other than oil tankers and troopships, have sailed from this country to North America. All available outward cargo for North America was lifted, but for lack of such cargo 490 ships sailed in ballast and 135 of the remainder carried part cargoes only.
    Sir Waldron Smithers: May I ask the Minister whether this is not further evidence of the futility of State control in shipping?
    Mr. Barnes: Not at all.
    Mr. Douglas Marshall: Can the Minister say whether these vessels had to purchase bunkers with United States dollars?
    Mr. Barnes: Yes, Sir.
    Major Cecil Poole: Can the Minister say whether, when these ships were not fully chartered, they were in the hands of private enterprise?
    Mr. Barnes: A good many of them were.

    Merchant Navy Reserve Pool
    Mr. James Callaghanasked the Minister of Transport if there is any intention of closing down or modifying the operation of the Merchant Navy reserve pool.
    Mr. Barnes: As I informed my hon. Friend the Member for Kirkdale (Mr. Keenan) on 2nd December, the present arrangement will terminate at the end of this year, but the National Maritime Board have, for some time, had under consideration the question of possible future arrangements. At the request of that Board, the Government furnished them, at the end of October, with information on a number of points that will arise if the Board should decide to proceed with an approved arrangement for the supplementation of benefit under the Un employment Insurance Acts and the corresponding provisions of the National Insurance Act of 1946.
    Mr. Callaghan: Is my right hon. Friend aware that this news will be received very badly among a large number of seafarers? May I ask whether coloured British sea men will have at least as good treatment as white British seamen in the new arrangements?
    Mr. Barnes: I cannot reply definitely on the question of coloured seamen, but if my hon. Friend indicates that our own seamen are receiving good treatment, we will certainly bear in mind the claims of coloured seamen.
    Mr. J. J. Robertson: Is my right hon. Friend satisfied that in future the conditions will be adequate to protect merchant seamen against the bad conditions which they have had in the years between the wars?
    Mr. Barnes: I am unable to say at the moment whether they will be adequate, but I am watching this matter with very careful interest.
    Lieut.-Commander Gurney Braithwaite: Is not the announcement which the right hon. Gentleman has just made in some

    731
    conflict with the very definite pledge on this matter given by the right hon. Gentleman the Foreign Secretary when he was Minister of Labour in the Coalition Government?
    Mr. Barnes: No, I do not think so. At the moment, as I have indicated, this matter is under consideration by the National Maritime Board, which is fully representative of both sides of the industry.
    Mr. Hector Hughes: When the pool is closed down, what does the Minister pro pose to substitute for it in order to prevent chaos?
    Mr. Barnes: As I have indicated, I am awaiting an announcement of the arrangements made by the National Maritime Board which, I repeat, is representative of both sides of the industry.

    ss. "Maloja" (Accommodation)
    Mr. Dodds-Parkerasked the Minister of Transport whether he is aware that the British-India ss. "Maloja" recently arrived in Mombasa from London with a large number of vacant berths, and only partially loaded with cargo; and, in view of the urgent demand for facilities for carrying passengers and goods to East Africa, why there was such waste of passenger and cargo space in this ship.
    Mr. Barnes: All but four of the 424 cabin and dormitory Berths in the troop transport "Maloja" were full when the ship left this country for Port Said, Mombasa and Durban. A small number of the passengers disembarked at Port Said, but a greater number joined the ship. The troopdeck accommodation is unsuitable for civilian passengers. Very little space was available for cargo after providing for mail and baggage, and there was no suitable outward cargo offering for shipment.

  RAILWAYS

    Thefts
    Mr. William Shepherdasked the Minister of Transport what was the loss sustained by the railway companies by pilferage in 1945 and 1938, respectively.
    Mr. Barnes: In 1945 the four main line companies and the Cheshire Lines Committee paid £2,525,405 in respect of
    732
    641,389 claims for articles lost or stolen. This compares with a payment of £180,462 in respect of 151,426 claims in 1938. I regret that separate figures for pilferage are not available.
    Mr. Shepherd: Is the Minister able to tell us what has happened during this year; and would he say whether he considers there is any relation between this obvious decline in public morality and the success of the Government at the polls last year?
    Mr. Hector Hughes: Is the Minister aware that this is due to the practice of leaving goods wagons unattended and un locked in sidings; and can he tell us in how many cases there were prosecutions and in how many there were convictions?
    Mr. Barnes: I cannot answer the latter part of the supplementary question with out notice, but I would assure my hon. and learned Friend that all possible pre cautions are taken by the companies.
    Mr. Skeffington-Lodge: Can the Minister say whether there has been any diminution in thieving recently?

    Absenteeism
    Mr. Shepherdasked the Minister of Transport if he will give figures relating to absenteeism on the railways at the pre sent time.
    Mr. Barnes: With the hon. Member's permission I will circulate the information in the OFFICIAL REPORT.
    Mr. Shepherd: Can the Minister give us a rough idea of the percentage involved in his answer?
    Mr. Barnes: I would suggest that the hon. Member should await the communication to which I referred. The matter is too complicated to be dealt with in reply to a supplementary question.
    Major Poole: When the Minister sup plies the figures, will he also supply figures showing the absenteeism of directors from board meetings?
    Mr. Sparks: Is the Minister aware that very long hours are being worked by the operative grades and that there are serious shortages of railway staffs?
    Mr. Barnes: Yes, Sir. but that is in evitable in present circumstances.
    Following is the statement:

    ABSENTEEISM ON RAILWAYS

    (Week ended 16th November, 1946).

    (Information in respect of four Main Line Railways and the Railways of L.P.T.B.)

    Note.—Absences from duty exclude those due to sickness or accident.

    Number of staff absent from duty on week-days during week in question for:

    Conciliation Staff.

    Workshop Staff.

    Number.

    Per cent. Total Staff.

    Number

    Per cent. Total Staff.

    1 day

    …

    …

    …

    …

    …

    9,683

    2·3

    6,629

    4·8

    2 days

    …

    …

    …

    …

    …

    1,711

    ·4

    985

    ·7

    3 days

    …

    …

    …

    …

    …

    507

    ·1

    275

    ·2

    4 days

    …

    …

    …

    …

    …

    200

    ·05

    85

    ·06

    5 days

    …

    …

    …

    …

    …

    145

    ·03

    52

    ·04

    6 days

    …

    …

    …

    …

    …

    714

    ·2

    190

    ·1

    Number of staff failing to report for duty on Sunday, November 10th.

    Number

    Per cent, of staff required for duty

    Number.

    Per cent, of staff required for duty.

    4,544

    3·6

    2,521

    1·6

    Goods Delivery (Embargo)
    Brigadier Mackesonasked the Minister of Transport what embargoes affecting East Kent have recently been placed on railborne goods; and what steps are being taken to ensure that no further embargoes are imposed.
    Mr. Barnes: The position, of course, varies from day to day, but this morning the main restrictions on acceptance of traffic, other than coal and perishable traffic consigned to stations in East Kent, in force are from stations north of a line roughly from the Mersey to the Wash and from all companies' stations via L.M.S. London junctions. As I have already stated the present difficulties are due in the main to shortage of locomotives and all practicable steps are being taken to relieve the situation and to ensure the most effective use of the engines avail able.
    Sir W. Smithers: Why did the Government export 720 railway engines in the first nine months of this year?
    Mr. Barnes: That question should be put to my right hon. and learned Friend the President of the Board of Trade, or to my right hon. Friend the Minister of Supply.
    Sir W. Smithers: It was,, but he did not answer.

    Employees (Retiring Age)
    Mr. Sparksasked the Minister of Transport how many officers of all classes
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    at present employed by the railway com panles are above the normal retiring age; and what proportion they bear to the total number of officials employed.
    Mr. Barnes: The number of staff in receipt of salaries of £500 per annum, excluding war advance, and over, employed by the main line railways or on the rail ways of the London Passenger Transport Board is 3,139 and of these 33 or approximately one per cent, are above the age of 65 years.
    Mr. Sparks: While I appreciate the valuable services rendered by officers and staff above the retiring age during the war, may I ask the" Minister whether, in view of the new and urgent problems in the postwar years, he does not think that the railway management should contain a larger proportion of younger, more active and virile minds if these postwar problems are to be solved?
    Mr. Barnes: That may be so, but at the moment I think anybody who desires to remain in the service can be usefully employed.

    Traffic Operations
    Mr. Sparksasked the Minister of Transport what steps he is taking to arrest the steady deterioration in railway traffic operations, particularly in regard to general merchandise, coal and mineral traffic.
    Mr. Scott-Elliotasked the Minister of Transport what steps are being taken

    735
    to alleviate the shortage of locomotives and rolling stock which has existed since the cessation of hostilities.
    Mr. Barnes: As I have already indicated, movement by rail is being ham pered by shortage of serviceable engines and wagons and by the poor condition of much of the stock. The remedy lies in a substantial measure of replacement and this is being speeded up as much as our resources permit. Meanwhile, all avail able means are being used to relieve the situation. With the co-operation of my right hon. Friend the Minister of Supply I am endeavouring to arrange for the repair of a number of engines returned from war service on the Continent. Two senior railway officers have been appointed to investigate operation in order to ensure the utmost fluidity throughout the railway system and to see that capacity both of existing stock and of the workshops is used to the best advantage. A number of passenger trains are being withdrawn to release engines for coal and other freight traffic. I have asked the railway and engineering unions for a special effort over the next three months to increase train movements, especially at week-ends, and output of repairs and construction of rolling stock.
    Colonel Gomme-Duncan: May I ask the Minister whether, in his opinion, this is not another case showing the futility of exporting locomotives while this frightful shortage exists in this country?
    Mr. Erroll: Why will the Minister not permit the railway c6mpanies to use the large number of War Department type locomotives at present lying rusting in sidings in Kent in full working order, in stead of putting out this pious explanation?
    Mr. Barnes: There are certainly no engines in good condition rusting in any part of the country. If the hon. Gentle man has any information to that effect and cares to furnish me with it, I will certainly have the matter investigated.
    Colonel Gomme-Duncan: May I have an answer to my supplementary question?
    Mr. Speaker: It does not arise out of the original Question.

    Service, Liverpool Street—Hertford
    Mr. Derek Walker-Smithasked the Minister of Transport why the 6.40 p.m. train from Liverpool Street to Hertford on
    736
    the evening of 2nd December was 51 minutes late in arriving at Waltham Cross, a distance of only 12¾; and what steps he proposes to take to safeguard the train-users of Hertfordshire from such delays.
    Mr. Barnes: On 2nd December engine maintenance difficulties at the locomotive depot delayed the start of the 6.40 p.m. train from Liverpool Street to Hertford for 19 minutes. At Tottenham the engine failed and time was lost in changing it. A further 10 minutes were lost because the train was then running out of schedule, and I am informed that it arrived at Waltham Cross 40 minutes late. I regret that, in present circumstances, it is not practicable to avoid delays of this kind.
    Mr. Walker-Smith: Is the Minister aware that these delays are sadly typical of the line running from Liverpool Street to Hertford; will he not take some measures to try to get this service better; and, finally, is he aware that the only reason I do not give notice that I will raise this matter on the Adjournment is because I have already been balloting for some time in order to do so?
    Mr. Barnes: I quite appreciate the difficulties on this line. It is not easy in a matter of months to overtake the deterioration of the past years.

    New Wagons (Requisitioning)
    Sir J. Mellorasked the Minister of Transport why he authorised the Requisitioning of New Privately-owned Railway Wagons Notice (S.R. & 0., 1946, No. 2011); and why 16th December, 1946, was selected as the date of the requisition.
    Mr. Barnes: On the outbreak of war in 1939, privately-owned wagons except those of certain specially exempted types, were requisitioned so that they should be operated in a pool with railway-owned wagons. This enabled substantial operating economies to be effected and has greatly helped the railways in dealing with the heavy volume of traffic. New requisitioning notices have to be made from time to time to cover wagons built since the date of the original notice. No special significance attaches to the date on which the notice becomes effective.

    Diesel Locomotives
    Mr. Errollasked the Minister of Transport what steps the main line rail-

    737
    way companies are taking to introduce diesel-electric locomotives for long distance passengers and freight services.
    Mr. Barnes: The railway companies are giving this matter close attention. The L.M.S. have two diesel locomotives on order for experimental purposes. The Southern Railway are proposing to carry out trials. The hon. Member may also like to know that the G.W.R. have placed orders for two gas turbine locomotives for use on long-distance services.
    Mr. Enroll: Can the Minister say what the L.N.E.R. are doing?
    Mr. Barnes: Not at the moment.

    Provincial Stations (Name Signs)
    Mr. Awberyasked the Minister of Transport if he is aware of the difficulties caused to railway passengers in the provinces owing to the small number of signs on the stations indicating the name; and if he will take steps to have the names of the stations prominently displayed in more than one place at all stations.
    Mr. Barnes: Experiments to improve the effectiveness of station name signs are being carried out by the railway companies.

  TRANSPORT

    Transport Bill
    Sir John Mellorasked the Minister of Transport what consultations took place between his Department and interested bodies before the Transport Bill was introduced.
    Mr. Barnes: I have had discussions—some of them informal—in the past few months on the subject with a number of organisations representing trade, industry, agriculture and transport. In addition many representative bodies have provided me with information about their transport requirements.
    Sir J. Mellor: Will the Minister say in particular what consultations he has had with the railway companies and the road haulage interests?
    Mr. Barnes: I have had no direct negotiations on the lines suggested by the hon. Baronet, but this matter has been discussed with representative bodies in a general way.
    Sir J. Mellor: Is not the right hon. Gentleman interested in the views of the railway companies and those of the road haulage interests?
    Mr. Barnes: Very much interested.
    Major Legge-Bourke: Has the right hon. Gentleman been in consultation with representatives from the horticultural industry who are particularly affected?
    Mr. Barnes: I have met agricultural representatives. I could not say whether that covered horticultural interests or not.
    Mr. Lipsonasked the Minister of Transport how many additional appointments will be required with separate figures for men and women, to administer the proposals in the Transport Bill.
    Mr. Barnes: I am not at present able to state what, if any, net addition to existing staffs will be required.
    Mr. Lipson: Will my right hon. Friend give an assurance that on the Second Reading of the Bill he will have that information, because it is of very great importance?
    Mr. Barnes: Certainly not. I cannot indicate on the Second Reading of the Bill what staffs will be required. I cannot do that until the Commission has had an opportunity of examining the staffs.
    Lieut.-Colonel Sir Thomas Moore: Could the right hon. Gentleman inform us exactly what is the target figure of the Government in regard to the strength of the Civil Service?
    Mr. De la Bère: Is the right hon. Gentle man aware that the greatest problem we have today is the acute shortage of man power? Why add to the shortage by this addition of non-productive people?
    Mr. Barnes: I would remind the hon. Gentleman that that is just what I resisted doing in reply to this Question in refusing to anticipate a demand that at the moment is not there.

    Appeal Tribunals
    Wing-Commander Hulbertasked the Minister of Transport if he will now make a statement about further appointments to complete the constitution of the appeal tribunals which he is required to set up under the provisions of Section 15 of the Road and Rail Traffic Act, 1933, or when he anticipates being able to do so.
    Mr. Barnes: I am re-appointing Mr. E. S. Shrapnell-Smith, C.B.E., to be a member of the Road and Rail Appeal Tribunal. I regret I am not yet in a position to announce the name of the second member, but hope to be able to do so before the Recess. The Chairman is Mr. Gleeson E. Robinson, lately Com missioner for the Metropolitan Area.

    Neasden Power Station (Boiler Conversion)
    Mr. Errollasked the Minister of Transport for what reasons he approved the conversion of the L.P.T.B.'s Neasden power station to fuel-oil burning; and by how much will the operating costs be in creased.
    Mr. Barnes: The conversion of certain boilers at Neasden power station from pulverised fuel to oil fuel is being carried out by the London Passenger Transport Board, and is not a matter for which my approval is necessary. The conversion would reduce the serious dust nuisance to residents in the vicinity. The estimated additional operating cost will be approximately £45,000 per annum on the basis of existing prices for coal and oil fuels.
    Mr. Erroll: Can the Minister say whether this is a temporary or a permanent measure, in view of the very serious increase in operating costs?
    Mr. Barnes: Permanent.

  ROADS

    Driving Examiners
    Wing-Commander Roland Robinsonasked the Minister of Transport the reasons for refusing to consider applications for the position of driving examiner from men who were born before August, 1905; whether he is aware that this age discrimination bears unfairly against many ex-Servicemen; and whether he will take steps to remove it.
    The Parliamentary Secretary to the Ministry of Transport (Mr. G. R. Srauss): As I explained during the Second Reading Debate on the Road Traffic (Driving Licences) Bill, the upper age limit of 41 for applicants for the post of driving or traffic examiner was fixed after consideration of all factors including the ages of the present staff. With a view to affording opportunities for ex-Servicemen the
    740
    upper age limit was fixed six years higher than would otherwise have been justified.
    Wing-Commander Robinson: In view of the shortage of manpower, is not the Minister setting a thoroughly bad example by refusing to employ men over 41 years of age in jobs which they could perform adequately?
    Mr. Strauss: No, Sir. It is essential in this group of examiners to have a balance from the point of view of age. Most of the existing examiners are getting on in age, and it is essential to have younger ones.
    Mr. R. S. Hudson: Is the Minister aware that his colleague the Minister of Labour not very long ago sent a circular to employers asking them to give special consideration to men over 45 years of age, in view of the difficulties which men of that age are meeting, and why does not the Ministry of Transport set an example?
    Mr. Strauss: That may well be, but the work of an examiner is very strenuous, and most of our present examiners come from the prewar staff and are elderly. It is essential to have the balance of a young group of fresh entrants.
    Mr. Leslie Hale: In view of the fact that many persons driving on the road are now 80 or more years of age, why should men of 50 years of age who have served for years in the Forces be debarred?
    Mr. Strauss: In view of the consider able age of our prewar examiners, it is better that we should have that balance of younger people of a maximum age of 41. It does not debar ex-Servicemen.
    Wing-Commander Robinson: I beg to give notice that owing to the unsatisfactory answer I propose to raise the matter on the Adjournment.

    Transport Facilities, Preston
    Wing - Commander Shackletonasked the Minister of Transport what steps he has taken to relieve the transport difficulties of workers in Preston and district.
    Mr. Barnes: As I have informed my hon; and gallant Friend, a local conference was held to investigate the com plaints and, as a result, the local trans port consultative committee was revived

    741
    to devise means of relieving the difficulties. The committee has held three meetings so far, and some improvements have already been made in the services.
    Wing-Commander Shackleton: Is the Minister aware that according to reports which I have received from the workers' representatives, practically no improvement has taken place; that production is being lost at some of Leyland Motor Works, who are losing keymen because there are not transport facilities; that, quite apart from the hardship that is being suffered by the workers, it is a matter of the greatest urgency; and will he press this on the regional traffic commissioners?
    Mr. Barnes: Certainly some of the points made by my hon. and gallant Friend do not accord with my information, and I will look further into the matter.

    Licence Holders, Kent and Sussex
    30 Brigadier Mackesonasked the Minister of Transport if he will give an estimate of the number of A, B and C licence holders in the coastal towns of Kent and Sussex whose vehicles proceed inland beyond a 40-mile radius.
    Mr. Barnes: Exact figures are not avail able, but I am informed that there are probably some 200 licence holders in these towns, who operate on a substantial scale beyond a 40-mile radius from their base, and some 600 who do so occasionally. These figures must be taken as rough estimates. I am not in a position to give separate figures for A, B and C licensees.
    Brigadier Mackeson: Is not it very desirable that the Minister should1 take the trouble to obtain the requisite data before introducing legislation of a highly controversial and dangerous nature?
    Mr. Barnes: We have the general in formation, but to break it down into districts would mean unnecessary labour, in view of the shortage of labour.

  MINISTRY OF SUPPLY

    Woolwich Arsenal
    Major Bramallasked the Minister of Supply if he will cause an inquiry to be held and a report issued on the future
    742
    work and staffing position of Woolwich Arsenal.
    The Minister of Supply (Mr. John Wilmot): No, Sir. These matters are under continuous review and I see no reason for a special inquiry.
    Major Bramall: Will my right hon. Friend bear in mind that although they may be under continual review in his mind, that is not apparent to the very large number of people who have to earn their livelihood there; and that there is very great concern over the fate of these workers in a wide area?
    Mr. Wilmot: The staffing and the work at the Arsenal are a matter of continual tension and action.
    Sir W. Smithers: And Wilmot?
    Mr. Wilmot: Sometimes. I do not think there is any need for an inquiry.
    Mr. George Hicks: Would my right hon. Friend state whether this matter is being considered in conjunction with the other royal ordnance factories?
    Mr. Wilmot: Certainly, and with the joint industrial council concerned.

    Irish Workers (Lodging Allowance)
    Mr. Manningham-Bullerasked the Minister of Supply the number of men from Eire and Northern Ireland, respectively, now employed in his Department's depots in England; and what subsistence allowance is payable to such men.
    Mr. Wilmot: Ninety-one men from Eire and 90 from Northern Ireland are now employed in Ministry of Supply storage depots. A lodging allowance of 24s. 6d. a week is being paid to 64 of them.

    Ex-Servicemen (Redundancy Discharges)
    Mr. Manningham-Bullerasked the Minister of Supply whether he will terminate his present policy of discharging on the ground of redundancy, ex-Servicemen employed in his Department's depot, while retaining in such employment Irish workers who did not serve in the Armed Forces, on the ground that their length of service in such depots exceeds that of the ex-Servicemen.
    Mr. Wilmot: This policy is in accordance with an agreement reached on the Ministry of Supply Joint Industrial Council in August of last year. I have arranged for it to be reviewed immediately.
    Mr. Manningham-Buller: Would the right hon. Gentleman say whether, before initiating this policy, he consulted the British Legion, and whether he secured any agreement with them with regard to it; and does the right hon. Gentleman appreciate that the present policy, while it may provide full employment for Irish workers and conscientious objectors, does lead to unemployment among ex-Servicemen who are recommended to the Ministry by ex-Servicemen's associations?
    Mr. Wilmot: I would rather leave it at the moment, and say that the matter is being reviewed.

    Aircraft Engines (Noise Elimination Device)
    Mr. Symondsasked the Minister of Supply if he will investigate the claim, particulars of which have been sent to him, of the development by the Ryan Aeronautical Corporation in the U.S.A., of a light-weight stainless-steel muffler to eliminate 90 per cent, of the noise in 65-85 horsepower aircraft engines; and if he will arrange for the muffler, if successful, to be produced in this country and to be fitted to all training aircraft used near centres of population.
    Mr. Wilmot: We have asked for particulars from America to enable us to make a full technical examination of this device.
    Mr. Symonds: Will the right hon. Gentleman keep the Air Ministry informed, as most of the trouble is caused by Tiger Moths used by the E.F.T.S.?

    Estate, Kingsdown (Communal Centre)
    Mr. Thomas Reidasked the Minister of Supply if, in view of the need for a communal centre on the Ministry of Aircraft Production estate at Kingsdown, near Swindon, and of the fact that the residents are willing to erect it with voluntary labour, he will supply an Army hut for the purpose.
    Mr. Wilmot: This matter is at present being discussed with the local education authority concerned.

    Street Lighting, Moredon and Kingsdown
    Mr. T. Reidasked the Minister of Supply if he proposes to have street lighting installed in the Ministry of Aircraft Production estates at Moredon and Kings-down, near Swindon.
    Mr. Wilmot: Yes, Sir.

    Commercial Vehicles (Production)
    Mr. Hobsonasked the Minister of Supply how the present production of commercial vehicles compares with production before the war; and what proportion of the total vehicle production this represents in each case.
    Mr. Wilmot: Present production of commercial vehicles is about 50 per cent, higher than before the war. The proportion of commercial vehicles in the total vehicle output was a little over 20 per cent, before the war and is 40 per cent, at present.

    Locomotives (Output)
    Mr. Scott-Elliotasked the Minister of Supply what was the total output of locomotives in each of the first three quarters of 1946; how many of these were allocated for use at home and how many exported; and, in view of the needs of the British railways, if he will consider making a greater proportion of loco motives available for home use.
    Mr. Wilmot: As the answer contains a number of figures, I will, with my hon. Friend's permission, circulate it in the OFFICIAL REPORT.
    Following is the answer:
    The output of steam locomotives from railway and privately owned shops combined was 164 in the first, 220 in the second, and 181 in the third quarter of 1946. In the first quarter, 63 were for the home railways, 13 for home industrial firms and 88 for export; in the second quarter, 87 were for home railways, 21 for home industrial firms and 112 for export; in the third quarter, 74 were for home railways, 13 for home industrial firms and 94 for export. As regards the second part of the Question, I would refer my hon. Friend to the reply which I gave to the hon. Member for Orpington (Sir Waldron Smithers) on 26th November.

    Ordnance Factory, Radway Green (Production)
    Mr. Harold Daviesasked the Minister of Supply when Radway Green factory, near Crewe, is likely to be in production.
    Mr. Wilmot: If my hon. Friend refers to the royal ordnance factory at Radway Green, this factory has been in production for six years.
    Mr. Davies: I consider that that was a ridiculous answer. The Minister may deal flippantly with a Question like that, but there are many people in the adjacent areas—Kidsgrove, for instance—who have been out of work since the factory completed armament production, and we are concerned about consumer production from that factory.
    Mr. Wilmot: If my hon. Friend is referring to the production of cookers in this factory, as perhaps he is, that production begins early next month.
    Mr. Davies: Thank you.
    Air-Commodore Harvey: Will the right hon. Gentleman see that additional production is turned out from this factory, as there is great unemployment in South-East Cheshire because the factory is not going "flat-out"?
    Mr. Wilmot: The nature and volume of production in the royal ordnance factories have to be balanced with a number of other factors.

  HOUSING

    Bricks, Orpington
    Sir Waldron Smithersasked the Minister of Works if he will state the cause of the five months' delay in the delivery of bricks for work at Nos. 2, 4, 6, 8, 10 and 12, Malvern Road, Orpington.
    The Minister of Works (Mr. Tomlinson):The cause of this delay was explained in my written reply to the hon. Member on 25th November.
    Sir W. Smithers: As the Minister has—as may be seen from the Written Answers in the OFFICIAL REPORT for 25th November, 1946, Volume 430, column 220—already admitted making a mistake, causing inconvenience, will he take steps to avoid a repetition?
    Mr. Tomlinson: Certainly. I relied on outside information, and informed the hon. Member so.
    Sir W. Smithers: The right hon. Gentle man was wrong.

    Black Market Practices
    Mr. Baker Whiteasked the Minister of Works the number of builders convicted for black market offences in the period 1st July to 31st October, 1946, inclusive.
    Mr. Tomlinson: Yes, Sir. The number is 60.
    Mr. Baker White: Is the Minister aware that there are 163,000 building firms in the country, and that his answer makes complete nonsense of the allegation of the Minister of Health that there is a wide spread black market?
    Mr. Tomlinson: I do not think it does at all.
    Mr. Sparksasked the Minister of Works if he will call a conference of trade unions engaged in the building industry and employers' organisations with a view to the acceptance of measures of control which will stamp out black-market practices and fully mobilise the skill, labour and materials available behind the Government's housing programme.
    Mr. Tomlinson: I am already in consultation with the trade unions and employers' organisations through my National Consultative Council and I do not think that any useful purpose would be served by calling a special conference.
    Mr. Baker Whiteasked the Minister of Works if it was with his approval that the Birmingham Trades Council made an appeal to all building workers in the Midlands to supply information about black-marketing in the building trade; and if he will state the results of this particular appeal.
    Mr. Tomlinson: I am not aware that any appeal has been made by the Birmingham Trades Council to all building workers in the Midlands to supply information about illegal building work. The second part of the Question, therefore, does not arise.
    Mr. Baker White: Is the Minister aware that such an appeal was made, was published in the local and national Press.

    747
    including the Socialist paper the "Town Crier," and that, as a result, exactly one case was sent in throughout the whole of the Midlands, and that that case proved to be unfounded?
    Mr. Tomlinson: I was not aware of that, otherwise I should not have given the answer I did.
    Mr. A. Edward Daviesasked the Minister of Works how many cases of infringement of the Building Licence Regulations have been brought to the notice of his Department during the past 12 months; and in how many cases court action has been taken.
    Mr. Tomlinson: In the past twelve months 11,453 cases of suspected infringement have been brought to notice. In only 147 of these cases was I advised that the evidence was sufficient for prosecution, and those cases were taken to court.
    Mr. Davies: In view of the disproportionate number taken to court, does it not give the impression that we are fighting shy of this matter? Is the Minister pro posing to take any firmer action in the future against this black-market work?
    Mr. Tomlinson: Yes, Sir, I am already discussing with the associations of local authorities the possibility of local authorities making prosecutions rather than my Ministry, with a view to seeing that where there are prima facie cases, they shall be taken to the courts.
    Mr. Hicks: How many prosecutions were unsuccessful out of the small number of cases reported?
    Mr. Tomlinson: Only four cases were unsuccessful—there were 143 convictions out of 147.
    Mr. Manningham-Buller: Does that mean that the right hon. Gentleman's Ministry do not prosecute where there is a prima jade case, or is the disparity in the figures due to the fact that a large number of the allegations are unfounded?
    Mr. Tomlinson: There is something in both contentions. The Ministry submit evidence to the Director of Public Prosecutions, who decides whether a case is to be taken to the courts.

    Timber, Morden
    Mr. Palmerasked the Minister of Works why a supply of timber has been
    748
    refused for the erection of four houses in 309–315, Hillcross Avenue, Morden, for which cost-of-work payment has been authorised by the War Damage Commission, and for which the necessary licences have been issued by the local authority.
    Mr. Tomlinson: I regret that sufficient timber is not at present available to me a meet this and similar requirements for houses which are not at an advanced stage of construction.
    Mr. Palmer: When will it next be avail able?
    Mr. Tomlinson: I cannot say at the moment, but probably not until January.

    Steel
    Mr. Geoffrey Cooperasked the Minister of Works what tonnage of steel it is estimated will be needed for the temporary and permanent types of houses so far projected which have yet to be built.
    Mr. Tomlinson: In view of present un certainties, I am not in a position to give an estimate.
    Mr. Cooper: Will my right hon. Friend keep the situation under review to see that no undue quantities of steel are diverted to houses, in view of his statement, in a recent speech reported in the Press, that the supply of bricks is no longer a bottle neck in holding up the housing drive?
    Mr. Tomlinson: There is constant super vision from that point of view.
    Sir Ralph Glyn: Is the Minister satisfied that all the steel which can possibly be used has been taken away from blitzed buildings?
    Mr. Tomlinson: No, Sir; I will look at this point.

    Building Materials
    Mr. Cooperasked the Minister of Works from what sources the 324,000 building-trade operatives, recently engaged on non-priority work and maintenance of houses, obtained their supplies of building materials.
    Mr. Tomlinson: The supply of certain materials is sufficient to enable manufacturers and merchants to meet other demands after the requirements of priority work have been met.
    Mr. Cooper: In view of the fact that nearly one-third of the available building labour is being diverted to non-priority

    749
    work, does this mean that the W.B.A. priority scheme is failing adequately to operate, and, if so, will my right hon. Friend give consideration to the suggestions which have been put before him for improving the system of control?
    Mr. Tomlinson: We are always considering the possibility of improving the system of control. It does not mean that the W.B.A. scheme is not working because the work is not priority. Non-priority work may also be regarded as essential.
    Mr. Piratin: Can the Minister say whether it is true that people who receive W.B.A. priorities are able to obtain goods against them from more than one source?
    Mr. Tomlinson: Not without some dodging.

    Temporary Houses, Huntingdonshire
    Mr. David Rentonasked the Minister of Works whether he is aware that the 10 temporary houses allocated to St. Ives Borough Council, Huntingdonshire, the main parts of which were delivered in October, have not yet been completed, and that, meanwhile, fittings have been stored in temporary houses with no doors and without anybody keeping watch over them, and that children have been tampering with those fittings; and whether he will arrange for the houses to be completed at an early date, and the fittings to be properly preserved meanwhile.
    Mr. Tomlinson: The responsibility for the safe custody of the fittings rests with the contractor, and I am not aware that there has been any loss or damage. The doors and remaining equipment are now being delivered, and I hope that all the houses will be ready for occupation next month.
    Mr. Renton: In view of the serious shortage of these fittings, will the Minister make it clear to the contractors that the responsibility is theirs, so that these losses do not occur?
    Mr. Tomlinson: I have already made it clear to them.

    Building Licences
    Mr. Edward Daviesasked the Minister of Works if he will give an assurance that the local authority concerned is always consulted before the issue
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    of building licences by his regional departments.
    Mr. Tomlinson: The local authority concerned is always consulted before the issue of any licence relating to housing work, and in any other case where it is in a position to give useful advice. But in cases involving national considerations, or in exceptional circumstances, I must reserve the right to grant licences without such consultation.
    Mr. Davies: Does the procedure apply to cases where the local authorities turn down an application which the regional people review and grant what is required?
    Mr. Tomlinson: No, Sir, it does not refer to that. Steps are now being taken to make that impossible.

  CAMP, HOUNSLOW (MILITARY REQUIREMENTS)
  Mr. W. R. Williamsasked the Prime Minister whether he is aware of the concern felt by the Heston and Isle-worth Borough Council regarding the delay on the part of the Inter-Departmental Committee on Land Requirements in making a decision as to whether the 43 acres of land at Beaver's Lane, Hounslow, is to be acquired for military purposes, or whether such land, together with the hutments erected thereon, can be immediately surrendered for use by the council to provide housing accommodation urgently required; and what action he proposes to take in the matter.
  The Lord President of the Council (Mr. Herbert Morrison): I have been asked to reply. The camp is in full use by a primary training centre of the Regular Army and will be required for this purpose for some time to come. The Inter-Departmental Committee has not vet considered the question of the permanent retention of this camp, as it has bean full" engaged in considering proposals in respect of training areas. Arrangements are being made, however, for the committee to give special consideration at an early date to the future use of this camp.
  Mr. Williams: Is the Lord President aware that the delay in reaching this decision has been a serious handicap to the local authority in formulating their housing scheme? Can he, therefore, give

  751
  an assurance that the Inter-Departmental Committee will give urgent consideration to the matter?
  Mr. Morrison: I will see that the considerations to which my hon. Friend has drawn attention are brought to their notice. In the meantime, it is the case that the Regular Army will need the land for some time. But I will see that the points that he has mentioned are given consideration.
  Mr. Williams: The Lord President of the Council says that the Army requires accommodation, but may I point out to him the serious need of the people of Heston and Isleworth for housing accommodation?

  ARMS STANDARDISATION (ANGLO-U.S. DISCUSSIONS)
  Mr. Piratinasked the Prime Minister what decisions have been reached regarding the standardisation of arms in the discussions taking place between military representatives of His Majesty's Government and the U.S.A.
  Mr. H. Morrison: I have been asked to reply. No decisions have been taken. In view of the reciprocal exchange of weapons between the United States and the United Kingdom which took place during the war over a very wide field, and the existing cooperation between the respective Forces in the occupation of Germany, there have naturally been informal exchanges of views on continuing such standardisation in the interests of economy and efficiency. The general position of the Government here was made clear in the statement made by my right hon. Friend the Prime Minister in the Debate on the Address of 18th November.
  Mr. Piratin: Is the right hon. Gentleman aware that American newspaper reporters have stated that they have had their information from authoritative spokesmen of the War Office in this country? Does he, therefore, categorically deny that statement, thus informing the British public that it is untrue?
  Mr. Morrison: The hon. Member may be disposed to take everything that appears in the American Press at its face value, I am not.
  Mr. Oliver Stanley: Is the right hon. Gentleman aware that similar statements were made by the hon. Member for Gates-head (Mr. Zilliacus), and is that not much more important?
  Mr. Morrison: Of course, if any Member of this House makes a statement, I am bound to treat it with respect, but I should not take it as conclusive.

  JET AERO ENGINES (SOUND RESEARCH)
  Mr. Dumpletonasked the Lord President of the Council whether research is proceeding into the possible effects of supersonic sound upon the health of workers in the manufacture of turbo-jet aero-engines.
  Mr. H. Morrison: The Medical Research Council are making preliminary inquiries on the subject, and when these are completed consideration will be given to the question of a programme, of research.
  Mr. Dumpleton: Is the right hon. Gentleman aware that there is some anxiety in the minds of workers in the factories where these engines are being made as to the possible effect of the high frequency waves, and will he press on with the investigation being made?
  Mr. Morrison: I will see to it that my hon. Friend's point is taken into account.

  AGRICULTURE

    Spring Wheat (Acreage)
    Mr. Piratinasked the Minister of Agriculture what was the acreage of spring wheat sown in England and Wales in the years 1939, 1945 and 1946.
    The Minister of Agriculture (Mr. Thomas Williams): Farmers are not asked to make separate returns of the area under spring wheat, but it may be roughly inferred from other data that the acreage for the 1945 harvest was around—
    Mr. Piratin: On a point of Order. I cannot hear what the Minister is saying, and as I had occasion last week to put a supplementary question following an answer which I only half heard, may I ask him to speak up?
    Mr. Williams: I said that farmers are not asked to make separate returns of the area under spring wheat, but it may be roughly inferred from other data that the acreage for the 1945 harvest was around 350,000, and for the 1946 harvest around 150,000. Corresponding figures for the 1939 harvest are not available. These spring wheat acreages vary considerably from year to year according to weather conditions.
    Mr. Piratin: Is the Minister prepared to tell the House, therefore, that it was only a question of weather conditions which reduced the acreage from 350,000 to 150,000?
    Mr. Williams: Yes, Sir.

    Winter Flower-Growing Industry
    Mr. Beechmanasked the Minister of Agriculture whether he will take steps to ensure that the winter flower-growing industry in this country, which horticulturists are now working to reinstate, is given a reasonable opportunity to recover from its war-time sacrifices; and whether imports of flowers will be planned accordingly.
    Mr. T. Williams: Such steps as are practicable having regard to the serious shortages of fuel and other materials, and the continued need for food crops, are being taken to facilitate the recovery of the winter flower-growing industry. The limited imports of flowers announced for 1947 will not, in my view, impede this recovery.
    Mr. Beechman: While I appreciate the Minister's interest in this matter, and since the flower acreage in Cornwall has been cut during the war from 1,679 to 681 acres, and there has been no corresponding cut at all in France, may I ask if he will make the most strenuous representations to the Board of Trade that their intention to grant licences to import 500 tons of flowers from 15th December to 1st March gravely threatens our efforts to restore this industry and that there are many other things which could be imported?
    Mr. Williams: I am afraid the hon. Member is quite wrong in his conclusion. Of the 500 tons to be imported between 15th December and 15th February from
    754
    France, anemones and violets are excluded, as these are largely grown in Cornwall.
    Mr. Beechman: But what about daffodils and narcissi?

    Machinery (German Spare Parts)
    Commander Maitlandasked the Minister of Agriculture what action he has taken in regard to Report No. 13, of Final Report No. 829, on the German Agricultural Engineering Industry, which indicates that a large number of spare parts, suitable for British and U.S. agricultural machinery, are immediately available; and whether he will arrange to import the surplus of 74 per cent. production which the firm in question state is not required by the British zone.
    Mr. T. Williams: As I have informed the hon. and gallant Member by letter, small numbers of the spare parts have been flown over to this country. Further supplies cannot be released as these are required to meet the needs of German agriculture. In regard to the latter half of the Question, I understand that the figure quoted refers to the capacity of the firm in question and not to present production, which is limited by the scarcity of raw materials.
    Commander Maitland: Will the Minister tell me why this report, which indicated that the spares were available, was not vetted in conjunction with the German authorities before it was sent over here, and if those parts were not required in the British zone in Germany, why on earth were they not got much sooner?
    Mr. Williams: I can only tell the hon. Member the result of our investigations, and not who was responsible for the report to which he refers.

  HOUSE OF COMMONS CATERING

    Private Functions (Staff Duties)
    Mr. Hobsonasked the hon. Member for Walthamstow, West, as Chairman of the Kitchen Committee, if, when rooms are booked for private functions, it involves an alteration in the rostered working hours of the staff; and, when extra hours are worked, whether overtime is paid and at what rate.
    Mr. McEntee: Duty rosters for private functions are posted each Friday for the following week. It is understood and agreed by the management and the staff that such rosters are subject to the exigencies of the service and may be varied; variations are, however, very rarely necessary. In regard to the latter part of the Question, I would refer my hon. Friend to the reply which I gave to the hon. Member for Salford, North (Mr. McAdam) on 14th February last, the terms of which have been approved. May I remind hon. Members that there is a joint negotiating committee consisting of three members of the Kitchen Committee and three members elected by the staff, with right of appeal to the full Kitchen Committee, and we would appreciate it if matters relating to administration and staff duties could be left for settlement to that committee.

    Assistant Manager (Appointment)
    Sir W. Smithersasked the hon. Member for Walthamstow, West, as Chairman of the Kitchen Committee, what are the salary and allowances in kind of the newly-appointed assistant manager; and if members of the staff of long standing were given the opportunity to apply for the post, in view of the desirability of giving promotion to old servants of this House with many years of experience and knowledge of the requirements of hon. Members and their friends.
    Mr. McEntee: The post was publicly advertised at a salary of from £450 to £550 per annum according to the experience of the applicant, and the person appointed will receive the maximum figure. The only allowance in kind is meals when on duty. It was open for anyone to apply for the post, and the successful applicant was considered to have the most useful experience and the highest qualifications.
    A person aspiring to fill this post must know not only the requirements of hon. Members and their friends, but how to satisfy them; he must have had experience in the kitchen and in the office; he must know how to select food, drink and equipment, where and how to buy, and to preserve it and keep it in good condition; how to assess the quality and quantity of the stocks required and to keep accurate records. He should know
    756
    how to recruit and to retain a suitable staff, to look after their welfare and to maintain discipline. In the absence of the General Manager he should be able to provide an efficient service.
    Sir W. Smithers: Who could be better qualified for this post than the old and respected friends of hon. Members of this House who have been here for years, and why should the men we have known as friends for years be treated with contempt?
    Mr. McEntee: I have already said it was open to anybody to apply. None of the persons referred to applied, but in any circumstances, the fact that a man has been in the service of the House for years does not necessarily make him a good assistant manager.
    Mr. Challen: Does the hon. Gentleman really think it is fair towards the existing staff merely to put an advertisement in an evening paper, and not to give them a particular intimation inviting them to apply?
    Mr. McEntee: All the staff were well aware that the post had been advertised publicly, and that it was open to anybody who so desired to make application. In fact, none of them made such application.
    Mr. Henry Strauss: In the event of a man being found possessing all the qualifications stated by the hon. Member, ought not the man to be made Minister of Food?
    Sir W. Smithers: What would the hon. Member do if the whole of the staff walked out?
    Mr. McEntee: The staff are perfectly well satisfied where they are. and they will not walk out.
    Mr. Speaker: Sir Waldron Smithers.
    Sir W. Smithers: Will the hon. Member—
    Mr. Speaker: We cannot pursue this Question any further. I was calling the next Question.

  MINISTRY OF WORKS

    Builders' Registration Certificates
    Sir W. Smithersasked the Minister of Works what steps are taken to ascer-

    757
    tain the qualifications of persons who apply for a certificate of registration as master builders.
    Mr. Tomlinson: I would refer the hon. Member to the reply given to the hon. Member for Hendon, South (Sir H. Lucas-Tooth) on 29th October.
    Sir W. Smithers: Is the Minister aware that many gentlemen appointed to this industry have had no previous experience, and will he see that people are not allowed to undertake building without proper qualification?
    Mr. Tomlinson: This control was removed in March of this year, and the hon. Member is asking us to reimpose it.

    Putty
    Lieut.-Colonel Bromley-Davenportasked the Minister of Works whether he is aware that building operations are now being held up through a shortage of putty; and what steps are being taken to remedy this shortage.
    Mr. Tomlinson: There is, of course, a general shortage of putty due to the temporary world shortage of linseed oil, and it has not so far been possible to find a satisfactory substitute for linseed oil in putty. I have, however, taken steps to arrange for supplies for priority work.

    Requisitioned Hotels, Lancashire (Release)
    Brigadier Fitzroy Macleanasked the Minister of Works the intention of his Department with regard to the derequisitioning of the 10 hotels in Morecambe and Heysham which have been under occupation by evacuated Government Departments since 1939.
    Mr. Tomlinson: The clearance of these hotels is dependent on building at Morecambe for a part of the staff and on the transfer of other staffs to London where alternative accommodation has still to be made available. I am afraid, therefore, that I cannot give a date for the release of the hotels but it is my intention to derequisition them at the earliest possible moment.
    Brigadier Maclean: Is the Minister aware that the town of Morecambe is largely dependent on the hotel industry for its prosperity, and that the continued wholesale requisitioning of hotels imposes
    758
    a very severe handicap upon it, and will he take steps to relieve it of that handicap?
    Mr. Tomlinson: Yes, Sir, at the earliest possible moment.
    Brigadier Macleanasked the Minister of Works his Department's intentions in regard to the King's Arms Hotel and County Hotel, Lancaster, both of which have been requisitioned since the beginning of the war on behalf of the Canadian Treasury.
    Mr. Tomlinson: The Canadians hope to vacate the King's Arms Hotel early next year and the hotel will then be derequisitioned. The requisitioning of the County Hotel, which the Canadians have vacated, is being continued with the owners' agreement. It is being adapted for use as a hostel. Huts in the grounds, which this Ministry erected during the war, will be used as offices.
    Brigadier Maclean: Is the Minister aware that there is at present practically no hotel accommodation in Lancaster and that official guests of the municipality have to be accommodated as far as 50 miles away at Ulverston, and will he take steps to put an end to that situation?
    Mr. Tomlinson: I have taken steps to the extent that is possible, but the fact that the owner is quite willing to allow us to continue to use it seems to be one of which we ought to take advantage.

    Building Industry (Apprentices)
    Mr. H. D. Hughesasked the Minister of Works how many apprentices in the building industry have been notified to the local Joint Apprenticeship Committees; how many of these have been registered; and if he is satisfied with the progress made in clearing up arrears of registration.
    Mr. Tomlinson: About 103,000 apprentices in the building industry have been notified to local and area joint apprenticeship committees and about 6,000 have been registered. I am disappointed that greater progress has not been made and I am taking up the matter with the industry.
    Mr. Hughes: Is the Minister aware that owing to the deadlock in the operation of

    759
    this scheme by local joint apprenticeship committees many boys who would, if registered, be exempt from call-up are in fact being called up for the Forces, thereby prejudicing the intake of labour into the building industry; and will he take emergency measures to see that these boys are registered as soon as possible?
    Mr. Tomlinson: I will look into that aspect of the matter.

  INDIA

    Food Situation
    Mr. Godfrey Nicholsonasked the Under-Secretary of State for India the approximate number of persons in India who are rationed for grain; and what those rations are.
    The Under-Secretary of State for India (Mr. Arthur Henderson): More than 150,000,000 people in India are now subject to various schemes of cereals rationing. The basic daily cereals ration for adults in India is 12 ounces. There have, however, been cases recently of inability on the part of some Provincial and State authorities to provide the cereals ration in full.
    Mr. Nicholson: Can the Under-Secretary assure the House that both the Indian Government and the Government in this country are fully aware, not only of the gravity of the situation, but of its future menacing nature, and that the case of India will not be allowed to go by default in international food circles?
    Mr. Henderson: If the hon. Member had read the statement I made last week, he would have seen that that assurance was forthcoming.
    Mr. Hector Hughes: Can the Under-Secretary say how far this rationing will go towards preventing famine in India?
    Mr. Henderson: The object of this rationing is to avoid it.
    Mr. Hughes: I said "how far."
    Mr. Henderson: I could not say without notice.
    Mr. Nicholsonasked the Undersecretary of State for India whether he can say anything about the prospects of the coming harvest.
    Mr. A. Henderson: I would refer the hon. Member to the statement circulated to the House of this subject on 2nd December, in reply to the hon. Member for Aylesbury (Sir S. Reed), to which I have nothing to add at present.

    Communal Disturbances (Investigations)
    Mr. Nicholsonasked the Undersecretary of State for India when the commission set up by the Bengal Government in September last to inquire into the August riots in Calcutta is expected to report; whether this commission, or any other, will also inquire into the disturbances in Eastern Bengal, in October; and whether the Government of Bihar will set up a commission to inquire into the disturbances of October and November in that Province.
    Mr. Wyatt: On a point of Order, Mr. Speaker. As Provincial Governments exist in all these Provinces, is it in Order for Questions such as this to be put in this House?
    Mr. Speaker: The point is that British troops must have been employed, and if one soldier is employed, then responsibility rests here, and the Question may be asked.
    Mr. A. Henderson: I am informed that the Commission of Inquiry into the Calcutta disturbances is not yet able to forecast when its report will be ready. Its work is proceeding as expeditiously as possible, but there is still a large number of witnesses to be examined. The Commission's terms of reference cover the disturbances in Calcutta between the 16th and 20th August only. I am informed that the Government of Bengal do not intend that this or any other commission should investigate the disturbances in Eastern Bengal. As the House was informed on 4th November, however, two senior judicial officers of the Indian Civil Service were deputed by the Government pf Bengal to visit the areas affected and to report on what had occurred. I am informed that the Government of Bihar do not contemplate setting up a commission of inquiry into the recent disturbances in that Province.
    Mr. Nicholson: Is the Under-Secretary aware that his reply will cause some anxiety in this country, because we in this

    761
    House feel a sense of responsibility for law and order, owing to the terms of the India Act?
    Mr. Henderson: Parliament has conferred the responsibility for law and order, under the 1935 Act, on the Provincial Governments, and it is not possible for His Majesty's Government to withdraw powers which Parliament has conferred upon Provincial Governments.
    Mr. Nicholson: May I remind the Under-Secretary that there are special responsibilities attaching to the Governor?
    Mr. Henderson: Yes, Sir, there may be a special responsibility in respect of a situation such as I described in a former reply where the security of the country is gravely menaced, but for all questions coming under the label of "law and order," it is the responsibility of the Provincial Governments and not of His Majesty's Government.
    Mr. Nicholson: I would press this point, and ask the Under-Secretary whether he does not consider the state of law and order in these Provinces was very gravely affected indeed by the large number of subjects of the King Emperor who were massacred?
    Mr. Wyatt: Is not the real point that unless the Governor decides to exercise his special responsibility, it remains entirely the responsibility of the Provincial Governments, and that the British Government have no power over them at all?
    Mr. Henderson: I tried to make it clear that it is the responsibility of the Provincial Governments to maintain law and order. When conditions arise which infringe upon law and order, surely, it is the responsibility of the Provincial Governments to appoint, if they so desire, an investigation into the circumstances, which is exactly what they have done in Calcutta.
    Sir Stanley Reed: Will the Undersecretary make it clear beyond doubt that so long as the Provincial Governments, with their power of Home Rule, function, responsibility for maintaining law and order is absolutely theirs, and that Parliament has no responsibility unless their administration breaks down?
    Mr. Henderson: Yes, Sir, I think that is putting in another way what I have
    762
    already said, that the primary responsibility lies with the Provincial Governments.
    Mr. Nicholson: Surely, when the Viceroy and Governor intervene and British troops are employed—I am not alleging that they have or have not been employed—this House cannot acquit itself of a feeling of responsibility? It may be a remote responsibility, but I can assure the Under-Secretary that India regards this House as having some responsibility.
    Mr. Henderson: I can only say that troops were asked for under the provisions of the criminal procedure code, which permits the civil authorities to ask the military authorities for assistance where the circumstances require. It is not a fact that the Viceroy has exercised his special responsibilities. Such action was taken in the normal way through the Provincial Governments.

BUSINESS OF THE HOUSE
Mr. Eden: May I ask the right hon. Gentleman the Leader of the House if he has any statement to make about the Business for this week?
The Lord President of the Council (Mr. Herbert Morrison): Yes, Sir. On Thursday, there will be an opportunity, on the Motion for the Adjournment, for a Debate on the Army, with particular reference to the Territorial Army.
Mr. Eden: Could the right hon. Gentleman also say whether we may expect, within the next day or two, a statement about India? I am sure he will realise that there is a great desire in all parts of the House to hear such a statement as soon as possible.
Mr. Morrison: I appreciate the point, but I cannot be quite sure. I hope, however, that a statement will be made tomorrow.
Major Legge-Bourke: Is it intended to make a statement about conscription dur-the Debate on Thursday?
Mr. Morrison: I do not know whether it will arise incidentally. The hon. and gallant Gentleman knows that there will be a Bill dealing with that subject in due course. I am rather doubtful; whether it

763
may arise incidentally to the main Debate I cannot say, and, of course, on a question of Order, it would be a matter for Mr. Speaker.
Mr. Eden: May we clear this matter up, so that we may know where we are? As I understand it, if legislation is required for this matter, it would not be in Order to discuss it on Thursday.
Mr. speaker: Matters affecting legislation are out of Order on the Adjournment. That is the Rule, the fixed Rule.
Mr. James Callaghan: When my right hon. Friend says that the Debate on Thursday will have particular reference to the Territorial Army, does he mean that it will relate exclusively to the Territorial Army, or will it be allowable to raise ancillary subjects? There are other matters concerning the Army about which people arc very troubled.
Mr. Morrison: I should have thought that other matters affecting the Army could be raised When my right hon. Friend the Secretary of State for War made his statement about the future internal organisation of the Territorial Army there was a request for a Debate about it, and we think that that ought to be the main feature of the Debate. I should not have thought, however, that it would be out of Order if other aspects about the Army were brought up.
Mr. Sorensen: In reference to my right hon. Friend's announcement that a statement on India may be made tomorrow, may I ask whether the Government contemplate arranging a Debate on the matter in the near future?
Mr. Morrison: I cannot tell; it depends upon the nature of the statement. We are, of course, in a period of transition towards self-government in India, and it becomes a matter for consideration, according to the nature of the case. I am very doubtful about it. It must depend upon the nature of the statement, which I have not got in my possession.
Mr. Wyatt: Cannot my right hon. Friend allow Friday to be used for debating the statement on India, because grave events are taking place in India and there has been no adequate opportunity
764
in this House for a Debate on India for a very long time indeed?
Mr. Morrison: We had better see what happens when the statement is made. I understand that my hon. Friend is a keen advocate of India taking care of her own affairs, and at some point it will be a matter for consideration as to how far Debates in this House pass to authorities in India. I do not wish to prejudice the issue at all, because I have not got the statement on India before me, and it would be premature at this point to decide, even in my own mind, whether a Debate would be proper or not.
Mr. Eden: Will the right hon. Gentleman bear in mind that we on this side made no observations about the Debate because we were awaiting a statement? I do not think that Friday would be regarded by us as a suitable date.
Mr. Geoffrey Cooper: Will it be appropriate, on Thursday, to refer to the Auxiliary Air Force and the Royal Naval Reserve, because the Auxiliary Air Force does come under the county associations?
Mr. Morrison: I am not sure; it is a Debate on the Army, which, I should have thought, would have excluded those subjects. My hon. Friend is ingenious in suggesting that the county associations cover the Auxiliary Air Force as well as the Army. I believe that that is true, but I would not like to give an answer to his question on the spur of the moment.
Mr. Eden: I suppose it is clear that whatever is required to be done for the Territorial Army will not require legislation. Otherwise it is a little difficult to see how we are to have this Debate.
Mr. Morrison: No, it will not. If the right hon. Gentleman refers to the statement made by my right hon. Friend the Secretary of State for War, he will find that no question of legislation arises.
Mr. Solley: Could my right hon. Friend find time, possibly on Friday, for a Debate on Sir John Forster's report to the Ministry of Labour on the decasualisation of dock labour, in view of the great importance of this subject?
Mr. Morrison: That is very up to date. I believe it appeared in the newspapers this morning. I congratulate my hon. Friend on being so quick on the mark, but the answer is in the negative.
Brigadier Head: Is it the intention of the Secretary of State for War to make available any additional information about the Territorial Army, as the recent statement made in another place was in very broad terms?
Mr. Morrison: If a Minister takes part in a Debate I should expect him to bring his information up to date, so that the House might have the maximum knowledge.
Brigadier Head: But if the Minister makes information available before the Debate, the value of that Debate will be very much greater.
Mr. Morrison: If it is a matter of producing more White Papers, I should not have thought so. It is sometimes the opinion of the House that we are producing too many White Papers, and I should not have thought it would be suggested that we ought to produce more now.
Mr. Shurmer: In view of the Prime Minister's statement about slower demobilisation, shall we have an opportunity of debating that on Thursday, having regard to the dissatisfaction which exists?
Mr. Morrison:I should not have thought so.

BUSINESS OF THE HOUSE
Motion made, and Question put,
"That the Proceedings on Government Business be exempted, at this day's Sitting,

Division No. 29.]

AYES

[3.40 p.m.

Adams, W. T. (Hammersmith, South)

Glanville, J. E. (Consett)

Noel-Buxton, Lady

Allen, A C. (Bosworth)

Gooch, E. G.

Oldfield, W. H.

Allen, Scholefield (Crewe)

Goodrich, H. E.

Oliver, G. H.

Alpass J. H.

Gordon-Walker, P. C.

Orbach, M.

Anderson, F. (Whitehaven)

Greenwood, A. W. J. (Heywood)

Paget, R T.

Attewell, H. C.

Grey, C. F.

Palmer, A. M. F.

Awbery, S. S.

Grierson, E.

Parker, J

Ayles, W. H.

Griffiths, D. (Rother Valley)

Parkin, B. T.

Bacan, Miss A.

Gunter, R. J.

Paton, Mrs. F. (Rushcliffe)

Balfour, A.

Guy, W. H.

Paton, J. (Norwich)

Barstow, P. G.

Haire, John E. (Wycombe)

Pearson, A.

Barton, C.

Hale, Leslie

Peart, Capt. T. F.

Battley, J. R.

Hall, W. G.

Perrins, W.

Bechervaise, A. E.

Hamilton, Lieut.-Col. R

Piratin, P.

Berry, H.

Hardy, E. A.

Poole, Major Cecil (Lichfield)

Ging, G. H. C.

Harris, H. Wilson

Popplewell, E.

Blackburn, A. R.

Harrison, J.

Porter, E. (Warrington)

Blenkinsop, A.

Hastings, Dr. Somerville

Porter, G. (Leeds)

Blyton, W. R.

Haworth, J.

Proctor, W. T.

Bowden Flg -Offr. H. W.

Henderson, A. (Kingswinford)

Pursey, Cmdr. H

Bowles, F. G. (Nuneaton)

Henderson, Joseph (Ardwick)

Randall, H. E.

Bramall, Major E. A.

Hewitson, Capt. M.

Ranger, J.

Brook, D. (Halifax)

Hicks, G.

Rees-Williams, D. R.

Brown, T. J. (Ince)

Hobson, C. R.

Reid, T. (Swindon)

Bruce, Maj. D. W. T.

Holman, P.

Robens, A.

Burden, T. W.

Holmes, H. E. (Hemsworth)

Roberts, Goronwy (Caernarvonshire)

Burke, W. A.

Horabin, T. L

Roberts, W (Cumberland, N.)

Byers, Frank

House, G.

Robertson, J. J (Berwick)

Byers, Frank

Hoy, J.

Salter, Rt. Hon. Sir J. A.

Callaghan, James

Hudson, J. H. (Ealing, W.)

Scott-Elliot, W

Castle, Mrs. B. A.

Hughes Hector (Aberdeen, N.)

Shackleton, Wing-Cdr. E. A. A.

Chamberlain, R. A.

Hughes, H. D. (W'lverh'pton, W.)

Sharp, Granville

Champion, A. J.

Hynd, H. (Hackney, C.)

Shurmer, P.

Chater, D.

Irving, W. J.

Silverman, J (Erdington)

Chetwynd, G. R.

Isaacs, Rt. Hon G. A

Silverman, S. S. (Nelson)

Clitherow, Dr. R

Jay, D. P. T.

Skeffington, A. M.

Cluse, W. S.

Jeger, G. (Winchester)

Skeffington-Lodge, T. C.

Cocks, F. S.

Jeger, Dr. S. W. (St. Pancras, S.E.)

Smith, C. (Colchester)

Coldrick, W.

Jones, D T (Hartlepools)

Smith, H. N. (Nottingham, S.)

Collick, P.

Keenan, W.

Smith, S. H. (Hull, S. W.)

Collindridge, F.

Kinley, J.

Snow, Capt. J. W.

Colman, Miss G. M.

Kirby, B. V.

Solley, L. J.

Comyns, Dr. L.

Lang, G.

Sorensen, R. W.

Cooper, Wing-Comdr. G.

Corbet, Mrs. F. K. (Camb'well, N. W.)

Lavers, S.

Soskice, Maj. Sir F

Corlett, Dr. J.

Levy, B. W.

Sparks, J. A.

Cove, W. G.

Lipson, D. L.

Stamford, W

Daggar, G.

Lipton Lt.-Col. M

Steele, T.

Daines, P.

Longden, F.

Stephen, C.

Dalton, Rt. Hon. H.

McAdam, W.

Stewart, Capt. Michael (Fulham E.)

Davies, Edward (Burslem)

McAllister, G.

Stubbs, A. E.

Davies, Ernest (Enfield)

McEntee, V. La. T.

Symonds, A. L.

Davies, Hadyn (St. Pancras, S.W.)

McGhee, H. G.

Taylor, H. B.(Mansfield)

Davies, Harold (Leek)

Mack, J. D.

Taylor, R. J. (Morpeth)

Davies, R. J. (Westhoughton)

McKay, J. (Wallsend)

Taylor, Dr. S. (Barnet)

Diamond, J.

Mackay, R. W. G. (Hull, N.W.)

Thomas, George (Cardiff)

Dobbie, W.

McLeavy, F.

Thorneycroft, Harry (Clayton)

Dodds, N. N.

MacMillan, M. K. (Western Isles)

Thurtle, E.

Donovan, T.

Macpherson, T. (Romford)

Tiffany, S.

Driberg, T. E. N.

Mallalieu, J. P. W.

Tolley, L.

Dugdale, J. (W. Bromwich)

Manning, Mrs. L. (Epping)

Tomlinson, Rt. Hon. G

Dumpleton, C. W.

Mathers, G.

Vernon, Maj. W. F

Durbin, E. F. M.

Mayhew, C. P

Wallace, G. D. (Chislehurst)

Edwards, A. (Middlesbrough, E.)

Mellish, R. J

Warbey, W. N.

Edwards, John (Blackburn)

Monslow, W.

Webb, M. (Bradford, C.)

Edwards, N. (Caerphilly)

Montague, F.

Weitzman, D.

Edwards, W. J (Whitechapel)

Morris, P. (Swansea, W.)

Westwood, Rt. Hon. J.

Evans, E (Lowestoft)

Morris, Hopkin (Carmarthen)

White, H. (Derbyshire. N.E.)

Evans, S. N. (Wednesbury)

Morrison, Rt. Hon. H (Lewisham, E.)

Whiteley, Rt Hon. W

Ewart, R

Moyle, A.

Wilkes, L.

Field, Captain W J.

Murray, J. D.

Wilkins, W. A.

Fletcher, E G. M. (Islington, E.)

Naylor, T. E.

Willey, O. G. (Cleveland)

Foot, M. M.

Nichol, Mrs. M. E. (Bradford, N.)

Williams. J. L. (Kelvingrove)

Fraser, T. (Hamilton)

Nicholls, H. R. (Stratford)

Williams, W. R. (Heston)

Ganley, Mrs. C. S

Noel-Baker, Capt. F. E. (Brentford)

Willis, E.

from the provisions of the Standing Order (Sittings of the House)"—[Mr. Herbert Morrison.]
The House divided: Ayes. 228; Noes, 98.

Wilmot, Rt. Hon. J

Yates, V. F.

Woods, G. S.

Young, Sir R. (Newton)

TELLERS FOR THE AYES:

Wyatt, W.

Zilliacus, K.

Mr. Simmons and Mr. Hannan.

NOES.

Agnew, Cmdr. P. G.

Fraser, Sir I. (Lonsdale)

Neven-Spence, Sir B.

Amory, D. Heathcoal

George, Maj. Rt. Hn. G. Lloyd (P'ke)

Nicholson, G.

Assheton, Rt. Hon. R.

Glyn, Sir R

Nield, B (Chester)

Baldwin, A. E.

Gomme-Duncan, Col. A. G

Noble, Comdr. A. H. P

Barlow, Sir J.

Grant, Lady

Peake, Rt. Hon. O.

Beamish, Maj. T. V. H

Gridley, Sir A.

Peto, Brig C. H. M.

Beechman, N. A.

Grimston, R. V.

Poole, O. B. S (Oswestry)

Birch, Nigel

Harvey, Air-Comdre, A. V.

Prescott, Stanley

Boles, Lt.-Col. D. C. (Wells)

Head, Brig. A. H

Ramsay, Maj. S.

Boothby, R.

Hogg, Hon. Q.

Reed, Sir S. (Aylesbury)

Bower, N.

Holmes, Sir J. Stanley (Harwich)

Reid, Rt. Hon. J. S. C. (Hillhead)

Boyd-Carpenter, J. A.

Hope, Lord J.

Renton, D.

Braithwaite, Lt.-Comdr. J. G.

Hudson, Rt. Hon. R. S. (Southport)

Roberts, H. (Handsworth)

Bromley-Davenport, Lt.-Col. W.

Hulbert, Wing-Cdr. N J.

Robinson, Wing-Comdr. Roland

Buchan-Hepburn, P. G. T.

Jeffreys, General Sir G.

Savory, Prof. D. L.

Bullock, Capt. M.

Keeling, E. H.

Shepherd, W. S. (Bucklow)

Butcher, H. W

Kerr, Sir J. Graham

Smithers, Sir W.

Carson, E.

Lambert, Hon. G.

Spearman, A. C. M.

Challen, C.

Legge-Bourke, Maj. E. A. M.

Stanley, Rt. Hon. O.

Clarke, Col. R. S.

Lennox-Boyd, A. T.

Strauss, H. G. (English Universities)

Clifton-Brown, Lt.-Col. G

Lindsay, M (Solihull)

Stuart, Rt. Hon. J. (Moray)

Cooper-Key, E. M.

Lucas-Tooth, Sir H

Sutcliffe, H.

Corbett, Lieut.-Col. U. (Ludlow)

MacAndrew, Col. Sir C.

Taylor, Vice-Adm. E. A. (Pdd't'n, S.)

Crosthwaite-Eyre, Col. O. E.

Macdonald, Sir P. (Is. of Wight)

Thomas, J. P. L. (Hereford)

De la Bère, R.

Mackeson, Brig. H. R.

Thornton-Kemsley, C. N.

Digby, S. W

Maclean, Brig. F. H. R. (Lancaster)

Touche, G. C.

Dodds-Parker, A. D

MacLeod, Capt. J.

Turton, R. H.

Donner, Sqn.-Ldr P. W

Macpherson, Maj. N. (Dumfries)

Walker-Smith, D.

Dower, Lt.-Col A. V G. (Penrith)

Manningham-Buller, R. E.

Willoughby de Eresby, Lord

Eccles, D. M.

Marlowe, A. A. H.

Young, Sir A. S. L. (Partick)

Eden, Rt. Hon. A.

Marshall, D. (Bodmin)

Elliot, Rt. Hon. W. E.

Marshall, S. H. (Sutton)

TELLERS FOR THE NOES:

Erroll, F. J.

Mellor, Sir J.

Mr. Drewe and Major Conant.

Fleming, Sqn.-Ldr. E. L

Morris-Jones, Sir H.

ORDERS OF THE DAY

  EXCHANGE CONTROL BILL
  Considered in Committee.
  [Major MILNER in the Chair]

  EXCHANGE CONTROL BILL

    CLAUSE 29.—(Settlements.)
    Amendment proposed (5th December), in page 21, line 8, at the end, to insert:
    "(3) Subsections (2) and (3) of Section eighteen of this Act shall apply in relation to a settlement or the exercise of a power of appointment prohibited by this Section as they apply in relation to a transfer prohibited by this Act of a security "—[The Solicitor-General.]
    Question again proposed, "That those words be there inserted."
    Amendment agreed to.
    Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."
    3.49 p.m.
    Sir Hugh Lucas-Tooth: I do not intend to keep the Committee long, because I understand that in all parts of the Committee there is a
    770
    desire to get on to Clause 31. I think, however, that there are some points of importance in this Clause which should be raised now, though it may be that they can be better answered at a later stage.
    This Clause operates to do two distinct things. In the first place, it forbids the making of any deed of settlement or trust so as to confer any benefit on persons resident outside the scheduled territories; and, secondly, it forbids the exercise by deed, but not by will, of any power of appointment in favour of any person resident outside the scheduled territories. I doubt whether the importance of this Clause has been fully recognised. It is still true to say that a large part of the wealth of this country is held by trustees in trusts. It is not only the property of the wealthy, since there are very many small trusts, and I think the Chancellor of the Exchequer would be the last to deny the usefulness of trusts, if only in assisting him in the pursuit of his cheap money policy. Settlements are, of course, usually created by will, and the creation of a settlement by a will is not hit by this Clause, although the powers under such a settlement are hit.

    771
    Nevertheless, very many trusts are created by deed; as, for instance, in the ordinary case of a parent who wishes to hand over some of his property to his children. The common case is where, say, a father wishes to make a trust in favour of his son or daughter on marriage, and for that purpose to settle shares or Government stock, for the maintenance of the child and family. Normally, the trusts in such cases would be on the following lines. The income would go to the daughter and her husband—assuming the case of a daughter—for their lives That trust would not normally be affected by the provisions of this Clause, because the parties would be resident in this country After the death of the daughter and her husband, the property is normally given to the children of the marriage. There, again, they would not be affected by this Clause, because the children, not yet being born, could not be resident outside the scheduled territories at the time of the making of the settlement.
    Trusts, in the event of there being no children, are very strangely affected by the Clause. Normally, the next trust, if there are no children of the marriage, is to such person or persons as the daughter by deed or will appoints Next in the event of the daughter failing to appoint, the trust funds go to the children or remoter issue of the settlor himself This Clause has a most astonishing effect on trusts of that sort. First, it would prevent a daughter from appointing a share of the funds, even by will, to any person who happened to be outside the scheduled territories at the date of the settlement. If the Solicitor-General will refer to Clause 29, (3, b), he will see that such
    "a person shall be deemed to have an interest in property if he has any beneficial interest therein, whether present or future, and whether vested or contingent, or falls within a limited class of persons in whose favour a discretion or power in respect of the property in exercise able."
    In the case of a settlement of the sort I have described, if it happened that any one of the settlor's own children happened to be residing outside the scheduled territories at the date of the making of the settlement, nothing thereafter could give that child any benefit in the trust fund It is an extraordinary and arbitrary result, and I do not think it can be avoided by any general provision which might be
    772
    made under Clause 31. The second startling result is that the Clause would prevent any issue of the settlor, any child OT grandchild, from taking a benefit in default of an appointment by the first life tenant. It frequently happens that the daughter or other child of the settlor to whom the money is given in the first place fails, sometimes by negligence, sometimes deliberately, to exercise her power of appointment if she has no children As I see it, if she failed, and if it happened that the settlor left four or five other children and grandchildren, one of whom happened to be a child in arms aged one year, living with its nurse in Switzerland, for instance, at the date of the settlement, these words would operate to deprive that child from taking any benefit under the settlement. I think that is quite an anomalous result. I do not think it is intended by the Government, and I not think it can be avoided in any general way The only way out would be that when any settlement is to be made in future, it should be specifically submitted to the Treasury, or other appropriate authority, for vetting. I suspect that if we were to get a forecast of the increased number of civil servants who would be involved in that case, it would shock the Committee.
    There are similar anomalies which will arise in respect of the operation of the Clause with regard to its provisions about powers of appointment. Take, for instance, the case of a testator who leaves his property to his wife for her life and then to such of his issue as she may, by deed or will appoint—a very common form When he dies, his wife takes the life interest, and she can either part with her life interest by appointing to her children whenever she likes, or she can appoint between them by her will. If it happens that one of the children of the testator is resident outside the scheduled territories—he may be living in America—it will be impossible for the testator's wife to make an appointment to him or her as long as she is alive. She is forbidden under the second provision of this Clause from making an appointment by deed, and however hard up that child may be, whatever may be the desirability of providing him or her with funds in order to start off in business, the wife cannot by deed make an appointment, because that is an offence under this Clause. I submit that these are real anomalies which do not

    773
    appear to have been considered, and I ask that we should receive an explanation as to how they may be avoided either at this stage of the Bill, or, if these matters have not been considered, at a later stage.
    Mr. John Foster: I wish to ask the Solicitor-General or the Chancellor of the Exchequer whether this Clause could be explained against the background of what is allowed to be transferred administratively at the moment. I understand that in America, for instance, money left by will is allowed to be transferred by administrative concession I think the policy behind this Clause is not very deal unless the Chancellor explains the ad ministrative concessions about the transfer of money by will. The matter will probably not come under Clause 31 and it will not come under Clause 37. Another point I should like to raise is that this Clause depends largely on the policy to be pursued by the Treasury on the question of who is resident and who is non-resident That arises on Clause 41, but it is of great importance in relation to a number of the Clauses. When we come to it, perhaps we could have an explanation, or it may be that the explanation lies here in this Clause in relation to the question raised by my hon Friend the Member for South Hendon (Sir H Lucas-Tooth).
    4.0 p.m.
    I would also like to ask whether the Solicitor-General can briefly tell us what kind of abuses the prohibition against settlement is designed to meet. My right hon. Friend the Member for West Bristol (Mr. Stanley), when speaking on the previous Clause, asked whether the point was not covered sufficiently by the prohibition against payments, and whether the object of the Clause was to prevent retaliatory legislation in other countries. I gather that, in respect of wills, there was a threat of retaliatory legislation by other countries. They said "If people of this country are not to inherit under English wills we shall not allow English people to inherit under ours." Is the object of this Clause to prevent settlements at the outset to people, say, in Ruritania; because, if that is so, no settlement may be allowed there in favour of British people I do not see why the prohibition on payments transferred should not be sufficient without making a prohibition on the settlement, which may, as my hon Friend pointed out, result in considerable anomalies.
    The Solicitor-Genera) (Sir Frank Soskice): The hon Member for Northwich (Mr. J. Foster) asked me to explain the view that will be taken of the word "resident" The hon. Gentleman will know that in the Finance Acts, the expression occurs often, and the meaning here is understood to be the meaning well-known in the banking and stock-broking world. In the preparation of the Bill pains were at first taken to try to define the word "resident," but the attempt was abandoned, because it is difficult to put into words what is ordinarily well understood by the banking and stockbroking world as the meaning of the word "resident" In regard to any particular individual, it is reasonably easy to say whether he is resident or not, but doubts may arise in some cases and that is why power is taken under Clause 41 (2). to make a declaration With regard to residence it is very difficult, a priori, to lay down a general definition An attempt was made and it failed, and we thought it better to leave it to the ordinary understanding of that term by the City of London and by solicitors and other persons concerned with that kind of property.
    With regard to the question of whether this prohibition is intended to prevent retaliatory legislation, the prime object is to prevent the export of assets. Money is already controlled, but the control would be incomplete if one could, by settlements other than wills, transfer money's worth in exactly the same way as one could—apart from the control—transfer money. Obviously, if we want a control which enables us to have a say when capital sums are transferred in and out of the country, we should complete that by enabling ourselves to control what is the equivalent of money—shares and any other type of property which are ordinarily transferred by settlement In Subsection (1) of this Clause the word used is "property"
    Mr. J. Foster: I wonder whether hon. and learned Gentleman realises gifts are not prohibited; and is it a fact that this applies only to property and not to gifts?
    The Solicitor-General: The answer to that is that settlements are ordinarily instruments which are used to take assets such as shares and other types of property, out of the country. Normally, that is not

    775
    done by cut-and-out gifts but under the terms of some sort of settlement. That is why control is limited to settlements.
    Mr. Oliver Stanley: Is the hon. and learned Gentleman suggesting that if I choose to give an American shares, there are no provisions in any part of this Bill to prevent the export of that type of property?
    The Solicitor-General: I did not say that there were no provisions in any other parts of the Bill. It is this particular Clause which deals with settlements. That is why there is the definition of "settlement" in Subsection 3 (a) of this Clause, and the definition is wide. It includes everything which one wants to bring under control, such as:
    "any disposition, covenant, agreement or arrangement whereby the property becomes subject to a trust, or (in the case of a resettlement) to a different trust."
    It, as I say, is a wide definition and the term "property" includes every settlement.
    With regard to the question on the subject of wills, again, this provision was not designed to prevent retaliatory legislation by other countries. But it was thought reasonable that a person should be entitled to dispose of his assets by will and that is why wills are exempt. It was thought to be going too far to prevent the disposal, in the settlement, of assets by will. The prime object is to create a concession for persons anxious to make provision by will, with regard to their assets. In reply to the points made by the hon. Member for South Hendon (Sir H. Lucas-Tooth), I think the answer to his arguments is largely to be found in the actual phrasing used in the Bill. I am not prepared to say that if we view every possible settlement we may not find the Clause bringing about anomalous results. It is unavoidable, but there is the saving provision that the Treasury can give permission to create a particular settlement.
    Sir H. Lucas-Tooth: Can the concession be made retrospective? When a settlement is made no one knows who will ultimately become entitled under it. People will not seek to make provision in advance, when the ultimate trust can only become known in time. Will power be given to a person to go to the Treasury
    776
    in 20 or 30 years time and say, "This is what happens under the settlement, and this is an anomaly which was never contemplated?" Will permission be given to validate that settlement retrospectively?
    The Solicitor-General: I do not think such permission can be given retrospectively in relation to the making of a settlement. Nevertheless the Clause is only to invalidate a settlement quo ad a particular person outside the scheduled territories getting an interest It remains perfectly valid except for that. Subsection (2) states that a settlement shall not be invalid by reason of being prohibited
    "except so far as it purports to confer any interest on any person who, at the time of the settlement or the exercise of the power, is resident outside the scheduled areas."
    It is only invalidated to a certain extent—the extent to which it infringes against the prohibition. I agree that in respect of any person who, at the date when the settlement is made, is resident outside the scheduled areas the settlement, in so far as it creates an interest for that person, is invalidated. That may lead in particular cases to anomalous results, but as the hon. Gentleman himself saw, it is almost impossible to create a Clause which will avoid such anomalous results.
    Mr. Stanley: It is shocking.
    The Solicitor-General: It is not shocking. In a particular case, if permission is asked for at the time of the desire to create a settlement, exception may be made, and, as the hon. Gentleman has pointed out, the person is not then resident outside the jurisdiction at the time the settlement is made. That is the obvious answer to the interjection which has just been made. But where it can be said with regard to a particular, beneficiary that at the time when the settlement is made, he is outside the scheduled territories and the settlement purports to create an interest in respect of that beneficiary, it is invalid. In the vast majority of cases this should work reasonably well. In cases where there is difficulty, obviously a dispensation could be made, but one must have everything within the net of control and obviously it is impossible to provide for every case. All that can be done is to draft a general Clause, containing the exception in the case of a settlement under a will and powers of appointment by will. This has been done,

    777
    and it is hoped that it will be administered as far as possible so as not to cause hard ship.
    Mr. J. Foster: May I ask the Solicitor-General two questions? He seemed to indicate that the exception with regard to wills would allow the actual transfer but, if I may say so with respect, more than that is needed. Either now or later the Government should reaffirm—if that is their intention—the principle that the transfer of money and property left by will will be allowed. This Clause as it stands, does not allow such transfer. The second point is that I believe that the invalidation of that part of a settlement which applies to a person outside the scheduled territories is new. Although I have not checked this, I believe that under the present regulation it is only an offence and does not make the settlement invalid. Perhaps the Solicitor-General could deal with this? However, the first point is the more important. Is it intended to continue the principle that money left by will to a beneficiary outside the scheduled territories, may actually be transferred?
    The Solicitor-General: As I have already said where the settlement is made by will the question does not arise—
    Mr. J. Foster Mr. J. Foster indicated dissent.
    The Solicitor-General: If the hon. Gentleman will look at the Clause more closely he will see that it says:
    "… no person … shall settle any property, otherwise than by will. …"
    Mr. J. Foster: But although it allows a settlement by will, it does not allow the transfer. That is the point I am making Is it the intention to allow the transfer of money and property left validly under this provision? At the moment it is permitted.
    The Solicitor-General: At the moment it is, and such dispensations as are necessary to give effect to that principle will be made
    Mr. Leslie Hale: The hon. Gentleman the Member for South Hendon (Sir H Lucas-Tooth) raised a very pertinent point with reference to the exercise of powers of settlement or appointment given by testamentary disposition. It there could be added to that—and this would in no way detract from the Measure
    778
    —words to include under testamentary disposition an exercise of power of settlement given by will, it would meet the point raised by the hon. Member It would be completely within the terms of the Measure as explained by the Solicitor-General and would relieve the solicitor drafting the will from the responsibility for a disposition which might be exercised in the future, and come within the terms of this Clause
    The Solicitor-General: We have listened to the points which have been submitted, and to the last argument adduced by my hon. Friend the Member for Oldham (Mr. Hale), and we will certainly consider the position and look at the definition again to see whether we can improve it in order to assist in dealing with the point? made.
    4.15 p.m.
    Mr. Henry Strauss (Combined English Universities): I am very glad that the hon. and learned Gentleman has promised to give further consideration to the matters raised, and I ask him to bear in mind at the same time the point which I raised about the exercise of the power of appointment. He has informed the Committee that the object he has in mind is to prevent the transfer of property outside the scheduled territories. As he will see from the example I gave when this matter was last before the Committee, this Hill, as it stands, prohibits the exercise of the power of appointment, even when the property is already outside the scheduled territories. My example was that of an American trust and the power of appointment of an American resident here in Great Britain and to be exercised as between two American citizens themselves resident in the United States. The hon. and learned Gentleman was good enough to say that in such a case the permission of the Treasury would at once be given, and I am sure that that is so, but I ask him to consider whether he wishes that to be done either by an individual licence on each occasion or a general licence under the Clause to which we shall come later, or whether it would not be much better to have some sort of Amendment in the present Clause permitting the exercise of a power of appointment when there is no transfer of any kind from within the scheduled territories to a place outside.
    The Solicitor-General: The hon. and learned Gentleman must remember Clause

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    31. One has to draw a line between what is done by exemption order, and what is actually introduced in the context. What he has said would, I think, be more appropriate to an exemption order under Clause 31, but I ask the Committee to say that it would be unwise to start embodying this sort of exception in the actual terms of the Bill.
    Question put, and agreed to
    Clause, as amended, ordered to stand part of the Bill.

    CLAUSE 30.—(Companies.)
    The Chairman (Major Milner): I think it might be for the convenience of the Committee if we took the first two Amendments to this Clause together.
    Mr. Stanley: I agree that it would be convenient that we should consider them together, although I take it that the questions will be put separately.
    The Chairman: Yes.
    Lieut.-Commander Gurney Braithwaite: I beg to move, in page 21, line 30, to leave out paragraph (a).
    As has been suggested, I should like to discuss at the same time the following Amendment on the Order Paper—in line 33, to leave out from "requirements," to the end of line 36.
    One would like to spend a good deal of time on these Amendments but we on this side of the Committee feel it desirable that at as early a stage as possible in our proceedings today, we should hear the promised statement by the Chancellor of the Exchequer on Clause 31. I shall therefore endeavour to deal with these Amendments as briefly as possible. My hon. Friends and I feel that Subsection (1) is a particularly tall order, even for this Bill. It places really extraordinary obligations upon such persons as are thought by the Treasury to be in the position indicated by the Clause. They are required to obtain and influence information on the activities of various companies situated abroad. In paragraph (a) which is the subject of the first of these two Amendments, a person can be called upon to cause a foreign company to comply with certain requirements—I propose to refer to them later—which is extremely difficult in any case. Under paragraph (c) a person can be called upon, in the words of the Bill, to
    780
    "render it in any respect more probable that the foreign company will comply with any of the requirements."
    We feel that this is putting an almost intolerable onus upon the individuals indicated. The requirements are set out in this Clause, and there are five of them. They begin at the bottom of page 21 and continue overleaf, and I think the hon. and learned Gentleman the Solicitor-General will agree that some of them will be extremely difficult to enforce. The first requires that the Treasury shall be furnished with such particulars as to the company's assets and business as may be mentioned in the notice. I imagine that information with regard to the assets might be obtained without much difficulty, but "particulars as to business" is an extraordinarily wide term. It may be almost anything. The next requirement is:
    "sell or procure the sale to an authorised dealer of any gold or specified currency mentioned in the notice, being gold or specified currency which it is entitled to sell or of which it is entitled to procure the sale."
    I admit that the latter words do cover the principal objection, but we must consider the very strong possibility, to put it mildly, of other countries enacting exchange control legislation of an extremely stringent character. I imagine that they will be "the blue-eyed boys" of the Chancellor of the Exchequer. At any rate, they should be people after his own heart.
    Let us suppose that they are situated in Ruritania—always a convenient place for the purpose of these arguments. The Government of Ruritania being well-informed, and as fond as meddling with the delicate machinery of exchange as His Majesty's Government, pass an Act of this kind. It would not be possible for one of their businessmen to take such action as this Clause asks. There is, it seems to me, another difficulty. Without trespassing upon the domain—it is almost a prerogative—of those who intervene in Debates upon foreign affairs, perhaps I might remind the Committee that there are certain countries in Europe at the moment under a form of government which is hardly distinguishable from the totalitarian. How does the Solicitor-General imagine that persons covered by the Clause will be able to obtain the information set out in the Clause in those cases? One might, of course, enlarge upon that subject considerably but, in the

    781
    interests of progress in the Committee, I will not do so. I invite the Solicitor-General to give a brief explanation of how he expects this machinery to work. To hon. Members on this side of the Committee the proposal looks almost impossible
    Mr. Nigel Birch: I wish to say a few words upon the second Amendment which we are now considering—in page 21, line 33, to leave out from "requirements," to the end of line 36. The Clause deals with foreign companies. As defined in the Second Schedule, these are companies in which residents of this country have substantial interest but not necessarily voting control. That is the important point. The effect of the Subsection is to render a person liable to prosecution if he does or refrains from doing any act to
    "render it in any respect more probable that the foreign company will comply with any of the requirements."
    The foreign company referred to is not necessarily controlled from this country. It is very hard to stop the committing of a positive sin, but I think that any hon. Member, if he examines his conscience, will rind that every day he may be guilty of refraining from doing certain acts which might render it, in any respect, more probable that someone else will do his duty. If one interfered with other people to that extent, one would be an intolerable nuisance. As I see it, the Clause may lead to some very curious situations.
    What sort of acts might make it more probable that a foreign company would comply with these requirements? One of the typical things would be to give a diamond necklace to the wife of one of the foreign directors. If one failed to do so, one would render oneself liable to gaol, because one could have done it. and it might have made all the difference. If one gives up the diamond necklace, one might also go to gaol for transferring property abroad for a valuable consideration. That is one of the dilemmas of the Bill. The illustration shows how profoundly intolerable and ridiculous the paragraph is. I hope that the Solicitor-General will withdraw it. It is legislating very much "in the blue," and is liable to produce an intolerable and ridiculous situation.
    Mr. David Eccles: I support the second of these Amendments. This Clause seeks to give the Treasury
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    power to direct a British businessman to try to persuade a foreign company to follow the policy of His Majesty's Government. That is a very serious thing to do. I would remind the Chancellor of the Exchequer that one of the reasons why sterling has again become popular with other countries is that much business is transacted in the City which does not touch our shores. The foreigner is afraid of the State Department using the New York financial system for purposes of American foreign policy. Many foreigners say: "We will continue to finance our business through the City of London because we do not think that your Foreign Office interferes with the lending of money in the same way as does the State Department." This Clause will make the foreigner think that our Government's policy is to be pushed down their throats by every British businessman associated with a foreign company. The first thing to happen will be that no foreign company will ask any British businessman to sit upon its board because it may be inviting to take part in its counsels someone who is under an obligation to divulge the secrets of the business. I think we should be very much on our guard against inviting British citizens to join in that work. We are a great trading nation. We must be careful about designing machinery to tighten up exchange control which will then be copied by other countries. In the 19th century we exported textile machinery, which did Lancashire no good. We are now to export extremely up-to-date machinery for restricting foreign trade, and it might well be used against us.
    If the Chancellor of the Exchequer really wants to force British businessmen to bring influence to bear upon foreign companies with which they are associated, and if, as a result, they get into difficulties, they should be compensated for carrying out such tasks at the request of the Treasury. It is not right to ask people, under a Bill of this kind, to take a course which might cause damage to themselves, and not make provision to compensate them. I very much hope that Subsection (1, c) will disappear from the Clause.
    The Solicitor-General: I will deal first with the points raised by the hon. Member for Chippenham (Mr. Eccles). He failed to notice that the Clause applies only to

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    companies which are substantially controlled in this country. They are defined in the Second Schedule. If hon. Members look at that Schedule, they will see that it is limited to companies which are more than 50 per cent. virtually British companies. They are foreign companies which are controlled here.
    Colonel Crosthwaite-Eyre: How, under the Second Schedule (d, ii), can any British resident possibly influence such a company?
    4.30 p.m.
    The Solicitor-General: If dividends are the sole test—they may not always be so but in 99 cases out of 100 they will be—voting may not always be in accordance with dividend distribution. In some cases we may find that that does not apply. The scheme is designed to apply primarily to companies which are controlled, or at any rate, owned, by British people. Either the ownership or the control, or both, must be exercised by British people. It is designed only to apply to those companies. The second thing hon. Gentlemen opposite must remember is that it applies only to companies in respect of which a direction is given. That is to say, this is not a Clause like the other Clauses of the Bill in which we have a general control and then exceptions embodied in the general system. This Clause applies only where the Treasury have thought fit to say, in respect of any company, being a company which complies with the requisites of the Second Schedule, that a direction shall apply. It applies only to specific companies which they pick out and therefore, the notice has to go from the Treasury, and the reverse is not the case. The Treasury do not have to make an exemption: they have to apply the Clause. Therefore they will exercise their discretion wisely with that in mind.
    I want to deal with the argument adduced by the hon. and gallant Member for Holderness (Lieut.-Commander Braithwaite). He examined the various paragraphs and said, "How can anybody do this, or that or the other?" He said we might have the case of a foreign country imposing its own exchange control system, and making it impossible, or very difficult for the person on whom the direction was put, to do what was required; or we might have the case of a
    784
    totalitarian State imposing some obstacle. The answer is that the only requirement is that the person shall do what he can. May I invite the hon. and gallant Gentleman's attention to the actual wording of the Clause? The Clause operates
    "Where there is served on any person resident in the United Kingdom a notice in writing …"
    stating certain things. If the hon. and gallant Gentleman will look at line 28, he will see that the second prerequisite is that a person:
    "… can, by doing or refraining from doing any act …"
    In other words, he is to be able to do what he is asked to do. If it is in his power, he has to comply with the requirements. All that is required is that he shall either do or refrain from doing some act. He has to do that which he is capable of doing. That appears from line 39. If the hon. and gallant Gentleman will bear in mind lines 28 and 39, he will see that no impossible burden is being placed on anybody. All the Treasury takes power to do is to say to a person with regard to a particular specified company, which for one reason or another it has singled out for the purpose of a direction, We think you can do this. If you can do this, you are to do it." It does not, ex hypothesi, impose on him the necessity for doing it, if it is not in his power. If he cannot do it, the direction is invalid. He does not, therefore, commit an offence. If there were a prosecution against him, it would be a perfect defence for him to say, "I was not able to do it." This is made perfectly clear by line 28. The argument adduced by the hon. and gallant Member for Holderness would be a cogent argument if it were not for that safeguard, but that safeguard completely destroys the validity of the argument.
    Lieut.-Commander Braithwaite: I had read those words, and the Solicitor-General may remember that I said there were words which might be of assistance. But what is going to satisfy the Treasury that a person has, in fact, made a sufficient effort for their purpose? It may well be that the Treasury request will cause a certain amount of correspondence which will be against the best interests of the country.
    The Solicitor-General: If one does not attribute a certain amount of common sense to the administration of a system,

    785
    one cannot bring into force any system at all. If the person to whom the direction is addressed writes back and says, "I cannot do it and these are my reasons," and if the Treasury should be pig-headed enough to say to him that he can do it, and take him to court, the answer is that he would win his case—[HON. MEMBERS: "Why?"]—unless one assumes that the court also acts in a pig-headed way. In this country there are judges on whose discretion one can rely. In fact, there are none on whose judgment we cannot rely—
    Mr. Stanley: This is an important point, and the Solicitor-General has thrown a new light on it. I understood that the duty was imperative on a man, and that if he could do it, he should do it. I now understand that it would be a good defence for him to say, "I could have done it, but I thought it was unwise to do it," and if the court takes that view, and exercises that wise discretion to which the Solicitor-General has referred, that would be a good defence.
    The Solicitor-General: I did not say that at all. In the event of a dispute between the Treasury and the individual on whom a direction is served, it is a question of fact, whether he could or could not have carried it out. I do not mean to make the right hon. Gentleman impatient about this. If I am right in saying that nobody is asked to do anything which he cannot in fact do—
    Mr. Stanley: I am sorry, but the point to which the Solicitor-General was replying when he made the statement about the court was a different one. The point is, What will happen if it is within the power of the man to do it, but he believes that to do it, would be injurious to the company?
    The Solicitor-General: In that case he has got to comply, and there is every reason why he should. If he is told to do it, and it is in the direction, he has to comply. But the argument is undoubtedly based on the proposition that it is unfair to seek to make him do something which he cannot do. It was for that reason that the hon. and gallant Member for Holderness said, "Supposing he cannot do it," and referred to the exchange control system of other countries and the method of totalitarian
    786
    countries. I ask the Committee to say that this provision is not in the least oppressive but that it simply vests in the Treasury a power, in selected cases to give a direction to a person to do something which he must be able to do. If he cannot do it, he cannot be compelled by the direction.
    Mr. H. Strauss: I am grateful to the Solicitor-General for his reply, and on a few of his points I find myself in agreement. I particularly welcome the fact that the people on whom will be imposed the obligation to do or refrain from doing something will have received some sort of notice, which is a contrast to Clause 24 against which we protested earlier. Nevertheless the point put by previous speakers is not by any means wholly answered by what the Solicitor-General has just said. It is true that the companies affected may be described as companies that are in some way predominantly British, but the individuals who come within the mischief of this Clause need not be British subjects at all. They may be foreigners resident here and may have a notice served upon them saying that the Treasury wish them to do something. The Solicitor-General says that their legal duty under this Bill is to do it. But what if their own government wishes them to do something different? Surely that might be morally a defence, but it would not be a defence under this Clause. There may be a foreign company which is hesitating between two different sorts of action. The Chancellor of the Exchequer may desire, quite rightly from the point of view of British interests, that that company shall act in a particular way. A foreign government may desire that it should act in a different way. Is it really suggested that a person resident here should make himself criminally liable for refusing to do something that his own government may say that they do not wish him to do and that his own government may even go so far, if they have parallel legislation, as to make it a criminal offence for him to do?
    I submit to the hon. and learned Gentlemen that those matters deserve serious consideration. It is possible that they have not yet occurred to the Minister as they should have occurred, and I do not press for an immediate answer, but I suggest in all seriousness that they deserve to be looked into. If it is to be made a criminal offence for a gentleman of another nation not to comply with a

    787
    Treasury direction simply based on Treasury wishes, it is certainly worth considering whether, for the sake of the comity of nations, there should not be added for the defence of the foreigner "provided it is not against the wishes of his own Government" or something of that kind. I hope, therefore, that the hon. and learned Gentleman and the right hon. Gentleman will consider those matters at some stage of the Bill.
    Mr. Harold Roberts: I suppose the Chancellor aims at controlling exchanges and yet, as far as may be, keeping them a free market for the City of London. What troubles me is that the Solicitor-General, in order to justify these rather strong powers, put it to the Committee that, substantially, these are British, or British controlled, companies. However, on referring to the Second Schedule, I do not find his argument in that respect borne out. May I refer to paragraphs (a), (b) and (c)? These various conditions are set out there and on reference to them I find that one is that more than half of the interest paid on loans or in dividends on preference shares shall be receivable in this country. It is notorious that preference shares frequently have no voting rights or, at any rate, very limited voting rights, and therefore it would follow that if one had a company with debentures, preference or ordinary share capital—the preference shares having no voting rights—if more than one-half of those preference shares happened to be held here, still that company would be within the ambit of the Clause in spite of the preference shares having no voting rights. I agree with the argument of the Solicitor-General that in that case, one could say, "I have no power over the company," but I think that if it is intended that this Clause should apply to British controlled companies, apt words should be found; if not, I take the view that so ill-defined a Clause as this is not likely, in the long run, to be good for the City of London.
    Colonel Crosthwaite-Eyre: I must admit that the remarks of the learned Solicitor-General have made me even more apprehensive about the powers of this Clause than I was before. We have had a serious discussion this afternoon about what might happen in Ruritania. Shall we for a moment take the case of the Ruritanian
    788
    gas works? In this example, the preference shareholding is held by people in this country, whereas the ordinary share capital is held by the nominees of the local Minister of Fuel and Power, who has given them out as a bribe to his friends and relations. The Treasury can come down at any moment and insist that, because the preference shareholding is in England, the holders of those preference shares are responsible for whatever action the local Minister of Fuel and Power may take in satisfying his nephews and nieces. One can go a stage further and assume for the moment that the Ruritanian gas works is liable to nationalisation. It may well be that the terms of nationalisation are not very satisfactory to the shareholders, as has happened from time to time in this country. Down comes the Treasury and says to the unfortunate individual that he is to tackle the whole of the Ruritanian Cabinet, if any. The terms are not satisfactory to the Treasury, simply because he is a preference shareholder. He has nothing to do with the control of the company and it is merely because in paragraph (d, ii) of the Second Schedule the Treasury, in their wisdom, have specified the condition that more than one-half
    "of the dividends payable on its preference share capital, if any,"
    shall be receivable in this country.
    Let me take the Ruritanian gas works example a bit further. Under Clause 30 (1, c) these words appear, "in any respect." It is not so long ago since the Chancellor of the Exchequer was referred to as the Edgar Wallace of the House of Commons, because of the number of books he had written and the number of languages into which his books had been translated. I feel now that he is trying to carry the characterisation even further. An hon. Member has talked about a diamond necklace, but far more sinister interpretations are perfectly possible under this Clause. For instance, those locked cellars in Limehouse, so beloved of Mr. Wallace, can now become a fact It is perfectly reasonable to say, as this Clause is drafted, that just because the English holder of preference shares is not willing to hold a Ruritanian Minister of Fuel and Power to ransom in a rat-infested cellar in Limehouse, the learned Solicitor-General will come down on him for the full penalities of the law.
    I know the learned Solicitor-General will advance the argument that this Clause

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    will be administered with due deference to every conceivable consideration by a Socialist Government, but that is not the point. The point is that these powers are being put permanently on the Statute Book and, although the Chancellor is like Edgar Wallace in the sense that the fantasies he imagines are not carried further than the printed page, yet, at any stage, this most honourable Chancellor may be replaced by somebody with far less honourable intentions. Then what will happen if somebody who succeeds to his legacy is entitled to do all the things which are possible under this Clause? A Ruritanian gas works may be a small thing, as far as value to this country is concerned, but the woe it can bring to those people who, by their energy, have invested in it and have tried to earn currency for this country, is unlimited. The successors of the hon. and learned Gentleman and the Chancellor on that bench, those who now smile when people on this side of the Committee speak, may threaten them—as has happened in other places—with "That is the last speech you will make," and those powers, which they say they will use for the benefit of the nation, will, in their hands, undoubtedly redound to the general disturbance of the individual.
    Mr. John Lewis: Perhaps the hon. and gallant Gentleman can say in which respect these powers would be detrimental to the nation? What is this tale of woe he talks about?
    Colonel Crosthwaite-Eyre: the tale of woe is very simple. It is that any unfortunate shareholder in the Ruritanian gas works, through no fault of his own, can suffer the full rigours of this Bill.
    Mr. Stanley: I take a serious view of this Clause, a view which has not been relieved by the discussion we have had so far. I hope it will be possible to give some further consideration to a complicated provision of this kind. The two paragraphs stand on rather different grounds, and I want to say a word on each. The first two, (a) and (b), really refer to the case which the learned Solicitor-General would have us believe is the only case covered by the Clause, the case in which, for all practical purposes, control of the company is in this country. Therefore, in paragraphs (a) and (b) a man who is able to get something done in a company abroad is ordered to do it. I
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    can see that there may be certain grounds for provisions of that kind, but I can also see that they may lead to a great deal of trouble and, possibly, a great deal of friction with people outside this realm. It is all very well to say that a man controls a foreign company because he holds the majority of the shares. It may be that Mr. So-and-So in the City of London has 51 per cent. of the shares, and so controls the company, but the other 49 per cent. are held by perfectly good, honest, innocent citizens of Ruritania—or whatever other country we are discussing. The Treasury proposes to issue an instruction to the man in this country, who through that small majority shareholding controls the company, to do something which may be against the interests of the minority shareholders in the foreign country which he is supposed to represent. I cannot imagine anything more likely to embroil us with a foreign country than a direction given by the Treasury that a certain dividend has to be declared in Ruritania, not for the benefit of the Ruritanian shareholders, but because it happens to fit in with the policy of the British Treasury.
    In regard to paragraphs (a) and (b) I ask that some consideration should be given to the point about preventing a notice being served, which would be clearly against the individual's duty in this country, if he controls the company as a trustee for the interests of the shareholders. Paragraph (c) is obviously only put in because there are cases, as distinct from those which the Solicitor-General told us were covered by this Clause, or covered by the Second Schedule, where in fact the man in this country cannot be sure of getting his instructions carried out. I ask the Committee to consider the ridiculous position in which we are placed by paragraph (c), remembering that it is not just a pious expression of hope as to what people will do, but that it creates a new criminal offence, something for which a man, on indictment, can be sentenced to two years' imprisonment. This is what he can be sentenced for doing—refraining from doing something which presumably in the opinion of the Treasury would in some respect make it
    "more probable that the foreign company will comply with any of the requirements."
    Has there ever been a criminal charge framed on conditions so vague? How can

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    anybody lay down, with the certainty that a criminal charge demands, whether a particular man would make it more, or less, probable that somebody abroad will take some action which the Treasury has dictated? For instance, are the Treasury to dictate the letter which the man in this country is to write to the controller of a foreign company? Are we to have an argument as to whether it is more probable that they will be induced to do something which the Treasury want, by the language the Treasury will employ, or by the language business people will employ? I can foresee an argument going on because the Treasury said, "We think it would have great effect with your foreign correspondents if you wrote and told them that the Chancellor of the Exchequer particularly desires this to be done." And I can see the man here, knowing better the feelings of his correspondents, saying, "That is exactly the thing which will prevent them doing it." Are we really going to ask a court of law, a court of criminal justice, to decide whether the view of the man who gets the direction, or the view of the Treasury, was more probable to have a particular effect on a number of people, who will not be, and cannot be, brought before the court?
    I ask in regard to paragraphs (a) and (b) that some consideration should be given to the position of the minority shareholder. I ask whether there is any need for paragraph (c) The Solicitor-General advanced no argument in its favour, and gave no example of how it could be used The whole of his argument was on (a) and (b). At present we are without a scintilla of argument to support what seems to me one of the loosest and most unnecessary Clauses on which it has ever been hoped to found a criminal charge.
    The Chancellor of the Exchequer (Mr. Dalton): I think it would be for the convenience of the Committee if we moved forward a little. I understand there is interest in Clause 31, on which I hope to make a statement, in due course, and there are things coming on later which if we do not make better progress might drift far into the night. I suggest that we might speed our steps a little. I am quite prepared, in the light of the discussion, to look at this Clause again. I have listened
    792
    to the arguments with attention. While giving that undertaking, I would point out that there is nothing in this, which is more stringent than what has been embodied in Defence Regulation 5C and it has been worked without entailing any of the rather fanciful miseries pictured from the other side of the Committee. I shall not elaborate the argument, but as I say I will look at the Clause again although I think many of the situations depicted are unlikely to arise, are indeed incredible and such as we cannot take into account in consideration of this Bill, if we are to admit at all that this type of Measure should be passed into law. Wide powers should be vested in the Treasury and such powers are, theoretically capable of gross misuse. That is the basis on which the whole Bill has been drafted. Nonetheless, if the Committee are prepared to move forward, I undertake to have all these arguments studied before the Report stage.
    Lieut.-Commander Braithwaite: In view of the Chancellor's undertaking, which if it had been given earlier would have obviated our pressing this matter, I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Mr. Eccles: I beg to move, in page 22, line 23, to leave out Subsection (3).
    This is a Subsection which I feel sure the Chancellor will also agree to examine again. He will know that the banks acceptance houses regard this, and another Amendment on Clause 37, as of particular importance. If these words remain in the Bill, then, except with the permission of the Treasury, no one can lend any money to any company registered in the scheduled territories, which is by any means controlled, whether directly or indirectly, by persons resident outside the scheduled territories. It must be clear to the Committee that a bank cannot tell when a borrower comes along, whether in fact 51 per cent. of the shares are, or are not, held by foreigners. This would make it impossible to lend money to a large number of companies of great repute and standing, and old customers of discount houses and our banks. I ask the Chancellor to look at this again. If he leaves it in the Bill, he will find that a number of perfectly sound and sensible business deals will simply not be done.
    5.0 p.m.
    The Solicitor-General: I ask the Committee to reject this Amendment. The object of the Clause is, I think, fairly clear. It is designed to ensure that, when non-residents are establishing subsidiaries in the scheduled territories, or desire to extend the scope of an existing subsidiary, they should, as it is thought desirable in the national interest they should, provide a substantial proportion of the capital for this purpose by remittance, and not by borrowing sterling. By so doing they acquire a stake in the undertaking and they augment our central reserves of exchange.
    The objection to the Subsection is founded mainly on the difficulty which might arise in certain circumstances. I ask the Committee to say that that difficulty is not really as great as is pictured. Ordinarily, a banker, when considering whether money should be lent, would be able, by comparatively simple steps, to find out for whom the money is to be borrowed and the object of the loan. I should have thought that it would be part of the ordinary practice of banks so to do. When they require answers to their ordinary loan questionnaire, in whatever form they submit it, they would, or at any rate could, quite easily find out such information as would be necessary to enable them to comply with the Subsection. I ask the Committee to say that the difficulty is one which really does not exist to the extent which has been stated. Again, here, by actual administrative arrangements, the necessary exceptions can be made to get over any particular difficulty. Permission can be given, and, as in all these Clauses, it is always subject to the obtaining of permission from the Treasury. If there is a difficulty in a particular case, the question can always be resolved by reference to the Bank of England. Otherwise, I should have thought that a bank should ordinarily have no difficulty, in the course of its routine for deciding whether to make a loan, in discovering the identity of the person applying for the loan. For those reasons. I ask the Committee to reject the Amendment.
    Mr. Assheton: I am not quite sure that the Solicitor-General really appreciates the practical difficulty in which the bank concerned is in in a matter of this sort. Moneys are advanced
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    by branches of banks, and by people who do not, in the ordinary course of their business, think it necessary to make this, sort of inquiry. This Subsection will impose an additional burden on the ordinary bank which seems to me quite intolerable. It is not always possible to discover the facts. Shares may be held in the names of nominees. It may be that when the Cohen Report is implemented, and legislation is introduced, that practice may cease, but it has not ceased at present. I beg the Chancellor to look at this matter again before the Report stage. He has been good enough to say that he will look at earlier parts of the Clause. I suggest that the banking community will find it extremely difficult to carry on this part of their business unless some attention is pair? to the case which we are now putting.
    Lieut.-Commander Braithwaite: I hope that the Chancellor will be able to accede to this request. After all, an earlier part of the Clause is to be re-examined, and I think he might as well make a complete job of it while he is about it. We are just as anxious as hon. Members opposite to make progress, but I feel that the Solicitor-General rather missed the point of the argument which has been put forward from this side, when he told us just now that a bank would have no difficulty in coming to a decision in this matter. I submit, with respect, that what a bank decides is whether it is dealing with a creditworthy borrower—whether the borrower is one to whom credit can reasonably be extended, bearing in mind that the first duty of the bank is to look after its customers' money. The case we are trying to put is that that is one thing, but that for the bank to discover whether such a company is or is not indirectly controlled from sources outside the scheduled territories is extremely difficult.
    For instance, in Egypt, which is a cosmopolitan country, there are a number of business concerns, and to comply with the terms of the Subsection would be extremely difficult for a bank in the City of London, or anywhere else, in the case of such companies. They may say "We know that the assets of this company are so and so, and we feel justified in lending the £50,000 or whatever sum it may be but we do not know who, in fact, control this company in Egypt." It may be Greek-controlled, Italian-controlled, or it may be a native of Cairo or Alexandria who is

    795
    behind it. It is a point which the Government would be well advised to re-examine. We are up against the old problem of the language in the Bill not quite squaring with what, I have no doubt, is the intention of the hon. and learned Gentleman, and we should be most grateful if the Chancellor would go into this matter again.
    Mr. Dalton: I would not wish to mislead the Committee by endeavouring to bring a discussion to a conclusion, by saying in a free and easy way that I will look at the matter again. That would be dishonest on my part, and not helpful to the Committee. Nevertheless, Clause 30 might be regarded as a whole, and I have given an undertaking to look at an earlier part. I am not desirous of putting off the Committee by saying that I will do the same in regard to this matter. Seriously, I do not think that the difficulties here are anything like as great in practice, as seems to be imagined by some of those who have spoken. The Bank of England will be in a position to resolve many cases of doubt which may arise—the sort of suspicion which the hon. Gentleman mentioned—supposing that a bank here was not quite sure and did not know the background—
    Lieut-Commander Braithwaite: Nominees.
    Mr. Dalton: Yes, nominees, and so forth. In that case I am quite sure they would inquire of the Bank of England and see if they could resolve any doubt. We are, of course, in touch with the Bank on the whole contents of this Bill, and with the banks on matters of particular concern to them. I know that some of the banks have been a little concerned about this Subsection, and we are seeking to remove their apprehensions. I hope we shall succeed. Without setting any precedent for this formula, which might seem too tedious and unsatisfactory to the Committee if too often repeated, I promise that we will look at Clause 30 again before the Report stage.
    Mr. H. Roberts: I take the liberty of making a practical suggestion to the Chancellor. What troubles me is the absolute character of the prohibition. If one takes the simple case of a company domiciled here, applying in the ordinary way for a bank overdraft, it may be difficult
    796
    to find out, by way of a questionnaire, as the Solicitor-General has suggested, whether or not it is controlled from abroad. If it is controlled from abroad, the absence of metis rea on the part of the bank would be no defence. It occurs to me that if we put before the word "lend" the word "knowingly," that might meet the case.
    Mr. Dalton: I will note that suggestion.
    Mr. Eccles: In view of what the Chancellor has said, I shall ask leave to withdraw the Amendment. But I would first say that the Acceptance House Committee takes a completely different view from that put forward by the Solicitor-General I think the Chancellor had better take the advice of the Acceptance House Committee rather than that of the Law Officer, who showed that he did not realise that this is a matter of short term loans, and not only a matter of new capital for subsidiaries of foreign companies. I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Colonel Crosthwaite-Eyre: I wish to put one question to the Chancellor in reference to Subsection (4). Would he have a look at the word "override" in line 34?
    Mr. Dalton: Yes.
    Colonel Crosthwaite-Eyre: The word seems to be capable of quite a lot of different interpretations. If between now and the Report stage the right hon. Gentleman would see whether a more definite verb could be used, I think it would be of advantage.
    Question put, and agreed to.
    Clause ordered to stand part of the Bill.

    CLAUSE 31.—(Exemptions.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Mr. Birch: Mr. Deputy-Chairman, I wish to draw your attention to the fact that there is on the Order Paper an Amendment in my name in page 22, line 42, at the end, to add:
    "Provided that no such exemption shall be granted so as to give to any person any undue or unreasonable preference or advantage."
    The Deputy-Chairman (Mr. Hubert Beaumont): In view of the fact that it has been decided to have a full discussion on this Clause, the Amendment has not been called.
    Mr. Dalton: I agreed with the Committee, and Major Milner, when in the Chair, approved the proposal, that at this stage I should make a statement as to the way in which we propose to make use of the powers conferred not only by Clause 31—the Chairman ruled that we might go rather wider than that—but by any other Clause which may confer the power to make Orders or prescribe conditions for the doing of various acts. I would like to preface the detailed observations I intend to make by again repeating that, speaking very broadly, what we are doing in this Bill is putting into statutory form what till now has been embodied in the Defence (Finance) Regulations. We intend to make orders and give permissions—and I emphasise the distinction between orders and permissions—substantially on lines which have been followed over the past seven years, which have, as is generally admitted, not given rise to any serious accusations of injustice or lack of understanding of the commercial needs of the country.
    We must have power, of course, to vary the orders, and permissions at short notice. I have developed this argument before and I merely repeat it in a sentence. We must have power to vary if some unexpected circumstances arise; if it is found, for instance, that some new practice is growing up which is sapping our exchange resources. Therefore, all that I say now is subject to the understanding that, although our intention is to make orders and issue permissions on the lines I will now indicate, if circumstances should change, or new conditions arise, we should need to make changes. I take it that it would not be any breach of the confidence which we are asking from the Committee, if such changes, for good cause shown, were made.
    After those preliminaries, may I distinguish between orders made by the Treasury, which, of course, are not confined to those under Clause 31, and what may be called permissions? I will deal first with the permissions, which are somewhat different from the orders but which, I think, will be of equal interest to the Committee. Not all the reliefs to be given
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    by the Treasury under this Bill, when it is an Act, will be published as orders. Many of these reliefs will be effected by way of administrative permissions which will go to banks, travel agencies, and so forth. There is nothing in any of these permissions which we shall wish to hide. On the other hand, many of them will be of a very limited and personal character and we do not wish, therefore, to publish them needlessly. We are, however, quite prepared to publish anything which it is reasonable should be published and we have no desire to be secretive about permissions.
    On the question of how that can best be effected, I am prepared to act in accordance with suggestions which may be made to me. I would merely say that our practice has been, and will continue to be, to make general permissions available to newspapers which follow these things—to "The Times" and the "Financial Times" and any other organs of news which are interested. Nor should I resist, in any particular case, the placing of any notice in the Library of the House if it really were thought, by any hon. Member who seriously studies these things, to be of sufficient interest. There is no resistance to publication but I think there should be some limit placed upon it, particularly as many of these will relate to particular persons.
    5.15 p.m.
    The permissions will be circulated to all the persons concerned by the Bank of England on behalf of the Treasury. Most of them will be in a running series known as "F.E." or foreign exchange notices. Similarly, a great number of applications for foreign exchange are made upon standard forms, as many hon. Members know. These forms are stamped either "approved" or "not approved," as the case may be, by the banks, working under the authority delegated to them, or by the Bank of England itself. A very large number of individual transactions in this field are dealt with in this way. The administrative technique of the permissions, as I call them, will continue unchanged. It covers a very large part of the field in which reliefs are given. I emphasise this in order that we should not get too disproportionate a view of the orders as distinguished from the administrative permissions with which, till now, I have been dealing.

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    The orders may be made under any Clause in this Bill where there appears the formula, which is repeated fairly often, "Except as specified or prescribed by the Treasury" such and such a deed may not be done. Wherever that is said, a Treasury order may be issued. It may be needed; it may be issued. To take one example, an order will be needed to specify currencies under Clause 2. There is a relevance here, as hon. Members who have studied the Bill will have noted, to the provisions of the Sixth Schedule. It is there laid down that certain classes of orders are not required to be laid before Parliament. Hoping to create a spirit of sweetness and light in the Committee, I say at once that my mind is not completely fixed on the contents of the Sixth Schedule. When we come to it, it may be that we will hear the arguments and come to a decision. Arguments have been adduced already, in passing, as it were, on some of these points. I am by no means rigidly convinced that we need keep the Sixth Schedule exactly as it stands. We will consider proposals for omitting from the Sixth Schedule one or other of its provisions. There must be a Sixth Schedule with something of this character. It would be absurd to require every detail to be put before Parliament but there is a zone of doubt which I shall be very glad to explore when we reach that point.
    The principal orders due to be made under Clause 31 will fall into three groups. This, substantially, will follow the present practice. There will be orders relating to payments, securities and travellers to and from the United Kingdom. I am afraid this is a little detailed but I think it is the information which the Committee wants. Those will be the three main divisions of the orders—payments, securities and travellers. With regard to payments, the existing order, which we shall substantially reissue, permits a non-resident to make the following payments. First, it permits him to pay a resident of the sterling area any sum without limit of amount. We shall continue that. Second, it permits a non-resident to pay another resident of his own monetary area; and, third, if this person, legally a non-resident, happens to be in the United Kingdom for a short time—not long enough to change his residence—he will be permitted to draw cash from his own account
    800
    and to spend it in the United Kingdom without limiting the amount. These liberties are all contained in the present order and will all be continued; in fact, they all legitimise the transfer of sterling. That is the common feature of them all.
    Further than that, we propose that the following facilities shall be given. A nonresident will be allowed to spend freely in this country any sterling, notes or cash, of which he is lawfully in possession, whether he imported them—there is a legal limit of £20 for sterling notes—whether he cashed a cheque or a travellers' cheque, or whether he changed foreign currency with an authorised dealer in this country. I will say a word about travellers' cheques in a moment. In all these ways he may obtain sterling. This covers the case raised by the hon. Memberfor the Combined English Universities (Mr. H. Strauss), about the American who wanted to give his wife money with which to go shopping. The provision which I have just indicated will make that possible. We have no desire to make things difficult for non-resident visitors to this country, American or others.
    The provision that I have just been summarising, permitting the non-resident to spend in this country sterling legally acquired by any of these means, will be made specifically clear in the new order. I am not quite satisfied with the present order; I think that it is, perhaps, obscure, and we hope to remove the obscurity and make it clearer that all these spendings by non-residents of sterling are permissible. Further, there was the question about bus fares and bridge winnings. We will try to meet that problem also. We propose to make it permissible for a resident to make cash payments to nonresidents who happen to be in the United Kingdom. There will have to be certain limits, but within those limits, which will be put into the order, we shall make it possible for such cash payments to be made in the United Kingdom. We have in view the payment of debts arising from bridge or any other game of chance.
    Mr. Stanley: Plus tax?
    Mr. Dalton: The tax must fall if it is prescribed upon any taxable transaction. So far, I have been speaking about the section of the order relating to payments both by residents and non-residents. The details have yet to be worked out, but I

    801
    hope that the lines which I have indicated will be both intelligible and generally approved. They continue the present arrangements, except in certain particulars where they make the present arrangements more explicit than they now are.
    With regard to securities, there will be orders relating to the handling of securities. Perhaps I may divide that, again, under two heads. We propose to make orders—and this also applies to permissions—which will remove transactions, elsewhere in the scheduled territories, from nearly all the provisions of Part III of the Bill which, otherwise, would impose restrictions upon them. It is our general purpose to remove the great majority of transactions which take place within the scheduled territories from the limiting provisions imposed on them by Part III. We shall allow payment of capital monies outside the United Kingdom where the recipient is inside the scheduled territories. We shall also exempt from Clause 15—which the Committee will recall requires securities to be deposited with an authorised depositary—any securities which are on a register in a scheduled territory.
    For example, let us take Kaffir shares of South African goldmining companies. If these are registered on a South African register, we shall not require them to be deposited with an authorised depositary here—I give that as one illustration, but there are many others—provided that we know that these securities are somewhere within the scheduled territories. We are equally content to know that they are in safe keeping, whether in South Africa, Australia or even in the Faroe Islands, provided always—and this is a proviso which I hope there will be no difficulty in getting satisfied—that we have adequate arrangements for cooperation with the exchange control in the other Scheduled territories concerned. Provided that we and the South African Government have a satisfactory understanding about the operation of our respective exchange controls and their interlocking, we shall be perfectly content to allow these securities to be registered in South Africa and not here. As I said earlier, in reply to a question, we have, so far, no reason to doubt that we shall have cooperation with the other Governments in the various scheduled territories in this and other matters relating to exchange control.
    802
    With regard to securities—and this is another point which, as I have explained before, is a relaxation of the present operations under the Defence Regulations—we shall embody in the order all that remains, which is not a great deal, of Regulation 1 (1) of the Defence (Finance) Regulations which originally gave power to the Treasury to acquire by compulsory purchase dollar and other securities. We have, as the Committee clearly understands—the matter was discussed at an earlier stage—given up the requirement of compulsory purchase by the Treasury, but we still need to control the disposal of the dollars or other hard currencies represented by securities for the practical reason that these are the "second line" of our own monetary reserves. We must be sure that these dollars—if I may quote a phrase which I used earlier—do not go astray. We do not insist upon the Treasury purchasing them compulsorily, but we want to be assured that they are not lost to our reserves.
    Sir Arthur Salter: Can the right hon. Gentleman say whether the investor is now perfectly free to sell any American securities so long as the proceeds are offered to the Exchange Control? I rather understood the opposite from his earlier statement.
    Mr. Dalton: I was just going to try to explain that and kindred points. We no longer require compulsory purchase, but we wish to continue an authority to limit the disposal of the dollar and similar securities except with Treasury permission. Therefore, the position is that under the order which we shall make, a United States dollar security can be sold within the United Kingdom. The dollars must not disappear from the United Kingdom. Further, we must make sure that if a security is sold outside the United Kingdom, the dollars continue to be available to us.
    5.30 p.m.
    On the subject of "switching," on which I was asked a question some time ago, about selling one and buying another, I shall be prepared to make a statement in the course of the Third Reading. There are certain discussions now proceeding I myself would like to see the power of "switching" established with reasonable freedom, but I am not yet in a position to make a statement

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    on the subject because there are discussions proceeding on an inter-governmental level, which will be concluded, perhaps, even before we reach the Report stage or the Third Reading. We may take the two on the same day, which is not uncommon in a case of a Bill which is not really contentious, such as this Bill, and I may be able to make a statement then. I would like to see the power of "switching" accepted, subject to reasonable safeguards, in the great majority of cases. We shall not be niggardly or pedantic in refusing permission for dealing with securities. In exceptional cases—cases of hardship, for instance—we shall not be unduly difficult in granting permission to dispose of dollar securities. We will undertake not to be stupidly difficult about it.
    The third point on which I would like to say something is the question of persons "travelling to and from the United Kingdom. We are going to re-enact the substance of the present Travel Order. The new order will contain the £20 sterling limit, and there will also be limits on the import of a short list of other foreign currencies. In making that list, we are partly dependent upon agreements and discussions with the foreign governments concerned, but I would like to underline the fact—because here we come to the question of invisible exports to which importance is attached—that we are going to grant these orders, so as to make it as easy as possible for the foreigner coming to this country for a holiday, to spend his money with as little restriction and difficulty as possible. The American visiting this country will not be asked to hand over to us his dollar balances or his gold. In fact, so far as can be administratively contrived, we are going to leave visitors to this country as free as possible from exchange control interventions.
    We must keep powers in the background, of course, but, as far as we can, we are going to make the visitor, during his visit to this country, unaware that we have exchange control at all, unless, of course, we have reason to think that he is deliberately engaging in evasive transactions of some kind or another—compensation deals, as they are commonly called—which, I am sure, all hon. Members would agree must be checked; otherwise, a very serious hole is rent in our defences.
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    Subject to that, and provided there is no reason to think that he is acting dishonestly and trying to enter into improper arrangements, we shall leave him as free as possible of any consciousness of exchange control.
    On the subject of travellers' cheques, there was a long Debate, and I have sought to remind myself of the conditions under which travellers' cheques are issued. I have travelled abroad so little for so long a time that I still think in terms of old-fashioned letters of credit, but the difference is not, in fact, substantial. ' The non-resident coming to this country will be entitled to cash his travellers' cheques at banks, hotels, stores and any other reputable places where a traveller would naturally wish to cash them, but we must here be a little watchful that they are not sold to residents in this country who merely want to hold them as a reserve of foreign currency. We think that is neither right nor reasonable. All normal processes of cashing travellers' cheques at places where a normal person of good intent would wish to cash them will be free.
    With regard to the resident, I have in mind the sad case of the friend of the hon. and learned Gentleman the Member for the Combined English Universities (Mr. H. Strauss), who wanted to leave the country by air but who was unable to do so for some days. The resident in this country can only obtain travellers' cheques from an authorised dealer or from some approved agency such as Cook's. That can easily be arranged and will cause no inconvenience at all. Travellers' cheques must not be issued by unauthorised persons, but there must be full facilities for the normal traveller or resident who wishes to travel to obtain his cheques from authorised agencies. He should use these for the purposes described in his application. I am advised that travellers' cheques are payable in this country always, and in such other countries as may be set out on the face of the authority.
    I myself think in terms of letters of credit, and I recall that when I used to take out a letter of credit it was made out to such and such a foreign country. When I wanted to go to Yugoslavia, that country was added to a short standard list which otherwise would not have included Yugoslavia. The limitations imposed upon this

    805
    particular instrument are set out upon its face, with the places where it shall be payable, and, therefore, there will be no ambiguity. In any case, it will be possible—indeed, this is our intention under the order—to make travellers' cheques cashable in this country cover such circumstances as those indicated by the hon. and learned Member, where the traveller's intention is temporarily frustrated by the weather or some change of plans or the sickness of a relative, and he will be able to use the money here, even if he has not yet been able to use it where he would have much preferred to use it, abroad.
    Mr. H. Strauss: He may cash it otherwise than at a banker's.
    Mr. Dalton: The case put by the hon. and learned Gentleman was of a person who had to spend the night at an hotel, and had not got any small change. The hon. and learned Gentleman asked what could this person do? The answer is that he will be able to use his traveller's cheque to pay the hotel for his lodging and refreshment. We are looking again at Clause 4, which is relevant to this matter, because some other points have been mentioned in connection with it. We are going to see whether the words intended to enable "in Subsection (1), which is the subject of debate here, bring in instruments that we never intended to control. If so, we shall make an order under Clause 31 to exclude any such instrument by specific description. We are not anxious to take power to do anything which is not fully within the intention as we have set it out. That is a broad statement, and there remain a number of particular points raised in the course of Debate to which I promised to give attention.
    Sir A. Salter: I would like to ask a question concerning travellers' cheques. A traveller frequently returns to this country with a certain number of travellers' cheques left over. He does not intend to use those travellers' cheques except in relation to the places permitted. It is very inconvenient if he has to cash them all at once and get fresh travellers' cheques later. I suggest it should only be an offence if he uses the travellers' cheques for an unpermitted purpose.
    Mr. Dalton: I take it that the right hon. Gentleman's point is that it should not be an offence merely to hoard travellers' cheques for a while?
    Sir A. Salter: It is a "hangover" from one visit. If one were to secure travellers' cheques for £5,000, obviously that would be improper, but if one had a "hangover" from one permitted voyage it would seem to me to be unreasonable to have to destroy them and get fresh cheques in a few months' time. This is a small technical point, of course.
    Mr. Dalton: It is a small technical point. I would have thought if the amount involved was small, the de minimis rule would apply, and no one would want to bother with it. On the other hand, if it were large, he would, I think, naturally hand them in; he would not want to keep potential purchasing power like that idle. That at any rate, would be my own approach to it: if it were small it would not be worth bothering about, and if it were large he would hand them in to his bank.
    May I now take a number of points which were raised by hon. Members in various parts of the Committee, and which I undertook to consider? We had some discussion about authorised dealers, how they were to be defined, and so on. Some hon. Members wanted protection for all existing people, and we saw some difficulties in that. I throw this out as a suggestion, not as a commitment, and I would like to see how the Committee would react to it. Possibly the simplest thing to do would be to accept, when the times comes, the Amendment to the Sixth Schedule standing in the name of the hon. Member for Chippenham (Mr. Eccles), in page 42 line 24, to leave out paragraph 5. If that were done it would mean that Treasury Orders containing the lists of authorised dealers would then have to be laid before Parliament from time to time. As I said earlier, we do not, as a rule, want to lay before Parliament mere lists of business names. That might perhaps sometimes seem to be invidious. At the same time, it would safeguard any existing authorised dealer from being struck off without due consideration—though I hope that point is really not at all substantial. I would hope that we could be trusted not to penalise in any way people who had been carrying out their functions quite properly. I see no danger to the Exchange Control in accepting that Amendment when the time comes, if that should seem to the Committee to be a reasonable way of handling the problem.

    807
    I am not hidebound about this. Generally speaking, of course, the authorised dealers will be the banks; at any rate, in a very high proportion of cases they will be the banks, and also the principal acceptance houses who are already, in many cases, authorised dealers. With regard to brokers and solicitors, generally speaking we have no wish to exclude people who are doing this now. But one has to keep a watch on the thing, to prevent undue multiplication of authorised dealers, which might make the administration rather difficult. However, I am open to suggestion as we proceed in the discussion. I offer the suggestion that acceptance of the Amendment to which I have just referred might afford an easy way out. So much for that.
    5.45 p.m.
    The hon. Member for Chippenham also made reference to facilities for the entrepôt trade and merchanting. On the one hand, of course, we are anxious to do nothing to interfere with such continuance and development of the entrepôt trade as is really beneficial to this country. On the other hand, I do not think we can afford to finance the entrepôt trade quite indiscriminately. For example, if there is merely a small merchanting profit, which is paid in soft currency, we cannot afford to buy goods for dollars that would be passed on to a third country, merely with a small additional profit. The whole purpose of this matter is to safeguard our resources for more valuable currencies. There are some types of transactions which, though they may bring profit to an individual trader of this country, do not serve the wider national purpose which we have in mind. Therefore, there must be some discretion in the matter.
    I hope that all hon. Members who have taken an interest in this will find encouragement in some figures which I shall quote to show the extent to which we are already financing, under the Exchange Control, sterling transactions involving goods moving from one foreign country to another; it is entrepôt trade in the sense that the goods do not touch here. For the month of October, 1946, the Bank of England approved no fewer than 7,000 applications, totalling £23,000,000 worth of trade of this kind; that is to say,
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    sterling transactions involving the movement of goods from one foreign country to another. I think that is a fair total, which shows that this trade is proceeding on a very substantial scale, and that there is no danger of its being unduly choked down by existing regulations. At the same time, we must reserve some right to see that those particular transactions are not, on balance, unfavourable to this country.
    I was also asked about this matter by the hon. and gallant Member for Penrith and Cockermouth (Lieut.-Colonel Dower), who thought long delays would occur if all these cases were dealt with, as we say, on their merits. That is not, in fact, our experience. We find we can maintain a very fast service with all normal transactions. On most commercial matters, which are those referred for permission, we find that 24 hours is the normal period of time. If longer time than that is taken it is because there is something exceptional in the case. If it were demanded that the longer period should be brusquely shortened, it would mean we would have to give a snap answer in the negative, in cases in which we do not at present, without inquiry.
    I was also asked about American investments in this country and how we would deal with such applications. I think, broadly, the answer is that we would welcome the direct investment of American funds in this country if the American investor is bringing a real contribution of "know-how", a real contribution of industrial knowledge which otherwise we would be without. But our factory space and our building labour force are very limited; and we have lots of things to build and do for ourselves. Therefore, I do not think an American should expect to be pushed ahead unless he is bringing some especially valuable "know-how" which will be of industrial value to our domestic productivity and export trade; he cannot expect to go anywhere near the head of our domestic queue. After all, there is a long list of people waiting for factory facilities and so on. Subject to that, we would welcome anything which added to our industrial knowledge. I am anxious, on the one hand, not to miss points that have been raised, but on the other hand I do not want to go on at tedious length. The question of brokers and solicitors was

    809
    raised, and I did mention that in passing and try to say something about it. We are considering it, and I will say something further on that on Report.
    Lieut.-Commander Braithwaite: Authorised depositaries, is that?
    Mr. Dalton: Authorised depositaries. We have now a List A, as we call it, which includes 74 names. That is a very substantial number. It includes a number of acceptance houses and other people. Our feeling about brokers is that as temporary recipients up to, say, 30 days, there is no possible objection to the broker as what may be called a temporary authorised depositary; that is, in fulfilment of their normal function as dealers. But in general I do not think brokers regard themselves as permanent safe-deposits. However, I would not wish to rule them out in any brusque way. Generally speaking, it will be found that most holders of securities required to be so deposited prefer their bank, or one of the acceptance houses. I merely make that cautionary observation. We will look at it and see how far we can make it possible for brokers to play a reasonable and proper part in these arrangements, although I think the part their customers would wish them to play will be smaller than some hon. Members have suggested. The same is true, I think, of solicitors. They are not quite in the same class, because solicitors do handle the documents of their clients in a different fashion from brokers sometimes. If the Committee will let me continue to look at this to see what we can do on the Report stage, I will try to meet any reasonable suggestion as to a fairly wide category of authorised depositaries.
    Lieut-Commander Braithwaite: Would it be possible to raise the matter also when we come to Schedule 6, and discuss it on the Amendment to which the Chancellor has referred, to leave out paragraph 5?
    Mr. Dalton: Of course, it could be discussed there. We have to strike a balance, on the one hand safeguarding people against being unfairly treated, and on the other, not putting too many names of people and firms into these orders. As to switching, to which I have already referred in another connection, we are in consultation about that, and I will say something on that on Report.
    810
    The hon. and gallant Member for New Forest (Colonel Crosthwaite-Eyre), who was here just now but, I think, has left the Committee, raised a question about historic notes, gold coins, numismatic rarities, and so on. As to gold coins, there is no import ban on those, and we would not make any difficulty about them I do not think there would be difficulty there. Historic notes are covered by the provisions of Clauses 21 and 22. They should be declared at the ports. I think it is only reasonable to ask that anything of high value, an ancient note of some currency or other, should be declared to the Customs, whether coming or going. They are rather unusual, rather rare articles of baggage; and I think no customs or emigration officer would be unreasonable about them. We will issue the necessary instructions, but, normally speaking, the Customs officers would not wish to interfere with any reasonable movement of such things. Of course, if we found a particular traveller leaving the country frequently and always seeming to be declaring an historic note we should tend to regard him as a person to be regulated—a little bit more than if it were his first offence, or the first act of that kind.
    The hon. Member for Edgbaston (Sir P. Bennett), who is not here now, raised an interesting point about the export of assurance policies. This is already allowed by general permit within the sterling area. There is no difficulty within the sterling area for the export of assurance policies, and we do not intend to make any. The companies concerned are also allowed to post policies to people abroad. Then the hon. Member for Northwich (Mr. J. Foster) asked for some explanation of various accounts tabulated in S.R. & O. 1383 of 1946. I have here an extremely long answer. I think the Committee will not deem it discourteous if I do not proceed to read it through, for it is very long and very technical. Possibly the hon. Gentleman will be so kind as to confer with me about it; and if he then finds any difficulty about the matter, and cares to raise it further, I will give a full reply to the Committee. I think it would delay the Committee too long if I were to read out this answer, because it is a complicated affair.
    I think I have covered the principal points raised earlier on, and have given an accurate picture on broad lines of the way in which we intend to operate the

    811
    provisions. I want to emphasise again that this is a question of "see how we go." We must test it out. I repeat, we have no intention suddenly to sharpen up these controls. We have no intention to add difficulties. On the contrary, we are seeking to remove a certain number of difficulties and obscurities which have characterised these orders. I do think that within the framework I have been sketching we can give to all people on their lawful and proper occasions reasonable elasticity with regard to their doings, and reasonable freedom with regard to buying and selling, and so forth. I do hope it may be found in practice that these orders, which can be issued when the Bill is law, subject to the usual checks by the House, are not other than reasonable in themselves. I would also hope—which is a more important point—that the actual operation and administration of the orders by the officers concerned will also be felt to be reasonable, subject to the great need to safeguard our foreign exchange reserves in these difficult times. Subject to that, I hope it will be felt that these orders are administered with common-sense, and in a spirit to which no patriotic person can take objection.
    Mr. Eccles: I think the Committee has good reason to thank the Chancellor for his very interesting statement, which has done much TO clear many points which have been put during our Debate. It is not possible, without examining the statement in detail, to make a full reply; but I am impressed by the number of relaxations which the Treasury intend to make, and I am impressed by the Chancellor's words, towards the end of his speech, that he would have to see how things went along, for they seem to reinforce our contention that the Bill should not be permanent. But we shall have an opportunity or referring to those words later.
    There are one or two particular questions I should like to raise. The Chancellor described the relaxations in favour of non-residents. I am not quite sure whether everything which is now permitted to a non-resident is to be permitted under the new orders. I believe I heard him say that only a resident in the scheduled territories could take out of this country capital moneys repaid. I believe that at the present time a resident outside the scheduled territories can take out of
    812
    this country capital that was repaid—if, for instance, War Loan were paid off—and I should like to ask the Chancellor whether that right will be preserved under the new orders.
    Mr. Dalton: May I answer that immediately? The answer is, "Yes." If I gave any suggestion that we were going to narrow that, I was failing to make myself clear. There is no intention to narrow rights on that point.
    Mr. Eccles: I am sorry that travellers' limits are not to be increased. We feel that they do bear hardly on a certain class of traveller making long journeys, and I hope we shall have an opportunity to raise that later.
    Mr. Dalton: Would it be convenient, if I answer the points as they come along? I do not want to intervene unduly, but it may be convenient for me to do so. A business traveller has greater facilities now, according to the nature of his business and the length of time. Apart from those facilities the ordinary traveller's facilities are limited to £75 a year; but the traveller on business has an extension now, and that will continue.
    Mr. Eccles: I understand foreigners can bring into the country as many pound notes as they like. If that is so, it means a foreigner can buy our notes at a discount.
    Mr. Dalton: I am surprised. I am getting that checked.
    Mr. Eccles: I understood the Chancellor to say that non-residents could come here with as many notes as they wished.
    The Financial Secretary to the Treasury (Mr. Glenvil Hall): With Swedish notes, for instance.
    Mr. Eccles: I am glad to have that explanation. Then my point falls to the ground.
    Mr. Dalton: Sterling notes, £20, in or out, is the maximum.
    Mr. Eccles: I was glad to hear what the right hon. Gentleman said about the entrepôt trade. The particular point I had in mind previously in the Debate was that sufficient quantities of soft currencies—I was thinking, particularly, of the European currencies—should be made available to merchants to buy, in order

    813
    afterwards to sell, in dollars. As a matter of fact, it is not always wise to prohibit a man from buying in dollars. I know of one Bond Street dealer who spent 10,000 dollars at an auction of English furniture in New York, shipped the stuff back to his gallery in Bond Street, and sold it at double the price to American tourists the next season, so it is not always wise to prevent our dealers buying in America. We also welcomed the Chancellor's statement on American investments in this country, and agree with him that, of course, what we want is the "know how." We do not want Americans coming here ahead of our own requirements unless they bring something with them which is very valuable.
    6.0 p.m.
    My last point is that the relaxations in regard to Empire securities are so sweeping and so obviously important that I cannot understand why they should not be in the Bill. It would have made a much better showing in our relations with the South Africans, for instance, if the general licences which are to be given, and which one knows will not be withdrawn without some very great crisis arising—which, we hope, never will—had been embodied in the text of the Bill. I thank the right hon. Gentleman for his statement, which I shall read tomorrow with the greatest attention.
    Mr. Boothby: I want to echo what the hon. Member for Chippenham (Mr. Eccles) has said and to thank the Chancellor for his clear and lucid statement which was, I am sure, reassuring to a very large number of us on this side of the House. The Chancellor laid great emphasis upon the fact that he hoped that these orders would be administered with what he called reason and commonsense, and I hope that that view will be conveyed not only to this Committee but to the officers concerned. I would like to lay a little emphasis on speed as well. I know that we do not want snap decisions, but in commercial and trade dealings the Chancellor will readily recognise the necessity for quick decisions. I hope he will emphasise to the officials and officers concerned the desirability of getting the permission or refusal to the traders concerned as quickly as possible. I also want to thank the Chancellor for what he said about the scheduled areas, or, as I prefer
    814
    to call it, the sterling area. He almost encouraged me in the course of his remarks to believe that it was not quite as dead as I thought it was. I have always been sure it would revive in the near future; and he gave me a little encouragement, by the freedom of action which is to be allowed within the sterling area, to believe that is less dead than I had thought, and that its revival will be even more lusty, vigorous and speedy than I had expected.
    The Chancellor also referred to expenditure by non-residents in this country. Clearly he intends to give them a very large number of facilities, but as he was speaking I could not help wondering on what, for the time being, they would spend their money, I think he will have to look into that matter as well. The ordinary foreign visitor coming into this country at present has, on the whole, some pretty bleak experiences; and I would take this opportunity of reminding the right hon. Gentleman that he must give them some moderate comforts, a little bit to eat and even, although I hardly dare venture to say so, an occasional something to drink I do not think that it is much use the right hon. Gentleman giving large facilities to foreigners to spend money here unless he provides something for them to spend it on. I do not much mind how high the prices are; but if we have not got anything to give them, we cannot make a profit, and if we are not very careful we may disgust them, so that it will be a very long time before they come back. I beg the right hon. Gentleman to bear in mind that it is no use encouraging the tourist traffic unless we have something really good to offer. Otherwise, it may only discourage people and put them off, delaying the building up of a sound tourist traffic later on. The facilities in this country are not, at the present time, such as would encourage foreigners to come here, even if they had plenty of money; they might well discourage them from coming again in the future.
    I am disappointed that the right hon. Gentleman has not seen fit to allow people, who are pretty jaded after six years of war, and who have not been abroad to see the sun and have a holiday for a long time, to have a little more than £75. I should have liked the right hon. Gentleman to raise the sum to £100, which I do not think would be unreasonable; and in this connection there is one other

    815
    point I want to put forward for his consideration. A number of citizens of this country earn money abroad, and it is very good for this country that they do so. They make it in America and they make it in Europe. Let us take, for example, the case of an author who sells a book in Switzerland. If it is a very good book which makes money, surely he should be entitled to spend a little of the money he has earned himself in Switzerland on a well-earned holiday, over and above the £75. Under the present regulations he cannot spend one penny of the money outside this country. If he wants to send his child to be educated there, he cannot even use money which he has himself earned in Switzerland for the purpose of paying the school bill. It is the same in the United States of America; an author—and we do produce some very successful authors—may make a very large sum of money in America, but he cannot go to California for six weeks to recover from the result of his efforts, with any degree of facility, comfort or sense of security. I think the right hon. Gentleman might look into the matter from that angle. People in this country who actually earn foreign currency might be allowed to spend, at any rate, a small quota in the country concerned if they wish to do so, over and above the £75. I put that point for the right hon. Gentleman's consideration; and, having done so, wish to say that I thought his speech was most reassuring and encouraging, and has given great relief to many of us on this side of the House.
    Mr. H. Strauss: The Chancellor's speech was most useful in enlightening us on many points about which there was some doubt. I only wish to raise two; there was a third, dealing with foreign travel, on which his remarks were profoundly unsatisfactory, but as that is the subject of a later Amendment I will say nothing about it now. The two points I wish to put to the Chancellor are these. He and his advisers have obviously taken considerable trouble to ease the position of the non-resident so far as payments are concerned. I would suggest to him that he might consider whether it would not also be possible to ease the position of non-residents in regard to certain other prohibitions in the Bill. An obvious one arises under Clause 29 in the case of the exercise of the
    816
    power of appointment which was mentioned earlier. Throughout the Bill there are many cases in which the Chancellor of the Exchequer obviously did not have the non-residents in mind at all, and he might be able to ease their position considerably.
    The only other point I would mention is one in regard to which the Chancellor's mind is already travelling in the right direction In fact, I believe that he agrees with what I am going to say. I want to express the hope that he will find it possible to authorise switching. Perhaps I might give a personal experience to show him the reason why I think it would pay him. I did not own many American securities, but I owned some, and most of them were very properly taken over by the Treasury—as I hope they always would be taken over in times of national need—to help to satisfy the national needs during the war. One was not so taken over, probably because it was, comparatively speaking, a dud. Anyhow, it was not taken over. I think the present position is that, if I sold it, the dollars would have to be handed over, and I should have lost my last foreign investment So long as that is the case, I shall not sell it until the Treasury tell me they want it.
    He is now giving up the power to demand that such an investment should be handed over, and the position is, therefore, until switching is allowed, that the investment will remain in its present form. If, on the other hand, I were able to sell it and reinvest, I should probably reinvest it more intelligently, and in due course, if there again were a national need, the Treasury would be able to take over whatever investment I had made. It is clearly in the interests of the Treasury that I should be able to do this, which is an argument in favour of allowing switching. I believe that it is already in the Chancellor's mind, and I urge him, by that example, to see that it would pay him.
    Squadron-Leader Donner: I wish to put one point in connection with the Chancellor's refusal to increase the £75 allowance to £100. Having recently returned from the United States, I know how difficult is this restriction, and how heavily it bears upon travellers. Could the Chancellor say what would be the cost to us, if the figure

    817
    was increased to £100? If he cannot give an answer today, perhaps he will be willing to make the information available at a later stage, and to consider the whole question in the light of the cost which would fall upon us by such an increase.
    Mr. Dalton: I can answer the hon. and gallant Member now. It would be very difficult to give an answer that would really mean anything, because there are some people who think that a holiday is not worth while on £75, whereas if the figure was increased to £100, they might think it worth while. I know the statistics well enough to be able to say that no answer which I could give would really have a satisfactory meaning; it would be the wildest of guesses, and would not be an estimate at all.
    Squadron-Leader Donner: Surely the right hon. Gentleman knows the number of people who have left these Islands during the last year and have spent £75? The right hon. Gentleman should be able to say, therefore, what it would have cost this country if these people had spent £100, and that would give us an approximate figure upon which to form a judgment.
    Mr. Dalton: It would not necessarily give the answer, because there may be others who have not gone abroad, who might say that they cannot do it on £75, but who would go abroad if the figure were increased to £100. However that may be, I do not feel we can at this moment ease up, because in the last resort, this is a substitution for essential imports. Dollar resources have to be used in various directions, and I think it would be a little more important to get a little more fruit, rather than a little more travel for those who go abroad.
    Squadron-Leader Donner: I appreciate that, but surely it would be possible to differentiate between hard currencies and soft currencies. There is no quarrel between us regarding the shortage of dollars. Would it not be possible to make a differentiation?
    Mr. Dalton: It would be deeply resented in Canada, if nowhere else.
    Mr. Hopkin Morris: If that is so, why not reduce the figure from £75 to £50?
    Mr. Dalton: There is something to be said for that.
    6.15 p.m.
    Mr. Assheton: We on this side of the House were very glad to hear some of the answers which the Chancellor of the Exchequer was able to give. I do not want to detain the Committee, but I want to be satisfied that there will be adequate publication with regard to the permissions about which the Chancellor told us at the beginning of his speech. I remember so well, in the days when I was at the Treasury, having complaints that the Board of Inland Revenue often made an administrative decision which other taxpayers in different parts of the country were unaware of. It was not the fault of the Inland Revenue, but it was a legitimate grievance. The same thing might happen here, if the public are not aware in one case of what has been done in another. I hope that the Chancellor will go out of his way to help the public, and that he will not wait for questions to be asked. I know it can be done by good administrators, and he is fortunate in having many. On the question of switching, I hope very much that when we come to the Third Reading, the Chancellor will have something satisfactory to tell us. I gathered from what he said that it was in his mind to make a concession, and I think that we shall feel very disappointed if in fact a reasonable concession is not made in that respect. My hon. and learned Friend the Member for the Combined English Universities (Mr. H. Strauss) has given an excellent illustration for allowing some greater freedom in that particular matter.
    I want to ask the right hon. Gentleman one question about authorised dealers, to which I hope he will give some consideration before we come to the Schedule. There are certain firms who before the war were definitely members of the foreign exchange market, who when the wartime regulations came in, were excluded from being dealers. I do not know whether the Chancellor has been made aware of this. They are not necessarily members of the Bankers Association or of the Acceptance House Association, although they were legitimate dealers in foreign exchange. I am not talking about brokers who might have dealt in foreign exchange, but firms who were definitely members of the foreign exchange market, and were recognised as such before the war. They have been excluded from dealing during the war, and

    819
    they loyally accepted the unilateral decision imposed on them. They now feel that the matter wants looking at again, and I should be obliged if the Chancellor would do so, and give some answer which will encourage my constituents in the City of London who have asked me to raise this particular point. On the question of the £75, as I understand it, the £75 relates to the visit, within one year, of an individual citizen irrespective of length. I wonder whether that is a wise and reasonable arrangement and also whether the point raised by my hon. and gallant Friend the Member for Basingstoke (Squadron-Leader Donner), as to the particular currency involved, might not be taken into account. For example, would the Chancellor not rather let someone, travelling in France, spend £100, than someone in America spend £75? It occurs to me that with greater flexibility in the amount, we might easily direct travel into certain channels, which would be less burdensome to the Chancellor and to the Treasury.
    Question put, and agreed to.
    Clause ordered to stand part of the Bill.

    CLAUSE 32.—(Blocked accounts.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Lieut.-Commander Braithwaite: I suggest to the right hon. Gentleman the Chancellor that as we have an Amendment down to the Third Schedule, which deals with the same matter of blocked accounts, it might be more convenient if any discussion took place at that point.
    The Solicitor-General: Speaking for myself, the suggestion made by the hon. and gallant Member for Holderness (Lieut.-Commander Braithwaite) would be very convenient. The machinery for dealing with blocked accounts is developed in detail in the Third Schedule. This is really no more than an introductory Clause.
    Question put, and agreed to.
    Clause ordered to stand part of the Bill.

    CLAUSE 33.—(Contracts, legal proceedings, etc.)
    Mr. J. S. C. Reid: I beg to move, in page 23, line 12, to leave out Subsection (1).
    820
    I move this Amendment for the purpose of obtaining some information, because I find myself in a double difficulty I am not sure that I understand what the Subsection means, and if it means what I think it does, I am at a loss to understand the reason for it. If one is silent on the question of permission or consent from the Treasury before a contract can be fully carried out, and that permission is not given, what happens? I do not know Does the contract fall, or do the other terms of the contract remain in operation, or is it a question of circumstances that must be worked out by the court in every case? Normally, if an important part of a contract is frustrated—and this, I take it, would be a form of frustration—you expect some permission to be given If the permission is not given, if the contract falls by reason of something of that sort, the whole contract comes to an end. I would like to know what the Government think will happen if Treasury permission is not given There is an odd proviso which seems to mean that if the parties appear to have intended deliberately to flout and break the law. the contract becomes legal. It says:
    "Provided that this subsection shall not apply"—
    That is to say, that the terms shall not be performed—
    "in so far as it is shown to be inconsistent with the intention of the parties that it should apply, whether by reason of their having contemplated the performance of that term in despite of the provisions of this Act or for any other reason."
    That appears to mean by reason of their having contemplated doing something which is illegal. It might mean that—I hope it does not—but if the Solicitor-General could give us a succinct explanation of what the Subsection means and its purpose, I should be much relieved. I hate to think that we are making a contract valid, where the parties intended to disregard the law, but making it invalid where they intended to obey the law It seems topsy-turvy
    The Solicitor-General: The object of this Clause is to facilitate traders, and it works in this way: Supposing two traders enter into a contract which involves payment of money for which Treasury permission would be required, it might be contended—although I think it would be wrong, and I will say why in a moment—that apart from this Clause that contract was invalid,

    821
    because they had contracted that something should be done for which permission was necessary without providing that that permission should be obtained. If there were no such Clause as this, it might be said that any two traders entering into an agreement which required payment of money would be entering into an unenforceable agreement, because it would be illegal. I think that would be wrong. I think the right hon. and learned Gentleman the Member for Hillhead (Mr. Reid) was right, and if so, this Clause simply declares the law. It makes it possible for traders to enter into contracts or, if that is not necessary, it declares the law to be as it is at present.
    Supposing two traders enter into a contract, and they say nothing with regard to the necessity for obtaining permission, it is to be an implied term of the contract that permission shall be obtained, and the contract shall be valid. The traders who want to enter into a contract are not required to go to the Treasury to ask whether they will get permission; it is implied in the contract, and the contract is only binding on the assumption that permission is obtained. Therefore, it is possible for traders to go ahead in the ordinary course of business and make contracts.
    Mr. Reid: Line 15 of the Clause says:
    "… that terra shall not be performed."
    No contract shall be performed. What happens to the other terms of the contract in that event? If permission is refused, that particular term is not to be performed. One would think that the Subsection meant that all other terms are to be performed, but I am not sure.
    The Solicitor-General: That would be dependent on the contract. It would be a question of whether the non-performance of the contract was foundational to the contract, so dissolving it entirely. If it was not foundational, the other terms would stand. Perhaps I may put the objects of the Clause in a different form. Two traders want to enter into a contract which involves payment of money. They do not know, when they enter into the contract, whether permission will be given by the Treasury, when the time comes, for the payment of the money. If this Clause is not inserted in the Bill, they are in this position. They say to themselves, "Supposing we enter into a contract
    822
    which involves the payment of money for which permission will not be given it might be said that the contract is invalid, because it is a contract which is against the law"—that is, to make payment of money for which permission will not be given. If they were left in that position they would be in a difficulty because, under the contract, they would have to go along to the Treasury and get permission to make payment for which the contract will provide. That would mean delay to such an extent that it would be impossible to carry out normal business.
    The Clause says that, in any contract of that sort, they can enter into it freely, and it shall be an implied term that the payment of the money is not to be made unless Treasury permission is given. They can go ahead with their contract without making inquiry about whether the Treasury permission will first be given. It is a lawful contract. Otherwise, it might be said that it would not be lawful to enter into a contract of that sort. This Clause is designed to assist traders, and remove what might otherwise be an intolerable obstacle to the carrying out of trade. The right hon. and learned Gentleman thought I was wrong when I said that traders could not do what I have said they could do without the Clause. I think he is right. If there were no such Clause, it would be said that in the case of an ordinary commercial contract, even if the parties used no words dealing with it, it was implied that they did not undertake to do something which would not be subsequently permitted by the Treasury
    6.30 p.m.
    If that is so, all the Clause does is to declare the law and put beyond doubt what might have been in some doubt. Either it declares the law or, if it does not declare the law, it removes what is an obstacle in the way of the ordinary trader. The right hon. and learned Gentleman said that the proviso brings about a result not intended because it seems to make valid contracts for the performance of something which is forbidden I do not think that is the result of the proviso. The contrary is the result. What the proviso says is that this relief to traders shall not be available if they have entered into a contract which, upon the face of it, makes it clear that they intended to flout the requirement that Treasury permission should be obtained. If it is clear that

    823
    they do not care one way or the other, and that they mean to go ahead without obtaining Treasury permission, then the assistance which this Clause would otherwise make available to them, shall not be available. There, it has the contrary effect to what the right hon. and learned Gentleman indicated. If they send in the contract in terms which make it perfectly clear that they do not intend to bother about Treasury permission, then that contract will be invalid and illegal. That is what the proviso is designed to do, and I think that if the right hon. and learned Gentleman looks at it a little more carefully, he will see that it does so. The Clause is indispensable for carrying on normal trade. If everyone had to go to the Treasury before entering into a commercial contract, and obtain consent or permission, trade would come to a standstill. It is in order to remove that delay that this Clause is inserted in the Bill, and I ask the Committee to say that it is an absolutely necessary Clause.
    Mr. J. Foster: Would the learned Solicitor-General mind telling the Committee, if he thinks that there should not be a Regulation similar to Regulation 9B, which makes it illegal for any person to agree to do, at any future time, any act which at the time of the agreement is unlawful by virtue of any provision of the Regulations? I am not sure that there is any such provision in this Bill. At the moment, his argument, as I understand it, is that the proviso will remove that exemption or statement of law in favour of the trader, and will, presumably, leave the contract to be decided on by the ordinary rules as to illegal contracts. I understand that under the Statutory Rules and Order, 1942, the ordinary law was not too clear about that, and, therefore, a special provision was inserted saying that if any two people agreed to do something forbidden by the intended regulation, it should be wrong. I should have thought that some such provision was necessary in order to supplement what the learned Solicitor-General has just said. Having removed this statement of the law in favour of these two traders, what should be the next step? It may be contemplated to deal with this by Regulation, or it may be that it is provided for in some part of the Bill which I have overlooked. Perhaps the Solicitor-General will help me on that point?
    Mr. Turner-Samuels: Looking at this Subsection, I think it is perfectly clear. What it says is that no contract that has a particular term in it which requires the permission or consent of the Treasury before it can be carried out is to be carried out until that permission or consent is given. If that is right all that it amounts to is this: It merely goes as far as a particular term or terms involved in the consent required. It goes no further. It leaves the rest of the contract intact and there is no prohibition of any sort or kind on carrying out any one of the other terms. It is perfectly clear on that. It still leaves the term or terms in respect of which consent or permission is required subject to that condition, but even that is saved by the proviso. And the machinery of the proviso does this: It says that although there may be a term or terms which require the consent or permission of the Treasury, if in fact it can be shown, either from the terms of the contract or otherwise, that that requirement is inconsistent with the intention of the parties then that permission or consent is not to apply; it is not to be taken into account. The contract is left to be carried out not only as regards the terms which are not subjected to the need for permission or consent but also as to the terms that are. The contract as a whole is left to be performed in the way in which it was originally constituted. To my mind the terms of the Subsection and the proviso to it clearly stipulate that. There is no obscurity or difficulty in the language of the Clause, such as is suggested by the right hon. and learned Gentleman.
    The Solicitor-General: I am much obliged to the hon. and learned Member for Gloucester (Mr. Turner-Samuels) for his argument, which stops up some of the gaps in mine. In answer to the question asked by the hon. Member for Northwich (Mr. Foster), I do not think that the additional proviso which he suggested is necessary, because the other terms of the Measure are permanent. That is to say, the other terms require in perpetuity, in particular cases, that permission shall be granted for the performance of certain acts, and if such permission is not granted, it is perfectly clear that implementation of those terms in the contract, pro tanto is unlawful, and the Schedules provide for penalties in relation to doing an act without obtaining the necessary

    825
    permission. The reason why Regulation 9B was inserted in the Defence Regulations was that those regulations were only temporary, and might expire. For that reason Regulation 9B does provide, as the hon. Gentleman read out, that an agreement to do an act at a future time, which is unlawful at the time of the agreement but which may subsequently become lawful, shall be unenforceable. That necessity does not arise in the case of a permanent Measure such as this.
    Mr. J. S. C. Reid: I do not think that anyone can take exception to the reasons and the purposes given by the learned Solicitor-General. The only point between us is whether they are carried out in the words used. The purposes are so straightforward that I cannot believe that the draftsmen, if they had a few moments to think, could not make a better job of it than this. I fully realise that the draftsmen are so pressed just now that they cannot find simple phraseology—because it takes too long—but I hope that the hon. and learned Gentleman will have this examined again before the Report stage. If the first part is only for the removal of doubt, might it not be well to say so, because the ordinary reader will think that it is trying to introduce some new principle of law. In the hope that the matter may be remedied before the Report stage, I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Clause ordered to stand part of the Bill.
    Clause 34 ordered to stand part of the Bill.

    CLAUSE 35.—(Application to Crown.)
    Colonel Crosthwaite-Eyre: I beg to move, in page 24, line 28, to leave out Subsection (2)
    I move this Amendment for the purpose of trying to discover the exact purpose of this Subsection. It seems that it is the intention to make all provisions in this Bill binding upon the Dominions, and all regulations or orders that are made under the Bill can be applied to the Dominions without reference to the Dominion Governments concerned. Only a short time ago we heard the Chancellor announce the most sweeping relaxations, on Clause 31, as far as the Dominions are concerned. That increases my hesitation
    826
    in moving this Amendment, because I feel that the interpretation I have placed on it cannot be the correct one. However, on the face of this provision, it appears that the Government intend to go completely against the provisions of the Statute of Westminster, and to make obligatory on the Dominions something passed by the House. Therefore I should be very grateful if the Solicitor-General would tell us what is intended by Subsection (2).
    The Solicitor-General: This provision does not infringe the provisions of the Statute of Westminster. The relevant Section of the Statute would be Section 4, which prevents the Imperial Parliament from enacting legislation which affects the Dominions in the Dominions. The object of this Clause, in so far as concerns the reference to the Dominions and Government departments, is that those representatives of the Dominions who are physically in the United Kingdom should, while they are in the United Kingdom, comply with the obligations imposed by this Bill when it becomes an Act. In so doing, there is nothing that would in any way infringe the Statute of Westminster or offend against the sovereignty of the Dominions. For example, if the Crown Agent of a Colony here wanted to buy American goods and to acquire American currency for that purpose, he would have to obrain the currency in this country from an authorised dealer.
    Mr. Stanley: Such a person would not be a person acting on behalf of any of His Majesty's Governments outside the United Kingdom.
    The Solicitor-General: I mentioned the Crown Agent of a Colony as an example.
    Mr. Stanley: He would not come under Subsection (2).
    The Solicitor-General: I was saying that the Clause in this respect has no application except in relation to a person who is physically here.
    Mr. Stanley: What, then, is the meaning of the word "Department" in Subsection (2)?
    The Solicitor-General: If the right hon. Gentleman will look at other Clauses, he will find that this provision imposes obligations only upon persons resident in, or physically in, the United Kingdom. It will apply to representatives of the

    827
    Dominions, as to representatives of the Colonies, who are physically in the United Kingdom, and it will not in any way bind the Dominions in Dominion territory itself.
    Colonel Crosthwaite-Eyre: I do not pretend to be a lawyer, but can the Solicitor-General tell me how he construes Subsection (2) as having that meaning, because, as I read it, it applies to any person or department acting on behalf of any of His Majesty's Governments outside the United Kingdom? From where does the Solicitor-General get the statement that it applies only to people who are resident in the United Kingdom?
    The Solicitor-General: There is no Clause in the Bill which imposes obligations except upon persons either resident in, or physically in, the United Kingdom at the time. If the hon. and gallant Gentleman will look at various Clauses, he will see that they impose various obligations, but the obligations they impose are either upon persons resident in the United Kingdom; or, if they are not resident in the United Kingdom, on people who are, in fact, physically here at the moment. The result of this, read together with Clause 35, is simply that representatives of Dominions Governments who are physically here at the time when the obligation comes into question, are bound by the Bill, and nobody else is bound, because the Dominions Governments themselves are in the Dominions. That is why the Clause operates only to bind representatives of the Dominions in this country.
    6.45 p.m.
    Mr. Birch: If the hon. and learned Gentleman will look at Clause 42 (5), he will see the following provision:
    "The obligations and prohibitions imposed by this Act shall, subject to the express limitations contained therein, apply to all persons, notwithstanding that they are not in the United Kingdom and are not British subjects."
    That appears to apply to the whole Bill, and slightly goes against the Solicitor-General's contention that this Bill applies only to British subjects or persons in the United Kingdom.
    The Solicitor-General: Clause 42 (5) uses the words:
    "subject to the express limitations contained therein."
    828
    The express limitations throughout the Bill, in various Clauses, have reference to those persons who are in the United Kingdom physically, whether they are British subjects, or whether they belong to any other nationality, or, in the alternative, if they are not in the United Kingdom physically at the time, they must be resident in the United Kingdom. Therefore, if the hon. Gentleman will take Clause 5, for instance, the provisions of the Bill are imposed only upon such persons, and inasmuch as representatives of the Dominions Governments can only be either resident here or physically here, and therefore, can be bound only in that way, it is only they who are affected, and no Dominion Government can be affected.
    Mr. Stanley: If, as the Solicitor-General says, it is true that nowhere in the Bill is there any obligation or prohibition imposed except upon somebody who is resident in this country, what is the purpose of Clause 42 (5), to which my hon. Friend has just referred? What is the good of saying:
    "The obligations and prohibitions imposed by this Act shall, subject to the express limitations contained therein, apply to all persons"
    when, in fact, we are now told the limitations are such that they cannot in any circumstances apply to anybody who is not resident in the United Kingdom? Either the Solicitor-General is mistaken, which I should hesitate to suggest, or Clause 42 (5) is sheer nonsense.
    Mr. H. Strauss: There is one additional point apart from that raised by my right hon. Friend the Member for West Bristol (Mr. Stanley), and it concerns Clause 41 (2). There the Solicitor-General will see that, in addition to the very important question put by my right hon. Friend, there is power to declare that anybody, although outside the United Kingdom, can be treated as resident within the United Kingdom, or, if within the United Kingdom, can be treated as resident without. I thought that possibly, in dealing with my right hon. Friend's question, the Solicitor-General might say how his argument is affected by that subsection.
    The Solicitor-General: With regard to Clause 42 (5), all that that provision says is that, once you have got persons who are within the ambit of the Measure, it is

    829
    subject to the express limitations contained therein. It applies only to such persons who, by other Clauses, are brought within the ambit of the Bill, and it says, with regard to them, that notwithstanding the mere fact that they are not British subjects, or that they are not physically within the United Kingdom by reference to the time by which the question arises, the obligation rests on them. It says no more than that. Therefore, one has to look elsewhere for the obligations themselves, and those obligations are imposed upon the two classes of persons, those who are in the United Kingdom, or resident in the United Kingdom. Nobody else is effected.
    Mr. Stanley: Then the meaning which the Solicitor-General has attributed to Clause 42 (5) is the exact contrary to the words which he used. The words which he used were "Everybody should be subject to it under the express limitations in the Bill," but they shall not be subject to it.
    The Solicitor-General: No. I have already put the point but I had better do it again. When we are construing Subsection (5) as to what are the limitations it contains we find that two are indicated. The Bill imposes obligations upon persons who are in or are resident in the United Kingdom. Once an individual concerned falls within one of these two classes, the mere fact that he is not a British subject or the mere fact that he is not resident in the United Kingdom, or that he is not physically in the United Kingdom at the time when the question arises shall not prevent the obligation resting upon him. That is all Subsection (5) says. We have first to get a person who is either in or resident in the United Kingdom. When we get a person who is resident in the United Kingdom the mere fact that he is not physically in the United Kingdom does not relieve him of complying with the obligation which the Bill imposes upon him. I hope that is clear.
    Mr. Stanley: I do not think it is.
    The Solicitor-General: I am sure it is my fault. I will start again and endeavour to make out what Subsection (5) does. If we look at the Clause we find what are the limitations contained therein. We find, to put it broadly, that there are two limitations and the Clause applies to
    830
    either. They are persons who are in or persons who are resident in the United Kingdom. It is no excuse on the part of a person who is in the United Kingdom but is not a British subject, for him to try to get out of the obligation by saying he is a foreigner. Equally so, a person resident in the United Kingdom cannot say, "Admittedly I am resident in the United Kingdom, but at the moment when you sought to impose the obligation on me, I was outside the United Kingdom." The Bill applies to that person. I hope I have explained the position to the satisfaction of the right hon. Gentleman.
    Mr. Stanley: I entirely understand now what the hon. and learned Gentleman desires the Subsection to mean, but I do not see how the words used in the Clause can possibly mean that.
    The Solicitor-General: It is my submission that the meaning I have attributed to it is the correct meaning. Once a person is subject to the express limitations contained therein—and I hope the Committee will accept that that is right—we go back to the submission of the hon. and gallant Member for the New Forest and Christchurch (Colonel Crosthwaite-Eyre). I think then that the conclusion emerges perfectly clearly that it does not apply to Dominion Governments as Dominion Governments in the territories of the Dominions, It simply applies to representatives of those Dominions who fulfil the qualification of residence in or who are physically in the United Kingdom at the time by reference to which the obligation arises. Therefore, the Bill does not in any way infringe the provision of Section 4 of the Statute of Westminster.
    Mr. H. Strauss: What about Clause 41 (2)?
    Mr. I. J. Pitman: The main issue raised by the Solicitor-General is the question of the physical presence of the agent of the Dominion Government here in England. If he will turn to Clause 5, I think he will see that the words used are "No person shall." It does not say resident in the United Kingdom, and the point made by the hon. and gallant Member for the New Forest and Christ-church (Colonel Crosthwaite-Eyre) is more or less this. Let us suppose that the Australian Federal Government have

    831
    an account in the Bank of England, and under Clause 5 (a) they instruct the Governor of the Bank of England to pay a certain sum to the account of the United States in Washington. It seems to me perfectly clear that that is invalidated by this provision, and I should like to ask whether that is not a case in which the physical presence has nothing to do with it, and in which in point of fact, this violates the rights of the Dominion Governments under the Statute of Westminster in the Section which has been mentioned.
    The Solicitor-General: In Clause 5 we see what the limitation is. It is that
    "no person shall do any of the following things in the United Kingdom."
    That is to say that payment made in the United Kingdom would require permission. An agent of the Australian Government in the United Kingdom who has to make a payment in the United Kingdom would be restrained from doing it unless he had the requisite permission, and there is nothing in the Statute of Westminster which prevents that obligation being placed upon him. The broad effect of Section 4 of the Statute of Westminster is that the Parliament of Great Britain cannot legislate for the territories of the Dominions, and that is not in conflict with what I have just said.
    Mr. J. Foster: I am not quite sure of this. Assuming the Australian Government arranged the transaction in Australia by which a payment was to be made in the United Kingdom, would it not be contrary to Clause 5? Let us assume they decided in Australia to make a payment to America. They would ask us through their agents in London to transfer block sterling to America. They cannot do that because of Clause 5. The transaction is in Australia and they are persons under Clause 5 combined with Clause 35 who are persons outside the scheduled territories and are not resident in the United Kingdom, who are asking for this request to be made. Clause 35 says that the Bill shall apply "to transactions by a Government Department." The transaction I have mentioned is by a Government, Department. It is a transaction by a Government Department of one of His Majesty's Governments outside the United
    832
    Kingdom. It is made in Australia, but under Clause 5, which says:
    "No person shall do any of the following things."
    It is invalid, yet here is a person in Australia doing one of them. Therefore, it seems to me that the effect of these two Clauses together makes a transaction in Australia invalid. I see what the Solicitor-General aims at, and I sympathise with his object, but I am not sure, if we take these two Clauses together and take the transaction actually made outside the United Kingdom, whether it is not a fact that it offends against Clause 5. I understood it had an extra-territorial effect, but it does not say in this Bill if there is to be any extra-territorial effect at all.
    The Solicitor-General: It depends on what is meant by extra-territorial effect. A person who is resident here but is outside the United Kingdom is under an obligation under this Bill. In that instance it has an extra-territorial effect. Nothing in this Bill prevents the Australian Government giving any instruction to their agent, but it does prevent him complying with it in certain circumstances unless he has got the requisite permission. It is a question then of whether what is imposed on the agent has the same effect in invalidating transactions under Australian law. That is a question of Australian law, and this Bill does not in any way affect the provisions of Australian law. It is exactly the same case as if instructions were given from this country to an agent of the British Government in a foreign country who could not carry out those instructions. The question as to whether those instructions were valid would have to be determined by reference to the law of this country. The same would apply to instructions given in Australia. With great respect I maintain that the position is that this does not affect Australian law in the least. It cannot alter Australian law and, although it can produce certain results in England which may have an effect on contracts negotiated in Australia, the effects have to be decided by Australian law and are not in any way affected by the law of this country.
    7.0 p.m.
    Mr. J. Foster: Of course, that is the law, but Clause 35 (1) says:
    "This Act shall bind the Crown and shall apply to transactions by a Government Department. …"

    833
    It is quite true that under Australian law and the Statute of Westminster the Australian Government would reject the application of this Measure to their transactions, but we are looking at the matter not from the point of view of Australian law but from the point of view of what this Clause purports to do. It purports to make a transaction by a Government Department invalid under certain conditions We then have to see whether every Clause in the Bill is watertight so that in no case does it make such a transaction valid. My hon. Friend the Member for Bath (Mr. Pitman) has, I think, put his finger on a transaction which is made invalid when effected outside this country. The moment we have that, the Clause purports to make a transaction valid if effected outside this country, and if it is done by a Government Department of a Dominion. I quite agree with the Solicitor-General's general proposition, but I think the Clause runs counter to it.
    Amendment negatived.
    Clause ordered to stand part of the Bill.
    Clause 36 ordered to stand part of the Bill.

    CLAUSE 37.—(Other powers of Treasury.)
    Mr. Eccles: I beg to move, in page 25, line 14, to leave out paragraph (b).
    This is an Amendment to which the banks and the acceptance houses attach importance. As the Clause stands, any permission granted by the Treasury under this Measure may be revoked by the Treasury. That would make the giving of confirmed credits impossible because, as the Minister knows, the whole point of obtaining a confirmed credit is that it is not revocable, and if one of the conditions of a confirmed credit has to be a permit from the Treasury which can be taken away, he would undercut the normal practice of bankers. The suggestion of the bankers is either that this paragraph be removed altogether—which is the purport of my Amendment—or that the Treasury take power to grant irrevocable as well as revocable permits, and that in the case of permits needed to put through confirmed credits they should issue an irrevocable permit. That would make it possible to carry on with the normal practice of British bankers, and I would ask the Government to do one of those two things if they do not wish to interfere with the business of the City.
    Mr. Glenvil Hall: This Subsection provides that permits, consents, and authorities granted by the Treasury may be revoked and maybe made conditional or limited at the discretion of the Treasury. They may also, as the Clause states, be either general or particular. If line (b) of Subsection (1) were deleted this would lead to a very peculiar position. It would mean that no order made or permission given could, in fact, be revoked, and that would sometimes lead to a very serious situation. It is essential that these words should be retained. The credit to which the hon. Gentleman referred can be covered by an exemption order if that should be necessary, but it is essential that, when orders have been made, it should be possible for the Treasury to revoke them if that becomes necessary. When a permission has been given any action taken under such an order is not made illegal because it is, by due notice, later revoked. The situation envisaged by the hon. Gentleman can be met by the Treasury under orders that could be issued by virtue of this Clause. I think, therefore, that we should retain these words. In fact, we must do so, and I ask the Committee not to accept this Amendment.
    Mr. Stanley: I hope that the hon. Gentleman will consent to look at this again or, at any rate, to give us some further assurance. He will recollect that my hon. Friend the Member for Chippenham (Mr. Eccles) suggested two alternative methods by which this might be effected. The hon. Gentleman has dealt with only one; he has said that it is impossible to leave out this line altogether, and I think there is a certain weight in the argument he put forward. There might be cases where it would be desirable that permission should be revoked. The alternative put forward by my hon. Friend was that whereas under Clause 37, Subsection (1, b), it must be possible to revoke all permissions of any kind, a special class should be created under this Clause which was irrevocable and which should be used for the particular circumstances to which my hon. Friend has referred. As far as I can make out from the hon. Gentleman's answer, he dealt with that by saying that the Treasury can make exceptions to Clause 37 (1, b), and that under the powers of Clause 31 they can say, "We can exempt this particular consent from the provision that it must be revocable." But is that really so? I should like to hear from the

    835
    learned Solicitor-General whether it is so, and if it is I think this might very likely meet the case Certainly, my interpretation of Clause 31 does not lead me to think that it would extend to counteracting the express provision of Clause 37 (1) that every permission, consent, or authority when granted may be revocable by the Treasury. I do not know whether we could have any further assurance on this point, but I am certain that in some way or other that particular case has to be dealt with.
    Mr. Glenvil Hall: We do realise that and we are quite willing to look at this again, but obviously if we took out the line as proposed that would rob the Treasury and their agents—the Bank of England and other banks who, from time to time, will be acting for them—of powers which must be retained in the Bill. Subject to that, however, we will, as I have said, look at the matter again and see what machinery can be evolved to meet the particular point made by the hon Gentleman.
    Mr. Eccles: I thank the hon. Gentleman for that assurance, in view of which I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Mr. J. Foster: I beg to move, in page 25, line 28, to leave out "or had notice."
    Hon. Members will see from the Clause that no person is to be liable to prosecution for an offence against the Clause merely by virtue of the giving of a direction, unless the direction was served upon him, or the person knew of the direction, or had knowledge of it. "Knowledge" is contrasted with having "notice." The purpose of the Amendment is to find out what is in the mind of the Treasury about the notice It is the basis of this provision that the person to whom the notice is given has either knowledge of it or notice. Where the notice is important, he has not had knowledge. It is usual, I submit, in Statutes which make a reference to notice as contrasted with knowledge, when fixing a person with notice of something of which he does not know, for this matter to be attended with great safeguards One either provides that notice shall be an advertisement in certain newspapers or, as in the Companies Acts, that
    836
    notice shall be deemed binding if it is served at the registered office of the company or, in the case of foreign companies, at the address which the company has given to the Registrar for notices to be sent. In other statutes, notice is deemed to be binding on a person if it has been sent by pre-paid post to his last known address.
    I do not see anything in the Bill to provide any of those safeguards. This may be a matter in which the Solicitor-General will say that he will look at it; but to leave "notice" to be construed by the courts or interpreted by the Treasury might open the way to great uncertainty. Suppose a man to be staying in hotels, had moved from a hotel, and notice had been sent to him at the hotel he had just left. I do not want to ring the changes on the times at which notice might be given, but there are a hundred ways. I suggest that the way in which this part of the Clause is worded does not fix the man who does not know with having had notice. The phraseology is too wide and should be restricted in one of the ways I have suggested.
    7.15 p.m.
    The Solicitor-General: The object of introducing the words "or had notice" is to get within the ambit of the Clause a person who deliberately refrains from seeing something which is right under his nose. I am sure the Committee will agree that this is necessary. Whether the words are the most appropriate that can be used is open to argument, and we will look at the words again. We desire to rope in persons such as I have described who, when something is openly brought to their notice in the shape of a direction, so to speak turn the other way. Those are the people we want to bring in. We shall see whether the matter can be better safeguarded. Perhaps the hon. Member will therefore withdraw his Amendment.
    Mr. J. S. C. Reid: Before the Amendment is withdrawn I would ask the Solicitor-General to take this matter very seriously. As I read the matter, notice can be of two kinds. It can be something put in front of a man's eye, when he turns away, or something much more general, such as an advertisement in "The Times," or an ordinary advertisement in a trade journal. That might easily be said to be notice. It is unfair, however, to prosecute a man because he

    837
    did not happen to read a particular advertisement page in a journal. When the Solicitor-General applies his mind to this matter I hope that he will leave out that kind of case altogether. The man who has had something brought personally in front of his notice and who has turned away, would be caught, I think, by the word "know." We infer knowledge by the circumstances in which the ordinary man would know. We can never know whether a particular thing got into a particular man's head, but we do know that it would have got into the head of the ordinary man in the same circumstances. I hope that the Solicitor-General will bear these considerations in mind.
    Mr. J. Foster: In view of what the Solicitor-General has said, I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Mr. H. Strauss: I beg to move, in page 25, line 34, to leave out from "any", to "and", in line 35, and to insert:
    "authorised dealers or authorised depositaries."
    I do not dispute that there may be proper delegations by the Treasury to persons other than authorised dealers or authorised depositaries of powers in the Bill, but, from the working of the existing regulations, I am certain that the Treasury know to whom they wish to delegate those powers. What I question is the propriety of putting in words so general as to give the Government power, if they choose, to make the most improper delegations. I do not suspect the Government of any such sinister intentions, and I do not believe that they propose to make any improper delegations of duty or powers under the Clause; but the fact that they do not intend to do so is all the more reason for not inserting powers which would enable them, if they chose, to make the most improper delegations.
    I would suggest that the Government use the words the "authorised dealers or authorised depositaries." If the Solicitor-General tells me that there are others, even under existing regulations, to whom the Government wish to delegate powers, the list can be extended, if necessary. What should not be done is to put in general terms which would enable the Government, if they chose, to delegate all power of control to the Fabian Society or
    838
    to the T.U.C., or to any other such body. I am deliberately giving a fantastic example in order to bring home to the Government what can be done. I do not believe that the Government wish that sort of thing to be done, but I suggest that in the circumstances they should either accept the words I have proposed or should disclose their intentions.
    Mr. Glenvil Hall: We cannot accept the Amendment, which would narrow the wording far too much. I think the hon. and learned Gentleman will see that the Clause is very reasonable. We must have something in here. If we were to put in the words he suggests we should narrow the meaning down to those words. We shall want upon occasions to go outside the ranks of authorised dealers and authorised depositaries. It may very well be, as my right hon. Friend the Chancellor of the Exchequer said in the course of his remarks earlier, we might even desire to use members of the Stock Exchange.
    Mr. Stanley: That is, authorised dealers?
    Mr. Glenvil Hall: Possibly, but they might not be so described. We shall also frequently have to use Customs and Excise officials, immigration officers and others. To limit the words to authorised dealers and authorised depositaries makes the provision far too narrow, and we cannot possibly accept the Amendment. I can assure the hon. and learned Gentleman that we shall not use the wide powers that are here proposed indiscriminately. We shall use these powers with discretion, to assist individuals as well as the Government and Government officials in carrying out their duties.
    Lieut.-Commander Braithwaite: The Committee will not have found the observations of the Financial Secretary particularly convincing or consider that they give us any justifiable reason for withdrawing the Amendment. If that was all the Financial Secretary could say, he would have been wise to leave this matter to the Solicitor-General, who has a soothing manner and generally meets us, instead of confronting us with a direct negative. The assurances the Financial Secretary has given us are of no value. Over and over again since this Government came into office, we have tried to emphasise that what will matter in the years to come will not be what the

    839
    Financial Secretary might have said but what is in the Bill. That is an old-fashioned preference we have on this side of the Committee but it is none the less a fact that the words written into the Bill are the ones which will count. What has happened is that the Government have lifted for their purposes procedure which exists under the Defence Regulations. This is the sort of procedure that was used during the war when it was convenient to have all sorts of persons authorised to act. That was convenient for the purposes of economic warfare and the sort of things in which we found ourselves involved, but the Government say that they are now engaged in hammering out some permanent legislation and we must, therefore, be more careful what we put into it. The Financial Secretary said that we may want to use other people—stockbrokers, he was kind enough to mention. That is a rather shocking suggestion to come from the other side. However, we have an Amendment to one of the Schedules in which we hope to include such persons as authorised dealers or depositaries. The Financial Secretary can get the best of both worlds. He can say, "I will accept the Amendment. I can bring my beloved stockbrokers into the ambit of it. All I have to do is to include that in the Schedule and everybody will be happy."
    How much better if the Financial Secretary had used congenial language of that kind, which unites both sides of the Committee, instead of confronting us with that blunt negative. I am particularly grieved that after a day which appears to have gone so congenially, a day when there is a smile on the face of the Patronage Secretary, who has not even suggested that the Question be now put, and a day when the Solicitor-General has, time and again, met us with such fairness and courtesy, the Financial Secretary should be the first to strike a jarring note. It is a grievous incident, and I hope that the Financial Secretary will yet think better of it. He has a reputation for pacific compromise and conciliation. How shocking it would be for the Chancellor of the Exchequer, who is probably now snatching a frugal meal before returning to the scene, if the Division bells should ring because the Opposition have to register a protest against the harsh manner in which this Amendment has been received.
    Mr. J. S. C. Reid: I can assure the Financial Secretary that we cannot allow this to remain where it is. Time and again we have heard from the Government side throughout these proceedings that it is true that this is a most stringent Bill but that the discretion of the Treasury in working it out fairly can be relied upon. Perhaps we can rely on that discretion, but what do we find here? The Treasury may delegate all these most stringent powers to other people who may not have that discretion. It is one thing for us to be asked to accept extremely stringent provisions knowing that every point of difficulty will be considered by a responsible civil servant, if not by the Minister, and one at least who is well accustomed to dealing with these matters, but suppose it is left to some body outside the Treasury which is of a much lower status and much less knowledge. With the best will in the world one cannot rely on such people having the same good discretion as one finds in the Treasury. The Financial Secretary cannot have it both ways. If he wants extensive power to delegate, he must reduce the stringency of a great number of these provisions, but if he wants to maintain the stringency of the provisions, we must be certain that the discretionary power will be exercised by someone we know about and in whom we have confidence. I must, therefore, advise my hon. Friends to press this matter, unless the Financial Secretary is prepared to take it back and look at it again in an attempt to produce some much less wide form than we have here.
    Mr. J. Foster: I only want to reinforce what my right hon. and learned Friend the Member for Hillhead (Mr. J. S. C. Reid) has said by asking the Financial Secretary to look at Clause 4.0 to see what kind of power he is taking power to delegate to any Tom, Dick or Harry. Under Clause 40 anyone who leaves the country for a day can have all his securities and his property blocked in any manner that the Treasury sees fit, and that power can be delegated to anybody. That is potentially a very serious matter. The Financial Secretary will say that the Treasury do not intend to do that, but we get a most unfortunate result if we add Clause 40 to the powers of delegation in this Clause. In this Clause the power to give authority to apply for a search warrant has been excluded, but

    841
    the powers under Clause 40 could be more serious for a person than a search warrant. A person who lives in this country, whether he is resident or not, may find that money standing to his credit, or securities, can be subject to any restrictions which the Treasury sees fit. I support the pleas that have been made to the Financial Secretary to consider whether some limiting words should not be put into those Clauses which give very extensive powers, or whether some words should not be put into this Clause to limit the powers of delegation.
    Mr. H. Strauss: I am surprised at the line the Financial Secretary has taken. The first example he gave of a person to whom he might want to delegate would have come under the words I myself have used. Another example he gave was delegation to another Government Department. I confess it had not occurred to me that it was necessary to put that in expressly, but if it is necessary, I am sure my hon. Friends and I would not mind adding "other Government Departments" to the words I have suggested.

    Division No. 30.]

    AYES

    [7.31 p.m.

    Adams, Richard (Balham)

    Chetwynd, G. R.

    Fraser, T. (Hamilton)

    Allen, A. C. (Bosworth)

    Clitherow, Dr. R.

    Ganley, Mrs. C. S.

    Allen, Scholefield (Crowe)

    Cluse, W. S.

    Gibson, C. W.

    Alpass, J. H.

    Cobb, F. A.

    Glanville, J. E. (Conett)

    Anderson, F. (Whitehaven)

    Cocks, F. S

    Gooch, E. G.

    Attewell, H. C.

    Collick, P.

    Goodrich, H. E.

    Austin, H. L

    Colman, Miss G. M.

    Gordon-Walker, P. C.

    Awbery, S. S.

    Comyns, Dr. L.

    Greenwood, A. W. J. (Heywood)

    Ayles, W. H.

    Cooper, Wing-Comdr. G.

    Grenfell, D. R.

    Ayrton Gould, Mrs. B

    Corbet, Mrs. F. K. (Camb'well N. W.)

    Grey, C. F.

    Bacon, Miss A.

    Corlett, Dr. J

    Grierson E.

    Baird, J.

    Cove, W. G.

    Griffiths, D. (Rother Valley)

    Balfour, A

    Crawley, A.

    Gunter, R. J.

    Barnes, Rt. Hon. A. J

    Crossman, R. H. S

    Haire, John E (Wycombe)

    Barstow, P. G

    Daggar, G.

    Hale, Leslie

    Barton, C.

    Daines, P

    Hall, W. G.

    Battley, J. R.

    Dalton, Rt. Hon. H.

    Hamilton, Lieut-Col. R

    Bechervaise, A. E.

    Davies, Clement (Montgomery)

    Hannan, W. (Maryhill)

    Belcher, J. W.

    Davies, Edward (Burslem)

    Hardy, E. A.

    Bellenger, Rt. Hon. F. J.

    Davies, Ernest (Enfield)

    Harrison, J.

    Benson, G.

    Davies, Harold (Leek)

    Hastings, Dr. Somerville

    Berry, H.

    Davies, R. J. (Westhoughton)

    Henderson, A. (Kingswinford)

    Bing, G. H. C.

    Davies, S. O. (Merthyr)

    Henderson, Joseph (Ardwick)

    Binns, J.

    Deer, G.

    Hobson, C. R.

    Blackburn, A. R

    Diamond, J

    Holman, P.

    Blenkinsop, A.

    Dobbie, W.

    Holmes, H. E. (Hemsworth)

    Blyton, W. R.

    Dodds, N. N

    Horabin, T. L.

    Boardman, H.

    Donovan, T.

    House, G.

    Bowden, Flg.-Offr. H. W.

    Driberg, T. E. N.

    Hoy, J.

    Bowen, R.

    Dugdale, J. (W. Bromwich)

    Hudson, J. H. (Ealing, W.)

    Bowles, F. G. (Nuneaton)

    Dye, S.

    Hughes, Hector (Aberdeen, N.)

    Braddock, T. (Mitcham)

    Ede, Rt. Hon. J. C

    Hughes, H. D. (W'lverh'pton, W.)

    Bramall, Major E. A.

    Edwards, A. (Middlesbrough, E.)

    Hutchinson, H. L. (Rusholme)

    Brook, D. (Halifax)

    Edwards, John (Blackburn)

    Hynd, H. (Hackney, C.)

    Brown, T. J (Ince)

    Edwards, N. (Caerphilly)

    Irving, W. J.

    Bruce, Maj. D. W. T.

    Edwards, W. J. (Whitechapel)

    Isaacs, Rt. Hon. G. A

    Burke, W. A.

    Evans, E. (Lowestoft)

    Jay. D. P. T

    Byers, Frank

    Evans, S N. (Wednesbury)

    Jeger, G. (Winchester)

    Callaghan, James

    Ewart, R.

    Jones, D. T. (Hartlepools)

    Castle, Mrs. B. A.

    Farthing, W. J.

    Jones, J H. (Bolton)

    Chamberlain, R. A

    Fletcher, E. G. M. (Islington, E.)

    Jones, P Asterley (Hitchin)

    Champion, A. J.

    Follick, M.

    Keenan, W.

    Chater, D.

    Foot, M. M

    Kenyon, C

    In the absence of that, for the reasons given by my right hon. and learned Friend the Member for Hillhead (Mr. J. S. C. Reid), we must divide. There is a sound test here for the Government if they are democrats. Let them assume that this Bill is being worked by a Government in office whom they detest—
    The Temporary Chairman (Colonel Sir Charles MacAndrew): The hon. and learned Gentleman is getting rather wide of his Amendment.
    Mr. H. Strauss: I am sorry, Sir Charles. I will not pursue that. Whether these words are too wide or not can be established easily by that test. If the Financial Secretary rejects this Amendment, it is well that the Committee and the public should know that it will be entirely lawful for the Treasury under this Bill to delegate all their powers to the T.U.C.
    Question put, "That the words proposed to be left out stand part of the Clause."
    The Committee divided: Ayes, 273; Noes, 83.

    Key, C. W.

    Paling, Rt. Hon. Wilfred (Wentworth)

    Strauss, G. R (Lambeth, N.)

    Kinley, J.

    Pargiter, G. A.

    Stubbs, A. E.

    Kirby B. V.

    Parker, J.

    Summerskill, Dr. Edith

    Land, G.

    Parkin, B. T.

    Symonds, A. L.

    Lavers, S.

    Paton, Mrs. F. (Rushcliffe)

    Taylor, H. B. (Mansfield)

    Leslie, J. R.

    Paton, J. (Norwich)

    Taylor, R. J. (Morpeth)

    Levy, B. W.

    Pearson, A.

    Taylor, Dr. S. (Barnet)

    Lewis A. W. J. (Upton)

    Peart, Capt T F

    Thomas, John R. (Dover)

    Lewis, J (Bolton)

    Perrins, W.

    Thomas, George (Cardiff)

    Lindgren, G. S.

    Poole, Major Cecil (Lichfield)

    Thomson, Rt. Hn. G. R. (Ed'bgh, E.)

    Lipson, D. L.

    Popplewell, E.

    Thorneycroft, Harry (Clayton)

    Lipton, Lt. Col. M

    Porter, E. (Warrington)

    Thurtle, E.

    Longden, F.

    Porter, G. (Leeds)

    Tiffany, S.

    Lyne, A. W.

    Proctor, W. T.

    Tolley, L.

    McAdam, W.

    Randall, H. E.

    Turner-Samuels, M.

    McEntee, V. La T.

    Ranger, J.

    Ungoed-Thomas, L.

    McGhee, H. G.

    Rankin, J.

    Usborne, Henry

    Mack, J. D.

    Rees-Williams, D. R.

    Viant, S. P

    McKay, J. (Wallsend)

    Reeves, J.

    Wadsworth, G.

    Mackay, R. W. G. (Hull, N.W.)

    Reid, T. (Swindon)

    Walkden, E.

    McLeavy, F.

    Rhodes, H.

    Walker, G. H.

    MacMillan, M. K. (Western Isles)

    Robens, A.

    Wallace, G. D. (Chislehurst)

    Macpherson T. (Romford)

    Roberts, Emrys (Merioneth)

    Wallace, H. W. (Walthamstow, E.)

    Mainwaring, W. H.

    Roberts, Goronwy (Caernarvonshire)

    Warbey, W. N.

    Mallalieu J. P. W.

    Roberts, W. (Cumberland, N.)

    Webb, M. (Bradford, C.)

    Manning, Mrs. L. (Epping)

    Robertson, J. J. (Berwick)

    Weitzman, D.

    Marquand, H. A.

    Rogers, G. H. R.

    Wells, W. T (Walsall)

    Mathers, G.

    Royle, C.

    West, D. G.

    Mayhew, C. P.

    Sargood, R.

    White, C F. (Derbyshire, W.)

    Medland, H. M.

    Scollan, T.

    White, H. (Derbyshire, N. E.)

    Mellish, R. J.

    Scott-Elliot, W.

    Whiteley, Rt. Hon. W

    Messer, F.

    Shackleton, Wing-Cdr. E A. A.

    Wigg, Col. G. E.

    Middleton, Mrs. L.

    Sharp, Granville

    Wilkes, L.

    Mitchison, Maj. G. R.

    Shurmer, P.

    Wilkins, W. A.

    Monslow, W.

    Siiverman, J. (Erdington)

    Willey, O. G. (Cleveland)

    Moody, A. S.

    Silverman, S. S. (Nelson)

    Williams, D J. (Neath)

    Morgan, Dr. H. B.

    Simmons, C. J.

    Williams, J. L. (Kelvingrove)

    Morris, P. (Swansea, W.)

    Skeffington, A. M.

    Williams, W. R. (Heston)

    Morrison, Rt. Hon. H. (Lewisham, E)

    Smith, H. N. (Nottingham, S.)

    Willis, E.

    Mort, D. L.

    Smith, S. H. (Hull, S.W.)

    Wilmot, Rt. Hon. J

    Moyle, A.

    Snow, Capt. J. W.

    Wise, Major F. J.

    Naylor, T. E.

    Solley, L. J.

    Woods, G. S.

    Nichol, Mrs. M. E. (Bradford, N.)

    Sorensen, R. W.

    Wyatt, W.

    Noel-Baker, Capt. F. E. (Brentford)

    Soskice, Maj. Sir F.

    Yates, V. F.

    Noel-Buxton, Lady

    Sparks, J. A.

    Young, Sir R. (Newton)

    Oldfield, W. H.

    Stamford, W.

    Zilliacus, K.

    Oliver, G. H.

    Steele, T.

    Orbach, M.

    Stephen, C.

    TELLERS FOR THE AYES

    Paget, R. T.

    Strachey, J

    Mr. Collindridge and

    Mr. Coldrick.

    NOES

    Amory, D. Heathcoal

    Glyn, Sir R.

    Mott-Radclyffe, Maj. C. E.

    Assheton, Rt. Hon. R.

    Gomme-Duncan, Col. A. G

    Neven-Spence, Sir B.

    Astor, Hon. M.

    Grant, Lady

    Nield, B. (Chester)

    Baldwin, A. E.

    Gridley, Sir A.

    Peto, Brig C. H. M.

    Barlow, Sir J.

    Harvey, Air-Comdre. A. V.

    Pitman, I J.

    Beechman, N. A.

    Head, Brig A H

    Poole, O. B. S. (Oswestry)

    Birch, Nigel

    Hinchingbrooke, Viscount

    Prescott, Stanley

    Boles, Lt.-Col. D. C. (Wells)

    Hogg, Hon. Q.

    Ramsay, Maj. S.

    Boyd-Carpenter, J. A.

    Hollis, M. C.

    Reed, Sir S. (Aylesbury)

    Braithwaite, Lt.-Comdr. J. G.

    Holmes, Sir J. Stanley (Harwich)

    Reid, Rt. Hon J. S. C. (Hillhead)

    Buchan-Hepburn, P. G. T.

    Hudson, Rt. Hon. R. S. (Southport)

    Renton, D.

    Butcher, H. W.

    Keeling, E. H.

    Roberts, H. (Handsworth)

    Carson, E.

    Lambert, Hon. G.

    Sanderson, Sir F.

    Challen, C.

    Lancaster, Col. C. G.

    Shepherd, W. S. (Bucklow)

    Clifton-Brown, Lt.-Col. G

    Legge-Bourke, Maj. E. A. H.

    Spearman, A. C. M.

    Cooper-Key, E. M.

    Lennox-Boyd, A. T.

    Stanley, Rt. Hon. O.

    Corbett, Lieut.-Col. U. (Ludlow)

    Lindsay, M. (Solihull)

    Strauss, H. G. (English Universities)

    Crosthwaite-Eyre, Col. D. E.

    Lucas, Major Sir J.

    Sutcliffe, H.

    Dodds-Parker, A. D

    Lucas-Tooth, Sir H.

    Thornton-Kemsley, C. N.

    Donner, Sqn.-Ldr. P. W.

    Macdonald, Sir P. (Is, of Wight)

    Turton, R. H.

    Dower, Lt.-Col. A. V. G (Penrith)

    Mackeson, Brig. H. R.

    Walker-Smith, D.

    Drewe, C.

    Maclean, Brig. F. H. R. (Lancaster)

    Watt, Sir G. S. Harvie

    Eccles, D. M.

    Macpherson, Maj. N. (Dumfries)

    Wheatley, Colonel M. J.

    Elliot, Rt. Hon. W. E.

    Maitland, Comdr. J. W.

    Winterton, Rt. Hon. Earl

    Erroll, F. J.

    Manningham-Buller, R. E.

    Young, Sir A. S. L. (Partick)

    Fletcher, W. (Bury)

    Marshall, D. (Bodmin)

    Foster, J. G. (Northwich)

    Mellor, Sir J.

    TELLERS FOR THE NOES

    Fraser, Sir I. (Lonsdale)

    Molson, A. H. E.

    Commander Agnew and

    Gage, C.

    Morris-Jones, Sir H.

    Major Conant.

    Clause ordered to stand part of the Bill.
    Clauses 38 and 39 ordered to stand part of the Bill.

    CLAUSE 40.—(Persons leaving the scheduled territories.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Colonel Crosthwaite-Eyre: This Clause, as drafted, appears to give powers to the Treasury quite beyond anything that should be exercised. As I read it, it enables the Treasury to make an order whereby anyone who has been resident in the United Kingdom, and who goes for any reason to the scheduled territories, and happens subsequently to leave the scheduled territories, is deprived of anything he has held in his previous career in the scheduled territories, or the United Kingdom. I will give a couple of instances. An employee of one of the great Anglo-South African firms may have 'been resident in the United Kingdom. He goes out to the South African office. He is all right so far, and he is entitled to the proceeds of any moneys he may have collected in the United Kingdom, or any dividends on shares he may hold in this Kingdom, or in South Africa. But, supposing that the Anglo-South African company decides to send him outside the scheduled territories to, for instance, a subsidiary in South America; the Committee will know that in a great many cases South African companies, particularly mining companies, have subsidiaries in South America. For instance, the man may be detailed to go to Peru, to investigate a new oilfield, or take some part in connection with one of the existing oilfields. He is then subject to the full rigours of Clause 40, and it is possible for the Treasury to debar him from receiving any of the proceeds, either of the moneys he has left in the United Kingdom or, alternatively, of what he has earned, in South Africa. Equally it is possible, if he is in the type of job where he has to spend six months in South America and six months in South Africa, that he may move his family, for reasons of cost, to South America. It is possible for the Treasury to stop that man being able to send his wife and children any money.
    There is a further case. Suppose a skilled worker has gone out to South Africa, for the purpose of taking a job in a large garage, or to join a building business. Suppose he becomes an employee of one of the great South African corporations. It will be impossible for
    846
    him to take any appointment under the corporation unless that appointment is confined to duty within the scheduled territories. This Clause places a hopeless burden on anyone who, for one reason or another, may think his life will be better developed if he lives in the scheduled territories rather than in this Kingdom. I think that these wide powers, stated in this way, in a Measure which is to become a permanent piece of legislation, go far beyond anything which is needed. Obviously the purpose of the Clause is to prevent those who may have money or capital emigrating to a scheduled territory, and flying from that scheduled territory so as to get away with their capital. But it seems quite ridiculous to place this Clause permanently on the Statute Book, in order to stop that loophole.
    7.45 p.m.
    I think it is no matter of controversy in the Committee that for many generations it has been the custom for younger sons to go out to the Dominions, and they have added enormously to the wealth of this country by their efforts and ingenuity. This Clause will be penal, because if any such person goes out and joins any concern except one which will automatically guarantee him his future within the scheduled territories, he is not able to take anything of what he has earned either in this country or in his temporary position in South Africa. I think the Chancellor should be willing to recognise that position, and to make a concession. I am not certain whether he was in the Committee, when I talked about South African companies with subsidiaries in South America, but I am sure he will appreciate that point. There are great Peruvian or Venezuelan companies, all of which are controlled in the United Kingdom directly or indirectly from South Africa, and many people in this country leave to take up mining jobs and go out to South Africa. Under this Clause they are subject to lose every penny they possess either in this country or in South Africa when they leave there. I hope that between now and the Report stage the Chancellor will look at the Clause again.
    Mr. Glenvil Hall: I cannot help thinking that the hon. and gallant Member for New Forest and Christchurch (Colonel Crosthwaite-Eyre) is labouring under a

    847
    misapprehension as to just what the Clause means. It does not deal with people who reside in South Africa. It deals with people resident in the United Kingdom who go outside the scheduled territories, and South Africa is inside the sterling area. Otherwise, the example given by the hon. and gallant Member may be said to hold true. A man may go to Bolivia or some other State in South America. Obviously we cannot let a man go from this country to a foreign country outside the scheduled territories and allow him to take anything he likes in the way of securities and capital assets. We must keep control and regulate the flow of exchange and capital assets from this country to territories of that kind.
    We realise that in these postwar years people want to move about the world, and that some desire to emigrate. Unfortunately all do not desire to emigrate to the Commonwealth and Empire. I am glad that many of them wish to go to Canada, Australia, South Africa, or Rhodesia, but some desire to go elsewhere. We make provision for them to go if so minded, but we have to make sure that they are really genuine emigrants. Otherwise it would be very easy for someone, who wanted to get a slice of his capital outside the country, to pretend that he was going to reside permanently in, say, the United States, or Canada, and by that means, unless there were controls, to get the whole of his assets out of this country by what, after all, would be a trick. Where a genuine emigrant desires to leave these shores, we make provision for him and his family to take sufficient assets to help them to settle down and until we are certain that they genuinely mean to settle wherever they have gone.
    The period of settlement to establish overseas residence, though not fixed and unalterable, is four years, and the sum allocated for that period is up to £5,000. Such a person would of course be able to draw any dividends that accrued to him on securities and assets in this country. At the moment in present world circumstances, we think these provisions not unreasonable. If, in certain circumstances it was found that for good and sufficient reasons the £5,000 was not enough, obviously the Treasury would be willing to see what further could be done. Therefore, I hope that with that explanation, which I venture to think puts a different
    848
    complexion on the matter than that put by the hon. and gallant Gentleman, he will not press the matter further.
    Mr. J. Foster: Could the Financial Secretary say what happens after the four years?
    Mr. Glenvil Hall: Of course the four years are not up yet—[Laughter.] I was not attempting to be humorous.
    Mr. J. Foster: The hon. Gentleman was not attempting—he succeeded.
    Mr. Glenvil Hall: All I would say is that we are starting off one step at a time. At the moment about four years ahead is a? far as we can see. By then conditions may have changed both in this country and others so that regulations can be considerably lightened and many relaxations brought into being. For the next four years, therefore, generally speaking, we lay down an upper limit of £5,000 for that period. The person concerned may take perhaps £1,500 of it with him; it depends what he is going to do. These things are subject to the discretion of the Treasury which uses its common sense, and desires, above everything else, to help the people who want to emigrate in this way. But we have for the time being placed an overall limit of £5,000 during the next four years. What will happen after that I cannot yet say.
    Mr. J. S. C. Reid: What the Financial Secretary has said may or may not be reasonable, but it bears little or no relation to the contents of this Clause. Let me point out that the Clause enables the Treasury, in the case of a person resident in the United Kingdom, who leaves the scheduled territories, to direct that all payments to his credit, in this country or out of this country, shall be subject to such restrictions as may be specified. That is to say, this Clause enables the Treasury to prevent any money, capital or interest, being paid to the credit of a man who emigrates contrary to their desires. That was not the impression the Financial Secretary gave, to me at least, or I think to other hon. Members of the Committee, in his speech. How can he justify a provision under which dividends in this country are not to be paid into a man's bank in this country because the man has chosen to go abroad contrary to the views of the Treasury? That is what the Clause says. How is it

    849
    justified? To begin with, a man cannot leave the country at all; the Home Secretary and the Foreign Secretary and others see to that—
    The Secretary of State for the Home Department (Mr. Ede): I do not.
    Mr. Reid: Unless he has some reasonable ground for going, he does not get a passport. If he has got a passport and visa and all the other necessities, why should the Treasury have power to say, "Your money in this country is not to be paid into your bank in this country if you have gone abroad contrary to our views"? That is what the Financial Secretary is taking power to do. How does he justify it?
    Mr. Glenvil Hall: One justifies it as one justifies equally stringent powers in other Clauses which we have already passed. I thought it was now crystal clear to all Members in the Committee that in this Bill we take stringent and drastic powers and then propose by exemption orders and regulations of one kind and another to mitigate them, according to the situation from time to time. There is no other way of making provision for this kind of control except by the method laid down in the Bill. While it is perfectly true that the Clause is, as the hon. and gallant Member said, very stringent, they have in fact been more stringent than this during the war. We are continuing the Defence Regulations in this Clause, but we hope as time goes on, and conditions improve, that they can be considerably lightened in the interests of the individuals concerned.
    Colonel Crosthwaite-Eyre: Would the Financial Secretary answer one question? I thank him for the answer he has given me so far. I spoke about the employees of one of the big mining companies. It is common knowledge in all parts of this Committee that in this business of mining engineering there is great competition, at the moment, between American and British subjects, particularly in South America. I am certain that the Chancellor knows that it is the object of the Anglo-South African firms to get British mining engineering experts into that area. They are being subjected to great pressure from America against that policy. The Financial Secretary has said nothing of the case I gave him of the engineer who goes to South Africa, and is then drafted, in the
    850
    normal course of events, with his family, say to Venezuela. Is he still bound by the provision that he can take only £5,000 for four years, or is he allowed, as he is the employee of a British-owned company, to take all his assets in order that he may set up his new home, etc.?
    Mr. J. Foster: I see the object which, according to the Financial Secretary, the Government are trying to accomplish. I understood from the Chancellor's statement, on Clause 31, that it is the intention to continue non-resident accounts. The restriction of payments that may be made to, or by a non-resident were described as being under non-resident account. I can understand that one of the objects of the Clause, in conjunction with the use of the power under Clause 41, is that when a person leaves this country and becomes a non-resident, it is desired that his account should be blocked, and in that sense it becomes a non-resident account. Where the Clause goes too far is that besides prescribing what is a non-resident account, the Treasury can also in the case of a person who has not emigrated, or a person who is innocently abroad, put the most severe restrictions on his account and securities. The first class upon whom restrictions are put is that of the person who lives here, and whose account is decided to be a non-resident account. The other class is that of the person who leaves and who may have been a resident and in whose case, in the opinion of the Treasury, this is necessary for the defence of our currency. I suggest that there might be some words in the Clause to the effect that the Treasury may "if they deem it necessary for the purposes of this Act, to safeguard the currency." I am putting it very badly; I am not trying to draft it. But if there were words which showed that they were only doing it in circumstances where it was necessary to protect the currency, I should have thought that that would go a long way towards meeting the objections which we have expressed. As I have said, I was in Paris yesterday. At the moment this provision is so wide that it could allow the Treasury to block all my accounts as from yesterday.
    Mr. Dalton: We have not done so.
    Mr. Foster: No, but I say there is no need to take such wide powers. I should have thought it would be sufficient to put

    851
    something in the Clause to say where, in the opinion of the Treasury, this is necessary for preventing the transfer of capital and money abroad.
    8.0 p.m.
    Mr. Dalton: If we did that, in this Clause we should have to do it in every Clause. There is no more need for me to repeat the reasons for the Bill whilst discussing this Clause, than there has been on any of the preceding Clauses. These powers are to protect our exchange position. The argument is essentially the same on Clause after Clause. These powers are wide and strong, because here and there there may be a crook to be laid by the heels. All these amiable and excellent engineers of whom the hon. and gallant Gentleman the Member for New Forest and Christchurch (Colonel Crosthwaite-Eyre) speaks, will be allowed to move about without restriction.
    Mr. Assheton: We are not satisfied with the answer which the right hon. Gentleman has given. He has made no case

    Division No. 31.

    AYES

    8.4 p. m

    Adams, Richard (Balham)

    Cluse, W. S.

    Goodrich, H. E.

    Allen, A. C. (Bosworth)

    Cobb, F. A.

    Gordon-Walker, P. C.

    Allen, Scholefield (Crewe)

    Cocks, F. S.

    Greenwood, A. W. J. (Heywood)

    Alpass, J. H.

    Collick, P.

    Grenfell, D. R.

    Anderson, F. (Whitehaven)

    Colman, Miss G. M.

    Grey, C. F.

    Attewell, H. C.

    Comyns, Dr. L.

    Grierson, E.

    Austin, H. L.

    Cooper, Wing-Comdr. G.

    Griffiths, D. (Rother Valley)

    Awbery, S. S.

    Corbet, Mrs. F K. (Camb'well, N.W)

    Gunter, R. J.

    Ayles, W. H.

    Corlett, Dr. J.

    Hale, Leslie

    Ayrton Gould, Mrs. B.

    Cove, W. G.

    Hall, W. G.

    Bacon, Miss A.

    Crossman, R. H. S.

    Hamilton, Lieut.-Col. R

    Baird, J.

    Daggar, G.

    Hannan, W. (Maryhill)

    Balfour, A.

    Dairies, P.

    Hardy, E. A.

    Barnes, Rt. Hon. A. J.

    Dalton, Rt. Hon. H.

    Harrison, J.

    Barstow, P. G.

    Davies, Edward (Burslem)

    Hastings, Dr. Somerville

    Barton, C.

    Davies, Ernest (Enfield)

    Henderson, A. (Kingswinford)

    Battley, J. R.

    Davies, Harold (Leek)

    Henderson, Joseph (Ardwick)

    Bechervaise, A. E.

    Davies, R. J. (Westhoughton)

    Hewitson, Capt. M.

    Bellenger, Rt. Hon. F. J.

    Davies, S. O. (Merthyr)

    Hobson, C. R.

    Benson, G.

    Deer, G.

    Holman, P.

    Berry, H.

    Diamond, J.

    Holmes, H. E. (Hemsworth)

    Bing, G. H. C.

    Dobbie, W.

    Horabin, T. L

    Binns, J.

    Donovan, T.

    House, G.

    Blackburn, A. R.

    Driberg, T. E. N.

    Hoy, J.

    Blenkinsop, A.

    Dugdale, J. (W. Bromwich)

    Hughes, Hector (Aberdeen, N.)

    Blyton, W. R.

    Dyes, S.

    Hughes, H. D. (W'lverh'pton, W.)

    Boardman, H.

    Ede, Rt. Hon. J. C.

    Hutchinson, H. L. (Rusholme)

    Bowden, Flg. Offr. H. W.

    Edwards, A. (Middlesbrough, E.)

    Hynd, H. (Hackney, C.)

    Bowen, R.

    Edwards, John (Blackburn)

    Hynd, Rt. Hon. J. B. (Attercliffe)

    Bowles, F. G. (Nuneaton)

    Edwards, N. (Caerphilly)

    Irving, W. J.

    Braddock, T. (Mitcham)

    Edwards. W. J. (Whitechapel)

    Isaacs, Rt. Hon. G. A

    Bramall, Major E. A.

    Evans, E. (Lowestoft)

    Jay, D. P. T.

    Brook, D. (Halifax)

    Evans, S. N. (Wednesbury)

    Jeger, G (Winchester)

    Brown, T. J. (Ince)

    Ewart, R.

    Jones, D. T. (Hartlepools)

    Bruce, Maj. D. W. T.

    Fletcher, E. G. M. (Islington, E.)

    Jones, J. H. (Bolton)

    Burke, W. A.

    Follick, M.

    Jones, P. Asterley (Hitchin)

    Byers, Frank

    Foot, M. M.

    Keenan, W

    Callaghan, James

    Fraser, T. (Hamilton)

    Kenyon, G.

    Castle, Mrs. B. A

    Gaitskell, H. T. N.

    Key, C. W.

    Chamberlain, R. A.

    Ganley, Mrs. C. S.

    Kinley, J.

    Champion, A. J.

    Gibson, C. W.

    Kirby, B. V.

    Chater, D.

    Gilzean, A.

    Lang, G.

    Chetwynd, G. R.

    Glanville, J. E (Consett)

    Lavers, S.

    Clitherow, Dr. R.

    Gooch, E. G.

    Lawson, Rt. Hon. J. J.

    whatever for taking the very strong powers which this Clause gives. So far as I can see, there is no suggestion that the payments in question which are made to the man's account in Great Britain, for example, should be treated in any different sense from the payments made to his account outside the scheduled territories. The Chancellor has not been able to illustrate in any way the reasons which prompt him to ask for such extreme powers. I do not think it fair to compare this Clause with previous Clauses. This is an example of the Treasury taking powers which are stronger than those granted in any Clause which we have considered so far, powers which are far out of relation to any of the others. I ask the right hon. Gentleman to consider this matter before the Report stage. If he is unable to make that promise, I am afraid we must divide against this Clause.
    Question put, "That the Clause stand part of the Bill."
    The Committee divided: Ayes, 269; Noes, 88.

    Leslie, J. R.

    Parkin, B. T.

    Summerskill, Dr Edith

    Levy, B. W.

    Paton, Mrs. F. (Rushcliffe)

    Symonds, A. L

    Lewis, A. W J. (Upton)

    Paton, J. (Norwich)

    Taylor, H. B. (Mansfield)

    Lewis, J. (Bolton)

    Pearson, A.

    Taylor, R. J. (Morpeth)

    Lindgren, G. S.

    Peart, Capt. T. F.

    Taylor, Dr. S. (Barnet)

    Lipson, D. L.

    Perrins, W.

    Thomas, John R. (Dover)

    Lipton, Lt.-Col. M

    Poole, Major Cecil (Lichfield)

    Thomas, George (Cardiff)

    Longden, F.

    Popplewell, E.

    Thomson, Rt. Hn. G. R. (Ed'b'gh, E.)

    Lyne, A. W.

    Porter, E. (Warrington)

    Thorneycroft, Harry (Clayton)

    McAdam, W.

    Porter, G. (Leeds)

    Tiffany, S.

    McEntee, V La T.

    Proctor, W. T.

    Tolley, L.

    McGhee, H. G.

    Pursey, Cmdr. H

    Turner-Samuels, M.

    Mack, J. D.

    Randall, H. E.

    Ungoed-Thomas, L.

    McKay, J. (Wallsend)

    Ranger, J.

    Usborne, Henry

    Mackay, R. W. G. (Hull, N.W.)

    Rankin, J.

    Viant, S. P.

    McLeavy, F.

    Rees-Williams, D. R.

    Wadsworth, G.

    MacMillan, M. K. (Western Isles)

    Reeves, J.

    Walkden, E.

    McNeil, Rt. Hon. H.

    Reid, T. (Swindon)

    Walker, G. H.

    Macpharson, T. (Romford)

    Rhodes, H

    Wallace, G. D. (Chislehurst)

    Mainwaring, W. H.

    Robens, A.

    Wallace, H. W. (Walthamstow, E.)

    Mallalieu, J. P. W.

    Roberts, Emrys (Merioneth)

    Webb, M. (Bradford, C.)

    Manning, Mrs. L. (Epping)

    Roberts, Goronwy (Caernarvonshire)

    Weitzman, D.

    Marquand, H. A.

    Roberts, W. (Cumberland, N.)

    Wells, W. T. (Walsall)

    Mathers, G.

    Robertson, J. J. (Berwick)

    West, D. G.

    Mayhew, C. P.

    Rogers, G. H. R.

    Westwood, Rt. Hon. J.

    Medland, H. M

    Royle, C.

    White, C. F. (Derbyshire, W.)

    Mellish, R. J.

    Sargood, R

    White, H. (Derbyshire, N. E.)

    Messer, F.

    Scollan, T.

    Whiteley, Rt. Hon. W

    Middleton, Mrs. L.

    Scott-Elliot, W.

    Wigg, Col. G. E.

    Mitchison, Maj. G. R

    Shackleton, Wing-Cdr. E. A. A.

    Wilkes, L.

    Monslow, W.

    Sharp, Granville

    Wilkins, W. A.

    Moody, A. S.

    Shurmer, P.

    Willey, O. G. (Cleveland)

    Morgan, Dr. H. B.

    Silverman, J. (Erdington)

    Williams, D. J. (Neath)

    Morris, P. (Swansea, W.)

    Silverman, S. S. (Nelson)

    Williams, J. L. (Kelvingrove)

    Morrison, Rt. Hon. H. (Lewisham, E.)

    Simmons, C. J.

    Williams, W. R. (Heston)

    Mort, D. L.

    Smith, H. N (Nottingham, S.)

    Willis, E.

    Moyle, A.

    Smith, S. H. (Hull, S.W.)

    Wills, Mrs. E. A.

    Naylor, T. E.

    Snow, Capt. J. W.

    Wise, Major F. J

    Nichol, Mrs. M. E. (Bradford, N.)

    Solley, L. J.

    Woods, G. S.

    Noel-Baker, Capt. F. E. (Brentford)

    Sorensen, R. W.

    Wyatt, W.

    Noel-Buxton, Lady

    Soskice, Maj. Sir F

    Yates, V. F.

    Oldfield, W. H.

    Sparks, J. A.

    Young, Sir R. (Newton)

    Oliver, G. H.

    Stamford, W

    Zilliacus, K.

    Paget, R. T.

    Steele, T.

    Paling, Rt. Hon. Wilfred (Wentworth)

    Stephen, C

    TELLERS FOR THE AYES

    Pargiter, G. A.

    Strauss, G. R. (Lambeth, N.)

    Mr. Collindridge and

    Parker, J.

    Stubbs, A. E.

    Mr. Coldrick.

    NOES

    Agnew, Cmdr. P. G.

    Gates, Maj. E. E.

    Nield, B. (Chester)

    Amory, D. Heathcoat

    George, Maj. Rt. Hn. G. Lloyd (P'ke)

    Peto, Brig C. H. M.

    Assheton, Rt. Hon. R.

    Gomme-Duncan, Col. A. G.

    Pitman, I. J.

    Astor, Hon. M.

    Grant, Lady

    Poole, O. B. S. (Oswestry)

    Baldwin, A. E.

    Gridley, Sir A.

    Prescott, Stanley

    Barlow, Sir J

    Hart, Hon. J. H. (Woodbridge)

    Price-White, Lt.-Col. D.

    Birch, Nigel

    Harvey, Air-Comdre. A. V.

    Rayner, Brig. R.

    Boles, Lt.-Col. D. C. (Wells)

    Head, Brig. A. H.

    Reed, Sir S. (Aylesbury)

    Boyd Carpenter, J. A.

    Hinchingbrooke, Viscount

    Reid, Rt. Hon. J. S. C. (Hillhead)

    Braithwaite, Lt.-Comdr. J. G.

    Hollis, M. C.

    Renton, D.

    Bromley-Davenport, Lt.-Col. W.

    Holmes, Sir J. Stanley (Harwich)

    Roberts, H. (Handsworth)

    Buchan-Hepburn, P. G. T.

    Hudson, Rt. Hon. R. S. (Southport)

    Robinson, Wing-Comdr. Roland

    Butcher, H. W.

    Hulbert, Wing-Cdr. N. J.

    Sanderson, Sir F.

    Carson, E.

    Lambert, Hon. G.

    Shepherd, W. S. (Bucklow)

    Challen, C.

    Lancaster, Col. C. G.

    Spearman, A. C. M.

    Clifton-Brown, Lt.-Col. G

    Legge-Bourke, Maj. E. A. H.

    Stanley, Rt. Hon. O.

    Conant, Maj. R. J. E.

    Lennox-Boyd, A. T.

    Strauss, H. G. (English Universities)

    Cooper-Key, E. M.

    Lindsay, M. (Solihull)

    Sutcliffe, H.

    Corbett, Lieut.-Col. U. (Ludlow)

    Macdonald, Sir P. (Is. of Wight)

    Thornton-Kemsley, C. N.

    Crosthwaite-Eyre, Col. O. E.

    Mackeson, Brig. H. R.

    Turton, R. H.

    Dodds-Parker, A. D.

    Maclean, Brig. F. H. R. (Lancaster)

    Walker-Smith, D.

    Donner, Sqn.-Ldr. P. W.

    Macmillan, Rt. Hon. Harold (Bromley)

    Watt, Sir G. S. Harvie

    Dower, Lt.-Col. A. V. G. (Penrith)

    Macpherson, Maj. N. (Dumfries)

    Wheatley, Colonel M. J.

    Drewe, C.

    Maitland, Comdr. J. W.

    Willoughby de Eresby, Lord

    Eccles, D. M

    Manningham-Buller, R. E.

    Winterton, Rt. Hon. Earl

    Erroll, F. J.

    Marshall, D. (Bodmin)

    York, C.

    Fletcher, W. (Bury)

    Mellor, Sir J.

    Foster, J. G. (Northwich)

    Molson, A. H. E.

    TELLERS FOR THE NOES

    Fraser, Sir I. (Lonsdale)

    Morris-Jones, Sir H.

    Sir Arthur Young and

    Fyfe, Rt. Hon. Sir D. P. M.

    Mott-Radclyffe, Maj. C. E

    Major Ramsay.

    Gage, C.

    Neven-Spence, Sir B.

    CLAUSE 41.—(Determination of residence.)
    Mr. J. S. C. Reid: I beg to move, in page 27, line 8, to leave out from "may," to the end of the Clause, and to add:
    "by order make regulations defining for all or any of the purposes of this Act—

    (a) the circumstances in which a person shall be treated as being resident in the United Kingdom;

    (b) the circumstances in which a person shall be treated as being resident outside the United Kingdom;

    (c) the circumstances in which a person shall be treated as being resident in such territories as may be specified in the order.

    No order shall be made under this Section unless a draft of the Order has been laid before Parliament and has been approved by a resolution of each House of Parliament."
    The Committee will see that Clause 41 (2) provides:
    "The Treasury may give directions declaring that for all or any of the purposes of this Act a person is to be treated as resident or not resident in such territories as may be specified in the directions."
    This question of residence is vital to almost every Clause in the Bill. Almost every Clause affects persons who are in, or resident in, the United Kingdom. There is, generally, a pretty substantial criminal penalty attached to a breach of any of these Clauses. Therefore, in accordance with our ordinary—or, perhaps, I ought now to say our former—practice, it was always thought desirable that, when a criminal offence was created, the law which created it ought to be tolerably plain for all to see. I agree that during the war breaches were inevitably made in that salutary old principle, but I have never seen one quite so flagrant as this. Not only is there no definition, but every case is to be a law unto itself. The Treasury is entitled, without reason given, to say to one man, "You are resident, here," and to another man, in precisely the same circumstances, "You are resident there." There is nothing to provide for any rule of law or for any series of precedents laying down a principle, as has happened in the common law from time immemorial, because no reasons need be given. Worse than that, the decision may not be given until after the event has happened, as I read the Clause. This is the only definition of residence in the Bill.
    856
    8.15 p.m.
    Supposing I think that I am not resident in the United Kingdom, according to the ordinary canons of residence, and I do something which concerns, let us say the Income Tax Acts; and then, after I have done this thing in all innocence, knowing that I am not resident in any ordinary sense of the word, the Treasury choose to say, "We say you were resident in the United Kingdom on that date, and, therefore, you are guilty of a criminal offence," that is a complete denial of justice. But there is nothing in this Bill to exclude it. Of course, we shall be told the old story, that the Treasury intend to act reasonably. There is something to be said for giving discretion when dealing with controls or prohibitions or matters of that kind, but there is nothing to be said for giving a discretion when imposing a criminal penalty on a man who could not be expected to know about it at the time when he committed the offence. I shall be interested to hear the answer of the learned Solicitor-General to my question.
    Is this direction retrospective or not? Are the Treasury entitled to say today, "We say that yesterday you were resident in the United Kingdom," or can they only say, "We say that today, and so long as present circumstances continue unaltered, you are resident in the United Kingdom"? I think the hon. and learned Gentleman is in a dilemma here, because if he says the Treasury cannot make a retrospective finding and that a direction under Clause 41 (2) can only apply to today and the future, then I think the greater part of the importance of this point is lost. But if, on the other hand, the hon. and learned Gentleman is going to say, "The Treasury can today say that yesterday you were resident in the United Kingdom," then I say that is retrospective legislation of the worst possible kind. It is imposing criminal liability on a man who could not know when he committed the action whether he was guilty or not, because he could not know what the Treasury would say tomorrow about his place of residence when he committed the act. There is no limitation laid down here, there is no principle. This is pure administrative despotism, and on those grounds, unless we can be assured that some considerable alteration will be made, I hope the Committee will divide against this monstrous proposal.
    The Solicitor-General: I do not think this Clause is nearly as fierce as the right hon. and learned Member for Hillhead (Mr. J. S. C. Reid) would have us think. The gravamen of his charge against it—and it was quite definitely a charge against it—lay in the assertion that it enabled the Treasury ex post facto to render a person liable in criminal proceedings. The right hon. and learned Gentleman contended that under its terms, properly construed, the Treasury could say to any person, "You shall be deemed to have been resident at a particular place or in any particular territory at some date in the past." If the right hon. and learned Gentleman will look at the Clause more closely, he will see that the relevant words are:
    "is to be treated as resident or not."
    It does not say, "is to be treated as resident or as having been resident or not." If it contained words like, "or having been resident," I would at once concede that it would have to be construed as conferring upon the Treasury a power to say with regard to any person that he had at some anterior date been resident in a particular territory. Those words, however, are absent, and that is crucial. That is why the whole foundation of the argument adduced by the hon. and learned Gentleman goes. What the Clause, upon its true construction, does is this. It enables the Treasury to say, "You are to be deemed resident, or not resident, in a particular territory."
    Now, in point of fact, the Clause will be used, not so much in relation to criminal proceedings as for the convenience of bankers, and for the convenience of persons who come within its purview. After all, the circumstances with which we are dealing are circumstances in which a great many people who will come within the purview of the Bill are people who transfer regularly from one country to another, and with regard to whom it is extremely difficult to predicate in what country they are resident Although a definition is used for the purpose of establishing residence, it is very difficult to say with regard to such persons who have no definable home, or who have homes in many countries, whether they are resident, for the purposes of the Bill, in one country or the other.
    That difficulty being present, bankers will not know in relation to the accounts
    858
    of such persons whether they can pass money through those accounts or not. Take one example under the Bill. Stockbrokers, anybody concerned with the transfer of securities, registrars and so on, will all be in the dilemma that, unless there is some machinery for declaring with regard to persons of that sort that they are deemed to be resident in this, that or the other country, they will not know how they are to proceed in relation to the transfer of securities to or from persons of that sort, and they will not know how to proceed in relation to the passing of money in relation to the bankers; nor will authorised dealers or authorised depositories be in any better position.
    It is essential for the working of the scheme that there should be some machinery where, in cases of doubt of that sort, an ad hoc decision will be given. It will not be given retrospectively, and upon the true construction of the Clause it cannot be. I am not talking about criminal proceedings. It would be a great help to bankers, and to the people themselves, if it could be said in relation to past transfers, "We are going to treat this one as valid, or invalid." The Clause does not do that It would be difficult to do that, to give them retrospective power, without giving the power to create retrospective criminal offences. It is desired to give power to declare, as from the moment of the declaration, that so long as the circumstances persist the person concerned shall be deemed to be resident, or not resident, in a particular territory. It is for the convenience of everybody. It is not, as the right hon. and learned Gentleman seemed to think, for the purpose of simply setting up criminal offences. It would be a precedent if the Treasury tried to say ex post facto "You were guilty of a criminal offence, though you did not know it." This Bill does not seek to repose that power on the Treasury I hope the right hon. and learned Gentleman is satisfied about that.
    Mr. J. S. C. Reid: I would like to know, if the hon. and learned Gentleman's interpretation is right, how it is determined where the person was resident before the direction was given, because this is the only machinery, that I can see, in the Bill for interpreting residence, or for determining where he was resident What is the machinery for determining where he was resident and what are the tests?
    The Solicitor-General: Is the right hon. and learned Gentleman now suggesting the Clause should act retrospectively?
    Mr. Reid: I am asking a question.
    The Solicitor-General: There is no such power in the Bill. It simply has to be determined by a court as a question of fact, if the matter arises. It would be of great administrative convenience if it were possible to declare retrospectively with regard to any individual that he was resident in such and such a country. It would be to everybody's great convenience. But if one enabled the Treasury to do that, one would automatically be enabling them ex post facto to create retrospective criminal offences, which would be an intolerable precedent. They are not given power to do that. If it were possible, it would be a great boon to bankers, stockbrokers and everybody else. The Treasury do not seek to take the power for the very same reason that the right hon. and learned Gentleman would, in that case, have addressed against the Clause.
    The Clause does not do that. It limits their powers, unfortunately. Therefore, the only way in which residence, ex post facto, can be determined is in the ordinary way in which it is determined in every court—if the matter should ever go before a court—as a question of fact, on taking the evidence and deducing it from the evidence. In the future, as from the time a declaration is made, anybody can know. Individuals themselves will probably want to know, and want to know badly, whether they are to be treated as resident. Once an individual knows, he knows he can travel between London and New York, or wherever his business is taking him, knowing he can or cannot do certain things in the transfer of his shares, in acquiring foreign currency, and so on. He will be in a great dilemma if, before he can engage in any transaction, he has got to wait until his residence is determined by a court, or take a guess himself what the proper legal conclusion is, in doubtful circumstances. I am quite sure everybody would be very sorry if this particular Subsection were left out. It would cause great inconvenience to a very large number of persons. I hope the right hon. and learned Gentleman, with that explanation, will agree to withdraw his Amendment, if the Committee gives him leave to do so. The Clause, as I say, is simply designed for
    860
    that purpose, and the whole of the, argument which has been addressed against it is drawn from a completely false hypothesis.
    Mr. J. Foster: This is a very serious Clause, and I should like to draw the attention of the Committee to the seriousness of this Clause from another point of view.
    The Chairman: We are not talking about the Clause. We are talking about the Amendment.
    Mr. Foster: The object of the Amendment is to provide machinery by which the residence of somebody under this Clause may be determined. The serious part of the Clause is that, as my right hon. and learned Friend pointed out, nowhere in this Bill is any machinery provided for determining residence. That has very serious consequences for those who have to advise people as to their position, and has serious consequences for persons whose residence may be wrongly determined, either by the Treasury or in a court of law. The residence of a person is vital under this Bill. There are certain things non-residents cannot do, and there are certain things residents cannot do. Nowhere in this Bill are there any tests. The Amendment asks that certain tests should be laid down. In the Income Tax Acts distinction between residence and non-residence is made; but there it is not so vital as it is here. In the Income Tax Acts certain well known rules and tests are laid down, and then a tribunal is nominated for residence to be decided. In the Income Tax Acts we have "every six months"; and we have fixed places of residence in this country; or we have a regular visit to this country at stated times in successive tax years.
    What is needed in this Bill are certain tests, which this Amendment invites the Treasury to lay down, to decide where residence lies. As the learned Solicitor-General said himself, there is nowhere in the Bill any machinery for deciding what residence is except, so far as I can see, the machinery of the police court where the man is prosecuted. Some of us are in the position of having to advise people as to where they stand. Suppose a man comes and says, "Am I resident or nonresident? What can I do?" Until a body of case law grows up nobody can

    861
    tell. It may be very well for the lawyers—and the hon. and learned Member for Gloucester (Mr. Turner-Samuels) may agree with me that it would be very nice for us—if a body of case law arose as to what residence was; if gradually, with the years, from decisions of the courts, appeals from magistrates' courts to quarter sessions, and appeals by way of cases stated, a great body of case law arose, saying that a man who left this country only for a week was not non-resident. It might be decided that the man who left for a week but intended to stay abroad for a longer time, was a non-resident. There could be various permutations and combinations, making a large number of definitions of what constituted residence, but in my submission the proper way would be to have it stated in the Bill, as this Amendment suggests, that the Treasury could lay down the test of what constitutes residence.
    8.30 p.m.
    There is another serious flaw which this Amendment is designed to meet. Let us assume, as the Solicitor-General said, that a man is very anxious to know whether he is a resident or a non-resident. A lot hangs on the answer to that question. He wants to know whether he can make certain payments inside or outside the scheduled territories, and he asks the Treasury for a direction under this Clause, as it stands now without the Amendment. Let us assume that the Treasury say he is resident in the scheduled territories whereas, in his opinion, they are wrong and he is resident outside. Or it may be the reverse; the Treasury may decide that he is resident outside when he thinks he is resident inside. Both cases could arise. He may genuinely think that he is resident in the country where the Treasury says he is not resident. There is no machinery in the Bill to decide which is right. Under the Income Tax Acts it would be a question of fact for the Special Commissioners, but here there is nothing. Suppose the man says he will not agree with the Treasury and prefers to let the courts of law decide to decide the question later; as the Clause is now worded, he cannot do that, but must be treated according to the directions of the Treasury.
    A man who lives nine months in the United States and three months here may be advised, and may believe, that he is resident in the United States. But if,
    862
    during the three months he is here, he has a flat which he keeps for the rest of the year and sublets, under the Income Tax rules he may be resident in both countries, and he may get a direction from the Treasury saying that he is resident in the United Kingdom. Surely in a case much more important than any Income Tax case there should be some tribunal to which he could appeal, there should be some way in which he could contest the direction of the Treasury, but there is not. The next best thing is for some test to be laid down with a certain amount of definiteness in the regulations, so that the man may have advice. If this Amendment were accepted, the best persons to advise him would be his bankers, who would know, more or less, whether he was resident inside or outside the United Kingdom.
    I do not think the Government have realised the difficulties which will arise in advising people as to their position in the cases of persons who have not got a direction from the Treasury, and in the cases of persons who have got directions but who have been wrongly described. In the first type of case they do not know where they are; and in the second type of case they have no redress. At the present moment there is a definition of residence in this country in the Defence Regulations, and there are definitions of residence also in the Income Tax Acts. There is a body of law dealing with residence for voting, a whole mass of authority ranging over the 18th and 19th centuries to decide what residence for the purpose of voting is. It has led to a lot of expensive litigation and perhaps I should not be opposing that, but I do because, joking apart, it is too serious a matter in which to leave the definition of residence to be worked out, slowly and not too surely, by the courts of this land, with appeals ranging all the way up—that is in the case of people who have not had direction, and people who have had direction.
    I cannot see anything in the Bill which allows a man the slightest appeal. If there is a body of regulations which sets out the circumstances under which a person may be treated, he has something to look to. He could see how he would be treated if he had been a resident for a certain time in this country, or if he had been an agent of a foreign corporation and had a place of business. There

    863
    is some test in these cases. It seems that the Treasury are not bound to apply these tests in directing him, and maybe the courts of law will evolve such tests through case law. In the case of a person who gets a direction, there is no reference to the Treasury having to pay regard to any such circumstances, and no one knows how the Treasury are to decide the question of residence, and to which points they are to give attention.
    In my submission, the Government are making a grave mistake, and it is a mistake which will be fundamental in the working of this Bill, because most of the Clauses start off with ''where a person is resident," or "where a person is not resident." These people are to be left entirely in the dark when this Bill becomes an Act—and apparently it is to be in operation for a very long time—if an Amendment is not made. It seems to me nothing short of a scandal that persons should be unable to tell how they are to be deemed to be resident where there is to be no direction, and that where there is direction they should be left entirely without appeal. I seriously ask the Solicitor-General, if he thinks there is any merit in what I have said, to consider this matter very carefully and give these people a safeguard, that is in the case of people who have been given a direction who think a genuine mistake has been made and that the Treasury have paid consideration to what they think should not have been considered. They should have the opportunity to appeal to some impartial person or body, like the Special or General Commissioners, to decide. For these reasons, I support this Amendment.
    Mr. Turner-Samuels: Two objections have been levelled against this Clause, the second of which, I think, was the stronger of the two, although I do not agree with either. The first was that this particular Subsection was probably retrospective and that that was objectionable, and the second was that there ought to be tests adumbrated and defined with regard to the question of residence. Let me deal with the first objection. I was rather surprised to hear the right hon. and learned Member for Hillhead (Mr. J. S. C. Reid) suggest that this Clause might be of a retrospective character. There is a very well known rule, with regard to legislation, that a provision is not to be construed as retrospective unless it deals with
    864
    some procedural machinery. Where there are rights that have been previously vested, rights of any character at all, they cannot be retrospective unless it expressly says so. This would particularly apply to a case where a crime or a penalty was involved. The position in our law is beyond doubt: this sort of legislation cannot be retrospective unless it expressly says so. That is an absolute rule of construction, and I was, therefore, very surprised to hear what the right hon. and learned Gentleman opposite said. After all, he is a very eminent lawyer. I think we can put this question of retrospectivity entirely out of our minds, because I do not think the contention is at all valid.
    I now answer the second objection to the Clause. I agree that, prima facie, when you are making the question of residence or not a condition on which criminal charges are to succeed or not, then the question of having some test is a very serious matter. In the ordinary way, say in the case of Income Tax, it is a comparatively easy matter because, geographically, you have it in your own country. I can see that in the permutations and ramifications of this Bill it may well be that you may get residence even where the person is not in this country. It would be most difficult to try and exhaust the illustrations or categories under which the question of residence is to be established or defined. That would mean that if you attempted a definition or stated tests the very person or persons you are after would be provided with the loophole you are anxious to avoid. That would defeat one of the main purposes of the Bill.
    I agree that this is a serious and important matter, but the only practical thing that we can do is that which is prescribed by this Clause. It states that in any case where it is intended to determine the question of residence of a particular person the Treasury will issue directions saying whether, in the particular circumstances, that person is to be regarded as being resident or non-resident here. That seems reasonable and sensible. It seeks to set out and deal with the specific circumstances of the case which is before the Treasury, who will say, "Looking at these circumstances it is clear that this case is within purpose of the Act. If they are not so determined, this man would be defeating the Act." Therefore, the Treasury make a direction

    865
    which will embrace and satisfy the conditions of residence and, in those circumstances, that is the only practical provision that can be made in a matter of this kind.
    Mr. J. Foster: Would the hon. and learned Gentleman assume for a moment that the Treasury are wrong, that they give a wrong direction, that they are wrong in saying that a man is resident in this country when he is, in fact, resident in the United States? Will he assume (a) that he is prosecuted, and (b) that he is trying to do something which only a nonresident should do? Will the hon. and learned Gentleman say what will happen?
    8.45 p.m.
    Mr. Turner-Samuels: I am not going to presume that the present occupants of the Treasury Bench could possibly be wrong. But for the sake of argument, supposing this were so, then of course a man would have such rights as he is entitled to in the particular circumstances.
    Mr. Poster: What rights? He has no rights.
    Mr. Turner-Samuels: I do not accept that. In my submission, a man can make an application to court. He may be arrested and by a writ of habeas corpus, or by some remedy of that kind, he may make an application to the courts. It is clear to my mind that if a direction were given that this man was resident abroad, in obviously unsustainable circumstances, for the purpose of this Bill, he certainly would have his remedy in that respect. Whether that is so or not, is beside the point for which. I was contending, namely, that unless there is a provision of this kind in the Bill, it is absolutely impossible to exhaust by definition or stated tests the whole of the categories under which you can say a man was resident here or not resident. There may be exceptional circumstances, which may occur in only one particular case, and I say that it is impossible, if that is so, to do what this Amendment says and define the whole circumstances in the way indicated. In those circumstances, the only practical thing to do is what has been done
    Mr. H. Strauss: It is difficult, I know, for lawyers who have studied this subject to make quite clear to those who have not.
    866
    exactly how shocking this Clause is, as it now stands. The learned Solicitor-General deals with this matter with so much apparent reason, and so much charm and courtesy, that when he is talking what is very nearly nonsense that fact is overlooked. The hon. Member for Northwich (Mr. Foster), as has been said by the hon. and learned Member for Gloucester (Mr. Turner-Samuels), is a great authority on the subject on which he has just been addressing the Committee. But let us look at what this Clause does. It enables the Treasury to decide controversial questions of fact and of law and to decide them finally on their own ipse dixit. The hon. and learned Member for Gloucester was, in my submission, wholly wrong in his reply to my hon. Friend when he suggested that, if the Treasury made a complete mistake, and said that a man was resident somewhere where he was clearly not resident, there would be some remedy for the person wrongly dealt with. I thought it proper, when Clause 35 was before the Committee to draw the Solicitor-General's attention to the Clause which we are now considering, because I thought that it affected his argument even there. I see nothing impossible, under this Clause as it now stands, in the Treasury making a declaration that the whole of the Australian Cabinet are resident in England. I should be interested to know from whoever is to reply for the Government, where one finds any prohibition against such an action being taken, which would quite clearly affect the Statute of Westminster.
    A question has been raised on which I, as a lawyer, should have some hesitation in expressing an opinion, namely, whether this Clause is retrospective or not The Solicitor-General says that, in his opinion, it is not; and my right hon. and learned Friend the Member for Hillhead (Mr. Reid) thought that it was at least arguable that it is For my own part, in dealing with two such eminent authorities, I shall not express any view, but I will assume that the Solicitor-General is right. I am going to assume in his favour that this Clause is not retrospective; but the direction of the Treasury, even if it is not retrospective, acts presumably from the moment it is given, whether anybody is aware of it or not I wonder whether the hon. and learned Gentleman the Solicitor- General has considered how that would affect a

    867
    gentleman giving legal advice on a matter under Clause 29. Under that Clause, which deals with settlements and with residence at the time of the making of the settlement, how on earth is anybody to give any advice with any confidence if he is ignorant of what directions the Treasury may just have given, even if the Solicitor-General is right and the directions are not retrospective?
    Of course, everybody who has practised in the courts knows well that the question of residence is a matter that the courts often have to consider, both as regards fact and as regards law. I remember in my own experience once having been sent to Berlin to cross-examine a gentleman on commission to find out where he was resident on 10th January, 1920, the date on which the peace treaty came into force, because that was the great question at issue. The courts frequently under past treaties, and quite possibly under the treaties that will result from the late war, have to consider questions of residence. Are we really to take entirely out of the purview of our courts both the principles on which residence has to be decided, and also the facts of the individual case? Residence is, of course, different from domicile. I believe the generally accepted definition, if my memory is correct, is that residence means habitual presence; but that involves questions of fact, and is it really to be said that the Treasury should be entitled to take arbitrary and unfettered action?
    I venture to make a prophecy—I may be wrong. If the Government Front Bench are adamant in this Committee, they may find themselves thrown over in another place, when the Lord Chancellor brings his legal acumen to bear on this subject. I am sure that right hon. Gentlemen, if they consider the matter, will realise that the principle should be made certain and declared in the Bill, and that some tribunal should decide whether an individual man does or does not come within the description. Unless that is done, clearly injustice may be caused. The only argument of the Solicitor-General is that what has been put in the Bill is administratively convenient. Tyranny is often convenient, and arbitrary tyranny may be most convenient, but the point is that it is monstrous, and unworthy of a civilised country.
    The Solicitor-General: When I spoke before on this Amendment, I was endeavouring to meet the argument which had been adduced by the right hon. and learned Gentleman the Member for Hill-head (Mr. J. S. C. Reid), that this was a monstrous Clause because it was retrospective. That position I now perceive has been abandoned by hon. Gentlemen opposite, so that the door can be closed on that type of argument. The hon. Member for Northwich (Mr. J. Foster) adduced quite different arguments. He asked me whether I thought there was any merit in them, and if I may say so without any presumption, I thought there was great merit in many of his arguments. I think he made a strong case for the Clause as it stands. In the Clause as it stands, as has been pointed out, there is a difficulty of defining whether any individual is resident or not. It is, however, for the convenience of persons affected, and to denounce it as a kind of tyranny is so wide of the mark that it seems to me to approach the description that the hon. and learned Member for the Combined English Universities (Mr. H. Strauss) applied to my own argument.
    The hon. Member for Northwich asked was there any provision in the Bill to define residence at a date anterior to that, on which the declaration is made. I replied there was not, and he said that there would be difficulty over that. That is a point in which there is some substance, but it is not so forcible as it appears at first sight, because the Defence Regulations had almost a precisely similar provision in them. I am not using it as an argument that because it was in the Defence Regulations, it should be in this Bill, but I am using it to show, in point of fact, a great many people—I do not know whether numerically they comprise a greater part of the number concerned—have already had their accounts classified by reference to their residence under this Defence Regulation. So, with regard to the point made by the hon. Member for Northwich, a great many of these persons have banking accounts and have classifications as to residence because of those banking accounts. That will lessen considerably the force of his argument but I do not want to brush it aside with disrespect.
    He went on to say that at least there should be something in the nature of a

    869
    definition of residence. He told us that residence was a term difficult to define, and he said it might be understood in different ways and under different connotations. In fact, it is a term well understood in the commercial world. It is used constantly, and it has a generally accepted meaning, which all businessmen would readily understand. It is a question, therefore—and I do not want to be dogmatic or pigheaded about it—whether it is not better to leave it as it is, rather than define it.
    The Amendment does not suggest a definition. If it had, we should have considered it. I would readily now consider a definition, and if it seemed to my untutored judgment, an improvement on the Clause, I would be prepared to consider whether it ought to be accepted. However, my own feeling about it—and I ask the Committee to say that it is not an unreasonable view—is that there has been difficulty in regard to definition and "residence" being a term readily understood in the commercial world, it is better to leave it as it stands in the Bill. That is the conclusion we arrived at in preparing the Bill to be submitted to this House. Having regard to the difficulty of combining in a definition all that goes to make up the meaning of the word "residence" it was thought better not to attempt a definition. It has already worked under a Defence Regulation. I quite agree that those were wartime regulations—
    Mr. Stanley: Was there a definition under those regulations?
    9.0 p.m.
    The Solicitor-General: No, there was no definition, but the provision was used in the Defence Regulation. I do not want to press that argument further, except to say that there is a case in which it worked, on the whole satisfactorily during the six years that the regulations were in force. In all the circumstances, we felt it better to leave it as it is, but as I say, we do not want to be pigheaded or dogmatic about it. We would listen with attention to arguments from the opposite side of the Committee, as well as from my hon. Friends, on any definition that was proposed. None has been proposed, but if one were put forward we would consider it—I do not say that we would accept it—and see if we could, by using it, improve the wording of the Clause. But,
    870
    having heard the arguments I, personally, feel convinced, and I urge upon the Committee the view, that a definition would not improve the subparagraph and that as it stands it will serve a more useful purpose.
    The very doubt which a number of people will feel with regard to their residence can be resolved for them by a simple administrative act. The hon. Member for Northwich says there will be no appeal against the declaration made by the Treasury. That is true, but on the other hand I would remind the Committee that in all cases which go to arbitration there is, on a question of fact, ho appeal. The arbitrator's decision on a question of fact, so long as he does not misdirect himself in law, is final and conclusive. Here the circumstances are not the same but they are not so wholly different as to make them unworthy to be taken into account. The Treasury, in a case of doubt, can declare that a person who has not hitherto had his residence declared may ask that it should be declared for them. Admittedly, there is no appeal, but on the other hand, Clause 37 gives power to the Treasury to revoke, alter or vary their decision at any moment, and they will not behave as unreasonably as all that, if a person whose residence has been declared, comes to them and says that it is a mistake. They have full power to admit their mistake and alter the declaration. The matter should not remain in the air to be declared ultimately by some court or other. The thing has worked perfectly well, and is designed to advance the convenience of those concerned. I hope I have dispelled the argument based upon the view that this was oppressive and ex post facto. I still have an open mind on the point, but I have heard no case made out for a definition; no definition is suggested in the Amendment, and for those reasons, I ask the Committee to say that the Clause had better stand as it is.
    Mr. J. S. C. Reid: Any doubt which I had as to whether we ought to press this Amendment has been removed by the Solicitor-General's last speech. I have seldom heard such a curious argument from a lawyer. The hon. and learned Gentleman says that the word "residence" is readily understood, but can be neither defined nor interpreted. Coming from a lawyer, that does seem to me to be very curious. Then he says that

    871
    if there is to be a definition, it is the duty of the Opposition to draft Bills for His Majesty's Government because they cannot do it themselves. I am not going to press the point about retrospective effect, since I am not altogether clear about it, but the Solicitor-General has not tried to meet any of the other points which were raised. A system is to be built up here under which there is nothing said in advance of the grounds on which judgment will be given. When judgment is given no reason is advanced and no appeal can be taken. Anything more remote from our idea of everyone being equal before the law, and know-

    Division No. 32.

    AYES

    9.5 p.m.

    Adams, Richard (Balham)

    Davies, Edward (Burslem)

    Hoy, J.

    Adams, W. T. (Hammersmith, South)

    Davies, Ernest (Enfield)

    Hughes, Hector (Aberdeen, N.)

    Allen, A. C. (Bosworth)

    Oaviet, Harold (Leek)

    Hughes, H. D. (Wolverhampton, W.)

    Allen, Scholefield (Crewe)

    Davies, Hadyn (St. Pancras, S.W.)

    Hutchinson, H. L. (Rusholme)

    Alpass, J. H.

    Davies, R. J. (Westhoughton)

    Hynd, H. (Hackney, C.)

    Anderson, F. (Whitehaven)

    Davies, S. O. (Merthyr)

    Hynd, J. D. (Attercliffe)

    Attewell, H. C.

    Deer, G.

    Irving, W. J.

    Austin, H. L.

    Diamond, J

    Isaacs, Rt. Hon. G. A.

    Awbery, S. S.

    Dobbie, W.

    Jay, D. P. T.

    Ayles, W. H.

    Dodds, N. N.

    Jeger, G. (Winchester)

    Ayrton Gould, Mrs. B.

    Donovan, T.

    Jones, D T. (Hartlepools)

    Bacon, Miss A.

    Driberg, T. E. N.

    Jones, J. H. (Bolton)

    Baird, J.

    Dugdale, J. (W Bromwich)

    Jones, P Asterley (Hitchin)

    Balfour, A.

    Dye, S.

    Keenan, W.

    Barstow, P. G.

    Ede, Rt. Hon. J. C.

    Kenyon, C

    Barton, C.

    Edwards, A. (Middlesbrough, E.)

    Key, C. W.

    Battley, J. R.

    Edwards, John (Blackburn)

    Kingdom, Sqn.-Ldr. E.

    Bechervaise, A. E.

    Edwards, N. (Caerphilly)

    Kinley, J.

    Bellinger, Rt. Hon. F. J.

    Edwards, W. J. (Whitechapel)

    Kirby, B. V.

    Benson, G.

    Evans, E. (Lowestoft)

    Lang, G.

    Berry, H.

    Evans, S. N. (Wednesbury)

    Layers, S.

    Bing, G. H. C.

    Ewart, R.

    Lawson, Rt. Hon. J. J.

    Binns, J.

    Farthing, W. J.

    Leslie, J. R.

    Blackburn, A. R.

    Fletcher, E. G. M. (Islington, E.)

    Levy, B. W.

    Blenkinsop, A.

    Follick, M.

    Lewis, J. (Bolton)

    Blyton, W. R.

    Foot, M. M.

    Lindgren, G. S.

    Boardman, H.

    Fraser, T. (Hamilton)

    Lipson, D. L

    Bowden, Flg.-Offr. H. W.

    Gaitskell, H. T. N.

    Lipton, Lt.-Col. M.

    Bowles, F. G. (Nuneaton)

    Ganley, Mrs. C. S.

    Longden, F.

    Braddook, Mrs. E. M. (L'pl, Exch'ge)

    Gibson, C. W.

    Lyne, A. W.

    Braddock, T. (Mitcham)

    Gilzean, A.

    McAdam, W.

    Bramall, Major E A.

    Glanville, J. E (consett)

    McEntee, V. La T

    Brook, D. (Halifax)

    Gooch, E. G.

    McGhee, H. G.

    Brown, T. J. (Ince)

    Goodrich, H. E.

    Mack, J. D.

    Bruce Maj. D. W. T.

    Gordon-Walker, P. C.

    McKay, J. (Wallsend)

    Burke, W. A.

    Greenwood, A. W. J. (Heywood)

    Mackay, R. W. G. (Hull, N.W.)

    Callaghan, James

    Grenfell, D. R

    McLeavy, F.

    Castle, Mrs. B. A.

    Grey, C. F.

    MacMillan, M. K. (Western Isles)

    Chamberlain, R. A

    Grierson, E.

    McNeil, Rt. Hon. H.

    Champion, A. J.

    Griffiths, D (Rolher Valley)

    Macpherson, T. (Romford)

    Chater, D.

    Gunter, R. J.

    Mainwaring, W. H

    Chetwynd, G. R.

    Guy, W. H.

    Mallalieu, J. P. W.

    Clitherow, Dr. R

    Haire, John E. (Wycombe)

    Manning, Mrs. L. (Epping)

    Cluse, W. S.

    Hale, Leslie

    Marquand, H. A.

    Cobb, F. A.

    Hall, W. G.

    Mathers, G

    Cocks, F. S.

    Hamilton, Lieut.-Col. R

    Mayhew, C. P

    Coldrick, W.

    Hannan, W. (Haryhill)

    Medland, H. M.

    Collick, P.

    Hardy, E. A.

    Mellish, R. J.

    Colman, Miss G. M.

    Harrison, J.

    Messer, F

    Comyns, Dr. L.

    Hastings, Dr. Somerville

    Middleton, Mrs. L

    Cooper, Wing-Comdr. G.

    Henderson, A. (Kingswinford)

    Mitchison, Maj. G. R.

    Corbet, Mrs. F. K. (Camb'well, N.W)

    Henderson, Joseph (Ardwick)

    Monslow, W

    Corlett, Dr. J.

    Hewitson, Capt M.

    Moody, A. S.

    Cove, W. G.

    Hobson, C. R.

    Morgan, Dr. H. B.

    Crossman, R H. S.

    Holman, P.

    Morris, P. (Swansea, W.)

    Daggar, G.

    Holmes, H. E. (Hemsworth)

    Morrison, Rt. Hon. H. (Lewisham, E.)

    Daines, P.

    Horabin, T. L.

    Mort, D. L

    Dalton, Rt. Hon. H.

    House, G.

    Moyle, A.

    ing what the law is, I find hard to imagine. This is pure administration—decisions taken not necessarily in the light of the circumstances but in the light of what the Treasury would like to see with regard to a particular person's financial transactions. We cannot possibly accept criteria of that sort for the administration of an Act of Parliament, and I feel that we must therefore support our Amendment in the Division Lobby.
    Question put, "That the words proposed to be left out stand part of the Clause."
    The Committee divided: Ayes, 272; Noes, 101.

    Naylor, T. E.

    Sargood, R.

    Ungoed-Thomas, L.

    Nichol, Mrs. M. E. (Bradford, N.)

    Scollan, T.

    Usborne, Henry

    Nicholls, H. R. (Stratford)

    Scott-Elliot, W.

    Viant, S. P.

    Noel-Baker, Capt. F. E. (Brentford)

    Shackleton, Wing-Cdr. E. A. A.

    Walkden, E.

    Noel-Baker, Rt. Hon. P. J. (Derby)

    Sharp, Granville

    Walker, G. H.

    Noel-Buxton, Lady.

    Shurmer, P.

    Wallace, G. D. (Chislehurst)

    Oldfield, W. H.

    Silverman, J. (Erdington)

    Wallace, H. W. (Walthamstow, E.)

    Oliver, G H.

    Silverman, S. S. (Nelson)

    Webb, M. (Bradford, C.)

    Paget, R. T.

    Simmons, C. J.

    Weitzman, D.

    Paling, Rt. Hon. Wilfred (Wentworth)

    Skeffington-Lodge, T. C.

    Wells, W. T. (Walsall)

    Pargiter, G. A.

    Smith, C. (Colchester)

    West, D. G.

    Parker, J.

    Smith, H. N. (Nottingham, S.)

    Westwood, Rt. Hon. J.

    Parkin, B. T.

    Smith, S. H. (Hull, S.W.)

    White, C. F. (Derbyshire, W.)

    Paton, Mrs. F. (Rushcliffe)

    Snow, Capt. J. W.

    White, H. (Derbyshire, N.E.)

    Paton, J. (Norwich)

    Solley, L. J.

    Whiteley, Rt. Hon. W.

    Pearson, A

    Sorensen, R. W.

    Wigg, Col. G. E.

    Peart, Capt. T. F.

    Soskice, Maj. Sir F.

    Wilkes, L.

    Perrins, W.

    Sparks, J. A.

    Wilkins, W. A.

    Poole, Major Cecil (Lichfield)

    Stamford, W.

    Willey, O. G. (Cleveland)

    Porter, E. (Warrington)

    Steele, T.

    Williams, D. J. (Neath)

    Porter, G. (Leeds)

    Stephen, C.

    Williams, J. L. (Kelvingrove)

    Proctor, W. T.

    Stewart, Capt. Michael (Fulham, E.)

    Williams, W. R. (Heston)

    Pursey, Cmdr. H.

    Strauss, G. R. (Lambeth, N.)

    Willis, E.

    Randall, H. E.

    Stubbs, A. E.

    Wills, Mrs. E. A.

    Ranger, J.

    Symonds, A. L.

    Wise, Major F. J.

    Rankin, J.

    Taylor, H. B. (Mansfield)

    Woods, G. S.

    Rees-Williams, D. R.

    Taylor, R. J. (Morpeth)

    Wyatt, W.

    Reeves, J.

    Taylor, Dr. S. (Barnet)

    Yates, V. F.

    Reid, T. (Swindon)

    Thomas, John R. (Dover)

    Young, Sir R. (Newton)

    Rhodes, H.

    Thomas, George (Cardiff)

    Zilliacus, K.

    Robens, A.

    Thorneycroft, Harry (Clayton)

    Roberts, Goronwy (Caernarvonshire)

    Tiffany, S.

    TELLERS FOR THE AYES:

    Robertson, J. J. (Berwick)

    Tolley, L.

    Mr. Collindridge and

    Royle, C.

    Turner-Samuels, M.

    Mr. Popplewell.

    NOES.

    Agnew, Cmdr. P. G.

    Gage, C.

    Peto, Brig. C. H. M.

    Assheton, Rt. Hon. R.

    George, Maj. Rt. Hon. G. Lloyd (P'ke)

    Pitman, I. J.

    Astor, Hon. M.

    Gomme-Duncan, Col. A. G.

    Prescott, Stanley

    Baldwin, A. E.

    Grant, Lady

    Price-White, Lt.-Col. D.

    Barlow, Sir J.

    Gridley, Sir A.

    Prior-Palmer, Brig. O.

    Beamish, Maj. T, V. H.

    Hare, Hon. J. H. (Woodbridge)

    Rayner, Brig. R.

    Beechman, N. A.

    Harvey, Air-Comdre. A. V.

    Reed, Sir S. (Aylesbury)

    Birch, Nigel

    Hinchingbrooke, Viscount

    Reid, Rt. Hon. J. S. C. (Hillhead)

    Boles, Lt.-Col. D. C. (Wells)

    Holmes, Sir J. Stanley (Harwich)

    Roberts, H. (Handsworth)

    Boyd-Carpenter, J. A.

    Hope, Lord J.

    Robinson, Wing-Comdr. Roland

    Braithwaite, Lt.-Comdr. J. G.

    Hudson, Rt. Hon. R. S. (Southport)

    Salter, Rt. Hon. Sir J. A.

    Bromley-Davenport, Lt.-Col. W.

    Hulbert, Wing-Cdr. N. J.

    Sanderson, Sir F.

    Buchan-Hepburn, P. G. T.

    Hurd, A.

    Shepherd, W. S. (Bucklow)

    Butcher, H. W.

    Jennings, R.

    Spearman, A. C. M.

    Carson, E.

    Joynson-Hicks, Lt.-Cdr. Hon. L. W.

    Stanley, Rt. Hon. O.

    Channon, H.

    Lambert, Hon. G.

    Stoddart-Scott, Col. M

    Clifton-Brown, Lt.-Col. G.

    Legge-Bourke, Maj. E. A. H.

    Strauss, H. G. (English Universities)

    Conant, Maj. R. J. E.

    Lindsay, M. (Solihull)

    Sutcliffe, H.

    Cooper-Key, E. M.

    MacAndrew, Col. Sir C.

    Taylor, C. S. (Eastbourne)

    Corbett, Lieut.-Col. U. (Ludlow)

    Macdonald, Sir P. (Isle of Wight)

    Taylor, Vice-Adm. E. A. (P'dd't'n, S.)

    Crookshank, Capt. Rt. Hon. H. F. C

    Mackeson, Brig. H. R.

    Teeling, William

    Crosthwaite-Eyre, Col. O. E.

    Maclean, Brig. F. H. R. (Lancaster)

    Thomas, J. P. L. (Hereford)

    Cuthbert, W. N.

    Macmillan, Rt. Hon. Harold (Bromley)

    Thornton-Kemsley, C. N.

    Davidson, Viscountess

    Maitland, Comdr. J. W.

    Touche, G. C.

    De la Bère, R.

    Manningham-Buller, R. E.

    Turton, R. H.

    Digby, S. W.

    Marlowe, A. A. H.

    Walker-Smith, D.

    Dodds-Parker, A. D.

    Marshall, D. (Bodmin)

    Watt, Sir G. S. Harvie

    Dower, Lt.-Col. A. V. G. (Penrith)

    Marshall, S. H. (Sutton)

    Wheatley, Colonel M. J.

    Drewe, C.

    Mellor, Sir J.

    White, J. B. (Canterbury)

    Eccles, D. M.

    Morris-Jones, Sir H.

    Willoughby de Eresby, Lord

    Erroll, F. J.

    Morrison, Rt. Hon. W. S. (Cirencester)

    Winterton, Rt. Hon. Earl

    Fletcher, W. (Bury)

    Mott-Radclyffe, Maj. C. E.

    Foster, J. G. (Northwich)

    Neven-Spence, Sir B.

    TELLERS FOR THE NOES

    Fraser, Sir I. (Lonsdale)

    Nield, B. (Chester)

    Sir Arthur Young and

    Fyfe, Rt. Hon. Sir D. P. M.

    Noble, Comdr. A. H. P.

    Major Ramsay.

    Clause ordered to stand part of the Bill.

    CLAUSE 42.—(General provisions as to interpretation.)
    9.15 p.m.
    The Solicitor-General: I beg to move, in page 27, to leave out lines 44 to 46, and to insert:
    874
    "and includes—

    (a) any policy by which the payment of money is assured on death (except death by accident only) or the happening of any contingency dependent on human life; and

    (b) any policy securing the payment of an immediate annuity;

    and the reference in this definition to the occurrence of a specified event which is certain

    875
    to happen shall include the occurrence, which is certain to happen, of one of specified events none of which by itself is certain to happen."
    The definition of policies in the Clause is too narrow in that it does not include policies secured on contingencies which are virtually bound to happen, for example, contingencies such as the life of the particular individual. That is introduced by the first paragraph of the Amendment. Paragraph (b) deals with policies securing immediate annuities, which, as the definition stands at present, would not be included. It is really a drafting Amendment in that it simply enlarges the definition of policies, and brings within the purview of the definition policies which should clearly be included within it.
    Amendment agreed to
    Mr. Birch: I beg to move, in page 28, line 25, to leave out Subsection (2).
    My purpose in moving this Amendment is to ascertain the actual meaning of the Subsection. I have read it several times and have also asked two King's counsel, not of my party, exactly what it means and, so far, I have not had a very satisfactory answer. It may be very simple, but I should like to have a simple answer. The Subsection is 200 words long without a full stop, on the principle we always have in Bills, that the more complicated the matter, the longer the sentence. I would like to know the exact significance of the words in brackets in the first line, "however worded". Does that mean however badly drafted? I should also like to know what is meant by "specified attribute as to residence or otherwise". A minute ago we were fortunate enough to have the hon. and learned Member for Gloucester (Mr. Turner-Samuels) and the hon. Member for Thurrock (Mr. Solley) in the Committee and they, no doubt, would have explained it very lucidly, but as they are not here, it is left to the Solicitor-General. I hope he will not confine himself to saying that this provision will be readily understood in the commercial world?
    The Solicitor-General: The object of the Subsection is simply this: Where an obligation rests upon an individual, but can only be discharged by himself if he can act jointly with some other person, then each of the two persons shall be deemed to be under the obligation. It enables the
    876
    Treasury to prevent a species of evasion which otherwise would be quite easy if one person was able to say with regard to anything he was required to do that he could not do it except with the concurrence of some other person. If those two persons acting jointly can comply with the obligation, then each of them is under the obligation to do so, and each of them must do so. That is all the Subsection does. With regard to "specified attribute as to residence," that really means if he is resident in a particular place specified; if I may put it in rather loose and more colloquial language, if he has a particular residence qualification. That is translated into the more formal phrase "a specified attribute as to residence."
    Mr. Birch: And "however worded"?
    The Solicitor-General: Those words are simply introduced in order to make it perfectly clear that the Subsection applies to all parts of the Act. However the obligation is framed, if the wording which creates the obligation is such as to impose it upon persons who act jointly, whatever the phrase used, or the turn of expression, this Subsection is operative.
    Mr. H. Strauss: I think my hon. Friend the Member for Flint (Mr. Birch) was entitled to protest, and I hope that on the Report stage the Government will not be too proud to strike out "otherwise" and put in "any other matter," which I think is what they mean.
    Amendment negatived.
    Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."
    Mr. Eccles: May I ask where "unit trust scheme" comes into the Bill? I have read the Bill fairly carefully, and cannot find the phrase anywhere in the Bill. If so, why is it defined here?
    The Solicitor-General: If the hon. Member will look about five lines further up the page, he will see it. Is he satisfied?
    Mr. Eccles Mr. Eccles indicated assent.
    Question put, and agreed to.
    Clause, as amended, ordered to stand part of the Bill.

    CLAUSE 43.—(Extent.)
    Colonel Crosthwaite-Eyre: I beg to move, in page 29, line 21, to leave out Subsection (3).

    877
    There is a point on which I wish to ask an assurance from the Chancellor. The Government can apply all these powers and regulations. It is not my intention to challenge the right of the Government to do that. I think the position was made abundantly clear by the Lord Chancellor on the Civil Aviation Bill in another place. But it is my contention that unless special regard is paid to the Channel Islands respecting France, this Bill must bear very heavily upon them. The Chancellor will fully appreciate that the trading conditions between the Channel Islands and France are of a particular nature, and, unless any order applied under this Bill grants special relaxation to the Channel Islands in their local trade between themselves and Brittany, for example, there is bound to be considerable difficulty. All I ask for is a general assurance that this will be borne in mind.
    Mr. Dalton: Yes, I have no difficulty in giving that assurance.
    Amendment negatived.
    Clause ordered to stand part of the Bill.
    Clause 44 ordered to stand part of the Bill.

    NEW CLAUSE.—(Foreign travel.)
    Nothing in this Act shall prevent a person resident in the United Kingdom from acquiring foreign currency to be used solely for the purposes of bona fide travel abroad for periods not exceeding two months in any calendar year.—[Mr. Henry Strauss.]
    Brought up, and read the First time.
    Mr. H. Strauss: I beg to move, "That the Clause be read a Second time."
    This Clause is proposed in order to raise for discussion, and to enable the Chancellor of the Exchequer to make some statement on some specific points I put in my speech on the Second Reading. I confess at once that I must disclose a personal interest. If there is a thing I love above most things, it is foreign travel. I think it is a very serious step, if the Government take the right to prohibit foreign travel altogether. The right hon. Gentleman the Chancellor of the Exchequer said, in the very useful statement he made at an earlier stage of the proceedings, that that is not his intention, even in the serious times in which we find ourselves today. He is going to allow some foreign travel, but the amount he is to allow is quite arbitrary,
    878
    and, under the powers which he takes in this Bill, he could stop it altogether. I think that, unless overwhelming reasons are given in favour of taking such a power, it is a power which this Committee should not allow him to take. To prohibit foreign travel altogether would be lawful under this Bill.
    The first question I wish to put to the right hon. Gentleman is whether, in his opinion, it would also be proper under existing international agreements. That question is one of some importance. I do not wish to repeat what I said in the Second Reading Debate on the distinction between capital movements and current transactions. I think everybody is agreed that the Chancellor must have power at present—it may be that we differ as to the duration of the Statute—to control capital movements, but he should be a little chary about interfering with current transactions. In the international agreements, with which he is far more familiar, I suppose, than anybody else in the Committee, that distinction is constantly drawn, and indeed, in his speech on the Second Reading, he said it would be the task of the Treasury to draw it. The question I then raised was whether he was quite confident that, under the international agreements, he would have complete power to draw it as he wished, and that foreign nations night not have their own points of view. The criticism has been brought forward by the "Manchester Guardian," I think, and in other quarters, that in the view of many people, both in this country and in some foreign countries, bona fide foreign travel is a series of current transactions and is not a capital movement. In the answer which he gave in the Second Reading Debate, the right hon. Gentleman made the distinction, with which I completely agree, that if one goes abroad with 6d., that may be a current transaction, and that if one goes abroad with £60,000, that is clearly a capital movement.
    The interesting and difficult question arises when we consider the intermediate cases. I want to say that I am not questioning for one moment the right of the Chancellor of the Exchequer to take adequate precautions to see that the travel is bona fide foreign travel and is not a concealed capital movement. What I hold is that, on the face of this Statute, there should be a definite right to some foreign

    879
    travel. I should like to know the answer to the first question, whether it would be in accordance with international agreements to prohibit foreign travel altogether, which the Chancellor could undoubtedly do under the Bill as it now stands. But assuming that he said either that it would not be in accordance with international agreements, or that he has no intention of imposing such a prohibition, the next question I want to put is how he determines the amount. I feel that in this limitation to £75 per annum he is really being shortsighted and unwise. I give the right hon. Gentleman credit for his desire to do better, and I am sure his motive is genuine anxiety about our foreign exchange position.
    9.30 p.m.
    Nevertheless, I believe he is being shortsighted. I do not think he is taking sufficient notice of how much good can be done to the trade of this country by British citizens indulging in their natural proclivity for travel abroad, and making friends and inviting them to visit this country. He is wrong, I believe, in assuming that he can both stop British citizens travelling abroad and still induce great numbers of foreigners to visit this country. There must be reciprocity in this matter. If he were far more generous than he is at present and if indeed the only thing he sought to control were capital movement, and possibly the total duration of foreign travel for which facilities should be given, he would not, on balance, lose a penny.
    Let me point out, as I did shortly on the Second Reading, the arbitrary tyranny that his present policy involves. The right hon. Gentleman said at an earlier stage this afternoon that he would rather limit people in their foreign travel than limit the importation of food. He put his point in a way that I agree was legitimate, and I agree that, if so put, the argument has great force. When he talks about food, he is talking about a necessity: when he is talking about tobacco or American films, he is not. A thing which certainly shocked me, and I think I am not alone in the matter, was the way in which we have spent so much of the American dollar loan—
    The Chairman: That question certainly does not arise in connection with this matter.
    Mr. Strauss: With respect, I bow to your Ruling. I think I can argue the relative propriety. I think I can say that, if the importation of American films is allowed, then a fortiori foreign travel should be allowed. I know of no criterion whatsoever by which the right hon. Gentleman can say that the importation of trash from Hollywood is a necessity but any indulgence in foreign travel is a luxury. I might say the same about tobacco but I will not develop that except to say that I should like to know what is the criterion. Of course, the right hon. Gentleman can say, "I am not considering merits. What I am considering is the possibility of riots. If I stopped or limited the tobacco, I should be swept from power, whereas those who wish to travel abroad are so much fewer in number that I can afford to deal with them without any regard whatsoever to the merits of the case." That is an answer of sorts, but I do not think it is one that reflects much credit on the Government, nor do I think it is one which does justice to the people of this country.
    The people of this country, of all classes, are becoming increasingly anxious to take their holidays abroad, so far as possible, to enlarge their outlook, and to learn more about other countries. I believe that demand is very general and I should like there to be something on the face of this statute to show that, at least, the men and women who wish to indulge in foreign travel, or to recover their health abroad, are quite as deserving of consideration as the men and women who clamour for the bilge from Hollywood. I hope that the right hon. Gentleman will treat this Amendment sympathetically. It may not be elegantly drawn and I want to make it perfectly clear that its purpose is not to enable foreign travel facilities to be used for transferring capital abroad. Nor do I want to say anything to suggest that, in these times of stringency, anybody can command facilities for unlimited travel abroad. They ought to be able to demand some travel abroad, and, in considering how much, the Chancellor of the Exchequer should treat people with equality and should not attach more importance to one set of desires than to others.
    In conclusion, I would repeat that, if the Chancellor really encourages the sort of travel which I want, and for which the

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    Foreign Secretary has repeatedly expressed his own sympathy, he will not, on balance, lose one penny for his country. In the past, our travellers abroad have built up friendship and prestige for this country, and they are capable of doing that today.
    Sir Henry Morris-Jones: I wish to support the new Clause, and I hope that the Chancellor will look upon it with benevolence and kindness. There is much more than finance involved in it. The people of this country have, for something like seven years, been living in conditions very much like those of a fortress. Up to a year ago, not half of one per cent. of the people of this country had an opportunity of leaving this island. In the last year a larger number have had the opportunity of doing so, and many took advantage of it. Foreign travel is a great benefit to the people concerned. We are given to understand from statistics received from the Minister of Health that, so far as diseases in this country are concerned, the health of the people, on the whole, has sustained itself very well. I have no doubt it can be argued that the health of the people has been maintained owing to the very able work of the Minister of Health and of the medical and nursing professions of this country. But there is no doubt that the physical health of the people of this country has deteriorated. It would be a very good policy on the part of the right hon. Gentleman to help the recovery of that physical health. I believe that he would be making an investment for the Labour Government if he were to encourage a little more travel abroad. People would come home with a fillip which would be a tonic for them and might help them to put up with a Labour Government for a little longer than they otherwise would.
    There is no doubt that the elderly people of this country, those in the 60s and 70s, are having great difficulty with the rationing, particularly the reduction in the milk supply, and are at present suffering a great strain. There is a further source of strain in the limitation of their income which has been brought about by the Government in the new Transport Bill. They want to have the opportunity of spending their limited resources to the very best advantage. I ask the right hon. Gentleman to give careful consideration to this proposed Clause. I can think of no reason why persons
    882
    resident in the United Kingdom should not acquire foreign currency for the purpose of travelling abroad for periods up to two months, and I am sure that the morale of the people generally would benefit if they were allowed to do so.
    Mr. Dalton: I am very fond of foreign travel when circumstances are such that I can indulge in it, but nonetheless I do not feel that I can accept this proposed new Clause, admirable though its intentions are. Two months is a long time for a hard working person to be out of the country. Taking the proposed Clause as it stands—I will say something of a more general nature in a moment—I do not think that two months is a period which we should encourage people to spend travelling abroad in ordinary cases. In exceptional cases, perhaps, we should. [An HON. MEMBER: "Why?"] Because they ought to be working in this country, helping production. Taking the matter on more general grounds, £75 is not a fixed or final sum. It is the maximum which, having regard to all the many claims upon our foreign exchange resources, we feel can be given in the ordinary case. Of course, there are cases now in which a great deal more than this is allowed, as the Committee will, no doubt, appreciate. The businessman travelling on bona fide business, as distinct from bona fide pleasure travel, can draw up to £10 a day now. There is no fixed rigid amount. He has to show that he is engaged on business likely to help the trade of the country, and we have to form our best views on that matter. [Interruption.] Is that point challenged?
    Mr. Stanley: No.
    Mr. Dalton: After all, we must not be too serious about this. People who are really ill and who think the medical professions in this country cannot cure them, are entitled to go abroad and take counsel with Swiss or other foreign physicians, and they may stay away indefinitely, provided a reasonable case is made, and the entire cost while they are under treatment can be met. We make that allowance for health cases, and we make special allotments also for school children going to foreign schools, young people wishing to learn foreign languages, undergraduates attending foreign universities and post graduate research students. All such cases are outside the limitation of £75.

    883
    In short, the limitation of £75 applies only to those people who go abroad for any other reason than the practical and utilitarian reasons to which I have referred. I think £75 is a reasonable sum. Taking the level of incomes in this country—and here I approach one of the points raised by the hon. and learned Member for the Combined English Universities (Mr. H. Strauss)—I do not think many people can take much more than £75 out of their current incomes for a foreign holiday. Therefore, when one goes above £75 one begins to draw upon capital, and this is part of the answer to the question raised by the hon. and learned Gentleman. Having regard to the average level of incomes, for the great majority of people a sum greater than £75 must mean a draft upon such capital resources and savings as they have.
    This is where we begin to be able to draw a practical distinction between capital and current transfers. Although I agree the thing cannot be put with complete exactitude, and varies from one income group to another, and so on, I think £75 is within the reasonable limit for current transactions, and when it gets above that it would be excessive for most people. In fact, I am told the average sum spent on foreign travel recently has been only just over £50; that is to say, well below the maximum allowance. I am also informed, though I cannot give particulars, that other countries which are imposing exchange control just now in many cases impose a lower figure than the £75 which we allow.
    9.45 p.m.
    I say frankly, I would like to see an increase as soon as we can give it. But, balancing one thing against another, I do not think we ought to go beyond the present limit now. I certainly could not agree to enshrining unaltered in this Bill such a human right as is here set down in the proposed Clause. As to whether we may, without breaching international conventions, do it, my advice is that we can. This is a matter on which lawyers, who are always ingenious, could no doubt put up a case both ways. However, I am advised that we can. I am advised that we are not only entitled to do it under the distinction, of which I have already spoken, between current and capital movement, but I am advised also
    884
    that it is proper to look upon foreign travel as an invisible import. We speak of tourist travel in this country as invisible exports—that is the jargon, which has a meaning of sorts—and in the same way we can speak of foreign travel, people from this country going to foreign countries, as a form of invisible imports. The foreign exchange used by our travellers abroad does compete with the foreign exchange used for the ordinary purposes of importation.
    I did say just now that I thought on the whole more fruit was more important than more foreign travel. The hon. and learned Member for the Combined English Universities asked what about films and tobacco? Your predecessor, Mr. Deputy-Chairman, ruled that that was not in Order, so I would not be in Order in answering it. I think the hon. and learned Gentleman was thought to be in Order in doing no more than mentioning these matters, so I will answer it—hoping that I just keep in Order—by saying that we have to balance the whole programme. It does so happen that there are more people in this country who like going to see American films, in default of good British films. We hope that ultimately that defect will be remedied. It also happens that those people who prefer to go to see American films, if they cannot see good British films like to smoke. More people like going to see those American films than can afford to spend more than £75 on foreign travel. That is the consequence of the distribution of wealth and the habits of our people. Therefore, if we have to choose—and for the moment we have to, owing to the scarcity of our means; though later on perhaps we shall be able to choose both and not one—we must say that most people prefer the films and the tobacco, not to speak of the fruit, to foreign travel which they could not afford on the scale proposed by the hon. and learned Gentleman.
    Invisible imports, as we may call foreign travel, are legitimate to be controlled in the same way as visible imports, provided—and this is where we reach the other side of the international obligations—there is no specific discrimination otherwise than is permitted. The field of Empire preference would be quite out of Order. Apart from discriminations of that sort, which are legitimate, there is limited discrimination, by people saying

    885
    "Why not more limited spending in France, so long as we do not want to spend more in North America?" There I think we would be open to serious criticism. In that respect we have had representations. When we altered the foreign travel allowance from £100, inclusive of travel, which it was some little while ago, to £75, we thought we might make it available for France and certain other European countries. Then we asked ourselves, if it was made available for France and those other European countries, why not for North America? When I say "North America" I include, of course, the United States and the Dominion of Canada. We could not refuse to do the same thing for North America as we planned to do for France and the other European countries, and fixed it at £75 for every country. Therefore, I say that on the grounds of import control we are entitled to exercise this discrimination, in addition to the right that we have to exercise it on the ground of current transactions.
    Finally, I have only two things to say. One is that, of course, it will not be forgotten by the Committee that this figure of £75 as it is now, does not include the cost of return travel, of a return journey, whether by sea and rail, or air. It docs not include the cost of the return journey there and back to whatever is the farthest point to be reached on the course of the journey. If, for example, one were proceeding to Italy, one would be quite entitled, if proceeding by stages to the Island of Sicily, and passing through Florence and Rome on the way, to take a ticket for an air passage, or for whatever means of travel one chose, to and from Palermo in Sicily, and that would stand outside the £75.
    In the second place, I do ask—and the hon. Member for Denbigh (Sir H. Morris-Jones), particularly—not to think too poorly of these little islands. North Wales, they tell me, is very rich in beauty. I do not know whether the hon. Gentleman would agree, but why should not more people find solace on the slopes of Snow-den or Cader Idris, from which the Marines are just retiring, due to the pressure exercised by the people of Bar-mouth? There are little places in Cornwall, too, and up in Scotland. Scotland is one of the undiscovered paradises to the Sassenach. I mention this, not only to
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    inspire a sense of local patriotism in the minds of some of those who, after this is pointed out to them, will not, I hope, press this new Clause to a division—
    Captain Crookshank: Why did so many Ministers go to Switzerland?
    Mr. Dalton: I went to Scotland. We do not interfere for the sake of interference in this Government. It may have been otherwise at another time. And the Swiss were quite embarrassed—
    Captain Crookshank: I bet they were.
    Mr. Dalton: They were. They made official representations to that effect. Certainly, they have been embarrassed, that too many people have been taking holidays in Switzerland. Now we have to try to adjust that, and I venture to say that Scotland should not be wholly ignored. I had not been there, personally, for some time, but I greatly enjoyed my visit to Scotland, and I hope that others will do the same. During the period when foreign exchange is so tight, there is no reason why Scots' change should not be a little bit looser. Why should people not take the opportunity to find out something about the beautiful parts of our islands? I hope that that will be some solace to travellers, if we reject, as we must, this proposed Clause. When better days come we shall, I hope, be able to widen the range of foreign travel. In any case, I could not accept the new Clause in this form.
    Mr. H. Strauss: I profoundly agree with the right hon. Gentleman about the beauty of Scotland and Wales; but, surely, that is an asset to attract foreign visitors to these islands, and he said that he wanted them to come. But there would not be room for foreign visitors to go to Scotland, if we all went there, too.
    Mr. H. Roberts: It is a little unfortunate that the Chancellor of the Exchequer introduces levity into this discussion. I am what is called a stationary man. I have travelled abroad very little; in fact I do not think I have been out of Great Britain since 1937, and for my part, I require no lectures to induce me to view the beauties of North Wales—or, I may add, the greater beauties of South Wales. But the amount of currency which is required—
    The Deputy-Chairman (Mr. Hubert Beaumont): Perhaps I was too lenient with the Chancellor of the Exchequer. It seems to me that we are on to a discussion of "See Britain first." Only the proposed new Clause can now be discussed.
    Mr. H. Roberts: I accept the rebuke which you have administered to the Chancellor of the Exchequer, Mr. Deputy-Chairman. As I was saying, the amount of foreign currency required for this purpose is not known to me, but it is known to the right hon. Gentleman. The amount of currency required for other purposes is also known, but it is not disclosed; instead we are presented with the choice between foreign travel and food, as if they were alternatives, with no figures to back it. We are also told, and of course it is quite true, that foreign travel of any kind is an invisible import. That I accept at once, but I do not accept the view that above £75 we are encroaching on capital. I charge the Chancellor with undutiful behaviour to that old teacher of his who taught him that there is no particular sanctity about the revolution of the earth around the sun; he should remember that, and realise that if he made it two years instead of one, that would not necessarily make it a charge on capital.
    There is another important side to this which should not be overlooked. I think the effect on the prestige of Germany between the wars of the very heavy rationing of foreign travel was bad. It marked Germany as an impoverished country. That may be no disgrace, but the legend of the rich Englishman has been good for our prestige for a very long time. It is not good for trade, or for showing the flag, that we should pass a Statute which enables the Treasury, in effect, to put a complete embargo on foreign travel. I think it is unfortunate that we should be asked to do it, and it is still more unfortunate that the case should be supported by arguments of such levity as those we have heard.
    Sir H. Morris-Jones: The right hon. Gentleman made a statement which will be within the recollection of the Committee—if I have got it wrong he will correct me—that sick people are, at the moment, allowed to travel abroad. There are several cases within my knowledge in which the Bank of England definitely
    888
    refused facilities for sick people to receive sufficient foreign currency to leave this country, in order to secure something which may not be available here. There are certain things available in some countries, which are not available in others, certain waters, for instance, at some of the spas in some foreign countries are not available in this country. I know of cases in which the Bank of England have not given permits for foreign travel under those conditions. I would also like to bring to his notice the fact that there are many people who do not come in any special category of illness, but who are suffering from such general conditions that a change of country and a change of scene would be beneficial to them. I think the right hon. Gentleman might consider that aspect of the question.
    Question, "That the Clause be read a Second time," put, and negatived.

    NEW CLAUSE.—(Duration.)
    This Act shall continue in force so long as the Supplies and Services (Transitional Powers) Act, 1945, continues in force.—[Mr. Eccles.]
    Brought up, and read the First time.
    10.0 p.m.
    Mr. Eccles: I beg to move, "That the Clause be read a Second time."
    The Government desire that this Bill shall be part of the permanent law of the land. The Chancellor of the Exchequer actually said that he wanted these powers for eternity. This Clause sets a definite time-limit to the length of the Bill, and there is, therefore, a fundamental conflict here between the two sides of the Committee. We recognise that, in the immediate future, tight control is necessary over the conversion of sterling into other currencies; indeed, I think that we are probably more cautious than the Government about the nearby prospects of balancing overseas accounts. But this caution in no way alters our belief that, with prudent management of our domestic economy, the bulk of these controls could be withdrawn within a few years. We are bound to fix the date when this Bill should be reviewed by Parliament, and we have chosen the date when the Supplies and Services (Transitional Powers) Act expires which, I think, is four years from tomorrow. That seems to us a convenient time to review all the extraordinary powers which the Government so hastily took to themselves last autumn.

    889
    The Committee will realise that if the Chancellor pursues the present policy of spending more than the taxpayer can pay, and, at the same time, pursues cheap money and schemes of indigestible nationalisation, the value of the £ will not be re-established by 1951. I admit that if in asking for these powers to be of unknown duration, the Chancellor cites his taxation and monetary policies in his own defence, there is no answer from this side of the Committee. My hon. Friends will agree that a man who is never sober, has a permanent claim to a lamp-post to conceal his instability. The second argument for limiting the life of this Bill is that restrictions of this kind, over all the contacts between citizens of this country and citizens of countries outside the sterling area, which involve payments, should not be subject to Treasury control because that, in itself, is a definite obstacle to international understanding and world peace. These comprehensive controls put back the clock of civilisation. The Committee will recall that between the wars, the totalitarian dictators habitually justified their actions by an appeal to efficiency, and it may very well be that tonight the Chancellor will justify asking for these powers by saying that he cannot control any leakage of capital, unless he can control all foreign payments. He will make an appeal to efficiency and, in doing so, he will repeat the age-old argument of the dictator, that unless he can control everything, he cannot control anything. If this argument is advanced, the Committee will have no difficulty in recogniseing its totalitarian parent.
    The two points I have cited were made on the Second Reading, but surely our discussions in Committee have multiplied the objections to making these powers permanent. Monstrosity after monstrosity has come to light, as the various Clauses have been turned over in Debate, and I will only cite—as I do not wish to keep the Committee long—Clauses 21 to 23, which deal with imports and exports. We found, there, that the Treasury have the right to interfere with every contract of sale of goods abroad, either to set a limit to the time in which the foreign buyer must pay, or to criticise the payment which the foreign buyer has to make to the British exporter.
    890
    I do not think that the Committee knew, before we came to look at those Clauses, how far-reaching are the powers under Clause 23. We also find that the Chancellor of the Exchequer is determined, I think, under Clause 22, to list any of the articles, other than money in its various forms, which a traveller may not take abroad. The result is that the Treasury can and will make criminals of all of us. Unless we happen to catch the favour of some good-humoured Customs official, who is prepared to wink at my gold pencil or my wife's marriage ring every time we go abroad, we are in fact criminals. That is not the kind of law which the British Parliament ought to pass, namely, that it is by favour of an official of the executive that we escape the courts.
    The Chancellor of the Exchequer, the Financial Secretary and the Solicitor-General are defending the permanency of these powers, each in his own peculiar way. The Committee will recall that the Solicitor-General advanced the argument that because most of these powers were useful and had been well-administered during the war, we ought not to quarrel with them in time of peace. That is an extraordinary argument for the Government Front Bench to bring forward. They might as well argue that because the black-out was useful and well administered, in time of war, it would be a good thing to have in time of peace. Many of my friends regard some of these controls as very much the equivalent of black-out in the commercial world. The genial Financial Secretary, who is always so agreeable, used the disarming but hollow argument, that these powers would not be needed. If powers of this kind are not to be used, they ought never to be taken at all, much less asked for permanently.
    I come now to the Chancellor of the Exchequer who, as usual, trampled upon the arguments of his colleagues and told us in his heavy and direct way that he needed these powers to catch crooks. He smacked his lips at the thought of the victims to come. Catching crooks is a worthy pursuit, but it is not a whole-time job for the Treasury. Their main business is to manage the finances of the country, so that trade and industry can expand to the fullest extent. If witch-hunting becomes their chief occupation and delight, as indicated under this Bill, those very efforts will weaken and not strengthen the value of the pound sterling. The Govern-

    891
    ment ought to strike a saner balance between, on the one hand, allowing the ordinary trader to get on with his business without all this spying and form filling and, on the other hand, catching the unsocial and crooked financier who desires to fly from sterling. I am convinced that under this Bill 99 out of 100 traders will be harassed and restricted in order to try to catch the one guilty man. That will not be in the general interest of our export trade. So much for the Government Front Bench. I cannot refrain from saying a word about the Government supporters on the back benches. This is a long, complicated and important Bill on which they have put down not one Amendment, and with the exception of the hon. Member for Oldham (Mr. Hale) this afternoon, they have not asked one question about a single Clause.
    10.15 p.m.
    Mr. Edward Evans: That shows what a good Bill it is.
    Mr. Eccles: It is a record in Parliamentary inertia.
    The Deputy-Chairman: I must point out to the hon. Member that he is going very wide of the new Clause, which deals purely with the duration.
    Mr. Eccles: My final reason for desiring to limit the life of the Bill is that the Committee stage has revealed in all its importance the connection between these controls in the United Kingdom and their operation in the countries which are now called scheduled territories. The success of the whole effort of defending the value of the pound, as the hon. Member for Chesterfield (Mr. Benson) said last week, depends upon the strength of the weakest link in the chain which is thrown round the sterling area. Our Treasury officials are the wiliest and most experienced men at their job in the world, but I wonder whether they have considered the strain which they are putting on their opposite numbers in the scheduled territories by asking them to adopt the most complicated system of exchange control ever thought of. It may be that crook catching and witch hunting is not so popular a pastime—
    The Deputy-Chairman: The hon. Member must keep to the new Clause
    Mr. Eccles: I submit, Mr. Beaumont, that this is very germane to the argument. I am saying that the question of putting the controls on here and getting them to operate in the Dominions is very much a matter of whether His Majesty's Government have to say to the Dominions, "These are permanent," or "These are temporary," and I was saying that crook catching, which is the purpose of these controls here, may not be so popular a sport in Egypt or India as it is in Socialist Whitehall Surely, it would have been wiser to have said to the Governments of the Dominions, "We are in a crisis now, we need exceptional powers for a few years; will you help us to operate them, and we will undertake within a short period to review the whole system and invite you here to a conference, at which we can get together, and see where and how the whole of this rigid"—and, as I think uncivilised, though, for the time being, necessary—"system of exchange control can be modified for the benefit of ordinary citizens." I consider this to be almost the most important reason for not making this Bill permanent—that to make it permanent is to put a strain upon our Imperial relations which is quite unnecessary
    Mr. Benson: I think hon. Members opposite are under the impression that they have been using serious arguments in this Debate. I assure them they have not. With regard to the present Clause, everybody knows that it has always been the custom of the House to pass permanent Acts when dealing with permanent conditions. [An HON. MEMBER: ''What about the Army Act?"] I am afraid I should be out of Order, if I tried to show why the Army Act is passed annually. When hon. Gentlemen opposite were in power they passed the Children and Young Persons Act. They did not limit it. [Interruption.] When we passed the National Insurance Act last year hon. Gentlemen did not suggest that there should be a limit to its duration. Both those Acts are permanent; why should not the present Measure also be permanent? The hon. Member for Chippenham (Mr. Eccles) said that he realised it was necessary stringently to control sterling for the next two years. Does he really suggest stringent control is necessary only for the next few years? He suggested that, by prudent argument, we should in a few years make sterling cap-

    893
    able of standing on its own legs without protection. Does he really believe that? We shall be lucky if we succeed in the next few years in making our balance of payments—
    Mr. Eccles: Under the present Government, I agree.
    Mr. Benson: Under any Government If we do succeed in a few years in making our balance of payments equal, it does not mean that sterling is capable of standing without control. Sterling will not be capable of standing without control without assistance, until we have sufficient sterling reserves to meet any strain that may occur in any financial crisis or trade depression. In 1932 when we had far less liquid assets than there are now there were something like £5,000 million bank deposits and £4,000 million Treasury bonds. Never has this country had so much internal liquid assets as it has now. In 1932 with far less and when we had vast foreign assets and no sterling balances, we had to establish an Exchange Equalisation Fund with £500 million sterling fluid cash, to deal with currency fluctuation. In order to deal efficiently with currency fluctuations in sterling we should require control over foreign currencies, not of £500 million but of £5,000 million and therefore it is just nonsense to talk about this Bill being temporary. The hon. Member for Chippenham said he hoped the Chancellor would not use the argument used by all dictators, that he could not control anything unless he controlled everything Does this Bill control everything? Look at the First Schedule, which rules out a large area of the' globe. The Chancellor is not attempting to control everything. All he is attempting to do is to take powers that might be necessary and as the Solicitor-General has said, those powers will not be used just because they are there. Because they exist they will not necessarily have to be used.
    If I may draw an analogy from the Surtax legislation in the last 25 years, I would say that there was scarcely a Finance Bill that had not pages of Clauses, dealing with Surtax, tending to prevent avoidance of payment. Once a particular loophole was stopped, the powers involved practically lapsed for the simple reason that no one tried to use that loophole again. We have stopped practically every bolthole and we are now stopping the final ones to prevent people from sending their assets abroad.
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    The hon. Gentleman referred to the wiliness of Treasury officials. Certainly, I agree that they are wily, and they are a good deal wilier than Treasury officials in some of the scheduled areas, and we may have trouble. But under this Bill we can always eliminate from the scheduled areas any country which proves to be a loophole. What did astonish me was that the hon. Gentleman gave as one of his reasons why this Bill should be temporary the fact that our Dominions and Colonies would not like it, and that we ought to have passed a temporary Bill so that in future years those Dominions and Colonies would not be interfered with and controlled by the present Measure. In fact they are not really interfered with or controlled by it, but if we removed the powers of this Bill in three of four years' time who would be the greatest sufferers? The Dominions and Colonies who have vast sums here as sterling assets. This Bill is essential to prevent sterling depreciating. It is designed as much for the protection of the Empire, as for the protection of this country.
    Sir A. Salter: The hon. Gentleman said, quite rightly, that Bills introduced to deal with permanent conditions are usually permanent in form, like the present Measure. He went on to argue that the conditions intended to be dealt with by this Bill are in their nature permanent or at least of such long duration as to be considered permanent. But his argument was really addressed not to showing that any of the conditions dealt with in this Bill are permanent but that some form of control is likely to be necessary for an indefinite length of time. I agree with that, although in doing so I may be differing from some hon. Members who support this new Clause. I have for many years believed that some form of control of movements of capital should be a part of the permanent structure of the economy of this country. I wrote a book 40 years ago largely devoted to that argument and demonstrating the evils which result from uncoordinated and uncontrolled external speculation and investment. But I draw the greatest distinction between the control of capital movements, and the limitation and restriction of ordinary current expenditure. In my argument tonight, I shall refer not to current business transactions, but to current personal expenditure such as that on foreign travel.

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    10.30 p.m.
    There is the greatest possible difference between two periods. The first is the one in which we are at this moment, when it is clearly necessary, in addition to controlling capital movements, also not merely to supervise, but actually to limit and reduce personal expenditure in foreign currency. The second period—which we may reasonably expect to reach as early as the date contemplated in this new Clause—is one in which, though it is still necessary to control capital movements, any supervision of current payments will be for the purpose, and only for the purpose, of seeing that they are not used as a medium for covert and illegitimate capital movements. The hon. Member's argument seemed to imply that there was no vital distinction between these two periods.
    Mr. Benson: The Treasury has power to remove any of the regulations under this Bill, and one must assume that a Government, in dealing with matters like this, acts reasonably, whether it is Conservative or Labour, and with both its eyes and all its attention on the fostering of foreign trade.
    Sir A. Salter: But we are a legislative Assembly, and it is our duty not to make any such assumption, and not to grant unnecessarily wide powers, without limitation of time, which can be grossly abused either by this or any succeeding executive. Otherwise we are consenting to an abdication of the legislative functions of this House, which ought not to be tolerated.
    There are two reasons why I greatly regret the passage of this Bill without any provision for its termination. The first is that it is a Measure which is likely to result in the continuance of an irksome form of control of personal conduct far beyond the time that is either necessary or desirable. The second is that it adds one more precedent to the numerous cases we have had recently of Bills being presented to this House in a form that in fact involves an abdication by Parliament of its true legislative function. Take the first reason. If an Administration, acting under the powers of a permanent Act, decides, and for a time necessarily and rightly, whether it is extravagant for an individual to spend his money in a foreign country, it will begin to think that
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    this is a part of an Administration's duties in normal times; we are in danger of being under a drastic control for all time of our expenditure of such of our income as is left after the payment of Income Tax. I am confirmed in this fear by the argument of the Chanceller of the Exchequer. He compared invisible imports such as foreign travel with visible imports, which are of course subject to duties or official regulation in normal times. Yes, but normally visible imports are taxed or restricted for the purposes of either securing revenue or of protecting a home industry. It is only in periods of emergency that countries have restricted visible imports, not for either of these purposes, but in order to support the balance of payments. We all know occasions when this has been done, but we know that the times were then abnormal—they were times of financial crisis.
    I trust that we are not accepting the position that, after the emergency of the next few years, it shall be a permanent part of our normal system to control the expenditure of private individuals on foreign travel in order to support the balance of payments. We are in danger of Whitehall considering it to be a part of its permanent duties in normal times to judge whether it is reasonable for a private person to spend more than a specified sum abroad. What kind of bureaucrat's prison are we now setting up for ourselves—prison from which we can only hope for occasional release on bail at the gaolers' caprice? There is a play in London now entitled "Is Your Honeymoon Really Necessary?" It has had a long run, but I hope it will not go on for eternity. Still more do I hope that Whitehall will not for eternity consider it a part of its duty to decide where a man may go, and what he may spend. I ask this Committee to treat this control of personal expenditure as a necessity of the next four or five years, not a permanent part of our system. I trust, too, that, when we speak of foreign travel, we shall not think of it in terms of mere holidays or joy rides. Foreign travel has been a vital element in the development of our own and the world's civilisatian, and civilisation will be impoverished if it is for all time to be allowed only so far as Whitehall thinks it desirable or necessary.
    We may all admire the beauties of Scotland or Wales, but is Whitehall for all time to tell us whether we are to prefer

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    these to the attractions of some other country? A few days ago the Foreign Secretary said he looked forward to the time when the citizen—
    The Deputy-Chairman: I am sorry to interrupt the right hon. Gentleman, but we cannot discuss that question on this proposed new Clause.
    Sir A. Salter: With great respect, Mr. Beaumont, I think it is a very serious argument for the limitation in time of this Bill. We are, as it stands, accepting a system under which, not for a short period but in perpetuity, our travel will be at the mercy of Whitehall and of the Treasury. Concluding this point, may I say that the Foreign Secretary gave us an alluring picture of the private citizen desiring to go abroad only having to go to Victoria and buy a ticket. The picture would have been sadly spoiled if he had said "a private citizen desiring to go to a scheduled territory."
    Mr. Dalton: What is wrong with the Empire?
    Sir A. Salter: Nothing, except that we shall find our affection for it diminished if, instead of choosing freely to travel in it, we are forced to go there by the Treasury.
    I now come to my second reason, which I will give briefly, for regretting that this Measure is to be permanent. This is one more case, and perhaps the most extreme case, of a Bill being brought before us in the form of what is almost a blank cheque. We are asked to accept such Bills because the Chancellor of the Exchequer or other Minister concerned states the policy to which he intends to give support under the wide powers he asks. We may accept that policy as reasonable and believe in the sincerity of the Minister. But that is not legislation. An Act once passed continues in force till it is abrogated. It continues to provide power to succeeding Ministers who are not bound by their predecessor's statement of policy. I should for this reason have argued against the form in which the present Bill is drafted but for the fact that I realise that, in the particular circumstances of the moment and in order to deal with a problem such as that of Exchange Control, special and abnormal powers are required. I do not contest the validity of the argument that the
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    Treasury must be able to act with great rapidity. But while I do not, for this reason, contest the general form of the Bill for this present emergency period, I think it the more necessary to limit a Bill in this form to the emergency. If, as Parliament, we are not to continue the process of losing our true legislative functions, we must have a definite date after which these wide emergency powers are terminated, and at which the Government of the day will have to direct their minds to the problem that remains at that moment, to consider the controls and the powers that are then needed. They can, and should, at that time introduce a Bill comprising the powers which are then needed, and only those powers, for the different needs of that time.
    Mr. Birch: I wish to say a few words in support of the arguments which have been advanced by the senior Burgess for Oxford University (Sir A. Salter) and the hon. Member for Chippenham (Mr. Eccles). But I cannot say that I am in agreement with the remark of the hon. Member for Chesterfield (Mr. Benson) in regard to the Children and Young Persons Act. He seemed to argue that because we have always children with us we must always have exchange control. His argument was a non sequitur. I do, however, agree with him that the short term situation is extremely serious and we on this side of the Committee agree more with the President of the Board of Trade than with the Chancellor, at any rate in his expansive mood at Bournemouth. True, he put up the Financial Secretary on the Third Reading of the Finance Bill to say that it was owing to the Bournemouth air—lemonade, he said, had flowed like water and so forth—but the fact remains that the Chancellor on that occasion did make a number of loose statements, which are not true. If the present monetary policy is pursued in perpetuity, this Bill will be needed in perpetuity. But it is a long way ahead to 1951, and we do not know what the situation will be then. I would like to emphasise one point made by my hon. Friends, and it is this. The Bill creates a number of new crimes. The mark of a civilised State is respect for law. If there is to be respect for law, it has to be based on moral grounds or on habit, usage or prejudice. On the moral grounds, it is going to be very difficult to persuade people that it is wrong to travel abroad, and as

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    my hon. Friend the Member for Chippenham pointed out, it is going to be difficult to persuade anybody that it is wrong to forgive a debtor, because he happens to live abroad. We are enjoined by our religion to do so.
    Mr. Benson: This Bill deals with hard currencies.
    Mr. Birch: This Bill forbids the forgiving of debts to all debtors abroad, except in the scheduled areas. There is great difficulty in building support for this Bill as far as usage and custom are concerned, because it is a complex Measure, largely dependent on administrative action to put it into force. One day £75 may be the sum which it is correct to spend abroad, another day it may be £150. So one cannot get any moral, or customary, ground to back up the argument that it is only right to spend £75. As pointed out by the right hon. Gentleman the senior Burgess for Oxford University the Government are continually passing these wide Measures and creating these new crimes. If one is a road haulier, for instance, it is going to be a worthy action to deliver goods 24 miles from one's garage, but if one travels 27 miles it will be a crime. That sort of thing is going to pull down our country. After all, in America, Prohibition, "the experiment noble of purpose," had to be given up because it caused disrespect for law. The experiment which hon. Gentlemen opposite are now making, the experiment ignoble in purpose, will have the same effect, and therefore the shorter the term put to it the better.
    10.45 p.m.
    Mr. J. Foster: I want to add my plea to those of my hon. and right hon. Friends who have preceded me. One of the main objections to the Bill's being made perpetual is that it is a crisis Bill, and exactly the same considerations apply to it as applied to the Supplies and Services (Transitional Powers) Act, which has- a time limit of five years. The Chancellor of the Exchequer, the learned Solicitor-General, and the Financial Secretary to the Treasury, all admitted that these were exceptional measures, and when measures are exceptional they cannot be, or should not be, continued in a Bill which proposes to make them perpetual. What makes it much worse in the case of this Bill is, that owing to the nature of the subject, the
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    Bill is so flexible that it can alter its shape in five years without Parliament having any check on the change. At the end of five years, the Treasury and the Government may have altered all the Clauses of this Bill so that they will become unrecognisable, and we may continue under quite a different system. If it is crisis legislation, then at the end of five years the machinery should be overhauled to find out why there is a crisis and whether the right way of dealing with it has been followed in that period.
    The hon. Member for Chesterfield (Mr. Benson) said the Bill did not allow the Chancellor of the Exchequer to do everything, because it excepted the scheduled areas. If he looks at the Bill, he will see that the Treasury can change the scheduled areas tomorrow. It can add to, or subtract from, them. Therefore the Bill does allow the Chancellor of the Exchequer to do everything with regard to the scheduled areas as well. A Bill which does that should, at the end of five years, be given back to Parliament to check whether the crisis legislation has been properly operated, and if it has not, then Parliament should be given an opportunity to change it, to alter the system and try some new development. Exactly the same arguments applied to the Supplies and Services (Transitional Powers) Act. It will be within the recollection of the Committee that the hon. Member for Chesterfield did mention children in seeking to draw an analogy from other legislation like that dealing with insurance and children. He said that that was not limited to five years. But that is what I might call beneficial legislation. That is legislation to improve the lot of children. It is not intended that at the end of five years we shall be free to be cruel to children. It is not intended that at the end of five years we shall be free to stop the insurance of insured persons. That is quite a different consideration. Therefore, I ask the Chancellor of the Exchequer whether some method could be found of giving Parliament some check other than that of having Orders which are liable to be laid before Parliament, but in regard to which we may find considerable exceptions under the Sixth Schedule. I would ask the Chancellor whether some means should not be found whereby Parliament can control the way in which this Measure is administered at intervals. It is not

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    legislation for the general good of the country in normal circumstances, although I admit it is a Bill for the general good of the country, in peculiar and crisis circumstances.
    Mr. Ronald Mackay: I want to deal with some of the points raised by the senior Burgess for Oxford University (Sir A. Salter). The hon. Member for Northwich (Mr. J. Foster) suggested that this was "crisis legislation", and made the point that we should not make it permanent. That seems to be a new phrase. "Crisis legislation" was the legislation of the Defence Regulations of 1940. That was the argument used by the hon. Member for Chippenham (Mr. Eccles) in regard to the blackout. Such arguments do not apply, unless the basic conditions apply, and obviously the blackout is not necessary now. But provisions in regard to exchange control which obtained in 1940 are equally necessary now. Hon. Members opposite will not face the fact that the international aspect of the matter has changed and that because it has changed, legislation of this kind is necessary.
    The senior Burgess for Oxford University referred to a book which he wrote, and which I read many years ago—and not only read but learned and inwardly digested. I was staggered when I heard him say that this Bill should not be given permanent form. His argument rested on two points, first that we were giving the Government a blank cheque, and secondly, in regard to the effect on overseas trade. The question of giving the Government a blank cheque turns on the legislation being enacted. We are trying to control a number of matters concerning movement of capital. The senior Burgess for Oxford University agrees that that is something which should be done, and he argued it in his book some years ago. Apart from movements of capital, there is the question of control of external trade. The fact is that the position has been changed in a way which is going to be permanent for quite a long time. [Laughter.] Well, is going to last for a very long time. It is essential that we should maintain secure machinery, adequate to deal with any changes which occur.
    Resulting from external trade, is the balance of payments, Hon. Members on
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    both sides of the Committee must acknowledge how serious the position is in regard to sterling balances. Arrangements have been made to refund them and in five years time, when hon. Members opposite want to end this Measure, we shall be faced with the ending of the American Loan. Remember, this is the first time this country has been put into a position of having to repay them. [HON. MEMBERS: "NO."] We shall soon be starting to repay the Loan. This makes the whole position entirely different, and makes it necessary to create machinery to handle the whole of the overseas trade position. The senior Burgess for Oxford University went on to say that the problem of overseas travel was so important, that we must at least make that free and that we should limit the operations of this Measure for that reason. I find it difficult to follow that argument. I have had my fair share of foreign travel and in the last 15 years, I have been round the world many times. I would join in any endeavour to see that facilities are provided to encourage foreign travel. But that is a very negligible percentage of the amount of control to be operated. I find it difficult to follow the argument that, because 10 per cent. of what the Bill is going to do is something we cannot limit in time, therefore, we should limit the whole purpose of the Bill. The hon. Member for Chesterfield (Mr. Benson) answered that argument perfectly, when he pointed out that this Bill is laying down the framework for exchange control, with which the senior Burgess for Oxford University agrees.
    Sir A. Salter: Is the hon. Member arguing that the pound should not be convertible into hard currencies for current business transactions for a longer period?
    Mr. Mackay: I am arguing that this is a question of fact: that it is not within our contemplation that it is going to be so convertible, and that without adequate machinery for control it could never become convertible.
    Sir A. Salter: The hon. Member has forgotten for the moment the provisions that have been made with regard to the convertibility of sterling in the very near future.
    Mr. Mackay: With the exceptions to which I referred earlier. I did argue

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    about the balance of payments. That is one factor which makes the whole problem of our balance of payments all the more difficult at the present time. The senior Burgess for Oxford University will remember that I said the Government had said nothing about this at the moment. But with the position as acute as it is, not only as a result of the last war or of the one before that, but, probably, as a result of the changed economic conditions since the end of the nineteenth century, if becomes a more fundamental problem than many people are willing to recognise. With this changed position, I find it difficult to follow the argument that, because of the desire—great as it is, and though I sympathise with it—for currency to be available for foreign travel, the machinery of the Bill should not be made permanent.
    The hon. Member for Chippenham raised the whole question of the currency position. He said we were making our position more difficult with the other members of the Empire within the scheduled territories. I wonder. I cannot speak for Canada. At least, I can, but Canada is outside the scheduled territories. Canada is the only Dominion which matters in the external trade and currency world. [HON. MEMBERS: "What?"] It is the only one that really matters. Australia and New Zealand have firmer exchange restrictions than are contained in this Bill. Of South Africa I cannot speak. But Australia and New Zealand have stricter, or just as strict, restrictions. To suggest, as has been suggested, that because the magnitude of their trade is a small percentage of the trade of this country, and that because of our relationship with those two countries, this should not be a permanent Measure, seems to me, again, to be entirely nonsensical.
    The problem we have to face—and hon. Gentlemen are not facing it—is that we have to create, as a permanent part of our external economic machinery, some form of exchange control. The statement the Chancellor of the Exchequer made today on Clause 31 was complete evidence of the extent to which machinery was being left to the Treasury, to implement the general lines laid down in the Bill If one takes the view that the conditions of this country in 1946 are changed, that those changed conditions are going to
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    continue because our economic position in the world has changed from what it was in 1914, then, as part of the normal machinery of the country, exchange control is necessary; and that being so, the general lines of it should be made permanent.
    11.0 p.m.
    Mr. H. Roberts: It is doubtful whether the Chancellor will be grateful for the speeches made in support of his case. Without doubt, arguments put forward by the Chancellor have been arguments, in general, of a crisis character, related to the present serious state of affairs, and very rightly so related. I think that all his arguments on foreign travel, and the amount of currency to be allowed, were crisis arguments; he was hoping that they would be relaxed later. It may well be that some parts of this Bill will have to be permanent, but it is wise that it should be reviewed by Parliament at the end of four years. Why? Because it is not at all a good thing for restrictions of this acute character to become embedded in our legal system and habits. That, to me, is quite sufficient argument, but I must at once say that—I have to make two points only—I take great exception to the suggestion that on this side of the Committee we do not realise our overseas position. In the course of my election campaign in the summer of 1945, and at every meeting I addressed, I told the people that this was not the time to look forward to a life of ease, and that the problem before the people of this country was how to keep alive for the next five years from then. I wonder whether hon. Members opposite gave as much prominence to the difficulties as I did. And, I would like to ask in conclusion, was it put forward by the Socialists as a great inducement to the electorate that, after the right hon. Gentleman and his colleagues had managed the affairs of this country for about 18 months, we should be told that the present state of restrictions was in future to be permanent, that that was to be our reward, and the reward of the country, for having entrusted our affairs to them? I know very well what promises were made, but if we on this side of the House did not make our protest for the ultimate decision in favour of liberty, we should be in the position of allowing indefensible permanent powers to be given up without a vote, and that is a responsibility I cannot take.
    Mr. Dalton: Earlier in these discussions the view was expressed on the other side of the Committee that this ought not to be a permanent Measure, and a number of my hon. Friends, and I myself among others, asked the Opposition to say when they thought the Measure should terminate. We were unsuccessful in eliciting their view at that time; the right hon. Gentleman the Member for the City of London (Mr. Assheton), to whom the question was addressed, said, "You must wait until we put down our new Clause on the paper"—in other words, they had not then made up their minds. Since then consultations have taken place—not exactly through the usual channels, but in the usual pond—and I presume that out of their consultations has arisen this proposal. This proposal, which is what we are going to vote upon—we are not really voting upon an abstract question of eternal versus temporary arrangements, we are voting upon a positive and detailed proposal put forward by the Opposition—is that this Bill should continue in force for the same period as the Supplies and Services (Transitional Powers) Act, 1945—that is, for five years from 1945.
    The proposal before the Committee is therefore that this Bill should terminate in 1950. The exact month of the year I cannot recall without checking, but I think it would be September or December, or some month in the latter part of 1950. I asked whether any particular date could be named, because it seemed to me that in regard to any particular date a differing answer would be made. The particular answer which has to be made in this case, has already been made by my hon. Friend the Member for North-West Hull (Mr. Mackay), who pointed out that it was just the time when we should have to be prepared to make the first payments on the United States and Canadian Loans. That is an eventuality for which we shall have to be prepared in due course, and I cannot think of any more ill-chosen moment for pulling down the national financial defences, which this Bill provides, than a time when our foreign exchange will be strained; I will not say strained to endurance, but subject to a heavy and long-to-be continued strain. Year by year, we shall have to put over unrequited payments to those in North America who have let us have dollars
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    now. I am sure that whatever date might have been suggested, no time could be less easy to defend, in relation to these circumstances, than the date here proposed. Therefore, I say that this date is one which the Committee ought not in any circumstances to approve, even if, on other grounds, it was thought that there was a case for limiting the Measure to a temporary period.
    As I have argued before, there is, in the view of the Government, an overwhelmingly strong case for not setting any limit in time for this Bill. Prevention is much better than cure, and we do not want to have to cure a serious financial crisis, which might arise in the future, if we financially disarmed ourselves in this fashion We shall need these defences, so far as we can see, for a long time ahead. We may hope that we shall need them with less urgency as the years go on, and that, as we recover our balance of trade and our economic life, we shall be able to diminish and undertake a certain measure of financial disarmament, and in due time we shall no doubt be able to lift the permitted totals for foreign travel, and in other ways greatly ease up. But this total financial disarmament which the Conservative Party are preaching in the realm of finance cannot be accomplished by realistic persons in any reasonable period of time.
    I was reading the "Economist" the other day. I was chided on Second Reading for not quoting, among others who approved the Bill, the Editor of the "Economist." Of course, the "Economist" is not one of the stoutest supporters of the Government. It wobbles a bit, and it wobbles a bit in support of things which I do. It has not been a supporter of what is called the "budgetary and monetary" policy of the Government For that reason, it is no doubt regarded by some hon. Members opposite as being right in general. I try to view it objectively, from week to week, sometimes agreeing, and sometimes disagreeing with its comments on affairs. I notice, in last Saturday's issue, in dealing with this Bill, observations which are cogent and which put the case well—and it can put a case well, whether it is good or bad; and in this case it has put a good case well. It stated:
    "In this particular sphere, since it is impossible to say when Britain's external position will be so strong that capital could be

    907
    allowed to move as freely as it pleased—and since, even then control of capital under a Bretton Woods structure would be needed to protect the economy of others—it would be wholly unreasonable to put the Government of the day in the position of having to seek renewed powers at a denned date. For similar reasons there was never a possibility of writing into the Bill itself the actual system of exchange control. In this sphere, more clearly perhaps than any other, essential flexibility cannot be secured except by delegation of power to the authorities. That is regrettable, but it is also inevitable, as wartime experience has proved. The only available safeguard against bureaucratic abuses is the right of Parliament to discuss, and possibly to reject, the Orders laid before it; and this right is preserved in the Bill."
    I think that is an extremely good and clear statement of the case by an impartial organ, which has never been so complimentary to anything for which I was responsible since I assumed my present office. events move on in our public affairs what makes the difference between the practical working of a permanent Measure, such as we are now proposing to put on the Statute Book, and a Measure limited in time, terminating in 1950 or 1951? In what political situation could we—I am not, for the moment, assuming a change in Government; I will consider that in a moment—be sure that when we get to 1950 or 1951, and we had to start afresh, all those who still have some constitutional powers would instantly respond to the need which we might think to be very urgent? Could we be sure of getting back the powers which would be lapsing? Of course we could not. We could not trust all the elements which would, in some degree, be influential in this matter.
    On the other hand, if there has been a change of Government at that time, and if the party opposite have been installed in a majority, they can repeal this permanent Measure or, alternatively, introduce an amending Measure by which they could strip away this or that essential feature For the sake of continuity through a period of great difficulty—I will not say "danger," because that is perhaps an exaggerated word—when we shall need to have all our defences effectively organised for the protection of sterling, we should tonight say that this should be a permanent Measure. The Opposition will desire to vote against this Bill, as is their right and natural reaction following the expressions of opinion we have heard from the benches opposite. I offer them this consolation: if only they could win
    908
    a General Election, if only they could get into training, if only they could win a by-election, if only they could save all their deposits, then the prospect would open out that this Measure, although permanent in form, might be temporary if they had the power to change it. That is the only consolation which I feel it proper to offer tonight. It is a prospective consolation, but I hope that although they will vote tonight, and be defeated, they will not abandon all hope of being able to reverse all those Measures of ours which they sincerely believe to be ill-advised.
    11.15 p.m.
    Mr. Stanley: As I wish, at this stage of the discussion, to save time, the right hon. Gentleman will not expect me to follow him in the more irrelevant parts of his speech. The question whether or not Dr. Joad shall or shall not contribute £150 to the Exchequer is not really one for discussion now. This is, of course, an important matter, and I think the right hon. Gentleman does realise that it is one on which two views can be held. In the first place, we all agree that there is need today, in the circumstances of the time, for exchange control of some character or another. We on this side may differ, and have differed, over some of the provisions in the Bill. But none of us would deny the need for a Bill which can substantially meet the situation facing us today. I should also be prepared to claim that while we all agree that there should be a Bill, none of us on this side is quite happy about this Bill. No one who has really followed the discussion can fail to realise the kind of situation which might be inevitable. But this is a situation in which a legislative Chamber lays down a series of propositions under which some customs or excise officer or some Treasury official will in fact exercise control over the consequences of any action that may be taken. None of us really likes a position of that kind, although from what I heard from the learned Solicitor-General during the course of the Debate he apparently translates salus populi as the convenience of a Treasury official. I think, however, we all agree on these two propositions—we have to have a Bill, and that this Bill may be inevitable now, but that none of us like all its provisions.
    Now we come to the point on which we differ, the question whether the conditions

    909
    which make a Bill of this character necessary today are such that we must regard it as a permanent act of legislation. The right hon. Gentleman has given his view, and he is well aware of the views expressed on this side. But he may not be so happy as to what has been said by hon. Members behind him, who have all spoken in tones of unrelieved pessimism. They are convinced that the Chancellor will not be able to do anything within the next few years to relieve the situation in which we are placed today, and that we must look forward for ever, not to a situation where we might have in reserve some major power to prevent big movements of capital, but to the operation of a Measure of this character which includes; power for the Treasury to inquire into every trifling transaction by everybody in this country. Perhaps it is not flattering to the Chancellor to know that that is the esteem in which his prospects are held by his own supporters.
    In order to restore his sell-confidence, which may temporarily—but only temporarily—have left him, I will assure him that we take a more optimistic view. We believe that it is not impossible that within the next five years conditions may improve to such an extent that, not only will it be possible to sweep away all measures of exchange control, but a considerable amount of the detailed, petty control which is most of this Bill. If, in fact, there are prospects of some, and, perhaps, some considerable, amelioration in the next few years, we think it is right that it should be laid down that at a particular period Government and Parliament should look at this Measure again. I heard the hon. Member for Chesterfield (Mr. Benson) express almost childlike confidence in Government Departments. He said any Government Department, as soon as a power is no longer needed, will get rid of it. That has not been my experience. Government Departments once they are given powers always find it more convenient to continue with them. I should be prepared to assert that, unless something of this kind is put into this Bill, however great the improvement in the exchange position may be, we shall find that it will be for the convenience of the Treasury and of the Minister, and above all, for the convenience of the Chief Whip, that Parliamentary time should not be occupied by any abdication by the Treasury of powers that have become unnecessary.
    910
    If hon. Members really believe there is a chance in the next few years that conditions will so improve, and not necessarily all controls could be abandoned, but a substantial relaxation could be made, the only way of ensuring that the Government and the House have an opportunity of reconsidering the matter, is to put this in the Bill now.
    The right hon. Gentleman the Chancellor of the Exchequer has made great play about the date. He says the date we have selected comes at the time of the repayment of the first instalment of the American Loan. It does not really matter when it comes. It does not matter whether it is on this date, or the next year, or indeed on the date of the second instalment. That is a permanent trend we have to face, and one of the things which have to be taken into account when any review of the situation is made. It appears to me this point has not much validity. We selected this date because we regarded it as a period when the immediate effects of the war are most likely to have passed away and provisions which are purely transitional could therefore be abandoned. The right hon. Gentleman did call one very powerful ally to his aid. That was the "Economist." We hope that this is a habit which will now stiffen, and that he will be prepared on future occasions, as he has been prepared to do now, to listen to the advice of the "Economist." If he does, it will only strengthen the case for this new Clause, because it will create such a radical improvement in the Chancellor's financial outlook that our prospects will become brighter. I remember also reading a leader on the subject in "The Times"—which supports the right hon. Gentleman so long as he is a Member of the Government. "The Times"—I have not the copy with me and cannot quote the exact words—on the day on which this Bill was introduced, had a leader approving it and in general admitting its necessity. But it said exactly what we are saying now, and that is that the real proof of its success will be the rapidity with which the Government are able to dispense with many of the provisions in this Bill. It is because we want to see that test—because we want Parliament to see whether, in fact, many of these provisions are necessary after an interval—that we shall vote on this new Clause, believing that at the end of the period,

    911
    the Government of the day should have to justify to the House of Commons of the day, the continuance of the very drastice powers taken in this emergency.

    Division No. 33.

    AYES

    11.37 p.m.

    Agnew, Cmdr. P. G.

    Foster, J. G. (Northwich)

    Noble, Comdr. A. H. P

    Amory, D. Heathcoat

    Fraser, Sir I. (Lonsdale)

    Peto, Brig C. H. M.

    Assheton, Rt. Hon. R.

    Fyfe, Rt. Hon. Sir D. P. M.

    Pitman, I. J.

    Astor, Hon M.

    Gage, C.

    Poole, O. B. S. (Oswestry)

    Baldwin, A. E.

    Gates, Maj E. E.

    Prescott, Stanley

    Barlow, Sir J.

    Gomme-Duncan. Col A. G.

    Price-White, Lt. Col. D.

    Beamish, Maj T V. H.

    Grant, Lady

    Prior-Palmer, Brig. O.

    Beechman, N. A.

    Gridley, Sir A.

    Ramsay, Maj. S.

    Birch, Nigel

    Hare, Hon. J H. (Woodbridge)

    Rayner, Brig. R.

    Boles, Lt.-Col. D C. (Wells)

    Harvey, Air Comdre. A. V.

    Reid, Rt. Hon J. S. C. (Hillhead)

    Bossom, A. C.

    Holmes, Sir J. Stanley (Harwich)

    Renton, D.

    Bowen, R.

    Hope, Lord J.

    Roberts, H. (Handsworth)

    Bower, N.

    Hudson, Rt. Hon. R. S. (Southport)

    Robinson, Wing-Comdr. Roland

    Boyd Carpenter, J. A.

    Hulbert, Wing-Cdr. N. J.

    Sailer, Rt. Hon. Sir J. A.

    Braithwaite, Lt. Comdr. J. G.

    Hurd, A.

    Sanderson, Sir F.

    Bromley-Davenport, Lt.-Col. W.

    Joynson-Hicks, Lt.-Cdr Hon L. W.

    Shepherd, W. S. (Bucklow)

    Buchan-Hepburn, P. G. T.

    Keeling, E. H.

    Stanley, Rt. Hon. O

    Carson, E.

    Lambert, Hon. G.

    Stoddart-Scott, Col. M.

    Clarke, Col. R S.

    Lancaster, Col. C. G.

    Strauss, H. G. (English Universities)

    Clifton Brown, Lt.-Col G.

    Legge-Bourke, Maj E. A. H.

    Taylor, C. S. (Eastbourne)

    Cooper-Key, E. M.

    Lindsay M. (Solihull)

    Teeling, William

    Corbett, Lieut.-Col. U. (Ludlow)

    Lucas, Major Sir J.

    Thomas. J. P. L. (Hereford)

    Crookshank, Capt Rt. Hon. H. F. C.

    Lucas-Tooth, Sir H.

    Touche, G. C.

    Crosthwaite Eyre, Col. O. E.

    Mackason, Brig. H. R.

    Turton, R. H.

    Cuthbert, W. N.

    Maclean. Brig F. H. R. (Lancaster)

    Watt, Sir G S Harvie

    Davidson, Viscountess

    Macmillan, Rt. Hon. Harold (Bromley)

    Wheatley, Colonel M. J.

    De la Bère, R.

    Maitland, Comdr. J. W.

    White, J. B. (Canterbury)

    Digby, S. W.

    Manningham-Butler, R. E.

    Willoughby de Eresby, Lord

    Dodds-Parker, A. D.

    Marlowe, A. A. H.

    York, C.

    Dower, Lt.-Col A. V. G. (Penrith)

    Marshall, D. (Bodmin)

    Drewe, C.

    Mellor, Sir J.

    TELLERS FOR THE AYES:

    Eccles, D. M.

    Mott Radclyffe, Maj C. E.

    Sir Arthur Young and

    Erroll, F. J.

    Neven-Spence, Sir B.

    Major Conant.

    Fletcher, W. (Bury)

    Nield, B. (Chester)

    NOES

    Adams, Richard (Balham)

    Clitherow, Dr. R

    Field, Captain W. J.

    Adams. W. T. (Hammersmith, South)

    Cobb, F. A.

    Fletcher, E. G. M. (Islington, E.)

    Allen, A. C. (Bosworth)

    Cocks, F. S.

    Follick, M.

    Allen, Scholefield (Crewe)

    Coldrick, W.

    Foot, M. M.

    Anderson, F. (Whilehaven)

    Collick, P.

    Fraser, T. (Hamilton)

    Attewell H. C.

    Collindridse, F.

    Gaitskell, H. T. N.

    Awbery, S. S.

    Collins, V. J.

    Gibson, C. W.

    Ayrton Gould, Mrs B.

    Colman, Miss G. M.

    Gilzean, A.

    Bacon, Miss A.

    Comyns, Dr. L.

    Glanville, J. E. (Consett)

    Baird, J.

    Corbet, Mrs. F. K. (Carnb'well, N.W)

    Gooch, E. G.

    Balfour, A.

    Corlett, Dr. J.

    Goodrich, H. E.

    Barstow P. G.

    Cove, W. G.

    Gordon-Walker, P. C.

    Barton, C

    Crawley, A.

    Greenwood, A. W. J. (Heywood)

    Battley, J. R.

    Crossman, R. H. S.

    Grenfell, D. R.

    Bechervaise, A. E.

    Dasgar, G.

    Grey, C. F.

    Belcher, J. W.

    Daines, P.

    Grierson E.

    Benson, G.

    Dalton, Rt. Hon. H.

    Griffiths, D. (Rother Valley)

    Bing. G. H. C.

    Davies, Edward (Burslem)

    Gunter, R. J.

    Blackburn, A. R.

    Davies Ernest (Enfield)

    Guy, W. H.

    Blenkinsop, A.

    Davies, Harold (Leek)

    Haire, John E. (Wycombe)

    Blyton, W. R.

    Davies, Hadyn (St. Pancras, S.W.)

    Hale, Leslie

    Boardman, H.

    Davies, S. O. (Merthyr)

    Hall, W. G.

    Bowden, Flg.-Offr. H. W.

    Deer, G.

    Hamilton, Lieut.-Col. R.

    Bowles, F. G. (Nuneaton)

    Diamond, J.

    Hannan, W. (Maryhill)

    Braddock, Mrs. E. M. (L'pl, Exch'ge)

    Dobbie, W.

    Hardy, E. A.

    Braddock, T. (Mitcham)

    Dodds, N. N.

    Hastings, Dr. Somerville

    Bramall, Major E. A.

    Donovan, T.

    Haworth, J.

    Brook, D. (Halifax)

    Dribsrg, T. E. N.

    Henderson, Joseph (Ardwick)

    Brooks, T. J. (Rothwell)

    Dye, S.

    Hewitson, Capt. M.

    Brown, T. J. (Ince)

    Ede, Rt. Hon. J. C.

    Hobson, C. R.

    Bruce, Maj. D. W. T.

    Edwards, N. (Caerphilly)

    Holman, P.

    Burden, T. W.

    Edwards, W J. (Whitechapel)

    Holmes, H. E. (Hemsworth)

    Burke, W. A.

    Evans, E. (Lowestoft)

    House, G.

    Butler, H. W (Hackney, S.)

    Evans, John (Ogmore)

    Hoy, J.

    Callaghan, James

    Evans, S. N. (Wednesbury)

    Hudson, J. H. (Eating, W.)

    Chamberlain, R. A.

    Ewart, R.

    Hughes, Hector (Aberdeen, N.)

    Champion, A. J.

    Farthing, W. J.

    Hughes, H. D. (W'lverh'pton, W.)

    Question put, "That the Clause be read a Second time."
    The Committee divided: Ayes, 97; Noes, 233.

    Hutchinton, H. L. (Rusholme)

    Nicholls, H. R. (Stratford)

    Stokes, R. R.

    Hynd, H. (Hackney, C.)

    Noel-Baker, Capt. F. E. (Brentford)

    Strauss, G. R. (Lambeth, N.)

    Jay, D. P. T.

    Noel-Buxton, Lady

    Stubbs, A. E

    Jeger, G. (Winchester)

    O'Brien, T.

    Symonds, A. L.

    Jeger, Dr. S. W (St. Pancras S. E.)

    Oldfield, W. H.

    Taylor, H. B. (Mansfield)

    Jones, D. T. (Hartlepools)

    Oliver, G. H.

    Taylor, R. J. (Morpeth)

    Keenan, W.

    Orbach, M.

    Thomas, I. O. (Wrekin)

    Kenyon, C.

    Paget, R. T.

    Thomas, John R. (Dover)

    Key, C. W.

    Palmer, A. M. F.

    Thomas, George (Cardiff)

    Kinghorn, Sqn.-Ldr. E

    Parker, J.

    Thomson, Rt. Hn. G. R. (Ed'b'gh, E.)

    Kinley, J.

    Parkin, B. T.

    Thorneycroft, Harry (Clayton)

    Kirby, B. V.

    Pearson, A.

    Tiffany, S.

    Lang, G.

    Peart, Capt. T. F.

    Tolley, L.

    Lavers, S.

    Perrins, W.

    Tomlinson, Rt. Hon. G.

    Levy, B. W.

    Piratin, P.

    Ungoed-Thomas, L.

    Lindgren, G. S.

    Plaits-Mills, J. F. F.

    Usborne, Henry

    Lipson, D. L.

    Poole, Major Cecil (Liksfield)

    Viant, S. P.

    Longden, F.

    Porter, E. (Warrington)

    Wadsworth, G.

    Lyne, A. W.

    Pritt, D. N.

    Walkden, E.

    McAllister, G.

    Randall, H. E.

    Wallace, H. W. (Walthamstow, E.)

    McEntee, V. La. T.

    Ranger, J.

    Webb, M. (Bradford, C.)

    McGhee, H G

    Robens, A.

    Wells, W. T. (Walsall)

    Mack, J. D.

    Roberts, Goronwy (Caernarvonshire)

    West, D. G.

    Mackay, R. W G. (Hull, N.W.)

    Robertson, J. J (Berwick)

    White, C. F. (Derbyshire, W.)

    McLeavy, F.

    Royle, C.

    Whiteley, Rt. Hon. W.

    MacMillan, M. K. (Western Isles)

    Sargood, R.

    Wilkes, L.

    Macpherson, T. (Romford)

    Scollan, T.

    Wilkins, W. A.

    Mainwaring, W. H.

    Scott-Elliot, W.

    Willey, O. G. (Cleveland)

    Mallalieu, J. P. W.

    Sharp, Granville

    Williams, D. J. (Neath)

    Manning, Mrs L. (Epping)

    Shurmer, P.

    Williams, J. L. (Kelvingrove)

    Marquand, H. A.

    Silverman, J (Erdington)

    Williams, W. R. (Heston)

    Mathers, G.

    Simmons, C. J.

    Wills, E.

    Medland, H. M.

    Skeffington, A. M.

    Wills, Mrs. E. A

    Mellish, R. J.

    Skeffington-Lodge, T. C.

    Wilmot, Rt. Hon. J.

    Middlleton, Mrs L.

    Smith, C. (Colchester)

    Wise, Major F. J

    Mitchison, Maj. G. R.

    Smith, H. N (Nottingham, S.)

    Woods, G. S.

    Moody, A. S.

    Smith, S. H. (Hull, S.W.)

    Yates, V. F.

    Morgan, Dr. H. B.

    Snow, Capt. J. W.

    Zilliacus, K.

    Morris, P. (Swansea, W.)

    Solley, L. J.

    Mort, D. L.

    Soskice, Maj. Sir F.

    TELLERS FOR ME NOES

    Moyle, A.

    Sparks, J. A.

    Mr. Michael Stewart and

    Murray, J. D.

    Steele, T.

    Mr. Popplewell.

    NEW CLAUSE.—(Forward dealings in foreign currency.)
    Nothing in this Act shall prohibit or be deemed to prohibit any authorised dealer from buying or selling any foreign currency for delivery at a date not exceeding six months forward on behalf of any person
    Provided that such foreign currency is bought or sold for the purpose of enabling such person to make provision for moneys due of receivable in respect of the import into, or the export out of, the United Kingdom of any goods or in respect of any charges relating thereto.—[Colonel Crosthwaite-Eyre.]
    Brought up, and read the First time.
    Colonel Crosthwaite-Eyre: I beg to move, "That the Clause be read a Second time."
    I do not wish to detain the Committee by making the case for the Clause in detail. On the Second Reading I dealt with the case in broad outline. To what I said then, I wish to add a single detail which was contained in an answer the Chancellor of the Exchequer gave to a Question asked by me on 3rd December. I asked him what were the currencies in which the Bank of England were prepared to grant forward exchange facilities and he replied:
    914
    "The Bank of England normally provide forward exchange cover for imports and exports up to six months in the following currencies:-U.S. dollars, Canadian dollars, French francs, Swiss francs, Swedish kronor, Dutch florins, Belgian francs, Danish kroner, Norwegian kroner, Portuguese estudos."—[OFFICIAL REPORT, 3rd December, 1946; Vol. 431, c. 32.]
    I think the Committee will agree that that is a big step. So far as this Committee is concerned, it is merely a question of the Bank of England choosing to which countries it will give foreign exchange facilities and to which it will prohibit them.
    The question we are raising in this new Clause is somewhat wider in application. The major objective to be attained is to facilitate our export drive and see that when any of our commercial enterprises does anything to provide foreign exchange, under this Measure the Bank of England—or whatever authority may be designated—will do all in its power to help that export. That is all we are asking. We know from the returns that at present there is a grave shortage of hard currency. There is a grave indication that unless the whole balance of our trade is changed, we shall be subjected in a very

    915
    short time to immense pressure by the dollar area. This proposed Clause offers a remedy for that position, and provides that if the authorised dealers are entitled to provide forward exchange facilities then, instead of the present position obtaining, the Government can guarantee the exporter's forward exchange position into the hard currency areas, and we shall have from the very start a different trading position.
    Secondly, I suggest to the Government that the exporter at the moment is subjected to a great many considerations, none of which the Government are prepared to meet. He is faced with the possible devaluation of currency; he is faced with the possible bankruptcy of the concern with which he is dealing; he is faced with a possible change of politics by the Government—and that consideration is greatly increased by the fact that a great number of people behind the Front Bench opposite are not by any means supporters of the foreign policy pursued by the Front Bench at the moment. He is faced, also, by the fact that he may have to make his arrangements for payments for exports a considerable time forward. There are no facilities granted at the moment, except for those currencies I have mentioned, whereby he can safeguard himself against possible revolution or devaluation. It is a situation in which any exporter who wishes to safeguard the position of his shareholders, or of those whom he employs, must at the moment make his exports to the sterling area, because unless he does that he has no safeguard whatsoever against what may happen in these countries. I admit that, so far as hard currencies are concerned, his position, if he obtains facilities, is more or less secure; but as regards soft currencies, his position is absolutely insecure.
    Suppose, for example, we have a British exporter trying to export to Portugal. I know of one such case. There are no facilities whatever provided by the Government—in spite of the assurance given by the Chancellor of the Exchequer—whereby this firm of exporters can in any sense offset, over a year or 18 months, the liability which may accrue through any variation in value. The exporter has nothing to help. He has got to take his chance. I know that the learned Solicitor-General or the Financial Secretary will reply that it should be the duty of exporters
    916
    to try to make their bargains in terms of sterling, but the fact remains that it is impossible at the moment for an exporter to lay down as a condition of contract that sterling shall be the exchange in order to pay. We have got to remember in this Committee that, whereas a few years ago sterling was currency any country would accept, or in which any contract or bargain could be made, today's sterling, for reasons which have been more than apparent during the course of the discussion of this Bill, is not currency in which anybody is prepared to take anything on as a bargain. That is an effect of the war; it is an effect of this Bill. It has nothing to do with present argument; but it does mean that, whereas in the past one has been able in most cases as an exporter to say, "This bargain will be concluded in sterling," today one is unable to say that, and one has got to face the terms of delivery in whatever may be the legal currency in regard to a particular export.
    I do not think I need invite the Committee's attention to more instances of the past than one, the case of Dorman, Long's when they built the Sydney Harbour bridge. There was a case in' which we were unable to make whatever provision was necessary in the forward exchange, and just because the Australian Government—I must say quite frankly—was a Socialist Government, or the equivalent of a Socialist Government, the Australian pound depreciated suddenly 25 per cent., and Dorman, Long, in spite of bringing back to this country an increase in foreign exchange, because of their efforts and their design of that bridge—which is one of the greatest engineering feats in the world—suffered an immeasurable loss, simply because there were not sufficient forward exchange facilities to cover that particular job.
    11.45 p.m.
    If we turn to imports, one of the things in which the Minister of Food is most concerned is to try to allow private enterprise to import from the soft currency areas. We have, for instance, imports of food from Spain. Under the existing regulations there are no forward exchange facilities to help the importer, and I think it will be agreed in all parts of this Committee that the importers of food from Spain are doing something to help the present food shortage. These imports are not controlled by the Government. They

    917
    are the result of free enterprise on the part of people who are prepared to stake their own claim, on their knowledge and on their own commercial judgment. The Government give them no help whatsoever to protect themselves against any spoilage, wastage, or depreciation that may occur between the time they make their bargain with the Spanish holders of the goods and the time they arrive in this country. The sole object of this Clause is to try to provide facilities for exporters and importers to compete worthily in endeavouring to solve our problems. Our object is to ensure that the people who are taking part in securing currency for this country should have facilities to protect themselves from a loss which is quite outside their control. Our importers, those outside the Government programme who are willing to stake their ability on getting goods and bringing them in to help the community, should be provided with facilities to offset any loss which, equally, is outside their control.
    In conclusion, I would point out that in America all the forward exchange facilities which are necessary are available to enable them to compete throughout the world. They have a free forward exchange; they are able, in so far as their import and export programme is concerned, to set off any liability that any particular exporter or importer may incur. In this country there is nothing like it. We are merely told that there are a limited number of currencies in which the Bank of England may deal, and that outside that each case is treated on its merits. We know what "Each case is treated on its merits" means. It merely means that it goes from one department of the Treasury to the Board of Trade, from the Board of Trade back to the Treasury, from the Treasury to somewhere else, and nothing ever happens. I have had occasion to see that myself, and we simply cannot compete in this modern world unless we are prepared to provide for the people who are getting us the exchange we need to buy the goods we must have the facilities that our competitors give. Therefore I ask the Committee to accept this Clause, because by so doing they will be in no sense invalidating any of the provisions of this Bill but instead, for once, will be doing something positive to help the export drive, and instead of making this Bill merely a black mark on the Statute Book, they will give it a positive power.
    Sir Frank Sanderson: I support this Clause, and I find it difficult to believe that the Government will not see their way to accept it. All those who have experience of the export trade know full well that goods are sold for delivery three to six months and in given circumstances up to two or three years ahead, and if it is not possible for a manufacturer or an exporter to cover his Exchange against the sale he makes for a forward position, it can only result in one thing. It will mean that this country will not be able to compete favourably against other countries in the export markets. If this Clause is not accepted, I believe it will toe the greatest blow that the Government can strike against our export trade. I regard it as vital that a Clause of this character should be inserted in the Bill. As I have said, failing that, it will not be possible for this country to compete in the markets of the world. I recall that a few years after the former world war, some of us assumed the responsibility of exporting goods to Russia. It will be known by some that in those days it was necessary to give a five-year credit, but it was possible to cover exchange. How is it going to be possible in the future for a manufacturer in this country to sell goods for forward delivery, if he is not able at the same time to cover the exchange? I hope that if the Government are unable to see their way to accept this Clause, they will give an undertaking that they will favourably consider an appropriate Clause covering the point raised between now and the Report stage.
    The Solicitor-General: The real object of this new Clause is, as I read it, to provide that, in respect of foreign currency forward, there should be no control at all. If there is no control in respect of foreign currency forward, it seems quite illogical and absurd to have Clause 1 of the Bill. Why should we introduce into the Bill a control over the immediate provisions of foreign currency, and make the future provision of foreign currency completely free from control? That position would be utterly nonsensical. If hon. Members opposite had moved an Amendment to Clause 1 of the Bill, this Clause would, at least, have been intelligible, but to propose this Clause after allowing Clause 1 to go into the Bill, is completely illogical—it is a contradiction. If pro-

    919
    vision of foreign currency is to be controlled, and it obviously must be—and no one suggests that it should not be—then obviously the control should extend not only to the immediate future, but also to all currency at any time in the future.
    Colonel Crosthwaite-Eyre: If that argument is true, would the Solicitor-General state why it is that the Chancellor is prepared to give foreign exchange facilities, in certain limited currencies, up to six months? That must invalidate his argument equally.
    The Solicitor-General: On the contrary, what I was saying is that there should be power of control, but there should be relaxation of that control administratively, and forward exchange facilities are provided by administrative relaxation, as indicated by the Chancellor of the Exchequer in answer to the hon. and gallant Member, on 3rd December. Administratively, forward exchange facilities are provided up to a period of six months in the limited list of currencies. But that list is not exhaustive, other currencies are considered on their merits. The list which is available does meet requirements of most traders, so far as my knowledge goes. In so far as their requirements are not met other currencies can be included, and I can tell the Committee that there have been no complaints, either during or since the war, in regard to the provision of currencies other than those included in the limited list. The terms on which foreign currency is provided for administratively are more generous to the trader than those which would be imported into the Bill if the Amendment were accepted. They differ in various respects. The Amendment seeks to provide that foreign currency should freely be made available without any control in respect of import and export. In actual fact foreign currency is provided forward for any bona fide commercial transaction, whether import or export, so the relaxation, as framed, is on more generous lines than the provision which the hon. and gallant Member would contain in his new Clause.
    There are other differences; there are also qualifications. The provision of foreign currency is on the condition that it is not for swop purposes. A form has to be filled in so that foreign currency can be procured. This system has been in
    920
    operation through the war and since without any complaint, and traders, so far as can be ascertained, are perfectly satisfied with its operation. Instructions are about to be issued to the banks crystallising the system which now operates and defining the conditions under which foreign currency is to be provided for forward trans actions. In those circumstances, the question is whether a case has been made out for making an exception on the general principle that administrative machinery should not be incorporated in the provisions of the Bill itself. Members on both sides have accepted the general scheme of the Bill, which is to impose general control, and then relax. Members who have supported the new Clause are asking that for some reason or other there should be an exception made to that general principle in case of the forward provision of foreign currency. The terms on which foreign currency can be provided on a forward basis must involve questions of considerable technical application. Changes may be necessary from time to time. This is particularly an example of machinery in which change might be necessary from time to time, and it would be most unfortunate to endeavour to introduce into the Bill this particular case, because it is complicated. It may need change, and there is no reason why this particular piece of machinery should be singled out when, from its very nature, it is far less suitable than many other types of administrative machinery which will have to be applied. No case has been made out for the Amendment. Forward exchange facilities are provided. May be the hon. and gallant Gentleman is right in his case that they should be provided on more general lines, or he may be wrong, but that is not the question which arises out of this Clause. It introduces different questions than whether hon. Members are right or not in their contention that there should be more generous provision of foreign currency for forward transactions. For these reasons this Clause should not stand part of the Bill.
    12 m.
    Mr. Assheton: I think the Committee have enjoyed the speech by the hon. and gallant Member for the New Forest and Christchurch (Colonel Crosthwaite-Eyre)

    921
    and the very careful presentation which he made of his case. I listened with great care to the speech of the Solicitor-General, in reply and I appreciate the point which he makes. Although the only object of this Clause is to facilitate trade, its actual terms make it difficult for the Government on their view of the Bill to accept it; I hope, none the less, that the Solicitor-General will convey to the Chancellor of the Exchequer and the Treasury the grave anxiety expressed by those who have spoken in this Debate. If one cannot have reasonable facilities for forward exchange, it is impossible to do business in a big way with foreign countries. Anyone with experience of importing and exporting knows that. There is considerable anxiety in commercial circles on this score, and I hope the Treasury will do their best to see that more arrangements for forward exchange for soft currency countries are provided.
    The Solicitor-General: I willingly give that assurance. I assure the Committee that the provisions for forward currency will be kept under review, and I will convey what has been said in this Debate to my right hon. Friend.
    Question, "That the Clause be read a Second time," put, and negatived.

    FIRST SCHEDULE.—(The Scheduled Territories.)
    Motion made, and Question proposed, "That this be the First Schedule to the Bill."
    Mr. J. Foster: I have one short question to put on this Schedule Paragraph 2 states:
    "Any Dominion within the meaning of the Statute of Westminster, 1931, except Canada and Newfoundland."
    Do the Government accept the statement in this that Newfoundland is a Dominion?
    Mr. Dalton: That has not been argued and has not been put in the Schedule.
    Question put, and agreed to
    Second Schedule agreed to.

    THIRD SCHEDULE.—(Blocked Accounts.)
    Motion made, and Question proposed, "That this be the Third Schedule to the Bill."
    Mr. Eccles: I had an Amendment on the Paper to this Schedule but perhaps I can raise the point in the form of a question now. In regard to paragraph 4 I wanted to know what is the position in regard to the investments which may be prescribed. Is it possible for any holder of blocked accounts to spend or will this be sterling property?
    The Solicitor-General: The position will be as it is now in Statutory Rule and Order 1598 of 1946. That is to say, broadly speaking the blocked account
    "must be registered as those which are purchased on any recognised stock exchange in the United Kingdom or, in the case of securities issued by His Majesty's Government, are either so purchased or are acquired by subscription, and are irredeemable or are not redeemable before the expiration of the period of ten years beginning with the date of such purchase or"
    That is the position in the present Statutory Rule and Order and that position will be continued.
    Question put, and agreed to.
    Fourth Schedule agreed to.

    FIFTH SCHEDULE.—(Enforcement.)
    Colonel Crosthwaite-Eyre: I beg to move, in page 37, line 12, to leave out sub-paragraph (2).
    This Amendment is consequential on one moved previously. We cannot conceive why these powers should be considered necessary. The powers which are taken here seem completely unreal in relation to anything which may be needed by the Treasury. If the Committee read this paragraph, they will see that practically anything except the shooting of an offender at dawn can be done by order of the Chancellor of the Exchequer. I have no doubt that the Chancellor, like myself, would be unwilling to get up at dawn to shoot anybody, but I would emphasise the position which we have reached on this Bill. The Government wished to secure powers to do anything they like and when asked whether it is necessary to have these powers, they always say, or at least, the Chancellor always says, "We may catch a crook." I am prepared to grant the Chancellor that if there is anybody who can catch a crook, he can. In fact if ever he were on my trail. I should come down at once. But because that is so, it does not follow that these powers are

    923
    necessary This paragraph gives powers, not to catch a crook, but to enable any possible successor to the Chancellor, be he on this side or the other side, to inflict on the ordinary citizen of this country restrictions which are quite out of place in regard to anything which this Bill is designed to effect.
    We on this side admit that it is essential for any Chancellor of the Exchequer to have powers under which he can defend the sterling currency, but that does not mean that any Chancellor is entitled to ask for powers which may catch a crook. I must say that if ever there were a betting tax, I should be prepared to back the right hon. Gentleman against all runners. But he must limit himself in his ambitions to catch a crook and act only where it is necessary, in keeping with the general trend of the legislation of this country. To ask for these powers in this Schedule is going farther than is normal. A provision of this sort, or at least something very similar to it, was included in the last Bill which the Chancellor brought before the House, the Borrowing (Control of Investments) Hill, and as a result of considerable discussion, it was excluded. Why does the Chancellor consider it necessary to bring it up again? Is he not satisfied that he ran the horse last time as far as it could run? [Interruption.] Of course, it is known that hon. Members on that side of the Committee encourage greyhound racing, but that is beside the point. Why is it necessary to bring back this particular provision? It has failed once, and we on this side feel that the Bill without this sort of provision would be far more efficient and far more liable to get the confidence of the people of this country as a whole.
    The Solicitor-General: The hon. and gallant Gentleman has been very vocal in his complaint with regard to these powers. I hope he will give me his attention. The provision which confers these powers on the Government was modelled on Section 26 of the Firearms Act. That Act was passed in 1937. A Conservative Government apparently was quite ready to assume these powers, but in point of fact that Conservative Government of 1937 which assumed these powers was not creating any violent precedent, because the same powers, or virtually the same powers, were included in the Customs
    924
    (Consolidation) Act of 1876. If the hon. Gentleman will take the trouble to look at Sections 182, 184 and 205 of that Act, passed in 1876, he will find the source of inspiration which has been drawn upon for these powers. He is discovering nothing very new. He referred to his inexperience. I do not know in what particular sphere. I suggest he should get more experience of Conservative legislation before he criticises a Labour Government for doing what a Conservative Government has done before.
    Mr. Stanley: I hope that I may be excused for performing for a short while what is a public duty, and that is trying to bring the Socialist Government up to date. I find it unnecessary to go back to 1876. I think that, of course, was about the time of Marx. No doubt for hon. and right hon. Gentlemen opposite that is a period to which they turn for their inspiration. But may I ask the learned Solicitor-General to look at a rather more recent experience? He may recollect a Bill called the Borrowing Bill. It started, I think, by being called the Control of Investments Bill, but during its passage through this House it changed its name. In my recollection, there was a provision similar to this in that Bill I think I am not wrong in saying that we then made an appeal to the Solicitor-General, as we are doing now. We warned him that, although he of course was given by the Chancellor of the Exchequer no flexibility—"His not to reason why, his but to do or die"—that when the Bill got to another place, and came under the review of the Lord Chancellor, who exacts more and more respect for his legal decisions, the Chancellor of the Exchequer might suffer a reverse. I think I am correct in saying that either in its passage through this House, or in another place, this provision was withdrawn from the Borrowing Bill.
    The Solicitor-General The Solicitor-General indicated dissent.
    Mr. Stanley: The hon. and learned Gentleman says that is not so—that it is still in the Borrowing Bill.
    The Solicitor-General The Solicitor-General indicated assent.
    Mr. Stanley: This is a matter of considerable importance—far more recent than 1876. Will the learned Solicitor-General say "Yes" or "No"? Would it not be better if, in order to avoid putting either the right hon. Gentleman in an

    925
    ambiguous position in this House, or the Lord Chancellor in an awkward position in another place, the learned Solicitor-General said that he would look up this most respectable precedent of the Borrowing Bill of last year? Will he look it up and see if in fact it is the case that during our proceedings a provision similar to this was either withdrawn or amended?

    Division No. 34.

    AYES

    12.15 a.m.

    Adams, Richard (Balham)

    Farthing, W.J.

    Noel-Baker, Capt. F. E. (Brentford)

    Adams, W. T. (Hammersmith, South)

    Field, Captain W. J.

    Noel-Buxton, Lady

    Alexander, Rt. Hon. A. V.

    Fletcher, E. G. M. (Islington, E.)

    O'Brien, T.

    Allen, A. C. (Bosworth)

    Follick, M.

    Oldfield, W. H.

    Allen, Scholefield (Crewe)

    Foot, M. M.

    Oliver, G. H.

    Attewell, H. C.

    Gaitskell, H. T. N.

    Orbach, M.

    Awbery, S. S.

    Gibson, C. W.

    Paget, R. T.

    Ayrton Gould, Mrs B.

    Gilzean, A.

    Palmer. A. M. F.

    Bacon, Miss A.

    Granville, J. E. (Consett)

    Parker, J.

    Baird, J.

    Gordon-Walker, P. C.

    Parkin, B. T.

    Barstow P. G.

    Greenwood, A. W. J. (Heywood)

    Pearson, A.

    Barton, C.

    Grey, C. F.

    Perrins, W.

    Battley, J. R.

    Grierson, E

    Piratin, P

    Bechervaise, A. E.

    Griffiths, D (Rother Valley)

    Platts-Mills, J. F. F.

    Benson, G.

    Gunter, R. J.

    Pocle, Major Cecil (Lichfield)

    Bing, G. H. C.

    Haire, John E (Wycombe)

    Popplewell, E.

    Blackburn, A. R.

    Hale, Leslie

    Porter, E. (Warrington)

    Blenkinsop, A.

    Hall, W. G.

    Pritt, D. N.

    Blyton W. R.

    Hamilton, Lieut-Col. R.

    Randall, H. E.

    Boardman, H.

    Hardy, E. A.

    Ranger, J.

    Bowden, Flg.-Offr H. W.

    Hastings, Dr Somerville

    Robens, A.

    Bowen, R.

    Hewitson, Capt. M.

    Roberts Goronwy (Caernarvonshire)

    Bowles, F. G. (Nuneaton)

    Holman, P.

    Robertson, J. J. (Berwick)

    Braddock, Mrs. E. M. (L'pl, Exch'ge)

    Holmes, H. E. (Hemsworth)

    Royle, C.

    Braddock, T. (Mitcham)

    House, G.

    Sargood, R.

    Bramall, Major E. A.

    Hoy, J.

    Scollan, T.

    Brook, D (Halifax)

    Hudson, J. H. (Eating, W.)

    Scott-Elliot, W.

    Brooks, T. J. (Rothwell)

    Hushes, Hector (Aberdeen. N.)

    Shurmer. P

    Brown, T. J. (Ince)

    Hughes, H. D. (W'lverh'pton, W.)

    Silverman, J. (Erdington)

    Bruce, Maj. D. W. T.

    Hutchinson, H. L. (Rusholme)

    Simmons, C. J.

    Burden, T. W.

    Hynd, H. (Hackney. C.)

    Skeffington, A. M.

    Burks, W. A.

    Jay, D P T

    Smith, C. (Colchester)

    Callaghan James

    Jeger G. (Winchester)

    Smith. H. N. (Nottingham, S.)

    Champion, A.J.

    Jeger, Dr S. W. (St Pancras. S.E.)

    Smith S. H.(Hull,. S W.)

    Clitherow, Dr. R.

    Jones, D. T. (Hartlepools)

    Snow, Capt. J. W.

    Cobb, F. A.

    Kesnan, W.

    Solley, L. J.

    Cooks, F. S.

    Kenyon, C.

    Soskice, Maj. Sir F.

    Coldrick, W.

    Key, C. W.

    Stewart Capt. Michael (Fulham, E.)

    Collick, P.

    Kinghorn, Sqn.-Ldr. E.

    Stokes, R. R.

    Collindridge, F.

    Kinley, J.

    Stubbs, A. E.

    Collins. V. J.

    Kirby, B. V.

    Symonds, A. L.

    Colman, Miss G. M.

    Lang, G.

    Taylor, H. B. (Mansfield)

    Comyns, Dr. L.

    Layers, S.

    Taylor. R. J. (Morpeth)

    Cooper, Wing-Comdr. G.

    Levy, B. W.

    Thomas, I. O. (Wrekin)

    Corbet, Mrs F. K. (Camb'wett, N. W.)

    Lindgren G. S.

    Thomas, John R (Dover)

    Corlett, Dr. J.

    Longden, F.

    Thomas, George (Cardiff)

    Cove, W. G.

    Lynd A. W.

    Thorneycroft, Harry (Clayton)

    Crawley, A.

    McAllister, G.

    Tolley, L.

    Crossman, R. H. S.

    McGhee, H. G.

    Wadsworth, G.

    Daggar, G

    Mack J. O.

    Wallace, H. W. (Walthamstow, E.)

    Daines, P.

    Mackay, R. W. G. (Hull. N.W.)

    Webb, M. (Bradford, C.)

    Dalton, Rt. Hon H.

    McLeavy, F.

    White. C. F. (Derbyshire, W.)

    Daviet, Edward (Burslem)

    MacMillan, M. K. (Western Isles)

    Whiteley, Rt. Hon. W.

    Davies, Ernest (Enfield)

    Macpherson, T (Romford)

    Wilkes, L.

    Davies, Harold (Leek)

    Mainwaring, W. H.

    Wilkins, W. A.

    Deer, O.

    Mallalieu, J. P. W.

    Willey, O. G. (C'eve'and)

    Diamond, J.

    Maning, Mrs L. (Epping)

    Williams, J. L. (Kelvingrove)

    Dobbie, W.

    Marquand, H. A.

    Williams, W. R. (Heston)

    Dodds, N. N.

    Mathers, G.

    Willis, E.

    Donovan, T.

    Medland, H. M.

    Wills, Mrs. E. A.

    Driberg, T. E. N.

    Mellish, R. J.

    Woods, G. S.

    Dye, S.

    Mddleton, Mrs L.

    Yates, V. F.

    Ede. Rt. Hon. J. C.

    Mitchison, Maj. G. R.

    Zilliacus, K.

    Edwards N (Caerphilly)

    Morris, P. (Swansea. W.)

    Evans, E. (Lowestoft)

    Mort, D. L.

    Evans, John (Ogmore)

    Moyle, A

    TELLERS FOR THE AYES:

    Evans, S. N. (Wednesbury)

    Murray, J. D.

    Mr. Joseph Henderson and

    Ewart, R.

    Nicholls, H. R. (Stratford)

    Mr. Hannan.

    Will he at a further stage reconsider this position, and bring himself into line on what happened last year?
    Question put, "That the words proposed to be left out stand part of the Schedule."
    The Committee divided: Ayes, 199; Noes, 83.

    NOES.

    Agnew, Cmdr, P. G.

    Fletcher, W. (Bury)

    Neven-Spence, Sir B.

    Amory, D. Heathcoal

    Foster, J. G. (Northwich)

    Nield, B. (Chester)

    Assheton, Rt. Hon. R

    Fox, Sir G.

    Noble, Comdr. A. H. P.

    Astor, Hon. M.

    Fraser, Sir I. (Lensdale)

    Peto, Brig C. H. M.

    Baldwin, A. E.

    Fyfe, Rt Hon Sir D. P. M.

    Pitman, I. J.

    Barlow, Sir J.

    Gage, C.

    Prescott, Stanley

    Birth, Nigel

    Gates, Maj E. E.

    Price-White, Lt. Col. O.

    Boles, Lt.-Col. D. C. (Wells)

    Gomme-Duncan, Col. A. G

    Prior-Palmer, Brig. O.

    Bossom, A. C.

    Grant, Lady

    Rayner, Brig. R.

    Bower, N.

    Gridley, Sir A.

    Renton, D.

    Boyd-Carpenter, J. A.

    Hare, Hon. J. H. (Woodbridge)

    Roberts, H. (Handsworth)

    Braithwaite, Lt.-Comdr, J. G.

    Holmes, Sir J. Stanley (Harwich)

    Sanderson, Sir F.

    Bromley-Davenport, Lt.-Col. W.

    Hope, Lord J.

    Shepherd, W. S (Bucklow)

    Buchan-Hepburn, P. G. T.

    Hudson, Rt. Hon. R. S. (Southport)

    Stanley, Rt. Hon. O.

    Carson, E.

    Hulbert, Wing-Cdr. N J.

    Stoddart-Scott, Col. M.

    Clarke, Col. R. S.

    Joynson-Hicks, Lt.-Cdr Hon L. W.

    Strauss, H. G. (English Universities)

    Clifton-Brawn, Lt.-Col. G

    Keeling, E. H.

    Stuart, Rt. Hon. J. (Moray)

    Conant, Maj. R. J. E.

    Lambert, Hon. G.

    Taylor, C. S. (Eastbourne)

    Cooper-Key, E. M.

    Legge-Bourke, Maj. E. A. R.

    Teeling, William

    Corbett, Lieut. Col. (J. (Ludlow)

    Lindsay, M (Solihull)

    Thomas, J P. L (Hereford)

    Crosthwaite Eyre, Col. O. E.

    Lucas, Major Sir J.

    Touche, G. C.

    Cuthbert, W. N.

    Lucas-Tooth, Sir H.

    Turton, R. H.

    Davidson, Viscountess

    Mackeson, Brig. H. R.

    Wheatley, Colonel M. J.

    De la Bère, R.

    Macmillan, Rt. Hon. Harold (Bromley)

    Willoughby de Eresby, Lord

    Digby, S. W.

    Maitland, Comdr. J. W.

    York, C

    Eccles, D. M.

    Manningham-Buller, R. E.

    Young Sir A S. L. (Partick)

    Elliot, Rt. Hon. W. E.

    Marlowe, A. A. H.

    TELLERS FOR THE NOES:

    Erroll, F. J.

    Marshall, D. (Bodmin)

    Mr. Drewe and Major Ramsay.

    Mellor, Sir J

    Schedule agreed to.

    SIXTH SCHEDULE.—(Orders Not Required to be Laid before Parliament.)
    The Deputy-Chairman (Mr. Hubert Beaumont): I think it would be for the convenience of the Committee if we discussed together all four Amendments to this Clause, which propose to leave out paragraphs 1, 3, 5 and 7 respectively
    Colonel Crosthwaite-Eyre: I beg to move, in page 42, line 17, to leave out out paragraph 1.
    I understand that the Chancellor has something to say on this matter, and, therefore, I do not wish to detain the Committee in proposing this Amendment. I would ask the right hon. Gentleman to remember that it does give the Government power, at any stage, to make any currency specified currency, without reference to the House. It is necessary I submit for His Majesty's Government to remember that, however well they may think they administer this power, that is no reason for making it permanent. I know that the Chancellor is one of those people who was born to immortality rather than given it, but that does not mean that when some Herodotus comes to write his life the same immortality will be granted him. He can always look behind him to the hon. and learned Member for Gloucester (Mr. Turner-Samuels) as one of those who are going to succeed him. Therefore we on this side of the
    928
    Committee, who are slightly frightened by that possibility—particularly as we have seen throughout the discussions on this Bill, the hon. and learned Member whispering in the right hon. Gentleman's ear and guiding him from time to time—wish to be guarded against it I hope the Chancellor will be able to meet, not only this very real objection, that currency may be specified without any reference to the House, but will also consider these other Amendments. I hope he will be able to give us a general assurance to remove our fears and that it will not be necessary for us to detain the Committee any longer.
    Mr. Dalton: I can respond to the hon. and gallant Gentleman's amiable and eloquent request to abbreviate Business, by saying that all these matters have been discussed at earlier stages. Perhaps, I may, therefore, be excused from repeating the arguments. I indicated that we would examine them all, and we have done so. I am prepared to accept the first Amendment, which has just been moved, with regard to specifying foreign currencies, thereby making any Treasury Order governing this matter subject to negative Resolution. I gather it is the wish of the Committee that I should also indicate our attitude on each of the other Amendments. The Amendment to leave out paragraph (5) would not be advantageous for us to accept, because it would involve naming particular persons and

    929
    firms in an Order before the House of Commons, and that would not be for the convenience of those concerned. I would ask hon. Members not to press it
    12.30 a.m.
    I say then that we are prepared to accept that Orders declaring any currency to be a specified currency shall be laid, subject to negative Resolution. We accept that. With regard to the omission of paragraph 3—
    "Any order directing that section seventeen of this Act shall apply to any securities."
    We will accept that. With regard to paragraph 5—
    "Any order specifying persons who are to be authorised dealers or authorised depositaries."—
    as I say, we think it is best that it should stay in the Schedule. We think it invidious to mention names of persons in an Order. We do not think that is called for. With regard to paragraph 7—
    "Any order prescribing the investments in which sums standing to the credit of a blocked account may be invested."—
    we are prepared to accept the Amendment to omit that. Having accepted 75 per cent. of what is desired, I hope that the Committee will see their way to come to a decision.
    Lieut.-Commander Braithwaite: I am sure that hon. Members on this side, as indeed hon. Members on the other side who have been following the proceedings, will be grateful to the right hon. Gentleman for this very remarkable outburst of generosity I rise to ask a question arising out of what took place earlier, when we mentioned the question of the definition of authorised depositaries being enlarged to include certain professions, such as stockbrokers, solicitors and so on. The right hon Gentleman said that it would be appropriate to raise this matter at this stage Perhaps he would now prefer that it should stand over until we reach the Report stage. If that is so, I would point out that in the case of stockbrokers there is an important matter here for consideration The right hon. Gentleman mentioned that it might be possible to hold securities for a matter of 30 days—
    Mr. Dalton: For temporary use.
    Lieut.-Commander Braithwaite: The right hon. Gentleman will agree it is not an exaggerated possibility that a death
    930
    may take place after a deal has been set on foot, and before its completion. It is usual for a stockbroker to hold securities while carrying out valuation probate which is often a fairly lengthy procedure, and then proof of death has to be lodged with each individual company. The right hon Gentleman will realise that this is often a prolonged matter, and I should be glad if between how and the Report stage, he would look at the matter.
    Mr. Dalton: Certainly.
    Amendment agreed to.
    Further Amendments made:
    In page 42, line 17, leave out paragraph 3.—[Mr. Assheton.]
    In page 42, line 28, leave out paragraph 7.—[Mr. Eccles.]
    Motion made, and Question proposed, "That the Schedule, as amended, be the Sixth Schedule of the Bill."
    Mr. Assheton: Will the Chancellor be good enough, at a later stage of the Bill to deal with the exchange-market dealers?
    Mr. Dalton: Yes, Sir.
    Question put, and agreed to
    Bill reported, with Amendments; as amended, to be considered upon Thursday, and to be printed. [Bill 21.]

  COTTON (CENTRALISED BUYING) [MONEY]
  Considered in Committee, under Standing Order No. 69.
  [Mr. HUBERT BEAUMONT in the Chair]
  Motion made, and Question proposed,
  "That, for the purposes of any Act of the present Session to make provision for centralised buying, selling and distribution of raw cotton and for the establishment of a Commission for that purpose (in this Resolution referred to as 'the Act'), it is expedient to authorise—

  (a) The issuing out of the Consolidated Fund of sums for periodical advances to the said Commission as follows, that is to say—

  (i) for the purpose of meeting outgoings of theirs properly chargeable to revenue account, advances such that the aggregate outstanding at any time in respect thereof, and of such part of the net value of assets transferred to them by virtue of the Act as may be treated thereunder as an initial advance for that purpose, shall not exceed

  931
  the aggregate of that part of that net value and seventy-five million pounds, and

  (ii) for the purpose of meeting outgoings of theirs properly chargeable to capital account, advances not exceeding in the aggregate ten million pounds (reckoned without bringing into account such part of the net value of assets transferred to them by virtue of the Act as may be treated thereunder as an initial advance for that purpose),

  subject to provision for the making of payments by them to the Board of Trade by way of interest on such initial and periodical advances and of repayment thereof.

  (b) The issuing out of the Consolidated Fund, for payment to the said Commission and credit to their reserve fund, of a sum representing the net profit accruing to the Board of Trade from the discharge of their raw cotton functions on or after the first day of April, nineteen hundred and forty-six, determined having regard to all relevant considerations including the net value of assets transferred as aforesaid.

  (c) The raising of money by the Treasury, in any manner in which they are authorised to raise money under the National Loans Act, 1939, for the purpose of providing sums to be issued out of the Consolidated Fund as mentioned in this Resolution or of providing for the replacement of sums so issued.

  (d) The payment into the Exchequer of payments to be made as aforesaid by the said Commission to the Board of Trade, the issue out of the Consolidated Fund of sums paid into the Exchequer representing such payments, and the application of sums so issued in redemption or payment off of debt, or, in so far as they represent interest, in payment of interest otherwise payable out of the permanent annual charge for the National Debt."—[Mr. Marquand.]—(King's recommendation signified.)

  12.37 a.m.
  Mr. R. S. Hudson: We are being asked by this Resolution to authorise the payment out of the Consolidated Fund, that is to say, by the taxpayers of the country, of formidable sums to achieve the purposes of the Cotton Commission. Discussion of a Money Resolution is limited, and I shall do my best to try to remain within the Rules of Order, even though the task may be somewhat difficult. We have had two days' discussion on this subject, during which the question was debated very largely on a technical level, and in technical terms, and I shall try to put the objections which we on this side entertain into as simple language as possible.
  The purpose of the Commission was defined by the Secretary for Overseas Trade as having the duty of equalising
  932
  its outgoings and its income over the average of the good and bad years. Subject to that, it was to achieve a long term stability in the price of raw materials. The question we have to consider tonight is whether the provision of the very large sums visualised in this Resolution will achieve the aim set out by the Secretary for Overseas Trade and, at the same time, achieve it without excessive cost to the taxpayer. Can the Commission equalise, or be expected to equalise, its income and outgoings over the average of good and bad years, and at the same time serve the best interests of the cotton industry? I am inclined to doubt it. The Working Party stated that the industry must be able to buy its cotton in the cheapest available market, and avoid being placed at a disadvantage with other countries so far as the actual price of cotton is concerned. The essential part of that is the price paid by the English buyer compared with the price at which the foreign buyer is able to obtain that cotton.
  Well, what has happened? Today spinners are in fact paying 1½d. to 2d. a 1b. over the price that competitors have to pay who have access to free markets. Presumably we may say that the result of that is that the Commission and through them the taxpayers under the terms of this Resolution are making money and to that extent it is a good thing from the taxpayers' point of view. But that argument has been countered by Members of the Government who say "Oh no. When you consider today that the spinners are paying 1½d. or 2d. a pound more than the open market world price, you must concede that for a considerable time beforehand he was paying considerably less", and to that extent the taxpayer is suffering. I suggest that two wrongs do not make a right, and when the taxpayer is suffering as he is today, it is no consolation to him to know he was making a profit previously.
  Let us now consider the profit or surplus of £24,000,000 which, is inherent in this resolution. That is a purely paper profit or surplus. I think I am correctly interpreting the view of the Members of the Government, certainly as far as I understand them, in saying that as the sale of cotton at lower prices continues the profit will disappear. What happens if the process continues and the world price drops

  933
  faster than sales? There will be a loss which will fall to be repaid by the Commission, in the terms of the Resolution. Both the taxpayer and the spinner will suffer in that case. And in that case we shall be interested to hear from the Secretary for Overseas Trade how the provisions of the last sub-paragraph in the Resolution can be carried out.
  The second argument put forward in favour of providing these large sums of money is that it will result in stability of prices, and of raw materials. The Chancellor of the Exchequer argued that it was one of the disadvantages of the prewar system that in the years 1929 to 1939 cotton fluctuated between 45 and 60 per cent. But what has happened under control. We have had a wider fluctuation. In 1944 there was an increase overnight and I stress that it happened overnight, of 4½d. a lb., which represented an increase on East Indian cotton of 100 per cent. and on Egyptian cotton of 35 per cent. On the 31st October, prices were increased overnight by 5¾d. a lb. It so happened by a piece of irony that that increase coincided with a world drop in America of 4d. The taxpayers through the Commission are going to be asked to guarantee stability and I should like to ask the Government whether they think it possible to guarantee stability of prices, when we are dealing with an article subject to enormous variations from time to time in crop Not only is there the weather, the boll weevil or the increase or decrease in yield, but it is one of the crops in the world subject to the widest fluctuations of yield. I need only instance the fact that from one year to another the cotton crop in the United States varied from 9 million to 18 million bales.
  12.45 a. m.
  During all our discussions we have had no answer yet on how the Commission is going to achieve stability. All that we have had is a statement from the Government that it is hoped that this stability will be achieved. It is usual, perhaps, on these occasions, to quote "Alice in Wonderland," and I would suggest that to-night we ought to be reminded of that passage:
  "I've said it once, I've said it twice, I've said it thrice, It must be true."
  Another important claim put forward is that this new system will give safeguards to the buyer against, price fluctuations because there will be a cover.
  934
  It will give cover against price fluctuations, but at whose expense? At the expense of either the taxpayer or the consumer, or both. I do not think that that will be denied by the hon. Gentleman It must be remembered that neither the taxpayer nor the consumer had to foot this bill when the Liverpool Cotton Exchange was in operation. Nor does this scheme assure the unfortunate spinner of being able to buy his cotton as his foreign competitor can do.
  I turn now to the important question of sampling, which affects both the revenue and the expenditure of the Commission. There again, there is likely to be direct conflict betwen the Commission representing the taxpayer, and the spinner as the consumer of the raw material Lancashire will be more dependent than ever before on the quality of its goods in the future years, and the Commission being human, will, when it has enormous stocks of cotton on hand, be much more anxious to get the spinner to accept a sample of what is in stock than to give the spinner what he really wants. The personal touch and the needs of the producer will be things entirely lost, and I would remind hon. Members that after all this money which is to be put up has been paid out, our foreign competitor will still enjoy those advantages which we Have lost.
  I turn to the international issue, which may appeal more to hon. Members opposite. What is to be the effect abroad? The Secretary for Overseas Trade, who is responsible for our overseas business, ought to regard this with considerable concern. What is to be the effect abroad of the Government putting this enormous potential power into the hands of a single corporation? The President of the Board of Trade defended the scheme on the ground that a big buyer can buy more cheaply. He added that we were giving maximum assistance, not to the producer, but to the cotton industry of Lancashire. That is utterly opposed to the spirit, if not to the letter, of the Bretton Woods Agreement, and it is opposed to the spirit if not the letter of the trade agreement with the United States. I thought that we had learned the lesson of prewar days, which was that to beggar your potential customers was not the best way to do business. Investing these huge sums of public money in an important international commodity like cotton, which

  935
  we do not produce ourselves, which is produced entirely abroad, is bound, in our view, to lead to misunderstanding with the United States. It will certainly encourage those who believe in high tariffs, in isolationism, and in protection, and may well lead to retaliation in other spheres which will do our overseas trade untold damage.
  Finally, I would refer once again to the Lord President's statement that the test of nationalisation is the test of efficiency. Here tonight we are being asked to pass the issue of tens of millions of public money without any effective check. The action of the Government, indeed that of the majority of the House, in laying down that no person shall be allowed to import cotton except the Commission, means that the incompetence or the inefficiency of the Commission can never be effectively challenged or exposed, even by the Public Accounts Committee of this House. It is because, for all these reasons, we believe these enormous sums of public money should not be hazarded, that we shall vote against this Resolution.
  Sir John Barlow: The Committee is asked tonight to authorise the expenditure of some £110,000,000 to help to start this new Cotton Buying Commission. That amount is made up of £75,000,000 to be made by advances as required, £10,000,000 of capital account as required, and £25,000,000 virtually accrued profit since the 1st April this year. We must remember that in addition to these sums, the Cotton Commission will take over the existing stock in this country, which we are told amounts to some £90,000,000. I imagine that this represents something in the region of two million bales of cotton. That in itself, is a very large amount, and is of very great value. When cotton is purchased normally by traders in this country, it is usually bought on the sixty-day bill from America, or the ninety-day bill from Egypt; or else against invoice on arrival in this country, which really means payment a few days after landing. I believe that the Government usually pay dollars in America when they make purchases. Now it would appear that the Government are acquiring some £200,000,000, apart from the capital funds, and that will allow them to carry and pay for a full stock for present usage of about two
  936
  years cotton. That is a very large amount. I think far larger than has ever been the custom in Liverpool or in this country as a whole. When such a stock is built up, it may be very dangerous for the Government and very dangerous for the taxpayer, who may have to foot the bills. I submit that this £75,000,000 which is asked for in paragraph (a) of the Resolution is unnecessary. The value of the present stock, representing £90,000,000, is sufficient in itself to meet the financial requirements for handling the cotton required for use in this country. I should like to know what interest—
  Mr. Keenan: Is it not true that the merchants did not handle cotton for this country alone, but. that they also bought and sold abroad? They were not confined to cotton in this country alone.
  Sir J. Barlow: Although this does not arise particularly on the Financial Resolution, may I say that the Commission, under the Bill, are empowered to sell abroad, as well as to supply the requirements of our own mills. In spite of that. I maintain that the £90,000,000 representing stock is amply sufficient for the requirements of the Commission. Before leaving the figure of £75,000,000 which will be advanced as required, I would like to ask what rate of interest the Commission will pay the Government for that money, and also what rate of commission the Commission will pay on the upwards of £10,000,000 required on capital account.
  I turn to paragraph (b) of the Resolution, which refers to
  "a sum representing the net profit accruing to the Board of Trade from the discharge of their raw cotton functions on or after the first day of April, nineteen hundred and forty-six."
  We are told that that may vary downwards if cotton diminishes in value. I would like to know exactly how that £25,000,000 or lesser amount has been made up. It is represented to us as net profit. If that is the case, has it borne any interest? If so, what interest? Is it tax free, or what is commonly called gross profit? There is a very great difference between the two. Is it subject to warehousing, and other charges, or is it entirely free? I would like the Minister to give us much more informa-

  937
  tion and to tell us exactly how the £25,000,000 has been built up. Does it take into account the present amount spinners are paying over the world value for cotton? Does it include the fictitious 1½d. or 2d. a lb. on present Lancashire prices over New York prices?
  I would like to know also whether the Commission will be allowed to have various amounts outstanding, fluctuating according to their requirements. Will they pay interest on the net figure useable, or will they have a larger figure, or possibly substantial amounts dying idle with the bank? It seems to me that, having such a large capital as this available—£200,000,000 for working capital and £10,000,000 for capital expenditure—may be very dangerous for any Commission dealing in a raw commodity. They would start off in such a strong position that they could buy and buy and in the course of time they might build up a position which would be embarrassing for the Government both commercially and politically. That, however, is perhaps going rather outside the Financial Resolution. It has already been stressed, but I will not press it further except to say that it may be borne in mind by the taxpayer at some early date.
  1.0 a.m.
  Mr. Erroll: I should like to follow the point by the hon. Member for Eddisbury (Sir J. Barlow), that the losses incurred will be very serious indeed, if the buying Commission sets out with a grandiose plan for buying, and buying all the time. We have had some experience in other countries of what State buying can lead to. The Government of the United States of America found that buying cotton was a most expensive process, which resulted in very-serious losses before the war. So I do hope the Minister will bear that in mind, and will issue a directive to the Commission not to indulge in too rapid buying owing to its strong initial financial position.
  I would ask the Committee to reject the whole of the Resolution. It appears to me nothing more than an extravagant excursion into the realms of commerce, by a Government which is scarcely competent to deal with these matters. I was alarmed to notice in the speech of the President
  938
  of the Board of Trade that he is quite prepared for losses to be borne by the Exchequer. When questioned last Monday about losses being incurred, he cheerfully admitted:
  "If there are losses incurred over a long period of years which cannot be balanced up against profits those losses will fall to the Exchequer."—[OFFICIAL REPORT, 2nd December, 1946; Vol. 431, c. 158.]
  If so, that is a thing that did not happen before the war on the Liverpool Cotton Exchange. Losses were borne by the merchants, and not by the taxpayers. It may be it is better that the taxpayers should pay rather than the speculator, but that is a doctrine not hitherto enunciated. We find, too, that, should there be any question of profits not accruing so rapidly to the Commission as they should, the President admitted that the profit of the Commission would be made out of the spinners. He said:
  "The spinner has it made up for him out of the consumer."—[OFFICIAL REPORT, 2nd December, 1946; Vol. 431. c. 155.]
  So once again the consumer pays. [HON. MEMBERS: "He always did."] Now he is going to pay a little more.
  I pass now to one of the so-called benefits of the scheme, which it is going to cost a considerable sum of money to implement, and that is, the elaborate and very rigid cover scheme which is being put forward as being better than the old futures market. It was stated by the Secretary for Overseas Trade that there was no cover operating for stocks of yarn; that the cover scheme at present operated for spinners was arranged only to cover sales of yarn or stocks of cotton supplied by the Commission, and that the Commission accepted financial responsibility only in respect of changes of price as regarded yarn sales and raw cotton sales. It was further pointed out that stocks were not covered because spinners had not asked for that facility.
  It is quite understandable that spinners would not require stocks to be covered on a rising market, but it is quite likely that they would ask for an extension of the facility on a falling market, at the very time when the Commission will be very hard pressed, indeed, to meet its financial commitments. Therefore, this large sum of money, which is to be given to the Commission by this Resolution, may not even be sufficient to provide a cover scheme, which is imperfect as it stands

  939
  at present, and can be made really perfect only by the reintroduction of the old futures market. The Commission will, of course, with the aid of the money provided by this Resolution, if granted by the Committee, be going in for bulk buying in the United States and other countries.
  I should like to draw the attention of the Committee to the grievous wrongs which are being perpetrated in the Empire by the policy of the present control which, I understand, will be perpetuated by the Commission with the money which is being granted. At the present, extremely low prices are being paid for raw cotton in East Africa, and it is sold at a high rate to the spinners in Lanes, and there seems to be no prospect of higher or more reasonable prices being paid to the East African growers.
  One provision of the Bill, which has not attracted very much attention so far, is the implementation of research which, I presume, will have to be borne out of the moneys, either earned by the Commission, or voted to the Commission by this Resolution. I should be grateful if the Secretary for Overseas Trade, when replying, would indicate whether the money voted by this Resolution will actually be used for research as indicated in the Bill. I am all in favour of research myself, but I do query whether the Commission is the right body to carry out research. I think research ought to be carried out, either further back in the producing country, or else further forward in the spinners' department, but I do not think that an organisation for handling raw cotton is necessarily the best organisation for carrying out research into raw cotton. Perhaps, the Secretary for Overseas Trade will give us some indication of the nature of the research to be carried out with the money voted by this Resolution. I will not detain the Committee longer. We have debated sufficiently widely to show that the Committee ought to reject this Resolution.
  Mr. Marquand (Secretary for Overseas Trade): Such a large number of questions have been asked by hon Members opposite that I am afraid my reply must necessarily be rather scrappy Let me begin by dealing with the last question by the hon. Member for Altrincham (Mr.
  940
  Erroll). He wanted to know why the Commission had power to spend money on research. It is not contemplated, I think, that the Commission will itself set up an organisation for undertaking research into the processing or growing or breeding of cotton. This power is taken in the Bill in order to make it competent for the Commission, if it wishes to do so, to make grants to an appropriate research organisation to do work that might help the Commission in its task of providing Lancashire industry with a supply of satisfactory cotton.
  Mr. Stanley Prescott: It does not say so in the Bill.
  Mr. Marquand: No. The wording of the Clause is, that it has power to spend money on research. No doubt, we can discuss that when we reach the Clause in Committee. The hon. Member for Eddisbury (Sir J. Barlow) asked why do we want such a large sum of money as is provided for in the Bill, to cover the value of the stocks of cotton which are being transferred by the Beard of Trade on the appointed day to the Commission. It is suggested—it is in the financial Resolution and in the Financial Memorandum accompanying the Bill—that there should be advances from the Board of Trade to the Commission equal to the value of the cotton stocks on the appointed day at current market prices, plus an amount not exceeding £75,000,000. He wanted to know why we thought it necessary to ask for as large a sum as £75,000,000. It is true that at present prices and present consumption rates in Lancashire this total of £165,000,000 would cover two years' stocks. But if we take the prewar rates of consumption at present prices, then it covers only 16 months' consumption of stock. At present consumption rates at double present prices it would cover 12 months' consumption. The extra. £75,000,000 is taken in order to cover—
  Mr. R. S. Hudson: During the earlier Debate the President of the Board of Trade used exactly the opposite argument to refute an argument put up for this side. He said that we were not in the future going to use these enormous quantities of cotton, because we were permanently to have a smaller cotton industry, with fewer cotton operatives, than before the war.
  Mr. Marquand: I do not know that I necessarily said that we were going to have a larger consumption, but we have to allow for the possibility of some increase in consumption. We do not look forward to the industry being no larger. It may have no more workers but we certainly hope that it is going to have a larger output, and therefore a larger consumption. We also have to allow for the possibility of prices rising. We do not compel the Board of Trade to advance this £75,000,000 to the Commission, and we do not compel the Commission to accept it. I was asked whether it was contemplated that the Commission will have large sums of money lying at the bank. The Commission will be entitled to repay the Board of Trade as they want, and there is provision that they will not allow the balance to exceed a certain amount which is considered prudent.
  I was also asked what rate of interest on these various advances was contemplated. There are some advances on capital account in respect of fixed capital assets which the Commission may acquire from the Board of Trade, or may subsequently decide to acquire for the purposes of carrying on business, such as offices and the like. It is contemplated that capital of that amount will pay rate at the interest of long-term capital, and the appropriate rate today, as is well known, is about 2½ per cent. The cotton stock will be regarded, for the most part, as working capital, and other advances which may be made from time to time, under one of these provisions, will also count as working capital. It as contemplated that all working capital will pay a rate of interest of about one per cent., or whatever is the appropriate interest for working capital at that time.
  Sir J. Barlow: Does that cover the £75,000,000 and the £90,000,000 value of cotton being taken over?
  Mr. Marquand: We recognise that we have a large stock of cotton in hand. It may be argued that there will remain in that stock a hard core which will not be turned over all the time, which may properly be regarded as permanent capital. That is recognised, and provision is made for the Board of Trade and the Treasury to agree on a proportion of stock which can be regarded as fixed or permanent
  942
  capital, which will pay the rate of interest appropriate for long-term advances.
  Sir J. Barlow: Is that to be on the 2½ per cent. basis?
  1.15 a.m.
  Mr. Marquand: The total on which 2½ per cent. would be paid is the £10,000,000, plus the hard core of the value of the cotton stock. I am not going to say that the 2½ per cent. will always be the appropriate rate—far be it from me to forecast. I was asked how the £25,000,000, which constitutes the reserve funds of the Commission, was made up. I thought that I had explained that in the Debate on the Second Reading, when I said that we reckoned that the Cotton Control would make a trading profit in the current financial year of from £10,000,000 to £12,000,000, partly as a result of rising prices, and partly because of wise or fortunate buying. The £10,000,000 or £12,000,000 was accounted for by an increase in revenue from the sale of cotton, and the remainder of the £25,000,000 was made up by an increase in the value of the stocks of cotton held by the Commission. The increase in the value of the stocks is approximately from £76,000,000 to £90,000,000, which we guess may be their value on the appointed day. That is how the £25,000,000 is made up. The sum of £10,000,000 or £12,000,000 represents the excess of receipts from the sale of cotton over what it cost to buy the cotton, and it has been paid into the Exchequer.
  Mr. Hudson: How can it have been paid into the Exchequer if it does not exist?
  Mr. Marquand: The money is receipts from the sale of cotton obtained by selling cotton at a higher figure than was paid for it. That portion of the £25 million; which is £11 or £12 million, represents the surplus of revenue over that expenditure. I trust that answers the question as to whether tax had been calculated, or something of that kind. It had not. The hon. Member for Altrincham and Sale (Mr. Erroll) referred to the fact that the cover scheme, although at present giving spinners all they want in existing circumstances, would not do so if the circumstances changed. That was admitted by my hon. and learned Friend during the Second Reading Debate. I have not had time to look at what

  943
  he said exactly, but I think I am right in saying that he also said that the Cotton Control and its advisory committee were, at the moment, discussing with the industry the possibility of extending the cover to yarn as well. If he did not, then I say it now—
  Mr. Erroll: Has not the hon. Gentleman made a slip of the tongue? Does he not mean yarn stocks?
  Mr. Marquand: Yes, yarn stocks, I beg the Committee's pardon.
  Mr. Walter Fletcher: When the hon. Gentleman said, "extending the control," surely he meant extending the cover?
  Mr. Marquand: If I said "control" I certainly meant cover. We are talking of the protection of the spinners against a change in price.
  I had some sympathy with the right hon. Gentleman the Member for South-port (Mr. R. S. Hudson). Through some accident or other he had been denied the opportunity of making a speech on the Second Reading, and he made the best of his chance on this occasion. He traversed almost the whole subject, and I do not propose, at this late hour, to attempt again to state the reasons why we have introduced this particular scheme. The right hon. Gentleman asked whether we could achieve stability in the price of cotton and I say that we have already achieved it. We have guaranteed the spinner against fluctuations and the changes in prices which were made have been made at long intervals. We see no reason why the Commission carrying on the work of the Control cannot continue to do that.
  The right hon. Gentleman asked, and asked quite legitimately within the terms of what we are supposed to be discussing tonight, whether we could equalise our income and outgoings over the good and bad years to avoid burdening the taxpayer. That is a question well put on this

  Division No 35.

  AYES

  1.27 a.m.

  Adams, Richard (Ralham)

  Attewell, H. C.

  Barton, C.

  Adams. W. T. (Hammersmith, South)

  Awbery, S. S.

  Battley, J. R.

  Alexander, Rt. Hon A. V.

  Bacon, Miss A.

  Bechervaise, A. E.

  Allen, A C. (Bosworth)

  Baird, J.

  Benson, G.

  Allen, Scholefield (Crewe)

  Barstow, P. G.

  Bing, G. H. C.

  Financial Resolution. He said he was inclined to believe we would not. I am inclined to believe we will. I do not wish to deceive the Committee and say we are absolutely certain or that ten years hence it may not be found that some loss to the taxpayer may have occurred. But with the reserve fund, which will be approximately £25 million in hand, as the result of our good fortune in having accumulated during the war considerable stocks of cotton, we find it hard to believe that over a period of six to eight years it should not be possible to average out the fluctuations and leave the taxpayer at no disadvantage and at the same time during that period be able to keep prices at such a figure as will put the Lancashire industry at a competitive advantage and not a disadvantage. I must admit, if the Commission does its work badly, and makes a mess of the transactions, then the taxpayer will suffer. If it makes a mistake it will be a big mess. It is perfectly true, of course, that if the National Coal Board makes a mistake, it may be a bad mistake and one bigger than an individual pit owner could make. We rest our case as Socialists in the belief that, if we set up centralised organisations of this kind, and apply the best skill and the best brains to them and apply the motive of public service in the public interest, then, if they are administered properly, gross blunders will not be made, and, on balance, large scale buying will be to the advantage of the Lancashire cotton trade.
  Sir J. Barlow: The hon. Gentleman has pointed out that on the capital account the fluctuations may be about 2½ per cent. I think that is correct. May I suggest it is quite unnecessary to have the full value in hard core capital? It would be cheaper to finance the trade in this way; there would be a substantial saving and there is no reason why the Government should not do it and thus a large amount of capital would be unnecessary.
  Question put.
  The Committee divided: Ayes, 190; Noes, 76.

  Blackburn, A. R.

  Greenwood, A. W. J. (Heywood)

  O'Brien, T.

  Blenkinsop, A.

  Grey, C. F.

  Oldfield, W. H.

  Blyton, W. R.

  Grierson, E.

  Oliver, G. H.

  Beardman, H.

  Griffiths, D. (Rother Valley)

  Orbach, M.

  Bowden, Flg.-Offr. H. W.

  Gunter, R. J.

  Paget. R. T.

  Bowles, F. G. (Nuneaton)

  Haire, John E. (Wycombe)

  Palmer. A. M. F.

  Braddock, Mrs. E. M. (L'pl, Exch'ge)

  Hale, Leslie

  Parker, J.

  Braddock, T. (Mitcham)

  Hall, W. G.

  Parkin. B. T.

  Bramall, Major E. A.

  Hamilton, Lieut -Col. R.

  Perrins, W.

  Brook, D. (Halifax)

  Hannan, W. (Maryhill)

  Piratin, P.

  Brooks, T. J. (Rothwell)

  Hardy, E. A.

  Platts-Mills, J. F. F.

  Brown, T. J. (Ince)

  Hastings, Dr Somerville

  Poole, Major Cecil (Lichfield)

  Bruce, Maj D. W. T.

  Howison, Capt. M.

  Popplewell, E.

  Burden, T. W.

  Holman, P.

  Porter, E. (Warrington)

  Burke W. A.

  Holmes, H. E. (Hemsworth)

  Pritt, D. N.

  Callaghan, James

  House, G.

  Randall, H. E.

  Champion, A. J.

  Hoy, J.

  Ranger, J.

  Clitherow, Dr. R.

  Hudson, J. H. (Ealing, W.)

  Robens, A.

  Cobb F. A.

  Hushes, Hector (Aberdeen, N.)

  Roberts Goronwy (Caernarvenshire)

  Cocks, F. S.

  Hughes, H. D. (W'lvarh'pton, W.)

  Robertson, J. J. (Berwick)

  Coldrick, W.

  Hutchinson, H. L. (Rusholme)

  Royle, C.

  Collick, P

  Hynd, H (Hackney, C.)

  Sargood R.

  Collindridge, F.

  Jeger, G. (Winchester)

  Scollan T.

  Collins, V. J.

  Jeger, Dr S. W. (St Pancras S. E.)

  Shurmer, P.

  Colman, Miss G. M.

  Jones, D. T. (Hartlepools)

  Silverman, J. (Erdington)

  Comyns, Dr. L.

  Kesnan, W.

  Simmons, C. J.

  Cooper, Wing-Comdr. G.

  Kenyon, C.

  Smith, C. (Colchester)

  Corbet, Mrs F. K. (Cambwell, N.W.)

  Key, C. W.

  Smith, H. N. (Nottingham, S.)

  Corlett, Dr. J.

  Kinghorn, Sqn.-Ldr. E.

  Smith, S. H. (Hull. S. W.)

  Cove, W. G.

  Kinley, J.

  Snow, Capt J. W.

  Crawley, A.

  Kirby, B. V.

  Solley, L. J.

  Crossman, R. H. S.

  Lang, G.

  Soskice Maj Sir F.

  Daggar, G.

  Lavers, S.

  Stewart, Capt Michael (Fulham E.)

  Daines, P.

  Levy, B.

  Stokes, R. R.

  Dalton, Rt. Hon. H.

  Lindgren, G. S.

  Stubbs, A. E.

  Davies, Edward (Burslem)

  Longden, F.

  Symonds, A. L.

  Davies, Ernest (Enfield)

  Lyne, A. W.

  Taylor, H. B. (Mansfield)

  Davies, Harold (Leek)

  McAllister, G.

  Taylor, R. J. (Morpeth)

  Deer, G.

  McGhee, H. G.

  Thomas. I O (Wrekin)

  Diamond, J.

  Mack, J. D.

  Thomas John R (Dover)

  Dobbie, W.

  Mackay, R. W G (Hull. N.W.)

  Thomas, George (Cardiff)

  Dodds, N. N.

  McLeavy, F.

  Thorneycroft Harry (Clayton)

  Donovan. T.

  MacMillan, M. K. (Western Isles)

  Tolley, L.

  Driberg, T. E. N.

  Macpherson, T. (Romford)

  While C. F. (Derbyshire W.)

  Dye, S.

  Mainwaring, W. H.

  Whiteley, Rt. Hon. W.

  Ede, Rt. Hon J. C.

  Mallalieu, J. P. W.

  Witkes, L.

  Edwards, N. (Caerphilly)

  Manning, Mrs L. (Epping)

  Wilkins, W. A.

  Evans, John (Ogmore)

  Marquand, H. A.

  Wiley O. G. (C'eve'and)

  Evans, S. N. (Wednesbury)

  Mathers, G

  Williams J. L. (Kelvingrove)

  Ewart, R.

  Medland, H. M.

  Williams, W. R. (Heston)

  Farthing, W. J.

  Mellish R. J.

  Wills, E.

  Field, Captain W.J.

  Middleton, Mrs L.

  Wills Mrs E. A.

  Fletcher E. G. M. (Islington, E.)

  Mitchison, Maj G. H.

  Woods, G. S.

  Follick, M.

  Morris, P. (Swansea, W.)

  Yates, V. F.

  Fool, M. M.

  Mort, D. L.

  Zilliacus, K.

  Gaitskell, H. T. N.

  Moyle, A.

  Gibson, O. W.

  Murray, J. D.

  TELLERS FOR THE AYES:

  Gilzean, A.

  Nicholls H. R. (Stratford)

  Mr. Pearson and

  Glanville, J. E. (Consett)

  Noel-Baker. Cant F. E. (Brentford)

  Mr. Joseph Henderson.

  Gordon-Walker, P. C.

  Noel-Buxton, Lady

  NOES

  Amory, D. Heathcoat

  De la Bere, R.

  Lambert, Hon, G.

  Assheton, Rt. Hon. R.

  Digby, S. W.

  Legge-Bourke, Maj E. A. H.

  Baldwin, A. E.

  Elliot, Rt. Hon. W.

  Lindsay, M (Solihull)

  Barlow, Sir J.

  Erroll, F. J.

  Lucas Major Sir J.

  Birch, Nigel

  Fletcher, W. (Bury)

  Mackeson Brig H. H.

  Boles, Lt. Col. D. C. (Wells)

  Foster, J. G. (Northwich)

  Macmillan Rt. Hon. Harold (Bremley)

  Bossom, A. C.

  Fox, Sir G.

  Maitland Comdr J. W.

  Bowen, R.

  Fraser, Sir I (Lonsdale)

  Manningham Bullet, R. E.

  Bower, N.

  Fyfe, Rt. Hon. Sir D. P. M.

  Marlowe, A. A. H.

  Boyd Carpenter, J. A.

  Gage, C.

  Marshall D (Bodmin)

  Brathwaite, Lt.-Comdr J. G.

  Gates. Maj. E. E.

  Mellor, Sir J.

  Buchan-Hepburn, P. G. T.

  Gomme-Duncan Col A. G.

  Neven Spence, Sir B.

  Carson, E.

  Grant, Lady

  Nield, B. (Chester)

  Clarke, Col R. S.

  Gridley, Sir A.

  Noble Comdr A.H. P.

  Clifton Brown. Lt.-Col G.

  Hare, Hon J. H. (Woodbrige)

  Peto, Brig C. H. M.

  Conant Maj R. J. E.

  Hope, Lord J.

  Pitman I. J.

  Corbett, Lieut. Col. U (Ludlow)

  Hudson. Rt. Hon. R. S. (Southport)

  Prescott, Stanley

  Crosthwaite Eyre, Col O F

  Hulbert Wing. Cdr N. J.

  Price White, Lt. Col. D.

  Cuthbert, W. N.

  Joynson-Hicks, Lt -Cdr Hon L. W.

  Prior Palmer, Brig O.

  Davidson, Viscountess

  Keeling, E. H.

  Ramsay, Maj S.

  946

  947

  Roberts, H. (Handsworth)

  Taylor, C. S. (Eastbourne)

  York, C.

  Shepherd, W. S. (Bucklow)

  Thomas, J. P. L. (Hereford)

  Young, Sir A. S. L. (Partick)

  Spearman, A. C. M.

  Touche, G. C.

  Stanley, Rt. Hon. O.

  Turton, R. H.

  TELLERS FOR THE NOES

  Stoddart-Scott, Col. M.

  Wadsworth, G.

  Mr. Drewe and

  Strauss, H. G. (English Universities)

  Wheatley, Colonel M. J.

  Commander Agnew

  Stuart, Rt. Hon J. (Moray)

  Willoughby de Eresby, Lero

  Resolution to be reported this day.

  GAS (SPECIAL ORDERS)
  Resolved:
  "That the Draft of the Special Order proposed to be made by the Minister of Fuel and Power under the Gas Undertakings Acts, 1920 to 1934, on the application of the Sheffield and District Gas Company, which
  948
  was presented on 12th November and published, be approved."—[Mr. Gaitskell.]

  ADJOURNMENT
  Resolved: "That this House do now adjourn."—[Mr. R. J. Taylor.]
  Adjourned accordingly at Twenty-seven Minutes to Two o'Clock.

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