Sitting of 24 February 1948

Preamble
The House met at Half past Two o'Clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  TERRITORIAL ARMY

    Recruitment
    Mr. Martin Lindsayasked the Secretary of State for War what progress is being made in the recruitment of the Territorial Army.
    The Secretary of State for War (Mr. Shinwell): The strength of the Territorial Army at 31st December was approximately 33,500 male and 4,500 women officers and other ranks.
    Mr. Lindsay: Can the Minister break down these figures into officers and other ranks?
    Mr. Shinwell: I could do that if the question was put on the Order Paper.
    Mr. Lindsay: Does not this poor state of affairs show the necessity of greater priority being given to the Territorial Army for the provision of facilities, such as more accommodation?
    Mr. Shinwell: It certainly does, and that is precisely what we are endeavouring to do. I am fully aware of all the difficulties.

    Nunfield House, Dumfries
    Mr. Niall Macphersonasked the Secretary of State for War why he only offered £4,500, subject to certain deductions, for the purchase of Nunfield House, Dumfries, on behalf of the Territorial and Auxiliary Forces Association when he was aware that an offer of £10,000 had been made in December, 1947, by a third party
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    subject to de-requisitioning of the property within one year; and what action he proposes to take in view of the refusal of the owner to sell at the price he has offered.
    Mr. Shinwell: The offer, which was £4,600, less the capitalised value of any ground burdens, was in accordance with normal practice based on the restricted valuation of the property under the terms of the Town and Country Planning (Scotland) Act, 1947. My Department was aware that an offer had been made by a third party, but the amount of the offer was not known. As regards the last part of the Question, the action to be taken is under consideration.
    Mr. Macpherson: Ought not the right hon. Gentleman's Department to have acquainted itself with the amount of the offer by the other party, so as to reach some approximation of the real value of the property?
    Mr. Shinwell: When we make an offer for property, we are not aware of what our competitors have offered.

  BRITISH ARMY

    Deserters (Germany and Austria)
    Air-Commodore Harveyasked the Secretary of State for War how many soldiers have deserted in Germany and Austria since VE Day; and how many are still at large.
    Mr. Shinwell: Three thousand three hundred and nine soldiers have deserted in Germany since VE Day, of whom 320 are still at large. The corresponding figure for Austria is 268, of whom 45 are still at large.
    Air-Commodore Harvey: Does not the right hon. Gentleman view these figures with some alarm? Will he tell the House what he intends to do about this matter?
    Mr. Shinwell: We are doing everything possible to trace these men, but, of course, there are great difficulties.
    Air-Commodore Harvey: Can the Minister say what steps are to be taken?
    Mr. Speaker: The question which the hon. and gallant Member asked was "How many?" and not, what steps are to be taken?

    Forces, Malaya (Mails)
    Mr. Douglas Marshallasked the Secretary of State for War whether he is aware that some men serving in Malaya who have been away for over nine weeks, have not yet received their mail; and whether he will account for this delay and take action to speed these air mails up.
    Mr. Shinwell: I am aware that some men recently drafted to Malaya have found their mail delayed through their using a postal address different from the one they were given. Further instructions will, if necessary, be issued to ensure that the correct address is used.
    Mr. Marshall: Is the Minister aware that this matter is causing some distress, and will he look more thoroughly into it? The information I have received is that it is not just a question of address, but that the mails are not arriving.
    Mr. Shinwell: As it happens, the men were given the correct address, but some of them ignored it and gave the name of the ship on which they sailed. That led to delay.

    Monthly Army List (Publication)
    General Sir George Jeffreysasked the Secretary of State for War when it is proposed again to publish the Monthly Army List, giving particulars of the location of all units and formations of the Army, together with the names, appointments and stations of commanders, staff and regimental officers.
    Mr. Shinwell: As in the case of the Navy and Air Force Lists, the contents of the Army List are being reviewed, and it may be possible before long to make a very limited number of copies available for sale to institutions which particularly feel the need for them.
    Sir G. Jeffreys: Is the Secretary of State aware that the public wants to know where the Army is, and what the Army is doing, and is it necessary all this time after the end of hostilities to keep secret these matters? Is the Secretary of State under the impression that foreign Intelligence Services do not exactly know the whereabouts of our Army?
    Mr. Shinwell: It is because of some of the submissions which the hon. and gallant Gentleman makes that we are endeavouring to prepare this List.

    Sea Passages, Jamaica
    Commander Nobleasked the Secretary of State for War how many officers and other ranks, respectively, have travelled between this country and Jamaica by ordinary sea passenger service since 1st January, 1947, and how many by Government transport.
    Mr. Shinwell: Thirty-three Army officers and 293 Army other ranks travelled from this country to Jamaica by ordinary sea passenger service between 1st January, 1947, and 5th February, 1948. During the same period 34 Army officers and 947 Army other ranks travelled to Jamaica by Government transport.
    Commander Noble: In view of the shortage of passages available to the general public on this route, will the Minister give an assurance that such trooping will be cut to a minimum?
    Mr. Shinwell: It is not easy to delay the return of officers and men because of the non-availability of Government transport, so we have to use whatever transport is available.

    R.E.M.E. Training Wing (Order)
    Mr. Mikardoasked the Secretary of State for War if his attention has been called to Part I Orders, serial number 37, dated 13th February, 1948, posted at R.E.M.E. Electrical Training Wing, Bailleul Camp, Arborfield, inviting officers and other ranks to submit to the adjutant applications for service with the Arab League, and if he will make a statement on this matter.
    Mr. Shinwell: This notice contained a typing mistake. A small number of volunteers from R.E.M.E. were wanted for service with the Arab Legion, not the Arab League. The mistake was corrected in the Unit's Part I Orders on 16th February.
    Mr. Mikardo: While thanking my right hon. Friend for the information that the error in Part I Orders was so promptly corrected, may I ask him how recruitment for the Arab Legion at the present time, especially of men who have at least 12 months still to serve, is consonant with the statement of the Foreign Secretary on 12th December that British units of this Legion would be disbanded on the withdrawal of British Forces from Palestine?
    Mr. Shinwell: I understand that arrangements are being made for the disbandment of these Forces, but meantime we are under treaty obligations to provide assistance for training these forces and we must comply with the provisions of the treaty. I am obliged to my hon. Friend for having drawn my attention to the typing mistake.
    Mr. Manningham-Buller: Can the right hon. Gentleman explain how a copy of this Order could be published in the "Jewish Standard" in its misleading form?
    Mr. Shinwell: I am not aware. I could not say.
    Mr. Janner: In view of the very natural confusion between the Arab Legion and its connection with the Arab League, and in view of the actions that the Arab League are taking at present, will my right hon. Friend take steps immediately to discontinue recruitment of this particular unit?
    Mr. Shinwell: If my hon. Friend can direct my attention to some misdeameanours on the part of the Arab Legion naturally I will have to take them into consideration.
    Mr. Vane: Can the right hon. Gentleman correct an error? Surely there are no British units in the Arab Legion? It is the Transjordan Force with a few British personnel.
    Mr. Shinwell: I never said there were. The Arab Legion is the Arab Legion whoever happens to be associated with it.
    Mr. Mikardo: Is it really sensible to invite applications in January from British soldiers to join a force 2,000 miles away, part of which will be disbanded in May or very soon afterwards?
    Mr. Shinwell: That is precisely the routine we employ in connection with the Army as a whole. Although we are running down the Forces we have to replace the deficiences in certain units.

    Victoria Hall, Leicester
    Mr. Bowdenasked the Secretary of State for War when he will derequisition the Victoria Hall, 144, London Road, Leicester, as the continued occupation by the Army Records Office is causing serious inconvenience to the blinded persons who formerly used the hall.
    Mr. Shinwell: The inconvenience to the blinded persons who formerly used the hall is fully appreciated, but I regret that I am still unable to forecast when the Victoria Hall will be derequisitioned. Every effort is being made to find a suitable alternative property, but the accommodation situation generally is so acute that I cannot hold out hope of early success.

    Officer Cadets, Sandhurst
    Mr. N. Macphersonasked the Secretary of State for War whether he is satisfied that the ration scales appropriate to Sandhurst provide sufficient nourishment for the officer cadets.
    Mr. Shinwell: Sandhurst cadets receive the same ration as cadets at Officer Cadet Training Units and as recruits under primary training. This includes the heavy worker's supplement in addition to the normal ration.
    Mr. Macpherson: Will the right hon. Gentleman bear in mind that those who are undergoing training in Sandhurst are under the severest physical and mental strain at the time when very often they are still growing?
    Mr. Shinwell: I am well aware that the cadets have an exceptionally good appetite and I wish I could satisfy them.
    Sir Ralph Glyn: Would the Secretary of State bear in mind that the recruits have primary training, and that these cadets should not have their rations reduced below what they were before if they are still doing the same work?
    Mr. Shinwell: As regards the reduction of rations in the Services generally, that has already been decided upon. So far as the cadets are concerned, I am fully aware of the difficulty, but I have no power to increase the rations beyond what I have said.
    Squadron-Leader Fleming: Is it not a fact that the present ration scale for Sandhurst is higher over all than the civilian ration?
    Mr. Shinwell: As I pointed out, their scale includes the heavy workers' supplement, and to that extent it is higher in general than the civilian scale. Nevertheless, it must be admitted that, because of the strain of physical training that these

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    boys experience during the whole of the day, and every day, they have very good appetites.
    Mr. Lipson: Can the Secretary of State say whether the ration scales at Sandhurst have been affected by the recent cut in Service rations?
    Mr. Shinwell: The cut applies all round.
    Mr. N. Macphersonasked the Secretary of State for War what was the sickness rate at Sandhurst during January; and how many cases of fainting on parade were reported.
    Mr. Shinwell: The average number of officer cadets at Sandhurst who reported sick daily during the period 17th–31st January was approximately one and a quarter per cent. of the total strength. I would point out, however, that the period was too short to constitute a representative sample. In the same period three officer cadets fell out on parade and reported to the medical officer.
    Mr. Macpherson: Is the right hon. Gentleman satisfied with the present condition in relation to the statistics available for previous years?
    Mr. Shinwell: I cannot provide comparative figures, but, after all, we expect a few people to be sick.

    R.A.S.C. Clerks, Middle East (Deferred Release)
    Mr. Collinsasked the Secretary of State for War why R.A.S.C. clerks of the Middle East Land Forces, who are in Age and Service Group 67, have had their demobilisation deferred for a further two months.
    Mr. Charles Smithasked the Secretary of State for War why the release of Clerks G.D. and T.M.T. (R.A.S.C.) in group 67 serving in the Middle East has been postponed; when this shortage was first foreseen; and what steps were taken to train additional men to perform these duties.
    Mr. Asterley Jonesasked the Secretary of State for War why the release of R.A.S.C. clerks at G.H.Q. 2nd Echelon M.E.L.F. is being deferred for two months.
    Mr. David Rentonasked the Secretary of State for War why R.A.S.C. clerks of Group 67 and higher serving in the M.E.L.F. are having their release deferred; and whether he will take steps to bring men in that category into line with the general rate of release.
    Mr. Dribergasked the Secretary of State for War if he is aware of the concern caused to men serving in the M.E.L.F., and their relatives, by the news that the release of R.A.S.C. clerks in Group 67 is to be deferred for two months; what other corps, trades, or theatres are affected; whether the release of later groups is also to be deferred; what is the reason for this deferment; how many men in all are concerned; and if he will reconsider the period of deferment with a view to mitigating this hardship.
    Mr. Shinwell: I will circulate a statement in the OFFICIAL REPORT.
    Mr. Collins: Can my right hon. Friend say whether the demobilisation of these men will be delayed for some nine groups beyond those of the people who are alongside them?
    Mr. Shinwell: This is an exceptional Measure we have to take because of the shortage of men in certain arms of the Service. For the most part they are specialists, but the deferment is not prolonged. It continues over a very short period.
    Mr. Asterley Jones: Will my right hon. Friend also take into account that replacements for some of the men serving have already arrived, that there is evidence that existing men are seriously under employed, and also that R.A.S.C. clerks are employed on R.A.O.C. duties and that the R.A.O.C. are not being deferred?
    Mr. Shinwell: I am not aware of these details, and no doubt my hon. Friend will furnish me with such information as will enable me to take appropriate action.
    Mr. Driberg: In view of the supplementary question of my hon. Friend the Member for Hitchin (Mr. Asterley Jones), will my right hon. Friend say whether the answer to the last part of Question No. 39 in his circulated statement is a satisfactory one? Is he able to reconsider the matter if new evidence is brought to his notice?
    Mr. Shinwell: If information is brought to me I will consider it.
    Following is the statement:
    The release of Group 67 in the R.A.S.C. is not due to be completed until 24th March. No man of this Group has, therefore, yet been held beyond the period during which he was due to be released. There is, however, a very serious shortage of R.A.S.C. clerks, and the Commander-in-Chief in the Middle East may find it necessary to defer the release of certain individual clerks for short periods. It is not yet possible to say exactly how many men will be involved.
    The probability of shortages in this and indeed in many other trades has been foreseen for a long time and all possible steps have been taken to train replacements. In the present circumstances, however, and with the rapid run-down of the Army there are not nearly enough specialists to go round.
    Commanders-in-Chief in all theatres have the power to defer the release of individual men in any corps or trades for short periods if their services are essential and they cannot be replaced. This power is very sparingly exercised, but without it the present overall very rapid rate of release could not be maintained.

    Royal Tournament, Olympia (Profits)
    Mr. Thornton-Kemsleyasked the Secretary of State for War what sums from the profits of the Royal Tournament, held at Olympia last June, have been received by the Army; and how has this money been distributed between individual Army charities.
    Mr. Shinwell: The Army share of the profits of the 1947 Royal Tournament has been recently assessed at some £18,000. The manner in which this sum will be applied is under consideration.
    Mr. Thornton-Kemsley: Is the Minister aware that in the past organisations like S.A.A.F.A., the Soldiers and Sailors Help Society, the Royal Artillery Benevolent Fund, and the Cavalry Benefit Association have benefited considerably from the profits of the Royal Tournament? They have not had anything yet from this Tournament, and can the Secretary of State tell us whether they will be getting something?
    Mr. Shinwell: I should be surprised if they do not get their share in due course. It is in the hands of the United Services trustees.
    Sir G. Jeffreys: Is the right hon. Gentleman aware that the profits of the Royal Tournament have been for many years governed by certain rules and are for the benefit of Service charities? Is that assistance still to go on?
    Mr. Shinwell: Yes, there is no change in the system.
    Mr. H. D. Hughes: Does not my right hon. Friend think that the time has now come for a thorough overhaul of the re-organisation of this system of miscellaneous Army charities?
    Mr. Shinwell: That seems to be another question.

    Paiforce (Official History)
    Mr. George Jegerasked the Secretary of State for War when the history of Paiforce will be published.
    Mr. Shinwell: The production of this book has been delayed by work of more urgent public importance. The text is in proof, and work upon the illustrations and maps should be completed by the end of March. This should allow the book to be published during the summer.

    Courts Martial, Bad Nenndorf
    Mr. Stokesasked the Secretary of State for War when the courts martial on the officers concerned with third degree methods employed at Bad Nenndorf will be completed and when he proposes to publish a statement of fact.
    Mr. Shinwell: I am unable to say when the courts martial in question will be completed. Clearly I cannot publish any statement of fact while the matter is still sub judice.
    Mr. Stokes: Is my right hon. Friend aware that I visited this camp and found men in cells, the temperature of which was 10 degrees below zero? To my certain knowledge, one man had his legs frozen off. Will my right hon. Friend promise that when the facts are known, he will publish a true and verified statement of what happened?
    Mr. Shinwell: When the facts are known, I will consider publishing them.

    Regular Commissions
    Mr. Lipsonasked the Secretary of State for War if he will consider amending Army Council Instruction No. 973 of 1947, under which no one can apply for a Regular commission till 21 years of age, to enable the holder of a short service commission below that age to be told after six months that he will be granted a Regular commission when he is 21, or be admitted to Sandhurst till he reaches that age, as the instruction is having the effect of making many young officers take their release at 19 or 20.
    Mr. Shinwell: An instruction issued early this month enables all emergency commissioned officers who have not already had the opportunity of trying for Sandhurst and who would otherwise be barred by the lower age limit from applying for appointment to a permanent Regular commission before release to apply specially later this year. In this way every emergency commissioned officer under the age of 21 has had or will have at least one opportunity to obtain a Regular commission.

    Herr Werner Kleindienst (Interrogation)
    Mr. Dribergasked the Secretary of State for War if he has completed his inquiries into the beating-up of Herr Werner Kleindienst; and if he will now state what disciplinary action was taken against the British officer and N.C.O.s involved, and publish in HANSARD a full account of the incident.
    Mr. Benn Levyasked the Secretary of State for War if he will now disclose the nature of the punishment meted to the officer responsible for the maltreatment of Herr Kleindienst.
    Mr. Shinwell: After considering this matter further I have come to the conclusion that the conduct of the British officer and non-commissioned officers involved in this incident was improper and unworthy of the British Army. On the other hand, I am satisfied that there has been some exaggeration in reports of the ill-treatment alleged to have been suffered by this German. As the officer and non-commissioned officers concerned have been reprimanded and transferred to other duties, or in one case released from the Army, I consider that the interests of the British Forces in Germany will now best be served by regarding the incident as closed.
    Mr. Driberg: Could my right hon. Friend say in what respect the very detailed reports which he has been given were exaggerated? Was this man in fact beaten up, and did the interrogation take place from 2·30 in the morning until about five o'clock in the morning?
    Mr. Shinwell: I have gone very carefully into the matter and undoubtedly there was some ill-treatment, but there is a great deal of conflicting evidence and I prefer to accept the judgment of the officers who were concerned in trying this case.
    Mr. Levy: In view of the allegations which have been made in all good faith not only by my hon. Friend the Member for Maldon (Mr. Driberg), but also by myself, and which have had some publicity, will my right hon. Friend, in the interests of the officers themselves, publish an account of what in fact took place?
    Mr. Shinwell: I think not. On the whole, I think the action we have taken will be salutary.
    Mr. Vane: Is the right hon. Gentleman aware that a reprimand is really no punishment at all except to men making their careers in the Army, and in the light of all the circumstances of the case, does he not think that he should go further into it and consider instituting court martial proceedings?
    Mr. Shinwell: Again, I think not. A reprimand is a very serious matter to be entered in an officer's record which may have to be used on some other occasion. I think the action we have taken is, on the whole, beneficial.
    Mr. Stokes: Is my right hon. Friend aware that there is no secrecy about these matters on the other side of the water, and that if he will not publish the facts, all that will happen is that the reports will become greatly enlarged? Is it not much better that the truth, and the whole truth, should be given?
    Mr. Shinwell: But the facts have been disclosed without going into unnecessary details.
    Mr. Stokes: Not widely.
    Mr. Shinwell: Apparently my hon. Friend knows all about the facts. As the answer I gave concedes, we have admitted that the conduct of this officer and these non-commissioned officers was

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    unworthy of the British Army. I have admitted that there was some ill-treatment, and it seems unnecessary to go further.
    Mr. Driberg: In order to give my right hon. Friend an opportunity of stating exactly in what respect the reports were exaggerated, I beg to give notice that I shall raise this matter on the Motion for the Adjournment.

    Camp, Newark
    Mr. Sidney Shephardasked the Secretary of State for War when the Bow-bridge Road camp at Newark at present occupied by the Royal Engineers is to be vacated; and if he will give an assurance that the camp will be handed over to the Newark Corporation, who require it for housing purposes.
    Mr. Shinwell: The greater part of this camp will be vacated by the War Department later this year. The released portion will be made available for re-allocation by the Ministry of Works in accordance with the established procedure, under which the claims of the Ministry of Health for housing will be considered in conjunction with those of other Government Departments.
    Mr. Shephard: Is there no method by which the right hon. Gentleman's administration could hand this camp back to the local authority who have already decided to use it for housing purposes?
    Mr. Shinwell: I have said that the greater part of the camp will be handed back some time this year.

    War Graves
    Mr. W. D. Griffithsasked the Secretary of State for War for what reason the British Legion, on making inquiries regarding war graves locations, are told that the information is supplied on the understanding that the information is not communicated to anyone in the United Kingdom.
    Mr. Shinwell: I would refer my hon. Friend to the reply I gave to my hon. Friend the Member for Central Hackney (Mr. H. Hynd) on Tuesday last.

    Preston Barracks, Brighton
    Mr. William Teelingasked the Secretary of State for War whether he can make any statement as to the future
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    of Preston Barracks, Brighton; whether it will be amalgamated with the portions of Stanmer Park being held by the War Office for military recreational purposes, and whether the officers at present in charge of the barracks will continue to remain there.
    Mr. Shinwell: It is proposed to use Preston Barracks as a Military Convalescent Depot. The barracks will not be amalgamated with the requisitioned portion of Stanmer Park. When the Convalescent Depot is set up, officers of the R.A.M.C. will be in charge of it.

    Nurses (Release)
    Mr. Sorensenasked the Secretary of State for War what is the rate of demobilisation for army nurses and sisters; how many now remain in India; and what is the average period of service the nursing staff have to complete before they can expect demobilisation.
    Mr. Shinwell: The rate of release for Army nursing officers is an average of 78 per month. The number of Army nursing officers now in India is 22. The average length of service of nursing officers now being released is three years, two months.
    Mr. Sorensen: Is the right hon. Gentleman aware that quite a number of these nursing sisters are most anxious to get home and are feeling the strain very considerably? Can anything be done to expedite the repatriation of those who have served the longer periods?
    Mr. Shinwell: As long as we have some units in this area, we must have some nursing sisters to take care of them if anything goes wrong. We are endeavouring to release them as rapidly as possible.
    Mr. Sorensen: Would it be possible for some of the nursing sisters serving here to be transferred overseas in order to release those who have been serving for a long time?
    Mr. Shinwell: I hardly think that would be desirable in the circumstances.

    Families, Japan (Return)
    Mr. Osborneasked the Secretary of State for War how many soldiers' families who returned to England on 18th February in the troopship "Lancashire" had left England last autumn; how many

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    weeks were they in Japan; and is he satisfied that those arrangements could not have been avoided.
    Mr. Shinwell: No soldiers' families arrived in the United Kingdom on r8th February on the "Lancashire."
    Mr. Osborne: Can the Minister confirm the fact that the soldiers' families were in Japan a matter of five or seven weeks, and is it not a shocking waste of public money to let such things happen?
    Mr. Shinwell: That is quite a different question.

  PRISONERS OF WAR

    German Officers
    Sir G. Jeffreysasked the Secretary of State for War how many German Field Marshals, Generals and Admirals, against whom no charges are pending, are still being detained by us as prisoners of war; whether any of these have been offered release on parole, and in view of the time which has elapsed since the cessation of hostilities whether he will now arrange for the release of all such officers.
    Mr. Shinwell: The answer to the first part of the Question is 76. These officers have not been offered release on parole. They will be repatriated under the ordinary arrangements when their turn comes round.
    Sir G. Jeffreys: Is it not quite unprecedented to keep these officers in captivity so long after hostilities have ceased, and may it not recoil on our own heads in some future war if we do not happen to be the victors?
    Mr. Shinwell: I should not care to offer an opinion as to what might happen in a future war, if ever there is one. We are endeavouring to deal with these cases as rapidly as possible.
    Sir G. Jeffreys: Is it not very discreditable to this country to keep these officers—very distinguished officers—in captivity all this time after the end of hostilities? Will the right hon. Gentleman answer my question whether there is any precedent for such action by any country in the past?
    Mr. Shinwell: Possibly not; but there is very little precedent of which I am aware for a situation of this kind.
    Sir G. Jeffreysasked the Secretary of State for War the number of German officers who are prisoners in British hands and against whom charges of any kind are still pending, and whether he will either cause any such officers to be immediately brought to trial, or in event of sufficient evidence against them not being forthcoming, whether he will give instructions for their immediate release.
    Mr. Shinwell: As the reply is necessarily rather long, I will, with permission. circulate it in the OFFICIAL REPORT.
    Following is the reply:
    Thirty-five persons who were formerly commissioned officers in the German Army, Navy or Air Force, or in the S.S., against whom war crimes charges are pending, are held by my Department. There are also a number of former German officers charged with crimes against humanity or with membership of the organisations declared illegal by the Nuremberg judgment, who are in the custody of the Control Commission for Germany; others are held in British custody at the request of an Ally pending trial by that power. War crimes trials are proceeding as fast as possible, but the trial of some cases is necessarily held over for lack of court space; two further courts are being built; many of the persons held are involved in intricate cases, the investigation of which inevitably takes a considerable time. If sufficient evidence to justify trial of any of them is not forthcoming they will be disposed of according to their category.

    Travel Concessions
    Mr. Skeffington-Lodgeasked the Secretary of State for War whether, having regard to the fact that many prisoners have been moved to other camps since first forming friendships with British families, and that their repatriation will shortly be due, he will arrange for the Christmas travel and other concessions to apply to Easter and Whitsuntide.
    Mr. Sorensenasked the Secretary of State for War whether he will arrange that German prisoners of war shall be granted special permission to stay over night with friends during Easter; and enjoy the same privileges they had during Christmas.
    Mr. Shinwell: I regret that I am unable to agree to my hon. Friends' suggestions. Owing to the speed of repatriation and the considerable reorganisation of prisoner-of-war camps as their number is reduced, Easter and Whitsuntide leave travel would increase the administrative problems involved and might indeed interfere with the repatriation programme.
    Mr. Skeffington-Lodge: In view of that disappointing answer, will my right hon. Friend at least consider extending generally for these two periods the five-mile travel limit which exists at present?
    Mr. Shinwell: If I can arrange any further relaxation, I shall certainly do so, but I do not regard my answer as disappointing.
    Mr. Sorensen: Has my right hon. Friend considered allowing men in camps near places where they can stay either to stay out later than usual or co stay out over night? Surely, that would be no inconvenience?
    Mr. Shinwell: To the best of my recollection, in reply to previous Questions I agreed that they could stay out later at night. As regards further relaxation, that might interfere with the whole administration affecting prisoners of war and we are very anxious not to interfere with it unduly so that we can get ahead with repatriation.

    Repatriation
    Mr. Dumpletonasked the Secretary of State for War how many German prisoners of war now remain in the Middle East; and when it is expected that all will be repatriated.
    Mr. Shinwell: Approximately 58,700 German prisoners of war were held in the Middle East on 31st January. As regards the last part of the Question, I cannot yet add anything to the reply which I gave my hon. Friend the Member for Ipswich (Mr. Stokes) on 20th January, of which I am sending my hon. Friend a copy.
    Mr. Dumpleton: Can my right hon. Friend say if he has seen the memorandum issued by the Protestant pastors of these men, a copy of which I have sent to him, which reveals very disquietening features about the morale of these men who have been detained so long?
    Mr. Shinwell: I have no doubt that morale does deteriorate if men are detained unduly, but as I have said in previous replies we are endeavouring to repatriate them speedily.
    Mr. Sorensen: May I ask my right hon. Friend whether the actual repatriation has been accelerated in some measure?
    Mr. Shinwell: It has been accelerated.
    Mr. Dumpletonasked the Secretary of State for War how many German naval personnel surrendered by the Japanese at Singapore in May, 1945, now remain in this country; and when they will be repatriated.
    Mr. Shinwell: Twenty-seven officers and 187 other ranks were transferred to the United Kingdom from Singapore. No record is readily available of the total number repatriated to date, but it is known that 15 officers and 30 other ranks were repatriated during 1947. The balance remaining in the United Kingdom will be repatriated during June or July.
    Mr. Dumpleton: Is my right hon. Friend aware that allegations are made on behalf of these men that, when they were brought here in 1946 as surrendered personnel, they were assured that, as such, they would be repatriated straight away, but that they have since been transferred to the status of prisoners of war, leading to allegations of breaking faith?
    Mr. Shinwell: My information is that no official promise of repatriation was made to them, but that there is no difference in their status.

  TOWN AND COUNTRY PLANNING

    Cement Works, Westbury
    Mr. Grimstonasked the Minister of Town and Country Planning what steps he intends to take to enforce the conditions, which he has attached to his consent for the establishment of a cement works at Westbury, in the event of a breach of those conditions after the works have come into operation, particularly as regards the suppression of any nuisance caused by the emission of dust.
    The Minister of Town and Country Planning (Mr. Silkin): I have adequate powers under Sections 23, 76 and 100 of

    1759
    the Town and Country Planning Act, 1947, to enforce the carrying out of conditions attached to the planning permission in question. I would not hesitate to exercise these powers in proper cases.

    Aycliffe Development Corporation
    Mr. Vaneasked the Minister of Town and Country Planning what are the immediate tasks of Aycliffe Development Corporation; what expenditure was incurred during 1947; and what is the estimated expenditure for 1948.
    Mr. Silkin: The corporation are preparing a master plan which will be the basis of development of the new town. Their first constructional task is to erect some 300 houses, mainly of the non-traditional type, in addition to 41 aluminium houses, in order to provide urgently needed accommodation for workers in the North Eastern Trading Estate. This work will entail the provision of the necessary roads, sewers and other basic services. Expenditure to 31st December, 1947, amounted to £3,015. I shall shortly be asking the Development Corporation for an estimate of expenditure during the financial year to 31st March, 1949.

    Ennerdale Forest Road
    Mr. Granville Sharpasked the Minister of Town and Country Planning whether the Ennerdale Forest Road has proceeded in accordance with the specifications he approved; whether, apart from passing bays, the width of the roadway and grass verges have been confined to 15 feet; what assurances he has received as to the commencing and finishing dates of the grass turfing work specified by him before the work was allowed to proceed; whether he has stipulated the sowing of grass seed to cover the side of the high perpendicular bank on the up side of the road; and whether he will ensure that the speediest action is taken to restore Ennerdale's natural beauty.
    Mr. Silkin: I have no reason to believe that the conditions on the basis of which I agreed to the construction of the Ennerdale Forest Road are not being complied with. I am, however, in touch with the Forestry Commission about this and I will communicate with my hon. Friend.
    Mr. Sharpe: Is my right hon. Friend aware that approximately five miles of this road has already been completed,
    1760
    that no returfing work has been done, and that returfing was one of the conditions he laid down before this work commenced?
    Mr. Silkin: I am not surprised to hear that, because the returfing would be done at the end, but I am making inquiries into the matter and will let my hon. Friend know.
    Mr. Skeffington-Lodge: Is my right hon. Friend aware that in any case it was quite unnecessary to build this new road, existing facilities being quite adequate, and will he see that this kind of mistake is not repeated elsewhere while labour and materials in this country are in short supply?
    Mr. Silkin: Of course I do not accept the fact that this road was not necessary.

  NATIONAL INSURANCE

    Commonwealth Social Insurance Schemes
    Mr. John E. Haireasked the Minister of National Insurance what plans he has for the integration of social insurance schemes within the Commonwealth; and if he will state his policy.
    The Minister of National Insurance (Mr. James Griffiths): It is the policy of His Majesty's Government to endeavour to conclude reciprocal arrangements, wherever a satisfactory basis can be found, between the social insurance schemes of this country and other Commonwealth countries. A conference of officials of the Governments concerned was held in London last May to consider the principles governing such reciprocity. Their report, which was unanimous, is now before the respective Governments. Their recommendations, if accepted, will provide a basis for negotiations designed to establish specific and detailed reciprocal arrangements with particular Commonwealth countries.
    Mr. Chetwynd: Could my right hon. Friend say whether Eire is included in these negotiations?
    Mr. Griffiths: Yes, Sir.

    Approved Society Members (Claims)
    Mr. David Thomasasked the Minister of National Insurance whether he is

    1761
    aware that members of approved societies which have been taken over by his Department frequently have to send their claims to some distant address; and whether arrangements will be made to enable them to be paid from local offices of the Ministry.
    Mr. J. Griffiths: The arrangements for the gradual take-over of the work of approved societies have so far applied only to the smaller societies. In these cases the records of each society are transferred to a particular Ministry of National Insurance office in the same locality and claims from members of that society have to be sent to that office, just as they had previously to be sent to the society's office, even where, as often happened, the claimant's home was no longer in the same area. From July next claims may in all cases be made at the Ministry of National Insurance office nearest to the claimant's home, but in the interval before that date this cannot be done generally because claims must be sent to the office at which the records of the particular approved society are kept. I hope to be able, however, from April onwards to introduce by stages another change for the convenience of claimants under which, once a claim has been allowed, future payments of sickness benefit will ordinarily be made from the office nearest to the claimant's home.

  NATIONALISATION (MINISTER'S SPEECH)
  Mr. Osborneasked the Prime Minister if the speech by the Lord President of the Council on Sunday, 8th February, at Brixton to the effect that nationalisation is not an end in itself, but is the means of securing better public service, greater efficiency and economy, represents His Majesty's Government's policy; and if he will give an assurance that nationalisation will be abandoned where these aims are not achieved.
  The Prime Minister (Mr. Attlee): The answer to the first part of the Question is in the affirmative. The second part of the Question asks—in the words of Erskine May, 14th edition, page 337—for the solution of a hypothetical proposition, and I do not feel called upon to reply.
  Mr. Osborne: Since events may compel the Prime Minister to reply to this Question, is he taking any steps to meet the emergency which will arise when nationalisation fails?
  The Prime Minister: That is also covered by Erskine May.

  NATIONAL FINANCE

    Union Interalliée, Paris (British Subscriptions)
    Mr. Keelingasked the Chancellor of the Exchequer whether permission will be given to British subjects who are members of long standing of the Union Interalliée, Paris, to remit their annual subscriptions to France.
    The Chancellor of the Exchequer (Sir Stafford Cripps): No, Sir. I regret that in present circumstances we cannot afford to allow the remittance to all destinations of annual subscriptions to societies of this kind. I am, however, prepared to allow such subscriptions to countries with which arrangements for holiday travel are concluded.
    Mr. Keeling: In view of the good work which this club does in fostering allied amity, may we have an assurance that the Chancellor consulted the Foreign Secretary before giving his answer?
    Sir S. Cripps: I did not personally consult the Foreign Secretary, but this is a matter with which we have been dealing for some time, and the decision is quite definite
    Mr. William Teeling: Is the right hon. and learned Gentleman aware that there are some clubs in France with many members in this country which have arrangements with the Treasury whereby subscriptions can be paid here? Could not something be done for the Union Interalliée on those lines?
    Sir S. Cripps: I am aware that for certain learned and technical societies there are special arrangements, but they do not cover clubs of this type.
    Mr. Drayson: Can the Chancellor say whether the trade union movement in this country is allowed to pay subscriptions to clubs abroad?

    U.S.A. Films (Dollar Payments)
    Mr. Wyattasked the Chancellor of the Exchequer at what yearly rate did dollars leave this country in payment for American films in the months of November, 1947, December, 1947, and January, 1948.
    Sir S. Cripps: Twelve million pounds, Sir.
    Mr. Wyatt: Could my right hon. and Darned Friend say whether he would consider taxing the re-issue of old American films as distinct from the first issue of new films already in the country before the tax? And could he also say whether he sees any prospect of agreement with Hollywood in the future to enable a more equal balance between our film imports and exports?
    Sir S. Cripps: Those are quite different questions, which can be answered if they are put down on the Paper.

    Industrial Profits Statistics (Publication)
    Mr. Harold Daviesasked the Chancellor of the Exchequer if he will undertake to set up machinery to publish the figures of industrial profits as recommended by both the Balfour and Macmillan reports.
    Sir S. Cripps: Arrangements have already been made, as part of the postwar improvement in the Inland Revenue statistics, for the collection and publication of profit statistics for the main industrial groups. The earliest year for which figures can be obtained is the year 1947, the profits of which come into assessment for the year 1948–49, and the statistics will be published in the Report of the Commissioners of Inland Revenue for that year.
    Mr. Davies: While I thank my right hon. and learned Friend for that reply, may I ask him if he is aware that the statistics to which he referred are not at all the type of statistics requested by the Macmillan Report, the Balfour Report or the Cohen Committee? Secondly, is he aware that if the Labour Government put these facts on the table, the wage negotiations and the position as far as the workers are concerned, would be clear and that negotiations between both sides of
    1764
    industry would be much easier? Therefore, I beg my right hon. and learned Friend to do this.

    Entertainments Duty (Football Matches)
    Mr. W. D. Griffithsasked the Chancellor of the Exchequer whether he is aware that the Manchester United Football Club Limited have announced their intention to increase admission charges on the ground side, on the occasion of their F.A. Cup tie on 28th February, from 1s. 3d. to 2s.; and in view of his predecessor's declared intention in April, 1946, that the remission should be passed on to spectators, if he will reimpose the tax on those clubs which have not complied with that intention.
    Mr. Delargyasked the Chancellor of the Exchequer whether he is aware that the Manchester United Football Club has increased the price of admission for the match of 28th February; and, if in his coming Budget he will consider reimposing the full rate of Entertainments Duty on those clubs who have not complied with his request that the benefit of the entertainment tax remission should be passed to the spectators.
    Sir S. Cripps: The answer to the first part of each Question is "Yes," and to the second that I cannot anticipate my Budget statement.
    Mr. Griffiths: Is the Chancellor aware that, while all Mancunians hope that Manchester United will win the F.A. Cup, nevertheless there is considerable resentment in some quarters about these increased charges? Will he say whether he considers this charge an evasion of his predecessor's declared intentions in April, 1946?
    Sir S. Cripps: I cannot say whether in a particular case, for a particular match, the charge should be larger, or smaller.
    Squadron-Leader Fleming: Is the Chancellor aware that I wrote to him about this matter over a week ago, and have had no reply, and that by taking no action he is making a laughing stock of the exhortations of the Prime Minister that prices should be cut.
    Sir S. Cripps: No, I am not aware of that at all, and there is no reason why for a particular match a particular price

    1765
    should not be charged. No doubt the Manchester authorities think that their football matches are worth this money.

    Industrial and Agricultural Subsidies
    Mr. Longdenasked the Chancellor of the Exchequer if he will give the items of subsidy to private industry and agriculture, respectively, for the current financial year.
    Sir S. Cripps: I will, with permission, circulate a list in the OFFICIAL REPORT.
    Mr. Longden: Can the Chancellor say whether the figures he gives show that private enterprise depends upon the "dole" more than ever?
    Sir S. Cripps: That is a matter of opinion.
    Following is the list:

    SUBSIDIES TO PRIVATE INDUSTRY 1947–1948

    £

    Iron and steel

    7,500,000

    Ferro-chrome

    100,000

    Magnesium

    250,000

    Aluminium

    750,000

    Watch-making and jewel manufacturing

    320,000

    Cotton spinning

    1,500,000

    Coal stocking

    350,000

    Fuel oils and kerosene

    25,000

    Coastal shipping

    710,000

    Agriculture

    17,231,000

    Herring industry

    98,000

    Note.—The above list shows the amounts included in the Estimates which have been voted by Parliament in the current year, and any included in Supplementary Estimates recently presented, for subsidies to particular industries, excluding ones which have been discontinued since the Estimates were approved. It does not include expenditure provided under general policies such as housing, social services, the training, resettlement and transference of labour, distribution of industry, cost-of-living or research.

    Economic Situation
    Sir Waldron Smithersasked the Chancellor of the Exchequer if he will set up a committee of experts, to include the chairmen of the big five banks and representatives of other important bodies, to advise and suggest methods to overcome the crisis caused by inflation.
    Sir S. Cripps: I am afraid that the hon. Member's suggestion does not commend itself to me.
    Sir W. Smithers: Is the Chancellor of the Exchequer afraid that a few facts
    1766
    and an element of truth would blow his Socialist principles sky high?
    Sir S. Cripps: No, Sir, but having read the statements of the chairmen of the five banks I think I might get different opinions.
    Mr. Stokes: Was it not these very gentlemen who created the national inflation, which was once aptly described as "Wind in the national belly"?
    Mr. M. Lindsayasked the Chancellor of the Exchequer by what date, if present trends continue, will British capital resources be exhausted; and whether he will issue a statement giving the cuts in food which will then be necessary and an estimate of the unemployment which it is anticipated will then result from lack of imported raw materials in order to make the general public conscious of their peril and to obtain increased production.
    Sir S. Cripps: The hon. Member should await the Economic Survey. In the meantime, Cmd. 7324 has, I am sure, emphasised to the House the dangers of our position.
    Mr. Lindsay: Is the Minister aware that it is an exceedingly disappointing reply, although it is only on all fours with Government policy to deal with the crisis?

    Overseas Assets (Sale)
    Colonel Crosthwaite-Eyreasked the Chancellor of the Exchequer the total sale of British overseas assets from the 1st April, 1947, to the latest convenient date.
    Sir S. Cripps: I regret that without a great deal of research it would not be possible to give any accurate figure for this.
    Colonel Crosthwaite-Eyre: Does the answer mean that His Majesty's Government do not keep themselves aware of the rate of British overseas disinvestments which must surely have a vital bearing on our balance of payments?
    Sir S. Cripps: What is asked for here is the sale of British assets overseas, and that cannot be sorted out with accuracy without a great deal of research.
    Colonel Crosthwaite-Eyre: May I have a firm answer on this? Do not His Majesty's Government consider that this is a vital issue if they are going to keep track of our present balance of payments?
    Sir S. Cripps: It is certainly vital to know what money is flowing out of the country, but at the same time it is not always easy to tell whether it is from the sale of British overseas assets.

    Sterling Balances
    Colonel Crosthwaite-Eyreasked the Chancellor of the Exchequer whether His Majesty's Government have expressed their support of the American proposal to call a conference comprising those countries holding sterling balances accrued during the war so that the debts may be scaled down to a just proportion according to the war effort of the countries concerned.
    Sir S. Cripps: I am not aware of any such proposal being made by the United States administration and His Majesty's Government and cannot therefore express any opinion upon it.
    Colonel Crosthwaite-Eyre: Is not the Chancellor of the Exchequer aware that the House of Representatives Select Committee on Foreign Aid make this suggestion, that the Chancellor of the Exchequer and his predecessors have given many undertakings that these sterling balances would be reviewed and scaled down, and does it mean in fact that His Majesty's Government have no intention of carrying out their many undertakings, and will not take advantage of opportunities offered to them?
    Sir S. Cripps: No, Sir.

    International Monetary Fund (Dollar Loans)
    Colonel Crosthwaite-Eyreasked the Chancellor of the Exchequer if he will state by countries those members of the sterling area that have been granted dollar loans from the International Monetary Fund during 1947.
    Sir S. Cripps: No member of the sterling area other than the United Kingdom purchased dollars from the International Monetary Fund during 1947. The United Kingdom purchased 240 million dollars.
    Colonel Crosthwaite-Eyre: As His Majesty's Government have made themselves responsible for the requirements of the sterling area for dollars and for hard currencies, can His Majesty's Government state how long we are going on drawing on our reserves without asking any
    1768
    of our partners to draw on their reserves, and acting as a sort of Father Christmas, or bank, without regard to anyone else?
    Sir S. Cripps: I am afraid that Father Christmas and the bank are not quite the same thing.
    Colonel Crosthwaite-Eyre: Will the Chancellor of the Exchequer say whether His Majesty's Government and Father Christmas are not in fact the same thing?
    Sir S. Cripps: They are much more like the bank.

    Argentine Railways (Dividends)
    Captain John Crowderasked the Chancellor of the Exchequer how much interest was received in this country from dividends paid by the railways in the Argentine during 1946 and 1947.
    Sir S. Cripps: Dividends and debenture interest paid in this country by British companies owning railways in the Argentine amounted to rather less than £5 million in 1946 and rather less than £3 million in 1947.
    Captain Crowder: Does the Chancellor think that the surrender of all future dividends from these railways by the Chancellor to the Argentine Government justifies this new Argentine Agreement?
    Sir S. Cripps: I understand that the railway shareholders settled the agreement with the Argentine Government.
    Colonel Crosthwaite-Eyre: Do His Majesty's Government consider that in this case the shareholders are equivalent to the interests of this country at the present time?
    Sir S. Cripps: I am not concerned with that question here; I am concerned with how much was paid by the companies in certain years.

    Overseas Governments (Military Accounts)
    Mr. Swinglerasked the Chancellor of the Exchequer the figures for receipts from overseas Governments on military account, including arrears, and from the sale of surplus stores which are taken into account in Item 2 (a) of Table I in Command Paper 7324.
    Sir S. Cripps: I regret that no satisfactory division of these figures can be made.

    Customs and Revenue Figures (Wales)
    Mr. Emrys Robertsasked the Chancellor of the Exchequer whether he will arrange for separate figures for Customs and Excise duty and Inland Revenue to be kept and published for Wales and England.
    Sir S. Cripps: I regret that this is not practicable at present.
    Mr. Roberts: Is the right hon. Gentleman aware that the Treasury are practically the only Government Department which do not keep separate figures for Wales and England? Cannot the Treasury bring their practice into line with that of other Government Departments?
    Sir S. Cripps: I am afraid that until we have a Customs barrier between England and Wales it is impossible.
    Mr. Roberts: I am not suggesting a barrier.

    U.S.A. Catalogues (Import Licence)
    Mr. Boyd-Carpenterasked the Financial Secretary to the Treasury why Postal Depot, Customs and Excise, located at 17–19, Colmore Row, Birmingham, declined to release six catalogues sent free of charge by the Lisle Magnetic Corporation, of Clarinda, Iowa, U.S.A., to Messrs. John Godrich, consulting engineers, of Birmingham.
    The Financial Secretary to the Treasury (Mr. Glenvil Hall): The package of catalogues was detained by the Customs in the absence of an import licence granted by the Board of Trade. Messrs. John Godrich were informed accordingly on 23rd January, but I understand that no application for a licence has yet been made.
    Mr. Boyd-Carpenter: Can the right hon. Gentleman say what useful public service is served by demanding the obtaining of an import licence for documents which cost nothing, and which are of benefit to British industry?
    Mr. Glenvil Hall: This happens to be the state of the law under the Import of Goods (Control) Order, passed in 1940, and I ask the hon. Gentleman carefully to note the date.
    Hon. Members: During the war.
    Mr. Boyd-Carpenter: While I appreciate the right hon. Gentleman's care for the past, may I ask him whether it is not possible for him—an example having been brought to his notice—to consider amending legislation, in view of the fact that the present position is obviously absolute nonsense?
    Mr. Glenvil Hall: That question should be addressed to the President of the Board of Trade, who, no doubt, will take note of what the hon. Gentleman says.

    Purchase Tax (Printed Matter)
    Mr. Dumpletonasked the Financial Secretary to the Treasury why annual reports, appeals, and other printed matter, of religious, charitable, and philanthropic organisations, which contain a blank subscription form as an integral part of the publication, are subjected to Purchase Tax.
    Mr. Glenvil Hall: Material such as my hon. Friend describes is not chargeable with Purchase Tax. If he will let me have particulars of any case which has come to his notice, I will inquire into it.
    Mr. Dumpleton: Is my right hon. Friend aware that there is an apparent inconsistency in that the matter is dealt with differently in different parts of the country? In some cases tax officers are declaring that these publications which have a blank form in a page at the end are stationery, and that the whole publication is subject to Purchase Tax.
    Mr. Glenvil Hall: From what my hon. Friend says, I think that the regulations have been so interpreted in different parts of the country, but I can assure him that what I have said in reply to his original Question is correct.
    Mr. Collins: Can my right hon. Friend say whether a membership application form from the National Society for the Restoration of Basic Petrol is subject to Purchase Tax?
    Mr. Joynson-Hicks: Is the right hon. Gentleman aware that last year I received an assurance from the Treasury that it was impossible not to impose Purchase Tax on all charitable forms? Will he, therefore, investigate for himself what the position is, and make quite certain that the trade and his Department are fully aware of the facts, because there is some confusion?
    Mr. Glenvil Hall: Normal charitable appeals are not included, but I will try to make quite clear what does and what does not come within the ambit of the Order

  CIVIL SERVICE (SELECTION BOARDS)
  Major Legge-Bourkeasked the Financial Secretary to the Treasury what are the qualifications required for persons serving on advisory panels and selection boards dealing with former local government and public assistance officers with a view to their entry into the Civil Service in connection with the National Insurance and Assistance Bills.
  Mr. Glenvil Hall: The chairmen of these selection boards will be appointed by the Civil Service Commissioners from their panels of persons experienced in interviewing. The members will be selected from panels nominated by the associations of local authorities, and from civil servants of standing and experience in the Assistance Board and Ministry of National Insurance.
  Major Legge-Bourke: Will the right hon. Gentleman give an assurance that no members of these boards will be persons who are themselves seeking appointments in the Civil Service?
  Mr. Glenvil Hall: I would not like to commit the boards to the proposition which the hon. and gallant Member puts to me, but I cannot imagine that members of these boards will themselves be applying for the jobs which they allocate.

  TRADE AND COMMERCE

    American Timber (Stocks)
    Mr. De la Bèreasked the President of the Board of Trade whether he can state the approximate value in pounds sterling of timber purchased from America which was lying in British timber yards at 1st January, 1948; and how many times more expensive this timber was as compared to the pre-war prices.
    Mr. Bottomley (Secretary for Overseas Trade): I regret that the information regarding the value of American timber lying in timber yards in this country on
    1772
    1st January is not available, as stock returns are not based on value or on place of origin. Softwood imported from America in 1947 was about twice, and hardwood about three times, as expensive as in 1938.
    Mr. De la Bère: Is it not a fact that there are many millions of pounds' worth of American imported timber lying in yards, and of which no use is being made? Surely it is possible to find out the figure? I cannot accept that reply. I must voice a vigorous protest.
    Mr. Bottomley: This is in the hands of private enterprise. To ask stock holders to include such information in their returns would throw unnecessary work upon them.
    Mr. De la Bèreasked the President of the Board of Trade whether it is proposed to put the stocks of American timber now lying in British timber yards into consumption at an early date; and if the necessary type of trucks on the railways is available to move this timber, in view of the large sizes of timber purchased.
    Mr. Bottomley: In view of our balance of payments position, the utmost economy is necessary in the use of stocks of all timber. Licence holders are allowed as free a choice as possible from the available stocks, and American timber, like timber from any other source, moves into consumption as required to meet licences. The wagon position has improved and the specialised wagons required for these movements are available.
    Mr. De la Bère: Are we to understand that this timber cannot be transported on the roads in the normal way, and is it only available for rail carriages? Why was timber of this character bought in view of the need of proper timber for building? Why is it that the dollars were spent and no timber adequate for house-building obtained? Where are the houses?

    Football Pool Coupons
    Mr. Beswickasked the President of the Board of Trade if he is aware that pads of football pool coupons are available for retail sale, and as this seems to be an evasion of the paper restriction placed upon football pool promoters he will take steps to make the sale of such coupons illegal.
    Mr. Bottomley: These are copy coupons, the production and sale of which does not infringe any Paper Control Order. They are, nevertheless, wasteful of paper and I am considering what steps might be taken in regard to them.

    Haircutting Charges (Regulation)
    Mr. Bowdenasked the President of the Board of Trade if he will arrange for the Central Price Regulation Committee to investigate the prices charged for men's haircutting throughout the country, with a view to fixing a maximum charge.
    Mr. Bottomley: The Central Price Regulation Committee are giving consideration to this matter. I would emphasise, however, that an overall maximum charge would be inappropriate for a service, the quality and conditions of which vary so greatly.
    Mr. David Eccles: Would the hon. Gentleman persist in that, because as there is no price ceiling on ladies' hats it is quite unfair to put a price ceiling on men's hair?

    Anglo-Yugoslav Negotiations
    Mr. Dribergasked the President of the Board of Trade if he can now make a statement on the Anglo-Yugoslav Trade Agreement.
    Mr. Bottomley: Negotiations are proceeding, but I am not at the moment in a position to make a statement.
    Mr. Driberg: Would my hon. Friend give any indication of the reason for the long delays which have occurred, and which are obviously not in the interests of either party?
    Mr. Bottomley: Chiefly because the Delegation representing Yugoslavia feel that they ought to get capital equipment at once in return for the goods we require, and that is just not possible.

    School Text-Books (Imports)
    Mr. Rankinasked the President of the Board of Trade if he is aware of the increase in the numbers of school textbooks originating in Canada and the U.S.A. which are appearing in the British schoolbook market; and if he proposes to take any steps in the matter.
    Mr. Bottomley: No, Sir. Prior to 12th September, 1947, school text-books could
    1774
    be imported freely under an open general licence but since that date imports have in general been restricted to 100 per cent. by value of the prewar trade.
    Mr. Rankin: Is my hon. Friend aware that the publishers' lists now available show that this invasion is taking place, and that it can only be met if a bigger margin is given for school text-books?
    Mr. Bottomley: I have stated the regulation. If my hon. Friend has any evidence to show that it is being evaded, I should like to have the information.
    Mr. Lipson: Is the hon. Gentleman aware that the important thing is whether these are good school text-books, and not where they come from?

    Clothing Coupons
    Mr. Randallasked the President of the Board of Trade if he intends to discontinue the system of obtaining a patient's or inmate's clothing ration book on his entering a local authority's hospital or institution; and when the change will take place.
    Mr. Bottomley: Yes, Sir. From 1st March next, patients or inmates in local authority hospitals or institutions will not be required to surrender clothing coupons for the special clothing provided by the hospital.

  EMPLOYMENT

    Ex-Service Men (Training)
    Sir Patrick Hannonasked the Minister of Labour if he will make a statement on the progress of the training courses for ex-Service men conducted under the auspices of his Ministry; if the scheme is receiving the co-operation of employers; whether any figures are available of the number of students accepted by firms engaged in production for the export drive; and if he supports the projected programme of educational work in the interests of students and ex-students preparing for skilled employment in Birmingham and the Midlands.
    The Minister of Labour (Mr. Isaacs): Under the business training scheme 6,508 persons have completed the general training and almost all of these are in employment or are completing their training with individual firms. The scheme has been

    1775
    highly successful, and I am much indebted to employers for their very helpful co-operation. We do not keep records showing which of the employers who have accepted students are engaged in production for the export drive. I am certainly in sympathy with the efforts which are being made by ex-students to continue their study of management problems.
    Sir P. Hannon: Is any local organisation in the Midlands assisting the right hon. Gentleman in this valuable work in the education of these young students?
    Mr. Isaacs: There are no definite organisations but many employers are actively co-operating. May I thank the hon. Gentleman himself for his courteous help in this matter?
    Lieut.-Colonel Liptonasked the Minister of Labour whether he is aware that a number of ex-Service bricklayer trainees are now out of employment; and what provision is being made in such cases to ensure continuity of employment as bricklayers.
    Mr. Isaacs: The number of men who have completed their six months' course in bricklaying at Government training centres and await placing with an employer for their 14 months' continued training is 708. This number has been falling since the peak of 1,595 last August and I have reason to hope that all these men will be placed in due course. The number who fell out of continued training during the last month for which figures are available is 883. Every effort is made to place such men who so desire with other employers and the information available suggests that these efforts are generally successful.
    Lieut.-Colonel Lipton: What does my right hon. Friend suggest or advise in the case of those ex-Service trainees who have not yet been successful in finding employment as bricklayers?
    Mr. Isaacs: My advice is that they should come to the employment exchange, and we will do the best we can to help them.
    Squadron-Leader Fleming: Can the right hon. Gentleman say whether there is any objection to these ex-Service trainees from the trade union movement, as there was some months ago in the Bolton area?
    Mr. Isaacs: The hon. and gallant Member brought up an individual case in Bolton which was soon straightened out. So far as the trade unions are concerned, it is due entirely to their co-operation and assistance that this scheme has worked at all.

    Cotton Industry (Foreign Labour)
    Mr. Randallasked the Minister of Labour when the deputation of Government, Cotton Board, employers' and operatives' organisation representatives is going to Germany and Austria to explore the possibilities of recruitment of labour for the cotton industry; and is not sufficient information available without recourse to this special visit.
    The Parliamentary Secretary to the Ministry of Labour (Mr. Ness Edwards): It is expected that the party will leave early in March. I am satisfied that the visit will serve a useful purpose.

  NATIONAL SERVICE (TEXTILE WORKERS)
  Mr. Randallasked the Minister of Labour whether in view of the grave shortage of manpower in the textile industry, it is intended to defer call-up under the National Service Act for workers in all sections of the industry and whether releases under Class B will be favourably considered.
  Mr. Isaacs: No, Sir; but I have arranged to suspend for six months the calling up of individual productive workers in the spinning, doubling and weaving sections of the cotton industry whose immediate withdrawal would seriously interfere with production and for whom substitutes are not available. As regards the last part of the Question, there is no Class B release scheme for men who were called up in 1947 and 1948 for fixed periods of service.

  QUESTIONS TO MINISTERS
  The following Question stood upon the Order Paper in the name of Mr. VERNON BARTLETT:
  76. To ask the President of the Board of Trade whether, in order to counteract the disproportionate amount of material used by followers of the new fashions, he will change the clothes rationing system so that coupons apply to the length of material rather than to the number of garments.
  Mr. Keeling: On a point of Order, Mr. Speaker. In view of the immense public interest in the "New Look," could we have an answer from the President of the Board of Trade to Question No. 76?
  Mr. Speaker: It has nothing to do with me.

  PALESTINE

    Incidents, Jerusalem
    Mr. Eden(by Private Notice) asked the Secretary of State for the Colonies whether he is now in a position to make a further statement on the outrages in Palestine last Sunday.
    The Under-Secretary of State for the Colonies (Mr. Rees-Williams): The inquiries which are being made locally are not yet complete, but it is clear that there is no ground for the suggestions that members of the British security forces were responsible for the outrage. The Zionists in response to the challenge to produce evidence in support of their allegations have produced none. Statements have been made on behalf of the Arabs admitting the responsibility. I deeply regret to inform the House that the number of British soldiers or policemen killed in the incidents immediately following the explosion was nine and not eight as stated by me yesterday. No further casualties have been reported.
    Mr. Eden: May I ask the hon. Gentleman if he can now reply to the question asked yesterday by the hon. Member for Shoreditch (Mr. Thurtle) whether it is true that two British soldiers, or airmen, were murdered when undergoing hospital treatment?
    Mr. Rees-Williams: Yes.
    Mr. Eden: In hospital?
    Mr. Rees-Williams: That is so.
    Earl Winterton: Is the hon. Gentleman aware that statements have been made in certain quarters in this country supporting these monstrous charges against British troops, and will he communicate with the Attorney-General with a view to an action for seditious libel against those people who accuse British soldiers of this crime, when those soldiers have been murdered by treacherous and brutal people?
    Mr. Rees-Williams: I will consider that matter.
    Mr. Thurtle: May I ask the hon. Gentleman if he has any information from Jerusalem confirming the acceptance of responsibility for this outrage by the Arabs?
    Mr. Rees-Williams: Yes. Arabic pamphlets have appeared in Jerusalem today, and I have a translation of one of these pamphlets which is to the effect:
    "A group of Arab commandos carried out, by blowing up buildings in the Ben Yehuda Street in Jerusalem, reprisals for the Jewish bomb in the Ramleh. We warn the Jewish community that if they do not stop blowing up houses and killing innocent people we shall take severe revenge. we have enough explosives to blow up all the chief Jewish towns and colonies in Palestine. An eye for an eye and a tooth for a tooth.—Signed Abdul Khader Husseini."
    Mr. Gallacher: I wish to ask the Minister if it is not very desirable, in view of the situation that exists in Palestine, that, as a preliminary to the transfer of all the lads to this country, hospital cases should be transferred immediately to this country, and not kept there.
    Mr. Lipson: Now that this foul calumny against British Security Forces has been exposed, may I ask if the Minister will convey to His Majesty's Forces in Palestine the admiration of this House for the restraint they have shown under great provocation.
    Mr. Rees-Williams: I shall be very glad, and indeed proud, to convey that message from this House.
    Sir Arthur Salter: Does the Minister intend to see that appropriate action is taken, not only against the perpetrators of these two outrages, but also against those who, as it now appears without any evidence, broadcast this infamous and unfounded slander, which apparently led to the second outrage?
    Mr. Cocks: In view of the statement the Minister has just made, have any steps been taken to arrest Abdul Khader Husseini?
    Mr. Rees-Williams: Abdul Khader Husseini is very difficult to catch.
    Lord John Hope: May I ask the Minister whether he will do his best to see that the original answer to the right hon. Gentleman gets the widest possible circulation

    1779
    in the United States of America, in some quarters of which there may be far more readiness to publish the sort of innuendoes expressed in this House yesterday rather than his answer today?
    Mr. Rees-Williams: We will do all we can to meet the hon. Member's point.
    Mr. Norman Smith: May I ask whether the British High Command in Palestine is acquainted with the identity of the murderers of the nine British policemen and soldiers, and if so, whether steps are to be taken to bring them to justice?
    Mr. Rees-Williams: Investigations are still proceeding. As yet I have not any definite evidence on that point.
    Mr. Wilson Harris: Has the Minister observed that a statement has been issued by Mr. Henry Wallace to the effect that Arabs have been supplied with arms from British sources, on United States money, and will he categorically repudiate that particular slander?
    Mr. Rees-Williams: I did notice that statement in the Press. If Mr. Wallace did make it, then I regret it, because it is not so at all.
    Mr. Sydney Silverman: May I ask the Minister whether the is now in a position to amend the number of casualties which he gave as having occurred in the original outrage?
    Major Tufton Beamish: Before the Minister replies may I ask whether he is not expecting an apology to the House from the hon. Member for Nelson and Colne (Mr. S. Silverman) for his attitude yesterday?
    Mr. Speaker: Personal attacks are really quite out of place at the moment.
    Mr. S. Silverman: I asked a Question about figures. Could I have that Question answered?
    Mr. Rees-Williams: The only alteration I have in the figures is the one I have given. I have had no alteration at all from Jerusalem with regard to the civilian casualties in the explosion.

    British Service Personnel
    Mr. Eden(by Private Notice) asked the Minister of Defence whether he will inform the House what action has been
    1780
    taken with regard to British Service personnel in Palestine, in view of threats openly expressed against them.
    The Minister of Defence (Mr. A. V. Alexander): Immediate responsibility for the protection of the lives of British Service personnel in Palestine rests with the local commanding officers. His Majesty's Government have no doubt that, in the heightened tension in that country, the officers concerned will have taken, and are taking, all appropriate measures to this end, consistent with their obligation to assist the civil authorities in the maintenance of law and order. The Government have complete confidence in the officers responsible on the spot and I can assure them and the House that they may rely on the support of the home Government in any further steps that appear necessary. I wish to repudiate entirely the unfounded aspersions upon our British Forces in relation to the outrage in Jerusalem on Sunday. The patience and forbearance displayed in face of murderous attacks and the courage shown in defending both Jews and Arabs have been exemplary and worthy of our highest admiration.
    Mr. Eden: While we associate ourselves with everything which the right hon. Gentleman has said about the troops and the officers, may we take it from that answer, that in regard to any steps that the local authorities think it necessary to take—for instance, the placing of the Army on a war-time footing so that casualties do not occur in the way they recently occurred—local commanders are free to take those steps.
    Mr. Alexander: They have our full support.
    Mr. Henderson Stewart: May I ask whether the Government, in view of this recent outrage, following as it does so many others, have made any change in their general plans in order to avoid a repetition in the coming weeks of anything so dreadful?
    Mr. Gallacher: May I ask the Minister of Defence the same question that I asked the Under-Secretary of State for the Colonies? Will he, in view of the situation, see that hospital cases are taken out of Palestine? Cannot he understand what a terrible thing it is for the mothers of these lads if their lads are in hospital? It

    1781
    is had enough when they are strong and healthy.
    Mr. Alexander: No such action as the hon. Member suggests would, apparently, have saved the lives of the two men just wounded and undergoing immediate treatment when they were foully murdered. We shall, of course, take all possible steps to bring home the men who are in hospital as soon as they are fit to be moved.
    Sir G. Jeffreys: Will the right hon. Gentleman say whether the hospitals are properly guarded by British troops and armed police, and whether it will be possible on another occasion for murderers to enter another hospital and brutally murder men in bed?
    Mr. Alexander: I should say that this was something which occurred very suddenly in that particular area. I must leave steps of that kind with the greatest confidence in the hands of the very efficient Commander-in-Chief.
    Sir R. Glyn: May I ask whether, in regard to Jerusalem and that particular district, any restrictions have been placed on local commanders in regard to the imposition of martial law?
    Mr. Alexander: I would like to have notice of that question.
    Major Legge-Bourke: Would not the right hon. Gentleman consider the possibility of evacuating all hospital patients into the Canal Zone and asking the Egyptian Government if they would help?
    Mr. Alexander: I am sure that every possible step is being taken to evacuate hospital cases as early as possible but, of course, we cannot evacuate men who are not in a fit condition to be moved.
    Squadron-Leader Fleming: Is it not a fact that the local Commander-in-Chief in Palestine has no authority himself to
    1782
    declare martial law without the consent of the Palestinian Government and, if he had, if martial law were declared, does the right hon. Gentleman consider that there are sufficient troops and police in that country to maintain martial law?
    Mr. Alexander: Certainly.
    Earl Winterton: When will the right hon. Gentleman be in a position to answer the question which is repeatedly put to him: Has the local Commander-in-Chief, or has he not, full permission to declare martial law, that is to say, to shoot at sight these murderous ruffians who are murdering our people?
    Mr. Alexander: I am sure that the powers which, of course, rest with the Palestinian Government and the High Commissioner, would be put into operation at any time it was really necessary. I am also sure that if the Commander-in-Chief was not satisfied on the point, he would make it known.
    Mr. Henderson Stewart: In view of the questions which have been put in the last 10 minutes, and the obvious anxiety which everyone feels, would not the right hon. Gentleman consider the issue by the Government of a statement, perhaps next week, indicating what major changes in policy, which obviously everyone desires, are likely to be made?
    Mr. Alexander: I am not quite sure what the hon. Gentleman covers by the word "policy." If he is addressing to me a question with regard to the policy of evacuation and dates, I do not see any possibility of altering the policy already announced.

    NEW MEMBER SWORN
    Douglas Johnston, Esquire, K.C., for the Burgh of Paisley.

BUSINESS OF THE HOUSE
Motion made and Question put,
"That the Proceedings on the Water Bill [Lords] be exempted, at this day's Sitting,
from the provisions of the Standing Order (Sittings of the House)." — [The Minister.]
The House divided: Ayes. 255; Noes, 107.

Division No. 88.]

AYES.

[3.45 p.m.

Acland, Sir Richard

Evans, S. N. (Wednesbury)

McKinlay, A. S.

Alexander, Rt. Hon. A. V.

Farthing, W. J.

McLeavy, F.

Alien, Scholefield (Crewe)

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

MacMillan, M. K. (Western Isles)

Alpass, J. H.

Forman, J. C.

Mainwaring, W. H.

Anderson, A. (Motherwell)

Freeman, Peter (Newport)

Mallalieu, J. P. W.

Attlee, Rt. Hon. C. R.

Gallacher, W.

Mann, Mrs. J.

Ayrton Gould, Mrs. B.

Ganley, Mrs. C. S.

Manning, Mrs. L. (Epping)

Bacon, Miss. A.

George, Lady M Lloyd (Anglesey)

Mathers, Rt. Hon. George

Balfour, A

Gibbine, J

Middleton, Mrs. L.

Barton, C.

Gilzean, A

Mikardo, Ian

Battley, J. R.

Glanville, J. E. (Consett)

Millington, Wing-Comdr. E. R.

Bechervaise, A. E.

Gooch, E. G.

Mitchison, G. R.

Benson, G.

Greenwood, A. W. J. (Heywood)

Moody, A. S.

Beswick, F

Grenfell, D. R.

Morgan, Dr. H. B.

Bevan, Rt. Hon. A. (Ebbw Vale)

Grey, C. F

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

Bing, G. H. C.

Grierson, E.

Morris, P. (Swansea, W.)

Binns, J.

Griffiths, D. (Rother Valley)

Morris, Hopkin (Carmarthen)

Blackburn, A. R.

Griffiths, W. D. (Moss Side)

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

Blenkinsop, A

Guest, Dr. L. Haden

Moyle, A.

Blyton, W. R.

Gunter, R. J.

Murray, J. D.

Boardman, H.

Guy, W. H.

Nally, W.

Bottomley, A. G.

Haire, John E, (Wycombe)

Neal, H. (Claycross)

Bowden, Flg.-Offr. H. W.

Hall, Rt. Hon. Glenvil

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

Bowles, F. G. (Nuneaton)

Hamilton, Lieut.-Col. R.

Nicholls, H. R. (Stratford)

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

Hannan, W (Maryhill)

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

Braddock, T. (Mitcham)

Hardy, E. A.

Oldfield, W. H.

Brook, D. (Halifax)

Harris, H. Wilson

Oliver, G. H.

Brooks, T. J. (Rothwell)

Harrison, J

Orbach, M.

Brown, George (Belper)

Haworth, J.

Palmer, A. M. F.

Brown, T. J. (Ince)

Henderson, Rt. Hn. A. (Kingswinford)

Parker, J.

Brown, W. J. (Rugby)

Henderson, Joseph (Ardwick)

Paton, Mrs. F. (Rushcliffe)

Bruce, Maj. D. W. T.

Herbison, Miss. M.

Paton, J. (Norwich)

Buchanan, Rt. Hon. G

Hobson, C. R.

Pearson, A.

Burke, W. A.

Holman, P

Perrins, W

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

Holmes, H. E. (Hemsworth)

Popplewell, E.

Byers, Frank

House, G.

Porter, E. (Warrington)

Callaghan, James

Hoy, J.

Porter, G. (Leeds)

Carmichael, James

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

Price, M. Philips

Champion, A. J

Hughes, Emrys (S. Ayr)

Pritt, D. N.

Chater, D.

Hughes, Hector (Aberdeen, N.)

Proctor, W. T.

Chetwynd, G. R.

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

Pryde, D. J.

Cluse, W. S.

Hynd, H. (Hackney, C.)

Randall, H. E.

Cocks, F. S.

Hynd, J. B. (Attercliffe)

Ranger, J.

Coldrick, W.

Irvine, A. J. (Liverpool)

Rankin, J.

Collick, P.

Isaacs, Rt. Hon. G. A

Rees-Williams, D. R.

Collindridge, F.

Janner, B.

Reeves, J.

Collins, V. J.

Jeger, G (Winchester)

Reid, T. (Swindon)

Colman, Miss G. M.

Johnston, D. H.

Richards, R.

Comyns, Dr. L.

Jones, D. T. (Hartlepool)

Ridealgh, Mrs. M.

Cook, T. F.

Jones, Elwyn (Plaistow)

Roberts, Goronwy (Caernarvonshire)

Corlett, Dr. J.

Jones, P. Asterley (Hitchin)

Roberts, W. (Cumberland, N.)

Crawley, A.

Keenan, W.

Robertson, J. J. (Berwick)

Daggar, G.

Kenyon, C.

Segal, Dr. S.

Daines, P.

Key, C. W.

Sharp, Granville

Davies, Ernest (Enfield)

Kinley, J.

Shurmer, P

Davies, Harold (Leek)

Lang, G.

Silkin, Rt. Hon. L

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

Lawson, Rt. Hon. J. J.

Silverman, J. (Erdington)

Davies, S. O. (Merthyr)

Lee, F. (Hulme)

Silverman, S. S. (Nelson)

Deer, G.

Leonard, W.

Skeffington-Lodge, T. C.

de Freitas, Geoffrey

Leslie, J. R.

Skinnard, F. W.

Delargy, H. J.

Lever, N. H.

Smith, C. (Colchester)

Smith, Ellis (Stoke)

Dodds, N. N.

Levy, B. W.

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

Driberg, T. E. N.

Lewis, A. W. J. (Upton)

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

Dugdale, J. (W. Bromwich)

Lindsay, K. M. (Comb'd Eng. Univ.)

Sorensen, R. W.

Dumpleton, C. W.

Lipson, D. L.

Sparks, J. A.

Durbin, E. F. M.

Lipton, Lt.-Col. M.

Stamford, W.

Dye, S.

Longden, F.

Stewart, Michael (Fulham, E.)

Ede, Rt. Hon. J. C.

Lyne, A. W.

Summerskill, Dr. Edith

Edelman, M.

McAdam, W.

Swingler, S.

Edwards, John (Blackburn)

McEntee, V. La T.

Sylvester, G. O.

Edwards, N. (Caerphilly)

McGhee, H. G.

Symonds, A. L.

Edwards, W. J. (Whitechapel)

Mack, J. D.

Taylor, R. J. (Morpeth)

Evans, E. (Lowestoft)

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

Taylor, Dr. S. (Barnet)

Thomas, D. E. (Aberdare)

Walkden, E.

Willey, D. G. (Cleveland)

Thomas, Ivor (Keighley)

Walker, G. H.

Williams, J. L. (Kelvingrove)

Thomas, I. O. (Wrekin)

Wallace, G. D. (Chislehurst)

Williams, Rt. Hon. T. (Don Valley)

Thomas, George (Cardiff)

Watson, W. M.

Williams, W. R. (Heston)

Thorneycroft, Harry (Clayton)

Webb, M. (Bradford, C.)

Willis, E.

Thurtle, Ernest

Wells, P. L. (Faversham)

Woodburn, A.

Timmons, J.

Wells, W. T. (Walsall)

Wyalt, W.

Titterington, M. F.

West, D. G.

Yates, V. F.

Tolley, L.

Wheatley, John (Edinburgh, E.)

Younger, Hon. Kenneth

Tomlinson, Rt. Hon. G.

Whiteley, Rt. Hon. W.

Ungoed-Thomas, L.

Wigg, George

TELLERS FOR THE AYES

Vernon, Maj. W. F.

Wilkins, W. A.

Mr. Simmons and

Viant, S. P.

Willey, F. T. (Sunderland)

Mr. Richard Adams.

NOES.

Agnew, Cmdr. P. G.

Hope, Lord J.

Osborne, C.

Baldwin, A. E.

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

Peake, Rt. Hon. O.

Barlow, Sir J.

Jeffreys, General Sir G.

Peto, Brig. C. H. M.

Beamish, Maj. T. V. H.

Jennings, R.

Pickthorn, K.

Birch, Nigel

Joynson-Hicks, Hon. L. W.

Poole, O. B. S. (Oswestry)

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

Keeling, E. H.

Prior-Palmer, Brig. O.

Boyd-Carpenter, J. A.

Kerr, Sir J. Graham

Raikes, H. V.

Bromley-Davenport, Lt.-Col. W.

Lambert, Hon. G.

Reed, Sir S. (Aylesbury)

Buchan-Hepburn, P. G. T.

Lancaster, Col. C. G.

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

Bullock, Capt. M.

Legge-Bourke, Maj. E. A.

Roberts, P. G. (Ecclesall)

Challen, C.

Lennox-Boyd, A. T.

Robertson, Sir D. (Streatham)

Clarke, Col. R. S.

Linstead, H. N.

Sanderson, Sir F.

Clifton-Browne, Lt.-Col. G

Lloyd, Selwyn (Wirral)

Scott, Lord W.

Conant, Maj. R. J. E.

Low, A. R. W.

Snadden, W. M.

Cooper-Key, E. M.

Lucas, Major Sir J.

Spence, H. R.

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

Lucas-Tooth, Sir H.

Stewart, J. Henderson (Fife, E.)

Crosthwaite-Eyre, Col. O. E.

MacAndrew, Col. Sir C.

Strauss, H. G. (English Universities)

Crowder, Capt. John E.

Macdonald, Sir P. (I. of Wight)

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

Cuthbert, W. N.

Mackeson, Brig. H. R.

Teeling, William

De la Bére, R.

Maclay, Hon. J. S.

Thornton-Kemsley, C. N.

Digby, S. W.

MacLeod, J.

Thorp, Brigadier R. A. F.

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

Macpherson, N. (Dumfries)

Touche, G. C.

Drayson, G. B.

Maitland, Comdr. J. W.

Turton, R. H.

Eccles, D. M.

Manningham-Buller, R. E.

Vane, W. M. F.

Eden, Rt. Hon. A.

Marsden, Capt. A.

Wakefield, Sir W. W.

Elliot, Lieut.-Col., Rt. Hon. W

Marshall, D. (Bodmin)

Ward, Hon. G. R.

Fleming, Sqn.-Ldr. E. L.

Marshall, S. H. (Sutton)

Watt, Sir G. S. Harvie

Fraser, H. C. P. (Stone)

Mellor, Sir J.

Wheatley, Colonel M. J. (Dorset, E.)

Galbraith, Cmdr. T. D.

Molson, A. H. E.

Williams, Gerald (Tonbridge)

Glyn, Sir R

Moore, Lt.-Col. Sir T.

Willoughby de Eresby, Lord

Grant, Lady

Morris-Jones, Sir H.

Winterton, Rt. Hon. Earl

Grimston, R. V.

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

York, C.

Hannon, Sir P. (Moseley)

Mott-Radclyffe, C. E.

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

Harvey, Air-Comdre. A. V.

Neven-Spence, Sir B.

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

Noble, Comdr. A. H. P

TELLERS FOR THE NOES:

Herbert, Sir A. P.

Odey, G. W.

Mr. Studholme and

Holmes, Sir J. Stanley (Harwich)

Orr-Ewing, I. L.

Major Ramsay.

ORDERS OF THE DAY

  LOCAL GOVERNMENT BILL
  Order for Third Reading read.
  3.54 p.m.
  The Minister of Health (Mr. Aneurin Bevan): I beg to move, "That the Bill be now read the Third time."
  We reach the last stage in the House of Commons of what has been, on the whole, a fairly amicable passage for a very complicated and important Measure. I should, perhaps, say at the very outset that we were labouring, both in the House itself and in the Committee, under certain difficulties, owing to the fact that, in order to provide the local authorities with the grants in time, and the powers which the Bill proposes to confer upon them, it was necessary to get the Measure through before the precepting date of the local authorities, so that we were, in fact, caught between two fixed dates—the beginning of the Session and the precepting date itself. This meant that the Committee had to work very hard and sit rather more frequently than is ordinarily desirable, and I want, on behalf of myself and the Government, to express my thanks to the Committee for the manner in which hon. Members on all sides cooperated to get the Measure back to the House in time.
  The Bill is an exceedingly important one because it revolutionises the financial relationships between the local authorities and the State. For the first time in the history of local government in this country, the Exchequer now becomes, as it were, a ratepayer. The local authority levies rates, not only upon its own ratepayers, but upon the Exchequer itself to the extent that the rateable value in the local authority's area falls below the average for the country as a whole. In order to show to what extent this is taking place in certain areas, the Exchequer will be a ratepayer in Cardigan to the extent of 66 per cent., and, in the Isle of Ely, to the extent of 55 per cent., and there will be variations of these figures in very many parts of the country.
  That is the first and most revolutionary act that the Bill does. It places poor local authorities in the position of being able to build up their local government services
  1788
  to the same degree as the better-off authorities. It has an additional advantage, because the local authority's revenues can be obtained from the central funds year by year, instead of having a block grant fixed at the beginning of the quinquennial period, which gets out of date very quickly. The present proposals are so resilient that the local authority is able to attract money from the centre just to the extent that it needs it to maintain and build up its own local services. This element of resilience and adaptability is a very important part indeed of effective local government administration.
  Part II of the Bill refers to Scotland, and I will leave that to my right hon. Friend the Secretary of State. Part III is a corollary to Part I, because, if the State is to provide money for local authorities that have less than the average rateable value per head of the country as a whole, it is necessary that valuations should be done in such a fashion as to bring about equality between different local authorities. As the House has already agreed, that could not be left to the rating committee itself; it could not, as it were, be permitted to determine the size of the spoon with which it was going to scoop central cash. Central valuation, therefore —that is, valuation by the Inland Revenue Department itself—is an essential corollary to the provisions of Part I.
  Part IV provides a new system for the valuation of dwellinghouses, and that has been microscopically examined by the Committee and now has met with a general measure of support. I know that hon. Members opposite have the gravest doubts about it, because we know they are in the favourable position of being able to prophesy disaster with impunity. If it does not occur, nobody will remember that they prophesied it, and, if it does occur, it will be taken notice of, because only bad news, apparently, is news at all. As that is the position taken up by all Oppositions, we need not be unduly disturbed by the fact that the present Opposition is living up to standard. It is perfectly true that the valuation of small dwellinghouses is a very difficult and complicated question, from which the previous Government ran away. We do not propose to run away; we propose to face up to the difficulties. We believe that we have found a formula which will enable small dwellinghouses

  1789
  to be valued, and yet maintain equitable conditions as between one ratepayer and another.
  Part V abolishes the rating of transport and electricity; they have always been anomalous. It has always been very difficult to value services like these and then to break them down into their individual parts for each local authority. The reorganisation of those public utility undertakings provides a convenient opportunity for enabling them to make their contribution to rates out of a central pool. I believe that that provision should commend itself to hon. Members in all parts of the House. It is very much tidier and very much more equitable. It will, I know, cause some misgivings in certain places, because the amount of litigation will not be as great as it was; arbitrators and accountants will not be able to make as much revenue as they formerly did, but, nevertheless, probably in the absence of these old quarrels, new quarrels will arise.
  Part VI provides a financial loss allowance, travelling allowances and subsistence allowances for local authority members, following upon the Lindsay Report. This, with proper safeguards, will, in the long run, enormously improve the personnel of local authorities. There are very many good citizens who have been denied an opportunity of serving on local authorities because they have not been able to afford to do so. The Lindsay Committee, of course, made it quite clear—and I think that accords with the general view of the House—that people serving in public positions must be expected to make sacrifices, but those sacrifices should not carry hardship. Certainly they should not be so prohibitive as to deny to large numbers of people an opportunity of serving on local authorities. This will be a great advantage and a step forward, even in urban areas; I believe its effect on rural areas will be even more marked. There are a very large number of people in rural England, Scotland and Wales, who are unable to serve at the present time because they really cannot afford to do so. This will enable people who are now financially inhibited to become politically articulate.
  These are the main provisions. One of the consequences of the new financial provisions will already have been seen, because the ratepayers as a whole will be
  1790
  £19 million better off than was forecast in the White Paper published in November, the reason being, largely, because the rates have gone up. Local authorities have levied higher rates, and, in consequence, have at once been able to attract from the Exchequer more money than appeared in the original estimate. There are also, of course, provisions for transitional payments. Some local authorities are above the line, that is to say, they have a rateable value per head of the population higher than the average. Whenever large changes are being made in the relationship between local authorities and the State, it is always desired by the Government carrying them out to enable all local authorities to have some advantage. There is not the slightest logic in that at all.
  There is no real reason in this scheme why we should have provided for transitional payments, because, obviously, they will be paid to local authorities who fail to be paid them owing to the fact that they are better off than the other authorities. But, whenever we are putting through changes of this sort, it is always desirable that we should leave no one with even a sense of grievance. Therefore, all local authorities gain by no less than 6d. That, of course, will he reduced year by year, so that, in five years' time, it will be extinguished, and, at the end of the period, this scheme will come into operation in all its pristine purity, without a blemish of this sort. The number of authorities that are above the line is rather less than was originally thought, and the number which will ultimately be in this position will only be seven as against the 20 or so originally estimated.
  In the passage of the Bill through Committee and the Report stage, certain important changes were made. I think that hon. Members who were on the Committee will agree that one of the most important of the changes was the third party right of appeal. It was thought at first that the fact that the Inland Revenue officer would now be the valuation officer, would remove any possibility of connivance between him and the ratepaper in any particular locality, and that, therefore, the right of the affected ratepayer to appeal would be sufficient. However, I have taken the view, along with the Committee, that it is desirable that there should be a third party right of appeal, as every

  1791
  ratepayer is interested in every other ratepayer's valuation, because what he has to pay depends entirely on what other persons have to pay. Therefore, there should be a third party right of appeal. This right, of course, will be exercised not only by the individual ratepaper, but by the rating authority, because the rating authority obviously has an interest. This was a very considerable improvement.
  There is a further alteration in the Bill as originally introduced. This is in the case of temporary grants by county councils to county districts affected by the abolition from the local rating rule of electricity and transport undertakings, particularly electricity. There, the contribution will be made for 10 years instead of five, by which time there is a reasonable expectation that the county district will have adjusted itself to the changed circumstances.
  There is also the new Clause which deals with entertainments, a very important provision indeed, of which, I hope, local authorities will be able to take full advantage. I need not say anything more to commend it, because the Debate is very fresh in our minds. It is, perhaps, unfortunate that, for a little while, until our physical resources are expanded, it will not be possible for local authorities to take full advantage of it. Nevertheless, I believe that, here again, when these powers are able to be exercised in their full panoply, the whole character of local government will change. A fresh lot of people—a different sort of person—will become interested in local government. We shall have, not only those concerned with the pure mechanics, but those concerned with the arts, the theatre, music, exhibitions, paintings, sculpture, and a whole variety of activities. Young people in particular, I believe, will throng into the local authorities in order to try to make the utmost use of these powers, and to diversify the traditional culture of this country. What is as important, if not more important, is that these amenities will be provided in areas which have been denied them, because they have been so monolithic in character, having only single industries upon which to depend. With these new powers, and with this new interest, it ought to be possible to build up a much richer life for our people.
  1792
  As I said earlier this is an exceedingly important Measure. I believe that when it is fully understood and in operation, it will be welcomed in all parts of the country. It takes its place with the Municipal Corporations Act, 1835, the Local Government Act, 1888, and the Act of 1929. I believe it is of a stature to rival all these, and I commend it to the House.
  4.11 p.m.
  Lieut.-Colonel Elliot: I think that on this side of the House we would agree with the Minister that this is an exceedingly important Bill and, secondly, that it has been handled, both on the Floor of the House and in Committee, so far as is possible, with a genuine desire to see the great points at issue brought out and to improve the Measure laid before us where possible. I consider that any Measure in this House touching local government, and particularly touching local taxation, is a Measure which the House should scrutinise with the utmost care. After all, local government is the foundation of the whole of our British public life, and local taxation is a subject which is reviewed only at long intervals by this House, although in its incidence it touches individuals and the development of the country in a way quite as intimate as central taxation. I consider that from both these angles it should be scrutinised very closely, and many of us regret the more, as the Minister said, that is was necessary for us to work under a considerable sense of pressure.
  I quite agree that we were caught between the Scylla of the opening of the Session and the Charybdis of the precepting date or, perhaps, I should have reversed those two metaphors, because they are not strictly applicable in classical diction, and I was hauled up for a small classical howler on the Committee stage by no less a person than the "Londoner," who, as we now know from the Leader of the House, is one of the Parliamentary authorities to which he pays very great attention indeed. I think it was unnecessary to bind ourselves in these tight trammels. I think we could, with advantage, have carried over the bringing into operation of this great Measure for another year, while the subject was being more closely examined. A temporary Act could easily have been passed with advantage which would have held the existing position, because at the beginning of our

  1793
  proceedings, and during the passage of the Bill, and now at the end, both outside authorities and we in the House have felt a sense of pressure, and, in addition, I have had an uneasy feeling that we have not even yet fully threshed out the important questions before us. For instance, the Minister has mentioned the valuation of small dwellinghouses, to which I shall return. There are also other aspects of the Measure which I think have not received the consideration which they deserve.
  It is true that the Minister said he was about to act where other Governments have fled, but the Minister—if I may say so, in no offensive spirit—acted on the ancient and "safety first" line that "He who fights and runs away, may live to fight another day," because the dangerous portions of this Measure do not come into operation for years to come. The Minister himself explained that his transitional grants would run for five years and then, he said, his scheme would appear in all its purity. But it is very unlikely that he will still be occupying his present position at the end of that time. [HON. MEMBERS: "Why not?"] I have seen the Minister's vigorous and, indeed rocket-like rise, and it would be very strange if the graph flattened out suddenly at the point where it is now. I would expect it either to continue to rise or to start to fall. Nothing more unlikely could well be imagined than an absolutely pedestrian level for the next five years in the career of the Minister of Health. If I see him still there five years hence I shall be greatly surprised.
  He has done other things. The danger of this valuation, affecting small dwelling-houses, will not be manifest for years to come. He is about to carry out a valuation which, I hope to show in a few minutes, will be of a very far-reaching kind, but nothing will be actually done for a matter of years; in fact, nothing will be done upon it until after the next general election. It was a feature of the 1929 Act that it was also preceded by a Valuation Act, because in those days we did our best to present each separate section of legislation separately to the House of Commons. With great honesty we brought that Measure into operation before the general election and hon. Members who fought that election will remember very well that, at any rate, it did not contribute towards the success of our
  1794
  candidates at the poll. With great strategical skill, the Minister has arranged that the battle which is now being fought will not have its result declared until after the electors have given their verdict, either for or against the Government of which be is so distinguished an ornament and so formidable a buttress.
  The Minister advanced several arguments why the Bill should be given a Third Reading, and I would just examine one or two before coming to the few remarks I shall make on this occasion. After a two days' Second Reading and a long stage in Committee, we come to the closing stages of the Bill, and nothing would surprise me more than for one or other of us to convert his opposite number to his own point of view; either for the Minister to hurry across the Floor of the House and say, "My dear fellow, you were perfectly right, this is a bad Bill and should not reach the Statute Book," or that we on this side should hurry into the Government Lobby saying, "We were all wrong and, really, we think this is a very good Bill indeed." We maintain our position on the Bill and we feel it would be a mistake if the House this afternoon were to place it upon the Statute Book.
  The discussion will no doubt confine itself, to some extent, to arranging as neatly as possible, as clearly as possible and as objectively as possible, the differences between the two sides. About Part I, the grant proposals, he said that the State, for the first time, steps in as a ratepayer, comes in where rateable value falls below the average. The State is not merely carrying out a methodical advance, however, but a sort of quadrille, because although it steps in at one point it steps out at another. There are many local authorities from which it retreats altogether and the block grant given under the 1929 Act, a considerable proportion of which was given as compensation for de-rating, is withdrawn altogether from certain local authorities. It is withdrawn on the means test which the Minister—changed greatly from his views on other occasions—thinks is the ideal way of operating grants to local authorities.
  The richer local authority does not get a grant; the poorer local authority, if it can show a need, does get a grant. This has certain disadvantages. Certainly

  1795
  it has a disadvantage for local authorities previously given a grant in exchange for the derating of many hereditaments within their area, who justly feel they now have a sense of grievance when the grant is withdrawn. Their grievance towards the transitional grant of 6d. of which the Minister spoke is because of the size of the sum, secondly, because of the reasons given by the Minister, and, thirdly, that it will disappear altogether in as short a period as five years.
  The Minister, again with great strategical skill, said he would not discuss the Scottish part of the Bill at all. But it is impossible to leave out the Scottish part entirely because the two countries are bound up together in one Measure. The Scottish part will be discussed by my hon. and gallant Friend the Member for Pollok (Commander Galbraith) later, and I understand that the Secretary of State for Scotland is to close the Debate and will, I hope, be able to deal with the specifically Scottish points. It is interesting, however, to find in a Measure in which the two countries are considered, that many of the arguments which the Minister prays in aid for his part of it have the supports knocked from under them by the existence in the same Measure of the other part of the Bill, the part for Scotland.
  That is so, for instance, about the point which the Minister made as to the necessity for removing valuation altogether from the local authorities. He said, "Now that this new system of distributing the State's support of local finance is to be adopted, we must remove valuation from the local people altogether." Indeed, some of the arguments used, especially during the Committee stage, so far as we on this side of the House can see, would justify the removal of trial by jury from our legal system; because most of the arguments which were brought against local valuation—that it was amateur, that it was liable to variation from one part of the country to another, that it could better be done by some centralised authority—could also be brought against many of our ancient institutions, of which trial by jury is only one.
  What the Minister must grapple with, and what the Secretary of State for Scotland must grapple with, is the question, Is it necessary to destroy in England what it is necessary to retain in Scotland? How
  1796
  is it that the Minister's arguments about local authorities—the local people—doing this valuation, should be so powerful in his mind as to necessitate the sweeping away of the ancient connection of local valuation with local taxation, although that is not necessitated in Scotland? He knows as well as I do that in Scotland valuation is still carried on—and is still to be carried on—by an officer of the local authority, the city assessor. The city assessor, of course, has independent status; but he is not an officer of the Crown: he is an officer of the city paid by the city. I should have thought that the Minister might have been more chary of advancing an argument which, in the same Bill, is to so large an extent disproved.
  I shall come in a moment to the criticisms of Part IV, the rating of the small dwellinghouses, but first I want to say something about Part V. Here again the Minister proved too much. He said that we are sweeping away the rating of electricity and transport undertakings; that there are now to be central contributions paid through a central pool; and that this will be a great advantage. Indeed, he mentioned during the Committee stage the case of, I think, a sewer that passes through several adjoining parishes getting larger and larger as it approaches the sea; and the parishes become more and more parasitic upon this public work until, as it seemed to me, at the end the inhabitants of the last parish derived their whole way of living from their close proximity to the sewer—which seemed to us a somewhat exaggerated picture of life as the Minister has encountered it. But he has testified to experience that is his own and it is not for us to contradict it.
  But the Minister went on to say that he was derating these things and that this would be a great advantage. Yet in this same Session, at the present moment, the Government have a Bill parallel to Acts covering electricity and transport, the Gas Bill. In the case of the gas undertakings—in fact, it is specifically prescribed in the Measure—they are to remain subject to all local rates. Therefore, the principle of homogeneity that the Minister has prayed so much in aid in a "tidying up process"—a phrase repeatedly used in his arguments—does not seem to extend itself to the third of the great trilogy—to use the Ministerial metaphor—the third

  1797
  of the trio of transport, electricity and gas.
  It appeared during the Committee stage that not merely the electricity undertakings themselves could be derated, but shops and showrooms showing, for instance, electrical appliances, and that derated islands of shops would appear in the streets of cities if they were owned by an electricity undertaking. But if a gas undertaking is side by side with an electricity undertaking, if a nationalised gas undertaking shop is cheek by jowl with a nationalised electricity shop displaying appliances for the use of their respective commodities, then the shop displaying electrical appliances will be de-rated, but the shop displaying gas fires and gas cookers will pay—and it is specifically laid down in the Measure—the full rates. Whatever else that is, it is not any attempt to produce uniformity and homogeneity in our local government system or, indeed, in the treatment of nationalised undertakings.
  The difficulties of the House in grappling with this Bill are well seen in the fact that on Report stage a totally new subject was brought in, the question of entertainment. On that, I believe, my hon. Friend the junior Burgess for Oxford University (Sir A. Herbert), if he is fortunate enough to catch your eye, Sir, will have something to say. I shall certainly not trespass on that field. It is understood that the Scots have no connection with entertainment, with humour; that that is far divorced from their mental make-up. Therefore, I shall not attempt to make any comment on it, save to say this: that to take away a great constructive enterprise by which the small man learned and felt his way into the fabric of modern industry as a master and not as an employee, and to substitute the supervision of the proposed entertainment concerns does not seem to be a fair exchange.
  I think the Minister suggested that public life would be flooded with a number of people who would not have been attracted by the previous conditions of local government, but who will be attracted by the new dispensation. The hon. Member for Cheltenham (Mr. Lipson) said he had sat upon an electricity committee and an entertainments committee, and that he greatly preferred the entertainments committee to the electricity
  1798
  committee; but the hon. Member for Cheltenham had many opportunities of contact both with entertainment and with great electrical undertakings. It is not always the case that the small man in the great industrial cities has any such opportunities. I still maintain that one of the bad things that is being done at present is the removal of great opportunities for self-education, self-education in the most vital facts of our modern industrial life; and that these opportunities are being removed from the smaller man inevitably by the operation of the policy which the Government are pursuing of removing these great things from popularly elected local authorities.
  Mr. Lipson: Does the right hon. and gallant Gentleman not agree that this Bill does not take away something but does provide something? It is not this Bill which is taking away electricity. It is putting something else in its place.
  Lieut.-Colonel Elliot: I was dealing with the argument of the Minister, for it was the Minister who made this argument. The hon. Member can discuss that with the Minister later if he wishes. I was dealing with the argument which the Minister was advancing to the House. He was advancing this as a quid pro quo, and, honestly, I do not think that it is a matter of bargaining. Whether it is a good thing or not, it should be discussed on its merits, and I do not think that the removal of these other opportunities is in any way compensated by the introduction of these new proposals—and all the more since, as the Minister himself said, they will not come into force for many a long day to come. The building programme which was envisaged for the erection of new halls must obviously take second place to housing and other developments which are still greatly needed in this country. In fact, during our discussion on Report stage the mirage of the entertainment Clause rather blinded the House to many of the hard realities of the present day.
  The actual proposals before the House will undoubtedly bring new money to the local authorities, although not so much new money as was envisaged by the local authorities, or indeed by the Minister, because the sums which are being brought are diminished by a rising tide of expenditure which, in many cases, has caught

  1799
  them up, or nearly so. I was looking with interest at the newspapers today, and I see that yesterday the Middlesex County Council announced a reduction of 1s. 2d. in the £, Coventry of 1s., and Manchester of 1s. 6d.; when the Hull Council meets next month it is expected to reduce the rate by 2s. 10d. in the £; the Sheffield City Treasurer was not so fortunate, for he, under the headline "Rates are being cut" was merely able to announce that by running very hard they would be able to remain in the same place, because he reported no change in the rate, and said:
  "The Government equalisation grant has allowed us to keep the rate at the present level. Otherwise it would have been increased, for we have to find £110,000 for snow clearance expenditure last year."
  Mr. Bevan: It still remains the fact that the average gain is 3s. 4d. in the £.
  Lieut.-Colonel Elliot: The Minister ought to put these points more clearly before his public relations officer to have them published in the "Daily Herald," because it is from the "Daily Herald" that I am quoting. The remarkable fact that in Sheffield this largesse has been able to pay only for last year's snowfall ought to be brought out. Doubtless, the Minister will be acquainted with the ballad of the French poet, which seems to have its bearing here:
  Oú sont les neiges d'antan.
  As far as Sheffield is concerned, that seems to be the value which they are receiving.
  Mr. Bevan: It is necessary to get the facts right here. I am sure the right hon. and gallant Member would be most anxious that nothing but the truth should be known in this matter. The real comparison is with what the rate would have been on local authority expenditure if these helps had not been given. The rates would have been 19s. 1d. in the £; now they will be 15s. 9d.; the average gain is 3s. 4d. Therefore, the real test is: What would the rate have been if this help were not forthcoming?
  Lieut.-Colonel Elliot: I am most anxious that nothing but the truth should come out. That is why I ventured to criticise, at a little length, that paragraph in the "Daily Herald." Without a certain amount of assaying and refinement the fact does not always appear at first sight, especially when under the
  1800
  heading, "Rates are being cut." In Sheffield we find that the rate has remained exactly the same. True, other advantages are to be found. I see that in Wales the Parliamentary Secretary to the Ministry of Education has been eloquent about the great advantages which would come from this Bill in regard to the education grant. He wound up with the resounding and eloquent peroration:
  "Nearly 40 years ago Mr. Lloyd George, then Chancellor of the Exchequer, once charmed the electorate with the offer of 9d. for 4d. Through the operation of the equalisation grants the Minister of Health is now improving on this with an offer of £8 million for £2 million—or 8d. for 2d."
  Again, I think these views are somewhat clumsily and flat-footedly put forward. I look to the Minister to explain these matters with a little more grace, even if with a little more forcefulness against hon. Members on this side of the House.
  The most doubtful feature, and to our mind still the major feature, of this Bill—the long-distance feature—is the proposal for the revaluation of the small dwelling house. I do not yet feel that that has been at all satisfactorily explained, and there are still undoubtedly snares about for the future, which are all the more dangerous because they will not become manifest for some years. On Second Reading the Minister explained that he would be able to deal with these matters during Committee, and we left it over till then. But when the Committee stage arrived it appeared that the Minister's pledge would be very difficult of fulfilment. On 18th November the Minister pledged himself thus:
  "I am prepared to consider this, and to explain it in much more detail when we come to the Committee stage."—[OFFICIAL REPORT, 18th November, 1947; Vol. 444, c. 1002.]
  But when we came to the Committee stage the Minister pointed out that he could not give specific instances against those specific instances which we on this side were prepared to quote, because, he said, it would amount to his valuing a piece of property, which would be constitutionally inadvisable, and impossible in practice. We suggested at the time that some round-table conference, some confidential discussions, might take place at which either side could table the figures which they had to show. However, the Minister was not able to see his way to allow that to take place.

  1801
  I still say that, in our view of all these matters, the small cottage property will, first of all, be valued under many and diverse headings—and this in the name of uniformity. It will be valued under several separate headings: the pre-1918 house property; the post-1918 house property; the 1938 cost of construction plus the 1938 cost of site; and the 1938 cost of construction minus the current cost of site. It remains a fact that, for one of the fundamental sets of figures upon which a man has to work, the value of his house, there will be widely differing approaches, according to whether the house was built before or after 1918, and the particular circumstances under which the Minister approaches it. That is quite apart from the fact that there will be another set of figures for Scotland. Our figures seem to show that very sharp graduations, and steep rises will take place as a consequence.
  Again, the Minister said both in Committee and with more particularity on Second Reading, that our fears were fallacious. He said that matters would not work out like that. That may be, but our figures seem to show that a small pre-1918 house, with a gross value of £32, is likely to go up to a gross value of £50, which is an increase of 56 per cent. As for a small post-1918 house, valued under another system altogether, it is likely to go up from £32 to £40, which is an increase of 25 per cent. The average, so far as we can make out, for all the post-1918 houses is likely to be a 23 per cent. increase, and for the pre-1918 houses 38 per cent. The Minister says that if they all go up, then none go up, because everything is revalued, and it simply means the same sum is to be extracted under a different set of arithmetical scales. That is not so, because houses are not the only rateable—
  Mr. Bevan: The right hon. and gallant Gentleman on Third Reading ought not to recapitulate in such a fashion as to make interventions necessary all the time. I always qualified it by saying that special properties would be under a disadvantage. The right hon. and gallant Gentleman will see that there is always that qualification.
  Lieut.-Colonel Elliot: It is far from being my intention to misquote the right hon. Gentleman. There is naturally a saving for particular properties, but his
  1802
  contention was that for the great bulk of properties it would, in general, be as broad as it is long, and that if the value was higher, the rate would be less. That seems to us to neglect the fact that there are two sets of house properties, namely, the pre-1918 and post-1918 houses, and, secondly, that there are all the other rated properties. This part of the Bill is really a proposal for the re-rating of cottage properties, and in so far as these properties are re-rated, other properties are de-rated. Furthermore, in so far as they are re-rated differentially, we find that a greater burden is cast on one or another block of properties. If the pre-1918 houses are to average a rise of nearly 40 per cent., and the post-1918 houses 23 per cent., then there is a differential within these two categories.
  That fully justifies our criticism on Second Reading, which we repeat, namely, that two citizens, living side by side in two comparable houses, will have different rate burdens placed upon them merely according to the date of construction of their dwellings. I do not wish to continue to quote these examples. The Minister has contended that these examples are fallacious, that we are bringing bogies to the Bar of the House, and the more instances we bring forward, the more he cries "Bogy, bogy"—I hope I have not misrepresented him there, because I think, those were the identical words he used. I do not think that it is so.
  It is on this fundamental point, which will be developed by other hon. Members, that we find it necessary to divide against the Third Reading of this Bill. The Minister has laid a delayed-action mine here, which will not go up for some years. We say that it will go up, and go up in the case of the great proportion of dwellinghouses in the country, and that people have no idea what is being prepared for them. We say that there will be a widespread uneasiness and a degree of indignation when this mine finally does go up. We do not hope to do more on this occasion than set forth our grounds of quarrel with the Bill.
  We feel it is more important than with other Measures again to deploy the arguments on Third Reading, because the House has never really had a full view of these proposals, and more particularly it has never had a full view of the proposals

  1803
  for re-rating small dwellinghouses. In addition to discharging our duty in this House, we hope that we shall be discharging a useful function for the country in setting forth the grounds on which we disapprove the addition of this Measure to the Statute Book, and for dividing against it on Third Reading.
  4.46 p.m.
  Mr. W. R. Williams: Unlike the Minister and the right hon. and gallant Member for the Scottish Universities (Lieut.-Colonel Elliot), I make no pretence to have any expert knowledge of assessments and rating valuations. Like most Members, I have taken considerable interest in this matter over a number of years. I have taken the opportunity to discuss with experts in the County of Middlesex, and in my local authority at Heston and Isle-worth, and find out what are their views about this Bill. They assure me that this Bill will long remain as a constructive social Measure of which the right hon. Gentleman may be very proud in the years to come. When I think of the important pieces of legislation of a social character which have been introduced by famous compatriots of mine, from Mr. Lloyd-George, as he then was, to the Minister of National Insurance, and not least my right hon. Friend the Minister of Health, I seriously wonder what will happen to this old country of England if, at any time, Wales decides to set up a separate Government.
  I am glad to be able to inform the House that, from the point of view of those expert men and women who have spent the best part of their lives in considering this great reform, this Bill is a worthy effort on the part of the Government and the Minister. They all think that the Minister has grappled with this very complex problem with great courage and great knowledge. In the view of these people and of myself, these problems should have been tackled a long time ago. It would have been easier to have tackled them in the years between the wars, when there would not have been the difficulties which are associated with postwar reconstruction. I cannot help feeling rather sorry that the right hon. and gallant Gentleman who complained about the pressure brought to bear upon him during the Committee stage did not, with the
  1804
  Government in which he was so distinguished a member, tackle the problem when there would have been more time to bring about the reforms we so urgently need.
  I wish to draw the attention of the Minister to two points in respect of which the Bill might be amended when it goes to another place. My first point is in regard to the operative date which the Minister is empowered to prescribe in accordance with Clause 68. Subsection (1) of Clause 33 states:
  "(a) assessment committees, county valuation committees and the central valuation committee shall cease to exist; and (b) save as hereafter provided … rating authorities shall have no functions in relation to the preparation and amendment of valuation lists."
  The suggestion I want to put to my right hon. Friend is that he should consider making that date as late as possible, until the new valuation lists are nearly completed. I ask him to do that because it is the view of those who are advising and guiding me on this Bill that anomalies may arise during the transitional period because new valuation officers will, of necessity, have to deal with some of the points and assessments which have already been agreed by assessment committees.
  It is regrettable in some respects, but this transitional period is unavoidable. I appreciate that from the point of view of the Minister it is very necessary, but what we are afraid of is that unfairness may creep in as between the two valuations—that by the assessment committees of the local authorities as they are now constituted, and that made by the new valuation officers. I believe that the Minister has made a courageous attempt to solve some of the difficulties which will arise during the transitional period in relation to the new valuation lists which will be operated in 1952, but many of us feel that as, during the four-year period, the basis of valuation will be that laid down under the 1925 Act—that is, rental value—we would like the new valuation officers to have some contact and consultation with local authorities and their assessment committees so that the number of anomalies can be reduced, and any suggestions of unfairness to ratepayers can be avoided.
  One of the dangers which I and others see is that it may be the aim of the valuation officer to secure legal correctness

  1805
  rather than what we all desire during the valuation period—a broad sense of common fairness. I therefore ask my right hon. Friend to see that the operative date is brought as near as possible to the date when the new valuation lists have been completed. At the moment, the valuation officers working for assessment committees will have to continue to keep their present lists up to date. I feel sure the Minister will agree that it would be regrettable if, by premature abolition of assessment committees, the present level of assessment became distorted, or any unfairness accrued as between respective ratepayers simply because the new valuation officers must almost of necessity have to have regard to legal correctness.
  My second point concerns the right of appeal under Clause 39. We are all glad to see that the principle of appeal is maintained. The Clause provides for the right of appeal against the decision of the local valuation court. In my experience, appeals of any description always entail some expense for the appellants or the respondents. As I understand the existing law, assessment committees have, of necessity, and almost automatically become respondents to appeals made against their decisions. So far as I know, appeals have been properly heard; counsel have been allowed to appear on behalf of the parties and expert witnesses have been called on either side. In most cases the expenses have been borne by the assessment committee. I may be wrong, but as I read the Bill this will not apply from the date of its operation. Ostensibly, the reason is that the new body will be a judicial rather than an administrative body. Under the Bill, if a ratepayer obtains a reduction in his assessment, and the valuation officer desires to appeal to the county court against that reduction, the ratepayer must become the defendant in the action and, therefore, be responsible for the costs of the action, if any.
  From that two things flow. First, very severe hardship and an almost impossible burden may be placed on the small ratepayer if he has to face the question of legal costs in an appeal of this kind. Second, even if the ratepayer is able to stand up to the legal costs, he will think several times before appealing because of the element of cost. There
  1806
  is no one in the House who desires more than my right hon. Friend to ensure that any Bill with which he is connected should impose no unnecessary burden on the people of this country, especially the poorer elements. If the argument is that there will be a new valuation body, which is judicial rather than quasi-judicial, which cannot act in the way I am suggesting it should do, I would like the Ministry to consider this point: in the case of appeals to quarter sessions against the decision of licensing justices, the justices are, as a matter of course, normally regarded as respondents in the action, and in a position to defend their own decision, accepting the legal charges and costs that may flow from the action. If that is so in this case, the licensing justices being a judicial body, I would ask why the same procedure cannot apply under this Bill?
  Whatever may be the legal position, I believe that ordinary people will not readily appreciate the fine distinction between administrative and judicial bodies. They may take the same view as many of us have taken, which is that an administrative body is one that applies the law in a sensible way, while a judicial body is one that applies the law. Whatever may be the virtue of that attitude I hope that the Minister will be able to give some slight attention and if possible sympathetic consideration to the two points that I have enumerated. I feel sure that the Bill will go down in the history of the House as one of our finest achievements in putting local government upon a sound, sensible and workmanlike basis.
  5.1 p.m.
  Sir Alan Herbert: I understand so little of this Bill that I hope that hon. and right hon. Gentlemen who have spoken will forgive me if I do not take up and follow the arguments they have used. Perhaps I should apologise for intervening at this late stage in a discussion upon a Bill upon which hon. Members have expended so much toil and time, but I want to draw special attention to Clause 131, which also came in rather late in the day.
  Firstly, may I, in the most helpful and friendly way, raise what I believe to be a point of drafting? I am seriously afraid that the Bill goes much farther than the

  1807
  Minister means it to do. At the bottom of page 91 of the Bill are these words:
  "entertainment of any nature."
  Hon. Members on this side of the House have already questioned the width of those words, and in Committee they put down Amendments, which were not accepted. But under those words, local authorities, it seems to me, will be able to conduct boxing matches, football matches, racehorse and greyhound racing, and other forms of entertainment which attract Entertainment Tax. "Entertainment" is defined in the Finance (New Duties) Act, 1916, as including
  "any exhibition, performance, amusement, game or sport to which persons are admitted for payment."
  I do not think it is in the mind of the Minister that local authorities should undertake such activities. In the hope that we might make a verbal Amendment on the Third Reading I have shyly put on the Order Paper an Amendment to insert the word "artistic" before the word "entertainment." That might meet the Minister's point of view, particularly as "artistic" is a word very well understood indeed by everyone—indeed, just now he himself very clearly enumerated the "arts"—
  Mr. Deputy - Speaker (Sir Robert Young): The Amendment to which the hon. Member has referred was out of Order. He therefore cannot discuss it now.
  Sir A. Herbert: I was not proposing to do so at all. All I was trying to say was that it might be better if we could correct the Bill—assuming that my point of view is right—rather than have an Amendment when the Bill goes to another place. I hope that the Minister will consult the Law Officers on the point I have raised before the Bill reaches its final stages.
  About Clause 131, I agree very largely with my fellow dramatist the hon. Member for Ashford (Mr. E. P. Smith). For those who have been trying for 20 or 30 years to entertain the people publicly, this is a somewhat terrific occasion. After centuries of social and religious taboos, oppressive legislation and penal taxation, at last the rogues and vagabonds, the clowns, columbines and harlequins are declared to be respectable—nay, more
  1808
  than respectable, valuable—so valuable that a Minister of the Crown is asking Parliament to enjoin the local authorities of the land to spread the works and the wares of those entertainers among the citizens, so far as they can. That is a very big change indeed, and I congratulate the Minister upon the spirit of his proposals.
  But I was a little alarmed and bewildered when I read some of the expressions used by supporters of the Bill, though not used by the Minister, who has been extremely moderate. I believe that there is room for both public and private enterprise and I should like to see them going hand in. hand, on parallel courses; but that is not the spirit in which these proposals have been commended by some hon. Members on the Government side of the House. Even the Parliamentary Secretary, who made a very graceful, agreeable and on the whole moderate speech, said a few things which made me raise my eyebrows. He said, for instance:
  "Private enterprise in this field of public entertainment, whether lowbrow or highbrow entertainment, has only partly met the public need. It is clear that private enterprise alone is either unable, or unwilling, to deal with the expanding cultural needs of our people"
  It is unfair to say that sort of thing without adding that the State lays a penal tax of 29 per cent. upon the receipts of those unfortunate people. Another hon. Member—I will not mention her name, for she is not here—made an even more astonishing remark. She said:
  "We do not want to see this entertainment provided by private enterprise and vested interests, which will make huge profits out of it."—[OFFICIAL REPORT, 19th February, 1948; Vol. 447, c. 1347 and 1379.]
  The implication of that comment is that public entertaining is an easy thing to do and that it is only a question of not making a profit. The only question that really matters to me is, "Is it good?" Some people, I know, like the hon. Member, have the idea of driving private enterprise out of the entertainment business altogether; but I hope there are not many of them who want to do that and that that is not the spirit in which the Bill will be administered.
  Let me try to analyse and define what this House is trying to do. We have heard a lot of rather vague, idealistic thought, but some of us are uncertain about what

  1809
  the Clause proposes to do. There are two areas of action in which this Clause might be applied. The first is in places where no entertainment is being provided at present. I absolutely agree that if it is not being provided, and can be provided at all, we ought not to care who does it. A great deal of nonsense was talked on this matter. The hon. Lady to whom I have just referred committed herself to this remark:
  "The Clause will enable people in sparsely populated areas—where the nearest theatre is perhaps 10 miles away—to taste joys of drama and music which have hitherto been denied to them."—[OFFICIAL REPORT, 19th February, 1948; Vol. 447, c. 1377.]
  I do not know what in the world that means, unless it is that Covent Garden, Drury Lane, and the Lyceum Theatre are to be carried about in plain vans across the moors of Yorkshire and Devonshire. Much as I love the theatre, I say, "thank God that in this over-populated island there are still places which are 10 miles from a theatre—yes, and 10 miles from a town hall, too." There are town halls which are 50 miles from a fox, but nobody would propose that the metropolitan boroughs should organise a civic fox hunt. Let us not exaggerate about these matters.
  In a less exaggerated form I agree with the suggestion that in small towns which have a cinema, or two perhaps, but no theatre, I should like to see, as a result of the Bill, a theatre brought into existence. But let us realise why there are no theatres in those places now. Private enterprise, with all its faults, goes where the going is good, or as hon. Members who support the Government would say, where the profit is. The simple reason why there are not theatres in the kind of towns which I have in mind is because, alas, there has not been a sufficient demand for the theatre. Most of the people, unlike myself and I think the Minister, still prefer the cinema to the theatre, partly because they have not had the opportunity to appreciate the theatre, although I think the position is improving. The reason why there is no theatre in the towns which I have in mind is because it has not paid and could not pay. The corollary to that is that the municipal enterprises will very often make a loss. Let us face it. I should not mind playing at a loss, so long as it was reasonable, for what would be of great educative benefit, but do not let us go so far as some hon. Members opposite go,
  1810
  and say that we shall not lose anything at all.
  So far, I am all with the Minister. Now let us take an area where private enterprise is providing entertainment to the satisfaction of most of the people. Private enterprise, after all, for 300 years, from Shakespeare to Shaw, has been providing entertainment of a fairly high quality. Take a city like Manchester, which has two or three theatres. I have had the honour of being performed there four or five times. Architecturally, no doubt, there is room for a fine new municipal theatre in Manchester.
  Let us suppose that when things are easier, the city council will build a new theatre. It is unlikely that they will find that the borough surveyor, all his life, without anybody knowing it, has been a first-class theatrical producer or stage manager. It is unlikely—although it may happen—that the police will find that they have been wasting their time and that they should have been in a corps de ballet. What will happen is that they will go to the Opera House or to the Palace Theatre and say to the manager, "Look here, old boy, we know nothing about this. You come over and help us. We can give you a lot more money than those wretched private enterprise people are giving you. We do not really care how much we lose. We have got the rates behind us. We pay no Income Tax, and we shall pay no Entertainments Tax. Therefore, we can offer you a much bigger salary." The same sort of thing will be said to the stage carpenter, the electrician, and perhaps the conductor of the orchestra, and so on.
  Up to a point it may be said that that is a very good thing for the profession. I agree, although it must be remembered that the resources and what is called the "personnel" of the theatrical profession are not unlimited, and we might be robbing Peter to pay Paul. However, let us assume that those difficulties are surmounted. We shall then have this extraordinary position. There may be two theatres wishing to put on plays of the same standard; indeed, it may be the same play. If taxation is continued at its present level, one of the theatres will pay to the State 29 per cent. of its receipts in Entertainments Tax, plus Income Tax and Profits Tax, while the municipal theatre will pay no rates and

  1811
  no Entertainments Tax, and they will not care if they lose, because they will have the rates behind them. When the hon. Member for Cheltenham (Mr. Lipson) says that it is not for Opposition Members to jib against competition, I agree, but it is the right of every man and it is the nature of every man to jib against unfair competition which will damage his industry.
  I do not wish to weary the House, but I must relate for the purpose of the record that I was somewhat surprised when I heard the hon. Member for Ashford list among the people who were in favour of this proposal what he called the "commercial" production managers. I prefer to call them professional production managers, because "commercial" is a word of prejudice. We do not talk about commercial publishers, or commercial newspapers, or commercial films, although they all have to pay their bills and make both ends meet. Curiously enough, in spite of the undoubted reforms which His Majesty's Government have introduced, so far as I know there has not been any amendment to the laws of bankruptcy. Therefore, it is very unfair to throw such epithets as "commercial" at anybody merely because he is trying to pay his bills. I was surprised to hear the hon. Member say that the commercial production managers were also warmly in favour of this proposal, because, so far as I know, he has no more authority to speak for managers than I have. He is no more a manager than I am, and he has no more interest in management than I have.
  I have received a communication from the Theatres National Committee, which comprises several bodies; they are the Society of West End Theatre Managers, the Theatrical Managers' Association, the Entertainments Protection Association, the Provincial Entertainment Proprietors' and Managers' Association, the Scottish Theatrical Managers' Association, the Association of Circus Proprietors and the Association of Touring and Producing Managers. I do not know what half of them mean, but they are not all "bricks and mortar" men; they comprise the producers and everything. I do not know whether they are right or wrong, but, as a matter of record and of justice, I must tell the House what they say. They say:
  1812
  "This Committee takes strong exception to the new Clause tabled by the Minister of Health with regard to the above matter."
  I shall not read the whole letter. But they go on to say:
  "The theatre managers do not wish to adopt a dog-in-the-manger policy or to discourage the provision of opportunity for theatrical entertainment in places where it is not adequately provided at the present time"—
  That is the point I have made, and there I am absolutely with the writer of this letter—
  "but they feel that in a matter of this kind considerable care is needed if irreparable damage is not to be done to the best interests of the British theatre in the long run."
  In other words, we shall not substantially increase the intellectual resources of this country if we drive out Mr. Cochran and substitute the mayor and corporation of Wigan or Swindon.
  Mr. Bevan: May I put a point to the hon. Member who is making a most interesting speech? Suppose that in a certain place there is a sufficiency of cinemas, but no theatre; would the hon. Gentleman say that the local authority should be prevented from building a theatre and using it also as a cinema? In that case the local authority would have to carry what undoubtedly would be a loss on the theatre and would deny itself any of the revenues from the cinema. If they constructed a building which could be both a theatre and a cinema, for certain weeks they could run it as a cinema and for other weeks they could run it as a theatre, and avoid a loss, but in that case they would be providing a cinema where there would be a sufficiency of cinema entertainment in the area.
  Sir A. Herbert: So far as I follow the right hon. Gentleman, I do not think I should be against that proposition. I am prejudiced in favour of the theatre and I want to see more theatres. What I am saying is that these powers should not be used too automatically. Where there are theatres already in existence and where it seems that the public demand is adequately supplied, there should be consideration and consultation. The managers make suggestions which it would be out of Order, perhaps, for me to mention, but no doubt the right hon. Gentleman is aware of them. I am sure the theatrical managers are not afraid of fair competition. Perhaps the real

  1813
  remedy is for the right hon. Gentleman to say to the Chancellor of the Exchequer, "Let us have no more nonsense about the Entertainments Tax. Take it off and let us have a fair field for everybody." That would go a long way towards satisfying everyone.
  Subject to that, I add my humble blessing to this Clause. In many ways, it is a great feather in the cap of the mummers, the long-haired authors, the painted ladies and so on. It is good to know that our works and our wares are appreciated so much. I am glad that so much emphasis has been laid on the theatre, my enthusiasm for which, I believe, is shared by the Minister. I do not care how far the synthetic glories of the radio and the films are developed. They may go on until we have a television set in every bathroom and we can smell the perfume of the beautiful blonde upon the screen, but I swear that even then there will never be such a thrill as the sound of a great orchestra tuning up in the sight of the citizens before a great concert, or, better still perhaps, the lights going down in the theatre as the band begins before the lowered curtain, and there sit the people, socially gathered together—it is the most sociable and civilised of all public entertainment—to hear the speech of living actors in all the plays of the world, while behind in the long corridors is heard that ancient, historic and exciting cry, "Curtain up!" If the right hon. Gentleman can indeed find means of communicating that thrill to thousands of citizens who have never known it, I think that his name may be a thousand times blessed.
  5.20 p.m.
  Mr. Asterley Jones: I trust that the hon. Member for Oxford University (Sir A. Herbert) will forgive me if I (10 not follow him in his research into this Clause. I must confess that at times during his speech I was doubtful whether he was for us or against us. I was glad to note from its closing stages that he is a notable convert to the principles of municipal trading generally, if he will forgive the use of the word "trading," and that he will accompany us into the Division Lobby tonight in support of the Bill.
  I was disappointed that the right hon. and gallant Member for the Scottish Universities (Lieut.-Colonel Elliot) again
  1814
  brought forward the argument, which has been used on a number of occasions during the discussion of this Bill, that the Minister is somehow taking away from local authorities the general Exchequer contribution which was given to them in 1929 in order to compensate them for the loss incurred by derating. It is true that in 1929 local authorities as a whole incurred losses by derating. It is also true that in 1929 a part of the general Exchequer contribution established by the 1929 Act was to compensate local authorities as a whole for losses incurred by derating.
  What the 1929 Act did not do was to apportion that grant in order to compensate individual authorities for their losses. What is even more important is that it did not make provision for prospective losses caused by derating taking place in the intervening period since 1929. While I do not believe that the Bill goes all the way towards curing that, it goes some of the way, because these authorities, which at the moment may regard themselves as losers owing to the operation of derating will receive equalisation grants. Clearly, one of the elements that will make an authority entitled to an equilisation grant is the fact that its rateable value is depressed to some extent by the presence in its area of industrial hereditaments which are derated.
  As other hon. Members have said, the Bill as a whole is worthy of a Third Reading. I draw attention to one blemish. I do not say that there are not others, because it is the easiest thing in the world to find blemishes in any Bill. There is, however, one blemish which stands out. The Minister has said that it is necessary to find some new method of valuation of small dwellinghouses. I think we all agree with that statement. It does not very much matter what method we use to value dwelling houses or hereditaments generally, provided it is a uniform method and applies equitably over the whole field. The real point is to have a proper standard of valuation, and, starting from that standard, to apply it over the whole field of properties which have to be valued.
  It is suggested by many persons that we should retain the system of valuing by reference to the hypothetical tenant. As the Minister has said the hypothetical tenant is a somewhat elusive person. The Minister has been criticised for putting in the Bill a provision whereby these small

  1815
  dwellinghouses, instead of being valued by reference to the hypothetical tenant, are to be valued by reference to the hypothetical builder. I believe that is an improvement. Whereas, the hypothetical tenant is an elusive person, the hypothetical builder is not quite so elusive, because it is possible by tracing back records of not very long ago to find something definite which will enable the valuers under the Bill to arrive at a reasonable conclusion.
  Not only does the hypothetical 1938 cost of construction enter into the valuation of these small dwellinghouses, but the site also has to be taken into consideration, and here, I believe, the Minister has made a very great mistake. I repeat that I do not believe that it is necessary to have a perfect method of valuation, so long as it is a uniform method; but the Minister has contrived to draw a distinction between two different types of houses which should be valued in precisely the same way. He says that the local authority dwellinghouse shall be valued according to the hypothetical 1938 cost of construction—we do not quarrel with that—and also by reference to the hypothetical 1938 cost of the site. When it comes to non-local authority dwelling houses, he says that they shall be valued by reference to the hypothetical 1938 cost of construction—we do not quarrel with that—but that they shall also be valued by reference to the present-day value of the site. The Minister argues that he cannot value the owner-occupied house by reference to the hypothetical 1938 value of the site because of the difficulty of finding any accurate information as to what was the hypothetical 1938 value of the site.
  I have no doubt that he is right. I can see his point that it is impossible to value the site of an owner-occupied house by reference to the 1938 value, but what is to stop him valuing local authority sites by reference to their present value? He would thereby bring the local authority house into line with the owner-occupied house instead of bringing the owner-occupier into line with the local authority so far as site valuation is concerned. So far as I can see, there is nothing to stop that being done. If it is possible to use the present site valuation for the owner-occupied house, it must be possible to use the present site valuation for the council
  1816
  house. I suggest to him that he would find it much easier than it would otherwise be to value the site of a council house on that basis.
  The Bill contains a number of provisions which the Minister must take into account when finding out what was the hypothetical 1938 site cost. Clause 77 introduces a number of provisions all of which will, in my view, be very difficult to apply. If it were the case that all local authority sites were actually purchased in 1938, there would be no difficulty, but they were not. Many local authority sites were purchased at all times between 1919 and 1939. Therefore, the Minister will be in precisely the same difficulty as with the owner-occupied house in trying to find out how the value has changed between the date when the site was purchased and the relevant date in 1938.
  In other words, in valuing the site of the local authority dwelling house as it was in 1938 he will be adding to his difficulty. In valuing the house, he will have to find the hypothetical builder. In valuing the site of the house, he will have to find the hypothetical speculator. In place of the hypothetical tenant, whom we are now abolishing, though not entirely to the outer darkness, because he still lingers around this Bill, the Minister is introducing the hypothetical builder and the hypothetical speculator. Therefore, on purely practical grounds I suggest that the Minister would do well to secure that, in another place, an Amendment is introduced into the Bill to put the valuation of the sites of council houses on a par with the valuation of the sites of owner-occupied houses.
  In his speech the Minister said that his object was to leave no one with a sense of grievance. I am sure that he intends that. However, the Bill as it stands, if carried into law, will leave a large number of people with a sense of grievance, because the owner-occupier is bound, not unnaturally, to say, "I am being treated in some ways differently from the tenant of a council house." When there is such an easy way for the Minister to deal at one and the same time with the practical difficulties of valuation and the sense of grievance which exists in the minds of owner-occupiers, I suggest he should make use of it, and I hope that he will not hesitate to introduce in another place the necessary simple Amendment to achieve that end.
  5.33 p.m.
  Mr. Sidney Marshall: This would have been a great Bill if the Minister had not been so much obsessed with the idea of getting it through during the lifetime of the present Government, and because of that, missing out of the Bill a great deal which should have been in it. There will not be gratification among local authorities in this country, who have for several years past been at great pains to improve the standard of assessment throughout their areas, and have now produced a very high and level standard of assessment. Those backward authorities who took no such steps will, of course, be very gratified at the benefits they are now to receive under this new system of Exchequer grants.
  This means, of course, that the well-managed and well-run counties will now lose any possible benefits which should come to them in some grants from the Exchequer, for they will lose their grants as a result of these contributions to more backward authorities, who will receive larger grants. Consequently, the Bill will not be received with the gratification which the Minister expects. I hope the right hon. Gentleman will listen sympathetically to the point made by the hon. Member for Heston and Isleworth (Mr. W. R. Williams) with regard to the appeal. My colleagues on this side of the House wish the Minister to give some attention to it because the hardship, which may conceivably fall upon the ratepayer in making the appeal through having to pay the expenses, might be very considerable. He should be relieved from any such contingency.
  The Clause in the Bill which seeks to simplify and make more equitable the rating and valuation of smaller houses will in many cases act very harshly on occupiers. Years ago when I was on a local authority the only method of assessment we had was to go round and look at the property. We would estimate fairly well what it contained. We knew how many rooms were in it and what amenities it had. We recognised the site on which it was and we realised, of course, the real rateable value as between ratepayer and ratepayer and between house and house. In a rough and ready fashion we always arrived at a fairly accurate estimate. I cannot think that the Minister under the
  1818
  complicated formula which he is introducing will achieve anything near so accurate an assessment as we did under that rough and ready rule of thumb. I feel sure that the occupiers of these smaller dwellings will not benefit in any measure by the system which he is adopting.
  The only other Clause with which I want to deal is 131, with which I dealt on the Recommittal stage. I do not want to reiterate any arguments I used then, but the Minister himself has introduced an entirely new argument today in justifying this Clause. He said that we are now to have in local government an entirely new set of people. No longer are we to have people interested purely in the mechanics of local government, but what connection the theatre, public entertainments and suchlike things may have with producing a new set of local government people I fail to see. I am quite sure the Minister does not suggest for one moment that the people who have borne the burden and heat of the clay for many years are unenlightened and, because of that, backward and living in a darkness, and that he will bring light and understanding now to these local government people by providing them with entertainment which can be subsidised out of the rates.
  The junior Burgess for Oxford University (Sir A. Herbert) threw rather a new light on that aspect of the question as did the hon. Member for Ashford (Mr. E. P. Smith). The hon. Member for Ashford desired this Clause, mainly because he thought it was a new subsidy to be given to dramatists; therefore, the producers of one-act plays and suchlike people, who have hitherto been unable to get their plays produced anywhere by any of the so-called commercial concerns, will now have a hope, because they will be able to palm these plays off on any local authority who will produce them out of the rates they will be able to levy. The junior Burgess for Oxford University remarked that he did not think that was a reason why he could commend this Clause; but he rather argued from the point of view of the professional producer, who naturally does not want to see competition from municipal subsidised efforts in the entertainment world. I sympathise with him there and I think he is quite right.

  1819
  On the other hand, I could not quite follow him when he said that he rather rejoiced that the "mammas" and painted ladies were now to receive recognition out of the rates. I am still adamant in regard to my opposition to Clause 131. There are many blemishes in the Bill, and why on earth the Minister should go out of his way to introduce into a local government Measure opportunities for local authorities to spend rates upon such things as entertainment, I utterly fail to see. It cannot be said that because of the opportunities they will have to study the drama or to go to more cinemas or to take other interest in entertainments, they will become better local government members. I cannot see where any benefit will come to the sparsely populated areas by getting more entertainment because the rural or district council can now provide cinema entertainment in such areas. I do not think those people have suffered in the past because they have not been able to go to the cinema. I am sure that their minds are no more backward and no more unenlightened than those of people in the urban areas who have cinemas at their back doors. In many instances, they are probably better off because they have not been contaminated by many of the pictures now presented in cinemas.
  Therefore, I believe that in making provision for local authorities to spend up to a 6d. rate on these rather questionable forms of entertainment, the Minister is doing no service to the people of this country. This Clause will go through today, but I hope it will be many years before it is implemented. It is quite possible that, as in the case of one or two other Clauses, opportunities for amendment may come if not in the lifetime of this Government, in the lifetime of another Government which will be even more enlightened as to the way in which local rates should be spent. I fail to understand why the Minister gets support from his own colleagues. At one time the very mention of a penny being put on the rates for any purpose whatever caused people to hold up their hands in holy horror. Today, a suggestion that we should put shillings on the rates is received with acclamation by the Minister's colleagues. I cannot, for the life of me, understand why that is so. Undoubtedly the Bill will receive the
  1820
  blessing of his own colleagues tonight. The Opposition must vote against it. I hope that we shall have in our minds the reservation that the many blemishes which the Bill contains may eventually be remedied when the opportunity arises.
  5.43 p.m.
  Mr. Eric Fletcher: It seems to me that some hon. Members opposite who have announced their intention of going into the Lobby against the Third Reading of this Bill are very lukewarm in their opposition. No wonder. In the years to come this Bill will be regarded, as the Minister said, as in the succession of great Measures of local government reform starting from the Municipal Corporations Act, 1835, and including a number of other similar great Measures which are necessary periodically to bring our whole law and conception of local government up to date in accordance with the changing requirements of the times.
  I did not have the good fortune to be a Member of either Standing Committee B or the Scottish Grand Committee and, therefore, have not had the opportunity to follow in any detail the career of this Bill through its Committee stage, but I notice that a number of substantial changes have been made, all, it seems to me, by way of improvement, and I have heard nothing from the benches opposite which alters my opinion, expressed on the Second Reading stage, that this is a bold and imaginative Bill which will be welcomed by both local authorities and ratepayers alike.
  Not having followed the Committee stage in detail, I can only speak for a few moments on the main principles of the Bill, which, after all, is really the object in this House of the Third Reading Debate. What does the Bill do? Let us note that although the Opposition are going to divide against it, it is quite obvious from their speeches that they have no quarrel with a great many of the principles contained in this Bill. First of all, the Bill provides immediate relief to ratepayers of £39 million—
  Mr. S. Marshall: Some ratepayers.
  Mr. E. Fletcher: All ratepayers will get a direct benefit and relief as a result of this Bill—
  Mr. S. Marshall: No.
  Mr. E. Fletcher: Yes, subject only to one qualification, which may be important. As the Minister pointed out, the first fruits of this Bill are already apparent. A number of municipalities have announced their intention of reducing rates for the next half year. But as the article in today's "Daily Herald," which the right hon. and gallant Gentleman the Member for the Scottish Universities (Lieut.-Colonel Elliot) quoted, pointed out, most municipalities do not announce their rates till the early days of March when we shall find that a great many other municipalities will also be announcing further reductions.
  It is very much to be hoped that the benefits of these rate reductions will be passed on to all tenants who are entitled to have them. I mention that for this reason. There are in this country a great many tenants of properties which are governed by the Rent Restriction Acts. Under those Acts the landlord is entitled to put up the rent to a tenant protected by those Acts by an equivalent amount when the rates go up. Most landlords have taken advantage of that provision. On the other hand, when rates come down, tenants who are paying an inclusive rent, will be entitled to have their rent reduced by a corresponding amount. A great many tenants, particularly in parts of London with which I am familiar and, I have no doubt, in other parts of the country, suffer from the fact that the standard rent and the statutory requirements are not written by their landlords in their rent books. I come across a good many tenants who do not know how much out of the total inclusive rent they pay is in respect of basic rent and how much in respect of rates. It is to be hoped that when this Bill becomes operative, as it will very soon, all those tenants who are protected by the Rents Acts will take advantage of this provision and see that their rents are reduced by the amount of rate reduction in their locality.
  Another aspect of the matter, which I gather is not challenged by the Opposition although they will vote against the Third Reading, is the provision for the reimbursement to members of local authorities of allowances for travelling and subsistence expenses, as recommended by the Lindsay Committee. That introduces an improvement into our local government law which is long overdue, and the credit for it goes entirely to the
  1822
  Government. For a long time some members of local authorities have suffered considerable hardship and have made considerable sacrifices through being out of pocket as a result of losing time and wages and incurring travelling expenses which they could ill afford while performing their civic duties as members of local authorities. The House will agree with the Minister that this long overdue reform will remove a hardship and will throw open to an ever widening circle of men and women the possibilities and opportunities of rendering service of this kind to the community.
  The provisions in the Bill which have been most criticised are those relating to the Exchequer grants, but I did not understand the right hon. and gallant Gentleman or any hon. Members opposite really to defend the existing system under the block grant, with all its anomalies. It is quite easy to criticise any Exchequer grant on points of detail, but I think everyone will agree that the system adopted in this Bill is an immense improvement on the present complicated, anomalous, unjust and inequitable system. In fact, the real gravamen of the attack which the right hon. and gallant Gentleman made was that some of the richer authorities would not get much benefit under the new scheme.
  Mr. S. Marshall: It is perfectly true; it is the poor ones.
  Mr. Fletcher: All the poor ones will benefit because, as the Minister has pointed out over and over again, the effect of the Bill is to make the Government a ratepayer in all municipal authorities with the exception of a very few of the richer authorities.
  Mr. Turton: Will the hon. Member explain to the Committee what advantage in the way of Exchequer equalisation grants Bradford will get out of this Bill?
  Mr. Fletcher: I do not propose to deal with the case of Bradford or any other place of which I do not know the details. I sit for a London constituency, and though London does not benefit conspicuously under the Bill, I support it because of its inherent fairness. Hon. Members who represent Bradford will be able to deal with the case of Bradford.
  To return to the principles of the Bill, the Bill was criticised on Second Reading

  1823
  on the ground that it took certain powers away from local authorities and thereby reduced their efficiency and independence. Since then, we have had that notable addition to the Bill, of the new Clause 131 enabling local authorities to provide entertainments of any nature. I welcome that provision for two reasons. We owe a great deal in this country to the efficiency and to the purity of local government, but the success of local government depends on its ability continuously to adapt itself to the changing requirements of the times. Local government cannot be static either in its functions or its boundaries. As the social conscience of the community is improved, and as in matters like health, education and housing, the central Government lays down certain minimum standards, it is inevitable that there should be a closer co-operation between the central Government in Whitehall and local authorities. The corollary of that must be, not complete control from Whitehall, but some degree of control to ensure that the more backward authorities will fulfil minimum standards. However, while there cannot be complete independence in what are matters of national concern it is encouraging to find that fresh fields of activity are opening up to local authorities. It is esssential that local authorities should always be able to feel that they have a stimulus to local incentive and enterprise, and that local government remains a dynamic system of rendering service.
  Thus, it is my belief that Clause 131 gives local authorities scope for pioneering efforts and enables them to fulfil a widely felt need amongst the community today for more local cultural assistance. I think we shall find that, by reason of this new provision, local authorities will not only be able to buy or build halls or theatres, but will be able to extend their library service, and their museum service; they will be able to encourage artistic, sculptural, musical and other cultural activities in their areas—objects which may not necessarily at the outset be paying propositions, but which need encouragement and fostering, and which can be developed by local authorities having the means to make a modest rate contribution for those purposes. In London during the war, as the Holidays at Home campaign developed, we found that there was a considerable demand for
  1824
  municipally-provided entertainment of various kinds; for artistic, athletic and other kinds of entertainment in the parks of London. It is in that sphere that there are all kinds of possibilities which can be developed by local authorities on lines particularly appropriate to them, because they alone are the judges of the local tastes and interests.
  In conclusion, may I say that I am sure that hon. Members opposite who vote against this Bill tonight will in time to come regret the part they have played, and will regret that they have opposed instead of participating in the passing of a Measure which will be regarded as a milestone in the road of local government progress.
  5.56 p.m.
  Commander Galbraith: The hon. Member for East Islington (Mr. E. Fletcher) seems to be in some doubt why the Opposition intends to divide against the Bill tonight. He is perfectly right when he says that we are in agreement with many parts of the Bill which we consider to be an improvement on the present state of affairs, but the primary object of this Bill, as I understand it, is to equalise the rating burden throughout the United Kingdom, and we intend to divide against the Bill because we do not think that it achieves its main purpose. In England and Wales the Bill sets up a uniform valuation system for these two countries, but it leaves the existing valuation system in Scotland still operating. So in the Bill we have a continuation of two different systems of valuation in different parts of the United Kingdom, both parts of which are covered by the Bill. In these circumstances I think there will be great difficulty in obtaining equalisation or uniformity of the rating value, and it is my contention that that equalisation will not be obtained.
  For many years now the system of rating existing in Scotland has been under heavy fire. It has been criticised from every side, and I should have thought that any Government dealing with local government reform would have dealt with the whole subject in a comprehensive manner. However, the Government have not taken that course and, as a result, we have had produced for us a piece of patchwork legislation which does not give us a uniform system that

  1825
  would have given justice to ratepayers and to local authorities no matter whether they were situated in the Northern counties of Scotland, or in the valleys of Wales or in the more hospitable regions of the South of England. We get nothing of the kind and, from the Scottish point of view, we find the Bill very disappointing. There is a general feeling that the Bill does not give justice, and that the Secretary of State has allowed to slip through his fingers an opportunity of reshaping a rating system which is not in accordance with modern conditions and which makes little pretence at distributing the rating burden equitably all over the country. It seems to me—I hope I may be wrong—as though the right hon. Gentleman had allowed himself to be dragged at the chariot wheels of that impetuous personality, the Minister of Health.
  It is becoming almost universal in this Parliament to assume that when any Scottish Member rises in his place he does it for the purpose of begging some extra financial assistance for Scotland. I want to assure you, Mr. Deputy Speaker, that such is not my purpose this evening. What I want to be assured of is that there is a fair deal between the two countries. Until the two peoples are assured that that position of fairness has been reached, so long will they feel that one is doing better than the other, and that everything ultimately depends upon the personality of the Ministers concerned and their powers of persuasion. That is an unhealthy situation which ought to be remedied.
  When the Government decided to retain two separate valuation systems, they got themselves into a dilemma. They recognised quite clearly that rating valuations in Scotland are much higher than they are in England, and they were in a difficulty as to the basis they should choose to make things level. They have chosen as their basis the average rateable value per head of population in England and Wales, with 25 per cent. added for Scotland. I have never yet heard any real justification for that 25 per cent. It may be correct, or it may be too high, or too low, but I think the House require some justification for that figure. We want to be assured that it gives equal justice. We in Scotland do not want anything more than that, but we are not prepared to accept anything less. I should have imagined that before the figure was
  1826
  adopted, as it is a figure of such great importance to local authorities in England as well as in Scotland, that there would have been a thorough fact-finding inquiry, but, so far as I know, no such inquiry has taken place. As a result there is a divergence of opinion between local authorities and the Secretary of State; I do not think there is any wonder that such a divergence of opinion exists.
  The figure of 25 per cent. was taken out of legislation passed by this House when conditions were quite different from those which exist today. I believe the Secretary of State is prepared to defend the figure of 25 per cent. and I would like to know his grounds, because, as far as I can ascertain, the expert opinion of 95 per cent. of Scottish assessors puts the figure at 65 per cent., not 25 per cent. It may be that he can produce other experts who would place it below 25 per cent. There is cause to wonder on what grounds the right hon. Gentleman accepted the 25 per cent. figure without a very full inquiry into all the relevant factors.
  This is a United Kingdom Bill, which aims at putting Scottish local authorities into more or less the same position as English local authorities. We ask for nothing more nor less than that, but we have very grave doubts whether that is being achieved by this Bill. The doubts are genuine, and are based on figures. I suppose the two most comparable cities in England and Scotland are Glasgow and Birmingham. Their populations are more or less the same—there is a matter of 60,000 between them in over one million—and both are industrial cities. Yet we find that the rateable value of Glasgow is £11,500,000 against £7,500,000 for Birmingham. If we had anything like a comparable system of valuation it could never be contended that that difference could exist. Between the figures there is no, relationship to 25 per cent.; the actual relationship is 53 per cent. The outcome is that Birmingham, which throughout the years of depression, in the 1930's, was an exceedingly prosperous city, receives an equalisation grant of £611,000, and Glasgow, which during those same years was the centre of one of the most depressed areas of the country, is to receive nothing at all. Indeed, at the same time it is having withdrawn from it the Exchequer grant which contained an element of de-rating and which amounts to £950,000.

  1827
  It is no good the hon. Member for East Islington telling us that it does not matter. He had better not go to Glasgow and repeat that statement there, and the same could be said of the hon. Member for Hitchin (Mr. Asterley Jones). No matter what the Government may say, this House requires a far fuller explanation than has yet been received, and that indeed is demanded by the corporation of Glasgow which, let us not forget, is still controlled by a Socialist majority.
  Mr. MeKinlay (Dumbartonshire): Hear, hear.
  Commander Galbraith: That may not be for long, and the hon. Member for Dumbartonshire (Mr. McKinlay) had better not take too much to himself in that matter.
  Mr. MeKinlay: It has been so since 1933.
  Commander Galbraith: The Minister had said that the average reduction of rates was going to be 3s. 4d. I am told that the figure of 4s. which appears in the White Paper as the reduction in Glasgow will not be 4s. in 1948–49, but is likely to be less; not more than half that amount.
  I wish to give another example of the extraordinary way in which the Bill works out. Wales has a population of just half the size of the population in Scotland. Both proportionately suffered an equal measure of sacrifice in the trade depression of the 1930's. Yet the population of Wales is to receive 600,000 more in equalisation grant than the population of Scotland, which is twice as large. I am not for a moment suggesting that Wales is getting too much, but the very fact that a population twice as large is getting less by way of equalisation grant demands that the whole matter should receive much fuller consideration than has yet been given to it.
  An allusion has already been made to the fact that this Bill has been rushed, and rushed far too much. The right hon. Gentleman gave reasons for that, but I do not accept those reasons. The Bill could have been put through properly. It is an ill-considered and ill-planned Measure. Instead of being subject to Government inquiry and planning such as the Government pride themselves upon, it has been subject to rule of thumb methods, and
  1828
  those rule of thumb methods happen to be out of date. In Scotland and other parts of the United Kingdom we are not satisfied.
  In regard to Scotland the right hon. Gentleman has the means available to dispel the doubts which I have expressed. In Clause 30 he has power to investigate the workings of the Measure in consultation with the associations of local authorities, and with any particular local authority he may choose. I suggest that he should have the date altered in Clause 30, and expedite the investigation, because I do not think Scotland has any reason to fear an investigation. In fact, I think it ought to welcome the fullest and widest investigation, not only into this aspect, but into the circumstances of every Government grant which goes to local authorities. I feel sure it will not be found that Scotland is getting anything in excess of what Scotland needs.
  I wish to deal with the effect which this Bill will have on promises which were so solemnly given during the passage of the Hydro-Electric Development (Scotland) Act. Let me remind the Secretary of State that those local authorities which were frightened that their amenities would be destroyed were assured that anything they might lose would be more than made up for by the additional rating value which would come into their areas by the establishment of power stations and other works by the North of Scotland Hydro-Electric Board. It seems to me that these promises have now been dishonoured, that the Bill removes that compensation, because the sum which is to be paid in lieu of rates by the North of Scotland Board is now to be spread over the whole of their area, and will not be in any way confined to those particular localities where works are in course of being erected. I would like the right hon. Gentleman to be sure in his own mind whether or not those promises have been broken.
  Will the right hon. Gentleman be good enough, when he replies, to deal with these matters? I would like him in particular to tell us if he can justify or defend the figure of 25 per cent. I hope that in any case he will see that an inquiry into the whole situation is shortly undertaken, because it is necessary for it to be proved for the benefit of every part of the United Kingdom that neither Scotland

  1829
  nor any other part of the United Kingdom is getting an advantage over some other part.
  6.11 p.m.
  Mr. McKinlay: I wish, in a word or two, to say "Amen" to one of two things which have been said from the Front Bench on the other side of the House. I do not for one moment wish to say that the Opposition are not themselves at least somewhat to to blame for the losses being incurred by industrial local authorities. The 900,000 referred to by the hon. and gallant Member for Pollok (Commander Galbraith) is the residuum of the Derating Act which was passed by the party opposite.
  I do feel that in connection with hydro-electricity I was "sold a pup" in the last Parliament. There was a time when hon. Members of this House were tired of hearing the words "Loch Sloy" mentioned. I wish to be a little reminiscent in connection with this subject; I think it warrants it. I had a Motion of the Order Paper to annul the Loch Sloy development, a project which is in my constituency. An amicable arrangement was arrived at behind Mr. Speaker's Chair, whereby the county of Dumbarton would get the best of the bargain, but it appears that the pop I got on that occasion was somewhat mangy. Of course, one Parliament cannot bind another, but I recall the drama that took place that night, when by arrangement I was not in the Chamber when the Motion was to be called, and the Minister was here with all his papers, after having left me only ten minutes previously. But a part of that arrangement was that the county of Dumbarton was at least to benefit to the extent of almost the equivalent of a 5½d. rate.
  I agree that one could not anticipate exactly just what has happened. I repeat that we in this Parliament cannot bind the next Parliament any more than the last Parliament could lay down what was to happen in this one. It should be remembered, however, that if this Bill had been postponed for another 18 months the benefits of the equivalent of almost a 5½d. rate would have been in operation. But the Loch Sloy scheme is not in operation. It has been said to me that we are to get a benefit even better than that. I remember that hon. Gentlemen opposite told us
  1830
  about derating, "It is nothing to what you will get. The benefits of this will not be known for a number of years. It will rescue industry by taking away the burden of rates." At that time most of us were rescued from the workhouse, on and off.
  I ask my right hon. Friend whether any provision has been made to take this potential loss into consideration. I am satisfied that those responsible for the formula in connection with this scheme can prove to the satisfaction of everybody that all the local authorities are coming out of this business on the wings of happiness. I want an explanation of why it was necessary to pool the rates from the hydroelectric undertaking and postpone the putting of the colliery rates in the pool. I do not see why this ungodly rush has taken place in relation to hydro-electric development. The chairman of the Hydro-Electric Board, who is not unknown in this House, while not criticising in the least what the Government are doing in connection with this Bill, says "You have taken away a valuable bargaining counter from the Hydro-Electric Board in their dealings with local authorities." It may be that the Board will not now require to negotiate with local authorities. They may be armed with authority to go in and do what they want to do without even discussing it with the local authority. It will take a long time to convince me that this 5½d. rate which we are losing in the county of Dumbarton is really something which is to bring us better benefits in the future. I do not for one moment believe that.
  To leave the county of Dumbarton and revert to Glasgow, I feel sore about this equalisation grant of almost £600,000 to Birmingham. It would appear to me that the more highly developed the social services are in a place like Glasgow as compared with Birmingham, and the greater the assets an authority has to hand over, the less it gets. Think of the potential loss to Glasgow's rates from their undertakings, which are being transferred to the State—and we are not opposing the transfer of the undertakings. Again, I will take a lot of convincing about the benefit to Glasgow of taking the railway rates away from Glasgow, the rates of the gas and electricity undertakings, and throwing them into a common pool, and distributing favours over the whole of Scotland, in areas which are not even put

  1831
  to the inconvenience of having huge railway termini in their midst with their smoke, dust, disease and the grime they cause—to take from Glasgow and say to Rothesay "Your big brothers in Glasgow have provided a substantial fund out of which you will get a good portion."
  I have one suspicion about this Bill. First, the local authority associations all dived into funk holes. The immediate benefit they are to get has chloroformed them, and instead of being a house united they have in the last fortnight become a house divided. Every local authority which sent representations to Scottish Members of Parliament asking them to get this matter rectified has, with the exception of Glasgow, taken cover. Why? Simply because in the technique pursued in the Special Housing Association in the building of houses in the built-up areas there would be no cost to the ratepayer. The local authorities were divided upon it and they were conquered.
  My worst suspicions are roused because there have been no complaints from Edinburgh. The City Chamberlain in Edinburgh is satisfied that Edinburgh is getting a good bargain, even at the expense of Glasgow. That has happened before. There is not a murmur from the lowest rated city with the highest valuation in Scotland. They are quite happy. Despite the good things contained in the Bill, if Edinburgh is happy then I am dissatisfied. I do not say that because of my Glasgow patriotism. I am always suspicious when anything with a financial arrangement pleases Edinburgh. Other local authorities in Scotland can look out. They are getting the sticky end of the stick.
  I would ask my right hon. Friend to do me a favour, and to do a favour to all the local authorities which have hydro-electric undertakings in their areas. Please reveal the magic formula and tell us how they are going to benefit by the diversion of a very substantial rate to be thrown into a common pool, and how, by that method, they are going to benefit much more in the future than they would have done had they received an immediate benefit. I would rather have the 5½d. rate in the bag first of all, and then proceed to discuss the benefits to come afterwards. I see that the Parliamentary Secretary to the Ministry of Health is laughing. I do not know whether he would laugh so cheerily
  1832
  if I were speaking on behalf of the poor English ratepayers. He sees the logic in my argument. I would rather have seen that 5½d. rate on the credit side of our ledger, and then we could have discussed the future on an equal footing.
  I am quite sure that the Secretary of State for Scotland will be able to convince all the Scottish Members on this side of the House. I do not suppose that he will ever convince the Scottish Members on the other side. He will do his best to convince those of us on this side of the House who have a sense of grievance. This problem would have been simplified if we had started off by dealing with things which were equal. We start off with things which are not equal. I am referring to the valuation methods and the rating systems of the two countries. The rating system in Scotland, with its rate upon rate and its anomalies, is, I quite agree, a preposterous system. Hon. Members on the other side of the House have had ample opportunity to rectify it and have never taken any steps to do so. This would have been an opportunity, at least, to try to start off with an equal method of rating and valuation, but apparently that is postponed to a later date—
  Mr. Speaker: We have to discuss what is in the Bill and not what one would like to see in the Bill or how one would have wished to see the Bill started.
  Mr. McKinlay: I am very sorry, Mr. Speaker; I did not notice you come in. I must not transgress; I must not defy the Chair. I was merely working up to a rather indifferent peroration, and I hope you will forgive me. I am sure that tonight, at least, the Secretary of State for Scotland will explain to us the mysterious things about which I have been seeking information.
  6.25 p.m.
  Colonel Wheatley: I am sorry that the hon. Member for East Islington (Mr. E. Fletcher) is not in his place. He commented on what he called the lukewarmness of the Opposition in opposing this Bill. I should like to explain to him that it is probably due to a great and grievous disappointment with this Bill which we have been looking forward to with much eagerness. All the local authorities have been looking forward to it, and now they find many blemishes in it. Many hon. Members on

  1833
  his own side of the House have pointed out blemishes which are still in the Bill, though it has been through al] the various stages. There is, in particular, the blemish referred to by the hon. Member for Hitchin (Mr. Asterley Jones) with which I entirely agree. There will be a great grievance felt by all the owner-occupiers over the discrimination in the valuation of their property. I wish the hon. Member for East Islington could have been here. He would have realised why we find that, although we want a new Bill to deal with these subjects of re-valuation and the change in the block grant, we are unable to support this Bill, and must vote against it.
  Local authorities all over the country are very dissatisfied owing to the many blemishes that are to be found in the Bill. They see no reason why the present system of valuation should be done away with and a sort of super-department brought in, at a greater cost to the country, and with a greater use of manpower. We can be perfectly certain that the new department will not be satisfied to carry out the work now done by a clerk to the local assessment committee and a typist. Increased staff will be appointed. The local authorities feel that the present set-up could well have carried out the work, and, owing to their present knowledge—which of course the new staff would not have—would be able to carry out the new valuation in a much shorter period than will be possible under the new system. I entirely agree with them.
  I listened to the logic of the Minister and his argument was very clever. Although I went with him for a considerable way, I am not convinced that he has the right solution of the difficulty. I do not think he has convinced himself. He has stressed continually, both upstairs and again this afternoon, the complicated difficulties to be overcome in the new system of valuation. He has continually stressed that point, and I sympathise with him. Hon. Members opposite have twitted us on this side of the House on the ground that we have not dealt with this matter before. This is a thing which has grown by degrees. It is now the turn of hon. Gentlemen opposite to try to find a solution. They are finding it extremely difficult to discover a solution which satisfies everyone. This Bill certainly does not satisfy everyone on their own benches. I think that hon. Members opposite will
  1834
  realise that some local authorities are not as happy as the Minister appears to be about this Bill.
  I should particularly like to mention the question of sparsity. The population in an area is not usually evenly distributed. We may have a county which has a large part of its population, possibly a quarter or even a third, concentrated in one large town. That means that the rest of the area is extremely sparsely populated. I really do not know how the Minister arrived at his figure of 70 for sparsity weighting. He has never told us. In fact, he has refused to give us any figures. In the Local Government Act, 1929, the figure was 200. In the Act of 1937, the figure was 300. It is very difficult to understand, without any explanation from the Minister, why he has fixed on the figure of 70. This will hit a good many areas in England. In fact, I think it will only help to any degree certain counties in Wales. One can understand why the Minister is pleased with that—not that I accuse him for one moment of doing it on purpose. There are very few, if any, counties in England which will benefit by the sparsity figure of 70. Many of them will lose.
  Clause II is another provision which local authorities, particularly rural districts, do not like. They cannot understand why, when boundaries are altered, a burden payment should not be paid. It is all very well for the Minister always to give the answer that this will all be smoothed out by the equalisation grant; but those local authorities which are losing their burden payment do not like it. Those authorities which do not get any equalisation grant at all will be in exactly the same position as they are in today. They will lose very heavily.
  Another blemish relates to local authorities which have electricity power stations in their areas. It is all very well for the Minister to say, "Why should these authorities which have power stations in their areas get all the benefits?" He asks why should not the other areas, which may not have the good fortune, as he called it, of having power stations paying heavy rates, receive some benefit when they use as much electricity as the others? But what about all the amenities that are spoiled in the area of these huge power stations, many of which are very ugly? Are the local authorities to have no benefit because of that? They

  1835
  would much sooner have seen a different way of dealing with this matter. However, I am afraid that Mr. Speaker will call me to Order if I suggest ways and means in which we could have got round that position without upsetting the local authorities who must put up with having these vast power stations in their areas.
  Finally, I would like to stress one important reason why I do not like this Bill. This Measure deals mainly with revaluation and changes in the block grant system. That, surely, is enough for one Bill. I wish that we could have discussed the matter at much greater length. Throughout the Committee stage, the Minister was hurrying us along all the time. We heard him explain this afternoon why he asked us to hurry and to shorten our discussions on this complicated Measure. His reasons are sound; but why was not this Bill brought in earlier in order to allow more time? It would appear that the Minister of Health is very low down on the priority list of the Chief Whip or the Lord President of the Council, or this Bill would have been brought forward earlier. If we had been allowed more time in which to discuss these provisions, I am certain that we should have improved the Measure out of all knowledge, and that the Minister and hon. Members opposite might well have been proud of a Bill which would really overcome the difficulties. Instead of that, all sorts of minor and extraneous items have been included in this Bill. Many of them might have been dealt with in private Bills. They certainly hold no place in a vastly important Measure dealing with these great and all-important local government and re-valuation problems.
  6.37 p.m.
  Mr. Carmichael: I want to make two points which have been stressed already, but which I think will bear repetition. I support the contention of some Scottish Members against the method of valuation. If this is a United Kingdom Bill, then I say that a very strong case is made out for a complete overhaul of the rating system and the method of valuation. The position of the City of Birmingham in relation to the City of Glasgow has been mentioned. I do not ask for any special advantage for the City of Glasgow, but if this is a United Kingdom Bill, if the desire of the Government is to deal equitably with
  1836
  every authority in the country, and to approach this problem from the point of view of the ratepayers, then we ought to be able to examine the position of Birmingham and Glasgow without difficulty. I suggest to the Secretary of State that it is impossible to indicate clearly the relationship in valuation between Glasgow and Birmingham. I should have thought that if this was an attempt at equalisation, we ought to have known the relative merits of the claims of these cities. One could extend that argument to other fields.
  For many years we have been dissatisfied with the rating system in Scotland. One need not go into detail. It has been the constant complaint of every authority that the system of rating was very bad indeed. All the existing authorities in Scotland have expressed dissatisfaction with the method of grants under this Bill. It is quite true, as the hon. Member for Dumbartonshire (Mr. McKinlay) said, that Glasgow is the only authority which has continued to present its case up to the last minute, but I make this prediction. I am thoroughly satisfied that, after the Measure has been in operation for some years, there will be required some form of amending legislation to deal more fairly with some of the towns which I think are being unfairly treated at the moment.
  Much play has been made over the innovation of paying members for service on local authorities, but in future they will be allowed payment for loss of time, in addition to which there will be a subsistence and a travelling allowance. I am not so sure that this will be the great boon and blessing which many hon. Members think, it will be, because I have experience of what has happened in certain parts of Scotland where allowances were made for lost time. It is extremely difficult in many occupations to define time lost or remuneration lost. Let me give one case—that of the person who is employed wholly on a commission basis. How are we to calculate the loss to a person of that kind? He cannot honestly and sincerely say, like the wage earner, "I have lost a certain sum of money, and, therefore, I want to be paid." I fear that this provision is open to some abuse. In spite of the criticism I have heard against it, I would rather have a flat rate. The answer to that is the retention of the voluntary system.

  1837
  There seems to be about this matter a feeling of Puritanism which I have never understood, an idea that, if one serves on a local authority and receives a fixed figure, one has lost one's moral feeling for public service; but apparently if one comes to the House of Commons and is permanently paid for it, there is no such loss of the moral conceptions in public service. I feel that, in the big towns, there will be a very serious handicap to persons giving full-time service. It is argued that many people who are denied the right of serving today will have the opportunity to do so under the new legislation. That also is open to question, because it does not follow that, if the local authority has the power to pay, the employers will grant the concession to the persons concerned who wish to serve on the local authorities. In the engineering shops, I can see, not only the employers objecting strongly, but the men's mates in the shops objecting to a special privilege. I do not think the method of payment is a good one or that it offers freedom to every member of the community, if he so desires, to serve on a local authority.
  I come to the point about subsistence. What is the position in regard to subsistence? Persons living three miles away from the council's meeting place will get a subsistence allowance. I can see that actually working out so that the only people to get it will be members of the business community who live in the country and have business premises in the cities. I cannot see members of the council of a large city being able to claim it, because of the three-mile limit.
  The last point on the question of payment is in connection with provosts and conveners. I gather that the chairman of a district council in England can have such a payment. If the equalisation principle is applied in Scotland, the provost of a borough or the convener of a county council can have a somewhat similar payment, but there is no mention of a lord mayor or mayor, because already the principle is established in England that an allowance may be made to a lord mayor or mayor to carry out his functions. I submit that, if it is sound—and I have no objection to it—to pay a district council chairman in England in order that he may carry out his duties properly, it is equally sound
  1838
  to make a payment to the convener of a county council, and that this principle should be enlarged upon so far as the large towns are concerned.
  I will give only one illustration to press home the point. I submit that, with due regard to the powers of county councils in England, the chairman has responsibilities not nearly as exacting as those of the convener of a committee like the housing committee in the City of Glasgow. I ask my right hon. Friend the Secretary of State to look into these points. I ask him to consider whether provosts should be paid or given an allowance to enable them to carry out their duties, and whether the principle should be extended where it is necessary to do so. I hope, however, that it would not be abused. I think my right hon. Friend will agree that it is not an unfair proposition to submit that the convener of a housing committee or of an education committee in a city like Glasgow, both of them men holding responsibilities more exacting than those of the chairman of a county council, should have extended to them the same right to allowances as is given to other people of that kind. If the Secretary of State finds that this is a reasonable proposition, I hope he may find it possible to amend the Bill in another place.
  6.47 p.m.
  Mr. Turton: The most remarkable feature of this Debate has been the change in attitude in the speeches of hon. Members on the other side since the Debate began. It began with the Bill being welcomed as a boon and a blessing, but speech after speech since then has been touching on the injustices inherent in the Bill. I agree with the speeches of the hon. Members for Bridgeton (Mr. Carmichael) and Dumbartonshire (Mr. McKinlay). This Bill has a hard core of injustice; not only does it not remove injustice, but it will work great injustice to very many poor people in this country.
  We start off with the present lack of uniformity in rating throughout the country. What has the Minister done to remove that lack of uniformity? It is quite clear that there are some areas where the assessments bear little or no relation to the rents, and, so long as we have a hypothetical tenant, or something like it, the rent is the basis of the value of

  1839
  the house. In other areas, the authorities have scrupulously carried out their responsibilities and have got their assessments up to the 1938 rental values. Since 1938, nothing very much has been done. The Minister, instead of encouraging the weaker authorities to give an example to the stronger, scraps the whole system, and is going to make a great new bureaucracy which will have to value all property in England and Wales. It seems, therefore, that there will be some five years' delay before anything is done to correct that lack of uniformity.
  Next, the Minister makes the problem even more difficult because, instead of allowing this great new bureaucracy to work on some known formula, he has created in this Bill four different kinds of values for dwelling-houses, so that the men who are to be thrust into this work will be faced with the difficulty that the lack of uniformity will be greater by reason of whether or not the house was built before 1918, and whether it was built by or for a local authority or private enterprise. The last way in which he tackles this problem is even worse. In working out his block grant system, which is now called the equalisation grant, he has taken as his formula for the block grant the rateable value—not the rateable value as it may be under the new bureaucracy, but the uniform rateable value of the present day. Therefore, an authority like Bradford, which has no claim to richness will not benefit, while an authority which has been careful in keeping its assessments low will be regarded as a poor authority, and a fitting recipient for the Minister's generosity. That seems to me to be the radical injustice of this Bill.
  I would like to deal in a little further detail with those three sides to this Bill, and will take first the one I touched on last because it is first in the Bill. It is the question of an equalisation grant. I would say, in passing, that we are in some considerable difficulty over this because, when the Bill was introduced, the Government went to the expense of publishing a White Paper, Command 7253, which purported to show what would be the grant under this Bill. By the end of January, in answer to a Question in this House, the Government showed that not one calculation in the whole of that White Paper was correct. The House will recall that
  1840
  in HANSARD of 29th January we find an entirely new White Paper showing the effect of these equalisation grants. I can make my point on the injustice of the new block grant by taking it down, not in the realm of the big authorities, but to the actual occupier of a house. It is always difficult to point to similar houses, but I can do so by taking the prefab, because, after all, the prefab has the advantage that it is unique and does not vary from area to area.
  I have certain figures showing how prefabs are assessed in different parts of England. The prefab in Sheffield is assessed at a rateable value of £10, and the rate which the occupier pays is £6 18s. 4d. a year. In Merthyr Tydfil, the prefab is assessed at only £7, and the rate paid by the occupier is £5 0s. 4d. At Bradford the prefab is again assessed at £10, and the occupier pays a rate of £8 17s. 6d. a year, while, in Hampshire, the prefab is assessed at £14, and the rate paid by the occupier is £10 6s. od. By the equalisation grant, an entirely different relief for the rates of those four occupiers is given by the Government. Just because the Hampshire assessments are high, Hampshire, of course, gets very little.
  If we deduct the amount of the grant from the rates on those four different prefabs, we find that the occupier of the prefab in Sheffield will, in future, have to pay £5 1s. od.; the occupier in Merthyr Tydfil will have to pay £1 13s. 9d. a year, only a quarter of the amount; the occupier in Bradford will pay £8 1s. 6d., and the occupier in Hampshire £9 18s. od. Can anybody, on any side of this House, regard that as a fair result to be achieved by this Bill? We talk of poor and rich authorities. Let us get down to the meat of the matter. The ratepayer is struggling today to pay his rates and his living expenses out of his wages. Why, just because an authority has given him a lower assessment, should he get a greater relief, while the ratepayer of an authority which has higher assessments gets very little relief? That seems to me most demonstrably unjust.
  There is one further injustice. In all the previous local government Bills, regard has been had to the widely scattered rural areas where the cost of administration is high, because there are a lot of roads to maintain which are usually travelled on,

  1841
  not by the ratepayers of the county, but by what we in Yorkshire call "foreigners"—people from Scotland or from other counties. In this Bill, the Minister disregards any county where the population per mile is more than 70. As the hon. and gallant Member for East Dorset (Colonel Wheatley) said, what a happy coincidence it is that, as a result of it, Wales benefits, but no county in England benefits at all, and, I believe, very few in Scotland. Counties such as Norfolk, Cornwall, and my own county of the North Riding get not one penny benefit, although we have wild roads through scattered rural areas. Even though it is going to cost some £46,000 a year to bring the children to school, not one penny benefit is derived from this Bill, because there is that particular population weightage. That is why I regard that side of the Bill as unjust.
  Let us now turn to the centralised valuation. I would say, first, that, at a time when we are asked to economise in manpower in non-productive tasks, it is quite wrong for the Minister to set up a great new bureaucracy centred in Whitehall, taking over the work, in many cases part-time, done by local authorities. Extra expense is being involved, but, even more important, is that great loss of manpower. This method is going to delay revaluation by 1952. Is that right? Should we not try to break down this lack of uniformity earlier? If we had merely armed the centralised authorities with greater powers with which to secure uniformity, instead of having centralised valuation, we could have had this in one or two years.
  I am not going to discuss the alternative but only the fact that not until 1952 or 1953 will that new bureaucracy be able to operate. The weakest part of the Bill is undoubtedly the valuation of dwelling houses. I want to labour this point a little more. I do not think that all hon. Members realise—certainly not those who were not on the Committee—that the effect of these proposals is going to put up the assessments on the small post-1918 dwellinghouses by, in most cases, 40 per cent., and, in some cases, by 50 per cent. I want to know what right this Government or this Parliament has to pass a Measure that is going to put up assessments in that way. It is no good saying that it is all right; that we will put up all assessments, and that it will work out in
  1842
  the end. It will not. The assessment of dwellinghouses, in probably most assessment areas, is something like 65 or 70 per cent. of the total rate income. The rest comes from special properties, and from the rating of businesses. In this Bill, special properties are being stabilised at the existing level. Nationalised undertakings are going to pay a little bit less. Naturally the Government are rather friendly to the nationalised undertakings because they are paying the rates.
  The dwellinghouse occupier is to pay a great deal more, especially if he occupies a small post-1918 dwelling house. There is a curious anomaly in this part of the Bill with which I think we must try to deal. If a post-1918 dwelling house was, on 1st April, 1939—a very fitting date—rated higher than £75, it will come in on a different basis of assessment than it would if it were rated at less than £75. If it were less than £75, it is to be assessed on 5 per cent. of the cost of construction and site values; if it were above £75, it is to be assessed on the 1939 rental. That dividing line between these two different assessments will cause a great feeling of burning injustice; for one thing, as we know, a house assessed in 1939 in one area at £75 may have been assessed in another at £70, despite the fact that it was the same type of house. Here the Government are making a dividing line which will cut very harshly.
  I would illustrate my point by taking two completely identical houses in Scarborough, which were built about the same time and are both post-1918 dwelling-houses. The first house has 2,595 sq. ft. In 1939 it had a rateable value of £85 and hon. Members will, therefore, realise it will come over the £75 rule. That house was revalued, because since 1939 my county had been revaluing—wisely or unwisely—to a rateable value of £97. In 1939 its rent was £130 per year. Under this Bill, that house will have a rateable value of £105. The value goes up. A few yards away, there is another house, 100 sq. ft. less, of 2,492 sq. ft. In 1939, that house was assessed at £72. Again, it was revalued by the county valuation authority and it was given a rateable value of £80, but as it was less than £75 it comes under the construction cost basis. Under this Bill, that house is rated at £66—some £14 less than our revaluation. Yet the rent of this second house is £150;

  1843
  it is a better house than the first. It has a rateable value of something like £39 less than the first house. Look at the difference between these two houses, similar in character, and a few yards apart. If that first house had been in another area in 1939, where it had been assessed at less than £75, on the construction and cost basis it would be assessed at £70.
  For those reasons, I believe this Bill is demonstrably unjust. It penalises those areas which have been scrupulous in carrying out their obligations, and that is really where I believe this Bill is inherently wrong. Who are the wise and who are the foolish? Surely, the foolish were those who tried to carry out the obligations which Parliament had set upon them, and the wise were the negligent and the careless, for to them great profit is coming under this present profligate Minister of Health. For those reasons, because this Bill will create injustice between county and county and between ratepayer and ratepayer, and will raise the rating systems and the rates of the very poor, I shall vote against it.
  7.6 p.m.
  Mr. Pargiter: The hon. Member for Thirsk and Malton (Mr. Turton) has given a number of good illustrations, I think, which make it essential that the rating and valuation system shall be altered. What he has said was more in favour of the alteration than against it, although he quarrelled to some extent with the proposals. During the Committee stage, and at other stages, I followed with interest the various proposals put forward. There has been no alternative concrete suggestion put forward to that advanced by the Minister—I say that quite clearly. We have always been in difficulties on this question of valuation between county and county and between district and district; where the county valuation committee have done their job properly it has been between county and county. The position is no worse in that respect, and cannot possibly be any worse, under the new proposals than it was under the old system, and I am of the opinion that ultimately there should be a very considerable measure of equality as between county and county.
  I appreciate the interim period, and I am fully conscious of the differences that
  1844
  will exist during this interim period, as I have already said. In my own county we are penalised to a very considerable extent as a result of the fact that we have been valuing rather high—or I might say, on a proper basis of valuation—as against many other parts of the country. A start has to be made somewhere. At some time, somebody has to say that something must be done. The usual argument which appears to come from the benches opposite is that if a thing is difficult, leave it alone; and the more difficult it becomes, the more certain it is one must leave it alone. That has been their policy not only on this, but with regard to many other matters from time to time. I congratulate the Minister on having the courage to tackle it, because there is no question but that it will be a good time before we get over the basic inequality from which we are at present suffering.
  I think one of the points which has been most clearly made is that this Bill is based upon a different conception from any previous Act dealing with this subject. Under the new system, the basis of the assistance rendered by the Government to local authorities is on the need rather than on a general grant for services. If we look at the Bill from that angle—what it proposes to do and the means by which it proposes to do it—I think we can see it in rather better perspective than we have seen it as a result of some speeches we have heard from the opposite benches. I think it will be some time before we get valuation ironed out.
  I am sorry that we cannot get new valuation lists at an earlier date. I think proposals merely to widen the powers of the Central Valuation Committee would not fit the Bill at all; I think it has reached the stage when the only possible hope is the centralised valuation system, and I am looking to see it succeed as between my county and many other counties. There is another point. Just as one side of the Bill is to render assistance where it is needed, it has never been argued in this Bill, and it is not proposed to argue, the case which I would like to see presented that valuations, or payment of rates, should necessarily be on a basis of ability to pay. Obviously, what we are all looking forward to—and I think this probably applies to the other side of the House as well—is a really equitable basis as between one person and another on

  1845
  the basis of their ability to contribute towards the cost of the services that have to be run as common services to the public. None of us has yet found the way, but the Minister is getting a little closer in endeavouring to get uniformity of valuation. I hope that, in view of the fact that we have the new procedure now, and a new basis of assistance to be given by the Government, we may arrive at that at a later stage. Certainly, as we are at the present time we are bound to accept it.
  Another matter which was raised, and which is rather important, is that of time off and subsistence allowance for members of local authorities. The big problem will be that of the larger authorities, in finding people who will have the time to give to local government service, and of finding employers who will be willing that their workpeople shall have the time off that is necessary to engage in local government. I had hoped that the Bill might have done something about that, despite the difficulties. In spite of all its inequalities, inequalities from which I, coming from one of those highly-rated counties, will have to suffer in county finance for some considerable time, I nevertheless appreciate the principles on which the Bill is based, and I hope that it will be passed, and be worked with the good will of the people who want to see a better system established than has existed in the past.
  7.11 p.m.
  General Sir George Jeffrey's: In the first place, I suggest that this Bill should have set an example for other Bills in the way of simplicity of expression and of being easily comprehensible. A Bill of this kind ought to be comprehensible not only by Members of Parliament and officials of the Ministry, but by officials and members of the local authorities who will have to work it, and by the ratepayers. I do not hesitate to say that very few officials or members of local authorities will understand this Bill or anything about it until they have read a good many of the more complicated Clauses several times over, and that very few ratepayers will even begin to understand it, no matter how much they read it. I know very well that "the weighted population" Clause, and the formula for ascertaining the weighted population, are based on the Act of 1929, but they are none the less frightfully complicated and
  1846
  artificial. In introducing a new Bill, the Minister might, surely, have endeavoured to produce something a little more up to date and a little simpler than this Measure.
  The equalisation grants which will replace the block grants are to be determined by reference to the average rateable value per head of weighted population. If the rateable value per head of population of the county or the county borough is less than the average in England and Wales, then the deficit in rateable value has to be credited to that county or county borough, and the amount of rates which that credited rateable value would produce if it were actually the rateable value, has to be paid as a grant to the county or county borough in question as the equalisation grant. If the new assessments to be made were already in force and were assessed on the same basis, the equalisation grants might work fairly, and be fair in that way; but there are very great differences, as has been pointed out already by my hon. Friend the Member for Thirsk and Mahon (Mr. Turton), in the levels of assessments in the different areas.
  Some authorities—in some cases, I understand, deliberately—have preferred the method of low assessments and high rates in the pound, whilst others have endeavoured correctly to assess all properties in accordance with the existing Rating and Valuation Acts. Such a county can qualify only for a very small equalisation grant; some counties cannot qualify for any. If it has not developed hospital services—which may be the case, not because of any neglect, but because there has been a very good and well established voluntary hospital service—such a county will benefit very little from the transfer of services. I am thinking particularly of my own county of Hampshire, which will be worse off, because it loses more by the withdrawal of the block grant than it gains by the new equalisation grant plus the saving due to the transfer of services to the Government.
  Mr. Pargiter: Is it the case that all those services have been so bad in the past that the county gets very little from the transfer?
  Sir G. Jeffreys: I do not quite understand what the hon. Member is asking. On the contrary, Hampshire has been, like the county of my hon. Friend the

  1847
  Member for Thirsk and Malton, valued properly and consistently; the values have been kept up to date, and they are consequently higher than those of other counties, and the rates are consequently lower.
  Mr. Pargiter: Apparently, I did not make myself clear. The hon. and gallant Gentleman says that the county will gain very little from the transfer of the local services, the hospital and public assistance services. One must assume from that that the county has been at a rather low level of accomplishment in rating.
  Sir G. Jeffreys: I can only say that what the hon. Gentleman assumes is not the case. What I endeavoured to explain, though I did not say so in so many words, is that the reason why in Hampshire, and in a good many other counties, the municipal hospital services have not been very largely developed is simply and solely because there have been highly developed and very excellent voluntary hospitals. Many of them have been established for many years, and have been kept up by voluntary subscriptions. In most cases, I would say, those hospitals are of a very much higher class than the county hospitals publicly developed elsewhere.
  After taking into account the relief to local expenditure due to the transfer of services—the hospital, education, and poor law services—and due to the new system of the equalisation grant, instead of the former system, there will be assured to each county a minimum gain in 1948 to 1949 of the equivalent of a rate of 6d. in the pound under the transitional grants. The transitional grants are, in effect, consolation prizes—consolation prizes to those counties which have maintained their affairs very well, and which, owing to the working of the new system proposed in this Bill, will not get any appreciable equalisation grant. In some cases, they will get no equalisation grant, but in other cases they will get a small one; they will in many cases be considerably worse off in consequence: they get the transitional grant instead.
  The total of the transitional grants in the first year, as given in the Explanatory and Financial Memorandum that accompanied the first copy of the Bill, was originally estimated to be in the neighbourhood of £900,000 for the whole
  1848
  country That estimate has now been reduced to £171,000. Hampshire should receive some £59,000. Only three counties besides Hampshire participate, apart from a certain number of county boroughs. Those counties and county boroughs are naturally not very pleased with their treatment. They think that it would be fair that the amount of transitional grant should not abate by one-fifth in each year, as is proposed. If it is fair that in the first year the transitional grant should be paid to compensate local authorities for charges effected by the Bill, then it is surely fair that the full grant should be continued until property throughout the country has been re-assessed, for I presume that is the real and the only reason for the transitional grant.
  That is the thing on which the whole of this Bill is based. When all the properties in the country have been reassessed, this Bill may work with a certain degree of fairness. Until they have been re-assessed—which we are told by the Minister is unlikely to be completed before 1952, and it may be even later, there is an obvious unfairness in applying the principles of this Bill. It is surely fair, too, that the full transitional grant should be continued instead of being reduced by one-fifth, as proposed in the Bill, until all the property has been reassessed.
  I cannot think that the valuation provisions in Part IV are sound. The 1938 cost of construction basis, on which a large proportion of the valuations is to be calculated, seems to me unsound, if only because it is completely inelastic. If valuations have to be revised—and obviously they must be—it is very difficult to do so on the basis of the estimated or hypothetical value of 10 years ago, because that hypothetical cost of 10 years ago is, to my mind, artificial and consequently not practical. The Bill provides four different methods of valuation. First, farmhouses are valued on current annual values; secondly, pre-1919 houses which are valued on the comparable rents of 31st August, 1939, or, if no comparable rents are available, are valued on 1938 values; thirdly, the post-1918 private houses, with Rent Restrictions Acts limits, which are valued on the 1938 cost plus, not the 1938, but the current site cost; fourthly, the post-1918 local authority and housing association houses and flats,

  1849
  which are valued on the 1938 cost plus 1938 cost of site. With those different methods of valuation existing alongside one another—some of them hypothetical to a great extent, and out of date—anomalies must result between ratepayers valued on those very different methods—possibly ratepayers very close together in the same neighbourhood.
  Those are my two main objections to this Bill as it stands: first, as I have endeavoured to show, the difficulty as regards the equalisation grant and the transitional grant, due very largely to the existing differences of valuation of the same type of hereditaments in different parts of the country; and secondly, what seems to me to be an unsound method of valuation, a method which certainly has not the approval of the best known professional valuers in this country.
  7.25 p.m.
  Mr. Scott-Elliot: I will not detain the House long in putting a question to the Minister on one specific point. It is a point of some importance in so far as it affects those smaller authorities which in the past have derived a considerable proportion of their income from electricity undertakings which are now coming under public ownership. Throughout the country there are many small local authorities with electricity undertakings, from which they may have obtained 50 per cent, or even more, of their total rateable income. There is such a local authority in my constituency. I do not propose to go into the details of that case; I mention it merely to show that I have an interest in this matter.
  As the Bill stood originally, it seemed that such small local authorities would come off rather poorly. However, the Minister of Health has been extremely helpful in this matter, and, in so far as a local authority will be out of pocket to the extent of more than the product of a 2d. rate, Clause 105 provides help for a period of 10 years. I am most grateful to the Minister for what he has done, and I should here like to express my appreciation. But that grant decreases by one-tenth every year, so that at the end of five years the local authority will be getting only half what it receives in 1948–49. That may be—I will not say it will be—a very serious position indeed for a local authority. The question I wish to put to the Minister is: how is Clause
  1850
  126 likely to work in practice? That Clause gives permission—that is not compulsory—to the county council to make a grant to a local authority which is in difficult circumstances. How is this likely to operate? Normally, is the county council likely to make a grant sufficient to put the local authority in pocket, at any rate so that it will not sustain any appreciable loss over the 2d. rate mentioned in Clause 105?
  I make no apology for raising this detailed matter at this stage, because it is a question which affects a large number of small local authorities. Even if the Secretary of State for Scotland is not able tonight to deal with this point of detail, which applies not only to England but to Scotland, I hope that the Minister of Health or his Parliamentary Secretary, who was extremely helpful to a deputation I took to see him some little time ago, will deal with the matter by means of correspondence.
  7.28 p.m.
  Mr. Challen: I wish to add a little to the indictment which is being built up from all sides of the House against this Bill. I wish to refer to the way in which London has been treated—perhaps I should say the way in which it has not been treated. I am glad to see present the Minister of Works, who knows much about London, and to whom London has looked so much in the past for protection and support. I hope that even at this late stage perhaps he can persuade the Government to improve the situation in this respect. Why should London be treated in the way it has been under Clause 10, by which a scheme is prepared by the Minister in consultation with the county council, the Common Council of the City of London and other associations, and then given the force of law without any means by which it can be approved or even considered by hon. Members of this House, or by the ratepayers of London who, after all, are primarily interested?
  Why should not some means be devised whereby this scheme for London can be laid on the Table of the House and debated by hon. Members? Why should not some means be found by which hon. Members representing London constituencies can get their teeth into consideration of the London scheme and express their opinions on the Floor of the

  1851
  House? I know it may be said that the scheme will probably be satisfactory to the various interests concerned. It may also be said that the Metropolitan Boroughs, the county councils and the various associations are being consulted, and that they will generally concur. But this Clause gives the Minister power to alter, vary and make all other kinds of rearrangements to the scheme at his own sweet will, without any kind of access to this House. I suggest that although the various bodies concerned in London may be generally satisfied with the scheme the Minister may produce, it is not good enough for it to be given the force of law for the vast area covered by the Metropolitan Boroughs without being debated or even considered on the Floor of the House.
  It is surely a serious blemish on this Bill that we should have this hypothetical case of London left in the air like this. I make the plea that before this Bill receives the Royal Assent, some means should be devised—and I have made suggestions during the Committee stage, which I thought were very good ones—whereby the Minister can make an order which will be laid upon the Table of the House, which can be debated and considered by the representatives of the ratepayers of London. I make this protest very seriously, because we are dealing here with a very large and important area, and some protest of this nature ought to be made.
  The only other point to which I wish to refer is the entertainment Clause. This Clause should not have been introduced at the last moment into a Bill of this nature, which deals with all the intricacies of valuations and rating. To bring a completely new tune into this somewhat drab and dull Measure, does not improve the symphony, but introduces a discordant note. The entertainment Clause is not an embellishment to this Bill. It could much more appropriately have been dealt with on some other occasion, perhaps in some other Measure, or in a Measure by itself, when it could have been debated and properly considered. For the Minister to have sponsored this, in the circumstances which exist today, is rather alarming. I do not share the somewhat flippant attitude which has been adopted towards these cultural activities into which local authorities are to be en-
  1852
  couraged to enter. I do not share the complacency with which it is contemplated that millions of pounds may be invested in this venture by way of capital.
  I should have thought that before a Clause of this nature was introduced the Chancellor of the Exchequer and the other Departments concerned would have been consulted and their opinion asked as to whether at the present time this capital expenditure and investment should be lightly included in this Bill. I should have thought that this idea of a 6d. rate to encourage theatres and all the other activities referred to by my hon. Friend the Member for Oxford University (Sir A. Herbert), at vast expense to the ratepayers, was quite indefensible. I do not want to add further to the list of complaints against this Measure. It is a pretty formidable list, which entitles us to go into the Lobby against it.
  7.36 p.m.
  Mr. Kinley: Members who speak in this House are conscious that they have a dual duty to perform. Firstly, they have a duty to the country as a whole, and from that point of view we must consider what will be the general effect of this Bill on all the local authorities. From that point of view this is a very desirable and much needed Bill, and I am prepared to give it a general welcome. A Member's second duty is to speak as a representative of his constituency, and from that point of view my attitude towards this Bill is bound to be modified. Had I succeeded in taking part earlier in this Debate, I should have made a speech which would not have been very friendly towards my right hon. Friend, because at that point the latest news I had was that this Bill proposed to give my local authority aid to the extent of a 6d. rate on the one hand, and to take away a 10s, rate in the form of the block grant on the other. I was convinced, however, that Bootle, with all its virtues, could not be the only local authority in this situation.
  I do not think it right that any local authority which has done its best to comply with all Parliamentary requirements, and to make its area as efficient and as attractive as possible, should find itself under this Bill compelled, if it is to maintain its remaining services at their present level, to impose an additional burden upon

  1853
  its ratepayers. In our case, with the revised estimate of Government help under this Bill, there is no alternative but a heavy increase in the rates. I do not like that, and if it had come from any Government but my own, I should have objected to it very strongly indeed. I am now bound by party ties, and I hope therefore that what I say will be borne in mind, and that attention will be given to the financial position of the poorer local authorities. I hope that the Minister will examine this before the Bill becomes law.
  My local authority is a poor local authority. The backbone of our area is the dock labourer, whose basic wage is £4 125. a week. There are thousands of others in the area who are getting even less than that. From every point of view I suggest it is wrong that those with such a low income should have their local taxation increased. At present, it is almost 195. in the £, and there is the prospect of further increases in the near future. We are carrying, at the moment, a poor rate of 6s. in the £. That is the measure of our poverty. In the wiping away of the Poor Law we were justified in anticipating that we should be able to reduce our local rates by that 6s., instead of which we find that we shall now be compelled to continue to levy that amount upon our ratepayers, although it will be called part of the general rate instead of the poor rate. Through the coming into operation of this Bill we stand to lose heavily, as what we receive will be much less than the block grant.
  I should like to know why the Minister wants to juggle with the nationalised services? We have felt strongly in the past about the fact that the biggest contributors to our local rates—the Mersey Docks and Harbour Board—have had a preferential rating scheme. The railway companies and canals have a preferential rating scheme, and the gas companies and electrical undertakings also have such a scheme, and they have been able to enforce it by continuous fighting in the courts. This, eventually, gave them great privileges compared with the ordinary ratepayer and shopkeeper, who had to pay up and smile because he could not afford to fight his assessment. Instead of the railway and electrical companies being compelled to submit to a normal and reasonable assessment, and having to pay rates to the local authority upon that
  1854
  assessment, they are now taken out of our control by the Minister.
  That is unfair from this point of view: the rating authority, for certain purposes, when ascertaining the product of a penny rate, can count in the rateable value of those railway and electrical undertakings. But for other purposes, which will be decided by the Minister, the rating authority must exclude those undertakings. I would like to know why. Surely, we should be aiming at simplicity; we should be trying to make the finances of local authorities as straightforward and as simple as we can, instead of insisting upon a factor which is not only complicated in itself but remains at the caprice of the Minister.
  I should like to know on what ground the Minister wants the rateable value of these services to be calculated and why, on other occasions, the local authorities are to be permitted to exclude them? It does not make sense: it is confusing to the treasurer of a local authority, because until he has the final word from the Minister he never knows what is his actual rateable field. It is unfair that he should be left in that position. In the name of one authority which will lose by this Bill, I appeal to the Minister to look at the finances of local authorities once more, to see whether there is not a new class of local authority which has so far not been mentioned.
  Mention has been made of the borderline case, the case which receives no assistance because the authority is too well off, and the local authority which receives assistance because it is below the national standard. But no mention has yet been made of the local authority which, in spite of the assistance it will get from this Bill, will be out of pocket, and which will have to make up the difference by levying higher rates on its ratepayers. If we are to aim at equality of rating let it not be at a high level: let it be at a low level, so that the rating authorities on the lowest scale will be able to carry out their functions in a much better and more efficient manner than hitherto. Let us find some way, if not by this Bill then in some other way, of lightening the load which now presses heavily on the ratepayer who, in the vast majority of cases, is a wage earner. He is the man who has no one else to whom he can "pass the buck."

  1855
  We should be giving him assistance instead of adding to his burden, as we are doing now, and making it still more difficult for his local authority to carry out and extend their duties.
  7.48 p.m.
  Mr. Cooper-Key: I want to confine my few remarks to the two main fallacies which are inherent in this Bill, and which have not yet been dispelled. The first is the fallacy that equal burdens of rates will fall on ratepayers of equal financial status. This Bill discriminates unfairly and unreasonably between local authorities and also between ratepayers. It does not even grant a reward for honest behaviour. Those authorities who have assessed their properties under the Rating and Valuation Act, 1925, in accordance with the spirit of that Act, are penalised. In effect, the Bill says, "I know that the assessment in one of these two towns is wrong, and that they both cannot be right. I shall, however, pay the grant to the local authority which has fixed its property values low, and I shall not pay grant to the local authority which has fixed them at a higher level."
  The Minister has been pleased to divide towns into wealthy towns and poorer towns. This is 50 years out of date, so far as Hastings is concerned. Our treatment, under this Bill, does not take into consideration either our financial needs or our resources now and in the immediate future. No oratorical or mathematical gymnastics can claim that the principle of equal burden between groups of ratepayers or individual ratepayers is established by this Bill. Men whose wages are fixed nationally will bear nothing like an equal burden. It is no consolation to such a ratepayer to learn that because his authority is above the line he has to pay twice as much in rates as someone else in another part of the country has to pay for the same accommodation and amenities.
  As an example of how these variations work, here is a set of facts which bring out this point clearly. The rates now paid by the Hastings ratepayer on a three-bedroom non-parlour type of council house with rates at 14s. in the pound, is £11 18s. The rates now paid by the Walsall ratepayer, but with rates at 20s. in the pound, are £10. The rates paid
  1856
  on a similar house by the Hastings ratepayer will, after the coming into operation of the Bill, be £11 12s. 4d. In the case of the Walsall ratepayer, his rates after the operation of the Bill will, for a similar house, be £5 7s. 6d., or about half what they were before.
  Further to this fact, a general rate of 16s. 6d. in the pound for the year 1948–49 will be necessary in Hastings, against 14s. during the past year. If the Walsall level of assessment were the same as that of Hastings, our probable new rate of 16s. in the pound would represent, in Walsall, something more than 25s. in the pound, yet Walsall, on its present rate of 20s. in the pound, will receive a substantial grant while we shall receive only a transitional grant equivalent to a 6d. rate, decreasing in five years to nil. The transitional grants were presumably introduced as a partial recognition of the lack of uniformity in rating assessment, but it is a totally inadequate recognition of that fact so far as many towns in the country are concerned, including Hastings.
  In regard to the second fallacy, that of a decrease in rates, which is widely accepted in the country as the expected result of the Bill, I should like to point out that, working on the figures for 1946–47, the Minister shows a net saving on the rates of £39 million a year. He removes that burden, but for the year 1948–49, that saving is wiped out by the rising cost of wages, general inflation, the additional cost of the fire services and the working of the Education Act. The Estimates for the coming year wipe out this sum. In my constituency it has beeen necessary to increase the rates this year by 2s.
  I should like to say a final word about the points mentioned in an earlier Debate by the hon. Member for the Drake Division of Plymouth (Mr. Medland). Where towns have lost rateable value by bomb damage, I would ask the Minister that they should receive, and should continue to receive, special assistance from his Department.
  7.53 p.m.
  Brigadier Prior-Palmer: I think we are all in agreement on this side of the House upon the object of the Bill, which is equalisation of the rate burden, so that a ratepayer in one part of the country should not pay at a different level from other ratepayers because he happens

  1857
  to live in that particular place. We object to the Bill because we believe that the methods employed in it will not achieve that object. We are alive to the apparently logical arguments put forward by the Minister at various stages of the Bill, but some of us are unhappy because we think that those arguments will not prove to be valid in two or three years time.
  Equalisation of rate burdens can only be achieved under three conditions. The first is equal cost per head for the same service. The second condition is equalisation of rateable value per head. The third is uniformity of valuation for rating. In connection with equalisation for the same service, we are straightaway up against weighting for sparsity. It is clear that a sparsity of lower than 70 persons per mile would increase the cost per head of a local service. Payment of a grant for rates on credited rateable value takes no account whatever of avoidable expenditure due to extravagance or inefficiency. We consider that such a proposal is grossly unjust.
  Under the equalisation of rateable value per head, as proposed under the Bill, it is only possible to equalise up to the national average. That will leave seven counties and 28 county boroughs in England above that average. The ratepayers in the latter areas will have a less burden than the ratepayers in the grant-receiving areas. That proposal is not equitable or right. We consider that this situation should not be passed into law without being amended.
  The third condition, uniformity of valuation, cannot be achieved until 1952, until when equalisation grants will penalise highly-valued areas, and reward the low-valued areas. Is that equitable? Should that be allowed to go on for four years? I have shown some of the anomalies in the Bill, and I am convinced that in three or four years' time, as a result of the Bill, there will reign a state bordering on chaos. A vast amount of amending legislation will be needed in order to put matters right, owing to the fact that the present Bill has been prepared too hurriedly and to the fact that this is not the time for a Bill to be produced in this form.
  Now I should like to say a word about the entertainments Clause. I am in the peculiar position of representing a
  1858
  borough which has most at the advantages which are set out in the Clause, owing to a Private Bill which was put through the House of Commons somewhere about 1922. It may, therefore, be wondered why I make criticisms of the Clause. There are boroughs in the country where local interests, or vested interests if you like to call them that, such as cinemas and theatres, may be in favour of a Clause like this. That would be notably true of seaside and health resorts, because the Clause is to their advantage. When those places approach their local councillor and ask for something of this sort, that is right and proper.
  We have heard a great deal of nonsense from the other side of the House about the effect of the Clause in the rural areas. Do hon. Members opposite really think that the Bill will have the effect of erecting theatres in small villages in out-of-the-way rural areas? I shall be very surprised indeed if the Bill has that effect. If it does, I doubt whether 6d. on the rates would be enough to pay for it. I do not give place to anybody in my desire to see art made available to every person in this country at a cheap rate. I was very impressed when I was in Italy at the desire of the greater proportion of our soldiers to see good-class opera. I have seen men walk four miles in slush and snow to hear the Rome Opera Company performing in a small town rather than go to an E.N.S.A. concert in their own camp. That showed me the importance of giving far greater facilities to ballet and opera as well as to constructive films. I do not think it is right or fair that the local interests who are able to provide these amenities, and who probably would be providing them now had it not been for the war, should be compelled, against their will, to subsidise their own competition, through the rates. After all, they are the greatest ratepayers in the town.
  It would have been much better to have left the matter as it was. I admit that a certain amount of expense was incurred, but, on the other hand, it acted as a preventive against municipalities or local authorities sending to the House of Commons Bills which had not the backing of the whole of their ratepayers. That is the whole point. Unless the whole of the ratepayers are behind the scheme, it is entirely wrong to give local authorities these powers. The Minister said that

  1859
  the ratepayers could express their views at the local elections. Surely, he cannot mean that seriously? We know that a third of the council is elected every year. Possibly, certain wards in a town may have to wait three years before they are able to express their disapproval of something which the council has done. This matter should be open to a vote, as has been the case in the past in other matters, and if the whole of the area desire it, then it is right and proper. A 6d. rate is a tremendous burden for ratepayers to bear, and it is very much too high.
  Having said those few words, I propose to vote against the Third Reading of this Bill for the reasons which I have given. I do not believe it achieves its object, and I think it is a badly-drafted and badly-constructed Bill.
  8.3 p.m.
  Mr. Peter Freeman: I rise to support this Bill which I think will be of great advantage to the community as a whole, and particularly to those authorities which have no suitable entertainment such as some local authorities have. It was my own local authority, the county borough of Newport, which proposed an amendment of the law some years ago and submitted it to the Association of Municipal Authorities in order to secure the provision of reasonable entertainment for their own people. This amendment, which has been accepted by the Minister and is incorporated in the Bill, gives them these powers. Under the circumstances, it seems reasonable that they should provide suitable entertainment with a maximum rate of 6d. Their view is that if a municipal authority has the responsibility for looking after the sewers and drains, it is not unreasonable that they should have equal powers for looking after their amusements and entertainments, as this Bill provides.
  The second point to which I wish to call attention concerns Clause 2, which deals with the compensation payable between counties and county boroughs. If only this Clause had been in vogue last year, my own borough would have saved some £200,000 or £300,000 which they have recently had to pay in compensation to the Monmouth County Council as a result of a difference in the transfer of property from one to the other. Therefore, they have asked me to
  1860
  express their pleasure at the incorporation in the Bill of this Clause, which will be of very great advantage in so many directions. For those reasons, I shall have very great pleasure in supporting this Bill when we go to the Division Lobby.
  8.5 p.m.
  Mr. Oliver Poole: The Secretary of State for Scotland and I are in the rather remarkable position of having nearly two hours of Parliamentary time of which to avail ourselves. I can assure the House that I have no intention of taking my full share of that time. I wish merely to sum up the reasons which have been put forward by my right hon. and hon. Friends in opposing this Bill.
  When introducing this Bill, which one might almost call an omnibus Bill, on Second Reading, the Minister referred to it as a long and complicated Measure. This afternoon he referred to it as a very important Measure indeed. To many of us, although our acquaintance with the Bill is rather more mature than it was on the Second Reading, it still remains as he described it then. I shall deal with only that part of the Bill which relates to England and Wales. I do not know whether the Secretary of State for Scotland, when he winds up, intends to refer to this part of the Bill, or whether he will confine himself to Scotland. My hon. and gallant Friend the Member for Pollok (Commander Galbraith) has dealt with the effect of this Bill on Scotland and he referred particularly to Part II. I am looking forward to the right hon. Gentleman dealing with the question raised by the hon. Member for Dumbartonshire (Mr. McKinlay) in regard to Loch Sloy, particularly in view of the fact that Birmingham has an increase, not of £600,000, but of over £1 million, whereas Glasgow gets nothing. I am looking forward to hearing his explanation on that point.
  I would like to turn to the remarks of the hon. Member for East Islington (Mr. E. Fletcher). He said that no one on this side of the House had complained of the principles of the Bill or shown why we disagree with them. If he will read the report of those parts of the Debate which he has not heard, including speeches not only from my hon. Friends but from hon. Members opposite, he will see that there is, in fact, no very great disagreement with the objects of the Bill, nor is there

  1861
  any great disagreement with the necessity for a Measure of this sort. However, if he reads the speeches to which he was unable to listen, and particularly the speech of my hon. Friend. the Member for Thirsk and Malton (Mr. Turton), he will see that specific and definite objections have been put forward. That being the case, I am bound to say that it is quite obvious that my hon. Friends have had to rely on detailed and technical arguments which have not commended themselves to a very wide number of people, but I do not think that they can be said to be less important for all that. It must be emphasised that, in spite of the fact that at this stage of the proceedings only a small number of Members are taking part in the deliberations, it is, as the Minister said this afternoon, a most important Measure which will affect not only every local authority but, what is more important, every ratepayer in the country.
  I shall try to sum up briefly the reasons we think this Bill will fail in its objective. The Minister must realise—my hon. and gallant Friend the Member for Worthing (Brigadier Prior-Palmer) has already referred to this—that if the object of this Bill is to be achieved, three conditions are essential: first, the equalisation of costs per head for the same services; secondly, the equalisation of rateable value per head; and thirdly, the uniformity of valuation for rating. We maintain that if the provisions of the Bill are examined closely, we shall see that none of these three conditions is, in fact, achieved. We have argued this point throughout the various stages of the Bill, and the Minister, his Parliamentary Secretary and the right hon. Gentleman who is to wind up, have put forward arguments in reply. The Minister of Health, with all that forensic skill which we admire so much, was apt to sweep us off our feet during the Committee stage. However, on mature reflection, having considered the answers which we have received, I am bound to say that we still remain completely unconvinced.
  I would like to deal first with the question of the equalisation of costs per head in the same services, and I wish to emphasise the point which has already been made by my hon. and gallant Friend the Member for Worthing. The Minister has realised that sparsity of
  1862
  population has a definite effect in increasing the cost to the ratepayers. That is inherently admitted in the Bill. But he is determined that only those counties with a population of less than 70 persons per mile of road shall have the advantage of weighting. The Minister of Health supplied me recently, in answer to a Question, with certain figures which show that few counties will qualify for this weighting. There are, however, a number of counties—and Shropshire, part of which I have the honour to represent, is one—which have populations very slightly above the figure of 70, yet they will get no assistance and will have to bear the increased cost of administration over a wide area.
  The Bill also provides for the payment of grant in the form of "rates" upon "credited" rateable value. We maintain this can only have the effect of treating as identical the different sets of services provided in each area. It must be apparent to everyone experienced in these matters that these services, conducted by different local authorities, differ enormously as a result, in some cases, of extravagance, in other cases, of inefficiency, and, in many cases, of the fact that they have undertaken voluntarily additional services. Therefore, to treat them as identical seems to be unreasonable. With regard to inefficiency and extravagance, the provisions of Clause 6, which deals with disallowances by the Minister for various reasons, does not meet the case we have put forward.
  If we have made out a case, as we think we have, that the Bill does not achieve equalisation of cost per head for the same services, the same applies to equalisation of rateable value per head. The argument has been advanced that this is achieved because of the equalisation grants. The hon. and gallant Member for the Scottish Universities (Lieut.-Colonel Elliot) this afternoon made it clear that this did not take into account those authorities who do not receive grants. I think that the hon. Member for Hitchin (Mr. Asterley Jones), when he referred to this point, overlooked this aspect, that, as the hon. and gallant Member for Worthing pointed out, seven counties and 28 county boroughs in England, as well as others in Scotland, come above the national average.

  1863
  Therefore, injustice must result to the ratepayer in those areas. I emphasise the ratepayer, because, on Second Reading, the Minister of Health made play with the fact that we were referring to local authorities rather than to ratepayers. I think that the hon. and gallant Member for the Scottish Universities exploded that by saying that they are one and the same. In this case, it is, in fact, the ratepayer in these areas who will suffer. The derating of hereditaments in these areas will be borne by the local ratepayer, whereas in other areas the equalisation grant will be borne, as it should be, by the national taxpayer. The distribution of railway and electricity rate money operates unfairly against them. The abolition of the adjustment of burdens as the result of boundary alterations is illogical where non-grant receiving authorities are concerned. When we pressed that point during the Committee stage, the Minister did not feel able to meet us on it.
  Over and above the points which I have made, the provisions of the Bill come into force at once, and do not, therefore, take into account the results of the new valuation and the work of the Local Government Boundary Commission. If the Government had waited for this, the inequalities would have been less, because the Exchequer, which is paying this, would only pay equalisation up to the limit of the national average. I would ask for some explanation or justification for the capitation grant formula in Clause 9, as this does not seem to us to achieve its object or to have any logical basis behind it. It is a complicated matter, and if we can have an explanation it would be of great value.
  I think that one of the main points argued from this side and realised by every one who has followed our discussions is that whether this Measure will be a success or otherwise depends on achieving uniformity of valuation. I understand that the hon. Member for Spelthorne (Mr. Pargiter) complained that we had put up no alternatives. I regret that I was not in my place when he was speaking, because I have listened to everything he has said on this Bill with the greatest interest and respect. I suggest that if he looks back to what has been done, he will find that we have put
  1864
  forward a clear and constructive alternative. I think that you would rule me out of Order, Mr. Deputy-Speaker, if I attempted to deal with that now. Therefore, I cannot reply to the taunt of the hon. Gentleman, but I ask him to read what we have set out in other stages of the Bill.
  The Bill sets out two new methods to achieve uniformity of valuation. It lays down the procedure for the transfer of the duties of valuation from the rating authorities to the Inland Revenue officials, and also lays down a new law of valuation for dwellinghouses. The hon. Member for Thirsk and Malton has dealt fully with the first matter and the delay of the new valuation until 1952 which can only prolong the present injustice. I take the view, and I think that, on the whole, hon. Members on this side agree with me that one cannot complain against centralised valuation on principle. The fact that it is being removed from the local authority to the Board is not something to which I myself object. But I maintain, for many reasons, that the setting up of this organisation at this time, with the difficulty of obtaining suitable accommodation, and with the vast number of other centralised boards that are being created, with the difficulty of getting staff, and the transfer of staffs from local authorities to the Inland Revenue, makes this quite inopportune.
  It is to the valuation of dwellinghouses in Part IV of the Bill that we take the greatest exception. That matter was dealt with fully at the commencement of our proceedings this afternoon by the hon. and gallant Member for the Scottish Universities, and was also referred to by the hon. Member for Hastings (Mr. Cooper-Key) just now. Even if one ignores the inherent difficulty of valuation based on the hypothetical cost of construction, we find that other anomalies will arise. I maintain also that it is quite wrong that the prewar values, done away with in the sphere of compulsory purchase at the time of the Town and Country Planning Act, should be introduced for the first time into rating. That seems very difficult to explain away. In the Second Reading Debate, the Minister of Health made great play with the hypothetical tenant. We maintain that the hypothetical builder may be an even more elusive gentleman. In fact, he has not

  1865
  done away with the hypothetical tenant in spite of all his assurances to the contrary. Under Clauses 81 and 82, the hypothetical tenant still plays his part in this Bill.
  In regard to the provisions of this part of the Bill I would urge the Parliamentary Secretary to pay attention to what the hon. Member for Hitchin said. I can tell the House from my own personal experience that it is best to take notice of what the hon. Member said. I spent 18 months of the war doing that. I commend the practice to the Parliamentary Secretary. The hon. Member for Hitchin referred to this particular point, and I hope the Parliamentary Secretary will read it tomorrow. The provisions in this part of the Bill will have the effect that the valuations and rate burdens of dwellinghouses will definitely go up, and, though it will take some time before this becomes apparent, there is no doubt that the rise will be steeper than in any other hereditaments. Especially is that so with small dwellinghouses. Secondly, the occupiers of pre-1918 houses will be harshly treated. Lastly, there will also be anomalies where post-1918 houses are concerned, because some homes now valued below the £75 mark will in future be valued higher in the list than £75. I maintain that it is absolutely wrong that the definition of small dwellinghouses should be based on the present valuation lists, which we are all agreed are so unsatisfactory. I have tried to deal with our objections to the Bill, excluding Part II, with which my hon. and gallant Friend the Member for Pollok (Commander Galbraith) has dealt.
  It is, in fact, Parts III and IV to which we take the greatest exception. This is another case where we have no doubt whatever as to the sincerity or, indeed, the necessity of the Government's purpose, but once again we have examined what was produced and we say that it is greatly lacking in uniformity. Parts V, VI, VII, and VIII I intend to deal with quite briefly because it is to the first four parts that we take exception. Part V deals with the rating of transport and electricity authorities. I hope that the right hon. Gentleman who replies will answer the point that was put forward by my right hon. Friend as to why the transport and electricity authority should be relieved of rates while the new gas under-
  1866
  taking is to be rated under a different set of circumstances. That will be listened to with great interest. It is a most complex subject, and we could have spent more time discussing it in Committee. I have only two further things to say under this head. First, there is a risk that at some future date some Government may attempt to relieve the nationalised transport undertaking from rates so as to hide up their losses. The Minister of Health has assured us that this is not only improbable—which we are more or less prepared to accept—but impossible. Having given it careful consideration, I cannot see that it is impossible, and it is a point against which we should guard most strongly.
  The second point which I want to make is the effect that this Bill will have on the Railway Freights Rebate Fund. Again I do not know whether the right hon. Gentleman will be able to deal with this, but perhaps he will look at it and, see what effect this Bill will have on the fund. It is a complicated matter and I have not the time to discuss it. Someone connected with the Transport Commission, to whom I mentioned the matter, was unable to explain to me what the effect will be. If it is a matter of a simple answer, I hope to have it cleared up, for it is one of the greatest importance to industry in general.
  I said at the beginning of my remarks that this was something of an omnibus Bill, and Parts VI to VIII show that that is so. The Minister of Health and the Secretary of State for Scotland are both like conductors on an omnibus. Early in the journey they filled their bus with the usual customers, leaving a few seats vacant for casual folk along the way. Where they differed from omnibus conductors in general was that they have not taken the first comers who wanted to be picked up but only selected the good lookers on the road, leaving behind those not so attractive or those who will cause trouble on the journey. For instance, they have included in this part of the Bill a Clause dealing with entertainments and payments to local councillors. I must say I was surprised to hear the Minister of Health himself say that the payment of expenses to local councillors would help people at least to become politically articulate. The right hon. Gentleman had long service with local authorities before he came to this House, but no one would

  1867
  say that he was politically inarticulate. We welcome that provision. Then there are those in regard to war memorials, insurance benefits, the votes of members, of Co-operative Society members, and many other things that attracted the eye of the Minister, and which he included in this part of the Bill. When we suggested something of a rather troublesome nature —I could not refer to it in detail because that would be out of Order—we were informed that the bus was full up, and we must wait for another occasion before our point was met.
  I should like briefly to refer to this question of entertainments. It was dealt with at some length by the junior Burgess for Oxford University (Sir A. Herbert), my hon. Friend the Member for Sutton and Cheam (Mr. S. Marshall) and other hon. Members. We have spent a considerable amount of our time since this new Clause was introduced in discussing it. In all sincerity, I suggest that that time might well have been spent discussing other parts of this Bill. Those who have followed it carefully know that the main effect of this Bill, which is extremely important and far-reaching, is complicated because these things may or may not have the same effect when taken together.
  I was absolutely astonished—and I say this without wishing to cause controversy on either side—as I listened to the Debate and heard the Parliamentary Secretary introduce this Clause, followed by the hon. Member for North Hendon (Mrs. Ayrton Gould). One would have thought that an aesthetic elysium was going to be offered to the people, and that the new world was going to start at once. As I listened to some of my hon. Friends, some of whom feared that every rural district council was going to start State opera, I felt that they were rather exaggerating the whole thing. The fact of the matter is that this particular Clause gives a number of local authorities who want to use it, power which they could have acquired under present provisions. Owing to the present financial crisis and difficulties it will be many years before this will come into effect, and I hope in general that a proper sense of proportion will be kept in relation to this Clause.
  We on this side of the House put down a reasoned Amendment on the Second Reading of the Bill. Although the Gov-
  1868
  ernment have accepted many of our Amendments, for which not only we but the local authorities and ratepayers in general are grateful, the Minister has not accepted any Amendment which cleared up the major points that were referred to in that reasoned Amendment. As I said before it will be some time before this Bill takes effect. It may be three or four years. When that time comes what has been said in this Debate will be forgotten, but the impact of this Bill will then fall on almost every ratepayer in the country. It is because we know that when that time comes the provisions will be found to be inoperable, inadequate and unjust that we intend to divide against the Bill tonight.
  8.30 p.m.
  The Secretary of State for Scotland (Mr. Woodburn): We have had a most interesting Debate. Many of the matters which have been discussed, however, ought to have been discussed in Committee—and I have no doubt that they were discussed in Committee. It would be almost impertinence on my part to try to explain with greater clarity than I am sure the Minister explained on the Committee stage many of the points which have been raised again on Third Reading. Therefore, since most hon. Members have had very adequate replies to their detailed points, such as those raised by the hon. Member for Oswestry (Mr. O. Poole), I am quite sure they would not want me to repeat them tonight.
  After all, the problems facing this country can be reduced roughly to two great problems. The first and greatest is to produce more to distribute among the people and to create more well-being. That is a matter of production which is dealt with in other spheres of the Government's work. The second great problem facing this country—and it has faced it for many years—is that of distributing what is produced, and this Bill alters the distribution of the well-being of the country. What has struck me about the Debate today is the number of hon. Members opposite who have discovered that this Bill creates anomalies. I was at a conference at Prestwick the other day and I was surprised to hear a railwayman—of all persons—among those present raise the question of the noise the aeroplanes make. He is quite unconscious of the noise the railway engines make. Hon.

  1869
  Gentlemen opposite are quite unconscious of the anomalies which have existed; they have only discovered the ones which will exist when the Bill is passed.
  This Bill arises because there have been anomalies which have pressed hardly on the people of this country for 100 years and more. The redistribution which is to take place is not a perfect redistribution. The Minister has never claimed, and I do not claim, that this will remove all the anomalies which exist, but this Bill goes in the right direction, For that reason the Bill is justified. We plead guilty immediately to the fact that when this Bill is completed there will still be anomalies to be put right; there will still be anomalies to be put right when most of us are gone, and in two or three hundred years' time. How can it be otherwise? In Scotland people are still living in houses built in the days of Mary Queen of Scots. How can one value a house like that compared with one built last year? We should have to go over hundreds of years of history to assimilate everything into a perfect scheme without anomalies.
  The hon. Member for Thirsk and Malton (Mr. Turton) said that this was a redistribution scheme as between the wise people and the profligates. It would be very interesting to hear the opinion of some of the local authorities who are to receive assistance under this scheme of the hon. Member's description of them as profligates. Some places in Scotland will receive considerable benefits. Sutherland-shire has about 13,500 population, but its administration has to cover 1,250,000 acres, and a penny rate raises £200. With all due respect, it could not be very profligate on £200 with 1,250,000 acres to cover. On the other hand, Bognor—the hon. Member for Hastings (Mr. Cooper-Key) might have brought in this as well—has about the same population and a penny rate brings in £1,300 for a very small acreage. Ross and Cromarty, with a population of nearly 50,000, has two million acres, and a penny rate raises £350. Eastbourne, with the same population, raises £3,700 by a penny rate. The hon. Member for Thirsk and Malton has been looking at the wrong tables if he describes those people as profligates and the people of Eastbourne and Bognor as being wise and thrifty. They are the lucky people of the world, the people who in some cases have nothing to do but amuse
  1870
  themselves while the other people of the world work to keep them in Eastbourne and Bognor.
  The problem we have to face is whether these country areas—the constituency of the hon. Member for Thirsk and Malton, the Highlands, Yorkshire and other parts of the country—are to be inhabited or not. If they are to be inhabited—and they must be inhabited if even London is to subsist—the people of those areas are entitled to some of the amenities which the nation can provide. If that is so, we have to redistribute those amenities in a different way from that in which they have been distributed in the past. I remember that a discussion went on about the Charing Cross Bridge. It was pointed out that it could be economically justified because it was in London. Because London has about seven million population, it can get a bridge. If the Forth Road Bridge is under discussion, it is pointed out that it cannot be economically justified; but the point is that it can be justified socially. If the rest of the country is to exist, it must have the facilities for transport. Transport is much more necessary in cases like that than sometimes in the head office of the nation which is situated in London.
  Mr. Cook: That is the case with the Tay Road Bridge as well.
  Mr. Woodburn: Those of us who have been in industry know that the people in the office always have the most comfortable existence. If one is on the management side—and I was—one always has a much more comfortable existence than the people in the workshop. It is the same with the nation. The people in the head office—in London—get all the privileges, the advantages of the theatres, operas and everything else, and the people in the outposts have to do the suffering. This Bill is an endeavour to readjust some of the anomalies which have existed and which have passed unnoticed to a great extent by all Governments up to date. I must admit that in 1929 some attempt was made to adjust some of the difficulties which arose in connection with the unemployed. I do not want to be unjust in the slightest to those who have done something to change these things in the past.
  Among the anomalies are those of valuation. I am quite sure that after listening to the anomalies existing in England, which were described by the hon. Member for

  1871
  Thirsk and Malton, the hon. and gallant Member for Pollok (Commander Galbraith) will realise how hopeless it is to ask me to explain these anomalies or relate them to our own anomalies in Scotland. It cannot be done. I therefore do not propose to waste the time of the House tonight even in making an attempt. It is a matter which would require a far greater investigation than could possibly be carried out under the cover of a Bill of this kind. Similarly, the rating system has been condemned. Everybody has condemned the rating system, especially in Scotland, for the last 30 years; but nobody has done anything about it for the simple reason that nobody knows what to do about it. If the hon. and gallant Member for Pollok or anybody else can suggest any way which will be acceptable to the people of this country, the Government will give consideration to it. Clearly, it is not so easy to remove these anomalies, though we admit they exist. Such matters will require much more investigation and much more study, and a great deal of common consent on the part of the people before they can be removed.
  Several hon. Members have raised points about difficulties. I have always noticed that if one gives a lecture on the problems to be faced and what is to be done about them and indicates some of the difficulties, almost certainly when discussion starts people will point out more difficulties that one had not noticed. That has happened today. Everybody has pointed out all the other difficulties which the Minister is supposed to have overlooked. Believe me, if we were to list all the difficulties in the way of progress, it would require an endless and inexhaustible tabulation. Clearly, we are not concerned with all the difficulties; we are concerned about the ones we are tackling. The hon. Member for Oswestry asked whether the losses of the railways would be covered by relieving them of rates, and inherent in his talk about the losses of the railways was the suggestion that such losses would be a condemnation of nationalised railways. That was the inference, and it arises continually about losses of nationalised industries.
  Mr. O. Poole: I am not at all sure that I do not think that is so, but in my remarks there was not that inference in any way.
  Mr. Woodburn: Then there was no point in the hon. Gentleman putting forward the point.
  Mr. Poole: Yes, there was.
  Mr. Woodburn: The State can make as big a profit as it likes on the Post Office by simply raising the charges. It can make a loss by reducing the charges. It is a matter of expediency as to whether it is better to give the postal services cheaply, as a subsidy from the nation, or subsidise some of our other services by charging more dearly for the postal services—
  Commander Galbraith: Surely the right hon. Gentleman is not giving an indication that that is the intention with regard to the nationalised industries?
  Mr. Deputy-Speaker (Sir Robert Young): The right hon. Gentleman is getting out of Order, and the hon. and gallant Gentleman must not encourage him to go further.
  Mr. Woodburn: The hon. and gallant Member might have allowed me to finish my sentence. It is not a test of the efficiency of any service whether it makes a loss or a profit, because the question is not decided in that way. I recognise, Mr. Deputy-Speaker, that I am not in Order, but that point was made for the purpose of having a dig at the nationalised services.
  Mr. Poole: May I interrupt? I made no dig at nationalisation, and what I said was entirely in Order. I asked the specific question whether it would be possible to use the term "derated services" to hide losses on the part of railways
  Mr. Woodburn: The hon. Member knows the answer to his question as well as I do—
  Mr. Poole: No.
  Mr. Woodburn: —and he should not ask it.
  Mr. Poole: What is the answer?
  Mr. Woodburn: Several other hon. Members, including the hon. Member for Accrington (Mr. Scott-Elliot) asked questions in regard to the county contributions to district councils. He has had a satisfactory answer already from the Minister. It is impossible to say how the arrangement will work, because it

  1873
  will depend on how the county interprets its duty.
  The hon. and gallant Member for Pollok raised the question of the 25 per cent. and 50 per cent—or 65 per cent. as he termed it. It is not possible for me to produce any figures which would justify either the 25 per cent. or the 50 per cent. since figures could be produced which would justify either. But as he will recognise from the complications in the valuation system in England, the difference between one place and another is so great that even if, by comparing Birmingham and Glasgow, one found that an increase in the percentage was justified, one might find another comparison that led to exactly the opposite conclusion. Therefore, that matter cannot be discussed by picking out isolated instances, and it clearly requires a long investigation.
  I recognise, of course, that Glasgow is still dissatisfied on the matter. I met the Associations of Local Authorities and we discussed it, but they were not able to produce any conclusive evidence proving that the 25 per cent. was wrong, though Glasgow claimed that it did produce such figures. Needless to say, at this time it is impossible to verify these figures, and I gave Glasgow a pledge, and I give the hon. and gallant Member a pledge, that we will have these figures examined and try to make some investigation into this matter to see if we can come to a conclusion as to the relative merits of the 25 per cent. or some other percentage.
  Commander Galbraith: The right hon. Gentleman has made an important statement. As I understood it, we are taking the 25 per cent. absolutely blind—[HON. MEMBERS: "Oh."] We have no justification for it one way or the other, and, therefore, I hope that the right hon. Gentleman at an early date will make a serious examination into the position.
  Mr. Woodburn: We have not taken it blind. We inherited it from the hon. and gallant Gentleman's own party.
  Commander Galbraith: That was 27 years ago.
  Mr. Woodburn: Yes, 27 years ago, and it was never changed and it was embodied in Bills during all the period since. Therefore, since nobody on that side objected to it while it was being done, it seems rather strange that they have discovered the anomaly now.
  Commander Galbraith: Surely the right hon. Gentleman will agree that, when we have a Bill which we are told by the Minister of Health absolutely revolutionises the position between the local authorities and the Exchequer, something like this should have been looked into much more fully than it has been?
  Mr. Woodburn: There is only one reply to that. When you build a revolutionary aeroplane, you do not make a revolutionary fuselage and a revolutionary engine at the same time; you test out the engine first and then the fuselage before you combine them. You do not want too many revolutions at the same time.
  Mr. McKinlay: May I ask my right hon. Friend whether he would propose to go up in the fuselage without an engine?
  Mr. Woodburn: We may all go up in smoke some day, but we will wait until that day comes. The hon. Member for Bridgeton (Mr. Carmichael) raised a question on the payment of town councillors, but I think he rather misread the Bill in this respect. No subsistence and no fares are paid to town councillors for duties in Glasgow under this Bill.
  On the question of the distribution of rates from the Hydro-Electric Development (Scotland) Act and from the railway services and the other services, there were two points raised. I will answer first the one about gas, which was raised by the right hon. and gallant Member for the Scottish Universities (Lieut.-Colonel Elliot) and the hon. Member for Oswestry. Gas is very different from electricity and railways in this respect, that gas is largely locally manufactured and much more local in its distribution and general working, whereas railways are more concentrated, in great blocks, in cities like Glasgow, Liverpool, London, Manchester, Birmingham, and so on. That means that the rate from these is concentrated to a far greater degree than in the case of gas, which is dispersed all over the country. The same applies to the great electricity stations which will be concentrated in certain districts and, therefore, will be brought into the pool and distributed in that way.
  The question also arose whether in the case of, say, the Hydro-Electric Development (Scotland) Act counties would actually lose—
  Lieut.-Colonel Elliot: If the right hon. Gentleman is passing from the gas undertakings, surely he heard his hon. and right hon. Friends maintaining that in the case of gas they hoped to get a gas main which would run all the way down to the South Coast? Furthermore, how does he deal with the subject of the derating of the electricity shop on the one side and the rating of the gas shop, with the gas appliances, on the other?
  Mr. Woodburn: My right hon. Friend dealt with this during the Committee stage and, therefore, it is unnecessary for me to deal with it again. The answer to the question whether the distribution of the contribution made by electricity to local rates benefits the county when it is made from the pool or on the present system, is not clear until all the figures are published; but, so far as my investigations go, it will be greatly for the benefit of the counties who are getting the pooled rate. They will get more by the new system under the Bill than under the old system. Dumbartonshire, for example, have now a rateable value from the railways of £865. They have a rateable value from the electricity undertakings of £24,536, which makes a total of £25,401. At 15s. in the pound, that gives them rates of about £19,000. Under the Bill, on 1947–48 expenditure, the contributions from the railways and electricity pools will be £20,723. That is a greater sum than they are at present getting from the existing rating. In addition, the equalisation grant is another £52,736. I think that what happens in Dumbartonshire will probably happen in most other places and will bring about an advantage.
  Commander Galbraith: If the right hon. Gentleman will allow me, I asked his opinion as to what is going to happen in the North of Scotland Hydro-Electric Board's area, as definite promises were given when that Measure was passing through the House.
  Mr. Woodburn: Part of Dumbartonshire is in the area of the North of Scotland Hydro-Electric Board. It includes the Loch Sloy scheme. Although they seem to be losing, under the new Bill they will actually gain. They expected a 5½d. rate, but because there is a change, one must not assume that there is going to be a loss.
  1876
  My hon. Friend the Member for Heston and Isleworth (Mr. W. R. Williams) asked about the date of the new English valuation. That will begin to operate at a time to be determined by the Minister having regard to the speed with which the new organisation can be set up. Local experts on present valuation committees will probably be taken over, and continuity of service will be preserved. He also raised a question about an appeal, and seemed to suggest that a valuation court could appeal. Appellants can appeal, but the court itself is not a party to a case and, therefore, cannot appeal. My hon. Friend the Member for Hitchin (Mr. Asterley Jones) raised some interesting points, of which the Minister has taken note, about the cost of sites, and he will take steps to deal with them whore that is possible. [Interruption.] It is not always possible to deal with these things.
  The hon. Member for Sutton and Cheam (Mr. S. Marshall) challenged the Minister in dealing with the question of the change of people on local authorities and did not seem to understand that the coming of a new service such as entertainments would bring new types of people into the county councils. Quite obviously he has not realised the great change which has taken place in county councils and town councils over the last few years. The history of local authorities is that of the growth from the Poor Law of 100 and more years ago, and it has been steadily changing from a Poor Law administration into a constructive organisation of society.
  At first the Poor Law was its main activity. It was dealing with the effects of disease, crime, dirt and insanitary conditions. People who went on to the local authorities in those days had the one main purpose of keeping down the rates. They went on to local authorities to negative anything that would increase the rates; but they found that one of the causes of high rates was that people died of epidemics, and to prevent epidemics they had to isolate people in hospitals. So hospitals were established to deal with smallpox and other infectious diseases. They also found that if the wage-earner died, frequently the whole family came on to the rates, and they had to investigate the causes of epidemics which they found arose from dirt and insanitary conditions. So we had the development of

  1877
  the sanitary service in order to keep down the rates. We even got street lighting to keep down crime. Policemen and all kinds of services have come from the fact that people went on to the local authorities to do nothing but keep down the rates. The whole history of local government and the development of these services can be traced to that one factor, and I challenge anyone to show anything different.
  There was a gradual change. What is most interesting is that the people who went on to these local authorities to keep down the rates often became enthusiastic municipal and local government administrators. My predecessor, my right hon. Friend the Member for Stirling and Falkirk Burghs (Mr. Westwood), when he was on the Fife County Council, was considered to be a revolutionary so far as extravagance in education was concerned. The farmers on one occasion sent a man, whom I came to know in later years, on to the county council to keep down the extravagance of my right hon. Friend. After he became a member of the council he became even more enthusiastic about education than was my right hon. Friend.
  In Glasgow, where people went on to the local authority to keep down the rates, there was a development of municipal enterprise that anticipated all the entertainments Clauses of this Bill. Many years ago they pioneered the provision of clinics and of entertainments in the parks. I can remember over 40 years ago free entertainments in the parks in Glasgow provided by theatrical companies of various kinds. Many people, once they got on to the local authorities, became enthusiastic, and the idea of public service in this country has to a large extent grown up under that beneficent development. Hastings and Southport have shown a development of municipal Socialism that is envied by many other places throughout the country.
  This Bill has reached its final stage in this House, and we propose to send it on its way. It recognises the fact that it is socially desirable that all parts of the country should be inhabited, and that therefore the amenities of life which people are to enjoy should depend upon the standards which we can afford as a nation, and not upon those which a locality in itself can afford. Economic justifications would bring nearly the whole
  1878
  of industry to London and its vicinity. Prior to the war the drift to London from Scotland and the northern counties of England was fast becoming a menace both to the security and well being of this country.
  This Bill is a further step towards the ideal of planning our national life according to our best intelligence instead of leaving ourselves to the mercy of economic momentum. Local government in this country developed mainly, as I have said, out of its responsibilities in administering the Poor Law. As in the case of war with external enemies, so in the war against disease, poverty and insecurity, the nation as a whole is accepting responsibility for looking after the casualties. More and more the central Government of this country is undertaking to look after the casualties of the country in respect of industry, disease and of other defects in our civilisation.
  The local authorities are now being given back responsibility for the constructive side of life. The change taking place is that, instead of being merely an ambulance man, the local authorities are now becoming a constructive part of the nation, building up the social life of the people and developing the well being of the community as a whole. What are their duties? They now have to plan development; they provide healthy homes; they care for the children; they prevent disease by sanitation and clean food; they prevent crime. Even the police have changed from dealing with crime to safeguarding children crossing the streets, and are responsible for traffic direction, and do so many of the things which are part of a well-run community. Local authorities deal with education, from babycraft to citizenship; and here, of course, the great mistake in this matter of theatricals or entertainments is to fail to recognise the development that has taken place and the fact that education does not stop now in the 14th or 15th year, but goes on through the whole of life.
  Every one of these subjects, the drama, music and culture, is now a part of the national education, and the Clause which we have inserted in the Bill is no more than an understanding of the difficulties of local authorities in trying to carry education right through a person's life. Therefore, as regards amenities, parks, concerts and all the culture that we can think of are

  1879
  now within the power of the local authority to provide for the population.
  They also have the care of the aged, and we are giving them the opportunity of guiding and directing their people to a wider and fuller life. Here is a great field for the creative development of local initiative, good will and the creative genius of our people. It is a travesty to suggest that local government is being robbed of its interest by these changes. Actually, it is being given a better interest than ever it had before, and, therefore, I say to the hon. Member for Sutton and Cheam that it will bring in different people and people who are not chosen with a view to trying to keep down the well-being of the community, but people who will come in and utilise the powers of the local authorities to develop all sides of the community nearer to the hearts' desire. Today, that is impossible, because, to some extent, our country is divided into agricultural and industrial areas, into civic areas like
  London and country areas like the North of Scotland. Therefore, only a small step can be taken to try to level up these inequalities, but this Bill takes very great power to relieve the people who are the hard workers of the country from the difficulties which they have had to face because of the inequalities in municipal and local government enterprise.
  It is a proud day for this Government to see this Bill pass on to the Statute Book, and I hope hon. Members will rise above their petty feelings about the rates and little anomalies, and will realise, as one of my hon. Friends has said, that this is not one Clause about entertainments but a great Bill that is redistributing our well being in a way that can be justified to every honest and decent citizen. I therefore ask the House to pass the Bill.
  Question put, "That the Bill be now read the Third time."
  The House divided: Ayes, 250; Noes, 94.

  Division No. 89.]

  AYES.

  [9.4 p.m.

  Adams, Richard (Balham)

  Collindridge, F.

  Griffiths, D. (Rother Valley)

  Allen, Scholefield (Crewe)

  Collins, V. J.

  Guest, Dr. L. Haden

  Alpass, J. H.

  Colman, Miss G. M.

  Guy, W. H.

  Anderson, A. (Motherwell)

  Comyns, Dr. L.

  Haire, John E. (Wycombe)

  Attewell, H. C.

  Cook, T. F.

  Hale, Leslie

  Austin, H. Lewis

  Cooper, Wing-Comdr. G.

  Hamilton, Lieut.-Col. R

  Ayrton Gould, Mrs. B.

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

  Hannan, W. (Maryhill)

  Bacon, Miss A

  Corlett, Dr. J.

  Hardy, E. A.

  Baird, J.

  Daines, P.

  Harrison, J.

  Balfour, A.

  Davies, Harold (Leek)

  Hastings, Dr. Somerville

  Barstow, P. G.

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

  Haworth, J.

  Battley, J. R.

  Davies, S. O. (Merthyr)

  Henderson, Joseph (Ardwick)

  Bechervaise, A. E.

  Deer, G.

  Herbison, Miss M.

  Benson, G.

  de Freitas, Geoffrey

  Hewitson, Capt. M

  Berry, H.

  Delargy, H. J.

  Hobson, C. R.

  Beswick, F.

  Diamond, J.

  Holman, P.

  Bevan, Rt. Hon. A. (Ebbw Vale)

  Dobbie, W.

  Holmes, H. E. (Hemsworth)

  Binns, J.

  Dodds, N. N.

  House, G.

  Blackburn, A. R.

  Driberg, T. E. N.

  Hoy, J.

  Blyton, W. R.

  Dumpleton, C. W.

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

  Boardman, H.

  Dye, S.

  Hughes, Emrys (S. Ayr)

  Bottomley, A. G.

  Ede, Rt. Hon. J. C.

  Hughes, Hector (Aberdeen, N.)

  Bowden, Flg.-Offr. H. W.

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

  Hynd, H. (Hackney, C.)

  Bowen, R.

  Edwards, John (Blackburn)

  Irving, W. J. (Tottenham, N.)

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

  Edwards, N. (Caerphilly)

  Jeger, G. (Winchester)

  Braddock, T. (Mitcham)

  Evans, Albert (Islington, W.)

  Jones, D. T. (Hartlepool)

  Bramall, E. A.

  Evans, E. (Lowestoft)

  Jones, Elwyn (Plaistow)

  Brook, D. (Halifax)

  Evans, S. N. (Wednesbury)

  Jones, P. Asterley (Hitchin)

  Brooks, T. J. (Rothwell)

  Ewart, R.

  Keenan, W.

  Brown, George (Belper)

  Farthing, W. J.

  Kenyon, C.

  Brown, T. J. (Ince)

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

  Key, G. W.

  Bruce, Maj. D. W. T.

  Follick, M.

  King, E. M.

  Buchanan, Rt. Hon. G.

  Forman, J. C.

  Kinghorn, Sqn.-Ldr. E.

  Burden, T. W.

  Freeman, Peter (Newport)

  Kinley, J.

  Burke, W. A.

  Gaitskell, Rt. Hon. H. T. N.

  Lawson, Rt. Hon. J. J.

  Carmichael, James

  George, Lady M. Lloyd (Anglesey)

  Lee, F. (Hulme)

  Chamberlain, R. A.

  Gibbins, J.

  Leslie, J. R.

  Champion, A. J.

  Gibson, C. W.

  Levy, B. W.

  Chater, D.

  Gilzean, A.

  Lewis, A. W. J. (Upton)

  Chetwynd, G. R.

  Glanville, J. E. (Consett)

  Lewis, T. (Southampton)

  Cluse, W. S.

  Gooch, E. G.

  Lindgren, G. S.

  Cobb, F. A.

  Greenwood, A. W. J. (Heywood)

  Lipton, Lt.-Col. M.

  Cocks, F. S.

  Grenfell, D. R.

  Longden, F.

  Coldrick, W.

  Grey, C. F.

  Lyne, A. W.

  Collick, P.

  Grierson, E.

  McAdam, W.

  McEntee, V. La T.

  Porter, E. (Warrington)

  Taylor, R. J. (Morpeth)

  McGhee, H. G.

  Porter, G. (Leeds)

  Taylor, Dr. S. (Barnet)

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

  Price, M. Philips

  Thomas, D. E. (Aberdare)

  McKinlay, A. S.

  Pritt, D. N.

  Thomas, Ivor (Keighley)

  Maclean, N. (Govan)

  Proctor, W. T.

  Thomas, I. O. (Wrekin)

  McLeavy, F.

  Pryde, D. J.

  Thomas, John R. (Dover)

  MacMillan, M. K. (Western Isles)

  Pursey, Cmdr. H.

  Thomas, George (Cardiff)

  Macpherson, T. (Romford)

  Randall, H. E.

  Thorneycroft, Harry (Clayton)

  Mallalieu, J. P. W.

  Ranger, J.

  Thurtle, Ernest

  Mann, Mrs. J.

  Rankin, J.

  Timmons, J.

  Manning, C. (Camberwell, N.)

  Reeves, J.

  Titterington, M. F.

  Manning, Mrs. L. (Epping)

  Reid, T. (Swindon)

  Tolley, L.

  Marshall, F. (Brightside)

  Richards, R.

  Tomlinson, Rt. Hon. G.

  Mathers, Rt. Hon. George

  Ridealgh, Mrs. M

  Ungood-Thomas, L.

  Middleton, Mrs. L

  Robens, A.

  Vernon, Maj. W. F.

  Mikardo, Ian

  Roberts, Goronwy (Caernarvonshire)

  Walkden, E.

  Mitchison, G. R.

  Roberts, W. (Cumberland, N.)

  Walker, G. H.

  Moody, A. S.

  Robertson, J. J. (Berwick)

  Warbey, W. N.

  Morgan, Dr. H. B.

  Rogers, G. H. R.

  Watkins, T. E.

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

  Sargood, R.

  Watson, W. M.

  Morris, P. (Swansea, W.)

  Scott-Elliot, W.

  Webb, M. (Bradford, C.)

  Moyle, A.

  Sharp, Granville

  Wells, W. T. (Walsall)

  Murray, J. D.

  Shawcross, C. N. (Widnes)

  West, D. G.

  Nally, W.

  Shurmer, P.

  Wheatley, John (Edinburgh, E.)

  Neal, H. (Claycross)

  Silverman, S. S. (Nelson)

  Whiteley, Rt. Hon. W.

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

  Simmons, C. J.

  Wigg, George

  Oldfield, W. H.

  Skinnard, F. W.

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

  Oliver, G. H.

  Smith, C. (Colchester)

  Wilkins, W. A.

  Orbach, M.

  Smith, Ellis (Stoke)

  Willey, F. T. (Sutherland)

  Paget, R. T.

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

  Williams, D. J. (Neath)

  Paling, Rt. Hon. Wilfred (Wentworth)

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

  Williams, J. L. (Kelvingrove)

  Paling, Will T. (Dewsbury)

  Soskice, Sir Frank

  Williams, W. R. (Heston)

  Palmer, A. M. F.

  Stamford, W.

  Willis, E.

  Pargiter, G. A.

  Steele, T.

  Wilson, Rt. Hon. J. H.

  Parker, J.

  Stewart, Michael (Fulham, E.)

  Woodburn, A.

  Parkin, B. T.

  Stross, Dr. B.

  Paton, Mrs. F. (Rushcliffe)

  Swingler, S.

  TELLERS FOR THE AYES:

  Paton, J. (Norwich)

  Sylvester, G. O.

  Mr. Popplewell and

  Pearson, A.

  Symonds, A. L.

  Mr. G. Wallace.

  Perrins, W.

  Taylor, H. B. (Mansfield)

  NOES.

  Agnew, Cmdr. P. G.

  Jarvis, Sir J.

  Raikes, H. V.

  Baldwin, A. E.

  Jeffreys, General Sir G

  Ramsay, Maj. S.

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

  Jennings, R.

  Roberts, P. G. (Ecclesall)

  Bower, N.

  Joynson-Hicks, Hon. L W

  Ropner, Col. L.

  Boyd-Carpenter, J. A.

  Keeling, E. H.

  Scott, Lord W.

  Bromley-Davenport, Lt.-Col. W.

  Kerr, Sir J. Graham

  Shephard, S. (Newark)

  Buchan-Hepburn, P. G. T.

  Lambert, Hon. G.

  Shepherd, W. S. (Bucklow)

  Carson, E.

  Lancaster, Col. C. G.

  Smiles, Lt.-Col. Sir W.

  Challen, C.

  Langford-Holt, J.

  Snadden, W. M.

  Channon, H.

  Law, Rt. Hon. R. K.

  Spence, H. R.

  Clifton-Browne, Lt.-Col. G.

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

  Stoddart-Scott, Col. M.

  Conant, Maj. R. J. E.

  Lennox-Boyd, A. T.

  Strauss, H. G. (English Universities)

  Cooper-Key, E. M.

  Lloyd, Selwyn (Wirral)

  Sutcliffe, H.

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

  Low, A. R. W.

  Taylor, C. S. (Eastbourne)

  Crosthwaite-Eyre, Col. O. E.

  Lucas-Tooth, Sir H.

  Teeling, William

  Crowder, Capt. John E.

  MacAndrew, Col. Sir C.

  Thomas, J. P. L. (Hereford)

  Cuthbert, W. N.

  Macdonald, Sir P. (I. of Wight)

  Thorp, Brigadier, R. A. F.

  Davidson, Viscountess

  Maitland, Comdr. J. W.

  Touche, G. C.

  Digby, S. W.

  Manningham-Buller, R. E.

  Turton, R. H.

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

  Marples, A. E.

  Vane, W. M. F.

  Drayson, G. B.

  Marshall, D. (Bodmin)

  Wakefield, Sir W. W.

  Dugdale, Maj. Sir T. (Richmond)

  Molson, A. H. E.

  Walker-Smith, D.

  Duthie, W. S.

  Mott-Radclyffe, C. E.

  Wheatley, Colonel M. J. (Dorset, E.)

  Elliot, Lieut.-Col., Rt. Hon. W.

  Neill, W. F. (Belfast, N.)

  White, J. B. (Canterbury)

  Fleming, Sqn.-Ldr. E. L.

  Neven-Spence, Sir B.

  Williams, Gerald (Tonbridge)

  Galbraith, Cmdr. T. D.

  Odey, G. W.

  Willoughby de Eresby, Lord

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

  Orr-Ewing, I. L

  York, C.

  Grimston, R. V.

  Osborne, C.

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

  Hannon, Sir P. (Moseley)

  Pickthorn, K.

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

  Poole, O. B. S. (Oswestry)

  TELLERS FOR THE NOES:

  Hope, Lord J.

  Prescott, Stanley

  Mr. Studholme and

  Hurd, A.

  Price-White, Lt.-Col. D.

  Brigadier Mackeson.

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

  Prior-Palmer, Brig. O.

  Question put, and agreed to.

  Bill accordingly read the Third time, and passed.

  WATER BILL [Lords]
  Considered in Committee [Progress, 20th February].
  [Major MILNER in the Chair]
  Clause 2 ordered to stand part of the Bill.

  WATER BILL [Lords]

    CLAUSE 3.—(Compulsory acquisition of land by new undertakers.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    The Parliamentary Secretary to the Ministry of Health (Mr. John Edwards): I think it was understood, Major Milner, when we were talking about a series of Amendments, including the new Clause which my right hon. Friend put down, that it would be convenient to take formally this Motion and to negative it.
    Question put, and negatived.

    CLAUSE 4.—(Supply of water in bulk.)
    Amendment made: In page 4, line 33, leave out "authorising or requiring," and insert "may authorise or require."—[Mr. Edwards.]
    Clause, as amended, ordered to stand part of the Bill.

    CLAUSE 5.—(Amendments of s. 14 of principal Act.)
    9.15 p.m.
    Mr. J. Edwards: I beg to move, in page 5, line 36, at the end, to add:
    "(4) Subsection (10) of the said Section fourteen shall have effect as if after the word 'recoverable' there were inserted the word 'summarily'."
    Under Section 14 of the Water Act expenses which may be incurred by a local authority or statutory water undertaker with the authority of the court in taking steps, in default of the person ordered by a court of summary jurisdiction to do so, to prevent underground water from running to waste, are recoverable by county court proceedings. This Amendment will enable expenses to be recovered summarily and brings this Clause into line with similar powers in other sections of the Act.
    Mr. Manningham-Buller: I want to ask why it is thought that a police court would be a better tribunal than a county court for the speedy recovery of these expenses. I should have thought
    1884
    that, under procedure which can be adopted in the county court, that was the better tribunal before which to bring this matter, particularly having regard to the fact that the order will have been made by that court in the first place. If the Parliamentary Secretary can explain why it is thought better to transfer this matter, which is more in the nature of a civil matter than a criminal matter, to what are normally criminal courts, I should be grateful.
    Mr. J. Edwards: The fact that this would go to a court of summary jurisdiction would not in any way mean that it would cease to be a civil matter. The court of summary jurisdiction is the court which will have given the order. I think there are some advantages for proceedings for the recovery of any monies involved to be taken in the same court. In other Sections of the Act, at Section 17 (3), Section 41 (3), and at Section 64 (2) of the Third Schedule to the Act, the form of words is exactly the same as the form of words I now ask the Committee to accept. I hope, therefore, that this Amendment will be allowed, because I think it is on the whole better that we should have uniformity of practice in the recovery of monies, and that we should use the same form here as we have already used in the Sections to which I have referred.
    Amendment agreed to.
    Clause 5, as amended, ordered to stand part of the Bill.
    Clause 6 ordered to stand part of the Bill.

    CLAUSE 7.—(Amendment of definition of "communication pipe," etc.)
    Mr. J. Edwards: I beg to move, in page 7, line 42, to leave out Subsection (5).
    This Amendment is purely drafting. The provision as set out here has been transferred and appears in a subsequent Amendment.
    Amendment agreed to.
    Clause 7, as amended, ordered to stand part of the Bill.

    CLAUSE 8.—(Amendment of Public Health Act, 1936, s. 127.)
    Mr. J. Edwards: I beg to move, in page 8, line 1, at the beginning, to insert:
    "(1) Where, under Subsection (3) of Section one hundred and sixteen of the Public Health Act, 1936, the Minister approves the construction by a local authority of works for taking

    1885
    or intercepting water, he may by order (to be made by statutory instrument) impose on that authority such restrictions or obligations as appear to him to be expedient for the purpose of or in connection with the carrying out of those works."
    The Minister has found it necessary, in giving his consent under Section 116 (3) of the Act of 1936, to works by a local authority for the extraction of water from underground, to impose conditions for the protection of existing wells and bores. At the present time, effect can be given to these conditions only by a rather troublesome procedure requiring the local authority to enter into agreements with each of the owners concerned. This Amendment would enable the Minister in such circumstances to make an order which would have a binding effect on the local authority. The procedure in this respect will conform with the procedure when the construction of works is authorised by an order under Section 23 of the Water Act.
    Mr. Manningham-Buller: This Amendment improves the Bill, and I am glad to get the indication that the Minister will have regard to the importance of preserving supplies in wells which are so widely relied upon in different parts of the countryside. I hope that the taking of this power will mean that he will have great regard to the effect of pumping on lowering the water-table in different parts of the country. I am sure the hon. Member for West Woolwich (Mr. Berry) will confirm the view I express, that no doubt a great deal has happened in that way in the lowering of the water-table in different parts of the country, which, in its turn, has placed a greater demand for water upon the shoulders of the statutory water undertakers, so that there has been a more or less vicious circle. I hope that the taking of this power means that the Minister of Health will have great regard to that particular matter.
    Mr. Berry: I join with the hon. and learned Member for Daventry (Mr. Manningham-Buller) in welcoming this Subsection, because it will have the effect he mentioned. At present, the lowering of the water-table in certain parts of the country is most serious. For instance, the position in East Anglia is giving some of us quite a headache. I am hopeful that this Subsection will indicate a further extension of the trend the
    1886
    Minister has been carrying on for some time.
    Amendment agreed to.
    Mr. J. Edwards: I beg to move, in page 8, line 4, at the end, to insert:
    "who supply water under that Act."
    Mr. Manningham-Buller: I rise merely to point out that the grammar does not now seem correct. Is it right to say,
    "a local authority who supply water"?
    Should it not be "a local authority which supplies"? If it should be the latter, I suggest that the Amendment be moved in that form.
    Mr. Edwards: That point had not escaped me. I will look into the matter further. I understand it is possible to treat the word "authority" as a collective noun, and that, therefore, it is grammatically correct. If I find that, in fact, the usage of lawyers does not conform with what I now say I will put it right.
    Mr. Manningham-Buller: That does not deal with my point, because it is "a local authority," and the Amendment commences, "who supply." If it is "local authorities" it is right to say "who supply"; but if it is "a local authority," surely the verb should be "supplies."
    Mr. Edwards: Let me make the point clear. If we are using the word "authority" as if it were "it," the hon. and learned Member is right; but if we are using the word "authority" in a collective sense, and we really mean "they," then as it stands the grammar would be correct. This is really a matter for lawyers, and I will take advice on it. This morning I did notice this very point and examined it.
    Mr. Pritt: Surely the hon. and learned Member for Daventry (Mr. Manningham-Buller) has often opened a case by saying, "My clients are a company who supply"?
    Amendment agreed to.
    Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."
    Mr. Joynson-Hicks: Why should it have occurred to anyone to insert in this Clause—which apparently deals only with providing local authorities with

    1887
    power to make a charge otherwise than by meter for the supply of water to premises which are used as a house—the far wider powers, which are designed to deal with the maintenance of the water-table at an appropriate level underneath the whole country? It occurs to me that the Amendments made to this Clause—admirable though they seem to be in themselves—would probably have been far more appropriate somewhere else. I cannot see the connection between the Amendments made and the Clause itself.
    Mr. J. Edwards: The answer is quite simple. We are concerned here with amendments to the Public Health Act, 1936. They are put together from that point of view, and the side heading covers both.
    Clause, as amended, ordered to stand part of the Bill.
    Clause 9 ordered to stand part of the Bill.

    CLAUSE 10.—(Miscellaneous provisions.)
    Mr. Edwards: I beg to move, in page 8, line 33, at the end, to insert:
    "(3) Section thirty-seven of the principal Act (which requires statutory water undertakers to provide a domestic supply for new buildings) shall have effect as if references therein to the laying or providing of mains included references to the construction of service reservoirs."
    Doubts have been expressed whether the obligation imposed by this Clause on water undertakers to lay mains in advance of development might not also require them to provide service reservoirs, without additional payment by the developers towards the costs. This was never the intention, and the object of this Amendment is to remove any doubts about the matter.
    Amendment agreed to.
    Mr. Edwards: I beg to move, in page 8, line 34, at the beginning, to insert:
    "Subsection (6) of Section nine of the principal Act (which precludes the constitution under that Section of any joint board which could be constituted under Section six of the Public Health Act, 1936) and."
    This is a continuation of what will be effected by Clause 2 of the Bill. It provides that an order establishing a joint board of local authorities supplying water under the 1936 Act must be made under Section 6 of that Act. If the joint board
    1888
    also requires powers for compulsory acquisition of water rights, an order under Section 26 of the Water Act, 1945, is also necessary. It means two stages and two separate orders. This will enable the Minister to make an order under Section g of the Water Act, and to use the powers in Clause 2 of this Bill for combining the two stages by one order.
    Amendment agreed to.
    Mr. Edwards: I beg to move, in page 8, line 44, at the end, to add:
    "(5) In accordance with the foregoing provisions of this Act, Section twenty-three of the principal Act shall have effect subject to the following amendments:

    (a) at the beginning of paragraph (i) of the proviso to Subsection (1), there shall be inserted the words 'except as otherwise provided by the Water Act, 1948,' and the words 'land or,' in that paragraph shall be omitted;

    (b) in Subsection (2) the words 'other than paragraph 8,' shall be omitted and at the end of the Subsection there shall be added the following proviso:

    'Provided that paragraph 8 of that Schedule shall not apply except in the cases provided by the Water Act, 1948'."
    This Amendment is purely drafting, except for the last words in paragraph (a). These words relate to the new Clause, and I think it might be convenient to take the discussion on that new Clause.
    Mr. Manningham-Buller: I am not quite certain that I understand what the Parliamentary Secretary has said in regard to paragraph (a). As I read it, the effect will be that the proviso to Section 23 (1) of the 1945 Act will not apply so as to prevent the reduction of compensation water where this Bill expressly provides that under the 1945 Act no order can be made varying the amount of compensation water. The effect of this Amendment is that such an order can be made in the cases provided for by this Bill. I do not see any provision for varying compensation water, nor do I observe any Clause upon the Order Paper by which the right hon. Gentleman takes powers to do that. I must confess that, having read this through several times, I have not observed any provisions giving the right hon. Gentleman the power to do the very thing which I opposed last Friday in connection with an Amendment moved by the hon. Member for West Woolwich (Mr. Berry). That was by order to vary the amount of the compensation water which would be allowed to flow

    1889
    down the rivers. I think it would be convenient if we had an explanation from the right hon. Gentleman of what is meant by the words:
    "except as otherwise provided by the Water Act, 1948."
    The second part of the Amendment seems to be quite unobjectionable and quite clear in its significance.
    9.30 p.m.
    Mr. J. Edwards: I think that the hon. and learned Gentleman has taken us further than we need go on this matter. Perhaps, if I explained it as I see it, the hon. and learned Gentleman will ask me again if I have not made myself plain. Paragraph (a) raises further consideration of the proviso to Section 23 (1) of the main Act which provides, among other things, that an order under paragraph (a) of that Subsection shall not empower the applicants to acquire compulsorily any land or water rights. Clause 2 of the Bill, on the other hand, provides that an order under Section 23 (1, a) may—I emphasise may—authorise the compulsory acquisition of water rights in certain cases, namely, where an order is made on the application of persons who are not already statutory water undertakers who are constituted as such by the order. Accordingly, it is no longer true without qualification that an order under Section 23 cannot authorise the compulsory acquisition of water rights. The words:
    "Except as otherwise provided by the Water Act, 1948"—
    are included in order to avoid that apparent conflict. That explanation, although it may seem involved, amounts to the fact that this is a drafting Amendment consequential on our having adopted Clause 2.
    Mr. Manningham-Buller: I am grateful to the Parliamentary Secretary for that explanation. It has made quite clear to me the object of the insertion of these words, but as the proviso to Section 23 (1) of the 1945 Act will now run, it is possible to interpret that proviso as if the words
    "except as otherwise provided by the Water Act, 1948"
    also cover part of the proviso which deals not with the acquisition of water rights but the variation and compulsory variation of the quantity of compensation water. As a matter of arrangement it is
    1890
    open to that possible view. It is clear from what the hon. Gentleman has said that so far there is nothing in this Bill or on the Order Paper in the right hon. Gentleman's name whereby he does take power to reduce the amount of compensation water compulsorily. In those circumstances, while I hope the hon. Gentleman will have another look at the wording to avoid the possibility of confusion, I need say no more with regard to this Amendment.
    Amendment agreed to.
    Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."
    Mr. Manningham-Buller: Could the hon. Gentleman give us some explanation of Subsection (1) of this Clause, which provides that:
    "Every statutory water undertaker, not being a local authority or a joint committee or joint board appointed jointly by two or more local authorities, shall make to the Minister such reports and returns and give him such information with respect to their functions as he may require, or as may be required by either House of Parliament."
    I can well understand it being expressly provided that statutory undertakers should make such returns and reports as are required by the House of Commons, but this Clause, as drafted appears to me to go further than that, and to say that every statutory water undertaking shall be under the obligation to give the Minister such information as may be required by either House of Parliament. It is not impossible, if this Clause goes into the Bill, to say that the right hon. Gentleman the Minister of Health will be under an obligation to answer any Questions which are put to him in this House with regard to statutory water undertakings. In my view, these words about giving him such information as may be required by either House of Parliament cannot be confined to reports and returns that are already dealt with in the earlier part of this Subsection.
    Therefore, if the last part of this Clause has any meaning at all, it has a meaning which I welcome, and which is a departure from the attitude of the Government with regard to the Transport Act and other Measures relating to the nationalised industries. Its meaning is that the Minister is undertaking the

    1891
    responsibility of answering such Questions as may appear on the Order Paper with regard to the functions of water undertakings. I hope the Parliamentary Secretary will be able to confirm the view I have advanced as to the meaning of these words. If I am wrong, I hope he will explain to the Committee what they are intended to mean and to what, in fact, they apply.
    Mr. J. Edwards: Once again the hon. and learned Gentleman the Member for Daventry (Mr. Manningham-Buller) has taken us for a longer ride than we need go. I am not tonight going to enter into discussions about the extent to which Ministers of the Crown should be answerable for public utilities, and it would be foolish of me to follow him up that garden path. All that this new Clause does is to fill up one or two gaps and make workable provisions that we have had previously. There is no matter of principle raised here so far as I am aware. This particular Clause is exactly the same as one which we have in the Local Government Act, 1933, from which it has been taken.
    Mr. Manningham-Buller: Would the hon. Gentleman seek to answer the question I put to him in all seriousness? As this Subsection commences by dealing with the making of reports and returns, obviously the last part means something in addition to that. If the reports and returns required by either House of Parliament are put on one side, what is the object of putting in this Clause the words after "reports and returns"
    "such information with respect to their functions … as may be required by either House of Parliament."
    Before we part from this Clause, we ought to be given an indication by the hon. Gentleman as to what those words are intended to cover. Are they entirely meaningless, or are they intended to mean what I suggest is their natural meaning—that the Minister of Health should answer questions? We should not be left in doubt about this, and I must press the Parliamentary Secretary to try to meet the point and explain what is the meaning and purpose of putting in these words in addition to "reports and returns".
    Mr. J. Edwards: I do not think it is any part of my business tonight to start
    1892
    talking about what questions the Minister of Health will answer in this House. These words are perfectly fair. They say what they mean—that the water undertakings herein referred to must give the Minister such information as to their functions as he asks for, and any information that may be required by either House of Parliament. That is perfectly clear, but I do not think that on the basis of that I should then be led into a discussion as to the extent to which my right hon. Friend will answer Questions in the House.
    Major Legge-Bourke: This raises a very important matter of principle. So far as I can understand it, any information required by the House of Commons might quite easily relate to day-to-day administration. The Parliamentary Secretary ought to be able to say tonight whether, if we put down Questions asking the Minister of Health how these undertakings are carrying on their business of day-to-day administration, he will be prepared to answer or not. I also hope the Parliamentary Secretary will tell us what he meant when he said earlier that this Clause of the Bill was designed to cover one or two gaps which had been noticed arising out of a previous Local Government Act. Would he say what those gaps are and exactly how this Clause covers them?
    Mr. Joynson-Hicks: I have every sympathy with the Parliamentary Secretary who quite obviously does not want to reply to the question put to him, but it is up to him to explain his own Bill. He has not given the Committee a satisfactory explanation of what these words really mean or are intended to cover. As I see it, where there are statutory water undertakers who are required to give whatever information the Houses of Parliament require, that requirement can only be met by the statutory water undertakers through the Minister. If it is made through the Minister, why should he have in addition a special power provided in the Subsection for him to obtain such information as he may himself require?
    What is this diversity of information which may be required either by the Minister on the one hand or by the Houses of Parliament on the other? Why should it be necessary to have this double channel by which information can be extracted from the statutory water undertakers in

    1893
    addition to their regular routine reports and returns? Surely there must be some meaning in it, even if the hon. Gentleman does not want to commit himself to say whether it enables him to accept responsibility to Parliament for the policy as well as the administration of the statutory water undertakers? There must be some other reason for which he is taking this rather exceptional power to obtain information in three different ways—the reports and returns, information which he himself may require, and information which the Houses of Parliament may require. I do not recall having seen so wide a provision in any other statutory enactment, although I may well be wrong there, but surely there must be some explanation, and the hon. Gentleman has not yet given it to the Committee.
    Mr. Berry: I am a shade impressed by the somewhat contradictory attitude of hon. Members opposite. While I have been sitting here listening to them, I have been reminded of the old words:
    "We have piped unto you, and ye have not danced; we have mourned unto you, and ye have not lamented."
    They have criticised when a Minister would not give them information. Under this Bill the Minister of Health appears to have a perfect thirst for information, quite legitimately, to enable him and his Department to deal with the insatiable appetite of hon. Members for information, and yet they are now complaining of that—
    Mr. Manningham-Buller: No.
    9.45 p.m.
    Mr. Berry: The hon. and learned Member for Daventry (Mr. Manningham-Buller) may not complain in that way, but other hon. Members do. If the Minister of Health has this thirst for information which will be of service to his Department and enable it to function properly, as well as satisfying the insatiable appetites of hon. Members, I do not see why they should quarrel about it at this time of night, unless it is the phase which comes over us at a quarter to ten in the evening when we want to be a bit facetious.
    Mr. J. Edwards: I still feel that to pursue the point as to the particular category of questions which the Minister of Health will answer on this matter does not get us anywhere. I do not need to
    1894
    tell hon. Members of the wide powers which the Minister of Health has in this matter of water supplies, and that in respect of these powers, he is answerable to the House of Commons. To show how wide his powers are, I will read Section 1 of the 1945 Act which says:
    "It shall be the duty of the Minister to promote the conservation and proper use of water resources and the provision of water supplies in England and Wales and to secure the effective execution by water undertakers, under his control and direction, of a national policy relating to water."
    I do not think the Minister can exercise those powers or be answerable to the House in respect of them, as he is at present, unless he is able to get this information. Nor do I think the House can control the Minister unless it, too, has the residual power of getting information if it wants it. I do not want to avoid a challenge. Hon. Members on both sides of the Committee know what is the practice of the Minister of Health in respect of any Question on water undertakings put to him. This new Bill does not alter that position in any way, but it shows how different this type of public utility is from some other public utilities which we are not in a position to discuss tonight.
    Mr. Manningham-Buller: The hon. Member for West Woolwich (Mr. Berry) showed that I have not made myself clear or that he has failed to appreciate my argument. I am not complaining in the least of the Minister having every power to obtain information from the statutory water undertakers as to the exercise of their functions. Indeed, it is quite clear, from the earlier part of this Clause, that the Minister can call for any reports and returns he desires. I thought I asked a perfectly simple question, but even now we have not got an answer to it. It was this: recognising that the Minister could get any reports or returns he wanted, what did the further words of this Clause cover, namely,
    "give him such information with respect to their functions as he may require, or as may be required by either House of Parliament."
    This House can call for reports and returns, but this means something in addition to that, as I read it. Does it mean, having regard to the wide power that the right hon. Gentleman has, that, if I put down a Question about a statutory water undertaking, we shall be able to

    1895
    get the answer to that Question instead of the usual evasiveness that we have had in regard to Questions on transport undertakings? I rather understood from the hon. Gentleman's last remark, when he referred to the residual power in this House of getting information if it wants to, that he was admitting that if a Question is put by, say, the hon. Member for West Woolwich as to the operation of a particular statutory water undertaker, having regard to the power which the right hon. Gentleman is taking here, in addition to reports and returns, he will indeed convey the information to the hon. Member who asks for it from whichever side of the House he comes.
    Mr. J. Edwards: I hoped we could settle this amicably. We must distinguish here between a Question which may be put down and one which the Minister within the functions given to him by Statute will have to answer. In so far as he is in possession of material arising out of his functions, doubtless that material will be available to any hon. Member. On the other hand, there is the kind of material which the House by specific Resolution says that it wants. If the hon. Gentleman puts down the requisite Motion and that is carried by the House, then the undertaking must provide the information, but it cannot be expected that a simple Question to the Minister is going to produce the kind of information which is indicated in the last part of the Subsection.
    Mr. Manningham-Buller: Surely, a Motion of the sort to which the hon. Gentleman referred would be a Motion for a report or a return and would not, therefore, come into the last part of the Subsection at all?
    Clause, as amended, ordered to stand part of the Bill.

    CLAUSE 11.—(Interpretation, citation, construction and extent.)
    Amendments made: In page 9, line 17, at end, insert:
    "(2) References in this Act to the Third Schedule to the principal Act shall include references to that Schedule as incorporated by section one hundred and twenty of the Public Health Act, 1936, or by any other enactment in force at the commencement of this Act."
    1896
    In line 31, leave out Subsection (6).—[Mr. J. Edwards.]
    Clause, as amended, ordered to stand part of the Bill.

    NEW CLAUSE.—(Compulsory acquisition of land for construction of waterworks.)
    "(1) Subject to the provisions of this section, an order under section twenty-three or section nine of the principal Act authorising any persons to construct or alter waterworks or works connected therewith may authorise those persons to acquire compulsorily any land required for the construction or alteration of those works, being land which they could be so authorised to acquire by means of a compulsory purchase order made under section twenty-four of the principal Act, or under that section as amended by the Acquisition of Land (Authorisation Procedure) Act, 1946, as the case may be.
    (2) The provisions of the Schedule to this Act shall have effect in relation to an order under the said section twenty-three or the said section nine which authorises any such acquisition as aforesaid."—[Mr. I. Edwards.]
    Brought up, and read the First time.
    Mr. J. Edwards: I beg to move, "That the Clause be read a Second time."
    This new Clause would carry a stage further the procedure whereby powers can be acquired to start a new undertaking. Clause 2 enables the Minister, if he made an order under Section 3 of the main Act establishing a new undertaking, or an order under Section 9, constituting a joint board, to include provisions to do any of the matters provided for in Subsections (1, a, b, and c) and Subsection (2, a) of that Clause. Representations have been made on behalf of local authorities that orders under Sections 9 and 23 of the principal Act should also cover where necessary the compulsory acquisition of land and that water undertakers should be placed in the same position when applying for powers under the Water Act as if a private Bill were promoted. That is to say, that the whole project should be covered in one stage and by one order.
    Subsection (1) of the new Clause gives effect to this proposal, but extends it to persons who desire to become statutory water undertakers. Subsection (2) provides that the provisions of the new Schedule to the Bill shall have effect in relation to orders under Sections 9 and 23 of the principal Act. Broadly speaking, the Schedule applies the procedure already laid down in the Water Act and

    1897
    the Acquisition of Land Act, 1946, to orders made under Sections 9 or 23 which authorise compulsory purchase of land. It will be seen that in this new Clause an attempt has been made to build into the Bill under the same simplified process a system of doing by one order what previously had to be done by two orders in the matter of compulsory acquisition of land.
    Major Legge-Bourke: Will orders which have been made recently, while this Measure is before the House, be adaptable into the new form which is possible under this Clause?
    Mr. Edwards: I think not. We can apply it from the time we get the power under the Measure but not retrospectively.
    Clause read a Second time, and added to the Bill.

    NEW CLAUSE.—(Amendment of s. 16 of principal Act.)
    Section sixteen of the principal Act (which empowers statutory water undertakers to prohibit or restrict temporarily the use of hosepipes in certain circumstances) shall have effect as if at the end of the Section there were added the following Subsection:
    "(5) During any period when a prohibition or restriction imposed under this Section is in force, any officer of the undertakers shall, on producing if so required some duly authenticated document showing his authority, have a right at all reasonable hours to enter any premises to which the prohibition or restriction applies for the purpose of ascertaining whether there is or has been any contravention of the prohibition or restriction; and the Section of this Act relating to entry of premises shall apply to any such right of entry."—[Mr. J. Edwards.]
    Brought up, and read the First time.
    Mr. J. Edwards: I beg to move, "That the Clause be read a Second time."
    The purpose of this Clause is to give water undertakers the general powers of entry under the Act to satisfy themselves that consumers are not contravening the prohibition or restriction on the use of hosepipes during water shortages.
    Clause read a Second time.
    Motion made, and Question proposed, "That the Clause be added to the Bill."
    Mr. Joynson-Hicks: Is there to be any provision for notice to the occupier of the land or premises? I appreciate the difficulty of the Parliamentary Secretary, but this Clause raises rather an issue. Presumably he will say that if notice is given that an inspector is to call at the premises to see if water is being improperly used from a hosepipe, the occupier will immediately turn off the tap, and there will be no sign of any water being used from the hosepipe. The Clause necessarily presupposes that the Minister or somebody will have to employ people to go and peep round the corner or through the hedges to see if water is being used either for washing a car or the watering of the garden. That seems to be exceedingly unsatisfactory and a very unpleasant thing to do. I hope the Parliamentary Secretary will give us some further explanation on this matter.
    Mr. Berry: I am afraid the hon. Member for Chichester (Mr. Joynson-Hicks) has rather misconceived the functions of water authorities. As a matter of fact inspectors are employed by most up-to-date authorities to see that there is no waste of water. It is difficult at times, but it is part of the ordinary procedure. In times of drought and difficulty, one finds a person who says "I pay my water rate and I shall use as much water as I wish"—an anti-social person. I am sure the hon. Member would not defend him in the least—unless it was in the law courts. It is difficult at times to run some of these people to earth, but it is essential in the public interest that there should be these powers. I should have thought that anything that would stop the waste of water would have the approval of most Members of this Committee. I am much obliged to the Minister for introducing these powers, and as the public interest is paramount I hope that all of us will see our way to agree to this Clause.
    Mr. J. Edwards: My hon. Friend the Member for West Woolwich (Mr. Berry) has answered the hon. Member for Chichester (Mr. Joynson-Hicks). Powers of entry are contained in Section 48 of the principal Act. There are ample precedents, and it would really he extremely difficult to justify a different procedure in this respect. We already have, as I said when I moved the Second Reading of the Clause, the general powers of entry in the

    1899
    Water Act, 1945. I hope, therefore, that the hon. Member will not feel that he must oppose this Clause.
    Clause added to the Bill.

    NEW CLAUSE.—(Amendments of s. 42 of principal Act.)
    (1) Subsection (1) of Section forty-two of the principal Act (which requires statutory water undertakers being companies to prepare annual abstracts of the accounts of their undertakings) shall have effect as if the words "in such form as the Minister may direct," were omitted, and as if at the end of the Subsection there were added the following paragraph:
    "The Minister may give directions as to the form of the abstracts to be prepared by statutory water undertakers under this Subsection, and such directions may be given either in relation to any particular undertakers or in relation to all undertakers of any specified class."
    (2) Subsection (2) of the said Section forty-two (which requires such undertakers as aforesaid to transmit to the Minister and to certain local authorities copies of the abstracts prepared under that Section) shall have effect as if after the word "certified" there were inserted the words "and a copy of the balance sheet of the undertakers for the year to which the abstract relates."—[Mr. J. Edwards.]
    Brought up, and read the First time.
    10.0 p.m.
    Mr. J. Edwards: I beg to move, "That the Clause be read a Second time."
    This new Clause is really to simplify and clear up certain points. The effect of Subsection (1) is to require water companies to prepare annual abstracts of accounts, and send copies to the Minister and to the local authorities in their area, whether or not the Minister has given directions as to the form in which the abstract shall be prepared. There is also some doubt whether the Minister can require water companies to furnish copies of their balance sheets to local authorities in their areas, and Subsection (2) specifically requires companies to do this. I do not see that this raises any matter of principle, as it is merely simplifying and clarifying what is happening at the present time.
    Clause read a Second time, and added to the Bill.

    NEW CLAUSE.—(Subscriptions to associations of water undertakers.)
    Without prejudice to any enactment authorising the payment of contributions by a local authority to any association of local authorities, any statutory undertakers, whether a local authority or not, may pay reasonable subscriptions whether annually or otherwise to the funds of any association of water undertakers formed for the purpose of consultation as to the common interests of those undertakers and the discussion of matters relating to the supply of water.—[Mr. J. Edwards.]
    Brought up, and read the First time.
    Mr. J. Edwards: I beg to move, "That the Clause be read a Second time."
    This Clause does not require any explanation, and I am sure the Committee will welcome it.
    Clause read a Second time, and added to the Bill.

    NEW CLAUSE.—(Amendments of Third Schedule to principal Act.)
    (1) Section seven of the Third Schedule to the principal Act (which enables the undertakers to acquire easements for underground works) shall have effect as if for Subsection (1) of that Section there were substituted the following Subsection:
    "(1) Where the undertakers are authorised by the special Act to acquire any land compulsorily for the purpose of executing any underground works, they may, instead of purchasing the land, purchase only such easements and rights over or in the land as may be sufficient for the said purpose, and the Lands Clauses Acts, and the enactments relating to the compensation payable in respect of the compulsory acquisition of land, shall apply accordingly subject to any exceptions and modifications with which those enactments are incorporated with the special Act and to any other necessary adaptations."
    (2) Section sixty-three of the Third Schedule to the principal Act (which enables the undertakers to repair supply pipes) shall have effect as if for Subsection (2) of that Section there were substituted the following Subsection:—
    "(2) Where several houses or other buildings in the occupation of different persons are supplied with water by one common supply pipe belonging to the owners or occupiers of the houses or buildings, the amount of any such expenses as aforesaid and any expenses reasonably incurred by the undertakers in the maintenance of that pipe may be recovered in manner aforesaid from the owners of those premises in such proportions as, in case of dispute, may be settled by the court, but without prejudice to the rights and obligations, as between themselves, of the owners and occupiers of those premises respectively."
    (3) Subsection (1) of Section sixty-four of the said Third Schedule (which imposes penalties for waste of water by non-repair of water fittings) shall have effect as if for the words "If any person" there were substituted the words "If the owner or occupier of any premises," and for the words "water supplied to him" there were substituted the words "water supplied to those premises."—[Mr. J. Edwards.]
    Brought up, and read the First time.
    Mr. J. Edwards: I beg to move, "That the Clause be read a Second time."
    We now come to the Clause which makes Amendments to the Third Schedule of the principal Act. It is, in a certain sense, consequential on what we have already decided on the acquisition of land. Subsection (1) of the Clause amends Section 7 of the Third Schedule of the principal Act, which provides, in effect, that where undertakers are empowered by the Act or Order with which it is incorporated to execute any underground work, they may, instead of acquiring compulsorily the land under which the works will lie, be authorised by compulsory purchase order to purchase only such easements and rights in or over the land as they will need for the purpose. It will be known that this is a common form provision, which has for a long time been in use in local Acts authorising compulsory purchase of land, and it does not therefore raise any new matters of principle.
    Subsection (2) will remove doubts whether the undertakers can recover expenses incurred in discovering or repairing injury to or defect in a common supply pipe which may cause a waste of water or injury to personal property. These are matters covered by Section 63 of the Third Schedule, and the power will apply only to a common supply pipe for which owners of premises supplied are liable for repairs. Subsection (3) of the new Clause makes it clear that penalties for waste of water due to faulty pipes must be taken to apply to the person responsible for the maintenance of the fittings.
    Clause read a Second time.
    Mr. Berry: I beg to move, at the beginning, to insert:
    "(1) In paragraph (b) of the definition of 'communication pipe,' in Section one of the Third Schedule to the principal Act the words of that part,' shall be inserted after the words, 'the boundary'."—[Mr. Berry.]
    1902
    This Amendment is to clear up a doubt on one important point concerning a communication pipe. There are a number of doubts on this subject and I hope the Minister will accept the Amendment.
    I have two other Amendments which speak for themselves—
    At end of first Subsection, to add:
    "(2) Subsection (1) of Section thirty of the Third Schedule to the principal Act (which confers on owners or occupiers of premises the right on certain conditions to demand and receive a supply of water for domestic purposes) shall have effect as if, at the end of the proviso to that Subsection, there were-added the words or as requiring the undertakers to supply water for any premises in which any of the water fittings are not in accordance with the requirements of any bye-laws made under Section seventeen of the Water Act, 5945, or of any byelaws or regulations made under any other enactment for purposes similar to those for which byelaws may be made under the said Section seventeen, being byelaws or regulations applicable to those premises.'"
    At end of first Subsection, to add:
    "In Section forty-one (Laying of communication pipes, &c.) of the Third Schedule to the-principal Act the words 'service pipe,' shall be substituted for the words 'supply, pipe,' where those words first and secondly occur in the proviso to Subsection (1) of that Section and in both places where those words occur in the proviso to Subsection (3) of that Section."
    Mr. J. Edwards: I understood, Sir Robert, that it was proposed to take these three Amendments together, and to have a general discussion on them. In respect of the first and third Amendments, I must say at once that I must resist them for reasons which I will give to my hon. Friend the Member for West Woolwich (Mr. Berry). The questions raised in the first and third Amendments are really all concerned with what is meant in the Statute by the words:
    "The boundary of the part of the street in which the main is laid."
    It is possible to interpret those words as though the rest of the street where the main is not laid is non-existent. On this interpretation, a service pipe which is laid in the part of the street beyond that in which the main is laid does not fall within the definition of a communication pipe, and is therefore a supply pipe. Accordingly, it does not vest in and is not repairable by the undertakers under Section 44 of the Third Schedule. Moreover, on this interpretation, Section 41 of the

    1903
    Third Schedule, which provides for the construction of a main in lieu of so much of a supply pipe as is to be laid in the street, fits into the picture. I hope that is clear to the Committee.
    If we take the view, as I put it at first, then it keys in with, and is consistent with, the provision in Section 41 of the Third Schedule where it is permissible to provide a main, instead of so much of the supply pipe as is to be laid in the street. The two things fit in, and this interpretation is the one which was intended by the Central Water Advisory Committee. If one wants the exact reference, it is the Milne Committee Report, Cmd. 5986, page 27. I hope I have carried the Committee with me so far. On this interpretation, the statute fits together neatly, and the interpretation is borne out by the Second Report of the Milne Committee.
    The other interpretation which I think must be behind the mind of my hon. Friend, although, in fact, he did not say so is that the words
    "Boundary of the street in which the main is laid"
    include the boundary of the extension of the street beyond the point where the main ends. In other words, if we regard this Chamber as a street, and if we think of a main which runs through the Speaker's Chair and ends at this Box, then, on the interpretation which lies behind the Amendment, the boundary of the street is carried forward to the end of the Chamber if, for example, we suppose there is a house by the Serjeant at Arms' Chair. On the interpretation which I gave first, the boundary is to be regarded as the sides of the street where the main ends. I think that the interpretation which lies behind the mind of my hon. Friend is one which, if we were to try to put it into the statute, would cause a good deal of confusion. I feel that if we were to try to add to the definition in the way now suggested, we should have one part of the Act which was inconsistent with another part. I would prefer, therefore, to take the view that we should keep the definition as it stands, rather than try to deal with this rather intricate provision in the way my hon. Friend suggests.
    Finally, I think the water undertakings will be better off if the definition is left
    1904
    alone and if they rely on the construction of it which was intended by the Milne Committee, and accepted by the Minister, and, I think, is consistent with that construed in other parts of the Act. I cannot hope to have made this very difficult and technical matter absolutely clear, but I would ask the Committee to take my word for it that, if they were to embark on the definition which my hon. Friend has put down, we should land ourselves in greater difficulties. The intention of the Milne Committee is perfectly clear. Their view is the view which is accepted by the Minister, and that view is consistent with the construction to be placed on the other parts of the Act. I hope that my hon. Friend will not wish to persist in this Amendment, and in the third Amendment which I think is consequential on it.
    May I turn my attention to the second of my hon. Friend's Amendments? Section 30 of the Third Schedule of the principal Act enables an owner or an occupier to demand a supply for domestic purposes if he lays the supply pipe and pays or tenders the water rate. The effect of this Amendment will be that a supply cannot be demanded unless the water fittings, as defined in Section 1 of the Third Schedule, comply with the undertakers' byelaws or regulations applicable to the premises. I think that is a perfectly reasonable proposal, and I shall be quite happy to accept it, if it is the decision of the Committee, but, in respect of the first of my hon. Friend's Amendments, I hope he will feel able to withdraw it in the light of the statement I made. If he cannot, I must ask the Committee to reject it.
    Mr. Joynson-Hicks: I would like to ask the Parliamentary Secretary a question on the second Amendment, which he is prepared to accept. It seems to be altogether admirable, but the point which occurs to me is what is the immediate intention, or the present situation, with regard to the provision of Subsection (1) of Section 30 of the Third Schedule of the principle Act, when applied to the provision of other public utilities, as electricity, when that right of the occupier to have the service brought to his house, when the main is passing by the house, has just been abrogated under statutory rule and order. Can the hon. Gentleman tell us if he is proposing to insert this and have it taken away by statutory rule and order?
    Mr. Edwards: I will look into the point which the hon. Gentleman raised, but I cannot answer it now.
    Mr. Berry: I beg to ask leave to withdraw the Amendment. I shall not move the third. I am happy—or I suppose I should be happy—to get 33⅓ per cent. I hope the Minister will be as generous to me when I raise other matters.
    Amendment, by leave, withdrawn.
    Amendment made: At the end of Subsection (1) to add:
    "(2) Subsection (1) of Section thirty of the Third Schedule to the principal Act (which confers on owners or occupiers of premises the right on certain conditions to demand and receive a supply of water for domestic purposes) shall have effect as if, at the end of the proviso to that subsection, there were added the words 'or as requiring the undertakers to supply water for any premises in which any of the water fittings are not in accordance with the requirements of any byelaws made under Section seventeen of the Water Act, 1945, or of any byelaws or regulations made under any other enactment for purposes similar to those for which byelaws may be made under the said Section seventeen, being byelaws or regulations applicable to those premises.'"—[Mr. Berry.]
    Clause, as amended, added to the Bill.

    NEW CLAUSE.—(Amendment of Section thirty-seven of the principal Act.)
    Section thirty-seven (Duty of undertakers to provide a domestic supply for new buildings) of the principal Act is hereby amended as follows:

    (a) in proviso (a) to Subsection (1) of the Section for the words "providing and laying the necessary mains" there shall be substituted the words "providing and laying or constructing the mains and any additional plant or other work necessary for the supply of water to the buildings to be erected on the land," and

    b) in proviso (b) to the said Subsection (1) for the words "laying and providing the mains" there shall be substituted the words "providing and laying or constructing the said mains and additional plant or other work as aforesaid."— [Mr. Berry.]

    Brought up, and read the First time.
    10.15 p.m.
    Mr. Berry: I beg to move, "That the Clause be read a Second time."
    This new Clause is really a clarification of the Bill, and I hope that it will commend itself to my hon. Friend the Parliamentary Secretary and to the Committee, so that I may have 40 per cent. of my Amendments accepted, two having been rejected and one, a new Clause, not
    1906
    called. I would say that it would help water undertakings considerably if this clarification could be agreed.
    Mr. J. Edwards: I am very sorry to disappoint my hon. Friend, but I really cannot accept his proposed new Clause. I think that substantially we have already covered the point which my hon. Friend has in mind, by the Amendment which I moved earlier to Clause 10, in page 8, line 33. I must say I am in some difficulty about the meaning of some of the words in the proposed new Clause. I think the words "constructing the mains" do not seem to mean very much in the present context, since the cost of laying and providing mains is covered by the Bill as it stands. The words "additional plant or other work" are very vague. I do not really understand clearly what they are intended to cover. Indeed, the word "plant" is not a term used anywhere in the Bill or in the principal Act. Since I feel we have met most of the points of the proposed new Clause in our Amendment to Clause 10, I hope my hon. Friend will not feel he must press this new Clause, and will count himself well off with 25 per cent. of his Amendments.
    Mr. Berry: I would like to feel that my hon. Friend's intentions are rather better than his arithmetic. As he has turned himself into an admirable imitation of a stone wall, I beg to ask leave to withdraw the Motion.
    Motion and Clause, by leave, withdrawn.

    NEW SCHEDULE.—(Orders under s. 23 Or s. 9 of Principal Act Authorising Compulsory Acquisition of Land.)
    1. The order shall incorporate the Lands Clauses Acts, and those Acts and the enactments relating to the compensation payable in respect of the compulsory acquisition of land shall apply accordingly subject to the exceptions and modifications specified in Parts I and III of the Second Schedule to the Act of 1946, and to such other exceptions and modifications (if any) as may be specified in the order:
    Provided that where the undertakers are not a local authority within the meaning of the Act of 1946, paragraphs 3 and 4 of the said Second Schedule shall not apply.
    2.—(1) A copy of the notice of the order required by paragraph 2 or paragraph of the First Schedule to the principal Act to be published shall be served in accordance with the provisions of paragraph 3 or paragraph 12

    1907
    of that Schedule on every owner, lessee and occupier (except tenants for a month or for any period less than a month) of any land authorised by the draft order to be compulsorily acquired.
    (2) Where any such land as aforesaid is ecclesiastical property (that is to say land belonging to any ecclesiastical benefice, or being or forming part of a church subject to the jurisdiction of the bishop of any diocese or the site of such a church, or being or forming part of a burial ground subject to such jurisdiction) a copy of the notice aforesaid shall also be served as aforesaid on the Ecclesiastical Commissioners.
    3. Where any such objection as is mentioned in paragraph 7 or paragraph 16 of the First Schedule to the principal Act relates to the compulsory acquisition of land, the Minister may require the objector to state in writing the grounds thereof, and if it is certified by the Minister that the objection relates exclusively to matters that can be dealt with by the tribunal by whom compensation for the compulsory acquisition is to be assessed—

    (a) the Minister may disregard the objection for the purposes of the said paragraph 7 or paragraph 16, as the case may be; and

    (b) where paragraph 8 or paragraph 17 of the said First Schedule applies to the order, the objection shall be disregarded for the purposes of that paragraph.

    4. Notwithstanding anything in paragraph 6 or paragraph 15 of the First Schedule to the principal Act, the order as made by the Minister shall not, unless all persons interested consent, authorise the undertakers to acquire compulsorily any land which they would not have been so authorised to acquire if it had been made in terms of the draft submitted to or prepared by him.
    5. Subject as hereinafter provided, Part III of the First Schedule to the Act of 1946 (which makes special provision with respect to land of local authorities and statutory undertakers, common land, inalienable land of the National Trust and ancient monuments) shall apply to the order, whether or not the undertakers are a local authority within the meaning of that Act, as it applies to a compulsory purchase order:
    Provided that—

    (a) nothing in this paragraph shall be construed as authorising the compulsory acquisition by undertakers not being such a local authority as aforesaid of any such land as is mentioned in Subsection (6) of Section twenty-four of the principal Act; and

    (b) where paragraph 8 or paragraph 17 of the First Schedule to the principal Act applies to the order, this paragraph shall have effect as if for the reference to Part III of the First Schedule to the Act of 1946 there were substituted a reference to paragraph 10 of the last-mentioned Schedule.

    6. As soon as may be after the order has been made, the undertakers shall publish in one or more local newspapers circulating in the locality in which the land authorised to be acquired is situated a notice describing the land and stating that the order has been made authorising the undertakers to acquire it compulsorily, and naming a place where a copy of the order as made may be inspected at all reasonable hours; and shall serve a like notice and copy of the order on any persons on whom notices with respect to the land were required to be served by virtue of paragraph 2 of this Schedule.
    7. Part IV of the First Schedule to the Act of 1946 (which relates to the validity and date of operation of compulsory purchase orders under that Act) shall apply to the order as if it were a compulsory purchase order and as if this Act were included among the enactments specified in Subsection (1) of Section one of that Act; and sub-paragraph (1) of paragraph 15 of that Schedule shall have effect accordingly, in relation to the order, as if for the words "this Act," in the third place where those words occur, there were substituted the words "the Schedule to the Water Act, 1948," and as if after the words "this Schedule," in the second place where those words occur, there were inserted the words "or the Schedule to the Water Act, 1948":
    Provided that nothing in this paragraph shall prohibit or restrict the taking of legal proceedings for questioning the order so far as it relates to matters other than the compulsory acquisition of land.
    8.—(1) In this Schedule the expression "the Act of 1946" means the Acquisition of Land (Authorisation Procedure) Act, 1946, and the expression "the undertakers" means the person authorised by the order to acquire land compulsorily.
    (2) The provisions of this Schedule shall apply to a development corporation established under Section two of the New Towns Act, 1946, as if it were a local authority within the meaning of the Act of 1946 —[Mr. . Edwards.]
    Brought up, and read the First time.
    Mr. J. Edwards: I beg to move, "That the Schedule be read a Second time."
    This new Schedule is consequential upon the first of the new Clauses I moved tonight, and I do not think I need give any detailed explanation of it.
    Schedule read a Second time, and added to the Bill.
    Bill reported, with Amendments; as amended, to be considered Tomorrow, and to be printed. [Bill 53.]

  SALVAGE COLLECTION
  Motion made, and Question proposed, "That this House do now adjourn."— [Mr. Popplewell.]
  10.20 p.m.
  Mr. William Shepherd: I want tonight to raise a not unimportant question, that is, whether we are doing as well on the score of salvage as we might be doing. The mechanics of our salvage are not too bad. We have at the Board of Trade people who ate genuinely interested in the project. But although there are salvage merchants and local authorities engaged on this problem, one cannot help feeling that the machine is not working at the speed of which it is capable, and which the condition of the country demands. Unquestionably, public interest in salvage has declined. We must arrest that decline, which has taken place largely because of the false psychology which has prevailed since the end of the war, when people believed that we had come to the end of our difficulties and could return to the old pattern. No one now really believes that—unless it be the right hon. Member for Bishop Auckland (Mr. Dalton), the former Chancellor of the Exchequer. Most people know that that is not so, and that collecting salvage must be regarded, not merely as a short-term measure to meet an emergency, but as a long-term part of our existence. "Waste not, want not" must be our maxim for a long time to come. Never again shall we be able to make wasteful use of materials, as we did in the past.
  It is essential that the Government should mobilise public opinion to a realisation of the need for collecting salvage as a long-term policy. I cannot feel that the Government have done sufficient in this respect. There is at present a great propaganda programme designed to prevent people from being killed on the roads. While that is very desirable, is it not rather putting the cart before the horse? What is the good of having that elaborate publicity programme when we cannot even be sure that we shall be able to keep them alive if they escape death on the roads? Surely it is very important to have a salvage campaign to ensure that those people who escape death in accidents with mechanical vehicles on the roads shall have food and a livelihood afterwards. The Government have got this problem entirely out of focus, and
  1910
  the money now being spent on persuading people to avoid being knocked down on the roads ought to be spent on an active and vigorous salvage campaign.
  There has been a serious fall in the amount of salvage collected. In 1942 we salvaged, in waste paper and board, about 420,000 tons; whereas in 1947 we salvaged only about 250,000 tons. That is a very serious fall, particularly having regard to the amount of paper issued for use by industry generally, which was greater in 1946 and 1947 than in 1942. We are getting nothing like the volume of paper salvage that we should get. While there is this fall in the volume of paper salvage collected, our newspapers are restricted in size and our board-making mills are working at less than capacity. This is a very vital factor. If we collected 70 per cent. or 80 per cent. of the paper wasted in the populated urban districts, our mills would not be able to deal with the volume which would come forward. That is a measure of the extent to which we are falling short in our present salvage activities.
  Obviously, an essential part of the collection of waste falls upon local authorities. So far as the Government are concerned, the segregation of waste is important, but there are areas in which segregation is not taking place. In some cases local authorities are not taking the trouble, and in other cases there is creeping in the even worse tendency of local authority employees not to carry out their instructions. They are refusing to segregate the paper, as they are instructed to do, and they are often telling the housewives that it is no longer necessary to collect salvage. Many employees of local authorities are, in fact, sabotaging the campaign. I suggest to the right hon. Gentleman that we ought to look very carefully into this question, because the salvage of paper is so vital that nothing should stand in the way of getting the maximum amount of recovery.
  We might also get some additional recovery from the destruction of documents. I am told that paper accumulates in legal offices in great masses, although I keep away from these offices as much as I can. If a determined drive were made by the Government to clear offices of unnecessary paper, I am sure that we should get a great deal of paper. It is absolutely essential, with the rising costs of paper and board from abroad, that we

  1911
  should get a higher percentage of recovery than the lamentably low figure of today. I understand that the amount of kitchen waste has gone down very materially. Bones are almost an impossible proposition—it is true that people say: "Give us the meat, and we will give you the bones." The present allocation of meat does not provide much of an opportunity for the collection of bones. The much larger quantity of filleted meat coming into the country, as compared with prewar days, also reduces the amount of bones which can be collected. Bones are a very profitable source of salvage, as they can provide many things, and we are falling down on their collection.
  I wish now to say a word about the collection of bottles, but only in one respect, and that is so far as this affects the Ministry of Food. The collection of bottles has gone on pretty well during the last three or four years. On the whole, it has been fairly satisfactory, but the Ministry of Food are responsible for a good deal of the waste which is now going on. Every week the Ministry send out 8,000 gross of six-ounce medicine bottles. These bottles can be collected by the simple expedient of saying that in future, except for first applications for welfare foods, bottles must be returned before further supplies are given. The Ministry of Food, however, refuse to apply this sanction which it enforces on other people.
  As a consequence of the Ministry refusing to adopt this very reasonable request, 4,000 gross of bottles are not being collected each week. There is no reason why the Ministry of Food should not be forced by the Board of Trade to salvage every one of their bottles by demanding that people shall return a bottle before they can get a fresh issue. I am sure that if we could go into the homes of people who are taking these welfare foods, we should find their cupboards stocked with bottles. These bottles could be used for essential national purposes, if the Ministry would only have the decency to apply the regulations they force upon other users.
  Before I conclude, I wish to say a word about salvage in industry. I think that insufficient is being done in this respect. Salvage in industry ought to take two forms. There is far too much waste in industry today, largely because of the fact
  1912
  that we have a full employment policy. In the first place, we should reduce the amount of waste which occurs in this respect. People cannot enforce the rigid discipline of maximum utilisation of materials which they could in ordinary times. Many workers are less skilled than were workers before the war, and the result is that one is getting in British industry far too high a level of waste. The Department ought to do much more than it is doing to stop that. But even assuming we cannot do much there, in industry generally there are still large accumulations of waste material which could be collected. I am convinced that a national drive at the present time for scrap metal, particularly steel, would yield an enormous amount. All firms have things put by which they say they will use one day, but which they probably never will use. If a determined effort were made, I think we could get a much greater yield. What is needed is a live campaign to impress on people that this is not a temporary matter, that it is an essential part of our future existence as a nation, and that we have to have it as part of our everyday life.
  We have to give local authorities more backing than they have had. It is no good the Board of Trade sending out directives to local authorities to collect salvage, when they have no vehicles to make the collection and they cannot get labour with which to do it. The savings of waste materials is vital to us, and the vehicles—they are only about 1,000 in number—which are necessary, and the men who are necessary, for this purpose ought to be provided as a priority. That is not being done now, and it certainly should be done. I suggest we should do something about the lagging local authorities. Many are not playing the game, even in relation to the facilities available to them, and we ought to have some means by which these people can be exposed. If we got the tempo of the salvage drive increased, that would tend to bring laggers into line; but the Minister ought to deal specifically with local authorities which refuse to do what they should do in their own interests and in the nation's interests.
  Lastly, I feel that insufficient has been done to utilise voluntary services, like the W.V.S. and the Boy Scouts. I feel they would be happy to take a greater part in the salvage drive than they have

  1913
  hitherto been invited to take. If we do these things, I feel that we can materially increase the volume of salvage that is collected and to do that today is one of the most vital matters, because it would be a positive saving of materials which otherwise we have to import, with the use of foreign currency of which we are very short.
  10.33 p.m.
  Mr. Molson: I will detain the House only for a very few minutes, so that the Minister may have time to reply. There are three big mills in my constituency, and I am most anxious that every possible step should be taken to increase the saving of paper. Secondly, I would like to draw the Minister's attention to the figures in the "Digest" showing that from June, 1939, to October, 1947, there has been an increase of no fewer than 11,700 persons engaged in the manufacture of bottles, and the facts which have been produced by my hon. Friend show that a great deal could be done to increase the salvage of bottles. I much regretted the attitude taken in this matter by the Parliamentary Secretary to the Ministry of Food, and I was surprised that the order which made the salvage of bottles compulsory during the war was repealed, and has not been replaced.
  I hope the President of the Board of Trade will set up a committee to go into the whole matter generally. It is a very difficult administrative problem. An immense amount is being done. An Italian invention was started in this country, called "Hyganic," which was successfully launched in the Royal Borough of Kensington, but during the war it had to be closed down. This is a matter of great importance at the present time, and I hope the President of the Board of Trade will give it the attention it deserves.
  10.35 p.m.
  The President of the Board of Trade (Mr. Harold Wilson): I am exceedingly grateful to the hon. Member for Bucklow (Mr. W. Shepherd) for raising this subject tonight, for it gives me an opportunity of saying a few words about the need for salvage at a time when we are about to launch a new salvage drive in this country. I think he very clearly and fully stated the need for a salvage
  1914
  drive, and what he said was reinforced by the hon. Member for The High Peak (Mr. Molson), with particular reference to the need of the paper mills, of which he has one or two in his Division. I would like to thank the hon. Gentleman also for the tribute he paid to the work that is being done, and to the officers in the Board of Trade and elsewhere who are doing this.
  I would not disagree with him when he says that the main problem we have to face today is the psychology of the public and particularly the feeling that now that the war is over, the need for salvage has gone with the fighting. He will be the first to realise that publicity on this subject is a most difficult thing to organise. Perhaps of all kinds of publicity, propaganda for salvage drives is most subject to the law of diminishing returns. If you keep on pressing for increased work on salvage, the pressure tends to become much less attractive as you go on, and that is especially true, of course, if for one reason or another the public who are responding to that publicity are finding that their salvage is not being collected, either because the local authority in the area in which they are living is, perhaps, a little lax in this matter, or—what is more general—the local authority is perfectly willing to do all that it can, but is finding that, because of some of the shortages referred to by the hon. Gentleman, it cannot get round and collect the salvage as quickly or as often as is desirable.
  But what the hon. Member said about the need for salvage, especially of paper, requires no underlining. The need for paper at the present time is as great as it ever was. The shortage has been intensified in recent weeks by the very serious drought in Sweden, which cut off a substantial proportion of our supplies of wood pulp at a most critical time. The paper situation is, of course, particularly serious in the matter of packing material. This afternoon I had to announce that there will be less supplies available for the wrapping of goods in the shops. I do not propose to control it by order. I do not propose to revive the war-time order forbidding the wrapping of goods; but I am appealing to the public and to the distributive trade to be extremely economical in the use of wrapping paper and to use it only where absolutely necessary.

  1915
  We need a lot of paper and paper-board for the growing export drive, and this is where we are feeling the pinch most seriously. We need paper especially in the newsprint-using industry and for books, and, of course, while the salvage we shall get from this salvage drive cannot be used for newspaper purposes and printing, it can make possible a considerable saving in the pulp used for other purposes and thus enable us to use more of our resources for newsprint pulp. It can make a direct contribution to the various forms of paper and paper-board required for packing.
  As the House knows, the brunt of the job of collecting paper—and I am dealing particularly with paper this evening—falls on the local authorities, but their work is supplemented by the work of the merchants. Some local authorities are very, very good. Some of them are, I am afraid, not so good. I have not myself heard of the cases referred to by the hon. Gentleman of action taken by the employees of local authorities actively to discourage salvage. I would not quarrel with his words if the facts are as he said they are, but I would like particulars of these cases to be furnished so that I can look into them. The war-time directions are still in force as far as local authorities are concerned, but the local authorities are under very great difficulties—
  Mr. Molson: As regards paper?
  Mr. Wilson: I am not talking about paper at the moment. I will come to it in a minute or two. The delay in the delivery of vehicles for this purpose is something like 18 months at the present time, but as part of the salvage drive I am giving consideration to this question to see whether something can be done to speed up the delivery of vehicles of this kind. Manpower is also a serious problem. The collecting staffs of local authorities at the present time are something like 25 per cent. below the prewar figure even though the need for collection is so much greater. At the same time, we should not depreciate the amount of work that has been done by the local authorities in this field in the last eight years. In fact, during that period the local authorities have collected two and quarter million tons of paper. They still account for one-third of the waste paper collection in this country, the merchants, of course,
  1916
  accounting for the remaining two-thirds. Taking the contributions of the local authorities and the merchants together, even in 1947, in spite of the difficulties to which reference has been made, the total amount collected was 645,000 tons. When one compares that with the highest wartime figure of 860,000 tons in 1942, one sees that the fall has not been so serious as perhaps might be generally thought. In fact, the 1947 total collection figure which I have given was considerably above the figure for 1945 and for certain wartime years.
  I must agree with the hen. Member for The High Peak that the need for paper collection today is no less urgent than it was at the height of the war, and I would agree with him further when he says that the need for continuing intensified salvage measures will go on as long as we can see. We cannot afford to waste paper or any other form of material for a long time ahead or, indeed, ever again. Such decline as has occurred is due partly to the labour and transport difficulties, partly to the fact that we have not been having the same number of non-recurring drives such as the National Salvage Book Drive of the war years, and partly to the extent of public apathy on this question. Any estimates that I have seen prepared by those who are competent to judge on these matters shows that something between 150,000 and 200,000 tons of paper in the dust bins of this country have been wrongfully destroyed, and, then of course, there is the paper which is burned.
  We are constantly stimulating local authorities in this matter. We are in direct touch with all local authorities and are constantly putting pressure on them. There are various means of doing it, by contacts, by departmental circulars, and so on. There are local salvage drives going on in many parts of the country and have been going on for some time. This week I am sending out a new and specially urgent appeal to local authorities to intensify their efforts and to leave nothing undone that can be done to collect the salvage we are asking the public to put out. As part of that campaign we are hoping to be able to guarantee the local authorities the maintenance of the present prices so far as 1950, which will be an important thing for them and will enable them to make long-term plans. A committee has been

  1917
  set up representative of the newspapers, the periodicals and the Paper Makers' Association. This committee is working in close co-operation with the Board of Trade and formulating publicity on a national scale. Newspapers have pledged their full assistance in this matter, and they know that in so doing, not only are they performing a patriotic duty, but are also helping themselves.
  Mr. Janner: Could my right hon. Friend say whether on that committee there will be anyone representative of the film industry?
  Mr. Wilson: That committee is dealing mainly with paper-using and paper-making industries. My own Department is in close touch with the film industry, and is hoping to make the fullest use of films, broadcasting, and, in fact, of every weapon in the modern publicist's armoury. I understand that the main item which this committee—which is as I have said, a private committee—will take up is a national competition between local authorities, with money prizes. That committee and my Department are also arranging for increased local publicity particularly in the local newspapers, which, I think, can do far more in this even than the national Press, to stimulate the more laggard local authorities to do their work.
  Mr. Collins: Can my right hon. Friend say what action he proposes to take in the case of a local authority such as that of which I sent particulars to him ten days ago, which would not take part in a salvage drive, saying that it was a waste of time, effort and money?
  Mr. Wilson: I think that I ought to look further into the case before I answer that question; but I must say that the nation cannot afford that kind of attitude. We are appealing to local authorities to make the fullest use of all methods of collection which are available, including, of course, the merchants. It is hoped that the local authorities will make full use of youth clubs, scouts, guides and other local organisations, and that they will not be "sticky" about the methods used to encourage these organisations. I know that if, when I was a boy, I had been engaged in this kind of thing and we had been told that money would be
  1918
  available for the camping fund as a result of anything we did, I am quite sure that there would have been no salvage problem in the part of Yorkshire where I lived. In fact, there would probably have been nothing left for the local authority to collect.
  We cannot organise in detail all these efforts from a national Department. We must leave some part of it to local authority enterprise. An hon. Member has called for a good clear out of documents, and I would emphasise in that respect that Whitehall will set an example to the country. We are going to have another drive in Whitehall to get as much spare paper as can be made available for this salvage drive, and I think this is the proper time, a little while after the end of the war, to clear out some of the war-time paper which is no longer required. I would go even further, and appeal to all offices to do what they can to make available paper which must have accumulated since the last drive of this kind.
  Reference has also been made to bottles. There are difficulties in regard to bottles. I agree with the remarks about the urgent need for bottles. We are so short of soda ash that we cannot go on making it available to the extent that we are doing now. I would like too, to see more bottles and cullet collected. There are difficulties in the case of pharmaceutical products in requiring bottles to be returned when fresh supplies are wanted. Where machinery is used it is often not possible to use secondhand bottles. Regarding the case about the Ministry of Food, I will take that matter up with my right hon. Friend and see what can be done. With regard to industry, I agree that there is need for the collection of scrap metal. The Iron and Steel Board is arranging for the collection of ferrous scrap. There is a great need there, and I agree that there is a great deal which can be collected.
  The Question having been proposed after Ten o'clock and the Debate having continued for half an hour, Mr. DEPUTY-SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at Ten Minutes to Eleven o'Clock.

BRITISH ARMY
  Military Works, Dungeness and Littlestone
  Military Works, Dungeness and Littlestone
  War Gratuities (Reckonable Service)
  War Gratuities (Reckonable Service)
  Married Quarters, East Africa
  Married Quarters, East Africa
  Palestine—Transjordan Frontier (Guard)
  Palestine—Transjordan Frontier (Guard)
  War Graves, North-West Europe Visits)
  War Graves, North-West Europe Visits)
  PRISONERS OF WAR (REPATRIATION)
  PRISONERS OF WAR (REPATRIATION)
NATIONAL FINANCE
  Income Tax (Service Pay)
  Income Tax (Service Pay)
  Capital Investments, Sterling Area
  Capital Investments, Sterling Area
  Overseas Payments (Interest and Dividends)
  Overseas Payments (Interest and Dividends)
  Central Office of Information
  Central Office of Information
  Hansard (Reprint)
  Hansard (Reprint)
  Revenue Duties (Wartime Concessions, Withdrawal)
  Revenue Duties (Wartime Concessions, Withdrawal)
  INCOME TAX
  INCOME TAX
  DEATH DUTIES
  DEATH DUTIES
  Income Tax (Bookmakers)
  Income Tax (Bookmakers)
  POST OFFICE, EASTCOTE
  POST OFFICE, EASTCOTE
TRADE AND COMMERCE
  Export Targets
  Export Targets
  Geneva Agreement (Rubber)
  Geneva Agreement (Rubber)
  Golf Spikes (Import Licence)
  Golf Spikes (Import Licence)
  Jamaican Cigars
  Jamaican Cigars
  Clothing Coupons (Farmers)
  Clothing Coupons (Farmers)
  Processed American Tobacco (U.K. Exports)
  Processed American Tobacco (U.K. Exports)
  Harris Tweed
  Harris Tweed
EMPLOYMENT
  Digley Reservoir (Irish Workers)
  Digley Reservoir (Irish Workers)
  Unemployment (Building Workers)
  Unemployment (Building Workers)
  Industrial Output
  Industrial Output
  Miles Aircraft, Ltd. (Dismissed Workers)
  Miles Aircraft, Ltd. (Dismissed Workers)
  Disabled Persons
  Disabled Persons
  Women's Services
  Women's Services
  Staggered Working Hours
  Staggered Working Hours
  Unemployment, Lymington
  Unemployment, Lymington
  NATIONAL SERVICE (DEFERMENTS)
  NATIONAL SERVICE (DEFERMENTS)
SCOTLAND
  Timber Production (Rabbit-Proof Fences)
  Timber Production (Rabbit-Proof Fences)
  Herring Research, Firth of Forth
  Herring Research, Firth of Forth
  Mole Catchers, Ayrshire
  Mole Catchers, Ayrshire
  Prestwick and Heathfield Airports
  Prestwick and Heathfield Airports
  Agriculture (Women's Labour)
  Agriculture (Women's Labour)
MINISTRY OF PENSIONS
  Widows (Emigration)
  Widows (Emigration)
  School Children (Travelling Expenses)
  School Children (Travelling Expenses)
  Books (Page-Turning Appliance)
  Books (Page-Turning Appliance)
AGRICULTURE
  Research (United Kingdom and Eire)
  Research (United Kingdom and Eire)
  Aycliffe, County Durham
  Aycliffe, County Durham
PUBLIC HEALTH
  Smallpox (Statistics)
  Smallpox (Statistics)
  Nurses Working Party (Minority Report)
  Nurses Working Party (Minority Report)
  Burial Ground, Blunsdon
  Burial Ground, Blunsdon
HOUSING
  Building Licence, Swaffling
  Building Licence, Swaffling
  Railway Workers
  Railway Workers
MINISTRY OF SUPPLY
  Miles Aircraft, Ltd. (Debts)
  Miles Aircraft, Ltd. (Debts)
  Ford Factory, Dagenham
  Ford Factory, Dagenham
  Atomic Energy Research, Harwell (Precautions)
  Atomic Energy Research, Harwell (Precautions)
  STONEMASONS (TRAINING)
  STONEMASONS (TRAINING)
  NATIONAL INSURANCE (PERSONAL CASE)
  NATIONAL INSURANCE (PERSONAL CASE)
  ENGLISH NEWSPAPERS (FOREIGN COUNTRIES)
  ENGLISH NEWSPAPERS (FOREIGN COUNTRIES)
  CIVIL AVIATION (AIRFIELD CONTROLLERS)
  CIVIL AVIATION (AIRFIELD CONTROLLERS)
ROYAL NAVY
  Requisitioned Premises, Southsea (Claim)
  Requisitioned Premises, Southsea (Claim)
  Mechanicians
  Mechanicians

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers.
The Lord Ormathwaite—Sat first in Parliament after the death of his father.

PALESTINE OUTRAGES.
2.34 p.m.
THE MARQUESS OF SALISBURY: My Lords, I beg to ask the Government the question of which I have given them private Notice—namely, whether they have any statement to make about the recent deplorable events in Palestine and, in particular, in Jerusalem.
THE FIRST LORD OF THE ADMIRALTY (VISCOUNT HALL): My Lords, on the morning of February 22 a convoy of three military-type trucks and one police-type armoured car was observed travelling towards the centre of Jerusalem. The occupants wore military and police uniforms. The three trucks parked in Ben Yehuda Street, in the Jewish commercial centre of Palestine. A few minutes afterwards a heavy explosion occurred, which completely demolished buildings on both sides of the street. Casualties were heavy. Shortly after the explosion the armoured car was observed
2
leaving Jerusalem along the Jaffa Road at great speed. This vehicle bore an identification number of which there is no trace in police records, but both military and police armoured cars have been stolen in recent disturbances. The armoured car in question has not yet been found.
Investigations are not yet complete, but it is clear that there is no ground for the suggestion, understood to have been broadcast in Palestine, that members of the British Security Forces were responsible for the outrage. The Zionists, although challenged to do so, have produced no evidence in support of this charge. Statements have been made on behalf of the Arabs admitting the responsibility. His Majesty's Government deeply regret the further heavy loss of life resulting from this incident. According to the latest report available twenty-seven persons were killed by the explosion, while in subsequent reprisals nine members of the British Security Forces were murdered.
THE MARQUESS OF SALISBURY: My Lords, while thanking the Government for their full statement on this shocking event, I would like to ask these questions. Do I understand that responsible Arabs have accepted responsibility for the explosion? Secondly, has any expression of regret been received from the Jewish Agency for these entirely unjustified and unprovoked attacks upon British troops? Thirdly, have the Jewish Agency given any assurances that there will be no repetition of such attacks? Further, I should like to ask the Government how it was that a British armoured car came to be stolen, and whether steps are being

3
taken by the responsible authorities to see that such a thing does not occur again. I would also like to ask what measures are being taken to safeguard the security of British troops in the present unhappy situation. Finally, I would ask the Government whether it is being made abundantly clear to the leaders of both the Jewish and the Arab communities that if there are further incidents involving the loss of British life the communities themselves cannot and will not be absolved from responsibility for the actions of their members. In conclusion, I would like, if I may, to express our deep and sincere sympathy with the relatives of the victims of these intolerable outrages.
VISCOUNT HALL: My Lords, in reply to the first question, whether any responsible Arab has recognized responsibility for this outrage, I would inform your Lordships that an Arabic pamphlet appeared in Jerusalem to-day giving the following information and warning:
" A group of Arab commandos carried out, by blowing up buildings in Ben Yehuda Street in Jerusalem, reprisals for Jewish bomb in Ramie. We warn Jewish community that, if they do not stop blowing up houses and killing innocent people, we shall take severe revenge. We have enough explosives to blow up all Jewish towns and colonies in Palestine. An eye for an eye and a tooth for a tooth. Signed, Abdul Khader Husseini."
Whether that pamphlet can be regarded as official His Majesty's Government cannot say, but they are making inquiries.
Concerning an expression of regret, I am sorry to say that so far no such expression has been received from the Jewish Agency. The noble Marquess asked: How came it that these British vehicles were stolen? It is very difficult, in a country where conditions are as complicated as they are in Palestine at the present time—where there is a great amount of mining of vehicles and, indeed, the killing of British troops—to prevent vehicles being stolen. I assure your Lordships that every possible step is being taken to prevent the stealing of British property in this way. With regard to the noble Marquess's last question, may I say that of course warnings have repeatedly been made to both Jews and Arabs in relation to their deliberate murder of British troops. Unfortunately all the warnings and threats which have been used have not brought any easing
4
of the situation. I will certainly take up the other matters which have been mentioned by the noble Marquess and discuss them with the Colonial Office, with a view to giving your Lordships' House further information in relation to this matter.
VISCOUNT SWINTON: My Lords, I am sure that your Lordships' House is grateful for the further information. Arising out of the supplementary answer, would the Government consider two suggestions? First, following a precedent which I think has been applied before to the destruction of property—and this destruction of life is far more serious—would it not be possible to impose fines upon the communities? Secondly, in a case such as this, where the Jewish Agency have apparently made themselves deliberately responsible for, or at any rate have permitted, the circulation of a lying rumour about British troops, would it not be possible to hold the leaders responsible?
THE LORD ARCHBISHOP OF YORK: Will the Government make it plain, through the wireless and through every other means at their disposal, how bitterly the people of this country resent this cruel slander upon our soldiers?
LORD HARLECH: Can the noble Viscount say whether the name at the end of this pamphlet which purports to claim responsibility for this outrage is not that of a close relative of the Mufti?
VISCOUNT HALL: My Lords, if I may reply to the last question first, I think that that is so: the name given is that of a very close relative of the Mufti. With regard to the question put by the most reverend Primate, I will certainly convey to His Majesty's Government the suggestion which he made, with a view to seeing that full publicity is given on the lines suggested by him. In reply to the noble Viscount, Lord Swinton, I will convey to His Majesty's Government the suggestions which he made, particularly that which proposed that the communities responsible for these diabolical crimes should be called upon to suffer to the full degree in making good the damage which has been done. In reply to the other matter which the noble Viscount mentioned, I would say that I will convey it to His Majesty's Government, with a view to action being taken on the lines suggested.

ATTEMPTED RAPE BILL.
2.44 p.m.
House in the committee (according to Order): Bill reported without amendment.

ROYAL MARINES BILL.
Read 3a (according to Order).
Clause 1 [Power to raise Royal Marine Forces Volunteer Reserve]:
VISCOUNT HALL: My Lords, this is purely a drafting Amendment. I beg to move.
Amendment moved—
Page 1, line 14, leave out ("it applies") and insert (" they apply").—(Viscount Hall)
On Question, Amendment agreed to.
Bill passed, and returned to the Commons.

ECONOMIC SITUATION.
2.46 p.m.
VISCOUNT SAMUEL VISCOUNT SAMUEL rose to call attention to the economic situation, and to move for Papers. The noble Viscount said: My Lords, six months ago your Lordships' House discussed the economic situation. Since then some favourable factors have supervened. The physical restoration and replenishment of Europe and the world after the war has proceeded. The transport system has been improved; railways have been restored, and ports re-opened. Shipping has increased; fertilisers have been made available for the fields in various parts of the world; and the peasantries in the East and in all parts of the globe have returned to their labours. The harvest prospects for this year are distinctly better than last. In this country production has been increasing; and a great effort has been made in the coalfields with excellent, if still insufficient, results. Nevertheless, other things have occurred, and on balance the position is worse than it was when we last discussed it in your Lordships' House.
The most sensitive point, as we all know, is how this country can make payment for goods from abroad which are indispensable to our national economy. Grave speeches were made by many of your Lordships in the previous debate, and various suggestions were made. But earlier this month, in a speech by the
6
Chancellor of the Exchequer at Edinburgh, we heard this language:
" The position, so far as our balance of trade is concerned, is definitely worse than it was six months ago."
And he went on to say:
" We have exhausted our loans from abroad and we are rapidly exhausting our final gold resources. If we allow those to be completely exhausted we shall not be able to buy enough food to live on, or enough raw materials to keep our production going."
At the present rate of depletion these resources will be exhausted by next autumn. It is in the light of that statement by the responsible Minister speaking for the Government, the Chancellor of the Exchequer, that your Lordships meet to-day to consider the economic situation of the country.
Last August I had the privilege of opening what was then a two days' debate on the economic situation. I attempted then a general survey, but to-day I propose to concentrate on one point only—the question of prices, and especially of taxation in relation to the level of prices. If, in spite of the various favourable factors, the situation has worsened, I suggest to your Lordships that the essential cause is the failure to secure a general lowering of prices in this country and in the world. In an admirable speech in the other place on February 12 the Chancellor of the Exchequer touched upon one point and, it seemed to me, rather over-simplified it. He used these words:
" If we are to achieve a balance of payments, we must gradually increase exports, and if we cannot increase them sufficiently we shall then be driven to reduce our imports still further."
That is usually accepted as a plain statement of obvious fact. But for the moment he left out, as most speakers on this subject are accustomed to leave out, one point—namely, the question of the range of prices. The prices of our imports have increased much more than of our exports. If each unit of imports were cheaper, we could buy a greater quantity of imports without increasing our exports.
It seems that the only way to increase the volume of imports is to increase exports. It is not so, however, because if imports all round were cheaper we could buy more for the same amount of exportation. Ultimately, therefore, the question comes back to prices. Here, the United States dominate the situation; and, by and

7
large, American prices determine the range of world prices. As we all know, during the last six months, and for rather longer, American prices for the main commodities have greatly risen. Whether this was due to the removal by Congress of controls some time ago is not for us to discuss. We have no title to intervene in any way in matters of American domestic politics. However, we are entitled to draw attention to the way in which this increase in American prices has affected us all in this country, in Europe and, indeed, throughout the world. The Marshall Plan is most generous and very welcome, but it can do little more than counter—even if it does succeed in countering—the injury that has been done to the economy of the world by the great rise in American prices. We have used up rapidly the whole of the American Loan, long before it was expected on either side that that would occur. The effect now is to reduce the volume of imports that we can buy from America with the same amount of exports. We in this country may sweat and toil, and we may forgo great numbers of the commodities that we need, only to find that a large part of the result goes down the drain owing to the great increase in the dollar prices of essential commodities.
Mr. Truman, President of the United States, has again and again drawn the attention of his nation to the effect of what he has called "this terrible rise in prices." The effect there has been to cause throughout the working classes in the United States a universal movement for higher wages. That movement has been successful and has inevitably caused a still further rise in prices, resulting in another round (as it is called) of wage increases, with similar results; and a third round is now pending. As the President reported to Congress a month ago, the upshot has been that the real wages in 1947 were not higher than, but were slightly below, the real wages in 1946. This continual increase in American prices, reflected in the charges for goods everywhere, is the worst thing that has happened in world economics in recent times. On the other hand, I submit that the best thing that has happened during the last few weeks has been some recession in those prices. If there were to be, as in 1929, a sudden deflation, a catastrophic fall resulting in bankruptcies, contraction
8
of industries and widespread unemployment, that equally would be a disaster. But a gradual and continuous decline could do nothing but good, both to the American people and to all the peoples of other countries. We know that this recent break in commodity prices has been considerable, but we learned from Washington a few days ago (February 18) that the fall so far has done no more than wipe out about 60 per cent. Of the increase in prices since November 1, 1947. It has not yet even eliminated, or nearly eliminated, the effect of those increases.
The price increase in the United States diminishes the quantity of the imports which we can afford to buy, and the price increase here in this country decreases the volume of the exports that we shall be able to sell. Sir Stafford Cripps and the recent Government Statement have made that abundantly clear; everyone understands that. Of course, we are all familiar with the vicious spiral. We know that rising prices due, in the first instance, to war destruction and shortage of production, cause increases in the cost of living. That brings about a natural and inevitable demand for higher wages. The cost of production is raised by a general increase in wages, and so prices are raised once more and our exports are handicapped by their greater cost. When this goes on continuously, time after time, ultimately in various countries there is for the people a lower standard of living. This, of course, is countered by an increase in the paper printing of currencies, which results in the collapse of the currencies; and economic chaos ensues. That is the vicious circle or spiral. If we wish to have a virtuous spiral, we must reverse the whole of that process. I am submitting to your Lordships now that we ought to concentrate our attention upon the reduction of prices. If prices are lessened, the cost of living is lessened. Then we have a lower cost of production without debasing the standard of living of the people. If we have lower prices, we have more consumption.
If that point is established, I come to my second and my only other point, to consider how far the policy of this country in the matter of taxation tends to keep prices down and how far it tends to raise them. The Budget is in sight, and this is a very topical inquiry. Our economists tell us that it is essential to have a high

9
level of taxation in order to mop up excessive purchasing power; that there is too much money chasing too few goods, and therefore that the best thing to do is to mop up that excess of money into the Treasury by taxation. That doctrine has been accepted by almost all our financial authorities. I hesitate to express an opinion on this matter, but I am one of the very few people who have in public expressed great scepticism as to the value of that doctrine. In the opinion of some of us it needs to be carefully used and closely restricted; and indeed not to be employed as a general specific for the cure of our ills. In my address to your Lordships in moving a similar Motion last August, I emphasised this point, that in this regard we ought to reconsider our fiscal policy. The shortage of materials and goods would lead to a rise in prices, but such a rise has to a great extent been met by the price control of necessaries, which has, on the whole, been successful; it has been able to hold prices in spite of the excess of demand over supply. With regard to luxuries, the prices have undoubtedly risen greatly and that, to some extent, diverts labour towards those trades instead of to the more necessary trades. The effect of that is small, taking into account the whole body of the nation and our industries in general. That matter, too, is largely governed by the control of materials, because with the hand which our Government now have on the allocation of materials to various industries they can prevent an undue flow into the non-essential trades. Those considerations therefore, as I suggest to your Lordships, are comparatively unimportant.
So far as the staple industries are concerned—the mines, the chief textile industries, agriculture, and the supply of capital goods—the diminution of purchasing power in the shops is not a consideration that matters, and the mopping-up theory has no or little validity. Furthermore I submit to your Lordships that this other point has to be taken into account: that if the working classes wish to buy things the imposition of taxation will not stop them. There are now enormous accumulated savings in the savings banks and similar institutions which are quite liquid. If a working man wants to buy furniture or a radio set, or whatever it may be, he can withdraw the necessary money from that which during the war
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years he has accumulated in the savings bank or other institution, and this is now becoming recognised by the Treasury. As the Chancellor of the Exchequer said not long ago in his speech at Edinburgh:
" This year there has been a great volume of withdrawals, which has made it impossible to reach the target of new savings that was set."
The figures that have been published show that in the ten months of the current financial year, net savings fell from £276,000,000 to £170,000,000, so that more than £100,000,000 has been withdrawn—if I may add a term to the economic jargon of the day, we may say that £100,000,000 has been "de-mopped." The well-to-do classes, it is well known, are not living only on their incomes—such as they are—after taxation. As all the world knows, there has been a great capital appreciation in recent years, partly due to the late Chancellor of the Exchequer's policy of cheap money, and those who have capital on hand in many cases, if they desire to indulge in expenditure in one direction or another, withdraw the value of some of the appreciation on their capital. Therefore, the deterrent effect or the mopping-up effect of taxation in lowering prices is indirect, uncertain and frequently ineffective.
On the other hand taxation undoubtedly has an effect in raising prices. It quickly comes to be regarded by the working classes, and indeed by others, as part of the rising cost of living. They are determined to maintain their standards of life, or even to improve upon them, and if part of their previous or their present income is removed by taxation, they seek to make it up as best they can. Again, to quote the speech of the Chancellor of the Exchequer in another place, it is clear that he realised this because he used this language, and I would ask the special attention of your Lordships to this point because it is vital:
" These general taxes undoubtedly reduce the expendable portions of all personal income, but there is always a tendency for those incomes to rise wherever possible to counter the taxation effect."
That is really the secret of the whole matter. If you tax workers under P.A.Y.E. and take away perhaps 10 of their income in order to prevent them spending it, the next thing that happens is that, very naturally, the trade unions ask for a 10 per cent. increase in

11
wages, which, in present circumstances, it is impossible to resist, and thus the workers have as much money to spend as they had before. The only difference is that prices have risen all round, through the increased cost of production, both for those workers and for everyone else. So there again, by this policy of high taxation in order to mop up expendable income, the State is itself creating another vicious circle of its own.
If the effect of taxation is, as I say, to raise wages and to also give an incentive to an increase in profit in order to counter taxes, the rise in price that follows results in more cost to the State itself. Social services cost more; more money has to be found to grant the same real benefits; the Defence services, the Civil Service and Government supplies everywhere cost more, and the State has to make a larger expenditure in order to obtain the same results. Therefore, the conclusion is that if more taxation contributes to higher prices and higher prices contribute to more expenditure, the State will need to impose more taxation again in order to provide for its own services. All the time there is a continual pressure for better and more adequate social services, a pressure with which we must all sympathise; but there is always the danger that we shall adopt that glorious principle of public finance, so popular in every democracy: "More from the Government, and less from the taxpayer."
The Chancellor of the Exchequer and the Government have, therefore, made an appeal for a great effort to hold prices, to prevent them rising further and, if possible, to promote some reduction. The trade unions have agreed, in principle, but on the condition (which is surely a proper one) that the ruling shall apply also to profits and to salaries. Profits it is true are, by subsequent taxation and especially by Sur-tax, largely taken away from those who receive them. But all profits are by no means taken away, and there is always the financial inducement to raise profits even though a great part of the increase has to be surrendered to the Treasury. There is no doubt whatever but that in many industries, both in distribution and production, profits are now excessive, and extremely high dividends are being declared, far beyond the normal, in a large number of companies. This again is largely due to high prices.
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Prices are so high that these companies have no means of disposing of their receipts except by a large distribution of profits. Here again I would quote Sir Stafford Cripps, whose recent speeches have been the compendium of wisdom. In the same speech in another place he said:
" Price reductions will lead to reductions both in overall and in distributed profits, and a decrease in prices is far the most satisfactory way to get that reduction of profits."
So if he can bring about an all-round reduction in prices, it will, to a certain extent, meet the legitimate and proper demand of the trade unions for a decrease of profits if there is to be a standstill on wages.
I am sure your Lordships are well aware of it, but perhaps I may remind you of the present situation of national expenditure compared with that of pre-war days, for the present rate of taxation is not necessary in order to meet the needs of the Exchequer. The Digest of Statistics tells us that before the war, in 1938–39, the national expenditure was, in round figures, £1,000,000,000 (actually it was a little above that; it was £1,019,000,000). At the peak period of the war, in 1944–45, it had risen to £6,000,000, 000—that is, it had increased approximately sixfold. In the present financial year it has been budgeted for £3,000,000,000. I reiterate, before the war it was £1,000,000,000; at the peak period of the war, £6,000,000,000; and now £3,000,000, 000.
We must remember that half the cost of the war was met from taxation; the other half was borrowed. So soon as that expenditure diminished, by reason of the cessation of the war, our first duty was to stop borrowing; and in effect, of course, that has been done. But still there is a very large surplus. In his broadcast a few days ago Mr. Dalton told the country that in the present financial year there has already accrued a surplus of £750,000,000 over the Budget estimates. My plea to your Lordships is that we should press for a substantial reduction in taxation in the next Budget. I do not ask, or expect, any reply upon that from the spokesman for the Government today, and I should be loath to suggest any directions in which that relief of taxation should go; that would be a matter for separate discussion. But I am convinced

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that the relief ought to be very large, and that it should increase year by year. I believe that that would result in a great increase in national productivity. Viewed as a whole, our economic situation is most paradoxical. The banks are full of deposits, the people have vast accumulations of savings, the Exchequer is overflowing with money; and yet we are hard put to it to know how to buy enough food to feed ourselves and sufficient materials to keep our industries going. Mr. Dalton told us that the Treasury Budget is over seven hundred millions to the good. The recent White Paper told us that the trade balance is nearly seven hundred millions to the bad. It is impossible to set one against the other because the first is pounds and the second is mainly dollars.
What then are the conclusions from this survey? I submit that they should be these. First, that it is essential to reduce the general level of prices. The right way to achieve that, taking a long view, is, of course, to increase supplies. That depends upon the numbers and skill and industry of our workers, upon the enterprise and efficiency of our managers, and upon the cleverness and success of our merchants, chief among whom to-day are the Government buying Departments. Whether their work is well done, indifferently done or badly done, the public cannot judge, except by results. I am not sure that those who are now in charge of food and supply and transport and shipping command the same degree of confidence as those who performed those functions under the Coalition Government during the war. If the Government buyers are unsuccessful in their purchases, we cannot tell how far that is unavoidable and how far it is due to lack of skill. Meanwhile, until long-term improvements in productivity can be brought about, in this and other countries, we must secure, by all the means we can, a standstill in prices. That demands a standstill in wages, profits and salaries. The Government have appealed to the nation with great courage and energy, and they have faced the unpopularity among their supporters that might ensue from an appeal for a standstill in wages. The Trades Union Congress, however, with a high sense of responsibility, have accepted this plea, and have undertaken to do their best to carry such a movement into effect. Their attitude throws into clear relief the
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callous, mischief-making irresponsibility of the Communist Party—happily only a very small body in this country, amounting, I believe, to about one in a thousand of the population.
The Federation of British Industries to whom the appeal has also been made, have responded in a spirit of good will, and we all await with hopeful expectation the specific proposals which they may make. It is now for public opinion, and for this House as an exponent of public opinion, to express approval and support of this movement to try to hold prices as a key to the entire situation. My belief is that in this matter your Lordships should also call upon the Government to reconsider the policy—hitherto generally accepted by all Parties, and certainly by the bulk of professional economist opinion—that high taxation is a means of keeping down prices and a method of preventing inflation. I have submitted reasons for thinking that in the long run it may have the opposite effect. Our economists tell us that we ought to be ready to make any sacrifices in order to hold the economic position—and they are right. But they seem to me to be looking about to see what further sacrifices they can suggest, even if on balance they are not a help but a hindrance to the object which they have in view.
My belief is that we should not continue taxes which were accepted for war but which are not needed by the Exchequer for necessary expenditure in peace; I think that we should call upon the Government to exercise stricter control of expenditure in general. I notice that in the Departmental Estimates for the coming financial year, which were published a few days ago, the general figure represents a decrease on last year, on net balance, of only £250,000,000. That is an extremely small decrease when we take into account the figures which I have given and which I again reiterate—national expenditure before the war, £1,000,000,000, at the peak of the war £6,000,000,000 and to-day £3,000,000,000. I suggest that a reduction of £250,000,000 in Departmental Estimates for next year seems quire inadequate. The securing of lower prices through taxation is only a minor expedient. The major effect, in the long run is to raise prices. What we need, as I have said, is to reverse the trend hitherto, and by so doing to grant to the

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nation what would be regarded as a great alleviation of its burden. Particularly would this plan be effective if it were accompanied by an active intensification of the Savings Campaign. Meanwhile, to hold the position temporarily, during the latter part of this year and in the immediate future, we shall have to look for provisional aid to the Marshall Plan, and possibly to the Dominions, if they would continue—as they have hitherto most generously done—to send us supplies on easy financial terms; but that last expedient cannot be more than provisional. After all, it is only the principle of Artemus Ward: "Let us all be happy and live within our means, even if we have to borrow the money to do it with." We have had a production campaign, especially successful in the coalfields, and a savings campaign. Both are still being waged. Now we are fighting what I may call the battle of the prices. The Government are calling upon the nation to mobilize for that. It is the task of the nation actively and quickly to respond. I beg to move for Papers.
3.23 p.m.
VISCOUNT SIMON: My Lords, the noble Viscount who has raised this Motion has spent much of his time in a closely reasoned argument about the relation between high taxation and prices and in challenging the view that in some circumstances high taxation is the means of preventing inflation. He always speaks with such careful preparation, and draws on so large a fund of knowledge, that I feel sure everybody here will want to study what he has said. Certainly I shall want to read it over again before I feel confident that I followed his whole reasoning. But we shall have other economic debates. Indeed, I think that the date of this particular debate is rather unfortunately chosen. We are expecting shortly the Government's Economic Survey for 1948. What that will contain, of course, no one who is not in the secret knows; but I think I may say in advance that if it is of the importance of the similar document published for the previous year, those on this side will certainly desire an early discussion on the economic situation in the light of that White Paper. In the meantime, we are holding an interim discussion, in which I have no doubt it will be useful to consider what has
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been said by my noble friend Viscount Samuel.
We had an earlier debate (not that to which the noble Viscount referred) on the Second Reading of the Finance (No. 2) Bill, on December 18, when a great deal of ground was covered and when the noble Lord, Lord Pakenham, was in considerable difficulty in replying. The hour was late; Christmas was very close; the noble Lord was at the time charged with immensely important affairs in Germany; he was called on to deal with a variety of matters, and he had already made several speeches that day. I can quite understand how it came about that his reply on that occasion did not cover the ground. All I would ask is that in the speech he is about to make he should deal with one or two of the matters which were raised and were not answered on that earlier occasion, so far as they are still relevant. It is of only secondary importance, of course, to go back over what has already happened. It is important mainly because it may guide us to form a wise conclusion about the present very anxious situation. I confess that I still feel, and I think a great many people still feel, the greatest doubt—and, if you like, confusion—as to what is the real explanation of the prodigious rate at which the American Loan ran off, as it did, in the second half of last year. I find it most difficult to believe that the explanation simply is, "Well, American prices rose to such an extent." I admit at once that that was a most important factor. But I have never seen any attempt to equate the one with the other.
When we bear in mind that in the last Economic Survey we were told that it was the intention of the Government to use at the rate of £30,000,000 a month the Loan which they had secured; that they calculated that they would have £600,000,000 left at the beginning of the year 1948, and that therefore they would still have a substantial sum to draw on, not only this year but next year as well, I feel that the matter does require some explanation. It was manifestly a mistake when the previous Chancellor of the Exchequer, Mr. Dalton, said that we could safely discount the new provision which came into force on July 15, by which we undertook to pay out in dollars in respect of current sterling liabilities. It was a mistake, because unquestionably that would lead to a tremendous, sudden drain at a most critical time. Without

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wishing to prolong the debate on what may be called a historical point, I would say that it may be rather important to know a little about it. I would add the question: What is the amount of the American Loan which is still available? Or has it all been used up? I think it was said that £100,000,000 was left and was frozen after the severe drainage away of so large a part of the Loan. How does the matter stand now? Is there still a portion available, and if so, how much?
So far as the Minister can properly indicate—and I wish to be reasonable about it—how far do the Government anticipate any help from the Loan? How will matters stand when the Marshall Plan, which was rightly characterised by the noble and learned Viscount as most helpful and generous in intention, comes off? Much depends on when it comes off, at what figure it comes off and how we can carry on a very difficult situation until then. It depends on future happenings, and I do not expect any very clear statement about that. The point I want to make, particularly in the light of what has been said by the noble Viscount, Lord Samuel, is this. That we are in a grim situation, I suppose nobody denies; and every serious-minded person is exercising his brain as well as he can on this most difficult subject. It seems to me that we can deal with it only by the careful handling of matters which are within our control. The noble Viscount, Lord Samuel, said just now that there had been a most tremendous rise in American prices. So there has been; but we cannot control that. I venture to think that we should be exceedingly unwise if we preached to the Americans about it. The things we have to concentrate on, I should have thought, are the methods and management by which we may hope, within our own sphere, exercising our own powers, at any rate to mitigate the dangerous situation.
I have formed the conclusion, which I submit to your Lordships, that really we have suffered because there has been no very clear course steered as between action which has an inflationary tendency, and action which may be taken—and I think under the auspices of Sir Stafford Cripps is quietly and skilfully being taken—to correct that tendency. Nobody wants to criticise individuals as individuals, but it seems to me that the
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action and conduct of the former Chancellor of the Exchequer at the Treasury had a distinctly inflationary trend. I cannot altogether forget the rash assurance which he offered some time before—I think it was to the Trades Union Congress—when he said that the fear of inflation was diminishing and had largely passed away. I think that was a very hopeful view, and what has happened since by no means confirms it. The importance of it is that in the early years of the life of this Government (in these matters, of course, the Chancellor of the Exchequer speaks with authority, though the whole Government share his responsibility) there was nothing like the dread of the consequences of inflation that there ought to have been. It was difficult. An appeal had been made at the General Election to the mass of our voters which, while it did include warnings that we were faced with difficult times, laid too much emphasis on the good time that might be coming if only the Socialists were returned to power. The practical judgment of the mass of the public did not have regard to the danger arising from an inflationary trend.
I would like to give three examples. Take, first, the effort made by Dr. Dalton to borrow at what must now be recognised at artificially cheap rates. It was a policy pursued at a great cost. The last of his issues, if I remember rightly (a 2½ per cent. issue), fell almost at once to 90 and stands to-day somewhere around the 80s, with consequent influences on all other Government stocks. At this very moment the investor in Consols will get a bigger rate of return than before Dr. Dalton started. I think when he started, the return, as figures were then, was something over 2½ per cent., and to-day it is over 3 per cent. And this was all done at the cost of a greatly increased creation of credit by the Bank—the creation of more money at the very time when, in Dr. Dalton's own words, the great difficulty was that there was too much money chasing too few goods. That is a policy which I believe the Government, in their wisdom, are now unwilling to pursue and are doing their best to correct. But it is an illustration of what was happening a little while ago.
Take food subsidies as a second example. There is, in fact, a great deal of misunderstanding as to the purpose for

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which food subsidies were originally instituted. On this I may speak with a little knowledge, as I had something to do with it at the beginning. The original idea about food subsidies was this. We sought, by setting aside, say, £50,000,000 (as it was in the early stages of the war), to cancel out the immediate effect of the war on the prices of things brought from overseas. The moment a war breaks out it becomes more expensive to bring things across the oceans of the world to this country: ships may be submarined, the rates of insurance rise, and there is immediately an automatic increase in prices. At that time it was very desirable to cancel out that increase at once, if it could be done. That was the way in which food subsidies were regarded at first.
There was a second very important consideration, which was this: that if the prices to the consumer of prime articles of food could be prevented from rising, then in the pinch of the war some, at any rate, of the risk of there being demands for higher wages, possibly stoppages, disputes, arguments, and even strikes, was cancelled out. It was essential under war conditions that everything should be done to minimise that danger. In other words, it is not really the case that food subsidies were originally conceived as a social service. Indeed, it seems to me that as a social service they are extraordinarily clumsily constructed. A social service ought to bring the resources of the State to the help of those who need them most. That is the nature of social reform. But these food subsidies operate on the breakfast table and the dinner table of every one of your Lordships, whatever the income you possess, quite indiscriminately, and without the slightest regard to the fact that they have to be paid for out of the general taxes to which everybody contributes, and which to-day are, in fact, very largely a contribution from the poorer classes. I say, with respect, therefore, that it is a fallacy to suppose that food subsidies were originally of the character which they now assume.
I would ask the noble Lord if he would kindly tell us what is the present policy of the Government in regard to food prices. Are they fixing them at some figure, notwithstanding that the prices of food may rise? What is the view which they take of that problem, which is said now, I think, to involve
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£392,000,000 a year, or thereabouts? And how is that question affected by the fact that the cost of imported food is rising so rapidly? I instance things like Canadian cheese or butter. If I understand correctly what I have read, the present Chancellor of the Exchequer is letting the price of, say, bacon rise. I am not saying that that is wrong, but it seems to me that it would be of assistance if we knew what was the present policy of the Government in regard to food prices.
In the meantime the most absurd things are being said in certain quarters. I do not know whether your Lordships have had your attention called to a pamphlet which was issued the other day from the Labour Party headquarters. I do not accuse the Government personally of drafting it; I only say that it was issued and is being circulated by Labour Party headquarters. It dwells on the increased prices of foodstuffs from America, and so on, and I would draw your Lordships' attention to this sentence which it addresses to the working man:
" But you don't have to pay them when you buy your food in the shops. Why? Because the British Government pays nearly £400 million a year towards the cost of your food, so that you don't have to pay inflated prices."
One asks, in all humility: And where does the British Government get it from? It gets it by taxation which hits every sort of person, and indeed, if analysed, it hits heavily the very people who are themselves, at the same time, enjoying the benefits of the benevolence of the British Government in providing £400,000,000 a year.
I venture to think that that is a second example of a policy in which there has been an inflationary trend, although I fully recognize the grave difficulty which would face anybody now in dealing with the question of food subsidies. I take a third example, and I would like to ask a question as to the capital expenditure which has been authorised since this Government came into power. I believe that if you add the amounts together it is something in the neighbourhood of £1,000,000,000 in less than three years. Capital expenditure is not very difficult to justify if you take one item at a time. It is quite easy to do what indeed Dr. Dalton did in his broadcast last Saturday—to take certain expenditures and challenge his hearers as to whether that is not a good thing. I do not doubt at all

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that if prudently administered there are all sorts of directions in which expenditure of a capital nature may appear to be an excellent thing provided that it is suited to the times in which we live.
But the question is not that. The question is to add up all of these capital expenditures, see what the total comes to and then ask yourselves: In the circumstances through which we are now struggling, can the spending in capital expenditure by Government authorities of so large a sum, collected in taxation by the Government, possibly be justified? What matters is the total. I certainly understand that the present Chancellor of the Exchequer—and indeed, the Government as a whole—has an eye on this problem, but the question I would like to ask is not whether they have made declarations that capital expenditure must be watched, but whether they are really engaged in reducing capital expenditure, so far as it is within their power, and, if so, what kind of amount is now being taken off. I feel that it will be found—at any rate, so far as my own inquiries and information go—that up to the present, although this danger (and it is again an inflationary danger) is admitted, none the less in point of fact the amount of the reduction in capital expenditure is very small indeed. Perhaps the noble Lord opposite, to whom I gave notice of one or two queries, may be able to tell us in his speech what is, in fact, the reduction that has been effected.
As I have said, I think in the policy that is now being pursued there is a mixture of two voices, and no steady steering along a defined course. To my mind, you can see that if you compare what was said by Dr. Dalton in his broadcast last Saturday with what has been said with great clearness and courage by Sir Stafford Cripps. I am not sure that I would have called the broadcast entirely a Party political broadcast. A good deal of it seemed to me to be rather in the nature of an attempted justification of the expenditure authorised during the time of office of the former Chancellor of the Exchequer. It is perhaps what might be called in this learned and classical assembly apologia pro largitione sua. The end of the broadcast contained a sentence to which I wish to draw attention before I sit down, because if this is the way in which the case has been put to the people
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of this country, who want to do what is right and who look for guidance, who know this is a very difficult subject, and who are bound to depend very much upon what they are told by those they respect as leaders, I think it is a serious matter. I have here a note of the broadcast itself, and I find at the end of it a reference to the effect of stabilising prices which seems to me disturbing. What the speaker said was this:
" As prices are brought down, so will the value of money be raised. Wages and salaries will go further and buy more, and so will pensions and all other fixed money incomes."
Now I quite understand the hope that if you proclaim a standstill, things will not change as they would if you did not secure a standstill. But really, at this time of day and in our present conditions, to say that the real income of the wage earner or the salary earner is going to be improved, seems to me a most unjustified and a most serious misstatement. The noble Viscount seems to disagree, but I think that is so. I do not wish to be unfair at all, and I think Dr. Dalton said this:
" Prices and profits must come down, not go up any more."—
and then he refers to Sir Stafford Cripps in very proper terms. He continues:
" Prices are too high and this is raising the cost of living."—
Then comes the passage I read:
" It is no use letting wages chase prices upwards. As prices are brought down so will the value of money be raised. Wages and salaries will go further and buy more and so will pensions and all other fixed money incomes."
That is really a delusive hope at this moment. The very best you could hope to achieve, I think, would be a standstill. The Government know perfectly well that the best they can hope for is that the real incomes of the people can be stabilized. Even so, of course, the standstill may not be a very adequate cure if (as at least some people think), we are being swept nearer to the rapids. I respectfully submit—and I do it without being censorious—that it is playing on the superstition that there are vast sums of profits to be tapped in order to improve the wage earner's conditions. There are not. It is an untrue and therefore a very unhappy thing that that should be the idea created in the mind of the decent citizen of this country. I did not know it at the time but I saw

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afterwards that in The Times leader today the same point is made. The first leader, it seems to me, is right when it insists that it would
"…create a completely false impression…to suggest that an improvement in real wages by reducing prices while wages are kept stable is even remotely possible at the present time…To advocate a raising of the standard of life now is to ask for the moon and encourage dangerous delusions."
I should have thought that we would do well in difficult circumstances if indeed we could secure a standstill. But I would invite serious-minded men of all Parties to reject and to expose the fallacy—for it is a fallacy—that there is waiting to be drawn upon some great accumulation of wealth which can be used at this time, and in these difficulties, for the further improvement of real wages; it is not the fact at all. I cannot think it wise to speak as though the wage and salary earner will continue to have an increasingly better time. The fixation or the reduction of prices is to people who speak in this way a reason why real wages should rise. That is merely to announce cheerfully that we are "rounding Recovery Corner." The Lord President of the Council used that phrase some time ago, and I do not think that it is a fair expression of the extent of our anxieties at this moment.
Sir Stafford Cripps is not putting forward so encouraging a note. He is insisting that the position is not at present improving but that the position as regards our balance of payments for external trade is infinitely worse. There is an undeniable danger of a decrease in real incomes, and a testing time may be close which will call for sacrifices from everybody. I am the last person to adopt an alarmist tone; but, after all, is it not the fact that at present, in order to balance our external trade, we are drawing to the tune of something like £40,000,000 a month on our very reduced resources? Or is the figure more than that? Perhaps the noble Lord will be able to tell us what is the actual figure that we took from our reserves last month, and are taking at the present time, in order to maintain this precarious balance. Obviously, that is a very temporary expedient. And whilst I am not presuming to dogmatise on things so difficult as this—indeed, I sympathise with all my heart that these things should come upon any Government in this country—I
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beg the noble Lord opposite to tell us, without using the language of alarm, whether we ought not to recognise that we are facing an iron time which may, unless we are wise, get worse. I hope he will discourage the idea that any section of the population, however deserving or hardworking, can in these circumstances look forward to anything except a full share in the burden which lies upon us all.
3.55 p.m.
LORD PAKENHAM: My Lords, I know that the whole House is grateful to the noble Viscount, Lord Samuel, not only for giving us the chance to discuss these grave matters at this particular moment but also, if I may say so, for the elevation, detachment and wisdom with which he has approached a dull subject. I cannot help mentioning that a few days ago a friend of mine who has never been to a debate in this House told me that he always read the debates, and that of all the speeches he preferred those of the noble Viscount, Lord Samuel. I do not know what his politics were, but I asked him whether it might not be a good idea to come and listen to the noble Viscount one afternoon; but he said No, he preferred to keep his illusions. I can only hope, though he has not asked me for a ticket this afternoon, that he has overcome his diffidence and has listened to the very fine speech that we have heard. The noble Viscount has given not only me but a much more important person than myself, the Chancellor of the Exchequer, a great deal to think over. I am sure that, with his experience, Lord Samuel will not expect me to provide an answer to this question of the relation of taxation to prices, because that matter brings us very near to the Budget.
The noble and learned Viscount, Lord Simon, was extremely charitable to me, in a most scintillating manner, and I take it as a kind of compliment to the present Government that he concentrated almost without exception on the alleged errors of a past member of the Government, and of an unspecified political scribe who writes what I believe is called political literature—though these writings do not always rise, in any Party, to that level. I have not had the pleasure of reading the pamphlet. I do not know the gentleman who wrote it, or the gentleman who wrote the Industrial Charter, or the gentleman who

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concocted the words somewhere about the capital expenditure programme of the Government—words which, I believe, were endorsed last October at Brighton. The suggestion was that the capital programme was nothing like enough. I suggest that that gentleman, and the gentleman whom the noble Viscount has in mind, should fight it out and later report to your Lordships' House. I am bound to say that the noble Lord, Lord Woolton, who presided at the Brighton Conference, acclaimed this pamphlet, including the passage on capital expenditure to which I have referred. At any rate, on the subject of capital expenditure, since I was asked a direct question by the noble Viscount, I would remind him that the programme for the year 1948 is to bring about a cut of £180,000,000. It was not until the middle of December that we had an opportunity of discussing these things, and I am sure the noble Viscount would not seriously suggest that nothing is being done. There is a cut in the construction of factories: I know that on the best authority; and, generally, there will be this cut of £180,000,000. I hope the noble Viscount will take it that this cut will be made, although I cannot give him a figure of a cut between December and February—indeed, I should hardly have thought that in the case of capital expenditure one could expect a figure to emerge in so short a time.
May I take up one more of the noble Viscount's incidental points, before I turn to a general discussion of the situation and what occurred last year? I would remind the noble Viscount that the Government's attitude on food subsidies has been stated more than once. As to what the Budget will say on this question I am naturally as ignorant as the noble Viscount; and if I were to say anything it would be the sort of indiscretion which does not happen twice in a lifetime! Although my experience of politics has not been very long, it has been fairly chequered and I would say that I have never known a man who took so much interest in the young people of his own Party—and also of other Parties—as Dr. Dalton; and he took effective steps to lead them. While he is temporarily down, although he is a buoyant figure who will come up again, I feel it right to put that on record, along with the criticisms that have been made of him.
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Whatever may be our disagreements this afternoon, I am glad to find that they appear to be less than on some previous occasions. It seems to me that five, things, at least, should go out as agreed conclusions from this debate. First of all, the country is in an exceedingly tight spot. Secondly, the people are making a mighty effort. They are living on smaller imports than they were before the war; they are exporting more, and producing more, than ever before in the history of this country, so far as one can calculate. Those things should certainly go on record. Thirdly, we must all do still more than we have been doing and—perhaps even more important—find out what is the most essential work that it lies in our power to perform. Fourthly, we must at all costs avoid inflation. Fifthly, our own recovery is inextricably bound up with the recovery of the Empire, and particularly of Western Europe—although I will not deal with that point this afternoon.
There has been little doubt in the country as to the tightness of the spot in which we find ourselves since the convertibility crisis broke upon us in August. The seriousness of the situation has, very properly, been underlined by both the eminent speakers who have preceded me to-day. During the year 1947, as the recent White Paper on the United Kingdom Balance of Payments (Cmd. 7324) informs us, there was a net drain on United Kingdom gold and dollar reserves of £1,023,000,000. Perhaps I should have mentioned this White Paper in advance to the noble Viscount, for I am not quite sure that he is fully seized of its contents. I hope that those members of your Lordships' House who pressed on previous occasions for a White Paper will find a satisfactory answer in the White Paper now before your Lordships. Therefore, unless the House press me very strongly, I will take leave not to go into great detail about the figures set out.
However, I would remind the House that the drain which reached its peak at £156,000,000 in the month of August had come down to £48,000,000 in the month of December, by which time, of course, it was still alarmingly high. In the month of January—I must report to the House what has not hitherto been published—the drain rose from £48,000,000 to £57,500,000. I hasten to say that this last figure is not quite as appalling as it

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appears; indeed, it is not really a characteristic figure at all. Certain special factors have been at work raising it considerably and, if there are any doubts on this point, I am sure that the noble Viscount who is to wind up the debate later this afternoon will set out those special factors. But there is no reason to suppose that it is characteristic. We have no clue as to what the drain is likely to be in the immediate future, although it is not difficult to form a rough idea of how serious the position is. The noble and learned Viscount, Lord Simon, asked how much of the Loan was left. £75,000,000 of the American Loan was left at the beginning of the year—with your Lordships' permission I will take the figures as at the beginning of the year—and if we add to that other reserves, and count in the £80,000,000 which is coming to us from South Africa, we may say that our reserves for the whole sterling area at the beginning of the year were slightly under £700,000,000. That excludes the Canadian Credit, the details of which I will not go into this afternoon.
LORD WOOLTON: Does that figure include our gold?
LORD PAKENHAM: Yes, but it leaves out the Canadian Loan, which raises some rather doubtful points. The gold drain in December was £48,000,000, which has risen, in an uncharacteristic month, to £57,500,000. However, it is expected to be less than that in the time ahead.
The noble and learned Viscount, Lord Simon, is naturally, and at the same time courteously, anxious for a more precise view from the Government as to how long the drain is expected to continue at this kind of rate, and how long our reserves may be expected to last With the best will in the world, in the circumstances, I (or even the Chancellor of the Exchequer if he were standing here) could give only a speculative forecast. But even that privilege is denied me to-day, since the Economic Survey for 1948, containing estimates of this kind will not be published for about a fortnight. The noble Viscount asked me when it was likely to appear. The latest information is that it should be available to the public in just about two weeks. The noble Viscount also asked me, incidentally, whether it would contain any clear statement
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of the Government's broad intentions regarding any credit we might receive from the United States. I think that on reflection he would hardly press that point. Indeed, he did not press it in his speech, because it will obviously be rather hard until we know for certain that we are to receive a given sum, and how much it will be, to say what we propose to do with it. That would appear rather an extravagant gesture on our part in the eyes of our generous American friends.
At any rate, that is as far as I can take this question of the drain from that angle this afternoon, in advance of the Economic Survey. I am the first to agree that we shall have to discuss all these matters at greater length when the Economic Survey is available.
VISCOUNT SIMON: May I inquire whether or not the Economic Survey will be published before Easter—because Easter is early this year?
LORD PAKENHAM: Oh, yes. My information is that it should be published within a fortnight. I received that information from a gentleman who is closely concerned in its finishing touches. Unless some unforeseen obstacle occurs, we may take that as certain.
How is it that our country has found itself in this position? We have been over this ground so often in your Lordships' House in the past year that perhaps I may be allowed to sum up rather briefly this afternoon the story as I see it. Before the Second World War, we imported a higher proportion of our essential requirements than any other great country, and we paid for only about five-eighths of them by physical exports. That was a thoroughly artificial, precarious and unsound position, as we all know now so clearly—though it does not mean that it would not be agreeable to get back to that position. In the future, whatever temporary assistance we may be fortunate enough to receive, we shall have to pay for what we buy instead of paying for only rather more than half of it; and that is a totally different situation from the one which most of us have been brought up to regard as natural and fitting for Britain.
That is not the same, of course, as saying that in the post-war era the British people are faced with an inevitable and indefinite prospect of a lower standard of

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life than before the war. We on these Benches believe, and I do not think the belief is confined to our Benches, that our pre-war resources could have been spent and allocated far more effectively than they were, that our man-power in particular could have been used much more fully, and that the product could have been distributed much more closely in accordance with the principles of social justice. I do not know that there is any great controversy about that at the moment, but, at any rate, that is the underlying doctrine behind the thought of the Government. During our term of office we have sought to honour that belief, and history will have to judge whether we have been successful or not in doing so. I am bound to say that the noble Viscount has frequently been very generous in calling attention to the fact that the public have shown a singular fidelity to the votes they cast at the Election, and it does appear that, with all our manifold imperfections, they believe we are attempting to pursue a worthwhile ideal.
When the noble Marquess, Lord Salisbury, the Leader of the Opposition, in a thoughtful speech last August, told the House that Britain had previously been a very rich country, and was now temporarily a very poor one, I think he put his finger on an important element of truth. But, as he would be the first to agree in regard to an isolated observation of that sort, it is not quite the whole truth. Even to-day, with all our privations, our standard of life is still much higher than that of most countries of the world.
THE MARQUESS OF SALISBURY: My point was that our standard of life is high, and we rejoice in it: but can we afford it?
LORD PAKENHAM: Replying shortly, if I may, I should say that if we properly dispose of our affairs in the years ahead, we can certainly afford a standard of life much higher than that of most countries of the world; but I quite agree that we are to-day a country that is faced with great poverty unless certain fundamental adjustments in our whole national economy are made. That is where I do agree with the noble Marquess, and that is perhaps one of the main points, or indeed the main point, that he was making at that time. As a potentially rich country, but one that
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trembles this year on the brink of extreme poverty, we are confronting a period of prolonged struggle to make both ends meet. In 1946 things, on the whole, went a good deal better than was expected; it seemed to everybody at the time that in fact our expectations of improvement were more than fulfilled.
In 1947 almost everything went much worse. The coal crisis in February meant that our export drive was certainly interrupted and by the end of the year reached only 120 per cent. of that of 1938 against the target of 140 per cent. The terms of trade that have been alluded to—that is, the price of our imports compared to that of our exports—were, owing to the world scarcity of primary products and also the general scramble for the exports of the Western Hemisphere, much more unfavourable than the Government, or indeed, I should think anybody had expected. Income from invisible items was negative as a result of the failure of countries like those in the Far East to recover.
What was the ultimate reason why convertibility could not be maintained? The noble Viscount has asked me to say very briefly, in a sentence or two as I think he would wish, how it was that the drain increased so rapidly in the middle of the year and how we were suddenly swept off this perch of convertibility. Looking back upon it, it is difficult to understand, though I do not know that most people forecast it at the time. I am not sure that the noble Lord, Lord Rennell, was not one of the most observant in this regard. But I think one would always expect that if our position were threatened there would be what, in old fashioned words, is called "a run on the pound," and that is exactly what occurred. In other words, foreigners saw that sterling was in danger and they took every possible step to move their funds from sterling into dollars Hence the sudden increase in the drain I do not think that is a process which is difficult to appreciate.
That was the situation when we discussed all these matters in the debate initiated last August by the noble Viscount, and certain steps were then outlined to the House and have since been carried out. First, there were the cuts in the import programme. They were not liked at the time by anybody, but they have been accepted and I do not think anybody has quarrelled with them. On

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the side where Government and citizens come together, and where a certain amount of initiative has to be shown by the Government and a certain amount by the citizens, I would single out the various steps that have been made to negotiate trade agreements with various foreign countries. I would mention the payments and trade agreements that have been negotiated with the Argentine, Belgium, Italy, the Netherlands, Portugal, Sweden, Switzerland, U.S.S.R., Egypt, Canada, Poland, Finland and Brazil. In all these agreements three objectives have been followed: first, to secure our essential imports; secondly, to maximise trade between ourselves and the other country, and, thirdly, to avoid any payment on our part out of our gold or dollar reserves. There have been one or two difficulties, but by and large these objectives have been successfully achieved in the agreements which I have mentioned. Perhaps the House would care to pay a tribute to the brilliance and energy with which a great network of this kind has been rapidly improvised by the devoted band of officials organised for the purpose when plans based on the convertibility conception had to be rapidly recast.
At the same time the House may, or may not, be aware that important steps have been taken to prevent the sterling area, apart from the United Kingdom, producing such a drain on our reserves this year. Since last August special arrangements have been made with the sterling area. There was a conference in the autumn, and now continuous contact is maintained between the officials concerned in the other sterling countries and ourselves. I think it is fair briefly to say that in the year ahead of us, the year 1948, anything that is drained away by the sterling area—and after all these reserves belong to them as much as to us—will be much easier to forecast, and that the sums will in fact be much more economical. I am not going to say that there was gross extravagance—that would be most unfair, because some of these countries needed things—but certainly things have been tidied up and we know where we are in relation to the sterling area far better than we did last August.
That brings me to the export drive itself, which is the core of our national struggle at the moment. The House will
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remember that new targets were set in September and that the programme of home investments has been cut in order to free resources for export. Discussions have taken place with industry about these new targets, and the response has been very satisfactory. Difficulties about some targets have arisen, owing to shortage of steel, and it is likely, therefore, that certain adjustments will have to be made. They will probably be explained in the Economic Survey when it is published. In January, 1947, exports were 112 per cent. compared with 1938. In August last the figure was 105 per cent.; in January this year 126 per cent. That is a marked advance and, undoubtedly, so far as it goes, taken globally, it is encouraging.
VISCOUNT SIMON: Is that volume?
LORD PAKENHAM: Yes, that is volume. I will not detain the House to consider the special difficulties created by the distribution of exports between different markets. I am sure that if noble Lords wish for detailed information, which I have brought with me in considerable quantity, they will let me know.
VISCOUNT SWINTON: Can the noble Lord give us in general terms what is the proportion to hard currency countries and what is the proportion to others?
LORD PAKENHAM: When I give a figure I like to give the right one, and I will not give that offhand. I dare say that before I come to the end of my remarks I shall have that information available.
VISCOUNT SWINTON: The noble Lord offered to produce further information if we wished. Could he also convert the percentages given into requited and unrequited.
LORD PAKENHAM: Speaking offhand, I would say that the proportion of our exports in 1946 to hard currency areas was 15·4 per cent. In 1947 I think it was 21·3 per cent. I may easily be wrong, of course. I have been given a figure of 15 per cent. for the Western Hemisphere, but I am going to be so bold as to question it. I am simply relying on my memory, and I am taking rather a bold step in questioning authorities who are so close at hand. My recollection is that 21·3 per cent. was the proportion

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for 1947. I have equipped myself in some detail with an account of the various measures taken to try to impel our exports in the direction of hard currency countries. Putting it briefly, of course, we have done everything we can in the way of allocations to encourage manufacturers and exporters to sell their goods in those countries.
Now let us look behind this figure of 126 per cent. of the pre-war total. We are exporting in terms of volume 126 per cent. of our pre-war quantities. Let us see what that means in terms of human effort. I am very glad that no one in this debate has suggested that the British people are not working hard. In all the circumstances they are working very hard, although they are not all working at the right things. The country is producing distinctly more than before the war and, as I have already said, more than at any time in its history. I would like to give some figures to show the increase in production since the crisis of August.
LORD CHERWELL: If we really are producing considerably more and if we are exporting only 26 per cent. more than before the war, seeing that our exports before the war absorbed only about 12 per cent. of total production, will the noble Lord explain how it comes about that we are short of practically every sort of article in this country?
LORD PAKENHAM: I think the shortage of those articles is greater in some quarters than in others. I would certainly say that the poorest section of the community are better off than before the war. I do not think that noble Lords on these Benches will doubt that. But there are grave shortages, particularly the shortage of food. In that case the shortage is very pronounced. However, I am afraid that the noble Lord who is himself a statistician must not resent the achievements which statements that I am about to place before him, will show. It is, I think, a pity that the noble Lord left the business. He was a leading governmental statistician, but he left that sphere for still higher flights of thought. If I may put it to him respectfully, he must not crab the work of his old colleagues. I will now give the noble Lord, who likes figures, some figures which will be readily intelligible to far less talented mathematicians than himself.
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Output has risen sharply since August, but perhaps it is fairest to make a general comparison between 1946 and 1947. So far as we can tell, the London and Cambridge Bulletin seems likely to be confirmed here by the Government figures of production. The latest index shows that there was an increase of production between 1946 and 1947 of about 7 per cent. That is to say, the index suggests that there was an increase of 7 per cent. between the two years. But between the second half of 1947 and the second half of 1946—which is perhaps the best index, for we believe that this shows that people responded to the crisis—the increase would be a great deal more than 7 per cent., something of the order of 10 per cent. If we took the figure for November, 1947, which I think is the last available, we should find that it was something like 19 per cent. higher than for 1946. If the noble Lord will accept these figures, he will notice that they point to a sharp increase between 1946 and 1947. His only hope would be 10 argue that 1946 was a much worse year than pre-war years, that less was produced in 1946 than in 1938. The best information suggests that there was not much in it between 1938 and 1946. However that may be, 1947 was quite definitely a year when there was more production than in any pre-war year. That is the information of two independent bodies—one may almost say rival bodies—of statisticians.
LORD CHERWELL: Does the noble Lord include in his definition of what is produced the work performed by people employed by football pools? Does re also, for instance, reckon that if twice as many people are taken in a railway train as were taken in the earlier years, it means that the railwaymen have produced twice as much? If you do that sort of thing, of course, you can get very favourable results. But if you claim that the actual quantities of manufactured articles have materially increased it seems impossible to explain why we are so short of almost everything in the home marker, in view of the fact that we have exported such a small extra proportion of our manufactured goods, as he has told us.
LORD PAKENHAM: I must ask the noble Viscount, when he replies, to explain in words which are quite simple, words of one syllable, the true nature of

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the London and Cambridge Bulletin which has now been published and which is available to the whole country. The noble Lord, Lord Cherwell, will have either to reject out of hand or accept what I am saying as the substantial truth. The noble Lord may come forward and say it is all a question of football pools. It is not true, though he may believe it. I have not the complete index in front of me, but if I may, I will now refer to some of the key industries from which I think the noble Lord has been inclined to draw his own examples. Let us take two or three of what we may perhaps call the "bottleneck" industries. I have particularly in mind coal, steel and cotton spinning. The House knows of the noble way in which the miners responded during the latter part of last year. Weekly production this year is still below the levels of November and December, but it is recovering from the holiday trough and compares well with January of last year. For January, this year, the percentage was 11 per cent. higher than for January of last year. The production of steel in January this year was 17 per cent. higher than in January last year. Cotton spinning output was 18 per cent. higher in January of this year than in January of last year.
These are figures which I should have thought the House would be glad to accept. I should not have thought there would be any reluctance in any quarter to seize on these figures, because to me they represent a splendid achievement by the British people, frequently having to put up with most discouraging circumstances but fighting back and putting up, in many cases, new records. We must hope that those increases will continue. Coal docs not seem likely to be the most serious bottleneck this year. It looks as if steel will probably fill that rather doubtful place of honour—but that is not due to any weakness on the part of the workers; it is due to shortage of scrap. Coal and cotton still need increased labour, and I am sure the House will do everything in its power to influence recruits to enter into the coal mines and the cotton mills. I seriously suggest to the House that we would be losing sight of something rather splendid which has been happening in England in the past few months if we did not pay attention to these figures, or if we regarded them as simply the spare-time
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occupation of statisticians. They represent a real effort, a real response to what was hoped for last October.
Yet the drain continues. The British people have been hit where they hardly expected it. Like a boxer, they are struggling back into the centre of the ring with a nasty cut over the eye, damaged in a way that may bring defeat to all their efforts unless these are unremittingly attended to. The leaks are being stopped. The luxuries are being cut out. Our noses are pressing themselves willingly to the grindstone. But still the drain of dollars goes on. That is the fact, and I am not trying to conceal it. I am simply trying to draw attention to the features, whether good or bad, in the national landscape. Clearly we should do something more and perhaps of a different kind. As Sir Stafford Cripps has said more than once, and as has been said by both speakers this afternoon, we should launch a head-on counter-attack on the pressure of inflation.
The whole House will have read the White Paper, Statement on Personal Incomes, Costs and Prices. You know its doctrine, which has already been approved and debated in another place. I think the House appreciates that doctrine, though not necessarily because it has been approved elsewhere. It says in effect that our costs must come down if we are to compete successfully in the export markets of the world. It says that the demand for goods on the home market must be diminished, if vital man-power is not to be sucked into producing for the home market when it ought to be producing for export. It says that if expenditure is to be kept down, incomes must be kept down. It says that as a general rule wages should stay where they are, and profits, if possible, should be reduced. It says that whereas the Government can take, and are taking, further measures to extend and tighten price control, the level of incomes in a democratic country cannot be fixed by the Government, but must depend on the traditional methods of free collective bargaining, though the White Paper does recognize that a heavy responsibility falls on the Government for indicating to the parties, in a time of grave emergency such as this, what kind of bargain is, or what kind of bargain is not, likely to benefit or damage the country. That responsibility it is discharging with all the vehemence at its command. My

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right honourable friend, the Chancellor of the Exchequer (Sir Stafford Cripps), asked me this morning to pay special tribute when I spoke this afternoon to the way in which the Government's lead in this matter has been taken up by the T.U.C. and the F.B.I. That I gladly and wholeheartedly do, and in doing it I am hopeful that the whole House will wish to join me.
I am afraid that I have had a grim story to unfold to the House. It is no good pretending to the contrary. We are up against it, and the country should know the truth. The possibility of large-scale and much-needed assistance from the great and generous United States introduces a complication. On the one hand it would be folly to ignore the likelihood, as it now seems, of something very substantial being done for us by them this year. On the other hand, it is impossible to know how much or in what circumstances it will be forthcoming and quite wrong to count on anything as a certainty. In this situation we have done what noble Lords opposite, or indeed any sane man, would do in our place. We have declined to take extreme measures of austerity, which would damage our people and our power of recovery, so long as there is a reasonable prospect that they will be rendered unnecessary in the event. But we have made calculations regarding the steps that would have to be taken if the worst came to the worst, and we have built all our plans on the theory that if help does come from outside its whole object will be not to enable us to sink down on our backs, but to help us to get on our feet, and it is unlikely to be long continued unless we take full and vigorous advantage of the chance it offers us.
Noble Lords opposite sometimes assume that we on this side promised them the millennium if we were returned to power. In my experience, that has not been so. But I doubt if any noble Lord in any part of the House foresaw the whole combination of adverse elements that has descended on us from outside during the last year. All that, in any case, belongs to history. What the House wants to know now is where we stand. In the moral and psychological sense, we stand for a doctrine that is common to all of us—for the insistence that in this time of sustained national emergency there is a heavy presumption against anyone's right to increase his share of the national
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dividend and in favour of everyone's duty to contribute more towards it, whether by increased effort or by effort in a more valuable direction.
In a physical sense, it might be possible, I suppose—and I do not know whether it would be with our people—to secure these results, this intensification, this re-adjustment of our whole national effort, by direction, by compulsion, by an iron discipline imposed from above alike on employers, trade unions and other citizens. That is not the way we have chosen, and it is not the way which would commend itself to the House. It is not the way that seems to us compatible with the values for which the war was fought and which we believe our nation, above all others, can exhibit most consistently to the world. Some measures of peremptory governmental interference it has been our duty to take. The cuts on imports, the higher taxation and the supplementary Budget, and the Control of Engagement Order, are examples of what I mean. After all, it has been mercifully unnecessary to use direction in the vast majority of cases. But we have never failed and I hope shall never fail to realise that the Government in Britain, as she is organised to-day, car at best provide a framework within which success is possible and likely.
There is, of course, an easier way than the one we have chosen of stabilizing wages and reducing profits and prices. It would consist of fixing all these things by Government decree. There is an easier way of producing a national effort. It would consist of ordering everybody to go about his business in a fashion that the Government thought right. There, again, we are convinced, and I feel sure the House will agree with us, that we would be throwing away our freedoms if we had to resort to these methods. I am sure we can come through our troubles, still sticking to democratic processes and beliefs, but only if we all work harder and at more unpalatable things, and abstain from certain forms of enjoyment which we have come to consider as our rightful share. One of the more unpalatable tasks that falls to all those who are better informed than their neighbours is to spread the facts, even when they appear harsh and painful. That is a task which none of your Lordships is likely to shirk, least of all when we remember the efforts that we are calling for from so

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many millions of our fellow countrymen in humbler circumstances, and when we remember that a universal understanding of the national task is our only chance, but our sure chance, of standing up to our afflictions and once again coming through.
4.40 p.m.
THE LORD ARCHBISHOP OF YORK: My Lords, I shall detain the House for only a few moments. I am not sure whether I ought to sympathise with the noble Lord, Lord Pakenham, on being called upon so frequently to speak on matters of major importance, or whether I ought to congratulate the Government on having a spokesman who is so acceptable to the whole House, and whose speeches are illuminated from time to time by flashes of unconventionality when, I suspect, he departs from his brief. I am not competent to enter into questions of higher finance. I am not a political economist—though we are all to-day domestic economists. I want to approach this matter from the standpoint of one who is always asking the question: How can this crisis, with all its gravity, be best brought home to the ordinary man? I want briefly to make four points.
My first point takes up the concluding remarks made by the noble Lord, Lord Pakenham. I am certain that there are still in the country a large number of people who do not yet understand the extreme gravity of the crisis. It is necessary for speeches such as that which has just been delivered, and such as have been delivered by the Chancellor of the Exchequer, to be repeated again and again, and to be repeated to the people, through the medium of the wireless and in other ways, in the simplest possible language, avoiding all technical terms, in the vulgar tongue, and in language which is relevant to the everyday work of our people. Let me take an example to explain what I mean. We all of us use that phrase, "lowering the standard of life," but I wonder what that means to a great number of people. I am convinced that it should be brought home to everybody exactly what is meant by "lowering the standard of life." To take another illustration; we all appeal to the people to do their utmost to help the nation at the present time, but I am frequently asked by people in humble walks of life: "Well, what am I to do?" There
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are a large number of people who are anxious to do their utmost, but they do not know exactly what particular action they ought to take, or from what they ought to refrain. That is my first point—there should be a carefully thought out, systematic campaign of education.
My second point—and it is not new—is that, so far as possible, that campaign should be a united one. Whenever the nation has been in a time of crisis before it has faced it with unity. There is a great deal of unity to-day, and I should like to congratulate the Government and all concerned, on the way in which the trade unions and the employers have signified their determination to do their utmost to help the nation in this crisis. But surely there are large numbers of men of experience who do not belong to the present Government and whose advice might well be asked. So far as I know, no appeal has been made for co-operation from the Opposition; and among the Opposition there are many who have had great financial and administrative experience. Really, at a time like this it is necessary for anyone who has had experience to be prepared to pool it with that of others. In that way we are much more likely to reach wise solutions of these most difficult problems. Wisdom is not the monopoly of any Government, and the wisdom of a Government is not necessarily to be measured by the size of their majority. I am not for a moment urging that there should be a Coalition Government; I know that is completely out of the question at the present time. What I do urge once again—and what the noble Earl, Lord Halifax, urged in this House not so long ago—is that there should be something like a Council of State, in which members of all Parties, without in the least abandoning their Party allegiance, might be drawn into conference on this particular subject and make their own special contribution.
My third point is a point which was made by the noble Viscount who opened the debate—though he did not actually use the phrase—that there should be equality of sacrifice. I do not think we always realise how much members of the working class are being asked to surrender at this moment. For a long time they have been looking forward to their increases in wages. They have lately had every hope of obtaining their desires; for the first time in their long history they

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have behind them the power of insisting on their demands. Just when, from their point of view, the outlook was most hopeful, they are told that, except in very rare instances, there can be no question of raising wages. That was a necessary decision. It is a decision forced upon them not by any Party but at this particular moment by the iron laws of economy. But it has meant a sacrifice to them, and that fact ought to be realised. When they say, as I hope they will all say: "For the sake of the nation we are prepared for a time to abandon all these claims," they will obviously expect equality of sacrifice in other directions. Already the importance of a stabilisation in profits and in prices has been stressed. Even if profits cannot be reduced, they can, at any rate to a large extent, be stabilised. Of one thing I am certain. If there should be a rise in prices, or even a suspicion of a rise in profits, we shall find at once a vigorous demand for a rise in wages. Equality of sacrifice is absolutely necessary if the nation is to act together in this crisis.
My fourth point is this. When the best possible schemes have been produced, when all plans as to what should be done to save the nation in this emergency have been made, they will not work unless there are a sufficient number of people who are prepared to show the moral virtues of honest and hard work, who are prepared to show restraint, refraining from making demands which otherwise they would have made, and who are prepared to make very real sacrifices for the sake of the whole community. I believe that the most valuable contribution which the Churches can make in this crisis is not by producing any economic schemes of their own—that might possibly be unwise—but for them to appeal to all classes of the community to exercise to the full those moral virtues without which we cannot overcome this crisis. I myself believe that the more our leaders and statesmen make an appeal to what is highest in man, the more likely they are to have a great response. Appeal, as I know we must, to self-interest, and also to the greatest happiness of the largest number; but those appeals, by themselves, will not be sufficient. There must also be a strong persistent appeal to what is highest in man—his unselfishness and sacrifice.
4.50 p.m.
LORD PETHICK-LAWRENCE: My Lords, it is one of the pleasing characteristics of this House that we are not mainly engaged in what I think schoolboys would call "scoring points off one another." That, of course, does not rule out reasonable analysis and criticism of those who have been in power and authority on the one hand, and a proper defence of what has been done by those in authority by Government spokesmen of the day. I think it is in this atmosphere of calm consideration, trying to understand where we have gone wrong, trying to understand what are the means by which we can pull ourselves out, that we are most likely to reach a valuable conclusion to our debate.
A great deal has already been said of the causes of our present troubles, and in the course of discussion over the last year or two nearly every point of importance has been brought out. It would be idle and foolish for me to go over in detail all those matters which have brought us into the difficulties in which we are at the present time. But it does seem to me that there is one matter to which perhaps not quite sufficient attention has been drawn. The great strength of our position in this country in days gone by was that we were a great importer. We were by far the largest importer—at any rate proportionate to our population—of raw materials and foodstuffs. Our great strength in bargaining with other nations all over the world was that we came into the market with this enormous buying capacity, and were able to effect treaties and trade negotiations, either as individuals or as the State, just because we were a great and beneficent person—the customer. It remains true that since the war we are still a large customer for raw materials and food, but, instead of being the customer who is welcomed with open arms, we are the customer whom the tradesman is inclined to send away with a notice: "No goods for sale "—just as, not very long ago, when we used to go into a tobacconist and try to buy our favourite brand of tobacco, we found he had a printed notice on his counter bearing the words, "No cigarettes to-day."
I would remind your Lordships that the days before the war were days when food was actually being destroyed in some parts of the world. Coffee was being put into the sea or burnt; wheat was being destroyed and hogs were being slaughtered and not sold, for the simple reason that

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there was too much. Therefore, when Great Britain came into the market and offered to buy immense quantities of those articles we were personæ gratæ. My experience when I was a member of the Government—and I am quite sure it remains so up to the present time—was that when a person who desired to purchase raw materials came into the market, all the rest of the nations of the world wanted to shoo him away and say: "You can do without the large quantities of stuff that you profess to require." Therefore, the strength of the position this country held before the war has turned into our very weakness.
I think that when people are naturally inclined to blame the Government for their inability to make valuable treaties in favour of this country, they neglect the fact that the great bargaining counter which we had before the war has been taken away from us and there has been substituted for it a disinclination to serve the customer at all. It reproduces precisely what we have in our retail shop in the small country village at the present time. It is said, for instance, that when we are making bargains with the various countries of the world we should have been able to do a better deal with regard to the question of sterling and dollars. Had we had the position we had before the war I have no doubt that when we were bargaining with Argentina, bargaining with the countries in the East, and even when we were bargaining with the United States, we should have been able to get a great deal of the transaction done in sterling and to secure the best terms possible for that very reason. But to-day our position is entirely different.
In that connection I should like to give a figure showing the increase in the prices of our imports during these years. For instance, the price of raw materials, which is one of the main things, has gone up from 100 in 1938—I am taking as a basis the figure of 100 as the price for 1938—to 224 in 1946 and to 270 in 1947. That, of course, is a very large absolute rise. But the point to which I wanted to draw your Lordships' attention—I am not putting it forward as anything new, but it is worth noting—is that it is not only a very large absolute rise, but it is a greater rise than we have secured for our own exports. Our own exports, taking
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again the price of 100 as the figure for 1938, rose in 1946 to 198 and in 1947 to 227. Your Lordships will see that whereas the raw materials which we had to import rose in price between 1938 and 1946 by 124 per cent., the price of our exports in the same period rose by only 98 per cent. Even between 1946 and 1947, a single year, whereas the price of our raw materials rose by 20 per cent., that of our manufactures rose by only 14 per cent. I hope that illustrates in figures the point I have been trying to make—namely, that one of our difficulties (and perhaps one of our major difficulties) in making favourable financial and other terms, has been the fact that whereas before the war we were a welcome customer, to-day we are an unwelcome scrambler for goods that other nations particularly desire.
We have heard a great deal about the mistakes or the miscalculations that have been made in the course of the last few years by the present Government, and of the policies which have brought us into this trouble. I am not talking so much of what has been said in this House to-day; I am thinking of what I see in the Press, what is said in another place, the criticisms that are heard in the streets and on public transport. It seems to me that these criticisms are largely mutually destructive. Let me give your Lordships one or two illustrations. I remember that in the early days of the present Government we were told that the great mistake was that we were imposing too many controls, and that if only people were allowed to go their own way a little more they would be free to launch out, without being restricted by officialdom and bureaucracy. Even so recently as a few weeks ago the Leader of the Opposition in the other place and the Leader of the Conservative Party, made a great appeal which he summed up in the words, "Set the people free." But now I read criticisms of the policy of the Government, and of the Party to which I belong, in making a personal appeal, on the one side, to the wage-earner, the trade unions and the Trades Union Congress and, on the other, to the employers and the Federation of British Industries. People say, "What is the good of merely making an appeal? Why do the Government not do something about it?" It seems to me that the right method with the British people is to make an appeal. If it were found

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that that appeal was entirely disregarded then it might be necessary, to take strong measures. In any case, this mutually destructive criticism seems to get us nowhere. What is required is a reasonable appeal, and then control, so far as ever control can go, to deal with those people who are not willing to come forward to meet the appeal.
Then take the question of taxation. I hear the Government attacked with two voices. One says that the real mistake is that taxation is too high and that it ought to go down; the other says, "You need a very large budgetary surplus in order to face up to the real situation and prevent inflation." These two criticisms, though they are not made by exactly the same people, are made by people belonging to the same school of thought, and they seem to me to be mutually destructive. The real need is to find a halfway line: not too high taxation and not too great remissions of taxation; and a budgetary surplus where that can be justified. It is not a question of accepting or rejecting a principle but of finding the proper application of it to the present circumstances.
While I am talking about taxation and Government expenditure, I should like to deal with one point that is sometimes incorrectly made. It is said that we do not want increased taxation but a reduction of Government expenditure; and the sphere that is chosen is the subsidies. These people say that if you reduce the subsidies you are not increasing taxation, but you are reducing Government expenditure. Is that really the case? The subsidy is negative taxation, and, therefore, if you reduce the subsidies you are in effect increasing taxation. Let me put it in another way. The net total of indirect taxation is the sum of the taxes that are applied indirectly, minus the subsidies; and if you reduce the subsidies, therefore, you are, in fact, increasing taxation: so that it is absurd to talk about reducing the subsidies as though that was not really a form of increasing taxation. There again I think those who talk about these things, talk with different voices and do not fully understand precisely what they mean.
I do not know whether a story that used to be told in my early days is familiar to your Lordships. It was a story of two men with a donkey. They
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were amiable people, but they were constantly meeting travellers going in the reverse direction who criticised their behaviour towards one another and to the donkey. Each time they were advised, they changed what they were doing in accordance with the proposal last presented to them. They carried through every conceivable alternative method of dealing with the donkey, and in consequence they did not get very much further. In like manner, I think that if the Government had taken the advice of even some of the better-informed people they would have pursued a zig-zag course which would have landed this country in a far worse position than it is at the present time.
We have been told of the misfortunes which have befallen this country since the war—misfortunes which the people of this country did not expect. It would have been natural for them to be imputed to the Government, though as the noble Lord, Lord Pakenham, rightly said, in seems that the people have been pretty philosophical and have not blamed the Government unduly for the misfortunes which have come about. One of the greatest of these misfortunes, I think, is that when, with great difficulty, we negotiated the American Loan—doing so in spite of all its limitations and drawbacks, because it was absolutely essential for us to buy time—we did not, unfortunately, buy enough time; and we have not beer able to weather the storm. We were confronted with the complete upset of our whole manufacturing world during the war, and it has not been possible for us to recover fully since the end of the war. But in spite of these misfortunes and drawbacks, and of our liabilities, we have several things which are of tremendous value to this country. The first of these, as the most reverend Primate mentioned, is our national character. I confess that, though there: are features of the British character with which I am not in full sympathy, as a whole I have an immense admiration for the British character, and I should like to put this fact on record.
I sat through the whole of the war in the other place, and the first Chancellor of the Exchequer of that period was the noble and learned Viscount, Lord Simon. Later there were other Chancellors of the Exchequer. They rather diffidently proposed immense additions to our burden

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of taxation. They were afraid, I think, each in turn, that they would be confronted by an angry House of Commons, representing a furious people objecting to these increases of taxation. Absolutely the reverse proved to be the case. Member after Member rose in his place and lambasted successive Chancellors of the Exchequer for not sufficiently increasing taxation. During the whole of that period I was Member for East Edinburgh. Never on a single occasion did any elector in my constituency ever say that the taxation in this country was too high and ought to be cut down, and that I ought to be getting up in my place to protest; rather was their attitude that I should be rebuking the Chancellor for his pusillanimity.
We take that as a matter of course in this country, but it is not so in the case of any other country in the world. In all other countries people have demanded and secured reductions of the burdens of taxation which the members of the administration have desired to impose upon them. Therefore, I do put forward this point of the character of the British people. We are all aware of that. When troubles came to us during the Second World War, especially at the time of Dunkirk, the people of this country, contrary to what the Germans thought we would do, never for a single moment postulated the ultimate defeat of our arms. That was due to the resilience of the people of this country and their determination to carry through under difficulties and bear their full share of those difficulties. That was a thing to be remembered, in spite of the horrors of war, in spite of the terrible feelings that we had that this was in some ways a break in civilisation that could never be repaired. The wonderful character of the British people is something worth remembering in the days to come. That is the thing and almost the sole thing which makes me absolutely certain that we shall see this present crisis through to the end and overcome it.
In the second place, we have something which we had not in fact before the war. We have now the complete unity of the people of this country. There is not the feeling to-day that there is one rule of life for the rich and one rule of life for the poor. To a large extent—I believe even to a greater extent than exists in Russia—we have become a society with
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no class distinction. I do not say that there are not differences of wealth manifest in the ordinary walks of life, because there are. At the same time, the general tenor of life is very much the same in the case of people who are possessed of considerable capital wealth as it is in the case of some of the humbler members of the manual workers of this country. That is so to-day in a way that has never been before. Even the differences between the Parties to-day are not based either in the whole or even in the main, upon a feeling that there is a class distinction which has to be preserved or has to be fought against. Therefore, in the second place, I put forward the unity of the people of this country.
When the noble Lord who has just sat down was speaking on behalf of the Government, he said that the unity of the people of this country and the unity of Europe were being brought home to us. I am sure that the noble Lord would not disagree with me when I say that I wish he had gone one step further and said, as Wendell Willkie said, "one world," because it is not only the poverty and hunger of Europe that make our problem in this country a great one, but it is the poverty and hunger existing all over the world to-day that bring about that position.
When I sat in the Government as Secretary of State for India, my difficulties always were to reconcile my desire that India should not starve with the needs and the claims of the people of this country for food. It was largely because of the failure of the harvest in India—which, I believe, is still by no means over—that the shortage of grain for human consumption and of other articles of food raised the price of food and made food so difficult to obtain. If India, instead of being an immense importer of foodstuffs, as she is to-day, had been an exporter of foodstuffs, as she was in the years gone by, I do not think our problems would have been anything like so severe as has actually been the case.
There is another point about India and the East which has to be taken into consideration when one is thinking of these things. The uprising of the manual workers of the world, demanding a larger share in the good things and a better standard of life, has extended to the East, where, in days gone by, the man at the bottom of the scale had almost nothing to

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eat—only barely enough food for his physical existence, to prevent him dying. To-day, in common with the workers in other parts of the world, he is demanding a fairer share. He has not yet got it, God knows, because the shortage of food is probably greater in India to-day than it has ever been in India's history. However, he is going to demand it, even when harvests are bad. I think we shall find that he will secure a larger measure of food and perhaps a larger share of the world's food supply than he has ever had before—and good luck to him. But, though it is good luck to him, I do not think we must shut our eyes to the fact that it is going to make the problem of getting food to this country greater than it has been in the past.
The unity prevailing in this country is not only between class and class; it is a unity between men and women in a way that has not been known before. This was particularly commented upon during the war by almost every visitor who came to this country, either publicly or privately. They marvelled at the work that the women of this country were able to turn out. They turned out work which was sometimes nearly as much as, sometimes as much as, and sometimes (marvellous as it may seem to many people) even more per head than the men were turning out. I know the difficulties of the Government in this matter. I know there is the difficulty of trying to avoid inflation. I believe that some statement is due to be made in another place; it may already have been made, but I have not heard it. I venture to suggest that the Government must, either now or at an early date, take some steps to meet the demand for equal pay for equal work. I believe that, splendid as is the devotion of women to the national cause, and loyal as they are, they will not submit indefinitely and permanently to the perfectly unjust position—a position which the Government know to be unjust—of a different wage being paid to two persons doing identical work under identical conditions, merely because one person is a woman and the other is a man. I suggest to my leaders in this House that they must take into account the fact that that injustice cannot be continued indefinitely. I say that in passing, because I am talking of the unity of the country. Unity cannot be maintained permanently on a basis of injustice.
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I have nearly finished my remarks. In conclusion, I should remind your Lordships that we have had great difficulties to face. When I say "we," I am not speaking of my Party or of the Government, but of the nation. We have had many difficulties to face. While we admit mistakes, while we put out before ourselves the need for an improved attitude to many of these questions, let us not also forget the degree of success we have already attained. The noble Lord, Lord Pakenham, who spoke for the Government, has already pointed out how our productivity has increased and how, owing to the splendid efforts of those who have actually done the physical work and those who have assisted in the directing of them and had their interests at heart, the figures of production are steadily going up.
Let me take up one other point, that of inflation. A great deal has been said about how we have run into inflation in this country. I am not going to deny that there has been inflation, I am not going to deny that the dangers of potential inflation in the future have to be most carefully guarded against; but I would like to say this: that compared with other countries we have controlled inflation to a remarkable degree. France, our nearest neighbour, in some respects is in a similar position to ourselves. There have been many devaluations in France. I go back to the time when the franc was worth ten English pennies, and there were twenty-five francs to the pound, but the value went down in the First World War and it went down in the Second World War, and only a few weeks ago the French Government nearly halved its value again. Whereas any inflation we may have had means that we reckon the cost of articles on a price index at perhaps 200 per cent. as against what it was forty or fifty years ago, in France the cost is more like one hundred times what it was.
Take Russia, a country with an entirely different outlook on life. Russia has just devalued the rouble not 10 per cent. but tenfold. I do not know the figures in the United States. I am inclined to think that inflation in the United States is not just nearly as great as, but is greater than, it is in this country. I am speaking without the figures before me, but I shall be very surprised if I am far wrong in that estimate. Therefore I say

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that we have a great deal to be thankful for and to be proud of in our history, and, with the national character and the new-found unity of the people of this country, I believe we can and will surmount the troubles that beset us. My Lords, I have occupied longer than I intended, but I have endeavoured to place before your Lordships my view of the present crisis and my hope and confidence that, in spite of all the dangers and difficulties that beset us, we have in front of us an era of more splendid hope and strength for our nation than we have had in days gone by.
5.25 p.m.
LORD BLACKFORD: My Lords, in addressing your Lordships' House for the first time, I ask for the usual courteous forbearance. We have listened to a number of able and penetrating speeches this afternoon, and it is sad to think that they will not be studied by anything like so large an audience as they deserve. Unfortunately, our national or more popular newspapers, with the meagre amount of space at their disposal, are not able to report debates at any length and it is doubtful whether any of the weighty words which have fallen from noble Lords who have spoken will be read by the millions in the Press. That emphasizes the point that I wanted to make, and which the most reverend Primate also made, that as yet the great mass of the electorate are not conscious of any crisis at all, or, at any rate, are not willing to shoulder the additional burdens which are necessary to avert it.
There are two other reasons for this. One, of course, is that the working man is fully employed at higher wages, and with shorter hours than he has ever known, and he is inclined to think that those who tell him there is a crisis are deceiving him; and he just does not believe them. A second reason is that he is bewildered by so many conflicting statements. Of course we are all, are we not, more or less wishful thinkers. We rather resent people who press unpleasant truths upon us, and that is the reason for those wishful-thinking speeches which tell us about rounding Recovery Corners, and winning through, and so on. But in addition to those speakers we have the conflicting speakers. For instance, one eminent bank chairman tells us that 1947
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was a year of solid progress, but another eminent bank chairman tells us that considerable progress has been made in our descent towards earth. Those, however, are easily overshadowed by the late Chancellor of the Exchequer. On November 29 last he told an audience something to this effect: "I believe that we are standing on the watershed of the post-war world, and that we are going downhill, having climbed to the top of the ridge; and I believe that we shall find the downhill journey an easier trip to better conditions and easier times." Yet in last week's New Statesman he wrote that 1947 was a year of many setbacks. In view of those conflicting statements, how is any ordinary layman to be filled with a sense of crisis, and how is he to know what he should believe?
In the midst of this babel there is one gloomy consistent voice, which has been speaking not for the last two or three months only, but in the same tones ever since its owner addressed the Federation of British Industries some fifteen months ago. When one listens to that voice one is reminded rather of another Labour Chancellor of the Exchequer, a man of somewhat similar temperament, who in 1931 was forced by pressure of economic events to warn his countrymen of their peril. His policy of rescue may be summed up in eight words: "More work, less pay, from top to bottom." The result of that policy over the succeeding eight years was a slow and steady recovery, with unemployment dropping from 3,000,000 to 250,000, and trade and industry making good progress—a progress, of course, which was all halted by the war. But Sir Stafford Cripps is preaching the same doctrine to-day. At Edinburgh he said that the cost of our production is much too high, and the amount of our production is much too low—or words to that effect. What does that mean, except more work and less pay, in some form, for somebody? Last Thursday week I listened to every word of his speech in another place. I did so in glum silence, thereby keeping in tune with the serried ranks of his supporters behind him. The burden of his speech there was the same as at Edinburgh. He ended up with an appeal for the whole-hearted support of his Back Benchers, both in the House and throughout the country, in putting this unpleasant policy over in the constituencies.

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The Chancellor of the Exchequer must have had high hopes of the opportunity which was afforded to Mr. Dalton in addressing, by means of the wireless, last Saturday night, an audience of two or three millions. Sir Stafford must have hoped, I imagine, that he would get a great deal of help from Mr. Dalton at the outset of this campaign. If that was so, I feel that he must have been disappointed, because the right honourable gentleman devoted three-quarters of his speech to telling us what an astonishingly fine Government the Labour Government are. That, of course, was quite appropriate in a. Party political broadcast. At the same time, by implication, Mr. Dalton told us what an extraordinarily fine fellow the ex-Chancellor of the Exchequer is. That, also, came quite naturally from my old schoolfellow. Only in the last four or five minutes of his broadcast did he deal at all with the economic situation, and then, as the noble and learned Viscount sitting below me has already said, he touched only for a minute or two on the question of prices and profits. He said that prices and profits are too high, that they must come down—and he left it at that. Not a word did he say about any necessity for increased exertion on anybody's part.
I submit that nobody listening to that broadcast would be seized with the idea of crisis, would feel that he was being addressed by a national figure who was telling him that the nation is at war, that the enemy is impending starvation, and that if we are to avert the fate that threatens us, everyone has got to join in helping to do so. That is why I want to emphasise the point, which has already been so much more ably put by the most reverend Primate. If we believe that what Sir Stafford Cripps says is true—and I certainly do—we should all (and, above all, the Government) combine to put this unpleasant truth over, we should plug it just as tunes from a musical play are plugged, until the public are thoroughly and absolutely seized of it.
My second point is rather similar. It is that, having decided on the remedies for these ills, however unpleasant those remedies may be, we should unhesitatingly apply them for all we are worth. Sir Stafford Cripps says that the remedy is more work, lower prices and lower profits. The noble Viscount who opened the discussion
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dealt very fully with the question of prices, and I will not bore the House by underlining anything that he said. Little has been said on the subject of profits, however, and I think that they may be left with just a few words. It is as well to remember what large proportions of profits are already being taken. For example, out of 26s. 8d. available for distribution to the shareholder, 15s. 8d. is taken by the State. So, out of every 26s. 8d., the shareholder receives only 11s., and the other 15s. 8d. goes to the State. Another point in connection with profits is that the total amount of profits, divided on ordinary shares-quoted on the Stock Exchange for the year 1946, was £400,000,000 before taxation. Therefore, it is throwing dust in the eyes of the electorate to lead them to think that any further impost on profits will make any sensible contribution to bridging the gap.
Before I leave that subject of profits, may I make one remark which may not be strictly relevant to this discussion—that is, that the whole of the distributed-profits tax falls on the ordinary shareholder. I have never thought that to be quite fair, but if there is to be a ceiling for ordinary dividends it seems to me that it becomes manifestly unfair; that the ordinary shareholder will then become a fixed interest shareholder, with this difference between him and the preference shareholder, that the ordinary shareholder's dividends may go down, but if a ceiling is fixed they cannot go up. Therefore, it seems to me that as he takes the whole of the risk it is not fair that he should bear such a heavy tax as 25 per cent. of the distributed profits, particularly as it is not by any means inconceivable (seeing that it has been doubled in the course of a year) that the Chancellor of the Exchequer may see fit to add to it. I feel strongly that, in future, the preference shareholder, where he exists, should bear his due proportion of that distributed-profits tax.
May I now say something for a minute or two on the unpopular subject of more work? However much we may try to avoid the thought, I cannot help believing that in the end we shall be forced to do more work. Of course, none of us wants to do that, but I feel sure that that is what it will come to. If we are to get better work out of people, we must give them more incentive, or as much incentive as we can. It does not matter what industrialist you

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speak to, he will tell you that one of the most unpopular taxes that has ever been put on in this country is P.A.Y.E. Every industrialist to whom I have spoken agrees with that, and maintains that the tax is a great hindrance to production. The noble Viscount, Lord Samuel, spoke about the need for decreased taxation, but, with all his great experience, he did not venture to, recommend in what direction reduction should be made. I rush in where angels fear to tread, and declare that if I were Chancellor of the Exchequer I would make a point of reducing, if not of abolishing, P.A.Y.E. on all incomes up to £400 a year.
The actual P.A.Y.E. Income Tax paid by a bachelor or a spinster earning £250 a year is £25. The acutal Income Tax paid by a married couple earning £500 a year, is £89. If all P.A.Y.E. were abolished up to an income for married couples of £400 a year it would cost about £300,000,000 in a full year. As the noble Viscount pointed out, there is a Budget surplus of £750,000,000 this year. We know that is not a true surplus. I believe the true surplus is more likely to be about £200,000,000. But whatever it is, if I were Chancellor of the Exchequer I would make the greatest possible effort to do away with this tax. But I would want something in exchange for it. I am all in favour of a five-day week. I introduced it into my own office twenty years ago, in face of the violent opposition of all the senior executives, but it has worked well ever since. But I am not in favour of a forty-hour week. I think that forty-two or forty-three hours is what is required. I do not care very much for Saturday morning work, because so much time is spent in going to work and coming back and in thinking about football in the afternoon, but I do think that some extra time should be put in, and can be put in, on the other five days.
I suggest that in return for the abolition of P.A.Y.E. the masses of the working-classes ought to be willing to give the extra 3½ hours' work a week which, according to the Economist, would amount to a total of no less than 1,000,000,000 hours a year. I suggest to your Lordships that we cannot afford at this time to reduce our production as we have done under this recent enactment by 1,000,000,000 working hours a year. Of course, that is rather different from
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—in fact, it is the exact opposite of—the doctrine trade union leaders have been preaching ever since the inception of trade unions, which is the doctrine of less work and more pay. One sympathises with them in devoting their lives and the industrial policy of the trade unions to that doctrine, because when they started there was much too much work and much too little pay. But the wheel has come full circle and the opposite is now true, for the time being at any rate. It is of course difficult for trade union leaders to turn round and preach exactly the opposite doctrine, but I maintain that in the end they will have to do it.
It is perhaps that thought which led Sir Stafford Cripps to express a fear of totalitarianism. Perhaps he felt that the trade union leaders on whom the burden must fall would fail to convince their followers of any sense of crisis and would fail to combat the infiltration of Communism into their executive ranks, of which we all know. The result might be that an almighty crash would suddenly cause widespread unemployment and bankruptcy, and the working-class, confronted in that way with a catastrophe about which they had not been warned, would turn to the paid agitators of Moscow. But if all those who think as we do, who wish to back Sir Stafford Cripps in the policy which he tells us is necessary, make it our business to tell the working-class of this country the unvarnished truth, however unpleasant it may be, I have sufficient confidence in my fellow countrymen to feel sure that they will turn not to Communism but to common sense.
5.44 p.m.
LORD LUCAS OF CHILWORTH: My Lords, it falls to my happy lot to congratulate the noble Lord, Lord Blackford, upon a very agreeable maiden speech. I think I may offer him congratulations on behalf of all sides of your Lordships' House. I am afraid that in expressing his point of view he disclosed that he had long left the apprentice stage. At one time during his speech I wondered whether, in his journey down the corridor from another place, he had failed to recognise that the air at this end is far clearer than the fog at the other. But I am sure that at the end the noble Lord said enough, in such a charming way, as to make us wish that we shall hear him on many occasions in the future. We

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have heard this afternoon a great deal about too much money chasing too few goods, and about other theories. I do not intend to follow that line, because I confess that I have a sneaking regard for the truth of a Punch cartoon which I saw the other day, that perhaps the trouble was too many economists chasing too many theories.
I intend to approach our problem from the point of view of an industrialist. It is perhaps the one angle on which I possess some qualification to speak, and I cannot help thinking that that is the best angle from which to approach this problem, because we are an industrial nation. It is by industry that we are going to live or are going to sink. In my view, the focal point in our problem was made by the Chancellor of the Exchequer in another place, and by the noble Viscount, Lord Samuel, who opened this debate, when they said that what is required at rock bottom is more production at less cost. Since I had the honour to address your Lordships' House for the first time nearly two years ago, that has been the burden of every speech I have made. I remember having the temerity to tell your Lordships that the ultimate test of the industrial efficiency of this country would be cost and price. If the fact that we are to-day a high-cost producing nation is responsible for this gap in our balance of payments, it is not a new problem for this country. This gap appeared after the 1914–18 war and progressively grew against us through the inter-war years. It was camouflaged by the fact that the dividends from overseas investments kept up our standard of living, but it was primarily brought about by our neglect—I do not think it would be an exaggeration to say our criminal neglect—of the modernization of our industries and their re-equipment.
Through the war years, that equipment, which was out-moded and antiquated in 1938, had to stand an increased strain, and to-day we are trying to compete in a highly competitive world against nations far better equipped, through the fortunes of war, than ourselves. We are trying to compete with them with worn-out and antiquated tools. The position was graphically stated in another place by a contributor to a like debate when he said that in the cotton industry we are trying to produce cotton goods in seventy-year-old factories with seventy-year-old equipment
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When the cry goes up, as it came from the noble Lord who has just spoken, that we have to work harder, what exactly is meant by that? If it means that we have to substitute mechanization and re-equipment by human sweat and elbow-grease, we shall get nowhere. If we are to attain a competitive position in the industrial race again, there is no alternative but to increase the horse-power at the hand of the worker. We cannot go on sweating and using elbow-grease with worn-out tools. So I would place the need for re-equipping industry as one of our greatest necessities. We may be able to obtain more aid from America—I do not know what we are going to do if we cannot—but unless we turn to putting our industries in a competitive position, when that further aid has gone the way the other Loan has gone we shall be in exactly the same position as we are to-day.
It might rightly be asked: How are we re-equipping our capital industries? By any calculation I can make, we are to-day re-equipping industry at only two-thirds of the rate we were doing it in 1938; and the 1938 rate was admittedly far too small. I suppose the question could be posed to me, and rightly posed: How are we to find the money to re-equip our industries and put them in that competitive position? Is it unnatural that I, as an industrialist, would do exactly the same in this problem as I would do in a problem in my own business, or in industry and commerce? I should look at the overhead side of my accounts. As the noble Viscount who opened the debate said, the first thing that: must strike us when we look at the national balance sheet is the fact that Government expenditure alone is close on £3,000,000,000 a year. The noble Viscount might have gone or and added, "approximating to one-third of the national income." That is a very serious state of affairs. How long car we go on like that?" Needs must when the devil drives"; and if we cannot fine sufficient economies in that account to re-equip our capital industries, then I can see no alternative but a lower standard of living for the people of this country. The sooner the people wake up to that fact, and the sooner they face up to it, the better it will be for us.
We have got to find the money for our industries; there is no alternative. At

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the present time we are going from bad to worse. In some sections of the engineering industry, producers are having to bastardize their production because they are forced to improvise with their present equipment to meet the competition from abroad. Re-equipping our industries is the only way to get down high-cost production. If you think high costs in production can be reduced by more manual labour, you have never come up against a bigger fallacy in your lives, because the more manual labour you use for the operations the higher your cost. Mass production by machines is the only answer. I trust that His Majesty's Government, whatever they have said in the past, will reconsider this question of capital re-equipment in industry, because we can never survive without the tools. Perhaps I might use a variation of a hackneyed expression: If the Government will allow industry to provide itself with the tools, industry will do the job.
The noble Viscount, Lord Samuel, had something to say on the question of profits, which naturally arises on a study of the White Paper on incomes. There is a prima facie case for an increase in taxation upon distributed profits, although, in my view, there is no case at all for a tax on undistributed profits. The latter is a tax upon industrial thrift. If the argument is advanced that ploughing back profits into industry to-day is of no avail, because one cannot purchase the equipment, my reply is that the equipment should be available to purchase. But industry itself is largely to blame for the misunderstanding and misapprehension of the public regarding profits. While industrialists reproduce chairmen's speeches, while there are advertisements of company meetings in the Press—and they will use all the high-pressure salesmanship to gild the lily for the benefit of their shareholders and their prospective investors—they cannot hope not to create a wrong impression in the minds of the working men. May I respectfully submit that your Lordships' House is not unblameworthy in this direction? The noble Viscount, Lord Swinton, will recall vividly to mind the campaign which I tried to wage in your Lordships' House for a greater disclosure of company accounts during the course of the debates on the Companies Act.
VISCOUNT SWINTON: The noble Lord will not suggest that I dissented from full disclosure.
LORD LUCAS OF CHILWORTH: I was just going to add that. The noble Viscount, if he will allow me to say so, led the Opposition through those tortuous clauses with great ability and great public spirit. When I pressed for the turnover to be disclosed in company accounts, I did not think the noble Viscount dissented in principle. I think he was rather apprehensive as to the ability of accountants to do it. Fortunately for me, and unfortunately for the financial advisers to the Government, many of the big companies have to-day found a way of doing it. Unilevers are perhaps the biggest example, and a number of our largest concerns have told the public quite frankly how their accounts are made up. The point was well illustrated by an incident in another place. When a Member was quoting the profits of a certain company the cry went up: "Well, what is the turnover?" and not one could answer the question. I hope it is not too late for the Board of Trade to alter that, as I am certain that until industry is prepared, or is forced, to disclose far more than it does, profits will always be suspect by the the wage-earner.
There is one other point with which I would like to deal, and that is a question also raised by the noble Viscount, Lord Samuel, in regard to prices. Commodity prices in this country have always been too high, and one of the major reasons has been the cost of distribution. Distributive margins have grown and grown and grown over the last twenty-five to thirty years. Again this is no new problem. The noble Marquess, Lord Linlithgow, presided over a Committee in 1922, and I would quote from that Committee's report:
" Distribution costs are a far heavier burden than society will permanently consent to bear."
The Report went on to say that it should
"…be possible to concentrate in the hands of one intermediary the successive functions now performed by several."
The noble Lord, Lord Woolton, when he held the responsible position of Minister of Food, said in your Lordships' House that in spite of almost unbridled competition the distributive trades were "one of the most expensive and

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luxurious factors in our national life." But what was done? Nothing. Why have successive Governments—if I may use the term—dodged this great issue? Is it the political implications? Is it looking over their shoulders at votes? I would be the last one to make a charge of that description against the right honourable gentleman the Chancellor of the Exchequer, but in another place he used these words in dealing with this particular subject:
" Here again the margin necessary to enable the small shop to survive means often much greater profit for the larger shops, yet the bulk of the goods sold through the small shops is enormous. They are an essential part of the distributing system and so must be maintained in being."
What are the facts? Immediately before the war there were in this country 750, 000 retail shops selling goods over the counter—I do not include in those figures the service trades—to something in the region of 11, 000, 000 families. The total turnover of those shops was approximately £2,600,000,000. Ten per cent. of those shops did 45 per cent. of the turnover. The average turnover of the whole lot was £3,000. If you take the turnover done by 90 per cent., it was under £2,000 per annum on average. It has been computed by experts that the lowest turnover upon which a food shop can be run efficiently with stock turn, and all the other technical details, is £4,000 per annum, and yet the average of the small shop was under £2,000. Distributive margins have been widened and widened and widened to take care of those falling turnovers. Adam Smith held the theory that if you put two shopkeepers into a street which only possessed one, the competition between the two would result in lower prices to the people who lived in that street. That, like all theories of classical economists, held good the day it was uttered and was out of date the day after.
LORD PAKENHAM: I am sorry to interrupt the noble Lord, but as an old student of Adam Smith he will perhaps remember that he said that if two of them were unnecessary one of them went bankrupt, and so you finish with one.
LORD LUCAS OF CHILWORTH: What made nonsense of the Adam Smith theory was the advent of the branded article, because that was price-fixed and price-maintained. Both shopkeepers were,
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therefore, forced to sell the same article at the same price, because they would not have had any goods at all from the manufacturer unless they had bound themselves to do that. So they simply halved the turnover and then went to the manufacturer or producer for a larger margin of profit to take care of the smaller turnover. That has multiplied itself throughout this country until the distributive and selling cost of nearly every article in commerce is about 50 per cent. of the price paid by the retail purchaser.
Now I quite agree that there is a great difficulty—which was recognised by the Chancellor of the Exchequer—in controlling this, but it will have to be controlled, and I support his method. I do hope sincerely, however, that he is also going to control the distributive margin, because all the price control that has taken place during the war and since the war has wrapped up that distributive margin in cotton wool, and has made even more money for the distributors than they made before the war. If that is not the answer and if lower costs cannot be Obtained—and I would not say a word to discourage the officials of the Board of Trade—I cannot see the National Chamber of Trade and the Distributive Associations of this country succumbing to what will be suicide for a number of their members, because there is no doubt that we could deal with all the goods for equitable distribution by considerably less distributive outlets. I have just finished—
LORD AMWELL: May I intervene for one moment, because I think it is rather an important point? When the noble Lord talks about distributive costs, is he aware of the fact that it is an axiom in advertising in this country that, taking all the distributive costs and not merely those of the retail seller, the staple article takes five times as much to sell as it does to produce?
LORD LUCAS OF CHILWORTH: I do not dispute the noble Lord's figures. Because it does cost five times as much to distribute as it does to produce is no argument why it should take five times as much. I was saying that I have just finished the task of presiding over a Committee which had some bearing on the cost of foodstuffs in this country. I could not help but be appalled as I listened to the chronicle of the journeyings in this country, from the farm to

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the abattoir, and from the abattoir to the retail shop, of the beast which is sold as meat. It was a frightful story of cost, incompetence and waste.
So I wish the Chancellor of the Exchequer good fortune; but nothing of benefit will happen unless the differences between the cost of production and the price which the public pays are rigidly cut down. That is the only way. I speak from very considerable experience, and I would ruthlessly cut that margin. I would allow producers to add x per cent. to the cost of production; they could add as many intermediaries as they liked after that, but the people concerned would all have to be remunerated out of that margin. If that were done they would die out like flies. These people insert themselves and erect toll gates, and render services of no economic value whatsoever. If we could eliminate these costs, the cost of living could be appreciably reduced. I hope that His Majesty's Government will give attention to these two points, first, that the capital equipment of industry is absolutely vital to our survival, and also that there is need for a rigid cutting down of distributive costs of products for the home market.
6.11 p.m.
LORD ROCHDALE: My Lords, you may remember a short sentence in the Bible about some people of whom it said that they were eating and drinking and marrying and giving in marriage, and knew not until the flood came. I am not suggesting that we are so oblivious of the economic crisis that lies ahead of us as those people in the Bible were of the flood. So much has already been said in your Lordships' House, in another place, and throughout the country about the vital importance of production and so forth as to make it quite clear, I think, to the average man and woman that they have got to work hard during the coming years. But what I am rather more doubtful about is whether they realise that those "coming years" probably mean as far as one can see and probably as long as any of us here are going to live. I maintain that, to that extent, the country as a whole does not realise the full measure of our difficulties.
Too little, I feel, has been said by Government spokesmen and others as to what is going to happen and what further
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plans His Majesty's Government have to try to bridge the gap in our export deficit if the production approach fails to complete the full cure. In that respect all we get from time to time are rather guarded statements that we hope we shall receive some Marshall aid. I hope, however, that if we receive such aid from our generous Allies we shall not merely use it to maintain the status quo, but that when it comes we shall have a plan acceptable to the country as a whole, so that we shall be able to get on to a permanently sound basis. That to my mind, is the only basis on which we should be willing to accept any further aid. I think none of your Lordships would disagree with me on that point.
I should like to ask the Government exactly what their plan is. Quite rightly, insistence has been put so far on production and increased exports. I maintain that very notable successes have been achieved already in that direction, thanks to the efforts of management and workers alike and despite the considerable difficulties that industry has been up against. These difficulties include shortages of raw materials and of components, and increased cost of raw materials and of all essential services. Many of these difficulties have been discussed in your Lordships' House, not only to-day but on previous occasions. Therefore, I think that insistence has rightly been put on production and on the ever-increasing necessity for curbing inflation, because any inflationary trend must have a very damaging effect on our export prices. But even if we view the result of these efforts in the most sanguine light, are we right in thinking that they are sufficient in themselves to bridge the gap of our deficit overseas?
It is not merely a question of comparing to-day's position with the position of, shall we say, ten years ago. We can look back twenty, thirty, or forty years and can see that even then we had a deficit on the balance between retained imports and exports. What are the arguments which can be adduced to-day to show why we can do better in 1948 than we did in, say, 1908? Admittedly, after the war there was a world shortage of goods. That shortage of course, still to some extent exists, although it is filling up all too rapidly. I think it was the noble Lord, Lord Pethick-Lawrence, who mentioned that there is a feeling throughout

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the world that erstwhile backward countries should have a far higher standard of living, which if it could be achieved would open up considerably increased markets for our exports.
Those are factors which will act in our favour, but there are other factors which are not so encouraging. Look in the first place at the United States. She has doubled her industrial capacity during the war. Surely she must be able to find markets for her goods so that her people may remain in employment. Many countries, such as Italy, Holland, Czechoslovakia, and France, whose industries were knocked out or at any rate neutralised during the war, are now coming back into competition, and industrialists are finding very difficult price competition from these countries in the markets of the world. Manufacturers are all too often finding tariff barriers, and they see their established customers experiencing greater and greater difficulty in obtaining licences for imports into their countries.
Again, many countries who, before the war, were predominantly primary producers have, during the war, greatly enlarged their secondary industries. I quote one notable example, that of Australia. I was reading some figures recently in a trade journal, and it was there stated that the exports of manufactured goods from Australia had increased between 1938–39 and 1946–47 by something like three-and-a-half times in value. Even if we allow for the difference in money values, that is a notable increase. Of course, I, for one, do not in the least regret this trend in Australia. I think it is an absolutely right and logical sequence of events. But taking all these factors into account, and remembering the increased cost of transport, which is particularly adverse to those of us who have to import so many of our raw materials, are we right in thinking that, with this production and export programme, the country alone can safeguard itself and bring itself back on to an even keel? So far, nothing that has been said by any of the spokesmen on behalf of His Majesty's Government, either in this afternoon's debate or previously, has convinced me of that fact.
Surely, as in the case of any ordinary business firm, we have to take other steps. We have to consider what are our overheads. The noble Lord, Lord Lucas of Chilworth, made the same point. What
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are our overheads? Obviously we cannot reduce our defences lower than a reasonable minimum. Not even in the direst straits would a firm stop paying the insurance premium on its fire policy. Certainly now is not the time to increase non-productive employees, whether employees of the Government of or private individuals, although I would suggest in that connection that I think His Majesty's Government have a great opportunity of taking a lead in reducing such non-productive employees. Now is the time to reduce non-productive capital expenditure. We have been told to-day that the reduction of £180,000,000 for the coming year is to be implemented. I think the question is whether that figure is large enough. There may be other such means of reducing what one may call the "overheads," but I do not want to deal with them. I want to look at the question from a much more long-distant point of view. Are we sure that we have not at home capital assets which ought to be overseas doing work for us?
I hope that I shall not be accused of straying from the field of economics, but the point I want to make now is one which, to my mind, is very pertinent to the economic welfare of this country. Would it not be right to consider the present population of something like 45,000,000 in this country as an asset which we cannot afford to keep here? Your Lordships will be well aware of the figures that I am now going to quote. Your Lordships will remember that, at the beginning of last century, the population of this country was about 16,000,000. At the end of last century it was something like 41,500,000. During those 100 years, that enormous expansion of population, occasioned by the tremendous increase of industrial capacity, was maintained. Not only was that increase in population maintained, but: it was maintained at a very definitely improving standard of living. The reason we were able to do that, surely, was that we had the world's markets to ourselves, and we had everything else in our favour. Therefore, we were at the same time able to build up considerable investments overseas. Coming to this century, it is certainly true that the population continued to increase, as also did our industrial capacity and our standard of living; but I maintain that those three factors did not increase in step with one another, and

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it was more and more necessary to use up the investments that had been built up overseas in order to maintain the equilibrium. If, as I believe to be the case, that was true earlier in this century, when trade was far easier than it is now or is likely to be again, can we really think with conviction that now, without so many of these investments which we have lost during the war (as has been said over and over again) we shall be able to maintain a balance without a very considerable and unpleasant adjustment?
I believe that the noble Earl, Lord Gowrie, speaking last week during the Commonwealth debate, came close to a pertinent point in this connection. He said that what was wanted was
" better distribution of the British race, without unduly denuding the Mother country."
Obviously, this is not a policy which we in a democratic country can carry out to order. It has to be effected by the active desire of those men and women who want to move out of this country, and also by the spontaneous welcome of the countries to which they would like to go. If my information is correct, are there not a great many more men and women who would like to go overseas and find a new life elsewhere than have so far been able to go? May it not also be that there are a great many more in whom there is a latent desire to go? Is it not also true that within the Commonwealth and Empire there are countries which would do anything to get as many British men and women as they can possibly attract? Therefore, I would suggest this. Ought we not to consider that we should go out of our way to encourage and assist these people in every possible way, maybe using some of our rapidly dwindling sterling reserves for this purpose? Would not that be an investment which would, in the long run, pay more than handsome dividends?
In passing, I would suggest that perhaps, in some respects, the Overseas Resources Development Act and the British Nationality Bill may have made a slender beginning. However, I suggest that it is only a slender beginning, and it does no more really than scratch at the surface of the bigger and more fundamental problem. I know that it is often argued that a policy of that nature will tend to take the cream of the people from
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this country. Indeed, only the other day I had a letter from a friend of mine in Tasmania making that point. It may also seem strange to put forward a policy of this nature when so many of our industries are manifestly under-manned. They may be under-manned for more reasons than one, but even if that is so, I would suggest that to pay too much attention to these points of view is to take far too narrow and shortsighted a view. Surely, in the long run, those two points may straighten themselves out; and by the further development of latent natural resources overseas, by building up further wealth in the sterling areas (not merely by primary production but also by secondary production), by the creation of new markets for the quality goods produced in the United Kingdom, we shall find that such a policy will prove to be a factor for strength rather than for weakness. It will be of strength not merely to the individuals who go out, not merely to the countries to which they might go, but also to this country, to the Commonwealth, to the Empire as a whole and, therefore, to the world at large.
On that basis, I would suggest that a policy of that nature is by no means a policy of despair, but is rather a policy of real enterprise. In concluding, I do not want anything that I have said on this longer-term matter to be taken as implying that I belittle in the slightest degree the vital importance of all possible immediate steps being taken for increased production and for the curbing of inflation. Both the immediate steps and the long-term steps are essential. The one will be of little avail without the other; we must have both. But I am concerned lest, in making a supreme effort now to tackle the problems that immediately beset us, we may not lay ourselves open to the accusation by posterity that we have overlooked many other long-distance or long-term points which, in the long run, may be equally as fundamental for our economic recovery as the immediate points.
6.30 p.m.
LORD SHEPHERD: My Lords, I want to deal with three points. My first relates to the United States, because I think the trouble with which we are afflicted is rather more international than national; my second will have some reference to our balance of payments, and my third—and I shall speak

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as a trade unionist of almost fifty years' standing—is in regard to wages and also subsidies. The noble Viscount who opened the debate made reference to the position in the United States, but I think what he had to say might perhaps have been a trifle more effective if he had quoted a few more figures for the record. If, without presumption, I may do so now, I shall be very glad to supply them. Production in the United States in 1940, just before they entered the war, was 100,000,000,000 dollars. By the year 1946 production had risen to 203,000,000,000 dollars, and in last year, 1947, it had further increased to 231,000,000,000 dollars. Those are important figures to have in mind when discussing the situation that now exists, not merely in Great Britain, not merely in the poverty stricken countries of Europe, but in the United States itself.
During the year just closed, according to the message of the President to Congress, there was expended in capital investment, 30,000,000,000 dollars. It is supposed that of that amount 13,000,000,000 dollars represents the reconditioning of industry, leaving 17,000,000,000 dollars for new productive effort; and, if one adds to that figure the surplus of American exports over imports of 8,000,000,000 dollars, one finds a new capital investment in that country amounting to 25,000,000,000 dollars. It is evident, therefore, that great as is the production of the United States at this moment, world-wide as her trading interests are just now, they are likely to be infinitely greater in the near future; and to consider the development or the redevelopment of this country without some reference to those figures does not seem to me to meet the case.
One would have supposed that with that great production of commodities there would be no such thing as inflation there. Certainly, if the whole of that production had to be consumed by people in the United States there would not only be no inflation, there would be a very large measure of unemployment. Great as the production is, however, it is not sufficient to meet the world demand, and it is the world demand that has changed the situation in the United States and caused inflation or a measure of inflation in that country. But the inflation that has taken place recently in the United
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States is not due merely to the law of supply and demand. So long as that law does operate and trading is carried on normally we can expect that there will be gradual increases of price.
The increases of price in America have been of such a character, however, that we must suppose that there have been special agencies at work, and indeed we know from what has happened in the markets in Chicago and New York that speculation has been carried on to a very great extent. There have been boom prices for some months past, and a serious condition of affairs may arise in that country if it is allowed to continue. Let me give an illustration of that by quoting from a newspaper of a week or two ago. It is from the financial columns, and it has reference to the break in price in the wheat market:
" Wheat-Gambler E. T. Maynard had a hunch that grain prices were about to fall. He sold a million bushels he didn't have, while others were still buying—and made £100,000 profit in four days. This was one of the disclosures made to-day by United States Secretary of Agriculture Anderson. Mr. Maynard,"—
the man in question—
" said to-night: ' I had no inside information. All you had to do was to read the newspapers. I don't know anything about farming or grains. The only time I see wheat is when I am motoring through the country '."
The United States has been very much flattered by Opposition political Parties in this country for having got rid of controls and given a head to the commodity markets of that country. We have here an illustration of what can happen under the conditions that now exist. One man, without any knowledge of the commodity that he was selling, and, indeed, without having any of the commodity to sell at all, was able to make that profit, break the market and bring down the price of commodities at a terrific rate.
I have two other points about America. Despite its vast production and its great riches, and despite the great increase in the commodity income of every man, woman and child in that country, there was, in fact, a reduction in real income last year of no less than 8 per cent. That is due to inflation there. We are dependent very largely on America at this moment, as are the countries of Western Europe. If Congress continues to refuse to put into operation proposals which the President of that country has placed

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before that body, we may find that we, who are in great difficulties here, are depending upon a broken reed.
I wish now to say a few words about this country and the balance of payments. I find that the provisional figure for imports for 1947 was £1,574,000,000. We now know that our exports fall short of that by no less than £675,000,000. Sir Stafford Cripps, the Chancellor of the Exchequer, and the Government, backed by the newspapers, are asking the people of the country to produce more in order to make up the difference between the two figures. If we could be quite sure that American prices, and prices elsewhere, would remain as they now are, then, given time, I think we might succeed in making up the difference. At any rate, I think we could make up the difference, provided that we could have some kind of help from the Marshall Plan temporarily. Sir Stafford Cripps, because he fears we may not be able to make up the difference in the time, has intimated to the public that it may be necessary to reduce imports in order to help to close the gap. For my part, I cannot see that a reduction of imports, with inflation spreading, is going to help us at all. If, for instance, we reduce imports this year by one-third, what guarantee have we that the remainder which we import will cost less than we paid last year? Is there any possibility at all, in view of this cancer which is spreading everywhere, that sacrifices on our part in that respect are going to help us to close the gap? I doubt very much whether it will be so. Therefore, I am wedded to the conclusion that everyone in our country, irrespective of Party, irrespective of political views, irrespective of class, must double his energies in order to produce the wealth that is required to pay our way.
There is another feature of this balance of payments that is worth some attention, because it is used in an easy kind of argument by a good number of people. The provisional figure for Government expenditure overseas for 1947 was £211,000,000. It is said that if the Government would cut that expenditure to £100,000,000 a year—or, better still, cut it to £50,000,000—part of our problem would be solved. I cannot put up with easy arguments of that kind. We
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are not living in days of peace. We cannot make arrangements as if no enemies existed anywhere in the world. With the political situation, internationally, as it is, whilst we may change our mode of expenditure abroad, it seems to me idle to presume that the total expenditure abroad will be less than it is now. I am speaking somewhat as a pessimist, perhaps, and I know that not every member of my Party will agree with me on that. But so keenly do I feel the dangers of the present situation, so conscious am I of the fact that the Continent of Africa is going to be the future granary of the world—and therefore a place to be striven for by peoples in different parts of the globe—that I fear the worst, unless we look at all these matters broadly and not merely from the point of view of saving money.
Lastly, I wish to say a word or two, as I have often said before, with regard to the trade unions. Most of your Lordships will know me as a political organizer. I have a feeling, sometimes, that political organizers are not greatly esteemed by other people. Fortunately, I have, I will not say a double life but deep roots in the trade union organization with which I have been connected. And the fact that I drew a salary did not make any difference to my position therein. The fear expressed in many quarters that the wages paid to working people are too high, that they are a cause of inflation, and that the subsidies paid by the Government in respect of certain commodities are spoiling the independence of the working-classes of the country because those subsidies are no longer required is, in my view, wrong. I cannot see where the relative position of the working-classes has improved very much during the war years, and in the time that has passed since the fighting ceased.
I have not the latest figures, the figures for last year, but I am quoting from the Government publication which gives certain particulars about the way in which the national income is divided. It was estimated that in 1946 the national income was £9,181,000,000, and this was divided among three groups: first, those who received wages; secondly, those in receipt of salaries; and thirdly, those who drew interest, profits and rent. The figures given by the Government in their publication are interesting. In 1938, the year before the war, the percentage of the total of that year paid in wages was

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37. The percentage paid in salaries was 23, and the percentage paid in interest, profits and rent, was 40. That was prior to Income Tax being deducted. In 1946, the figure with regard to wage earners was 38 per cent., as against 37 per cent. previously, so the relative position of the wage earner was up one per cent. The salaried worker received 21 per cent., and interest, profits and rent accounted for 41 per cent.
If your Lordships have regard to those figures, I think you will be satisfied in your minds that during a period of war and strife, when the trade unions had gathered to themselves greater power than they had ever possessed before, working people have not enriched themselves at the expense of other classes. The facts and figures are against that point of view. I have reached a conclusion, and I think the Treasury also hold this opinion, that the wages now paid to the working classes are not inflationary in character at all. As one who now has to live on quite a small pension, which provides him with a living not much above the standard of that of the normal workman, my own experience tells me that no workman with his present wage, under present conditions, can inflate prices at all.
Indeed, the commodities and materials which workmen buy are so controlled both as to price and quantity that it could not happen. If we assume that 1,000 represents the cost of living, we will find that 348 represents food, 88 rent and rates, 97 clothing, 65 fuel and light, 71 household durable goods, 35 miscellaneous goods, 79 services, and last but by no means least, 217 represents drink and tobacco. If there is one commodity among those I have mentioned of which the working-man could do with less, it is the last.
In spending his money on drink and tobacco, the workman is not necessarily inflating the prices of those commodities, because if the prices were raised and the profits increased, the tax collector sent by the Chancellor of the Exchequer would immediately be at the doors of the tobacco concerns. Those are the means by which any surplus value left in the pockets of the working-man is drained off, for the benefit of the Treasury. I, as a representative trade unionist, while prepared to agree to the control of wages and prices
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in the interests of the country, cannot see any cure coming from a reduction in wages. I believe that any reduction of wages forced on the working-class, whether by the Government in agreement with the unions or not, would cause the working-man to lose interest in the struggle.
In conclusion, I shall quote from a letter to The Times by Sir George Schuster, because I think this letter contains what I have been trying to aim at in the latter part of my speech. Sir George says:
" For the majority of workers in British manufacturing industry, the amount of their weekly pay packet is already affected by production results—either according to some system of bonus (group or individual) or direct piece-work rates. In all these cases the amount of earnings depends on two factors: first, the degree of efficiency with which the work in a factory is organized…and, secondly, the degree of effort put into the job by the workers…It may be fruitless to dispute which of these two factors comes first."
The letter continues:
" A leading ' big business ' British manufacturing concern has recently issued to all its constituent factories a brochure bearing on its cover the sentence ' Management is responsible for removing obstacles in the path of greater productivity '."
Sir George goes on to say that in many companies recently because of re-organization production has increased tremendously. He says:
" I will quote one example…where, as a result of improving managerial technique, the following results were attained: increase in production, 50 per cent.; decrease in cost a unit, 28 per cent.; increase in average earnings of the workers, 28 per cent."
I submit these particulars to your Lordships because I think they are of great importance at this moment in bringing about an increase of production. Unless we can encourage both workers and management to change the technique of management and to change the layout of the factories, we are unlikely to enrich this country as it must be enriched, so that it can take its proper place in the world as it used to do.
6.56 p.m.
VISCOUNT SWINTON: My Lords, I think this debate has been worthy of the gravity of the subject. The object, I take it, if I may paraphrase what the Chancellor of the Duchy (Lord Pakenham)

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said, was, first, to inform the country—and there I agree with the most reverend Primate, the Archbishop of York, that if we are to inform the country, we must talk in language which the country can understand; secondly, to offer a reasonable meed of criticism—and the noble Lord would not object if, in no Party spirit, there were a certain element of criticism of the action and inaction of the last two years; and thirdly, to enable those of us who axe rash enough to do so to offer some constructive suggestions. I propose to be rash enough to take the last mentioned course and to direct my observations to making one or two suggestions on two subjects: first, the stabilization of prices and I hope the possible reduction of prices, and the other, the source of supply of our food and raw materials.
The Government, as your Lordships are well aware, have invited industry to devise plans by which prices can be held or reduced and the cost of production reduced. The two really go together, because unless we can increase production and reduce the cost of production, there is no possibility of reducing prices, and possibly indeed little hope of holding them, certainly not if prices outside our control continue to rise against us. I believe that the approach which the Chancellor of the Exchequer has made is the right approach, and I am equally sure that the great majority in industry, whether direction, management or workers, will do their best to respond. But while commending the appeal, I feel bound to add that the Government have their own part to play. We have to try to get down costs in industry, but the Government must at the same time try to get down the costs of government.
We are all asked to save. That is right; but surely the greatest inducement the Government could give would be by setting an example and saving themselves. I honestly do not see any great signs of it in the Estimates that have been produced. I do not want to go into this matter to-night—there will be other occasions—but in order not to be merely negative, let me say this. It is not merely a question that there are too many clerks employed here or there. When we have to economise in business, we have to see what elements we can cut out for the time
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being, and we must see we get value for our money. I am very much afraid that in the Defence Services, which we must have, we are not getting value for our money to-day.
Then there are the direct costs in industry for which the Government have now made themselves responsible. Everybody will agree that among the most important elements in cost in industry are coal, power and transport. These are outside the control of the industries which use them, and whose goods are transported. They are Government undertakings, and while the Government are perfectly right to make this urgent appeal to the parties in industry, here again they must set an example in the dealings within the industries which they themselves have taken over.
There is another factor that affects production costs—the complexity and delay in the operation of controls. I am not going to say for a moment that we can get rid of controls; of course we cannot. But the very scarcity which makes controls necessary, makes it all the more necessary that the operation of those controls should be as simple, as elastic and as rapid as possible. It is not merely the waste of man-power in devising, issuing and filling up innumerable and complicated forms, but also the difficulty of planning ahead in the absence of certainty, with the consequent feeling of frustration, which is very real. Then there is this factor—and in this connexion I think, perhaps, it is the most important factor. It is hard to reduce production costs if there are continued hold-ups in the delivery of materials, or in the issue of permits, which stop that quick run-through in the factory which, both physically and psychologically, is vital to secure the tempo of production and the actual production.
I am not going to be merely destructive. I hope that the Government will invite the partners in industry, management and workers, to simplify the system of controls (they know best how those controls can be operated; they know the difficulties they are up against) and will devolve on to industry itself as much as possible of the operation of the necessary controls, the Government discharging their proper function of giving the general directives. On the industrial side I would add one thing more. There is the question of incentive, because a negative policy by itself

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will not get us through. I agree with much that has been said, and well said, about both wages and profits. But the obvious incentive—as it is, indeed, the surest cure for inflation—is that there should be more things to buy. I know all the difficulties about bridging the trade gap, but I believe it may well be that we shall get more for export through increased output and cheaper production if as that production materialises we give a little more to the home market. It is not a gamble; it is using business experience, and human experience, to take a chance, and to take the line which is likely to give the best results.
The wages policy, too, must have its positive side. A tremendously strong case is needed to-day to put up a basic rate of wages. But what really matters, is it not, is the production per man hour. Coming back to what I have preached for so long—indeed, to what I think is common ground to so many of us with practical experience—the chart at which we ought all to be looking together—management, workers and everybody—is the production per man-hour. And provided always that it is the result of greater and cheaper production, it is a right incentive that this should be reflected in increased earnings. This, too, has its bearing on profits, on which the noble Lord, Lord Blackford, touched in his interesting speech. He dealt with other matters, too, in a speech in which he showed that by coming to this House his hand has not lost its cunning, which was so well known to many in another place. The aim of every well-managed and successful business is not to secure a large profit on a small turnover, but to get a small profit on a large turnover; and you will succeed in business only if you succeed in doing that, apart from the most exceptional times. You may have a time of scarcity in which a badly run business profits for a while, but in the long run that must be the policy of business.
It is quite right that at this time there should generally be a standstill in dividends. I am sure, too, that the Government are wise to seek this by voluntary effort and co-operation, to which I believe they will have a wide response. But in any policy of limiting profits or dividends it is most important not to discourage the ploughing back into the business of a good proportion of those
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profits. That is not a view held only on this side of the House; it was most clearly emphasised by the noble Lord, Lord Lucas of Chilworth, in the interesting speech which he delivered. (The noble Lord told me that he had to leave.) That is the only way to-day, because we are all so taxed. Twenty years ago, private individuals could save and speculate—that is to say, speculate in the right sense, of trying out this or that invention. To-day, when a rich man is taxed 18s. or 19s. in the pound, he has no money with which to do this. The only way to-day in which businesses are able to engage in research, in the development of new processes and new inventions, and in the installation of the most up-to-date plant, in order to attain the cheaper production, is by ploughing back their profits, or a large proportion of them, into the business. I hope that Sir Stafford Cripps, who has always taken an interest in the scientific side, will be more of a realist in the practical application of this than was his predecessor.
I now turn, briefly, to another aspect of policy, also on the positive side. I am not going to argue about what our standard of living is to-day. Let me accept for the purposes of this debate the statement of one noble Lord—though I am not sure that I agree with all of his premises—that our standard of living to-day is relatively high compared with that of a great many countries. Nevertheless, unless we can buy, and pay for, the food and raw materials we need, we cannot maintain that standard of living. Therefore, it seems to me that it is vitally important that we should consider the sources of supply of food and raw material in connection with our ability to pay for those imports, by exports or in sterling. It is perfectly clear that for a long time we shall not get enough dollars to fill the gap, whether the export to hard currency countries is the 20 per cent. which the Chancellor of the Duchy of Lancaster thought it was, or the 15 per cent. that the gentleman in the gallery told him it was—
LORD PAKENHAM: That was the Western Hemisphere.
VISCOUNT SWINTON: In the Western Hemisphere. Let us give him even his 20 per cent.—
LORD PAKENHAM: Twenty-one per cent.
VISCOUNT SWINTON: Let us give him his 21 per cent.; we give him his majority. Even if he has that we do not come anywhere near to filling the gap. The noble Lord, Lord Shepherd, gave interesting figures of the greatly increasing American production. The last thing I want to do is to lecture America on what she should do, but unless she learns the lesson of being a creditor nation—which I think we learnt as a matter of practice over a hundred years, and America is twenty times the creditor country that we were in our heyday—there is little prospects of our proceeding by way of direct export. It was hoped, rather theoretically, I think, that although we could not jump this gap directly, yet we could get round it by what is known as the process of multilateral trade—and I am all for multilateral trade. But really to suppose that by non-discriminatory multilateralism we are going to secure an equilibrium for this country to-day, or in any foreseeable period of time, is just midsummer madness.
When a multilateral agreement is achieved, the force of necessity often compels a country to abandon a policy to which it has adhered in perfectly good faith. France, by unilateral action, recently drove a coach and four through the whole multilateral financial arrangements. There was a great deal of criticism, and personally I do not think that what the French did—I say it with respect—was well designed to achieve the objects which they had in view. I do not think it was likely to bring back currency or gold from abroad, or even to extract the gold from wherever it may have been hidden in France. But that is a matter of personal opinion. It was very awkward and uncomfortable for us, and we may have our views as to whether or not it was a sound policy. I do not think we can be too critical of France for adopting that policy if they thought it was right. After all, we ourselves, by unilateral action, ran rather like scalded cats out of convertibility, to which the Chancellor had gaily introduced us a few weeks before.
THE LORD PRIVY SEAL (VISCOUNT ADDISON): It was in the Loan Agreement.
VISCOUNT SWINTON: I know it was; I am perfectly aware of that. But the Leader of the House will not deny that if, as he ought to have known, it was
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going to be quite impossible for this country, in circumstances well known to the Chancellor, to maintain that convertibility, then he should have said that to the Americans. I challenge the Leader of the House upon this. I am sure he knows that if any overture had come from this country suggesting that it would be difficult or impossible for us to maintain convertibility that would have been most readily and sympathetically received in the United States, because I know that the United States and every country in the world would much rather we had not gone into convertibility than that we should go into it and then have to scamper out of it after a few weeks, with all the consequent embarrassment. That is the only thing which can be polemic that I have said. If the Chancellor of the Duchy considers that any reflection upon the kindness of the buoyant—I would almost say inflated—former Chancellor towards the young, it is not intended to be that at all. I am sure he was always quite delightful towards the young. What we complain of is that he was the worst Chancellor in history. Multilateralism must be conditioned by what is practicable. The Government themselves are making a whole series of bilateral agreements, many of them more or less on a barter basis. The Agreement with the Argentine is the last. I do not know whether we shall ultimately see the conditions of the Argentine Agreement, but certainly they are very onerous. We have had to give an enormous price for linseed.
I was greatly interested by the story which the noble Lord, Lord Shepherd, told us about the gentleman who had a hunch about what the prices were going to be, and who was indelicate enough to speculate. Mr. Maynard speculated and made £100,000. Of course, it was wrong to make a profit but, incidentally, as the result of his speculation, he hastened the falling of these prices. I am not saying that he ought to have speculated as a bear and bought short, although it was greatly in the interests of this country, because we wanted the prices down; we wanted the market to become a bear market, and to be operated successfully as a bear market. What I think is an interesting reflection is this. Mr. Maynard had a hunch, and made £100,000 without any inside knowledge; yet the Government, with all the inside knowledge in the world, never seemed to have the right

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hunch and lost hundreds of thousands—and indeed millions—of pounds. I am making a constructive suggestion when I say that I think it would be a good thing if the Minister of Food were to hire Mr. Maynard.
I would ask this question: Do the bulk-buying contracts allow us to take advantage of falls in world prices? What that leads me to is this. Surely all this shows the fact that we cannot bridge the gap, that multilateralism will not meet the bill. Surely all this shows the importance of Empire production and Empire trade. Indeed, the Government recognize this to-day by granting the importance of developing the potentialities of the Colonial Empire. We were discussing the ground-nuts plan only last week. That is all quite right, but surely it is even more important that we should use and develop the certainty—not the potentialities, but the certainty—of other Commonwealth countries, where production of foodstuffs which we need already exists and can be rapidly expanded. Nor, as I have frequently argued, does this Empire development—certainly in Australia, New Zealand, and Canada—limit or handicap world trade. It is, therefore, vital that we should enter into no commitments which preclude or fetter the fullest development of mutual trade within the Commonwealth and Empire.
The wording of Article 9 of the Loan Agreement is not very clear, and the terms of the Articles—particularly Article 30—of the draft Trade Charter, which is now under consideration at Havana, are much more obscure. Indeed, they are so obscure that on the last occasion on which this matter was raised, the noble Earl, Lord Listowel, the Minister in charge of these Colonial economic affairs—who has wisely gone on an Empire tour—was quite unable to give any explanation of it. Indeed, he professed himself to be wholly unfamiliar with it.
" Where ignorance is bliss…"
But I am sure that the Leader of the House—to whom I have ventured to give notice of this matter—will be more precisely informed and will accurately inform us. If Article 30 of this Charter is obscure, as I read them Article 16 and Article 17 are only too clear. Under Article 16 we should be forbidden, if we signed this, to grant or receive any new or increased preference anywhere in the
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Empire at any time in the future. Under Article 17 we may be compelled to eliminate all the existing preferences that exist to-day. Therefore I put two specific questions to the Government. The first is this: Under our existing agreements, are we in any way precluded or restricted in developing our mutual trade with the Commonwealth and Empire—that is the Dominions and Colonies—either by direct purchase or by the extension of Imperia preferences? And as a corollary I ask this: Are the Colonies themselves equally free by purchase or preference to develop their mutual trade with the Dominions?
My second question is this: Will the Government give a clear and definite undertaking that they will enter into no agreement or commitment which will restrict the right of the United Kingdom to develop our mutual trade with the Dominions or Colonies, either by purchase or by preferences? And equally that they will enter into no commitments which limit the corresponding power of the Colonies to develop their trade with the Dominions? Under the Draft Charter, countries are permitted and indeed encouraged to enter into complete Customs Unions. I have always favoured Customs Unions. All my experience, whether at the Board of Trade or the Colonial Office, has convinced me that such Customs Unions not only benefit the countries within the Union by increasing their prosperity, but increase their ability to trade with the outside world.
Surely it would be unjust and fantastic if a world plan encouraged such comprehensive Customs Unions but discouraged or prohibited the application of the loose and more limited system of Imperial preference within the Commonwealth and Empire. That system is vital to the policy of developing Commonwealth trade and Empire resources, to which the Government, I am glad to see, are at long last converted; and it is just as valuable to the expansion of world trade as are the stricter all-embracing Customs Unions. It is important that we should have a perfectly clear and definite statement from the Government to-night as to what is their policy and what are their intentions.
7.24 p.m.
LORD RENNELL: My Lords, you will not wish to listen to another speech, and

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I will only pick up one or two points because it seems to me an appropriate occasion, after a year during which economic debates have taken place in your Lordships' House, to see where we stand. It is just a year ago that a Resolution was moved from these Benches, which provided the ground for the first of a series of debates; and, looking back over the various discussions that have taken place both on the straight issue of the economic situation and of the Finance Bill, I find that there are two things that have struck me forcibly, and I think they will have struck other noble Lords. The first one is the studied moderation of the criticism which has been made during that year from all Benches on this side, in the hope of not embarrassing the Government in a situation which as long as a year ago was realized on this side of your Lordships' House to be virtually untenable. The awful truth of what that situation is has only now, at long last, been disclosed in its full blackness by the Command Paper to which the noble Lord, Lord Pakenham, referred. It is therefore no longer incumbent upon us to moderate our language and comments on the economic situation as we see it to-day, because the Government themselves have disclosed the figures in the Command Paper.
The second point which struck me forcibly is that warning after warning of the situation in which we find ourselves to-day has come from Benches on this side, and that those warnings have by and large been either disregarded, smoothed over on attenuated, not by noble Lords on the Benches opposite but by members of the Government in their speeches throughout the country, and by no one more notably than by Mr. Dalton. That the position in which we find ourselves to-day, the inflationary position in particular, is what it is, lies at his door; it is there that the major part of the blame must be laid. The noble Viscount, Lord Simon, in the course of his remarks referred to the policy adopted by the late Chancellor of the Exchequer in regard to the rate of borrowing. I regret that the noble Viscount was not a little more explicit in stating the cost to the country of that policy. What it has cost is visible to-day in the inflationary situation of the country; there is practically no other cause. I entirely agree with the noble Lord, Lord Shepherd, that it is not the wages that are paid to labour in this country
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which are the main cause of inflation; it is not the profits, large or small. It is to the financial policy of the Government, as conducted for two years by the former Chancellor of the Exchequer, that we owe the present situation.
That leads me to the discussions which have been going on for some time, not only in your Lordships' House but elsewhere, on the policy that has been followed in regard to wages and profits. I agree, of course, that in our present situation an attempt should be made to keep the present level of wages and of profits, or a lower level of profits; but no attempt to do that will be of the slightest value, utility or effect unless the financial policy of the Government is consistent with that doctrine and policy. It is perfectly idle to expect the cost of materials and wages to remain constant if the Government continue to create money at the rate at which money was created throughout 1946 and 1947. And the measure of that inflation of credit and bank money is to be seen in the Statistical Digest month after month.
There is a slight sign now of some reduction in the volume of credit, no doubt as a result of the changed policy. The policy of the Treasury and of the Chancellor of the Exchequer has changed diametrically in the last few weeks, compared with the policy up to the end of 1947. There is some slight change in the figures. The leading figure is the aggregate of bank deposits. There is a slight tendency for them to fall. Up to the end of December there was no such sign. Unless we have a clear indication that the financial policy to be followed is to be consistent with the announced policy of freezing or stabilizing wages, prices and profits, that policy will be rendered completely futile. It is perfectly clear that that involves not what are euphemistically described as certain anti-inflation measures; it involves a reduction of the whole basis of credit in this country—in other words, deflation. It involves deflation in order to get prices down. It is not an anti-inflation policy which has been conducted in the last few weeks; it is quite the reverse.
The second Budget at the end of last year, for what it was worth, involved the creation of a larger Budget surplus. That

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was a deflationary measure, and it is a deflationary policy which I have no doubt that the Government are intending to follow. However, I wish that they had said so, because it would have had a much more salutary effect on critics abroad of the financial situation of this country, to know that that was the policy which the Government were intending to follow. The present situation, including our balance of payments, to a large extent is affected by what others think of us. The sterling area is a workable proposition so long as the sterling area is large enough. If there are no other members of the sterling area except the United Kingdom, and all the currencies of the other units in the sterling area have become either hard currencies or currencies that it is difficult for us to come by, then we are in exactly the same position vis-à-vis those countries as we are vis-à-vis America to-day.
The incentive to other countries to remain within or to come within the sterling area, as I believe they would if the finances of this country were conducted as they should be, is their view of our economic stability. That will influence their decision whether or not to stay within the sterling area. Since these matters were discussed in your Lordships' House, the sterling area most regrettably has already contracted. It has contracted through the defection or, in certain cases, through the slithering-out of countries in one form or another. That is a source of definite weakness to us, and it is to stop that that I would urge, with all the conviction and power I have, that the announced financial policy of His Majesty's Government should be to in- crease the confidence of others in this country by saying what the position is (as they have done in the Command Paper) and by announcing that the policy of stabilizing wages, which has been sketched out, will be carried through by a deflationary financial policy of the Government themselves.
That brings me to the point which the noble Viscount, Lord Samuel, raised in the opening remarks of this afternoon's debate—the question of a reduction in taxation. I agree that a reduction in taxation would probably provide a considerable incentive. But a reduction in taxation, unless there is a restrictive financial policy of economy in the conduct of the Government of this country, would
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be, as a matter of fact, probably a disastrous policy to pursue. To reduce taxation and have a spendthrift Government increasing expenditure would provide the worst of both possible worlds. However if the Government desire to follow a policy of rectitude in financial matters, and to go back to the old-fashioned idea that it is not right to spend more money than you earn, then a reduction in taxation with a smaller Budget surplus would provide a strong incentive to everyone in this country, and would have the effect which the noble Viscount, Lord Samuel, referred to, on demands for increasing wages.
Of course, that in turn affects the other point to which I want to refer—that of the stabilisation of wages and profits. Here, let us be clear what we all mean. I do not believe that the Government mean that in no circumstances shall either wages or profits be allowed to increase. To say that is not to stabilise something; it is to congeal everything. It freezes everything up. What we mean is that there shall be no increase in wages or profits without an increase in production. In other words, what we mean by limited profits is not really limited profits but maintaining the ratio of profits to turnover—maintaining the margin of profit. All these things work both ways, in wages as in profits. Let us take an example. If one accepts literally the doctrine that wages must never be increased from now on, it must also mean that a man on piecework must never be able to earn anything more by working harder than he is now. That, of course, is complete nonsense. It cannot be intended. Obviously, what we mean is that the cost of the output of that man shall not be increased by increasing wages.
The same thing applies to profits. I take it that what we mean by a limitation of profits is that the profit margin shall not be increased, but shall in some cases even be decreased. That is exactly the point to which the noble Viscount who has just sat down referred, when he spoke of the good manufacturer in an enterprising firm or company wishing to make a larger turnover and a smaller profit. That is to say, an increase in profit in money but a smaller ratio of profit. If that is what the Government mean, as I think, then I believe it would be a good thing if they were to say so, because the bare, crude doctrine that there is to be no increase

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in wages or profits at all is, I repeat, the surest method of completely freezing everything up and producing the opposite effect to what we are all intending, which is to increase the volume of production.
The noble Lord, Lord Pakenham, was courteous enough to refer to some remarks which I made in the course of the debate in your Lordships' House in February last in connection with the question of convertibility. I did very much fear convertibility and, as some of your Lordships may remember, I referred to two critical dates which were then before us, but are now long since behind us. The first date was May I, which was the date of the reduction of working days and hours in the coal mines, a critical date in the production programme of this country. The second date was July 15, which was the day for the convertibility of sterling stipulated in the Loan Agreement. If the noble Viscount, Lord Addison, wishes me to say so, they were the two critical dates. In the light of after-events, they have proved to be the two critical dates of last year.
I myself believe that the events of July 15 were, as a matter of fact, avoidable. They would have been avoidable if we had gone to the United States and explained the situation in which we found ourselves. I was frightened of it then. I remain entirely unconvinced that we would not have been able to get out of that situation with honour and glory instead of getting out of it with ignominy, as we had to do last August. I believe that those two critical dates and the financial policy of the Government are responsible for the situation in which we find ourselves to-day. It is a situation which has affected your Lordships in a remarkable degree, as your Lordships have shown by expressing your feelings in this matter.
Looking back over the speeches that have been made this afternoon, I think it is undeniable that one extraordinary development has taken place. I have listened, I think, to all the speeches. In contrast with the debates which have taken place in the past year, there has been nothing in the way of criticism of the present policy of the Government. There have been many helpful suggestions; there has been a sense, possibly, of depression; but there has been a desire on the part
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of everybody who has spoken to help, and to wish the Chancellor of the Exchequer, and the Government, well in every possible way and where possible to contribute the help of which any individual is capable. The speech made by the Archbishop is, perhaps, the clue to the policy which all of us should follow in present circumstances. It is true that we are in a virtually untenable position. It is true that there is no light before us at the moment to show us how we are to get out of this, except by the rather facile method of going to "uncle" and borrowing a bit more, which is obviously no solution for anybody's problem.
We have come to recognize what has been denied up to date, that apparently aid under the Marshall Plan is not a desirable but an essential factor in our situation to-day. It is not a question—and here I must differ with what the noble Lord, Lord Shepherd, said—of whether we ought to limit imports. It is not a question of whether we should, or should not, develop Colonial territories. Without that aid we are facing starvation. "Starvation" is a crude and horrible word to use. It is not a question of what imports we ought to deprive ourselves. It is a question of how we are to get any money to pay for any imports. That is the crude, black situation in which we find ourselves; it is one which can be cured not by polemics, not by attack or criticism, but only by offering individually whatever we have to offer to the Chancellor of the Exchequer in his present difficulties and to the Government in the conduct of the affairs of this country. If they will accept that help, which I am sure will be freely given and will heed the collective wisdom of all your Lordships in this House, and the collective wisdom of all those in the country who are able to contribute something, then perhaps we shall find a way which, at the present moment, appears to be obscured by an impenetrable black cloud.
7.44 p.m.
VISCOUNT ADDISON: My Lords, it is a difficult matter at this time to summarise a debate such as we have had today. But, in the first instance, I should like to say how completely I agree with what the noble Lord, Lord Rennell, said just now, when he described the character of the debate. It is absolutely correct. We appreciate sincerely the character of

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the debate, and thank noble Lords for it. I am quite sure that the Chancellor of the Exchequer, and the members of the Government, will bear in mind—and I am sure will profit by—the kindly suggestion made by Lord Rennell and the valuable and constructive suggestions which other speakers have made, notably the noble Viscount opposite, to whose speech I will refer in a moment. May I add that in the forthcoming Economic Survey the standard of frankness will be fully maintained, and we shall not attempt to hide or gloss over the difficulties which confront us? With regard to this statement on increases of profit and remuneration, to which the noble Lord, Lord Rennell referred, I can assure him, taking his words, that it was no "bare crude doctrine"; if was a general statement of policy and not, of course, open to the hard interpretation which he suggested some people might place upon it. We are sensible people; I hope that it will be regarded as a sensible statement, and that it will be so treated.
I will just summarise, in as few words as I can, some of the points which have been raised, and I should like to express sincere thanks to the noble Viscount who initiated the debate for concentrating our thoughts first and last throughout his speech on the subject of prices and their vital character. Of course, the task before us, as the noble Viscount, Lord Swinton, said, is how we are to be able to pay for what we need. That is what we have to face, and I am not going to gloss over it. With regard to the drain on sterling last year, to which some reference has been made, we are all, of course, quite familiar with the aspects of the high price. There were three ingredients, apart from our own necessities, which were added to what had been foreseen, and which I do not think it can be fairly claimed—I do not think even Lord Rennell would say this—were the fault of the Government. One was the increase in price of the things that we had to buy; the next was the very, heavy overseas expenditure caused by foreign complications of one kind and another, which we all hoped we should not have to incur; and then there were the demands of the rest of the sterling area. I noted what the noble Lord, Lord Rennell, said about that. The House made some inquiry as to the proportion of the drawings in that regard and I have a
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little statement here which may be interesting.
During 1947 the expenditure on tie sterling area outside ourselves is estimated at 266 millions, and our own was 626 millions. Those were the proportions, and therefore your Lordships will see that the drafts on the fund from outside sources were very heavy indeed. There was that trying period of July 15, to which the noble Lord has referred so forcibly, but I am not going to enter into any controversy with him in regard to that. We had to get out of that dreadful situation. I would like to say this, however, that immediately that occurred, every one of the Dominion countries set about curtailing their demands for dollars. Of course in nearly every case there were large contracts, already placed, which had to be met, but I can say that agreements have now been arrived at throughout the whole of the Commonwealth, and with many other countries, which will safeguard the drawings upon the fund from now onwards. It has been steadied but, at the present time, it is not possible to say that there will not be a considerable monthly deficit.
That is where we are at the present moment. There are special reasons why the January drawings were a little heavy, compared with those for November, and perhaps I may mention them to your Lordships. There was a special drawing by India and Pakistan, which inflated the amounts exceptionally, but agreement has now been concluded with both of them to reduce the drain in future. Then there were special demands for certain materials, notably cotton, which were seasonal, and happened to fall in that month. These together, and a few others which were more or less accidental, coming in the month of January, increased the drafts above those of November by the figure which has been mentioned. I am assured that we need not anticipate their recurrence. Certainly, let us hope not.
LORD RENNELL: Can the noble Viscount clarify one particular matter in that connection? The noble Lord, Lord Pakenham, referred to the reserve figure, excluding the undrawn part of the Canadian credit, in January as being a little under £700,000,000. Is that

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£700,000,000 the figure for before or after the drawings of the £57,500,000 for January?
VISCOUNT ADDISON: Subject to complete confirmation I think it was the figure before the drawings. These were drawings during the month of January so, of course, that would be so. It is true that we must increase our production, and we must also increase the sources from which we derive our supplies, first, at home and, secondly from places where we can pay for them. May I just say a word about home supplies? It is not a matter which has been referred to in this debate, but it has been referred to many times before. I think it is right that we should pay a tribute to what is now being done. An effort is in progress, on what I believe to be an unprecedented scale, to produce more food in this country. That is a vital necessity. Your Lordships are aware of plans that are being made to increase the production of things that we need—particularly foods—in the Dominions and in the Colonial Empire. I will come shortly to the matter of discrimination which has been mentioned by the noble Lord. I must say, in this connection, that I think that all of us have to share blame for the state of affairs which has existed in the past. When one comes to review the possibilities it is astonishing how they have been neglected for so many years. Indeed, it is dreadful; but there it is, and the whole nation, I think, must share responsibility.
So far as our Dominions are concerned, I am happy to say that Australia, Canada and New Zealand are in a position to increase their production, at all events of certain foods, fairly quickly, and bold plans are now being considered in Australia and elsewhere. But I do not deceive myself about this, and I would not like to deceive your Lordships by suggesting that the increased food production in our Colonial territories, particularly in Africa, will be attained quickly. I think that we should only be deluding ourselves if we thought that. I was speaking the other day to one who has firsthand knowledge of what is now going on in Tanganyika. As he said, it is quite easy to destroy scrub, break down trees, clear ground and destroy the stuff on the top of it, but it is quite another matter
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to turn up the soil which has in it tangled roots which have grown during past centuries, and to bring that soil into a cultivable condition. The enterprise that is now being embarked upon is a gigantic one. I only mention that to indicate that time is required. Amongst the things which we must have, time is a most important factor.
I entirely agree with what the noble Lord, Lord Rennell, has said as to the necessities with which we are confronted. It is a fact that if the Marshall Plan, in whatever form it finally takes, is not adopted, this country will be confronted with some of the dreadful necessities to which the noble Lord has referred. Our alternative sources of supply will not become available so rapidly as to obviate the need for such aid, and our increased production will not be sufficient to fill the gap. I think I may say a word of warning on that. If, as we all hope, some satisfactory arrangement is made for helping Europe to recover—ourselves included—it will not minimise by one iota the necessity of our being unceasingly active to see that we are self-supporting at the end of the time. I am quite sure that every noble Lord will agree with that. I am glad to say that it is expected that the exportable amount of coal this year will be a little more than was anticipated last year. Perhaps there will be an additional 3,000,000 tons over what was forecast. Steel production is going to be a record, but in this connexion we cannot hide from ourselves the fact that it is nothing like enough to meet all our requirements.
In one industry we have not yet achieved the condition which has been achieved in those two industries, although of course in those two there is still much more to be done. Quite frankly, I think we are bound to be a little disappointed with what has been accomplished by way of increasing the production of textiles. There is urgent need for much more labour in that industry. As yet, we are far from the production increase in textiles that we must have. This is a matter of particular importance, because textiles, above almost all of our other products, are very saleable in the Western Hemisphere. They bring in more dollars than almost any other particular type of production. So, increased production is an urgent necessity if we are to get the dollars which we need and must have.

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I am told with regard to the production of electricity, that the demand of our industries for power and of householders generally for current, has risen at an astonishing rate, and that it will probably be two or three years before the new constructions which are now being undertaken will give us a supply which will be adequate to meet the greatly increased demands. There again this essential factor of time comes in. I do not propose to add anything to what the noble Viscount, Lord Samuel, has said with regard to prices. His speech, if I may say so, will be read by many others besides the gentlemen to whom my noble friend has referred—it will be taken as almost a text on the subject and by none more sincerely than by the members of the Government. We thank the noble Viscount for it.
I wish to say one thing with regard to the terms of the Trade Agreement, arising out of the questions put to me by the noble Viscount opposite. He made some useful constructive suggestions which I noted and which I will certainly pass on to the Chancellor of the Exchequer. All of them I thought were very practical and helpful suggestions. On his suggestion that, if we can, we should give a little more to the home market as production increases, I must say that the psychological effect of that action would be exceedingly valuable and the housewife would welcome it. It is particularly necessary that I should refer to what he said with regard to Article 9 of the Trade Agreement and what arises out of it. So far as present arrangements are concerned, the application of the discrimination Article is suspended until the end of 1949. By the very Agreement, the discrimination provision shall not apply until after January 1, 1949.
VISCOUNT SWINTON: Article 9 of the Loan Agreement?
VISCOUNT ADDISON: That is right. I think the best example of how the Agreement is being frankly and sensibly interpreted is the character of the Agreements that are now being made with some of our Dominions, particularly Australia and New Zealand, for the purchase of the whole of their food exports. The noble Viscount knows me well enough to know that, so far as we are concerned, we shall not agree to anything which is going
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to disturb the very basis of our Commonwealth trade. There are certain exceptions made with regard to the Agreement which have not yet been interpreted, bat it is agreed that none of the restrictions arising out of the discrimination should apply to the United Kingdom and the Colonies.
VISCOUNT SWINTON: This is still the Loan Agreement?
VISCOUNT ADDISON: It comes into the Havana interpretation. At the present time the Agreement, of which the noble Viscount quoted clauses, is being discussed and interpreted in the Draft Charter which is being dealt with at Havana.
VISCOUNT SWINTON: I asked two questions. First of all, what is our present position? Havana does not bind us?
VISCOUNT ADDISON: No.
VISCOUNT SWINTON: We are bound of course, by the Loan Agreement. Therefore I asked what our position was under Article 9. As regards Havana, I asked the noble Viscount specifically what Article 30 means, and whether he will give an absolute undertaking that the Government will not enter into any Agreement that will bind us in any way to restrict or reduce Imperial preferences.
VISCOUNT ADDISON: I was dealing first with Article 9. I shall come to the Havana Charter later. The interpretation which has been placed on Article 9, with complete good will by the United States as well as by ourselves, is reflected in the character of the Agreements we are making and have already made with the Dominions, and will not apply in any case to imports from the Colonies. With regard to the Draft Charter, I can tell the noble Viscount categorically that any fresh commitments which His Majesty's Government may incur will be only as part of a wider settlement which they consider to be to the advantage of this country, and in framing their conclusion they will be mindful of the vital importance to the United Kingdom of maintaining and strengthening the traditional ties of trade with the Commonwealth. That is quite a specific statement. It is also agreed that the conditions governing direct purchase should be those which would be in accordance with the commercial practice which would constitute

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the policy of a private trader. That is to say, taking the South African citrus fruit industry—
VISCOUNT SWINTON: Buy in the cheapest market?
VISCOUNT ADDISON: Not necessarily. The South African citrus fruit industry was developed for the supply of the British market, and it might be that in that case there would be no particular advantage. The fact that it had been created and commercially developed for the supply of the British market was accepted and, as the noble Viscount is aware, the whole production of that industry has been purchased by this country, and no exception is taken to it. He may be quite sure that we will conclude no Agreement at Havana which will jeopardise the development of our trade with the Commonwealth in the spirit in which both he and I understand it.
VISCOUNT SWINTON: The noble Viscount has been very kind in answering this question, but I am not sure I can quite accept that answer, because the Havana arrangement as it stands, as he will appreciate, does prevent any extension of preferences and does involve the knocking out of preferences, or the possibility that preferences will have to be knocked out, after 1952. I will not discuss whether the Agreement is right or wrong. Personally, I think it would be a terrible thing to do. What I ask is this: Will the Government give an undertaking that they will not enter into such a treaty—because the treaty-making power rests in the Crown and the Government—without bringing it first to Parliament to ask for the approval of Parliament?
VISCOUNT ADDISON: I am quite sure the noble Viscount may be confident that we shall not agree to anything at Havana—of course nothing has been agreed to—which will cripple us or handicap us in the future in our trade with the Dominions in accordance with what we have hitherto understood as pertaining to our obligations to the Dominions, and—I shall read particularly these words—that we shall not undertake any settlement which is not advantageous to this country. In deciding that, we shall be mindful of the vital importance to the United Kingdom of maintaining and strengthening the
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ties—the traditional ties—of trade with the Commonwealth. I am sure the noble Viscount need not have any apprehension on the subject. With regard to bringing the treaty before Parliament, perhaps he would be kind enough to give notice of that question. I am not quite sure what the procedure is, but I personally think it is a right and proper thing to do, and so far as I know that would be the course which would be adopted.
VISCOUNT SWINTON: We shall not be raising this question in debate again for some time. I am very much obliged to the noble Viscount for his very kind offer to give an answer if I put a question on the Paper.
VISCOUNT ADDISON: I hope the noble Viscount will agree to do that. He cannot expect me to answer a question about future procedure without notice. I can assure him I am no less enthusiastic than he is in maintaining these vital connections with our Dominions. They are the best friends we have in the world. They are our best customers, and they supply us with things vital to our existence. I think those are good enough reasons.
There is one other thing which has not been mentioned, which is quite a small matter. I am sure noble Lords will agree with me that we must make every possible effort to continue to augment national savings. That is absolutely vital. I confess that I was not quite able to follow the argument of the noble Viscount, Lord Samuel, in what he said about taxation and prices. I will read it carefully, but I was not quite clear as to his argument; nor does it seem to me, from the comments which he made on it just now, that his colleague on the Bench beside him was altogether clear. However that may be, it is quite clear that the presence of surplus cash in people's pockets tempts them to buy things, and to pay higher prices than they would otherwise pay. I do not profess to be an economist, but that seems to be common sense. If people can be encouraged to put some of that money into Savings Certificates it will not be in their pockets and, therefore, they will not be under the same temptation to buy extravagantly. I am putting it exceedingly simply, not being an economist. It seems to me that there is an overwhelming and continued reason why we should do everything we can to develop

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the savings movement. Noble Lords have not mentioned that, but it is, I may say, an essential part of our economic plan.
Finally, let me say this. Whether it is with the aid of the Marshall Plan, or otherwise—and I have given several illustrations of this in the course of my remarks—what this country needs to be able to buy is time. We must be able to buy a certain amount of time; and, given time, I myself have complete confidence that, with the character and grit of our people, we shall surmount our difficulties. That will be the importance of the Marshall Plan—to gain time. But during that time it will be necessary that we should put forth our utmost effort, so that at the end of that time we shall once more be on an entirely self-supporting basis.
8.12 p.m.
VISCOUNT SAMUEL: My Lords, I think your Lordships will agree that we have had a useful debate, and I am glad to know that the noble Viscount the Leader of the House, from what he has said, also thinks that that is so. The debate was intended to be constructive, rather than critical, and I feel that it has served its purpose. This House has no financial powers, but all the same I believe that discussions such as we have had to-day may serve a wide public purpose. I trust that the Chancellor of the Exchequer, when he is excogitating his Budget, will cast his eye over the many useful suggestions that have been made in this House to-day. With regard to the last observation of the noble Viscount, Lord Addison, directed to my own speech and the question of the Savings Campaign, I intended to say, and I think I did say, that if there is to be any reduction of taxation, it ought to be accompanied by an intensification of the Savings Campaign. That is a necessary element in any economic policy. I trust that the Chancellor of the Exchequer will pay special attention to the singularly well-informed speech of my noble friend Lord Rennell, who has exceptional knowledge of these subjects, and who, I am glad to think, agreed with the point of view which I expressed on the subject of taxation. This is not an occasion when we could expect any new or momentous pronouncement from the Government. We are very grateful for the speeches that have been made, first by the Chancellor of the Duchy
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of Lancaster and now by the Lord Privy Seal, and for their courteous answers to the number of questions put to them from all quarters of the House. I beg to ask your Lordships' leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

COVENTRY CORPORATION BILL. [H.L.]
Reports from His Majesty's Attorney-General: Received and ordered to lie on the Table.

SUNDAY ENTERTAINMENTS ACT, 1932.
Orders made by the Secretary of State for the Home Department extending Section 1 of the Act to the

Rural District of Amersham;

County Borough of Wigan;

Urban District of Halstead;

Urban District of Orpington:

Laid before the House (pursuant to Act) for affirmative Resolution, and ordered to lie on the Table.

FOREIGN SERVICE ORDER IN COUNCIL, 1948.
Report from the Special Orders Committee, That they have examined the Special Order as required by the Standing Orders of the House; That in their opinion the Order does not raise important questions of policy or principle; That the Order is not founded on precedent; That in the opinion of the Committee the Order can be passed by the House without special attention, and that no further inquiry is necessary before the House proceeds to a decision on the Resolution to approve the said Order; read, and ordered to lie on the Table.

SUMMER TIME ORDER, 1948.
Report from the Special Orders Committee, That they have examined the Order as required by the Standing Orders

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of the House; that in their opinion the Order is founded on precedent, inasmuch as similar provision was made from time to time by the Regulations under the Emergency Powers (Defence) Act, 1939; that in the opinion of the Committee the Order cannot be passed by the House without special attention, but that no further inquiry is necessary before the House proceeds to a decision on the Resolution to approve the said Order; read, and ordered to lie on the Table.

LEWIS COMMITTEE REPORT.
LORD MANCROFT LORD MANCROFT asked His Majesty's Government when they expect the final report of the Lewis Committee which began its deliberations in 1946.
THE MINISTER OF CIVIL AVIATION (LORD NATHAN): I understand that the Committee hopes to submit its report during the next few months.
House adjourned at a quarter past eight o'clock.