Sitting of 26 June 1956

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  NEWCASTLE UPON TYNE CORPORATION BILL
  As amended, considered; to be read the Third time.

  LONDON COUNTY COUNCIL (GENERAL POWERS) (No. 2) BILL (By Order)
  As amended, considered;
  Standing Order 205 (Notice of Third Reading) suspended; Bill to be read the Third time forthwith.—[The Chairman of Ways and Means.]
  Bill accordingly read the Third time and passed.

  FYLDE WATER BOARD BILL [Lords] (By Order)
  Second Reading deferred till Monday next.

  GLASGOW CORPORATION ORDER CONFIRMATION
  Bill to confirm a Provisional Order under the Private Legislation Procedure (Scotland) Act, 1936, relating to Glasgow Corporation, presented by Mr. James Stuart; and ordered (under Section 7 of the Act) to be considered Tomorrow and to be printed. [Bill 154.]
  SUPREME COURT (PRIZE, ETC., DEPOSIT ACCOUNT, 1914–1918 WAR)
  Account ordered, of the Receipts and Payments of the Accounting Officer of the Vote for the Supreme Court on behalf of the Admiralty Division in Prize for the period from 1st April, 1930, to 31st July, 1955, and for the period from 4th August, 1914, to 31st July, 1955, with a copy of a Letter from the Comptroller General thereto.—[Mr. H. Brooke.]
  SUPREME COURT (PRIZE, ETC., DEPOSIT ACCOUNT, 1939–1955)
  Account ordered, of the Receipts and Payments of the Accounting Officer of the Supreme Court on behalf of the Admiralty Division in Prize for the period from 3rd September, 1939, to 31st March, 1955, with a Copy of a Letter from the Comptroller and Auditor General thereon.—[Mr. H. Brooke.]

ORAL ANSWERS TO QUESTIONS
  LOCAL GOVERNMENT

    Sewerage Scheme, Blackmore and Doddinghurst
    Mr. Biggs-Davisonasked the Minister of Housing and Local Government what reply he gave to the latest representations made by the rural district council of Epping and Ongar regarding the Blackmore and Doddinghurst sewerage scheme.
    The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. J. Enoch Powell): The council was told my right hon. Friend had decided that this scheme was not so vitally urgent as to justify loan sanction in present circumstances, but that it would be among the first to be reviewed as soon as the current restrictions on capital expenditure were relaxed.
    Mr. Biggs-Davison: May I thank my hon. Friend for that undertaking to review this scheme and ask him to recall that the scheme goes back very many years and is exceedingly vital not only to the local people but to agriculture in that part of the county?
    Mr. Powell: The importance of the scheme, from many points of view, is recognised.

    Tree Planting
    Mr. Ellis Smithasked the Minister of Housing and Local Government (1) if he will initiate during the months of September and October a national cleaning, grassification, planting and tree planting campaign; if he will ask for the co-operation of all local authorities, industry and other Government Departments; if he will invite other

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    countries, and rural areas in this country, to send gifts of trees to cities and industrial areas; and if he will ask the Forestry Commissioners and other interested bodies to send saplings and other friendship gifts of plants, turf, &c., during this campaign;
    (2) if he will consult the Minister of Education during the cleaning, grassification and tree planting campaign with a view to ensuring the co-operation of education authorities, teachers, students and children in the organised protection of trees, plants, turf and cleanliness, the development in each area of a local desire to care for and protect trees, plants, turf, and the keeping of each area clean and tidy.
    Wing Commander Bullusasked the Minister of Housing and Local Government whether he will take steps to secure the planting of more trees in urban areas.
    The Minister of Housing and Local Government (Mr. Duncan Sandys): Trees can contribute a great deal to the charm and cheerfulness of our streets; and I think most of us would be glad to see many more of them. I am today sending a circular to local authorities asking them to make a continuing effort to get more trees planted in towns and villages, where this is appropriate. In particular, I am urging authorities who are carrying out schemes of slum clearance and redevelopment not to miss this unique opportunity to introduce more trees into those areas. In addition, I am having an illustrated technical manual prepared which will give advice on tree planting in towns and will, I hope, help to stimulate interest in this matter.
    Mr. Ellis Smith: While appreciating that reply, may I ask the Minister to consider taking some step, such as making a broadcast himself, to stimulate more interest in this subject, especially in industrial centres, so that we can improve the appearance of our country as quickly as possible?
    Mr. Fell: On a point of order. I know that the hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith) would never inflict such words as "grassification" on us if he could help it. I wonder whether you, Mr. Speaker, could tell us how we might be protected from being confronted with such words on the Order Paper?
    Mr. Speaker: That is not a point of order at all.
    Wing Commander Bullus: Is my right hon. Friend aware that this policy will give general satisfaction, especially to those of us who for years have been pressing for more official encouragement of tree planting?
    Mr. T. Brown: In view of the statement which he has just made, which we all welcome, would the right hon. Gentleman call for the assistance of "Men of the Trees," who are very helpful on this subject?
    Mr. Sandys: I am most anxious to have the co-operation and interest behind this policy of all who care about this matter. I also think that there is a lot to be said for interesting children in this subject from the very start, and the circular which I am sending to local authorities specifically mentions that point.

    Library Facilities, Stoke-on-Trent
    Mr. Ellis Smithasked the Minister of Housing and Local Government whether he is aware of the increased demand for technical books consequent upon the growth and development of mining communities in Trent Vale, Meir, Hanford, Newstead and Blurton; and whether he will accordingly reconsider his refusal to allow the construction and operation of public libraries by the city of Stoke-on-Trent.
    Mr. Powell: The only scheme for a new library submitted to my right hon. Friend by the Stoke-on-Trent City Council since the war is one for Meir. While he appreciates the city council's desire to provide better library facilities for the growing population of this area, my right hon. Friend regrets that he cannot see his way, in existing circumstances, to sanction a loan for this purpose.
    Mr. Ellis Smith: Those of us who go about the country see huge blocks of flats and offices going up in all the big cities and, if that can take place, surely it is a reasonable suggestion to make that provision should be made for miners, in particular, to have access to technical books? Will the hon. Gentleman ask his right hon. Friend to consider the matter in the light of this supplementary question?
    Mr. Powell: If capital expenditure by local authorities is to be restricted as the national situation requires, then expenditure of this kind must for the time being be deferred.

    Compulsory Purchase Orders
    Mrs. Butlerasked the Minister of Housing and Local Government how many compulsory purchase orders by local authorities of land for housing were opposed by local objectors in 1954 and 1955; and how many compulsory purchase orders, so opposed, were confirmed by the Minister.
    Mr. Powell: There were objections during 1954 to 263 compulsory purchase orders made under Part V of the Housing Act, 1936; and during 1955 to 181. Out of these 444 orders, 353 were confirmed (many subject to modification), confirmation of 75 was refused, nine were withdrawn, and seven are still to be decided.
    Mrs. Butler: Is the Minister aware that in many areas with a very long housing waiting list there is an acute shortage of building land? In view of this fact, and the great difficulty which local authorities have in obtaining land for housing, will the hon. Gentleman view these compulsory purchase orders sympathetically in future, and will he also consider whether there is any other way in which he can enable local authorities to acquire the land they must have if they are to carry out his express desire to continue council building?
    Mr. Powell: Each case is and must be considered on its merits, but I suggest that a ratio of five orders confirmed to one not confirmed does not show that local authorities are failing to get the land they require. The hon. Lady asked if there is any other method. There is, of course, the method of acquisition by agreement, which many local authorities pursue successfully.

    Dartmoor National Park (B.B.C. Building)
    Mr. Haymanasked the Minister of Housing and Local Government what action he proposes to take with the British Broadcasting Corporation for again ignoring the planning authority by erecting a square brick building at Rundle-stone in the Dartmoor National Park to house a pump for boosting water to the
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    television station in North Hessary Tor; and to what extent his previous stipulation that all buildings connected with the station should be of local stone remains in force.
    Mr. Powell: This is a matter for the planning authority, which I understand is in touch with the B.B.C. about it. The last part of the Question is based on a misapprehension.
    Mr. Hayman: Will the Parliamentary Secretary inform the B.B.C. that it is not above the law and should consult the planning authority before putting up a building of this kind instead of the planning authority having to get into touch with the B.B.C. afterwards?
    Mr. Powell: But this is a matter for the Dartmoor National Park Committee, which is a committee of the planning authority.
    Sir H. Studholme: Whilst regretting that the B.B.C. should have trodden on the toes of the planning authority, may I ask my hon. Friend if he would suggest a coat of roughcast on this brick building, because then it would fit in quite nicely with the landscape and would harmonise with the other rough-cast buildings in the neighbourhood, which I suggest the hon. Member for Falmouth and Camborne (Mr. Hayman) has never noticed because it is at least 70 miles from his constituency?
    Mr. Powell: The planning decision to which the Question refers does not impose requirements of a particular material, but only that the material should be agreed with the local planning authority.

    Battersea Park Tower
    Mr. Kershawasked the Minister of Housing and Local Government whether he will now take steps to forbid the erection in Battersea Park, at a cost of £50,000, of a high tower, in view of the desirability of reducing unnecessary and unproductive building work.
    Wing Commander Bullusasked the Minister of Housing and Local Government what were his reasons for granting planning permission for the erection of a tower in the Battersea fun fair.
    Mr. Sandys: I apologise for the fact that this is a very long answer.

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    The proposed tower in Battersea Park has been criticised by some on the ground that it is unnecessary and that, therefore, in the present economic situation, the expenditure involved is undesirable. That may be quite true. But it has no relevance to my decision. Planning controls were never intended by Parliament to be used for regulating capital investment, and it would be quite improper and impracticable to try and use them for that purpose.
    The tower is also objected to on the ground that it will be an unsightly and incongruous feature. There are many people, and I am one of them, who think that Battersea Park was not the best place to choose for a fun fair. But rightly or wrongly, Parliament so decided, and thereby accepted the inevitable disturbance of the peaceful character of the park and river bank.
    In the setting of a popular amusement garden it is difficult to maintain that an illuminated tower is out of place; and having regard to the illuminated landing-stage, coloured flood-lighting, Chinese lanterns, switch-back, water chute and other fun fair attractions, not to mention the neighbouring chimneys and gasometer, which are very much higher, I honestly do not believe that the addition of this tower will appreciably affect the amenities of the park or the general character of the scene.
    The new tower may not be a thing of great beauty, but there is no need for it to be an eye-sore; and I have no doubt that it will give pleasure to a great many people.
    Mr. Kershaw: Whilst appreciating that my right hon. Friend has taken his decision in this matter on town planning and not on financial grounds, is he aware that there are those who think that he has been misled by the London County Council in this matter, because not until yesterday afternoon did anybody at the L.C.C.—either the panel or the Town Planning Committe or the Council itself—ever consider this matter, and the only person who has done so, as far as I know, is the Chairman of the Committee?
    Mr. Sandys: First, I am assured that the procedure followed in the London County Council—though its internal affairs are not my business—was correct. In any case, I am not seeking to shelter
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    behind the L.C.C. I accept full responsibility for my decision, and the views of the London County Council were only one of a large number of considerations which I took into account.
    Wing Commander Bullus: Is my right hon. Friend aware that, in all the circumstances, most people will think the Minister's decision at least a reasonable one? Could he tell us the height of the tower and how it compares, for instance, with the well-known tower at Blackpool?
    Mr. Sandys: The new tower will be about 160 feet. I understand that the tower at Blackpool is more than three times as high. Furthermore, I think it is worth mentioning that the Battersea tower will be to some extent screened by trees up to about half its height.
    Mr. Mitchison: If this expenditure is against the national interest and the result will be as ugly as the right hon. Gentleman says, why does he not reintroduce building controls to stop this kind of thing instead of clamping down on public libraries and rural sewerage schemes?
    Mr. Sandys: I do not think we want to make this into a party issue.

    Synthetic Detergents (Report)
    Dr. Strossasked the Minister of Housing and Local Government what action he proposes to take, following the Report of the Committee on Synthetic Detergents; and if he will make a statement.
    Mr. Doddsasked the Minister of Housing and Local Government if he will make a statement as to the action he proposes to take to implement the recommendation of the majority report of the Committee on Synthetic Detergents for State control over the composition of household synthetic detergents; and if he will forthwith take whatever action is necessary to ensure that manufacturers will clearly stipulate on their packets the need to rinse hands and crockery in clean water after washing with detergents.
    Mr. J. Harrisonasked the Minister of Housing and Local Government, in view of the findings of the committee appointed to inquire into synthetic detergents and their effect upon rivers and sewerage work, and of the special circumstances that exist in and around

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    Nottingham, as the merging point for the waters of many Midland counties, the effects of these detergents being prominently revealed on these rivers, if he will treat this matter as one of urgency and indicate the action he proposes to stop this permanent and continuous damage.
    Mr. Sandys: I am examining the Committee's recommendations. Before making any statement, I propose to give reasonable time for all concerned to consider the Report, which was published only a few days ago.
    Dr. Stross: When he is considering the matter, will the right hon. Gentleman take into account, in particular, the health factor? Is he aware that, according to the Report, it is possible for excessive phosphates to enter into the drinking water that other people may have to take?
    Mr. Sandys: Yes, Sir; naturally, the health considerations are among the most important.
    Mr. Dodds: Might I support what my hon. Friend the Member for Stoke-on-Trent, Central (Dr. Stross) has said?

    Cornish Coastal Footpaths
    Mr. Haymanasked the Minister of Housing and Local Government what mileages, out of the 78 miles over which formal rights of way have not yet been negotiated, of the North and South Cornish coastal footpaths, respectively, are open to the public.
    Mr. Powell: Approximately 30 miles of the North Coast Route and 28 miles of the South Coast Route.
    Mr. Hayman: Will the Parliamentary Secretary do what he can to speed up the acquisition of the public rights of way over this long mileage, and will he bear in mind that only yesterday I had notice of an encroachment on public rights of way on the Helford River?
    Mr. Powell: The hon. Gentleman's last point is a separate matter. The work of acquiring rights of way is going on. There are now only 20 miles out of a total of 268 on these two routes which are not used by the public.

    District Hospital, St. Austell (Site)
    Mr. Haymanasked the Minister of Housing and Local Government when he expects to give a decision on a site for the proposed new district hospital at St. Austell.
    Mr. Powell: My right hon. Friend has just given his decision.
    Mr. Hayman: Is the Parliamentary Secretary aware that that news will be received with great satisfaction? [HON. MEMBERS: "How do you know?"] Whatever may come to pass, the hospital management committee wants to go ahead with plans for the new hospital.

    Recreation Ground, Cwmtillery
    The Rev. Ll. Williamsasked the Minister of Housing and Local Government why he refused the application of the Abertillery Urban District Council for a loan sanction to proceed with a proposed recreation ground at Cwmtillery.
    Mr. Powell: Because of the Government's decision to place an embargo for the time being on local authority loans for all but the most urgent purposes.
    The Rev. Ll. Williams: Is the hon. Gentleman aware that in the township of Cwmtillery, the National Coal Board is engaged in the expenditure of between £1 million and £2 million in capital investment, but that that money will be of no avail if miners are not forthcoming to enable the plans to be carried out, and that miners will not remain indefinitely in a place so devoid of ordinary amenities? Is the hon. Gentleman prepared to receive a deputation from the Abertillery Urban District Council on this urgent and, in our estimation, necessary matter?
    Mr. Powell: I am aware, from my own personal knowledge, of the need for this kind of facility in the Tillery valley, but this is a type of expenditure which, for the moment, must be deferred by reason of the economic situation.
    Mr. J. Griffiths: Before the Minister arrives at this decision, will he pay another visit to the valley and, in particular, to Cwmtillery, which is an important part of the South Wales coalfield? Does he not realise that actions of this kind are no inducement to the miners to produce the coal that we require?
    Mr. Powell: The importance of the facility is fully recognised, but if local authority capital expenditure is to be restricted as is at present necessary, this type cannot at the moment be allowed to go forward.
    The Rev. Ll. Williams: On a point of order, Mr. Speaker. The Minister has not answered the second part of my supplementary question, which was about a deputation.
    Mr. Speaker: I cannot help that.

    Gypsies
    Mr. Doddsasked the Minister of Housing and Local Government, in view of the need to have more information in respect of the size of the gypsy problem and the issues involved, if he will cause an investigation to be held on a national basis with a view to finding the best methods of dealing with the situation and so follow the enlightened policies of other European countries in dealing with gypsies.
    Mr. Powell: My right hon. Friend is prepared to look into particular local problems, but there does not appear to be any need for a general investigation.
    Mr. Dodds: Is the Parliamentary Secretary not aware that, as these developments take place, the position of the gypsies worsens, even when houses are built against their traditional camps? Is he not aware that local authorities are not solving this minority problem? When will the Government face their responsibilities, as other European Governments have done, to deal with the matter when unnecessary hardship is being created? Is he not aware that, if this position is not remedied, hon. Members on both sides of the House who call themselves Christian should hang their heads in shame?
    Mr. Powell: All these problems vary from place to place and with the nature of the employment of the persons concerned and the particular difficulties. I am still waiting for the hon. Member to send me details of a particular case which he has in mind.
    Mr. Dodds: Owing to the unsatisfactory nature of that answer, I shall continue to ask Questions until the matter is resolved.

    Factory, Cardiff (Noise)
    Mr. G. Thomasasked the Minister of Housing and Local Government whether he is aware of the inconvenience caused at Ely, Cardiff, by noise from the Western Welding Company factory; and whether he will make a statement.
    Mr. Powell: My right hon. Friend has recently agreed to the lease by the Cardiff Corporation of some land on which the company intends to erect a new factory building further away from the houses. The work will then be done under cover, instead of in the open as at present, and matters should improve.
    Mr. Thomas: Is the Minister satisfied that this proposal will eliminate the noise problem for these Ely residents, who at present are having their lives made a misery by this factory?
    Mr. Powell: The local authority has attached to the planning permission such conditions as it thought necessary to preserve the peace of the neighbourhood.

    Organisation (White Paper)
    Mr. Sorensenasked the Minister of Housing and Local Government what progress has been made in respect of the revision of local government.
    Mr. D. Jonesasked the Minister of Housing and Local Government if he will now make a statement about the reorganisation of local government.
    Mr. Sandys: I hope to publish the White Paper on local government organisation quite soon.
    Mr. Sorensen: Does that mean that the Minister will arrange, if possible, for a debate on his proposals in the White Paper?
    Mr. Sandys: Let us first get the White Paper published and then see about the debate.
    Mr. Mitchison rose—
    Mr. Speaker: We will have to wait to see the White Paper.

    Derating
    Lieut.-Colonel Cordeauxasked the Minister of Housing and Local Government whether he will consider, as a temporary measure, an appropriate percentage derating of shops and other

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    commercial premises to ease the inequitable burden imposed on them by the recent revaluation.
    Mr. Sandys: No, Sir. I do not think it would be a good thing to take piecemeal action in advance of the completion of our general review of local government finance.
    Lieut.-Colonel Cordeaux: That may take a long time. Does my right hon. Friend realise that in Nottingham, which may be considered a typical example, the average increase in the rateable value of shops is six times as great as in the case of dwelling houses, and that for dwelling houses with shop accommodation it is three times as great? Does he think it is right that thousands of small shopkeepers should be treated so unfairly compared with other ratepayers for at least four years?
    Mr. Sandys: As I have explained, the review is already well advanced. We hope to be in a position to discuss precise proposals with local authority associations in the autumn, and we hope to be able to announce our general conclusions on the policy as soon as possible after that.
    Mr. Mitchison: Is the White Paper which the right hon. Gentleman promised to include finance as well as re-organisation?
    Mr. Sandys: No, it has always been made quite clear that the two subjects are being reviewed separately. The White Paper to which I referred was that on local government organisation as distinct from finance.

    Water Supplies, Radcliffe
    Mr. J. Johnsonasked the Minister of Housing and Local Government whether he will give further details of the Amble Urban District Council water supply scheme for the village of Radcliffe, Northumberland.
    Mr. Powell: The scheme submitted by the Amble U.D.C. would enable it to give bulk supplies outside its district, including a supply for that part of the Alnwick rural district in which Radcliffe lies. However—and this corrects what I regret was an error in my reply to the hon. Member on 19th June—it would be for the rural district council to decide what places should be served and to
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    prepare a scheme accordingly, and no scheme for supplying Radcliffe has been submitted.
    Mr. Johnson: Is the Minister aware that, unless this scheme materialises, this village, which contains at least 200 miners—which, incidentally, was my birthplace—will decay? Will he give the utmost sympathy to any schemes which come before him in future?
    Mr. Powell: The initiative lies with the rural district council, but anything which it puts forward will be carefully considered.

    Allotments, Petworth (Use)
    Mr. Goughasked the Minister of Housing and Local Government if he is aware of the proposal to utilise valuable allotments at Petworth for building council houses, although more suitable sites are available; and if he will therefore use the powers under the Town and Country Planning Act to call in the planning permission granted for this development with a view to amending it.
    Mr. Powell: My right hon. Friend can find no grounds to justify his taking this decision out of the hands of the local planning authority.
    Mr. Gough: Would my hon. Friend be surprised if I were to inform him that there is a great deal of local feeling in this matter; that the local planning authority in this case has adopted Hitlerite methods, and that the rural district council put up a very reasonable plan as long ago as 1947? Will he look into this matter again?
    Mr. Powell: I have looked into this matter with some care, and I find that the proposal to which the Question refers is a proposal of the rural district council itself.
    Mr. Gough: In view of the unsatisfactory nature of my hon. Friend's reply, I beg to give notice that I shall raise the matter on the Adjournment.

  HOUSING

    Improvement Grants
    Mr. Barterasked the Minister of Housing and Local Government whether he will encourage the full utilisation of available national housing resources by

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    taking steps to require local authorities to give an undertaking to the owner of an improved or converted property that repayment of a proportionate part of the grant will be accepted within the period of 20 years and the property thereby freed from restriction on sale if the sale of the property arises from some reasonable cause.
    Mr. Sandys: In a circular issued last October, I asked local authorities to consider sympathetically any application to repay grant in these circumstances and to consult me before refusing such an application. Any further steps would require amending legislation.
    Mr. Barter: Is my right hon. Friend aware of the great satisfaction this will give, bearing in mind that considerable numbers of properties require improvement in this way?

    Unfurnished Lettings (Premiums)
    Mr. Palmerasked the Minister of Housing and Local Government whether he is aware of the continuing practice of advertising unfurnished flats, rooms, and houses to let and wanted coupled with the mention, under various descriptions, of large sums of money for obtaining occupation; and if he will introduce legislation to stop this practice.
    Mr. Sandys: There is no need for further legislation. The law already prohibits the charging of a premium or an excessive price for furniture and fittings in respect of houses to which the Rent Acts apply. In the case of houses outside the scope of rent control, no problem arises.
    Mr. Palmer: Is the right hon. Gentleman aware that this cynical exploitation of homeless people is continuing unchecked, because the earlier legislation has proved in practice to be a dead letter, and does he not feel any sense of responsibility?
    Hon. Members: Answer.

    Housing Lists
    Mr. Lewisasked the Minister of Housing and Local Government whether he is aware of the continued anomaly confronting thousands of people living in unsatisfactory housing conditions who are, through no fault of their own, unable to gain admittance on to any local
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    authority's housing list, due to the wide variance of application of the priority need and basis; and whether he will now take powers to allocate houses on a national basis.
    Mr. Sandys: I am, of course, aware of this problem. None the less, I think it best to leave local authorities to choose their own tenants.
    Mr. Lewis: I appreciate that the Minister is aware of the problem, but is he also aware of the problem confronting local authorities? Is he aware that there are in the East End of London thousands of people who have been bombed out three or four times and who cannot get on any housing list at all? Will he not, at least, ask the local authorities where the people are now living, where they were living, or where they hope to live, to help these people by taking them on their housing lists?
    Mr. Speaker: I think that that is enough for one supplementary question.
    Mr. Lewis: Might I have an answer to my question?
    Mr. Speaker: Mr. Lewis, Question No. 15.
    Mr. Lewis: Are right hon. and hon. Gentlemen opposite not now interested in the bombed-out people? They were interested in them during the war? [Interruption.]
    Mr. Sandys: Has the hon. Member finished?
    Mr. Lewis: No, I have not finished. On a point of order, Mr. Speaker. I asked a genuine, sincere supplementary question on behalf of people who have been bombed out, and I expect the Minister to give me an answer.
    Mr. Speaker: I have no doubt about the sincerity of the question. I waited for the Minister to answer, but he did not do so, and so I called the next Question.
    Mr. Lewis: I resent the jeers of wealthy hon. Members opposite who have three or four houses.
    Mr. Speaker: The hon. Member should not let that bother him. Mr. Lewis, Question No. 15.
    Mr. Sorensenasked the Minister of Housing and Local Government what

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    further consideration has been given to the problems, respectively, of families urgently needing accommodation who, for technical reasons, cannot be accepted for any local authority housing list and of persons or families who are homeless and need accommodation in half-way homes or similar centres.
    Mr. Sandys: Advice on these problems is contained in two reports prepared last year by the Central Housing Advisory Committee. These reports were sent for information to all housing authorities, and I am sending copies to the hon. Member.
    Mr. Sorensen: I thank the Minister for so intending. Is he aware that in many parts of the country—hon. Members must be acquainted with this—there are tragic cases of families having to walk the streets, having been evicted from their houses and unable to find accommodation? Does the recommendation he sent to local authorities cover that point?
    Mr. Sandys: The advice given is very comprehensive.

    Rents and Prices
    Mr. Lewisasked the Minister of Housing and Local Government whether he will take such action as will ensure that, for the next six months, there shall be no increase in the price of the goods and services coming within the control of his Department, and further to ensure that local authorities are not compelled to increase rents and other services within their control due to Government action, so as to assist in curbing the present inflationary spiral.
    Mr. Sandys: I would refer the hon. Member to the reply given him yesterday by my right hon. Friend the Minister of Supply. As regards the rents of council houses, the Government's policy was fully explained in the debates on the Housing Subsidies Act.
    Mr. Lewis: I heard the earlier reply. It was no good at all. Is the Minister aware that the council rents to which he has referred are going up and will go up? Can he now give us an assurance that, when he comes to deal with the Rent Restriction Acts, no action will be taken on his part to increase rents, so as to assist in curbing the inflationary spiral? May I have an answer to that question?
    Mr. Sandys: I understand that the statement of policy recently issued by the Labour Party—
    Mr. Lewis: I was not asking about that.
    Mr. Sandys: —involved the transfer of all privately-owned rent-controlled houses to local councils. The first effect would be, of course, to put up the rents all round.
    Mr. Mitchison: Is the right hon. Gentleman aware that that expression of opinion arises out of an insufficient perusal of the proposals and insufficient understanding of what they are?
    Mr. Lewis: In view of the difficulty confronting people in housing and the unsatisfactory nature of the replies given to me, I give notice that I shall raise the matter on the Adjournment.

    Midwives
    Mr. Snowasked the Minister of Housing and Local Government what advice he has sent to local authorities regarding the provision of houses for midwives; and whether he will take steps to place a responsibility on local health authorities to shoulder such a financial charge in respect of a service which is the responsibility of such health authorities.
    Mr. Sandys: I am sending the hon. Member copies of the guidance sent to local authorities. The second part of the Question is for my right hon. Friend the Minister of Health, but I understand that local health authorities already have power to provide dwellings for midwives.
    Mr. Snow: Is the right hon. Gentleman aware that in the case that I have in mind, which affects Rugeley Urban District Council in Staffordshire, there is some disagreement between the health authority, which is the county council, and the urban district council as to the financial responsibility? Is it not possible to lay the responsibility fairly and truly on the shoulders of the health authority, in the same way as the financial responsibility for police housing is arranged? Is he further aware that in the urban district there are far too few midwives, for the simple reason that there are no houses for them, and that this is creating a very difficult situation?
    Mr. Sandys: The question of police houses is, of course, one for the Home

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    Secretary. As far as I can gather from what the hon. Gentleman has said, I think the point that he is raising is one for the Minister of Health.

    New Towns
    Mr. Hunterasked the Minister of Housing and Local Government (1) the total number of houses planned to be built in the new towns for the London and Middlesex areas; and the total number built at the latest convenient date;
    (2) the number of families transferred from the London and Middlesex areas into the new towns being built for these areas at the latest convenient date.
    Mr. Sandys: Houses built in new towns are not earmarked in advance for families coming from particular parts of Greater London. I understand that by the end of last year the eight new towns in the Home Counties had provided houses for about 8,000 families from the County of London and about 7,900 from Middlesex.
    Mr. Hunter: Will the Minister pay special attention to the London and Middlesex areas? As he knows, local authorities are running short of housing sites, while housing lists are growing longer and longer. Will the Minister bring out new plans to give families in London and Middlesex some hope of being housed in the near future?
    Mr. Sandys: This is a matter which is constantly before me, and I have had discussions only quite recently with the L.C.C. I expect that house building in the new towns around London will continue at the rate of about 10,000 houses a year, and, of course, the County of London and the County of Middlesex get a very substantial proportion of those houses.
    Mr. Mitchison: At the present rate of progress, when will the L.C.C. be able to meet its housing requirements? Is it not time that the Minister did some more, not only in the way of new towns, but for over-spill around London and other urban centres such as Birmingham and Manchester?
    Mr. Sandys: The hon. and learned Member well knows that these are matters which I am actively discussing with the local authorities concerned.

    Caravan Sites
    Mr. Remnantasked the Minister of Housing and Local Government what advice he has now given to local authorities on caravan sites where a housing shortage persists.
    Mr. Powell: My right hon. Friend has not yet issued any general advice on this subject; he hopes to consult the local authority associations shortly.
    Mr. Remnant: Does not my hon. Friend agree that caravans on properly serviced sites are better housing accommodation than the conditions which many on the waiting lists are now undergoing?
    Mr. Powell: That is one of the points which my right hon. Friend wants to discuss with the local authority associations.

    London
    Lieut.-Colonel Liptonasked the Minister of Housing and Local Government whether he is aware that of the 53,341 families on the category A housing list of the London County Council, only 1,000 can expect to be housed this year; and whether, in these circumstances, he will make a special grant to increase the provision of further accommodation.
    Mr. Sandys: I am well aware of the housing difficulties in London. I understand that this year the L.C.C. expects to have over 8,000 houses to offer to families on its housing lists. A high proportion of these will be families from slum houses which are being demolished.
    Lieut.-Colonel Lipton: Is the Minister aware that, allowing for slum clearance developments, where people have to be rehoused, only 1,000 applicants in the most urgent category will be rehoused this year? Is he not appalled by the fact that, as a result of the Government policy, so many thousands of people in London are for ever denied the hope of being rehoused except in their coffins? Has the Minister no conscience in the matter at all?
    Mr. Sandys: The fact that the L.C.C. has decided to give a higher priority to slum clearance is a very good thing indeed. It shows that the policy behind the Housing Subsidies Act, 1956, is now beginning to work and have its effect. As I have said before, we on this side of the

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    House, at any rate, think that it is only fair that families living in slum conditions should now begin to get a rather bigger share of the new houses which are being built.
    Lieut.-Colonel Lipton: On a point of order. In view of the unsatisfactory nature of that reply, I beg to give notice that I shall raise the matter on the Adjournment.

    Manchester (Site)
    Mr. W. Griffithsasked the Minister of Housing and Local Government whether he will now say what site he has approved for Manchester's future municipal house-building programme.
    Mr. Sandys: I have nothing to add at present to the reply which I gave the hon. Member on 5th June.
    Mr. Griffiths: When will the right hon. Gentleman stop dithering about this matter which he has had before him for two years? He has had innumerable consultations with Manchester Corporation and the surrounding authorities. He admits the validity of Manchester's claim and its housing needs. All its available land will be exhausted by the end of next year. When will he consider doing something about that?
    Mr. Sandys: It is rather important that the local authorities concerned should try to find a solution which is agreeable to all concerned. That is what I am still trying to do. If it is not possible, then we shall have to consider what alternatives are open to us.
    Mr. Griffiths: Due to the unsatisfactory nature of the reply, I beg to give notice that I shall raise the matter on the Adjournment.

    All Hallows-on-Sea
    Mr. MacCollasked the Minister of Housing and Local Government whether he is aware of the proposal to build, by private enterprise, a new town at All Hallows-on-Sea, Kent; and whether, in view of the importance of assessing the needs of overspill on a national scale, he will require all applications for planning permission in this area to be referred to him.
    Mr. Sandys: I am aware of this important proposal, but I think it right that
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    it should be considered in the first instance by the Kent County Council, which is the local planning authority.
    Mr. MacColl: Does not the Minister agree that the question of overspill and new towns far transcends particular local interests, as in this case? Will not he bear in mind the feeling which will exist in London, Manchester and other places which are being held back in their need to treat overspill, that this is an attempt to leave the problem to speculative building? Will the right hon. Gentleman take the matter into his own charge?
    Mr. Sandys: In this case, the main problem is to provide houses for workers in the new oil refinery on the Isle of Grain. I am keeping in touch with the Kent County Council about this proposal. When I know its views, I will consider the wider implications of the whole project.

  EMPLOYMENT

    Coventry
    Mr. Gresham Cookeasked the Minister of Labour the numbers of the male labour force employed in Coventry at the beginning of the years 1946, 1951, and 1956, respectively.
    The Minister of Labour and National Service (Mr. Iain Macleod): Estimates of the total numbers of employees are compiled in respect of the end of May only in each year. The estimated total numbers of male employees in employment in Coventry were 110,200 at end-May, 1951, and 122,300 at end-May, 1955. Comparable figures are not available for 1946.
    Mr. Gresham Cooke: Do not these figures demonstrate that in recent years about 10,000 men must have come to the city of Coventry from other towns? Does not it demonstrate the fact that there is a good deal of mobility of labour? Cannot we conclude from that that any man who is unemployed in Coventry may be able to find a job in the town from which he came?
    Mr. Macleod: The figures show that rather more than 10,000 men were added to the labour force in Coventry. It does not necessarily mean that they came from outside, although I am quite sure that a number did. Of course, it is true that

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    there is a good deal of mobility of labour—much more than people think. I believe that in the manufacturing industries one person in three changes his job every year.
    Mr. Snow: Is not this a rather horrifying argument for the hon. Member for Twickenham (Mr. Gresham Cooke) to employ? Is it not a fact that, although a man can be trained to do certain work, it is a very different matter to put him into another industry? Is it not a fact that many of these people are rather young? The argument used by the hon. Member for Twickenham is not the sort which should be employed in these days.

    Standard Motor Company (Redundant Workers)
    Mr. Bowlesasked the Minister of Labour whether he is aware that discrimination is being practised at employment exchanges against workers who have been declared redundant by Standard Motors; and if he will take steps to stop this happening.
    Mr. Iain Macleod: No, Sir; but if the hon. Member were to write to me and explain what he has in mind, I would certainly look into his complaint.
    Mr. Bowles: Is the Minister aware that there are plenty of examples of men who have been to the exchanges and have been told to look for jobs themselves? Ought not the Ministry's officials to try to get these men jobs? When they have not that assistance and try to get jobs elsewhere, and the new employers find that they are ex-employees of Standard's, they are told, "I am sorry; the job is filled."
    Mr. Macleod: The hon. Member has no right to make such a serious charge against the staff of employment exchanges unless he is prepared to produce evidence to support it. I have asked for that evidence, and if the hon. Member produces it I will look at it.

    Factory Inspectorate
    Dr. Strossasked the Minister of Labour how many of the 95 districts of the Factory Inspectorate are without staff possessing university degrees in engineering or chemistry or physics; how many districts have more than one such graduate; and how these figures compare with those of the year 1939.
    Mr. Iain Macleod: There are now 96 districts. Of these, 36 have no inspectors with the qualifications in question and 11 have more than one such inspector. For 1939, when there were 92 districts, the corresponding figures are 24 and 23.
    Dr. Stross: In view of the fact that only one-third of the districts would therefore appear to have the necessary qualified staff, would the Minister tell us what action he proposes to take now so as to make the position better than it has been up to date?
    Mr. Macleod: No, not yet. The question of the technical strength of the Inspectorate is the most important matter, which is now before me as a result of the Departmental committee, of which the hon. Member is aware.
    Mr. H. Wilson: Is the Minister not aware that his Department is dismissing a considerable number of experienced inspectors with practical qualifications who have been serving the country faithfully for many years? In view of the extreme shortage of inspectors, why does he not reverse that policy?
    Mr. Macleod: We are nearer the establishment of inspectors than we have been for a very long time. Whether that establishment of inspectors should be increased and whether it needs to have more technically qualified people is the very matter which is now being considered.

  GOVERNMENT DEPARTMENTS (LAND)
  Mr. Ian Harveyasked the Prime Minister how far it remains the policy of Her Majesty's Government that property occupied by a Government Department should, when no longer required by that Department, be offered first to another Government Department before being made available to other potential purchasers.
  The Prime Minister (Sir Anthony Eden): Land and buildings which are no longer needed by a Government Department are normally sold. There is a procedure for notifying other Departments which might require the property before it is sold. If another Department needs land and the property is otherwise suitable, it is transferred so as to

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  avoid the need to acquire land in private ownership. As regards agricultural land, special arrangements were introduced in 1954. These restrict the transfer of land from one Department to another, except where the second Department would have been prepared to use compulsory powers to acquire it for an immediate need.
  Mr. Harvey: Is my right hon. Friend aware that this procedure gives rise to a certain amount of concern in areas such as Harrow, where a high percentage of Government Departments are already established, and, if the procedure of handing on the land from one Department to another goes on, local authorities and private citizens cannot get a sufficient look in?
  The Prime Minister: If my hon. Friend will be good enough to give me examples, I shall be very glad to look into them. It is a very difficult and highly technical question. What I am anxious to see is that the Government do not get more land at the end of the business than they had before.

  PROCEDURE OF THE HOUSE (SELECT COMMITTEE)
  Mr. Emrys Hughesasked the Prime Minister if he will widen the terms of reference of the proposed Select Committee on Procedure so that it will be able to consider the question of arranging for the Scottish Grand Committee to sit in Scotland.
  The Prime Minister: No, Sir. The proposal that the Scottish Standing Committee should be enabled to meet in Scotland was examined by the Royal Commission on Scottish Affairs. It reported that the practical disadvantages in the way of adopting it outweighed the arguments in favour of it.
  Mr. Hughes: Is the Prime Minister aware that no Scottish Member of Parliament sat on the Royal Commission? If Scottish Members had sat on it there would have been different recommendations.
  The Prime Minister: It would be possible for the Scottish Grand Committee to sit in Scotland during the Recess if that were thought to be at all helpful.
  Mr. Rankin: In view of the Prime Minister's refusal to accept the suggestion of my hon. Friend, will he consider establishing a Scottish Parliament for Scottish affairs?
  Mr. G. M. Thomsonasked the Prime Minister if he will include in the terms of reference of the proposed Select Committee on Procedure in Public Business provision for a review of the allocation of time for Parliamentary Questions between the various Departments, with a particular view to increasing the number of occasions on which the Secretary of State for Scotland is available for questioning.
  The Prime Minister: I believe that the present arrangement whereby the order of Questions to Ministers is reviewed in discussions through the usual channels and in consultation with the Authorities of the House is the most satisfactory one. This arrangement provides flexibility to meet new circumstances as they arise. Any additional opportunities for Questions to my right hon. Friend the Secretary of State for Scotland would have to be at the expense of Questions to some other Minister, and I have no reason to think that this would command the general support of the House.
  Mr. Thomson: Is not the Prime Minister aware that the Secretary of State for Scotland recently took on responsibility for Scottish laws and electricity and that no extra time is given to Scottish Members to ask Questions on these subjects which formerly they were able to address to United Kingdom Ministers? Will he not take up that matter through the usual channels?
  The Prime Minister: It is far better to discuss these matters through the usual channels. I do not think the point to consider about Questions is whether all topics are exhausted under one particular heading, or whether Question Time should produce, as I think it should, a wide variety of questions on matters of national interest.
  Mr. Benn: Would not the Prime Minister look at this matter again? Would he not agree that when the Select Committee on Procedure is to be set up it should not be unduly restricted in its terms of reference, so that hon. Members who have

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  points they think to be important may be allowed to submit them for the consideration of the Committee and the House?
  The Prime Minister: It is a matter of balancing advantage, and, as at present advised, I do not think that the House as a whole would welcome a further allocation of time in this way.
  Mr. Hamiltonasked the Prime Minister whether he will move to appoint a separate all-Scottish committee of investigation to inquire into the functions and composition of the Scottish Grand Committee.
  Mr. Rossasked the Prime Minister the nature of the representations made, and by whom, regarding the working of the Scottish Grand Committee which has caused him to include it in the terms of reference of the Select Committee on Procedure which it is proposed to set up.
  The Prime Minister: It would hardly be appropriate to refer to a separate Scottish committee a matter which must clearly be considered in the context of the general arrangements for carrying on the business of the House.
  The various representations made by hon. Members have related in the main to the possibility of transacting Scottish business in Committee with a less continuous demand on the time of the whole body of Scottish Members and to enable them to take their part in the work of other Standing Committees dealing with United Kingdom Bills affecting Scotland.
  Mr. Hamilton: Can the right hon. Gentleman say, in the first place, whether representations were made on this question by hon. Members on this side of the House, or whether they were made solely by his hon. Friends? Would he say further whether the representations made by his hon. Friends were to the effect that the Scottish Grand Committee should be so constituted as to allow his hon. Friends to contract out of their responsibilities to the Scottish electorate and look after their private interests outside the House?
  The Prime Minister: There were a number of representations, as the hon. Member will recall. In any event, there will be opportunities to debate this when the Motion for the setting up of the Select Committee on Procedure is put forward.
  Mr. Woodburn: Is the right hon. Gentleman aware that my hon. Friends and those of his hon. Friends who represent Scottish constituencies think it undesirable that people who are not acquainted with the problems of the Scottish Grand Committee should endeavour to impose any kind of reform on the Committee, and that if such an investigation should take place it should be done by consultation among the existing Members and not necessarily those who understand Army Estimates?
  The Prime Minister: I think that we should welcome consultation on that point.

  DISARMAMENT
  Mr. V. Yatesasked the Prime Minister when he proposes to deliver the reply to the letter from Mr. Bulganin regarding the new approach to disarmament by the Union of Soviet Socialist Republics.
  The Prime Minister: Mr. Bulganin's proposals were also made to six of our Allies. Their contents concern them as closely as they do us. We are at present discussing this matter with them.
  Mr. Yates: Does not the Prime Minister consider that the decision of the Russian Government—which involves a demobilisation far in excess of the total of the Army, Navy and Air Force in Britain—is worthy of more prompt consideration? Why should there be such delay upon a matter which is so important?
  The Prime Minister: All disarmament is relative. While we welcome all disarmament, it remains relative. Since these proposals were addressed to a number of Allied Governments, it seemed not only right but, to me, necessary that we should consider together what our reply should be and pursue a common policy which, we hope, will produce further good results.
  Mr. Gaitskell: Can the Prime Minister say when these consultations with our Allies are likely to be completed, and when the proposed reply will be ready?
  The Prime Minister: I am sorry, but I cannot, as the right hon. Gentleman understands, because it does not depend

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  upon us when the joint reply will be ready. I can say that the discussions are already proceeding. I should not wish the delay to be unduly long. If it were, I would prefer an intermediate reply.

  PRICES (STABILISATION)
  Mr. Palmerasked the Prime Minister if he has taken note of the decision of the electricity supply industry to refrain from raising prices in spite of increased coal charges; and whether, in his conversations with the representatives of private enterprise concerns using coal, he will invite them to follow the example of this nationalised undertaking.
  The Prime Minister: I have already welcomed the decision referred to by the hon. Member and also the decision of the National Coal Board. My right hon. Friends and I have already pointed out to representatives both of industry and of labour the great importance attached by the Government to achieving stability in costs and prices.
  Mr. Palmer: May I put two points to the Prime Minister on this matter? In the first place, is he aware that electricity was already one of the cheapest things available in this country compared with pre-war, and that this decision may possibly risk the financial stability of the industry? Secondly, is it fair that any nationalised industry should have commercial decisions imposed on it by Ministerial influence while free enterprise industries are, apparently, to be free of control?
  The Prime Minister: I do not think this does an injustice to anyone. There are other Questions on the Order Paper about the position of the electricity boards. They have the necessary finances to enable them to take action, and they have decided to take it. I think we should welcome it.

  QUESTIONS TO THE PRIME MINISTER
  Sir I. Fraserasked the Prime Minister if he will arrange to answer Questions at an earlier point than No. 45.
  Mrs. L. Jegerasked the Prime Minister if, in view of the increasing number of occasions on which Question No. 45 and subsequent Questions to him
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  are reached very late, or not at all, he will arrange for his Questions to begin at No. 35 on Tuesdays and Thursdays.
  The Prime Minister: Questions to the Prime Minister have begun at No. 45 for a very long time, and I would not wish lightly to alter a practice that has served the House well for so long. This is a matter for the House as a whole, and I am prepared for it to be discussed through the usual channels in order to see if any change is desirable in the next session.
  Sir I. Fraser: Will my right hon. Friend consider the curious paradox that whoever holds his office is the only Minister who does not know whether he will be called on to answer all of the Questions addressed to him? Yet a great deal of trouble, including the sending of cables all over the world and inquiries over the United Kingdom, as well as his own preparation, has to proceed and the time when he comes to the House may possibly prove a fruitless journey?
  The Prime Minister: I am the servant of the House in this matter. I think it is something like 40 years since this arrangement was originally made, and I do not think that we should lightly depart from it. But I will meet the wishes of the House.
  Mrs. Jeger: Although the Prime Minister rose at 3.15 p.m. today, would not he agree that that was rather exceptional and that recently, with increasing frequency, the House has been deprived of the opportunity of putting Questions to him? Will the right hon. Gentleman bear that in mind when he is examining the suggestions put forward?
  Captain Pilkington: Is it not the fact that it would be possible to reach Questions addresed to the Prime Minister much earlier, and also to ask many more Questions, if some supplementary questions were shorter, especially those asked by some hon. Members?
  Mr. Edward Evans: Would it meet the case if Questions to the Prime Minister were asked at a specific time, say three o'clock every afternoon?
  The Prime Minister: This goes deep into the practices of the House and I would rather not commit myself without consultation, and without your guidance, Mr. Speaker.

  HIGH COMMISSIONERS OF UNITED KINGDOM AND AUSTRALIA (STATUS)
  Sir W. Anstruther-Grayasked the Prime Minister if he will propose at the Dominion Prime Ministers' Conference that the status of the High Commissioners of the United Kingdom and Australia should be raised on a reciprocal basis to that of Ambassador in both countries.
  The Prime Minister: The High Commissioners of the United Kingdom and Australia, as of all other members of the Commonwealth, already rank with Ambassadors.

  MEMBERS (SALARIES)
  Mr. Lewisasked the Prime Minister whether he has considered the communication sent to him from the hon Member for West Ham, North, concerning the question of the salaries of Members of Parliament; and if he will make a statement.
  The Prime Minister: I have studied the communication. The hon. Gentleman will have seen the published correspondence which I have had on this matter with the right hon. Gentleman the Leader of the Opposition and the right hon. and learned Gentleman the Member for Montgomery, and I have no further statement to make.
  Mr. Lewis: Yes, but the Prime Minister will be aware that I sent to him an excellent leading article from the Scotsman. As many Englishmen do not take the trouble to read that paper, will the right hon. Gentleman publish the article in HANSARD so that hon. Members on both sides of the House can be fully acquainted with the rights of the argument as outlined by the Scotsman?
  The Prime Minister: I should imagine, though I have not consulted them, that already a variety of views has been expressed by the newspapers on this subject. I do not propose to make myself responsible for giving them further publicity through the columns of HANSARD.
  Mr. Gaitskell: Will the Prime Minister answer one question? If it be the case, as I gather from his letter, that he believes this to be a matter for the House of Commons, will he explain why the Government have not carried out the decision of the House of Commons made in 1954?
  The Prime Minister: This Question does not go into that matter. This Question deals with whether I would publish an article which appeared in the Scotsman. I have given my reasons for not doing so. My wider reasons I have expressed in my reply to the right hon. Gentleman, which he has received.
  Mr. Gaitskell: I do not think the Prime Minister quite understood my point. It related to the letter which he sent to us and to which he referred in his answer. If, in fact, it is his view that this is a matter for the House of Commons, I am asking why, then, does not he accept the decision of the House of Commons on this matter arrived at with a majority of 114 in 1954?
  The Prime Minister: I very much regret having had to send a letter in the form I did to the right hon. Gentleman. I very much regret it, and that is true. I was forced to do so. It is our responsibility to try to weigh this matter and think of the right course to follow. I regret very much that it had to be done, but in the circumstances, in the light of what the right hon. Gentleman knows we are trying to achieve throughout the nation, I cannot see that I could possibly have sent him any other reply.
  Mr. Gaitskell: May we press the Prime Minister a little more on this matter? Would he, in view of what he said about the responsibility of the House, be prepared to leave this matter to a free vote of the House now?
  The Prime Minister: I do not think any Government could possibly do that—[HON. MEMBERS: "Oh."]—perhaps hon. Members would let me finish my sentence—in the light of the terms of the reply which I sent to the right hon. Gentleman.

QUESTIONS TO MINISTERS
Mr. Parkin: On a point of order. I desire to raise with you, Mr. Speaker, a matter which obviously calls for your intervention and action. On page 4453 of the Notices of Motions and Orders of the Day, which were delivered to hon. Members this morning, there appears a Question, provisionally numbered 64, in the name of the right hon. Member for Ipswich (Mr. Stokes).

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This Question, as printed, contains an implication of the most alarming constitutional nature, involving, indeed, a matter of Privilege. I apologise for the fact that I did not notice it myself until you were in the Chair and so was unable to give you notice of this point of order. Perhaps, after you have studied this Question, you will be able to decide whether it is the right hon. Member for Ipswich, the Clerk of the House, or the Printer, who ought to be sent to the Clock Tower.
Mr. Speaker: This matter is meaningless to me at the moment as I do not know the Question which is being referred to, but I will look into it, of course.

GOVERNMENT EXPENDITURE (ECONOMIES)
The Chancellor of the Exchequer (Mr. Harold Macmillan): With your permission, Mr. Speaker, and that of the House, I would like to make a statement about economies in Government expenditure.
In my Budget speech I said that the Government had decided to put in hand a review of all Government expenditure, civil and military, in order to reach savings amounting to £100 million in this current year on services provided for in the Estimates as published.
I think it right now to give the House an interim report. I will make a further report at a later date.
Considerable progress has been made towards the achievement of our purpose, and up to the present date decisions have been taken by the Government which are estimated to yield this year savings on the published Estimates amounting in all to about £76 million. Of this total, £36½ million is on the defence programme, £14 million on defence expenditure by civil Departments and £25½ million on other Civil Estimates.
Of the defence savings, about £11 million is on Navy Estimates, nearly £17 million on Army Estimates and about £8¾ million on Air Estimates. In each case the main savings arise from abandoning or deferring orders which would otherwise have been placed, from increasing the use of existing stocks and from expediting the disposal of surplus stocks.
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These decisions, reached within a period of two months from the Budget, represent further good husbandry by the Service Departments. They do not reflect any change in the size or shape of our fighting forces as a result of the review of our defence policy which, as I announced in my Budget statement, the Prime Minister set in hand last April. Any major decisions in this field would, course, need to be taken after consultation with our Allies.
On the defence expenditure of civil Departments the main savings arise from curtailing purchases of mobilisation equipment (£2½ million), food stocks (£8 million) and equipment for oil storage and distribution (£2 million).
On the other Civil Estimates, the reductions in the bread and milk subsidies announced in February and in the Budget, after deducting the resulting extra cost of school and welfare milk, the extra cost of the Farm Price Review, and the increases in family allowances, leave a net saving of £12½ million.
We can now add to this a number of miscellaneous savings, including a variety of administrative economies, amounting to £13 million. Among these I should mention that the charge for school meals will be increased by, 1d. from September so as to cover the cost of the food supplied, in accordance with the policy of successive Governments, and capital expenditure on the Schools Meals Service will be slowed down; the savings will be £2¼ million.
I will circulate in the OFFICIAL REPORT details of the savings on individual Estimates. Advance copies will be available in the Vote Office immediately.
Revised Civil Estimates embodying the Government's decisions will be presented in the first week in July in all cases except those in which the savings are small in relation to the totals of the existing Estimates.
Some defence Votes have already been passed by the House. Revised Estimates will be presented for those defence Votes which have not already been taken and on which significant savings arise.
I would repeat that the Government's decisions relate to savings on services provided for in the published Estimates for this year. As I explained in my reply to the Budget debate, the decisions take

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no account of additional necessary expenditure not provided for in the Estimates: for this, we shall, of course, have to present Supplementary Estimates in the usual way.
On the other hand, the present savings take no credit for underspendings on the Estimates during the year, apart from those deliberately planned. But, whatever the final total of the year's expenditure may be, it will be less than it otherwise would have been by the amounts now to be saved as a result of the decisions which I have announced.
Mr. H. Wilson: In his oral statement, the Chancellor has, of course, given the House very little information. He will understand that we shall want to study the detailed Estimates that are being circulated so that we may decide whether it will be necessary to debate this matter immediately or whether it should be done under the separate Estimates. Would the Chancellor of the Exchequer, however, answer one or two questions on what he has already said?
With regard to the defence Estimates, will the right hon. Gentleman say how much of the savings simply represent a running down of stocks and, therefore, are a merely once-for-all saving that will not be capable of repetition next year, or how far he expects to get genuine savings in defence? Will he also tell us when he expects to be able to inform the House of the final result of the negotiations with the German Government on the question of the support costs?
My other general question—which has to be general until we see the detailed proposals of the Chancellor—is this: is the Chancellor aware that today, to judge from the ticker tape, the £ now stands at a lower figure than at any time over the last 10 months? Does he not realise that it is about time he got to grips with the economic situation as a whole, instead of thinking that he can solve this problem by economies in school meals and things of that kind?
Mr. Macmillan: To reply to the last question which the right hon. Gentleman asked me, it is characteristic of him, it seems, to bring in a much more general point which we have discussed many times and which I am quite ready to debate with him again, as to the record of this Government and of the one of
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which he was so distinguished a member—for so short a time.
With regard to the question of the effect on the defence Estimates of the various schemes, in many cases there will be economies which will be once for all, but in many more cases, by not placing orders or by decisions to run at lower levels of stocks, these economies will be continued into the following years. It would be difficult to generalise, but, broadly speaking, a considerable relief will be made both to the Exchequer and to the economy by withholding of orders, the cancellation of orders and by the use of stocks rather than the purchase of fresh stocks.
Mr. C. Davies: Does the right hon. Gentleman realise that this is a disappointingly small mouse he has introduced? When may we expect from the Government a statement of what ought to be a drastic realistic reduction in our defence programme, and not merely a saving of £50 million in our defence programme of nearly £1,500 million?
Mr. Macmillan: I made it clear that this is an interim report dealing with what it was in our power to do within a period of eight weeks. As I am sure the right hon. and learned Member will realise, those wider questions involve very big decisions which affect the Commonwealth and our Allies. While we should not shrink from them, I am sure he would agree that we should not enter into them and reach decisions without consultation over the future.
Mr. Davies: I agree, but when may we have a statement?
Mr. Macmillan: I hope it will be possible to make a statement within a reasonable time, but not within a few weeks. No one is more anxious that I am over that matter.
Sir R. Boothby: At the end of his statement the Chancellor referred to Supplementary Estimates. May I ask whether he expects that those will be sufficiently large to affect in any great degree the total amount of the economies that my right hon. Friend has achieved?
Mr. Macmillan: That is very difficult to tell. There will be Supplementary Estimates. I should answer the question about German support costs. That

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negotiation is still proceeding and, therefore, I cannot deal with it now, but it is quite possible that there will be an additional Supplementary Estimate over the amount. It is quite possible that that will have to be provided for, but I made it clear that I was trying to deal with the Estimates as published.
There will be Supplementary Estimates, but, if the experience of other years runs true, there will be savings. Those are things which we cannot help one way or the other, but these are deliberate acts of policy and if there are to be extra costs it is surely good to make sure that there are also savings.
Mr. Bellenger: Does the Prime Minister recollect that some weeks ago, in answer to a Question of mine about setting up a Select Committee to go into the much wider question of defence reorganisation, he said that his mind was not closed on that question? In view of the statement made by the Chancellor, which only just scrapes the surface of defence expenditure, may I ask the Prime Minister whether he is still open to receive representations with regard to setting up a Select Committee to go into the wider implications of reorganisation of national defence?
The Prime Minister: I am sure that the right hon. Member, with his experience, distinguishes between economies of this kind—Service economies which can be made by our own action within existing international policy—and the very much wider question of any kind of defence arrangement which must be agreed between several nations which are all closely our Allies. It is the latter question on which neither my right hon. Friend nor I am in a position to make a statement to the House.
Mr. Osborne: Is my right hon. Friend the Chancellor aware that those on these benches are delighted with the steps he has taken to compel the nation to live within its income and that we hope he will continue with that process? My right hon. Friend stated that the economies were largely the result of orders cancelled or deferred. Can he tell the House what proportion has been cancelled and what proportion has been merely deferred because, obviously, those which have been deferred will have to come forward again?
Mr. Macmillan: When my hon. Friend asks a question I am always a little uncertain whether it is going to be a compliment or an accusation. This time I am very grateful to him.
Some of these economies are cancellations, some are the using up of stocks and some are deferments, in the light of the various points made by the right hon. and learned Member for Montgomery (Mr. C. Davies), anticipatory to the position in view of longer-term decisions likely to follow.
Mr. Jay: So that the House might be clear on the facts, would it be true to say that, as the Chancellor originally budgeted this year for expenditure above the line of £242 million more than last year, he is now budgeting, apart from Supplementary Estimates and overspending, for expenditure above the line of over £150 million more than last year?
Mr. Macmillan: No, Sir, I do not think that that would be exactly accurate, although I have not the precise figures in my mind. What it means is that I said in the Budget statement that I would weigh carefully whether I ought to ask the Committee of Ways and Means to raise fresh taxation to fortify a surplus or to make some economies, and I thought that the Committee and the country would prefer a real effort at economy. Without getting into some of the rather deeper policies which will take a little longer, in two months we have succeeded in making economies reaching this considerable sum, which will be a corresponding relief to our burden.
Mr. Stevens: Can my right hon. Friend say how the negotiations on German support costs are related to the very welcome interim economies that he has announced?
Mr. Macmillan: They are still being carried on and I do not know when a statement will be possible. I do not think it will be very long now. Whatever may be the result, those are matters we have to deal with and take in our stride. If they should result in an additional Supplementary Estimate, there is all the more reason for making these savings at present.
Mr. H. Wilson: Further to the question asked by my right hon. Friend the Member for Battersea, North (Mr. Jay),

273
and in view of the desire of the Chancellor to have a general debate with us on the merits of the two successive Governments—which we welcome with relish—will the right hon. Gentleman answer a purely factual question in preparation for that debate? As a result of these economies, when taken fully into account, will he say how much the level of Government expenditure this year will exceed the level of Government expenditure in our last year of office? Will it be £700 million, £800 million or £1,000 million?
Mr. Macmillan: No, Sir, but I can say that this year, as the year before and the year before that, Government expenditure has been a continually decreasing proportion of total expenditure.
Several Hon. Members rose—
Mr. Speaker: Order. There must be a debate some time or other on these matters.
Following are the details:

ECONOMIES IN GOVERNMENT EXPENDITURE: EFFECTS ON ESTIMATES, 1956–57 (Revised Estimate will be presented for Votes marked *)

I. DEFENCE

Vote No.

Title of Vote

Reduction

Notes

£000

NAVY ESTIMATES

1

Pay, etc. of Royal Navy and Royal Marines.

1,000

Manpower adjustment.

2

Victualling and clothing for the Navy.

280

Reduction of clothing purchases by use of stocks.

8,

II

Shipbuilding, repairs, maintenance, etc.: material*.

3,100

Run-down of stores and of oil fuel stocks; accelerated disposal of surpluses.

8,

III

Shipbuilding, repairs, maintenance, etc.: contract work*.

2,980

Rephasing of aircraft programme, cuts in machinery production programme.

9

Naval armaments*

2,080

Run-down of armaments stores, cuts in ammunition production programme.

10

Works, buildings and repairs at home and abroad.

1,150

Accelerated sales of property; review of minor works.

11

Miscellaneous effective services

320

Reduction in air training programme.

TOTAL

10,910

ARMY ESTIMATES

1

Pay, etc. of Army

700

Local expenditure in Germany is being reduced.

5

Movements

150

Administrative economies in Germany.

6

Supplies, etc.

3,500

Mainly reduction of stocks.

7

Stores*

11,000

Increased use of reserves for maintenance, disposal of surplus stocks and a cut in the production programme.

8

Works, buildings and lands

1,500

Review of the building programme.

TOTAL

16,850

AIR ESTIMATES

1

Pay, etc. of the Air Force

1,000

Manpower adjustment.

6

Supplies*

2,050

Adjustment of purchases due partly to run-down of stocks.

7

Aircraft and stores

4,620

Accelerated disposal, use of stocks and cancellation of projects.

8

Works and lands

1,070

Review of works programme.

TOTAL

8,740

DEFENCE TOTAL

36,500

II. CIVIL

Class and Vote No.

Title of Vote

Reduction

Notes

£000

I

4

Treasury and subordinate Departments.

65

Economies in exchange control and other administration.

II

1

Foreign Service*

325

Administrative economies (£150,000) and increase in passport fees (£175,000).

2

Foreign Office Grants and Services*

525

Reduction in grants and loans to international organisations and agencies.

5

Commonwealth Relations Office

70

Administrative economies.

6

Commonwealth Services

80

Reductions in Colombo Plan expenditure.

9

Colonial Services*

1,000

Reduction of loan to Kenya.

10

Development and Welfare (Colonies, etc.)*.

750

11

Development and Welfare (Federation of Rhodesia and Nyasaland, etc.).

60

Reduction of grants and loans for research and for development and welfare schemes.

III

2

Home Office (Civil Defence Services)*.

1,125

Reduction in purchases of equipment and materials, and other economies.

4

Prisons (England and Wales)

199

Administrative economies and deferment of certain capital works.

5

Child Care (England and Wales)

76

Earlier closing of approved schools and restriction of capital expenditure.

9

County Courts*

180

Increase in fees.

15

Scottish Home Department (Civil Defence Services)*.

124

Reduction in purchases of equipment and materials, and other economies.

IV

1

Ministry of Education*

1,386

Savings from increase in price of school meals (£1,200,000); reduction of capital expenditure (£600,000); and increase in fees for further education (£150,000); offset by increased cost of school milk subsidy consequential on reduction of general milk subsidy (£564,000).

14

Public Education, Scotland*

190

11/80ths of English savings on school meals, capital expenditure and further education (£268,000); offset by increased cost of school milk subsidy consequential on reduction of general milk subsidy (£78,000).

V

1

Ministry of Housing and Local Government*.

265

Economies in administration and civil defence expenditure; and reductions in grants to local authorities for town and country planning, National Parks, and restoration of property used for temporary defence works.

4

Ministry of Health*

+1,830

Administrative economies (£45,000); offset by increased subsidy on welfare milk consequent on reduction in general milk subsidy (£1,875,000).

5

National Health Service, England and Wales*.

573

Civil Defence.

10

Department of Health for Scotland*

+205

Increase in subsidy on welfare milk consequent on reduction in general milk subsidy.

VI

3

Board of Trade (Strategic Reserves)*.

750

See footnote †".

4

Services in Development Areas*

750

Adoption of more stringent criteria for new building.

8

Ministry of Labour and National Service.

475

Administrative economies following a review of the work of the Department.

9

Ministry of Supply

1,500

Economies on miscellaneous items, partly reflecting the reduced level of defence expenditure.

Class and Vote No.

Title of Vote

Reduction

Notes

VII

1

Ministry of Works

357

Administrative economies following on reductions in the programme.

3

Public buildings, United Kingdom*

1,126

Economies in capital and maintenance expenditure.

4

Public buildings, overseas

71

Economies in capital and maintenance expenditure.

9

Stationery and printing*

500

Reduced expenditure on paper, printing, general office supplies and machinery.

VIII

1

Ministry of Agriculture, Fisheries and Food*.

350

Staff savings as a result of administrative economies and reductions of functions.

2

Agricultural and Food Grants and Subsidies*.

23,935

Reduction of subsidies on bread and milk (—£41,300,000) offset by effects of Agricultural Price Review (+£17,365,000).

3

Agricultural and Food Services*

632

Various economies.

4

Food (Strategic Reserves)*

8,314

Reduction in purchases.

8

Agricultural Research Council

70

Economies in capital expenditure.

10

Development Fund

50

General economy.

11

Forestry Commission

53

Economies in training and research and reduction in purchases of equipment.

12

Department of Agriculture for Scotland*.

+1,908

Administrative economies (£15,000); reduction of general milk subsidies (£1,463,000) offset by effects of Agricultural Price Review (£3,536,000).

13

Fisheries (Scotland) and Herring Industry*.

106

Various economies.

IX

1

Ministry of Transport and Civil Aviation*.

125

Administrative economies and an increase in driving test fees.

2

Roads, etc., England and Wales

180

Economies in maintenance expenditure.

3

Transport (Shipping and Special Services)*.

105

Expenditure on ports.

4

Civil Aviation*

343

Economies mainly in capital expenditure.

5

Ministry of Fuel and Power

160

Administrative economies.

6

Fuel and Power (Special Services)*

2,295

Economies in capital expenditure on oil installations and in civil defence measures in the gas and electricity industries.

8

D.S.I.R.

150

General economy.

X

2

Ministry of Pensions and National Insurance.

100

Administrative economies.

4

National Insurance and Family Allowances*.

+6,500

Increases in family allowances.

5

National Assistance Board

160

Administrative economies.

Estimates showing reduction of less than £50,000 each.

376

NET TOTAL, CIVIL ESTIMATES

39,583

TOTAL: DEFENCE AND CIVIL

76,083

†In accordance with the policy of reducing these reserves, turnover purchases of materials are being reduced by about £10 million below the total provided in the original Estimate. A revised Estimate will be presented to give effect to this reduction; but since, for technical accounting reasons, proceeds from sales to be appropriated in aid of the Vote will also be less, the net Estimate will only be reduced by the £750,000 shown above.

ORDERS OF THE DAY

  FINANCE (No. 2) BILL
  Considered in Committee [Progress, 25th June].
  [Sir CHARLES MACANDREW in the Chair]

  FINANCE (No. 2) BILL

    New Clause.—(INCREASE OF RELIEF IN RESPECT OF INSURANCE PREMIUMS PAID BY SELF-EMPLOYED PERSONS AND NON-PENSIONABLE EMPLOYEES.)
    (1) In relation to a claimant to whom this section applies, section two hundred and nineteen of the Income Tax Act, 1952 (which provides for relief in respect of certain insurance premiums and similar payments) shall have effect with the substitution for "two-fifths", wherever that word occurs in that section, of "two-thirds".
    (2) This section applies to any claimant, who satisfies the following conditions, that is to say that

    (a) the said section two hundred and nineteen applies to him;

    (b) he is not entitled to, or elects not to claim, any relief under section eighteen of this Act; and

    (c) three-quarters or more of his income chargeable to tax for the year of assessment in question consists of relevant earnings for the purposes of Part III of this Act.—[Mr. Gordon Walker.]

    Brought up, and read the First time.
    3.50 p.m.
    Mr. Gordon Walker: I beg to move, That the Clause be read a Second time.
    This new Clause has a very respectable ancestry and we move it with very serious intent. I hope the Financial Secretary, who, I gather, is to reply, will give it very careful consideration.
    He will be aware, as will the Committee, that the new Clause puts into legal words the views of two people who dissented from the Millard Tucker Report and put in a written dissent—Mr. Woodcock and Sir John Cater. It also represents the views of the minority of the Royal Commission on The Taxation of Profits and Income on this matter.
    Both those two bodies of people drew a clear distinction between self-employed people, on the one hand, and non-pensioned employees, on the other hand, and the minority of the Royal Commission drew a sharp distinction between those taxed under Schedule D, with the exception of those under Case II, and
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    those taxed under Schedule E. The dissenters to the Millard Tucker Report and the minority of the Royal Commission both drew a very clear distinction in respect of tax relief on premiums for annuities between self-employed people and others, on the ground that self-employed people were not suited to the normal pension arrangements which exist under various Acts which give benefits to those schemes.
    First, their remuneration is not under contract of service and is, therefore, not predictable in the way that an employee's remuneration is predictable. Secondly, most self-employed people have no regular retiring age, as have employed people. Very often they have capital resources which make it less necessary for them to make provision for their old age. This applies particularly to controlling directors who, by definition, must be people with capital resources.
    In this class of self-employed people, particularly outside Case II, we find the most massive tax avoidance. We also find that they are in a position to make the greatest additions to their spending income, as distinct from their taxable income, either by expense allowances for entertainment or by direct capital gains. For that reason both Mr. Woodcock and Sir John Cater, on the one hand, and the minority of the Royal Commission, on the other hand, rejected the Millard Tucker proposals in respect of these pensions for self-employed people.
    But Mr. Woodcock and Sir John Cater said—and this point is embodied in our new Clause—that the high taxation which has lasted for a very long time has operated in one respect to the disadvantage of self-employed people and non-pensioned employees as against pensioned employees. As they pointed out in their dissenting note, the effective value of the existing tax relief on life insurance premiums under the present law works to the disadvantage of self-employed people and non-pensioned employees. The limitation of the allowable premiums to two-fifths is unfair, under the very high taxation which now prevails, to self-employed people and non-pensioned employees.
    As the right hon. Gentleman will recall, they suggest that the right way to deal with this is to raise from two-fifths to two-thirds the limitation which is allowed for tax relief on premiums, of course under the existing restrictions of the law,

    281
    but add that this new concession should be limited to self-employed people and non-pensioned employees.
    This would be by far the simplest way of doing justice to those people who have not the same advantages as have employees who belong to a proper pensions scheme. It is far simpler than the Millard Tucker proposals and the proposals embodied in Part III of the Bill. Incidentally, it would avoid many of the problems which arise as a result of the Government's adoption of the main Millard Tucker proposals. For instance, the discrimination which they have been compelled to introduce between 1922 Act schemes and 1947 Act schemes—one of the major anomalies in Part III of the Bill, which may lead to very considerable switching, we have been told—would have been avoided if the very simple proposal of the minority of the Royal Commission and the two dissentients to the Millard Tucker Committee Report had been adopted.
    This ought to please hon. Members opposite who spoke in the debates on Part III: it would provide a tax-free lump sum in a perfectly acceptable form and under proper conditions, which is one of the things for which they argued. Under a superannuation scheme of this kind the lump sum is equal only to the actuarial value to which the person paying the premiums is entitled, and this lump sum is not paid out of a tax-free build-up, which is the principal argument against tax-free lump sums under the 1947 Act schemes.
    In very many cases there is little doubt that the proposal embodied in our new Clause would prove much more attractive to people who want to make provision for their old age and who cannot do so under the present system because they are not in a pension scheme. As one of their main objectives, they want to provide for their widows and children, and they could do so more easily and satisfactorily under a superannuation scheme of this kind, which now receives tax relief up to two-fifths, than by the new proposals in the Finance Bill. This Clause would not only be much simpler but, I am sure, would prove more attractive to a great many people who are more concerned to provide security for their widows and children than to have
    282
    large annuities for themselves during their own lives.
    For that reason we prefer our new Clause to the whole of Part III of the Bill, although that is no longer in question because we have disposed of it. Nevertheless, we still put forward our new Clause very strongly as a desirable alternative which should be offered to people—obviously an exclusive alternative, for one would not be able to opt to enjoy both the benefits given under Part III and those given under the new Clause, as is made clear in the Clause.
    We suggest it as a very serious contribution to a very difficult problem. It would simplify the position and be more just to adopt our Clause as an alternative to the various provisions under Part III of the Bill. I suggest to the right hon. Gentleman that it would certainly, to a great extent ease the administrative problem which will be involved in carrying Part III into operation. To raise the figure from two-fifths to two-thirds would be a very simple operation; it could be worked under the existing machinery and there would be no difficulty at all. It is just a mathematical problem of working out the sum. Insofar as people opted for the alternative provided under the new Clause instead of for the alternatives provided in Part III, it would ease the administrative problem which would arise under the operation of Part III, which must be considerable.
    That is a fact which must appeal to the right hon. Gentleman, who clearly must be concerned about the administrative problems involved in this matter, which might be very considerable indeed if there is a greater switch from 1947 Act schemes than he anticipated when he replied to the previous debate. We put the new Clause forward as a serious and constructive suggestion, and I hope that the right hon. Gentleman will regard it in that light and will give serious consideration to accepting, at any rate, the principle of the new Clause.
    4.0 p.m.
    Mr. Austen Albu: I should like briefly to support the new Clause. It would, perhaps, be right that a number of hon. Members who may speak on this should declare an interest. There must be quite a number of hon. Members who are no longer able to obtain employment

    283
    which will be subject to superannuation or pension schemes and who, therefore, are having to rely on what they can afford to pay in insurance premiums. What applies to us as self-employed persons, as we are described, applies to a fairly large number of people who, for a number of years, have been paying premiums on policies of this sort for such a purpose as is dealt with in this Finance Bill.
    Like my right hon. Friend, I support this new Clause on the ground of simplicity. As the Millard Tucker minority Report pointed out, this is the simplest way, if not of entirely dealing with justice with all those who suffer under the present tax arrangements, at any rate for a very large proportion of them. I should have thought that one of its great advantages is that it would give an option to an extremely large number of people who already pay, or have been for many years paying, insurance premiums of this kind. Under Part III of the Bill they can now make other arrangements, but, obviously, the simplest thing for those who have been taking out insurance policies during the course of their lifetime, and have now reached middle age, would be to continue with what they have been doing.
    I have not gone into the economics of the cost of making the change to Part III, but I should imagine that from both the administrative and the financial point of view this Clause affords the simplest and most economical way of giving the relief which hon. Members on both sides have agreed should be given. As I say, I do not know what it would cost, but, on the whole, this is a small concession. Moreover, the conditions outlined in the new Clause are drawn rather tightly. A beneficiary cannot benefit both under this Clause and under Clause 18, nor would he be entitled to benefit if benefiting under any type of superannuation policy.
    I should imagine, therefore, that the cost to the Chancellor could not be very great. On the other hand, the advantage to a large number of beneficiaries would be very great indeed. I noticed that the right hon. Gentleman the Financial Secretary was nodding in some agreement with my right hon. Friend, so I hope that we shall receive a favourable reply and that the Government will accept the Clause.
    The Financial Secretary to the Treasury (Mr. Henry Brooke): I must say that when I nod it means that I am following what right hon. and hon. Gentlemen opposite say and that it cannot always be taken to mean that I agree with them.
    The moment I saw this new Clause on the Notice Paper I detected, of course, that it was founded on the minority's reservation to the Millard Tucker Report. I must say that if the right hon. Gentleman had been consistent he would have advised his hon. Friends to vote against the proposals in Part III of the Bill to which the Committee has now agreed, because he will appreciate that the minority reservation was in favour of making provision on these lines and not on the other. What has happened here, however, is that the Committee has agreed, without a Division, to making provision, in a modified form, on the lines recommended by the Majority Report of the Millard Tucker Committee.
    The right hon. Gentleman now comes along with a fresh proposal to the effect that, in addition to what that majority has recommended and what this Committee has accepted, those individuals who do not wish to take advantage of Part III of this Bill should have this alternative open to them. So far as I am aware, there was no suggestion of that kind in the minority's original suggestion.
    Mr. Gordon Walker: The right hon. Gentleman's point is a fair one, but he will recognise that for reasons of order we could not then move this as an Amendment, much as we should have liked to have done. It is only a debating point that he is making.
    Mr. Brooke: I think that it is a little more than a debating point. I understood the right hon. Gentleman to be putting this forward as representing the view taken by the minority, and I was making the point that if this is to be the alternative he should have opposed the Government's proposals in Part III. What we have to do is to examine the Clause as it stands. As I have said, its effect would be to enable a self-employed person to choose between taking the relief that would be available under this new Clause and that available under Clause 18.

    285
    The main objection that I can see to the proposal contained in this Clause is that the amount of relief which it would give would in many cases be excessive, particularly when we take into account the fact that the resultant benefit, which would be in lump sum form, would not be taxed. I am not quite sure whether the supporters of this new Clause fully realise that in many cases the life insurance relief of two-thirds of the premiums would be not very much less advantageous than the full expenses relief which will be given to the self-employed under Clause 18.
    That happens in this way, if I may go into technicalities for a moment. Expenses relief means that the amount in question is treated as a deduction from gross income in arriving at assessable income, and earned income relief is given only on the assessable income; but life assurance relief does not reduce the amount on which the earned income relief is given. Perhaps I may put that into figures by means of a hypothetical case. In the case of a man who is liable at the standard rate of tax, and who pays a premium of £100, the reduction in his tax bill will be approximately £33 if he is entitled to expenses relief under Part III. It would be approximately £28 if he was entitled to two-thirds of the life assurance premiums as proposed by the new Clause.
    The general position, therefore, is that the new Clause would give relief which, in a very large number of cases, would not fall very seriously short of the expenses relief, and I must put it to the Committee that it would be difficult to justify in principle so large a measure of relief when the benefit under this Clause, though not under Part III, would be tax free. This anomalous position that would arise is really aggravated by the fact that by this Clause the lump sum which would be payable when the policy matured could then be used to buy a life annuity and, under Clause 22, only the interest element of the annuity would be taxed.
    There is the further point that it would be difficult for people to understand why some could claim two-fifths relief and others two-thirds relief on life assurance premiums. In the general endeavour which the Government are making to put the self-employed people on to broadly the same tax position as those who are in employment and entitled to pension
    286
    rights of some kind or another one does not want to complicate the matter over much, or to set up questions as to the relative fairness of what one is doing.
    The right hon. Gentleman the Member for Smethwick (Mr. Gordon Walker) sought also to make the point that this method would be very considerably simpler than what is envisaged in Part III. There again, I am not quite sure whether he realised that that would only be so provided that Part III was in existence. He is, as it were, resting his argument on something which he thinks the Government ought not to have done. Taking the minority recommendation, which is what he is pressing upon the Committee as the preferable course, many of the complications of Part III would have to be introduced into the law, the definition of the kind of person entitled to claim tax relief, and so forth; so that he can claim that this Clause is relatively simple only if he accepts what the Government are doing in bringing forward Part III as their main proposal.
    The hon. Member for Edmonton (Mr. Albu) suggested that the cost would not be very great. I must warn the Committee that the cost might be considerable. Of course, he can reply that nobody can tell what it will be; it all depends upon the free choice of individuals and neither he nor anybody else can speculate with any confidence on the proportion of people who would take advantage of the Clause. However, the Government, in making their financial estimates on the effect of Part III, assume that substantial numbers of people would, for one reason or another, not wish to take advantage of the Part III provisions even though the law would entitled them to do so.
    It might well be—I imagine that the right hon. Gentleman the Member for Smethwick would hope that it would be so—that a large proportion of those who did not wish to use Part III would, nevertheless, turn over to this new Clause. If they did, the cost might be very considerable. It cannot be estimated, but we have to take account not only of the extra life assurance relief, but the further consideration, as I said before, that where a person took advantage of this new Clause no tax would be chargeable on the benefits payable under the policy to which the new Clause relates, whereas

    287
    the annuities to which Clause 18 relates will be chargeable to tax in full.
    4.15 p.m.
    I would assure the Committee that I have not gone into this with any prejudice against the new Clause. I have not sought simply to shoot it down because it came from the other side of the Committee; but I really do not think that hon. and right hon. Members opposite have thought the thing through as far as I have sought to do. I suspect that some of the points which I have put about the very large amount of relief which their Clause will, in fact, afford may have taken them somewhat by surprise.
    My right hon. Friend the Chancellor has measured in his mind how much relief he can afford to give in his Budget under his proposals for pensions for the self-employed. He does not think that he can go any further than is envisaged in Part III. On all those grounds, I must advise the Committee against accepting this new Clause.
    Mr. Roy Jenkins: Whatever the motives of the right hon. Gentleman in shooting down this Clause, he has certainly returned us an extremely disappointing answer, particularly disappointing after the encouraging nods he gave, to which my hon. Friend the Member for Edmonton (Mr. Albu) referred. It is, of course, interesting to note for the future that we are to take nods only as indicating that the right hon. Gentleman is following our argument. I hope that the converse will not apply, that if for a moment his head is still we are to take it that his mind is full of a blank incomprehension of what we are saying.
    None of the arguments that the right hon. Gentleman advanced were particularly convincing. He told us that the Chancellor had measured very accurately exactly how much relief he could afford in this Finance Bill. But, of course, this measurement which has gone on in the Chancellor's mind is a somewhat flexible measurement, as was indicated when we were considering Clause 18 the other night, when a very substantial extension of the concessions proposed was suddenly announced by the right hon. Gentleman in response to an Amendment moved from his own side of the Committee.
    288
    I thought that the only strong point which the Financial Secretary did advance was his view that it would be very difficult to afford as much relief as this Clause afforded in view of the fact that the benefits obtained from it would be tax free benefits. One is bound to comment, in passing, that the point which he makes here underlines the view which is being increasingly strongly felt on this side of the Committee, that the rigid distinction between income payments and capital payments which is maintained by the Revenue at present is becoming more and more false and undesirable.
    But there may be something in what the right hon. Gentleman says, though it surely could be met by some degree of modified relief, and I am sure that if the right hon. Gentleman were willing to indicate that he would consider that, we would be very willing to put down such a Clause on Report. There was, however, no indication from him that he would consider something which would bring the degree of relief into line with the difference which arises from the fact that this is a capital concession and the other is an income concession and is, therefore, subject to tax.
    In view of the extremely disappointing answer that the right hon. Gentleman has given, basing himself on the rather false suggestion that the Chancellor has measured things out most accurately and is not prepared to make any concession at all—which was falsified by the very substantial concession he made earlier on—and fortified only by very vague references to the cost which might be involved here, without any clear figures of any sort, I find it very difficult for us to accept the Government's reply as being a convincing one, and I hope my right hon. Friend will press his Motion to a Division.
    Mr. Frederick Mulley: I would like to add my plea to the Chancellor and to the Financial Secretary to think again. This particular Clause seems to be in keeping with the Chancellor's oft-repeated theme that he wants to encourage saving. At the same time, the party opposite—and we agree with its objective—wants to do something to help the self-employed and, as I would remind the Financial Secretary, those employees who do not enjoy pensionable occupations.

    289
    Those are objectives towards which the Financial Secretary can go a little further. It may well be that some of the estimates he made of the actual size of the proposed concession, apart from the point made by my hon. Friend the Member for Stechford (Mr. Roy Jenkins) about the division between income and capital taxation, might be too high, though we would agree with the hypothetical figure he gave of, I think it was, £28 relief on £100 premium.
    I would ask the Financial Secretary to look again at this matter and bring forward proposals on the Report stage, in order to give some opportunity and incentive to those who, for a great number of reasons, may not wish to avail themselves of Part III. He says that in trying to form an assessment of the extent to which Part III would be used, the Government had to take very substantial account of people who would be entitled to take advantage of it but would not be able to do so.
    Perhaps I should declare an interest here; I come within the category of persons with a small income who want to make some provision for their families and who are much more concerned with trying to insure against unforeseeable contingencies for the benefit of their widows and children rather than with their own comfort in retirement. It does seem to me that there are very many people of that kind for whom this provision should be made. For that class of person, I think it is only fair that there should be a like encouragement to that which the Government are giving, as has been said, very generously under Clause 18. I ask the Financial Secretary to look at this matter again.
    Mr. G. R. Mitchison: I regarded this new Clause as a good test of what were the Government's real intentions. From time to time, the Committee is livened up by the Chancellor of the Exchequer in person blowing in and playing a little organ tune about savings. That, we were told, was the main object of the Budget. That has inspired every concession that he has made and will inspire any concession that he is likely to make. He said that last night, but we will see how we get on today before we hold him too tightly to it. At any rate, that is what we were told.
    290
    Here, after all, is a proposal which, for good or for ill, has no other intention and effect than to promote savings. We were going to see what line would be taken about it. I quite agree that it was brought forward by the dissenting couple in the Millard Tucker Report as an alternative to some very complicated proposals, and they took it as an alternative that should be adopted, I agree, to the exclusion of those proposals; but the present position is that Part III of the Bill has been accepted, and all of us know that with the Lobby fodder still tolerably tame it will be carried into effect.
    The question that arises under this new Clause is whether an individual should be given this alternative. I cannot see that there is anything very complicated about it. This is a new Clause about life insurance. Part III of the Bill is, primarily at any rate, concerned with something rather different, that is, deferred annuities. I agree that the line is not absolute; but there is a main distinction. The character and limitation of this relief, the percentage, the one-sixth and all the rest of it, have been in the Income Tax code for some considerable time, and all that this Clause does is to extend the relief, broadly speaking, for the same class of person who would benefit, if he so chose, under Part III of the Bill. Of course, it is a different extension, because this relates to life insurance primarily. I agree, again, that the line is not absolute. I shall not misunderstand the right hon. Gentleman if he nods. I shall know that if he is going to agree with me he will just shake his head to explain how thoroughly lucid and consistent are the Government, even in their gestures.
    In these circumstances, what the Government are doing by turning down this new Clause is to deny the people the choice of a rather simple and rather different alternative, one on lines already well-tried, should they prefer that to the rather complicated and really completely untried proposals of Part III of the Bill. Of course, it is just like the Treasury to say that anything that it has thought out is bound to work perfectly and that anything proposed by anyone else, even if it is a tolerably simple extension of something that has been tried out in practice, will be much more difficult and uncertain in its operation.

    291
    I do not accept that. I simply say that if, in fact, the object of the Government is to promote savings, they should accept this Clause. If it were a question of the insurance companies—and they are very much concerned in this—I do not know whether it would be Parliamentary language to say that I would bet my boots that they would prefer this to the very complicated arrangements that are proposed in Part III, but, of course, they have not to make a choice in the matter. It is not for them. It is for the individual. This is a free society. This is Tory freedom. Cannot the individual be allowed just a little choice as to the form in which he proposes to provide for the future—deferred annuity or life insurance—and as to the kind of relief he will get?
    I have a very strong suspicion that a great many people would prefer this form of relief for another reason, that they might find themselves in considerable
    difficulties of the type which we were considering on various Amendments to Clauses 18 and 19, if they were tied merely to the Government's proposals. I say, therefore, that it shows a surprising misunderstanding of what can be done to promote savings, paralleled, it is true, by certain refusals of the Government at an earlier stage to accept some very sensible suggestions about co-operative societies, municipal banks and other matters. It shows a surprising misunderstanding of what can be done, and a surprising wish to force the taxpayer in this matter of his insurance, as well as in the matter of his relief, into a kind of Procrustean bed that is really much too tight, and which, unlike the Procrustean one, has not been tried out by previous victims.
    Question put, That the Clause be read a Second time:—
    The Committee divided: Ayes 211, Noes 268.

    Division No. 236.]

    AYES

    [4.26 p.m

    Ainsley, J. W.

    Edelman, M.

    Johnson, James (Rugby)

    Albu, A. H.

    Edwards, Rt. Hon. John (Brighouse)

    Johnston, Douglas (Paisley)

    Allaun, Frank (Salford, E.)

    Edwards, Rt. Hon. Ness (Caerphilly)

    Jones, Rt. Hon. A. Creech (Wakefield)

    Allen, Arthur (Bosworth)

    Edwards, Robert (Bilston)

    Jones, Jack (Rotherham)

    Allen, Scholefield (Crewe)

    Edwards, W. J. (Stepney)

    Jones, J. Idwal (Wrexham)

    Awbery, S. S.

    Evans, Albert (Islington, S.W.)

    Jones, T. W. (Merioneth)

    Bacon, Miss Alice

    Evans, Edward (Lowestoft)

    Kenyon, C.

    Baird, J.

    Evans, Stanley (Wednesbury)

    Key, Rt. Hon. C. W.

    Balfour, A.

    Fernyhough, E.

    King, Dr. H. M.

    Bellenger, Rt. Hon. F. J.

    Finch, H. J.

    Lee, Miss Jennie (Cannock)

    Benn, Hon. Wedgwood (Bristol, S.E.)

    Forman, J. C.

    Lever, Leslie (Ardwick)

    Benson, G.

    Fraser, Thomas (Hamilton)

    Lewis, Arthur

    Beswick, F.

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

    Lindgren, G. S.

    Blackburn, F.

    Gibson, C. W.

    Lipton, Lt-Col. M.

    Blenkinsop, A.

    Gooch, E. G.

    Logan, D. G.

    Blyton, W. R.

    Gordon Walker, Rt. Hon. P. C.

    Mabon, Dr. J. Dickson

    Boardman, H.

    Greenwood, Anthony

    MacColl, J. E.

    Bottomley, Rt. Hon. A. G.

    Grey, C. F.

    McGhee, H. G.

    Bowden, H. W. (Leicester, S. W.)

    Griffiths, David (Rother Valley)

    McGovern, J.

    Boyd, T. C.

    Griffiths, Rt. Hon. James (Llanelly)

    McInnes, J.

    Braddock, Mrs. Elizabeth

    Griffiths, William (Exchange)

    McKay, John (Wallsend)

    Brockway, A. F.

    Hale, Leslie

    McLeavy, Frank

    Broughton, Dr. A. D. D.

    Hall, Rt. Hn. Glenvil (Colne Valley)

    MacMillan, M. K. (Western Isles)

    Brown, Rt. Hon. George (Belper)

    Hamilton, W. W.

    Mahon, Simon

    Brown, Thomas (Ince)

    Hannan, W.

    Mallalieu, E. L. (Brigg)

    Burke, W. A.

    Hastings, S.

    Mallalieu, J. P. W. (Huddersfd, E.)

    Burton, Miss F. E.

    Hayman, F. H.

    Mann, Mrs. Jean

    Butler, Herbert (Hackney, C.)

    Healey, Denis

    Marquand, Rt. Hon. H. A.

    Butler, Mrs. Joyce (Wood Green)

    Henderson, Rt. Hn. A. (Rwly Regis)

    Mason, Roy

    Callaghan, L. J.

    Herbison, Miss M.

    Mayhew, C. P.

    Clunie, J.

    Hobson, C. R.

    Messer, Sir F.

    Coldrick, W.

    Holman, P.

    Mitchison, G. R.

    Collick, P. H. (Birkenhead)

    Holmes, Horace

    Monslow, W.

    Cove, W. G.

    Howell, Charles (Perry Barr)

    Moody, A. S.

    Craddock, George (Bradford, S.)

    Hoy, J. H.

    Morrison, Rt. Hn. Herbert (Lewis'm, S.)

    Cronin, J. D.

    Hubbard, T. F.

    Mort, D. L.

    Crossman, R. H. S.

    Hughes, Cledwyn (Anglesey)

    Moyle, A.

    Davies, Ernest (Enfield, E.)

    Hughes, Emrys (S. Ayrshire)

    Mulley, F. W.

    Davies, Harold (Leek)

    Hunter, A. E.

    Neal, Harold (Bolsover)

    Deer, G.

    Hynd, H. (Accrington)

    Noel-Baker, Francis (Swindon)

    de Freitas, Geoffrey

    Irving, S. (Dartford)

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

    Delargy, H. J.

    Isaacs, Rt. Hon. G. A.

    Oliver, G. H.

    Dodds, N. N.

    Janner, B.

    Orbach, M.

    Donnelly, D. L.

    Jay, Rt. Hon. D. P. T.

    Oswald, T.

    Dugdale, Rt. Hn. John (W. Brmwch)

    Jeger, George (Goole)

    Owen, W. J.

    Dye, S.

    Jeger, Mrs. Lena (Holbn & St. Pncs, S.)

    Padley, W. E.

    Ede, Rt. Hon. J. C.

    Jenkins, Roy (Stechford)

    Paget, R. T.

    Silverman, Julius (Aston)

    Warbey, W. N.

    Paling, Rt. Hon. W. (Dearne Valley)

    Silverman, Sydney (Nelson)

    Weitzman, D.

    Paling, Will T. (Dewsbury)

    Simmons, C. J. (Brierley Hill)

    Wells, Percy (Faversham)

    Palmer, A. M. F.

    Slater, Mrs. H. (Stoke, N.)

    Wells, William (Walsall, N.)

    Parker, J.

    Slater, J. (Sedgefield)

    West, D. G.

    Parkin, B. T.

    Smith, Ellis, (Stoke, S.)

    Wheeldon, W. E.

    Paton, John

    Snow, J. W.

    White, Mrs. Eirene (E. Flint)

    Pearson, A.

    Sorensen, R. W.

    White, Henry (Derbyshire, N.E.)

    Peart, T. F.

    Sparks, J. A.

    Wigg, George

    Price, J. T. (Westhoughton)

    Steele, T.

    Williams, David (Neath)

    Probert, A. R.

    Stokes, Rt. Hon. R. R. (Ipswich)

    Williams, Rev. Llywelyn (Ab'tillery)

    Proctor, W. T.

    Stones, W. (Consett)

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

    Pryde, D. J.

    Strachey, Rt. Hon. J.

    Williams, W. R. (Openshaw)

    Randall, H. E.

    Strauss, Rt. Hon. George (Vauxhall)

    Williams, W. T. (Barons Court)

    Rankin, John

    Stross, Dr. Barnett (Stoke-on-Trent, C.)

    Willis, Eustace (Edinburgh, E.)

    Redhead, E. C.

    Summerskill, Rt. Hon. E.

    Wilson, Rt. Hon. Harold (Huyton)

    Reeves, J.

    Swingler, S. T.

    Winterbottom, Richard

    Reid, William

    Sylvester, G. O.

    Woodburn, Rt. Hon. A.

    Robens, Rt. Hon. A.

    Taylor, Bernard (Mansfield)

    Woof, R. E.

    Roberts, Albert (Normanton)

    Thomas, George (Cardiff)

    Yates, V. (Ladywood)

    Roberts, Goronwy (Caernarvon)

    Thomas, Iorwerth (Rhondda, W.)

    Zilliacus, K.

    Royle, C.

    Thomson, George (Dundee, E.)

    Shinwell, Rt. Hon. E.

    Thornton, E.

    TELLERS FOR THE AYES:

    Short, E. W.

    Tomney, F.

    Mr. John Taylor and Mr. Rogers.

    Shurmer, P. L. E.

    Usborne, H. C.

    NOES

    Aitken, W. T.

    Crowder, Petre (Ruislip—Northwood)

    Henderson, John (Cathcart)

    Allan, R. A. (Paddington, S.)

    Cunningham, Knox

    Hill, Rt. Hon. Charles (Luton)

    Alport, C. J. M.

    Currie, G. B. H.

    Hill, Mrs. E. (Wythenshawe)

    Amery, Julian (Preston, N.)

    Dance, J. C. G.

    Hirst, Geoffrey

    Amory, Rt. Hn. Heathcoat (Tiverton)

    Davidson, Viscountess

    Holland-Martin, C. J.

    Anstruther-Gray, Major Sir William

    Davies, Rt. Hon. Clement (Montgomery)

    Hope, Lord John

    Arbuthnot, John

    D'Avigdor-Goldsmid, Sir Henry

    Hornby, R. P.

    Armstrong, C. W.

    Digby, Simon Wingfield

    Hornsby-Smith, Miss M. P.

    Ashton, H.

    Dodds-Parker, A. D.

    Horobin, Sir Ian

    Astor, Hon. J. J.

    Donaldson, Cmdr. C. E. McA.

    Howard, Hon. Greville (St. Ives)

    Atkins, H. E.

    Doughty, C. J. A.

    Howard, John (Test)

    Baldwin, A. E.

    du Cann, E. D. L.

    Hudson, Sir Austin (Lewisham, N.)

    Balniel, Lord

    Dugdale, Rt. Hn. Sir T. (Richmond)

    Hudson, W. R. A. (Hull, N.)

    Barber, Anthony

    Duncan, Capt. J. A, L.

    Hughes Hallett, Vice-Admiral J.

    Barlow, Sir John

    Duthie, W. S.

    Hughes-Young, M. H. C.

    Barter, John

    Eccles, Rt. Hon. Sir David

    Hulbert, Sir Norman

    Beamish, Maj. Tufton

    Eden, Rt. Hn. Sir A. (Warwick & L'm'tn)

    Hutchison Sir Ian Clark (E'b'gh, W.)

    Bell, Philip (Bolton, E.)

    Eden, J. B. (Bournemouth, West)

    Hylton-Foster, Sir H. B. H.

    Bell, Ronald (Bucks, S.)

    Emmet, Hon. Mrs. Evelyn

    Irvine, Bryant Godman (Rye)

    Bennett, F. M. (Torquay)

    Errington, Sir Eric

    Jenkins, Robert (Dulwich)

    Bevins, J. R. (Toxteth)

    Erroll, F. J.

    Jennings, J. C. (Burton)

    Bidgood, J. C.

    Farey-Jones, F. W.

    Jennings, Sir Roland (Hallam)

    Biggs-Davison, J. A.

    Fell, A.

    Johnson, Dr. Donald (Carlisle)

    Bishop, F. P.

    Finlay, Graeme

    Johnson, Eric (Blackley)

    Black, C. W.

    Fisher, Nigel

    Jones, Rt. Hon. Aubrey (Hall Green)

    Body, R. F.

    Fleetwood-Hesketh, R. F.

    Joseph, Sir Keith

    Boothby, Sir Robert

    Fletcher-Cooke, C.

    Keegan, D.

    Bossom, Sir A. C.

    Fort, R.

    Kerby, Capt. H. B.

    Bowen, E. R. (Cardigan)

    Fraser, Sir Ian (M'cmbe & Lonsdale)

    Kerr, H. W.

    Boyd-Carpenter, Rt. Hon. J. A.

    Freeth, D. F.

    Kershaw, J. A.

    Boyle, Sir Edward

    Galbraith, Hon. T. G. D.

    Kimball, M.

    Braine, B. R.

    Gammans, Sir David

    Kirk, P. M.

    Braithwaite, Sir Albert (Harrow, W.)

    Garner-Evans, E H.

    Lambert, Hon. G.

    Bromley-Davenport, Lt.-Col. W. H.

    George, J. C. (Pollok)

    Lambton, Viscount

    Brooke, Rt. Hon. Henry

    Gibson-Watt, D.

    Lancaster, Col. C. G.

    Brooman-White, R. C.

    Glover, D.

    Langford-Holt, J. A.

    Browne, J. Nixon (Craigton)

    Godber, J. B.

    Leather, E. H. C.

    Bryan, P.

    Gomme-Duncan, Col. Sir Alan

    Leavey, J. A.

    Buchan-Hepburn, Rt. Hon. P. G. T.

    Graham, Sir Fergus

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

    Bullus, Wing Commander E. E.

    Grant-Ferris, Wg Cdr. R. (Nantwich)

    Legh, Hon. Peter (Petersfield)

    Burden, F. F. A.

    Green, A,

    Lindsay, Hon. James (Devon, N.)

    Butcher, Sir Herbert

    Gresham Cooke, R.

    Lindsay, Martin (Solihull)

    Butler, Rt. Hn. R. A. (Saffron Walden)

    Grimond, J.

    Linstead, Sir H. N.

    Campbell, Sir David

    Grimston, Hon. John (St. Albans)

    Lloyd, Maj. Sir Guy (Renfrew, E.)

    Carr, Robert

    Grimston, Sir Robert (Westbury)

    Lloyd, Rt. Hon. Selwyn (Wirral)

    Cary, Sir Robert

    Grosvenor, Lt.-Col. R. G.

    Longden, Gilbert

    Channon, H.

    Gurden, Harold

    Low, Rt. Hon. A. R. W.

    Chichester-Clark, R.

    Hall, John (Wycombe)

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Cole, Norman

    Harris, Frederic (Croydon, N.W.)

    Lucas-Tooth, Sir Hugh

    Conant, Maj. Sir Roger

    Harrison, A. B. C. (Maldon)

    McAdden, S. J.

    Cooper, Sqn. Ldr. Albert

    Harrison, Col. J. H. (Eye)

    McCallum, Major Sir Duncan

    Cooper-Key, E. M.

    Harvey, Air Cdre. A. V. (Macclesfd)

    Macdonald, Sir Peter

    Cordeaux, Lt.-Col. J. K.

    Harvey, Ian (Harrow, E.)

    McKibbin, A. J.

    Corfield, Capt. F. V.

    Harvey, John (Walthamstow, E.)

    Mackie, J. H. (Galloway)

    Crouch, R. F.

    Heald, Rt. Hon. Sir Lionel

    McLaughlin, Mrs. P.

    Crowder, Sir John (Finchley)

    Heath, Rt. Hon. E. R. G.

    Maclay, Rt. Hon. John

    McLean, Neil (Inverness)

    Page, R. G.

    Spens, Rt. Hn. Sir P. (Kns'gt'n, S.)

    Macleod, Rt. Hn. Iain (Enfield, W.)

    Pannell, N. A. (Kirkdale).

    Stanley, Capt. Hon. Richard

    MacLeod, John (Ross & Cromarty)

    Partridge, E.

    Stevens, Geoffrey

    Macmillan, Rt. Hn. Harold (Bromley)

    Peyton, J. W. W.

    Steward, Harold (Stockport, S.)

    Macpherson, Niail (Dumfries)

    Pilkington, Capt. R. A.

    Studholme, Sir Henry

    Maddan, Martin

    Pitman, I. J.

    Summers, Sir Spencer

    Maitland, Cdr. J. F. W. (Horncastle)

    Pitt, Miss E. M.

    Taylor, Sir Charles (Eastbourne)

    Maitland, Hon. Patrick (Lanark)

    Powell, J. Enoch

    Taylor, William (Bradford, N.)

    Markham, Major Sir Frank

    Price, Henry (Lewisham, W.)

    Thomas, P. J. M. (Conway)

    Marlowe, A. A. H.

    Prior-Palmer, Brig. O. L.

    Thompson, Kenneth (Walton)

    Marshall, Douglas

    Raikes, Sir Victor

    Thompson, Lt.-Cdr. R. (Croydon, S.)

    Mathew, R.

    Ramsden, J. E.

    Thorneycroft, Rt. Hon. P.

    Maude, Angus

    Redmayne, M.

    Thornton-Kemsley, C. N.

    Maudling, Rt. Hon. R.

    Remnant, Hon. P.

    Tilney, John (Wavertree)

    Mawby, R. L.

    Renton, D. L. M.

    Turner, H. F. L.

    Maydon, Lt.-Comdr. S. L. C.

    Ridsdale, J. E.

    Turton, Rt. Hon. R. H.

    Medlicott, Sir Frank

    Rippon, A. G. F.

    Vane, W. M. F.

    Milligan, Rt. Hon. W. R.

    Roberts, Sir Peter (Heeley)

    Vickers, Miss J. H.

    Molson, Rt. Hon. Hugh

    Robertson, Sir David

    Wakefield, Edward (Derbyshire, W.)

    Moore, Sir Thomas

    Robinson, Sir Roland (Blackpool, S.)

    Walker-Smith, D. C.

    Morrison, John (Salisbury)

    Robson-Brown, W.

    Wall, Major Patrick

    Mott-Radclyffe, C. E.

    Rodgers, John (Sevenoaks)

    Ward, Hon. George (Worcester)

    Nabarro, G. D. N.

    Roper, Sir Harold

    Ward, Dame Irene (Tynemouth)

    Nairn, D. L. S.

    Russell, R. S.

    Waterhouse, Capt. Rt. Hon. C.

    Neave, Airey

    Sandys, Rt. Hon. D.

    Watkinson, Rt. Hon. Harold

    Nicholls, Harmar

    Schofield, Lt.-Col. W.

    Webbe, Sir H.

    Nicolson, N. (B'n'm'th, E. & Chr'ch)

    Scott-Miller, Cmdr. R.

    Whitelaw, W. S. I. (Penrith & Border)

    Nield, Basil (Chester)

    Sharples, R. C.

    Williams, Paul (Sunderland, S.)

    Noble, Comdr. A. H. P.

    Simon, J. E. S. (Middlesbrough, W.)

    Williams, R. Dudley (Exeter)

    O'Neill, Hn. Phelim (Co. Antrim, N.)

    Smithers, Peter (Winchester)

    Wilson, Geoffrey (Truro)

    Ormsby-Gore, Hon. W. D.

    Soames, Capt. C.

    Wood, Hon. R.

    Orr, Capt. L. P. S.

    Spearman, Sir Alexander

    Woollam, John Victor

    Orr-Ewing, Charles Ian (Hendon, N.)

    Speir, R. M.

    Osborne, C.

    Spence, H. R. (Aberdeen, W.)

    TELLERS FOR THE NOES:

    Mr. Oakshott and Mr. Wills.

    Question put and agreed to.

    New Clause.—(RETAIL SALES OF SMALL QUANTITIES OF WINES AND SPIRITS.)
    In subsection (6) of section one hundred and forty-nine of the Customs and Excise Act, 1952, (which relates to retailers' licences for the sale of intoxicating liquors), paragraphs (c) and (d) and the proviso thereto shall no longer have effect.—[Licut.-Colonel Lipton.]
    Brought up, and read the First time.
    4.30 p.m.
    Lieut.-Colonel Marcus Lipton: I beg to move, That the Clause be read a Second time.
    Dame Irene Ward: On a point of order, Sir Charles. Is my new Clause, "Age relief in respect of small incomes", not being called?
    The Chairman: It is not selected.
    Dame Irene Ward: Thank you, Sir Charles.
    Lieut.-Colonel Lipton: The object of the new Clause, which is supported by hon. Members on both sides of the Committee—
    Mr. Harold Wilson: On a point of order, Sir Gordon. Were we not to take this new Clause with one or two others to save time?
    The Temporary Chairman (Sir Gordon Touche): Yes. I understand that we are taking, at the same time, the Clause,
    296
    "Reduction of duty on publicans' licences", also in the name of the hon. and gallant Member for Brixton (Lieut.-Colonel Lipton).
    Lieut.-Colonel Lipton: The object of the new Clause is to enable off-licences to sell what are known as miniature bottles of wines and spirits. A miniature bottle, I understand, is any bottle smaller in size than half a whole bottle. The interesting thing about the present crazy situation is that there is no restriction on the minimum quantity of beer that is sold. An off-licence holder can sell beer by the thimbleful if he wishes.
    With wines, however, an off-licence may not sell smaller than a half bottle of imported wine, whereas in the case of British wine no minimum is imposed. For this reason, it is possible for an off-licence holder to sell a quarter bottle of British sherry, but the existing law does not permit him to sell a quarter bottle of South African sherry. In the case of spirits, an off-licence holder can sell a quarter bottle or miniature bottle of spirit only if a whole bottle is sold to the purchaser at the same time. That is one circumstance in which he can sell a miniature bottle of brandy or whisky.
    Under the 1933 Finance Act, an off-licence holder was permitted to sell single half bottles of spirit for the very first time. It is of interest to note that a

    297
    half bottle which now costs 18s. 3d. costs more than the whole bottle in 1933, when the whole bottle cost only 12s. 6d. Indeed, the state of affairs at the present time is chaotic. As I have indicated, one can sell a miniature if a whole bottle is sold at the same time. It is also possible and legal to sell a number of miniatures if the total quantity of those miniatures equals a bottle of the same denomination.
    It is an offence if the off-licence holder sells an assortment of miniatures of liqueurs and includes, in the assortment making up the equivalent of a whole bottle, a miniature bottle of brandy, because brandy comes under a different denomination. It is possible for an off-licence holder to sell four quarter bottles of whisky and a miniature bottle of brandy, but if he sells two quarter bottles of whisky and two quarter bottles of gin and adds a brandy miniature then he is breaking the law, because the qualifying quantity of the whole bottle would include whisky and gin which are of different denominations.
    I shall not take more than a few moments of the time of the Committee, but it is my submission that the time has come to wipe this nonsense off the Statute Book. We are faced with a crazy jumble of bottle anomalies, and it is time that this crazy jumble was wiped out.
    The second of the two new Clauses that we are discussing provides for the position of on-licence holders. The argument which has been advanced in the past is that if we make this concession to the off-licence holder, enabling him to sell miniatures which at present only the on-licence holder can sell, we thereby prejudice the position of the on-licence holder. We have been asked to believe that there is a violent difference of opinion in the drink trade between the on-licence holder and the off-licence holder on the subject of miniatures. That, I believe, is not the case, because the main consideration, after all, is the convenience of the consumer, and it is the convenience of the consumer we have to consider.
    There are people who, rightly or wrongly, because of age or timidity or some other reason, do not wish to go to a public house to buy a miniature bottle of spirit, and they are prevented from doing so in their local off-licence. Another fact we have to recognise is that the advent of television has affected the
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    public houses, because people are drinking more at home. To that extent, too, the off-licence holder renders a useful public service.
    The on-licence holder, it is true, pays a higher duty. We can measure the value of the wine and spirit aspect of the matter when we examine these figures. In respect of a public house which sells beer only the duty the publican has to pay is one-third of the Schedule A valuation of the premises. If he also sells wines and spirits the duty he has to pay is one-half of the Schedule A valuation. The difference of one-sixth of the Schedule A valuation represents the duty payable by the on-licence holder for the right to sell wines and spirits in addition to beer, and I think that is the measure of the financial significance and importance, from the point of view of the on-licence holder, of the right to sell wines and spirits, or beer only.
    4.45 p.m.
    The second of the new Clauses asks for a concession for on-licences. I can best put the case by quoting an actual example. Take, for example, a public house with a Schedule A assessment of £200. The publican pays duty of £100 less, under the present law, under Section 13 of the Finance Act, 1942, a reduction of 5 per cent., so that in this case he pays £95. Under the new Clause the publican would pay £100 less a 25 per cent. reduction, leaving a net amount payable by him of £75.
    There are some 73,000 on-licences in the country. I quite agree that, unlike the concession I have asked the Government to make about the small bottles, which would not cost the Government anything at all, this concession would cost the Government some money. On the best available advice, I understand that the concession I am asking for in the case of on-licence holders might amount to about £600,000, or one-fifth of 1 per cent. of the revenue derived by the Government from the sale of alcoholic drinks.
    It is time, in addition to a concession affecting small miniatures, that a concession should be made to on-licence holders, whose trade is undoubtedly falling. In 1955, 11 million gallons less beer was drunk than 10 years ago. There is more drinking at home. The overheads of public houses have gone up, through

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    rising wages, increased costs of maintenance, and the recent imposition of Purchase Tax on the utensils public houses have to use; and now the higher valuation and rating under the 1953 Act is an additional burden, and it is possible that at some time or another the Government may decide that the Schedule A assessment shall coincide with the rateable value, in which case the duty will go up as well.
    When the present duties on public houses were evolved, there were in this country 90,000 public houses and 7,500 clubs. There are now 73,000 public houses and 23,000 clubs. This represents very formidable competition which, to a large extent, destroys the monopoly value of the on-licence public houses.
    I know that this matter has cropped up from time to time. There are no party politics in it, because Governments of both parties have turned this proposal down on previous occasions. However, I can say that, whatever Government have been in power, I have advocated this same thing, and I hope that on this occasion the Financial Secretary will be able at least to remove this very stupid anomaly in the sale of miniature bottles by off-licence holders, and, if, possible, at the same time do something on the lines I have suggested in the new Clause for on-licence holders.
    Mr. Stephen McAdden: I very much want to support the new Clause and urge the Financial Secretary to give some very serious consideration to it, as I think that the case for it is crystal clear. As the hon. and gallant Member for Brixton (Lieut.-Colonel Lipton) very clearly said, this change has been urged from both sides of the Committee for a very long while. It will not be out of place if I remind the Committee of the many speeches made on this subject by our late colleague, Sir Herbert Williams. It has been consistently urged that something should be done about this matter. I am sorry to say that, so far, we have not met with much success.
    I remember that the right hon. Gentleman the Member for Battersea, North (Mr. Jay) said there were no strong feelings on this subject but that differences existed. There are some strong feelings among the off-licence holders, who have
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    had a raw deal for a very long while. I am delighted to hear the hon. and gallant Gentleman urging what is perhaps an almost revolutionary doctrine in these days—that some consideration should be given to the consumers' interests, and especially the interests of those customers who are anxious to be able to purchase miniature bottles. I hope that the Chancellor will give earnest consideration to that important matter.
    I would also remind the Committee that some of these miniature bottles, especially those containing brandy, are regarded by many people as medicine rather than as drink, and if people wish to purchase them without going into a public house that is something which should not be denied them. I would also remind my right hon. Friend that Lord Crookshank, when he was Leader of the House, said that the case for this proposal was overwhelming. I hope that it is now recognised, even at this late stage, that the case is overwhelming, and that the many representations which have been made by my hon. and right hon. Friends on this issue will not fall upon deaf ears this afternoon.
    Mr. H. Brooke: As has been said, this is a matter which has frequently been discussed before in debates during the Committee stage of previous Finance Bills. I was glad that my hon. Friend the Member for Southend, East (Mr. McAdden) referred to Sir Herbert Williams, because I often think, in connection with this new Clause, of that great fighter and friend of many of us, who moved a similar new Clause in 1951, when it was opposed, on behalf of the then Government, by the right hon. Member for Battersea, North (Mr. Jay). I remember that Sir Herbert Williams pursued the question during the consideration of subsequent Finance Bills, and we had later debates on it.
    This is one of the matters on which it may be embarrassing for quite a number of us on the Front Benches to speak, lest we find that we are contradicting something we said when we sat on the side of the Chamber other than that which we now occupy. May I first address myself to the second new Clause which we are discussing with that which the hon. and gallant Member for Brixton (Lieut.-Colonel Lipton) has moved, and which refers to the reduction in the licence

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    duty? The position is that at present all concerned will enjoy the relief which was introduced in 1942 on account of the diminution, attributable to war circumstances, in supplies of wines and spirits.
    Continually, since 1942, there has been a reduction of 5 per cent. in the basic liability to duty. It was continued by the Finance Act of 1946 until the introduction of the new Schedule A values. Supplies are now surely as normal as most people could wish them to be, and it is certainly difficult to maintain that a 5 per cent, reduction in the basic duty should be continued on the grounds that, so far as supplies are concerned, we are still in the same restricted conditions as we were in war time.
    I must advise the Committee that there seems to be no justification for the further reduction which the second new Clause will bring about. The hon. and gallant Gentleman said that it would cost £600,000 a year. My calculation is that the Clause, if it were enacted, would cost £700,000 a year. This is a year in which the Chancellor of the Exchequer has made perfectly clear that he is not proposing any tax reductions, except in so far as they are connected with savings. It would be entirely out of line with the Budget if he were to advise the Committee to accept a reduction in this licence duty—a reduction which would accrue, of course, in small amounts, to very large numbers of on-licence holders.
    To revert to the first new Clause, the position has been—and successive Governments have stated it—that there exists this long-standing restriction on the sale of quarter bottles and miniatures by off-licence holders. I think it was my right hon. Friend the present Minister of Supply, who was then Economic Secretary to the Treasury, who, when this matter was last debated—I fancy some three or four years ago—made the offer that if an agreement between the on-licence and off-licence holders could be arrived at which would not involve a loss of revenue, the Government might be prepared to accept any changes in the law which would be consequent on it. Three or four years have passed, and I am bound to tell the Committee that we do not seem to be any nearer to that agreement.
    Let us examine for a moment the effect of the restrictions. I thought that the hon. and gallant Gentleman put very
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    fairly the complexity which is involved in it. I want to admit quite frankly that many people who go into an off-licence and want to buy a miniature, or indeed want to buy assorted bottles in the collection which the hon. and gallant Gentleman indicated, and who are told that they are not allowed to do that, get the impression either that the law is an ass, or, possibly, that the man behind the counter is trying to impose a condition of sale himself, and seeking to compel them to buy more than they really want to buy. Indeed, I do not defend this restriction on grounds of comprehensibility or convenience in the least. I think that the restrictions, long-standing though they are, are both inconvenient and incomprehensible to the general public.
    I realise also that the law has been supported from time to time by temperance interests, which feel that if any relaxation were to be made, it would be rendered easier to get drink, because people could pop into an off-licence and buy a miniature and so forth. Frankly, I do not put much weight on the temperance argument, because it strikes me that the person who wants something to drink, and finds that he cannot get a miniature, is likely to buy a half-bottle instead, or, alternatively, to go into a public house. I should have thought that temperance people would not wish to drive people into public houses. In that respect, the objection of which I have heard and of which I think hon. Members will have heard, is that elderly people, who like to have a little brandy in the house, would not want to go to a public house which they do not normally frequent, and yet they find that they cannot satisfy their needs elsewhere.
    We also have to examine the position as between England and Scotland. In Scotland, this restriction does not exist, and here I am helping the hon. and gallant Gentleman in the case which he put forward. So far as I am aware, it is not argued by those who think that the law should remain unchanged that there are social evils in Scotland that arise from the absence of this restriction. It may be that the Scots can hold their liquor better, or there may be some other reason. It is certainly difficult for a Government spokesman defending the present condition of the law to argue that grave evil arises in Scotland from the absence of any such restriction.

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    5.0 p.m.
    What is the right thing for us to do about this matter? The on-licence holders are very strongly opposed to any change in the situation, unless the Government are at the same time prepared to make this substantial reduction in the licence duty which they pay, and I have already explained that the Government could not contemplate that kind of reduction in the amount. Indeed, I have given reasons for thinking that the present 5 per cent. reduction is no longer justified by the conditions which originally brought it into existence. I have seen representations from the National Consultative Council of the Retail Trade re-emphasising very strong and sincere objection to the law being relaxed for the off-licence holders unless there is a reduction in the licence duty of the on-licence holders, which I have said we should not accept.
    Nobody is a more sincere upholder of personal freedom than my right hon. Friend the Chancellor of the Exchequer and nobody is more anxious than he to remove all grounds for alleging the absurdities of bureaucracy. If one wished to point to an absurdity of bureaucracy, one could find substantial material here because, as I have said, the results of the law are complex and incomprehensible.
    I regret to say that there appears to be no chance whatever of a wholly agreed solution to this problem. At the same time, so far as we can ascertain, the amount of trade that would be liable to be switched if the first of the new Clauses were to be accepted is not so great as to make any real, substantial difference to anybody concerned. In the circumstances, unless the Committee feels strongly in the other direction, and I have sensed that it does not, I suggest that we should debate this matter for the last time by accepting the new Clause.
    Mr. Mitchison: I am rather sorry from one point of view that the right hon. Gentleman has removed this matter which has always been a safe game for any Opposition, whether of hon. Members opposite or of my hon. Friends on this side of the Committee. Whenever hon. Members found themselves in opposition they ridiculed the complete absurdities of the position which my
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    hon. and gallant Friend the Member for Brixton (Lieut.-Colonel Lipton) has explained. It has long been indefensible. The reason why the anomaly has not been removed before may have been the obstinacy of Governments or the obstinacy of the brewers, and I was very glad to hear the right hon. Gentleman say a very, very gentle "Boo" to the brewers, almost the first one that I have ever heard from that side of the Committee.
    It is true that the right hon. Gentleman explained that it will not really make much difference. I do not think that it will, but I do not think that my hon. and gallant Friend the Member for Brixton would have found the same measure of support from this side of the Committee for his second Clause as undoubtedly he has found for the first Clause. I am not quite certain what the relation of this Clause is to savings. I can only conclude that, as between possible views of the effect of the Clause, the right hon. Gentleman has come to the conclusion that there is a saving here, because otherwise the Government would have bought the half-bottle.
    Mr. H. Brooke: There is a saving in shoe leather by not having to walk to the public house.
    Mr. Albert Evans: I agree with my hon. and learned Friend the Member for Kettering (Mr. Mitchison) that the Financial Secretary deserves thanks for the faint "Boo" that he has uttered to the brewers. Although the thanks come from this side of the Committee, they are none the less genuine. This situation has been dragging on for far too long. This has been an anomaly and a restriction which has fallen rather heavily on aged and sick people, and I am glad that some Government, at any rate, have plucked up enough courage to make a decision.
    Clause read a Second time and added to the Bill.
    Mr. Gerald Nabarro: All very stimulating.

    New Clause.—(FRIENDLY SOCIETIES.)
    (1) Notwithstanding the provisions of the proviso to subsection (1) of section eight of the Friendly Societies Act, 1896, and of subsection (1) of section forty-one of the same Act as amended by subsections (1) and (2) of

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    section five of the Industrial Assurance and Friendly Societies Act, 1948 (which limit the amount of an annuity to be granted and paid by a registered friendly society to one hundred and four pounds per annum), a registered friendly society may contract with any person for the assurance of an annuity of any amount subject to the provisions of subsections (2) and (3) of section eighteen of this Act.
    (2) Subsection (1) of section four hundred and forty of the Income Tax Act, 1952, shall be amended by the addition of the following words "notwithstanding that the amount of the annuity exceeds one hundred and four pounds a year".—[Mr. McAdden.]
    Brought up, and read the First time.
    Mr. McAdden: I beg to move, That the Clause be read a Second time.
    I feel much more confident in moving the Second Reading of this new Clause than might otherwise have been the case, because in it I am not asking for any financial concession from the Chancellor. All I seek to do is to try to bring about a system of justice as between the friendly societies and the insurance companies, following upon the Chancellor's Budget proposals with regard to annuities and matters of that description.
    I do not need to detain the Committee to explain what friendly societies are, except to say that they are associations of persons who by their voluntary contributions provide for insurance against death, old age, sickness, and unemployment. The activities of the friendly societies are divided into two groups—the collecting societies and the friendly orders or lodges. The former are the people who go from door to door collecting subscriptions, whereas in the latter case subscriptions are paid at the meeting places of the lodges.
    These societies, which originated in the early 19th century, have enjoyed the support of successive Governments who have recognised the tremendous amount of work they do in encouraging thrift among the people. In return for their registration and acceptance of a code of conduct, they enjoy certain privileges regarding Income Tax and, in return, the whole of the investments of the friendly societies, with the exceptions of property and buildings, have to be invested in trustee securities in the gilt-edged market.
    The chief privilege which they have enjoyed is exemption from Income Tax under Schedules A, C and D, but one of the restrictions under which they have to operate is that on endowments they are
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    limited to a figure of £500, and on annuities they are limited to £104 per annum. Further, one is not able to take out an annuity or an endowment in more than one friendly society, and the figures I have quoted are total amounts for all friendly societies.
    My right hon. Friend the Chancellor of the Exchequer has told us repeatedly during the Committee stage of this Bill, as he did during his Budget speech, that it is his object to encourage self-employed and non-pensionable persons to make provision for themselves in later life. It is proposed in this Bill that there should be relief on premiums, and that relief should be given to insurance companies from Income Tax on that part of their investment income deriving from this class of business.
    On the other hand, there is no restriction on insurance companies either on the benefits which they are able to pay or the way in which they can dispose of their investments. They are, therefore, able to get a higher yield from their investments than is available to the friendly societies and, as I have said, they are not restricted as to the benefits which they can pay.
    In view of the fact that, by the Chanceller's proposals, insurance companies are being given the same concession on Income Tax upon their investments as is at present accorded to the friendly societies, it seems to me to be eminently reasonable that the friendly societies should be placed upon all fours with them as regards the acquisition of new business in the light of the proposals of the Chancellor.
    It can further be argued that the present restriction of annuities to £104 per annum is totally inadequate for people who are not able to get pensions from any other source. I am sure the Committee will agree that an annuity of £104 per annum is grossly inadequate, and that the friendly societies should not continue to be tied to this figure.
    I am sure that it is the object of my right hon. Friend to do what he can to help people with modest means, and people who are members of friendly societies are in the main people of modest means. Millions of homes are visited every week by the collectors of the friendly societies. The size of their business and the encouragement which they give to saving can be gauged from the

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    fact that the funds which they hold increased in 1954 by £14 million to a total of £232 million, and that one-half of their funds are invested in Government and municipal securities.
    I hope that my right hon. Friend will agree with me that this is a reasonable proposal. It is drawing attention to the fact that insurance companies are now being given certain privileges which they did not have before, and are being given the opportunity of new business which was not available to them previously. In these changed circumstances, seeing that they have been placed upon all fours, from an Income Tax point of view, on this part of their business with the friendly societies, it is only fair that the latter should be able to compete in this market for the considerable new business which we hope will eventuate from the proposals of the Chancellor.
    One further point. The matter is of some urgency. It will be useless if it is delayed, so that the insurance companies are able to scoop the pool before the friendly societies come into the market. I hope, therefore, that my right hon. Friend will look with sympathy at the proposed Clause. If, for some reason or another, the wording is unacceptable, I hope that he will be able to say that he will look at this matter carefully to ensure that, when the full benefit of his proposal is available to the public, people will be able to purchase these annuities, or these endowments, not only through insurance companies but through the friendly societies competing upon equal terms.
    5.15 p.m.
    Mr. H. Brooke: I think the Committee may well feel that my hon. Friend the Member for Southend, East (Mr. McAdden) has drawn attention to a good point. The position is that the £104 limit was imposed originally on friendly societies to prevent them, since they are exempted from tax on their income, from having an unfair advantage over the life assurance companies which hitherto have been taxable on the whole of their investment income, if the friendly societies were to go into the realm of larger annuities. As my hon. Friend has pointed out, Clause 20 proposes to exempt assurance companies from tax on so much of their
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    income as relates to the annuities of self-employed persons. That, of course, alters the balance, and it removes the ground for the old limits on friendly society annuities as far as the self-employed are concerned.
    I must tell my hon. Friend that his proposed Clause is not altogether right in its wording. I shall be grateful, therefore, if he will be willing to withdraw it. If he does so, I can undertake that the Government will go into the matter thoroughly before the Report stage, with a view to seeing whether we can put down a new Clause on Report which will meet his point.
    Dr. Horace King: It is a pleasure to be prevented from making an appeal to the right hon. Gentleman by the Financial Secretary himself rising and stating the case much better than any back bencher in this Committee could do. I am delighted to hear the suggestion of the Financial Secretary. As he pointed out, this is merely a question of giving the old annuity, restricted as it was under law, something like its equivalent value. I am sure that the hon. Member for Southend, East (Mr. McAdden) will be as delighted as I am with the reply which has been given.
    Mr. Mitchison: For myself I am bound to say that I would accept this suggestion with more enthusiasm if there had not been such a chilly attitude on the Government benches towards other forms of saving which, though of course they are quite different in form, seem to me to be in substance not unconnected with the kind of work which the friendly societies are doing. Indeed, the chilly attitude towards municipal banks, co-operative deposits and similar matters contrasts a little unfortunately with what has been said in respect of this proposed Clause. None the less, one cannot but see the force of it. There appears to be a very good reason for it and, so far as it goes, we on this side of the Committee would agree with it, but there is one question I want to ask the right hon. Gentleman.
    The major point here is that, subject to this limitation of £104 a year for an annuity, there is exemption from Income Tax for certain friendly societies. That is contained in Section 440 (1) of the Income Tax Act, 1952. Subsection (2) provides in almost exactly the same

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    language similar exemption, similarly limited, for a registered trade union. At first sight I am a little puzzled as to why the proposed Clause refers only to the friendly society when a registered trade union, itself doing similar business, is not included within its terms. I should like to have, if I may, the assurance of the right hon. Gentleman that the benefit which is to be conferred on friendly societies is also to be conferred on the trade unions mentioned in Section 440 (2) of the 1952 Act. It is exactly the same except that, in the nature of the case, Schedule A does not apply to them and does apply to the friendly societies. Otherwise there is the same type of business, the same form of limitation. I hope that before this matter is disposed of the right hon. Gentleman will give me an answer for the Government.
    Mr. H. Brooke: I was addressing myself to the Clause on the Amendment Paper. I said that if it were withdrawn a new Government Clause would be put down on the Report stage and that, of course, will be open to debate. It will be possible then for the hon. and learned Gentleman, if he wishes, to oppose it or to support it or to move any Amendment that he wishes. But I should be getting out of order if on this Clause, which concerns one narrow point, I ranged widely over the questions which he has raised. As I have said, they would be brought into order if he wished to move an Amendment to any subsequent Clause which could be put down.
    Mr. Mitchison: Of course, Sir Gordon, I am in your hands on questions of order, as is the right hon. Gentleman. However, this proposed Clause has been brought forward to deal with a special exemption from Income Tax given in one Section of the Income Tax Act described by one title "Exemption for certain friendly societies and trade unions". I do not want to be nasty about it, but when the Tory Party proposes that this exemption should be extended for friendly societies but not for trade unions doing similar business, we wonder where we are getting.
    I ask the right hon. Gentleman again, and I do not think he would be out of order in answering, whether he intends to confine the benefit he now proposes to the friendly societies mentioned in Subsection (1), or to extend it to the trade unions
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    mentioned in Subsection (2) of Section 440 of the Income Tax Act, 1952. The right hon. Gentleman need only say "Yes" or "No", and does not apparently propose to say even that.
    Mr. Ellis Smith: Before the Motion is withdrawn, I should like to ask for your guidance, Sir Gordon. Surely it would be in order for my hon. and learned Friend the Member for Kettering (Mr. Mitchison) to ask the Financial Secretary to give an undertaking before the Clause is withdrawn that, where a trade union is carrying out friendly society work, it will be treated on the same basis as a friendly society?
    Mr. Mitchison: Further to the point of order. Would it be in order for the right hon. Gentleman to answer the question which I put to him if he chose to do so?
    The Temporary Chairman: Nothing which has so far been said has been out of order.
    Mr. Mitchison: Then perhaps I may assume, since the question was not out of order, that the answer to it would not be out of order either, and that it is merely natural or political obduracy that prevents the right hon. Gentleman from answering our reasonable request.
    Mr. H. Brooke: No, Sir Gordon, there is no obduracy at all. It is political caution. The hon. and learned Gentleman has raised a question which is not contained in the Clause before the Committee. He should know well enough that one does not stand at the Dispatch Box and make a pronouncement which one has not had time to examine thoroughly. We shall, of course, examine his point before placing a Clause on the Order Paper.
    Mr. Mitchison: I am very glad to hear that from the right hon. Gentleman. I must say that I should have attributed a little more foresight and forethought to him and his advisers and would have thought that they would have looked at the Section of the Income Tax Act, 1952. Presumably even the Treasury does not know it all off by heart. To discover that the Section related to exemption for certain friendly societies and trade unions, and that here was a Tory Amendment dealing with friendly societies only, and to suppose that the

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    Opposition would not mention trade unions, argues a form of political blindness which I should not have attributed to the right hon. Gentleman unless he had admitted it.
    Mr. McAdden: I beg to ask leave to withdraw the Motion.
    Motion and Clause, by leave, withdrawn.

    New Clause.—(EXEMPTION OF EISTEDDFOD FROM ENTERTAINMENTS DUTY.)
    On and after the sixth day of August, nineteen hundred and fifty-six, entertainments duty shall not be chargeable in respect of an eisteddfod.—[Mrs. White.]
    Brought up, and read the First time.
    Mrs. Eirene White: I beg to move, That the Clause be read a Second time.
    I trust that the right hon. Gentleman, who seems to be in a fairly co-operative mood, will accept the Clause. I am sure that he will be inclined to do so, because it will positively save money. It asks for no concession. To the best of my belief, the Treasury obtains no Entertainments Duty from eisteddfodau, but the organisers of the events have to go through the process of applying for exemption. It would surely be reasonable that they should be altogether exempted so that neither they nor the civil servants concerned should have to be concerned with the process.
    An eisteddfod is a cultural meeting. It is not a commercial institution. I have never known one that set out to make a profit. My hon. Friend the Member for Caernarvon (Mr. G. Roberts), who is a littérateur in the Welsh language, will know more about it than I do, but the essence of an eisteddfod is that it is a musical and literary gathering. The Welsh are unique in that their heroes are poets. The winner of the chair or crown at an eisteddfod is a poet who is able to write according to some exceedingly strict rules, some of them inherited from the bards of old.
    There is a competitive element about it, but it is not in any sense commercial. The prizes are usually very small. Even at the national eisteddfod, the choir which wins the chief choral or male voice competition is usually not able to meet
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    its expenses, and the choirs which fail, though they have an enjoyable time, are considerably out of pocket.
    I see no reason at all why this process should have to be gone through every time a national or local eisteddfod is organised, and I trust that the right hon. Gentleman will agree that it is not necessary for Entertainments Duty to be, even in theory, chargeable in respect of this class of cultural meetings.
    Mr. Goronwy Roberts: I support my hon. Friend the Member for Flint, East (Mrs. White) in the reasonable request that she has put forward. No eisteddfod is conducted for profit in the ordinary sense. Indeed, the object is purely cultural and educational. That can be seen by the fact that practically every school in Wales now conducts its annual eisteddfod as a kind of culminating point for the work of the year. The practice is spreading and is increasingly giving eisteddfodau the character of educational institutions.
    What my hon. Friend has said about the bother of filling up forms and automatically being granted exemption from duty is true. I have no doubt that if the facts of cultural life were recognised by bringing the law into line with them, some amount of financial and administrative saving would accrue to the Civil Service.
    It would also help in the sense that nowadays it is not easy to attract suitable talent to serve as honorary secretaries of eisteddfodau to make the necessary complicated and difficult arrangements. A number of people approached to act as secretaries of eisteddfodau have been hesitant and have finally declined to do so on the ground that so much has to be done in order to persuade the authorities that eisteddfodau are not profit-making concerns. This small change would bring the law into line with the facts of the position, and would be of assistance wherever eisteddfodau are organised in Wales.
    Mr. H. Brooke: As an Englishman, I feel somewhat at a disadvantage in debating so essentially a Welsh question as this. I did the best I could for myself and married a Welsh woman. Therefore, I am not entirely uninstructed in Welsh matters or ill-informed about Welsh feelings.

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    5.30 p.m.
    I was interested to see the grounds on which the new Clause could be moved, because I could not see that any money was involved either way. If it had been argued that eisteddfods—I apologise for using the English form of the plural, but I may get the pronunciation wrong if I use the Welsh form—were being killed by Entertainments Duty, I should have challenged the hon. Lady the Member for Flint, East (Mrs. White) to produce a case where duty had been paid. I have had the records searched, and so far as we have been able to discover, there has never been an eisteddfod, at any rate for many years, that has had to pay any Entertainments Duty.
    An eisteddfod ordinarily qualifies for exemption under Section 8 of the Finance Act, 1946, on the ground that the promoting body is not conducted or established for profit and that it has partly educational aims, objects and activities. Therefore, the new Clause would make absolutely no difference to the revenue. It would make no difference to the tax payable from the point of view of the promoters of the eisteddfod and equally would make no difference to the revenue; but I do not think that the hon. Lady is correct in suggesting that it is particularly onerous to establish a claim for exemption from duty.
    Certainly the Customs and Excise authorities do not find it a considerable addition to existing duties. It is not as though the number of eisteddfods held in Wales or by Welsh people outside Wales runs into hundreds of thousands a year. It is really a very simple part of the duties of the Customs and Excise Department. The hon. Lady and the hon. Member for Caernarvon (Mr. G. Roberts) will no doubt wish to urge me nevertheless to accept the Clause.
    I considered very carefully whether to advise the Committee to do that. If I cannot go so far, I hope that hon. Members will not think that I am in any way hostile to this particular form of entertainment and enjoyment, which is one of the most genuine which can be imagined. However, there are other things which I have to bear in mind. If a statutory exemption were given to every eisteddfod, it would be soon forgotten that it had been granted on grounds of ease of administration and would quickly be
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    quoted by other people and other peoples who have their own form of national entertainment as evidence that exemption from Entertainments Duty should be extended to them.
    Mr. George Jeger: Does the right hon. Member mean cricket?
    Mr. Brooke: I was coming to cricket. I was thinking at the moment of Highland games. The hon. Member for Goole (Mr. G. Jeger) will grant me this; after my experience in listening to the debate and speaking at this Box about new Clauses relating to Entertainments Duty, I do not want to add to the troubles of myself, my colleagues and successors about this subject.
    Moreover, one has to take into account that the one possible practical effect on the revenue might be that people who were promoting something which was not really an eisteddfod would seek to miscall it an eisteddfod to try to convince the Customs that something which ought to be taxed, because it was not an eisteddfod, should be exempt from tax, because it was an eisteddfod. That sort of consideration certainly would not appeal to the Welsh, who have no desire that any infringement of the spirit of the law should be introduced into the conduct of eisteddfods, but it would certainly add yet another possible complication which would be undesirable to all concerned.
    The hon. Member for Goole mentioned cricket. I must say that the cricket exemption is a warning to Governments not to make exemptions from Entertainments Duty. I am certain that when, on the advice of my right hon. Friend the present Lord Privy Seal, Parliament accepted the cricket exemption two or three years ago, it was not fully recognised at that time how constantly the cricket exemption would be prayed in aid by those who desired to prove that because cricket was exempted, therefore their particular sport had an equal claim to exemption.
    I am sure that hon. Members on both sides of the Committee, with no unfriendliness whatever towards Wales and the Welsh, will quickly appreciate that if we were to grant an exemption for an eisteddfod just because it was an eisteddfod and without relation to the other principles of Entertainments Duty,

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    it would be argued that we could make a special statutory exemption for many other kinds of entertainment, regardless of the logic of the matter. I appreciate the force of the hon. Lady's point, and I do not want to give anybody extra trouble. I think that I have shown by my attitude earlier this afternoon that I have no love for perpetuating the duties of bureaucracy.
    On the other hand, taking all this into account, I think that we should confuse rather than simplify the law if we were to make a special exemption for something because it was an eisteddfod. We cannot possibly be harming any eisteddfod by leaving the law as it is since, as I have said, no eisteddfod ever fails to establish a claim to exemption. In those circumstances I advise that on balance it would be better to leave the law unchanged and continue to expect every eisteddfod which is genuine to get exemption from duty under the existing provisions of the law.
    Sir Lynn Ungoed-Thomas: We have had a long reply from the Financial Secretary. The matter is very short. The only point involved is whether or not eisteddfodau are to be exempt from tax after application to the Treasury, or by statutory provision. That is all that is involved. There is no question of what constitutes an eisteddfod. If it is provided that eisteddfodau are exempt, only true eisteddfodau are exempt, and the suggestion that there then arises the question whether a particular gathering is an eisteddfod does not arise.
    That argument can be applied to every single exemption. Is French cricket cricket, and what is not cricket? All kinds of questions can be raised by ingenious people who might want to get exemptions. There is no question about the exemption of eisteddfodau. It was part of the Financial Secretary's reply, which he had prepared in advance to a case which had not been made, but which he nevertheless repeated to the Committee, that eisteddfodau are exempt. I ask the Financial Secretary to concentrate upon the point that the only question is whether that exemption shall be in the Bill, or whether it shall be obtained by application made to the gentlemen in Whitehall.
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    If that is the only issue, as clearly it is, it should be provided in the Statute. It would ensure that there was much less trouble for those running the eisteddfodau and for the civil servants. When the Financial Secretary talks about there being no trouble involved in this matter he is putting forward a ridiculous argument, because the number of these gatherings runs into hundreds and thousands in a year. On each occasion there must be correspondence with Whitehall, and Whitehall has to reply. It is a fantastic reply, coming from a Government who pride themselves upon cutting out bureaucracy and limiting Government expenditure.
    Will not the Financial Secretary consider the matter again? It is really absurd to tell the Committee that it is better to retain the bureaucrats to examine these applications upon every single occasion when the whole matter can be covered by a very simple, two-line proposal, as contained in my hon. Friend's proposed new Clause. I hope that the Financial Secretary will look into the matter again and accept the Clause, both for the convenience of those who conduct these eisteddfodau and the saving of trouble and expense on the part of Whitehall.
    Mr. Roderic Bowen: I also want to express my disappointment with the Financial Secretary's reply. I should have thought that a Conservative Financial Secretary would have welcomed an intervention on the part of Socialist Members to abolish one type of form-filling activity. The Minister has conceded that there is really no virtue in continuing this procedure, other than the very doubtful one of filling in forms and having upon the record precisely what is happening in regard to this form of entertainment.
    It is conceded that every eisteddfod held in the last financial year gained this exemption, and it is not suggested for one moment that any eisteddfod to be held in the future will not qualify for exemption. The sole question, therefore, concerns our attitude to unnecessary form-filling. I should have thought that the Financial Secretary would welcome this opportunity of doing away with one quite unnecessary sort of form filling. I do not want to exaggerate the amount of work it causes, but in practice what happens is that the secretary of every village eisteddfod has

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    to go through these formalities, knowing full well that the necessary exemption will eventually be granted. I should have thought that this very simple and straightforward proposal would have avoided much form-filling on the part of individuals, and quite a lot of unnecessary administrative work in the appropriate Government Department.
    Mr. E. C. Redhead: As one of the rather unsympathetically styled bureaucrats who was once in the habit of dealing with this type of exemption, among others, I can assure the right hon. Gentleman that the application upon every individual occasion for an exemption from Entertainments Duty in respect of eisteddfodau is a quite cumbersome and fantastic procedure, which is completely unnecessary. It was my painful job at one time to stack up these applications for exemption literally by the dozen, and it is absurd to suggest that even though, by comparison with other administrative acts in connection with Entertainments Duty, the total amount of work involved is not large, it is not a futile process to require promoters of this sort of entertainment to apply for exemption upon every occasion.
    The Customs and Excise circular upon this subject requires the promoters to satisfy the Commissioners that the entertainment:
    "is provided by a society, an institution or committee which is not conducted or established for profit and that the aims, objects and activities of the society, institution or committee are partly educational."
    The promoters have to do this:
    "by letter addressed to the Secretary giving the date and place of the entertainment with details of each programme for which exemption is sought, and of the society's financial arrangements with the owner of the premises and with the performers."
    Any society of the kind making an application for the first time almost inevitably finds itself confronted with the necessity of further correspondence, the submission of financial statements, and the examination of various points, when everyone in the Department knows that in the end there will be an inevitable right to exemption.
    5.45 p.m.
    The Financial Secretary has suggested that if this exemption—which will cost nothing in terms of revenue—is conceded
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    there will be a risk of someone promoting an entertainment which will pretend to be an eisteddfod when it is nothing of the kind. I find it rather difficult to imagine what sort of entertainment the right hon. Gentleman is apprehensive of as being likely to masquerade as an eisteddfod. If there is any serious risk of that kind it can be comfortably left to the vigilance of the Customs and Excise officers, who have to investigate other attempts at evasion of Entertainments Duty, and who do so pretty effectively. From the point of view of cutting out even a little of the administrative process which has to be gone through in administering this duty, I plead with the right hon. Gentleman to think again about the proposition which is now before the Committee.
    Mr. H. Wilson: Although this is a relatively narrow point, I have never seen the Financial Secretary so completely annihilated by argument as he has been in the last fifteen minutes. He has heard the arguments put forward by my hon. Friends whose constituents are responsible for running these functions; he has heard a most eloquent case put forward by my hon. and learned Friend the Member for Leicester, North-East (Sir L. Ungoed-Thomas), and now he has heard the practical argument put forward by my hon. Friend the Member for Walthamstow, West (Mr. Redhead) who used to be responsible for these bureaucratic functions which the Financial Secretary seems so anxious to perpetuate.
    After all this the Financial Secretary will surely tell us that he accepts the logic of these arguments. He may tell us that the proposed new Clause is not drafted in the proper fashion. We shall be quite prepared to accept that. But of all the arguments I have ever listened to on a Finance Bill—and that is saying something—this one, from the Financial Secretary, that unless a separate application were necessary in every case people might conduct a kind of "phoney" eisteddfod for the purpose of evading Entertainments Duty, takes every possible biscuit.
    How would this function? It ought to be clear to the Committee what is the right way to approach this matter. We agree that there is no loss of revenue. In fact, there is a saving, because, as my hon. Friend has made very clear, these applications involve a considerable amount of work, which must cost money.

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    Here is a Government, elected upon a pledge to reduce Government expenditure by cutting out unnecessary administration—I should be out of order in talking about the very serious statement made by the Chancellor this afternoon—refusing, this simple opportunity to reduce bureaucratic expenditure.
    Perhaps my hon. Friend can tell me what it amounts to. It may be only a few hundred or thousand pounds a year, but time and time again the Financial Secretary, at Question Time, in his most sanctimonious manner, has said that no economy is too small to be worth making. I do not know whether my hon. Friend can tell us what the saving might be, but whatever it is it is worth pursuing. I would remind the right hon. Gentleman of the dictum of William Ewart Gladstone, who was quoted in aid by the Chancellor in the Budget debate until we discovered who was the real inspirer of his Budget. It was William Ewart Gladstone, a former Chancellor, who once said:
    "It should be the duty of the Chancellor to pursue every possible saving, including candle ends."
    And here is the right hon. Gentleman telling us that he rejects this idea. He would rather have this wasteful expenditure than run the possible risk, however remote, that some Welshman, or some wolf in Welshman's clothing, might come along and run some entirely "phoney" performance—say a bull fight or a bear-baiting ceremony, or whatever it might be—and put up a notice saying that it was an eisteddfod and therefore exempt from Entertainments Duty.
    As my hon. Friend said, the Customs and Excise officers are vigilant in spotting and pursuing malefactors of that kind, but in any case, has the Financial Secretary so little confidence in his advisers that he does not think it possible to devise a short and simple Clause in which the eisteddfod could be defined for this purpose? In this very Bill the Financial Secretary and the Chancellor spend three pages defining the circumstances in which a shooting brake can be exempt from Purchase Tax and the procedure which follows if anybody dares to put a window into the vehicle. From the argument which he has used this afternoon, why should not the Financial Secretary say that in future no shooting brake shall
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    ever be exempt from Purchase Tax, but that every owner shall send in a form of application to the Customs and Excise in respect of every shooting brake? That is an exact parallel to the sort of argument which the right hon. Gentleman has just put forward.
    I appeal to the right hon. Gentleman to realise that, for once, he is in a completely indefensible position. We often think that he is in such a position, but even he must admit that this afternoon. I ask him to admit the total defeat of his argument and to say that he accepts the principle underlying this Clause and will consider drafting something for the Report stage. If the right hon. Gentleman says that it would take too long for his legal advisers to draft something for the Report stage—even if he says that we shall have to wait for the autumn Budget—however long it may be, I should be prepared to advise my hon. Friends to accept that as an earnest of the good intentions of the right hon. Gentleman. But at least, let him say that he accepts the principle behind this new Clause and will see that something is drafted in due course, either by Report stage or later this year, so that we may have the necessary legislation before us.
    Mr. H. Brooke: I must rise again, if only to prove that I am neither sanctimonious nor annihilated, and also to point out that the right hon. Gentleman even gets his stories wrong. The reference to candle ends did not concern a previous Chancellor of the Exchequer. The remark was addressed to the appointment of a new Secretary, and the correct version is that Mr. Gladstone raised a doubt, when a member of the Stanley family had been appointed to my present position, whether a scion of the house of Derby was best qualified to save candle ends.
    But we are perhaps straying from the eisteddfod. I should like the Committee to know that I have inquired about the extent of any net saving that might accrue from the acceptance of this Clause. Whatever may be said by the hon. Member for Walthamstow, West (Mr. Redhead)—and I realise that the hon. Gentleman speaks from first-hand experience—he will grant that I have made an up-to-date assessment of the position. I am advised that the amount of saving involved—and let me make clear that there are no forms to be filled up or

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    anything like that, it is simply a matter of writing a letter which could easily be put in the correct form by anyone who reads the Customs notice—the net saving—
    Sir L. Ungoed-Thomas: There is a printed notice.
    Mr. Brooke: There is a printed notice which sets out perfectly clearly the conditions of the exemption.
    The net saving involved, if anything of the kind suggested in the Clause had to be done, would in our estimation be more than offset by the additional work involved by Customs officers, in the phrase of the hon. Member for Walthamstow, West, exercising their vigilance and, in other words, travelling round the country to see what was happening.
    That is the result of my estimation of the matter. I am not therefore defending bureaucracy. I am seeking to put to the Committee that we should only be getting Parliament into further trouble and possibly further anomalies if we sought, by an alteration of the law, to do what now happens perfectly reasonably under the law as it stands.
    Mr. H. Wilson: I do not think that we should detain the Committee much longer on this matter. Obviously the Financial Secretary is not on his best form. He is determined to resist this thing to the death, and we are very disappointed about it.
    I should like to get the matter right about the candle ends. It is true that Mr. Gladstone did make the point about a member of the Derby family. I have that family among my constituents, and so I will not say what I think about it. In any case, it would be out of order to cast reflections on the noble Lord. Nevertheless, if the right hon. Gentleman studies the matter, he will find that Mr. Gladstone became so fond of the term "candle ends" that he used it on a subsequent occasion, I think it was in connection with the preparation of the Budget for 1862, though I would not be certain—it may have been that he used the phrase in 1863.
    I commend to the right hon. Gentleman that he follow that precept where it is possible to reduce bureaucratic expenditure and at the same time provide greater convenience for the tax-paying
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    public. We are disappointed that the right hon. Gentleman has not thought fit to accept at any rate the principle of this matter. I do not propose to advise my hon. Friends to take this matter to a division. It is a narrow point so far as revenue is concerned. I know that some of my hon. Friends will be disappointed, but I do not propose to advise them to divide the Committee. When we come to the next new Clause, which advocates a clean sweep of the Entertainments Duty, we shall have an opportunity to express our view, not only about eisteddfodau, but all other similar forms of tax.
    Question put and negatived.

    New Clause.—(EXEMPTION OF CERTAIN PERFORMANCES FROM ENTERTAINMENTS DUTY.)
    (1) Entertainments duty shall not be chargeable in respect of any entertainment where all the performers whose words or actions constitute the entertainment are actually present and performing and the entertainment consists solely of one or more of the following items, namely, a stage play, a ballet, a performance of music or a music hall or other variety entertainment.
    (2) This section shall have effect, and be deemed to have had effect, as regards payments for admission to entertainments held on or after the sixth day of August, nineteen hundred and fifty-six, other than payment made before the sixth day of April in that year.
    (3) In this section the expression "stage play" has the meaning assigned to it be section twenty-three of the Theatres Act, 1843.
    (4) In relation to entertainments to which this section applies, subsection (2) of section fifteen of the Finance Act, 1950 (which provides for the reduction of entertainments duty in certain cases), shall have effect as if after the word "rates" in that subsection there were added the words "or not at all"—[Dr. Stross.]
    Brought up, and read the first time.
    6.0 p.m.
    Dr. Barnett Stross: I beg to move, That the Clause be read a Second time.
    This is not the first Clause of this kind to be moved in a debate on a Finance Bill. Since 1916, when the Entertainments Duty was first imposed, efforts have been made from year to year to gain some amelioration of the position. No hon. Member will deny that the theatre is in a state of decline. I will give four short points as evidence of that fact.

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    It is agreed beyond doubt that about 80 provincial theatres have closed down in the past few years. The number in the last year is about two dozen. Secondly, we know that, when the theatre survives, plays tend to be fewer and the casts of individual plays tend to be smaller. Frequently there are no orchestras at all or, if available, they are very small indeed. The third point is that fewer shows are on tour now. The figures are significant. There were 110 on tour in October, 1951. In the same month of 1953 there were only 98. In October, 1955, the number of shows on tour was only 75.
    The fourth point is the most distressing of them all, and relates to the rising tide of unemployment in this industry. The number of actors and actresses who are now unemployed total 13 per cent. as compared with the national figure of about 1 per cent. Unemployment is therefore thirteen times as high in the theatre industry as the national figure. The cost of this unemployment is obviously very serious. I am sure that the Financial Secretary would agree that, in attempting to assess what may or may not be the net loss to the Revenue if the plea we are making should be successful, this cost must be taken into account.
    The causes of the decline are two and can be described in two words. One word is "competition" and the other word is "taxation". Competition cannot be helped. It is inevitable and it comes from the cinema in the main and secondly from television. I believe there are 5 million subscribers to television, which is the more recent and more formidable competitor than the cinema. The figures of taxation given to me vary. Some documents suggest that it is about 14 per cent. on turnover while from other documents I get the figure of 10 per cent. or 15 per cent. on turnover. The relevant word is "turnover" and that is why with some confidence I say that this is a thoroughly bad tax for it is a tax not on the profits of the individual theatre but on its turnover.
    There is a tax on the turnover of this industry, while its most recent and formidable competitor, commercial television, receives a substantial subsidy of £750,000 a year for ten years, with additional capital advances of up to £2 million. We have the interesting situation
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    that a well-tried instrument of culture has been savagely attacked by taxation since 1916, while a new method of offering news, recreation and perhaps culture too, receives a substantial subsidy at the expense of the taxpayer.
    The effect of the taxation should be looked at in the light of examples. One of these came to my hands the other day and refers to two theatres. Perhaps the Committee will bear with me and consider them. One example is the Golders Green Hippodrome and the other is the Streatham Hill Theatre. These places give a perfect example of the burden being borne by theatres, other than those in the West End, which appear to be able to bear taxation. Both theatres are owned by the same company and that is why I can give them together as examples.
    In 1955 the Golders Green Hippodrome paid £28,250 in taxation. The Streatham Hill Theatre was closed throughout the war owing to war damage and it was opened again in December, 1950. Since that time it has paid £60,000 in taxation. Since 1939 that theatre has not dispersed any dividends, has paid no interest on its debentures and has given no fees to its directors. Obviously it is not difficult to accept the cry of distress from the directors of these two theatres when they say that if this taxation continues both theatres must close.
    The directors point out that had the tax been shared between producers and theatre owners in the proportion of 40 per cent. for the landlord and 60 per cent. for the producers of the shows there would have been far better care and maintenance of the theatre itself, the shows would have been more attractive and better staged and they would have been dressed very much better. The theatres would have been able to compete with television and the cinema and—this is a very important point—would have been helping to provide the training ground which television and the cinema must have if they are to be successful and useful to society.
    I should like to give two or three more figures for the six weeks ended on 2nd June this year. They are the latest abstract of figures. The Golders Green Hippodrome made a net loss of £650 and during that time the tax paid was £1,437. Streatham Hill Theatre made a net loss

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    of £1,980 and paid tax of £824. These are formidable arguments and I do not need to stress them. No wonder eighty-eight theatres have closed down outside the West End in the last few years. The tax is discriminatory and operates in as negative a way as one could imagine.
    The position is obvious, and must be remedied. Unless and until the Government abolish the tax as a whole, then if we wish to discriminate let us do so positively by singling out for direct help such companies and organisations as we wish to assist. In 1946 my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) declared, as Chancellor of the Exchequer, that there should be no taxation on non-profit-making companies. They were exempted, and remain so. In addition to the fact that non-profit-making companies are exempt, some companies receive a direct subsidy from the Arts Council, so there is indirect assistance and direct assistance. Against that is direct discrimination by means of this deadly, murderous tax. That is the situation today.
    In 1948 Sir Stafford Cripps partially exempted the tax and today we are asking that it should be totally abolished. We should start to think again if we are going to help this artistic industry, if we agree that it should be so helped. There have been arguments against the abolition of the tax, and it would be unfair if they were not mentioned. The argument has been pressed most strongly by a former colleague, Mr. Benn Levy, who has shown great persistence in putting his point of view. I should like to put it in fairness to those who accept it.
    The argument is that the tax, if remitted, would benefit almost entirely the landlord of the theatre and not the author or the company. A simple example could be given as follows. If the company and the landlord share the takings on a fifty-fifty basis, assuming that the intake of the theatre per week is £1,200, obviously there would be £600 for each if there were no tax. With the tax as it is at roughly 14 per cent. one may say that £200 is the tax on that intake. In a non-profit-making company the £200 is taken from the £1,200, leaving £1,000 so the share-out would be £1,000 on a fifty-fifty basis and each would take £500, but the company would get the £200 tax and the result would be £500 for the landlord and £700 for the company.
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    If the tax were abolished and the income was £1,200, on a fifty-fifty basis that is £600 for each. Apparently the company would receive £100 less and the landlord would receive £100 more. That is the argument and I hope I have put it as clearly as possible. There is a flaw in the argument, because it assumes that beyond all doubt there would not be a change in the sharing basis if the tax were abolished.
    Before I give evidence about the flaw in the argument, may I say that those who wish the tax to remain as at present have three other lines of thought. Firstly, they say, as I have described already, that the rebate would go wholly to the landlord. Secondly, they say that halving the duty in 1948 did not really help the progressive theatre but caused the Young Vic to close because, as a result of the sharing percentage not being altered, in the first year the Young Vic lost between £3,000 and £4,000 and could not remain alive. The third argument is that at present the remission, due to the action taken by the Chancellor in 1946, is conditional and, therefore, funds tend to be reserved for further productions whereas unconditional remission, which we are all asking for, would, it is argued, encourage the dissipation of those funds. I think I have put the case as fairly as I can and fairly fully.
    To suggest that there would be no change in the basis of share-out if the tax were abolished cannot be defended, although I admit that in the case of the Young Vic there was no change in the basis. I have a letter in my hand, dated 14th June, which was sent to my hon. Friend the Member for Goole (Mr. G. Jeger). It was sent by the Secretary of the Theatres' Entertainments Tax Committee and says:
    "Mr. Linnitt has asked me to let you know that at today's meeting of the Theatrical Managers' Association an assurance was given by those responsible for running the great majority of the larger theatres in the provinces that if the tax were abolished they would be quite prepared to adjust their sharing terms so as to ensure that the non-profit distributing touring repertory companies would not in any way be the worse off. This may help to allay any anxiety which may be expressed in the debate on their behalf."
    6.15 p.m.
    I think I have now put both sides of the case, and I turn to the attitude of the Arts Council. It has been said—I have seen it in print—that the Arts Council is

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    opposed to abolition of the tax. That is not correct. If the Arts Council adopted that attitude it could be described only as unobjective, as its attitude is neutral. It has an interest in twenty touring companies and also in opera on tour. If the tax were abolished, touring repertory companies, supported by direct subsidy from the Arts Council unless the basis on which they share the takings with the owners of the theatres where they play were altered, might be losing something by this change.
    The letter I have read would tend to show that those companies would not be worse off, but I know the Committee will not blame me for trying to put this matter as fairly as I can. In one respect there would be a slight change which would not be significant, for the royalties would have to be paid before tax deduction. With no tax the royalties would be paid by the companies in gross takings. The royalties to the author would, therefore, be slightly higher unless there were an agreement about them. We who are interested in authors and artists should not find it very objectionable if authors found themselves slightly better off as a result of the abolition of the tax.
    The Arts Council has about twenty companies and the outside figure of the loss it might sustain as a result of a change would be £500 a year for each company. That would be £10,000 and, with opera on tour, another £5,000, so that the effect for the Arts Council would be a figure of something appreciably less than £20,000 a year. The total figure represented in this matter is just a little over £2 million. Naturally, if this change goes through the Arts Council wants to be reimbursed. If it were to be reimbursed I can assure the Committee that the Arts Council would be in favour of the abolition of the tax.
    It is also interesting to note that no organisation favours the retention of this tax—certainly not the Council of Repertory Theatres, which is entirely in favour of abolition. The trade union, Actors' Equity, in in favour of abolition and, naturally, the theatre generally is in favour of abolition, also.
    I have mentioned that the tax is a little over £2 million. It is falling appreciably each year, for the reasons which I have already given and which
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    are self-evident. This £2 million represents a little less than half of one-farthing in the £ of the total revenue. Against that £2 million, assuming that it is real money which the Treasury receives, we have to offset the cost of paying unemployment benefit to 13 per cent. of the actors and actresses of this country and the indirect loss in revenue resulting from the fact that the theatre is failing, compared with the revenue which would be received, if the theatre were healthy, in Income Tax which would be paid direct to the right hon. Gentleman's Department by people who were working and thriving. It may well be that the net loss if the right hon. Gentleman gave way entirely on this matter would be appreciably less than £1 million, for the people unemployed are drawing nearly £1 million a year in unemployment benefit.
    I turn to the last part of my argument, and I remind the Committee, and the right hon. Gentleman in particular, that there was recently on the Order Paper a Motion signed by 358 Members, probably equally from the two sides of the House, asking for the abolition of the tax and for an immediate inquiry, I think, in order that the Treasury should know that it could safely remit this tax. As far as I know, we have not had this inquiry, although possibly the right hon. Gentleman has much information to give us. Are we to assume that the Government intend to continue this harsh treatment of the theatre, an institution which is as old as our own civilisation and an essential part of our life?
    I conclude by reminding the right hon. Gentleman that Sir Francis Bacon once said this:
    "But men must know, that in this theatre of man's life it is reserved only for God and angels to be lookers on."
    May not we have the right to be allowed to be lookers on at our own mankind's theatre and gain vicariously a little consolation, a little pleasure and perhaps a little experience of life in the best of all possible ways?
    Sir Beverley Baxter: It may be remembered that a number of my hon. Friends and myself put down a new Clause dealing with the live theatre, but apparently it was out of order. What we intended to achieve is included in what the hon. Member for Stoke-on-Trent, Central (Dr. Stross) has said.

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    I cannot bring myself to believe that even in these difficult times the Chancellor will not save the theatre from its present impossible plight. If the Chancellor considered it purely as a business proposition, a matter of revenue or of expense, he could be given a paraphrase of Sir Edward Grey's words—using them at the beginning of the speech instead of where they are usually used, towards the peroration—"The footlights are going out one by one all over the country." If this tax is continued the theatre cannot survive. What will the Chancellor do?
    I think there is common agreement upon this point: the living theatre supplies the continuing story of our speech and thought through the centuries. If there had been no such thing as the printed word, the theatre itself would have told the continuing story of our people. One Chancellor after another recognises this to be true but somehow does nothing, or so little that the process of decline and fall goes on.
    I was born in Toronto before we had the privilege of enjoying television, films, and the rest of the mechanised, recorded age in which we live. We were a far-off country in those days, because we could not cross the sea in a few hours. In Toronto, even in those days, we had four or five theatres. Dramatic companies came from London, with Forbes Robertson, Ellen Terry and the rest of those great actors and actresses who made the London stage a thing of such glory at the time.
    This is what helped to bind us to the Mother Country. It is not only the speeches of politicians which bind people together. Sometimes I think the Treasury Bench think that that is their job. In fact, it is the arts and the expression of the soul of a nation which bind people together.
    If I may speak personally for a moment, when I came here, during the First World War, I saw London for the first time and was able, even during the war, to go to theatres and to hear English spoken beautifully and as it should be spoken. When we came on leave from France we went to the theatre—not always to the classics, for we were not immune from the young ladies of the chorus and the musical shows. We were very young in those days and there were some very good musical comedies, with
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    some excellent people in them, in London. Nevertheless, it was the theatre which drew us and it is to the theatre today that many of our compatriots look.
    Yet one by one the theatres are closing down. The situation becomes worse all the time. I see the Financial Secretary smiling at that, but he is a kindly fellow and I do not believe that he will refuse to listen to our plight. I am sure hon. Members will agree when I say that to tax any business enterprise, whether the theatre or anything else, on its turnover cannot be defended. The theatre is in this absurd situation: if only one person turned up and bought a ticket—perhaps for one of my plays—and no other ticket was sold, the lean fingers of the Treasury would take part of the money.
    Mr. Gordon Walker: Mean fingers.
    Sir B. Baxter: The lean, grasping fingers of the Treasury would take part of the price of that one ticket. The Committee may think that I am not very strong on economics, but that procedure does not seem to me to be justifiable in any way.
    6.30 p.m.
    May I ask the Financial Secretary how many more theatres must close before the Government of the day do something to save the living theatre? I should like to think that we were all of one mind on this point. Why not take action now? Why not give the theatre a chance to survive in an age when most of our people, as far as entertainment goes, have forgotten what the human voice really sounds like? They get nothing but animated photography in the form of films or television, a recorded voice. They hardly ever hear the glorious language spoken, as it was intended to be spoken, by human beings. The repertory theatre in my own constituency, Southgate, is still there, but it has such a struggle to survive. Although it provides living actresses and actors and although it puts on good plays to people who enjoy them, it still has to pay Entertainments Duty and I think that it, too, will soon close down.
    I feel very strongly about this. I have seen the books of some theatres which have had what would otherwise have been a successful run but which, after paying Entertainments Duty, have had practically nothing left. If something is not done I am sure that many hon.

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    Members on both sides will be bitterly disappointed, and from bitter disappointment to bitter resentment is not such a very wide step. Speaking, as I think I do, for so many of my own party, I ask with all the sincerity I can command that something real and workable be done to keep the living theatre from going to its death.
    Dr. King: After the classic statement of the case by my hon. Friend the Member for Stoke-on-Trent, Central (Dr. Stross), and the eloquent way in which it was reinforced by the hon. Member for Southgate (Sir B. Baxter), I feel that I ought to begin my less eloquent remarks by quoting Shakespeare:
    "The words of Mercury are harsh after the songs of Apollo."
    I want to appeal to the Committee to given very earnest consideration to the plight of live entertainment. Those of us who support this Clause do not argue—it would be foolish to do so—that the remission or the abolition of Entertainments Duty would completely solve the problems of the live theatre. The theatre, and other living entertainment, faces all kinds of other handicaps.
    There is, for example, competition from T.V., which is subsidised by the State to the extent of £¾ million for the next 10 years, there are the excessively high rentals charged for theatres, and a variety of other burdens which it would be outside the province of this debate to discuss, but we do claim that it can be mathematically proved that some of the theatres are being destroyed by Entertainments Duty. Before I sit down I hope to give some figures which show that, excluding all other factors hostile to live entertainment in this country, Entertainments Duty itself, and itself alone, does compel a number of theatres to close down.
    I want to call the Chancellor's attention first to the financial magnitude of the concession that we are seeking. That part of Entertainments Duty derived from theatrical performances is declining, partly because fewer people are going to the theatre and partly because numbers of theatres are going out of business year by year. In 1955, the revenue from theatre Entertainments Duty was £2·17 million. By 31st march, 1956, it had dropped to £2 million. Therefore, the
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    maximum sum involved in this new Clause is £2 million a year—and a £2 million which would further decline if the decline of recent years is to continue into next year.
    As my hon. Friend has pointed out, what the Chancellor would lose on the swings he would gain on the roundabouts. Some people who would otherwise be unemployed would not be unemployed. Unemployment in the acting and musical professions is about the highest in the country. I understand that it is about 30 per cent.—
    Dr. Stross: No—13 per cent.
    Dr. King: I am sorry; I meant 13 per cent., but it is still the highest in the country. Many of those who would be employed by theatres kept open would be paying Income Tax instead of drawing National Insurance benefits. The Chancellor would not, therefore, be losing the whole of the £2 million.
    The particular aspect which I want to bring to the attention of the Committee is one that appeals to me as a provincial. In 1955, there were only 75 theatrical shows on tour, whereas in 1953 there were 98. The first casualty in the theatre is the decline of that form of entertainment in the provinces.
    The hon. Member for Southgate paid tribute to the fact that English actors appeared in Toronto when he was young. I should like to acknowledge what I owe personally, as typical of hundreds of thousands of British provincials, to—if one likes to call them so—the second-grade or even the third-grade touring companies of my young days.
    There were people like the Macdona Players introducing Shaw to audiences in the provinces; the Carl Rosa and the Moodie Manners Opera Companies, and Ben Greet taking Shakespeare round the country. There were the companies that brought "The Maid of the Mountains" and "The Chocolate Soldier" and all the repertoire of musical comedy into the lives of many people for whom, otherwise, a whole section of culture—opera, stage-play, musical comedy—might never have existed.
    My own town, Southampton, is exceedingly drama-conscious. I should think that in proportion to our population we have almost as many amateur dramatic societies as any other town in the country,

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    yet rarely do the amateur artistes themselves or the general public in Southampton now get an opportunity of seeing dramatic performances by competent professionals. The first casualty is the complete disappearance—and we have seen it approaching in these later years—of the provincial live theatre.
    It may be said that London can survive. Roughly speaking, that is true, but it is only true of the outstanding success.
    Dr. Stross: And of the West End.
    Dr. King: Even in the West End it is only the outstanding success that can survive. The Chancellor might very well argue that the highly successful, topnotch film, the very, very attractive musical comedy, a new masterpiece by a new Shakespeare might get by despite Entertainments Duty and all other handicaps, but if I might seek an illustration by going back two centuries to the theatre in Addison's time, if a play had a run of seven nights that was a colossal success. "The Beggars Opera" was a triumph because it went for about 100 nights, but a London play today has to run for about a year before it begins to tick over or make any profit at all. A show which is a modest average success may be ruined by the Entertainments Duty. The Theatre Entertainments Tax Committee has shown that in 1955, out of 55 London shows only five covered their expenses, and yet the other 45 were not all plays or entertainments which flopped the first night but some were average successes which, because they were not outstanding, could not manage to make a profit.
    I am glad that this new Clause mentions the music hall. We have a great British tradition in music hall. We all remember the names in this great field of British popular artistes—the Harry Lauders, the Marie Lloyds and the Wee Georgie Woods. I do not decry the modern radio artiste by any means, but there was something intimate about the live performer and his show. Humble as it may be, the contribution of the music hall artiste to British life has been a worthwhile and a happy one. It would be a pity if it were to perish.
    As for the legitimate theatre, my hon. Friend the Member for Stoke-on-Trent, Central was right to point out that we are
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    now discussing the peril facing a national inheritance dating back through the centuries, through names like Siddons and Garrick to the men of Shakespeare's time. In our own time, there are, I would suggest, outstanding geniuses, probably more outstanding actors and actresses than ever in our history.
    People like the Thorndykes and the Terrys have been mentioned. I would call to the attention of the Committee names like Sir Ralph Richardson and Sir Laurence Olivier, actors of international repute. What a bitter thing it would be if the land which had produced Shakespeare turned out to be the only country in the world where Shakespeare's plays were never performed. We are living at a time when drama written in the English language in its range and quality probably outstrips any period in the history of British drama, apart from Shakespeare's time. What a tragedy it would be if the British theatre were to go out of existence during the 50 years which have seen such a remarkable renaissance in our drama.
    The simple fact is that some theatres are earning money to give to the Government; they are not only not making a profit, but they are actually paying for the privilege of acting as tax collectors for the Government. I will give the Committee some characteristic figures, taken from a list which many hon. Members will have studied. In the North of England a theatre paid £13,000 in entertainments tax, yet lost £3,000 in the same year; its proprietors paid £3,000 for the privilege of collecting £13,000 for the Chancellor. In the Midlands, a theatre paid £9,000 in tax and lost £1,750 on the year. In Scotland, a theatre paid £17,000 in tax, yet lost £9,000 in that year. In Wales, a theatre paid £7,000 in entertainments tax, yet lost £4,000 in the year. In a London suburb a theatre paid £11,000 entertainments tax, yet lost £9,000 in the year.
    That sort of thing cannot go on. No group of citizens, however worthy, are going to be so public-spirited as to lose money for the privilege of collecting taxes for the Government. If the Minister says that what they ought to do is to increase prices for admission, the answer is, as was pointed out in similar circumstances during an earlier debate, that the bulk of any sum by which admission prices are

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    raised goes to the Government tax. Live entertainment faces a heavy burden if it makes a profit; it faces a fantastic and intolerable burden if no profit is made. The live theatre and live musical entertainment is on its way out unless the country does something to save it.
    I mention musical entertainment particularly because, paradoxically enough, just as we are living in the great age of drama, we are living—thanks to the B.B.C.—in a time when appreciation of good music is more widespread than it has ever been, when great performances of great orchestras can attract crowded audiences in any part of the country. Yet so high are the costs of a mighty orchestra—thanks to the fact that we are paying professional musicians a decent wage almost for the first time in history—that when entertainments tax falls as an added burden such musical performances labour under almost prohibitive difficulties.
    To accept this new Clause would not solve the problem, but not to do what the Clause seeks to do will certainly aggravate it. I would commend to the Minister the simple reminder that the Motion on the Notice Paper calling for the abolition of entertainments tax on live entertainment is signed by probably every hon. Member of the House who is free to sign a Motion of that kind.
    [That this House, realising the importance to the prestige, culture and well-being of the nation of preserving the living theatre, and noting with concern the continual closing of theatres and music halls in all parts of the country resulting mainly from losses caused by box office receipts less Entertainments Duty falling below minimum running costs, urges Her Majesty's Government to investigate the situation without delay, and, in particular, to consider to what extent further closings can be avoided by extending the present limited range of exemptions from Entertainments Duty to include all forms of entertainment in which the performers are personally present and performing.]
    We understand that members of the Government cannot sign a request to the Government. We understand that dignified members of the, shall one call it, shadow Government, cannot put their names to a Motion on the Notice Paper. But, those groups excepted, I would
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    imagine that every other hon. Member on both sides of the House has signed this Motion. I would, therefore, ask the Minister to give it the full consideration which it deserves and abolish the Entertainments Duty on live entertainment.
    6.45 p.m.
    Miss Joan Vickers: I am happy to follow the hon. Member for Itchen (Dr. King), because lately we have had the pleasure of seeing eye to eye on many subjects. I wish to add a special plea for the provincial theatre. In many towns with a population of a quarter of a million or more it is seldom possible now for people to have the opportunity of seeing any stage performance or ballet or to attend a concert, because the only theatre or hall they had has been closed. It is very strange that those people should pay, through taxation, to subsidise Covent Garden and Sadler's Wells, whose performances they never have a chance of seeing and never will see owing to the expense of coming up to London.
    In the provinces, certainly in the West Country, it has not been possible to put up the prices of seats because people really cannot afford to pay more. We find that the price of seats ranges between 5s. and 1s. 9d. From the 5s. the Government take in tax 7½d., and, coming down to the 1s. 9d., they take 1½d. The cost of transporting scenery, the cost of players coming down to provincial towns, the cost of heating, lighting and costumes—all have gone up. The theatres cannot afford to carry this extra burden of entertainments tax.
    The matter of extra expenditure has been well put by the hon. Member for Stoke-on-Trent, Central (Dr. Stross) and by the hon. Member for Itchen. For my part, I would add, on this occasion, an appeal not to the pocket of the Financial Secretary, but to his heart. For quite sentimental reasons, we should try to keep these theatres alive. It has for a great many years been our pleasure to have an annual Christmas pantomime. Now, as the result of the closing of so many of these theatres, there will be literally several million people who will have no opportunity ever again to see a pantomime. Moreover, there will be no opportunity of seeing classical plays, which I consider essential for the education of children.

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    Tied up with this matter of entertainments tax and the closing of theatres is the question of winter and summer outings employing coaches, and bringing business to local restaurants which very often are attached to local theatres. There are the landladies who put up the people who travel on tour. All these people pay taxes to the Government, and they will not be able to do so in the future. The Government will find that what they would gain on the roundabouts they will lose on the swings.
    We are losing a great training ground for young actors, including the educational value to children from the local schools of having the opportunity of seeing live actors, so that they can get an idea of how to stand on the stage, how to speak clearly, and so on, which it is very difficult for a teacher in a class to demonstrate. I suggest that learning the art of speaking is a great asset—possibly the Financial Secretary will wish this afternoon that many people had not learned that art—but I trust that we shall be able to continue the teaching of how to express ourselves fully and in good English in the future.
    Many of the port towns have recently lost their theatres, and I should like to emphasise what has been said by my hon. Friend the Member for Southgate (Sir B. Baxter) on the subject of people coming from overseas. Plymouth has now no theatre at all. Visiting navies come there, and we have nothing to show them now in the way of our cultural art. Recently, we had visits from the New Zealand and the Pakistan navies. I think that sailors of the British Navy coming into a port also need something, apart from the cinemas, which they can probably attend in other counties to which they travel, but in which they cannot gain that knowledge which they can gain from the British theatre.
    The Financial Secretary was very unkind to Plymouth yesterday. He knocked one of our famous sports heavily on the head. I hope that this time he will give us some encouragement so that the people of Plymouth may still have some pleasures left to them. It is rather strange to realise that in a great many of the blitzed towns where theatre buildings were among the few saved from Hitler, those theatres are now being forced to close down at the hands of the Govern-
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    ment. I should like the Financial Secretary to realise that I hope that his reply will show that he also realises that the theatre is as old as civilisation, and I plead with him not to let it down on this occasion.
    Mr. J. P. W. Mallalieu: The hon. Member for Southgate (Sir B. Baxter) is not an economist, and I sometimes feel that that may be an advantage when dealing with economics. He has put the general case against this tax very fully and forcibly. I have to confess that I myself was in danger, until a very short time ago, of being in a minority of perhaps one in the whole Committee in thinking that there were dangers in removing this tax because of the advantages which have accrued to non-profit distributing companies in the past by their getting a larger total amount from the receipts.
    I was very impressed by the letter which was read by my hon. Friend the Member for Stoke-on-Trent, Central (Dr. Stross), giving an assurance that if the tax were removed the non-profit distributing companies, repertory and the rest, would not be worse off in the provinces. I hope that we may get a similar assurance from the theatre landlords in the West End. If we could have that assurance, then the whole basis of the case against removing the tax would be removed. In view of the assurance which we have had, I personally, support the new Clause, and I do so, in part, for particular reasons which come within my own personal experience of the operation of this tax.
    One of the features of the tax which I think is wrong, and which has not yet been mentioned, is that it gives to the Customs and Excise Department a job for which it is just not suited. In spite of what was said by one of my hon. Friends on a previous Clause about its abilities in recognising an eisteddfod, it is not, in my opinion, qualified to decide what sort of performance is, for example, partly educational. It has a power which, I think, it sometimes exercises wrongly, and which it ought not to have.
    I will give a personal example of the kind of experience which I have had as a director for a very short time of one of these non-profit distributing companies. We wanted to put on a show called "Joan of Arc at the Stake," with Ingrid

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    Bergman, and we wanted to put on another show which was a Japanese ballet. I know that it is difficult to know what is partly educational. I sometimes think that a thing is educational if it is somewhat over my head. The Japanese ballet was wholly educational from that point of view, because I could not understand a word of it. These shows were just the sort of thing that ought to be encouraged to be put on in the London theatre.
    We applied for tax exemption under the 1946 Act, and, to our amazement, we were turned down. As a result, we lost about £17,000 and had to fold up. We were turned down because of a ruling of the Customs and Excise Department which, in my opinion, it had no right to make according to the 1946 Act, and over which Parliament had no control. That was because our non-profit making company was receiving a loan from a particular impressario and we could not be considered to be providing that entertainment.
    Other impressarios had provided funds for non-profit-making companies to put on shows, so why should we be singled out? The point which I am making is that there was an absolutely arbitrary exercise of power which Customs and Excise had arrogated to itself. That is one of the evils of this tax, and one of the arguments in favour of abolishing it is that a Government Department should not be given that power.
    We had, unfortunately, a rather more unpleasant experience than that. When we were told that we could not get tax exemption, we were approached by a group who said that if, under the counter, we would agree to give them 10 per cent. of the tax remission they would undertake to get round the Customs and Excise. I have not the faintest idea whether that was true or not. It may have been absolutely "phoney" and, of course, we would not touch it, but I was interested to find out whether or not it was true.
    Accordingly, I tabled a Question, asking the Financial Secretary to let me have a list of the plays and shows which had been granted tax exemption in the past 18 months and by whom they had been provided. The purpose was to see whether this particular group had, in fact, some access to the Customs and Excise Department.
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    7.0 p.m.
    The Financial Secretary to the Treasury, with his usual stonewalling tactics, told me that it was too much trouble to provide the list. To save him trouble, I put down a second Question and asked, not for the names of the shows which had been granted tax exemption in the previous 18 months, but for the names of the shows which had been granted tax exemption in the previous six months. He again said that it was too much trouble.
    I simply do not believe that a Government Department which is as competent in ordinary business things as the Customs and Excise does not keep for itself and by its side a simple list of each show to which tax exemption is given. When the Financial Secretary to the Treasury refused to give me that information, it began to make my suspicions become somewhat deeper that in this matter there was something to hide.
    It is all wrong that a Government Department should be given this power and authority, which, in my opinion, it is not qualified to exercise, and that it should seem to be subjected to outside pressures of this kind. Because the passing of the Clause would remove the Customs and Excise from this sphere entirely, I very much ask the Financial Secretary to consider not merely the particular experiences which I have put to the Committee, but, far more important than that, the general points which have been so eloquently put by hon. Members on all sides of the Committee.
    Sir Herbert Butcher: The hon. Member for Huddersfield, East (Mr. J. P. W. Mallalieu) has narrated some interesting experiences. I was glad, however, that he concluded by suggesting that perhaps on the broad and general lines it would be right and proper that exemption from tax should be given in respect of the living theatre. There are certain facts which should be borne in mind, and I am delighted to see that my right hon. Friend the Chancellor of the Exchequer himself has come to listen to the all-party expressions of view that this tax should be repealed.
    I believe that the retention of this tax is an absolute loss to the national Exchequer as a whole in the widest and broadest sense. During the last year, 80 theatres—perhaps more—have closed. They were theatres that were paying rates,

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    consuming light, encouraging public transport and selling excisable liquors and tobacco on which revenue duties were obtained; theatres which were employing people who were making their own contribution to the National Insurance Fund for health and unemployment benefits and who were earning incomes on which tax was paid. Those theatres have closed, and all that revenue has been lost to the nation as a whole.
    The maximum amount of tax that the Chancellor could possibly lose by agreeing to the wishes of the 358 Members, drawn from all parties of the House of Commons, who desire to see action in this direction to be taken in the present Finance Bill, is £2 million. He would, however, commence to recover some of that money right away. From any theatre which was making money, as some of them are, he would recover 8s. 6d. in the £ straightaway to the extent of his remission and he would, at the same time, keep other theatres open. This is not the time for long speeches. Rather is it the time for all of us to impress upon the Treasury as much as we can how eager we are that something should be done.
    Consider my own constituency. Just as my hon. Friend the Member for Devonport (Miss Vickers) spoke of hers in the far West, I speak of mine in the East. There is no theatre nearer than 40 miles away, and that one is now being converted into a cinema. What chance is there for the children to go to a pantomime, or for anyone to see Shakespeare performed on the stage in costume, as it should be performed? Those are the things we ask the Chancellor to give us.
    We believe that if the Chancellor listens to the voice of the House of Commons in these matters rather than to the carefully worded advice on financial matters offered to him by the Treasury, there would be no financial loss in this matter whatever. The Committee will be most grateful to him for any relief he can give.
    Mr. G. Jeger: I want to reinforce the arguments which have been put to the Chancellor of the Exchequer from both sides of the Committee. I do so from a point of view which is, perhaps, unique in this Committee as far as I am concerned, since I am, I think, the only Member in
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    this Committee who has the day-to-day job of running theatres. Therefore, I can speak from practical experience and, at the same time, declare that I have an interest in the subject under discussion. That gives me an expert point of view upon it.
    My interest so far as the cultural life of the theatre is concerned, and the basis of my appeal to the Chancellor to abolish Entertainments Duty entirely, has no connection whatever with my interest in a West End theatre. I share, with other hon. Members who have spoken, the view, based on my experience, that the West End of London is capable of looking after itself and standing on its own feet. I am concerned with the provincial theatre, and it is as one connected with a provincial theatre in the North-East that I want to stress to the Chancellor the plight of the theatre today and to appeal to him to remit this taxation.
    It has already been said that this is a bad tax. Its basis is different from that of other taxation. We all object to taxation, but this tax is unique. It is a tax upon the seat of the theatre when the admission charge is paid, irrespective of whether the show or the performance makes a profit or a loss. Very often the taxation which is paid every week means that the theatre sustains a loss instead of paying its way or, perhaps, making a profit.
    No theatre owner or manager can survive on perpetual losses, and we have already been given instances of the number of theatres which have closed down since the war. More of them are closing in the provinces each week, and when they close they are being converted to other uses. They are not being bought and reopened by other theatre managers, but are being lost to the theatrical world. Their conversion to factories means that very often they pay only a quarter of their previous rates and the local authority as well as the Chancellor loses revenue, because the premises qualify for the 75 per cent. remission in rates if they are converted to house manufacturing industries. That is happening in many places. It is not easy to convert theatres into offices or into anything other than cinemas, warehouses or factories.
    The cost of running a theatre has increased tremendously. There are increased wages all round, increased costs

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    of equipment, of lighting and of rates since the new assessments came into operation. Very often the owners of small theatres in the provinces are faced with the dilemma of whether to run into debt to carry out necessary renewals and repairs in their theatres, whether it is possible for them to renovate the carpets and seating, and whether they can afford to put the boilers into a fit state for the oncoming winter for the convenience of patrons, or whether they should allow matters to drift on and the theatre to get into a state of decay and even semi-ruin. Very often theatre owners cannot afford to keep their theatres in the state in which they should be if they are to compete successfully with modern cinemas and with television at home.
    Since the war, there have been only slight increases in the price of theatre seats, because there has been a feeling, as the hon. Member for Devonport (Miss Vickers) said, that to increase the price of seats would keep away from the theatre a large number of the people whom we want to get into the theatre. When visiting the provincial theatre with which I am connected, I have always been pleased to see the large number of such people who are going into the theatre. It is the young people whom we want to see educated in speech, diction, walking, deportment and in a love of drama, speech and the classics. Those are the people whom we want to attract to the theatre, and those are the people who demand cheap seats. Consequently, no theatre owner can put up the price of his seats and thus keep out of the theatre the very people whom he wants to attract. They will be the theatregoers of tomorrow; they are the young theatregoers of today who will be educated to be the theatregoers of tomorrow.
    We were debating a little while ago a new Clause dealing with eisteddfodau.
    The Rev. Llywelyn Williams: My hon. Friend's pronunciation breaks my heart.
    Mr. Jeger: It is a long time since I lived in Wales, and I must apologise to my hon. Friends for my pronunciation.
    However, in that debate we faced one of the anomalies of the Entertainments Duty, when we were told that because nobody pays Entertainments Duty on an
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    eisteddfod, therefore there was no need to grant exemption to the holders of eisteddfodau. That is one of the anomalies with which the law relating to Entertainments Duty is cluttered; an anomaly which has been referred to by my hon. Friend the Member for Huddersfield, East (Mr. J. P. W. Mallalieu).
    He talked of the way in which a Treasury official must decide whether an entertainment is of educational value or partly of educational value or not of educational value at all; an anomaly which allows non-profit making companies to flourish side by side and interlocked in various ways with ordinary commercial profit-making concerns; an anomaly that allows music hall artistes, musicians and singers to perform in restaurants or carbarets where no Entertainments Duty is payable, though the moment they step down into a music hall to give the same performances the tax is payable. Anomalies of that kind are hard to understand, and the Financial Secretary himself admitted that they are incomprehensible to the ordinary person and are illogical.
    For our cultural and educational life, we need the theatre to continue. That has been acknowledged by the Government by their subsidising various forms of theatrical and musical entertainments through the Arts Council. I am very glad that from year to year the Government increase their subsidy to the Arts Council and consequently allow the Council to spread its blessings wider and wider each year. I wish they would do it even more, because I hate to see any form of cultural entertainment having to go cap in hand to beg of rich patrons or having to run charity performances to pay its way. We as a nation need to provide for this form of entertainment, to keep it alive. The State has an interest, since it is an entertainment which can attract visitors from overseas and because it is a necessity in the cultural and educational life of the nation.
    The total amount of tax involved in the Clause is about £2 million. It has already been pointed out that much of that would come back to the Treasury in Profits Tax and Income Tax. Certainly much of the remission benefiting the West End of London would be made good and come back, because profits are already being made in the West End of London, and they would be increased, and consequently there would be more Income

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    Tax and Profits Tax to be paid. The Treasury would not lose very much, but would gain a great deal by sweeping away these anomalies, and by thus bringing benefit to theatres all over the country.
    My hon. Friend the Member for Stoke-on-Trent, Central (Dr. Stross), in his admirable speech on the Clause, referred to the fact that the Old Vic had lost money despite the fact that undertakings had been entered into affecting it, but I would point out to him that Covent Garden is losing money, that it is in the nature of certain forms of entertainment that they must lose money, and that no attempt at financial jugglery behind the scenes can prevent certain forms of cultural entertainment from having to be subsidised, if they are to continue. I am reminded that the great Edinburgh Festival, already world famous, loses money every year, and yet it is considered to be a cultural necessity to continue the Edinburgh Festival, and I hope we shall always continue it.
    I appeal to the Chancellor to consider this new Clause in the broad-minded way of which, I know, he is capable. I would appeal to the Financial Secretary to consider it on the same level as the miniature bottles of spirits, and make the concession for which we are asking. It will cost very little compared with the total Budget, but the cultural advantages will be very great indeed.
    7.15 p.m.
    Mr. H. Brooke: First, I would pay tribute to the manner in which this new Clause has been moved and supported, and especially to the hon. Member for Stoke-on-Trent, Central (Dr. Stross) and my hon. Friend the Member for Southgate (Sir B. Baxter), who were the first two to speak in this debate. They stated their case with eloquence and charm and reason. To put it in simple language, they got the debate off to a very good start. I found myself differing from my hon. Friend the Member for Southgate when he imagined that his appeal would especially touch the hearts of Members of Parliament because people so seldom nowadays have an opportunity to hear the human voice. That argument would, perhaps, weigh with others, but hardly with us, I think.
    Before I come to the main issue of the debate I should like to say a few words
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    about a speech which was of a rather different character, the speech made by the hon. Member for Huddersfield, East (Mr. J. P. W. Mallalieu), who was criticising the Customs and Excise in its operation of one of the exemptions. I remember the case well because the hon. Member came to see me at the time and we had more than one talk about it, though I did not know of the offer he appears to have received afterwards from somebody who would get round the Customs if he would give him or her 10 per cent. commission.
    I suspect it may have been a she who did that, because we do know of a woman who does go round making that sort of offer to people who have difficulty in gaining exemptions for their productions. Her activities have come to our notice, and, in consequence, I can assure the Committee, the Customs scrutinises with a great deal more than its usual care any application where it has the slightest reason to believe that she has been concerned. So far as I understand, this woman did not intervene in the earlier stages, when the hon. Member for Huddersfield, East came to see me about this matter.
    I want to cross swords with the hon. Member on this. He spoke of powers the Customs and Excise had arrogated to itself. I must defend Ministers and officials against any charge of that sort. The Customs and Excise Department, in this case, was carrying out a duty laid upon it by Parliament, carrying out the provisions of the Finance Act, 1946, which require the Commissioners of Customs and Excise to be satisfied of certain things. It is open to any hon. Member to say that that is a piece of bad law, but it is a law passed by Parliament, and when Parliament has declared what is to be the law we surely ought not in Parliament to criticise anybody in an official position who, to the best of his ability, is carrying out a duty laid upon him by Parliament.
    Mr. J. P. W. Mallalieu: There was nothing in the law as we passed it to say that the help could be provided for one impresario and not to another, and that was the point I was making.
    Mr. Brooke: I must go into this in a little more detail. The applications to which, I think, the hon. Member was

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    referring were applications for an enterprise named Musikart to receive exemption for two entertainments, "Joan of Arc at the Stake" and Japanese ballet. Those applications were rejected by the Customs and Excise Department about 18 months ago. There was no suggestion whatever on the part of the Customs that they were not cultural entertainments, but, to gain exemption under Section 8 of the 1946 Finance Act, as the Committee knows, the entertainment must satisfy another condition. It must be provided by a society, institution or committee which is not conducted or established for profit. In this, Parliament has thrown directly on the Customs the duty of satisfying itself whether the conditions laid down by Parliament are satisfied.
    In this case, on all the evidence taken together, they felt bound to reach the view that Musikart, a body with a capital of only a few pounds, was not really providing the entertainment in question—a West End entertainment requiring a large investment of capital. In briefest form, that was the issue. That was how the Customs reached its decision, and without going further into the pros and cons of the case again, in view of what the hon. Member has said, I felt that it was right that I should recount the other side of the story.
    Now, to revert to the main issue—
    Mr. Redhead: The right hon. Gentleman has apparently investigated the matter with great care, as it is obviously his duty to do when a matter like this is brought to his notice. Seeing that there has been a suggestion that there was, perhaps, a reluctance to supply certain information asked for at whatever stage it may have been due, and perhaps something which it was tempting to cover up, will the right hon. Gentleman say that he was satisfied, from the results of his investigations, that whatever may be claimed by any group or persons, there is, in fact, no justication for suggesting that the Customs and Excise is susceptible to improper pressure in a matter of determining its statutory functions?
    Mr. Brooke: There is no justification whatever for any charge of that kind against the Customs. In the reference that I made earlier to a certain lady, I proved by that reference that the Customs
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    was on guard against improper pressure of any kind, and, also, that its eyes are not closed when people of that kind are about.
    To return to the main issue of the new Clause, as the Committee knows, the Entertainments Duty as a whole brings in an annual yield of £39 million or £40 million. In my speech in the Budget debate—
    Mr. H. Wilson: May I put a question to the right hon. Gentleman before we leave the general point? We are all finding the right hon. Gentleman's speech very interesting, but I am sure that, in his rather brief reference to the point made by my hon. Friend the Member for Huddersfield, East (Mr. J. P. W. Mallalieu), he falls between two stools. It might have been better if he had not dealt with it at all, but, if he was going to deal with it, he should have gone on to give a rather fuller and more satisfactory explanation to the Committee of that particular case.
    Surely he has not satisfied the Committee on the point raised by my hon. Friend, particularly in his intervention, when he said that in the case of one impressario it was agreed but that in the case of another it was not. Now we are told that it was simply because the capital of the company was small that it was felt that the impressario, who was making a loan for the purpose of this project, was putting up the capital. Is the size of the capital of the company now to be the test?
    Mr. Brooke: If the right hon. Gentleman will read my speech as recorded in HANSARD, he will see that I made it perfectly clear that the Customs has to take its decision on all the evidence and on all the circumstances taken together. In this case, one salient fact was that the body which, it was claimed, was providing or was to provide the entertainment, had a capital of about £13, and certainly did not possess assets of its own whereby it could finance the production of a big West End entertainment.
    Now, if I may pick up again what I was saying, in the Budget debate I made it clear that we cannot monkey about with different parts of the Entertainments Duty. If we are to make changes at any point, we must review the duty as a whole; otherwise, as with almost any taxation, if we modify one

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    bit of the tax, we find that we have put something out of balance and created some anomalies, and, therefore, we must extend our examination and survey to the whole structure of the duty.
    It is perfectly true that, as has been said in this debate, the yield of the various entertainments which fall into the first scale of the duty, the ones we are discussing now, is only £2¼ million. Indeed, if we exclude circuses and things of that kind, to which I do not think hon. Members have been referring, because they were thinking not so much of living animals as of living people, the yield from what we know as the living theatre is £2 million a year.
    I must make perfectly clear to the Committee that, financially, this is not just a matter of £2 million and that alone. If there were to be an alteration here, in fairness it would be necessary to re-examine all the rest of the structure of the Entertainments Duty and to bring forward more far-reaching proposals.
    Sir H. Butcher: Why does my right hon. Friend say that it will be necessary to bring forward more far-reaching proposals when those at present before the Committee command the assent of a majority of hon. Members?
    Mr. Brooke: I am not quite sure whether the proposals to which my hon. Friend refers will command the assent of the majority of the Committee when it has finished hearing me speak.
    There has been some reference in the debate to the various exemptions which it is possible now to claim, and I noticed the skill and astuteness with which some hon. Members turned that argument round against me, so to speak, and suggested that because there were these exemptions they were liable to operate unfairly, and that that was an additional reason for getting rid of the whole duty. It is important to appreciate the extent of the exemptions, because I have detected every now and then, in several speeches from both sides of the Committee, an unawareness of the wide variety of entertainments for which exemption can, in fact, be claimed under the existing law.
    The most important of the exemptions relate, first, to performances which are wholly amateur; secondly, to shows the
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    proceeds of which are devoted to charity; and, thirdly—and I think this is particularly relevant in the present context—stage plays, ballets, concerts and certain other kinds of entertainment provided by a body which is not conducted or established for profit, and the main aims, objects and activities of which are partly educational. That is commonly known as the partly educational exemption.
    In that last exemption alone, there are about 2,000 organisations which obtain relief from duty now amounting to no less than £600,000 a year. These organisations range from the Old Vic and the Shakespeare Memorial Theatre to a large number of local societies putting on serious works. They include the majority of the repertory theatres and they also include the major companies presenting ballet and classical opera and the major symphony orchestras.
    When reference is made, as I did just now, to the repertory theatre, I prick up my ears when I hear people saying that all the opportunities for young actors are disappearing. I understand that the Arts Council has calculated that the number of permanent repertory theatres permanently open is three times what it was 25 years ago. The chances for young actors and actresses are not as limited as some hon. Members from both sides of the Committee have suggested. It is also of some significance that theatres which did close, or announced their intention of closing, included some which were regularly putting on productions which were exempt from tax. I mention that because it is a mistake to assume that the only reason why the living theatre is meeting with difficulties, or why individual theatres in towns have closed down, is Entertainments Duty. That is far from being the case.
    7.30 p.m.
    If one analyses the facts, one finds that in some cases the theatre has closed because the lease has been up. In other cases there has been a fire. Various reasons of that kind may be the effective ones in particular cases. I am not for one moment seeking to argue that the theatre is without its difficulties. I readily grant that if the duty were removed from the living theatre, one difficulty, one burden, would be lifted from its shoulders, but do not let anybody suppose that this is the main burden, the

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    crushing burden, and that if only it could be taken away the theatre would flourish and all the difficulties would vanish.
    Before the Budget I had the pleasure of receiving an authoritative deputation representing all sides of the industry, including Equity, from the Theatres Entertainments Tax Committee. Unfortunately, the deputation did not include any of the lovely ladies to whom my hon. Friend the Member for Southgate referred as attracting him so much when first he visited London. Indeed, in conversation with the deputation I had to express my personal regret at that omission and to congratulate the members of the deputation on their eloquence rather than on their glamour. Perhaps if they come again that will be corrected.
    They certainly made a powerful case. I grant that at once, but let us be equally sure that it is not the case that the living theatre is singled out at present by a tax of particularly vicious incidence. In fact, it is one of the few taxes which are no more severe in their incidence now than they were before the war. This tax amounts to about 12½ per cent. of the box office takings and many of us would find life easier to lead if the rates of tax on other things could all be reduced to 12½ per cent.
    It is also interesting to analyse the sources from which the £2 million of revenue come. We have investigated this very carefully and in broad figures about three-quarters of that sum—about £l½ million—comes from variety and musical shows and not more than one-quarter—that is, £500,000—from what we call the straight theatre. If, therefore, the tax were removed, the major advantage would accrue to productions of this type of variety shows. I say that not for one moment to denigrate them, or depreciate their undoubted attractions, but simply to get this matter into perspective. This plea for exemption of tax, which is so often put to the public as a plea for the relief of culture, is, in fact, a plea to a large extent for removing a burden of tax from the seaside variety show.
    The hon. Member for Itchen (Dr. King) said that the live theatre was on its way out and other hon. Members conveyed the suggestion that the theatre was dying and that in a few more months or years, unless the tax were removed, it might be
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    dead. It is true that the yield of the tax has been falling and that theatre attendances have been diminishing over a period of years. Here again, as I mentioned to the Committee in other sections of entertainment, in the years immediately after the war, when there were not many other things on which they could spend their money, people went to cinemas, theatres, football matches, and so on. Now there are more alternatives and there is also televison and in a number of ways the living theatre has been suffering from loss of revenue at the same time as its costs have been increasing.
    However, I am glad to say that recently there has been a turn for the better. The hon. Member for Itchen spoke of the process of this year continuing into next year. In preparation for this debate I got the most recent figures, because I knew that the Committee would wish to be aware of what was thoroughly up to date. The figures for the last six months—that is, from December, 1955, to the end of May, a few weeks ago—show an increase in the revenue of about 3½ per cent. compared with the corresponding period of 1954–55.
    On other occasions I have myself argued against using short-term figures as decisive evidence one way or the other, but I am entitled to quote those figures as proof that this is not a continuing decline and that there is now a return, and a welcome return, to the theatre. Nevertheless, I shall not say for one moment that all is well with the living theatre.
    Mr. Arthur Moyle: Is the right hon. Gentleman aware of the representations made by the Theatre Entertainments Tax Committee in relation to tax revenue in the statement it submitted to him and to other hon. Members that the revenue from Entertainments Duty only in respect of the living theatre has declined? The statement was:
    "The revenue from Entertainments Duty on the living theatre for the year ended 31st March, 1956, amounted to £2 million as against £2·17 million in the previous financial year and £2·4 million the year before."
    How does the Financial Secretary square his statement with that statement?
    Mr. Brooke: I have with me the figures of revenue from theatres and music halls for the past six financial years. As I have been challenged, it is right that I

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    should give them to the Committee. They are: in 1950–51, £2·2 million; in 1951–52, £2·3 million; in 1952–53, £2·4 million; in 1953–54, £2·4 million; in 1954–55, £2·2 million and in 1955–56, £2·1 million. I do not think that there is any difference between us. I frankly agreed that in the last two or three years the yield had been going down. I also made the point that in the last six months there had been an upturn, which was welcome not only to the Chancellor but to the theatre, because it meant that more people were going there.
    I have made clear from this Box during our previous long debates that we have had about the other two sections of Entertainments Duty that my right hon. Friend the Chancellor does not feel able to make any change in the duty this year. I refused another suggested tax reduction only two or three hours ago, in another direction. The Chancellor felt convinced that his tax reductions this year must be confined to those which would stimulate savings. Nevertheless, he has authorised me to repeat that he is not satisfied with the structure of Entertainments Duty as it stands, and does not think that it ought to remain indefinitely as it operates at present. He is re-examining the whole matter, in connection not only with the living theatre but the cinema and sports and games of all kinds.
    Upon general economic grounds he believes that it would be wholly wrong to announce, this year of all years, that he deemed it the right moment to reduce Entertainments Duty, but he is seriously pledging himself to prepare new plans for the duty, covering a review of all its sections, so that he will be ready, at what he considers to be the appropriate time, to lay fresh proposals before Parliament.
    Mr. Gordon Walker: The right hon. Gentleman said that he had told the deputation which came to see him that he could congratulate it upon its eloquence rather than its glamour. I am afraid that I cannot congratulate the right hon. Gentleman either upon his eloquence or his glamour. His was a very dismal performance. It was very disappointing, and it will have offended hon. Members on his own side of the Committee no less than those on this side. He treated the matter in the way that is usual in a Treasury brief, namely, by submitting that the tax is a benefit to all those who
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    have to pay it. We are getting very tired of hearing that argument.
    He said that we cannot monkey about with Entertainments Duty. I do not see how he can say that when so many extraordinary anomalies exist in this duty at present, in connection with partly educational, profit making and non-profit making productions. This tax has been monkeyed about with already, and is now riddled with anomalies. The proposal put forward by hon. Members on both sides of the Committee would reduce this matter to some sort of order. So far from monkeying about with it, it would make it a sensible and reasonable tax.
    The right hon. Gentleman said that we could not do what is proposed without putting something or other in this complicated tax sphere out of balance, but if he will not do anything he will put the theatre out of business. Hon. Members on both sides of the Committee who know the industry, art and enterprise of the theatre, have made most convincing speeches to show that it is now really in danger. I am glad that the Chancellor has been with us during the debate, because he will have heard speeches from both sides of the Committee, and by Members of all parties, which were unanimous in their plea.
    We are very glad that hon. Members opposite—including the hon. Member for Devonport (Miss Vickers)—have spoken, but I would tell them, in all friendliness and sincerity, that there is only one way of getting done what they sincerely want done, and that is by carrying their vote in the same direction as their voices. That is the only way in which we can obtain the real view of the Committee upon the proposal which is before us. The Financial Secretary really cracked the whip, and I hope that his hon. Friends noticed it. He said that after he had sat down they would not vote for the proposal because the opinion of the Committee would be against it. But he cannot have deceived himself into thinking that the arguments which he used convinced anybody. He can only have meant that it was the Whips who would do the convincing.
    7.45 p.m.
    The hon. Member for Southgate (Sir B. Baxter), in a very dramatic and telling phrase, said that the footlights are going

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    out one by one—and it is true. In recent years, 80 provincial theatres have shut down. I understand that about 24 closed in 1955. How that fact can be squared with what the right hon. Gentleman has been telling us—that everything is getting better; that the tax yield and profitability are both getting better—I really do not understand. As my hon. Friend the Member for Stoke-on-Trent, Central (Dr. Stross) so well showed, the numbers of productions on tour are also declining, and that is a very grave matter.
    The right hon. Gentleman made the point that the burden of tax is not the sole cause of the theatre's troubles. We all know that. There are many other troubles. The State is subsidising one of its chief competitors, namely, commercial television. That is one of the theatre's troubles. But the tax has the advantage that, unlike the other troubles of the theatre, it can very easily be removed—by a vote of the Committee. It would take a great weight off the theatre. As the right hon. Gentleman said, it would certainly not allow it to bound forward, but it would at least allow it to walk more freely.
    When we were discussing a similar tax upon sport, we made the point that this is an extraordinarily bad tax. It is applied whether a profit is made or a loss sustained. It offends all good and proper fiscal principles. Nobody minds a tax which falls upon profits made in the theatre, but this tax falls upon losses as much as upon profits, and in so many cases it makes all the difference between profit and loss. So many times the amount of tax is just that amount which would have been necessary to break even, and a profit which could have enabled the theatre to continue is turned into a loss.
    I knew that the right hon. Gentleman would say that the Chancellor does not want to kill the theatre. He said the same thing about sport. He is like the Quaker sea captain who captured a pirate and told him that his principles forbade him killing the pirate, but he would hold the pirate's head under water until it pleased the Lord to take his life away. That is the attitude of the Chancellor to the theatre. He is not killing it; he is letting its life run away because he is holding its head under water. The
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    Financial Secretary's argument is a really miserable one.
    This is a matter of vital importance to the culture of the nation. Hon. Members have disagreed on whether the amount involved is £1 million or £2 million, according to whether the net or the gross figure is taken. It is such a small amount for something of such great importance that it is too trivial an argument to put forward seriously from the Treasury Bench. The Chancellor is genuinely interested in the cultural life of the nation. I ask him to realise that the theatre is in danger, and that it is not enough for him to tell us that he is going to think about the problem and try to do something about it later.
    The theatre is in danger here and now. Theatres are closing down. As my hon. Friend the Member for Goole (Mr. G. Jeger) said, the process is irreversible. If a theatre closes down it is not merely a question of suspension, after which the theatre can be used as such again. All too often the building is converted and lost for ever as a theatre.
    The argument that certain commercially profitable parts of the theatre would benefit more than other parts from the reduction of tax is not really a good one. The theatre is indivisible. The repertories, the great successes, the musical shows and the good plays all hang together. The theatre cannot survive unless there are places where productions can be put on. Nobody objects to the fact that the removal of the tax would benefit certain popular productions more than others. It would help the theatre as a living, integral whole.
    The tax is riddled with anomalies. It is dangerous and damaging to the country. I hope that hon. Members on both sides of the Committee will continue to press the Chancellor, and that hon. Members opposite will take the matter so seriously that they will be prepared to vote on this issue. It is not a matter of politics but something affecting the cultural life of the nation. I hope that the Chancellor will say, after listening to the debate, that he has been convinced by the arguments advanced from both sides of the Committee.
    Mr. John Hall: The right hon. Member for Smethwick (Mr. Gordon Walker) referred to the unanimity of

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    opinion expressed in this very harmonious debate. I propose to strike a slightly discordant note, and to support my right hon. Friend the Financial Secretary. That is not because I do not sympathise with anything which has been said by those hon. Members who support the new Clause, but because I am not so optimistic as are some hon. Members about the results which would follow the removal of this tax.
    It has been said by my right hon. Friend and other hon. Members that a large number of theatres, especially repertory theatres, already escape the Entertainments Duty. They gain exemption by putting on plays of cultural or educational interest. The fact is that despite not having to pay Entertainments Duty those theatres are finding it increasingly difficult to survive.
    The reason is that people are just not going to the theatre. They do not go because other entertainment attracts them away. There are the cinemas, which themselves have to put on a first-class show today in order to attract people from television. There is also television and radio in the home, where all kinds of variety entertainment can be seen and heard. People ask themselves why they should pay, often quite a substantially bigger sum, to go to the local theatre, where they see brave amateurs, and young professionals learning their job, putting on a play with great enthusiasm and verve and often with great skill, but attaining a standard much lower than that of the West End, when they can see a first-class film or watch television.
    I am not convinced that the removal of the Entertainments Duty would have the effect of helping these theatres to continue. But perhaps the Chancellor might consider afresh the whole question of the tax on all entertainments and sports. I agree with the right hon. Member for Smethwick that Entertainments Duty is bad. It results in receipts being taxed and not profits, and in that way it must be a bad tax. In my opinion, there is a strong case for doing what I understood my right hon. Friend the Financial Secretary to say would be done, having a complete examination of the Entertainments Duty next year and recasting the system of taxation on all forms of entertainment and sport. Although I have supported all the moves made in this
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    House from time to time to remove the impact of tax both from the theatre and the cinema, I do not feel that I can support this Clause, for the reasons which I have given.
    The cinema could produce an equally good case. There is no doubt that small cinemas throughout the country are finding their position increasingly difficult. I know a number of cases where small cinemas are closing down, because they find it impossible to continue. They claim that it is because of the impact of tax, and perhaps in some cases there is justification for that claim. But often they have too small a place to attract a large enough audience to give an income sufficient to put on the best films—
    The Temporary Chairman (Mr. Frank Bowles): Order. The Committee has already discussed the question of the film industry. It is true that the Financial Secretary referred to the whole matter being considered by the Chancellor, but we cannot now discuss the film industry.
    Mr. Hall: I appreciate that point. I was merely comparing the theatre and the cinema because they are suffering largely for the same reason, namely, that people will not go to them because they find they can get better entertainment elsewhere.
    Even were the Chancellor to give way on this point and remove the Entertainments Duty, I do not think it would have any effect on the increasingly rapid destruction of the theatre in the country as a whole. Theatres in the West End and in the big cities will continue to survive. They can look after themselves quite well. The small theatres will continue to die unless they are helped directly, and not indirectly by the removal of this tax. To be helped directly they would have to receive some kind of subsidy assistance similar to that now given to Covent Garden and other establishments of that kind, and that is not necessarily an idea which would commend itself to many hon. Members.
    I consider the position of the small theatre to be a tragedy, because the small theatre has a definite and valuable part to play in the cultural life of our country as a whole. It provides a school where the coming actors may receive their early training. But we must face the fact that people do not want that class of entertainment at the present time. They prefer to

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    go elsewhere and get better entertainment for the same or even less money. Therefore on this occasion I am able—I will not say with pleasure—to support my right hon. Friend; though I hope that the whole question of Entertainments Duty will be examined next year and that the tax will be revised so that it does not have quite the unfortunate effect which it has in some cases today.
    Sir Thomas O'Brien: After the benediction pronounced by the hon. Member for Wycombe (Mr. John Hall) it would appear that there is but one thing left to do, and that is to bury the body. To the everlasting credit of the living theatre, I can say that it is full of healthy and robust optimism about its current difficulties.
    We of the theatre do not intend to bury the body, even though the Chancellor is prepared to act as undertaker. The case for the abolition of this tax on the living theatre has been made out overwhelmingly. I am grateful to the Chancellor for the assurance he gave last week, and which has been repeated by the Financial Secretary today, that the whole question of the Entertainments Duty will be examined. As I represent all sections of the entertainment industry. I find that a gratifying assurance. I welcome it, as will the whole industry, provided that the Chancellor means what he says and gets down to the job as quickly as possible.
    I wish to try to satisfy the Committee that it is not a question, as was mentioned a moment ago, of giving certain concessions to sections of the industry or monkeying about with the Entertainments Duty as a whole. The Federation of Theatre Unions, of which I am the President, representing the British Actors' Equity, the Association of Musicians and Variety Artistes, and my own union, the Stage Technicians and Staffs, are convinced that we are not playing the "bosses" game in trying to bring about the abolition of this tax so that there may be more profits for the "bosses".
    We are satisfied—as the Financial Secretary said he was when he received a deputation from the entire industry—from the star right down to the theatre cleaner, that the theatre is going out of existence. We do not agree with the
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    Financial Secretary when he paints a more colourful picture than is warranted by the facts.
    8.0 p.m.
    On the trade union side of the theatre we are so convinced that we feel we ought to be able to convince the Chancellor of the Exchequer himself. Many who have to live by the theatre earn only a precarious living and want to have some relief. We do not want another year of uncertainty and of seeing one theatre after another close down. I therefore appeal to the Chancellor of the Exchequer to reconsider this matter.
    I have already expressed my appreciation of the assurance which has been given about re-examination of the structure of the Entertainments Duty, but the abolition of the duty for the theatre is a surgical operation. The patient is in desperate straits and only a surgical operation can save him. I admit here and now, on behalf of everyone in the entertainment industry, that the cause of the decline of the theatre is not wholly the Entertainments Duty. We want to be perfectly honest about that. We believe that the difficulties are due not entirely but mainly to the duty.
    Sir B. Baxter: The hon. Member and I work together on this matter. Knowing the Chancellor of the Exchequer as I do, I believe that the statement made on his behalf by my right hon. Friend the Financial Secretary is genuine and constructive. I believe that the Chancellor intends to do something. This is an all-party debate and I want to avoid a Division.
    The Temporary Chairman: The hon. Member for Southgate (Sir B. Baxter) rose to intervene in the speech of the hon. Member for Nottingham, West (Sir T. O'Brien). He must not make a speech.
    Sir T. O'Brien: I know that there are difficulties about seaside shows, variety acts and red-nosed comedians, but we cannot separate the living stage and split the theatre up in that way. The theatre is still the source of apprenticeship for other sections of the entertainment industry, including films, television, and broadcasting. Take away that source and everlasting difficulties will be created for the other sections.
    I support the appeals that have been made to the Chancellor to have second

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    thoughts on this matter and to get rid of the Entertainments Duty on the theatre once and for all. Knowing the other sections of the industry, I am sure that there will be no jealousies, for example, in the cinema and the sport sections. They have their own case. Sports are not dying. The small cinema is in difficulties, but the cinema industry is not dying. Its existence is not threatened. The existence of the theatre is threatened.
    I take this opportunity of thanking the 360 hon. Members on all sides of the Committee for the wonderful support they have given to the case for the abolition of the duty on the theatre. I thank all who have participated in the debate and have supported the proposed new Clause. The Chancellor ought to do something to help the theatre before the end of this year.
    Mr. Reader Harris: The announcement which has been made on behalf of the Chancellor will have come as a great disappointment to many people in the theatre. I have not so many friends in the theatre as other hon. Members may have, but I have a few friends. They have made very strong pleas to me to use our best efforts this year to get the Entertainments Duty removed. I could not hold out any great hopes to them, but I did hope that within a year we should have a favourable decision on this very important matter.
    I was glad to hear the pledge given by the Financial Secretary and I would have received it much more happily if he had added that new proposals would be brought forward next year without fail. I suppose it is almost too much to hope for. I urge the Chancellor to bring forward his fresh proposals about the Entertainments Duty next year for an absolute certainty.
    From what I gather, it is unlikely that many theatres will be able to survive for another 12 months, and that must be serious. It is serious for us who live in Middlesex, as I do, and as does my hon. Friend the Member for Southgate (Sir B. Baxter). He lives in the northern part of Middlesex and I in south-west Middlesex, where we badly need a theatre. The hon. Member for Feltham (Mr. Hunter) knows all about this, as he
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    is in the constituency next door to Heston and Isleworth. For a long time we have wanted a theatre to serve our part of Middlesex.
    Who would be so foolish or rash as to try to start a theatre, even a very small one? The odds are too much against it. There may be other odds, apart from Entertainments Duty, like television, and it may be that even if the duty were removed the theatre would still find itself in difficulties. From the lowest political viewpoint, the Government should not put themselves in the position to be accused of helping to kill the theatre. We should do all we can to help it, even though removal of the duty may not do all that is required.
    I was sorry to hear the Financial Secretary say that removal of the duty on the theatre would be monkeying about with the duty. The Lord Privy Seal, when he was Chancellor of the Exchequer, did a little monkeying about with the Entertainments Duty when he exempted cricket. That bit of monkeying about was very favourably received. I hope we have a little more monkeying about with the duty this evening. I am sorry that the Chancellor has not felt it possible to take the action this year which we all so much desire.
    If the Chancellor is to examine the Entertainments Duty, I hope that he will make up his mind once and for all to tax not turnover but only profits. Once upon a time, the great call in this country was, "No taxation without representation". Cannot this Conservative Government be the first to introduce the principle, "No taxation without profits"? It is futile that we should go on taxing losses. I do not see what there is to commend that.
    It was with very much pleasure that I received the pledge made by the Financial Secretary to the Treasury. I hope that, before we leave the subject, the Chancellor will tell us that he will bring forward new proposals without fail within twelve months.
    Mr. Ede: In the 1880s and 1890s, when I used to take part in what was the then recognised form of juvenile dramatics, the Band of Hope, we used to sing a little hymn beginning:
    "'No' is a very little word.
    In one short breath we say it."

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    What astonishes me is the number of words which the Financial Secretary has had to say on successive new Clauses in order to utter the single word "No".
    I hope that the Chancellor will take the gamble that the right hon. Gentleman seemed to offer. He said, when he was interrupted on one occasion, that he would wait until the arguments that he proposed to put forward had been heard, in the belief that by waiting he would find his hon. Friends behind him converted to his point of view. I watched those hon. Ladies and hon. Gentlemen on the Government side of the Committee, and I am bound to say that I saw no signs of conversion.
    Therefore, if we are to rely on the argument, will the Chancellor take off the Whips and let the argument sway the issue and not the question of what will please the Whips? I noticed, a few minutes ago, that a couple of Whips were going round having whispered conversations with two or three hon. Gentlemen on the Government side of the Committee. Whether they were merely dissuading them from occupying any further time with speeches or were suggesting that their presence in the right Lobby later on would be regarded not so much as a favour but as a duty, is not for me to speculate upon.
    I am bound to say that I am very disappointed with the line taken by the Financial Secretary. The Chancellor seems to be having a tough time this year getting ready for next year's Budget. On every serious Amendment and new Clause that we have moved we have been told, "Not this year, but the Chancellor is carefully examining this subject with a view to doing something next year." I almost began to think that I ought to be putting my money on the possibilities of a General Election somewhere about May or June, 1957, but then I was a little comforted because I recollected that one day, on the Luton Corporation Bill, the Chancellor said, "Next year we will have a scheme for the reorganisation of local government so that I shall not have to ask the House to reject this Bill again," and he left office within three months.
    The Chancellor of the Exchequer (Mr. Harold Macmillan): The right hon. Member is usually so accurate that I
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    would venture only for the record to correct what he said. I made no such statement. I said when I was Minister of Local Government that either there would be a new scheme or I would definitely have to warn hon. Members that there could not be such a scheme and I could not use that as a reason against that Bill. In fact, in the following year I did exactly what I promised to do.
    Mr. Ede: As a matter of fact, before the next year came round the right hon. Gentleman had moved to a new office.
    Mr. Macmillan: Yes, but my successor carried out exactly what I said. There were arguments whether a review should be carried out without a reorganisation and I said that we would not again use that argument: either we would have it or we would not use the argument against the Bill. I resent the suggestion that I said what the right hon. Member suggested. It is absolutely untrue and a filthy thing to say.
    Mr. Ede: The right hon. Gentleman need not get so indignant as all that, because I did not say that he made a false statement. What I said was that he made a statement and that the next year, which was the year to which he had alluded, he was no longer in the office which would enable him to carry out that statement.
    Mr. Macmillan: No such statement was made. If the right hon. Member looks it up he will see that the very thing I said would be done was done by my successor.
    The Temporary Chairman: Order. This may be entertaining, but it has nothing to do with Entertainments Duty. I hope that the right hon. Gentleman will soon bring this part of the discussion to a close.
    Mr. Ede: If the right hon. Gentleman will look at columns 712 and 713 of HANSARD for 18th March, 1954, he will see that my statement is amply borne out by the statements he then made. I knew it was, because the other night I looked up the point in order to deal with this same argument which is now being used—"not this year, but next". I had hoped that when the right hon. Gentleman was at the Treasury we would have a real effort this year to deal with this

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    problem, because I have a great admiration for the way in which the right hon. Gentleman, as a rule, deals with this sort of subject, and has done, no matter on which side of the House he may have been sitting at any particular time.
    8.15 p.m.
    I want to reinforce the plea that has been put forward by more than one hon. Member, by hon. Members on both sides of the Committee, about the bad influence that the destruction of the provincial theatre is having on the educational system of the country. If children are to see the great classic authors portrayed on the stage very many of them cannot see such portrayals in London theatres. It will have to be in the provincial theatres, theatres of small towns, and sometimes by performances of gifted amateurs. It is true that amateur performances are exempt from taxation, but the small provincial theatre in such places as Plymouth, which used to be the centre of a very considerable area for south Devonshire and east Cornwall, is disappearing. That is a very considerable loss to the education service. I have been impressed by the rapid disappearance of the theatre in towns even in a county like Surrey, which is comparatively near London. In small towns like Kingston and Guildford considerable efforts have been made to maintain a theatre.
    I do not think that we can afford to wait another year for a decision on this matter. I hope the right hon. Gentleman will accept the challenge which the Financial Secretary throughout threw out to the hon. Members behind him. They heard the argument. It was quite evident from the expression on their faces and from what followed that everyone except the hon. Member for Wycombe (Mr. John Hall)—who, after all, was not so enthusiastic in support of the Financial Secretary at the end of his speech as he was at the beginning—was disappointed. There was no sign on the benches opposite, apart from that hon. Member, that they had been convinced that the new Clause to which so many of them had put their names had been convincingly answered by the Financial Secretary. I can only hope that they will follow up what they have said, and what they wrote when they put their names to the new Clause, by voting in the Lobby for it tonight.
    Mr. A. E. Hunter: I wish to strengthen the plea made by hon. Members on both sides of the Committee. It was rightly said by my hon. Friend the Member for Nottingham, West (Sir T. O'Brien) that 368 hon. Members had signed a Motion relating to this matter. Therefore one can assume that if the Government took off the Whips tonight there would be a majority in the House of Commons for the abolition of Entertainments Duty on the living theatre.
    I do not agree with the hon. Member for Southgate (Sir B. Baxter) that the British theatre is dying. I have confidence in the theatre and do not believe, whatever the competition it has to face, that the theatre will die. It is a British cultural asset for our cities and towns, and in the schools children are always keen to act. I believe that the living theatre is one of the assets of British life. It is facing great difficulties, and I think that the Chancellor should do his best to overcome those difficulties.
    My hon. Friend the Member for Goole (Mr. G. Jeger) speaks with some practical experience of running a West End theatre, and I agreed with a great many of his remarks, but I do not think that all the West End theatres are having an easy time. My hon. Friend has a remarkable knack of picking winners; I believe there have been only three plays since 1945 at the theatre which he manages. One can point to other West End theatres, however, where often there has been a new play every three weeks and sometimes two or three a month. In view of the very considerable production costs, that is a liability to a theatre.
    Some West End theatres do not make a profit, and some have difficulty in maintaining themselves as going concerns. Some theatres were bombed during the war and are unlikely to be rebuilt, some have closed down and others have been sold; and I believe that there are now six West End theatres fewer than there were in 1939.
    The theatre faces extra running costs, extra rates, and very hight costs for electricity. A theatre consumes an enormous amount of electricity, for it contains a great deal of electrical apparatus. There must be competent people in charge of it. The theatres come under licensing control, and unless there are competent engineers and others in charge they will not get

    367
    their licences. They must therefore pay proper trade union rates of wages. If hon. Members saw some of the duties performed in theatres I think they would agree that the staff are not overpaid, either in the West End or in the provinces.
    The provincial theatres are vital to the West End theatres. Often where there has been a successful production in the West End it is sent out on what is called a "No. 1 provincial tour." Before the war, as my hon. Friend the Member for Goole well knows, those tours would often be of 50 weeks' duration. That meant that the touring company went out for 50 weeks, and if not much money had been made by the production in the West End, the tour enabled the company nevertheless to make a profit, or recover its losses.
    Owing to the closing of so many provincial theatres, it is difficult today to arange even a 15-week tour, and in some cases productions which have been performed in the West End have only a 12-week tour in the provinces. One can therefore see, when dealing with theatres as a whole, that one must link the provincial theatres with the London theatre. Repertory theatres, too, are important to the living theatre for they often produce the star actor of tomorrow. In many small towns repertory theatres have closed down because of the increased cost of production, increased rents and rates and increased maintenance costs. Without the repertory theatre the living theatre in this country will have a lean time.
    I therefore make my appeal to the Chancellor. We are not asking for a large sum of money. The living theatre is a British asset which stretches back for centuries. One thinks of Shakespeare, of the strolling players and of plays on the English green. The theatre is a great cultural asset to this country, and I ask the Chancellor to consider its problems, and help it.
    As hon. Members know, bids have been made for many provincial and some West End theatres. Building speculators have made bids for them because they occupy valuable sites. Some West End theatres have been bid for by building speculators who would be pleased to buy them in order eventually to replace them by blocks of offices which would provide a much bigger profit. They would not have
    368
    to pay Entertainments Duty, so the Chancellor would lose that, and the nation would lose the theatres.
    The hon. Member for Heston and Isleworth (Mr. R. Harris) spoke about south-west Middlesex. We should like a theatre in south-west Middlesex, but with building costs at their present level that is not a very practical proposition. We have amateur shows, and often they pay Entertainments Duty. I had a complaint from an amateur operatic and dramatic society in my constituency that, although most of its proceeds are given to hospitals and an old folks' home, the society is called upon to pay Income Tax because its expenses have reached a certain sum.
    I ask the Chancellor to give this matter careful thought, as the living theatre is a great cultural asset to this country, and reflects the British people, their history and their lives.
    Mr. Moyle: Having regard to the very many speeches which have been made in support of the new Clause moved by my hon. Friend the Member for Stoke-on-Trent, Central (Dr. Stross), my only reason for taking part in the debate is that I do not want the Chancellor in any way to under-estimate the very strong feeling which exists on the issue.
    The Financial Secretary, who is a faithful servant to the Chancellor, has had to deal with some pretty fast body-line bowling during the debate on the Bill, but when, on behalf of the Chancellor, he replied to the debate about the tax on the living theatre, I thought he did himself less than justice. The story he told us as the reason for which the Chancellor cannot agree to exempt the living theatre from the tax was precisely the same kind of story as that which he told the sports representatives when they met him in March, as that which he told us last night, and as that which he had repeated this afternoon.
    I want to ask the Chancellor to have another look at this matter. At the moment the issue is confined to the living theatre; it is a complete entity which can be dealt with, in my view, separately and independently without in any way giving rise to the reprecussions to which the Financial Secretary has continually referred in emphasising that the Chancellor is unable to do anything for one section of the community because if he

    369
    did it would upset the whole structure of the Entertainments Duty. I do not believe that that argument has the slightest substance here, because the living theatre is a separate, independent entity raising a revenue of not more than £2 million a year and this revenue is diminishing. A sum of £2 million a year on the total earnings of the theatre means a tax on box office receipts of virtually 14 per cent., but if the Financial Secretary's figure of 12½ per cent. is correct then I submit that 2s. 6d. in the £ is a very heavy tax when imposed on receipts and not on profits.
    8.30 p.m.
    I suggest that the Chancellor this year could at least look at this matter to see whether he can devise some means of freeing the theatre from the astonishing position of having to pay considerable taxes, when at the same time, it is sometimes unable to meet its wages bill. My hon. Friend the Member for Itchen (Dr. King) referred to a number of cases in which Entertainments Duty has had to be paid by the theatre while other debts were incurred in order to do so. That is an astonishingly anomalous position. Cannot the Chancellor this year say that, as part of the major consideration which he promises next year, he will lift the theatre out of its present unfortunate position by relating the tax to profits rather than to receipts?
    I ask him that because I am perfectly certain, having regard to their background, that both the Chancellor and the Financial Secretary are very conscious of the great contribution which the British theatre has made to our way of life. I imagine that no one in the House is less unaware than they of the theatre's contribution to British education. Is there any community that displays a wider sense of charity than does the theatrical world? How often do we appeal to it to give a helping hand to some deserving charity, whether it be to help ex-Service men or children here or abroad? No matter what aspect of need manifests itself, we ask the theatre to help, and it generously responds.
    The Financial Secretary really scratched around to find a case against this demand for exemption. I think it is fair to put it that way—he scratched around for a case. In spite of what he said about the increasing buoyancy of the revenue since
    370
    the early part of the year, the total number of unemployed in the theatrical world is increasing. I am told that at the moment it is 13 per cent. as against 1 per cent. for the rest of the community.
    I was very much impressed by the conciliatory speech made by my hon. Friend the Member for Nottingham, West (Sir T. O'Brien). He spoke in a representative capacity, and I would ask the Chancellor to pay due regard to what he said. He was conscious of the case that had been put to him and his colleagues by the Financial Secretary some months ago on this very issue. The Financial Secretary then stated—and I can only paraphrase what he said, 'I should like to help you, but what can I do? I cannot help you without there being repercussions on the whole structure, which would jeopardise our receiving about £40 million from the entertainment world as a whole."
    This afternoon my hon. Friend asked the Chancellor not to be affected unduly by that argument. On behalf of his own people, he said that, if the living theatre were relieved of this tax, that would not be regarded as a precedent upon which to seek further concessions for the cinema and other sections of the entertainment world.
    Again, the living theatre is the nursery of many of our entertainments. It is from the theatre that the cinema and television stars are recruited. It is from the British theatre that most of our actors secure an opportunity to give of their best for the good life of this country. Above all, the repertory theatre is the greatest school of apprenticeship in which young actors and actresses can reach professional maturity.
    My final word is this. Do not let us forget that these actors and actresses whom we have produced are great dollar earners and our great ambassadors of good will in the United States.
    Mr. H. Macmillan: I very much regret that I was not able to hear the opening speeches during the early part of the debate on this new Clause. As I informed the right hon. Gentleman the Member for Huyton (Mr. H. Wilson), I had to attend an important meeting in the Prime Minister's room on a very large national issue. However, I was fortunate in missing only about half an hour of what has been a very interesting debate, during which a very large number of

    371
    speeches have been made from both sides of the Committee with, as sometimes happens—and Chancellors have to put up with it—a great measure of agreement between them.
    I should like just to recall to the Committee for a few moments the broad picture within which I have had to work this year. I can only repeat what I have said on other occasions, and I do so with great sincerity. I have budgeted for a Budget surplus of £450 million. I have made increases of £30 million in direct taxation and £27 million in indirect taxation. I have made no remissions. I thought it my duty to make none, though it is always much easier and more popular to do so. I made no remissions nor recommended any to the Committee, except upon one single type of tax where the effect would be, as I hope, and as I think all of us would hope, to tend to increase the total volume of savings, because in this inflationary situation it is savings which may be the biggest and most hopeful cure.
    Apart from that remission, there are only two other exceptions, if they can be called remissions, in the realm of family life, where the Family Allowances and National Insurance Bill will, of course, cost a few millions this year and more next year, and there will also be the cost of the increased allowance for the third child. Those are the three exceptions.
    Naturally enough, as always happens when we get to the Bill itself and come to our new Clauses, we have had new Clause after new Clause where both logic and sentiment sometimes would move the Committee to say that this ought to be given or that ought to be allowed. Sometimes the sums involved are very large. I say quite frankly that I think Chancellors from both sides find those cases the easiest to resist, because if the tax remission suggested involves about £50 million or £100 million it so clearly knocks the whole Budget about that, whatever good it might do, it is not really practical politics within the framework of the Budget.
    The smallest ones are, perhaps, the most difficult. The argument is, "It is not a very big thing; it will not cost very much. It is rather mean to resist it. It will not be a precedent; we promise the Chancellor that if it is given in this case
    372
    nobody else will use it to try and get the same benefit for something analogous." Although I am sure that those promises are given in good faith, that has not been my experience. My experience has been that if any kind of concession is given to anybody, everybody else then tries immediately to prove that he ought to be in that category. We had that same state of affairs even in regard to savings, where people came along and said that they ought to be in it, too. As I say, the smallest cases may sometimes be the most difficult for that very reason.
    Apart from Entertainments Duty, we have had new Clause after new Clause, designed to assist worthy causes, which I felt it right to advise the Committee not to accept. Now we come to this matter of Entertainments Duty. We had arguments, first, on behalf of the cinema, particularly the small cinema, arguments which were very well presented. It was said that not so very much is involved, only a few millions. Then we had sport. There were certain discriminations there; some hon. Members disapproved of one sort of sport while particularly favouring their own, and, again, the argument was that it was not such a very large matter, a million or two, and it would not hurt the Budget.
    Today, we come to the one which, I am bound to say, presents the strongest and best argument of all—the living theatre. We are told that only about £1½ million is involved; it will not affect the Budget. No one of these, of course, or, indeed, two or three, would affect the mathematical balance of the Budget or what the surplus will be next year. It will not do that. It would be foolish for me to say that.
    Nor would I try to argue that I am satisfied with the Entertainments Duty as I find it. It was created during the war and carried on by Chancellors of the Exchequer after the war. It has a great many difficulties and anomalies in it. It is a tax on a great many different kinds of entertainment, and, meanwhile, there have grown up different rival forms of entertainment which have created quite a new situation. I think that there may even be anomalies there in that some of these entertainments—I mean the new ones—are not so heavily taxed as others. Therefore, I say quite frankly that I do not pretend that a million or two here and there—although, if all these millions

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    were added one to the other, they would come to quite a large sum—would absolutely overthrow the balance of the Budget.
    Nor am I going to pretend that this tax in its present form is altogether satisfactory. I think that my hon. Friend the Member for Southgate (Sir B. Baxter) and the hon. Member for Nottingham, West (Sir T. O'Brien) both put this in a most moderate form. I did not hear the speech of the hon. Member for Southgate, although it was reported to me, but I had the pleasure of hearing the speech of the hon. Member for Nottingham, West. I do not think that they claimed that the difficulties of certain parts of the theatre or certain forms of the theatre were really created solely by the tax. All kinds of things are happening in the world of entertainment. Nor would they pretend that all which comes under the name of the living theatre is Shakespearean performance or the high drama of which hon. Members have spoken. Quite a lot of it is not that, although a lot of it is. I also do not pretend that whatever may be the difficulties of the theatre they are made easier by their having to bear tax. Of course that is not so.
    I will be absolutely frank with the Committee, as I have been throughout. I have great sympathy with the case which has been put and I do not pretend that if this concession were granted it would overthrow the balance of the Budget. At the same time, I have resisted all the claims put forward for the same reasons, and I must ask the Committee to do so on this broad, general ground.
    I do not think that it would be fair for me to select this one or that one. We are engaged in a very difficult operation. Perhaps it will succeed; perhaps it will fail. I believe that it will succeed. My hopes for this year may prove illusory—I do not know—but I believe that there is a great measure of agreement in our country, perhaps greater than ever before, about some of the broad problems that confront us as a people. I believe that we are going to succeed. Even with all these cases of one kind and another—sport, Association football, the Rugby League, and the living theatre—I do not want to disturb the broad theme of the Budget.
    If this were a Budget in which tax concessions were being made—and I have
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    made none except in the field of savings, which has a quite different purpose—I could not resist some of the claims which have been so well argued. But that is not the theme of the Budget. It is in that sense austere because of the inflationary situation which we are trying to meet. I believe that we will overcome it, but I will say this. I flared up a little, and rightly so, over the matter of the pledge, because I feel strongly about the pledges that I give. I certainly will look very carefully at the structure of Entertainments Duty as a whole. I think that it will have to be remodelled.
    Ministers have their duty to do, but I do not believe that in its present form this tax can stand up to the serious criticism that is levelled against it. It will be a strong claimant for some relief when the time comes for relief, and I hope that that may be in the next Budget.
    Mr. John Rankin: Is that a promise?
    Mr. Macmillan: I shall come to that.
    I do not think that the Entertainments Duty as such, which brings in £40 million, is necessarily a very high claimant for total remission. There are much higher claimants than that when it comes to giving benefits or reduction of taxation. I do not think that the hon. Gentleman would claim it. Certain parts of it require refashioning and remodelling and certain parts could not sustain that examination; and this would apply particularly, I think, to the theatre. The tax as a whole is a big contributor to our taxation and it must broadly be sustained.
    8.45 p.m.
    Therefore, I give this pledge and I state it quite deliberately. I hope that this will be the last occasion on which it will be necessary for me or for Treasury Ministers to defend the tax upon the living theatre, or, indeed, the Entertainments Duty in its present form.
    When I say that it is a pledge, I am a careful man. I am fighting as hard a battle—I have had six months of it—as any man has taken on. We are going to succeed and I will not pledge except to say that when the time comes, as I believe it may well come next year, for making relaxations, instead of this austere building up of a surplus and building it even higher, there are certain parts of this tax,

    375
    of which the one we have been discussing today is a high claimant, which I will certainly see is part of that general reorganisation. That, I am sure, we can do.
    I ask the Committee, however, following the very broad lines which I have taken throughout the debate, which are not easy always to sustain against powerful arguments on an individual case, to
    accept them to the end and to let the example which we have made by this whole financial business this year be one which will be followed through the country and will succeed in its broad purpose.
    Question put, That the Clause be read a Second time:—
    The Committee divided: Ayes 206, Noes 243.

    Division No. 237.]

    AYES

    [8.47 p.m.

    Ainsley, J. W.

    Griffiths, David (Rother Valley)

    Orbach, M.

    Albu, A. H.

    Griffiths, Rt. Hon. James (Llanelly)

    Oswald, T.

    Allaun, Frank (Salford, E.)

    Hale, Leslie

    Owen, W. J.

    Allen, Arthur (Bosworth)

    Hall, Rt. Hn. Glenvil (Colne Valley)

    Padley, W. E.

    Allen, Scholefield (Crewe)

    Hamilton, W. W.

    Paget, R. T.

    Anderson, Frank

    Hannan, W.

    Palmer, A. M. F.

    Awbery, S. S.

    Hastings, S.

    Pargiter, G. A.

    Bacon, Miss Alice

    Hayman, F. H.

    Parker, J.

    Baird, J.

    Herbison, Miss M.

    Parkin, B. T.

    Balfour, A.

    Hobson, C. R.

    Paton, John

    Bellenger, Rt. Hon. F. J.

    Holman, P.

    Peart, T. F.

    Benn, Hn. Wedgwood (Bristol, S.E.)

    Holmes, Horace

    Price, J. T. (Westhoughton)

    Benson, G.

    Holt, A. F.

    Probert, A. R.

    Beswick, F.

    Howell, Charles (Perry Barr)

    Proctor, W. T.

    Blackburn, F.

    Hoy, J. H.

    Pryde, D. J.

    Blenkinsop, A.

    Hubbard, T. F.

    Randall, H. E.

    Blyton, W. R.

    Hunter, A. E.

    Rankin, John

    Boardman, H.

    Irvine. A. J. (Edge Hill)

    Redhead, E. C.

    Bottomley, Rt. Hon. A. G.

    Irving, S. (Dartford)

    Reeves, J.

    Bowden, H. W. (Leicester, S.W.)

    Isaacs, Rt. Hon. G. A.

    Reid, William

    Bowen, E. R. (Cardigan)

    Janner, B.

    Robens, Rt. Hon. A.

    Boyd, T. C.

    Jay, Rt. Hon. D. P. T.

    Roberts, Albert (Normanton)

    Braddock, Mrs. Elizabeth

    Jeger, George (Goole)

    Roberts, Goronwy (Caernarvon)

    Brockway, A. F.

    Jeger, Mrs. Lena (Holbn & St. Pncs, S.)

    Rogers, George (Kensington, N.)

    Broughton, Dr. A. D. D.

    Jenkins, Roy (Stechford)

    Boyle, C.

    Brown, Rt. Hon. George (Belper)

    Johnson, James (Rugby)

    Shinwell, Rt. Hon. E.

    Brown, Thomas (Ince)

    Johnston, Douglas (Paisley)

    Short, E. W.

    Burke, W. A.

    Jones, Rt. Hon. A. Creech (Wakefield)

    Shurmer, P. L. E.

    Butler, Herbert (Hackney, C.)

    Jones, Elwyn (W. Ham, S.)

    Silverman, Julius (Aston)

    Butler, Mrs. Joyce (Wood Green)

    Jones, Jack (Rotherham)

    Silverman, Sydney (Nelson)

    Callaghan, L. J.

    Jones, J. Idwal (Wrexham)

    Slater, Mrs. H. (Stoke, N.)

    Castle, Mrs. B. A.

    Jones, T. W. (Merloneth)

    Slater, J. (Sedgefield)

    Chapman, W. D.

    Kenyon, C.

    Smith, Ellis (Stoke, S.)

    Clunie, J.

    Key, Rt. Hon. C. W.

    Snow, J. W.

    Coldrick, W.

    King, Dr. H. M

    Sorensen, R. W.

    Collick, P. H. (Birkenhead)

    Lee, Miss Jennie (Cannock)

    Sparks, J. A.

    Collins, V. J. (Shoreditch & Finsbury)

    Lever, Leslie (Ardwick)

    Steele, T.

    Corbet, Mrs. Freda

    Lindgren, G. S.

    Stones, W. (Consett)

    Cove, W. G.

    Lipton, Lt.-Col. M.

    Stross, Dr. Barnett (Stoke-on-Trent. C.)

    Craddock, George (Bradford, S.)

    Logan, D. G.

    Summerskill, Rt. Hon. E.

    Crossman, R. H. S.

    Mabon, Dr. J. Dickson

    Swingler, S. T.

    Darling, George (Hillsborough)

    MacColl, J. E.

    Sylvester, G. O.

    Davies, Ernest (Enfield, E.)

    McGhee, H. G.

    Taylor, Bernard (Mansfield)

    Davies, Harold (Leek)

    McGovern, J.

    Taylor, John (West Lothian)

    Deer, G.

    McInnes, J.

    Thomas, George (Cardiff)

    de Freitas, Geoffrey

    McKay, John (Wallsend)

    Thomas, Iorwerth (Rhondda, W.)

    Dodds, N. N.

    McLeavy, Frank

    Thomson, George (Dundee, E.)

    Donnelly, D. L.

    MacMillan, M. K. (Western Isles)

    Thornton, E.

    Dugdale, Rt. Hn. John (W. Brmwch)

    Mahon, Simon

    Timmons, J.

    Ede, Rt. Hon. J. C.

    Mann, Mrs. Jean

    Tomney, F.

    Edelman, M.

    Marquand, Rt. Hon. H. A.

    Turner-Samuels, M.

    Edwards, Rt. Hon. John (Brighouse)

    Mason, Roy

    Ungoed-Thomas, Sir Lynn

    Edwards, Rt. Hon. Ness (Caerphilly)

    Mayhew, C. P.

    Usborne, H. C.

    Edwards, Robert (Bilston)

    Messer, Sir F.

    Viant, S. P.

    Edwards, W. J. (Stepney)

    Mikardo, Ian

    Wade, D. W.

    Evans, Albert (Islington, S. W.)

    Mitchison, G. R.

    Warbey, W. N.

    Evans, Edward (Lowestoft)

    Monslow, W.

    Weitzman, D.

    Evans, Stanley (Wednesbury)

    Moody, A. S.

    Wells, William (Walsall, N.)

    Fernyhough, E.

    Morrison, Rt. Hn. Herbert (Lewis'h, S.)

    West, D. G.

    Finch, H. J.

    Mort, D. L.

    Wheeldon, W. E.

    Forman, J. C.

    Moyle, A.

    White, Mrs. Eirene (E. Flint)

    Fraser, Thomas (Hamilton)

    Mulley, F. W.

    White, Henry (Derbyshire, N. E.)

    Gibson, C. W.

    Neal, Harold (Bolsover)

    Wilkins, W. A.

    Gooch, E. G.

    O'Brien, Sir Thomas

    Williams, David (Neath)

    Gordon Walker, Rt. Hon. P. C.

    Oliver, G. H.

    Williams, Rev. Llywelyn (Ab'tlllery)

    Grey, C. F.

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

    Williams, W. R. (Openshaw)

    Zilliacus, K.

    Woodburn, Rt. Hon. A.

    Willis, Eustace (Edinburgh, E.)

    Woof, R. E.

    Wilson, Rt. Hon. Harold (Huyton)

    Yates, V. (Ladywood)

    TELLERS FOR THE AYES:

    Winterbottom, Richard

    Mr. Pearson and Mr. Simmons.

    Younger, Rt. Hon. K.

    NOES

    Aitken, W. T.

    Glover, D.

    Macmillan, Rt. Hn. Harold (Bromley)

    Allan, R. A. (Paddington, S.)

    Godber, J. B.

    Macpherson, Niall (Dumfries)

    Alport, C. J. M.

    Gomme-Duncan, Col. Sir Alan

    Maddan, Martin

    Amery, Julian (Preston, N.)

    Gower, H. R.

    Maitland, Cdr. J. F. W. (Horncastle)

    Amory, Rt. Hn. Heathcoat (Tiverton)

    Graham, Sir Fergus

    Manningham-Buller, Rt. Hn. Sir R.

    Anstruther-Gray, Major Sir William

    Grant-Ferris, Wg. Cdr. R. (Nantwich)

    Markham, Major Sir Frank

    Arbuthnot, John

    Green, A.

    Marlowe, A. A. H.

    Armstrong, C. W.

    Gresham Cooke, R.

    Marples, A. E.

    Ashton, H.

    Grimston, Hon. John (St. Albans)

    Marshall, Douglas

    Atkins, H. E

    Grimston, Sir Robert (Westbury)

    Mathew, R.

    Baldwin, A. E.

    Grosvenor, Lt.-Col. R. G.

    Maude, Angus

    Balniel, Lord

    Gurden, Harold

    Maudling, Rt. Hon. R.

    Barber, Anthony

    Hall, John (Wycombe)

    Mawby, R. L.

    Barlow, Sir John

    Harris, Frederic (Croydon, N. W.)

    Maydon, Lt.-Comdr. S. L. G.

    Barter, John

    Harris, Reader (Heston)

    Milligan, Rt. Hon. W. R.

    Baxter, Sir Beverley

    Harrison, A. B. C. (Malden)

    Molson, Rt. Hon. Hugh

    Beamish, Maj. Tufton

    Harrison, Col. J. H. (Eye)

    Moore, Sir Thomas

    Bell, Philip (Bolton, E.)

    Harvey, Air Cdre. A. V. (Macclesfd)

    Mott-Radclyffe, C. E.

    Bell, Ronald (Bucks, S.)

    Harvey, Ian (Harrow, E.)

    Nabarro, G. D. N.

    Bennett, F. M. (Torquay)

    Harvey, John (Walthamstow, E.)

    Nairn, D. L. S.

    Bevins, J. R. (Toxteth)

    Harvie-Watt, Sir George

    Neave, Airey

    Bidgood, J. C.

    Hay, John

    Nicholls, Harmar

    Biggs-Davison, J. A.

    Heald, Rt. Hon. Sir Lionel

    Nicolson, N. (B'n'mth, E. & Chr'ch)

    Bishop, F. P.

    Heath, Rt. Hon. E. R. G.

    Nield, Basil (Chester)

    Black, C. W.

    Henderson, John (Cathcart)

    Noble, Comdr, A. H. P.

    Body, R. F.

    Hicks-Beach, Maj. W. W.

    Oakshott, H. D.

    Boothby, Sir Robert

    Hill, Mrs. E. (Wythenshawe)

    O'Neill, Hn. Phelim (Co. Antrim, N.)

    Bossom, Sir A. C.

    Hirst, Geoffrey

    Orr-Ewing, Charles Ian (Hendon, N.)

    Boyd-Carpenter, Rt. Hon. J. A.

    Holland-Martin, C. J.

    Page, R. G.

    Boyle, Sir Edward

    Hornby, R. P.

    Pannell, N. A. (Kirkdale)

    Braine, B. R.

    Hornsby-Smith, Miss M. P.

    Partridge, E.

    Braithwaite, Sir Albert (Harrow, W.)

    Horobin, Sir Ian

    Peyton, J. W. W.

    Brooke, Rt. Hon. Henry

    Howard, Hon. Greville (St. Ives)

    Pilkington, Capt. R. A.

    Browne, J. Nixon (Craigton)

    Howard, John (Test)

    Pitman, I. J.

    Burden, F. F. A.

    Hudson, Sir Austin (Lewisham, N.)

    Pitt, Miss E. M.

    Butler, Rt. Hn. R. A. (Saffron Walden)

    Hudson, W. R. A. (Hull, N.)

    Powell, J. Enoch

    Campbell, Sir David

    Hughes Hallett, Vice-Admiral J.

    Price, Henry (Lewisham, W.)

    Carr, Robert

    Hutchison, Sir Ian Clark (E'b'gh, W.)

    Prior-Palmer, Brig. O. L.

    Cary, Sir Robert

    Hylton-Foster, Sir H. B. H.

    Raikes, Sir Victor

    Chichester-Clark, R.

    Irvine, Byrant Godman (Rye)

    Ramsden, J. E.

    Cole, Norman

    Jenkins, Robert (Dulwich)

    Redmayne, M.

    Conant, Maj. Sir Roger

    Jennings, J. C. (Burton)

    Remnant, Hon. P.

    Cooper, Sqn. Ldr. Albert

    Jennings, Sir Roland (Hallam)

    Renton, D. L. M

    Cooper-Key, E. M.

    Johnson, Dr. Donald (Carlisle)

    Ridsdale, J. E.

    Cordeaux, Lt.-Col. J. K.

    Johnson, Eric (Blackley)

    Rippon, A. G. F.

    Corfield, Capt. F. V.

    Johnson, Howard (Kemptown)

    Roberts, Sir Peter (Heeley)

    Crouch, R. F.

    Jones, Rt. Hon. Aubrey (Hall Green)

    Robertson, Sir David

    Crowder, Sir John (Finchley)

    Kaberry, D.

    Robinson, Sir Roland (Blackpool, S.)

    Cunningham, Knox

    Keegan, D.

    Robson-Brown, W.

    Currie, G. B. H.

    Kerby, Capt. H. B.

    Rodgers, John (Sevenoaks)

    Dance, J. C. G.

    Kerr, H. W.

    Roper, Sir Harold

    Davidson, Viscountess

    Kershaw, J. A.

    Russell, R. S.

    D'Avigdor-Goldsmid, Sir Henry

    Kimball, M.

    Schofield, Lt.-Col. W.

    Deedes, W. F.

    Kirk, P. M.

    Shepherd, William

    Digby, Simon Wingfield

    Lambert, Hon. G.

    Simon, J. E. S. (Middlesbrough, W.)

    Donaldson, Cmdr. C. E. McA.

    Lancaster, Col. C. G.

    Smithers, Peter (Winchester)

    Doughty, C. J. A.

    Leather, E. H. C.

    Spearman, Sir Alexander

    Drayson, G. B.

    Leavey, J. A.

    Speir, R. M.

    du Cann, E. D. L.

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

    Spence, H. R. (Aberdeen, W.)

    Dugdale, Rt. Hon. Sir T. (Richmond)

    Legh, Hon. Peter (Petersfield)

    Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)

    Duncan, Capt. J. A. L.

    Lindsay, Hon. James (Devon, N.)

    Stanley, Capt. Hon. Richard

    Duthie, W. S.

    Lindsay, Martin (Solihull)

    Stevens, Geoffrey

    Eccles, Rt. Hon. Sir David

    Linstead, Sir H. N.

    Steward, Harold (Stockport, S.)

    Eden, J. B. (Bournemouth, West)

    Lloyd, Maj. Sir Guy (Renfrew, E.)

    Stoddart-Scott, Col. M.

    Errington, Sir Eric

    Lloyd-George, Maj. Rt. Hon. G.

    Studholme, Sir Henry

    Erroll, F. J.

    Longden, Gilbert

    Summers, Sir Spencer

    Farey-Jones, F. W.

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Taylor, Sir Charles (Eastbourne)

    Fell, A.

    Lucas-Tooth, Sir Hugh

    Taylor, William (Bradford, N.)

    Finlay, Graeme

    McAdden, S. J.

    Thompson Kenneth (Walton)

    Fisher, Nigel

    Macdonald, Sir Peter

    Thompson, Lt.-Cdr. R. (Croydon, S.)

    Fleetwood-Hesketh, R. F.

    McKibbin, A. J.

    Thornton-Kemsley, C. N.

    Fort, R.

    Mackie, J. H. (Galloway)

    Tilney, John (Wavertree)

    Fraser, Sir Ian (M'cmbe & Lonsdale)

    McLaughlin, Mrs. P.

    Turner, H. F. L.

    Freeth, D. K.

    Maclay, Rt. Hon. John

    Vane, W. M. F.

    Gammans, Sir David

    McLean, Neil (Inverness)

    Vickers, Miss J. H.

    Garner-Evans, E. H.

    MacLeod, Rt. Hon. Iain (Enfield, W.)

    Vosper, D. F.

    George, J. C. (Pollok)

    MacLeod, John (Ross & Cromarty)

    Walker-Smith, D. C.

    Gibson-Watt, D.

    Wall, Major Patrick

    Williams, Paul (Sunderland, S.)

    Woollam, John Victor

    Ward, Hon. George (Worcester)

    Williams, R. Dudley (Exeter)

    Ward, Dame Irene (Tynemouth)

    Wills, G. (Bridgwater)

    TELLERS FOR THE NOES:

    Waterhouse, Capt. Rt. Hon. C.

    Wilson, Geoffrey (Truro)

    Mr. Bryan and Mr. Hughes-Young.

    Webbe, Sir H.

    Wood, Hon. R.

    Mr. H. Wilson: I beg to move, That the Chairman do report Progress and ask leave to sit again.
    My purpose in doing so is not, as might be thought, to draw attention to the dwindling and diminishing majority which the Government were able to command on the last Division, but for a specific purpose which, if met, would find me more than willing to withdraw this Motion very quickly. For the last two days, and indeed for part of last week, we have been debating a series of new Clauses on the subject of Entertainments Duty, and there are still on the Notice Paper a number of new Clauses bearing on Entertainments Duty.
    In all these debates, the Treasury spokesman who has replied has made light of the revenue involved, except in the big proposal about cinemas, but in each case has expressed great difficulty about giving way to what were admitted on all sides of the Committee to be reasonable proposals on entirely different grounds. In the case of small cinemas, in the case of sports and in the case of the living theatre, the revenue involved was such, as the Chancellor himself frankly admitted a few moments ago, that they would not one way or the other affect the balance of his Budget.
    In each case, the Treasury spokesman has given the impression that the Chancellor finds the system of the Entertainments Duty now so rickety, so riddled with anomalies, inconsistencies and almost indefensible absurdities, that it would be impossible, as he feels—we do not agree with him—to give way to a particular Amendment without creating new anomalies, further demands for concessions and increasing the indefensible nature of the Entertainments Duty system. In these circumstances, and with the idea of facilitating our future progress, because, as I have said, we have other Amendments on the Notice Paper, I want to make a suggestion to the Chancellor which I should think would find him in a receptive mood for once.
    In his concluding words on the last proposed new Clause, apart from going a very long way towards anticipating his next Budget statement in a surprising
    380
    way—not the next one, because the Chancellor was referring to next year; he did seem to give a fairly clear commitment for next year—he had some very strong and I think well-considered words to use about the whole structure of the Entertainments Duty. I have thought for many years that the time is now ripe for a full-dress inquiry into the whole system of Entertainments Duty by an independent committee.
    The Chancellor has pledged himself to go very deeply into the issues raised about Entertainments Duty during the next year. He is a very busy Minister, as he has made clear tonight, and we fully understand that. I am sure that it would be the view of all sides of the Committee that the best way in which the matter could be considered would not be by busy Treasury Ministers or by Customs and Excise officials, whose views are to some extent affected by the system which they have been running, very competently but with great difficulty, over a period of time, but by a Royal Commission, a Departmental committee or whatever such body might be appropriate.
    9.0 p.m.
    I would not necessarily suggest that such a committee, in its terms of reference, should be empowered to play about with the total yield of the revenue. There are so many inconsistencies and anomalies now that the system needs looking at as a whole on different assumptions about revenue. I should be grateful if the Chancellor would tell us that he will consider this suggestion. I do not expect him to announce tonight the establishment of a committee of inquiry, but if he will consider the suggestion it will not only give confidence to those on both sides of the Committee who feel very strongly that the system is breaking down but it will ease the right hon. Gentleman's own labours in the Treasury and those of his officials, and enable us, when next we debate Entertainments Duty, whenever it may be, to do so with the benefit of the advice of an expert committee.
    Mr. H. Macmillan: The right hon. Gentleman the Member for Huyton (Mr. H. Wilson) has taken rather au unusual

    381
    course, but he was good enough to warn me that he intended to do so, and I understand that after this interchange we shall resume our business on the rest of the Bill.
    I shall, of course, consider what he has said. I do not think, if I might humbly say so, that the appointment of a Royal Commission would be likely to produce anything that would affect the next Budget, or indeed probably two or three Budgets after that. I am rather surprised at this dilatory suggestion from the right hon. Gentleman. I regard it as one of a wrecking character. I do not know how he will get away with it with his hon. Friends, for he has put forward what is clearly a wrecking proposal. But, taking it at its best, I am not frightfully attracted by the idea of a Departmental committee. That is a very peculiar kind of proposal for a matter of this kind.
    I undertake to enter into a complete review of this tax and if, God willing, it is my duty to present the result to the House, I propose to keep the inquiry in my own hands and to take charge of it myself. That I will do, and I will see that that inquiry is set about forthwith.
    Mr. H. Wilson: That is a very disappointing reply—[HON. MEMBERS: "Oh."]—a very disappointing reply. The right hon. Gentleman has been telling us for months that he was conducting a personal inquiry into Entertainments Duty, and tonight a large number of hon. Members opposite have voted against the clear statement of their convictions—and this is evidence of how unsatisfactory this sort of procedure has been in the hands of the present Chancellor.
    I suggested the idea of an inquiry. It is true that a number of Royal Commissions have taken a long time to report, and the present Government have taken even longer to act upon those Reports when they have had them. but that was not the purpose of my suggestion. The Chancellor appeared to have some doubt about what a Departmental committee is, but he will find that the setting up of Departmental committees was a practice followed by his predecessor on a number of occasions.
    We know how difficult it is for the Chancellor to follow any precedent set by his predecessor, but it will be recalled that in 1952 we debated Purchase Tax,
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    and a number of difficulties were raised about, for instance, the question of uplift, on which I am sure the Chancellor is a great authority, the question of the loss on trading stocks, and all that sort of thing. On that occasion, the Hutton Report of the Committee on Tax-paid Stocks and again, in 1953, the Grant Report of the Purchase Tax (Valuation) Committee were produced well within the year and were of great value to the House. So I shall be very surprised if the Chancellor, when he comes to examine this suggestion, will find that it is anything but a good one. However, we welcome the fact that the Chancellor is apparently once more in jovial mood, which is somewhat of a change from what we have seen of him recently, and he has obviously enjoyed the opportunity of considering the suggestion. I hope that he will consider it more seriously than he has done tonight. In that hope, I suggest that, even if I have received no undertaking, we should now end this little armistice and resume hostilities. I beg to ask leave to withdraw the Motion.
    Motion, by leave, withdrawn.

    New Clause.—(REDUCTION OF PURCHASE TAX FROM 5 PER CENT. TO ¼ OF 1 PER CENT.)
    Part I of the Eighth Schedule to the Finance Act, 1948 (as amended by subsequent enactments and by order of the Treasury under section twenty-one of that Act) shall have effect with the substitution for the words "5 per cent", whenever those words occur, of the words "one-quarter of one per cent".—[Mr. Albu.]
    Brought up, and read the First time.
    Mr. Albu: I beg to move, That the Clause be read a Second time.
    The Chairman: It might be convenient if, with this new Clause, we discussed the one immediately following in page 3806 and the three in the middle of page 3808, all of which go together, namely, "Reduction of purchase tax from 10 per cent. to ¼ of 1 per cent.", and "Reduction of purchase tax from 30 to 20 per cent.", in the name of the right hon. Member for Huyton (Mr. H. Wilson) "Reduction of purchase tax from 60 to 50 per cent.", in the name of the hon. Member for Stechford (Mr. Roy Jenkins); and "Reduction of purchase tax from 90 to 75 per cent.", in the name of the hon. Member for Hammersmith, North (Mr. Tomney).
    Mr. Albu: This new Clause proposes a reduction of Purchase Tax from 5 per cent. to one quarter of 1 per cent. and we agree that it should be taken together with other new Clauses which deal with a reduction in the rates of Purchase Tax. I shall deal with this and the following new Clause which deals with a reduction of Purchase Tax from 10 per cent. to one quarter of 1 per cent. and a number of my hon. Friends will deal with the other rates of tax. I suppose that it is perfectly clear to those who are experienced in the ways of this Committee that the new Clause to amend Purchase Tax is intended to have the effect of abolishing it in these cases, but, under the Money Resolution, it would have been out of order to have moved that.
    These two rates of 10 per cent. and 5 per cent. were introduced by the Chancellor's predecessor in that famous post-Election Budget, last autumn. The contribution of the Lord Privy Seal towards our economic progress at that time—and, presumably, this policy continues—was the introduction of Purchase Tax on all articles of clothing and all articles of furniture.
    Previously, many of these essential items had been altogether free of tax. I remember that as soon as the then Chancellor came to this part of his Budget statement, I turned to one of my hon. Friends and said that this proposal meant a sales tax and as the debates on the Finance Bill proceeded last year it became clearer and clearer that the Lord Privy Seal was moving in that direction. Subsequently, there were speeches from Government spokesmen and others clearly indicating the Government's intention to move as fast as they could towards a sales tax.
    It is not very easy to follow the policies which the large number of successive Ministers in the Government have introduced and I do not know whether the present Chancellor of the Exchequer intends to continue his predecessor's policy of moving towards a tax on all articles purchased by the consumer, however necessary they may be. This is what we are dealing with in the first two of the proposed new Clauses now under discussion. The two levels of Purchase Tax dealt with in the two Clauses cover the basic essentials of ordinary domestic life, other than fuel and power and housing.
    384
    They cover practically all clothing, boots, shoes, handkerchiefs, braces, furniture, pillows and mattresses.
    I want to make it clear that I am not arguing against Purchase Tax as a whole. I know that there are differences of opinion upon this matter, but I am not against Purchase Tax as it has been applied in the past. I can see that under certain conditions there is a case for a high Purchase Tax on luxury goods, and I am not against the use of the tax when it is necessary to encourage the export of certain types of goods or to release resources which might be needed for export purposes. But I must tell the Economic Secretary that this is a very clumsy method of planning, and it has to be used with very great care.
    I do not want to keep going back to what the Economic Secretary may consider to be my "King Charles's head". but the method of allowing an industry—especially a mass production industry—to expand and consume a very large part of our economic resources, and then to clamp down upon it an enormous increase of Purchase Tax afterwards, is an extraordinary way to run a railway or an economic system. That is exactly what the right hon. Gentleman and his hon. Friends did with the motor industry and many of the other consumer goods industries. My hon. Friends who represent Stoke constituencies will have something to say about what was done very suddenly in the case of the pottery industry.
    I am not against changes if they can be made in such a way as to enable an industry to adjust itself in time, but how an industry can be expected to foresee unexpected shifts of Government economic policy I do not know. In modern industrial conditions, with the high cost of capital equipment required, especially in mass production industries, it is certainly quite impossible for industry to adjust itself as rapidly as hon. and right hon. Members opposite apparently expect.
    At the moment I wish to concentrate my remarks upon what I call the sales tax—the 10 per cent. and 5 per cent. tax upon essential goods. The Economic Secretary will be aware that some of us who are concerned with the furniture industry have had discussions with the President of the Board of Trade upon the

    385
    matter. I would remind him that the Government's actions towards this industry have taken place not only in the realm of Purchase Tax but also in extremely severe changes in the hire-purchase regulations. This has had a particularly serious effect upon the furniture industry, because of the abolition of the consolidated agreement, by means of which a purchaser could continue to furnish his house without having to pay another down payment.
    The young married couple, now furnishing their home for the first time, find themselves in the serious position, first, of being faced with a very heavy down payment and a shorter period of repayment, so that they cannot do what many working-class families have done hitherto, namely, furnish one or two rooms year by year until their house is full without having to find money for a further down payment, and, secondly, of being subject to a tax which certainly never existed in the period of the Labour Government, a tax upon furniture of the type mainly bought by ordinary working-class people. As soon as these young couples start to have children they will find that they are paying a great deal for their children's clothing, and if they make the clothes themselves they will have to pay a 10 per cent. tax upon the fabric.
    9.15 p.m.
    I sometimes wonder whether the middle-class grumblers—who have been abstaining at Tonbridge, writing to the Press, and forming the various sorts of Poujadist bodies which we now see spending someone's expense accounts to advertise in the papers—realise that they are paying a 5 per cent. tax on practically every piece of ordinary domestic equipment or clothing which they buy; and that this tax was put on by the present Government as part of the Economic Secretary's policy of filling up the "yawning gap" in taxation of which we were reminded last year, and lowering the cost of living by raising the price of goods.
    The Economic Secretary to the Treasury (Sir Edward Boyle): The hon. Gentleman is muddling up "the yawning gap" with "Boyle's law," but I will correct that later.
    Mr. Albu: I thought that I was, and it might have been the Financial Secretary's policy. Whether it was "Boyle's law" or the filling of a vacuum I am not certain. Nevertheless, it was clear that the Economic Secretary agreed with the idea that if there were a lot of goods on which there was no tax, then there ought to be a tax, and one was put on.
    It is extraordinary that if one goes into a shop to buy an article of clothing a piece of furniture—although one will not discover it, because there is nothing in the price to indicate it—there is, in fact, a tax on every piece of furniture and article of clothing or item of footwear, and even on the braces and handkerchiefs which, at any rate, gentlemen carry about with them. They are all subject to tax, and the price of these essential goods, and, therefore, the cost of living, to that extent was put up by this Government. It is just as well that people should understand that.
    The arguments for the removal of the tax on these essentials are overwhelming. I will not tear the heart strings of hon. Members—indeed, I am not sure that I am capable of doing so—but it is absolutely obvious that a tax on essentials such as this, which we have never had before, is a tax which only a Conservative Government could impose, and it is time that it was removed. It is obvious that it has not stopped inflation or in any way cured the serious economic situation which led us to a number of Budgets last year.
    Undoubtedly, together with the other changes which have been made in subsidies, and so on, it has had the effect of stimulating demands for wage increases. Therefore, it is no use arguing that the effect of removing a subsidy amounts to only a 1s. or 2s. or 3s. a week, because the point is that small changes of this sort often set off large demands.
    Mr. C. R. Hobson: A chain reaction.
    Mr. Albu: And as my hon. Friend says, there is a chain reaction.
    There is no doubt that what the Government did last year—when the Lord Privy Seal obviously got into a complete panic and realised that he would have to recover from the situation into which he put himself before the General Election

    387
    —has done enormous harm. Of course, it would be impossible now to distinguish between items, but, so far as I can see, the items which come under the 10 per cent. and 5 per cent. section are all essential items in household consumption and on those I hope that the Purchase Tax may be abolished. It never existed previously, because there was never before such a tax on those articles, over during the war.
    I suggest to the Economic Secretary that he could do more good for the economic situation by trying to reduce the cost of living in this way than by continuing a tax which is an affront to almost every consumer.
    Mr. Geoffrey Hirst: I am glad of the opportunity to follow the hon. Member for Edmonton (Mr. Albu), as I have often done in these debates. I wish to refer to the second of the Clauses which we are discussing, that in the name of the right hon. Member for Huyton (Mr. H. Wilson) and his hon. Friends, which is in line, except for one-quarter of 1 per cent., with one which I put down that was not selected. It was put down in that form for the same reason as was the Clause to which the hon. Member for Edmonton was addressing himself, in order to conform with the Money Resolution. Connected with a woollen textile industry constituency, as I am, I felt somewhat hurt in this battle of the Purchase Tax.
    The problem dates back to 19th April last year when the then Chancellor of the Exchequer announced the great concession of a reduction from 50 per cent. to 25 per cent. Purchase Tax on piece goods and household textiles of a non-wool character. That was clearly done to help the cotton and Northern Ireland linen industries, but it extended much wider than that.
    It is important to remember that the D scheme was then in force. The Wool Textile Delegation, the senior federation representing about eight associations in the industry, not only in Yorkshire, where my constituency lies, but in other areas such as the West Country and Scotland, drew the attention of the Chancellor to this situation. It was said at the time by my right hon. Friend the Financial Secretary to the Treasury that the concession to non-wool cloth could not be
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    extended. We were all somewhat amazed when, only two weeks later, the Purchase Tax in respect of that group was removed altogether at quite a large cost.
    We naturally expressed our disappointment at the exclusion of wool, and I did so personally by writing to the Prime Minister at the time. That disappointment was shared very wide and far, because the wool-growing Dominions expressed their disturbance of mind at the same time and urged the removal of the discrimination. In the debates that we had on the autumn Finance Bill about last October, I naturally drew attention to the facts. Steps for the removal of the D scheme and for alteration in the Purchase-Tax rate in this group were then taken, whereby the rate for made-up clothing became 5 per cent.—and I believe for furniture too—and the rate for wool cloth sold as piece goods became 10 per cent. All non-wool cloth remained exempt altogether.
    That is the whole bone of contention, which has been mentioned more than once in the Committee. Naturally I drew attention to the discrimination against wool in the Committee stage of that Finance Bill, when, on 16th November, I am sorry to say, I got rather a dusty answer—[HON. MEMBERS: "Oh."]—yes, a very dusty answer to which I referred when I raised the matter again in the Budget debate on 18th April this year. Let me remind the Committee that the then Chancellor of the Exchequer, on the earlier occasion, replied to my appeal for fair treatment for the woollen industry by saying:
    "We find a complete difference between the cotton and wool situation, Owing to the numerous small tailors who make up the wool cloth."—[OFFICIAL REPORT, 16th November, 1955; Vol. 546, c. 623.]
    Then I asked—and I must ask the question again tonight—why so little account has been taken of the tailors and dressmakers who make up the non-wool cloth. The Chancellor of the Exchequer and I suppose the Customs and Excise Department always make great play with the danger of treating wool equally, because of the vast number of small tailors.
    To get nearer the centre of this argument I put down on 17th May this year a whole range of Questions for written answer to the Financial Secretary to the Treasury. They are in Vol. 552 of HANSARD, C. 183. I will not repeat them now.
    Mr. Donald Chapman: Why not?
    Mr. Hirst: Because I have given the HANSARD reference, and I am trying to give quickly the facts of the case. I asked the number of firms carrying on business as tailors as well as dressmakers, how many were required to be registered for Purchase Tax and how many had not been required to be registered. I got a very vague reply. [HON. MEMBERS: "Shame."] This is very important, as I think hon. Members will agree. We must have facts.
    The reply indicated, as I had already reason to believe, that a strong case for discrimination did not and does not exist. The Answer was involved and no better source was given me than the Census of Production, 1951. Even that source was conveyed to me after the cautionary words, "no precise figures are available." That source of all knowledge—or is it guesswork?—apparently estimated that the number of firms or persons carrying on the type of business in the group which we are discussing tonight—bespoke tailors and dressmakers—was 10,000. Firms with more than ten employees numbered 2,500 in tailoring and there were 1,200 in dressmaking.
    I was informed:
    "it is not possible to make a similar division in the case of the smaller firms.
    Of the total about half are registered for Purchase Tax. The rest consist mainly of the smaller tailors. The number of dressmakers liable to registration who have not been registered is very small."—[OFFICIAL REPORT, 17th May, 1956; Vol. 552, c. 183.]
    I suggest that is a colander-like case to have produced to sustain this inexorable attitude to the wool trade. Incidentally, it is the very best individual dollar-earning trade.
    I was so concerned about this matter that I explored it further by sending a letter to the Financial Secretary on 1st June asking for information. I got a reply this morning which I will not read to the Committee, but an extract from that letter states:
    "The picture as regards registration is drawn from a quite unrelated source. It is necessarily rather vague, as here again precise figures arc not available. The registration of persons for purchase tax is dealt with locally, and sufficient information is not available centrally to enable the number of registered tailors or dressmakers to be extracted."
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    I am sorry to bring up this Question and to embarrass my right hon. and hon. Friends—[HON. MEMBERS: "Go ahead."]—but it is not good enough. It is not good enough for a delegation from the textile trade—people who are highly respected at the Treasury and the Board of Trade—to be told that it is impossible to do anything about this quite inexplicable discrimination against this group. I am sure the hon. Member for Keighley (Mr. Hobson) will agree that it is quite inexplicable that the Treasury should argue that it is not possible to do anything because of some enormous difficulty in segregating tailors and dressmakers from the rest.
    At the end of this quite appalling letter, I got the pontifical exuberance:
    "It is for this reason that, although precise figures are not available, it can be said with assurance that the number of such firms which are liable for registration but have not been registered is very small."
    There is not a shred of evidence either in that letter or in the dozens of communications—I have files full of telegrams and letters from Ministries, textile firms and the Wool Textile Delegation and about meetings with the President of the Board of Trade, with this Chancellor and that Chancellor, this Financial Secretary and the other Financial Secretary—which can possibly produce a single iota of evidence—nor can the Economic Secretary—which indicates to the wool textile trade that it is getting justice in this group.
    My right hon. Friend and his helpers must forgive some strongish protests from me on this matter. It is a burning question in all the wool areas—not only in Yorkshire, but in Scotland, the West Country and everywhere else where this industry flourishes, to the great benefit of our country. The importance of the question is not to be measured in terms of money alone; it is a matter of principle and of fairness.
    9.30 p.m.
    I put down another Question which my right hon. Friend answered on 17th May, 1956, in which he told me that the estimated yield of Purchase Tax on sales of wool piece-goods in group 6—that is the group we are discussing—for the year ended 31st March, 1956, was only about £2 million. That is what they get from the whole shooting match. It does not relate to this case which I have always

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    argued—this small amount which would not be paid if this product were placed on the same basis as others in the same group. Less than half that sum is involved—probably much less than half, if more attention is given to the views of the trade, which it has offered to the Chancellor and to the Treasury, but to which, I assume, under pressure from the Customs and Excise, they are unwilling to listen.
    That is not good enough. May I urge a further and fuller consultation with the trade—provided that such consultation is based upon a genuine aim to remove this discrimination? I am not satisfied that that aim and object has ever been present, at any rate in the minds of officials when they have investigated this matter. I object to the Iron Curtain attitude of my right hon. Friend in this matter, and ask that it should be raised.
    Had it been possible tonight to have tabled a new Clause on this subject alone I should have done so and supported it, if necessary in the Lobby against the Government. Party loyalty is all very well, but it is intolerable that anyone should be pressed to party loyalty in a matter where the Government cannot be supported by a shred of evidence which any member of the trade, with his knowledge, can accept as reasonable.
    I do not think anybody has been more reasonable than the Wool Textile Delegation. My right hon. Friends cannot be unmindful of the helpful attitude to the Treasury and the Board of Trade of the association to which I referred and of the absence of a strong Parliamentary lobby forever plaguing their lives. We feel that the trade should be given some encouragement by the Government meeting this matter of a few hundred thousand pounds and not niggling away at an industry which has served the country well. I have no hesitation in pressing this matter, and I am only sorry that the width of the new Clause, involving many millions of pounds, which I could not call upon my right hon. Friend to accept, prevents me from supporting my attitude, as I wish and desire, in the Lobby.
    Mr. Frank Tomney: When I listened to the hon. Member for Shipley (Mr. Hirst) I was reminded of some words I read somewhere to this effect, that persuasion seeks
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    its objects when force is inadmissible and reason ineffective.
    I want to persuade the Economic Secretary tonight to accept the new Clause standing in the name of my hon. Friend the Member for Keighley (Mr. Hobson) and myself, which is worded in very moderate terms, deliberately, in an effort to afford some relief to an industry which can by no means be termed a luxury industry. It suffers from the highest rate of tax—a penal tax of 90 per cent. on the industry manufacturing articles in Group 31; and it has been afforded no relief at all, despite the fact that when a few years ago overtures were made by the Goldsmiths' and Silversmiths' Association, by the cutlery trade of Sheffield and by the jewellery and fancy trade of Birmingham, certain reliefs were afforded to them. At that time this industry, manufacturing the articles in this group, was afforded no relief at all, and when, in the autumn Budget last year, the additional tax was reimposed on certain articles of costume jewellery, the tax on these articles was raised to 90 per cent.
    This industry is quite new to this country. It was brought to us from the Continent during the war and, like many such other industries, it has prospered since. It has proved a very valuable dollar earner and has also proved of great value to the sterling area because of the amount of capital invested in it, the number of men it employs and its capital turnover. In the search for new markets and in the changing trade conditions which we will be forced continually to face it would be silly to ignore this industry.
    The new skills which have been developed, the apprenticeship systems which have been inaugurated and the recent developments in and observance of trade union conditions are all matters which affect some of my constituents who are in this industry, and who are now faced with unemployment as a result of the penal code of taxation. I ask the Economic Secretary to listen carefully to my argument, and to afford this modest relief by reducing the tax to 75 per cent. so that this section of the industry has a chance to live.
    This is a tax not only on British skill, ingenuity and design, but also upon our women, especially our young women.

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    The articles made by this industry are selling in the range of 5s. to about £5. They are by no means luxury articles. A powder compact is an absolute necessity for any woman. The Economic Secretary, as a bachelor, may not understand this, but many people do, and if he wants consultation he could consult his hon. Friend the Member for Belfast, West (Mrs. McLaughlin). In some cases it takes 12 months to complete the designs and patterns, and the necessary etching and the draughtsmanship sometimes take two years to complete, during which period there is no financial return on the article concerned.
    If the industry is to hold its own in the export field a stable home market is essential, but figures supplied by the trade indicate that British home sales have fallen by 70 per cent. Export sales, which have to compete with the products of America, Germany and Japan, have fallen by 30 per cent. The trade requires some guarantee of stability in the home market in order to keep its technical and engineering staff fully employed year in and year out while turnover is being built up. A survey of the great United States market west of Chicago, and in Kansas City and other centres of population where there are about 35 million people, all anxious to buy British goods, shows that in the departmental stores very few British goods of any character at all are on sale.
    The Economic Secretary must be aware of the great difficulty of getting British capital goods into the United States, because of the insistence of the American manufacturers, under the Battle Act and other legislation, that the American public should buy from American manufacturers. These articles are important dollar earners for this country. In the changing circumstances of world trade, it is important for us to secure and maintain any opportunities for trade that we can.
    This concession will amount to a modest reduction of 15 per cent. Exact figures are not available to the Chancellor. I put a Question down, asking what would be the amount the Treasury would lose by making this concession, but the right hon. Gentleman could not sub-divide the various categories and give me the exact figures. From figures available to me, it does appear that the figure is no less than £300,000 a year. This
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    industry is a small one. It needs a stimulus to keep it growing. Its sterling and dollar earning capacity bears no relation to its size. Its work is well worth while, and relief to it is long overdue, particularly having regard to the fact that it has had no relief when other sections of industry wore granted some concession.
    The position now is that retailers, jewellers and fancy goods retailers are refusing to tie up capital in stocks carrying 90 per cent. tax on their shelves. That is understandable; no man in business will be persuaded to tie up stocks carrying 90 per cent. Purchase Tax.
    There is no longer any justification for this level of taxation. If the Economic Secretary likes, I am prepared to argue that he should remove this particular tax to paragraph (b) at the rate of 30 per cent., which, in my opinion, would be a better thing to do. In any event, I appeal to him quite seriously to reduce this tax to 75 per cent. This industry is a growing one; it is getting on its feet; it employs British skilled tradesmen and engineers, die-sinkers, designers, engravers and enamellers. It is putting into operation a pension scheme, and it gives good rates and conditions. Having regard to conditions throughout other sections of British industry, notably the motor car trade, it is particularly important for us as a nation to have other jobs in which our skilled men may work.
    We cannot afford to lose a single industry, particularly in engineering. In places like Coventry, Birmingham, or Sheffield where engineering is more concentrated than, for instance, in London, conditions may well become more difficult. In London, there is a multiplicity of small industries, though not all of them are working at the same level. This industry has been making great headway; it has valuable dollar markets to explore, but it cannot explore them unless there is a stable home demand and a lower level of this penal tax. If the Chancellor is really serious about promoting prospects for British industry and trade, he should grant the modest relief for which we ask.
    Mr. F. A. Burden: Most hon. Members on both sides of the Committee have for some time now taken part in these Purchase Tax debates. Through the years, the main purpose of our debates, whether they have been when

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    hon. Gentlemen opposite were in office or during the present Government's period of office, have been to get Purchase Tax reduced as much as possible. Indeed, anyone who knows anything about this tax would, I think, agree that it would be probably the most popular measure any Government could introduce. These new Clauses are obviously aimed at its removal.
    I would like again to state my own position quite clearly. I believe Purchase Tax to be fundamentally an extremely bad tax and I shall certainly go on hoping that it will ultimately be completely removed. I know that hon. Members on both sides will hope for the same thing, and will press for that result to be brought about. But that is just not possible at this time. Hon. Members opposite know that just as well as hon. Members on this side of the Committee. It may be possible to bring about some adjustments, and here I would certainly agree with the hon. Gentleman the Member for Hammersmith, North (Mr. Tomney), who asked that the Treasury and my right hon. Friend the Chancellor of the Exchequer should watch very carefully the high taxes which may from time to time be operating to the detriment of certain small-scale industries.
    9.45 p.m.
    The hon. Member for Hammersmith, North referred particularly to the type of manufacturer who is engaged in the production of compacts, and so on. He stated that today these articles are necessities but they carry 90 per cent. Purchase Tax. I would point out that when hon. Members opposite were in power they carried 100 per cent. Purchase Tax. I know the difference is only 10 per cent., but it is less than when they were in power. I make no quarrel with the fact that they have tried to get the Purchase Tax reduced still further, and, of course, I would like to do the same.
    I think that the hon. Gentleman was on weak ground when he said that because the Economic Secretary is a bachelor he probably would not know very much about the use that is made of compacts. It is true that married men know the reason for their use, but, equally, I am sure that when I was a bachelor I was very interested in the benefit which their use gave to ladies'
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    cheeks. I am quite sure that my hon. Friend is no less interested than I was when I was his age.
    The hon. Gentleman also said that in certain industries the home sale of goods which could be exported had fallen. One of the purposes of the Chancellor's present policy is to cut down and reduce as far as possible the home demand for articles that can be sold in the export markets. It may be that there is increased competition abroad also in some commodities and that their sales overseas too have gone down. The difficulty is this. As soon as some manufacturers found intensified competition by German and Japanese and other foreign manufacturers they would switch their production to, and concentrate much more upon, commodities for home consumption, thereby losing still more exports if this tax were not maintained. I must fundamentally disagree with him when he said that in America he had found it very difficult to find a great many goods of character in the shops there. I happen to have quite a lot of knowledge of the American export market and the consumer goods going there. When he and other hon. Gentlemen go to America I suggest that they should look through the stores and see the Wedgwood and Minton china and the British knitwear and shoes and woollens that are there, and which are successfully competing with other manufacturers.
    Mr. Tomney: I referred specifically to those areas in the Middle West of America. Unfortunately, most British salesmen seem to go no further than New York, when they should be concentrating on Chicago and Kansas City. I referred to the fact that there was a vast market among the 35 million people in the Middle West. I went into store after store and found very few British goods of any type when I inquired for them.
    Mr. Burden: If that is so, then the hon. Gentleman is making the Chancellor's case for enforcing his policy. If this enormous market exists in America and in the Middle West, where our goods are wanted, I suggest that if manufacturers cannot sell their goods freely at home the hon. Gentleman and others should tell them that this vast export market exists and encourage them to go there, and improve our export position.
    Mr. Tomney: I suggested that the design and manufacture of these products from the time of development to sale in the shops sometimes took 12 months or longer, which involves a tie-up of capital for that period. It is on that stable demand that the banks in this country would advance the money to pay workmen and designers. The American banks would not advance it. They depend on direct sales. It is their home market which keeps the American factories in being.
    Mr. Burden: I should be out of order in explaining in detail that the Export Credit Guarantees Department exists to provide the credit and that the money is available quickly.
    The hon. Member for Edmonton (Mr. Albu) suggested that by accepting these Clauses the Government should remove the Purchase Tax on necessities. He talked about the tax on clothing of 5 per cent. and on cloth bought by the yard of 10 per cent. and said that these taxes on necessities had been introduced only by this Government. I regret to have to tell the hon. Member that he is quite wrong. The Purchase Tax of 5 per cent. on general clothes is now lower than it has ever been. When hon. Gentlemen opposite were in office, it was 33⅓ per cent., apart from the Utility Scheme, and cloth bought by the yard bore tax of 66⅔ per cent. There has, therefore, been a considerable reduction.
    Mr. Albu: The hon. Member knows perfectly well that he is misleading the Committee. What I said was that this was the first time there had been no tax-free furniture or clothing, which the hon. Member knows is correct.
    Mr. Burden: It is not true that there was no tax on clothing. The tax on clothing generally was 33⅓ per cent. I quite appreciate the hon. Member's reason—we all want to get Purchase Tax down—but let us look at the matter squarely.
    Mr. Douglas Jay: rose—
    Mr. Burden: I have given way several times. I am sorry that I cannot do so again.
    When hon. Members opposite were in power, the tax was very high—higher in most cases than at present. When hon. Members opposite talk about introducing
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    taxes on necessities for the first time, I would ask them, without any acrimony, to look at the last Budget presented by the present Leader of the Opposition in 1951. He it was who, for the first time, put a tax on pastry boards, needles, pins and the like.
    Mr. Jay rose—
    Mr. Burden: I am sorry, but I cannot give way.
    Therefore, while we should all press for the reduction and removal of Purchase Tax as quickly as possible, most hon. Members, if they were honest, would agree that both Front Benches have been guilty of imposing taxes and not reducing them as quickly as most of us would wish. We should be realistic and agree that we would all like to see these taxes completely abolished as soon as possible, and should work for the time when the circumstances of the country will enable us to remove them.
    Mr. Hobson: I am amazed by the remarks which the hon. Member for Gillingham (Mr. Burden) has made to the Committee tonight. I think that he has been completely disingenuous. My hon. Friend the Member for Edmonton (Mr. Albu) made perfectly clear, as the hon. Member for Gillingham knows, that when we were the Government there was a whole range of Utility goods free of tax, including a large amount of furniture. For the hon. Member to try to imply, as he did, despite my hon. Friend's corrective intervention for which the hon. Member courteously gave way during his speech, that everything was subject to Purchase Tax is unfair, and not only unfair but wrong in fact.
    Mr. Burden: I know that the hon. Member for Keighley (Mr. Hobson) is fair, and he will allow that I did say "apart from the D Scheme, apart from the Utility Scheme." [HON. MEMBERS: "No."] If I did not make that perfectly clear, I apologise to the Committee. I had no intention whatsoever of misleading the Committee.
    Mr. Hobson: We are very pleased to have that tardy admission that there was no attempt to mislead the Committee.
    The fact is that 40 per cent. of clothing and 90 per cent. of furniture were free of tax when the Labour Party was

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    in power, and nobody knows it better than the hon. Member. The fact that he has now sought to put himself right makes me wonder whether the word "disingenuous" I used about him was the right one, and whether I should not have used a far stronger term.
    However, my object is to support what the hon. Member for Shipley (Mr. Hirst) said about the woollen trade. I agree with his remarks. I regret that the Patronage Secretary and the Chancellor were not present to hear his strictures of the Treasury Bench. I am sure that I could not have made such criticisms with the same eloquence as did the hon. Member for Shipley. I am sure his card will have been well marked by the powers that be on hearing what he really thinks of the Government which he helps to support on occasion.
    I am in some difficulty because all these new Clauses refer to a tax Schedule, and I am not a lawyer. I am very pleased I am not, but I have to keep asking my hon. Friends what exactly the proposed new Clauses mean by reference to that Schedule. I have to do so even though I have a little Parliamentary experience, as I have been a Member of the House for eleven years. I think it is the bounden duty of the Government to have the Attorney-General present on occasions like this to help us and guide us through these mazes. [HON. MEMBERS: "And the Solicitor-General."] Yes, and the Solicitor-General.
    Miss Margaret Herbison: And the Lord Advocate.
    Mr. Hobson: I have followed the Committee's proceedings on the Bill very carefully, but on many occasions, upon coming into the Committee, I have had to ask my right hon. Friend the Member for Huyton (Mr. H. Wilson) to help me to understand what all these legislative references mean, and I think that the Attorney-General ought to be present on occasions like this to help us with these complexities. [Interruption.] I want—
    Sir E. Boyle: The hon. Gentleman should be able to get his legal advice now.
    Mr. Hobson: I am very grateful to the Economic Secretary for drawing my
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    attention to the entry of my hon. and learned Friend the Member for Gloucester (Mr. Turner-Samuels), and I am sure that he will be only too pleased to intervene if I need any help.
    I want to support the plea made by my hon. Friend the Member for Hammersmith, North (Mr. Tomney) about the manufacture of these compacts in the way sought by the new Clause, to reduce the tax from 90 per cent. to 75 per cent. I do not think it is sufficiently appreciated that this is a new industry in this country. Before the war we imported about 98 per cent. of the compacts we had here, principally from Japan and Germany. Today we are able to make them for ourselves, and not only to make them but to export them.
    The making of these compacts is quite an engineering process. I speak with knowledge because one of the firms concerned is in the constituency in which I have lived for a good many years. The making of the compacts is a precision engineering job, and it takes a long time to tool up a factory to make them. It is absolutely essential that there should be a good, efficient production line. If we tax the production of compacts out of existence we shall have to begin to import them again. Not only that, but we shall lose the export market which we have gained since the end of the war.
    10.0 p.m.
    I fail to see why consideration cannot be given to this industry. The same arguments were used by the Chancellor of the Exchequer when he reduced the tax on silverware to 60 per cent. in the last Budget. The fact was that it was essential to preserve the craft, and it was also necessary to preserve the manufacture of silverware, which made a certain contribution to the export market. The same arguments have been deployed by my hon. Friend the Member for Hammersmith, North and myself for special consideration regarding this small industry.
    As far as the home effect is concerned, there is not the slightest doubt that, in the second half of the twentieth century, a compact is essential to the modern woman. Of that there can be no doubt at all, and, in this climate, I regard it as a social duty on the part of a woman to possess one. There is a tendency on the part of the Treasury Bench to ignore this small industry which has grown up since

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    the war, but I think a duty is placed upon the Government to see that the industry enjoys conditions of stability in which it can carry on satisfactorily and expand. I hope that the Economic Secretary will be able to give some hope to this at present struggling industry.
    Air Commodore A. V. Harvey: We have listened to special pleadings tonight on behalf of the ladies, but I wish to put in a plea on behalf of gentlemen's ties. There is a complete anomaly in regard to taxation on this part of clothing, and I am very grateful that this new Clause has been called, because I was unfortunate enough to have one on the Notice Paper which has not been selected.
    A week or two ago, my hon. Friend the Member for Belfast, West (Mrs. McLaughlin) and I saw the Financial Secretary to the Treasury and put this case to him. He listened very attentively, and I thought he was sympathetic, but he said that there was not very much hardship in the tie industry. In the few moments available to me I want to disillusion my right hon. Friend on that point, because the fact is that, in the schedule of taxable goods, ties are classified in Group V as articles of haberdashery, along with hatpins, hairnets, badges, finger stalls and buckles, and are subject to the same rate of tax, 30 per cent.
    I think we would all agree that today a tie is a necessary item of clothing for almost any man. In fact, in the eleven years that I have been in this House, I have seen only one hon. Member in the Chamber without a tie. It was soon after the war, and he was sitting below the Gangway. It was a very hot day, I agree; nevertheless, invariably we wear ties. I contend that a tie is not a piece of haberdashery; neither is it so regarded by either wholesalers or retailers. They look upon it as an item of clothing.
    According to Notice No. 78 issued by the Customs and Excise, Group 5 also includes many articles of apparel as well as haberdashery. Apart from certain items, ties are the only items of clothing not subject to the 5 per cent. tax, and the only other case of a 10 per cent. tax is that of headwear. Last autumn, during the Committee stage of the Finance Bill, when the tax on clothing generally was reduced to 5 per cent., haberdashery went
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    from 25 per cent. to 30 per cent., so that ties lost 5 per cent. on the deal. The items of haberdashery for Purchase Tax purposes included handkerchiefs, scarves, shawls and braces, which were given special treatment, although remaining in Group 5, but not ties. A tie is almost as important as a pair of braces; not quite, but very nearly, and there could be no justification for not extending the same treatment to ties.
    The probable reason for the discrimination, as I see it, is that ties were never included in the Utility Scheme. Why, I do not know. Perhaps it would have been a good thing if they had been included, although the Tie Association made representations that they should be included in the D Scheme. It is said that hardship should be proved I can give proof from my own constituency, Macclesfield. One or two firms there are about to close down. Hon. Gentlemen may ask why. The fact is that wholesalers and retailers do not carry the stocks of ties that they did. There is a very large export trade, especially to North America. I have seen Macclesfield ties in all parts of America. There is a tremendous trade which must be backed up by a home market.
    I hope that the Chancellor, through the Economic Secretary, will do something about this anomaly. I am told that to remedy it might cost £800,000 in a full year. I should like to see the tax reduced from 30 per cent. to 5 per cent. I am glad to see that my right hon. Friend the Chancellor is present. He has paid great attention to all our problems and I would say to him that this is a most important matter for Macclesfield. A number of weavers are short of work. This difficulty affects many of the mills that weave, and the makers-up.
    I ask the Chancellor not to wait until the industry is more depressed but to give it encouragement now to carry on with the home market, and, at the same time, to export to hard currency areas. I ask him to see that this anomaly disappears. It is particularly hard on one industry to be selected for this treatment, and I hope that an assurance will be given that something will be done.
    Mr. Chapman: I think that we ought to welcome the Economic Secretary to this debate, which is reminiscent of the debates which we had last October when a few of us on this side of the Committee

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    argued, primarily with the Economic Secretary, about the impact of Purchase Tax. It is surprising that when the flood engulfed the then Chancellor of the Exchequer the Economic Secretary withstood it. He survived, even though he was one of the architects of the great disaster of Purchase Tax of last October. Not only did he survive the flood but he survived the cascade of wage demands which followed all the Purchase Tax impositions of last October.
    Now we find him, as happy as ever, about to reply to a similar debate. I hope that he does not make the same speech that he made on about six occasions last October. We heard the same reply several times. I do not know whether it was Boyle's Law, but we heard it many times without any of the real issues being faced.
    One of the first things he ought to do when he replies to the debate is to tell us the effect of the Purchase Tax impositions so far as it can be seen—and as we warned him—on wage demands in the months since that disastrous emergency Budget. Secondly, he ought to be able to produce new figures to show some justification, as he would see it, for the Purchase Tax impositions, in the diversion of goods to export, in the lesser use of washing boards, scrubbing brushes, and all the other things that he said would flood into the world's markets as a result of the decision last October. I say again that it is surprising that he has not been cast aside as his right hon. Friend was, because he was equally responsible for the disaster that followed that emergency Budget.
    Nevertheless, we like his friendly face, and we hope that we shall get some information from him to show just what the effect of the impositions last October has been. I want to speak about the motor car industry. It is a primary subject of one of the new Clauses, that in which it is proposed to reduce the tax from 60 per cent. to 50 per cent. The Economic Secretary has a lot to explain about the situation in the motor car industry today. In the first five months of this calendar year, the production of all vehicles, cars, commercial vehicles and tractors, did not continue as in previous years, with more cars competing in the world markets. Our production was
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    down by 49,000 vehicles, or about 10 per cent.
    The hon. Gentleman said that exports would flood into the world markets because of his right hon. Friend's impositions of last October. They are not up, but down by 43,000, or about 15 per cent. compared with the corresponding period of last year—in one year a bigger disaster than has ever hit the motor car industry in the last ten years.
    Air Commodore Harvey: Will the hon. Member be quite fair, and give the position for last month, and not merely for the worst months?
    Mr. Chapman: The figures were still below those for the corresponding month of last year. If hon. Gentlemen opposite have alternative figures, let them give them.
    The position is that the coming weeks and months of this year will be an all-time disaster for the industry in its exports. Meanwhile, the right hon. Gentleman the Minister of Labour is crowing very happily at the situation of short-time working in the industry. I have been following the situation for some time. The figures which he has given to me have been 38,000 people on short-time in March and 27,000 in April. He is now happy and cock-a-hoop, because the figure for June is 22,000.
    When I asked him whether this was not a disaster for this time of year and pointed out that he had said that the troubles in the industry would go in the spring and summer, when there would be a wonderful recovery, he said that that only showed my pessimism. If he is optimistic about a figure of 22,000 on short-time in June, I should like to know what sort of figures he is expecting for November, December and January next year. The industry is in a dire situation and none of the right hon. Gentleman's remedies of last October has paid off in the slightest degree so far. It is time the Economic Secretary did a good deal of explaining about the situation.
    Mr. Burden rose—
    Mr. Chapman: I will not give way to the hon. Member, who did not once give way during his speech.
    Why is the situation so particularly serious? It is not just that production is down, exports are down, and short time is

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    reaching frightening levels, even at a time when the industry should be at its best. The real trouble with the industry is that the motor car industry of the world is expanding at a very rapid rate. Unless we are to bring down our costs and be able to export in competition, Opel and Volkswagen and similar firms in other countries, which are successfully selling more rapidly, will bring down their costs, whereas ours will continue to rise because of the shrinking total market and shrinking production.
    I have received a letter from one of the leading figures in the industry. The letter says:
    "A certain reduction in production is, therefore, inevitable"—
    because of the credit restrictions and so on—
    "and whereas a year ago the industry was gearing itself for expansion, it now finds itself having to operate at less than full potential and there has been short-time working and even redundancy in some cases. Reduced home demand, if continued, will inevitably affect the export trade and with other factors such as rising costs for materials and higher wages, may force our export prices beyond a competitive level."
    That is a frightening situation facing the industry. If our production goes down while other countries are lowering the unit cost of production by expansion, we shall lose our competitive position more and more.
    10.15 p.m.
    Secondly, it is an example of the shocking waste of investment that went on under this Government. About £250 million was put in to expand production, and now, in the first five months of this year, production is going down, and down, and down. It is a most formidable indictment, and is an example of the sort of thing which this Government have allowed to happen.
    There is another thing which scares us. The policy of the Chancellor in relation to the motor car industry is to say, "We realise that it must not draw in so much foreign steel; it has to make a greater contribution to our exports"—I shall be reverting to that point—" and we must have a redeployment of labour if the industry cannot use all its labour to the advantage for exports." The situation in the motor car industry is not one which makes it so easy as he thinks to redeploy labour. Much of its production is carried
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    out on the track or the assembly line. Every man on an assembly line—and this applies to the production of all parts; the engine, the final assembly of the body and so on—has to be there whether 20 or 200 cars are coming along the track on any one day, because every man has a particular job to do and every part of the motor car has to be put together separately.
    The Chancellor cannot get a vast redeployment of labour from the motor car industry by cutting down its sales. That will result, as is now happening, not in men being sacked and moved to other jobs, but simply in short-time working. It is not merely a question of the 22,000 men who are now on short-time work. In any department in the Austin Motor Company today the work is finished by half-past three. No more cars are coming along the track, and they might as well pack up for the day then instead of at five o'clock. The Chancellor must not expect to obtain a vast redeployment of labour from an industry whose labour is of the specialised kind needed in different parts of the assembly line.
    Another harmful fact is that in Birmingham, nowadays, many married women have been sacked from the industry. They have not got other jobs, so they stay at home. There is no redeployment in their case. They are just staying at home and ceasing to earn. The same thing applies in the case of the Austin Motor Company where, today, men over 70 years of age have been sacked. It has been said that they have to go first, That, again, is a totally unnecessary loss of working potential.
    The Economic Secretary may ask what I propose to do about it, and what justification I have for suggesting a reduction in Purchase Tax to assist this industry. I would say that what the industry now requires is some flexibility in the application of Purchase Tax rates. The letter from which I have just quoted goes on to say that it is not always easy simply to switch cars produced for the home market at once to the export market. What we must have is flexibility in the use of Purchase Tax, so that more motor cars can be allowed on to the home market when cars are piling up and there is both disguised and open short-time working, which is doing nobody any good and which cannot result in any extra imports of steel harming our balance of payments.

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    We should allow a reduction of Purchase Tax and an easing of the problems facing the industry so long as such an action does no harm to our export market, and helps the industry both upon the road to expansion and in its endeavour to maintain full employment and produce the goods in the way I have been suggesting.
    Let me say this in a further plea for flexibility in Purchase Tax. One of the ludicrous things about the situation in the motor car industry today is the incidence of Purchase Tax on different kinds of vehicles. In the last five months the one bright spot on the horizon has been that commercial vehicles have gone up in production by 9,000 while the production of other vehicles has been falling very substantially. In exports, commercial vehicles are the only ones which have gone at all. The strange thing is, and hon. Members will know this from personal experience, that a large number of commercial vehicles are being sucked on to the home market when they should be exported.
    There is a vast market for commercial vehicles which is expanding year by year. We ought to be discriminating in Purchase Tax not, if at all, against passenger cars, but against the use of commercial vehicles on the home market. The situation is that commercial vehicles attract a tiny amount of tax compared with passenger cars.
    The whole thing is topsy-turvy and I hope that in the coming year there will be some attempt made to look at this side of the problem and to try to force more commercial goods into export instead of allowing so many to be sucked into the home market. I have friends who today, instead of buying a new passenger car, order a new Ford or Austin van and use it as a runabout instead of a passenger car. They can buy such a vehicle for £400, but if they want the same engine in a passenger car, they have to pay £600 or £700. That is a ludicrous situation, when those are the vehicles which we are selling all the time and more and more in the export market; and they should be pushed abroad at all costs.
    I hope, therefore, that there will be more flexibility and some rethinking about the actual incidence of Purchase
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    Tax as between different kinds of cars. There has not yet been any proof that the sort of measures which the Economic Secretary advocated last October have done anything but harm to the motor car industry. In my view they have done so much harm that the coming winter will be the worst for the industry for many years.
    I hope that the hon. Gentleman will at least give a pledge that if Purchase Tax cannot be reduced, at least it will be borne in mind that it is not a wooden implement, and that it can be used with flexibility; and that if the situation gets really out of hand, as may well happen, it will be reduced, in an effort to permit of some home sales, so long as no harm is done to Britain's balance of payments.
    Mrs. Patricia McLaughlin: I shall not detain the Committee long at this late hour, but I am grateful for the opportunity to support my hon. and gallant Friend the Member for Macclesfield (Air Commodore Harvey) in his plea for the reduction of the tax on ties. We have heard a great deal from hon. Gentlemen opposite about ladies' compacts. I feel certain that most people will have more sympathy towards a reduction of tax on a gentleman's tie, which is definitely an article of apparel.
    I have made inquiries and have discovered that in no reputable hotel is it possible for a gentleman to sit in the dining room after six o'clock in the evening—why that particular hour I do not know—without a tie. That would seem to lend a definiteness to the argument that a tie is an article of wearing apparel and should not be included, as it is, in Notice No. 78 issued by the Excise and Customs with ladies' hair nets, slumber nets, boudoir caps, ladies' fronts and modesty vests and other peculiar items of haberdashery.
    Seriously, this is a difficulty which those firms who are manufacturing good quality ties of great value in our export market are experiencing in supporting their home market. They find that the little extra to pay on these items makes it impossible to keep up the standard in the home market which is necessary to support their market overseas.
    In the past, ties were not subject to Purchase Tax. They did not come under certain schedules during the war. The

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    manufacturers who make up material did not get the raw material during the war because it was impossible to obtain pure silk. They had to put up with many difficulties. Now they are endeavouring to keep up the standard of British goods and it is important that they should receive every possible support.
    I hope that the Chancellor will be able very soon to give us an opportunity to say "Thank you" because he has recognised that the gentleman's tie is an essential article of apparel which merits a reduction in Purchase Tax. It should be a considerable reduction, to help the home trade and to further the export trade.
    Mrs. Harriet Slater: The more we talk tonight about Purchase Tax the more we realise that most of us were saying almost exactly the same things after the presentation of the previous Budget. I take the view that Purchase Tax is wrong in principle. Originally, it was introduced to prevent people from buying luxury goods, and it never did that. Lady Docker could still afford to buy a gold-plated car. [An HON. MEMBER: "She did not buy it."] It was a case of someone who already had wealth being able to charge an item like that on his expenses account to the firm. Perhaps I could apply it to other people who can afford expensive fur coats, washing machines, refrigerators and other things.
    I want to speak about the industry in which I and some of my hon. Friends are particularly concerned, the pottery industry, not from the point of view of the industry but of the effect of Purchase Tax on the housewife, on the home, and on the people who work in the industry. After the previous Budget, trade unionists in the industry and some of my hon. Friends met the Financial Secretary to the Treasury. We warned him that if Purchase Tax was maintained at its existing rate the home market and the export market would be inevitably affected, and the industry would lose valuable craftsmen.
    That is exactly what is happening. The industry has made a survey over the last few months. The export promotion committee asked for returns from 102 firms. The returns show that from Octo-
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    ber, 1955, to February, 1956, the labour force of those firms dealing with domestic ware was reduced by 251 men and 583 women. Since February, those numbers have considerably increased because some factories are almost closed down and some are almost without orders on their books for the next few months. The people on short time are 10 per cent. of the labour force of those 102 firms.
    10.30 p.m.
    We may be told in reply that the figure of 2,367 women on short time does not correspond with the number of vacancies registered at the employment exchange. But the pottery industry, like the textile industry, has many married women working in it. Unfortunately, many married women have not been very wise; they have not paid their full National Insurance contributions. That means that when they are on short time, are unemployed or are ill they are unable to claim any benefit and therefore need not register at the employment exchange. Therefore this figure is really very much higher owing to the fact that many married women, as I say, have not paid their full National Insurance contributions and consequently are not registered at the employment exchange as unemployed.
    If we take the figures of orders, which, after all, are the figures that really count, we find that firm after firm, particularly those engaged in the manufacture of expensive china, have fewer and fewer orders on their books. About a fortnight ago I went to one of the china factories in the constituency of my hon. Friend to buy a tea service. I was told that there were only certain patterns from which I could choose owing to the fact that the firm had no orders on its books for the American market. In some cases the firm was unable to keep its work-people engaged on producing and decorating designs which previously had been among the best designs for the export trade.
    Some 82 firms manufacturing domestic ware were asked to submit figures. Of those firms, 29 had orders on their books representing four weeks' or less work. Thirty-two of the firms had orders representing five to nine weeks' work, and there were only 21 firms with orders which represented 10 weeks' work. That

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    is a really serious situation because in the past the industry has always considered that it was necessary to have orders for six months' work ahead in order to keep the industry fully employed.
    Coming to the question of export figures, again we see that what we said after the previous Budget is actually happening at the present time. In December, 1954, we were exporting earthenware to the value of £816,297. In February this year that figure had fallen to £763,971. In December, 1954, the value of our exports of china, which represents one of our most valuable exports, was £459,542, but in February of this year that figure had fallen to £381,843.
    These figures show that there has been a steady reduction in the number of orders, a steady reduction in the amount of our exports and a steady reduction in the number of people employed in the industry. We cannot go on like that for ever. If that position continues it means that eventually we shall cut off our nose to spite our face, because we are losing some of our most valuable exports, on which we depend to such a great extent.
    The other point I want to make concerns the housewife. Every housewife, and most husbands, when they do the washing up, break crockery which has to be replaced. It is a considerable burden. Every housewife who now has to buy new crockery finds that Purchase Tax makes a real difference to the price which she has to pay. For half a china tea service one pays about £1 8s. 4d. It is a very large item. Purchase Tax on the goods needed in the home market represents a real increase in the cost of living for ordinary housewives.
    I want to add my plea on behalf of the industry and, in particular, of the workers in it. It has served the country well during the difficult post-war years. I say emphatically that if we allow the present position to continue we shall lose more and more of our best craftsmen and craftswomen. Then if we want to step up the industry again we shall find that we have lost the people who can produce the goods we need most.
    Dr. A. D. D. Broughton: I wish to speak in support of the proposed new Clause in the names of my right hon. Friend the Member for Huyton (Mr. H. Wilson), other hon. Friends, and myself, the purpose of which is to reduce Purchase Tax on goods which now carry 10 per cent. from that percentage to ¼ of 1 per cent. I shall address my remarks particularly to the tax as it falls on wool cloth.
    Hon. Friends will agree that it would be better if the tax were abolished altogether, but apparently it would be out of order for us to propose a new Clause to that effect, so we seek to have it reduced to a negligible amount. I suggest to the Chancellor, the Economic Secretary, or whoever is to reply to the debate that there is no doubt that Purchase Tax can be very substantially reduced. Early last year the tax on non-wool cloth was reduced from 50 per cent. to 25 per cent. but, on 20th April, the Financial Secretary gave us to understand that there were administrative difficulties preventing still further reduction, yet on 4th May, 1955, Purchase Tax was removed altogether from non-wool cloths.
    The fact was that the state of the Lancashire cotton industry and Parliamentary pressure brought to bear on the Government was such that Purchase Tax on piece goods and household textiles made from non-wool materials was brought down from 50 per cent. to nil in two stages. I suggest that there may have been another reason why the Government granted that concession early in May last year. That was because there was a General Election later in the month and the Tory Government wished to have some Lancashire votes.
    At present there is no Purchase Tax on non-wool fabrics. Yet there is a 10 per cent. tax on wool cloth. I should like the Government spokesman to let us know why there should be this discrimination against wool, and for how long it is to last. Is it that the Government intend to keep this tax on wool cloth until such time, if it ever comes, as the wool textile industry falls upon bad days?
    I would remind the Government that this is one of our very old industries. It is a very important one, and one that

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    is taking a useful part in the nation's export drive. It is one of the dollar earners. I am informed by industrialists that an industry which is manufacturing for export requires to have a stable and a prosperous home market, and that this tax is impeding progress at home. The industry requires encouragement and expects help from the Government. The Government can give that help by removing Purchase Tax, and by doing so also help the housewife—to whose problems my hon. Friend the Member for Stoke-on-Trent, North (Mrs. Slater) has referred—because the price of wool cloth will thereby be reduced.
    The Prime Minister is reported in the Observer as having said at Leamington, last Saturday:
    "The Government was trying by every means to bring an end to the dangerous spiral of rising costs and prices."
    If he really meant what he said, here is his opportunity. The Government have the opportunity of reducing prices by reducing the Purchase Tax on wool cloth.
    I am glad that the Chancellor of the Exchequer is here, because he will know that he has received representations from the wool textile industry and also from the wool growers of the Dominions. Up to the moment, nothing has been done about the matter, but I hope that whoever replies for the Government will give a favourable answer to this request. Wool cloth is at a competitive disadvantage because of this tax. Recently there has been some falling off in the trade. There has been less overtime worked and there has even been a little unemployment.
    We in this country make the best wool textiles in the world and have done for centuries, but we have to sell our goods in a highly competitive market, and conditions in this market have been made no easier, I would remind the Government, by the increasing amount of wool cloth that has recently been imported from Italy. I therefore ask the Government to abolish, or, as that request would be out of order, to reduce this ridiculous tax, and so to put an end to an unjust discrimination. I ask the Government to do for wool no more than has been done for cotton and synthetic fibres by removing this tax, which is inflationary in effect and is an obstacle to progress. I ask the Government to help the wool
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    textile industry, particularly in the West Riding of Yorkshire but also in other parts of the country, and so to help it to make a still greater contribution towards expanding the nation's commerce.
    10.45 p.m.
    Sir E. Boyle: I think it might be for the convenience of the Committee if I now attempted to reply to some of the many matters which have been raised in this debate. After very nearly eight days of very pleasant debate on this Finance Bill, it has been not altogether disagreeable to have had a two-hour debate on the last Finance Bill.
    I would at the very outset of my speech, I hope, earn the good graces of the right hon. Gentleman the Member for South Shields (Mr. Ede) by making the Government's position on these new Clauses perfectly clear before I answer some of the points of detail. The right hon. Gentleman earlier complained that Government spokesmen sometimes took rather a long time to make their intentions clear. I shall try to do that straight away, and I will pronounce the word "No" without further ado.
    I will give the Committee these figures. The first of the new Clauses, that is to say, the exemption—because that is what hon. Members are really asking for, though I realise the difficulty of tabling a Clause which is in order—of the goods at present charged at 5 per cent. would cost £39 million in a full year. Exemption of the goods charged at 10 per cent. would cost £4 million in a full year. The reduction of the 30 per cent. rate to 20 per cent. would cost £51 million. The reduction of the 60 per cent. to 50 per cent. would cost £28 million. The reduction of the 90 per cent. to 75 per cent. would cost £2½ million.
    I do not think that I need repeat the arguments which were used by the Chancellor today in connection with an earlier new Clause. I simply say that to make reductions of this kind, still more to make exemptions of the kind proposed in, for example, the new Clause of the hon. Member for Edmonton (Mr. Albu), would go right outside the whole scope and plan of my right hon. Friend's Budget this year.
    I take up the argument which the hon. Member for Hammersmith, North (Mr. Tomney) made about compacts. I can

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    assure hon. Members that even if I have no marital interest in compacts I do not think any Member for Birmingham could avoid having a certain cultural interest in compacts. I take some pride in the fact that I was, perhaps, instrumental in suggesting that the tax on craft silverware should be reduced to the same level as the tax on electro-plated nickel silver. I can assure the hon. Member for Hammersmith, North that we shall take very careful note of what he said on the subject of compacts. I have taken a full note of the points which he raised tonight, and, in particular, of those about exports. I cannot go further than that tonight. The hon. Member made, as he always does, a helpful and thoughtful speech on this matter, and we on this side of the Committee are very grateful to him.
    I see my hon. Friend the Member for Belfast, West (Mrs. McLaughlin) in her place. She and my hon. and gallant Friend the Member for Macclesfield (Air Commodore Harvey) raised the question of ties. I cannot add tonight to what my hon. Friend the Member for Belfast, West already knows on that subject. My hon. and gallant Friend thought that it was unfair that ties should be regarded as haberdashery and suggested that if they were to be treated as haberdashery they ought to be treated in the same way as handkerchiefs, scarves and braces. The answer to that argument is a perfectly straightforward one. I think that my hon. and gallant Friend really knows it himself. The answer is that the 5 per cent. rate is reserved to those articles of haberdashery which previously bore a D relief. As to the question whether it is right to regard ties as haberdashery in the first place, my right hon. Friend proposes at the moment to keep that classification, but, of course, we shall certainly keep the question of ties under review. I cannot go further tonight than to repeat the answer which my hon. Friends have had on earlier occasions.
    My hon. Friend the Member for Shipley (Mr. Hirst) and the hon. Member for Keighley (Mr. Hobson) both raised the question of the woollen industry. My hon. Friend complained, in a very interesting speech, that he had had a very dusty answer from the Government. I must say that he returned the dust with some vigour tonight. My hon. Friend
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    almost reminded me of my hon. Friend the Member for Tynemouth (Dame Irene Ward) and her hammers. There are two things that I would say to my hon. Friend. The first is that, of course, we realise the importance of the woollen industry, but I think that my hon. Friend was a little unreasonable in complaining, because no precise figures are available, that we do not give any precise figures. There are times when it really is not accurate to be more precise than the evidence warrants.
    I would remind my hon. Friend of a very wise remark made by a distinguished philosopher, F. P. Ramsey, the brother of the present Archbishop of York, who said that one of the dangers of inexact thinking was treating ideas which were necessarily vague as though they were precise. That is extremely true. I apologise that we have not gone on the principle that when accurate figures do not exist they ought to be invented.
    Mr. Hirst: I did not ask my hon. Friend to invent any statistics. It has always been argued that this matter is so serious and that these figures roughly support the Government's contention, and they do not. My hon. Friend is being extremely clever, and I admire him for that, but he is not answering the point.
    Sir E. Boyle: We fully realise the importance of the wool industry. That point was made by other hon. Members as well.
    There is one other thing that I should like to say to my hon. Friend. He talked about loyalties being strained. He came very close to suggesting that my right hon. Friends were being too loyal to their advisers. May I say that we take absolutely full responsibility for the views which we express to my hon. Friend? It would be quite wrong to suggest anything else.
    A number of hon. Members talked about the car industry. The hon. Member for Edmonton and the hon. Member for Northfield (Mr. Chapman), who told me that he could not be here to hear my reply, both spoke about the motor industry. I do not want to go back too much into past history or to take too much notice of the hon. Member's King Charles's head, but I will say that to hear the hon. Gentleman speaking one would think that in Budget

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    debates some years ago hon. Members opposite were saying, "Do not let the motor industry expand too fast; do be careful about expansion."
    On the contrary, we were not hearing speeches like that from the opposite benches. In 1954 we were hearing exactly the reverse. We were hearing the right hon. Member for Bishop Auckland (Mr. Dalton) saying what a disgraceful thing it was that the nationalised sector was expanding so fast and the private sector so slowly. It is quite a new idea that we should be blamed because private industry has expanded as fast as it has done. I put it to the hon. Member that it would have been very difficult for the Government plausibly to have prevented that expansion.
    Mr. Albu: I am sure the hon. Gentleman will do me the justice of saying that for eighteen months or two years I have been warning the Government about the dangers of expansion in the industry.
    Sir E. Boyle: I agree. The hon. Member has always taken a special interest, but it would not be fair to say that his views are always echoed by his own Front Bench.
    The hon. Member for Northfield talked about the need for flexibility in the use of the Purchase Tax. That cuts both ways. Hon. Members frequently tell us that it is very disturbing for industry to have Purchase Tax rates constantly changing. There are limits to the ways in which the tax can easily be used as a flexible instrument. We have, of course, another instrument to our hand that is very closely associated with Purchase Tax, and that is hire purchase. That certainly is an instrument which can be used in a flexible way. Indeed, whenever suitable and appropriate, this Government will not hesitate to use it.
    I revert now to the main point, which is the general question of the effect of using Purchase Tax changes. A number of hon. Members have discussed the general issue of the desirability of the tax. It fell to me, in the debates on the autumn Budget last year, on a number of occasions to justify the Purchase Tax as a disinflationary measure. We have had so many rather bowdlerised versions of "Boyle's Law" from the opposite side of the Committee that perhaps I may be forgiven if I read out
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    what I might call the authorised version which I first stated on the Second Reading of the Finance Bill last year. I said this, and I still hold to these words and believe that they were absolutely true:
    "If Purchase Tax is increased, for example, on durable consumer goods—motor cars and so on—it is likely in many cases that there will be a slightly contracted home market. … In any case, however, if, as we have done, we make a Purchase Tax increase over a very wide field, there will be an indirect connection …"—
    that is, with our balance of payments—
    "… as well, because the fact that the tax is put up means that there is less purchasing power available for other things. …"—[OFFICIAL REPORT, 8th November, 1955; Vol. 545, c. 1795.]
    That I believe to be perfectly true.
    Hon. Members opposite ask, what about the effects of that Budget? May I put this to the Committee? We have used monetary policy during the past year to regulate the economy. We have also made considerable use of budgetary policy, and certainly nobody listening to the debate tonight could take at all seriously the idea, which is sometimes put up by right hon. Gentlemen opposite, that the Government have had a doctrinaire adherence to one instrument only, that is to say, the monetary instrument, because we have certainly used budgetary policy as well.
    May I briefly give the Committee these quite interesting figures? During the first five months of this year, the value of imports was 1½ per cent. higher than the value of imports during the corresponding period last year. The value of exports, on the other hand, was 6 per cent. higher than in the corresponding period last year. Taking consumption and investment, two important home indicators, it surely is not altogether without significance that consumption today is running at almost exactly the same level as during the second half of last year. There is a considerable falling off in demand for durable consumer goods. There is some increase, though not very big, in the demand for food and drink, which from the point of view of our balance of payments is, as it were, a desirable switch-over.
    What is much more significant, however, is that while the total level of consumer expenditure is more or less the

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    same as in the second half of last year, it still looks as though private industry—companies—will invest 17 per cent. more than last year. In other words, exports are going up substantially faster than imports, and productive investment is rising much faster than consumption. I should have thought that by any standards those were fairly satisfactory indicators of the economy. Therefore, I do not think it is fair to say that the effects of my right hon. Friend the Lord Privy Seal's Budget have turned out unfortunately. On the contrary, they have been one very important part of our general economic strategy.
    A number of hon. Members have talked about the future of the Purchase Tax. I cannot say anything about this tonight except that hon. Members would be deluding themselves if they thought that we should be making vast reductions in indirect taxation over the next year or two. That seems to me to be a completely unrealistic view. I shall not talk tonight about the respective merits of Purchase Tax or a sales tax. These are complicated subjects, even within the ranks of supporters of hon. Members opposite. Few things would give me more intellectual stimulation than to hear a debate between two distinguished economists, supporters of the party opposite—Dr. Balogh and Professor Arthur Lewis—who hold diametrically opposing views on this complicated question.
    We are determined to continue our policy of seeing that total demand is kept within the bounds of our resources, and at the same time we are trying to pursue a policy whereby investment rises at a faster rate than consumption, because we believe that that is vital for our economy in our present state. We believe that Purchase Tax and the increases in Purchase Tax last year have contributed to the favourable indicators which I have mentioned. For those reasons, however unpopular last autumn's Budget may be, we on this side of the Committee make no apology for it whatever. We still believe that we were absolutely right to see that consumption bore its fair share of the corrective action that was needed.
    Mr. Jay: In the course of this debate we have had some very good speeches from hon. Members behind me and from
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    the hon. Member for Shipley (Mr. Hirst), and we have had a very bad speech from the hon. Member for Gillingham (Mr. Burden). The hon. Member for Gillingham uttered some wild misrepresentations and then refused to give way. The hon. Member ought to know that in the period of the Labour Government—
    Mr. Burden: The right hon. Gentleman is not correct. I gave way three times.
    Mr. Jay: We will leave that aspect aside.
    The hon. Member ought to know that under the Labour Government, over 50 per cent. of clothes and textiles and about 90 per cent. of boots, shoes and furniture were Utility products and tax-free.
    11.0 p.m.
    In those days, in 1951 and before, we used to hear from hon. Members of the party opposite two statements about what they would do with Purchase Tax if they came to power. First, we were told that they would reduce the total burden of tax and give great alleviation to the housewife. Secondly, we were always told that there would be a simplification of the structure, so that the tax would be much easier to understand. All I want to say tonight is that, so far as reducing the total burden of tax is concerned, the revenue raised in 1951 was under £300 million, and the revenue from Purchase Tax which the Chancellor proposes to raise in the present year is actually £510 million. The Purchase Tax revenue has risen by £200 million in the last two years, and now amounts to almost as much as the total Income Tax revenue from Schedule E.
    As to simplification, in 1951 there were three rates of tax: now we have reached a position, after all these changes, in which there are rates of 90 per cent., 60, 50, 30, 10 and 5 per cent. It reads almost like a cricket score. And just because we now have this multiplicity of rates, we have all these complications and discriminations of which we have heard tonight, and, in addition, the discrimination against wool products described both by the hon. Member for Shipley and by other hon. Members from Yorkshire. What the present Government have really done, and what we are protesting against here, is to extend Purchase Tax to a very large range of goods, particularly textiles, clothing, furniture

    421
    and household goods, which were previously wholly exempt. I believe that if the Economic Secretary could give us the figures, which I am sure he cannot, he would find that a large proportion of this increase to £500 million is due to the imposition of this tax on the ordinary necessities of life.
    On the subject of "Boyle's Law," I would agree with the Economic Secretary. I think there is some validity in "Boyle's Law" when one applies it to the luxury type of goods, but the Economic Secretary is making the mistake of applying this argument to all those ordinary necessities of life, raising their price for that reason, and then forgetting that it is bound to lead to increases in wages and a further twist to the whole inflationary process.
    Sir E. Boyle: May I just ask the right hon. Gentleman if it is his view that his right hon. Friend the Member for Bishop Auckland (Mr. Dalton), was making a similar mistake when he used an exactly similar argument when he was increasing Purchase Tax, by no means on only luxury goods?
    Mr. Jay: My right hon. Friend put much the greater weight of tax on what the Minister of Supply used to call the "luxuries and the amenities." That remains our policy today, but the hon.
    Gentleman is extending the tax to these necessities, and, as a result, we have had an accentuation of the inflationary process over these latter months. It has meant not merely a further rise in wages, but has also resulted in a protest, as we all know, at Tonbridge from many of the hon. Gentleman's own supporters.
    What we would propose, when we reform this tax, is to reduce the burden on ordinary commodities, thereby making a real contribution to reducing the cost of living, and getting back much more nearly to the system of exemption that we had before, and which so wholly escaped the notice of the hon. Member for Gillingham.
    Mr. Burden rose—
    Mr. Jay: No, I cannot give way.
    I believe that is the right way in which to move the tax in future. It is wholly contrary to the direction which the present Government is taking, and I think that the case against them has been so overwhelmingly made out in this debate that we can now proceed immediately to a Division.
    Question put, That the Clause be read a Second time:—
    The Committee divided: Ayes 155, Noes 203.

    Division No. 238]

    AYES

    [11.4 p.m.

    Ainsley, J. W.

    Edelman, M.

    Irving, S. (Dartford)

    Albu, A. H.

    Edwards, Rt. Hon. John (Brighouse)

    Janner, B.

    Allaun, Frank (Salford, E.)

    Edwards, Rt. Hon. Ness (Caerphilly)

    Jay, Rt. Hon. D. P. T.

    Awbery, S. S.

    Edwards, Robert (Bilston)

    Jager, George (Goole)

    Bacon, Miss Alice

    Edwards, W. J. (Stepney)

    Jeger, Mrs. Lena (Holbn & St. Pncs, S.)

    Baird, J.

    Evans, Albert (Islington, S. W.)

    Jenkins, Roy (Stechford)

    Benson, G.

    Evans, Edward (Lowestoft)

    Johnson, James (Rugby)

    Beswick, F.

    Evans, Stanley (Wednesbury)

    Johnston, Douglas (Paisley)

    Blackburn, F.

    Fernyhough, E.

    Jones, Elwyn (W. Ham, S.)

    Blenkinsop, A.

    Finch, H. J.

    Jones, Jack (Rotherham)

    Blyton, W. R.

    Fletcher, Eric

    Jones, J. Idwal (Wrexham)

    Bottomley, Rt. Hon. A. G.

    Forman, J. C.

    Jones, T. W. (Merioneth)

    Bowden, H. W. (Leicester, S. W.)

    Fraser, Thomas (Hamilton)

    Kenyon, C.

    Braddock, Mrs. Elizabeth

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

    King, Dr. H. M.

    Brockway, A. F.

    Gibson, C. W.

    Lee, Miss Jennie (Cannock)

    Broughton, Dr. A. D. D.

    Gooch, E. G.

    Lever, Leslie (Ardwick)

    Brown, Rt. Hon. George (Belper)

    Gordon Walker, Rt. Hon. P. C.

    Logan, D. G.

    Brown, Thomas (Ince)

    Grey, C. F.

    Mabon, Dr. J. Dickson

    Burke, W. A.

    Griffiths, David (Rother Valley)

    MacColl, J. E.

    Butler, Herbert (Hackney, C.)

    Griffiths, Rt. Hon. James (Llanelly)

    McGhee, H. G.

    Butler, Mrs. Joyce (Wood Green)

    Hall, Rt. Hn. Glenvil (Colne Valley)

    McInnes, J.

    Callaghan, L. J.

    Hamilton, W. W.

    McLeavy, Frank

    Castle, Mrs. B. A.

    Hannan, W.

    MacMillan, M. K. (Western Isles)

    Coldrick, W.

    Hayman, F. H.

    Mahon, Simon

    Collick, P. H. (Birkenhead)

    Herbison, Miss M.

    Mallalieu, E. L. (Brigg)

    Corbet, Mrs. Freda

    Hobson, C. R.

    Mann, Mrs. Jean

    Craddock, George (Bradford, S.)

    Holman, P.

    Marquand, Rt. Hon. H. A.

    Crossman, R. H. S.

    Holmes, Horace

    Mason, Roy

    Davies, Ernest (Enfield, E.)

    Howell, Charles (Perry Barr)

    Mayhew, C. P.

    Deer, G.

    Hoy, J. H.

    Mikardo, Ian

    Donnelly, D. L.

    Hughes, Emrys (S. Ayrshire)

    Mitohison, G. R.

    Dugdale, Rt. Hn. John (W. Brmwch)

    Hunter, A. E.

    Monslow, W.

    Ede, Rt, Hon. J. C.

    Irvine, A. J. (Edge Hill)

    Moody, A. S.

    Moyle, A.

    Redhead, E. C.

    Thornton, E.

    Mulley, F. W.

    Robens, Rt. Hon. A.

    Timmons, J.

    Neal, Harold (Bolsover)

    Roberts, Albert (Normanton)

    Tomney, F.

    O'Brien, Sir Thomas

    Roberts, Goronwy (Caernarvon)

    Turner-Samuels, M.

    Oliver, G. H.

    Shurmer, P. L. E.

    Ungoed-Thomas, Sir Lynn

    Oram, A. E.

    Silverman, Julius (Aston)

    Usborne, H. C.

    Orbach, M.

    Simmons, C. J. (Brierley Hill)

    Weitzman, D.

    Oswald, T.

    Slater, Mrs. H. (Stoke, N.)

    Wheeldon, W. E.

    Owen, W. J.

    Smith, Ellis (Stoke, S.)

    Wilkins, W. A.

    Paget, R. T.

    Sorensen, R. W.

    Williams, W. R. (Openshaw)

    Palmer, A. M. F.

    Sparks, J. A.

    Wilson, Rt. Hon. Harold (Huyton)

    Pargiter, G. A.

    Stones, W. (Consett)

    Winterbottom, Richard

    Parker, J.

    Stross, Dr. Barnett (Stoke-on-Trent, C.)

    Woof, R. E.

    Parkin, B. T.

    Summerskill, Rt. Hon. E.

    Yates, V. (Ladywood)

    Pearson, A.

    Swingler, S. T.

    Younger, Rt. Hon. K.

    Peart, T. F.

    Sylvester, G. O.

    Zilliacus, K.

    Price, J. T. (Westhoughton)

    Taylor, Bernard (Mansfield)

    Probert, A. R.

    Taylor, John (West Lothian)

    TELLERS FOR THE AYES:

    Randall, H. E.

    Thomas, George (Cardiff)

    Mr. George Rogers and Mr. Short

    Rankin, John

    Thomson, George (Dundee, E.)

    NOES

    Aitken, W. T.

    Garner-Evans, E. H.

    Mackie, J. H. (Galloway)

    Allan, R. A. (Paddington, S.)

    George, J. C. (Pollok)

    McLaughlin, Mrs. P.

    Amery, Julian (Preston, N.)

    Gibson-Watt, D.

    Maclay, Rt. Hon. John

    Amory, Rt. Hn. Heathcoat (Tiverton)

    Gower, H. R.

    McLean, Neil (Inverness)

    Anstruther-Gray, Major Sir William

    Graham, Sir Fergus

    Macleod, Rt. Hn. Iain (Enfield, W.)

    Arbuthnot, John

    Grant-Ferris, Wg. Cdr. R. (Nantwich)

    Macleod, John (Ross & Cromarty)

    Armstrong, C. W.

    Green, A.

    Macmillan, Rt. Hn. Harold (Bromley)

    Ashton, H.

    Gresham Cooke, R.

    Maddan, Martin

    Atkins, H. E.

    Grimston, Hon. John (St. Albans)

    Maitland, Hon. Patrick (Lanark)

    Baldock, Lt.-Cmdr. J. M.

    Grimston, Sir Robert (Weetbury)

    Manningham-Buller, Rt. Hn. Sir R.

    Baldwin, A. E.

    Grosvenor, Lt.-Col. R. G.

    Markham, Major Sir Frank

    Balniel, Lord

    Gurden, Harold

    Marlowe, A. A. H.

    Barlow, Sir John

    Hall, John (Wycombe)

    Marples, A. E.

    Barter, John

    Harris, Frederic (Croydon, N. W.)

    Mathew, R.

    Baxter, Sir Beverley

    Harrison, A. B. C. (Maldon)

    Maude, Angus

    Bell, Philip (Bolton, E.)

    Harrison, Col. J. H. (Eye)

    Mawby, R. L.

    Bennett, F. M. (Torquay)

    Harvey, Air Cdre. A. V. (Macclesfd)

    Maydon, Lt.-Comdr. S. L. C.

    Bidgood, J. C.

    Harvey, John (Walthamstow, E.)

    Molson, Rt. Hon. Hugh

    Biggs-Davison, J. A.

    Heald, Rt. Hon. Sir Lionel

    Mott-Radclyffe, C. E.

    Bishop, F. P.

    Heath, Rt. Hon. E. R. G.

    Nabarro, G. D. N.

    Black, C. W.

    Hill, Mrs. E. (Wythenshawe)

    Nairn, D. L. S.

    Body, R. F.

    Holland-Martin, C. J.

    Neave, Airey

    Bossom, Sir Alfred

    Holt, A. F.

    Nicholls, Harmar

    Boyle, Sir Edward

    Hornby, R. P.

    Nicolson, N. (B'n'm'th, E. & Chr'ch)

    Braine, B. R.

    Hornsby-Smith, Miss M. P.

    Nield, Basil (Chester)

    Brooke, Rt. Hon. Henry

    Horobin, Sir Ian

    Nugent, G. R. H.

    Browne, J. Nixon (Craigton)

    Howard, Hon. Greville (St. Ives)

    Oakshott, H. D.

    Bryan, P.

    Hudson, Sir Austin (Lewisham, N.)

    O'Neill, Hn. Phelim (Co. Antrim, N.)

    Burden, F. F. A.

    Hudson, W. R. A. (Hull, N.)

    Orr-Ewing, Charles Ian (Hendon, N.)

    Butler, Rt. Hn. R. A. (Saffron Walden)

    Hughes Hallett, Vice-Admiral J.

    Page, R. G.

    Carr, Robert

    Hughes-Young, M. H. C.

    Pannell, N. A. (Kirkdale)

    Chichester-Clark, R.

    Hylton-Foster, Sir H. B. H.

    Peyton, J. W. W.

    Cole, Norman

    Irvine, Bryant Godman (Rye)

    Pilkington, Capt. R. A.

    Conant, Maj. Sir Roger

    Jenkins, Robert (Dulwich)

    Pitman, I. J.

    Cooper, Sqn. Ldr. Albert

    Jennings, J. C. (Burton)

    Pitt, Miss E. M.

    Cooper-Key, E. M.

    Jennings, Sir Roland (Hallam)

    Powell, J. Enoch

    Cordeaux, Lt.-Col. J. K.

    Johnson, Dr. Donald (Carlisle)

    Price, Henry (Lewisham, W.)

    Corfield, Capt. F. V.

    Johnson, Eric (Blackley)

    Prior-Palmer, Brig. O. L.

    Crouch, R. F.

    Jones, Rt. Hon. Aubrey (Hall Green)

    Raikes, Sir Victor

    Cunningham, Knox

    Joseph, Sir Keith

    Ramsden, J. E.

    Currie, G. B. H.

    Kaberry, D.

    Redmayne, M.

    Dance, J. C. G.

    Keegan, D.

    Rees-Davies, W. R.

    Davidson, Viscountess

    Kerby, Capt. H. B.

    Remnant, Hon. P.

    D'Avigdor-Goldsmid, Sir Henry

    Kerr, H. W.

    Renton, D. L. M.

    Deedes, W. F.

    Kershaw, J. A.

    Ridsdale, J. E.

    Digby, Simon Wingfield

    Kimball, M.

    Rippon, A. G. F.

    Donaldson, Cmdr. C. E. McA.

    Kirk, P. M.

    Roberts, Sir Peter (Heeley)

    Doughty, C. J. A.

    Lambert, Hon. G.

    Robertson, Sir David

    Drayson, G. B.

    Lancaster, Col. C. G.

    Robinson, Sir Roland (Blackpool, S.)

    du Cann, E. D. L.

    Leavey, J. A.

    Schofield, Lt.-Col. W.

    Eden, J. B. (Bournemouth, West)

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

    Shepherd, William

    Errington, Sir Eric

    Legh, Hon. Peter (Petersfield)

    Simon, J. E. S. (Middlesbrough, W.)

    Farey-Jones, F. W.

    Lindsay, Hon. James (Devon, N.)

    Smithers, Peter (Winchester)

    Fell, A.

    Lindsay, Martin (Solihull)

    Spearman, Sir Alexander

    Fisher, Nigel

    Linstead, Sir H. N.

    Speir, R. M.

    Fleetwood-Hesketh, R. F.

    Lloyd, Maj. Sir Guy (Renfrew, E.)

    Spence, H. R. (Aberdeen, W.)

    Fletcher-Cooke. C.

    Longden, Gilbert

    Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)

    Fraser, Sir Ian (M'cmbe & Lonsdale)

    Lucas-Tooth, Sir Hugh

    Stanley, Capt. Hon. Richard

    Freeth, D. K.

    McAdden, S. J.

    Steward, Harold (Stockport, S.)

    Galbraith, Hon. T. G. D.

    Macdonald, Sir Peter

    Stoddart-Scott, Col. M.

    Gammans, Sir David

    McKibbin, A. J.

    Studholme, Sir Henry

    Summers, Sir Spencer

    Taylor, Sir Charles (Eastbourne)

    Vane, W. M. F.

    Williams, Paul (Sunderland, S.)

    Taylor, William (Bradford, N.)

    Vickers, Miss J. H.

    Wills, G. (Bridgwater)

    Thompson, Kenneth (Walton)

    Vosper, D. F.

    Wilson, Geoffrey (Truro)

    Thompson, Lt.-Cdr. R. (Croydon, S.)

    Wall, Major Patrick

    Wood, Hon. R.

    Thornton-Kemsley, C. N.

    Ward, Hon. George (Worcester)

    Woollam, John Victor

    Tilney, John (Wavertree)

    Ward, Dame Irene (Tynemouth)

    Turner, H. F. L.

    Waterhouse, Capt. Rt. Hon. C.

    TELLERS FOR THE NOES:

    Mr. Godber and Mr. Anthony Barber.

    New Clause.—(REDUCTION OF PURCHASE TAX FROM 10 PER CENT. TO ¼ OF 1 PER CENT.)
    Part I of the Eighth Schedule to the Finance Act, 1948 (as amended by subsequent enactments and by order of the Treasury under section twenty-one of that Act) shall have effect with the substitution for the words "10 per cent". wherever those words occur, of
    the words "one-quarter of one per cent."—[Mr. H. Wilson.]
    Brought up, and read the First time.
    Motion made, and Question put, That the Clause be head a Second time:—
    The Committee divided: Ayes 154, Noes 200.

    Division No. 239.]

    AYES

    [11.1. p.m

    Ainsley, J. W.

    Griffiths, Rt. Hon. James (Llanelly)

    Orbach, M.

    Albu, A. H.

    Hall, Rt. Hn. Glenvil (Colne Valley)

    Oswald, T.

    Allaun, Frank (Salford, E.)

    Hannan, W.

    Paget, R. T.

    Awbery, S. S.

    Hayman, F. H.

    Palmer, A. M. F.

    Bacon, Miss Alice

    Herbison, Miss M.

    Pargiter, G. A.

    Baird, J.

    Hobson, C. R.

    Parker, J.

    Benson, G.

    Holman, P.

    Parkin, B. T.

    Beswick, F.

    Howell, Charles (Perry Bar)

    Pearson, A.

    Blackburn, F.

    Hoy, J. H.

    Pearl, T. F.

    Blenkinsop, A.

    Hughes, Emrys (S. Ayrshire)

    Price, J. T. (Westhoughton)

    Blyton, W. R.

    Hunter, A. E.

    Probert, A. R.

    Bottomley, Rt. Hon. A. G.

    Irvine, A. J. (Edge Hill)

    Randall, H. E.

    Bowden, H. W. (Leicester, S.W.)

    Irving, S. (Dartford)

    Rankin, John

    Braddock, Mrs. Elizabeth

    Janner, B.

    Redhead, E. C.

    Brockway, A. F.

    Jay, Rt. Hon. D. P. T.

    Robens, Rt. Hon. A.

    Broughton, Dr. A. D. D.

    Jeger, George (Goole)

    Roberts, Albert (Normanton)

    Brown, Rt. Hon. George (Belper)

    Jeger, Mrs. Lena (Holbn & St. Pncs, S.)

    Roberts, Goronwy (Caernarvon)

    Brown, Thomas (Ince)

    Jenkins, Roy (Stechford)

    Short, E. W.

    Burke, W. A.

    Johnson, James (Rugby)

    Shurmer, P. L. E.

    Butler, Herbert (Hackney, C.)

    Johnston, Douglas (Paisley)

    Silverman, Julius (Aston)

    Butler, Mrs. Joyce (Wood Green)

    Jones, Elwyn (W. Ham, S.)

    Simmons, C. J. (Brierley Hill)

    Callaghan, L. J.

    Jones, Jack (Rotherham)

    Slater, Mrs. H. (Stoke, N.)

    Castle, Mrs. B. A.

    Jones, J. Idwal (Wrexham)

    Smith, Ellis (Stoke, S.)

    Coldrick, W.

    Jones, T. W. (Merioneth)

    Sorensen, R. W.

    Collick, P. H. (Birkenhead)

    Kenyon, C.

    Sparks, J. A.

    Corbet, Mrs. Freda

    King, Dr. H. M.

    Stones, W. (Consett)

    Craddock, George (Bradford, S.)

    Lee, Miss Jennie (Cannock)

    Stross, Dr. Barnett (Stoke-on-Trent, C.)

    Crossman, R. H. S.

    Lever, Leslie (Ardwick)

    Summerskill, Rt. Hon. E.

    Davies, Ernest (Enfied, E.)

    Logan, D. G.

    Swingler, S. T.

    Deer, G.

    Mabon, Dr. J. Dickson

    Sylvester, G. O.

    Dodds, N. N.

    MacColl, J. E.

    Taylor, Bernard (Mansfield)

    Donnelly, D. L.

    McGhee, H. G.

    Taylor, John (West Lothian)

    Dugdale, Rt. Hn. John (W. Brmwch)

    McInnes, J.

    Thomas, George (Cardiff)

    Ede, Rt. Hon. J. C.

    McLeavy, Frank

    Thomson, George (Dundee, E.)

    Edwards, Rt. Hon John (Brighouse)

    MacMillan, M. K. (Western Isles)

    Thornton, E.

    Edwards, Rt. Hon. Ness (Caerphilly)

    Mahon, Simon

    Timmons, J.

    Edwards, Robert (Bilston)

    Mallalieu, E. L. (Brigg)

    Tomney, F.

    Edwards, W. J. (Stepney)

    Mann, Mrs. Jean

    Turner-Samuels, M.

    Evans, Albert (Islington, S.W.)

    Marquand, Rt. Hon. H. A.

    Ungoed-Thomas, Sir Lynn

    Evans, Edward (Lowestoft)

    Mason, Roy

    Usborne, H. C.

    Evans, Stanley (Wednesbury)

    Mayhew, C. P.

    Weitzman, D.

    Fernyhough, E.

    Mikardo, Ian

    Wheeldon, W. E.

    Finch, H. J.

    Mitchison, G. R.

    Wilkins, W. A.

    Fletcher, Eric

    Monslow, W.

    Williams, W. R. (Openshaw)

    Forman, J. C.

    Moody, A. S.

    Wilson, Rt. Hon. Harold (Huyton)

    Fraser, Thomas (Hamilton)

    Moyle, A.

    Winterbottom, Richard

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

    Mulley, F. W.

    Woof, R. E.

    Gibson, C. W.

    Neal, Harold (Bolsover)

    Yates, V. (Ladywood)

    Gooch, E. G.

    Noel-Baker, Francis (Swindon)

    Younger, Rt. Hon. K.

    Gordon Walker, Rt. Hon. P. C.

    O'Brien Sir Thomas

    Zilliacus, K.

    Grey, C. F.

    Oliver, G. H.

    Griffiths, David (Rother Valley)

    Oram, A. E.

    TELLERS FOR THE AYES:

    Mr. Horace Holmes and

    Mr. George Rogers.

    NOES

    Aitken, W. T.

    Arbuthnot, John

    Baldwin, A. E.

    Allan, R. A. (Paddington, S.)

    Armstrong, C. W.

    Balniel, Lord

    Amery, Julian (Preston, N.)

    Ashton, H.

    Barlow, Sir John

    Amory, Rt. Hn. Heathcoat (Tiverton)

    Atkins, H. E.

    Barter, John

    Anstruther-Gray, Major Sir William

    Baldock, Lt.-Cmdr. J. M.

    Baxter, Sir Beverley

    Bell, Philip (Bolton, E.)

    Harrison, Col. J. H. (Eye)

    Nabarro, G. D. N.

    Bennett, F. M. (Torquay)

    Harvey, Air Cdre. A. V. (Macclesfd)

    Nairn, D. L. S.

    Bidgood, J. C.

    Harvey, John (Walthamstow, E.)

    Neave, Airey

    Biggs-Davison, J. A.

    Heald, Rt. Hon. Sir Lionel

    Nicholls, Harmar

    Bishop, F. P.

    Heath, Rt. Hon. E. R. G.

    Nicolson, N. (B'n'm'th, E. & Chr'ch)

    Black, C. W.

    Hill, Mrs. E. (Wythenshawe)

    Nield, Basil (Chester)

    Body, R. F.

    Holland-Martin, C. J.

    Nugent, G. R. H.

    Bossom, Sir Alfred

    Holt, A. F.

    Oakshott, H. D.

    Boyle, Sir Edward

    Hornby, R. P.

    O'Neill, Hn. Phelim (Co. Antrim, N.)

    Braine, B. R.

    Hornsby-Smith, Miss M. P.

    Orr-Ewing, Charles Ian (Hendon, N.)

    Brooke, Rt. Hon. Henry

    Howard, Hon. Greville (St. Ives)

    Page, R. G.

    Browne, J. Nixon (Craigton)

    Hudson, Sir Austin (Lewisham, N.)

    Pannell, N. A. (Kirkdale)

    Bryan, .

    Hudson, W. R. A. (Hull, N.)

    Peyton, J. W. W.

    Burden, F. F. A.

    Hughes Hallett, Vice-Admiral J

    Pilkington, Capt. R. A.

    Butler, Rt. Hn. R. A. (Saffron Walden)

    Hughes-Young, M. H. C.

    Pitman, I. J.

    Carr, Robert

    Hylton-Foster, Sir H. B. H.

    Pitt, Miss E. M.

    Chichester-Clark, R.

    Irvine, Bryant Godman (Rye)

    Powell, J. Enoch

    Cole, Norman

    Jenkins, Robert (Dulwich)

    Price, Henry (Lewisham, W.)

    Conant, Maj. Sir Roger

    Jennings, J. C. (Burton)

    Prior-Palmer, Brig. O. L.

    Cooper, Sqn. Ldr. Albert

    Jennings, Sir Roland (Hallam)

    Raikes, Sir Victor

    Cooper-Key, E. M.

    Johnson, Dr. Donald (Carlisle)

    Ramsden, J. E.

    Cordeaux, Lt.-Col. J. K.

    Johnson, Eric (Blackley)

    Redmayne, M.

    Corfield, Capt. F. V.

    Jones, Rt. Hon. Aubrey (Hall Green)

    Rees-Davies, W. R.

    Crouch, R. F.

    Joseph, Sir Keith

    Remnant, Hon. P.

    Cunningham, Knox

    Kaberry, D.

    Renton, D. L. M.

    Currie, G. B. H.

    Keegan, D.

    Ridsdale, J. E.

    Dance, J. C. G.

    Kerby, Capt. H. B.

    Rippon, A. G. F.

    Davidson, Viscountess

    Kerr, H. W.

    Roberts, Sir Peter (Heeley)

    D'Avigdor-Goldsmid, Sir Henry

    Kershaw, J. A.

    Robertson, Sir David

    Deedes, W. F.

    Kimball, M.

    Robinson, Sir Roland (Blackpool, S.)

    Digby, Simon Wingfield

    Kirk, P. M.

    Schofield, Lt.-Col. W.

    Donaldson, Cmdr. C. E. McA.

    Lambert, Hon. G.

    Shepherd, William

    Doughty, C. J. A.

    Leavey, J. A.

    Simon, J. E. S. (Middlesbrough, W.)

    Drayson, G. B.

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

    Smithers, Peter (Winchester)

    du Cann, E. D. L.

    Legh, Hon. Peter (Petersfield)

    Spearman, Sir Alexander

    Eden, J. B. (Bournemouth, West)

    Lindsay, Hon. James (Devon, N.)

    Spence, H. R. (Aberdeen, W.)

    Errington, Sir Eric

    Lindsay, Martin (Solihull)

    Spens, Rt. Hn. Sir P.(Kens'g't'n, S.)

    Farey-Jones, F. W.

    Linstead, Sir H. N.

    Stanley, Capt. Hon. Richard

    Fell, A.

    Lloyd, Maj. Sir Guy (Renfrew, E.)

    Steward, Harold (Stockport, S.)

    Fisher, Nigel

    Longden, Gilbert

    Stoddart-Scott, Col. M.

    Fleetwood-Hesketh, R. F.

    Lucas-Tooth, Sir Hugh

    Studholme, Sir Henry

    Fletcher-Cooke, C.

    McAdden, S. J.

    Summers, Sir Spencer

    Foster, John

    Macdonald, Sir Peter

    Taylor, Sir Charles (Eastbourne)

    Fraser, Sir Ian (M'cmbe & Lonsdale)

    McKibbin, A. J.

    Taylor, William (Bradford, N.)

    Freeth, D. K.

    Mackie, J. H. (Galloway)

    Thompson, Kenneth (Walton)

    Galbraith, Hon. T. G. D.

    McLaughlin, Mrs. P.

    Thompson, Lt.-Cdr. R. (Croydon, S.)

    Gammans, Sir David

    Maclay, Rt. Hon. John

    Thornton-Kemsley, C. N.

    Garner-Evans, E. H.

    McLean, Neil (Inverness)

    Tilney, John (Wavertree)

    George, J. C. (Pollok)

    Macleod, Rt. Hn. Iain (Enfield, W.)

    Turner, H. F. L.

    Gibson-Watt, D.

    MacLeod, John (Ross & Cromarty)

    Vane, W. M. F.

    Gower, H. R.

    Macmillan, Rt. Hn. Harold (Bromley)

    Vickers, Miss J. H.

    Graham, Sir Fergus

    Maddan, Martin

    Vosper, D. F.

    Grant-Ferris, Wg Cdr. R. (Nantwich)

    Maitland, Hon. Patrick (Lanark)

    Wall, Major Patrick

    Green, A.

    Manningham-Buller, Rt. Hn. Sir R.

    Ward, Hon. George (Worcester)

    Gresham Cooke, R.

    Markham, Major Sir Frank

    Ward, Dame Irene (Tynemouth)

    Grimston, Hon. John (St. Albans)

    Marlowe, A. A. H.

    Waterhouse, Capt. Rt. Hon. C.

    Grimston, Sir Robert (Westbury)

    Marples, A. E.

    Williams, Paul (Sunderland, S.)

    Grosvenor, Lt.-Col. R. G.

    Mathew, R.

    Wills, G. (Bridgwater)

    Gurden, Harold

    Maude, Angus

    Wilson, Geoffrey (Truro)

    Hall, John (Wycombe)

    Mawby, R. L.

    Wood, Hon. R.

    Harris, Frederic (Croydon, N.W.)

    Maydon, Lt.-Comdr, S. L. C.

    Woollam, John Victor

    Harrison, A. B. C. (Maldon)

    Molson, Rt. Hon. Hugh

    TELLERS FOR THE NOES:

    Mr. Godber and Mr. Anthony Barber.

    New Clause.—(REBATES OF CUSTOMS DUTY AND EXCISE DUTY ON HYDROCARBON OILS FOR USE IN PUBLIC SERVICE VEHICLES DRIVEN BY DIESEL FUEL.)
    On and after the first day of September, nineteen hundred and fifty-six, there shall be allowed from the customs duty a rebate at the rate of two shillings and sixpence a gallon and from the excise duty a rebate at the rate of one shilling and threepence a gallon on the delivery of hydrocarbon oils for use in any mechanically propelled vehicle driven by diesel fuel and licensed as a public service vehicle for the carriage of passengers.—[Mr. Ernest Davies.]
    Brought up, and read the First time.
    Mr. Ernest Davies: I beg to move, That the Clause be read a Second time.
    I do so in the hope of persuading the Financial Secretary to concede the full rebate of the half-crown tax on diesel oil when used in public service buses and coaches. The Clause is confined to them because there has been a steady deterioration in local transport services on account of rising costs.
    We have had a number of debates on rural transport, and attention has been drawn to the rising costs, with the consequent higher fares and the dropping of a

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    large number of unremunerative services. The fuel tax is heavy, being 240 per cent. of the cost of the oil. This falls very hard on the public-service vehicle operator, and is a considerable factor in his costs. I understand that it works out at about 10 per cent. per car-mile of the operating costs, which are about 2s. 6d. per car-mile.
    Before the war, the loss on unremunerative services worked out at about 1d. or 2d. a mile. Because of increased costs—to which the fuel tax has considerably contributed—including, of course, wages, the loss on unremunerative services, mainly on country services, has risen to 6d. or one shilling per car-mile.
    In fact, after the wages bill, the fuel tax—and I emphasise the tax, and not the overall cost of the fuel—is the heaviest item in the cost of operating public service vehicles. We suggest the complete rebate in the case of these vehicles in order to prevent a further rise in fares and certainly to slow down that process even if it should not permit of a reduction.
    We suggest that the rebate should be limited to these vehicles, and, of course, we are not so optimistic as to think that an actual reduction of fares could take place because of this Clause; but we do believe that it would lead to a slowing down of the increases which are part of the inflationary spiral which the Government have brought upon the country. This is a reasonable proposition because by limiting the rebate to the type of vehicle for which we plead, the cost, in relation to the large amount raised by fuel taxation, is not high.
    I was informed, in answer to a Parliamentary Question, that the cost would be only about £30 million for that type of vehicle; that is, if there was a complete rebate. If the tax was reduced by sixpence, the cost would be only £6 million, so that if the Chancellor would proceed by stages of that kind, the cost to him would be very small.
    Delegations have been seen at the Treasury by, I think, the Economic Secretary, who argued that if a rebate was given for road passenger vehicles that very fact would encourage the drift from petrol to diesel-engine buses and coaches, with a consequent loss of taxation on the vehicles converted from petrol to diesel oil motors. But there
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    is no validity in that argument because the figures show that the conversion from petrol to diesel oil has been progressing steadily during recent years. Today, the percentage of diesel driven vehicles, compared with the petrol type, is very high.
    In fact, the number of petrol-engine vehicles engaged in road passenger work is only about 23 per cent. of the total number of public service vehicles. That is to say—and this is according to figures given to me in a Parliamentary Answer—of the 74,706 public service vehicles operating, 60,278 were diesel engined, and only 14,428 were petrol engined. So that if the total number of petrol driven vehicles was got rid of and diesel vehicles substituted, the loss of revenue to the Treasury would not be very great. Of course, that is not likely to happen, but the steady rate of conversion appears likely to continue. It seems that there would be a loss of only about £2,250,000 if there was a complete conversion to diesel engines so far as public service vehicles are concerned.
    It has also been argued on previous occasions when this matter has been discussed—and I understand that it was an argument used by the Economic Secretary when a deputation visited the Treasury—that it was not fair to discriminate between different users of road transport. It was said that if there was discrimination in favour of road passenger transport the road haulage industry would have grounds for complaint. As it happens, of course, there is no competition between road passenger services and the road haulage industry because they do not overlap, and are quite unrelated. As far as road transport is concerned, the passenger and the goods vehicles are entirely separate and the two kinds of transport operate as distinct industries.
    11.30 p.m.
    I suggest that neither of the two reasons so far given by the Treasury why this rebate cannot be given, first, because it would encourage the conversion to diesel oil engines and would therefore mean a greater loss to the Treasury, and, secondly, that it would be unfair discrimination, are valid reasons. As a matter of fact there has been discrimination in regard to petrol and diesel fuels in the past. When the petrol tax was first introduced in 1928 by the then Chancellor of the Exchequer the right

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    hon. Member for Woodford (Sir W. Churchill), it was only imposed on light fuels—all diesel and heavy oils were exempted. It was not until 1935 that heavy fuel was taxed. Therefore, such discrimination was presumably, successfully administered over that long period.
    Discrimination already exists as between the different users of heavy fuels because the only section of industry which is taxed in respect of diesel fuel is the road transport section. Where diesel oil is used for traction purposes on the railways it is not taxed, and, similarly, it is not taxed where it is used for other purposes unconnected with road transport. Indeed, a very small proportion—only some 15 per cent.—of the diesel oil imported into this country is subject to the 2s. 6d. tax.
    In other countries there is discrimination in taxation as between heavy and light fuels, and I find that in every one of the Western European and Commonwealth countries about which I have been able to obtain information there is a heavier tax on petrol than on derv. If it has been found administratively possible for that discrimination to operate in those countries, then surely it can be done in this country.
    It has been further argued by the Treasury that a remission of this tax in regard to road passenger vehicles would be inflationary because it would cost the Treasury £30 million and that the money thus lost to it would be put into circulation. I maintain that the contrary would be the case.
    The Government are attempting to pursue a policy of standstill on rising prices, but unless some action is taken to relieve the road transport industry of the heavy burdens imposed upon it there will unquestionably be further rises in fares. If this tax were abolished in respect of passenger vehicles it would enable a standstill in fares to be maintained. Certainly the fuel tax has been responsible to a large extent for the increases in fares which have taken place. Up to 1950, when the tax was doubled, there were very few increases, but since 1950 fares have risen on several occasions.
    If nothing is done I fear a serious deterioration in services operated not only in rural districts, where they are being reduced in frequency or eliminated
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    altogether, but the frequencies may be changed, particularly at peak hours. According to a great number of operators, that would have to be done because of the high incidence of the tax and other increasing costs. Already municipalities which operate a large number of transport services, particularly in urban areas, are having to draw on the rate funds to meet deficits. I understand that at present half the municipalities are operating services at a loss and having to draw on the rate funds, which is undesirable and should be eliminated if possible.
    When the Lord Privy Seal was Chancellor of the Exchequer, he stated, in his television debut during the Election last year:
    "The reduction of taxation on petrol and diesel oil occupies a high priority in my thoughts."
    Since the Election he has had much else to think about, and recently, no doubt, he has been thinking about Tonbridge. At that date last year at least he did consider that this question of the high taxation of fuel oil was worthy of consideration.
    I ask the Financial Secretary, when he replies, to produce some more convincing arguments than have so far been produced by the Treasury to the suggestion which we have frequently made that something should be done to relieve the high costs of public transport services, particularly passenger services. I suggest that there will be further deterioration in the services, if he does not take any action. To reduce or abolish the fuel tax is practical. It would not cost much and certainly it would be the cheapest way in which relief could be brought to the industry—that is to say, at the least cost to the Treasury. I ask the Financial Secretary tonight to give us at least some encouragement that this suggestion will be considered and, if the needs of this section of the transport industry are considered, something will be done to relieve them.
    Mr. Frank McLeavy: I wish to support the Clause. I think all hon. Members will appreciate that during the period prior to the 1950 Budget transport undertakings throughout the country generally maintained a very reasonable, low level of fares. Despite

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    increased prices on every hand, the transport industry, when the tax was 9d. a gallon on this fuel oil, showed remarkable restraint about fares. Between 1950 and 1952 the tax rose to 2s. 6d. per gallon, which represents an increase of no less than 214 per cent., and also represents from 12 to 16 per cent. of the industry's total operating costs. Taking into consideration the heavy increase in the cost of vehicles and the increases in wages due to the rising cost of living, I think the Committee will clearly understand that the passenger transport industry has been placed in a very difficult financial position.
    In Bradford and other Yorkshire cities and towns where municipal undertakings operate, the tax represents a sum of over 3d. per mile, and I am sure that that is a fair average for the rest of the country. It is far too heavy a tax on an industry which has for many long years been making such a fine contribution towards keeping down the cost of transport.
    My hon. Friend the Member for Enfield, East (Mr. Ernest Davies) referred to the financial difficulties of the municipal undertakings. It is true that about 50 per cent. of them will be very seriously in debt during the present financial year. There are only two ways to meet that debt—put it on the rates or increase the fares. I submit that it is unreasonable that the transport industry should be so severely penalised when it is trying to maintain a standard of fares which bears no comparison with the present high cost of goods and commodities.
    The National Federation of Women's Institutes, which deals with the country life of our people, at a conference in London, passed a resolution protesting to the Minister of Transport against the reduced services in the country districts. Within the last few weeks we have had a very interesting debate here during the course of which hon. Members on both sides made the strongest representations to the Minister of Transport about the serious decline in the rural services because of the lack of finance by the transport industry. It is quite clear that the only remedy for those reduced services in the rural areas is to make it possible for omnibus undertakings to meet the cost of these unremunerative services by reduced taxation.
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    11.45 p.m.
    I entirely agree with the people in the rural areas in thinking that they are entitled to a fair and reasonable system of passenger transport. I know very well that the Traffic Commissioners have been doing all they can to get the various bus undertakings to carry on as many unremunerative services as possible. With the financial position as it is, however, with rising costs, with rising wages, it is physically impossible for many of the bus undertakings to maintain their present unremunerative services in the country areas. The reason why there are complaints from the Federation of Women's Institutes and the countryside generally is that successive Chancellors of the Exchequer have not realised how important it is that the passenger transport industry should be freed from this penal tax.
    It is rather difficult to understand why it is that only the passenger and goods transport industry pays the tax at all. The bulk of the production of this type of fuel oil is used in industry, on the farms, and by the railways with their new diesel cars, which, incidentally, are coming into competition with road passenger vehicles. The industry is entitled to some consideration in face of the financial difficulties which confront it.
    The aim of the Chancellor is to try to keep down prices. If he is to succeed, he cannot expect the omnibus undertakings to go on losing money, or the municipal undertakings to go on asking the ratepayers to bear their losses. It would be a contribution to keeping down the cost of living if he were to make a substantial concession to road passenger transport, to enable it to maintain a reasonable structure of stage fares. It is vitally important to the well-being of our people that our transport charges and fares should be as reasonable as possible. Hundreds of thousands of our workpeople travel to their work by omnibus, and they will be immediately affected by any further increase in fares, and, if an increase occurs, they will rightly ask for a further increase in wages.
    I urge the Chancellor to realise how important it is to come to the aid of the transport industry. I repeat that the transport industry has set a really good example of public service. It has kept fares reasonable; it has applied every

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    possible economy to keep down expenses; but it is faced today with a very serious financial situation. Although I would be the last person in the world to suggest that even if the Clause were accepted that would in itself be the solution to our problems, I suggest that the Chancellor should at least make a contribution towards their solution by this concession to the undertakings which are anxious and are trying to keep down the cost of transport throughout the country. That is worthy of the Government's support. The industry is entitled to this consideration, which would assist the efforts of the Chancellor to keep down the cost of living.
    Mr. H. Brooke: One of the facts which, I think, is universally agreed in this somewhat controversial subject is that the duty accounts for not more than ½d. out of a 3d. fare. That, indeed, accords with the figure which the hon. Member for Bradford, East (Mr. McLeavy) gave of approximately 16 per cent. Duty is imposed on derv in order to protect the petrol duty, if I may use the word "protect" in that unpleasant fiscal sense which it has. The duty on hydrocarbon oil last year brought in about £325 million, an extremely valuable item in the Budget revenue of my right hon. Friend. Of that sum about £54 million came from derv.
    As I said in answer to a Question by the hon. Member for Enfield, East (Mr. Ernest Davies) some months ago, we calculate that if a Clause of this kind were to become part of the law the loss of revenue would approximate to £30 millon. Hon. Members have pleaded for this Clause on various grounds. One was that it would help to solve the problem of the rural bus services. In fact, as I am sure they are aware, a considerable proportion of the rural bus services are run by petrol-engined buses and not by diesel-engined buses.
    If one is seeking to assist rural bus transport, this would be a very expensive way of going about it. I am not arguing that it would be impossible, but the advantage from this concession would accrue in the first instance and directly to the large undertakings with fleets consisting entirely, or almost entirely, of diesel-engined buses and coaches rather than to the smaller operators who are
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    still relying on petrol-engined buses and who might well not have the financial resources with which to re-equip themselves with vehicles that would be able to take advantage of this concession.
    Mr. Ernest Davies: I know that the right hon. Gentleman does not want to exaggerate. He is aware, is he not, that nearly 9 per cent. of the mileage of the road passenger vehicles is done on petrol at present? The percentage is very small and as there is a long mileage in the rural areas, I suggest that he is painting rather too gloomy a picture.
    Mr. Brooke: There is some difference of opinion, as the hon. Members know, as to exactly how much of the present yield is from petrol-engined buses.
    The hon. Member for Enfield, East would not dissent from the main point I am making which is that the petrol-engined buses are to be found largely in the rural areas among the smaller bus undertakings, and they would gain nothing from this Clause. Of course, one of the effects of the Clause would be to provide a strong incentive to any firm which was in a position to change over to do so and get away from petrol. This would stimulate the switch from petrol to diesel vehicles. I am not quite sure how much importance or difficulty the hon. Members see in that.
    It strikes me that if the Clause were accepted, it would simply open the way to another concession on which I have, in the past, received strong representations: that is, that all road users should be relieved of duty on derv, the commercial vehicles as well. From that, the next step would be to demand, in the interests of equality, that all commercial vehicles, whether diesel engined or petrol engined, should be relieved; and so the prospective loss of revenue, if one makes any change in the law, is apt to mount up.
    The hon. Member would perhaps argue, although some of his hon. Friends in the past have argued to me on opposite lines, that the position could be held at this point, that one could accept the Clause and no more. If he argues like that, however, I think he would find that he gravely underestimates the risk of abuse, for we would increase enormously the amount of diesel oil which, in future, is to be free of duty and

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    we would have these two large classes of road user—passenger vehicles and goods vehicles—one using derv which is dutiable and one using derv which is free of duty.
    Earlier today we have had many pleas, to one at least of which I have responded, to reduce to a minimum the amount of bureaucratic control that we must endure. I warn the Committee, however, that if we were to provide this sharp distinction in the duty situation of derv according to whether it goes into a goods vehicle or a passenger vehicle on the road, we should be letting loose for ourselves bureaucratic control on an almost inconceivable scale. That is one consequence, apart from the loss of £30 million of revenue which my right hon. Friend cannot afford, that would flow from the acceptance of the Clause.
    If the hon. Member argues that the risk of abuse must be overcome by extending the exemption to derv used in goods vehicles, the £30 million quickly mounts up into a much larger figure, and gradually my right hon. Friend—indeed, any Chancellor, of any party—would see his £325 million from the duties on hydrocarbon oil being filched away. On all those grounds, I must strongly advise the Committee not to accept the Clause.
    12 midnight.
    Mr. G. H. Oliver: I listened with great attention to what the Financial Secretary had to say. I am well aware that this is not a new problem to him. I understand that a deputation saw him earlier in the year and advanced many points which have been advanced here tonight. I was, however, surprised to hear the right hon. Gentleman try to distinguish between the petrol-driven vehicle and the diesel-engined vehicle and say that one was mainly concerned in rural transport and the diesel vehicle on the much larger and busier routes. I have been concerned with road traffic and transport problems for many years, and that was certainly the first time I have heard it suggested that the petrol buses are on the rural routes and the other vehicles are on the more general routes.
    Whatever happens, it is quite evident from the record and history of the industry that the petrol engine is on its way out. Only 9 per cent. of the millions of miles run by the public service vehicles
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    are run on petrol engines, and there is no doubt that as years succeed years the petrol engine will disappear altogether.
    One of my hon. Friends who has spoken tonight referred to the protests which he had had from Women's Institutes. I can assure him that I have had many protests from my own constituency, from men and women who must travel in the mornings to work, at Nottingham, Derby, the British Celanese, at Spondon, and a host of places which take them far from home. The question of bus fares is a very considerable item in their weekly budget.
    I am sure that the operators have done all they can to keep their costs as low as possible. They have introduced a new, lighter bus, which is much more efficient, the one-man bus on rural services, and other improvements, all with the idea of keeping down costs. But they cannot work against the economic tide of the country. Their wages must go up with the trend of wage increases throughout the country. Their maintenance costs, their costs of repairs, and overheads—all those are outside their particular control.
    But there is one thing they can do: they can come to this House and draw attention to the fact that the petrol tax amounts to about 3d. a mile—a substantial item in the running costs and the fares which the bus companies have to charge.
    Nor could I follow with great conviction what the Financial Secretary said about distinguishing between the passenger service and the road haulage industry. The duty must be transferred to the passengers, because they are carried by the bus. In respect of road haulage and the variety of things carried by the lorries, however, it is impossible to isolate the tax and say how much is being transferred to the many varieties of commodities carried. It filters through, and I have no doubt that if the whole tax were removed from road haulage it would not, and could not, peter through and show itself in the cost of the commodity carried.
    A very different story presents itself in respect of passenger transport. Therefore, I was hoping—though my hopes were rather dashed by the Financial Secretary—that if he would not concede the

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    whole of this request he would, at any rate, be prepared tonight to concede some portion of this. This small consumption, which is only a sixth of the consumption of fuel oil in this country, bears this heavy tax of 240 per cent.
    The industrial oil, which goes to industry other than motor transport, is free of tax, but when the same oil goes to the road passenger industry and the road traffic industry generally, in the name of derv, a tax of 2s. 6d. a gallon is imposed. That means that five-sixths of the oil used in this country is free of tax. The only portion which is taxed and taxed very severely is that on which the tax is paid by the ordinary working men and women who have to ride about on our highways.
    I do not know whether the right hon. Gentleman is prepared to look at the matter again, but I feel that he has not heard the last of it, because this is something which has a vital bearing on a very important service.
    Mr. G. A. Pargiter: Whenever this case has been argued from the Treasury Bench, the replies have always been much weaker than the case, whether it has been for the limited concession for which we are now asking, or the wider concessions for which we have asked in the past. The level of response to the arguments we put forward is becoming very low. In fact, no real argument has been put forward by the Government.
    The right hon. Gentleman talked about petrol buses in rural areas, but those are becoming fewer and fewer almost every week, because in these days nobody buys a petrol bus. The largest vehicle of that kind used in that sort of passenger service is something like the station vehicle and even those are being converted into diesel vehicles, as are ambulances and sitting-case vehicles, and so on. The oil engine, or compression ignition engine, is no longer confined to heavier vehicles.
    The number of petrol-engined vehicles of this kind is rapidly shrinking and will continue to shrink. Therefore, the argument that this concession would not help the people whom we want to help, because they use petrol-engined vehicles, is about the weakest argument on this matter ever adduced from the Treasury
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    Bench. The right hon. Gentleman would have some difficulty finding a vehicle larger than a 26-seater which was not a diesel-engined vehicle.
    I have been associated with this question for a long time. I remember the start of the oil engine, when we imported the Junkers engine to start this revolutionary means of transport. Every encouragement was given by the Government of the day to this development, which was recognised as being a cheaper and more efficient form of the use of combustible fuel. That should still be the Treasury's aim.
    It should not be a case of whether or not we can afford to convert the remaining petrol engines. We should encourage such conversion, because of the great economy which comes from using a diesel engine instead of a petrol engine. With lighter vehicles there is probably nearly twice as much mileage from the compression ignition engine as from the petrol engine, and with larger vehicles the figure would be no less than 50 per cent. and in many cases 75 per cent.
    All the arguments favour the compression ignition engine. It cannot be said that the Treasury cannot afford to make the concession, because the concession will have to be made, or inevitably there will be increased fares. The case about losses on rural bus services has already been made. The larger undertakings realise that not all services pay and that some of the good services have to help to pay for the bad. That is generally accepted in the transport industry—especially in the passenger side—but there is a limit to which that can be done.
    There comes the limit when there are no services, or prices increase with consequent wage demands. Transport is one of the things which has an important bearing on wage demands. It has an immediate impact upon the worker. He has to pay more fares. Yet the Government can do nothing to prevent this, even in a small way. The Financial Secretary conceded the argument that it meant ½d. upon a 3d. fare, day in and day out, twice or four times a day, and that means a fairly considerable sum in the course of a year. In any case, the figure is hardly deducible, because it will vary according to all sorts of different factors. In some cases it may amount to 1d. upon a 3d. fare, rather than ½d.

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    I do not know how the Financial Secretary arrives at this figure. I cannot find any means of doing so. In any case, any saving which can be made at this juncture would be a worth-while contribution to the overall economic policy of the Government, and I should have thought that we might have expected something more than we have got.
    A still weaker argument is that if this concession were made it would be open to abuse. Let us face the position. The British Transport Commission has in its service an increasing number of diesel-driven railcars. It also has very large fleets of vehicles which use exactly the same fuel as the railcars; in fact, a similar type of engine is used in both vehicles. I take it that any amount of argument which we adduce will have no effect upon the Government Front Bench, so it does not matter whether right hon. Gentlemen opposite listen to me or not. We shall not get very far with them.
    I want to deal with this question of abuse. There is very little possibility of that in the case of a rebate of the tax on fuels, because returns have to be made and they can be checked. It is not a difficult operation. The Government cannot pretend that it is, because it is already done in so many other directions that it can be done quite easily in this. The Government are apparently not worried about the Transport Commission, because it uses diesel oil for its road vehicles upon which it has to pay tax, and exactly the same fuel in its railcars, upon which it does not have to pay tax. There will be no difficulty in regard to the limited number of cases where an undertaker has a road transport service as well as a passenger transport service, because separate accounts will have to be kept for the purpose of running the public service vehicles.
    The arguments advanced from the Treasury Bench are getting weaker each year. We have now reached the stage where a plain "No" is given, without any proper reason being advanced. That is not good enough, and unless the right hon. Gentlemen change their minds we should do something to make them do so.
    Mr. A. G. Bottomley: We are now entering the final stages of this debate and, speaking for the Opposition—and, I am quite certain, for many hon. Members opposite—I must
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    say that the response from the Government upon all the matters which have been raised has been most disappointing; and particularly in connection with this one. A concession was made earlier for a different kind of spirit, and we thought that that was a forerunner of greater success at this stage; but apparently it is not to be.
    My hon. Friends who have already joined in the debate upon this matter speak with great authority and knowledge. I cannot speak with the same authority or knowledge, but because I represent the constituency of Rochester and Chatham I am conscious of the fact that at one time we had the dockyard, from which the ships used to go out by sea, and also the flying boat works of Short Brothers, whose aircraft used to fly away, but apart from that we had very little transport of any kind. Since Short Brothers went, however, we have developed a more diversified industry, and I am very much aware of the need to do something to help the industrial organisations which have to use road transport.
    Quite recently, I have been supplied with the particulars relating to transport costs in a case which has been drawn to the attention of the Minister, concerning the delays which occur on the by-pass road. I was astonished at the heavy cost of diesel oil used by these industrial organisations in carrying their goods from one place to another.
    12.15 a.m.
    The Financial Secretary talked about discrimination and abuse. Discrimination is no new thing. It has been practised with regard to fuel generally. Indeed, when the tax was first introduced in 1903, there was discrimination, because so far as passenger and goods traffic was concerned it was charged at half-rate. In 1921 there was no tax at all on this kind of vehicle movement. It was not until 1935 that the same rate was made chargeable. So that discrimination has existed in the past and could easily exist again, without the repercussions which the Financial Secretary fears.
    The right hon. Gentleman said that it would be expensive to make the concession, and I cannot disagree with him, but it would not be as expensive as all that. If I understood the figures of the right hon. Gentleman, it would mean that

    443
    about one-seventh of the revenue would be lost, if this concession was given. My hon. Friend the Member for Enfield, East (Mr. Ernest Davies) said that not all the concession need be given at once. A scheme could be worked out whereby there was a gradual reduction until at last what was wanted in the way of reduced tax could be conceded. If the Lord Privy Seal still adheres to what he said when he was Chancellor, that any tax which exceeds 100 per cent. is not a fair tax, the argument here is more than justified, because here the figure is 250 per cent. I do not think that that could be called fair on any basis.
    As a result of my previous Ministerial experience, I am interested in exports, and if a reduction in tax would lead to a change-over from petrol to diesel engines I should regard it as a desirable thing. The diesel engine will develop fast, and if, by a tax reduction, we could concentrate on new designs and improved diesel engines, it would prove a long-term benefit. We should be able to get into overseas markets and what we lost on tax revenue we might gain in foreign currency.
    The Financial Secretary also said that a tax rebate would lead to abuse and would need a lot of bureaucratic control. I should have thought that there was a way to overcome that. Surely it is possible to devise a system of rebate on audited certificates of the consumption of this heavy oil.
    Finally, there is the point about the cost of living. I am sure hon. Gentlemen opposite would agree that they have been lobbied by their constituents about the high cost of living. High fares are one of the things would send up the cost of living, and we should do something to tackle that question. The Chancellor says that his Budget is designed to stimulate saving. If the workers are not to be allowed to keep some money in their pockets, they will never be able to save. If we are able to reduce fares in this way, we shall be making a contribution towards saving.
    Mr. Charles A. Howell: There is one point which has not yet been made and I wish to emphasise it. It would appear that every Chan-
    444
    cellor of the Exchequer, including the present one, has found it difficult, if not impossible, to discover any new source of revenue. It seems that once a tax has been imposed, it is a crime ever to remove it, no matter whether it can be justified or not. I suggest that the Financial Secretary made no effort to justify this tax. He trotted out the usual excuse, which has been advanced time after time, that the Chancellor needs the money. I do not doubt that his right hon. Friend needs it, but it is strange, even tragic, to find that only 12 months ago they threw away £150 million that they had surplus.
    We are told tonight that the proposed new Clause cannot be entertained because the Chancellor wants the £30 million. The tax on derv is unfair in relation to other taxes that the right hon. Gentleman has put on. The increase of taxation on derv since the fuel was introduced is out of proportion to other taxes. The Chancellor might well need the money, but I suggest that he should pay more attention to a fair and even distribution of taxes in order to get it. The sum of £30 million may seem large, but it is small in proportion to the Budget, and if it were redistributed back in the industry, it would have a great effect.
    At the last General Election the motor industry circulated questions to every candidate asking whether he was in favour of this tax. It would be extremely interesting to know how many hon. Members replied to the circular in favour of removing the taxes on petrol and diesel oil. I hope that hon. Gentlemen who said they were will follow us into the Lobby in support of the proposed new Clause.
    Question put and negatived.
    First, Second and Third Schedules agreed to.

  Fourth Schedule.—(REPEALS.)
  Amendment made: In page 60, line 9, at end insert:

  11 & 12 Geo. 6. c. 49.

  The Finance Act, 1948.

  Section seventy-two.

  —[Mr. H. Brooke.]

  Schedule, as amended, agreed to.
  Bill reported, with Amendments; as amended, to be considered upon Monday next and to be printed. [Bill 155.]

NATIONAL COAL BOARD HOUSE, SWILLINGTON (TENANCY)
Motion made, and Question proposed, That this House do now adjourn—[Mr. T. G. D. Galbraith.]
12.23 a.m.
Mr. Albert Roberts: I am raising on the Adjournment a very personal and urgent case, because I want to prevent an impending injustice. It concerns a constituent of mine, Mr. J. L. Speedy, of 9, Astley Lane, Swillington. Mr. Speedy lives in that house, which is now owned by the National Coal Board, and he has been told since his retirement that he must vacate the property. He has lived in the house since 1925. It was built by the then private owners of the colliery, and Mr. Speedy was never under the impression that he would have to vacate it at the age of 65. Being a good living man, he prepared himself for retirement in the village where he had worked and spent his life for many years; and, furthermore, since the property came into the ownership of the National Coal Board, Mr. Speedy has paid the rates as well as the rent, and also done some excellent repairs.
It must, therefore, have come rather as a bombshell when the area general manager of the Board told him on 15th July, 1955, that he must vacate the house. In his dismay, Mr. Speedy contacted the local authority to see whether it could do anything about the matter or about rehousing him. This is only cottage property, situated among property belonging to the local authority, and to any detached observer this cottage would be taken as belonging to the local authority.
In dealing with this case I am bound to give some dates. Mr. Speedy was interviewed by the area general manager on 30th September, 1955, but evidently no agreement was reached. I cannot, in this connection, understand the point that he was offered a new house of the Coal Board which had been provided for an operative miner, because this would have meant that Mr. Speedy would have had to pay three times more rent.
Mr. Speedy is a man who has given a lifetime of service to the coal industry, yet he is asked to leave or is expected to
446
tenant another house belonging to the Board and pay three times as much rent. It is callous treatment. He was later interviewed by the area housing manager and then offered a slum cottage;it can only be described as such. Mr. Speedy, being a respectable man, would not accept slum cottage; and it is interesting to note that Mr. Speedy's successor at the pit had been offered this same cottage and had refused to occupy it. The Parliamentary Secretary must surely agree that the Board was not seriously handicapped by not having Mr. Speedy's cottage.
There seems to have been some concern about getting Mr. Speedy out of the cottage, because it is let at a cheap price. There are 24 houses belonging to the Board in this district, and about 150 belonging to the local authority; and the strange thing is that many of the tenants of those 24 houses, who do not belong to the mining industry, are left undisturbed. I have always tried to work in co-operation with the Board, having spent many years of my life in the miningindustry, but when this case was brought to my notice I was greatly disturbed. Knowing the industry and knowing the houses provided for officials, I could not understand why Mr. Speedy has to be removed.
If one goes to a mining area, one sees the type of houses in which the general manager, the assistant manager, the civil engineer and the other executives live. There can be no argument about wanting the electrician to live adjacent to the colliery. I know that in that part of the country men with executive jobs live six or seven miles from the colliery, but in these days of modern transport that does not offer any difficulty. Therefore, the Coal Board has no argument about wanting Speedy's successor to live at the colliery.
I have lived in the area for more than 40 years, and I am prepared to say that I know more about this sort of matter than some of the Board's officials. When I saw the deputy-chairman of the Board, in London, after receiving a very curt letter, I put the facts before him. There was no doubt about it that Mr. Latham had no reply to make to my points. He promised that when he visited Yorkshire he would look into the matter. Two or three weeks later, and after his visit

447
to Yorkshire, I received a letter telling me quite baldly that, having viewed all the aspects of the matter, he was afraid that he could take no action.
I was shocked, because Mr. Latham had never put the argument of the Coal Board to me at all. As I said during my conversation with the Parliamentary Secretary, if the Coal Board could prove to me that it was justified in getting Mr. Speedy out of the house, I was quite prepared to throw in the cards. I am beginning to get a little fearful of the bureaucracy of the Board.
As I have said, I want to work with the Coal Board, but it must realise that I have a responsibility to my constituents. The Parliamentary Secretary must know that having spent many years on the local authority, dealing with housing and having, on many occasions, had to tell frustrated people that there was no hope of their getting a house, I would act in a very rational way when dealing with a matter of this kind.
It is not fair for the Coal Board to say to a man, "Well, you are 65 years of age and you must leave the house." Even though the agreement says that a man must leave, the Board should realise that it ought not to take advantage of a legal point when the individual concerned does not understand the position. The agreement says nothing about vacating the house at the age of 65. When dealing with local authority housing matters I have never hesitated, where necessary, to say to a person, "You will be compelled to leave the house." The same applies to tied cottages. People taking houses of that kind are well aware that when they cease their occupation they must vacate the accommodation. But the agreement in question makes no reference to that at all.
The Coal Board may be right, but is it morally right to take advantage of a man who does not understand the position? If I were dealing with the matter, I would say to any electrician, engineer or official that when the time came for him to retire he would have to vacate the property and that he must sign to that effect. This did not happen in the case of Mr. Speedy, who was not aware that when he reached retirement age he would have to leave his house.
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There is a great moral issue here. I think it wrong for the Coal Board to say, "We are legally right and he must leave: it is not the type of house usually occupied by an official." Since 1946, we have co-operated and we want to see the industry flourish, but the Board must realise that it is beginning to raise our tempers and we are beginning to ask whether there should not be more accountability to this House. There are organisations which say that there should not be more accountability, but if things like this happen we have to remember that we have responsibilities. I well remember the Parliamentary Secretary saying to me that I ought to acquaint my constituents with the 1946 Act. That may be so, but in reply I could say that I ought to try to educate the Minister and the Parliamentary Secretary in how to approach the Coal Board.
Although, legally speaking, the Minister may not have the power, surely it is not beyond the ability or concern of any Minister to make an approach to a corporate body. I know that it is done at present; there are weekly consultations. If not, there ought to be. If I were the Minister or the Parliamentary Secretary dealing with this case I would say to the Coal Board, "Is it not possible to meet the hon. Member for Normanton and discuss this matter?" I have tried without success and I hope that it is not too late. If the Coal Board or the Parliamentary Secretary can prove to me that the Board has a case and I have not, I am prepared to throw in the cards. If the Board cannot do that, the Minister or the Parliamentary Secretary should say to the Board, "Please meet the hon. Member for Normanton and settle this issue."
If that cannot be done I must take some guidance from the recent publication of the Labour Party, which deals with the taking over of all property, even that belonging to the Coal Board. We look forward to better behaviour from these bodies. I appeal to the Parliamentary Secretary not to be afraid of saying he will go into the matter again. I have not sought publicity on this issue for many weeks. I am proud to think that we can raise an issue concerning an individual on the Floor of this House. I appeal to the Coal Board to realise that if it has responsibilities so have we. It must understand that I represent a large

449
mining district in my constituency and intend to do my duty. Although, in the past, I have championed many lost causes, I trust that on this issue I shall be successful and obtain the treatment I should receive from such an organisation.
12.40 a.m.
Mr. Robert Woof: I want to deal with the tenancy of colliery houses from another point of view. Many of the dwellings in my constituency would be better termed industrial barracks. They were inherited from the former coal owners by the National Coal Board. While we appreciate very much indeed the good spirit and sound intention of the Board, and the amount of money and labour which has been spent in an attempt to modernise and improve these dwellings, it is now, unfortunately, evident that to some extent the Board's work and ideas have come to a full stop.
We well understand the cost of repairing colliery houses, but I want to draw the attention of the Parliamentary Secretary to the exhausted energy of the housewives who have to tolerate in 1956 what I would term "Robinson Crusoe" methods of cooking and of boiling water. These housewives are not members of any trade union, nor are they employed by the Board but, somewhere, somehow, they are entitled to have a voice in this matter.
The problem of catering for the family has now become an intolerable labour for many of these women. In many cases, the fireplaces in their houses are from 50 to 80 years old. The positionis worse even than that. It is aggravated by the futility of not being able to get the necessary materials to repair them, and they have to adopt the motto of the war years. "Make do and mend," always assuming that they can get anything to mend them with.
I fully realise that the Minister, the Parliamentary Secretary, or the Coal Board, cannot use magic, but at a time when we are paying lip-service to a policy of cleaner air and fuel efficiency some thought should be given to these antediluvian conditions in these colliery houses. If an effort were made to remedy them the Parliamentary Secretary can rest assured that it would be greatly appreciated by all concerned as a measure of relief to their present drudgery.
12.43 a.m.
The Parliamentary Secretary to the Ministry of Fuel and Power (Mr. David Renton): I am sure that the hon. Member for Blaydon (Mr. Woof) will forgive me if I do not deal at length with his extension of the case which was presented by his hon. Friend the Member for Normanton (Mr. A. Roberts), of which I had some notice. I will just say that the question of slum clearance of old houses and the repair of those which still have a useful life ahead of them is receiving the attention of my right hon. Friend the Minister of Housing and Local Government, and I hope that my right hon. Friend's policy will have the support of the hon. Member to the fullest extent.
To return to the point raised by the hon. Member for Normanton, I would remind the House that this debate arose as a result of his asking me, at Question Time yesterday week, whether my right hon. Friend could give a direction to the National Coal Board as to the occupancy of houses under its control. I then pointed out that it was not possible for my right hon. Friend to give any such direction, for reasons with which I need not trouble the hon. Gentleman as he has not pressed that point in this debate. The hon. Member dealt with an individual case, the case of Mr. Speedy, and he asked that this occasion should be used for preventing an injustice to Mr. Speedy.
I must tell the hon. Gentleman quite candidly, and at the outset, that it is not possible for my right hon. Friend to intervene and start giving orders to the Coal Board in individual cases of this kind. We have, however, done what it is within my right hon. Friend's power to do, and that is, put the hon. Gentleman in touch with the Coal Board. He has had, I understand, a lengthy letter from the Deputy-Chairman on the matter, and we have arranged for him, if he wishes, to get in touch with other senior officials to discuss this case. It would be quite wrong to say, therefore, that the hon. Gentleman has been rebuffed at every angle.
With regard to these tied houses, as they are so often called, or service tenancies, it may interest the House to know that the Board took over no fewer than 130,000 miners' houses and 4,000 managers' houses at vesting date, and that since then the Coal Industry Housing

451
Association has built 20,000 houses more. Those houses, of course, have been built in areas which are short of mining labour and to attract labour to the mines where it is needed. There are now 700,000 miners and 11,000 colliery officials to fill those tied houses.
If the Board is to fulfil its statutory duty to produce coal and develop the coal mining industry it is essential that it should use its own houses to its best advantage, that is to say, for the people who are in its employment. That is part of its managerial responsibility, which, I think, any fair-minded person would say comes within its duties under the Act. In law, the Board is in the same position as any other employer who owns houses; that is to say, it is entitled to possession even if the house is protected by the Rent Restrictions Acts, if, to use the words of the First Schedule to the Act which are so familiar to many lawyers, it is
"… reasonably required by the landlord for occupation as a residence for some person engaged in his whole-time employment …"
That is the wording of paragraph (g) of the First Schedule to the 1933 Act. As a result of that Schedule and of Section 3 of the Act the landlord is not required to provide alternative accommodation for the employee in those circumstances.
It has been a well established custom in the coal industry, going back, of course, long before nationalisation, for certain officials to live in houses provided free by the employer. This custom arose because officials closely concerned with colliery management had to live near the job, and in many of the coalfields suitable accommodation would not have been available unless it had been provided by the colliery companies. The right to such a house is a jealously guarded privilege among many of the officials concerned, as well as, of course, being an obvious advantage to the Coal Board, to enable officials in certain key positions to live near the collieries.
As the hon. Gentleman the Member for Normanton must know as well as any hon. Member of this House, it has been agreed, in negotiation between the Board and the British Association of Colliery Management, which is the trade union for the coal industry staff, that the Board would provide houses for most of these
452
key officials. If the Board is to fulfil its obligation it is obviously necessary for it to obtain possession of a house from the occupant when the occupant leaves the service of the Board, so that the house may be made available for the successor.
Mr. Roberts: Will the Parliamentary Secretary agree that that is quite right provided that the person who has retired, or is leaving the industry, is aware of the facts?
Mr. Renton: I should have thought that it was impossible for a man to have spent his life as an official in the industry and not to have known of this custom which I have described and which is beyond all doubt.
In carrying out its policy on these lines the Board is acting well within its rights as a landlord and is carrying out its managerial responsibility as a public corporation with important statutory powers and duties. It would be wrong for the Minister to interfere. I suggest to the hon. Member for Normanton that the fact that Mr. Speedy retired from the Board's employment in March, 1955, that he was not given notice until February, 1956, that he is still in occupation and that, even though the Board was not obliged to offer him alternative accommodation, it has offered him several possibilities, shows that there has been considerable forbearance shown by the Board.
Finally, I say this. Mr. Speedy can either make his representations to his association or he can even force the Board to take him to court. The only person who, alas, cannot help Mr. Speedy—and there is no doubt about this—is my right hon. Friend, because he is not an official of the British Association of Colliery Management, he is not Chairman of the National Coal Board and he is not a county court judge. Although I am sure that the hon. Gentleman has discharged his duty by raising this matter tonight, I regret to say that there is no satisfaction which I can give him beyond that which my right hon. Friend has already tried to give him by putting him in touch with the Board.
12.53 a.m.
Mr. Charles A. Howell: I hope that the Parliamentary Secretary will take the trouble to read his speech when it appears in

453
the OFFICIAL REPORT. He will find that he made no effort to make any distinction between a man who has served for most of his working life in the industry and has then retired and a man who leaves the industry. The repercussions of this matter can be very grave. This is one type of nationalised industry. I have worked in another, the railway industry. I have never known the railways to turn out a retired servant or his widow, but I have known them to get possession of a house when a man has left the industry.
When a man reaches the age of 65 it is far too late for him to go to a municipal authority to ask for a house and it is too late to buy one. It is disgraceful of the Parliamentary Secretary not to admit to us that his right hon. Friend could make representations to the Board that if it needs a house it should turn out people who are not working in the industry rather than a man who has
454
served a lifetime in the industry. I hope that it is not too late now for him to make representations to that effect and to point out that it would be far better to turn out someone who is not in the industry than a man like this who has spent his life in its service.
Mr. Renton: In spite of the strong words of the hon. Gentleman, I shall certainly not accede to his request. It would be quite wrong to attempt hastily to make the distinction of a general character which the hon. Member invites me to make.
The Question having been proposed after Ten o'clock on Tuesday evening and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at six minutes to One o'clock.

NATIONAL SERVICE
  Deferments, Scotland
  Deferments, Scotland
  Unfit Men (Medical Certification)
  Unfit Men (Medical Certification)
  COST OF LIVING
  COST OF LIVING
EMPLOYMENT
  Factory Inspectors (Pay)
  Factory Inspectors (Pay)
  Technical and Scientific Register
  Technical and Scientific Register
  Appointments Register
  Appointments Register
HOUSING AND LOCAL GOVERNMENT
  Council Houses (Fireguard Fitments)
  Council Houses (Fireguard Fitments)
  Hospital Site, St. Austell
  Hospital Site, St. Austell
  Miners' Houses, Midlands
  Miners' Houses, Midlands
  Rent Acts (Review)
  Rent Acts (Review)
  ELECTRICITY INDUSTRY (PRICES AND REVENUE)
  ELECTRICITY INDUSTRY (PRICES AND REVENUE)
SCOTLAND
  Bridge of Don, Aberdeen (Reconstruction)
  Bridge of Don, Aberdeen (Reconstruction)
  Fishing Fleet, Aberdeen (Oil Firing)
  Fishing Fleet, Aberdeen (Oil Firing)
  Scientists, Technicians and Technologists
  Scientists, Technicians and Technologists
  Agriculture (Land Recovery)
  Agriculture (Land Recovery)
  Hospital Patients (Whisky Prescription)
  Hospital Patients (Whisky Prescription)
  River Tweed (Pollution)
  River Tweed (Pollution)
  Town Centre, East Kilbride (Development)
  Town Centre, East Kilbride (Development)
  Potato Harvesting (Children's Mid-Day Meal)
  Potato Harvesting (Children's Mid-Day Meal)
  The Highlands (Industrial Sites)
  The Highlands (Industrial Sites)
  Freight Charges, North of Scotland
  Freight Charges, North of Scotland
BRITISH ARMY
  Personal Case
  Personal Case
  Victoria Cross Exhibition (Extension)
  Victoria Cross Exhibition (Extension)
  Sunday Gunfire, Trawsfynydd
  Sunday Gunfire, Trawsfynydd
  Royal Artillery Barracks, Woolwich (Rebuilding)
  Royal Artillery Barracks, Woolwich (Rebuilding)
  National Service Men, Cyprus
  National Service Men, Cyprus
TRADE AND COMMERCE
  Film Industry (Assistance)
  Film Industry (Assistance)
  Pig Iron and Scrap (Prices)
  Pig Iron and Scrap (Prices)
  Fertilisers (Prices)
  Fertilisers (Prices)
  Exports to Argentina
  Exports to Argentina
  Cellulose-Nitrate Lacquers (Flammability)
  Cellulose-Nitrate Lacquers (Flammability)
  German Enemy Properly (Final Dividend)
  German Enemy Properly (Final Dividend)
NATIONAL FINANCE
  Income Tax
  Income Tax
  Government Expenditure (Economies)
  Government Expenditure (Economies)
  Premium Bonds
  Premium Bonds
  Incomes
  Incomes
  Provincial Museums and Art Galleries
  Provincial Museums and Art Galleries
  Cartridges (Cost of Rebate)
  Cartridges (Cost of Rebate)
  Permanent Secretaries and Senior Ministers (Salaries)
  Permanent Secretaries and Senior Ministers (Salaries)
  Civil Servants (Private Employment)
  Civil Servants (Private Employment)
  Civil Servants (Pay Claims)
  Civil Servants (Pay Claims)
COMMONWEALTH RELATIONS
  United Kingdom and Ceylon (Defence Agreement)
  United Kingdom and Ceylon (Defence Agreement)
HOME DEPARTMENT
  Murders
  Murders
  PROPERTY (VENDORS' OBLIGATIONS OF DISCLOSURE)
  PROPERTY (VENDORS' OBLIGATIONS OF DISCLOSURE)
AGRICULTURE, FISHERIES AND FOOD
  Veterinary Investigation Centre, Cambridge
  Veterinary Investigation Centre, Cambridge
  Bird Pests (Control)
  Bird Pests (Control)
ROYAL AIR FORCE
  Station, Bishopscourt
  Station, Bishopscourt
TANGANYIKA
  Destocking (Kondoa Irangi District)
  Destocking (Kondoa Irangi District)
MINISTRY OF HEALTH
  Chronic Bronchitis (Deaths)
  Chronic Bronchitis (Deaths)
  Infectious Disease Contacts (Compensation)
  Infectious Disease Contacts (Compensation)
ROADS
  Whitchurch By-Pass
  Whitchurch By-Pass
  Improvement Schemes, Hyde Park Corner and Marble Arch
  Improvement Schemes, Hyde Park Corner and Marble Arch
Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers
The Lord Tyrone (M. Waterford)—Sat first in Parliament after the death of his father.
PEOPLE'S DISPENSARY FOR SICK ANIMALS BILL
Read 3a, with the Amendments, and passed and returned to the Commons.
LONDON COUNTY COUNCIL (MONEY) BILL
Read 3a, and passed.

CAR PARKING IN PEAK NATIONAL PARK
2.35 p.m.
LORD WALERAN: 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 any consultation took place between the Home Office and the Ministry of Transport before by-law No. 3 of the Peak Park Planning Board's By-laws for behaviour on access land, made on the 8th February,
2
1955, which abrogates the proviso to subsection (1) of Section 14 of the Road Traffic Act, 1930, was confirmed, and whether, in the interests of road safety, it is not desirable to permit parking off the road within the permitted distance of 15 yards.]
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR THE HOME DEPARTMENT (LORD MANCROFT): My Lords, the Peak Park is land to which the public have been granted access by virtue of access agreements made between the Peak Park Planing Board and the owners of the laid. People who go on to tie land for the purpose of open-air recreation cannot be treated as trespassers so long as they observe the general restrictions set out in the National Parks and Access to the Countryside Act, 1949. One of the restrictions imposed by that Act is that people shall not ride or drive vehicles on the land. The by-law made by the Peak Park Planning Board and confirmed by my right honourable friend the Secretary of State is designed only to enforce one of the restrictions already imposed by the Act of 1949. No consultations, therefore, took place between the Ministry of Transport and the Home Office before the by-law was confirmed, because the public at large have no right to leave their vehicles on this land without permission, since it is private property.
LORD WALERAN: My Lords, while thanking my noble friend for his Answer, in view of the fact that so much damage is created if a car is left on the highway —and, after all people go to these

3
National Parks to visit them and look at the view—would he say that perhaps in future the Home Office will consult the Ministry of Transport before a by-law is made for a National Park area?
LORD MANCROFT: My Lords, I quite appreciate the point of road safety which the noble Lord makes, but against that has to be set the fact that so many people come and leave litter and rubbish in the parks that owners of land are often very reluctant to allow the public to enter. These two facts have to be set off against each other. I quite appreciate the noble Lord's point, and will see that it is looked into.
LORD WALERAN: I thank the noble Lord very much.

BATTERSEA PARK TOWER
LORD CONESFORD: My Lords, I beg to ask Her Majesty's Government the Question which stands in my name on the Order Paper:
[The Question was as follows:
To ask Her Majesty's Government what consultation the Minister of Housing and Local Government had with the Royal Fine Art Commission, and what advice he received from them, before he granted permission for the erection of the proposed tower in Battersea Park.]
THE MINISTER WITHOUT PORTFOLIO (THE EARL OF MUNSTER): My Lords, the Royal Fine Art Commission opposed the proposal on the grounds that any extension of commercial developments, particularly in the form of an illuminated tower, near the river bank, would seriously damage the amenities of the Park and this stretch of the river.
LORD CONESFORD: My Lords, is my noble friend aware that the waterfront at Battersea Park and the uninterrupted simplicity of the green lawns and trees along the Thames made Battersea Park one of the most beautiful in Europe? Is he further aware that, if the present miserable clutter of buildings, kiosks, railings and car parks were removed, it could again be beautiful? In these circumstances, was it right to treat the considered advice of the Royal Fine Art Commission with such contempt?
4
Finally, may I ask my noble friend whether he will arrange that the correspondence that passed between the Royal Fine Art Commission and the Ministry shall be published in the OFFICIAL REPORT, in order that the public may judge how far the Royal Fine Art Commission tried to save London from this outrage?
THE EARL OF MUNSTER: My Lords, in reply to my noble friend's first question, about the waterfront, that is, of course, a matter of opinion. With regard to the Royal Fine Art Commission, their approval was sought to these proposals and was not obtained. Nevertheless, a public inquiry was held at which the London County Council and the Battersea Borough Council approved the proposition, while the Chelsea Borough Council opposed it. With regard to the correspondence, there is one letter from the Secretary of the Royal Fine Art Commission and I am perfectly prepared to send a copy to my noble friend.
LORD CONESFORD: Would it not be more satisfactory if the full correspondence could be published in the
OFFICIAL REPORT?
THE EARL OF MUNSTER: I will certainly convey that view to my right honourable friend the Minister of Housing and Local Government.

DURATION OF PASSPORTS
LORD FARINGDON: 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, in view of the waste of time and expense incurred by the public and the considerable number of officials employed in the quite mechanical work entailed by the present system of quinquennial expiry and renewal of passports, they will consider the issue of passports of indefinite validity.]
THE MINISTER OF STATE FOR FOREIGN AFFAIRS (THE MARQUESS OF READING): My Lords, the existing practice is in accordance with the recommendation of a meeting of experts held in April, 1947, at Geneva, under the auspices of the Economic and Social

5
Council of the United Nations. The recommendation reads as follows:
"Countries should as a general rule, adopt a validity of two years or more, and, if possible. a validity approaching five years, which has already been adopted by certain countries. Facilities should be given for easy renewals, if possible for the same periods as al initial issue, so long as the total validity of the passport does not exceed ten years".
As a part of the economy drive, Her Majesty's Government re-examined this particular question at the beginning of the year, when it was decided that the very small saving in cost and manpower would not justify any change in the existing practice, which is an essential part of the passport control system. The renewal of a passport is not an automatic process. Amongst other advantages it affords an opportunity for a check on undesirables.
LORD FARINGDON: I thank the noble Marquess for his reply. Should I be right in drawing the conclusion that the tone of the report of the discussions at Geneva is really in favour of a longer validity for passports? The fact that the Council have recommended a minimum of two years', and preferably five years', validity, with a renewal period up Ito ten years, at any rate gives me the irnpression—I should like to know whether the noble Marquess agrees—that their feeling was that the period of validity should be longer. I should like, in addition, to ask the noble Marquess what is the cost of this particular piece of officialdom, if I may put it in that way; also whether any useful purpose is served by what I must assure him really is an extremely mechanical process of renewal, and whether, in fact, any security measure could not be fully met by the powers which already exist to withdraw a passport.
THE MARQUESS OF READING: My, Lords, as regards the construction to be put upon the recommendation of the Committee, may I say that the Committee puts as the highest desirable length of time exactly the period that we in this country follow—namely, five years, with renewal, and a total validity of not more than ten years. So that, so far from being laggard in this matter, Her Majesty's Government are in fact in advance of most countries as to the length
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of period that they allow before renewal. I cannot give the noble Lord the exact figures of the extra cost; it would not be easy to extract that from the total cost of the Department. I can tell him that some quarter of a million passport renewals occur in the course of every year. As regards his views upon whether it is, or is not, useful from the point of view of affording some check on undesirables, I can only tell him that those who are responsible for placing the checks do attach importance to these periodical opportunities for inquiry and check.
LORD FARINGDON: I thank the noble Marquess very much for his reply. I would say, if I may with permission, that I did not wish to suggest that lier Majesty's Government had been in any sense laggard in this business. It was quite evident from what the noble Marquess said to start with that they had, in fact, taken as much leeway as, under the Report, they could take. I should also like to add that I have found that the officials concerned have always been most courteous and prompt.
THE MARQUESS OF READING: I am much obliged.
LORD BARNBY: In connection with that reply, would the noble Marquess give consideration to the inconvenience caused to those who have to travel a great deal? In the event of the near expiry of a passport, could not a visa which has some further time to run be transferred to the new passport, instead of being nailed to the old one, which is the procedure usually adopted by the Foreign Office?
THE MARQUESS OF READING: My Lords, this seems to me to be going off rather at a tangent from the Question that I was asked. Exactly what the regulations are in particular circumstances, which cannot occur very often. I should be prepared to investigate if the noble Lord would like to put down a Question.
LORD BARNEY: I thank the noble Marquess far his reply. I said "would he give consideration to"; I did riot expect a reply.
2.46 p.m.

LACE FURNISHINGS INDUSTRY (EXPORT PROMOTION LEVY) (REVOCATION) ORDER, 1956
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR THE HOME DEPARTMENT (LORD MANCROFT): My Lords, this Order is subject to Affirmative Resolution in your Lordships' House and in another place where it will be considered to-morrow. It revokes the Lace Furnishings Industry (Export Promotion Levy) Order, 1951, and was made under the Industrial Organisation and Development Act, 1947. The levy was imposed in 1951 for five years. Its object was to raise about £15,000 annually for export promotion purposes through the instrument of a special company set up by the industry itself.
It is proposed to revoke the Order because the industry now considers that the co-operative export campaign undertaken by the industry as a whole has been ineffective. The publicity campaigns have unfortunately not proved fruitful, largely because of adverse world conditions over which the industry had no control. This state of affairs is confirmed by our Trade Commissioners in Canada and Australia, which are two of the industry's biggest markets and countries where the campaigns have been continued. The Trade Commissioners also feel that if they continued or increased expenditure along the existing lines it would be only a waste of money.
Individual firms in the industry will of course continue with their own efforts to promote exports. Indeed the industry already has a fine export record of at least one-third of its total production. The
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trade unions have been consulted. The Scottish union stated that since they do not contribute to the Levy, the best they can do is to remain neutral. The English union suggested that the existing Levy is far too small to have any appreciable effect and that it should either be dropped altogether or, with the aid of public funds, be increased tremendously. For reasons which I have already indicated, the Government have decided that this would not be a useful course and have accordingly come to the conclusion that they must accede to the request of the industry that the Order of 1951 should be revoked. I hope your Lordships will agree this course is the correct one and I beg to move accordingly.
Moved, That the Lace Furnishings Industry (Export Promotion Levy) (Revocation) Order, 1956, reported from the Special Orders Committee on the 13th of June, be approved.—(Lord Mancroft.)
2.49 p.m.
LORD LUCAS OF CHILWORTH: My Lords, I regret the necessity for this Motion, but, as I have no information that would allow me to contradict the facts as stated by the noble Lord, I cannot say very much. I am surprised that the union side want this levy discontinued. I think it has had a good effect. As the noble Lord has said, the lace industry has not been laggard in its export efforts, and with the great necessity for exports to-day I should have thought that this would have been a useful thing to keep on, however small the amount. However, in face of the information that the noble Lord has given the House, I cannot oppose the Order; I can only acquiesce with considerable regret.
On Question, Motion agreed to.

RESTRICTIVE TRADE PRACTICES BILL
2.50 p.m.
Order of the Day for the Second Reading read.
THE LORD CHANCELLOR (VISCOUNT KILMUIR): My Lords, this Bill marks an important development in legislation in this country dealing with restrictions on competition in industry. It establishes a system of registration for the broad range of restrictive trade agreements in this country and for their judicial examination by a specially constituted Court. This measure can trace its origin to the White Paper on Employment Policy which was issued in May, 1944, by the Coalition Government. After pointing out that there had been a growing tendency towards combines and agreements which were restrictive on trade, the White Paper said that the Government would take appropriate action to check practices which may bring advantages to sectional producing interests, but which work to the detriment of the country as a whole.
The first step to implement this policy was the Labour Government's Monopolies and Restrictive Practices (Inquiry and Control) Act, 1948. Under that Act, the Monopolies and Restrictive Practices Commission was set up, and within a few years it produced reports on a number of industries which had been referred to it by the Board of Trade. These reports revealed that certain practices of discriminatory trading, such as exclusive dealing and the operation of boycotts, were common features in the industries concerned. The Government, therefore, in 1952, asked the Commission to report on this group of practices as a whole. The Report of the Commission was published in June, 1955, under the title, Collective Discrimination, and that Report was debated in this House on July 27, 1955. I do not intend to traverse again all the ground that I then covered, in giving the opinion of Her Majesty's Government on the Report, as I am to-day primarily concerned with the merits of this Bill.
I would remind your Lordships that the view of the Commission as a whole was that some action in regard to this class of restrictive practice was desirable, but that the members of the Commission were divided in their view as to what kind of action this should be. The
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Government decided to bring in legislation dealing with restrictive trade practices generally, and not just with those which had been dealt with by the Report of the Commission; and they announced that this legislation would require the registration of restrictive practices and would provide for their examination by a tribunal. In addition, the measure would include special provisions relating to resale price maintenance. As my right honourable friend the President of the Board of Trade said in another place, the legislation would be based on the principle that it would be for the parties to a restrictive agreement to show that it did not operate against the public interest.
The Bill which is now before the House gives effect to the policy which Her Majesty's Government announced last summer. The most significant decision that we have taken since then is that the tribunal should be a judicial and not an administrative one. This is, perhaps, a feature of the Bill which will be of some interest to your Lordships. If I may sun manse the provisions of the Bill quite shortly, they cover, first, public registration of a wide range of restrictive practices; secondly, a judicial solution through a Court with the status of a High Court; thirdly, the laying down of criteria so that a justiciable issue is evolved. Then, fourthly, the onus is fairly and squarely placed on industry to bring itself within the exceptions set out in the Bill. Fifthly, there is a ban on the collective enforcement of resale price maintenance and a new method of enforcing individual price maintenance. Lastly, there is a reconstitution of the Monopolies Commission to deal with single-firm monopolies and the export trade.
Part I of the Bill deals with the procedure for registration and the judicial investigation of restrictive trading agreements, but, for clarity, I will deal with it under four headings: first, the appointment of the Registrar and the establishment of the Restrictive Practices Court; secondly, the kinds of agreement subject to registration; thirdly, the machinery of registration; and fourthly, the judicial investigation of registered agreements, including what has been termed "the justiciable issue" and the alternative to that course. The first five

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clauses of the Bill deal with the appointment of the Registrar and of the members of the Restrictive Practices Court. The Registrar will be appointed by the Crown, on the recommendation of the Prime Minister, and not by a Minister of the Crown. Very considerable thought has been given to the office of Registrar and the decision of Her Majesty's Government that he shall not be responsible to any departmental Minister arises from their firm conviction that the treatment of individual restrictive trading agreements should be removed, so far as possible, from the political controversy to which executive decisions and actions are inevitably subject.
There has been some criticism that the Registrar's activities will be removed from Parliamentary scrutiny and that he will thus enjoy an inappropriate degree of irresponsibility. I think this criticism is unfounded. In fact, Parliamentary control by Questions and consequential Answers can be exercised over the functions of the Registrar. My noble friend Lord Mancroft can give details of that if any of your Lordships so requires. Moreover, a provision is included in the Bill which states specifically that the Registrar may, through the Treasury Solicitor, consult the Law Officers of the Crown on any appropriate matter of doubt or difficulty arising in the execution of his duties. His duties are to maintain a register of restrictive trading agreements and to take proceedings in respect of them before the Restrictive Practices Court. It is laid down in Clause 22 that in proceedings before the Court the Registrar shall be represented by counsel nominated by the appropriate Law Officer, It should be noted that the Registrar will not have discretion as regards agreements which he takes before the Court. In the first place, all agreements on the register must come before the Court without such a provision the judicial nature of the whole scheme would be undermined. Secondly, the Board of Trade may give, the Registrar directions as to the order in which agreements shall be brought before the Court.
The Restrictive Practices Court will be a mixed one of High Court Judges and laymen. It is this innovation in our present judicial system that has aroused considerable interest. It is not altogether
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without precedent, since the Railway and Canal Commission consisted of Judges and lay members. It is true that that Commission operated in a much more specialised field than that with which the Restrictive Practices Court will deal. I will say more of this when I get to Clause 20, which is the core of the Bill, since it sets out the criteria which are to guide the Court in their judgments on restrictive arrangements. The Court will consist of five High Court Judges and a maximum of ten lay members, and may sit in five divisions. We consider that this makes adequate provision for dealing with the work which will come before the Court. But, as a safeguard, power is included in the Bill, by Order subject to Affirmative Resolutions of both Houses, to increase the number of members of the Court. The Court will be a court of record and of equal status with the High Court. The lay members will be appointed by Her Majesty, on the recommendation of the Lord Chancellor. I would emphasise here that the highest importance is attached to the quality of these lay members. The Bill provides that they must have "knowledge of or experience in industry, commerce, or public affairs," which would give them the necessary background to enable them to make an informed judgment upon restrictive agreements.
I pass to the agreements which are within the scope of the Bill. Clauses 6 and 7 of the Bill describe the kinds of agreements which will be subject to registration and then to examination by the Restrictive Practices Court. The objective here is that, on the one hand, all kinds of agreements which restrict free competitive trading in goods should be within the scope of this part of the Bill, but that, on the other hand, ordinary commercial enterprise should not be impeded by the provisions of the Bill. It will be noted that only agreements relating to goods are concerned. Restrictive practice in the service and transport industries are not touched. Nor are restrictive labour practices. As regards restrictive labour practices, the Government would not regard the procedure laid down in the Bill as an appropriate one. As regards transport and services, the problem is not really of the magnitude of that in relation to trading in goods.
The scheme of Clauses 6 and 7 is that Clause 6 describes, in broad outline, the

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kinds of agreement which will be subject to registration, while Clause 7 selects particular kinds of agreements from within this broad field and exempts them from the scope of the Bill. Subject to these exemptions—with which I will deal in a moment—the kinds of agreements which are to be registered are all those to which two or more traders in the United Kingdom are a party, and under which there are restrictions as to prices, trading conditions, output, quality and the persons or places with which trading is carried on. The agreements need not be formal ones in order to come within the scope of the Bill. Informal arrangements which are not expressly binding on the parties—or which may even be expressly not binding on them—but which have the effect of restricting the prices, et cetera, of goods, are brought within the Bill. Agreements made by trade associations, either as such or on the part of their members, are also within the Bill.
Clause 7, as I said, deals with exemptions, and the kinds of agreements which are exempt are set out in detail in that clause. One group consists of agreements which fall within the provisions of some other Statute and, therefore, either have specific Parliamentary approval or are subject to statutory safeguards against abuse of the public interest, as in the case of patents. Your Lordships will appreciate that exemption of this type of agreement is necessary in order to avoid the possibility of a clash of jurisdiction between the Restrictive Practices Court and other statutory authorities. Another group exempted consists of agreements the primary objective of which is to further efficient commerce in goods. In these cases the restrictions accepted by the parties serve to promote progress in methods of distribution and in industrial development, rather than to restrict competition. Examples are: some common kinds of contract for supply which are dealt with in subsection (4) of Clause 7 (for instance, sole and exclusive agency contracts) and agreements for the exchange of "know-how", which are dealt with in subsection (6).
Similarly, supply agreements are exempted under subsection (3), if they merely implement the conditions of a master agreement between the parties, provided that this master agreement has
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been registered. In these cases, the issues can best be argued before the Court on the master agreement, and it is unnecessary for the subsidiary agreement to he subject to the machinery of registration and examination by the court. Subsection (9) removes from the scope of Part I of the Bill agreements in which all the restrictions relate exclusively to the supply of goods outside the United Kingdom market. In those cases where the goods never come to this country at all, the agreements are clearly not within the scope of the Bill at all. Agreements exclusively affecting exports from this country, however, come within Clause 29 of the Bill, under which particulars must be furnished to the Board of Trade, who may refer the matter to the Monopolies Commission.
I should like to emphasise that in all the cases in which exemptions are made from the Bill, the limits of exemption are closely defined. For example, in the case of "know-how" agreements there must be only two parties to the agreement. In all cases, an agreement will not be exempt simply because it contains some provision dealing with an exempted restriction. If there are other restrictions, the agreement will not be exempt.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, we are no doubt having a very fine legal exposition of the Bill, but I should like to know a little more in detail now and then. Could we have some explanation as to what form of agreement is likely to come under Clause 7 (2), as relating to a scheme certified by the Board of Trade under the Income Tax Act?
THE LORD CHANCELLOR: These, my Lords, are special schemes; indeed, at an earlier stage we put them into Clause 20 in order that they might fork a matter of exclusion. But these particular schemes are dealt with by the Income Tax Act. At a later stage, I will give some illustrations to the noble Viscount. I have considered these cases very carefully. I think he will find that they have no sinister exclusive effect but will protect something which everyone who wishes the schemes to be successful would desire to be excepted. I think I have covered all the other provisions in Clause 7, but I should like just to say a word on two further points. They

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are closely defined, and when their significance is considered I do not think that anyone can suggest that these exemptions either have the intention or will have the effect of loosening the framework of the Bill. However, I shall be pleased to go into them in detail at the appropriate stage.
I do not propose to deal in detail with the provisions regarding the maintenance of the register and the methods of enforcement, but I should like to draw your Lordships' attention to the main features. Again, if there are any points which the noble Viscount the Leader of the Opposition or any other noble Lord would like to raise, I shall be glad to go into them more fully. The classes of agreement which are to be registered will be specified in orders made by the Board of Trade and subject to Affirmative Resolutions in both Houses of Parliament. All agreements will be subject to these registration orders and the Board of Trade will not be able to exempt any from this liability. The register will be open to public inspection unless the Board of Trade, for reasons which are narrowly defined in the Bill, directs that in particular cases agreements should be filed in a special section which will not be open to the public. We attach considerable importance to the register. We believe that the public must be given an opportunity to see for itself what are the range and contents of restrictive trading agreements in this country.
Clause 11 deals with the only cases in which the principle of examination by the Court of all agreements can be modified. The clause gives the Board of Trade power, upon the representation of the Registrar, to order the removal from the register of particulars of agreements of no substantial economic significance. This provision is desirable in order that the Registrar and the Court should not be unnecessarily burdened with agreements the effect of which on trade in this country is of no account. The enforcement of the provisions of registration has two aspects. First, the Registrar may serve a notice on the parties to an agreement which he has reason to believe should be registered, but which has not been, requiring them to furnish particulars. It this notice is not complied with, provision is made in the Bill for moderate
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penalties. Secondly, under Clause 17, as an addition to this procedure, or as an alternative to it, the Registrar may ask the High Court to order that particulars be furnished and, if necessary (and I ask your Lordships to note this), to ban the agreement in the same terms as the Restrictive Practices Court may ban agreements which they have found to be contrary to the public interest. The agreement may not be reinstated until the Restrictive Practices Court have applied to it the tests set out in Clause 20, and in any case the agreement cannot be reinstated until after a lapse of two years. So that there is serious procedure against those who try to evade registration.
There has been some criticism that these provisions of enforcement are not adequate, and I want to face it. I ask your Lordships to consider this point. As I stated during the debate we had last July, the odour of criminality should not attach to proceedings under this legislation. I think that that is accepted by all parties. The Government do not accept the view that these provisions are ineffective to ensure that the registration requirements are generally observed. If the Registrar believes that an agreement exists, and is able to produce some evidence to this effect, there are adequate provisions for the punishment of persistent defaulters. If there is not sufficient evidence of the existence of an agreement, there is provision in Clause 14 for the High Court to examine on oath. But in the continued absence of evidence, stricter enforcement provisions would not help.
I now come to Clauses 19 to 22, which deal with the work of the Restrictive Practices Court. Initially, agreements are brought before the Court only by the Registrar, except where the parties apply for the lifting of a ban which has been placed on their agreement by the High Court as the result of default in registration. When the agreement conies before the Court, a restriction accepted in pursuance of any agreement will be deemed to be contrary to the public interest unless the Court is satisfied of any one or more of the circumstances set out in paragraphs (a) to (g) of subsection (1) of Clause 20 and, in addition, that the restriction is not unreasonable, having regard to the balance between those circumstances and any detriment to the

17
public at large resulting from, or likely to result from, its operation.
The obligation on the parties to an agreement to show that it is within one of these exceptions has been objected to on the ground that it is against the tradition of British law that people should be regarded as guilty before they have proved themselves innocent. This is an entirely false analogy. This is not a criminal matter. What the parties to the agreement will have to do here is to show, in the first place, that the restriction comes within certain exceptions, which the Bill defines, to the general principle laid down by Parliament that restraint of competition is prima facie against the public interest. I submit that all reasonable grounds of pleading are covered by paragraphs (a) to (g). They mean that a restriction must confer some specific—I repeat, specific—benefit, or prevent some specific—again I repeat, specific—harm. A specific benefit would be, for example, the promotion of the interests of consumers to the development of better techniques by cooperative research. A specific harm would be the prevention of abuse of economic power by a dominating buyer or seller, or the adverse effects on export trade or on the general level—I emphasise "general level"—of unemployment in an area.
If the Court is satisfied that a restriction fulfils one of these conditions, the parties to the agreement must then show that this is not outweighed by any detriment to the public at large. May I give your Lordships an example? It might be that it could be shown that lower quality goods would result from the removal of a restriction, but if quality were achieved only by maintaining a tight control over entry into the trade, the Court would have to consider whether, on balance, the restriction was reasonable. The Court makes a declaration of its findings, and if it decides that the restrictions in question are against the public interest it may make an order prohibiting the parties to the agreement from giving effect to these restrictions or from making any other agreement to the like effect. This order can be rescinded only under Clause 21, which gives the Court power to review its previous decisions, provided that the parties have been able to provide prima facie evidence that there is a
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material change in the circumstances compared with those prevailing when the Court took its original decision.
It has been argued that the issues raised in the proceedings before the Court will be economic and social ones which are not suitable for determination by a judicial tribunal. A difficulty is felt that under the Bill the Government are placing on the Court a task which will take judges outside the ordinary held of judicial activity and involve them in applying economic and value judgments in which they are not trailed. I am most anxious to make it clear that I have given careful consideration to this point and I have come to the conclusion that the questions at issue are not inappropriate for judicial determination within the framework laid down in he Bill.
I would remind the House that the courts have in the past interested the selves in the effect of monopoly in the public interest. For example, that great master of the Common Law, Lord Justice Bowen (as he then was) said in the Maxim Nordenfelt case that he could conceive of cases in which a restraint of trade might, as between the parties, he reasonable but ye: might tend directly to injure the public, and that such might be the case if it was calculated to create a pernicious monopoly in articles for English use. The House of Lords did not dissent from that view of Lord Bowen. Lord Parker, in the Adelaide Steamship case, accepted this conception of a pernicious monopoly as one calculated to enhance prices to an unreasonable extent.
The courts, and the great judges to whom I have referred, approached this subject on the basis of the Common Law. But, as your Lordships will appreciate, and as I have already emphasised, the issue is not left at large in this Bill. Clause 20 defines closely the conditions which the Court is to take into account, and does not leave it to the Court to determine the economic and commercial policy of the country. The Court has to decide the specific questions which paragraphs (a) to (g) in what I call the tailpiece of subsectior. (1) of Clause 20 lay down carefully and exactly. The Government do not deny that some element of economic judgment w11 be demanded of the Court, and that is way it will be a mixed one, and the expertise

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and experience of practical affairs of the lay members will contribute to its judgments.
I should like your Lordships for a moment to look at the alternative procedure of an administrative tribunal which could not be final. With such a system, responsibility would lie with a Minister, and ultimately with Parliament, for decisions on the action to be taken in each individual case. Not only would this be an extremely slow procedure (your Lordships with experience can imagine the time it would take, not only for the Minister to master the facts of each particular case, but for Members of your Lordships' House and another place to master them, if there was going to be a debate; it is no exaggeration—in fact it is an understatement—to say that it would be an extremely slow procedure) but also it would mean that each decision was liable to political considerations and that finality would be difficult to achieve. The Government regard it as highly undesirable that questions affecting the way in which business is carried on in particular industries should be settled in an atmosphere of Parliamentary controversy. It is for this reason that, after much consideration, we have decided on the procedure proposed in the Bill.
In our last debate I gave at length my reasons for believing that the procedure suggested by the majority of the Monopolies Commission would be less speedy than ours, and I need not repeat them to-day. But I would ask the House to notice that in Clause 22 (2) (c) we have made provision for enabling the Court to determine in a summary way any case in which the provisions of the agreement in question are substantially similar to those considered in any previous case.
Part II of the Bill is concerned with retail price maintenance. Again this is a very controversial matter. Strong and sincere views are held as to its importance to the manufacturer, the shopkeeper and the consumer; and equally strong is the denunciation of the methods adopted to enforce it and the rigidity which it introduces into the distributive system. It has been the subject of a number of official inquiries, notably the Lloyd-Jacob Report in 1949. The Government believe that the time is now
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appropriate to deal with this subject on a broad basis. They therefore propose to make the collective enforcement of resale prices unlawful, but, at the same time, to strengthen the means available to individual manufacturers to enforce their own—but only their own—resale prices. Collective enforcement is dealt with in Clause 23, which makes unlawful the two main methods used to enforce conditions as to resale prices—namely, collective boycott and collective discrimination. May I give your Lordships the effect? This will not only put an end to private courts and stop lists used in connection with resale price maintenance, and lessen the power over individual traders which the system of collective enforcement now places in the hands of trade associations, but also it will lead to greater flexibility in the distributive trades. I believe that it should result in a greater scope for experimenting in new and more efficient methods of distribution—for example, self-service.
At the same time, the Government recognise that it is important to protect the individual manufacturer against abuses—for example, the misuse of his branded goods as "loss leaders". I cannot think that anyone could seriously object to that. In Clause 24 it is provided that a supplier can enforce his resale price conditions by legal proceedings. As a result, he will now be able to undertake proceedings, not only against those with whom he has a direct contract but also against any dealer who can be shown to have acquired goods with notice of the condition. That is often described as "making the price condition run with the goods".
Part III of the Bill deals with the future role of the Monopolies Commission and contains provisions for amending the Monopolies Acts of 1948 and 1953. Before I deal with the more important of these provisions I should like to pay a warm tribute—and I am sure I do so on behalf of all your Lordships—to the Chairman of the Monopolies Commission, Sir David Cairns, and the other members of the Commission for the work which they have done. This has made possible this new step in dealing with restrictive trading practices which we are debating to-day.
The principles which have governed the Government's policy in this part of the

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Bill are twofold. In the first place, the method of operation of the Monopolies Commission is more suited to certain aspects of restriction of competition than is that of the Restrictive Practices Court, so that under the provisions of the Bill the Commission are deprived of responsibility in the case of those restrictive agreements which are registrable under Part I. All other kinds of restrictive practices remain within their jurisdiction as laid down in the Act of 1948. This means that in practice its main work in the future will be concerned with monopolies of scale—that is, single monopolies within the size laid down in the Act of 1948—and with agreements relating exclusively to exports from the United Kingdom. In the second place, there must be no duplication of work and of judgments as between the Restrictive Practices Court and the Monopolies Commission, and the Bill makes provision accordingly.
The provisions in the Bill which I have been describing to your Lordships present a coherent scheme for dealing with restrictive trade practices. Under this Bill restrictions on competition will he exposed to public scrutiny and to judicial examination and decision. It is right that that should he so. The essence of the free competitive system, in which the Government believe, is that individual enterprise should be given full scope and should not be under restraints imposed by agreements with competing interests, unless it can be shown that this is in the interests, not only of the parties to the agreement but of the country as a whole. I beg to move.
Moved, That the Bill be now read 2a.— (The Lord Chancellor.)
3.32 p.m.
LORD LUCAS OF CHILWORTH: My Lords, your Lordships will have gathered, front the careful and expansive exposition of the Bill from the noble and learned Viscount the Lord Chancellor, that it is very intricate and takes a lot of understanding. We on this side of the House do not quarrel with the Government at all upon the end which they have in view—that is, to free British trade from the restrictions and discriminations which have grown up to a rampant force in British industry this last fifty years. But there are various points in the Bill upon which we shall quarrel with the Government
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upon the method proposed, and I ask the Lord Chancellor straight away—and I know I do not ask in vain—that he will believe that we are as sincere in our expressions of view as I know he is in his.
Right front the outset there was a difficult choice: should the Government, when they reviewed the findings of the Monopolies Commission on collective discrimination, take the view of the majority of the Monopolies Commission, and make illegal straight away all those restrictive practices in the six categories which the Monopolies Commission found to be against the public interest. and allow appeals, by a court or tribunal, against that outlawing; or should they require the registration of all these practices which the Monopolies Commission had found to be against the public interest, plus others, and then outlaw those which a court found to be against the public interest? That was the choice of method—and I think I have put it fairly—facing the Government. The Government chose the latter course. Were they wise? I do not suppose that that argument will ever he settled. I do not suppose that there are many of your Lordships in this House today who will live to see the day when everything that is desirable in this huge field of discrimination and restrictive practices is ever cleared up. Therefore, I do not propose to rehash that argument. I think it would be more profitable it I directed my attention to the Bill and how to make it work on the lines which the Government have suggested.
Clause 1 deals with the appointment of a Registrar who is to keep all the registrations of these restrictive practices. I must confess that the explanation which the noble and learned Viscount gave as to the appointment of this superman confused me more than enough. Your Lordships will see, as the noble and learned Viscount said, that the appointment is to be made by Her Majesty The Queen. When I read that, it immediately raised the thought: is that being dote in order to take away the authority of Parliament to question the actions of this individual? Because I know of no one in industry or trade who is going to be more powerful than this Registrar. He will be the public prosecutor—the director of prosecution. As a matter of fact, he has been likened to the Director of Prosecutions in this Bill. If he is not to be questioned, is Parliament allowing the

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economic policy of this country to go out of its grasp? The noble and learned Viscount, if I heard him correctly said, "Oh, yes; it will be possible, by Question and Answer in Parliament, to raise questions as to the procedure, the Registrar's actions, the pace of his work, how he is doing it, and everything that is proper to ask." I therefore assume that, as Her Majesty will appoint this individual—and I take it that Her Majesty would not think of appointing anybody unless consultation took place, I suppose with the Prime Minister—the Prime Minister, in another place, and the Leader of your Lordships' House here, would answer any questions which any Member likes to put with regard to the conduct of this individual.
THE LORD CHANCELLOR: Would the noble Lord allow me? I did not give the point in detail, because I thought it would come more conveniently in reply. But as it is troubling the noble Lord, I think he ought to know it at once. I did say, "appointed by the Crown on the recommendation of the Prime Minister." That means that the Prime Minister must answer questions as to the suitability of the appointment and, should that sad occasion ever arise, as to the suitability of his dismissal. So far as his "housekeeping" is concerned, the Prime Minister is the First Lord of the Treasury, but on the matter of "housekeeping" that would be answered by a Treasury Minister. The noble Lord will remember that there is a provision for the Board of Trade to give directions as to the order in which cases should be called out. If that point arises, the President of the Board of Trade would answer that, because it is his responsibility under the Bill. The final position is that the Registrar is entitled to make certain regulations with regard to registration, the keeping of the register and so on. There again, that is a Board of Trade matter, as appears in the clause. I am sorry to keep the noble Lord, but the regulations are subject to Negative Resolution. If a Prayer is raised, the Minister from the Board of Trade will answer to the Prayer. I am sorry to interrupt the noble Lord, but I wanted to clear up the point. I blame myself for not making it clearer.
LORD LUCAS OF CH1LWORTH: I am grateful to the noble and learned Viscount, because it is an important point. I am happy to know that anyone in your Lordships' House can cross-examine the Government, or the appropriate Minister in the Government—in this House it is always "the Government"— upon, as the noble and learned Viscount has put it, the "housekeeping" of this individual.
Then we come to Clauses 2, 3, 4 and 5 which establish the Court. Again, there was the choice of the noble and learned Viscount. Here is a Court to decide upon all these agreements. Perhaps the noble Lord will tell your Lordships whether it is so, but I understand there may be called in for registration nearly 1,000 agreements. This is the court that will decide upon them. If your Lordships will look at Clause 20, to which the noble and learned Viscount has drawn your Lordships' attention, you will see that it says, in plain words, that the agreements that are called for registration, which the Registrar will choose for registration and which he very likely, under the direction of the Board of Trade, will put before the Court, are prima facie against the public interest unless they satisfy the requirements of paragraphs (a) to (g).
The argument, of course, is: should this be a judicial court or should it be an administrative court, as the noble and learned Viscount has said? There was a distinguished predecessor of the noble and learned Viscount who was a "rather susceptible Chancellor." He used to sing a song that went like this:
"The Law is the true embodiment
Of everything that's excellent."
I know that the noble and learned Viscount on the Woolsack will not feel affronted if I say that there are some of us who do not hold quite the same opinion. Look at what these "three wise men" have to do. They are one judge and two lay judges; and the two lay judges can overrule the judge on questions of fact but not on questions of law. They have to decide all these questions as to whether these hundreds of agreements dealing with the whole ramifications of British industry are in the public interest. They have to decide the economic and political questions which arise naturally out of all the ramifications of these various price rings,

25
agreements and restrictive trade practices. I feel certain that the noble and learned Viscount will agree that there can be two opinions as to whether these are justiciable issues. Are we introducing a new practice into the law of this country? I do not know where these laymen are to be found, unless, looking back over the history of industry, the noble and learned Viscount who will be responsible for the appointment takes some credence of the fact that a reformed poacher makes the best gamekeeper. But these men will have to be very wise and responsible, because no Case Law exists at the present time on this subject.
The noble Lord who is to reply to this debate may give me grounds for not holding such a strong view as I hold now, but I am afraid that in the course of years it will be these courts which will dictate the economic policy of this country and be superior to Government. It may be right, but I should have preferred an administrative tribunal. Admittedly, the noble and learned Viscount is correct as regards the time factor; but look at the time factor here. Clauses 2, 3, 4 and 5—in point of fact, the whole Bill —will be a lawyer's paradise. I know that to say that is heresy in your Lordships' House; but from the word "Go" anybody connected with one of these restrictive practices can appeal against registration. He can appeal right through the whole case, and that appeal against registration goes to the High Court. The appeal against the decision of the Restrictive Practices Court can go to the High Court on questions of law but not on questions of fact, and eventually can come to your Lordships' House.
VISCOUNT HAILSHAM: To the Court of Appeal.
LORD LUCAS OF CHILWORTH: To the Court of Appeal. Then cannot it come to your Lordships' House? Why not? If the noble and learned Viscount the Lord Chancellor really believes that some of these economic and political questions are justiciable issues, are they going to be turned into legal issues? In the Court of Appeal there are no lay judges. I was rather hoping that at some future date some of these issues might be decided in your Lordships' House in its Judicial capacity, and we could all join in. I ask the House to consider the point whether it is in the
26
eventual public interest that these courts should cover these very wide agreements and issues and have such tremendous power.
I come now to Clause 6, which is the next clause that worries me. Clause 6 describes those agreements to which Part I applies and which will have to be tackled. At some time or another, I should like the noble Lord, Lord Mancroft, to answer this question. I can only take it that the Board of Trade will give directions to the Registrar that he is to bring these cases before this Court in batches—not as single, individual agreements, because if it were clone in that way, it would take years and years. Can the noble Lord tell me, on behalf of the Government, when he thinks that we shall see the first outlawing of the worst of these practices under Clause 6?
We come next to Clause 7, which deals with excepted agreements. I am rather disappointed that the Government have not brought under Clause 6 a class of agreements which is not exempted under Clause 7—what one might call sole agency and exclusive agreements. I know the reason and I think I sympathise: there are so many that they would clutter up this Court for ever and a day. But at some time this question will have to be tackled. Let us learn from America. Some of these exclusive agreements in America—do not forget that many of them stern from the operation of the Sherman Act—have had some dire consequences. One has to ask oneself: is it right, is it in the public interest, that the economic life and death of a number of people engaged in the distributive trades should he at the mercy of one monopoly or one individual? I shall come back to this point, but in regard to public interest I fail to see the difference between a monopoly operated by a hundred different producers and a monopoly operated by one prod Jeer covering practically 100 per cent. of that production.
My Lords, I do not wish to reopen the question of oil companies and petrol filling stations in this country. But do not forget that these sole agency and exclusive agreements can be prejudicial to the economic policy of the Government. What is happening in this country at the present time? Instead of having one filling station operating ten petrol pumps

27
with ten different brands, you have ten stations each with its particular brand of petrol. If anybody cares to tell me that that is in the interests of the country at the present moment, then I do not believe him. Now we are faced with another large competitor. Owing to the "Trinidad deal", as I think it is called, the refinery capacity of this country will be largely increased and an outlet will have to be found for that increase. I cannot imagine that the Texas Oil Company will not join in the "gold rush" and dot around another lot of petrol stations. That may be a question for the future, but to-day it is a big problem and it is accentuated—if I may anticipate what I am going to say a little later—by the failure of the Government in Clause 24 to face up to real issues. Clause 8 sets the timetable. I hope that the noble Lord who is to reply will give us some idea of the timetable, of the priorities, and as to when we can expect the first fruits from the legislation which may become law quite shortly.
I come now to what I consider to be perhaps the most important part of this Bill, the part that will affect the public most in the shortest space of time, and that is the question of the enforcement of resale prices. Under Clause 23 there is a collective enforcement, and here I find myself wholly in support of the Government. As I have previously told your Lordships, I have lived all my life with this problem, and there was a time when the resale price maintenance and the collective enforcement of resale maintenance was economically necessary. There was a time when it did not matter to those engaged in industry and distribution what low wages they paid and what bad condition of employment they imposed so long as they could undercut the price of their competitors. But that day has gone, and there is hardly a trade or industry in this country where the workers are not protected by agreements as to conditions of labour and wages. The position had got to such a state that it became farcical.
I want to draw to your Lordships' attention the fact that just after the Report of the Monopolies Commission in regard to collective discrimination was published, there was issued a Report from the Monopolies Commission on the supply and export of pneumatic tyres. That was the first Report ever produced
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by the Monopolies Commission which really got to the heart of the problem of resale price maintenance. If ever anything knocked the last nail into the coffin of resale price maintenance it was that Report on the supply and export of pneumatic tyres. I am going to quote some of the things it says because I want to illustrate to your Lordships the viciousness that had crept into the collective enforcement of resale price maintenance. Perhaps I had better qualify that—I will not say it was "vicious"; I will say "unseemly" or use a milder expression than "vicious".
I want to quote what they have to say regarding the activities of a certain firm in the tyre trade in this country which held not a monopoly position but a near-monopoly position. I am not going to give the name of this firm because I do not want it to be thought for one moment that I am making an attack upon one firm—I am not; I am making an attack upon the practice which grew up and which defeated the whole ends which collective resale price maintenance really set out to achieve. I quote from paragraph 415 at page 88 of this Report of the Monopolies Commission. It says that this firm acquired the controlling interest in various tyre distributing concerns, and it continues in this way:
"This was not done openly, because it might have embarrassed the company in dealing with its other retail outlets,
"This policy of secret acquisition and control, of distributive outlets has been pursued consistently ever since 1927."
Then it goes on to say in paragraph 417—I will not read the names of the concerns that it took over or acquired—that the groups had been able, with the producer's finance
"to expand substantially by the acquisition of subsidiary companies and by the opening up of numerous branches, so that the whole of England, Wales, Scotland and Northern Ireland is now covered with a network of sales outlets"
under this particular producer's control.
What happened? I speak from personal knowledge when I say that these concerns were the biggest price-cutters in this particular trade. So here was a producer with a substantial outlet of retail sales, subscribing to collective price maintenance which could never be brought into operation against the retail outlets they controlled. This went on until there

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was about £1¾ million invested. The Report says:
"The investment has always been profitable, the gross yield having varied from the lowest figure of 7·7 per cent. in 1952 to 43 per cent. in 1951."
The investment stood at £1,757,904 in 1952. While they were subscribing to resale price maintenance, it was noted that, in recent years they had
"paid certain confidential allowances to a small number of tyre distributors,"
over and above what they were allowing to everybody else. Yet the price-investigating organisation during this period was pillorying and chasing small traders round Stockport and Bournemouth because they were in breach of price maintenance agreements. I feel certain that any right-thinking person would say that that is bad and discriminating in an under-cover way and is not a practice that we should allow to be carried on.
The tragic part is that this is the only Report that has ever been produced to this country on this practice. But this firm were not alone in carrying on the practice: it goes on rampantly right through every section of trade and industry in this country. I am delighted to think that at last Her Majesty's Government have taken action, because price-cutting is profitable only when there are a sufficient number of honest people in trade who will not perjure themselves by signing an agreement which they do not intend to honour. Everybody trading in branded goods has to sign an agreement with the producer of these goods saying he will honour the price maintenance clauses in the, agreement and will not sell those goods at a higher or lower price. Here you have a concern with nearly 50 per cent. of the distribution under their control and without any chance of one of those people ever coming before the court of justice that used to operate upon these matters.
I should like to ask the noble Lord who is to reply a question. Clause 23 (3) says:
"The foregoing provisions of this section shall not apply to an agreement or arrangement to which the only parties are two or more inter-connected bodies corporate, or two or more individuals carrying on business in partnership with each other."
I understand that to mean that an interconnected body corporate can be an amalgamation of half a dozen firms, and
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that they can operate a collective price maintenance or collective resale price maintenance agreement among themselves. I can understand these people being taken out of Clause 7, where, in subsection (1), the same thing applies, and where, among excepted agreements, is mentioned:
"any agreement to which the only parties are inter-connected bodies corporate or individuals carrying on business in partnership with each other."
May I again give an illustration from the motor industry? The British Motor Corporation have several firms under their control—Austin, Morris, Riley, M.G., Morris Commercial and so on. I take it that that would be a body corporate. They can operate a price-maintenance scheme. Why? I can understand Her Majesty's Government saying. under Clause 7, that an arrangement between the companies which I have mentioned, such as that their engines should be made at one factory, their back axles at another, and their gear boxes at another, is not in restraint of trade, or discriminatory; but I cannot understand why the Government say the same thing under Clause 20. There may be a simple explanation, and perhaps the noble. Lord will give it to me when he replies.
I now come to Clause 24 where we join issue with Her Majesty's Government very strongly. We say quite frankly that we cannot distinguish the anti-social difference between collective price maintenance and individual price maintenance. With the set-up in British industry at it has developed to-day and the aggregation of power in the production world, discrimination practised by a single producer can be as harmful as discrimination practised under a collective scheme. I have only to cite the Monopolies Commission, who, in their Report, made no distinction between collective and individual price maintenance. In the Report on the tyre industry, from which I have just quoted, they say, quite frankly, that they come to the conclusion that:
"It appears to us that in the circumstances of this industry, with which alone we arc here concerned, the only way to ensure a reasonable degree of price competition in sales to the public is to abolish the maintenance of retail prices, whether it be individual or collective."
The personnel on that Commission was practically the same as that on the Monopolies Commission which produced the Report I have mentioned. On the

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Committee stage we shall seek to have this clause altered. The noble and learned Viscount who sits on the Woolsack really made the case. What does price maintenance mean? It prevents efficient trading; it prevents efficient sources of distribution from experimenting with new and better methods of distribution to the public.
Might I ask the noble and learned Viscount this question? What is the difference between a trader charging for delivery of his goods to the house of a customer, and a customer being charged a reduced price for the goods if that customer will go to the shop and collect them? What is the difference? One is allowed; the other is not. I believe I am right in saying that the Bill—at least this is what I understand—is going to apply to newspapers. Once when I stayed at a country hotel I was charged for having The Times delivered to me. Was that a breach of individual price maintenance? I believe that the only sanction in the newspaper world applies if a newsagent cuts the price. What is the difference between the newsagent charging me less for my paper if I go to a railway station and collect it than is charged if it is delivered to my house?
And then look at the overpowering discrimination in the Bill. I touch upon this point with some trepidation, seeing that I have sitting on my left a noble Viscount who is the great master of the subject. Look at the discrimination against co-operative societies, who really do practice the charging of low prices to their members. Just consider this point. It is a hundred years since nine individuals started the Co-operative Movement in Rochdale. I suppose the membership—my noble friend will correct me if I am wrong—is now somewhere in the region of 10 million or 11 million.
VISCOUNT ALEXANDER OF HILLSBOROUGH: It is 11½ million.
LORD LUCAS OF CHILWORTH: Eleven and a half million—I am obliged to my noble friend for the figure. That is the membership which has been built up in a hundred years. The Co-operative Wholesale Society of this country has not built up its great position by making and selling shoddy goods. Yet it has returned to member-customers in price reductions,
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over the last fifty years, I suppose on an average something like 8 per cent. or 9 per cent. of the amount of their purchases. Why has it been able to do that? Because of the inordinately high cost of independent distribution. I am going to suggest that if you are studying the public interests—and that is all I am concerned with—you cannot do away with collective price maintenance and retain individual price maintenance. What you can do is this. You can study the public interest by saying: "Yes, the producer may protect the maximum price of his product, but he must not bring sanctions against anyone who, by his efficiency, can sell that product to the public more cheaply". In the present set-up and when there is an accumulation of productive power in a few hands, if the Government are sincere and really want to see better systems of distribution brought about—I would agree with them that the distributive trade is one of the most expensive luxuries we have in this country, and I have operated in it for thirty-five years—they will have to do away with individual price maintenance.
When it comes to the next clause in the Bill, it seems that the Government are now going to give sanctions. That there should be price maintenance in relation to second-hand goods means that you are going to get into a crazy world. I will not deal with the matter now; I will wait till the Committee stage. But that is what the Bill says in Clause 25. Subsection (1) reads:
"For the purpose of this Part of this Act a condition as to the amount of discount which may be allowed on the resale of any goods, or as to the price which may be paid on the resale of any goods for other goods taken by way of exchange, shall be treated as a condition as to the price at which goods may be resold."
There you are getting into the jungle, and you will not see any daylight in that.
So, my Lords, I have come to the end of what I have to say. We shall give the Bill a Second Reading. As I said at the beginning of my speech, we agree with the end which the Government wishes to achieve. But we shall look very carefully at many of the provisions in this measure, and we hope that we shall be able to play our part in making the Bill a better Bill for the good of the only people whom, in my opinion, it should seek to benefit—that is, the consumers in this country.
4.16 p.m.
LORD GRANTCHESTER: My Lords, we on these Benches welcome this Bill. Her Majesty's Government have tackled a difficult matter with a good deal of courage. To us, who believe in a free and flexible economy, nothing is more vital than that the field should be kept clear for competitors, and that access to the field of competition should be kept open. Competitors must not be allowed to bar the way to would-be newcomers nor, where they are in the field, to put, either singly or in combination with others, obstructions in the path of those who are weaker. This is necessary not only to secure fair play for competitors generally but because the competitive spirit in man has always made for vitality, for progress and for efficiency, which is reflected in lower costs and cheaper prices. The absence of competition, on the other hand, has always led to inefficiency and slothfulness.
It is axiomatic, therefore, that the maintenance of competition is in the public interest, and restriction contrary to the public interest—I am using the words "public interest" because that is the term used in the Bill. I should very much prefer to be more precise and to say "the interests of consumers". Public interest is often a matter of balance, and it is just this question of balance and its determination that is bedevilling this Bill. Can restrictions ever benefit the consumer? In a simple society the answer would probably be unquestionably, "No". But our modern economy is very complex and highly technical, and it involves much costly equipment. Her Majesty's Government have come to the conclusion that in this situation it may be possible to make a case for certain practices which in isolation are undesirable. We are inclined to doubt this, but we are not prepared to challenge the right to prove that our doubts are misconceived, provided that the onus of proof and the cost of proof are placed upon the appellant, and provided that what is required to be proved is clearly laid down in this Bill.
Her Majesty's Government have gone a long way to satisfy these provisos, but there are certain clauses in the Bill which we consider unsatisfactory and to which I should like to draw your Lordships' attention. These clauses, when the Bill
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is considered in Committee, we shall seek to amend. The first of these Amendments will be designed to make clear that "public interest" means the interest; of consumers as consumers. We consider that consumers, either singly or through an association, and also competing firms, should be allowed, if they wish, to present evidence in any judicial investigation on the question of consumer interest. Secondly, we are concerned that the exemption allowed in Clause 7 (i), mentioned by the noble Lord, Lord Lucas of Chilworth, should not be used to defeat the purposes of the Bill. Without some qualification, mergers or the promotion of subsidiary companies might prevent a desirable investigation.
Thirdly, we think that Clause 24, to which the noble Lord also referred, is unnecessary. This clause deals with the subject matter of contracts between supplier and distributor. Breaches of such contracts can surely be dealt with under the normal procedure of the courts. Fourthly, we shall seek to amend Clause 20, because we consider it, as drafted, inimicable to the maintenance of flexibility in the economy. This is the main purpose of the Bill, and we believe it to be quite impracticable to interpret the clause as drafted. The unavoidability of changes in employment when changes are inevitable in a particular industry has been emphasised over and over again recently by Her Majesty's Government, and to ask a court to interpret "reasonableness" and to adjudicate upon "balance", as suggested in the last paragraph of Clause 20 (1) is, in my view, altogether vague. Then, we are doubtful about the desirability of reducing the number of the members of the Monopolies Commission, at any rate at an early date, and we should like an assurance that there will be no haste in acting under Clause 26 (6).
In conclusion with the reservations that I have indicated, we welcome this Bill as the firs: part of an attack upon restriction. But we would remind Her Majesty's Government that the second part of the necessary attack upon restrictions—those imposed by organised labour—must not be overlooked. We recognise that in this matter there will be even greater difficulty in being fair than in drafting this Bill. It is so difficult—yet no impartial observer can doubt that it

35
must be faced—that we would urge Her Majesty's Government, immediately this Bill becomes law, to prepare the way by setting up a Royal Commission or other body which could take into account, among other matters, regulations designed to protect the health and safety of workers, matters which noble Lords on the Benches next to us continually raise in justification of restrictive practices. It is clear that it is quite unrealistic to rely upon any effective action in the matter of restrictive practices of organised labour being undertaken by the unions of employees, any more than one can rely upon the associations of employers to take action about the restrictive practices with which this Bill is concerned. I should like to ask whether, during this debate, we could not have an assurance that the second part of the attack on restrictive practices will not be overlooked by Her Majesty's Government.
4.25 p.m.
LORD McCORQUODALE OF NEWTON: My Lords, I would crave the indulgence of your Lordships for my first speech in this Chamber. I still have the most vivid recollections of my maiden speech in another place, twenty-five years ago, and I am not at all sure that the present ordeal is not more formidable than was the first. I feel that I should start by declaring my personal interest in the subject matter of this Bill. I am closely connected with the British Employers' Confederation, but I am now speaking entirely on my own behalf and not in any way briefed by or connected with them.
I have spent my working life in a highly competitive industry, that of commercial printing, where I think there are something like 8,000 separate and different firms, with no firm of a larger size than would employ more than 2½ or 3 per cent. of the personnel in the industry. Therefore, I am well aware of the virtues, the obvious virtues, of free competition. It is by free competition that industry in this country has been built up. But equally, and in the past painfully, I have also been aware of the evils of unbridled and "cut-throat" price-cutting. There is not much of this in present circumstances—one would not expect it. But anyone who was engaged in management in the years 1930 and
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1931 will still have a lively recollection of the difficulties of that time; and I suppose that the majority of the restrictive practices that we are now considering were started about that time. They were started under dire necessity, for they sought to bring some stability for employment and trade in a highly unstable period. They have now outlived their usefulness, however, and should be discarded. I think that we are all agreed about that. In present circumstances—and I emphasise these words—they well may be contrary to the national interest.
So our criterion in this matter must be the national interest at the time; for, as circumstances change, so does the national interest change as well. As the noble Lord, Lord Grantchester, has just been saying, it is the consumer who is chiefly interested in this Bill. But in most cases in this country the consumer and the producer are one and the same man, and it would be foolish if, in our zeal to benefit the consumer, we hurt the same citizen as producer, so that in the end he was worse off than he was before. I think that this Bill is a serious and honest attempt to deal with these questions in a brave and businesslike manner. I use those adjectives of choice. I say that it is honest, in the sense that there has been no pandering to political pressure in the clauses of this Bill. It is a businesslike Bill. It could not have been an easy task for Her Majesty's Government to steer a fair course between all competing interests, and I think that in a large degree this measure succeeds. I, for one, welcome it, though there are some detailed points that I should like to make.
In this, my first speech in your Lordships' House, I would assert that British industry and all those engaged in it can be proud of its integrity and its achievements. If we can improve it still further, by all means let us use our best endeavours to do so. But I, for one, have little sympathy with those who, in ignorance, go round vilifying it and running it down. Abuses are bound to occur in all walks of life, and this applies in industry as well; but we all hope that the detailed and impartial inquiries that the Restrictive Practices Court will make will help to eradicate these abuses without harming industry in general.
I particularly welcome the decision I that the inquiry should be by judicial

37
process and not by administrative action. The appointment of the Registrar, his duties and obligations; the mixed composition of the Court, containing that essential element from the Judges' Bench, will, I believe, inspire confidence in those who may come before it—and inspire confidence to a degree which, without disparagement, I think I may say the Monopolies Commission have never quite been able to attain. In passing, I would say that I think the idea of a mixed Court will be most interesting, and I believe it will be a valuable precedent for other actions in the future. Having set up the judicial Court, and given it wide powers of investigation and evidence, are we going to make the best use of it? I refer, of course, to Clause 20, which is the crux of this Part of the Bill. In the Explanatory Memorandum to the Bill it says:
"A restriction will be deemed to be contrary to the public interest unless the parties show that one or more of the circumstances described in paragraphs (a) to (g) of Clause 20 (1) exists …"
I have endeavoured to emphasise that circumstances change, and what may be in the national interest at one time may not be at another. I am told, on good authority, by my friends in industry (I should not like to vouch for this; I cannot myself think of any case), that they can conceive of a position in. which the Court way well have to ban a so-called restrictive agreement under Clause 20, even if it had been conclusively shown that the agreement harmed no one and was, in fact, of great value to those working in that industry. If that is so—and I put it forward only as something that was suggested to me—then surely it is foolish. I am well aware that in setting up a judicial Court we must define our policies; we must make what I believe is called a justiciable issue—I am afraid I am not well versed in these terms. I would, however, urge that an effort be made to see whether some slightly less stringent words can be found. Could not we give the Court some powers to recommend to Parliament, if they so desired, an amplification or modification of the paragraphs of Clause 20 to suit what they deemed to be the circumstances of the national interest at the time, without the necessity for coming back to Parliament, with all the paraphernalia of an amending Act going through all its stages? I feel
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that it we could get some such provision —I am not skilful enough to work out an Amendment myself—it would he most valuable.
Another point on which I should like to touch is the export trade, which is so vital to this country. It is, of course, highly desirable that in the export field firms in an industry should work closely together so as best to satisfy that market from this country. It is foolish in the extreme for them to go cutting each other's throats it a market of that sort. It is, also, I think, foolish to expose to competitors overseas in an export market all the cards that may be in our hands. Therefore, welcome the note in Clause 7 (9) (a), that the supply of goods by export from the United Kingdom is left out of that clause of the Bill. It comes back in Clause 29, however, and I wonder whether it is really necessary. Dealing with goods that are to he exported ever-seas, is it necessary or wise for agreements to be registered? And why should they have to be registered at the Board of Trade? I should like to ask whether further consideration may not be given to that matter. It is essential that nothing should be done in any way to imperil the export market, or even to give an excuse to traders not to go into that market.
I cannot offer any opinion from experience on the retail price maintenance question, but I have heard arguments on both sides, and I should have thought that, in all the circumstances, the solution arrived at by the Government is the wise one. But in view of the fact that grave anxieties have been raised, I have no doubt that the Board of Trade will keep a close eye on the working cut of this measure, in order to see that, if any of these dire calamities do happen, they can be rectified. In passing, I may say that I agree entirely with the Government that restrictions of output labour would have no proper place in a Bill of this sort; but that does not mean to say that they should not be dealt with.
I have been trying to work out for myself what might be the effects of this Bill. They are not easy to forecast. There have been some optimistic statements as to a radical effect on the price level of this country. It will, of course, have an effect on some prices, but in the main

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I do not think it will be large. I am fortified in that view by the final remarks of the Government spokesman on the Third Reading in another place, when he said [OFFICIAL REPORT, Commons, Vol. 554 (No. 170), col. 905]:
"… I wish … to say that we do not put this Bill forward as a cataclysmic event.…"
I do not believe that anybody in the industrial part of the world would expect it to be a cataclysmic event. In an expanding and rising market the absence of any stabilising agreements may well mean that prices go higher than they ought to, and I feel that we must be prepared for that. The absence of any agreements on prices may well, in an expanding market, push the price higher than it ought to go; but in a contracting market, the price will fall faster than it would if there were no stabilising agreement between the traders. Therefore, we shall possibly see a wider variation of prices than we have seen in the past, and I hope that, by and large, it will be downwards. In conclusion, I would say: do not let us in industry be deflected from the main task. The main task is to keep our costs reasonable. In the end, prices depend upon costs; and it is, and must be, the endeavour of everyone engaged in industry to keep our costs competitive in the world market. If this Bill helps in any way towards that end, I feel that it is to be welcomed.
4.38 p.m.
LORD BAILLIEU: My Lords, it is ever the privilege of a noble Lord who follows anyone making a maiden speech in this House to tender initially the congratulations of your Lordships to that person. May I, therefore, with great pleasure and pride, act in that rôle and say with what pleasure we have listened to the noble Lord, Lord McCorquodale of Newton, to-day. He has had a lifetime of experience in another place; he brings rare qualities to this House, which we appreciate, and, above all, he brings a singular knowledge to the subject matter of this debate. We hope that we may hear him on many occasions in the future.
I think that every speaker, so far, has stressed the great importance of this Bill to industry, to this country and to the future livelihood of our people. While the measure may not be cataclysmic in its effect or its purpose, I feel that if half
40
the expectations which are centred upon the Bill by the Government are realised, it will serve the country well. But as the noble Lord, Lord McCorquodale of Newton, has intimated, we must wait on the event. So far as the position of industry as a whole is concerned, I think I am right in saying that we do not oppose the taking of any steps to regulate restrictive practices. Our concern is solely that each case is dealt with on its merits; that blanket condemnation is avoided; that decisions are arrived at by Judicial process and not through an administrative tribunal advising a Minister responsible to Parliament. We accept the necessity for arming the Government with whatever powers are reasonably needed to protect the public from the wrongful exercise or abuse of power by any section of the community. The noble and learned Viscount the Lord Chancellor has dealt with the main details of the Bill in a thorough-going way. The noble Lord, Lord Lucas of Chilworth, followed him in considerable detail. May I say that I propose, in the course of my remarks, to call your Lordships' attention to a few facts, and to make one or two comments on certain demerits of the Bill, as I see the Bill as it stands to-day, and, incidentally, to refer to certain remarks made by the noble Lord, Lord Lucas of Chilworth, in the course of his speech.
We are a trading nation, dependent upon imported supplies of food and raw material for the feeding of our population and to sustain our industry. We must buy—that is, import—in order to live and to work. We must sell—that is, export—in order to acquire these supplies, and we must do this in a competitive world and at prices the world will pay. If we do not produce enough, and at the right price, then we shall go short of food. of raw material; our economy will slowly run down, and we shall be faced with mounting unemployment and grave social and political difficulties. So we see, inescapably, that the standards and comforts of life, our social and cultural amenities, depend directly on the efficiency, productivity and profitability of British industry, in which, of course, I include the greatest of all—British agriculture.
Measures, therefore, which directly concern British industry, place a grave responsibility on the Government and the Legislature. Irrespective of Party, as we

41
in industry see the position, the Queen's Government must be carried on. This will be possible only if there is a broad understanding between Government and industry, irrespective of the Party which may be in power. That would be impossible if industry were to be shackled by restrictions, surrounded with unjustilied and unworthy suspicions and by legislation and administrative climate inspired by presumptions repugnant to our traditions of tolerance, good humour and common sense.
The other fact to which I would allude is that I am a chairman of a company which is a member of an industry that has been under continuous interrogation by the Monopolies Commission for over three and a half years. Noble Lords will therefore discount my views as they may feel appropriate. I feel, however, that they will wish me to contribute what I may, from such experience as I have, and from the experience of those with whom and for whom I work. There is one thing here which I hope the Legislature in the future will do something to correct; that is, the enormous diversion of time involved in handling and responding to interrogations. We have computed in my company that, between 1952 and 1955, when the Report on tyres to which the noble Lord, Lord Lucas of Chilworth, referred was submitted, dealing with those inquiries absorbed some 10,000 man-hours by the three executive directors and the secretary of my company. Nothing is counted, however, of my own time, nor the time of others running down the line through a big organisation. If we multiply that total by the large number of organisations which have found themselves in a similar position, if we think of the enormous time that has been diverted or concentrated by Government sources, Parliamentary time and so on, we are paying a pretty heavy price to-day for the work that is being done.
I think we all agree that taxation itself is the buttress of high Government expenditure, and that it is also a main element in inflationary pressure. But I wonder how often we have stopped to consider that there is another direct form of taxation falling on our physical resources through legislative and administrative action involving unproductive diversion of the time of those intimately responsible
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for the affairs of industry. Here is one of those "Unseen Things" to which Frederick Bastiat referred, in those admirable essays of his, And to which, I venture to suggest, we might well address our minds in the future. I submit that we can no more continue to suffer heavy financial burdens than the many exactions on our time which the apparatus of the modern State continues to set upon us. Both make a draft on oar vital resources which we cannot sustain. Both, I suggest, must be subject to check and scrutiny in the public interest, which it is the declared purpose of this Bill to protect.
The third fact to which I would direct your Lordships' attention is that, in looking at this field where the Bill is designed to operate, I know of no case where it has been affirmed that trade associations have acted illegally. Whilst findings have been reached that certain practices are against the public interest, this has sometimes been done by a majority verdict only, and has been stated as a conclusion, so far as I know, not supported with proof or by reason. Nor can I recall, as a fourth fact, where the findings or the Monopolies Commission thus far can be said to have lowered prices, increased efficiency or raised exports. These, after all, will be the practical tests by which posterity will judge the efficacy of this measure. Therefore, whilst we give a welcome to this Bill in the form in which it comes to us, I would enter a caveat against building up excessive expectations for the future. I suggest that in the course of our discussion we should avoid the danger of "missing the wood for the trees," of losing ourselves in the minutiae of the Bill and in the minor contention of mere debating points. Let us constantly bear in mind what should he the central purpose of the Bill and the deeper, longer-term interest of our national life.
Here may I turn aside for a moment to refer to certain remarks of the noble Lord, Lord Lucas of Chilworth, which, with veiled restraint, failed to identify my company with some of the remarks he made? I think it is only right, however, that I should reveal to the House that I am quite conscious of my own identity and of my own company. I would merely make two comments. First, I would remind the House of the reasons recorded in the Report for which Dunlop

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entered this new distributing field. It reads as follows:
"Because of this threat to their normal retail outlets, and because of the fear that the pattern of tyre distribution might follow that of the U.S.A., where a high proportion of the retail trade is done by traders under the direct control of the larger manufacturers, Dunlop adopted a new policy of controlled distribution. This involved the acquisition of controlling interests in various tyre distributing concerns. This was not done openly because it might have embarrassed the company in dealing with its other retail outlets."
Then, in their Conclusions, the Commission state:
"The interests of the Dunlop Rubber Co. Ltd. in the distribution field and the methods by which they have been conducted have not tended to restrict competition and are not against the public interest."
I have suggested that we might look at the deeper purpose—
LORD LUCAS OF CHILWORTH: If the noble Lord has now finished referring to what I said, I did not question the Commission's conclusion, but I did want to question the reason why an advent was made into the distributive field. I dealt only with what I thought, and what was plainly stated in the Report, to be the effect of such advent over the years, with the number of outlets that were then controlled. When the noble Lord says that the Commission came to the conclusion that those activities were not against the public interest, the Report did come down heavily and say that resale price maintenance, both collective and individual, was against the public interest. That was all I was concerned with.
LORD BAILLIEU: I do not wish to get away from the main stream of the argument. If the noble Lord can reconcile "coming down heavily against resale price maintenance," with the fact that four distinguished members out of nine did not agree with their majority, then I am with the noble Lord.
I ask, then, what is the deeper purpose of the Bill? Surely, in simple words, it is to bring under control, and if necessary, prohibit, actions or practices which could be demonstrably proved to be prejudicial to the public interest. But it is not only necessary that justice should be done in matters affecting industry; I submit that it should seem to be done.
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What troubles me is how this can seem to be done when the opening paragraph of the main operative clause, Clause 20, places on industry a presumption which it regards as unfair and inconsistent with what we have understood to be a traditional British legal practice. So far as I have been able to ascertain, there is no provision in any existing Act of Parliament in similar terms. Put in a simple way, it means that a restrictive agreement is to be deemed to be contrary to the public interest unless the Court is satisfied otherwise. In other words, the onus of proving that there is no detriment to the public interest is to be placed upon the parties to the agreement and not upon those representing the public, although it is the latter who will claim that the public have sustained injury.
My own inclination would have been to modify this presumption and to say that a restrictive agreement shall be presumed not to be contrary to the public interest if it can be established to the satisfaction of the Court that the public interest has suffered no damage. I am told that there are reasons why this Amendment cannot conveniently be made. I listened with attention and respect to the particular words of the noble and learned Viscount the Lord Chancellor, but I am still a little mystified. I feel that I am in duty bound to my own constituency, which is concerned with industry, and as representing industry in a fairly wide field, to state categorically, and so that it can remain as a permanent record of dissent, that industry not only regards the presumption that what it has done has been against the public interest as wholly unjustified but strongly denies its truth.
I have little to add. One can well understand that the onus of proof should be placed upon those who wish to indulge in a certain restrictive practice, but surely in can equally well be argued that those who accuse or lay complaints should be required to justify their accusations. It is the implication which flows from this presumption that occasions those who are responsible for the conduct of business affairs so much apprehension that they are not being fairly judged. There seems to be an assumption that many business agreements are in themselves wrong; that when business men get together and discuss prices, this must automatically

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restrict competition; or that, when agreements are made, a reduction in competition must follow.
All this tends to imply that those who run industry arc least of all able to judge where the public interest lies—although the reconciliation of the public interest with theirs is one of their first concerns—and that others, be they members of the Legislature, the Press or the Civil Service, can do it very much better. I notice that the President of the Board of Trade himself, on the Second Reading of the Bill, said:
"The parties to an agreement of this character are not the right people to judge whether the practice is or is not against the public interest."
This may well be, but it might equally well be said, I suggest, that it is unwise for the Legislature to form a presumption of guilt against the parties to the agreement before the issue is fairly tried. I would therefore strongly urge the Government to look again to see whether it is not possible to construct this measure, which has many virtues and which we are supporting, effectively without the inclusion of these qualifications.
There is a further point of great importance, if I do not weary your Lordships, to which I venture to direct the attention of noble Lords. Industry is a living thing, constantly changing and, in a dynamic society, constantly growing. We are faced with the deeper challenges and the fascinating uncertainties of the Atomic Age. Industry must be free to adapt itself to these changes and to meet these challenges, if it is to continue to serve the country in the future as it has in the past. Co-operation within a framework of competition and a clear appreciation of the public interest is likely to be the pattern of the future. Agreements to this end should be encouraged and not banned or restricted. Industry, by the construction of Clause 20 as it is framed at the moment, could in the light of changing circumstances find itself placed in a straitjacket.
As the Bill is drafted at present, the instructions upon which industry can base its argument are contained, as we know, in paragraphs (a) to (g) of Clause 20 (1). In addition, there is what I might call the "balance of hardship provision", by which the restriction is to be judged in relation to any detriment which it may have caused to the public or to persons
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not parties to the agreement. It seems to me that these instructions do not go far enough, and that, in addition to the circumstances set out under paragraphs (a) to (g), industry should be entitled to have taken into account by the Court to what extent the restriction for any other reason operates, or is calculated to operate, substantially to the benefit of the public. This would seem to me to be a perfectly justiciable issue—and I am so advised by learned counsel—in that, if it can be shown that any restrictive agreement provides a benefit to the public or to persons not parties to the agreement, that is surely a most relevant consideration for the Court to take into account.
In framing legislation of this kind, we may well miss our objective and lose sight of our central purpose by indulging in excessive refinements. British industry has served this country well throughout the crises of this century, comprising two world wars and phases of acute economic difficulty which have confronted every Party Government in turn. Great difficulties still confront us, which will be solved only by a rare effort of will and sacrifice and a large measure of national unity. I suggest that Parliament and the country would be well advised to place their trust in those who have served them well, and I suggest that we remember, as I have endeavoured to point out earlier, that it is the facts of life to which I have referred, the simple compulsions of existence, that constitute the real urge to efficiency in industry, the real sanction against slackness and anti-social activity, and not (I repeat, not) Acts of Parliament and the most ingenious devices of the Legislature.
5.1 p.m.
LORD GRIDLEY: My Lords, in venturing to address you to-day I am conscious of the diffidence which possessed me when I made my maiden speech in the House of Commons some twenty years ago, which diffidence possesses me with greater strength to-day, because I have always understood that the standard of speeches made by your Lordships in this House is at least as high as, if not higher than, those made in any other assembly. But I am sure that I can rely upon the generosity of your Lordships if, in what I now have to say, I fall far below the standards which you yourselves and your predecessors have set.

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My Lords, my reason for venturing to address you to-day is that for between fifty and sixty years I have been actively engaged in industry, and in particular in the electrical and mechanical manufacturing branch of industry. I have lived through good times, not so good times, and extremely bad times. I have seen four million people, employees in this country, "on the dole," and I do not want us again to be faced with anything approaching that situation. I am a little fearful, for some of the reasons which have been given by the noble Lord, Lord Baillieu, who preceded me, that the effects of this measure, unless wisely and common-sensibly implemented, may affect seriously and adversely the engineering industries of this country, which, after all, play a foremost part in our export trade.
I, as too, will many of your Lordships, painfully remember the period which we in industry went through in the years between the two world wars. As a result of that experience, many employers in industries which were in a critical condition felt it absolutely essential that they should endeavour to get together to see what could be done to rescue the country from its dilemma and save many firms from the bankruptcy which then threatened them. From those discussions arose many of the associations and trade agreements which are the subject of so much criticism at the present time. I can only say, from my own experience, that, in general, the effect of those arrangements has been good rather than bad, so far as the national interest and the interests of customers are concerned.
I well remember—it seems an extraordinary thing to have to refer to to-day —that during the slump which I have mentioned, when we had paid off a great many employees and were threatened with the necessity for discharging more hands, an opportunity arose for my then company to secure a large contract amounting to something in the region of six figures in one of the South American countries. The sales representative out there wrote home to say that competition was so fierce that unless we were prepared to reduce our price by many thousands of pounds, the order would be placed in another country. Well, we felt in the interests of our employees, whom we would rather see working than "on the
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dole", that we must go to them and explain the position quite clearly and plainly. What we said to them was this: "Within two or three months we may not have work for you, and you may be out for a considerable time. Now here is an opportunity to secure an overseas contract if, but only if, you are prepared to accept a percentage cut in your wages while work on this contract is being carried out. If you will do that, we on our part will cut a substantial proportion off our overhead charges which are included in our costs." Employees were sensible in those times and, without any hesitation, they agreed. The result was that we got this overseas contract which we would never have got in any other way than with the co-operation of management and employees.
On the question of prices in the industry with which I am associated, I do not think it can be argued for one moment that there has been anything detrimental to the national interest, especially when it is an undoubted fact that while a good many firms of the type to which I have referred did enter into a co-operative arrangement together, there were almost as many outside to whom customers could go—they were not members of the Association and they were perfectly free to quote what price they liked. Therefore, the price arrangement was not free from competition, and there were many cases in which one found oneself under-quoted by those who were desperately anxious to get a contract, especially at a time of trade recession. One thing that is not always sufficiently borne in mind is, I think, that more often than not it is better to pay a higher price for an article which is robust, durable and lasting, than to pay a lower price for an article inferior in those respects.
One thing that in my industry we can never forget is that electricity is really a lethal weapon. Wherever it is used, either industrially or in domestic circumstances, the most careful precautions have to be taken. The material you use, the quality of insulation that is part of the machine, and the wiring of houses—all that has to be of the highest quality in order that those who work and those who live in their homes can feel that they are entirely free from all accidents with this invaluable adjunct to our comfort and well being. I believe it can

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be claimed, certainly in the last twenty years during which price agreement has been opera live, that the most amazing progress has been made in the science, technical knowledge and practice in the electrical industry—progress that would never have been possible without the cooperation to which I have referred. That being so, I venture to claim that the arrangements under which our business has been carried on cannot be said to have been against the national interest, but for it.
Now to-day we have the birth of two new industries, electronics and nuclear power, the vast potentialities of which have yet to be explored. Those new industries, like another which had very small beginnings—the radio industry—are going to be to a very large extent in partnership with the electrical industry. We must therefore be extremely careful not to do anything to impair the value of the co-operative methods which hitherto we have thought it wise to carry on, because unless we make progress in development, technical advances and production of products of the highest materials, we shall fall behind our competitors. That we must on no account do, because in the industries to which I have referred there are wide opportunities for increasing our exports and there Is now in our hands a chance whose loss we shall bitterly rue unless we grasp it with both hands; for there is no doubt at all that in each quarter we are feeling the increasing competition of other countries.
There is one thing which none of us should ever forget: in every home, great or small, it is industry which supports us all. Therefore we should be extremely careful to do nothing in this Bill which is likely to hamper our progress in the future. For that reason I hope it may be possible, even though it may be difficult, to find some method to secure that some provision is made in this Bill, before it finally reaches the Statute Book, to provide for a revision of its terms and conditions should economic circumstances worsen and a considerable amount of unemployment unfortunately and unhappily arise. It would then become an urgent matter to re-examine whether some of the restrictions that have been imposed by the courts could not be released and industry allowed to resume
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their arrangements to the benefit of their employees and in the national interest. My Lords, it only remains for me to thank your Lordships for the courtesy and patience with which you have listened to me. It may be that I shall in future take the advice of a former Speaker in another place who used to say:
"Rather make Members wonder why you do not speak than wonder why you do."
5.16 p.m.
LORD SALTOUN: My Lords, if I were to attempt to offer the ordinary words of congratulation to a speaker so greatly and so long experienced in public affairs and in public speaking as the noble Lord who has just sat down, I should feel that perhaps I was guilty of some little presumption. What I can truly do is to express or. behalf of every noble Lord in the House, wherever he sits, our rejoicing that the noble Lord, Lord Gridley, has seen fit to break his long silence and enrich our debate this afternoon, and to express the hope that, now that he has done so, he will not follow his own advice but will contribute his wisdom to our discussions frequently in the future.
Those in industry who asked me to speak on this matter to-day told me that, for their part, they did not in the least oppose the Bill: they were quite prepared to welcome it and to do their level best to see that it worked. I submit that, if that is so, a complicated and, in some ways, rather nebulous measure such as this requires the wholehearted co-operation of industry to make it work. It will therefore be wise of Her Majesty's Government to consider very carefully such suggestions as are put forward for their consideration. I will put forward one suggestion immediately: I very much hope that Her Majesty's Government will consider carefully the date on which this Bill is to be brought into operation. There is so much work to be done before the Bill can be set on its legs and the machine put into working order that to bring it into operation too hastily after it is passed would be a mistake. After all, in a measure of this kind the most important thing is to get the co-operation of the best people. If one does not get the co-operation of the best people then the worst people will

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very readily find a way of making the Act work for them.
The second observation I wish to make on the Bill is to ask a question. So far as I can understand the Bill, the only condition that "runs with the goods" is the price. Have Her Majesty's Government considered that aspect (though I am sure they have); if so, what is their reason for not allowing other conditions to run with the price? I will rive a case which is known to us all. The motor manufacturing industry often makes conditions that dealers should pay a certain standard of wages, maintain certain necessary equipment and have a staff of a certain degree of competence. All these conditions are for the interest of the public, and I am told that questions of this kind are raised in the trade courts just as frequently as, if not more frequently than, questions of price fixing, so it seems to me that the public interest would be served by letting this condition run with the goods.
LORD LUCAS OF CHILWORTH: Did I understand the noble Lord to suggest that the trade courts, which will be outlawed under the collective price maintenance clause of this Bill, to-day seek to exercise any jurisdiction over wages paid to employees or conditions of employment in the motor trade? I can assure the noble Lord that that is entirely wrong. They have no interest whatsoever except in the question: has the price been cut or has it not?
LORD SALTOUN: While I accept that as the noble Lord's opinion, I have to say that my instructions differ. There is a difference between us. We cannot resolve it here; it is for Her Majesty's Government to resolve it.
The last point I have to make is one which seems to me rather important in connection with what the noble Lord, Lord Lucas of Chilworth, has just referred to—that is, price fixing. Hitherto, both suppliers and dealers have protected their price agreements by means of the stop lists and their trade associations. The right to do this is taken away by this Bill—it is taken away both from suppliers and from dealers. But suppliers have been given a quid pro quo, because, as the term is, the "condition runs with the goods," and they are given a remedy in the courts against
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retailers who, having acquired a supply with notice of price conditions, take part in resale transactions which do not carry out those conditions. That puts all their goods on a level with other goods that are patented and can be so treated.
Retailers, on the other hand, though they may be far more injured by price-cutting than the suppliers—because, after all, the supplier is selling his goods, even if the retailer cuts his price—are given no compensation of any kind, save appeal to their own supplier in whom alone the right of action rests. The supplier thus appealed to may not be at all willing to take action, especially if the aggrieved retailer is a small concern and it is a big concern that is cutting the price. The supplier will not want to take action against one of his most important customers, however flagrant the breach may be. And he may even be selling through a subordinate of his own. In any case, the effect of this denial to the retailer of his right of action seems to me to put the small man in a very invidious position, because he may well be extinguished altogether by the price-cutting of his larger and more successful rival. It seems to me that that is a point which might well be considered by Her Majesty's Government, and I hope that it will be considered before the next stage of the Bill is reached.
5.24 p.m.
LORD MESTON: My Lords, this is an important Bill, but I doubt very much if it will achieve every purpose for which it has been designed. Having made that disparaging remark, may I say that I hope your Lordships will have no hestitation in giving the Bill a Second Reading and, ultimately, putting it on the Statute Book. Even if the Bill does not achieve every object for which it is designed, it may have in general a very good effect. I believe that in Sweden, in 1946, there was introduced a comprehensive system for the registration of restrictive agreements and that it had a most useful effect. Within a few years, the result of publicity was that a considerable number of objectionable agreements were cancelled and others were considerably modified. I should not be at all surprised if the same thing happened in this country shortly after this Bill became law. In this connection I am reminded of an Act of Parliament which is within the minds of all

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of us—namely, the Landlord and Tenant Act, 1927. That Act was well-intentioned but, for reasons which I need not mention now, it was somewhat ineffective in practice. Nevertheless, it has remained and still remains what one might call a legitimate vehicle for illegitimate pressure. I have the feeling that this Bill may have the same effect, and that one may be able to wave it in front of people and tell them what may happen if they do not mend their ways.
As to the Bill itself, it is not usual to comment in any detail upon what has happened in another place, but I have been watching this Bill from the very beginning, and I think your Lordships will agree with me that it has already received a very close analytical examination. So I doubt whether there is very much that your Lordships will wish to do to alter the Bill in your Lordships' House. However, there are a few general comments I should like to make on the Bill. First of all, as to the Restrictive Trade Practices Court. I do not wish to indulge in flattery, but in my view the composition of this Court is excellent. It is to consist partly of High Court Judges and partly of laymen experienced in industry, I cannot imagine a more satisfactory type of tribunal. On the other hand, in my view it would be chaotic—and I use that word advisedly—to place these matters before an administrative tribunal. If these matters were to be placed before an administrative tribunal every one of the decisions of that tribunal might subsequently become a subject of discussion in Parliament. Quite apart from any questions of justice or injustice, I am afraid that there would be no finality in ally of these matters at all.
As to the Registrar, I was rather surprised to hear him described as a "superman" and as a "prosecutor". I may he wrong, but I understand that he fulfils neither of these requirements. I believe that he has two duties under the Bill. The first is to enter restrictive agreements in the Register, and the second is to initiate proceedings before the Restrictive Trade Practices Court.
LORD LUCAS OF CHILWORTH: Would the noble Lord forgive me for interrupting? Will not the Registrar have the same function as the Director of Public Prosecutions in another sphere?
LORD MESTON: I am much obliged to the noble Lord for his intervention. I was just going to carry the matter one step further. I speak under correction, and I want to be corrected if I am wrong, but I understand that the Registrar will have absolutely no interest, either personal or professional, in winning the day before the Restrictive Trade Practices Court. His sole object will be to place all the relevant facts and circumstances before the Court and to ask the Court to decide upon the matter which is before them. If I am wrong upon that point, by all means let me be corrected. As to the machinery relating to registration, I think that the Bill deals with this matter in a very competent way.
With regard to restrictive trade practices themselves, it would he a mistake to think that these are all had or introduced from malicious motives. A large number have been introduced from good motives, and, indeed, may serve a useful purpose, including the interests of the consumer himself. However that may be, under the Bill all these agreements are presumed to be contrary to the public interest, and it is for those upholding the restrictions to bring themselves within one of the paragraphs (a) to (e) of Clause 20 (1) of the Bill. There may appear to be a good number of loopholes through which restrictive agreements may pass. At the same time, if you examine paragraphs (a) to (e), I think you will come to the conclusion that they are all fair and justified. I appreciate that one can criticise the Bill, but I am waiting to hear somebody put something better in its place.
As for resale price maintenance, I think that the Bill reflects the better opinion of the country: that is to say, that collective resale price maintenance is bad and individual resale price maintenance is permitted through the usual channel of Her Majesty's Courts. I am exercised on this point: I believe that the enforcement of individual resale price maintenance might become so colossal as virtually to become a monopoly. If it does become a monopoly, it can he dealt with under the Monopolies Act, 1948, but it has to he a very big monopoly before it comes within tie jurisdiction of the Monopolies Commission. Therefore I hope that Her Majesty's Government will look at this again and,

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while maintaining the principle of individual resale price maintenance, see whether or not this might assume such enormous proportions as to become a dangerous monopoly. Subject to these few amiable remarks, I hope that the Bill will rapidly become law.
5.32 p.m.
LORD BARNBY: My Lords, the proposals in this Bill are such as inescapably to cause perplexity in the minds of all those who try to arrive at a conclusion about the Bill. In the discussion in another place a number of controversial speeches were made. But here we are the better off for the painstaking way in which the noble and learned Viscount who sits on the Woolsack has explained to us in detail where we are at the moment when this Bill reaches your Lordships' House. The speeches that have been made to-day suggest that there is almost as much hope for amendment from this side of the House as there is from the Opposition Benches.
Admittedly, the Bill is the outcome of anxiety about alleged abuses. Doubtless there have been abuses with regard to retail prices, which originated, I suppose, in the wholesale trade, and the noise made in seeking out what should be done rose almost to hysteria. It seems to me that in this Bill there are grounds for two very different approaches: first, regarding resale price maintenance; and secondly, regarding agreements among industrial bodies in their own interests. I believe that most of the concern is about the second point.
The Government are fortunate in having in your Lordships' House a mass of opinion with long experience in industry at their command. There are those who think that the President of the Board of Trade, who is in charge of the Bill, and whose eloquence and forcefulness in debate we admire, is perhaps less inclined to take the advice obtainable in industry than he might be. We are glad to think that in this House the noble Lord, Lord Mancroft, who is to deal with the details of the Bill, in addition to his successes at the Bar has had the advantage of a commercial experience which enables him to realise the implications of much about which there is complaint. The speeches made to-day have covered the most important angles of the second of these
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points, the agreements between trades. We have heard two impressive speeches, from the noble Lords, Lord McCorquodale of Newton, and Lord Baillieu. The first speaks with the advantage of a practical commercial experience added to his Parliamentary experience. The noble Lord, Lord Baillieu, in addition to bringing a rich experience of all industrial questions, has the advantage of being a past President of the Federation of British Industries and therefore is in a position to speak with exceptional authority. We are grateful to them for their clarity of expression on the particular points which are worrying industry. I do not think there is any need for me to supplement what they have said, but I hope sincerely that the Government will be prepared to accept an Amendment to Clause 20 of the character suggested by the noble Lord, Lord McCorquodale of Newton, and supported so clearly by the noble Lord, Lord Baillieu.
May I proceed to give a few practical experiences, as one who, like other noble Lords, has been from early boyhood in business, wrestling with the complications and details of industry? I pick on a point made by the noble Lord, Lord Gridley. He rightly asked: what would be the position of industry under the proposals of this Bill as it stands were there to be a repetition of anything like what occurred in the 'thirties? I have vividly in mind the unemployed who, by the end of 1931, formed a high percentage of the insured population. At that time steps were taken to bring about what was called "rationalisation" with the sympathy and assistance of the Government. Action was taken to eliminate redundant plant and to get price agreements, purely for the purpose of helping employment and improving the solvency of industry. The noble Lord, Lord Baillieu, laid stress on that point: that profits must be made in industry if research and the replacement of plant is going to be possible. There are the two spectacular examples of the Shipbuilders Employers' Federation, who have a redundancy scheme, thanks to the unselfishness of Sir James Lithgow, who sacrificed one of the best and newest plants in the country to the cotton industry, which resulted in the setting up of the Lancashire Cotton Corporation with the full complicity, as well as the sympathy, of the Government. Without

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that, where should we have been with regard to employment at that time?
I am going to refer to another point that occurs to one at this time: namely, the emotional urge revealed in the Factories Acts passed in the latter part of the last century and the early part of this century, to correct labour exploitation. Quite rightly, there was concern in the country at the exploitation of female and juvenile labour. What has happened? Excessive curbs were put on industry at that time. Where do we stand to-day as a result? I am glad to see that the noble Lord, Lord Wilmot of Selmeston, has just taken his place; he would no doubt corroborate me if he spoke from the point of view of industry, rather than from his political views. Because of this legislation, industry to-day, in many branches, is hampered in the substitution of the two-shift operation for one. What is the result? We are limping along with antique equipment, because it is not possible to introduce new, up-to-date equipment unless more than one shift is operated. Interest runs twenty-four hours a day, and you cannot work new equipment for only eight hours. The reason why its use is so restricted to-day is the same hysterical, emotional urge arising on humane grounds from alleged, and probably true, abuses that moved people fifty or eighty years ago. I suggest that that is exactly what this Bill proposes. It might pass through this House without the Amendments such as the noble Lord, Lord McCorquodale of Newton, and the noble Lord, Lord Baillieu, have recommended. So it is that one urges with extreme sincerity the hope that these Amendments will be taken into consideration in due course.
I have suggested that we are sometimes carried away by sympathy and emotion, and I am going to say a word about the current prostitution of the word "automation". It is being used as the reason for every kind of redundancy in labour; and because there are these occurrences, the suggestion is that the Government must rush in and take some action. I would respectfully remind the House, as an illustration of this point, that in one industry with which I am familiar, the wool textile industry, within the twelve months of 1951 changes of fashion resulted in the laying off of no fewer
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than 20,000 operatives. Is there to be the hysterical belief that we must rush into legislation to change something that is caused merely by a momentary change in industry? I was horrified at the thought that the right honourable gentleman who ii now in charge of labour should have suggested that industry must take charge of the result of that sort of occurrence. Can any industry suddenly take charge of 20,000 operatives without going to ruin? It must be a national matter, and not one for industry.
I would add one other point. I spent a large part of my early industrial life in the United States, and I saw at close range the handicaps with which in many ways United States industry worked wider certain phases of the Sherman Anti-trust Law, which was legislation emotionally rushed into, designed to correct certain abuses. The net was thrown much too wide, with the resulting inconveniences to trade, and particularly the export trade, of which we are all aware, and which the noble Lord, Lord McCorquodale of Newton, emphasised. So it is that I hope, with sincerity, based purely on experience of a life spent in the United States and in this country in all the problems that arise in industry, that there will be sympathetic consideration given by the Government when these Amendments are moved, incorporating such things as have been referred to to-day.
5.46 p.m.
VISCOUNT FIAILSHAM: My Lords. I feel a great sense of responsibility as, I believe, the last Back Bench speaker in this debate, which has reached such a high level. I cannot claim the experience of industry and business that has illumined almost every one of the speeches of noble Lords who have taken part in the debate so far, other than, perhaps, the Lord Chancellor, who suffers from a similar handicap to myself. But I think I can claim to be probably the only Member of your Lordships' Eloise who has actually advised professionally on the meaning of some of the more obscure phrases in this Bill, prior to its becoming law; and I think I must be the only Member of either House who has composed a textbook on the subject of the Bill in anticipation of its becoming an Act. I am tempted, therefore, to pass one or two reflections upon its general policy and conception.

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I do not mind confessing that I started with a good deal of prejudice against the Bill. To begin with, like two or three other noble Lords from industry who have already spoken, including my noble friend below me, whose maiden speech we all so much enjoyed, I reached manhood in an age of slump and depression, under the constant reproach of somewhere between 1 million and 2 million unemployed. It was in that period that most of the restrictions that we are discussing arose, whether restrictions on the part of industry or business, or restrictions on the part of trade unions. I am not so clear in my own mind—I was not, at any rate, to begin with—that those restrictions were as evil in a time of slump as, manifestly, they are in a time of boom. I confess that I still have some mental reservations as to whether this legislation, or any other legislation designed with a similar effect, will withstand a long period of slump. I certainly hope that it will never be put to that test, because I think one of the happiest features of the political life of our country since I can remember taking an active interest in it has been the disappearance of the constant threat of unemployment which used to overspread Parliamentary debates year after year in the years before the war. But I doubt whether legislation which is clearly a product of a period of boom would, in fact, stand the test of a period of slump and I doubt whether it ought to. However, let us hope that it is never put to the test.
Secondly, I do not share a general prejudice against business simply when it is big. I have never been able to understand that prejudice. My own view is very much that of Mr. Lilienthal, with all his experience of the Tennessee Valley Authority and the Atomic Energy Commission in the United States, when he said, in a recent book:
"As a further consequence of this refusal to give honest recognition to the actual benefits of Big Business—to the individual and to the country—under the new conditions of today, the basic governmental business policies and the everyday enforcement of the antitrust laws"—
he was, of course, referring to the Sherman Act of the United States, and not to any legislation here—
"are still based largely upon prejudice created by abuses long since corrected, upon an anti-
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quarian's portrait of another America, not the America of the mid-twentieth century. The legal antagonism to size as such causes a profligate waste and distraction of the energies of management and technical talent of business. It substitutes, in business councils, the supercaution, not to say timidity, of the lawyer for the enterprise and boldness of a business manager and technical expert. It bogs down the Federal courts with endless and unmanageable litigation to the detriment of all other litigants. Because much of our public policy towards Big Business and its expression in interminable anti-trust lawsuits and Congressional investigations is so obviously fruitless and barren, it thereby undermines respect for Government among conscientious citizens."
That was written after over fifty years of experience of the Sherman Act in the United States.
I am happy to think that the legislation now proposed here avoids many of the difficulties created by the anti-trust legislation of the United States, and that we may be said to have profited by experience. But I think we should be cautious in attacking business simply because it is big, and in attacking agreements between businessmen when they are small in order to get some of the advantages to themselves which would normally enure only for the advantage of those who operate large concerns.
Having said that, I have been driven to the conclusion, despite my natural prejudice, that this Bill does provide a viable, imaginative and adequate set of proposals. There were a number of different and difficult choices—rather more complicated choices than the noble Lord, Lord Lucas of Chilworth, seemed to imagine—before the Government when they began to legislate. Of course, there is the possibility of an administrative solution. There is the weapon of complete prohibition, with or without criminal sanctions. There is the system of registration with or without judicial investigation. I think that not enough has been made of the fact that, by and large, the Government have selected as their policy a judicious admixture of all the solutions. The administrative solution, contrary to what was suggested by the noble Lord, Lord Lucas of Chilworth—although I think the suggestion was unintentional—is not altogether ignored by the Government in their policy. The administrative solution exists in the Monopolies Commission, and the Monopolies Commission, although limited in its functions, still continues under the terms proposed in the present Bill.

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For instance, if I may say so again, in respect to one of the arguments advanced by the noble Lord, Lord Lucas of Chilworth, the Monopolies Commission will continue to investigate where monopoly conditions under Sections 3, 4 and 5 of the Act of 1948 apply—sole agency agreements which do not come within the proper terms of the present Bill. It will also investigate individual price maintenance where monopoly conditions prevail in such a way that a certain business is able to build up a single firm monopoly within the extended meaning of the provisions of the 1948 legislation. Therefore, the administrative solution is given a place in the Government's policy. For reasons which I will advance, I am glad that it is not given a bigger place, but it has been given a place. I hope that the Monopolies Commissicn—to whose work I wish to pay my own tribute—will continue to play a real part in the scheme proposed by the Government.
Secondly, the weapon of absolute prohibition has been given a place in the Government's scheme. Again I am glad that it has not been given a bigger place, but it has been given a place in the absolute prohibition of certain methods of collective resale price maintenance. I would say, in passing, that collective resale price maintenance, as such, is not prohibited, although Clause 23 prohibits the stop list, the collective boycott, the imposition of a penalty, the domestic court and similar methods of enforcement. A direct agreement would, I think, be only within Part I of the Act and not within Part II—though in that I may be wrong. That being so, the Government have, quite correctly, in my belief, imposed the limited absolute prohibition. But they have not gone further, and they have also been correct in abstaining from direct criminal sanctions. The prohibition is enforced by an injunction at the suit of the Crown, and possibly by an action for damages for breach of statutory duty at the suit of a fellow subject. Those, it seems to me, are adequate and reasonable penalties for what is, after all, not a criminal offence and should not be made one.
Lastly, the Government have, as the main plank, in reference to restrictive practices but not in relation to monopoly, adopted the method first of registration and then of judicial investigation. Here I must part company from the noble
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Lord, Lord Lucas of Chilworth. I know that I am prejudiced. Not only am I a lawyer and the son of a lawyer, but there has been a member of my family in the legal profession ever since my great grandfather joined the Calcutta Bar in about 1812. I am proud of my own profession and my forbears in this matter. I know that we have our defects, and I know that we are not popular, but we have certain prejudices which are not altogether contrary to the public interest in this matter. In protecting the rights of the citizen it is judicial investigation alone which is a guarantee of justice. We saw an example of that only the other day when bureaucracy ran mad in relation to personal liberties. The open and public discussion of justiciable issues is the only way, or one of the essential methods, of protecting private liberty in this country. In this particular field of legislation, there can be no doubt at all that we arc invading a whole new department of private liberties of contract. Therefore for that reason, I should have regarded judicial investigation as absolutely essential.
LORD LUCAS OF CHILWORTH: I am sure all your Lordships are grateful for the learned dissertation which the noble and learned Viscount has given us, because a great many of us have not thought our last thoughts on this matter. Would the noble Viscount tell us, if he is in favour of a judicial tribunal, why he supports, or whether he would support, the proposals for two lay judges? I cannot think of any other name for these people, because they are not assessors. Why not a wholly judicial Court? Why bring in laymen who can override a judicial member of the Court on questions of fact?
VISCOUNT HAILSHAM: I think the answer will appear shortly from what I have to say, because this is a special kind of justiciable: issue. The essential features of a judicial tribunal appear to me to be these: first of all, that there should be public discussion; secondly, that there should be reasons given for every judgment; and, thirdly, that there should be objective criteria of what is or is not possible under the Act, as it will be. It is the trained advocate, as well as the trained lawyer, who has an essential part in an effective judicial system. People are not always articulate in this world

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when their rights are attacked. Those of us who have served in the capacity of an advocate know only too well that our duty is not so much, often enough, to put forward bad arguments to support a wrong conclusion, but to bring out of one's own client the inarticulate things which, if he had been properly trained and were emotionally detached from the issue, he would be only too glad to say for himself. That is what British justice means.
It is true, of course, that lawyers do not always make good judges of fact—I confess it with shame, but it is true. In one sphere of the law we have a number of lay members of tribunals. Has the noble Lord, Lord Lucas of Chilworth, not heard of a jury? They are there for the precise reason that lay members of a tribunal are often necessary in this country to explore questions of fact about which the trained lawyer may not be the best possible tribunal. They are presided over by a lawyer. They would undoubtedly be unsuitable members for the present kind of tribunal. This is a novel kind of tribunal, but I think we must not be above experimenting in judicial matters when we are exploring new judicial principles, so long as we do not abandon the essentials of justice; and that is exactly what it appears to me that these proposals do not do.
They provide, in my judgment at least, a method whereby those whose rights, or what have hitherto been their rights, are being invaded can be sure of having their case dispassionately argued. I certainly hope that the Government will stick to their judicial solution of these problems. I do not think it will take long to solve the problems which the Court has to solve. I do not think it will take as long as would an administrative tribunal. Once industry begins to know what is and what is not permissible, it will not have to go to Court and bring the agreements to an end, if similar agreements have been decided against by the tribunal or if they are advised by competent counsel that the agreements would require registration.
I do not think, therefore, that one could possibly say in advance that the judicial solution is an unsuitable one. I will say, with great regret and sympathy, to some of my noble friends in industry that I am rather afraid that the price they will have to pay for a judicial solution is that they
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must accept the burden of proof. I believe that is, in fact, the price which should be exacted of them. It is not one which I personally like to exact, but I think it is one without which the whole judicial machine might prove, in practice, unworkable. One stresses the proposition that, in order to submit something to a court of law there must be a justiciable issue: that is to say, there must be some objective criteria which can form the subject of a judicial direction as to what the tribunal of fact has to decide.
The noble Lord, Lord Baillieu, in his eloquent and admirable speech, suggested amendments which would entitle the Court not to decide against an agreement which it considered not to be against the public interest. But it would be to deprive the Court of its objective criteria if an exception were made which allowed the Court to make this decision entirely for itself. Different people may have different conceptions of what the public interest may be. At different times the public interest may differ, and lawyers on the whole tend to be guided by precedent. So what was in the public interest in 1931 is certainly not in the public interest in 1956. Therefore I think it is right that the Government should have laid down a series of exceptions within which the agreement must come in order that it may acquire immunity from condemnation under Clause 20 of the Bill. On the whole, that seems to me to be reasonable. There is a great precedent for it.
LORD BARNBY: What was obviously to the interest of the workers, in the way of employment, in 1931, would necessarily be against their interest to-day, if I correctly understood the noble Viscount.
VISCOUNT HAILSHAM: I do not think it necessarily would, but I think different criteria would apply. At present, the public interest demands the greatest possible expansion of exports and production to reduce prices. In 1931 the great need was to protect employment so far as possible in a world of decreasing prices and deflation. Although I cannot claim the noble Lord's experience, I should have thought that the kind of agreement which imposed restrictions in 1931 in the interests of employment was not necessarily the best kind of agreement in 1956 to boost exports. However, that is something in which I fear I am rather exceeding my own individual knowledge.

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Assuming that one is right in saying that an objective criterion is necessary, it does not seem to be unreasonable to say that an agreement, in order to secure immunity, must establish that it comes within one or two defined exceptions, one of which is, of course, the protection of employment.
I myself feel that any attempt to introduce an Amendment which would leave it open to the court to decide without an objective criterion of what is or what is not to the public advantage would ultimately destroy the whole judicial solution upon which the Government have placed their hopes. So, although I should like to see a solution by which industry was eased in this matter, I should be rather surprised if the Government proved particularly malleable in this matter. I feel I have trespassed on your Lordships' time for too long.
A NOBLE LORD: No; please go on.
VISCOUNT HAILSHAM: I should like to say a word by way of tribute, if I am within the Rules of Order—and I think I am—to the Minister who has initiated this legislation. He is an old personal friend of mine. I feel that in many ways he has had a hard road to tread in his period of office in the Government at the present time. He has come in for a great deal of criticism, sometimes unjust. He has, in fact, pursued this particular matter with singular determination and courage. It was he who introduced the amending legislation in 1953 which made the Monopolies Commission an even more effective instrument. It was he who made the Section 15 reference which is really the genesis of this Bill; and it has been he who has devised the ingenious solution which, if legislation is desirable, merits the greatest measure of support in this Bill.
Therefore, I should like to mention this and praise him for his determination and vision in the matter. The test of this Bill in the last resort, or at any rate, in the immediate future, will be its ability to expand the production of this country and to provide a progressive and dynamic industry. If it curbs or inhibits industry in any way, as some noble Lords fear, then the Bill will have failed. I hope and believe that it will not have that effect. With that in mind, I must
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confess that I shall give my wholehearted support to its Second Reading.
6.8 p.m.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, last July I addressed your Lordships at some considerable length, and perhaps, as some may have thought, rather emotionally, upon the main issue as it affects my outlook on this Bill. I had hopes, from the calm and conciliatory kind of answer that the noble and learned Viscount on the Woolsack made on that occasion that we might have got something nearer to what I desired in this particular Bill. However, I understand that, while I was thinking the matter over in my own room, two maiden speeches were delivered in your Lordships' House, and both came from old friends of mine. One was from the noble Lord, Lord Gridley, who was an old colleague in another place and whose connection with a great deal of valuable work for the equipment of the Royal Navy, as well as other State institutions, during the last war will never be forgotten by me. I hope we shall have the advantage of hearing him often in your Lordships' House. The noble Lord, Lord McCorquodale of Newton, was another old friend of mine in another place. One often finds, in Parliamentary life, that we choose people for our unofficial friends in spite of their political views, because we know them to be personally jolly good fellows. I was very glad to hear from my colleagues what a very good maiden speech he made. I hope we shall often have the advantage of listening to his wisdom.
As in last July, so again to-day I must declare an interest in approaching your Lordships on this Bill—not to-day, perhaps, such a direct interest as some of your Lordships have in particular industries. Nevertheless, a very sweet sort of incense remains to me of my long years in connection with the Co-operative movement and its history in fighting for social justice through people co-operating to do things for themselves, rather than letting the State do them for them. That is something which has always been an inspiration to me as well as to many thousands, and now even millions, of others. For the last ninety-odd years we have had to fight in different stages against being put on the stop list, even back in the 'fifties of the nineteenth century;

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and in regard to all kinds of discriminating practices against development, we have at least been successful in bringing the matter to its present stage. The noble Viscount, Lord Hailsham, in his remarkably interesting speech just now, seemed to think that this legislation stemmed from a period of boom, and he seemed to be wondering whether it would be able to stand up in periods of slump. He will perhaps bear with me if I say that this Bill has at least come near the Statute Book, certainly bringing some amendments to the law and benefit to the general community—I can concede that at once—but it is almost the first major measure of its kind in the whole of those ninety years of struggle by the Co-operative Movement.
If I may say so, the Co-operative Movement, which was based on the early resolutions and ideas of the Rochdale pioneers, under which it must accept into its membership any member of the community, whatever his race, creed, political views or anything else, would probably have been as neutral in the political world as, largely, it was in its inception, if it had not been for organised opposition in discriminatory and restrictive practices which steadily developed and came to a head in the course of the First World War. The Co-operative Movement, then in its neutral position, fought solidly for three years against open discrimination, not interfered with by the Coalition Government, because the allegations of injustices that were being levelled against the Co-operative Movement seemed to fall upon deaf ears. It was only then that a great Liberal director of the Co-operative Wholesale Society, the late Sir Thomas Allen. took the step of calling a special congress in Swansea, saying that if they could not get justice from the Government their only remaining right was to appeal to Cœsar—that is, to the people. Since then, because we have had to engage in political action, we have sometimes had the finger of scorn pointed at us by people who agree with the views often expressed from the opposite Benches.
The Bill which we are now discussing has emerged only because of the decision of the Labour Government to pass the original Act, I think in 1948, under which the Monopolies Commission was set up. The Commission have reported on a
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number of individual matters, but I think there are about sixteen matters still to be dealt with; and apparently, under this Bill, most of them will be wiped out by the emasculation of the Commission. In their Report which was published last year, the Commission made it clear that the majority view was distinctly against these restrictive and discriminatory practices.
It is a pity to have to make long quotations, but may I make just one or two short ones from the Commission's General Conclusions? I take first of all a few lines from paragraph 240, where they say:
"We have considered whether there may be circumstances in which our conclusion that the practices with which our reference is concerned are generally against the public interest may not hold good. We have not in the course of our inquiry come across any instances in which we were greatly satisfied that such practices were beneficial."
When I listened just now to the interruption by the noble Lord, Lord Barnby, that passage was very much in my mind.
Then, if one looks at paragraph 246 of the same General Conclusions, one sees this comment:
"We believe it follows logically from the conclusion that these practices operate generally against the public interest that they should be generally prohibited."
I was glad to hear of the clear dividing up of the action of the Government by the noble Viscount, Lord Hailsham, showing what is the limitation in the Bill upon complete banning. The Commission go on to say:
"They exist in a large number of trades and, once it is accepted that they are generally harmful to the public interest, it is wrong that they should be permitted to continue because upon examination a few exceptional cases may he found in which they are on balance advantageous."
So, clearly, it was in the minds of the Commission that the general practice of restriction in trade justified them in proposing a general ban and leaving to those engaged in such practices the onus of proving that their particular practice was not disadvantageous to the public interest.
Turning to paragraph 247, we find that the Commission say:
"A general prohibition would give industry clear and unequivocal guidance as to the Government's policy, and would avoid the uncertainty and waste involved in detailed inquiries in each individual case. It would be much more effective than placing any reliance

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on the voluntary abrogation of harmful agreements which might result from publicity following the registration of agreements."
The Government, in their wisdom, have decided dead against that Majority Report of the Monopolies Commission. Nothing done under the original Act is likely to be implemented by anything in the present Bill. The general objective stated by the Labour Government in 1951 was that if there was to be price-fixing it must be the maximum price in the interests of the community and must not be a restriction on the trading community from passing on to their various customers or, in the case of co-operative societies, their members, any advantages in surplus profit which might accrue from modern development, economy and saving in their administration. So far as I can see, there is nothing in this Bill which does anything to make progress towards that most desirable objective.
Instead, there is to be a partial ban—it is an important ban, which I welcome—upon many of the most harmful collective trade agreements which have operated against the public welfare in the past. But whether that ban will be effective in each of those particular practices, we shall have to wait and see, because the fact that the other part of the Government's policy is to allow practices which have already been proved to be to the detriment of the general community to continue, and that it will give individual industrialists or merchants, as the case may be, power to go to a special court to implement their restrictions against the public, raises a query in my mind.
As a layman, I should be delighted to hear from the noble Viscount, Lord Hail-sham, or from the noble and learned Viscount who sits upon the Woolsack, or the Minister who is to reply, whether it will be watertight; whether the ban on collective agreements under the Bill will prevent constituents of trade associations or general amalgamations (perhaps one large amalgamation with vertical control at the top but a whole series of different subsidiaries) from making a separate case for price enforcement on a particular commodity. Many of us with long experience of handling such cases on an individual commodity basis see nothing to prevent that from being done unless we can get inserted in the Bill the kind of general statutory safeguard which
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was so roundly disposed of by the President of the Board of Trade in another place.
As to the effect upon co-operative societies, I would say, first of all, that they have met it with very gloomy views for the future. With nearly 3,000 delegates at their annual conference this year, they have condemned Her Majesty's Government for their action and are getting their societies all over the country to do their best to work against the implementation of this Bill. I believe they will not be without effect in the future formation of political views on questions of this kind. We have already had something to do with bringing the matter to its present state and we shall hope to do more. At a time when Her Majesty's Government are faced with such enormous economic problems, not the least of which is their fight against mounting inflation, with its development of the constant spiral in prices and the high cost of living, I am Personally concerned as to why Her Majesty's Government should seek to put any brake whatsoever on anything which can result in bringing efficiency in industry and in distribution, to the benefit of the consumer, with a consequent effect on the ultimate cost of living index and as a check against inflation. As soon as prices go up, one must expect that there will be a general communal demand for increased wages to meet the higher prices.
I suppose that the fact that Her Majesty's Government are still concerned about the general economic position is evidenced by the personal appeals which the Prime Minister has been making to different sections of industry in. this country. It looks as if in one or two limited quarters, notably in the nationalised industries, some attempt to peg prices is already being made. If Her Majesty's Government want to be really effective in the long run, their objective must be to improve at all hazards the position of the consumer. That is the real point, and I was very glad that my noble friend Lord Lucas of Chilworth emphasised it in making his opening speech from our side this afternoon. Instead of the feeling that that is the Government's objective being fixed in the mind of 11½ million co-operators in the country to-day, they are feeling exceedingly upset about the failure to imple-

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ment the promise which has been supported by the succession of events mentioned by the noble and learned Viscount on the Woolsack in his opening speech to-day: first, the action by the Coalition Government for war purposes in 1944; the Act of 1948; the appointment of the Monopolies Commission, and the follow-up in 1953 by the expansion of that Commission—the one you are now going to emasculate—by increasing its numbers. That was done by this Government in 1953 when the Commission were given greater powers to go on with their inquiries. But that has not been achieved and we have to regale co-operative consumers and many other consumers also with this procession of events.
Co-operators are people combining together for self help, an objective which the Party opposite has always so applauded. In 1932 I had to conduct the fight against the proposals of the Government before the Norman Raeburn Committee on Income Tax, and I should like to remind your Lordships that what was then decided, and inflicted, was a considerable blow against the progress of the Co-operative Movement and is not always in accordance with the views expressed, for example, by the Special Commissioners of Inland Revenue. I have a great interest in football clubs, more particularly as National Patron of the Football Supporters' Clubs. There was recently a prosecution by the Inland Revenue authorities for tax upon money raised by a football supporters' club for the benefit of the members of, I believe, the Colchester Football Club. What did the Special Commissioners say after learned counsel for the Inland Revenue had been heard and some learned brother of the noble Viscount, Lord Hailsham, had replied for the other side? That this was a club and that they did not exist for profit; they existed in order to cooperate in an effort for a general community purpose. So the Inland Revenue lost their case, to the great joy of a very large number of football supporters' clubs in this country.
Yet that is a principle, upheld by the Special Commissioners of Inland Revenue, which was, in part at least, denied by the Norman Raeburn Committee against the interests of the cooperative societies, who exist not to make
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a profit to be passed on to individuals but as a great mutual organisation to secure the lowest possible cost of living by their collective action. I would say to the noble Viscount, Lord Hailsham, that I too have for a great many years made a study of the growth of big business in the United States as well as in this country, and have very often argued from some of the dicta of great professors like Taussig as to what does or does not constitute a monopoly. I would probably agree with quite a part, but not all, of what the noble Viscount said this afternoon. There is no great sin in having a big business. The point is what is done with the great savings which result from a big business. Whether a combination is vertical or horizontal very often affects this question. In a combination which secures all the economies that come from wide and collective buying and a large distribution organisation, this question whether it is for the benefit of the whole community or not depends, at least in degree, on how that combination distributes not merely its goods but such surplus profits as it may make as a result of its collective economy.
Most of these trusts and combines took their lessons from the Co-operative Wholesale Society in the distribution of collective economies. But then they come within the dictum of Professor Taussig, for he says that a trust or combine becomes a monopoly when all these benefits are enhanced and held for the limited number of shareholders in the company system, and not distributed to the general community but used as the basis of large fortunes made on the Stock Exchange. The Co-operative Movement do not have to go to the Stock Exchange for capital it comes out of the savings of the members, as the result of their collective, mutual action—and from almost no other source. There you have big business operating in the interest of the masses, with no ban upon any single member of the community. Any individual can come into the organisation on the ground floor and without premium. And that is the kind of organisation for which we do not seem to be able to get any real sympathy from the Conservative Party. We get it occasionally from noble Lords, such as the noble Viscount, Lord Bledisloe, who has advocated the development of agricultural co-operation which, as he suggests, could

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do a great deal towards bringing to an end the need for heavy Government subsidies.
I do not suppose that the people who have had the duty of considering this Bill have ever considered that matter. Millions of pounds have been distributed by agricultural co-operative societies as the result of their mutual operation together and their getting bonuses back on their business untaxed. That is a very great advantage indeed. But what is to prevent any individual producer or distributor of agricultural machinery from laying down a discrimination now, from coming to this new Court and saying: "I want the power to enforce this"? What sort of action is this Government taking towards dealing with these problems? While it is helping to a certain extent with this limited legislation affecting collective agreements, it is exposing the public to the risk of fresh litigation instituted by means of individual approaches to enforce agreements in a Court against whose decisions there is no appeal except on points of law. Questions as to facts or merits, questions as to whether a matter has been properly argued and adjudicated upon in these special courts, will not be accepted as a basis for an appeal. There must be a point of law.
VISCOLTNT HAILSHAM: I think the noble Viscount is rather overlooking the fact that the Restrictive Practices Court has nothing whatever to do with Part II of the Act. The public are not parties to the litigation in the Restrictive Practices Court except in the rather limited sense that the Registrar is.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: All I have to say is that I read the speeches of the Ministers supporting the Bill in another place, and if the noble Viscount, Lord Hailsham, reads what I have said, I think he will not consider that I have used any wrong words or put any words in the wrong place. I think he will find that I have not gone away from what Ministers said in answers which they made to Amendments moved across the Floor in another place.
Unless my experiences in dealing with trade questions of this sort are going to be very different in the future from what they have been over a number of years in the past—
VISCOUNT HAILSHAM: They are.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: All I can say is that I am not encouraged by the general trend shown by the Conservatives in the matter of their treatment of the Co-operative Movement in this, country. I have already referred to the Raeburn Committee of 1932, and I would recall also what we have seen in the case of a Copyright Bill. The Government seized on a legal judgment of the High Court, given years after the principal Act had been passed. They found only a little hole in the wording of the Statute, about which the gramophone companies had never complained, but since then an unjust royalty, in my view, has been paid to gramophone record producers. What did this Government do? Instead of amending the original Act, they stuck that judgment into a new Act, and made this unjust practice permanent.
Consider also what is now happening about taxation. The Government have done something that I think is admirable in agreeing that the first £600 invested in the Post Office and certain trustee security banks shall be exempt from income tax. But that does not apply to the co-operative society, the greatest working-class thrift organisation of its kind in the country, an organisation which not only uses its thrift for the development of its business, but holds in the interests of its eleven and a half million members, tens of millions of pounds' worth of Government securities. And what the Government are doing is to switch from the co-operative circle to the other circle a certain class of saving. It will not add to the national saving. As was pointed out in the Midland Bank Quarterly Review a few weeks ago, that is the kind of difficulty that building societies and others are up against.
Coming back to this Bill, we see the almost cavalier fashion in which the interests of eleven and a half million of our fellow-citizens were dealtwith in the earlier stages of this Bill in another place. What sort of view of the Conservative Government do you expect the people to take? Is a restrictive practice against eleven and a half million people to go forward? It is certainly against the public interest that it should. According to the President of the Board of Trade—if I have read correctly what he said in answering an

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Amendment which was moved to Clause 20—he was not concerned in legislation for or against the co-operative societies; the Bill, he said, must take its course. So we find him much less sympathetic to the Bill than Lord Hailsham, who certainly put his forensic study of the document very strongly and in a way which brought certain aspects of it before us most clearly. We were most grateful to him and I shall look at the Bill, in the light of what he has said, even more carefully than I have already done. One thing that struck me very forcibly was the skill with which he presented to your Lordships the complete necessity for having objective criteria in putting the Bill into operation. What are the objective criteria required, and who produces them? I should like an answer to that. Who produces the objective criteria?
I say again, as I have said before, that the present Government are dealing with this subject as they have dealt with so many other matters: they are dealing with a very great and urgent subject as if they were not quite sure of themselves, and not sure what section of the community they could best please. What they are doing is handing over the job of Parliament (whose job it is to decide what is or is not in the public interest, for Parliament represents the people) to a tribunal, a tribunal of one learned judge and two ordinary laymen, who are to give a judgment which must be final as regards fact, for there will be no appeal on fact, or anything else except points of law.
VISCOUNT HAILSHAM: The noble Viscount said that he wanted an answer, and I hope that he will not mind if I try to give him one. What he has said is such a travesty of what the Bill contains that I feel that I cannot keep silent. The objective criteria are laid down in paragraphs (a) to (g) of Clause 20 (1). What the Court has to decide is whether any particular agreement on the evidence comes within those criteria. There is another objective criterion in Clause 20 (1) which the Court has equally to apply to particular agreements and which Parliament has laid down must be applied.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: I understand the noble Viscount. He says that all the circumstances vary so much. But when the
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Government had a choice why did they not accept the Majority Report of the Royal Commission? They had the chance of accepting the Report of the majority of the Royal Commission that laid down that these practices were contrary to the public interest, though it said that there might be a few cases in which exceptions could be made, and that the best way to deal with the matter was to ban them. We are now going to have a great many short sentences of legal jargon put into a clause, or into the Schedule of the Bill, which the noble and learned Viscount will regard as objective criteria. We are going to have in this Court day after day, and week after week, a whole series of cases, some large, some small, some important, some indifferent; and as successive cases come before it this tribunal will build up a new series of legal rulings by reference which many citizens will not understand at all. I think it is a very "poor show". The noble and learned Viscount who sits on the Woolsack said that he himself had carefully examined the position and that he was satisfied regarding the course which had been taken—I am not using his exact words, but I hope I am not misinterpreting him. I am sorry that he has come to that conclusion, because he, or his successor, is going to be an important functionary in this matter. He is going to have the duty of recommending the Judge, who will be the central legal figure in the Court; and I suppose that, with his ministerial colleagues, he will also be responsible for the appointment of the laymen to serve upon it. I feel quite sure that this Bill will not work well.
In conclusion, I would say this to the Government: I feel most strongly that you can never have something like this, which is done against the co-operative societies, without ultimately having your chickens coming home to roost. You may find the effects of this policy in the actual economic results; you may find the effects of this policy in different political views; and you may find the effects of this policy perhaps in a more unreasonable attitude in regard to legislation in the future. I pray the Government now to reconsider this matter before we come to the Committee and Report stages of the Bill. I do not think that there is any thing very wrong about changing one's mind upon what is going to be

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effective in defending the common people —it would not be the first time. In the past the Tories have been productive perhaps of more actual Statutes of social reform than any other Party.
SEVERAL NOBLE LORDS: Hear, hear!
VISCOUNT ALEXANDER OF HILLS-BOROUGH: But usually because they had resisted for so long and the power of educated opinion had grown so mach outside that they had to give in.
LORD MANCROFT: Nonsense!
VISCOUNT ALEXANDER OF HILLS-BOROUGH: Certainly—I could prove it if I had time to give a political lecture, which I do not want to do. It reminds me of a great saying of the Rev. Guy Pearce, a great Methodist preacher, which he used when telling his Sunday school teachers what to do. He used to say that they must do what his mother used to do—give them what they like, not too much at a time, and give it to them warm. With this Bill you are following the old policy. You are giving them what they want by giving them the Bill; by banning a limited number of collective agreements, you are giving it to them not too much at a time; and you hope that when the Election comes you will be able to give it to them warm as well. You would do much better if you were to adopt a purely objective policy which is right for the common people and not merely for individual profit-making trade interests. If you were to do that, you would probably carry the majority of the people with you.
6.45 p.m.
LORD MANCROFT: My Lords, it is nearly a year since we last debated this complex but interesting subject. On July 27 we had a debate on the whole question of monopolies and covering some of the proposals which appear in the Bill we are discussing this afternoon. Recently I have re-read the debate, as many of your Lordships have also done, and I noted with interest some of the advice given by the noble Lord, Lord Lucas of Chilworth, who spoke with great authority on this matter, after a lifetime of experience. He said that, whatever we did with this Bill, we should not be cowardly: we should make quite certain that it was not an agreed measure. I do not think that anybody could describe this as an agreed measure.
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Nevertheless, it has received front most of the noble Lords who have spoken this afternoon a remarkably powerful degree, of support for which we on the Government Benches are grateful—indeed a much greater degree of support than we thought we would receive for the measure when we discussed its outline some eleven months ago.
There may be need for amendment here and there. My noble friends, Lord Saltoun and also Lord Barnby, who made such an interesting and courageous speech, asked me whether there was a chance of amending the Bill despite the fact that it had been fully considered in another place. Of course, the fact that it has been considered in another place does not preclude us in any way from amending it if we so think fit; but it was exhaustively considered there and I do not think that there is much ground on which we shall be able to give way. But of course we shall examine everything your Lordships wish to say in Committee with the care it deserves. Certainly in regard to the detailed matters brought up on Clauses 7, 20 and 23, we may possibly have to look at them again carefully. We have the advantage of the assistance in your Lordships' House of a fair number of experts in this field, reinforced by two newcomers, the noble Lords, Lord McCorquodale of Newton and Lord Gridley, to whose maiden speeches we listened to-day with such interest. I am sorry that the noble Viscount, Lord Alexander of Hillsborough, did not have the same pleasure. Both noble Lords bring a great, expert knoweldge in this subject to cur advantage, and we hope that we shall hear them on this and other subjects on many future occasions. Alas! I am not an expert on this matter, and here I bear a slight grudge against my noble friend Lord Hailsham. I did not know that he had written a textbook on the subject. If I had known, I would certainly have purchased a copy and studied it carefully. I confess that I have studied the work he wrote called The Case for Conservatism, and I have been making speeches out of it every Saturday ever since.
The noble Viscount, Lord Alexander of Hillsborough. who has just exploded in such a delightful and interesting way, made the same point to-day as he did on the last occasion—namely. that it is essential that we shall have prime regard

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to the interests of the consumer. I think that that is what we have done in the Bill. The noble Lord, Lord Grantchester, drew attention to this, as also did the noble Lord, Lord McCorquodale of Newton. It is of prime importance that the consumer's interests should come high in the list of interests to be considered, but not, as the noble Lord, Lord McCorquodale of Newton, pointed out, to the detriment of the producer. We have tried to protect the consumer's interests, but not at the expense of the producer. I was glad to hear the noble Lord, Lord McCorquodale of Newton, emphasise the high standard of business integrity in this country, a point which was also reinforced strongly by the noble Lord, Lord Baillieu. We often hear, both politically and non-politically, casual and careless slurs on big business as if they were clichés—used as a manner of speech. Therefore, I was glad to hear that point put so strongly as it was by my two noble friends.
The noble Lord, Lord Baillieu, raised an important point on Clause 20 which I should like to deal with straight away: that is, the question of the onus of proof, which he elaborated in some detail. As your Lordships now know, the onus is put on the parties to an agreement to satisfy the Restrictive Practices Court that the restrictions accepted under the agreement are not contrary to the public interest. The assumption is that competition is generally desirable and that it is up to the individual to show that in his case the restrictions on competition are justifiable. This does not mean, however, that the parties are to be pronounced guilty before they can prove themselves innocent. Let me emphasise that proceedings under this Bill are not criminal proceedings. The object is to define when it is in the public interest that the freedom of the individual to trade should be limited. It is not unreasonable, I should have thought, that the parties to an agreement which limits their own freedom in this respect, and in so doing limits the choice of other people as to the price they pay for the goods they make, should be asked to show that this is justified. That is the reason for this admittedly controversial decision to place the onus of proof where it now lies.
Let me now turn to the principal criticism levelled by the noble Lord, Lord Lucas of Chilworth, and one or two other
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noble Lords—namely, the question of the slowness that may be expected to arise from the procedure. The noble Lord is worried that these proceedings will drag on and on; that it will be a long time before the Court gets to the root of any matter; there are so many to be considered, and so on. I do not pretend that we shall get off in a flash, and I feel that it would Abe unwise to try to do so. We do not want to have a rough, hit-and-miss justice. On the other hand, we want to get down to work as quickly as we can. So the Government intend to call up under the first registration order (under Clause 8) the most important classes of restrictive practices; that is, price rings, agreed tendering and collective discrimination. I think your Lordships will agree that these form the greater part of the restrictive trade agreements which exist—and I am afraid I could not begin to estimate their number. The period allowed for registration will be about three months from the making of the order. The order will he made as soon as is practicable after the Bill is enacted —and your Lordships' guess as to when that will be is as good as mine. The operations of the Restrictive Practices Court can be accelerated as time goes on by the provision in Clause 22 for summary determination of cases.
Here I come to a point made by the noble and learned Lord, Lord Meston, and my noble and learned friend Lord Hailsham. They both pointed out that it is more than likely that after a short time cases will start to run according to pattern, and business and those advising business will see which way the Court is deciding in types of cases and will change their conduct and re-establish their affairs accordingly. It may be—this is only a guess—that after a time, when we see whether the Court is running firmly along one line of thought in its decisions, it will be necessary for a minor reform of the law to be made.
LORD LUCAS OF CHILWORTH Would the noble Lord make it clear that my understanding is correct: that the enforcement of conditions as to resale price maintenance set out in Clause 23 will come into force immediately on the passing of this Bill—in other words, that those conditions will be outlawed straight away, and will not have to be the subject of an appearance on agreements before the Restrictive Practices Court?
VISCOUNT HAILSHAM: It is Clause 35 (2).
LORD MANCROFT: I should like to check that. I understand that Clause 36 (2) covers that point.
I was saying that there might be a possible alternative to meet the difficulty the noble Lord, Lord Lucas of Chilworth, raised in his speech on the subject of speed. The alternative that obviously springs to mind is of a ban on certain classes of restrictive agreements, subject to appeals to a tribunal. It has been suggested that that would be more expeditious than the Government's scheme, if the appeals were limited in number. But I do not think it would be and, in practice, the tribunal would be examining agreements on much the same scale as the Restrictive Practices Court, with the disadvantage that it would not select cases according to their importance. If restrictive agreements were to be banned, subject to appeal, it would not be equitable to impose the ban until the appeal had been heard. That would amount to much 'the same thing as the Government's scheme of letting agreements operate until they have been covered by the Court.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: Would not the noble Lord agree that experience is in the other direction: that is to say, that on the introduction of the original policy of the Government, before the Bill, some progress had begun to be made? As the Commission pointed out, they have come across few cases where the continuation of the restrictive practice could be said to be in the public interest. Surely, the conclusions of the noble Lord are all wrong. If the noble Viscount, Lord Hailsham, is right in saying to industry that perhaps, on the whole, in the future they had better be prepared to accept the burden of proof, that argument, surely, is an argument against what the noble Lord, Lord Mancroft, is now saying.
LORD MANCROFT: I do not think it is at all. It is true that when we see the pattern of the Bill working as an Act, various businesses will change their plans in order to fall into line with what is being decided. We still feel that this is probably the quickest way to carry out the wishes of the Government.
LORD LUCAS OF CHILWORTHI: I must press the noble Lord on the point I made. I want to know whether the prohibition of agreements for collective enforcement of conditions as to resale comes into operation on the passing of this Bill; and that the resale price agreements do not have to go to the Restrictive Practices Court before they become prohibited. That is the general understanding of the Ministerial pronouncements made up to date.
VISCOUNT HAILSHAM: It is Clause 36 (2), not Clause 35 (2).
LORD MANCROFT: Let me get this clear. It is Clause 36 (2).
LORD LUCAS OF CHILWORTH: I am talking about Clause 23.
LORD MANCROFT: Let me take the noble Lord to Clause 36 (2), which says:
"This Act (except subsection (1) of section eight and section 26) shall come into force on the expiration of the period of one month beginning with the date on which it is passed."
Clause 8 (4) provides that:
"The power of the Board of Trade to make orders under this section shall be exercisable by statutory instrument; and an order under this section shall be of no effect until it is approved by Resolution of each. House of Parliament."
Clause 26 (6) provides that:
"This section shall come into force on such date as may be appointed by order made by the Board of Trade by statutory instrument."
I think that covers the point.
LORD LUCAS OF CHILWORTH: Would the noble Lord answer me the plain and straightforward question: when this Bill comes into force, which is one month after the commencement of the Act, do agreements for collective enforcement as to resale become illegal?
VISCOUNT HAILLSHAM: The answer is that it comes under Clause 36 (2). There is no question at all that it is covered by that subsection.
LORD LUCAS OF CHILWORTH: If the noble and learned Viscount sit on the Government Front Bench and make a Government pronouncement, I will accept it. But, unfortunately, the only one who can make a Government pronouncement on this is the noble Lord who is replying or the noble and learned Viscount on the Woolsack.
LORD MANCROFT: I thought I had made it clear to the noble Lord already. If I have not, I apologise.
LORD LUCAS OF CHILWORTH: The noble Lord cannot get away with that.
LORD MANCROFT: It is exactly what I said to the noble Lord just now.
I now turn to an entirely different point that has been causing some uneasiness—namely, the question of the actual constitution of the Court, the lay members and their position in the Court. At the time of our last debate eleven months ago, the Government had an open mind as to what sort of tribunal they would want. But the weight of opinion in your Lordships' House was strongly in favour of a judicial tribunal, which is what we are now proposing. It was very much the weight of opinion in your Lordships' House which influenced my right honourable friend in coming to his final conclusion. I feel that the administrative tribunal would have been a mistake: for one reason, because it would not have commanded the confidence which I am hopeful that this judicial tribunal will command. Some noble Lords have made great play about "a lawyer's paradise"—I believe the noble Lord, Lord Lucas of Chilworth, used those words—and I was delighted, as a member of the same profession, to hear my noble and learned friend Lord Hailsham conduct such a spirited and serious defence of the legal profession, its merits and the assistance which it provides to the community.
LORD LUCAS OF CHILWORTH: Dog does not eat dog.
LORD MANCROFT: That, I think, is putting it a little lower even than the noble Lord, Lord Lucas of Chilworth, need put it. This tribunal will, of course, carry out the functions which my noble and learned friend Lord Hailsham has outlined: it will not be a "lawyers' paradise." I have heard that expression thrown rather vulgarly across the Floor of the House ever since I have been a lawyer. I have heard that expression used at the Bar about the lack of work there. I have never known how those two viewpoints can be reconciled.
What we expect is that nearly all the lay members will be employed full-time in the work of the Court. It may be convenient, however, in the case of Northern
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Ireland and Scotland, to appoint someone who need spend only part of his time on the work of the Court. He will not, of course, be able to spend the rest of his time in business activities which conflict with his work in the Court. The qualification of, "knowledge of or experience in industry, commerce or public affairs" offers, we think, a sufficiently wide field of choice. It could, for example, include people who have been actively engaged in the administration of trade unions. At the same time, it excludes representation of particular interests like consumers. It would not fulfil the Government's purpose if the lay members were to be merely assessors. The particular kinds of experience and expertise which they can contribute will be important factors in the formation of the Court's judgments.
The lay members cannot outvote a Judge on a point of law—let us get that point established. On other matters, the judgment of the Court will be a single one, delivered by the presiding Judge. The Government do not consider that any useful purpose would be served by the delivery of separate judgments where the members of the Court disagree, since they would not be concerned so much with solving legal questions as with arriving, as so many of your Lordships have pointed out, at a balanced view on the considerations before them—some of them economic and some of them, of course, social. The Government regard as ill-founded the fears that the dignity of the Judge is threatened by the obligation placed upon him to deliver a judgment with which he may disagree.
The next point of importance with which I wish to deal is that raised by the noble Viscount, Lord Alexander of Hillsborough—who, both on the last occasion and to-day, read portions of his own work to us, to our great entertainment and profit—namely, the Cooperative Society dividend. He did it in a most entertaining speech, in which he managed to do something which I did not know even the noble Viscount would do. He managed to bring the Cawardine case into his speech on the co-operative dividend. That is quite an achievement. He naturally feels very strongly about this matter. I hope he is not thinking for one moment that any of us on this side of the House is in any way hostile to his ewe lamb, the Co-operative Movement or anything it stands for.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: I am.
LORD MANCROFT: That is not my view, and I hope I may disabuse him. I will try to answer as best I can—bearing in mind the fine Saturday afternoon speech he made on this subject—and will put to him, as calmly as I can, the facts which Impel the Government to act as they have done with regard to the Co-operative dividend.
Part II of the Bill, as your Lordships know, is not concerned with what constitutes a resale price condition. It does not seek to change anything in that respect. It is concerned only with methods of enforcement. The case for stating in the Bill that the Co-operative dividend is not to be treated as price-cutting has been argued with great vigour by the noble Viscount. The trouble is this. We feel that it would not be possible to stop there. It would be necessary to cover all deferred dividend schemes. As was pointed out by the Lloyd-Jacob Committee, there is an equally strong case for exempting genuine immediate discount schemes. Clause 24, therefore, does not provide an entirely new legal remedy against the societies. They are already liable to legal proceedings for infringement of resale price conditions, where such conditions are embodied in a contract of sale. If it is any encouragement to the noble Viscount, perhaps I might put this point. I think the co-operative societies stand to gain from the Bill in two respects. They will gain in one way because they will no longer be made victims of collective boycott on the grounds that they are price-cutters, and in another way because any organised discrimination against them on other grounds would have to be justified before the Restrictive Practices Court. I do not think the noble Viscount and I will ever come any nearer to each other than this, and I do not propose to waste the time of the House on this rather controversial and emotional subject.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: I think I should inject a little more education into the noble Lord, because I am basing myself on the position taken up by the President of the Board of Trade. The President of the Board of Trade said, in effect, that no clause in the Bill says that dividends should, or should not, count for price-
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cutting purposes. That agrees with what the noble Lord has just said. It will remain, as it remains now, a matter for the individual supplier to decide. That means that you are saying to the cooperative societies, who have so long been organising and striving against boycott, that they have no cause for action if any individual supplier says, "I will not supply you because you refuse to refrain from giving to your own mutual members a dividend upon the purchase." And I say to the Government you are not doing your duty by the co-operative societies or the public.
LORD MANCROFT: I am afraid that nothing I can say will make the noble Viscount believe that we are doing our duty to the co-operative societies, and I do not think much will be derived from going into the matter any further. We forgive the noble Viscount, because we know how strongly he feels, based upon a lifetime of service to the movement.
There is one more point concerned with the duties of the Monopolies Commission to which the noble Viscount, the noble Lord, Lond Grantchester, and one or two other noble Lords referred. The Government believe that the smaller Commission will be adequate to deal with the reduced but important field with which the Commission will be concerned. The Commission will still have jurisdiction over all matters laid down in the Act of 1948, except those agreements which will come within the jurisdiction of the Restrictive Practices Court. This means, I hope, that nothing will slip out between the Commission and the Court. I think your Lordships will agree that it is important to avoid duplication of work between the Commission and the Court. To retain the Commission as a "long stop" to the Court would hardly be the best way to create confidence in the new judicial procedure. On the contrary, it would make for great uncertainty. If the judicial procedures were not a success, Parliament would need to reconsider the whole question. It is no solution to keep an overstaffed Commission lurking around in the background.
I come to the last point upon which most of your Lordships have touched, and with which should like to deal. It is this question of restrictive labour practices. The Bill does not deal with restrictive practices by workers. In the Government's view, there is an essential

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difference between commodities and the working relationships and conditions of human beings. Legislation appropriate to remedy abuses in one case may not be appropriate in the other. The negotiation of terms and conditions of employment collectively is not, in itself, against the public interest, whereas the presumption underlying this Bill, in the case of restrictive practices between traders is that they are prima facie against the public interest. In any case, the enforcement of judicial decisions would, in general, I feel, be impracticable in the case of restrictive labour practices.
As your Lordships know, appropriate machinery for examining such practices already exists, in the National Joint Advisory Council of the Ministry of Labour. In February last, my right honourable friend the Minister of Labour announced that the Council would once again examine the problem of restrictive labour practices; and in a further announcement in another place on May 1, my right honourable friend said that the National Joint Advisory Council had agreed at a recent meeting Lo draw the attention of the employers and trade unions in individual industries to the urgent need for a new and positive examination of practices which impede the full and efficient use of manpower resources Later in the year the Council is to review the progress which has been made.
I hope I have said enough to convince your Lordships who feel a little uneasy about this Bill that it is based on sound principles. I have taken up an intolerable amount of time, and I have not by any means answered all the different points put to me. I have tried to answer the major ones which have been raised and the main difficulties which have given your Lordships some anxiety. I repeat, as I said before to my noble friend Lord Saltoun, that we will, of course, examine all the suggestions which have been made; and if we can use them to improve the Bill we will most certainly do so. I should like the Bill to work with your Lordships' approval and knowledge, and with the co-operation of everybody. As your Lordships have said, without cooperation and good will, nine-tenths of the value of the Bill will be evaporated. I was very happy to hear my noble friend Lord Hailsham pay a tribute to my right honourable friend the President
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of the Board of Trade, whose spokesman I have now had the honour to be in your Lordships' House for nearly four years, and whose pertinacity and courage have contributed considerably to this present measure before us. It is a good measure. I do not suggest for one moment that it is not capable of improvement. It is a bold and benevolent measure. I very much hope that your Lordships will be able to accord it a Second Reading.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

CHARITY OF FRANCES BARKER AND CERTAIN OTHER CHARITIES (CITY OF YORK) BILL
CONSOLIDATED MUNICIPAL CHARITY AND CERTAIN OTHER CHARITIES (LUDLOW) BILL
HOSPITAL OF ROBERT EARL OF LEICESTER CHARITY (WARWICK) BILL
SUTTON'S HOSPITAL (CHARTER-HOUSE) CHARITY BILL
House in Committee (according to Order): Bills reported, without Amendment.

TEACHERS (SUPERANNUATION) BILL
7.13 p.m.
Read 3a (according to Order), with the Amendments, and passed and returned to the Commons.

LONDON COUNTY COUNCIL (GENERAL POWERS) (No. 2) BILL
Brought from the Commons; read 1a, and referred to the Examiners.

BEDFORD CORPORATION BILL
BOURNEMOUTH—SWANAGE MOTOR ROAD AND FERRY BILL
SCOTTISH UNION AND NATIONAL INSURANCE COMPANY BILL
Returned from the Commons, with the Amendments agreed to.
House adjourned at fourteen minutes past seven o'clock.