Sitting of 6 April 1954

Preamble
The House met at Half past Two o'Clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  ASHRIDGE (BONAR LAW MEMORIAL) TRUST BILL
  As amended, considered; to be read the Third time.
ORAL ANSWERS TO QUESTIONS
  SCOTLAND

    Wind-blown Timber
    Captain Duncanasked the Secretary of State for Scotland if he will make a further statement on the progress made in dealing with the gale-blown timber in the North-East of Scotland; and whether he expects it all to be dealt with by January, 1955.
    The Joint Under-Secretary of State for Scotland (Mr. McNair Snadden): Extraction is still proceeding at the rate of about 2 million cubic feet per month. As the statement of progress is rather lengthy, I shall, with permission, circulate it in the OFFICIAL REPORT.
    Captain Duncan: Will my hon. Friend answer the last part of the Question and say whether the timber will be dealt with in the time originally anticipated?
    Mr. Snadden: My right hon. Friend cannot give a specific date because certain of the timber is in inaccessible places, but if my hon. and gallant Friend will read the OFFICIAL REPORT tomorrow morning, he will find a full report of the progress.
    Mr. Rankin: Does the hon. Gentleman think that his Government will still be in power at January, 1955?
    Major McCallum: In view of the present situation, is it the policy now to
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    authorise the Forestry Commission, where possible, to issue felling licences in respect of standing timber?
    Mr. Snadden: That is a separate question which should be put on the Order Paper.
    Following is the statement:
    Arrangements have been made for working all but approximately half a million cubic feet of the 47¾ million cubic feet of gale-blown timber in the North-East of Scotland. The rate of felling and extraction has been maintained at 2 million cubic feet per month and the volume extracted to roadside is now estimated at 26 million cubic feet. Approximately 3 million cubic feet of round logs have been transported to mills outside the affected area under the transport assistance arrangements. Further increases in the rates of assistance took effect as from 1st March and it is hoped that this will result in the increased movement of the remaining blown timber. Transport to England and Wales of mining timber surplus to the requirements of the Scottish coalfields continues, also under freight assistance arrangements made by the Government, and to date orders have been placed for about 2½ million cubic feet.
    If the present rate of progress is maintained, it is estimated that the vast bulk of the windblown timber will have been cleared by the end of January, 1955. Although there will probably be some exceptions, as work on some blown areas is still behindhand, broadly the situation is that the material then remaining on the ground will consist largely of larch and hardwoods which have been deliberately left until last as they are less liable to deterioration, and small lots which are inaccessible or of indifferent or poor quality. Work will, of course, go on to clear the saleable timber as quickly as possible.

    Atomic Energy Research (Industrial Development)
    Mr. Hector Hughesasked the Secretary of State for Scotland for a detailed statement as to his plans for industrial development in Scotland flowing from the projected atomic energy reactor station at Dounreay, Caithness.
    The Joint Under-Secretary of State for Scotland (Mr. Henderson Stewart): The Dounreay reactor will be experimental, and it would be premature to try to forecast at this stage what other industrial developments may take place in Scotland as a result of the presence of this station.
    Mr. Hughes: Does not the hon. Member realise that this may be a great opportunity to bring industry and population to the North of Scotland? Is it

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    not astounding that he is not in a position to give some details about the plans which will flow from this expensive work?
    Mr. Stewart: As the hon. and learned Gentleman will know, it will be several years before there is sufficient development to enable us to take action, but we are fully aware of the potentialities.

    National Records and Archives (Indexing)
    Mr. Hector Hughesasked the Secretary of State for Scotland what steps he is taking to have the national records and archives of Scotland indexed and made readily accessible to the poets, historians, biographers, economists and other scholars in Scotland.
    Mr. Henderson Stewart: The responsibility for indexing the national records and archives of Scotland is placed by statute on the Keeper of the Records of Scotland, and my right hon. Friend is informed that this work is progressing steadily. A considerable proportion of the records is already indexed, and all, whether indexed or not, are readily accessible to lawyers, scholars, and students in the General Register House.
    Mr. Hughes: I referred in my Question to "archives." There are a great many archives and records in the Record office in Chancery Lane, London, which are badly needed by the scholars of Scotland. Will he take steps to have them properly indexed and made available to Scotland?
    Mr. Stewart: I am obliged to the hon. and learned Member for his correction of my pronunciation of the word "archives," which I accept.

    Fishmeal and Oil Factory, Peterhead
    Sir R. Boothbyasked the Secretary of State for Scotland whether he is aware that no further progress has been made with the construction of the fishmeal and oil factory at Peterhead; and what is the cause of the delay.
    Mr. Henderson Stewart: The Herring Industry Board are in process of obtaining the necessary local consents and will commence work on the factory as soon as these are forthcoming.
    Sir R. Boothby: How soon will these be forthcoming?
    Mr. Stewart: Very soon. There is a certain amount of plan drawing to be done, and the local council has to give its final consent. Apart from that, it will not take long.
    Mr. Rankin: I am glad to see that the hon. Member for East Aberdeenshire has now come back to the House again.
    Sir R. Boothby: The local council gave its consent long ago. It is very urgent that this factory should be set up in time for the summer fishing. Cannot my hon. Friend give a better assurance about it?
    Mr. Stewart: My hon. Friend is wrong. Consent is required from three parties, the third of which is the town council. That consent cannot be given until the detailed plans have been prepared. That is now being done.

    Damages Awards (Interest)
    Mr. Hector Hughesasked the Secretary of State for Scotland if he is aware that under Scottish law relating to actions for damages for negligence interest at 5 per cent, on the amount of damages awarded runs only from the date of the decree awarding damages; that it would be in accord with both justice and expedition that such interest should instead run from the date of either the accident or the summons; and if he will introduce legislation to enact this change in Scottish law.
    Mr. Henderson Stewart: I am aware that in Scotland interest on damages awarded in actions for negligence runs only from the date of decree. Amendment of this long-standing rule of Scots law would require very careful consideration, and my right hon. Friend can hold out no hope of early legislation.
    Mr. Hughes: Is not the Minister aware that this has for long been carefully considered and recommended by the Muir Society, a body representative of lawyers in Scotland, and will he consult them on the advisability of adopting their recommendation in the matter?
    Mr. Stewart: We are aware of that, but the hon. and learned Gentleman will know even better than I that this is really too complicated a question for discussion at Question time.

    Raemore Grazings, Lairg (Use)
    Sir D. Robertsonasked the Secretary of State for Scotland if he is aware that Raemore grazings on Gruids Farm, Lairg, Sutherland, are to be used by the Forestry Commission for growing trees; and, in view of the scarcity of agricultural land in Sutherland and the abundance of non-agricultural land suitable for growing timber, if he will take steps to ensure that these pastures should be used by the crofting community to produce food.
    Mr. Snadden: The Raemore grazings are to be used for forestry in accordance with the Strathoykell plan which was approved by the Highlands Panel. My right hon. Friend cannot see his way to alter the arrangements made for the planting of this area. I have today written to my hon. Friend about this matter.
    Sir D. Robertson: Is it not wholly wrong that grazings which have provided food for over two centuries should be used for growing timber, when we have so much land in Sutherland which is not suitable for food production but is suitable for timber production?
    Mr. Snadden: I have written to my hon. Friend fully on this matter, but I would remind him that the land was originally secured for forestry, and we have to take into account the fact that afforestation will provide work for crofters not fully employed. The general effect in the area has also to be taken into account, as well as grazings.

    Potato Harvesting (Mechanical Aids)
    Mr. Emrys Hughesasked the Secretary of State for Scotland what research is now being carried on for the purpose of producing an efficient mechanical potato harvester.
    Mr. Snadden: In addition to research and experimental work being carried out by commercial firms, research is being undertaken by the National Institute of Agricultural Engineering and its substation in Scotland to find efficient methods of digging potatoes out of the ground and of separating potatoes from extraneous matter.
    Mr. Hughes: Is the Minister aware of the dissatisfaction expressed recently by
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    farmers in Scotland about the lack of an efficient potato harvester, and also of the suggestion that the big potato merchants should be levied in order to get money for this research?
    Mr. Snadden: This is a very complicated question of the separation of earth and stones from the potatoes. One machine has been produced, but it was found to be faulty in one respect, and the National Institute of Agricultural Engineering has devised a different principle. At this moment, consideration is being given to putting it into production.

    River Forth (Pollution)
    Mr. Woodburnasked the Secretary of State for Scotland what progress has been made in the prevention of pollution of the River Forth; whether he is aware that oil and tar discharges are threatening to destroy all life in the river; and whether, as a first step, this particularly destructive effluent can be prevented.
    The Joint Under-Secretary of State for Scotland (Commander T. D. Galbraith): The prevention of pollution will be primarily a matter for the River Forth Purification Board, which was established last October and will shortly be functioning. If the right hon. Member will supply particulars of the oil and tar discharges to which he refers, I shall make inquiry.
    Mr. Woodburn: Is the right hon. and gallant Gentleman aware that hundreds, if not thousands, of fish have been destroyed by this pollution, and that it would be much more efficient to deal with the pollution quickly than to prosecute fishermen for taking a few fish from the Forth?
    Commander Galbraith: I am not aware of that; no recent complaint has been received.

    Monkland Canal (Report)
    Mrs. Mannasked the Secretary of State for Scotland what progress has been made towards meeting the representations of Coatbridge with regard to the Monkland Canal.
    Mr. Henderson Stewart: As my right hon. Friend stated on 30th March in reply to a Question by the hon. Member for Maryhill (Mr. Hannan), a report by

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    technical experts on the Monkland Canal in Glasgow is being considered urgently. With regard to the Coatbridge position, I am sorry that, at the moment, I cannot add to the answers that were given to the hon. Lady on 9th February.
    Mrs. Mann: Does that mean that only the representations of Glasgow have been considered, and that only the Glasgow part of the Canal will be filled in and not the Coatbridge part?
    Mr. Stewart: I do not think that would be quite right. We are well aware of the hon. Lady's case, but we think it is better to settle the Glasgow problem first, because that will enable us to reach a proper decision with regard to the other.

    Anti-Haemoglobin Serum
    Mrs. Mannasked the Secretary of State for Scotland if he is satisfied that surgeons operating on haemophiliacs in Scotland are fully informed on, and have accessible supplies of, anti-haemoglobin serum for the treatment of patients during emergencies.
    Commander Galbraith: Yes, Sir; I am, however, informed that fresh blood would usually be preferable to the serum in such circumstances.

    New Hospital, Peebles
    Mr. Prydeasked the Secretary of State for Scotland when it is intended to replace the present War Memorial Hospital in Peebles.
    Commander Galbraith: A site was obtained two years ago at Hay Lodge, where the existing premises are used for out-patient purposes. My right hon. Friend regrets that, in present circumstances, he cannot say when it will be possible to start building the new hospital.
    Mr. Pryde: Is the right hon. Gentleman aware that this hospital is very badly sited beside the River Tweed, and that, when the river is in flood, the whole hospital has to be cleared out?
    Commander Galbraith: I am aware of that fact, but there are other serious and priority matters to be dealt with by the Regional Board.

    Legal Aid (Old-Age Pensioners)
    Mrs. Cullenasked the Secretary of State for Scotland if he will introduce legislation to amend the Legal Aid Act so that old-age pensioners in receipt of National Assistance can be defended in cases where they are sued by landlords for increased rents.
    Mr. Henderson Stewart: Unless they have considerable capital, old-age pensioners in receipt of National Assistance already come within an income range which would make them eligible to apply for legal aid in defending any action brought against them in the Sheriff Court.
    Mrs. Cullen: Is the hon. Gentleman aware that there are quite likely to be a large number of cases coming before the courts, and does he think that the legal aid system will be able to cope with them?
    Mr. Stewart: If the hon. Lady will give us examples, we shall very carefully and sympathetically look into them.

    Old People's Homes, Glasgow
    Mr. W. G. Bennettasked the Secretary of State for Scotland how many elderly people are presently resident in homes provided by Glasgow Corporation with his financial assistance; and what additional accommodation is scheduled for the immediate future.
    Commander Galbraith: About 240 elderly persons are resident in 10 homes provided by the Corporation with Exchequer assistance under the National Assistance Act, 1948. The Corporation are in course of providing two additional homes, one of which will be opened soon.
    Mr. Bennett: Is the Minister satisfied that, in view of the large number awaiting admission to homes such as these, two more homes will be satisfactory to meet the situation?
    Commander Galbraith: My hon. Friend will remember that the Corporation provides homes for a great many other people at Foresthall and elsewhere.

    Approved Schools (Costs)
    Mr. Rossasked the Secretary of State for Scotland the main reasons for the increase from 54s. to 66s. in the

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    weekly contribution payable by education authorities in respect of a child or young person sent to an approved school.
    Mr. Henderson Stewart: The cost of the schools is shared equally between the education authorities and the Exchequer. After the rate of the authority contribution for 1953–54 had been fixed, the numbers in the schools fell, but expenditure on staff and overheads did not fall correspondingly, and the contributions from education authorities, which are based on the numbers of pupils, were not sufficient to meet half the cost. The rate of contribution for 1954–55 has been fixed to recoup the Exchequer in part for the larger share it had to bear in 1953–54 and to take account of the higher cost per head which results from the smaller numbers in the schools and from increases in salaries and wages.
    Mr. Ross: That means, of course that between the Government and the local authorities it is costing £6 12s. a week to keep one child in an approved school. If the number of pupils has fallen, why are the Government not taking steps to reorganise the schools and to reduce the number?
    Mr. Stewart: I think the figure which the hon. Gentleman gives is about right, although I should like to check it.
    Mr. Rossasked the Secretary of State for Scotland the estimated weekly cost of maintaining a child hi an approved school for the year 1954–55; and what percentage increase this shows over 1954–53.
    Mr. Henderson Stewart: The estimated weekly cost for 1954–55 is £6 10s. 5d., which represents an increase of 23·6 per cent, over the figure for 1952–53.
    Mr. Ross: Is not this a shocking example of how the Government fail to control expenditure, and to stop this rise in costs?
    Mr. Stewart: It is easily explained. There are two reasons: (1) the number of children attending the schools has fallen, and (2) there has been a rise in salaries. To neither of them, I think, can the hon. Gentleman raise objections.

    Civil Defence (Hydrogen Bomb)
    Mrs. Cullenasked the Secretary of State for Scotland, in view of the fact that the new hydrogen bomb is 600 times more powerful than the atom bomb, what new instructions he proposes to issue to Civil Defence authorities, especially in regard to air-raid shelters.
    Mr. Henderson Stewart: As my right hon. and learned Friend the Secretary of State for the Home Department said on 1st April, in reply to the hon. Member for South Ayrshire (Mr. Emrys Hughes), instructions to Civil Defence authorities are being reviewed in the light of the development of atomic weapons of all types.
    Mrs. Cullen: Is the hon. Gentleman aware that the Civil Defence authorities in Glasgow have pointed out that in the event of a bomb attack every hospital in Glasgow could be destroyed? What steps is he taking in the matter?
    Mr. Stewart: This is too big a question for me to answer across the Floor of the House at Question time.
    Mr. Emrys Hughes: Would the hon. Gentleman consider sending a delegation to Dublin to see why Dublin is not in so much danger as Glasgow?

    Mental Hospital Patients (Financial Assets)
    Mr. Prydeasked the Secretary of State for Scotland how far his regulations permit the superintendent of a mental hospital in Scotland to assume responsibility for the financial assets of one of his patients and to disburse such assets without court warrant.
    Commander Galbraith: It is an established practice for medical superintendents to undertake the disbursement of small sums placed in the custody of hospital authorities, for the benefit of individual mental patients. This is done without formal authority where the medical superintendent is satisfied about the capacity of the individual patient to instruct or consent to the disbursement. My right hon. Friend sees no reason to forbid this practice.
    Mr. Pryde: Does the Minister consider £75 a small sum?

    Air Survey
    Lord Malcolm Douglas-Hamiltonasked the Secretary of State for Scotland whether he will arrange for a comprehensive aerial survey of Scotland with modern micro-magnetic instruments as well as photographs in order more fully to investigate raw material resources above and below ground, to determine accurately cultivable and grazing areas with easiest access to them, to see with greater certainty the extent of bracken growth, and to investigate any other items which aerial surveys have shown elsewhere to be capable of development for economic benefit of the country
    Mr. Snadden: I understand that the possibility of an aero-magnetic survey for geological purposes is receiving consideration. A photographic survey for the other purposes suggested by my noble Friend would not be likely to add to the information already available.
    Lord Malcolm Douglas-Hamilton: Does not the Joint Under-Secretary of State think that if an aerial survey is to take place it might just as well be comprehensive? Does he not think that the results of what we would learn from a photographic survey might be surprising?
    Mr. Snadden: We think we have all the information that could be got from such a survey, but I have no doubt that the suggestion will be borne in mind.

    Slaughtering Facilities
    Mr. Grimondasked the Secretary of State for Scotland if he is satisfied that there will be adequate slaughtering facilities in the North of Scotland when the new system of meat marketing begins.
    Commander Galbraith: The Slaughterhouses Bill at present in another place requires local authorities to satisfy themselves that slaughterhouse facilities are adequate. They may provide and operate slaughterhouses themselves and may register others who propose to do so. A circular has been sent to local authorities explaining the proposals in the Bill, and I have no doubt that, as they have been advised to do, they will consider, in consultation with the interests concerned, the slaughterhouse accommodation required to meet the situation resulting from the decontrol of meat.
    Mr. Grimond: I thank the right hon. Gentleman for his reply. May I impress upon him how important it is, especially in the North of Scotland—and time marches on—that these slaughterhouses should be ready when the new system comes into force?
    Commander Galbraith: I appreciate the point made by the hon. Gentleman.

    "Galloway Mazer" (Export)
    Mr. Grimondasked the Secretary of State for Scotland what submissions have been made to the Waverley Committee on the future of the "Galloway Mazer."
    Mr. Henderson Stewart: Representations have been submitted to the reviewing committee on the export of works of art by the Keeper of the National Museum of Antiquities of Scotland with regard to the proposed export of the "Galloway Mazer."
    Mr. Grimond: Is it in the power of that committee to make representations? For the benefit of the House, may I ask the Minister to make it clear that this is a most valuable and unique piece of Scottish silver and that it would be a disaster for it to leave Scotland.

    Crofting Commission (Report)
    Mr. Grimondasked the Secretary of State for Scotland when the Report of the Crofting Commission will be published.
    Mr. Snadden: My right hon. Friend hopes to be in a position to publish the Report after the Easter Recess.

    Norwegian Factory Ships
    Mr. John MacLeodasked the Secretary of State for Scotland if he has any information to give the House regarding the use of factory ships in Scottish waters for converting surplus herring into oil and meal.
    Mr. Henderson Stewart: The Herring Industry Board is endeavouring to secure the use of two factory ships. I cannot say more at present.
    Mr. MacLeod: Can the Minister assure the House that the use of these factory ships will not be to the detriment of the establishment of shore-based factories of an economic size? Can he tell the House who owns these factory ships?
    Mr. Stewart: They are Norwegian ships. I do not think that there is any likelihood of the one prejudicing the other kind of production.
    Sir R. Boothby: Can my hon. Friend assure me that these factory ships are not the real cause of the unwarrantable delay in erecting the factory at Peterhead?
    Mr. Stewart: Yes, Sir.
    Mr. MacLeod: Can the Minister assure the House that the taxpayer's money is not toeing used for the benefit of a foreign country and to the detriment of our own people?
    Mr. Stewart: The House knows that the processing of herring is an urgent matter. It needs expansion. The Herring Industry Board is considering the best and most economical ways of achieving that purpose.
    Mr. Hector Hughes: Why cannot this work be undertaken under British auspices instead of being given to the foreigner?
    Mr. Stewart: All these matters are considered, but here is a proposition—and we have gone no further than this—which the Herring Industry Board is examining.

  EDUCATION, SCOTLAND

    Technical College Grants (Apprentices)
    Mr. Prydeasked the Secretary of State for Scotland what financial considerations he applies which prevent an apprentice in the county of Peebles from qualifying for a grant to attend the Heriot Watt or any other technical college for the purpose of improving his trade knowledge.
    Mr. Henderson Stewart: Education authorities are empowered to give grants towards fees, travelling expenses and incidental costs of attendance at technical colleges, but an apprentice may not qualify for grant if he, or a relative on whom he is dependent, is able to meet the whole cost.
    Mr. Pryde: Are we to take it that there are stringent rules or a means test applicable to these regulations?
    Mr. Stewart: The hon. Member will know that the bursary regulations
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    previously applied and now applied, necessarily take account of the parents' means; that is an old-established custom.

    Nursery Schools, Glasgow
    Mr. W. G. Bennettasked the Secretary of State for Scotland the annual cost of nursery schools in Glasgow; and what is the amount recovered in charges.
    Mr. Henderson Stewart: It is estimated that the total cost for the year ending on 15th May, 1954, will be about £123,000; of this sum, about £7,700 will be recovered in charges for meals.
    Mr. Bennett: Is the hon. Gentleman quite satisfied that this is a satisfactory sum to be contributed by the parents?
    Mr. Stewart: Education in these schools is like education in other schools; it is a free service, and we have no means of recovering the cost, except for meals.
    Mr. W. G. Bennettasked the Secretary of State for Scotland the average daily attendance of children at nursery schools in Glasgow during March; what is the number of nursery schools; and what is the total staff employed in this service.
    Mr. Henderson Stewart: The average daily attendance during March was 1,175; the number of schools is 41; and the total staff employed 243.

    Teachers (Status)
    Mr. Hamiltonasked the Secretary of State for Scotland whether, in view of the increasing anxiety among parents and teachers concerning overcrowded classes, the lowering of teaching standards, and the decline in the status of the teaching profession, he will seek to make an early broadcast explaining present and future prospects in the educational field.
    Mr. Henderson Stewart: As my right hon. Friend has already shown in a statement to the Press and in answer to Parliamentary Questions, he does not accept the allegations contained in this Question. No doubt opportunities will present themselves in the future for broadcasts or other statements relating to educational progress in Scotland.
    Mr. Hamilton: How can the Minister possibly be so much out of touch with Scottish opinion? Does he not realise

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    that, if the personality of the Secretary of State for Scotland were allowed to ooze over the ether, the effect upon the morale of the teachers would be absolutely devastating?

  HOUSING, SCOTLAND

    Overspill Populations
    Mrs. Mannasked the Secretary of State for Scotland if he has given consideration to the application to Scotland of a Town Development Act; or what similar assistance he proposes for Scotland.
    Commander Galbraith: My right hon. Friend hopes to receive recommendations on this matter from the Clyde Valley Planning Advisory Committee, whose report on the machinery for dealing with overspill he expects very shortly.
    Mrs. Mann: Is not the right hon. and gallant Gentleman aware that it is more than a year since I put down a similar Question and got a similar answer, and that already the English Act has been two years in operation and the position in Scotland is really worse?
    Commander Galbraith: Yes, but the hon. Lady will understand that there is an Advisory Committee working very hard on this matter. It would be much better to await their report.
    Mr. Thornton-Kemsley: Does my right hon. and gallant Friend not agree that in Scotland there are many areas which would greatly benefit by the infusion of new life from the cities by some such arrangement as the New Town Development Act provides for England?
    Commander Galbraith: That may be so, but I would rather await the report.

    Rents (Old-age Pensioners)
    Mrs. Cullenasked the Secretary of State for Scotland if he will set up a working party to investigate what effect the proposals for increasing rents will have upon the cost of living for old-age pensioners and persons in receipt of National Assistance in the Gorbals division of Glasgow.
    Commander Galbraith: The effect of a repairs increase will vary according to the rent of the house, but persons solely
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    dependent on assistance for their rent will normally receive increased assistance to meet the repairs incrase. In these circumstances, my right hon. Friend does not think that a working party is necessary.
    Mr. Manuel: Is the right hon. and gallant Gentleman aware that the supplementary assistance which this particular class of old age pensioner receives, or will receive when the Bill becomes an Act, will ultimately be passed on to the landlords? Does he think it right that public money should be used in this way?

    Special Housing Association (Direct Labour)
    Mr. T. Fraserasked the Secretary of State for Scotland if he has considered representations from the Scottish National Building Trades' Federation and the Federation of Civil Engineering Contractors (Scottish Section) that the amount of work undertaken by the Direct Labour Organisation of the Scottish Special Housing Association should be reduced; and what reply has been given.
    Mr. Hoyasked the Secretary of State for Scotland why instructions have been given to the Scottish Special Housing Association to reduce the number of houses to be built by direct labour.
    Commander Galbraith: My right hon. Friend has considered various representations from the two federations that the amount of work done by the Direct Labour Organisation of the Association should be reduced. The federations have been told that my right hon. Friend, being satisfied that the Direct Labour Organisation was of sufficient strength to serve its present purpose, did not intend it to expand any further.
    Mr. Fraser: Why does the Minister say that his right hon. Friend has assured these federations of employers that the Direct Labour Organisation will not be increased? Has he not in fact told them that the amount of work to be done by the Direct Labour Organisation will be reduced?
    Commander Galbraith: The answer to the second part of tine question is "No, Sir." The answer to the first part is that we consider that, as the Direct Labour

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    Organisation is already servicing practically all the sites for the Association houses and building about one-fifth, that is sufficient for the present.
    Mr. Hoy: Is it not a fact that the Minister gave an assurance to these particular organisations that, as a result of the action taken by the right hon. and gallant Gentleman and his right hon. Friend, the number of houses to be completed by the Direct Labour Organisation will be less this year than it was last year?
    Commander Galbraith: No, Sir.
    Mr. T. Fraser: Has not the Minister said that the number of houses to be completed by the Direct Labour Organisation will be reduced from 1,366 to 1,185?
    Commander Galbraith: The hon. Gentleman will get a reply in the next Question.
    Mr. Woodburn: What authority have these organisations to call the Government to account for what the Special Housing Association should do?
    Commander Galbraith: None, so far as I am aware.
    Mr. Hoyasked the Secretary of State for Scotland how many houses were completed in 1952–53 by the Direct Labour Organisation of the Scottish Special Housing Association; and how many he estimates will be completed in 1953–54.
    Commander Galbraith: In the years ended 31st March, 1953, and 31st March, 1954, the Association's Direct Labour Organisation completed 1,366 and 1,185 houses, respectively.
    Mr. Hoy: Is it not a fact that as a result of representations that were made to him about the Scottish Special Housing Association, he said that there would be fewer houses built by direct labour than in the previous year?
    Commander Galbraith: The hon. Gentleman should be aware that the programme varies up and down. I think he will find that the number of houses built next year will be above the number completed last year.
    Mr. Hoy: Will the right hon. and gallant Gentleman either deny or confirm
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    that he gave an assurance to these two organisations that, as the result of his directive, the number of houses would be less than in any previous year, as he had told the Association to curtail its activities in the direct labour department?
    Commander Galbraith: I have stated the facts.
    Mr. McInnesasked the Secretary of State for Scotland how many building trades apprentices who were unable to continue their apprenticeship with private contractors have been taken over by the Scottish Special Housing Association during the past two years.
    Commander Galbraith: Nineteen, Sir.
    Mr. McInnes: Can the right hon. and gallant Gentleman indicate whether the apprentices employed by the Association are registered with the National Building Apprentices Training Council? Will he also publicly acknowledge the satisfaction that the Association has given by being able to employ apprentices for whom private contractors had no employment.
    Commander Galbraith: I think that is so.
    Mr. McInnesasked the Secretary of State for Scotland if he has considered a request from the Scottish National Building Trades' Federation and the Federation of Civil Engineering Con tractors (Scottish Section) for permission to examine the accounts of the Scottish Special Housing Association, with a view to satisfying themselves about the association's claims in respect of the economies effected in site servicing by the Direct Labour Organisation; and what reply has been given.
    Commander Galbraith: The federations have been told that the Association's Direct Labour Organisation competes against rates agreed by my right hon. Friend's Department which, he is satisfied, reflect current market rates. My right hon. Friend could not, of course, permit the federations to examine the Association's records to ascertain the detailed basis of the Direct Labour Organisation's estimates and the results.
    Mr. McInnes: Is the right hon. and gallant Gentleman aware that the Association's prices are compared by the Department of Health with competitive

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    tenders? Does not the Controller and Auditor-General also examine the Association's books, and should that not satisfy the contractors that the Association operates on a competitive basis?
    Mr. Woodburn: Do these people assume that because they are Conservatives they can order the Government to bow to them? How will this decision apply to all the other people?
    Commander Galbraith: The right hon. Gentleman evidently knows them better than I do. I do not know what their political colour is.
    Mr. T. Fraserasked the Secretary of State for Scotland what reply he has sent to the representatives of the Scottish National Building Trades' Federation and the Federation of Civil Engineering Contractors (Scottish Section) that the Direct Labour Organisation of the Scottish Special Housing Association is depriving the civil engineering contracting industry of the work of site servicing and of profits.
    Commander Galbraith: The federations have been told that the Direct Labour Organisation's activities do not, in the Government's view, materially affect the volume of work available to private contractors in the building and civil engineering industry.
    Mr. Fraser: How on earth could the Joint Under-Secretary inform those federations of employers that the fact that the Direct Labour Organisation could do the site servicing for nearly all the houses does not affect the work of those organisations? Is it not an impertinence on the part of those organisations to seek to influence the Government to curtail the activities of the Direct Labour Organisation?
    Commander Galbraith: The hon. Gentleman will know that of about 40,000 houses which we are building in Scotland only 5,000 are being built by the Association. In addition, there is all the other civil engineering work to be contracted for. In those circumstances, the Government do not consider that this Organisation has interfered.
    Mr. Hoy: In view of the very unsatisfactory nature of the replies, I beg to give notice that I shall raise the matter on the Adjournment

  MINISTRY OF DEFENCE

    Sea Cadet's Death, Essex
    Mr. Dribergasked the Parliamentary Secretary to tie Ministry of Defence if his attention has been called to the recent death of a sea cadet in Essex, accidentally shot during rifle practice, and to the expert evidence and comments by the foreman of the jury at the inquest; to what extent pre-Service cadet units are equipped with obsolete United States firearms obtained, as in this case, under wartime lend-lease; why this particular rifle was issued to the Sea Cadet Corps without any adequate proof that it could be safely handled; and, in general, what technical tests are made, and how often, of the reliability and safety of weapons in use in pre-Service cadet units.
    The Parliamentary Secretary to the Ministry of Defence (Mr. Nigel Birch): From the reports I have received, it is clear that the primary cause of this unfortunate accident was a breach of range discipline. Pre-Service cadet units are equipped with various types of 22 rifle, including a number obtained from the United States under wartime lease-lend. The United States types are not any less safe than other types. In the case of the Combined Cadet Force, the Army Cadet Force and Air Training Corps Units, rifles are examined about twice a year by armament experts. In the case of the Sea Cadet Corps, maintenance of the rifles is the responsibility of the local units, and they will in future be required to hold an annual certificate of serviceability.
    Mr. Driberg: Does the hon. Gentleman say that the expert evidence given at the inquest was not accurate? His reply just now does not seem to agree at all points with that evidence.
    Mr. Birch: The reply I have given is in accordance with the expert advice I have received.

    New Rifle
    Sir I. Fraserasked the Parliamentary Secretary to the Ministry of Defence what progress is being made with the manufacture and issue of the new rifle.
    Mr. Birch: Five thousand rifles have been ordered from Belgium for troop trials. It is hoped that five hundred will

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    be delivered in July and the rest before the end of the year. Production has not yet started in this country.
    Sir I. Fraser: Are the factories here tooling up for manufacture?
    Mr. Birch: Pre-production planning is going on, but we do not want to go into production until the troop trials are completed.

    Educational Attainments
    Mr. G. Thomasasked the Parliamentary Secretary to the Ministry of Defence what educational attainments qualify entrants to the Services to be classified in standard six.
    Mr. Birch: Standard six in the grading of educational attainments used by the Services means that a man has attended school up to age 15 and has achieved the normal educational level at that age.
    Mr. Thomas: Is the Minister aware that that reply is almost as incomprehensible as that which he gave me last week? Will he explain why the number entering the Army who fail to reach standard six is so much greater than among those entering the other Services?
    Mr. Birch: I apologise for my written answer last week. I do not think that it was clear. I ought to have defined what standard six is. The reason for the standard being lower in the Army is that the Navy takes very few National Service men, and the Air Force can get all it wants. The men choose the Navy and Air Force and these Services, therefore, do not accept the lower standard.

  BRITISH ARMY

    Trooper's Funeral, Germany (Notification to Parents)
    Mr. Dribergasked the Secretary of State for War if he will now make a statement on the circumstances in which the body of Trooper B. A. Brown was buried in Germany, without proper notification to his parents of the funeral arrangements; and why they were not given the opportunity of attending the funeral.
    The Secretary of State for War (Mr. Antony Head): My hon. Friend has
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    already written to the hon. Member about this case. I would myself say how sorry I am that this failure occurred.
    Mr. Driberg: May I ask whether the right hon. Gentleman has seen the letter which I have sent in reply to his hon. Friend's letter to me? It makes one or two new points, I think. Can the right hon. Gentleman say whether, in comparable circumstances, parents have ever been flown to their son's funeral? If so why it was not done in this case, in view of the error which has been admitted?
    Mr. Head: I think that the letter explained the reasons for this error. The flying over of parents for funerals is not a thing which is done, and indeed, in this case it would have been too late to do it

    National Service Men (Middle East Postings)
    Mr. Moyleasked the Secretary of State for War the minimum age and the period of training which must previously have been served before a soldier can be sent to the Middle East.
    Mr. Head: Before embarking for the Middle East, a soldier must be 18 years, 3 months old and have had at least 12 weeks' service, including 10 weeks' training.
    Mr. Moyle: In view of the fact that, when in Opposition, none was more hostile than the right hon. Gentleman to the idea of sending inexperienced lads to active areas, why does he now permit inexperienced youths to be sent to the Middle East with but a minimum of training, when there are already 80,000 browned-off troops there?
    Mr. Head: The regulation about the age at which National Service men go to the Middle East has been the same since the introduction of National Service.
    Mr. M. Stewart: Can the right hon. Gentleman say whether any of his hon. Friends who, during the last Government's period of office, were so anxious to get these conditions altered, have exercised any pressure on him recently?
    Mr. Head: I am not aware, without reference to HANSARD, of any pressure in this respect.

    Courts-Martial (Committee Recommendations)
    Mr. Swinglerasked the Secretary of State for War how many of the recommendations of the Lewis Committee on Courts-Martial have not yet been implemented in the Army, and why they have not been implemented.
    Mr. Head: Apart from the recommendations which were not accepted by the Government of the day, nine. The Select Committee on the Army Act and Air Force Act is now considering these nine recommendations.
    Mr. Swingler: As it is five years since the Lewis Committee reported, should not the Secretary of State proceed to implement the recommendations that have been accepted without waiting for the report of the Select Committee, which has a very much wider task to complete?
    Mr. Head: Those recommendations which were accepted by the then Government have been put into effect. The ones now outstanding are being considered by the Select Committee, in accordance with the opinion of the House at the time the Select Committee was appointed.

    British Troops, Colonial Territories (Costs)
    Mr. Swinglerasked the Secretary of State for War (1) to what extent the cost of maintaining British troops in Colonial Territories falls on the British, and on the colonial, taxpayer, respectively;
    (2) to what extent the cost of transporting British troops between the United Kingdom and Colonial Territories falls on the British, and on the colonial, taxpayer, respectively.
    Mr. Head: It depends on the circumstances. Where United Kingdom troops are stationed in Colonial Territories for reasons of Commonwealth defence, the cost of transporting and maintaining them there is met from United Kingdom funds, but the Colonies are encouraged to make contributions towards the general costs of Commonwealth defence. Where the troops are sent to help to preserve or restore order, the Colonies are expected to pay, so far as they can afford to do so, the extra costs, including transport.
    Mr. Swingler: Can the Minister tell us what say the citizens of the Colonial Territories have in the employment of such troops, what is the total amount of money which they contribute annually towards this military expenditure, and why they should pay so heavily for the blunders of the Colonial Secretary?
    Mr. Head: Those are different and much more detailed questions, which do not arise out of this one.
    Mr. Braine: Is my right hon. Friend aware that all those who are concerned with the welfare, good government and security of the colonial peoples consider this as money well spent?
    Mr. J. Johnson: Can the Minister tell us who is going to pay for the 19 new colonial battalions, about which he was so coy last week?
    Mr. Head: I am far from coy about these battalions, but without notice I could not give the hon. Member a detailed answer.

    Youth Employment Service
    Mr. Malcolm MacPhersonasked the Secretary of State for War what liaison he maintains with the Youth Employment Service.
    Mr. Head: The Army's school liaison officers and chief recruiting officers at command headquarters and recruiting officers locally keep in touch with the Youth Employment Service.
    Mr. MacPherson: Does not the right hon. Gentleman agree that because of the large number of young men he gets into the Army, both for National Service and as Regulars, the closer liaison he maintains with the Youth Employment Service the better?
    Mr. Head: Yes, Sir.

    Coal (Whitewashing)
    Mr. Ian Harveyasked the Secretary of State for War whether the practice of whitewashing coal, which has been brought to his attention by the hon. Member for Harrow, East, has now been expressly forbidden as a military duty by his Department.
    Mr. Head: Coal may sometimes be whitewashed to mark the edge of a coal dump for safety hi the dark or as a check

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    against pilfering. I think this has led to the old Army legend that it is sometimes done to please inspecting officers, an instance of which has yet to be proved.
    Mr. Harvey: Is my right hon. Friend aware that a pail of whitewash would soon overcome this device against the pilfering of coal? As this is, in any case, a very silly practice, can it be stopped?
    Mr. Logan: May I take it that this method is not going to be adopted in this House?
    Mr. Head: Yes, Sir. I think there are a lot of things that might be whitewashed, but not that.

    Infantry Training
    Mr. Bellengerasked the Secretary of State for War to what extent officers and non-commissioned officers returning from Korea, Malaya or Kenya, are being used to train the Regular Army in modern battle tactics.
    Mr. Head: The fullest possible. For instance, on the staff of one school, which is not exceptional, there are three majors, six captains, two warrant officers, 12 sergeants and seven corporals who have experience of operations in Korea.
    Mr. Bellenger: Has the right hon. Gentleman taken the opportunity of reading the three articles in the "Manchester Guardian" written by a platoon officer who saw active service in Korea? They are very restrained articles. Do they not tend to show that there is not sufficient intensive battle training before our young troops are sent into action?
    Mr. Head: I have read those articles, which were written by a young subaltern. I have already been into this and seen reports of General Erskine and also of General West and others. It is a question of taking the word of a young subaltern against many others. They are very damaging articles. I am satisfied, from the inquiries I have made, that they are not grounded on fact or justified.
    Mr. Fienburghasked the Secretary of State for War if he will make immediate inquiry into the standards of infantry field training in the Army.
    Mr. Head: The standards of field training are continually watched and
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    studied by the military training staffs in and outside the War Office.
    Mr. Fienburgh: Is it not the case that, the Secretary of State having been trained in the cavalry, he has grown up with the idea that in dire circumstances his horse will always look after him? This is certainly not so in the infantry. Do not the articles to which reference has already been made bear the hallmarks of authenticity and bear out the experience of many people who are concerned with the training of the Territorial Army, and in particular point not only to shortcomings in Korea but shortcomings in the training of the troops in Germany?
    Mr. Head: It was not my experience during my training that my horse always looked after me. So far as the training in Germany is concerned, it is my belief that the infantry training in Germany is of the highest standard ever reached by the Army in peace. I should be only too glad to enable the hon. Gentleman to go to look at it if he would like me to arrange it.
    Mr. Wiggasked the Secretary of State for War to state the infantry and guard battalions which proceeded from Germany to Korea between 25th June, 1950, and the Korean armistice; and if he will indicate those battalions that underwent three weeks training in East Anglia between the date of leaving Germany and embarking for Korea.
    Mr. Head: The following infantry battalions went from Germany to Korea during the period: 1 Royal Norfolk. 1 Black Watch, 1 Royal Fusiliers, 1 Durham Light Infantry, 1 Duke of Wellington's Regiment and 1 Royal Scots. Of these, only 1 Royal Fusiliers carried out training in East Anglia before embarkation.
    Mr. Wigg: Is the right hon. Gentleman aware that it seems that the officer who wrote in the "Manchester Guardian" about the system of training in Germany was serving in the Royal Fusiliers? Will he look at the system of training not only in the first battalion of that regiment but of the 5th Infantry Brigade, because if anything is wrong with training in Germany it must be in that brigade? Will he look into that and make a statement to the House?
    Mr. Head: I have already done that both in Germany and East Anglia, and have seen reports of the generals concerned.

    "Empire Windrush" (Loss)
    Mr. Burdenasked the Secretary of State for War if he will give an undertaking that all persons travelling on thess. "Empire Windrush" who suffered loss because of the fire on that vessel, and whose possessions were not insured, will receive full compensation.
    Mr. Ian Harveyasked the Secretary of State for War whether he will give an assurance that those who have lost personal clothing and possessions as a result of the loss of the ss. "Empire Windrush" are to be completely compensated, in view of the exceptional character of the disaster and their own exemplary conduct\ which contributed towards minimising it.
    Mr. Head: This question is still under discussion, but I hope to make an announcement before the Easter Recess.
    Mr. Burden: If it should be brought to light that this vessel was not in the state that it should have been and that there were failures in the mechanism, and so on, will my right hon. Friend bear that in mind when he is negotiating with the Chancellor of the Exchequer for the moneys to be paid out on the loss of goods and chattels?
    Mr. Head: I should not like to anticipate my statement.

    Church Parades
    Mr. Wyattasked the Secretary of State for War why Queen's Regulations relating to church parades have been consistently contravened in Southern Command; and why, upon this being brought to his attention, he took no action.
    Mr. Head: If the hon. Member has any complaint about a specific church parade I will look into it.
    Mr. Wyatt: The Secretary of State himself told me that 101 church parades had taken place illegally. Why, in view of the information he himself has given about more than 100 illegal parades in
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    Southern Command, is he not prepared to take action? Is it not a fact that Queen's Regulations say that church parades may take place only on days of local or national significance, and that a regimental week-end is not a day of local significance?
    Mr. Head: I wrote to the hon. Member explaining that the parades that have taken place in Southern Command came within the category specified in Queen's Regulations.

  MINISTRY OF FOOD (FUTURE)
  Mr. Hurdasked the Prime Minister if he is satisfied that the recent rate of progress in derationing foodstuffs and winding up the trading affairs of the Ministry of Food will make it possible to close this Department of State by the end of this year.
  Sir H. Williamsasked the Prime Minister to what Departments it is intended to allot the remaining functions of the Ministry of Food after the forthcoming abolition of rationing.
  The Prime Minister (Sir Winston Churchill): The end of rationing this summer will make possible further large staff reductions but will still leave important duties of Government to be performed. It is not yet possible to forecast the arrangements for carrying out these long term functions.
  Mr. Hurd: Will the Prime Minister tell us whether the Government have decided that the Ministry of Food shall be closed down at the earliest possible time, having regard to its remaining duties?
  The Prime Minister: Yes, Sir. I think that general statements of that character have been made for some time past, but the actual details must be precisely stated when they are all settled.
  Mr. Short: Will the right hon. Gentleman tell us who will bear the cost of the distribution of welfare foods when the Ministry of Food is closed down, and whether this burden will be laid upon local authorities?
  The Prime Minister: I certainly think that I ought to have notice of that Question.

  HYDROGEN BOMB
  Mr. Chetwyndasked the Prime Minister what British observers were present at the recent hydrogen bomb experiments in the Pacific.
  The Prime Minister: No British technical observers watched the explosions. But the United States authorities had agreed that we should have certain facilities for collecting scientific data bearing on their effects. Similar facilities had been granted to the Americans on the occasion of our own nuclear test in Australia. Therefore an aircraft of the Royal Air Force made a flight in the vicinity of the explosion of 1st March, some hours after it occurred; a similar flight was also made on 27th March. No injury or damage was suffered by this aircraft or its crew, on either occasion.
  I think, however, that the House should know that two Canberra aircraft which had been assigned to this duty were lost in transit to the American base in the Pacific. Of these, one is believed to have fallen into the sea and the relatives of its crew of three have, of course, been told. The second made a forced landing on an island with the loss of the aircraft but without injury to the crew. Her Majesty's Government greatly regret the loss of life, and I feel sure that the House will join with me in expressing our sympathy with the relatives. The House will understand that the loss of these two aircraft was in no way due to the risks of the special mission which they were to have undertaken.
  Mr. Chetwynd: On behalf of all Members on this side of the House, I should like to express our regret at these losses. May I also ask the Prime Minister, in view of the importance of this House and the Government having full information on this matter, whether we are to have observers present at future tests?
  The Prime Minister: I have not any knowledge of new arrangements having been made from those which existed at the beginning of these tests.
  Mr. Awberyasked the Prime Minister if he is aware that the uncontrolled destructive power indicated in the recent hydrogen bomb test is creating a feeling of insecurity in the minds of people who are becoming convinced that
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  it is more likely to destroy than to save civilisation; and whether he will take steps to bring about an early meeting of the United Nations in order to direct the attention of the nations away from a negative and mutually destructive policy to one of mutual aid by using more effectively the. machinery of the United Nations.
  The Prime Minister: My right hon. Friend the Foreign Secretary dealt fully with this aspect yesterday. I also said something about it.
  Mr. Awbery: Is the Prime Minister aware that there is a general feeling in this country that the only organisation which can deal efficiently and effectively with the "hell bomb" is the United Nations organisation? Is he further aware that the League of Nations was destroyed because it was not used, and will he see that the United Nations organisation is not destroyed in the same way? Will he use it effectively now, at this critical moment in our history, so that it will not be destroyed in the way that the League of Nations was?
  The Prime Minister: I thought we were all agreed yesterday that something much more intimate, swift and precise should be put into operation than the procedure of the United Nations organisation.
  Mr. Wade: Can the right hon. Gentleman give us an assurance that, pending the meeting of the Assembly or appropriate committee of the United Nations, he will keep in close touch not only with the President of the United States but also with the Governments of the British Commonwealth, since the deep concern which is felt by the peoples of this country is, I believe, shared by the peoples of the Commonwealth, particularly in Australia and New Zealand?
  The Prime Minister: Yes. The Secretary of State for Commonwealth Relations is in continual touch and correspondence with Australia and New Zealand.

  PRESIDENT EISENHOWER
  Mr. Lewisasked the Prime Minister whether he will extend an invitation to President Eisenhower to visit this country for the purpose of discussing with him present international difficulties

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  and, in particular, matters connected with the hydrogen bomb, and of resolving any differences of opinion that may stand in the way of a subsequent approach to President Malenkov for the calling of Big Four talks on the present international situation.
  The Prime Minister: It goes without saying that we should be delighted to welcome President Eisenhower in this country, where we knew him so well during the war. I have more than once expressed my hopes that such a visit would be possible. I do not, however, think it likely that he would feel that he could leave his heavy duties at the present time. The visit of a head of State, I must remind the House, is a matter of the highest consequence.
  Mr. Lewis: While thanking the Prime Minister for that reply, the sentiment of which we all share, may I ask him whether he will, as soon as he feels that a convenient opportunity presents itself, extend an invitation to President Eisenhower?
  The Prime Minister: We shall certainly take whatever measures we think best, but I am not sure that, with the question in the controversial position it is now, it would be the best thing to extend an invitation at this moment. I have already more than once expressed to President Eisenhower the great satisfaction which it would give the whole
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  of this country if he could pay us a visit, but he has been in office only for a year and the opportunity has not occurred.

  EAST-WEST TRADE
  Mr. Wyattasked the Prime Minister whether he will request the resignation of the President of the Board of Trade for failure to implement Her Majesty's Government policy of expanding East-West trade.
  The Prime Minister: No, Sir.
  Mr. Wyatt: Does not the Prime Minister remember that on 25th February he forecast the immediate expansion of East-West trade, and that ever since the President of the Board of Trade has been saying it will take two or three months before even some of the most important restrictions can be removed from strategic goods which are sent to and fro between ourselves and Russia? Unless something more urgent is done about it, the Prime Minister's own policy will be frustrated.
  The Prime Minister: No one has worked harder, more persistently and strenuously every day at the details which are involved in bringing about a greater expansion of East-West trade than my right hon. Friend. I can assure the House that he has been a fanatic in the matter.

ORDERS OF THE DAY

  WAYS AND MEANS
  Considered in Committee.
  [Sir CHARLES MACANDREW in the Chair]

  BUDGET PROPOSALS
  3.31 p.m.
  The Chancellor of the Exchequer (Mr. R. A. Butler): A year ago I laid before this Committee a series of proposals which were designed, as I then said, to get us
  "out of the slack water, lighten the ship, and give her way."—[OFFICIAL REPORT, 14th April, 1953; Vol. 514, c. 50.]
  My first duty today must be briefly to review the marked progress we have made since then.

  BUDGET PROPOSALS

    REVIEW OF 1953–54
    The objective of my first Budget was to rectify and strengthen our balance of payments. This was done. The tasks for the 1953 Budget were to continue to fortify our overseas account and to seize every opportunity for expanding production at home. In the last Budget we restored initial allowances, to encourage investment. We reduced taxes, to increase economic incentives and to stimulate demand and production.
    But since our balance of payments, though it had improved, was still insecure, and since we could not risk any renewal of inflation, I decided that there must be limits to the extent to which we could deliberately expand the economy. We had to steer a middle course. Looking back over 1953, I think we can fairly say that our policy has been justified by events. In that year industrial production reached heights never before recorded in our country's history.

    BALANCE OF PAYMENTS
    A year ago I told the Committee that the sterling area must as a whole be at least in balance with the rest of the world. As the Committee already knows, the sterling area converted a huge deficit in the year ending 30th June, 1952, into a surplus of over £400 million in the following year. This was a remarkable achievement, of which we members of the sterling area, who gathered together recently at Sydney, felt justly proud.
    This recovery was due mainly to the adoption of sound internal measures. But it was also, in part, due to the drastic import restrictions imposed by all sterling area countries following the crisis of 1951. As these emergency restrictions are, rightly, being removed, we must expect the surplus to fall from this high rate, especially in the second half of the year, which for seasonal reasons is usually less favourable to the sterling area's earnings, and also contains the capital and interest payment on our debts to Canada and the U.S.A. The surplus in the second half of 1953 has now been provisionally estimated at about £100 million, and for the year as a whole at some £320 million.

    GOLD AND DOLLAR RESERVES
    As a result of the sterling area's achievement, the gold and dollar reserves rose during 1953 by £240 million, to a total of £899 million. The Committee should know that in the first quarter of this year the reserves rose by another £60 million. The result was that at the end of March they stood at £959 million. Here, too, we may feel modestly satisfied—but not complacent. The level of £959 million is a little more than half as much again as the lowest figure to which the reserves fell in 1952; so that there is a long way to go before they reach an adequate level.
    The United Kingdom's own balance of payments with the rest of the world yielded a surplus of about £225 million on current account in 1953, after receiving about £100 million of aid from the United States. In the second half of the year, our total current surplus had risen to an annual rate of £300 million, after taking account of U.S. aid.

    EXPORTS
    One of the most significant developments affecting our own balance of payments has been the further movement of the terms of trade in our favour. One result of this has been—and the Committee should have all the facts placed before them—that during 1953 the United Kingdom was able to buy a volume of imports 9 per cent, higher than in the previous year at 4 per cent, lower cost. This has been a considerable help to us. But we must also remember—and this is sometimes forgotten—that a movement of this kind also tends to reduce

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    the purchases of some of our best overseas customers from us.
    I shall have more to say later about our export performance, but I would simply note here that we cannot expect to enjoy both favourable terms of trade and easy export markets at the same time. It is, therefore, encouraging to record that we increased our exports to those areas, particularly North America and Western Europe, where economic activity remained high and trade was not beset by import restrictions. Some countries in the sterling area found it possible to relax their restrictions during the year, and have made progress in this direction since our talks at Sydney. Our exports have responded to this treatment.
    Meanwhile we have to note the manifest increase in the confidence which the world has placed in sterling. This is shown by the strengthening of the reserves, the marked strength of the sterling-dollar rate, and the small gap, over a long period, between the official sterling rate and the unofficial rates for transferable sterling. This confidence has enabled us to make two important moves forward towards a freer system of trade and payments. One is the unification of what is called non-resident sterling and the other is the re-opening of the London gold market. We hope and expect that this will increase still further the strength of sterling and the world's use of it. Certainly the first reactions to these moves have been cheering.

    THE HOME FRONT
    What is more encouraging is that we have been able to combine this external progress with a considerable expansion in production and improvement of living standards at home. Over 1953 as a whole industrial production was 6 per cent, higher than in 1952. This increase has continued into 1954. This welcome surge forward is partly due to a natural reaction from the period in 1952 when consumers' expenditure was abnormally low and investment in stocks had been cut back. The resumption of investment in stocks accounts for some of the increase in production.
    But the recovery has also been due to some more fundamental influences. Nearly half the increase in industrial production was brought about by higher investment and higher defence expendi-
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    ture. Personal consumption, assisted by the tax concessions which we made last year, also rose in volume, by about 4 per cent, over the previous year. It has sometimes been said that this increase of personal consumption is a sign that we did, after all, overdo things last year; even that we brought back inflation.
    For my part, I take pride in the increased freedom of choice which the citizen now feels that he can enjoy in his or her daily life. The truth is that we must not be frightened of a little more ease and happiness or feel that what is pleasant must necessarily be evil. We must realise that we shall be able to increase our standard of living through an expansion of production only if that expansion is a balanced expansion, benefiting each sector of the economy, including personal consumption, in its proper degree.
    In the earlier part of the year exports contributed little to the growth of production; but in the later months they increased more rapidly than production, and outstripped the increase of home demand, so that by the end of 1953 the volume of exports was 10 per cent, higher than it had been a year earlier.

    EMPLOYMENT
    The expansion in output has been accompanied by a high and stable level of employment. The total of unemployed in Great Britain fell from 453,000 in January, 1953, to 373,000 in January, 1954. At the same time, unfilled vacancies rose from about 230,000 to 270,000. So it can be said that, broadly speaking, there are, at the moment, neither too many workers for the jobs, nor too many jobs for the workers. Moreover, output rose a good deal, and rose more than employment. This recovery in productivity marked a return, in most industries, to the 1951 level.
    The resources at our disposal were, of course, enlarged not only by this rise in productivity but also by the improvement in the terms of trade, whose support to our external balance of payments I have already mentioned. We have been asked what advantage we have to show at home from the improvement in the terms of trade. This is the answer to that question. In brief, these improved terms have enabled us to increase our imports of food and raw materials, without impos-

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    ing a corresponding extra strain on our balance of payments or our reserves, in spite of the fact that exports were, unfortunately, slow to increase. This made it easier for our economy to carry its heavy burdens, including the defence programme; and it also contributed, together with our sound financial policy, to the welcome stability of prices throughout the year.
    The developments which I have described are encouraging, but it will be our duty today and during these debates to search out the less satisfactory features of 1953. That is what I did over the last year and then diagnosed as a result. In my last Budget Statement, I pointed out the decline in production in 1952 and recommended means of dealing with it. This year I point to productivity. We cannot be complacent about its increase, when we remember that output per man in manufacturing industry in 1953 was, on the average, little above the 1951 level and that our rate of increase is far too often below that of our overseas competitors. I point also to exports. These have expanded over the year, as I have shown, but we need to obtain a substantially larger volume of exports if our balance of payments is to be secure.
    Moreover, taking the year as a whole, there has been an insufficient increase in investment in private manufacturing industry. It is true that the volume of fixed investment increased in 1953 by about £200 million. But most of this was accounted for by the larger number of new houses built, and virtually all the rest by higher investment by the basic industries. The level of our industrial investment is still too low; it is still too far below the corresponding achievement in the United States, and the trend compares unfavourably with the effort of some other countries, who are becoming our keen rivals in world markets. The moral for ourselves is serious; and I shall have more to say on this subject at a later stage of my speech.
    In framing plans for next year we must therefore start from this simple truth. Our objective is expansion without inflation. If we are to achieve this, we must continue to raise productivity, to expand exports, and to increase productive investment. So much for the Revenue and how we got along last year.

    EXCHEQUER OUT-TURN
    I will now summarise the main items of the Exchequer Accounts in traditional manner for the past year. Total revenue amounted to £4,368 million. This, I may point out, is, in total, exactly the figure I forecast, though a suitable sense of modesty compels me to admit that it is not composed exactly as I thought it would be.

    REVENUE
    Inland Revenue duties amounted to £2,340 million against the estimate of £2,436 million, that is £96 million less. The shortfall occurred in Income Tax, Profits Tax and Excess Profits Levy, and was primarily due to the fact that company profits in the textile and allied trades declined as a result of the 1952 recession rather more than we could foresee. In addition, the suspension of initial allowances from April, 1952, produced a somewhat smaller increase in revenue than we had hoped. On the other hand, the general buoyancy of the economy in 1953 was reflected in an increase in the value of Stock Exchange securities and other property, with the result that the yield of both Death Duties and Stamp Duties was larger than the estimate. The yield of Surtax was also slightly greater that was expected.
    But if Inland Revenue fell short of expectations, Customs and Excise Duties exceeded them. The total yield of these duties was £1,764 million, or £39 million more than the estimate. Tobacco yielded £627 million, or £12 million more than the estimate. Beer, wines and spirits, as usual, returned a score second only to tobacco, providing £383 million or £11 million more than the estimate. Import Duties yielded £54 million or £16 million less than the estimate. Purchase Tax produced a total of £299 million, no less than £39 million over the estimate.
    Non-tax revenue yielded more than the estimate. For example, receipts from Sundry Loans amounted to £38 million, compared with the forecast of £25 million, practically the whole of the difference being accounted for by an advance repayment of part of our wartime loans to the Netherlands Government. Miscellaneous Revenue has produced £136 million, or £41 million more than the Budget estimate, an increase largely due to the trading surplus of the Ministry of Materials.

    EXPENDITURE
    Now for expenditure. Consolidated Fund Services, at £674 million, were £1 million more than I estimated in the Budget. Expenditure on Supply Services was forecast at £3,586 million, and amounted, in fact, to £3,600 million. This was only £14 million wide of the estimate. But, considered separately, the elements of this total, defence expenditure and expenditure on civil supply, took different courses.
    I estimated defence expenditure at £1,497 million, after allowing for £140 million of appropriations in aid from the sterling counterpart of economic aid from the United States. In fact, expenditure on defence amounted to £1,365 million, or £132 million less than the estimate, in spite of the fact that the appropriations in aid from sterling counterpart were £125 million, or £15 million less than the forecast. There are many reasons for this shortfall, but perhaps the most important is the slower rate of deliveries of certain items of defence equipment, slower than we had allowed, or, indeed, hoped for, in the past year.
    Civil expenditure, on the other hand, at £2,235 million, was £146 million more than the Budget estimate. The Committee have already seen details of the supplementary provisions which cause this excess; it consisted mainly of the additional requirements of the Ministry of Food and of the Ministry of Agriculture and Fisheries for the support of home agriculture, for the financing of sugar stocks, and for flood relief.
    The total expenditure under all heads amounted, therefore, to £4,274 million, against my estimate of £4,259 million, an excess of £15 million.

    SUMMARY OF OUT-TURN
    My Budget estimate, the Committee will remember, was a surplus above the line of £109 million. The actual result was a surplus of £94 million, within £15 million of the estimate. Below the line, we have done better than the estimate as regards both receipts and payments. On the receipts side, we have had £42 million in repayment of advances from the Raw Cotton Commission, compared with the estimate of £10 million; and on the payments side, we have issued £299 million by way of loans to local authorities, compared with the forecast of £400 million.
    As the Committee know, this does not mean that the local authorities have reduced their capital expenditure. On the contrary, they have energetically maintained their investment in houses and other capital assets. It does mean that they have also shown energy and skill in raising their capital from outside sources. It is now 15 months since they were given their freedom to raise loans in the stock and mortgage markets, and from other non-Government sources. The figures show that many of them have made good use of their opportunities; and their action has assisted the Exchequer. This is a movement that I expect to continue, as the Committee will see when I come to my estimates for the year ahead.
    In all, therefore, as compared with the estimate of £549 million for total net outgoings below the line, the actual figure was £391 million, or a saving of £158 million. Thanks to the fall in payments below the line combined with the surplus above the line, the net overall outgoings have been reduced to £297 million.

    NATIONAL DEBT
    This sum has, of course, had to be met by Exchequer borrowing. The National Debt at 31st March last stood at a total of £26,583 million, an increase of £531 million over the year. The main factors contributing to the increase are, first, the net Exchequer outgoings, which I have already mentioned, and, second, the transfer to the Treasury, under the Iron and Steel Act, 1953, of liability for £244 million of British Iron and Steel 3½ per cent. Guaranteed Stock. The Committee will, of course, also remember that the Act transferred the securities of the nationalised companies to the Holding and Realisation Agency. The Debt was also increased by the issue of £47 million of Coal Compensation Stock, which is likewise balanced by the corresponding liability of the National Coal Board to the Exchequer.
    The state of the Debt reflects also, of course, our satisfactory progress in dealing with our obligations which matured during the year. We converted no less than …552 million of 1¾ per cent, serial Funding Stock, 1953, and £738 million of 2½per cent. National War Bonds, 1952–54, into securities maturing in later years. No more than £96 million of the

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    £1,386 million of the two original loans remained to be paid off on maturity. New issues in the year consisted of a second tranche of £100 million of 3 per cent. Exchequer Stock, 1960, and £341 million of a new 3 per cent. Exchequer Stock, 1962–63. I will not detain the Committee further with details of the Debt. The other changes in its composition will be seen in the Financial Statement.

    NATIONAL SAVINGS
    It is right, however, that I should at this point acknowledge the valuable support which the Exchequer received in 1953 from the National Savings Movement. I assure their leaders and voluntary workers that the Exchequer has benefited greatly from their support, and that they have made a notable contribution to our economic stability. They have brought us good tidings. The National Savings record shows that in the last three months new sayings exceeded withdrawals by £40 million; that is £30 million better than in the same period last year. The savers must not relax in the coming year. A Budget cannot succeed by fiscal measures only; and I rely on the skill and enthusiasm of the Savings Movement to continue to encourage personal savings, guiding the money into National Savings securities to the advantage of the State and of the savers themselves.

    SUMMARY OF 1953–54
    That, I think, is sufficient of figures for 1953–54. But in bidding farewell to that year, I think I may claim that its results, as I have tried to summarise them, provide ample justification of the policy on which last year's Budget was based. The success of a Budget should be judged, not by the narrow arithmetic of the Exchequer accounts, but by its wider effects on the economy. What were these effects?
    Production has expanded; we have reduced taxes and enjoyed an increase in consumption, the benefits of which have been very widely spread; our external balance of payments and our gold and dollar reserves have been strengthened; the economy has been able to respond rapidly to the revival of export demand as it occurred in the later part of the year; we have enjoyed greater stability of prices; and we have been able to free from control many commodity and agri-
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    cultural markets. Indeed, the fact that we have been able to foster expansion and go ahead with decontrol without a general rise in prices shows that we have held a fair balance between inflation and deflation. That, I suggest, is not a bad record of a year's voyage. It is a fair indication that, after the measures which we took 12 months ago, the ship really did make good progress and get out of slack water. But I have not shirked the problems which 1953 has still left us to face, and we had better now examine, first, the arithmetic, and then the wider prospects of the year ahead.

    PROSPECTS FOR 1954–55
    In looking at the prospects for 1954–55, let me begin with the conventional above the line Budget, in ordinary Exchequer terms.

    REVENUE FOR 1954–55
    I estimate that revenue on the basis of existing taxation will amount to £4,537 million, an increase of £169 million over the out-turn in 1953–54. Inland Revenue duties in 1954–55 are expected to yield £2,385 million, an increase of £45 million compared with the out-turn for 1953–54. This increase is wholly attributable to Income Tax, from which I expect to collect £1,800 million, or £69 million more than last year. This is partly due to the recovery in profits during 1953 and partly to increases in wages and salaries. The increase is after allowing for the cost— about £50 million—of the restoration of initial allowances, which I announced at this time last year.
    Profits Tax, on the other hand, is expected to yield only £172 million this year, a reduction of £16 million compared with 1953–54. This is because part of last year's collection consisted of arrears of tax at the higher gross rates applicable up to the end of 1951. I put the yield of Excess Profits Levy in 1954–55 at £60 million—a fall of £6 million on the previous year; and the yield of Surtax at £132 million, or approximately the same as the 1953–54 out-turn. Death Duties at £165 million, Stamp Duties at £55 million and Miscellaneous Inland Revenue duties at £1 million are also expected to bring in about the same amount as last year.
    I put the revenue from Customs and Excise duties on the existing basis of taxation at £1,785 million in 1954–55, compared with £1,764 million last year. The principal items in this total are: tobacco, £633 million; beer and other alcoholic drinks, £381 million; oil, £300 million; Purchase Tax, £295 million; Import Duties, £56 million; entertainments, £44 million; and betting £30 million.
    Allowing for a small increase of £4 million in the yield of motor duties, I estimate, therefore, that total tax revenue will amount to £4,247 million, an increase of £70 million over the corresponding yield last year. From non-tax revenue I also expect a considerable increase—£4 million more from broadcast licences, a result mainly of the higher charges which were announced a month ago; and £109 million more from Miscellaneous Revenue, which reflects, among other things, the proceeds of the expected liquidation of trading stocks by the Ministry of Food, and brings the total of Miscellaneous Revenue up to £245 million.

    EXPENDITURE FOR 1954–55
    I put total expenditure above the line for 1954–55 at £4,523 million, an increase of £264 million on the original estimate for 1953–54. This, of course, allows for the reduction in the Ministry of Food Estimate as a result of the Annual Review of agriculture and the consequent price settlement. Consolidated Fund Services amount to £667 million, or £6 million less than last year's estimate. They need, I think, no detailed comment.
    There is no change in the amount provided for the service of the Debt, but I do propose to alter the form in which that provision is made. Ever since the Finance Act of 1928, this has been the Permanent Debt Charge, which was a sum fixed in advance to cover the service and reduction of Debt over a period of years. But every year Parliament has authorised, instead of the sum prescribed in 1928, the actual amount required to service the Debt in the coming year. The fact is that the growth of the Debt, particularly during the last war, has made the existing provisions for the Permanent Debt Charge ineffective. I propose, therefore, to repeal them, and so bring the law into accord with the established practice.
    The increase of total expenditure over last year is more than accounted for by Supply Services. Defence expenditure at £1,555 million, as compared with the £1,497 million estimated a year ago, rises by £58 million. Civil expenditure at £2,301 million shows an increase of £212 million over last year's original estimate of £2,089 million. In sum, therefore, the above-the-line account shows a surplus of £14 million.
    To complete the picture in broad outline, I need only mention that the below-the-line estimate shows an increase of £16 million in the provision of capital for the National Coal Board; a reduction of £52 million in the provision for War Damage, partly due to the clearing up last year of the Business Scheme; and, in the light of last year's experience, a reduction of £100 million in the provision for loans to local authorities. We may also have to finance certain compensation payments under the Town and Country Planning Bill now before Parliament; but it is too early to name a figure for them. After allowing for the offsetting receipts, I put the net payments below the line at £388 million.
    Such, then, in outline, is the Budget picture for 1954–55 on the existing basis of taxation. Its essential features are revenue of £4,537 million, expenditure of £4,523 million, and a small surplus of £14 million above the line.
    The Committee will see that we have before us, therefore, the picture of a Budget broadly in balance—the picture of a Budget which showed a moderate surplus on last year's out-turn and seems likely to show a virtual equilibrium in the year which lies ahead. This is not a bad record for a country which has been carrying a defence load double that of five years ago and an ever-enlarging system of social services.
    What then, shall be the pattern of this year's Budget? Are we to leave things as they are, or are we to make changes this way or that? The measures proposed in last year's Budget seem still to be working themselves out broadly according to plan, and to be providing the right sort of general climate in the economy. So far as I can judge, they are likely to continue to do so, and they ought, therefore, to be given more time to produce further beneficial effects.
    But I must remind the Committee of some powerful forces of wind and weather which may well blow us off course. Three of them are very much in my mind—the more so since they are by no means wholly under our own control. The first is the formidable mass of Government expenditure. The second is the level of world trade, and of our own share of that trade. The third is the possible effect on the sterling area and ourselves of the current decline in American production. I will examine these in turn.

    GOVERNMENT EXPENDITURE
    I will take Government expenditure first. The continuing rise in Government expenditure is serious enough in itself. On the income side we must recall that by next year most of the revenue from the Excess Profits Levy will have ceased, and we shall no longer be able to count on a large receipt from the sale of food stocks. We must also face a considerable reduction in U.S. aid which we have got used to appropriating in aid of our defence expenditure—and exceedingly grateful we are for it. The hard truth is that, much as we all want greater relief from taxation, even our present high rates will not save us from a serious threat to the balance of future Budgets if the growth of expenditure is not controlled. Of course, that balance may be disturbed by causes other than a rise in expenditure and an ending of particular receipts. If, for example, trade slackens, owing to a recession either here or overseas, the effects will be reflected in the revenue figures, mainly in the following year. Thus a slackening in economic activity may also lead us to a Budget deficit.
    The aim of the Budget must always be to maintain the balance of the economy as a whole, whatever the mathematics above or below the line. Its aim, in short, must be to maintain employment, as indeed we have done, to encourage production, which we have done, while avoiding inflation, which we have done, and ensuring a healthy balance of payments, which we have succeeded in doing. The realities of our situation may therefore call either for a surplus or a deficit on the conventional Budget.
    But these general considerations provide no excuse for not adopting a strict and sober attitude towards Government expenditure. The claims of the Government on the national resources leave us far too little freedom of movement for economic health. In the past year we have secured substantial administrative economies, particularly as a result of staff reductions made possible by decontrol. We shall continue to make these economies wherever we can. But they do not, in themselves, suffice to offset the increases hi expenditure which are dictated by considerations of policy. This is strikingly true of the three major heads of expenditure—defence, food and agriculture and the social services.

    DEFENCE EXPENDITURE
    Defence expenditure, before crediting United States aid, is estimated at £1,640 million, or roughly the same as the corresponding figure in the original Estimates for last year. But the budgetary support from American aid is expected, this year, to be only £85 million, as compared with £140 million for which last year's Budget could take credit. The net cost of defence to the Budget this year will, therefore, be £1,555 million, as compared with £1,497 million 12 months ago —the increase of £58 million which I have already mentioned. Moreover, our defence commitments impose a considerable strain on our balance of payments. The overseas element in defence expenditure is probably at least £350 millions a year.
    The general policy governing our Defence expenditure this year has already been explained in the White Paper "Statement on Defence, 1954." I shall not go into it in detail again but, as that White Paper said,
    "It will be the Government's aim to take advantage of all new developments which appear likely to increase fighting strength and to promote economy of effort."
    We must be up to date; but we must have economy too. During the coming year we must see to it that we obtain some definite relief from the Defence burden.

    FOOD AND AGRICULTURE
    Now for the outlook in food and agriculture. On food there is expenditure of £229 million and, as I have already indicated, revenue which amounts to £110

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    million. This year consumer subsidies will apply to milk and bread only, at a cost of about £87 million. This is, as the Committee will have noted, very broadly the expense to the Exchequer resulting from the fixing of consumer prices insufficient to cover costs. The reduction of the scope of the consumer subsidies has, of course, widened the area over which assistance to our agricultural policy is given in the form of direct undertakings to producers.
    Agricultural guarantees in this year's Estimate amount to just over £150 million. The total provision which corresponds to what we have hitherto called food subsidies—that is, it includes the welfare subsidies and such of the production grants as have hitherto been included in the total of food subsidies—is £325 million. We intend to carry out our undertakings to the farming community to maintain a system of guaranteed prices settled at the Annual Review.
    Last year's experience has given both the farmers and the Government a good deal to think about—notably the fall in market prices abroad and at home, the return of plenty, and the curious effect of abnormally warm weather at seasons when the wit of men had fixed a price to suit a cold climate. In fact, the hens simply would not graduate in any of our schools of political economy. The Government and the farmers have therefore been conferring together on a variety of schemes designed to reconcile two needs —the need to secure a greater measure of financial control and the need to preserve the broad stability of the farming industry. The introduction of Deficiency Payments Schemes is an improvement, but our arrangements will have to vary from commodity to commodity.
    We may, for example, quantify or limit the extent of Exchequer help to a particular commodity. Thus the guaranteed price may be related, in the words of the recent Annual Review White Paper,
    "to levels of output of particular commodities, as in the case of the new financial arrangement for milk ";
    or there may be an arrangement for sharing some part of the effect of changes in market prices. But I am sure that in one way or another we must establish, in consultation with the farmers' representatives, some limit to the open-ended Exchequer liability. Of this we shall hear more during the year.

    SOCIAL SERVICES
    The next large group is that if the social services. The provision here amounts to no less than £1,327 million— an increase of £63 million over the corresponding provision in the original Estimates for last year. It takes the whole of the taxes from tobacco, beer, spirits and Purchase Tax to cover this total.
    Of this increase of £63 million, the Education Departments, which rise from £259 million to £279 million, account for £20 million. This is largely due to the increase in the school population and in teachers' salaries. Housing subsidies account for £10 million, increasing from £70 million to £80 million. This illustrates the cost to the Exchequer of the success of the Government's housing policy. The National Health Service has gone up by £19 million, from £411 million to £430 million. National Assistance accounts for another £5 million by a rise from £128 million to £133 million; and Exchequer contributions to local revenues for a further £9 million, with an increase from £68 million to £77 million.
    I think even hon. and right hon. Members opposite will agree with what I am about to say now. It is quite clear that progress in social reform, far from being neglected by this Government, has been well maintained. It is equally clear that this progress carries heavy obligations with it and that there is no miraculous and painless escape from these obligations. We cannot, in good conscience, put the clock back; but we must make sure that in the administration of this vast outlay humanity goes hand in hand with economy.
    I am not unmindful of the many other claims on the Exchequer, which the Government would wish, in equity, to satisfy. Some of these—for instance, the problems of the old people—are very much in the minds of every Member of this Committee, not least myself. But I have described the already heavy and growing burdens on the Exchequer and I must say this to the Committee: that I cannot bring my conscience to sanction further advances in social reform, involving increases in public expenditure, until we have the growth of our existing commitments well in hand. Only then can we

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    make further progress in meeting some of the claims which are pressing upon us.
    My right hon. Friend the Minister of National Insurance, and indeed the whole Government and all Members of this Committee, have continually in mind the needs of the old people. But no one who reflects for a moment on the immense burden which the working population, and particularly the younger generation, will have to carry in the interests of elderly retired people, could think it right to reach a decision about the future welfare of the old without the fullest consideration of the effect on the cost which future generations will have to meet. This is the year in which a review of the National Insurance Fund is taking place —the first comprehensive review under the new legislation. Moreover, the Phillips Committee is investigating the problems of an ageing population. It will be useful to have the results of those reviews. But our urgent task, in the interests of the old, is to ensure that the outlook for public expenditure as a whole is less menacing than it is at present.
    Another reform which is also very much in our minds is that of equal pay for equal work. In fact I was serenaded here this afternoon with the familiar tune of "Equal Pay." There has been a development. Leading staff organisations in the public services have now circulated a statement to right hon. and hon. Members in which they ask me to authorise "talks which will result in agreed steps for introducing equal pay." I certainly think that a gradual solution of this problem will prove to be the right one; and so far as the Civil Service is concerned— for which alone I can speak as an employer—I should like shortly to meet the National Staff Side representatives myself and discuss with them the manner in which we are most likely to make progress and the basis upon which further Whitley talks should rest. But here, too, of course, I cannot ignore the prospects for the Exchequer as I have described them.
    I have said enough to illustrate the magnitude of the burdens which will fall upon the Exchequer in the current financial year and in the years ahead. It is an essential part of my Budget statement this year that I should make this warning clear. If—but only if—we control expen-
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    diture, and increase the national product at a faster rate than the growth of our commitments, can we afford the benefits which that expenditure confers on us.

    EXTERNAL PROSPECTS
    Our first task, then, is to control our expenditure at home. But I come now to the other purpose which I mentioned and which I now examine. The aims of the Budget must take account also of our liabilities overseas. The internal expansion which the Budget fosters must be one which reinforces our external balance of payments as well.
    There is no need for me today to dwell at length on the vital need to maintain confidence in sterling, of increasing our gold and dollar reserves without accumulating corresponding short-term debts, and of winning a surplus which will enable us to make a worthy contribution to overseas development. I was most deeply impressed, during my recent visit to Australia, by the extent to which the members of the Commonwealth look to us for a lead in developing their and our vast resources. This is the true and up-to-date conception of Commonwealth unity in the economic sphere. These purposes compel us to do all we can both to increase our earnings, particularly from exports, and to enlarge the volume of world trade and the freedom of currencies, especially sterling.
    I said just now that we had to increase the national product. There is one particular aspect of our policy which I must mention today, namely, finance for exports. There have been complaints from time to time that British manufacturers are being unduly handicapped in many cases by having to finance, either from their own resources or from such credit as they can raise, any credit which they themselves have to give in order to secure export orders for capital goods.
    We have decided, therefore, that henceforward, the Export Credits Guarantee Department will make rather freer use of guarantees to the banks for major capital goods exports—for those goods which are one of the most valuable types of our traditional exports and which I found on my tour are of particular importance for overseas development. To the extent to which such a guarantee is given the City will find the finance, from the stage of accept-

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    ance of the goods, without recourse to the manufacturer himself. For the time being a limit of up to 85 per cent, of the credit given to the overseas buyer, instead of the 90 per cent, usually available under an ordinary Export Credits Guarantee Department policy, will be set in those cases where this procedure is used. We shall review this in the light of developments, and meanwhile I hope the arrangement will help our exporters at an important point.
    But any initiative of this kind which the Government can take can only support and reinforce the efforts which industry itself must make to increase output and to capture foreign markets. And here industry must combine enterprise with restraint. It must be enterprising in the vigour and imagination with which it meets the challenge of sharpening competition; it must be restrained in the extent to which it loads the final price by its demands for wages and profits. We are near the point—and in some cases we may have passed it—where further increases in wages and profit margins will price us out of our export markets. All-round increases in wages have clearly played a large part in the upward movement of prices since 1945. Both stability at home and competitive power abroad require that wage increases should not outrun productivity; any improvement in productivity should show itself also in the form of lower prices.
    But, for the reasons which I have often given, industry must also beware of excessive distribution of profits. In all these questions we do better to rely on voluntary moderation than on any form of compulsory limitation. But at no level of the industrial process can we afford either denial of personal effort or indulgence of personal motives, if, in the sharply competitive world which we now face, our exports are to maintain and to expand their share of world trade.

    U.S. EXTERNAL ECONOMIC POLICY
    Our task will be all the easier if world trade itself expands. Since the meeting of Prime Ministers on economic policy at the end of 1952, the Commonwealth as a whole has been working steadily to enlarge the volume of international trade and commerce. We have sought to do this in company both with the U.S.A. and with Europe.
    My right hon. Friend the Foreign Secretary and I explained our policies both in Washington and in Paris early in 1953. We now have good reason to be glad that we took this initiative, because since then, we can look back on steady progress and on a general move towards more liberal trade and financial policies in the major trading countries of the world. Moreover, the Committee will, no doubt, have read the Randall Commission Report in the United States and the Message which President Eisenhower has recently sent to Congress.
    It is not for me to prejudge or predict the action which the Congress may see fit to take. But I am encouraged, and I think that the Committee will be encouraged by the spirit of the President's message, and by his clear recognition that the United States has a vital interest in working towards the removal of restrictions on trade and towards the convertibility of currencies. This declaration of the Administration's attitude towards its long-term external economic policy is particularly heartening at a time when the current state of the United States economy is one of temporary decline— a decline on which the Committee will expect me to comment for a moment if we are to have a clear idea of what weather we are moving into this year.
    So far production in the U.S.A. has fallen about as far as it did during the recession of 19487ndash;49; and we do not know whether it will fall further before it recovers. The sterling area could be affected in two ways. It might suffer some direct loss of dollar income; or, if a fall in activity in the United States were to lead to a reduction in commodity prices, a decline in prices and in comes might result in a general fall in trade and activity.
    At Sydney, in January, the Commonwealth Finance Ministers were unanimous that we should try to ride the inevitable fluctuations of world trade without a return to restrictions on trade and payments. We also agreed that if all played their part in endeavouring to maintain a high level of trade, activity and employment—and it seemed reasonable to assume that they would—a moderate decline of activity in the United States could be prevented from having serious

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    repercussions elsewhere. The implications of the present decline in United States activity for the rest of the world must, however, be closely watched. A Chancellor of the Exchequer is liable to have held against him any views which he may voice, however carefully he may qualify them. But I think it my duty to the Committee to give my impressions on this subject.
    My own opinion, then, is that business confidence, both in the United States and elsewhere, has been remarkably robust, and that the decline which has taken place has been so orderly and gradual as to support the view that the recession is predominantly due to stock—or as the Americans call them, "inventory "— adjustments. A decline so caused should be self-correcting if there are no secondary effects, of which as yet there is little sign. If, however, secondary effects should begin to show themselves, then I believe that the United States Government would take steps to check any serious decline, just as I would expect any Government in this country, faced with similar internal developments, to take such steps. In short, while I believe that we should be prepared for any changes, I think that neither the facts up to now, nor the balance of probabilities, should lead us to expect the worst.
    The world-wide damage caused by some previous recessions has been due mainly to the cumulative effects which a contraction of economic activity in any one sector exerts, with multiplying force, as its centre of infection spreads. But the effects of the current decline on the rest of the world have so far been much less severe than previous experience would have led us to expect. There are two reasons for this. The effects have undoubtedly been softened by the continued flow of U.S. military and other expenditure, and by the remarkable stability of commodity prices generally. But a good share of the credit is due to the policies adopted by the Sterling Area as a whole, following our various Finance Ministers' meetings, to check inflation and to promote sound development. In the event, progress in the sterling area has so far been slowed down rather than halted or reversed. Exports to the dollar area have shown some reduction; but our
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    central reserves, along with those of many other countries, are still rising.
    The Committee will no doubt have been heartened, as I was, by the increase in the gold and dollar reserves in March, the largest increase that we have had for a year. But this does not justify our discounting the various forces which, as I have explained to the Committee, may develop to the damage of our external account. It may be only in the second half of the calendar year that their effect will be felt; and it is then, in any event, that we normally have to face seasonal pressure against the balance of payments, of both the United Kingdom and the whole sterling area, with the rest of the world. Our best insurance against any such risk is to be prepared to take action, if necessary, both internationally and at home. Overseas, we must act, together with our friends and the great organs of international economic co-operation, to maintain our mutual credit and trade. At home we accept the responsibilities, defined in the White Paper of 1944, to keep up employment and, with due regard to the needs of our balance of payments, to use our resources to the full. Nor should I hesitate to reconsider my budgetary policies if I thought that this was required. We should therefore view the future with resolution rather than despondency.

    BUDGET OBJECTIVES
    I must now make my judgment of the prospects for 1954 as a whole. Although what happens in other countries may affect us vitally, it is the level of our internal demand which exerts the major influence on the course of production in this country. Speaking now in the broadest terms, it is my view that the general level of demand should be well maintained.

    HOME PROSPECTS
    Let us look at the main elements of demand at home. In real terms, Government expenditure on goods and services in 1954 will be rather higher than in 1953. The volume of consumers' expenditure also is likely to be higher in 1954 than during 1953 as a whole. As for fixed investment, work on new housing is expected to be about the same as in 1953, while the investment of the nationalised industries, both in buildings and in plant, should show some rise. These increases

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    in demand will give considerable support to the course of production this year. Exports will depend, in part, on the level of world trade: and I hope that over the year as a whole they will be maintained.
    If so, the most uncertain element in demand is investment in stocks. The level of stocks at present does not appear to be excessive in relation to the level of activity. If, as I hope, there is reasonable stability in other sectors, we can hope for stability here also. Thus, while conditions at the end of 1954 are necessarily uncertain, there are good prospects that, over the year as a whole, production should be higher than in 1953.

    MONETARY POLICY
    Now for a word on monetary policy. In considering the measures which we need to take, I have made my dispositions this year, as I made them last year, in the knowledge that my Budget will have the support of monetary policy. A year ago I said that conditions in 1953 were likely to require broadly a continuation of the monetary measures then in operation.
    That, in the main, is how it turned out. Interest rates generally fell during the year. But few have made the mistake of interpreting those movements as a change of direction in monetary policy; they have been generally and correctly viewed as evidence of the continuous adjustment that must go on if the monetary mechanism is to be kept in effective operation. I shall not offer any predictions on the role that monetary measures are likely to play in the coming year. Bank rates and the rates that depend on it will be kept flexible and free for use in either direction as circumstances may require.

    FINAL APPRECIATION
    My judgment is, therefore, that we shall continue to maintain a very reasonable balance in the economy. But I think also that we should not commit ourselves too far in advance. The economy should be well able to respond to any increases in demand, in particular of overseas demand, which may occur. Thus, there is no cause for making this Budget especially tough or more disinflationary. We need not impose harsh new taxes, since an increase in the level of taxation on initiative and enterprise would hold down and impede, rather than stimulate
    218
    and spur on, our drive for productivity and exports.
    On the other hand, as my analysis has shown, production is likely to be higher this year than last, and I judge that it would be unwise at present to stimulate purchasing power by remissions of taxation designed to increase personal consumption. Although each of us may have personal reasons for regretting this conclusion, a sober appreciation of our economy must conclude that it would be premature to adopt policies which might prejudice our future liberty of action. This is the more true while we are necessarily uncertain about developments in the United States of America and about our own ability to take the full measure of our competitors in external trade.
    Moreover, the man in the street knows well that the real value of a Budget lies in its contribution to those things which are really important to him—full employment, stable prices, a steady growth of production. By all these tests, last year's Budget was successful. It must be the task of this Budget of 1954 to carry on this good work, and as far as I can tell, at this moment in time neither tax increases nor major tax remissions are possible or called for.
    While, this year, we should avoid a deficit on our final out-turn, we need not strain after any significant surplus. My judgment, therefore, is that this Budgetary policy will secure a continuance of the achievement which characterised the last financial year—a healthy balance in the economy as a whole. I shall make no changes for change's sake. So for the second year in succession I shall raise no new taxes. Such remissions or adjustments as I am now going to describe are necessarily concentrated on granting certain special claims to relief and on increasing the incentive to productive investment.

    POST-WAR CREDITS
    Like every Member of the Committee, I receive constant appeals for a more generous release of post-war credits. Behind many of these letters lie circumstances of personal distress which the payment of the credits, however modest they may be, would do a little to relieve. And even the Chancellor of the Exchequer must be moved by some of the individual cases which come to his notice.
    And so I have searched my conscience yet again in this matter; in particular, I have considered once more whether payment of the credits might not be made in cases of hardship. But I have found no means by which genuine and continuing "hardship" could be defined for this purpose, at least without creating as many anomalies as it would remove. The question which really faces me, therefore, is whether some general release of the credits is now possible and advisable, over and above the existing arrangement whereby the credits are paid at the age of 65 for a man and 60 for a woman.
    Let me remind the Committee of the circumstances in which post-war credits were originally introduced in 1941. During the debates on that year's Budget Resolutions, my predecessor, the late Sir Kingsley Wood, said in connection with the credits—and I quote his words:
    '…one of our principal post-war problems will be to regulate the rate of expenditure under all heads, with a view to maintaining good employment over a prolonged period, without overdoing it, in the sense of facilitating more expenditure than we have physical resources to provide, and thus producing postwar inflation."—[OFFICIAL REPORT, 9th April. 1941; Vol. 370, c. 1662–3.]
    The amount of post-war credits outstanding at this moment is about £564 million, very widely distributed among all sections of the people.
    In an economy of the kind which I have just described to the Committee— an economy on a pretty even keel, with no immediate prospect of any lack of consumer demand and no immediate need for any large stimulation of individual purchasing power—can I, or can any responsible Member of this Committee, honestly take the view that the time is ripe for the release of the credits on anything approaching this scale? The answer is, I fear, "No, not yet." It is therefore my duty to consider what is practical and realistic.
    But although it is not possible for me to propose, as yet, any general release of the credits, even for particular groups of people, there is one type of case with which I can deal—the more gladly since it is a case in which the present law is often represented as producing injustice and anomaly. I wish to remove a deeply felt grievance that a family is often, under the present law, deprived by death of a reasonable expectation of having the
    220
    benefit of the credits in a short time. This point has been put by the hon. Member for Sparkbrook (Mr. Shurmer) and many other hon. Members in the course of our debates.
    At present if an individual dies under the age of 65, or 60 if a woman, the credits can be paid to a beneficiary under his will or intestacy only when the beneficiary becomes 65 or 60, as the case may be. I now propose to give the beneficiary also the right to claim payment of the deceased person's credits when the deceased person would have reached the required age had he or she lived. My proposal will, in addition, allow payment where a man has died over the age of 65 without actually claiming his credits.
    It will not, of course, be possible to make payments under my proposal until after the Finance Bill becomes law; details of the arrangements will be announced as soon as they have been worked out. There will, at the start, be a large number of people who will become entitled to claim at the same time, and dealing with all these claims may have to be spread over a period. The claims will be paid in cash; but I ask all who get this money not to spend it unless their need is really urgent, but to put it into National Savings if they can. This proposal will add £19 million in the first year, and £2 million a year thereafter, to the payments of about £17 million a year which are already being made, below the line, under existing arrangements.
    I will deal next with the few adjustments I propose to make in the field of indirect taxation.

    ENTERTAINMENTS DUTY
    I am aware of the need for some modification of the Entertainments Duty. Most of the revenue from this duty comes from the cinemas, which account for some £37 million out of a total, of £44 million a year. The maintenance of this revenue depends on the ability of the cinemas to provide the public with the standard of comfort and service which they have come to expect; this is the more important now that they have to compete with television.
    Remembering the undertaking which I gave during the debates on the 1953 Finance Bill, I have examined very carefully the statistics showing trends in admissions and takings over the past few

    221
    years; and I have been impressed by the difficulties which many cinemas have recently been experiencing as a result of increasing costs which are not matched by increasing receipts. Right hon. and hon. Members on both sides of the House have drawn my attention to cases of this kind in their constituencies.
    I have accordingly decided to make some reduction in the Entertainments Duty on admissions to cinemas. The cinema exhibitors have represented to me that, in order to maintain their cinemas in good order and to keep pace with technical developments, they need to be relieved of duty to the extent of £7 million a year. I do not think it necessary to go as far as this, and in any case, I could not afford to do so.
    The changes which I propose to make will cost the Exchequer about £3½ million in a full year. They will mean reductions in duty ranging from ½d. to 1½ per admission and will result in some improvement in the form of the scale. Full details of the new scale will be given in the White Paper.
    There is no reason why cinema proprietors should not use this relief to reduce admission prices, where they can afford to do so. But I recognise that the industry in general will need the money, both to enable exhibitors to maintain the amenities of their cinemas and the attractions of their programmes, and to assist the revenues of producers. It is on these things that the prosperity of both the producing and exhibiting sides of the industry, and of the men and women employed in it, depend.
    I have also been keeping a careful watch on other entertainments, particularly sports, as I undertook to do in the debates on the Finance Bill last year. I find that there has been some further deterioration, and I have decided that a measure of relief is called for. These other entertainments, mainly sports and the living theatre, already pay/lower rates of duty than cinemas; but I consider that relief to the extent of ½d. per admission is justified in present circumstances.
    I am therefore reducing both the first and second scales of Entertainments Duty at a cost of £450,000 in a full year. This should help to put the finances of the football clubs, particularly the smaller ones, on a sounder footing. The total
    222
    cost of those changes will therefore amount to about £4 million in a full year. They will operate from 30th May and the cost in the present financial year will be £3½million.

    CHICORY
    I am also raising the Customs duty on imported chicory by 5s. 9d. a cwt. Full details of the change are given in the White Paper. This increase in duty is not concerned with revenue considerations. It is to give support and protection to the chicory growers in this country which have been shown to be necessary. The new rate will operate from 7th April.
    PURCHASE TAX
    On this occasion, as I said some time ago, I do not propose making any changes in the rates of Purchase Tax. I gave due notice of this, and I do not regret the action which I took. But one of the Resolutions to be laid before the Committee this afternoon will enable certain defects in the legal machinery of the tax to be remedied.
    KEY INDUSTRY DUTY
    I also propose to continue for five years the Key. Industry Duty which would otherwise have come to an end next August.
    COMPANY RECONSTRUCTIONS
    In the field of Inland Revenue there are some details to which I wish to refer. I propose, first, to counter a device whereby company reconstruction has been used to obtain taxation advantages. The essence of the proposal is that, as from today, the provisions of the Income Tax Acts relating to the cessation of one trade and the setting up and commencement of another shall not apply in cases "where three-quarters or more of the interest in the trade belonged to the same persons before and after the change.

    ESTATE DUTY
    I undertook last year to review anomalies in the Estate Duty, particularly anomalies arising in connection with what is known as the "assets basis" of valuation for controlling interests in private companies. Proposals for dealing with a number of these will appear in the Finance Bill. The Bill will also make provision for cases where part of a controlling shareholding, which has been

    223
    valued on the assets basis, is sold to an independent purchaser; my proposal here, in broad terms, is that the Estate Duty valuation of the shares actually sold shall be brought into line with the sale price. The general principle of the assets basis, however, must, in my view, be maintained.
    Nevertheless, I think that business assets are a type of property on which the Estate Duty can bear with special severity, particularly in the case of family businesses, whose traditional activities mean so much for the stability of our social and industrial life. Accordingly, where industrial premises or plant and machinery are used for the purposes of a trade carried on by the deceased—or, where the assets basis applies, by the deceased's company —the Estate Duty on these assets will be reduced by 45 per cent. This is the rate of relief which is already given in respect of agricultural land. This is a reform which hon. Members have often pressed on me in Finance Bill debates. I estimate the cost of the relief at £½million this year and £1½ million in a full year.
    I have also examined a considerable number of anomalies, and alleged anomalies, in other parts of the Estate Duty field, though I have not been able to cover the whole subject this year. For example, the principle of aggregation of free and settled property has come in for a good deal of criticism on the ground of the hardship which it can cause to the deceased's family in certain circumstances. There is already a provision under which, broadly speaking, the deceased's own property is not aggregated with settled property if it is under £2,000. I propose to raise this figure to £10,000. I believe that with this amendment the great bulk of the hardship cases will be eliminated. This concession will cost £125,000 this year and £250,000 in a full year.
    Lastly, I propose to deal with the doubts and anomalies which have arisen in regard to the treatment of policies of assurance which do not form part of the deceased's own estate.

    TUCKER COMMITTEES
    I propose also to implement some more of the minor reliefs recommended by the first Tucker Committee. The second Committee which was set up under Mr. Millard Tucker's chairman-
    224
    ship to deal with the taxation treatment of provisions for retirement has also now reported. I should like to thank Mr. Tucker and his colleagues for the difficult and valuable work which they have done on this complicated branch of the tax code.
    There has not been sufficient time since the publication of the Report for me to reach any conclusions on the complex issues involved. In any event, the cost of the proposals would make it impossible for me to implement them in present circumstances. I shall not, therefore, propose this year any change in this part of the Income Tax system.

    INVESTMENT ALLOWANCES
    I now wish to end, as I began, with our primary need: that is, to improve our competitive power. In my survey of last year I have already commented on the inadequate level of investment by private industry. Our rate of industrial modernisation is strikingly less than that of America, and it seems probable that the Germans are now moving ahead of us. We shall not long continue to compete successfully in the export field with these, our principal rivals, unless our plant and equipment is completely up-to-date.
    In accordance with my pledge last year, I have reviewed the whole question of company taxation. I have tried to devise some fresh encouragement to industry to put money into productive investment. This is the more essential since the physical and financial resources at our disposal are now sufficient to allow a substantially higher rate of investment than we are undertaking. Last year I restored the initial allowances to 20 per cent. This was a step in the right direction, but a limited one, since its effect is essentially that of an interest-free loan. As the cash resources of companies increase, this incentive becomes of less importance.
    After considerable reflection, therefore, I have decided to take a further step, and to replace, subject to a few exceptions, the present initial allowances by a new system, which I call investment allowances. At present, the cost of investment in plant, machinery, industrial building or mining works may be offset against gross profits during the life of the asset by means of depreciation allowances. The initial allowance merely anticipates a part

    225
    of the annual allowances, so that tax liability is less in the year in which investment takes place, but may be larger later on.
    The new investment allowance will do more. It will give a tax-free allowance equal to a part of the cost of investment in the assets which I shall describe as qualifying for it. It will be given in addition to the full annual depreciation allowances. Thus, the initial allowances gave some extra help in the year in which the investment was undertaken, but at a cost of smaller allowances for that investment in later years. In contrast, the new investment allowance gives similar help in the first year, but with no reduction in subsequent allowances.
    In general, the field over which the new investment allowance will operate will be the same as that of the initial allowance, which applies to plant and machinery generally and to new industrial buildings and mining works. But in view of the purpose of the new allowance, which is to encourage fresh investment, and of its nature, which is to give a tax-free allowance over and above the cost of the qualifying assets, there must be both additions to, and deletions from, the initial allowance list.
    I propose that agricultural buildings and also plant and buildings used for scientific research, neither of which attracts initial allowances, shall rank for the new investment allowance. Investment in up-to-date buildings can assist farm production no less than industrial production, and the importance of scientific research to our economy can hardly be over-estimated. The new allowance should also help the shipping industry to carry out the big replacements which are necessary in the years ahead, and thus to maintain its vital contribution to our economy.
    On the other hand, I do not think that this tax-free benefit should be available either for secondhand plant or machinery which does not represent new investment, or for ordinary motor cars which can and often do serve both business and private purposes. These assets will, however, continue to rank for the existing initial allowance at 20 per cent.
    I propose that the new investment allowances shall apply, in the case of qualifying assets, to capital expenditure
    226
    which is incurred—that is, which becomes due and payable—after today. In respect of expenditure on such assets, the initial allowance will in general cease from today. The rates of investment allowance will be 20 per cent, for expenditure on new plant and machinery and new mining works and new scientific and research work, and 10 per cent, for new industrial and agricultural buildings.
    For plant, machinery and industrial buildings, these are the same as the existing rates of initial allowance, but they will be more favourable in the long run. The 20 per cent, investment allowance for mining works is not immediately so favourable as the existing initial allowance of 40 per cent. But since it will be given over and above allowances up to the cost of the works, it will practically always be better in the long run. However, I will allow any mining undertaking to choose between the new investment allowance and initial allowances at the 40 per cent. rate. There will have to be provisions safeguarding the new allowance from abuse. But these and other details must wait for the Finance Bill.
    The cost of changing from initial allowances to investment allowances will be negligible in 1954–55, and about £4 million in 1955–56. Thereafter, the cost will increase year by year, and although the actual amount will, of course, depend on the level of new investment, I expect it to reach a considerable figure in the future. But in so far as this new allowance succeeds in its object of creating additional assets, those assets will, of course, be yielding additional revenue for the country, for their owners and for me.

    CONCLUSION
    Let me now make the final review of our national accounts. The Committee will already have realised that my proposals, which yield a surplus of £10 million, will still leave the Budget as it should be this year, broadly in balance. The estimate below the line will, it is true, have to take account of the concession on post-war credits.
    But, in general, the changes which I have proposed have been much fewer and less spectacular than last year—deliberately so, for the reasons which I have already given. Just as, in 1952, I introduced an emergency Budget, and last year, an incentive Budget, so, this year,

    227
    I am proposing a carry-on Budget, a Budget conceived as reaffirming our basic policies, rather than as marking any major change of emphasis or direction. That I can, with good conscience, do so is a tribute to the achievement of the measures which I introduced last year. They have brought us a good way along our road; they should be given the chance to carry us still further. Moreover, it would have been the easier and —I say this quite openly to the Committee—perhaps the more agreeable course to make sweeping reductions in taxation. But substantial tax remissions, would, in fact, have been premature, and unjustified in our present circumstances.
    It is the duty of the Chancellor of the Exchequer, at such a time as this resolutely to reject temptations of this kind, and not to concede, to either the hopes or the fears of the future, what a dispassionate judgment of our economic prospects does not immediately require. But, although the scope for change was less this year than previously, I have tried to distribute what I can fairly, to ease some anomalies which have been felt to be unjust and undignified, and to enlarge, in a slightly novel way, the incentives to which industry responds. And I repeat that if, later in the year, circumstances should so demand, we shall not hesitate to take more radical measures at a later date.
    It must, then, be a vigilant, poised and confident Britain which turns to face the new financial year—with an economy resilient to absorb whatever shocks and setbacks the fluctuations of world trade may inflict on us, but also alert to reach out for each and every opportunity for expansion and enterprise which circumstances may offer, and our own initiative may devise. So resolved, we have nothing to fear, and much to hope.

    CUSTOMS AND EXCISE
    1. Entertainments (Excise)
    Motion made,
    That as respects payments for admission to entertainments held on or after the thirtieth day of May, nineteen hundred and fifty-four, the three scales of entertainments duty provided for by section two of the Finance Act, 1952, shall be those set out in the Tables at the end of this Resolution.
    And it is hereby declared that it is expedient in the public interest that this Resolution
    228
    should have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.

    TABLES

    FIRST SCALE

    Amount of payment

    Rate of duty

    Where the amount of the payment, excluding the amount of duty— exceeds 1s. 0d. and does not exceed 1s. 5½d

    ½d.

    exceeds 1s. 5½d.

    ½d. for the first 1s. 5½d. and 1d. for every 5d. or part of 5d. over 1s. 5½d.

    SECOND SCALE

    Amount of payment

    Rate of duty

    Where the amount of the payment, excluding the amount of duty— exceeds 1s. 0d. and does not exceed 1s. 2d

    1d.

    exceeds 1s. 2d.

    1d. for the first 1s. 2d. and ½d. for every 1d. or part of 1d. over 1s. 2d.

    CUSTOMS AND EXCISE

      THIRD SCALE
      1. Where the amount of the payment, excluding the amount of duty, is an amount mentioned in the following Table, the rate of duty shall be the amount therein specified in relation to that payment.

      Table

      Amount of payment, excluding amount of duty

      Rate of duty

      Amount of payment, excluding amount of duty

      Rate of duty

      s.

      d.

      s.

      d.

      s.

      d.

      s.

      d.

      9½

      ½

      1

      10¼

      1

      1¾

      10

      1

      1

      10¾

      1

      2¼

      10½

      1½

      1

      11½

      1

      2½

      11

      2

      1

      11¾

      1

      3¼

      11¼

      2¾

      2

      0¼

      1

      3¾

      11½

      3½

      2

      0½

      1

      4½

      1

      0

      4

      2

      1

      1

      5

      1

      0½

      4¾

      2

      1½

      1

      5½

      1

      0½

      5½

      2

      1¾

      1

      6¼

      1

      1

      6

      2

      2¼

      1

      6¾

      1

      1¼

      6¾

      2

      2½

      1

      7½

      1

      1½

      7½

      2

      3

      1

      8

      1

      2¼

      7¾

      2

      3¾

      1

      8¼

      1

      2½

      8½

      2

      4½

      1

      8½

      1

      2¾

      9¼

      2

      5

      1

      9

      1

      3¼

      9¾

      2

      5½

      1

      9½

      1

      4

      10

      2

      6

      1

      10

      1

      4¾

      10¼

      2

      6½

      1

      10½

      1

      5½

      10½

      2

      6¾

      1

      11¼

      1

      6

      11

      2

      7¼

      1

      11¾

      1

      6½

      11½

      2

      7¾

      2

      0¼

      1

      7¼

      11¾

      2

      8¼

      2

      0¾

      1

      8

      1

      0

      2

      8½

      2

      1½

      1

      8¾

      1

      0¼

      2

      9

      2

      2

      1

      9¼

      1

      0¾

      2

      9½

      2

      2½

      1

      9¾

      1

      0¼

      2

      10

      2

      3

      Amount of payment, excluding amount of duty

      Rate of duty

      Amount of payment, excluding amount of duty

      Rate of duty

      s.

      d.

      s.

      d.

      s.

      d.

      s.

      d.

      2

      10½

      2

      3½

      4

      10

      4

      1

      2

      11

      2

      4

      4

      10½

      4

      1½

      2

      11½

      2

      4½

      4

      11

      4

      2

      3

      0

      2

      5

      4

      11½

      4

      2½

      3

      0½

      2

      5½

      5

      0

      4

      3

      3

      1

      2

      6

      5

      0½

      4

      3½

      3

      1½

      2

      6½

      5

      1

      4

      4

      3

      2

      2

      7

      5

      1½

      4

      4½

      3

      2½

      2

      7½

      5

      2½

      4

      4¾

      3

      3

      2

      8

      5

      2¾

      4

      5¼

      3

      3¾

      2

      8¼

      5

      3¼

      4

      5¾

      3

      4½

      2

      8½

      5

      4

      4

      6

      3

      5¼

      2

      8¾

      5

      4½

      4

      6½

      3

      6

      2

      9

      5

      5

      4

      7

      3

      6¾

      2

      9¼

      5

      5¾

      4

      7¼

      3

      7½

      2

      9½

      5

      6¼

      4

      7¾

      3

      8

      2

      10

      5

      6¾

      4

      8¼

      3

      8½

      2

      10½

      5

      7½

      4

      8½

      3

      9

      2

      11

      5

      8

      4

      9

      3

      9¼

      2

      11¾

      5

      8½

      4

      9½

      3

      9¾

      3

      0¼

      5

      9

      4

      10

      3

      10¼

      3

      0¾

      5

      9½

      4

      10½

      3

      10½

      3

      1½

      5

      10

      4

      11

      3

      11

      3

      2

      5

      10½

      4

      11½

      3

      11½

      3

      2½

      5

      11

      5

      0

      4

      0

      3

      3

      5

      11½

      5

      0½

      4

      0½

      3

      3½

      6

      0

      5

      1

      4

      1

      3

      4

      6

      0½

      5

      1½

      4

      1½

      3

      4½

      6

      1

      5

      2

      4

      2¼

      3

      4¾

      6

      1½

      5

      2½

      4

      2¾

      3

      5¼

      6

      2¼

      5

      2¾

      4

      3½

      3

      5½

      6

      3

      5

      3

      4

      4

      3

      6

      6

      3¾

      5

      3¼

      4

      4½

      3

      6½

      6

      4½

      5

      3½

      4

      5

      3

      7

      6

      5¼

      5

      3¾

      4

      5½

      3

      7½

      6

      6

      5

      4

      4

      6

      3

      8

      6

      6¾

      5

      4¼

      4

      6½

      3

      8¾

      6

      7½

      5

      4½

      4

      6¾

      3

      9¼

      6

      8

      5

      5

      4

      7¼

      3

      9¾

      6

      8¼

      5

      5¾

      4

      7½

      3

      10½

      6

      8½

      5

      6½

      4

      8

      3

      11

      6

      9

      5

      7

      4

      8½

      3

      11½

      6

      9¼

      5

      7¾

      4

      9

      4

      0

      6

      9½

      5

      8½

      4

      9½

      4

      0½

      Where the amount of the payment, excluding the amount of duty, is an amount not specified in the foregoing Table, and exceeds ninepence but does not exceed six shillings and ninepence-halfpenny, the rate of duty shall be the same as on a payment of the next higher amount specified in the Table.
      3. Where the amount of the payment, excluding the amount of duty, exceeds six shillings and ninepence-halfpenny, the rate of duty shall be five shillings and eightpence-halfpenny, increased by a halfpenny for every halfpenny or part of a halfpenny by which the amount of the payment exceeds six shillings and ninepence-halfpenny.—[Mr. Butler.]
      The CHAIRMAN put the Question thereupon forthwith, pursuant to Standing
      230
      Order No. 86 (Ways and Means Motions and Resolutions.)
      Question agreed to.
      The CHAIRMAN then proceeded successively to put forthwith the Question on each further Motion made by a Minister of the Crown, save the last Motion.
      2. Chicory (Customs duties and drawbacks)
      Resolved,
      That, with effect from the seventh day of April, nineteen hundred and fifty-four,—
      (a) the full rates of the customs duty on chicory under section three of the Finance Act, 1924, and the preferential rates within the meaning of section eight of the Finance Act. 1919, shall be—
      for chicory, raw or kiln-dried—the cwt. 19s. 0d. (full) and 16s. 9½d. (preferential);
      for chicory, roasted or ground—the 1b. 3d. (full) and 2⅔d. (preferential);
      and mixtures of roasted coffee and roasted chicory shall be chargeable at the like rates as roasted chicory;
      (b) the rates provided by subsection (4)of section three of the Finance Act, 1924, for the drawbacks allowable on roasted chicory, and on mixtures of roasted coffee and roasted chicory, shall be—
      in the case of roasted chicory, 17s. 0d. per 100 1b. or, if duty on the chicory was paid at the preferential rate, 15s. 0d. per 100 1b.;
      in the case of mixtures of roasted coffee and roasted chicory 14s. 0d. per 100 1b.
      And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.
      3. Key industry duty (Continuation)
      Resolved,
      That the duties of customs chargeable under Part 1 of the Safeguarding of Industries Act, 1921, for a period expiring on the nineteenth day of August, nineteen hundred and fifty-four shall continue to be chargeable for a further period of five years from the said day.

    PURCHASE TAX
    4. Purchase tax (Miscellaneous amendments)
    Resolved,
    That the law relating 10 purchase tax be amended as respects—

    (a) goods held by a person who ceases to be required to be registered on or after the first day of May, nineteen hundred and fifty-four.

    (b)the operations which are to be treated as processes of manufacture,

    231

    (c)the treatment of unfinished or incomplete goods as if they were finished and complete,

    (d)the conditions on which persons may hold certificates of registration or enjoy benefits corresponding to those accorded to persons holding certificates of registration,

    (e) the registration of persons who manufacture goods to be let out on hire,

    (f) any matters incidental or supplemental to the foregoing amendments,

    and that the extent and incidence of the tax may be varied so as to give effect to such amendments.

    INCOME TAX
    5. Charge of income tax for 1954–55
    Resolved,
    That income tax for the year 1954–55 shall be charged at the standard rate of nine shillings in the pound and, in the case of an individual whose total income exceeds two thousand pounds, at such higher rates in respect of the excess over two thousand pounds as Parliament may hereafter determine.
    And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.
    6. Income tax (Initial allowances)
    Resolved,
    That any Act of the present Session relating to finance, in connection with any further provision for income tax allowances in respect of capital expenditure on new assets, may impose restrictions on the making of initial allowances under Part X of the Income Tax Act, 1952, to prevent duplication with the new allowances or otherwise, and may amend that Act to provide for cases where no initial allowance is made, whether or not in consequence of any such restriction.
    7. Income tax (Company reconstructions)
    Resolved,
    That it is expedient to authorise all such charges to income tax (including charges for past years of assessment) as may arise from any provision as to changes in the persons carrying on a trade which is being or has been carried on by a body corporate, or in the persons carrying on activities comprised in a trade which is being or has been carried on by a body corporate.
    8. Income tax (Income against which losses and capital allowances may be set)
    Resolved,
    That any Act of the present Session relating to finance, if it enables business losses, and allowances under Parts X and XI of the Income Tax Act, 1952, to be carried back against income of previous years on the cessation of a business and in other cases, or
    232
    enables such allowances to be set off against general income, may contain provision to prevent duplication of the relief whether in favour of the same or another person.
    9. Income tax (Treatment for capital allowance purposes of demolition cost)
    Resolved,
    That it is expedient to authorise all such charges to income tax as may arise from any change in the way in which demolition costs are to be treated for the purposes of Parts X and XI of the Income Tax Act, 1952.
    10. Income tax (Effect of certain sales on capital allowances, etc.)
    Resolved,
    That as respects allowances and charges under Parts X and XI of the Income Tax Act, 1952, for the year 1954–55 and subsequent years of assessment, provision shall be made for securing—

    (a) that an election may not be made under paragraph 4 of the Fourteenth Schedule to that Act (which relates to sales between companies under common control and other cases) if any of the parties to the sale is not resident in the United Kingdom at the time of sale, but except for that the Schedule shall have effect in relation to a sale notwithstanding that it is not fully applicable by reason of the non-residence of a party to the sale or otherwise;

    (b)that the operation of paragraphs 3 and4 of the Schedule shall not be restricted to cases where the property is sold at a price other than that which it would have fetched if sold in the open market.

    PROFITS TAX
    11. Profits tax (Charges consequential on income tax amendments)
    Resolved,
    That it is expedient to authorise all such charges to the profits tax (including charges for past chargeable accounting periods) as may result from amendments of the law relating to allowances, deductions or charges for income tax purposes.

    ESTATE DUTY
    12. Estate duty (Valuation of certain company shares or debentures and assets)
    Resolved,
    That the provision made by section fifty-five of the Finance Act, 1940, for valuing shares or debentures by reference to the value of the company's assets ought to be amended, notwithstanding any resulting charge to estate duty, and section fifty of the Act ought also to be amended so as to provide that in valuing a company's assets (whether for the purposes of section fifty-five or of section forty-six of the Act) an allowance may in certain circumstances be made for taxation falling on the company after the death.
    13. Estate duty (Aggregation of settled property with other property)
    Resolved,
    That it is expedient to restrict the provision made by subsection (3) of section sixteen of the Finance Act, 1894, as amended, for not aggregating settled property with other property.
    14. Estate duty (Policies of assurance)
    Resolved,
    That new provision ought to be made for charging estate duty on policies of assurance on the life of the deceased.
    15. Estate duty (business assets)
    Resolved,
    That, if any Act of the present Session relating to finance provides for charging estate duty at reduced rates in respect of particular types of business assets, it may in connection therewith contain provision as to the manner of apportioning the liabilities of the business between the assets thereof, notwithstanding any resulting increase in the charge on some of the assets.

    GENERAL
    16. Amendment of law
    Motion made and Question proposed,
    That it is expedient to amend the law with respect to the National Debt and the public revenue, and to make further provision in connection with finance, so, however, that this resolution shall not extend to giving any relief from purchase tax otherwise than by making the same provision for chargeable goods of whatever description or by reducing any of the several rates of the tax generally for all goods to which that rate applies.—[Mr. Butler.]
    5.10 p.m.
    Mr. C. R. Attlee: The Chancellor of the Exchequer has expounded his Budget with his usual lucidity and clarity, and in a very pleasant manner. I am sure that all the experts were able to follow all the figures. Personally, I want a little time to digest them, so the remarks I propose to make will be very brief.
    I do not think that this Budget can be considered to be a very exciting Budget, but I am sure that there will be plenty of clamorous demands voiced during the next few days. The right hon. Gentleman will certainly have disappointed some newspapers that have been loudly demanding 6d., as if it was the "dockers' tanner," off the Income Tax. He will, I am sure, have disappointed many who hoped for some alleviation of the lot of the old-age pensioners. I am quite sure
    234
    that he will hear of that from my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) and others.
    The right hon. Gentleman has not made any very startling changes. This has been, as he says, a carry-on Budget, but I think he will be the first to admit that if his ship is to carry on, how it carries on will depend on the weather. I rather gathered from the right hon. Gentleman, despite the tributes that he naturally paid to his own management of our finances, that, on the whole, during the last year he has experienced fairly calm weather, and I think he was right to draw attention to the fact that we may not, in this next year, be experiencing just that kind of condition.
    There is the great unknown factor of a possible big recession in the United States of America. It is, I think, very difficult for any of us to estimate what that will be like. We all hope, with the right hon. Gentleman, in the interests not only of this country but of the whole world, that that recession will not go very far.
    The right hon. Gentleman has made some concessions. They were rather small. I think we should have liked to see something rather more on post-war credits. We welcome the very small Entertainments Duty reliefs, but I think he has not done quite enough to please the sportsmen. We shall have to review these proposals very carefully in the next few days, and when my right hon. Friend the Member for Leeds, South opens the debate tomorrow he will, no doubt, deal with the wider issues of finance in which experienced financiers revel. Far be it from me that I should make any voyage into the financial field. I again thank the right hon. Gentleman, on behalf of the House, for the very clear statement that he has made.
    5.13 p.m
    Mr. Anthony Greenwood (Rossen-dale): When the Chancellor of the Exchequer read the lesson at Greenstead Green Church on Sunday the congregation prayed that if any criticism was made of the right hon. Gentleman it should be tempered with sympathy and understanding. I am sure that all of us wish to proceed in that spirit this afternoon, and I should like to echo the words of my right hon. Friend the Leader

    235
    of the Opposition and congratulate the Chancellor on the lucidity and the good humour with which he presented this carry-on Budget. Indeed, his good humour was, in the circumstances, quite remarkable.
    The right hon. Gentleman drew upon a number of nautical metaphors in the course of his speech, and I hope that the Committee will not feel that I am departing from that spirit when I say that he himself reminded me of a water creature, Lewis Carrol's crocodile, who had a very cheerful grin
    "And welcomed little fishes in With gently smiling jaws."
    I am sure that many members of the public, because this is a standstill Budget, will feel that they have had a pretty fair crack of the whip because no new impositions have been placed upon them. I hope very much that members of the public will not be taken in in that way. My right hon. Friend the Leader of the Opposition was quite right to stress the indignation which we feel on this side of the Committee that the Chancellor was unable to do something more for the old people, and not only for the old people but also for the disabled and the sick—and I would add to that class the spinsters as well.
    The right hon. Gentleman said that it is because of the situation that we are in that we cannot do more for these classes of people. It seems to me that if the Chancellor is right, he is willing that the country should travel forward to economic stability on the backs of those members of the community who are least able to bear the burden. I think it is wrong that he should neglect these legitimate claims at the present time, but I would add one word of congratulation to the Chancellor on having resisted the temptation to cut Income Tax or to take any other step which would, by contrast, have emphasised the growing hardship of the old people and the other members of the community who are on hard times at the moment.
    That this is a disappointing Budget— and I think the Press will tomorrow echo the views of the Committee that this is a disappointing Budget—arises from the fact that our progress towards economic recovery is itself disappointing. The right
    236
    hon. Gentleman was right to remind us that we must not be complacent about what has been achieved, and I am glad that the right hon. Gentleman, in the midst of a good deal of optimism this afternoon, from time to time struck a realistic note. It was a note which was struck in the Economic Survey itself, and I should like, in the interests of brevity and for the convenience of the Committee, to quote the summing up of the Economic Survey which appeared in the Board of Trade Journal for 3rd April.
    That paper, published by the Board of Trade, said:
    "… the Sterling area ended the year in a stronger position than 12 months before. But there were some less satisfactory features. The United Kingdom's balance of payment surplus was lower than in the previous year in spite of an improvement in the terms of trade which is estimated to have benefited us to the extent of £200£250 million; and although our exports recovered with the revival of overseas demand towards the end of 1953, there were no signs that we were winning back the ground lost to our overseas competitors in recent years."
    The same number of the Board of Trade Journal quoted a speech made a few days earlier by the Minister of State for Economic Affairs, whom I have referred to upstairs as my second favourite Minister, when the Minister of State was addressing the National Union of Manufacturers. In the course of that speech the Minister of State gave two main warnings to industry. He said that Japan and Germany were still not doing as big a share of the world's trade as they were before the war and that both of them were likely to intensify their efforts in that direction. He added the warning that, in a situation in which the United States' production is two-and-a-half times in volume what it was before the war, even a very slight overspill from the United States would create a serious new source of competition for this country.
    I am afraid that for those reasons, the balance of payments figures of the Chancellor this afternoon may produce an optimism which is not justified by the facts. It is true that the Chancellor did hedge himself by referring to the American situation. I should like, if it is any comfort to the Chancellor, to say that my assessment of the American situation largely coincides with his own. I believe, that any recession there is more likely to be on the 1949 scale than on the scale of the recession in 1929 and 1930.

    237
    But in addition to this very serious shadow which lies over the world economic scene, there is another complicating factor, especially for this country. That is, that there is a world tendency for the terms of trade to run against us in the industrial countries. That is inevitable in a world in which we have had a steadily rising population, going up since 1939 at the rate of 20 million a year, and in which, until 1953, we have had the world production of foodstuffs and raw materials remaining broadly what it was in 1939. Under those circumstances, in which we get greater demand for raw materials and, at the same time, increased production of manufactured goods, I do not see how, in the long run, the terms of trade can fail to run against manufacturing countries like our own.
    It would be a great tragedy if anything that the Chancellor has said today should lead members of the public to what I believe is the quite false conclusion that our balance of payments problem is anything but serious or likely to remain so for the foreseeable future. One of the rather discouraging factors for the people of Great Britain is that our success seems to be entirely disproportionate to the efforts which we make.
    If I may come back once again to Alice I would remind hon. Members of the time when she, having run very hard for a very long time, found herself where she was when she started—
    "'In our country' said Alice, still panting a little, 'you generally get to somewhere else— if you run very fast for a long time as we have been doing.'
    'A slow sort of country' said the Queen. 'Now, here, you see it takes all the running you can do to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that.'"
    That, I am sorry to say, is really the stage in our economic development which we have reached.
    At present, unfortunately, in the markets of the world we are not even holding our own in relation to our new and thriving competitors. The Treasury issue every month their Bulletin for Industry, of which I have a copy in my hand, and which was admirably summarised in the "News Chronicle" yesterday in these words:
    "Among the 18 nations of the Organisation of European Economic Co-operation—all
    238
    West Europe, Greece and Turkey—German exports have raced past Britain's in spite of a rise in our share. And in places like South America, Egypt, and parts of the world outside the dollar and sterling areas, German exports are ahead of Britain's and are still going up while ours slip back. Even in the dollar area, where our share of trade is still ahead of the West Germans, they are putting up a fierce chase. And in the sterling area—including our own Commonwealth—while British exports are rising again after a fall West Germany's are going ahead quicker."
    That is a most alarming state of affairs. The reason for it is twofold. First, we have failed to make that investment overseas that the state of the world and our own economy called for from us. Secondly, there has been insufficient investment in private industry during the past year, and, indeed, for some years past.
    The Chancellor spoke about the effect of rising wages upon our competitive prices. Far more serious than rising wages is the fact that we are not keeping our industry at the maximum pitch of efficiency and productivity. I hope, whether my hope will prove to be justified or not, that the new investment allowances that the Chancellor announced will go some way to encourage greater investment than we have seen during the past 12 months.
    Mr. Cyril Osborne: The hon. Gentleman is, rightly, complaining that our position in the export market is difficult. He is complaining that we are not spending enough on re-equipment and that our position is precarious. How can he, in those circumstances, also demand that we give more away in the form of social services if we have not got it to give away?
    Mr. Greenwood: We shall not get the money necessary for an expansion of the social services unless we have got industry running at the maximum pitch of efficiency. It is no good taking the purely short-term view and starving industry of the capital it needs in the next year or two. What we have to do is to make the sacrifices so that in five or 10 years' time we may have the efficient industry that we require.
    I am sorry that in the last 12 months the incentives which the Chancellor gave a year ago have not had the effect that everyone hoped they would have. We know that during that time industry has

    239
    been piling up quite nice reserves which could have been used for new plant and new machinery, as the Chancellor implied during his speech.
    Sir Herbert Williams: Will the hon. Gentleman tell us what people do with their reserves?
    Mr. Greenwood: The hon. Gentleman will know better about that than I do. No doubt he can develop that point in his speech. As I understand the position, one of the complaints of the Chancellor is that the money has not been used in productive industry as he would like it to be used.
    I come to three further points to which I wish to draw attention. The first relates to the fuel tax. I was sorry that the Chancellor was not able to announce any concession, even a slight one, in that direction. Before 1950, the tax on diesel oil fuel, which is known as Derv, was 9d. a gallon. In 1950, it rose to 1s. 6d.; in 1951, it increased to Is. 10£½ and, in 1952, it went up to 2s. 6d. Today, the tax is no less than 214 per cent, which I believe to be at a wicked and punitive level. The untaxed cost of Derv is 1s. 2d. a gallon. When tax is paid it is 3s. 8d. a gallon.
    In January, a memorandum was presented to the Chancellor on behalf of four passenger transport associations. I wish that the Chancellor had paid more attention to the representations made to him on that occasion. But we should not assume that this is a question only of passenger transport. It is true that the extra imposition upon our passenger transport is one of the considerations which is making for more wage demands; but we should not blind ourselves to the fact that the tax on fuel is also putting up the price of the goods that we produce and so adding an extra burden to our efforts to compete in export markets.
    The second point refers to Purchase Tax. The Chancellor told us that this year we collected £39 million more than he estimated a year ago and that during the next 12 months he estimates that we shall collect £295 million. I do not want to weary the Committee by going into the arguments about Purchase Tax all over again, but I should like to say. very briefly, that I believe that this is
    240
    a fradulent tax which was put on during the war in circumstances very different from the circumstances of today. It was never intended to be a permanent tax. It is today an inflationary tax because it puts up the cost of living. It makes the development of our export lines more difficult. And it means, because of the operation of the D scheme, that there is a lowering of the quality of many of the goods that we produce.
    Representations have been made to the Chancellor along those lines in the last few months and I am sorry that he brushed them aside with the same brusqueness that the Government in variably show in dealing with the problems of the textile industry.
    The last point relates to post-war credits. Like other hon. Members, I welcome the slight concession which the Chancellor has made in this direction; but it is a very slight concession. The right hon. Gentleman told us something about the origin of post-war credits. What he did not tell us was that when Lord Keynes originally propounded a scheme of post-war credits the intention was that they should be paid off at the end of the war out of the proceeds of a capital levy.
    We are now nine years after the end of the war, and out of £800 million of post-war credits that accumulated there are still £564 million left to be paid off. As we are paying them off at the rate of £16 million or £17 million a year, it will still take us nearly 40 years before we have wiped out the post-war credits. Yet, in 1946, the Government announced that it was hoped to liquidate credits, between then and, say, the next five, and certainly 10, years. The Financial Secretary of that time added that the bulk of them would have been paid within four or five years.
    That time has passed, and I think it is most unfortunate, from the point of view of both parties, that the House of Commons has not lived up to the expectation which the public had when the post-war credits were collected during the war. It is unfortunate, when the public have handed over money to the Government on a clear understanding that the time during which the Government will retain that money is limited, that we should now face the prospect of the

    241
    money remaining in the Government's hands for another 25, 30 or 40 years.
    I am not making a party point, because we put this argument over and over again to my right hon. Friends when they were the Government. From the long-term point of view, it is very sad if the confidence of the public in the word of the Government is destroyed in this way. I should have liked to hear the. Chancellor today announcing some scheme not for the minor concession which he has made but for the gradual wiping out of post-war credits, so that we could honour the undertakings which were originally given. I should also have liked, while the Chancellor was making concessions, to hear him make concessions so that people on National Assistance could be allowed to draw their post-war credits rather than rely on assistance.
    In conclusion, the test of a Budget is whether it measures up to the needs of the time. I think the needs today are two-fold. In the first place, there is the need to look after those members of the community who are most in need of help; and the Budget fails to do that. The second requirement of a Budget is that it should make a real contribution to the expansion of our industry and to the solution of our balance of payments problems. In my view, the Budget also makes an inadequate contribution in that direction. On both those grounds I believe that this is a disappointing Budget and I hope that as the Finance Bill passes through the House it may be possible to make at any rate some minor improvements in what otherwise would be a thoroughly bad Budget.
    5.33 p.m.
    Sir Herbert Williams: I have never before listened to such concentrated nonsense in a speech as that which was contained in the speech of the hon. Member for Rossendale (Mr. Anthony Greenwood). The hon. Gentleman made the allegation that industry has failed to re-equip itself. He says it has placed money to reserve. I wonder whether he has ever looked at the profit and loss account of a balance sheet. Reserves do not consist of money put into a box to stick under the managing director's table. Reserves are almost invariably found in new assets on the other side
    242
    of the balance sheet. The hon. Gentleman does not seem to understand that; he has not a clue.
    In addition, the hon. Member deplored the fact that the Chancellor has failed to provide all sorts of benefits involving in creased expenditure. Next, he deplored that the Chancellor has not reduced taxation. I do not know whether he learned any arithmetic. He regretted that various classes of the community who are retired from work have not been given greater benefit from the Budget. He went on to deplore the high level of Purchase Tax —and I agree with him, for it is much too high. He deplored the rate of petrol duty—and I agree with him because that, too, is much too high. But we cannot spend more money and simultaneously reduce taxation. The hon. Gentleman should do a little arithmetic.
    Mr. Anthony Greenwood: I said that I recognised that the Chancellor had to produce such a disappointing Budget and could not do many of the things we wanted him to do because our economic progress has been so slow; and I said that our economic progress has been so slow largely because of the lack of investment in new equipment. That is not my view alone; it is also apparently the view of the Chancellor of the Exchequer and certainly the view of the Economic Survey.
    Sir H. Williams: I think I know as much about the inside of a factory as do both the Chancellor of the Exchequer and the hon. Member—indeed, far more than the hon. Member knows. The engineering businesses with which I am associated are all the time fighting to get the wherewithal with which to pay for new equipment. The hon. Member should look at the published accounts of the company of which I happen to be a director.[An HON. MEMBER: "How much do you get?"] I work fairly hard and I earn what I get. I see that the provision for taxation in respect of the year to which this report and accounts relate was £61,000. The shareholders received £15,000, so the Chancellor of the Exchequer—the sleeping partner in the business—whose representative is on the Front Bench now, draws four times as much as do the shareholders.
    What was left over to carry forward will be used, as far as it will go, to pro-

    243
    vide the new equipment which is necessary. We are always after new equipment and always finding it exceedingly difficult to get new equipment. I resent the fact that somebody with no experience at all of industrial matters, as far as I know, should accuse those who are engaged in industry of failing to provide new equipment.
    Mr. Anthony Greenwood: That is what the Chancellor said.
    Sir H. Williams: I do not care what the Chancellor said.
    Once upon a time I was interested in the machine tool industry, and that industry provides a very large part of the equipment of other engineering works. The machine tool industry has been working all out ever since the war. Indeed, it was working all out during the war, of necessity. If hon. Members tried to buy large items of equipment from the machine tool industry they would have a long time to wait. How long do we have to wait? It is anything from 18 months to two years, and sometimes even longer for big machines.
    One machine which I have in mind will cost £25,000, which is a lot of money to spend when the capitalisation of the company is only £160,000. That machine was ordered two years ago.
    Mr. W. G. Cove: It is a small company.
    Sir H. Williams: It is spending £25,000 for one machine and it will take over two years to get it because the machine producing industry is so far behind with orders. To suggest that industry is not spending money on re-equipment is grossly unfair to those engaged in industry. We are doing our very best to finance re-equipment. I happen to be mixed up with two engineering companies.
    Mr. Jack Jones: I bet you are.
    Mr. R. J. Mellish: Did I understand the hon. Member for Croy-don, East (Sir H. Williams) to say that he is mixed up with a lot of industries?
    Sir H. Williams: What is wrong with that? They are two engineering companies—one in Middlesex and one in Lancashire.
    Several Hon. Members Several Hon. Members rose—
    Sir H. Williams: There is no one more willing than myself to give way, but I think I might be allowed to make my speech.
    On Friday, I am taking a day off and going to Lancashire. I am the only non full-time director of the company, and I always ask my colleagues, "What about the progress of new equipment?" I am always asking them about re-equipment. I am always asking, "What do you need?" It is vital that we should keep up to date.
    This particular branch of industry is not a branch of precision engineering. Our stuff is on the heavy side and high precision is not very much in demand. I am always asking my colleagues, "Are we up to date? Is our equipment satisfactory?"
    Mr. Jack Jones: I am not asking this in any controversial mood at all, but the hon. Gentleman says he is connected with a company which is about to buy a machine which will cost the company— in effect, this is what it will cost the customers of the company—£25,000. If he is so efficient, will be tell us the exact number of hours that machine tool will work when he gets it?
    Sir H. Williams: As far as I am concerned it will work all day and, when necessary, all night. That is the only proper and efficient method. If one has a valuable machine, if one cares to put a night shift on, one does. But one cannot always get men for the night shift, particularly in a district where the demand for engineering labour is high. I do not see that that point is relevant.
    Mr. Jones: Certainly it is relevant.
    Sir H. Williams: We have had comment, too, about extravagant businesses. But what is the ratio of wages and salaries to dividends, tax free, in the case of a large number of companies? Wages and salaries are about 17 times as much as dividends. The hon. Member for Rossendale wants us to make lower profits and, at the same time, wants us to buy a lot of new plant, and then he accuses us of being incompetent because we have not done it. It does not make sense.
    Mr. Anthony Greenwood: In a last desperate attempt to make the hon. Gentleman realise what we are saying and what the Chancellor has been saying, may I read to him paragraph 42 of the Economic Survey? It states:
    "Expenditure by industry on new building was slightly higher in real terms than in 1952. The increase was mainly concentrated in the fuel and power industries; there does not appear to have been any corresponding rise in new building work done for private manufacturing industry, but this was running at a higher level at the end of 1953 than at the beginning, following the relaxation of licensing restrictions in the spring. Similarly, with plant and machinery there were increases in 1953 in investment in the basic industries, particularly coal and electricity, but no increase in manufacturing industry."
    That is the point which the Chancellor, other hon. Members and myself have been making.
    Sir H. Williams: I do not know where the back room boys of the central statistical office get their information. When they used to produce their original Economic Survey, I used to describe it as "Old Moore's Almanac," because their forecasts were invariably wrong. Now, it merely attempts to be a survey of what has happened As anybody with any experience of statistics will find out, if they get one calculation right to the degree of accuracy of one in 10,000, it is remarkable. Everybody knows perfectly well that the original information on which these statistical surveys are based may have an error of 5 per cent, plus or minus.
    I base my calculations and gain my experience from the factories I have visited, and I just do not believe this statistical evidence, whether it comes from the hon. Member for Rossendale or from the Chancellor of the Exchequer. I do not listen to it. All companies are doing all they can, within the limits of the money they have, but even ordinary companies are taxed up to roughly 70 per cent, of their surplus. Out of what is left, they have to provide some reward for their shareholders, to which they are entitled, and the rest goes to reserve, to be invested in new plants and buildings when circumstances call for it. This is what happens in actual fact, and when I hear people talking with no particular experience of industry I get a little upset.
    Mr. Jack Jones: What about expenses sheets?
    Sir H. Williams: Well, what about them? I do not know why a remark like that, which is inclined to be offensive, should not be withdrawn, because the implication is that I am getting something to which I am not entitled. I do not conduct my affairs in that way, and I never have done. I make a complete declaration of all the allowances I get for expenses, and I charge against them the expenses which I am entitled to charge, and I make a full return.
    The Deputy-Chairman (Sir Rhys Hopkin Morris): We are getting a little remote from the Budget.
    Sir H. Williams: I sometimes wonder whether everybody who appears on the B.B.C. or on television, or writes articles for publication, makes a full disclosure.
    The situation revealed by the Chancellor is very grim in one respect. His first Budget was a deliberately grim one, designed to save us from inflation, and, a year later, he was able to introduce his second Budget to stimulate efficiency. It had that result, because industrial efficiency, as the Chancellor said today, is now running at a much higher level than ever before, and showed an advance of 6 per cent, on only a year ago. Meanwhile, the volume of employment in the country is higher than ever.
    It is also true, however, that expenditure has increased, and increased top much. There is a vast increase in expenditure of a kind that ought to have been avoided. I am by no means satisfied that we are getting full value for our expenditure on the National Health Service. The Estimates are far in excess of what was anticipated when it was started.
    There has been no diminution in mortality as a result of that expenditure, despite the fact that there has been a vast drop in infantile mortality as a result of measures which have nothing at all to do with the National Health Service, an enormous drop in the mortality from tuberculosis—60 per cent, in the last 16 or 17 years—also due to causes which have nothing to do with the Health Service, but to the discovery of new treatments and mass radiography. There has been a tremendous drop in the mortality of children due to certain infectious diseases, particularly diphtheria, which, again, has nothing to do with the Health Service.

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    The reason for all this is quite obvious. The doctors are cluttered up with unnecessary patients, they have not the time to deal with them before sending them for hospital treatment, when, in many cases, they could be dealt with satisfactorily without going to the hospital. As a result of that happening, there are long waiting lists at the hospitals and people get worse treatment than before —
    Mr. Mellish: The hon. Gentleman chided my hon. Friend the Member for Rossendale (Mr. Anthony Greenwood) for talking about business when, supposedly, he knew nothing about it. May I, as a member of the South-Eastern Regional Hospital Board, say to the hon. Gentleman that he does not know what he is talking about?
    Sir H. Williams: For nearly 50 years I have studied problems of medicine in various aspects and in a non-expert capacity, and what I have said about infantile mortality is absolutely true. The figures were static until 1900, then they started to drop. They used to average 160 per 1,000 of the population, but, last year, the figure was less than 30, and Croydon has the lowest figures in the United Kingdom.
    When I mentioned diphtheria, the hon. Member for Bermondsey (Mr. Mellish) says that I do not know anything of what happens in regard to tuberculosis. Is it not true that every hospital has a long waiting list? What are the members of the South-Eastern Regional Hospital Board in Portland Place doing about that?
    The Deputy-Chairman: I do not think we can go into the details of the National Health Service.
    Sir H. Williams: The Budget is the result of expenditure, and I was discussing one aspect of expenditure, while hon. Members opposite are very anxious that I should not. However, I will continue with the rest of my speech.
    I have always taken the view that there is a great restriction on our freedom which ought to be abolished. I refer to the General Agreement on Tariffs and Trade. Even in this rather humble Budget, we can see its effects, and, if hon. Gentlemen will look at page 16 of the Financial Statement which has been
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    issued today, they will find that it is proposed to increase the rates of duty on chicory and on chicory and coffee mixtures, and just as much extra duty has to be paid on Empire chicory as is paid on foreign chicory.
    We have lost our economic freedom under G.A.T.T., and I want to restore our economic freedom. I think it is absolutely vital that we should get rid of G.A.T.T. I know it is said that certain parts of the Empire, such as Canada, being under the economic influence of the United States, will not agree, but that is no reason why we should not take unilateral action. If we did so, we should find a great part of the Empire coming in with us. It is true that we cannot now dominate the economic situation quite as we did in the past, but let nobody run away with the idea that we are unimportant. With all our friends joining with us we are, indeed, vastly important.
    Already, we have almost disposed of our balance of payments problem, but we still have the dollar shortage. I am convinced that the £ ought to be allowed to go free, because we cannot have a disturbed balance of trade if we have a free currency. If we have one lot of pieces of paper which we call pounds and another lot which we call dollars, and if we try to fix a relationship between them, which is fixing the value of the £ in terms of the dollar, that is a completely non-sensical economic theory. We can either have paper pounds to exchange with other currencies on a purchasing power of parity, to use one of the technical terms, or we can have gold, but, if we have a paper currency, it is complete nonsense to fix a rate of exchange between two bits of paper.
    We went off the Gold Standard at the beginning of August, 1914, and for the first time in the history of anybody now living we had paper money in the form of £1 and 10s. notes. We went on like that throughout the war till we came to the time when America joined in. Then was established a fixed rate of exchange between the £ and the dollar, and the Americans went on lending us enough money to preserve a fixed rate of exchange.
    On 18th August, 1919, the then Prime Minister, the late Mr. David Lloyd George, gave in the House of Commons a most interesting survey of the economic

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    situation of this country. If anybody wants to read current events in 1919 I advise him to read the speech made by Mr. Lloyd George that day. It is most interesting. He said that from tomorrow morning they would let the £ go free. The result was that the adverse balance of payments was cured in six months. There were other adverse effects due to the fact that, with the assent of all political parties, we decided to pursue a policy of deflation.
    Time went on, and we carried out deflation by reducing the currency so much each year. I think it inflicted great hardship, all for the purpose of restoring the £ to gold parity. It was no good going back to the old parity. If we had restored it at a new parity the result would have been a return to the Gold Standard without deflation.
    Mr. M. Follick: The gold sovereign came back.
    Sir H. Williams: The late Philip Snowden, who was Chancellor of the Exchequer, appointed a committee to consider by what method the Gold Standard could be restored. When the present Prime Minister found himself at the Exchequer he received the report of that committee. In his first Budget he announced the restoration of the Gold Standard from the following morning. It was the first Budget speech I had ever listened to. All the political leaders said that it was a spendid idea. Certain precautions were taken at the time. Assurances were given by the Bank of France and by other people in the banking world. The trouble was not in our going back to the Gold Standard, but in forcing us back to the old parity by means of deflation. The mutiny of Invergordon in 1931 put us off the Gold Standard again.
    Mr. Follick: In 1922, gold sovereigns were in circulation.
    Sir H. Williams: If the hon. Gentleman —
    The Deputy-Chairman: I take it that the hon. Member for Croydon, East (Sir H. Williams) is developing this historical interlude in order to connect his argument with the Motion before the Committee?
    Sir H. Williams: Certainly, Sir Rhys. I am doing so for the purpose of urging convertibility, which, I understand, has
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    been the subject of discussion in every Budget we have had since 1945. I want to show that on two occasions it came off. We were pushed off the Gold Standard, and the £ had to find its own level when we were face to face with a very heavy adverse balance of payments. It is true that a few months later we introduced a general system of protective tariffs. The two things in combination wiped out the adverse balance of payments.
    The first occasion when we had a free £ was when there was full employment. The second was when we were subjected to a very high degree of unemployment. The same remedy, therefore, produced similar results. The £ is self-defending if allowed to go free, but if, when we allowed it to go free, the exchange value of the £ was low, we would have an increase in commodity prices. I hope that my hon. Friend the Financial Secretary to the Treasury will look up these things. If freeing the £ has done well on two occasions it might be worth while to try it again. So much for my general theme of the restoration of convertibility.
    What was done in 1947 under the American loan was not convertibility at all. We allowed sterling balances in this country to be used to buy dollars at a fixed rate of exchange but that has nothing to do with what I am now discussing. People talk of convertibility in two different senses. What happened in 1947 and what I am now urging are two entirely different things.
    The Chancellor of the Exchequer has made something which should be of very considerable advantage to industry and will help to re-equip it. That is, his new investment allowance. I am not quite clear from his speech, or from what I read in the Financial Statement, how it will work out, and I should like a little clarification. So would one of my hon. Friends who is interested in accountancy and, in due course, will find it his professional duty to explain how it will work out. The Chancellor of the Exchequer said that the initial allowances is a tax-free loan and would have to be paid back later on.
    I take it that it is a grant of 20 per cent, depreciation in the year in which we buy, and that we shall definitely save Income Tax on that 20 per cent. I hope that the Financial Secretary will clear up that point, so that we shall know what

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    the proposal is. Quite a number of us are not clear about it. We should like to have an explanatory note to tell us exactly how it will work.
    I take it that it is an initial depreciation of 20 per cent, in the year of purchase, in addition to the normal depreciation attributable to the class of goods concerned. The rates of depreciation vary very much in accordance with the probable life of various commodities. Everybody knows that there is an arrangement going back to the Finance Act, 1921, by which a trader can get into negotiation with the Board of Inland Revenue and put up his case for an agreed rate of depreciation for this class of machinery and that. I take it that the 20 per cent, is initial depreciation, called the "investment allowance," and that on top of it the normal depreciation allowance will be granted.
    I hope that the Financial Secretary will be able to catch your eye, Sir Rhys, and will benefit hon. Members and a lot of people outside by telling us exactly what is intended. I suppose the Chancellor will broadcast to the nation tonight and will elaborate this point, which will attract a great deal of interest among those who are responsible for the conduct of industry. I hope it will also attract the attention of the hon. Member for Rossendale, who ought to assimilate it.
    The Financial Secretary to the Treasury (Mr. John Boyd-Carpenter): If I have the good fortune to catch your eye in the course of tomorrow's debate, Sir Rhys, I should like to address to the Committee a few remarks on this subject. I prefer not to do so merely as a reply to a question at this stage, because this is a complicated matter.
    Sir H. Williams: I am most grateful to my right hon. Friend. I hope, Sir Rhys, that he will catch your eye and retain it sufficiently long to deal with this matter. I know that I have taken some time. I do not normally speak at great length unless provoked by unnecessary interruptions. They do not worry me in the least, but I do like occasionally to complete a sentence.
    As I said in a previous financial debate, the present Chancellor is face to face with a problem that does not cease. On the one hand, he has to try to ensure full
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    employment, and, on the other, to avoid inflation. It is quite true that employment can be created by inflation, but an appalling price has to be paid later. The Germans did that in, I think, 1926. They allowed the printing machine to get completely out of control, with disastrous results.
    We were on the verge of getting out of control in the same way, and the Chancellor of the Exchequer's first method was deliberately designed to check inflation. He asked the banks to restrict credit, and he asked the Bank of England to raise the Bank Rate with the object of checking speculation and inflation. He succeeded. He was doing it at a rather difficult time because, for reasons which had nothing to do with him the textile trade was suffering rather badly then.
    It was an indirect sequel to the war in Korea. America ran up raw material prices to absurd levels and then there was a collapse. Then a previous Chancellor of the Exchequer, the right hon. Member for Bishop Auckland (Mr. Dalton) made a silly speech in which he asked people not to buy. That put thousands out of work.[HON. MEMBERS: "No." People's memories are short, but if they go to Leeds and Bradford they will get the most adequate confirmation about conditions there two or three years ago. Some hon. Members have conveniently short memories.
    The Chancellor deliberately sought. first, to check inflation and that had a most marked effect on the adverse balance of payments. I would remind hon. Members that an adverse balance of payments is an unfailing sign of inflation. The Chancellor checked inflation. It is true that he removed certain food subsidies and replaced them in other ways which gave rise to an apparent, though not real, rise in the cost of living. Within a year he was able to achieve stability of prices. I know that we have frequent questions on the subject —
    Mr. George Thomas: The price of tea is going up again.
    Sir H. Williams: It is no use picking out one item. The balloon may be going up for all I know.
    One has to take the general range of commodities. Household budgets are certainly up, because people are doing themselves so much better. Of course

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    they are. I think one hon. Member has mentioned old-age pensioners, but I remember Mr. Ernest Bevin, as Minister of Labour, being pestered to increase old-age pensions. He declined because, he said, "Two-thirds are in employment— so do not talk to me about that." His words are recorded in the OFFICIAL REPORT.
    The Chancellor of the Exchequer has succeeded in walking the tightrope with great skill—preserving full employment and preventing inflation. I think he is entitled to every praise and credit for his great success in that direction. I only hope that he will be a little more careful in publishing his Economic Survey and saying that industrialists are not buying more machinery. I think that his purpose has been very good, but unless he cuts expenditure—and there are plenty of directions in which he can do that —
    Dr. H. Morgan: Where?
    Sir H. Williams: I cannot make another half-hour speech, but if the hon. Member will come into the Library I shall show him where cuts can be made. The Admiralty, the War Office, the Air Force—the whole lot; there is not one in which there is not waste. Waste is characteristic of Governments.
    Mr. John Rankin: The Tory Government.
    Sir H. Williams: Tory, Liberal or Labour—and the whole history of Socialism is profligacy. If any hon. Member wants to study economy I shall be only too glad to spend an hour in the Library for his benefit.
    I hope that the Chancellor will continue bis success in general economic affairs, but that he will cut expenditure because, quite honestly, the burden on industry today is such that many prosperous firms may go out of business through lack of liquid resources.
    6.6 p.m.
    Mr. George Chetwynd: I hope that the hon. Baronet the Member for Croydon, East (Sir H. Williams) feels the better for getting that off his chest. I am glad, first, that he was not speaking for the Chancellor of the Exchequer this afternoon, secondly, that he did not write the Economic Survey, and thirdly, that he was not called upon to be Minister of Health, or we
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    would have had a very much poorer Health Service than we have. I am sorry that he did not tell the Committee his remedies for reducing expenditure. That would have been most useful. We all know that any significant change in expenditure now means a change in policy. It would have been to our advantage if he could have detailed to us the kind of policy changes in the social services that he wished to bring about.
    After listening to the Chancellor of the Exchequer giving his excellent economic lecture with his usual Olympian calm I began to wonder, at the end, whether his Budget speech was really necessary. Perhaps he could have said, as, in effect, he did, "Last year's Budget was so good that, apart from one or two trivial changes, I propose to do nothing more." He called it a "carry-on" Budget; I would call it an "As you were Budget." Believe me, there will be a "carry on "among the 4½ million retirement pensioners and those supporting their claim to increased pensions.
    The urgent need for something to be done immediately to assist the old-age pensioner cannot be disputed. We know that of more than 4 million pensioners there are well over 1 million in receipt of National Assistance. From our own day-to-day investigations in our constituencies we know that very few of them have any room at all for any exceptional expenditure. If something goes wrong they have very great difficulty in meeting the additional expense. Many of them are living perpetually on a bare margin of subsistence. They have a precarious existence.
    What the Chancellor of the Exchequer does not seem to realise is that in such circumstances every penny or half-penny matters. When the prices of different items of food go up a half-penny, a penny or 4d. or whatever it may be, it is no use telling such people that the retail prices index has not altered over the last few months. We know that, as a result of the Chancellor's last Budget, these people have been the hardest-hit section of the community. In assessing their position we have to take into account not the effects of this present Budget but of the previous one. When the Chancellor had sums to disperse in reliefs of one kind and another it was not to those who fall outside Income Tax payments, not to the

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    old-age pensioners that the reliefs were given but to the more well-to-do sections of the community.
    I am profoundly disappointed that nothing has been done this year to ease the position of old-age pensioners. I should have gambled on this as an absolute "must" for any Chancellor; indeed, I made a prophesy in my constituency, only a fortnight ago, that the one certain thing about this Budget would be an increase in the basic rate of the pension. I regret to say that that has not come about, and I believe that the Chancellor will hear much more about it later. We know full well that the position in which these pensioners find themselves is due, in the main, to the deliberate financial policies pursued by this Government, and that the rising food prices have hit those who are in the weakest position to bear them.
    The poor and the old—especially old-age pensioners—spend a far bigger proportion of their income on food than do other sections of the community, and we know from all the surveys that many of them, after paying their necessary expenses, have less than 2s. a day to spend on food. I regard it as verging on criminal neglect to leave out of account the position of these old-age pensioners. We cannot wait—and we cannot allow them to wait—until the review of the National Insurance Act takes place. There is no reason why, as an interim measure, we could not restore to the retirement pension the same purchasing power it had in 1946. This is an absolutely essential step, and I very much regret that the Chancellor has not seen fit to take it.
    Post-war credits are one of the unique and outstanding financial liabilities of this and past Governments. We know that of the £800 million collected in the war years, £564 million still remains in the Chancellor's hands. We know that it is spread over 10¼ million holders, and that it is calculated that one in three of the adults over the age of 25 holds a post-war credit of one kind or another. The annual repayment rate is £17 million, and unless something more is done than is suggested in the Budget statement it will take 33 years to complete payment. Until the announcement made today, short-lived families, who died off one
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    after the other before they reached retirement, would never have obtained their credits. They would have been handed down more or less as family heirlooms. That position will be slightly improved by the present arrangements.
    People feel that they will never receive these credits, and that is a very bad state of mind for them to be in. They cannot use their certificates in place of cash, or negotiate them in any way. The only change that takes place in their holding arises upon death. The proposal put forward by the Chancellor today will do a little to improve the position, but it does not go far enough. It will cost £2 million each year after the first year. I should have thought that this payment, the delay in which has been a long standing source of annoyance and complaint, could be made far more quickly than that, and I shall give one or two proposals for meeting this requirement.
    First, it should not be paid out in cash. It should be paid either into a Post Office savings bank deposit account or in National Savings Certificates bearing a rate of interest. That would enable people to realise that they had something worth having, and they would not be induced to cash these certificates at the first opportunity. If the whole lot were paid out at once it would have an inflationary effect, but if it were done in a sensible manner, by way of Sayings Certificates, the bulk would remain in the hands of the Government while the interest payments went to benefit the holders.
    During the past few years we have had many requests from our constituents for the payment of their post-war credits in cases of grave hardship. We know that the receipt of £20 or £30 in post-war credits would assist someone who has been ill for a long time to obtain well-deserved holiday, or to re-equip himself in furniture, clothing or whatever it may be. I have put forward schemes for sums to be placed at the disposal of the National Assistance Board for use in these cases, but on every occasion proposals for repayment on hardship grounds have been rejected because of so-called administrative difficulties. I should not have thought that it was beyond the wit of the Treasury to devise a scheme whereby the Assistance Board could investigate cases and make payments of post-war credits where necessary.

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    Another problem arises when a holder of post-war credits dies before he reaches the qualifying age for repayment. Under the present law, the beneficiary cannot claim until he or she reaches the specified age. Some people benefit because the credits happen to accrue to them when they are over the necessary age, but in most cases repayment is postponed, and it may be postponed again and again.
    I can go quickly through four main proposals for the repayment of these credits. First, the Chancellor could repay them on the death of the holder, what ever his or her age might be. That would be an arbitrary way of dealing with the matter, and it would not provide justice between one claimant and another. The accident of death might benefit someone who is not in need. Secondly, the Chancellor could make payment after the death of a holder when he would have reached the qualifying age had he lived. That is the method which the Chancellor has chosen, and it will cost £17 million in the first year and about £2 million in each succeeding year. That will not reduce the holding of post-war credits at any appreciable rate, although I welcome it as a beginning. Thirdly, the Chancellor could lower the age of qualification—65 for men and 60 for women—perhaps by five years, or any period which is agreeable to the Committee. A five-year reduction would cost £84 million in the first year, and to reduce it by one year would cost an extra £15 million, roughly.
    I should not set about the task in that way. I should start repayment of the post-war credits on the basis of the payments incurred, year by year, throughout the period in which they were in operation. We could make a start by paying out the credits incurred in 1941–42. I believe there are about £100 million of those still to be repaid. If we wanted to start with a smaller sum, we could start with the year 1943–44, hi respect of which only about £40 million is outstanding. That would be a fairer way of proceeding. Spreading it over every recipient—not giving him the whole lot at once, but in a series of payments; 50 per cent, of the first year to begin with, or whatever the Treasury thought it could afford—would be a more sensible and practical way of handling this problem.
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    I am convinced that the Government should proceed along those lines. Postwar credits were created upon the assurance that they would be made available so soon as may be after the end of the war. The whole scheme is in danger of being discredited unless a further major step is taken in this matter.
    One small anomaly has been brought to my attention by a lady who is over 65 years of age and is married to a man who is under 65. It was the result of their joint working efforts in the war that their post-war credits were amassed, but she did not take advantage of the provision which allowed them to be split between herself and her husband. She raises the point that although she is over 65 years of age her husband has a few years to go before he reaches that age. That is an obvious anomaly, and I hope that between now and the further stages of this debate the Chancellor can give some consideration to the desirability of allowing payments to be made where either the husband or the wife is over 65 years of age. I do not think that this would cost very much, and it would be well worth doing.
    We must avoid any complacency in our general considerations of the Budget. There are two parts of it the seriousness of which we cannot overestimate. The first is one the hon. Gentleman the Member for Croydon, East feels so strongly about, investment. I would refer him to a statement published by O.E.E.C. on economic conditions in the United Kingdom, which says that this country is falling seriously behind Germany and the United States in the amount they are setting aside for fixed investment.
    Sir H. Williams: How can we set money aside if we have no money to set aside? When 70 per cent, of a surplus is taken in taxation there is nothing left to set on one side.
    Mr. Chetwynd: I refuse to believe that industry is in such a parlous state that it cannot do more than it is doing in this respect. I cannot believe it because of the increased dividends that have been paid in the past year. That survey is absolutely correct in saying that we are more or less mortgaging the whole of our future for some kind of present easement. If we are to hold our position in a competitive world, when the terms of

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    trade may turn against us sooner than we think, we must re-equip our industry.
    The nationalised industries have been re-equipping themselves. The bulk of the money that has been spent on re-equipment has been spent by the fuel and power and other nationalised industries. It has always been one of our major arguments in favour of nationalisation that nationalisation enables the Chancellor of the Exchequer to direct the economy and investment in the national interest.
    If our survival depends on investment, as I believe it does, and if it is proved that private industry cannot provide the investment, there is an obvious need for the State to step in, in specially selected industries, the heavy engineering industries and the aircraft industry, for instance, and do the job itself. That seems to me to be one of the main principles we have to consider. The Chancellor is trying to help by giving some easement by this Budget. I hope he will succeed, because we cannot go on letting our industry run down in the face of the intense competition that we must meet from overseas.
    None of us can feel happy about the situation of our export trade. My belief is that too much of the increased production in the past year has gone into home consumption. That has two very serious effects. First of all, it provides those exporters finding difficulty overseas with a soft option, so they give up trying to expand their markets abroad or recapturing markets they have lost. Secondly, it prevents any flexibility in our investment programme. For instance, if the home consumption of an article is high, people will invest in the means to produce that article, and not invest in heavy industry or anything else that will give the best returns on exports. We are not increasing our exports enough, so that an adequate surplus will be very difficult to obtain. Increased investment is essential, particularly in heavy capital equipment and in aircraft if we are to succeed in our balance of payments problem in 1954.
    The question of the future of the American economy overshadows our deliberations on the Budget. It is generally admitted that there is some kind of industrial recession in the United States. The level of industrial activity there has been declining since the middle
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    of 1953. The United States Index of Production fell from 137 to 128 between July and December, and, at the same time, unemployment there has been increasing substantially.
    The question to which we all want to know the answer is, is this a major recession, a major slump, or is it one of those agonising reappraisals of American industrial policy? The Chancellor seemed to think it was something that would work itself out fairly soon. I hope he is right, because if he is not it will upset all the calculations upon which the Budget is based.
    It would have incalculable effects on our economy. With all the steps we could take, I am doubtful whether we could insulate ourselves against a major American recession. It would have a double effect on our imports from and our exports to the United States, and it would have a disastrous effect upon the sterling area countries. So we must make our policies on the assumption that things may not improve. We must seek wider co-operation within the Commonwealth. We must have a plan to build up buffer stocks in the sterling area of raw materials, so that we can hold our own against this recession. Above all, we must try to bring imports from sources other than the United States of America.
    I believe that this Budget will not create any wild enthusiasm in any part of the country. I was wrong about one prophesy I made about the Budget, but I think I may make another. Yesterday's events may lead to a change in the leadership of the party opposite, and I think that the prospects of an early General Election must be receding in the view of the party opposite because in no sense of the term can this be said to be an electioneering Budget.
    6.26 p.m.
    Mr. Eric Johnson (Manchester, Blackley): I should like to add a word of praise to my right hon. Friend, and I would do so for the clarity of his speech. I have not had the advantage of a university education yet I can find it a pleasure to listen to my right hon. Friend speaking about economic affairs. I would especially congratulate him, not on what he has put in, but on what he has left out. Some hon. Members seemed rather amused when he said that,

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    for the second time running he had included no new taxes. I was extremely grateful, and I think the people of the country will be equally grateful. It is a quite new experience for them to have a Budget with no new taxes, and until last year it was one they had not enjoyed for a long time. We are all grateful for the small easements my right hon. Friend has been able to make of the burden of taxation. Of course, we all wish for more. I suppose we wish that every Budget, whatever the political complexion of the Chancellor may be. However, I still think we should be grateful for small mercies.
    The hon. Member for Stockton-on-Tees (Mr. Chetwynd) made some reference to old-age pensioners. Perhaps he will forgive me if I defer referring to that subject until later. I was most interested and impressed by his observations about post-war credits. The hon. Member for Rossendale (Mr. Anthony Greenwood), who is no longer in his place, made some allusion to our not spending enough in investment overseas. I am inclined to agree with him, but there is not much use in talking about investment unless there are savings to invest.
    One of the facts mentioned in the Statement on National Income and Expenditure from which we may derive a great deal of satisfaction is that there was a marked increase in National Savings in 1953. Those of us who listen to the news on the wireless on Sundays have noticed that since the first week of this year it has been reported Sunday by Sunday that new savings have exceeded withdrawals each week. That had not happened for a fairly considerable time before this year, and it is a striking fact, especially when it is remembered that there has been a great increase in the amount of consumer spending. Not only are we eating more food and spending more on food, but we are also spending a good deal more on what we might describe as luxuries, or at any rate semi-luxuries, such as tobacco, alcohol, television sets and football pools.
    There were record sales at the stoops just before Christmas and again in January. In spite of all this we have been able to save a great deal more, which seems very markedly to disprove the
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    allegations so often made by hon. Members opposite that the people of this country are on the whole worse off as a result of my right hon. Friend's financial policy. I do not see how we can be so much worse off if, in addition to spending more, we are also saving more.
    Allusions have been made to the need for investment at home, but I do not propose to get into an argument about this with my hon. Friend the Member for Croydon, East (Sir H. Williams). In any event, my hon. Friend has now left the Chamber. I want to turn to another matter—to saving and investment overseas, particularly in the Commonwealth and Empire. This brings me back to what the hon. Member for Rossendale said about overseas investment.
    Hon. Members will recall that in paragraph 81 of the 1954 Economic Survey there is a reference to the decision of the Conference of Commonwealth Finance Ministers last year to continue the special efforts made to provide additional capital for Commonwealth development. The following paragraph, paragraph 82, goes on to refer not only to the need for the United Kingdom to earn a surplus on its balance of payments for this purpose, but also to the fact that this surplus must be matched by internal savings. Those two paragraphs merely repeat what was said in almost the same words in the communique issued at the end of the Commonwealth Conference held in November, 1952. That communique spoke about the need of internal saving in the United Kingdom to provide capital for Empire investment.
    After reading that communique of 1952, and further inspired, I freely admit, by what I thought was a striking article in the "Daily Mail," I put down a Question to my right hon. Friend the Chancellor of the Exchequer asking whether he would consider issuing special Empire certificates and bonds, as I described them, similar to National Savings certificates, to assist in financing Empire development. In his written reply, my right hon. Friend said:
    "I am satisfied that there are at present adequate facilities for National Savings and I commend these to all small investors who may rightly wish to play their part in Commonwealth development."—[OFFICIAL REPORT, 16th December, 1952; Vol. 509, c. 163.]

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    My right hon. Friend used practically the same words some 15 or 16 months later in a written reply on 23rd February to a Question about colonial savings put to him by my hon. Friend the Member for Barry (Mr. Gower).
    Nevertheless, despite this rather discouraging view, as I said in the debate on the Budget Resolutions last year, I do not believe that the average small investor sees much connection between National Savings and investment in the Commonwealth. On the other hand, I believe that it would be possible to make a call to him for savings for Common-wealth and Empire development which would make an emotional appeal to him —one to which he might respond. Despite my right hon. Friend's lack of encouragement, I make no apology for returning to this matter once again in the hope that, if this proposal were adopted and if it proved successful, it might open the door, later, to a broader scheme. In fact, I have a slightly different proposal to make.
    The Committee will recall that the United Kingdom has paid £83,600,000 in sterling into the International Bank for Reconstruction and Development, which is 18 per cent, of our capital subscription. That 18 per cent, can be used by the Bank for lending purposes only with the permission of Her Majesty's Government. Last year we agreed to make £60 million available for loans within the Common-wealth and Empire over a period of six years. In addition, the Bank raised £5 million in London in 1951 by the sale of bonds. The proposal which I want to put to my right hon. Friend is that the Government should provide facilities for small savers to invest in the Bank's bonds, which should be earmarked for specific Commonwealth projects.
    The Committee is well aware that the Bank is a United Nations agency, so that by helping the Commonwealth through the Bank we should also be helping the United Nations which, to some extent at any rate, may be regarded as a development of the Commonwealth idea. I suggest that if there is a further sale of the Bank's bonds on the London market, the Government might buy them, to the value, say, of £1 million, and offer them for resale to the public in small denominations through such organisations as the National Savings Movement, the Post
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    Office, the Trustee Savings Bank and voluntary bodies like the United Nations Association.
    If that were to be done, it would be desirable to prepare special certificates and to relate those certificates to specific projects such as development schemes in British Guiana, Jamaica, Nigeria, the Gold Coast or East Africa, and so on. Above all, it would be most desirable to relate them to the Colombo Plan for development in South-East Asia which so badly needs increased public interest and support. I do not think anyone would deny that these and other vitally important Commonwealth projects would be greatly helped by much more widespread interest and support from the general public than they are receiving at present. People do not know enough about them.
    It may well be said that this proposal is quite unnecessary. It could be said that the Bank is not short of capital, that it can raise all the money it needs through the normal financial channels and that this would merely complicate a perfectly simple market operation. I am bound to recall that my right hon. Friend has said more than once that there are already adequate facilities for national savings. I recognise, as I must, the force of those arguments, and I also recognise that a scheme of this kind might not produce an enormous amount of savings, but I believe that there would be a sufficient increase in savings to make it worth while from the purely financial point of view.
    Furthermore, and what is probably more important in the long run, the scheme would provide a practical expression of the desire of ordinary people to help the poorer countries to improve their standards. I think the plan would do even more; it would provide public education on the Commonwealth and Colonies and it would give thousands of ordinary people a chance to feel that they had a stake in the development of the Commonwealth—which is something they do not feel at present.
    If these facilities could be provided on the lines which I have suggested, they might easily be sponsored by the Government and assisted by voluntary bodies through having a combined educational and savings week rather on the lines of "War Weapons" and "Wings for Vic-

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    tory" weeks, which we had during the war. I therefore hope that my right hon. Friend will give consideration to a plan of this kind. I believe that it has great possibilities. It would have the support of the public and, at the same time, would render a considerable service to the Empire.
    I want to say a word on the subject of Entertainments Duty. My right hon. Friend has already dealt with the matter of the cinemas and the smaller football clubs. I confess that I have not been able to digest the figures, and I do not know exactly what effect it is going to have, but I suggest that the reduction made in Entertainments Duty might be even greater if he would consider recouping himself by increasing the tax paid by those people—I am referring to sport— who merely gamble on various kinds of sport instead of giving the sport their active support by paying to see it.
    In the case of football, may I again make the proposal which many of us made on both sides of the Committee last year, and which, I think, was made again only last week, that the tax on football pools might be increased and the Entertainments Duty on football matches reduced? I do not think that anyone would mind that, although I do not know the views of the promoters. But I do not think that the winners would mind; the losers would not care any way—and they are the great majority.
    I do not know how the proposals made by my right hon. Friend in regard to Entertainments Duty are going to affect sports like horse racing and dog racing. To get a revenue out of gambling is made rather more complicated on account of our somewhat old-fashioned laws on this subject. There is, I think, in the case of the totalisator an unfair discrimination against dog racing. Here the tote contributes both to the Exchequer and to the racecourse executives. But on horse racecourses the tote contribution is only to racing and not to the Exchequer at all.
    Much the same thing applies to bookmakers, who have to pay a heavy licence to bet on dog tracks where a tote is in operation, but on horse racecourses they pay the executive for the bookmakers' badges to allow them to bet and their only contribution to the Treasury is through the Entertainments Duty which they pay for admission, although it is
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    only fair to say that they probably pay for three or four employees besides themselves.
    I think that there is a strong case for bringing taxation on betting on horse racecourses and greyhound racecourses more into line. But I would urge that this must not be done by reducing the money received from betting by horse racing itself. The cost of maintaining a horse racecourse and of providing adequate stakes is very much greater than in the case of greyhound racing, and one of the great problems in horseracing is how to increase the stakes and reduce the cost of racing to owners who are finding it increasingly difficult to maintain their stables and studs.
    There is one form of betting which takes vast sums out of the two sports of horse and dog racing and makes no contribution to the sport or to the Exchequer either. I refer to starting price betting away from the course. I believe that if starting price bookmakers were to be licensed it would be possible to reduce the Entertainments Duty on both horse and greyhound racing to a very marked degree.
    I know that this is a dangerous subject to bring up and a highly controversial one, and it is a subject which, I think, no Government has so far been willing to tackle. It does bring in the whole absurdity of our betting and gambling laws. Whatever one's views on the moral issues or otherwise of betting, I do not think that anyone can argue in favour of a system which allows one to put £1,000 on a horse by telephone, on credit, but says that it is a crime if one puts a Is. on in cash with a street bookmaker. The answer is, of course, to license all bookmakers and to make ready money betting legal, thereby getting a larger revenue from it and making it possible to reduce the Entertainments Duty at the same time.
    My final point is about old-age and retired pensioners. We are, of course, profoundly disturbed by their difficulties, and equally by those of people like retired officers and others trying to live on small annuities and small fixed incomes derived from invested savings. I think that class of people have been harder hit than anyone else since the war. We all wish, and I think my hon. Friend as much as any of us, that he had been able to do more for them. But we cannot avoid an unpleasant economic fact by refusing

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    to look at it. We are all, I know, anxious to help the pensioners. The hon. Member for Stockton-on-Tees has told us what he would like to do to help them. I should like to do the same thing, and I think that we would all like to do it, but no one has told us how to do it.
    It has been said that the Insurance Fund will no longer be self-supporting in a very short time; indeed the cost of retirement pensions alone at their present level will exceed the total income of the Insurance Fund. That is the problem which we are up against. I have great hopes that the Committee now investigating the whole question of doing something to help the old people will be able to find a solution. In the meantime, much as I should like to see something done, I cannot help thinking that my right hon. Friend is right in saying that he must wait a little longer.
    I know that it is easy enough for us to tell old people that they have to wait longer, but we have to be realistic, and I do not think that there is any other choice. I know, of course, that help is available to them through National Assistance, but I know, equally, as we all know, that many old people are extremely reluctant to rely on National Assistance to keep them going. I should like to suggest a very modest proposal and one which I have made before. I am quite certain that they would prefer to earn more by their own efforts than by obtaining National Assistance.
    We have recently had an interim report of the Committee appointed by my right hon. and learned Friend the Minister of Labour, which is looking into the whole question of the employment of older men and women. I think that we shall have read that report with profound interest. I suggest, therefore, that it would be consistent with the proposals in that report to increase the amount which old-age pensioners can earn without deduction from their pensions. I do not think that that is very much for which to ask, and it would be very little to give, but it would be something.
    It would not cost the Exchequer very much, because the amount by which the cost of pensions would be increased would be offset by the saving on National Assistance. I hope that if I make the same suggestion that I made last year
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    my right hon. Friend will look into it, namely, to see if he cannot consider raising the 40s. limit to 60s. as the amount they can earn without deduction from their pension. If he cannot go as far as that, perhaps he would consider deducting 6d. instead of 1s. for every shilling earned between 40s. and 70s.
    I apologise for detaining the Committee longer than is my usual practice during the short time that I have been here. I am not an economist, and I recognise that most people will be able to pick holes in the things which I have ventured to say, but I hope that my right hon. Friend and hon. Members on both sides of the Committee will at least think that the matters which I have brought forward are worthy of consideration.
    6.49 p.m.
    Mr. F. Blackburn: As I understood the beginning of the speech of the hon. Member for Blackley (Mr. E. Johnson), he seemed to be grateful that the Budget was no worse than it is. I think that the general feeling of Members on both sides of the Committee will be one of considerable disappointment, particularly with regard to the last point the hon. Member mentioned, namely, the question of old-age and other pensioners. The hon. Member for Blackley touched on other matters, including the question of colonial development. Interested as I am in colonial development, it is not my intention this evening to follow him on that subject. He also touched upon the question of Entertainments Duty and betting tax, and I think that discussion on those particular matters might well be left until the Finance Bill.
    I have come to the conclusion that I am a rotten prophet. It is not often that I have indulged in prophecy, and it had better be a long time before I indulge in it again. I was fairly convinced that there would be three things in the Budget: first, something for the pensioner; second, a reduction in the tax on Derv—the technical name, I think, for diesel oil; and third, a concession on post-war credits. The only respect in which I have been even a little near to correct has been in connection with post-war credits, but I cannot say that the Chancellor of the Exchequer has done very much.
    Everyone will realise that it is not the holders of post-war credits but the people

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    who inherit, who will get the benefit. With regard to the old-age pensioners, I am very disappointed. Everyone in the Committee realises the serious difficulties which pensioners are now having. Inspite of the difficulties that face us, I am not convinced that the Chancellor could not have found something to relieve their position.
    If it is not presumptuous for a back bencher to do so, I congratulate the right hon. Gentleman on the clear and lucid manner in which he put across a dull and disappointing Budget. My hon. Friend the Member for Rossendale (Mr. Anthony Greenwood) mentioned that when the Chancellor was at church last Sunday there was a certain prayer. I understand also that the right hon. Gentleman read the lessons, and I believe that the first lesson began with the words:
    "And Moses said unto the Lord,
    O my Lord, I am not eloquent.…"
    That cannot apply to the Chancellor of the Exchequer. If he is not eloquent, at least he has the facility of putting over a very bad case and making it sound fairly reasonable.
    On one or two points today, I thought that the right hon. Gentleman had a good case and sounded a little pleasanter than usual, but he seems to be able to make even a bad case sound reasonable. One could detect in his phraseology this afternoon something of the same kind of expressions as we have found in the reports of the Commonwealth Economic Conferences. One thing for which I am grateful to the right hon. Gentleman is that he called attention to the present precarious condition of our economy. I was very pleased to hear his note of warning, because I have been worried about the spirit of complacency that seems to have taken hold of Members on the other side of the Committee.
    It is generally possible to make a good case by choosing one's basis of comparison. The year 1952 was a bad year. By comparing 1953 with 1952, it would appear to some extent that we have done reasonably well in 1953. But to compare 1953 with 1951, we find that the total receipts for exports and re-exports were less and that the volume of exports was also less. That is a matter of serious concern to all of us.
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    To compare 1953 with 1950, we find that consumers spent more on food for less consumption. The hon. Member for Blackley was wrong.
    The Economic Secretary to the Treasury (Mr. R. Maudling)indicated dissent.
    Mr. Blackburn: The Economic Secretary shakes his head. I think he would take some responsibility for the Economic Survey and also for the Preliminary Estimates of National Income and Expenditure. From this latter document, covering the years 1948 to 1953, we find that consumers spent £843 million more on food in 1953 than in 1950. From Table 11 on page 21 of the Economic Survey, however, we find that the average daily intake per head was less in 1953 than in 1950. The total energy value in calories also was less. From the figures of annual consumption in pounds per head, we find that for practically every item quoted, with the exception of sugar and fresh vegetables, the consumption was less.
    Mr. Maudling: If, on the other hand, the hon. Member looks at the table above that one on page 21, he will find that consumers' expenditure on food in 1953, valued at constant 1948 prices, was the highest since the war. That is the important figure.
    Mrs. Eirene White: The important figure is not the money spent, but what people are able to eat.
    Mr. Maudling: That is precisely what the figure of constant prices shows.
    Mrs. White: But the quantity is different.
    Mr. Blackburn: I admit that the table to which the hon. Gentleman refers is brought down to 1948 figures. I was quoting the amount of money spent on food in 1953 and the fact that, although we spent £843 million more, we yet had less food than in 1950.
    Turning to the question of the balance of payments, I think we have been living on luck. Some sections of the House have been very complacent, but are we not still in a very vulnerable position? Is the improvement due to our own policies and efforts, or to the more favourable terms of trade? In comparison with

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    1951, we paid £603 million less for practically the same volume of imports. If we had had in 1951 the terms of trade which we have today, there would have been no crisis.
    The Economic Survey recognises, quite rightly, and the Chancellor recognised this afternoon, that the balance of payments problem is stall with us. It is our most vital problem. As the Economic Survey says,
    "The rise in the reserves continued in the first two months of 1954, bringing them to £923 million at the end of February. This was £329 million above the low point of April, 1952, but still only about half way back to the peak reached in June, 1951."
    Therefore, in the event of a world economic crisis, we are today in a much more vulnerable position than in 1951.
    Again, on page 37 of the Economic Survey we find:
    "The outstanding economic problem facing the United Kingdom is still that of paying its way abroad, and the needs of the balance of payments must continue to govern the pace of internal expansion.… The maintenance of a rising level of international trade is a matter of particular concern to the United Kingdom, which is so heavily dependent on imports and looks to exports of goods and services to provide something like one-quarter of its national income."
    There the relationship between exports and imports is shown to be the vital problem before us, and if we are to achieve that degree of stability that will enable us to withstand any vital up-heavals in world trade, we must increase our exports.
    The Chancellor emphasised the need for a great concentration on exports, and the Economic Survey points out that internal policies must be designed to lend full support to the attainment of external objectives, that it must be continually borne in mind that we should do our utmost to increase our exports. The Chancellor said that it was possible in 1954 to maintain the same level of consumption that we have had in 1953, but is there not the danger that we are going to concentrate too much on internal consumption to the detriment of our exports? What does the Chancellor think of the Television Bill? Surely if ever there were a Bill specifically designed to increase internal consumption, it is the Television Bill. The Government should
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    be consistent in their policy. The proposals under this Bill must inevitably affect consumption, otherwise the commercial advertisers are not going into the business. They are certainly not going to participate because they want to provide an alternative television programme. They are going into it to make something out of it, and the only way they can make something out of it is by increased sales.
    Mr. Raymond Gower: Would the hon. Gentleman agree that the American example has shown that a large domestic market is the best way to sustain an efficient overseas market?
    Mr. Blackburn: Yes, and the American film market has shown us something, too. We have not reached the same stage of production in this country, whereas American films have captured the markets of the world. There is a great danger that that is what might happen if commercial television becomes operative in this country, for the films there might all be American.
    I do not think that that affects the main argument I have put forward, that there should be consistency in the Government's policy, and if we concentrate on exports, as is vitally necessary if we are to put ourselves in a secure position, then we cannot afford to have Bills of the nature of the Television Bill designed to increase internal consumption.
    The whole thing is totally linked up with the question of increased production and productivity and, therefore, with the problem of exports and with the question of capital investment. I do not understand the anxiety of the hon. Member for Croydon, East (Sir H. Williams). If he had read the Economic Survey and listened carefully this afternoon to the Chancellor of the Exchequer, he would agree that the points made by my hon. Friend the Member for Rossendale were quite correct.
    On page 35 of the Economic Survey reference is made to capital investment, and we find this:
    "There was a further increase during 1953 in investment in the basic industries, but investment in private manufacturing industry remained at about the same level as in the previous year in spite of the relaxation of licensing restrictions on factory building and the special measures taken to stimulate investment in the Budget, when the initial depreciation allowances were partly restored."

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    Again, on page 44, the Economic Survey calls attention to the fact that:
    "The development of basic services like fuel and power and transport is just as important as investment in manufacturing industry, but it is in the latter particularly that the United Kingdom appears to be lagging behind its main competitors."
    I think everyone will agree that the United Kingdom cannot afford to lag behind its main competitors in this matter, and that it is private industry that is letting us down. It will be seen that we have had investment in the nationalised industries last year. The Chancellor of the Exchequer, as he said, made certain concessions expecting an increase in capital investment. That did not take place. This year he is making a further concession in the hope that the private manufacturers will now re-equip their mills. If this does not take place, the only solution is to make it a matter of compulsion, because it is so vitally important to the industry of this country.
    Before I leave this point, I should like to make a passing reference to the question of Government expenditure, which this year is the highest that has ever been known in the history of this country. I wonder what has happened to the Tory campaign of pre-election days, when there seemed to be competition amongst Tory politicians and national newspapers in telling us as to how much Government expenditure was going to be reduced when the Tories took office.
    We have heard little about that from hon. Members opposite or from the national newspapers. I think they have come up against the facts of life, and they are realising there are certain matters of expenditure which cannot be dispensed with. In fact, I am one who would have liked national expenditure increased in this Budget because—and here I am coming back in conclusion to my main point—of the benefits it would have brought to the old people. There are many hon. Members in this Committee who wish to speak, and so I propose to bring my remarks to a close by expressing once again my very great disappointment that, in spite of all that the party opposite have been saying about improved conditions today, the Chancellor has not found it possible to do anything to alleviate the very serious position in which the old-age pensioners
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    and other pensioners find themselves at the present time.
    7.8 p.m.
    Mr. Robert Crouch: I should first of all like to add my congratulations to those already voiced to my right hon. Friend the Chancellor of the Exchequer upon the Budget which he presented this afternoon, and on the very lucid way in which he presented it. He called it a carry-on Budget; I would much prefer to call it a Budget of stability, because I believe that as a result of this Budget we are going to get what we as supporters of the Conservative Party have maintained should be the policy to adopt, that first of all there should be stability to enable the cost of living in general to be reduced; and that no reduction in the cost of living will ever be brought about if inflation is allowed to unfold.
    This is the first time since 1945 that a Chancellor of the Exchequer has seriously faced up to this problem. What was the result last year? There was more employment and a higher level of employment than ever before in this country. The unemployed was only 04 per cent, of the working population. That is indeed something of which we can be proud, and I believe we have stopped this threat of inflation and can look forward to something even better happening in the future. I know of no responsible person, in the House of Commons or outside, who expected to hear the Chancellor make any great concessions, nor did they anticipate that he would reduce taxation to any great extent.
    Mr. A. C. Manuel: The hon. Gentleman is claiming that Government policy has stopped inflation. How does he square that with the fact that practically every trade union in the country is coming forward with increased wage claims because the increased cost of living is hurting their members, and that many of those wage claims are conceded on the basis of the case put forward by the trade unions?
    Mr. Crouch: The Chancellor has dealt with the issue of the increased cost of living on many occasions. The cost-of-living index is in exactly the same form as it was when the party opposite were in power. What has happened is that

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    people are spending more money on food and petrol than when the party opposite were in power, because both are off the ration. Whatever commodity is mentioned, people are spending more money on it because they can get it. I am spending more in my house than I was when the party opposite were in power, because I can now get things I want.
    We have had a little concession with regard to post-war credits, but no one seriously expected much. If it is easy to do, why did not hon. Gentlemen do something when they were in power? I welcome the reduction in Entertainments Duty, especially with regard to cinemas. I hope that when my hon. Friend the Economic Secretary is drafting the Finance Bill with his right hon. Friend, he will see to it that the cinemas in small boroughs, of which I have two in my constituency, holding between 200 and 400 people, are treated in the same way for Entertainments Duty as those in rural areas.
    I believe that this new industrial allowance will have the effect of bringing about higher production in industry. I am convinced that, if we are to continue to enjoy the various privileges that we are enjoying now, we must expand production because only by that means can we improve our standard of living. Mention was made by the hon. Member for Stalybridge and Hyde (Mr. Blackburn) of the Television Bill and of the home market in television sets. It is not only the consumer at home who will be affected by the increased manufacture of television sets. If we manufacture sufficient of them we can go into the export market. Furthermore, if we get commercial television established here we shall be in the same position over television films as Hollywood is now with cinema films.
    Mr. Blackburn: I think the hon. Gentleman has misunderstood what I said. I was not referring to the increased consumption of television sets but to the increased consumption that is the logical sequence of advertising under the Television Bill.
    Mr. Crouch: But unless we have commercial television in this country we shall not have the facilities to make television sets and programmes for the export
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    market. I welcome the Television Bill because I believe we shall be able to export British culture and the British way of life as we have never been able to do before.
    Now I want to turn from the general to my particular subject, the position of agriculture under the Budget. I welcome the statement of the Chancellor that this Government stand wholeheartedly behind British agriculture. The farmers have never at any time had anything to fear from the present Government. The subsidies for food will amount to £325 million, but the British farmer will get only half of that amount.
    I want to correct the Chancellor a little with regard to what he said about eggs. Various people have attributed the large increase in the amount of home-produced eggs to the warm weather last autumn, but I do not believe that this had anything to do with it. I believe that great and welcome increase in the number of eggs coming off British farms was due to two things. One was that for a long time our pedigree breeders had been improving gradually the quality of poultry stocks and so year by year the hens had been laying more eggs. The more important factor, however, was that the feedingstuffs available last autumn, as a result of the Government freeing them from control, were of a better quality than had been available previously. Never before have we had such high quality poultry food.
    There was one thing about the statement of the Chancellor which disturbed me. My right hon. Friend said that the Government would have to put a limit on their commitments. This is a challenge to the industry which it should take up and which it is capable of taking up. The answer to that challenge is a still higher standard of farming. I cannot believe that it is beyond the wit of our agriculturists to increase production still further by using better methods of production and so bringing down the price of their commodities. I feel sure that the farmers will accept this challenge and will make proper use of all the facilities available. They can accept that challenge as confidently as they can accept the assurance of the Chancellor that the Government and the Conservative Party are standing wholeheartedly behind British agriculture.
    7.20 p.m.
    Dr. Horace King: It is a rather negative position when the hon. Member for Dorset, North (Mr. Crouch) has to defend the Government's agricultural policy by assuring the farmers of England that they need not be afraid of the Government.
    Mr. Crouch: That fear has been injected into them by the party opposite.
    Dr. King: The experience of anyone who has been speaking in the countryside during the last two years is that the Government ought to be afraid of the farmers if and when an election comes about.
    Yesterday's debate and today's debate have been to me curiously similar. We thought yesterday that both sides of the House would unite on the need for peace and on dealing with the new problem that has been thrown into the world by the remarkable progress that has been made in experiments with the hydrogen bomb. We felt that yesterday the chief Government spokesman might have come across the Floor of the House, accepted the gesture of the Leader of the Opposition, and united both sides on the things that concern people of all parties, because all of us are desperately anxious about the problems which we discussed yesterday. In the same way, many of us thought quite sincerely that the Chancellor in his Budget speech would be expressing in a practical form the concern that the best elements on both sides of this Committee have been feeling in the last few months for the old, the sick, the disabled and the children.
    It may have been a romantic illusion on our part, but some of us thought that we had begun to permeate the minds of hon. and right hon. Members opposite with new ideas on these matters. The Prime Minister disillusioned us yesterday on the much graver issue of the hydrogen bomb, and the Chancellor has certainly disillusioned us in our hope that something would come from the Budget for the five million people who need most help.
    It would be impertinent for a back bencher to bandy compliments with the Chancellor on the undoubted technical skill with which he delivered his Budget speech, but even a back bencher can complain of his complacency. One of the irritating things about Molotov and his col-
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    leagues is that the Communist Party, according to its chief spokesmen, is always right. Whatever happens has been predicted and foreseen by the Communist Government. We had a touch of this attitude in the Chancellor's Budget speech, when he spoke of whatever has been good in the country's economic progress and claimed it for his Government.
    We are all delighted at the increased production that has taken place in the last year, because increased production and increased productivity are the life-blood of the country and affect us whatever are our political opinions. Our only regret is that the rate of increase of production in the first five years after the war had to dip under the present administration before it began to ascend again during the last year. We are all delighted that the Government have managed to maintain the policy of full employment which was pursued by the Socialist Government in the post-war years. We are glad that the increase in unemployment that took place when the Government came into power seems to have declined.
    The Government are entitled to take credit for the fact that we have not had the kind of unemployment that we on this side of the Committee have associated with Tory Governments throughout this century. The cost of living has been stabilised more or less in the last 12 months, but the Chancellor, representing a Government who promised to reduce the cost of living, has no right to be complacent about the fact that all that he has done, on his own figures, has been to decline the value of the £ to 19s. 2d. and prevent it going lower, as a way of carrying out his election pledge to reduce the cost of living.
    But according to the Chancellor's speech, whatever was good in the national situation was due to the policies which he had adumbrated and the consequences which he had foreseen, and whatever was bad was due to world conditions over which he had no control or, he was almost tempted to say, due to six years of Socialism. I am very seriously alarmed that we are still not facing adequately the great problems that confront us and that at Budget time, which ought to be a time of national soul searching on the most important problems of all, the Government are steadily lifting themselves out of the position of direct control and handing more and more over

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    to free private enterprise, and on grave issues can only express a wishful hope that things will turn out all right in the long run.
    It would be unkind to compare the Chancellor with Gladstone, of whom somebody said that nobody minded his producing an ace of trumps out of his sleeve but what was objected to was that he pretended that God had put it there. But there were touches of Gladstonian complacency in the Budget speech.
    I want to address myself to the problem of five million people who will not regard this Budget as dull and pedestrian and who will not regard it as whatever the Chancellor meant by a "carry-on Budget," because these are the people who are rinding it difficult to carry on in present circumstances and who wanted this Budget to be not a carrying-on Budget but a change Budget. This may be a dull Budget as regards the main problems of the taxpayers—the battle between Income Tax and Profits Taxpayers and the rest of the working tax-paying community. It may mark a lull before one side or the other gets back to securing benefits for one income group or other in the country, but for some five million people this Budget will be as exciting as famous Budgets, even the Lloyd George Budget, which introduced old-age pensions, or those Budgets which financed great advances in the social services.
    This Budget is exciting for a different reason, for the reason that it does nothing for the five million poorest people of the country. Whether Income Tax is reduced or not means or does not mean slight changes in the pattern of living for millions of comfortably-off people. A change in the incidence of Income Tax determines whether they have a new car or carry on with the old one, whether one has a television set or not, whether the family budget will rise to a mink coat or some other kind of fur coat, whether holidays will be spent in France or at an English seaside resort, and whether one can add a little to one's savings in the bank. They are all minor changes in the standard of living.
    Whether the Purchase Tax is reduced or not, important as it may be to industries that are occupied in creating luxury goods, only makes minor changes in luxury living. Even changes in duty on
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    beer and tobacco are not vital, although I believe that we are paying far too much indirect taxation and that the job of some Chancellor very soon will be to readjust the balance between direct and indirect taxation.
    The farmer and the farm worker, the millionaire and the lowest wage earner pay roughly the same in taxes on the beer and tobacco which they consume. Both, incidentally, carry an unfair share of the burden of taxation as against the non-smoker and non-drinker. They have the additional injustice of being roundly abused by the teetotaller, whose taxes they help to keep as low as possible. Even Entertainments Duty might be called a luxury tax, although it would be a crazy way of looking at things if we regarded entertainments, particularly the broad entertainments of the people, as luxuries.
    This Budget is exciting for those people to whom the slightest concession would have meant, not a change in luxury, not a change in the minor pattern of living, but an improvement in the standard of living which has been condemned from both sides of the Committee and was condemned by Beveridge himself, the founder of the Social Insurance Scheme, as inadequate for decent living. These people are the old-age pensioners, those living on fixed incomes, those having to supplement their income by going to National Assistance, married men with large families and growing children, the disabled ex-Service men and widows. I estimate this group to be at least five million people at the bottom of the social scale, people with no powerful organisation behind them. These people expected help and they had a right to expect help by a raising of the basic rate of pension and a raising of various allowances to be financed by this Budget.
    From the speech of the Chancellor it seemed thai his policy and that of the Government is very direct and very simple—that we must wait for the quinquennial review and for the Reports of the various Committees inspecting pensions problems. I say with all the force I can—I wish it was with the eloquence of the Chancellor or the Prime Minister—that the people for whom I am speaking cannot wait until the quinquennial review is made. The groups of people for whom I am pleading want help now; and they want it in this Budget.

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    In his speech the Chancellor suggested—I hope I am not doing him an injustice—that the reason why we cannot put the pensioners' position right until the quinquennial review takes place is that he envisages those reforms and those improvements in basic pensions as being paid for out of the income of the workers. In other words—I may be wrong in attributing this to him—he is assuming that the only way of raising basic pensions is by raising insurance contributions made week by week. Everyone will agree that, actuarially, various pensions and insurance schemes have leaped out of any actuarial reality because of the rise in the cost of living. But Lord Beveridge has said, and hon. Members on this side of the Committee believe, that if the basic pension is to be raised it should not be by raising the contribution of the worker—whose contribution would meet any benefit he got under the old pattern if there were no rises in the cost of living—but out of taxation, because taxation distributes the burden more equitably.
    I have said all that ought to be said about this in a recent debate when both sides of the House supported a Motion I moved. I urge both sides of the House, in debates on the Finance Bill, to unite againsit the Chancellor, to demonstrate against the Chancellor and not only to give lip service to the pensioners such as was paid earlier in the debate by the hon. Member for Bromsgrove (Mr. Higgs), who said that he felt for the old age pensioners. He reminded me of the story of the Quaker to whom someone said, "I fed for the poor." The Quaker asked, "But do you feel in the right place; do you feel in your pocket?" The only way in which we can make our lip service to the pensioner more than lip service is by feeling in our pockets and by making provision for them in the Budget.
    What about the debt of honour which all of us have said we were going to pay to the disabled ex-Service man? In the last 12 months debate after debate has shown unanimity among back benchers on both sides of the House about the need to raise the basic rate for disabled pensioners to what it was in 1946. I plead with back benchers on both Slides of the Committee to unite to compel the Chancellor to do something about it.
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    I am afraid the women will be disappointed about the inadequacy of the reference in the Budget statement to equal pay. I am glad that the misunderstanding which seemed to have crept up between the Chancellor and members of the Civil Service association has been straightened out and they are to meet and discuss some ways of beginning to implement a policy on equal pay. But it is no good the Chancellor meeting them unless he has made adequate financial provision in the Budget for a really bold advance towards equal pay in the Civil Service. I hope we shall be assured that such financial provision has been made, although I doubt it from the speech of the Chancellor this afternoon.
    Apart from the pensioners, I think the worst off are the married men. In all the arguments about equal pay we compare the single young woman with the married man to the disadvantage of the single woman, as an argument against equal pay. That is a fallacious argument, because the simple difference is the difference in standard of living between the single man or woman and a married man earning the same income. Anyone from his own experience can agree that when two people are earning the same money, one married and one single, there is a terrific difference in the standard of living; the standard of living of the single person is much higher.
    We could tax allowances for married women for the earnings they actually make by eliminating their tax concession on the first £100 or so of their earnings. I asked a Question of the Chancellor about this two years ago and found that it costs about £60 million a year. I am alarmed at the extent to which we are encouraging married women to go to work. I am not sure that, having started this policy for drastic reasons during the war, we should continue it at a time when we need good homes more than anything else, and whether the place of the married woman, if she has children, should not be at home looking after those children. In any case, I have always believed that all income which goes into a home ought to be taxed, and the amount which could be a benefit to the Exchequer by taking off the tax relief on married women's earnings might very well be used to give better benefits and better allowances to married men in respect of their wives and children.

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    I shall not go into the question of postwar credits, because my hon. Friend the Member for Stockton-on-Tees (Mr. Chetwynd) dealt brilliantly with that matter this afternoon. I would merely say that many of us think the Chancellor has not gone far enough, although we are delighted with what he has done. There are technical difficulties in differential payments of post-war credits, but we think they could be overcome if the right hon. Gentleman would consult back benchers on both sides of the Committee. Most of us during Budget debates ask for money, though it would be quite improper and illegal for us to suggest ways of raising money by taxes. Our job is to resist the Crown in its efforts to extract money from the commoners of this country.
    I am interested in the records of old Parliaments, and during my researches recently I discovered that the Chancellors at the end of the last century but one had pleasant duties besides the painful one of extracting taxes. As late as 1790 the Chancellor could present a report to this House—which may be found in the Journals—about the income of a State lottery which raised £790,000; gave £500,000 in prizes; had expenses of only £13.009—which I think would compare favourably with the football pools —and made a profit for the State of £277,606 3s. 1d.
    In a country such as ours where so much is spent on betting, I think the Chancellor might investigate ways of setting up a national system of football pools, so that people who wish to bet and have their little flutter on the football pools might do it inside a Government set-up. The profits there from could be used to benefit the income of the country. This could be done by the Government at a much lower administrative cost than people outside could do it, and we could earmark the profit for some specific purpose. I am sure that hon. Gentlemen who go to France every year for their holidays buy their lottery ticket from the State post office, knowing that the whole of the profits will go to disabled ex-Service men and feeling very happy about the whole transaction whether they win or lose.
    I was glad to hear the defence of the Chancellor, against the more reactionary element which still exists in the Tory
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    Party, of the great social services and health legislation. It is fair to point out that I am one who believes it a great pity that the Chancellor did not remain Minister of Education. Then, instead of resisting demands for expansion in education expenditure he would still be the one to make the demands of some other Chancellor. But it must be pointed out that the whole of the increased expense of health and education is more than accounted for by the rise in the cost of materials and wages and the increased number of children.
    The reduction in the food subsidies has increased the cost of meals in hospitals and schools. This Government cannot claim any expansion of the Health Service and education. At the moment we are merely hanging on by the skin of our teeth to what we have so far managed to achieve. It is idle to boast about increased expenditure on health and education when every regional health authority in the country is anxious about what service it will have to cut to keep its expenditure inside the ceiling imposed by the Minister of Health.
    Disaster faces secondary education in the next three years unless we do more than we are doing at present to provide school accommodation and teachers. The Government ought not to be complacent about this. I urge the Chancellor not to think that he has done all that he should have done for education by merely in Creasing—as he has done to some extent—the amount spent on education. But my main purpose in speaking tonight is to protest against the betrayal by the Chancellor of the ex-Service men. the old-age pensioners and the widows, and to urge the Government to do something about it before it is too late, and in this Budget.
    7.45 p.m.
    Sir Roland Jennings: I believe that the Chancellor was right in the proposals which he announced this afternoon in that he has no elbow room which would enable him to give the large concessions we should like to see, including an increase for old-age pensioners and other such benefits. The Chancellor announced a reduction of £3½ million in the Entertainments Duty, when the cinema industry is giving £2 million to the production side. I do not think that is a sufficient concession to get

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    them out of their difficulties, and that he should provide the other £3½ million for which they asked. Industry must be grateful for the initial allowances on investment capital, but I do not think it is enough. The Chancellor ought to take a wider view of this matter.
    I suggest that we must have economies in Government expenditure. I do not mean, as hon. Members opposite might conclude, that we should cut down on services and benefits. I recently received a letter from a constituent which will illustrate what I have in mind. This constituent of mine plays a bassoon in an orchestra. He informs me that his instrument cost him under £20 yet children in secondary schools are being provided with bassoons and wind instruments costing £100 each. That sort of thing is nonsense at a time like this. If school children are being provided with instruments costing £100 the Chancellor should ask for an explanation from his right hon. Friend the Minister of Education.
    Dr. King: Whatever may be true about the case to which the hon. Member has referred, I can assure him that in nearly every school orchestra in the country, the children pay for their instruments.
    Sir R. Jennings: I will give the Committee an example of what happened some years ago. In an elementary school the children were asked if they would like to learn to pay the violin. A firm of violin makers was willing to sell to the parents of the children violins costing 25s. each. These instruments were quite good enough for the children to use when learning to play, and the parents paid so much a week to buy them. Today, we are chucking away £100 here on this instrument and £100 there on another, and I know that hon. Members opposite will not disagree with me when I say that that is waste.
    Mr. G. Thomas: Has the hon. Gentleman checked the facts?
    Sir R. Jennings: The information was given to me and if it is not correct I will withdraw. I have no reason to doubt the man, who is a constituent and who has asked me to raise the matter. It is my duty as a Member of Parliament to raise it. If there is any doubt surely the Chancellor can find out from the
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    Minister of Education whether or not the statement is correct.
    Another example has been sent to me. When a man is unemployed he cannot draw unemployment pay until he has been put of work for three days; so he is entitled to go to the National Assistance Board to get immediate help over that three days. He gets a loan of money.
    Mr. William Keenan (Liverpool, Kirkdale): I do not think that the hon. Gentleman would want to misrepresent. The three days is a qualifying period before unemployment pay is given, but the hon. Gentleman has been wrongly informed if he has been told that somebody went to the Assistance Board and got assistance. I cannot get assistance for some people who have been out for over a week. The hon. Gentleman has been wrongly advised.
    Sir R. Jennings: I do not accept that correction. In this matter I have had the opinion of a good authority who has quoted several cases where the money from the Assistance Board has to be repaid when the men get their unemployment pay. I suggest that an inquiry into the administration of National Assistance would be well worth while, and I hope that the Chancellor will order an investigation.
    I read in the Press recently of a case where a man was prosecuted and fined. He was asked how much he could pay and he offered a certain amount. The magistrate asked him how much he earned and he said that he was unemployed. When asked for how long he had been unemployed he replied, "For nearly 18 months." That man was drawing about £5 16s. National Assistance for himself, his wife and children. It is absolutely wrong that a man in work should get very little more than a man in receipt of National Assistance. There ought to be a bigger differentiation to encourage people to work.
    Mr. G. Thomas: Would the hon. Gentleman explain whether, if a man with seven or eight children is unemployed, he is willing to make the children go hungry to satisfy his political point of view?
    Sir R. Jennings: I do not suggest that anybody should go hungry. I suggest that the administration should be such that if

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    a man is able to repay money he should be made to do so instead of being allowed to retain it. I should say that probably millions of pounds would be involved if this matter was carefully handled.
    Mr. Rankin: Surely the hon. Gentleman realizes—or at least he ought to realise—that an individual goes to the Assistance Board because of need. That is the qualification.
    Sir R. Jennings: Certainly, but when he gets unemployment pay he draws the money on the understanding that he repays the assistance.
    Mr. P. Bartley: The fact is that a man does not receive benefit for the first three days and when he receives benefit he does not draw anything with which to repay the Assistance Board.
    Sir R. Jennings: It is very strange that a man who probably earned £10 or £14 a week can go to the Assistance Board on the first three days when he is out of work. [Interruption.] I expected a lot of interruption. The party opposite will not face this matter, and I am asking the Chancellor to face it.
    Mr. Bartley: What the hon. Gentleman is saying is not true. Last week, with the general secretary of the Durham Miners' Association and my hon. Friend the Member for Houghton-le-Spring (Mr. Blyton), I met the chairman of the National Assistance Board in connection with this sort of thing, where men cannot get benefit —
    The Deputy-Chairman: Order. Interventions cannot be developed into speeches.
    Sir R. Jennings: Thank you, Sir Rhys.
    Mr. Rankin: Saved.
    Sir R. Jennings: The hon. Gentleman will not disagree with the view I expressed that, whether or not I am right, the Chancellor should inquire into the matter.
    Mr. E. G. Gooch: The hon. Gentleman is not right, anyway.
    Sir R. Jennings: I am. The reason why there is so much opposition to the proposal is that it is touching you where you do not like to be touched.
    The Deputy-Chairman: Order. The hon. Gentleman should remember that he is addressing the Chair.
    Sir R. Jennings: I am sorry, Sir Rhys. I thought that there would be a little opposition. Nevertheless, I should like the Chancellor to look into the matter.
    Industry is being burdened with heavy taxation, as is the whole country. No Government Department ought for a single day to waste money. If we are to get relief in taxation it will come as a result of economy in Government Departments. I beg the Chancellor to call together his colleagues from all Departments. Let us have a thorough investigation. I am sure that not only will they get a surprise but that when hon. Members opposite are told they, too, will be surprised.
    7.58 p.m.
    Mrs. Eirene White: At least we have had a little light relief from the hon. Member for Hallam (Sir R. Jennings)—without Entertainments Duty. I am afraid that he produced no argument worth replying to, and no doubt he will forgive me if I do not follow him in what he says.
    The smaller reliefs which the Chancellor has been able to offer the country are interesting as far as they go, but I do not think that anybody opposite, including the Chancellor himself, would pretend that they were of major interest. I myself am interested in the slight relief which he proposes to give to the cinema industry. He mentioned that the relief might be used to lower prices, though it is so small that I can hardly suppose that it would have any effect at all on attendance.
    The right hon. Gentleman suggested that it might be used to maintain the amenities of cinemas, but he hardly stressed what surely must have been the main purpose in his mind—that the granting of the relief should enable the cinematograph exhibitors to have no difficulty in meeting their full commitments under the Eady Levy. I hope that that point will be taken by the cinematograph industry and that possibly either the Economic Secretary or his right hon. Friend the Financial Secretary will take occasion to stress the point in their subsequent speeches in these debates.

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    The concession on equal pay cannot really be called a concession. It is merely permission to talk. Although I do not pretend that I share the gift of prophecy in which my hon. Friend the Member for Stalybridge and Hyde (Mr. Blackburn) indulged, I had thought that at least on this matter the Chancellor would have been a little bit more forthcoming. Clearly, we are in for some very tight negotiation between the Civil Service associations and the Treasury, and I fear that they may be very considerably prolonged.
    The other small relief is in connection with post-war credits. I cannot understand why the Chancellor has gone only so far in the case of post-war credits, because it seems to me that in almost all instances a death in the family is in itself something which leads to some sort of hardship. I cannot see that it is inequitable to repay the post-war credit at the time of death instead of waiting until the time when the person to whom it was due would have reached pension age.
    The suggestion made by the Chancellor has the serious practical disadvantage that one is not able to wind up the estate. In most cases, I agree, the amount involved is very small, but I should have thought that for practical reasons the right hon. Gentleman might have gone a little further and said that post-war credits would be paid to the beneficiary on the death of the person to whom they were due instead of making that beneficiary wait, possibly for a long time, before the estate can be finally liquidated. Naturally, all of us would much prefer to have something more substantial in regard to post-war credits, but, as I say, that extra step would have cost very little indeed. It might, perhaps, be reconsidered on the Finance Bill.
    Having dealt with these minor matters in the Budget, I wish to say that we on this side of the Committee, together with a great many hon. Members opposite—whatever they may say in public—are seriously disturbed at the Chancellor's failure to do anything whatever for the old-age pensioners, the disabled, and so forth. We realise perfectly well that this is one of the major social problems of our time, and we all recognise that the burden upon the community of supporting what we believe to be reasonable and civilised standards of living for the disabled, the
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    aged, and so on, is something which presents any Government with a very difficult problem. It is something which I do not think has yet been fully faced by anyone.
    We realise that for practical purposes there is something to be said for waiting until the quinquennial review has taken place, but when one is dealing with a matter of such urgent human importance I think that such arguments are largely academic. The time may come when a major reassessment will have to be made of this whole problem, including the very difficult problem of dealing with the changes in the value of money in relation to statutory benefits of all kinds. That is one of the major problems that may have to be faced, and it may take time to find a correct solution to it.
    However, I cannot see why those people who, at the moment, are suffering from the effects not of this Budget, but of the last Budget and of the increase in prices which has taken place since the last improvement was made in their pension position—increases in the price of articles which are of most interest to them—should be obliged to wait while these important questions are discussed at high academic and financial levels.
    According to the figures that were given to us a little earlier by my hon. Friend the Member for Southampton, Test (Dr. King), which I think he took from answers given by the Government, the present rate of pension for a man and wife of 54s. a week ought now to be 60s. a week if it is to retain the purchasing power originally intended under the National Insurance scheme. In the same way, the pension paid to a widow with one child of 52s. 6d. a week ought to be 62s. 6d. a week.
    These figures are conclusive evidence that something ought to be done now. and in support of this argument I will mention two things. The first is that the Chancellor has said that general consumption is increasing and is likely to be at least maintained and probably some what increased during the present year. That shows that the rest of the community are not suffering from any lowering of their standard of living at the present time, whereas old-age pensioners and others in similar circumstances. including those living on small fixed

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    incomes, are suffering at a time when they see others around them enjoying a reasonably comfortable standard.
    If one has any doubt about that, one has only to look at the advertisement column of "The Times" in order to see that many people can afford to pay high rents for houses and flats and are able to afford expensive clothes. That proves that the community in general is not at the moment suffering any severe restriction as compared with the group of persons of whom I have been speaking. These facts are quite well appreciated by many hon. Members opposite, and I only wish that they would have the courage to say today what they were quite prepared to say during a Friday debate when my hon. Friend the Member for Test raised the matter.
    The other thing which concerns me is the fact that at present there is a very considerable increase in the number of pension and superannuation schemes promoted by business firms of one sort or another. The number has increased enormously since the war. I am sure that the Economic Secretary is fully aware of all that has been said and written on this matter in recent months. I need hardly refer him, for example, to the works of Professor Titmuss.
    Professor Titmuss stressed very graphically in his articles in "The Times" at the end of last year that because of the additional provisions now being made for pensions and superannuation schemes by business firms for those in their employ we are now witnessing a position in which, while the living standards of those at work, both manual and professional people, have been brought within much closer limits than they were in previous generations, when it comes to retirement we are in danger once more of being split into two nations, one consisting of those who are trying to subsist on their statutory pension with possibly some slight supplement from National Assistance, and the other of those who have the benefit of superannuation schemes which to a considerable degree are paid for by the taxpayer.
    Professor Titmuss gave an example, which he said was a typical one—I am prepared to take his word for it, because
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    he has studied this matter with some thoroughness—in a salary range of £4,000 to £5,000 a year. That would be the salary of a fairly highly-paid executive. Professor Titmuss suggested that it would be quite possible for an employer who is making the full contribution—under many of these schemes the employee is not called upon to make any contribution at all—of £1,600 a year, which, of course, is allowed to rank for tax relief, to provide a life cover for his employee of £28,000 should he die before retirement, a tax-free lump sum on retirement of £7,000, and a pension for life of £1,900 a year. Towards this the taxpayer has contributed £25,600.
    Professor Titmuss goes on to say that such schemes are very popular. I do not doubt it, but I would suggest that as this kind of arrangement is now being resorted to by considerable numbers of firms, surely these sums which the taxpayer is contributing towards the pensions of these very highly paid people might have gone towards some slight in crease at least in some of the benefits available to those who are really desperately in need.
    I quite understand that the whole question of the treatment of superannuation provisions and pensions has possibly to await the consideration in future of the Millard Tucker Committee Report. The Chancellor himself said that, and I realise that he has not had this Report in his hands very long. Nevertheless, from reading that Report I thought that there was one small contribution which the Chancellor might have made and which would have helped not the statutory pensioners, but those living on small fixed incomes.
    I refer to the suggestion in the Report concerning the taxation of annuities. I cannot see why this subject could not have been treated on its own without having to wait for the consideration of all the complex suggestions that are made in the rest of the Report. If one accepts the conclusion in paragraph 503 of the Report on the taxation of life annuities it would have had the effect of helping some of those who are trying to live on an income from past savings, which, again, is one of the major problems which face us in modern society. If need be there could be a ceiling above which the provision might not operate, although I should

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    have thought that the principle, if it is accepted at all, ought to be accepted at all levels.
    If we are asking people to save for their retirement—because at no time is the statutory pension likely to be fully adequate for everyone—then, again, we have this problem of how to deal with small savings that lose their value owing to changes in the value of money. It is a very difficult subject to deal with. Some of us have tried to work out methods by which it could be solved. It could hardly be dealt with by Post Office savings because that is so much in-and-out with some people, but there might be some form of Government savings which would have a guarantee of increase with the changes in the value of money.
    That, also, raises some very tricky points, but on this minor matter which would be of some immediate help I cannot see why the Chancellor could not have taken this opportunity of instituting a minor reform, even though the main recommendations of the Millard Tucker Committee quite clearly need a good deal more consideration. On this point, I can only repeat what everyone on this side of the Committee, and, indeed, everybody in the country, is going to say. We are disappointed at the complete failure of the Chancellor to do anything whatever for the pensioners or the people on small fixed incomes.
    There is, of course, another side to the Budget, and that is the treatment of industrial investment. On that, in general terms, I would suggest that most hon. Members would support the proposals of the Chancellor, although the result of the proposals would of course depend very much on how far the industrialists in this country are going to take their responsibilities for investment seriously. The initial allowances restoration did not seem to be very encouraging to private industry, and one can only hope that the industrial investment allowances will be more encouraging to industries which obviously are facing and will continue to face extremely acute competition, particularly from Western Germany.
    I cannot pass from this subject of industrial production without just saying one word about Purchase Tax. I have a textile interest in my own constituency, and I must say that those of us who
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    have any interest in textiles feel that this is a problem which has not been solved. I do not pretend that it was solved by previous Chancellors, but the effect of Purchase Tax on the export of high quality goods has not been solved by the present Chancellor.
    The emphasis in the Budget is on capital goods, with which I would not quarrel. I certainly grant that that is the most important section of industry and the one in which special steps must be taken. But, nevertheless, I think that there is a very strong case for re-examining the effect of the D scheme on the quality of textiles and on their chances in the export markets, including the dollar market which, after all, is still very important.
    I do not want to detain the Committee on textiles, but any of us who have any close association with the textile industries are seriously disturbed at the long-term effects of this method of taxation on our prospects in markets which we can hope to conquer or retain only with quality goods. We keep telling Lancashire and the other textile areas that their one chance is not to compete with Japan with cheap stuff but to go in for the quality markets, and we find that when our manufacturers send their representatives to those markets, as a result of the incidence of tax at home it is difficult for them to produce the range and variety demanded in the American market, for instance.
    It is very galling to the manufacturers of high-quality textiles when they send their representatives to these markets and have to apologise, because they cannot carry a full range of colours, to be told that the Italians are doing so. I hope that this other problem which is very important to a section of our industry will be seriously considered by the Chancellor and that he will use some boldness in trying to solve it. He is clearly not trying to do it this year. One can only hope that he will try to do it next year.
    8.17 p.m.
    Mr. W. M. F. Vane: Before and after a Budget debate Members of Parliament are frequently subjected to pressure of different kinds from powerful groups of one sort or another lobbying them in favour of this or that interest. But there is one section in this country who feel deeply about

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    these things but who are silent, perhaps because they are not skilled in lobbying or have no aptitude for it. We call them by the not very complimentary title, "middle classes."
    These are generally people who are not rich and who, in the course of their lives, have asked little but have frequently done a great deal for their country. They are going to be extremely grateful to the Chancellor for what he has done during the last few years in re-establishing the soundness of the value of our money. They knew, probably from wider experience, what the great mass of the people do not ever realise, and that is the appalling danger and misfortune which can follow an inflation if it gets out of control. We in this country had a steady, though none the less slow, inflation over a number of years, bringing considerable hardship with it, but we never had anything such as the people of Greece had to suffer, nor what the people of France had to suffer to a lesser degree.
    The people of whom I am speaking, particularly the elderly, realise that. They would have suffered more than those who have an interest in industry as employees or owners. They had a vision of great misfortune, and they will be very grateful to the Chancellor what he has done. They make few claims on society, they took risks during their active lives, and in their retirement they do a great deal of voluntary work for which they get very little thanks. Therefore, I hope that in the years to come these people will not be forgotten by the Chancellor when he has some margin for taxation reliefs merely because they do not exert the same pressure as some other groups.
    The Chancellor dealt a blow at these people when he was Minister of Education, when he made it hardly possible for the grammar schools to continue an independent existence. I should like these people one day to get a modest Income Tax relief in return for their saving the general taxpayer the cost of educating their children. That will not be much, but it will be some recognition of the fact that they have been shouldering a certain burden themselves instead of expecting their neighbours and fellow citizens to bear it for them.
    There is one curious situation today. If one's child is not a good examinee at
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    the age of 12, he may miss the chance of an education carrying on stage by stage to the university. Yet if the parent can afford the full fees for a boarding school education—that is a very considerable sum of money today—one may be able to help the child make up the lost ground. If, on the other hand, one cannot afford these fees there is little hope for the child today.
    For generation after generation, many of the people of the class about which I am speaking have sent their children to the magnificent grammar schools where education of the highest order could be obtained at very small cost thanks to the endowments of many people in the past. Now that has changed. Whereas one can spend as much money as one likes on holidays, on the racecourses and on doing all sorts of other things, it is now almost impossible to help in the education of one's child unless one happens to be able to spend several hundreds of pounds a year upon it. This is an extraordinary anomaly which we have seen develop over the last few years.
    I am glad to say that the Chancellor devoted more than a small part of his speech to savings. It is important for us to recover the habit of saving which used to be part of our nature. The people about whom I am speaking had the tradition of saving probably more strongly than any other class, but that tradition has been sorely shaken over the last few years for one simple reason—it has not required much arithmetical knowledge to see that money invested in Government securities after 1945 lost its purchasing power faster than it was made up by the interest due. The wise men saw that there was no profit in buying Savings certificates if at the end of five years they would represent less than the 15s. originally paid for them.
    Mr. Gooch: There were some patriotic people during that time.
    Mr. Vane: I am glad to say that a change has now taken place, as indicated by figures published by the Savings Movement, particularly in the last few months.
    The Principal of Cumberland and Westmorland Farm Institute was speaking in the Midlands the other day about saving and the common belief that it is impossible to start farming unless one

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    has a considerable sum of capital. He said that the farm worker has a good opportunity of saving. I can see how a man who is a bachelor and has no heavy family commitments ought to be able to save in 10 years £ 1,000 maybe, and start farming, and many have started farming with less.
    Mr. Gooch: The hon. Member has not replied to the point that I made. He implied that there was less confidence in savings between 1945 and 1950. I remarked that there were a few patriotic people between 1945 and 1950 who were prepared to invest in National Savings.
    Mr. Vane: I did not hear what the hon. Member said. If he had risen, I should have given way to him. There were indeed a number of people who invested in National Savings, but the fact remains that faith was shaken during those years, and for very good reasons. Over the last two or three years the shaken faith in our £ has become much firmer again, to the great advantage of the country as a whole.
    It has always interested me that while hon. Gentlemen opposite were pursuing a policy which they thought was helping to reduce the distinctions between classes in this country which had become so marked in the last century, they were not in fact creating an egalitarian society but merely a new one with class differences just as marked as those which they were trying to eliminate. I should like the Chancellor to think of this point. It is commonly said that this country was, and still is to some extent, divided between rich and poor. It is now divided between private and official-and-business. The high rate of taxation that we have borne over the last few years has made perquisites of one sort and another far more valuable to a taxpayer at any high level than small additions in hard cash.
    Next time hon. Members travel on a Parliamentary warrant and have a meal, which will be at their own expense, in the first-class dining car of a train, let them look round and try to work out how many people are likely to be paying for the meal out of their own net income and how many will be recovering something through taxation allowances. If they think that 10 per cent, of the people in the dining car have paid out of their net income, it will be a pretty high score.
    Mr. Cyril Bence: Most will have expense allowances.
    Mr. Vane: That is what I am saying. It is an awful reflection that we run our first-class carriages for the benefit of an official or business class. In the Communist world, the distinction is well known. And now here as a result of the policy of hon. Gentlemen opposite, we are achieving not a classless society but a society with an upper class living on allowances. I wonder how many of those who had lunch at the Savoy hotel today paid for their meal out of their net income? I am only giving these examples to show the sort of thing that grows quickly—and it is a bad growth— in a country which year after year has to bear such a heavy burden of taxation as ours.
    Mr. Norman Dodds: The hon. Member is making the point that most of the people who travel in first-class dining cars are officials. Has he any evidence of that? Has he asked such people whether they were business representatives, private business people, or Government officials?
    Mr. Vane: I thought I said I did not mean only those employed by the State but rather "business or official." Only they can enjoy such conveniences and comforts because they do not have to pay for them out of their net income. I suggest that the next time the hon. Member has the chance he has a look round. I am sure that he will come to the same general conclusion as I have come to.
    I greatly welcomed one point in the Chancellors' speech—the exclusion of motor cars from what he calls the "investment allowance." For many business purposes transport is essential, but I have often felt that the interpretation of what transport is necessary in business has been treated as very elastic.
    I have mentioned the danger of the country becoming divided into two. Whether we are shouldering the defense burdens or later when the Chancellor can offer some relief, we must be sure the nation is one. The most powerful weapon to ensure this is the budgetary policy.
    8.32 p.m.
    Mr. John Rankin: I am sure that the hon. Member for Westmorland (Mr. Vane) will not expect

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    me to treat very seriously the argument which he advanced about first-class travel. One has only to think of the number of people who can possibly engage in that type of travel to realise how trivial his argument is.
    I should like to refer to a viewpoint which was the basis of the argument put to the Committee by the hon. Member for Croydon, East (Sir H. Williams). I am sorry that he is no longer in his place. He advanced the view that one of the crippling factors in retarding development in the country was lack of capital. He welcomed the investment allowance, as I think those who sit with me on these benches also do.
    I find the speech of the hon. Member for Croydon, East hard to reconcile with certain things that have taken place in the investment world quite recently. Imperial Chemical Industries went to the lending public a few days ago for £30 million of investment capital. Within 10 hours, that £30 million was over-subscribed 10 times by the people who are said to be short of capital. In other words, I.C.I, asked for £30 million of new capital, and within 10 hours they were offered £300 million. I find that fact hard to reconcile with the shortage of capital which the hon. Member for Croydon, East deplored.
    I also find the argument about shortage of capital difficult to reconcile with much that is going on in recent declarations of profits, as, for example, by Vauxhall Motors, Ltd. Last week, the Vauxhall Motor Company declared a bigger gross profit than ever before in its history. Just two years ago—on 14th June—a shareholder of one of our great aircraft companies could have gone to bed carrying with him, metaphorically, a 5s. ordinary share. In the morning that 5s. had become £1. Evidently the days of miracles are not yet past. I notice that the Economic Secretary to the Treasury shakes his head in the wrong way. I presume that he does not agree with what I am saying, but it was published in the "Financial Times," whose editor used to be a leading ornament of the present Government when in Opposition.
    Mr. Maudling: Does the hon. Gentleman really mean that there were shareholders who awakened in the morning four times as rich as the night before?
    Mr. Rankin: If one goes to bed with a 5s. share and in the morning it has become £1 that, to the ordinary person, means that he has gained wealth.
    Mr. Maudling: The question is what the ordinary person could sell the share for—whatever its nominal value.
    Mr. Rankin: I am sorry that I cannot quote offhand the market value of the shares in the aircraft companies. When we take the general rate of dividend, running at about 17½per cent., 20 per cent. —in the case of the company to which I have referred it threatened to be 40 per cent, in that year—we shall not, I hope, quarrel about the market value of aircraft shares.
    I am sorry that the hon. Member for Hallam (Sir R. Jennings) has left his place. After hearing him talk about the Assistance Board, I am perfectly convinced that he represents a division entirely different in character from mine. He does not know anything about the workings of the Assistance Board. He does not realise that if there is any criticism that many on this side have to make of the Assistance Board it is that it is far too harsh and penurious in its attitude to the individual applying to it. I have had innumerable cases of that.
    Not a penny passes over the counter that is not looked at twice. Every transaction, every payment made by the area manager has to be justified to the regional officer. In addition, at any moment without warning the auditors from the regional office may step into the area board offices and ask the area manager to justify any single payment that he may have made that day, that week or at any period since the previous visit. The area boards are closely supervised in their operations. The Economic Secretary knows perfectly well that there is no particular call for any investigation —any May Committee—into the transactions of the Assistance Board at present. I would rather see a little more flexibility than a tightening up in the operations of the local offices at the area level.
    Mr. Bence: Has my hon. Friend had any cases where local offices have made clothing grants to people applying for assistance and have then forced them to pay back the money at so much a week?
    Mr. Rankin: I have often had cases of that kind.
    Mr. H. A. Price: Were they supplied with kilts?
    Mr. Rankin: I hope that I am not immune to humour, but to those who apply for assistance this is not a very humorous subject. Every time they get a little clothing—and that, unfortunately, is usually only as a result of the intervention of a Member of Parliament or a local councilor—they receive a letter telling them that although they are receiving this grant, in the shape of boots, socks, stockings or overcoats, they must realise that the expenditure involved must be met out of any future moneys which they draw.
    I should like to add my voice to the plea which has been made by so many of my colleagues today on behalf of the old-age and other pensioners. There are three very strong organisations in my area, and I know that in the hearts of their members tonight, and in the hearts of old folk all over the country, there will be a sense not merely of deep disappointment but of frustration. When the industrial worker fails to get what he demands he can do something about it. Machinery has been created for that purpose, and, in the end, if he chooses he can use his industrial might to help him. But the old folk can only plead with us. They have ceased to be of any industrial, account. They can use their votes, but the happenings of yesterday and today seem to indicate that the time for doing that is now much further ahead than many of us had hoped a few days ago.
    Knowing the distress which has entered into most of their homes, I am sure that hon. Members on this side of the Committee, and many hon. Members opposite, in view of the opinions they have expressed, will bring tremendous pressure to bear upon the Government to think once more about this matter. It is merely hiding behind a comfortable hedge to tell us that this matter will be dealt with in the quinquennial review. If one is drawing the miserable pittance that many of these old folk are drawing today, even with the help of the Assistance Board, it is no great comfort to them, in their declining years, to be told, "Just go on starving for a little while longer. We are coming to your aid some day." When? Can the Economic Secretary tell us when the report of the quinquennial review will be completed? Will it be this year, or next year? If we ask the
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    old folk to wait, as we are doing, at least we can in mercy tell them definitely how long they are to be expected to wait.
    I regret that nothing has been done about equal pay. Parliament has expressed its mind on this matter. I know the difficulties of the Chancellor, but, nevertheless, I am sorry that nothing has been done about this problem. We are told it is to be left to some future meeting. We have been told that for years. For years we have been considering it. Surely the time is now ripe for at least the initial action of starting equal pay in the Government service. I hope that during the Budget discussions there will be sufficient pressure on the Government to compel them to think again on this matter.
    The Chancellor is taking shelter behind the fact that the nation is in economic difficulties at present. Before he finished his speech his Budget was being described as a standstill Budget. We could say that the ship of State is hove to, because there are difficult winds blowing. The Chancellor said there were three winds he seemed to feel.
    Mr. Bence: He is in the doldrums.
    Mr. Rankin: I do not know, but may be some day he will be.
    The Chancellor told us that one of the three bad winds was rising Government expenditure. Another bad wind was the problems associated with world trade. There was the bad wind of what, I think he agreed, was a decline in American production. However, he has to set a course somewhere. He cannot lie to all the time. He has to make up his mind what to do. I hope he is not going to describe rising Government expenditure as a bad wind, because the problems allied to that will affect increased production.
    In my constituency, for example, there are engineers, ship workers and dock workers, men who believe in the need for the Health Service that is being deplored by many Members opposite. They are men who believe in the need for more expenditure on the Service. They believe that there should be some protection, through subsidies, against the rising cost of living.
    They are living with their families in houses of the most appalling description and they are being forced by the Government to face an increased demand on

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    their earnings through an increase of 40 per cent, in the rents of the miserable dwellings in which many of them live. If we are to get increased production, it is surely evident that we must keep the minds of these people at peace, keep them happy and see that their housing and living conditions and their wages are all good. If we do not do those things we shall retard the increased production which the Chancellor said was such a dire need.
    The Chancellor referred to the fact that American production was tending to fall. That poses another problem with which the Government have been playing for a long time. The end of 1953 saw America achieving a production such as she had never reached at any period in her history. In our money, she produced £ 130,000 million worth of goods. She had an employed army of 64 million people. She employed so many people and she produced so much wealth that this year she is glutted with it. She finished the year with £ 2,000 million worth of wheat unsold.
    This is happening as a result of policy. It is happening because we are piling up wealth in the West and are not distributing it throughout the world. We are restricting the channels of distribution while, at the same time, the granaries of the West are overflowing with wealth of which we cannot dispose. As the Economic Secretary knows, this will affect the economy of this country. Last year, we sent to America about £ 450 million worth of goods as exports. If the American recession develops, as the Chancellor seemed to infer that it might, we shall lose from our exports to the West a large part of that £450 million.
    I agree that the situation is serious, but it can be remedied by an alteration in Government policy. The Chancellor has just as big a stake as anyone else in doing that. If we can get a freer flow of trade, then I am certain that we shall improve the economic condition not merely of this country but of the entire world and we shall make it easier for the Government to meet the legitimate demands of the old-age pensioners and of those who believe, as I think most hon. Members now believe, in the principle of equal pay for equal work.
    I should like to say "Thank you" to the Government for one thing. I am not
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    going to speak too long because I have been here since 2.20 p.m. I am thirsty and hungry and that will prevent me from making a speech in any way equal in length to that made by the Chancellor. But I want to close with this word of thanks. The Economic Secretary will remember that last June the Chancellor promised to many of us, who were then and had been for a long time advocating a reduction in the cinema tax, that the cinema industry would be the first in the queue for consideration this year. I thank him for keeping his word. We appreciate what he has done, though it has not been so much as we had hoped it would be.
    We felt that £7 million was the least sum that was necessary to put the industry on its feet, and the Chancellor has given us £3½ million for which, of course, we are grateful. I would say, with respect, that when we come to the Finance Bill I hope that the Chancellor will give consideration to a revision of the application of the £3½ million. I should like to draw the attention of the Economic Secretary to the incidence of the tax as shown in the White Paper.
    I agree with the hon. Member for Westmorland (Mr. Vane) that we do not want to help two classes. We want to help one class—the working-class to which everyone should belong. But here Chancellor is creating two classes, because on the payments of admission from 10d. to Is. 9d. he is giving a reduction of ½d.; from Is. lOd. to 2s. a reduction of ¾d.; from 2s. to 2s. 6d. a reduction of Id.; and from 3s. 2d. upwards a reduction of 1½d. In other words, the small cinemas in the small towns to which most of the working people go and the cheaper seats in the cinemas in the larger towns to which again most of them go, are the seats which will get the smallest rebate in tax, and the costly seats of 3s. 2d. and upwards are the seats which will get the big rebate in duty, if l½d. can be called a big rebate.
    I would, in conclusion, make the suggestion to the Economic Secretary—and I hope that he will convey it to the Chancellor—that a 1d. reduction hi Duty should apply to all seats from 10d. to 2s. 6d. I think that could be achieved without any great increase in the very welcome £3½ million which he has devoted to the industry. That is my suggestion, and I hope that it will not

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    be without some help so far as the problems of an important section of the community are concerned.
    If the Chancellor and the Government are prepared to look at the general solution along the lines that I have indicated—lines that will enable trade to flow more fully and freely throughout the world and will improve relationships among countries and peoples—they will be able to carry out these steps of social reform, of raising the status of, and payments to, old-age pensioners, and of introducing the principle of equal pay for equal work. They will be able to do these things if they agree to carry out a policy which creates the economic basis on which those social changes can be effected.
    9.1 p.m.
    Mr. Anthony Barber: It has always seemed to me somewhat futile that one should speak on the same day the Chancellor of the Exchequer has delivered his Budget and before one has had an opportunity of reading and digesting his statement and general survey of the economic situation. I certainly had no intention until about an hour ago of speaking this evening. There are, however, one or two aspects of my right hon. Friend's statement which seem to me to be of considerable importance and on which I should like to touch.
    Two aspects of his statement which are of vital significance: first, the fact that if we are to improve the standard of living of our people, we must increase industrial productivity; and second, that if we are to increase the standard of living—I believe that, ultimately, we can do that only by a considerable reduction in taxation—we must direct our minds to the present high level of Government expenditure. I am fully aware of the difficulties, but I should like to touch on these two points.
    No one in the Committee would disagree that productivity depends largely upon the efficiency of industry, which in turn depends to a great extent upon the capital equipment with which working men and women have to carry out their daily tasks. My right hon. Friend has done a great deal to encourage the re-equipment of industry by his introduction of what he has termed investment allowances.
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    I was a little surprised when the hon. Lady the Member for Flint, East (Mrs. White) said that there was nothing of major interest in the Budget. I have every sympathy with hon. Members on both sides who would like, if it were possible, to see an increase in old-age pensions, and I fully appreciate the sentiments of the hon. Member for Trades ton (Mr. Rankin), but it is neither fair nor right to say that the Budget contains nothing of major importance.
    It was indicated by the Chancellor of the Exchequer this afternoon that the old system of granting initial and annual allowances was, perhaps, somewhat defective in that the initial allowance was in effect merely a tax-free loan to the industry concerned. But now industry is to have an investment allowance of 20 per cent, in respect of plant and machinery and 10 per cent, in respect of industrial buildings. In addition to the new investment allowance—and I think it is vital that those in industry should know and appreciate the full significance of what the Chancellor is doing—a business will be entitled to annual allowances on the full capital expenditure that is involved, and not merely on the balance after taking into account the new investment allowances. I believe this will do a considerable amount of good, because re-equipment in industry breeds efficiency, and the system which the Chancellor has announced today gives immediate financial reward and is directly related to the efforts of any particular factory or works to increase efficiency and so productivity.
    I believe that the new investment allowances will be welcomed not only by those directly concerned, but by all those people throughout the country who think seriously of these matters, because it must be apparent to any one who has directed his mind to this sort of thing that the welfare of any individual citizen depends upon our ability to produce goods cheaply and efficiently and to compete successfully with countries like Western Germany and Japan.
    Another matter to which the Chancellor directed his attention was the position of small private companies and family businesses. It may not be true to say that the small family business is the backbone of our economy, but it is certainly true to say that it constitutes

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    a vital limb. The death of a shareholder of one of these small family businesses, on which we rely so much, often leads to serious trouble. If Estate Duty has been assessed, on the valuation of the deceased's shares, on an asset basis, the Estate Duty payable frequently bears no relation whatsoever to the value of those shares in the open market. The result is that, in many cases, a prudent man decides to make provision for the Estate Duty exigible in respect of his shareholding in the family business, and can only do that at the expense of the re-equipment of that business. I might add that one of the shocking things about this particular system is that nobody knows until the man has died whether or not the Estate Duty Office are going to value the deceased shares on an assets basis or on the normal basis of what they would fetch in the open market.
    I should like to make a suggestion to the Chancellor of the Exchequer, of which I hope he will take notice, because it is a matter of great practicable importance. It is that when there has to be a valuation of shares for Estate Duty purposes there should be some provision, in the event of a dispute between the executors or administrators, on the one hand, and the Estate Duty Office, on the other, for a cheaper form of appeal. At present, in the event of a disagreement, it frequently happens that the only remedy open to the deceased's personal representatives is an appeal to the High Court.
    If the deceased were a wealthy man the estate might well make it worth the while of the personal representatives to appeal to the High Court. On the other hand, it places the personal representatives of small estates in an extreme difficulty. They have to ask themselves, "What shall we do? If we appeal to the High Court and lose we will have to pay the costs of the Crown." The thought of that potential burden has deterred many from going to the High Court because the estate is so small that they dare not risk the cost.
    I would suggest that the system which operates in respect of Income Tax, Surtax and Profits Tax should operate here. In those cases an appeal can be made to a most efficient body, the Special Commissioners, and justice is done with expedition, efficiency and cheaply. I
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    would suggest in the case of valuation of shares, and indeed other property, for Estate Duty purposes that it ought to be possible, at any rate in respect of small estates of say £10,000, to appeal to somebody like the Special Commissioners, or perhaps the Special Commissioners themselves, who would do the job extremely well, and ensure that justice was done both quickly and cheaply. I throw out the suggestion for the consideration of the Chancellor, and I hope that, if not on this occasion, it may be possible on some future occasion to insert a Clause in the Finance Bill to give effect to it.
    The other major aspect of the speech of my right hon. Friend which struck me forcibly was the high level of Government expenditure. I should be one of the last persons to ask the Chancellor not to fulfill this country's obligations to our allies in the sphere of defense, or to our own people in the sphere of social services. I do not propose to follow my hon. Friend the Member for Sheffield, Hal-lam (Sir R. Jennings) in giving examples such as those which he gave about the cost of trombones for use in schools, but I feel strongly that some intensive effort should be made in the coming year to ensure that we are not wasting money in the public services.
    This year the Estimates are up by about £12 million, and I sincerely believe that this cannot go on for ever. I know the difficulties, and I am sure that the Chancellor would be the first man who would be delighted if he could save money somewhere. If it is not possible for the Departments, at the instigation of my right hon. Friend, to cut down their Estimates and, particularly, their administrative costs, I hope that the Chancellor and the Government will not exclude altogether from consideration the possibility of an independent inquiry consisting perhaps of men with long public service and with business experience.
    Finally, I cannot believe that any hon. Member of this Committee can say honestly that he is not, in general, reasonably satisfied with the progress made by this country during the past financial year. Great credit in this regard is due to the Chancellor and to those who work with him. Perhaps I may be permitted to quote one or two figures which were given recently by my hon. Friend the

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    Economic Secretary, and which I think are extremely significant.
    In 1951 wages rose by 12 points while prices rose by 14 points. That was the year when we took office. In the next year, 1952, both wages and prices rose by about the same amount. In 1953 wages rose four points, but prices rose by only two points. Nobody can deny those figures, and the basis on which they are calculated is the same basis as that accepted by the previous Government. Whatever hopes we in this Committee may have of improving the lot of those people who are finding it extremely difficult to live on meagre fixed incomes, the fact remains that in general through out the country we have been successful in slowing up the rise in the cost of living.
    Last year productivity was up, employment was up and food consumption was up. I have every confidence that in the coming year, as in the past two and a half years, we shall continue to make steady progress towards that complete recovery which all of us desire.
    9.14 p.m.
    Mr. William Keenan: I have listened to so many speeches that I feel rather confused as to which hon. Member I ought to refer before I go on to say what I think of this "wonderful" Budget. I would point out to the hon. Member for Doncaster (Mr. Barber), who had something to say about prices, that the change in the cost of living has been so great that wages have been increased in almost every industry in recent years, and there is still a demand for higher wages.
    Mr. Barber: The only point that I was making, and I assume that the hon. Member is not denying this, was that last year wages rose by four points but prices rose by only two points. I assume that the hon. Member is not denying it, because those figures have a basis which has been agreed between both sides of the Committee.
    Mr. Keenan: I am not denying the fact that index figures record certain things, but my point is that the ranges of articles in the retail price figures include coats of all kinds, television sets, and so on. Clothing is included, and so are household goods and beer and tobacco.
    Mr. Maudling: The figures which my hon. Friend the Member for Doncaster (Mr. Barber) was quoting, as is well known to the Committee, are based on the normal expenditure of working-class houses, as revealed by a very large number of statistical observations.
    Mr. Keenan: They are not based on that at all. The hon. Gentleman need not "come that" on me. The Interim Index of Retail Prices includes many things that are luxuries to most families.
    Mr. Maudling: The hon. Member is completely confusing two quite distinct indices.
    Mr. Keenan: I am not confusing any thing. I am dealing with index figures which include clothing, drink and tobacco and those kind of things. I said to the hon. Member for Doncaster that workers in every industry not only demanded higher wages in the past, but are still demanding those wages and that that indicates the great changes that have occurred in the last year or more. The hon. Member said that we were eating more food. The fact is that we are eating less and paying more.
    Mr. Maudling: I am sorry, but I really must point out that the figures that have been published by the Government show precisely the opposite of what the hon. Member is saying. The figures in the Economic Survey show that more money was spent on more food last year than in any year since the war.
    Mr. Keenan: I think the hon. Gentleman is wrong. It is true that considerably more money was spent, but less food was actually bought. Whether it was consumed or not, I do not know.
    I am sorry that I did riot have the opportunity of interrupting an hon. Member who spoke two hours or more ago, so long ago that I have forgotten his name. He was advancing the old cry of, "Let us have more assistance from the Government for private education." We have heard that cry in previous Budget debates. He was grumbling because when somebody is sent to a private school, usually because his parents prefer that he should go there, the Government make no tax concession for that purpose.
    All Governments have done jolly well for education on the higher levels. A

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    few weeks ago I pointed out that the Government pay between 60 per cent, and 70 per cent, by way of grants towards the cost of university education, even in Oxford and Cambridge. In the case of Oxford 56 per cent, of costs are paid in grants and, in the case of Cambridge, 49 per cent. I think the Government do well for people who can afford fees in those places. They worry about that, but do nothing for old-age pensioners.
    A lot has been said about post-war credits. I think there is still time for the Government to have second thoughts about that question. A Measure could be introduced to effect changes in the distribution of post-war credits. I suggest that the Chancellor has time in which to consider the desirability of making a change similar to that which I tried to get Chancellors of the Exchequer to make from 1946 onwards—to lower the age each year.
    As hon. Members have said over and over again today, whatever else is done with post-war credits, instead of waiting until the individual who has died would have reached the qualifying age, the desirable thing to do is to pay the amount on death. That would get over the great disappointment caused by previous Governments. I was always disappointed that the previous Government did not do something about it. The payment could start at age 64 and could be made lower each year. It would cost only £17 million or £18 million in any one year.
    A large number of hon. Members have been very worried about there not being a reduction in Income Tax. I did not expect it. I knew from the figures we had that the Chancellor was not in a position to do much in that direction, but I think we can justifiably say that the sections of the community which have been well treated by the Chancellor will still benefit. Although we talk about increased productivity, when we read company meeting reports we find that dividends are still too high. I noticed in the Financial Statement that the Exchequer receipts from Surtax have been £5 million over the estimate. That does not indicate that dividends are down. It is costing a little more to die because the figure for Death Duties is up by £4½ million.
    Yesterday the Minister of Pensions and National Insurance was asked what it
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    would cost to increase old-age pensions. I think something should be done in this matter, not because the Government are generous or considerate but because the situation demands an increase in basic pensions, no matter how small that increase may be. If we had an increase in basic pensions of 5s. a week it would not cost more than about £60 million and would affect between 4¼ million and 4¼ million pensioners.
    I wish to draw the attention of the Committee to an incorrect statement made by the Parliamentary Secretary to the Ministry of Pensions and National Insurance during Question time yesterday, when he was asked if he would state the basis on which he calculated that a basic retirement pension rate of £2 10s. a week would cost £570 million. I remember arguing this matter with officials of old-age pensioners' organisations and calculating what it would cost. It appeared to me that if their demands were met it would mean an average increase of £1 per week above the present figure. That does not amount to £570 million. It is about £270 million.
    It emerged from Questions asked yesterday that there are 2½million persons in this country of a pensionable age who have no claim to a pension. There are fewer than 4½ million contributory and non-contributory pensioners and, in addition, we have these 2½ million people who have no claim to a pension, but who are probably well provided for. We should remember that when we are discussing the difficulties resulting from an ageing population. In 20 years' time the problem will be twice as great as now. Already, there are 2½million people who are much better off than the old-age pensioners for whom we are pleading.
    Mr. G. Thomas: Is my hon. Friend aware that when the Minister of National Insurance tells us how much old-age pensions cost and how much they will cost in 25 years' time he invariably speaks as though every person of a pensionable age would be receiving a pension? Therefore, his figures are grossly inflated.
    Mr. Keenan: I accept that. As a matter of fact, it appears to me that the officials of the Ministry of Labour and National Service cannot count. I was invited by the Parliamentary Secretary

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    to bring my figures to the Ministry so that it could add them up for me, because it was suggested that I could not count. I dispute that, but it seems to me that the officials in that Ministry are unable to count. Nothing has been done for the old-age pensioners. I remember that we voiced the same complaint at the beginning of this Parliament. If the Government had agreed to do something for the pensioners it would have been about September before anything could have been put through. By the time that a new Bill had been introduced and the Ministry had been able to change the pension books, it would have been next September before new rates could have been put into effect.
    As the Government have no intention of doing anything, the pensioners can resign themselves to the fact that what they get now they will get for the next 12 months or more. That is the position. Most hon. Members opposite have wives, just as we have. Any man whose wife does the shopping knows perfectly well that the actual cost of food has increased in the last year by about 25 per cent. I know that my wife has had to have a lot more from me than she used to get for household purposes. I am sure that the Economic Secretary, if he has a wife — and I daresay he has from the way in which he seems to be enjoying what I am saying— is in the same position.
    The fact is that the pensioner is not able to find the extra money as some of us have been able to find it. Only about a million pensioners get supplementation. The reason is that they still suspect what the hon. Member for Hallam (Sir R. Jennings) was talking about a few hours ago. He complained that the National Assistance Board was too generous or that it did not make sufficient inquiry and allowed people to get money on loan. Back to the Board of Guardians and the Poor Law was his idea. I am afraid that that point of view expresses the obvious satisfaction— at least there is no dissatisfaction— that nothing has been done for the pensioners.
    That alone is an indication of what is thought by hon. Gentleman opposite about the conditions of old people. I have been closely associated with the old-age pensioners organisations. I know the tragedy and hardships which have been inflicted on them by the increased cost of living. Nothing has been done
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    for them and it does not look as if any-think will be done for a long time.
    I was surprised that the hon. Member for Croydon, East (Sir H. Williams) failed to talk about the National Debt. He is not here now, but we could hardly expect him to wait so long to hear criticism of what he said. I want to say something about the National Debt because it has always worried me. The interest on the National Debt has climbed to over £600 million a year. That is more than we pay to the old-age pensioners on contributory and non-contributory pensions. That is something we shall have to look at one day. I am not suggesting that we should repudiate the National Debt. I see hon. Gentlemen on the Treasury Bench smiling at me, but they know that what I am saying is true.
    The interest rates on the Debt are considerably higher this year than they were before. The Debt is now standing at about £26,500,000 and the interest is more than £60 million a year. I remember that Mr. Chamberlain, when he was Chancellor of the Exchequer, did something towards reducing the rates of interest upon the Debt. We are not far away from the time when something of that sort will have to be done again. We have to pay interest on the Debt for services and wars that took place 100 and more years ago, yet we cannot adequately look after 4½ million of our old people who have served the nation in their younger days. There is something wrong with our administration. In spite of a Budget of this size, we cannot pay more to the old-age pensioners than 32s. 6d. per week for a single person and 54s. per couple. It is time something was done about it.
    I remember Mr. James Maxton being told, during the War, that members of the Government, including the present Prime Minister, had been sent to Parliament to do a job for the workers. He asked the Government to do something for the old-age pensioners and said "We shall never get a chance again. If we do not take action now, a force greater than ourselves will come along and do it for us."
    People will not tolerate the present position indefinitely. If we cease to make progress I believe that a force greater than either side of this House will cause something to be done better than it has been done before.
    9.38 p.m.
    Mr. H. A. Price: Before I say a few words which I have prepared for this meeting of the Committee, I would like to comment on the speech to which we have just listened from the hon. Member for Kirkdale (Mr. Keenan). He referred to the quantity of food consumed in this country during 1953 and said that we had paid more for less food. The hon. Member will find the answer to that statement on page 21 of the Economic Survey, a copy of which I happened to have with me. I will read out what it says.
    "The volume of food consumption rose in total by 4½ per cent. More meat, bacon, sugar, fats, cheese and fruit were eaten than in the previous year and less of most of the starchy foods."
    Might I emphasise that? We ate more meat, bacon, sugar, cheese, fat and fruit and less of the starchy foods. In other words, we have moved further away from the bread-and-potato economy of the Socialist Administration and more towards the meat-fruit-egg-milk-protein economy in which we believe. If the hon. Member cares to see the analysis, he will find the table immediately underneath.
    Converted into terms of calorie intake, in 1953 the calorie intake per day per person was 3,030, an improvement of 80 calories per day over 1952 and an improvement of 30 calories per day even on the pre-war average. In other words, in 1953 the average calory intake was 30 points up on our pre-war diet. I think that effectively disposes of the hon. Member's comments on that aspect.
    Mr. Keenan: Am I right in saying that the actual cost of that increased food is something like 5 or 6 per cent.?
    Mr. Price: So far I have not dealt with the hon. Member's remarks about the costs but have confined myself to his remarks about quantity. I am trying to dispose of his statement that we had less food. I think that I have been successful.
    I want now to refer to the hon. Member's comments about the old-age pensioner. I entirely agree with everything that has been said about the almost unanimous wish in this House that the Chancellor had found it possible to do something for the old-age pensioner. But there is another side to it. First of all, even the old-age pensioner is better off for food today than under the late Administration in 1951.
    Mr. Keenan: They have not the money to buy it.
    Mr. Price: The B.M.A. has a formula based on calorie intake. A report was published not long ago. I do not have it with me. but it is probably obtainable in the Library, and I can remember the figures. The figures were that in the months of January and February, 1951, under a Socialist Administration, the old-age pensioner's daily calorie intake was 7 per cent, below the minimum requirements. In 1952, under this Administration, his daily calorie intake was equal to his minimum requirements, and in 1953— again under this Administration— it was 4 per cent, above his minimum requirements. Quite conclusive proof, I think, of the justification for the statement I made a little while ago.
    No one pretends that the old-age pensioner is living in luxury. He never could and never will. But I would take much more kindly to the campaign being waged on this issue from the benches opposite if hon. Members had raised a similar campaign during the years 1946 to 1951. I wonder how many of them during those years made the type of speech to which we have just listened? During those years, under their Administration, the cost of living rose by 40 per cent, and the cost of food by 60 per cent. The old-age pension rose not at all.
    Mr. Stephen Swingler: That is absolutely fantastic.
    Mr. Price: Perhaps the hon. Member will allow me— I have not finished. In 1946 old-age pensions were fixed at 26s. for a single person. They did not go up until after the date of the last General Election had been fixed. Does anyone want to challenge that? No, I thought not.
    Mr. Swingler: I am not challenging that, but I should like to point out to the hon. Gentleman— who had the impudence to say that the pension did not go up under the Labour Government and that hon. Members on this side did not campaign for it— that in the first 12 months of our Socialist Administration there was a tremendous agitation— almost exclusively from Members on this side— which resulted in this more than 100 per cent, increase in these pensions.
    Mr. Price: I remember the details of that, too. I remember that the previous Administration had fixed an increase, I think to 20s., and it fell to the Socialist Administration to implement it in 1946. It is to that period from 1946 to 1951— five years— that I am referring. If the hon. Gentleman looks at HANSARD tomorrow he will see that I said "from 1946 to 1951." In that period the cost of living rose by 40 per cent. and the cost of food by 60 per cent. I did not hear that kind of speech then. Had they made that type of speech then I should have listened with more sympathy to the speeches they have made tonight. Unfortunately, they are using the old-age pensioner argument as a political weapon, to serve their own political ends, and it reflects discredit upon them, but that is a matter for their own consciences.
    A Budget speech from the Chancellor is rather similar to the "State of the Nation" speech of the President of the United States. I think we all have reason to express sober pleasure at the results of the past year, and sober confidence at the prospects for the forthcoming year, as a result of the Chancellor's speech, In the few comments he made, the Leader of the Opposition uttered a moderate warning note, with which I do not quarrel: I think he was quite right to do so. If no other right hon. or hon. Member opposite does more than that during this debate, I shall be very pleased, but I do not expect it. I have a shrewd suspicion that in this respect at any rate, the debate will follow the form it has followed in the last two years, and that hon. Members opposite will try to discredit the progress we have made, purely because they do not want this Government to take too much credit for it.
    Before they do so, I should like to quote from a purely independent source, the Report of O.E.E.C., published about three months ago. That Report said:
    "There has been appreciable progress towards balance of payments equilibrium after the unmanageable deficits incurred in 1951."
    There are two phrases which I want to stress— first, the "appreciable progress," for which I hope we shall all take credit, and, secondly, the "unmanageable deficits." When I listen to financial, economic and Budget debates, I cannot forget those unmanageable deficits of 1951, or that the Members of the Administration which incurred them are now
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    telling us, the Members of the Administration which have managed them, that we do not know the answers and they do. They must forgive me if I accept that argument with a little incredulity. The evidence is against them. It was they who incurred the unmanageable deficits, and we who were called upon to manage them, and the Report of O.E.E.C. pays a tribute to the way in which we have done so.
    I want to underline that by quoting the words of a noble Lord who was once a Socialist Minister. On 29th April last year, in another place, he said:
    "… today the pound sterling stands, in exchange with the dollar, close to the upper limit of the gold points, and therefore the prospect of sterling holding its own may be regarded as quite satisfactory. These are extremely healthy facts, and they are all of the utmost importance. I say, quite unreservedly, that Mr. Butler and the people of this country are entitled to the highest congratulation. For without such recovery we should have been today in imminent peril of bankruptcy, if not of starvation."— [OFFICIAL REPORT, House of Lords, 29th April, 1953; Vol. 182, c. 59.]
    I suggest that that tribute is fully justified by the results of the past two years. The noble Lord was quite justified in paying tribute to my right hon. Friend and the people of this country, and I wish that more hon. and right hon. Gentlemen opposite could find it possible to do the same.
    That is not all. Mention has been made of the cost of living. I find it very difficult to understand why hon. Members opposite should continue the fairy story that the cost of living is still going up and up. The evidence is all against them. They have only to look at the Official Index of Retail Prices to see that it is not so. They refuse to believe the official cost-of-living index. They are rather like the hypochondriac who is only happy when the thermometer shows that he has a temperature and insists that there must be something wrong with the thermometer if his temperature is shown as normal. That is like hon. and right hon. Gentlemen opposite. The thermometer is the cost-of-living index, and they ought not to try to discredit it, because it is their own index.
    I know the difficulty of hon. Members opposite. It is that they place so much stress on those items that have gone up in price and ignore those items that have gone down. So does the average

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    housewife. I do not blame her in the least. The hon. Gentleman mentioned his wife. I have a wife, too. I get the same complaint from her, and I have to point out to her that when meat was rationed she was limited to spending 8s. 8d. a week on it. Last week she spent 13s—.
    Mr. Keenan: She is better off than I am.
    Mr. Price: —not because meat is any dearer, but because she can now buy much more than she could before. That is the problem with which hon. and right hon. Gentlemen opposite are faced. There are many articles that have gone down in price, many articles of food, most articles of clothing, everything subject to Purchase Tax, and many household goods. I have a list here.
    Mr. Keenan: Will the hon. Gentleman tell us what food prices have gone down?
    Mr. Price: Yes. I will not bore the Committee with the whole of my list, but here are some commodities that went down in price during 1953. Bacon, cheese —
    Mr. Keenan: Gone down?
    Mr. Price: During 1953, yes. Shredded suet, canned fruits, pepper, stewed steak and luncheon meat in tins, boiled gammon, kippers —I am not aware that they went down in our Tea Room, but they went down outside —and slab cake. There are a few examples.
    Mr. Keenan: Old-age pensioners cannot afford all those.
    Mr. Price: I imagine that old-age pensioners eat, and that they eat some of those items of food. Other things that have gone down in price are linen, furniture, curtain materials, sheets, pillow cases, hand towels, bath towels, table cloths, tea cloths. Old-age pensioners wash and wash up, do they not? Men's, women's and children's clothing all went down in 1953; men's suits, pyjamas, nightdresses, sports trousers, slippers. Even ladies' vests and nylon slips came down in price in 1953; and of household goods, saucepans, soap, talculm powder and many other toilet articles. These all came down in 1953.
    While some articles went up in price the net result is that the cost of living
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    has remained remarkably steady, in a way we have not witnessed since before the war, and I think we are entitled to take credit for it. I do wish sincerely that hon. and right hon. Gentlemen opposite would treat this matter with greater political honesty. Let them make their valid arguments, by all means, but let them face the facts.
    Now a word about the future. To hold the cost of living steady is very satisfactory. To bring it down will be even more satisfactory. I suggest to those who are disappointed, as I am, that the old-age pension has not gone up that there is another solution to that problem. The hon. Lady the Member for Flint, East (Mrs. White) suggested that for a married couple the old-age pension ought to go up from 54s. to 60s. to compensate them for the increase in the cost of living since the present Government came into office. I believe that it would be possible to increase the value of the existing old-age pension to the same extent if we could solve some of the problems of productivity.
    Here I propose to ride a favourite hobbyhorse of mine and to tilt at restrictive practices, not only at the workshop level but at all levels. It is customary, when dealing with topics of this kind, for hon. Members opposite to attack the management, the bosses, and to assume, I do not know with what justification, that we on this side think in critical terms only of the workers. That certainly does not apply to me. I am conscious of the restrictive practices all round.
    May I mention two kinds of restrictive practice in order to show the Committee how my mind is working? I am a victim of one form of restrictive practice. In private life I am a paper merchant, and if I want to buy a certain kind of paper and go to any of ten or a dozen mills in this country, they all quote me the same price, no matter how eager one or more of them may be to quote a lower price.
    Similarly, having bought the paper and ordered it to my customer, I have to put on a controlled margin of profit, the margin being 6 ¼ per cent, for lots of one ton. No matter how willing I may be to put only 5 per cent, on, I dare not do so — I must put on 6 ¼ per cent. If I put on less and it became known, I should be in danger of being blacklisted, and all

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    the mills concerned would be forbidden to supply me with that type of paper in future. If that process continued, I should eventually be forced out of business. This is the kind of restrictive practice which I have in mind at one end of the scale and it is making no contribution whatever to the solution of the problem of the cost of living. It is ruling out competition and it is not my idea of private enterprise.
    At the other end of the scale there are restrictive practices on the workshop level. We all know examples of this. The latest example which I read in the Press was of a woman who was penalised by her union for making 93 cushions in a day instead of 40. But let us remember that for every example of which we learn, as a result of such a disclosure in the national Press, there are thousands and possibly hundreds of thousands of similar examples of which we never learn because the workpeople dare not contravene these rules. They are held down to something below their maximum output for fear of being penalised. That makes no contribution to the solution of the problem of the cost of living.
    I am quite certain that if we could solve that kind of problem we could bring the cost of living down by at least 10 per cent., which would be quite sufficient to solve the problem of the old age pensioners without increasing their pensions. Not only would it help in that direction but it would also assist us to compete with other countries, such as Germany and Japan, in our overseas markets. It would solve both problems at the same time.
    I know it is not easy to deal with this kind of problem and I do not suggest that it can be dealt with by legislation, but it is a problem which we must face if we are to overcome all the other problems which beset us. Somehow or other we must get rid of this mentality of the 1930s, as I believe it is; for all these things are a legacy of the mentality bred during those years when work was scarce and therefore had to be rationed. That mentality is out of date. It has no place in the economy of the 1950s. We can beat Germany and Japan and every one else if we can use both hands, but to try to beat them with one hand tied
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    behind our backs, which is what we are doing now, is folly of the first water. Solve that problem and all the rest, or most of the rest, will fall into place.
    Whereupon, Motion made and Question, "That the Chairman do report Progress and ask leave to sit again," —[Mr. Kaberry] —put, and agreed to.
    Resolutions to be reported Tomorrow; Committee also report Progress; to sit again Tomorrow.

  NATIONAL COAL BOARD (EX-EMPLOYEE)
  Motion made, and Question proposed, "That this House do now adjourn." —[Mr. Kaberry.]
  10.1 p.m.
  Mr. William Hamilton: I apologise to the Parliamentary Secretary for keeping him waiting all day for this Adjournment debate, but this case concerns a Mr. R. W. Simpson, of Glenrothes, for whom this debate will be more important than the Budget debate which has just been adjourned.
  Mr. Simpson is a comparatively young man, in his early 40s. In 1949, he got a first-class mine manager's certificate. I should like to run very quickly through the events that have taken place since then which have now placed him in the position of being unable, although he has this certificate, to get a job in the coal mining industry, although he lives in one of the most important coalfields in the whole of Britain.
  Subsequently to getting his certificate, in 1949, he was appointed a training officer at the Valleyfield Colliery, in Fife, and there he became responsible for dust suppression work, in which he was keenly interested, and in which, he tells me, he did very good work. I should say that all the information I have on this case is from Mr. Simpson himself, and it may well be a one-sided story. I have not heard the other side, but perhaps the Minister may be able to provide more information than I have.
  In 1951, after Mr. Simpson had held this job for some time, the colliery manager, Mr. McAllister, was promoted agent in the East of Fife and later, in 1951, Mr. Simpson was transferred to die same area, where he again became a dust suppression officer. In July, 1952, he had added to

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  his duties those of control and supervision of shot-firing and explosives in the mine in East Fife.
  In August, 1952, Mr. Simpson was invited by the agent to take charge of the development of a new section which required to be speeded up, and Mr. Simpson tells me that the work there went ahead after he was invited to take charge of it. In October, 1952, he again returned to his duties as a dust suppression officer. It seems to me from that story to date that Mr. Simpson had evidently given some satisfaction; indeed, there is no evidence of any complaint having been made against him up to that time.
  In March, 1953, he was appointed by the agent as the group dust suppression officer for two collieries, Michael and Lochhead, in East Fife, where his duties were to be of a supervisory nature. Mr. Simpson is a man of not too strong physique, and it was understood by the agent that he would not be involved in any work requiring lifting and that kind of thing.
  Two days after his appointment to that work, Mr. McAllister, the agent, was given further promotion to be area production efficiency engineer, and a Mr. Finnie replaced Mr. McAllister as agent. Mr. Simpson alleges that the new agent was not an enthusiastic supporter of dust suppression, and, to cut a long story short, there was very little co-operation by Mr. Finnie in giving Mr. Simpson the necessary workers to transport the water pipes which are evidently necessary for dust suppression work. Simpson, rightly or wrongly, reported this lack of co-operation, so he thought, on Mr. Finnie's part to the area safety engineer, who wrote to the manager pointing out that Simpson was getting little co-operation from the agent.
  Subsequently, word got back to the manager that Simpson had sent the letter. He was called to the manager's office and it was quite clear that both the manager and the agent were annoyed that he had written complaining of their non-co-operation on dust suppression. Simpson was then ordered to do laboring work, although physically he was quite unfitted for it. He protested to the agent and was then, I understand, recommended for a course on explosives. Shortly afterwards, he was invited to become an assistant
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  teacher at shot-firing classes in a training centre at Muiredge, near to the collieries concerned.
  Apparently, the agent personally told Simpson to report at these classes for nine o'clock in the morning on Mondays, Tuesdays and Thursdays. Simpson attended the explosives course and expected to be appointed explosives supervisor in the area. Five weeks after commencing the shot-firing classes, Simpson was called to the agent's office and was given his notice.
  Evidently the area production manager, to whom Simpson had written earlier complaining of the non-co-operation in the matter of dust suppression, had written again to Mr. Finnie complaining of the dust suppression measures at the Michael Colliery; and Simpson, rightly or wrongly, was blamed for those defects. His defence was that he had had to attend the shot-firing classes and that another dust suppression officer had been appointed at the colliery where the complaints were being made. Nevertheless, he got 15 days' notice as a result, and no reason was given.
  At that juncture, Simpson wrote to me and I made representation to various quarters. I wrote to the Ministry of Labour in Fife asking for the National Coal Board reasons why Simpson was given his notice. The Ministry refused to give me those reasons. On 24th October, 1953, Simpson was given a clearance certificate which stated that he left of his own accord. He has tried subsequently to get a job at other pits in the area, but with no success.
  On 18th November I wrote to the Scottish Division of the Coal Board, and the chairman told me that the reason why Simpson could not get a job was that he could not start his duties at six o'clock in the morning. Simpson points out that he could not do that because he had been asked by his agent to attend as a teacher at the shot-firing classes at the instruction centre for nine o'clock in the morning. Simpson still maintains that if need be he could start at 6 a.m. In fact, his present job in a linoleum factory in Kirkcaldy involves his starting at 6 a.m. Therefore, that argument does not hold water.
  Having received no satisfaction from the Coal Board in Scotland, I wrote on 11th March, and again on 15th March,

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  to the Coal Board headquarters at Hobart House, London. On 19th March, I had a reply which said that although Simpson had had jobs at Valleyfield, Blairhall and other collieries in the East of Fife, he was not really suitable for the jobs he had held, although so far as I know no complaint was made by these collieries. It also infers that Simpson was not prepared to co-operate fully with the management, and that his poor health was another factor which added to the difficulties.
  Simpson, of course, alleges—and I have no reason to agree or to disagree with the allegation—that he has been victimised. The Scottish Coal Board headquarters deny this, and, in fact, after this whole question had been raised by me here with the Minister and with the Coal Board interesting developments took place. On 25th March Simpson got an invitation from the Scottish Coal Board to apply for a vacancy as warden at the residential training college at Sauchie, in Scotland. In Simpson's view the educational qualifications that were needed for the job were such as to rule him out completely, but Simpson feels, rightly or wrongly, that this invitation was sent out to destroy the argument that he had, in fact, been victimised.
  I appreciate the Minister's courtesy in sending to me the letter that he sent earlier. I realise that he has a limited responsibility in this, but I ask him to consider these points. In the first instance, the Coal Board is continually crying out for men with technical qualifications and experience of all kinds, because there is a dearth of men of that calibre all over the coalfields of this country.
  While it may be that Simpson has been a difficult man in some respects and may be he has not always co-operated— although I must say that co-operation is always a two-way traffic—there may be faults on both sides. In any case, he is a highly qualified man and Fife is a tremendously important mining area. It is one of the most important mining development areas in the whole of the United Kingdom. I myself know Simpson personally, would vouch for his sincerity and would say he is a conscientious worker and an able man with a splendid character.
  I would urge the Minister to use his good offices and the influence which he
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  must have with the Coal Board to get this man a job in the coal industry. It need not necessarily be in Fife. I believe that he is willing to take a job in England, and I would respectfully ask the Parliamentary Secretary to give me a sympathetic reply tonight, because this man and his family are desperately anxious that he should take his place again in the coal industry and help to give the country what it needs.
  10.14 p.m.
  The Parliamentary Secretary to the Ministry of Fuel and Power (Mr. L. W. Joynson-Hicks): I can well appreciate the desire of the hon. Member for Fife, West (Mr. Hamilton) to try to help his friend and constituent whose case he has raised in the House this evening, and I should like, in all sincerity, to express my admiration of the determination with which he has pursued the case of this miner. I am not sure whether he started at pit level, but it went up through the divisional board level to the National Coal Board. Now he has brought it to the national forum.
  One cannot but be impressed with the encouraging way in which this gentleman is so anxious to remain in the coal industry. That is a good sign and one which we have not always seen in the coal industry in the past. There have been times when people have been only too glad to take an opportunity of leaving the industry to seek their fortunes in an alternative form of employment.
  I am anxious to help the hon. Gentleman in any way I can, but my difficulty this evening is to see how I can help him. The responsibility of my right hon. Friend as Minister of Fuel and Power is limited by the statute. One of the things over which he has no direct control given to him by Parliament is the day to day administration of the nationalised industries, one part of which is their staffing arrangements. Indeed, it is difficult to see how it could be otherwise, for the question of the employment and engagement of their staff must inevitably be the responsibility of the employer, who is, in this case, the Coal Board.
  If it gets upon wrong lines there are industrial arrangements by which the matter can be pursued, and the Coal Board is fortunate in having an exceedingly comprehensive system of trade

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  union representation throughout all levels of the employees of the Board. I do not think there can be any difficulty, if a question of employment got upon the wrong lines, in finding a way in which it could be brought by the representatives of the employers and employed to a satisfactory method of negotiation. But that, again, is outside the sphere of my right hon. Friend.
  I have followed closely what the hon. Gentleman said because I wondered whether there had been a case of wrongful dismissal or anything of that sort— but I did not understand from what he said that this was alleged; that there may have been a matter of difference of opinion as to the merits of the decision by the employer in the case, but, clearly, that is not a matter upon which my right hon. Friend could intervene. If there was a case of wrongful dismissal, that could be settled at law, but, there again, that is a different channel from the one which the hon. Gentleman is seeking to follow.
  Then the hon. Gentleman mentioned that he had been in communication with the Chairman of the Divisional Board. That in itself is evidence that at his instigation the case was reviewed by high authority in that area. Not content with that, he had taken it up to the national level as well and the case must evidently have been reviewed by the deputy-chairman—I think he said—of the Coal Board. There, I began to wonder whether there might be a case in which my right hon. Friend could intervene, because he is responsible for the appointments of the Coal Board and the Act has given him power of dismissal of those whom he appoints.
  But the hon. Gentleman made no complaint of the reception which the deputy-chairman had given to his letters, and there is no complaint of the reply which he received. In any case, I do not think that the hon. Gentleman would seek to press my right hon. Friend to use such drastic action as to invoke powers under the Act against a member of the Coal Board in the circumstances of this case.
  Mr. Hamilton: The complaint I make is that the letter I received from the Scottish area was to the effect that the reason why Simpson lost his job was
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  that he could not start at six o'clock. The reason that came from Hobart House—I think I am interpreting aright —was that he had not really been suitable in his previous job. So there seemed to be some kind of attempt to explain away something, which I think smells just a wee bit.
  Mr. Joynson-Hicks: That, of course, is a matter of opinion, but one on which I cannot express any opinion because clearly I have no knowledge of the circumstances which led to the dismissal, if dismissal it was. I understood that a letter which he received indicated that he left of his own accord. Howsoever it may be, that is clearly a matter for the Coal Board to deal with as opposed to its being a matter for the Minister.
  It occurs to me that there is no question here of the gentleman being debarred or victimised—I think was the expression used—to the extent of being unable to seek employment. We heard that he has received the opportunity of applying for a job actually in the same division of the Coal Board. In addition, he has a variety of qualifications. Among other things he is a qualified dust suppression officer, and it occurred to me that when he said that he was employed in the linoleum industry he was probably employed there as a dust suppression officer or in some capacity where he could utilise his knowledge and training in that respect, because that is a dusty industry in which that knowledge might prove useful.
  I understand that he has also acquired some qualifications in shot-firing and the use of explosives. That, again, is an occupation which is by no means limited to the coal mining industry and he might find an outlet for his experience in quarrying or some other industry. My difficulty is that I do not know, and even if I did know I doubt whether it would be within my province to say, why this gentleman was unsuccessful in holding down any of the jobs which he had with the Coal Board.
  It is true that the Board has a very wide need for skilled men but, as the hon. Member indicated, one must realise that the holding of a certificate or any other form of degree or qualification of a technical character by no means necessarily carries with it a qualification of suitability for an executive post. It may

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  be that with the highest qualifications in the world people are not suitable for some kinds of jobs. I do not know, but possibly that applies in this case.
  I do know that the Board is very fully alive to the need to make the best use it possibly can of people with the necessary qualifications. There is a shortage of qualified people and it would be very surprising to me if, with the qualifications which the hon. Member has indicated that this gentleman possesses, the Board should decline to make use of him without some satisfactory reason. The fact that he has now been offered the opportunity of applying for a position as a warden in a training centre rather indicates that that may well be the view of those who are in a superior position and who have to decide the rights and wrongs of people who hold executive positions under them.
  That job, responsible and important as it is, may well not be the type of job which at first sight would appear to be
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  a suitable one for a person carrying the qualifications outlined. On the other hand, it is a job which would enable the gentleman to remain in the industry and also enable him to keep in touch. Possibly, as time goes on, he might find that the experience which he has gained in technical ways might be given an outlet, if not in that division, in some other division of the Board, or in some other industry able to make use of his services.
  I have not been able to assist the hon. Member to any great extent, but I do hope that I have indicated that, as far as lies in our power, there is really nothing we can do. I have every sympathy with him. He has had the opportunity of raising the case in the House. I can only wish him success and good fortune in the task in which he is engaged in trying to help his friend.
  Question put, and agreed to.
  Adjourned accordingly at Twenty-six Minutes past Ten o'clock.

  BRITISH ARMY (PERSONAL CASES)
  BRITISH ARMY (PERSONAL CASES)
TRADE AND COMMERCE
  North-Eastern Development Area
  North-Eastern Development Area
  Canned Meat Imports
  Canned Meat Imports
  Citrus Fruit (Thiourea)
  Citrus Fruit (Thiourea)
  Iron and Steel Producers (Monopolies Commission)
  Iron and Steel Producers (Monopolies Commission)
NATIONAL FINANCE
  Surtax Rate
  Surtax Rate
  Earned Income
  Earned Income
  £ Sterling (Purchasing Power)
  £ Sterling (Purchasing Power)
  Purchase Tax
  Purchase Tax
  Cinema Attendances
  Cinema Attendances
  Shillings, Accrington (Shortage)
  Shillings, Accrington (Shortage)
  Company Receipts (Tax)
  Company Receipts (Tax)
  Post-War Credits
  Post-War Credits
  CIVIL SERVANTS, NORTH WALES (REPOSTING)
  CIVIL SERVANTS, NORTH WALES (REPOSTING)
LOCAL GOVERNMENT
  Water Supplies, Reepham and Hill
  Water Supplies, Reepham and Hill
  Private Streets, Wales (Making Up)
  Private Streets, Wales (Making Up)
  Mayor of Hackney (Pensions Campaign)
  Mayor of Hackney (Pensions Campaign)
HOUSING
  Council Meeting, Wandsworth (Parliamentary Question)
  Council Meeting, Wandsworth (Parliamentary Question)
  Ex-Service Men
  Ex-Service Men
  Harlow
  Harlow
  Statistics
  Statistics
MINISTRY OF WORKS
  Staff
  Staff
  Prefabricated Houses (Tenders)
  Prefabricated Houses (Tenders)
  SHIPBUILDING INDUSTRY (TESTING TANK)
  SHIPBUILDING INDUSTRY (TESTING TANK)
EMPLOYMENT
  Vacancies (Notification)
  Vacancies (Notification)
  Workers (Fatal Accidents)
  Workers (Fatal Accidents)
  Glove Workers, Leicester
  Glove Workers, Leicester
  Highland Counties
  Highland Counties
  Tinplate and Steel Industries, West Wales
  Tinplate and Steel Industries, West Wales
  Dental Technicians
  Dental Technicians
NATIONAL SERVICE
  University Students (Call-up)
  University Students (Call-up)
  Evasion
  Evasion
  COST OF LIVING, SCOTLAND (RENTS AND RATES)
  COST OF LIVING, SCOTLAND (RENTS AND RATES)
  COLONIAL TERRITORIES (IMPRISONED SERVICE MEN)
  COLONIAL TERRITORIES (IMPRISONED SERVICE MEN)
  HELICOPTERS, MALAYA AND KOREA
  HELICOPTERS, MALAYA AND KOREA
  GRADUATE TEACHERS (HONOURS)
  GRADUATE TEACHERS (HONOURS)
  WELFARE FOODS (DISTRIBUTION)
  WELFARE FOODS (DISTRIBUTION)
MINISTRY OF HEALTH
  Water Supplies (Fluoridation)
  Water Supplies (Fluoridation)
  Dental Technicians
  Dental Technicians
  FAMILY ALLOWANCES (PAYMENTS)
  FAMILY ALLOWANCES (PAYMENTS)
SCOTLAND
  Roads, Yell (Making Up)
  Roads, Yell (Making Up)
  Shopping Facilities, East Kilbride
  Shopping Facilities, East Kilbride
  Local Authority Housing Loans (Interest)
  Local Authority Housing Loans (Interest)
MINISTRY OF SUPPLY
  Transport Aircraft (Conversion Cost)
  Transport Aircraft (Conversion Cost)
  Iron and Steel Board (Notices)
  Iron and Steel Board (Notices)

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers

LONDON COUNTY COUNCIL (GENERAL POWERS) BILL [H.L.]
Read 3, and passed, and sent to the Commons.
TEES CONSERVANCY BILL [H.L.]
Read 3, and passed, and sent to the Commons.

PENRHOS TERRITORIAL ARMY CAMP
2.35 p.m.
LORD HAMPTON: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether their attention has been called to a statement in the Army Appropriation Account 1952–53 regarding the expenditure of £93,000 upon the construction of a Territorial Army training camp at Penrhos, and the eventual abandonment of that camp after it became known to the Ministry of Agriculture and other local objectors that a further 11,000 acres would be required for training purposes; whether there had been any consultation between the War Office and the Ministry of Agriculture previous to the construction of this camp; if not, whether, when any future construction of this nature is being considered, every effort will be made by way of pre-consultation with all interests concerned to avoid a like waste of material, effort and money.]
EARL FORTESCUE: My Lords, this statement has already been noted. The establishment of a Territorial Army training camp at Penrhos was agreed in its early stages with the Ministry of Agriculture and Fisheries and previous experience of post-war training in this area
974
did not indicate that difficulties were likely to be encountered over the War Department's training requirements outside the camp. Every effort is made to ensure that any necessary agreement is reached with all interests concerned before expenditure on training camps is authorised.
LORD HAMPTON: I am grateful to the noble Earl for his reply.

SLAUGHTERHOUSES BILL [H.L.]
2.37 p.m.
Order of the Day for the House to he put into Committee read.
Moved, That the House do now resolve itself into Committee.—(Lord Carrington.)
On Question, Motion agreed to.
House in Committee accordingly:
[THE EARL OF DROGHEDA in the Chair]
Clause 1:
Functions of local authorities
1.—(1) Until Parliament otherwise determines, it shall he the duty of every local authority, if and so far as it appears to them that additional slaughterhouse facilities are required in their district having regard to the requirements of persons making use of such facilities, to make such use of their powers under any enactment or statutory order as they think expedient for securing the provision of the facilities required.
(2) It is hereby declared that the power of a local authority under subsection (1) of section sixty of the Food and Drugs Act, 1938, to provide public slaughterhouses is exercisable in either of the following ways, that is to say—
(a) by acquiring (whether by purchase, lease or otherwise) or appropriating land and providing slaughterhouse facilities there; or
and any reference in Part V of the said Act of 1938, or in this Part of this Act, to a local authority providing a slaughterhouse or to slaughterhouse facilities provided by a local authority shall be construed accordingly.
LORD SILKI.NLORD SILKI.N moved, in subsection (1), to omit the opening words, "Until Parliament otherwise determines." The noble Lord said::I beg to move the Amendment standing in my name and that of other noble Lords. Clause 1 begins with the extraordinary words, "Until Parliament otherwise determines." I raised this matter on Second Reading. Obviously, every Bill applies

975
"until Parliament otherwise determines." There have been a number of instances where measures passed by previous Parliaments have been repealed or revised by the present Parliament. Therefore, either these words in Clause 1 have some very special significance, much greater than the normal significance, or they are redundant. I should like to know which.
I imagine that we shall be told that this present policy is a temporary one, that the Government are considering the general policy of slaughterhouses, and that these words have been included in the Bill because of the need for haste in doing something, in view of the impending decontrol of meat. I would, however, draw the attention of the Committee to the fact that these words occur in only two clauses. Logically, if the reason is the one I have given, they ought to appear at the beginning of every clause. They appear, however, here, in the English Part of the Bill, and once in the Scottish Part. And I presume that in this Part they apply only to Clause 1, which lays down that it shall be the duty of every local authority to provide slaughterhouses in their area. Does that mean that the Government contemplate the possibility that, in their considered policy, it will no longer be the duty of local authorities to provide slaughterhouses? That would be a remarkable thing; they have been providing slaughterhouses since 1936 and have been licensing them. They have been responsible for securing the requirements of this country in respect of slaughterhouses.
I do not want to labour the point, but these are remarkable words. If taken literally, it looks as if there will come a time in the near future when these powers will be taken from the local authorities; and it is not very encouraging for them to go to the expense, as they are being asked to do, of providing slaughterhouses when they are told in terms that this is only "until Parliament otherwise determines." I should be glad, therefore, if the noble Lord, Lord Carrington, would explain what is the special significance, if any, of these words, why they have been put in and whether it would not be wiser to leave them out altogether. I beg to move.
Amendment moved—
Page 1, line 7, leave out ("Until Parliament otherwise determines,").—(Lord Silkin.)
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE AND FISHERIES (LORD CARRINGTON): May I first be allowed to apologise to the Committee for the absence of my noble friend, Lord Home, who has an engagement which he could not break. He asked me to apologise to the House for not being here. As regards the Amendment, Lord Silkin will be glad to know that by his argument he has convinced me that he is right. The object of inserting these words, as he said, was to make it quite clear that the Bill was a temporary measure, so as to leave no doubt in the mind of anybody who read it that it was not to be permanently on the Statute Book. But I do not think that the words add very much, and I am glad to accept the noble Lord's Amendment.
LORD SILKIN: I do not want to paint the lily, and I am grateful to the noble Lord for accepting the Amendment, but the words do not do what the noble Earl, Lord Home, said they set out to do. All they say is that Clause 1 operates "until Parliament otherwise determines" —that is all. As a matter of fact, I should have had no objection to some words somewhere which would indicate that this is a temporary Bill, but perhaps the noble Lord's words have provided that indication.
On Question, Amendment agreed to.
LORD SILKIN LORD SILKIN had given notice of two Amendments to subsection (2). the first being to leave out "either" and to insert "any." The noble Lord said: I beg to move the next Amendment standing in my name: it is preparatory to Amendment No. 3, and with the leave of the Committee I will, in moving this Amendment, argue my case on Amendment No. 3. This Amendment is one which the noble Lord, being in a reasonable frame of mind, will no doubt see his way to accept, because it does in terms what the noble Earl, Lord Home, whose absence we regret on this occasion, said it was the intention of the Government to do—namely, to provide powers of compulsory purchase of land. On Second Reading I made the point that the Bill, as it stands, does not confer upon English local authorities powers of compulsory purchase of land in order to carry out the duties which are being imposed upon

977
them. The Bill authorises the purchase of land by agreement, but not by compulsion, where necessary, and I made what I hoped was a reasonable case, to indicate that the local authorities ought to have compulsory purchase powers.
The noble Earl, in reply, to my surprise did not argue the need for those powers —he accepted that; but he said that they were already in existence under Section 306 of the Public Health Act, 1936. I had my doubts about that at the time, but I felt that it would be unfair to press the noble Earl—he was merely stating something which he had been told, and I did not think he had actually looked into it. I have since looked at Section 306 of the Public Health Act, 1936, and this is what it says—the noble Lord no doubt has it in front of him:
"The purposes of this Act shall be purposes for which a local authority may be authorised to purchase land compulsorily by means of a provisional order made by the Minister and confirmed by Parliament:
Provided that this section shall not apply where a power to purchase conferred by this Act is stated to be a power to purchase by agreement."
That is not a very satisfactory power in any case; but, taken by itself, the Public Health Act, 1936, does not contain a single word about slaughterhouses. Therefore, this power, which is a power to purchase compulsorily anything which a local authority are given power to purchase compulsorily under the Public Health Act, cannot confer on them powers compulsorily to purchase land for slaughterhouses.
But then I understand that there is a provision in a Schedule to the Food and Drugs Act, 1938, that Section 306 of the Public Health Act, applies to that Act. That may be so, and I do not want to take up the time of the Committee in arguing an intricate legal point. My own considered opinion, however, is that it does not provide powers of compulsory purchase for local authorities for the purpose of carrying on their functions as slaughterhouse operators. Even if it does, it provides the powers in a most unsatisfactory way, because it does it by means of a Provisional Order made by the Minister and confirmed by Parliament; and that, by general agreement, is not regarded to-day as a satisfactory method of exercising compulsory purchase. The Government are supposed
978
to be in a hurry over this Bill, and they know quite well that this method of Provisional Order, requiring confirmation by Parliament, is by no means the speediest way of acquiring land. It is expensive and it lends itself to considerable obstruction, and therefore in present-clay practice the normal method adopted is that of the Acquisition of Land (Authorisation Procedure) Act, 1946.
That is the method provided in Clause 14, in the Scottish Part of the Bill. Scotland has, in terms, a provision giving powers of compulsory purchase of land—and may I say, in passing, what a contrast there is between the drafting of the Scottish provisions and those of England! The Scottish provisions are much better drawn, much clearer and much more concise than the English ones. There may be good reasons for that, but it is a fact that they are better drawn. What I have done in my Amendment is to take the wording of Clause 14, in Part II of the Bill, which does confer compulsory powers, and to introduce it in Clause 1. If, therefore, there is no disagreement between us that these powers are necessary (and I hope that there is not), and that the powers conferred, if they are conferred at all under Section 306 of the Public Health Act, are too indirect and doubtful, and in any case are unsatisfactory; and if the Committee feel that, since the local authorities are given powers expressly in this clause to buy land by agreement, it would be better to say in this clause in terms that they should also have power to purchase land compulsorily, then I think the Committee would be well advised to accept the wording which is in the Scottish provision and to accept these Amendments. I beg to move.
Amendment moved—
Page 2, line 4, leave out ("either") and insert ("any").—(Lord Silkin.)
LORD CARRINGTON: I hope that I can satisfy the noble Lord that everything is all right, and that he need not worry unduly about this matter. In the first place, he is perfectly right in thinking that the reason there is no mention in subsection (2) about power to purchase land compulsorily is that subsection (2) merely elaborates a section of the Food and Drugs Act, 1938. Under Section 60 of that Act, local authorities

979
have the power to acquire land compulsorily, and that power derives from the fact that Section 96 of the Act (if the noble Lord, Lord Silkin, will turn it up he will see that this is so) applies Section 306 of the Public Health Act, 1936. I do not think there is any doubt about this matter. What the noble Lord seems to object to is the Provisional Order procedure. The whole of this Provisional Order procedure, as I understand, applies to all the subjects which come under the Food and Drugs Act, 1938. We think it would be quite wrong merely to change, for one particular aspect of the whole subject, the Food and Drugs Act form of compulsory purchase. The second half of the Amendment is unnecessary because the Acquisition of Land (Authorisation Procedure) Act, 1946, in Clause 1 applies its procedure to all Acts which had to do with the compulsory purchase of land before its passing. Therefore, automatically that will take effect. I hope the noble Lord will be reassured by what I have said, and will realise that what he wants is already in the Bill. I hope he will recognise that his Amendment is unnecessary and will agree to withdraw it.
VISCOUNT ALEXANDER OF HILLSBOROUGH: We are all glad to see the noble Lord back in his place again after his recent indisposition. We hope that he will be able to continue to bear the burden of the rest of the Session's work. He has been most charming in the reply which he has just made to my noble friend, but not very satisfactory. The way is now open so that large numbers of the poor, uninstructed, would-be licence-holders may, perhaps, get hold of the Report of the noble Lord's speech this afternoon, read it and then seek the best legal advice open to them. On the other hand, they may try to puzzle out for themselves what it is all about. Most of them, however, will become the usual victims of what we have got to call in modern Parliamentary life "legislation by reference." I know that Parliamentary draftsmen can get out of many difficulties by means of legislation by reference. It is inconceivable to us on these Benches that there should be any fundamental difference between the method to be applied in England and Wales and that applied in Scotland. Do I understand
980
that in the case of Scotland, if they want something, it will be subject to a Provisional Order and then subject to the definite approval of Parliament? Is that correct?
LORD CARRINGTON: No.
VISCOUNT ALEXANDER OF HILLSBOROUGH: Exactly—that is the point which my noble friend Lord Silkin has been pressing. Why should this miasma be placed over the poor English and Welsh citizen, and yet not be applied in the case of Scotland? Why should we not get some fair crack of the whip in this procedure, such as that which has literally been won by the Scottish citizens. I cannot for one moment regard the noble Lord's answer as satisfactory. I am sure that he wants to reach the same objective in England and Wales as that which, I am glad to say, Scotland has reached in her public provision of slaughterhouses. Why does not the noble Lord give us the same procedure in this country? On both sides of the House we are anxious to obtain the same objective. What is standing in the way of having the same procedure for England and Wales as for Scotland? I can see nothing standing in the way, except perhaps a feeling that we must give way to the usual idiosyncracies of Parliamentary draftsmen who love legislation by reference.
LORD SILKIN: I do not know whether any other noble Lord wishes to say anything, but perhaps I may say a word or two further at this juncture. The only difference between us, apparently, is on a question of drafting. I am sure that it would be much more satisfactory to have these compulsory purchase powers set side by side with the powers of acquisition by agreement. As the matter stands, it is stated in the Bill that they may acquire by agreement. But nothing is stated to the effect that local authorities may, if necessary, acquire land compulsorily. Surely it would be much more satisfactory to say so. Secondly, in spite of the noble Lord's plausible statement, I am still in doubt as to whether Section 306 of the Public Health Act really applies—I hope the noble Lord will accept this as a genuine doubt. Need we have any doubt about such a matter in the drafting of a Bill, especially in the drafting of a clause about which we all

981
agree? Why cannot we, at this stage of the Bill, put in plain language something that we are all agreed about? I hope that the noble Lord will no: be difficult about this.
LORD CARRINGTON: Of course, the last thing I want to be is difficult. I should like, in passing, to thank the noble Viscount, Lord Alexander of Hillsborough, for what he said about me. I should also like to have another shot at answering noble Lords. I have a nasty feeling that I may have gone a little wrong in what I said in my first speech. I am, of course, no lawyer, whereas the noble Lord, Lord Silkin, is. As I understand the position, it is this. In the Food and Drugs Act, 1938, which applies to Clause 1 of this Bill, Section 96 applies Section 306 of the Public Health Act, 1936. Lord Silkin, I am glad to note, agrees with that. There is no doubt whatever that Section 306 of the Public Health Act applies to the Food and Drugs Act, which applies to Clause 1 of this Bill.
LORD SILKIN: I follow all that—indeed, I think I said so. But may I express the doubt which I feel. My doubt is that I think Section 306 itself does not apply, because there is nothing in the Public Health Act, 1936, which relates to slaughterhouses. It confers compulsory purchase powers for anything that is done under the Public Health Act itself. Enormous powers are conferred, but it has nothing to do with slaughterhouses. Therefore, there is doubt in my mind as to whether power not given for compulsory purchase of slaughterhouses can be transferred from the Public Health Act and, therefore, can inferentially be applied to this Bill. The simplest thing, surely, is to remove that doubt by putting something in the Bill to make it clear that there are to be such powers.
LORD CARRINGTON: But Section 96 does apply and Section 306 also applies, because it has been used. The Food and Drugs Act, 1938, does apply to slaughterhouses. I hope the noble Lord will take it from me that that is so, for my advisers assure me that that is the case. If I may, I will go on from that. I do not want to quarrel over this point, for we all want to do the same thing. The section in the Food and Drugs Act, 1938, applies. The Acquisition of Land (Authorisation Procedure) Act, 1946, was
982
then passed, and that superseded he procedure in Section 306 of the Public Health Act, 1936. Therefore exactly the same procedure for the acquisition of land will take place in England as in Scotland, because the Acquisition of Land Act has superseded Section 306 of the Public Health Act, 1936. I do not think the noble Lord has any cause whatever to be uneasy about this. The power is there, and it has been used in the past for the acquisition of land. I hope that the noble Lord will see his way to withdraw his Amendment.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I regret to say that, though in other circumstances we might have agreed, this is a case where a Government measure is being introduced in your Lordships' House. I think it is fundamentally in the interests of citizens to be able to pick up a Bill and see from where the power stems under which they will have to pay rates and taxes because of the way in which a building for the slaughter of animals is acquired by compulsory purchase. I think that in an Act of Parliament the source of the power ought to be as plain as a pikestaff to every interested citizen. What we are getting here is a tripartite, and even a quadrilateral, reference. It goes to one, two, three and four Acts—"all round the mulberry bush," to use an old term. I think it is fundamental to us that we should have my noble friend's Amendment, setting out this additional power, put in the Bill, in order that we may have all three courses provided for in the clause.
VISCOUNT SAMUEL: Is it not rather a pity to go to a Division or to continue this wrangle over what is merely a question of drafting? The Front Opposition Bench appear to feel passionately upon this point. They say it is fundamental. For my own part, as a life-long opponent of legislation by reference, I think it is a pity that Acts of Parliament should rot be made as clear as they can be. Would it not be as well if, between now and Report stage, the Government and the Opposition discussed this matter with the draftsmen quietly, in good temper, over a cup of tea? If in that friendly atmosphere the representative of the Ministry of Agriculture can be persuaded to look at it again, then on Report stage the clause may be drawn in a form which will please all Parties.
LORD CARRINGTON: Of course, I shall be only too happy to accept the suggestion put by the noble Viscount, Lord Samuel. To be honest, I do not feel very strongly about this. I am told that all this is covered, and that the words which the noble Lord, Lord Silkin, wants put in are quite unnecessary. But if the noble Lord feels strongly about it—I have been trying to convince him, but I am afraid that my powers of conviction are not very strong this afternoon—I do not want to quarrel about it. Of course, I will talk it over over a cup of tea, to see whether we cannot come to some arrangement; but at present I am afraid that I cannot accept the Amendment. If the noble Lord will withdraw his Amendment now, we will have conversations, on the understanding that I do not promise him anything.
LORD SILKIN: On a similar understanding, I am prepared to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD CARRINGTON: This Amendment and the next are drafting Amendments. They leave out words which do not add to the sense of the Bill and I think are better left out. I beg to move the first Amendment.
Amendment moved—
Page 2, line 12, leave out from ("1938") to ("to") in line 13.—(Lord Carrington.)
On Question, Amendment agreed to.
LORD CARRINGTON: I beg to move this Amendment.
Amendment moved—
Page 2, line 13, leave out from ("slaughterhouse") to ("shall") in line 14.—(Lord Carrington.)
On Question, Amendment agreed to.
Clause 1, as amended, agreed to.
Clause 2 [Charges for use of public slaughterhouses]:
LORD SILKIN LORD SILKIN moved to add to the clause:
"(4) A local authority by whom a slaughterhouse has been provided under the foregoing sections of this Act or under any other enactment may provide plant or apparatus for disposing of or treating waste matter or refuse, or processing by-products resulting from the slaughter of animals in such a slaughterhouse."
The noble Lord said: I beg to move this Amendment, which would confer upon local authorities the power to deal
984
with by-products of slaughtering, which in many cases are extremely valuable, especially for fertilising and general agricultural purposes. It would also confer upon local authorities the power of providing plant and apparatus for the purpose of treating by-products. Here, again, I have followed literally the excellent example of Scotland, because in Clause 8 (3) (b) this power is conferred upon local authorities in Scotland. Surely what is good for Scotland should be good for this country. Therefore, I move this Amendment with great confidence, feeling that the noble Lord will not let this country down.
Amendment moved—
Page 2, line 39, at end insert the said subsection.—(Lord Silkin.)
LORD CARRINGTON: Certainly as regards the first part of the noble Lord's Amendment—that is to say, the part dealing with the provision of plant or apparatus for disposing of or treating waste matter or refuse—the power already exists under the Food and Drugs Act, 1938, although I hesitate to say so in the presence of the noble Viscount, Lord Samuel. If the noble Lord has the Act with him, he will see that Section 60 (2) (c), gives local authorities that power, and I do not think there is any point in including in this Bill a power which already exists. The Food and Drugs Act, 1938, is on the Statute Book and local authorities have provided these services. I am not quite so certain about the processing of by-products. Originally, I thought this point was covered in the definition clause. If the noble Lord will turn to Part I of the Act he will see that among other things "slaughterhouse" means a place:
"for keeping, or subjecting to any treatment or process, products of the slaughtering of animals…"
I think that that covers the question of processing about which the noble Lord is worried, but I will most certainly look at it again between now and Report stage, and if I find that those words do not cover that process, then perhaps we can put down an agreed Amendment.
VISCOUNT ALEXANDER OF HILLSBOROUGH: We are much obliged to the noble Lord for his answer. We should certainly like to know after reconsideration, whether anything is necessary. But I wonder whether at this stage the noble

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Lord could give me some information about how this clause is going to work. It seems quite clear that the Act of 1938 is applicable to all publicly provided abattoirs, and its provisions have probably been followed in the case of abattoirs requisitioned during the war and the period of control. But I understand from the answer given to a question put by my noble friend and myself during Second Reading that the issue of licences is contemplated for a period of not less than thirteen months and probably for three years, and may be continued beyond that period if there are not sufficient public slaughterhouses to meet the needs of the area. I wonder whether this is going to be applicable in the sense of my noble friend's Amendment, in the case of premises for which licences have been allowed to lapse during the war and the control period but which may be re-licensed. I should think it is obvious from the fact that slaughterhouses can be relicensed to a minimum extent, sufficient to bring the number in the country up to about 3,000—there are only about 570 at the present time. Is this power likely to be used in the case of these slaughterhouses which will be freshly re-licensed?
LORD CARRINGTON: What power?
VISCOUNT ALEXANDER OF HILLSBOROUGH: The power to make the provisions mentioned in the Amendment, such as of plant for the disposal or treatment of the by-products. The noble Lord has said it is already covered, to a large degree, in dire Statute.
LORD CARRINGTON: I do not think there is any difficulty about the provision of any of these things by the owner of a private slaughterhouse. Lord Silkin, I understand, is trying to ensure that the local authorities can provide them. I say that they already have power to do so. With regard to slaughterhouses which are being handed back to private owners, I do not think there is anything to stop them from providing these facilities, if they wish to.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I am afraid that the noble Lord has misunderstood me. I think it is plain that a good many of the slaughterhouses which have been in use for the last fourteen or fifteen years have not been owned by local authorities,
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although some of them have. Others have been under requisition, and they have been privately owned. But these provisions have not been made in every case by the private owner; some have been made by the Government. From the point of view of the improvement of public health and of the proper disposal of these waste matters, I want to know whether that same power will be used by the Department in respect of the 2,400 privately-owned slaughterhouses which may be re-licensed. We want guidance. I think that is a fair question to ask.
LORD CARRINGTON: I am perhaps being stupid, but I must say that I do not understand the noble Viscount. Is he suggesting that we should have a power to see that slaughterhouses under private ownership should be properly equipped?
VISCOUNT ALEXANDER OF HILLSBOROUGH: No.
LORD CARRINGTON: What power is the noble Viscount talking about?
VISCOUNT ALEXANDER OF HILLSBOROUGH: I ant talking from my knowledge of what has been the procedure. The noble Viscount, Lord Woolton, will be able to tell the noble Lord, Lord Carrington, what happened during the war period: that where a private slaughterhouse was. taken over by requisition, and it needed plant and other equipment in order to serve the public needs, then grants were made by the Government through the proper Department.
THE CHANCELLOR OF THE DUCHY OF LANCASTER (VISCOUNT WOOLTON): May I intervene? Is the noble Viscount asking whether the Government, out of public funds, will make these provisions for privately-owned slaughterhouses? If I understand it, that is the question he is asking.
VISCOUNT ALEXANDER OF HILLSBOROUGH: Yes. My noble friend has stressed the fact that this is a sort of special Government scheme, temporary in its nature. Nevertheless the Government propose to re license, not all, but a number of slaughterhouses which used to he licensed. They will have to act in many cases under the direction of The local authority and provide slaughtering facilities for other than their own imme-

987
diate trade requirements. That is what is being negotiated now. They will have to provide for more than their own business requirements. If that is so, they will have to provide extra plant. In that event, will they be made grants for it in exactly the same way as the Government made grants during the war?
LORD CARRINGTON: There is no question of giving grants to private people. As I understand it, there is no power by which the Ministry of Food can compel the owners of private slaughterhouses to do any more slaughtering than they wish to do. It is only an agreement which they enter into with the local authority.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I am obliged to the noble Lord. Now I know where I am. It means that, if the owners of a slaughterhouse say that they do not wish to provide for other than their own business. the Government will have to re-license further slaughterhouses, because the number provided for at the moment will not be enough. The noble Viscount, Lord Woolton, is aware that I know a little about this matter: I was concerned with it for a long time, and had a great deal to do with building up the food and meat trade organisation at the Ministry of Food from 1938 to 1940. I understand that you are going to re-license private slaughterhouses and hope to carry on with those already in existence and in use. I believe that some of them have to carry out slaughtering for other than their own requirements. Is that not so? You are going to give power to the local authority in each case to decide what they will license in their particular area. Negotiations are going on now as to which private licence holders are, and which are not, to be re-established, and how far their re-establishment will provide for the slaughtering requirements of their area. If you are going to say that you have no power over one which is licensed in that way, then you must provide other facilities for slaughtering to meet other requirements. Then the owner will say that you must give him additional plant. I do not think the Government have considered this particular matter at all.
LORD CARRINGTON: With great respect to the noble Viscount, this point has nothing whatever to do with the Amendment. we are discussing at present. If the noble Viscount would like to put down an Amendment covering the point, I shall be happy to answer him. We are perfectly aware of the noble Viscount's point about there not being enough slaughterhouses after the forthcoming decontrol of meat. The whole object of the Bill is to ensure that there will be sufficient slaughterhouses. We hope that the owners of slaughterhouses—and I believe the noble Viscount has been connected for many years with the Co-operative Movement, who own a great number of slaughterhouses—will do all they can; that they will "play in" with the local authorities and with the Ministry of Food, and see that there are adequate slaughtering facilities when the time conies for derationing meat. But, with great respect, that has little to do with the Amendment we are discussing.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I said that I was asking for information because of the powers included in the Amendment which my noble friend has moved. Therefore, I was hanging my argument on to that Amendment: but I will probably hang it on to another Amendment later on.
LORD SILKIN: With regard to the Amendment itself, I gather that the noble Lord, Lord Carrington, says that the first part is covered by Section 60 (2) (c) of the Food and Drugs Act, 1938. It certainly looks as if that is the case. The noble Lord thinks that the second part of the Amendment may be covered by the definition in this Bill, but he is not sure. However, as he says he will look into it again, I am perfectly willing that he should do so, and, in the circumstances, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 2 agreed to.
Clause 3:
Grant and renewal of licences
3.—(1) Where, after the commencement of this Act and before the first day of July, nineteen hundred and fifty-six a slaughterhouse licence is granted or renewed by a local authority, the period fixed by the authority for the licence to remain in force or, as the case may be, the period for which it is renewed, may, notwithstanding anything in subsection (7)

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of section fifty-seven of the Food and Drugs Act, 1938 (which relates to the duration of licences under that section in respect of slaughterhouses and knackers' yards), exceed thirteen months so long as it does not end later than the thirty-first day of July, nineteen hundred and fitly-seven:
Provided that this subsection shall not apply in any case where it appears to the heal authority that the premises in respect of which the licence is granted or renewed are, so far as they are to be used for slaughter, to be used wholly or mainly for the slaughter of horses.
(3) Where under any enactment regulations of the Minister of Food arc in force with respect to the construction, layout, equipment, cleanliness, ventilation or lighting of slaughterhouses, a local authority may, without prejudice to any discretion conferred on them under the said section fifty-seven, refuse an application, made to them for the grant or renewal of a slaughterhouse licence in respect of any premises if they are not satisfied that the requirements of the regulations are complied with in respect of those premises, or will be complied with before the date on which the licence or renewed licence comes into force.
3.20 p.m.
LORD SILKIN LORD SILKIN moved to omit subsection (1). The noble Lord said: Perhaps I should explain that Amendment No. 8 is an alternative to the Amendment which I am now moving, No. 7. Obviously if No. 7 were accepted by the Committee, there would be no room for No. 8. Clause 3 provides powers to local authorities to grant licences in respect of slaughterhouses for a longer period than they have at the present time. At present, they can grant licences for up to thirteen months. Clause 3 will enable them to grant licences up to, I think it is, 1957. I take it that the object of this is to encourage owners of private slaughterhouses to carry out necessary improvements, in order to make the slaughterhouses clean and sanitary, an object of which we all approve. But there is nothing in the Bill which requires local authorities, once they have granted a licence for an extended period, to visit the slaughterhouses and make quite sure that they are kept in a clean and sanitary condition. I feel that in those circumstances it would be safer if the licence continued to be an annual one, because by so doing the licensing authority is under an obligation to visit the slaughterhouse before granting a licence under the terms of the 1936 Act. Therefore, I felt that the right thing was not to confer
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upon local authorities this power to grant a licence for this longer period.
With the consent of the Committee, may I also say a word about the alternative Amendment, No. 8, and also about Amendment No. 8A, in the name of the noble Earl, Lord Lonsdale, which is on the same point? If one could have an assurance that where a licence was granted for a longer period it would be with the approval of the appropriate Ministry—at the present time the Ministry of Food—and if one could have a further assurance that during that period there would he regular visits to the slaughterhouse to ensure that it was in a satisfactory condition, I should not object to an extension to 1957, or even, in the terms of the Amendment, to 1959. Obviously, if the object of granting a licence for a longer period is to give encouragement to the owner of a private slaughterhouse to spend money—and goodness only knows! he was discouraged by the first words of the Bill, which gave him a clear notice that Parliament may change its mind about this I should have thought it would be wiser to go the whole hog and give him a licence for the longer period, always provided, as I say, that there are adequate safeguards. The adequate safeguard that I would suggest is that a licence for a longer period than a year should be granted only with the consent of the Ministry of Food, and also (this is not in any Amendment, but it may be covered by a later one regarding by-laws) that there should be regular, periodic visits to the slaughterhouse to ensure that it is kept in good condition. To keep myself in order, having roamed round a number of Amendments, I beg leave to move Amendment No. 7.
Amendment moved—
Page 2, line 40, leave out subsection (1).—(Lord Silkin.)
LORD CARRINGTON: The noble Lord has taken me rather by surprise up to a point, because I thought that his object in putting this Amendment down was much more straightforward than lie has now led us to understand. I thought he disapproved of the idea of a three-year period for a licence, and that he wished to return to the 'thirteen-months period. As I understand it, all that he is worried about is this question of regular inspection of slaughterhouses, and that if we could overcome that he would have no

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particular objection to longer licences and would agree with my noble friend Lord Lonsdale, who wants to have a longer period than three years.
LORD SILKIN: Yes, except that, if a longer period is to be given, I should then propose that it should be granted only with the consent of the Ministry of Food.
LORD CARRINGTON: Perhaps I may say one word about this question of granting long licences, because it is an important point. The noble Lord is quite right in suggesting that the reason why we want this longer period for a licence is to encourage private people to open up slaughterhouses and to give them a longer security of tenure than they would otherwise have. It may call for a considerable amount of work, and a certain amount of capital cost, to put the slaughterhouses into working order, and many people would be unwilling to meet that expense if they did not think there would be sufficient time for them to get a return on their money. We think that the encouragement which these longer licences would give is essential. As the noble Lord knows, we are imposing on local authorities the responsibility of seeing that there will be enough slaughtering facilities available after decontrol. Obviously, they themselves cannot be expected to provide all the slaughterhouses in their own areas and some obviously will have to be run by private enterprise.
While I believe that there are some advantages in retaining the period of thirteen months for a licence, I think that, in the conditions which we foresee, those advantages must be weighed against the urgent need that we must be certain, after control ends, that there is not a shortage of slaughtering facilities. That is the primary need with which this Bill is concerned. I am disposed to accept the Amendment of my noble friend Lord Lonsdale. I feel that three years is not long enough, and that five years is the right time. But, at the same time, I do not think I should find it possible to accept the second Amendment of the noble Lord opposite—that is, that the grant of licences should be subject to approval by the Ministry of Food. After all, the responsibility for slaughtering in their area rests squarely upon the local authority. They are the
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people who know whether facilities exist or do not exist, and I doubt whether anything would be gained by having all the local licences referred from local authority areas up to the Ministry of Food. Therefore, I refuse the noble Lord's two Amendments on those grounds. With regard to what he has said about inspection, I can tell him that the Ministry of Food intend to make regulations for hygiene at slaughterhouses, and local authorities will be responsible for enforcing those regulations. Of course, the fact that they are responsible for enforcing them will mean that they have to make regular inspections. In that way, I think the noble Lord will find that his point is covered, and therefore I hope that he will withdraw his Amendment.
LORD SILKIN: My Amendment was exploratory, and I see the force of what the noble Lord has said. I should like to say a word on the next Amendment. I beg leave to withdraw my Amendment.
Amendment, by leave. withdrawn.
LORD SILKIN LORD SILKIN moved. in subsection (1), after the second "may" to insert "with the consent of the Minister of Food." The noble Lord said: I am not quite happy about the reply which the noble Lord gave on the last Amendment. It is not as if the local authorities are being given the job of getting on with slaughterhouses without reference to the Ministry of Food. The Ministry of Food are constantly having to be consulted about this matter, and this extraordinary power —and it is extraordinary—of granting a licence for five years, is one which should be exercised with great care. I do not object to the five-year period if there are adequate safeguards: but I object to it most strongly if there are no adequate safeguards. I think an effective safeguard would be the approval of the Ministry of Food, especially now that it is proposed to extend it to periods of up to five years. As the noble Lord knows, it is very difficult to revoke a licence once it is granted. The whole purpose of the annual licence was to enable local authorities to keep control of the situation, but once a licence has been granted for five years—and, as I say, I should not object to that if there is proper control; in fact, I approve of

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it—control has, to a considerable degree, been lost. That makes it all the more necessary that these licences for the longer period should be granted with great care. If the noble Lord does not find it possible this afternoon to agree that it should be subject to the approval of the Ministry of Food, I should be grateful if he would consider the matter to see whether that is not a reasonable safeguard to import into the Bill. I beg to move.
Amendment moved—
Page 2, line 44, after the second ("may") insert ("with the consent of the Minister of Food").—(Lord Silkin.)
LORD CARRINGTON: I have given in my previous remarks my answer to this Amendment, but in view of what the noble Lord has said, I will certainly look at it again, perhaps when we:lave a conversation, between now and the next stage. In view of that, I hope the noble Lord will see his way to withdraw the Amendment now.
LORD SILKIN: I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
3.32 p.m.
THE EARL OF LONSDALE THE EARL OF LONSDALE moved in subsection (1), to substitute "nineteen hundred and fifty-nine" for "nineteen hundred and fifty-seven." The noble Earl said: In rising to move this Amendment, I ask your Lordships' indulgence for this my first time of speaking in your Lordships' House. We seem to have had all the arguments already on this Amendment, but none the less I will say that I feel it particularly important that there should be power to grant to owners of private slaughterhouses licences for a longer period than three years, so that they may be encouraged to put capital into their enterprise of improving and modernising private slaughterhouses, and may be assured of getting some return. Of course, your. Lordships will appreciate that, with meat control ending in July of this year, there is an urgent need now to give every encouragement for the provision of adequate slaughtering facilities; otherwise, there would be a block of fat-stock which there would not be the facilities to slaughter, with consequent loss to the agricultural community. In view of what we have heard, I do not think I
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need say much more. As regards safeguards in the giving or the renewing of a licence, I would only point out that in the remaining clauses of this Bill there seem to be adequate safeguards to see that the slaughterhouses, in the first instance, are both hygienic and properly organised. I thank your Lordships for giving me the indulgence of listening to me. I beg to move.
Amendment moved—
Page 3, line 6, leave out ("fifty-seven") and insert ("fifty-nine ").—(The Earl of Lonsdale.)
LORD CARRINGTON: I should like to congratulate the noble Earl on breaking the ice. I think there are few of your Lordships present who made their maiden speech on an Amendment which was accepted, as this is going to be. I only hope that the noble Earl, on the many future occasions on which I trust he will address the House, will keep up as high a percentage. This is a good Amendment. For the reasons I have already given, I think that perhaps three years is not quite long enough to encourage private owners to open up slaughterhouses, and I am grad that the noble Earl has moved this Amendment.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I am glad that the noble Lord has accepted the Amendment because perhaps these slaughterhouses will now have sufficient spent on them to make them hygienic arid manageable. I wonder how much it will increase the compensation bill, when one comes to what was foreshadowed on the Second Reading, for the moderate concentration. which, as l understand it, is ultimately to mean just a few hundred larger. efficient abattoirs. In the meantime, I hope that some of us who are interested in the matter may make better progress in getting something done than would have been the case with the thirteen months period.
On Question, Amendment agreed to.
3.37 p.m.
LORD SILKIN LORD SILKIN moved, after subsection (2) to insert:
"(3).A local authority may, and if required by the Minister of Fold shall, make by-laws for securing that slaughterhouses are kept in a clean and sanitary condition, and are properly managed and Conduct
(4) The Minister of Food shall he the confirming authority as respects by-laws made under the last foregoing subsection.

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(5) If and so far as a by-law made under this section is inconsistent with any regulation relating to slaughterhouses or the slaughter of animals therein, the latter shall prevail."
The noble Lord said: May I also take this opportunity of congratulating the noble Earl on his maiden speech. I think he must have achieved a record, because not only was his Amendment accepted by the Government; it was accepted by the Opposition, and accepted even before he had had a chance to move it. If we had known that the noble Earl was to make a maiden speech on this Amendment, we might have put up a fight and given the noble Earl a chance to exercise his forensic abilities. I am sure he will have equally good fortune in the future and that we shall hear him often.
The Amendment that I am moving is again one which I have taken from the Scottish provision. Under the Scottish Part, powers are conferred upon local authorities to make by-laws to provide for clean and sanitary conditions in slaughterhouses. Again, I think that it should be possible for English local authorities to do the same. I have already deployed the argument for it and I do not propose to elaborate it again. I am not sure whether I understood the noble Lord correctly when he said that the Ministry of Food are going to introduce by-laws—
LORD CARRINGTON: Regulations.
LORD SILKIN: If those regulations are to be for the purpose of requiring local authorities to make by-laws, it is, of course, difficult to discuss this Amendment without knowing what form those regulations will take. I am not particular whether by-laws are made under regulations made by the Ministry of Food or whether they are made in the way set out in the Amendment. If we are going to have uniform by-laws for the whole country, so much the better. I wonder whether the noble Lord could enlighten us as to what he has in mind about these by-laws. One thing is certain: that it is necessary to have bylaws to secure that these slaughterhouses are in a clean and sanitary condition and are properly managed and conducted. If we get uniform by-laws for the whole of England, so much the better. Apparently, the power of the Minister to make
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by-laws is not going to apply to Scotland, because in the Scottish provision the provision that I am moving by way of Amendment is already in the Bill. It would be odd if the Minister made regulations which would apply to England but gave the local authorities in Scotland power to make by-laws themselves. However, I move the Amendment and perhaps the noble Lord will explain in more detail what he has in mind. I beg to move.
Amendment moved—
Page 3, line 24, at the end insert the said subsections.—(Lord Silkin.)
LORD CARRINGTON: May I explain the difference between Part I and Part II of the Bill? Subsections (3) and (4) of the noble Lord's Amendment are already covered in Section 58 of the Food and Drugs Act, 1938. The local authorities have power already to make by-laws. The only difference in the wording is that that is permissive. The noble Lord, in his Amendment, has put in:
"…if required by the Minister of Food shall."
That point has already been taken care of in the Food and Drugs Amendment Bill which was before this House for some considerable time—and which left, I think, only last week. If the noble Lord has that Bill in front of him he will see that in the Second Schedule, page 32, line 1, there is an amendment which says that in subsection (1) of the Food and Drugs Act, 1950, after the word "may" there shall be inserted the words "and shall if so required by the Minister of Food." So the first two headings of Lord Silkin's Amendment are already taken care of. As regards the proposed new subsection (5) I noticed that that is in the Scottish Part of the Bill and it is not in Part I, which relates to England. I think it is a useful point and one which we have overlooked. If the noble Lord will withdraw his Amendment now, we will between now and the Report stage put down an Amendment to take care of that point.
LORD SILKIN: Does the noble Lord mean he is going to do what I say ought to be done in the Amendment, but that it is already provided for in existing legislation or in the Food and Drugs Amendment Bill, which is before another place, except for the proposed new subsection (5) in my Amendment, which he wants

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to look at again? If that is the case I am very willing to withdraw my Amendment for the purpose of enabling us both to look at the thing again.
Amendment, by leave, withdrawn.
LORD CARRINGTON: This is almost a drafting Amendment. There was a mistake: the Minister of Food was put into this paragraph when in point of fact under the Food and Drugs Amendment Bill, Clause 6 (it will be a case under which regulations are made), the Ministers responsible are the Ministers of Food and of Health. So, if we leave out the Minister of Food, it will make the matter quite plain. I beg to move.
Amendment moved—
Page 3, line 26, leave out ("of the Minister of Food").—(Lord Carrington.)
On Question, Amendment agreed to.
On Question, Whether Clause 3 as amended shall stand part of the Bill'?
LORD MATHERS: Before we part with this clause, may I ask the noble Lord who is in charge of the Bill whether the regulations to which he has made passing reference will include reference to the necessity for slaughtering by humane methods? It may be that. I am getting beyond what is intended to be the scope of this Bill in making such a request, but it seems to me that if regulations are being set out to govern the conduct of work that is being carried on, all of which relates to slaughterhouses, it would be well, even if it were a case of repetition, to complete the code of working in slaughterhouses by including reference: to the necessity and the legal obligation that is upon those who use these slaughterhouses to use the humane methods that are already established by law.
LORD CARRINGTON: Of course, that is very much in mind. I am afraid I could not tell the noble Lord exactly what is to be in the regulations, for I have not seen them. As the noble Lord knows, that is not in my Department. But the question of humane slaughtering is dealt with in the Slaughter of Animals Act and in the Slaughter of Animals Bill which is going through another place at present. I agree that this is an aspect: of the subject which is extremely important and it will be taken care of; we will not overlook it.
LORD MATHERS: I am much obliged:to the noble Lord for that reply.
Clause 3, as amended, agreed to.
Clause 4:
Restriction of private slaughterhouses
4.—(1) The power of a local authority under subsection (2) of section sixty-one of the Food and Drugs Act. 1938 (which authorises the closure of private slaughterhouses and restrictions on the establishment of private slaughterhouses in a district where the local authority have provided a public slaughterhouse), to make such a determination as is mentioned in that subsection shall be exercisable notwith- standing that the authority have not provided a public slaughterhouse, if the authority are of opinion that slaughterhouse facilities in their district ought to be abolished or reduced having regard to the existence of adequate alternative slaughterhouse facilities provided by another local authority; and subsections (3) to (5) of that section shall have effect accordingly.
(2) Where a local authority are satisfied that the slaughterhouse facilities available in their district are adequate fo.7 the time being having regard to the requirements of persons making use of such facilities, and that no additional facilities are required in the district, they may by a resolution determine that, after the date when the resolution has effect, no slaughterhouse licence will be;granted or renewed by them in respect of any premises in their district which were not licensed en that date; or that such a licence will be granted or renewed only in special cases and with the consent of the Minister of Food:
Provided that a resolution under this subsection shall not have effect until it has been approved by that Minister.
(4) Subsection (5) of section sixty-one of the said Act (under which the Minister of Food may impose conditions as to renewing the licence of a slaughterhouse exempted by a resolution under that section) shall cease to have effect.
3.45 p.m.
LORD SILKIN LORD SILKIN moved, in subsection (1), to leave out "provided by another local authority." The noble Lord said: I beg to move the Amendment standing in my name. The purpose of Clause 4 is to confer upon certain local authorities the power of making a review of the slaughterhouse facilities provided in their area, and in certain circumstances to require that some slaughterhouses shall be closed down if, in their opinion, adequate alternative slaughterhouse facilities are available. But if that is the intention, the language of Clause 4 seems to suggest that that is restricted to cases where these adequate alternative slaughterhouse facilities are provided by another local authority. That is to say,

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that if there are excessive facilities provided by another authority, then the first authority may close some of these slaughterhouses down; but if there are excessive slaughterhouse facilities which are privately owned, then the authority cannot exercise their powers to restrict. The purpose of my Amendment is to make this power general, so that the local authority can review the whole situation in their area, decide where there are excess facilities available, and close down those that in their opinion are not necessary or are badly situated. It seems to me there can be no possible objection to that. I beg to move.
Amendment moved—
Page 4, line 14, leave out ("provided by another local authority ").—(Lord Silkin.)
LORD CARRINGTON: Clause 4 (1), as the noble Lord says, empowers local authorities to pass resolutions to close private slaughterhouses and to refuse fresh licences where they are satisfied that there are adequate public slaughterhouses either in their own area or in an adjoining area. Here, "public slaughterhouse facilities" means facilities provided either by the local authority itself, or by a neighbouring local authority. We think it would be quite wrong to empower a local authority to close a private slaughterhouse merely because there was sufficient alternative accommodation in other private slaughterhouses. If the decision is merely to refuse fresh licences, this can be reached when there are sufficient facilities whether public or private, but the resolution is then taken under Clause 4 (2). But we do not think it would be right to give a local authority power in their area, where there is no local authority slaughterhouse, to close down a private slaughterhouse merely because there are too many private slaughterhouses. The noble Lord, who looks puzzled, will realise that all these slaughterhouses will have to be licensed in the first place. From now onwards local authorities will have to license, and they will not license more slaughterhouses in their area than they need. Although it is unlikely to happen, we do not think that if there are two private slaughterhouses one should suffer at the expense of another. That might well lead to a very invidious position.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I think that what the noble Lord has said will probably work out all right—I am not quite sure. The local authorities are, in fact, going to be different: they are going to be either a county council or a town council, and I think "town council" may include an urban district council. There is no exact interpretation of that term, but, I think, in many cases in Acts of Parliament "town council" is interpreted as meaning also an urban district council. At any rate, those are the only terms given in this Bill—"county council" and "town council." It looks as if you are going to prevent a slaughterhouse which has been working under control but is not satisfactory from being closed down by a local authority provided the slaughterhouse is owned privately and not -by a local authority. It may be a quite unsatisfactory slaughterhouse. There is a little danger in this, but, on the whole, I think it may work out. As I say, there is more substance in my noble friend's Amendment than appears on the surface.
VISCOUNT ELIBANK: I think exactly the same thing will happen here as happened when the Traffic Commissioners were first set up. They had to take over the existing bus services as they stood, but as the applications subsequently came along they decided on the merits of those applications.
LORD SILKIN: I must confess that I should like to look at this matter again. I have been taken somewhat by surprise by the noble Lord's answer. I did not appreciate that the intention was that, because they were private slaughterhouses, even if there were an excess of them, they would be left alone. I hope that if the noble Lord finds the same Amendment again on the Marshalled List at another stage, he will not think it discourteous on my part, but simply that I have considered his reply and am not satisfied.
LORD CARRINGTON: I should like to make this point quite clear. If in an area in which the local authority operates the local authority itself has opened a public slaughterhouse, then it can close private slaughterhouses, and if in a neighbouring area there is, in the opinion of the local authority, a public slaughterhouse that provides the necessary facilities, then the same thing applies.
LORD SILKIN: I have difficulty in appreciating the distinction and I should like to look at it again. In the meantime, I beg leave to withdraw the Amendment.
Amendment. by leave, withdrawn.
LORD CARRINGTON: This is a drafting Amendment. I beg to move.
Amendment moved—
Page 4, line 15, (cave out ("to (5)") and insert ("and (4)").—(Lord Carrington.)
On Question, Amendment agreed to.
3.54 p.m.
VISCOUNT ALEXANDER OF HILLSBOROUGH VISCOUNT ALEXANDER OF HILLSBOROUGH moved, in subsection (2), immediately before the proviso to insert:
"Every local authority contemplating such a resolution shall announce a period of not less than twenty-eight days, during which applications for slaughterhouse facilities will be entertained, and they shall make no determination until all applications received during such period have been considered:"
The noble Viscount said: I beg to move the next Amendment standing in my name. The point that has been made to me on this matter is that in the case of some local authorities the licences granted under this Bill when it becomes an Act may be considered according to the date of application. If that were so, a good deal of trouble might arise. When the local authorities have a certain number of applications, they may say that they now have sufficient for the area; and the other applications may not be considered because they were not in, as the local authority say, in time to be included in the first survey of the applications. It is suggested to me that it would be advisable to make it a condition that the local authority should give adequate notice in regard to when they are going to move the resolution referred to in the clause, and should state a given period. I have put down twenty-eight days, but I should be quite willing to let the noble Lord argue me into some other period, if he thought it more appropriate. I have put down twenty-eight days so that we might make quite sure that all previous holders of licences who want their licence applications to he considered shall have reasonable notice and an opportunity of having their applications considered. If the noble Lord could give me that in principle, and so settle in some way what shall be the period or
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how that period shall be secured, I shall be glad. I beg to move.
Amendment moved—
Page 4, line 25, at end insert the said new words.—(Viscount Alexander of Hillsborough.)
LORD CARRINGTON: I make no complaint, of course, but the noble Viscount wants to give private slaughterhouses twenty-eight days' notice, yet has given me only about an hour's notice of this Amendment—as a matter of fact, I saw it only just before luncheon. I hope, therefore, that he will not expect me to make up my mind this afternoon one way or another. I quite see what the noble Viscount has in mind, but I am not quite sure whether his Amendment would accomplish his purpose. After all, Clause 4 (2) comes into operation only when the local authority are satisfied that there arc enough slaughterhouses, and I do net know whether the fact that they had to wait for twenty-eight days would make very much difference. But I will mast certainly look at the point between now and the next stage, and perhaps communicate with the noble Viscount, if he is willing to withdraw his Amendment now.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I am obliged to the noble Lord. I shall be glad to withdraw my Amendment. I should like to point out that negotiations are going on, and the authorities may already have reached the particular point where they have a sufficient number without giving notice of their subsequent resolution. I think it is rather important to make quite sure that nobody feels afterwards that there has been an agreement.
Amendment. by leave, withdrawn.
LORD SILKIN LORD SILKIN moved to omit subsection (4). The noble Lord said: I beg to move this Amendment: it is a little complicated, but I will try to make it as simple as I can.:In order to make the position clear, one has to refer to Section 61 of the Food and Drugs Act, 1938, which provides that a local authority may pass a resolution, with the approval of the Minister, to the effect that there are sufficient slaughterhouses in the area and that they will not license arty more; or the) may even acquire some themselves. Subsection (4) of that section provides that the local authority may, with the consent of the Minister, exempt

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certain slaughterhouses from the operation of the resolution, and subsection (5) provides that in granting such exemption the Minister may impose conditions. It seems to me a reasonable provision, where an exemption is to be made, that the Minister should be satisfied that the conditions—for instance, the conditions regarding the manner in which the slaughterhouse is run—justify the exemption. The Bill seeks to repeal this subsection, and the effect would be that the Minister would either have to agree to a person being exempted or agree to his being exempted from the operation of the resolution; but he would have no power to make conditions for such exemption. The object of my Amendment is to restore what was thought a good provision in 1938 and which we think is an equally good provision to-day: that if exemptions are to be made, it should be possible to impose conditions as regards such exemptions. I hope that I have made the purpose of my Amendment clear. I hope I have made it so clear that the noble Lord will see his way to accept it. I beg to move.
Amendment moved—
Page 4. line 36. leave out subsection (4).—(Lord Silkin.)
LORD CARRINGTON: As the noble Lord opposite has said, this is a rather complicated matter. I think that he has got a good point here, and my first impulse was to accept his Amendment and let it go at that. But I then had conversations with some of his learned friends, who told me that it was not quite so easy as that, and that in point of fact it would be impossible to leave section 61 (5) of the 1938 Act in in its present form—for these reasons. In the first place, the wording leaves in doubt the existence of a local authority's discretion to refuse to renew a slaughterhouse licence on the grounds of hygiene; and, secondly, it leaves in doubt the question whether a subsequent refusal by a local authority to renew a licence is subject to appeal to a magistrates' court. As I have said, I think that the noble Lord has a point here; and we should look at it, and try to meet him, if we can. I do not think we can meet him upon the Amendment which he has moved merely by continuing
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Section 61 (5) of the 1938 Act. However, if he will withdraw this Amendment, perhaps between now and the Report stage we can devise wording which will meet his point.
LORD SILKIN: The noble Lord has been good enough to say that I have a point here. I think that he has one. It would appear that Section 61 (5) of the 1938 Act needs looking at again, and that it would not do merely to leave it in its present form. My difficulty was that it was being taken away and that nothing was being put in its place. I will certainly withdraw the Amendment to-day, on the understanding that something will be put in the place of Section 61 (5). I take it that is the intention.
LORD CARRINGTON: I should not like to go so far as to say that something will be put in its place. It may prove impossible to do that; but the intention is that we should put in something, if it is possible; and if we can we will do so.
LORD SILKIN: On that understanding, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 4, as amended, agreed to.
Clause 5:
Compensation for closure or refusal of licence
(3) For the purposes of assessing compensation under this section,—
(b) without prejudice to the foregoing paragraph, regard shall be had to any respect in which the premises would, by reason of structural defects or otherwise, have been unsuitable for use as a slaughterhouse;
and where any dispute arises as to whether compensation is payable to any person under this section, or as to the amount of any such compensation, the dispute shall be referred to and determined by the Lands Tribunal.
4.3 p.m.
LORD CARRINGTON LORD CARRINGTON moved, after subsection (2) to insert:
"(3) The foregoing subsections refer only to resolutions passed after the commencement of this Act.
(4) Where a resolution of a local authority under subsection (2) of the said section sixty-one has taken effect (whether before or after the commencement of this Act) having been passed after the first day of March, nineteen hundred and fifty-four. and before the said commencement, and a person had on the date

1005
of the passing of the resolution an interest in premises in the distract of the authority which were not on the last-mentioned date being used as a slaughterhouse but which—
(a) were on the first day of October, nineteen hundred arid thirty-nine, licensed and in use as a slaughterhouse; or
(b) not having been then licensed and in use as aforesaid, were licensed on the date of the passing of the resolution,
or in any land held with such premises, being an interest of which the value before the resolution had effect has been reduced in consequence of the resolution, then if, before the expiration of a period of fourteen clays beginning with the date of the commencement of this Act or the date when the resolution took effect (whichever is the later) that person makes an application to the local authority for the purposes of this subsection, he shall be entitled to be paid by the authority by way of compensation an amount equal to the said reduction."
The noble Lord said: This is a long Amendment but its object is simple. Since the Bill was introduced, it seems that some local authorities have already been passing resolutions under Section 61 of the Food and Drugs Act, 1938, to the effect that they will refuse to grant fresh licences for private slaughterhouses, whether the premises in question were, in fact, in use as a slaughterhouse at the outbreak of the war or not. Provision is already made in Clause 5 (2) of the Bill for the payment of compensation to persons having art interest in a private slaughterhouse which was licensed on October 1. 1939, if a licence is refused as the result of a local authority's resolution, passed after the commencement of the Act and before January, 1955. Your Lordships will see that, unless we take some action in the Bill, those persons who are affected by local authority resolutions passed before the beginning of the Act will be excluded from compensation. The object of this Amendment is to confer the same rights of compensation on those people affected by resolutions which come into force in the period from March 1, 1954, until the date on which the Act comes into operation. I beg to move.
Amendment moved—
Page 5, line 18, at end insert the said subsections.—(Lord Carrington.)
On Question, Amendment agreed to.
LORD SILKIN LORD SILKIN moved, in subsection (3) (b), after "defects" to insert "inconvenient location." The noble Lord said: We have now reached the compensation provisions of the Bill, and the subsection
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which I am seeking to amend lays down I matters to which regard has to be had in assessing compensation. One of them is the question of structural defects. Clearly, the compensation for closing down a slaughter-house that is structurally defective would not be as great as for one in good condition. The purpose of my Amendment is that there should also be taken into account the actual location of the slaughterhouse. If it is one which, by reason of its inconvenient location, would cleat/ have to be closed down, then that is a matter which ought to be taken into account. The slaughterhouse might be so inconveniently located that it would be of very little use, or would be likely to be of very little use. I submit that that is a fact which ought to be taken into account in assessing compensation. For these reasons I bog to move this Amendment.
Amendment moved—
Page 5, line 29, after ("defects") insert ("inconvenient location ".—(Lord Silkin.)
LORD CARRINGTON: When I saw this Amendment on the Marshalled List I did not understand it: and, I am not altogether sure that I understand it now. I do not understand the meaning of the words, "inconvenient location." Inconvenient to vvhom?—to the trader, to the public, to the local authority? I think that this Amendment, if accepted, would be rather confusing. Its intention is that, in assessing compensation, any assessor should have regard not only to whether premises are structurally unsuitable but also to the question of locality. Without fuller definition of what "inconvenient location" means, I suspect that the words would only cause confusion. And in some cases the effect of this Amendment might even be extremely unfair. For instance, it 'would be unreasonable, I think, that a trader's compensation should be reduced merely because a slaughterhouse was inconveniently situated in relation to his own trading premises. After all, that is his concern. If he was, apparently, prepared to use those premises in spite of inconvenience, there seems to be no reason why his compensation should be reduced.
From the point a: view of the local authority, and from the point of view of the general public the words "inconvenient location" probably mean the same thing. I do not know whether that

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is so; it may be so or it may not, but I think it is more than likely that they do. For instance, premises might be unsuitable because they are close to residential property, or because cattle have to cross a road near a house. But it would be a little unfair that a trader's compensation should be reduced because a house had been built since the erection of the slaughterhouse. In that case, the "inconvenient location" would not be due to any fault of the trader. It would be the circumstances which had changed, not the trader's property. Of course, in so far as it would be right that the factor of "inconvenient location," from the trading standpoint, should affect compensation, I think that would necessarily be taken into account in the application of the formula for compensation, which is one of "willing seller and willing buyer." From that point of view, I think that "inconvenient location" would be taken into account. I do not think the noble Lord's Amendment would help matters very much—indeed, it would probably make confusion worse.
LORD SILKIN: I confess that I was not very happy about these words. I put them down in order to raise the question, because I think that the location of the slaughterhouse is a factor which should be taken into account. I recognise that these words do not really carry the matter very much further. It might be that "inconvenient" might be left out and only the word "location" left in. I think my best course is to withdraw this Amendment to-day, to think again, and, possibly, put something down at a later stage of the Bill. I am sure that something ought to be done to meet this point. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
4.10 p.m.
LORD SILKIN LORD SILKIN moved, in subsection (2), to add to paragraph (b):
"and to any grants. contributions or other payments made out of moneys provided by the Exchequer in respect of additions or improvements to such slaughterhouse."
The noble Lord said: If moneys were provided by Parliament, as I understand certain amounts of moneys were provided by the Exchequer during the war, in respect of additions and improvements to slaughterhouses, it would
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be wrong that the owner of a slaughterhouse should be given compensation in respect of additions and improvements which have been paid for by the Exchequer. Therefore, the purpose of this Amendment is to provide that where such payments have been made, they should be taken into account in assessing compensation. I beg to move.
Amendment moved—
Page 5, line 30, after ("slaughterhouse") insert ("and to any grants, contributions or other payments made out of moneys provided by the Exchequer in respect of additions or improvements to such slaughterhouse.")—(Lord Silkin.)
LORD CARRINGTON: I quite see the intention of the noble Lord's Amendment, but I hope to prove to him that it would be unjust. Will he visualise the way things are going to work? A slaughterhouse has been requisitioned from a private individual, and While under requisition and operated, probably by the Minister of Food, sums of money have been spent by the Treasury on it. When it is handed back to the private individual, the terms of settlement have regard to the improvements made out of public funds, so the private individual will have paid betterment, to use an agricultural term, for the improvement in the condition of his property from the time it was requisitioned by the Government until the time he got it back. I should think it most unjust, he having paid for those improvements in the terms of settlement, to say that he shall get less compensation from the Government because those improvements have been made. Therefore, I hope the noble Lord will not press his Amendment.
LORD SILKIN: In the particular case the noble Lord has exemplified I can see it may well be so, but I should like to be satisfied that that is the only kind of case in which money has been provided by the Exchequer. I had understood that moneys had been provided in cases where the slaughterhouse had been retained by a private person and there had not been any accountability for the improvements provided by public money.
LORD CARRINGTON: I checked that, and so far as I know there has been no case in which public money has been spent on a slaughterhouse which has been

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retained in private hands. The only cases in which grants of money have been given have been those of slaughterhouses requisitioned by the Government.
LORD SILKIN: On the noble Lord's assurance that this expenditure is inevitably taken into account when a slaughterhouse is handed back to a private individual, I agree that it would be unfair to penalise him once more when it is taken back by the local authority. I accept that assurance, and on that assurance I beg to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 5, as amended, agreed to.
Clause 6 [Interpretation (Part I)]:
LORD CARRINGTON: This Amendment and the next one are little more than drafting. Their object is to set out in full a definition of "slaughterhouse facilities" so that it can he read in conjunction with Clause 1 (2). As the Bill is now drafted there is a definition of "slaughterhouse," and "slaughterhouse facilities" are to be construed accordingly. I beg to move.
Amendment moved—
Page 6, line 9, leave out ("and the expression").—(Lord Carrington.)
On Question, Amendment agreed to.
LORD CARRINGTON: I beg to move the next Amendment.
Amendment moved—
Page 6, line 10, leave out from ("facilities") to end of line 11 and insert (" means facilities for carrying on the activities of a slaughterhouse, including the services of persons as slaughtermen or otherwise;".)—(Lord Carrington.)
LORD SILKIN LORD SILKIN moved, as an Amendment to the proposed Amendment, after "services of" to insert "adequately trained." The noble Lord said: This is a simple Amendment designed to ensure that persons who are employed in slaughterhouses should be adequately trained. I am not certain that this is the right place in which to insert these words and if the noble Lord thinks it is not I shall not quarrel with him. I want to get over the point that it is necessary, particularly now that the definition has been extended to include "the services of persons as slaughtermen or otherwise", that slaughtermen should be properly trained and that the slaughtering of animals should not be done by amateurs
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or butchers with no experience. I know the difficulty. I know that during the war a good many slaughtermen have gone out of existence and there is likely to be a shortage, bat it is important that ultimately we should get back to the conception that this is a skilled job to be done by people who have been adequately trained. I have put down this Amendment to secure by some form of words that we get adequately-trained people employed. I beg to move.
Amendment to Amendment moved—
Line 3 of the Amendment. After ("services") insert ("adequately trained ").—(Lord Silkin.)
LORD CARRINGTON: I appreciate what the noble Lord is seeking to do, but I think it is already covered and I know this Amendment would not help. As the noble Lord suspected, I think it is in the wrong place. But let me see whether I can reassure him on the major issue. As he will know, under the Slaughter of Animals Act, 1933, all slaughtermen are required to be licensed, and under that Act, before granting or renewing a licence, a local authority are required to satisfy themselves that the applicant is a fit and proper person. Therefore slaughtermen would be adequately trained because they are licensed under the Act. Indeed, there is a training scheme. Where the words of the Amendment would cause confusion is in regard to the provision of services by other people. We may say "adequate training": but adequate in whose opinion? I think it could only be in the opinion of the local authority who are employing them, and if they did not think they were fit people, presumably they would not employ them. They would be unlikely to employ people who did not do their jobs properly and so lay themselves open in many cases to civil action for damage to the carcases and byproducts of animals. There will be other employees who perform humble duties like washing down floors. We could not expect them to be "adequately trained" in washing down floors. I think the real point the noble Lord has in mind has already been, provided for by the Slaughter of Animals Act, 1933. I hope he is satisfied that his point is covered if a slaughterman has to be licensed and if in renewing his licence a local authority are required to satisfy themselves that he is a fit and proper person.
LORD GLYN: I should like to raise a point on this Amendment which is of some importance. There is at present a great shortage of slaughtermen. The real bother is that this Bill has been brought forward as a matter of great urgency, but it is no use carrying legislation to put up slaughterhouses if there are not the trained slaughtermen, because they will not be allowed to operate. At the present moment it is difficult to get an abattoir owned by the Ministry of Food to take apprentices; for some reason, they refuse to do it. There is a scheme under the Industrial Council for training slaughtermen. Most of the trained slaughtermen have gone out of business because nowadays, in most places, a shop is not, truly speaking, a butcher's shop; it is a flesher's shop, as they call it in Scotland—they take the carcases and sell them to their people. Where, in a small town, it is necessary to help agriculture by having, efficient slaughterhouses, it is vitally important that there should be training facilities to ensure that under the Slaughter of Animals Act the standard will be maintained; and that animals are not slaughtered under conditions of amateur handling, which can lead to great scandals, and which, incidentally, spoils the value of the carcase and the hide, and makes it impossible for the medical profession to obtain the offals necessary for making certain drugs. I hope that the noble Lord in charge of the Bill will see that these matters are provided for somewhere in the Bill, because if they are not, we shall not get enough trained slaughtermen.
VISCOUNT ALEXANDER OF HILLSBOROUGH: We are indebted to the noble Lord for the aspect of the case which he has just put. He has put it in more detail, from one angle, than I could, because of his connection with research. When I saw the Government Amendment for the first time I thought it meant that consultation had been going on between the local authorities and the trade unions. Obviously the trade unions have great concern in the matter. The noble Lord who has just spoken will realise how important it is for them that in a development of the large-scale abattoir—and that is the outward objective of this scheme—we shall not get a proper service from slaughtermen without the full agreement of the trade
1012
unions, which do not regard any person as a slaughterman, properly officiating and trained, unless he is a full-time employee. The trade unions make a great point of that. I have had contact with a number of traders in the last two or three weeks, and, whereas in some areas it seeems that there would be considerable advantage if some of them could be persuaded to apply for a renewal of a pre-war licence to assist in the present difficulties, they are holding back. They are doing so, first, because there is an insufficient supply of slaughtermen; and, secondly, because the trade unions, with whom they have connections in other respects, are not willing to recognise the old type of employee—a man who was, perhaps, the assistant in a butcher's shop for half of his time, or more, and an assistant in the small abattoir connected with the business for the remainder of his time. That has become a matter of major trade union importance, and this Amendment is important from that angle, as well as from the aspect brought to your Lordships' attention by the last speaker.
VISCOUNT ELIBANK: As a party to the original Humane Slaughter Bill in another place, I feel that this is one of the most important points in the Bill. I gather from the noble Lord, Lord Carrington, that he is going to see that this point is covered, and that possibly it is already covered by the 1933 Act. I should like to ask whether it is covered by the 1933 Act in relation to Scotland. Perhaps the noble Lord cannot answer that question off hand, but I should like him to look into it.
LORD CARRINGTON: I am afraid that I cannot answer the point about the application of the Act to Scotland, because I was dealing with it only in reference to the Amendment to Part I of the Bill. However, I will look into it and let the noble Viscount know. I am grateful for what my noble friend Lord Glyn and the noble Viscount, Lord Alexander of Hillsborough, have said. We have very much in mind the point about the provision of trained slaughtermen. I cannot say more about it now, except that I will certainly bring to the attention of my right honourable friend the Minister of Food what my noble friend Lord Glyn has said: and perhaps we may have a talk about it between now and the next stage of the Bill.
THE EARL OF MANSFIELD: Be Fore we pass from this matter, I would paint out that no mention has been made by the noble Lord, Lord Carrington, of the statement made by the noble Viscount, Lord Alexander of Hillsborough, that the trade unions are unwilling to agree to the employment of other than full-time slaughtermen. Surely, that is a matter that requires careful consideration. I can visualise that local slaughterhouses, which might well be of advantage to the community, might not be in a position to employ a man full-time. I agree that slaughtermen should be fully qualified and competent, but if a condition is to be made that they must be employed full-time that may not be of benefit to the community in many smaller areas.
LORD SILKEN: I feel that this is one of these points that ought to be mentioned somewhere in the Bill. I am quite prepared to accept the view that this Amendment is not in the hest place, and also that the point may be covered. Even so, I feel that some reference ought to he made to the question of the provision of trained slaughtermen. In this Bill there is a good deal of repetition of what is already contained, say, in the Food and Drugs Act, 1938.
LORD CARRINGTON: I thought the noble Lord's complaint earlier on was that it was not repeated.
LORD SILKIN: The noble Lord tried to counter that. We have got this:Bill as it stands, and since the principle of repetition is accepted by the Government, we may as well put in the Bill something on which there is a certain amount of feeling. However, I am prepared to accept that this Amendment will not do it and I beg leave to withdraw it.
Amendment to Amendment, by leave, withdrawn.
On Question, Amendment agreed to.
Clause 6, as amended, agreed to.
Clause 7 [Duty of local authorities in regard to slaughtering facilities]:
LORD SILKIN: The noble Lord. Lord Carrington, accepted the first Amendment that I moved to this Bill. I have no doubt that he will treat the last Amendment which I move in exactly the same way. I beg to move.
Amendment moved—
Page 6, line 32, leave out ("Until Parliament otherwise determines ").—(Lord Silkin.)
LORD CARRINGTON: The noble Lord is quite right.
On Question, Amendment agreed to.
Clause 7, as amended, agreed to.
Clause 8 agreed to.
Clause 9 [Registration in respect of private slaughterhouses]:
LORD CARRINGTON LORD CARRINGTON moved to add to the clause:
"(4) .A local authority may for the protection of the pub It: health prohibit the slaughter on any' premises, in respect of which a person is to be registered in pursuance of this section, of any kind of animal other than that specified in the certificate relating to those premises to be issued under the last foregoing subsection."
The noble Lord said: The object of this Amendment is to allow local authorities in Scotland to specify, if necessary, the kind of animals which may be slaughtered in a slaughterhouse which they propose to register. It may be, for instance, that in premises which are rather out of the way the actual facilities are all right for slaughtering sheep but may not be all right for slaughtering cattle. The kcal authorities in Scotland wish to discriminate in this way. In addition, I believe that it will help them having regard to the need for an adequate meat inspection service. I beg to move.
.Amendment moved—
Page 8, line 5, at end insert the said subsection.—(Lord Carrington.)
THE EARL OF MANSFIELD: Can my noble friend explain why the conditions are different in regard to England and Scotland?
LORD CARRINGTON: I asked the same question. I think the reason is that we have not quite caught up; but I think we may catch up on the Report stage.
On Question, Amendment agreed to.
Clause 9, as amended, agreed to.
Clause 10 [Refusal and cancellation of registration]:
LORD CARRINGTON: This is a consequential Amendment. I beg to move.
Amendment moved—
Page 8, line 33, at end insert—
("(4) A local authority may for the protection of the public health vary any registration

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under the last foregoing section by prohibiting the slaughter on any premises to which the registration relates of any kind of animal other than that which may be specified by that authority.").—(Lord Carrington.)
On Question, Amendment agreed to.
LORD CARRINGTON: These Amendments also are consequential. I beg to move.
Amendment moved—
Page 8, line 34, leave out ("or cancel") and insert (", cancel or vary ").—(Lord Carrington.)
On Question, Amendment agreed to.
Amendment moved—
Page 9, line 3, leave out ("or cancel") and insert (", cancel or vary ").—(Lord Carrington.)
On Question, Amendment agreed to.
Amendment moved—
Page 9, line 15, leave out ("or cancel") and insert (", cancel or vary ").—(Lord Carrington.)
On Question, Amendment agreed to.
Clause 10, as amended, agreed to.
Clauses 11 to 15 agreed to.
Clause 16 [Interpretation (Part II)]:
LORD CARRINGTON: This is a little more than a drafting Amendment, but not much. It deletes the provision that the term "slaughterhouse facilities" shall be construed in accordance with the definition of "slaughterhouse," since the meaning given to these words does not seem sufficiently wide. The alternative would have been to enlarge the definition of "slaughterhouse," but it has been thought in this case that "slaughtering facilities" can be best left to explain itself. I beg to move.
Amendment moved—
Page 12, line 15, leave out from ("therewith") to the end of line 17.—(Lord Carrington.)
VISCOUNT ELIBANK: This Amendment does not make any structural alteration in the Bill. It is merely a technical and drafting point?
LORD CARRINGTON: Yes.
On Question, Amendment agreed to.
On Question, Whether Clause 16, as amended, shall stand part of the Bill?
VISCOUNT ALEXANDER OF HILLSBOROUGH: I see that I was falling into an error earlier in the Committee stage when I referred to the interpretation of local authorities. I see that it relates only to Part II of the Act, and that there is no such interpretation in Part I. Does the interpretation in the case of Scotland apply also to England? Is a town council to be regarded as an urban district, as well as a borough or a county borough council?
LORD CARRINGTON: I am not altogether sure. I think the answer is that "local authority" is a term which is well known in all these matters. For instance, the noble Viscount mentioned county councils. They are one of the people who do not have anything to do with it. Only urban, rural and borough councils are concerned. I will check that statement, and perhaps I may write to the noble Viscount.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I thank the noble Lord.
Clause 16, as amended, agreed to.
Clauses 17 and 18 agreed to.
Clause 19 [Expenses]:
LORD CARRINGTON: This is a drafting Amendment. I beg to move.
Amendment moved—
Page 13, line 7. leave out ("(4)") and insert ("(3)").—(Lord Carrington.)
On Question, Amendment agreed to.
Clause 19, as amended, agreed to.
Remaining clause and Schedule agreed to.
House resumed.

JUDGES' REMUNERATION BILL
4.35 p.m.
Order of the day for the Second Reading read.
THE LORD PRESIDENT OF THE COUNCIL (THE MARQUESS OF SALISBURY): My Lords, I rise to move the Second Reading of the Judges' Remuneration Bill. This Bill, I hope, will he regarded in all parts of the House as coming in the category of non-controversial. I would, indeed, myself he inclined to put it in the further category of "long overdue," for the salaries of the High Court. Judges, which form. of course, the largest proportion of those affected by this increase, have not altered since 1832, which is over 120 years ago. Though the positions of the Lord Chancellor, the Lord Chief Justice and the Master of the Rolls have been reconsidered since that date, the Lord Chancellor's salary has riot been increased, and I think I am right in saying that the salaries of the Lord Chief Justice and the Master of the Rolls actually went down in 1851, the Lord Chief Justice's from £10,000 a year to £8,000 a year, and that of the Master of the Rolls from £8.000 a year to £6.000 a year. They have never been raised since. Yet during the whole of that period, from 1851 to now, the value of money, as we all know, has fallen to a fraction of what it was at that time, and taxation, both direct and indirect, has gone up by leaps and bounds. As a result, the salaries of our Judges, I believe it has been calculated, now amount in real money, in real value, to about only one-sixth of what they were 120 years ago.
It may be said that Judges are not unique in that. It is, of course, the common experience of all those who have to live upon fixed incomes. It has been, I expect, the personal experience of a good many of your Lordships. But Judges are penalised in a way that, a good many of us are not. The vast majority of the British people, if they are hard hit by heavy taxation or by rises in prices, can always turn their hand to supplement their income by going into business, by writing for the Press, or in a thousand other ways which your Lordships can think of for yourselves. But a Judge, as I understand it. cannot do things of that kind. He has
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to lead what may be described as a dedicated life. It is the very essence of the position of a Judge in this country that he must keep himself aloof from anything which could be conceivably open to criticism or even controversy. He must not lend himself to anything which could in any way affect the integrity of his judgment. He must be absolutely above suspicion of any bias or personal interest. That is clearly:right, I am sure we should all agree.
But I do not think any of us entirely realises what a vital part the Judiciary plays in the whole of our social and constitutional system. We talk easily, almost glibly perhaps, of the liberties of our people and the rights of equal justice which are enjoyed by every free Englishman, but we do not always stop to think that those rights and liberties have to be preserved, and, in fact, can only be preserved by an independent and incorruptible Bench. I suppose that the most important of all the features of our British way of life is the Judiciary's complete independence of the Executive. A judge has to decide the case before him always, to use the old phrase, "without fear or favour, affection or ill will." His conclusions must he based, first, on what is known as the Common Law of England, and also, of course, upon the legislative enactments of the Crown and Parliament. Secondly, he has to depend on that great body of legal doctrine which has been enunciated by his brother Judges on the Bench in the past and at the present time, and on the interpretation which has to be put upon that legislation. But that is all. No other considerations but those can influence him.
In his judicial capacity he has a heavy responsibility to bear. He has to do justice. first of all, between man and man, and he has also—and this is becoming, I imagine, more important with every year that passes, now that the State plays such a large part in. our lives—to do justice between. the individual citizen and the State. Ha has to ensure that the Administration conforms with the law, and, in particular. that the powers which are exercised by the Executive conform with the law. To the proper performance of all these weighty functions it is essential that there should be an absolute independence of the judiciary from the

1019
Executive, and that 'that independence should always be maintained. No doubt, the position of a Judge vis-à-vis Parliament is in some respects not quite the same as that of a Judge vis-à-vis the Executive, for while a Judge, quite rightly, cannot, in any circumstances, be removed from his position by the Executive, he can, of course, be removed by an Address of both Houses of Parliament which is the sovereign power under the Crown.
But even Parliament has put Judges in a very special position. It has taken the precaution, as we all know, of charging their salaries on the Consolidated Fund, so that they are not subject to the annual scrutiny of Parliament; it has also eschewed the right to criticise Judges in their judicial capacity. Parliament, which represents the British people, the whole electorate of the country, has throughout history been at special pains to protect the independence of the Judiciary. This, I should have thought, was both natural and right. After all, the legislation that rules our lives is, in fact, the joint creation of Parliament and the Bench; Parliament decides what the law ought to be, and the Bench decides what in fact it is. As I see it, the work of Parliament largely depends for its effectiveness on the fact that both Parliament itself and the individual citizens of the country know there is behind it the Judiciary, which not only applies and enforces the law, but interprets it, where necessary, with high integrity and vast professional skill. I imagine that there can be no profession where professional skill based on long experience is more necessary than in the case of the Judiciary.
I am sure I have said enough to show that the discharge of judicial duties as they are conceived in this country requires qualities of the highest kind, both of mind and of character. In a position such as that, we clearly need the best men we can get. I do not say, of course, that the type of man one gets in a position of that kind depends on the reward which one gives him; that would be far too great a simplification and I think it would not be fair to those great men who have become Judges in this country. But it surely is necessary, I should have thought, that the reward
1020
which we give to a man of that kind should be enough not to inhibit him from accepting promotion to the Bench; and it should be adequate, too, to keep him from gnawing anxieties while he is on the Bench. I remember that is an aspect which we discussed when we were in the other place during the war, in connection with another Bill of a rather similar kind.
In this country, as your Lordships know, superior Judges are normally recruited from the Bar, and a successful practitioner at the Bar, even in these hard days, can. I imagine, earn a very substantial increment. It would be surely absurd, and I think very wrong, if it were to be found, when it was proposed to promote a man from the Bar to the Bench, that the pecuniary sacrifice in which he would be involved in taking these new responsibilities would be so great that he simply could not afford this promotion, and that, therefore, the State should be deprived of the services of the best men for these vitally important posts. As I am sure the noble and learned Earl, Lord Jowitt, will agree, that is the point which we are very nearly reaching in this country at the present time.
I suggest, therefore, that the case for an increase in the salaries of our Judges is unanswerable. The only question is what ought that increase to be? Clearly it is desirable to give them a sum which will not have to be reviewed again in the course of a few years. A Judge's salary is not the sort of thing which ought to be constantly altered with every fluctuation in the cost of living. No doubt, we have delayed rather too long this time; but that is no reason for rushing to the other extreme. That is the main reason why in the Bill, which as your Lordships will remember came before Parliament last Session, the Government proposed to deal with this problem by making a portion of the Judges' salaries tax free, for it would have given a certain stability to those salaries against fluctuations in direct taxation. But Parliament, in its wisdom, clearly did not like that proposal: and, no doubt, to pay salaries tax-free does create, or might create, a dangerous precedent of a privileged class which might be further extended.
The Government accept that view and they have therefore decided, as your

1021
Lordships know, not to press that proposal further, and they have turned to possible alternatives. There is, of course, no question of putting Judges into the position that they occupied a hundred years ago: that would be, if I may use a colloquialism, to cock them up "higher than practically all their fellow citizens. I am certain that the Judges themselves would not desire that. Any decision which can be taken on this subject, whatever decision it may be, must be open to criticism by someone; but, after weighing all the considerations which have to be taken into account, the Government, as your Lordships know, have come down in favour of a proposal to grant an increase of £3,000 a year gross salary, with rather smaller increases of £2,000 a year in the case of a Lord Chief Justice and a Lord Chancellor. It will not mean, of course, that Judges will get all that money; they will not get the whole of that amount because it is subject to taxation. In the case of a Judge who has no other source of income, who is married but has no children, a fairly average case I think, the net increase will, in fact, be £734 a year. In the case of the most highly paid offices, that is to say the Lord Chief Justice and the Lord Chancellor, what the Government propose is to give an increase of £2,000 a year. That will mean a net increase, in circumstances similar to those which I have already described with regard to the High Court Judges, of, for the Lord Chief Justice. £355 a year, and for the Lord Chancellor. £284 a year—not very enormous increases.
In the case of my noble and learned friend the present Lord Chancellor, I am afraid it means, indeed, no increase at all, for he, if I may make such an explanation to your Lordships in his presence, feeling deeply the importance of this measure and wishing to be entirely free to advocate it, has made it clear to the Government that he does hot intend to draw any additional salary, and he has authorised me to say this in your Lordships' House. In case any noble Lord is interested in the question of pensions, I should add that this Bill will not affect pensions at all. They were dealt with, as the House will remember. in the Administration of Justice (Pensions) Act, 1950, and the Government do not propose to make any further change. Such is the Bill which it is my
1022
agreeable duty to recommend to your Lordships this afternoon. The increases, I agree, are certainly not princely, if I may use such a word; but they are, I believe, the least on which the high standard of the Judiciary can be maintained. It is in that: spirit that I commend the Bill with confidence to your Lordships. I beg to move that the Bill be read a second time.
Moved, That the Bill be now read2. —(The Marquess of Salisbury.)
4.50 p.m.
EARL JOWITT: My Lords, I so entirely agree with the observations which the noble Marquess who leads the house has just made that there is really no reason why I should trouble your Lordships at all. However, I think it might be desirable that this Bill should have our blessing from this side of the House as well as the blessing of the Government side. I congratulate the Government; I congratulate the Loaf Chancellor: and I congratulate the noble Marquess that he has been able to introduce this Bill. I am probably revealing no secret to him, or to the noble and learned Lord the Lord Chancellor when I say that I hoped I might be able to introduce a similar Bill. I had to induce the Chancellor of the Exchequer to agree to an increase for the county court judges, and I succeeded in doing that. But, having achieved one increase, it is always desirable to have a little pause before tackling the next problem; and the next problem was that of the High Court Judges, which is now being tackled.
I do not, unfortunately, go back in my memory for 120 years, when the Judges' salaries were then increased to £5,000 a year; but I remember the time before the war. and I knew a good many of the Judges at that time. It is rather interesting to see what is the position of a Judge to-day, if he is a married man with no other income at all, compared to his position in 1913, before the First World War. Then and now the nominal salary was £5,000 a year.. Then, taxes would have left him something like £4,500 of his income. To-day, taxes take away half his income, so he is left with £2,500. But the £2,500 which he gets to-day is nothing like the £4,505 which he got in 1913. I am told—many

1023
of your Lordships will know far better than I do what would be the right figure —that the approximate equivalent to-day is something like £850. So to-day the Judges' equivalent salary is £850, as compared with £4,500 before the First World War.
The noble Marquess has put his finger on the real necessity of this Bill. It is not, of course, that any of the existing Judges will do their work any better because they are receiving a rather larger salary, an extra five, six or seven hundred pounds net. But it is this. I became concerned in my time about the very problem which the noble Marquess mentioned, about inducing the right sort of people to leave the Bar to become Judges. I also think that a change has come over the situation in the universities since my young days. When I was there, I believe, young men who got a very good "First" used generally to regard themselves as marked out for the Bar; they used to go for the Bar, and formed an immense reservoir of promising young people from whom to draw. According to what I hear from the universities, that is not so to-day. After all, the man who goes into business, and devotes himself to his business, may be able, by building up his business, to bring forward an asset for himself which does not hear tax. He starts with a business which is worth very little; he works it up and develops it, and it becomes worth a great deal; and when he wants to sell it, he can. But the barrister and the Judge are shorn lambs before the wind of the Revenue officials. They cannot do anything of that sort. I feel that, unless we promise a reasonable remuneration for our Judges, there is a danger that we may not recruit the right sort of man. That situation has not arisen yet: I pray God that it never will. But I believe there is that danger.
I think our forefathers were very wise men when, one hundred and twenty years ago, they arranged to pay their Judges a salary which in those days must have been princely. I believe that we have profited down the ages from the wisdom of our forefathers, because I believe this simple faith—I believe that in a democracy the foundation rock on which it is built must be the due administration of justice. I believe it to be a fact that
1024
every citizen knows that he will get his case fairly and honestly heard and disposed of. That prevents him from seeking to take the law into his own hands. I believe that we cannot lay too great a stress on the vital importance of the due administration of justice. If we are to have, as thank God we have had for many years, justice properly and well administered—and I do not think I am prejudiced or partial when I say I honestly believe that justice is better administered in this country than in any other country in the world—we must draw the right sort of man. Therefore, I agree with the noble Marquess, that this Bill is long overdue. I am very glad that it has been introduced, and I believe that the concessions which are being made—I do not discuss quantum, or the extent of them, or anything of that sort—are on the right lines. Therefore, for what it is worth, I certainly give this Bill my support.
4.58 p.m.
VISCOUNT SAMUEL: My Lords, this Bill will, of course, receive the assent of all in your Lordships' House. It is a very moderate recognition of an overwhelmingly strong case. The British Judiciary is one of the prides of the nation. Its fame is world-wide. I do not think I remember ever reading a more noble tribute paid by a statesman of one country to an institution in another than the observation made by Taine, the French statesman and historian, who said once:
"If Justice had a voice, it would speak like an English judge."
It should be a great source of satisfaction and pride to the whole of this country that one of our institutions, not only stands so high in our own eyes, but is famous throughout the world. Listening to the noble Marquess's introduction, and the warm tributes he paid to the Judiciary, one might have expected something more substantial as the outcome. I was indeed glad when the former proposal to give a tax-free allowance to the Judges was, on consideration, not proceeded with, for it would have formed a most dangerous precedent. Many others, not having the same right, would press Parliament for some consideration of that kind, and a good deal of the revenue of the State might ultimately be eaten away by tax-free grants. But the amounts which are now in fact being given are exceedingly small.

1025
Parliament says, "You Judges have served your country well. You may have given up the possibility of much larger incomes at the Bar. It is essential to maintain the. status and dignity of your illustrious offices, and we are now going to vote you a sum of no less than £3,000, a year. They receive the £3,000, but round a corner are waiting the Inland Revenue, who promptly take away in income tax £2,250, so that the Judges, in the end, receive only £750—ar d a very depreciated £750 at that. After all it is not very much. It rather reminds me of Falstaff's
"a ha'porth of bread for this intolerable deal of sack."
However, it is difficult to devise any other means by which we can meet this need. I do not know whether I ought to say this, but I have it in mind to say it, and I feel that I must. I am rather sorry that the noble and learned Lord the Lord Chancellor thought it necessary to decline his share of this very modest grant. It shows a sensitive honour, but it was more than the case required; and I think that later on he should reconsider it and, since the thing is obviously just in itself. he should not he unjust to himself—I am sure that would he the feeling of every one of us. But still, it is his own desire and wish, and we recognise the high sense of duty which has prompted him to take that course. For the rest, I feel sure that your Lordships will pass the Bill with unanimity.
5.1 p.m.
LORD SILKIN: My Lords, this Bill has been moved and supported with such eloquence and dignity that it would need nothing more from any side of the Howe in support, except that I feel that something might he said from persons who are other than Leaders of the three Parrties. There is little I can add to what has been said. One of the most important of the functions of our Judiciary is that of judicial interpretation. In our present complex system of society, this is an increasingly important function. I know that Judges are said not to alter the law, but merely to interpret it; but the process of interpretation of our laws is such that, in fact. they have to keep abreast of modern thought, modern requirements and modern outlook. This requires an exceptionally high standard from our Judiciary, and they have lived up to it.
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I can quote instance after instance where this doctrine of judicial interpretation of our Statute Law has enabled society to keep pace with modern requirements.
From my own personal experience, I can confirm that there are at the Bar a number of men of the highest possible standing who have not seen their way to accept judicial office. One cannot altogether blame them. They have become accustomed. to a certain standard of living. Where a man has domestic responsibilities, he has to consider people other than himself; and it is very hard to ask such a man to accept a considerable sacrifice, not only for himself but for those dependent upon him, in accepting an office of this kind. One hopes that, little as it may be, this addition to the Judges' remuneration, the increase in status which it establishes, the recognition by the general public of our Judiciary and the fact that this Bill will have gone through both this House and another place without any dissension, will afford to those who are in the running for high judicial office some temptation to accept the position of a Judge.
In regarding the salaries of the High Court Judges, it is impossible to close our minds altogether to the doctrine of relativity and the question of repercussions. It is one of the features of our economic life that whenever something is clone for A, B considers whether as a -result he has any claim,. Whilst no claims have been pat forward by anybody, I should like to make it clear that when we consider the Judiciary and the judicial system of this country, we are considering not merely the High Court Judges, but all those concerned in the administration of justice, including county court judges, stipendiary magistrates, and even masters of the Supreme Court. It is true that about two years ago we did something for the county court judges and the magistrates but if, as we all agree, the remuneration of the High Court Judges is inadequate, I am bound to say that I regard the remuneration of the county court judges, stipendiary magistrates and the masters of the Supreme Court, as equally inadequate, in spite of the increase which they received some two years ago.
Of course, this Bill is not designed to deal with that matter, and perhaps this is not the proper time or place to press these

1027
claims. I feel, however, particularly justified in doing so to-day because, when the question of the increase in the remuneration of county court judges and magistrates came before us on February 28, 1952, I voiced my own view, that I thought the increases were inadequate, and I said that I would raise the matter again. I hope the noble and learned Lord who sits on the Woolsack will not mind my saying that he gave me some encouragement. I have here what he said. I will not quote it, but I will paraphrase it. He said, "Good luck to you; go ahead," and I am doing so. I want to say, with all the force that I can, that having regard to what the noble Marquess and others have said about our Judiciary, a remuneration of £2,800 a year for a county court judge, and a remuneration of £2,500 a year for a stipendiary magistrate, is hopelessly inadequate; that if we think that £5,000 is inadequate for a Judge (as I do, and as I think we all do), if we feel that anybody on the Bench should be free from financial anxiety, as I am sure we do, we ought to look again at the remuneration of the county court judges, the stipendiary magistrates and the masters of the Supreme Court, who have very important and responsible functions.
I know that this sounds like another round of increases which are so common in industrial life—this is about the time of the year when they usually come up—but members of the Judiciary have no trade union and they make no representations. There is no concerted action; they rely entirely on the honour and good will of public and Parliament; and I hope that my words will have some effect in inducing Her Majesty's Government to give reconsideration to the position of other members of the Judiciary who are not being treated as the Judges of the High Court are being treated under this Bill. I have great pleasure in supporting the Bill; nothing that I have said reduces my satisfaction at the Bill; but I felt it necessary to put in a plea for the less fortunate brethren of the Judiciary.
5.9 p.m.
LORD MILNER OF LEEDS: My Lords, most of what can usefully be said has perhaps been said on this subject, but I should like just to add a word of
1028
support to what my noble friend Lord Silkin has said, and to offer one or two other observations which I trust will not be regarded as unhelpful. First, I should inform your Lordships that I am authorised by the Council of the Law Society, on which I sit, and which, as your Lordships' know, represents the solicitors' branch of the profession, to say that they fully support the Second Reading of this Bill. The Law Society believe that—as indeed has been said to-day—the administration of justice in this country is the best in the world, and that this is largely due to the position of independence occupied by the members of the Judiciary and to the character of those who occupy the Bench in their various judicial capacities.
There are two observations which I should like to offer on my own account. The first is to emphasise what has been said as to the difficulty that may arise in obtaining recruits to the High Court Bench. The position of Judge is undoubtedly one of great honour and dignity. No doubt, that, in itself, has been a very great inducement in the past; but having regard to the scales of taxation from which we all suffer, it may not be an equal inducement in the future. Undoubtedly, there are members of the Judiciary to-day who have very considerable difficulty in carrying on. I myself met one occupant of the Bench a few months ago who told me, quite seriously, that he was considering resigning and returning to his practice at the Bar. If that happened, even in a single case, it would clearly be regrettable, from quite a number of points of view. It would be equally regrettable if men of the highest legal acumen and character were not willing to be translated to the Bench in the future. That is a very genuine and very real danger.
I think it is often forgotten that the important consideration in these days of high taxation is not so much the remuneration or the salary which one receives; it is rather a question of the responsibilities one has to fulfil. A member of the Bar, in good practice and earning a substantial income, may have undertaken responsibilities of one sort and another— it may be by way of a substantial insurance or, possibly, the purchase of a house, which he could well do on a gross income of £20,000 a year in

1029
former days, but which it is quite impossible for him to keep up on £5,000 a year in these days. In many other ways he may have given hostages to fortune. A good deal is said nowadays about "the rate for the job." Clearly, we are all agreed that the rate for this particular job is not sufficient. And, indeed, it may not be sufficient, but I hope that the present increase may help to enable us to obtain the right men to do the job —which is the essential thing. The country must bear in mind that the man who occupies a position of the sort we are discussing must have an easy mind, and that financial difficulty destroys the possibility of having such a mind.
There are one or two factors on the other side which we ought not to forget, particularly, the factor of the pension. There is a pension attached to the position of High Court. Judge, which is not the case with many other people—with the practising barrister, for example, or with the practising solicitor, both of whom have to endeavour, in very difficult, almost impossible. circumstances, to make provision for their own days of retirement. Notwithstanding the pension, however, the position of a High Court Judge is an invidious one, and one difficult to keep up in these days. The amount of increase in remuneration which is proposed in the Bill which the Government are putting forward. though perhaps as much as is practicable in all the circumstances, is not too much.
There is another point that I should like to mention, which has, perhaps, not been sufficiently emphasised. In recent years—and all Governments are responsible—there has been a tendency to set up all sorts of tribunals and inquiries, conducted by inspectors and various other officials. Frequently, these tribunals and inquiries sit in secret. Frequently the reasons for their decisions and reports, which they give of their own volition, or which, perhaps, are adopted and given by Ministers, are not made clear to the man in be street. But the cases which come before Judges are heard in open court. Judgment is given in open court, and tie reasons are made clear to the world. This is a very great protection, and I think that, perhaps, the ordinary citizen does not fully appreciate that that is so. Possibly the greatest protection against
1030
arbitrary treatment:hat the ordinary citizen has to-day is the independence of the Judiciary, and the fact that Judges sit in public and give their judgments in public. Their reasons are known, and nowadays that is an exceedingly important factor.
May I add one additional word in support of what my noble friend Lord Silkin has said about the necessity for looking into the remuneration of those who occupy other judicial offices of one sort or another. For a good many years, in another place, I agitated for increased remuneration for county court judges, which my noble and learned friend Lord Jowitt was able to introduce. But I agree that their remuneration now, and that of other judicial functionaries. is net sufficient, arid ought to be looked into and increased. In ibis connection, would also mention the question of travelling expenses of magistrates and justices of the peace. They perform exceedingly useful functions, and I believe I am right in saying that they are not allowed, or not always paid, travelling expenses in all parts of the country. I think this is a matter which might also, in due course, be taken into account. Whilst I appreciate that it is not, perhaps, very relevant to the present Bill, it is a matter of some importance. I hope that your Lordships will unanimously agree to give this Bill a Second Reading.
5.18 p.m.
LORD CALVERLEY: My Lords, before the noble Marquess pronounces the Benediction, I should like, as a layman, to express my support of this Bill. I am not a recent convert; I have always been ready to support such a Bill. But I should like to say this to your Lordships. In going up and down the country, through the provinces, and talking to people I have met, I have not once heard a single word of serious criticism of the action of the Government in introducing this measure. There was one piece of criticism of the noble and learned Lord who sits on the Woolsack, and if I could help the people concerned by introducing a Bill compulsorily to increase his salary I would do so. But I believe that the, feeling in the country generally, is as I have stated.
In the past eighteen years I have visited a fairly large number of prisons.

1031
I remember on one occasion visiting a prison in an assize town. The Governor took me out to see a cricket pitch. A man was preparing the pitch for a cricket match. The Governor said to me, "That man is a German; he is serving a fairly long sentence. A few weeks ago the Judge of assize came on a visit to the prison during his luncheon interval and he spoke to this prisoner. I knew the Judge very well indeed, and when he had gone I said to the German ' Do you recognise that person who has been speaking to you? ' The prisoner said, His face was a little familiar, but I could not place him.' I replied, The last time you saw him he had on a red gown and a wig. He is the Judge who sent you here.' He then said, ' That could never happen in Germany.' "I will content myself with giving one more example. I was asked by a Judge, for whom I had a great regard, to visit a young fellow whom he had sentenced, to try to see that he did not grow bitter. I did so because it was part of my duty, and the first thing the young man said was that he understood that the Judge could have done nothing else; and he asked me, if I saw the Judge again, to tell him that he was not going to be hitter. His girl was not going to cancel their engagement and said she still loved him. That is the reason why I have seldom heard Judges criticised in prisons. I recall one case of criticism, by a man whom I knew, who had been sentenced to ten years. He did not want to stay in the local prison and understood that he was going to Dartmoor, and he had a grudge against the Judge who sentenced him because he remained in the local prison. That is all I wanted to say, but I join the chorus of approval of this Bill, and I hope that it will have a safe and swift passage into law.
5.21 p.m.
THE MARQUESS OF SALISBURY: My Lords, the short debate to which we have listened has fully satisfied the expectation I expressed in moving the Second Reading, that this Bill should be non-controversial. It has received the praise of everyone who has spoken, and all those who have spoken are well qualified to speak on this subject from their long experience of the law. The noble and learned Earl. Lord Jowitt, who speaks
1032
with the authority of a past Lord Chancellor, has told us, and I think it is particularly important that we should recognise it, that the outlook of those who formerly would have pressed to join the great profession of the law is now so bleak that the number of those turning their attention to that profession is continually going down. I was not aware of that before. It is a formidable fact of which we should all take account. In these days of heavy taxation, it is unhappily true that in all professions the rewards which are given to success are inevitably less glittering than they used to be. No doubt if that continues beyond a certain point the effect will be that irreparable harm may be done to a profession on which, as in the present case. the whole of our social system depends; and that would he a deplorable thing.
The noble Viscount, Lord Samuel, thought that though the Government had done the right thing they had not been generous enough. I hope that is not the case. We are in an immense difficulty in that we might have been thought to err on the other side, and in the present situation of the country that would have been equally unfortunate. I assure the House that the proposals which find a place in this Bill were the subject of most continued and serious thought by the Government before they were produced, and I hope they will be regarded as the happy. if not as the golden, mean. the middle line between what has been and what might be. They are not, of course, ideal, but I think they are about as much as could be expected in the very difficult times in which we live.
The noble Lord, Lord Silkin, ranged rather wide and the noble Lord, Lord Milner of Leeds, went wider still and brought in still more categories of those who ought to be considered. I must not be expected to-day to comment on what they said. I thought it was a gratifying tribute not only to their own good nature but to the elastic rules of order of your Lordships' House that the noble Lords should have been able to make their remarks at all. I do not propose to follow them into that debatable ground, but I think I can say, without straying too far from the path of rectitude, that I am sure my noble and learned friend the Lord Chancellor will give his most earnest attention to all the noble Lords have said. It only remains for me once

1033
more to thank the House most warmly for the welcome they have given to this Bill. I think that is all that needs to he said at the present stage.
On Question, Bill read 2; Committee negatived.

PENSIONS (INCREASE) BILL
Read 3(according to Order), and passed.
BRITISH INDUSTRIES FAIR (GUARANTEES AND GRANTS) BILL
Read 3(according to Order), and passed.

FOOD AND DRUGS (SCOTLAND) BILL [H.L.]
Order of the Day for the Third Reading read.
THE LORD CHANCELLOR (LORD SIMONDS): My Lords, I have it in command from Her Majesty the Queen to signify to the House that Her Majesty. having been informed of the purport of the Food and Drugs (Scotland) Bill, has consented to place the interest of the Crown at the disposal of Parliament for the purpose of the Bill. I beg to move that the Bill be now read a third time.
Moved. That the Bill he now read 3.
—(The Lord Chancellor.)
On Question. Bill read 3.
Amendment (Privilege) made. Bill passed, and sent to the Commons.

RAILWAY MAINTENANCE
5.29 p.m.
LORD SOMERS LORD SOMERS rose to ask Her Majesty's Government what action they propose to take to urge the British Transport Commission to carry cut better maintenance of the permanent way on British Railways, especially in tunnels. The noble Lord said: My Lords, in asking Her Majesty's Government the Question which stands in my name on the Order Paper, I want to make it clear that I do so only for information, because I am sure that both they and the Ministry of Transport feel as much as I do that it is a very urgent matter. The rise in the number of railway accidents during the past ten years or so has been colossal, when we consider what our
1034
record was in pre-war clays. I do not think that many of them are doubtful in origin, but certainly there have been some which have not been explained. It may well be that this is due to the fact that the supervision of the permanent way is not really adequate at the present day. travel a good deal by rail and often I have noticed stretches of line where the keys have fallen out of the chairs. As a passing thought, I wonder whether the present day form of key, a metal spring key, is as satisfactory as the old-fashioned wooden ones, since often I have seen stretches of line where, if the keys have not fallen out. they are well on the way to doing so. There are many other stretches of line, not perhaps on the main lines, but on the branch lines—and these, after all, are equally important—where one sees ancient sleepers, which have obviously been asleep for many years without having been woken up, and points which show that the rails are badly worn. Altogether, I feel that the permanent way, particularly on branch lines, is not in a good state.
The chief example was the case of a mishap in the Watford. tunnel on:February 3, about which your Lordships probably read. The "up" Royal Scot was passing through the Watford tunnel, not at a high speed, and the last three coaches were derailed. Fortunately, as the train was going fairly slowly, the rate of casualties was not high, and only nine passengers were injured. However, an examination of the permanent way afterwards showed that nineteen rails were cracked; and, in the opinion of the experts, these rails were not cracked as a result of the accident but were cracked before. I should have thought that this was fairly obvious, because a derailment of that kind would not tend to crack the rails so much as to bend them. The inspector for the permanent way of that district said that it was a renowned stretch of line for being in a bad state. Apparently, a six-monthly inspection of the permanent way had been ordered, but the inspector said that through lack of manpower, he had been unable to carry it out. He said that even he, an in spector, had been working on the line, which was hardly his work.
This seems to me to be a most unsatisfactory state of affairs. No doubt n is due to the fact that the permanent way

1035
gang workers are underpaid, and it is difficult for the Railway Executive to find men who can take on this work. But surely this is an urgent enough matter for something to be done. One has to consider, also, the tunnel structure. Many of these tunnels have not been reconstructed or reconditioned for a great many years. If. by any chance, a sudden subsidence of the earth, or anything like that, occurred, no train could be stopped until an accident had happened; nobody would know about it, because the supervision of the line is not taking place. We have heard from the Ministry of Transport report that a certain mileage of track has been renewed, but naturally they would concentrate on the main lines, and I feel that the less important lines have been grossly neglected. As rail traffic is becoming a good deal heavier—not in the sense of more trains per minute, but in the sense that the trains themselves are a good deal heavier— and the rolling stock itself is not maintained in an efficient way, which causes increased wear and tear on the rails, something should definitely be done about this. Therefore, I ask Her Majesty's Government what they propose to do about it.
5.35 p.m.
LORD HAWKE: My Loins, the noble Lord has made a number of quite sweeping comments about the conduct of our railways; indeed, the way he has put his Question might raise some doubts in the mind of the travelling public as to the general safety of travel on British Railways. I therefore wish to state categorically that, in the opinion of Her Majesty's Government, as advised by their technical advisers, there is no ground whatsoever for any such doubt. They are aware that British Railway engineers and operators, who have always regarded safety as their first aim, still continue to do so, and are applying all their unrivalled experience, married to the latest moves of science, to the end of safety.
Having said that, let me return to the precise subject of the Question. It is common ground that the end of the war found our railways very run down. The rehabilitation required a great deal of material—and that at a time when much of the world was looking to us for exports of railway material to rehabilitate their
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own railways. Not only did we need the foreign exchange, but the crops and the materials of the world could not move without those railway exports. In the result, there was not enough steel to go round, and everyone went short. However, we did give priority to our permanent way. Our railways have faced, and are still facing, great difficulties, but they are overcoming them. At one time, the difficulty was materials. Now they can get as many rails as they can put in the track, but the difficulty is labour. One cannot ignore the fact that the railway service in many grades is not so attractive as it used to be, and service in the permanent way gangs does not attract as many as one would like. The full complement is not there, and the turnover of labour is too heavy. But our engineers are realists, and they know they have got to find methods of maintaining our permanent way, in spite of a shortage of labour.
There are many methods by which this is being done. More use is being made of flying gangs; heavier flat-bottomed rails are replacing the bullhead rail—and that means less maintenance: re-laying, is to a greater extent now being done by prefabricating sections in the workshops and then placing them in the track by means of cranes; more use is being made of outside contractors; maintenance machinery is being introduced; the drainage is being improved, and various steps of that kind are being taken. All this means that a labour force, inadequate by the old standards is, in practice, managing to do the job. But that does not mean that there are not black spots where the position is most difficult. So much for the numbers.
When it comes to quality, the position is more difficult, and a tremendous strain is placed on all the more responsible men, from the ganger up to the district engineer. However, the position is being tackled. There are competitions between gangs for the best-kept sections of lines. There are instruction classes, evening classes, and such like. But the ultimate quality of the track depends upon the experience and zeal of the man in charge of the gang in patrolling his line every day and spotting the faults. He is not now so dependent as he used to be on the size of his gang, for the flying gang is now available for the bigger jobs. To

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measure the quality of the track one cannot have a better yardstick than the overall speed limit and the number of local and temporary speed restrictions. British engineers have been bred in a school of caution, and I believe that their judgment in fixing limits is likely to be what it always has been; that is, cautious. I should explain to your Lordships the difference between a speed limit and a speed restriction. The speed limit is the more permanent thing, operating perhaps over the whole of the line, whereas the speed restriction is something temporary over a shorter distance, imposed for some special purpose. We are not quite back to the prewar speed limits, but much of the mainline running track is now back to a 90 m.p.h. speed limit, and other lengths will be rising from 70 m.p.h. to 90 m.p.h. before very long. As for local speed restrictions, those imposed on account of track condition have dropped in six years from 85 to less than 20. I think your Lordships will agree that this is a sound indication of progress, and we ought to be grateful to the men with responsibility for this state of affairs, from the ganger up to the chief engineer, who have made it possible.
One can have the best track in the world, but some small defect overlooked. or some act of carelessness, may mean an accident; and that is the continual anxiety of all those who are in authority. With more inexperienced labour on the line, there is a heavy burden on all those who are responsible for supervision. One does not hear much about the permanent way unless there is an accident. Ergines and trains take the glamour, and the permanent way tends to be taken for granted. Now what happens if there is an accident? A long-established and rigorous process is immediately set on foot. All accidents to passenger trains, all accidents to goods trains affecting a passenger line, together with various specified mechanical faults, including broken rails, have to be reported to the Minister. Every report is scrutinised by one of his inspecting officers, and, if necessary, further facts are elicited. An inquiry is almost always ordered by the Minister when a passenger has been killed, when the accident is serious, where there are lessons to be drawn, or where the causes are obscure. The Minister's inspecting officers are, of course, quite independent of the British Transport Commission, and they stand in the same relation to the British Trans-
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port Commission as they stood to the old railway companies. The recommendations of the inspecting officers to the railways are not legally binding on the railways but are almost invariably adopted.
It is a little difficult to pick out accidents that were caused purely by permanent way defects—and this afternoon it is the permanent way about which we are talking. I have found it possible to do so by taking cases where there was an inquiry into a derailment. Of course, it is possible for there to be other sorts of permanent way accidents, but derailment would be the normal consequence. There are other accidents, but they are mostly trivial into which there is no inquiry. Therefore, the category of inquiry and derailment separates off the accidents of consequence. From 1930 to 1939 there were thirteen cases of derailment caused by permanent way defects into which an inquiry was held, while after the war there were thirteen cases, in the first five years, and five cases in the most recent three and a quarter years. When one is dealing with such spasmodic cases, it is difficult to speak of improvement or the reverse, but these figures seem to suggest some decline in track maintenance immediately after the war, with some subsequent improvement. At any rate, it is clear that the actual numbers of accidents in these two categories combined are not large.
At this point I would comment on one or two remarks of the noble Lord, Lord Somers. He has really suggested that the track is in a very bad state. If he will pardon my saying so, that is not correct. Undoubtedly on some branch lines he will find some rather old rails and points, and so on, but it is not correct or fair to say that on lines on which speeds of any consequence are run the rails, sleepers or points are not in good order. The noble Lord raised the point of spring keys. That is rather a technical point, and my technical advisers tell me that in certain cases they are better than wooden keys; and, of course, in the new standard flat-bottom track they do not exist at all, so that gradually keys will be eliminated altogether.
The noble Lord also raised the question of tunnels. I will start by saying that the maintenance to the permanent way in tunnels has always been recognised as presenting special problems

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for which special rules apply. But it would be entirely wrong to let the general public think that the permanent way in tunnels is less safe than in the open. I presume that the noble Lord's anxiety was almost entirely founded on the Watford tunnel. His facts were not quite correct there. Two coaches of the "up" Royal Scot became derailed and detached, with the unfortunate result that fifteen persons were injured—rather more than the noble Lord said. In the subsequent inquiry it was reported that a broken rail was the cause, and that further cracked rails had been found since the accident. I have walked through the tunnel and had the accident explained to me. I am not going to say any more about it this evening, because the inspector's report has not yet been published. The matter is sub judice, and I feel that it would be wrong for a Government spokesman to comment on it at this stage. I will say, however, that immediately following the accident the word went round the railways of Britain from the Transport Commission, "Look to your tunnels," and there has been a most careful checking up and a revision of the rules all over the country for the checking up of the maintenance of the tracks in the tunnels. Your Lordships may ask whether the permanent way in tunnels often causes accidents. My advisers have gone back to 1930, and they have found only one inquiry into an accident in a tunnel caused by the permanent way. before the Watford one, and that was in 1948, somewhere between Barnet and Potter's Bar. One can say, then. that it is quite clear that these cases are very infrequent—although, of course, that does not satisfy the engineer, because he regards every single accident as a reproach.
The problem of defective rails has had some publicity. Therefore. I should like to say something about it. We have over 7 million rails in our running lines and, of these, about 1,000 are found to be defective every year. About one third of this 1,000 are broken. These figures are very much better per mile than those in the United States, and are much better than those in many countries on the Continent of Europe. A broken rail sounds alarming but, in practice, it is soon found and removed;in any case, being firmly held by chairs, spikes and
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fish plates, it is very rare indeed in this country for it to cause an accident. My advisers have gone back to 1930, and until the Watford tunnel case this year they can find no case of an inquiry held into a derailment caused by a broken rail. As regards rails which have cracks but which are not broken, a few hundreds are found and removed every year, but they do not constitute any appreciable danger to traffic. If left in the track and unfound, they would eventually, after a time, probably develop into broken rails; but it is a matter of speculation as to how long that would be. So long as there are railways, there will always be a few cracked and broken rails. The great thing is to find them quickly and have them out of the track. Their detection is more difficult in tunnels than in the open; hence there are specially rigorous rules for opening up and examining the track in tunnels. But, in addition, the railways are now following the London Transport Railways in providing ultrasonic rail flaw detectors especially intended for use in tunnels and difficult places. I should like to emphasise here that every main line in the country is patrolled and inspected every day.
The noble Lord made some rather startling statements which seemed to suggest that there was danger in tunnels from subsidence, and so on. The Question on the Paper is entirely about the permanent way. If he likes to put down a Question or a Motion about railway safety in other directions, I, or one of my colleagues, will be only too delighted to answer him; but this evening I am not prepared to embark on a discussion of earthworks and the roof safety of tunnels. My noble friend the Minister is satisfied that the tunnels are as safe as any other part of the track in this country. Finally, I would say that the responsibility for the maintenance of the permanent way, and the safe operation of the railways, is clearly placed on the Transport Commission by the Transport Act, 1947. The Minister would intervene only if he thought that the Transport Commission were failing in their duty and that a question of major policy was at stake. I think I have said enough to show that the Minister, as advised by his technical advisers, considers that there is no need to remind the Commission of their duties in respect of the permanent way. In his opinion, they have been, and are, constantly striving

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for the improvement of the permanent way, and he considers that their efforts are showing results. The keynote of the operation of our railways has always been safety, and the quality of the track has always dictated speed limits. So long as British engineers are in charge, we can be assured that a cautious policy will always prevail in fixing these speed limits. In fact, the short answer to the noble Lord's Question is that the Minister sees no reason to intervene.

THE GRAND NATIONAL
5.56 p.m.
LORD AMMON LORD AMMON rose to ask whether the attention of Her Majesty's Government has been directed to the disaster on the Aintree racecourse during the Grand National Steeplechase on Saturday, 27th March, when 29 horses started, of which 20, including four killed, failed to finish the course; whether the law concerning cruelty to animals applies in such cases, and to move for Papers. The noble Lord said: My Lords, it is unfortunate that the pressure of business and attractions in another place have probably given us a much smaller audience than the widespread interest aroused in the matter which I desire to bring before your Lordships deserves. It is, perhaps, somewhat appropriate that on the same day on which we have been discussing slaughterhouses we should discuss the slaughter of horses in another manner. I want to make it quite clear, however, that I am not concerned in any way in interfering with racing or the turf. I, with those whom I represent, am concerned wholly, at the moment, with urging as strongly as I can that steps should be taken to avoid the unnecessary cruelty that takes place in steeplechasing, with special reference to the Grand National.
The fact that the recent Grand National has received world-wide publicity is an indication that public attention has been roused. To that extent, one has to thank the Press for, at last, taking notice of it, because, after all, what has happened is nothing new. Ever since the Grand National started, there has been a yearly toll of dead, mangled and injured horses; and the fact that horses are entered for it year after year in the knowledge that most of them will not be able to make the course and that those who do will do so only under severe pressure, is
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enough to indict it for cruelty, apart altogether from the particular fatalities.
Lest I should he thought to use exaggerated language in saying that this matter has aroused world-wide interest, I may tell your Lordships that I have been interviewed by the United States Press and I have received cables from Australia on the subject. Only an hour or two ago, I received another aerogram, also from Australia. I propose to inflict only those on your Lordships from hundreds of letters and communications I have received from. private individuals. Let me say that not all of those people are mere sentimentalists. A number of them, in their letters, have explained that in some way or another they have been connected with the racing business or are interested in it, but they all deplore the dreadful and avoidable cruelty that arises from this particular race and others similar to it.
This is a cable I have received from the R.S.P.C.A. of Sydney, Australia:
"Wholeheartedly support your principles for the modification of steeplechasing. Appalled at tragic loss of noble animals."
Here is another cable:
"Congratulations al stand re National, Continuation insult to human dignity. Thing of the past. Here thousands with you. Sharp, Sydney."
The aerogram I have received is from one who was an officer with the Australian forces that came over here in the First World War. He says:
"There are few readers of the Daily Press in Australia whose senses were not numbed on reading the report of the race. First allow me to assure you I am no sentimental crank. During the First World. War, I served with the Australian Forces in France and Belgium. The treatment meted out to dumb animals on the Continent shocked even the most hardened soldier. On witnessing this, the common expression among us was, 'Thank God, we are of British stock.' With the report in our Press, a certain doubt rises within us as to the pride in our origin. A race so hazardous that nine out of twenty-nine bosses finished the course, and the death of four horses, is sufficient condemnation of those in charge of the race and the course."
I do not propose to read any more; I will just intimate that I have here a list of the horses, and the details concerning them, that have lost their lives in recent years in this particular race. If propose to give some of the details in regard to the last five years, so that your Lordships may see that our opposition is not all based on one particular race. In 1950, forty-nine horses started, seven finished, forty-two failed, two died. In 1951, thirty-six started,

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three finished, thirty-three failed. In 1952, forty-seven started, nine finished, thirty-eight failed. In 1953, thirty-one started, five finished, twenty-six failed. In 1954, twenty-nine started, nine finished, twenty failed, four died. I submit that the fact that so few out of all those horses were able to make the course, and those that came through did so only under heavy punishment, is enough to condemn the race as something which ought not to be allowed to continue. But there are other details which are probably worth your Lordships' notice. In 1952, in the race I have mentioned, Skouras was destroyed and Freebooter was injured and had not recovered sufficiently to run in this year's race; thirty-seven out of forty-seven fell, or refused, and could not complete the course: ten fell at the first jump, some were trampled on and some less seriously injured.
In 1953. the season's record of all the steeplechasing shows that approximately seventy-two horses were killed, about half of these because of broken limbs or staking, while a few dropped dead. Therefore the whole story is not contained in the number of horses killed, which has shocked people and has given us a wider publicity now: it is in the fact that, however large the number of starters, nine is a fairly large proportion to finish the course. That is the number that came through this year, and, as I have said, four others were killed. I submit that this is something of which we ought to take notice, having regard to our reputation for the humane treatment of animals, and that what has happened ought to arouse, and indeed it has aroused, the indignation of thousands of people throughout the country. Non is that all the story; hundreds of the horses who fail are not heard of again. It is difficult to get news about them—probably they die or are not further used. Even some of those that win become utterly demoralised and are hardly of any further service. I am quite aware from the custom of the House of the answer I am likely to get. but I hope I shall have some assurance from the Government that they will use their influence with the particular bodies or whoever is concerned in the matter, to see whether some modification cannot be brought about. The credit and the fair name of this country ought not to be so used
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without some attempt being made to protect it.
I have here another report, which states:
"Countless other horses have received injury in this race; some are so completely demoralised as never to be able to win another race. Few will recall those gallant post-war Grand National winners, Lovely Cottage, Caughoo, Sheila's Cottage."
When I asked friends in this Society for the Modification of Steeplechasing and Grand National Reform to give me more information about the matter, I strictly underlined that I wanted facts, not sentiments, and it is facts I am bringing before your Lordships this afternoon. I hope they will shock your Lordships as they seem to have shocked many hundreds of people outside. The pressure and opinion of this House will go a great way with those people who maintain this race merely for material and financial gain and without any humanitarian ideas at all. Some of the Grand National figures are worth noting. In ten of the worst Grand Nationals, between 1923 and 1953. a grand total of 431 horses started; the amazing number of 352 came to grief and only seventy-five finished the course, hardly a year passing without some being mortally injured and destroyed. Every one of these statements can be proved and tested against the names. with details of the horses, what they suffered and so forth. I am merely bringing before your Lordships a case, for which I hope there is no need for further evidence, as to the tremendous cruelty involved; and I am trying to show that there is every reason why we should take such steps as are possible to bring about better conditions.
I want to show that not only do we bring accusations but we have some suggestions to make to achieve better treatment for horses in the years to come. Among suggestions that are being made is that something should be done, first of all, to shorten the distance of four and a half miles, which, at the tremendous pace at which it is run, is far too long. Becher's Brook and The Chair should also be modified. The thirty hurdles should be reduced and, above all, some check should be made on the quality and condition of the horses that are allowed to enter. That, alone, would do a great deal to diminish the number that fail to make the course. And, by no means the

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least, something should be done with regard to the first obstacle. Anybody who knows anything about the race knows that many who fail there are unable to make it owing to bunching and insufficient room. These are some of the suggestions which I think should be given serious consideration. These dumb animals, noble creatures and some of the best friends of man. deserve much better treatment than they receive in this particular instance; and I think it is the duty of people, particularly those situated as your Lordships are, to take what steps they can to see that some modification is brought about, that something is done to humanise this race, and that our fair fame is not lowered before the whole world by the continuance of this brutal and cruel sport. I beg to move for Papers.
6.10 p.m.
LORD CALVERLEY: My Lords, I rise for a few moments to support my noble friend. I do so because it is one of the characteristics of the English race that we love horses. That is why, in hurdling and jumping, the whole nation holds in high esteem such names as Colonel Llewellyn and Miss Pat Smythe. I, for one, like to listen in to a commentary on a good flat race. I listened in, of course, to the Grand National, but I have always been glad that that race has never been televised. I think of the real indignation—even to-day letters have been published in some of the provincial papers—of the whole country. Ordinary men and women in the street, and not simply an institution, are shocked that this limited company which runs the Aintree racecourse—which is, I may add, a purely commercial concern—can with impunity hold this Grand National steeplechase without, it would appear, any chance of real supervision from any public body. I know sufficient of the members of the Jockey Club to know that if such a thing took place in flat racing they would stop any abuses which put any dumb animals, especially horses, which we hold in such great affection—
EARL WINTERTON: May I interrupt the noble Lord? He is not doing justice to the National Hunt Committee.
LORD CALVERLEY: I am just going to refer to them. I have made a note
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"Coming to the National Hunt Committee"—I am grateful to the noble Earl for reminding me that I had actually written down a note to that effect.
I want this House to join with the ordinary folk who are real sportsmen and do not enjoy looking at cruel spectacles. I wish that I knew the appropriate authority in this House—perhaps it is the noble Lord, Lord Lloyd, but I do not think so. However, I hope that the noble Lord will find out the usual channels to approach the National Hunt Committee and then tell them that they have a duty to perform, not simply to Mrs. Topham but also to the people of this country. They like to see a good race, but they hope that, when the race has been run, the majority of those taking part, the animals and the jockeys (this House, I believe, lost a distinguished Member in one such race) will be left unscathed. I ask that this House should take its part in impressing upon Her Majesty's Government the need to tell, and if necessary to prod, to give a hearty "kick in the pants" some members of the National Hunt Committee. We should tell them that they should either see that Topham's Limited run the race in a humane fashion or cancel the licence of the company to run the race—an eventuality which I should rather deplore. But there is another alternative. I put the positive suggestion that the National Hunt Committee should inform the Aintree people that, if they do not put their house in order, the race will be transferred to Cheltenham; then some more people in the South of England could perhaps enjoy it. That is all I have come especially from Yorkshire to say. There is real indignation in the country at this continued slaughter of these noble animals. It is high time that this slaughter, this cruelty, was stopped.
6.16 p.m.
LORD BALFOUR OF BURLEIGH: My Lords, in rising to say one word on the Motion of the noble Lord opposite, I desire, in the first instance, to disclaim absolutely any expert knowledge of steeplechasing. I cannot help wondering, together, I think, with many other complete laymen in this matter, why this course has to be quite so severe. I wonder whether it serves any object which could not be equally well served by a slight lessening of the severity of the course.

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I know that the object of noble Lords opposite is to reduce the suffering which is caused to horses. My object in rising is to direct your Lordships' attention to an even wider source of suffering to horses, to which I hope noble Lords opposite will direct their attention. I am quite convinced that there is much greater suffering caused in the transport of horses for slaughter for human consumption than in all the steeplechases nut together. I believe it to be an established fact that great suffering is caused to horses in transit from Ireland into this country for slaughter, and in transit from this country to the Continent for slaughter. I believe that it is a tragic misfortune that this form of transport is not governed by an existing statutory order. I have been digging into the matter and I find that there is an order called the Transit of Animals (Amendment) Order. 1931, which governs the transport of butcher's meat animals for slaughter and which lays down meticulous conditions which have to be observed. But when that Order was passed there was no trade in horsemeat in this country for human consumption, and consequently horses are, unfortunately, not included in the Order.
My object in rising is simply to make a double plea. My first plea is to noble Lords, and others who have been deeply stirred by these unhappy events at Aintree, to direct their attention to this other source of cruelty—a course which I am sure will appeal to them just as much as it does to me. That is my first plea: do not let this indignation about Aintree be directed solely at that particular source of suffering to horses; but let this generous emotion of noble Lords be devoted rather more widely. Secondly, my plea is to the Government. Obviously, I cannot expect my noble friend who is to reply to deal with this quite unexpected question offhand, but if I am right in thinking that this Transit of Animals (Amendment) Order, could be extended by a very small addition to include horses, will the Government look into it to see whether that can be done?
6.20 p.m.
THE EARL OF LISTOWEL: My Lords, I had not intended to intervene in the debate on this Motion, but I think that perhaps as your Lordships have heard
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two speeches from the Back Benches you might wish to hear the view of those who sit on this Front Bench. That view is in broad general support of the humanitarian plea made by the noble Lords on the Back Benches. I think we all feel that there has been a great deal of public concern about the number and the seriousness of the casualties in the last Grand National. At the same time, it is, of course, much more difficult to know what appropriate action could be taken to diminish occurrences of this kind in the future. I do not think it would be appropriate for the Government to impose any restrictions on steeplechasing or, indeed, to appoint a committee of inquiry to investigate these matters. As one who has had some administrative experience, I hardly think this is an appropriate field for Government action. That may, perhaps, be the line which the noble Lord who is to reply on behalf of the Government will take.
On the other hand, I should like to make this plea to the noble Lord: that the suggestion of the noble Lord, Lord Calverley, that the attention of the National Hunt Committee be drawn to this matter, and that they be asked to inquire into the conditions under which the Grand National is run. should be followed up. I believe that that would be a not unreasonable course to take. I think that an inquiry of this kind by the appropriate authority—I do not know whether the National Hunt Committee is the appropriate authority; there may be another racing authority—would be fully justified, and the terms of reference might cover the cause of these accidents and any recommendations the Committee might think fit to make about ways and means of avoiding such occurrences in the future. At the moment, I do not think any Government action is called for. On the other hand, I think that, in view of the concern that has been shown by ordinary people and by the Press, Government action might be called for in time to come, if occurrences of this kind were repeated. I feel that at the moment it would be quite sufficient if an inquiry were set on foot by the appropriate authority, and that suitable action should be left to their discretion. We are dealing with people who are extremely responsible, both from the point of view of racing and from the point of view of the

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public. I think they should be given a fair chance of doing what they consider, in the circumstances, is right and proper.
6.23 p.m.
EARL WINTERTON: My Lords, I wish only to address a few sentences to you upon this Motion. First, I wish to support what has been said by the noble Earl, Lord Listowel, in what I think your Lordships will agree was a most temperate and moderate speech on the subject. Clearly, the Government have no power of intervention unless the law has been broken. Equally, the National Hunt Committee are a properly constituted body with a high reputation who will no doubt have regard to what has been said in your Lordships' House. I should not have risen to speak but for the fact that I thought I detected in the speech of the noble Lord, Lord Calverley, and to some extent in that of the noble Lord who initiated the debate, something that seemed to me rather like unfair criticism of Messrs. Topham and the Liverpool authorities generally. I do not wish to enter into any argument on this matter, but noble Lords must make up their minds in dealing with this subject. Steeplechasing, like hunting and many other pursuits in which many Members of your Lordships' House have taken part, is a dangerous sport, and the fact that a noble Lord broke his neck when riding in the Grand National is no more an argument against the Grand National than is the fact that several noble Lords have broken their necks in the hunting field an argument against hunting. In my view, it would be a pity if it went out from your Lordships' House that there was undue criticism here. Surely we should leave the appropriate authorities to consider what has been said in this debate and decide what course they should take thereafter. I repeat that I strongly support what has been said by the noble Earl, Lord Listowel.
6.25 p.m.
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR THE HOME DEPARTMENT (LORD LLOYD): My Lords, I think I can best carry out my task by speaking fairly briefly—which I know will he a relief to your Lordships. What I have to do is merely to explain the Government's position in this matter. We have had an interesting debate in which a number of
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noble Lords have expressed very sincere views. I do not intend to go at length into all those views, because I think I can serve your Lordships better by just dealing shortly with the two questions which I have been asked. The first of Lord Amnion's questions was whether the attention of Her Majesty's Government had been drawn to the distressing events during the running of the Grand National on March 27 last. Secondly he asked whether the law concerning cruelty to animals was applicable.
.As regards the first question, I am grateful to the noble Earl, Lord Listowel, because in what was, I thought, a very wise speech he said for me what I have to say. He said—and I will repeat it—that this is not a matter in which the Government have any responsibility. The regulation of the conduct of steeplechasing is a matter for the authorities concerned with that sport; and tributes have been paid by noble Lords to-day to the National Hunt Committee, who are a very reputable body and who are concerned with this matter. That Committee will no doubt pay due attention to what has been said in your Lordships' House; but I emphasise that. this is a matter for them. and not one for Her Majesty's Government. The noble Lord, Lord Calverley, seemed to wish us to do most violent things to the National Hunt Committee. We were to tell them off; we were to prod them; we were to give them a "hearty kick in the pants." The noble Lord might like us to do that, but we are really in no position to do any of those things to the National Hunt Committee. It would be quite improper if we did.
LORD CALVERLEY: My point is this. The National Hunt Committee have a responsibility to the public, and if they are anything like the Jockey Club, and have a similar sense of responsibility, then, just as the Jockey Club act, we expect the National Hunt Committee to act—that is all.
LORD LLOYD: I apprehend the noble Lord's point. I will pass on from that, if I may, to give the House some information which I think may be of interest in considering this matter. I think that a sense of proportion here is not, perhaps, unimportant. I therefore thought it right, when I saw that the noble Lord, Lord Ammon, proposed to raise this

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matter, to obtain some factual information about matters to which reference has been made in comments on this year's race. I have not been able to get figures for previous years of the number of horses killed in the race or which had to be destroyed as a result of accidents. I believe it is true to say that the number which died this year was exceptional, if not unprecedented. I think it would be wrong to imagine that the Grand National is a race in which four horses are killed every year—that is quite untrue. It should, moreover, be remembered that, of the four horses killed, only two actually met their deaths as a direct result of falls. One died of heart failure, and another had to be destroyed as the result of an accident which occurred after his rider had been unseated. The noble Lord, Lord Ammon, I think, talked about the enormous number of horses that fall. These horses were not necessarily injured: they may merely have fallen or pulled up. I make that point only because I think that this is a matter which we ought to get in proportion.
LORD AMMON: I have the full list, and I am prepared to give the noble Lord all the details.
LORD LLOYD: If the noble Lord will do that, I shall be glad to receive the details from him. I understood him to say that a large number of horses were injured. As a matter of fact, on the whole, the number of horses injured is remarkably small. The death of four horses this year, and two horses last year, has led to suggestions that the difficulties of the race have been increasing. I am informed that that is not so. The heights of the jumps have not been generally increased since the war. A comparison of the heights this year and in 1936 shows that only one jump has been increased, and that from 4 feet 6 inches—which is the minimum permissible under the rules of the National Hunt Committee—to 4 feet 6½ inches, while some of the heights have been reduced by one or two inches. The remainder of the jumps—in which I include Becher's Brook—were the same height. The noble Lord referred to Becher's Brook in particular. Your Lordships will be interested to know that in this year's race not a single horse fell at Becher's Brook, either time round, The deduction which may be
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drawn from this is that it is not necessarily true that the formidable nature of this obstacle constitutes its peculiar difficulty. Another point of some interest is that the number of runners in this year's race, twenty-nine, was smaller than in any year since the war; and the number of falls, fifteen, was both the lowest figure and the lowest in proportion to the number of runners during the same period.
I think it worth mentioning these facts because we must have some sense of proportion about this. In that respect, I am grateful to the noble Lord, Lord Balfour of Burleigh, for reminding your Lordships that the Grand National is not the only place where cruelty may happen to horses, and perhaps we might also keep that in mind when considering, this matter. I have given your Lordships these facts to bear in mind in drawing conclusions from the unhappy outcome of this year's race. It is not for me to suggest what those conclusions should be. I would repeat emphatically that the conduct of this race and of steeplechasing generally is not a matter in which the Government have any power to intervene. The noble Lord, Lord Ammon, asked me for an assurance, and I am able to tell him this, at any rate: that my right honourable friend the Home Secretary is inviting the stewards of the National Hunt Committee to discuss this matter with him.
The noble Lord's other question was whether the law concerning cruelty to animals is applicable in this case. On this point I can do no more than refer the noble Lord to the terms of the Protection of Animals Act, 1911. He is as good a reader of English and judge of the law as I am, because we are both laymen. It is not for me to say whether these provisions would be applicable in a case of this kind—that is a matter which can be decided only in a court of law. I will go further, and say that it would be entirely improper for me, as Government spokesman, to express an opinion on this matter.
6.32 p.m.
LORD AMMON: My Lords, may I start by thanking the noble Lord, Lord Lloyd, for his assurance that there are to be discussions between the Home Secretary and the National Hunt Committee—that is some gain. But I challenge entirely the statement that the Government have no concern with this

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matter. Cruelty should be a matter for the Government, and the very fact that there is an Act on the Statute Book dealing with cruelty to animals is sufficient support of my argument. Cruelty is proved by the fact that it must be known that, of the horses entered, a number are not able to finish, and that those able to finish it only do so under very heavy punishment. It is known beforehand that many will be injured and some killed. If necessary, I can give the noble Lord the history of every horse injured or killed in the Grand National since it started. I agree with the noble Earl, Lord, Winterton, that steeplechasing is a dangerous game, but the matter all depends on whether the rules of the game are such as to give a fair chance to those taking part in it. All we are asking is that the rules should be altered so that a horse has a chance to come through. This year, only nine out of twenty-nine came through. That is proof of one of the suggestions we make, that the number of horses allowed to enter should he limited to a much smaller figure. That would give some opportunity to the horses to get through.
The noble Lord, Lord Balfour of Burleigh, knows well that we wholeheartedly support what he said about other cases of cruelty; but the fact that there are other cases of cruelty does not minimise in any way the one with which we are concerned. I believe I am right in saying that it is much easier to get the Government to deal with questions of importing and exporting horses than with the matter I have raised. It is the concern of the Government to take action against anything which will lead to the brutalising of the public mild or the unnecessary sacrificing of these creatures. The trouble is to get publicity given to the matter. All that Topham's have been concerned about is the commercial angle, and they have resisted strongly any attempt to limit or minimise the difficulties of this race. They have also opposed any attempt to televise it.
I want to get on record some of the suggestions I had meant to make. I suggest that the number of starters be limited to twenty and that the fences be lowered to 4 feet 6 inches—that is, to take them back to what they were before.
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I suggest that the steep drop into Becher's Brook should be modified and that there should be fewer unnecessary obstacles. I suggest that the course should be limited to three and a half miles, instead of four and a half, I would suggest to the noble Lord that these are some of the matters which the Home Secretary and the National Hunt Committee might discuss. I am grateful for the measure of support given by noble Lords. I am glad that we have gained the point that the matter is going to be discussed, and beg leave to withdraw my Motion.
LORD BALFOUR OF BURLEICH: My Lords, before the Motion is withdrawn, may I ask the spokesman of the Government whether he will say a few words in answer to the question I raised?
LORD LLOYD: My Lords, I speak again with leave of the House. I apologise to the noble Lord that I did not deal with the point he raised, but I do not know the answer at the moment. I will, however, look into it, and will write to the noble Lord about it.
LORD BALFOUR OF BURLEIGH: I thank the noble Lord.
Motion for Papers, by leave, withdrawn.

DOVER HARBOUR CONSOLIDA TION BILL [H.L.]
Returned from the Commons, agreed to with Amendments.
TOWCESTER RURAL DISTRICT COUNCIL (ABTHORPE RATING) BILL

WEAR NAVIGATION AND SUNDERLAND DOCK BILL
Reported, without amendment.

INSTITUTION OF MECHANICAL ENGINEERS BILL
Committed.
House adjourned at twenty-three minutes before seven o'clock.