Sitting of 10 June 1947

Preamble
The House met at Half past Two o'Clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  FELIXSTOWE PIER BILL

    LONDON COUNTY COUNCIL (GENERAL POWERS) BILL
    LONDON COUNTY COUNCIL (MONEY) BILL.
    Read the Third time, and passed.

    LONDON PASSENGER TRANSPORT BOARD BILL (King's Consent signified).
    Bill read the Third time, and passed.
ORAL ANSWERS TO QUESTIONS
  TOWN AND COUNTRY PLANNING

    Protected Buildings (Lists)
    Mr. Keelingasked the Minister of Town and Country Planning whether he expects to publish before the Summer Recess any of the lists of buildings of historic or architectural interest to be protected under Sections 42 and 43 of the Town and Country Planning Act, 1944.
    The Minister of Town and Country Planning (Mr. Silkin): It will not be practicable to publish any of the lists before the Summer Recess, but I hope to do so in the early autumn.

    Bankside Power Station
    Sir Arthur Salterasked the Minister of Town and Country Planning whether he has received authoritative expert evidence as to the elimination of sulphur fumes from the proposed oil-fired Bank-side generating station; and whether he will publish his evidence.
    Mr. Skeffington-Lodgeasked the Minister of Town, and Country Planning (1) what steps he is taking to satisfy himself that no noise and sulphur or other noxious fumes will be given out by the proposed electricity generating station on Bankside;
    (2) what reports he has received on the possibility of eliminating sulphur and other noxious fumes emanating from oil-fired electricity generating stations; and if he will make a statement thereon.
    Mr. Silkin: I am satisfied from the advice I have received that sulphur and other noxious fumes can be eliminated. In order to ensure that the design of the plant to be installed is satisfactory, a pilot gas-washing plant is to be constructed, and, when the results of this are available, the Electricity Commissioners will consult with my right hon. Friends, the Ministers of Health and of Works. I shall keep in touch with these discussions. As regards noise, the Electricity Commissioners imposed a condition in giving their formal consent that the undertakers shall provide efficient methods for ensuring the avoidance of noise, and I have no reason to think that any difficulty will arise.
    Sir A. Salter: May I ask the Minister whether he will ensure that no action compromising a final decision is taken until the public have had an opportunity of considering the expert evidence which he says is now before him?
    Mr. Silkin: But the decision has been given. I am required to give a decision as the result of the public inquiry which was held, and I have given it.
    Sir A. Salter: Will the Minister see that the public have the evidence so that other expert opinion can express itself?
    Mr. Silkin: I cannot give any undertaking to publish the advice which I have received.
    Mr. Skeffington-Lodge: Was not the decision to go ahead made conditional on the Minister being satisfied that sulphur and other noxious fumes could specifically be eliminated?
    Mr. Silkin: Well, I am satisfied.
    Mr. Bossom: Is the Minister aware that there is no plant in the world that is using this low-grade oil fuel which does not give

    843
    off noxious fumes; is he further aware that, when Sir Christopher Wren built St. Paul's Cathedral, he made great efforts to get good stones there; and is the Minister going to wreck St. Paul's Cathedral by not preventing these fumes from coming across the river?
    Mr. Silkin: I am satisfied that these fumes will in no way wreck St Paul's Cathedral.
    Mr. Hobson: Will the fumes from the Bankside power station be subject to the Public Health Act, and, if the answer is in the affirmative, is the Minister aware that, as long as steps are taken to mitigate the nuisance, that Act is being complied with?
    Mr. Silkin: Of course, they are subject to the Public Health Act.
    Mr. Wilson Harris: Is the Minister aware that it was stated in another place that it will take six months to prove whether the noxious fumes can be eliminated or not? is that experiment to be carried out, and will the main enterprise be held up until it is carried out?
    Mr. Silkin: I am satisfied, as a result of the advice I have received, that sulphur fumes can be eliminated.
    Mr. Keeling: Has the Minister investigated the suggestion that the extra cost of burning oil, together with the cost of eliminating the sulphur fumes, would far exceed the cost of bringing mains from a point downstream, where the power station would be unobjectionable?
    Mr. Silkin: No, I have not, and it is not my business. All I had to do was to consider a specific application, which I did.
    Mr. Speaker: We have already had one Adjournment Debate on this matter, and we cannot debate it all again at Question time.

    Redevelopment Areas, Birmingham
    Mr. Yatesasked the Minister of Town and Country Planning when he will be in a position to confirm the order enabling the Birmingham City Council to acquire the properties necessary for the redevelopment of Ladywood and other redevelopment areas in the city of Birmingham.
    Mr. Silkin: I hope, to be in, a, position to issue, my decision on this proposal very shortly.
    Mr. Yates: Will the Minister regard this as a matter of urgency in view of the fact that the application has been in front of the city council for nearly 18 months?
    Mr. Silkin: I am very well aware of that, but I have been held up by seven legal decisions.
    Mr. Shurmer: Is the Minister aware that there are five redevelopment areas in Birmingham, and that thousands of people in those areas are living under inhuman conditions simply because landowners will not take action with regard to rotten property pending the Minister's decision, and will he speed up the matter?

  NATIONAL INSURANCE

    Scheme (Operation)
    Mr. Stanley Prescottasked the Minister of National Insurance when it is anticipated the National Insurance scheme will come into full operation.
    The Minister of National Insurance (Mr. James Griffiths): I would refer the hon. Member to reply given by my right hon. Friend the Prime Minister to the hon. Member for West Willesden (Mr. Viant) yesterday.
    Mr. Prescott: While desiring that this scheme should be brought into operation at the earliest possible moment, will the right hon. Gentleman first assure himself that the necessary adequate administration is in existence, and that there will be no fiasco as occurred in connection with old age pensioners?
    Mr. Griffiths: There was no fiasco with regard to them. It is because we are very anxious to put the scheme into operation, and to make as certain as we can that we shall have adequate administration, that we have fixed the date of 5th July, 1948.
    Mr. Prescott: Is it not a fact that there is still a fiasco in regard to Old Age Pensions?
    Mr. Griffiths: No, Sir.

    Dominions (Reciprocal Arrangements)
    Mr. Charles Smithasked the Minister of National Insurance what steps have been taken by His Majesty's

    845
    Government to make reciprocal arrangements with the Dominions with a view to ensuring that elderly persons are not disqualified from pensions in this country on the ground that they have been resident in the Dominions.
    Mr. J. Griffiths: A preparatory conference of officials, representing the Governments of the United Kingdom, Canada, Australia, New Zealand, South Africa, Eire and Southern Rhodesia, with an observer from Burma, sat in London last month to examine the principles on which reciprocity in the field of social insurance might be based. I am glad to say that the conference was able to frame a unanimous report. This will be submitted to the Governments concerned, and will, I hope, provide a basis for the consideration, in due course, of agreements for reciprocity between individual countries whose social service schemes have the necessary common ground for such arrangements.
    Mr. Smith: Will the Minister take every possible step to ensure that any arangement made in this way will be retrospective?
    Mr. Griffiths: The report has to be considered by all the Governments concerned. I am certain my hon. Friend will agree that we ought to study this report, and that I cannot make any definite promise until agreement has been arrived at by all the Governments.
    Mr. Hector Hughes: Can the Minister say whether that agreement applies to persons who become entitled to a pension in this country, and then go to the Dominions?
    Mr. Griffiths: The whole purpose of this agreement will be to ensure that people who move between these countries will be able, in a way yet to be settled, to take their pension rights with them.

  OLD AGE PENSIONS
  Sir Robert Youngasked the Minister of National Insurance what arrears of pension are due to pensioner No. 53035372, now continuation book No. 05458402; and if, owing to the need of the pensioner, he will cause early payment to be made.
  Mr. J. Griffiths: Arrears of pension amounting to 7 10s. 0d. were due to this pensioner; and payment was made by postal draft on 5th June.

  EMPLOYMENT

    Opencast Coalmining (Workers' Allowances)
    Sir R. Youngasked the Minister of Labour whether an unemployed man sent by the employment exchange from one county to another to work producing opencast coal is entitled to a free railway voucher and allowed any lodging allowance; and, if not, on what conditions such assistance to get to work in a place far removed from his home is temporarily advanced.
    The Minister of Labour (Mr. Isaacs): Opencast coalmining is carried out by the building and civil engineering industry, whose working rules govern the payment of lodging allowances and travelling expenses. Apart from the contractors own key men, payment of allowances and expenses, which would in any case be made by the contractor and not by my Department, would depend on whether an award in respect of a particular contract had been made by the industry's own conciliation board. A worker wishing to proceed to a job which does not entitle him to the payment of his fare by the employer could obtain a railway warrant from a local office of my Department on an undertaking to refund the cost later.

    Building Trade Trainees
    Mr. Prescottasked the Minister of Labour if his attention has been directed to strikes among bricklayers on local authority building sites, arising from the employment of trainees; and what steps his Department have taken in this matter.
    Mr. Isaacs: I am aware that in one area bricklayers on a local authority building site withdrew their labour on account of the employment of trainees. The action was taken against the advice of their trade union, and I am informed that the majority of the men concerned have now returned to work.
    Mr. Prescott: Presumably, the right hon. Gentleman is referring to the case of Bolton. If that is so, is he aware that

    847
    in that case the bricklayers alleged that the trainees were insufficiently trained, and that they had to undo much of their work and rebuild it, and, in these circumstances, would he consider investigating the training given to these men?
    Mr. Isaacs: No, Sir. This is the first time that I have heard of the information given by the hon. Gentleman. All my experience has gone to prove that the trainees are doing exceptionally good work.
    Sir Waldron Smithers: Will the Minister introduce at once, especially in the building trade, a system of payment by results.
    Mr. Isaacs: That is another question.

    Cotton Spinning Industry
    Lieut.-Colonel Bromley-Davenportasked the Minister of Labour (1) whether, in view of the importance of getting the maximum advantage from new equipment, he will ensure that effective steps are taken at the earliest opportunity to initiate a system whereby impartial work-load assessments for the cotton-spinning industry can be arrived at;
    (2) whether he is aware that one of the greatest difficulties in arriving at agreement for wage levels in the cotton-spinning industry is the absence of any independent system of assessment of the aggregate work-load for optimum production and fair working conditions; and what action he proposes to take in the matter.
    Mr. Isaacs: The Report of the Ever-shed Commission, which covers both wages arrangements wages arranements and methods of organisation or work, is at present the subject of discussion between the two sides of the cotton spinning industry. I am aware that the subject of work load assessment has been raised in the course of these discussions which, I understand, are being resumed today. I am sure that due regard will be paid to this and related questions, but they are matters that should be settled by agreement between the two sides of the industry.

    Disabled Men (Sedentary Work)
    Mr. Bramallasked the Minister of Labour if he will take steps to increase the compulsory percentage of disabled men to be employed for those establishments with a high proportion of sedentary work.
    Mr. Isaacs: The Act does not empower me to fix a special percentage above the standard rate for an establishment, but only for a trade or industry, or a branch or part of a trade or industry, or a class of employer. But I have the question of an increase, either general or particular, in the quota obligation of employers under constant review, and an increase will be made if circumstances require it.
    Mr. Bramall: Will my right hon. Friend bear in mind that there is very considerable unemployment among disabled men, and that it appears to them to be very ridiculous that there should be only the same obligation on an organisation which does purely office work as there is on a factory?
    Mr. Isaacs: I am not sure that that is a very material point, but, of course, I am bound by the Act, which provides the way in which special percentages shall apply.
    Mr. William Shepherd: Is the Minister satisfied that all employers are fully aware of their liabilities in the matter, and is he also satisfied with the machinery that exists at the present time?
    Mr. Isaacs: I am not entirely satisfied that all employers are fully cognisant of their responsibilities, but the majority of them are playing the game. On the advice of our Advisory Council, we are taking steps to make a very extensive inquiry to find out whether employers do know, and, if they do, whether they are playing the game.

    Disallowed Unemployment Benefit, Lanarkshire
    Mr. Timmonsasked the Minister of Labour if he is aware that large numbers of Lanarkshire girls are losing their unemployment benefit by refusing to leave home and go to England to work; and what steps he proposes to take to put a stop to this practice.
    Mr. Isaacs: Employment is shortly becoming available to women as key workers in a factory in Lanarkshire to be opened there as part of the scheme for providing employment in that development area. In order to give this employment to local unemployed women, a number of them were asked to go to Yorkshire, for a limited period, to train as weavers. Twenty of them refused to accept this offer, and unemployment benefit was dis-

    849
    allowed. Decisions on claims for benefit are given by the independent statutory authorities appointed under the Unemployment Insurance Acts, and neither I nor my right hon. Friend the Minister of National Insurance is able to interfere in any way with their decisions.
    Mr. Timmons: Does the Minister consider that £2 15s. a week, which has been offered to these girls to live in Leeds and to pay for their board and their hostel accommodation, is an adequate amount for any girl to maintain herself on a decent standard; and is he further aware that there is a strong feeling in Lanarkshire that these girls are subject to direction, which does not apply in other parts of the country?
    Mr. Isaacs: It is not for me, on this question, to express an opinion on the rate of wages. All I can say is that 60 of the women who were offered employment accepted it. We shall not get the factories in this development area staffed with local unemployed unless they are prepared to take a little trouble to train themselves for the job.
    Mr. Gallacher: Would the Minister say what possible justification there can be for refusing unemployment benefit to girls because they will not leave their own country and cross the Border into England?
    Mr. Isaacs. I never knew that it was a hardship for Scottish nationals to come to England.
    Mr. Wilson Harris: Does the right hon. Gentleman's answer mean that men or women might be compelled to go from Devon to Northumberland to work, and would lose their unemployment benefit if they refused to do so?
    Mr. Isaacs: No, Sir, this is a question of training people for work in their local area. If they refuse to take the work available to them, it is my duty to report them to the statutory authorities. There My responsibility as to benefit rests.
    Mr. Timmons: In view of the very unsatisfactory nature of the reply, I beg to give notice that I propose to raise the matter on the Adjournment

    Smithfield Clerks and Salesmen (Dismissals)
    Mr. Boyd-Carpenterasked the Minister of Labour whether he has con-
    850
    sidered representations made, to him by the Smithfield Guild of Clerks and Salesmen with reference to the proposed dismissal by the London Wholesale Meat Supply Association, Limited, of all men of 65 years of age and over; and whether, in view of the national manpower position, he will indicate his Department's attitude.
    Mr. Isaacs: Yes, Sir. I have already made it clear that in view of the general shortage of manpower, I deprecate the discharge of efficient workers for no other reason than that they have reached a particular age. The Government's appeal to the older men to stay at work carries with it an appeal to employers to keep them at work where possible. The circumstances of individual cases vary greatly, however, and I could not express an opinion on the merits of particular cases.
    Mr. Boyd-Carpenter: Will the right hon. Gentleman convey a very clear expression of his own Department's opinion to the Ministry of Food who, so far, have refused to help in this dispute at all?
    Mr. Isaacs: I hope that to whoever this opinion applies, they will take notice of it.
    Mr. George Wallace: Has my right hon. Friend also received representations from the Transport and General Workers Union, which is the most effective organisation in a case of this sort?
    Mr. Isaacs: I cannot recall any representations from that body.

    Cost-of-Living Advisory Committee (Final Report)
    Mr. Osborneasked the Minister of Labour how many meetings have been held by the Cost-of-Living Advisory Committee; when the final report will be ready; and whether the Government propose to take immediate action on it.
    Mr. Isaacs: The Cost-of-Living Advisory Committee has held six meetings, and a technical committee appointed to prepare a detailed plan for the new index has held eleven meetings. I am unable to say when a final report by the latter committee will be available for approval by the Advisory Committee. I cannot say what action the Government will take until the report has been received
    Mr. Osborne: In view of the importance of this matter, will the Minister give an assurance that when the report is ready it will be published with the record of the evidence?
    Mr. Isaacs: I could not give such an undertaking at present, but, knowing how interested the House and the country are in this matter, I will give a full and detailed statement and will publish some information on Thursday, when there is a Question down on this matter.

    Epileptics
    Mr. Bowdenasked the Minister of Labour if he is aware that there are numbers of epileptics registered as unemployed in the United Kingdom; that many are unable to obtain employment because of their disability; and if he will consider ways of getting these people to work in the open air under medical supervision.
    Mr. Isaacs: The latest available figures indicate that about 1,350 epileptics are now registered as unemployed. The problem of finding suitable employment for epileptics has recently been the subject of special study in my Department, in conjunction with the medical authorities. There are many occupations, including some in the open air, which are suitable for them. Every effort is being made to place the less severely disabled of them in such jobs with sympathetic employers, and some of the more severe cases have already been placed in employment under sheltered conditions.

    Whitsun Bank Holiday
    Mr. William Shepherdasked the Minister of Labour whether, in view of the shortening of working hours and the urgent need for production, he will consider taking steps to dispense with the Whitsun Bank Holiday next year.
    Mr. Isaacs: No, Sir.

  SCOTLAND

    Juvenile Delinquency
    Mr. Hector Hughesasked the Secretary of State for Scotland how many remand homes for boys and girls there are in Scotland; where are they situated; how many boys and girls, respectively, each
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    has accommodated yearly during the last 10 years and for what periods; what records he has of the success of the treatment and after careers of the boys and girls treated in these remand homes; and if he will make a statement on this manner of dealing with juvenile delinquents in Scotland.
    The Secretary of State for Scotland (Mr. Westwood): Information as to the number and situation of remand homes is published in the relevant report of the Scottish Advisory Council on the Treatment and Rehabilitation of Offenders, of which I have sent my hon. and learned Friend a copy; and I am circulating in the OFFICIAL REPORT a table showing the total number of admissions to these homes during the past 10 years. Separate figures for each home and information as to the length of stay and subsequent career of each individual case are not available. As regards the last part of the Question, I am in general agreement with the views expressed in the Report of the Advisory Committee.
    Mr. Hughes: As the whole purpose of these schemes is to assist boys and girls from delinquency to good citizenship, will the Secretary of State say what he is doing to help them in providing constructive employment, which is badly needed at present?
    Mr. Westwood: I have already indicated that I am giving consideration to the Report of the Advisory Committee with a view to doing everything possible to help these boys and girls.
    Mr. Hughes: Are there no schemes in existence for the after care of these young people?
    Following is the table:

    Year.

    Children.

    Young Persons

    Total.

    M.

    F.

    M.

    F.

    1937

    414

    35

    832

    119

    1,400

    1938

    317

    24

    772

    118

    1,231

    1939

    387

    17

    739

    80

    1,223

    1940

    708

    30

    974

    122

    1,834

    1941

    749

    48

    1.134

    160

    2,091

    1942

    833

    71

    1,247

    177

    2,328

    1943

    845

    68

    1,309

    195

    2,417

    1944

    712

    72

    1,432

    196

    2,412

    1945

    790

    62

    1,498

    205

    2,555

    1946

    708

    40

    1.332

    154

    2,234

    Agricultural Land, Musselburgh
    Sir William Darlingasked the Secretary of State for Scotland if he is aware that an area of some 20 acres near Musselburgh, described locally as the Eye of Scotland, is being considered for housing or other public purposes; and what steps he intends to take generally to prevent first-class agricultural land from being sterilised in this fashion.
    Mr. Westwood: I am at present considering a compulsory purchase order in respect of a site of some 27 acres which has been submitted to me by Mussel-burgh Town Council for confirmation, and hope to be able to announce my decision shortly. I can assure the hon. Member that before approving the use of any land for housing or other public purposes, I invariably give the fullest consideration to the needs of agriculture, and that agricultural land is not so used 'unless I am satisfied that there is no suitable alternative site available.
    Sir W. Darling: Is the Secretary of State aware that this is an important horticultural area for the City of Edinburgh, and will he give an assurance that he will be reluctant to give his consent to any less useful exploitation of that territory?
    Mr. Westwood: I am certainly aware that in this area we have some of the very finest agricultural land in Scotland or elsewhere. It is my duty not only as the Minister of Housing, but as the Minister of Agriculture for Scotland, to see that the land of Scotland is used to the best advantage.
    Mr. Kirkwood: Does not the Secretary of State think the time has now arrived when we should take over the whole of the land in Scotland?

    Secondary Education
    Mr. Gallacherasked the Secretary of State for Scotland if he is aware that the omnibus or multilateral school has been recommended by the Scottish Advisory Council on Secondary Education as the best form of secondary education; and if he will take steps to ensure that in future all new Scottish secondary schools conform to this type.
    Mr. Westwood: I am aware that the Advisory Council in their report on secondary education have expressed a pre-
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    ference for the omnibus type of school, wherever practicable, although they recognise that its adoption may not be in the best interests of every area. Until consideration of the report has been completed, I am not in a position to say to what extent the Council's recommendation will be adopted.
    Mr. Gallacher: Will the Minister ensure that the officers in his Department give the closest attention to this question, as many of those who are interested in education consider that it is very important from the point of view of the further development of education in Scotland?
    Mr. Westwood: I can assure the hon. Gentleman that not only are the officers of my Department giving this matter their closest attention, but because of my own experience and as the Minister responsible, I am giving it my personal attention.
    Mr. Henry Strauss: Could not these schools be given less ridiculous and clearer names?

    Scholl Leaving Certificates
    Mr. Gallacherasked the Secretary of State for Scotland if he has taken note of the criticisms made of the Scottish Higher Leaving Examination by the Scottish Advisory Council on Education; and if he will take steps now to abolish this barrier to educational progress and substitute the recommended alternative of a fourth year Leaving Certificate based on teachers' estimates and corrected by a standardised test.
    Mr. Westwood: The recommendations made by the Advisory Council on Education in Scotland in their report on secondary education, including those which relate to the Senior Leaving Certificate Examination, are still under consideration. As they involve very important issues, some of which necessitate consultation between the Scottish Education Department and other examining bodies, it will be some time before I am in a position to make a statement on the subject.
    Mr. Gallacher: Is the Secretary of State aware that I have known quite brilliant students with a very good record who have been affected so much by this particular form of examination because of their, nervous temperament, that they came out very badly in the examination?
    Mr. Westwood: I am aware that these things can happen in connection with examinations.

    Herrings (Quick Freezing Factories)
    Mr. Boothbyasked the Secretary of State for Scotland what steps are being taken to provide facilities for the quick freezing of herrings during the summer and autumn fishings.
    Mr. Westwood: Three factories for quick freezing of herrings will be in operation in 1947; one in Zetland and one at Fraser-burgh during the summer fishing season, and one at Great Yarmouth during the autumn fishing season.
    Mr. Boothby: Can the right hon. Gentleman give any indication of the capacity of these factories? Are they to be experimental, or will they be provided on an adequate scale?
    Mr. Westwood: Without notice, I could not give an indication of the capacity of these factories.
    Mr. Boothby: I beg to give notice that shall raise the matter on the Adjournment.
    Mr. J. J. Robertson: May I ask whether these factorie—
    Mr. Speaker: The hon. Member said he would raise the matter on the Adjournment and, therefore, no other supplementary question may be asked.

    Small Dwellings
    Mr. Rankinasked the Secretary of State for Scotland how many Scottish local authorities have plans which have been approved for small-size dwellings.
    Mr. Westwood: Out of 69.500 houses for which tenders had been approved up to 4th June, go were of two-apartments. 14 were of one-apartment and 69 single apartments were contained in two hostels. The number of local authorities involved was seven.
    Mr. Bossom: Could the Minister state how many different groups of architects examine these drawings before they are approved?
    Mr. Westwood: I could not say without notice, and even then it might not be worth the time spent upon it. The object is to build houses for the people.
    Mr. Rankin: Are the small-size dwellings designed specifically to meet the needs of the elderly people?
    Mr. Westwood: Not necessarily only the elderly people. The recommendations of the Advisory Committee on Housing in Scotland referred to single persons, who themselves may not be elderly.
    Mr. Bossom: Is the Minister aware that the desire is to build houses and not to waste time by letting several groups of the same type of men examine the same drawings?
    Mr. Westwood: There is little waste of time so far as Scotland is concerned.

    Industry and Employment (White Paper)
    Mr. William Rossasked the Secretary of State for Scotland if it is his intention to make the White Paper on Industry and Employment in Scotland an annual publication.
    Mr. Westwood: If I find that there is any widespread desire for an annual White Paper of this kind, I shall consider what action might be taken in this direction.
    Mr. Ross: Is the Secretary of State aware that there is a real public demand for such a publication, and that it is very desirable that we should have an authoritative statement annually of Scotland's economic recovery under a Labour Government?
    Mr. Westwood: I have already indicated that, if there is a widespread desire, I shall consider what can be done in the way of an annual publication. It could not follow exactly on the same lines as the White Paper, in view of the fact that much of it is historical, giving the background of exactly what is being done at the present time.
    Colonel Gommc-Duncan: In view of what the hon. Member for Kilmarnock (Mr. Ross) has just remarked, would the right hon. Gentleman say whether there are any signs of recovery in Scotland under a Labour Government?
    Mr. Westwood: Yes, Sir, there is adequate evidence that as a result of plans we are laying, Scotland is going to benefit from the Labour Administration.

    Science Students (Grants)
    Mr. Gilzeanasked the Secretary of State for Scotland if he is prepared to extend for another year the grants given for the past three years to honours students in physics and radio, attending Scottish universities, and so enable them to complete their course and to graduate.
    Mr. Westwood: No, Sir. State bursaries in science were introduced during the war to equip selected students for technical work in the Forces or in responsible civilian employment, and not necessarily to enable the holders to obtain degrees. The normal period of tenure has throughout the scheme been three years or less. The awarding of these bursaries ceased in 1945, but existing holders were allowed to complete the State bursary course. Since then I have, through the Education Authority Bursaries (Scotland) Regulations, 1947, introduced a new scheme of financial assistance for university and other students. In these circumstances it would be a misuse of the scheme of State bursaries in science to extend existing bursaries in order to enable the holders to spend an additional year at the university. Those of them who wish to do so, and can obtain deferment of call-up for military service, can apply to the appropriate education authority for financial assistance.
    Mr. Gilzean: Does the Secretary of State realise that these young men are not simply spending an extra year at the universities, and that the course they have in part done is an honours course, and unless completed is useless? Consequently, is he not prepared to do something to meet their circumstances having regard to the fact that most of these young men are refused school bursaries of considerable amounts because they were offered State grants?
    Mr. Westwood: I have already pointed out that, to meet these and similar cases, I have, through the Education Authority Bursaries (Scotland) Regulations, 1947, made it possible for them to get, through the local education authorities, the financial assistance they so desire.

    Grazings, Crown Lands
    Mr. Niall Macphersonasked the Secretary of State for Scotland why it is not the invariable practice to put grazings on Crown lands up for public auction rather than to put them out for tender.
    Mr. Westwood: Grazings on Crown land under the charge of the Commissioners of Crown Lands are generally let with neighbouring Crown farms. In exceptional cases where it is necessary to let such grazings separately, the method of letting adopted varies in accordance with the circumstances of the particular case, including the extent of the grazing and the custom of the locality. If the hon. Member has a particular case in mind and will let me have particulars of it, I will have further inquiries made,

  DISABLED EX-SERVICEMEN (SURGICAL SHOES)
  Mr. Lipsonasked the Minister of Pensions if he is aware that surgical shoes ordered by a disabled ex-Serviceman, of whose name he has been informed, through his Department on 12th October, 1946, have not yet been received; and, as this is causing financial and other hardship, if he will arrange for them to be delivered without further delay.
  The Parliamentary Secretary to the Ministry of Pensions (Mr. Blenkinsop): I am pleased to say that, in the case to which the hon. Member refers, the contractors have promised to despatch the shoes today.
  Mr. Lipson: While thanking my hon. Friend for that reply, may I ask him if he will take steps to see that these disabled men get their shoes, because at the present time men in this position are unable to work?
  Mr. Blenkinsop: We are very much concerned with this whole position, and I am glad to say that the step we have already taken has cut down delays considerably. We are aware of the trouble that still arises, and we are trying to deal with it as rapidly as possible.

  PRISONERS OF WAR

    Landworkers (Protective Clothing)
    Mr. Digbyasked the Secretary of State for War why German prisoners of war working on the land are not issued with ground sheets or gas capes so that they can continue work during rain like other landworkers.
    The Secretary of State for War (Mr. Bellenger): The supply of ground sheets and gas capes is insufficient to provide prisoners of war with them. Prisoners of war have, in any case, greatcoats, and in each Command there is held a pool of protective clothing which may be issued to men engaged in special tasks which make its use necessary.
    Mr. Digy: Is the Secretary of State aware that in my constituency these men are discontinuing work during rain; that that is most unsatisfactory for the farmers who pay for their services, and that a large number of gas capes have recently been disposed of as Government surplus stock?
    Mr. Bellenger: Some may have been, having been declared surplus, probably, by the Service Departments; but not a large number, as far as I know. I have consulted my right hon. Friend the Minister of Agriculture to see if we could help to alleviate the situation, but I am afraid I cannot help any more.
    Major Cecil Poole: Is my right hon. Friend aware that there are still many British agricultural workers who cannot get these capes? Would it not be much better to look after our own agricultural workers before we worry about the prisoners of war?
    Mr. Driberg: Is my right hon. Friend await that the prisoners at Camp 18, which is an officers' camp, are, in fact, issued with gas capes? If it is possible to issue them at one camp, why not issue them at others, so far as the supplies go?
    Mr. Bellenger: As I have said in my answer, there is a pool of protective clothing held in each Command. That probably accounts for those prisoners having gas capes.
    Air-Commodore Harvey: Will the right hon. Gentleman have a search made of the maintenance units in order to see what supplies exist and then sort them out?
    Mr. Bellenger: Yes, Sir, I am quite prepared to scrape together what I can.

    Repatriation
    Mr. Stokesasked the Secretary of State for War whether arrangements have now been made to place German prisoners
    860
    captured in the Channel Islands in their right category for repatriation, in accordance with the promise made in July, 1944, to the prisoners of war by the right hon. Member for Woodford (Mr. Churchill).
    Mr. Bellenger: The Germans in the Channel Islands after July, 1944, were in the position of a beleaguered garrison; they did not surrender until the final capitulation of the German armed forces, and cannot be regarded as prisoners, of war until they actually came under British control. They are, therefore, correctly placed in the same group for repatriation as others captured during May, 1945.
    Mr. Stokes: Has my right hon. Friend studied the wireless declaration of the right hon. Member for Woodford? Because in that declaration he made the position perfectly clear, and if my right hon. Friend carries out what he intended all these people would be in category 19 instead of 29.
    Mr. Bellenger: No, Sir, I have not personally studied in detail the speeches of the right hon. Member for Woodford' (Mr. Churchill)—
    Mr. Stokes: That was the promise.
    Mr. Bellenger: We have made an exhaustive search in the War Office to trace what the right hon. Gentleman did say in this connection, but it does not confirm what my hon. Friend has said.
    Mr. Stokes: Would my right hon. Friend bear in mind that while the right hon. Gentleman was Minister of Defence he was not Secretary of State for War; that the declaration was made over the wireless; and that my right hon. Friend will find the record not in the War Office, but in the B.B.C.?
    Mr. Bellenger: Well, we cannot find the record anywhere, not even with the right hon. Member himself.
    Mr. Stokes: I will send it to my right hon. Friend.
    Mr. Driberg: Has my right hon. Friend asked the B.B.C. for the record? Because it is generally known among these prisoners that there was some such promise, which they claim has been dishonoured.
    Mr. Bellener: We have made an exhaustive examination, even going to the private secretary of the right hon. Member for Woodford, and nobody seems to know anything about it except my hon. Friend the Member for Ipswich (Mr. Stokes).
    Mr. Driberg: Ask the B.B.C.

  BRITISH ARMY

    G.S.C. Records, Edinburgh (Removal)
    Mr. Willisasked the Secretary of State for War when the G.S.C. Records are to be removed from Edinburgh.
    Mr. Bellenger: The date is not yet settled, Sir.
    Mr. Willis: Is my right hon. Friend aware that the workers involved understand that the date is 31st July, and that according to what was said by representatives of his Department it would not be until the end of the year? As this is likely to cause hardship and inconvenience, will he consider it again?
    Mr. Bellenger: Yes, Sir we shall certainly take the staff fully into our confidence as soon as the date has been definitely setled.

    Handkerchiefs
    Mr. Jannerasked the Secretary of State for War why men now being called up to the Army under the National Service Acts are not issued with handkerchiefs; and, as they have to hand in any surplus coupons to the authorities prior to joining up, if he will arrange for the issuing of handkerchiefs together with other articles of Service clothing.
    Mr. Bellenger: No, Sir. Handkerchiefs have never been supplied to soldiers from military sources, and there would appear to be no reason why National Service men should be treated differently in this respect from other soldiers. Ever since clothing rationing was introduced commanding officers have been empowered to issue coupon-equivalent certificates to soldiers to enable them to buy their own handkerchiefs from civilian retailers.
    Mr. Janner: Is my right hon. Friend aware that the information is not given to the soldiers, that they have not the opportunity of obtaining the necessary
    862
    coupons for handkerchiefs, that all their coupons are taken from them when they join the Army, and that consequently, great hardship is being caused to a great number of people?
    Mr. Bellenger: I should be very much surprised if soldiers joining the Army do give up all their coupons. After all, I have a son myself.

    Civilian Belts
    Mr. Viantasked the Secretary of State for War if he is aware that the regimental sergeant-major attached to H.Q. Company Corps, 2nd H.L.I., B.F.I.G., has recently taken away the civilian belts, purchased and owned by the men of the company, and when asked for their return said he intended to burn them; and if he will take such disciplinary action as will ensure financial compensation to all those who had their belts taken from them and destroyed.
    Mr. Bellenger: I am having inquiries made about this and will write to my hon. Friend.

    Requisitioned Property (Release)
    Mr. Granville Sharpasked the Secretary of State for War how many of the 404,000 acres held by his Department on 31st December, 1946, under Defence Regulation 51 and the 1,290,836 acres then held under Defence Regulation 52 have now been released; and what further releases will be made by 30th June, 1947.
    Mr. Bellenger: Up to date information about the amount of land held by my Department under Defence Regulation 51 is not readily available within the War Office. A return from all home Commands is due early next month. When it has been received I will send the information to my hon. Friend. On 31st May training rights under Defence Regulation 52 were held over 855,465 acres. Of this area 229,200 acres have been approved for release, and I hope that the greater part will be released during this month.
    Mr. G. Sharpasked the Secretary of State for War how many inexpensive flats and small houses were held by his Department on 30th April, 1947; and how many of these he estimates will be de-requisitioned by 30th June, 1947.
    Mr. Bellenger: At 30th April, 1947, my Department held 69 inexpensive flats and

    863
    196 small houses. I estimate that of these, some 40 flats and 60 small houses will be derequisitioned by 30th June, 1947.
    Mr. Orr-Ewing: What does the right hon. Gentleman mean by "inexpensive flats"? Does that term include flats that would come under the Rent Restrictions Acts if derequisitioned?
    Mr. Bellenger: The term was used by my hon. Friend in his Question, and I have given him the answer. Perhaps, it would be possible for all three of us to study and define it.
    Mr. Oliver Stanley: In order to answer the Question, the right hon. Gentleman must have known what the Question meant. Could he not confide that to us?
    Mr. Bellenger: Certainly, if a Question is put down I will give a detailed answer.
    Mr. Sharp: Is my right hon. Friend aware that the term was originally used by his Department when submitting evidence to a Select Committee of this House?
    Mr. Swinglerasked the Secretary of State for War what is the size of the area of Cannock Chase at present requisitioned by his Department; for what purposes it is being used; and when he proposes to derequisition it.
    Mr. Bellenger: At present an area of 485 acres known as Teddesley Park is being used under Defence Regulation 52 for general infantry training purposes. This area will be required also for training Territorial Army units, and a proposal to use it permanently will shortly be considered by the Inter-Departmental Committee on Service Land Requirements.
    Mr. Swingler: Is the Secretary of State aware that this area constitutes a great natural amenity for thousands of people in the West Midlands; that previously it has always been accessible to the public in peacetime; and that there is very serious opposition to any proposal that it should be taken over as military training ground?
    Mr. Bellenger: Yes, Sir, I am in complete sympathy with my hon. Friend and his constituents. It may perhaps comfort him and them to know that the training rights which we shall want will he so small that we shall interfere with the publics very little, if at all.

  NATIONAL FINANCE

    Dollar Expenditure (Essential Foodstuffs)
    Mrs. Castleasked the Chancellor of the Exchequer if he will give an assurance that he will not try to effect savings in dollar expenditure by cuts in imports of essential foods, or by refusal to buy increased quantities where these become available.
    The Chancellor of the Exchequer (Mr. Dalton): No, Sir. I cannot give an assurance in such general terms.
    Mrs. Castle: Is my right hon. Friend aware that, if we are to make a success of the production drive, it is very important to maintain and, where possible, to improve our supplies of essential foods; and will he at least give an assurance that every form of luxury dollar expenditure will be ruthlessly pruned before basic food purchases are cut?
    Mr. Dalton: I hope the hon. Lady will set an example by stopping smoking.
    Mr. Michael Foot: In view of the supreme importance of this subject, will the Chancellor consider arrangements for a Debate in this House on the various items of dollar expenditure, so that we may compare one with another, before he considers making cuts in dollar expenditure on food?
    Mr. Dalton: In this House, that is a matter upon which a Question should be addressed to my right hon. Friend the Lord President of the Council.
    Mr. Foot: Is it not possible for the Chancellor to make any representations to the Lord President of the Council?
    Mr. Wyatt: Would my right hon. Friend give an assurance that when he is considering any saving of dollar expenditure which may be necessary he will use all his influence to see that the first cuts are on our troops overseas and not on food for our homes?
    Sir Waldron Smithers: Why did not the Chancellor answer this Question by saying: "We are up against it. Work or want"?

    Alleged Budget Leakage (Inquiry)
    Lieut.Commander Gurney Braithwaiteasked the Chancellor of the Exchequer whether he has now completed

    865
    his inquiry into the alleged Budget leakage.
    Mr. Dalton: Yes, Sir. In view of these allegations, the Chairman of the Stock Exchange, at my request, set up a Committee of Inquiry, which reported unanimously that there is no evidence that purchases of shares were made by any person on the strength of prior knowledge of the contents of the Budget. This conclusion is supported by the information which I have received from the Government Departments concerned. I should like to thank the Chairman of the Stock Exchange' and his colleagues for their co-operation in this matter. In the light of their report, I have decided that there is no case for any further formal investigation.
    As regards the increase in the Tobacco Duty, arrangements were made, in accordance with long standing practice, for retailers to have notice of the change soon after 5 p.m. on the evening of Budget Day, that is to say, two hours after the Stock Exchange had closed. Since I did not announce this increase until nearly the end of my Budget Speech, some retailers knew of the increase before the announcement in this House could have reached them, but they were not thereby enabled to make any improper use of this information.
    Lieut.-Commander Braithwaite: May I ask the right hon. Gentleman two supplementary questions arising out of the result of his full inquiry, which he was good enough to make at my request, and which I am sure will allay the disquiet which undoubtedly existed at the time? First, did the inquiry cover share dealings on the provincial stock exchanges which are not under the jurisdiction of London? Secondly, did he follow up the evidence, backed by the names and addresses of credible witnesses, which I supplied to him through the learned Solicitor-General, which appeared to indicate an official indiscretion which disclosed the repeal of the Artificial Silk Duty one week prior to the Budget Statement?
    Mr. Dalton: Sir, I have been anxious that this matter should be fully probed, in view of the statements which were made in the House. The report of the Stock Exchange Committee is quite comprehensive. In reply to the first supplementary question, the conclusion is, as I
    866
    have already stated, that there is no evidence that purchases of shares were made by any person—I emphasise, by anybody—on the strength of prior knowledge.
    With regard to the second matter, it appears that there was—how shall I say?—some gossip which may arise at any time as to why certain persons were being moved from one post to another in the country. But I am satisfied on the report of the Chairman of the Stock Exchange Committee, and from many inquiries through the Customs and Excise Department, that it could have been no more than gossip—gossip which may very well have founded itself upon the very frank statement which I made last year in the course of the Debates in this House, that I was very anxious to see the repeal of the excise on artificial silk. Indeed, I went perhaps rather further than it is usual for Chancellors of the Exchequer to go, in saying that I should be disappointed if it was not possible for it to be repealed this year. This was a very flat statement, made quite sincerely, in response to pressure which I was sorry then to have to resist; and it is not at all surprising that this point should have been picked up and passed about in the course of conversation But, Sir, having said this much I hope that the hon. and gallant Gentleman will now see proper to withdraw the statement he made on 17th April:
    "There has been undoubtedly a Budget leakage."— [OF FICTAL REPORT, I 7th April, 1947; Vol. 436, c. 428.]
    In my view, the inquiries that have taken place have shown that there was no Budget leakage. In view of that, and in view of the hon. and gallant Gentleman's acceptance, as I understand it, of the report of the Chairman of the Stock Exchange Committee, I hope the hon. and gallant Gentleman will now see it right to withdraw this rather flat-footed statement, which he made prior to the inquiry?
    Lieut.-Commander Braithwaite: I do not know whether I can put this in an interrogatory form, when I am asked to make a withdrawal. In view of the full inquiry which the right hon. Gentleman has made, is he aware that I am satisfied that no improper conduct took place?
    Air-Commodore Harvey: If the right hon. Gentleman is in office next year, will

    867
    he try to time his speech so that this House gets the information before outside sources?

    Exchange Control Act (Operation)
    Mr. Bossomasked the Chancellor of the Exchequer when the Exchange Control Act will come into operation; and when the Order will be made authorising the switching between dollar securities.
    Mr. Dalton: I hope in August, both for the Act and for switching.
    Mr. Bossom: Is it a fact that today switching can be made between dollar securities?
    Mr. Dalton: No, Sir, not in an absolute sense. I have answered Questions on this subject before. Perhaps if there is any particular case in which the hon. Gentleman is interested he will communicate with me. We cannot grant complete and unrestricted powers at present.
    Mr. Bossom: Would the Minister say whether it is possible today to switch between American and Canadian dollar securities?
    Mr. Dalton: No, Sir, it is not possible.

    Pound Sterling (European Countries)
    Mr. Bossomasked the Chancellor of the Exchequer the price at which the British £ can be bought in the banks of the countries of Europe.
    Mr. Dalton: If the hon. Member will let me know what particular countries he has in mind, I shall be glad to give him this information.
    Mr. Bossom: Can the Chancellor tell me what can be obtained for the English £ in Belgium, for example?
    Mr. Dalton: The hon. Member's Question is in very general terms, and the reply I have given is, I think, a reasonable one. If he will put down a Question in regard to any particular country in which he is interested, I will try to give him the information.
    Mr. Bossom: Is the Chancellor aware that I have just given a particular case?
    Mr. Dalton: Perhaps the hon. Member will put down a Question.

    Foreign Exchange Allowance
    Mr. Jannerasked the Chancellor of the Exchequer whether he will give an assurance that he will give ample notice in advance of any intention to reduce the £75 foreign exchange allowance for persons going abroad, in view of the fact, that in present circumstances, it is necessary for people to plan journeys overseas many months in advance.
    Mr. Dalton: Yes, Sir, so far as possible.

  HOUSE OF COMMONS (LATE NIGHT TRANSPORT)
  Mr. Mellishasked the Financial Secretary to the Treasury whether he will make a statement on the operation of the late night transport scheme for Members and others.
  The Financial Secretary to the Treasury (Mr. Glenvil Hall): Yes, Sir. Returns for the period up to 10th May show that on average, the number of Members using the buses was no more than 34, or about three per bus, and their fares have contributed only £45 towards the £394, which represents their share of the cost. The number of staff using the buses averaged £27. It was felt by the Government that, in these circumstances, continuance of the service could not be justified. The question whether any alternative facilities should be provided for the staff is now under consideration.
  Mr. Mellish: When will the Financial Secretary be in a position to let us know when this alternative scheme will be available, as there are still a number of Members, particularly on this side of the House, who require this alternative transport in the early morning?
  Mr. Glenvil Hall: I am sorry that I am not in a position to give that information. I am unable to state a date, but we are doing our best to see whether an alternative form of service is possible.
  Mr. Lipson: Is not the best way to deal with this problem to abolish late Sittings?
  Lieut. - Commander Braithwaiteasked the Financial Secretary to the Treasury between what dates the special late omnibus service for hon. Members and staff of this House was operated; whether any financial loss was thereby sustained; and, if so, how much.
  Mr. Glenvil Hall: The service was in operation between 17th March and 23rd May. Up to 10th May, the latest date for which figures are available, the excess of costs over receipts, was £750 13s. ld., of which £348 8s. 4d. was due to conveyance of Members.
  Lieut.-Commander Braithwaite: May I ask whether this loss falls upon the taxpayer, and, if not, by whom it will be borne; and, secondly, whether these vehicles will now be transferred to the service of the noble Lords in another place, who, I understand, are now sitting inordinately late?
  Mr. Glenvil Hall: The answer to the first question is that we have agreed to a Supplementary Estimate to meet this, and it will be a matter for discussion when we come to consider the Estimates next time.
  Lieut.-Commander Braithwaite: When this service was originally under consideration, did not the Financial Secretary say it existed on the basis that cost would fall on the taxpayer?
  Mr. Glenvil Hall: Yes, Sir, but I did say that we were working completely in the dark, that the service was an experimental one, and that we were basing the fares on what had been given to us as a reasonable basis, which would mean that Members would pay their proper share towards the costs.
  Mr. Osborne: If the Government's economic planning turns out to be an equally bad failure will they similarly review it?

  MINISTERS' LETTERS (SIGNATURE)
  Mr. Dribergasked the Financial Secretary to the Treasury if he is aware that, in recent weeks, an increasing number of letters from Ministers to Members of Parliament have been signed by Ministers' private secretaries; and if he will give instructions that all letters to Members of Parliament are to be signed personally by Ministers or parliamentary secretaries, or, in the case of minor or routine matters, at least by parliamentary private secretaries.
  Mr. Glenvil Hall: I would refer to the answer given to my hon. Friend the Member for Gravesend (Mr. Allighan) on 8th October last.
  Mr. Driberg: Is my right hon. Friend aware that I cannot possibly remember a rather secondary answer which goes back as far as that? Will he say what that answer is?
  Mr. Glenvil Hall: The previous answer was that Ministers responsible for Departments must be left to deal with the letters which come to them and are answered on their behalf as they think fit.
  Mr. Driberg: Is my right hon. Friend aware that the Foreign Office, the Air Ministry and the Ministry of Labour set a very good example in this matter, and if Ministers who are as busy as the Foreign Secretary, the Minister of State, the Secretary of State for Air, and the Minister of Labour can sign their own letters, why cannot some of the others?
  Mr. Eden: Will the Financial Secretary bear in mind that it has been a longstanding tradition of this House that Members are entitled to replies from Ministers?
  Mr. Glenvil Hall: That is so, and I hope that Departments will be reminded of this well-established practice by these questions and answers.
  Mr. Rankin: As original communications are not always returned with the replies, can that matter also be looked into?
  Mr. Glenvil Hall
  Mr. Gallacher: Is the right hon. Gentleman aware that some time ago, in connection with an alien, I had a letter from the Home Office, signed by the Parliamentary Private Secretary, and that when he went to the police with it, they refused to recognise it because they did not know who the Parliamentary Private Secretary was?

  TRADE AND COMMERCE

    U.S. Motor Cars (Importation)
    Mr. Boyd-Carpenterasked the President of the Board of Trade how many licences for the importation of Packard motor cars from the U.S.A. have been granted since 1st January, 1945; and how many of these vehicles have actually been imported and at what total cost in dollars.
    The Parliamentary Secretary to the Board of Trade (Mr. Belcher): The number of licences granted for the import of

    871
    cars from the U.S.A. from 1st January, 1945, to the end of April, 1947, was 346. It is not known how many of these were of the make referred to by the hon. Member. The total number of cars imported from the U.S.A. under the licences granted was 88. Foreign exchange was made available in respect of a small proportion only of the cars licensed, the others being licensed as gifts. The sterling equivalent of the exchange so authorised was £9,722.
    Mr. Boyd-Carpenter: Cam the Parliamentary Secretary tell the House why finance was made available in any case?
    Mr. Belcher: If the question is asked of me in respect of any particular case, I will do my best to give the answer.

    Clothing Coupons
    Mr. Bramallasked the President of the Board of Trade when he proposes to issue supplementary clothing coupons to men and women released from the services after 1st January, 1946, in the same way as an issue has already been made to those released before that date.
    Mr. George Porterasked the President of the Board of Trade if he is now in a position to state when the supplementary coupons will be issued to Service ranks discharged since January, 1946.
    Mr. Belcher: I would refer my hon. Friends to the reply given on 5th June last to a similar Question by my hon. Friend, the Member for Bolton (Mr. J. Lewis).

    Industrial Organisation (Member's Letter)
    Mr. Geoffrey Cooperasked the President of the Board of Trade when the honourable Member for Middlesbrough, West, may expect a reply to his letter of 25th April dealing with the need for the reorganisation and revitalising of the regional organisation for industry.
    Mr. Belcher: A reply was sent to my hon. Friend on 5th June.
    Mr. Cooper: While thanking my hon. Friend for his reply, which I received only yesterday after waiting six weeks, may I ask if he realises that I have been actively pursing this matter for nearly a year; and can he now give me an undertaking that publication will be made of the proposals for the regional organisation
    872
    of industry, so that they may be more widely appreciated throughout the country?
    Mr. Belcher: My hon. Friend has been making a large number of suggestions over a long period, and he must realise that it is necessary to go into them carefully before any decision is taken.
    Mr. Cooper: I beg to give notice that in view of the unsatisfactory nature of the reply, I shall raise the matter on the Adjournment.

    U.S. Woollen Imports (Tariff)
    Mr. Osborneasked the President of the Board of Trade what representations have been made to the U.S. Government against the proposed tariff increase on woollen imports; and' whether he will make a statement on this subject.
    Mr. Harold Wilson (Secretary for Over seas Trade): His Majesty's Government have been following closely the proposal now before the United States Congress for the levy, in certain circumstances, of a fee on imports of wool. It remains to be seen whether it will become law in its present form; but I have seen published statements of members of the U.S. Administration to the effect that the latter is opposed to the enactment of the legislation in its present form as inconsistent with the objects of the International Trade Conference now proceeding at Geneva. We have not made any formal representations to the United States Government on this subject; but they are fully aware, from discussions at the Geneva Conference, of our views and of those of the Dominions.
    Mr. Osborne: Will the Parliamentary Secretary make it clear to certain American people that we cannot continue to import from them unless they are prepared to take some of our goods in return, which is a lesson they do not seem to have learnt?

    Works of Art (Import Licences)
    Mr. Benn Levyasked the President of the Board of Trade whether he is aware that contemporary works of art can be brought into this country only under import licence; that such licence is in fact rarely granted and, consequently, seldom applied for; and whether he will, take steps to remove this virtual embargo
    Mr. Belcher: Works of art may be imported only under licence, and import licences are, in general, granted only against an undertaking to re-export all the imports within a reasonable period. For balance of payments reasons, it is not at present possible to modify this policy.
    Mr. Levy: Will my hon. Friend explain what is the logic which prevents the importation of pictures at negligible cost primarily from soft currency areas, but allows the importation of moving pictures from hard currency areas to the tune of nearly £20,000,000?
    Mr. Belcher: That seems to be getting rather a long way from the original Question, and raises an issue of general policy for which I am not responsible. I would point out that there is a nondiscriminatory obligation on our part which makes it difficult for us to licence importation of works of art coming from soft currency areas.
    Mr. Levy: Is my hon. Friend aware that I was not suggesting there should be discriminatory importation, but that, if there were completely non-discriminatory importation, the drain on our resources would be negligible—perhaps a mere £20,000 or £30,000?
    Mr. Eden: Can the Parliamentary Secretary tell us what is the estimated saving? Surely, it is undesirable to prevent works of art moving about the world?
    Mr. Belcher: We do not stop works of art moving about the world if they are imported to this country and subsequently exported. I should have thought it was obvious that in our present currency circumstances it is essential, however much we value works of art, to carry out our obligation of buying food for our people
    Mr. Wyatt: Will the Parliamentary Secretary explain why it is all right in certain circumstances to import American motor cars, but wrong to import works of art?
    Mr. Levy: Will my hon. Friend at least give an undertaking that he will recon-
    874
    sider this matter and make a further statement to the House?
    Mr. Belcher: The matter is not one for general consideration, but for consideration of each case on its merits.
    Mr. Levy: In view of the unsatisfactory nature of the reply, I am very sorry that I must raise the matter again on the Adjournment.

QUESTIONS TO MINISTERS
The following Question stood on the Order Paper:
MR. GALLACHER,—TO ask the Parliamentary Secretary to the Admiralty, if he will promise an early statement on the future of Rosyth naval base and on the proposal for a graving dock on the Clyde estuary, capable of berthing and servicing the biggest Clyde-built ships.
Mr. Gallacher: I want to put a point to you, Sir, in connection with Question No. 80. For three years some of us have been trying to get an answer from the Admiralty about the future of the Rosyth Naval Base and the Clyde Estuary, with- out any result. In desperation, I put the Question down to the Prime Minister, in the hope of getting a satisfactory answer, but I now see that it has been transferred to the Admiralty. Cannot we get this Question answered by the Prime Minister?
Mr. Speaker: If the hon. Member will notice when Questions to the Admiralty come on early in the week, perhaps he might put his Question to them then.
Mr. Gallacher: It has been hopeless to do that with the Admiralty, and I want the Prime Minister to answer the Question.
Colonel Gomme-Duncan: I would also like to point out, Mr. Speaker, that it has been impossible to get a satisfactory answer out of the Admiralty at all. This Question was put to the Prime Minister in the hope that he would give judgment on the subject.
Mr. Speaker: It has never been the custom of this House that in Departmental matters the Prime Minister should be called in. The Question always has to go to the Department which is immediately concerned.

POLES (DEPORTATION ORDERS)
The Secretary of State for the Home Department (Mr. Ede): On Thursday last my right hon. Friend the Lord President of the Council undertook that the Government would consider whether a full statement could usefully be made on the removal to the British zone of Germany of some members of the Polish Armed Forces who are unwilling either to return to Poland or to join the Resettlement Corps. As the responsibility for deportation orders rests on the Home Secretary, and as it appeared that there were various misapprehensions about the Home Secretary's powers, it is appropriate that T should make this statement.
My hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) stated that
"a deportation order to send a man to a particular country cannot be made without the man's consent unless it is his own country "[OFFICIAL REPORT, 5th June, 1947; Vol. 438, c. 387.]
The right hon. Member for Warwick and Leamington (Mr. Eden) suggested that a deportation order could not be made without the authority of a court. Both these suggestions are mistaken. As regards aliens who are convicted of offences, the Aliens Order, 1920, made tinder the Aliens Restriction Acts, 1914, and 1919, provides that the court may recommend deportation, but the decision whether -or not to give effect to such recommendation has to be taken by the Home Secretary. Moreover, deportation is not limited to cases where aliens are convicted of offences. The Aliens Order places on the Home Secretary a general responsibility to make a deportation order against an alien in any case where he "deems it to be conducive to the public good." Therefore, the responsibility for making a deportation order is fairly and squarely that of the Home Secretary alone. He need not accept the recommendation of the court and he is empowered to make an order when no court makes a recommendation if he "deems it to be conducive to the public good."
The effect of a deportation order is expulsion from the United Kingdom, and before an alien can be expelled from the United Kingdom, there is a practical necessity of ascertaining that some other country is prepared to admit him. If some country is prepared to admit him, the
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alien can be placed on a ship sailing to that country, and whether the alien is or is not a national of that country there is no requirement in law that his prior consent must be obtained. The Poles in question have been given the option of returning to Poland. As my right hon. Friend the Secretary of State for Foreign Affairs has repeatedly indicated, His Majesty's Government are anxious to give the fullest facilities for Poles to return to their own country and to aid in the reconstruction of that country, but it is not the policy of the Government to force them to return to Poland against their will.
It would, however, be entirely wrong to allow members of the Polish Forces to think that because they are unwilling to return to Poland they can continue indefinitely to be paid and maintained in this country as members of those Forces. The process of demobilising the Polish Forces cannot be held up, and the alternative offered to those members who are unwilling to return to Poland is that they should join the Resettlement Corps, with a view either to being found suitable employments in this country or to emigrating if they prefer and can find, or be found, opportunities for settlement overseas. If a man will not accept either of these offers, His Majesty's Government cannot be expected to retain any responsibility for him or to allow him to remain in this country, and, as I pointed out in the discussion on the Polish Resettlement Bill, the only possible course is to send such a man elsewhere and to make it clear to him that he can no longer look to us for help.
Accordingly, by arrangements made with the Control authorities in Germany the 105 men to whom the Secretary of State for War referred were taken to a demobilisation camp in the British zone, demobilised from the Polish Armed Forces, provided with civilian clothes, given a small sum of money, and told that they can expect no further help from the British authorities.
Out of some 136,000 men who have so far been offered the alternatives of return to Poland or enrolment in the Resettlement Corps, about 5,000, or 3·7 per cent. of the total, have so far failed to accept one or other of the alternatives. As regards many of the 5,000, it may be that their failure is still due to misapprehensions which every effort is being made to

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remove, and it is expected that if it is brought home to them that there can be no further delay, the great majority of them will make their choice. The recent announcement of the Polish Government to the effect that those who enlist in the Corps may still return to Poland, should remove the last excuse for reluctance to rejoin the Corps on the part of those who are still not sure whether they will wish at a later date to go back to their own country. No greater disservice can be done to those men who are still hesitating than to encourage them to think that there is still room for further procrastination.
Professor Savory: Would it not be possible to send to these camps to talk to these men, the Under-Secretary, with his engaging smile and charming manners, to put the case before them with all simplicity, because there is misundertanding, as I see from the innumerable letters I receive every day?
Mr. Ede: Various people have gone from time to time to these camps The problem is that a great many of the men cannot understand English, and that my hon. Friend the Under-Secretary cannot speak Polish.
Mr. Sydney Silverman: May I ask my right hon. Friend three Questions? First, whether he is aware that I am interested chiefly in the application of these powers not to members of the Polish Armed Forces, but to stateless and other persons of long residence in this country? Secondly, whether he claims as Home Secretary that he has the right to deport aliens to a particular country without their consent, that country not being their own? Thirdly, whether he claims that the British Control Commission controlling the British zone in Germany, which, after all, is under the control of, and responsible to, the Foreign Secretary of this country, is really a foreign Government in the sense of this deportation Order?
Mr. Ede: So far as the first question is concerned, I am well aware that my hon. Friend takes a very close interest in this subject over a very wide field, and he has on occasion been of assistance to me in representations which he has made with regard to particular individuals. As regards the second question, I claim that I have the right to deport an alien if I am acting within the terms of the Aliens
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Order, 1920, whether that alien consents or not, to any country which is willing to accept him.
Mr. S. Silverman: A particular country?
Mr. Ede: I think that I have answered the question which the hon. Member put to me. As regards the third question, the British Control Commission is the body which has the right to say who shall and who shall not enter Germany at the present time. When I get their consent to the admission of these aliens, I consider that I am within the powers granted to me by Parliament in sending the aliens there.
Mr. Boyd-Carpenter: Will the Home Secretary clear up one matter which the Secretary of State for War would not deal with last week, in reference to the 105 men who have already been sent to Germany? Are these men entitled now to proceed to any other country which will take them, or must they stay in Germany for the rest of their natural lives?
Mr. Ede: No, Sir. They are at liberty, so far as we are concerned, to proceed to any other country into which they can gain entry,
Mr. Skeffington-Lodge: Has the Home Secretary fully considered the unwisdom of letting loose in Germany in present conditions these obviously disgruntled men?
Mr. Ede: I have to consider how I am to maintain discipline in these forces when all other sanctions have vanished. I am glad to say that 23 of these men, when they actually saw the deportation order, said, "Very well, we will now make up our minds." I am hopeful that that example will be followed by a large number of others, now that they know we intend to carry out the pledges which I gave to this House when I asked it to give me the Polish Resettlement Bill.
Major Legge-Bourke: Can the Home Secretary give an assurance to the House that before the 105 men were deported it was made clear to them that, if they refused to become members of the Polish Resettlement Corps or, alternatively, refused to go to Poland, they would be deported?
Mr. Ede: Yes, Sir. It was made quite clear to them, and all these men have

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had a very long time in which to make up their minds—as long as nine months in some cases—and I hope that it will be in the recollection of the House that the hon. Member for Cheltenham (Mr. Lipson), as long ago as February last, read out the form in which this issue is presented to the men.
Mr. Stokes: Is my right hon. Friend satisfied that each one of them understands that the Resettlement Corps is neither a military nor a quasi-military organisation, because letters coming in dearly show that they do not know? Secondly, with regard to the Home Secretary's right to deport people against their will to a particular country, does he still maintain that he has that right if the person concerned has reasonable cause to believe, though quite unfairly, he or she will be put to death on arrival?
Mr. Ede: With regard to the second part of the question, I have maintained the policy, if representation is made to me that the person I propose to deport will be persecuted for either religious or political reasons, of declining to deport that person, and I am at the present time maintaining in this country some notorious criminals because they suggest that their political or religious views, if any, will not be acceptable in their native country. As regards the first part of the question, every effort has been made to bring home to these men that this is not a military or quasi-military organisation. But I want to be frank with the House. I sometimes fear, as I said in answer to a supplementary question by the hon. Member for Queen's University of Belfast (Professor Savory), that on occasion our wishes are not accurately conveyed to the Polish speaking members of this Force, and I am considering ways and means whereby I can be sure that they shall be made fully aware of the exact conditions in their own language.
Major Tufton Beamish: Will the Home Secretary say under what considerations he was acting in selecting these 105 men, from the 5,000, for deportation?
Mr. Ede: I did not select them. The Secretary of State for War, who is responsible for the Polish Resettlement Corps, brought to my notice the names of a certain number of people. I carefully
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examined their records and what they had done, and where I deemed the cases to be suitable I made a deportation order. The effect of that, in some cases, was, as I have said, they then made their election between the two alternatives we proposed to them.
Mr. H. Hynd: In view of the fact that all previous pledges on these matters have been very fairly fulfilled by the generous conditions of the Polish Resettlement Corps, would it not now be desirable give them a clear alternative of joining the Resettlement Corps or going back to Poland; and in view of the feeling that has been aroused in Poland on this matter, would it not also be desirable for the Government to consult with the Polish Government on this matter?
Mr. Ede: That alternative has been very clearly put to these people. I can only hope that what has happened just recently will make these men feel that this country is serious in this matter, after the very generous treatment that has been extended to them.
Captain Crookshank: Can the Home Secretary say at what stage, if any, these men were told that they were likely to be sent to Germany, in view of the obvious repugnance of us all that anyone should be deported to that country against whom they fought?
Mr. Ede: When the deportation orders were read to them they were then told to which country they were going.
Mr. Janner: Is the Home Secretary aware that in some of these cases his colleague the Secretary of State for War has informed individuals that they will be allowed to emigrate to another country, and told that this would take place early this year; and is he prepared in those cases to refrain from taking any further steps to have them deported?
Mr. Ede: No, Sir. There may be special cases which may be the subject of some special consideration, but, generally speaking, the way for a member of the Polish forces to emigrate is for him to join the Resettlement Corps, and he will then be given every facility to get into touch with the country to which he desires to go.
Mr. Orr-Ewing: Can the right hon. Gentleman say whether, in the cases of the

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men deported, they still retain their old Polish passports, or are they considered stateless persons?
Mr. Ede: I would like notice of that Question.
Mr. S. Silverman: Is my right hon. Friend aware that his answer to my second Question about the extent of his powers goes far beyond what has been claimed en his behalf in the courts by the Law Officers of the Crown; and whether he appreciates that, if he abides by that, it is within his power, without the intervention of any court or any power of control, to deport anybody of any nationality of any citizenship or of no citizenship at all to Germany, merely by reason of the fact not that there is an independent Government there ready to take them, but because he can make arrangements with another Department to send them.
Mr. Ede: I prefer not to discuss this matter on the basis of hypothesis, but on the issue of practical cases of individuals whose fate may be concerned.
Mr. Wilson Harris: Is the right hon. Gentleman aware of the general satisfaction at his clear and common-sense handling of this question?
Mrs. Leah Manning: In view of the fact that many of these difficulties arise through the misrepresentations by officers of this Corps, and particularly highly placed officers, would it not be well to accept the well intentioned suggestion of the hon. Member for Queen's University (Professor Savory)? There are many good reliable interpreters who could be used for this purpose and we desire above everything else that the position should be made abundantly clear to these men.
Mr. Ede: My trouble is that this question is bedevilled by the extremists on both sides, and I have no doubt that my right hon. Friend the Secretary of State for War, who has heard the questions and answers on this subject, will realise that it is the desire of the House that effective steps should be taken to make these people acquainted with this problem in their own language by reliable speakers of their own race.
Major Legge-Bourke: I should like to ask one other question, which is about the British Control Commission. Can the Home Secretary give us an assurance that, before these men were deported, it was understood that they would not just be thrown upon the distressed population of Germany, that there would be a job for them, and that they were serving some useful purpose in Germany?
Mr. Ede: No, Sir, I could not say that any negotiations went as far as that.
Sir A. Salter: There is just one question on administrative detail which I should like to ask. When these men knew definitely that they were being deported, did they still know that they had a chance to choose the Polish Resettlement Corps?
Mr. Ede: Yes, Sir. Up to the moment when they are actually placed on the ship any man can say, "I will now choose either A or B of the alternatives which are offered."
Major Beamish: On a point of Order. As there still seem to be some aspects of this matter which are not entirely satisfactory, I beg to give notice that I still hope to raise it on the Adjournment at the earliest possible moment.

ORDERS OF THE DAY

  FINANCE BILL
  Considered in Committee.
  [Major MILNER in the Chair]

  FINANCE BILL

    CLAUSE 1.—(Hydrocarbon oils.)
    3.55 p.m.
    Mr. Orr-Ewing: I beg to move, in page 1 line 16, to leave out "fuel oils or any gas oils," and to insert:
    "heavy hydrocarbon oils, other than lubricating oils."
    The object of this and the next two Amendments in my name is perfectly clear and simple. It is to remove the existing penny a gallon tax on kerosene just as the tax was removed from other heavier oils in this year's Budget. To make the picture clear, I should say that kerosene consists of two types of oil popularly known as vapourising oil and paraffin burning oil. Therefore, they have two different fields of activity. The history of this matter is shortly and simply that a tax was imposed in 1933 with one specific object—in order to discourage the use of these oils and encourage the use of coal. In this year's Budget, however, the tax was removed from the heavier oil classes immediately before this oil class, with exactly the reverse intention. It was removed from these heavier oils in order to encourage their use and to remove certain burdens on the coal supply, which obviously could not carry the load.
    I should like to show what the size of the tax is and its scope. The consumption of kerosene in this country is approximately 1,400,000 tons a year, and that is divided into about 750,000 tons of vapourising oil, which is the oil used in engines and tractors, and 630,000 tons in burning oil, with a total yield of tax of some £1,600,000. Though this sum is comparatively small, I feel conscious that one has to consider a request to remove a tax, even if it provides only £1,600,000, very carefully indeed in these days. Unless there is sound reasoning behind the request I do not think that it will be acceded to. I claim there is a very sound reason behind this claim.
    The section of the community most affected by the existing tax is the agricultural community. About 50 per cent.
    884
    of all kerosene used is used in agriculture. That is to say the direct effect of the tax on agriculture amounts to something like £860,000. That is about 96 per cent. of the vapourising oil used in agricultural tractors and engines. About 6 per cent. of the burning oil is used for domestic purposes, for incubators and so on. Some 35 per cent. of kerosene is used for domestic heating, lighting and cooking. As much as 75 per cent. of the burning oil is used for domestic purposes such as for lamps, stoves and cookers. Even in this domestic field the incidence of the tax is felt almost entirely by the agricultural community, or, at least, by the rural community. It is felt by those who have no other means of performing these types of service. Therefore, it is fair to claim that this is almost a discriminatory tax in its objective. It is felt by one specific section of the community, and that section not by any means over-blessed with the good things of life, compared with other sections of the community.
    It seems to me, as a matter of principle, that it is not right to add to the cost of producing food when the cost of the food to the consumer is already heavily subsidised by the community. Though the additional cost is only some £1,500,000, yet, as a matter of principle, whether it be large or small, it surely cannot be decided on that consideration alone but must be regarded in relation to the cost of food and its effect on maintaining that cost of production at a certain level or below. Otherwise, why not go further and add a heavier tax so as to have an enormous surplus at the end of the year which the Chancellor can then pay out from the other pocket in order to keep the cost of food down?
    4.0 p.m.
    I would also ask the Chancellor to consider the comparative picture provided by the situation of those in the rural districts and those in mining areas. A great deal has been done and is planned, so we are assured by the Chancellor, to encourage the miner and the miner's wife. A great deal is being done by means of the supply of food and the old established practice of providing fuel for the miner's home, but it does not seem to me to be a very good thing to keep a tax on the means of heating and lighting rural houses while at the same time continuing to

    885
    supply free coal in the mining villages. I do not think that that comparison is a very happy one, and it is not a point that we want to rub in, but it means that extensive differences exist between one section of the community and another.
    The tax on diesel oil was removed in the Budget, but the diesel oil tractor used in agriculture is almost entirely confined to large farms. During the Debate on the Budget Resolution I made an interruption which rather implied that there were no petrol engine tractors in use in this country at all, and that they nearly all used diesel or vaporising oil. The actual figures taken from the January, 1946, return of agricultural machinery show that there were 182,500 tractors burning vaporising oil, 16,500 burning petrol and 12,500 burning diesel oil. Those numbers have gone up in each case with the estimated number of tractors, now increased by 20,000. This does show that the overwhelming majority of tractors in this country burn vaporising oil. Therefore, if this tax is maintained, it hits at the smaller farmer every time and not at the bigger one. The small farmer is the man whom we want to encourage. He sets the standard, and it is on his standard very largely that the prices of food produced in this country are based.
    Incidentally, the fact that diesel oil and fuel oil are free of tax is of assistance to the man who owns a large house and can put in oil-powered central heating. At the same time, the tax is maintained on the man who wants to burn one small paraffin stove. Such a person often cannot obtain alternative services of electricity and gas, and, so far as I know, electricity and gas for the city dwellers are not taxed. I would ask the Chancellor to consider this. If, in 1933, agriculture in this country had been as highly mechanised as it is today, would this tax on the fuel used in agricultural tractors ever have been imposed? Our view is that no Chancellor would have dared to take that step. I urge the Chancellor to look at this matter very carefully and to give way on it. This is the first ball in the first over of what may be a very long match, and I hope he will play it very nicely, because my attitude towards some of the things he says in ensuing days will be governed very largely by his sympathetic approach to the difficulties of the agricultural industry. It
    886
    may seem a small point to him, but I can assure him that he would be giving very great encouragement to those concerned if he would give way on this matter.
    Mrs. Leah Manning: I rise to support this Amendment very briefly. I was not quite sure whether the Chancellor wanted to obtain income from this tax or to prevent the use of more oil than was necessary so that he could have more for conversion purposes. I am assuming that the latter is his real intention. Quite apart from the need of this oil in the agricultural industry, the needs of cottage homes and rural areas for oil represent an inflexible demand. It is not one that can change because the oil is made more expensive. Like another Amendment which appears later on the Order Paper with regard to gas and electric cookers, this concerns something which people must have. Whether we make it more expensive and so raise the cost of living and discriminate against people who live in villages and small cottages, or whether we just help them a little by removing this tax, they will still use the same amount of oil.
    If a cottage is not supplied with electricity or gas there is only one way in which it can be lighted, in which food can be cooked or in which the place can be warmed. In winter time it is also very often necessary in these cottages to put a small light in a bathroom or something of that kind in order to prevent burst mains. This oil is obviously necessary and, as I have said, it represents an absolutely inflexible demand. For that reason I hope that the Chancellor will soften his heart for once and give us what the Amendment asks.
    The chancellor of the Exchequer (Mr. Dalton): The first ball in this timeless test having been bowled, I am anxious not to disappoint the hon. Member for Weston-super-Mare (Mr. Orr-Ewing) or my hon. Friend the Member for Epping (Mrs. Manning) who is an old associate of mine in propaganda in rural as well as in urban areas. [HON. MEMBERS: "Old?"] The description "old associate" might be true of a very young person. We were boy and girl together. A very good case has been made for this Amendment and it was, of course, debated on an earlier occasion. I hope that I did not give the

    887
    impression, even then, that I was adopting an inflexible attitude. We are now at the beginning of the Committee stage in which a number of proposals will be made to me not to fortify but to attenuate the revenue, and if I accept this one, then, although I hope I shall obtain the goodwill of the hon. Gentleman—he half promised me that he would not give me any more trouble in those circumstances—at the same time, it does mean that to that extent I must be a little less eager to accept later proposals. This will cost £1,500,000 of revenue a year. At the same time, as I have said, the case for the proposal is undoubtedly strong.
    The agricultural countryside is in need of all the help we can give it. It has passed through floods and troubles on an exceptional and grievous scale, and it is the great dollar saver in these critical days through which we are now passing. Therefore, on behalf of His Majesty's Government and, I think, of all sections of the Committee this afternoon, I am anxious to do all I can within the bounds of the Finance Bill to help the agricultural and rural community in general. It is a fact that in regions which are remote from electricity and gas supplies kerosene is an indispensable element for lighting and cooking, and I should be very sorry to impose even this relatively small sum—relatively small in relation to the total, but relatively small is substantial to the poor man—or to do anything to resist the alleviation proposed in this Amendment. There are also considerations regarding agricultural tractors and so on, and I understand that such tractors make use of kerosene to a considerable extent.
    So, on the clear understanding that if I accept the Amendment I shall be less able to accept later Amendments involving further inroads on the revenue; and, on the part of the hon. Gentleman who moved the Amendment, that he will keep quiet later on; and further, that I shall retain the good will of the hon. Lady on all issues which may arise, I am glad to accept the Amendment, in principle. I shall have to ask the hon. Gentleman to be willing to withdraw it in this form because it will need a little readjustment. I give an undertaking to move on the Report stage an Amendment giving effect to this principle, to operate from 1st September.
    Captain Crookshank: Before my hon. Friend asks leave to-withdraw the Amendment, which I am sure he will do in view of the Chancellor's undertaking, I would like to say that we are all very grateful to him for the very wise attitude he has taken. As the tax stands, although the aggregate amount involved may not be very large compared with the total expenditure, and though the actual cost to any particular individual is not very great, the fact remains that, on the burning-oil side of this matter, this tax is a tax upon an amenity. We are all anxious to try to improve the amenities of the countryside. Lack of electricity and gas is a very serious lack of amenity, and it would be very unfortunate to tax those who are unable to get the amenities which we want to give to everybody. On the motive-oil side, it is the small farmer who will he most affected, because of the kind of tractors which they use. The continuation of this tax would have the unfortunate effect that the more the farmer uses his tractor in order to cultivate better his land and gel the maximum production, the more tax he will have to pay. Therefore this is a direct, though perhaps not a very great, tax upon production. I am sure that all of us who sit for agricultural areas or who are interested in the future of agriculture will be most grateful for the forthcoming attitude of the Chancellor of the Exchequer, for which my hon. Friends and I deeply thank him.
    Mr. Orr-Ewing: I also desire to express my gratitude to the Chancellor of the Exchequer for what he has done and for the encouraging way in which he has met the Committee. I would like to make only one personal proviso which is that I cannot promise to keep absolutely quiet. I have another matter in prospect, relating to dustbins. In view of the undertaking given by the Chancellor of the Exchequer, I beg to ask leave to withdraw the Amendment
    Amendment, by leave, withdrawn.
    Clause ordered to stand part of the Bill.
    Clause 2 ordered to stand part of the Bill.

    CLAUSE 3.—(Tobacco.)
    4.15 p.m.
    Mr. David Eccles: I beg to move in page 3, to leave out lines 9 to 12.

    889
    The Clause to which this Amendment is moved increases the tobacco duties by 50 per cent. As the Clause is drafted, the increase is laid upon foreign tobacco, and upon any tobacco we may grow in the Empire or in the United Kingdom, at the same rate of increase. My hon. Friends and I wish to give the Chancellor an opportunity to tell us exactly why he will not give to Empire tobacco a margin of preference that would be sure to stimulate a big increase in supply. The effect of the Amendment would be to leave the preferential rate of duty—the Imperial rate of duty—where it was before the Budget and would give a large preference of something like 19s. per lb. of tobacco.
    The background of our argument is not in dispute. We all agree that the problem of finding dollars blots out all other problems. That was the Chancellor's own phrase at Margate. No one would deny that the purchase of American tobacco is a large item in our account to the United States, or that if we could increase the supply of sterling area tobacco we could correspondingly reduce our demand for American tobacco. I think no one will deny that the preference rate established by the Bill of is. 6½d. per lb.—the difference between 54s. 10d. on foreign tobacco and 53s. 3½d. on Empire tobacco—is a very small encouragement to the extension of tobacco growing in the Empire. This margin of 1s. 6½d. comes to us from happier days when the preferential duty was an ad valorem duty of 25 per cent. and when the rate of duty on foreign tobacco was under 10s. per lb. I do not doubt that in those prewar days, when costs of production were much lower than they now are, a preference of 1s. 6½d. per lb. was of real assistance. We have to ask ourselves whether that preference is of real assistance in a postwar condition.
    I am sure the Chancellor will tell us that he cannot accept the Amendment because His Majesty's Government are bound by the terms of the Anglo-American Trade Agreement of 1938 and by various other agreements as well, and that we have ourselves said under that agreement that we would not increase the preferential margin from 1s.6½d. Our financial and economic situation in 1947 is not the same as it was in 1938. Now, our basic standard of life is in danger and we are fighting for our meagre rations with ammunition that is rapidly
    890
    running out. The dollar loans are soon to be exhausted. They were given us expressly for the purpose of providing a breathing space during which we could readjust our economy from the status of debtor to that of creditor and from all the dislocations of the war. Is there any chance that we can make that readjustment in postwar British trade if the substitution of sterling imports for dollar imports is ruled out? The Government know very well that this would make it impossible, if that were so, for us to balance our account. Why are the Government financing a large expansion of groundnuts in East Africa if it is not to increase the supply of edible fats from the sterling area? That must mean that we shall import less fats from North America.
    If the Government can put a scheme of that kind for edible fats into operation by subsidies, why cannot they operate a similar scheme by a method of preference or by some other method, for tobacco? The Americans are not so simple as to think there is any real difference between supplanting imports of fats which we previously got from them by imports from Africa under the scheme that we know of, and a scheme for encouraging future expansion of tobacco by Imperial preference. The agreement of 1938 stands in the way. It may be denounced at six months' notice. I assume that it could be modified in any way, if the parties to it were willing to make such a modification. Why do not His Majesty's Government lay a case in Washington for a modification of this agreement with regard to our supplies of tobacco? The Americans are business men. They know quite well that they have no chance of being repaid all the dollars we have borrowed unless we bring our exports and imports into balance. As lenders, they must want us to take the practical steps which would achieve this equilibrium. I am quite certain that if the Americans were in the position of His Majesty's Government they would not hesitate to act on the lines of our Amendment.
    Take the case of wool. The Americans have the equivalent of an empire. They have a union of 49 States that stretches from one ocean to another. When they desire to reduce the imports of wool coming from the sterling area into that union and to assure to the producers of wool inside the United States a greater

    891
    proportion of the home market, do they hesitate to use the tariff weapon? Not at all. They bring a Bill into Congress which will put up the duty on wool. If they were in our position they would do the same thing now with tobacco. The fact is that our good friends in America are good business men, and His Majesty's Government would be more respected in Washington if they would talk like good business men as well.
    I hope that the Chancellor or the Financial Secretary when replying will not again bring forward an argument we heard upon the Report stage of the Budget Resolution to the effect that, because we are now buying all the tobacco which the Empire produces, there is no point in raising the preference. That is merely a cowardly get-out from the rather difficult proposal of going to Washington and laying a case for a revision. The Chancellor was once a professional economist. He must have had, at any rate, a textbook acquaintance with the laws of supply and demand. There is no doubt at all in the matter of agricultural crops that, if it is desired to stimulate a further supply, one sure way is to guarantee the market for a considerable period ahead and give a good price. Plantations take a long time and much money to grow to fruition, and if we mean to expand the supply of Empire tobacco in the national interest it is not too soon to begin now.
    The purpose of my Amendment is to ask the Chancellor whether he means to use the Budget a; a constructive instrument for changing the pattern of British imports and exports. It is one of the few instruments open to the Government. As far as one can see, their only remedy when they find that it is not possible for us to behave in the way we did before the war, when we bought whatever we liked in the United States, is to tell us to tighten our belts and consume less. There is a more attractive alternative. That is to make arrangements for supplies from other sources. The purpose of this Amendment is to draw the Government on this subject. Have they or have they not any longterm plans for tobacco?
    The Chancellor could quite rightly argue that it would be wrong to stimulate the expansion of tobacco growing in the British Empire if the shortage was a purely temporary phenomenon. But
    892
    that is not so. There are two shortages. There is the shortage of dollars. Does anybody think we are going to have as many dollars as we want in the next 10 or 15 years? The second shortage is that occasioned by the desire of the British people to smoke like chimneys. Is that likely to disappear? The answer is, clearly not. This problem of supplying tobacco to this island, which on the best showing can only grow a very small proportion of its tobacco itself, is a longterm one. I know that the Chancellor cannot accept this Amendment, but I hope he will tell us exactly what he proposes to do. I hope he will tell us in terms which will lead the public clearly to understand that he does not intend simply to sit still because he is bound by all these different agreements made with America a long time ago.
    Mr. Dalton: As the hon. Member for Chippenham (Mr. Eccles) has forecast, I cannot accept this Amendment, but I will seek to respond to his invitation to say something on the Government's attitude towards the question of tobacco supplies. It is worthwhile to re-assert—I do not think it is useless to re-assert it because it is important that it should be known—that, as was said in the Debate on the Budget Resolution, we are now buying up all the Empire tobacco which is in the market. I must add that some of it is rather highly priced. I do not quite know why the price has risen so steeply on some of these Empire tobaccos in the last month or two. We must reserve our right if prices rise unconscionably, to cease our present practice of buying all that is available. The smokers of this country must not be exploited, even by parts of the British Commonwealth. None the less, up to date the undertaking remains that we will purchase whatever is available from the Empire supplies.
    By what undertakings are we bound in this matter? The original preference for Empire tobacco was introduced in 1919. I will not go over the intermediate years. In 1938 there was a trade agreement with the United States of America providing that this preference would be reduced from 2s. o½d. a lb at which the preference then stood, to 1s. 6½d. a lb., that is to say, by 6d. a lb. That was entered into in 1938 when the right hon. Member for West Bristol (Mr. Stanley) was the President of the Board of Trade and was therefore, departmentally responsible for it. I make

    893
    no criticism of what was done in those conditions. I merely emphasise that it was done as long ago as 1938 and that the right hon. Gentleman was responsible and can throw on this any further light which it might he useful to throw
    That undertaking given in 1938 to the United States Government could not, in fact, be brought into effect until 1943. It was given effect to in the Finance Act, 1943, when the right hon. Member for the Scottish Universities (Sir J. Anderson) was Chancellor and when I was President of the Board of Trade. It was provided in that Finance Act that the preference should be reduced to 1s. 6½d. a lb., at which it now stands. I find difficulty at this moment in altering that figure having regard, in the first place, to the undertaking given in 1938, and. in the second place, to the fact that there are now proceeding at Geneva discussions which, although their course may till now not have been wholly smooth, we are none the less obliged to try to bring to a successful conclusion. Only time will determine whether anything will come out of these discussions at Geneva, but we are immersed in them. The Government are committed to do their best with them, and this would not be an appropriate moment at which suddenly to go into reverse on this matter.
    4.30 p.m.
    Therefore, apart from the undertaking of 1938, in the light of the discussions now proceeding, we must let these go a little further before we could accept the Amendment or do anything else which might seem to throw doubt on our hopes that, as a result of the discussions at Geneva it may be possible to break down a number of the barriers which have been erected against British exports in a number of markets, not only in the United States, but throughout the world. So I say that this is not an opportune moment to vary the preference, particularly as I have repeated the undertaking that we will buy any Empire tobacco available in the market at the current prices, though we hope these will not rise any further.
    This Amendment also covers the case of home-grown tobacco—[An HON. MEMBER: "That will be moved separately."] In that case I will reserve what I have to say on home-grown tobacco. As far as Empire tobacco is concerned, I hope this Amendment will not be insisted on.
    894
    I do not of course rule out; on a long view, some change in the preferential arrangements, but I say that this is not an appropriate moment, for the reasons I have given, to press the matter.
    Mr. Oliver Stanley: I am sure my hon. Friend is not surprised that the Chancellor of the Exchequer is not able to accept his Amendment, but I think he has done the Committee a service in giving us an opportunity of discussing, even shortly, a most important point. As the Chancellor has said, I was President of the Board of Trade at the time the Anglo-American Trade Treaty was signed, and as such, of course, I still have a great interest in what was my child. If the previous negotiations were long and difficult—if I remember aright, they lasted even longer than the regulation nine months—when they came to an end I thought they produced a very good baby. But babies, however attractive at birth, tend as the years go by to grow out of their clothes, and that is what has happened to the baby of 1938, because many of the provisions which were entered into then, and which could be defended with perfectly obvious arguments, and which were entered into for perfectly obvious advantages, have now become, under the new world conditions, completely out of date. I remember, with regard to the reduction in preference that at that time, after a considerable number of years during which the tobacco manufacturers in this country had encountered a considerable sales resistance amongst smokers here to Empire tobacco, that had been largely overcome, and it was felt that it was quite safe to reduce the preference by that amount without prejudicing the possibility of the sale of Empire tobacco. But, of course, no one at that time could have anticipated, and certainly did not anticipate, the enormous figure to which the duty on tobacco has now had to be raised, and the trifling percentage, therefore, that the fixed preference now represents in the total price.
    Having said that as a defence—if defence were needed—of the provisions made in 1938 under wholly different circumstances, I want to say a word about the future. I understand the right hon. Gentleman feeling a certain reluctance in discussing at this moment the possibility of alteration—which, I imagine, could

    895
    only be made following a denunciation—in the agreement with America, although it is pertinent to ask whether it is not possible for us to do a little something in tobacco when it appears that the United States are doing a very great deal in wool. We on this side are prepared to accept that for the time being, but it raises this important question: in view of that problem which, as my hon. Friend says, quite rightly is clearly a long-term problem, and the difficulty of buying as much American tobacco as is necessary to satisfy the needs of smokers in this country, what long-term steps are we taking to increase the supply from the Colonies? I have recollections that at the time I was at the Colonial Office certain investigations were made into the possibility of increasing largely the growing of tobacco, particularly in Northern Rhodesia and Nyasaland. I admit that those who were considering the problem at that time had not fully foreseen the gravity of the problem of the American exchange, and, in those circumstances, the report which I received as to the possibility of a long-term expansion of tobacco growing in those areas was not very encouraging. That seems to me now to be completely altered.
    There seems a case for the same kind of action in those territories with regard to tobacco that has been taken—and all of us hope taken with success—in East Africa with regard to groundnuts. If it is not possible for the Chancellor to say anything more at the moment about this method of preference as a means of increasing tobacco growing within the Empire, we should like an assurance from him that the possibility of a really large-scale increase with the same kind of Government assistance that has been given to the groundnuts scheme, is being considered, and that there is nothing in any agreement which would stand in the way of a development of that kind if it were found, for other reasons, to be practicable and economically desirable. It seems to me that it is only on those lines that we can hope to find some relief for the smoker in this country, and those who, like myself, have listened to the Chancellor's appeal, may find a release from the sacrifices which he has imposed upon us.
    Mr. W. J. Brown: It is a little unfortunate from one point of view that we are to deal with these two Amendments separately. One Amendment re-
    896
    lates to Empire tobacco, another one relates to home tobacco, and the Chancellor must give a great deal of attention to American tobacco. These three really form part of a total picture which it might have been desirable to discuss as a whole, and it is difficult to do that when we are taking the two Amendments separately. So I may find some difficulty in keeping in Order, though I will do my best.
    I think the Chancellor makes an unanswerable case that he cannot accept this Amendment at the present time. In view of what is happening at Geneva, I do not think it would have been possible for him to give any other reply, but I beg him to look at this from the point of view of the ordinary man in the street who, believe me, is much concerned with this problem of adequate supplies of tobacco at a reasonable price. We have now reached the stage in country districts where the poor farm labourer has to go in and order a pint of beer and one cigarette. He does not like that, and the rest of us do not like that, but what burdens his mind is that he sees no end, at least no early end, to that situation. The hon. Member for Chippenham (Mr. Eccles) is quite right in saying that the popular apprehension is that many years will elapse before oar dollar situation will be such that we car buy American tobacco with the same careless freedom that we could have done 10 or 15 years ago. But while the man in the street recognises that to be true, believe me he is not content that he should go on paying 3s. 4d. for 20 Players for the next 10 or 15 years.
    This is a political factor of substantial importance. It really is a considerable element in the public mind. What I would wish to have, if possible, is a statement from the Chancellor indicating what his conspectus is for the years to come. What is his broad conspectus either by the development of Imperial tobacco or of home grown tobacco, or the making of more dollars available for the purchase of American tobacco—
    The Temporary Chairman (Mr. Bowles): The hon. Member ought to make his speech on the Motion, "That the Clause stand part of the Bill." He must not go into the question of American grown tobacco now.
    Mr. Brown: That is part of our difficulty. We want a long-term conspectus. If it is impossible for the Chancellor to

    897
    give it to us now, perhaps he can arrange to do so when we come to the Motion, "That the Clause stand part of the Bill."
    Mr. Marlowe: I found the answer of the Chancellor rather unsatisfactory because he did not really give us any picture of what he envisaged for the future. He dealt only with the present difficulties in regard to a preference on Empire tobacco. He did not give us any idea of the way his mind is moving in the matter. He may be bound by certain immediate difficulties concerned with Geneva, but the Committee is entitled to know what is in the Chancellor's mind for the future. His answer really boils down to two points. He said, first, that we were taking all the available Empire tobacco, in spite of the fact that my hon. Friend the Member for Chippenham (Mr. Eccles) had forestalled that answer and had invited the Chancellor to resist the temptation of making it again, as he has done before, because it is a bad point. It is really deliberately evading the point at issue. It is perfectly true that we are taking all the available supplies, but that is not the point. The point is that as soon as a wide margin of preference is given it increases the supplies available. That is the point with which the Chancellor did not deal.
    I understand that it is stated in a reliable paper dealing with East Africa and Rhodesia:
    "What we should like to see would be a really substantial preference on Empire tobacco. … Southern Rhodesia, which now supplies this country with one-twentieth of her annual consumption, could double her output in three or four years, and treble it in ten or less, without lowering the quality, if she were granted guaranteed markets and her reasonable requirements in fertilisers and a few other lines."
    The preference for which this Amendment asks would give a guaranteed market, and according to that authority, would vastly increase output and make a great deal more available in future. To say that we are taking all that is available at the moment, is not an answer to the principle underlying the Amendment.
    The right hon. Gentleman's other defence against the Amendment was to say, "I am bound by agreements made with America." That again is not really a satisfactory answer, because while it is profoundly true that these agreements are
    898
    in existence, the Chancellor is not prevented from approaching the Americans again at any time and saying, "We made this bargain in 1938, but it is quite inappropriate to the present circumstances, and we want it amended." Merely to say, "I am bound by an agreement," when it is open to him to amend that agreement, is not a satisfactory answer. I would like to know if the Chancellor intends to approach the Americans about it and to say, "We are put in this most unfortunate position because of a change of circumstances since 1938, and we want this 1938 agreement altered." The amount of the Preference was, I think, 2s. 0½d. and was then reduced to 1s. 6½d. in 1943, since when the amount has remained static while the price has increased. The fact that the figure remains static is continually reducing the percentage, with the result that, as my hon. Friend the Member for Chippenham said, what was a 25 per cent. duty in origin is now in the region of about 3 per cent., so that the reduction over a period of years has been from 25 per cent. to 3 per cent. What does the right hon. Gentleman envisage in the future?
    4.45 p.m.
    It is for these reasons that I found his answer unsatisfactory. I believe that wt shall do both ourselves and the Empire the most good possible by creating as much trade as we can. I do not see that the Chancellor is entirely powerless because conversations are now going on at Geneva. That does not prevent the Americans from taking a tough line in Congress. They do not say, "We cannot introduce a wool tariff because conversations are going on in Geneva." I hope that the Chancellor will think himself entitled to take as tough a line, and not feel himself precluded from putting forward proposals merely because of what America might think.
    Colonel Ponsonby: I am glad that Empire preference is agreed to on both sides of the Committee. I happen to be Chairman of the Empire Tobacco Producers' Federation, and I know a little about this subject. I only rise to emphasise what has been said about the necessity for a long-term policy. Hon. Members will be aware that under the Ottawa Agreement a period of 10 years was given during which the preference was to run. That gave great encouragement to tobacco

    899
    growers, because tobacco growers are to a great extent different from other growers. I am not at all certain that one could compare the groundnuts proposition with an enormous scheme for tobacco growing. Tobacco growers have to plan a long time ahead and to spend considerable capital. In 1938 the amount required in Rhodesia for buildings, that is tobacco barns, grading sheds, etc., quite apart from the value of the land, was approximately £2,000 for a small tobacco plantation. Not only that, but a great deal of skill is necessary for the growing of tobacco. I would impress on the Chancellor, and it applies also to the President of the Board of Trade, that it is essential, when they have made their plans, and when the Geneva conversations are out of the way, that if they are to ask the Empire to produce a considerable amount of tobacco, they should give a good long guarantee; the producers concerned will then be able to settle down and work their schemes out properly. A long-term policy is very necessary, and I beg the Chancellor to look well into the future when he makes his plans.
    Mr. Richard Adams: This might be a convenient moment for me to raise with the Chancellor a point which I raised on the Budget Resolutions, namely, the advisability of a Purchase Tax on tobacco to meet this and other objections. It will be apparent that the Chancellor is in some difficulty in view of the 1938 agreement and the discussions now going on at Geneva. It seems to me that the imposition of a Purchase Tax could, in the short term, have the same effect as what is suggested from the other side of the Committee.
    Mr. W. J. Brown: On a point of Order, Mr. Bowles. Is it in Order for us to discuss a Purchase Tax whatever its merits, on this Amendment?
    The Temporary Chairman: I was listening to the hon. Member and I thought he was going too far. I had intended to stop him in a few seconds' time.
    Mr. Adams: The same effect as that suggested in the Amendment would be gained, and preference would be given to Empire tobacco, by the introduction of an adjusted Purchase Tax.
    The, Temporary Chairman: I am afraid the hon. Gentleman is not in Order.
    Squadron-Leader Donner: Like other hon. Members, I thought the Chancellor's answer to my hon. Friend the Member for Chippenham (Mr. Eccles) was very disappointing. It is always possible to make out a case for doing nothing. That is the type of case which the Chancellor made out. He went out of his way to mention the difficulty of Geneva. Surely, what are taking place at Geneva are discussions to remove what are known as trade restrictions. If the Chancellor thought it worth while to reduce the duty on Empire tobacco, or to abolish it, he would not be doing anything that would go against the trend of the Geneva discussions. Of course, it could be argued that by doing that he would be increasing Imperial Preference. That would be true but at the same time he would be reducing, or abolishing, an existing duty. Hon. Members on this side have pleaded for the longterm stimulation of tobacco growing. If the Chancellor is not yet willing to give an undertaking that he is prepared to treat tobacco as the Government are prepared to treat the problem of groundnuts, there would seem to be little reason why he should not turn his mind to the subject of reducing, or abolishing, the duty on Empire tobacco. There is little reason why tentative feelers should not be put out in Washington in order to reach a business arrangement.
    Sir Stanley Reed: I wish to make two brief points which seem to me to be rather important. We all agreed with the hon. Member for Chippenham. (Mr. Eccles) when he asked the Chancellor to frame a long-term policy. If that long-term policy is to be directed to a large expansion of tobacco growing in the Empire, on the assumption that this country will continue to smoke tobacco at the present rate, I think it needs very careful consideration. It is my firm conviction that if the increase in duty which the Chancellor has imposed does not lead to a reduction in the consumption of tobacco, some other measure must be adopted for some years in order to reduce consumption.
    The other point is that we all realise the seriousness of the dollar position. We often find it assumed that we have unlimited sterling resources. The Chan-

    901
    cellor is under no illusions on that subject. We have only to look at what has taken place in the attitude of two of the countries to whom we have very heavy sterling obligations, to realise that we shall have to watch with jealous care how we draw on our sterling resources as well as how we draw on our dollar resources. This is one of my greatest fianancial anxieties. I know from experience the nature of these difficulties. I endorse fully the request for a long-term policy. I conclude with this little caveat, that the Chancellor should be chary of embarking upon a long-term policy leading to a large increase in tobacco production in the Empire and in the sterling area, on the assumption that there will be an easy market for the whole of the increased production.
    Mr. Eccles: I hope that the discussion has been useful and that it has brought the attention of the Committee to the need for a long-term policy. In view of what the Chancellor has said about the negotiations in Geneva and his anxiety that the Government should not be embarrassed, though I assure him that if the negotiations fail we shall come back to this point, I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Mr. Eccles: I beg to move, in page 3, line 13, to leave out Subsection (2).
    The effect of this Amendment would be to omit from the increase in duty tobacco grown in the United Kingdom. When I made some remarks on this point during the Debate on the Report stage of the Budget Resolutions, the Solicitor-General did not seem to think it was possible to have any cultivation of tobacco on a successful scale in this country. At that time hon. Members were not very well informed on the matter, but subsequently there has been correspondence in "The Times" which has shown that there are plenty of enterprising cultivators in this country who would like to make a start. If accepted, the Amendment would give a preferential rate over imported foreign tobacco of 19s. a lb. It may be that hon. Members do not know that the average cost of producing one lb. of tobacco in the United States is something round 2s. 6d., or even a little less. Therefore, if anything like a margin of 19s. a lb. were to be given, I submit that the culti-
    902
    vation of tobacco would be taken up in this country. I do not know whether it could be done on a large scale, but the point is that we are in very grave danger of not getting enough tobacco from all sources.
    The time has come to use the Budget as an instrument for replanning our imports and exports. One of the ways in which that can be done is to give financial inducement to people to cultivate in this island various products which we have been accustomed to get from abroad for many years. I should like to see a Government experiment in growing tobacco in this country. When the last experiment took place, the price of tobacco was something under 1s. a lb. It is a very different story now. I think that it is worth reopening the whole idea of cultivating tobacco here. It is for that reason that I move this Amendment. I would like to know whether the Chancellor has looked up the matter and is a little better informed than the Solicitor-General was when he spoke some weeks ago.
    5.0 p.m.
    Mr. Dalton: I have made every effort to bring myself up to date on this matter, but I maintain the view—I forget whether it was I who said it or whether it was my right hon. Friend the Financial Secretary—that it would be at this time a waste of valuable British land, labour and materials to attempt to grow tobacco on any scale in this country. No additional incentive should be given to such a waste of our natural resources. The facts are that there has been correspondence in the Press, particularly in "The Times," about a certain farm at Church Crook-ham, in Hampshire, on which, from time to time, small quantities of tobacco—and I do not speak of its quality—have been grown. This is the only agricultural estate on which there is any evidence that any farmer has been, shall I say, hardy enough to seek to grow this most unnatural crop. This is not the climate for growing tobacco.
    I have here full details—I will not weary the Committee with them all—of the total amount of home-grown tobacco, the Excise Duty paid upon it, and the area devoted to it over a period of years right up to date. The total of home grown tobacco is trivial and the quality has been poor. Apart from the Church

    903
    Crookham experiment, which has always been on a small and diminishing scale, there are particulars of only very few licences—of course, there must be a licence under the existing law—for tobacco growing in the past 10 years, and if I may very briefly summarise them, the figures are as follow. In 1937, apart from Church Crookham, one-quarter of an acre was planted and 276 lbs. of tobacco were produced, mostly found unfit for cure. In 1940 a quarter of a perch was covered and the crop was destroyed. In 1941 there were three small patches of land devoted to this crop. On the first the crop was destroyed, on the second the experiment was abandoned, and on the third the crop failed. So we go on until 1944, when a quarter of an acre was licensed for growing tobacco and all the plants died, so that there was no crop. In 1946, one perch was licensed, on which two lbs. of tobacco were grown.
    This is really a piece of nonsense. The United Kingdom is not a place in which to try to grow tobacco, and I am quite sure that whatever our palates may be—and tastes vary in these matters—there is no future for tobacco growing in the United Kingdom. Our land is too valuable and should be used for other purposes, and I should be the last to wish to humbug any farmer in this country into believing that he was doing other, than an act of folly in seeking to grow tobacco in this land. For these reasons, I must oppose the Amendment.
    Mr. Eccles: In view of the dismal story with which the Chancellor has entertained the Committee, 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."
    Mr. Kirkwood: I rise to speak on this Motion in order to give the Chancellor an opportunity to make a statement on the Amendment in the names of the hon. Member for West Fife (Mr. Gallacher) and myself which was not called. This Amendment was to insert the words:
    "except in the case of old age pensioners, cripples and long-term hospital cases for whom the duties of excise at the full rates specified in the First Schedule to this Act shall not apply,"
    904
    I have written to the Chancellor on this question, and others of my colleagues have also written, and there is considerable feeling in every part of the House, and all over the country, in favour of freeing the old age pensioners and the individuals we mention here from the tax. On the Chancellor's own estimate—he said this in my hearing in the House—the pound today is only worth 12s. 9d. Now it is well down to 9s. 6d. When it is remembered that old age pensioners are in receipt of only 26s. a week, it means that 3s. 6d. is deducted from that sum to enable them to have a smoke. The old age pensioners, and the cripples who are in the hospitals, have no great, powerful organisations to defend them and put up a case. If any one of us has any outstanding ability, either mental or physical, it was not given to us for our own aggrandisement; it was given to us in order that we might defend those who are not able to defend themselves. That is the situation here, and I am sure that I am within my rights in asking the Chancellor, therefore, to make the fullest possible concession to this highly-deserving section of the population.
    Lieut.-Commander Gurney Braithwaite: I would like to associate myself with the observations of the hon. Member for Dumbarton Burghs (Mr. Kirkwood). This is a suitable opportunity for the right hon. Gentleman to bring us up to date in regard to his intentions in this matter. Earlier in our proceedings today, the Chancellor was unkind enough to describe some observations of mine as "flat-footed"; I am not sure whether that was intended as a term of abuse or as a tribute to a steadfast attitude. Be that as it may, I think the Committee would be disappointed if, at this stage, we were to leave this Clause without the right hon. Gentleman declaring his intentions to us. The hon. Member for Dumbarton Burghs delivered himself of what I thought was an optimistic remark about the purchasing value of the pound; I should put it a good deal lower; and when the hon. Gentleman brings himself up to date, we shall doubtless see him appearing on the platform of the British Housewives' League in protest against the collapse in our standard of living—a collapse which the Attorney-General tells us does not exist. I am very pleased to enlist such a valuable recruit to this point of view.

    905
    This question underlines and emphasises one feature of the tobacco tax, and I submit, with great respect to the right hon. Gentleman, that where it is necessary to contract a particular section of the community out of the operation of a tax, that in itself is evidence of a clumsy tax; it means that a tax has been imposed which will not run smoothly over the whole field. Where special arrangements have to be made to raise the standard of living against particular tax, the chief object of that tax is, of course, being defeated. I hope the right hon. Gentleman may be able to deal with the old age pensioners and those who are in hospital—disabled ex-Servicemen particularly—who are likely to remain there for a considerable period of time, on somewhat the same lines as were followed in regard to the Forces during hostilities, and indeed, if I may go a little further, the Navy—which for some time has enjoyed tobacco duty free.
    I mention that because the argument may be adduced—it is the sort of argument the Treasury would adduce—that if a special ration is given at, let us say, the pre-Budget price, or indeed a duty-free ration, there is the danger of creating some form of black market, in that the nonsmoker will receive an allocation and may seek to dispose of it in some way which would evade the main purpose, which is to benefit the old age pensioner. I think the right hon. Gentleman will agree that, broadly speaking, these concessions worked quite well during the war. The special issue of cigarettes to the Forces at pre-1941 Budget prices, which ran until the other day, was a success. I am not saying it was not abused in individual cases; it would be remarkable if it had not been; but by and large the boys played fair, and I think the old age pensioners would do the same thing.
    The right hon. Gentleman may get up and say, as I think the hon. Lady the Member for Epping (Mrs. Manning) or somebody else said earlier on, that a number of these old ladies never smoked and never will, and giving them cigarettes would open the door to some kind of abuse. Let us take the risk of that; the benefit to the whole body would be very great. I hope the right hon. Gentleman will say that he has something of this kind in mind. It maybe too early for the machinery to have been perfected; it will I know be difficult to work out the administrative machinery, and to open the
    906
    door wider, and include the wounded and war casualties in hospitals, would incur further administrative difficulties. We are, however, anxious to see that justice is done, and I hope the Chancellor will make a statement at this stage.
    Mr. Tom Brown: I rise to support the plea that the Chancellor should do something for the old people in particular. I think it is true to say that, since the presentation of the Budget, public opinion has been roused, as it often is roused when there is a hardship inflicted upon a certain section of the community. The old people have had some concessions given to them by the present Government, but those concessions are going to be more than swallowed up by the increased price which they have to pay for their tobacco. In addition to that—and I am now pleading for the Chancellor to take the widest possible view on this point—they have to meet the increased cost of living which has gone up tremendously, in particular, in regard to four or five commodities which they are compelled to purchase in order to maintain themselves in some degree of comfort. Fuel and light have gone up by 55 per cent., clothing has gone up by 64 per cent., and food 22 per cent over 1939 prices; and one could go on to give a number of commodities which are necessary in order to make life comfortable to some degree.
    I would remind the Chancellor that, in 1939, the price of tobacco to the old age pensioner was a modest 1s. per ounce. Today, even the commonest type of tobacco, at the present price and without any concession, will cost 3s. 8d. to 3s. 9½d. per ounce. I think the Chancellor ought to have regard to the great hardship that will be experienced by the old people. I am not afraid, that, if a concession is made, and it is administratively possible to make it, any of the old people of this country will abuse it. I have sufficient faith and confidence in the old people to think that, if they are given a concession by the Chancellor to help them to enjoy the eventide of their lives they will not abuse it.
    The next point I want to make, and it is indicated in the Amendment which has not been called, is in regard to crippled people I have in my constituency, and I represent a mining Division, a number of very seriously injured miners. I have

    907
    in mind now one man who has been on his back for eight and a half years, and who enjoys his pipe of tobacco, which is the only solace and consolation he is given in his days of suffering. I know many others who are experiencing the same affliction. The most remarkable thing about these men, whom I have visited personally, is that not one of them has complained about the Budget in general, but a few have complained about the heavy taxation upon tobacco. I plead with the Chancellor, who gave us a promise in the Debate on the Budget that he would ask his Department seriously to consider the matter, to make a statement, which I hope will include some concession to the old age pensioners and the crippled people.
    Mr. Dalton: Perhaps it would be for the convenience of the Committee, and might short-circuit some Debate, if I made a statement on this matter at this stage. I have been asked to explain two quite separate matters. The first concerns what I will call the long-term programme of the use of our Commonwealth resources for the production of tobacco. We have given an example of our desire that the undeveloped resources of the Commonwealth should be developed further than they have been hitherto, by the groundnuts scheme, and this is only the first shot in the campaign for the more intensive development of the resources of the Colonial territories in order to raise the standard of living of the people in them, and, at the same time, to increase supplies of necessary goods for ourselves. In that scheme, tobacco would have a place, but not too emphatic a place, as compared with more genuine needs.
    5.15 p.m.
    "Food before fags" must still be one of the mottos of our economic development, and, although we would not exclude the possibility of further plans by which we would get additional tobacco supplies from various parts of the Empire, I am more interested in getting something with which to feed the poultry in this country, and in getting more eggs and bacon. We must have priorities in this matter. Subject to that, we are going ahead, and, in due course, from time to time, proposals will be put before the House of Commons by the Government for stimulating the production of all
    908
    necessities in our Colonial territories. Within that limitation, tobacco has its place, but not a very prominent place. Southern Rhodesia can grow tobacco and maize, but I would sooner see it grow more maize than more tobacco. I hope that will be regarded as a perfectly frank statement of our views towards the development of the Colonial Empire.
    With regard to the question of the old age pensioners in particular, I have given constant thought to this matter since the Budget was first presented and debated, and I have been very much helped by the Minister of National Insurance, who is the authority on the administration of pensions, and the Postmaster-General, who also comes into the matter, because the Post Office is bound to be involved. Let no one think that it is easy It is quite easy to say that the administrative difficulties can be brushed away, but, of course, that is not so. Nor is it desirable merely to multiply the staffs in Government Departments. We do not want one half of the community to become engaged in administering the affairs of the other half. We want them to get on with production. I ask the Committee to believe that, when we have been devoting our attention, with our advisers, to considering what we can do in this matter, it has not been at all an easy problem. Nor must it be regarded as a precedent. Nothing done in this regard must be regarded as in any way setting a precedent. The general rule must be that the taxes shall fall on all who are subject to them, and that indirect taxes shall fall upon those who continue to buy the products concerned; and we cannot have, as a general rule, groups of persons segregated from others in regard to the incidence of indirect taxes. With regard to direct taxes, that is another matter, and we have Income Tax levelled on certain income levels and various adjustments to meet certain circumstances
    I want to give a warning. I must not be led, from what I say about tobacco for old people, into a general creation of chaos in the whole field of indirect taxation. This is a very exceptional and quite special case. I repeat that I am confident that this tobacco tax is right, and I hope that, if there is a challenge on it now, it will be defeated by an overwhelming majority. I have been astonished to see how the majority of the people have

    909
    taken it. Most people have clearly understood that we are experiencing a shortage of dollars, and that food matters more than "smokes." That has been accepted as a commonsense judgment in a difficult time. People have responded in terms of their consumption. I would like to take this opportunity of informing the Committee that, whereas I made an appeal for a 25 per cent. cut in the total consumption of tobacco in the country, so far, the people have done better than that, and have cut it to below 75 per cent. of the pre-Budget figure. In the first few weeks there was a sudden drop. People may have stocked up beforehand on the strength of rumours which may have preceded the Budget statement. Immediately after the statement, sales fell to barely 50 per cent. of what they had been in the preceding weeks. Nearly two months have passed since the Budget, and during that period there has been a slight upward movement, although we are still below 75 per cent.
    Mr. Stanley: How much below?
    Mr. Dalton: We are now, perhaps, running at some 70 per cent., but it varies from one part of the country to another. I repeat on this occasion my appeal to all patriotic men and women to continue to control their lust in this respect, and to continue to check their inclination to smoke. So far, we have done pretty well.
    I was praised by the "Daily Express" this morning. It said that I had done my duty with regard to this tax. I thank Lord Beaverbrook; I greet him over a long distance. I know not where he may be. My hon. Friend the Member for Ince (Mr. T. Brown) and other hon. Members have appealed to me to state what can be done primarily with regard to the old age pensioners. I have considered this matter with my colleagues, and I can only inform the Committee that, on the Report stage, I will put down a new Clause dealing with it. There is no advantage in putting it down before that stage because it will have to be discussed and go through the ordinary procedure of the House, but, if the House approves, it shall form part of this Finance Bill. Broadly speaking, there shall be a new Clause which shall give power to make regulations to exempt old age pensioners from the payment of the increased duty in respect of certain
    910
    quantities consumed. There will be the danger, of course, that the thing will be misused, and we must try, as far as possible, to prevent that. It is not only a question of whether the old people would misuse it—indeed, we hope that in the vast majority of cases there would be no such danger—but there is some danger that younger people might try to exploit the old people, and we must take what precautions we can against that.
    I want to be excused at this stage from going into more detail, because we shall have an opportunity of debating the Clause later on. I will say no more now than that I propose to ask the Committee to give me power to make regulations to enable this thing to be done. It will apply primarily to old age pensioners, but, of course, when a concession is given in respect of one section of the community, pressure is at once exerted to have it extended to others. I can give no undertaking at all, except in regard to old age pensioners, because there would be much difficulty in extending it beyond them, much as we might sympathise with the claims of other sections. If the thing is to be held within the bounds of administrative efficiency, we must draw a very definite line. I choose my words with care when I say that, at this stage, I do not commit myself to extend this concession beyond the old age pensioners, but, when the Clause is on the Order Paper, we shall have an opportunity of considering whether any further extension is, on balance, desirable.
    It would give me great satisfaction if I could devise a scheme which would be fair in its application would give this benefit to the old people, and would yet not be subject to abuse in its practical application. I assure the Committee that I have considered the matter with considerable intensity. Quite properly, my officials have brought to my notice the various difficulties which will have to be overcome. There is an old rule which Ministers do well to bear in mind, that it is the duty of their officials to present all the difficulties to them, and, then, if the Minister still wants to do the thing, he should say to them, "You have most clearly explained what the difficulties are; will you now apply your experience and intelligence to the making of proposals to overcome the difficulties which you have so clearly put forward." That is what

    911
    my hon. Friends and I have done in this instance, and I hope the outcome will not be unsatisfactory.
    Air-Commodore Harvey: As one who gave up smoking on Budget day, I welcome the Chancellor's statement about what he is going to do for the old age pensioners. While I can foresee his difficulties in dealing with other claims which are, perhaps, equally good, or even better, I ask him to bear in mind the case of the Service or ex-Service men who have been severely wounded in the war, such as those who were badly burned while serving in the Royal Air Force. In my own constituency there is a home, Lyme Green, for such men who are paralysed and are employed repairing watches and clocks. They smoke a lot, and a very strong case could be put forward on their behalf for a similar concession. The numbers of severely injured ex-Service men are not very great; in fact, they are, fortunately, comparatively small. I wish to put in a plea for these men, and I hope that the Chancellor will bear in mind the possibility of a similar concession for the war blinded and the very severely wounded men when he is discussing the matter with his colleagues.
    Mr. McKie: I do not think that anybody on this side of the Committee will get much satisfaction from what the Chancellor has said with regard to tobacco from the Empire. If I may say so without offence, the right hon. Gentleman was studiously vague. He said it was the intention of the Government to initiate a scheme of Imperial preference—
    Mr. Dalton: I distinctly put it wider than that. I talked about the broad problem of the productive resources of the Empire.
    5.30 p.m.
    Mr. McKie: I thank the right hon. Gentleman for reminding me of that, because I should like to think that that was so. Even so, I am afraid that I must adhere to my first remark that I do not think that anybody on this side of the Committee can be satisfied with what the right hon. Gentleman said on the Fore of the development of the tobacco resources of the British Commonwealth of Nations. Of course, it is no doubt an advance to get the party opposite to make a state-
    912
    ment such as that, and, so far as it goes, I thank the right hon. Gentleman for it. I quite agree that it is much more necessary to have—I think I am quoting his words accurately—"food rather than fags." I hope the right hon. Gentleman will impress upon his colleagues the necescity of that, and will see that we get more ample supplies of food in the future, no matter what happens to our "fags," than we have received in the past. I think that that is all you will allow me to say on that, Mr. Bowles. I say it for the benefit of hon. Members opposite. This is exempted Business, and we may stay all night on it.
    With regard to the second part of the right hon. Gentleman's speech, I wish to join with my hon. Friends behind me in thanking him for having gone so far as he has with regard to old age pensioners. I can hardly support what he said about the way in which the country has received the imposition of this tobacco tax. Re said he was very much impressed with the mild amount of criticism which he had met in the country generally. Hon. Members opposite should not live in a fool's paradise with regard to the way in which the country has received the imposition of this tax. I thought the hon. Member for Dumbarton Burghs (Mr. Kirkwood), although he spoke in very moderate language, was impressed with the seriousness of the situation, but perhaps he had prior information from the Chancellor, because I understand they have been in correspondence on the question of this mild concession to the old age pensioners.
    Another hon. Member lifted the curtain a little further and said that he fully realised the potential dangers of this tax. The hon. Gentleman also seemed to be aware of the potential gravity of the addition of the Clause to the Bill from the political point of view, and I wholeheartedly sympathise, having no responsibility for it. Certainly, it would be churlish of hon. Members on this side of the Committee to allow the Chancellor's statement concerning the small concession he is prepared to make for old age pensioners to go without a small vote of thanks. I hope it will not be felt that I am animated by any political motive when I express the wish that the scope of this concession to old age pensioners will he extended to many more people in the country who are very nearly as hardly pressed.

    913
    Despite the allowances to which the hon. Member for Ince (Mr. T. Brown) referred, the increased amount of money available will be almost completely swallowed up. I am not a smoker myself, but I understand that the small pipe of tobacco or, to use the Chancellor's delightful colloquialism, the "fag," has become an almost indispensable necessity for the vast majority of citizens, both men and women. I hope that if the right hon. Gentleman occupies his present position in a year's time, he will be able to do something more generous for larger sections of the community than he has done so far.
    Mr. W. D. Griffiths: I am sure the Committee will have heard the Chancellor's announcement with great pleasure. We appreciate the difficulties involved. When the hon. and gallant Member for Macclesfield (Air-Commodore Harvey) spoke of the disabled ex-Service men, I am sure that, like myself, the Committee felt that there too, was a class of person to whom we would like to see a concession granted; but, as the Chancellor has said, once we start making concessions there are no limits to the cases that can be made out for various sections of the community. For that reason, I must express the view which I have had since I first heard the Budget statement, that it would have been infinitely better, despite the colossal administrative difficulties, to have produced a rationing system. Despite the clamour of the Housewives' League, we maintain that on the question of food we must ensure a fair distribution. In the case of tobacco, that is precisely what is not being applied. The workers of all grades are entitled to say, "Here is a Government, which has always based its policy on fair shares for all, in this instance practising a policy which is diametrically opposed to that." If we are to give concessions to the old age pensioners and the disabled ex-Service men, what about the agricultural workers, the poorly-paid shop assistants, and the whole range of lower income limits? Bearing in mind the difficulties faced by the Chancellor and his colleagues, a rationing scheme would have been infinitely better.
    Air-Commodore Harvey: Surely the hon. Gentleman does not place in the same category as the ex-Service man who is wounded for life, the agricultural worker who has got his health?
    Mr. Griffiths: During the war the Government saw fit to direct all of us into some form of national service. The agricultural worker had to play his part, as did the men in the Forces. In any case, they are both in the lower wage groups, and should be treated similarly.
    Mr. Butcher: The Chancellor is having an easy ride in connection with the Tobacco Duty. He has stated the importance of conserving dollars, and the Committee have been most interested in the way in which he has dealt with the question of "food before fags." It would appear that food, not only for poultry but for human beings, is becoming one of the major preoccupations of the people. It is interesting to examine the Chancellor's determination to economise in the expenditure of dollars by means of one of the three alternatives which are available to him. First, there is the appeal which he has made. I suggest that the appeals to which the people will now respond are becoming very limited. The people have been appealed to over a very long period. Then there is the possibility of rationing, which was referred to by the hon. Member for Moss Side (Mr. W. D. Griffiths), and with which I entirely associate myself. It was the policy of the former Administration that there should be fair shares for all, and I believe that if rationing of tobacco can be maintained in parts of the Continent and rationing of sweetstuffs for children can be operated in this country, there is no reason why, given the will and the determination, tobacco should not also be rationed in this country. The Chancellor has not relied upon either of those two methods of reducing the consumption of tobacco. He has chosen the easiest way, by imposing an increase in price on those who are least able to bear the increase. Let us realise what we are doing in this Committee. We are not penalising the wealthy man; he can continue smoking as much as he likes, and it will not make any difference to him.
    Major Bruce: Will the hon. Member make his position quite clear? Is he suggesting that there should be, in fact, a rationing scheme for tobacco, or is he prepared to support the Chancellor? A rationing scheme would increase the number of civil servants.
    Mr. Dalton: "Hordes of officials."
    Mr. Butcher: I was associating myself with the remarks of the hon. Member for Moss Side (Mr. W. D. Griffiths), and I must leave hon. Members opposite to compose their differences without bringing me in as a referee. The Chancellor has chosen the naked way of putting up the price, so that the only people who will suffer are the people with the lowest incomes. So far as the Chancellor has mitigated hardship in assisting the old age pensioners, we are grateful to him. How wise and true it was to say that there are difficulties about this which were presented to him by his Department. There are difficulties.
    Mr. Michael Foot: There are.
    Mr. Butcher: I quite agree. The hon. Gentleman had a better education than many of us on this side of the House, and so, perhaps, he will refrain from sneers at those who did not have that advantage. There are difficulties, and they are great. The Chancellor has explained them. Nevertheless, he is good in this matter to the old age pensioners. If these difficulties are to be overcome for the old age pensioners, I am sure they can be overcome for the disabled ex-Service men as well. It is difficult to exempt classes from this kind of indirect taxation, but once we have decided to exempt a class, then we must examine all other classes to see whether they have a just claim for exemption. I say to the Chancellor of the Exchequer that no section of the community has a greater claim for exemption in this matter than the ex-Service men, and the men of the Merchant Navy, who were, perhaps, disabled in bringing this commodity into the country during the period of war.
    Mr. Gordon-Walker: If I sound a discordant note, I am sorry. But I must say that I am sorry that the Chancellor has decided to assist the old age pensioners in this particular way. It seems to me that the argument used in favour of this method is based on a piece of completely false logic. It is not a question of this tobacco tax being unfair or of its being a clumsy tax, as the hon. and gallant Member for Holderness (Lieut.-Commander Braithwaite) said. The true logic of the argument in favour of helping the old age pensioners is that, in the circumstances of this tax, the pen-
    916
    sions of the old age pensioners are not great enough. That is the logic of the position. If that is so and I agree with it—then the fair and proper way of dealing with this is to calculate what this concession is worth in cash, and to add that extra cash on to the old age pensions. By this means we should avoid all these complicated administrative difficulties. It would not involve an extra civil servant, whereas the Chancellor's scheme will involve extra civil servants.
    Once we make the concession in one case, it is inevitable that other claims will be urged. We have heard of a good many today—just as good cases; absolutely as good. By this method of the Chancellor's we shall create as much unfairness as we remove, and we shall increase the administrative and technical difficulties. We increase also the temptation for the black market, which is a thing that has to be watched carefully at the moment. There are dangers of the black market, etc., spreading in this country at the moment.
    Moreover, to admit that there is a case for a concession in one instance invites the suggestion that there is an equally good case for exemption in others. The old age pensioners have just as good a case for concessions in regard to other taxed goods as they have in regard to tobacco. I am sorry to sound this discordant note, and, perhaps, too late; but even if I am to be only one by myself, I must say that I am sorry that the Chancellor of the Exchequer has decided to go about this in this manner, which will cause many difficulties, grievances and injustices, instead of doing it in the straightforward and fair way of making an addition of the amount of the tax-equivalent of this proposed concession to the pensions of the old age pensioners.
    5.45 p.m.
    Mr. Ronald Chamberlain: I have a great deal of sympathy with what my hon. Friend the Member for Smethwick (Mr. Gordon-Walker) has just said. In fact, had the Chancellor not announced this concession, I was going to propose to him that he should make a concession outside the scope of the Bill. I mention that only in passing, because I think there is a lot in what has already been said by my hon. Friend, and that the proposal he has made would, if adopted, avoid a great deal of administrative difficulty. But what I really want to do now is to ask my right hon. Friend

    917
    it he will go a little further in explaining what is his intention. I am well aware that he does not want now to disclose all that is in his mind, but I think one point should be made clear. There was in the previous Debate on this subject some question with regard to women old age pensioners, and I think that my hon. Friend the Member for Epping (Mrs. Manning) suggested that, in general, they do not want a tobacco or cigarette concession. That is probably true. But, at the same time, there is a large number, some in my own constituency, who do, quite rightly and legitimately, enjoy their cigarettes; and all I want my right hon. Friend to say, if he can at this stage, is whether or not his intention is merely to give this concession to male old age pensioners. I would ask him in making the concession to bear in mind and make provision for the women old age pensioners.
    Mr. Dalton: There will be no sex disqualification imposed.
    Mr. Stanley: Equal smokes.
    Mr. Gallacher: It has been said that this concession will be unfair to other categories and will raise protests. I quite agree with that, but that is not an argument against concession. What we are discussing now is the Finance Bill, arid if we do not do something about this in the Finance Bill the full tax will be borne by the old age pensioners; they may not be able to get a concession, and the old folks will thus lose. We have to find the best means of getting the fullest measure of relief that we can for them. If we can get it for others besides, all well and good. I was disappointed that an Amendment on the Order Paper in my name and those of my hon. Friend the Member for Dumbarton Burghs (Mr. Kirkwood) and of the hon. Member for the Isle of Wight (Sir P. Macdonald) was not called. It was in favour of the old age pensioners, and of cripples and longterm hospital cases, as well. It was a great relief to me when I heard that the Chancellor of the Exchequer had decided to make this concession. It is a very good concession, taking everything into account, and the Chancellor deserves high marks for it, and I hope he will get them.
    At the same time, if, between now and the Report stage, we can persuade him to bring in the long-term hospital cases and cripples as well, we shall make the
    918
    concession better. We have cases of people lying in hospital, month after month, year after year. I remember visiting a hospital where there was a lad abed who had been lying there three years. The nurse brought him tea in the afternoon and the consolation of a smoke. If we consider those unfortunate people lying in hospital month after month, and, as in the case of some of the miners, for as long as a year or more, we shall wish to extend the concession to them. I know that the Chancellor of the Exchequer, who carries a song in his own heart, would like to put a song into the hearts of those suffering people, and so I hope that, before the Report stage, he will try to bring some of those people in.
    Mr. R. Adams: I was a little surprised to hear the hon. and gallant Member for Holderness (Lieut.-Commander Braithwaite) acting as a recruiting officer for the Housewives' League, because I was assured that it had no political allegiance; but I think that the hon. Member for Galloway (Mr. McKie) talked about "lifting the curtain," so perhaps he was lifting the curtain in this particular matter.
    Lieut.-Commander Braithwaite: I was merely predicting that the hon. Member for Dumbarton Burghs (Mr. Kirkwood) might be appearing on the platform of this strongly non-party organisation.
    Mr. Adams: I did understand the hon. and gallant Gentleman to say that he was encouraging him to do so. My purpose in getting up was to refer to some of the difficulties in connection with the tobacco problem. Like many other hon. Members, I welcome the concession which the Chancellor has made to the old age pensioners; but from the short Debate which has followed his announcement, I think it will be apparent that there are many difficulties in the way. It was pointed out that there would be administrative difficulties; and I think the Chancellor himself indicated that he had not yet found a final scheme for assisting these people.
    Mr. Dalton: I said we would overcome the difficulties.
    Mr. Adams: At any rate, my right hon. Friend did refer to the fact that he had experienced some difficulties in finding a suitable scheme. It will have been noted that the moment he sat down other hon.

    919
    Members got up and suggested other classes who ought to be brought in. It seems to me that if classes are excluded from legislation in that way, it is asking for people immediately to suggest other classes for exclusion also. We have heard pleas for disabled ex-Service men, cripples and people who have been in hospital for a long time. They are all very good cases, and it seems difficult for the Chancellor to say: "I will grant it for old age pensioners but no one else."
    That brings me to the point I wish to make, namely, the proper use of the Purchase Tax as a way out. It is a bad thing for the Chancellor to have to raise form of taxation, and then to say, "I will exclude a certain class because I do not think they can afford to come in." Surely, the taxation has to be adjusted in such a way that everybody can bear it fairly? My objection to the increased Tobacco Duty is that it does not bear fairly on all classes of the population. It has been made only too clear that it bears too heavily on the old age pensioners, and it could be argued quite consistently that the increased Duty bears far more heavily on the working class man earning, say, £4 or £5 a week than it does on really well-to-do people. The hon. Member for Holland with Boston (Mr. Butcher) made the point—quite rightly, in my view—that a man earning £2,000 or £3,000 a year will not have his smoking affected one iota by this increased Tobacco Duty. If we want all sections of the population to make an equal sacrifice, then I suggest we should spread the burden of taxation fairly and equally over all sections of the population. That is just what the Purchase Tax will enable us to do—
    The Temporary Chairman: The hon. Member has again referred to Purchase Tax. This Clause is nothing to do with Purchase Tax.
    Mr. Adams: I thought I was in Order in pointing that out as an alternative to the present proposed Tobacco Duty. I was pointing out its unfairness in certain respects, and suggesting the use of Purchase Tax as an alternative. It would be possible to reduce the proposed rate of Import Duty, and to exclude Empire tobacco entirely from the Purchase Tax. In passing, I would remind hon. Members
    920
    that the old age pensioners and the poorer working men tend to smoke the cheaper tobacco and the Empire tobaccos; and, therefore, if my suggestion were adopted, the price of tobacco to them would not be quite as high as it is at present. The standard brands could bear some proportion of Purchase Tax, while the more expensive tobaccos, cigarettes and cigars could bear a high rate of Purchase Tax. My suggestion would equate the burden that has to be borne in order to cut down our dollar expenditure, and would spread it more fairly over all sections of the population. In addition, it would meet the practical objections to the Chancellor's suggestion for helping the old age pensioners. I hope the Chancellor will at least give some consideration to the suggestion I have made between now and the Report stage.
    Captain Crookshank: May I come back to Clause 3 for a change, the Question being that it should stand part? For some little time we have been discussing a Clause which will be introduced later on, and within the framework of which the Chancellor has pointed out he will make some concession to old age pensioners. The appropriate votes of thanks to him have been moved, seconded and supported from all quarters of the Committee, and I am very glad to associate myself with the desire of the right hon. Gentleman to ease the burden of the old age pensioners. Having said that, I should now like, for one brief moment, to look at Clause 3, because it is a bad Clause. All this talk of concessions would not be necessary if it were not for the Clause itself. What the Clause does—and do let us remember this; although it is, of course, done on Budget day, this is the final authority for doing it—is to increase the existing Tobacco Duty by 50 per cent.
    In his Budget Speech the Chancellor said that he hoped that as a result of this savage increase in taxation the dollar expenditure might be reduced by some 30 million dollars, but only if consumption went down 25 per cent., and that if that happened he would get £75 million extra revenue. Of course, if it did not he would get more revenue, but it all depends upon the result of the right hon. Gentleman's appeal. We were wondering what effect it has had so far. He has just told us that while at that time the drop in con-

    921
    sumption—I suppose he meant in purchases—was 50 per cent. or so—possibly because there may have been considerable stocks in private hands; and I think that is more than likely, because as far as I know, that always happens about Budget time—since then the purchases have risen, and reached something like 70 per cent. Well, we have gone only two months, and we cannot really deduce anything from those figures.
    Today, we are left to decide, not the question whether if there is this Duty there should be some concession for old age pensioners. That is not the question we are discussing at all. We shall discuss that later on when we get a new Clause. Hon. Members on both sides of the Committee, including myself, put forward that proposition at an earlier stage, and the Chancellor has conceded it. But that is quite another matter from the question which arises at the moment, whether or not this Committee accepts the proposition of the Chancellor that this enormous increase in taxation should be put upon merely one section of the indirect taxpayers. If the right hon. Gentleman had wanted to raise revenue on a large scale—which he might have been well advised to do, when taking into consideration the general financial situation and the inflationary pressure from which we are suffering—if he had decided to impose increases in taxation over the whole range of indirect taxation, that would have been
    one thing. But to single out the smokers and nobody else for this very heavy duty—and that not because it was a good or a bad financial policy, but because as a result of it he hoped to save 30 million dollars—is a proposition which we on this side of the Committee do not accept. We think it is a foolish thing to have done.
    We cannot see that the Chancellor has any guarantee—except the result of his appeal—that he will save any dollars at all. If consumption rises still further, he will go on paying out dollars. He may even have to pay out more dollars this year, in the end, than last year. Therefore, we think the whole plan of raising the Tobacco Duty in this way in this Budget is misconceived. Because that is the question—and not this extraneous matter at all—when considering whether or not this Clause should stand part of the Bill, and because we think the approach which the right hon. Gentleman has made is wrong, we shall vote against this Clause.
    Mr. James Callaghan: Surely, the right hon. and gallant Gentleman is not going to resume his seat without saying what he would do instead?
    Captain Crookshank: Yes he is, and he. has done so.
    Question put, "That the Clause stand part of the Bill."
    The Committee divided: Ayes, 233; Noes, 89.

    Division No. 241.]

    AYES.

    [5.59 p.m.

    Adams, Richard (Balham)

    Brooks, T. J. (Rothwell)

    Driberg, T. E. N.

    Adams, W T. (Hammersmith, South)

    Brown, George (Belper)

    Dumpleton, C. W.

    Allen, A C (Bosworth)

    Brown, T. J. (Ince)

    Ede, Rt. Hon J. C

    Allighan, Garry

    Brown, W. J. (Rugby)

    Edelman, M

    Alpass, J H.

    Bruce, Maj. D. W. T

    Edwards, Rt. Hon. Sir C. (Bedwellty)

    Anderson, A. (Motherwell)

    Buchanan, G.

    Evans, S. N. (Wednesbury)

    Anderson, F. (Whitehaven)

    Burke, W. A.

    Ewart, R.

    Attewell, H. C.

    Butler, H. W. (Hackney. S.)

    Fernyhough, E

    Austin, H. Lewis

    Callaghan, James

    Follick, M.

    Ayles, W. H.

    Castle, Mrs. B. A.

    Foot, M. M.

    Ayrton Gould, Mrs B

    Chamberlain, R. A.

    Forman, J. C.

    Bacon, Miss A.

    Champion, A. J.

    Gallacher, W.

    Balfour, A.

    Chater, D

    Ganley, Mrs. C. S

    Barstow, P. G

    Chetwynd, G. R.

    Gibson, C. W.

    Barton, C,

    Cluse, W. S.

    Gilzean, A.

    Battley, J. R.

    Cocks, F. S

    Glanville, J. E. (Consett)

    Bechervaise, A. E

    Coldrick, W.

    Goodrich, H. E.

    Belcher, J. W.

    Colman, Miss G. M

    Gordon-Walker, P C

    Benson, G.

    Comyns, Dr. L.

    Grey, C. F.

    Berry, H.

    Cook, T. F.

    Grierson, E.

    Beswick, F

    Cooper, Wing-Comdr G

    Griffiths, Rt. Hon. (Llanelly)

    Bing, G. H. C

    Corlett, Dr. J.

    Guest, Dr. L. Haden

    Blackburn, A. R

    Cove, W. G.

    Gunter, R. J

    Blyton, W. R.

    Grossman, R. H. S.

    Guy, W. H

    Bowden, Flg.-Offr. H. W.

    Daggar, G

    Haire, John E. (Wycombe)

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

    Daines, P.

    Hale, Leslie

    Braddock, T. (Mitcham)

    Dalton, Rt. Hon. H.

    Hall, W. G.

    Bramall, E. A.

    Dodds, N. N.

    Hardy, E. A

    Brook, D. (Halifax)

    Donovan, T

    Harrison, J

    Hastings, Dr. Somerville

    Mitchison, G. R.

    Silverman, J. (Erdington)

    Haworth, J.

    Monslow, W.

    Simmons, C J.

    Herbison, Miss M

    Montague, F.

    Skeffington-Lodge, T. C.

    Hicks, G.

    Morley, R.

    Snow, Capt. J. W.

    Hobson, C. R.

    Morris, Lt.-Col. H. (Sheffield, C)

    Soskice, Maj. Sir F.

    Holmes, H. E. (Hemsworth)

    Morris, P. (Swansea, W.)

    Stamford, W.

    House, G.

    Morris, Hopkin (Carmarthen)

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

    Hoy, J

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

    Stubbs, A. E.

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

    Mort, D. L.

    Summerskill, Dr. Edith

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

    Moyle, A

    Symonds, A. L.

    Hynd, H. (Hackney, C.)

    Murray, J D

    Taylor, H. B. (Mansfield)

    Irving, W. J

    Nally, W.

    Taylor, R. J. (Morpeth)

    Janner, B.

    Naylor, T. E.

    Taylor, Dr. S. (Barnet)

    Jay, D. P. T.

    Neal, H. (Claycross)

    Thomas, George (Cardiff)

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

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

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

    John, W.

    Nicholls, H. R. (Stratford)

    Thurtle, Ernest

    Jones, D. T. (Hartlepools)

    Noel-Buxton, Lady

    Timmons, J.

    Jones, Elwyn (Plaistow)

    Oldfield, W. H

    Titterington, M. F.

    Jones, P. Asterley (Hitchin)

    Paget, R. T.

    Tolley, L.

    Key, C. W.

    Paling, Will T. (Dewsbury)

    Usborne, Henry

    Kinley, J.

    Palmer, A. M. F

    Vernon, Maj. W. F

    Kirby, B. V.

    Pargiter, G. A.

    Viant, S. P.

    Kirkwpod, D

    Parkin, B. T.

    Wadsworth, G.

    Lang, G

    Paton, J. (Norwich)

    Walkden, E.

    Lavers, S.

    Peart, Capt. T. F.

    Wallace, G. D. (Chislehurst)

    Lee, Miss J. (Cannock)

    Poole, Major Cecil (Lichfield)

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

    Levy, B. W

    Popplewell, E.

    Watson, W. M.

    Lewis, J. (Bolton)

    Porter, E. (Warrington)

    Webb, M. (Bradford, C.)

    Lipton, Lt.-Col. M.

    Porter, G. (Leeds)

    Wells, P. L. (Faversham)

    Logan, D. G.

    Pritt, D. N.

    Wells, W. T. (Walsall)

    Longden, F.

    Proctor, W. T.

    West, D. G.

    Lyne, A. W.

    Pryde, D. J.

    Westwood, Rt. Hon. J.

    McAllister, G.

    Pursey, Cmdr. H

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

    McEntee, V. La T

    Randall, H. E.

    Whiteley, Rt. Hon. W.

    McGhee, H. G

    Ranger, J.

    Wigg, Col. G. E.

    Mack, J. D.

    Rankin, J.

    Wilcock, Group-Capt. C. A. B.

    McKay, J (Wallsend)

    Rees-Williams, D R

    Willey, F. T. (Sunderland)

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

    Reeves, J.

    Willey, O. G. (Cleveland)

    McKinlay, A. S.

    Rhodes, H.

    Williams, D. J. (Neath)

    McLeavy, F.

    Richards, R

    Williams, J. L. (Kelvingrove)

    Macpherson, T. (Romford)

    Roberts, Goronwy (Caernarvonshire)

    Williams, W. R. (Heston)

    Mainwaring, W. H.

    Roberts, W. (Cumberland, N.)

    Williamson, T.

    Mallalieu, J. P. W.

    Robertson, J. J. (Berwick).

    Willis, E.

    Mann, Mrs. J.

    Rogers, G. H. R.

    Wills, Mrs. E. A

    Manning, Mrs. L. (Epping)

    Ross, William (Kilmarnock)

    Woods, G. S.

    Martin, J. H.

    Sargood, R.

    Yates, V. F.

    Medland, H. M

    Segal, Dr. S.

    Mellish, R. J.

    Shackleton, E. A. A

    TELLERS FOR THE AVES:

    Middleton, Mrs. L.

    Sharp, Granville

    Mr. Joseph Henderson and

    Millington, Wing-Comdr E. R

    Shurmer, P.

    Mr. Hannan.

    NOES.

    Astor, Hon. M

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

    Morris-Jones, Sir H.

    Barlow, Sir J.

    Gomme-Duncan, Col. A

    Morrison, Maj. J. G. (Salisbury)

    Baxter, A. B.

    Gridley, Sir A

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

    Birch, Nigel

    Grimston, R. V.

    Mott-Radclyffe, Maj. C. E.

    Boothby, R

    Hare, Hon. J. H. (Woodbridge)

    Neven-Spence, Sir B.

    Bower, N.

    Harvey, Air-Comdre A V

    Noble, Comdr. A. H. P

    Boyd-Carpenter, J. A.

    Head, Brig. A. H.

    Peake, Rt. Hon. 0.

    Bracken, Rt. Hon, Brendan

    Headlam, Lieut.-Col. Rt. Hon. Sir C

    Peto, Brig. C. H. M

    Braithwaite, Lt.-Comdr. J. G.

    Hinchingbrooke, Viscount

    Poole, 0. B. S. (Oswestry)

    Bromley-Davenport, Lt.-Col W

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

    Prescott, Stanley

    Buchan-Hopburn, P. G. T.

    Hutchison, Lt.-Cm, Clark (E'b'rgh W.)

    Raikes, H. V.

    Bullock, Capt. M

    Jarvis, Sir J.

    Ramsay, Maj. S

    Butcher, H. W.

    Jeffreys, General Sir G.

    Ross, Sir R. D. (Londonderry)

    Challen, C.

    Lancaster, Col. C. G.

    Savory, Prof. D. L.

    Channon, H

    Law, Rt. Hon. R. K.

    Scott, Lord W.

    Clarke, Col. R. S

    Lennox-Boyd, A. T.

    Smith, E. P (Ashford)

    Conant, Maj. R. J. E

    Lindsay, M. (Solihull)

    Snadden, W. M.

    Cooper-Key, E. M

    Lyttelton, Rt. Hon. 0

    Stanley, Rt. Hon. 0.

    Crookshank, Capt. Rt. Hon H F C

    MacAndrew, Col. Sir C

    Stewart, J. Henderson (Fife, E.)

    Cuthbert, W. N.

    McCallum, Maj. D.

    Stuart, Rt. Hon. J. (Moray)

    Darling, Sir W. Y.

    Macdonald, Sir P. (I. of Wight)

    Sutcliffe, H.

    Davidson, Viscountess

    Mackeson, Brig. H. R.

    Thornton-Kemsley, C. N.

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

    McKie, J. H. (Galloway)

    White, Sir D. (Fareham)

    Dugdale, Maj. Sir T (Richmond)

    Maclay, Hon. J. S

    White, J. B. (Canterbury)

    Duthie, W. S.

    MacLeod, J.

    Williams, Gerald (Tonbridge)

    Eccles, D. M.

    Macmillan, Rt. Hon. Harold (Bromley)

    Willoughby de Eresby, Lord

    Eden, Rt. Hon A.

    Macpherson, Maj. N, (Dumfries)

    York, C.

    Elliot, Rt. Hon. Walter

    Marlowe, A. A. H.

    Foster, J. G. (Northwich)

    Marples, A. E.

    TELLERS FOR THE NOES

    Fraser, H. C. P. (Stone)

    Marshall, S. H (Sutton)

    Mr. Drewe and Mr Studholme

    Fraser, Sir I, (Lonsdale)

    Mellor, Sir J

    Question put, and agreed to.

    Clause ordered to stand part of the Bill.

    CLAUSE 4.—(Repeal and reduction of certain artificial silk duties and allowances.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Mr. Wadsworth: The reason for my rising to speak on this Clause is to direct the Committee's attention to the large number of items upon which Import Duties are levied. It is not unusual for members of my party to speak on imports, for the time has gone when hon. Members, in any part of the House look upon the fiscal problem of tariffs or Free Trade in the absolute colours of black and white. I would ask the Chancellor to re-examine the whole question of Import Duties, for, out of the whole revenue of £3,400 million, only £21 million was raised in the last financial year on all Import Duties when levied for productive purposes under tariff legislation.
    Lieut.-Commander Braithwaite: On a point of Order. Is the hon. Member in Order in pursuing the question of Import Duties on a Clause which deals solely with excise matters?
    The Chairman (Major Milner): No, the hon. Member is not in Order in raising this matter now.
    Mr. Wadsworth: In that case, I will ask the Chancellor of the Exchequer to re-examine the question of the thousands of articles on which there is an Import Duty.
    Clause ordered to stand part of the Bill.

    CLAUSE 5.—(Duty free use of sugar, etc.)
    Motion made, and Question proposed, That the Clause stand part of the Bill."
    Viscount Hinchingbrooke: I do not know whether the Financial Secretary intends to speak at this stage, but, if not, perhaps this will give him the opportunity, because I think the Committee will be interested to know what is the meaning of this short Clause. It says that it is to make a certain class of sugar free of import duty At first sight, it would appear that whereas the housewife is desperately anxious to get more sugar for jam making and everybody desires to see a greater and freer import of sugar for human consumption, this
    926
    Clause has nothing to say on that subject whatever, and allows certain manufacturers to get sugar for unspecified purposes. I would like to know what those purposes are what is the meaning of the words, "protection of the revenue"? How is the revenue protected if sugar comes into this country free of tax for use by manufacturers, and what is the meaning of the words, "giving of security"? Has it anything to do with defence? Is the sugar to be processed for the manufacturing of arms? The Committee will be interested to have some more explanation of this Clause.
    Mr. Nigel Birch: There are one or two odder things than those to which my noble Friend has just drawn attention. The Commissioners may authorise any person "carrying on any art or manufacture" to receive sugar, etc. What is the precise form of the art? Is it the icing of cakes? This is a mysterious Clause, and more explanation is required of what it is wanted for, and why.
    The Financial Secretary to the Treasury (Mr. Glenvil Hall): This is a very short Clause, and I thought we might have got it without any discussion, because its meaning is plain on the face of it. The Clause seeks to authorise the receipt, by certain manufacturers, of sugar, duty-free, which is used by them for making certain articles—
    Mr. Birch: What articles?
    Mr. Hall: Perhaps I can make my own speech in my own way. Citric acid is one, oxalic acid is another and the new drug which we discussed last night, penicillin, is a third. They are made from glucose, molasses, and sugar in one form or another. For some time—I think since 1897—the Commissioners of Customs and Excise have permitted, in an extra-statutory way, the use duty tree of sugar, molasses, and glucose by chemical manufacturers, and certain other manufacturers. We are now regularising a situation which has prevailed for over 50 years. This Clause makes no change in what has been the regular practice, and I hope it will be accepted by the Committee
    6.15 p.m.
    Lieut.-Commander Braithwaite: The Committee will be grateful to the right hon. Gentleman for enlightening us to that extent, but I think we would like a little

    927
    more information as we want to make sure what the Government wish to get by this Clause. The mysterious phrase, "carrying on any art or manufacture," still remains a little obscure. The right hon. Gentleman mentioned the manufacture of citric acid, oxalic acid and penicillin. I should have thought that the matter might have been a little clearer if a Schedule had told us what is covered by this Clause. I do not know whether the list of articles which the right hon. Gentleman quoted was merely an example, or was comprehensive, but if there are others we should be glad to know what they are. Just how art comes into all this is a little mysterious.
    Mr. Glenvil Hall: I am not an expert in these matters, but I believe that certain chemicals or liquids which are used for cleaning pictures are made from one or other of these sugars. We wanted to make the Clause as wide as possible, and that is why the word "art" has been inserted. Certain liquids are used for artistic purposes. There is nothing sinister here about the use of the word "art."
    Mr. McKie. I am surprised that the Financial Secretary should be surprised about our desire for a little more information about this Clause. He described it as an innocent Clause, but as the Debate has proceeded it has been amply illustrated that it is not so simple as it at first appears. The right hon. Gentleman was pressed very hard to tell us what this Clause seeks to do. I join with my hon. Friends in wishing to see every encouragement given to the processing of citric and oxalic acids and penicillin, and the cleaning of pictures. The right hon. Gentleman said that the Government wanted to make the fullest use of this Clause, that it was drafted with that idea. Without wishing to take the gilt off the ginger bread, or pour cold water on what he said, I suggest that if he had really wanted to put this Clause to the widest possible use he would not have included the words,
    "other than the production of food or drink for human consumption."
    The housewives of this country will read his words tomorrow, or perhaps hear them over the wireless this evening. This is just the kind of Clause that may well get two or three minutes' time when "In Parliament today" is broadcast tonight.
    928
    It is very desirable that housewives should be informed about what the right hon. Gentleman has said in seeking to exclude them directly from participation in any benefits which will flow to other sections of the community, particularly those in the realm of medicine, by the inclusion of this Clause in the Bill. We know perfectly well that there is one use to which sugar might be put, but for the inclusion of these words:
    "other than the production of food or drink for human consumption,"
    and that is for the preservation of fruit. The right hon. Gentleman knows how the housewives of this country have suffered, and will continue to suffer, by not having proper supplies of sugar for the preservation of fruit, and particularly the wild fruits of this country. A golden opportunity is missed by the inclusion of these words which directly exclude from benefit those who are producing food or drink for human consumption. If there is to he a Division against adding this Clause to the Bill, I hope that the hon. Member for Buckrose (Mr. Wadsworth), who spoke on a previous Clause, will go into the Lobby with me in order to protest against not making available a wider and more free use of sugar than is envisaged in this Clause for not only the housewives but the consuming public.
    Sir Frank Sanderson: I would ask the Financial Secretary to give a reply to the following point which I think this Clause is primarily drawn up to cover: Molasses are imported into this country in large quantities and they contain a high percentage of sugar. They are used primarily for two purposes—one in the process of distilling, and the other in the manufacture of cattle feedingstuffs. I understand that it is the wish of the Chancellor of the Exchequer that the sugar content in molasses shall be free of duty. I think that I am right in saying that the two illustrations I have given cover the principal commodity upon which the right hon. Gentleman desires by this Clause to free the sugar content from duty, though there are others to which the Financial Secretary has referred.
    Mr. Baldwin: Could we have an indication of the extent of this duty? It would seem that a straight forward way to deal with this would be to make the manufacturers pay the duty and

    929
    allow them to charge a little extra for the products which they are turning out. All these little rebates give an avenue for a black market, and I think the straight way would be to increase the cost of the product to cover the duty. If in the carrying on of any art or manufacture a particular chemical is required, those concerned should pay duty for the chemical. I do not see why they should be given any greater preference than the farmer who uses molasses for making silage for the cattle they feed. I would like to know whether it would be possible to exclude all rebate on sugar and molasses.
    Clause ordered to stand part of the Bill.
    Clauses 6, 7 and 8 ordered to stand part of the Bill.

    CLAUSE 9.—(Income Tax for 1947–48.)
    Mr. Glenvil Hall: I beg to move in page 7, line 33, after the first "of," to insert:
    "Section thirty of the Finance Act, 1946, and of."
    I think the Committee is familiar with the point which lies behind this Amendment. We had in Committee of Ways and Means—first in Committee and then on Report stage last night—a Resolution which authorises the inclusion of this Amendment. It inserts in Clause 9 a provision to enable P.A.Y.E. to be applied to the Forces. The original Resolution in Committee of Ways and Means unfortunately overlooked the fact that until this year the Armed Forces of the Crown did not come into the P.A.Y.E. machinery as did other people who paid Schedule E. By this Amendment we are putting that into the Clause, in order to make from 6th April this year members of the Armed Forces, both men and women, subject to what is now the usual P.A.Y.E. arrangements.
    Amendment agreed to.
    Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."
    Lieut.-Commander Braithwaite: This is the Clause which imposes the standard rate of Income Tax for the current year. It would be a pity to pass it without comment. Although I have no doubt that the Chancellor, or the Financial Secretary, in reply, will tell us that there are comforting words in Clause 10—dealing with
    930
    alteration of certain reliefs—I think that in the second full year of peace it is a calamitous thing that the standard rate of Income Tax should still be running at 9s. in the pound. When we recall that it was at the blackest moment of the war, when we were standing alone, that the late Sir Kingsley Wood raised it to 10s., I think that we should have gone further on the road towards the relief of the basic rate of this very serious burden. I should like some elucidation of Subsection (2), concerning the provisions relating to transport or electricity. But my main purpose in rising was to make my protest, and I am sure that of other hon. Members, that the standard rate of Income Tax should still be 9s. in the pound.
    Mr. Dalton: I do not think that we can very usefully go into a detailed Debate on the standard rate, but perhaps I may make an observation or two about it. But for me it would still be 10s. in the pound. I inherited the 10s. standard, and in my first autumn interim Budget I took a shilling off and reduced it to 9s. Hope springs eternal in all breasts—even in the breast of the hon. and gallant Gentleman and those of many others—and I should be very disappointed if we could not get a reduction in due course. I think mat it is in Order at this stage—I do not think that I am anticipating the next Clause—when I say that, having to choose between the alternative needs of giving help to industry, and having made an initial reduction from 10s. to 9s. in the pound in my first Budget, afterwards, both in the Debate of last year and in this Debate, it seemed better to proceed by way of improvement in the various allowances, both the total exemptions of the earned income relief and the allowances for children and the dependant allowances, than to have a further flat cut in the standard rate.
    We have, in other words, to try to take first things first in regard to reliefs to the different sections of the community. That does not, of course, mean that we are at the end of our works of mercy, and I hope it may yet be part of my destiny to reduce the standard rate still further. I must not commit myself and I must be careful to allow no Budget leakages in regard to next year. I shall be disappointed, however, if my time at the Ex-

    931
    chequer comes to an end with the standard rate of Income Tax 9s. in the £. I do not think I can add more today.
    6.30 p.m.
    Captain Crookshank: The right hon. Gentleman was asked by my hon. and gallant Friend the Member for Holderness (Lieut.-Commander Braithwaite) to say something about Subsection (2) of this Clause.
    Mr. Dalton: It was to be dealt with by my right hon. Friend the Financial Secretary to the Treasury.
    Captain Crookshank: I did not realise we would have two Ministers running together on this matter, particularly as the right hon. Gentleman did not stand up.
    Mr. Dalton: He did not stand up in competition with the right hon. and gallant Gentleman, but my right hon. Friend will be glad to say a word on that if it is the wish of the right hon. and gallant Gentleman and his Friends.
    Captain Crookshank: That is the point. My hon. and gallant Friend asked for this information.
    Mr. Dalton: As only one of his points.
    Captain Crookshank: But the right hon. Gentleman the Financial Secretary to the Treasury never got up.
    Mr. Dalton: The right hon. and gallant Member was too quick.
    Captain Crookshank: I quite agree, but I understood the Chancellor was going to answer the questions himself. I only want to make one comment on what the Chancellor has said. I am rather shocked in this Committee to hear the ironical cheers with which any reference to a reduction in the standard rate of Income Tax is greeted. The Chancellor said in all seriousness that he hoped without committing himself to make a further reduction. I see no reason why that should be greeted with ironical cheers by his supporters, because there is no question about it that one of the great measures of assistance which he could give to trade, industry and business generally in this country would be so to arrange financial matters and the expenditure for which he is responsible as to make it possible to have a reduction in that standard rate.
    932
    The right hon. Gentleman said just now, as if it were a trump card in his game, that he had reduced the standard rate from 10s., where it had been when he took office, to 9s. That is quite true. He has done that, but if he succeeded in doing that he has also succeeded in presenting through this Finance Bill to the Commons an expenditure which is far larger than last year.
    Mr. Dalton: We cannot go into that now.
    Captain Crookshank: I agree we cannot discuss that now, but the fact does remain.
    Mr. Alpass: On a point of Order. Is it in Order to refer to expenditure on this Clause?
    Captain Crookshank: I have done so, and I am prepared to justify the statement I have made at any time if it is in Order to do so. I made the point without going any further now, but the fact still remains that if expenditure was brought down to a reasonable level it would be far more easy to secure—[HON. MEMBERS: "Order."] It is perfectly in Order to make a general statement like that. I am not specifying how it should be done. I did so on the Second Reading of the Finance Bill and the Chancellor himself has referred to it in previous speeches. All I am saying now is that if the Chancellor gave as much attention to that side of his business as he does to some others, and cut down expenditure, it would be possible to envisage far sooner a reduction in the present rate of Income Tax. While in present circumstances we appreciate the difficulties in which the Chancellor of the Exchequer is, my hon. and gallant Friend the Member for Holderness is quite right in protesting at the continuance of this high rate of taxation now that the war is well over. That was the only point which I wanted to emphasise, as well as protesting at the way in which any references to a reduction in the standard rate of Income Tax are received by the Chancellor's own supporters. Having said that and having given the right hon. Gentleman the Financial Secretary time to wind himself up to get up to reply to the question which was put to him, I will now sit down.
    Mr. Glenvil Hall: I am sorry indeed that I did not get up sooner, because the

    933
    last thing that I want to do is to engender heat in this Committee. So far we have got on extremely amicably, and I am hopeful therefore that we shall make excellent progress and shall rise a little earlier tonight than has been expected. I would not for a moment do anything which would cause any ill feeling or a prolongation of our discussion. The hon. and gallant Member for Holderness (Lieut.-Commander Braithwaite) asked me if I would indicate why these words are included in Subsection (2):
    "Subject to the provisions of any Act of the present Session relating to transport or electricity…."
    The answer is we have been dealing during this present Session with two Bills, one concerned with electricity and one with transport. Under those Bills certain payments are to be made during the final period before the transfer of the undertakings from their present ownership to a new board or authority. Strictly legally, those payments will not be dividends or interest, and we have in both Bills inserted provisions which lay it down that notwithstanding that they will not notionally or legally be dividends or interest in the hands of the recipient, the Inland Revenue authorities are to assume that they are. Really, of course, they will be income in the hands of the recipients, and the mere fact that the money is not coming out of profits made by the concerns should not mean that the recipients should escape paying Income Tax and possibly Surtax on them. Therefore, in both those enactments we have inserted provisions—and they are not unfamiliar to some hon. and right hon. Members opposite who took part in the proceedings in Standing Committee upstairs—in this particular form of words.
    Mr. Marlowe: I am at a loss to understand the right hon. Gentleman's explanation. I suppose they are money made in virtue of those Bills, but the right hon. Gentleman said that legally and notionally they are not income but are to be treated as income. I do not think that is what he meant. What I think he meant was that they are legally income, and notionally are to be treated as such. The right hon. Gentleman did not explain what moneys these are. Are these compensation payments made in respect of the taking over of these undertakings, or are they, in fact, interest and dividend receipts? What are these sums of money
    934
    to which the right hon. Gentleman referred, for I am quite at a loss to know what sums he was talking about? I am sure we ought to know because it seems to me that this Subsection may very well be related to the subsequent Clauses 4 to 18 dealing with compensation. Are they sums of money of a similar kind, and will he explain what sums they are?
    Mr. Glenvil Hall: I thought I had briefly indicated what these moneys are. The Electricity Bill is going through this House at the present time, and in another place there is the Transport Bill. The financial arrangements of both Bills are fairly complicated, and I should be completely out of Order if I attempted to explain them now. A date is being fixed for the transfer of the assets from their present ownership to either the new electricity authority or the Transport Board, and as part of the winding-up and in order to pay off finally and completely under the provisions of those Bills, certain payments are being made. Some of these will come out of the profits which have legitimately been made and some will not. I think I should be out of Order if I went into a detailed explanation of the Measures in question, but under the law as it now stands the payments concerned are not strictly income in the sense defined by our Income Tax law. They are to be paid out of the profits of these undertakings for the settlement of the final period, and although in the hands of the recipients they are not profits strictly speaking, notionally they are to be treated as if they were profits and will remain subject to Income Tax and Surtax. Reference here is to the provisions in both those Bills which do what I have just tried to explain.
    6.45 p.m.
    Captain Crookshank: The right hon. Gentleman has so telescoped what he wanted to say that he has made it far from clear, and I hope that he can tell us a little more about this. After all, we have to deal with this Bill, and if it contains references to other enactments I cannot believe that it is out of Order to refer to them, at least sufficiently to make it clear what we are doing here. Unless the right hon. Gentleman tells us a little more about what particular payments he has in mind I am afraid that many hon. Mem-

    935
    bers who were not on the committees which dealt with the Bills to which he has referred will have not the slightest idea of what he is talking about. We are trying to make out what this Bill does. The Financial Secretary to the Treasury spoke of the transfer of assets which were paid under the other two Bills, and by which the holders of something or other were being paid off. He said that some of that money came out of profits but was not income. That string of words, which I took down, does not mean anything very much to me. Is the right hon. Gentleman talking about compensation payments? We know that under these Bills certain compensation will be paid, but I take it that that is not being treated as income. If, then, it has nothing to do with compensation, I am still not clear what payments are referred to. Is it a question of something which would correspond to a dividend which would be paid on a certain day if it were not for the fact that the transfer is to take place before that day? If that is so, why does the problem arise at all? I think that the right hon. Gentleman really must give us some further explanation. I hesitate to press him because it is obviously a very technical and complicated matter, but in dealing with this Clause we are entitled to know exactly what kind of money we have to decide about. I cannot believe that it would be out of Order to refer to the other enactments, but if it is, Major Milner, I hope that you will stretch the rules of Order sufficiently to allow enough allusion to them to enable us to understand what is being done here.
    Mr. Dalton: I will, if I may, endeavour to clarify the position without trespasing upon the Rules of Order on the one hand, and without becoming too complicated on the other. The two enactments concerned, one of which is now in another place and the other of which is moving towards another place, relate to the reorganisation of the transport service and of the electricity service. Provisions with regard to taxation would be out of place in those Measures. Since all these Bills are moving forward together, it is necessary to make any such provisions as may fall to be made in this present Finance Bill. The point is that there is a period prior to the date of transfer of the assets—the vesting date as we call it—at which certain, payments are
    936
    due to be made. I do not think that it would be reasonable for me to be expected to go into great detail as to what those payments are, but there are provisions, for example, to prevent excessive payments of dividends, as we judge it to be, in this final period, and so on. There are certain payments due to be made both under the Transport Bill and the Electricity Bill in this limited period before the vesting date. The purpose of this Clause is to provide that those payments, which are essentially of the character of dividends or interest—though it should be made clear that they are of an exceptional character in so far as they are being made in this exceptional period lying between the enactment of the Measure and the vesting date—shall be regarded as income for the purposes of Income Tax assessment. I hope that I have succeeded in making clear the general meaning of this provision. I do not think it would be proper for me to go into an elaborate disquisition on the terms of the other two Bills. We merely desire to save for Income Tax assessment certain payments made in the period between the enactment of those Measures and the vesting dates. I hope that that explanation may be sufficient to enable the Committee to come to a conclusion.
    Captain Crookshank: We will study what the two right hon. Gentlemen have said and, if necessary, will raise the matter again later on, but I do not quite understand why there should be any doubt about the position.
    Mr. Dalton: There is nothing we desire to conceal. It is all perfectly above board, and if there is any doubt perhaps we could have a further discussion on the Report stage. Should the right hon. and gallant Gentleman care to communicate with me or with my right hon. Friend as to the points upon which he would like further elucidation we should be only too glad to seek to give it.
    Clause, as amended, ordered to stand part of the Bill.

    CLAUSE 10.—(Alteration of certain reliefs.)
    Sir Peter Bennett: I beg to move, in page 8, line 1, to leave out from "pounds," to the end of line 5.

    937
    This Amendment deals with a deserving class of persons who are not numerous or powerful, but whose difficulties come to the notice of many of us from time to time. I am referring to that body of elderly people, mainly widows and spinsters, who have been provided for under trusts in which they hold a life interest. Incomes in these cases are not large, and we feel that these people have been badly hit during the last few years. They have suffered from the cheap money policy, and as has been shown by letters to the Press, and many of them have been very adversely affected by the transfers which have taken place, or which will take place in connection with the nationalisation schemes. With a reduced income they have to face the very heavy increase in the cost of living which we know is likely to occur. They cannot touch their capital, and some cases of acute hardship have come to the notice of Members of Parliament.
    In this Budget they are to be further hit by the Legacy Duties. Of course, if the legacy is from a husband or a parent, this is not serious, but a great many of these persons have been provided for by brothers and other relatives. The kind of case I have in mind is that of the elderly sister who has looked after her father and mother and brought up the family, and is then left a small income at the end of her life. If their income is less than £500 a year when they reach an advanced age, such people benefit by being granted an earned income allowance. To that extent they receive further income. This Amendment, coupled with a later one with which it is allied, seeks to give them a little increased income by fixing the old age relief at one-quarter instead of one-sixth. That is only a small amount, but it will increase the income for a class which is really deserving of consideration. I hope the Chancellor will be able to make this small concession. It will not cost much, but it will relieve much hardship.
    Mr. Dalton: I always listen with great attention to the hon. Member for Edgbaston (Sir P. Bennett) because he always states the case with clarity, moderation and persuasiveness, but in this case he is asking for something which would not be reasonable at this stage in the life of this Parliament. To accept what he is asking for would be to put the fraction for age relief in advance of the fraction for the
    938
    general earned income relief. Hitherto in the history of this age relief, which was first introduced in 1925, it has always moved exactly in accordance with the earned income relief. The earned income relief moved down during the war, and it has moved up again since. It was increased to one-fifth in the period immediately before the war and during the war it was lowered to one-tenth. In each case the age relief followed it. In my last two Budgets, when I have been able to propose improvements in the earned income relief, I have always made a corresponding proposal with regard to age relief to keep the two the same. I think that is the right way to do it.
    Here, again, I must not let hope run into prophecy, but I would like very much, not this year but, if things go well, another year, to do something more about the earned income relief. We are now proposing to go back to one-sixth. We are also proposing that the age relief should go back to one-sixth. It now stands at one-eighth. Before last year it stood at one-tenth. In the age relief we are deeming investment income to be earned income for this purpose within a ceiling of £500 a year. The purpose is clear. It is to assist elderly people who have saved money and are living on their savings to have the same alleviation as if they were still earning. It means that, up to £500 a year, an old person is entitled to treat income from investment as it would be treated for tax purposes if it were income from earning. That is right and proper.
    I do not think we should get these two fractions out of line with one another. Although I am sympathetic to the case, I do not believe we should give elderly persons living on investments such preferential treatment as this Amendment envisages. I hope the hon. Gentleman will not press the Amendment on this occasion. I am entirely sympathetic to the idea of gradually raising the earned income relief. I have given an earnest in doing it twice in my last two Budgets, and I hope we are not at the end of the story. I would like to go further as financial circumstances permit in the future. We cannot, however, broadly speaking, give a preference in the age relief in respect of investments as is sought by the Amendment.
    Mr. Marlowe: If the Chancellor of the Exchequer will permit me to say so, that

    939
    was a really departmental answer. What he is ally saying is that there is an ancient custom that the age relief and the earned income relief should march in step.
    Mr. Dalton: It is more than that.
    Mr. Marlowe: When that system was initiated, there was a sound principle for it. The situation has now changed because the people who are earning are able to earn more in many cases than they did before. The object of this Amendment is to meet the case of the unfortunate person who is not only unable to earn more by reason of age, but has also had his or her income reduced because of the heavier taxation. Various Bills, such as the Transport Bill, are going through the House. Such Bills are having a serious effect on the income of many people who are living on income from investments and are beyond the age of earning, or have no hope of earning. This Amendment would meet just those cases. I hope the Chancellor of the Exchequer will not think he is bound by that old precedent of the age relief and earned income relief marching together, and will realise that the time has come for an alteration.
    Mr. Heathcoat Amory: I support the Amendment. The Chancellor of the Exchequer, in his reply, has not done justice to the needs of this section of the community. If any section of the community is having a very difficult time at present, it is the old people. They are hit hard by the rising level of prices and they cannot do much about it. Other people can perhaps adjust their mode of living to the higher prices, but even if these old people are able to work, there is little place in the labour market for the over 65's. It is rather tragic that people who have made every effort to provide for their old age and to make sure that they do not become a burden to their relatives or the State should find themselves robbed of the results of their thrift. I hope the Chancellor of the Exchequer will reconsider this and see whether he cannot do something to afford a really deserved relief to a hard-pressed section of the community.
    Mr. Baldwin: I rise to support the Amendment. There is no doubt that, in view of the decrease in value of the pound, a great deal of hardship has beep caused to people with a limited income They
    940
    cannot earn extra money and have to live on a fixed income. Such people are being hard hit by the Transport Bill, which is reducing their income. This Amendment would give some assistance to them.
    Amendment negatived.
    Mr. I. J. Pitman: I beg to move, in page 8, line 6, after "words," to insert:
    "'seven hundred and fifty pound were substituted for the words 'five hundred pounds,' the words."
    This Amendment does not go contrary to the point which the Chancellor of the Exchequer made in relation to the last Amendment, because in this the rate of the fraction remains the same. It is just that the ceiling after which the relief shall cease to operate shall he raised from £500 to £750. In this connection I think the Committee would like to understand a little more about the old age relief, and I will try to explain it, because the wording is apt to cause confusion.
    Mr. Wadsworth: On a point of Order, Major Milner. Is not the sentence in which the words "five hundred pounds" appear an explanatory one? Is it in Order to discuss it?
    The Chairman: Yes, I think it is in Order to discuss it.
    Mr. Pitman: The point in question is that the relief which is given is to treat the income of old people as if it was earned income whether it is a pension income or an investment income. The ceiling for that is at present £500. The ceiling for earned income is £1,500. The figures are rather confusing, because we are not comparing like with like. For earned income the relief is one-sixth up to £250, which gives one £1,500 For old age relief it is one-sixth up to £83 6s. 8d., giving a total of £500. The basis for comparison is either £250 with £83 6s. 8d. or £1,500 with £500. Whereas these old people get the same fraction—I would like the Chancellor to bear that in mind—those who get their income from investments get only one-third of the relief, but if their income is from pensions they get the whole £1,500. That is one of the things which is particularly unfair about the present old age relief and about which I ask the Chancellor to make an amende for what I regard as past deficiencies in that respect.

    941
    7.0 p.m.
    The right hon. Gentleman has told me in answer to a question that this would cost £3 million. I think there is some error and that that is more than he would find it to be, because we are only talking about one-sixth of what is probably a low rate of Income Tax—three shillings in the pound. We are only talking about 6d. in the pound. The relief is up to £500. After that, you go on taking that off your income. You begin to pay at first 3s., and then 6s., and finally 9s. in the pound. If I am wrong about that, I still think it would be a relief to people who have saved their money and put it away as a pension for their retirement. These people should be treated on the same footing as those who have come into some compulsory or voluntary contributory scheme and who get the money in regular pension form. There is this added anomaly which I would like the Committee to realise. If the money is taken in pension, the limit is £1,500. If it is taken as income from accumulated, personal investments, then it is only £500. We are asking, not that the Chancellor should go up to the whole £1,500, but only up to £750, which is half way to the £1,500.
    Hon. Members may say that it is all very well to benefit people who have put their money away in their working life for their retirement, but that the Amendment would also benefit people who had inherited wealth of some kind, people between the £500 and £750 limits, and who could probably take care of themselves. On that point I would say this: do not let us assume that all money that is handed down is unearned. Take the case of a daughter who has looked after her father and mother for years, probably at a very great sacrifice to herself. She reaches old age with a legacy which her father and mother have left to her on their death. If anybody in the world has earned that money, it is that woman. There will be innumerable cases in this class in which the money has been earned and well earned, and is as much deserved as in the case of men who have put aside year by year sums of money which they have invested to serve as pension.
    Finally, there is the double point which my hon. Friend the Member for Edgbaston (Sir P. Bennett) has made. First of all, the investments on which many of
    942
    these people have relied for their future livelihood have had their income value reduced by nationalisation schemes and by the cheap money policy, which has hit that type of person particularly badly. Secondly, there is the undoubted fact that although this relief of £500 was worth something when it started—I think the Chancellor said the date was 1924—it is certainly not worth that amount now. For all those reasons, I ask the Chancellor to consider giving way on this point of benefiting a very worthy class of the British community.
    Mr. Dalton: This, again, is not a proposal which one would wish in principle to repel. When particular improvements can be made is largely a question of priorities. This year it is not appropriate to make this concession. We have worked out the cost of it very carefully. I have had it carefully checked. It would cost £3 million in a full year and it would benefit a group of 70,000 people—rather a small number. I was surprised, when the figure was given to me, that the numbers were so small. That is on the average. This is a small group of people over a certain age between £500 and £750. It is a clearly but narrowly defined group between those income limits.
    I do not think, now that I am being asked to give money away in various directions—I have already made two concessions this afternoon, and no doubt other demands will be coming—that this matter can stand very high. As I suggested on the last Amendment, it is not as though nothing was being done for these people. On the contrary; both last year and this year we have assisted them by the improvement in the earned income relief. They are not left without any assistance. The earned income relief was at first only one-tenth. We brought it up to one-eighth last year, and I am now bringing it up to one-sixth, without raising the ceiling of £500, it is true, for the age relief. Subject to that, we are certainly lifting it. In those circumstances it would be well to postpone this proposition until next year. When next year comes, we do not know what the conditions may be. I repeat that I do not refuse this as a matter of principle. I merely think that the particular moment is not expedient for making a further alleviation of £3 million a year to this group, in view of the many other claims

    943
    that we have upon us at the present moment. I hope the hon. Gentleman will not press his Amendment and will let us think about it at a later date.
    Mr. Assheton: I was very glad to hear the Chancellor of the Exchequer say that he did not in any way suggest that this Amendment should not be accepted as a matter of principle, and that it is something which he is prepared to look at upon another occasion. It would clearly meet a need which is felt. My hon. Friends have already pointed out to the Committee the hardships from which the smaller income groups are now suffering. They include people who derive their income from investments. They are suffering from a pincer movement of cheaper money and nationalisation on the one hand, which reduces their income, and of higher taxation and higher prices, which make their burden much more severe, on the other The Amendment puts forward a suggestion to reduce the taxation. The Chancellor has told us that he has already done something to relieve the burden on this section of the community. There are 70,000 people in it. The Chancellor of the Exchequer said that that is not a great number, but I suggest that they are 70,000 of the worthiest citizens of the country. They are people who have, by saving in past years, managed to build up a small capital on which they are able to live in their later years, without in any way becoming a burden on the community. I am, therefore, glad to support the Amendment which my hon. Friend moved, and I am glad to hear that the Chancellor is not unfavourably disposed towards it in principle.
    Sir P. Bennett: The Chancellor has twice suggested that he has made concessions, with the inference that the particular classes to which we have been referring are better off. I think that all these concessions mean is that they are less worse off than they would have been. What has happened to them? We all know about the Measures that have gone through, the change in values, and the increased cost of living. They are worse off year by year, in spite of the Chancellor's concessions, and I would not like it to go forth that the Chancellor, by these concessions, is doing something to make their lives easy, when all he has
    944
    done has been to make their lives a little less hard. Their lives become harder as each year goes by, in the net result, and it is the net result that counts.
    Amendment negatived.
    7.15 p.m.
    Mr. Osborne: I beg to move, in page 8, line 6, to leave out "one-sixth," and to insert "one-half."
    The Chancellor has just refused an appeal for £3 million. I am not asking for chickenfeed from him, but for a concession that will cost hundreds of millions of pounds. The Chancellor has claimed more than once, while I have been listening to him, that he is doing a bit each year—from one-tenth to one-eighth, and then to one-sixth. My complaint is that he does too little and does it too late. I suggest to the Committee that the earned income allowance should be increased to one-half, and the maximum relief should be increased from £250 to £500.
    The problem before this country at the present time is one of getting more production. Almost every weekend, senior Members of the Government are making appeals to the working men of the country to increase production. They have large posters on the walls saying "We work or want." The Leader of the House said the other day that we must either export or die, and he made an appeal, saying that in the next six weeks output was vital. I feel that taxation is the greatest hindrance to production which there is in this country, and I ask the Chancellor to consider doing something bold and to take away this hindrance. The Chancellor is like Old Mother Hubbard, who was so careful to keep her accounts squared that her cupboard was bare. I would rather see the Chancellor's account unsquared and his cupboard full, and the only way to do that, in my opinion, is to give a greater incentive to the men who really do the work.
    I can illustrate the effect of the Amendment by the case of a single man who, at the present time, is earning £300 a year. Under the Chancellor's proposals, he will be paying £36 15s. in tax. The one thing which the Chancellor and the Leader of the House want more and more is extra production. Supposing that man works harder, as we want him to do, and that he earns £500 a year. Under the Chancellor's proposals, he must pay

    945
    £111 18s., so that, out of an extra earning of £200 a year, he has to pay £75 in extra tax. There are plenty of representatives of the trade unions on the Benches opposite. I challenge them to deny the fact that the average trade unionist will not put in extra work to earn an extra £200 a y ear if he has to pay £75 of it away in taxation. I wait for that to be denied. I say to the Chancellor that his old-fashioned, Victorian desire to balance his Budget is reacting upon production, and I would much rather see the whole of our accounts for two years unbalanced and production increased rather than go on in this miserable, half-starved way as we are doing at the present time.
    Our present position is no advertisement for Socialism. I have just come back from America. Over there, taxation does not start at the same level as in this country; it is smaller in extent, and there is an incentive for men who will work. I put it to the Chancellor that he himself is the greatest hindrance to the achievement of the policy for which his colleagues are appealing. If he were to accept the Amendment, the man who is today earning £300 a year would pay little or no tax. If he worked harder and earned £500 a year, he would then pay £36 15s.; that is, he would pay £30 15s. more in tax out of his extra earnings of £200 a year. We are much more likely to get the output we need under that system than we are under the Chancellor's old-fashioned, Gladstonian taxation ideas. Somehow the economic pump has got to be primed. Men will not work because taxation takes so much of their earnings—
    Mr. George Thomas: They are working. Does the hon. Member suggest that the working people are not pulling their weight at the present time?
    Mr. Osborne: I do not suggest it; I know it. [HON. MEMBERS: "Oh."] If the hon. Member likes to go to the Minister of Labour and ask him whether the 35-hour working week asked for by the Railway Clerks' Union is a fair one or not, I will stand by the reply of the Minister. Socialist Members on the other side honestly believe that men would work harder for the State than for private enterprise. That is the very basis of Socialist philosophy, but experience has shown that they will not do so, and that we have to give them extra monetary rewards. We
    946
    have to put the profit motive back into the working man's mind. We ought not to tax overtime, but encourage men to work overtime. Therefore, I plead very hard with the Chancellor to consider this case. I know he will not give way, but I do not think that even he would deny that the suggestions made about this Amendment are sound. May I make this last point? With this reduction in taxation, the right hon. Gentleman should appeal to his colleague the.President of the Board of Trade to stop the export drive in consumer goods at the present time, and leave the goods in the shops for men and women to buy. Unless we do so, we shall not get the production we need. At the present time, under the Chancellor's scheme of taxation, all that the working men and women are doing—and I invite hon. Members to deny this—is buying the only thing they can buy, and that is time off—half-a-day for this, and a day for that. The absenteeism figures—
    Mr. G. Thomas: Look at the miners.
    Mr. Osborne: We will look at them.
    The Chairman: I hope the hon. Member will keep to the Amendment.
    Mr. Osborne: I would like to repeat to the Chancellor that if he would reconsider his decision and increase the earned income allowance from one-sixth to one-half, and increase the maximum from £250 to £500, he would get an immense increase in output, which in my opinion would compensate for the adjustment in two years
    Mr. Dalton: This is a completely wild and fantastic proposal. I cannot believe that any serious person on the Front Opposition Bench would give it support, nor even the most Bolshevik-minded members in any section. It would cost £350 million, and would, therefore, completely unbalance this year's Budget. The hon. Member for Louth (Mr. Osborne) said that he wanted the Budget unbalanced, but that was not the general judgment of the House. The criticism to which I was subjected when I budgeted for a prospective surplus of £270 million was that I ought to have made it a much higher figure, because some hon. and right hon. Gentlemen opposite said that a lot of this surplus was not genuine. I do not accept that, but I do not intend to go

    947
    over the arguments now. This proposal would be the most inflationary folly that could be conceived—putting into circulation £350 million. I know the hon. Member has a very dim thought about how to get production, but the proposal is totally irresponsible finance, and is not the kind of thing to which the Government could give consideration for a moment. Never in the history of our national finance, from Gladstone—since he has been mentioned—down to myself, have we ever had an earned income relief of more than one-fifth. In the palmy prewar days it was one-fifth, with a ceiling of £300. I hope, despite the present position, to do rather better than that before we are through Today we have an earned income allowance of one-sixth, with a ceiling of £250. To suggest an allowance of one-half is completely mad and completely out of scale in the eyes of any prudent or reasonable person, and is based on the idea that nobody is producing very much now, which has already been repelled from this side of the Committee. Years later, when we have got over our difficulties, something of this sort might be looked at—
    Mr. Osborne: The Chancellor says that my proposal is fantastic and that it is mad; yet his own Party, at their Conference, have advocated that the Budget should be unbalanced—
    Mr. Dalton: No.
    Mr. Osborne: —when necessary. Therefore, if I am mad I am in jolly bad company for once.
    Mr. Dalton: I am sure the hon. Gentleman is in bad company, but he really must not misrepresent, I am sure quite innocently, what all thoughtful students on these Benches and in the Labour Party outside say, that we should aim at balancing the Budget, over a period of years. All sorts of other people who are not particularly political—economists, students of finance—accept that we should aim at balancing the Budget over a term of years, having a deficit in some years and a surplus in others, according to whether financial conditions justify one or the other; that we should budget for a deficit if there is a tendency towards deflation, and for a surplus if there is a tendency towards inflation. At the present time there is a tendency towards inflation.
    948
    The point is often made from the benches opposite. That means that this is a good year for a good surplus, as I said in my Budget speech. There is an inflationary tendency at present, but we may well face a time when there will be a deflationary phase. Then we shall be looking about for all sorts of excellent reasons for putting more purchasing power into circulation. In such a time, although a jump from one-sixth to one-half would be too quick in relation to other sorts of tax adjustments, it would be a time when it would be quite proper to put more money into circulation by making reliefs in Income Tax, etc. This is not the time. I have gone some distance towards assisting Income Tax payers—particularly those who are hard pressed—in the way of earned income relief, child allowances, and dependent relatives' allowances. These are three points on which I thought that something could and should be done urgently. I have had to balance this with other tax adjustments which have been designed to hold the inflationary pressure in check by obtaining revenue from other sources. I say that this proposal is not only widely out of scale, but is quite lunatic in scope and erroneous in direction. I hope the hon. Member will wait until a better day.
    Mr. Osborne: May I make this point again to the Chancellor? If he says that it is wise, over a period of years, to balance the Budget, to have a deficit in some years and a surplus in others, why, because it happens to be this year, is it proposed that we should have a surplus?
    The Chairman: That really does not arise directly out of the Amendment.
    Mr. Osborne: There is one other point I should like to make. The Chancellor, in reply to my suggestion, has made certain arguments which I think I am entitled to refute. He said that this proposal would release extra money for spending, and would be inflationary. The fallacy behind the Chancellor's argument is that he cannot conceive that we can get out of an inflationary spiral by increasing the goods and services available. All he thinks about is the monetary question. There is the other side, and I appeal to him to get rid of his old fashioned ideas and to look more at the production aspect.
    Mr. Spence: I ask the Chancellor what the Government intend to do, other than move along the lines indicated in this Amendment, to get out of the vicious circle in which we are at the moment. The problem is one of getting the economy of the country balanced. The first step required is to get consumer goods into the shops to stimulate production We cannot get that additional production without some stimulus. I suggest that in a reduction in P.A.Y.E. and an increase in the earned income allowance lies the first step to the required upward stride in the output per man and woman. We are faced with the great manpower crisis in industry. We want more men and women in industry. This Amendment would have the effect of encouraging married women to go back to work, whereas the Clause as it stands works in a contrary way. Take the case of a man earning £6 a week, whose wife thinks she will go back to work, and who earns £4. She finds that 30s. of the £4 goes in tax.
    Mr. Dalton: The hon. Member will remember that in the Finance Act last year we provided, apart from all the other reliefs, a relief of £110 for married women engaged in industry? That was a relief over and above all the reliefs to which she was entitled by reason of her being a married woman, and having a joint assessment with her husband, earned income relief, etc.
    Mr. Spence: Although that relief is £110, it does not relieve the whole weight. If this suggestion were accepted, it would help to get back into industry many people who will not return under present conditions. The Amendment would mean a cut in revenue, but it would also mean a cutting of the knot which is strangling production.
    7.30 p.m.
    Mr. Gerald Williams: I wish to express my amazement at the Chancellor's extravagant language about the lunacy of this Amendment. That must be some reflection on the Chair. This Amendment was put down in the ordinary way and it was selected by the Chair. I was also surprised that the Chancellor seemed to think that it is bad business to lose £350 million this year with a chance of making £500 million next
    950
    year. He did not tell us whether he would make £500 million, but there is a very good chance. However, I would be satisfied if he met us half way and gave us a quarter instead of a half. Private enterprise will not work without an incentive and unless the Chancellor gives us the incentive, he will not get the production.
    Mr. Assheton: Most hon. Members, and certainly all those on this side, are bound to have some sympathy with this Amendment. The Chancellor condemned it in very harsh terms. He used the phrase, "totally irresponsible, lunatic finance," which I shall find very convenient when we come to Clause 49. I think the Chancellor was unduly harsh. My hon. Friend the Member for Louth (Mr. Osborne) was expressing the yearning of all workers to pay less tax on what they earn. That is a very reasonable sentiment. We have all felt this extraordinarily oppressive taxation during the war years, and we hoped that when the war was over we would get much more substantial reliefs from taxation than we have been allowed so far. The Chancellor told us that this proposal would cost £350 million. In view of that, I must confess, that I do not feel myself in a position to support the Amendment in the Division Lobby. Nor would this be exactly the way in which I would distribute £350 million amongst the various classes of taxpayers, if there was £350 million to distribute. I hope the Committee will appreciate the very deep feeling of the people in the country about the high rate of taxation. I am sure that the Chancellor understands it. He was certainly going rather too far in trouncing the hon. Member for Louth in such harsh terms. I hope that next time the Chancellor makes reference to an Amendment proposed from this side, he will use rather more moderate language.
    Amendment negatived.
    Mr. Wadsworth: I beg to move, in page 8, line 20, to leave out "sixty," and to insert "seventy-five."
    I hope that the Chancellor will deal more favourably with this Amendment, which will not cost the large amount of money mentioned on the last Amendment. I am appealing on behalf of a section of the community which we should encourage. No doubt the Chancellor has

    951
    carefully watched the advance of the birth rate figures during the last two years. We should give encouragement in the form of taxation relief to young parents. I do not think it will be doubted that the cost of bringing up children makes life a little difficult for young parents Hon. Members who have children will know the price of shoes, clothes and the other things which are necessary for their welfare. Before the war, the relief for the first child was £60. Under this Bill a similar relief is proposed. I suggest that that is not sufficient in view of the cost of living. I do not know what amount of money is involved, but I am certain that we cannot do too much, on the one hand, to encourage the birth rate to increase and, on the other, to alleviate the problems and difficulties of young parents
    Mr. Glenvil Hall: I am sorry, but I must ask the Committee to resist this Amendment. The £60 to which my right hon. Friend has now increased this allowance is the highest figure which has ever been granted. It makes the allowance equivalent to what it was before the war. That does not mean that in happier times some Chancellor of the Exchequer might not think it well worth while to increase the figure above £60 I only say that what my right hon Friend is doing in more difficult times than 1938–39 is to make the allowance equivalent to that which was given in the last prewar year. Also, we must remember that since that time family allowances have been instituted. It is our view that the increase of £10 this year, plus the fact that family allowances are now being paid, is not unreasonable.
    Mr. Wadsworth: I hope it is realised that the family allowance is taken into consideration when taxing a man's income. Many people believe that the whole of the family allowance is tax free. That allowance is taxed.
    Mr. Glenvil Hall: That is true It is also true that, although family allowances are subject to tax, in most working class households where there are a large number of children the man has to earn a fairly considerable sum before he begins to pay Income Tax at all. Therefore, in most working class households—and it is the working class household which I am sure my hon. Friend desires to help by this Amendment—the man gets the
    952
    benefit of the family allowances and he does not, as some others do, pay tax upon them. The hon. Member asked what the cost would be. In a full year the cost would he approximately £15 million. That may not seem large, but it is a fairly considerable sum which my right hon. Friend at this juncture cannot afford to lose.
    Amendment negatived.
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Mr. Howard: I had an Amendment down to this Clause which presumably was not selected, and I therefore want to say a few words on the question of the earned income relief in support of the case for extending the range of the relief rather than for increasing the rate. An Amendment was discussed on the Budget Resolutions in exactly similar terms to the one which has not been selected, and I think it met with a great deal of support from all quarters of the House. It is particularly because of the manner in which the Chancellor dealt with that Amendment that I wish to remind the Financial Secretary of what was said on that occasion. The Chancellor said:
    "There may be a few million pounds to give away by the time we reach the Committee stage of the Finance Bill, and, if I feel it reasonable, I may be able to bring forward a suggestion."—[OFFICIAL REPORT, 23rd April, 1947; Vol. 436, c. 1094.]
    That was a definite indication that if the Chancellor felt it reasonable, presumably dealing with the earned income allowance, he would bring forward a suggestion. I am therefore rather disappointed that the Chancellor has not so far brought forward any an suggestion for improving the provisions he has made in the Finance Bill by giving up a very small proportion of taxation.
    The argument in favour of extending the range of the earned income allowance rather than the rate is in two parts. The first one, which will of course appeal to the Chancellor in his capacity of collector of revenue, is that it is much less expensive. He himself said on a previous occasion that this small increase in the range would cost but £4 million, while the slight variation in the rate which he himself indicated he thought was preferable would cost £40 million. I was rather surprised when I heard the Chancellor of the Exchequer saying that he thought that a

    953
    relief of taxation which would cost £40 million was preferable to one which would only cost £4 million, but he did say so, and the only point of difference on principle between us was whether it was better to deal with the rate or the range. I want to argue that there is a very strong case for extending the range, particularly in view of the fact that the Chancellor did not find it possible to make any alteration in the standard rate of tax this year.
    7.45 p.m.
    I do not think that either he or the Financial Secretary would disagree with the view that probably there could have been no finer incentive in the whole of the Budget than a reduction in the standard rate of tax. It would have had a psychological effect over the whole country which would have been far in excess of that of any one, two or three individually selected reliefs. He stated, however, that he found it impossible to afford the revenue which would have been required to make any substantial reduction in the standard rate of tax, and he also reminded the House at that time that there was a moral obligation on any Chancellor to increase the earned income allowance at the earliest possible moment, having regard to the circumstances in which the alterations were made by one of his predecessors. Everyone would agree that, having regard to what was said when the adverse alterations in this particular relief were brought into effect, there is no doubt that returning this relief must be a prior charge on any revenue which the Chancellor can forego.
    The fact that he was not able to make any reduction in the rate does, I submit, make it even more important that he should make some gesture as to the desirability of extending the range over which taxation reliefs are given rather than the rates for particular classes. The particular range which I have in mind, the upper range of the carried income relief class, is a particularly important one for two reasons. The persons affected are persons who can probably bring forth a greater hardship claim than almost any other section of the community, and from the far more important point of view of the good of the community as a whole, they probably embrace a larger number of individuals who can indirectly affect the productive capacity of this country than any other range of taxation. Within
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    the higher earned income relief groups are included the key men of our production drive. Their actual production with their own hands at a particular machine may not be directly noticeable, because in some cases they will not be working on machines, but their indirect effect through the leadership which they can give if they are encouraged will, in relation to the economic stability of this country, be second only to the lead which the Government can give. They are, I believe the most important group to whom we have to look today.
    On a previous occasion I mentioned particular groups which covered not merely the managerial class in industry, but professors in universities; and just as the managerial class in productive industry are the people to whom we must look for immediate results, the professors, whether engaged in training the young or in research work, are the people to whom we must look for results in the years to come. This group would also embrace the higher range of civil servants, probably the most overworked class in this country today, and those particular ranges outside industry, in the educational field and in the civil service field, have probably felt the increased cost of living and of taxation more than any other group, because their remuneration has not been improved, as the cost of living has increased, to anything like the same extent. I do not think the Financial Secretary would disagree with that. They have increased costs to bear, but they have had nothing like the increases in income which have been received—and rightly received—by many other classes of the community. In fact, as a result of taxation, they have had definitely less. However, they have not only as great personal responsibility hut, from the point of view of the future of the country, they have possibly the greatest responsibility of anyone in the country outside the Government. I hope, in view of what the Chancellor said in dealing with this matter, both in the Bill and on the Budget Resolutions, that the Financial Secretary will be able to give some suggestion that at a later stage he will be able to introduce some relief.
    This plea is not brought forward at the request of any pressure groups. It is brought forward because I honestly believe relief in this direction can have

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    a finer effect in helping to get us through our economic crisis than relief in any other direction. In so far as my constituents are concerned, there is only one individual I know of who would be directly affected by this. I have not asked his advice about it, but I cannot believe that he would be prepared to come down to this Committee and say that it would make his work of less value to the country if he received rather better earned income relief. The only member of my constituency whom I happen to know personally who comes within this range is the Financial Secretary to the Treasury, and I think he would feel great diffidence in supporting my point of view because he might feel that he had to declare a personal interest in it. However, with his responsibility for looking after the whole of the Civil Service, of deputising on many occasions for the Chancellor, can he really say that he would not work 25 hours a day instead of 24, as he does now, if he had this extra little incentive added?
    Mr. Glenvil Hall: The Committee has listened with great interest to the speech of the hon. Member for St. George's Division of Westminster (Mr. Howard). It is a theme which I know is very dear to his heart. On several occasions he has discussed the point which he has just put before us with such lucidity, and I am afraid he has given me a difficult task in replying, because it is a question of opinion as to whether one should widen the range or raise the percentage. Those in the lower ranges of income, of course, would much prefer to have the percentage as high as possible because it means greater relief for them. Those whose salaries run into the £1,500 to £2,000 ranges would, of course, prefer that the maximum allowance should be higher than it is sometimes, because it means that they do not get the full benefit of the higher percentage as some of them would like to do.
    The highest that the percentage has ever been is one-fifth, I think, in 1931 when tax stood at 5s. in the £ and the maximum of the earned income relief was £300. My right hon. Friend is getting very near to what has been an "all-time high" to use an Americanism; that is; he is fixing it this year at £250 and the percentage at one-sixth. So as far as this year is concerned, he has gone some way to meeting
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    the point of view put forward by the hon. Gentleman. When this relief began in 1920, it was one-tenth with a maximum of £200, and we have moved a long way from that—
    Mr. Howard: The standard rate was not quite so high.
    Mr. Glenvil Hall: The standard rate was not anything like as high, and one-tenth at that time with a maximum of £200 would mean relief on salaries up to £2,000. I admit straight away that the standard rate makes a difference, and when one bandies about these percentages and figures, one has to remember what the standard rate was in any year. All I will lo now is to content myself with reminding the Committee that my right hon. Friend has gone some way towards meeting the point of view put up by the hon. Gentleman and I, with him, live in hope that, as thy financial situation improves and other Budgets come along, my right hon. Friend may find himself able to do even better than he has done this year.
    Clause ordered to stand part of the Bill.

    CLAUSE 11.—(Repayment of post-war credits.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Commander Noble: I rise only to ask for information on a point which arises in regard to the payment of postwar credits, that is the case of a person who reaches the age of entitlement but dies before drawing his credit. At present the beneficiaries under his will cannot receive these credits until they themselves reach the age of entitlement, although the person who has died has himself reached that age. I feel that the deceased may have budgeted in his will for these credits to further the education of his family, or perhaps to support his widow, and that these people may have anticipated these sums coming to them and that, therefore, it would be fair for them to receive the money without having to wait until they themselves reach the age of entitlement.
    I fully realise that the concession to pay old people this money first was an attempt to try to ensure that the most needy were served first, but I feel that because the deceased had reached that age and was entitled to the money, he

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    should be able to leave it to his dependants. I hope very much, therefore, that the Financial Secretary will be able to give us some assurance that this matter is still being considered. I hope also that he may be able to tell us how many people fall into the category to which I have just referred, how much it would cost to pay out these groups, and also how many in this category to which I have just referred would be widows and how much it would cost to pay them.
    Mr. Callaghan: I rise to support what the hon. and gallant Member for Chelsea (Commander Noble) has said. I imagine that when the original decision was taken to make this concession available to old age pensioners, it was not only because, as the hon. and gallant Gentleman said, they are the most deserving section of the community, but also for administrative reasons. They are a section who can be fairly easily segregated, to whom can be applied fairly simple tests, and therefore the Inland Revenue machine can manage to deal with them. However, they are not wholly the most needy section of the community. The benefits fall not only upon the just but upon the unjust, not only upon the poor but upon the rich, not only upon Labour supporters but upon supporters of the party opposite. I hope that when the Leader of the Opposition drew his postwar credit, and draws it again this year, being over the age of 65, he did a patriotic thing and invested it in a National Savings certificate.
    As I say, the benefits fall both upon the just and upon the unjust, but in supporting the hon. and gallant Member for Chelsea I want to make this point, that a group of people who can be just as easily identified, and whose need is frequently much greater, is that of the dependants of a deceased taxpayer of any age Take, for example, the young married man who has been married for four, five or 10 years and, in the early part of his life, has children. He dies and leaves a widow and a young family. They need the postwar credit much more than do some of the categories I have just been enumerating, who have used their postwar credits to invest in National Savings certificates.
    It is that class of person for whom I would ask further consideration. They can be easily identified. A death certificate is the simplest thing to produce, and
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    costs very little. The administrative machine could deal with them very simply. I do not think it will be possible to deal with them in advance of, or even at the same time as, the old age pensioners, who will be dealt with this year, because the machinery is already under way. But we have now finished with the old age pensioners in this legislation, and if my right hon. Friend the Chancellor has to look round for further callers, I would put them high on the list. I hope that he will give some concession to that type of case.
    8.0 p.m.
    Mr. Birch: Although I do not wish to pursue the point raised by the hon. Member for South Cardiff (Mr. Callaghan), I would point out that his identification of the Opposition with the unjust shows that he is a very small satellite in the Shinwell-Shawcross axis. I wish to raise the point, which I raised last year and which is more topical now, of sex equality. Under this Clause, a woman gets a postwar credit at the age of 60, whereas a man only gets it at the ago. of 65. In my opinion, that is indefensible. The postwar credit is a debt which is owed by the State, and the only reason why it is paid out to old people first is because otherwise, they might die without getting the benefit. It is particularly ridiculous to discriminate in favour of women, because, as is well known, the expectation of life of a man is shorter than that of a woman. I raise this point in order to give the Financial Secretary the chance to do better than he did last year when his defence was that women do not work at the coal face. Of course they do not, but what of it? As far as I can see, it has no reference to this particular problem.
    The matter is topical. I gather from the Press that tomorrow the right hon. Gentleman the Chancellor of the Exchequer is to make a statement on the subject of equal pay. We do not know what he will say, and it would be out of Order to discuss it now, but I think it is a 500 to one chance that he will say, "In principle, we agree to equal pay, but there are certain administrative difficulties." There is no logical reason for discrimination between the sexes in this particular case and there are no administrative difficulties. I hope that the right hon. Gentleman the Financial

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    Secretary, if only from the point of view of a dialectical exercise, will get up and explain his point of view rather better than he did last year.
    Mr. West: I wish to support the appeals which have been made for the reconsideration of this matter. Although my hon. Friend the Member for South Cardiff (Mr. Callaghan) said that the benefits of this Clause fall on the just and the unjust, the disadvantages of its application, in fact, fall on the just. The reason why that is so is because the conditions precedent to the payment of a postwar credit are not only that the beneficiary shall have attained the age of 65, but also that an application in writing shall have been sent in. Therefore, if having attained the age of 65, but not having sent in a written application because he believes the post-war credit is, indeed, an investment in national security he subsequently dies, then payment is not made to his estate. I suggest that that is unfair, and that, generally speaking, the type of person who does not send in his written application in due time is either the infirm or the illiterate, or the person who believes that the postwar credit is the reserve upon which call can be made for payment of his funeral expenses.
    Those of us who live in mining valleys know how very careful and keen the older people are to make provision for their funeral expenses. There are many who believe that the postwar credit, if untouched, will be available for the payment of them, whereas, indeed, it is found that because written application has not been made it is not available for that purpose. I know of a case in my own constituency where that belief existed in the mind of an old age pensioner. He believed that he had an investment in national security. When he died, his widow thought the same thing. She was able to find the money for the funeral expenses from other sources. She, who would herself have been entitled to receive payment of the postwar credit had she sent in her written application, also died without having done so, and her daughter who had borne the burden of maintaining her parents was unable to cash the postwar credit with which to pay the funeral expenses of her mother. I suggest that this technicality, depriving the old people of their right of payment of postwar credits, merely because they fail to send in a written
    960
    application after having attained the age of 65, is iniquitous and unjust. I hope that the Financial Secretary will give an assurance that this matter will be reconsidered so that the injustice may be removed.
    Lieut.-Commander Braithwaite: I think that the Debate which has taken place so far shows that there is considerable unanimity in the Committee in the desire to tidy up the matter of postwar credits a good deal more. The Amendments which, Mr. Beaumont, you have not been able to call and which stood in the names of my hon. Friend the Member for Leominster (Mr. Baldwin) and my hon. and gallant Friend the Member for Chelsea (Commander Noble) had as their object to focus attention on what is, perhaps, the most urgent of these problems, the position of the beneficiary. I find myself in accord with the hon. Member for South Cardiff (Mr. Callaghan)—which is unusual for me—in the observations which he made just now. I think he is perfectly correct when he says that the death of the head of the family often creates need among the surviving children. It seems to me that there is every case for the postwar credit being paid to those to whom it has been willed, provided, of course, that the deceased person was just reaching the age of entitlement.
    Mr. Callaghan: I was suggesting that it should be paid whatever the age of the deceased person. I do not want it to be paid only in the case of a man who has reached the age of 65, because a man of that age is not likely to have a young family. My point was that the number of such men who would die at an early age would be so small that it would not cost very much, and that they would be easily identifiable.
    Lieut.-Commander Braithwaite: I was not referring so much to the age as to the need. The Amendments in the name of my hon. Friends which were not called had as their object to bring out that point. One of them proposed to make it possible that, where a person died before reaching the age of entitlement, the beneficiary under the will should be able to claim the postwar credit.
    The Deputy-Chairman (Mr. Hubert Beaumont): The hon. and gallant Gentleman cannot refer to an Amendment which has not been selected.
    Lieut.-Commander Braithwaite: Am I not entitled, Mr. Beaumont, on the Motion, "That the Clause stand part of the Bill," to say that I think that suggestion would be a good one?
    The Deputy-Chairman: The hon. and gallant Gentleman is referring to an Amendment which has not been called and which has nothing whatever to do with the Clause.
    Lieut.-Commander Braithwaite: If I may, I would like to put the general case to the Minister in the hope that he will bear those points in mind.
    The Deputy-Chairman: The hon. and gallant Gentleman has gone a little too far. He may refer only to what is actually in the Clause.
    Lieut.-Commander Braithwaite: Am I not entitled on the Committee stage, Mr. Beaumont, to discuss what we hoped might have been in the Clause?
    The Deputy-Chairman: The hon. Member must confine his remarks to what is contained in the Clause, when speaking on the Question, That the Clause stand part of the Bill."
    Lieut.-Commander Braithwaite: I shall have to retrace my steps. I hope that the whole question of postwar credits will be considered during next year, because I am sure that the points which have been made by hon. Members indicate that there are anomalies. I would like to make one further point which has not been referred to in any Amendment. When a person dies and leaves the whole of his money to his wife, who mw be a good deal younger than himself, it greatly assists in the administration of the estate if the matter can be cleared up and the money distributed. I stressed that point a year ago when there was a Debate on this matter, and the response from the Government was not then unsympathetic. I hope the Chancellor will bear in mind the various points that have been put to him on this question.
    Mr. Alpass: I can understand that the Chancellor may have some objection to paying out postwar credits as hon. Members have suggested, because many of the recipients may have very good means. Their estates may be large, and the amount of the postwar credits they receive may be small compared with their
    962
    income in other directions. Perhaps the Chancellor would consider the suggestion that postwar credits should be paid out immediately when the value of the deceased's estate does not exceed £2,000, which is the figure up to which it has been decided estates shall be free from duty. The reason is that the people who would benefit would be in great need, and very often the deceased persons would have provided in their wills that the postwar credits should be used to compensate the beneficiaries for having looked after them in their illness. I think there is very strong ground for paying out postwar credits when the value of the estate does not exceed £2,000.
    Mr. Baldwin: Although we are not allowed to discuss the Amendment standing in my name, I trust the Financial Secretary has looked at it and will pay due regard to it. This matter was raised on 18th March, and the reply of the Chancellor of the Exchequer was:
    "This matter is governed by Section 26 of the Finance Act, 1946, and not by Regulation."
    In reply to a supplementary question, the right hon. Gentleman said:
    "An opportunity will soon come for debating the merits of the matter, but … this is not a matter which can be handled by regulations."—[OFFICIAL REPORT, 18th March, 1947; Vol. 435, c. 191.]
    This is the first time that I have ever agreed with the hon. Member for Thorn-bury (Mr. Alpass). The point which he made is one which I had intended to raise, and it can easily be met by the Chancellor of the Exchequer. It is the lower range of wealth which is most affected by inability to draw postwar credits. I commend to the Chancellor the suggestion that postwar credits should be paid out in cases where the estates do not exceed £2,000, whether they involve people of 65 years of age or 20 years of age. I have come across cases of great hardship. A daughter has attended to her father and has sacrificed her life for that purpose; the father has died, the daughter has been left to pay the funeral expenses, and because the father died six months before attaining the age of 65, it has not been possible to draw the postwar credits. It is very unfair. The State has no moral right to retain that money until the woman attains the age of 60. If the Chancellor cannot go as far as that, I suggest that in

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    all cases where a person is entitled to a postwar credit and dies before the age of entitlement, if the postwar credit is not paid it should accumulate interest at the rate of three per cent. until it is paid. I hope the Chancellor will indicate that he has listened to these views with sympathy.
    8.15 p.m.
    Mr. George Wallace: I wish to add my voice in support of those hon. Members who have spoken on this general principle. While supporting wholeheartedly the suggestion that postwar credits should be paid to old people, I think the time has arrived when we must give careful consideration to the question of payment in cases of extreme hardship. I do not think anybody would disagree that widows should receive their postwar credits. I have a case at the moment, about which I wrote to my right hon. Friend, concerning a widow who is in receipt of public assistance. She had to borrow money to pay the funeral expenses. I took it up with my right hon. Friend who, as usual, gave an extremely sympathetic reply. I have been informed that £7 11s. is due for Income Tax, and that it will come out of the postwar credit. I hope that will not be done. So far as widows are concerned, it should be easy to indicate where the line should be drawn. There is no difficulty in defining hardship in the case of a worker.
    I would like to mention another case, that of a bed-ridden worker who has had to give up his work because of extreme bad health. He is dependent on his wife. The wife is working hard, and she told me that her husband's only solace in life is tobacco. She is paying the increased price for tobacco and she is willing to do it, but she cannot understand why, while making that sacrifice for the sake of the nation, she cannot get the postwar credits due to her husband. We must give careful and sympathetic attention to this matter. I know that administrative difficulties will arise, but these obstacles must be overcome. I appreciate the point made by my hon. Friend the Member for South Cardiff (Mr. Callaghan) that people regard postwar credits as cashable. It is only natural that when, owing to extreme hardship and financial difficulty, they try to find some-
    964
    thing on which to raise some cash, they genuinely regard these certificates as being in the nature of postal orders which they can cash at the post office. Somehow or other we must find ways and means of assisting these people whose cases have been quoted in all parts of the Committee. I do not think anyone has spoken against the proposal so far, and I hope my right hon. Friend will take due note of it.
    Air-Commodore Harvey: I support the plea of my hon. and gallant Friend the Member for Chelsea (Commander Noble). One can understand the difficulties of the Government in agreeing to pay out postwar credits in bulk. Obviously, they will have to be paid out over a considerable period. But my hon. and gallant Friend's main point concerned those people who attain the age of 65. If a man is ill and is unable to fill in the necessary form, when he dies his widow is not able to receive the money until she reaches the qualifying age. This is iniquitous, and I am sure the Financial Secretary will agree that this is due to an oversight. He should be only too anxious to put it right. I feel that this amount should be part of an individual's estate, and that it should be paid off regardless of class, whether the person concerned is a working man or anyone else. This is a debt of honour of the Government, and sooner or later this money must be paid back. I beg the Financial Secretary to meet this point, because it is wrong that things should continue as they are now. I believe he will meet it.
    Mr. Glenvil Hall: I think that, perhaps, it would not come amiss if I reminded the Committee of the history of these postwar credits, and of what some of us have said and thought about them in previous years. As the Committee know, these credits were instituted by the late Sir Kingsley Wood and at the end of the war, when they ceased, they amounted to no less than £800 million, which is a colossal sum, and one which no Chancellor of the Exchequer at the present time could liberate. That would be a most dangerous thing to do, and would certainly mean inflation if nothing else did. I think everybody realizes that for some few years that must be so. May I say in passing that it is a common misapprehension on the part of quite a lot of people that they will have to wait until they are 60

    965
    if they are women, or 65 if they are men, before they draw their postwar credits. That is, of course, not so. It is hoped that everybody will have been paid out long before many of them reach the age of 60 or 65.
    I was one of those—and I think I have said it in the House—who believed it was a pity that these postwar credits were ever instituted. During the war, I think, most of us—such was the spirit of sacrifice engendered in the nation—were quite willing to pay extra taxation and not to have postwar credits coming to us at some time in the future then unforeseen. But they were instituted, and the nation has to honour its bond. My right hon. Friend was pressed in all quarters of the Committee not to pay out these postwar credits to all and sundry, but to make a start with the old folk. Speaker after speaker said, "We do not mind about the rest, but we do think that the old people, who may not live to enjoy them unless they are paid back soon, should have their postwar credits now." In the end my right hon. Friend gave in to that pressure; the postwar credits for the three years 1941–42, 1942–43, and 1943–44 were paid-out last year, to women when they reached the age of 60 and to men when they reached the age of 65.
    From that time onwards the number of letters from Members of Parliament has been prodigious. Hon. Members in all parts of the Committee have written on behalf of their constituents claiming that the postwar credits should be paid on the grounds of hardship, and we have in this Debate tonight heard from many Members in all quarters of the Committee cases of hardship, in which, on grounds of sympathy, the payment, undoubtedly, should be made. It is quite impossible to know where hardship begins, and who should be paid and who should not be paid. It would be quite impossible for the Inland Revenue to judge what stage hardship has to reach before the postwar credit should be paid out; and, therefore, it is quite impossible for us to take that yardstick or criterion, sympathetic, as we are to many of these cases, and desirous as we are of helping as soon as possible by paying out the postwar credits to people of that kind.
    Then, too, it has been put to us that it makes it very difficult for executors to
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    wind up estates because, unless the beneficiary had claimed his postwar credit and was over 65, if a man, or 60, if a woman, and he also had claimed, the amount cannot be paid over. We have indicated more than once in Debate and at Question Time that that is no real difficulty. What happens is, that under the will of a deceased person entitled to a postwar credit this will go to whoever is entitled under the will to that postwar credit; and if that has to be divided between several beneficiaries—whose title to payment, of course, will depend upon when their turns come—the Inland Revenue is quite willing, and does weekly, divide the amount in the proportion as laid down under the will. Therefore, there is no real hardship there, and there is no reason why in those cases the money should be paid out on the grounds that if it is not, it will lead to difficulties and prevent a final winding-up of an estate.
    The present cost, even for old people—and they number only about 1,750,000—is considerable. Last year we paid out £58 million, and this year it will be £70 million. It is true it comes below the line, but, nevertheless, it is a fairly large sum to put into circulation even for this limited class of beneficiaries. If we did extend the categories, and take in people on the grounds of hardship, supposing we could distinguish what real hardship is, or because a person has to pay the funeral costs of someone who dies and has not the money by him, or for one reason or another—and we get a variety of reasons in the letters that come from Members of Parliament—there is no knowing how large the cost would be in the end. Therefore, my right hon. Friend, with the utmost good will in the world, has to draw the line somewhere, for reasons of cost and for reasons of definition; and because the machine, of course, cannot be strained beyond a certain limit. The Inland Revenue has been working at enormous pressure. It is very short staffed; in many cases it is working in quite inadequate buildings and has what I think is very poor equipment. Yet despite that, it is struggling with P.A.Y.E., with Income Tax, with these postwar credits, and with all sorts of various pieces of work which fall to it at the present time.
    Finally, on the question which was put to me by the hon. and gallant Gentleman

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    the Member for Chelsea (Commander Noble), who was backed up by speakers on this side of the Committee and by his hon. and gallant Friend the Member for Macclesfield (Air-Commodore Harvey), it is true in the case where an individual dies, that unless he has signed his form before he dies, he cannot get the postwar credit which may be due to him, although he had at that time attained the requisite age. But the Inland Revenue is doing something that, I think, will commend itself to the Committee. It is true that, unless application is made by the person entitled, nothing can be done for the beneficiaries after the person has died, unless they happen to be of the prescribed ages themselves; but if he has put in his application, and it has been signed, notwithstanding the fact that he may die without receiving the money, the Inland Revenue pays out to the beneficiaries whatever their age. I think that will commend itself to the Committee.
    Commander Noble: There may be a case of a man who dies entitled to postwar credit over the age before this form comes into being.
    8.30 p.m.
    Mr. Glenvil Hall: That is quite true, and if that is so his beneficiaries cannot get it unless they are of the prescribed age or over. I must remind the Committee that what we are trying to do here is to help old people who otherwise might not live to enjoy this money. Therefore, it would be unfair to other younger people if we paid postwar credits to the sons and daughters or near relatives of people who happened to die. It is the age of the beneficiaries that matters, and not the age of the person who has died, because that would not fulfil the original intention when this concession was given.
    Now let me outline the method of payment of the final instalments which are provided for in this Clause. Application must be made to the tax office. Unfortunately, tax offices are quite unable to search out the recipients to let them know that postwar credits are due to them. The initiative must come from the individual himself; he must apply; and we hope that the forms will be in the post offices by the end of August. Those forms should be filled in, by the beneficiaries, and the sooner the better, because once
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    they are filled in and signed, the money would then go, if they were to die, to those entitled to have it under their wills. That will do away with one grievance which, as I say, is very real.
    Mr. Alpass: How will the people know when the forms are available?
    Mr. Glenvil Hall: Notice will be given over the wireless and in the Press that the forms are available. I undertake now to see that that is done. What we do not want people to do is to write in to the tax offices because they need the money. That only makes work for the tax offices and helps nobody; certainly not the individual who does the writing, because it costs a 2½d. stamp, and until the notice is given over the wireless and in the Press there is nothing which anyone can tell these people which would be of any use to them.
    Major Haughton: The right hon. Gentleman has made it very clear to us that the intention of the Treasury is so-and-so. Surely, it would be possible for the Treasury to cut through some of this red tape, and to get at the thing we all want to get at?
    Mr. Glenvil Hall: We do try to simplify it as much as we can. By common consent, I think, these forms are fairly simple. All the beneficiary has to do is to go to the post office, get a form, fill it in and send it to the tax office, and in due course he will get his postwar credit; he then receives a cheque which he will be able to cash, we hope with the minimum of trouble, and what he does with the money is his own affair. However, I should like to feel that many people will put it into National Savings, because if they do that they may obviate tax deductions later on.
    There is one change in the form this year, which makes it different from last year's form. Last year, the applicant could put on either his national registration number or his old age pension number, as he pleased. This year we are asking them all to put on their national registration numbers, because it is simpler for the Inland Revenue authorities to trace their ages by that means. We hope to have paid out most of this money by Christmas but if any local Inland Revenue office has not paid out the money by 25th December, and hon. Members get complaints from their constituents, I

    969
    hope they will tell them that this is a big job; it covers nearly two million people, the tax offices are greatly understaffed, and these people will get their cheques if only they wait patiently. I think I have covered most of the points that have been raised—
    Mr. Birch: What about equality of the sexes?
    Mr. Glenvil Hall: There was one point raised by my hon. Friend the Member for Thornbury (Mr. Alpass), who asked if, in addition to the categories covered, people who died leaving estates of less than £2,000 might be included. I do not think he realises the immense amount of inquiry and work that that would entail, because the Inland Revenue authorities do not know with that exactitude how much a particular individual has left, and it would be very difficult to find these things out. We do not want to make this too complicated, or to throw more work than we need do on the Inland Revenue authorities. I think I have now covered most of the points—
    Mr. Birch: Would the right hon. Gentleman deal with the equality of the sexes?
    Mr. Glenvil Hall: I will answer that, although, if I may say so, the hon. Member put the question, to me in his usual aggressive way. I think it has already been answered—
    Mr. Birch: But it has been answered so badly.
    Mr. Glenvil Hall:—and it occurred to me that it would only be wasting the time of the Committee by answering it again. The reason women were taken at 60 and men at 65 was because in the early days, as the Committee will remember, we anchored this to the old age pension. A woman gets her pension and her book at 60, and we could tell her age by that, but the man does not get it till 65. That was the real reason. If the hon. Member wants to equalise the sexes, I do not know whether he would take the women up to 65 and not pay any woman out now at 60, or whether he would bring the men down to the age of 60.
    Mr. Birch: Pay both at 62½.
    Mr. Glenvil Hall: We began by paying out the women at 60 and the men at 65. In this Finance Bill we are now wiping out
    970
    those ages completely by making a final payment to them all. Perhaps next year or the year after—it depends how the country proceeds under the beneficent rule of a Labour Government—or as we move down the years, my right hon. Friend the Chancellor will be paying out to women of 50 and men of 55; I do not know, but I look forward to that time with some pleasure, because presently my own turn will come.
    Mr. Linstead: Has the right hon. Gentleman had any actuarial investigation which would enable him to give a figure of what it would cost annually, over the next year or two, if repayment of postwar credits were made from the deceased to everybody to whom they were owed? Is a large sum of money annually needed to cover it?
    Mr. Glenvil Hall: I speak now, of course, subject to correction, but I think I am right in saying that it would be almost impossible to make that calculation, because such a number of variable factors would have to be taken into consideration: We should have to prophesy at what ages people would die, how many there would be, the extent to which they were entitled to postwar credits, and the possible amount. I think it would be very difficult to calculate that, and any attempt to do so would be a mere estimate only.
    Mr. Linstead: Surely, that sort of calculation is being made every day in Government actuarial offices?
    Mr. Stanley: I rise only to deal with one point in the reply of the right hon. Gentleman. I do not think he gave a satisfactory answer to the point that was raised by my hon. Friend the Member for Leominster (Mr. Baldwin), by the hon. Member for Thornbury (Mr. Alpass) and by the hon. Member for South Cardiff (Mr. Callaghan).
    Mr. Gallacher: Let this side speak for itself.
    Mr. Stanley: Certainly, no one would ever presume to speak for the hon. Member for West Fife (Mr. Gallacher). Indeed, it is not only a question of not presuming; he would not have an opportunity, because the hon. Member is always speaking for himself. It seemed to me that those hon. Members to whom I have referred put a serious point to the right

    971
    hon. Gentleman, and one which merits serious consideration. Nobody in any part of the Committee suggests that there should be a great extension of the repayment of postwar credits at this time. Everybody accepts the Government's argument that that would be inflationary to the highest degree. All we want to know is wheher it is not possible to extend the repayment to cover certain other limited cases of hardship. The selection of the old age pensioners for the first repayment was on the ground that because of their age they would suffer a pecuniary hardship unless they were paid out soon. We say that there may be other far more limited cases where hardship requires some early repayment to be made. I accept the right hon. Gentleman's statement that the duty cannot be put on the Chancellor of the Exchequer and the Inland Revenue Department to make payments wherever hardship exists. There could not possibly be a roving commission of that kind. The question is whether there is some limited and quite specific case where hardship is almost bound to exist and where limited payments might be justified. It seems to me that the case of the man who dies leaving an estate under £2,000 is perfectly specific, is bound to be limited, and is a case where hardship will almost certainly arise. I think that that case deserves more serious consideration, and certainly a more serious answer than was given by the Financial Secretary.
    I cannot accept the Financial Secretary's first argument that it would be impossible to increase the strain on the Inland Revenue Department. How can that argument be used in view of Clauses 14 to 18, which I should have thought double the work of the Inland Revenue for very little purpose? I stand aghast at his effrontery. Nor can I accept the argument that it would be impossible to find out the number of cases of this kind. Surely, some return has to be made of these estates to satisfy the Inland Revenue Department that they do not exceed £2,000, and that, therefore, no duty is payable on them. I am not pressing for acceptance of this idea now, but it would seem that this is a case where we might have some assurance from the right hon. Gentleman that serious consideration will be given, and that some attempt will
    972
    be made to find out what it would cost. If the cost is not prohibitive, then the possibility of it being introduced at some future date might be admitted. If that can be done, we might be able, at not too great a cost, to meet some cases of very real hardship.
    Mr. Baldwin: There is one question which has not been answered. I asked whether the right hon. Gentleman did not think it fair to add interest to postwar credits, at the Post Office rate of interest, where payment would normally have been made except for the hazard of death. It seems unfair that the State should hold money for an indefinite period of years without paying any interest.
    8.45 p.m.
    Sir William Darling: In supporting my hon. Friend the Member for Leominster (Mr. Baldwin) in his question, may I add a further question? Would it be possible for the Chancellor of the Exchequer to consider a commutation policy whereby, if I were willing to do so, I could, instead of taking the £65 later, take £25 now and be done with it? That suggestion is in accordance with assurance practice, where there is what is called a paid-up policy. If that suggestion were adopted, it would give an indication of the public's confidence in His Majesty's Government.
    Mr. Dalton: I am sorry that I was not present earlier, but this was due to the fact that I was getting some light refreshment to carry me on for a long time to come. I shall be very happy to read tomorrow all the suggestions which have been made as to the next stage in repayments. We have now concluded the first stage, and I think we have had the country and the House with us in giving first preference to the old people. The question now arises: who next, and in what order? We must ask for a reasonable minimum of administrative complexity. The right hon. Gentleman the Member for West Bristol (Mr. Stanley) was perfectly right. We cannot go picking and choosing on some ill-defined basis of hardship, with every Member pushing his own cases. That would cause endless correspondence, and so on. I cannot give any indication that I can go further this year. I am having to watch inflationary pressure pretty closely and, if anything, I may have erred on the side

    973
    of giving too much rather than too little, from that point of view.
    I was anxious to close the category of repayment to old people, and that we have done. I cannot promise anything more this year, and, indeed, I must resist this proposal for an extension this year; but in planning what we shall do next year, I will take into account any suggestions made. I offer this thought without any commitment. There is something to be said, having paid off the credits of all the old people—and any person reaching the age of 65, if male, or 60, if female, will automatically become entitled to all five years; that will run on—at first sight, at any rate, for relating future payments to the age of the credits, and beginning by making a repayment of the credits, accruing to whomever they may accrue, in the first year in preference to later years.
    I am throwing that into the pool of thought in our discussions for next year. It will be administratively simple, and everyone entitled to something will get something in the first year. It is the simplest plan of all, because all the credits are stamped with the year of issue. They are not stamped with the age of the person who is entitled to the credit, and that is the snag underlying the suggestion. When we first made provision for the first three years of credits for the old people, the Inland Revenue Department had to guess what the amounts would be, and we found, as I explained, that we were badly out, and that more than twice as much was held by the old people as we had supposed—£56 million as against £26 million. The age of the beneficiary is not stated on the postwar credit certificate, and, as I have said, it is easier to take the age of the credit, and that is the plan to which I should have a certain attraction. Certainly, we will consider other proposals, including the last and most hopeful proposal made from north of the Border, that instead of waiting for the full credit of £65, the hon. Member for South Edinburgh (Sir W. Darling) should be able to take £25 down now.
    Sir W. Darling: I would take it tonight.
    Mr. Dalton: I will give that very careful consideration.
    Clause ordered to stand part of the Bill.

    CLAUSE 12.—(Continuance of allowance for repairs.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Viscount Hinchingbrooke: It might be thought that because I have an Amendment down to omit this Clause, I am in favour of withdrawing a very useful allowance operating to the benefit of small landlords and tenants who are entitled to it. I assure the Committee that that is not the case. If hon. Members will look at the Order Paper, they will see that I have put down an alternative Clause. I cannot now formally move it for technical reasons, but I can refer to it in the course of what I have to say. I would remind hon. Members that this history goes back to the Finance Act, 1918, where, in the famous Schedule A, in Paragraph 7, there is set out for the first time in Income Tax law the statutory allowances which are given for repairs of house property. Paragraph 7, which I will not quote in full, states:
    "Where the tax is charged on annual value estimated otherwise than by relation to profit then the following provisions shall have effect:

    (a)…..

    (b) In the case of assessment upon any house or building the amount of the assessment shall for the purposes of collection be reduced—

    (i) where the owner is the occupier. … by a sum equal to one-sixth part of that amount.

    (ii) where the tenant is the occupier. … by a sum not exceeding one-sixth part of the amount as may be necessary to reduce it to the amount of rent payable by him."

    That enactment went on until the end of the first world war, and the subsequent period of inflation, such as that which we are now going through—
    Mr. Dalton: It was much worse then.
    Viscount Hinchingbrooke: I am a little nervous of that remark, because it may mean that the Chancellor does not intend to look with a friendly eye on my new Clause. Then came the Finance Act, 1923, Section 28 of which amended Schedule A in one important respect. It excluded the one-sixth to which I have referred, and put in what was called an authorised reduction. Previously, it was one-sixth. The 1923 Act substituted an authorised reduction which varied the amount of the allowance

    975
    according to the size of the property. It reads:
    "(3) The authorised reduction.. shall be:

    (a) Where the amount of the assessment does not exceed forty pounds.

    A sum equal to one-fourth part of the amount of the assessment.

    (b) Where the amount of the assessment exceeds forty pounds but does not exceed one hundred pounds.

    A sum equal to one-fifth part of the amount of the assessment.

    (c) Where the amount of the assessment exceeds one hundred pounds.

    Twenty pounds, together with a sum equal to one-sixth part of the amount by which the assessment exceeds one hundred pounds."

    That has ruled until today. Clause 12 of this Bill seeks to perpetuate that situation. I suggest that just as there was a period of inflation after the first world war—and in the Finance Act, 1923, it was recognised that the former allowance was insufficient—so the same situation prevails now. Small property owners and tenants are finding it increasingly difficult today to get their holdings repaired, and to pay for them out of the amount of the allowances. What do these allowances amount to? In the case of the under £40 assessment, it is £10; in the case of the £40 to £100 assessment, it is £8 to £20; in the case of the over £100 assessment it is £20, plus the one-sixth to which I have referred. I am not tied to the actual words of the Clause I wish to move later, but it makes an attempt to improve all round on the scale. The assessment should be £45 instead of £40, and on that there should be an allowance of £15. On the £45 to £120 assessment, there should be an allowance of £11 to £30. On the over £120 assessment there should be an allowance of £30, plus one-fifth instead of one-sixth as before.
    What was fair in 1923 is really not fair today. It is true that house owners and tenants who had the right to put in for these repair allowances can make a maintenance claim, under paragraph 8, which follows the paragraph in Schedule A to which I have referred. The point is that in these days when there are so many complex forms for people to fill in, and send to Government Departments, anything that can be done to alleviate the burden on small people ought to be done. What have we done in our own case? We have said that the first £100 of our
    salary shall go in automatically for expenses. We have recognised that it is not worth the trouble of estimating expenses up to £100. The Finance Act, 1923, does the same thing. It gives the allowance which is clear of the maintenance claim, and a person has to prove repair expenses above that allowance if he wants to get it.
    The Deputy-Chairman: The noble Lord cannot deal with personal incomes. That would be out of Order.
    Viscount Hinchingbrooke: I was talking about the maintenance claim for house property repairs. I used the income of Members of Parliament by way of illustration.
    The Deputy-Chairman: So long as it is an illustration, it is in Order.
    Viscount Hinchingbrooke: I have passed from it, and I hope hon. Members see the analogy between the two. I am trying to save people the trouble of putting in a maintenance claim, just as we ourselves are saved the trouble of putting in an expenses claim. We have suffered some diminution in the value of money since 1923, and I believe that the time has come to improve the house repairing allowance for all owners of property and all tenants who have the right to make the claim.
    Mr. Callaghan: The noble Lord has mentioned two categories, the case of the owner-occupier and the case of property which is let. I should have thought that there was not much case for doing what he wants to do for the owner-occupier, because the assessment itself has not been increased since 1935 or 1936. Had the assessment been increased, there might have been some case for arguing as the noble Lord did, but he will know that in the provinces the owner-occupier usually occupies a house which is assessed at something far below its annual value. I can recall cases where houses that could be let for £80 or £100 per annum were assessed at an annual value of £20 or £25. It follows automatically that the repairs allowance which is based on the allowances is so much lower. If they were assessed at £100, they would be getting a much higher repairs allowance. Where properties are let and the annual value more frequently is represented by the assessment it is about eight years

    977
    since any substantial repairs were done to a number of these properties. That means that they ought to be repaired now, and should have been repaired some time ago. It also means that for eight years owners have been drawing the repairs allowance which they have not expended. He cannot have it both ways. If they have not done the repairs, they have not expended the repairs allowance which is automatically given under the assessment. In those cases, it means that many people have drawn up to twice at least the annual value of the property in repairs allowance which has not been spent, and which is a reserve which they could have accumulated over that period. For those reasons, I would say that the noble Lord's case falls short, and is not a very strong one.
    9.0 p.m.
    Mr. Glenvil Hall: This Clause which the noble Lord seeks to delete in its entirety continues, as he said, the present scale of allowances for repairs under Schedule A. I think that he gave to the Committee the scale which is laid down, and which we seek to continue. It was first introduced in 1923–24 in substitution for a previous uniform scale of one-sixth, and, as the hon. and learned Member for East Leicester (Mr. Donovan) said, even that was not the beginning of the story. The Finance Act, 1923, laid down a scale over a period of five years, and since then it has been renewed for varying periods, the last occasion being, I think, in 1942 when it was renewed for five years. It, therefore, comes to an end now, unless we make provision in this Act for its continuance, and we are doing that for an indefinite period—that is until Parliament otherwise determines.
    As the hon. Member for South Cardiff (Mr. Callaghan) sail, the people have been getting this allowance automatically, and through no fault of their own the great majority of them, because of the fact that few if any repairs have been possible during the war, have been getting it for at least seven years, and they have had no repairs to set off against it. It is true that possibly when they come to do their repairs, the cost of them will be very heavy, and we must not forget that; but I think it would be true to say that in the old days the scale, such as it was, did on the whole err on the generous side—people took it and quite a lot of them did not do much in the way of repairs for the allow-
    978
    ance which they got. I would remind the noble Lord and the Committee that where an owner could show that, over an average period of five years, the amount expended was greater than the scale allowance to which he was entitled and which he got, he could put in a maintenance claim and get it.
    I cannot deal with the new Clause which the noble Lord hopes to move when we reach that part of the proceedings, but I would say to him and to the Committee that my right hon. Friend cannot accept the deletion of this Clause now, although he realises, as I think the Committee realises, that this is a matter that has to be looked at at some time, as it may well be that these allowances do not fit the situation today. We are 20 years on from the time when they were elaborated, and many values have changed, but we cannot spare the time to go into that now. It is quite impossible for my right hon. Friend to accept this Amendment to delete this Clause. Further than that, at this juncture, I will not go, because much the same ground will undoubtedly be covered when we come to deal with the noble Lord's Clause which will be taken later in the proceedings of the Finance Bill.
    The Deputy-Chairman: If the right hon. Gentleman desires he can deal with the points contained in the new Clause which have been referred to by the noble Lord.
    Viscount Hinchingbrooke: The Clause may not be called later.
    Mr. Glenvil Hall: In that case, if you are intimating, Mr. Beaumont, that it is not your intention, or the intention of Major Milner to call this new Clause when we reach that stage, all I can say is that my right hon. Friend cannot accept it even if it is called and we resist the proposal to delete this Clause. We want to retain the present position at any rate for some time until Parliament may look at this.
    Viscount Hinchingbrooke: I appreciate the right hon. Gentleman resisting my proposal to leave out this Clause as it only appeared on the Order Paper this morning and for that I apologise. He was good enough to say that this whole matter would have to be looked into some time, and can I take it that "some time" will be between now and the Report stage?
    Mr. Dalton Mr. Dalton indicated dissent.
    Viscount Hinchingbrooke: Then before next year will it be possible to have a departmental committee sitting on the subject and looking into it? If I could have the Chancellor's assurance that this matter will be considered between now and next year, I should be willing to withdraw.
    Mr. Dalton: I will give that assurance with pleasure. Ever since I held my present office I have always given instructions that these matters which are raised during the course of a Debate should be a matter of careful inquiry during the ensuing year, and often we have been able to accept something which has been put up before us. Without any commitment to accept I will give a commitment to examine this between now and next year.
    Clause ordered to stand part of the Bill.

    CLAUSE 13.—(Relief from balancing charges for certain cotton spinning concerns.)
    Mr. Stanley Prescott: I beg to move in page 9, line 33, after "spinner" to insert:
    "or
    (ii) any cotton spinner or cotton spinning Concern affected by the arrangements sells machinery or plant and replaces such machinery or plant by improved machinery or plant ordered in such a manner as to satisfy the conditions requisite for the making of a re-equipment grant."
    This Amendment has been put down in order to try further to assist the Government's proposals for the regrouping and the re-equipment of the spinning section of the textile industry. It will be within the recollection of the Committee that on 30th April the President of the Board of Trade announced the basis upon which the Government were prepared to make a grant to the spinning section of the cotton industry if mills were regrouped and there was a certain amount of re-equipment. It was proposed that under certain circumstances the Government would make a grant of 25 per cent. The two main essentials were that some units in the spinning section would regroup themselves and carry out a very large proportion of re-equipment. The whole idea behind the scheme was that the industry would modernise itself and make itself more capable of competing under present conditions.
    980
    The Chancellor of the Exchequer in his Budget Speech referred to this matter and in particular to the Clause which we are now considering. He said on 15th April:
    "I propose to reduce to half the standard rate the Income Tax charged when, as a result of such amalgamation, machinery or plant is sold for more than its written down value."—[OFFICIAL REPORT, 15th April, 1947; Vol. 436, C. 77.]
    As I understand it, this Clause is intended to carry out the statement which the right hon. Gentleman made during his Budget speech. Before turning to the actual details of the Clause I think I should refer to the announcement of the President of the Board of Trade on 30th April, to which I have already briefly referred, and in Which he announced the procedure which would have to be followed by units in the spinning side of the textile industry in order to avail themselves of the Government's proposals and obtain the Government grant. There were set out the main basis that the industry would have to follow, namely, regroupment of units, modernization and so on, and then also this paragraph appeared referring back to the Chancellor's statement:
    "The Chancellor of the Exchequer announced in Parliament on 15th April his intention of reducing to half the standard rate the Income Tax charged when, as a result of the formation of approved amalgamations, machinery or plant is sold for more than its written down value. The procedure for dealing with applications for approval, for the purpose of obtaining this concession, will be assimilated as far as possible to the procedure outlined above.—[OFFICIAL REPORT, 30th April, 1947; Vol. 436, C. 253.]
    The Chancellor and I will be in entire agreement I am sure on this, that it is essential that there should be some reorganisation of the spinning side of the textile industry and some degree of modernisation. Tonight I am dealing with this particular Clause which affects the financial arrangements and adjustments when amalgamations which the Government desire take place. Clause 13 permits a reduction of tax when a balancing charge takes place due to an amalgamation between certain units in the spinning side of the industry. The criticism of my friends and I in regard to this Clause is that it does not go far enough and we want to extend its provisions. If my reading of the Clause is right a reduction in tax and the concession which that means can only be obtained if the sale of machinery is between the units

    981
    which are forming the amalgamation. If I am wrong in that, I would ask the Chancellor of the Exchequer to correct me here and now.
    Mr. Dalton Mr. Dalton indicated assent.
    Mr. Prescott: I understand then that I am correct. The concession which we propose would be in the interests of industry, of Lancashire and of the nation. It is agreed on all sides of the House that a great deal of money has to be spent on the textile industry, and I think it will also be agreed that the financing, re-equipment and modernisation of the industry will tax the ingenuity of Lancashire and its industrialists.
    My submission to the Committee is that it may happen that when an amalgamation is taking place it may be desirable that old machinery like spindles and so forth should be sold quite outside the ambit of the amalgamation in the interests of the efficiency of the new set up. In other words, such machinery should be got rid of and should be replaced by new and most up-to-date equipment. This Amendment is designed to affect this and if such sales take place the owners of the machinery will be entitled to obtain a concession which is otherwise denied to them under the terms of this Clause. Neither I nor my hon. Friends advocate the sale wholesale overseas of our textile machinery. That is a matter for very tine consideration to determine to what extent it is desirable. I want the Chancellor to appreciate this that we believe that charity begins at home. We must look after our own industry in Lancashire first, and this Amendment is designed to that effect. I think it cannot be denied that in some of these new groups which will be formed it would be in the interests of the group and of the industry to get rid of some of the old plant and machinery and re place it with new plant and new machinery. There is a differentiation whether the sales are effected in this country or overseas, but we say that there can be no detrimental effect on the re-grouping, because under the Amendment which I am moving that old machinery must be replaced by new machinery in order to obtain the benefit of the concession. Before anything at all can be done in this matter a certificate of the Board of Trade through the Cotton Board will have to be obtained approving the whole scheme.
    982
    9.15 p.m.
    Therefore, I do not think there can be any risk in this Amendment. There is no question of denuding the mills of Lancashire by selling capital assets overseas. The desire is to further the modernisation of the mills and we suggest to the Chancellor of the Exchequer that that desirable process will be furthered if the concession is granted. This is a rather important Amendment. If it is accepted it will considerably further the ambitions of the right hon. Gentleman and the President of the Board of Trade in regard to the Lancashire cotton industry. I regret to say that although I have done my best in the highways and byways, I have not been able to obtain any estimate of what would be the cost of the additional concessions which I am now proposing. Certain it is that it would be nowhere near the magnitude of the sum that has been suggested. It would be very small indeed. The Amendment would be of great assistance and would give much greater flexibility in the formation of amalgamations. It would not be abused, because the matter would be under the Cotton Control Board and the President of the Board of Trade. There are many other aspects of the matter on which I would like to speak, but I conclude by saying that I hope the right hon. Gentleman will see his way to accept the Amendment. It is a bona fide Amendment which will have the effect of revivifying the spinning section of the textile industry.
    Mr. Walter Fletcher: I support the Amendment, and in doing so would say how difficult it is to add very much to the extremely clear, cogent and well-informed argument which has just been put forward by my hon. Friend the Member for Darwen (Mr. Prescott). Certain things must be added. I believe that the omission from the Clause as drafted of provisions similar to those of the Amendment goes back to the period after the last war, when large quantities of cotton textile machinery were exported overseas from Lancashire and were not replaced by new or by any other machinery. That was a great blow to the Lancashire textile industry. Here, as has been pointed out, we are safeguarded in every possible way against it. In the Amendment we try to make clear and bind down everything, so that although sale to third parties is not precluded under the reorganisation scheme, new machinery has

    983
    to take its place. If any argument is to be based upon the old, out-worn idea that this will do harm to the Lancashire cotton industry, it cannot carry any weight.
    If the Amendment is not accepted, it must be clear to the Committee that a sort of congestion, a sort of spindle constipation will be created, in the industry, which will be extremely dangerous. If various groups argue among themselves as to the best way to carry out this highly desirable and Government-impelled amalgamation because they cannot find businesses capable of and fit for amalgamation, they will be frustrated in their desire to do exactly what the Chancellor and the President of the Board of Trade wish them to do. I am aware that there are many overseas buyers who might wish to buy this machinery. We are thinking in terms of an export grant. Failure to accept the Amendment will tend to stop the export drive in this type of cotton machinery. Textile machinery is sold competitively all over the world. Some countries which are backward in textiles will undoubtedly wish to buy this machinery. If it is laid down absolutely hard and fast that this machinery can be sold only in a very restricted area, it might well have an influence upon the factors which make amalgamation possible.
    I urge upon the Chancellor, for the reasons which have been put forward, the very cogent ones that we have heard already, the he would give great satisfaction to everybody in Lancashire, as well as those who are moving the Amendment, it he would not only say that he will look at it—which presupposes that he has not already looked at it—but that he will go a little further and, in contradistinction to his treatment of my hon. Friend the Member for Louth (Mr. Osborne)—whom the Chancellor slew with his mouth—will get up and say that he welcomes the Amendment. We hope he will say that he realises that it is constructive and that it still gives full power for the Minister to step in, should there be any abuse. If he will do that, he will have returned from the meal which was so necessary to him with considerable post-prandial satisfaction.
    Mr. Dalton: I think all Members from Lancashire will agree that the Government have done a very great deal already towards helping the cotton industry to
    984
    modernise itself, and to get back on to what we hope will be a firm foothold for the future. The Amendment only illustrates that the more you do, the more people ask you to do in addition. The President of the Board of Trade and I have had many consultations on this matter. We are both most anxious to assist Lancashire to help itself, particularly in the spinning section, where the chief weakness at present lies. If we can get the spinning section into better and more up-to-date units, much else will follow.
    First of all, there was a proposal for a 25 per cent. grant in aid of the cost of re-equipping the spindle section. It was a very exceptional grant. We made no such offer to any other industry. My own hesitation in agreeing to the proposal was lest I should be pressed by every other industry to do the same for them, which I should not be prepared to do. Lancashire was singled cut for exceptional help by the Government We proposed this 25 per cent, subsidy, and this is to be granted the Committee will appreciate, in aid of the cost of new machinery, in groups or concerns that control more than 500,000 spindles. It is limited to groups of that large size. I thought I had done pretty well for the cotton industry at the expense of the taxpayers.
    Then, representations were made—I make no complaint about this, I merely relate it to the Committee, so that hon. Members can get this matter in its proper setting—that there were a number of small groups or concerns which were having difficulty. They were unwilling, or unable, to come together in large aggregations, so as to become eligible for the 25 per cent. subsidy unless some further assistance was given. Therefore, I agreed with my right hon. and learned Friend the President of the Board of Trade that there should be further assistance given, as is proposed in this Clause, and that we should provide that, as an incident of amalgamation—and I emphasise that—and not merely with a view to assisting modernisation generally, but in order that larger groups shall be formed, we should give this relief with regard to the balancing charge, where machinery had been sold for more than its written-down value, and that the balancing charge should be reduced to one-half of the standard rate. That was the second concession, the first being the provision in regard to amalgamations. I think the

    985
    Government have done pretty well with these two concessions to the spinning section of the Lancashire cotton industry. The hon. Member for Darwen (Mr. Prescott) and I used to discuss this matter in the last Parliament, and both of us are agreed that the Lancashire spinning section wants a bit of "bucking up," and we agreed that we were on common ground there.
    Mr. Prescott: It depends what the right hon. Gentleman means by "bucking up."
    Mr. Dalton: Well, I think we can guess. We have given two leads in assistance to Lancashire, and, really, if I thought I could take the advice of the hon. Member, I would do so, but I will not say that I will consider it. I think we have already gone far enough, and we are now being asked to add a third inducement, which is not limited to large groups, nor even limited to the written-down value of plant incidental to amalgamation. We are now being asked to go into the whole wide field of modernisation generally, and, although the cotton industry needs modernisation, there are a good many other sections of industry which need it. If I conceded this Amendment, I should be led into the much wider field of extensive modernisation everywhere. I do not think that it is reasonable that that should happen. It would be reasonable for every other section of industry to ask me why I should do any less for them than I have done for the cotton industry, and I think that this is where we must draw a line. We have made two very substantial commitments. There is no additional finance in this worth speaking of. It is not that this Amendment would cost us much more directly, but it is widening the field in such a fashion that I should not be able consistently to resist claims for the subsidisation of modernisation everywhere throughout the whole range of industry. That we are not prepared to do. For that reason, I suggest that the hon. Member should reflect that this has been a good Government to the cotton industry, that it has done more for it than any other Government, that it has put up more ideas and more money, and that he should feel grateful for all that, and not press his Amendment.
    Mr. Prescott: The Government certainly have done one thing for the cotton indus-
    986
    try which no other Government ever did. They stopped it completely, because they could not provide the coal and could not provide the power to run the mills. I concede that point entirely. I do not think that anyone could have moved this Amendment in a more friendly spirit than I have done. I agree that in the last Parliament I have met the right hon. Gentleman in his room and have talked over matters with him. The right hon. Gentleman talked Socialism to me, and I talked commonsense to him. Let me assure him that I shall never reveal anything he said to me in confidence. I moved this Amendment in a very friendly way, but I do not think the Chancellor's reply was couched in such terms as it might have been, in view of my speech and that of my hon. Friend the Member for Bury (Mr. W. Fletcher). I believe that, if the Amendment were accepted, it would further help in amalgamations, and that is why it was moved. The right hon. Gentleman has said that it would open the door to the general modernisation of industry. Certainly it would, I entirely agree that it would further and facilitate modernisation, but the basis behind it is that it would help amalgamation and regrouping within the industry.
    9.30 p.m.
    I have one advantage which the Chancellor has not had, in that I have discussed this Amendment with people who are prominent in the industry, and who know the industry, and I am assured that it would be of benefit in forming these regroupings if this concession was given. I am assured that the Clause as drafted is too hidebound and watertight and that sufficient elasticity is not given. The Chancellor has said that the amount of money involved here is very small indeed. He refuses this Amendment admittedly on the question of principle; that can be the only reason for refusing it. I say to the Chancellor that the Government's proposals have not been entirely acceptable in Lancashire. The President of the Board of Trade and the Parliamentary Secretary who is here would support me when I say that there has been a good spirit in Lancashire, and a good attempt has been made to help the Government and further their desires for the industry. Indeed, the only direct negative came from a trade union, not from the employers' side at all, but we need not deal

    987
    with that. In saying that he will not even look at this point—it will not cost any money but it is refused on a matter of principle—I do not feel that the Chancellor is being entirely helpful or co-operative, and I do not think that that is the right way to approach this matter.
    I am convinced that the Amendment would give a degree of elasticity in regrouping the spinning section of the industry which would be of great benefit. These matters cannot be tied down entirely and absolutely by saying that regrouping must take place this way, and that it shall not take place that way. If this facility was given, it would give elasticity and it would also further modernisation. It would also possibly bring in foreign currency, which we desire, and it would be of great benefit to the industry. I very much regret the stand which the Chancellor has taken in replying. It is rather reminiscent of an observation which the Foreign Secretary made in the foreign affairs Debate which was very unpopular in Lancashire. He said, among other things, that the Lancashire cotton industry and Lancashire people had a stubborn mentality, that there was a stubborn mentality to progress. That is not a fortunate tone to use about Lancashire, and I do not feel disposed to withdraw the Amendment.
    Mr. Raikes: I confess I have listened with a certain sadness to the Chancellor. He said he had done a lot of good for the cotton industry. Surely, if that were so he would have thought that this might have been a case to do just a little bit more. Upon what did the right hon. Gentleman base his refusal? He said, "If I broaden this basis any further I shall have pressure brought upon me from other industries." That would have been a stronger argument had he not already said that he had treated the cotton industry rather as a special case. If the cotton industry was being treated as a special case in this instance the argument about pressure would not appear to be a strong one. This concession would cost very little money, and it would not make the matter into a special case; it is already a special case at the present time. It would to a certain degree encourage spinners, who will certainly incur a good deal of rather heavy expenditure in modernising their
    988
    plant, to sell machinery and modernise it. That is, perhaps, a small thing. To the Chancellor and to hon. Members opposite I say, why not make the best of it? We on this side are trying to co-operate, and I suggest that we should be given a little bit more encouragement than merely the reply, "I have done a certain amount and that is quite enough."
    Mr. W. Fletcher: I think the Chancellor has tried, quite wrongly, to argue a large and wide question of principle on this rather narrow Clause which is really permissive and which, in certain circumstances, will allow certain things to be done. That is twisting the thing round entirely. He knows full well that the President of the Board of Trade has full powers to stop this being expanded in any direction whatever. As long as the Government retain these full powers, it is really nonsensical for the Chancellor to argue that a large question of principle is involved. I cannot understand why on this Amendment, which covers certain circumstances which are not imaginary but real, he should fly an enormous balloon to carry the question out of the area to which it properly belongs—that of practical negotiations which have the impulse of the Government behind them.
    This is not a policy which will help. Lancashire is doing its best in every way and it is not right that the people should be slanged by two senior Members of the Government and told that they are obstinate, stubborn and not coming into line. It is obvious to everybody with a knowledge of the facts that that is not the case. I would like the Chancellor to deflate himself in this matter considerably. I promise to try to set an example myself. I beg him to look at this, not in the grandiose light which he, somewhat naturally, with his normal ebullience, has thrown upon it, but as a practical contribution on which he or the President of the Board of Trade can keep his finger the whole time in order to allow the policy which they have initiated to be carried out.
    Mr. Assheton: We have had a most interesting exposition of this case by the hon. Member for Darwen (Mr. Prescott), well supported by my hon. Friend the Member for Bury (Mr. W. Fletcher) and my hon. Friend the Member for Wavertree (Mr. Raikes). The Chancellor has

    989
    made only one substantial argument in opposition to this Amendment, and I urge the Committee not to pay too much attention to it. The Chancellor has told us that it would not cost a substantial amount. He does not oppose it on that ground, but merely because he is frightened of the repercussions. The right hon. Gentleman has been Chancellor of the Exchequer for quite a long time. It seems a very long time to us on this side of the Committee. I dare say that even the Chancellor himself is beginning to feel that it has been quite a long time. I suggest that he has held office long enough now to be able to stand up to reper-
    cussions. Every single project which comes before the Treasury has repercussions written all round it by everybody in the Treasury. That is quite proper. This is an occasion when the Chancellor could stand up quite easily to the repercussions. He has already admitted that he has given special treatment to the cotton industry. I hope very much that hon. Members will take this matter to a Division.
    Question put, "That those words be inserted."
    The Committee divided: Ayes, 109; Noes, 268.

    Division No. 242.]

    AYES.

    [9.40 p.m

    Amory, D Heathcoat

    Grimston, R. V.

    Orr-Ewing, I. L

    Assheton, Rt. Hon. R

    Hannon, Sir P. (Moseley)

    Pitman, I. J.

    Astor, Hon. M.

    Harvey, Air-Comdre A. V

    Ponsonby, Col. C. E

    Baldwin, A. E

    Haughton, S. G.

    Poole, O. B. S. (Oswestry)

    Barlow, Sir J

    Headlam, Lieut.-Col. Rt. Hon. Sir C.

    Prescott, Stanley

    Baxter, A. B

    Hinchingbrooke, Viscount

    Price-White, Lt.-Col. D

    Bennett, Sir P

    Hope, Lord J.

    Prior-Palmer, Brig. O

    Birch, Nigel

    Howard, Hon. A

    Raikes, H. V.

    Bossom, A. C

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

    Roberts, H. (Handsworth)

    Bower, N.

    Hutchison, Lt.-Cm. Clark (E'b'rgh W.)

    Ropner, Col. L

    Braithwaite, Lt.-Comdr J U

    Jarvis, Sir J.

    Ross, Sir R. D. (Londonderry)

    Bromley-Davenport, Lt.-Col. W

    Keeling, E. H.

    Sanderson, Sir F.

    Buchan-Hepburn, P. G. T

    Kerr, Sir J. Graham

    Scott, Lord W.

    Butcher, H. W

    Lambert, Hon. G.

    Shephard, S. (Newark)

    Carson, E.

    Lancaster, Col. C. G.

    Shepherd, W. S. (Bucklow)

    Challen, C.

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

    Smithers, Sir W

    Clarke, Col. R. S

    Linstead, H. N.

    Snadden, W. M.

    Conant, Maj. R, J. E.

    Low, Brig. A. R W

    Spearman, A. C. M

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

    Lucas, Major Sir J.

    Spence, H. R.

    Crosthwaite-Eyre, Col O E

    Lucas-Tooth, Sir H.

    Stanley, Rt. Hon. O.

    Cuthbert, W. N.

    Maclay, Hon. J. S.

    Strauss, H. G. (English Universities)

    Davidson, Viscountess

    Macpherson, Maj. N. (Dumfries)

    Stuart, Rt. Hon. J. (Moray)

    Digby, S. W.

    Maitland, Comdr. J W.

    Sutcliffe, H.

    Dodds-Parker, A. D

    Marlowe, A. A. H

    Taylor, C. S. (Eastbourne)

    Donner, Sqn.-Ldr. P W.

    Marples, A. E.

    Thomas, J. P. L. (Hereford)

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

    Marsden, Capt. A.

    Thorneycroft, G. E. P (Monmouth)

    Dower, E. L. G. (Caithness)

    Marshall, D (Bodmin)

    Thorp, Lt.-Col. R.A.F

    Drayson, G. B.

    Marshall, S. H. (Sutton)

    Vane, W. M. F

    Drewe, C.

    Maude, J. C.

    Walker-Smith, D.

    Dugdale, Maj. Sir (Richmond)

    Mellor, Sir J

    Wheatley, Colonel M. J

    Eooles, D. M.

    Molson, A. H E.

    While, Sir D. (Fareham)

    Fletcher, W (Bury)

    Morris-Jones, Sir H.

    Winterton, Rt. Hon Earl

    Fraser, H C. P. (Stone)

    Morrison, Maj. J. G. (Salisbury)

    York, C.

    Fraser, Sir I. (Lonsdale)

    Neven-Spence, Sir B.

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

    Nicholson, G.

    TELLERS FOR THE AYES:

    Gage, C

    Noble, Comdr, A H P

    Mr. Studholme and

    Gammans, L. D.

    Nutting, Anthony

    Major Ramsay.

    Gridley, Sir A.

    O'Neill, Rt. Hon. Sir H

    NOES.

    Adams, Richard (Balham)

    Belcher, J. W.

    Bruce, Maj. D. W T

    Adams, W T. (Hammersmith, South)

    Benson, G.

    Buchanan, G.

    Allen, A. C. (Bosworth)

    Berry, H.

    Burke, W. A.

    Alpass, J. H.

    Beswick, F.

    Butler, H. W. (Hackney S)

    Anderson, A. (Motherwell)

    Bing, G. H. C

    Callaghan, James

    Attewell, H. C.

    Binns, J.

    Castle, Mrs. B. A.

    Attlee, Rt. Hon. C. R

    Blenkinsop, A

    Champion, A. J

    Austin, H. Lewis

    Blyton, W. R

    Chetwynd, G. R

    Ayrton Gould, Mrs. B.

    Bowden, Flg.-Offr. H. W.

    Cobb, F. A.

    Bacon, Miss A

    Bowles, F. G. (Nuneaton)

    Cocks, F. S

    Baird J.

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

    Coldrick, W.

    Balfour, A.

    Braddock, T. (Mitcham)

    Collindridge, F

    Barnes, Rt. Hon A. J.

    Bramall, E. A.

    Collins, V. J

    Barstow, P. G.

    Brook, D. (Halifax)

    Colman, Miss G. M

    Barton, C.

    Brooks, T. J. (Rothwell)

    Comyns, Dr. L.

    Battley, J. R

    Brown, George (Belper)

    Cooper, Wing-Comdr. G.

    Bechervaise, A E

    Brown, T. J. (Ince)

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

    Corlett, Dr. J

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

    Rooms, A.

    Cove, W. G.

    Hutchinson, H. L. (Rusholme)

    Roberts, Emrys (Merioneth)

    Crawley, A.

    Hynd, H. (Hackney, C.)

    Roberts, Goronwy (Caernarvonshire)

    Crossman, R. H. S

    Irving, W. J.

    Roberts, W (Cumberland, N.)

    Daggar, G.

    Janner, B.

    Robertson, J. J. (Berwick)

    Dalton, Rt. Hon H.

    Jay, D. P. T

    Rogers, G. H. R.

    Davies, Edward (Burslem)

    Jeger, G. (Winchesters

    Ross, William (Kilmarnock)

    Davies, Ernest (Enfield)

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

    Royle, C.

    Davies, Harold (Leek)

    John, W

    Sargood, R

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

    Jones, D. T. (Hartlepools)

    Segal, Dr. S.

    Deer, G.

    Jones, Elwyn (Plaistow)

    Shackleton, E. A. A

    de Freitas, Geoffrey

    Jones, J. H. (Bolton)

    Sharp, Granville

    Delargy, H. J.

    Jones, P. Asterley (Hitchin)

    Shawcross, C. N (Widnes)

    Diamond, J.

    Keenan, W.

    Shinwell, Rt. Hon. E

    Dobbie, W.

    Kinley, J.

    Shurmer, P.

    Dodds, N. N.

    Kirby, B. V.

    Simmons, C. J.

    Donovan, T.

    Kirkwood, D.

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

    Dugdale, J. (W. Bromwich)

    Lang, G.

    Solley, L. J

    Dumpleton, C. W.

    Lipton, Lt.-Col. M

    Soskice, Maj. Sir F

    Durbin, E. F. M

    Logan, D. G.

    Sparks, J. A.

    Dye, S.

    Longden, F.

    Stamford, W

    Ede, Rt. Hon. J. C.

    Lyne, A. W.

    Steele, T.

    Edelman, M.

    McAdam, W

    Stewart, Michael (Fulham, E.)

    Edwards, N. (Caerphilly)

    McEntee, V. La T

    Edwards, W. J. (Whitechapel)

    McGhee, H. G.

    Stross, Dr. B.

    Evans, S. N. (Wednesbury)

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

    Stubbs, A. E.

    Ewart, R.

    McKinlay, A. S.

    Summerskill, Dr Edits

    Fernyhaugh, E

    Maclean, N. (Govan)

    Swingler, S.

    Follicle, M.

    McLeavy, F.

    Sylvester, G O

    Foot, M. M

    Macpherson, T. (Romford)

    Symonds, A L.

    Forman, J. C.

    Mallalieu, J. P. W.

    Taylor, H. B. (Mansfield)

    Fraser, T. (Hamilton)

    Maninng, Mrs. L. (Epping)

    Taylor, R. J. (Morpeth)

    Freeman, Maj. J. (Watford)

    Medland, H. M.

    Taylor, Dr. S. (Barnet)

    Freeman, Peter (Newport)

    Mellish, R. J.

    Thomas, Ivor (Keighley)

    Gaitskell, H. T. N.

    Middleton, Mrs. L.

    Thomas, I. O. (Wrekin)

    Gallacher, W.

    Millington, Wing-Comdr. E R

    Thomas, George (Cardiff)

    Ganley, Mrs. C. S.

    Mitchison, G. R.

    Thurtle, Ernest

    George, Lady M. Lloyd (Anglesey)

    Morgan, Dr. H. B

    Timmons, J.

    Gibbins, J.

    Morley, R.

    Titterington, M. F

    Gibson, C. W.

    Morris, Lt.-Col H. (Sheffield, C.)

    Tolley, L.

    Gilzean, A

    Morris, P. (Swansea, W.)

    Tomlinson, Rt. Hon G

    Glanville, J. E. (Consett)

    Morris, Hopkin (Carmarthen)

    Ungoed-Thomas, L.

    Gooch, E. G

    Mort, D. L.

    Usborne, Henry

    Goodrich, H. E.

    Murray, J. D

    Vernon, Maj. W. F.

    Gordon-Walker, P. C.

    Naylor, T. E.

    Viant, S. P.

    Greenwood, Rt. Hon A (Wakefield)

    Neal, H. (Claycross)

    Wadsworth, G

    Greenwood, A. W. J (Heywood)

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

    Walkden, E.

    Grenfell, D. R

    Nicholls, H. R. (Stratford)

    Wallace, G. D. (Chislehurst)

    Grey, C. F.

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

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

    Grierson, E.

    Noel-Buxton, Lady

    Warbey, W. N.

    Griffiths, D (Rother Valley)

    Oldfield, W. H.

    Watson, W. M.

    Griffiths, Rt. Hon. J. (Llanelly)

    Paget, R. T.

    Webb, M. (Bradford, C.)

    Griffiths, W. D. (Moss Side)

    Paling, Rt. Hon. Wilfred (Wentworth)

    Weitzman, D.

    Guest, Dr. L. Haden

    Paling, Will T. (Dewsbury)

    Wefts, W. T. (Walsall)

    Gunter, R. J

    Palmer, A. M. F.

    West, D. G.

    Guy, W. H

    Pargiter, G A.

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

    Haire, John E (Wycombe)

    Parker, J

    Whiteley, Rt. Hon. W.

    Hale, Leslie

    Parkin, B. T.

    Wigg, Col. G. E.

    Hall, W. G.

    Paton, J. (Norwich)

    Wilcock, Group-Capt. C. A. B

    Hamilton, Lieut.-Col. R

    Pearson, A.

    Willey, F. T. (Sunderland)

    Hannan, W. (Maryhill)

    Peart, Capt. T. F.

    Williams, D. J. (Neath)

    Hardy, E. A.

    Plaits-Mills, J. F. F.

    Williams, J. L. (Ketvingrove)

    Harrison, J.

    Poole, Major Cecil (Lichfield)

    Williams, Rt. Hon. T (Don Valley)

    Hastings, Dr. Somervill

    Popplewell, E.

    Williams, W. R. (Heston)

    Haworth, J.

    Porter, G. (Leeds)

    Willis, E.

    Henderson, A. (Kingswinford)

    Proctor, W. T

    Wills, Mrs. E. A

    Herbison, Miss M.

    Pryde, D. J

    Woods, G. S.

    Hewitson, Capt. M

    Pursey, Cmdr. H

    Wyatt, W.

    Hobson, C R

    Randall, H E

    Yates, V. F.

    Holman, P

    Ranger, J.

    Young, Sir R (Newton)

    Holmes, H E. (Hemsworth)

    Rees-Williams, D. R

    House, G.

    Reid, T (Swindon)

    TELLERS FOR THE NOES:

    Hoy, J

    Rhodes, H.

    Mr. Joseph Henderson and

    Hudson, J H (Ealing, W)

    Richards, R

    Mr. Dairies.

    Resolution agreed to.

    Mr. W. Fletcher: I beg to move, in page 9, line 41, after "cotton," to insert:
    "or of staple rayon fibre less than three inches long."
    Referring to what the Chancellor of the Exchequer in breezy terms reminiscent of Margate, called the "jolly good report"
    992
    of the working party, I would like to point out that this Clause attempts to do what the working party obviously desired. The working party said:
    "We have left one subject of major importance to the end—the relations between the cotton industry and the rayon industry.

    993
    It is implicit in all that we have said that we regard this as vitally affecting the future of both. There must be a close link between the two."
    It goes on:
    "As pointed out in Chapter IX, scientific advance has created a new integrating force for all the textile industries. We consider that a new outlook is necessary on the relations between them. This matter is of such wide national importance that we recommend that the Government should call an early conference between representatives of the rayon industry and all the textile industries to consider their future relations."
    Without going as far as that, this Amendment attempts to bring into line the parts of the textile industry where the spinning of rayon and cotton are equally affected. The Chancellor has been a very good friend to the rayon industry. In the Budget last year, he gave them a very good leg-up, and, in contradistinction to other textile targets, which he and other Members of the Government aim at so frequently, he has singled out the rayon industry for praise for its initiative. I think, therefore, he will appear in a rather different rôle in regard to this Amendment from that in which he appeared a quarter of an hour ago in connection with the previous Amendment. There can be no doubt that, for amalgamation purposes, in regard to machinery that can spin both cotton and rayon, it is absolutely necessary to accept this Amendment. Without labouring the point any more, because I am certain that he has been well instructed on it, we look forward in a very few minutes to his ready acceptance of this Amendment as an amende honorable, as he was saying just now, and hope that he will accept it as being a helpful and constructive one, emanating though it does from the source on which, so far, he has not cast a very favourable eye.
    Mr. Dalton: I thought I made a most friendly speech on the last Amendment. In fact, I was quite surprised, after what I said, that it was taken to a Division. However, I am anxious not to be less friendly now, although there is one difference. I think there is a good case for this Amendment. I tried to put in a friendly way why I thought there was not a good case for the last one I am advised that the scope over which this Amendment would operate would not, in fact, be as large as a casual reading of the text would suggest, because the concerns engaged in both cotton and rayon spinning could enter into these schemes
    994
    without this Amendment being accepted. Nevertheless, there are some cases in which this Amendment would operate and, in my view, would operate beneficially. Therefore, although I cannot bind myself without examination to the exact words, I can give an undertaking that we will put down an Amendment on Report which will give effect to the hon. Gentleman's intention.
    Mr. Prescott: While thanking the right hon. Gentleman for his helpful speech, may I point out that there are a few mills which spin rayon fibre entirely and exclusively? It is in respect of those that we desire this Amendment.
    Mr. W. Fletcher: 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."
    Mr. Prescott: May I ask, Major Milner, whether it is your intention to call the Amendment standing in my name, in page 10, line 11, to add Subsection (3)?
    The Chairman (Major Milner): No, I am afraid it is out of Order.
    Mr. Prescott: While not questioning your Ruling, Major Milner, may I respectfully mention that this Amendment is taken almost verbatim from the Finance Act, 1941, into which Act it was inserted without discussion. While not questioning your Ruling, may I respectfully ask, if it was in Order to insert it in the Finance Act, 1941, must it not be in Order to discuss it in relation to this Bill?
    The Chairman: I am afraid I had not the honour of occupying my present position in 1941. Then the case may have been quite different from the present one.
    Clause ordered to stand part of the Bill.

    CLAUSE 14.—(Premiums, etc., paid for benefit of directors and employees.)
    Captain Crookshank: I beg to move, in page 10, line 14, to leave out "a body corporate," and to insert "an employer."
    This does not appear to be an important Amendment, but as we are entering into a new Section of the Bill, I would like to know whether it would be to the

    995
    convenience of the Committee if we had a general discussion on the next five Clauses and take a somewhat wider view of the issues raised by those Clauses. I do not know if you would consider that that would be a feasible course Major Milner.
    Mr. Dalton: If that is agreeable to you, Major Milner, and to the Committee, I think it might be helpful. There are a number of common aspects of these Clauses, and it may be that we can clarify the matter better as a result of a general discussion. We might see how we get on. We need not now be exact as to what conclusions we might reach, but I think a general discussion would be useful.
    The Chairman: I am of course largely in the hands of the Committee. Did I understand the right hon. and gallant Gentleman to refer to other Clauses?
    Captain Crookshank: I refer to Clauses 14 to, 18. They constitute a group.
    The Chairman: I understand it is proposed that the discussion should take place on the Amendment which the right hon. and gallant Gentleman has just moved?
    Captain Crookshank: Yes, Major Milner. I do not propose to take up much of the time of 'the Committee, but there are a few general observations I would like to make. The reason for this group of Clauses, as I understand it, is that there has been discovered a mischief. I have tried to find out, and I think I have found out, what the mischief is, but I do not propose to say what it is, because I know that in these matters the Treasury are always very careful as to how much information should be given in public and how much should not. If the Chancellor likes to explain it, that is his affair, but I do not propose to say further than that we on this side of the Committee are aware of the sort of mischief with which these Clauses are intended to deal. Of course, we are also in agreement that any flagrant evasions of taxation must obviously be dealt with, not only in the interest of the Exchequer but also out of common fairness to the honest taxpayer.
    10.0 p.m.
    Having been so long at the Treasury myself, I know that that particular argu-
    996
    ment is always acceptable to this Committee. We are on common ground there. But the point at issue now is whether, granted that there is a mischief, this group of Clauses is a kind of group which should be introduced into a Finance Bill; and on that we find, having considered them as best we could—and they are in very complicated language, and even the Solicitor-General must admit that they are not very easy reading—we find that they go rather too wide, and that, while they may very well deal with the problem with which the Chancellor set out to deal, they will also, undoubtedly, if they are carried in this form, cause an enormous amount of trouble, bother, and, in many cases, real hardship. But I was putting trouble and bother from the administrative point of view as a first argument.
    It is quite certain that, when we come into the sphere of trust funds, annuities, benefits, and all that group of payments, the law is difficult and obscure. Sometimes tax is raised on one form of benefit, on another form of contribution, and in different ways on the income. The first suggestion, therefore, that I would put to the right hon. Gentleman is, that the whole matter ought to be investigated. Some form of committee could easily be set up to look into this complex business. I am strengthened in that suggestion in that it was the conclusion that my right hon. and hon. Friends came to some time ago, as a suggestion we ought to put to the Chancellor of the Exchequer. But remembering what he said on the last Amendment but one, and his own colloquialism, "a jolly good working party" for the cotton industry, it is interesting to find that the jolly good chairman of that jolly good working party, Sir George Schuster, wrote on these very lines id "The Times" yesterday. In view of the encomium the right hon. Gentleman has already passed tonight on our former colleague, I hope he will have considered very carefully Sir George Schuster's letter dated 6th June in yesterday's "Times" making an urgent plea that the Chancellor of the Exchequer should appoint a Committee
    "to review all the arrangements for taxing the provision of funds for pensions and other forms of compensation on retirement or loss a office. The law on these matters has become intolerably complex."

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    That is the preliminary proposal we should like to put to the right hon. Gentleman, and, sc far as I know, there is no particular reason why that should not be adopted. At the same time, it would be possible for him to safeguard the position he wants to with regard to tax evasion. There have been to my own knowledge in the past Chancellors who have said, "We have discovered a leak, and we intend to stop it up. Everybody is at risk who is acting in that way." Then, subsequently, legislation was passed to deal with it. So, from the point of view of evasion, he would not be necessarily any worse off through the delay imposed by a thorough investigation of the whole matter. That is the first submission I put to the right hon. Gentleman.
    Now—briefly, because many of my hon. Friends want to speak on this matter, and have far more knowledge of the details than I have—I want to make clear that this is a matter of very great importance. It was rather passed off, I think, at the earlier stages as if it were something quite different, and that evasions by directors of public companies, and they and only they, were affected by what is now in the Bill. Of course, that is not true. It may be that they are the cases that the right hon. Gentleman has in mind, but as the Clauses are drafted they cover a very much wider field, because they cover not only directors but every employee—so far as I know right down to the charwoman, who may come within their ambit.
    Mrs. Braddock: What about the charwomen?
    Captain Crookshank: I am sorry if the hon. Lady does mind, but, of course, the function of a charwoman is not a directorial function in a public company. There is a sort of hierarchy. As drafted, it means every employee. Moreover, in Clause 18, which is the definition Clause, retirements or other benefits which are covered by the Bill involve a very large scope of possible benefits, because that Clause says:
    "'retirement or other benefit,' means any pension, annuity, lump sum, gratuity or other like benefit given or to be given on retirement, or in anticipation of retirement or, in connection with past service, after retirement, or given or to be given on or in anticipation of or in connection with any change in the nature of the service of the person in question …"
    That is a very wide matter, with an exception, of course. Therefore, before hon.
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    Members pass these Clauses, let them be quite certain what it is they risk: it is every kind of retirement or other benefit, in the very widest sense of the word, which may come the way of any director or any employee of any body corporate. In order to catch what might be quite a small section of evil doers this vast net has been spread. It is so vast that in many ways it looks to us as if it will make life, or these particular arrangements in life, almost intolerable for the honest man. It is quite true that any schemes which may be approved by the Inland Revenue will be exempt from the scope of this matter, but payments which are not under any approved scheme will be penalised in different ways, generally speaking by making any premiums paid for them, whether real or notional, additions to the taxable income of the beneficiary. Now, because taxation goes so low down, there may be caught by these notional premiums a number of people who in years past, if such a scheme had been introduced, would never have been affected one way or the other. All schemes will be exempt if approved. That means that every scheme, presumably, which is devised, or which already exists, will be sent forward for approval; and, of course, there are vast numbers of schemes.
    When we were discussing an Amendment to Clause 11 the Chancellor was saying how today the Inland Revenue were working at enormous pressure, and that they could not begin to look at the proposal which was then under discussion. If the Inland Revenue are already working at this enormous pressure, it seems to me that if they are to have sent to them for vetting purposes every kind of scheme which may come within these Clauses, their position will be well-nigh intolerable. But apart from the position of the Inland Revenue, what will be intolerable will be the long delay which is bound to elapse, in those circumstances, between approval or disapproval; and that will mean uncertainty to a great number of people who are possible beneficiaries, and general chaos all round. I am sure that is the last thing anybody would want to happen. It seems to me an extraordinary thing to set up this enormous machine in order to catch what is, presumably, only a very small number of people. That is the general objection that I would make to the whole proposal. It is quite true that when we

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    come to the proposals of the actual Clauses some of the results, whether they were intended or not, are quite fantastic.
    I think the Chancellor will find that in the course of this Debate he will have brought to his notice instances which could never have been envisaged when these Clauses were drafted. For example, the whole question of any casual payments becomes very unsatisfactory, and very difficult to define. A case which I have in mind is that of a man given a pension under a regular pension fund scheme, to whom the company say, on his retirement, because he has performed some especially good work during the war: "We should like to give you a little more on your pension—say an extra £300 or £400—in view of the fact that you stayed on and worked so hard during the war." Under the existing law, which will not be altered by this, that original pension, and the additions to it, will naturally be subject to tax in the ordinary way, but it appears more than likely, from the legal advice given in this particular case, that the additional pension, because it is something extra, comes within this definition, and will have to be treated in a special way, the special way being that after taxation has been paid, it is taxed over again under these Clauses.
    That does not seem to us to be the intention. If hon. Members care to look at Sir George Schuster's letter, they will see that he translates what would happen under this Bill to the well-known case of the Lord Chancellor, although the Bill as drawn does not affect anyone except employees of a body corporate. We all know that the Lord Chancellor receives a fixed pension of £5,000 a year on ceasing office. He receives that pension if he has held that office for only one, two or three years. If he were an employee or a director of a corporate body, he would have, under these circumstances, a calculation made on what was the notional premium required to provide that pension and he would be taxed on that as well. It brings about the most fantastic results when there are any alterations here or there. I do not want to go into that further, because it has been published in the Press and anyone can read it.
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    I cannot believe that the Chancellor of the Exchequer, or those who drafted this Clause, had any idea of the wide ramifications inherent in it. It is a bit like the matter we have discussed on other legislation, where it was much easier to take very wide powers in order to deal with one problem. The Solicitor-General will be familiar with that, as it has been raised several times in his presence. I think that is what has happened here, and that very wide powers have been taken to deal with a comparatively small problem. Now that people have looked at the result of the wording of this Clause, they have found that every sort of payment of every sort of person, whose honesty no one has ever suspected, whose motives no one has ever thought anything but honest, are liable to be caught, and caught to the great detriment of his financial position. There are many cases where it has been found, as the result of the calculations necessary under this Clause, that in the last years before retirement, people will have to find taxation payments higher than the income they receive. They will be paying to the State more than they are receiving at work. No one is likely to do that, and in order to get out of the mess, people will wish to retire from their body corporate, depriving it of their services—which will be a pity no doubt—because the Bill has made a charge which is so heavy that they cannot pay it. That cannot be the intention of the right hon. Gentleman.
    10.15 p.m.
    I hope the right hon. Gentleman will be prepared to reconsider and recast these Clauses. We ourselves have been helpful in these matters in the past, and we have had a shot at drafting an Amendment which has not been selected by the Chair. The Amendment to Clause 14, page 10, line 13, was devised as one way, at least, of dealing with this problem. It is largely founded on some legislation which has been passed, or is being passed, through the Canadian Parliament to deal with this problem, as a result of an investigation which took place in that Dominion on this group of subjects. Therefore, it is an Amendment of decent parentage. I hope the right hon. Gentleman will look at the whole matter again, and take note of some of the more extraordinary cases which will be brought to his notice during the Debate. Instead of a corporate body, this

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    should apply to all employers, because if it is right in one case it ought to be right in all others.
    The Chairman: I am afraid I had not appreciated the wide ramifications of this matter, and it would be more satisfactory if we had a wide Debate on the Question that the Clause stand part rather than a Debate on an introductory Amendment.
    Mr. Stanley: We have a very large number of detailed Amendments to Clause 14, which would have to be moved before we came to the Motion that the Clause stand part of the Bill. We do not know what answer the Chancellor may make to the general case which has been put, but it may well be that if he were prepared to promise reconsideration, or make some offer of that kind, some of these details would become unnecessary. It would be a great pity if we had to discuss details first, before we got from the Chancellor an answer on the main principles which are involved in this matter.
    Mr. Dalton: As these Clauses hang together, I thought we might have a brief general discussion. I assumed that Members on the other side, who have studied this matter, and perhaps some of my hon. Friends on this side, would have something to say, and I thought that the Solicitor-General or myself would make some observations on the points raised. I thought I might be able to give an undertaking that if we could get the Clauses in this form now, we would be prepared to study the matter. I do not think we could wish for any extra Parliamentary machinery to be set up, but I thought we should be glad to study the matter with Members opposite and perhaps some of my hon. Friends, and bring forward, on the Report stage, Clauses in a recast and amended form, if a case could be shown. The only alternative to this course would be to go laboriously through Amendment after Amendment which, apart from taking up a lot of time, would be tedious and unprofitable. I am not trying to force anything through in a final form, but we are anxious to stop this serious leakage. I am advised that it ought to be stopped, but it may well be that we have not arrived at the simplest and most effective way of doing it. As to that, we are prepared to consult between now and the Report stage. I am sure we do not want
    1002
    a late Sitting tonight—I was assuming not —and if we could avoid a detailed discussion, Amendment by Amendment, and get these Clauses tonight, on the undertaking I have given, I think a brief general discussion would be helpful.
    The Chairman: I understand it was desired that there should be something in the nature of a Second Reading discussion, and that then it would be quite open to right hon. Members or hon. Members to put down detailed Amendments on the Report stage if they were not satisfied.
    Colonel Crosthwaite-Eyre: Is it to be understood that all the Amendments on the Order Paper will be considered before the Report stage? There are a great number of detailed points and is it to be understood that these are to be considered and reported upon by the Report stage when the view of the Government on the whole matter would be ascertained?
    The Chancellor The Chancellor indicated assent.
    The Chairman: The Amendment in Clause 14, page 10, line 14 has already been moved and I propose to put the question. I understand the Amendment will then be withdrawn by leave and I will put the question that the Clause stand part of the Bill.
    Amendment, by leave, withdrawn.
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Mr. Stanley: I think that something has gone a little wrong. We want to hear the Chancellor of the Exchequer's statement before we can agree not to move the detailed Amendments to this Clause. We were hoping that discussion would be taken on the Amendment, and in the light of that we could then decide whether it was necessary to move the other Amendments. We certainly would not agree now to withdraw all the Amendments to Clause 14 before we have even heard the Chancellor of the Exchequer.
    The Chairman: I am sorry, but it is not the usual practice of this House to have a discussion extending over five Clauses on one comparatively minor Amendment. I understood that the proposal of the right hon. and gallant

    1003
    Member for Gainsborough (Captain Crookshank) was that there should be something in the nature of a Second Reading discussion and that the Chancellor of the Exchequer, after right hon. Members and hon. Members who desire to do so have spoken, should give some assurance, and if on the Report stage the result of that assurance was not satisfactory to the right hon. and gallant Member and his friends it would be open to them to put down Amendments again. The Amendment which was before the House has been withdrawn, and I now put the Question, "That the Clause stand part of the Bill."
    Mr. Stanley: Am I to understand that none of the other Amendments to Clause 14 have been selected?
    The Chairman: I am sorry, but I have put the Question, "That the Clause stand part of the Bill."
    Mr. Stanley: That is not the result which we wish, and not the result for which we have asked. We hoped to have a general discussion on the first Amendment, and we hoped that in the light of the Chancellor's statement, it would be unnecessary for us to move any of these other Amendments. What we certainly have not asked for is, that this Amendment—for some reason which I do not understand—should not now be selected by the Chair. If we are dissatisfied with the answer of the Chancellor of the Exchequer at the end, we should find that our opportunity of moving this Amendment in detail would have been thrown away.
    Mr. Dalton: I think that we are in danger of so long discussing procedure as to lose sight of the direction in which we want to go. I thought that it would meet the general convenience if those hon. Members, of whom there are a number who have studied this, would explain their criticisms of and their general objections to the Clause as drafted. I thought that then either my hon. and learned Friend or I would make a reply in the light of those speeches. Then we should be able I hope, if this reply is satisfactory—because there is nothing essentially controversial in this Clause—to have a consultation between the ordinary Members of the House and representatives of the Government with a view to seeing whether before we reach the Report stage
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    we could put down and redraft the Clauses in the light of such discussion. I think that was the intention. What particular peg we hang this discussion on does not matter much. Even some of my own Amendments fall under this arrangement, but I do not object to that.
    Mr. Stanley: I prefer the discussion to hang on the peg of the first Amendment.
    The Chairman: I understood that the right hon. Gentleman and his friends on the Opposition side of the House asked for this general discussion. When the Chancellor agreed, I took the action I did, and I certainly could not have agreed had I appreciated that it was desired to have a discussion extending over five Clauses based on one small Amendment on one Clause. I am sorry, but I think it will work out all right. The question now before the Committee is, "That the Clause stand part of the Bill."
    Mr. Eccles: Now that we are to discuss these five Clauses together, I should like briefly to give our general objections to the Clauses. I want to start by saying something which will repeat what my right hon. Friend has just said, namely, that we on this side are as much concerned as the Chancellor to catch those who are evading tax. There is, therefore, no question of political principle. There are a certain number of transactions which have taken place and which undoubtedly will have the effect of evading tax. These we should like to see stopped by a reasonable Amendment in the Finance Bill. Our complaint about these Clauses is that they are unfair and that they have strayed over a much wider field beyond that of the evaders.
    First, I would point out to the Committee that these Clauses affect the pensions and lump sum benefits of a certain number of people who have been singled out because they are servants of corporate bodies. Anyone who is a civil servant, a servant of a local authority, of a single master, or of a partnership, escapes. It is not really fair to single out a certain type of pensioner who is enjoying some remuneration at the end of his service and leave a whole lot of other people who are also enjoying remuneration of one kind or another. It is unfair to a certain section of the people. I am no lawyer, but I understand that the legal grounds on

    1005
    which this Clause can be defended derive from the law in relation to annuities. I put it to the Committee that the law is a bad law and that many times we have put down Amendments to previous Finance Bills to try to get it amended.
    10.30 p.m.
    It is clear that if an ordinary citizen wants to take out an annuity which is not terminable, he has to pay tax twice. First of all, he pays tax on his income, and then when that sum is paid, he has a sum of money left. He may want to pay part of that money as a lump sum in order to receive £100 a year when he reaches the age of 60. He is taxed on that £100 a year when it comes in. He may die after receiving the first £100, the result, of course, is that he has paid much more in tax, since he paid tax on his income from which he saved money to put the capital sum down. The law as it stands is bad in relation to annuities for which there is no capital payment. A person is taxed twice. I understand that the position of the Government in inserting this Clause was that they wanted to make members of corporate bodies pay tax twice in the same way that anyone does who buys an ordinary annuity. Their justification is an extension of what I consider to be bad law.
    In order to show the Committee how it will work out in relation to the employees of ordinary business firms, I would like to give one or two examples. Supposing a man is killed at his work and has not been covered by any approved scheme. It may be only a small firm, and it may not have enough money for an approved scheme. The directors may say that they would like to do something for the widow, and they may decide to give the widow a pension of £150 a year for life. Under this Clause, the following effect takes place. Supposing the widow is aged 40, they have to calculate what is her expectations of life. They have to find a capital sum which that £150 a year represents over her life. It may well be £7,000. Having decided that is the notional value of £150 a year for the rest of her life, they have to discover what would be the annual premiums spread over six years in order to obtain this sum of £7,000. It would be more or less £1,000 a year for six years. This widow, under the Clause, would have to pay ordinary Income Tax on £1,000 a year
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    for the first six years in which she received £150. The result would be that she would have a minus quantity for six years. That is the effect of carrying out, under this Clause, a bad principle of law which obtains in relation to annuities.
    It does not end there. It is more absurd than that. The ordinary practice of a company, if it does what I have suggested, and gives the widow of a man in its service who has been killed at his work a purely voluntary pension of £150, is to say, "We will give the pension until you remarry." That is the ordinary practice, as the Solicitor-General knows. Therefore, under this Clause, the calculation has to be made of what is the expectation of time before that widow remarries in order that they may know the capital sum as represented by the £150 a year. Is the Government going to look at this widow aged 40, and say, "This year, next year, some time never"? That is what has to happen under this Clause. It is manifestly absurd that such a calculation should have to be made.
    Suppose that there is the sort of man quoted by the right hon. and gallant Member for Gainsborough (Captain Crookshank), who retires in 1953 and is given a pension voluntarily, where the company has not paid into any scheme for, say, £150. What happens is that in his case, too, a calculation has to be made of the capital value of that £150 for the remainder of his life, and he has to pay on that sum Income Tax for six years. Suppose that he dies a year after he retires? Then, under this Clause, his estate becomes liable to Income Tax on the whole of the six years' premiums representing a capital sum of whatever his expectation of life was at the time he retired. That is manifestly absurd. I cannot think that the Chancellor of the Exchequer really meant things of that sort to come about. I am sure the Chancellor will say that none of these things will fall upon pensions which are paid out under an approved scheme: that Is to say, a scheme which has been taken to the Commissioners, and has been approved. If we were to discuss these Amendments one by one on these Clauses, I would warn the learned Solicitor-General that I have 24 valid questions to ask him regarding these schemes and how they are to be approved. However, I will not go into that.

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    I will only say that a big company which has an approved scheme will always find the odd case which is not covered under its scheme. The companies want to make provision for those extraordinary accidents which occur. In the case of a small man employing half a dozen men —perhaps prosperous although small—it may not be worth his while to have a scheme approved by the Commissioners. Four or five of his employees may be changing fairly often. It may be that one or two of the old ones go on. He may want to do something for the old ones, but it is not worth his while to have a scheme. But if he does have a scheme, every time benefit is given in the future it will be taxed twice, in the sense that the income of the employee will have added to it the notional premiums which the company would have paid to assure the pension, whatever that may be, if it had gone to an insurance company or if it had had one of these approved schemes.
    I could talk on this matter for a long time, but I do not intend to keep the Committee very long. I think this thing is absurd. The Chancellor's intention is to catch certain forms of evasion. I think that big lump sum payments to some official or director of a company at the time he retires ought to be taxed. Such payments should be caught and dealt with. But this Clause catches a quite unknown number of people, and there is no reason why they should be caught. If the Chancellor insists on this, it will be quite unfair not to bring in the Civil Service and local government; it will be unfair not to bring in the Lord Chancellor and all the other dignitaries who get pensions. We know that could be shown to be quite absurd. It is also absurd in regard to these small sums. I am sure that the Chancellor of the Exchequer has received evidence from serious people connected with business that this will upset their businesses, and will put upon their clerical staffs an immense amount of extra work. I do not know exactly what part of the Inland Revenue Department will be dealing with this matter, but we know what the conditions are like in certain parts of that service. Every scheme will have to be brought to them to be approved, and there will be a mounting up of work which, I am sure, will not be worth while.
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    From all the questions I was going to ask the Government I will put just one. It is highly important that employees of British companies who do their service abroad should not be brought in under this Clause. When a man goes abroad, say to Venezuela or to some other place where the climate is not very good, it is customary to give him an undertaking that when he retires after service with some British company, and comes back to the United Kingdom, he will have a lump sum and a pension, and will be able to make a home in England when he comes back. Many men and their families would not go abroad if they did not know that was waiting for them when they came back. There is nothing that we can see in this Clause which enables the employee who is not resident in the United Kingdom to escape tax. I am sure it is the Government's intention not to bring in those people, but I ask that question because, particularly interested as we all are in the development of oils and minerals in foreign countries and in the British Empire, if the Government do not deal with this matter, they will be injuring our prospects very much. I hope that on that point we can get an assurance tonight.
    The main thing I want to put to the Chancellor of the Exchequer is that these Clauses are all right in intention, but their effect is really unfair, and we should like to see them most carefully redrafted, and, if time permits, evidence taken from those people who are really interested in, and understand, these pension schemes, and who will co-operate in catching the people who ought to be caught and see that those who are perfectly innocent and honest are not penalised under the same legislation.
    Mr. Callaghan: There is a great deal of what was said by the right hon. and gallant Member for Gainsborough (Captain Crookshank) and the hon. Member for Chippenham (Mr. Eccles) with which I would agree. I am not sure that we have not to some extent brought this upon ourselves. We said that we were going to subject these Clauses, when produced, to very critical examination in order to make certain. I imagine that the critical examination should be confined to what is proper and reasonable. These Clauses have been drawn in such a way that they really do make great confusion of a very

    1009
    complicated subject. One of the difficulties is that just as there is, under the Income Tax law, no definition of what is income, so there is no definition of what constitutes superannuation, and in consequence we are faced with this hotchpotch of Clauses which are designed to deal with a very real evil, but which catch or might catch, quite simple, homely people in their ambit.
    To give a simple example, I would hazard the view that it is not clear from this Clause as drawn whether the clerk who is given three months' salary in lieu of notice is liable to tax in respect of that payment. It is quite possible to construe the Clause so that he would be so liable, though it is the long-established practice that he is not. There is quite another reason, apart from the pension, which does make something like this necessary, and that is the effect of two decisions in two cases, one in 1932 and the other in 1941, which have had the effect of making the capital sum paid for these purposes taxable neither in hands of the donor nor in the hands of the recipient, and it is clearly desirable to draft some legislation to catch cases of that sort. But we are going wider than that.
    I fear that the complications of trying to administer this Clause will be exceedingly difficult. The hon. Member for Chippenham stated that he had 24 valid questions to ask. What I would like to say is that I counted 23 different types of cases, but then I found that it was time for tea, so I left it; but I have no doubt that there are many more, and I hope the Chancellor will say that he will reconsider this Clause to see if anything can be done. What is happening here is the same thing as is happening elsewhere in the field of Income Tax. It is becoming so complicated that we are suffering from a degeneration—a fatty degeneration—and Income Tax is now beginning to suffer that fate which overtook the Window Tax, and various other taxes, and we are having to use this extremely intricate machinery to catch a fairly small form of evasion because of the complications into which modern life is getting us. There is the question of double taxation. As I understand it, the Chancellor said that the case for doing this varies from the tax on annuities. He did not, I think, carry it far enough. It is also true of sums saved voluntarily in the form of life in-
    1010
    surance. If one contracts a policy which is due to mature in thirty years' time, and which one then invests, one is liable to taxation on the income which accrues. It is a liability for anybody who saves money and then puts that money into an investment from which income is drawn.
    10.45 p.m.
    Sir Hugh Lucas-Tooth: May I interrupt the hon. Member? I think that it does not apply with so much weight to the person drawing an income from an investment as to the annuitant, whose income is being used up.
    Mr. Callghan: I agree, and that is a strong case for relieving the annuitant. It is a well-tried practice that the man who saves money and then converts his savings into a capital sum is taxed on it. He pays tax in the course of saving his money, and he pays tax later on when the money provides an income; but I do not think there is a more onerous burden of double taxation imposed on any of these people than on the person who voluntarily indulges in life insurance. There is one type of case in which I think it operates in a particularly hard way. Let us think of the company which makes an agreement with a manager and undertakes to pay a pension after fifteen years. This man is to be assessed on the amount paid for him year by year. Supposing the firm becomes insolvent after ten years. The man has, in effect, paid tax on the proportion they have put away on his behalf for ten years. There is no provision in this Clause for repaying him for something which he has never had and something which he is never going to get. That seems to be an obvious deficiency that ought to be put right, and there are many others which I could quote. Sufficient has been said to show that the whole of the Committee is agreed that there is a case here to be met, and that we do want legislation of this sort. This looks like blossoming into a first-class "racket". I am not sure whether it is Parliamentary or not for me to use such an expression. On the other hand, these Clauses as drawn cover both the just and the unjust, and will cause a lot of inconvenience to the just and to the Inland Revenue Department, and I hope my right hon. Friend, whose drafting I am sure it is not, will reconsider the matter and will let us have fresh Clauses on the Report stage.
    Colonel Crosthwaite-Eyre: The hon. Member for South Cardiff (Mr. Callaghan) made his final point that these Clauses covered the just and the unjust, and his argument was, in brief, that for this reason of possible injustice these Clauses should be reviewed. With this I agree. I do think the Chancellor of the Exchequer, or whoever is going to answer the Debate, should as his first argument, since his advisers have through him made the case, tell the Committee what is the extent of the evasions these Clauses are going to cover. We on this side of the Committee so far have had no indication whatsoever whether this loophole is large or whether it is small. We have no idea whether these Clauses, which are penal in their nature, are intended to remedy some grave defect in the social structure of taxation, or whether they are just some piece of Socialist legislation designed to appeal to hon. Members on the Government Benches.
    In so far as it may be the former, we are more than ready to support the Chancellor, but we do feel that we should have some information as to the extent he thinks this is a grave matter. He says, and I think I quote him rightly, that there are a number of Surtax paws evading tax by obtaining benefits, often in retirement, and not being taxed. He said, if I remember rightly, earlier and within the last half-hour, that that was the advice of those responsible for this legislation. I think he ought to come out and tell the Committee the total sum involved. Only then can this Committee have any idea of the gravity of the issue. We have been dealing with this matter purely theoretically as to whether this is a grave matter or not. If it is grave, we on this side will be more than ready to co-operate in stopping it, and if it is not, it is then merely another measure propounded, not for the benefit of the body politic, but merely to satisfy the class hatred of hon. Members opposite. Until we know which is the issue, it is impossible for the Committee to judge it. This is something which the advisers of the Government have stated is used by unscrupulous people to the disadvantage of the State.—[interruption.] We on this side of the Committee do not qualify for a first-class return ticket to Moscow.
    1012
    If these Clauses are designed to stop a loophole, why is it that they are designed so that they prohibit any ex gratia payment to a servant of a company who, through misadventure, may not be able to complete his term of office? If a man, say, the secretary of a company, falls ill, this Clause prohibits him from being pensioned off; because that would merely result in the back payment of tax on an assessment of six years, plus demands on whatever he may receive in future. This would render the recipient insolvent. Why has the Chancellor of the Exchequer drafted that Clause so that any payment made to a man dispossessed of his job shall be taxed? Supposing the Minister of Fuel and Power takes over an electricity company and dispenses with a director. That director is entitled to certain payments. It has nothing to do with him that he has been sacked. But that individual will be taxed on what he will receive for loss of compensation under this Bill. Therefore, he will not only lose his job, but he will be taxed in a penal manner, which will put him in such a position that he will have to pay to the Chancellor of the Exchequer more than he can possibly receive from the Ministry of Fuel and Power as compensation. That seems to me so illogical that I cannot believe that even the Chancellor of the Exchequer is willing to defend it.
    I would put this further point. He has made it a condition that all directors and all employees are to be considered under this scheme. But, surely, he knows that that is an impossible requirement, that in no firm is it possible to compare all directors and all employees. One has to take a reasonably comparative view between directors as a class and employees as a class. To try and set down as a standard that all employees and all directors shall be taken in a group is impossible, and to put that down as one of the conditions which he demands under Clause 14 is merely going to mean that no scheme whatever can come within the terms of the Finance Bill.
    He has further said that the Income Tax Commissioners may withdraw their approval, but at no stage has he made any way in which people can appeal against their decisions. One of the things I believe is that the strength of the Treasury lies in the elasticity of the Finance Acts. I have on various occa-

    1013
    sions had the necessity of appealing to the Treasury. The one thing I have always found is that in the Finance Acts they have always a margin in which they can make allowance for common sense. These Clauses leave no such allowance whatever for common sense. They make it a matter of fact, a matter in which every word of the Clauses is bound to be rigidly adhered to. I would also like to ask the Chancellor of the Echequer whether in these Clauses he could not permit some kind of an appeal; could not he make it possible for anyone who disagrees with the Income Tax Commissioners in a direction to have an appeal to special Commissioners? I would like anyone to have the right within 30 days, or whatever period it might be, to appeal.
    11.0 p.m.
    I say to the Chancellor of the Exchequer, that no matter how he drafts this Clause, he can never hope, in justice, to make a watertight definition. The more he strives to make it watertight, the more difficult he is going to make it for an honest employer to carry out his duties towards his employee. I suggest to him that if he wishes to fulfil the intention of what he is trying to do, he will make it far less watertight. He will give far more discretion to the Commissioners of Income Tax and far more discretion of appeal to the Special Commissioners. He will do what the Treasury always strive to do— to make all regulations of this kind such that whilst the evil cannot escape, anyone with an honest case can be certain of getting a just decision. If I may say so, I have taken part—this is personal —in a recent case with the Treasury. It was a permissive case in which the Treasury could make directions or not as they liked. The whole case depended on whether the Treasury in their discretion made an order or not. That, so far as I was concerned, resulted in an equitable decision.
    I suggest to the Committee that this penal Clause, if passed in its present form, gives the Treasury no discretion, but forces the Treasury to make penal legislation designed to stop the rabbit-hole when they are trying to catch the badger. That will not work. If they will frame this Clause again to give some discretion to the Treasury, and to allow appeal, and to make permissive directions and, above all, to encourage industry to make provi-
    1014
    sion for those people who fall by the roadside, and for whom they wish to provide, then indeed not only will they have stopped the abuse to which they refer, but they will have done something to aid industry as a whole. As these Clauses stand, they are impossible. We are hoping they may revise them, because both sides of the Committee are equally keen to stop abuse and yet maintain the right of industry to provide for the individual.
    The Solicitor-General (Sir Frank Soskice): On all sides I believe we are agreed on the necessity of some legislation. The right hon. and gallant Gentleman the Member for Gainsborough (Captain Crookshank) indicated from his own experience that it would not always be in the public interest to state exactly what are dimensions of the evil against which it is desired to legislate. If I may adopt what he says, I will content myself by saying simply that there is an evil and it certainly does require some action. I believe that on both sides we are agreed about that.
    The question the Committee desired to debate is whether we have really gone about it in the right way and whether we have cast our net too wide. My right hon. Friend has given an assurance, and I think it may be of assistance to the Committee in considering what further course is to be taken between now and Report, if I indicate the broad outlines, the sort of lines on which we have endeavoured to tackle this problem. May I, therefore, state the general law of the position as I see it? Supposing there were no excepted approved superannuation schemes and funds under the 1921 and 1922 Acts. I shall say a little more about them in a moment. But leaving them out of account, and considering what would be the law apart from that, I think it would be this.
    Suppose we have an employer and an employee, and that the employer makes a contribution to a fund, or an insurance company, or to any other similar institution, with a view to procuring what we have called, in general terms, a retirement benefit for his employee; and suppose that the employee also makes an equivalent, proportionate contribution towards the fund himself: the employer's contribution would be allowable for a reduction, being regarded as a trade ex-

    1015
    pense. The employee's contribution would be in this position: if the employee, as a result of the joint contributions, obtained an absolute right to receive and enjoy a retirement benefit in whatever form, it may be that the employer's contribution would form part of the remuneration that the employee received, that is to say, what the employer in fact contributed on behalf of the employee would be regarded as part of the employee's remuneration; and the result of that would be that it would be taxed as all the rest of his remuneration. In other words, as the law stands, disregarding excepted approved superannuation schemes, the employee would have to pay tax upon the employer's contribution. That is the position from which we start.
    Starting from that general position, one finds that the law has excepted from that principle certain schemes of funds. First, there is Section 32 of the Finance Act, 1921, and that excepts approved superannuation funds; and superannuation funds which come within the scope of that Section of that Act work out in this way. The employee, in that particular case, does not have to pay tax upon the contribution made on his behalf. That is what happens with regard to those particular funds. Funds which are approved for the purpose of the 1921 Act, for the purpose of that Section, are funds with regard to which, speaking in general terms, it can be said that their main object is to provide a real pension—not a lump sum, but a pension. They may provide a subsidiary lump sum, but their primary object must be to provide a pension. When they do not do that, they will not be approved under Section 32 of the 1921 Act. But if they are approved, as I have said, the employer and the employees are allowed relief from tax in respect of their contributions.
    Then there is Section 31 of the Finance Act, 1922, which does very much the same thing with regard to statutory superannuation schemes. If hon. Members will conceive in a sort of group the excepted approved schemes and funds in these cases, relief is given, amongst other forms of relief, in respect of the contributions of the employer and the employee.
    Major Haughton: Am I not right in saying that the Commissioners have the
    1016
    absolute right within their discretion to turn down the schemes that the hon. and learned Gentleman is discussing?
    The Solicitor-General: Certainly, under Section 32 of the 1921 Act the Commissioners have a discretion as to what schemes they will approve; and that, in point of fact, is what we have reintroduced in another form in the Clauses we are discussing. We have got that machinery. We have tried to introduce that machinery.
    Colonel Crosthwaite-Eyre: The Solicitor-General says the Government are reintroducing the machinery. How far retrospectively can that machinery be introduced? If the Commissioners make an order, how far retrospectively can that order be made?
    The Solicitor-General: I will come to that point later. The position with which one starts is by taking Clause 14. What does Clause 14 do? It is designed to achieve a limited object, to prevent an abuse of this kind. Supposing there is an employee who has not got an absolute right to retirement benefits, and supposing that right is contingent. Supposing he does not obtain an indefensible claim to retirement payment which is made to some third party, he does not have to pay a tax on the employer's contributions.
    I hope I have made that clear, because that is crucial to the understanding of Clause 14. If a man obtains an indefensible right to the retirement benefits, he has to pay tax on his employer's contribution. I am not talking now about approved schemes. If he obtains only a contingent right, he does not have to pay tax on the employer's contribution. Therefore, the first abuse which we want to come to is the abuse which takes advantage of that circumstance, because it is not difficult to conceive a scheme in which the employee does not have to pay tax on the employer's contribution. It is simple to arrange and formulate a scheme in which the employee's right to the retirement benefit is only a contingent right. I can assure hon. Members that that device has been adopted and is being adopted. Therefore, we want to stop it.
    How do we seek to stop it? In the first place, if hon. Members will look at Clause 14, the first thing we say with regard to any statutory pension scheme—

    1017
    that is to say, a scheme within Section 31 of the Finance Act, 1922—is that this Clause does not apply. May I compendiously refer to that as an approved scheme? Under Clause 14, there is no obligation at all with regard to an approved scheme, but the Clause goes on to say that it shall not have an obligation with regard to a great many more schemes, and to any scheme which the Commissioners approve. Hon. Members will see that under Subsection (2, c) any scheme which the Commissioners approve will also be taken out of the scope of Clause 14. That is Subsection (2, d) which excepts certain existing schemes, which thus come out of the ambit of Clause 14. By so doing we effect the object which we have in mind.
    Therefore, we take out everything which can be said to be a genuine superannuation fund or scheme. When I use the term "genuine," I want to use a non-controversial term. What I mean to infer is that any real superannuation fund —that is, a fund which is really designed to provide pensions—is taken out of the ambit of Clause 14 altogether. It is either a statutory one or it is an approved one, or one which the Commissioners are given the power, under this Clause, to approve. They can write it out of the picture altogether. So we are left only with those schemes with regard to which it can be stated that, for one reason or another, they have some deleterious characteristic in them whereby they cannot be approved. They are not really genuine pension schemes. It is only with regard to those that Clause 14 operates. With regard to them it says that we must not rely upon the device to make a claim to retirement benefit a contingent claim whether that device has been adopted or not. The employee has to pay tax on the employers contribution to the fund or the insurance company, whichever it may be. That is all Clause 14 does.
    May I turn to Clause 15 and review it, and Clauses 16 and 17, in that same way? Clause 15 deals with schemes which can be made to be approved schemes, or approvable schemes, in that same way as Clause 14 does; so we are left only with those schemes which have something objectionable about them. With regard to them, Clause 15 says that position must be treated as if an employee has received a notional contribution, as
    1018
    if an employer has made a contribution on his behalf, so that he has to be charged tax on the basis that he is receiving an advantage on which his employer has made a contribution, very much in the same position as the employee or director contemplated in Clause 14. Clause 16 deals with a particular type of director, that part-time director or controlling director, to use a general description, and it says, in regard to that type of director, that he is to be treated, in effect, as if he were not an employee of the company, which he really is not. He is more or less in a position of a proprietor or partner. He is treated not as an employee, but as being in the position of an ordinary citizen making an investment out of his own money, and, therefore, he is treated, when given some form of gratuity or any other payment, as if he has received an emolument, and, therefore, he pays tax on it during that year. A private individual who buys an annuity of £1,000 will have to pay tax on £1,000 when he earns it, and when he takes it out of his bank he will have to pay tax on the annuity. Here, again, the part-time director is to be treated as if he were an ordinary citizen buying an annuity.
    11.15 p.m.
    Colonel Crosthwaite-Eyre: The hon. and learned Gentleman said part-time or controlling director, which I presume refers to the definition in Clause 18. In view of modern industrial organisation, how can he say a director is part-time if he holds only five per cent. of any company?
    The Solicitor-General: I am endeavouring to give the general principles on which we base this Clause. We try to draw a distinction between the two. Clause 17 gathers up those cases which have not been brought into the three earlier Clauses. This Clause deals with directors who are not part-time or controlling directors, but again are in the position of persons within Clause 15. They are treated as if, during the previous six years, a notional payment had been made on their behalf to buy an annuity. The next clause is simply a definitions Clause. That is the general framework which we have endeavoured to put in these Clauses. It is not easy to understand, but I have done my best to explain it, so that hon. Members can

    1019
    consider the Clauses later on in the course of the Debate, or between now and the Report stage.
    Major Haughton: I think we are debating this matter in a helpful atmosphere. In the first place, I think it most helpful that we are given enough latitude to debate these Clauses together. In the second place, it is most helpful that the Chancellor of the Exchequer said he would reconsider this matter after having heard the speeches made from different parts of the Committee.
    The hon. Member for South Cardiff (Mr. Callaghan), in his very pertinent remarks, said that we are dealing with a very complex subject. We are dealing really with two very simple main issues. The two main things at which the Revenue are aiming under this Clause are lump-sum payments and annuities purchased by companies. These are two perfectly simple things. There is nothing wrong in them. There could be wrong in lump-sum payments, if there was any evasion, but when we come to annuities it is a question of the complexity of the law. It is a question of the "out-of-dateness"—if that is grammatical—of the law concerning annuities. There is not a lawyer in the Committee at present who would not agree with me that the lay, concerning these things is very tricky, and that the Clauses as drafted in this Bill are intended to keep within the framework of a very antiquated and very tricky law, whereas we know that in other countries, such as Canada and South Africa, these things have been subjected to commissions to straighten them out, so that the law concerning annuities and Income Tax matters shall be easy, simple and more readily understood. There is no question at all that these Clauses are striving to keep within a difficult law. The learned Solicitor-General quoted Clause 15 and he said that Clause 15 is entirely reasonable. As a lawyer, of course, he was striving to keep within it.
    At this late hour, I do not want to weary the Committee with examples. The hon. Member for South Cardiff said he had worked out 23 examples before tea, and then he got weary. I got weary when I worked out three, but, if I may show what I regard as the absurdity of Clause 15, I will quote just one example. This is an example I worked out in connection
    1020
    with Clause 15. Suppose that a company agrees to pay its managing director, instead of a salary of £5,000 a year, until he retires, £4,000 a year until he retires, and £2,000 a year afterwards. The managing director will pay tax at full rates on all the money received under this agreement.
    There can be no question whatever of evading tax, and it is difficult to see what on earth it can have to do with the Revenue authorities if the company chooses to pay him in this fashion. Under Clause 15, however, in future, the managing director would have to pay tax until he retired not only on his income of £4,000 a year, but, in addition, on the equivalent of the premium he would have had to pay to an insurance company to provide him with the £2,000 which he will receive from the company as fully taxable income after he retires. That is all I have to say at this stage. The Chancellor of the Exchequer has been good enough to say he will reconsider these matters. I have no doubt he will be good enough to consider the cases we have formulated. I would say, before I sit down, that I think it is more reasonable to frame a law within which reasonable taxation can be applied than to formulate Clauses in the Finance Bill in order to keep within the bounds of an antiquated and disjointed law.
    Mr. Donovan: If the Government are going to re-consider these Clauses, may I put to them a point which I think merits consideration. It is a development of the point which was put, in the first place, by the hon. Member for Chippenham (Mr. Eccles) in relation to foreign employees of British concerns. In order to put my point, I must keep away, as far as possible, from the language of these Clauses. I will, therefore, put it in the form of a simple illustration. A British company is carrying on business in India and in various other parts of the world. The business is controlled from this country. It is therefore resident in this country, and pays tax on the whole of its profits, wherever they are made. It, therefore, pays on its Indian profits. Due to developments in India, the company decides to close its Indian branch and to do no more business in that country. It has some thousands of Indian natives in its employment in India. In order to preserve its good name, the company decides that it cannot dismiss those employees

    1021
    without some reward, and that it must give them something in the nature of compensation for the loss of their employment. It does so.
    What is to happen now is that under Clause 17, using broad language, the amount which each employee gets is to be divided into six, and then, to use the language of the Clause, that amount shall be deemed for all the purposes of the Income Tax Acts to be income of his for each of these six years, and assessable to tax under Schedule E. That will not worry the Indian natives, or imperil the settlement, because Indians cannot be assessed for Income Tax; but since 1944, the company can, because it is the company's duty under P.A.Y.E. regulations to deduct the tax. If these words are to be given their literal meaning, we get the anomaly that the native is not liable for tax on earning a wage, but he is liable for tax on this particular sum. I know that this result is not intended. These words are too wide in their drafting. What is really meant is that, provided the employee has an office or employment with that British company, under Schedule E that particular sum shall be deemed to be income from that source. I merely ask whether the Government will consider this point and introduce some limiting words on the Report stage.
    Mr. Oliver Poole: It happens that I spend a considerable part of every day dealing with insurance matters of this sort. Let me say straight away that I would hesitate, because I know the complexity of these matters, to express any expert knowledge of them. I was very interested in the remarks of the hon. Member for South Cardiff (Mr. Callaghan), and I think that if he and I, with our expert knowledge of Inland Revenue matters got together, we could produce a number of anomalies which would surprise not only ourselves, but the right hon. Gentleman. I do not wish to go over the question of the necessity for reconsidering these Clauses; nor, in fact, to add to the instances of complexities. There are, indeed, very great complexities. What I am concerned about at the moment is the assurance which the right hon. Gentleman is going to give at the end of our discussion. I rather gather from the remarks he made, and from the remark, of the Solicitor-General—whom I would like to congratulate on his explanation of
    1022
    these complicated Clauses, for though they are extremely difficult, I was able to follow him quite easily—that the Chancellor of the Exchequer is going to say, "I will reconsider the Clause and do something between now and the Report stage." I think it is unlikely that he could, in fact, in that short time redraft these Clauses in such a way as to meet the problem, and I suggest that, for two reasons, he will have difficulty in doing so.
    The first is that there has been since the war an enormous increase in the demand for this type of insurance, and because of that, naturally, all the insurance companies are thinking out new ways of meeting the demand, not to evade taxation, but to meet the general demand. It would be a very great pity if at this stage ill-devised Clauses were put into this Finance Bill which might do irredeemable harm to the general practice of insurance at this time. It is a most complicated matter. Many companies have schemes they are bringing out—a vast variety of schemes—and I do not believe that it can be done overnight. The second point which I want to put to the Chancellor for his consideration is very difficult at the moment. I admit that as taxation has risen, more and more loopholes have been found. So long as taxation is kept at its present high rate, it is absolutely inevitable that people will continue to look for ways round it. We might consider it honest or dishonest, however we feel according to the circumstances, but do not let us waste time discussing that. Let us admit that it is so.
    What is, in fact, happening is that certain regulations and laws have been passed and new methods have been found, leaks have been noticed, more legislation and more regulations have been brought in and passed, and a complicated device has been built up. These Clauses, which are extremely complicated, add further complexities, and I suggest to the Chancellor that what is really needed is that the whole thing should be gone into most carefully. I suggest that for two reasons. The first is the complexity of the position —I know of my own personal experience how complicated it is—and the second is the position in the insurance world at this moment, when there is a great demand for this type of insurance. Even if it means bringing in something on the Report

    1023
    stage, I ask the Chancellor to undertake that in the near future there will be a really full inquiry into this very important and complicated matter.
    11.30 p.m.
    Mr. Collins: I want to put a small point on Clause 14. I think I can illustrate my point best by quoting an actual example I have in mind. I have knowledge of a superannuation scheme which has been approved by the Commissioners of Inland Revenue. It has the usual features of pension, time, age and so on, and under this scheme the firm pays some 80 per cent. of the contributions and the employees 20 per cent But it has one unusual feature in that if an employee leaves the firm—perhaps a girl gets married—he or she has the option, of continuing at his or her own cost, or of commuting. It may take the form of a dowry. The person can still draw it out, the sum varying according to the number of years he or she has been in the superannuation scheme. I may be wrong, but according to my reading of the Clause the Commissioners of Inland Revenue shall not be able in future to approve schemes where payments are commuted. In other words, it would appear that such schemes—schemes which I have emphasised have already been approved by the Commissioners of Inland Revenue—would contain what the Solicitor-General called "deleterious characteristics." It would appear to me that such characteristics would not normally be undesirable. We want the young people to go into these schemes, but it might well be that they would be "put off" if they were told they could not commute in this way. It might be subject to abuse, but I do not think it would be deleterious in the sense in which I have put it, and I hope, therefore, that the Chancellor will look at cases of this sort.
    Sir P. Bennett: I should like to follow the remarks which we have just heard. The hon. Member for Taunton (Mr. Collins) is correct in the views he has expressed. For the last 25 years or more, I have tried to wrestle with these pensions schemes for employees, and I think the question of the girls is a very difficult one. We could not get our girls to join a pension scheme if we told them that the only hope they had of ever getting any-
    1024
    thing was that they should work until they were 60 or 65 years of age and then have a pension. Of course, many of them do not expect to stay in the company's employment for that period. They expect to marry, and when they leave to get married they expect a small marriage dowry to take with them.
    I rose particularly to ask the Chancellor, in considering this matter, to give a little thought to those who are trying to run these schemes; the people who are worrying about, and working on, these schemes. We have been re-organising our scheme. Values of money have altered, and there are many other facts which have to be borne in mind, but, with all one does, one can always find the hard case which needs special payments. One cannot get out of that, and what with men remarrying, and young widows and old widows, the thing is full of headaches. It is one of the most difficult problems. We try to cover everything we can, but we always find that there are cases wanting special assistance, or ex gratia payments, or something of that sort. We who run these schemes are not doing it for what we can get out of them, although we do get the good will and loyalty and support of the workers. I am sure the Chancellor would not wish that that should be taken away, and I ask him please not to make us say, "We wish we lived in the days of our grandfathers when there was no need to worry about these things."
    Mr. Dalton: I think perhaps it would be helpful if I gave some explanations, although all I wish to say at this stage of the Debate, without making technical observations, is that we have had an excellent series of contributions from various parts of the Committee. I will not name any one particular contribution more than another, because hon. Members have shown a very great knowledge of this very difficult question. I agree with the hon. Member for Edgbaston (Sir P. Bennett) that this can be all headaches, and I agree with the hon. Member for Oswestry (Mr. Poole) who shows much knowledge of this matter, and who did not think we should be able to arrive very quickly at a perfect and final solution. I am sure he is right. But between now and the Report stage, in the light of what has been said, those who advise me in conjunction with members of that Committee who have

    1025
    contributions to make—we can arrange that machinery of consultation very easily —can assist, at any rate, in preparing what I hope will be a distinct improvement both from the point of view of intelligibility, and perhaps even prosaic elegance, of those Clauses as they now stand. When dealing with these gaps in the law through which evasion operates, it may well be possible to make a fairly good job this year; but none the less a good deal will be thrown forward on future years, and for the Clauses next year to carry the process a little further.
    I agree with the hon. Member for Oswestry that we shall not get finality, but there is general agreement that there is an abuse to be dealt with. The extent to which it may grow and extend is a matter of speculation, but if we do not stop it up now it may get worse. I will most happily discuss it with those who have spoken, between now and the Report stage, and I am very anxious that any hon. Member making useful contributions tonight should co-operate in giving us this year improved Clauses aiming at this object we have in common. I do not know whether I can usefully say anything more at the moment, but I repeat the agreement we reached at the beginning of these discussions. I will not move any of my Amendments on the Order Paper, but will reserve my thoughts for later on, and if we could now get the Clauses subject to these arrangements, we would put down amended Clauses for the Report stage. We shall see that at that time they are not unduly galloped through and that a reasonable time is allowed for examining them.
    Mr. Stanley: I think I can say, on behalf of my hon. Friends, that we are very grateful to the Chancellor of the Exchequer for the suggestion he make. He was quite right in saying that there is nothing fundamentally controversial about the Clauses. All of us want flagrant evasions to be stopped and no sound scheme to be interfered with, or the administration clogged. The fact is that in the pursuit of the evader those responsible for the drafting of the Clauses have overlooked to some extent the damage they do to the innocent, and it is the desire on all sides to see that put right.
    The Chancellor of the Exchequer has offered, between now and the Report
    1026
    stage, consultations with Members on all sides who are interested, and no doubt with bodies and experts outside who can bring special knowledge and experience to hear and advise some common form. I had intended to make a point in support of my hon. Friend the Member for Oswestry (Mr. Poole), who I think made a most valuable contribution, but the Chancellor of the Exchequer has already agreed with the hon. Gentleman and there is no need, therefore, for me to press the point. As I understand it, our object between now and the Report stage—a comparatively short period—is not to try to restate the whole law upon these matters in such a form that it will be able to stand unchanged, for years. All of us realise that in a matter of such complexity, we could not hope in the few weeks available to attain that object. What I understand we shall set out to do is to try to find, between now and the Report stage, some scheme which will stop the flagrant abuses which are now taking place, but will not interfere with the great mass of schemes—and the large quantities of those exceptions which have to be catered for under any scheme—under the present system. Having done that, having tried to devise an interim shield for the Chancellor of the Exchequer, thereafter consideration shall be given to the wider aspects of the question which have been raised.
    I should like to suggest to the Chancellor for his consideration that when we come to that wider consideration, it might be the moment for setting up some committee to which all who have a special knowledge or experience can go. In that way it may be found easier to see all the pitfalls from the start, and to devise a final and complete scheme. I do not press that now; I only throw out the suggestion. We on this side will co-operate most wholeheartedly in the Chancellor's efforts between now and Report, and I certainly shall advise my hon. Friends —and I am sure they will agree—not to press any of their detailed Amendments —which may be found during our discussions to be wholly relevant—at this stage.
    11.45 p.m.
    Mr. Gallacher: I have listened to a lot of nonsense tonight, and I would like to say one or two words. I would like to speak from a class point of view, even though it does annoy the

    1027
    hon. and gallant Member for New Forest (Colonel Crosthwaite-Eyre), who said something about my travelling to Moscow. I would be out of Order if I told him where he should go. The hon. and gallant Member was all for protecting the just. The right hon. Gentleman the Member for West Bristol (Mr. Stanley) is all for saving the innocent.
    Mr. Stanley: We were not either of us referring to the hon. Member.
    Mr. Gallacher: I quite understand that. I quite understand what my category is in the eyes of hon. Members on the other side. Others of them seemed to desire to express their generosity towards the workers in the sense that they want to give them all kinds of gratuities and annuities and lump sums. The right hon. and gallant Member for Gainsborough (Captain Crookshank) was concerned about the man who had given great service in the war and had got a lump sum or something of that sort; he was concerned that that should not be taxed. With all their generosity, and their desire for justice, and their anxiety to protect the innocent, the marvel to me is how the Labour Party had to come into existence. It is obvious that there is no real meaning at the back of these expressions. Their only desire is to find, if they can, some way of protecting still those who are getting lump sums and who do not deserve them. An hon. Member referred to a man getting £4,000 instead of £5,000 a year, with £2,000 when he retires, who will have to pay taxation on the insurance premium. The simple answer is to let him take his £5,000 a year, and pay his Income Tax, and do without the £2,000 when he retires—save up for when he retires. That is the answer the workers have always had to give. To listen to Members on the other side, one would think that the workers of this country—or the widows of the workers of this country who were killed—
    The Chairman: The hon. Member will please confine himself to the matters before the Committee.
    Mr. Gallacher: I beg pardon, Major Milner. The hon. Member for Chippenham (Mr. Eccles) gave us an instance of a widow of a man who had been killed and
    1028
    stated that she had been granted so much a year by his firm. But where are these wonderful firms that have given the workers such money?
    Hon. Members: All over the country.
    Mr. Gallacher: I have had experience of that "all over the country". I will take a case in point. An hon. Member on this side has talked of native labour in India, which was given compensation when the business was closed down, by a firm in this country to keep up its reputation. Where in the name of God do you hear of anything like that? Can you show me a textile mill in Lancashire where, when 't was closed down, the workers were given compensation, to keep up the prestige of the firm? Can you show me a shipyard in this country which, when it was closed down, to keep up its prestige paid its workers compensation? It is just a lot of nonsense. I hope the Chancellor of the Exchequer, between now and the Report stage, is careful he does not leave any gaps which enable the artful dodgers to slip through. They will do him if they can.
    Clause ordered to stand part of the Bill.
    Clauses 15 to 17 agreed to.

    CLAUSE 18.—(Supplementary provisions as to retirement or other benefits and application to unincorporated societies, etc.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Colonel Crosthwaite-Eyre: There is one question I would like to ask. Can the Chancellor of the Exchequer, or anyone on the Front Bench opposite, say something about the definition of the whole-time director?
    Mr. Dalton: It is all going to be looked at by agreement reached between the two sides of the Committee.
    Clause ordered to stand part of the Bill.
    To report Progress; and ask leave to sit again.—[Mr. Michael Stewart.]
    Committee report Progress; to sit again Tomorrow.

  COMPANIES [MONEY]
  Resolution reported.
  "That, for the purposes or any Act of the present Session to amend the law relating to companies and unit trusts and to dealing in securities, and to bring the law of bankruptcy and the law relating to the registration of business names into conformity in certain respects with the law relating to companies as so amended, t is expedient to authorise—

  (a) the payment out of moneys provided by Parliament of any expenses incurred by the Board of Trade by virtue of the Act; and

  (b) the payment into the Exchequer of any fees payable or fines imposed by virtue of the Act.'

ORTHOPAEDIC HOSPITALS, SOUTH WALES
Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Michael Stewart.]
11.55 p.m.
Mr. George Thomas: I wish to raise a subject of major importance to the people of South Wales, and it is one which I believe reveals a story of human tragedy. This is a subject which was brought to my notice by the distressed parents who brought their five-years-old son to my office in the constituency which I have the honour to represent. The mother's story is best told in her own words, as she wrote it to me and, subsequently, on my advice, to this House:
"Will you help me in any way you possibly can concerning my tittle boy, Roger, aged five years. He has infantile paralysis down the right side, and has been attending the Prince of Wales Hospital at City Lodge, Cardiff, for three and a half years, waiting for attention, and on the urgent list since Christmas. When I make inquiries I am told he must wait his turn, but, in all fairness, I think, I have waited patiently enough."
The lady goes on to other domestic details that hon. Members of this House would find distressing. I did what any other hon. Member would do.. I made approaches to the only orthopaedic hospital there is in South Wales, and I found that this little patient is due to have an operation for elongation of the tendon Achilles. That operation is considered by surgeons necessary in order to assist the boy to walk properly.
Unfortunately, there is such an enormous demand for beds for in-patients that this child of this constituent of mine is but one of 121 cases that have been listed
1030
by the surgeons as of supreme urgency. The total number of patients approved for admission to this single orthopaedic hospital in South Wales exceeds 1,250, and this number, I am assured, has been artificially restricted by the surgeons of the hospital, who, realising the extreme difficulty in arranging admission, have fore-borne from recommending indoor treatment when there is any reasonable alternative. There is a bed capacity only of 134 in the hospital, which is supposed to meet the needs of a population of 2,000,000 people.
Before the war, it was customary to refer to South Wales as a distressed area. It would be equally true and equally apt to call it a neglected area. My hon. Friend who is going to reply to this Debate will be aware that we are in our present sorry position in South Wales because the voluntary hospital system failed miserably to meet the needs of our people. We had no planning whatsoever in other days to meet the health needs of our community. I do not want to saddle His Majesty's Government with the responsibility for the complete and utter neglect of previous Governments so far 'as the health administration in South Wales is concerned. But the Ministry of Works—and I am glad the Parliamentary Secretary is here to reply to this statement tonight—can by no means congratulate itself upon what it has done for South Wales since it has had the opportunity, from July, 1945.
In August, 1945, the Welsh Board of Health, recognising the priority of need to create an adequate orthopaedic service, invited the Prince of Wales Orthopaedic Hospital Committee to take over the ex-American Army Hospital at Rhyd Lafar. This is a hospital on the outskirts of Cardiff, which could have provided by now the Prince of Wales with an extra 350 beds. The Committee, naturally, accepted that offer with alacrity, and they have submitted a scheme to the Ministry of Works for its consideration and for its action. The scheme was submitted, if my information be correct, to the Ministry of Works on 24th July, 1946. The scheme has been approved by the Welsh Board of Health, and has been regarded by them as one of the highest priority. The tragedy of this is that the children who are so crippled are receiving no adequate treatment whatsoever. The waiting list at this hospital is growing all the time, and there is a deep concern on the part

1031
of the health administrators at the apparent lack of sense of urgency by the Ministry of Works. That is a concern which is shared, so I am informed, by all responsible medical authorities in South Wales.
Over 550 of the patients waiting admission to the Prince of Wales' Orthopaedic Hospital in Cardiff are children, and in a very great many cases the very nature of their disability prevents them from attending ordinary schools. This hospital is recognised by the Ministry of Education as a school hospital, and seven full-time school teachers are employed to teach these children, who are receiving medical treatment. The tragedy is that at the present time the greater part of those 550 children are not only losing the attention of which they stand in urgent need, but are suffering as far as their education is concerned. Some of these children will inevitably be handicapped throughout their life, but it is doubly unfortunate, I suggest to the House, that their mental development should be retarded, thus diminishing their already small chance of becoming useful citizens. The Ministry of Works needs to be reminded that there are some matters which must have a priority. There are some matters which deserve, by the very nature of their urgency, a sense of which appears to be lacking in this Department, to have immediate attention. There is never any use trying to find somebody to blame. What there is use in doing is to find somebody to probe, and I believe I have found somebody to probe. I think I have also found somebody who needs to be probed. Far be it from me to lay any blame, but I want to suggest that the Ministry of Works is not living up to its name as far as the hospitals of South Wales are concerned.
This is a human problem, and we cannot afford the apparently lethargic indifference or Chinese fatalism which says, "Do not do today what we can do tomorrow." I hope that when my hon. Friend replies to me, he will be able to give us substantial hope that this hospital, which I pass every week-end when I go home from my constituency, will not be allowed to rot any longer and that the 60 building operatives who are now in the building who are part of the mobile labour force and who are living in this hospital while engaged on the renovation of the camp, will be allowed to remain there
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after 30th June in order to put the hospital right and improve these amenities so as to give these children the opportunity to receive fair treatment.
Mr. James Callaghan: Before my hon. Friend resumes his seat, can he tell us what Happened after July, 1946? Has the Ministry of Works not made any answer to the suggestion to take the hospital over?
Mr. Thomas: I am very grateful to my hon. Friend the Member for South Cardiff (Mr. Callaghan) for drawing my attention to that matter. My information from the medical people interested is that they have had nothing since July, 1946. I would quote a letter I have received, dated loth May:
"Since early in 1946 we have been waiting for the Minister of Works to complete this work, but the main contract has not yet been commenced and the number of patients clamouring for admission steadily increases, and the position becomes more and more intolerable."
12.6 a.m.
The Parliamentary Secretary to the Ministry of Works (Mr. Durbin): I would like to begin by assuring the House and my hon. Friend that the Ministry of Works is not composed of hard-hearted men and women who wish to oppose the development of orthopaedic hospitals or indeed, of any kind of hospitals in any part of the country. I am sure my hon. Friend will be aware that all over the country we are faced by the acute human tragedy that the shortage of hospital accommodation everywhere brings to the notice of hon. Members. But I am sure my hon. Friend realises it is no part of the responsibility of my Ministry to decide what hospitals should be built or where they are to be built, or the order in which they are to be built. If that were the responsibility of the Ministry of Works, I would, in fact, be discharging the duties of the Ministry of Health, and what applies to hospitals in the field of health would apply in the field of education and elsewhere. The decisions as to the order in which these buildings are to be put up must rest with the Ministers responsible for providing the services.
It may be asked where the Ministry of Works comes into this story at all, and why is it that I am appearing to answer the case that has been presented by my hon. Friend. The responsibility of the Ministry of Works in regard to this case

1033
is of two sorts. First of all, we have to offer advice to the Department concerned with getting the building up, on purely technical problems, of a legal, planning and constructional character; and then it is our responsibility, when these difficulties are cleared out of the way, to get the building done. Unfortunately, in the case of this proposed hospital at Rhyd Lafar, the difficulties in the first place, as a building proposition, are very great and formidable. The camp or American hospital was a war-time construction and is composed largely of Nissen type substandard hutments. They are, to put it mildly, most unsatisfactory and unsuitable buildings for hospital accommodation.
Mr. G. Thomas: Is the Parliamentary Secretary not aware that the Welsh Department of the Ministry of Health have accepted this place as suitable? They want only minor alterations, if my information is correct.
Mr. Durbin: I am afraid my hon. Friend's information is not quite correct on this point. It wants substantial and costly works, alterations which will absorb sums of money running into six figures, and it is an extremely uneconomic kind of building, expensive at the beginning, and expensive in subsequent maintenance. Nevertheless, this is not regarded by the Minister of Works as a crippling objection. The second range of difficulties arises over the fact that the Ministry of Town and Country Planning do not feel able to give clearance over any long number of years for the continuation of this type of building on this particular piece of land, so that the combination of these two makes this, as a building proposition, not wholly satisfactory.
Finally, and in a sense most serious of all, through the very site, there is to be driven, in a reasonable period of time, a main arterial road. My information is that this will subtract some considerable fraction, amounting to a third of the total land and accommodation available. For all these reasons, therefore, there was considerable difficulty in arriving at a view as to the desirability of this piece of construction in the interests of the country as a whole, and I need hardly remind
1034
hon. Members and certainly not the hon. Member for Central Cardiff (Mr. G. Thomas), that there is a great scarcity of building labour and of building materials in South Wales as a whole, and that not a man and not a brick, and not a piece of timber, can be diverted to any project, however urgent, without taking away from buildings whose priorities have been considered higher in the previous decisions that have been taken by responsible Ministries. These are the difficulties.
I have two conclusions to offer. First I would not seek to deny that there has been considerable delay in this particular case. I must, however, offer a word of explanation of why that delay has taken place. Of course, if one goes to any regional office of any Ministry in these difficult transitional times, picks out a single case and looks at the dates upon it, one can construct a story that looks as though it were one of unnecessary confusion and delay. But that is an unfair way of judging the course of administration and the pace at which decisions have been taken, because it is the burden on the office as a whole that must be considered before the time taken to arrive at any single decision can rightly be judged. It is common knowledge that certain sections of our office in the Welsh region have burdens so great—for reasons which are so many, and so obvious, that I do not need to mention them—that some delay in a particular case is quite inevitable in view of the pressure, particularly upon the technical staff.
My second conclusion is that, despite these difficulties, despite these scarcities and despite the burden that rests upon our regional office, we are proposing to continue with this scheme. The work is in hand. Clearances are being sought, the legal business is being discharged, the project is included in our future building programme for that part of the country, and we hope to be able to give a starting date towards the end of the summer, or during the course of October.
Mr. Thomas: May I thank the Parliamentary Secretary very much?
Question put, and agreed'to.
Adjourned accordingly at a Quarter-past Twelve o'Clock

TOWN AND COUNTRY PLANNING
  Service Land Requirements (White Paper)
  Service Land Requirements (White Paper)
  Bankside Power Station
  Bankside Power Station
  OLD AGE PENSIONS
  OLD AGE PENSIONS
  NATIONAL INSURANCE (PERSONAL CASE)
  NATIONAL INSURANCE (PERSONAL CASE)
EMPLOYMENT
  Coalmining Industry (Vacancies)
  Coalmining Industry (Vacancies)
  Textile industries (European workers)
  Textile industries (European workers)
  Catering Industry (Fee-charging Agencies)
  Catering Industry (Fee-charging Agencies)
  EQUAL PAY (GOVERNMENT POLICY)
  EQUAL PAY (GOVERNMENT POLICY)
NATIONAL FINANCE
  Widows (Taxation)
  Widows (Taxation)
  U.S. Motor Cars (Imports)
  U.S. Motor Cars (Imports)
  Exchange Control Act (Proposed Order)
  Exchange Control Act (Proposed Order)
  ECONOMIC PLANNING
  ECONOMIC PLANNING
TRADE AND COMMERCE
  Concentrated Firms, Scotland
  Concentrated Firms, Scotland
  German Timber (Imports)
  German Timber (Imports)
  Crockery Supplies
  Crockery Supplies
  Waste Paper Collection
  Waste Paper Collection
  Bed Linen (Hotels)
  Bed Linen (Hotels)
BRITISH ARMY
  Personal Cases
  Personal Cases
  Welfare Committees
  Welfare Committees
  Tracked Vehicles (Public Highways)
  Tracked Vehicles (Public Highways)
  Burlish Camp
  Burlish Camp
  Requisitioned Playing Fields, Northolt
  Requisitioned Playing Fields, Northolt
  Huts, Conway (Release)
  Huts, Conway (Release)
  War Graves (Re-Burials)
  War Graves (Re-Burials)
  Letters to M.Ps.
  Letters to M.Ps.
  Germany (N.A.A.F.I. Prices)
  Germany (N.A.A.F.I. Prices)
  Canteens (Drinking Facilities)
  Canteens (Drinking Facilities)
  Savernake Forest (Ammunition)
  Savernake Forest (Ammunition)
  Training Areas, Breconshire (Warning Flags)
  Training Areas, Breconshire (Warning Flags)
  Release Conditions
  Release Conditions
  Missing Personnel (Inquiries)
  Missing Personnel (Inquiries)
PRISONERS OF WAR
  Marriage (British Women)
  Marriage (British Women)
  Labour (Receipts and Expenditure)
  Labour (Receipts and Expenditure)
  Repatriation
  Repatriation
  Restrictions
  Restrictions
  RIFLE ASSOCIATIONS (AMMUNITION)
  RIFLE ASSOCIATIONS (AMMUNITION)
  TERRORIST PRISONERS (INQUIRIES)
  TERRORIST PRISONERS (INQUIRIES)
  ATOMIC ENERGY
  ATOMIC ENERGY
  RETAIL LICENCES (CONSUMER NEED)
  RETAIL LICENCES (CONSUMER NEED)
  SOAP RATION (SUPPLIES, CROYDON)
  SOAP RATION (SUPPLIES, CROYDON)
  PENSIONS (LOSS OF LIMB)
  PENSIONS (LOSS OF LIMB)
PUBLIC HEALTH
  Lister Institute of Preventive Medicine
  Lister Institute of Preventive Medicine
  Croup (Deaths)
  Croup (Deaths)
  Smallpox
  Smallpox
  Diphtheria (Immunisation Returns)
  Diphtheria (Immunisation Returns)
  Diabetes (Deaths)
  Diabetes (Deaths)
  Rag Flock
  Rag Flock
HOUSING
  Applicants, Newark and Districts
  Applicants, Newark and Districts
  Selling Prices
  Selling Prices
  POPULATION, LONDON AND DISTRICT
  POPULATION, LONDON AND DISTRICT
  PARAFFIN (RETAIL LICENCES)
  PARAFFIN (RETAIL LICENCES)
  HOUSEHOLD COAL (REGIONAL ALLOCATIONS)
  HOUSEHOLD COAL (REGIONAL ALLOCATIONS)
  ELECTRICITY POWER STATIONS (POSITION)
  ELECTRICITY POWER STATIONS (POSITION)
  RAILWAYS (EXPENDITURE ON PROPAGANDA)
  RAILWAYS (EXPENDITURE ON PROPAGANDA)
  ROYAL NAVAL RESERVE (COMMISSIONS)
  ROYAL NAVAL RESERVE (COMMISSIONS)
Preamble
The House met at half-past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers.
  AGRICULTURE BILL.
  Brought from the Commons; read 1a; and to be printed.

WELLINGTON MUSEUM. BILL. [H.L.]
2.35 P.m.
Order of the Day for the Second Reading read.
LORD HENDERSON: My Lords, I beg to move the Second Reading of the Wellington Museum Bill. This Bill is framed to give effect to a most generous desire by the noble Lord, the Duke of Wellington, that Apsley House in Piccadilly, which is held for the benefit of the Dukes of Wellington, should be presented to the nation and the principal part of it used as a museum where objects associated with the first Duke of Wellington and his times may be exhibited. This is an immensely valuable gift and I am sure we would all wish to join in expressing gratitude to the noble Duke for his generous spirit in making this offer.
Apsley House, well-known as "No I London," is one of the few great old London houses still surviving as a private residence. Externally it is an example of the severely classical architecture of the early 19th Century. Internally, three rooms, including two state rooms on the first floor, retain their Adam decoration while the remainder preserve unaltered their typical decorations and furnishings of a great town house of the age. By accepting this splendid gift, we are, therefore, acquiring for posterity an outstanding historical monument from which may be reconstructed, more vividly than from written records, the atmosphere of a great period in our history, which presents so many striking parallels to that through which we are now passing.
386
The value of this gift is increased many times by the inclusion of a superb collection of personal objects and relics of great historical and artistic interest. To dwell on these in detail now would take too long, and many of your Lordships will, no doubt, already have seen the illustrations and read the article in the Times of May 24, which gives an excellent appreciation of this veritable treasure house. Suffice it to say that there are 200 pictures, 150 of which belonged to the first Duke, the remainder being the personal property of the noble Lord, the present Duke. In addition, there is a rare collection of plate, porcelain, jewelled orders and decorations belonging to the great Duke. I am confident that all noble Lords will wish that the Government should accept this noble gift.
It may be wondered why legislation is necessary to give effect to the noble Duke's offer. It is required in order to remove certain restrictions on alienation of the property, which were imposed by the Wellington Estate Acts passed between 1812 and 1839 to "express the nation's gratitude to the first Duke by granting substantial sums of money to certain Trustees to purchase estates for him and his successors. These Acts provided that all manors and estates so purchased should be held in trust for the Dukes of Wellington, and that the Dukes should not be able to bar the statutory entail. It is also necessary to amend previous legislation in respect of the gift of the valuable pictures, plate and other objects, which were assigned by the first Duke to the Trustees to descend as heirlooms with a restriction on alienation and disposal similar to that placed on the Wellington Estates. The noble Lord, the Duke of Wellington, will agree with the Government a list of the objects to be used for the Museum, and the effect of the Bill will be to free from restriction such of these articles as were included in the first Duke's assignment.
It is proposed to transfer to the Crown the freehold interest in Apsley House and site, with its garden and forecourt and the collection I have mentioned. The principal part of the House will become the Museum, and may also, with certain safeguards, be used for Government entertainment or for other public purposes, subject to the Duke's consent and consistent with its continued use as a Museum. The remainder of the building, together with the

387
garden, will remain for the use of the Dukes of Wellington as a private residence, free of rent and rates. The Government will be responsible for the ordinary landlord's repairs and the Dukes will assume the responsibility of a normal tenant. The Minister of Works will look after the care of the fabric of the house, while the Minister of Education will control the Museum, through the agency of the Victoria and Albert Museum. By the proposed arrangement, the descendants of the first Duke will continue to be personally associated in a real way with the house in which their illustrious ancestor lived.
In the unhappy event of the Dukedom of Wellington becoming extinct, complete possession of the whole of the House and its site will revert to the Minister of Works. If the house becomes damaged by fire or other accident beyond hope of restoration to its original character, the Minister, after payment to the then Duke of a sum compensating him for his loss of rights under this Bill, may use or dispose of the house and site as he thinks fit. But compensation will not be payable if the damage is due to negligence by the Duke or his servants or agents.
As regard the financial aspects of the arrangements proposed in the Bill, the house with garden is worth about £50,000 so long as the existing restrictions on its disposal apply. The open market value without these restrictions is about £400,000. The artistic and historical treasures to be presented arc worth up to another £400,000. Against these, the cost of adaptation and repair is estimated at £50,000, and the cost of annual maintenance thereafter at £2,200. The expense of running the Museum will be about £5,000 yearly. The annual value of the rent and rates for the flat, which will be retained by the Duke, is an insignificant sum compared with the value of the unique building and its precious contents which will be transferred to the nation. Indeed, the historical and sentimental value of what the nation stands to receive cannot be truly assessed in terms of money. I feel sure, therefore, that all noble Lords will agree with the purpose of this Bill, which will secure to the nation a priceless possession and will at the same time commemorate, far better than any statue or epitaph, the undying
388
glory of the great Iron Duke himself. I beg to move that this Bill be now read a second time.
Moved, that the Bill be now read 2a.—(Lord Henderson.)
2.43 p.m.
VISCOUNT SWINTON: My Lords, the Bill so happily proposed by the noble Lord is one which I am sure everyone in the House will cordially support. As the noble Lord said, it makes effective the public-spirited offer of the Duke of Wellington and its wise acceptance by His Majesty's Government. It is indeed a most generous offer and entitles the present Duke to that charming title which his father bore, by almost universal consent, in his own home— "His Gracious." If St. Paul's is to be dwarfed or rivalled by a bigger and better power station, "No. I, London" will be preserved in all its environment, and I think it is an excellent arrangement in every way. The noble Lord said it was most fitting that the Duke of Wellington should continue to reside in Apsley House. In that way the agreement carries out in its true spirit and intent the trust which the British Parliament and British people created for the first Duke and his successors, and all the historic memories and traditions will be preserved.
Apsley House and its treasures, so many of which bear witness to the part the great Captain played in another fight for freedom, will be enjoyed by the people of London and by visitors to the capital from the Commonwealth and from all over the world. Excellent, too, is the proposal that the great house, with its treasures, shall be used not only as a museum, but shall be available for Government hospitality. We have always been at a disadvantage in this country in comparison with some other countries, France in particular. When the Government entertains, we have none of those wonderful palaces, with their tapestries and furnishings, in which we are entertained whenever we go on a mission to Paris. Apsley House will go a long way to filling that want, and surely no place could be more appropriate for that purpose. Apsley House is in a peculiar sense part of British history. There the crowds so often cheered the great Duke, and once, at any rate, they broke his windows; both he treated with equal disregard. And to that house and its venerable

389
occupant, through the long years of peace that followed his victories, sovereign and subject alike turned, almost as a matter of course, for wise counsel in difficulties great or small. Whether it was the inconvenience of sparrows in the Great Exhibition, or even graver constitutional issues, the great Duke was always the one to be consulted. All these historic memories will be preserved and perpetuated in this felicitous agreement. It is very appropriate and very English.
THE EARL OF PERTH: My Lords, we on these Benches would like to express our support of the Bill. I can say only that we wish to associate ourselves with the appreciation already voiced of the magnificent and roost generous gift made to the nation by the present Duke of Wellington.
On Question, Bill read 2a, and committed.

TRANSPORT BILL.
2.48 p.m.
House again in Committee (according to Order).
[The EARL OF DROGHEDA in the Chair.]
Clause 4 [Powers of the Minister in relation to the Commission]:
VISCOUNT SWINTON VISCOUNT SWINTON moved, in subsection (1), at the end to insert:
"Provided that the Minister shall not give to the Commission a direction in relation to any matter the effect of which, taking one year with another, will be or will be likely to be, that the revenue of the Commission will be less than sufficient for the meeting of charges properly chargeable to revenue, unless the Minister shall at the time of the giving of such direction notify the Commission that it is given in the interests of national security."
The noble Viscount said: This Amendment is one which I think is simple and obvious, and I hope will be readily accepted by the Government. Under Clause 3, which we have passed, it is laid down by subsection (3) that all the business carried on by the Commission which forms part of one undertaking—I summarize it—shall be carried on, so that, taking one year with another, the Commission shall be able to discharge all their proper obligations; in a word, shall be able to pay their way.
Clause 4 gives the Minister power to give directions of a. general purpose in the national interest. Without going into the merits of what directions the Minister
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should be able to give, surely we must all agree on this: that it would be utterly wrong, and I am sure it cannot be the intention of the Government, that the Minister should be able to give to the Commission directions which would override the fundamental principle of Clause 3, that the Commission should pay their way. If that is the intention, as I feel sure it is, it is right and proper that that should be in the Bill. It is a proper direction, if I may so put it, for Parliament to give to the Minister, and it is a desirable safeguard, in his own interests, for a Minister to have. It may be said that Clause 3 governs this. I am sure they are completely disjoined. I do riot offer a lawyer's opinion on that sentence; if it is doubtful, I suggest it should be made clear.
It may also be said that it is the duty of the Commission to frame schemes of charges which will be submitted to the Transport Tribunal in order that they may do the difficult task of combining proper transport facilities with such charges as shall enable them to carry on paying their way. But unless a provision of this kind is put in, it would be possible for the Minister to make—and indeed he may be pressed to give to the Commission—directions which may completely override a scheme which the Commission had presented to the Transport Tribunal, and which the Transport Tribunal had approved. This is what will happen: with great care a scheme of charges has been framed; everybody has been heard before the Tribunal; the matter has been thrashed out; and the Tribunal has given its judgment and fixed a. scale of charges. The Minister then comes and gives a direction which is inconsistent with the scheme which the Tribunal has made. This will throw the whole of the findings of the Commission out of order. What is to happen? Is the direction of the Minister to override the Considered judgment of the Transport Tribunal, which has sat to see that the Commission have the right fares to enable them to pay their way and, at the same time, to safeguard the interests of the public in the provision of adequate facilities? Is the Minister to override that? I do not know how it could work.
The Commission cannot raise their fares without going -back to the Tribunal with a new scheme, but if new duties are put

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upon them by the Minister, and new obligations which are not covered by the scheme of charges, then one of two things has to happen: the Commission must either completely disregard the Minister's instructions—and I suppose in that case it would be within his competence to remove the Commission and appoint somebody else—or they will carry it out and get hopelessly into debt. That means that the Minister will have to go to Parliament for a subsidy, and, in that case, the whole fundamental principle of Clause 3 —that the Commission shall pay its way —goes by the board. I am quite sure that this is not the sea of difficulties on which the Government wish to launch this unhappy barque, and if it is not, then surely we ought to make it plain by putting in some words (I have no particular affection for my words) that any direction which the Minister gives must be subject to the guiding principle that he must not give the Commission directions which would prevent their paying their way. I beg to move.
Amendment moved—
Page 6, line 30, at end insert the said proviso.—(Viscount Swinton.)
LORD MORRISON: The noble Viscount began by saying that his Amendment was simple and obvious. I would like to ask the noble Viscount whether he is absolutely certain that the Amendment is also necessary. He said he was not sure, and he quoted Clause 3 which, so far as I understand it, lays it down quite clearly that it would not be competent for the Minister to give a direction to the Commission to contrary effect. In other words, the Amendment seeks to prevent the Minister doing something which he would not be competent to do. I am perfectly sure that the noble Viscount does not wish to put unnecessary words in the Bill, and perhaps he has overlooked that there is yet another clause, Clause 85, to which I would direct his attention, which lays down, again quite clearly, that:
"Neither the Commission nor the Transport Tribunal shall do anything in the exercise of their respective powers as respects charges and the submission, confirmation, and alteration of charges schemes which in their opinion will prevent the Commission from discharging the Commission's general duty to secure that their revenue is not less than sufficient for making provision for the meeting of charges properly chargeable to revenue, taking one year with another."
VISCOUNT SWINTON: Will the noble Lord read on, because the very next words in that clause say:
"or which in their opinion will prevent the Commission from giving effect to any direction of the Minister under any provision of this Act."
Therefore, if the Minister had given a direction which ran counter to the first part, they would be in a dilemma, because they would have to obey the Minister.
LORD MORRISON: That was exactly the argument I was trying to develop. Perhaps the noble Viscount will make absolutely certain that his Amendment is necessary, because the Minister, like any other citizen, is compelled to obey the law. It would be impossible for the Minister to give an instruction to the Commission that the Commission could not possibly carry out without breaking the law.
VISCOUNT SWINTON: I will refer that to the great lawyers in the House.
VISCOUNT SIMON: It seems to me, from what the noble Lord opposite has just said, that there is really no difference of view between himself, speaking for the Government and my noble friend, Viscount Swinton, in moving his Amendment, as to what the position secured under this Bill ought to be. There is no difference as to that. The noble Lord concedes in his speech, in effect, that the Minister ought not to give a direction, the carrying out of which by the Commission might result in upsetting the balance of expenditure on the one side and income on the other, so that the Commission and their operations are no longer self-supporting.
LORD MORRISON: If the noble Viscount will allow me, my case is that the Amendment is entirely unnecessary.
VISCOUNT SIMON: I meant to imply that; that is to say, there is no difference between the two sides as to what we want. The question is whether the Bill as it is drawn makes it clear (because it is always desirable to be clear) that notwithstanding the very wide powers given to the Minister in Clause 4, that is the result which will be secured. I am afraid I see great difficulty in thinking that it is. This is not a matter especially for lawyers or people trained in the law; it is a matter of careful reading of words and of common sense. If one takes Clause 4, it will not be disputed that,

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on the face of it it gives the Minister very wide and general powers. I will just read the first words.
"The Minister may, after consultation with the Commission, give to the Commission directions of a general character as to the exercise and performance by the Commission of their functions in relation to matters which appear to him to affect the national interest."
Observe first that, though he has to consult the Commission, that is merely a preliminary. The Commission may have a different view as to what is wise, but that will not deter the Minister from giving the directions if he thinks he would like to do so. The Commission do not control what the Minister decides at all. Suppose that the Minister, for what he thinks are good and important reasons, gives a direction, the result of which will be greatly to increase the expenditure of the Commission in a given year, perhaps in a series of years. Undoubtedly they would have to pay whatever charges it might be under their main heads of expenditure. I do not deny that the Commission might then be asked, at the same time, to devise a new set of rates and charges in the hope they would get a bigger income to meet the bigger expenditure, but that is not an infallible remedy. One cannot be sure that one can order more and more expenditure and cover it by making higher and higher charges, because there comes a point when the people will not pay the charges, then one will be "in the soup." So I should think that it would be carrying out the admitted intention of the Bill, which is the intention of the noble Lord, Lord Morrison, if it were made clear that the Minister, in giving these directions, should not give a direction which would have the effect that the revenue of the Commission would be less than sufficient for the meeting of the charges properly chargeable to revenue.
My noble friend has introduced a qualification which he did not mention which I think is quite right. It is:
Unless the Minister shall at the time of the giving of such direction notify the Commission that it is given in the interests of national security."
If it be absolutely necessary in the interests of national security that this overriding direction should be given, that is provided for in my noble friend's Amendment. Does it not appear to the members of the House that it is very unwise for the Legislature to leave Clause 4, sub-
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section (1) as it is, which on the face of it gives the Minister, whatever the Commission may say, a power to give directions to the Commission which may obviously have the result of completely upsetting the balance of calculated expenditure, and which consequently is likely to have, at any rate for some time to come, a disturbing effect, which we all agree we do not want to produce in the accounts of the Commission?
With great respect, I would have thought that it was actually in the interests of the Government to insert this proviso. They may in some quarters be suspected, because once they have nationalized transport it may be thought that there are interests connected with transportation which they would be anxious to serve without any regard to the necessity of making the Commission's work self-supporting. The Government do not want that. If the Minister is pressed to do it, as he may be by Parliament, he wants to be able to give a good answer. What better answer can he give than that the Act of Parliament itself does not allow him to do it? The Minister's hand is strengthened by this, if he really means he is not going to do it, and I quite accept that he is not. I cannot see, first, how it does any harm; and, secondly, I cannot affirm that, as the Bill stands, it is plain that he cannot do it. I should have thought it was a great protection, not necessarily to this Minister but to any Minister in the future, if he is pressed, as he might be, to give directions to the Commission which would result in the Commission incurring greatly increased expenditure without the prospect of paying it out Of revenue, for him to say that the language of the Bill, which expresses the intention of the Government and the Opposition, does not allow him to do it. Therefore, for my part, I would have thought it was much wiser to put in the words proposed by my noble friend's Amendment.
LORD HAWKE: I should like to support the noble Viscount, Lord Swinton, in the Amendment, which also bears my name. It seems to me that if the Bill stands unamended a great deal is going to turn ultimately on the words "the national interest," because it is left to the Minister to decide what appears to him to affect the national interest. I submit that there is a very reel reason to believe that all sorts of thing: might be held to

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be in the national interest in the future, and that the Commission may well be put into debit as a result of directions by the Minister. The railways play a large part in the lives of us all, and there is an almost overwhelming temptation to bring politics into railway management. Some of us know how this happens in certain other countries, and, of course, it is always in the national interest. We should regard with great misgiving the starting of anything of that sort in this country. The ground has already been prepared here, because the public have been promised great things, and they will probably kick when the inevitable disillusionment sets in.
I do not think that those who voted for the nationalization of the railways because they thought they were going to get free travel are very numerous; but those who did vote for it undoubtedly voted because they thought they were going to get better travel—not merely better than war-time travel, but better than pre-war travel. I am afraid they are going to be disillusioned. The improvement of service, whether on account of maintenance, renewals, or capital, must, of course, ultimately come from revenue, either as a direct charge or as interest on the capital borrowed. The future net operating revenue is mostly speculative. I. personally, believe it will be very much larger than it was before the war. But if that is to be the case there will have to be some very heavy increase in rates and a draconian attitude towards expenses. Senor Miranda in the Argentine has not been very long in proposing some very heavy increases in rates for his new playthings, but judging by his past career as a Government monopolist, he is made of sterner stuff than are our Ministers.
Here the Minister is going to be in a very awkward dilemma. He has, first of all, to agree what can be done out of the funds accumulated and not spent; and he has also to agree what can be put aside each year for renewals, and what capital programme is to go on. Is he going to make himself unpopular, either by raising charges or failing to do something to-wards satisfying the electorate? I think he will have to do both. Or is he going to let the thing slide, and let the railways pay enough to meet their proper charges?
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This Amendment is designed, as my noble friend said, to save the Minister from himself, his colleagues, and the general public. Surely an Amendment which will enable the Minister to say to the public: "It may be in the national interest, for all I know, but I cannot give you anythng unless you are prepared to pay for it, either in your rates and fares, or else by saving up the money out of your incomes and lending it to me to perform the job"— surely an Amendment which will allow the Minister to plead the Act in this way is one which any Minister ought to welcome.
LORD RANKEILLOUR: The noble Lord, Lord Morrison, pleaded Clause 85 as a sufficient answer to this Amendment, but I do not think he read aloud to the House the last words of that clause. It says:
"and it is hereby declared that the duty of the Commission to give effect to such directions as aforesaid"—
that is, the directions of the Minister—
"includes a duty to make such applications and to do such other things in relation to the making or alteration of charges schemes as are required in order to give effect to any such direction."
I read this clause as meaning that the Commissioners can offer only temporary resistance to the Minister. They are bound to protest, and, indeed, to refuse to carry out his directions at the moment. But if the Minister says: "You must carry out these directions, whether it involves increased charges or not," they are bound to increase the charges. It seems to me that the Amendment before the House is absolutely necessary, in view of these words.
3.9 p.m.
LORD GIFFORD: I should like to support this Amendment very strongly. I believe it is a great improvement, and I also believe it is absolutely necessary, although not perhaps in these exact words. I think on reflection His Majesty's Government will realize that some Amendment which conveys the sense of the Amendment of the noble Viscount, Lord Swinton, ought to be put into the Bill. In yesterday's debate, on the Amendment of the noble Lord, Lord Balfour of Burleigh, an instance was given of the sort of occasion where the Minister might quite properly give a direction to the Commissioners as the recent fuel

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crisis, where the Minister gave instructions that coal traffic should take precedence over all other traffic. I believe that under the present wording of the Bill the Commissioner could give directions in the national interest—and quite properly —in many other cases, small in themselves but which in the aggregate would place a very grave burden upon the Transport Commissioners and cause a serious loss of revenue.
I would like to give one instance which occurs to me. Supposing, that in an isolated coal mine there were a small body of six men who had to be at the mine at two o'clock in the morning to raise steam for the winding machinery or some other machinery. It is obviously in the national interest that those men should be at the mine at that early hour, and the Minister could give directions to the Transport Commissioners to run a special bus, obviously at a great loss, to get those men to the mine. The proper way of doing it would be for the Transport Commissioners to provide a truck or to hire a bus outright. I might carry this a stage further. It might well be said that it was in the national interest for the cleaners and the people who put on the heating in the National Coal Board offices to be taken to their work at an early hour, so that the offices would be ready for the Commissioners when they came to work. You can go on like that, and practically everything is in the national interest—it definitely is so, if you look into it carefully. You could say that it was in the national interest that children of school age should be carried free; and also members of the Armed Forces or old age pensioners. Therefore, if the Minister can override the obligations that the Commission's services shall pay their way, I think we shall get into a lot of trouble.
There is only one other point that I would like to make before I sit down. I think perhaps were are inclined to confuse the two words "national interest" with "national security", and I am glad to see that the noble Viscount, Lord Swinton, used the words "national security" in his Amendment. I think I have given some quite reasonable and sensible instances to show that this Amendment, or something like it, is of great importance and absolutely necessary.
LORD BALFOUR OF BURLEIGH: Before the Minister replies, may I venture to say a word in support of this Amendment? It seems to me that my noble friends opposite have pat their fingers on a real gap in the Bill. I do not think the Bill would be complete without the Amendment, and I should like to support the point made by the noble Lord, Lord Gifford. I had the pleasure of having an agreeable interchange with the Front Bench last night, on a previous clause, and it seems to me that here we have sonic words which might well be inserted in that subsection. The noble Viscount the Leader of the House went nearly as far—he withdrew a little bit at the end—and said that the Minister would give directions only when the interests of national security demanded it. I would like to put before the noble Viscount whether., before the Report stage, he will consider putting these admirable words in the first subsection of this clause.
LORD MORRISON: I am sure that noble Lords will forgive me if I do not answer in detail the many interesting points that have been raised in the course of this discussion. As the noble Lord, Lord Gifford, wisely observed a moment ago, "You can go on like that". Perhaps the noble Lord, Lord Hawke, will forgive me if I do not follow him on his long journey to the Argentine to deal with what is happening there, or conduct an examination into the reasons why the British electorate voted as they did at the last General Election, and into what general consequences will ensue.
As the noble and learned Viscount, Lord Simon, has said, the position is perfectly simple and plain, and the point a perfectly short one. The noble Viscount, Lord Swinton, who moved this Amendment, considers that it would be safer—and the noble Viscount, Lord Simon, supports him—to have the words he has indicated put into the Bill, lest the Minister, in spite of anything in the Bill at present, should give a direction to the Commission. I reply that I was advised, and strongly advised, that it would not be competent for the Minister to give such a direction. I am quite willing to consider an Amendment requiring the Minster, in giving any direction, to have regard to the duty of the Commission under Clause 3 (3).
VISCOUNT SWINTON: May I ask what is meant by that? These words like "after consultation" and "to have regard to" may mean, "I am considering that, but I am not going to carry it out". The Minister is going back a little upon what he said in answer to me the first time, where I thought we were entirely agreed, because in his first speech he said that there was no intention that the Minister should give any direction which would stop the Commission paying its way. In effect, he said he is as much bound by Clause 3 as are the Commission. I do not profess to give a legal opinion on that, but at any rate he cannot have a higher legal opinion than that. of the noble and learned Viscount, Lord Simon, who says quite definitely, in his opinion, that the Minister is not bound by Clause 3. Surely we need not leave that to the uncertainty of the court, unless the highest legal authorities on the Government side can say with absolute certainty, "We are certain that the Minister is bound by Clause 3, and could not give such a decision; and he would be acting illegally if he did." Surely the sensible thing to do is to put in these words which would carry out our common intention.
LORD MORRISON: I do not retract at all from what I said the first time, that the Minister must be treated like any other citizen—he must obey the law. My advice was that if the Minister did give a direction to the Commission on the lines indicated, it would not be competent for him to do so. Since then, the noble Viscount has added to that point and his colleague has also expressed his views upon it. As a result of that, as a mere layman, I have promised that I will consider whether it is possible to consult with the noble Viscount upon this matter—I am advised there is no doubt about the position—to see whether the position could be strengthened by the insertion of words requiring the Minister to have regard to the duty of the Commission under Clause 3 (3). If the noble Viscount accepts that position, steps will be taken, in consultation with him, to submit words for his approval. If, on the other hand, he is convinced that the advice I have received is correct—that it would not be competent for the Minister to do so—his Amendment becomes unnecessary.
VISCOUNT SWINTON: Of course, I would not put down a legal Amendment, but I am advised that the Minister would not be bound by Clause 3 and could give an overriding decision. The noble and learned Viscount, Lord Simon, an ex-Lord Chancellor, has said that he is of opinion that the Minister is not bound. The noble Lord has said that he cannot answer that as a layman. I say there ought to be no doubt about it. There is no doubt that we both mean the same thing. I do not want to bind myself to any agreement until I understand what it means. The question is one for lawyers, as to whether we need words to make it clearer. When the noble Lord puts to me the phrase "in coming to terms he shall have regard to," I do not accept it, because it does not mean the same thing. That does not mean that the Minister cannot do this legally; it means that the Minister in making up his mind whether or not to do it merely takes it into consideration. If, on the other hand, he will say to me "we do mean the Minister to be as much bound as the Commission, by exactly the same rules, and it is only a question of getting the lawyers together to decide whether extra words are necessary for that purpose "I accept the proposal.
VISCOUNT MAUGHAM: To me, as a lawyer, it is perfectly clear that the Minister and the draughtsmen of the Bill have made it clear that the Minister may do something under Clause 4 which the Commission cannot do in Clause 3 (3)—namely, he could give a direction which would supersede subsection (3) for things which might affect the national interest. The two things are not the same. If the noble Lord who replies for the Government comes to the conclusion that the Minister is bound by subsection (3) of Clause 3, he could not give any direction in the national interest which would be beyond the powers of the Commission. It seems to me clear, therefore, not only for that reason but for the general reasons given by the noble and learned Viscount, Lord Simon, that something further is necessary. If you do not make it clear that the Minister may do things—which may not be very economic—in the national interest you have a gap in the Bill.
LORD MORRISON: I should like to tell the noble Viscount, Lord Swinton,

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that I do not wish him to be tied to any particular words. That was not my intention. If it is only a question of getting the lawyers together to agree on words, I am perfectly prepared to accept that.
THE MARQUESS OF SALISBURY: It has been a valuable discussion, but I am not quite clear on one point: whether the Government think that this Amendment is undesirable or merely unnecessary. That is rather an important point. If they regard it as merely unnecessary, I do not see what objection they can have to putting it in. We think it is necessary; it only makes clearer what the Government believe to be already in the Bill. The noble Lord, Lord Morrison, who has treated the House with great courtesy and consideration, has suggested that we should discuss the matter; that is a course we have adopted several times with a view to arriving at an agreed form of words before the next stage of the Bill. But we cannot leave everything over until the next stage, and this does seem to be a case where it might be wise to come to a decision now. It is just a question whether an additional plank is necessary for this gap or not. If we think the plank is necessary, I suggest that the Government ought to be very willing to set up that plank.
LORD MORRISON: Perhaps the noble Marquess will allow me to quote an appropriate passage from my brief:
"The amendment is entirely unnecessary as, having regard to the requirement in Clause 3, subsection (3), that the Commission shall make both ends meet, it would not be competent to the Minister to give a direction under Clause 4 (1) to a contrary effect."
I think noble Lords wall see the position.
VISCOUNT SWINTON: The noble Lord is quoting a brief, which contains a lawyer's opinion. Against that we have the considered opinion of two ex-Lord Chancellors that what he is reading out now is bad law.
LORD MORRISON: Whether or not it is bad law, I was reading it out to explain the position to the noble Marquess. There seems to be some doubt about whether the Government were objecting to this Amendment on the ground of its being unnecessary or of its being undesirable. That was what I was endeavouring to explain, and my instructions were that it was unnecessary.
THE MARQUESS OF SALISBURY: I think it all reinforces the plea I have just put to the Government. I have said that if it were objectionable there would be a reason for getting together privately and seeing whether we could bridge that gap. If there is no gap, and it is merely a question of getting an additional reassurance, I do not see on what grounds they do not accept this Amendment.
LORD RANKEILLOUR: Is the noble Lord prepared to argue that under Clause 85 the Minister cannot force the Commissioners to put up their charges and to take any other steps, whatever the cost, that the Minister may direct?
LORD MORRISON: I am advised that it would not be competent for the Minister to do so.
VISCOUNT SIMON: I wish to pay my respects to the very dogmatic and summary way in which this matter has been dealt with. I observe that the noble Lord's advice does not extend to this; that there is nothing wrong with the words of the Bill. It is recognized that the Amendment is in extremely appropriate words. The question is simply whether we are to put into the Bill at this stage a declaration which, so far as I have heard, is properly worded and which makes it clear that whatever the Minister, in his discretion, does under Clause 4, he cannot give a direction of his own motion which would have the effect of making it necessary to charge a wholly new series of rates. Making a scheme of rates is a very elaborate business, and two years are necessary for doing it. If the Minister is at liberty under Clause 4 to spend, say, another £250,000, he cannot surely do that if it will thereby not square with the Commission standing upon its own feet.
I cannot see why the Amendment, which is properly drawn, should not be put in the Bill. It gives the Minister himself a protection against those who are pressing him to do something he ought not to do, and it satisfies the grave doubts which some of us entertain as to whether the advice the Minister has received is quite clear.
3.30 p.m.
VISCOUNT ADDISON: We have discussed this for quite a long time, and I did interject that the words "or will be likely to be" will be extremely difficult to decide upon, and might be contested—
VISCOUNT SIMON: Then leave them out.
VISCOUNT ADDISON: I knew that I should immediately get that response, but I would suggest to the noble and learned Viscount that we want to try and meet the point if it is in doubt—which I am advised it is not. But I am perfectly certain it would be in doubt if we had the words "or will be likely to be." I cannot imagine any court ruling on it, but I do ask the noble Lords to accept the assurance that we will consider that Amendment. I think that is an entirely reasonable suggestion, and I hope that the noble Lords will be willing to accept it.
THE MARQUESS OF SALISBURY: I do make the point that the Government are being a little unreasonable about this matter. They have no objection to the Amendment—not the slightest; all they say is that it is not necessary. The noble Viscount the Leader of the House made one small suggestion. He said he would like to take out the words "or will be likely to be." We at once met him on that. There is no gap; there is a bridge, and we feel that it is a question of whether the bridge is absolutely safe for traffic or not. We want it secure, but there is some hesitation to put in the extra plant to make it secure. It is really an absurd situation. Here is an Amendment which the Government themselves think is acceptable; they have no objection at all to it. We believe it to be important, and I do, therefore, urge them not to carry opposition to it any
further. I think that a continuation of this argument would be very tiresome and unnecessary, and therefore I suggest that we take it to a Division, and I hope the Government will vote for it.
VISCOUNT ADDISON: It is very unreasonable of the noble Lords to use their large majority in this way. They can carry it; of course they can carry it. I am well aware of that. But at the same time I pointed to only three or four words, and immediately it was proposed that they should be deleted; and I am not by any means certain that we could not delete a few others. Our offer is to consider it entirely bona fide, to tie that up to the obligation under Clause 3. I think that is the right and proper way of dealing with it—whether or not the noble Lords like to carry it to a Division, which I think would be very unreasonable.
THE MARQUESS OF SALISBURY: I think the proposal that the Leader of the House has now made is exactly the right one. We will pass it now, and if the Government can show us before the Report stage that certain Amendments are reasonable, we shall be ready to consider those. I think that is much the best way of dealing with it.
LORD BALFOUR OF BURLEIGH: We are voting on it, with the exception of the words "or will be likely to be."
On Question, Whether the said proviso, as amended, shall be there inserted; Their Lordships divided: Contents, 87: Not-Contents, 21.

CONTENTS.

St. Albans, D.

Chaplin, V.

Butler of Mount Juliet, L. (E. Carrick.)

Falmouth, V.

Cholmondeley, M.

Hill, V.

Carrington, L.

Reading, M.

Hutchinson, V. (E. Donoughmore.)

Cawley, L.

Salisbury, M.

Charnwood, L.

Willingdon, M.

Long, V.

Cherwell, L.

Maugham, V.

Clanwilliam, L. (E. Clanwilliam.)

Abingdon, E.

Portal, V.

Albemarle, E.

Ridley, V.

Courthope, L.

Amherst, E.

Simon, V.

Craigmyle, L.

Beatty, E.

Swinton, V.

Croft, L.

Craven, E.

Wimborne, V.

De L' Isle and Dudley, L.

De La Warr, E.

De Saumarez, L.

Dudley, E.

Addington, L.

Denham, L.

Fortescue, E. [Teller.]

Ashton of Hyde, L.

Elgin, L. (E. Elgin and KinCardine.)

Iddesleigh, E.

Balfour of Burleigh, L.

Lucan, E.

Balfour of Inchrye, L.

Fairfax of Cameron, L.

Radnor, E.

Barnby, L.

Fairlie, L. (E. Glasgow.)

Rothes, E.

Biddulph, L.

Gifford, L.

Selkirk, E.

Brand, L.

Grenfell, L.

Stanhope, E.

Brassey of Apethorpe, L.

Hampton, L.

Vane, E. (M. Londonderry.)

Broadbridge, L.

Harris, L.

Bridgeman, V.

Broughshane, L.

Hatherton, L, [Teller.]

Hawke, L.

O'Hagan, L.

Schuster, L.

Hutchison of Montrose, L.

Palmer, L.

Shute, L. (V. Barrington.)

Llewellin, L.

Polwarth, L.

Teviot, L.

Lloyd, L.

Rankeillour, L.

Teynham, L.

Mancroft, L.

Ravensworth, L.

Thurlow, L.

Mendip, L. (V. Clifden.)

Remnant, L.

Tweedsmuir, L.

Monck, L. (V. Monck.)

Rochdale, L.

Wemyss, L. (E. Wemyss.)

Monkswell, L.

Rushcliffe, L.

Wolverton, L.

NOT-CONTENTS.

Jowitt, V. (L. Chancellor.)

Dukeston, L.

Nathan, L.

Addison, V.

Henderson, L. [Teller.]

Quibell, L.

Hall, V.

Holden, L.

Rusholme, L.

St. Davids, V.

Kershaw, L.

Shepherd, L.

Lucas of Chilworth, L.

Simon of Wythenshawe, L.

Ammon, L.

Morrison, L.

Strabolgi, L.

Chorley, L.

Mountevans, L.

Walkden, L. [Teller.]

Darwen, L.

Resolved in the affirmative, and Amendment agreed to accordingly.
3.48 p.m.
LORD BALFOUR OF BURLEIGH LORD BALFOUR OF BURLEIGH moved to leave out subsection (2). The noble Lord said: With this Amendment to omit subsection (2) we resume our rather arduous task of attempting to extract information from the Government Front Bench. The subsection says:
" In framing programmes of reorganization or development involving substantial outlay on capital account, the Commission shall act on lines settled from time to time with the approval of the Minister."
I am moving to omit that subsection, because it is just one of those subsections in the Bill which afford the Minister the opportunity of quite unnecessary intervention in the affairs of the Commission. I want the Government to answer one or two questions. First of all with regard to "substantial outlay on capital account." Will they tell us what sort of thing that means?
We have, I suppose, to have regard to that phrase "substantial outlay on capital account" in reference to a figure which is mentioned in Clause 88, where the Committee will find reference to the borrowing powers of the Commission. The Commission may borrow £25,000,000 on a temporary basis, and a little later in the clause, on page 98, it is provided that the total amount borrowed (that is by transport stock) shall not exceed £250,000,000. £250,000,000 is quite a lot of money, but it is not really large in comparison with the capital needs of the main line railways alone.
The visible programmes of the main line railways, I think I am right in saying, already exceed that amount. I know the
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urgency programme of the L.N.E.R. amounts to £50,000,000. So I am not complaining that there should be £250,000,000. I want to know at what figure the Minister will consider it necessary to give approval to this outlay by the Commission. I think here we come to grips, for the first time in Committee, with the absence of the boards, for it is the boards of the main line railway companies which can authorize expenditure on capital account. It is quite essential that the boards should do so; it is not the sort of thing you can delegate, except in a very small way. Consequently, what I want the noble Viscount to tell us is what extent of delegation there is to be on capital account from the Minister to the Commission, and perhaps from Commission to Executives.
It would help us with Amendments coming later, particularly my Amendment to Clause 5, if the noble Viscount would consider this the appropriate moment to tell us something about the plan which the Government have for developing work and the general set-up under the Bill. Is there already a plan in the pigeon-holes of the Minister of Transport? If so, may we be told something about it? If there is no plan, then may we take it that the British Transport Commission, when it is formed, will have a clean slate on which to make their plan? We know there are to be some Executives to help them, but I will not trench upon that because we come to that later. I beg the noble Viscount to tell us how this undertaking is to be organized, and how it is to work. Is the plan merely to tell the chief general managers of the companies to carry on? If so, may we be told? Arid if the chief general managers have to carry on, what

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powers will be delegated to them? In particular would there be delegated to the chief general managers, who would become dictators in each of these main line railways, power to authorize capital expenditure? And, if so, how will the Commission secure the co-ordination which is one of their prime duties? I have said enough in moving this Amendment to inspire the hope that we may be given some information. My object in moving the Amendment, apart from securing information, is to remove what I consider this opportunity given to the Minister to interfere in day-to-day control.
Amendment moved—
Page 6, line 31, leave out subsection (2).—(Lord Balfour of Burleigh.)
LORD MORRISON: I will say frankly, at the outset, that I am not going to make any attempt to answer the numerous questions the noble Lord has put to me. Even if I did, I doubt whether the noble Lord would be satisfied with the replies I would give him. He asks: "What does ' substantial outlay' mean?" I am perfectly sure he did not expect me to produce a figure and say, "substantial outlay" means "X" million pounds.
LORD BALFOUR OF BURLEIGH: Why not?
LORD MORRISON: Because I do not believe that is the way in which these matters will be arranged. They will be arranged in discussion between the Commission and the Department. The noble Lord repeatedly asks: "What is the plan?" I am sure also he did not expect me, or anyone else, to produce a detailed plan. The whole of this policy—perhaps the noble Lord has overlooked it—is part of a major policy which was commenced not by this Government but by the last Government, a policy which was known in Parliament as the policy of full employment. This subsection is fully in line with that policy, which is the policy not only of the present Government but was the declared policy of the National Government. That policy provides that where we are undertaking works that require considerable capital expenditure, regard should be had to the general effect, as apart from the effect on the organization embarked upon them. Before this Government came into power all local authorities, and public utilities as well, had been asked by the last Government to give par-
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ticulars of what was likely to be their capital expenditure within the following five years. That policy is outlined here only to the extent the Government have followed up the policy inaugurated by the last Government. I do not think I can add anything more to meet the noble Lord's case.
VISCOUNT SWINTON: I did not mean to take part in the debate, but so strange has been the reply of the Minister that I do not think—speaking for the Opposition —that I can allow it to pass without a word or two of reply. It may not be appropriate, in moving to omit this particular subsection, to give an account of the plan by which the Commission and the Executives are to operate, but I sincerely hope that when we come to Clause 5 (where we are asked to commit the whole future of the transport of this country to the Commission and the named Executives who are to operate it as from January 1 next year) we shall not then be told that it is not inappropriate to tell us the plan upon which it is proposed to conduct this tremendous operation. I am sure the Minister will not give that answer.
Then comes the extraordinary statement that this particular subsection flows logically, consequently and inevitably from the policy of full employment laid down by the Coalition White Paper. I am not quite sure whether the noble Lord was in the Government or not, but, at any rate, we were all in it together. It would indeed surprise every member of that Government, to whatever Party he belonged, to be told that the nationalization of all the transport of this country was part of the Coalition White Paper. What we are dealing with here is the way in which the nationalization of transport is to be carried out. If the nationalization of transport was not part of the policy of full employment, then the way the nationalization is carried out would really have nothing to do with that policy of full employment.
In spite of the invitation given by the noble Lord to have a general debate upon the White Paper on full employment, I am not going to enter into such a debate, though I am prepared to do so if that is really the desire of the Government. But, broad and large, that policy was on a particular aspect of dealing with capital expenditure. We were all agreed not to engage in a great deal of local authority capital expenditure when trade was

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buoyant, but to get that kind of expenditure going forward in times when a slump was expected to take place. That has nothing whatever to do with subsection (2) of Clause 4 of the Transport Bill. The only question before us is whether, in framing plans of capital expenditure for the reorganization and re-equipment of the railways, the initiative should rest with the Commission or with the Minister. I am not going to say any more except that I would have thought a simple answer could be given to that question.
VISCOUNT ADDISON: May I, with great respect, intervene? The answer is clearly on the face of the subsection itself that—
"the Commission shall act on lines settled from time to time with the approval of the Minister."
LORD BALFOUR OF BURLEIGH: I think I must be allowed to say a word about the most extraordinary reply which I have had from the Government Bench. I understood the noble Lord to say that the plans will be considered or prepared —I did not quite catch the word —between the Commission and the Department; therefore I presume that after the Commission have been set up, the Commission will consult with the Department—that means, of course, with the Minister.
LORD MORRISON: The subsection says perfectly clearly that—
"In framing programmes of reorganization or development involving substantial outlay on capital account, the Commission shall act on lines settled from time to time with the approval of the Minister."
LORD BALFOUR OF BURLEIGH: Thank you very much. Then that means that nothing is going to happen until the Commission are set up. This is very relevant to the time table, and what I am going to point out is that the Government have not the least idea what they are letting themselves in for in the way of reorganization. After the passage of this Bill, the Commission have to be set up, they have to make their plans, and to see about setting up Executives, and the whole thing is going to take a long time. This is all very relevant to the vesting date. I do not want to develop the other argument on this Amendment. It is a matter of great regret to me that the Government are giving us very little help to understand what it is we are going to pass into law. The noble Viscount, Lord
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Swinton, has dealt with the question of full employment. Like him, I was staggered to hear that this was the policy of the Coalition Government. I had thought it was the guillotine in another place that prevented questions and answers on so many points, but I am beginning to think it is not a matter of whether there is a guillotine or not, but that the Government either will not or cannot answer the questions. I think it must be that they cannot.
On Question, Amendment negatived.
LORD BALFOUR or BURLEIGHmoved to leave out subsection (3). The noble Lord said: This is a similar kind of Amendment. It is again to omit a subsection.
VISCOUNT SWINTON: On a point of order. This is an Amendment to omit a subsection. There is an Amendment down in the name of my noble friend, Viscount Bridgeman, to add a certain proviso at the end of this subsection. Is it possible to deal with the Amendment now moved so as to preserve the right of my noble friend on his Amendment?
THE CHAIRMAN or COMMITTEES: If subsection (3) goes out there would be nothing left on which to hang the Amendment of the noble Viscount, Lord Bridgeman. I suggest that the noble Viscount might perhaps speak on the Amendment of the noble Lord, Lord Balfour of Burleigh.
VISCOUNT SWINTON: The noble Viscount, Lord Bridgeman, does not want to leave out the subsection; he wants to add something to it.
THE CHAIRMAN OF COMMITTEES: If the Amendment of the noble Lord, Lord Balfour of Burleigh, is passed, it will not be possible to do so.
LORD BALFOUR OF BURLEIGH: The reason I thought this Bill would be improved by omitting this subsection is the same as the reason I gave for omitting subsection (2). Even more than in the case of capital expenditure, this subsection affords a clear indication of the day-to-day interference which quite obviously the Minister— or the Department, if the noble Lord on the Front Bench prefers it—is going to take in the work of the Commission. The subsection says:
"In the exercise and performance of their functions as to training, education and re-

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search, the Commission shall act on lines settled as aforesaid."
That is, of course, settled from time to time- with the approval of the Minister. This is copied holus-bolus from the Coal Industry Nationalisation Act. We have seen it in that Act, and I think it may have been in the Civil Aviation Act, although I am not quite sure. It is one of the sealed patterns of nationalization clauses, but I think that the circumstances here are rather different.
There may have been more reason to talk about training and research in the Act dealing with coal mines, but in the case of the railways it is well known that the main line railways have very considerable and adequate arrangements for training, education and research. The railways have their own training places, their schools and their research establishments. I am not for a moment suggesting that they are perfect or that they cannot be improved, but that, I think, should be the business of the Commission. I cannot see why in the world the Minister should have to poke his fingers into this unless he wants to do so for some political reason. I do not wish to detain your Lordships further, and I move the omission of this subsection. If I get any support, I rather hope your Lordships will support it in the Division Lobby.
Amendment moved—
Page 6, line 35, leave out subsection (3).—(Lord Balfour of Burleigh.)
LORD MORRISON: The British Transport Commission will be employing probably about three quarters of a million persons, and noble Lords will realize that they must be interested in matters affecting training, education and research. The local authorities, universities, and other organizations already provide considerable facilities in this respect, and unnecessary duplication of very great expenditure would be incurred if every industry regarded its own trading schemes in isolation. It is clearly desirable that there should be a reasonable measure of co-ordination of effort. The Department of Scientific and Industrial Research and the Ministry of Education attach great importance to this subsection, and the Minister of Transport has assured these two Departments that when the Commission are appointed he will invite them to establish contact with them to work out arrangements to avoid duplication. A
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complete assurance has been given that there is no intention whatever of establishing some special staff in the Ministry of Transport to tell the Commission how to do a job which is their own responsibility. In the light of that, I think perhaps your Lordships would prefer to leave the clause as it is.
4.10 p.m.
VISCOUNT BRIDGEMAN: The last thing I should wish to do would be to interfere with the arguments of my noble friend Lord Balfour of Burleigh, because I could not agree with him more than I do in wishing to keep the Minister of Transport—or any other Minister for that matter—so far as possible, away from the details of running any industry, whether that industry is nationalized or whether it is not. But assuming for the moment, without prejudice to my noble friend's arguments, that this clause might stand part of the Bill —as again it might not—then it seems to me that the Amendment which is down in my name and the name of my noble friend is not ill-conceived. It really covers two points. The first is that the Commission, as was said yesterday, are a co-ordinating body; it is their business to co-ordinate with outside agencies matters affecting transport. In another place, on the National Service Bill, the Government accepted a similar Amendment to this.
I notice that in Clause 10, it says:
"In making arrangements for such further education as aforesaid the Service Authorities shall have regard to any representations made to them by or on behalf of bodies of persons concerned with education."
My Amendment is conceived in the same vein. It is also conceived in another vein, which is to prevent duplication of what one might call Empire building. I need not take these arguments much further. The noble Lord, Lord Morrison, seemed to me, unless I misheard him, to make some remarks which sounded as if he agreed with the lines of argument I am now putting forward in support of this matter. If that is so, and again without prejudice to the arguments of my noble friend Lord Balfour of Burleigh, I need say no more about the Amendment which stands in my name. If it turns out at a later stage that the Amendment is still there to be moved, no doubt it will be in order for me to move it then.
VISCOUNT RIDLEY: I should like to support the Amendment of the noble Lord,

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Lord Balfour of Burleigh. I take it that subsections (1), (2) and (3) of Clause 4 represent one of the great difficulties which we see in the running of a transport organization. Subsections (1) and (2) we have discussed, and I think subsection (3) is equally important. I should have thought that subsection (1) would cover any special directions which the Minister might wish to give, either for the control of capital expenditure, or for training, education, and research. As is well known, there are already mutual arrangements between employers, research organizations and education. I can see no reason why it would not be better to leave that to develop in its natural way, as it has done and as it is doing. Some might say, particularly in regard to technical education in this country, that it has been left for some years in a rather lower state than it should have been. But I think your Lordships will agree that in matters of that sort, until there comes a national consciousness and realization that training of that kind is needed, whatever is put in an Act of Parliament will not be realized.
That leads me to feel that we would be very optimistic to expect any improvement with regard to education without this clause. With regard to research, as has been said, the railways themselves, and some of the transport industries, have been very active in this sphere, and I should think they have as much to do in a general way with the Department of Scientific and Industrial Research as any other body of employers, remembering the fact that most of their business is manufacture or production, and, in so far as vehicles are concerned, that most of their business is transportation. I was a little puzzled when the noble Lord, Lord Morrison, said—I am not quite sure, but I think I heard him aright—that as the Ministry of Transport are now to be the employers of several hundreds of thousands of people, they naturally have a great interest in research. I was under the impression—but I suppose I am wrong—that the Transport Commission were to employ the people according to the terms in which the Bill is written. That rather illustrates, to my mind, the fact that we should be very careful all the way through this Bill, first, to define responsibility, and, secondly, to put clearly on one part of the organization or another exactly where their responsibilities begin and where they end. That
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is why I feel so strongly that we must, so far as we can, separate the Minister from the Commission, and so on. The Minister has his remedy, representing the shareholders as he does, of doing what other shareholders do, which is to remove the people who are put in charge. I do not suppose that We can translate that situation literally into it, but I think we should bear in mind the fact that, although we must agree that the Miniser should be a strong influence in guiding the policy, he must keep his fingers out of the detail. It is for those reasons that I support this Amendment.
LORD MORRISON: May I at the outset say to the noble Viscount, Lord Ridley, that I did not say the Minister of Transport would employ quarters of a million people? What I said was that the British Transport Commission—
VISCOUNT RIDLEY: I beg the noble Lord's pardon.
LORD MORRISON: Not for the first time your Lordships House finds itself in a very peculiar position. On the one hand, the noble Viscount, Lord Bridge-man, is proposing to add words to a subsection, and, on the Other hand, the noble Lord, Lord Balfour of Burleigh, wants to delete that subsection altogether.
LORD BALFOUR OF BURLEIGH: If the noble Lord will tell me how he is going to deal with the Amendment of the noble Viscount, Lord Bridgeman, perhaps I can then help.
LORD MORRISON: So far as I am aware—and I do not claim to be an authority on the procedure of this House —the question before the House at the moment is that the subsection should be deleted.
VISCOUNT SWINTON: It would make a great deal of difference as to how I voted, if we came to a vote on this, whether the noble Lord is going to accept the Amendment of the noble Viscount, Lord Bridgeman. I dare say a number of us do not like the subsection. It may be that it would be tolerable to some noble Lords with the Amendment of the noble Viscount, but not without it.
LORD MORRISON: in those circumstances, I will at once say, very briefly, with regard to the Amendment which stands in the name of the noble Viscount, Lord Bridgeman, that the purpose of the

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subsection is to secure the co-operation which the movers of this Amendment propose. As I have already said, the Minister has assured the Department of Scientific and Industrial Research, and the Ministry of Education, that he will invite the Commission, when appointed, to establish contact and work out arrangements to avoid duplication of effort and expenditure. It is clear that there is already a provision in the Bill to deal with what the Amendment asks for. The administrative action which the Commission will take to carry it out might well, I suggest, be left to the Commission. The administrative action is clearly necessary, and it would be redundant to place on the Commission in this matter a statutory obligation which might lead to legal complications.
LORD BALFOUR OF BURLEIGH: The noble Lord has explained to your Lordships that there is no intention to engage special staff in the Ministry to deal with this matter. That is a very important assurance, because one's invariable experience is that whenever any Ministry have an opportunity they always engage more staff. We have had a very categoric assurance that the Minister is not going to engage any great staff, and in view of what the Minister has been good enough to say about this and subsequent Amendments, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
VISCOUNT BRIDGEMAN: In view of the assurance which the noble Lord, Lord Morrison, kindly gave I do not propose to move the next Amendment which is in my name.
4.20 p.m.
VISCOUNT SWINTONmoved in subsection (5) to leave out from the beginning to "discontinue" and insert: "(5) The Commission may with the approval of the Minister". The noble Lord said: I certainly propose to move this Amendment, and the noble Lord opposite will agree that it is not of a general but of a very specific character, and it does raise the application of a very important principle. In the last three-quarters of an hour during the debate last night we ranged over what was to be the function of the Minister in relation to the Commission and to the Executives.
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Although the speech by the noble Viscount, the Leader of the House, was not reported in Hansard to-day we shall get it in the second edition to-morrow.
The noble Viscount will not say that I am at all misrepresenting him when I say that he was most emphatic that the Minister would not interfere in the ordinary day-to-day work, but that he would reserve himself for the great occasions which were most genuinely matters of national interest. Now in saying that, of course, he was also confirming what was said by the Chancellor of the Duchy of Lancaster, Lord Pakenham, on the Second Reading. May I quote what the noble Lord said on that occasion, because it is the strongest possible support for the Amendment I am moving now. In column 876 of Hansard on May 20, in moving the Second Reading, the noble Lord said this:
"It is not the intention that the Minister of Transport, on behalf of the Government, should interfere with the administration of the transport system or with the discretion of the Commission and the Executives."
Then the noble Lord said that he could not hold himself entirely aloof from the requirements of public policy—those very great matters to which the noble Viscount, the Leader of the House, referred last night. The noble Lord went on:
"It is, therefore, necessary that Parliament should have the ultimate control and that the Minister should have the powers, indicated in Clause 4, of issuing general directions to the Commission on matters affecting the national interest."
Now we asked the noble Viscount, the Leader of the House, last night what were the sort of things that were matters of general interest. He said he could not give us a precise catalogue, but he said—and I think it was quite reasonable—that he did not think a thing like the coal crisis was a bad example: that if it were necessary in the coal crisis—when everything was at stake, and in order to avoid a breakdown of industry all over the country—that coal should be given priority over everything else, it would not be unreasonable to give a general direction that coal should have that priority until the crisis was over or assuaged. That is exactly the kind of general direction I should imagine. He said it was a little difficult to give other examples, but no doubt there might be grave occasions where some direction was required. I would find it a little difficult to specify,

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out of my imagination, these grave occasions. But on the other hand, we are all at one that it is only to be on very exceptional occasions and in every exceptional circumstances that the Minister is to give those directions.
I would have much less difficulty in saving what the Minister ought not to do, and in giving many examples of the sort of detailed matter of day-to-day management in which the Minister should not interfere with the discretion of the Commission. I cannot take a better example than those matters of detailed management with which the Minister is authorized to interefere under the clause which I am now proposing your Lordships should amend. Will your Lordships just look at Clause 4 (5) and see what the Minister is invited to do. It says:
"Without prejudice to the preceding provisions of this section"—
that is, giving directions in the national interest—
"the Minister may, after consultation with the Commission, direct the Commission to discontinue any of their activities, dispose of any part of their undertaking, dispose of any securities held by them, call in any loan made by them or exercise any power they may possess to revoke any guarantee given by them …."
If that is not interference with day-to day management, what is?
The noble Lord, Lord Lucas, elaborated to us last night some of the manifold and petty activities which the Commission might be driven to engage in, and of which he very wisely said they had better disengage themselves as quickly as possible. A hostel here, a pub there, some Cosy Corner Nook, some petrol pump (I do not mean the two things are the same!) are things from which we all agree they ought to disengage themselves as quickly as possible. They give a loan to one of their employees to tide him over a temporary difficulty. That is the sort of thing in which the Commission will not be concerned themselves, but the staff right away down the line will be doing it under a general power. That is the kind of thing the Minister is going to interfere, with. I know that he has to be satisfied, if he gives a direction, that he will not interfere with the Commission carrying on their business efficiently, but I do ask your Lordships, what earthly business is it of the Minister to go and tell them what activities they
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are to discontinue, what loans they are to call in and what securities they are to sell? They may have some money in the bank and think they would like to put it into some of the Chancellor of the Exchequer's alluring 2½ per cent. loans. They do so, and then they want the money out, and, assuming that the Chancellor's loans remain reasonably liquid securities, they go and realize their holding. But to come to the Minister about it— there was never anything more fantastic than that!
I attach the utmost importance to this matter. The noble Viscount, the Leader of the House, will remember that on the Second Reading he also dealt with this kind of thing and said that the Minister was riot going to interfere with day-to-day management. I venture to say that all through the Bill we come upon the Minister doing this and that, and I am going to accept the noble Viscount's invitation so to amend the Bill that we make sure that the Minister does confine himself to his proper functions. Now this is the first example in which I take advantage of the invitation extended to me by the noble Viscount. What I propose in this Amendment is that in all these petty businesses the initiative shall rest with the Commission and not with the Minister. I am not going to repeat what I said on the Second Reading, but we know from experience that consultation can mean anything or nothing. I say that the details of ordinary day-to-day business ought to be nothing whatever to do with the Minister in the first instance. They concern the Commission, its management or its Executives, and the most the Minister ought ever lo do is to approve.
I cannot see why his approval is necessary for the calling in of loans or with regard to investments. I can see that in a case where this Commission—which are to have an increasingly powerful monopoly—are to discontinue a service, it is reasonable for them to notify the Minister, because it may be that in such a case a number of small ones might not matter. But there might be all important service which they propose to discontinue, which the Minister thought ought to be continued in the public interest. There, I think, it is reasonable that they should notify the Minister and secure his approval.
In my Amendment I am proposing to strike out the first two and a half lines of the clause, and the clause then, I sub-

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mit, would exactly carry out what the Leader of the House suggested. I think this is an entirely reasonable and a most necessary Amendment, and carries out what the Minister in charge has said is the intention, that the Minister shall come in only in important matters of public policy.
I beg to move.
Amendment moved—
Page 7, line 1, leave out from the beginning to ("discontinue") in line 3, and insert the said new words.—(Viscount Swinton.)
VISCOUNT ADDISON: I was very interested in the exposition by the noble Viscount, and so far as our desires are concerned I think there is not much between us. I confess that I studied this Amendment with great care, and discussed it with the departmental advisers, and then went back to them. If we were to adopt the suggestions which the noble Viscount makes I cannot see that there would be anything in substance different from what is already in the Bill. It provides in Clause 2, subsection (4) that:
"The Commission may dispose, whether absolutely or for a term of years, of any part of their undertaking or any property which in their opinion is not required by them for the discharge of their duties under this Act."
It seems to me that under this clause the Commission can get rid of anything they want to. As a matter of fact, if we adopt all the Amendments—and of course they all go together—there will be nothing left of substance which is not obtainable by the Commission under the subsection to which I have referred.
May I call to mind something we were discussing yesterday? We were discussing the fact that when the Commission take over certain undertakings they will in some cases be taking over with them various operations which are not really part of the transport undertaking. And the sooner they can get rid of them the better, if they can do so without damage and in a sensible way. But this subsection is designed specifically to protect outside industries against the Commission retaining things which are really not necessary for the purpose of the undertaking. The Commission, of their own motion, can get rid of things under subsection (4) of Clause 2, and the Minister also can initiate, and say "This or that is not necessary and I suggest you get rid of it." That is what this amounts to. I
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cannot see why, in the interests that we all desire, which is that they should not be saddled, with a lot of unnecessary activities, the words in the Bill are undesirable.
In the first instance the initiative is with the Commission, but in this case it is with the Minister after consulting the Commission. I do not think it would be desirable to admit such a proviso as the noble Viscount's insertion would amount to, because the proviso makes the thing conditional on the retention of the activities referred to being unnecessary for the proper discharge of the duties of the Commission. That is the very thing we want to get rid of, and it is most valuable, in the interests of the aims of every one of us without distinction that that should be retained. I do not think the noble Viscount will be doing anything but harm to his interests if he presses these Amendments.
VISCOUNT SWINTON: I am much obliged to the Leader of the House for the explanation. I am bound to say I had looked at the clause differently. I thought the object was to enable the Minister to intervene, and fetter the discretion of the Commission. He could direct the Commission to discontinue any part of their activities. The calling in of a loan seems to be a very strange business; it might be a loan attached in connexion with the carrying on of the undertaking. If the calling in of a loan is not something done in the ordinary course of their business, but is part of an undertaking which the Minister wants them to get rid of—if he wants them to sell a business of the sort we have been referring to and a loan is involved in that—then he says to them: "You ought to liquidate the whole of this business and clear out, whether there is a financial obligation attached to it or whatever it may be." I read it as meaning, and so I was advised, that supposing they want to stop running a bus service and discontinue any of their activities—
VISCOUNT ADDISON: May I interrupt the noble Viscount? It is always conditioned that it must be unnecessary for the proper discharge of their duty; that governs everything.
VISCOUNT SWINTON: I follow that; but the difficulty I feel there is: Who is to decide whether it is the proper discharge

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of their duty? I tell the noble Viscount frankly that. I am entirely at one with him,, that I want the Commission to get rid of everything that is not transport; and on the broad principle we are agreed. It seems to me that you may get into rather a complication when the Minister says "I do not think you want this thing" and the Commission say "We want it for our transport business." Who would decide that?
VISCOUNT ADDISON: I take it that in that case the Minister, after conference with the Commissioners, might say "I wanted them to get rid of something which they did not want to get rid of." But we have to remember that the whole of it is conditioned by its being unnecessary for the proper discharge of their duties. I think that the noble Viscount might consider it again. I am sure the present words are necessary in order to do the very thing the noble Viscount wants.
VISCOUNT SWINTON: That is the great value of these frank interchanges. I may have got on the wrong line here, but I would like to look at it again, because I would like to see that there is no unnecessary interference with the Commission. On the other hand, I am entirely at one with the noble Viscount, that if the Commission do not c1ear out of the businesses they ought to clear out of, there ought to be power in the Minister to make them clear out of those undertakings. If I may consider that, and I might come to the noble Lord and discuss it, I will withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 4, as amended, agreed to.
Clause 5:
The Executives.
5.—(1) There shall be public authorities known as Executives to assist the Commission in the discharge of their functions in the manner specified in this section.
(3) The number and names of the Executives shall be such as may from time to time be provided by order of the Minister, but unless and until other provision is made by such an order there shall be Executives known respectively as the Railway Executive, the Docks and Inland Waterways Executive, the Road Transport Executive and the London Transport Executive and, as from the appointed day, an Executive known as the Hotels Executive.
(4) Each Executive shall, as agents for the Commission, exercise such functions of the Commission as are for the time being delegated to them by or under a scheme made by the Commission and approved by the Minister.
(5) Every scheme made and approved as aforesaid and every instrument issued there-under effecting or revoking or varying any delegation of functions of the Commission shall be published. in the London and Edinburgh Gazettes:
Provided that the publication in the London or Edinburgh Gazette of a notice stating that a scheme has been ma de and approved or that an instrument has been issued, and specifying the place where copies thereof may be purchased, shall be sufficient compliance with the provisions of this subsection as respects the publication of that scheme or instrument in that Gazette.
(II) Where the effect of an order of the Minister under subsection (3) of this section is to abolish an Executive, or the effect of a scheme under subsection (4) of this section is that functions previously directly exercisable by the Commission are exercisable by an Executive or that functions previously exercisable by an Executive are exercisable by a different Executive or directly by the Commission, the order or scheme may include such transitional provisions as appear to the Minister, or to the Commission and the Minister, as the case may be, to be expedient, including provisions to the parties by and against whom legal proceedings are to be instituted or continued.
4.43 p.m.
THE CHAIRMAN OF COMMITTEES: Before we embark upon the rather formidable list of Amendments under Clause 5, perhaps it might be convenient if we ascertained the opinion of the House as to how they may best he dealt with. The Amendments seem to fall into three parts. First of all there are six Amendments by Lard Balfour of Burleigh; they all seem to hang together, and he may wish to discuss them generally when he moves the first of them. Again, the last four Amendments stand in the names of the Marquess of Salisbury, Viscount Swinton, and Lord Teynham. They also hang together, and perhaps may most conveniently be discussed together. As for the rest of the Amendments, I suggest for your Lordships' consideration that, so far as possible, we should confine the discussion to each particular Amendment as it is moved. If the discussion becomes too general it will be difficult to disentangle the Amendments later if it is desired to vote on them.
VISCOUNT SWINTON: If I may answer before the noble Lord, Lord Balfour of Burleigh, I entirely agree about the Amendments of the noble Marquess and my own, subject to this little obser-

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vation: Who should appoint the Executives, the Minister or the Commission? That is really a very important and quite a short and simple point. The others are separate points, but I think they can be most conveniently taken together, and it will be necessary to refer to one of them without arguing it fully. Later Amendments follow, because when we move to strike out "docks" it is in order to substitute a wholly different system of dealing with docks. I will explain why we move to do that. Subject to that, I think the course suggested by the Lord Chairman will be the most convenient.
LORD BEVERIDGE: I wonder if I might ask a question about the order of the Amendments. Are those of Lord Balfour coming first? If so, and if they were carried, I could strike out certain words which I propose to put in subsequent Amendments.
THE CHAIRMAN OF COMMITTEES: I think the subsequent Amendments can be saved if it is only a matter of putting these certain points.
VISCOUNT ADDISON: I welcome the Lord Chairman's suggestion. The first two Amendments of the noble Lord, Lord Balfour of Burleigh, relate to the same scheme of operation. Then he has a number of Amendments later which are really consequential in spirit and intention. I think the suggestion that we should discuss the general scheme as a whole is an excellent one. With regard to the other rather important Amendment which is raised by the Marquess of Salisbury, Viscount Swinton and Lord Teynham, that is another issue, a very important issue. And there are associated with that Amendment a number of subsequent associated Amendments which, in the same way, I hope, we shall be able to take together. When those two groups of Amendments are dealt with there still remain a number of individual Amendments of special importance in relation to inland waterways and so on. Those are separate points which can be dealt with afterwards. I think that the proposal of the Lord Chairman is a good one.
VISCOUNT SWINTON: I fully agree with that. I am not quite sure that I put it to the Lord Chairman as to the possibility of saving discussion on all the
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Amendments. If Lord Balfour of Burleigh's Amendment were adopted—although it may need some recasting—I think it would be possible to have an Amendment in the form of an Amendment to his Amendment, which would provide that the Executive should be appointed by the Commission and not by the Minister. But if we carried his Amendment I think it would be cutting out a good many of the others, because it negatives by its intention the creation of any named Executives at all; and if that were carried, there could clearly be no Amendment as to what these Executives should be.
LORD BEVERIDGE: In regard to the way in which the Lord Chairman thought it suitable that it could be dealt with, surely, if the noble Lord, Lord Balfour of Burleigh, put all his Amendments together, and if then only the first of them were put and discussed, would it not be possible that the words were still there? This looks to me a little like an Amendment which arises a little later, to knock out Clause 39 and substitute something quite different. So, surely, the knocking out of subsections (3) and (6) should follow the detailed amendment of them. Is that possible?
THE CHAIRMAN OF COMMITTEES: In order to save the subsequent Amendment I propose to put subsection (3), when Lord Balfour of Burleigh moves the deletion, to be deleted or stand part of the Bill only so far as the word "be" in line 36.
LORD BALFOUR OF BURLEIGH: If the Chairman will permit me to suggest it, will it not be even simpler if we deal with all these Amendments of mine on subsection (I)?
THE CHAIRMAN OF COMMITTEES: Yes, I think that will be quite in order. We can deal with them in that way if the Committee are agreeable.
LORD BALFOUR OF BURLEIGHhad given notice to move an Amendment to leave out subsection (1) and insert:
"(1) Public authorities to be known as Executives may be set up to assist the Commission in the discharge of their functions in the manner specified in this section."
A second Amendment in the noble Lord's name was to omit subsection (3) and insert:
"(3) (a) Each Executive shall, as agents for the Commission, exercise such functions of the

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Commission as are for the time being delegated to them by or under a scheme to be made for the purposes of this section by the Commission and approved by the Minister.
(b) Every scheme made under this subsection shall be laid before Parliament as soon as may be after it is made and shall come into force at the conclusion of a period of 40 days beginning with the day on which such scheme is laid before Parliament if neither House has resolved that it shall be annulled."
The noble Lord said: I am greatly obliged to the Chairman and to the Committee for allowing me to deal with this set of Amendments as one. I am going to ask for the indulgence of the Committee to take up a little time, because this opens up some rather big issues. The Amendments in question are those which appeared on page 6 of yesterday's marshalled list. First of all, I move to leave out subsection (1), then I move to leave out subsection (3), and then there are one or two small consequential Amendments. On page 9 of yesterday's list a rather more important Amendment appears, the effect of which is that I am moving a new subsection (12). The guiding principle is that I am trying to help the Government to make their scheme a workable one, because I fear that this plan which is put before us will not work, and the information which we have hitherto had from the Government has done nothing to reassure me on that subject.
The British Transport Commission cannot be set up until after this Bill becomes an Act. They have a number of things to do then. They have to set up the Executives—we will have a look at the details later. But I do not believe that, having regard to everything that has to be arranged, time alone is going to permit of a properly integrated scheme to be effectively put in force on January 1, 1948. Consequently, the basic plan of my Amendment is a double one. The first wing of it is to get rid of these functional Executives, which I think, as the noble Viscount, Lord Swinton, said, put the Government into a strait-jacket. The second object is to enable the Government, if they wish, to allow temporary arrangements to be made to carry over while the scheme is being prepared. It is easy—we have passed the clause already—to say that it shall be the general duty of the Commission to exercise their powers as provided under this Bill so as to secure or permit the provision of an efficient and adequate economical and properly integrated system of public inland transport.
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That is exactly what we want—it is the very thing. What we have to do is to translate this lovely paper scheme into something that will work. I am sure that the people who are going to operate this have not the least idea what they are letting themselves in for. I think that the Government are sticking their heads into a noose. My object is to try to give them some way of avoiding that noose. I hope they will be grateful.
Now I must return—because this is what I might call a "Second Reading Amendment"—to the reply which the noble Viscount gave yesterday to my general protest. His final clinching argument in favour of this Bill was, he said, that Winston Churchill was in favour of it twenty-five years ago.
VISCOUNT ADDISON: That was not intended to be a clinching argument. I was merely citing a very important fact to show that the principle of the Bill had been accepted for many years, and that Mr. Churchill, indeed, accepted it twenty-five years ago.
LORD BALFOUR of BURLEIGH: I am obliged. I must explain to the Committee why I despair even now of the noble Viscount. Twenty-five years ago circumstances were different. Since that time, twenty-five years ago, we have had the rise of an integrated road transport system. That is something which did not exist at the time when Winston Churchill said that there might be something to be said for nationalization. What I cannot get into the heads of the occupants of the Government Front Bench is that circumstances have changed. They are all living in the past. Let me present to the noble Viscount another advocate of nationalization of whom I am sure he will be glad to hear. The respected chairman of the London and North Eastern Railway, Mr. William Whitelaw, in the pre-road transport days, said that there might be something to be said for nationalizing the railways. But he added that there would be two conditions which should be fulfilled if that process were carried out. One condition was that the stockholders should be paid fair compensation, and his idea of fair compensation was something Ike the income which they had hitherto received. That, of course, is only an ordinary, common man's interpretation of honesty.

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His other condition was that it would be essential that the railways should not be run—to use his own elegant expression—" by a bunch of civil servants in Whitehall." Of course, he was quite right. This is what is going to happen. The railways are going to be run by civil servants in Whitehall. I can understand the attitude of Lord Walkden and Lord Dukeston, those two old war-horses of the trade union movement. They, of course, have been in favour of this thing for fifty or sixty years. But I thought better of the noble Viscount, the Leader of the House. I thought that he, at least, might have been amenable to reason. I do not wish to impute motives, and indeed I do not do so, because we all admire and respect Lord Walkden. But we had just a hint of what the trade unions think they are going to get out of this from something that was said by Mr. Sparks (who is also connected with the railways) in another place. He said:
"We look forward to public ownership as a means of improving or helping to improve the standard of living of the people who run the railways."
I do not wish to press this too far, but I think that it may be dangerous to have undue trade union influence in the constitution of this Commission and in the whole set-up for running the railways. It may be that the scales would be weighted a little bit too heavily on the side of always improving the conditions of the railwaymen. The noble Lord, Lord Walkden, of course, has devoted his life to the pursuit of that object. I congratulate him on his success, and I am not imputing any unworthy motive to him when I say that it will continue to be one of his principal objects for the rest of his lift. But it does not follow that the promotion of the best national interests is going to flow from a Commission which is unduly influenced by these considerations.
To return to the matter of the noose which, I believe, is ready for the noble Viscount to put his head into. We have to consider some vital dates. The establishment of the British Transport Commission is going to take place after this Bill becomes law. I wonder when that is going to be? Judging by our present rate of progress it will not be for some considerable time yet. Certainly it is not going to happen next week. After the British Transport Commission have been set up,
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and have had a good look round it, they will set about the task of making schemes for the Executives. The Executives have got to be set up and the Commission are going to make schemes. You find that in these clauses. Subsection (4) of the clause says:
"Each Executive shall, as Agents for the Commission, exercise such functions of the Commission as are for the time being delegated to them by or under a scheme made by the Commission and approved by the Minister."
All these schemes have to be made before the Executives can begin to function and it would be interesting to know one or two things about this delegation. I would like to ask the noble Viscount to give us some idea of the nature or extent of the delegation of the Commission's functions which will meet with ministerial approval. I hope that is not an unreasonable request.
I would mention in passing that the only statutory requirement about these schemes is that they have to be published in the London and Edinburgh Gazettes. They will be changed, probably quite often, if I am right in thinking that the original functional set-up will not work, and that there will have to be some sort of regional, as well as functional, set-up; and that schemes will consequently have to be changed. What is a trader to do who wants to bring an action for damage? I do not suppose even the noble Lords on the Front Bench are sanguine enough to think there will not be any damage on the railways under the new set-up. The trader has to find out which Executive he has to sue. I can foresee the circulation of the London and Edinburgh Gazettes going up by leaps and bounds and traders spending days turning over the leaves to find out which Executive they have to sue. There is one small practical question which I would like to ask the noble Viscount. The proviso to subsection (9) says that if any sum required by any judgment or order to pay by an Executive is not paid by the Executive within fourteen days, the Commission shall be liable. Will the trader have to bring a further action against the Commission or what? Perhaps the noble Viscount will look into that.
I want to return to policy. I tried to make the case on Second Reading that the boards are responsible, and under the existing set-up that policy covers a great variety of things. At that stage I asked

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the noble Viscount if he could tell us something about the division between the Minister, the Commission and the Executives on policy. Do not forget that the Executives have to begin by scrambling the whole of the operations on the main line railways. That comes of making the set-up of the Executives functional. They are divided into road, railways and docks and waterways. All the main line railway companies are concerned with all these three; consequently, between the date of the passing of this Bill and the coming into operation on January 1, the Commission have to be set up and the Executives appointed and they have to begin operations, scrambling transversely across the present organization of the main line companies. I think that is a prospect which may fill the stoutest heart with some anxiety, although it does not worry the noble Viscount.
Once we see how the boards work, we get some idea of the difficulties with which the Commission and Executives will be faced. In the case of my own railway we have no fewer than twelve committees—appointments, organization, steamships, accounts, property, traffic, works, locomotives, stores, superannuation fund, finance, and, at the present time, postwar policy. These committees are manned by directors who have a good deal of familiarity with business and who have become, through working on these committees, familiar with technical aspects. I may add, for the benefit of people who think railway directors do not do anything, that in the month of July there will be twenty-four meetings of committees of my board and two meetings of the full board and also area board meetings at York and Edinburgh. Somehow or other that work has got to be done. It is not too much to ask the noble Viscount to tell us a little about the kind of organization which is to take the place of these boards.
It is also a question of day-to-day management. It is easy to leave day-to-day management to officials. They do that and do it extremely well, but there are also decisions of policy which need collective consideration. In a committee or board you get a pooling of minds and, by collective consideration, you avoid mistakes which are bound to be made by the single individual if responsibility is left to him. I have in mind a
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double object. One is to try and give the noble Lords on the Government Front Bench an opportunity of understanding how much there is to be done and how great the difficulties will be. The object of my Amendment is not only to provide flexibility, because by doing away with these functional Executives we give the Commission freedom to set up any organization they like and time to develop that organization. We also save, by allowing the interim organization, what will be the frightful bottleneck of decisions on policy which will have to be taken somewhere.
I have a number of points drawn out. What about the appointment of officers to responsible positions? Senior officers are all the time reaching the end of their careers, and new appointments have to be made. Somebody has to consider these carefully—a time-usin2: occupation. The kind of question considered by the board is the best organization of refreshment rooms and dining cars. Should they be managed under the some organization as the hotels or by an all line officer? What is to be the policy about technical stores? Are the using departments to have the custody of their own stores or is there to be a purchasing agent and traffic stores superintendent? All kinds of questions of policy and organization come up and have to be decided, and decided rightly.
Then there is the examination of the justification of new schemes. Recently there has been completed on the London and North Eastern Railway a main line widening in the north eastern area which provides four running (lines)throughout between Northallerton and York. The noble Lord, Lord Walkden, reproached me—and I felt his reproach very keenly—that the London and North Eastern Railway has not four running lines all the way into London. I will not embark upon a defence, or try to explain why not, but that is the sort of thing that occurs. There are reasons why it was difficult to arrive at that decision many years ago. That is the sort of point involving great capital expenditure and great questions of policy. Where are these questions to be decided?
Then there are great emergency questions. We have, on our system, a tunnel called the Woodhead Tunnel. Your Lordships who have travelled between Manchester and Sheffield will be familiar

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with that tunnel. It is a very difficult tunnel, and it has not been satisfactory for many years. There is no secret; technical difficulties are great, and a decision has had to be taken whether this tunnel can be widened or whether a new double-line tunnel is necessary. Rolling stock renewal programmes—where are they to come from, and who is to decide them? These are tremendous questions of policy. Then there is the question to which I referred before, the question of traction—steam, diesel, or diesel-electric, and so on. I will hasten through these items because I could go on for the whole of the afternoon. There is the question of mineral support under the railways; extremely difficult questions which may need a quick decision as to whether the minerals are to be purchased. Of course, finance will not come into it because that will be out of one pocket to the other, and finance was sometimes a troublesome element. Nevertheless, there will have to be a decision whether to allow the minerals to come out and risk a collapse, or whether the minerals are to be kept in situ. The closing of branch lines—where is that sort of thing to be settled? As an example of the time it takes for Whitehall to decide about the closing of a branch line, I may tell your Lordships that our board took a decision about the closing of the Fort Augustus branch. It took the Ministry of Transport eight months to confirm that decision, and by that time the line was getting really dangerous and becoming unsafe for the running of trains over it. Is that the sort of delay that is going to take place? If not, how is it to be prevented?
Then, on the subject of the functional Executives there is the commercial side. Why is there not some indication of the policy of the Government with regard to the commercial side? The noble Lord, Lord Walkden, spoke with some contempt of the canvassers of the railway. He indicated that these were gentlemen who were wasting their time and who would be much better employed doing something else. Of course, the canvassers are not canvassing purely for business, they are the public relations officers, and they are the people who tell the public how to resolve their difficulties and to whom to go. If the noble Lord thinks that the Commission will not need any public relations officers, then that confirms my worst fears—they are going to sell trans-
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port (as I said on Second Reading) in the said spirit as that in which the Post Office sells stamps. You queue, you take your chance, you get them or not; and the Post Office does not care a hang whether you take them or not. That will not do for the transport system of this country. The noble Lord, Lord Walkden, thinks the canvassers are simply concerned with stealing transport from the roads. It is not true at all; they are the public relations officers of the railways.
I must not detain your Lordships longer, but my Amendment provides for the hiatus—if there is to be a hiatus—in the setting up of this vast and complicated scheme, which, I maintain, cannot be done by January 1, 1948, and it provides for Parliament to see the scheme before it is given effect to. What is wrong with that? Is that not the way we do things in this country? Is it not the democratic arrangement to let Parliament see the sort of scheme which is going to be made, instead of having the noble Viscount steadily refusing to answer any questions or give us any information whatever? I think this Amendment is one which ought to command the closest attention and the support of the Government. I ask the noble Viscount once more—what is the plan? Do they propose to instruct the general managers to carry on? Of course, I am not suggesting that the trains will not run after January 1948. The trains will run for a while, but the nerve centre will be gone. "The nerve centre which decides these policy questions will be gone. For that there will be substituted, so far as I can see, a jumble, unless the noble Viscount will tell us how this jumble is to be resolved. After January 1, I, as a railway director, lose interest in this matter from the technical point of view. The boards will no longer be concerned. From the railway point of view, and the transport point of view, it has nothing to do with the boards, but I felt it would be inconsistent with my duty to the public, and to your Lordships' House, to let this rotten scheme go through without making some effort to save the Government from their own efforts. I beg to move.
Amendment moved—
Page 7, line 29, to leave out subsection (1), and insert the said new subsection.—(Lord Balfour of Burleigh.)
VISCOUNT SWINTON: I think this is an Amendment which the Government might well consider. So far we have not the least idea how this scheme is going to work, or what is the plan. Indeed, it is what I said on the Second Reading—a scheme hereafter to be revealed. I do not know whether the noble Lord, Lord Morrison, or the noble Viscount the Leader of the House, is going to take us more into his confidence when he replies on this Amendment, but hitherto we, and—honestly so far as I can see—the Government are entirely in the dark as to how the whole of this plan will operate. The Commission will be appointed, and the Commission, apparently, have to devise a plan. All this Amendment says, in effect, is that if you are going to appoint a Commission of nine wise men to devise a plan for running the transport of this country, would it not be better to give the Commission a clean slate and let them write on that slate what they think is going to be the best way of carrying on the undertaking? After all, it is not as if they were a sort of Royal Commission, appointed merely to advise. From January r next, these unfortunate nine men will be entirely responsible for conducting the whole of the transport of this country. I would have thought it was only common sense, if you are to give them that frightful task to do, and you do not know in the least how it ought to be done, to give them the opportunity of saying, when they have surveyed the field, what they think is the best organization and the best framework to set up.
It seems to me that in this the Government are making the worst of both worlds. They say: "We have no plan. We are appointing a Commission to give us a plan." At the same time, they handicap the Commission in advance by saying: "We do not know whether this is the right way to do it or not, but we are going to set up six Executives as agents of the Commission, and the Commission must work through those Executives." We do not know who the members of the Commission are to be; I do not know if the Government themselves know who they are to be. I have not even seen any advance information in the Press as yet, or any tips, although I am told that the noble Lord, Lord Quibell, is in the running, and that it world be worth almost
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anything to His Majesty's Government to keep him quiet. There may be other competitors. But really I would have thought that the Government might give them the chance of deciding how they want to run the business. Observe what a straitjacket this is put into. It is all to be done, radiating from the centre, by these functional, watertight Boards.
Co-ordination is what the noble and learned Viscount, the Lord Chancellor, says we are after. It is quite true the Minister of Health says that he does not care about co-ordination, and the only thing that matters is ownership. Quot homilies, tot sententia. It is no doubt very pleasant to have the noble and learned Viscount, the Lord Chancellor, taking one view, and the Minister of Health taking a diametrically opposite view. Perhaps the Commission, when they are appointed, will take a view which does not agree with either of them. But I would have thought that the way to achieve co-ordination was as to do the thing in a regional way. That is not all theory, because, after all, the only working model in this business is the London Passenger Transport Board, and that is to be one of the Executives which will be set up, or, at any rate, carried on. But the essence of the London Passenger Transport is that it is regional. It directly controls the buses, the trams, and the underground railways inside London; and it exercises regional co-ordination over the suburban lines. I think that on the whole it works pretty well.
It was found that, in order to get that co-ordination, you had to get away from the functional unit of tie main line railway, the bus, the tram and the underground, and you had to have regional coordination. Yet that is the one form which is excluded by the Government's sealed pattern. We are to have a Railways Executive, a Waterways Executive, an Hotels Executive, and a Roads Executive. I appreciate that when you are running a thing like a through train it does require some centralized control. You cannot have one half of the Flying Scotsman run by one region, and the other half of the Flying Scotsman run by another region; it cannot be like one of the animals of the pantomime, with its headquarters in London and its hindquarters in Edinburgh; the whole animal must, presumably, be conducted from one place or the

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other. But taking an extreme case like that does not rule out regional co-ordination. I should think the Scotsmen will have a good deal to say about this, and I shall greatly sympathize with them if they have. I do not suppose they want to be told in advance that they are not to have any regional co-ordination in Scotland.
It does not seem to me to be at all reasonable that, because the Flying Scotsman has to be conducted from one centre, the local road transport, the local rail transport and the local canal traffic might not well be controlled by a regional board in Scotland. I should have thought that it was a much better way of doing the business. But then the Government say: "But we are giving a power to the Commission"—I am not quite sure whether it is to the Commission, or to the Minister, or to the two between them—" to change all this once we have set it up and we find that it does not work. If we find that these Executives, which we are determined to set up, do not work, then the Minister and the Commission can unscramble it, and rescramble it all." I would have thought it more sensible to give the Commission a free hand from the start, and let them arrange with other people to carry on the business—because it really must not break down until they have their plan in working order. When the Commission, who are going to be responsible for the whole of the transport of the country, have decided what is the best organization, and what are the best Executives and agents, through whom they should do the work. they can then put up that plan, have it approved, and put it into operation. That is all that this Amendment proposes, and I should have thought that there was a great deal of common sense in it. No doubt we shall hear from the Government what is the alternative plan, but I hope that we shall hear it with some precision, and not just be told: "We do not like your plan, and you must wait until we have appointed a Commission to see what our plan is."
5.28 p.m.
Lord LUCAS OF CHILWORTH: As one of the Back Benchers upon this side of the House, I have been very interested in listening to the noble Lord, Lord Balfour of Burleigh, and the noble Viscount, Lord Swinton. It appears to me that
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the only thing which the noble Lord does not expect to happen from January 1, 1948, is that trains will stop running. Everything else, apparently, will collapse. I must confess that I am not a railway director. I have never directed a railway, but I have directed quite a number of other forms of business. If I have acquired a business I have not expected that business to stop running immediately I have taken over control. I cannot imagine that on January 1, 1948, all the directors of the railway companies will go. The noble Lord, Lord Balfour of Burleigh, might, but he will not want a job. I expect there are other railway directors who will want jobs, and instead of being directors of a specific railway company they may be employees of the National Transport Commission. I cannot imagine that all the general managers will walk out of the railways, or that any of the staff will leave. I imagine that the majority of the staff of the railway companies will look forward with glee to January 1, 1948, when they will have a far better job and far better prospects.
VISCOUNT SWINTON: And bigger salaries?
LORD LUCAS OF CHILWORTH: If they deserve them they will. I must confess that I think it was unfortunate that the noble Lord, Lord Balfour of Burleigh, twitted my noble friend Lord Walkden about his work of benefiting the employees of the railway companies. I was not perhaps in this world when the noble Lord, Lord Walkden, first interested himself in railways, but I am told that the conditions of employment and the wages paid at that time were a disgrace to any railway company. Because those conditions have been improved, and because the noble Lord, Lord Walkden—
LORD BALFOUR OF BURLEIGH: I am sorry to interrupt the noble Lord, but we must get this right. I did not twit the noble Lord, Lord Walkden. I said I greatly admired his work. The point I made was that that had been his object all his life, an object which I admired and of which I approve. But I do not think that undue weight should be attached to that side of it in the setting up of the Commission. I did not twit the noble Lord.
LORD LUCAS OF CHILWORTH: I think that when the noble Lord reads what

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he did say, he will realize that he was carried away by emotion—
SEVERAL NOBLE LORDS: No, no.
LORD LUCAS OF CHILWORTH:—and that he said quite a deal more than that. However, be that as it may, I am quite certain that the vast majority of the railway employees will look forward to January 1, 1948. I cannot understand the noble Lord's insistence on a reply to this—and I hope he will forgive my saying this, because I do not mean it at all in an offensive, rude or harsh manner. He knows very well that the noble Viscount the Leader of the House cannot give him a reply to his repeated questions as to what is the plan. Noble Lords laugh at that, but at least I have had some experience in industry, and I know what working to plans can mean. I know very well that while you might ask the present railway directorates what are their plans for the next five years, they might be able to say.
VISCOUNT PORTAL: Might I ask the noble Lord why he says "they might," when plans have been published for all the four main line railways? As you say, you know nothing about railways, so surely it is better not to express your opinion on such a thing?
LORD LUCAS OF CHILWORTH: The noble Viscount, Lord Portal, is usually so fair and so courteous, and I am sure he would not think that this debate should be conducted wholly and solely by railway directors. I suppose the ordinary man in the street has some right to raise a voice. The noble Viscount has asked me a plain question, and he deserves a plain answer. Why I say "might be" is because I have a very shrewd suspicion that 95 per cent. of the plans which have been issued by the main line railway companies are rather window dressing or a death bed repentance. Another thing I would say, as the noble Viscount has asked me, is that I do not know where the money is coming from but perhaps they do. I remember the noble Earl, Lord Dudley, said that the railway companies were not financially embarrassed.
THE EARL OF DUDLEY: They are not.
LORD LUCAS OF CHILWORTH: There are quite a number of opinions about that. But if I could go on with the
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main argument, what the Commission will have to do is to take over a concern which I have not the slightest doubt it can mould, in the course of time, to the public requirements. But if anybody thinks the Government can sit down to-day and write out a plan to be operated by a Board-to-be, then I know quite well that it cannot be done.
Speaking as an onlooker and following very attentively, and with the respect. they deserve, the arguments of the noble Lord, Lord Balfour of Burleigh, both on Second Reading and on this discussion, frankly I remain unimpressed with anything the noble Lord has said. I can conceive that quite a number of the things which he read from a very long list are ordinary managerial functions which should be delegated, and would be delegated in my business, to very subordinate individuals. If railway directors waste their time in considering and deciding quite a lot of the points the noble Lord, Lord Balfour of Burleigh, has read out, they do a lot more work than I think they do. I can only repeat that, for myself and for those on this side of the House, we remain absolutely convinced that the Government's plan is the only possible plan, and that the alternative if alternative it is—
THE EARL OF DUDLEY: What is the plan?
LORD LUCAS OF CHILWORTH: The plan to set up a Commission and an Executive to take over the railways and run them in the national interest.
LORD DE L'ISLE AND DUDLEY: Like the noble Lord who has just sat down I am not an expert on railway administration, and I feel certain that my knowledge of business is not as extensive as his. Before speaking to the Amendment I would like to make one or two observations on his speech. I hope at a later date that he will take an opportunity of developing one line which he touched upon, which is how the Commission are to offer a far better job to the railway men. I would have thought that present indications are that they were a little doubtful of that, and they are, as you might say, "jumping the bus" now. Does that not indicate that they would rather have it in hand than wait for the Commission? But we shall see about that. I thought it was rather a dangerous

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line to take and would be rather tying the hand of the Commission when they assume office. It is not an answer to questions from noble Lords on this side of the House to say that the railways were not efficiently managed before. What we are trying to find out from a Government of planners is what plan they actually have to take over the railways, and in particular what we want to know, if they are going to run transport on a new and better system, is what that new and better system is.
We also want to know how they are going to deal with the interim period. I should have thought that anybody with any knowledge of organization at all must recognize that the time factor is all-important. It really depends upon what decisions you make, because the time factor is particularly acute now. We have had a series of debates upon the economic condition of this country, and the general inference is that the economic position of this country is not at all happy. If we are to have a nationalized transport—and that is granting the principle of the Bill for the sake of argument—how are we going to make the transition as smooth as possible? The Government have not given us any plan for doing so. The noble Lord, Lord Balfour of Burleigh, suggested a means by which the hands of the Commission should not be tied in the extremely difficult task which will face them on only January 1. It may not be the best plan—although he speaks from long experience of railway management—but surely it is a plan, to give that Commission flexibility when they are re-organizing the vast and intricate transport of this country. If it is not the best, then let noble Lords who speak for the Government tell us what is a better plan, one that will make the transition smooth and one which will not cause the travelling public unnecessary inconvenience—because I am certain they will suffer some inconvenience. I hope that when the noble Lord replies he will not brush aside the arguments which have been advanced, but will deal with thorn with the seriousness they deserve.
5.40 p.m.
VISCOUNT RIDLEY: I should like to support the Amendment moved by the noble Lord, Lord Balfour, looking upon it as an important contribution to help the building-up of administration. I
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thought when the noble Lord, Lord Lucas, was speaking that he was taking rather a different direction from that in which this Amendment desires to go. It is not a question whether or not nationalization is better, nor of what individuals should take various parts in the management or direction; it is a vital matter that there should be a general responsibility from the Minister to the Transport Commission and a clear arrangement to ensure that all the necessary parts of the undertaking are carried out. We have a perfectly good opportunity to lay out whatever seems to be the best system. We know what the present system is: the four main lines and the London Passenger Transport Board; but what evidence have we as to what the proposed arrangement will be? We have to find out how best to unite the various parts of the machine, and there is the problem of what to do in the meantime. I do not know what will actually happen on January 1. It will be a difficult time. It may mean very great inconvenience for those in charge, and later perhaps for the public. But, looking further ahead, when we have one Railway Executive and one Road Transport Executive, how are we to see the plan built up?
Most of those concerned with the four main line companies will agree that as units of management they are probably as big as the optimum size, or perhaps a little bigger. I believe that one of the really important things about any industrial undertaking is to see that it does not grow and grow until the central direction loses control of the far ends of it. Therefore we have a difficult problem. We have these four railway companies, which are thought by many to be bigger than they ought to be, and we are to have them all under one Executive. Is that the right way to do it? I suspect that it is not, and that is why I should like to see this Amendment agreed to. I should like to think that there will be an interim arrangement whereby the thing can be linked up directly with the Railway Commission. Let us have the arguments for and against. Shall there be a central bureau of control or such an organization as exists in each form of transport? It is a straightforward Committee point as to what is the best kind of organization to set up. This Amendment raises the matter acutely; if the present system is

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not the best, what are the arguments to show that the methods proposed in the Bill are better? There are a great many alternatives, which could fall naturally into the framework of this Bill. Are we really satisfied that the particular one here proposed is the best one? It is true that it can be changed; but it would be better and less time-wasting to start with the best system we can think of, and not have to change it unless it is absolutely essential.
LORD MONKSNVELL: I should like to say a word on the subject of railway efficiency. It surprises me that so little has been said about the enormous increase in railway efficiency which has taken place since 1930. I have never been connected with the railway, but during the whole of my life I have been very interested in it. I have travelled largely in America, France and Germany, made the acquaintance of all sorts of railway officials, and devoted myself to the study of the subject. Several times in the course of the last twenty or thirty years I have brought forward Motions in your Lordships' House calling attention to the deficiencies of the railways. I can assure your Lordships that the improvements that have been made since 1930 have been quite astonishing, and it seems to me that it would be absolutely unpardonable to tear from the railways the business that they are now carrying on with the greatest efficiency.
THE MARQUESS OF READING: Having no intimate knowledge of railways, and regarding them merely from the point of view of a not excessively intelligent onlooker, perhaps I may be allowed to say how this matter strikes me. The point that the noble Lord, Lord Balfour of Burleigh, raised comes within a very small compass. The noble Lord, Lord Lucas, stated in his speech that it was ridiculous to expect the Leader of the House, or anyone from the Government Benches, to give any indication of what was the actual plan. Is it really so exacting a demand? I seems to me the position is that you have in the Bill at present certain definite Executives marked out for the future, as required. They may be the right demarcation if you have behind you the plan upon which those bodies are to operate. But if you are still in the stage that your plans behind these schemes are still fluid, then surely you are in the
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position that you must say: "Now we find, having made our basic plan of operation, that these are the particular bodies which it is necessary to create in order to give executive force and to make the plan an operative plan." If that foundation is right, and I respectfully suggest that it is, then surely we are making only what is an extremely reasonable and modest request. We do not say: "We want you to expound at length the entire plan"; we do say: "What we want to know is whether there is a plan beyond the mere nomination of these particular bodies; if there is, give us an outline of it, in order that we may judge for ourselves if these are the right bodies to be put into statutory form in order to make a living, breathing thing of the plan which you tell us for the first time is somewhere in existence."
VISCOUNT BRIDGEMAN: We are told from the opposite Benches that there is a plan,, and it seems to me that the plan which we have is one to set up these Executives. In that sense it is a plan, but it is not one in the sense that a plan of operation is all ready and waiting to be put into effect by the new masters of the railways, for them to take over at the appointed time. For that reason I would agree with the noble Lord, Lord Lucas, who said that he would not take over any enterprise with which he was to be connected without a definite plan. I could not agree with him more.
LORD LUCAS OF CBILWORTH: Did I use those words? I do not think I did.
VISCOUNT BRIDGEMAN: Something very like them. If I have misquoted the noble Lord, I apologize, but I certainly understood him to say that as a director of companies he would not go into the operation of taking over a business without having a clear plan of what to do.
LORD LUCAS OF CHILWORTH: After I had acquired it.
VISCOUNT BRIDGEMAN: After you had acquired it, yes; and I will come back to that point. But—and I am also speaking at the moment as a director of companies—I should not merely want a plan to set up some board or something of that sort; I should also want a plan of operation. Here we are, and it seems to me that we are in the position of someone who is going up a ladder and

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who thinks fit to let go with both hands at once. Here we are. We are parting, or we take the risk of parting, with the people who are now running the railways, and who have been running the railways, perhaps for better or perhaps for worse, for a long time; and we are going into a period in which we do not know who is to run the railways. Perhaps it is the people already operating the railways who will run them under some other name; but, equally, perhaps, it is not. We have not been told anything from the Benches opposite that would indicate exactly what is to happen to the railways, and who is to run them until the Commission have had sufficient working experience to enable them to decide what is the best plan to run the railways. Whether it is the plan that the railwaymen have been using for years past, or whether it is some totally different plan, we do not know. Nothing has happened in this debate to make us on these Benches any the wiser.
I want for one moment to look at what seems to me to be a concealed ill-effect of this state of affairs. Whatever anybody may say about the boards of directors of railways—I am speaking not as a director of a British railway, which is an honour that I have not had conferred upon me, but as a director of a small foreign railway—decisions are taken from time to time, and one tries to take them well in advance of the operation, or purchase, or whatever it may be, which is to follow as a result of those decisions. During the period which I have tried to describe as the period when people let go of the ladder with both hands, there will at the same time I think, be a period when no forward planning can take place. That period may be a period of weeks, or of months, or of years; and its effects will not be felt at the present time. Trains will go on running, and the hotels will continue to be kept open. The noble Lord, Lord Morrison, promised us yesterday that he would see to it that the refreshment rooms were working in the way that they should, and all these things will go on for the time being. But, while those things are happening in front of our eyes, the machine will be running down behind; and then there will be a delay later on, when the Commission have taken a grip again and started to wind it up. No one can forecast what the results
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of that dead period will be, but I venture to predict very confidently that there will be a happening of that sort, and it will be all the worse because it will not be possible to see its effects at once.
LORD SHEPHERD: My Lords, may I make a small endeavour to bring the House back to the Amendments that have been moved, so that the Minister who has to reply can lay before your Lordships the answers that he has to give, and in the hope that we may make some progress with this rather large Bill? The Bill itself to which the Amendments have been moved puts before the House something in the nature of a part of the plan. It says that there shall be a number of Executive Committees, known respectively as the Railway Executive, the Docks and Inland Waterways Executive, the Road Transport Executive, and the London Transport Executive. In so many words, the Government are indicating that, so far as the management and running of the railways and other forms of transport are concerned, certain lines have to be followed. You may agree or disagree with the proposals of the Government, but it seems to me that you are not entitled to say that the Government are proposing no plan. The plan is in the Bill, whether you like it or whether you do not.
The noble Lord, Lord Balfour of Burleigh, who laid so much emphasis on the necessity for producing a plan, not only does not like the plan in the Bill but is moving Amendments not laying down a plan, but proposing a means by which future plans can be made. For instance, he suggests in one part of his Amendment that each Executive shall, as agents for the Commission, exercise such functions of the Commission as can, for the time being, be delegated to them under a scheme to be made for the purposes of this clause by the Commission and approved by the Minister. If that is the policy of the noble Lord, that when a Commission is formed that Commission should itself produce the plan, I cannot understand the grounds of complaint that the Government has placed no plan in front of the House. I venture to suggest, with all due modesty, that we are wasting time chasing this demand for a plan round in the way that we are doing. The times in which we are now living are far too serious for that, and we ought to be con-

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fronting all the problems and overcoming them to the best of our advantage.
Finally, we do not see in the railways, as they are at present constituted, a great profit-making institution. We do not see in those railways that efficient system upon which emphasis has just been laid. We know that the railways in their present state of disorganization are a danger to the progress of this country. We know that Parliament through the generations has had to step in, for the purpose of preventing the railways abusing the position that they occupy, abusing their position of monopoly. We are trying to enter this railway and transport business not because of their efficiency, not because of the wealth now being made, but because, unless we do these things, the prosperity of this country cannot be re-started, and we cannot put into operation that aim of full employment which was the policy of the late Government as well as of this.
THE EARL OF SELKIRK: My Lords, before addressing myself to this Amendment, I would like to refer to one very admirable remark which was made by the noble Lord, Lord Shepherd, and I am sure we can count on his support in preventing any abuse of monopolies in the future. I think the remark which he made was most valuable and I feel that every section of the House will thoroughly agree with him. My chief reason for speaking on this Amendment is this. As I understand—I am sure I shall be corrected if I am wrong—we are speaking to the Amendment of the noble Lord, Lord Balfour of Burleigh, on page 7, line 29. It has the effect that the Commission shall be responsible for the Executives, both in number and personnel. I think that is important, and for this reason: it puts straight on to the Commission the responsibility—and the whole responsibility—for the work which the Commission have to carry out; and if there is anything in this Bill which I think causes anxiety it is the dispersal of responsibility. There are very few things more unsatisfactory.
We have, for instance, dealt with the question of salaries. We had—if I may say so—great difficulty in extracting from the noble Lord a promise that the salaries would be published. I do not see why they should not be published in the Imperial Calendar as all civil servants' salaries are published. We had great difficulty in getting a statement on the expenditure of capital. So far as this Amend-
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ment places responsibility fairly on the Commission, I support it. If the Amendment is not carried, I shall have other remarks to make about the subdivision of the Executive at another stage. I should like to make one further point. So far in this country we have substantially avoided what is called the system of "spoils" known in America. That is due to the extremely high standard which we have maintained in the Civil Service. There is an increasing and ever-growing tendency for patronage or appointments to be made from political circles. I feel that we run a very grave danger in that respect, and it is desirable, so far as possible, that appointments of this nature should not be made from a political source.
I wonder whether your Lordships realize that some abuse is already being made by appointments of directors to public corporations. I am going to read short passages from an article which has appeared by a director of one of the corporations which we in Parliament have set up in the last twelve months. I will not mention the name. I will hand this to the responsible Minister afterwards. One article starts with these words:
"The Tory M.P.s and the Tory newspapers are trying to make party capital out of the decision … to transfer … operators …"
That is a very good sentiment, but is not a suitable expression for a director of a public corporation. Here is another expression:
"The advisory council will continue its work heedless of the sneering of Tory M.P.S…
I have no objection to these words, but I think from the director of a public corporation that expression is undesirable.
I would like, if I may, to express one further point. We have heard a lot about a plan. We are most deeply in the debt of the noble Viscount the Leader of the House on this matter, because he said, with great frankness—a frankness which I think we all admire and delight in—that this Bill could indeed appropriately be compared with the South Sea Bubble.
VISCOUNT ADDINSON: I never said that.
VISCOUNT SWINTON: It was I who said that.
THE EARL OF SELKIRK: The noble Viscount the Leader of the House agreed

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with the noble Viscount, Lord Swinton, that that was an appropriate comparison. May I read what the noble Viscount the Leader of the House said? It appears on page 1050 of Hansard. He said:
"Some criticism was made by the noble Viscount, Lord Swinton. There was a very charming part of his speech in which he resurrected our history of the South Sea Bubble, and he said it was described there as 'a scheme hereafter to be revealed.' He used those words, and I agree they are entirely appropriate."
Perhaps we may amend the OFFICIAL REPORT, but that is what stands in Hansard at the present time. In those circumstances, I think we are entitled at least to some further explanation of the nature of this plan. I should say, in fairness to the noble Lord, Lord Nathan, that he did not regard it on those lines at all. There was a very sharp divergence between him and the noble Viscount. He considered it to be a normal business transaction. But if you went to the City of London (I am a child in the matter of the City of London) with this Bill, I rather doubt whether, as a prospectus, it would pass the company law as it stands at present.
THE EARL OF DUDLEY: I will not take up the time of the House for more than two moments. I do not wish to follow my noble friend Lord Balfour of Burleigh or my noble friend Lord Lucas into the question of the merits and the demerits of the services rendered by railway directors, because I am one myself and I might be biased on that subject. I think that a point has been missed which the Government should bear in mind. The tradition and the spirit of the main line railways have been built up over more than one hundred years by the team which has run the railways during that period, and that spirit is undoubtedly going to be upset to some extent on the vesting date. I do not, of course, say that the railways will not continue to run, but it will take a little time for the new set-up to accustom themselves to the new conditions. I remember very well—as we all do—that over a year ago, when the vesting date of the Coal Board arrived, they were not ready and they had to ask the directors, or some of the directors, of the colliery companies to carry on until they were ready. That was a very natural and very understandable thing to do, and many of these direc-
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tors were quite happy to do so pro bono publico.
Therefore my only object is to beg noble Lords opposite to keep a wide mind on this subject, because they may require to seek some assistance from those who have the traditions of the railways at heart, and who have built up this organization. Whether it be a good or a bad one, it is a tradition that is held in very high esteem by everyone on the railways—workers, staff and directors alike. We on this side of the House are very largely concerned because we feel that the hand of the Government is always bound to be, to some extent, a dead hand, and must be applied at first gently and as lightly as possible. I submit very respectfully that noble Lords opposite will look rather foolish if, when the vesting date comes, their plan is not ready, and they have to seek temporary assistance from those who have been running the railways for over one hundred years.
VISCOUNT ADDISON: We have had a very long discussion on the Amendment moved by the noble Lord, Lord Balfour of Burleigh, and the discussion has ranged wide—deliberately, of course, in the first instance, to cover the series of Amendments which are associated with this particular one, and quite properly. But in some respects it has been almost a Second Reading discussion. Let me, in the first place, reply to the point made by the noble Earl who has just spoken. I am quite sure that my right honourable friend the Minister of Transport and those concerned with this business will be just as anxious as the noble Earl to obtain the cooperation, good will and help of all those who are experienced and who have good will in this matter. There is no question of jettisoning a long-established body of experience and good will. It is simply that there will be a different system of working.
With regard to the particular Amendments of the noble Lord, Lord Balfour of Burleigh, I cannot see—and I have studied them with great care—that they in any way facilitate matters more than the provisions of the Bill or make a single contribution to the formulation of the plan which he is so anxious to be revealed. In that respect, might I say that I do not remember the particular circumstances of the remark to which the noble Earl referred in connexion with the "South Sea

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Bubble." But at all events, of course, it is a fact that the plan which the Commission will be authorized to prepare has not yet been produced. In that respect it is true. We have not set up the Commission yet, and naturally you have not their plan before you. You cannot have it when they have not even begun to sit round a table. It would, I agree, be fatuous to expect their plan before they are appointed. It is clearly stated in the Bill that:
"It shall be the general duty of the Commission so to exercise their powers under this Act as to provide, or secure or promote the provision of, an efficient, adequate, economical and properly integrated system of public inland transport."
That is going to be their job. That is what the Commission will be established for. Of course I cannot say before they are established what plan they will produce, and I am not going to try to do so in spite of the bludgeoning of the noble Lord below the gangway. It is the business of the Commission, and the purpose for which they are being set up. I suggest, with the greatest respect, that to ask or suggest that I, long in advance of their establishment as a Commission, should formulate a plan which it is the business of these gentlemen to produce, is entirely unreasonable, and neither the noble Lord nor I would expect anybody else to do a thing of that kind.
Whilst the noble Lord was developing his case, I was interested, if I may say so with the greatest respect, in a psychological study. Every now and then the noble Lord pulled himself together and I could tell that there was passing through his mind the thought: "I have not had a dig lately at the noble Viscount." Then he would interject a question to me. And I must say that I began to shiver every now and then, as I wondered what he was going to ask me next. Nevertheless, it was very interesting as a study in psychology. I am quite sure, however, that any feelings that the noble Lord may have towards myself are entirely of a friendly character, notwithstanding that threat of the noose with which he made such considerable play.
Now just let me ask your Lordships to recall what actually happened, say, at the beginning of the war. Quite quickly, control of the railways was transferred to the State, a Railway Executive Commit-
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tee was set up, and they are still functioning. They went on functioning through the war and they are still at work. None of those cataclysmic episodes that are now being prophesied occurred in that case. Of course not. The machine went on; this very efficient Committee continued to perform their duties. I have no doubt that when this Commission are set up the Minister will provide for competent people to serve as members and take part in the carrying on of the work. The noble Lord put forward, in the course of his speech, a number of items which sounded to me rather as though they had been extracted from the agenda of a directors' meeting. Among other matters he inquired who was going to repair the Woodhead Tunnel. I see that the noble Lord is shaking his head.
LORD BALFOUR of BURLEIGH: May I interrupt in order to explain? was not asking who was going to repair the Woodhead Tunnel at all. I mentioned it as an instance of the sort of question of policy which has to be decided at a high level. The question is whether it is to be repaired or a new tunnel is to be constructed—an operation which would require the expenditure of many hundreds of thousands of pounds, possibly millions.
VISCOUNT ADDISON: I have no doubt that that was one of the items on the agenda of a directors' meeting, and there will be lots of items like that on the agenda of meetings of the Railway Executives and other Executives in due course. It is not for me to answer in advance how the bewildering mass of administrative items which will doubtless crop up in the course of the day-to-day work of these undertakings will be dealt with. That will be their business. What we are studying is the setting up of a body of people to be in charge. Therefore, I am completely unrepentant about this matter. I am sorry to disappoint the noble Lord in not being able to announce details of a plan which a body of persons which we are now setting up are to produce. Of course I cannot produce it in advance—I would not suggest for a moment that I could.
Now may I come to the noble Lord's Amendment, because, after all, that is presumably what we are discussing at the moment. Under the scheme of the Bill a Commission will be set up, and the vest-

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ing date will be, as the noble Lord properly says, next year. I have no doubt that the first duty to be carried out after the Bill becomes law will be to set up a Commission, and it will not be a difficult matter to authorize the establishment of such executive bodies as may be necessary. Take, for example, the Railway Executive Commitee that now exists. Of course, it would continue to be responsible for the management and direction of such matters as fell to it. The railways, and various things connected with the railways, would continue to be administered by that body until other arrangements were made. It is not necessary, and it is not provided in the Bill, that all these different Executives must be set up by January 1. That is not provided in the Bill.
LORD BALFOUR OF BURLEIGH: May I interrupt once more? With great respect I think that the noble Viscount is wrong. I read the Bill as saying in subsection (3):
"The number and names of the Executives shall be such as may from time to time be provided by order of the Minister, but unless and until other provision is made by such an order there shall be Executives—"
And then various Executives are specified.
VISCOUNT ADDISON: I agree, but it does not follow that they are all to be appointed by January I.
LORD BALFOUR OF BURLEIGH: "Unless and until other provision is made." Does not that mean January I?
VISCOUNT ADDISON: It must all be qualified, clearly, by the practical working arrangements that the Commission will have to devise. For instance, take waterways and canals. The Executives for these will not be finally called into being until progress has been made with the formulation of proper schemes for dealing with those matters. As to the Road Transport Executive and the Executives for all the other various undertakings, which are to be taken over for the transport of the people, the carrying of goods on the roads, and so on, there will be schemes prepared—schemes for passenger transport, schemes for ports and other things as set out in the Bill—
VISCOUNT SWINTON: May I be forgiven for interrupting here? This is really
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the most important statement that has been made in either House on the part of the Government, I think, and I want to get it clear. The noble Viscount says that Executives will not be appointed at once. The Commission will be appointed, but he does not know when the Executives are to be appointed. I leave out the matter of the road interests which are to be taken over at different dates; but railways, canals and hotels all vest in the Commission on January 1 next. If the Executives are not to be appointed before January 1 next, what means are the Commission going to use to carry on the whole of these undertakings which will automatically vest in them?
VISCOUNT ADDISON: At the present time the administration of the various concerns belonging to the railways—such things as canals and hotels—is in the hands of the Railway Executive Committee and other bodies that may be appointed for that purpose. There is no reason at all to expect that they will necessarily have to be suddenly brought to a stop on a given date unless all the separate Executives have been appointed. That is not what actually will happen. There is no obligation here for all these Executives to be appointed by January I.
THE MARQUESS OF SALISBURY: As I understand it, the position is that there are certain committees of the railways (of which either members or the chairman are members of the board) which are responsible for policy and recommendations to the boards. That is what happens at present. Who is going to make recommendations to the Commission? What machinery is to be set up? I understood that these Executives were to take the place of the committees of the railways which will cease to be, or the directors who will cease to be. Who will take the place of the directors in the meantime? Who will sit on these committees?
VISCOUNT ADDISON: The first task of the Minister under the Bill is to get the Commission appointed, and as soon after that as possible he will appoint Executives. The point I am making here is that there is nothing in the Bill to say that the whole of them have to be appointed by January 1, that is, the vesting date.
VISCOUNT SIMON: It will be agreed that, say, on January 1 O next year there must be in existence some Executive or other which will look after the railways.
VISCOUNT ADDISON: Certainly.
VISCOUNT SIMON: If one reads Clause 5 (3), what Executive will that be? It will not be the existing boards of the existing railway companies, because they will all be discharged on January 1 next. Suppose executive questions have to be decided on January 1 0; some executive has to decide them. I think, myself, the answer is clear, if one reads the clause a little closely. It says:
"The number and names of the Executives shall be such as may from time to time be provided by order of the Minister."
I quite understand that the Minister need not make these appointments by January 1. It is the rest of the sentence which the noble Viscount has overlooked.
"… but unless and until other provision is made by such an order there shall be Executives known respectively as the Railway Executive …"—
and so on. I have hitherto been quite unable to understand how that can arise. unless the new Railway Executive are appointed by the Government for the time being. It is quite true it will not be a permanent body, because the permanent one may be appointed at another time. Who is going to be responsible for deciding executive questions?
VISCOUNT ADDISON: No one is suggesting there will ever be an hiatus. I am quite sure there will not be. The point I was making—and I am glad the noble and learned Viscount supported me—was in response to the position put forward by the noble Lord, Lord Balfour of Burleigh, as to all the things which will happen by a given date in January next year. The point I was making was that there is nothing in the Bill that requires the whole of these Executives to be in being by that time, and in the nature of the task some authorities would come into existence later than others. I am sure that the Minister and the Commission will take care that Executives are appointed in good time to carry on their work. Of course they will. I cannot imagine anyone thinking anything else. There will be no difficulty about that.
Lord Balfour of Burleigh has proposed a series of Amendments which in his view are going to expedite proceedings. Listen to what he proposes:
"Public authorities to be known as Executives may be set up to assist the Commission in the discharge of their functions."
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Another proposal to set up Executives. There will be no greater difficulty in setting them up than those we already have. After a while these Executives shall act as agents for the Commission and "exercise such functions of the Commission as are for the time being delegated to them." That is no different in substance from what is in the Bill. The Executives are to act as agents of the Commission:
"Every scheme made under this subsection shall be laid before Parliament as soon as may be after it is made and shall come into force at the conclusion of a period of forty days beginning with the day on which such scheme is laid before Parliament."
In other words, the noble Lord is going to take care to impose a delay of forty days before anyone cart do anything with anybody. It does nor seem to me to operate for expedition.
If I may revert to my old time phraseology, this set of proposals eviscerates the scheme to get things started and would substitute for it something which is even lunch less definite than the specific proposals of the Bill. We have had a long debate and we are shortly to approach a vital matter, to discuss the character and responsibility and the appointment of the Executives, and I really think it cannot be contended by any of your Lordships that the proposals of the noble Lord will in any way whatever expedite the commencement of operations under this I am sure the first business of the Minister will be to set up the Commission getting as many capable and responsible men as he can, and I have no doubt that after that they will see to it that responsible Executives are brought into being and that the services of the country are not interrupted, but are, so far as possible, rapidly improved.
LORD BALFOUR OE BURLEIGH: I feel that the reply which has been given requires some comment. I would like to, refer to the remarks of the noble Lord, Lord Lucas, who said that the points of policy I have mentioned could all be, delegated to various subordinate officials.
LORD LUCAS OF CHILWORTH: I said nothing of the kind. I said that a lot of points which the noble Lord had read out could be delegated to various subordinate individuals.
LORD BALFOUR OF BURLEIGH: I accept the correction, if it is a correction. The noble Lord said that most of the points I read out could be delegated to various subordinate officials. If he will look at Hansard to-morrow he will see that they are not matters which can be delegated to various subordinate officials. If they are, all question of co-ordination by the Commission or the Executive goes completely by the board. Subordinate officials all over the country will be doing very important things on entirely different lines. The noble Lord, Lord Shepherd, chided the railways for being inefficient. The noble Lord evidently agrees with what was said about the railways not very long ago by the Chancellor of the Exchequer. He said:
"This railway system of ours is an awfully poor bag of physical assets. The permanent way is badly worn, the rolling stock is in a state of great dilapidation, and the railway stations and their equipment are a disgrace to the country."
I think that was one of the most ungenerous things I have heard said about the railways. I am not going to argue it. All I will say is that what the Minister said on another occasion is more accurate. The Minister said that the railways were worked unmercifully under war-time conditions, with consequent deterioration of the rolling stock and permanent way. I prefer the view of the Minister to the view of the noble Lord. In my view, rather than introduce this vast Bill it would have been better to allow the railways to get on with first things first, and to restore their efficiency. Instead of that, half their programme for rolling stock and engines has been diverted to export. I am not here to argue the merits of the export programme, but that is why the efficiency of the railways has not been restored as quickly as all of us would have liked. May I turn to the reply of the noble Viscount? Frankly, I am left in a state of bewilderment. I certainly assumed that the Executives were going to be set up by January 1. The noble Viscount says they are not.
VISCOUNT ADDISON: No, I did not. I really do object to the noble Lord continually misrepresenting me. I said they were not necessarily all to be set up by January That is quite a different thing, and the noble Lord has no right continually to misrepresent what I say.
LORD BALFOUR OF BURLEIGH: If I misrepresented the noble Viscount—
VISCOUNT ADDISON: It is not for the first time.
LORD BALFOUR OF BURLEIGH: That is the last thing I wanted to do. If I did so, I humbly apologize because I entirely reciprocate what the noble Viscount said about friendly feelings. I have nothing but friendly feelings and the highest regard for the noble Viscount. If I misrepresented the noble Viscount, it was truly unintentional. I made the point that there was going to be a shortage of time when the Commission was set up after this Bill becomes law. They have to proceed with the setting up of the Executives, and I thought the Executives, with the exception of the Hotels Executive, had to be set up by January 1. That was my impression, and I still think, on reading the Bill, that there have to be Executives of this functional character set up. The Bill says:
"But unless and until other provision is made by such an order there shall be Executives …."
If there are not Executives from January 1 to January 1o—the date taken by the noble Viscount—I want to know who is going to give the decisions on all sorts of matters which arise from day to day—questions of daily management.
The noble Viscount, when he said my Amendment emasculated the Bill, overlooked the Amendment on the subsequent page. Of course, owing to our freedom of discussion in this House, I can quite understand the noble Viscount doing that. It is provided in this subsequent Amendment that:
"Until a scheme made under the provisions of this Section shall otherwise prescribe, the undertakings of the bodies referred to in the Third Schedule to this Act … shall be carried on by such persons as the Commission, with the approval of the Minister, shall appoint …"
The whole object of this, if the noble Viscount will only believe in my good faith and sincerity, is to get the Government out of a difficulty which I do not think they yet foresee. I am trying to make it so that the Commission will have time to consider what is the best form of Executive, and I provide a bridge by which they can appoint people temporarily to carry on. The noble Viscount

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referred to what happened when war broke out, and control was transferred to the Railway Executive Committee. He said, with great pride, that the machine went on. Of course the machine went on; it Went on under the control of the boards, subject to the war-time control of the Executive Committee. That is why the machine went on, and the difference between that take-over and this is that the boards are now going to disappear, and there will not be anybody to give executive decisions, unless these Executives are appointed.
THE EARL OF DUDLEY: And the Railway Executive Committee disappears as well.
LORD BALFOUR OF BURLEIGH: I suppose the Railway Executive Committee will disappear.
"THE EARL OF DUDLEY: It is in the Bill, on page 35.
LORD BALFOUR OF BURLEIGH: I hope I have not unduly trespassed on your Lordships' time, but I do not know where we go from here. We have had an answer which, I am bound to say, leaves me completely bewildered.
On Question, Amendment negatived.
VISCOUNT SWINTONmoved in subsection (3) to leave out "provided by order of the Minister." and insert "constituted by the Commission." The noble Lord said: We now come to an Amendment which—
VISCOUNT ADDISON: May I interrupt? We are now opening a discussion of an exceedingly important character, and I am sure we all wish that it should be discussed very clearly. If the noble Viscount has stated his case by 7 o'clock, and if it is convenient, we might then adjourn.
VISCOUNT SWINTON: I doubt whether I shall require anything like that time, because, very important as this issue is (and I agree with the noble Viscount, the Leader of the House, that there is no more important question. before us on this Bill than the subject of this Amendment, which stands in the name of the Leader of the Opposition and myself) yet it is a perfectly clear, concrete, and clean-cut issue. The issue is simply that, under the Bill as it now stands, it is laid down that certain specified Executives are to be appointed. These Executives are to be the agents of the Commission. The Bill
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lays down that these Executives are to be appointed by the Minister. My Amendment proposes that they should be appointed not by the Minister, but by the Commission. That is the plain issue before the House. That is the very grave question that I venture to submit to the House, and I shall do so briefly.
The whole of the arguments used by the Government in defence of this Bill all support my proposal that the Commission should appoint these Executives. As we proceed, the situation becomes "curiouser and curiouser." I am not surprised that the Leader of the House charmingly assented to my description of this Bill "as a scheme hereafter to be revealed." It is not going to be revealed during our debates. I do not say that is a deliberate concealment by the Government of something of which they are ashamed, or, at any rate, which they do not want to disclose, but no one is more frank with the House than the noble Viscount its Leader, and as we proceed it becomes perfectly plain that the Government have not concealed anything—they have not got anything to conceal. They really are the most innocent people. They say, quite frankly: "We do not know how this plan is going to work. We are sure it will be all right upon the night, although we are not quite sure which night it is."
We do not know which is the appointed day. We all thought that the Executives were to be appointed before all the boards dissolved. Not at all. They may, but, on the other hard, they may not. Somehow, apparently, it will all come right; the trains will run; and the cows will come home. How? This is a very autocratic Government; they come just short of the direction of labour; they vest this and that under Orders in Council and under Acts of Parliament. There is one thing that even to-day they cannot vest and transfer by an Act of Parliament, and that is the free services of free people. It is no good saying: "Of course, all this will go on. Of course, people will continue to serve." I am sure people will want to try and do their duty, however discouraged they may be, and however difficult the Government may make it for them. But you cannot transfer all of the directors, or such of the directors as you want, or the management, as if they were cattle or share certificates. You have to make arrangements with these people.

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Time is running on, and we do not know whether the Executives are to be appointed on the day the whole of this vast structure is vested in the Commission, or before that day. The one thing that does become clear is that the duty and responsibility on them is going to be even greater than we had supposed. There is no plan, and they have to make a plan. There is no knowing when the Executives are to be appointed, so far as I can see. Even after the appointed day this wretched Commission of nine people may be left trying to frame a plan, and also running the whole of the railways and the waterways, and, if the Minister had his way, the docks—heaven help us!—of this country. They have to be sure that they have all the functions under Clause 2.
Let us make no mistake about it, the whole of the responsibility is on the Commission. I will not read out all the things under Clause 2, but that clause sets out the whole of the duties and the whole of the powers. Clause 3, subsection (1), says:
"It shall be the general duty of the Commission so to exercise their powers under this Act as to provide, or secure or promote the provision of, an efficient, adequate, economical and properly integrated system of public inland transport and port facilities"—
The whole responsibility for planning is theirs; the whole responsibility for policy is theirs; and the Minister, we have been told, will interfere only on the gravest occasions, where the national interest requires it. Responsibility for the whole way that policy is to be carried out is theirs; and, indeed, that must be the responsibility of a board. You cannot divorce responsibility for policy from responsibility for seeing that it is to be carried out. The whole responsibility is theirs. I thought it was a very reasonable proposal of the noble Lord, Lord Balfour of Burleigh, that this Commission should select the agent, and decide the framework of the agencies through which they thought it right to carry out the plan which they had to decide upon and for which they are to be responsible. However, the Government do not want that. The Government have no plan in their minds, and they have done what really is the worst of things—they have set up a machine without knowing what the machine has to do. How can you devise machinery properly until you know what
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the machine is to do? It really is a case of putting the cart before the horse.
Here they say: "We do not know the plan; we do not know how the railways ought to be run; we do not know how the waterways or the hotels should be run, and all the rest of it. We do not know really what the scheme of co-ordination is, whether it should be regional or whether it should be functional." Although the Government do not know the plan, or how it ought to work, they are going to set up the machine to work it. I must say I do not think that is a sensible way of carrying on. However, that is what they have elected to do, and they must have the responsibility for it; and, subject to certain Amendments which I hope the House will accept, as to the particular nature of these Executives, I feel bound to accept that there shall be Executives, as set out in the Bill. Perhaps it is the only way of getting this thing going. But these Executives are to be the agents for carrying out the policy of the Commission, and carrying out that policy in the way the Commission say it should be carried out. What is more, at any time the Commission have the power to say: "We will transfer this set of powers from one Executive to another Executive." Indeed, subject to the Minister's approval, they can wash out all these Executives and set up another lot of Executives.
That is probably a necessary power, because, personally, I think the particular system of Executives which is being forced upon the country is the wrong system. I think the Government will find that to be so. But if these Executives are to be the agents of the Commission, to exercise the functions the Commission assign to them in the way the Commission say they ought to exercise them, then, surely, in common sense the right person to appoint these Executives is not the Minister, it is the Commission, for whom they work and io whom they are responsible. We have been told by the Lord President of the Council that he wants these nationalized industries conducted on businesslike lines. Whoever heard of conducting a business which was to operate through subsidiary companies — wholly-owned subsidiary companies—in which the board of directors of the parent company were not to appoint the subsidiary directors, but this was to be done by somebody from outside? Never in the whole history of business has there been such a story. Could

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anything make for conflict more than that? You surely want agreement; you want a team which will work as a team. Is this—the way to get team work? It is the antithesis of what anybody has ever done in business; indeed, I have never heard of a business which was conducted on that basis. It is even the antithesis of what the Government have clone in their other nationalization schemes.
Take the case of coal. The Coal Board were set up, and were to work through Regional Boards of such numbers as they thought fit. But who was to appoint the Regional Boards? Not the Minister of Fuel and Power. He is not chary in seeking powers, particularly personal ones; but we did not vest, and the Government did not propose to vest, those powers in Mr. Shinwell. Those powers were vested in the ordinary businesslike way in the Coal Board. When we came to deal with civil aviation, there were to be three separate companies. They have a lot of subsidiaries working, I understand, all over the world. The Minister appoints the boards of the parent companies, but he does not appoint the directors of the subsidiary companies. A subsidiary company is only a way of carrying on delegated management. There is nothing mysterious about calling it an Executive.
We should get the matter much clearer if we say what is the real truth. The Commission are to delegate their executive and operating functions to certain people. They are really managers for the Commission. Who ought to appoint managers? Surely not the Minister, but the Commission. All business, all common sense, all convenience, is in favour of this. What is the justification for the change? I can see one grave Objection. The only reason, I suppose, is that the Minister wants the patronage. Is that the reason? There is no reason in business; there is no precedent in Sound administration. I believe the Minister wants the patronage. That surely bad. I agree that the Minister must appoint the Commission but it is bad to go on increasing the possibility of "place men". I thought you were "facing the future"—you are doing nothing of the kind; you are facing the worst of the eighteenth century in this kind of thing. I am sure that if the noble Viscount, the Leader of the House, had
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to make appointments he would make honest appointments. But I am equally sure that everybody would be at him to do political jobbery— I know they would, and so does he. It is wrong. The Minister ought not to be put in that position, and the Lord President of the Council—who is the great authority on these matters—has said that the object when you nationalize is to take the industry out of politics. Is giving every subordinate appointment into the hands of the Minister as a piece of political patronage taking it out of politics? On every ground, practical, moral and political, the right course is to give the Commission, who have this vast responsibility, the duty of appointing their own subordinates. I beg to move.
Amendment moved—
Page 7, line 36, leave out from ("be") to ("but") in line 37, and insert ("constituted by the Commission").—(Viscount Swinton.)
VISCOUNT ADDISON: In intervening as I suggested, and as I am sure is convenient, to suggest that the House do now resume, perhaps I might be allowed to express an earnest hope that this issue, which the noble Viscount has epitomized with great clarity, need not be discussed at great length. We have had a very long debate on the point preceding this, and I am sure that it would be an advantage to all of us if this very direct and specific issue, so clearly stated, did not take us very long, so that we could get on with the other parts of the Bill. Of course, I quite accept that this is a vital matter, but I would ask noble Lords, so far as possible, not to extend it any further than is clearly necessary, and I suggest that we now adjourn.
[The sitting was suspended at five minutes before seven o'clock and resumed at half past eight.]
LORD TEYNHAM: I should like to add my support to this Amendment, which is of great fundamental importance. The Commission have to be a business organization, and if they are to function effectively they should certainly have control over the composition of the Executives.
It was argued in another place, on a similar Amendment, that if the Commission appoint their own Executives, vital matters in connexion with the Executives would fall out of the field of Parliamentary question and answer. I appreciate the point of view of the Minister that he is

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willing to accept responsibility, but surely if the Government are seeking to set up a public corporation to run transport as a commercial concern, it is essential that it should have the full confidence of the public, and especially with regard to its agents, who are of course the Executives; and this confidence would not be forthcoming if the Commission are not to have the right that any other corporation have to appoint their own agents. In any case, if the Commission make the appointments of the Executives, as set out in this Amendment, the Executives would still be subject to the Minister's approval. As the Bill is drawn, there is a great deal of patronage, which I feel must of necessity be given to the Minister; I think this will undoubtedly cause a feeling of disquiet in the country. Taking all these matters into consideration I feel it would be far preferable for the Commission to appoint their own Executives.
VISCOUNT ADDISON: I quite recognize that this is an exceedingly important Amendment, and I should like to express my sincere appreciation of the way in which the noble Lord, Lord Teynham, has compressed his observations into so short a space. The issue is quite simple. It is a definite and specific one: whether the Minister, after consultation with the Commissioners, as set out in paragraph 1 of the Second Schedule, should appoint Executives himself, or whether, as would happen if this Amendment were carried, they would be appointed by the Commission—no doubt after consultation with the Minister. That is the specific issue and, as the noble Lord who has just spoken said, the issue is that the Minister must realize that he is responsible to Parliament and must, therefore, undertake the responsibility of the appointment of those upon whom the success of the enterprise will mainly and directly depend—namely, the Executives of different types, as set out in the Bill.
It is perfectly certain that in time to come Parliament will be continually asking the Minister various questions which go to the root of the successful operation of the scheme, and he feels that it would not be right, either to him or to Parliament, if he were able to shelter behind the Commission and thereby not accept the proper and full responsibility that belongs to him as the head of this Depart-
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ment. That is really the issue. It is a simple and straightforward one, and my right honourable friend and our colleagues are strongly of the opinion that the fact that Parliamentary responsibility should devolve on the Minister is right. It is a direct conflict of opinion. I am sorry that in consequence of that I am not able to accept the Amendment.
THE MARQUESS OF SALISBURY: The noble Viscount the Leader of the House has appealed to us to be brief in this debate, and I will take him at his word. The issue is a very simple one. It is not complex and not technical, as have been some of the questions with which we have dealt during the last few days. But it is extremely fundamental, and it is the result of this new policy on which the Government have embarked. Under private enterprize there had grown up a certain balance. There was on the one side the employer: and on the other side the employee; and in the middle was the State, which was in the position of an arbitrator, available when called upon. But under nationalization and Socialism that balance is upset. The political chief becomes automatically also the employer; and the question is, what is to be the position of the political employer vis-à-vis the organization for which he becomes responsible? How much power has he to retain in his political position and political capacity, and how much is he to devolute to the economic expert? What is the proper balance between the political and economic responsibility if this great new experiment is to succeed?
That is the issue which is raised all through these Bills. It is raised in this particular Bill, and it is raised in the Amendment which we have tabled. It is not a new issue; it is an issue which has arisen under every nationalization Bill which we have had in this House. There is no new principle which is involved in this Amendment. We are in the dilemma (and I am not saying this from a purely Party point of view) that if we give the Board or Commission, or whatever you like to call it, too much power, we interfere with the ultimate responsibility of the Minister which he must shoulder under a system of this kind; and if we give too much power to the Minister, we destroy both the authority and the efficiency of the Commission which work under him. I think it will be generally agreed by the noble Lords opposite that

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some authority must be left to the Commission, otherwise, apart from everything else, no distinguished or reputable people would join it. It would not be worth while their taking part in it; and even if they did join it, they could not do their job, because their own expert judgment would be constantly warped by political considerations higher up.
I would suggest, with all diffidence to the noble Lords opposite, that the appointment of the Executives is just one of those things that must be left properly to the Commission. After all, they are the experts. It is no criticism of the Minister to say that he is a political personality. He has no great experience of the subject with which he has to deal. I am afraid that is often the position of Ministers under our political system. Therefore, he appoints a Commission of experts, all people who know their subject. If the noble Lord would look at Clause he will see how carefully that is safeguarded by the Government. They say that this Commission must be "persons who have had wide experience and shown capacity in transport, industrial, commercial or financial matters, in administration, or in the organization of workers." If such people would join this Commission, it would become a powerful authority of experienced people, for they would be appointed by the Minister purely because they were outstanding men in whom he himself had confidence, otherwise he would not appoint them to the job. Surely, the Government of the day can trust those outstanding men to appoint their own assistants. After all, that is what has already been done in the Coal Board, as the noble Viscount, Lord Swinton, pointed out to you earlier, and it was done in the Civil Aviation Act—
VISCOUNT ADDISON: No, that is not quite right.
THE MARQUESS OF SALISBURY: I will quote Clause 3 of the Civil Aviation Act so that it will become quite plain: "Each of the three corporations,"—corporations which, after all, may be regarded as the equivalent of the Commission; there were three of them, but they were comparable bodies—" shall appoint such Committees, with such advisory or executive functions, as are necessary for the purpose of securing"—
VISCOUNT ADDISON: May I interrupt you for a moment?
THE MARQUESS OF SALISBURY: Yes.
VISCOUNT ADDISON: I am sure the noble Viscount would wish to state the case with complete fairness, but the corporations under the civil aviation scheme are really the Executives. They are Executives; there is no Commission between the Minister and the Executives in the civil aviation scheme. It is a different set-up.
THE MARQUESS OF SALISBURY: I do not think so. The Commission are a Commission to manage transport. The Corporations are each of them Corporations appointed to manage individual areas for civil aviation. One has charge of the aviation for Europe, one for South America, one for the Empire, and so on. They are self-contained bodies for those purposes. If I may I will now read Clause 3 again:
"Each of the three corporations shall appoint such committee, with such advisory or executive functions, as are necessary for the purpose of securing the efficient discharge of the functions of the corporation, and, in particular, for the purpose of securing that those functions are exercised with due regard to the circumstances and requirements of particular areas."
In that clause, which I think is a very good clause, there is no mention of the Minister at all. The whole selection of the committees who serve under those corporations is left to the corporations. Surely that is wise. That is all we are asking for. We are asking that what has been done in the case of civil aviation, and done also, I believe, in the case of the Coal Industry Nationalization Act, should also be done in the case of transport.
Look at that clause; I suggest that we should follow it. I suggest that it would surely be better to give the Commission all the authority that is essential if they are to do their job properly. That, I think, is in the interests of the industry, and it has another advantage. The Minister appears to be an extremely courageous man. He has stripped away from himself any buffer or cushion that could protect him from public criticism, and that is not a very good thing. He is going to be in an extremely invidious position, in a very vulnerable position, and also in a very hard-worked position. He has to carry one of the largest industrial under-

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takings that has ever been known, in this country at any rate, and it is important that there should be between him and the public and the employees in the industry some buffer of experts who can take an immense number of decisions which otherwise would have to be passed up to him. I agree that he would have to take responsibility. To my mind it is one of the disadvantages of nationalization that an immense burden of responsibility is piled on a single man at the top. So give him what you can in the way of assistance. Any power and authority which you can properly give to the Commission, I believe, is not only to the advantage of the industry but to the advantage of the Minister.
I hope the Committee will believe that in the arguments that I have set forward I have tried to look at the matter objectively. It has not been my aim to make a violent attack on nationalization. But, for purely technical reasons, we on this side of the House believe that to take too much power from the Commission and invest too much power in the Minister will weaken the Commission, give it less power, less authority, and make it less efficient; and the only result will be to weaken vitally this new structure. We on this side do not like this new structure. We think that it is a mistake and that it will probably fail, but we also feel that if we are going to have it we had better have it as efficient as possible. For that reason we beg the Government to accept this Amendment.
LORD BEVERIDGE: I hesitate to intervene as I was not able, unfortunately, to hear the whole of the speech of the noble Leader. That was because I have been away from the House, and an absolutely firm promise which I had of a taxi to bring me back was not kept. I should, however, like to say a few words, for I feel that someone should speak from these Benches at this point, since we have an Amendment on the Second Schedule to the same effect—to put the appointment of the Executives in the hands of the Commission. We take the view that that ought to be done, though we do not, if I may say so, agree with all the reasons that have been advanced from the official Opposition for this proposal. For one thing, I feel that some of those who spoke from the leading Opposition Bench were tying themselves into knots on this ques-
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tion of the time of the appointment of Executives—and tying themselves into knots unnecessarily.
On the question of timing, I think the Bill could be much better drafted than it is. It is difficult to find out when things happen, but if you study it carefully I think you will see that the only Executive which has to be appointed by January 1 is the Railway Executive, because that is the only one which will certainly be taken over. Road transport will not be taken over for a long time after that, and it is the same for docks, where there is to be a scheme; and hotels have to have an appointed day. I draw from that an argument for the Amendment for putting things in the hands of the Commission. The Commission are the only body which will be in charge from the beginning, and I think it would be most unfortunate if they had to form their plan knowing it was to be carried out by people they did not appoint. The Commission are to be there; others are not to be there. That is a good practical reason for coming down on the Commission's side of the fence, rather than on the Minister's side of the fence. I do not worry about the argument as to which way you are likely to get more or less jobbery. I do not think that is a consideration that ought to enter into our decision at all.
I hope that if this Amendment is carried or accepted by the Government, and the Commission make appointments, something will be put into the clause to secure for the appointments of the Commission the same kind of publicity which we would get for appointments by the Minister. There is one definite advantage in giving the Minister this power: that he is subject to Parliamentary control. For these reasons I hope the Government may feel able to accept this Amendment. I believe it is a difficult balance of advantages, but I feel bound to support it, our own Amendments being in the same sense. I hope I have spoken not too long for the Leader of the House.
VISCOUNT ADDISON: I am grateful to noble Lords for co-operating in terms of brevity. We have given this vital but straightforward issue, as the noble Marquess called it, very careful consideration, and in view of the full and adequate responsibility of the Minister to Parliament we ought not to interpose this buffer. We

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must therefore adhere to the Bill. I am sorry we cannot accept this Amendment.
VISCOUNT SWINTON: We must then obviously go to a Division. I would only say that the noble Viscount the Leader of the House, by the decision he is advocating, has gone against everything he has so far said about this Bill. He said the Minister and not the Commission has this power, because he must: make all appointments that matter most. That, in effect, means that the Minister and not the Commission are to run this business. That is exactly what the Lord President of the Council said you should never do in nationalization. Believe me, there are only two ways of running a State under-
Resolved in the negative, and the Amendment agreed to accordingly.
VISCOUNT SWINTON: I beg to move the consequential Amendment standing in my name, but with a single verbal alteration. In place of the word "constituted," as set out on the Paper, I think a better word is "decided." Therefore, I would move to insert the words, "decided by the Commission." I beg to move.
taking of this kind. You must run it like the Army Council or a Government Department, where the Minister can be questioned—about everybody from Field Marshal down to private soldier. The other way is to run it as every business is run, with the shareholders (in this case the Minister on behalf of the taxpayers) appointing the board. If it is a bad board, then you get rid of it. But you must have that; it is the only way in which it can be run.
On Question, Whether the words proposed to be left out shall stand part of the clause?
Their Lordships divided:—Contents, 20; Not-Contents, 76.

CONTENTS.

Jowitt, V. (L. Chancellor.)

Holden, L.

Nathan, L.

Addison, V.

Kershaw, L.

Piercy, L.

St. Davids, V.

Latham, L.

Quibell, L.

Lucas of Chilworth, L.

Rusholme, L.

Darwen, L.

Marley, L.

Shepherd, L.

Dukeston, L.

Morrison, L.

Strabolgi, L.

Henderson, L. [Teller.]

Mountevans, L.

Walkden, L. [Teller.]

NOT-CONTENTS.

Cholmondeley, M.

Portal, V.

Deramore, L.

Reading, M.

Ridley, V.

Elgin, L. (E. Elgin and Kincardine.)

Salisbury, M.

Simon, V.

Willingdon, M.

Swinton, V.

Fairlie, L. (E. Glasgow)

Templewood, V.

Gifford, L.

Abingdon, E.

Wimborne, V.

Gisborough, L.

Airlie, E.

Grenfell, L.

De La Warr, E.

Addington, L.

Hatherton, L. [Teller.]

Drogheda, E.

Aldenham, L.

Hawke, L.

Dudley, E.

Amherst of Hackney, L.

Kinnaird, L.

Fortescue, E. [Teller.]

Ashton of Hyde, L.

Llewellin, L.

Grey, E.

Balfour of Burleigh, L.

Luke, L.

Iddesleigh, E.

Balfour of Inchrye, L.

Middleton, L.

Lucan, E.

Beveridge, L.

Monck, L. (V. Monck.)

Munster, E.

Brabazon of Tara, L.

O'Hagan, L.

Onslow, E.

Brassey of Apethorpe, L.

Rankcillour, L.

Radnor, E.

Broadbridge, L.

Remnant, L.

Rothes, E.

Butler of Mount Juliet, L. (E. Carrick.)

Rochdale, L.

Selkirk, E.

Rotherwick, L.

Carrington, L.

Saltoun, L.

Bridgeman, V.

Cherwell, L.

Sempill, L.

Chaplin, V.

Clanwilliam, L. (E. Clanwilliam.)

Sinha, L.

Elibank. V.

Soulbury, L.

Hailsham, V.

Courthope, L.

Teynham, L.

Hill, V.

Cromwell, L.

Waleran, L.

Long, V.

De L'Isle and Dedley, L.

Wolverton, L.

Maugham, V.

Denham, L.

Woolton, L.

Monsell, V.

Amendment moved—
Page 7, line 36, alter ("be") insert ("decided by the Commission").—(Viscount Swinton.)
On Question Amendment agreed to.
9.0 p.m.
VISCOUNT SWINTON VISCOUNT SWINTON moved in subsection (3) after "Railway" to insert "and Inland Waterways." The noble Viscount said: Having decided that the

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Commission shall have the appointment of the Executives, but having accepted the Government's thesis that there shall be certain specified Executives for the Commission to appoint, we now come to the individual Executives. It will be convenient if I say a word or two upon the next two Amendments that stand in my name, because really the two essentially hang together. The objects of these Amendments are two-fold. If I may, I would like to take the second first, because that will show why I want to put inland waterways with railways or, at any rate, wish to separate them from docks.
On the Second Reading I argued—and there was no answer whatever to this particular argument—that whatever you ought to do with docks, the one thing you ought not to do was to put docks under the same executive authorities as inland transport. The dock, the port, is essentially a link between inland transport and shipping. It has to serve both, and it must not be dependent on or be controlled by either. I believe I also argued on the Second Reading—I refer to this because it is unnecessary for me to repeat the argument in detail—that there is an overwhelming case, where a change is to be made of some kind in the control and management of docks, for following the well-established principle, established by Parliament in the Port of London, on the Mersey, and on the Clyde, of having a self-contained autonomous port authority.
No one will deny that the administration of these ports is altogether admirable. Their management is representative of all the interests of the port—the local authorities, the different services of the port, shipping, and the labour employed in it. I need not elaborate on that. Everybody knows the model of the Port of London, the Mersey and the Clyde. When there was an inquiry a few years ago as to how the Clyde Authority should be constituted, there was a tremendously strong and unanimous report which was adopted, that the Clyde should follow the well-established practice of the Thames and Mersey. Nor is there any question of profit in this, for these are non-profit-making undertakings. They pay their way, issue their own bonds, and raise their money very cheaply; and, having paid the interest on their bonds and their
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sinking fund and put aside whatever is proper for depreciation and development, they then do what the Chancellor of the Exchequer has advocated: plough everything back into the business or apply it in the reduction of port rates. There is also introduced competition and varied experiences as between management of port and port—not competition within the port. There, in the Port of London and the Mersey, is an integrated system that has worked admirably, and no one has challenged it.
Your Lordships will have seen a series of Amendments standing in the name of the Leader of the Opposition and myself and others at a later stage in the Bill, to establish this principle. We give to the Commission the power and, indeed, the duty to review the port systems in this country. It may be that amalgamations should take place, and I think it is very likely, but in any case we say it should be on a well established principle of a public non-profit-making trust. It is, therefore, necessary to get docks out of this Bill. It is elementary that the railway authorities should not control the docks, any more than shipping should. I believe that that is the authoritative opinion of practically every authority upon this subject, and therefore, without more ado, I say it is necessary to take the executive management of docks out of the hands of the Commission, leaving with them the power and duty of review.
That being established, if I have carried your Lordships with me, then obviously there is no case for a Dock Executive. What, then, are you to do? There are the inland waterways which are to be taken over. I have never understood why even if docks were included in the Bill the Government should lump docks and inland waterways together, except that there is water in both docks and inland waterways. It seems to me to be the only similarity between the two. There are classical examples which leap to the minds of the Fellows of All Souls, and which are followed, longo intervallo, by Wyke-hamists. But there is no possible connexion, because a canal meanders along, and I do not see how you can link its management with the management of the dock at Liverpool. It really has nothing to do with it. No less companionable marriage could really be designed. I should have thought that if you were going to marry the inland waterways to something you

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would marry them to the railways and the roads. Now it the Government should prefer in the first instance—because the Government, after all, will be able to unscramble the Executives which are set up—to have a separate Executive for waterways, I would not challenge that. What I am particularly concerned about is to get docks out of this business. [Interruption.] I know the noble Lord, Lord Walkden, is so splendidly conservative. He never changes. He learned at his father's knee fifty or sixty or seventy years ago that at some time the wicked railways took over the canals and then dried them all up and ceased to run them. I am not going into tha tancient history; I believe it is completely fallacious. I believe that as a matter of true history in regard to the railways and canals the last thing in the world the railways wanted to do was to take over the canals; but Parliament and the canal companies in their wisdom insisted on linking up the two. I believe that is historically a much truer account. But even if it were true, and it may be true, that the railways did not develop the canals, that surely is no reason for not linking the things together under this wonderful new creation. We are going into a brave new world under this Bill, and it is not going to be the Executives who are going to be responsible for policy; the Commission are going to be responsible for policy and the Executives are going to be their agents carrying out the policy which the Commission lay down.
If the Commission lay down that full use is to be made of the waterways, and they are to carry as much traffic as possible, then it would be the duty of whatever Executive they employ for the purpose to do it. Therefore I really do not think, whatever early prejudices my noble friend enjoyed in the past, that he need really be so frightened about the future; it is not a very good advertisement for his belief in his own Bill upon which he was so eloquent a night or two ago. Therefore I suggest that the natural thing to do would be to marry up the waterways and the railways. But I do not insist on that. If the Government would prefer that the waterways should be separate from the railways I am content to leave the Waterways Executive in being. But one thing I am determined to do, if the Committee will support me,
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and that is to rescue clocks and the administration of docks from this great and hydra-headed monster. Surely, you are giving the Commission enough to do without piling Pelion on Ossa—if I may be permitted to use a metaphor. Have they not enough to do working against time, as they will be, to accomplish all this by the first of January?
We are still quite uncertain as to when the Executives are to be appointed. In the intervening time the Commission have to plan where there is now no plan. Surely in this matter we might leave well alone. We all entertain grave anxiety in this connexion—I am speaking in no light vein about this—aid I am sure the Government, too, must be entertaining grave anxiety. I thought I could see signs of it through the speeches which have been delivered, signs of great anxiety lest there should be a breakdown in the transport of this country. I hope the noble Lords opposite are not too optimistic. I hope they will not think that all will, of necessity, be well. There will have to be a most tremendous effort to avoid a breakdown. Remember that we have gone through a bit of a crisis with regard to what was a much simpler business. After all, the integrating of the coal business was simple compared with this, and yet we ran into quite a patch of trouble. I pray that we may not run into similar trouble over transport. Observe that the date of vesting is rather sinister—it comes in midwinter, not in midsummer. But at any rate let us leave these admirable ports working in the way they have worked in the past. I beg to move this Amendment.
Amendment moved—
Page 7, line 39, after ("Railway") insert ("and Inland Waterways").—(Viscount Swinton.)
9.18 p.m.
LORD TEYNHAM: I would like briefly to support this Amendment, and the next which stands in the name of the noble Viscount, Lord Swinton. The only reason for linking inland waterways with the dock executive, as mentioned by the noble Viscount, Lord Swinton, is that in the past railways have interfered with the operation of the canals by competition. Perhaps it is on the principle of "set a thief to catch a thief" that they are now to be linked with the railways. We suggest by this Amendment that the Railway Executive will be the best to consider the efficiency of the canals and

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to maintain a properly integrated system of public inland transport as laid down in the part of the Bill relating to the general duties of the Commission. I entirely support the second Amendment; it is really consequential on a later Amendment which, as mentioned by the noble Viscount, will be moved, which seeks to remove the executive powers of the Commission from the control of the ports. I do not propose at the present time to enlarge on the management of the ports under the trust system, but of course there will be a debate later on the clause which refers to harbours.
LORD SALTOUN: I would like to ask the noble Viscount, the Leader of the House, one further question. I am sure that he must have consulted the Executive Committee of the Dock and Harbour Association on this point. I should very much like to know if they are in agreement with the Government or with my noble friends in this matter. I am a member of the Association myself, and I give you my word that I do not know what the answer is. I am sure they must have been consulted by the Government in this matter and I should like to know if they support the Government form as set out in the Bill, or that asked for by my noble friends.
VISCOUNT ADDISON: I am afraid I cannot answer without notice the question of the noble Lord. I Will certainly inquire and will inform him of the result; but beyond that I cannot say anything. I listened to the interesting and charming speech, full of metaphors, of the noble Viscount who moved this Amendment, but I still fail to see the strength of his argument that there is less kinship between docks and canals than there is between canals and railways. I could not follow that. Docks have water in them, and canals have water, and that seems to me a very good reason why they should go together. The noble Viscount argued very ingeniously that docks were more allied to iron rails, but that did not convince me a bit. Under the Bill, when the railway companies come over to the Commission, there will come over with them something like one-third of the docks of the country, which will be automatically transferred; and the only question which arises is: What is the sensible and practical way of dealing with this
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great addition to the transport system of the country?
What the Bill proposes is to set up a body which will make schemes for dealing with the docks, and waterways that are allied with them, and canals. I do not imagine for a moment that any scheme will propose the abolition of an efficient trust. I have no doubt at all that where they find an efficient body of men running a dock undertaking they will take account of their existence and incorporate them in the scheme. So the fact that you have this large volume of docks automatically transferred means that you must have a special organization to deal with the problems that present themselves; an Executive is the appropriate form, and is clearly the right kind of organization. I am afraid I cannot agree that we should leave out docks. They must come in. They are an integral and important part of the transport system of the country, and ought not to be left out. But it is quite desirable that schemes should be made which will make use of existing organizations for the competent running of the docks.
As to canals, I remember many years ago, when I was Minister of Reconstruction, appointing an eminent gentleman to make a report on canals. If you want a little disconcerting reading, the report on the canal system of this country will provide it. It was simply disgraceful. If you want a record of neglect by the railways in developing and improving and encouraging the use of canals, there it is. It is a shocking record. The real reason is that the men who are interested in steam engines and railways, and all that goes with them, are not interested in the same way in waterways or canal traffic. I am not blaming them; they are interested in railways. But it is a shocking story. We ought to associate the two water-borne systems of transport in one. I cannot agree with the noble Lord. The proposal in the Bill is quite right. There should be a Docks and Inland Waterways Executive.
LORD BALFOUR OF BURLEIGH: Is this report you refer to that of Mr. Frank Pick?
VISCOUNT ADDISON: It was a long time before Pick. I believe it was Sir John Snell. I speak open to correction, but I think it was Sir John Snell, and it was in 1919. It was a shocking docu-

477
ment. Really, there is every reason why water-borne transport should be dealt with as a whole. There is no doubt about that. There is no justification, first, for leaving the docks out, and, secondly, for splitting up the executive direction of the water transport system. Therefore, I am very sorry, but I cannot accept the noble Viscount's Amendment, and I hope he will not press it.
THE EARL OF SELBORNE: There are, of course, two points in this Amendment. One is whether the docks should be included, and the other is whether the canals should go with the railways or with the docks. I did not want to speak about what I admit is the major question—whether the docks should be included—but I listened with very great attention to the noble Viscount the Leader of the House, and I submit that the arguments he has given your Lordships as to why the clocks should be united with the canals are most unconvincing. Really, it is playing with the subject to say that they are both concerned with water. With great respect, I venture to say that is an argument which is unworthy of the noble Viscount. The point really is that the railways and canals are both concerned with inland transport, and—
VISCOUNT ADDISON: May I interrupt? I am sure the noble Earl also agrees that most canals end in docks. All of them do not, but nearly all.
THE EARL OF SELBORNE: It would be equally germane to say that most railways end in docks. Neither a railway nor a canal is of much use unless it goes somewhere, and inasmuch as we are an island, and people wish to export and import goods (although I admit His Majesty's Government are doing their very best to discourage that ancient practice) both the railways and the canals end in docks. But they are both concerned with inland transport. The railways have been criticized, and the noble Viscount joined in the criticism when he said that the railways acquired possession of the canals and starved them. That is a criticism that has been made, but there is another side to the case into which I did riot want to go to-night. We had, under private enterprise, the finest railway system in the world, and the canals fell into disuse. I say that it is an altogether wrong arrangement, in dealing
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with the problem of inland transport, to put the railways and the canals under different authorities. Surely this emerged from the speech of the noble Viscount, because he mentioned the fact that only about one-third of the docks are being taken over by the Bill, whereas all the railways are being taken over.
Just conceive the condition. Where there is a canal that leads into a dock that is not taken over by this Bill, obviously one does not get proper co-ordination, whereas canals and the railways are treated as part of the inland transport system, they can be dealt with as part of the same problem—and it is the same problem. As I have said, it is just playing with the subject to say that canals are wet and locks are wet, and, therefore, they ought to be dealt with by the same authority. The docks are being dealt with entirely differently under this Bill, and if my noble friend presses this Amendment to a Division, I will certainly follow him into the Lobby.
9.30 p.m.
LORD BEVERIDGE: I have an Amendment down covering some of the same ground, but not the whole of the ground, which the Amendment now under discussion covers. I hope it will save time if I say a very few words on my Amendment and this Amendment together. First, as regards the main point of whether there should be a Docks Executive or not, on this matter we on these Benches agree with the Government rather than with the Opposition. We feel that you must have an executive authority for dealing with the big problem of docks parallel to that dealing with the problem of railways. On the other point, as to whether the inland waterways should be with the railways or the docks, the Amendment which I have put down deliberately leaves the matter open, and I think it is necessary for it to be settled in the light of experience.
May I say that I, personally, am convinced by the arguments put forward by the last speaker, and one or two other speakers, that where the inland waterways are concerned with carrying very largely heavy traffic—the same kind of traffic as the railways—they ought to be with the railways rather than with the docks. But my Amendment does not settle that. My Amendment merely keeps the ground open, so that you do not find yourself forced to put the inland water-

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ways with the docks, which I think would be a marriage of great inconvenience. I want to avoid that marriage of inconvenience without a previous discussion. That is the reason for my Amendment, and I hope that the Government might be able to consider keeping that point open, at any rate, for further consideration.
VISCOUNT SWINTON: I must add a few words, because in a laudable endeavour to confine my speech as nearly as possible to the Amendments I did not explain the Amendment later on, which the noble Viscount obviously has not read, which deals entirely with the question of how the railway docks should be handled. Therefore, I must say a word in reply to show that my scheme is complete. Let me first finally dispose of this extraordinary thesis that the inland waterways and the docks must go together. We have slightly abandoned, I gather, the strange defence that both contain water—
VISCOUNT ADDISON: No.
VISCOUNT SWINTON: The noble Viscount has two defences. He still maintains this extraordinary thesis that both contain water. So does a great deal of the spirit which we drink to-day, but nobody suggests that we should amalgamate the distillers and the docks—and it would be about as sensible to do that. The noble Viscount has the alternative defence that you must amalgamate them because all the canals lead to the docks. Well, they do not.
VISCOUNT ADDISON: I did not say all.
VISCOUNT SWINTON: Well, a large number of them. A great many of the canals in the Midlands—which incidentally are very largely used to-day—do not lead to the docks at all. But even if they did, what an extraordinary argument. "The path of glory leads but to the grave," but it does not follow that the authorities who deal with our final interment are necessarily to govern the whole of our lives. In truth, the mere fact that some of these canals do ultimately find their way to sea, and come out into port, is a very bad argument for linking up the docks with them. As I have said before, why not link them up with the ships? They are much more closely
480
linked, as a matter of fact, to ships. The noble Viscount said you must put docks and waterways together because both relate to waterborne traffic. They do not at all.
A dock is a place where a ship comes in and loads and unloads. It is quite true that traffic is carried to and from the ship, sometimes by railways. sometimes by roads, and sometimes by canals. But there would be just as good an argument—in fact a better argument—for putting the docks under the ships than there is for putting them under the railways or under the waterways. The truth of the matter is that the docks should serve both, but should not be controlled by either, and should continue to be controlled as in the past. The noble Lord said that even if all of those arguments were right, it was necessary to do this because a number of railway-owned docks vest in the Commission. But they are run by the railway companies to-day, and nobody has yet argued that it was a good reason for abolishing the Port of London authority or the Clyde authority or Mersey authority, because there happened to be a number of docks in Hull, Southampton, and South Wales owned by railways. I think the noble Lord has certain reports on transport; and I think he will find that they all strongly advocate that the ultimate solution was not to give the railways more docks, but to take the docks away from the railways and vest them in integrated self-contained harbour trusts. That is exactly what we propose to do. If the noble Lord looks at the Amendment on page 26, the new clause to be put in after Clause 68, he will see that we do deal quite logically and practically with the railway docks. Of course, as he says, those will vest in the Commission on January I. They will continue to be managed by the Commission as the Commission think best.
It is true that following that change of authority, as to what is the right system of port management, we have an Amendment (of which I will not discuss the merits) which proposes that within five years these railway-owned docks should be handed over to autonomous public port trusts. But in the meantime they will be run by the Commission and, as the noble Lord has explained to us, the Commission will have the power to appoint such additional Executives as they desire. If the Commission consider that the best way to run the railway-owned docks during

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the interim period is to have a special Executive, there is nothing in the world to stop the Commission, the day after they are appointed, from setting up an Executive to run the railway-owned docks as a separate undertaking from the railways themselves.
For all those reasons we hold most strongly that you must not embroil the dock system in the country—in so far as it is not already owned by the railway companies—in this tremendous new, complicated monopoly which you are setting up. I do not want to have more points of dissention than we need. The noble Lord, Lord Beveridge, has said that he does not like the idea of marrying the inland waterways to the railways. I do not want to force that. It will be for the Commission to appoint additional Executives. If they decide that it is good business to amalgamate railways and canals in their administration, then there will be nothing to stop them amalgamating the two Executives; but I am perfectly content to take the noble Lord's advice on that and leave the Railway Executive standing as it is; and to leave the inland waterways, if that is what he proposes, to have a separate Executive. But what I am afraid we must firmly insist on is that we eliminate the docks from this clause.
With the leave of the House what I propose to do is not to move the first Amendment in my name, but to alter the second Amendment standing in my name. The Amendment I would propose, therefore, is "In line 39 leave out the words 'Docks and'". Subsection (3) of the clause would then read:
"The number and names of the Executives shall be such as may from time to time be decided by the Commission, but unless and until other provision is made — there shall be Executives known respectively as the Railway Executive, the Inland Waterways Executive, the Road Transport Executive, and the London Transport Executive, and, as from the appointed day … the Hotel Executive."
LORD GIFFORD: I should like to point out something which may not mean much to the noble Viscount, Lord Addison, but which means a great deal to me and to other noble Lords with sea experience. The docks have sea water in them and the canals have fresh water; and whereas many of us with sea experience would feel at home in a dock, we should have no idea how to hitch a horse to a canal barge.
VISCOUNT ADDISON: I do not think that the lack of knowledge of the noble Lord, which I fully share, has anything whatever to do with this Bill. I am sorry I cannot accept the omission of docks from this scheme. It would involve very large alterations in other parts of the Bill. We shall resist that. I do exhort noble Lords to think very carefully as to how they use their machine majority in this matter. It is a very dangerous thing to do. The last Division we had was on a vitally important point of principle to which no person could object, and I do not raise any objection. But in this I do, because it would involve a large number of other alterations in the machinery of the Bill. The whole scheme as set up was carefully thought out. It is noble Lords' own responsibility, but I hope they will be very frugal in the use of their machine majority.
LORD BALFOUR OF BURLEIGH: I am loth to stand between your Lordships and the Division, but the noble Viscount has made a statement which I am incapable of allowing to pass sub silentio: He spoke of the record of railways in the matter of canals, and said it was a shocking record. I am not prepared to allow that to pass, because I am quite certain he believes it or he would not have said it.
VISCOUNT ADDISON: It is true.
LORD BALFOUR OF BURLEIGH: It is not true. I had a brush with the noble Lord, Lord Strabolgi, in the debate on the Address, and in his summing up the noble and learned Viscount, the Lord Chancellor, quoted a report called the Pick Report. The Pick Report was confidential. It was dated May 14, 1941. It was marked "Secret and Confidential." It was never published. It was circulated to railways. I have seen it. In the course of that Report many statements are made which are unsupported by evidence. All I can say is that the Pick Report has not been published, and that having seen it I can say it is not conclusive on the point which the noble Viscount raises. He is depending on the Snell Report dated 1919. Perhaps I may be allowed to repeat one sentence from the Royal Commission on Transport in 1931:
"It is not just to say, as some people have done, that railway companies, except perhaps in a few instances, acquired canals in order to strangle them. It is true to say that rail-

483
way companies have, from various causes, acquired canals, it may be, with few exceptions, having little desire to do more than their barest legal duty in maintaining them."
The truth is that in the great majority of cases the railways were forced to acquire the canals. Having acquired them, I do not think the railway companies can be blamed for preferring to carry the traffic on their own systems. I am not prepared to accept the version that it is a shocking record; it is not true. I say that the railways have rendered great service in the past and that they should be judged on the progress they have made towards becoming a public service.
THE MARQUESS OF SALISBURY: I do not propose to say much on the merits of this particular Amendment because the case has already been clearly stated by my noble friend Viscount Swinton, but I am bound to say something on the last words which were used by the noble Viscount the Leader of the House. He talked about our machine majority. Would he talk about the machine majority in another place?
VISCOUNT ADDISON: It was elected by the people.
THE MARQUESS OF SALISBURY: The point is that in any House of Parliament there are certain members who are constitutionally empowered to take action according to their beliefs, and that applies both in the other place and in your Lordships' House. Nobody can say that during the last two years of this session this House has ever taken a Party view. Noble Lords have always tried to improve Bills upon their merits. That has been done with every Bill in the past and we shall continue to do it with Bills in the future. If we make Amendments in this Bill, it is purely for the purpose of making the Bill more worthy. The Bills are discussed here, they are amended here, and they go back to another place; and the other place have a perfect right and duty to take whatever action they think fit with regard to the Amendments which are passed in your Lordships' House. But to say that we are prohibited from taking any action which we believe to be our constitutional duty in regard to any results which may accrue is a form of blackmail to which no responsible person would ever submit, and I hope that no such argument will be pursued in this House again. This Amendment is
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designed for the improvement of the measure before us. It will be considered in another place, on its merits, no doubt. I am sure the noble Viscount the Leader of the House, when he thinks over the matter coolly, will not expect any Party in this House, or section of opinion in this House, not to take any action which they thought right merely because of possible consequences. That would be a very wrong thing and it would be a denial of all right under the Constitution.
VISCOUNT ADDISON: The noble Marquess and I, I am sure, are united in our wish and in our endeavour, as we have been for a long time past, to make the working of the machinery of this House fully worthy of its reputation, and I think we have done something to enhance it. And I am quite sure of this: that the noble Marquess will be the last to accuse me of doing or saying anything which he or anybody else can interpret as "blackmail" That was the word which the noble Marquess used. I do not like it.
THE MARQUESS OF SALISBURY: If the noble Viscount would prefer it, I will use the words "veiled malice."*
VISCOUNT ADDISON: I can quite understand, for example, the last Division which we had. It was on a very big question of principle, a very important question of principle, and I would be the last to challenge the desirability or the necessity of having a Division on matters of that kind. But this is different. This Amendment is destructive of the machinery of the Bill. There is no doubt whatever about that—it is destructive of the machinery of the Bill. I say, with great earnestness, and I am sure I say it in the best interests of our Parliamentary institutions, that it is right that this non-representative Chamber should bear in mind that whilst it does its best to maintain its traditions—and we do effect great improvements in Bills and discuss them with great advantage—we should be prudent in our alterations to proposals that have received a very large majority of support in the representative Chamber. I will not put it any higher than that. I do not want to engage in any discussion of our constitutional arrangements. I am sure there is a score, or maybe more than that, of Amendments of this character which have been put down in respect of this Bill. If they are all put to a Division

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then, of course, we are completely helpless—I know we are. They will be carried, and they will smash up the Bill; that is all. And it is not right.
THE MARQUESS OF SALISBURY: Of course I realize that we live in an age of rationing, and, no doubt, your Lordships' House must ration itself as everyone else does. But the fact is true—and I am sure the noble Viscount, the Loader of the House will agree to this—that it is a most moderate description of this Chamber to say that it is an advising Chamber, an amending Chamber, an improving Chamber. To carry out these functions is the object which we have in
Resolved in the negative, and Amendment agreed to accordingly.
LORD BEVERIDGE: I do not move my Amendment to page 7, line 39, to leave out "Inland Waterways." I beg the Government to consider it between now
mind in the action which we are taking to-night.
VISCOUNT SWINTON: I withdraw my first Amendment and move the second Amendment in the revised form, that is, in subsection (3) to leave out the words "Docks and."
Amendment, by leave, withdrawn.
Amendment moved—
Page 7, line 39, leave out ("Docks and").—(Viscount Swinton.)
On Question, Whether the words proposed to be left out shall stand part of the clause?
Their Lordships divided:—Contents, 29; Not-Contents, 71.

CONTENTS.

Jowitt, V. (L. Chancellor.)

Ammon, L.

Marley, L.

Beveridge, L.

Morrison, L.

Reading, M.

Chorley, L. [Teller.]

Mountevans, L.

Willingdon, M.

Darwen, L.

Nathan, L.

Dukeston, L.

Pakenham, L.

Huntingdon, E.

Hare, L. (E. Listowel.)

Piercy, L.

Addison, V.

Holden, L.

Quibell, L.

St. Davids, V.

Kershaw, L.

Shepherd, L.

Wimborne, V.

Latham, L.

Strabolgi, L.

Lucas of Chilworth, L.

Walkden, L. [Teller]

NOT-CONTENTS.

Cholmondeley, M.

Long, V.

Elgin, L. (E. Elgin and Kincardine.)

Salisbury, M.

Monsell, V.

Portal, V.

Fairlie, L. (E. Glasgow.)

Ridley, V.

Gifford, L.

Abingdon, E.

Simon, V.

Gisborough, L.

Airlie, E.

Swinton, V.

Grenfell, L.

Craven, E.

Hatherton, L. [Teller.]

De La Warr, E.

Hawke, L.

Doncaster, E. (D. Buccleuch and Queensberry.)

Addington, L.

Kinnaird, L.

Aldenham, L.

Llewellin, L.

Dudley, E.

Amherst of Hackney, L.

Luke, L.

Fortescue, E. [Teller.]

Ashton of Hyde, L.

Mancroft, L.

Grey, E.

Balfour of Burleigh, L.

Middleton, L.

Iddesleigh, E.

Balfour of Inchrye, L.

Monck, L. (V. Monck.)

Lucan, E.

Brassey of Apethorpe, L.

O'Hagan, L.

Onslow, E.

Broadbridge, L.

Oxenfoord, L. (E. Stair.)

Radnor, E.

Butler of Mount Juliet, L. (E. Carrick.)

Polwarth, L.

Rothes, E.

Rankeillour, L.

Selborne, E.

Carrington, L.

Remnant, L.

Selkirk, E.

Cherwell, L.

Rochdale, L.

Clanwilliam, L. (E. clanWilliam.)

Rotherwick, L.

Saltoun, L.

Bridgeman, V.

Courthope, L.

Soulbury, L.

Chaplin, V.

Cromwell, L.

Teynham, L.

Elibank, V.

De L'Isle and Dudley, L.

Waleran, L.

Hailsham, V.

Denham, L.

Wolverton, L.

Hill, V.

Deramore, L.

Woolton, L.

and Report stage, if they cannot agree to it now.
10.5 p.m.
LORD BEVERIDGE LORD BEVERIDGE moved, in subsection (3) to leave out "the Road Transport Executive." The noble Lord said:

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I am sorry to have to move this Amendment at this late hour, but it is one of some importance. This Amendment to leave out "the Road Traffic Executive" is followed by an Amendment, which I have put down later, to leave out Clause 39 and to substitute a clause providing for the holding of an inquiry into road and rail transport. There will follow from that a number of Amendments to leave out other clauses, which I did put down but which, in the interests of saving paper, I withdrew from the marshalled list, because they can be dealt with later. These Amendments raise the general issue of the treatment of road transport under the Bill, but they do not prejudge it. They do not prejudge the issue as between nationalization and private enterprise.
More than that, I venture to say that these Amendments, even although they would appear to take out a large part of the Bill, do not, in fact, conflict with the principle of the Bill, because the principle of the Bill was twice stated to us to-day by the noble Viscount the Leader of the House as having been accepted by the Leader of the Conservative Party twenty-five years ago in nationalizing railways. Obviously, if that is the principle of the Bill—and I have the authority of the noble Viscount the Leader of the House for saying that it is—it cannot conflict with what is proposed about road transport.
The object of these Amendments is to invite fuller consideration of a very difficult problem. I think we all realize that the question of what should be done about road transport is a very difficult one. Let me say that we on these Benches are far from content with the position of road transport as it was pre-war, when a large part of it was becoming, I will not say a monopoly—that is not the right word—but substantially a closed industry in private hands. The Government have put forward a proposition to try to deal with that situation. We on these Benches do not feel that the solution they propose is a good one. I will go further and say that what they propose is so contrary to the national interest and prosperity, so productive of waste and inefficiency in a vital industry, that it ought not to he adopted. I use those words advisedly. and I shall try to make them good. I think I can make them good. What do
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the Government propose? What the Government propose is to take over and nationalize under the Transport Commission about 30,000 road vehicles—10,000 now belonging to the railway companies coming over under Part I of the Bill, and 20,000 coming over under Part III. But that is only a part of what they propose. The other part is that there will be maintained and imposed restrictions upon use of all the other vehicles. That is the other part of their proposition, and that is the one upon which I shall mainly speak. Two questions arise when you are wishing to get somewhere, as the Government are wishing to get somewhere in the treatment of road transport.
LORD GIFFORD: When the noble Lord gave those figures, I take it he meant road haulage vehicles as opposed to road passenger transport?
LORD BEVERIDGE: I am obliged to the noble Lord. I am speaking of road goods vehicles and not road passenger vehicles. In order to shorten what I have to say to-night I wish to concentrate on road goods vehicles. I want to say something about road passenger vehicles later, but the correction is right and I am much obliged to the noble Lord. In considering any proposition there are two things to consider: How you get to your objective and what your objective is—your journey and your journey's end. I am not going to say very much about the nature of the journey which the Government propose to take to reach the end of taking over 20,000 vehicles under Part III. I think there will be a great deal more to be said about that when we come to Clause 39. To-day, I will refer particularly to what I may call the "Puzzle Corner" of the Bill, Clauses 39 to 41. I think all your Lordships will agree with my description when you realize that so distinguished a brain as that possessed by the noble Viscount, Lord Simon, was in fact misled as to the effect of one of the clauses, in judging whether it was really concerned with long-distance or with short-distance transport. In order to be short-distance it must be less than forty miles and must be within a twenty-five mile radius. Actually, if you work within your twenty-five mile radius you can go round and round in a circle for ever, and it is still short distance. In fact, I think that is a very fair description of this Bill

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—a Bill for causing the, road transport industry to run in circles.
There arc 48,000 puzzles to be solved, because there are 48,000 holders of "A" and "B" licences, and in regard to each of them the Commission have to come to a decision whether or not to issue a notice of acquisition. In coming to that decision they require a return as to what journeys are made, to see whether those particular journeys count as short-distance or long-distance, or count as ordinary furniture removal or other furniture removal. They have to decide whether, when a vehicle was taking meat, the man ought to have put in a sack of potatoes, or whether, when it was thirty-nine miles out, it brought a little back or not. All that kind of puzzle has to go on. I am not going to dwelt upon that, because it will be, I have no doubt, admirably illustrated with regard to Scotland in a later stage of the debate.
It is also clear that these really are puzzles if you look at Clause 41, in which I think the Government clearly realize that the puzzles are going to be insoluble in a large number of cases, because when the Tribunal cannot decide it can just do what it thinks fit as to whether it is long or short distance, or whether the concern shall be taken over or not. The point about all this is that it is going to take a long time to solve these 48,000 puzzles, and during the whole of that time the road transport industry will be in a state of uncertainty as to its future, and unable to undertake any development. If you want to know what that means, I would call your Lordships' attention particularly to Clause 50, and see how the effect of the service of acquisition completely stymies any action by the owner of an undertaking at the time being.
Let me say a word about the journey. The journey is going to be long and wearisome and full of absurdities at every point. I use those words deliberately. The decision whether to take over or not is going to depend on pure chance. The end, so far from being good, will be absolutely disastrous. ft is necessary that the 20,000 vehicles taken over shall be worked with the maximum efficiency of which a Government Department is capable—I am not saying whether that is high or low. But all the other 400,000 vehicles are to be subject to some restriction or other. Of those that are left to private owners,
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300,00o roughly will be subject to "C" licences, which means they can carry only the man's own goods—they cannot take anything back. Very often they must be running empty.
The "A" and "B" licensed vehicles also have restrictions on them. The restriction there is a simple one: the vehicles must never be more than twenty-five miles away from their operating centre. That is quite simple. The provisions of Clause 52 in that respect are rather different from those of Clause 39. There is an absolutely rigid limit of twenty-five miles for the "A" and "B" licence, and such vehicles left in private hands must run in circles; they cannot go outside that circle while carrying goods, Everyone will have the choice of either selling or restricting those vehicles or getting them taken over as a whole. That is what the Government are proposing.
At the end of this journey then, 20,000 vehicles are to ken over, costing, I should say, £10,000,000. I want to compare that with the £1,000,000,000 which is involved in this Bill as a whole. Of the rest, 400,000 odd vehicles will be run under "C" licences; running empty for a large part of their journeys because they are compelled to do so, or "A" and "B" licence vehicles running in circles. I suggest that the evil in this Government proposal is not the nationalization of 30,000 vehicles. We on these Benches are quite prepared for nationalization when a case is made out. The evil is the imposing of restrictions on the other vehicles. It is inefficiency by Act of Parliament: that is the evil I ask your Lordships to consider. It means putting valuable equipment in strait-waistcoats, and erecting barriers to individual enterprise. just think of it. You may not bring goods back—it is a good thing that that restriction did not apply to our ships when we were building up our economic greatness and our ships were taking coal to South America. Imagine their being told they could not bring anything back. That is the principle of the "C" licence, that you cannot have the double load unless it happens to he your own possessions or goods.
What I suggest to you is that the Government are proposing, at a time of acute economic shortage, when we are short of everything, a waste of our physical resources by Act of Parliament. I suggest

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to your Lordships that there must be some alternative to it. We must look for that alternative, and I am asking that the Government shall look for that alternative. The alternative, in the view of those who sit on these Benches, and, I believe, many who sit on other Benches, is not the continuance of the system of an industry, working for private profit, with the advantage of being a closed industry, as it very largely is. That is not the alternative. May I also suggest that the right alternative is not just to take this Government proposal for taking over these vehicles and slightly to alter it, and rewrite for twenty-five miles, perhaps, forty or eighty miles, and instead of "ordinary furniture removal" to put "all furniture removals." All those things would seem important things, but, as the noble Viscount the Leader of the House has himself informed us, the problems will remain whatever numbers you take. Moreover, if in fact you leave more for private undertaking than is at present proposed, if you agree to fifty miles instead of twenty-five, or eighty miles instead of forty, the effect is to diminish the number of vehicles taken over, and you might find that the Government will be doing all this for perhaps 10,000 vehicles or even less.
There must be some alternative to this destruction of efficiency by Act of Parliament. What is the alternative? The alternative suggestion from these Benches is that one should nationalize the railways. I sympathize with much that was said by the noble Lord, Lord Balfour of Burleigh, but I think that the nationalization of the railways is definitely a Government mandate. They must nationalize those, and the transport that goes with the railways, but free enterprise should be restored to the rest so that there may be effective, fair competition. I want to emphasize those points. When I outlined something like this in the Second Reading, I venture to say that the Government made no answer to me at all; they did not attempt any answer. I rather think, from something that was said to me, that they thought I had been answered by the noble Lord, Lord Brabazon of Tara. With all respect, the noble Lord did not answer me at all, nor my argument.
To begin with, having read what he said, I find that he slightly misunderstood me. He began by saying that he did not believe that you could have competi-
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tion everywhere. I never said that you could have competition everywhere. I think there are natural monopolies, and possibly the railways are natural monopolies. I think there are also some monopolies which I hesitate to term as natural, but such monopolies as arise from the great congestion of London. We have allowed London to grow, and it may be that there must be a monopoly there; but I would prefer to call it not a natural monopoly, but an unnatural monopoly; that is what London is, but that is peculiar and special. The noble Lord, Lord Brabazon, went on to say that if the railways had been exposed to the competition of road transport, they would all have been ruined. I want to suggest that if the competition is fair competition, then they must be ruined; that you cannot defend or justify defending invested capital against a more efficient system of doing anything, if it is fair competition, and that the worst possible way of defending your old system is to make the new system inefficient.
Suppose that when the railways were beginning someone had come along and said: "The stage coach owners are going to be ruined. In order to help them, we will arrange that no railway locomotive runs more than one hundred miles in a day or more than fourteen miles in an hour." That would have been rather like the physical limitations which the Government are proposing for the road transport vehicles which they are not to take over. If I thought that Lord Brabazon had answered me and that competition in transport was impossible, I should vote with the Government for even more comprehensive measures than they propose to-day. But we on these Benches do not believe that. I venture to suggest that the noble Lord was himself very well answered by the noble Lord, Lord Balfour of Burleigh, who pointed out that the railways went to sleep until they were awakened by the competition of the roads, and he emphasized the importance of maintaining that competition.
I suggest to the Committee that there is an alternative to inefficiency by Act of Parliament as proposed by this Government. That alternative is fair but real competition between State enterprise and private enterprise in transport. That is good for both, and good for the consumer. What do I mean by fair competition? Clearly, road transport must bear its fair

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share of the upkeep of the roads. Clearly, too, if one set of transport undertakings undertake the special liabilities of being a public carrier, those who will not take on those liabilities may reasonably be taxed for the benefit of those who do. Clearly, again, if you say that, for some reason of security, railways must be maintained which would not otherwise be maintained, then you must subsidize them; but I suggest you must do that by money, and not by making the competing system deliberately inefficient.
We, on these Benches, are certain that there is an alternative to the Government proposal. But we do not ask the Government or your Lordships to accept that alternative. All we ask in this Amendment is that time should be taken to look for the alternative. Therefore, our Amendment on Clause 39 says that instead of adopting the Government's scheme for taking over 20,000 vehicles and hamstringing 400,000 others—that is the proposal—there should be an immediate inquiry into the method of getting efficient and cheap road transport for all on terms that are fair to other forms of transport. We, on these Benches, only want to have a chance of making our case to that kind of tribunal.
I have spoken from these Benches, and I think that what I have proposed is liberal, in the old sense of really believing in free enterprise, not State-supported enterprise, not enterprise resting on State control. But let me say that though I speak from the Liberal Benches I am certain that there are many in all Parties who sympathize with that view. Of all the speeches I have read—and I have read all the speeches made in another place on this matter—the one that seemed to me to be most in tune with what I am trying to say to-day was made by Mr. Peter Thorneycroft, who is a Conservative. That speech was an attack on monopoly of all kinds. In this House, I have felt myself in most sympathy, I think, with Lord Balfour of Burleigh, in what he said about the need for competition and about the possibility of competition.
Let me now say one thing to the noble Marquess, the Leader of the Conservative Opposition. I have been reading with great interest the publication called the Industrial Charter, which has been pro-
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duced by the Conservative Party. A section in it deals with the small man, and this is a passage from it.
"If you are a lorry driver and have saved enough money to get your own lorry, we say that you should be allowed to set up in business for yourself."
That is an admirable doctrine. But what prevents lorry drivers from setting up now is the existing legislation of "A" and "B" licences and control, and they will not be enabled to set up if the Government carry this new proposal which involves a continuation of the licensing system which will press upon the small man even more heavily that it does to-day. This Bill will only make it harder for the small man and not easier. That is its inevitable consequence. That is what I say to the Benches below.
I appeal to the Government to regard my proposal for an inquiry not as a dilatory one but as one which is absolutely constructive. If my Amendment were accepted, it would be possible to start that inquiry immediately. I have suggested that the inquiry should report within a period to be laid down by the Minister and not exceeding two years. Actually it could report in a year or six months. I myself sat on a Commission which sat on quite as difficult a question as this and reported in eight months. This is not dilatory; it is getting on more quickly. It is a quicker route to a better end. I do rot know what the Government will say in reply to this. One thing I am fairly certain they will not say is that they agree with these Amendments but they think them unnecessary. They cannot say that these Amendments destroy the principle of the Bill, in view of whit the Leader of the House has continually told us to-day. They may say they have a mandate for nationalization, but may I remind them that a year ago we were debating another matter on which the Government had a very definite mandate—to employ the Friendly Societies in administering social insurance? They decided, I think on bad reasons but reasons most admirably set out by the noble and learned Viscount, the Lord Chancellor, that that was administratively wrong, and they disregarded that mandate.
I want to say one other thing about mandates. The Government may say that they have a mandate for nationalizing some road transport. But this is not nationalizing road transport; it is

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nationalizing 20,000 vehicles and hamstringing 400,000. They may say, as the noble Viscount the Leader of the House has said, that there is steady growth of monopoly, and this is the only conclusion. If you look at the figures there is not much monopoly in road transport. The number of "A" and "B" licence holders has fallen from 62,000 to 61,000. It will take a long time to become a monopoly at that rate. In the meantime "C" licences are increasing very rapidly. The Government say they cannot take over railways and leave road transport free to compete. If they say that they cannot leave road transport free to compete on fair terms, that is the worst condemnation of the Socialist programme that anybody could possibly make. I do not think they will make it. That would be the destruction of their own case.
I suggest that to argue that you cannot co-ordinate road and rail transport without nationalizing great parts just makes no sense whatever. What is meant by coordination from the point of view of the consumer is that buses should go to stations and not wait outside, and that there should he co-ordination about time tables. You can secure that co-ordination by the conditions of licensing, and so on, without there being any need to take over. I have already spoken longer than I should have done, but I do not think I have wasted my words. I beg the Government, with all the earnestness in my power, not to insist on any question of prestige or anything of that sort in trying to force through a difficult journey to a had end, and not to bang the door completely on what I have tried to say tonight. I beg to move.
Amendment moved—
Page 7, line 40, leave out ("the Road Transport Executive").—(Lord Beveridge.)
LORD LUCAS OF CHILWORTH: When the noble Lord, Lord Beveridge, started the argument, which he has continued to-night, in the Second Reading, he prefaced it by saying that he brought to this problem a virgin mind. I hope he will forgive me for saying that when anyone claims virginity, it always denotes a remoteness from certain facts of life.
LORD BEVERIDGE: I did not claim it, I accepted the assertion of the noble Lord, Lord Pakenham.
LORD LUCAS OF CHILWORTH: The noble Lord claimed it, and since he has been speaking to-night I have come to the conclusion that the gap between the cloistered seclusion of the academic world and the more mundane occupation of running transport is even wider than I thought. I will not attempt to argue against the laissez-faire economics which the noble Lord, in the old Liberal spirit, has put forward. I will try to answer him in about one-tenth of the time he took to expound his argument. The noble Lord says he wants efficiency. His Amendment is purely to go back to the conditions that operated before the war.
LORD BEVERIDGE: No.
LORD LUCAS OF CHILWORTH: Let me develop the argument. The only difference is that the road transport which is owned by the railways is nationalized. That is all that is done. I think the noble Lord has become so confused with his argument that he does not really know what he wants to nationalize and what he wants to leave out. The noble Lord, after wanting to revert to the state and the condition that operated before the war, then went into the question of the waste of "C" licensed transport. The noble Lord, if he will forgive my saying so—and I say it with great respect—just does not know how "C" licensed transport operates. The "C" licence holder has, first of all, a very large capital commitment. He has to run his vehicles, as the noble Lord quite rightly said, perhaps only one way carrying goods; the other half of the journey has to be done empty. Every mile away from his establishment that the "C" licence operator operates his vehicle means extra cost. If he can do that, and incur double expenditure, more cheaply and efficiently and with greater convenience to his business than anybody who plies transport for hire or reward and who can have return loads, then there is something radically wrong with the people who operate transport for hire and reward. If I, as a "C" licence holder, can run my vehicle 100 miles full and then run it back the 100 miles empty, and all the railway and the railway-owned transport and the "A" licence holders in this country cannot do it more cheaply and better by having return journeys, then there is something radically inefficient with them.

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When the right honourable gentleman the Lord President of the Council initiated, in the first week or two of the lifetime of this Parliament, the principle of nationalization, he said that the efficiency of service and the benefit to the public must be the test. I maintain that in these road transport provisions the Government have found the ideal test. Can private industry do the job better and more cheaply than those who are in the transport industry? Those who are in the transport industry whose concerns this Government seek to nationalize are those engaged in transport for hire and reward. That is the test between the two, and that is the competition between the two which will eventually redound to the public good. I do not know what the definition of efficiency is in the academic world, but in the hard industrial world the yardstick of efficiency is cost and price, and no "C" licence holder is going to run his own transport if he can get anyone else to do it better and more cheaply than he can. That is very simple economics.
I am not going to argue whether or not the "A" and the "B" licence holders should be confined to twenty-five miles, because that will come up for debate on another Amendment. The noble Lord may complain of what the noble Lord, Lord Brabazon, said, and I can quite understand why all noble Lords sitting on that side of the House want to throw the noble Lord, Lord Brabazon, to the lions—he has "blown the gaff." What did he say? He said that if you take over railways without taking over road transport that plies with the railways and competes with the railways for hire and reward, you are taking over a bankrupt concern. Why did the railways enter the road transport business? Why did the railways have to take in a number of cases a 49 per cent. interest in road haulage concerns? Why did they acquire 10,000 vehicles? They did that because they had to have it as an ancillary road haulage business.
We, on this side of the House, maintain that what this Government are doing is not nationalizing road transport as a whole, but nationalizing that section of road transport that plies for hire and reward; and they are taking the sensible course of treating "C" licensed vehicles as tools of industry, to be operated by the individual concerns in industry that
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want to operate them. I am with the noble Lord when he says that he wants to cut out radical inefficiency. But while you have competition, you are bound to get some seeming waste. There may be an apparent: waste in "C" licensed transport running empty, but I maintain, and I repeat to this House, that if a "C" licence operator can run his vehicle for half the distance empty, and do it better and more cheaply and it is more convenient in the conduct of his business, then there is something radically wrong with all the other services that are offered to him. I sincerely hope that the noble Viscount the Leader of the House will reject this Amendment. It is just going back to the chaos that everybody in this House who has any knowledge of transport condemns and never wants to see revived.
LORD MORRISON: I think it is a very great tribute to the virility of your Lordship's House that at this time of night, after such a long and exhausting sitting, there should be at least two members who are still going strong. I doubt if that applies to all the members of your Lordships' House and, therefore, I will be as brief as possible in my reply. The noble Lord is entitled to the sympathy of your Lordships' House, inasmuch as he has been called upon to make his case at very great length, and obviously after very great trouble has been taken in its preparation. If the noble Lord does not mind my saying so, it was much more like a Second Reading speech than the kind of speech to which we are accustomed on the Committee stage of Bills in this House. It is unfortunate that it should have been made at this late hour, when obviously it will not be possible for me to make a detailed reply to all the many points he raised. In brief, what the noble Lord asks for in his Amendment is that road transport should not be taken over, but that a Committee be set up to report within two years. I think that is a fair and brief summary of what he took very much longer to say.
Then the noble Lord finished by wondering what the Government would say. Well, I promise him that after I have finished with hi m the last lingering doubts in his mind as to what the Government may say will be dispelled. The noble Lord is endeavouring to set up a Committee to repot within two years,

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and it seems to me that he has assumed that at the end of two years this Committee would have reached a unanimous conclusion. I think that is very unlikely, unless the Committee he proposes to set up are to be a Committee of himself and his friends, and even then, judging by what happened at the recent Liberal Conference, it would be very doubtful whether there would be unanimity. What would happen if this Amendment were accepted? I suggest to him—and I do not think there is any gainsaying the fact—that the results to transport would probably be disastrous. During the two years envisaged for the production of its report the Commission would be in a state of uncertainty as to whether the future would be an integration of road with rail transport, or competition with it. It would consequently be quite in the dark as to the right lines of policy to pursue. In other words, the noble Lord's Amendment means a standstill in the work of the Commission for two years. The haulier would be in a similar state of uncertainty.
Finally, after the lapse of two years, it might be found that the Committee could not find a better plan than that envisaged in the Bill or, on the other hand, they probably would not agree among themselves. The noble Lord wondered what the Government would say, and the answer is certainly not that this Amendment is unnecessary. The answer is that this is a wrecking Amendment which would wreck the Bill. It would at once delete something like twenty-three clauses in the Bill. I do not know what unkind things some noble Lords here had to say about another place because they dared to send a Bill up to your Lordships' House with certain clauses which had not been discussed. I do not know what the reply of another place would be if we sent the Bill back again with twenty-three clauses struck out. I regret that the time is too late to make a further detailed reply to the noble Lord, because he has obviously taken a great deal of trouble over the preparation of his case. This is a wrecking Amendment, and I regret that the Government are not able to accept it.
THE MARQUESS OF SALISBURY: I would like to say only one or two very brief words. I thought that the noble Lord, Lord Lucas, was a little unfair to
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the noble Lord, Lord Beveridge, because, as I understood him, he accused him of wanting to get back to laissez-faire. As I understood the noble Lord's speech, all he asked for was that there should be an objective inquiry, and he was quite ready to abide by the results of that inquiry. The noble Lord, Lord Morrison, in his reply, said that it was useless to have an inquiry because you would never get agreement, which did not seem very strong support for the Government case. I suspect I am speaking for a good many noble Lords on this side of the House when I say that I have very considerable sympathy with a great deal of what the noble Lord, Lord Beveridge, said. I thought he made a brilliant and persuasive case for a greater relaxation of the restrictions which are imposed in this Bill. I would say to the noble Lord, Lord Lucas, that elaborate machinery, however efficient it looks on paper, is very often not so practical as a greater measure of elasticity, even though elasticity involves some relaxation of some of the features of a plan. I felt that the noble Lord was almost getting back to his arguments about the "economics of the jungle" which we all enjoyed some months ago.
LORD LUCAS OF CHILWORTH: And to which I hope we shall return again.
THE MARQUESS OF SALISBURY: We shall look forward to the noble Lord returning to the jungle at an early date. The noble Lord, Lord Beveridge, must also face the fact that this is, in effect, as the noble Lord, Lord Morrison, says, a wrecking Amendment. If we were to pass this Amendment we might just as well have thrown out the Bill on Second Reading. We have made it our practice in this House not to throw out on Second Reading Bills which were on the Government programme at the General Election. We got into some trouble about half an hour ago because we passed an Amendment which the noble Viscount the Leader of the House criticized and no doubt felt showed a spirit of controversy on the part of your Lordships. But those were good Amendments. The question whether the Minister or the Commission should appoint the Executives was a matter of policy; and if you do not include docks (to take another matter) it is not going to kill nationalization. But this is different; it would mean, in effect, destroying the Bill, and I do not think it would be possible

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for us of the Conservative Party to support the Amendment in view of the attitude we have adopted. I hope the noble Lord, Lord Beveridge, will not press the matter to a Division, but I have the greatest sympathy with many things he said in his speech.
LORD BEVERIDGE: I am very much disappointed but perhaps not wholly surprised at the attitude which the Government have taken in this matter. The noble Lord, Lord Lucas, attributed to me a virgin mind on this matter, but let me tell him that only last night I was talking to a man who is the owner of a large number of "C" licences, a man who works himself, and he said that the waste which was occasioned because he was not able to use his vehicles for other purposes was quite horrible. I can give many thousands of those cases.
From what the noble Lord, Lord Morrison, said, I do not think he can have heard me. I said this inquiry was to produce a report in six months. The noble Lord persisted in saying "Two years." My Amendment says that they shall make their report within a period, not exceeding two years, which the Minister may fix. May I assure the noble Lord that he can get an objective report upon facts which might lead to agreement. I happen to have had something to do with that kind of thing in a document called "The Beveridge Report."
I must reject the idea that this is a wrecking Amendment. It might be that at the end of an inquiry you would get recommendations to do exactly what the Government propose. I am afraid there may be another occasion for me to say something—on Clause 39. I hoped that the Government would have found it possible to do what the Leader of the Opposition suggested. I suggest that the case I have put against what was proposed, not as regards nationalizing, but as regards restricting, is unanswerable and will remain so, and that what the Government are proposing is inefficiency in the transport industry by Act of Parliament. I beg the Government to consider that and see whether they cannot find an alternative. Having said that, there is nothing
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else for me but to ask leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
House resumed.

ACQUISITION OF LAND (AUTHORIZATION PROCEDURE) (SCOTLAND) BILL [H.L.]
Reported from the joint Committee on Consolidation Bills, with amendments, and re-committed to a Committee of the Whole House.
CONSOLIDATION BILLS.
First Report from the joint Committee, being the Report on the Acquisition of Land (Authorisation Procedure) (Scotland) Bill [H.L.], made and to be printed; the Minutes of Evidence (with the Proceedings of the Joint Committee) laid upon the Table and to be delivered out.
BOROUGH OF CROYDON (RATING).
Petition of the Mayor, Aldermen and Burgesses of the Borough of Croydon under their Common Seal praying for leave to bring in a Bill to alter the dates as from which amendments of the valuation list of the borough of Croydon in respect of certain hereditaments in that borough shall take effect, together with a copy of the proposed Bill annexed thereto: read, and referred to the Examiners.

CERTIFICATE FROM EXAMINERS.
THE LORD CHANCELLORacquainted the House, That the Clerk of the Parliaments had laid upon the Table the Certificate from the Examiners that no further Standing Orders are applicable to the following Bills:

LUTON CORPORATION,

PRESTON CORPORATION,

NOTTINGHAMSHIRE AND DERBYSHIRE TRACTION.

The same was ordered to lie on the Table.
House adjourned at three minutes before eleven o'clock.