Sitting of 7 May 1953

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

PRIVATE BUSINESS
MANCHESTER CORPORATION (ADVERTISEMENTS) BILL [Lords] (by Order)
Read a Second time, and committed.

ORAL ANSWERS TO QUESTIONS
  HOME DEPARTMENT

    Atom Bomb (Documentary Film)
    Mr. Jannerasked the Secretary of State for the Home Department what action he is taking to promote the showing of the 50-minute documentary film showing what would happen if an atom bomb fell on a town.
    The Secretary of State for the Home Department (Sir David Maxwell Fyfe): The film has already been widely shown to Civil Defence workers. It has been exhibited to members of the Press, who have given it a good deal of publicity; and hon. Members will have an opportunity of seeing it on 13th May. I am considering whether I can arrange for the film to be shown in cinemas to local authorities and others concerned with Civil Defence, and I understand that the B.B.C. are considering the possibility of showing the film in separate parts on television later this year.
    Mr. Janner: In thanking the right hon. and learned Gentleman for his reply, may I ask him to keep in mind the fact that this film, if shown extensively, will assist the Civil Defence in their work as well as being of use to them personally? It seems to me highly important that a film of this nature should be shown to the public.
    Sir D. Maxwell Fyfe: I will certainly bear that in mind.
    Mr. Emrys Hughes: Is the Minister aware that this film completely oversimplifies what would happen if an atom bomb dropped on a big city, and does he not think that we are deluding people by not showing a realistic film instead of something which is likely to deceive the people?
    Sir D. Maxwell Fyfe: The hon. Gentleman is completely wrong on both points. The film does not over-simplify and we are not deluding the people. It gives a clear picture of what is likely to happen and a clear indication of what could be done to limit the disaster.

    Experiments on Animals
    Mr. Peter Freemanasked the Secretary of State for the Home Department how many certificates were issued last year to perform experiments on living animals under the Cruelty to Animals Act, 1876; in how many cases were no experiments performed; and whether he will consider curtailing the issue of such unnecessary certificates.
    Sir D. Maxwell Fyfe: In 1952 I granted 678 licences, valid for five years. During that year 1,335 licensees performed no experiments under the Act. Every year the revocation of licences which have not been used during their currency is reviewed.
    Mr. Freeman: Many of these 1,335 have never performed a single experiment since they first received a certificate, and will the right hon. and learned Gentleman not consider curtailing the number of certificates issued in this way?
    Sir D. Maxwell Fyfe: We keep a check on current years to find the licensees who have not performed an experiment. When we have discovered this, we work back to see whether they have up to that time not performed an experiment for, say, four or five years. If they have not, we prune the list.

    Coronation (Commonwealth Press Facilities)
    Mr. Jannerasked the Secretary of State for the Home Department why representatives of the Commonwealth Press have to be equipped with police identity cards before they can use the seats allocated to them on the Coronation route; what special additional facilities

    543
    are to be provided for them by reason of the possession of such permits; and what is the reason for this discrimination as against the holders of offically allocated seats.
    Sir D. Maxwell Fyfe: Police identity cards, which are intended to help Press representatives in carrying out their functions on ceremonial occasions, are issued on request to all Press representatives, whether British or foreign. On the occasion of the Coronation, persons using the special Press positions on the processional route and those carrying bulky photographic apparatus may be called upon to produce these identity cards, and the police will afford holders of the cards all reasonable facilities to carry out their functions as Press representatives. Press representatives with seats on the stands to which the public are admitted will not need these identity cards.
    Mr. Nally: Would the Secretary of State not agree that every care has been taken so that, although there are some minor complaints in these circles, the programme has gone ahead to ensure that the Commonwealth Press is treated with the courtesy to which it is entitled and that there are no grounds at all for the suggestion that during the Coronation proceedings the Commonwealth Press will not receive every conceivable help from the Minister's Department and from the Press itself in fulfilling its duties of covering the Coronation?
    Sir D. Maxwell Fyfe: That is certainly my information. I am grateful to the hon. Member.
    Mr. Ede: May we take it that the Commonwealth Press come under the denomination "British" which the right hon. and learned Gentleman used?
    Sir D. Maxwell Fyfe: Certainly.

    Pedal Cycles (Brakes)
    Mr. McAddenasked the Secretary of State for the Home Department how many cyclists have been prosecuted in the last 12 months for using cycles without efficient brakes.
    Sir D. Maxwell Fyfe: I understand that the use of a pedal cycle without efficient brakes is not of itself an offence.
    Mr. McAdden: Does my right hon. and learned Friend not think that it is a rather ridiculous position that a person should be able to use a cycle without any brakes without committing any offence, and will he consult with the Minister of Transport to see whether he should not issue regulations in the interests of road safety to see that cyclists are compelled to have brakes on their cycles as well as a bell?
    Sir D. Maxwell Fyfe: I will certainly bring my hon. Friend's words to the notice of my right hon. Friend the Minister of Transport.

  POLICE

    Strength
    Mr. Skeffingtonasked the Secretary of State for the Home Department by what number the Metropolitan Police Force is under strength.
    Sir D. Maxwell Fyfe: The deficiency on 3rd May was 3,634 men and 16 women.
    Mr. Skeffington: Can the Minister say how far this may be due to difficulties of finding accommodation?
    Sir D. Maxwell Fyfe: We are working very hard to increase the number of houses available for both married and single members of the Force, and I recently opened a new block of married quarters at Ebury Street which will accommodate some 60 families. I have this matter very much in mind, as it was in the mind of my predecessor.
    Mr. Ede: Can the right hon. and learned Gentleman say whether the all-too-slow but still steady improvement in the numbers that arose after Sir Malcolm Trustram Eve's recommendations with regard to increased pay still continues?
    Sir D. Maxwell Fyfe: Broadly, it still continues. It happens that the last two months have been less good because of the number of those leaving the Force, but I would remind the House that the Metropolitan Police Force has had 11,500 recruits since the end of the war, and I think that the improvement is continuing. Naturally one is trying one's best to make it better every day.

    Motoring Offences (Prosecutions)
    Mr. Shepherdasked the Secretary of State for the Home Department if he is aware that the Inspectors of Constabulary, in their Annual Report presented on 10th June, 1952, represent public antipathy towards the police as arising from attempts to deal with serious motoring offences; and whether he will take steps to make it clear to the police that such antipathy arises from petty prosecutions.
    Sir D. Maxwell Fyfe: It would be quite wrong for me to interfere with chief officers of police in the execution of their duty to enforce the law; but the remarks of H.M. Inspectors of Constabulary on the enforcement of traffic laws and regulations to which my hon. Friend refers made it clear that the main object of the police was to prevent and deter, rather than to prosecute, and that the police fully appreciated the need for securing co-operation from the public.
    Mr. Shepherd: Is it not clear from paragraphs 89 and 90 of the Report that they apparently do not appreciate the fact that the public want more time devoted to the catching of serious offenders and less to petty prosecutions? Is it not a fact that prosecutions like that instigated by the Chief Constable of Stockport—two prosecutions against people for having flashing indicators—are not the way to get the public co-operation?
    Sir D. Maxwell Fyfe: It is a very difficult problem, which must be left to the chief constables, as to how much of their manpower is devoted to traffic offences; but I should remind my hon. Friend that I have always found this House most sensitive on the question of road safety, and that is an aspect which must be taken into account.

  EMPLOYMENT

    Fibre-Glass
    Mr. Ellis Smithasked the Minister of Labour (1) what action he has taken to minimise the injurious effects of the use of fibre-glass in the aircraft and engineering industries;
    (2) if he will call for and publish a full report after the factory inspectors have investigated the use of fibre-glass and all other similar new materials.
    The Minister of Labour (Sir Walter Monckton): The Factory Department has maintained a close watch on the manufacture and handling of this material in factories but there is no evidence to show that it is injurious to the lungs, although it might give rise to a mild skin irritation which soon disappears. Samples of materials consisting of fibre-glass and resins which are now being used in the aeroplane industry are being investigated microscopically by the Chemical Branch of the Factory Department to determine the size and nature of the dust given off when components made from these materials are machined.
    Mr. Ellis Smith: Will the Minister be good enough to convey to the factory inspectors the work-people's thanks for the interest which they have shown in this problem up to now? Having said that, is the right hon. and learned Gentleman aware that they are also very concerned at the danger of a new high wave of pneumoconiosis developing unless resolute action is taken? Will he give the matter his personal attention?
    Sir W. Monckton: I will certainly give the matter my personal attention. As the hon. Gentleman knows, samples were given for inspection at the end of last month. As soon as I have a report on them I will look at it again.
    Dr. Stross: Will the Minister bear in mind that if fibre-glass and resin compounds are machined they are almost certain to give off microscopic particles which are bound to be injurious to the lung tissues? Is there not therefore a prima facie case for great care?
    Sir W. Monckton: I would rather wait for the report on the specimens which have been submitted by both hon. Members before I say any more.
    Mr. Hastings: Will the right hon. and learned Gentleman also remember that symptoms of pneumoconiosis take a very long time to develop in many cases and that it is many years before the disease becomes evident as a result of exposure to infection?

    Austin Motor Company (Dispute)
    Mr. Langford-Holtasked the Minister of Labour whether he will make a statement on the Court of Inquiry set

    547
    up to inquire into the dispute at the Austin Motor Company's Longbridge factory.
    Sir W. Monckton: The Court completed its hearings on 28th April. I expect to receive its Report very shortly and to be able to lay it before Parliament early next week.
    Mr. Edelman: Is it not the case that the sittings of the Court of Inquiry have been completely irrelevant to the settlement of the dispute? In view of the fact that one of the parties to the dispute announced its intention not to accept the findings of the Court of Inquiry or to act on its recommendations, would the right hon. and learned Gentleman not look again at this costly piece of apparatus which has already cost many thousands of pounds to see whether it serves any useful purpose at all?
    Sir W. Monckton: I should not like to give judgment on the question of how far this matter served a useful purpose until I have had the advantage of reading the Report.
    Mr. Edelmanasked the Minister of Labour how many of the Midland workers, formerly employed at the Austin Motor Works, who took part in the recent strike have applied for re-employment; how many remain unemployed; and what consultations he has had to encourage the re-employment of former strikers in fair and equitable conditions.
    Sir W. Monckton: Out of a total of 1,583 workers who were discharged by the Austin Motor Company on 27th March, about 1,440 have now applied for re-employment by registering at the employment exchanges, and the great majority of these have been submitted for consideration by the firm. I am informed that up to date the Company have re-engaged nearly 700. As regards the last part of the Question, the re-employment of the men concerned was one of the matters discussed between the parties in the proceedings before the Court of Inquiry, and I would not, therefore, wish to make any comment in advance of the Court's Report.
    Mr. Edelman: But, in the interests of future industrial peace and in view of the legacy of bitterness which would otherwise remain, will not the right hon. and learned Gentleman encourage the
    548
    management to re-engage all these strikers as quickly as possible, and will he bear in mind the necessity, pending the announcement of the Court of Inquiry decision, to discourage the indecent gloating which has been shown in certain circles over the way this strike has ended?
    Sir W. Monckton: If I might say one word about the last part of the question, I discourage any gloating. What I want to see as soon as possible is the men, of whom I have been speaking and who are not yet in employment, being employed again. That is my job. I am perfectly sure that I shall not do any good by making comments in advance of the Report on a matter which must be dealt with, directly or indirectly, in the body of the Report.

    Wages
    Mr. Gowerasked the Minister of Labour the average level of all wages, industrial wages and wages paid to workers in the heavy industries, respectively, as on 31st March, 1951; 31st March, 1952, and on 31st December, 1952.
    Sir W. Monckton: Information from which to calculate the average level of all wages is not available. My Department conducts inquiries in April and October each year into the earnings of wage earners in manufacturing industries generally and in a number of the principal non-manufacturing industries. Statistics resulting from such inquiries made in April, 1951, April, 1952, and October, 1952, which include figures of average weekly earnings in each of the industries covered, are published in the issues of the Ministry of Labour Gazette for September, 1951, September, 1952, and March, 1953, respectively.
    Mr. Gower: Will the Minister agree that the figures which are not available at present might be of great benefit to us in this House and also to industry in general in our assessment of the economic position of the country and of the wages of the country? Would he say whether the information available gives cause for hope to those of us who wish every person in industry to have a reasonable standard of life?
    Sir W. Monckton: I ought to add, in reply to that supplementary question, that material is also available about other

    549
    industries not covered by the inquiries mentioned in my answer—agriculture, coal mining, dock labour and the railway service, etc. I would gladly tell the hon. Member where it can be found but I did not think I should go to the expense of having it all specially printed. I will certainly give him the information.

    Injured Mineworkers, Durham
    Mr. Shinwellasked the Minister of Labour the number of mineworkers in the county of Durham who have suffered injury at work and who, because of their condition after recovery, have been refused employment in the mining industry.
    Sir W. Monckton: I regret that the information is not available.
    Mr. Shinwell: Is it possible for the right hon. and learned Gentleman to make inquiries of the National Coal Board and the area boards to ascertain whether there is such information or whether it is possible to find employment for these men who have recovered but are regarded as not entirely fit to undertake employment?
    Sir W. Monckton: In deference to the right hon. Gentleman's Question, I naturally made inquiries. I found that the National Coal Board did not have to keep records except with regard to those injured before the introduction of the National Insurance scheme in 1948 and that to get the precise information required they would need to circularise every colliery. If there is some less cumbersome way of getting what the right hon. Gentleman wants I will make every endeavour to get it.
    Mr. T. Brown: Is the right hon. and learned Gentleman aware that there are many jobs connected with the N.C.B. which these men could do if they were given the opportunity but that unfortunately there is a growing feeling in the mining industries that these jobs which the partially incapacitated men could do are being given to men who are fully physically capable?
    Sir W. Monckton: I will certainly look into that since the hon. Gentleman draws my attention to it.

  MINISTRY OF HEALTH

    Mass Radiography
    Dr. Strossasked the Minister of Health how many mass radiography units are in use in North Staffordshire at present; how many cases have been examined since the service was inaugurated; and how far workers exposed to the inhalation of irritating dust are being specifically examined.
    The Minister of Health (Mr. Iain Macleod): One unit, which has examined 48,250 people since it began work last June. Particular attention is being paid to operatives in the local pottery industry, about 16,000 of whom have been examined.
    Dr. Stross: Will the Minister bear in mind that we expect a fairly high degree of interest to be taken in industrial disease in this specific area, and would he accept that it would take some years for this one unit to cover the whole population? Will he consider therefore further assistance to the unit, or a second unit being installed, and can he say whether any specific attack has been made on the problem in the coal mines?
    Mr. Macleod: After what has been achieved so far I would have thought that 48,000 cases since last June is a very good result indeed. In so far as future assistance is concerned, it is more appropriate to deal with that in Question No. 18. Additional units are being distributed at the present time. The hon. Member's Question specifically concerns itself with the pottery industry, but I will look into the other matter he mentions.
    Mr. Swingler: Is the Minister aware that many mine workers live in villages comparatively remote from the hospital at which the unit is stationed, and will he inquire into the possibility of making facilities especially available for these mine workers in the areas in which they live or at the pits?
    Mr. Macleod: I will look into that, but this particular unit is at Stoke, which I would have thought was the obvious centre.
    Miss Lee: May I repeat the request I made to the Minister the other day? Could the Minister perhaps give us a

    551
    complete statement soon on the work going on by various committees on the preventive and remedial side of this disease? The Minister will see that there is a great deal of interest and some anxiety?
    Mr. Macleod: I have not forgotten that, and I have asked my Department to look into it.
    Dr. Strossasked the Minister of Health how many mass radiography units are in use in England and Wales; what is the approximate number of cases X-rayed per week or month; and how far the number of units in use is to be increased in the near future.
    Mr. Iain Macleod: Sixty-three units are now in use. Last December the 62 units then in use made 190,386 examinations. Five additional units have recently been allocated and arrangements are in hand to bring them into operation.
    Dr. Stross: In view of the undoubted value of this work, the value of which cannot be exaggerated, will the Minister look at the technique by means of which information is made available following the use of mass X-ray? What I have in mind in particular is whether the terms of reference, which are specifically to look after tuberculosis, could be extended, so that when a case of pneumo-coniosis is found we could have such data as the occupation of the patient when he contracted the disease?
    Mr. Macleod: While not an expert on the technicalities of that, I will consider what the hon. Member has said and discuss it with the appropriate authority.

    Junior House Officers
    Dr. Strossasked the Minister of Health whether he is aware of the difficulty experienced by some hospitals in obtaining candidates for junior house positions; what is the extent of this problem; and whether he will consider increasing the payment for locums for these positions from the present rate of £8 per week.
    Mr. Iain Macleod: Yes, Sir; I am aware that this problem is widespread particularly in the remoter hospitals. I am considering how it can be solved, but I do not think a solution can be found on the lines suggested by the hon. Member.
    Dr. Stross: Does the Minister recall that I wrote to him about a hospital which is not remote and which has 1,000 beds in Stoke-on-Trent, where I think that four out of the five surgeons have no assistance. Does he not think that increasing the remuneration above £8 per week might help them to get locums in?
    Mr. Macleod: One of the difficulties about the scale was that it was only promulgated in November, 1952. The second difficulty seems to me to be that that would be going the wrong way about it, because to encourage people to take locum jobs is not the right way from the long-term point of view. The best solution may well be along the lines of seeing what happens as a result of the pre-registration Act which has come in this year.

    Atmospheric Pollution
    Dr. Jegerasked the Minister of Health whether he has any further information on the components of fog that may have been a contributory cause of many deaths in December last.
    The Parliamentary Secretary to the Ministry of Health (Miss Patricia Hornsby-Smith): There is insufficient evidence to incriminate particular components of the fog as the cause of death, but investigations are continuing.

    Consultants
    Dr. Jegerasked the Minister of Health how the recipients of merit awards are chosen among specialists under the National Health Service Act; and how many awards have been made each year since the system was instituted.
    Mr. Iain Macleod: Awards are made on the recommendations of an Advisory Committee. As many as 1,740 awards were made in England and Wales for 1948–49; 439 new or higher ones for 1950 and 229 for 1951. Recommendations have not yet been received for 1952.
    Dr. Jeger: Could the Minister tell us something about the composition of the Advisory Committee?
    Mr. Macleod: The Advisory Committee has a professional chairman, who is Lord Moran, and a lay vice-chairman. There are representatives on it of the

    553
    Medical Research Council, the universities, the Royal Colleges, and the Scottish Royal Corporations. If the hon. Member would like a detailed list of the names, perhaps he would put down a Question.
    Mr. Hastings: Does the same Committee deal with all branches of consultants?
    Mr. Macleod: The same Committee does deal with them, but, of course, it could take advice as it wishes within its terms of reference.
    Mr. Blenkinsopasked the Minister of Health the total number of full-time specialists employed in the National Health Service at the latest available date, as compared with the number 12 months previously.
    Mr. Iain Macleod: There were 2,149 whole-time consultants and senior hospital medical and dental officers at the end of 1950 and 2,445 a year later.
    Mr. Blenkinsop: Is the Minister aware that this will give some satisfaction because of the rather anxious reports which have been put out by many full-time consultants that there has been a great falling away of that service? But, nevertheless, is he aware that it is very much more costly to encourage recruiting of part-time specialists than to encourage further full-time appointments?
    Mr. Macleod: Those figures only take us up to a little more than a year ago. I have not the 1952 figures—which will be interesting—but I hope to have them by about the end of the month.

    Tuberculosis (Irish Republic Immigrants)
    Mr. Storeyasked the Minister of Health for the latest convenient period, what proportion of the notifications of tuberculosis refer to persons who had recently entered the country from Eire.
    Mr. Iain Macleod: The present returns from medical officers of health make no distinction as to nationality. I regret, therefore, that the information is not available.
    Mr. Storey: In view of the fact that the incidence of tuberculosis is 50 per cent. higher in Eire than it is in this country, and in view also of the fact that
    554
    in some parts of the country a large proportion of notifications are amongst persons who have recently come from Eire, does my right hon. Friend not think it would be a good thing to insist upon radiographical screening and a certificate of fitness before allowing people to come from Eire to seek employment in this country?
    Mr. Macleod: As my hon. Friend will appreciate, there are a number of other people and Ministries involved in this. He is quite right in what he says that a certain amount of difficulty has been caused by people coming from Eire, and I will see whether we ought to get more information on this subject and whether steps should be taken at the ports and airports.

    Hearing Aids (Bone Conduction)
    Mr. Gowerasked the Minister of Health how many bone conduction hearing aids have been supplied through the National Health Service; and what steps he will take to expedite the provision of such hearing aids to those in need of them.
    Mr. Iain Macleod: Up to 18th April, 958 patients had been supplied in England and Wales. Orders sufficient to meet the estimated needs have already been placed and are being executed as quickly as possible.
    Mr. Gower: Will the Minister bear in mind that the people who need this kind of aid have been waiting a very long time, and will he do all he possibly can in the matter?
    Mr. Macleod: Yes, certainly. I think we can hope to get rid altogether of the waiting list within the year, and, indeed, the bigger waiting list for normal apparatus as well.

    Cottage Hospital, Ashbourne
    Mr. E. Wakefieldasked the Minister of Health when work will begin on the new building to accommodate outpatients at the Victoria Memorial Cottage Hospital at Ashbourne.
    Mr. Iain Macleod: I regret that I cannot say. I am informed that the Regional Hospital Board have approved the scheme in principle but that, because of other more urgent projects, they cannot yet fit it into their capital programme.
    Mr. Wakefield: Is my right hon. Friend aware that this hospital is admirably equipped and has a most excellent staff, but that those assets are wasted because accommodation for out-patients is so unreasonably cramped? Will be bring these facts to the notice of the Sheffield Regional Hospital Board?
    Mr. Macleod: I do not dispute those facts, and, of course, the Regional Board will see what my hon. Friend has said. The question of priorities must remain a matter for them.

    Day Nurseries, (Charges)
    Mr. A. Hendersonasked the Minister of Health whether, in view of the hardship caused to parents in Staffordshire who are required to pay 8s. per day for children in day nurseries, he will consider a reduction in the charge.
    Miss Hornsby-Smith: The matter is within the discretion of the Staffordshire County Council, who reduce their standard charge of 8s. a day in cases of hardship.
    Mr. Henderson: While the circular upon which the various local authorities are acting is not couched in mandatory terms, is there not an express indication on the part of the Minister of Health that the local authorities should operate the provisions of the 1952 Act? May I also ask whether the effect of increasing this charge to 8s. a day will not debar a good many parents and children from this most valuable and, indeed, essential social service? May I lastly ask whether a number of these day nurseries are not already being closed as a result?
    Miss Hornsby-Smith: As far as the nurseries in the Staffordshire area are concerned, the circular issued to them gave the local authorities power to make a charge more in keeping with the cost of the nurseries but, in cases of hardship, they reduce the charge. As far as the area of the right hon. and learned Gentleman is concerned, there are many cases in the use of nurseries where both parents are in full employment and have a high joint income. It seems quite reasonable that they should pay the charge.
    Mr. Bowles: May I ask the Parliamentary Secretary to thank her right hon.
    556
    Friend for so speedily dealing with the matter in my constituency on the same subject, and may I ask if she is aware that, while my right hon. and learned Friend is complaining about a charge of 8s. a day, in my constituency it is 12s. a day, which is £3 a week. Is she also aware that the number of children attending this day nursery has gone down from 40 to six because, in spite of what the Minister has written to me, a large number of women cannot possibly pay £3 out of £4 wages? Will she ask her right hon. Friend to look into the matter again, because this hardship has resulted in appearing to justify a case for the shutting down of this nursery?

    Doctors' Prescriptions
    Dr. Jegerasked the Minister of Health whether he is aware that doctors in the National Health Service are still being threatened with surcharge after prescribing cod liver oil and malt for tuberculous patients; what steps he took to prevent this in accordance with his undertaking when this question was last put to him; and what further steps he proposes to take to prevent this kind of intimidation.
    Miss Hornsby-Smith: Executive Councils were reminded in July last of the recommendations of the expert sub-committee which advised on the circumstances in which borderline preparations should be regarded as drugs or as foods. My right hon. Friend does not think any further general action is necessary, but if the hon. Member has any particular cases in mind I will look into them.

    Hospital Regulations
    Mr. Hastingsasked the Minister of Health if he will issue in the form of a booklet with index, a summary of the regulations issued by his Department to hospitals since the appointed day which are still in operation.
    Mr. Iain Macleod: I assume the hon. Member has in mind circulars issued to hospital authorities. Some consolidation on particular subjects has already been effected, and this will be extended as circumstances permit. A useful index to all circulars is prepared annually by the Birmingham Regional Hospital Board and is widely circulated.

    Nursing Staffs
    Mr. Sorensenasked the Minister of Health to what extent there has been an improvement in the distribution of nursing staff among hospitals as a result of the reviews of hospital staffs made at his request by hospital authorities.
    Mr. Iain Macleod: It is too early to assess the results of the reviews of hospital staffs, but I hope that they will make a useful contribution to the improvement in the distribution of nursing staff which I am seeking to achieve by this and other means.
    Mr. Sorensen: In the meantime is anything being done to secure a more equitable distribution of the nurses available, since some of the hospitals are virtually understaffed and others grossly overstaffed?
    Mr. Macleod: That was one of the thoughts in my mind when I issued the circular which has received so much criticism, but other progress is going on all the time. The line that seems most promising at the moment is the seconding of nurses, which is being done increasingly over the country, particularly to sanatoria.
    Mr. Blenkinsop: Will the Minister at the same time make sure that there is no suggestion of compulsory secondment, in view of the attitude which I am sure the nursing associations would take on the matter?
    Mr. Braineasked the Minister of Health what steps have been taken on the advice of the Mental Health Advisory Council and others to recruit additional staff for mental deficiency nursing.
    Miss Hornsby-Smith: The Standing Mental Health and Nursing Advisory Committees have not yet completed their study of the problem, but they have tendered interim advice to my right hon. Friend, in the light of which he hopes to issue a memorandum of guidance to the management committees concerned in the course of the next few weeks. He is also considering, with my right hon. and learned Friend the Minister of Labour, the desirability of devoting the resources available for recruitment publicity in the current financial year largely to the recruitment of mental and mental deficiency nurses.
    Mr. Braine: Whilst that is very satisfactory, may I ask the Minister whether consideration is being given in the case of male staff to the provision of housing accommodation near the institutions, having regard to the fact that the staffing shortage is probably a more serious matter than shortage of accommodation?
    Miss Hornsby-Smith: We have all these things under consideration.

    Committee of Inquiry
    Mr. Hastingsasked the Minister of Health what knowledge and experience of the work and management of hospitals is possessed by the members of the Committee that is to inquire into the cost of the Health Service.
    Mr. Iain Macleod: As I informed the House on 1st April, the inquiry is to be independent and objective; the members appointed have, therefore, no direct connection with any part of the Health Service. The Committee will decide their own procedure, but I have no doubt they will wish to take evidence from organisations and individuals with knowledge and experience of the working of the Service.
    Mr. Hastings: Does not the right hon. Gentleman feel that some knowledge of the work of a hospital is necessary for those whose job it is to assess the value of what is spent on that hospital?
    Mr. Macleod: Frankly, I disagree. If we once start having representatives of hospitals, in any sense of the term, I should have to have representatives of doctors, consultants, dentists, local authorities, opticians and the rest. I wanted this problem to be examined by a committee of five wise men, or four wise men and one wise woman—whatever we like to call it. I think we shall get the best result from that.
    Mr. Blenkinsop: Could the Minister say why he has by-passed the Central Advisory Committee, which is there, surely, to give him advice on this and other matters?
    Mr. Macleod: For the very reason I have just explained; because the Central Health Services Council is representative

    559
    of all the interests in the Health Service. For that reason, in my view, it is the wrong body for this kind of inquiry.

    Mental Defectives (Accommodation)
    Mr. Braineasked the Minister of Health the figures of recognised bed space set aside for mental defectives in England and Wales at the latest convenient date; the number of bed? not used for lack of staff or other reasons; the number of defectives actually occupying beds; and the number awaiting admission, showing adults and children, separately.
    Mr. Iain Macleod: On 31st December last, including certified institutions and approved homes outside the National Health Service, the bed figures were as follows: recognised bed space, 50,401; out of use, 1,921; occupied, 53,914. The waiting list figures of regional hospital boards totalled 8,714, including 4,487 children.
    Mr. Braine: While congratulating my right hon. Friend on what seems to be a striking improvement in the accommodation figures since last year, may I ask whether he has observed that the waiting list has not shortened, and could he continue, therefore, to bear this in mind? For example, in my constituency there are children who have been on the waiting list for five years. Will he continue to press on with the good work already in hand?
    Mr. Macleod: Yes, certainly. Frankly, the main difficulty here is that we need more money for capital expenditure in this field. For a long time I have said that, when it becomes available, the mental health service should have first claim.
    Mr. Shurmer: Does not the Minister agree that there is a chance to help the position by discharging a number of mental defectives who have been in those institutions for a number of years but who could be useful in industry outside, and who could have people to look after them if necessary, thereby making room for the bad cases who ought to go in?
    Mr. Macleod: I have heard that said and, of course, I look with great care into individual cases sent to me. However, there have been many examples-there must be one particularly tragic one
    560
    in people's minds—about what happens when a mental defective is perhaps allowed out too early.
    Mr. Popplewell: Is the Minister aware that this question is acute in the North-East, and will he give encouragement to the North-Eastern Regional Hospital Board to incur additional expenditure in order to provide more beds there, and will he do his best to undertake further development generally to deal with these unfortunate people?
    Mr. Macleod: Yes, I am aware that it is as bad, if not worse, in the North-East Region. I took advantage of a recent visit to discuss this matter with the Regional Board, but—and I do not hide this from the House—the ultimate answer is increased capital expenditure in this field.
    Mr. S. Silverman: Is it not the case that one tragic instance to which the Minister referred was that of a man who had committed murder before being certified, and that this is no reason for continuing to retain in custody, sometimes for 20 or 25 years, people who have never shown any criminal tendency of any kind?
    Mr. Macleod: I think, with respect, that the hon. Member is wrong on that case. The person in my mind was a defective before.

    Hospital Repairs
    Mr. Blenkinsopasked the Minister of Health the total expenditure on maintenance and repair of hospitals for 1952–53, as compared with 1951–52.
    Mr. Iain Macleod: Expenditure on the maintenance of hospital buildings, plant and grounds (excluding wages of staff) was just over £7.8 million in 1951–52. The estimate for 1952–53 was £10,059,000, but this is probably unrealistic and a final figure is not yet available.
    Mr. Blenkinsop: Can the Minister say when he will be in a position to give the actual figures for the actual expenditure incurred over the 1952–53 financial year?
    Mr. Macleod: I will let the hon. Member know, if he wants to put down a Question.
    Mr. Shepherd: Can my right hon. Friend say how much of this expenditure is devoted towards mental health?
    Mr. Macleod: No, Sir, not without notice.
    Sir R. Glyn: Would my right hon. Friend say what steps he is taking to see that evacuated buildings are put to some good use instead of falling into disrepair when they come under hospital boards?
    Mr. Macleod: I think the most important recent step is that we have now abandoned the separate ceiling for building maintenance, which affects both these previous years' figures, and hospitals have been instructed—it will be of great benefit to them—that they can spend as much as they like on building maintenance within their total allocation.

    Personal Case
    Mr. J. T. Priceasked the Minister of Health if he will order an investigation into the case of George Patrick Smith, who has been detained for approximately 16 years in a mental institution, following a short Borstal sentence when he was a boy, in circumstances of which the hon. Member for Westhoughton has given him details.
    Mr. Iain Macleod: As the hon. Member is aware, the case of George Patrick Smith has been considered many times, and is kept under constant review. In the circumstances, I do not see the need for an investigation.
    Mr. Price: Does the right hon. Gentleman appreciate that this unfortunate man has now spent nearly half his life, since the age of 16, under detention and never had a chance in life at all? Is he aware that on many occasions he has escaped from detention, has served in the Army— in the Green Howards—without any complaint against him, passed the Army medical board, on another occasion, worked in the coal mines and was passed by the medical authorities governing employment in the coalmining industry? Is he aware that the man has been examined by a London specialist who expressed the opinion that he ought never to have been certified at all? Will the Minister reconsider the matter? Does the Habeas Corpus Act mean nothing at all in this country?
    Mr. Macleod: As the hon. Member knows—because we have corresponded a great deal about this case and talked a great deal about it—I have been into this matter personally more than once. At his request, I asked the board of control to look particularly at the case of George Patrick Smith and a special medical investigation took place at the request of the hon. Member and was undertaken by a senior medical commissioner of the board. To go beyond that would be to say that I have no confidence in my board of control. That is not true; I have full confidence in them and must leave the matter there.
    Mr. S. Silverman: In view of the extremely unsatisfactory and disturbing nature of the reply, I beg to give notice that I shall raise the matter on the Adjournment.

    Prescription Pricing (Staff)
    Lieut.-Colonel Liptonasked the Minister of Health why the total number of staff employed in pricing prescriptions dispensed under the National Health Service increased from 1,089 to 1,302 during the year 1952; and what is the total additional wage bill incurred as a result.
    Miss Hornsby-Smith: The main cause is the opening of two additional pricing offices to reduce arrears of pricing. The approximate additional wage cost in the year 1952 was £41,000.
    Lieut.-Colonel Lipton: Is it not by now fairly clear that the 1s. prescription fee, while it may have reduced the number of prescriptions, means that on each prescription the number of items is very much higher and that means more staff and checking? Does not the situation now show that the 1s. prescription is serving no purpose whatever?
    Miss Hornsby-Smith: I am afraid the hon. and gallant Member is rather mixing the points because one of the reasons for opening two additional offices is to clear the arrears inherited when we came into office.
    Mr. Blenkinsop: Can the hon. Lady say what the arrears now stand at, in view of the importance of getting rid of them?
    Miss Hornsby-Smith: They are down to six months.

  EDUCATION

    School Meals
    Mr. Castleasked the Minister of Education how many school dinners were served in the year ended on 1st March, or other convenient date in 1952 and 1953, respectively.
    The Minister of Education (Miss Florence Horsbrugh): The number of school dinners served in the year ended 31st March, 1952, was approximately 596 million. I regret the information for the year ended 31st March, 1953, is not yet available.
    Mrs. Castle: Can the right hon. Lady say why she is so evasive about giving figures for the decline in school meals since the increase in price on 1st March this year? Is she aware that in many county areas there has been a disastrous drop in the number of meals taken and in the Lancashire county area the number of meals taken had dropped by 45,000 a week at the end of April?
    Miss Horsbrugh: The hon. Lady asked me for the year and, as I pointed out to her, I have not yet got the figures for last year. As to the point of whether there has been any change in the numbers and what drop there has been, if any, I have already informed the House that I have asked for figures for a date in June. I will get those figures and be able to give them to the House then.
    Mr. Palmerasked the Minister of Education if she is satisfied that meals served in the schools are generally adequate in quantity to meet the needs of growing children; and what steps she has taken to see that the average quality justifies the increased price of 9d.
    Miss Horsbrugh: Yes, Sir, from reports received from Her Majesty's Inspectors I am satisfied that, in general, school dinners are satisfactory both in quantity and quality.
    Mr. Palmer: Is the right hon. Lady aware that the economic policy of Her Majesty's Government is tending steadily to reduce the practical value of this important social service?
    Miss Horsbrugh: No, I am not aware of that because the cost of the food and the amount has gone up. If the hon. Member can tell me of any case of any
    564
    particular school in which he considers the children are not getting value from the quality or quantity point of view. I shall be pleased to look into it.
    Mr. Shinwell: Are we to understand from that reply that the cost of food has actually gone up since this Government came in?
    Miss Horsbrugh: It has been going up since—[Interruption.] It went up at the end of the time of the last Government; it has become more steady, but we have not been able to reduce it to the point at which it was before the last Government took office.

    Grammar School, Sittingbourne
    Mr. P. Wellsasked the Minister of Education the total sum spent on adaptations, repairs, provision of hutments and rents, during the past 10 years, in respect of the Sittingbourne County Grammar School for Girls.
    Miss Horsbrugh: During the last 10 years, alterations and improvements, which include two class rooms now being built, have cost £10,305. The cost of repairs and rentals is available only for the last six years and has averaged' £665 a year.
    Mr. Wells: Is the right hon. Lady aware that this considerable expenditure has resulted in producing an ugly, wasteful and unsatisfactory conglomeration of hutments; that the governors, parents, teachers and the local authorities are very gravely concerned about the matter, and will she scrap this policy of adding to this ugly sprawl and sanction the school of which Sittingbourne was deprived as a result of the operation of the Geddes Acts after the First World War, and which it appears her own axe is delaying now?
    Miss Horsbrugh: In this matter of the enlarging and repair of schools, as the hon. Member knows, I am carrying on the policy of my predecessor. As soon as it is possible to replace all the old schools and depart from the policy of my predecessor, I shall do so.

    Food Hygiene
    Dr. Broughtonasked the Minister of Education if she will circularise local education authorities to encourage persons engaged in the preparation of food

    565
    for school meals to take a suitable course of instruction in personal and kitchen hygiene in order to reduce the incidence of food poisoning in school canteens.
    Miss Horsbrugh: I hope shortly to issue a memorandum to authorities on the prevention of food poisoning in school canteens. Instruction in personal and kitchen hygiene is already included in the training courses which local education authorities are encouraged to arrange for staff employed in the school meals service.
    Dr. Broughton: Is the right hon. Lady aware that since I drew attention to the unhygienic conditions prevailing in a school canteen in my constituency—and I thank her for the prompt action taken in that case—the most recently published report of the Ministry of Health states that there were no fewer than 45 outbreaks of food poisoning in school canteens in England and Wales in 1951? Does the Minister agree that she should stress on local education authorities the urgent need for maintaining a high standard of cleanliness in school canteens?
    Miss Horsbrugh: I thoroughly agree with the hon. Gentleman that we should stress that need, and I am trying to do so. The publication of the memorandum will stress it again, and, as I have said, instruction is being given in personal and kitchen hygiene.

    INDO-CHINA (SITUATION)
    Mr. A. Hendersonasked the Prime Minister whether, in view of the concern expressed by the North Atlantic Council in their recent communique over the increased burden of France in the struggle against aggression, following the extension of hostilities in Laos, he will make a statement on this new crisis.
    The Prime Minister (Sir Winston Churchill): I will try to deal with some aspects of this question when I open the debate on foreign affairs next week.
    Mr. Henderson: In view of the fact that two weeks ago the 14 member States of the United Nations meeting in Paris at the North Atlantic Treaty Organisation Council expressed grave concern at the development of the situation in Laos, does not the Prime Minister consider that
    566
    this matter should be brought before the Assembly of the United Nations under Article 11? May I ask him in the second place whether, in view of the confusion as to the constitutional and other aspects of this international crisis in Indo-China, he would consider publishing a White Paper giving all the available information?
    The Prime Minister:I shall take all that into consideration.

    KOREA (TRUCE TALKS)
    Mr. A. Hendersonasked the Prime Minister whether his attention has been drawn to the official statement of General Harrison that time in the discussions at Panmunjom is running out; and whether he will give an assurance that it is the policy of Her Majesty's Government to continue the armistice discussions, so long as there is a prospect of achieving a reasonable compromise on the prisoners-of-war issue.
    The Prime Minister: I do not interpret the statement referred to as meaning that a time limit has been set on the discussions at Panmunjom. That is certainly not my understanding. My answer to the second part of the Question is, therefore, that I can give the assurance asked. Meanwhile, according to Reuters Agency, a new eight-point plan has been put forward by the Communists. As soon as this reaches us in official form we shall give it most careful attention.
    Mr. Noel-Baker: Can the Prime Minister confirm that it is true, as reported, that negotiations are largely carried on by the reading of typewritten statements which are subsequently immediately read to the Press? Does not the Prime Minister consider that that combines the disadvantages of all the systems of carrying on such work?
    The Prime Minister: I am not at all sure that it is not a little premature to judge. I have not felt at all convinced that General Harrison is not striving earnestly for the result we all have in view. Far from it. Also, I think that to make great changes now in the method of discussion would involve a lot of correspondence and might in fact hamper the movement of events. As the right hon. Gentleman probably knows, Mr. Murphy,

    567
    who is a very skilled diplomatist, is the political advisor to General Mark Clark. I do not think it should be represented that this is being done in a rough and crude way. Indeed, I still hope that a solution may be reached.
    Mr. Noel-Baker: May I say that I did not in any way intend to criticise General Harrison, who is doing his duty according to his instructions? Our anxiety is that the influence and wisdom of other members of the United Nations may be brought effectively to bear in the very great issues now being decided there.
    Mr. Wyatt: Can the Prime Minister say whether he has seen that on more than one occasion General Harrison has stated that the progress of the talks is at zero? Does this represent the view of the Government of this country and of the United States? Can the right hon. Gentleman say how much latitude General Harrison is allowed and how much he has to refer to higher authority, because if it is the official view that progress is at zero it is not very encouraging?
    The Prime Minister: If progress so far has been at zero it seems at any rate to leave a large field for expansion.

    QUESTIONS TO MINISTERS (FOREIGN OFFICE)
    Mr. Donnellyasked the Prime Minister if he will make a statement regarding the allocation of responsibility for answering of Foreign Office Questions during the temporary absence of the Secretary of State.
    The Prime Minister: Questions on foreign policy should be put down to the Foreign Secretary. During the regrettable absence of my right hon. Friend the Secretary of State, I have assumed charge of the Foreign Office. Whether I or the Minister of State or the Joint Undersecretary of State reply to a particular Question must depend on the circumstances. In each case we shall do our utmost to give the most convenient service to the House.
    Mr. Donnelly: Before asking the right hon. Gentleman a supplementary question, may I express what, I think, is the universal opinion of the House, that we wish the Foreign Secretary a very speedy
    568
    recovery and an early return to this Assembly of which he has been a member for so long?
    With regard to these questions, does the right hon. Gentleman mind, so far as the Korean problem is concerned, if we put down Questions to him and they can then be deferred downwards if the matter is suitable? But may we assume at the beginning that the Korean truce talks are the personal responsibility of the right hon. Gentleman?
    The Prime Minister: I am obliged to the right hon. Member for expressing what, I know, is the universal feeling of the House at the loss we have suffered by the temporary absence and severe illness —which he is recovering from—of my right hon. Friend the Foreign Secretary. Overwork played a large part, I think, in making his case more serious.
    With regard to dividing up Questions, they are not divided upon the basis of importance. They always are put to the Foreign Secretary and divided up according to what is found to be the most convenient arrangement for the Department and for the House. It might very often be that one of my right hon. Friends will answer all the Questions. But there are certain things I am particularly concerned with at the present time and I am anxious to deal with myself.
    Mr. H. Morrison: We all associate ourselves with what my hon. Friend has said and with what the Prime Minister has said about the absence of the Foreign Secretary, and we all wish him well.
    There is a practical problem which I do not expect the Prime Minister to answer at the moment, but perhaps he would give his attention to it; namely, that if the House could have, so to speak, some guiding principle in the classification of questions it would assist hon. Members in knowing whether it was possible to put Questions down to the Prime Minister or the Secretary of State. I do not ask for an answer now, because I appreciate the complications. But if the right hon. Gentleman could consider the classification of Questions and would give the House guidance at some early date it might be useful.
    The Prime Minister: I accept personal responsibility for the allocation of Questions. We have all been through this—

    569
    both parties have had the misfortune of having Foreign Ministers ill and having to make arrangements to carry on the business meanwhile. I take responsibility as to who answers Questions. They are not divided from the point of view of the most important ones being answered by me and the less important ones answered by my two highly competent colleagues.
    Mrs. Castle: Would the right hon. Gentleman give instructions that where a Question is put down to him and transferred to the Minister of State for Foreign Affairs, or vice versa, the hon. Member who put down the Question which is so transferred is notified before it is answered?
    The Prime Minister: Yes, provided that time allows.

BUSINESS OF THE HOUSE
Mr. Attlee: May I ask the Leader of the House whether he will tell us the business for next week?
The Lord Privy Seal (Mr. Harry Crookshank): Yes, Sir. The business for next week will be as follows:
MONDAY, 11TH MAY—Debate on Foreign Affairs, which will take place on the Motion for the Adjournment of the House.
TUESDAY, 12TH MAY—Supply [14th Allotted Day]: Committee (which it is proposed to take formally).
Conclusion of the debate on Foreign Affairs.
WEDNESDAY, 13TH MAY — Lords Amendments: Iron and Steel Bill.
Second Reading: Therapeutic Substances (Prevention of Misuse) Bill [Lords], if there is time.
THURSDAY, 14TH MAY—Report and Third Reading: Education (Miscellaneous Provisions) Bill.
Committee and remaining stages: Births and Deaths Registration Bill [Lords].
Motion to commit the Hospital Endowments (Scotland) Bill [Lords] to the Scottish Grand Committee.
Motions to approve: Draft Transferred Undertakings (Compensation to Employees) (Amendment) Regulations.
570
Town and Country Planning (Minerals) Regulations; and similar Regulations for Scotland.
FRIDAY, 15TH MAY—Private Members' Motions.
On Monday, at the end of the Foreign Affairs debate, we should like to obtain the Report and Third Reading of the Coastal Flooding (Emergency Provisions) Bill, which is an urgent Measure. The Bill has proceeded so far with the general co-operation of the House, and I hope that it will be agreeable to dispose of the Bill on Monday next as I have suggested, with a view to its early passage into law.
It may also be convenient for me to inform the House that it is proposed to adjourn for the Whitsun Recess on Friday, 22nd May, and meet again on Tuesday, 9th June, after Her Majesty's Coronation.
I may also add that that the Government will propose in due course that: the House should not sit on 15th June which is the day of the Naval Review.
Mr. Attlee: May I inform the right hon. Gentleman that we on this side of the House are quite agreeable, in view of the urgency of the matter, that the Report and Third Reading of the Coastal Flooding (Emergency Provisions) Bill should be taken on Monday?
Mr. Crookshank: I am much obliged.
Mr. Anthony Greenwood: Could the Leader of the House say when it is proposed to find time for a discussion of the excellent and constructive Motion on Purchase Tax which stands on the Order Paper in the names of other hon. Members and myself?
Mr. Crookshank: I could not set a date for that.
Mr. Shinwell: The right hon. Gentleman was good enough, last Thursday, during the discussion on business, to promise a White Paper on the North Atlantic Treaty Organisation Council meeting. As it has not yet emerged, can he say why?
Mr. Crookshank: It is in an advanced stage of preparation and I think the right hon. Gentleman will see it very shortly.
Mr. Shinwell: This week?
The Prime Minister (Sir Winston Churchill): I hope tomorrow.
Mr. Shinwell: I am obliged.
Arising out of the business on the Army and Air Force (Annual) Bill, which is due for Second Reading today, may I remind the Leader of the House that the position has disturbed some of my hon. Friends, as well as some hon. Members opposite? In view of the fact that there is no hurry about the Bill, because of the decision we reached last year, is it possible so to reconstruct the form of the Bill as to enable hon. Members to insert Amendments if they so desire? Is he aware that because of the form in which the Bill has been drawn—the Government not having inserted Amendments—hon. Members have been informed that they cannot insert Amendments?
Mr. Crookshank: I thought I dealt with the position yesterday. I have been advised that certain Amendments can be moved.
Mr. Shinwell: Is the right hon. Gentleman aware that since he made his statement and since he had conversations with certain hon. Members, after he made his statement, the Table has said that no Amendments can be submitted? I understand that that is the position—that no Amendments can be submitted? May I address myself to you, Mr. Speaker? Very careful inquiries have been made about this, and I understand that that is the position—that Amendments will not be accepted because they are regarded as being out of order for the reason that no Government Amendments have been inserted in the Bill?
Mr. Speaker: I have not seen the Amendments and I had heard nothing of this until the right hon. Gentleman mentioned it now, but I should think that Amendments would be in order— Amendments in Committee. Whether any precise Amendment is in order is a matter for the Chairman.
Mr. Shinwell: It is not a question of whether Amendments are in order. The question is whether any Amendments may be submitted. After inquiries have been made in the appropriate quarters of the House, I understand that hon. Members have been informed that because the Government have inserted no Amendments in the Bill, no hon. Member is entitled to do so.
Mr. Speaker: I think the right hon. Gentleman must have been misinformed, but if there is a misunderstanding I will try to clear it up. My understanding of the position is that it is open to hon. Members to put down Amendments to the Bill.
Lord Malcolm Douglas-Hamilton: Can my right hon. Friend say when any time can be found for the discussion of the Motion which stands on the Order Paper in the name of nearly 100 hon. Members concerning the Committee of Privileges?
[That the statement of the Chairman of the Inverness-shire Unionist Association contained in the newspaper, "The Scotsman," of 30th April, 1953, to the effect that all constituency matters should be dealt with by the Association, and offering the personal attention of another Scottish Member of Parliament to matters which are the duties of the sitting Member for Inverness-shire, constitutes an affront to this House; and that the statement be referred to the Committee of Privileges.]
Mr. Crookshank: I saw that Motion, of course, and the amount of support which there was in the names on the Order Paper, but I have looked at the time available to us very carefully and I do not see any prospect of being able to deal with it in the immediate future.
Mr. Ede: Can the right hon. Gentleman say how much of the business which he has put down for the later stages of next Thursday is regarded as formal because, in view of the Government Amendments which appear on the Order Paper, the first item which he has put down appears very likely to take a considerable amount of time?
Mr. Crookshank: If it takes a considerable time it may not be possible to reach the conclusions which I had hoped. But some of it is certainly formal.
Mr. Swingler: On a point of order. I should like to seek your guidance, Mr. Speaker, further to the question raised by my right hon. Friend the Member for Easington (Mr. Shinwell) about the Army and Air Force (Annual) Bill. The position is that since the statement of the Leader of the House yesterday some hon. Members have sought advice on the subject of submitting Amendments to the

573
Bill, and we have been advised that since the Bill contains no Amendments as brought forward by the Government, notwithstanding the title of the Bill, no Amendments submitted by hon. Members would be in order and it would be impossible, therefore, to have any discussion in Committee. I should like to have your guidance, therefore, as to whether that is the position or not and whether hon. Members will be entitled to submit Amendments of substance which will be in order.
Mr. Wigg: Is it not a fact that we have now reached the position with this Measure, which is of great constitutional importance, that because the Government have put down no Amendments the Opposition can put down no general Amendments either? Does not the Leader of the House accept that that is a most unfortunate situation?
Mr. Speaker: I must reply to the point of order. As I said in replying to the right hon. Gentleman the Member for Easington (Mr. Shinwell), who raised the matter first, it is contrary to my understanding of the rules of order, and there must be some misunderstanding somewhere. I will endeavour to clear it up. It is my firm belief that proper Amendments which are otherwise in order can be put down. I have never known to the contrary.
Mr. Wigg: Does this not arise because the scope of the Bill as drafted does not permit the putting down of general Amendments?
Mr. Speaker: I must not be taken as making a precise statement as to what kind of Amendments are in order, and the House must let me have an opportunity of studying what has been actually said, because it seems to me that there must be some misunderstanding.
Mr. H. Morrison: It is obviously inconvenient that hon. Members should be in doubt, before the commencement of the Committee stage, at any rate, if not immediately after the Second Reading, whether they can put Amendments down, and, if so, within what scope. I am told that there is a slight alteration in the Long Title of the Bill, which might exclude certain possibilities. Would it be possible for you to consider the
574
matter, Sir, and, perhaps, give the House an indication of your views before the Second Reading is taken tonight?
Mr. Speaker: Certainly.
Mr. Emrys Hughes: In view of the statement of the Leader of the House that there is no time, would he not consider changing the date of the Naval Review, and giving up 15th June for business in this House? Is he aware that some of us do not want to go to the Naval Review, but will be quite prepared to meet here and deal with the Judges' Salaries Bill, any Lords Amendments or anything else?
Mr. Crookshank: That may well be, but I think the hon. Member might find himself alone in the Chamber.
Hon. Members: No.
Lord Malcolm Douglas-Hamilton: May I ask the Leader of the House whether, if he cannot possibly find time for my Motion in the ordinary business of the House, he could find it on the Whitsun Adjournment debate?
Mr. Crookshank: I have nothing to do with the allocation of time for the Whitsun Adjournment. That is a matter within the discretion of Mr. Speaker.
Mr. S. Silverman: On a point of order. Although, in this particular case, you, Sir, felt unable to certify whether this Motion ought to be debated in advance of other business, nevertheless, is not the Motion standing on the Order Paper in the noble Lord's name a Motion as to Privilege, and, where matters of Privilege are on the Order Paper, are they not entitled to a measure of priority over other business?
Mr. Speaker: That is a matter for the Government, and they must deal with the matter as they find themselves able to do. There are all sorts of things for which the House is asked to find time, but perhaps I might say one thing about the hon. Member's question concerning the Whitsun Adjournment debate. I do not think that a matter of Privilege can be raised on the Motion for the Adjournment, because, on that Motion, there must be some Minister responsible for the matter raised, and that cannot be the case in a matter of Privilege.
Lord Malcolm Douglas-Hamilton: Would it not be possible for my right hon. Friend to suspend the Rule so that we may discuss the matter?
Mr. Speaker: That is not for me.
Mr. H. Morrison: I do not wish to discuss a matter which is domestic within the constituency of the noble Lord, but I did read, in OFFICIAL REPORT, what was raised, and, without prejudice to any final conclusion, I said that the noble Lord had raised a matter of substance, as touching the rights of hon. Members of this House. I want to put it to the Leader of the House whether there could not be conversations between his hon. Friends and himself or between the usual channels so that this matter might be ventilated, and entirely without prejudice to whatever conclusion that the House might ultimately reach. I did think that a matter affecting prima facie the rights of hon. Members of the House, duly elected, did arise on the case raised by the noble Lord.
Mr. Crookshank: That may be, but I was asked about time, and I said that I did not think there was any time in the immediate future to discuss this matter.
Mr. Pannell: Does the Leader of the House appreciate that, in a domestic matter of this kind, he does leave himself open to a charge of political partiality in keeping it away from the Floor of the House?
Mr. Beswick: Does the answer of the right hon. Gentleman mean that he does not propose to accept the invitation of my right hon. Friend to discuss this matter through the usual channels?
Mr. Crookshank: It was not an invitation that needed to be given, because conversations are always going on, not only through the usual channels with the Opposition but also between ourselves, which was the alternative suggested by the right hon. Gentleman.
Mr. Stokes: May I support what my right hon. Friend has said? Surely, in a matter which concerns an hon. Member of this House in a Motion contained on the Order Paper, it has been the custom to get it off the Order Paper as soon as possible, and to provide time for its discussion? Surely the Leader of the House knows that?
Sir D. Robertson: While I am perfectly certain that there is no desire on the part of the Government to get the matter off the Order Paper, as suggested by the hon. Member for Leeds, West (Mr. Pannell), is it not a fact that only the people can elect a Member of Parliament and that only the people can reject him? Is it not apparent from the wording of this Motion that the constituency chairman of the noble Lord has abrogated to himself the right to reject the hon. Member and to come between him and his constituency duties?
Mr. Speaker: I think that question is premature. It is directed to the merits of the matter. What is really before the House is the question whether time could be found for discussion of the Motion.
Mr. Donnelly: May I seek your guidance, Mr. Speaker, because I am not very clear about this matter? Is it not a fact that this Motion raises a matter where a question of Privilege is concerned, and that, in the last analysis, it should rest with the House whether time is allocated to the discussion of very important questions involving the rights of the House as a whole?
Mr. Bowles: In the statement of the noble Lord last Friday, he said that another hon. Member was dealing with his correspondence, and, therefore, that other hon. Member, whose name is not known to me, is also under a cloud. That makes the matter more urgent still.
Mr. Stokes: Is it not a fact that it has always been the custom of the House that, on matters concerning hon. Members of this House, somehow or other, time is found to debate the matter and get the Motion off the Order Paper? Surely that has been the custom.
Lord Malcolm Douglas-Hamilton: On a point of order. Last Friday, in my statement, I did not say that an hon. Member was dealing with my correspondence, but merely that the chairman had indicated that an hon. Member would be available to do so.
Mr. Speaker: In answer to the right hon. Gentleman the Member for Ipswich (Mr. Stokes) on general principles, in my experience, if there is a matter of this sort, it is dealt with as soon as practicable, and either some accommodation is

577
reached or the Motion is withdrawn. Of course, these matters are relative. All matters of business are relative, and it does not lie in my hands, thank goodness, to arrange the Business of the House.
Mr. H. Morrison: In these circumstances, and I appreciate the reservations which you made in your observations, Mr. Speaker, as this is a matter which happens to affect an hon. Member opposite, but which might well affect any hon. Member in any part of the House, would not the Leader of the House be good enough to give further consideration to it, so that it could be suitably ventilated, without prejudice to the conclusions of any of us at the end of the discussion?
Mr. Crooksbank: It is only a question whether there was any time in the immediate future, and what I said was that there was not. Of course, all that has been said this afternoon I will carefully consider.
Mr. Wigg: Is not the reply of the Leader of the House nothing less than offensive humbug?

ORDERS OF THE DAY

  FINANCE BILL
  Order for Second Reading read.
  3.49 p.m.
  The Financial Secretary to the Treasury (Mr. John Boyd-Carpenter): I beg to move, "That the Bill be now read a Second time."
  This Bill embodies, and is based on, the 27 Budget Resolutions which the House passed through the Committee and Report stages last month without a Division. With its 33 Clauses and two Schedules, it is physically a conspicuously less bulky article than its predecessor of last year, which began its career with 65 Clauses and 13 Schedules. It does, however, contain, apart from the matters which raise major issues of policy which were discussed during the Budget debate, a number of other provisions of serious importance, some of them, I am sorry to say, of some complexity, which, in the nature of things, could not be discussed during the Budget debates.
  I think, therefore, that it would be for the convenience of the House if, apart from one or two matters on which I may touch, and on which I can hardly expect the whole-hearted agreement of right hon. Gentlemen opposite, I should, in the main, concentrate the greater part of what I have to say this afternoon on an attempt to elucidate certain aspects of these proposals without, of course, trespassing on that detailed analysis which is the normal function of the Committee stage.
  As my right hon. Friend made clear in the course of the Budget debate, a major purpose of the financial and economic policy which these proposals embody is the fitting of the industrial and commercial system of this country for the struggle which lies ahead. It is with a view to serving this purpose, by encouraging the re-equipment and modernisation of British industry, that my right hon. Friend, as he explained in the Budget speech, has decided on the restoration of the system of initial allowances. I will say a word or two upon how this system will operate.
  As the House will recall, under the Finance Act, 1951, for which, of course, the right hon. Member for Leeds, South

  579
  (Mr. Gaitskell) was responsible, these allowances were suspended in respect of expenditure incurred after 5th April, 1952. Clause 14 of the Bill provides that expenditure incurred on or after 15th April, 1953, will rank for these allowances at the rate of 10 per cent. in the case of industrial buildings and structures, 20 per cent. in the case of machinery and plant, and 40 per cent. in the case of new mining works.
  The term "new mining works" includes pit shafts, oil wells and surface roads, but not mining machinery. This special rate is, of course, a recognition of the very considerable value of the extractive industries and especially of new mining developments to the economy, and compares with 10 per cent. which was the rate appropriate to this sort of expenditure under the previous system.
  The 20 per cent. rate for plant and machinery is the same as the 1945 rate which, as hon. Members will recall, was raised to 40 per cent. in 1949. My right hon. Friend considered whether it might not be possible to restore the 40 per cent. rate, but hon. Members will appreciate that this is in the long run a very costly concession. The allowances as they are proposed at the rates in the Bill will cost £76 million in a full year in respect of plant and machinery, £2 million in respect of mining works and £6 million in respect of buildings. The cost, of course, will be negligible in the current year, £50 million in the next year 1954-55, and at the full rate of £84 million thereafter.
  I know that the shipping industry is particularly interested in these allowances, and it may interest the House to observe how they operate in respect of shipping. When the allowances were withdrawn, in the 1951 Budget, it was provided that they should still continue to be given in the case of ships on which work had been started or a contract for ships or engines placed prior to Budget day 1951. I think, if my recollection is right, that that provision was inserted as a result either of an Amendment moved or of representations made by my right hon. Friend the Member for Renfrew, West (Mr. Maclay).
  Clause 14 (5) of the Bill provides that these allowances shall be given in respect of a ship if it is delivered on or after 15th April, 1953, or if any part of the
  580
  purchase price is payable after that day. At the same time, the somewhat complicated wording in the first part of Clause 14 (5) deals with the situation which could arise if a ship were, on the face of it, entitled to allowances under both rates, the 20 per cent. new rate and the old 40 per cent. rate.
  The effect of these provisions is that no ship which would have been entitled to the 40 per cent. rate shall lose it as a result of this Bill, that is to say, the 20 per cent. new rate shall not apply to those ships which are entitled to the 40 per cent. rate. None will be worse off, those I have described will get the benefit of the provision, and, in practice, when due allowance is made for the time taken in the construction of ships, particularly large ships, this should be a help to constructions which began quite some considerable time ago.
  This treatment of the peculiar problems of the shipping industry arises from the rather special arrangements for payment, construction and delivery which apply to ships, and is equally, I am sure, justified in the public interest by the vital importance of this great industry to our economy and by the difficulties which it has to face as the result of the high cost of replacement of existing tonnage.
  While on the initial allowances, I might, perhaps, be allowed to invite the attention of hon. Members to the provision in Clause 15 which, following on the recommendations of the Tucker Committee, extends the industrial buildings allowance both to the fishing industry and to overseas pastoral companies.
  The other provision of this kind with which we are concerned is the intention which my right hon. Friend announced in his Budget speech to bring the period of charge to the Excess Profits Levy to an end at the end of this year. Clause 25 does this and makes one or two necessary terminal adjustments, but, as hon. Members will have seen, although we have not thought fit in the circumstances to propose any other alterations in a tax which is due to come to an end so soon, two Amendments to the tax itself are proposed in subsection (2) of Clause 25. They are inserted to carry out undertakings given during last year's debates.
  The first, that in subsection (2, a) arises from the long debate which some hon.

  581
  Members may recall we had in Committee last year on the position of investment trusts and franked investment income. The House will recall that in the event relief was given in what is now Section 52 of the Finance Act, 1952, in respect of such income in the case of investment trusts only and in the case of a group of companies only where they all consisted of investment trusts.
  During last year's Committee stage debates, my hon. Friend the Member for Langstone (Mr. Stevens) questioned whether anomalies might not arise in the case of a group of companies where the overwhelming majority of the interests concerned was that of investment trust, but where some small trading company was also a member of the group. In resisting that Amendment, I gave an undertaking that we would watch the point when the tax came into operation and indicated that if difficulties arose my right hon. Friend would be prepared to consider legislation having retrospective effect.
  It is the case that one or two cases have come to light in which difficulty has arisen where a group of companies have consisted almost entirely of investment trusts, but where the existence of a small subsidiary trading company has deprived them of this relief. One particular case —I will not give the name of the trust for obvious reasons—involves a big investment trust with a share capital of about £2 million which has a very small subsidiary trading company attached to it with a capital of only £5,000 and which, as a result of the Clause, loses this relief. Consequently, this Amendment provides, and provides retrospectively, that the relief shall apply in cases where, if all the functions of the group of companies were combined in the functions of a single company, substantially the whole of the functions of that company would consist in the holding of investments. The effect of this is to prevent a comparatively small trading company depriving a larger group of investment trusts of the relief to which otherwise they would be entitled.
  The other Amendment in subsection (2, b) enables the special allowance now made for metals, oil and asbestos, the increased output of which is in the national interest, to be applied in the case of any mineral in respect of which the Treasury
  582
  give the necessary certificate. The Chancellor of the Exchequer, during last year's Budget debates undertook to review the question of including a wide variety of these articles. The solution we now propose is to extend the power to certify to all minerals, and it will be for the producers concerned, if they have not already done so, to apply and to make their case to the Treasury for the necessary certificate. We think that the best way to handle this rather difficult question is to allow each industry to make its case on its merits, rather than to prepare an arbitrary and not necessarily very comprehensive list. There was one stage last year when the Order Paper had begun to look like the catalogue of a geological museum.
  I will now deal with a number of small but not unimportant points of the Bill. I believe that Clause 28 will be welcomed in all quarters of the House, because it enables the National Land Fund, which can already be used to enable houses and land to be accepted in payment of Estate Duties, also to be used to cover chattels which would ordinarily be kept in any building which has been so accepted. This would enable us in appropriate cases to keep together as a whole historic houses and their contents. I am sure that this will be in accordance with the wishes of hon. Gentlemen.
  Clause 2 deals with the subject of beer. It enables payment of duty in respect of high strength or lager beers to be postponed up to 12 months. The reason is that these beers, I am advised, require to be kept to mature for a certain length of time after brewing. There are no facilities for storing beer for home consumption in bond, and there is thus a certain discouragement against the production of beers which require longer storage, if the duty is payable, as at present, within a few weeks. The Clause enables the period to be extended to 12 months in the case of these beers only, and as they are beers which compete with imported beers from the Continent it is desirable that this adjustment should be made.
  Clause 4 makes a small reduction in the small duty payable where sidecars are attached to lower or medium-sized motor bicycles. That is a small contribution to road safety. I understand that it is safer to travel on a sidecar than on a pillion.
  Clause 21, which, I am sorry to say, looks rather formidable, is designed to

  583
  deal with a difficulty which faces farmers who have had their herds slaughtered as part of the measures taken to combat foot-and-mouth disease. It also covers other animals in respect of which the position is the same, notably poultry, which may have to be slaughtered as the result of the Minister of Agriculture's measures to deal with fowl pest.
  Under the present law a farmer who wished to have his herd treated for tax purposes on the herd basis had, in general, to elect to be so treated before 6th April, 1948. If he has not so elected, when the animals are slaughtered and compensation is paid, the animals have to be treated under the existing law as trading stock and the compensation as an ordinary trading receipt, and so, of course, it falls under tax. As the result, a large sum of so-called profit may arise with a consequential heavy liability to Income Tax and possibly Surtax for a farmer who has just had the misfortune to have his herd slaughtered. A further consequence may be that it will be much more difficult for him in the circumstances to replace his herd.
  Where, under the right of election to which I have referred and which lasted until 5th April, 1948, a farmer elected to be on a herd basis, the animals of the herd do not attract the same tax consequences because they are treated as capital assets for tax purposes, and when compensation is paid on slaughter it has not been necessary to bring the compensation into account as a trading receipt. The Clause abolishes in cases of compulsory slaughter the principle and practice of a once-for-all election by 5th April, 1948, and gives farmers whose stock has to be slaughtered a further opportunity to go on to the herd basis.
  Under subsection (2) of the Clause this can be done at any time up to 12 months after the end of the financial year in which the compensation payment in question is made. We have thought it also desirable to cover the fact that in 1951–52, as hon. Members will recall, there was a very serious outbreak of foot-and-mouth disease. The time limit in subsection (2) would not now cover that outbreak. Consequently, in subsection (6), we provide that this election may be exercised back to the financial year 1951–52, and that a farmer whose stock
  584
  was slaughtered shall have a chance to go on to the herd basis for that year at any time up to the end of the present financial year. The result is that a considerable number of farmers who suffered from the epidemic of 1951–52 will be able to avail themselves of this advantage.
  Clause 31 is designed to put beyond doubt the legal position where, in Customs and Excise cases, proceedings are taken for pecuniary penalties. For well over a century it has been accepted law, even though the only penalty was pecuniary and not imprisonment, that these proceedings were treated as criminal proceedings. In a recent case in the High Court there has been a decision to the effect that proceedings of this sort should not be in criminal form, but should be treated as relating to. a civil debt due to the Crown.
  This Clause is to put the matter beyond doubt. It is very much in the interest of a person charged that he should be treated under the law as it has for long been understood to be, that is to say, that these proceedings are of a criminal nature, since the court can mitigate the penalty in a criminal, but not in a civil, case. If further questions arise on this during the Committee stage I hope that one of my hon. and learned Friends the Law Officers will be able to deal with them.
  I should now like to deal with a question in connection with the duty on hydrocarbon oils. I have recently received representations from a number of deputations representing bodies and firms concerned in the production of oil from home or indigenous sources, including the Scottish Shale Oil industry, the Low Temperature Carbonisation Industry and others. They have all urged that, as a result chiefly of a rise in their costs unaccompanied by a corresponding increase in their prices, they have been put into a difficult position and, in some cases, had made a positive trading loss. My right hon. Friend has, therefore, been urged to help them by increasing the margin of protection which they already enjoy as compared with imported oils, by increasing the deduction made from the Customs Duty in calculating the Excise Duty which they pay. This margin of protection is at present 9d. per gallon.

  585
  The Government have given very careful consideration to these requests, especially by Members representing a certain number of Scottish constituencies. My right hon. Friend is fully alive to the importance of these industries, but before my right hon. Friend feels able to reach a decision he thinks that it would be only right to provide an opportunity for those who have an interest in the question, either for or against, to make whatever representations to him they wish. We shall be glad if those concerned will make such representations as they desire to make as early as possible, so that the delay in reaching a decision will not be of a very serious character. The cost would in any event be comparatively small.
  Clause 27 has, not unnaturally, aroused an unusual interest in the Isles of Scilly. Perhaps I ought to explain the background. These islands are already, and always have been, within the scope of the general charge to Income and Profits Tax. In fact, residents in the islands receiving income from the mainland from which tax is deducted at source—the obvious example is that of United Kingdom company dividends—have always paid tax on that income and are doing so at present. It is also the fact that where a resident in those islands draws income both from such sources and from island sources and he has made a claim for the various tax allowances, he has not been allowed repayment on the tax paid on the United Kingdom source to a greater extent than would be possible if the islands income, plus the mainland income, had been taken into account.
  Equally, certain public employees, like local postmen and policemen, have always had tax deducted from their pay, as it comes from United Kingdom sources. Therefore, the main point really at issue on this Clause is the tax exemption enjoyed by residents on the islands on income arising within the islands. That income has not been taxed in the past, not because of any statutory provision but simply by reason of a defect in the machinery of taxation which goes back to the land tax of 1798.
  No land tax commissioners were then appointed for the islands, and when Income Tax was re-introduced in 1803, and re-introduced again in 1842, dis-
  586
  tricts for the General Commissioners of Income Tax were settled on the basis of the land tax districts. Consequently, the islands were not included. There was no body of General Commissioners of Income Tax with jurisdiction in the islands and no machinery for the assessment and collection of tax on income arising in the islands to the islanders.
  On merits, perhaps, it is a little difficult to defend a situation which does not involve, as has been supposed by some people outside this House, a blanket exemption but an exemption on a certain kind of income enjoyed by residents in the islands. But we appreciate the concern which very naturally has been caused in these islands, no doubt particularly in view of the residents' very vivid impression of the ferocity of United Kingdom taxation.
  It may reassure many of the people with smaller incomes concerned to be reminded that thanks mainly to other changes introduced in my right hon. Friend's Budget a married man with two children who earns £500 a year will pay only £1 2s. 2d. tax. Fears of a sudden and unexpected imposition of tax will be reassured when it is appreciated that, under the provisions of the Bill, tax under Schedule E, covering P.A.Y.E. taxation, will only come into effect on or after 6th April, 1954, while the first tax under Schedules A and D will not become payable until 1st January, 1955. Owing to the delay in its incidence no Surtax will be payable until 1st January, 1956. This will in no degree affect the position of those islanders who already enjoy the benefits of liability to United Kingdom taxation.
  Clauses 5, 6 and 7 embody the changes we propose this year in the Entertainments Duty. The most important of these, to which my right hon. Friend made some reference in his Budget speech, is the decision to exempt altogether from duty amateur sports. The House will remember that during last year's debate on the Finance Bill my right hon. Friend indicated some sympathy with the position of amateur sports and indicated that were it possible for him to devise an appropriate means of exemption he would be sympathetic to such a possibility.
  Very careful thought has been given to the difficult question of how best to arrive

  587
  at a definition. This is now embodied in Clause 5 and begins by relating the exemption primarily to the status not of the individual players but of the body responsible for the game or entertainment, and then making an additional condition of non-paymeat of the players. The effect of that will be to exempt Rugby Union matches right up to and including international matches at Twickenham, athletic meetings under A.A. auspices, boxing under A.B.A. auspices, and so on. Many lawn tennis tournaments will, similarly, have exemption. It will also cover amateur football and so meet the point made in the letter from the Secretary to the Football Association which my hon. Friend the Member for St. Marylebone (Sir W. Wakefield) quoted in last year's debate.
  We are satisfied that this amateur definition will provide a workable test. It is certainly a great pleasure to my right hon. Friend to be able to exempt from Entertainments Duty the playing of games for their own sake by a very large number of our fellow-countrymen. I am sure that this would raise a cardiac echo in the censorious bosom of the right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton) were he here. But the amateur test will not work in the case of cricket because, there, amateurs and professionals are inextricably mixed up. Amateurs and professionals play together in the first-class county sides, including the really efficient and well worth watching ones, like Surrey County Cricket Club. Equally, there are wholly amateur sides such as that of Oxford University which play in first-class games; and I am advised that there is another university team, whose name for the moment escapes me, which has similar pretentions.
  The solution has been to exempt cricket altogether, a decision which I am sure will be appreciated by the eight hon. Members opposite, led by the hon. Member for Westhoughton (Mr. J. T. Price), who put a Motion on the Order Paper in February directing my right hon. Friend's attention to the precarious position of first-class cricket as a national institution. The cost is only about £80,000 a year, and in view of the fact that in no other way was it practicable to arrive at an amateur concession to cricket this seemed the common sense way.
  Captain J. A. L. Duncan: May I call the attention of my hon. Friend to the fact that cricket is also a Scottish game and, therefore, is not purely a national but an international game?
  Mr. Boyd-Carpenter: I would certainly hesitate to deny proficiency to my hon. and gallant Friend's fellow-countrymen in this game, though I doubt whether they are wholly up to the Surrey standards.
  In Clause 5 we apply the same principle of amateur exemption to the amateur dramatic societies. That is to say, like amateur athletics, they will receive the benefit of this concession even though they employ professionals to produce for them or to instruct them. The test will be whether a paid professional participates in the actual performance. This does not give all for which the societies have asked, but it is an advance towards their point of view which I hope will be of help to them.
  Clause 7 is more complicated. It is designed to make adjustments where lump sums are paid for season tickets. The substance of the matter is that if the tax is computed on the total cost of the season ticket, then, as the tax is progressive, the charge is very much heavier than if the season ticket were looked at as a number of separate tickets, the total price of which amounted to the total cost of the season ticket. Means were found to avoid this disadvantage by using rather complicated provisions. This Clause gives the benefit of that to all the clubs, whether or not they happen to use that particular technique, and I hope that it will be of advantage to them.
  The main provision of the Bill in respect of Purchase Tax is the provision for the reduction of the three main rates by 25 per cent. During the Budget debate some criticism was directed by right hon. Gentlemen opposite at the decision to reduce the 100 per cent. rate to 75 per cent. and the 66⅔ rate to 50 per cent. The right hon. Member for Leeds, South and the right hon. Member for Bishop Auckland had something to say on that subject.
  The term "luxury goods" was used by a number of hon. and right hon. Members as a term of abuse—certainly carrying with it the implication that such goods

  589
  did not deserve a tax reduction. What is or is not a luxury is an extraordinarily difficult problem, which sometimes raises philosophical concepts of some complexity. A motor car is essential to a country doctor, a village midwife or a commercial traveller. For other people it may well be a luxury but, in any event, no product of any industry is regarded as an unnecessary luxury by the people who work in it and who earn their daily bread by producing it.
  It is equally true that many of the goods in this category involve the use of ancient crafts and skills, of which silverware is perhaps the most conspicuous example. It is also a fact that many of these industries produce goods which are highly acceptable exports, but whose export markets from time to time need a certain support from the domestic market.
  All these considerations rightly affected my right hon. Friend's decision to reduce what are very high rates of tax, which were undoubtedly having some effect on the well-being of the industries concerned, diminishing their power to maintain competitive exports and drying up recruits to the ancient crafts and skills which they employ. Hon. Members on both sides of the House have made representations to my right hon. Friend and myself, urging a reduction of this tax, very much on the lines I have been giving to the House. I therefore submit that my right hon. Friend was fully justified, in the broadest national interest, in affecting these reductions.
  While I am on the subject of Purchase Tax I would invite the attention of hon. Members to the provisions contained in Clause 9 (2), which deals with an aspect of the mechanics of the tax. As hon. Members are well aware, the Finance Act, 1948, re-enacted the Treasury's statutory power to make adjustments in the field of Purchase Tax by Statutory Instrument, in the sense of bringing individual articles into, or removing them from, liability to tax or to a tax at any of the then known rates.
  This is a useful piece of minor machinery which, under successive Governments, has operated to enable anomalies to be cleared up between Budgets. Parliamentary control has been retained by the provision under which Orders involving an increase in the tax have
  590
  been subject to an affirmative Resolution while those reducing it have been subject to the negative Resolution procedure. I suppose that is a system of incentives to the Government to reduce rather than to increase the tax. It is desirable to supplement this machinery in one respect by adding further power to move an article downwards—and downwards only —not to an existing rate but to a new rate. This additional authority will give us an extra margin of flexibility in adapting the administration of the tax to such needs as may arise.
  I have inflicted upon the House a good deal of detail and it is only out of regard for the fact that some hon. Members may feel that I have already taxed their endurance that I shall not also refer to some very interesting provisions—some of the recommendations of the Radcliffe and Tucker Committees which we have been able to adopt—which I have no doubt will be explored during later stages of this debate and this Bill.
  I hope that the inevitable detail which is to be found in any Finance Bill—even though this is physically a somewhat slimmer production than its immediate predecessors—has not blurred what is the main theme of the Bill and the provisions which it embodies. The main theme, to which my right hon. Friend referred, is that of an incentive Budget—a theme of trying to do everything possible to give assistance to the millions of people in all ranks of our society upon whose combined efforts the security, solvency and stability of this country will depend in the years ahead. That is the overriding theme of these proposals. I submit that it is embodied in this Bill and it is in that spirit that I commend it to the House.
  4.25 p.m.
  Mr. Douglas Jay: The Financial Secretary described this as a physically slim Bill. That is true, compared with the Bills of recent years. But why is it that we have this comparatively slim Bill this year? In our view it is because the Government have left undone so many things which they ought to have done. Our complaint is even more strongly against what the Bill does not do than what it does, and we shall do our best to correct these deficiencies in what I am sure will be a very careful

  591
  and searching examination during the Committee and Report stages.
  Looked at as a whole, so far as it goes, this Bill is a lost opportunity. The Financial Secretary said that its purpose was to fit us for the industrial struggle that lies ahead. He made almost no attempt, however, to argue that the provisions of the Bill would achieve that end. This year, for the first time for many years, a Chancellor had the chance to give reliefs by way of increased social benefits or reduced taxation. Let us be clear why he was in a position to give those reliefs. He has tried to propagate the idea that it was because our industrial situation is better than it was a year ago. In fact it is just the reverse; it was because of the signs of depression and rising unemployment in our home industry. We now have this on the authority of the Economic Secretary to the Treasury, who is rather more candid in these matters than his two Treasury colleagues.
  Only last week, in the debate on industrial output, speaking on the need for more purchasing power at the present time he said:
  "… that is the whole theory that underlies my right hon. Friend's Budget. The time has come with a certain slack in the economy, deliberately to increase purchasing power."— [OFFICIAL REPORT, 29th April. 1953; Vol. 514, c. 2227.]
  It is that slack in the economy—or, put less politely, unemployment—which gave the Chancellor his opportunity to grant reliefs this year. In that reasoning we entirely agree with the Economic Secretary.
  The Chancellor had the opportunity to do two things. First, and probably most important of all, he could have given a real stimulus to productive investment throughout the economy, which I believe is now vitally necessary for our whole future. We must abandon the expedient—which was inevitable in 1947, 1949 and 1951—of damping down investment in order to correct balance of payments deficits. Second, he could have given a real incentive to productive effort throughout the whole community by manifestly observing the principles of social justice in distributing his various reliefs.
  The Financial Secretary said that this was an incentive Budget. But how
  592
  limited those incentives were. It seems to us that in both of its main aims this Bill fails to live up to its opportunities. I was struck by one remark of the Chancellor when he replied to the Budget debate. He said he disagreed in particular with the speech of my right hon. Friend the Member for Smethwick (Mr. Gordon Walker), who said that the best incentive to the whole community was a conviction that the rewards of industry were fairly distributed. The Chancellor told us that he especially disagreed with that speech. That indeed might explain why he has so notably failed, in Clauses 10 to 13 of this Bill, to spread the incentives universally and fairly.
  The Chancellor was very indignant when we first argued that this arrangement of the Income Tax reliefs was exceedingly unfair as between rich and poor. Since the Budget debate, however, he has given us figures, in answers to Questions put by my hon. Friends, which really prove our contention up to the hilt. First, he has told us that there are about 10 million earners who get no relief at all by way of Income Tax, and, with their families, that means probably rather more than 20 million people.
  It is no answer to say that 30 million people, which I think is a slight overestimate, do directly or indirectly get relief. The question is this: why should the relief and the incentive not be extended over the whole community? Why should the 20 million poorer people in the community be deprived of that relief and incentive? That is the question which the Chancellor has not yet answered. Secondly, the Chancellor has given figures which show us how remarkably inequitable the relief is per head. The actual total reduction going to all Surtax payers, at £22 million, is exactly the same as the total going to all those with incomes of under £500 a year. Yet there are 270,000 Surtax payers, and there are 9 million taxpayers with incomes under £500 a year.
  Those on the highest rate of income at over £20,000 a year—and the Chancellor will agree that some of them exist—get an average of £850 a year while those with under £500 get 2s. 9d. a year each. The only defence we have had so far of that very distorted result—and the Financial Secretary really attempted none this afternoon—is the argument that by

  593
  this crude form of relief the Government were, as it were, simply returning to people part of their incomes which was their own by right. That is the argument we have had.
  But that is to assume that the income structure thrown up by the commercial struggle, and incidentally by the accidents of inheritance, is somehow a just, ideal and desirable one. That is precisely what we contest and deny. I should like the Chancellor to answer this question tonight: Do the Tory Party accept, or do they not, the principle of progressive taxation and social services, as a deliberate instrument for redressing the structure of incomes thrown up by blind economic forces? I think he ought to answer that.
  We have still had no explanation from any of the Treasury spokesmen why the tax reliefs are so framed as to favour the small family as against the large one. There must surely be some reason for this. I begin to suspect that the Chancellor did this by mistake; and if so, I appeal to him in all seriousness to accept the Amendment which we shall move later on to enlarge the children's allowance. It seems to me—and this is one reason why we ourselves raised the children's allowance in the 1951 Budget— that one of the worst blemishes on our Income Tax structure is the discrimination against the large family.
  I think most people genuinely do not realise how great this unfairness is, until they work out the net income per head of a family after payment of tax. It is, after all, the net income per head which determines the actual standard of living. Let me take one case of the £700 per year man, with income all earned. For the inequality in the middle-class incomes is as great as, if not greater than, it is amongst the lower incomes. The £700 a year man, if he is single, has a net income of £576 a year. If he is married with three children, the net income per head of the family is £137. That is to say, on that basis a single man has an income nearly four and a half times as great as the family man. That is before this Budget. By this Bill that single man gets another £11 and the man with the family gets only £2.
  The Chancellor of the Exchequer (Mr. R. A, Butler): For the sake of clarity and not for the sake of argument, I assume that the figures given by the right hon. Gentleman are per head of the family?
  Mr. Jay: Per head of the family.
  Mr. Butler: But not for a married man as against a single man?
  Mr. Jay: Per head in each case. This is precisely the point that I am making. It is a good thing for the Chancellor to look at the figures per head of the family, because that is what determines the actual standard of living of those in the family. Unless the Chancellor is one of those who want to ease our economic problems by reducing the population, I can hardly believe that he really meant to produce the effect he has done.
  Even more inexplicable in this Budget, which the Financial Secretary has today defended as an incentive Budget, is the decision to give a bigger relief to unearned than to earned income. I should have thought that one of the things upon which we could have agreed on both sides of the House is the need these days to encourage the active worker throughout the whole community, rather than those living on inherited incomes. Indeed, to do credit to hon. Members opposite, I believe that if the Chancellor had done that a great many of them would have applauded his action.
  Is it not supposed to be the creed of modern Tories that active effort and enterprise should be rewarded? I seem to remember that the present Minister of Works, before his lips were sealed on these matters, held up as his hero the "active creator of wealth." But in terms of the actual arithmetic of this Budget, the Chancellor's hero turns out to be the passive inheritor of property. That, I think, is a very surprising result.
  The only answer we have had—we have had none from the Financial Secretary today on this point—to this criticism is that all this is the inevitable mathematical effect of taking 6d. off the Income Tax. That seems to me to be one of the weakest arguments I have ever heard. It is about as good a defence as if a man charged with dangerous driving were to say "Well, if you put your foot on the accelerator you naturally expect

  595
  the car to go forward." The Chancellor described taxation as a blunt instrument, and it is indeed a blunt instrument if it is used in this clumsy fashion. The standard rate of Income Tax is, of course, the bluntest instrument of all.
  As the Financial Secretary told us again today that the main theme of this Bill was incentive to work, I should like to ask the Government three questions. If that is so, first of all, why the discrimination in favour of unearned income? Why did not the Chancellor at lease raise the earned income allowance at the same time as he was reducing the standard rate? He said last year that he would have liked to increase it further from two-ninths to one-quarter, and that is what we think he might well have done this time.
  Second, if incentives should be given to all, why is there nothing for the 10 million earners below the Income Tax level? That, of course, could have been done by methods other than that of the Income Tax. For instance, Purchase Tax could have been removed from some of the real household necessities on which it is still paid, such as cutlery, soap and things of that kind, and, of course, the tax on clothes, boots and shoes and all textiles could have been reduced.
  The Financial Secretary, the day after Budget day, was rash enough to maintain that the Purchase Tax cuts the Government were making were
  "a contribution to a steady reduction in prices, which must be a peculiar and special benefit to those whose incomes are lowest."—[OFFICIAL REPORT, 15th April, 1953; Vol. 514, c. 256.]
  That particular argument was exploded by the most praiseworthy candour of the Economic Secretary, who said—indeed had to say—in answer to a Question:
  "The effect of the reductions in Purchase Tax on the retail prices index is likely to be equivalent to only a fraction of one index point."—[OFFICIAL REPORT, 23rd April, 1953; Vol. 514, c. 1380.]
  in the cost of living index.
  Since some of the reductions have not been passed on by the producers, largely because the Government have chosen at this moment more or less finally to abandon price control, the effect may be even less than the hon. Gentleman supposed. The result is that any relief by way of Purchase Tax will be more
  596
  than swamped by the rises in prices of food that are still going on; and the incentive to the poorer class of the population will, again as a result of the Budget, turn out to be actually negative.
  Third, if the Chancellor really believes in his argument that these reliefs will somehow miraculously stimulate production, why does he ignore all the lessons of practical experience? After all, this was given as the main argument for last year's Budget, and in last year's Budget the right hon. Gentleman at least increased the earned income allowance. I remember that during the Committee stage of the Finance Bill of last year, I asked the Chancellor whether he saw any signs of production rising as a result, and he replied that the changes had not at that moment come into effect. They came into effect at the beginning of June, and, strangely enough, it was at that moment that production fell more heavily than at any time since the war.
  The Chancellor's first great incentive Budget in fact ushered in a year of what the Economic Secretary calls a "slack in the economy" and what the Chancellor calls "flexibility." How readily indeed do these fluffy euphemisms of the Chancellor conceal the nakedness of his argument. I sometimes imagine him, as the subject of a political cartoonist marching about the corridors of the Treasury, in a state of flexibility, tightening his belt, casting off burdens, getting out of slack water, and—of course— "making room for exports." I am not saying that the fall in production was the effect of the tax reliefs. Of course it was not. This was just another lesson showing the very slender connection between the level of taxation and the volume of production.
  The truth is that deflation—a less polite word for what the right hon. Gentleman calls "flexibility"—is a much worse damper on incentive than taxation. The real incentive to the manager in industry is to know that he can sell his goods; and to the worker to feel secure in his job and confident that the rewards of industry are fairly distributed over the whole community. By the extraordinary arrangement of reliefs in this Budget the Chancellor, so far from strengthening that confidence, has gone a long way to undermine it; and it is not really very surprising that people below the Income Tax level, whether in

  597
  the engineering industry or elsewhere, should say to themselves, "If others better off than I are getting some incentive by way of tax relief, why should not I have some by way of wage increases?"
  For that reason, I believe that one of our main purposes in reconstructing the Income Tax should be to take the main bulk of wage earners out of it altogether. Why should we not set those people free from Income Tax? That would spread the incentive effect, such as it is, much more widely in relation to the loss of revenue. It is really grotesque that we should go on raising no more than about £30 million from four million or five million people in tiny amounts through a vast bureaucratic procedure for very little result. That is where I believe the Chancellor should have made a start; and it is in that direction that we shall seek to amend this Bill later on, amongst other ways, I can assure the Chancellor.
  We think that another opportunity has been missed in the matter of the initial allowance, on which the Financial Secretary rightly spent quite a lot of lime today. The great merit of the initial allowance is that the revenue conceded by the Treasury goes only to the firm if and when it actually engages in real physical investment. Therefore, in our view, the Chancellor should have restored a more substantial initial allowance right away and given less relief on profits through the standard rate of Income Tax.
  The Financial Secretary said today that the reason for not going beyond the 20 per cent. was that it would have been very costly. Of course, that cost could have been offset if the straight and unconditional reduction of tax on profits had been postponed. As it is, the far greater part of the tax relief on profits will come irrespective of whether investment takes place or not, and a great deal of it, beyond question, will be used to increase dividends in the coming months.
  Nor, according to my information, will the 20 per cent. initial allowance be regarded in present circumstances as a very great stimulus to investment by industry generally. I think some hon. Members opposite will agree with me in this. Indeed, many people have asked, when trying to estimate the effect of this, "Why does the Chancellor simultaneously try to stimulate investment by restoring the initial allowance, and to damp it down by
  598
  maintaining the present high Bank rate?'' Now that he is restoring the initial allowances, the time has surely come when the Chancellor might have been a little more flexible himself, and considered lowering the Bank rate in the present circumstances.
  We are using the initial allowance as an instrument of policy in this Budget. The Chancellor has conceded the principle of a selective allowance by placing a higher figure on mines and oil wells. Is it not time that he extended that principle further? Is there not a case, for instance, for fuel-saving equipment? I believe that the hon. Member for Kidderminster (Mr. Nabarro) is interested in that. I ask the Chancellor, too, whether he has considered the possibility of excluding business motor cars from relief by way of initial allowances. It seems to me that under the previous initial allowance there was some danger of that relief being abused, and I think that the point is, at any rate, worthy of consideration.
  In talking about Purchase Tax, the Financial Secretary fell back on the argument, if one can call it an argument, maintaining that it was very difficult to define a luxury. That is no doubt true. But I do not think that, because that may be difficult, we have to base our policy on the assumption that there is no distinction between luxuries and necessities at all. It is a strange feature of this Budget that while the Chancellor is so grudging in encouraging investment, he is at the same time stimulating consumption, provided it is consumption of the more expensive goods. It would be harder to imagine a blunter instrument than a flat rate cut in all rates of Purchase Tax.
  Jewellery, furs, television sets, motor cars, all get a reduction; and only boots and shoes, clothes and furniture are excluded. It is no answer to the argument for social justice to say that the rates on textiles were reduced last year. At the same time last year, by the D scheme, the Chancellor imposed a tax on a whole range of textiles which had been completely free under the Labour Government. That tax now remains on those necessities; and, at the same time, the tax on television sets, fur coats and so on comes down. Indeed, quite apart from the social argument, the Chancellor, by this particular clumsy and rustic stroke, as I feel inclined to call it, has really

  599
  abandoned the use of Purchase Tax as an economic instrument also.
  What he is really doing is to accept the advice of those who, for very natural reasons of administrative convenience, want to get all the rates down to a much lower level and have fewer complications to administer. This is very understandable. The Chancellor, however, ought really to perform his Ministerial function of looking at this matter from the human and the economic, as well as from the administrative point of view.
  To take one example, which may appeal to the hon. Member for Kidderminster (Mr. Nabarro): why reduce the tax on electric fires at this time—
  Mr. Gerald Nabarro: Hear, hear.
  Mr. Jay: I think that I command the hon. Member's support—when everybody knows that if industrial output does rise, as the Chancellor hopes, to the level at which it stood at the General Election 18 months ago, there will be serious fuel difficulties next winter?
  Mr. Nabarro: I am grateful to the right hon. Gentleman for giving way. Of course he has selected the one case, and it is a single isolated case, of a completely non-luxury article that for economic and capital investment reasons was put in the 100 per cent. bracket. Either the right hon. Member for Leeds, South (Mr. Gaitskell) or the right hon. Member for Bishop Auckland (Mr. Dalton), I have forgotten which, did it for precisely that reason. That is entirely irrelevant to the present argument.
  Mr. Jay: My right hon. Friend the Member for Bishop Auckland did it for very good reasons, and that is precisely, in my view, why the Chancellor is making a mistake in undoing it today.
  The Financial Secretary defended some of these Purchase Tax changes on the perfectly reasonable ground that we have to look at the point of view of the producer as well as of the consumer. If that is so, why help everything on the 100 per cent. rate, and do nothing at all for the even more important textile industries? The producer's position in the textile industries surely deserves attention also. I suppose that the Chan-
  600
  cellor has read the very formidable memorandum sent to him by Sir Raymond Street before the Budget on behalf of 17 textile associations. That memorandum shows that the D scheme has now brought about just the effects of which we warned the Chancellor a year ago. We then argued that if the D level were placed too low—and we thought that the Government were placing it too low—there would be injurious effects both on exports and on quality in these industries.
  Sir Raymond Street, in his memorandum, now says this, and I quote his words:
  "The D scheme and the small reduction in the rate itself have done little to lessen the ill-effects of the tax, and the D scheme has indeed created new troubles of a serious character."
  He goes on to say:
  "Injury to the export trade is arising from distortion of the pattern of production at home by the D scheme. Not a single firm interviewed is unaffected. The retailer's dislike of taxed goods is very general. In consequence clothes selling above the D line are being debased or discontinued."
  He also says, and this too deserves our attention:
  "Manufacturers and traders alike are minimising their possible losses by keeping below the D level."
  All these changes, we were told last year, were reasonable risks because the Government claimed that what was called the "blind spot," as hon. Members will remember, was going to be eliminated. Now Sir Raymond Street says:
  "An ever larger 'blind spot' than existed before has therefore been created."
  That seems to me to be very powerful evidence from the accredited spokesman of a great national industry, and we think it regrettable that the Chancellor has simply passed the whole thing by in this Bill. We shall, therefore, do what we can within the extremely narrow limits of the Government's Resolution affecting Purchase Tax—which incidentally seems to us narrower than the last one we introduced—to assist the textile industry by further Purchase Tax relief.
  In spite of what the Financial Secretary said about cricket, I am afraid that, although we all welcome that relief, we are not altogether satisfied with the Chancellor's selective benevolence towards sport. No doubt the Parliamentary

  601
  Private Secretary pleaded the case of cricket very well in the months before the Budget. Last week-end the cricket season opened. But where was the Parliamentary Private Secretary on Saturday? He was at Wembley, so he informed me.
  Mr. Hubert Ashton: But I was at Lords last night.
  Mr. Jay: I wonder whether the Parliamentary Private Secretary asked himself, as many others must have in this very enjoyable week-end of sport, why cricket alone should get this much-needed relief. That is a question we shall ask again. I am able to announce at once that my hon. Friend the Member for Liverpool, Exchange (Mrs. Braddock) will move an Amendment to reduce the tax on boxing. Indeed, she is already in training for this important event, and it is only fair for me to warn the Chancellor that if he attempts any resistance, he will do so at his own risk.
  Mr. Boyd-Carpenter: What about the right hon. Lady the Member for Fulham, West (Dr. Summerskill)?
  Mr. Jay: I am not able to say whether she will act as a second or not.
  The Bill contains only one item of expenditure, the interest on the National Debt, which appears in Clause 32. We think that it is too high. I must here and now correct the Chancellor's rather misleading effort in his Budget speech, to suggest that the increased expenditure on the Debt, due to his high interest policy, was no more than the £42 million by which the outturn in the year 1952–53 exceeded his own estimate for that year. That figure does not measure the effect at all of an increase in expenditure due to a change in policy made in November, 1951. The real comparison is between the estimate made—and I take the estimate because it includes the figure for the American debt interest—of £515 million on the low interest rate policy for 1951–52, and the new estimate now made for the year 1953–54 of £580 million. The true figure, therefore, is £65 million, and not the £42 million given by the Chancellor.
  Finally, we are, of course, very glad to welcome something in this rather puny and ill-proportioned Bill. At least the Excess Profits Levy disappears, and reduction in food subsidies this year is far less than the right hon. Gentleman's sup-
  602
  porters wanted. Indeed, as it seems to us, the best things in the Chancellor's financial policy this spring are either the things that he does not do, or the cases where he has undone what he did last year.
  But the things he does do in the Budget and this Bill, in our view, fail most woefully to measure up to our national needs and opportunities. They give inadequate stimulus to real investment. They reverse, instead of advancing, the march of social justice. They affront, instead of encouraging, millions of active productive workers. They give no help at all to the great textile industry. And they do almost nothing to prepare us for any worsening of the economic weather, against which— whether it comes or not—any prudent man or Government ought surely to be forearming themselves at the present time.
  5.1 p.m.
  Mr. F. J. Erroll: I enjoyed the flyweight effort of the right hon. Member for Battersea, North (Mr. Jay). I felt he must have had to delve very deeply into his postbag to find enough circular letters from people and groups complaining that their pet reliefs and concessions had not been granted in order to compose his speech. He has even sought in aid Sir Raymond Street's very intemperate letter about the Purchase Tax levied on textiles. The textile industry received very substantial benefits in last year's Budget, and received an automatic benefit subsequently through the general fall in the level of textile prices, while the D-level has remained fixed at a relatively high rate, thus enabling an even greater range of textiles to escape taxation altogether.
  I was interested to hear the right hon. Gentleman on the subject of Income Tax. He spoke of it as a necessary element of Socialist policy to redress the structure of incomes thrown up by blind economic forces. That may be a legitimate aim of political policy, but I wish he had explained more thoroughly just what he meant. Are all incomes to be subject to this remedial process, and if not, at what level does an income become such that it must be redressed by those who believe that it has merely been thrown up by blind economic forces? Are all incomes to be so treated?
  Mr. Jay: I said "taxation and social services."
  Mr. Erroll: Even if both are included, are all incomes to be subject to this review by politicians who happen to be in power, and if not, at what level is the review to take place? If all incomes are liable to this review, what guarantee has anybody who is working that his income will be retainable and not taken away from him, not by blind economic forces but by elements of party jealousy who happen to be in power at the moment?
  The right hon. Gentleman was extremely ingenious in showing how a straightforward reduction in the standard rate of Income Tax was unfair in that it benefited some more than others. He went so far towards convincing me that I began to believe that he and his colleagues are against any reduction in the standard rate of Income Tax and that, if they had their way, we should have a standard rate of 9s. 6d. in the pound for evermore. Every time there is a reduction there must be anomalies of the sort he suggested. As he is so much against any of these anomalies, he is presumably also against a reduction in the standard rate, probably feeling that it is much easier to keep it at the same rate and thus avoid the difficulties which he has enumerated.
  I need hardly say how my hon. Friends and I welcome the appearance of the Bill. It is a slim Bill but one which will do a very great deal. Its three main features are the reduction in Purchase Tax, the reduction in the standard rate of Income Tax and the termination of the Excess Profits Levy, and to us these are substantial benefits and considerable measures of change. It is also satisfactory to have such a slim Bill, and we hope that its passage through the House will be quicker than was last year's Bill, which was an extremely bulky and ponderous one.
  I had hoped that in Part I, which deals with Customs and Excise, we might have had some reference to the duty levied on light hydrocarbon oils. I believe that the general rate of duty is far too high. This is a far more serious tax than Purchase Tax, though it does not, of course, attract anything like the same amount of publicity. The Hutton Committee Report, referring to percentages of tax as a percentage of retail prices, shows that on
  604
  the average Purchase Tax is only 43 per cent. of the retailer's cost price but the duty on light hydrocarbon oils represents no less than 173 per cent. of the retailer's cost price. This is a very serious imposition. If the duty must still be levied on hydrocarbon oils used for transport—and I believe it to be harmfully high—there is certainly no case for continuing to levy the duty at such a high rate on oils which are used for industrial purposes.
  Successive Governments have resisted all representations made to them. However, if nothing can be done during the Committee stage of the Finance Bill towards reducing the rate of duty for industrial users, I hope that at least a committee may be appointed to investigate the traditional reason for doing nothing-administrative difficulty. The interests affected have always sought to demonstrate that it is a straightforward matter to grant relief so far as administration is concerned, and if the Treasury are unwilling to accept their representations. I suggest the whole matter should be submitted to a committee whose findings could perhaps be accepted as final.
  I would mention in passing that there has been no difficulty about giving a measure of relief to farmers in this matter, trusting them to make the necessary returns to enable the reliefs to be granted. If they operate diesel-powered tractors they get the relief on the fuel, but if the same diesel fuel is poured into a diesel lorry owned by the same farmer, tax must be borne at the ordinary rate. Complications of administration have been overcome in the case of farmers; surely they could be equally overcome in the case of industrial users.
  Turning to Part II, I am sure that all my hon. Friends are agreed that the general reductions in Purchase Tax are excellent. Comprehensive in scope and generous in nature, they constitute a very real measure of benefit to the public, whether rich or poor. This is in addition to the benefits which were given last year, particularly to the textile industry. I am glad to see that the wholesale reduction in rates means that Purchase Tax, as long as it must remain with us, will be used more and more as a fiscal instrument rather than as a planning instrument. It is surely common ground that, as a planning instrument, Purchase Tax failed in its purpose. It certainly failed in the

  605
  matter of electric fires. It never stopped the sale of any electric fires. It merely made them a little more expensive and added to the general inflationary tendency at the time.
  Mr. Jay: Would the hon. Gentleman really maintain that electric fire sales would have been no higher if the tax had been 25 per cent. instead of 100 per cent.?
  Mr. Erroll: I doubt if they would have been any higher. It was the limitation of raw materials which restricted the output and sale of electric fires, and there was also the difficulty of getting the current to run them.
  Sir Richard Acland: If there had not been any planning of the distribution of the raw materials, I suppose the manufacturers would have got more of the materials by bidding higher prices for them?
  Mr. Erroll: That is another issue. I was referring to Purchase Tax as such being ineffective as a planning instrument. Furthermore, it was the rapid variations by the planners in the rate of Purchase Tax, as brought out in the Hutton Report, which constituted one of the chief criticisms by traders against Purchase Tax, and which caused them the greatest amount of loss. So all the good that was possibly done by it as a planning instrument is far outweighed by the disadvantages.
  Good though these reductions in the Purchase Tax are for the general public, it must be remembered that the retailers in this country have suffered very severe losses, which they originally estimated at about £25 million. I think that now they have had more time to work out the details the loss is more of the order of from £13 million to £15 million. It may be said that the retailers could take that in their stride, but we cannot feel that it is a good thing that any one section of the community should have to bear this very substantial loss in order that the rest of the community should benefit.
  Nevertheless, I feel, having read the Hutton Report carefully, that it is extraordinarily difficult to suggest any practical way of preventing these losses from occurring. I hope that manufacturers will, where they can, take full advantage
  606
  of arrangements which I believe the Customs and Excise are going to encourage for increasing the type of transactions known as sale and return and split delivery, thereby helping to minimise the losses of retailers.
  Retailers should remember that, as a result of Purchase Tax reductions, there will be some increase in trade, and they will at least sell more of their articles now bearing the lower rate of Purchase Tax. There are, of course, quite a wide range of articles which attract Purchase Tax and which nevertheless are govererned by resale price maintenance agreements. It is significant to notice that those articles have not had their prices reduced overnight, as has been the case with the larger and more expensive articles such as radio sets and refrigerators.
  It is at once the strength of resale price maintenance or one of its evils, according to the way in which we look at it, that the public should not get the benefit of the tax reductions straight away. Equally, on the other hand, the retailer is saved the loss and I hope retailers, in making their representations to us, will not exaggerate their case by over-emphasising their losses and hardships, but that they will at least give credit for the consequential advantages which they may expect to have as a result of the increased turnover on goods bought.
  Turning now to Part III, I should like to make some passing reference to the taxation of profits. There are some omissions from this Finance Bill which I think are unfortunate. The Millard Tucker Committee made many recommendations when it reported, and we understood that last year its recommendations could not be included in the Finance Bill because it was already a long Bill. We, therefore, hoped that these recommendations could be included in this year's Bill. Yet there are hardly any references to those recommendations.
  Furthermore, in regard to Profits Tax, the heavy distribution tax still applies to distributions of preference shares; this distorts the capital structure of companies and makes this form of issue virtually impossible. I should like to refer too to the definition of taxes which are going to be allowed for double taxation reliefs. As I understand the Clauses as they stand at the moment, only overseas income tax

  607
  will be allowed, but in certain countries, of course, there are taxes levied in lieu of Income Tax and Profits Tax but which are of substantially the same character. I hope that those taxes will be allowed to qualify for double taxation relief.
  We all welcome the restoration of the initial allowances on the basis shown in his year's Finance Bill. These are certainly a benefit so far as they go, but I think we should be quite clear in this House that the initial allowances are nothing more than a tax-free short-term loan. Industry is not gaining anything in the long run. It is merely getting some of its tax relief a little earlier, and that can be a very dangerous thing for certain companies if, in fact, they are trading on substantial overdrafts, because by such means they may be tempted to convert part of their overdraft into bricks and mortar or plant and machinery, and they may find themselves very short indeed of liquid assets in later years. Let us be thankful for what we are receiving but not imagine that it is really more than it actually is.
  The right hon. Member for Battersea, North referred to the change of principle this year in according a special allowance in respect of mining. He went on to suggest that perhaps that type of special benefit might be extended to other industries and to other interests. That is a risk which a Chancellor must always run if he introduces a new principle for a particular industry, for he must recognise that there will naturally be other claimants.
  I am going to suggest that to begin with my right hon. Friend should resist these other claimants because I think mining is in a very special category of its own. I do not think it is perhaps generally realised how much British mining interests have suffered since the war through taxation. One example may suffice. About £180 million of fresh capital has been raised in Britain between 1946 and 1951 for mining, but of that less than £10 million has been for mines controlled and registered in the United Kingdom. All the rest has gone to undertakings not controlled from this country or registered in it.
  There has been plenty of capital raised for overseas mining, but it has not been
  608
  raised for mines controlled by Britain. That is the plight of our industry today; and this concession is certainly long overdue. A concession of this sort having been received, it would perhaps appear greedy to ask for more or for any extension, but I should like to suggest that if the concession could be extended to cover not just the civil works, that is the shaft and the mine, but all the equipment and plant which dies with the mine, it would be a substantial benefit. Many mines are far from centres of civilisation, and when a mine is exhausted the plant and machinery, whether on the surface or underground, cannot be sold second-hand or transferred to any other site. It may not be suitable, quite apart from its being worn out. That equipment should qualify for relief in the same way as the shaft and other civil works.
  There were one or two other matters mentioned in last year's Finance Bill which I had hoped might have been rectified in this year's. One of those was the question of the transfer of control of subsidiaries, about which we on this side of the House complained bitterly during the 1951 Finance Bill debates, and which still remains in existence. I am told that that control does not operate harshly because nearly all applications are granted. In that case we should abandon this control because, while our applications may be granted, we do not know how many foreign companies are deterred from coming to this country by reason of the existence of this control.
  While I am on the same theme, I would say that there is a further control which I think is even more serious, although it has not received so much publicity. It is the requirement of the Inland Revenue that all transactions between the parent company in this country and its overseas subsidiary must be conducted at arm's length prices. That is going to cause a great deal of trouble and difficulty to the companies concerned, as well as causing unnecessary payments to be made overseas when plant and machinery have to bear ad valorem import duties on entering the country to which they are transferred.
  For many years now, especially last year, we referred to the way in which Estate Duty is levied on family businesses. An incontrovertible case has been made out for some measure of relief here.

  609
  It is no good saying that one can make arrangements during the lifetime of the owner and that these matters are dealt with satisfactorily today, because those arrangements, in many cases, necessitate the breaking up of the existing structure of the company and the cessation of its essentially family nature. Surely we cannot wish to see that continue? I should have liked to see some step taken towards ameliorating that position.
  In conclusion I want to refer to a matter which affects many millions of people and to which no reference had been made in the Bill. I refer to postwar credits. There are two aspects of the repayment of post-war credits which concern us all because we hear about them so frequently from our constituents. The first is that repayment cannot be made at present on grounds of hardship; the second is the uncertainty of the date of repayment should the holder of the credit die before the date on which repayment would normally be made.
  In regard to hardship cases, machinery ought to be devised to make repayment possible. Constituents have come to see me saying that they are in need and must go to the National Assistance Board. They are reluctant to do that, not only because of pride but because they have their post-war credit, and they would like to cash that instead of having to go to the local office of the National Assistance Board. Surely it is possible to devise a method whereby persons who would qualify for cash payments from the National Assistance Board could get instead—or in addition, or half and half— their post-war credit repaid? It seems silly to pay money through the National Assistance Board out of the taxpayers' pocket and to deny the person concerned his post-war credit. If this could be done a sense of injustice would be removed, and the Exchequer would not suffer.
  The other aspect of the matter is the uncertainty of repayment. Can we not devise a system whereby all the certificates could be handed in in turn for a definite date of repayment to be stamped on them, namely, the date at which the holder reaches the age of 60 or 65 and then, if he dies in the meantime, repayment could be made on the same date as it would have been made had he survived. That would not cost a great deal and it would remove the element of uncertainty which is causing so much trouble.
  610
  I have concluded on that note because I believe that this Finance Bill is essentially a human Bill, and is welcomed as such throughout the country.
  5.24 p.m.
  Mr. Roy Mason: I rise with some trepidation, having been a Member of this House for a very short time, to make my first speech. I ask for the indulgence of the House on this occasion and shall do my utmost to observe the custom and practice that has developed in this House, firstly of being brief and, secondly, of being non-controversial. The first may prove easy, but the second may prove more difficult.
  On the passing of the Bill—as I see it as a Member representing an industrial constituency with the feelings of his constituents at heart, and not as an economist —we shall witness once more the redistribution of wealth from those who are least able to afford it to those who least require it. I can foresee that after this Budget, as I saw after the last one, we shall witness once more the cleavage between the poor and the rich made more distinct. We shall see the wealthy made more wealthy and we shall see members of the lower income groups made relatively worse off.
  During our term of office we distributed the wealth of the nation substantially and effectively in a more equitable manner, but with each succeeding Tory Budget we shall see the restoration back to the previous level of the wage incomes prior to 1939 when we had successive Tory Governments. For instance, fairly recently we have seen two different types of bread produced. Because the Government realise that there are two distinct classes, we are producing one type of bread for the worse off and another for those who can afford a higher quality. We witnessed that in the case of margarine and butter prior to 1939, when the relatively worse off could not afford to buy the best butter available for those with large purses.
  The Chancellor said this was an incentive Budget, an incentive to produce more this coming year. I ask the Chancellor this question: Is it an incentive to my constituents since my constituency is predominantly coalmining? Is it an incentive to the surface workers, to the underground on-cost workers who are below the Income Tax level and cannot

  611
  benefit by the Income Tax reductions? Is it not also noticeable to these lower paid workers that the percentage reduction of Purchase Tax is less on the commodities that come within the orbit of the working-class purse? Quite respectfully, I say that the Budget has been no incentive whatever to those people to work harder and to produce more.
  Have we not seen also that with the introduction of this Budget the trade union leaders have been placed in an invidious position? They recognise the need for increased production, but they also realise the needs of their members for increased wages if they are not to be relatively worse off under this Budget. Already this week we have read that one and a quarter million shop assistants are pressing for wage increases. This morning we have read that the Amalgamated Engineering Union has put forward a claim for a wage increase. We have also read this morning that the Shipbuilding and Engineering Union is considering pressing a claim which, in total, will mean that four and a quarter million people in the near future will be pressing for wage increases.
  Are we, then, going to witness the industrial upsurge which followed last year's Budget? I am sure that we ought to have seen more incentives to the workers in the lower income groups, but we ought also to have seen—I say this very feelingly—some incentive to the old age pensioners, especially having in mind that they should be able to look forward happily to their remaining years on this earth. Yet with each Conservative Government the old age pensioners are suffering.
  We ought also to have seen strong action being taken to remove unemployment. That would have gone a long way towards creating the necessary atmosphere for increased production because that atmosphere must be created before we can get an increase in industrial production. When we were in office we removed the fear of unemployment. Of course it took a long time because of the bitter memories of Tory Governments prior to 1939. Yet we got rid of that persistent and uneasy feeling, and the result was a marked increase in output plus better industrial relations.
  If this Bill is approved, we shall once more see the least desirable instincts of
  612
  mankind exploited and satisfied to please the sectional interests of this nation. Those instincts are greed and fear. We are seeing that the capitalist is being provided with the opportunity of satisfying his greed for profit. That is the satisfaction of the instinct of greed. On the other hand, we see the fear of unemployment instilled into workers and the fear of unemployment is used as a weapon to prize more production from individual workers. Those two working in harmony —the exploitation of the greed of the capitalist for profit plus the exploitation of the fear of unemployment instilled into the worker—is the method used in this Budget to try to get increased output per worker.
  This, I suggest, can only result in men working beyond human capacity, a higher accident and fatality rate and a lower expectancy of life. This may seem a rather hypothetical and gloomy picture, but it could be the picture of grim reality if the unemployment trend continues. So far my constituents have not been greatly affected but, speaking in advance, I am also issuing the warning. I should say that the Chancellor has been rather biased in his release of amateur sport from Entertainments Duty. Surely he could have thought of my constituency's football team, who are rather badly in need of help in this respect.
  If we have Budgets of this nature throughout the years of Conservative Government, we shall not only see the clock being put back but shall see it deprived of the hands of time.
  5.32 p.m.
  Lieut.-Colonel Sir Thomas Moore: I am naturally happy, Mr. Deputy-Speaker, that you have been good enough to call me, if only to give me the felicity of conveying the congratulations of the House—all sections—to the hon. Member for Barnsley (Mr. Mason). He obviously feels very deeply about the matters of which he spoke, and I think he showed a complete knowledge of the subjects he discussed. I am glad that he reminded us that a maiden speech has to be non-controversial. I only hope we shall all be spared to hear his next speech, which will be controversial. In justice to hon. Members on this side of the House, I should like to warn him that, while we listened to him with sympathy

  613
  for his ordeal and admiration for his lucidity and fluidity, he will not get quite such an easy run next time he speaks, much as we shall look forward to hearing him.
  The criticism of the Budget, and of this Finance Bill into which it has been translated, have varied but have followed the same general pattern, which has little to do with the Budget itself but is mostly a harking back to the 1952 forecasts and a general rehash of the Economic Survey. The right hon. Member for Battersea, North (Mr. Jay), dealt with nothing but what was outside the Bill; he rarely touched on the Bill at all. I am glad that the right hon. Member for Bishop Auckland (Mr. Dalton) is here, as I think he should make his mind up about things. He cannot always go on trying to have it both ways. In a speech on the Budget he complained first about the reduction of Purchase Tax on behalf of traders and, almost in the same breath—before we had had time even to absorb his charge—he advocated the complete abolition of Purchase Tax. He cannot have it both ways—
  Mr. Hugh Dalton: If I may be allowed to intervene, what I proposed was the complete abolition of Purchase Tax on a relatively short list of near necessaries, leaving luxuries entirely as they were before the Budget, on the higher rate of Purchase Tax.
  Sir T. Moore: It is such an easy phrase, "the near necessaries." We had a reference to it just now. What do we mean by a motor car used for business purposes? When a Member of Parliament uses a motor car, is it for business or pleasure? We can never define the difference between luxury and necessity. The right hon. Member also said that Purchase Tax would not help export. There, of course, speaks the theorist from the London School of Economics, not knowing, I suppose, that a successful export trade must rest on a healthy home market.
  When the Chancellor sat down after his exhilarating and stimulating speech in presenting the Budget, I heard some howls from the Opposition about "A rich man's Budget." I presumed at that moment that they came from thoughtless Members of Parliament who could not think of any other criticism. But I have
  614
  since come to the conclusion that they were really due to sheer, inarticulate, anger that the Budget for which they had hoped during six years of frustration had been given to them by Tories.
  Although much analysis of the broad principles and effect of the Budget and the Finance Bill has been made in the House and in the Press, I should like to examine some of the more significant features of this rich man's budget and see just how far the title is justified. I take these features in a sequence chosen by myself and, therefore, first refer to Clauses 5 and 6. Those are the Clauses dealing with the abolition of Entertainments Duty on amateur sports, and on cricket matches. I wonder how many who throng the Oval or linger in the evening sun on a village green, or who watch young runners in a cross country championship with little but stout hearts and a stout pair of shoes as their equipment would be readily recognised as rich men? Possibly some right hon. Members opposite might give us a clue on that.
  Then we come to Clauses 8 and 9 which cover the general reduction of Purchase Tax by 25 per cent. According to some hon. Members opposite, all those gallant women, wives of miners, clerks and workers of various kinds, gas fitters and so on, who, in their council and pre-fabricated houses have been making such gallant efforts to keep their homes tidy, clean and efficient, have been sailing under false colours. They are really luxury loving, idle rich in disguise. How clever of them!
  Of course, according to the Opposition, Clause 8 shows how we have been deluded, for we now know that the owner-driver of that poor old wheezing, protesting taxi waiting for hopeless years under Socialism to replace his cab and who can now do so, is really the owner of several Bentleys in which he disports himself at Maidenhead, or on the Riviera, at his luxurious weekends. These are the rich men. I am trying to describe the rich men to which hon. Members opposite appear to object.
  Possibly I should go further. Is it the limbless ex-Service man, living on his 100 per cent. disability pension, who finds that the one method of getting in touch with friends or carrying on his part-time job is the mechanically propelled tricycle?

  615
  Is he the idle rich to whom the Opposition take exception?
  Let us consider direct Income Tax and also the reliefs given under Clauses 10 and 11. Direct Income Tax, of course, affects us all—except those who do not have to pay it—so there is no discrimination. As the Chancellor said, it is rather difficult to reduce a tax that is not paid. Regarding those upon whom the full tax is levied, a mere reference to the assistance given to people with old or dependent relatives shows up the mockery of the charge made by the Opposition.
  I would especially deal with one point and ask my Scottish colleagues to note it. Clause 20 sets out the relief granted to authors in respect of their copyright royalties. I wonder how many of the critics recall that Burns, the ploughman's son, among many others similarly born, had he lived today, would be a beneficiary under this rich man's Budget. From the "Daily Herald"—
  Mr. Emrys Hughes: I would like the hon. and gallant Member to give his views on what Burns would have thought of the Budget.
  Sir T. Moore: I leave that to the hon. Member if he is lucky enough to catch the eye of Mr. Speaker. I have enough on my plate already.
  The "Daily Herald," I gather, chooses as its chief plank of despairing criticism the various allowances made to industry in Clauses 14, 15 and 16. Of course, the "Daily Herald" and its lacrymose supporters, who must have had their combined tongue in their combined cheek, know perfectly well that these allowances are designed for one purpose; to make it possible, or partly possible to maintain full employment, to increase and expand production and to draw to this island the trade and profits which will renew our strength and enable us at last to stand upon our own feet.
  As to the Excess Profits Levy, which has been referred to and which is dealt with in Clause 25, every one who knows anything knows that it was and is a menace to every form of industrial development. But for the integrity, patriotism and determination of the average manufacturer, it would have thwarted every form of industrial and commercial development.
  616
  I have selected only a few of these many welcome features in the Bill to prove my case. I am sorry the Chancellor is not in the Chamber at this time, because I must confess that I find it difficult to understand his implied regret when, in his Budget statement, he said that his reduction of the Purchase Tax also applied to cosmetics. Surely my right hon. Friend must appreciate that cosmetics, the powder and lipstick which they used, were one of the great factors which enabled our harassed women to endure the grim and dreary period of six years of Socialism—
  Mr. C. W. Gibson: Lip service!
  Sir T. Moore: Cosmetics boosted up their morale, and all women, I am confident, will welcome this concession even though it may have been reluctant. But I expect my right hon. Friend has received domestic views on that statement which probably has changed his opinion by now.
  I hope what I have said will show up the utter nonsense and, indeed, the hypocrisy of those who term this a rich man's Budget. I will not seek to analyse their reasons, but I imagine it is partly due to jealousy and partly to envy; but mainly to resentment against their own leaders for lacking the initiative and courage to do what a Tory Chancellor has now done. Their anger is naturally increased as they recall that the Socialist Government received dollars by the million from the United States and Canada to bolster up their economy.
  I have a conviction, which I believe is shared by all hon. Gentlemen opposite who have a mind to think—and I am not including every one—that we have a duty and a privilege to congratulate my right hon. Friend for the initiative and great courage he has shown and for the magnificent job he has done. I said that he has shown great courage. He has also taken a great risk. He has banked on the quality of our people; that they will rise to the opportunity which he has provided for them and by so doing make our Britain great again. It seems to me that it is up to all of us to justify that trust. But while I join with every one else in congratulating the Chancellor on his achievement, I think also we may congratulate our own country on producing

  617
  a man of his quality and capacity at the Treasury at this vital cross-roads in our existence.
  As a postscript, I must say with reluctance that I regret my right hon. Friend was not, on this occasion at any rate, able to deal with two matters which I consider of paramount importance; one is the tax on petrol and the other postwar credits. In my constituency there is a comparatively small bus company, which, by the mercy of Providence, escaped the clutches of nationalisation. Owing to the high incidence of the tax on petrol this company is losing just over £50 a year on each vehicle. They cannot go on in that way and are obviously facing bankruptcy, unless, of course, the Chancellor, during the Committee stage of the Finance Bill, can find some way to ease their burden.
  Regarding post-war credits, I admit that at the moment it is an enormous and insoluble problem. I wonder if, instead of repayment at 60 years of age or 65, it would be possible to repay these credits in the cases of proved need only. There are many people receiving these payments who are not in dire need, and many others who are in dire need who are not receiving them. Without much change in the structure of the Finance Bill, a method might be found by which those who needed it could receive the money which is theirs. Alternatively, I believe there might be some funding arrangement made in respect of the whole vast sum. I do not know.
  I hope the Chancellor will try to solve these two problems. If he succeeds I am certain he will deserve and will receive the increased gratitude of so many of our fellow citizens who already owe him so much.
  5.48 p.m.
  Miss Elaine Burton: I hope that the hon. and gallant Member for Ayr (Sir T. Moore) will forgive me if I do not follow him in great detail, but I wish to speak about the Purchase Tax from a rather different angle.
  On Budget day and dealing specifically with the reduction which he intended making in Purchase Tax, the Chancellor of the Exchequer took us through the three different grades of the tax When
  618
  he spoke on the reduction of 100 per cent. Purchase Tax to 75 per cent. the Chancellor gave us some examples of trades which obviously would benefit from that reduction. He mentioned jewellery, silverware and then, as the hon. and gallant Member for Ayr said, he went on to cosmetics. I wish to ask the Financial Secretary if he can tell me whether he thinks that the old age pensioners in the constituencies of Kingston-upon-Thames, or Saffron Walden or Barnet—he will know why I have chosen those three—any more than anywhere else, are likely to benefit from this reduction in the Purchase Tax on jewellery, silverware or cosmetics.
  In Coventry—I imagine it is the same elsewhere—the old people are not buying jewellery and silverware and to the best of my knowledge they do not use cosmetics. I appreciate that the Financial Secretary might say that I have chosen these three examples to suit my argument. As a matter of fact, they are the examples put forward by the Chancellor. I wonder if the Financial Secretary can tell us where the old-age pensioner will be helped by the reduction of the Purchase Tax from 100 per cent. to 75 per cent. in any categories. I will gladly sit down and give him the opportunity of listing them if he wishes to do so.
  Mr. Boyd-Carpenter: I could say a good deal to the hon. Lady on many topics, not least that she is as well aware as are other hon. Members that, although all this is very entertaining, it has no relevance whatever to the serious issues affecting the industries concerned, industries in respect of which reductions in Purchase Tax have been urged upon my right hon. Friend by hon. Members in all parts of the House.
  Miss Burton: I thought the hon. Gentleman would not like this any more than hon. Members opposite like it.
  Mr. Boyd-Carpenter: It is most entertaining.
  Miss Burton: I am glad the hon. Member thinks it entertaining. I am going to continue with the entertainment.
  Mr. Boyd-Carpenter: And tax-free, too.
  Miss Burton: I hope the 4½ million forgotten old-age pensioners will enjoy it too.
  Mr. Boyd-Carpenter: They will no doubt recall that they enjoyed the very considerable increases in allowances which my right hon. Friend announced last year.
  Miss Burton: I shall be coming to that. The Financial Secretary has lost that round because he could not give me any examples. To come to the second category, that in respect of which Purchase Tax was reduced from 66⅔ to 50 per cent., the Chancellor mentioned motor cars, radio and television sets, refrigerators, vacuum cleaners and washing machines. As we are getting lower down the scale perhaps the problem will become a little easier. Can the Financial Secretary tell me of any articles in that category in respect of which a reduction in Purchase Tax will help the old-age pensioner?
  Mr. Boyd-Carpenter: Is the hon. Lady, as the Member of Parliament for one of the Coventry constituencies, objecting to a reduction in Purchase Tax on motor cars?
  Mr. Nabarro: Hear, hear.
  Miss Burton: The hon. Member for Kidderminster (Mr. Nabarro) is very noisy, but I can easily shout above him. I used to think that the Financial Secretary was very skilled in debate, but that was a very poor reply and I know he has no other.
  Mr. Boyd-Carpenter: Not at all.
  Miss Burton: At all events, I cannot get an answer. As a representative of one of the Coventry divisions, I welcome the reduction in the Purchase Tax on motor cars because it will help my constituency, but my point is that the reduction will not help the old age pensioners. I do not know whether this will also amuse the Financial Secretary, but when I have talked recently with trade unionists in my constituency who might be expected to benefit from the reduction in the Purchase Tax on motor cars they have told me that they would much rather have seen the benefit going to the old people who are not in a position to fight for themselves. If I am not to get
  620
  any answer to my inquiry, it must mean that the Financial Secretary has no answer to it.
  In the third category, in which the 33⅓ per cent. rate of Purchase Tax is reduced to 25 per cent., the Chancellor told us in column 53 that the items, including many in daily household use, were carpets—
  Mr. Nabarro: Hear, hear.
  Miss Burton: I am sure the Chancellor will be pleased to have the hon. Gentleman's support. He also cited linoleum, hardware, cutlery, bicycles and so on. Has the Financial Secretary yet thought of anything in that group in respect of which the reduction in Purchase Tax will help the old age pensioner?
  Mr. Nabarro: I have a constituency interest in carpets. The hon. Lady must be aware that the Carpet Weavers' Union, representing thousands of carpet weavers and other workers in the industry in Kidderminster, together with the whole of the manufacturing organisation, welcome and applaud my right hon. Friend's reduction in the rate of Purchase Tax upon carpets. Furthermore, they have stated that they had not really expected it. So they are doubly delighted.
  Miss Burton: Of course they are delighted, for everybody is, but I have always noticed that whenever hon. Members cannot answer a question they bring up something else, and I have not as yet had from the Government Benches even one example from these groups where a reduction in Purchase Tax will have benefited the old-age pensioners.
  Mr. Raymond Gower: Will not the hon. Lady agree that the old age pensioners have had more benefit from these reductions than they had from the continuous increases in tax under the Labour Government?
  Miss Burton: That is not so, because the old age pensioners cannot afford any of these things.
  The Financial Secretary raised my hopes on 15th April. In column 252 he said:
  "I should like to go a little more into the sphere of reality."—[OFFICIAL REPORT. 15th April, 1953; Vol. 514, c. 252.]

  621
  I hope the Financial Secretary will tell me if I am wrong, but I read his speech several times with great care and nowhere in it did I find any mention of the old age pensioners, whom I would describe as the forgotten 4½ million.
  On 16th April the Economic Secretary to the Treasury spoke. I went through his speech very carefully. There were 16 columns of it. I am sorry that I did not count the number of columns occupied by the Financial Secretary's speech. There was no mention of old age pensioners in the Economic Secretary's speech.
  On 20th April we had the Chancellor's statement, and in column 763 he gave considerable prominence to the old age pensioners. He said that three out of four old age pensioners either had resources or were doing part-time work. In my constituency last week an old age pensioner said that he did part-time work and that he still had to go to work because he could not exist on his pension. He was 81. Will the Financial Secretary agree that many old age pensioners have to continue working because they cannot manage otherwise?
  There was something else in the Chancellor's speech which I thought ought to be raised tonight if I had the opportunity to do so. In column 764 the Chancellor said that the Index of Retail Prices had remained stable for the past nine months, that presumably being from June up to the Budget. We may query that among ourselves, but I wish to draw the Financial Secretary's attention to "Illustrated" of last week in which was a report of an inquiry into the effects of Purchase Tax and the cost of living upon a family of four. The man, Mr. Alderson, had his Income Tax cut by 6s. by the 1952 Budget. He then received an extra 3s. a week allowance for his child, which started in September, making 9s. a week altogether. This man said that the rise in prices last year up to the time of the Budget not only cancelled out his tax reduction of 6s., but that he had had to add a further 6s. to the housekeeping bill, so that his expenses have gone up by 12s. a week.
  I do not know if the Financial Secretary would like to say—perhaps he does not know—where the Chancellor does his
  622
  shopping, but I am quite sure that every housewife in the country would like to know where the Chancellor does his shopping if he believes that prices have remained stable. I am wondering if the Financial Secretary has any comment to make on the fact that this man, with a wife and two children, finds that his housekeeping bill has gone up by 12s. a week since the Budget last year, and whether he would like to say that it was not correct. I am wondering whether he is prepared to answer that statement.
  Hon. Members: Get on.
  Miss Burton: I shall get on in my own time, and hon. Members opposite can get on in theirs, if they are called. I am still wondering if the Financial Secretary can reply to that question. Well, he is not going to do so.
  Returning to the question of Purchase Tax, in this article there was a list of 38 items on which the family paid Purchase Tax over the past 12 months, and it gives the old rates of tax and the new. On that list of 38 items, £2 was saved over the whole year—10s. per person. I do not know whether the Financial Secretary thinks that that is a good saving or not, but I should have thought that it was hardly worth doing.
  I come back to where I started on this matter of the old age pensioners. We have heard from the Government benches that this reduction in Purchase Tax was going to help all sections of the community. I wonder if the Financial Secretary would agree on this particular matter. Ever since this Budget in April, I have had to see old age pensioners in this House from different parts of the country, and those in my own constituency. We on this side of the House differ from the Government on whether the Cost of Living Index has remained steady. But would the Financial Secretary agree that the cost of living to an old' age pensioner is very different from the cost of living of people who are not as old as they.
  An old age pensioner needs primarily three things—food, light and heat. I think that most of us in this House, no matter for which constituency we sit, must have had old people to see us time and time

  623
  again about these three items. And here I am making a very special plea to the Government. I do not believe that the Financial Secretary, the Economic Secretary or the Chancellor himself would be prepared to get up now and tell us that the cost of food, light and heat has not risen over the past 12 months. Would the Financial Secretary say now whether he believes that, in these three particular items, the cost has remained stable? I can only assume that the hon. Gentleman is not prepared to say that. He knows full well—I am quite serious; I am not trying to be funny—that it is not so. I cannot conceive that anybody in any part of the House can sit here and believe that these old people can have the food, light and heat which they need.
  The reason I have raised this is that the only item in this Budget which could be said to benefit these people who do not pay Income Tax is the reduction in Purchase Tax. I claim tonight, in default of any answer from the Financial Secretary, that I have shown that there are no items in these groups where reductions will benefit the old age pensioner. I gave the Financial Secretary every chance to answer, and he has not scored a single point.
  Mr. Boyd-Carpenter: The hon. Lady has sufficient experience of this House to know that, although that Socratic method of interrogation is a perfectly legitimate practice here, nobody pays the slightest attention to it either here or outside, but that fully argued answers are given from this Box in debates, as they will be in this debate.
  Miss Burton: I am most grateful to the hon. Gentleman, because all I want is an answer.
  May I sum up and ask the Financial Secretary, or whoever will reply to the debate, three questions? First, what particular items in the reduction of the Purchase Tax are likely to benefit old age pensioners? Second, are the Government of the opinion that the cost of food, light and fuel has remained stable over the past 12 months? Third and last, if it has not remained stable, and as the old people have had no help at all, how are they
  624
  to get their food, light and heat, because they are not eligible for grants from the National Assistance Board?
  In conclusion, I would ask the Financial Secretary if, in view of this very serious position of the old people, the Government will consider on the Committee stage of the Bill inserting a new Clause to give some relief to the old age pensioners.
  6.6 p.m.
  Sir Waldron Smithers: I hope the hon. Lady the Member for Coventry, South (Miss Burton) will forgive me if I do not answer her questions, but she has been very well answered by the Financial Secretary from the Front Bench.
  I want to refer to the last few sentences of the speech of the Financial Secretary to the Treasury, and I hope I am quoting him correctly. He said something like this: "The main theme of the Bill is incentive, security, solvency and stability of the country, on which the welfare of us all depends." These things—incentive, security, solvency and stability—were mentioned by the Financial Secretary as part of the Finance Bill, yet we cannot value these things in terms of pounds, shillings and pence, though they are basic to our economic and financial recovery and prosperity. This Bill affects the whole economy and finance of all of us. I want to avoid too much detail and to try to get to the root of the matter and of the difficulties with which our country is faced.
  The seriousness of our position as a nation, and it is still serious, which this Bill tackles so well, is not generally realised by the majority of our people, who are mostly financially and economically uninstructed. The problems which the Chancellor had to face in drafting this Bill and last year's Finance Bill are the result partly of the war and partly of rearmament, but mainly they are due to six years of Socialist philosophy in action, which not only made recovery after the war impossible, but, in fact, made our position much worse. It brought us to the edge of the precipice of disaster. The promises of a materialistic Utopia in 1945 have inevitably proved false.

  625
  If I may misquote one word in some verses of Kipling, they are as follows:
  "In the '45 Election, we were promised abundance for all.
  By robbing selected Peter to pay for collective Paul;
  And, although there was plenty of money, there was nothing our money could buy,
  And the Gods of the Copybook. Headings said 'If you don't work, you will die.'
  Then the Gods of the Market tumbled, and their smooth-tongued wizards withdrew.
  And the hearts of the meanest were humbled, and began to believe it was true,
  That all is not gold that glitters, and that two plus two make four,
  And the Gods of the Copybook Headings limped up to explain once more."
  That is a concise description of the state in which the Socialist Government left us. But this Bill and the Budget have revived men's spirits and restored confidence and hope.
  The Socialists ruined our credit. That was proved by the fact that Sir Stafford Cripps had to devalue the £ from 4.03 dollars to 2.80 dollars. Credit is the life blood of Britain, which is the one country in the world which is not and cannot become self-supporting. The Socialists made no attempt to economise in the years 1945–51. The national debt rose from £21,365 million at 31st March, 1945, to £25,921 million at 31st March, 1951, and the generous American and Canadian aid was poured down the Socialist drain.
  The crisis with which we are faced today is a repetition on a much larger scale of the crisis of 1931 after two years of Socialist mis-government. As a result of long negotiations—in which I had the honour to take some part—and consultations with the Bank of England, then a free agent, the leaders of the three parties met and formed the National Government to restore confidence in credit. The Prime Minister of that Government, a member of the Socialist Party, speaking at Kilmarnock on 22nd September, 1933. said:
  "The working class of this country are not having their interests served by the Labour section of the Opposition"—
  I ask the House to remark those words—
  "Two years' ago the problem we had to face was not merely the question of the distribution of wealth: it was the question of the existence of the wealth itself."
  That was true then, and it is true today.
  626
  Later, Mr. Snowden, afterwards Viscount Snowden, fearlessly told the people the truth. Those two men threw over their Socialist principles because they knew that the carrying out of the Socialist programme would lead to disaster, bankruptcy and the starvation of our people. That was true then, and is even more true today. One more quotation. One of our finest Englishmen, Lord Grey of Falloden, writing to "The Times" on 3rd October, 1931, said:
  "My own belief is that the policy of the present Socialist Opposition would lead to national ruin and consequent distress and suffering, such as this country has never yet seen, and the severity of which is immeasurable."
  Twice in my lifetime Socialist policy in action has ruined our credit and brought us to the edge of the precipice of disaster. Another dose would be fatal. That is why the Government must boldly cut out the cancer of Socialism from the body politic, however painful that process may be. After all, Communism is only Socialism with its coat off. They must stop bulk purchase and not send one man out into the world to buy on behalf of 50 million people, because prices are of course, put up against him. The only hope is to restore healthy competition by buying through experienced traders.
  The Government must stop State trading at home and must take off all controls as soon as possible and allow the law of supply and demand to operate freely as the only reliable barometer. Then, as now, the Socialists ruined our credit, and what the Chancellor has had to do is to try to restore the credit of this country. He is doing that steadily. To support my contentions, if hon. Members do not believe me, I will quote from the "Economic Survey" of this year, which says:
  "A year ago, at the beginning of 1952, this country's most urgent problem was how to stem the drain of its reserves of gold and dollars. We were losing gold at a rate which, if continued, would have entailed the complete exhaustion of the reserves by the end of last summer. Long before the reserves had been exhausted the value of sterling as an international currency would have been undermined, and we would have found ourselves unable to import the food and raw materials we need to keep ourselves fed and clothed and to keep the wheels of industry turning, it was the main purpose of economic policy in 1952 to prevent this impending catastrophe, to restore confidence in sterling and to reach a position of stability from which the United Kingdom and the sterling area as a whole

  627
  could advance towards greater strength and prosperity."
  But the crisis is not over. The Conservative Party Weekly News Letter for 11th April had this warning:
  "Not out of the wood yet. But nobody should assume that we are out of our difficulties and that from now on it is plain sailing in calm waters."
  But under this Budget and under this Bill we take a new direction, stepping out from the confines of restriction to the almost forgotten and beckoning human endeavour. If we are to survive, there must be a willing response to the Government's policy. It will take time. Now, as in 1931, we have still to eradicate the consequences of past folly and the delayed action bombs left behind by the Socialist Government.
  The Chancellor referred in a recent speech to the first half of the century. Broadly speaking, the housekeeping accounts of this country are the Civil Estimates. There is no real difference in principle between the housekeeping accounts of the humblest home and those of the country. If one spends more than one's income, then the day of reckoning must come.
  In 1900—I ask hon. Members to note these figures—the Civil Estimates were £69 million. This year they are £2.400 million. In 1900 the National Debt was £689 million. This year it is £25,000 million. As a consequence, the purchasing power of the £, taking 1900 as 20s., is now only about 6s. 3d. I say to the Government, in all seriousness, that expenditure by Government and by local authorities must be further reduced if we are to survive. We must cut our coat according to our cloth.
  Mr. Ellis Smith: What will you cut?
  Sir W. Smithers: I am coming to that in a minute. If we are to survive, then at all costs inflation must be stopped. Almost daily there are demands for higher wages from every section of the community. Since 1948, wages have risen by about £860 million a year. If the present round of wage increases were granted it would cost another £500 million to £600 million a year. These increases do no good to the country or to the recipients. They, can only be paid
  628
  by printing more and more pieces of paper which are going down in purchasing power every day and which one can neither eat nor wear.
  To increase wages without increased production is suicidal. I have had reports lately from Germany and Belgium. There they are working very hard. I understand that civil servants in those countries at the end of their day's work go out and work four hours on house building. Yet only yesterday we had the Amalgamated Engineering Union asking for higher wages and shorter hours. Let them remember that in this country, which is not and cannot become self-supporting, we must produce goods and services at competitive world prices or face starvation. How can we successfully compete in the markets of the world when we are asking for shorter hours and other countries are working harder and harder?
  I would recall what was said by somebody whom I was proud to call a friend of mine, although he was a Member of the Labour Party. He was the late Mr. Ernest Bevin. Speaking in London in 1944, he said:
  "I, as an old trade union official, do not want £10 a week if I can buy only £2 of stuff with it. I would rather have £5, with which I could buy £5 of stuff."
  I hope that the trade union leaders will tell their members that.
  One of the principal causes of the present state of affairs is nationalisation of many of our basic industries, bulk purchase and State trading. Healthy competition has been destroyed, and the cost to the consumer of the goods and services provided by the nationalised industries has risen. That has created a demand for higher wages and this in turn increases the cost of living. So we go up and up the vicious spiral. A big effort is still required to maintain and consolidate the recently won surplus in our balance of payments. The current level of essential public expenditure is a source of acute concern to all of us.
  A moment ago I was asked what I would cut. I would cut the social services by an amount sufficient to reduce Income Tax by 1s.
  Mr. Ellis Smith: What would that amount to?
  Sir W. Smithers: I do not know the figure. What I am proposing would benefit the poorest of our people much more than extending the Welfare State. The main obstacle to the recovery of this country is the comprehensive Welfare State. I repeat "comprehensive." In a Christian community, those who fall by the wayside in the battle of life through no fault of their own must be rescued and helped, but the materialistic idea of the Welfare State for all and sundry kills initiative, which is the spark by which we live and prosper. The comprehensive Welfare State is ruining the character and the homes of our people, and instead of being a lifebuoy will be a millstone round our necks. The other day I heard it called the "Farewell State."
  I heard also of a typical man who was offered a job at a weekly wage and who refused, and said: "lam better off doing nothing. I am getting £7 4s. a week." A man who knew what he was talking about when he spoke of the Welfare State was the late Commissioner Lamb of the Salvation Army. He spoke with great authority about the poor. He said:
  "The country has during the last decade spent over £1,000 million on the relief of able bodied men and women and has got nothing for it but a heritage of demoralisation."
  Mr. Ellis Smith: Will the hon. Gentleman allow me—
  Sir W. Smithers: No, I cannot.
  Mr. Smith: The hon. Gentleman has made a serious statement. I understood the hon. Gentleman to say that he knew a person who had refused employment and preferred to live upon £7 a week. The man would not have been eligible for that sum if he had refused employment.
  Sir W. Smithers: That was told to me by a reliable person.
  Mr. A. C. Manuel: It is a slander.
  Sir W. Smithers: Hon. Gentlemen opposite do not like the truth, and they shall get it. This country is not and cannot become self-supporting. The first social service must be food. All increases in wages and in Government and local government expenditure must increase our costs of production and impede or destroy our ability to compete in the markets of the world. What is the good
  630
  of having teachers and pupils in schools and doctors, nurses and patients in hospitals if they have nothing to eat?
  To tell 50 million people that the State is a fairy godmother with a bottomless purse who, whether they work hard or not at all, will keep them from the cradle to the grave is criminal folly. Her Majesty's Government and the Chancellor must have the courage to tell the people the truth, "Reduce Government expenditure." If they can do this, the people of Britain will never let them down. The Chancellor said, I believe, in his Budget speech:
  "We must be in deadly earnest in this, struggle for overseas markets."
  He proclaimed the policy "Trade, not aid." If we are to have that policy we must remove the barriers to trade. I ask hon. Members to read the very interesting article on that subject in "The Times" this morning.
  In all our economic and financial thinking we must never forget that Britain is the one country in the world which is not and cannot become self-supporting. We must import roughly half our food and raw materials. To get them, now that Marshall Aid and the sellers' market are over, and now that we have to face ever-increasing competition from all parts of the world, we must, at whatever sacrifice, export goods and services at prices the world will pay, or we starve. If we restrict imports, we restrict exports. We must stop bulk purchase and state trading, and let our experienced merchants and bankers be free to earn invisible exports in free markets, working with a £ which is freely convertible. The policy of the Government should be, as soon as possible—
  Mr. Ivor Owen Thomas: To get out.
  Sir W. Smithers: I would ask hon. Gentlemen to give me a chance. I am trying my best to make a serious contribution to the debate. The Government's policy must be: free enterprise, free trade, a sound and free currency, no coercion, and peace through strength. These are not only sound economic principles but are the biggest contribution we can make to world peace. We have been told, "If goods cannot cross international frontiers, armies will."

  631
  In his Budget broadcast, the Chancellor said:
  "The success of the policy I advocate will depend on the extent to which industry and the people respond to my call."
  Our very existence depends on a free and willing response to sound and well-tried economic and financial principles. The Chancellor was right. Governments can give a lead, but the less they interfere with industry and with the liberty of the individual the better.
  I want to make one more quotation. It is from a speech made by a great friend of mine whom I loved dearly. I hope hon. Gentlemen will listen to this carefully, because what he said applies to today. It was said by Mr. Stanley Baldwin, who was afterwards Earl Baldwin:
  "The assertion of a people's rights has never yet provided that people with bread. The performance of their duties, and that alone, can lead to the successful issue of those experiments in Government which we have carried further than any other people in this world. Democracy can rise to great heights; it can also sink to great depths. It is for us so to conduct ourselves, and so to educate our own people, that we may achieve the heights and avoid the depths."
  I do not fear the atom bomb or the hydrogen bomb which kill the body, so much as I fear the Socialist concept of using the law to relieve individuals of the responsibility of their own welfare and to deprive them of their freedom of choice, which kills the soul. Recovery in this country can only come if individuals stand or fall by their own risks and decisions. If we are to survive, strikes and threats of strikes for higher wages and shorter hours must cease, and the Communist element must be rooted out of the trade unions. No one can compel a man to work, or to work hard, or to work at all. Man is free because he is man. Experience abroad shows that you can put him in a concentration camp, torture him, or shoot him, but you cannot make him work. Governments can do little or nothing. Recovery and success depend upon each individual putting, of his own free will, his duty to God and his neighbour—in that order— first, and his own so-called rights a bad third.
  I would say this to the trade union leaders: let there by all means be con-
  632
  sultation with the trade unions, but let it be on the basis that recognises that a captain of a ship does not call a committee meeting of the crew before giving an order that may save the ship from disaster. Discipline in a common and honourable cause is an honourable thing. We heard something today about cricket. A cricket or football eleven cannot hope to win matches unless there is discipline and a quick response to the captain's order.
  If all the 23 million of Britain's working population—many of whom are financially and economically uninstructed— would face facts realistically, and produce, as they could, another 5 per cent, to 10 per cent. of goods and services, without higher rates of wages and without putting up overheads, our economic disintegration could, and would, be averted. If they will not listen to reason, they and the country will have to learn by very bitter experience.
  Some workers in some firms, and a few trades union leaders—all credit to them—have realised this, and preach it, especially Mr. Arthur Deakin and the hon. Member for Nottingham, North-West (Mr. O'Brien) the chairman of the T.U.C. But the timidity in general in face of these inescapable economic facts is pitiable. We must make up our minds who is to rule the country—Her Majesty's Government or the trade unions. St. Paul knew it. He said:
  "And when we were with you we told you that if any among you would not work neither should he eat."
  Our greatest asset is coal. I want to quote some figures which are a little complicated, but which I hope hon. Members will study in the OFFICIAL REPORT tomorrow. In 1913, 8½ per cent. of colliery output was mechanically cut and less than 10 per cent. mechanically conveyed, compared with 74 per cent. and 73 per cent., respectively, in 1946 and 81 per cent. and 87 per cent., respectively, in 1951. Colliery output in the three years was 287 million tons, 181 million tons and 212 million tons, respectively. Exports and bunkers were 94 million tons, 9 million tons and 11½ million tons, respectively. On top of this, from 1945 to 1951, we actually imported 2,300,000 tons of coal.
  I know the difficulties of coal mining; I have been down a pit. But whatever

  633
  our difficulties may be, we must produce and export more coal at world competitive prices. That applies also to all our industrial production. But there is something wrong somewhere, and the nationalisation of the coal industry has made things worse. Saleable coal in 1945 was 38s. 2d. per ton. It is £6 per ton today. The price of coal affects all our industries, and therefore our ability to export at world competitive prices.
  In conclusion, I have something to say which will require all my courage, and I ask hon. Members to be good enough to listen to it. The economic and financial recovery of Britain is vital, not only to the recovery of our own country but to the salvation of mankind. The whole world still looks to the British Empire for leadership. This Coronation year proves that. The crisis, and it is a world crisis, is fundamentally neither economic nor financial. It is a spiritual and moral crisis and must be won in the hearts of men.
  The freedom-loving peoples of Britain, the Empire and the United States of America, by their united efforts overcame the dictatorships of the Kaiser and Hitler. They must again be true to their principles and unite in defeating the dictatorship of Communism. We fought two wars for freedom; we are threatened with another. Thousands died and were wounded in that cause, made sacred 2,000 years ago when He died for the freedom and dignity of the individual man and woman. Let us, in our generation, be worthy of these sacrifices made for us. Let us keep the torch of freedom burning so that our children may say of us, "In the hour of danger and trial our forefathers played the game."
  The Chancellor ended his broadcast with these most important words:
  "With God's help we shall succeed."
  I should like to quote a few lines which sum up the whole of what I have tried to say and which are the only foundation for economic progress and prosperity. The words were spoken by our late beloved King George VI in one of his broadcasts. He said:
  "I desire solemnly to call my people to prayer and dedication. We are not unmindful of our own short-comings, past and present. We shall ask not that God may do our will, but that we may be enabled to do the will of
  634
  God; and we dare to believe that God has used our nation and Empire as an instrument for fulfilling His high purpose."
  6.38 p.m.
  Mr. David J. Pryde: I feel that someone far better equipped than I am would be required to answer the hon. Member for Orpington (Sir W. Smithers). He brought me very much in mind of a great figure in this House of Commons many, many years ago. I have read the speeches of Edmund Burke, and while Edmund Burke was credited with emptying the House I notice that the hon. Member for Orpington has collected quite a good audience. There is, of course, little in the hon. Member's speech with which I could agree. He mentioned a friend of mine, a colleague in the days beyond recall and he quoted from one of his speeches.
  I would recommend to the hon. Member that he should read the OFFICIAL REPORT of another place in which he will find that Lord Snowden said in that place that this country had been betrayed and that he had been betrayed. He added that it did not matter for him, but that the National Government would be weighed in the balance and found wanting. The present Government will be weighed in the balance and found wanting, as I shall demonstrate. The hon. Member for Orpington spoke about coal production. The wages of Scottish miners in 1900 were based on 4s. per day. The hon. Member talked about the importation of coal into this country. I ask him how much was imported in 1926 when the present Prime Minister led the campaign to drive 500,000 of us from the pits and assassinated the coal industry.
  I leave the hon. Member for Orpington there and turn to answering the question by the hon. Member for Ayr (Sir T. Moore), who asked what Burns would have said today about the Budget. [An HON. MEMBER: "Burn it."] I think that Burns would have pointed to the words of the poet who said,
  "… of all words of tongue and pen, The saddest are, ' It might have been '."
  That disposes of the argument of the hon. Member for Ayr.
  I want to pay a tribute to the Financial Secretary to the Treasury for the easy facility with which he stated his case.

  635
  But I agree with my right hon. Friend the Member for Battersea, North (Mr. Jay) when he said that we are concerned both with what the Budget has done and what it has not done. In comparing it with previous Budgets I am reminded very forcibly of what an Irish friend of mine said last week. He said, "There is just this difference. The right hon. Member for Bishop Auckland (Mr. Dalton) was a broth of a boy. He was like Brannan on the moor. He took it from the rich and he gave it to the poor." Succeeding Labour Chancellors did the same thing. My friend then went on, "The right hon. Gentleman we have for a Chancellor now does the opposite thing. He takes it off the bottom and he sticks it on the top." I think that everyone will agree that that is the trend of the present Budget.
  My right hon. Friend the Member for Battersea, North asks what is the difference between last year and this year. There is more unemployment. There are 400,000 unemployed. More short-time is being worked than ever before. In my own constituency, the nine paper mills on the River Esk, the Water of Leith and the River Almond are still working only four days a week. Last year the Chancellor said that his Budget would allow the people to work overtime. The paper makers of Midlothian are asking today, "How is the Chancellor to get us working a full week, far less overtime?"
  Questions have also been asked about the cost of living. Hon. and right hon. Gentlemen opposite deny that there has been any increase in the cost of living, but that increase has been proceeding so insidiously that no one has noticed it. I should like to give an example. Out comes a notice in the Press, "There will be an increase of a penny per 1b. on flour." When one thinks in terms of a penny a lb. one is not perturbed in the slightest, but when the miller says to the baker, "This is an increase of 23s. 4d. on a 20-stone bag" the baker sits up and takes notice. People naturally ask if bread is going up in price. Brown bread is the staple diet of the diabetics and many other people who are not so robust as they might be. They find that brown bread is going up in price, and it means a further drain on their purchasing power.
  636
  Some people say, "Off with controls." Is wheat going to be placed at the mercy of one buyer or of two buyers on behalf of the nation? Is there to be a corner in wheat so that the price of the food of the people is dictated at any time by private enterprise? It should be remembered that in regard to supplies of paper the slogan of hon. Members opposite and of the Conservative national newspapers was, "Off with controls," but from the day that controls were lifted in the paper industry the bottom fell out of the market.
  This Budget is a class Budget. If the Chancellor denies that, I am sure he will agree that he has a certain amount of prejudice. Let us see what he has done about sport. Amateur sport will be free of tax but other sport will not be. I have no objection to certain of the rich clubs paying something, although, being a follower of the great and mighty Rangers, I believe they are just as entitled to be free of tax as any of the cricket clubs of England.
  With regard to other games, I want to draw the Chancellor's attention to the very weak position in which some athletic clubs are left because of the operation of this tax. I represent a large constituency. At one end there is an amateur athletic association which receives a great deal of money in the shape of public subscriptions, as well it should, because it is a very fine organisation. Fifty miles to the south is an organisation which runs the famous St. Ronan's Athletic Games. In a small place like Innerleithen they have not a great deal of drawing power, but because they are not an amateur athletic association they will be subject to tax.
  What of the other Scottish games? What about Aboyne, Braemar, Callender, Cowal, Thornton, Saughton and many other places? They always have a great struggle. They will receive no relief from the Budget. I appeal to the Chancellor to reconsider his decision.
  Then there is the position of the small cinemas. They are in a very peculiar position in Scotland because they cater for populations in our isolated rural areas. The position of cinemas in the towns is not so bad. One can go to Leicester Square on any night and find a ready-made audience paying 5s. and

  637
  7s. 6d. per seat, but in small places like Innerleithen and Peebles, if one examines the accounts of the cinemas one finds that many of them are running at a loss. If unemployment strikes in these districts it can be taken for granted that a very serious situation will arise. Representations have been made and adequate evidence has been submitted to the Treasury in support of a relaxation for the small cinema. I am not appealing on behalf of large cinemas but there is an unanswerable case for the small ones.
  My hon. Friend the Member for Coventry, South (Miss Burton) has raised the question of the old people. I had intended to raise that subject, but she has said sufficient to make it unnecessary for me to add anything in that connection. I know that the Chancellor will take note of what she has said.
  One other point to which I want to draw the attention of the Chancellor— the Financial Secretary to the Treasury mentioned it in his opening statement— is the question of oil. I mentioned the subject last year. This industry represents a very important unit of the Scottish economy. It is a subsidiary of the Anglo-Iranian Oil Company. The shale oil industry today has certainly diminished, due to the importation of foreign oil, but the by-products side is a very valuable adjunct, and has great potentialities.
  This Scottish shale mining industry may yet be the saving grace of this country. I can go no further into that because it means projecting our minds into the future. Today, however, it occupies a very precarious position. At any time the economy of this industry could be overturned and more than 4,000 people, with their wives and families would be flung on the scrap heap. Some people might say that these men would be absorbed in the neighbouring minefields of Alloa, Fife and Midlothian.
  I want to impress on the House, however, that it is not so easy to transfer shale miners to the coalfields because shale mining is a very different type of work from coalmining. It might take years to accustom a shale miner to the— to him—new conditions in a coalmine; some, I regret to say, are never able to adjust themselves to conditions in the coalmining industry. I would rather see
  638
  the shale mining industry enlarged, for it is quite capable of enlargement. These shale oil measures, possibly richer than those in any other part of the world, stretch from the Fife coast through the Firth of Forth down into the south of Midlothian, so far as a geological survey has been made; but Scotland has never been thoroughly surveyed geologically, and it is time it was.
  There are many other aspects of the Budget with which I should have liked to deal, especially the grants to Scotland. Some of our counties get no equalisation grant. The county of Peebles is one, and Bute, in the west, is another. Peebles and Bute are two striking illustrations. I warn the Treasury that unless adequate provision is made in the very near future for a readjustment of Scottish finances we shall have to face a very serious position in Scotland. Already the local authorities are pointing out that the Chancellor's financial policy will prevent them building any more houses, even space-saving houses. I appeal to the Treasury to take time by the forelock because the local authorities in Scotland are on the move, and I do not like to see trouble if it can be prevented.
  In many of the counties in Scotland the local authorities find it impossible to deal with the unclassified roads, and as agriculture is our staple industry I appeal to the Treasury to make available more money to such rural counties as the Highlands and the Islands and the southern portion of Scotland. Twenty-five miles from the centre of the city of Edinburgh, to the south, we find the same characteristics as obtain in the Highlands of Scotland. In Peeblesshire the rural roads are practically impassable for heavy traffic, and with the cutting down of the railway system, thus disconnecting Peeblesshire from the great city of Edinburgh and the city of Glasgow, we are finding that transport in the south-east of Scotland is a problem indeed. I would emphasise that we have expanding industries in South-East Scotland.
  Lastly I want the Treasury to impress upon the Board of Trade that it is absolutely necesary for us to get alternative industries into Midlothian and Peeblesshire. In Midlothian we are transporting redundant miners from Lanarkshire. But every member of a family does not work

  639
  in the pits; the women do not. We require light industries to employ our womenfolk from the west of Scotland. I think I have said sufficient to compliment the Financial Secretary on his able presentation of the case, but I think that I have also said enough to prove that the Chancellor is more generous to his own sphere of society than to the great mass of the workers.
  6.54 p.m.
  Captain L. P. S. Orr: It would be presumptuous of me to join issue with the hon. Member for Midlothian and Peebles (Mr. Pryde) on the aspects of the Finance Bill relating to Scotland to which he has devoted some time. I think, however, that he will not find himself entirely out of sympathy with some of what I am going to say, particularly with regard to light industries.
  I am speaking on this occasion not only for myself but also on behalf of my hon. Friends who represent Northern Ireland constituencies. Lest what I have to say may appear to the Chancellor to be devoted more to what is not in this Finance Bill than to what is, and lest it may appear to be too critical, let me say that whatever Burns might have said about the Budget, we in Ulster, at all events, welcome it and say nice things about the Chancellor.
  When we look back upon the circumstances in which this Government and the Chancellor took office a little over a year ago, when we recall the very lifeblood of our nation ebbing away and our gold and dollar reserves fast running out, what has happened since seems to us nothing short of miraculous. I can assure the Chancellor that his Budget and his Bill have already been widely welcomed in Northern Ireland, and I hope that he will not consider what I am about to say as an indication of ingratitude.
  There is, however, a strong feeling, which is probably shared by hon. Members who represent other Development Areas, that while we all share in the advantages of the Chancellor's policy—the restoration of the gold and dollar reserves and the stability of sterling that flows from that—while we share in the benefits under the Finance Bill—namely the re-introduction of the initial allowances, the reduction of the standard rate of Income
  640
  Tax and so on—and while we regard that as likely to be an incentive to industry, nevertheless we have a feeling that there are certain things which the Chancellor might well have done for Northern Ireland and the Development Areas without damaging the essential structure of his Budget.
  I should like to describe something of the economic position of Northern Ireland by way of illustration. Northern Ireland has a population of just under one and a half million. Our economy is partly agricultural and partly industrial. It is a badly balanced economy. Compared with the Irish Republic, our neighbours, we are perhaps comparatively well developed, but, judged by British standards, we are considerably underdeveloped. At the moment we are far too dependent upon certain old-established basic industries for the employment of our people.
  Although vigorous action has been taken by the Government of Northern Ireland, though we have been aided considerably by the treatment which we have had not only from this Government but from their predecessors—I acknowledge both—and although we have been rightly accorded Development Area treatment, nevertheless the situation is still exceedingly grave. We have not succeeded in attracting sufficient new industries, in spite of the efforts that have been made to balance our economy. We have attracted sufficient new industries to the area to employ about 27,000 people who would otherwise be out of work, but unemployment has been running for the last year at an average rate of 10 per cent. of our insured population.
  We have heard complaints in this debate about unemployment here and there in the United Kingdom, but the national average for Great Britain is under 2 per cent., while in Northern Ireland 10 per cent. of our workpeople have been unemployed: the figure is down a little this month. Last month, out of a total insured population of 466,000, 41,918 were unemployed. That is 8.9 per cent. Whatever one may think that Governments might do or might not do, that is a situation which we cannot allow to continue while there is anything which either this Government or our Government in Northern Ireland can

  641
  possibly do to alleviate it. It is a situation which we cannot possibly view with equanimity.
  I am fully prepared to concede that Government action alone cannot cure unemployment, and that our industrialists, and indeed all our people, must make great efforts to improve and increase their markets and to improve our prosperity. They must bend every sinew to that task. Nevertheless, we should examine this partial failure of our policy to attract new industries. Why has it not succeeded?
  One of the reasons is this: when industrialists are contemplating setting up a factory in Northern Ireland they first take into account the various advantages which we offer, namely, a reserve of excellent and highly adaptable labour, and an atmosphere largely free of industrial strife and largely free of restrictive practices. They look also at the generous assistance they get from both Government and local government authorities. Nevertheless, many of them are intimidated by the high cost of freight carriage of their raw materials entering Northern Ireland and of their finished products going out. Looking at the Budget from this standpoint I should have thought that the Chancellor might have seen his way to have reduced the duty on hydro-carbon oils, that is the petrol tax, rather than the Purchase Tax on motor cars. I see that the hon. Gentleman the Member for Orkney and Shetland (Mr. Grimond) nods his head. I have no doubt that this argument commands sympathy in other remote areas.
  The effects of that would, of course, have been long-term. But from the short-term point of view there is something that the Chancellor might have done which would have had a considerable and a very quickly beneficial effect on our situation. We are dependent for the employment and prosperity of our people, as I say, upon certain old major, basic industries. One of those is textiles. The number of our people registered as employed in textiles at the moment is about 107,000. That is about 23 per cent. —almost one-quarter of all our workers in Northern Ireland. The number of unemployed in that industry in March was 7,724. Any action therefore to assist the textile industry or any part of it will also assist considerably in solving
  642
  our unemployment problem, and should not be neglected.
  I come to our famous Irish linen industry—linen, the queen of all textiles. Of those normally employed in linen 8 per cent, are unemployed. That is not the figure at the height, or depth, of the recession a year ago. That is the figure for last month. Though it may be true to say linen has made a quite remarkable recovery from the recession it has not made the same recovery that the cotton industry has done. The recovery is not complete and the situation is by no means satisfactory.
  The ideal solution for the linen industry would, of course, be to abolish Purchase Tax on all non-woollen textiles altogether, and I hope that the Chancellor has that in mind as his ultimate aim. The whole of the Purchase Tax is bad. It is full of anomalies and causes countless difficulties. We have committees sitting on this or that aspect of it. It is time it was done away with. To remove Purchase Tax from all non-woollen textiles at the moment would, I understand, cost about £25 million, so we do not expect the Chancellor to do this at once, but I would ask him to keep that aim before him. Perhaps, however, he would consider its particular effect on the linen industry.
  I find myself in substantial agreement with what the right hon. Member for Battersea, North (Mr. Jay) said about the D Scheme, for its effect on linen has been definitely harmful when compared with the old Purchase Tax. Formerly there was reasonable flexibility. Only the most expensive linen products were subject to Purchase Tax. Now, although to a certain extent the "blind spot" has been removed, nevertheless a vast number of linen articles which would not have borne Purchase Tax now do so.
  Not only from the point of view of employment in Northern Ireland but also from the national point of view, this linen problem is important, because it ought not to be forgotten that the exports of linen in 1951 amounted to no less than £25½ million in value, and the vast bulk of that was in dollars. In 1952, the value of those exports fell to £22¼ million, a drop of some £3£¼ million. Apart from the heavy canvas goods, the bulk of those exports were from Ulster. I am not trying

  643
  to advance the argument that this fall in exports was entirely due to the D Scheme or Purchase Tax on linen. Nevertheless, the linen trade are of the opinion that the D Scheme is having a bad effect on exports, exactly the effect referred to by the right hon. Member for Battersea. North. How is this?
  Home market deliveries in linen from April to December, 1952, fell in value, from those of the comparable period in 1951, by 27 per cent. That is serious in itself for the industry. I have here a very interesting table of figures from which I could quote at some length, and to avoid doing so I am prepared to send it to the Chancellor. It shows that the fall in trade was less in those sections in which the goods are cheap enough not to attract Purchase Tax. Therefore, it is fair to argue that while Purchase Tax has not been entirely responsible for the fall in home demand it has played a very considerable part in the fall in home demand.
  The reasons are obvious. Retailers do not want to stock up with goods consumers do not want because they bear Purchase Tax, or with goods the tax on which may be lightened or removed, on which they may make a loss. The Chancellor argued that because of the recession last year he gave his reductions in tax on textiles a year in advance. Those reductions given last year were of very little benefit to the linen industry. That is the opinion of the industry itself.
  An effect of the Purchase Tax and this fall in home demand has been the gradual debasement of standards. That may seem a somewhat facile argument, but I can assure the Chancellor that there is considerable substance in it. There has been a considerable debasement of standards. I have been into this aspect of the matter fairly closely, and I could give example after example. I will give one. There was formerly a very charming export, a coloured-border linen tablecloth. I remember those cloths very well. Under the D Scheme those tablecloths, which had not formerly borne tax, bear tax of 7s. 10d. per cloth. Rayon cloths which are somewhat similar can be sold at 7s. 10d. without the tax and, therefore, people in the industry have turned over to making cloths in rayon, which cannot be exported because of the duty, and so that export is completely lost.
  644
  The same thing is beginning to happen in the case of linen handkerchiefs, and in the case of damask there has been a tendency to use more and more cotton as against linen. Damask, which was formerly 60 per cent. linen and 40 per cent. cotton, now contains these constituents in reverse proportions, and consequently is not so attractive as an export. Of course, this is having an effect on the ancient craft of damask weaving, and there is the possibility of a deterioration in standard there, and unemployment in flax spinning factories.
  I should also mention one other aspect of this matter, that is, the raw material aspect. Linen uses, as its raw material, flax, which does not require dollars to buy. One-quarter of our raw materials come from home sources and are home grown. I should think that is an argument which should appeal to the Chancellor. I beg the Chancellor to consider the case which the linen industry has put to him and to see if he cannot do something to meet it. He may not be able to do anything to help us in this Finance Bill, because there is nothing which can be altered which would help us, apart from the general question of Purchase Tax, but I understand that he is empowered to make an alteration to the "D" levels by Order in Council, and I hope that he will see his way towards meeting the case already put up to him by the linen industry through us. If he could do so, it would be a tremendous advantage, I believe, to exports from this country and be a step towards helping us in Northern Ireland in grappling with this very human problem of unemployment there.
  7.12 p.m.
  Mr. Frederick Mulley: I think that the House will feel indebted to the hon. and gallant Member for Down, South (Captain Orr) for the very clear and detailed picture of the grave situation in Northern Ireland which we have had from him. I would not presume to comment in detail on the various points which he has made concerning the economy of Northern Ireland, but I shall later make a few remarks about Purchase Tax. I think that we may find ourselves much in agreement on that point.
  I would, however, make a general observation, that the hon. and gallant Gentleman should not have expressed

  645
  himself in the opening sentences of his speech so enthusiastically about the Budget, because the Budget is really designed to produce some of the effects in Northern Ireland about which he has complained. I am sure that his hon. Friend the Economic Secretary will agree that we cannot expect to have investment in new industries and an increase in employment and in exports while we are continuing to pursue the deflationary policy which has been the policy of Her Majesty's Government.
  I do not propose to attempt to illustrate that in the context of Northern Ireland, but I think that as the national picture of the United Kingdom as a whole shows a fall in production of 3 per cent. and a fall in the level of exports of 6 per cent. it is not surprising, since the Development Areas are always the most prone to unemployment, that there is the very considerable and serious figure of 10 per cent. in Northern Ireland. I hope that the hon. and gallant Gentleman will support the measures which we shall be putting forward on the Committee stage and which we think will do something towards the improvement of the general employment and production situation in this country.
  As one who, before the Budget, made representations to the Chancellor of the Exchequer and to the Financial Secretary privately and in debate about Purchase Tax, I should like to make some observations as to the effect of the changes which have been introduced as a result of the Budget. If I may say so, without wishing to appear offensive to the Chancellor, I think that he was guilty of certain political sharp practice in suggesting in his Budget statement that one of the purposes of the reductions in Purchase Tax was to reduce the cost of living and to make some concession to those not able to benefit from the reduction in Income Tax.
  He made no reference in his speech to the effect of Purchase Tax reductions on the cost of living. But it was discovered by Question and answer in the House that the total of such reductions amounted to less than one point in the Index of Retail Prices—I am corrected by an hon. Friend who says that it was only a fraction of one point—which must be set against the 10 points by which the cost-of-living index has risen since the right hon. Gentleman took office. Where-
  646
  as we do not complain that sometimes the price of things go up, because we appreciate that there are world factors over which Her Majesty's Government may have no control, we do complain that this Government should have been elected on the slogan that they would reduce the cost of living and should then have put the cost of living up, not as a result of world economic forces, but as a deliberate act of Government policy.
  Mr. Gower: Is the hon. Gentleman not pleased that this retail index has stood still?
  Mr. Mulley: It has risen by 10 points since October, 1951, and it is about that that I am complaining. This Budget does nothing to reduce that and, indeed, it seems likely to continue to rise. If the hon. Member for Barry (Mr. Gower) will consult the figures produced by the United Nations and other economic international reports, he will see the surprising thing, if they are looked at in the context of the world situation, is that the cost of living has gone up in this country and in no other country; in fact, in most countries it has gone down. I do not think that the Chancellor would deny that it is deliberate Conservative policy which has caused the cost of living to rise.
  Mr. Gerald Williams: What percentage is that?
  Mr. Mulley: I cannot be expected to give a lecture on figures which can be readily found in the Monthly Digest of Statistics. The figures, I speak from memory, are from 126 to 137. If the hon. Gentleman is good at arithmetic perhaps he can tell me what is the percentage.
  Mr. Anthony Crosland: Seven per cent.
  Mr. Mulley: My hon. Friend is, as usual, very quick on figures. While we welcome the reduction in Purchase Tax, there is a surprising lack of courage on the part of the Chancellor to select the items and the industries which are deserving of reduction in the tax. The general overall reduction of 25 per cent. is not directed to either the fiscal or economic needs of the country.
  The motor car industry should never have been allowed to get away with their case for a reduction of tax. The hon.

  647
  and gallant Gentleman the Member for Down, South suggested and, I think, others will agree, that if motorists were to be assisted it would have been better to have done so by a reduction in petrol tax which would have brought down the cost of living and the cost of public and private transport. We read in the "News Chronicle" yesterday that few motorists will get a new car—I think the phrase was "from a baby car to a Bentley"—before August. There is no suggestion at all that the reduction in Purchase Tax was a stimulus to the motor car industry. I was told by members in the trade some weeks before the Budget that if the Chancellor would merely say categorically that there would be no reduction in Purchase Tax there would again be a large waiting list, and so it proved to be.
  Mr. Nabarro: Has the hon. Gentleman troubled to consult those of his hon. Friends who represent Birmingham constituencies who went to my right hon. Friend two weeks before his Budget pleading urgently for a reduction in Purchase Tax on motor cars?
  Mr. Mulley: I consulted one of my hon. Friends who represents a motor industry constituency, and he said that if the Chancellor had done something about the Purchase Tax last December it would have been intelligent but at the moment it is stupid.
  Mr. Nabarro: Tell us another tall story.
  Mr. Mulley: Another matter is television. What is the point of reducing the Purchase Tax on television sets today? If the argument is that the Government want to expand the demand for motor cars and television sets, they could have done it at no cost to the Treasury simply by altering the hire-purchase regulations. Anyone in either of those industries will say that the factor which stands in the way of increased sales in many cases is the very large deposit which is at present required. Why should all this extra money be lost to the Treasury when other industries badly need a reduction in Purchase Tax in order to exist?
  My general point is that, whether it is for Parliamentary reasons or in the interests of simplifying administration, the
  648
  Chancellor has refused to regard Purchase Tax as an economic instrument and has regarded it simply as a fiscal instrument. That is a bad approach. The one thing in the Finance Bill which I welcome is the suggestion that, under new powers to be taken, Purchase Tax may be reviewed frequently during the financial year. I hope that will be the case and that the Chancellor will not take too seriously the recommendations of the Hutton Committee that Purchase Tax should be reviewed only once a year. If an industry finds itself in difficulties it is outrageous that it should have to wait until the next Budget before consideration can be given to its case.
  I now want to make special reference to the industries in Sheffield which are affected by Purchase Tax, namely the silverware and cutlery industries. We take it as a compliment to Sheffield, and also to Birmingham, that in each of his speeches, including his radio speech, the Chancellor has mentioned silverware by name. That is a great compliment, but, unfortunately, the concessions which have been made in respect of silverware will do very little to help the industry in its very considerable difficulties.
  I should like to give the House the views of the Sheffield Chamber of Commerce on the position of the cutlery and silverware industries after the change in taxation. The quotation is a little long but it puts the matter very concisely. It is as follows:
  "The new rate of 75 per cent. in place of 100 per cent. makes very little difference to the selling prices which still remain too high to effect the stimulus which is so urgently needed if the crafts and skills are to be maintained and the training of new entrants encouraged.
  It may be that the reduction was restrained in order to prevent the retailers from losing too heavily. The fact is, however, that retail stocks of silverware and best cutlery subject to the higher rate of Purchase Tax are extremely low. They will remain low until a really sensible reduction is made or complete abolition decided upon. This, we contend, could be done now because the yield from the recent 100 per cent. rate has been so low as to be hardly worth the cost of collection, and it will be even less at the 75 per cent. rate, because the reduction is insufficient to revive confident buying.
  In connection with the rate of 33⅓ per cent. now reduced to 25 per cent. on cutlery generally, the principle is again heartily welcomed, but we still contend that cutlery should be regarded as being as essential as pottery on the table, and therefore exempted altogether.

  649
  We feel sure that the stimulus which would be given to these industries by abolishing Purchase Tax would resolve the present unemployment, which is increasing still, and that consequent increased business activity would soon replenish the coffers of the Treasury through the other methods of taxation in force."
  I urge the Chancellor again to look at the silverware industry to ascertain whether further consideration would produce a better result in terms of the rate of Purchase Tax. I urge that silverware should be brought down from the top rate and put into the middle group at 50 per cent. If the Chancellor cannot do that over the whole range of the silverware industry, will he consider treating the more essential items, such as sterling silver, table hollow-ware, teapots, and things of that sort, in the same way as E.P.N.S.? This would also be of great assistance to the hotel industry, which, if it were not for Purchase Tax, would be replenishing its supplies of silverware in order to put on a good show for the overseas visitors which it will be entertaining this year, and, I hope, in future years.
  From the point of view of the cutlery industry, there is no case at all for retaining in the top category cutlery which is there only because it consists in part of ivory or mother-of-pearl. As I have previously explained at great length in the House, small pieces of ivory and mother-of-pearl are used on the handles of knives and so on, and if they are not used in this way they are simply scrapped. There is no justification for putting this cutlery into the 75 per cent. category instead of the 25 per cent. one merely because of that small addition of ivory or mother-of-pearl. The high skills in cutting mother-of-pearl and ivory will disappear unless some special consideration is given to the matter. The amount of revenue involved is insignificant, but this means a lot to those whose livelihood is in these trades. By doing this the Chancellor might gain, because there would be increased turnover as a result of such a sensible reduction.
  I now turn to the taxation of industry. There was a lot of trouble last year because of the Excess Profits Levy. There is an impression in the country that we have a paradox in that a Conservative Government is taxing industry more fiercely than the Labour Government did. Some hon. Members opposite feed fuel
  650
  to this fire by their speeches. But the fact is that in the next financial year, according to the Financial Statement, it is expected that, taking Profits Tax and E.P.L. together, there will be a yield of £315 million against £379 million produced in the year 1952–53, a fall of £64 million in the revenue taken from industry.
  In addition, the reduction in the standard rate of Income Tax gives industry another £45 million. That figure is interesting because it is almost exactly the amount which would be required to give old-age pensioners another 5s. a week each. There is perhaps some significance in the choice which was made of the means of disposing of that amount of the Budget surplus.
  We should make it clear that we do not regard it as satisfactory that the contributions of industry to our Revenue should diminish at this rapid rate. In particular, it is significant that there has been no mention yet of what additional profits taxation is to be proposed when the Excess Profits Levy is terminated at the end of the year.
  Mr. Nabarro: We hope there will not be any.
  Mr. Mulley: The hon. Gentleman is at least frank. He clearly believes, and has the courage to say that he so believes, that the rich should become richer and the poor poorer, because that is the significance of the financial policy which he advocates.
  Mr. Nabarro: No, it is not. All I am advocating is that sufficient funds should be available to British industry to modernise and re-equip itself in a harshly competitive world.
  Mr. Mulley: I am glad the hon. Gentleman made that intervention. I was beginning to address myself to exactly that point, the way in which industry can be assisted to equip itself. When we discussed the food subsidies there was much criticism to the effect that they were a very blunt way of redistributing wealth because they went to people who did not need them as well as to people who did need them. But the Chancellor's policy for assisting industry is based on that blunt, unsatisfactory method. There is not a justification as there was in the case

  651
  of the food subsidies, that those who got the food subsidies without needing them paid very much more in taxation to make it possible for those who needed cheaper food to have it.
  Mr. Gower Mr. Gower rose—
  Mr. Mulley: I cannot give way again to the hon. Gentleman because I want to develop this particular argument. The Chancellor in the standard rate of Income Tax reduction and all these other global contributions to industry, which are going to the football pool proprietors and to firms that are not making any essential contribution to the economy, is giving the same reliefs to others as he is giving to engineering and to other firms with an important export potential.
  I also want to suggest that the initial allowances should again be selective. I will not repeat the very clear case of this point that was put in the Budget debate by my hon. Friend the Member for Gloucestershire. South (Mr. Crosland), and again today by my right hon. Friend. I think a strong case was made out for preferential treatment for fuel economy appliances, firms with important export potential, the brickyards and, indeed, any industry which needs to re-equip and which is making a real contribution to our economy. It is my belief they should have bigger initial allowances than should be given to any company which only wants to buy a new car for a director. That is probably one of the reasons why the waiting lists for cars is mounting again, because the initial allowances will be used for inessential purposes. I ask the Chancellor to give serious consideration to the points made by my hon. Friends this afternoon on this subject.
  The final point I want to make is to try and give a much clearer picture in a few minutes of the state of our economy and the actual situation as it was in 1952 than the very distorted picture of our real economic prospects the Chancellor gave in his Budget speech. Hon. Members opposite say that the criteria of prosperity and efficiency is the profit motive, and I ask them how can they claim that, by their own standards, we are much more prosperous now when gross profits have fallen by £179 million in 1952 as compared with 1951.
  652
  We are all extremely glad that the balance of payments position has improved, but I ask hon. Members to realise how that improvement was brought about. There has been a reduction in imports of £569 million, a decrease in the rate of accumulation of stocks of £565 million and an actual reduction in the physical level of stocks of £100 million according to the Financial Secretary's figures in the National Income and Expenditure paper although in the Economic Survey they try to pass over the point by saying that the stock level was practically the same in 1952 as it was in 1951. This has achieved a balance of payments surplus of £291 million.
  We cannot continually cut imports by £569 million, and I think the fact that exports in volume declined by 6 per cent. in 1952 is a very serious matter. This is the sort of problem and the problem of the reduction in production of 3 per cent. to which the Chancellor should be addressing himself instead of doing a political confidence trick, as I believe this Budget was designed to achieve. I say, therefore, that this Budget is to be condemned in its general terms. There are, of course, features which we welcome. It is an affront to social justice and it is retarding the progress which we made towards a better society. It is also to be condemned because it does nothing to meet the very serious difficulties with which we are faced as a nation, and the problems which, although temporarily solved in the balance of payments position, will be here again before very long to be dealt with.
  7.35 p.m.
  Major Sir Guy Lloyd: I trust that the hon. Member for Sheffield. Park (Mr. Mulley) will forgive me if I do not pursue in combat with him the arguments which he has presented to the House. I must confess that I have listened with some admiration to the arguments which he and his hon. Friends have presented in their efforts to try to pretend to themselves—and I think they sincerely try to pretend to themselves—that the Finance Bill and the Budget, like the last Budget, are onesided. The fact that the benches opposite arc so thinly occupied now surely makes one think that the great indignation, which hon. Members opposite would have us believe they feel about what they

  653
  describe as this class Budget and this appalling class Finance Bill, is largely false pretence.
  Mr. Jay: But does the hon. and gallant Gentleman think his own benches at the moment indicate any great enthusiasm for the Bill?
  Miss Irene Ward: Certainly, we are in favour of it.
  Sir G. Lloyd: There is no necessity for us to be here because we are thoroughly satisfied with the Bill. Throughout the whole of today's proceedings I have sat here, and our benches have been considerably more occupied than those on the other side of the House. However, we will not waste time on that argument.
  First, I am full of praise for the Finance Bill and for the Budget which it represents and implements. I like the Bill, and the theme and motive of the Bill. I like the fact which many have not apparently noted, at any rate in their speeches, that the Finance Bill implements a very large number of the promises which my right hon. Friend the Chancellor gave during the progress of the Finance Bill last year. I think that is to be appreciated, and I should like it to be noted that I appreciate it. The Bill also implements a very considerable number of the Chancellors hopes and hints that he would be able to do certain things this year. The Bill contains a large number of those hopes and hints which have been translated into reality, and we welcome the fact that the Chancellor was able to carry out those ideas which he obviously had last year.
  Principally I like the Bill for the fact that it demonstrates the courage of my right hon. Friend himself. It is not a Bill that is designed to be popular, nor was the Budget before it. But my right hon. Friend took his courage in both hands, as is typical of the man himself, and he has shown to the country and to the House that courage is a good thing and always wins applause. In fact, it is always better for a Chancellor to be respected than to be popular, and the Chancellor is respected all over the House and all over the country for the way in which he has tackled the financial problems of the day.
  I want to refer to one or two items in the Finance Bill about which I am par-
  654
  ticularly pleased. I welcome the restoration of the initial allowances. I am delighted that the Chancellor is to give special assistance to mining developments abroad. I wonder whether he would consider, before it is too late, including all kinds of Empire development in this assistance. Those entering the field of Empire development labour under difficulties at the present time. My right hon. Friend is giving special advantages by the initial allowances in order to encourage this valuable work in mining developments. Why confine this special assistance to mining development? Why not let similar assistance be given to other activities of our traders in the Empire markets, especially in connection with new development?
  After all, the initial allowances are more of a loan than anything else and the Millard Tucker Committee Report, upon which the Chancellor has based many of the proposals in his Finance Bill and Budget, definitely suggested that, if the initial allowances were restored, they could be adjusted and could be differential in their effect. No doubt the Financial Secretary will have noted paragraph 305 of that report.
  I have a sense of disappointment because the Chancellor has not taken the opportunity to do what, for many years, so many people have suggested might be done in the Finance Bill, namely, tidy up Income Tax administration. Whether the Finance Bill relieves or imposes fresh taxation, successive Finance Bills undoubtedly bear increasingly harshly upon everyone, and especially on the small trader, whom one might call the merchant adventurer. These people, who are so representative of our nation, are almost snowed under by the Income Tax forms and statements which they have to fill in. And what a burden it is. Why cannot the Chancellor streamline the administrative side of the Revenue Departments and try to get for all taxpayers a single assessment of direct taxation to include all Schedules, and to have, if possible, one collection? It is like a jungle which every year gets worse, and the longer we delay clearing it up. the worse it becomes.
  You, Mr. Deputy-Speaker, might not be aware that Mr. Speaker is one of the

  655
  many who have to appoint the Commissioners who assess Income Tax. Along with Mr. Speaker is the Lord Mayor of London, the Governor of the Bank of England, the Governor of Broadmoor Asylum and other distinguished gentlemen who, in many cases I believe, do not realise that they have to do the job. In any case this position needs to be cleared up because it is mostly anachronistic.
  Over and over again promises or near-promises have been made by both Front Benches that this problem would be tackled. Agreement has been expressed with people like myself who have said much the same thing for many years, but nothing is ever done. We now have the Millard Tucker Report, and that Committee is still sitting and the Royal Commission on Income Tax and taxation will also report in due course. That will mean a further delay. I beg the Chancellor to consider seriously, before next year at any rate, whether he will not attack this jungle and clear away all the dead wood by streamlining the administration of our taxation collection and Inland Revenue Departments.
  While I welcome the fact that many of the sound recommendations in the Millard Tucker Report have been accepted and put into the Finance Bill, I would point out that there are some equally good ones which have not as yet been acted upon. I repeat "as yet" hopefully. Most hon. Members on all sides of the House are interested, as I am, in the welfare of the small trader and businessman who finds life very difficult these days as, indeed, he has found it ever since the war. There are many recommendations in that Report which would be helpful to him. For instance, it recommends that small businesses and professions should have an opportunity to qualify for the relief allowances. There does not seem to be much in the Bill to help in that direction.
  The Report also suggests that depreciation allowances might be given on all commercial buildings on the same lines as for industrial structures and buildings. It is a pity that the Bill does nothing in this respect. I hope that the Chancellor will give sympathetic consideration to that suggestion because it would assist a large number of people.
  656
  Many of us are disappointed, and we realise how disappointed are the small traders, that the Hutton Committee was unable to find means of relieving the serious disaster which occurs each year to the small traders owing to the fact that there is no compensation for taxed stocks when there is a fall in Purchase Tax. Many of them, of course, are sufficiently well off to digest this loss, but there are many others who find it difficult to get sufficient credit these days. Credit restrictions are hitting them hard, and many are at a loss to know how to survive the disaster of not being able to recover the losses on their tax-paid stocks.
  It is obvious that the Chancellor does not like Purchase Tax any more than we do. I hope and believe, therefore, that it is on its way out. As it is progressively reduced the small trader will find himself in a worse position every year. Even in January next year things are going to be very difficult for him, because people will say, "Why should we buy now? There will be a further fall in Purchase Tax in the Budget in April." So, from January to April, the small trader will be on the horns of a dilemma and will have great difficulty in keeping up his trade. If he has overstocked, and Purchase Tax comes down, as we have good reason to anticipate it will from now onwards, year by year, until it disappears—as I hope it will—the unfortunate man will be hit even harder still.
  I hope that the Chancellor and the Treasury, in spite of the Hutton Report, will think out ways and means of helping the man who is hardest hit and in a very serious financial situation as a result of falls in Purchase Tax. There are many such people, and it is no use saying that because some can afford to absorb the loss therefore all can. It is not true to say that all can. There are a great many who cannot, and they are deserving of sympathy. I hope that the Chancellor will give that point his very sympathetic consideration.
  Finally, though I do not know if this is directly concerned with the Bill. I urge the Chancellor and the Treasury to consider the effect which directives to the banks on credit restrictions to small traders is having upon them at present. Doubtless those directives were necessary when they were given—I have never disputed that—but surely they are not so

  657
  necessary today. If they could be lightened a little on the lower income groups—if up to, say, £5,000 credit could be allowed to those to whom it would mean everything at present—I cannot believe that it would have any serious effect on the financial and economic situation of the country. But it would be a great help to a large number of people who are at present suffering real hardship. I trust that the few words I have spoken will have the attention of those concerned when they read my speech in HANSARD.
  7.53 p.m.
  Mr. F. Blackburn: I hope that the hon. and gallant Member for Renfrew, East (Sir G. Lloyd) will forgive me if I do not follow him immediately in his remarks about Purchase Tax. I have certain remarks to make about Purchase Tax, but I should like to make them in my own order. The hon. and gallant Member would not expect me to follow a great part of his speech, which was a paean of praise to the Chancellor, and I am sure that the Chancellor would not expect me to do so either.
  I must refer to one speech made from the benches opposite this afternoon. It was a most fantastic speech, which I never expected to hear in this House. It must have been a great embarrassment to hon. Members opposite and will no doubt be a great source of quotation by hon. Members on this side of the House. I refer to the speech of the hon. Member for Orpington (Sir W. Smithers). He said that our people are financially and economically uninstructed. We quite agree that some people are financially and economically uninstructed, but I suggest he should take his first lesson in 20th century economics by reading the speech of the Chancellor of the Exchequer, made in November, 1951. That might bring the hon. Member into this century, instead of leaving him in the last.
  The present Chancellor must regard himself as one of the luckiest Chancellors of the Exchequer this country has ever known. I think that on this Finance Bill he is playing his luck—I do not know much about gambling, but I believe that is the correct term. I am certain that all hon. Members hope that his luck holds because it is so vitally important for this
  658
  country that we should not slip back any further than we did in the past year. The Chancellor has the consolation that if his luck does hold he will have the congratulations of everyone, and if it does not, being a Conservative Chancellor, he will be let down very lightly because he will have the whole Press of the country toning down the fact.
  This Finance Bill and the Budget can only be judged against the background of the external economic situation and our internal requirements. In his speech on the Second Reading of the Finance Bill last year, the Financial Secretary to the Treasury spent some time in dealing with the balance of payments position and the external position. Today he has said nothing about it. I do not know whether he is taking it for granted that the problem has been settled. I do not think that is the case, for he would agree that in spite of the improvement which has taken place in the balance of payments, the position is still very precarious.
  It is against that background that we have to consider the present position. I shall not deploy all the arguments used in Budget speeches about the recovery in our balance of payments position, but I think it important to stress at this time that it is against that position that we have to judge the Finance Bill. Our present position could so easily be upset. It has been said that if there is a slight recession in America it would have disastrous effects here. But we do not need to have a recession in America to have disastrous effects here. America only needs to continue or intensify her present policy.
  I do not think that any country ever had a more generous ally nor, from the economic point of view, a more difficult ally than the United States of America. We have some excellent speeches from leaders in America—speeches full of idealism, speeches which resognise the great problems of the world and provide many of the answers—but, unfortunately, those speeches are not carried into action. It is a case of "A President proposes but Congress disposes." I hope no one will suggest that because I have made those remarks I am anti-American. Certainly not. I believe it vitally important that we should have economic co-operation with the United States of America. I believe it vitally important that we should have

  659
  economic co-operation with all the countries of the world that are prepared to co-operate with us. But I also think it important to point out the dangers in the present situation.
  In any case, if I am to be accused of being anti-American because of the comments I have made, the responsible Press of America must be accused, as they are taking the same line. The "New York Times," on 2nd May, said:
  "The President has repeatedly indicated his understanding of the importance of a liberal trade policy. Only this week he went so far as to say that the very security of our country is involved in trade, as indeed it is. But from the general impression one has of the sentiment in Congress, particularly in the House, a good deal more than benevolent expressions of hope will be needed to prevent the destruction of our reciprocal trade program.
  If a measure anything like the protectionist Simpson bill is passed no pious platitudes will undo the damage done to this country's standing in the community of the free world. … We have seen a parade of special interests appealing for more protection. Representative Simpson has modified his original position, but the pressures are strong on Congress to add new restrictions to the already none-too-effective Reciprocal Trade Act."
  It is not merely a recession that we have to fear from America, but the intensification of the present policy. Consequently we must be more active in this country in the future than in the past in trying to divert trade from the dollar areas. In order to weather the variations in world economic conditions we must have in this country a strong and resilient economy. We must increase our production and our productivity. We must increase our exports. We must ask ourselves if the Budget and the Finance Bill create the right atmosphere for the attainment of these objectives.
  The Chancellor referred to his Budget as an incentive Budget, and that has been repeated this afternoon by the Financial Secretary to the Treasury. Incentive for whom? That has not been made clear. We must ask ourselves if the concessions have been distributed by the Chancellor in such a way as to inspire a feeling of equity, and at the same time produce the necessary results. At the time of the debate on the Budget an hon. Member opposite said he wished to remind hon. Members on this side of the House that it was important to have incentives for management as well as for workers. There is a corollary to that. It is
  660
  important to have incentives for those at the bottom of the scale as well as for those at the top.
  If we look at this Budget we find there is little that those at the bottom of the scale will get out of it. I wish to deal with one or two concessions—
  Mr. Gower: May I ask the hon. Gentleman what incentive he has in mind for a person who pays no tax at all and who has no obligations in the way of children?
  Mr. Blackburn: I do not think that the hon. Gentleman need have interrupted, because that point has been answered several times. In fact, it is possible that I may answer it to some extent when I refer to Purchase Tax. It can only be answered fully by dealing mainly with things which do not appear in the Bill but which could have been made possible by the Chancellor in his Budget. If he had money to spare there are other ways in which he could have distributed it.
  I was surprised that the Chancellor did not take off the duty which he placed last year on petrol and light hydrocarbon oils, and in this I am in agreement with one or two hon. Gentlemen opposite. I take it that the postbags of hon. Gentlemen opposite are somewhat similar to mine and that they have received numbers of letters about increased fares from transport undertakings, from local authorities and from individuals in their constituencies. The Petrol Duty was increased last year, and I think that the Chancellor might have looked favourably on its reduction. I admit that light hydro-carbon oils are a constituency point with me. Certain industries in my constituency are hard hit because of this high tax, and when a tax directly increases the cost in industry I believe that the Chancellor should examine it very carefully.
  My hon. Friend the Member for Midlothian and Peebles (Mr. Pryde) referred to the difficulties of the small cinemas. I received a deputation from cinema proprietors who put certain figures before me to indicate their present position. Those figures were so startling that I told them there was no point in overstating their cases, and that, if those figures were correct, they were existing at the present time on the sale of ice-cream. They

  661
  told me that they were not overstating their case, and that that was the position exactly; they were existing on the sale of ice-cream.
  I am not begrudging the Income Tax benefits which the Chancellor has given, but they are enjoyed chiefly by the professional man, by management and by industry. I would remind the House that the average worker and the average householder receive no benefit at all. The average wage of a man in industry and over 21 years of age was given in October, 1952, as £8 18s. 6d. He is the gentleman to whom the hon. Member for Barry (Mr. Gower) referred. He does not pay Income Tax and receives little benefit even from the few concessions on Purchase Tax. He receives no benefit on the main items of his expenditure.
  About the Excess Profits Levy and Profits Tax I have little to say. Most people expected this year that E.P.L. would go, and I think a good many expected that when it went the level of the Profits Tax would go back to what it was before the Budget of last year.
  Mr. Nabarro: I did not.
  Mr. Blackburn: The hon. Member for Kidderminster (Mr. Nabarro) did not. But he is always ahead of the news. I think that other people expected that that would happen.
  I welcome the new attitude of hon. Gentleman opposite toward capital investment. But what guarantee have we that the concessions which industry is getting now will be used for capital investment?
  Mr. Nabarro: Will the hon. Gentleman give way?
  Mr. Blackburn: No. The hon. Member for Kidderminster may have a chance to make his speech later, and he has interrupted every other hon. Member who has spoken from this side of the House.
  What guarantee is there that these concessions will go back into industry? I would remind the hon. Member for Kidderminster, and others, that before the war taxation was much lower than at the present time, but there was insufficient money ploughed back into industry.
  Mr. Nabarro: Now will the hon. Gentleman give way?
  Mr. Blackburn: No. I have not quite finished. I warn hon. Gentlemen opposite that while these tax concessions are being accepted at present there will be resentment and opposition from the workers if those concessions are used chiefly for increasing dividends.
  I wish to thank the Chancellor of the Exchequer for what he has done for amateur dramatic societies, but he must have overlooked the amateur operatic societies. It must be a mistake that he has not granted as much to amateur operatic societies as to the dramatic societies. I think that both the Chancellor and the Financial Secretary will agree that it is not enough merely to say that amateur operatic societies should have a paid conductor. I hope that the matter will be examined again.
  Regarding the concessions to cricket, reference was made this afternoon to one of the minor counties—Surrey I think—
  Mr. Gibson: Does not my hon Friend know that they are the champions?
  Mr. Blackburn: I must be behind in my reading.
  I think that everyone will welcome what the Chancellor has been able to do for cricket, but the right hon. Gentleman should not be surprised if, on the Commitee stage of the Bill, he is fired at from all sides by those who are interested in other sports. He will find an equally strong case can be made out for the football clubs in the smaller towns.
  I want next to make some comments about Purchase Tax. It is not a tax for which I can arouse any enthusiasm, not even the limited enthusiasm of some of my right hon. and hon. Friends. I think it has a value for the purpose for which it was originally intended—restriction of consumption—but I think it is an inequitable tax for necessities because it hits the old-age and other pensioners and those with lower incomes more than it hits the rest of the community.
  I will not quarrel with the reductions in Income Tax which have been made. Where the Chancellor feels that he is helping certain industries, I will not quarrel with him. I will not argue that those industries should not have that help. But I think a great mistake has been made in not giving further concessions to the textile industry.

  663
  Perhaps I may refer to a point which I raised last year concerning the tax on educational stationery. We all know of the rising rates; we all know that every local authority is having difficulty about the rates. Here is a small way in which the Government could help, for this Government must bear some responsibility for the present rise in rates. I hope I shall not be told by the Financial Secretary or the Chancellor, as I was last year, that it is difficult to distinguish between educational stationery and other stationery. In fact, it is perfectly simple because every educational authority in the country knows exactly what it spends on educational stationery, and the problem can be adjusted by means of a drawback.
  Reverting to the question of textiles, there is great disappointment in the textile areas that no concession has been given to the industry in this Budget. The right hon. Member for Blackburn, West (Mr. Assheton) was certainly not expressing the view of the textile areas when he indicated that they would be satisfied with what they received last year. They are certainly not satisfied. We are glad that there has been a certain recovery in the textile industry, but no one can yet say that the position is stable. Large numbers have left the industry, and home consumption has fallen over the past year. That is evident from the figures in the Economic Survey; clothing consumption is down by 3 per cent. and the consumption of household goods is down by 8 per cent.
  There is another very important point about the North-Western area; less alternative employment is available. If hon. Members study the figures they will find that in the North-Western area and, indeed, in the Northern part of the country generally, there are more unemployed than there are vacancies, whereas in the Midlands and the South there are more vacancies than there are unemployed. It is, therefore, important that areas in the North and North-West should be given what help is possible. I think that the textile industry still needs help and is worthy of help.
  The effects of Purchase Tax are felt not only in this country. I was interested this morning to read the Report of the
  664
  Parliamentary delegation which visited the West Indies. In speaking of the Leeward Islands they said:
  "As stated above, everything depends on two crops. Antigua, Montserrat, and in a lesser degree Nevis depend almost entirely on sea-island cotton…. Concern was expressed that purchase tax in Britain prevented an adequate sale of this specialised commodity…."
  The effect is felt not only here but also in the Empire.
  I want to conclude by expressing the keen disappointment of the textile industry. I will not go further into the question at present because there will be other opportunities, but, in my opinion, if concessions were to be given, the textile industry should have been in the forefront.
  8.15 p.m.
  Miss Irene Ward: I feel that this Finance Bill is a triumph for Conservative finance. I think that is also the opinion in the country. A great many of the provisions in the Bill have been most acceptable over a very wide field of interests. As I listened to the right hon. Member for Bishop Auckland (Mr. Dalton) booming his way through his speech on the Budget, I wondered whether he remembered the sequence of events.
  In my opinion this Government will be judged, when the time comes, on their ability to weather our financial difficulties. It was from that point of view that I listened to the speech of the right hon. Member for Bishop Auckland. He boomed along but forgot to say that when he left the Treasury and the late Sir Stafford Cripps became the Chancellor of the Exchequer, almost immediately Sir Stafford Cripps had to start to reverse the financial policy which had been operated by the right hon. Member for Bishop Auckland. All of us will agree, on whatever side of the House we sit, that Sir Stafford Cripps battled very nobly to try to save our financial stability, but events were too great for him and he had to devalue the £.
  I have listened to a great many speeches in the House, and read many speeches made in the country, by right hon. and hon. Gentlemen opposite. They have all referred—and here we have a great deal of sympathy with their point of view-to the difficulties of the lower income groups and the old age pensioners, but nothing did more damage to the lower income groups and the old age pensioners

  665
  than the financial policy of the late Socialist Government. It is true to say that devaluation of the £ had a profound effect on the situation of the lower income groups and the old age pensioners. It increased their difficulties, it increased the cost of living and it made their position almost intolerable.
  Then the right hon. Member for Leeds, South (Mr. Gaitskell) became Chancellor of the Exchequer, and he had to grapple with an ever deteriorating financial situation.
  Mr. H. Hynd: Hear, hear.
  Miss Ward: The hon. Member says "Hear, hear." I am delighted to know that he recognises that it was a deteriorating financial situation when the Socialist Government were in power—and they were in power with a very large majority. It is a fact, and it has been stated without fear of contradiction, that when the Leader of the Opposition decided to ask for a dissolution of Parliament and to go to the country the Socialist Government were faced with the worst balance of payments crisis that this country has ever known.
  Mr. Edward Short(Newcastle-upon-Tyne, Central): Why was that?
  Miss Ward: To a very large extent because of the very unsound financial policy which had been adopted over a period of years by the Socialist Government. The more we rub that in the better it will be, because it is one of the things which the people of this country can understand.
  The point I particularly want to make is that, when hon. and right hon. Gentlemen opposite talk about the position of the old age pensioners and people in the lower income groups, they forget that no one is more responsible than themselves for the plight of these people today. I want to refer to the reduction of the standard rate of Income Tax. Of course, it is true that if people are not paying tax they cannot be relieved, but it may be remembered by hon. Gentlemen opposite that, when the right hon. Gentleman the Member for Leeds, South had to increase the standard rate of Income Tax in 1951 from 9s. to 9s. 6d. in the £ he imposed that increase on all sections of the community, including the lower income groups.
  Mr. Jay: That, of course, is quite true, but, at the same time, my right hon. Friend increased the children's and family allowances, and, therefore, more people had the benefit of an actual reduction in taxation.
  Miss Ward: In fact, the Conservative Government's Budget last year, in very difficult financial circumstances, removed two million people, who had been brought into the scope of taxation by the party opposite, from the number of people paying tax, and these people were certainly subjected to tax by the late Socialist Administration. Therefore, the argument of the right hon. Gentleman does not hold water.
  The fact was that the party opposite increased the standard rate of Income Tax for the lower income groups. It is true that the Chancellor can cushion a certain number of people by making additional Income Tax reliefs and I am not denying that, but the fact is that many people who live on fixed incomes, retirement pensions and small investment incomes—spinsters, bachelors, widows and widowers—all had to bear that increased rate of Income Tax, and, therefore, the right hon. Gentleman's argument is not valid.
  Having paid my tribute to the Conservative Chancellor of the Exchequer, quite naturally, being extremely independent, I want to raise one or two matters in which I am particularly interested and to which I hope the Chancellor will pay attention. I am not going to say a very great deal about our disappointment that no step was taken to implement our pledge to make a beginning with the application of the rate for the job. I know it will come.
  Mr. Gibson: You hope.
  Miss Ward: I do not only hope, but I am pretty certain that we shall do better than the late Socialist Administration.
  Mr. GibsonThere is no sign of it yet.
  Miss Ward: I know the reason why the Chancellor did not make a start on implementing that pledge, but I want to remind the Financial Secretary that, if wage increases are awarded by arbitration, then I shall come along with Parliamentary pressure, and I hope that note will be taken of it.

  667
  I want to come now to what is to me the most important point of all in this speech. I am going to say something specific and definite about the lower income groups. I note that, in his Budget speech, my right hon. Friend the Chancellor opened a very important paragraph with these words:
  "We can now leave the realm of administration and come to some matters of more human interest."—[OFFICIAL REPORT, 14th April, 1953; Vol. 514, c. 57.]
  Then he referred to the question of age relief in respect of the incomes of people who have reached the age of 65. As, along with a number of my hon. Friends on this side, I have taken a very great interest in this matter, I had hoped that we were really going to have something solid and substantial, but all that the Chancellor was able to do was to increase the income limit from £500 to £600. That concession, for which, I have no doubt, a great many people are very grateful—
  Mr. Douglas Houghton: Will the hon. Lady permit me? She will appreciate that, with the tapering arrangement, the £600 level of income in the age group has some relation to incomes up to very nearly £1,000 a year.
  Miss Ward: That may very well be so, and I quite appreciate that angle of the matter, but that is not the point I was going to make. It is that that concession, in fact, refers only to investment income, because it puts it into the category which attracts earned income relief, but that concession does not touch people who are drawing pensions, either from the State or through superannuation schemes, because they have already come into the earned income category. Therefore, that concession is a very restricted one indeed.
  I think the position of these people is quite intolerable. I hope that my hon. Friend the Financial Secretary will give me his attention, because I want him to appreciate the point I am making. The position of these people living on small incomes is quite intolerable. When I hear about all these discussions on the cost-of-living index and the like, I want to ask the Financial Secretary—he may not want to tell me the answer today, but he can do so on some other
  668
  occasion—whether he is aware that people buying coal in small quantities have to pay a higher price than people who buy coal in relatively large quantities.
  The point is that the small income groups, the old age pensioners and the Tike, buy coal in bags. They cannot even stock up at summer prices because they have not the cellars or other accommodation even if they had the money to do so. Therefore, they lose on both counts. I would point out to hon. Members opposite that nationalisation did not help because, in my opinion, the increase in fuel costs—
  Mr. Deputy-Speaker (Mr. Hopkin Morris): I do not think nationalisation arises on the Finance Bill.
  Miss Ward: No, Mr. Deputy-Speaker, it does not, but what I am asking is whether the price of fuel comes into the cost of living index. It may not come into the Finance Bill, but I have heard people talking about the cost of living and I have listened to all the speeches today in which it has been mentioned. All I am saying is that the small income groups have to pay more for their coal and that whenever a rise in the price of coal takes place they are penalised more than the rest of the community. I think that aspect of the situation needs being put on record. It is intolerable.
  Having said how disappointed I am with what the Chancellor did about that, I come to another point. The argument is always advanced that when the food subsidies were withdrawn the Pensions (Increase) Act took care of the rise in the price of food. I think that is a fair argument, but the point is that the people in the small income groups, those living on Civil Service or teachers pensions, on railway superannuation, on pensions from banks and on Service pensions, have hardly received on the general position any help at all. I have never been happy at the fight we had to put up with the Treasury before they agreed to increase Service widows' non-attributable pensions. I do not think that that fight reflected credit on anybody.
  During the war we began to expand the social services, educational facilities, resulting from the 1944 Education Act, housing subsidies, the health services, hospital services, maintenance grants at

  669
  universities, family allowances and very substantial Income Tax reliefs. It is important to bear in mind that a man and wife with three children on an income of £700 a year pay an infinitesimal amount in Income Tax.
  A great deal has been done to make life reasonably fair and to give genuine incentives. We have provided free milk and school meals and have done a very great deal for the mass of the people of this country. But nearly all the people who were covered by the Pensions (Increase) Act had their pensions fixed on a pre-war income. They are, therefore, trying to eke out a most unhappy existence in a post-war world on a pre-war income.
  Is it quite fair that the people living on small incomes whose pensions are based on pre-war incomes should have to contribute in direct taxation to people coming after them who receive the benefits of increased pay, increased social services and increased allowances of one kind or another? I know, of course, that when one puts the general case, the Chancellor will make very sympathetic reference to these people, but, personally, I am tired of sympathetic references. I want action.
  I say quite definitely that with the increase of rates and the increase in the price of fuel, lighting, and transport these people have not sufficient either to feed themselves or to look after their houses properly or even to have a little amusement in life which I think is very important when one is getting old. It is important that one should be able to go about a little and meet one's friends.
  I know that they are a very difficult class to deal with. Is there any reason why a single man or woman with an income of £200 a year should have to pay £4 18s. 6d. in Income Tax, or with £225 pay £6 17s. 6d., or with £500 a year pay £56 12s. 2d.? Married couples without children have to pay £2 18s. 4d. on £300 a year and £7 15s. 6d. if they have an income of £350 a year. People living on those small incomes ought to be relieved entirely of taxation.
  I have a letter from the Chancellor in regard to the proposal I made that people aged 65, or 60 if you like, on small incomes under £250 a year should be freed from taxation. He said in his letter that my proposal meant that only single
  670
  people would be affected. That may well be, so I just go one step higher and say that the Chancellor could quite well put that right. He could include married couples by making a differentiation, as is made in National Assistance, between single and married and could give some additional Income Tax reliefs to elderly married couples at the age of 65.
  It is absolutely urgent that this section of the community be dealt with. I cannot speak more strongly and with greater feeling. It is intolerable that they should be left the way they have been. The only party that can and will do anything for them is the Conservative Party. Of that I am quite convinced.
  The increased allowances in respect of dependent relatives has given very great satisfaction. I am very glad the Chancellor did that. Many people warmly welcomed it. The other point is the increased housekeeper allowance. I find it very hard to understand why widows and widowers are entitled to housekeeper allowance, irrespective of their circumstances, while even elderly married couples who may have just as much need of support and care, do not get the allowance. Neither do spinsters and bachelors who may be at work, and have commitments of one kind or another.
  This is a great injustice, which has rankled for many years among the affected sections of the community in this country. I did not press for an alteration last year because I thought the subject would be dealt with by the Royal Commission on Taxation, and I have no doubt it will be; but when the Chancellor increased the allowance to widows and widowers and failed to bring in elderly married couples, spinsters or bachelors, I remembered that the Economic Secretary and the Financial Secretary to the Treasury, as well as the Chancellor, voted for it when we were in Opposition. I was absolutely staggered that my right hon. Friend did not take steps to do in Government what he supported in Opposition. [HON. MEMBERS: "Hear, hear."] I like to be outspoken.
  I like justice. I find that all these sections about whom I have spoken tonight have had very little consideration and are having a most abominable kind of life. I realise from my post-bag just how bad their circumstances are.

  671
  They have no trade unions. They have no manufacturers behind them, no Federation of British Industries and no British Legion. They have no organised body to make a case for them, and therefore they are forgotten.
  I beg the Chancellor to look at the position of these people and consider whether it is fair to ask that out of their meagre, insufficient incomes to deal with post-war life, they should pay contributions in respect of other people whose incomes have been raised satisfactorily to meet the difficulties of the post-war world. I am quite certain that if the Chancellor will look at the problem from that angle he will be able to do something before very long to relieve these people.
  I believe that the Budget is a triumph for Conservative finance. [Laughter.] To the jeering hon. Members opposite I make the point and I beg them to listen to it, that if it had not been for the Conservative Government there would not have been any finance at all. I plead therefore with a Chancellor who has the finance as well as the heart to make the rectifications for which I have asked.
  8.42 p.m.
  Mr. G. A. Pargiter: The hon. Lady the Member for Tynemouth (Miss Ward), like most of the speakers from the other side of the House, has paid some lip service to the Finance Bill and the Budget. Hon. Members opposite have damned it with fairly faint praise and have been much more pressing in their criticism than their praise. Yet this is the Bill which is being held up as the wonderful production of a Tory Chancellor.
  What is this Finance Bill? In spite of the fact that the Chancellor was shockingly wide in his estimates as against returns, by fortuitous circumstances, very largely by the alteration in the terms of trade in our favour, and as a result of a slackening in the economy, the right hon. Gentleman found himself in a position to distribute a certain amount of largesse. It was the first time that a Chancellor had been able to do that since the war.
  Let us look at the way in which a Tory Chancellor does the distribution and consider how we might reasonably have expected him to do it if he had had in
  672
  mind the principles which, he professed, constituted the object of the Budget. The Budget was supposed to be an incentive Budget. We proceed, therefore, to the initial allowances. That would be right and proper, because it would permit people to renew plant and equipment rather more readily than otherwise they would do.
  Next, there is Purchase Tax; but how does that reduction work? Buyers at the top range have a reduction of 25 per cent, those in the second range have a reduction of 16⅔ per cent. and those who buy in the lowest range have a reduction of only 8⅓ per cent.; and the third range covers those things which most nearly affect the general public. So the actual benefit is in that order—25 per cent. in the top range, 16⅔ per cent. in the middle range and only 8⅓ per cent. in the wide range of goods used so largely by the housewife and the general public.
  That seems to me scarcely the right form of incentive. It certainly seems an incentive to those who have the most, as usual, to get a little more, because they will pay less for their goods. It might be argued that these provisions might have some bearing on the continuance of old crafts in the gold and silver trades, but we have been told that in any case the amount involved is quite insufficient to achieve that. I am not at all sure, therefore, that the Chancellor will receive any credit for his action from those who are concerned with the production of that class of article.
  Let us look at one or two things which the right hon. Gentleman might have done if he had been concerned with the question of incentives. Instead of reducing the standard rate he might have widened the three bands of Income Tax to a considerable extent and embraced the whole of the medium income ranges in order that they could have some substantial benefit from the reduction. It is the Surtax payer who will reap the greatest advantage, and the man with a small income who will reap the smallest advantage from this reduction. Had he chosen to widen the range of the three bands, the Chancellor could have given a much better incentive to the people as a whole.
  He might have taken Purchase Tax off commercial vehicles. I have always opposed this aspect of Purchase Tax as

  673
  being a tax on capital goods, and I have never thought that much could be done by taxing capital equipment. I appreciate that when it was introduced purchases of vehicles were running at a very high level, to the detriment of overseas trade, and the Chancellor of the day— against my wishes—decided to introduce it. Purchase Tax has been reduced to 25 per cent., but the position with regard to the commercial vehicle manufacturing industry is that there is now no need to keep Purchase Tax to prevent buying in this country, because we want more and not fewer vehicles bought at the present time. The Chancellor might have used some of the money he had available for that purpose.
  He might have reduced the fuel tax; not necessarily the Petrol Tax. If he did not want to give anything to motorists, well and good, but he could have reduced the tax on fuel oil, because by doing so he would have benefited heavy industry and public transport services, and the general effect would have been to reduce the general burden on industry. But he has chosen not to do that. We are still groaning under the increased burden which the last Budget placed upon us.
  Nothing has been done about post-war credits. It would have been reasonable— perhaps with a ceiling of about £100— to have paid out widows by cashing their husbands' post-war credits. That would not have been a very heavy burden on the economy. I ask the Chancellor to consider whether that would have imposed any great burden on the Exchequer or have had a very inflationary effect on the company. Something could have been done, and it is time it was done.
  With regard to the general level of prosperity, we should consider whether we are really so prosperous as hon. and right hon. Gentlemen opposite would have us believe. What is the position with regard to national savings? They form a very good index of the financial position of the mass of the people. Month after month since this Tory Government came into power there have been successive reductions in the amount of national savings. There is no question of new savings now; the old savings are being taken out because people are having to live on their savings. The old people and the poorer sections of the community can no longer make ends
  674
  meet, and when their savings are gone they will be in even worse difficulties That is an undoubted fact.
  Let us now consider how far this Finance Bill and the financial policy being pursued by the right hon. Gentleman really deal with the problem of this country's trade. I want to consider particularly the engineering trade, which is a vital one. There we find a most disturbing threat to the balance of the trade. Not only has there been no increase in the overall volume of production but there has been a shift. Whereas in the previous year—according to the Economic Survey—one-twelfth of the engineering trade was devoted to defence, as much as one-eighth was devoted to that purpose during the past year, and the amount is probably still increasing in proportion. That may give us certain advantages in the balance of trade in the form of off-shore purchases by America. They have a considerable effect on the balance of trade at the moment.
  It is concealed, not direct, aid. We supply France, Germany, Belgium, and other N.A.T.O. countries with certain defensive weapons, and America says, "Very well, Britain, you produce these weapons and we will pay for them." That is all very well while it lasts. What happens if America suddenly withdraws that form of help, as she may? While we are making these things at the expense of making things for overseas markets the Americans are stepping into those overseas markets. These are serious facts. and there is nothing in the Bill to give an incentive to rectify that position.
  I ask the Chancellor to address himself to this problem seriously, because engineering is the key to the whole export problem. If we devote more and more to defence and to selling our arms for dollars, our economic position generally will, in the long run, be worse. If we find, as I hope we shall, that the demand for armaments falls off, our position will be worse, and America's will be relatively better, because America is maintaining her domestic industries and exports while maintaining a gradually reducing armaments programme, balancing this with off-shore purchases. I ask the Chancellor to find ways and means to deal with this problem of incentives for the normal type of export work, for heavy engineering products and products of that sort. Let

  675
  him give all the facilities he can for the production of capital goods and consumer goods for export.
  Whatever may be said about the Budget's benefiting all classes, the number of applications for wage increases already made and coming in indicate that the workers of this country are not accepting the Budget as being to their advantage. They see the bulk of advantage going to those who are better off than themselves. It is perfectly natural, and one could not expect otherwise, that they should say, "As all these advantages are going to the higher income groups through Income Tax concessions, we are entitled to seek increases of wages." That is the natural response.
  There will be a considerable amount of trouble in industry unless something is done about it. Unless concessions are made to help the lower income groups the Chancellor may have to face an upset in the economy due to increased demands for wages to meet what is a constantly rising cost of living. The local election results show, I think, that the only incentive in the Budget is an incentive to vote Labour. I hope that the Chancellor will take note of that.
  8.53 p.m.
  Mr. Gerald Nabarro: The hon. Gentleman the Member for Southall (Mr. Pargiter) followed the theme of so many of his hon. Friends in both this debate and the Budget debate, that this is a rich man's Budget. There is a national newspaper which has as its motto, "Forward with the People." It is a Socialist newspaper. It boasts proudly of that fact. While I do not wish to make a controversial speech, it is pertinent to quote from that newspaper of 18th April to see what it had to say about the Budget that so many hon. Gentlemen opposite have found cause severely to criticise. This is what it says, under the headline, "Come on Labour":
  "Most Labour speeches against the Budget have been heard. The attack is not very convincing. It has a routine sound. The mass of the electorate will not be roused by calling the most generous Budget since the war an unjust Budget, or a political one. Why the fury? Wherefore the grief? Whom has Mr. Butler hurt? He has hurt nobody at all. He has given a lot of people something. Even those who don't benefit by the income tax cut will benefit from the move to bring down prices and check the rising cost of living. Politics apart, the public approve."
  676
  It finishes with this remarkable sentence:
  "There used to be a song that said something like. 'Look at the mourners—bloomin' well mourning.' If Labour doesn't sit up soon, folk will think it must be the corpse."
  From the party political point with which I commence this speech, I should like to pass to matters of more general and greater importance, namely, the effect which my right hon. Friend's Budget proposals will have on industrial production. He is to be complimented in his Finance Bill with proposals for a sort of fiscal quadruped. I believe that the four legs of that quadruped must be judged in the aggregate and in conjunction with one another.
  Mr. Manuel: A donkey.
  Mr. Nabarro: A donkey is one form of quadruped, but a much faster one from the production point of view is a filly. The four legs of this quadruped are: First, the reduction in the standard rate of Income Tax; second, the provision of initial allowances on a slightly smaller scale than those operating between 1949 and 1951; third, the early demise of the Excess Profits Levy; and, fourth, in the production field, the decision to give an overall standard reduction of 25 per cent. in the rate of Purchase Tax.
  That fiscal quadruped should be a fleet and virile filly, and not a donkey, as the hon. Gentleman suggested. It is a filly carrying a much lighter mount and, in view of that, is much more likely to succeed in the race for better and faster production.
  A great deal has been said in the course of this debate about the effect of the Purchase Tax reduction. I am, for my part, delighted that my right hon. Friend has not pursued the habit of earlier Chancellors by discriminatory tinkering with the tax on this or that article. What is wanted, surely, is to get rid of this pernicious tax. There is unanimity on that point, and I hope that my right hon. Friend regards the 25 per cent. reduction this year as a precursor to further similar reductions which will have the effect of eliminating the tax altogether before this Conservative Government passes from office in 1956.
  The second point to which I want briefly to allude is the reduction of 6d. in the standard rate of Income Tax. Two hon. Members on the benches opposite

  677
  have mentioned in speeches this evening that the reduction in the standard rate of Income Tax will not necessarily lead to larger sums being ploughed back for the development, modernisation and re-equipment of industry. They suggest that the reduced amount of tax will result in bigger dividends.
  On the contrary, industrial profits are going down—not up. Industrial profits in the last year of Socialist Government in 1951 were returned at £3,275 million and in the following year they had been reduced to £3,128 million. In an earlier intervention in a speech from an hon. Member opposite, I had occasion to say that in a harshly competitive world British business, commerce and industry today is much more concerned with sustaining its resources, with ploughing money back for its expansion, than by dissipating funds in the form of substantially increased dividends.
  Mr. Manuel Mr. Manuel rose—
  Mr. Nabarro: I am not going to give way to the hon. Gentleman. He has been here only 10 minutes all day. I believe the 6d. reduction in the standard rate of Income Tax is one of the essential encouragements that my right hon. Friend could give to the affairs of companies in relation to re-equipment. There is nothing that need be said about the demise of the Excess Profits Levy other than that I have no doubt that parties next New Year's Eve will be much happier and more convivial in business circles than they have been for years past.
  I wish to devote the remainder of my speech to the question of initial allowances—
  Mr. Manuel: Before the hon. Gentleman leaves that point—
  Mr. Nabarro: I am not going to give way to the hon. Gentleman. He has been in the Chamber only a few minutes.
  Mr. Manuel: I have been here a long time today. The hon. Member will not get away with that. He cannot come here with his loose talk.
  Mr. Deputy-Speaker (Sir Charles MacAndrew): Order.
  Mr. Manuel: On a point of order. Might I have some guidance from you, Mr. Deputy-Speaker? When an allega-
  678
  tion is made about me which is grossly untrue—that can be substantiated by my hon. Friends—what redress have I in getting the truth put before the House?
  Mr. Deputy-Speaker: That is not a point of order. I keep a record only of the times at which hon. Members speak, not of the time they are in the Chamber.
  Mr. Nabarro: The initial allowances which were introduced in 1945 formed a very important part of the fiscal proposals of the then Chancellor, Sir John Anderson. Briefly, as has been recounted earlier, a 20 per cent. allowance was given for plant, machinery and equipment, only 10 per cent. for mining exploration and only 10 per cent. for industrial buildings. In 1949 Sir Stafford Cripps, then Chancellor, doubled the rate in respect of plant and machinery to 40 per cent., but left the other provisions where they were. The right hon. Gentleman the Member for Leeds, South (Mr. Gaitskell) abolished the arrangement in 1951.
  They have been re-introduced this year, and though I favour them, I am not very enthusiastic about them. I believe that, at best, they are only a palliative to relieve two very difficult problems in industry. The first is that they help in the acceleration of capital account purchases, which must help re-equipment in the course of the next few years and, secondly, I suppose they give temporary financial aid to bridge the widening gap between the historical cost of assets and the very much inflated cost of replacement.
  Perhaps the "Economist" in an article on 18th April, entitled "The Turn of the Fiscal Tide," gave the best account of the effect of these allowances when it said:
  "Though the initial allowances are of real value to industry, they are, as has so often been pointed out, no more than an interest-free plan, since whatever is gained in the early life of a piece of capital has to be repaid in the end"
  I believe that the objective of initial allowances today in achieving the ends that my right hon. Friend has in view can be fulfilled only if a much greater degree of selectivity is applied to the allowances.
  It is interesting to read what Sir John Anderson said when he introduced the allowances as Chancellor in 1945. On

  679
  the Second Reading of the Income Tax Bill of that year he said:
  "I propose to the House that we should, as an act of conscious policy, deliberately weight the scales in favour of those forms of capital investment which are most necessary to the industrial strength of the community. It is productive or creative industry that provides in the main industrial employment and is the foundation of our national prosperity. It is the production of things and the export of things rather than the distribution at homes of things that matter most in this connection."—[OFFICIAL REPORT, 14th March, 1945; Vol. 409, c. 259.]
  Sir John Anderson was then pleading for discrimination in the application of these allowances, and I believe it is of over-riding importance today that we exercise a greater discrimination. For instance, my right hon. Friend proposes an allowance of 10 per cent. for industrial buildings. I do not believe that that is particularly helpful. The value of the plant, machinery and equipment that goes inside an industrial building is five to 10 times as great as the value of the fabric of the building itself, and what we are concerned with in expanding production is essentially the performance, the modernity and the competence of machine tools and similar classes of equipment which are inside the building.
  I would not grumble if a 10 per cent. on buildings was washed out altogether. In the 20 per cent. class, I believe there is a good deal of room for more selectivity. It is interesting that the right hon. Gentleman the Member for Batter-sea, North (Mr. Jay) wanted to exclude motor cars from the 20 per cent. initial allowances for Income Tax purposes. I want to exclude them as well, but for an entirely different reason to that of the right hon. Gentleman. He is referring to the managing director's Rolls Bentley.
  Mr. Ellis Smith: He is right.
  Mr. Nabarro: That includes the senior executives of the nationalised industries who have the same kind of cars.
  Mr. Ellis Smith: Tell us one.
  Mr. Nabarro: My reason for so doing —and I ask my right hon. Friend the Chancellor to have regard to this point— is that the allowance on motor vehicles for the purposes of wear and tear is already the most advantageous of any
  680
  piece of industrial equipment. For instance, the motor lorry or the motor car already depreciates on the reducing balance at the rate of 25 per cent. per annum. This fully depreciates them in a period of approximately five years and, if one puts on an extra 20 per cent. initial allowance it means that 45 per cent is granted in the first year. Personally, I think it is too much, and I prefer to omit such vehicles from the initial allowance provisions.
  I suggest the elimination of the 10 per cent. on industrial building and 20 per cent. on motor vehicles as a whole but, on the other hand, a new category introduced in the 40 per cent. bracket—and this is of the greatest importance— namely, the encouragement of the installation of certain coal and power economising equipment in industry.
  The right hon. Gentleman the Member for Battersea, North did not run a new hare this evening. He will remember his hon. Friend the Member for Brig-house and Spenborough (Mr. J. Edwards), who was Economic Secretary to the Treasury, replied to me from this side of the House on 8th June, 1951, when the entire Conservative Party, together with the entire Liberal Party—[HON. MEMBERS: "Oh."]—yes, there were nine of them then—were pleading for the retention of the 40 per cent. allowance on this class of equipment in view of the difficult coal position. We were defeated in the Lobbies by the Socialist Party on a decision made by the right hon. Gentleman the Member for Leeds. South.
  I hope we are not going to introduce party politics into coal conservation matters. We may have a legitimate difference of opinion as to whether there should be an inquiry into the structure and administration of the National Coal Board, but there is not much difference of opinion in this House on the urgent need for conserving coal in industry. I know that I carry the majority of hon. Gentlemen with me on that account.
  My right hon. Friend's Budget depends for its success on an increase in industrial production. He cannot get that increase without an increase in coal production. This year we lose 4½ million tons of coal as a result of the extra miners' holiday of two weeks instead of one, and on account of the Coronation holiday. There is little progress towards

  681
  making good that potential loss of 4½ million tons. My right hon. Friend the Minister of Fuel and Power sent me down these figures at the beginning of the week. In the 17 weeks to the 2nd May, 1953, coal production was 73,106,800 tons; in the same 17 weeks of 1952 the figure is 72,625,800 tons. There is an increase in 1953 compared with 1952 of only 481,000 tons.
  Pro rata in the full year there will be a loss as a result of these holidays, even taking into account the slightly increased production continuing, and there will be a shortage of three to four million tons compared with 1952. In addition to that, if industrial production as a whole increases in accordance with my right hon. Friend's aspirations the coal shortage next coal winter will be to the order of 10 million tons.
  Mr. Ellis Smith: The miners cannot be blamed.
  Mr. Nabarro: I am not imputing blame to anybody. I am stating facts, and I would remind my right hon. Friend that a 10-million ton coal shortage, which is a figure that I assert this evening with conviction and sincerity, in the next 12 months, means the total elimination of all United Kingdom exports of coal. The Ridley Report stated in powerful terms that it was essential to do two things in industry—not only to improve and enlarge the Industrial Fuel Advisory Service for saving coal, but also to bring in some sort of financial incentive to install the necessary economising equipment.
  My right hon. Friend the Minister of Fuel and Power thereupon set up still one more Committee, the Pilkington Committee, to advise how the Industrial Fuel Advisory Service was to be formed. The Pilkington Committee sent its Report to the Minister of Fuel and Power on 31st March, 1953. That Report has not been published yet, and I shall therefore not quote from it in detail, but one of the essential points—
  Mr. Thomas Oswald: How did the hon. Member get the Report?
  Mr. Gibson: He has got his M.I.5.
  Mr. Nabarro: The hon. Member asks how I got it. I have been sent suitable excerpts for the purpose of this speech.
  682
  The Committee makes this very important point, that it is futile to endeavour to improve—
  Mr. Pryde: On a point of order. I have no hesitation in joining in any issue relating to coal, but I should like to know exactly how this speech of the hon. Member for Kidderminster (Mr. Nabarro) links up with the object of the Finance Bill.
  Mr. Deputy-Speaker: I think it is quite in order.
  Mr. Nabarro: Thank you, Mr. Deputy-Speaker. I prefaced this part of my speech by pleading for a 40 per cent. initial allowance on certain classes of industrial fuel saving equipment. The seriousness of the coal position at this moment must surely be a justification for it. I can understand that the hon. Gentleman does not like to recognise that we are not producing enough coal, but that is the fact.
  Mr. Pryde: I have had more experience of the pits than the hon. Member.
  Mr. Nabarro: It is futile, according to the Pilkington Committee, to establish a greatly enlarged and improved fuel advisory service for industry unless there is some financial or fiscal incentive provided.
  Mr. Arthur Palmer: On a point of order. Is it in order for the hon. Member to quote from a Government paper which has not been published and which is not before the House?
  Mr. Deputy-Speaker: I understand that it is not a Report of a Select Committee, so it is quite in order.
  Mr. Nabarro: Thank you, Mr. Deputy-Speaker. I plead with my right hon. Friend that before we reach the Committee stage—
  Mr. Deputy-Speaker: What is this Report? Is it a Report to the House of Commons?
  Mr. Nabarro: No, Sir.
  Mr. Deputy-Speaker: The hon. Member is therefore in order.
  Mr. Nabarro: It is not a Report of this House: it is the Report of a Committee which was set up and it is, there-

  683
  fore, perfectly in order for me to quote from it.
  Mr. Manuel: As I understand your Ruling, Sir Charles, this Committee was set up by a Minister responsible to this House, and in due course the Report will be presented to the House. Surely before it is before the House we cannot have a Member receiving certain parts of it while other Members do not have it?
  Mr. Deputy-Speaker: I understand that the Report will be made to the Minister and not to the House. Therefore, the hon. Member is in order.
  Mr. Nabarro: I am grateful to you, Sir Charles.
  May I wind up this point by saying that I believe my right hon. Friend should endeavour to introduce deliberate discrimination in the application of these varying rates of initial allowances for Income Tax purposes, and that whereas industrial buildings and motor vehicles should be cut out from the 10 per cent. and 20 per cent. brackets respectively, industrial fuel economising equipment of certain specified types should be inserted in the 40 per cent. bracket. In the next year or two that should make an important contribution to balancing our coal budget, without which it will be impossible for my right hon. Friend to balance his financial Budget.
  9.15 p.m.
  Mr. C. W. Gibson: The hon. Member for Kidderminster (Mr. Nabarro) started his speech by quoting a newspaper which he said was a Socialist paper and which appeared to praise the Budget. First, it is not a Socialist paper and is not a Labour Party paper; and, second, a day or two later it took a different line altogether from that in the editorial which the hon. Member quoted.
  Having said this was not a rich man's Budget, the hon. Member proceeded to make a speech in the whole of which he was engaged in trying to squeeze more out of the Chancellor, if he could, for the rich business interests of this country. There was not a word about the people mentioned by his hon. Friend the Member for Tynemouth (Miss Ward) in her speech. Had she been present, I should have liked to congratulate her on her interest and concern for earners of low wages and those living on fixed incomes,
  684
  who are getting nothing out of this Budget. I thought she made the Labour Party case completely by exposing the fact that there was no relief and no incentive at all for those on old age pensions and fixed incomes of pre-war value. I heartily agree with her plea that something should be done for them.
  The hon. Member for Orpington (Sir W. Smithers) made a speech of which, fortunately, his own Front Bench will not take any notice. In the course of his speech he made reference to Mr. Arthur Deakin as having said something which supported his point of view. I felt it wrong that that should be allowed to pass without being corrected. In fact. Mr. Deakin has expressed the unanimous view of the trade union movement that this is a bad Budget which the Trades Union Congress cannot support. In the current issue of the journal of his union, published only a couple of days ago, Mr. Deakin said:
  "In broad outline the Budget represents a further withdrawal from the policy of income re-distribution, which was followed during the war years, and the period when the Labour Government was in office. This is a matter of grave concern to our Movement. To argue that incentives are necessary to those who run industry and come within the higher income level groups, without giving consideration to those in the lower income groups, is not helpful at this time."
  That is the kernel of the criticism which we make of the proposals contained in this Bill. The Measure does not provide incentives for the mllions of trade unionists. They get nothing out of it, and it is no answer to say that there has been a reduction in Purchase Tax, which would give them something.
  First, none of the D scheme goods have benefited by any reduction in Purchase Tax. Most of the other goods benefiting from Purchase Tax reductions which would be bought by the average working-class family are not bought every day in the week, as food has to be. It is the rise in food prices which is hitting every working-class family in the country. I believe that today's election results will show that, far from the people of this country believing that this Budget and this Government are good for the country, the very opposite is the truth.
  The Financial Secretary said, in opening his speech, that the major purpose of the Budget was to fit the country

  685
  for the economic struggle. It is true that we are in for a fierce economic struggle. It is probably true that the nearer we get to peace in Korea the fiercer that struggle will become. But I cannot see any evidence that the Tory Government have done anything to help to prepare the country since they have been in office.
  There are more unemployed now than two years ago, although it is true that the figures have improved a little during this last month. Many thousands are working on short-time and living on short-time earnings. There has been a big increase in the cost of foodstuffs, and according to yesterday's newspapers, there will be an 8d. increase in the cost of corned beef. Goodness knows the length to which other prices will rise before this Government have finished putting foodstuffs on a free market.
  I say that the Budget fails to give any incentive to the people upon whom the economic success of this country really depends. The speech of the hon. Member for Kidderminster will not provide much encouragement for the miners, or the men who work in the factories, or the shop workers and transport workers. If we cannot gain their confidence, and make them feel they are getting a fair deal, we cannot increase the production of wealth in this country. The fact is that during this last year there has been a drop in the overall production of wealth in the country.
  My fear is that, so far from leading to such an increase, the effect of this Budget on millions of people who will get nothing out of it will result in the very opposite. If that happens it will not matter if we balance our international trade completely, or if we get a big balance on the right side. We have had that before in the history of this country, and at the same time we have seen millions of men and women out of work. There has been terrific poverty in London on occasions when economically we were doing well internationally.
  Members of the Tory Party do not realise that there has been a complete change in the economic thinking of the mass of the people. There is a complete economic change coming over this country and the world, as indeed this
  686
  Government may have discovered, because they have had to buy sugar by bulk purchase. They have had—and will continue to have—to negotiate through international machinery for the purchase of wheat. They will find that more and more there will have to be international commodity agreements and negotiations in order that we can get the foodstuffs and raw materials which this country needs.
  There are proposals in the Finance Bill for the abolition of Purchase Tax on taxicabs. The Chancellor of the Exchequer has justified that in his Budget speech as a proposal which will assist both owners and drivers. That is completely wrong. Anyone in the industry will agree that merely taking the Purchase Tax off cabs will not solve the problems confronting the taxicab industry. Speaking at all events for the drivers, I can say that something much more drastic must be done. It will be no use raising fares again, because that will further reduce the amount of business being done.
  The only thing which will ease the position is for something to be done about petrol charges. I admit that that is a very difficult proposition, but the alternative would seem to be the gradual elimination of a service in London which, although I do not find it useful because I seldom use taxicabs, is widely used, and will probably be used a great deal more during the Coronation period. I wish, therefore, to beg the Government to see whether, during the course of the Finance Bill, they can do something more to assist those concerned on both sides of the London taxicab industry.
  They must take into consideration not only the recommendations of the Runciman Report, but also the recommendations of the working party which looked into this problem two years ago and recommended a strict limitation both of the number of taxicabs and the number of drivers. To leave this industry to what is called the free play of the law of supply and demand means that we shall lose the London taxicab service. It will die. In order that this industry shall not die, and that the 9,000 or 10,000 men and their families who get their living from it shall not suffer, something more drastic must be done to assist them than has been done in the Budget.

  687
  While I do not argue the case, I agree that there is need for some relief of the tax on petrol and hydrocarbon oils in those industries which use them as their raw materials. Some firms in my constituency do so use them. Having looked carefully at the evidence which they have given me, I am satisfied that these industries should be given equality of treatment with other industries which use oil, and that something should be done to offer them relief when they use oil for industrial purposes.
  In spite of the blandishments which I am sure will be offered to the Chancellor, I hope he will not replace the Entertainments Duty on cricket. Like his Parliamentary Private Secretary, the hon. Member for Chelmsford (Mr. Ashton), I have a particular love for Surrey. I am a member of the Surrey Club. If other sports can prove a case, I have no doubt that it can be considered, but I believe there is a special case for relieving amateur sports and that the Chancellor was right in doing so. I hope that this concession will work out as he hopes for the cricket clubs in the country.
  In conclusion, unless we in this country recognise that there is growing all over the world a completely new conception of economic life and economic planning, we shall not solve our difficulties or make any contribution to the building of peace and security in the world.
  9.28 p.m.
  Mr. Gerald Williams: I have listened to nearly every speech made today, and the more hon. Members opposite have spoken, the better the Bill has appeared to be. Many have not been controversial but have had a few grouses; some have asked for more concessions; and others have been merely facetious. I find it an extremely refreshing Finance Bill.
  With the reduction in Income Tax, which I am quite certain will lead in an indirect way to lowering the cost of production; with the reduction in Purchase Tax, which will lower costs in a direct way; and with the initial allowances to help us. we shall be able to reverse the vicious circle of rising costs.
  I know that the Chancellor is anxious to speak, and I will be brief, but there is one point for which I wish to thank my right hon. Friend—his action about
  688
  sugar. For a long time I have been trying to get more sugar into the country. He has spent a large sum of dollars on buying it, and, although I have a completely "Waldronian" dislike for bulk purchase, it seems to me that when the Conservatives do use bulk purchase they use it to very much greater advantage than ever the Socialists did. The Chancellor has got us cheap sugar, without doing any harm to any arrangement with the Empire, and has saved the spending of a lot of dollars on expensive substitutes from which sugar is extracted. He will also save dollars on cereals which will not have to be bought, because when we have plenty of sugar we need less cereals.
  I now want to put one or two of my own grouses. First, I do not know why the Opposition make so much mischief about dividend increases, for whenever dividends are increased, to them it seems all wrong. They forget that many dividends are reduced from time to time, and that, in order to have an incentive, we must have increased dividends. If not, all enterprise will be killed. As it is, at the moment, people are discouraged from risking their money, because, if they happen to be on a loser, they lose it all, while, if the concern does extremely well, they are allowed to keep only about one-third of what they make.
  I have been in four small concerns myself since the war, and two of them have done well and two have done badly. Hon. Gentlemen may say that I am a bad businessman, but I should prefer to say that I am a fairly average businessman. If one loses everything on the bad enterprises, and is not able to have dividends increased when things turn out well, people will not try again. Much mischief has been made about dividends, but I say it is essential that they be increased from time to time.
  The Chancellor has said that it is appropriate that the Government should do less and the private citizen should be in a position to do more. No wonder the Socialists do not like that. They prefer everything to be run from Whitehall. It seems to me that the individual, private enterprise, initiative and enthusiasm are the means whereby we shall get his country where we want it to be. The Chancellor has made that possible, and I believe that we shall see the results within the next year or two.

  689
  I want to ask the Chancellor once more to consider the question of Purchase Tax, the arguments about which have been put very forcibly by my hon. and gallant Friend the Member for Renfrew, East (Sir G. Lloyd), and which I will not, therefore, repeat. Feeling is very strong about the losses which the commercial world is having to bear consequent on the reduction of the Purchase Tax, and I did make some promise to see if something could be done about it. Well, something can be done. It can be done in the case of motor cars, which have chassis numbers which can be traced—although I know it is difficult in the case of nylon stockings. I think that, in the words of the late Sir Stafford Cripps, perhaps some rough justice could be done, and rough justice would be better than no justice at all.
  I know that we have had a full report on this subject, and that the argument is that nothing can be done. But the tax has been reduced now, and the people concerned will, I suppose, get over it, helped by increased sales. The probability is, however, that the same thing will happen again next year and the year after. Therefore, I hope that, in spite of the Hutton Report which we have had, the Chancellor will go into the matter again and see if he cannot do something about it.
  The only other thing about which I was disappointed was that there was not much incentive to encourage savings. That ought to be possible and quite easy through the great insurance companies, who are the people who encourage savings of every kind, and who are allowed Income Tax rebates on premiums to people who insure their lives. If these rebates were increased, it would encourage more savings. There is another suggestion that I would throw out on the question of savings; it is that the Chancellor should give a bonus on Savings Certificates that have been held for 10 or 20 years—a bonus which is larger than the holder would get at present. Further, if it was not considered a lottery, I would suggest that a number of the 15s. certificates should be drawn for repayment at 20s. every so often. It would give that little bit of speculation which the public like so much, and would encourage them to save.
  690
  Post-war credits are the last thing I want to mention. This subject has been referred to several times already, so I will not dwell on it unduly. It is a matter which is creating frustration and annoyance to many people, and I hope that before the Chancellor reduces any more taxes he will do something about repaying post-war credits. People think that they are being let down. Instead of owing the money to particular people, could not my right hon. Friend raise a loan and owe it to the subscribers to that loan instead of to the people who are suffering great hardship because they cannot get repayment of what they know is due to them? If my right hon. Friend could do that, he would satisfy very many thousands of people in the country.
  This is a good Bill, and very little has been said against it by the party opposite. We on this side of the House welcome it, and want to encourage the Chancellor to give us just as good a Finance Bill next year.
  9.37 p.m.
  Mr. Douglas Houghton: There are a few things I wish to say, one of which arises directly out of the speech of the hon. Member for Tonbridge (Mr. G. Williams). Notwithstanding his defence of dividends, none of us can brush aside the important effect upon trade union opinion of sensational stories of scrip bonuses, high dividends and almost unlimited capital gains on the buying and selling of business enterprises and of large blocks of stocks and shares.
  I do not accept the view of those of my hon. Friends who assign to this Budget the major responsibility for the fresh move towards wage increases. I have been in the trade union movement for 30 years, and those of us who have spent so long in the movement realise how complex are the factors which mould mass opinion and stir collective action. In many respects, they are deeply psychological and cannot be summed up or over-simplified by saying that they are predominantly economic. They are economic, they are psychological, and they can be and are political. All these combine to mould the opinion of our great trade unions which now have such a profound influence upon our economy and the level of wages and prices.
  Mr. Ellis Smith: Basically, they are economic.
  Mr. Houghton: But we must bear in mind that when the Trades Union Congress advises the Government, as it usually does before the Budget, of the opinions of the trade union movement, the right hon. Gentleman can be quite sure that he is getting sound advice from their point of view. He may not think it is entirely acceptable or even sound economic or fiscal advice.
  There was something in the statement made to the Chancellor by the Trades Union Congress before his Budget with which I did not agree. But they were expressing the profound psychological reactions of the mass of the workers towards the present economic and financial situation. Any Chancellor who wishes to avoid disagreeable consequences from his Budget proposals and from the Finance Bill will try and interpret correctly what the trade union movement is saying to him and will do his level best to apply their purpose in his own actions. That, I think, is the best I can offer to the House as my analysis of the present position in the trade union movement.
  There is naturally in any movement of workers a desire for a greater share in the rewards of their own efforts irrespective of other considerations. It is a legitimate thing for trade unionists to ask for higher wages if they think they are contributing more to the national income than before, and if productivity is rising so that there is a greater quantity of goods to be distributed. They want to join in. I hope that the movement which has just started for further wage increases will bear in mind the economic fact with which we are faced in this country, that a greater distribution of the national income unless it is accompanied by an increase in the national income is liable to have undesirable consequences.
  Mr. Ellis Smith: We have been told that tale for 50 years.
  Mr. Houghton: I shall say no more about that. I am, on the whole, against indirect taxation. It is fairer to tax persons than things. It is more equitable to pay as we earn than to pay as we spend. Indirect taxation is taxation on spending, and unless there are overriding economic considerations which demand a curb on spending, much the best thing when taxation relief can be
  692
  given is to favour relief on indirect taxes rather than upon direct taxes.
  It is a sad reflection on the present state of our fiscal system that our great Welfare State, with its inestimable benefits of a social and domestic kind, rests so largely on taxes on beer and tobacco. At the turn of the century, one-third of the total revenue came from taxes on tobacco and alcohol. Today one-quarter still of our total revenue comes from those same two sources. It is a reproach to our modern society and to enlightened opinion in these days that so much of our taxation is drawn from those two sources of revenue. Taxation on other commodities, while not so predominant in the total revenue, is accompanied by all sorts of unstable things, like agitation for reduction, complaints by traders that we are affecting their business, and charges of unfair discrimination between one business and another. Yet, in the Finance Bill, the Chancellor is giving three times as much relief to direct taxation as he is giving to indirect taxation.
  In the total revenue, the ratio of direct taxes to indirect taxes is as close as four is to three. Any Chancellor should pursue with determination relief of indirect taxes, because these taxes are regressive, unfair and not adjusted to ability to pay. We are also relieving Purchase Tax, but the difficulty of the Chancellor is that he cannot give the relief that he would like to give because of the problem of traders holding taxed stocks. In the Chancellor's Budget statement he said:
  "Hon. Members will be aware that to go further would cause undue strain on the position of distributors carrying taxed stocks."— [OFFICIAL REPORT, 14th April, 1953; Vol. 514, c. 53.]
  That again is a factor in our fiscal system which we ought to get rid of. The Chancellor cannot give the reliefs to working people by relaxations of tax on commodities because he is confronted with this administrative problem of taxed stocks.
  Those of us who are pressing upon the Chancellor the need to get rid of as much indirect taxation as he can are giving him good advice. But if relief is to be given to direct taxation then I suggest to the Chancellor that it should take the form of a closer adjustment of the tax to the personal and domestic circumstances of the taxpayers rather than a wholesale reduction in the rates of tax. The Chancellor could have restricted the cost of

  693
  the 6d. oft the Income Tax had he felt moved to adopt the course taken by his predecessors in adjusting the rates of Surtax in order to avoid giving the benefit of the 6d. off the standard rate to the very large incomes.
  He could still have given the relief to industry without at the same time giving relief to the very high personal incomes. And there are numerous ways which we on this side of the House believe the Chancellor could have adjusted the tax more closely to the personal circumstances of individuals. He has done something in that direction, but he could have carried these reliefs much further.
  Certainly reliefs to the family man would have been very welcome indeed. Harking back to what I said about demands for wage increases, the Chancellor should always keep his attention fixed upon the family man, because he is the spearhead of the demand for increased wages. He gets the support of the other trade unionists who are probably not so much in need of an increase but whose weight is thrown behind the mass movement for wage increases.
  The Chancellor should have adjusted the child allowance in a way which would take many more married men with families outside the range of Income Tax altogether. That is all the more justified when one examines the incidence of tax in the case of husband and wife both working as compared with the husband being the sole wage earner with a wife at home looking after the family. Hon. Members would be surprised to see how the tax is loaded against the family man who is the sole wage earner as against the benefits conferred by the double set of earned income relief to husband and wife, both working.
  The Chancellor should also have given consideration to some relief on the interest on small savings. I know that the right hon. Gentleman has no responsibility for Section 27 of the Finance Act, 1951, but he knows that it has brought a huge crop of cases where interest on Post Office and other bank accounts has not been returned and taxed, and where inquiries are now necessary and calculations of tax going back over many years, frequently with interest and frequently also with penalties added, cause a great deal of distress to a great many
  694
  people. All that avoidance was going on without the check which my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) introduced into the Finance Act, 1951. But I am sure that it would satisfy all considerations of fair dealing in this matter if the Chancellor would leave the check to discover all the cases which certainly ought to be pursued as avoidance of tax, but grant some measure of exemption from Income Tax on interest on a small amount of savings. The exemption which is now given to National Savings certificates within the limit of 500 certificates can be given to small savings in the Post Office and in other forms of Government investment.
  I have referred to Section 27 of the Finance Act, 1951. I am sure the Chancellor will have learnt some lesson from what its operation has revealed and will feel that he ought to pay attention to other directions in which he might seek information to check widespread evasion and avoidance of tax. There is no reason why depositors in the Post Office should be the only persons who should be found out. Other people can avoid tax by other means, where additional sources of information given by statutory provisions would greatly strengthen the hands of the Inland Revenue.
  I know that this is an unpleasant theme because, over the years, those who can dodge Income Tax or cheat the railways have come to be regarded as minor heroes in certain circles. But it is a serious matter from the point of view of the workers who, under P.A.Y.E., are taxed on every penny of the wages they earn; who have nothing to avoid, and nothing to declare. The Chancellor should turn his attention to those with a source of income over a wider field— those who are engaged in trade and business—who find themselves able to use devices which are placed at their disposal to reduce their just amount of tax.
  I want to make one comment on the speech of the hon. and gallant Member for Renfrew, East (Sir G. Lloyd) who referred to the administration of Income Tax as a jungle. Surely it is the tax itself which is a jungle and not its administration. We hope the Royal Commission will point to a direction in which the tax may be simplified and thus facilitate its administration.

  695
  There is one aspect of nearly all Budget changes in direct taxation which the House probably does not appreciate. It may not be realised that all the coding for P.A.Y.E. is completed by the time the Chancellor rises to make his Budget statement, and if he changes the allowances or reduces a tax which involves re-coding, all that work has to be done over again.
  I am under the strongest pressure from the members of my union to demand that the Chancellor shall announce his Income Tax changes in November and leave the rest until April. From the Chancellor's point of view that would not do at all, but so long as we have a system of taxation which must operate immediately at the beginning of the financial year, before the Chancellor has announced his tax changes for that year, we are bound to have a good deal of duplication of work. That fact should be borne in mind by the "hatchet" group, in which the right hon. Member for Blackburn, West (Mr. Assheton) and other hon. Members opposite are so prominent.
  9.54 p.m.
  Mr. Hugh Gaitskell: The Second Reading debate on a Finance Bill generally ranges over a fairly wide field, and today has certainly been no exception. We have had a number of interesting contributions. I think we all enjoyed the speech which my hon. Friend the Member for Sowerby (Mr. Houghton) delivered just now. It was most thoughtful and interesting, and I am sure the Chancellor will study it carefully.
  I should like particularly to congratulate my hon. Friend the Member for Barnsley (Mr. Mason) on his maiden speech. He was brief, fluent, firm and clear—four excellent qualities—and we look forward to hearing from him again in the near future.
  This Bill has a few important and simple Clauses and some less important but more complicated ones. This afternoon the Financial Secretary spent most of his time on the more complicated ones and gave us some additional information on them. I want to start by making a few comments on those parts of the Bill before I turn to the major issue.
  696
  We on this side welcome the proposal to permit the Treasury to accept chattels in lieu of Death Duty for the Land Fund in certain circumstances. It is a proposal that was not embodied in the Gowers Report, but it has certainly been pressed for some by the National Trust, I think. For my part, I think there is a good deal to be said for widening the scope of securities and property of different kinds that can be paid as Death Duty.
  The Financial Secretary gave us some interesting information about Clause 2 on beer. As I understood it, the purpose of that Clause is to provide a stimulus to the brewing of stronger beer in so far as it makes it possible for those who do brew strong beer not to pay their tax quite so soon. Presumably, therefore, it grants them to that extent the financial cost involved in the interest on the tax.
  Mr. Boyd-Carpenter: Stronger beer and beers of the lager type take longer to mature.
  Mr. Gaitskell: I do not propose to go into this intricate matter any further tonight. Obviously, the question of strong beer is a highly controversial one. No doubt, my hon. Friend the Member for Ealing, North (Mr. J. Hudson) would have very definite views on this matter. We shall need to study the Clause very carefully before we make up our minds exactly what attitude to adopt.
  I would welcome the Financial Secretary's words about the increased flexibility being brought into Purchase Tax. It is a pleasure, of course, to hear him once more defending delegated legislation. Despite his nonchalance, it was perceptible to us all that he is now completely reconciled to delegated legislation of the most extreme kind. Certainly on this occasion we support that proposal.
  I turn to something rather more important, the concession to amateur sport and entertainments. We, of course, welcome this, and it is a pleasure to find that the Treasury have, after all, been able to discover a definition of it. I remember last year the Chancellor saying, in resisting an Amendment of ours, that it was impossible to define "amateur status" satisfactorily. One never knows what one can do until one tries. This will encourage the Opposition to make a number of further suggestions this year that, on further reflection, will lead to further solutions also.

  697
  I was a little surprised to find that in the case of cricket it was impossible to apply the amateur definition. I must say that that is a little puzzling, and I must tell the Chancellor that I also find it quite unconvincing. There are professionals and amateurs who play in football teams, rugby teams and also Association teams. I do not think we can expect cricket to be permanently in a different status from that of any other sport. I ask the Chancellor to reflect. Does he really think that in 20 years' time Entertainments Duty will affect virtually every non-amateur sport except cricket? I cannot believe that it can fee left like that, and, as he has already been warned, we shall be pressing very strongly once again for justice—I think that that is the right word—to be done to the other sports as well.
  I should like to endorse particularly what my hon. Friend the Member for Sowerby said. We regret that there has not been a more serious effort made in this Bill to tackle the problem of tax evasion. Last year though we were in some difficulty, because it is not very easy to get such an Amendment in order, we put forward a new Clause on expense allowances, and I think that at that time, although the Chancellor was unable to accept it, he promised to look into the matter. It is a matter which gives a great deal of concern to a lot of people. I think that most of us feel—I do myself, and I know that most of my right hon. and hon. Friends on this side of the House do also—that a good many people get a good deal too much out of expense allowances. I know that it is a difficult problem. I hope that the Chancellor has not given up the attempt altogether to tighten things up.
  I should also like to ask if the Chancellor has considered the point raised by my hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes). The Chancellor may perhaps recall that during the Budget debates he drew attention to the rather obvious tax evasion taking place in the case of a number of textile firms changing their identity. I notice, incidentally, that the "Manchester Guardian" gave a long and rather formidable list of such firms only the other day, and I hope very much that even now on this subject it will be
  698
  possible to introduce an Amendment to the Bill to close that particular loophole.
  I pass now to the bigger issues. The Budget was based to a considerable extent on the overseas trade position and, for the rest, on what might be called the internal economy and, particularly, the production situation. I should like to say a few words about the overseas trade situation first.
  Without going into all the arguments again, I think that we can probably agree very largely that the United Kingdom balance is still a highly precarious one. That when we take into account the movement of stocks, as I think we should do, we find that over the past three years in each case there has been, bringing in the movement of stocks as well as the balance of payments figures, a small surplus but no more. I think that we all realise and it is not contested that this year's figures were clearly helped by the more favourable terms of trade, and we know that that may not continue, or, if it does, the difficulties on the export side are almost certain to increase. But I would say we are also very conscious that, having a precarious balance, it is made all the more precarious for us when our gold reserves are still so very low.
  I should like to put to the House a few reasons why I think recent developments must make us rather more anxious about the dollar outlook in particular. I want, first of all, to touch on the question of United States aid. I think that it would be a great help to the House and to the country if the Chancellor, when he comes to reply, would clarify the situation. I will put a series of questions to him. I take it that the figure of £140 million which appears in the Financial Statement as being the counterpart for the economic aid still stands, and that we are going to receive the equivalent of that in dollars during this fiscal year?
  In that case, are we to take it that £140 million represents economic aid which has already been granted to us in appropriations? Next, what is the relationship of this to the new proposals published today by the American Administration in which, according to "The Times," we are to receive 100 million dollars? If I may trouble the House with the exact position, this is what "The Times" says. The

  699
  new recommendation of Economic aid is
  "200 million dollars to be divided equally between France and Britain."
  That, so far as I can make out, is all that is proposed.
  That, of course, does not cover military aid but, as we all realise from the point of view of balance of payments and the dollar situation, military aid in the form of actual equipment does not help us in the same way as economic aid does. It is also different from off-shore purchases. I should like to ask the Chancellor whether he can give us some information on them as well.
  There has been some reference to off-shore purchases by a number of my hon. Friends today, and I particularly want to say that I share their apprehensions about this matter. It has always been my view that to a limited extent at a time of general rearmament there is no reason for strong objection to this method of obtaining dollars. Indeed, I concede the argument the Government put forward, that as a result of this it is possible to maintain a rather larger capacity than would otherwise have been possible in certain fields, such as aircraft.
  Nevertheless, it is undoubtedly true that there is a great danger that, when the defence programmes are curtailed, as we all hope they will be, our industrialists will, so to speak, be left on a limb, for they will have concentrated on exports for which there is not going to be a good market for very long.
  I would refer the Chancellor to what was said about the subject in the E.C.E. "Survey of Europe Since the War." There is an interesting quotation in it from the "New York Times," a responsible newspaper which is not likely to exaggerate. It says:
  "It will be a different story"—
  that is, about off-shore procurement—
  "when the peak of defence spending in this country"—
  that is, the U.S.A.—
  "has been reached and idle plant capacity at home becomes a political as well as an economic problem. There has been enough experience with so-called distressed areas of defence production in the past to suggest the howls that will go up in Congress if foreign
  700
  manufacturers continue to make things for Uncle Sam at such a time."
  That is a very significant comment, and it is a matter which causes us a good deal of concern, because it appears that the emphasis now is to be very much on offshore procurement.
  But let me say at once—I believe the whole House is united in this—that we do not want economic aid or any aid if we can possibly do without it. We wish to be independent. However, if the United States has decided to cut down economic aid, as apparently is the case, then we have to make our plans accordingly for dealing with the dollar situation. The Chancellor ought to give us some idea of what is in his mind about this.
  There is a second matter which also causes me some concern. If we are to adjust ourselves to this situation, one of the things that we should like to do is to expand our dollar exports, but, unhappily, everything that has been happening in the United States lately seems to suggest that it is going to be more and more difficult for us to expand our dollar exports. I am one of those who believe that a very great deal, no less than the peace of the world, depends upon Anglo-American co-operation and, particularly for people like myself, it is distressing to observe the trend of American opinion at the moment.
  It may or may not be true, I do not know, that Senator Taft said of "trade, not aid" that he agreed with the last two words but not with the first one. However, it is significant that that sort of thing should be said. Also, we all know about the episode of the Chief Joseph Dam and the difficulty that the Administration are having in even renewing the Reciprocal Trade Act. It is not much good moaning about this, but I suggest that these events reinforce our appeal to the Government to base their policy, not on any fancy idea of early convertibility, but rather on building up as swiftly as possible supplies from non-dollar areas and expanding trade generally in the non-dollar world.
  The third thing that I want to ask the Chancellor about is commodity prices. There have been some considerable falls in commodity prices lately, in tin and, I believe, in rubber as well, and I suppose that must give rise to a good deal of

  701
  anxiety in the Treasury because our dollar earnings depend enormously on the prices at which these commodities are sold. Can the Chancellor tell us anything about it and what the prospect is in that direction?
  Finally in this field, can the Chancellor tell us something more about the German occupation costs problem? My right hon. Friend the Member for Battersea, North (Mr. Jay) touched on this in his speech during the Budget debate. We do not know in the least where we stand here, and we are entitled to an explanation. We all understand the difficulty, but we want to know what extra burden the Chancellor contemplates will have to be carried if E.D.C. goes through, or rather the agreement which this House approved some considerable time ago under which a new status is given to Germany. We will have to retain our troops there, but presumably the Germans will no longer continue to pay for them. That is an extremely serious matter, and it might involve a gold payment of some kind under E.P.U. arrangements. I think that is an additional cause for anxiety.
  I pass to the more general aspects of the background of the Budget. The Budget proposals can be looked at in two ways. We can look at them first from the economic point of view. Are they going to achieve the objectives which the Chancellor has set, objectives which are not in dispute—the need for increased production, greater investment, greater exports and, if I may add a fourth the need for more production to save imports in case we do not get the exports? That is one aspect, and the other aspect is, simply, is it a fair Budget? I am going to say a certain amount about that later on, but I want to deal with the economic aspects first.
  There are four main proposals, the abandonment of the Excess Profits Levy, the cut in Purchase Tax, initial allowances and the reduction in the standard rate of Income Tax. I do not want to say much about the first two. I only should like to ask the Chancellor once again, about the Excess Profits Levy, the question I put to him in my speech on the Budget —what is the position with regard to the Profits Tax? He will recall that that tax was reduced, specifically because of the introduction of the Excess Profits Levy,
  702
  if my memory is right, from 25 per cent. to 17½ per cent. in the case of distributed profits and from 5 per cent. to 2½ per cent. in the case of undistributed profits. I should be grateful if the Chancellor would clear that up, because it has a bearing on this matter. Are we to be left, when the Excess Profits Levy has been dropped altogether, with the same Profits Tax as existed before it was imposed, or a lower Profits Tax, and, if so, how much of an additional concession to industry is involved in that?
  On Purchase Tax, I want to ask only one thing. It has been discussed very fully by my hon. Friends and I think that my right hon. Friend the Member for Batter-sea, North dealt with it very admirably this afternoon. I should like to press the Chancellor on the textile situation. We have had pretty strong protests from the textile industry on the working of the D scheme. This is not just a matter of the rate of Purchase Tax: it is a matter of the whole of that scheme. It was greeted, when introduced, with considerable misgivings on this side of the House, though we realised the difficulties that the Government were in. We felt at the time that the D figures had been fixed at too low a level. The House and Lancashire and Yorkshire are entitled to some statement from the Government on this matter.
  I pass over the initial allowances and the Income Tax concessions, as these will be covered in what I have to say about the economic consequences generally. The Chancellor has defended his Budget, and rightly, I think, on the ground that additional spending is needed. I want to emphasise that. It has not been defended on the ground that it will increase savings. Although the right hon. Gentleman has never mentioned any particular figure or told us exactly how much more spending he expects to get as a result of it, we may accept the "Economist" estimate that two-thirds of the concessions will be spent.
  I have little doubt myself that that will have some effect on production. It would indeed be very surprising if the release of this additional purchasing power did not in itself stimulate increased production, and if we do not get increased production it merely means that other more powerful forces are at work driving production down. That indeed may be the case. So far as it goes, those concessions are likely to have that effect.

  703
  It is true, of course, that the extra spending may affect imports. That is a point which the Government, who are always so keen on relaxing every kind of control, had better bear in mind. Leaving that on one side, I am prepared to admit that we may get some higher output to match, broadly, higher consumption. Where are we at the end of that? We have certainly a better position—more overtime being worked, less short-time, less unemployment, more television sets and a few more umbrellas available, and various other things that have been affected by the Purchase Tax concession.
  But are we, as a nation, economically stronger? I do not think we are because it is the other aims—the expansion of exports and investment—which are the vital things that our economy ought to be getting at the moment. The crucial question in connection with the economic aspect which we have to ask ourselves is; what effect does the Budget have on these two things? If the House will bear with me, I want to take up a moment or two on each of them.
  I suppose that most of us would agree that the level of exports depends largely on three things: on the state of overseas demand, on the level of costs in our export industries and on the energy and enterprise of managements in seeking our export markets. Exactly in what way will the Budget affect any one of those things? It is extremely difficult to see that it will affect them in any way.
  Certainly the overseas demand is not going to be affected, and one would not expect it to be. There, I can only repeat that I think the Government ought to be pursuing, both in their contacts with Europe and the Commonwealth, what I can only describe as a much more expansionist policy. They ought to be encouraging governments to be less deflationary whereas, on the whole, so far as I can make out, the emphasis has been the other way.
  In passing, may I ask the Chancellor to tell us what has happened about the great plan for Commonwealth development? We had hoped that that would have a stimulating effect on our export trade. Is something being worked out? Are the conversations still going on? Can we hope for large orders being
  704
  placed to develop Australia and other parts of the Commonwealth? As to costs, I do not think even the Chancellor could claim that there is any reason to suppose that any costs in the export trades will be reduced by the Budget.
  Nor can I see any reason why the managements and businessmen are likely specifically, as a result of this Budget, to make greater efforts to export more. On the contrary, there is a certain danger that, if we increase consumption at home as is proposed, we make it rather easier to sell at home, and we diminish the tendency of people to sell abroad. I know that hon. Members do not altogether agree with me, and I do not want, at this time of night, to go into an argument— because I recognise there is an argument —though I believe that my case, in times of full employment, is a very powerful one.
  At best there is nothing in the Budget to encourage exports. Does it encourage investment? The position here is surely this. There was a shortage of steel for a time, owing to the running down of scrap from Germany. That position has been overtaken as a result of building blast furnaces, and we now know that we have plenty of steel. While, however, we want plenty of steel, we do not seem so far to be getting additional orders. I venture to say that this is not unconnected with the monetary policy of the Government.
  I do not want to go into a long technical argument, but, to put it shortly, it seems to me that whatever the merits of the use of a higher Bank rate may be in certain circumstances, it is extraordinarily difficult to reconcile a policy of that kind with the policy of encouraging a rapid increase in investment. Of course, the Government claim for that policy that last year it reduced investment. If they are right about that, I do not quite see how the same policy will increase it this year.
  I ask the Chancellor to have another look at this aspect. He always speaks of the Bank rate policy as being a flexible instrument—to use his favourite phrase. If it is a flexible instrument, why not change it occasionally? It is difficult to understand why anybody uses the word "flexible" about something that is never altered; which everybody is so frightened

  705
  of altering because of the terrific psychological consequences that would ensue. That is why we have always said it is not a flexible instrument. While no doubt the Chancellor wants to encourage investment, I am afraid that in pursuing this monetary policy he is simply preventing it from happening.
  It may be said that the real trouble is shortage of capital. Is it? Was there any shortage of capital last year? Of course there was not. That argument just cannot stand examination because we all know perfectly well that after the payment of tax, after the payment of dividends, after all the investment desired in stocks and fixed equipment, and the setting aside of what was wanted for future tax payments, no less than £600 million liquid reserves were left as financial assets. There is no reason to suppose that shortage of capital is holding up the position.
  It has been asked by the Economic Secretary why, in that case, bother about initial allowances? Why does he? I am putting the question back to him, but I will give him my answer. There may be particular instances in which there is a shortage of capital where initial allowances would help. I do not want to say very much on that but I take the Financial Secretary up on one point. He resisted any increase in the rate of initial allowances by saying that it was a costly concession. I disagree with him completely. I do not think it is a costly concession; indeed, other hon. Members have pointed out that it is no more than an interest-free loan and nothing like such a costly concession as giving away undistributed profits.
  Incidentally, if we increase initial allowances we get a corresponding increase in undistributed profits, and so any concession made by the Treasury is balanced by a higher corporate saving. I think there is a case for increasing the rate. A difference of 10 per cent., such as we get this year is really small in relation to the actual concession, and the amount of money which the company does not have to pay in tax for the time being is only, after all, a little more than half that because the tax comes into it.
  I conclude that there is no convincing case on economic grounds for claiming that this Budget will have anything more than perhaps a temporary stimulating
  706
  effect on production in the consumer goods industries. I see no reason why it should have an effect on productivity or on exports.
  Is it, then, a fair Budget? I think hon. Members opposite know our views on that. It is one of our major criticisms that the Budget is not fair and my right hon. Friend the Member for Battersea, North, in his very effective speech today, explained the reasons for that view once more very fully. I do not know why, but hon. Members opposite, and the Conservative Party in general, always seem to object very strongly when we tell them that something they are doing is not just and is not fair. We are allowed to talk about the balance of payments, monetary policy, initial allowances or productivity, and the atmosphere is quiet and cool and the temperature is low. But, as soon as we begin to discuss how much different people get as a result of the Budget, or any other Government policy, that is described as "low level debating," "cheap," "in bad taste," "inspired by class hatred and malice and envy."
  That is really a very silly point of view to take. This is, after all, a major political issue. I suppose the different conception of social justice which exists on the two sides of the House is the greatest issue which divides us, and it really will not do for Conservative newspapers, or speakers, merely to impute motives to us when we raise this very vital issue.
  Turning to the particular situation of this year's Budget, of course, the facts are not in dispute. I listened with entertainment, as we all did, to the hon. and gallant Member for Ayr (Sir T. Moore) in his endeavours to prove that it was all nonsense to suggest that this was a Budget which favoured the rich. His stories about the taxi-drivers junketing in Maidenhead and his tear-jerking plea for the cosmetic industry were, I am afraid, utterly unconvincing. Undoubtedly the rich, the wealthier people, do get the overwhelming bulk of the concessions in this Budget. That cannot be denied. I do not propose to go over the ground. but if we take the items one by one— Income Tax, Purchase Tax, E.P.L.—in every case it is the better-off people who get the concessions.
  I do not think that the Government will deny that. They may say, "We

  707
  believe this is fair." At any rate that is an intelligible answer. Why do they believe it is fair? They say, "Because the rich already pay all these taxes, and therefore it is fair that we should ease the tax burden on them." That is, after all, the general answer which has been given. We on this side of the House have even been accused of hiding the facts, because we have not disclosed that wealthy people do pay high taxes. I do not think that anybody is in doubt about that.
  But this attitude is one which we cannot possibly accept, because it is really based on the idea that the pre-tax distribution of income is fair and that, therefore, the job of the Chancellor is to reduce taxation where most is paid. That, they say, is his main job, and if there is £200 million to spare, as we have this year, I do not think it an unfair description to say that the logical Tory conclusion is to use it all in tax relief and to use most of it in reducing the standard rate of Income Tax.
  We cannot accept that proposition. If £200 million was available to us it would be a matter of balance. We should say, "Where can we encourage spending in a way to help people most, in a way which will be fairest?" I do not say that we should ignore the taxpayer altogether, and that the money would all go in increased social services. But we should consider it right to take into account the position of those who are the poorest in the community and in consequence do not pay any direct taxation at all. Equally, if we are thinking in terms of the Income Tax-payer we should look to see how we could relieve the smaller taxpayer most, as successive Labour Chancellors have done.
  I have tried, I hope in a relatively un-controversial manner, to explain to hon. Members opposite why it is we feel that the Budget is unjust. We recognise they do not agree. If I may say so to my right hon. Friend I do not think that this is a matter of the Chancellor not seeing the tables correctly. This is a fundamental difference in social philosophy. We are prepared to accept that that is so and we believe that when the people of this country see more clearly the implications of this Budget they will come to accept our point of view.
  10.28 p.m.
  The Chancellor of the Exchequer (Mr. R. A. Butler): At this late hour the House would not expect me to speak at very great length. But there are some important questions which have been raised by hon. Members and by the right hon. Gentleman the Member for Leeds, South (Mr. Gaitskell) to which I shall try immediately to reply.
  First I should like to congratulate the hon. Member for Barnsley (Mr. Mason) on his maiden speech. If he will pursue controversy with the same fervour as he did today he must expect, when the bounds of a maiden speech no longer surround him, to meet a certain amount of opposition from this side of the House. But today we all felt that he kept well within the recognised limits of a maiden speech and paid a very nice and proper tribute to the traditions of the House.
  The hon. Member for Midlothian and Peebles (Mr. Pryde) and the hon. Member for Clapham (Mr. Gibson) raised questions about the indigenous hydrocarbon oils. This matter was mentioned by the Financial Secretary, and I will say to them, in whose constituencies, particularly in Midlothian, this problem arises, that we are expecting now to hear from the interests concerned, and in due course we will consider what we are able to do.
  The hon. and gallant Member for Down, South (Captain Orr) raised the problem of the linen industry in Northern Ireland. It is most important to realise the position in Northern Ireland, particularly the employment position. Northern Ireland has just introduced its own Budget. It is not for me to interfere, but I will only say that the problems of Northern Ireland are very present in our minds, and any opportunity that I have of meeting the Finance Minister, as I did recently, are very much welcomed by me. Therefore, I hope the hon. and gallant Member, while he may not necessarily expect to get all that he is talking about, will get in touch with me and the Government on these difficult problems.
  I would like to say a word about the Scilly Isles, as I was not able to in the last speech when I wound up, in answer to my hon. Friend the Member for St. Ives (Mr. G. R. Howard). I am receiving a deputation from the Isles, and

  709
  pending the arrival of the deputation I will say no more except that naturally anything they put before me will be very seriously considered.
  My hon. Friend the Member for Ton-bridge (Mr. G. Williams) was kind enough to congratulate us on the sugar position, and I think he is joined by almost every housewife in the country. The hon. Member for Clapham asked us to do more about London taxis. This gives me a very good chance of saying that, in so far as it is possible in a Budget or a Finance Bill to help the owners of taxis, we have done so, but the rest of their problems must be discussed with my right hon. and learned Friend the Home Secretary and, while I can give no assurance—because we have already had the Runciman Report—we are very well aware of the problem which they face at the present time.
  I will get straight down to the main question put to me by the right hon. Member for Leeds. South about American aid, and the foreign position, but in case I forget it I would like to give to hon. Members a small piece of information with regard to a promise given last year about the Excess Profits Levy and output allowances for certain minerals. Hon. Members will remember that under Section 56 of last year's Finance Act certain allowances for E.P.L. purposes were made available for companies engaging in the mining of metals.
  Hon. Members put forward many claims for extending the scope of this allowance, and Clause 25 of the present Bill extends the field in which a Treasury certificate may be given to cover any mineral and to the winning of it from a natural deposit of a wasting character— that sounds rather like hon. Members opposite.
  I have this information to give to hon. Members, as it may interest some of them. As soon as the present Bill becomes law it is proposed to give a Treasury certificate for the following: china clay, ball clay and china stone; anhydrite; gypsum; pyrites; pitchblende; fullers earth; sand and gravel; silica and moulding sands; brick clay, including brick earth and shale; chalk; limestone. If there are any companies engaged in extracting wasting minerals not included in this list, who think they
  710
  can make out a case, I want to take this opportunity of saying that if they want the issue of a Treasury certificate in respect of their case they should make representations and they will be considered. That is in answer to a pledge given, and that is the latest information for the benefit of the House, and in good time before the Committee stage,
  I will come straight away to the point raised by the right hon. Gentleman about American aid. I absolutely agreed with his speech, which was couched in terms of the national interest in considering all the problems that face us, that the House and country should have the latest information of Her Majesty's Government about the present position of American aid, particularly as we have seen so much in the newspapers today, some of which, of course—not the total picture—I was able to ascertain during my recent visit to the N.A.T.O. Conference in Paris.
  I will give the following short report, therefore, to the House. The proposals for aid which have just been made to Congress by the United States Administration mean that there will be no further defence support aid of the form that we have known, after June, 1953, apart from what remains in the pipeline, of goods financed out of appropriation for 1952–53 and previous years. I am coming in a moment to the question of a counterpart. Congress has now been asked to authorise a small defence advancement for the United Kingdom amounting in all to 200 million dollars for 1953–54, consisting of 100 million dollars for aircraft production—and the House will be aware of that statement— and 100 million dollars for commodity purchases.
  If Congress approved these proposals —and we must speak subject to that as we are Parliamentarians ourselves—the total defence aid to be appropriated for the United Kingdom for 1953–54 will be about half the corresponding total for 1952–53. The House must not take that as the final picture.
  We are, on the other hand, expecting a considerable increase in receipts from offshore purchases, and this I was able to discuss with the American Ministers in Paris. The total of such orders already placed amount to some 340 million dollars, which is a big sum. The House

  711
  must understand that these are the orders placed. What interested me as Chancellor of the Exchequer was the nature and size of the payments and when the payments fall—what fiscal year.
  The payments so far made against such orders have been small, but this is what I should expect after inquiry, that during the 12 months beginning 1st July, 1953, the growing volume of dollar receipts from off-shore purchases will broadly offset the decline in receipts from defence aid. Although unlike defence aid, receipts from off-shore purchases, unless they are applied to the home domestic, British consumption and then permitted to be used by the British within their own borders, do not present an exactly similar addition to our resources as defence aid.
  Nevertheless, the House will understand that the placing of a large off-shore procurement order in our defence programme with the provision that that should be used by us does form a valuable assistance to our production and to the employment of our people, the importance of which must not be neglected. If this develops, as I believe it will, it will form a very valuable addition to our resources.
  Mr. Pargiter: Would not the Chancellor agree that to do this to the detriment of our normal export production is likely to be very dangerous in the long run?
  Mr. Butler: That is obvious, and I am coming to that in a minute. This is a policy which is being watched and which will have to be watched. But I was defining the advantages of the policy which I think are obvious.
  This position illustrates that there is a considerable importance to be attached in future to the off-shore procurement programme, and I hope that will be noted on the other side of the Atlantic. So far as our current financial year is concerned—and this was the question raised by the right hon. Gentleman—the provision of the £140 million of counterpart appropriated in aid of our Defence Votes and included therefore in the Budget, still stands, and therefore the statement I made in my Budget speech represents for
  712
  this year broadly the outlook to which we can look forward. I cannot say what will be the prospect in respect of such arrangements in future years.
  Mr. Gaitskell: May I ask the right hon. Gentleman two questions? First, on the last point, are we to understand that the £140 million is in respect of defence aid made in the current fiscal year, or previous year, and does not include the 200 million dollars so to speak? Secondly, so far as off-shore procurement is concerned, will the right hon. Gentleman tell us whether any part of the 340 million dollars will consist of purchases of things which will, so to speak, be handed back to us, or is it what might be called dollar exports?
  Mr. Butler: In answer to the first point, the counterpart is largely accumulation, as otherwise we should not have been able to put it in advance in the Budget statement. It does not take account of any recent announcements such as I have made. With regard to the off-shore purchases, I cannot give a final answer to that as I am attempting to give the House the latest news in an attempt to keep it au fait with the position. I will certainly keep the House informed as to how the incidence of the off-shore purchase lies.
  The next point to make is that the position of our economy and our prospects—as has been pointed out by several hon. and right hon. Gentlemen—is governed largely by the extent to which we can expand our exports. The right hon. Member for Leeds, South asked what was the prospect for the general trade and payments policy which we have been pursuing. I should like to make two observations about that in relation to our contact with the American Government. First, it would certainly be wrong if I did not tell the House that we were disappointed with the symptoms of progress which we have seen to date, and we have so informed the American Ministers. I can only say that the frankness of our conversations has been matched by the understanding created by that very frankness.
  We have frankly discussed every aspect of the matter, including the Joseph Dam contract, and every other matter which has caused a certain degree of disappointment and, in some cases, disillusionment.

  713
  Having said that—and said it with emphasis—I think it would be wrong if the House were to consider that we should now abandon the objectives we set before us for widening trade and tying closer our ties with the American continent and economy.
  I am glad to see that the right hon. Gentleman made a similar statement today. He said that in his view these developments were associated with the peace of the world. It is quite clear that the economy and finance of the free world must be brought closer together if our economy and that of the Americans is to make any sense and if we are to put forward the maximum effort. What is the use of building up defence forces and going to meetings at N.A.T.O. and in other ways trying to produce a combined foreign policy, unless we can bring our economic and financial policies closer together and so bridge the dollar gap?
  I have no reason to suppose—and this is the only quarrel I have with the phrasing of the right hon. Gentleman opposite about this broad international matter— that it will be more and more difficult to do so. My impression is—and I say it with a sense of reality, after having been engaged in very long talks and going on long travels in the last few months—that it will not get more and more difficult, in the long run. I agree that there may be a period of difficulty and waiting while our friends on the other side of the Atlantic become accustomed to taking part in some of those discussions that we are so used to here with their own Congress and with the difficulties of assuming office as they find it. I have no doubt that during that period there will be difficulties, but it is just up to us to show the utmost patience and determination in our objectives.
  The right hon. Gentleman asked about convertibility. I do not think I need go into a side-track about that tonight because I have already stated the view of the Government. There are certain conditions to be fulfilled, which are, first, continual success in making our economy sound in the sterling area; secondly, the adoption by the United States and other countries of good creditor policies which widen trade and give us a chance of earning our living instead of receiving aid—which we have made only too clear to them and from which I think we shall
  714
  see some result, and, thirdly, a system of adequate financial support.
  Until those conditions are fulfilled I do not think the House or the right hon. Gentleman need spend time on thinking we are not sticking to the right and proper course of attempting to do everything we can to expand our exports in whatever way is most valuable. To show the determination and sincerity which animates Her Majesty's Ministers, I would accept the right hon. Gentleman's own words when he said that we must expand trade generally in the non-dollar world, provided that we retain the ultimate objectives that I have stated.
  I go further. I think that now is the time in our history when industry generally—and the Government so far as they can help it—has to adopt any device of ingenuity or improvisation which will get us over this difficult time and widen trade and expand exports to the best of our ability. No device will be left unexamined. The possibility of trading with countries where currency is short, or the possibility of any sort of understanding will not be overlooked and I shall certainly not resent it if either I or my right hon. Friend the President of the Board of Trade receive suggestions from hon. Members from either side of the House how we can save our country's export trade and get us through the difficult months that lie ahead.
  I do not think that the Budget has done anything less than to give a distinct fillip and encouragement to industry. Every time I have made contact with industry they have said, "Lighten the burden of taxation, and do not adopt the artificial devices some countries have, particularly for export subsidies." That advice has been the policy we have adopted. In the case of commodities policy, there is a rubber group sitting and a cotton group. That subject is under active discussion at the present moment with our friends in the United States. In the case of Commonwealth development, I cannot in the short time at my disposal give all the details, but the question of American overseas investment is being rapidly and seriously considered, and we are at the same time developing our own proposals to the International Bank. I understand that the private group that have set themselves up in the City are also doing their best.

  715
  The right hon. Gentleman asked about Germany. I am very glad to say that in Paris, at the N.A.T.O. meeting, an agreement was reached of a satisfactory character with the United States, France and Germany. It will ensure that the cost of our troops in Germany will be covered up to 30th June, 1954. So far, so good. Hitherto successive British Governments have always insisted we ought not to have to bear any part of the cost of maintaining our troops in Germany. So far, so good. The position after 1954 will depend on developments under the E.D.C., with which we were also concerned in our visit to Paris, and a great many other factors. The House would make a mistake if it under-estimated the problem this is likely to present both to our country and to others.
  I think it would be a mistake for either the House or the country to underestimate the soundness at the present moment of our position generally particularly the results of our balance of payments and our reserves. The position was so satisfactory in fact that we had a very considerable increase in the reserves. I am not going to give any forecast how things may go. That would be very silly. All I can say is that if we keep our nerve, keep together in industry on all sides, to co-operate in increasing exports and working together, I think we can get through.
  In this connection the speech of the hon. Gentleman the Member for Sowerby was particularly useful. He said we should pay attention to the spirit and the philosophy of the trades union movement. I assure him we do so. Indeed, I sometimes wonder if they are not very happy in sending us their views even though I am not always able to accept every one of them. I am sure first that industry itself is quite clear that they must not depend upon the Government to do everything, because the Government cannot; second, that the utmost moderation should be shown. I agree with the hon. Gentleman that the Budget is only one factor out of very many in the general psychological situation with which we all must deal with the utmost statesmanship.
  Having said these rather serious words that, I think, are not inappropriate on the Finance Bill, and in answer to the right hon. Gentleman, I conclude by speaking
  716
  of the three main other points raised where I have struck a just balance in sport, Purchase Tax, Income Tax. Thus I shall answer the points made in the debate from that side of the House.
  First, sport. It has been widely said, I know with some humour, that I was influenced in my decision about cricket by my Parliamentary Private Secretary. No man helps me more in my public work, and I do not think I have a better friend, but the first he heard about this was when I made my Budget statement at this Box. That is the spirit in which Budget secrets ought to be kept, and that is how they were kept. I must say he was quite pleased with me when I got outside afterwards.
  The decision for amateur sport and cricket was not taken just for a whim. It was taken as a result of examination of the debates last year, the demand to assist amateur sport, and to find a definition that would meet the wishes of the House. I think we have done that. In the case of cricket the amount involved was small. The position of cricket, which is played during the week when people are at work, is one with other difficulties, too, and is by no means easy. I do not want to denigrate that noble sport. Its position is by no means an easy one, and in view of the sum involved, and the nature of the difficulties facing cricket at this time. I feel pretty certain that the decision was a correct one. At any rate I shall reserve my fire for what I have no doubt will be enlivening debates during the Committee stage—
  Mr. Ellis Smith: The right hon. Gentleman will get it.
  Mr. Butler: —when I shall be able to answer my critics.
  There has been much criticism of the manner of the relief of the Purchase Tax. The hon. Member for Sheffield, Park (Mr. Mulley), the hon. Member for Sowerby (Mr. Houghton), my hon. and gallant Friend the Member for Renfrew, East (Sir G. Lloyd) and others raised the point. As the hon. Member for Sowerby said, if I had wanted to reduce Purchase Tax to a greater extent I could not honestly have done so in view of the loss caused to the retailer. As it is, that has been one of the major problems, and, as my hon. and gallant Friend the Member for Renfrew, East said, this is a problem to

  717
  which we have not been able, despite the Hutton Report, to find a solution.
  I am then asked, "Why reduce the rates?" the answer is that the 100 per cent. rate of Purchase Tax could not be held. Trades were languishing under its burden, and it was necessary to deal with that. In the case of the 66⅔ rate, I was surprised that the hon. Lady the Member for Coventry, South (Miss Burton) did not welcome the reduction of the tax on motor cars, because I can assure her that the reduction of the tax on cars was made after examination of the state of the industry, as well as of the rate of the tax.
  Miss Burton: I did say today, on the other hand, in the House that I welcomed very much the reduction on motor cars, but that it would not help the old-age pensioners.
  Mr. Butler: I will deal with the old-age pensioners now. The hon. Lady said that these reductions would not help the old-age pensioners in the least. That subject has, of course, been raised before, and I dealt with it in my winding-up speech on the Budget Resolutions. The case of the old-age pensioners is very near our hearts, but the question we want to ask from this side of the House is, why was it left to this Government last year, in the Budget, to make the first attempt for a very long time to raise the pensions of the old age pensioners?
  Mr. Gaitskell: The right hon. Gentle-man knows perfectly well that we put up the pensions in 1951, and he only raised the pensions in 1952 because he cut the food subsidies.
  Mr. Butler: The right hon. Gentleman made various adjustments in the old age pensions, which very considerably annoyed a great many of his supporters, and the increases which we introduced pleased not only our side of the House, but also hon. Members opposite. It has also been noticed by the old age pensioners, and when the hon. Lady the Member for Coventry, South says that nothing in the reduction of Purchase Tax helps old age pensioners, I point to one of the larger reductions, that on pipes, tobacco smoking equipment and so on, which has been reduced from 66⅔ per cent. to 50 per cent., which in itself helps old age pensioners.
  718
  I do not believe that a great many of the other things, which are included in the reduction from 33⅓ per cent. to 25 per cent. and which include a great many articles like shaving articles, paper, postcards, pens, playing cards and many other things, would not be useful to any section of the population, including old age pensioners. I say, therefore, that the hon. Lady is exaggerating in her statement about old age pensioners.
  Then there are wireless batteries, which are relieved of Purchase Tax altogether. Wireless batteries are much used by old age pensioners and by rural residents in those northern climes from which the hon. Member for Orkney and Shetland (Mr. Grimond) comes, and those people, I am sure, are very grateful that they will have no Purchase Tax to pay in future on their wireless batteries. To say that we have not thought of lonely people, perhaps of a considerable age, living in cottages, is nonsense in this connection.
  I have been asked a good many questions about textiles, especially by the hon. and gallant Member for Down, South. We had better discuss textiles during the Committee stage. I will only remind the House that last year textiles profited to the tune of £17 million, quite apart from the £20 million voted by the House in aid of production, that it was due to the action of this Government that the textile depression was saved and that over 100,000 people were restored to employment by the latter part of this last year. That is one of the many answers to right hon. and hon. Gentlemen opposite who say that we have allowed production to decline, when they know perfectly well that we inherited, in the textile industry and elsewhere, a situation of declining production which, largely by our own efforts, aided by the more sensible members of the committee, we were able to restore.
  Further, when it is said that this Bill does not help the textile industry, I can assure the House that the reliefs in industrial taxation and the reliefs in personal taxation will be felt, I hope, as much by the textile areas, which we all want to help, as by any other section of the population.
  Now I come lastly to Income Tax. A great deal of play has been made with the fact that, owing to the present structure of the tax, it is alleged that the bachelor

  719
  and those without families and unearned income and so forth, get more benefit than anybody else. First, I am glad to know, from the speech of the right hon. Gentleman the Member for Battersea, North (Mr. Jay), that the bachelor with £100,000 a year appears to have died, because the right hon. Gentleman quoted today a figure of £20,000. So he has come down to one-fifth. I presume that the bachelor with £100,000 has married his housekeeper to get the housekeeper allowance, but I understand from the Inland Revenue that she had four children and so he has come a great way down in the Table.
  But, taking the position of the family and the bachelor, surely the commonsense answer to right hon. and hon. Gentlemen opposite is this. That so much has been done for the married man by way of Income Tax relief already that naturally the people left at the top who now get the opportunity of most relief are those who have not had the reliefs before. That is the way we look at what I did last year. There is no need to go back to previous Chancellors.
  Last year I myself increased the child allowance to £85. That means that the child in the particular family to which the right hon. Gentleman was referring already gets an increased allowance due to the Conservative administration. Further, besides the Income Tax reliefs we gave last year, which included the alteration in the earned income relief, from one-fifth to two-ninths, about which there has been so much talk, we widened the bands of the Income Tax and increased family allowances from 5s. to 8s. Therefore, to come along and look at this Budget in isolation and say that we have done nothing for the family man, is most unjust and has already been observed to be so by the general electorate of the country.
  The next point I will take in regard to this is to answer the hon. Member for Barnsley and others who have said that we are widening the gap and indulging in some sort of new social philosopy
  720
  which is evidently extremely anti-social in the eyes of hon. Members opposite. It so happens that if hon. Members had paid some attention to the re-adjustment in the lower rates of Income Tax in this Budget—that is, the reduced rates—they would see that whereas before the lowest rate was 3s., it is now 2s. 6d. In the old days before this proposal the top rate was 19s. 6d. The result is that previously the top rate was 6.5 times as much in each pound as the lowest rate and, thanks to our alteration, actually the gap has been lessened and now the top rate is 7.6 times as much as the lowest rate. So much for all this nonsense from the party opposite about our efforts to widen the gap which has, in fact, in the ratio of 7.6 to 6.5, been narrowed by the proposals in this Budget.
  Therefore we come back to the main point raised by hon. Gentlemen opposite, that, because of the fears that have been expressed, they would find it impossible to lower the main standard rate of Income Tax in the manner I have done by 6d. All I can say is that they have talked a great deal about us being anti-social; but the most anti-social step which could have been taken by any Government at all would have been the ruin of our finances, and particularly our overseas finances, which were inherited by us in a very low state when we came into power. The country was then facing a raging inflation, and a very heavy drain on our life-blood overseas. Had this state of things continued, the working people of this country would not have been able to afford the raw materials, or the food, upon which they depend for their very living.
  We have taken this fundamental step; we have given a spur to the country, and we hope that we shall be able to go forward with this Bill and finish the job.
  Question put, and agreed to.
  Bill accordingly read a Second time.
  Committed to a Committee of the whole House.
  Committee upon Monday next.

  ARMY AND AIR FORCE (ANNUAL) BILL
  Order for Second Reading read.
  Motion made, and Question proposed, "That the Bill be now read the Second time."
  11.1 p.m.
  Mr. James Simmons: We cannot, I believe, give a Second Reading to the Bill until we have heard something from the Secretary of State for War, and it seems rather peculiar that this Bill has been formally moved, without there being any explanation before we come to the discussion. Last year, the right hon. Gentleman gave us a pledge. The Bill, as all hon. Members know, is for the continuation of the Army Act, and that appears to be the sole purpose of the Bill. At the end of April last year, the right hon. Gentleman said that this year we should have an Army Act which was up-to-date, and worthy of the Army and the Royal Air Force. Well, we have not got that new Act, and that certainly creates a difficult position for us and makes it inadvisable that we should allow the Second Reading to go through "on the nod."
  Traditionally, the Second Reading of this Bill does go through "on the nod," and discussion takes place on the Committee stage. I am a great believer in tradition—in regimental tradition, but not in that sort of tradition which stultifies, and so I must raise my voice on the subject before the House tonight. There is some doubt as to the scope of the Amendments which will be possible, whether Amendments can be put down, or whether they will be called, because of the altered form of the Bill. On the admission of the right hon. Gentleman, we are tonight taking the first effective step in re-enacting antiquated laws to deal with modern soldiers; and yet we are precluded, by the very nature of the Bill before us, from dealing with these anomalies by legislative action. Therefore, we feel that, being so precluded by legislative action, we should be allowed to ask the right hon. Gentleman to mitigate their effect by administrative action until such time as the new Army Act is ready.
  722
  If we look at the long Title of the Bill, which I presume we are able to discuss on Second Reading, we read:
  "And whereas no man can be forejudged of life or limb, or subjected in time of peace to any kind of punishment within this realm, by martial law, or in any other manner than by the judgment of his peers and according to the known and established laws of this realm; yet. nevertheless, …"
  Then certain words follow, and it continues:
  "a more exemplary and speedy punishment than the usual forms of the law will allow: "
  That is the Preamble to the Bill. It is frightening, it is ferocious and mediaeval. It would not look good on a recruiting poster.
  Mr. Speaker: I must remind the hon. Member that this is merely the Preamble to the Bill; it is not the Bill itself.
  Mr. Simmons: Yes, Mr. Speaker, but it tells us the purpose of the Bill, and I submit with respect, that before we agree to the Second Reading of the Bill we have to agree to the purpose for which the Bill is submitted. We have a right to see that the purpose is one which merits our support.
  Mr. Speaker: The purpose of the Bill is to continue the Army Act, and really the only subject discussable on Second Reading is whether or not we are to continue to have a disciplined Army and Air Force. Other considerations are out of order at this stage.
  Mr. Simmons: Yes, Mr. Speaker, that is what I am trying to get at—whether this Bill is the right instrument to continue the discipline and management of the Armed Forces. We should not pass this Motion without calling the attention of the Secretary of State to the dangers implicit in the sentiments I have just read, which are the purpose of the Bill, and without putting in a plea for some mitigation of these conditions which arise govern the lives of our fellow citizens in uniform for the next 12 months, until a new Army Act is before us. These are points on which we should have some assurance before we agree to the Second Reading of the Bill, and accept that it is the right instrument to continue to maintain the discipline of the Forces.
  We are the guardians of the rights and liberties of fellow citizens in uniform, whose lives will be governed for the next

  723
  12 months by the provisions of the Bill. I would not be surprised if among the many cultured and educated young men now called up for National Service there are men who have copies of the Army Act in their possession. I ask the Secretary of State to consider what will be their feelings if this antiquated Act, governing their lives as the only instrument to maintain discipline and regulation of the Army, is to continue. I think that their intelligence would be insulted and the prestige of those who use such an antiquated and out-of-date instrument would be lowered.
  This instrument is incapable of achieving the intentions which we are asked to approve on Second Reading, and, later, in Committee and on Third Reading. I hope that the Select Committee will give us and the Secretary of State a better instrument, though the absence of a single ex-private soldier on that Select Committee makes me doubt whether that will happen. I feel I have discharged my duty to my fellow citizens in uniform by reminding the Secretary of State that, in spite of his promise last year, our soldiers are still to be under the discipline and conditions imposed by this antiquated Bill for the next 12 months. I ask that this Measure should be administered, not in the letter of the bad old days, but in the spirit of those who are serving on the Select Committee and whose report we hope soon to receive.
  11.11 p.m.
  Lieut. - Colonel Marcus Lipton: You have ruled, Mr. Speaker, and if I may say so with respect, very correctly, that the scope of the discussion permitted on Second Reading is to be confined to whether we are to have disciplined Armed Forces. That is the primary object of the Bill. It is made clear in the Preamble.
  I have a very serious point to raise, and a serious charge to make, which can only be made on Second Reading. It cannot be made during the Committee stage, because the point is not susceptible to being formulated by way of Amendment. The accusation I wish to make is that the whole basis of discipline in the Army has been gravely and adversely affected by a pronouncement by the Prime Minister a few days ago. It is
  724
  the tradition and the practice of this House that when the Prime Minister makes a statement it must be accepted as a statement of Government policy. When a Minister makes a statement it is possible to put a Question to the Prime Minister asking whether that represents the policy of Her Majesty's Government. But when the Prime Minister makes a statement such a Question cannot be put.
  I was horrified and disgusted to hear the statement made by the Prime Minister in this House on 30th April. Reference was being made to an action taken by another Government in offering certain pecuniary rewards—
  Mr. Speaker: I cannot see how the hon. and gallant Gentleman can bring this matter within the bounds of the Second Reading of the Army and Air Force (Annual) Bill. It seems to me very remote.
  Lieut.-Colonel Lipton: I have not yet got to the point.
  Mr. Speaker: In that case I hope the hon. and gallant Gentleman will soon get to it.
  Lieut.-Colonel Lipton: When I quote the statement it will be seen to have a very direct relevance to discipline in the British Armed Forces, because the statement which the right hon. Gentleman made was:
  "… it does seem to me very much better to bribe a person than to kill a person—and very much better to be bribed than to be killed."—[OFFICIAL REPORT, 30th April, 1953; Vol. 514, c. 2356.]
  I wish to ask the Secretary of State for War if he subscribes to that statement, and whether the Army Council were consulted before a statement of that kind was made—
  Mr. Speaker: Order. I am afraid that if the question was asked I could not allow the right hon. Gentleman to reply. It is completely out of order on this stage of the Bill.
  Lieut.-Colonel Lipton: In any event, Mr. Speaker, this is the position which arises. I will not quote any field of military operation in which British troops are engaged, but let us assume British troops are engaged in hostile operations in the Asiatic State of Ruritania. If the opposing enemy forces make an announcement to the effect that any

  725
  British soldier who went over to the other side would be suitably rewarded, otherwise he was liable to death in the near future, then that British soldier would be entitled and able to plead by way of defence, if he were brought to book on that issue, the statement the Prime Minister made, that it is better to be bribed than to be killed, as his answer to any court martial proceedings.
  That seems to represent a very serious and damaging statement and one liable to have the most undesirable repercussions throughout the whole of the British Armed Forces. It does strike me as being most inimical to the kind of discipline which this Bill is going to enforce.
  Mr. Speaker: That is quite out of order, and quite irrelevant to the Bill.
  Lieut-Colonel Lipton: In those circumstances, I shall consider myself bound to leave this point for the time being, reserving to myself the right, on a more appropriate occasion, perhaps, to challenge the Prime Minister's statement and to seek another opportunity of finding out what kind of effect a monstrous statement of that kind is going to have on the discipline of the Armed Forces.
  11.18 p.m.
  Mr. George Wigg: I want to say a word or two about the circumstances in which this Bill is presented in this form. It is, I think, the first occasion that the Army and Air Force (Annual) Bill has been presented for a Second Reading in a form which confines it to the task of continuing the Army and Air Force (Annual) Act for another year, and omits to contain provision for the amendment of that Act. I do not dissent from that procedure. I think it would be extremely difficult, and, indeed, very unwise, to attempt a piecemeal amendment of the Act. But, I do think that the Government, the Secretary of State for War and the Leader of the House might have been a little more careful before presenting the Bill in this form.
  While I myself may not want to put down an Amendment, it is a different proposition to find that I cannot do so if I wish to. I do not charge the Leader of the House or the Secretary of State for War with bad faith. I do not think
  726
  for a moment that they have tried to, what I might call "pull a quick one," but the facts are that the Bill, as presented, prevents any hon. Member from having an Amendment called which would undertake the general amendment of the Act. It may have been very difficult for the draftsmen but it would have been the minimum of efficiency to have had some consultations between the Government and the Opposition.
  What the Government have done is to take away the right of the Opposition to put down an Amendment to this Bill, and in future some subsequent Member for Hornchurch, and one of your successors, Mr. Speaker, can quote what happened on this occasion as a precedent. It would be most unfortunate if we did not have an explanation from the Government about how this came about and why this one occasion is made a special case.
  I quite agree that it is difficult to ask the Government now to take this Bill back again, but I think they ought to take it back and try to draft it in such a form as would permit general Amendments being put down with some hope of being called. I do not want to press this beyond your toleration, Mr. Speaker, or to transgress the bounds of order, but I am trying, within the rules of order, to make what is an important constitutional point.
  The Army and Air Force (Annual) Act is an important occasion for the Opposition—indeed, for every Member of the House. It is the one occasion on which the House seeks to keep control of the raising of the Armed Forces, and it seems to me very unfortunate that, without any adequate explanation, the Government have taken away the right of general amendment from the Opposition, and indeed from every Private Member of the House.
  The Lord Privy Seal (Mr. Harry Crookshank): As the hon. Member keeps bringing me into this matter, though it does not concern me, and my right hon. Friend the Secretary of State for War, is to reply, let me say that if he cares to look at what I said yesterday in reply to the Leader of the Opposition, he will see that I said that I was advised that the Bill as presented does not prevent Amendments being put down and carried, if they are in order.
  Mr. Wigg: It is very good of the Leader of the House to put it in that way, but he knows perfectly well—and this will be subsequently put to the test —that the scope of the Bill, drafted as it is now, limits the character of the Amendments which can be put down. He will find when we get to the Committee stage that general Amendments—
  Mr. Crookshank: That is not what the hon. Member said. He said that no Amendments could be put down. I said that Amendments could be put down but it rested not with me or with the Government, but with the Chair, to say if they were in order.
  Mr. Wigg: I have acquitted the right hon. Gentleman of the intention to "pull a quick one," but he knows that when one talks about putting Amendments down one is talking a kind of Parliamentary shorthand; one talks of putting Amendments down in the hope of them being called. It is no good putting them down if they are not going to be called. While I recognise that it is not for the Leader of the House to say whether they are called or not, he has some responsibility to the House for the form in which the legislation is presented. He might, either across the Floor of the House or through the usual channels, have acquainted the Opposition that the form in which this Bill is presented gives very little opportunity for general Amendments to be moved.
  Therefore, whether the Government intend it or not, the effect is that the limitation of the scope of the Bill puts forward this principle: the Opposition can only amend the Army and Air Force (Annual) Act provided that the Government want to amend it as well. That is a very strange doctrine indeed. It is a very novel doctrine, and I should have thought that at the commencement of this Bill tonight we ought to have had a word from the Secretary of State for War or the Leader of the House.
  Mr. Speaker: Perhaps the House would like me to make a short reference to this matter, since it has been raised by the hon. Member for Dudley (Mr. Wigg). This afternoon we had some discussion upon the matter, and I was asked about Amendments in the Committee being in order. I said that the question of what Amendments in Committee were in order was entirely one for the Chair-
  728
  man of the Committee. The right hon. Member for Easington (Mr. Shinwell) said: "It is not a question of whether Amendments are in order. The question is whether Amendments can be submitted." He went on to say that after inquiries he understood that no Amendments could be submitted.
  I then said that I thought there must be some misunderstanding because that was not my idea of the position. I find that the position is as I thought it was. There has been some misunderstanding, but not on the part of the Officers of the House. The position is that any hon. Member can put down any Amendments, but it must be abundantly clear to the House that the question of what Amendments are in order in the Committee and what Amendments are selected for the Committee is a matter entirely for the Chairman of Ways and Means and not for me.
  11.25 p.m.
  Mr. Stephen Swingler: I am most grateful for your Ruling, Mr. Speaker, because I submit that it is quite wrong for hon. Members to prejudge the question whether this Bill is amendable or not. As I understand it, your Ruling means that it is entirely within the prerogative of the Chairman of the Committee. The question which we shall have to put to the test, when we come to the Committee stage, is how far we are permitted to raise discussions on various aspects of the principal Acts which are continued in force by this Bill.
  The Second Reading debate on this Bill is unprecedented because the character of the Bill is unprecedented this year, and that is something to which we ought to draw attention. It is unprecedented in the fact that this Bill merely seeks to continue in force the principal Acts in all their admitted obsolescence. A second unprecedented feature is the fact that there is a Select Committee considering the Army and Air Force Acts, and that, again, is one of the reasons why the Bill is in this very restricted form.
  As my hon. Friends have mentioned, it is being argued that because of the restricted scope of this Bill it will be impossible to have the usual kind of discussion on the Committee stage which we normally have on the Army and Air

  729
  Force (Annual) Bill, because one can only seek to amend the actual words and Clauses of the Bill, which are restricted to the continuance in force for another 12 months of the principal Acts. That is what is being argued and what will have to be raised on' the Committee stage. But, notwithstanding the fact that the short title has been previously used, as the Leader of the House said yesterday— he drew attention to the fact that the short title which we have in this Bill was also used in the Bills produced in 1948, 1949, 1950 and 1951—the difference is that there were Amendments amending the Clauses contained in those Bills, and, therefore, their scope was not restricted merely to continuing in force the principal Acts. Other Amendments could be brought within the scope of those Clauses.
  The difficulty in which we are placed is this. Last year the Minister held out the hope, when he agreed to the establishment of a Select Committee on this matter, that by 1953 there should be produced an entirely new and up-to-date Army and Air Force Act. That merely shows how the Ministers concerned under-estimated the task that was being given to the Select Committee. In fact, the Select Committee have been unable to complete their task, and I can quite understand why. I appreciate their special Report to the House to the effect that the House should not seek by piecemeal methods to put Amendments into this Bill on the subjects which they had already covered in their work.
  It seems to me to be entirely wrong to argue that because the House has agreed to establish a Select Committee to inquire into the obsolescence of the Army and Air Force Acts that, therefore, the rights of hon. Members to raise and debate matters in regard to this Bill should be taken away. Only a small number of hon. Members are working on the Select Committee. It is a very distinguished gathering,' I agree, and is working very arduously and very carefully on the tasks submitted to it.
  Nevertheless the House has the responsibility of considering annually the question of the discipline and regulations of the Army and the Air Force, and it appears to me to be wrong to argue that because a small number of hon. Members are going into the whole subject of the antiquated regulations and Clauses
  730
  that exist in the Army and Air Force Acts other hon. Members should be not able to raise and discuss these matters. That point might arise. We may find that there will be no Committee stage—probably for the first time in the history of Parliament—on the Army and Air Force (Annual) Bill. It may be ruled that because of the restricted scope of this Bill no Amendments would be in order— for the reason that there are no amending Clauses in it which have been submitted by the Government because, they say, "A Select Committee has been set up."
  It means, therefore, that the establishment of a Select Committee—which was agreed to last year precisely because hon. Members demonstrated how obsolete and antiquated these Acts were—is going to be used as a reason for taking away from hon. Members their rights and responsibilities for submitting Amendments and points on the Committee stage. That appears to be a reason for extending the Second Reading debate this year. It has been very often argued that the Second Reading of this Bill should go through "on the nod" as it is always possible to raise points about the discipline and regulation of the Army and Air Force on the Committee stage, but if we are not to have a Committee stage we are entitled to enter some protest at the fact that, apart from those few Members chosen to sit on the Select Committee, we are not being given the opportunity of discussing the regulation and discipline of the Army and Air Force.
  I do not think that this has been done deliberately, but the Government should be asked to think over the implications of this question because of the serious precedent which is set. In future there may not be Select Committees sitting, but if what we fear happens this year on this Bill, Governments in future will always know how to obtain the Army and Air Force (Annual) Bill without having any discussion of the Army and Air Force. It has never happened before. There have always been amending Clauses. We should be given some assurance that this is not going to develop into a technique for gagging the House and preventing discussion of important matters, and that the Government will reconsider the scope and formulation of this Bill so that points may be made.

  731
  It may well be that the Select Committee will not be able to report next year. I have read their Report very carefully and have studied the Acts concerned, and I consider that it is extremely likely that we shall be faced next year with precisely the same situation as now —that the Committee will not have completed their work. They have an enormous task before them in reviewing these Regulations. We may, therefore, have a similar Bill next year, and we shall then have gone two years without having had an opportunity to review these matters. We shall then have handed over our whole responsibility for the annual review of the Army and Air Force Acts to a small minority group of Members sitting on the Select Committee.
  That would be wrong, however distinguished the Members may be. There are—or ought to be—Members on both sides of the House who want to raise matters with regard to this Bill. There always have been in the past, according to the debates which I have studied. This is in no sense a party matter. We should continue that tradition. Parliamentary control over the Army and Air Force should be retained.
  I am, therefore, concerned about the nature of this Bill, and about the situation with which we may well be faced when we reach the Committee stage. I hope that the Minister will indicate that serious thought has been given to this matter, and that we shall have some assurance, either in regard to the redrafting of the Bill—if that is technically possible—so as to allow general Amendments to be debated on the Committee stage, or, at any rate, that this situation will not arise again.
  11.35 p.m.
  Mr. A. Fenner Brockway: I do not want to evade your Ruling, Mr. Speaker, and I do not want to speak for the sake of speaking, so I should like to ask for your guidance on the matter I wish to raise, and to learn from you whether you regard it as in order on the Second Reading of this Bill. The Bill provides during 12 months for the discipline and regulation of the Army and the Air Force. I want to raise the question of the position of conscientious objectors. Obviously, they are very con-
  732
  cerned with the discipline of the Army. However, I do not want to evade your Ruling, Mr. Speaker, and I therefore ask for your Ruling on this point before I proceed.
  Mr. Speaker: I am obliged to the hon. Member. That would not be in order on this Bill.
  11.36 p.m.
  The Secretary of State for War (Mr. Antony Head): I have listened with attention to the points which hon. Members opposite have raised concerning this year's Army and Air Force (Annual) Bill. I should like to be frank with hon. Members opposite about the whole position. I am sorry, personally, that the general tenor of feeling of hon. Members opposite about this Bill should have arisen when the Select Committee itself has been working in such marked harmony on this subject. I accept full responsibility for any difficulties, misunderstandings or sense of grievance that hon Members opposite may have, but I personally—I may be wrong—have no sense of guilt on the subject. I shall endeavour to explain why.
  It would be fair to say that the House had two ways in general of dealing with this Measure year by year. The first, which obtained when we were in Opposition, was to treat it as an annual formality which had to be gone through in order that we could have an Army. We generally confined our remarks about the Army to the debates on the Army Estimates and Supply days. Protracted debates on this Bill were not a feature of the period when we were in Opposition. I was present on all those occasions after the war. I am not denying there may have been small Amendments, but there was no attempt to go into the Bill as a Bill in the ordinary way. The other alternative way the House had was to consider the Bill as an ordinary Bill.
  Hon. Gentlemen opposite had six years as the Government, and the Act was their Bill. They carried it and left it, and I inherited it; and I inherited with it an Augean stable. Never had there been an Act so out of date and so full of anomalies. But it belonged to hon. Gentlemen opposite. They had six years to right it.
  Mr. Simmons: The Tories had 606.
  Mr. Head: We had to introduce a major amendment to the Act for the 22-year engagement. Hon. Members opposite, especially those of the legal persuasion, licked their lips at it. It made their hair stand on end. Down went a very large number of their Amendments to our Bill. It was as a result of that that the Select Committee was appointed. It will, in the long run, be a great blessing to the Forces that the Select Committee was appointed.
  I knew long ago another Bill would have to be brought in, and I asked the Under-Secretary of State, who is on the Select Committee, "What are we going to do about the Army and Air Force (Annual) Bill?" He sought the opinion of the Select Committee about what form it should take and what we should do. The Select Committee's advice to me was, "We are in the middle of this task. We cannot put forward half our recommendations. We have not finished our work. To take two bites at the cherry would be most unwise. We suggest that the whole question be left over until we have completed our report." I believe that to be a sound recommendation.
  I ask hon. Members to put themselves in my position. Had they been responsible for this Bill would they have tried to put down some small Amendment when a Select Committee is dealing with this Bill which has remained uninter-fered with for so many years? I suggest to take such a step would have been ludicrous. Therefore, I presented the Bill completely without amendment. When I did so—and I frankly admit this to the House—I had no idea whatever that that action, which was taken in good faith, might limit or even preclude hon. Members opposite from putting down Amendments.
  Hon. Members ask why I did not consult the House about this matter. In so far as the form of the Bill limits discussion, again my answer is that I was unaware of the fact. The first I heard about it was when I was told that hon. Members were feeling aggrieved that they could not put down Amendments. There have been a great many remarks about Amendments which hon. Members wish to put down, but I am a little sceptical about the worthwhileness of some of those Amendments. We have a Committee representing both sides of the House doing a worth-while job.
  Mr. Simmons: But no privates.
  Mr. Head: I thought at first the hon. Member said, "No politics," and that would have been true of this Select Committee. The Amendments which hon. Members feel they ought to put down would have been very mild and unimportant compared with the work of the Select Committee.
  It has been suggested, also, that this Bill restricts the House's ability, on this particular occasion, to raise matters concerning the Army. There are usually very long debates on the Army Estimates, and I understand that that debate can go to 10 o'clock the next morning. In addition to the Army Estimates, there is the opportunity afforded by Supply days. I should also like to inform the hon. Member for Newcastle-under-Lyme (Mr. Swingler), before he gets to his feet—and perhaps I might answer the question he intends to put— that if he desires to deal with the matter from the purely legal aspect of the Bill, surely to attempt to tinker with the subject when the Select Committee is considering the matter is a very dubious way of trying to put some particular thing right.
  Mr. Swingler: This is a serious point. Is the Minister saying that until the Select Committee has completed its work of reviewing the whole Army Act and the whole Air Force Act, and is able to make its recommendations and produce a completely new Army Bill and Air Force Bill, nothing should be done to alter existing Regulations and the existing form of the Army Act at all? That may have serious implications. Supposing in 12 months' time the Select Committee has not completed its work?
  Mr. Speaker: I can assist the House on that. What happens in 12 months is not a matter about which we need trouble ourselves tonight, for this is an annual Bill and it is bound to be introduced again then, as the House will only be passing this Bill for a year.
  Mr. Head: I would say that if there is some particular point concerning the Army Act about which the hon. Member is worried, and which he thinks needs urgent consideration, then it is perfectly legitimate for him to make representations to his hon. Friends on the Select

  735
  Committee first; and if he thinks that the matter is more urgent and of very serious consequence, then it can be raised on the Army Estimates. Lastly, if he thinks it is a very serious matter, I will be delighted to discuss it with him to see if it can be righted, or I will put down an Amendment myself.
  What I am saying is that this Bill is not attempting to gag hon. Members or an attempt to prevent them from expressing legitimate points concerning the Army. I always welcome such points. Nothing I have done in the introduction of this Bill has been designed in any way to prevent hon. Members from speaking their minds and debating necessary points. If there has been a misunderstanding I hope that it will be forgotten because of the very satisfactory and harmonious work now being carried out by the Select Committee.
  Question put, and agreed to.
  Bill accordingly read a Second time.
  Committed to a Committee of the whole House.—[Sir H. Butcher.]
  Committee upon Monday next.

  MENTAL PATIENTS (HOSPITAL BEDS)
  Motion made, and Question proposed, "That this House do now adjourn."— [Sir H. Butcher.]
  11.45 p.m.
  Mr. H. Hynd: The lack of accommodation for mental defectives is a tragedy which can best be appreciated by the people immediately concerned and by their families, but I am certain that hon. Members have enough experience of this matter to acquit me of any charge of wasting their time in asking them once again to look at the present position. I say "look at it again" because, in November last year, the question was brought before us by the hon. Member for Billericay (Mr. Braine) and my hon. Friend the Member for Liverpool, Exchange (Mrs. Braddock).
  It is a question that is brought frequently to the notice of every hon. Member of this House and I certainly have had some painful cases in my constituency. I had intended to open this evening by
  736
  quoting a specific case. I am happy to say that that case has now been settled to the extent of the boy concerned having been admitted to a hospital this week. I hope the hon. Lady the Parliamentary Secretary will not accuse me of any lack of gratitude if I make this comment about that case—that I believe we are finding too frequently in the House that when hon. Members use the big stick, as it were, about a particular case, something is done about it out of the ordinary course.
  I say that because in the letter I received from the Minister of Health on 14th April it was admitted that the case of which I am speaking had been on the waiting list for admission to a mental deficiency hospital since June, 1951. The letter went on to tell me that there are seven other boys of similar age and type on the waiting list whose admission is of greater urgency than this one, and at least three others of equal urgency. It explained that until there is an improvement in the position, and it appears that there is little prospect of this at the present time, the board are unable to do anything for those cases.
  As I say, I am grateful that this boy has been admitted, but it seems a little unsatisfactory and I have a slight twinge of conscience if he has been taken out of course and put ahead of what I am told are more urgent cases. However, I do not press that. I am more concerned with the general problem and the general shortage of this accommodation throughout the country.
  As far as I can understand, the total number of mental defectives of all ages in England and Wales is 148,000. I take that figure from the current Annual Report of the Ministry of Health. The Minister told us in a written answer on 8th July, 1952, that over 48,000 of those are occupying beds in mental hospitals. He also said that there are 8,000 awaiting admission, and I gather that 664 of those are in the Manchester Regional Hospital Board area which covers my constituency.
  The Parliamentary Secretary told us in the Adjournment debate to which I referred a moment ago that 15,000 more beds are needed for such cases, and I think that illustrates the magnitude of the problem. That is one side of the medal. The other side of it was also mentioned

  737
  by the Parliamentary Secretary in the same debate, when she told us that there are actually 2,693 beds not being used, for various reasons, mainly shortage of staff.
  That is a very serious problem which, I know, is not confined to mental deficiency cases. Unfortunately, it is a general problem throughout our hospital services, and I understand that in the case of the Western Hospital, Fulham, London, there are no fewer than ten wards which are not in use. Surely, that is a very serious state of affairs, and I do not know what the Minister is doing about shortage of staff, or what is the reason for it.
  I know that there has been a recent increase in wages; so perhaps it is not pay which is the cause, but, whatever it is, there is a remarkably large proportion of foreigners in our hospital service today, and not nearly enough domestic or nursing staff. Therefore, there is this two-fold problem of obtaining more accommodation, and finding ways and means of utilising to the full extent the beds which are already in existence.
  Tonight, I am most concerned with the age group five to 15 of both sexes; because, while infants are more easily handled by their mothers, the children, when they get to school age, become something of a handful and mothers find they are unable to cope with them. This is a terribly serious problem in some homes; so much so, that there have been cases of suicide of one or other of the parents who has found the burden too much. Also, it is the five to 15 group which is in the formative stage when, if anything can be done by medical science and by those who specialise in this work, it must be done.
  It is also the largest age group of the classes awaiting admission to hospitals. I make that last remark on the basis of a sample census in Middlesex, where the age group 0 to four was 75 awaiting admission, five to 15 was 189, and from 16 onwards, 139. That is a total of 403, and 189 is a large proportion; it shows that this is the class to which attention might be directed as a priority.
  That is the problem. What are we to do? I admit at once that there has been great progress in the last few years in research into mental deficiency, and into the treatment of this
  738
  tragic disease. I should like to pay tribute to the hospitals and the staffs and the medical officers responsible, but the problem is such that nobody can be satisfied about what has been achieved. We have to ask continuously of the Minister what progress has been made, and what progress we can hope for in the near future. We have heard with great pleasure—and tribute has been paid in the Minister's annual report to it—of the work done by the voluntary bodies such as the National Association for Mental Health. I would draw attention to the fact that the President of the Association is the right hon. Gentleman the Chancellor of the Exchequer, and that may put a thought into the hon. Lady's head. Her right hon. Friend may not be unsympathetic if he is asked to provide some more cash for the work.
  Then there is the Mental After Care Association and a newer body, the National Association of Parents of Backward Children and other organisations. As an example of the very excellent work which is being done, I mention the home provided at Rainhill, near Liverpool, by the Association of Parents of Backward Children, and run for them—very sensibly—by the National Association for Mental Health. That kind of place is badly needed at present. I should like to see many more places of this sort set up, either by voluntary associations— perhaps with Government assistance—or by local health authorities. They already have authority to set up such homes. That authority was given by the Minister of Health in Circular 5/52 in January last year, but there is a snag in it and that may be why some local authorities have not taken advantage of the permission given them in the circular.
  A sentence in the circular says that if additional grant-aided expenditure is involved it should be offset by savings on other parts of the service. It is very regrettable that such a sentence should have been inserted. I am sure many progressive local authorities would be glad to take advantage of this permissive power but when they are asked to do so by cutting off some of the other good work they do I can understand their hesitation in adopting this permissive power.
  I should like to suggest one or two other ways in which this problem cannot be solved but may be ameliorated. One

  739
  is, again by using existing powers of local authorities, to provide guardians in suitable cases. Local authorities can spend money on guardianship and it is a very efficient way of dealing with the right type of case. Incidentally, it is cheaper than sending to an institution. There is the permissive power of setting up occupation centres for daily training and teaching to keep these people busy under proper supervision in suitable cases. That is one of the health powers delegated to county councils. I am told that there were 4,822 people attending such centres at the last count, but more than 7,000 ought to be in these centres. There is need for expansion of that work.
  What I believe to be even more essential is the provision of hostels to which mental deficients can go as an alternative to an institution. Again, it would probably be cheaper to send them there where they could do useful work, perhaps gardening, or going out to work and coming back to the hostel where they can be supervised in their leisure time. I suggest something along the lines of the probation hostels which many of us know well. Or that type of hostel can be used for patients released from institution on licence, thereby giving space for people who need beds as more serious cases.
  There is a suspicion, and I hope the Parliamentary Secretary can say something about this, that some of the high-grade patients in mental hospitals who are quite able to work and become very useful about the place, are not released as early as they might be because they are so useful. The staff concerned do not like to release them, and they are kept working when, for their own sake and for the sake of others, it might be better to let them go. Sometimes there is a sad case of a patient released on licence under the charge of a guardian who dies and, because he has nowhere else to go, the patient—who needs some kind of supervision—has to go back to the institution.
  This kind of half-way house which can be called a place of social rehabilitation is one of the ways suggested for dealing with the problem outside the actual provision of hospital accommodation. I hope the Parliamentary Secretary will be able to provide some hope that that
  740
  remedy will receive serious consideration. One or two such places already exist as a wing of a hospital, but there seems to be some difference of opinion about whether the cost should properly be borne by the Health Service or the county council. I am not interested in who should bear the cost. That is a secondary consideration. The important thing is to find the best way to deal with the situation.
  It was in 1929 that the last committee, the Wood Committee, dealt with the problem of the treatment of mental deficiency. I would ask whether the Parliamentary Secretary thinks that a sufficient time has elapsed, and when, following the developments in the study of this problem, we should consider setting up another committee to study the matter.
  12.2 a.m.
  Mr. Ronald Bell(Bucks, South): I intend to speak for only a few moments, because I am sure that the Parliamentary Secretary will wish to have as long as possible to reply. I wish to associate myself with what has been said by the right hon. Member for Accrington (Mr. H. Hynd). In broad outline the problem which seems to present itself is that the children who come under the responsibility of the Ministry of Health, because they have been medically certified as ineducable, cover a considerable range of mental defectives. There are. therefore, two problems involved.
  First, there is the problem of the mental institution, the difficulty of getting them into the mental hospital in order to take the burden off their unfortunate parents. There the difficulties are the shortage of accommodation and the even worse shortage of nursing staff. There is also the separate problem which ought to be faced, that up to now the nation has not been doing enough for these children.
  Once they are certified as ineducable there is no statutory duty to do anything about them at all. There are merely statutory powers for the local authorities to act if they feel so inclined. For those who are not hopeless cases there should be some separate provision so that whatever faculties they have can be developed to give them as much normal life as possible. Those who come under the Ministry of Education and those who are ineducable ought to be separated. My

  741
  view is that it will be necessary to organise this on a regional rather than. say, a county or a borough basis. Fortunately, the concentration of these children is not so high that any medical authority can separate them and provide institutions for the various different grades of ability. I think there is scope here for some Government initiative and I hope that my hon. Friend will say that something on these lines is being explored.
  12.5 a.m.
  The Parliamentary Secretary to the Ministry of Health (Miss Patricia Hornsby-Smith): As the hon. Member for Accrington (Mr. H. Hynd) has said, much of this ground was gone over in the debate initiated by the hon. Member for Billericay (Mr. Braine) and he will not expect me to go over the same details because he was so very familiar with them in his speech tonight. However. I can bring some of the figures up-to-date, but I would like to get two personal points out of the way beforehand.
  First, with regard to the case he raised with the Minister of the nine year-old boy. I confirm that my right hon. Friend did write to him and say that there were seven children of the same age and type on the Manchester list and that three had equal urgency. I must state most emphatically that this boy was admitted at Calderstones this week not as the result of any queue-jumping, but because a further visit and inspection was paid to his home, where it was found that his father was going abroad. It was realised that the strain on the mother alone, without the second parent to help her with a very difficult case, accentuated the difficulties and this gave that case increased priority.
  I would not like it to be thought that hon. Members, by Questions or Adjournment debates, can, in any of these cases, jump the queue. Cases are decided by the medical authorities and by them alone, and not by our Department on the political side. I can assure the hon. Member that we have such a waiting list that we have no desire to hold anyone we can safely let out. Often cases are pressed by anxious mothers, who are always very relucant to think ill of their own children. One can sympathise with them, but very often we, who are able to give Members of Parliament information about cases which one cannot make
  742
  public, know very well that those patients, within the ordered discipline and regular routine of the institution are quite different from when they are out in the world at large. We have no desire to keep in any case. We are only too anxious, when our medical advisers can fairly release anyone with safety to themselves and the public, to provide a vacancy for someone else.
  Steady progress although not as fast as we would like, is being made. The total number of in-patients at the end of 1952 had risen to 53,066 as against 51,194 a year previously. We have still, unhappily, a growing waiting list and a large proportion of them—about 4,000 out of 8,714—are children. That, again, reflects the same bulge in the age group which is the problem of education today, not that there is a vastly-increased proportion of children who are mentally deficient, but, in an increasing population, the proportion is about the same.
  So we have an increased number for whom to try to find space. They are now in the age group four to seven years when it is impossible, or difficult, to keep them at home. Therefore, they are making claims upon accommodation. We have, then, this bulge of some 4,000 children on the waiting list.
  There has been further progress in staffing the beds. The last figure I gave showed that at the beginning of January, 1952, there were 2,145 unstaffed beds. At the beginning of 1953, there were 1,587 unstaffed beds. But the problem is more nurses. The second problem is more buildings.
  I do not want to go over the problems we inherited—I dealt with those fully before—but I should like to emphasise the efforts that have been made in accordance with my right hon. Friend's oft pronounced principle that we must give priority to the mental side in capital expenditure. Areas have been told that they must do this. In the Leeds area, for example, in the two-year programme, out of an expenditure of £190,000 the sum of £102,000 is going to mental deficiency. In East Anglia, £49,000 is being allocated to mental deficiency out of £181,000 for the 1953–54 programme.

  743
  Manchester and Liverpool for this purpose must be considered together, because when the line was drawn between the two regions nearly all the Liverpool institutions happened to come within the Manchester Region, and, therefore by an arrangement between the two regions, in which they co-operate firmly, Manchester Region takes a lot of cases from the Liverpool Region. Manchester took over 6,420 beds of which 560 were unstaffed in 1948; 170 beds have been added. There were 55 unstaffed beds at Brockhall, which was reopened last year, and another ward is being opened within a few weeks. A 40-bed unit for adolescent boys is to be built in the Mary Dendy hospital. All the time we are encouraging recruiting campaigns for mental nurses and quite a number of foreign nurses have been recruited to help out the situation in this and other regional board areas.
  The top priority in our capital programme this year has been given to Greaves Hall, which is a very large project, for 1,040 beds. It is being built near Southport. The whole project will take five years and will cost £3 million. The largest single programme of capital expenditure has gone to that vast project for a mental institution there. The total cost, as I have said, will be just under £3 million. It will take five years to complete, but the first phase which is about to start will cost £676,000 and will provide for 170 new beds.
  At the same time, at the Harpenbury Hospital, St. Albans, another scheme is now two-thirds complete, costing £131,800, and in the last two financial years there has been an expenditure of £899,000 on improvements in the purchase of buildings and adaptations entirely for mental deficiency work.
  I hope that hon. Members will see that it was no empty promise when my Minister maintained that of the capital expenditure available to us we were determined to see that a very substantial proportion went to the mental deficiency side. We do not pretend that it is as much as we would like to have at our disposal for this very important and grave problem in the health service, but we
  744
  have seen that the allocation of priority has gone to that side of the National Health Service work.
  As far as staff are concerned—and this is an all-important problem—the staff in 1948 were 6,000 full-time and 1,500 part-time, and at the end of 1952 it was 6,610 full-time and 2,128 part-time, a steady increase, but we still require many more. The Minister's National Advisory Council on the Recruitment of Nurses and Midwives is, as the hon. Member knows, discussing all these problems now, and he will have heard from an answer to a Parliamentary Question this afternoon that already some of the recommendations that they have made from their survey of the problems of recruiting mental nurses have been put to the Minister, and my right hon. Friend is in the process of sending out recommendations to the hospital management committees concerned.
  The second part of their report still has to come, but the hon. Member will appreciate that we must await their full findings. The moment they are received they will certainly be acted upon. It is our greatest desire to see real progress made in this very grave problem, and I can assure the hon. Member that steady and increased progress has been made in the last 12 months. In the months to come the whole emphasis will be on trying to build up this neglected side of the National Health Service.
  Mr. H. Hynd: Can the hon. Lady say anything about hostels?
  Miss Hornsby-Smith: On the local authority side, it is a dual responsibility. A part of it is provided by the local authorities and a part by us. There is certainly encouragement for them to help, though possibly the accent is on the educationally retarded side rather than on the mental side.
  The Question having been proposed after Ten o'clock on Thursday evening, and the Debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at sixteen minutes past Twelve o'Clock a.m.

HOME DEPARTMENT
  Capital Punishment (Report)
  Capital Punishment (Report)
  Maximum Penalties
  Maximum Penalties
  American-Style Comics
  American-Style Comics
  Stolen Property (Recovery)
  Stolen Property (Recovery)
  ASSOCIATION FOOTBALL (ARBITRATION REQUEST)
  ASSOCIATION FOOTBALL (ARBITRATION REQUEST)
MINISTRY OF HEALTH
  Dental Fillings (Schoolchildren)
  Dental Fillings (Schoolchildren)
  Hospital Beds (Waiting Lists)
  Hospital Beds (Waiting Lists)
  Hospital Committees (Membership)
  Hospital Committees (Membership)
  Queen's Hotel, Harrogate
  Queen's Hotel, Harrogate
  Hospital Ancillary Staffs (Sick Pay Scheme)
  Hospital Ancillary Staffs (Sick Pay Scheme)
EDUCATION
  Retired Teachers (Pension Payments)
  Retired Teachers (Pension Payments)
  School Attendance (Potato Harvest)
  School Attendance (Potato Harvest)
  Mining Subsidence (Closed Schools)
  Mining Subsidence (Closed Schools)
  Simplified Spelling (Research)
  Simplified Spelling (Research)
  HIGH COMMISSION TERRITORIES
  HIGH COMMISSION TERRITORIES
TRADE AND COMMERCE
  Racial Discrimination (Hotels)
  Racial Discrimination (Hotels)
  Asparagus Imports
  Asparagus Imports
  Anglo-Brazilian Trade
  Anglo-Brazilian Trade
NATIONAL FINANCE
  Football and Cricket (Entertainments Duty)
  Football and Cricket (Entertainments Duty)
  Income Tax Act, 1952
  Income Tax Act, 1952
  Agricultural Production (Bank Advances Policy)
  Agricultural Production (Bank Advances Policy)
  CIVIL SERVANTS (RETIRING AGE)
  CIVIL SERVANTS (RETIRING AGE)
  LAID-UP TRAWLERS, HULL AND GRIMSBY
  LAID-UP TRAWLERS, HULL AND GRIMSBY
  HORTICULTURE (EXPERIMENTAL CENTRES)
  HORTICULTURE (EXPERIMENTAL CENTRES)
MINISTRY OF WORKS
  Government Buildings (Trooping the Colour)
  Government Buildings (Trooping the Colour)
  Old People (Coronation Facilities)
  Old People (Coronation Facilities)
  R.N. COLLEGE, DARTMOUTH (COMMONWEALTH CADETS)
  R.N. COLLEGE, DARTMOUTH (COMMONWEALTH CADETS)
  SOUTH GEORGIA (ELEPHANT SEALS)
  SOUTH GEORGIA (ELEPHANT SEALS)
  COLONIAL DEVELOPMENT AND WELFARE EXPENDITURE
  COLONIAL DEVELOPMENT AND WELFARE EXPENDITURE
  FAMILY ALLOWANCES
  FAMILY ALLOWANCES
AGRICULTURE, SCOTLAND
  Plotholders, Coalburn
  Plotholders, Coalburn
  Acreage Gains and Losses
  Acreage Gains and Losses

Preamble
The House met at three of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers

WHITE FISH AND HERRING INDUSTRIES BILL
3.5 p.m.
Order of the Day for the Second Reading read.
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE AND FISHERIES (LORD CARRINGTON): My Lords, the Bill which is before your Lordships this afternoon has three main objects: to encourage the rebuilding of our white fish and herring fleets; to provide for the white fish subsidy; and to make further grants to the Herring Industry Board. The fishing fleets may be divided into four parts: the distant water, near and middle water and inshore fleets—all of which fish for white fish—and the herring fleet. The distant water fleet is fully up to date, and the Bill is not concerned with it. I think I might say a few words about each of the others in turn.
The near and middle water fleet consists of the smaller vessels of between 70 and 140 ft. in length which fish off the Faroes, in the North Sea and in the waters nearer home. It is these vessels, together with the inshore fleet, which bring home the greater part of our prime and flat fish. Most of the vessels in this fleet are very old and need replacing. There are at present about 750 near and middle water trawlers, but of these only about 10 per cent. can be called reasonably modern, while 75 per cent. are more than thirty years old. In fact, most of them date back to the First World War. Many of these vessels are rapidly becoming unfit for service; and the strength of the fleet has been steadily declining for many years. In the last year or so the situation has worsened. During 1952, 65 vessels went out of commission, and in the first two months of 1953 the fleet has lost 16 more vessels. To offset these losses, only 10 new vessels were brought
324
into commission last year, and at the present time 13 are on the stocks. Your Lordships will appreciate that, if this rate of replacement is not increased, within a few years the fleet will fall to a dangerously low level.
The trouble is that, for those prepared to invest capital in the fishing industry, the distant water fleet at present offers a surer return than the near and middle water sections of the industry. This is due largely to the over fishing of the North Sea, upon which the near and middle water vessels depend. The cost of building these vessels has very greatly increased and, with falling yields, their prospects are not good enough to induce owners to replace obsolete vessels. As your Lordships will know, the International Over fishing Convention of 1946 has now finally been ratified and the Permanent Commission, which is to be set up under the terms of the Convention, is in fact meeting in London at the present time. I am sure we all hope that those measures already agreed upon in the Convention, together with any other measures which may be adopted on the recommendation of the Permanent Commission, will be effective in restoring the stocks of the North Sea.
But, in the meantime, something must be done to encourage the building of vessels for the near and middle water fleets, upon which, as I have said, we must rely for most of our supplies of the better kinds of fish. It was with this object that the Sea Fish Industry Act, 1951,provided for loans to be made by the White Fish Authority towards the cost of building new ships. Loans were offered to cover up to 60 per cent. of the cost of the vessels, but I regret to say that the response was very disappointing. The Government have, therefore, decided to provide for grants—in addition to loans—towards the cost of building near and middle water vessels, and we hope that these grants will be enough to encourage owners to replace the obsolete ships. The present Bill provides up to a total of £9 million for grants towards the cost of building new vessels for the white fish industry, and of this amount rather more than £8 million is intended for near and middle water vessels. This is covered by Clauses 1 and 2 of the Bill, which provide for grants up to 25 per cent. of the cost of building.

325
The inshore fleet consists of about 670 small vessels. Its contribution to white fish supplies is relatively small, but of high quality; and the inshore fisherman himself is a fine type of man, whose independence and self-reliance we should encourage. The inshore fleet is in better shape than the near and middle water fleet, largely because grants have been paid on new boats under the Inshore Fishing Industry Act, 1945, which expired in 1952. Even so, 30 to 40 per cent. of the boats are over thirty years old and need replacing. About £750,000 of the £9 million provided for in Clause 1 will be used for this purpose. In the case of owners who are working fishermen, we think it right that grants should be provided at a rather higher rate, and the Bill provides for grants to be paid to them up to a total of 30 per cent. up to a limit of £5,000, after which the grant will be paid at the rate of 25 per cent. For working fishermen, we are also proposing to offer grants up to 30 per cent. of the cost of new engines up to a limit of £1,250. This is because the diesel or petrol engines with which these small boats are equipped last only about half the lifetime of the vessel, and without these grants otherwise seaworthy vessels would be laid up.
The third part of the industry, the herring fleet, is in much the same case as the inshore fleet, Of 660 drifters, about 30 per cent. need replacing. Like the inshore fleet, the herring fleet has in part been rebuilt by grants under an earlier measure, the Herring Industry Act, 1944, which also expired last year, but there is still some way to go. Clause 6 sets aside £750,000 for this purpose. Most herring boats are, as your Lordships will know, worked by their owners, and like the inshore fishermen, the owners will mostly get grants at the rate of 30 per cent. We intend that these grants for new vessels shall be supplemented by loans made under the Sea Fish Industry Act, 1951, and the Herring Industry Scheme, 1951, and that both loans and grants shall be made by the White Fish Authority, or, in the case of herring boats, by the Herring Industry Board. These bodies will need additional power to finance loans by borrowing, and Clauses 3 and 7 of the Bill increase the borrowing power of the White Fish Authority and Herring Industry Board by £10 million and £1,500,000
326
respectively, for a period of ten years. The grants are to be made in accordance with a scheme to be drawn up by Ministers, which will be subject to an Affirmative Resolution of both Houses of Parliament. I have dealt at some length with the question of new vessels because this constitutes the main object of the Bill and forms the substance of the first three Clauses and Clauses 6, 7 and 11. I will now mention more briefly the other principal proposals of this Bill
The first of these concerns the white fish subsidy which we are now proposing to put on a statutory basis. This subsidy was originally introduced in 1950 as a short-term measure for six months only, and has subsequently been renewed at, roughly, six-monthly intervals. It has been paid under the general authority of the Appropriation Acts, and it has cost. on an average, about £1,600,000 a year. Its object is to help the inshore, near and middle-water fleets over the economic difficulties into which they have fallen, largely because of the over fishing of the North Sea. We think that it will be a few years yet before we can dispense with this subsidy, and for this reason we feel that it ought to be given specific statutory authority. Clause 5 of this Bill accordingly gives Ministers discretion to pay a subsidy during the period ending in March, 1958, up to a maximum of £7,500,000, with power to increase this sum up to £10 million by Order, subject to Affirmative Resolution in another place. The subsidy payments are required to be made in accordance with a scheme subject to Affirmative Resolution in both. Houses.
Finally, I come to the grants to the Herring Industry Board. In Clause 8 we seek power to make grants of a further £1,500,000 to the Board during the next ten years. The greater part of this sum is needed for financing the Board's scheme for converting surplus herring to oil and meal. Under this scheme the Board pay a guaranteed price to the herring fishermen for herring for which no other market can be found, and arrange for its conversion to oil, mainly for margarine production, and. meal for use as an animal feeding-stuff. The price offered though well below the price fetched in other markets, is invaluable to the fishermen in assuring him a minimum return on his catch, and by doing so encourages

327
him to go all out for maximum production, instead of hedging against bad markets by laying up his boat from time to time, or indeed, by dumping part of his catch. This scheme at present runs at a loss and the grants have been used mainly to underwrite the losses. The losses are largely due to the need to spend heavily on transporting the herring to conversion factories which are far away from the ports. Our idea is that the scheme will become self-supporting when the Board have erected their own plants at the herring ports, with the help of grants from the same source. The Board already have three factories working but their programme is not yet complete; and until it is, grants will be needed to complete it and bear the losses on operating the scheme meanwhile.
The remaining clauses deal with matters of detail and I need not detain your Lordships with an account of them, though I shall be glad to answer questions on any points which may not be clear.
This Bill carries a stage further the work which was begun earlier under the Herring and Sea Fish Industry Acts. Perhaps it is on a modest scale, but I feel justified in claiming that it is fundamentally important to the fishing industry. It is in essence a rescue operation but if, in combination with the earlier measures, it is successful it will restore the home water fleets to their former greatness. The Bill, I may add, had a good reception in another place, where it passed through all its stages with only one Division, on a minor point. I trust that your Lordships will show the same unanimity in welcoming what I regard as a highly desirable and useful Bill. I beg to move that the Bill be read a second time.
Moved, That the Bill be now read 2a.—(Lord Carrington.)
3.19 p.m.
THE EARL OF LISTOWEL: My Lords, this is not a contentious Bill but, as the noble Lord opposite has just said, it is a Bill of fundamental importance, because on its provisions will depend the livelihood of the many people at present engaged in our fishing industry. We are all grateful to the noble Lord, Lord Carrington, for the full account which he gave of the contents of the Bill and the
328
reasons why the Government have promoted it. It is not contentious, because it is one of the examples, with which we are now familiar, of continuity of policy over a long period of years and at times when different Parties have been in power There is, I am glad to say, continuity of policy in regard to the fishing industry. When my Party were in office, we found it esential to give financial assistance to the herring fleet, and also to the other parts of our fishing fleets which work off our coast and in adjacent waters, because we realised as clearly as noble Lords opposite that these sections of our fishing industry could not be kept going on purely commercial lines. Therefore, when we were in power we passed legislation to authorise assistance from public funds. The present Bill simply carries on this work. It proposes to provide more money by way of grants or loans for the same purposes.
I should like to say a word about the broad policy behind this measure. Although some noble Lords may disagree, my feeling is that it is not possible to justify the subsidising of the white fish industry on the ground of the requirements of our food supply. I do not think that is in itself a sufficient reason. Most of the fish consumed in this country comes from distant waters. The loss of the better quality fish which we get from adjacent waters would be small in quantity, and I cannot imagine that we should not manage to import at least as much food with the money which will be paid out in the form of a subsidy. We all like sole, turbot, halibut and so on, but these are luxuries and not part of the ordinary diet of our population. Surely the real justification for a Bill of this kind, with the very considerable expenditure of public money which it involves, is on defence, social and humanitarian grounds. Our fishing fleets are the reserves of the Royal Navy, and everyone remembers the splendid and hazardous work which the men who man these vessels did in two world wars. A serious reduction in the number of our fishermen or of their vessels would weaken the defences of our coastal waters. Of course, conversely, the better equipped our fishing fleets become—as we hope they will become, under the provisions of this Bill—the more effective they will be in the event of another war.

329
The humanitarian or social reason for this measure is that without it many villages on the coast of England and Scotland would, in the course of time, lose the best part of their population. In most of these fishing villages there is no alternative employment, and if the able-bodied men were not able to go out in their trawlers and bring in fish the inhabitants would simply drift away into the towns in search of work. I hope, therefore, that if the need for subsidising this large section of the fishing industry continues, as it may well do, for some time, we shall continue to support it on the grounds which I have given, regardless of Party and without looking for a commercial return. I think it is important for the stability of this industry and the security of the men who work in it that they should know that this support will continue, whatever Party may be in power.
There are two matters of rather special importance arising out of this Bill to which I would draw your Lordships' attention, and about which I should like to ask questions. And perhaps the noble Lord may be in a position to reply when he winds up. I believe that we shall all agree that if these near and middle sections of our fishing industry are ever to become self-supporting—and we all hope that we shall not have to continue to subsidise them indefinitely—we must stop the over-fishing which is at present depleting the stock of fish in these adjacent waters. Over-fishing is the real source of our difficulties. I realise that the main problem here has been to get international agreement, and here I should like the noble Lord to give me some information. I believe that there is no general agreement yet about the introduction of a minimum size of mesh for nets. I do not know whether that point is covered by the North Sea Convention, to which the noble Lord referred, and I should like to know whether it is. I should also like to know whether agreement has been reached about this vital measure of prescribing the minimum size for the mesh of nets, and, if not, when such agreement is likely. I hope that if general agreement is not reached with the other countries concerned with fishing in these waters we shall set an example by obliging our fishing fleets to stop this destruction of immature fish.
330
If, as a result of the passing of this Bill, we get a large number of much more efficient fishing trawlers, and this destruction of immature fish continues, the depletion of the stock of fish in these waters will become even worse.
The other matter about which I feel some doubt, and about which I should like to ask the noble Lord opposite, is whether we shall have sufficient control over the spending of these large sums of public money involved under the provisions of this Bill. It appears to me, from the terms of the Bill, that once a grant or loan has been made to a fishing company by a public authority which advances or gives the money, this public authority has no further say in its use. I wonder whether the Government would consider the desirability of the White Fish Authority, for example, being able to take shares as a condition of making a grant of money. I am not suggesting that the Authority should acquire a controlling interest—I do not think that is in the least desirable—but it might at least have a representative on the boards of some of the larger fishing companies. This would enable the White Fish Authority to be fully informed and to exercise some influence, at least over the expenditure of the money it advances. I believe that a procedure is required—not necessarily, of course, the procedure I have suggested—that would give public authorities more say in this partnership, which in itself is quite admirable, between public and private enterprise in the fishing industry. I hope that we may succeed in expediting this Bill and that it will receive here the common consent which it received in another place.
3.27 p.m.
LORD SALTOUN: My Lords, I was glad to hear the noble Earl who has just spoken welcome this Bill and ask for it to be expedited. I would add my voice to that plea. I welcome the Bill very warmly and hope that it will pass through all its stages in this House, and become law, as quickly as possible. I do so for a specific reason. The Bill is retrospective to July 31, 1952, and a number of boats have already been laid down and are in building in expectation of this Bill. If the Bill is rapidly passed through its stages, it will release a good deal of capital for the fishing season which is just commencing.

331
With one point which the noble Earl made I do not agree. I regard this Bill as of great importance, because the food which we get out of the sea that lies at our door saves our importing from overseas other foods which cost dollars. Therefore, quite apart from the social consequences, which I entirely endorse, there is an economic reason for supporting the fishing industry. At the same time, there is one point which I hope will be particularly cared for in the administration of this Bill; and it is this. Towards the end of the period of office of the late Government and the commencement of this Government, the funds at the disposal of the Herring Board appear to have been exhausted. As a result, a great many fishermen who had been away serving their country during the war, who had come back and resumed fishing with their own old vessels, and who wished to get them renewed, were unable to get grants from the Herring Board, although other fishermen who had remained to carry on the business of fishing during the war had succeeded in getting grants. That led to a considerable amount of feeling amongst the men who had been refused grants: they felt that they had had rather hard measure, though no doubt it was dictated entirely by the financial stringency of the situation facing the Government. I do plead that war service should never be disregarded in the case of competent fishermen who are seeking assistance in building their boats.
There are one or two points in the Bill about which I should like to ask my noble friend and to which I should draw his attention. One is in connection with the provision of engines, dealt with in Clauses 1 and 6. I do not know whether Her Majesty's Government have considered the fixing of a period of time for the life of these engines before a grant for replacement is made. If something of this sort is not done, it is quite possible that fishermen who are careless of their engines will be subsidised at the expense of the rest. Then there is the question of working owners. There are many small associations which have been formed for working these vessels—and, I think, in some cases small limited companies also. It is not clear whether the Bill provides for these small companies
332
and associations to qualify as "working owners." I should be glad of some explanation on that point from my noble friend. It is quite common to have partnerships, but there are these small companies which also are a kind of partnership.
Then, I ought to express a fear which has been indicated to me from the trade on the question of the White Fish Marketing Fund. Under the Bill, that Fund is to be wound up in ten years' time, and some sections of the trade would appreciate more information on this point. They are afraid that the system will be so embedded in the administration that the termination of the scheme in ten years' time will be impossible. There is a small point which I should like to mention, and that is the question of the mackerel fishermen. They are not a very large body of men but they are fishermen, and we do not know whether they are included as herring fishermen or as white fishermen. I am sure that they themselves do not know and they would like the point clarified.
In conclusion, I thoroughly endorse what has been said about over-fishing. I want to point out that the cure is two-fold: first, by increasing the number of fish, and secondly by not fishing them so heavily. I remember the condition of things which existed on our coast more than sixty years ago—or, at any rate, I have heard of it—and I am quite convinced, from facts that have come to my personal observation, that the breeding and feeding grounds of our fish are becoming much reduced. This is a matter which will be of the greatest possible concern to the country in the future, because, as it becomes more and more difficult to secure certain supplies of food from overseas, so the fisheries of our coast will be of more importance to our population. In particular connection with that, I would say that I think it is a scandal that foreign trawlers can come and fish the Moray Firth as they do. The Moray Firth is one of the best feeding and breeding grounds for fish on all our coasts, and in my opinion steps ought to be taken to safeguard the Moray Firth as a breeding and feeding ground for fish. If other countries are able to secure the fisheries off their coasts we ought to be prepared to do the same. The three mile limit has already gone by the board. The

333
feeding of our grandchildren may depend very much on our taking time by the forelock. With those few words I should like to welcome the Bill very warmly and to wish it a speedy passage into law.
3.35 p.m.
LORD CARRINGTON: My Lords, I should like to begin by thanking the noble Earl, Lord Listowel, and the noble Lord, Lord Saltoun, for the way in which they have received this Bill. I am most grateful to them for the helpful remarks they have made. I think the noble Earl rather underestimated the importance of our food supplies from middle water and near water fishing fleets. It accounts for 30 per cent. of the fish we consume. I do not think that that can be written off as of no great importance to our supplies of food. The noble Earl asked two questions. One was whether we had reached agreement with other member nations of the North Sea Convention on the size of mesh. We have done so: we have all agreed upon this; but it will not come into force until next year or until such time as the fishing gear winch is being used is out of action. Otherwise, all this new kit would be wasted. The noble Earl also asked about the control of the spending of grants under this Bill. The answer is that this Bill is only the framework under which schemes are going to be made; there will, of course, be conditions upon which these grants will be given. I think the noble Earl will find that the conditions will be such that the White Fish Authority will be able to keep control over the money granted by them. I do not think it would be a good idea for us to adopt the noble Lord's suggestion for controlling these grants. The White Fish Authority would not wish in any way to interfere in the management of private companies.
The noble Lord, Lord Saltoun seemed a little worried about the grants of up to £1,250 for engines. He thought they might be misused; that some fishermen were careless about their engines and that those who were thus careless would get more benefit than those who were thrifty. The White Fish Authority will have a discretion to refuse or grant sums of money for new engines; and I think that on the whole it is better to leave it to their discretion rather than to put such a provision in the Bill. After all, all engines are not alike; some wear out
334
more quickly than others; some fishermen use their boats more than others, and the engine, therefore, wears out more quickly. It is therefore difficult to put the matter in the Bill and limit it.
LORD SALTOUN: That is what I wanted to hear. None of that has been said. That is exactly what is required.
LORD CARRINGTON: We are both pleased with ourselves. The noble Lord asked me about the question of working owners and whether it would be possible to extend the term "working owners" to cover small limited companies. The reason we have given working owners a rather higher percentage of grant is that they not only take the business risk entirely themselves but also share in the danger of the job. They are in a particular category and we think should be encouraged. It would be difficult to draw an exact definition; many of these owners, large and small, are not doing very well at present, and they might feel a little badly done by if we divide them into two classes. I think it is better to leave it simply as "working fishermen." The noble Lord also asked about the White Fish Marketing Fund. I think that that is rather a misleading title. The Fund is not, in point of fact, what it sounds like; it is really an accounting device employed by the White Fish Authority to draw their working capital. It will not necessarily be used for marketing. It is the working capital fund of the White Fish Authority.
The noble Lord suggested that help should be given to the export trade by advertising and things of that kind. He may have noticed that the White Fish Authority are in fact advertising fish in the country at the present time. Probably some of your Lordships have seen the advertisements. The Authority are now considering whether any similar action is needed overseas. I have not heard that the fish exporters have had any difficulty in obtaining credit for their businesses through the ordinary banking channels, but the White Fish Authority have the power, if necessary, to enable them to provide credit for fish exporters, and at the same time exporters will, of course, have the benefit of the facilities afforded by the Export Credits Guarantees Department. I think those are the only questions my noble friend asked me.
LORD SALTOUN: There was the question of the mackerel fishermen.
LORD CARRINGTON: Yes, the mackerel fishermen. By definition, a mackerel is a white fish and not a herring.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

ROAD TRANSPORT LIGHTING (REAR LIGHTS) BILL
3.41 p.m.
Order of the Day for the Second Reading read.
LORD LLEWELLIN: My Lords, I rise to move the Second Reading of this Bill, which does not deal with herrings, whether white or red, but with red rear lights on motor vehicles. Before dealing with what is in the Bill, perhaps I may say a sentence or two briefly with regard to the background. We had a very welcome reduction of road accidents during the course of last year. Unfortunately, that reduction in the rate of road accidents is not being maintained, and the figures for January, February and March of this year were all worse than for the respective months of last year, and I am told that April is coming out just as badly. The toll on the roads of people killed and injured each year is really quite appalling, although by now we seem to be getting far too used to it and not treating it as the frightful problem which it really is. In my submission to your Lordships, therefore, any step, especially if it is an agreed step, that Parliament can take to help solve this problem, in whole or even in part, should be welcomed by all.
The steps which the Bill seeks to take have been agreed to in another place. I have read the whole of the proceedings of what took place there, and there was not a single Division upon this Bill. On the other hand, this Bill, as indeed would be expected in the case of a Private Member's Bill, attempts to deal with only a small part of the road accident problem. Those of us who take an interest in accident prevention all hope that in the Government programme of legislation for next Session time may be found for a larger and more comprehensive Bill dealing with these matters. This Bill
336
does not attempt to do that—it would not be fitting if a Private Member's Bill did, and if any private Member had attempted a comprehensive Bill in another place it would probably not have reached here. But when I tell your Lordships that research has shown that some 3,400 casualties a year are caused, in whole or in part, by inadequate tail lights or rear lighting of road vehicles, your Lordships may think it right to give your support to a measure which I do not say will eliminate all these accidents but certainly will tend to decrease them.
To come now to the Bill: what the clauses attempt to do is as follows. Clause 1 will require "two unobscured and efficient" red rear reflectors to be carried on all road vehicles which are what I may term of two-wheel width. In this, I except tricycles—there are not very many of them, and it is often an exception that makes the rule—but all motorcars, motor lorries and motor buses will have to carry these two red reflectors, and motorcycles without sidecar and pedal cycles will have to carry one. This will operate as from October 1, 1954, which will give ample time for owners to have the extra fittings added. At the same time, that part of the Road Transport Lighting (Cycles) Act, 1945, which requires pedal cycles and tricycles to have a white surface on their mudguards is to be repealed. The comparatively small areas of white surface involved now appear, after experiment, not to give any effective extra safeguard, and I am told that the technical advisers of the Ministry have come to the conclusion that that is an unnecessary provision. If it gives a false sense pf security, it is better repealed rather than that people should be put to the trouble of painting these surfaces white when, in effect, they do no good.
The main reason for providing for two red rear reflectors on motorcars and lorries, and one reflector on motorcycles and pedal cycles, is to provide a useful safeguard when the lights fail. This compulsory provision of two reflectors has been recommended by the Standing Joint Committee of the R.A.C., the A.A., and the Royal Scottish Automobile Club, and was laid down by the International Convention on Road Traffic of 1949. I myself inquired why it was necessary to have two reflectors as well as two red lights. It may occur to some noble

337
Lords that it is rather like the man who holds his trousers up not only with a pair of braces but with a belt as well. I am told it is because of the International Convention of 1949. Any cars used internationally—that is, in more than one country; and this applies to lorries too—on going abroad may be subject to the provisions to which the late Government agreed when they signed that Convention, which I am told it is thought soon to ratify. If we sign a Convention, it is just as well that we should do something about it. That is the reason why, between the time when this Bill was originally introduced in another place and its coming here, the Ministry draftsmen have taken a hand and this extra provision has been Put in. In regard to the reflector on pedal cycles and tricycles, Parliament agreed in the Act of 1945 dealing with this problem that every bicycle and tricycle should have such a reflector from such time as the Minister of Transport, by Order, brought that provision into force. It has not been brought into force by Order in Council. I think that these reflectors and other materials were in short supply then. But if this Bill is passed into law in this form, it will take the matter out of the hands of the Minister and set a definite date when every bicycle and tricycle has to be so equipped.
Clause 2 requires all vehicles, except pedal cycles, tricycles and solo motor cycles, to carry two red rear lamps, in a clean and efficient condition. Motor cycles with sidecars will have to carry two also: at present the whole of this category need carry only one. Here, it is left to the Minister to say from what date this clause shall be effective, and he can make the timing different for various classes of vehicle. It will obviously take longer to bring this provision into effect because there is more work involved than in merely putting on reflectors; but I believe it is contemplated—as the Parliamentary Secretary to the Ministry said in another place—that it will be made operative as from January 1, 1954, for new vehicles, and from October 1, 1957, for those already on the roads.
Clause 3 requires that loads projecting to the rear of a vehicle shall be indicated at night by a red rear lamp within three feet six inches of the rearmost part of the overhanging load. Up
338
till now the distance has been six feet, but of course the nearer to the end the lamp is placed the less likelihood there is of an accident. This clause also provides that loads which overhang the sides by more than a distance to be laid down by the Minister have to be indicated by a red lamp, carried in a position which will also be prescribed. Under Section 7 of the 1927 Act laterally projecting loads of more than twelve inches beyond the centre of the nearest front side lamp have already to carry an extra or substituted white light pointing to the front. Of course, it is just as important to have an extra indication to the rear for approaching cars, and that is provided for by the clause with which I am now dealing. This is a new provision, but it follows a recommendation of a Working Party on the construction of road vehicles which met recently in Geneva, under the auspices of the Economic Commission for Europe.
Clause 4 legalises the use of white reversing lights to such an extent as may be specified by the Minister. Under Clause 2 (2) of the 1927 Act, it has previously been illegal for one to show a white light at the rear of a motor car, except in the exceptional cases which are allowed on passenger vehicles, such as buses, of a light indicating the destination of the bus. I am glad to think that this clause will become law—at least I hope it will—because I am one of those who try to observe the law, and I must frankly admit that since I bought my last car every time I have reversed at night on a public highway I have apparently been committing an offence, because the light automatically comes on as one goes into reverse. That is very convenient, and it is a great safeguard when one is backing, but at the present moment it is illegal to use it. I imagine that some of my colleagues in this House who have been able to buy new cars since these devices have been fitted have also been guilty of a technical offence, and I shall be glad if this Bill restores them as well as myself to the category of completely law-abiding citizens. Clause 5 is the normal clause providing for Negative Resolutions of each House. Clause 6 is purely formal.
Let me conclude by saying that this Bill has the backing of motor manufacturers as well as of other sections of the

339
motoring industry. Of course, the Bill will impose some small new obligations on those who own any type of motor vehicle and on those who own pedal cycles and tricycles. But when one considers that all and every one of these people may cause damage to others by the lack of these appliances on their vehicles, and that all and every one of them may themselves find that they are among the casualties because of inadequate rear lighting on their vehicles, I cannot think that there will be much objection to taking these small additional safety precautions. In any case, I am sure that all your Lordships will be glad to help in taking this extra step towards road safety, and I hope will help this measure through. My Lords, I beg to move the Second Reading of this Bill.
Moved, That the Bill be now read 2a,—(Lord Llewellin.)
3.59 p.m.
LORD LUCAS OF CHILWORTH: My Lords, any Bill that comes before your Lordships' House and which in any way tends to mitigate the dreadful tragedy of road accidents will receive the support of every noble Lord in this House. And when a Bill comes before your Lordships' House with the august god-parentage of the noble Lord, Lord Llewellin, I am sure that it commands the greatest possible respect. Speaking, as Lord Llewellin does, from his eminent position as the President of the Royal Society for the Prevention of Accidents, I think the sponsor of this Bill in another place is fortunate to have the noble Lord as his advocate here. I am very conscious of the difficulties that beset private Members in producing Bills. I hope that the noble Lord, Lord Llewellin, will not mind if I ask him a few questions as I proceed to make a somewhat critical examination of the Bill. First and foremost, this Bill is just a mass of words. It is legislation by reference, legislation by delegation. I have spent some time trying to unravel the cross-references, the references to all the other multiplicity of Acts which concern the user of a motor-vehicle to-day, but I am afraid I have been lost in the maze.
Before I address myself to this Bill, I must say that I share with the noble Lord, Lord Llewellin, the apprehension
340
and, in fact, the dismay that is felt by everybody who has the slightest interest in what I have always considered to be the greatest social problem we have to-day—that is the death and injury accident rate on the roads—at the fact that, just when we felt we were making progress, we have had a setback. I am forced to the conclusion that one of the principal reasons for that setback is that the enforcement of the existing law has not, in recent months, been what it was some time ago. The Bill which the noble Lord has presented deals with a very great problem, but I cannot help thinking, supporter as I am of the measure—and noble Lords on this side of the House are going to support this Bill—that before we proceed to clutter up the Statute Book with more laws we should at least see that those now in existence are reasonably well enforced.
One of the laws of this country that has fallen into contempt, almost as much as the 20 miles an hour limit on commercial vehicles, is that relating to rear lighting, particularly as it applies to some of the older vehicles on the roads of this country. I will hazard a guess that if the present law were enforced more rigidly the diminution of the accident rate—and the noble Lord, Lord Llewellin, has quoted the figures—would be substantial. One has only to travel on the main trunk routes of this country at night time to see some of these old, dilapidated commercial vehicles, of pre-war vintage, with practically no rear lights at all. I stopped at a certain place in this country only a month ago, after I had been following a commercial vehicle that had no rear lights at all. I stopped at the same country town where this vehicle had pulled up in the market place, and I went up and examined its rear lamp. I could see that the connection of that rear lamp had not been in operation for months. It was coated with mud and rust and the wire was hanging down like a piece of string.
I know what great difficulties the police have to contend with at the present time: they have my admiration as well as my sympathy—and here my sympathies go out also to the noble Earl, Lord Birkenhead, who has to answer for the Ministry of Transport. The Ministry have no authority in this matter. They can take steps which result in the Statute Book being cluttered up with more laws and more regulations, but

341
they have no power to enforce them. If the existing law were enforced to a greater degree, I do not think it would be necessary to add so greatly to the multiplicity of Acts and regulations governing the lighting of road vehicles. I mist also say that if there is one piece of legislation that is quite out of date it is the Road Traffic Act, 1934. And while I commend the assiduity of the private Member in another place who brought this Bill forward, in my view, it is only piecemeal legislation, and piecemeal legislation by reference and by delegation. What is wanted is a comprehensive survey and re-enactment of the legislation which controls the use of vehicles on the roads of this country.
As I have said, this Bill will receive the support of noble Lords on this side of the House. But I hope the noble Lord will be able to tell us why the whole of the recommendations of the Joint Committee on the Lighting of Vehicles, and the Standing Committee of the R.A.C. and the Convention he mentioned have not been accepted. Good though this Bill is, it touches only the fringe of the problem. The Bill, as originally presented in another place, while it provided that motor cars had to carry two rear lights, did not provide that they were to carry two red reflectors. During the passage of the Bill through another place, that clause was taken out and a new clause put in. I understand from the noble Lord that the modern motor car will now have to carry two rear lights and two red reflectors. Far be it from me to criticise the manufacturer of the modern motor vehicle, or those who make its lighting equipment; but when we go along the roads of this country at night, motor cars with their multiplicity of lights wink at us and blink at us. They pass us, and they pull up; and the present design of motor cars being what it is, when anyone gets out it is like someone emerging from the belly of a whale—like Jonah, as it were, getting out by a side exit. The modern car has lights on the front and lights on the back. We shall soon get into a condition of things so that when driving along the Great West Road the dazzle of lights from the rear of motor cars will be almost as had as the dazzle of white lights from the front of them.
342
If I read this Bill correctly—the noble Lord must forgive me if I have got lost in the maze—the very vehicles which have been a positive danger on the road at night seem to escape. Would the noble Lord tell your Lordships how and where the two rear lights and the two red reflectors are to be fitted on a timber-carrying vehicle, where the trunks of the timber stretch out for perhaps 10 or 12 feet beyond the end of the vehicle? If that vehicle turns a corner the swing of the overhang demands—if this problem is going to be solved—not only rear reflectors but side reflectors as well. The noble Lord from his own experience, and his experience as President of the Royal Society for the Prevention of Accidents, knows that in the case of these trailers it is not enough to have rear lighting and rear reflectors within 3 feet 6 inches of the end of the load. But if there is a showman's vehicle with two trailers, 20-odd feet behind the propelling vehicle, it reeds red reflectors studded all along the sides of these vehicles. I understand that a Standing Committee of the R.A.C. and the A.A. made recommendations on this matter, but they have not been included in the Bill. The Committee also recommended that there should be reflectors at the top of abnormally high loads.
I hope that I shall not be accused of damning this measure by faint praise. So far as it goes, it is good. But, if we are going to make a serious attempt to legislate for the rear lighting of vehicles, I suggest to the Government that it is no part of the duty of a private Member to introduce such legislation: it is the duty of the Minister of Transport to bring before Parliament comprehensive legislation, dealing not only with the rear lighting of vehicles but with the front lighting as well. I hope that will be done in the, not too distant future. I notice that the, noble Lord, Lord Llewellin, said that we are to have new legislation in the next Session.
LORD LLEWELLIN: No, my Lords, I did not say that. I said that many of us are hopeful that we shall have legislation. It is not for me to say what the Government's programme will be.
LORD LUCAS OF CHILWORTH: I would suggest that it is not for the noble Lord to say whether the Government will ever have another Session.
LORD LLEWELLIN: I do not mind saying that with a great deal of confidence.
LORD LUCAS OF CHILWORTH: That is an arguable point.
I am glad to see, if we can believe the Press, that the Ministry of Transport are at last to introduce legislation to control the pedestrian. I commend their courage. In season and out, over a number of years, I have said that we shall never effectively tackle this question of road accidents until we control the pedestrian and, also, the cyclist. I have been waiting for a Government to have sufficient courage to do so. No Government in the history of this country over the last thirty years have treated the question of road accidents seriously. There is no question of political Party about this—noble Lords opposite need not laugh: their record is as bad as that of any other Government. I have been waiting for the Government to put money second to human life, and to show courage in place of political expediency. Only when they have the courage to court political disfavour, by regulating all those who use the roads shall we cease to have such disappointments as the noble Lord and I have to-day, the disappointment of seeing, after all the efforts that have been made, that road accidents are beating us. Perhaps the noble Lord will consider whether or not on Committee stage we should try to give the Bill a few more "teeth." I am perfectly prepared to accept his advice on this matter. As it is, the Bill is good; but it is good only in a very minor way. I should like to say, on behalf of noble Lords on this side of the House, that we shall support the Motion for Second Reading.
4.15 p.m.
LORD WOLVERTON: My Lords in rising to support this Bill I should like to say that is it very necessary, especially the obligation in Clause 2 that vehicles should have a second rear light. There are one or two points that I should like to ask my noble friend. Subsection (2) of Clause 2 says:
"The Minister may by regulations prescribe the conditions to be complied with by lamps carried on vehicles…"
I hope one of the conditions laid down will be that the second rear lamp is suffi-
344
ciently big. As the noble Lord, Lord Lucas of Chilworth, has said, one of the dangers to-day is that under present regulations these lamps are extremely small. I should like to see, as in America and on the Continent, rear lamps of a much larger minimum size. I hope that it will also be possible to lay down that the second light should be wired on a separate circuit. That is very important, because it may cause trouble if it is wired in the same circuit as the other lamps.
One danger in travelling at night is the fact that timber lorries have to use only one small light at the end of a big tree which they may be dragging along. I hope that it will also be made compulsory for these timber lorries to carry two rear lights at the end of their load. I know that these are Committee points, but I should like my noble friend Lord Llewellin to consider them before Committee stage. He may be able to get some assurance from the Minister that these matters will be included in any regulations that he makes. I strongly support the Bill because it is legislation which is long overdue in this country and will make the roads much safer.
4.17 p.m.
THE EARL OF BIRKENHEAD: My Lords, when I arrived at the House this afternoon my noble friend Lord Llewellin was somewhat in despair, because there seemed to be only two of us to take part in this debate. It looked like turning into a duet. If so, it would have been one less tuneful than the famous duet of Melba and Caruso, though our relations would undoubtedly have been more harmonious. But at last the deus ex machina came, in the stately figure of the noble Lord, Lord Lucas of Chilworth, who has added a certain verve to our discussion. In my opinion, he made a specially petulant speech in which he appeared to say that, as the old regulations had not been observed, it was foolish to make new ones. He went on to say that we were touching only the fringe of the problem. But it was made perfectly plain by my noble friend Lord Llewellin that this Bill does not seek to deal with the whole of the outstanding matters regarding the lighting of vehicles. As I think I told the noble Lord before the debate, when we were discussing this matter, the Government have very much

345
in mind this ghastly problem of headlight dazzle, which is worse in its destructive effects, I imagine, than bad rear lighting. The Government have under consideration a report on this subject from the Road Research Laboratory, and hope to be in a position to proceed with legislation and the other outstanding matters connected with vehicle lighting as soon as a convenient opportunity occurs.
The noble Lord, Lord Lucas of Chilworth, attacked us because, apparently, we take no interest in road accidents and then, by some fantastic contradiction, said that his Party have not done so, either. I should like to know why it was, when the noble Lord was in a prominent position in the Ministry, his own Party, according to his own account, were so hopelessly inept as he makes out.
LORD LUCAS OF CHILWORTH: If the noble Earl wants a reply—for exactly the same reason that the noble Earl's Party were completely inept before.
THE EARL OF BIRKENHEAD: Ineptitude appears to be rife in that respect. When the noble Lord was in a position to do so, why did he not correct that situation? That is what this Bill is intended to do. As your Lordships know, the Bill before the House requires both red lights and red reflectors to be carried at the rear of road vehicles. I agree with the noble Lord, Lord Lucas, that there has been a great deal of chaos in our road legislation, but that seems to me to be no reason for not trying to improve it. That is what we are now attempting to do. With regard to obligatory reflectors, it is the Minister's intention to lay down conditions requiring a much better performance than is called for under the existing regulations, which have been in force for many years. In respect of these rear lamps the Bill proposes to give the Minister, for the first time, powers to lay down conditions with which such lamps must comply. In this case, also, the Minister proposes to prescribe conditions requiring a standard of performance considerably better than that achieved by many of the rear lights at present in use. The nature of the conditions to be prescribed for both reflectors and rear lights in relation to character, performance and positioning is at present under active consideration, and the
346
Minister hopes that such regulations will be ready before the present Bill is enacted.
Both the noble Lord, Lord Llewellin, and the noble Lord, Lord Lucas, have referred to the slaughter on the roads. I think the noble Lord, Lord Lucas, said that it was one of the worst of our social evils. I wholeheartedly agree with that. Furthermore, I should like—I think for the second time, but one cannot say it too often—to remind your Lordships of a truly grim statistic, which I have reason to believe to be approximately true—namely, that during the last war there were more people killed on the roads of Great Britain than in the whole of the Royal Navy. That is why we feel that this measure, imperfect as it may be, is at least a step forward.
4.22 p.m.
LORD LLEWELLIN: My Lords, I should like to thank the House for the reception they have given to this Bill. I am glad the noble Lord, Lord Lucas, came along to take part in the debate. I did not feel so much that his speech was a petulant one, but I thought he showed considerable courage, having occupied the position in the Ministry of Transport that he did, in saying that he had been waiting years for a Government which had the courage to tackle the traffic problem. There are many noble Lords in the House who might have said that, but it struck me as slightly odd, coming from the noble Lord, Lord Lucas.
LORD LUCAS OF CHILWORTH: The noble Lord will not have lost sight of the fact that he was my predecessor.
LORD LLEWELLIN: I was not there so long; nor was I there at a time when it was so easy to get things done. We had a good deal more to do in 1941, and a great deal of attention at that time was focused on winning the war, rather than on these problems, which are essentially problems of peace. Certainly it was less easy in those days to draw attention to road problems than in days of peace. The noble Lord seemed rather to deplore that we were doing anything before all existing regulations and laws were enforced. There is one good reason why we should do something about these road reflectors now. It is that the Government in 1949, of which I believe the noble

347
Lord was a member—if not, he was at the Ministry of Transport—agreed to an international Convention to have these two red reflectors. Somebody on behalf of the then Government put their name to this Convention, and I think it is good of us, as private Members, to bring forward a measure to give effect to what the late Government, of which the noble Lord, Lord Lucas, was so effective a member, did in this matter in their time.
There may well be some criticism that this Bill does not go further. It does not attempt to. With regard to the point made by the noble Lord, Lord Lucas, and the noble Lord, Lord Wolverton, about timber lorries, this Bill does make the position a little better. It means that there cannot now be a 6-foot overhang of the log of timber, as there used to be; there will have to be a lamp within 3 feet 6 inches of the end, which at any rate will make the load much safer. It is difficult to provide exactly for the timber lorry turning round a corner, when for a moment the light gets obscured. But I should have thought that it is not beyond the wit of man to have a kind of semi-circular light, so that some of it is visible, even when the vehicle goes round a corner.
I am afraid that I cannot answer the other two questions put to me by the noble Lord, Lord Wolverton. I do not know what the intention of the Minister will be in regard to these regulations, but I have not the slightest doubt—the noble Earl, Lord Birkenhead, can no doubt confirm this—that the Ministry and the Minister will look into the two points raised. I am reluctant to "fall for" the invitation of the noble Lord, Lord Lucas, to put a few more "teeth"(as he called it) into this Bill. There is limited time in another place for this Bill to be reconsidered, and I do not think we should be justified in extending it beyond its title. Of course, if there are Amendments which have the effect of improving the Bill, naturally they will be considered, and we can work them out between us. But overall, I suppose it may be said that—although we did not think we were doing it—we put a few more "teeth" into the last Transport Bill that came before us. It had the effect of ensuring that those "teeth" were pretty well ground in another place when the Bill was returned
348
to them. Therefore I should be reluctant to put more "teeth" into this measure. I am grateful for the way your Lordships have accepted the Bill, and I hope that we shall be able to give speedy decisions on all stages of the Bill so that, although we are not being comprehensive, and do not pretend comprehensively to be dealing with all road matters, we may at any rate effectively deal with one of them.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

WORLD FEDERATION
4.29 p.m.
LORD MERTHYR LORD MERTHYR rose to move to resolve, That in the opinion of this House it should be a fundamental objective of the foreign policy of Her Majesty's Government to support and strengthen the United Nations, and to seek its development into a World Federation open to all nations, with defined and limited powers adequate to preserve peace and prevent aggression through the enactment, interpretation and enforcement of world law. The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper. With your Lordships' permission, I will begin with a quotation from The Times of January 21 last. This is a despatch from Hong Kong, which says:
"Mr. O'Brien has been living for more than four months in a ship ferrying between Hong Kong and Macao. He has been refused permission to land until he can prove his nationality. This he is apparently unable to do. He claims to be an American."
I may say that, so far as I know, that unfortunate man is still on the ferry plying his daily way between the two places; I have not heard that either side has yet given way in this matter. I quote that little anecdote, because it seems to prove that there is something wrong in this world to-day—and that, I feel, would generally be agreed to be an understatement. The next point I should like to emphasise is that this stupidity—because, surely, it is nothing else—does not concern any country on the other side of the Iron Curtain; it concerns solely countries which have professed for centuries to be friends and allies—namely, Portugal, the United Kingdom and the United States. One of those, it seems to me, will inevitably have to give way.

349
This man's only crime is that he cannot prove his nationality. The time will come when none of us will have to prove our nationality.
If I am right about this, there is something very wrong with the world situation to-day, and it may possibly justify some such Motion as this. This Motion, which I claim to be carefully worded, is really in two parts, and I apprehend that the first part will not create any serious opposition. Let me say, to avoid any possible misunderstanding, that I am a wholehearted supporter of the United Nations. I do not say it is the best organisation that we could have; I do not even say it is good. I do not deny that it has glaring faults and defects, but I do seriously say that it very much better than nothing, and I sincerely hope that not only Her Majesty's Government but all other Governments will do everything they can to support it arid strengthen it. Its defects are obviously many. One of them, in my humble opinion, is that it is not a Federation, and the question is going to arise very soon: Can the United Nations be improved? I say that, because in two years' time the Charter has to be renewed and maybe revised. I hope very much indeed that it will be revised as well as renewed. Surely it is not too early to ask what are the intentions of Her Majesty's Government and of this country in relation to the revision of the Charter in 1955. What are we going to put forward as our proposition for the improvement of the Charter? Shall we try to make it into a Federation? Whether we do or not, I hope that the resulting machinery will make it possible for there to be, if not one World Federation, then any number of minor Federations within the United Nations.
I turn to the second part of this Resolution. There may be a little more controversy about this. The words to which I draw attention first are these:
"…to seek its development into a World Federation."
I think that the words "development into" are the most important words in the whole of the Resolution, because I want to emphasise that I certainly do not think that it is going to be made perfect in a day, or even a year, or even a decade. It certainly is not. But if we are on a long journey, the best thing to do is to
350
start the journey, and nothing will be gained by putting it off. I believe that this will be a very gradual process taking a long time, but the important and the immediate thing is that in 1955 the necessary machinery shall be set up—I do not even say "set in motion," but I say "created."
There must also be created a favourable climate of opinion for a World Federation, if we are to have one, and again I say that if it is no: for the whole world, then let it be in part or parts of the world within the framework of the United Nations. I do not think it matters very much where we start, so long as we do start. There are many possibilities. Obvious ones are, first, the North Atlantic Treaty Organisation countries. Would it not be better if they were federated? Argument would seem to be superfluous this afternoon, but I have no doubt in my mind that it would be much better for them and for the world if they were. What about the British Commonwealth? The British Commonwealth now contains at least three Federations and, I hope, will contain shortly two further Federations. That will make five, and there may be more. But the Commonwealth is not itself a Federation. What about setting up a Commonwealth Federation as an example to the rest of the world? Then again, Europe, Europe is the most natural of all Federations for us to join because we happen to be nearer to it than to any other, and I should like to see us joining a European Federation. It seems to be natural because it is within sight.
Next are the words, "open to all nations." Whatever international body is set up, it should surely be open to every civilised nation who desires to join it. What is the present position? There are a large number who are not allowed to join the United Nations. I know that is not our fault; I know it is not the fault of the Government. But it is somebody's fault, and it must surely be remedied, because it is absurd. It must be open to everybody to enter though not, of course, to leave voluntarily and without permission. I would remind your Lordships that in our own Commonwealth we have that condition already, because Western Australia—am I not right?—desired to leave the Australian Commonwealth and did not succeed in doing so. Next, it must have defined and limited powers—in other

351
words, there must be a written Constitution. It is too much, unfortunately, to hope that any such Federation could have, as we enjoy, an unwritten Constitution. The question arises, should the Constitution be written before the membership is secured, or should the members be gathered together first and then asked what Constitution they require? I do not think it matters very much which of those two courses is adopted, so long as one of them is adopted first and the second afterwards. I see little, if any, difficulty in framing a Constitution for a World Federation to which countries could, from time to time, themselves adhere. After all, we are practised in these things, I hope, and we shall be drafting a Constitution shortly for a Central African Federation.
My Motion goes on to say that there are three essential functions, all of which must be present if this is to succeed. The first word embodied in the Motion is "enactment." There must, of course, be a Federal Parliament given limited powers to legislate. It must surely be able to legislate, and yet its powers to do so must be restricted, otherwise nobody will join it. Its legislation must be binding on all its members, and it must be strictly within the framework of the United Nations Constitution. Expressing a personal view, I would say that in the long run election to the World Assembly, or whatever it may be called, will be directly by the peoples of the world; its membership will not be comprised of delegates appointed by other Parliaments or the Foreign Offices of the world. I believe that that will be a great improvement on the present system.
"Interpretation" is the next word. That of course, refers to a court of law—another of the essentials. We have now an International Court at The Hague, an institution for which I have nothing but admiration. But are not its powers limited and its usefulness restricted by the fact that if one party to a dispute so chooses they need not he bound by its decision? In other words, recourse to The Hague Court is voluntary and not compulsory, and that simply will not do. It is no use having an international court unless its decisions are binding on all the members of the federated body of which it is a part.
Then comes "enforcement," and this is the most important of the three essentials. Nothing can be done without enforcement, and this is where I come, I am afraid, into direct collision with the noble Earl, Lord Darnley, who addressed your Lordships yesterday. I have a great respect for the noble Earl but I cannot for a moment agree with his method of achieving the same result as I am out to achieve. I do not believe it will work. I believe that we shall never get world peace until we have a federated world, with enforcement of peace by a world police force. Hence the words
"…adequate to preserve peace and prevent aggression."
This force, if it is to be any good whatsoever, must be overwhelming, and there must be no possible doubt about it. Does not history show that wherever a single country has attempted to set up an overwhelming force—even if it has been with the object of keeping the peace of the world—it has not ultimately succeeded? On the other hand, if an international body were to try that very thing it would succeed just because it was an international body.
Eventually—here again I give a personal opinion—I feel sure that the membership of the world force will be strictly individual and will not be based on a series of national contingents as it is now—for we have world forces now in Korea and we have had them in other places. If there is any doubt in our minds about the necessity for an overwhelming world force, let us consider what happened about the Treaty of Locarno or the Kellogg Pact. Your Lordships will remember how everybody rejoiced when these were signed, and how honours were given to those who had played a part in bringing them about; and we all looked hopefully towards living happily ever after. But what happened? We all know why the Treaties were ineffective: it was because there was no body with sufficient force to enforce the Treaties. The same thing will happen to Treaties made to-day unless there is some overriding authority which can put them into force and compel both parties—not only one—to keep them. Only the other day the United States and Japan entered into a Treaty of Friendship for ten years. In passing, may one ask, why only ten

353
years? Why are they not always going to be friends? But that is incidental. The point I want to make is this: who is to enforce this Treaty between the United States and Japan? What body is there having the requisite force to make sure that the Treaty is not broken by either party?
That really is the Motion which I move to-day. But I must ask, what is the attitude of Her Majesty's Government towards this matter? I do not mind disclosing that I have been reacting what was said in another place on this very subject—there was a short debate on it there recently. I hope I am in order in quoting this statement made during that debate:
"…there is not at the present time a sufficient degree of international co-operation in the world to make this possible."
That is true; but, with great respect, I suggest that it was irrelevant to say that. What I should like to ask to-day is where that co-operation exists in the world. Does it exist in Britain? Is there in this country the requisite understanding to make this project possible? Will this country lead the world towards the goal which most people want? Or, on the other hand, am I right—are quite a number of us right—in suspecting that in this matter we are, to a small extent at least, dragging our feet? Is it not noticeable that our political Parties are more enthusiastic about this project when they are in Opposition than when they are in power? One may say that exactly the reverse seems to be the case in the matter of African Federation as opposed to all other Federations.
The mere passing of this Motion, I suggest, is capable of bringing some, though a small, degree of international feeling and co-operation. If this Motion were passed, there would be, even if it were only infinitesimal, some improvement in the international temperature. I ask Her Majesty's Government to say to the world, "We will do this if you will do that." To come to one detail of federation, why should we not have a Federation of Europe, with the United Kingdom joining with her neighbours? Will your Lordships consider for a moment two comparable areas of the world? First, consider Europe, without Russia—I say "without Russia" only because I want that particular area; secondly, consider
354
the United States. These areas are, I believe, comparable in size, in population, in resources, and in variety of races—or at any rate roughly so. Which of those two areas is the more successful—the more wealthy, the more powerful, or the more peaceful? The answer, of course, is clear—it is the United States. But why is the answer so clear? It is because the United States is federated and Europe is not. I humbly and sincerely believe that if Europe were federated it could be as successful and as powerful as the United States. So I ask again: will Britain join if others do?
Here, my Lords, is the crux of the matter. Joining a federation undeniably means the surrender of national sovereignty. That is a fact which is formidable, and inescapable. Will Her Majesty's Government, on behalf of this country, consent, under proper terms and proper safeguards, to surrender a sufficient degree of national sovereignty to make this federation a success and thus ensure peace? It is interesting to speculate looking back over history, which Governments of the past have been the greatest. I will not venture to mention any; but I prophesy that the British Government which surrenders the necessary instalment of national British sovereignty will be the one that will be regarded as immortal. May I, in conclusion, quote from some words of the noble Marquess who now leads this House, spoken on December 13, 1933? The noble Marquess, when he was a Member of another place, said this:
"No one who has considered the subject can deny that the world is becoming internationalised and that it is being welded closer and closer together. If we go a long way back in history, we find that this country of England was originally seven little kingdoms. In time they were combined into one kingdom, with one force to maintain law and order. Later there were added the countries of Scotland and Wales, and if we pass further on we find that these three became one unit in a vast confederation of the British Empire. Nor is there any reason to suppose that that process, which has been going on throughout history, is going to stop now. On the contrary, the increasing communications of various kinds are going to accelerate the process and, perhaps sooner than we imagine, all nations may become parts of one vast world confederation."
I respectfully invoke the words of the noble Marquess in support of this Motion. I beg to move.
Moved to Resolve, That in the opinion of this House it should be a fundamental objective of the foreign policy of Her Majesty's Government to support and strengthen the United Nations, and to seek its development into a World Federation open to all nations with defined and limited powers adequate to preserve peace and prevent aggression through the enactment, interpretation, and enforcement of world law.—(Lord Merthyr.)
4.50 p.m.
LORD SILKIN: My Lords, some noble Lords will doubtless remember a former Member of this House, the late Lord Davies, a man for whom I and many others had very high affection and respect. He was the founder of an organisation known as the New Commonwealth Society. It was formed soon after the First World War, and became an international organisation. The present Prime Minister was its President and I was among its humble members, a member of the British Executive. The Society had for its purpose two main objects: first, the creation of an international tribunal where disputes between nations might be settled; and, second, the setting up of an international police force. I believe that if those objectives could have been carried into effect it might well have been possible to avoid the Second World War. Unfortunately, they were not carried into effect, although a great many people supported the idea.
A few days ago we in this House were considering the Prevention of Crime Bill, a Bill which made it unlawful for individuals to carry offensive weapons. Noble Lords who took part in the discussion may remember that an attempt was made to make it permissible for individuals to carry offensive weapons in self-defence; but no one was more horrified at the suggestion that the individual should look after his own defence than the noble and learned Lord who sits on the Woolsack, and his predecessor who leads the Opposition. It was regarded as utterly unthinkable that individuals should walk about, armed to the teeth, defending themselves, when there was in existence a police force whose object it was to do that very thing. It was further held that the very fact of people walking about armed, even if only in self-defence, would itself create a considerable amount of
356
violence. That view was upheld by the whole House, and I think that every citizen of this country would accept the fact that it is quite wrong for individuals to walk about armed, to be judges in their cause and to settle their own disputes by means of force.
When it comes to the international field, however, that is the very way in which we do settle our disputes. Every country, almost from time immemorial, has created its own armed forces for the purpose, so-called, of defence. No country has ever admitted that its armed forces existed for the purpose of offence. Every nation in the world is armed for the purpose of defence; and again, as in the case of the individual, the very existence of these armed forces, each nation competing in strength with the other, each desirous of getting sufficiently strong so that it may be immune from attack, creates a greater danger of the very thing that the nations are trying to avoid. In the lifetime of many of us, we have had two examples of arms races, contests between different countries, each one trying to become stronger than the other; and they eventually led to two of the greatest wars in the history of the world. To-day, we are engaged in a third arms race, and although at the present moment the atmosphere seems less tense, because, it is alleged, we are becoming stronger as compared with our opponents, the position may well become graver again if it should turn out that our opponents are stronger than we are. Once again, there is no one in this House who would suggest that the danger of an even more terrible third world war is in any way non-existent.
What is the answer? Are we to go inevitably along the same lines as we have gone in the past, merely becoming stronger and stronger, in order that we may come on a par with our opponents, with the ultimate end, possibly, of having another war? I am not arguing against the policy of armament at all. In present conditions and in the present state of organisation of the world, I think it is inevitable. That is not my point. But I want to put before the House that there is an alternative, that the world ought not to go on in the present way to what may well be an inevitable third world war and one which, by general consent, would

357
be far more terrible and far more devastating of civilisation than anything we have ever had before.
Is a third world war really inevitable? Must we really go on as we are? In present conditions of armament, it is not merely, as it has been in the past, a question of diverting a certain amount of our efforts towards creating arms; it is a question of diverting a very large proportion of our efforts to this useless and pernicious purpose. Our standard of living is in danger of declining drastically because so much of our effort is diverted to rearmament. There are enormous sections of the world which are living in conditions of famine or semi-famine, semi-starvation, which could be helped and could be assisting in the provision of more consumable goods if they were given some assistance in capital goods, but which cannot be given that assistance because we are consuming so much of our efforts in creating arms. I imagine that up to this point I shall have general agreement. The question is: what is the course that can be taken to prevent this? Some of us feel that we could do a great deal by determining now that we will use the opportunity which will be afforded to us in two years' time of so revising the Charter of the United Nations that "teeth" will be put into that organisation, and that it will be provided with powers to secure a world police force, an international police force.
Let us examine for a moment the position that arose when South Korea was attacked by North Korea. There was no organisation in existence for dealing with aggression. Something had to be done, if it was to be done at all, in a hurried manner, without any kind of preparation; and, in effect, in actual practice, to the extent of perhaps 90 to 95 per cent., action has been taken by one nation. In Korea it is virtually a question of one nation, although there are a large number of nations represented and taking part. To that extent, it is, of course, a United Nations force, but if one left out the one nation that is putting the major part of its resources into Korea, the remainder would be quite ineffective for the purpose of dealing with what occurred there. If, however, there had been an international police force available for the purpose of dealing with
358
just such a contingency as this, it is quite likely that aggression would never have occurred; and it would have been a sufficient deterrent to prevent such aggression.
The purpose of an international organisation of the kind that I have in mind, and that I think is visualised by the noble Lord who moved this Motion, is not merely one where there will be a police force, but one which will regulate and control the amount of force which will be available for each individual nation. Obviously, it would be useless to have an international police force under the control of the United Nations unless at the same time there were control of the armed forces of the different member countries; to that extent the member countries would be required to surrender a certain amount of their sovereignty, and to refrain from being prepared to act as judges in their own cause.
There again, if they are not to act as judges in their own cause, and are not to settle differences with other countries by force, there must be an adequate machinery for dealing with international disputes. I submit that to-day there is no adequate and satisfactory machinery for dealing with these disputes. We at home have only to note the difficulties that exist with Persia and with Egypt to realise that there is no such effective machinery. We have had serious disputes with both these countries, and there is no effective machinery to deal with them. In the case of Persia there was a decision that the tribunal to which we referred had no powers; the United Nations was not prepared to deal with it; and, in effect, there has never been any decision as to whether we are right or wrong in our dispute with Persia. Persia has just taken the law into her own hands. Perhaps a century ago we might have done the same thing. We might have invaded Persia, and that would have been the way to settle it. To-day, there is not even that course. So there must be an effective international court to which disputes between nations can be referred. That is the second part of the Motion which the noble Lord, Lord Merthyr, has moved.
Then, if there is to be an international court, there is, of course, the need to have international enactments, as I think the noble Lord, Lord Merthyr, called them—that is, there must be a tribunal

359
which is capable of making laws as between nations. There will be a certain amount of administration. If, in fact, there is to be an international tribunal which can control the amount of armament which will be available for the different countries—of course, it will always be necessary to have a certain amount of arms, in order to maintain internal peace—there must be some kind of enactment as to the measure of the arms that each country is to have. There must be a certain amount of supervision to ensure that no nation departs from what has been laid down, and the organisation must have funds. Therefore, this international organisation must have legislative powers. To that extent, therefore, there must be a sacrifice of sovereignty. But it is never contemplated that, beyond that, nations should not be able to lead their own lives in their own way, according to their own lights, or that there should be any interference with the normal internal functions of the different countries.
Some of us who are members of the World Government Movement (as I have been, ever since its inception) believe that all this can be achieved through the machinery of the United Nations Organisation. As the noble Lord, Lord Merthyr, has said, the Organisation comes up for review in two years' time. Article 109 of the Constitution actually provides for a review. It is essential that one of the member nations, at any rate, should be prepared to sponsor something of this kind. Unless it is sponsored by one of the nations, then it is very unlikely that it will even receive consideration. As I understand it, it is not the purpose of this Motion to commit this country finally and irrevocably to world federation. The noble Lord, Lord Merthyr, said that the first thing to do was to start on the journey. With great respect, I should have thought that the first thing to do was to find out where you are going. Before you start you want to know what is your destination.
All this is somewhat vague and indeterminate, but it would be sufficient for our purpose if we were prepared favourably to discuss—and I do not ask more—the idea of setting up an international police force, an organisation which would control the amount of arms available for
360
each nation, which would supervise and inspect the armed forces of the different countries, which could legislate on international law, and which would be in a position to raise funds. If only one nation would be prepared to take the lead in putting forward and sponsoring this idea at the United Nations Assembly when the time comes for review of the Organisation, I think that we should have made great progress towards securing a real peace. I believe that we shall never have peace in the world unless we have a supra-national control over the arms of the individual nations, and I believe that that is not very different from the views which have been expressed from time to time by this country and by the United States of America at the Disarmament Conference. There the participating nations are asking for disarmament they are asking for effective supervision and control, but they are not asking for an international police force which will be available to deal with cases of aggression of this kind.
I hope that Her Majesty's Government will to-day be able to give some encouragement to this idea. It is not good enough to say that it is visionary, idealistic and impossible of achievement. I do not think it is. But the alternative is even worse. I think it is better to fail in an attempt of this kind than to do nothing and to go to an almost inevitable doom. I believe that the setting up of an international force, on the lines that I have suggested, constitutes one of the last chances for the preservation of our civilisation. It is for that reason that I hope we shall receive this afternoon some encouragement for this idea.
5.10 p.m.
LORD BIRDWOOD: My Lords. I think that possibly the most effective way in which I can support the noble Lord's Resolution is in a somewhat personal approach, attempting to say a few words about the kind of thoughts which passed through my mind when, two years ago, I first came to be interested in an obscure movement called World Government—in a spirit. I may say, of curiosity, rather than of idealism. I suppose that if we were to go out and tap the shoulder of the man in the street and ask him what his reactions were to a supra-national effective world authority,

361
we should get neither a very encouraging nor even, perhaps, a very polite reply. If he could summon his thoughts they might be expressed in some such way as, "What about Russia?" For that indeed was my own first personal reaction. It was not until I had the opportunity to study the matter and its implications considerably more than I had done that I came to the conclusion that here was no quack remedy for the world's ills, but rather an indispensable element in human and international affairs.
I suggest that for Englishmen there are two questions which have to be answered within this context. The first may be expressed, in a world that is rigidly divided between two rival ideologies—two ideologies which, in fact, the experts state are completely irreconcilable—in the following terms: Is it any use to think, let alone to plan, in terms of effective central world authority? We have undoubtedly to face the fact—as the noble Lord, Lord Merthyr has pointed out—that a real abandonment of national sovereignty is involved. And we ask ourselves, with the example before us of the Russian approach to such a matter as the international inspection of atomic energy plant, whether Russia will ever be prepared to make that initial surrender. We have to face, too, the fear that perhaps an effective world authority might be the means by which the Communists could further encroach upon the free world. Those, I suggest, are the kinds of paint which are in the minds of the man in the street when he asks quite bluntly, but not unnaturally, "What about Russia?"
The second question which perplexed me, and which clearly must be of concern to many Englishmen, is: To what extent does a world authority seek to undermine the purpose and the structure of our British Empire and Commonwealth? Some of us, in the international hazards and uncertainties of to-day, feel that the British Commonwealth is the one great instrument for progress and for stability; and that if, indeed, a new order is to represent in any way a challenge to that concept, perhaps it were best in international interests, leaving aside our own sentiments in the matter, that world government be left just where it is; which is as not much more than a kind of
362
academic mental exercise for a few experts and idealists.
The particular aspect which would be of interest to us, perhaps, would be the relationship of our Colonial territories to a world authority. Would there be any tendency for a repetition of the replacement of the authority of one with some experience by the authority of some sixty, many of whom have no experience whatever? If so, I think that, quite rightly, we should not have much interest in that particular aspect of world government. Let us be certain of one condition, therefore: that the relationship of Colonial territories with a central world authority must come after, rather than before, Great Britain has had the opportunity to lead these territories forward to their day of choice, that day of choice which was before India, Pakistan, Ceylon and Burma, in 1947 and 1948. I emphasise that point because already, before the revision of the Charter of the United Nations has come up for serious consideration, we have seen determined attempts to eject us from our responsibilities. So far from there being a challenge to our British Commonwealth, some of us within the Parliamentary Group for World Government have seen in the situation the idea that international constitution-makers might come in and attempt to frame a future world structure around our Commonwealth, taking its more exportable elements for adaptation in the wider international field. I say "more exportable elements" because so much of the pattern of that strange family relationship—the silken cords to which Burke referred as
"binding more closely than iron chains"—
is associated with 500 years of a very individual type of history, and as such could not be regarded as exportable. But that all would he welcome to come in and study the British Commonwealth, and to adopt our principles and methods in the wider international sphere, I could regard only as a happy development in international affairs.
I have spoken of a "constitution" and "constitution-makers." Here, we come to a vital aspect in this matter and one upon which we in the Parliamentary Group for World Government have had keen discussion. There are those who, turning to the British Commonwealth again, would define only the bare minimum of statu-

363
tory obligations. Then there are those who would have all the "i's" dotted and the "t's" crossed, and who would establish an effective Legislature of two Houses on an elective basis, a court of justice, a court of equity, an international budget and, above all, an international police force. I think that the former view would base its approach on the assumption that once this issue between the Soviet and the Western world is solved, there will be no need for armies, and hence no need for constitutions. Solve this problem which has haunted us all for the last seven years, and armies and their purposes would fade away. Why? Because no two nations are ever going to war again through what one might term the conventional issues of history. We have had our lesson and we have learnt.
Now, my Lords, it is true that in a perfect world in which all men behave as angels there would be no need for the policeman. I have often tried to think out what happens in Utopia to such a thing as institutional religion. But we have only to put this matter against the background of human affairs, and in its correct perspective of realism, to know that men are not going to react as angels. Consequently, through the faults and the failures of the men who lead them, nations are always going to go astray. Of one thing I am therefore certain; that is, that there will always be the problem child in the world. If we solve this problem of the clash of two ideologies, we shall still need the international rule of law. There will be the problem child in the family of nations, just as there is the problem child within the family of individuals. The family of nations will need the policeman just as much as do the citizens of London. Since the policeman needs to be paid, we need to have an international budget. One thing leads to another, and it seems to me to be quite illogical to suppose that you can have an international budget and an effective international police force unless they are equally supported by a Legislature, supported, in turn, by a full constitution. Furthermore, while we in this country may regard ourselves as capable of rising above the petty restrictions of the written word, it does not in the least follow that that is how it is going to be approached in other countries. Indeed, our somewhat lofty attitude in this matter may be regarded in some
364
quarters abroad with suspicion, as savouring of some kind of slick international diplomacy.
In facing up to this problem of framing a constitution, we are faced with two broad courses which are open to us: either we can go ahead with setting up a constitution-making body under the ægis of the United Nations, let that body work out its own constitution and then face us all with a fait accompli; or we can call in the experts, a few experts only, and let them, over the next two years, work out the blueprint of a constitution and then place it before the citizens of the world for their study, their criticisms, or acceptance or rejection. Either of these two approaches obviously involves certain risks. In the first case, we run the risk of forcing a system of government on millions before they are psychologically prepared for its acceptance, of leading whole communities down the garden path, with consequent stresses and strains and eventual breakdown. In the second case we run the risk most certainly of world opinion understanding well enough the issues but, through that understanding, being hesitant to take the plunge, being fearful of the abandonment of their national sovereignty. Already we are a long way from the day when an Englishman will accept a law framed in Europe on British soil. And yet it is in that second, more deliberate, approach that I see the seeds of eventual success, in facing the citizen of the world with the blueprint of a plan, in letting him understand its implications, and having its acceptance by common consent, with no risk whatever of all of us waking up one day to discover that we are subject to an international dispensation which we had neither sanctioned nor understood.
What are the difficulties of framing a constitution? There is the obvious difficulty of working out a fair system of representation. Obviously we must resist a system based on a mere counting of heads, a system which would give to 400 million Chinese ten times the representation of 40 million people within these islands, a system that would reduce twelve Rhodes Scholars to the level of twelve men from the jungle, armed with bows and arrows. These difficulties are not insurmountable. They can be overcome. Already, Professor Hanbury, of All Souls, has produced a perfectly simple

365
workable constitution which has been set out in that excellent brief statement of Mr. Lionel Curtis, The Open Road to Freedom. By manipulating the relations of the two Houses of the Legislature, by relating representation to economic capacity—more particularly to (he economic contribution that a nation makes to the international budget—a fair and equitable system of representation in a World Parliament can be worked out.
We speak of federation. It is not for me to define its scope or general character, but I should like to reassure your Lordships on this point: that, as we understand it within the Parliamentary Group for World Government, this is no movement to reduce all nations to a common denominator. In all reverence, I say, God forbid that we should all of us think, talk and act alike! The differences and divergencies between men and nations are surely the fount and inspiration of all the creative instinct in man. That applies in the spheres of art and technical knowledge, and it must certainly apply in the sphere of international political relationships. In contemplating the powers of federation, my own reaction is that we should be wise to make small surrenders in the initial stages, moving forward to greater surrenders as world opinion becomes educated to the real meaning of international co-operation. Of the necessity for one surrender, I am perfectly convinced, and both noble Lords who spoke before me also share my conviction—that is, the need to surrender enough sovereignty to create a really effective international police force. I can think of many cases since the end of the war when a small force would have rescued the situation. It need not: be a big force: one needs a small force only to crush the seed; we need a far greater force to prevent the plant from growing once the seed has taken root. On one occasion a small force would have saved the life of a gallant, sincere and fearless servant of the United Nations; on another occasion it could have enforced an international decision taken in the case of Jerusalem, a decision which the United Nations has been powerless to implement: in fact could have done the work of a policeman in enforcing the law.
366
I started by posing two questions. One of them, I know, is certainly not answered—the question relating to the clash of two ideologies in the world. I suggest that if we can avoid the third world war, the time will come when leaders behind the Iron Curtain will be prepared to negotiate on terms of democracy as we understand it, not necessarily to agree with us, but at least to negotiate on terms which we and they can understand. When that day comes, they, and indeed leaders all over the world, may turn to the people who have been working on this kind of movement, for the clear outline of the blueprint of a plan. Will they not then turn to us and say," What have you got to replace our Communist ideology?" That is our hope. That is the goal we seek, a goal surely based on that most neglected of St. Paul's three virtues—hope.
Finally, may I say a word on the frame of mind in which we approach this problem. If I remember aright, the Foreign Secretary, when defining policy before the United Nations, in Paris about two years ago, took the view that we should be thankful for small mercies. We should consolidate a situation here and a situation there, make advances here and advances there, and be thankful for them, in a practical way. In my view, that is entirely the right and practical approach. The other approach is that of the idealist, who says: "We can lift up our eyes to the hills and keep our vision on the peaks, in the belief that we shall at least be able to cross the intervening valley." It is in a synthesis of both these approaches that I see the future evolution of the family of all nations. I recall the words of a great servant of the Empire and Commonwealth, when pondering rather wistfully over what he might have considered our lost position in the world. He said:
"No longer are we creators, only acceptors."
I suggest that perhaps the greatest day of our creation is ahead. It would be on that day when we could claim that British initiative had won the world over to the acceptance of a scheme for human affairs which, while being entirely practical, is yet worthy of the highest idealism.
5.30 p.m.
LORD CHORLEY: My Lords, the noble Lord who has just addressed your Lordships' House has done so for the first time, and I am sure your Lordships

367
would wish me to congratulate him on your behalf on a most admirable speech. The noble Lord's interest in matters of international affairs is well known and I am sure that we are all sorry we have had to wait so long before hearing him. Having heard his speech this afternoon, that sorrow is accentuated, because he has brought a most refreshing and personal approach to this important problem, in the use of his own experience, of a kind which always commends itself to your Lordships' House. Therefore, when I express the hope that we may have many further opportunities of hearing him, I am sure that I am voicing the feeling of all noble Lords.
We are grateful, also, to the noble Lord, Lord Merthyr, for giving us the opportunity this afternoon of discussing this important matter. The history of our time has largely consisted of a number of attempts—unfortunately, vain attempts—to secure peace. The problem, of course, is to change a system which has been called one of international anarchy into one of international order, a problem easy to pose but much more difficult to solve. I think that an analysis of this history, and of the world situation to-day, indicates that the main reason why we have failed to solve this problem is one which the noble Lord, Lord Merthyr, emphasised in his speech, and which has been alluded to by each of the subsequent speakers—namely, the claim which every State makes to complete sovereignty. Undoubtedly—at any rate, this, I submit, is the correct view—the unwillingness of nations to give up one jot or tittle of their sovereign powers was the main element in the failure of the old League of Nations, and is proving the main factor in the comparative want of success of the United Nations Organisation. When the delegates from all the Powers met at San Francisco at the end of the last war, there was great hope in the world that the new Organisation would be much more effective than the old one, for the reason that it appeared that the nations were preparing to abandon at any rate some part of their claim to complete sovereignty. But that has not, in fact, proved to be so.
One of the most superficially curious elements in the situation has been that the Soviet Power has been the worst offender in that respect and has insisted
368
on what has appeared from time to time to be almost a medieval conception of sovereignty. The reason for that is not difficult to discover, because early in the history of the United Nations Organisation it became fairly clear that the different member States were going to line up into two teams, and as the team of which the Russians found themselves at the head was the weaker of the two, a rather rigid and artificial insistence on sovereignty appeared to be a good line of defending their point of view. Indeed, it has enabled them on many occasions to bog down the proceedings of the Organisation.
It is, undoubtedly, an extraordinarily difficult thing to persuade sovereign nation States to abandon part of their sovereignty. In the past it has been secured only by strong nations conquering and absorbing weaker nations. Indeed, as we know, many of the large viable modern States have been built up on conquest or on an alternative which was quite successful in the past and really much more successful than conquest—namely, dynastic marriage. Your Lordships will remember the old tag about the Austrian Empire, which had a long existence and which came into being as a result of a number of successful marriages—bella gerunt alii tu felix Austria nube.
The dynastic marriage is completely out of date, and the method of conquest is really out of date, too. It was not a satisfactory method in the past. It led, even in our own small Island territories, to some of the worst political problems with which we have ever had to deal—I refer, of course, to the Irish problem. The conquest and the division of Poland was for a long time one of the running sores of Europe. Even Wales, which this country thought it had successfully conquered, has been showing, quite naturally, a wishfulness for independence. The tremendous growth in the feeling of nationality, which was not there in the past and therefore enabled these conquests to be successful, up to a point, has now completely barred the road to that method of getting rid of sovereignty; in the modern world it simply does not work. The attempts of the French, for example, in Cambodia, Laos and elsewhere in the Far East are proving that that is so. All sorts of peoples who did

369
not feel themselves nations until the present century are now doing so, and it is no good trying to override those national feelings. That phase of world history has to be lived through. One of the great difficulties we are undoubtedly up against is the persuading of quite small nationalities of that kind to be content to take a certain instalment of sovereignty, and not to demand a whole 100 per cent.
This problem was worked out in a most interesting way by the late Josef Stalin when he was quite a young man, in a famous paper he wrote in relation to the position of small units, like the Ukraine, in the larger unit which the Communists were hoping to build up. It is an interesting thing that the Russians themselves, so far as we can see, have not succeeded in solving that problem completely, because as soon as there was a situation of some fluidity in the Soviet area during the last war, the nationalistic aspirations of the Ukrainians at once began to make themselves evident. My impression is that that is a problem which has not been altogether successfully dealt with in that part of the world.
The spate of nationality is so strong that it is really impervious to reason. We are seeing a good example of it at present in connection with Egypt and the Suez Canal. For a time Egypt was under the suzerainty of this country, but it is now many years since Egypt was given complete independence and treated as one of the world's free nations. However, because of the fact that British troops are still in the Suez Canal Zone the Egyptians cannot bring themselves to believe that they are a free and equal nation in that sense. That is undoubtedly one of the great sore points in the world at the present time. I mention these historical examples, some of them of great present-day relevance, because I am persuaded of the enormous importance of this problem of sovereignty. We have to induce the nation States of the world by methods of persuasion to give up some of their sovereignty. It is much easier to knock people on the head than to persuade them: to take away their sovereignty by armed force than to persuade them to give up some of the elements of it. Even at the last moment when the enemy is before the gate or when the terrible possibility of the Third World War is loom-
370
ing into the middle distance, people will still not be prepared to give up enough sovereignty to provide, for example, an international police force.
The important element in this matter is lack of trust in international justice, and the realisation that there is no sanction to enforce the awards of the international court or of decisions that may be given by some supra-national judicial tribunal of that kind. I believe this is the main reason why all nations cling to their sovereignty in this way. Fortunately, sovereignty is not a monistic conception, so to speak, but can be broken up. It is a bundle which can be broken up into its separate elements, and it is quite possible for a surrender of certain elements of sovereignty to take place and for a nation to be left, as has been pointed out this afternoon, with a substantial amount of sovereignty which enables it to live its own full national life. That does open up the possibility of progress.
When the nations are satisfied that there is a supra-national authority in existence which is independent of the power groupings among the nation States, then I think there will be confidence. But it is an. essential condition that the supra-national authority shall be independent of the power groupings among the national States, and this, of course, is emphatically not the case at the present time. The delegates who represent the different nation States on the Security Council and in the Assembly are there just to further the power interests of their respective countries. That is so in 99 cases out of 100. So long as that situation exists there will not be the confidence which will persuade nations to give up their sovereign rights. They cling to them as a kind of refuge—it is a completely illusory refuge, but they cling to them for that psychological reason. A world authority must therefore, I submit, be established, which does not just carry out the orders of Washington or Moscow, or whatever State is in a position to secure the most votes on the Security Council or in the Assembly at the particular moment.
It may be that the present time seems inauspicious for such a development, when there is so much suspicion on each side of the Iron Curtain. I freely admit that this is so. But a more peaceful

371
atmosphere may prevail. There are signs that it is coming, and I hope they may be borne out. In any event, I think we must get ready to make use of a better atmosphere. The situation cannot go on. It must either deteriorate to a state when we actually have a war, or it must begin to improve. When it begins to improve, as I hope and trust will be the case, then we must be prepared to take advantage of that situation. To many of us—indeed, I think to most people in this country—this idea of the World Parliament and the World Government is the only really practical way to get out of the impasse. I know that to many people the whole idea will appear to be completely visionary, but to many more unless there is such a vision to strive for the world appears to be a completely bleak place and our civilisation almost past praying for.
Peace has always been one of the great, if not the greatest, visions of human kind. The project of world government as a method of securing world peace, however, is not anything like so old. Of course, I am not claiming that it is a new one. Most of your Lordships will remember that Tennyson, as long ago as when he wrote Locksley Hall,
"…dipt into the future, far as human eye could see."
Most of us who have spoken on League of Nations platforms in the past have used his famous couplet:
"Till the war-drum throbb'd no longer, and the battle flags were furl'd
In the Parliament of man, the Federation of the world."
That is just what the noble Lord, Lord Merthyr, is asking for this afternoon. But I think we should remember also that Tennyson, in that same poem, foresaw the war in the air. A rather less frequently quoted couplet from the same poem reads:
"Heard the Heavens fill with shouting, and there rain'd a ghastly dew
From the nations' airy navies grappling in the central blue;"
Even in the 1830s when that poem was written the prophecy was rather a remarkable one. Of course, what he did not foresee was atom bombs and hydrogen bombs. They have made the situation even more desperate, and it means that the amount of time which is left to our familiar world to put its house in order
372
can be measured in a handful of years. Now are these few years going to be used to good purpose? That is really the question the noble Lord is asking and which is involved in his Resolution, and that is indeed the question mark which is written across the face of the universe at the present time.
5.48 p.m.
LORD HADEN-GUEST: My Lords, I believe that the world is being compelled by the forces of the organisation of commerce, of shipping and of air travel—by means of which one part of the world very rapidly learns to know about another part—into unity; and we must legislate for that. I do not mean in this Parliament—I mean, of course, in the United Nations. Take for instance, commerce and shipping. Shipping is now very much more rapid than it was, but one may pass from that to air travel. Air travel by various forms of 'plane is, practically speaking, universal over the whole habitable world; men and women move about in a way they never did before. You can start to-day and be in Washington in a very short time, or in India. Those of us who have travelled in that way—and I have no doubt that many noble Lords in this House have done so—realise what difference it makes to one's views when one arrives in this country from India in a matter of a few days instead of weeks. And shortly, probably, it will be reckoned in terms of hours, rather than of days. Then I believe that radio and television, which have not been mentioned in this debate, have had a tremendous influence on men's minds. I do not mean the minds only of men in what I call civilised countries, but in other countries as well. All the continents and all the world are waking up.
I remember with very great interest the fact that I went with a number of colleagues (I was then a Member of another place) to visit Nigeria, the Gold Coast and other African Colonies on the West Coast in the months immediately preceding the war. We conducted a very definite and carefully-contrived investigation into the methods of life and administration in Nigeria and in the Gold Coast—I will mention only those two at the moment. We found different tribes of the Negro peoples very active, leading their own lives. We made copious notes, which

373
we presented afterwards in a printed Report. The interesting point is that at that time, although those of us who went were experienced, in the sense that we had been a great many years in Parliament, there was no suggestion in any of those Colonies of West Africa of the ideas of independence which are now such a marked feature in Nigeria and the Gold Coast, though independence in a certain sense there has been. Incidentally, it is interesting to notice that many of the people who are now the leaders in these countries were people whom we actually interviewed, visited, and talked with.
Take the question of Egypt and of Persia. How rapidly the situation in those countries has changed! I will not detail these developments. But what vast developments there have been in the last few years in the United States, and even more in Canada! The developments have been simply immense. There have been, and there are going to be, also, tremendous developments in South America. There have also been vast developments in Russia since the Revolution in 1917. I remember well that when I went there in 1920—I was the secretary of the first Labour delegation that had ever been there—we took elaborate notes. We were able to travel freely up and down the Volga. We were not by any means confined by restrictions, except those which we imposed upon ourselves. At that time there was no considerable organised industrial life east of the frontier between Russia and the Eastern countries. There is now an immense development in all those Eastern countries, and a growth of industrial civilisation. There have been tremendous changes in the world, and all these are exerting pressure on the world to make it change its formation and to make its people alter their habits.
How are we to get an organisation appropriate to this rapidly changing situation? I confess that I have been surprised this afternoon not to hear any reference to the elaborate organisations which already exist in connection with the United Nations. The United Nations have, among other things, an International Labour Organisation, a Food and Agriculture Organisation, an Educational, Scientific and Cultural Organisation, an International Civil Aviation
374
Organisation, an International Bank for Reconstruction and Development, an International Monetary Fund—and, I may say, these financial institutions have been functioning to some considerable effect—a Universal Postal Union, a World Health Organisation, an International Refugee Organisation, an International Telecommunications Union, a World Meteorological Organisation, an Inter-Governmental Maritime Consultative Organisation and an International Trade Organisation.
There are other organisations, but it seems that we have there what amounts to a series of world ministries which are functioning at the present time; and they are very useful and effective bodies. If we are going to develop from present conditions into a World Government, these are the organisations on which to base it. Many of them have long experience. Some of them are quite old: the Universal Postal Union, the oldest of them all, was originally founded in 1875. If we are to have a really good development of a world organisation, we shall have to build on that kind of basis, not on merely theoretical ideas or statements of rights and duties. Those would be very good, but I think that we in this country believe more in the practical effect of an organisation which is already in existence, whose workings you can study. The International Bank has an authorised capital of 10,000 million dollars and has given grants to Australia, Belgium, Brazil and other countries.
I could tell your Lordships a great deal about the work of the World Health Organisation in many countries, by which the highest possible level of health is being brought about. I have been talking this afternoon to a doctor who comes from Bangkok—he has been listening to the debate—and he has been telling me about the work which he is doing at the present time. It covers the whole field of health protection and service that we have in this country and that exists in other Western European and American countries. He is applying these ideas to the protection of health in Bangkok.
Many of these things date directly from the Conference in San Francisco in 1945, and these specialized organisations are de facto departments of a begin Fling of world government. More important work could be done. It is in

375
the power of mankind at the present time to lay the foundations of a world community. The meeting of the United Nations which is to take place in two years' time can certainly be made the occasion of a considerable approach to a world constitution. But does any member of your Lordships' House seriously believe that we can devise a world constitution in a period of two years, when it has taken this country centuries to build up a Constitution? I think it is asking too much. I do not myself suspect the Russians of wanting to dominate us more than we have in the past wanted to dominate others. I think that they will be amenable to reason if they can see that what we are building up—and what they will be helping to build up if they come in, as I think they will—is a new world of a new kind, in which all mankind will be able to live on terms of equality. But the form which should be imposed, and the obligations, duties, sanctions, and constitution of what I have called the ministries set up already under the new world organisation, are things which I think one must leave to the future—and not to the immediate future. That should not, however, in the least degree prevent our present organisation from going on and improving greatly.
What are the alternatives to this? A long period of hesitation and indecision?—we do not want that. The outbreak of a world war?—no one, certainly, can want that. No sensible human being, no one who knows about modern weapons, whether he is on the Russian or the non-Russian side of the world frontier, can possibly wish for these weapons to be used. Thirdly, there is the determination of the nations of the world, expressed at the United Nations, to keep the world at peace and to find the means for the growth, development and use of the enormous powers that the sciences are now pouring out into men's hands. I do not know whether it is generally realised that it is only within the last ten or fifteen years that major contributions to man's power over nature have been made by the sciences pouring out this knowledge, a great deal of which is quite new. In fifty years since the early days of the century, the world has been revolutionised; and since then the speed
376
of that revolution has been increasing. Special agencies have already been created to deal with some of the very important functions of a world government. The time has now come to decide that we will make the United Nations Organisation and its special agencies the basis of a permanent form of peaceful world government for the whole of mankind.
6.3 p.m.
THE PARLIAMENTARY UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (THE MARQUESS OF READING): My Lords, this debate, as the debate yesterday, has been characterised by a number of speeches of great sincerity and eloquence and, if I may say so respectfully, at times on a somewhat ethereal plane. The opportunity falls to me in winding up this debate to add to what was said by the noble Lord, Lord Chorley, in congratulating the noble Lord, Lord Birdwood, on his maiden speech. I do it with all the more warmth and pleasure because a good many years ago my father and his were closely associated in the conduct of Indian affairs.
The Motion of the noble Lord, Lord Merthyr, as he said at the beginning, falls into two parts. He assumed at the outset, and rightly assumed, that as to the first part of his Motion, that dealing with support of the United Nations, there is no divergence of view between us. It is, of course, and it will no doubt remain, a fundamental object of our foreign policy to support and strengthen the United Nations. I do not think it will be seriously disputed by anybody that during the period of its existence up till now we have given it all possible support. As regards strengthening it, noble Lords will remember that my right honourable friend the Secretary of State has said on more than one occasion that he would welcome an expansion of the existing situation in order to admit more countries. But, whether you are going to do what is rather suggested, merely fling the door open and say, "Here is a welcome for all, whatever their status in the world," is rather a different matter.
The noble Lord said, for instance, that he would invite all civilised States. Immediately, you begin an argument as to what is a civilised State. That is an argument which has been going on for some time. As the noble Lord knows, there are

377
twenty-one nations waiting at the door at the present moment, and the only hopeful thing that can be said about that situation, without going into unnecessary detail, is that a Committee has now been appointed by the United Nations itself, of which Committee the United Kingdom is a member, to consider the deadlock which has arisen about the admission of further countries and, if possible, to resolve it in a way favourable to their admission. Unfortunately, the U.S.S.R., which has not been entirely unresponsible for the failure to admit these other countries, refused to accept membership of that Committee. That is most regrettable, if the Committee is going to arrive at a reasonable and acceptable solution. None the less, we must hope that it will do so.
As regards the second half of the noble Lord's Motion, we enter, as I think he will agree, a somewhat more controversial and, I am afraid, at the same time a more visionary field. The second part of his Motion calls for the development of the present United Nations Organisation into a World Federation fortified by a system of world law. That is, of course, a captivating and inspiring vision in many ways, and this country has always attached the greatest importance to the rule of law in the affairs of the world. But it is no good barking the fact that no such system can be forced upon nations; it can come into being only with their co-operation and consent, and unfortunately there is at the moment only too little evidence of any such universal collaboration coming about. If the noble Lord who moved this Motion were to sit for a day in my chair in the Foreign Office—I think the noble Lord, Lord Henderson, will agree with me—and read the incoming and outgoing telegrams over the space of perhaps twenty-four hours, he would reluctantly be driven to the conclusion that at the present moment there is not in the world that harmony between nations which is likely to produce any immediate response to a project of this kind.
Only yesterday, the noble Earl, Lord Darnley, in his Motion appealing for an epoch of fifty years' peace without bloodshed, said that those nations which were not willing to assent to that proposition must be made to comply. The moment you begin to make a nation comply,
378
where do you get to? As the noble Viscount, Lord Cecil of Chelwood, said in a debate on international affairs only the other day, the one thing that you cannot do is to make a nation take a step which it does not want to take, unless you are prepared to enforce your desires upon that nation with all the panoply of force, which is exactly the thing which this Motion is desirous of avoiding as the ultimate exchange between nations. It may be very unfortunate that that is the position, but it is indeed, I am afraid, useless to pretend that it is not so. There is at the present moment no discernible tendency in the world for the lion to go through the unusual operation of lying down with the lamb. In fact, lions are extremely unwilling to lie down with lions, or lambs with lambs, and in too many countries an uncompromising and exclusive nationalism flourishes which must be the arch-enemy of any such project of a global union as is contemplated by this Motion.
In his speech, the noble Lord, Lord Merthyr, dealing with the position of the United Nations as it stands to-day, cited as one of its defects that it was not a Federation. When we begin getting into that area we are getting into very mixed territory. He said that we ought to try to make it into a Federation, and he then went on to contemplate a situation in which there should perhaps be not one United Nations Federation, but a series of groups of local Federations spread about all over the world. N.A.T.O. was one of his subjects for federation, Europe was another, the Commonwealth was a third. Then Her Majesty's Government of the day have to ask themselves, "To which Federation do we belong? Do we belong to the European Federation; do we belong to the N.A.T.O. Federation or do we belong to the British Commonwealth Federation? "You cannot do as people do in Who's Who: put down the names of four or five clubs to which they belong. You have to make up your mind to which of these Federations you belong, and then adhere to that one.
Let us be very careful before we commit ourselves to a plunge into any scheme of federation on this sort of scale or on these lines. The strength of the Commonwealth has been that it is not a Federation, and what has been done has been done by consultation and by co-operation

379
on a voluntary basis. As the noble Lord admitted, the moment you go off into federation you begin the necessity of building up some sort of a written, rigid Constitution. I confess that nothing surprised me more in his speech than when at one moment he said, I think, that there would be little difficulty in framing such a Constitution. Well, there are in the world international lawyers and constitution-makers of great eminence. But you have to produce not merely a paper Constitution; you have to produce a paper Constitution which is going to commend itself to all the nations of the world. It is when you get to that stage that your troubles begin. It may be quite possible in the study or in the common room to work out an admirable blue print, but when each country comes along with its own particular predilections, its own particular ideas and objections, the process of producing a universally acceptable Constitution from all that procedure takes on a very different aspect.
To a certain extent the same is true when the noble Lord talks about the introduction of a system of law which can be enforced, and of legislation and of a tribunal. You have countries with different systems and different traditions of law. Up to a point, it is quite true that many of them submit cases to the present international tribunal. But the next stage in the present scheme is that having passed your law, you proceed then to the enforcement of it, and you enforce it apparently by arms or the threat of force of arms. It is said that if you have a small force, that small force will always be able to quash at the outset any signs of unrest or insurgence in any part of the world, and that big forces will never be needed. My Lords, let us look back for a moment to a stage in the years between 1933 and 1939. Would the small police force have walked into Germany and taken action? It could have done that presumably only with the assent of the full body of the United Nations. Would there have been agreement as to what was the moment for action? There was not agreement amongst the countries—the far fewer countries—which had to deal with the situation when it arose. Now we have to get the agreement of all these countries to send in a police force.
380
What size is the police force to be? What regulates the establishment of this force which is to be set up? Is it to be the European Federation'? It is said that you limit the number of men in the various national armies. But suppose there is a European Federation and a Federation for, let us say, the Middle East, which combine together against the rest of the world. What strength is your police force to be in order to cope with the combined armies? The United Nations countries are going to have to keep a force which is greater than the aggregate of the separate forces in the different countries. One noble Lord spoke about the necessity for an international Budget. To maintain such a force is going to be a pretty expensive undertaking.
The noble Lord, Lord Merthyr, said that in his view the great advantage that the United States had over this country was that it was federated, and therein lay its strength. My Lords, that is not the beginning and end of the matter. The United States consists of a considerable number of states, but it also happens to have no national frontiers between those various states, it has the same language running throughout the country, and it started to build itself up from nothing. In this Motion you start with an organisation which is already in being, with all the traditions—the prejudices, if you like—which have grown up over the years, and you have to break those down and persuade these countries virtually to amalgamate at least a portion of their sovereignty in their joint interest. It all may be very desirable; it all may come about; we may all hope that it will come about. All I am saying is that there is still a long way to go.
I agree with the noble Lord, Lord Haden-Guest, in saying that there is a much more hopeful and practical way than sitting down to sketch out blueprints for some future Constitution and some future international court. It is by gradually getting the nations accustomed to the process of co-operation, as they do become accustomed in these various United Nations bodies, some of which I have had the advantage of seeing at work. The same thing applies not only to United Nations bodies, but, within what I may call local limits, to such bodies as the North Atlantic Treaty Organisation, and

381
O.E.E.C. Indeed, we have already reached the stage where, in one or two instances, we have either got to or are very near to getting a partial surrender of sovereignty. There is the Coal and Steel Community, the European Defence Community, and at the same time deliberations are going on in regard to the possibility of creating a European Political Community.
I hope that those who believe profoundly and sincerely in this scheme of ultimate world federation will see that in regard to those organisations which have come into being on a small scale—if you will, on a relatively local scale—with the assent of the various countries concerned, the right way is to let them develop, to materialise, and in the course of time, if history so develops and opportunity so offers, let them proceed forward to the stage at which they can become something in the nature of a world organisation. But do not try to start with a complete whole at the beginning; let the pieces form themselves and than, gradually, by process of time, amalgamate into a whole. It will be done only by the consent of the various pieces concerned.
It may be that these organisations like the European Defence Community, the European Coal and Steel Community and the others, may prove to be the first embryonic stage of the kind of state of affairs that the noble Lord wants to see. I am bound to say that, at the present moment, my view agrees with that which my right honourable friend the Joint Parliamentary Under-Secretary has expressed in another place on more than one occasion—that setting up a World Government can only follow and not precede such a degree of international understanding as, unhappily, does not exist to-day. That, I am afraid, is the view which I must express on the general aspect of this Motion. It is surely premature to concern ourselves at this stage with attempts to devise the requisite institutions in any form other than the broadest possible outlines To do otherwise would be to undertake a process which I may perhaps be allowed to call, "putting the chart before the course." I agree that it is prudent to provide yourself with an accurate chart before you start out on a voyage. But it is even more important to know what your
382
destination is, and how you are going to get there. That, at the present moment, I do not think, from anything that has been said to-day, is really clear at the present stage of development. Even accepting the noble Lord's definition of the ultimate aim, we cannot, surely, lay down with any precision the means which ought to be adopted in order to attain that ultimate aim.
There is the Charter, and it may well be that inside the terms of the Charter as it is to-day—it is possible (I do not make any prophecy) that it may be revised after 1955—the elements of the machinery required already exist, if the countries who are members of the Organisation choose to use what is already under their hands. But I feel that in the end the stimulus must come, and can only come, from a common impulse of those countries who are members of the United Nations. In the world as it is now—and, as I said in the course of yesterday's debate, it is too often a rather tough and truculent world—it is not likely that any such manifestation of desire is going to be a thing of to-morrow or the next day. And this, I think, is important—to launch any such scheme at a moment when the world is not ripe for it, before the mass of the peoples of the world are receptive to it, would be not only to achieve immediate failure but to compromise for a very long time any future prospect of success.
I do not want to seem unduly discouraging to the noble Lord, but I hope he will agree to withdraw the Motion which is before us. And perhaps I may say this. We should welcome a situation, if it developed, in which this project seemed reasonably attainable, and I can assure the noble Lord that we will not neglect suitable opportunities to create an atmosphere favourable to its ultimate realisation. But we cannot anticipate the millennium. All we can do, and should do, is to keep our eyes fixed upon it as, unhappily, perhaps a rather distant goal, and in the meantime do our best to prepare for it by striving in every way to remove the hatreds, the rivalries and the dissensions of the world which now serve to make the millennium more nebulous and more remote.
6.26 p.m.
LORD MERTHYR: My Lords, may I say that I think your Lordships will all agree that we were very fortunate to

383
hear the speech of the noble Lord, Lord Birdwood, this afternoon, and that we shall add his name to the list of those of your Lordships whom we look forward to hearing on further occasions in the future. Another personal note I should like to strike is this. I am glad that the noble Lord, Lord Silkin, mentioned the name of the late Lord Davies, whom I knew very well at one time before the war. Lord Davies was considered to be a visionary, as no doubt he was; but I never think there is anything to be ashamed of in being called a visionary, and the time will come when the noble Lord will be proved to have been right.
With regard to the speech of the noble Marquess, I should like to be allowed to make one or two observations. First, I want to make it abundantly clear that nothing that fell from my lips, I hope, was to the effect that any nation should be forced into federation. If I said that, I certainly did not intend to say it.
THE MARQUESS OF READING: May I be allowed to make clear what I actually did say? I did not say the noble Lord had suggested that any nation should be forced into federation, but I said that inevitably the result of what he was advocating was that the only way federation would be achieved was, in some cases, by force. I did not accuse him of advocating force.
LORD MERTHYR: I am obliged to the noble Marquess for that explanation, but I cannot quite accept the resultant theory that this cannot be done without force. After all, as I have said before to-day, we already have a number of Federations. We have at least three in our own Commonwealth, to say nothing of others. That being so, surely it is not impossible to have more than three. I am disappointed at the Government reply; there is no purpose in concealing the fact. I am disappointed because if every nation were to say, "We will make no effort to co-operate because no one else will make an effort," we should not get very far. The noble Marquess asked: "How are you going to do this with a small police force?" One of the things I want to emphasise is that I am convinced that the police force has got to be, in its early stages, not a small one but a big one. It has got to be much
384
bigger than any other force in the world. Later, I am sure, when reason descends upon the world, it can be very substantially reduced. In the meantime, it has got to be far greater than the aggregate of all others.
The noble Marquess, not unnaturally perhaps, took me up on what I said about the United States. He said that federation was much easier for the United States than for Europe, and he gave as one of his reasons the fact that the United States had no national frontiers. Exactly, I entirely agree. That is why the United States is a successful federation. But why must Europe have national frontiers? Can anyone deny that the national frontiers of Europe could be removed tomorrow if the peoples had the will to do it? That is my very point, and I respectfully agree with the noble Marquess that that is the main reason why the United States is successful. Talking about the United States, I am reminded of the famous statement of the Dean of Gloucester in the eighteenth century. I am sorry that I have not the actual words, but it was a remarkable statement. The Dean of Gloucester allowed himself to say that a Federation of the United States was a sheer impossibility. Within twelve months it was accomplished. That shows that things can be done, although people say that they are impossible.
In the course of his argument, the noble Marquess said that certain progress had been made, and I agree. Amongst achievements which he mentioned was the setting up of the Coal and Steel Community in Europe. He gave that as an example of the progress. But as the words fell from his lips this thought struck me: the United Kingdom is not amongst those countries. That is the point I want to make. The United Kingdom could be one of those countries: it is not. The noble Marquess urged, "Let the present institutions develop." I agree; but we must be one of them. It is no good saying, "Let everyone else do this, but not us." I hope that I have not overstated the point, but all I am asking is that this country will say, "We will do this, if you will do this." It cannot be said that we are the first, because clearly we are not. The noble Marquess said that the thing must eventually come by putting together a series of pieces. Again I agree: but shall we be one of the

385
pieces? That is the question I should like to ask.
I have said enough, perhaps too much. I do not want to trouble the House any more this afternoon. I am obliged to the speakers and to the noble Marquess, Lord Reading. I feel that to have a Division with such a small number in the House would serve no purpose to anybody, and for that reason I beg leave to withdraw my Motion.
Motion, by leave, withdrawn.

HOSPITAL OF ST. MARY MAGDALEN (COLCHESTER) CHARITY SCHEME CONFIRMA TION BILL
Brought from the Commons; read 1a, and to be printed.
HOSPITAL OF THE BLESSED TRINITY (GUILDFORD) CHARITY SCHEME CONFIRMATION BILL
Brought from the Commons; read 1a, and to be printed.
LOCAL GOVERNMENT SUPERANNUATION BILL
Brought from the Commons; read 1a, and to be printed.

THE WHITSUN RECESS
6.33 p.m.
THE LORD PRESIDENT OF THE COUNCIL (THE MARQUESS OF SALISBURY): My Lords, before the House adjourns, I should like to take this opportunity of informing your Lordships that we hope to be able to adjourn for the Whitsun Recess after the close of Business on Thursday, May 21, unless it should be necessary for the House to meet on the following morning, Friday, May 22, for a Royal Commission. Parliament will reassemble on Tuesday, June 9.
House adjourned at twenty-six minutes before seven o'clock.