Sitting of 17 June 1958

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  NORTHERN RHODESIA

    Constitution
    Mr. Brockwayasked the Secretary of State for the Colonies what representations have been received from the African Representative Council of Northern Rhodesia regarding the proposed constitutional changes.
    The Secretary of State for the Colonies (Mr. Alan Lennox-Boyd): None, Sir; but the African Representative Council started a new Session on 11th June, during which the proposals for constitutional change are due to be discussed. When I receive a report of the proceedings I will write to the hon. Member.
    Mr. Brockway: I thank the right hon. Gentleman, but is he aware that Mr. Sokota, representing the African Representative Council, has put forward proposals and has criticised the present suggestions on the ground that while there are more than 2 million Africans and 71,000 Europeans, the Africans have only eight representatives against the fourteen representatives of the Europeans?
    Mr. Lennox-Boyd: Yes. I had rather an interesting talk with my friend Mr. Sokota when he was in London. When I receive the report of the proceedings which I have asked for, I will let the hon. Member know.

  CYPRUS

    Future
    Mr. Brockwayasked the Secretary of State for the Colonies if he will make a statement on the negotiations regarding the future of Cyprus.
    Mr. J. Johnsonasked the Secretary of State for the Colonies whether he will now make a statement about the future of Cyprus.
    Mr. Lennox-Boyd: A statement will be made by my right hon. Friend the Prime Minister after Question Time today.
    Mr. Brockway: Can the right hon. Gentleman confirm that the decision of the Government has now been postponed again? Is he aware that while we feel it has been disastrous during this year that a decision should not have been reached, we would welcome it if the Government would assist a settlement?
    Mr. Lennox-Boyd: I have nothing to add to my Answer.

    Turkey (Broadcasts and Newspaper Articles)
    Mr. F. Noel-Bakerasked the Secretary of State for the Colonies what steps the Government of Cyprus will take to prevent the incitement to murder and civil war of the Turkish Cypriot population by means of radio broadcasts and newspapers from Turkey.
    Mr. Lennox-Boyd: Her Majesty's Government have made the strongest representations to the Turkish Government about the tone and content of recent broadcasts and newspaper articles The Cyprus Press censor has on one occasion prevented the circulation of Turkish newspapers and will do so again whenever necessary.

    Detainees
    Mr. F. Noel-Bakerasked the Secretary of State for the Colonies how many Greek Cypriots and how many Turkish Cypriots were in detention or under arrest in Cyprus for offences against public order on the most recent date for which figures are available.
    The Under-Secretary of State for the Colonies (Mr. John Profumo): On 14th June there were 542 Greek Cypriots detained under the Detention of Persons Law and 281 Greek Cypriots serving prison sentences for offences connected with the emergency. Two Greek Cypriots and 63 Turkish Cypriots were held under arrest pending policy inquiries into recent offences against public order.
    Mr. Noel-Baker: While I appreciate that those figures are not very recent, may I ask whether the hon. Gentleman is aware that they may lend credence to the widespread view that Her Majesty's Government are prepared to tolerate acts from one section of the population in Cyprus against which they took the most ruthless measures when they were perpetrated by members of the majority?
    Mr. Profumo: I very much regret what the hon. Gentleman has said, particularly at a moment such as this. There is no truth whatsoever in these accusations, and the figures of persons under arrest speak for themselves.

    Dr. Kuchuk and Mr. Denktash
    Mr. F. Noel-Bakerasked the Secretary of State for the Colonies what proceedings the Government of Cyprus now proposes to take against Dr. Fazil Kuchuk and Mr. Raouf Denktash, in view of their repeated violations of the emergency regulations.
    Mr. Lennox-Boyd: No proceedings have been taken against Dr. Kuchuk and Mr. Denktash. At the present time I would prefer to say no more than that.

    Police (Mobile Reserve and Auxiliaries)
    Mr. Donnellyasked the Secretary of State for the Colonies how many Greek Cypriots and how many Tukish Cypriots are serving in the police mobile reserve and in the auxiliary police, respectively.
    Mr. Lennox-Boyd: There are 536 Turkish Cypriots in the mobile reserve and no Greeks, and 1,281 Turkish Cypriots and 56 Greek Cypriots in the auxiliary police.
    Mr. Donnelly: What steps is the right hon. Gentleman taking to make the administration of Cyprus less dependent upon the British policemen in the various reserves?
    Mr. Lennox-Boyd: E.O.K.A. terrorism is entirely responsible for the failure of the Greeks to join these two forces and the consequent fact that these forces are now so largely Turkish.
    Mr. Callaghan: Whoever was responsible for it, that was not the question. Will the right hon. Gentleman answer the question, which is whether in present
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    circumstances, which are now somewhat different, he or the Governor will, so far as possible, cease to rely upon the services of an almost exclusively Turkish force?
    Mr. Lennox-Boyd: I have answered the Question on the Order Paper, and any supplementary questions will fall more in place when we have a general discussion on Cyprus.
    Mr. Paget: Have the Turkish police in fact shown any reluctance in dealing with Turkish rioters?
    Mr. Lennox-Boyd: No. They have behaved extremely well under very great difficulties, and I think that much praise is due to them.

  SEYCHELLES

    Commercial Education
    Mr. Swinglerasked the Secretary of State for the Colonies if he will take action to supply modern typewriters and equipment to the modern school in Praslin in the Seychelles to enable the standard of teaching and instruction to be raised.
    Mr. Profumo: The Seychelles Government recognise the need for improved training in typewriting and propose to meet it as funds become available by providing commercial courses at the proposed new technical school for students whose basic education is already adequate. They believe that these proposals are to be preferred on educational grounds to the implied continuation and development of commercial courses in the secondary modern school.
    Mr. Swingler: While I am much obliged to the Under-Secretary of State for his Answer, may I suggest that the real point is whether they are to get modern equipment or not? My information is that the equipment in the schools is dilapidated and obsolete. Will the Government face the question of providing the Seychelles, which we know is very far away, with modern equipment for this instruction?
    Mr. Profumo: The typewriters are not of the most modern type but typewriter tuition does proceed. I can assure the hon. Gentleman that it is the intention of the Government when the new school is built to provide up-to-date equipment.

    Clinks (Sera and Vaccines)
    Mr. Swinglerasked the Secretary of State for the Colonies if he will give instructions to ensure that all clinics in the Seychelles are supplied with refrigerators for the keeping of sera and vaccines.
    Mr. Profumo: For reasons which I have explained to the hon. Member in a letter, I am satisfied that the present arrangements are adequate.
    Mr. Swingler: While thanking the Under-Secretary of State for the very long letter he wrote to me, which was extremely informative on this matter, may I ask whether he is aware that those who are in touch with medical people in the Seychelles still feel that there is a case for keeping serum in the clinics? Will be check the information given to him about expert opinion among medical officers on the spot on the supply to the clinics?
    Mr. Profumo: I do not think I have any need to check the medical information because I did that before I wrote to the hon. Gentleman. Perhaps I might ask him if he would forward a copy of the letter which I wrote to him to his informants in the Seychelles. If they are still worried, perhaps we can take up the matter further.

  KENYA

    Lokitaung Prison
    Mrs. Castleasked the Secretary of State for the Colonies how many visits detainees in Lokitaung detention camp, Northern Province, Kenya, are allowed to receive from relatives per month; how many letters they are allowed to send and receive per month; and what is their daily water ration.
    Mr. Lennox-Boyd: I assume that the hon. Member is referring to the convicts at Lokitaung prison, since there is only one detainee there. In common with all other convicted prisoners in Kenya, those at Lokitaung may be allowed by the officer-in-charge once in each month the privilege of visits from relatives, and to write and receive one letter. Water is not now rationed at Lokitaung.
    Mrs. Castle: Is the right hon. Gentleman aware that his Answer confirms one at least of the facts in the letter from this prison camp which has caused so
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    much excitement? Is the Colonial Secretary also aware that, almost weekly, hon. Members of this House are now receiving letters, not merely from these out-and-out Mau-Mau convicts but from detention camps throughout Kenya, and it is quite impossible for hon. Members at this distance to learn the facts? In view of that, will he say whether members of the Kenya Legislative Council who represent Africans there have the right of free access to this prison came just as Members of Parliament would have access to prison camps in this country?
    Mr. Lennox-Boyd: In reply to the three questions asked by the hon. Lady, my Answer in no way confirms any one of the charges made by these convicts. I dealt with this problem in great detail last night. The restriction on receipt of mail, for example, applies to all convicts, not just this particular lot, whether European or African. In reply to the second part of her supplementary question, if the hon. Lady is now receiving large numbers of letters from detainees, it is all part of a campaign to try to smear the security forces and the Administration in Kenya. In regard to the last part of the supplementary question, I have nothing whatever to add to what I said in the debate last night.
    Mr. Callaghan: Further to the last answer, I do not think that the right hon. Gentleman dealt at all with the third question last night. I was present and heard the whole of the debate. May I ask him, therefore, if he cannot give a simple reply to that question? Is is possible for African members—and, indeed, European members—of the Kenya Legislative Council to visit these camps or prisons and see the conditions there?
    Mr. Lennox-Boyd: There is a later Question on the Paper on that point.
    Mr. Brockwayasked the Secretary of State for the Colonies the result of the investigation of the charges made in a letter by five prisoners at Lokitaung, Kenya, a copy of which has been forwarded by the hon. Member for Eton and Slough, particularly the charge that the prisoners were compelled to draw their water from a well condemned by the doctors and in which dogs' carcasses and filth had been thrown for years.
    Mr. E. Fletcherasked the Secretary of State for the Colonies (1) whether he has approved the policy of the Kenya Government in keeping political prisoners in the desert prison of Lokitaung without water;
    (2) what report he has received from the District Officer, Mr. C. L. Ryland, regarding the conditions in which political prisoners are detained at Lokitaung; and what steps he is taking in the matter.
    Mr. K. Robinsonasked the Secretary of State for the Colonies if the Government of Kenya has now concluded its inquiry into allegations of brutality and physical hardships suffered by prisoners at Lokitaung Prison in the Northern Province of Kenya; what were the findings; and if he will make a statement.
    Mr. J. Johnsonasked the Secretary of State for the Colonies if he will make a statement regarding the inquiry of the Kenya Government into the conditions at Her Majesty's Prison, Lokitaung, and, in particular, the complaints of ill-treatment of political detainees.
    Mr. Wadeasked the Secretary of State for the Colonies whether he has any statement to make on the conditions and treatment of political prisoners in Her Majesty's Prison, at Lokitaung, in Kenya.
    Mr. D. Griffithsasked the Secretary of State for the Colonies if he will make a statement on the inquiry that is being held by the Kenya Government into the conditions of political prisoners serving sentences there.
    Mr. Lennox-Boyd: I would refer the hon. Members to my reply to my hon. Friend, the Member for Haltemprice (Mr. Wall) on 11th June.
    Mr. Brockway: As the only inquiry which has been made has been by a senior officer of the Defence Department of the Government of Kenya and in view of the fact that over the last two years—not only just recently—hon. Members have had frequent complaints, which we have always referred to the Minister, will the Minister now establish an independent and impartial judicial inquiry so that these charges can be met?
    Mr. Lennox-Boyd: No, Sir. I will not do any such thing. I would ask all hon. Members to read the very full statement I made last night. The HANSARD containing it is not yet available to hon. Members, but when it is I would advise them to read it. If after reading it they have anything further to pursue, I am always ready to answer Questions.
    Mr. Stonehouse: As no person who is not a member of the Administration has been to the prison since these complaints were made, is not it essential, in view of the necessity to deal with these rumours once and for all, for an impartial inquiry to be held?
    Mr. Lennox-Boyd: I dealt with that last night and I gave the list of people of all sorts and kinds, official and unofficial, who have been at the prison in recent months. I must repeat my plea that, on matters affecting the honour of the Kenya Legislative Council and a particular officer, hon. Members should read what was said last night before asking ill-thought-out questions and still further disseminating suspicion and uncertainty which is quite unjustified.
    Mr. Callaghan: The Colonial Secretary must not add to his bullying of the House last night by lecturing us now. Is not it the case that normally the administration of these prisons is within the reach of independent observers? This prison is hundreds of miles away and no independent observation can be made, or has been made, by European or African members of the Legislative Council, nor anything of the sort. Does not the right hon. Gentleman think that, quite apart from anyone's honour, there is an obligation on him to ensure that there is some independent check upon the activities and administration of these institutions, which are a long way removed from civilisation?
    Mr. Lennox-Boyd: Many hon. Members here now were not here last night. I must ask all of them to read what I said. If thereafter they still think there is anything worth pursuing, I will readily answer Questions.
    Mr. Callaghan: I am sorry to persist, but will the Colonial Secretary answer the fair question which was put to him? Does he recognise that, where the Administration is not in touch, there is

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    a particular obligation upon him to have some special inquiries made and special oversight of it? May I have a straight answer to that question?
    Mr. Lennox-Boyd: The answer is that I do not think there is any need whatever to do beyond what I said last night had been done, which I believe will leave all fair-minded people convinced of the truth of the answers given.
    Mrs. Whiteasked the Secretary of State for the Colonies when the Prison Visiting Committee last visited Lokitaung Prison, Kenya; and how many visits have been paid during the past five years.
    Mr. Lennox-Boyd: It has not been practicable to appoint official visitors to Lokitaung Prison since people were not available who could visit this prison regularly. The prison is, however, visited regularly by the visiting justices, who perform the same functions of inspection as official visitors, and also by senior prisons officers.
    My information does not at present cover a five-year period but during the last eighteen months visiting justices have made seven, and senior prison officers nine, visits to Lokitaung.
    Mrs. White: As the visiting justices are, I understand, the Provincial Commissioner and the District Commissioner, surely the right hon. Gentleman will realise that that kind of visit is not the sort of independent visit with which we are concerned? Quite apart from any of the immediate charges, would not he agree that it is not satisfactory for any such establishment to be without some kind of independent visiting?
    Mr. Lennox-Boyd: No, Sir. I cannot agree to that. As I said at great length last night, people who are more concerned than anybody else to clear the Administration of charges and to arrive at the truth have arrived at certain conclusions. I gave a long list of other people who have also been to the prison recently.
    Mr. Callaghan: Is it on this Question that the Colonial Secretary proposes to tell us whether he will allow members of the Legislative Council to visit the prison, or is there some other Question on which he proposes to do so?
    Mr. Lennox-Boyd: The hon. Member can read the Order Paper for himself.
    Mr. Stonehouseasked the Secretary of State for the Colonies to what extent elected members of the Kenya Legislative Council are allowed to visit detention camps and prisons in the Colony; and how many such visits have been made during the last twelve months to Lokitaung Prison in Turkana District.
    Mr. Lennox-Boyd: Both in detention camps and prisons all visits are at the discretion of the officer in charge or the Commissioner of Police; convicts may, as a privilege, receive one visit a month from friends. No visits have been made by elected members of the Kenya Legislative Council to Lokitaung Prison.
    Mr. Stonehouse: What answer is being given to the elected members' request that they should be allowed to visit this prison in particular? Has the Minister seen the report in the Uganda Argus last week indicating that the administrative secretary has given an invitation to elected members in Uganda to visit prisons in Uganda? If those facilities are provided in Uganda, may we ask why the elected members in Kenya are not given them?
    Mr. Lennox-Boyd: I should first draw a very clear distinction between the Mau Mau conspiracy, which has devastated parts of Kenya, and the Protectorate of Uganda. No greater mistake is made than to assume that the circumstances are similar everywhere. Answering the first part of the supplementary question, I should not be altogether surprised if the Kenya Government were reluctant to allow visits by Kenya elected members in view of the effect which certain utterances by some members had when circulated secretly last year in Athi River detention camp, when there was a great increase in the number of detainees refusing to co-operate in rehabilitation. I am content to leave this point, and many others also, to the discretion of the Governor and the Commissioner of Police.
    Mr. Callaghan: In that case may I ask the Colonial Secretary whether he will convey to the Governor that in the minds of a great many people it will be very improper and will give an entirely false impression if elected members of the

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    Legislative Council are not allowed to visit this prison, in view of the fact that there is no one else, as far as I know, who is in a position to do so and who is outside Government service?
    Mr. Lennox-Boyd: I will always convey anything said in the House to His Excellency the Governor, but I repeat that the experience gained in other detention camps as a result of some communications from elected members does not suggest that this is the best way to help to bring Kenya back to normal.
    Mr. F. M. Bennett: After all the revelations in last night's Adjournment debate, would not Opposition apologies be more in keeping today than further Questions?
    Mr. Paget: If we are to expect elected members in Kenya to be responsible, is it not highly important to treat them as responsible people? When all is said and done, and however bogus the Lokitaung complaints may have been, cases in the courts have shown that some pretty terrible things have happened occasionally in Kenya prisons, enough to cause some anxiety. I hope that the right hon. Gentleman will consider this question of allowing the elected members to visit prisons as, of course, they would be allowed to visit them in England.
    Mr. Lennox-Boyd: I do not think it would be the contention of any elected African members that I have not treated them with a desire to try to give them a sense of responsibility.
    Mr. Stonehouse: When will the elected members get a reply to their request to be allowed to visit this and other detention camps?
    Mr. Lennox-Boyd: That is a request made to the Government of Kenya and I am sure that a reply will be sent at the earliest date, but I will convey that question to the Governor.

    Makerere University College (Extra-Mural Studies)
    Mrs. Whiteasked the Secretary of State for the Colonies what financial arrangements are being made to enable the extra-mural work at Makerere University College to continue up to the period of the next quinquennial grant.
    Mr. Profumo: The latest information I have may be found in the Report of the Department of Extra-Mural Studies, Makerere College, for 1956–57, a copy of which has been placed in the Library.
    Mrs. White: Is the hon. Gentleman aware that those of us interested in this matter have been much disturbed to hear that there is to be no expansion of this work, which is extremely necessary both in Kenya and Tanganyika, and that we have grave doubts whether even the present very inadequate level can be maintained?
    Mr. Profumo: I think the present level can be maintained, but I cannot go into what may or may not be possible after the present C.D. and W. Acts come to an end.
    Mr. J. Johnson: May I ask why over all these years, despite requests, there has never been any extension work in Tanganyika as a Colony? We have always had "No" as the answer to our questions. Why has there been extension both in Uganda and Kenya but not in Tanganyika?
    Mr. Profumo: That is a wider question and perhaps the hon. Member will put it on the Order Paper.

    Rural Wages and Conditions
    Mr. Bennasked the Secretary of State for the Colonies if he will make a statement on rural wages and conditions in Kenya following the submission of the report on this subject over a year ago.
    Mr. Profumo: When my right hon. Friend replied to the hon. Member for Rugby (Mr. J. Johnson) on 9th July last, he said that in due course a full statement of policy on rural wages would be made after discussions with representatives of both employers and employees. These discussions, though valuable, did not result in agreement, and the Kenya Government have not yet reached a decision on policy.
    Mr. Benn: Is not it very unsatisfactory that well over a year should have passed since the report on rural wages and conditions was made available to the Government and before any statement can be made, in view of the fact that it is one of

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    the real political dissatisfactions now in Kenya?
    Mr. Profumo: It has certainly been a long time, but any system for the regulation of wages and conditions of employment stands a very much better chance of operating if there is general agreement between both sides. In the absence of that, the Kenya Government are now having to consider whether they can go ahead without this general agreement. My right hon. Friend is in touch with the Governor on this point.

    Kiama Kia Muingi
    Mr. Stonehouseasked the Secretary of State for the Colonies how many Africans have been detained during 1958 in connection with Kiama Kia Muingi activities and, of these, how many have been brought to trial.
    Mr. Profumo: By 13th June 331 Africans had been arrested in connection with K.K.M. activities, of whom eight had been tried and convicted.
    Mr. Stonehouse: When is it proposed to bring to trial the remainder of those who have been detained and on what charges are they to be tried?
    Mr. Profumo: I cannot give the hon. Member the whole list of charges on which they are being tried. He probably knows that no one can be held for more than twenty-eight days without being either charged or committed to detention. I think he also knows that this threat which has existed and has reared its ugly head again is a threat which neither the Governor nor my right hon. Friend could ignore—a threat to peace and good Government.

    District Officer, Lokitaung (Letter)
    Mr. Wallasked the Secretary of State for the Colonies what action he is taking to defend Mr. C. L. Ryland, the District Officer of Lokitaung, Kenya, against the complaints made against him in a letter published by a Sunday newspaper, particulars of which have been sent to him.
    Mr. Lennox-Boyd: I hope that the facts which the Governor and I have given will receive sufficient publicity to redress the unfortunate effect of the unwarranted allegations made against Mr. Ryland.

  SINGAPORE

    Legislative Assembly (Membership)
    Mr. Rankinasked the Secretary of State for the Colonies whether the clause insisted upon by the Government banning people concerned in subversions from taking part in the next Legislative Assembly in Singapore will apply to by-elections or only their participation in the general election; and to what extent objections were raised to this clause by the recent Singapore delegation.
    Mr. Awberyasked the Secretary of State for the Colonies if full agreement was reached in the recent discussions with the representatives of the Singapore Government on the category of people to be included in, or excluded from, membership of the first Legislative Assembly to be elected in the Colony when independence has been established.
    Mr. Lennox-Boyd: This ban is to cover the whole term of the first Legislative Assembly under the new constitution. At the recent talks, the Singapore delegation repeated its objection and I maintained my opinion that this temporary restriction is essential to safeguard the orderly development of democratic government in Singapore against the danger of Communist subversion.
    Mr. Rankin: In view of the fact, according to the report in The Times, that Lim Yew Hock seems to be coming to the same view as Lee Kan Yew, will not the Minister reconsider his attitude? Does he really believe that it helps others to copy the British way of life, which we want to see them doing, when we put people in gaol for political offences and refuse to allow them to contest elections?
    Mr. Lennox-Boyd: I am not prepared to vary my decision at all. It was arrived at after a great deal of consideration. I am convinced that if we are to give privileges to democratic communities in the Far East or anywhere else, we should see that they are provided with the means of defence against those who are contriving their subversion.
    Mr. Awbery: Am I to understand that the Minister has come to an agreement with Mr. Lim Yew Hock on this question? Is there an arrangement that the constitution shall be revised after a certain period of time in the light of experience?
    Mr. Lennox-Boyd: Of course, the constitution was negotiated. This particular provision was not negotiated but was imposed by myself on behalf of the British Government.

    Constitution
    Mr. Rankinasked the Secretary of State for the Colonies what agreement was reached during the discussions with the Singapore delegation on the provisions in the proposed constitution requiring British consent before the colony of Singapore could open trade negotiations with any other country.
    Mr. Lennox-Boyd: The arrangements in paragraph 36 of the report of last year's Constitutional Conference (Cmd. No. 147) and the terms of the dispatch delegating authority to the Singapore Government, which is printed as Appendix B to Cmd. No. 147, were confirmed without alteration.
    Mr. Rankin: May I take it from that Answer that Singapore will not be in a worse condition under the new constitution than it was when Mr. David Marshall was able to head a delegation of fifty business men from Singapore to Peking to conduct trading negotiations?
    Mr. Lennox-Boyd: It would be very rash of me to answer such a sweeping question of that kind without any knowledge of the precise point which the hon. Member has in mind.

  MALTA

    Future
    Mr. Awberyasked the Secretary of State for the Colonies (1) to what extent the position of the Malta dockyards and the plans for their future use were discussed with the Governor of the island at his recent talks; and what alteration has been made in the policy previously laid down by the Government;
    (2) to what extent the constitutional processes have worked themselves out since the Government's decision to reduce the contribution to Malta to £5 million; and, since the island is without an elected Government, what steps he now proposes to take to bring about a settlement of the island's problems.
    Mr. Callaghanasked the Secretary of State for the Colonies if he will make a statement on his recent discussions with the Governor of Malta, especially in regard to the constitutional and industrial future of the island.
    Mr. Lennox-Boyd: I have as yet nothing to add to my Answer of 10th June to Questions by my hon. Friends the Members for Haltemprice (Mr. Wall) and Sunderland, North (Mr. P. Williams).
    Mr. Awbery: Can the hon. Gentleman inform us whether any negotiations have taken place with any commercial undertaking with a view to converting the naval dockyard into a dry dock?
    Mr. Lennox-Boyd: We are having talks with certain commercial undertakings about the future of the docks after 1960.
    Mr. Callaghan: Is that holding up the statement, or is it something else that prevents the Minister reporting on his conversations with the Governor?
    Mr. Lennox-Boyd: That is a factor in the talks I am having with the Governor, which are so significant for the future of Malta. It is better that they should be prolonged than that we should arrive at hasty conclusions, but I can give an assurance that the statement will not be long delayed.

  SIERRA LEONE

    Economic Survey
    Mr. R. Edwardsasked the Secretary of State for the Colonies if he will place a copy of the report made to him by Professor D. T. Jack on his economic survey of Sierra Leone in the Library upon publication.
    Mr. Profumo: The report will be submitted to the Sierra Leone Government in the first instance. If they decide to publish it, I will certainly arrange to place a copy in the Library.

    Air and Road Communications (Expenditure)
    Mr. R. Edwardsasked the Secretary of State for the Colonies the amounts which have been, and will be, spent on airfields and air communications and road communications, respectively, for the years 1956–58 in Sierra Leone.
    Mr. Profumo: Expenditure on airfields and air communications totalled £86,250 in 1956 and £83,490 in 1957. Expenditure for 1958 is estimated at £163,652. On the information at present available, expenditure on roads and bridges in 1956 was £213,904, whilst estimated expenditure in 1957 and 1958 is £437,000 and £645,000 respectively.

  HONG KONG

    Tsan Yuk Hospital (Ante-Natal Clinics)
    Mrs. Castleasked the Secretary of State for the Colonies how many medical staff are employed in the ante-natal clinics at the Tsan Yuk Hospital, Hong Kong; how many sessions are held per month; and what has been the average attendance per session in the past year.
    Mr. Profumo: I have asked the Governor for the information and, when I have received it, will circulate it in the OFFICIAL REPORT.
    Mrs. Castle: While thanking the hon. Member for that reply, may I ask whether he is aware that I have received a copy of the Hong Kong Standard of 16th May which contains a photograph of the maternity hospital, with expectant mothers sleeping outside overnight because of the overcrowding of the ante-natal clinics and the necessity to queue for long hours? Would he look at this report, and, when he makes his statement, confirm or deny these facts?
    Mr. Profumo: I think that it would perhaps be better if, instead of relying on that report. I awaited the Governor's full report, which no doubt will take that sort of thing into consideration.

    Medical Personnel
    Mr. Blenkinsopasked the Secretary of State for the Colonies what action he is taking to recruit suitable medical personnel for resident and visiting posts in the Hong Kong Medical Department and teaching posts in Hong Kong University.
    Mr. Profumo: Medical appointments in Hong Kong are made to a large extent locally. Such vacancies as are notified to my right hon. Friend are normally advertised in the medical journals. Teaching posts in the Hong Kong University
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    are filled independently by the University authorities.
    Mr. Blenkinsop: is the hon. Gentleman aware that I understand that the British Medical Journal has barred advertisements from Hong Kong, because of the payment of different rates of pay there to men and women in the service? Will he take the opportunity to review this decision and make the payments equal?
    Mr. Profumo: This is not a decision of my right hon. Friend. It is the decision of the Government locally.
    Mr. Blenkinsop: Will the hon. Gentleman bring the matter to the attention of the Governor?
    Mr. Profumo: My right hon. Friend is in consultation with the Governor, but I must stress the fact that this is still a matter for the Government of Hong Kong to decide.

    Trade
    Mr. Thorntonasked the Secretary of State for the Colonies the total combined value of Hong Kong's import and export trade in all commodities in 1957; and, of this combined total, the percentages of imports and exports.
    Mr. Profumo: In 1957, the total trade was £511 million of which imports were £322 million, or 63 per cent., and exports £189 million, or 37 per cent.
    Mr. Thorntonasked the Secretary of State for the Colonies the percentages of Hong Kong's total imports and exports in 1957 which came from and went to the United Kingdom, China, and the United States of America; and what percentages of Hong Kong's total exports of cotton piece-goods and shirts went to the United Kingdom in the same year.
    Mr. Profumo: The figures for imports were: 13 per cent. from the United Kingdom, 22 per cent. from China, 10 per cent. from the United States of America. For exports: 11 per cent. to the United Kingdom, 4 per cent. to China, 7 per cent. to the United States. Twenty-two per cent. of cotton piece-goods and 22 per cent. of shirts exported went to the United Kingdom.
    Mr. Thornton: May I ask the hon. Gentleman if he agrees that these figures tend to indicate that both China and the

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    United States benefit more from trade with Hong Kong than does the United Kingdom?
    Mr. Profumo: I think the percentage figures show that the 13 per cent. is worth £42 million and that the 11 per cent. is worth only £21 million, and that we thus have a favourable trade balance between the United Kingdom and Hong Kong of £21 million.
    Mr. Nairn: In the interests of Hong Kong, would my hon. Friend point out that Hong Kong imports from this country more than it exports to this country?
    Mr. Profumo: That is what I had hoped to indicate.
    Mr. S. Silverman: Can the hon. Gentleman confirm that the value of cotton imports from Hong Kong into this country has risen in seven years from £30 million to £100 million a year?
    Mr. Profumo: It has risen very considerably indeed, but I hope that the hon. Gentleman will remark the answer I gave to the last supplementary question, which I think is the important nub of this question.

    Women (Hours of Work)
    Mr. Thorntonasked the Secretary of State for the Colonies the maximum daily and weekly hours, according to law, that women may be employed in factories and industrial undertakings in Hong Kong.
    Mr. Profumo: The maximum daily period of employment is thirteen hours between 7 a.m. and 8 p.m. Overtime may be worked up to 9 p.m. with special permission of the Labour Department which is granted only subject to the condition that meal breaks of 2¾ hours are given. There is no separate legislation governing weekly hours.
    Mr. Thornton: Is the Minister aware that, on page 103 of the 1956–57 Report of the Hong Kong Commissioner of Labour, it is stated that women frequently work maximum legally permitted hours? That is the statement of the Commissioner of Labour. Is the Minister aware that the labour laws of Hong Kong governing the hours of work of women are the worst in Asia and probably the worst in the
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    world? Will he and his right hon. Friend please give attention to this matter? Is it a fact that women frequently work about eighty hours per week?
    Mr. Profumo: I do not agree that the conditions under which these people are working are the worst in the world. [HON. MEMBERS: "It is the hours."] I am sorry, but the hon. Gentleman did refer to the hours of work and conditions, and I am saying that I cannot agree that the conditions are the worst in the world. We had a full discussion on this on the Adjournment the other day, during which I told the House that an Employment Bill is at present in course of preliminary drafting in Hong Kong. I have said also that my right hon. Friend and the Governor are both, naturally, concerned with this problem. I hope that, when the Employment Bill is published, it will be seen that it will start to rectify some of the things hon. Member's have in mind.
    Mrs. Slater: Does not the Minister think that this is a matter of great urgency and one touching the honour of our own country? Is not it a real disgrace to this present generation that we allow women to have to work thirteen hours and more a day? Can it be treated as a matter of urgency?
    Mr. Profumo: Certainly, it requires to be treated as a matter of urgency, but this is not a matter which the Governor who is giving a full report, can deal with in a few days. It is a matter which requires very careful consideration, and I hope that the hon. Lady the Member for Stoke-on-Trent, North (Mrs. Slater) and other hon. Members will remember the very exceptional economic conditions existing at this stage in Hong Kong.
    Mr. Patrick Maitland: Will my hon. Friend publish in the OFFICIAL REPORT figures showing the comparable conditions in the neighbouring Communist Republic of China and in Japan?
    Mr. S. Silverman: Will the Minister bear in mind that this is a British problem as well as a Hong Kong problem and that, when he talks about exceptional eonomic conditions in Hong Kong, he should bear in mind that, as a result of those conditions, economic conditions in Lancashire are rapidly becoming exceptional too? Will he endeavour to see what

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    relationship there is between the hours and the figures which he himself has given and the importation of goods produced under those conditions into Lancashire which is causing our own Lancashire cotton industry to bleed rapidly to death?
    Mr. Profumo: I would ask the hon. Gentleman to remember what he himself has just said and to understand that this is a British problem, whether one regards it from the Lancashire end or from the Colonial end. The people of Hong Kong are just as much the responsibility of the Government as the people of Lancashire.
    Mr. Callaghan: Is the Under-Secretary aware that it is because we regard them as part of our charge that we are interested in this matter? When does he expect this Bill to be produced? Can he give an undertaking that it will provide for a substantial reduction in the maximum number of hours worked?
    Mr. Profumo: No, Sir; I am afraid that I cannot give any undertaking. I did indicate that it was in its early stages, but I am quite certain that the discussion we have had now will be fully reflected to the Governor and Government of Hong Kong.
    Dr. Summerskill: In view of these shocking revelations, will the Minister at least give an undertaking that he will ask the Governor to prohibit women in an advanced stage of pregnancy working the maximum hours?
    Mr. Profumo: That is a matter which I should like to consider. Perhaps the right hon. Lady will put it down as a separate Question.

  RHODESIA AND NYASALAND

    Passports (British Protected Persons)
    Mrs. Castleasked the Secretary of State for the Colonies whether he will make a statement on the results of the discussions between the Governments of Northern Rhodesia, Nyasaland and the Federation on the issue of passports to British protected persons in the Federation.
    Mr. Lennox-Boyd: The proposed discussions have not yet taken place.
    Mrs. Castle: Is the Coloniel Secretary aware that we on this side of the House are very anxious about this question and about the doubt which a previous Answer has thrown on the rights of protected persons in this area? How soon will he be able to make this important statement?
    Mr. Lennox-Boyd: I am very conscious of the interest which the House as a whole takes in this matter, and I will give an Answer as soon as I possibly can.
    Mr. Speaker: Mr. Stonehouse—Question No. 28.
    Mr. J. Johnson: On a point of order. May I ask Question No. 23?
    Mr. Speaker: I understand that that was answered with Question No. 13.
    Mr. Johnson: I was not allowed to ask a supplementary question on that. May I ask one now?
    Mr. Speaker: We have dealt with that Question.

  THE WEST INDIES

    Federal Capital
    Mr. Royleasked the Secretary of State for the Colonies if there is any further development with regard to the proposed West Indies capital at Chaguaramas.
    Mr. Lennox-Boyd: The Federal Prime Minister made a statement in the House of Representatives yesterday afternoon. He said that the United States Government were willing to give an assurance that they would review the whole question of evacuating Chaguaramas after ten years in the light of any changes in methods of warfare which might make it unnecessary for them to retain it. He added that the Federal Government were prepared to accept that assurance.
    Mr. Royle: While thanking the right hon. Gentleman for that reply, may I ask him, if the Government of the Federation are taking that line, whether Her Majesty's Government will look at this matter wtih a very definite bias in favour of the West Indies Government rather than of the United States?
    Mr. Lennox-Boyd: Replying about the technical report, I had no option but to make the views of Her Majesty's Government clear. That seemed to me to be

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    absolutely inescapable. I think that our sights should all now be directed on the future. The whole matter of the Federal capital is to be debated in the Federal Assembly in Trinidad tomorrow, and I therefore think that it would be wise to withhold further comment until we see the outcome of their deliberations. I need hardly add that the well-being of the people of the West Indies is very close to the heart of the British Government.
    Mr. Royle—
    Mr. Speaker: Order. I think that the hon. Member intends to raise this matter on the Adjournment tomorrow.
    Mr. Royle: That is another matter.

  COLONIAL TERRITORIES

    Doctors
    Mr. Blenkinsopasked the Secretary of State for the Colonies whether he is aware of the shortage of doctors in the Colonial Service; and what steps he is taking to encourage young doctors from Great Britain to take appointments in the West Indies and other colonial territories.
    Mr. Profumo: I am well aware of the constant demand for doctors in the Medical Departments of the overseas territories, which my right hon. Friend is doing his best to meet. Vacancies in the West Indies and other territories are advertised in the professional journals as they are notified. In addition, special arrangements have been made to allow applications from young doctors to enter the Colonial Service as an alternative to National Service.
    Mr. Blenkinsop: Will the hon. Gentleman consider having some consultations with the teaching hospitals to see whether any kind of guarantee can be given to young men entering for temporary service that their chances of promotion in this country are not thereby spoiled?
    Mr. Profumo: That is something I should like to look at.
    Mrs. Jeger: Can the hon. Gentleman bring this problem more closely before his right hon. Friend the Minister of Health, who, not long ago, received a report from a Committee which suggested that there should be a limitation on the intake of medical students because of the
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    danger of the profession becoming overcrowded? Surely, if the problem is brought before the Minister of Health, he might take a different view of the standard of medical education in this country?
    Mr. Profumo: In so far as it affects my right hon. Friend the Minister of Health, the hon. Lady had better put a Question down to him. I should like to make it clear that there is no overlapping, and that there is the closest co-ordination between our two Departments on this important matter.

    Co-operative Societies
    Sir R. Robinsonasked the Secretary of State for the Colonies the number of co-operative societies in the Colonies, their membership and owned funds in 1951 and 1956, respectively.
    Mr. Profumo: In 1951 there were 3,799 societies with 426,000 members. Their owned funds—paid up share capital and reserves—amounted to £2,682,000 or £6 5s. per member. In 1956 there were 7,844 societies with 1,022,000 members. Their owned funds amounted to £12,220,000 or £11 16s. per member.

  CAMEROONS

    Development Corporation (Finance)
    Colonel Beamishasked the Secretary of State for the Colonies if he has completed his inquiries into the future financing of the Cameroons Development Corporation; and if he will make a statement.
    Mr. Profumo: This is primarily a matter for the local authorities, and my right hon. Friend is not directly concerned at this stage. I am afraid I have nothing yet that I can add to the Answer I gave my hon. and gallant Friend on 20th March last.
    Colonel Beamish: Is my hon. Friend aware that very important improvements and developments planned by the Cameroons Development Corporation have been hanging fire for quite a long time? Is he therefore aware that an early decision would be very welcome?
    Mr. Profumo: Indeed, I am aware of that. I am also aware that the local authorities are fully aware of these relevant considerations.

  NIGERIA

    Minorities Commission (Report)
    Colonel Beamishasked the Secretary of State for the Colonies when he expects to be able to complete his study of the report of the Willink Commission that has recently been studying minority problems in Nigeria; to what extent their investigations covered the British Cameroons; and what will be the constitutional procedure before adopting or rejecting any proposals for alteration in the present regional boundaries.
    Mr. Lennox-Boyd: I have not yet received the report of the Minorities Commission, but I expect to do so within the next two months. The Commission held public sessions in the Southern Cameroons. The report will be considered at the resumed Constitutional Conference due to be held later this year.
    Colonel Beamish: May I ask my right hon. Friend if he has any timetable in mind, in view of the fact that if there is to be any radical change in regional boundaries, this would have a very important effect on the federal elections, which cannot, presumably, be more than eighteen months hence?
    Mr. Lennox-Boyd: I am very conscious of the timetable difficulties, and I hope that, at the first stage, anyhow, the report will be available in time for it to be properly considered before we have the resumed conference. I have that fact very much in mind.

  ADEN

    Yemeni Forces (Arms)
    Colonel Beamishasked the Secretary of State for the Colonies what reports he has received from Aden about the use by Yemeni forces of newly-acquired arms and military equipment during recent attacks on Aden territory; whether the source of these arms, &c., is known; and what protest he is contemplating making about these acts either through the United Nations or direct to the countries concerned.
    Mr. Lennox-Boyd: Last year substantial shipments of arms from the Soviet bloc were delivered to the Yemen and
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    some of this equipment, including mortars and heavy machine guns, has been used on the frontier. As my right hon. and learned Friend the Foreign Secretary told the House on 24th July, 1956, the policy of Her Majesty's Government has always been to urge restraint in arms deliveries to the Middle East but arms deliveries do not in themselves constitute grounds for protest. Her Majesty's Government have of course reported to the United Nations acts of Yemeni aggression on the frontier and have protested to the Yemeni Government.

  EAST AFRICA

    Malnutrition
    Mrs. Butlerasked the Secretary of State for the Colonies if he will consider the setting up of a nutrition department under the auspices of the East African High Commissioner for the purposes of food and food consumption research, diet improvement and propaganda, and to co-ordinate the various activities undertaken to counteract malnutrition among children and adults in Uganda, Tanganyika, Kenya and Zanzibar.
    Mr. Profumo: Co-ordination of such activities is already the function of the East African Council for Medical Research, under the auspices of the East Africa High Commission, aided in particular by two High Commission services, the East African Institute for Medical Research and the East African Statistical Department. A big contribution is also being made by the Infantile Malnutrition Research Unit run by the United Kingdom Medical Research Council in Uganda with the co-operation of the local and High Commission authorities.
    Mrs. Butler: While thanking the Under-Secretary for that reply, may I ask him if he appreciates that this problem of protein malnutrition in these territories, particularly among children, is of fundamental importance, and is one in which even greater Government sponsorship and co-ordination of nutrition investigations are urgently needed if the problem is to be overcome?
    Mr. Profumo: I agree with the first part of the hon. Lady's supplementary question, but I do not think I agree that

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    there is not enough co-ordination. Perhaps when the hon. Lady reads my Answer, she will agree that this matter is being carefully looked after.

  PRIME MINISTER (VISIT TO UNITED STATES AND CANADA)
  Mr. Stonehouseasked the Prime Minister whether he will make a statement on his discussions with the President of the United States of America and the Prime Minister of Canada.
  Sir I. Fraserasked the Prime Minister if he will make a statement about his visit to the United States of America.
  The Prime Minister (Mr. Harold Macmillan): During my recent visit to the United States, in addition to delivering two public speeches, I was able to have some very full private discussions with President Eisenhower, and with the United States Secretary of State. We issued no communiqué at the end of these talks because they had not a formal character, nor did we feel the need to agree a formal record. Indeed, the object of our talks was to exchange views rather than to reach specific decisions on particular subjects.
  We did, in fact, discuss most of the major problems of the day and I am glad to say that I found that the views of Her Majesty's Government and the United States Government were closely in accord.
  In Canada I had the opportunity of several discussions with the Prime Minister of Canada as well as with other Canadian Ministers. I also had the honour to address both Houses of the Canadian Parliament and I was invited to attend a meeting of the Canadian Cabinet. In Ottawa, as in Washington, I did not seek specific agreements but wished rather to discuss with the Canadian Prime Minister and his colleagues various matters of mutual concern. In particular, we discussed the forthcoming Commonwealth Trade and Economic Conference. I am glad to be able to tell the House that our views coincided.
  Mr. Stonehouse: I thank the Prime Minister for that reply, but will he say what agreement was reached on the sharing of atomic and defence secrets and
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  to what extent this will prevent the duplication of research work and the continuation of our own country's senseless H-bomb tests?
  The Prime Minister: That matter depends, of course, upon legislation now before Congress.
  Sir I. Fraser: Has not my right hon. Friend's visit done a great deal to enhance British prestige? On the economic side, was the broadening of the basis of world trade one of the matters which he discussed, including particularly the raising of the price of gold?
  The Prime Minister: We discussed not the last question but the broad question of how to increase world trade and how to make sure that the increased trade would have a sufficient base of credit to finance it.
  Mr. Grimond: Is there to be a follow-up on the discussions which have taken place on the possibility of broadening the base of credit and also strengthening the machinery for international economic co-operation generally?
  The Prime Minister: Yes, Sir, but that, of course, would work through the normal international instruments.

  UNITED KINGDOM AND U.S.S.R.
  Mr. Doddsasked the Prime Minister, in view of the invitation to visit Moscow given to him by Mr. Khrushchev when in London last year, why this has so far not taken place; if the invitation is still open; and when he anticipates it will be possible for him to go to Moscow.
  The Prime Minister: The hon. Member will have seen the reply which I made to the hon. Member for West Ham, North (Mr. Lewis) on 25th February. At present, I have nothing to add to that Answer.
  Mr. Dodds: Does the Prime Minister appreciate that many people are concerned that he can visit Washington and, possibly, go to see General de Gaulle in Paris and yet not go to Moscow? Why is it that the Prime Minister seems to be satisfied with leisurely letter writing when it is now known that twelve nations are

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  hot on the trail of H-power and H-bombs and that more and more scientists are frantically engaged on total destruction?
  The Prime Minister: I should not regard a visit to Washington and a visit to Moscow as on precisely the same basis.

  GENERAL DE GAULLE (PRIME MINISTER'S VISIT)
  Mr. Biggs-Davisonasked the Prime Minister when he will meet General de Gaulle.
  The Prime Minister: As already announced, I have accepted an invitation from the Prime Minister of France to visit him on 29th and 30th June. I shall be accompanied by my right hon. and learned Friend the Foreign Secretary.
  Mr. Biggs-Davison: Is not it a very good thing that the Prime Minister should be visiting General de Gaulle—
  Mr. Ellis Smith: Who elected de Gaulle?
  Mr. Biggs-Davison: —after his visit to President Eisenhower and to Her Majesty's Government in Canada, for cannot Britain and France together play a great part in bringing about a better balance of world affairs—[HON. MEMBERS: "Like Suez?"]—yes, after Suez—particularly in so reshaping the Atlantic Alliance that it becomes the means not of undermining but of upholding the sovereignty and overseas interests of its European members? Will my right hon. Friend consider discussing the concept of interdependence with General de Gaulle because, if interdependence means anything, it means American acceptance that Algeria is French and Cyprus British?
  The Prime Minister: I think that this visit to Paris is timely and I hope that it will be useful. The House may recall that I have always felt that we ought to keep close relations with the French Government. I visited M. Mollet shortly after I became Prime Minister and M. Gaillard shortly after he became Prime Minister. Similarly, we have had visits from them over here. I feel sure that that is the right thing to do and I think that the House as a whole will agree.

  ART COLLECTIONS AND MUSEUMS
  Sir R. Boothbyasked the Prime Minister whether, in view of recent expressions of public concern, he will reconsider his decision not to hold an inquiry into the methods by which public funds are at present allocated to the arts.
  Mr. K. Robinsonasked the Prime Minister if he will consider the setting up of a body on the lines of the University Grants Committee to co-ordinate the requirements of the national art collections and museums, and to allocate among them such assistance as the state is able to provide, preferably on a quinquennial basis.
  The Prime Minister: The Standing Commission on Museums and Galleries already co-ordinates requirements and recommends priorities for the national art collections and museums. On the wider question I do not think a general inquiry is called for.
  Sir R. Boothby: Has the Prime Minister's attention been called to the Romanes Lecture of Lord Bridges? In view of the vast experience of Lord Bridges in these matters, will the right hon. Gentleman give his proposals made in the Romanes Lecture very serious consideration?
  The Prime Minister: I cannot say that I have read the full text of the lecture; I have other things to do. But I have got to know of what was in his mind and I have a summary of it. I will think further about the matter, but frankly I do not feel that a full inquiry of the kind envisaged is likely to be the best machinery.
  Mr. Robinson: Is the Prime Minister aware that there is considerable dissatisfaction among those concerned, not only about the volume of State assistance to the arts, but about the method of allocation? Is he aware that this idea of Lord Bridges was canvassed by some of us in this House two or three years ago, and in view of the fact that Lord Bridges' advice has been accepted on frequent occasions by Governments in the past, will he reconsider this matter as one of great urgency?
  The Prime Minister: I do not think I can agree to reconsider it, but I will certainly give it further attention if I can and discuss it with my colleagues.
  Mrs. White: Is not the right hon. Gentleman aware that the basis of allocating grants annually makes it impossible for the public to get really good value for the money that it spends and that only a quinquennial grant or something of that nature is regarded by those who study these matters as the satisfactory way of dealing with it?
  The Prime Minister: I will certainly consider something in the nature of a block grant, if that is what the hon. Lady means.
  Mr. Gaitskell: In view of the amount of concern shown in this matter, would the Prime Minister consider inviting Lord Bridges to meet him to discuss the whole problem with him?
  The Prime Minister: Of course, I shall be very happy to discuss it with Lord Bridges if he wishes to discuss it with me.

  EURATOM
  Mr. Masonasked the Prime Minister if he is aware that the United States Government are in the process of finalising an agreement with Euratom which will give them a much closer association with this organisation than Her Majesty's Government; and, in view of the urgent need for closer co-operation, when negotiations are due to start with Euratom at least to achieve technical collaboration which Her Majesty's Government have in mind.
  The Prime Minister: Preliminary discussions with Euratom in connection with the technical collaboration agreement, to which my right hon. Friend the Lord Privy Seal referred in reply to my hon. Friend the Member for Glasgow, Scotstoun (Sir J. Hutchison) on 22nd May are starting this week.
  Mr. Mason: While congratulating Her Majesty's Government on reaching agreement with Japan on the export of a nuclear power station, may I ask whether the Prime Minister is aware that we are lagging lamentably behind the Americans in obtaining nuclear power
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  station contracts in Europe? Are not we somewhat guilty of not treating Euratom with the importance that it deserves? Although I am obliged to the right hon. Gentleman for speeding up the conference, should not we be treating this matter with a greater degree of urgency with a view to making up some of the lost ground?
  The Prime Minister: As the hon. Gentleman will be aware, it is not merely a question of the relationship of this body, but, when it comes to commercial agreements, a question of the terms upon which they are made.

  CYPRUS
  Mr. Donnellyasked the Prime Minister whether he will now make a statement on Cyprus.
  The Prime Minister: I am making a statement on Cyprus at the end of Questions.

  LEGAL AID AND ADVICE
  Mr. Jannerasked the Attorney-General whether he is now prepared to extend the granting of legal aid to enable legal advice to be taken by persons of slender means.
  The Attorney-General (Sir Reginald Manningham-Buller): As he announced in a statement made in another place on 12th June, my noble Friend the Lord Chancellor has accepted proposals placed before him by the Law Society for implementing Section 7 of the Legal Aid and Advice Act, 1949. The proposals provide for solicitors in ordinary practice giving oral advice for a fee paid out of the Legal Aid Fund and my noble Friend intends, if sufficient solicitors indicate their willingness to undertake the work, to bring Section 7 of the Act into force towards the end of this financial year. He would expect to follow that by bringing Section 5, the remaining Section dealing with legal advice, into force in the next financial year.
  Mr. Janner: May I thank the Attorney-General for his reply and ask that the second portion of the scheme may be expedited?
  Mr. Jannerasked the Attorney-General whether, in view of the report of the Law Society on the operation and finance of Part 1 of the Legal Aid and Advice Act, 1949, he will amend Sections 2 and 3 of that Act so as to enable free legal aid to be given where the disposable income of an applicant is above £156, and to exclude from legal aid those persons whose disposable income is over £600 instead of £420.
  The Attorney-General: My noble Friend the Lord Chancellor has reluctantly decided that he cannot at present revise the financial provisions of the Legal Aid Scheme, but he will see what can be done when the Legal Advice Scheme is in operation.
  Mr. Janner: Is the Attorney-General aware, as I am sure he must be, that the provisions as they now stand are making it extremely difficult indeed for litigants of slender means to pursue their cases, that very large demands are being made upon them for payments which they cannot bear and that in many cases they have to reject all assistance and do the best they possibly can with help from friends in order to pursue their cases? Will the right hon. and learned Gentleman look at the matter again?
  The Attorney-General: My noble Friend is, of course, aware of the views expressed by the Advisory Committee on these matters.

CYPRUS
The Prime Minister (Mr. Harold Macmillan): With permission, Mr. Speaker, I will make a statement on Cyprus.
As the House knows, an undertaking was given by my right hon. Friend the Colonial Secretary on 19th May that a detailed statement of the comprehensive policy on the Cyprus problem which the Government had prepared during recent months should be made not later than today.
In preparation for this, the policy has been fully explained to the Turkish and Greek Governments. It has also been put before the North Atlantic Treaty Organisation Council and yesterday afternoon there was a full and helpful discussion during which our efforts to find
898
a new basis for a solution received general recognition.
As a result, M. Spaak, on behalf of the Council, conveyed to Her Majesty's Government last night the strong request to postpone for 48 hours their parliamentary statement in the belief that this short delay would be of advantage.
I trust that the House will feel that we have done right, in all the circumstances, in acceding to this request. I recognise the great forbearance which the House as a whole has shown on this matter.
I also have in mind the definite undertaking that a full statement would be made not later than today; and we had already made arrangements for a debate next week. Nevertheless, I did not feel that we could turn a deaf ear to the plea of our Allies in the North Atlantic Treaty Organisation, nor do I think that any opportunity should be neglected which might lead to a settlement.
I shall, in any case, make a statement on Thursday in the light of the progress made.
Mr. Gaitskell: As the House is aware, we have on many occasions in the past proposed that the question of Cyprus should be put to the North Atlantic Treaty Organisation and we are glad that at this last moment, at least, that step has been taken. In view of the request from M. Spaak, on behalf of the Council, I think that the Government had no option to defer the statement, as requested, for a further 48 hours. At the same time, the Prime Minister will be aware that various accounts of the Government's plan are appearing in the Press and I am sure that he will be ready not only to give us a report on progress, but, I would hope, also to indicate, at least in broad terms, the Government's plan when he makes his statement on Thursday.
Viscount Hinchingbrooke: Is my right hon. Friend aware that according to Press reports he has secured the acquiescence of the United States in the proposals of Her Majesty's Government for the future of Cyprus? In these circumstances, would it not be believed that any lengthy interrogative—I do not care to use a harsher term—by a Power complex in Europe,

899
however friendly to this country, would be damaging to the prestige of the United Kingdom?
The Prime Minister: I am grateful to the Leader of the Opposition, whom I consulted last night as soon as I had this appeal brought to me.
In reply to the noble Lord, I would say this. We are members of an alliance which most of us regard as vital for the defence of the West. An unhappy dispute exists between two of its members and, in a sense, ourselves. When, as a result of this discussion, which, I believe, was being continued this morning, an appeal was made to me to say that the work that they could do might be helpful in smoothing out some of the differences, with perhaps a good chance of doing good, I felt it right to ask the House, as I now do, to give me this authority.
I know that it is asking a great deal and one has to weigh the disadvantages of general leaks and matters appearing in the Press on the detail of our policy against what seems to me to be the great advantage of the sympathy and general good will of our allies and their assistance in helping us in the work of conciliation to which we are about to put our hands.
Mr. H. Morrison: Has the Prime Minister observed—presumably he has—what appeared to be circumstantial accounts in the Press this morning, in a number of newspapers, of the Government's intentions before Parliament has been informed? Can the right hon. Gentleman throw any light upon these accounts as to whether there was any leak?
The Prime Minister: In the course of these negotiations and discussions, a great deal is known to a great number of people. I have asked the House to see my difficulty. I would much have preferred to make my statement today and to take the House into the confidence which it ought to have. On the other hand, when an appeal of that kind is made, to which there are such obvious possible advantages; I felt it my duty, which I hope the House will support, to accept the embarrassment of another two days' delay for the great gain of good will, at least, that we have received from the great mass of the peoples of Europe.
Mr. Grimond: Can the Prime Minister confirm that this request from M. Spaak appears at least to have the acquiescence, if not the agreement, of all the members of the N.A.T.O. Council? Secondly, is it still the intention to hold a debate next week? If so, can the Prime Minister say when it will be held and for how long, whether one or two days?
The Prime Minister: M. Spaak spoke upon what he called the general consensus of view in the Council and to that I felt it right to yield.
The question of the debate will, no doubt, be discussed through the usual channels and arranged for the day that is most convenient to Members on both sides of the House.
Mrs. L. Jeger: While the right hon. Gentleman is asking the forbearance of the House, which, once again, is being accorded to him, would it not be appropriate for him also to ask the Greek and Turkish Governments for their forbearance for another 48 hours, especially in view of the inflammatory and inaccurate broadcasts which are being put out by Radio Ankara, which are having a very unhappy effect in Cyprus?
The Prime Minister: The situation is really this. In accordance with the plan that we have developed, we had arranged to discuss this matter with the N.A.T.O. Council and put our plans before it. I had intended today to give the full account to the House. Our position, therefore, for the next 48 hours is that we have rather left it to our colleagues in the Council to see what help they can give in the work of conciliation. I think that it would be wiser for me and for Her Majesty's Government to leave that task for the moment to those nations which are willing to undertake it.
Mr. Benn: Can the right hon. Gentleman say at what stage, if any, he proposes to consult the Cypriots themselves about their own future?
The Prime Minister: The Governor has, of course, been in touch with the representatives of Cypriots on this very policy.
Mr. Brockway: Is the Prime Minister aware that there will be little objection in any part of the House to a postpone-

901
ment if it will assist the settlement of the tragedy of Cyprus? May I, however, ask him whether he will have consultations with representatives of the Cypriot people, both the Greeks and the Turks, before he brings forward a final proposal for our endorsement?
The Prime Minister: As I have said, the Governor has been authorised to discuss the details of our policy, in broad terms, with representative Cypriots, both Greek and Turk. I should not like to accept a suggestion which would lead to a still further postponement. I agreed, however, to this suggestion—and I am grateful to the House for its general view that it was the right course to take—last night when I received this message, but I would not, and could not, agree to a perpetual postponement from day to day which would probably not serve the purposes which our allies have in mind. What they want to do is to use an interval to be helpful in any way they can.
Mr. Bevan: Whatever may be the merits of the Government's proposals, is it not desirable that the members of the N.A.T.O. Council should exert themselves in the meantime so as to provide at least a more pacific atmosphere for the
902
reception of the proposals than might occur if they were announced today?
The Prime Minister: On receipt of this communication from the Secretary-General, representing the general views of the Council, I felt that it would be right to leave in his hands, and in the hands of his colleagues, the best course they can take in the purpose to which they have set themselves.

NEW MEMBERS SWORN
Ernest Alan Fitch, esquire, for Wigan.
Leslie Spriggs, esquire, for St. Helens.
Michael Antony Christobal Noble, esquire, for Argyll.

BILL PRESENTED
  STATE OF SINGAPORE
  Bill to provide for the establishment of the State of Singapore and for the peace, order and good government thereof; and for purposes connected with the matters aforesaid, presented by Mr. Lennox-Boyd; supported by Mr. Profumo and Mr. Alport; read the First time; to be read a Second time upon Monday next and to be printed. [Bill 131.]
ORDERS OF THE DAY

  FINANCE BILL
  Considered in Committee [Progress, 12th June.]
  [Sir CHARLES MACANDREW in the Chair]

  FINANCE BILL

    Clause 12.—(INCREASE OF PERSONAL RELIEFS.)
    3.45 p.m.
    The Chairman: The first Amendment to Clause 12 which is selected is on page 2861 of the Notice Paper, in page 7, line 21, at the end to insert a new subsection (3). The Amendments which precede it on the Notice Paper are relevant to new Clauses. I will give hon. Members the numbers of the Clauses if they want them.
    Mr. Douglas Houghton: Do I understand, Sir Charles, that it was your wish that in debating this Amendment we should associate with it the fourth Amendment on the same page, page 7, line 27, at the end to insert:
    "and for references to sixty pounds (which relate to the amount of the relief) there shall be substituted references to seventy-five pounds"
    and the penultimate Amendment on the following page, in page 7, line 27, at the end to insert:
    (4) In section two hundred and seventeen of the Income Tax Act, 1952 (Claimant depending on services of a daughter), for the reference to forty pounds (indicating the amount of relief) there shall be substituted a reference to fifty pounds.
    The Chairman: "Penultimate" is not quite the right word, because there are three other Amendments after that, but I know which one the hon. Member means.
    Mr. Houghton: I beg to move, in page 7, line 21, at the end to insert:
    (3) In sections two hundred and fourteen and two hundred and fifteen of the Income Tax Act, 1952 (which refer respectively to a person taking charge of widower's or widow's children or acting as his or her housekeeper and to a relative taking charge of unmarried person's young brother or sister) for the references to sixty pounds (which indicate the amount of relief) there shall be substituted references to seventy-five pounds.
    This is an Amendment to increase the tax relief for a taxpayer who has a housekeeper. This is the third time that I have moved an Amendment to the same effect. I did so in 1952, when the housekeeper allowance stood at £50, and in
    904
    1953, when the Chancellor proposed to increase it to £60 and we on these benches moved to increase it to £75. I cannot see why it is that I have to be the champion of taxpayers who have housekeepers. We now have a Chancellor who ought to be championing them. Recently, he said that he was in favour of wives being treated properly, which, in a bachelor, is a noble sentiment. I am sure that he is equally in favour of taxpayers who have housekeepers being treated properly. That would be a noble sentiment in the Chancellor too, because as the law stands the bachelor cannot claim the housekeeper allowance unless he has the custody of younger brothers or sisters who qualify for a child allowance.
    The history of this allowance has been stated in earlier speeches on this subject. It began in 1918. In 1920, the allowance was raised to £45, when the additional personal relief for a wife was £90. In 1924, it was increased to £60, when the wife relief still stood at £90. In the crisis Budget of 1931 the housekeeper relief was reduced to £50 and the wife allowance reduced to £50, also. Then the housekeeper allowance remained at £50, until 1953, by which time the wife allowance had risen to £90 a year once more.
    The wife allowance has since become £100, the difference between the single personal relief of £140 and the relief for a married man of £240. That was done in 1955. The housekeeper allowance remains the same at £60. So these two facts emerge: first, that the allowance for a housekeeper is just the same as it was thirty-four years ago; and, secondly, that whereas it is now two-fifths of the allowance for a wife, it was a higher proportion of the married allowance thirty-four years ago. We propose that it should now become three-quarters of the allowance for a wife.
    In our search for grounds upon which these personal reliefs may be adjusted from time to time, we naturally turn to the report of the Radcliffe Commission on the Taxation of Profits and Income to see whether that Commission laid down any principles in the matter. We find that it not only failed to do so but, in fact, failed to find any. In paragraph 209 of its second Report the Committee will see that the Radcliffe Commission was of opinion that, in the main, the adjustment of these personal reliefs was largely a budgetary matter, and not one upon

    905
    which principles of abstract justice or other theoretical questions could be laid down. So there is nothing really to guide us in the principle of the matter; we can only use our best judgment of what seems to be right taking one personal relief with another.
    Nor do we find that in the past Chancellors have found it necessary to adjust all the personal reliefs at the same time, because in 1952 the married allowance was increased but not the housekeeper allowance. In 1953, the housekeeper allowance was increased, but not the married allowance; and in 1955 the married allowance was increaed again, but no corresponding increase was given in the housekeeping allowance. So if one is to look at the sequence of adjustment of personal reliefs, one might say that the turn of the housekeeper allowance has now come.
    I do not know what would be the cost of this improvement in the housekeeper relief. The best estimate I can make is that there are between 200,000 and 250,000 housekeepers in respect of whom taxpayers claim this relief. Basing some calculations, however imperfect, on Table 21 on page 50 of the one hundredth Report of the Commissioners of Inland Revenue, my estimate is that the cost of this increased relief would be about £500,000 for a full year. I may be wrong and possibly the Financial Secretary will have a more accurate estimate than that.
    There are obvious arguments in favour of a liberal relief for a housekeeper, bearing in mind that this relief is granted only to widows and widowers with or without young children to take care of. There has been some difference of opinion as to whether this allowance should be granted to widows and widowers without young children, and the Royal Commission has something to say about this. Its conclusions were unfavourable to the continuance of the allowance for widows or widowers who have no young children. It thought that their position was really indistinguishable from many single persons with households, who, therefore, might feel moved, owing to their occupation or other circumstances, to employ a housekeeper.
    The Chancellor has not come forward with any alteration in the structure of the relief, and we feel that the small improvement we now propose could safely be
    906
    made, entirely without prejudice to reconsideration later of the principles underlying this relief and the conditions upon which it is granted. We on these benches realise that if the Chancellor wished to combine a higher relief for those with young children with the withdrawal of the relief from those without young children it would be necessary to await another time for any alteration to be made, since it could scarcely be made as an Amendment of the Clause from this side of the Committee. We feel, however, that the Chancellor may be able to accede to the proposal for a small improvement in the housekeeper relief.
    Housekeepers are difficult to come by in present circumstances. Those who have not relatives willing to act must employ housekeepers, and it could scarcely be said that tax relief of £60 a year is any compensation for the additional expense involved. I realise that none of these reliefs can really be equated to the amount of actual expenditure on the part of the taxpayer. Various authorities have said in the past that they are merely part of the graduation principle of our Income Tax and that they are a recognition of different degrees of family responsibility, imposing different burdens on taxpayers which may ultimately affect their ability to pay.
    Linked with this Amendment, Sir Charles, is the one which is to be found last but three on page 2862, and perhaps I may be permitted to say a word or two about it. In a way this is linked with the housekeeper relief, though the circumstances of granting it are different and the amount is also different. This has been debated before and, more recently, on 11th June, 1953, when my hon. and learned Friend the Member for Edge Hill (Mr. A. J. Irvine) moved an Amendment to increase the allowance from £25 to £40. I am glad to say that this was one of the occasions when the Chancellor was in an accommodating mood and the Amendment was accepted. So, since 1953, this allowance has been £40. Prior to that, it was £25 and had not been altered for thirty years.
    This relief, which I am sure must be granted comparatively rarely today, is granted to an aged or infirm taxpayer who maintains a daughter to look after him. I can find no figures which show how many people are in receipt of this

    907
    relief. I am sure that the numbers must be small. The cost of granting a modest improvement from £40 to £50 would, I suggest, be negligible. Here again, when a relief has not been increased for thirty years, and then only from £25 to £40, we think that some upward adjustment is now due.
    Finally, linked also with this Amendment is the relief granted to a taxpayer who maintains a dependent relative. There is nothing necessarily in common between housekeepers and dependent relatives. What they do have in common, however, is that the amount of relief is the same, though that is not to say that it need necessarily remain the same, and from these benches on an earlier occasion we moved an Amendment to improve the housekeeper allowances, without moving an Amendment to give a corresponding increase to those who maintain dependent relatives.
    This relief stands at £60, having been increased from £50 in 1953. Since then, the upper limit of income of the dependent relative in respect of whom the relief may be claimed has been raised from time to time to take account of the upward movement of the National Insurance retirement pension. There is a big difference today between the upper income limit of the dependent relative who still qualifies for relief and the upper income limit of the dependent relative when the relief was first introduced.
    4.0 p.m.
    It could be argued that lifting the relatives' income ceiling every time the National Insurance pension has been increased is a form of compensation for the fall in the value of money. Had this limit not been increased in this way many claims would have become invalid on the raising of the retirement pension. But since the higher retirement pension is mainly to meet the increased cost of living, I think it just and proper that the income limit of the dependent relative should be raised in the way that the Chancellor has raised it in the past and again proposes to raise it in Clause 12.
    Although that is of benefit to taxpayers, in our view it does not replace the need for a small improvement in the amount of the relief itself. Here again, the Radcliffe Commission, in its second Report, had some comments to make on the
    908
    nature and conditions of granting this relief, but we think that, failing proposals to alter the structure of the relief, a small improvement is appropriate in the meantime.
    I cannot say that the cost would be extremely small. There appear to be many more dependent relatives than housekeepers, and on my calculations it is likely that the cost of meeting the improvement for dependent relatives might be just short of £3 million. That, again, is the roughest estimate.
    I am aware that there are features about this relief which perhaps before long may need attention. For example, there is the growing number of claims on behalf of persons now resident and working in this country who claim to be maintaining dependent relatives overseas. Those claims are not free from difficulty from an administrative point of view, but in making this proposal it is not our purpose to discriminate between one type of claimant and another. It is the duty of the Inland Revenue to see that those who make claims satisfy the Income Tax Acts and prove that they are doing what they declare themselves to be doing in maintaining their dependent relatives.
    Those are the three Amendments which are linked. We on these benches are not saying to the Financial Secretary that it is all or nothing. We are willing to concede to him the right to select which of these reliefs he feels able to make. We hope that he will be able to make a move towards our wishes in this matter. Surely the concessions in the Finance Bill cannot be confined to functional buttons, whatever the Chancellor's interest in them may be, to clogs, whatever my constituency interest in them may be, or to shopping baskets, whatever may be the lack of interest in them among men in the Committee. I therefore hope that now that we have come to a change of scene, now that a new team comes on to bowl, we shall get some concession from the Chancellor on these personal reliefs.
    Mr. Ronald Bell: I hope that the proposals which have been outlined will have sympathetic consideration by the Financial Secretary. They are not unfamiliar proposals at this stage of a Finance Bill and it seems to me that, on principle, they have a certain amount of merit.

    909
    The idea of the system of allowances is to ensure that a man's assessable income is based upon a due regard of the burdens which he has to carry, and in that respect there can be little doubt that the burden of a man who has to have a housekeeper to look after his children is assessed too low at present. I have always said that if a man's wife dies, and he has to engage a housekeeper to look after his young children, it costs him more than if his wife were still alive. Since the allowance for a wife is £100, it seems extremely modest and reasonable to suggest an allowance for a housekeeper of £75.
    Equally, the allowance for a daughter upon whose services the taxpayer is dependent is assessed too low at its present figure if one compares it with the existing allowances for a wife and for children. I do not think that the case for other dependent relatives is quite as strong as in those two cases. Indeed, the hon. Member for Sowerby (Mr. Houghton) recognised some degree of merit in the three proposals which he put forward and said that he thought that they differed somewhat among themselves.
    I feel that the stronger merit lies in the case of the taxpayer who needs a housekeeper to look after dependent children and I believe that the Government would be making a valuable concession if they made a concession limited to that class of case. It is true that at the moment the housekeeper allowance is not confined to such cases where there are dependent children, but there is no reason why a distinction should not be introduced in the amount of the allowance, depending on whether there are children.
    The hon. Member for Sowerby suggested that the Government might like to do a deal by dropping the housekeeper allowance where there are no children and using the funds thus released to increase the allowance where there are dependent children. That might introduce some injustice, but the Government might leave the allowance unchanged where there are no dependent children and increase it where there are. I am sure that if that were done a somewhat overdue adjustment would be made in these tax allowances.
    Mr. A. J. Irvine: I hope that the Government will give serious thought to the representations made in this matter from both sides of the Committee.
    If I may say so with respect, my hon. Friend the Member for Sowerby (Mr. Houghton) covered the ground with such cogency that not much remains to be said. As he pointed out, the Royal Commission has not assisted the Committee on this matter. For many years consideration of the appropriate relativity from the tax point of view of the wife and the housekeeper was dealt with by the Government by the expression of view that this was a matter particularly appropriate for consideration by the Royal Commission. The Royal Commission has now made its second Report and, as my hon. Friend has pointed out, since it has made no contribution to the problem the matter comes back here for consideration, and the best we can do is to apply common sense to our consideration of it.
    The Royal Commission said:
    "Since we cannot extract principles to bear upon the subject we do not think that we can usefully make recommendations upon it."
    It is in that void that the Committee now has to determine the common sense of the matter, and I suggest that it is that the allowance for a housekeeper should not, in principle, be less than that for a wife. Although my hon. Friend has not gone so far as to propose that, I suggest that that is the logic and common sense of the matter.
    The following factors are relevant in this connection. First, there is no reason to assume that a housekeeper will be less or more economical than a wife, or will give a greater or lesser proportion of her time to the care of the household. I would find it surprising if any Member on either side of the Committee felt inclined to argue the contrary of that proposition. The second factor is that the housekeeper is less likely than the wife to go out to work to add to the income of the household. She rightly regards herself as already employed, in her capacity as housekeeper. The wife who does not regard herself as the employee of her husband looks at the prospect of outside work somewhat differently.
    A further factor is that the sense of obligation of the housekeeper to the

    911
    household will normally be less than that of the wife, and this may well add to the financial burden of the taxpayer employing the housekeeper. A housekeeper may reasonably insist upon conditions of employment which cost money and which might be thought unreasonable if they were demanded by a wife. A housekeeper might say, "I will not stay if I cannot have a television set". That is a rather less startling proposition coming from a housekeeper than it would be coming from a wife. Bearing these points in mind, and remembering, also, that for a widower with young children it may be of the greatest importance, for the welfare of the family and his children, that a housekeeper should be employed, I ask the Government to give serious consideration to the matter.
    As I understand, we are also discussing the question of the services of a daughter. During the Committee stage of the Finance Bill of 1953 I had the honour to move an Amendment to raise from £25 to £40 the allowance for a claimant who was infirm and compelled to depend upon the services of a daughter. Somewhat to my surprise, and certainly to my great satisfaction, the Government accepted the Amendment. I hope that they will accept the proposal that the figure should be raised to £50.
    There are three limbs to this argument. The first, is that it is reasonable to take into account the fall in the value of money since 1953, when the last rise in this allowance was decided upon. The second is based upon a comparison between the history of this allowance and parallel allowances or reliefs. The relief in respect of the services of a daughter began as long ago as the Finance Act, 1920, and was dealt with, interestingly enough, in the Section that covered the case of dependent relatives. On the assumption—which the Royal Commission has since endorsed—that it was extraordinarily difficult to discover general principles which would cover these matters, it was nevertheless thought that there was a parallel to be drawn between these two classes of allowance and relief, which were contained in the same Section. In that Act the deduction in each case was £25.
    4.15 p.m.
    When the dependent relative allowance rose to £50 the allowance for the services
    912
    of a daughter remained unchanged, and it remained at its original figure for thirty-three years. Both the dependent relative relief and the allowance for the services of a daughter rose in 1953, but, overall, the case of a daughter rendering services has been comparatively hardly dealt with. This year, once again, help has been given in respect of the dependent relative, but no concession has been made to cover the cost of the services of a daughter.
    The second limb of my argument, as I have said, is therefore based upon the discrepancy which appears to exist in the circumstances that these reliefs, which started together on the same footing, have separated in the course of their history, to the detriment of the allowance for the services of a daughter.
    The third and final limb of my argument is that the logic of the changes proposed in the Finance Bill should lead the Government to accept the Amendments. I say that because the Chancellor, in his proposals, has shown a strong bent in favour of giving relief to the infirm and over-65s. This was a very prominent characteristic of his proposals. It is strongly arguable that it is disproportionate, but one can understand the considerations of humanity which have actuated him.
    The right hon. Gentleman no doubt recognises the fact that old age brings with it the loss of earning power and infirmity. The Chancellor has also shown his attention to this aspect of the matter by offering relief not only to the over-65s but in the case of the dependent relative, in which the element of infirmity also inserts itself. The logic and humanity of his approach should lead him to make a similar concession in the case of the services of a daughter. This allowance is claimable only by someone who is incapacitated by infirmity from taking care of himself and is compelled in all circumstances to fall back upon the services of a daughter.
    The element of infirmity in the claimant in this case is present in the same measure as a necessary ingredient as it is in those other matters in respect of which the Government propose to grant further relief. When the processes of logic reach conclusions which are gener-

    913
    ous they are surely hard to resist, and I hope that the Government will see their way to make concessions in this respect.
    The Financial Secretary to the Treasury (Mr. J. E. S. Simon): The hon. and learned Gentleman the Member for Edge Hill (Mr. A. J. Irvine) was, I think, a little less than fair to the Royal Commission when he said that its discussions of this matter had not really done anything to assist our debate. Although it is perfectly true, as the hon. Gentleman the Member for Sowerby (Mr. Houghton) pointed out, that the Royal Commission was unable to find any principle which would serve as a guide to the amount of the various personal allowances, which would include the three allowances that we have been discussing in this Amendment, it pointed out two things which are of value to the Committee in its discussions of these allowances.
    The first is that the allowances are not intended to act as estimates of the minimum subsistence cost to be incurred in relation to the object of the allowance. The hon. Member for Sowerby made that point and it is a perfectly true one. It was made by the Royal Commission and is of value in our discussion. The inference which I draw from that is that any rise or fall in the cost of living should not be automatically reflected in a change in the allowances.
    The Royal Commission went on to say—and this, I think, is even more valuable—that its real purpose, as was perfectly fairly pointed out by the hon. Members opposite, is to play a part in the system of gradation. That means that allowances must be viewed in relation to the other personal allowances which are not the subject of this Amendment, the main personal allowances, particularly the single person's allowance, the married allowance, and so on.
    It is quite right that if the Opposition want to alter one of these allowances they should seek to alter all of them. That seems to be sensible and logical. The hon. Gentleman was being skilful and wheedling in saying that we could pick and choose among them; but all the logic was in the original approach, in putting down Amendments which cover all these allowances together.
    So the main ground on which the Committee should reject this Amendment and
    914
    the others is that, in spite of the examples which the hon. Gentleman gave of the Amendments having been dealt with separately on occasions, they ought not to be dealt with separately from the main personal allowances. That was recognised when the hon. and learned Gentleman, a year or two ago, was persuasive enough to secure a concession from the Government that the daughters' allowance, if I may put it that way, should go up at the same time as the other two allowances that we have been discussing.
    Perhaps I should mention, by way of general introduction, what the cost of these Amendments would be. I think that the hon. Gentleman underestimated somewhat. I am advised that the cost of the three Amendments would be about £7 million in a full year, of which, as he pointed out, the main item is the dependent relative's allowance which would cost about £6 million in a full year, the housekeeper allowance costing about £750,000 in a full year.
    Having said that, may I deal, first, with the housekeeper allowance? There is a subsidiary reason why it would be a mistake to deal with that in the way sought by the Amendment that has been moved in that it is, as the hon. Member for Sowerby very fairly pointed out, in some respects a defective allowance. In logic, it ought to apply only where there are young children to be looked after, but, in point of fact, it goes beyond that.
    There are three cases which it covers. The first is where there is a widow or a widower who has a resident housekeeper, irrespective of whether or not there are young children. That is the anomalous condition. The second case is of the unmarried taxpayer who maintains a family relative to look after a young brother or sister who ranks for child allowance. Those are dealt with in the two provisions which the proposed Amendment seeks to amend.
    There is a third case, of which amendment is not sought, where the taxpayer has a resident housekeeper to look after a young child for whom he is entitled to child allowance under Section 218 of the 1952 Act. That is subject to riders into which I need not go. The hon. Gentleman is quite right when he says that the fact that it is mainly payable to the first of these cases in which there

    915
    is not the necessity to look after young children renders it an anomalous allowance.
    Mr. G. R. Mitchison: I am getting lost. The hon. and learned Gentleman said that it is mainly payable and the last thing he referred to was the Section 218 allowance, which is not covered by these Amendments. Would he make clear what he was talking about?
    Mr. Simon: When I said that it was "mainly payable," I meant to say that the housekeeper allowance was mainly payable, and most of the cases in which housekeeper allowances are paid are those, under Section 214.
    When the time comes for the reconsideration of the amount of the housekeeper allowance, which, as I suggest, ought to be in the context of a general review of the allowances, the condition that it is payable whether or not there are young children in the family would obviously have to be considered in the light of the views of the Royal Commission. My hon. Friend the Member for Buckinghamshire, South (Mr. Ronald Bell) suggested that any increase should be limited to that case, and, of course, the Royal Commission said that the allowance itself should be limited to that case.
    The next point is that the hon. Member for Sowerby compared the movements of the housekeeper allowance with the movements of the wife allowance; and the hon. and learned Member for Edge Hill went so far as to say that the general principle should be that the allowance for the housekeeper should not be less than that for the wife. With very great respect to him, I do not think that that is right. One must realise that there is no real basis for comparing the two. In the first place, the allowance for a married couple is not an allowance only for two people but for two incomes, since for Income Tax purposes the wife's income is aggregated with the husband's and the two incomes are added together and taxed as one. The housekeeper is, I think the hon. and learned Member for Kettering (Mr. Mitchison) suggested, in this respect some kind of domestic servant.
    4.30 p.m.
    Mr. Houghton: I hope that the hon. and learned Gentleman is not overlooking
    916
    the case of the working wife, who has a special wife's earned income relief which increases considerably the total of the personal reliefs given to the married couple. In Many cases the taxpayer's wife has no income at all, so relief is not given for two incomes but for two people. The housekeeper might be a relative or not. The whole argument is rather fallacious in that context.
    Mr. Simon: What the hon. Gentleman has said bears out my argument that it is impossible to compare the housekeeper allowance with the wife allowance, which covers two different sets of cases—one in which the wife is working and the other in which she is not. In the former case there are two sets of allowances available. On the other hand, one comes up against the fact that the Royal Commission said that where the wife is working the taxpayer is too favourably treated. I do not think that we shall find many married couples in which the wife is working who would give a very ready assent to that statement.
    I pass to the dependent relative allowance. I merely point out that persons who benefit from the allowance have also benefited by a series of liftings of the ceiling. Whenever the retirement pension has gone up, the ceiling of the relative's income has been raised to take advantage of that. That inures to the benefit of the taxpayer for whom the dependent relative allowance is available. It is extra income in his household.
    One must also remember, in comparing that allowance with the single and married allowance—as both the hon. and learned Member for Kettering and the hon. Member for Sowerby did—that the dependent relative allowance was doubled during the war whereas the single and married allowances were cut. In looking at the movements of these two sets of allowances since the war one must bear that in mind. I have dealt with the cost of it, which the hon. Gentleman asked me about.
    I need only say a word or two about the claimant who is dependent upon the services of a daughter. He is covered by the third of these Amendments. The hon. and learned Member must have been very persuasive in 1953 when he got the Government to accept his Amendment. We had not at that time the Report of the Royal Commission, so

    917
    whether he would have been equally successful after the Royal Commission had given its views on this allowance I do not know. They said—I have not the actual words, but I think I can summarise them in this way—that this was a completely anomalous allowance. It is the only one of our allowances which depends upon the disability of the taxpayer.
    Secondly, and even more strong, is the criticism made against the allowance on the ground that it is quite capricious in its incidence, because it depends upon the taxpayer having a daughter and upon the daughter being available to help to look after her father. I suppose I ought to declare an interest in this matter, since I have not succeeded in having anything but sons. There are many cases which would be quite as deserving as that which qualifies for this allowance. Therefore, the Royal Commission said that it thought the allowance ought to be withdrawn. It said:
    "It is, after all, no more than an accident that there should be a daughter available to live with and look after an aged or infirm person. To give an allowance to such a person and to withhold it from others whose infirmities have to be taken care of by other means is rather to create inequities between taxpayers who ought to be treated alike than to secure the equitable treatment of a satisfactory category of claimant."'
    It seems impossible to raise an allowance which has been criticised in that way.
    For all these reasons and, in general, because of the cost of these Amendments, and because when these allowances are dealt with they ought to be dealt with together, I cannot advise the Committee to accept the Amendments.
    Mr. Mitchison: The hon. and learned Gentleman is suffering from centipede trouble. He cannot decide which foot to move first, so he remains stationary. One might look a little bit further than that. I agree that we cannot regard these allowances as a logical arrangement and, certainly, nowadays we cannot regard them as indicating a satisfactory standard of subsistence to be obtained out of Income Tax allowances.
    I accept that the allowances may properly be regarded as part of a system of gradation, but that is only one side of the story. They can only form part of such a system if they recognise the burdens that are put upon particular taxpayers and if the resulting gradation is
    918
    intended in some degree to meet those burdens. The best indication we have had that these are, in a sense, exceptional cases is that with the exception of the dependent relative allowance the whole bunch could be covered for about £1 million.
    I hope that I have read this matter aright, but as I read it we are dealing with Sections 214, 215, 216 and 217 of the Income Tax Act. They cover five cases, of which three are cases in which the taxpayer has to carry a burden in the shape of a relative, young or old. Two are cases in which he himself has to be helped, by the resident housekeeper or the daughter. The first three cases relate to people taking charge of a widower's children, to an unmarried taxpayer taking charge of a young brother or sister, and to the dependent relative. They all relate to the discharge of obligations the moral character of which seems to entitle the taxpayer to some recognition, however illogical it may be. No doubt because of that, these allowances have worked their way into the system of taxation and now play this part in it.
    The hon. and learned Gentleman said that we could not alter these allowances every year. No doubt, but it so happens that, if I am right, the whole bunch were altered in 1953—and the same bunch. The allowances under Sections 214, 215 and 216—if he will excuse this very numerical method of summarising them—all went up from £50 to £60. The Section 217 allowance, which for a long period of years had remained at £25, went up to £40. That is five years ago now, and I should have thought that it was high time to look at the matter again.
    The Cohen Report, as it then was—because Lord Radcliffe had not then assumed the chairmanship—appeared in April, 1954. If these allowances are very illogical, and if they have to be looked at altogether and if something or other has to be done to the structure of the whole thing, the Government might remember that they, at any rate, have had plenty of opportunities to rectify the structure, and it is not altogether fair to hold back the amount of the allowances because, during 1955, 1956 and 1957, they have not acted on the Report that appeared in April, 1954.

    919
    I think that we are entitled to say that in those circumstances the time really has come to put up these allowances a little—and I think that they ought to be put up—without regard to the structure. By all means let the Government put that right—and let them get a move on about it—but they should not be held back on that account. However we look at it, there has clearly been, during that period of years, in several cases a general rise in the cost of this burden, and if the part that these allowances are to play in the system of gradation is to remain substantially the same as it was formerly—and no one has suggested otherwise—I suggest that they must be altered to play that same part.
    That is not to say that they are purely subsistence allowances, but it is to point out that, by the character of the allowances, if we leave them as they are in a period of rising prices they begin to play a different part in the system of gradation. We have not been told why the part they play, illogical, or whatever it may be, should be altered, and, therefore, it seems to me perfectly clear that the time has now come when another increase—not a very large one, but an increase—should be made. The increase suggested is from £60 to £75 in the case of four of the allowances—that is to say, of the two under Section 214, the one under Section 215 and the one under Section 216—and from £40 to £50 in the case of the claimant dependent on the daughter.
    I have a personal interest in this matter. I think that it is a bit rough to treat daughters in this way if they face the formidable task of looking after an aged or an ailing parent. It is true that this is the case for relief for the parent, but I think that one ought to recognise that it is difficult to find daughters willing to assume this obligation. It must be a matter of mutual consent. The Treasury is very close-fisted indeed if it chooses this particular case, rather than any other, to claim a smaller allowance.
    The language of the Statute puzzles me a little. The claimant has to be dependent on his daughter's services. I dare say that that is the fiscal way of putting it, but it does not seem to me to
    920
    correspond at all with reality. I can only say that, having a personal interest, in that I wish we would move to put it up a little higher, even if I have not yet reached the stage either of finding a daughter to look after me or of acutely needing to be looked after.
    4.45 p.m.
    I repeat, the case for all these present allowances seems to be that if one does nothing, if one says one cannot put up any of them without putting them all up; if one says one cannot do anything because the structure is not right, though one has let three or four years go by during which one could have remedied that structure had one so chosen, one is then altering the part which these allowances play, and should play, in the Income Tax system by not keeping them up to the general rise in the cost of these matters.
    I should have thought that if the Chancellor was in the position to make any concessions at all, the very small concession represented by four of these cases, and the rather larger one represented by the fifth, would, in fact, be concessions to a class of people even more entitled to sympathetic consideration nowadays than those whom we sometimes benefit under Finance Acts, or who are helped by concessions made by the Chancellor of the day.
    Three of these are cases of family—I would not say charity, but of the discharge of family obligations. The claimant dependent on the daughter is a very special case, as I have already said, and the allowance for the resident housekeeper should be put up, partly because it comes in with the family relative in charge of the widower's children, but put up for the moment, subject always to reconsideration of the whole structure of that allowance at a later stage.
    I do not see, therefore, how we can accept the Government's contention that nothing whatever should be done, and since they are not prepared to tell us which of these Amendments is most acceptable to them, we shall have to do our best to get them to accept the Amendments one after the other.
    Question put, That those words be there inserted:—
    The Committee divided: Ayes 215, Noes 247.

    Division No. 154.]

    AYES

    [4.47 p.m.

    Ainsley, J. W.

    Hale, Leslie

    Popplewell, E.

    Albu, A. H.

    Hall, Rt. Hn. Glenvil (Colne Valley)

    Prentice, R. E.

    Allaun, Frank (Salford, E.)

    Hamilton, W. W.

    Price, J. T. (Westhoughton)

    Allen, Arthur (Bosworth)

    Harrison, J. (Nottingham, N.)

    Probert, A. R.

    Allen, Scholefield (Crewe)

    Hayman, F. H.

    Proctor, W. T.

    Awbery, S. S.

    Herbison, Miss M.

    Pursey, Cmdr. H.

    Bacon, Miss Alice

    Holman, P.

    Rankin, John

    Balfour, A.

    Holmes, Horace

    Redhead, E. C.

    Bellenger, Rt. Hon. F. J.

    Holt, A. F.

    Reeves, J.

    Bence, C. R. (Dunbartonshire, E.)

    Houghton, Douglas

    Reid, William

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

    Howell, Charles (Perry Barr)

    Reynolds, G. W.

    Benson, Sir George

    Hoy, J. H.

    Rhodes, H.

    Beswiok, Frank

    Hubbard, T. F.

    Robens, Rt. Hon. A.

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

    Hughes, Emrys (S. Ayrshire)

    Roberts, Albert (Normanton)

    Blenkinsop, A.

    Hunter, A. E.

    Roberts, Goronwy (Caernarvon)

    Blyton, W. R.

    Hynd, H. (Accrington)

    Robinson, Kenneth (St. Panoras, N.)

    Boardman, H.

    Hynd, J. B. (Attercliffe)

    Ross, William

    Bottomley, Rt. Hon. A. G.

    Irvine, A. J. (Edge Hill)

    Royle, C.

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

    Irving, Sydney (Dartford)

    Shinwell, Rt. Hon. E.

    Bowles, F. G.

    Isaacs, Rt. Hon. G. A.

    Short, E. W.

    Boyd, T. C.

    Janner, B.

    Shurmer, P. L. E.

    Braddock, Mrs. Elizabeth

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

    Silverman, Julius (Aston)

    Brockway, A. F.

    Jeger, George (Goole)

    Silverman, Sydney (Nelson)

    Brown, Thomas (Ince)

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

    Simmons, C. J. (Brierley Hill)

    Burke, W. A.

    Jenkins, Roy (Steohford)

    Skeffington, A. M.

    Burton, Miss F. E.

    Johnson, James (Rugby)

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

    Butler, Herbert (Hackney, C.)

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

    Slater, J. (Sedgefield)

    Butler, Mrs. Joyce (Wood Green)

    Jones, David (The Hartlepools)

    Smith, Ellis (Stoke, S.)

    Soskice, Rt. Hon Sir Frank

    Callaghan, L. J.

    Jones, J. Idwal (Wrexham)

    Sparks, J. A.

    Carmichael, J.

    Key, Rt. Hon. C. W.

    Spriggs, L.

    Castle, Mrs. B. A.

    Lawson, G. M.

    Stewart, Michael (Fulham)

    Champion, A. J.

    Lee, Frederick (Newton)

    Stonehouse, John

    Clunie, J.

    Lee, Miss Jennie (Cannook)

    Stones, W. (Consett)

    Collins, V. J. (Shoreditch & Finsbury)

    Lewis, Arthur

    Strachey, Rt. Hon. J.

    Cove, W. G.

    Lindgren, G. S.

    Strauss, Rt. Hon. George (Vauxhall)

    Craddook, George (Bradford, S.)

    Lipton, Marcus

    Summerskill, Rt. Hon. E.

    Cronin, J. D.

    Mabon, Dr. J. Dickson

    Swingler, S. T.

    Crossman, R. H. S.

    McAlister, Mrs. Mary

    Sylvester, G. O.

    Cullen, Mrs. A.

    McCann, J.

    Taylor, Bernard (Mansfield)

    Davies, Rt. Hn. Clement (Montgomery)

    MacColl, J. E.

    Thomas, George (Cardiff)

    Davies, Ernest (Enfield, E.)

    MacDermot, Niall

    Thomson, George (Dundee, E.)

    Davies, Stephen (Merthyr)

    McGhee, H. G.

    Thornton, E.

    Deer, G.

    McInnes, J.

    Tomney, F.

    de Freitas, Geoffrey

    McLeavy, Frank

    Ungoed-Thomas, Sir Lynn

    Diamond, John

    MacMillan, M. K. (Western Isles)

    Usborne, H. C.

    Dodds, N. N.

    MacPherson, Malcolm (Stirling)

    Wade, D. W.

    Donnelly, D. L.

    Mallalieu, E. L. (Brigg)

    Warbey, W. N.

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

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

    Watkins, T. E.

    Dye S.

    Mann, Mrs. Jean

    Weitzman, D.

    Ede, Rt. Hon. J. C.

    Marquand, Rt. Hon. H. A.

    Wells, Percy (Faversham)

    Edelman, M.

    Mason, Roy

    Wells, William (Walsall, N.)

    Edwards, Rt. Hon. John (Brighouse)

    Mellish, R. J.

    West, D. G.

    Edwards, Rt. Hon. Ness (Caerphilly)

    Messer, Sir F.

    Wheeldon, W. E.

    Edwards, Robert (Bilston)

    Mitchison, G. R.

    White, Mrs. Eirene (E. Flint)

    Edwards, W. J. (Stepney)

    Monslow, W.

    Wilkins, W. A.

    Evans, Albert (Islington, S. W.)

    Moody, A. S.

    Willey, Frederick

    Evans, Edward (Lowestoft)

    Morris, Peroy (Swansea, W.)

    Williams, David (Neath)

    Fernyhough, E.

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

    Williams, Rev. Llywelyn (Ab'tillery)

    Finch, H. J.

    Mort, D. L.

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

    Fitch, E. A.

    Moyle, A.

    Williams, W. T. (Barons Court)

    Foot, D. M.

    Mulley, F. W.

    Willis, Eustace (Edinburgh, E.)

    Forman, J. C.

    Neal, Harold (Bolsover)

    Wilson, Rt. Hon. Harold (Huyton)

    Fraser, Thomas (Hamilton)

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

    Winterbottom, Richard

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

    Oliver, G. H.

    Woodburn, Rt. Hon. A.

    George, Lady Megan Lloyd (Car'then)

    Oswald, T.

    Woof, R. E.

    Gibson, C. W.

    Owen, W. J.

    Yates, V. (Ladywood)

    Gordon Walker, Rt. Hon. P. C.

    Padley, W. E.

    Younger, Rt. Hon. K.

    Greenwood, Anthony

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

    Zilliacus, K.

    Grenfell, Rt. Hon. D. R.

    Pannell, Charles (Leeds, W.)

    Grey, C. F.

    Paton, John

    TELLERS FOR THE AYES:

    Griffiths, Rt. Hon. James (Llanelly)

    Pearson, A.

    Mr. J. Taylor and Mr. G. H. R. Rogers.

    Griffiths, William (Exchange)

    Peart, T. F.

    Grimond, J.

    Pentland, N.

    NOES

    Agnew, Sir Peter

    Armstrong, C. W.

    Barlow, Sir John

    Aitken, W. T.

    Ashton, H.

    Barter, John

    Amery, Julian (Preston, N.)

    Atkins, H. E.

    Batsford, B. C. C.

    Amory, Rt. Hn. Heathcoat (Tiverton)

    Balniel, Lord

    Beamish, Col. Tufton

    Arbuthnot, John

    Barber, Anthony

    Bell, Philip (Bolton, E.)

    922

    923

    Bell, Ronald (Bucks, S.)

    Head, Rt. Hon. A. H.

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

    Bennett, F. M. (Torquay)

    Heald, Rt. Hon. Sir Lionel

    Noble, Comdr. Rt. Hon. Allan

    Bevins, J. R. (Toxteth)

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

    Noble, M. A. C. (Argyll)

    Biggs-Davison, J. A.

    Henderson-Stewart, Sir James

    Nugent, G. R. H.

    Bingham, R. M.

    Hill, Rt. Hon. Charles (Luton)

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

    Birch, Rt. Hon. Nigel

    Hill, Mrs. E. (Wythenshawe)

    Ormsby-Gore, Rt. Hon. W. D.

    Bishop, F. P.

    Hinchingbrooke, Viscount

    Orr, Capt. L. P. S.

    Black, C. W.

    Hirst, Geoffrey

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

    Body, R. F.

    Hobson, John (Warwick & Leam' gt' n)

    Osborne, C.

    Boothby, Sir Robert

    Holland-Martin, C. J.

    Page, R. G.

    Bossom, Sir Alfred

    Hope, Lord John

    Pannell, N. A. (Kirkdale)

    Boyle, Sir Edward

    Hornby, R. P.

    Partridge, E.

    Braine, B. R.

    Hornsby-Smith, Miss M. P.

    Peel, W. J.

    Braithwaite, Sir Albert (Harrow, W.)

    Howard, Gerald (Cambridgeshire)

    Peyton, J. W. W.

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

    Howard, John (Test)

    Pickthorn, K. W. M.

    Brooman-White, R. C.

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

    Pilkington, Capt. R. A.

    Browne, J. Nixon (Craigton)

    Hughes Hallett, Vice-Admiral J.

    Pitman, I. J.

    Bryan, P.

    Hughes-Young, M. H. C.

    Pitt, Miss E. M.

    Bullus, Wing Commander E. E.

    Hurd, A. R.

    Pott, H. P.

    Burden, F. F. A.

    Powell, J. Enoch

    Butcher, Sir Herbert

    Hutchison, Michael Clark (E 'b' gh, S.)

    Price, David (Eastlelgh)

    Hutchison, Sir James (Scotstoun)

    Price, Henry (Lewisham, W.)

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

    Hyde, Montgomery

    Prior-Palmer, Brig. O. L.

    Campbell, Sir David

    Hylton-Foster, Rt. Hon. Sir Harry

    Profumo, J. D.

    Carr, Robert

    Iremonger, T. L.

    Ramsden, J. E.

    Cary, Sir Robert

    Irvine, Bryant Godman (Rye)

    Rawlinson, Peter

    Channon, Sir Henry

    Jenkins, Robert (Dulwich)

    Redmayne, M.

    Chichester-Clark, R.

    Jennings, J. C. (Burton)

    Roberts, Sir Peter (Heeley)

    Cole, Norman

    Johnson, Dr. Donald (Carlisle)

    Robinson, Sir Roland (Blackpool, S.)

    Conant, Maj. Sir Roger

    Johnson, Eric (Blackley)

    Rodgers, John (Sevenoaks)

    Cooke, Robert

    Joseph, Sir Keith

    Roper, Sir Harold

    Cooper, A. E.

    Joynson-Hicks, Hon. Sir Lancelot

    Ropner, Col. Sir Leonard

    Cooper-Key, E. M.

    Kaberry, D.

    Russell, R. S.

    Cordeaux, Lt.-Col. J. K.

    Kerby, Capt. H. B.

    Sharples, R. C.

    Craddock, Beresford (Spelthorne)

    Kerr, Sir Hamilton

    Shepherd, William

    Crosthwaite-Eyre, Col. O. E.

    Kershaw, J. A.

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

    Crowder, Sir John (Flnchley)

    Kimball, M.

    Smithers, Peter (Winchester)

    Cunningham, Knox

    Langford-Holt, J. A.

    Smyth, Brig. Sir John (Norwood)

    Currie, G. B. H.

    Leather, E. H. C.

    Spearman, Sir Alexander

    Davidson, Viscountess

    Leavey, J. A.

    Speir, R. M.

    D' Avigdor-Goldsmid, Sir Henry

    Leburn, W. G.

    Stevens, Geoffrey

    Deedes, W. F.

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

    Steward, Harold (Stockport, S.)

    Digby, Simon Wingfield

    Legh, Hon. Peter (Petersfield)

    Steward, Sir William (Woolwich, W.)

    Donaldson, Cmdr. C. E. McA.

    Lindsay, Hon. James (Devon, N.)

    Stuart, Rt. Hon. James (Moray)

    Doughty, C. J. A.

    Linstead, Sir H. N.

    Shudholme, Sir Henry

    du Cann, E. D. L.

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

    Summers, Sir Spencer

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

    Lloyd, Rt. Hon. Selwyn (Wirral)

    Sumner, W. D. M. (Orpington)

    Duncan, Sir James

    Low, Rt. Hon. Sir Toby

    Taylor, Sir Charles (Eastbourne)

    Duthie, W. S.

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Teeling, W.

    Eden, J. B. (Bournemouth, West)

    Lucas-Tooth, Sir Hugh

    Temple, John M.

    Elliott, R. W. (Ne'castle upon Tyne, N.)

    McAdden, S. J.

    Thomas, Leslie (Canterbury)

    Emmet, Hon. Mrs. Evelyn

    Macdonald, Sir Peter

    Thomas, P. J. M. (Conway)

    Errington, Sir Eric

    Mackeson, Brig. Sir Harry

    Thompson, Kenneth (Walton)

    Farey-Jones, F. W.

    McKibbin, Alan

    Thompson, R. (Croydon, S.)

    Fell, A.

    Mackie, J. H. (Galloway)

    Thorneycroft, Rt. Hon. P.

    Finlay, Graeme

    McLaughlin, Mrs. P.

    Thornton-Kemsley, Sir Colin

    Fisher, Nigel

    Tiley, A. (Bradford, W.)

    Fletcher-Cooke, C.

    MacLeod, John (Ross & Cromarty)

    Turton, Rt. Hon. R. H.

    Fort, R.

    Macmillan, Rt. Hn. Harold (Bromley)

    Tweedsmuir, Lady

    Fraser, Sir Ian (M'cmbe & Lonsdale)

    Macmillan, Maurice (Halifax)

    Vane, W. M. F.

    Freeth, Denzil

    Macpherson, Niall (Dumfries)

    Vaughan-Morgan, J. K.

    Garner-Evans, E. H.

    Maddan, Martin

    Vickers, Miss Joan

    George, J. C. (Pollok)

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

    Vosper, Rt. Hon. D. F.

    Gibson-Watt, D.

    Maitland, Hon. Patrick (Lanark)

    Wakefield, Sir Wavell (St. M'lebone)

    Glyn, Col. Richard H.

    Markham, Major Sir Frank

    Wall, Patrick

    Godber, J. B.

    Marples, Rt. Hon. A. E.

    Ward, Dame Irene (Tynemouth)

    Goodhart, Philip

    Marshall, Douglas

    Watkinson, Rt. Hon. Harold

    Gough, C. F. H.

    Mathew, R.

    Webster, D. W. E.

    Gower, H. R.

    Maudling, Rt. Hon. R.

    Whitelaw, W. S. I.

    Graham, Sir Fergus

    Mawby, R. L.

    Williams, Paul (Sunderland, S.)

    Grant, W. (Woodside)

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

    Williams, R. Dudley (Exeter)

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

    Medlicott, Sir Frank

    Wills, Sir Gerald (Bridgwater)

    Green, A.

    Milligan, Rt. Hon. W. R.

    Wilson, Geoffrey (Truro)

    Grimston, Hon. John (St. Albans)

    Morrison, John (Salisbury)

    Wood, Hon. R.

    Grosvenor, Lt.-Col. R. G.

    Mott-Radclyffe, Sir Charles

    Woollam, John Victor

    Gurden, Harold

    Nabarro, G. D. N.

    Hall, John (Wycombe)

    Nairn, D. L. S.

    TELLERS FOR THE NOES:

    Harris, Reader (Heston)

    Neave, Airey

    Mr. Oakshott and

    Harrison, A. B. C. (Maldon)

    Nicholls, Harmar

    Mr. E. Wakefield.

    Harrison, Col. J. H. (Eye)

    Nicholson, Sir Godfrey (Farnham)

    Amendment proposed: In page 7, line 27, at end insert:
    "and for references to sixty pounds (which relate to the amount of the relief) there shall be substituted references to seventy-five pounds".—[Mr. H. Wilson.]
    Question put, That those words be there inserted:—
    The Committee divided: Ayes 210, Noes 247.

    Division No. 155.]

    AYES

    [4.57 p.m.

    Ainsley, J. W.

    Grimond, J.

    Pentland, N.

    Albu, A. H.

    Hale, Leslie

    Popplewell, E.

    Allaun, Frank (Salford, E.)

    Hall, Rt. Hn. Glenvil (Colne Valley)

    Prentice, R. E.

    Allen, Arthur (Bosworth)

    Hamilton, W. W.

    Price, J. T. (Westhoughton)

    Allen, Schofield (Crewe)

    Harrison, J. (Nottingham, N.)

    Probert, A. R.

    Awbery, S. S.

    Hayman, F. H.

    Proctor, W. T.

    Bacon, Miss Alice

    Herbison, Miss M.

    Pursey, Cmdr. H.

    Balfour, A.

    Holman, P.

    Rankin, John

    Bellenger, Rt. Hon. F. J.

    Holmes, Horace

    Redhead, E. C.

    Bence, C. R. (Dunbartonshire, E.)

    Holt, A. F.

    Reeves, J.

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

    Houghton, Douglas

    Reid, William

    Beswick, Frank

    Howell, Charles (Perry Barr)

    Reynolds, G. W.

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

    Hubbard, T. F.

    Rhodes, H.

    Blenkinsop, A.

    Hughes, Emrys (S. Ayrshire)

    Robens, Rt. Hon. A.

    Blyton, W. R.

    Hunter, A. E.

    Roberts, Albert (Normanton)

    Boardman, H.

    Hynd, H. (Accrington)

    Roberts, Goronwy (Caernarvon)

    Bottomley, Rt. Hon. A. G.

    Hynd, J. B. (Attercliffe)

    Robinson, Kenneth (St. Panoras, N.)

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

    Irvine, A. J. (Edge Hill)

    Ross, William

    Bowles, F. G.

    Irving, Sydney (Dartford)

    Royle, C.

    Boyd, T. C.

    Isaacs, Rt. Hon. G. A.

    Shinwell, Rt. Hon. E.

    Braddock, Mrs. Elizabeth

    Janner, B.

    Shurmer, P. L. E.

    Brockway, A. F.

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

    Silverman, Julius (Aston)

    Brown, Thomas (Ince)

    Jeger, George (Goole)

    Silverman, Sydney (Nelson)

    Burke, W. A.

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

    Simmons, C. J. (Brierley Hill)

    Burton, Miss F. E.

    Jenkins, Roy (Stechford)

    Skeffington, A. M.

    Butler, Herbert (Hackney, C.)

    Johnson, James (Rugby)

    Slater, Mrs. H. (Stoke, N)

    Butler, Mrs. Joyce (Wood Green)

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

    Slater, J. (Sedgefield)

    Callaghan, L. J.

    Jones, David (The Hartlepools)

    Smith, Ellis (Stoke, S.)

    Carmichael, J.

    Jones, J. Idwal (Wrexham)

    Soskice, Rt. Hon. Sir Frank

    Castle, Mrs. B. A.

    Key, Rt. Hon. C. W.

    Sparks, J. A.

    Champion, A. J.

    Lawson, G. M.

    Spriggs, L.

    Clunie, J.

    Lee, Frederick (Newton)

    Stewart, Michael (Fulham)

    Collins, V. J. (Shoreditch & Finsbury)

    Lee, Miss Jennie (Cannook)

    Stonehouse, John

    Cove, W. G.

    Lewis, Arthur

    Stones, W. (Consett)

    Craddock, George (Bradford, S.)

    Lindgren, G. S.

    Strachey, Rt. Hon. J.

    Cronin, J. D.

    Lipton, Marcus

    Strauss, Rt. Hon. George (Vauxhall)

    Crossman, R. H. S.

    Mabon, Dr. J. Dickson

    Summerskill, Rt. Hon. E.

    Cullen, Mrs. A.

    McCann, J.

    Swingler, S. T.

    Davies, Rt. Hon. Clement (Montgomery)

    MacColl, J. E.

    Sylvester, G. O.

    Davies, Ernest (Enfield, E.)

    MacDermot, Niall

    Taylor, Bernard (Mansfield)

    Davies, Stephen (Merthyr)

    McGhee, H. G.

    Thomas, George (Cardiff)

    Deer, G.

    McInnes, J.

    Thomson, George (Dundee, E.)

    de Freitas, Geoffrey

    McLeavy, Frank

    Thornton, E.

    Diamond, John

    MacMillan, M. K. (Western Isles)

    Tomney, F.

    Dodds, N. N.

    MacPherson, Malcolm (Stirling)

    Ungoed-Thomas, Sir Lynn

    Donnelly, D. L.

    Mallalieu, E. L. (Brigg)

    Usborne, H. C.

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

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

    Wade, D. W.

    Dye, S.

    Mann, Mrs. Jean

    Warbey, W. N.

    Ede, Rt. Hon. J. C.

    Marquand, Rt. Hon. H. A.

    Watkins, T. E.

    Edelman, M.

    Mason, Roy

    Weitzman, D.

    Edwards, Rt. Hon. John (Brighouse)

    Mellish, R. J.

    Wells, Percy (Faversham)

    Edwards, Rt. Hon. Ness (Caerphilly)

    Messer, Sir F.

    Wells, William (Walsall, N.)

    Edwards, Robert (Biston)

    Mitchison, G. R.

    Wheeldon, W. E.

    Edwards, W. J. (Stepney)

    Monslow, W.

    White, Mrs. Eirene (E. Flint)

    Evans, Albert (Islington, S. W.)

    Moody, A. S.

    Wilkins, W. A.

    Evans, Edward (Lowestoft)

    Morris, Percy (Swansea, W.)

    Willey, Frederick

    Fernyhough, E.

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

    Williams, David (Neath)

    Finch, H. J.

    Mort, D. L.

    Williams, Rev. Llywelyn (Ab'tillery)

    Fitch, E. A.

    Moyle, A.

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

    Foot, D. M.

    Mulley, F. W.

    Williams, W. T. (Barons Court)

    Forman, J. C.

    Neal, Harold (Bolsover)

    Willis, Eustace (Edinburgh, E.)

    Fraser, Thomas (Hamilton)

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

    Wilson, Rt. Hon. Harold (Huyton)

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

    Oliver, G. H.

    Winterbottom, Richard

    George, Lady Megan Lloyd (Car' then)

    Oswald, T.

    Woodburn, Rt. Hon. A.

    Gibson, C. W.

    Owen, W. J.

    Woof, R. E.

    Gordon Walker, Rt. Hon. P. C.

    Padley, W. E.

    Yates, V. (Ladywood)

    Greenwood, Anthony

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

    Younger, Rt. Hon. K.

    Grenfell, Rt. Hon. D. R.

    Pannell, Charles (Leeds, W.)

    Zilliacus, K.

    Grey, C. F.

    Paton, John

    Griffiths, Rt. Hon. James (Llanelly)

    Pearson, A.

    TELLERS FOR THE AYES:

    Griffiths, William (Exchange)

    Peart, T. F.

    Mr. J. Taylor and Mr. G. H. R. Rogers.

    NOES

    Agnew, Sir Peter

    Gower, H. R.

    Marshall, Douglas

    Amory, Rt. Hn. Heathcoat (Tiverton)

    Graham, Sir Fergus

    Mathew, R.

    Arbuthnot, John

    Grant, W. (Woodside)

    Maudling, Rt. Hon. R.

    Armstrong, C. W.

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

    Mawby, R. L.

    Ashton, H.

    Green, A.

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

    Atkins, H. E.

    Grimston, Hon. John (St. Albans)

    Medlicott, Sir Frank

    Baldock, Lt.-Cmdr. J. M.

    Grosvenor, Lt.-Col. R. G.

    Milligan, Rt. Hon. W. R.

    Balniel, Lord

    Gurden, Harold

    Morrison, John (Salisbury)

    Barber, Anthony

    Hall, John (Wycombe)

    Mott-Radclyffe, Sir Charles

    Barlow, Sir John

    Harris, Reader (Heston)

    Nabarro, G. D. N.

    Barter, John

    Harrison, A. B. C (Maldon)

    Nairn, D. L. S.

    Batsford, B. C. C.

    Harrison, Col. J. H. (Eye)

    Neave, Airey

    Beamish, Col. Tufton

    Head, Rt. Hon. A. H.

    Nicholls, Harmar

    Bell, Philip (Bolton, E.)

    Heald, Rt. Hon. Sir Lionel

    Nicholson, Sir Godfrey (Farnham)

    Bell, Ronald (Bucks, S.)

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

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

    Bennett, F. M. (Torquay)

    Henderson-Stewart, Sir James

    Noble, Comdr. Rt. Hon. Allan

    Bevins, J. R. (Toxteth)

    Hill, Rt. Hon. Charles (Luton)

    Noble, M. A. C. (Argyll)

    Biggs-Davison, J. A.

    Hill, Mrs. E. (Wythenshawe)

    Nugent, G. R. H.

    Bingham, R. M.

    Hinchingbrooke, Viscount

    Oakshott, H. D.

    Birch, Rt. Hon. Nigel

    Hirst, Geoffrey

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

    Bishop, F. P.

    Hobson, John (Warwick & Leam'gt'n)

    Ormsby-Gore, Rt. Hon. W. D.

    Black, C. W.

    Holland-Martin, C. J.

    Orr, Capt. L. P. S.

    Body, R. F.

    Hope, Lord John

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

    Boothby, Sir Robert

    Hornby, R. P.

    Osborne, C.

    Bossom, Sir Alfred

    Hornsby-Smith, Miss M. P.

    Page, R. G.

    Boyle, Sir Edward

    Horobin, Sir Ian

    Pannell, N. A. (Kirkdale)

    Braine, B. R.

    Howard, Gerald (Cambridgeshire)

    Partridge, E.

    Braithwaite, Sir Albert (Harrow, W.)

    Howard, John (Test)

    Peel, W. J.

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

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

    Peyton, J. W. W.

    Brooman-White, R. C.

    Hughes Hallett, Vice-Admiral J.

    Pickthorn, K. W. M.

    Browne, J. Nixon (Craigton)

    Hughes-Young, M. H. C.

    Pilkington, Capt. R. A.

    Bryan, P.

    Hurd, A. R.

    Pitman, I. J.

    Bullus, Wing-Commander E. E.

    Hutchison, Michael Clark (E'b'gh, S.)

    Pitt, Miss E. M.

    Burden, F. F. A.

    Hutchison, Sir James (Scotstoun)

    Pott, H. P.

    Butcher, Sir Herbert

    Hyde, Montgomery

    Powell, J. Enoch

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

    Hylton-Foster, Rt. Hon. Sir Harry

    Price, David (Eastleigh)

    Campbell, Sir David

    Iremonger, T. L.

    Price, Henry (Lewisham, W.)

    Carr, Robert

    Irvine, Bryant Godman (Rye)

    Prior-Palmer, Brig. O. L.

    Cary, Sir Robert

    Jenkins, Robert (Dulwich)

    Profumo, J. D.

    Channon, Sir Henry

    Jennings, J. C. (Burton)

    Rawlinson, Peter

    Cole, Norman

    Johnson, Dr. Donald (Carlisle)

    Redmayne, M.

    Conant, Maj. Sir Roger

    Johnson, Eric (Blackley)

    Roberts, Sir Peter (Heeley)

    Cooke, Robert

    Jones, Rt. Hon. Aubrey (Hall Green)

    Robinson, Sir Roland (Blackpool, S.)

    Cooper, A. E.

    Joseph, Sir Keith

    Rodgers, John (Sevenoaks)

    Cooper-Key, E. M.

    Joynson-Hicks, Hon. Sir Lancelot

    Ropner, Col. Sir Leonard

    Cordeaux, Lt.-Col. J. K.

    Kaberry, D.

    Russell, R. S.

    Craddock, Berestord (Spelthorne)

    Kerby, Capt. H. B.

    Sharples, R. C.

    Crosthwaite-Eyre, Col. O. E.

    Kerr, Sir Hamilton

    Shepherd, William

    Crowder, Sir John (Finchley)

    Kershaw, J. A.

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

    Cunningham, Knox

    Kimball, M.

    Smithers, Peter (Winchester)

    Currie, G. B. H.

    Langford-Holt, J. A.

    Smyth, Brig. Sir John (Norwood)

    Davidson, Viscountess

    Leather, E. H. C.

    Spearman, Sir Alexander

    D'Avigdor-Goldsmid, Sir Henry

    Leavey, J. A.

    Speir, R. M.

    Deedes, W. F.

    Leburn, W. G.

    Stevens, Geoffrey

    Digby, Simon Wingfield

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

    Steward, Harold (Stockport, S.)

    Donaldson, Cmdr. C. E. McA.

    Legh, Hon. Peter (Petersfield)

    Steward, Sir William (Woolwich, W.)

    du Cann, E. D. L.

    Lindsay, Hon. James (Devon, N.)

    Stuart, Rt. Hon. James (Moray)

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

    Linstead, Sir H. N.

    Studholme, Sir Henry

    Duncan, Sir James

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

    Summers, Sir Spencer

    Duthie, W. S.

    Lloyd, Rt. Hon. Selwyn (Wirral)

    Sumner, W. D. M. (Orpington)

    Eden, J. B. (Bournemouth, West)

    Low, Rt. Hon. Sir Toby

    Taylor, Sir Charles (Eastbourne)

    Elliott, R. W. (Ne'castle upon Tyne, N.)

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Teeling, W.

    Emmet, Hon. Mrs. Evelyn

    Lucas-Tooth, Sir Hugh

    Temple, John M.

    Errington, Sir Eric

    McAdden, S. J.

    Thomas, Leslie (Canterbury)

    Farey-Jones, F. W.

    Macdonald, Sir Peter

    Thomas, P. J. M. (Conway)

    Fell, A.

    Mackeson, Brig. Sir Harry

    Thompson, Kenneth (Walton)

    Finlay, Graeme

    McKibbin, Alan

    Thompson, R. (Croydon, S.)

    Fisher, Nigel

    Mackie, J. H. (Galloway)

    Thorneycroft, Rt. Hon. P.

    Fletcher-Cooke, C.

    McLaughlin, Mrs. P.

    Tiley, A. (Bradford, W.)

    Fort, R.

    McLean, Neil (Inverness)

    Turton, Rt. Hon. R. H.

    Fraser, Sir Ian (M'cmbe & Lonsdale)

    MacLeod, John (Ross & Cromarty)

    Tweedsmuir, Lady

    Freeth, Denzil

    Macmillan, Rt. Hn. Harold (Bromley)

    Vane, W. M. F.

    Gammans, Lady

    Macmillan, Maurice (Halifax)

    Vaughan-Morgan, J. K.

    Garner-Evans, E. H.

    Macpherson, Niall (Dumfries)

    Vickers, Miss Joan

    George, J. C. (Pollok)

    Maddan, Martin

    Vosper, Rt. Hon. D. F.

    Gibson-Watt, D.

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

    Wall, Patrick

    Glyn, Col. Richard H.

    Maitland, Hon. Patrick (Lanark)

    Ward, Rt. Hon. G. R. (Worcester)

    Godber, J. B.

    Markham, Major Sir Frank

    Ward, Dame Irene (Tynemouth)

    Goodhart, Philip

    Marlowe, A. A. H.

    Watkinson, Rt. Hon. Harold

    Gough, C. F. H.

    Marples, Rt. Hon. A. E.

    Webster, D. W. E.

    928

    929

    Whitelaw, W. S. I.

    Wilson, Geoffrey (Truro)

    TELLERS FOR THE NOES:

    Williams, Paul (Sunderland, S.)

    Wood, Hon. R.

    Mr. E. Wakefield and Mr. Chichester-Clark.

    Williams, R. Dudley (Exeter)

    Woollam, John Victor

    Wills, Sir Gerald (Bridgwater)

    Mr. Houghton: I beg to move, in page 7, line 27, at the end to insert:
    (4) In section fifteen of the Finance Act, 1952 (relief for small incomes), as amended by subsection (2) of section two of the Finance Act, 1955, references to three hundred and fifty pounds shall be substituted in all places for references to three hundred pounds (the income limit for the full relief), a reference to four hundred and fifty pounds shall be substituted for the reference to four hundred pounds (the income limit of marginal relief), and a reference to thirteen twenty-fifths shall be substituted for the reference to nine-twentieths (the fraction governing the marginal relief).
    Clause 12 continues the upward trend of the special reliefs for older people, that is to say, age exemption and age relief, but no change is proposed in the Bill for small income relief which provides that where a person not qualified for age relief has a total income not exceeding £300, income relief may be granted on unearned income. There is provision for marginal relief for incomes not greatly in excess of £300.
    This relief, which was created in 1952, is intended to give some tax relief to persons not over the age of 65, but who are living on small incomes. The sort of persons whom I have no doubt the Chancellor had in mind at the time were widows, unmarried women living on small annuities or on the income from modest legacies, and prematurely retired persons with small annuities or investment income.
    When the relief was first granted the ceiling of total income was £250. That was increased in 1955 to £300. This Amendment proposes to increase the ceiling to £350 with marginal relief increased to £450 instead of £350. When this relief began the income limit was one-half of the limit of income for age relief. Age relief grants the benefit of earned income relief for persons over 65 years of age, in the case of the married couple if either of them is over 65, whose total income from all sources does not exceed a certain amount.
    Under the Chancellor's proposals in Clause 12 the new ceiling for age relief is to be a total income of £800. As I have said, when the relief was first granted the ceiling for the small income relief was one-half of the ceiling for age relief. Both
    930
    these reliefs have the same effect, that of giving the benefit of earned income relief on unearned income, in the one case where people are over 65, where the ceiling is higher, and in the other case where they are under 65, where the ceiling is lower, but the nature of the relief is the same. When the age relief ceiling was lifted from £500 to £600 the small income relief ceiling was subsequently raised to £300, making it again one-half of the ceiling for age relief.
    Since then the age relief ceiling has gone up by two steps: first, to £700 last year; and now to £800 in Clause 12 this year. But the Chancellor has not proposed, this time or last year, the kind of corresponding adjustment in the ceiling of small income relief which accompanied the lifting of the age relief ceiling in earlier years. We think that this adjustment should be made.
    Let us consider what has happened. Clause 12 proposes to lift the ceiling for age exemption on a relief which was created for the first time last year for age exemption. The limit was put at £250 last year, and the Clause proposes to increase it to £275 this year for a single person. For a married couple it is to be £440, compared with £400 last year. This age relief, which was limited to incomes up to £500 in 1952, was stepped up to £600 in 1953; to £700 in 1957; and to £800 this year. Small income relief has not been given comparable treatment. It was a £250 limit in 1952 and a £300 limit in 1955. Since then the age exemption has been introduced and increased, and age relief has been increased twice, with no adjustment for small income relief. So we believe that the Chancellor should keep these associated reliefs in proper harmony.
    I am sure that on both sides of the Committee there will be a great deal of sympathy for the problems of elderly people living on comparatively small incomes. We have welcomed the special tax concessions given to old folk living on small incomes. These now take two forms. One is total exemption from tax where the person is over 65 and has a total income of less than £275 a year. A married couple are exempted if their joint total income does not exceed £440 a year.

    931
    5.15 p.m.
    There is still a good deal of misunderstanding about the real significance of age exemption. Many people believe that the first £275 of their income is exempt, even though their total income may be above that figure; that it is a kind of exemption on a slice of their income, with tax being levelled at the normal rate on income above what they believe to be the exemption limit. Similarly with married couples. I think it desirable to make it abundantly clear that age exemption is granted only where the total income from all sources does not exceed a ceiling of £275 in the case of a single person aver 65, and £440 in the case of a married couple, one of whom is 65. In both cases that is the figure for this year, because these are the new ceilings for age exemption for the current Income Tax year.
    That is one form of special relief given to elderly people. The other is a relief given to those whose incomes are above the exemption limit subject now to a maximum total income of £800 for a married couple. In their case, even though their income may be wholly unearned, or in part unearned, if their total income is below the ceiling for the age relief, they get the benefit of the two-ninths of earned income relief. So far, so good. In both cases this year the Chancellor has seen fit to make further concessions to old folk living on small incomes in each of these reliefs. But for the small income relief he has made no concession.
    The small income relief, which the Chancellor introduced for the first time in 1952, caters for a no less deserving section of the tax-paying community. Although these people are not elderly, many of them are infirm and unable to earn a living. Often they live lonely lives on small incomes bequeathed to them by their parents, or their income is derived from hard-earned savings over a period of years. Particularly is this class of taxpayer deserving of sympathy where the person is incapacitated by health or infirmity from going out to work and is doing his best to exist on a relatively small income. So we hope that the Chancellor will view the proposal we make with sympathy.
    I am not able to form any estimate of the cost of this proposal; there are no
    932
    figures upon which I could do so. But the Financial Secretary no doubt will tell us. In considering the proposal we are making, I do not think that the Chancellor should rest wholly on considerations of cost, unless they are truly embarrassing to him from a budgetary point of view. I am sure that the sympathy which his predecessor, the present Lord Privy Seal, extended to this class of taxpayer will also be extended by the present Chancellor. We therefore expect to hear from the Financial Secretary that some adjustment in the ceiling of small income relief can now be made.
    Mr. Simon: The pleasant part of following the hon. Member for Sowerby (Mr. Houghton) lies in the fact that from his great knowledge of the tax code he performs the task which generally falls upon the Government spokesman—giving a history of the facts and setting out the main arguments which affected the introduction of an allowance and its subsequent movement. All I can say is that I am grateful to him. What he said was, of course, perfectly accurate and I am excused, and welcomedly excused, by the Committee from repeating it.
    The hon. Member asked what the cost would be if this Amendment were adopted. It would be £750,000, which is a substantial sum. Nevertheless, I think that he was quite right when he said that the Chancellor would not rest purely on the consideration of cost in asking the Committee to reject such an Amendment as this. If I ask the Committee to reject it, as I do, that is not because I do not recognise that there is a great deal in what the hon. Member said.
    I am not satisfied that a sufficient case has been made to deal with this allowance in isolation. I am sure that the hon. Member was right when he said that some needy people under 65 years of age would be helped by this Amendment, people who are living on small investment incomes some of whom are undoubtedly ailing, but they are not the only people who would be helped.
    By this Amendment we would not be helping people in the very poorest circumstances. No one with an income of under £300 would be helped. It is primarily those with incomes between

    933
    £300 and £350, and to a lesser extent in the band who get marginal relief running up to £397, as in the case of a single man with purely investment income.
    Among those who would be helped would be the young man who is just beginning to make his way and may have inherited a certain amount of capital which gives him a small investment income. Although, of course, those whose income is below £350 are obviously not living in conditions of affluence, they cannot be the sort of people who have a primary call on such exemptions as the Chancellor can allow at the moment.
    The second point really repeats the one that I ventured to make in discussing the previous Amendments, that we cannot judge an allowance of this sort in isolation. It must be viewed, as I think was accepted throughout the Committee in that discussion, and particularly in the case of this allowance, in relation to the basic personal allowances which are of primary importance, the single person's allowance and the married person's allowance. This particular allowance is far more relevant to them than to the age exemption and to the age relief. The age relief has been put up, as the hon. Member said, but it is of a quite different character from this relief.
    The purpose of the age relief is to equate the liability of the elderly taxpayer who, in retirement, is living on an investment income, with the liability of a similar taxpayer living in retirement on a pension and to ensure that the same proportion of their income ranks for earned income allowance. Viewed in that way, I submit to the Committee that although this is a case which must clearly be considered when we reconsider the basic personal allowances it is not one which should be dealt with in isolation.
    I know that the hon. and learned Member for Kettering (Mr. Mitchison) will repeat his pleasing gibe, which he made on the last series of Amendments, that we say we cannot move our right foot forward without our left foot and that we cannot move our left foot forward without our right foot and, therefore, that we must stand still. But in point of fact we have not stood still in this Budget. We have made improvements in the allowances of those who, I think the Committee generally has
    934
    shown agreement, primarily ought to be helped this year. The aged we have helped, through the age allowance, age relief and age exemption.
    As for the rest, the other allowances—I hope that this is not an unfair point—particularly now that the Committee have negatived the improvement in the housekeeper allowance and the dependent relative allowance—
    Mr. John Diamond: Only just.
    Mr. Simon: —only just, but that was the decision taken by the Committee—nothing can be done this year in the basic personal allowances, where any improvement costs a great deal of money. In view of that, I think the improvement of this relief must wait until the basic personal allowances are dealt with again.
    Mr. Mitchison: From time to time I hear noises from the benches opposite about people with small fixed incomes. When we come to deal with small fixed incomes a noise is not made and the Government are allowed to get away with what they are proposing to get away with today. These are not only small fixed incomes, but small incomes of any kind. Why an income should be less entitled to consideration when, from being a small fixed income, it becomes a small diminishing income because the Government continue to tax it, I have never understood.
    Let us be clear. What we are dealing with is people who are getting between £6 and £7 a week to live on with total relief under this Clause and between £7 and £8 a week with partial relief under the Clause. The very simple question we have to face as a Committee is: is it right that people getting that amount of income should have to pay Income Tax? We have to face it having regard to the possibility that some time or other the Chancellor may think that with an Election approaching it is expedient to reduce the general rate of Income Tax. There were hints of that the other day. I say without hesitation that it is, of course, a much smaller matter, but far more necessary on any human grounds to refuse to tax incomes of that minute character than to make a reduction in the general rate. It is monstrous that these people should be made to pay Income Tax at all.

    935
    It may be that there is a long history to it, that it has been altered, reintroduced and modified, but cannot we for a moment get rid of reports which have been written by taxation experts, get rid for a moment of the Treasury point of view, get rid of the nicety of keeping all these things in balance, even disembarrass ourselves of the difficulty of where to begin, and just treat this single problem as a human one? Is it really right that somebody getting £6 or £7 a week should be made to pay Income Tax? Is it really right that somebody getting £7 or £8 a week should be made to pay on the same basis as higher income earners?
    I should have thought there could be only one answer to that. Although, on the last group of Amendments, we have been talking about the part they played in the system of gradation and the rest, I should have thought that this was a case where we have the most simple question and that the present position is that the Government consider that people with incomes of that size should be taxed either fully or partially and should not get complete or partial relief.
    5.30 p.m.
    Every consideration of reasonable humanity ought to induce us to say the opposite. If the Government are to persist in resisting the Amendment, I hope that we shall not hear from them any more stuff and nonsense about special relief for those on small fixed incomes. I hope that we shall hear none of the other noises on this subject which from time to time are made on the Government benches. Here is a perfectly clear way in which the Tory Party, if it chooses, can show that it has some regard for a class of people who are living in extreme and growing difficulties because of present prices and the rising cost of living.
    To continue to levy Income Tax on them at this level seems to me plain inhumanity. Let us do our best to get the Government to mend their ways and to live up to some of their talk about small fixed incomes.
    Question put, That those words be there inserted:—
    The Committee divided: Ayes 216, Noes 253.

    Division No. 156.]

    AYES

    [5.32 p.m.

    Ainsley, J. W.

    Cullen, Mrs. A.

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

    Albu, A. H.

    Davies, Rt. Hn. Clement (Montgomery)

    Herbison, Miss M.

    Allaun, Frank (Salford, E.)

    Davies, Ernest (Enfield, E.)

    Hewitson, Capt. M.

    Allen, Arthur (Bosworth)

    Davies, Stephen (Merthyr)

    Holman, P.

    Allen, Scholefield (Crewe)

    de Freitas, Geoffrey

    Holmes, Horace

    Awbery, S. S.

    Diamond, John

    Holt, A. F.

    Bacon, Miss Alice

    Dodds, N. N.

    Houghton, Douglas

    Balfour, A.

    Donnelly, D. L.

    Hoy, J. H.

    Bellenger, Rt. Hon. F. J.

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

    Hubbard, T. F.

    Bence, C. R. (Dunbartonshire, E.)

    Ede, Rt. Hon. J. C.

    Hughes, Emrys (S. Ayrshire)

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

    Edelman, M.

    Hunter, A. E.

    Benson, Sir George

    Edwards, Rt. Hon. John (Brighouse)

    Hynd, H. (Accrington)

    Beswick, Frank

    Edwards, Rt. Hon. Ness (Caerphilly)

    Hynd, J. B. (Attercliffe)

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

    Edwards, Robert (Bilston)

    Irvine, A. J. (Edge Hill)

    Blenkinsop, A.

    Edwards, W. J. (Stepney)

    Irving, Sydney (Dartford)

    Blyton, W. R.

    Evans, Albert (Islington, S.W.)

    Isaacs, Rt. Hon. G. A.

    Boardman, H.

    Evans, Edward (Lowestoft)

    Janner, B.

    Bottomley, Rt. Hon. A. G.

    Fernyhough, E.

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

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

    Finch, H. J.

    Jeger, George (Goole)

    Bowles, F. G.

    Fitch, E. A.

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

    Boyd, T. C.

    Foot, D. M.

    Johnson, James (Rugby)

    Braddock, Mrs. Elizabeth

    Forman, J. C.

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

    Brockway, A. F.

    Fraser, Thomas (Hamilton)

    Jones, David (The Hartlepools)

    Brown, Thomas (Ince)

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

    Jones, J. Idwal (Wrexham)

    Burke, W. A.

    George, Lady Megan Lloyd (Car'then)

    Key, Rt. Hon. C. W.

    Burton, Miss F. E.

    Gibson, C. W.

    Lawson, G. M.

    Butler, Herbert (Hackney, C.)

    Gordon Walker, Rt. Hon. P. C.

    Lee, Frederick (Newton)

    Butler, Mrs. Joyce (Wood Green)

    Greenwood, Anthony

    Lee, Miss Jennie (Cannock)

    Callaghan, L. J.

    Grenfell, Rt. Hon. D. R.

    Lewis, Arthur

    Carmichael, J.

    Grey, C. F.

    Lindgren, G. S.

    Cattle, Mrs. B. A.

    Griffiths, Rt. Hon. James (Llanelly)

    Lipton, Marcus

    Champion, A. J.

    Griffiths, William (Exchange)

    Mabon, Dr. J. Dickson

    Chapman, W. D.

    Grimond, J.

    McAlister, Mrs. Mary

    Clunie, J.

    Hale, Leslie

    McCann, J.

    Collins, V. J. (Shoreditch & Finsbury)

    Hall, Rt. Hn. Glenvil (Colne Valley)

    MacColl, J. E.

    Cove, W. G.

    Hamilton, W. W.

    MacDermot, Niall

    Craddock, George (Bradford, S.)

    Harrison, J. (Nottingham, N.)

    McGhee, H. G.

    Cronin, J. D.

    Hastings, S.

    McInnes, J.

    Crossman, R. H. S.

    Hayman, F. H.

    McLeavy, Frank

    MacMillan, M. K. (Western Isles)

    Pursey, Cmdr. H.

    Taylor, Bernard (Mansfield)

    MacPherson, Malcolm (Stirling)

    Rankin, John

    Taylor, John (West Lothian)

    Mallalieu, E. L. (Brigg)

    Redhead, E. C.

    Thomas, George (Cardiff)

    Mann, Mrs. Jean

    Reeves, J.

    Thomson, George (Dundee, E.)

    Marquand, Rt Hon. H. A.

    Reid, William

    Thornton, E.

    Mason, Roy

    Reynolds, G. W.

    Tomney, F.

    Mellish, R. J.

    Rhodes, H.

    Ungoed-Thomas, Sir Lynn

    Messer, Sir F.

    Robens, Rt. Hon. A.

    Usborne, H. C.

    Mitchison, G. R.

    Roberts, Albert (Normanton)

    Wade, D. W.

    Monslow, W.

    Roberts, Goronwy (Caernarvon)

    Warbey, W. N.

    Moody, A. S.

    Robinson, Kenneth (St. Pancras, N.)

    Watkins, T. E.

    Morris, Percy (Swansea, W.)

    Rogers, George (Kensington, N.)

    Weitzman, D.

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

    Ross, William

    Wells, Percy (Faversham)

    Mort, D. L.

    Royle, C.

    Wells, William (Walsall, N.)

    Moyle, A.

    Shinwell, Rt. Hon. E.

    West, D. G.

    Mulley, F. W.

    Shurmer, P. L. E.

    Wheeldon, W. E.

    Neal, Harold (Bolsover)

    Silverman, Julius (Aston)

    White, Mrs. Eirene (E. Flint)

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

    Silverman, Sydney (Nelson)

    Wilkins, W. A.

    Oliver, G. H.

    Simmons, C. J. (Brierley Hill)

    Willey, Frederick

    Oswald, T.

    Skeffington, A. M.

    Williams, David (Neath)

    Owen, W. J.

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

    Williams, Rev. Llywelyn (Ab'tillery)

    Padley, W. E.

    Slater, J. (Sedgefield)

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

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

    Smith, Ellis (Stoke, S.)

    Williams, W. T. (Barons Court)

    Pannell, Charles (Leeds, W.)

    Sorensen, R. W.

    Willis, Eustace (Edinburgh, E.)

    Pargiter, G. A.

    Soskice, Rt. Hon. Sir Frank

    Wilson, Rt. Hon. Harold (Huyton)

    Paton, John

    Sparks, J. A.

    Winterbottom, Richard

    Pearson, A.

    Spriggs, L.

    Woodburn, Rt. Hon. A.

    Peart, T. F.

    Stewart, Michael (Fulham)

    Woof, R. E.

    Pentland, N.

    Stonehouse, John

    Yates, V. (Ladywood)

    Popplewell, E.

    Stones, W. (Consett)

    Younger, Rt. Hon. K.

    Prentice, R. E.

    Strachey, Rt. Hon. J.

    Zilliacus, K.

    Price, J. T. (Westhoughton)

    Summerskill, Rt. Hon. E.

    Probert, A. R.

    Swingler, S. T.

    TELLERS FOR THE AYES:

    Proctor, W. T.

    Sylvester, G. O.

    Mr. Short and Mr. Deer.

    NOES

    Agnew, Sir Peter

    Cordeaux, Lt.-Col. J. K.

    Harrison, A. B. C. (Maldon)

    Aitken, W. T.

    Craddock, Beresford (Spelthorne)

    Harvey, John (Walthamstow, E.)

    Amery, Julian (Preston, N.)

    Crosthwaite-Eyre, Col. O. E.

    Head, Rt. Hon. A. H.

    Amory, Rt. Hn. Heathcoat (Tiverton)

    Crowder, Sir John (Finchley)

    Heald, Rt. Hon. Sir Lionel

    Arbuthnot, John

    Crowder, Petre (Ruislip—Northwood)

    Heath, Rt. Hon. E. R. C.

    Armstrong, C. W.

    Cunningham, Knox

    Henderson-Stewart, Sir James

    Ashton, H.

    Currie, C. B. H.

    Hill, Rt. Hon. Charles (Luton)

    Atkins, H. E.

    Davidson, Viscountess

    Hill, Mrs. E. (Wythenshawe)

    Baldock, Lt.-Cmdr. J. M.

    D' Avigdor-Goldsmid, Sir Henry

    Hinchingbrooke, Viscount

    Baldwin, A. E.

    Deedes, W. F.

    Hirst, Geoffrey

    Barber, Anthony

    Digby, Simon Wingfield

    Hobson, John (Warwick & Leam'gt'n)

    Barlow, Sir John

    Donaldson, Cmdr. C. E. McA.

    Holland-Martin, C. J.

    Barter, John

    Doughty, C. J. A.

    Hope, Lord John

    Batsford, B. C. C.

    du Cann, E. D. L.

    Hornby, R. P.

    Beamish, Col. Tufton

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

    Hornsby-Smith, Miss M. P.

    Bell, Philip (Bolton, E.)

    Duncan, Sir James

    Horobin, Sir Ian

    Bell, Ronald (Bucks, S.)

    Duthie, W. S.

    Howard, Gerald (Cambridgeshire)

    Bennett, F. M. (Torquay)

    Eden, J. B. (Bournemouth, West)

    Howard, John (Test)

    Bevins, J. R. (Toxteth)

    Elliott, R.W. (Ne' castle upon Tyne, N.)

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

    Biggs-Davison, J. A.

    Emmet, Hon. Mrs. Evelyn

    Hughes Hallett, Vice-Admiral J.

    Bingham, R. M.

    Errington, Sir Eric

    Hughes-Young, M. H. C.

    Birch, Rt. Hon. Nigel

    Farey-Jones, F. W.

    Hurd, A. R.

    Bishop, F. P.

    Fell, A.

    Hutchison, Michael Clark (E 'b' gh, S.)

    Black, C. W.

    Finlay, Graeme

    Hutchison, Sir James (Scotstoun)

    Body, R. F.

    Fisher, Nigel

    Hyde, Montgomery

    Boothby, Sir Robert

    Fletcher-Cooke, C.

    Hylton-Foster, Rt. Hon. Sir Harry

    Bossom, Sir Alfred

    Fort, R.

    Iremonger, T. L.

    Boyle, Sir Edward

    Fraser, Sir Ian (M' cmbe & Lonsdale)

    Irvine, Bryant Godman (Rye)

    Braithwaite, Sir Albert (Harrow, W.)

    Freeth, Denzil

    Jenkins, Robert (Dulwich)

    Brooman-White, R. C.

    Gammans, Lady

    Jennings, J. C. (Burton)

    Browne, J. Nixon (Craigton)

    Garner-Evans, E. H.

    Johnson, Dr. Donald (Carlisle)

    Bryan, P.

    George, J. C. (Pollok)

    Johnson, Eric (Blackley)

    Bullus, Wing Commander E. E.

    Gibson-Watt, D.

    Jones, Rt. Hon. Aubrey (Hall Green)

    Burden, F. F. A.

    Glyn, Col. Richard H.

    Joseph, Sir Keith

    Butcher, Sir Herbert

    Godber, J. B.

    Joynson-Hicks, Hon. Sir Lancelot

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

    Goodhart, Philip

    Kaberry, D.

    Campbell, Sir David

    Gough, C. F. H.

    Keegan, D.

    Carr, Robert

    Gower, H. R.

    Kerby, Capt. H. B.

    Cary, Sir Robert

    Graham, Sir Fergus

    Kerr, Sir Hamilton

    Channon, Sir Henry

    Grant, W. (Woodside)

    Kershaw, J. A.

    Chichester-Clark, R.

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

    Kimball, M

    Cole, Norman

    Green, A.

    Langford-Holt, J. A.

    Conant, Maj. Sir Roger

    Grosvenor, Lt.-Col. R. G.

    Leather, E. H. C.

    Cooke, Robert

    Gurden, Harold

    Leavey, J. A.

    Cooper, A. E.

    Hall, John (Wycombe)

    Leburn, W. G.

    Cooper-Key, E. M.

    Harris, Reader (Heston)

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

    938

    939

    Legh, Hon. Peter (Petersffetd)

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

    Spearman, Sir Alexander

    Lindsay, Hon. James (Davon, N.)

    Noble, Comdr. Rt. Hon. Allan

    Speir, R. M.

    Linstead, Sir H. N.

    Noble, M. A. C. (Argyll)

    Stevens, Geoffrey

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

    Nugent, G. R. H.

    Steward, Harold (Stockport, S.)

    Lloyd, Rt. Hon. Selwyn (Wirral)

    Oakshott, H. D.

    Steward, Sir William (Woolwich, W.)

    Low, Rt. Hon. Sir Toby

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

    Stuart, Rt. Hon. James (Moray)

    Lucas, Sir Jocelyn (Pertsmouth, S.)

    Ormsby-Gore, Rt. Hon. W. D.

    Studholme, Sir Henry

    Lucas, P. B. (Brentford &-Chiswick)

    Orr, Capt. L. P. S.

    Summers, Sir Spencer

    Lucas-Tooth, Sir Hugh

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

    Sumner, W. D. M. (Orpington)

    McAdden, S. J.

    Osborne, C.

    Taylor, Sir Charles (Eastbourne)

    Macdonald, Sir Peter

    Page, R. G.

    Teeling, W.

    Mackeson, Brig, Sir Harry

    Pannell, N. A. (Kirkdale)

    Temple, John M.

    McKibbin, Alan

    Partridge, E.

    Thomas, Leslie (Canterbury)

    Mackie, J. H. (Galloway)

    Peel, W. J.

    Thomas, P. J. M. (Conway)

    McLaughlin, Mrs. P.

    Peyton, J. W. W.

    Thompson, Kenneth (Walton)

    McLean, Neil (Inverness)

    Pickthorn, K. W. M.

    Thompson, R. (Croydon, S.)

    MacLeod, John (Ross & Cromarty)

    Pilkington, Capt, R. A.

    Thorneycroft, Rt. Hon. P.

    Macmillan, Rt. Hn. Harold (Bromley)

    Pitman, I. J.

    Thornton-Kemsley, Sir Colin

    Macmillan, Maurice (Halifax)

    Pitt, Miss E. M.

    Tiley, A. (Bradford, W.)

    Macpherson, Niall (Dumfries)

    Pott, H. P.

    Turton, Rt. Hon. R. H.

    Maddan, Martin

    Powell, J. Enoch

    Tweedsmuir, Lady

    Maitland, Hon. Patrick (Lanark)

    Price, David (Eastleigh)

    Vane, W. M. F.

    Markham, Major Sir Frank

    Price, Henry (Lewisham, W.)

    Vaughan-Morgan, J. K.

    Marlowe, A. A. H.

    Prior-Palmer, Brig. O. L.

    Vickers, Miss Joan

    Marples, Rt. Hon. A. E.

    Profumo, J. D.

    Vosper, Rt. Hon. D. F.

    Marshall, Douglas

    Ramsden, J. E.

    Wakefield, Edward (Derbyshire, W.)

    Mathew, R.

    Rawlinson, Peter

    Wakefield, Sir Wavell (St. M'lebone)

    Maudling, Rt. Hon. R.

    Redmayne, M.

    Wall, Patrick

    Mawby, R. L.

    Roberts, Sir Peter (Heeley)

    Ward, Rt. Hon. G. R. (Worcester)

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

    Robinson, Sir Roland (Blackpool, S.)

    Webster, D. W. E.

    Medlicott, Sir Frank

    Rodgers, John (Sevenoaks)

    Whitelaw, W. S. I.

    Milligan, Rt. Hon. W. R.

    Roper, Sir Harold

    Williams, Paul (Sunderland, S.)

    Morrison, John (Salisbury)

    Ropner, Col. Sir Leonard

    Williams, R. Dudley (Exeter)

    Mott-Radclyffe, Sir Charles

    Russell, R. S.

    Wilson, Geoffrey (Truro)

    Nabarro, G. D. N.

    Sharples, R. C.

    Wood, Hon. R.

    Nairn, D. L. S.

    Shepherd, William

    Woollam, John Victor

    Neave, Airey

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

    Nicholls, Harmar

    Smithers, Peter (Winchester)

    TELLERS FOR THE NOES:

    Nicholson, Sir Godfrey (Farnham)

    Smyth, Brig. Sir John (Norwood)

    Sir G. Wills and Colonel J. H. Harrison.

    Amendment proposed: In page 7, line 27, at end insert:
    (4) In section two hundred and seventeen of the Income Tax Act, 1952 (Claimant depending on services of a daughter), for the reference to forty pounds (indicating the amount of
    relief) there shall be substituted a reference to fifty pounds.—[Mr. Mitchison.]
    Question put, That those words be inserted:—
    The Committee divided: Ayes 216, Noes 255.

    Division No. 157.]

    AYES

    [5.41 p.m.

    Ainsley, J. W.

    Champion, A. J.

    George, Lady Megan Lloyd (Car' then)

    Albu, A. H.

    Chapman, W. D.

    Gibson, C. W.

    Allaun, Frank (Salford, E.)

    Clunie, J.

    Gordon Walker, Rt. Hon. P. C.

    Allen, Arthur (Bosworth)

    Collins, V. J. (Shoreditch & Finsbury)

    Greenwood, Anthony

    Allen, Scholefield (Crewe)

    Cove, W. G.

    Grenfell, Rt. Hon. D. R.

    Awbery, S. S.

    Craddock, George (Bradford, S.)

    Grey, C. F.

    Bacon, Miss Alice

    Cronin, J. D.

    Griffiths, Rt. Hon. James (Llanelly)

    Balfour, A.

    Crossman, R. H. S.

    Griffiths, William (Exchange)

    Bellenger, Rt. Hon. F. J.

    Dalton, Rt. Hon. H.

    Grimond, J.

    Bence, C. R. (Dunbartonshire, E.)

    Davies, Rt. Hon. Clement (Montgomery)

    Hale, Leslie

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

    Davies, Ernest (Enfield, E.)

    Hall, Rt. Hn. Glenvil (Colne Valley)

    Benson, Sir George

    Davies, Stephen (Merthyr)

    Hamilton, W. W.

    Beswick, Frank

    de Freitas, Geoffrey

    Harrison, J. (Nottingham, N.)

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

    Diamond, John

    Hastings, S.

    Blenkinsop, A.

    Dodds, N. N.

    Hayman, F. H.

    Blyton, W. R.

    Donnelly, D. L.

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

    Boardman, H.

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

    Herbison, Miss M.

    Bottomley, Rt. Hon. A. G.

    Ede, Rt. Hon. J. C.

    Hewitson, Capt. M.

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

    Edelman, M.

    Holman, P.

    Bowles, F. G.

    Edwards, Rt. Hon. John (Brighouse)

    Holmes, Horace

    Boyd, T. C.

    Edwards, Rt. Hon. Ness (Caerphilly)

    Holt, A. F.

    Braddock, Mrs. Elizabeth

    Edwards, Robert (Bilston)

    Houghton, Douglas

    Brockway, A. F.

    Edwards, W. J. (Stepney)

    Howell, Charles (Perry Barr)

    Brown, Thomas (Ince)

    Evans, Albert (Islington, S. W.)

    Hoy, J. H.

    Burke, W. A.

    Evans, Edward (Lowestoft)

    Hubbard, T. F.

    Burton, Miss F. E.

    Farnyhough, E.

    Hughes, Emrys (S. Ayrshire)

    Butler, Herbert (Hackney, C.)

    Finch, H. J.

    Hunter, A. E.

    Butler, Mrs. Joyce (Wood Green)

    Foot, D. M.

    Hynd, H. (Accrington)

    Callaghan, L. J.

    Forman, J. C.

    Hynd, J. B. (Attercliffe)

    Carmichael, J.

    Fraser, Thomas (Hamilton)

    Irvine, A. J. (Edge Hill)

    Castle, Mrs. B. A.

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

    Irving, Sydney (Dartford)

    Isaacs, Rt. Hon. G. A.

    Oliver, G. H.

    Sparks, J. A.

    Janner, B.

    Oswald, T.

    Spriggs, L.

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

    Owen, W. J.

    Stewart, Michael (Fulham)

    Jeger, George (Goole)

    Padley, W. E.

    Stonehouse, John

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

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

    Stones, W. (Consett)

    Johnson, James (Rugby)

    Pannell, Charles (Leeds, W.)

    Strachey, Rt. Hon. J.

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

    Pargiter, G. A.

    Summerskill, Rt. Hon. E.

    Jones, David (The Hartlepools)

    Paton, John

    Swingler, S. T.

    Jones, Elwyn (W. Ham, S.)

    Pearson, A.

    Sylvester, G. O.

    Jones, J. Idwal (Wrexham)

    Peart, T. F.

    Taylor, Bernard (Mansfield)

    Key, Rt. Hon. C. W.

    Pentland, N.

    Taylor, John (West Lothian)

    Lawson, G. M.

    Popplewell, E.

    Thomas, George (Cardiff)

    Lee, Frederick (Newton)

    Prentice, R. E.

    Thomson, George (Dundee, E.)

    Lee, Miss Jennie (Cannock)

    Prise, J. T. (Westhoughton)

    Thornton, E.

    Lewis, Arthur

    Probert, A. R.

    Tomney, F.

    Lindgren, G. S.

    Proctor, W. T.

    Ungoed-Thomas, Sir Lynn

    Lipton, Marcus

    Pursey, Cmdr. H.

    Usborne, H. C.

    Mabon, Dr. J. Dickson

    Rankin, John

    Wade, D. W.

    McCann, J.

    Redhead, E. C.

    Warbey, W. N.

    MacColl, J. E.

    Reeves, J.

    Watkins, T. E.

    MacDermot, Niall

    Reid, William

    Weitzman, D.

    McGhee, H. G.

    Reynolds, G. W.

    Wells, Percy (Favarsham)

    McInnes, J.

    Rhodes, H.

    Wells, William (Walsall, N.)

    McLeavy, Frank

    West, D. G.

    MacMillan, M. K. (Western Isles)

    Robens, Rt. Hon. A.

    Wheeldon, W. E.

    MacPherson, Malcolm (Stirling)

    Roberts, Albert (Normanton)

    White, Mrs. Eirene (E. Flint)

    Mallalieu, E. L. (Brigg)

    Roberts, Coronwy (Caernarvon)

    Wilkins, W. A.

    Mann, Mrs. Jean

    Robinson, Kenneth (St. Panoras, N.)

    Willey, Frederick

    Marquand, Rt. Hon. H. A.

    Rogers, George (Kensington, N.)

    Williams, David (Neath)

    Mason, Roy

    Ross, William

    Williams, Rev, Llywelyn (Ab'tillery)

    Mellish, R. J.

    Royle, C.

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

    Messer, Sir F.

    Shinwell, Rt. Hon. E.

    Williams, W. T. (Barons Court)

    Mitchison, G. R.

    Shurmer, P. L. E.

    Willis, Eustace (Edinburgh, E.)

    Monslow, W.

    Silverman, Julius (Aston)

    Wilson, Rt. Hon. Harold (Huyton)

    Moody, A. S.

    Silverman, Sydney (Nelson)

    Winterbottom, Richard

    Morris, Percy (Swansea, W.)

    Simmons, C. J. (Brierley Hill)

    Woodburn, Rt. Hon. A.

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

    Skeffington, A. M.

    Woof, R. E.

    Mort, D. L.

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

    Yates, V. (Ladywood)

    Moyle, A.

    Slater, J. (Sedgefield)

    Younger, Rt. Hon. K.

    Mulley, F. W.

    Smith, Ellis (Stoke, S.)

    Zilllacus, K.

    Neal, Harold (Bolsover)

    Sorensen, R. W.

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

    Soskice, Rt. Hon. Sir Frank

    TELLERS FOR THE AYES:

    Mr. Short and Mr. Deer.

    NOES

    Agnew, Sir Peter

    Carr, Robert

    Garner-Evans, E. H.

    Aitken, W. T.

    Cary, Sir Robert

    George, J. C. (Pollok)

    Amery, Julian (Preston, N.)

    Channon, Sir Henry

    Gibson-Watt, D.

    Amery, Rt. Hn. Heathcoat (Tiverton)

    Chichester-Clark, R.

    Glyn, Col. Richard H.

    Arbuthnot, John

    Cole, Norman

    Godber, J. B.

    Armstrong, C. W.

    Conant, Maj. Sir Roger

    Goodhart, Philip

    Ashton, H.

    Cooke, Robert

    Gough, C. F. H.

    Atkins, H. E.

    Cooper, A. E.

    Gower, H. R.

    Baldock, Lt.-Cmdr. J. M.

    Cooper-Key, E. M.

    Graham, Sir Fergus

    Baldwin, A. E.

    Cordeaux, Lt.-Col. J. K.

    Grant, W. (Woodside)

    Balniel, Lord

    Craddock, Beresford (Spelthorne)

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

    Barber, Anthony

    Crosthwaite-Eyre, Col. O. E.

    Green, A.

    Barlow, Sir John

    Crowder, Sir John (Finchley)

    Grosvenor, Lt.-Col. R. G.

    Barter, John

    Crowder, Petre (Ruislip—Northwood)

    Gurden, Harold

    Batsford, B. C. C.

    Cunningham, Knox

    Hall, John (Wycombe)

    Beamish, Col. Tufton

    Currie, G. B. H.

    Harris, Reader (Heston)

    Bell, Philip (Bolton, E.)

    Davidson, Viscountess

    Harrison, A. B. C. (Maldon)

    Bell, Ronald (Bucks, S.)

    D' Avigdor-Goldsmid, Sir Henry

    Harrison, Col. J. H. (Eye)

    Bennett, F. M. (Torquay)

    Deedes, W. F.

    Harvey, John (Walthamstow, E.)

    Bavins, J. R. (Toxteth)

    Digby, Simon Wingfield

    Head, Rt. Hon. A. H.

    Biggs-Davison, J. A.

    Donaldson, Cmdr. C. E. McA.

    Heald, Rt. Hon. Sir Lionel

    Bingham, R. M.

    Doughty, C. J. A.

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

    Birch, Rt. Hon. Nigel

    du Cann, E. D. L.

    Henderson-Stewart, Sir James

    Bishop, F. P.

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

    Hill, Rt. Hon. Charles (Luton)

    Hill, Mrs. E. (Wythenshawe)

    Black, C. W.

    Duncan, Sir James

    Hinchingbrooke, Viscount

    Body, R. F.

    Duthie, W. S.

    Hirst, Geoffrey

    Boothby, Sir Robert

    Eden, J. B. (Bournemouth, West)

    Hobson, John (Warwick & Leam' gt' n)

    Bossom, Sir Alfred

    Elliott, R. W. (Ne'castle upon Tyne, N.)

    Holland-Martin, C. J.

    Boyle, Sir Edward

    Emmet, Hon. Mrs. Evelyn

    Hope, Lord John

    Braine, B. R.

    Erringtpn, Sir Eric

    Hornby, R. P.

    Braithwaite, Sir Albert (Harrow, W.)

    Farey-Jones, F. W.

    Hornsby-Smith, Miss M. P.

    Brooman-White, R. C.

    Fell, A.

    Horobin, Sir Ian

    Browne, J. Nixon (Craigton)

    Finlay, Graeme

    Howard, Gerald (Cambridgeshire)

    Bryan, P.

    Fisher, Nigel

    Howard, John (Test)

    Bullus, Wing Commander E. E.

    Fletcher-Cooke, C.

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

    Burden, F. F. A.

    Fort, R.

    Hughes Hallett, Vice-Admiral J.

    Butcher, Sir Herbert

    Fraser, Sir Ian (M'cmbe & Lonsdale)

    Hurd, A. R.

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

    Freeth, Denzil

    Hutchison, Michael Clark (E 'b' gh, S.)

    Campbell, Sir David

    Gammans, Lady

    Hutchison, Sir James (Sootstoun)

    942

    943

    Hyde, Montgomery

    Marshall, Douglas

    Ropner, Col. Sir Leonard

    Hylton-Foster, Rt. Hon. Sir Harry

    Mathew, R.

    Russell, R. S.

    Iremonger, T. L.

    Maudling, Rt. Hon. R.

    Sharples, R. C.

    Irvine, Bryant Godman (Rye)

    Mawby, R. L.

    Shepherd, William

    Jenkins, Robert (Dulwich)

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

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

    Jennings, J. C. (Burton)

    Medlicott, Sir Frank

    Smithers, Peter (Winchester)

    Johnson, Dr. Donald (Carlisle)

    Milligan, Rt. Hon. W. R.

    Smyth, Brig, Sir John (Norwood)

    Johnson, Eric (Blackley)

    Morrison, John (Salisbury)

    Spearman, Sir Alexander

    Jones, Rt. Hon. Aubrey (Hall Green)

    Mott-Radclyffe, Sir Charles

    Speir, R. M.

    Joseph, Sir Keith

    Nabarro, G. D. N.

    Stevens, Geoffrey

    Joynson-Hicks, Hon. Sir Lancelot

    Nairn, D. L. S.

    Steward, Harold (Stockport, S.)

    Kaberry, D.

    Neave, Airey

    Steward, Sir William (Woolwich, W.)

    Keegan, D.

    Nicholls, Harmar

    Stuart, Rt. Hon. James (Moray)

    Kerby, Capt. H. B.

    Nicholson, Sir Godfrey (Farnham)

    Studholme, Sir Henry

    Kerr, Sir Hamilton

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

    Summers, Sir Spencer

    Kershaw, J. A.

    Noble, Comdr. Rt. Hon. Allan

    Sumner, W. D. M. (Orpington)

    Kimball, M.

    Noble, M. A. C. (Argyll)

    Taylor, Sir Charles (Eastbourne)

    Langford-Holt, J. A.

    Nugent, G. R. H.

    Teeling, W.

    Leather, E. H. C.

    Oakshott, H. D.

    Temple, John M.

    Leavey, J. A.

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

    Thomas, Leslie (Canterbury)

    Leburn, W. G.

    Ormsby-Gore, Rt. Hon. W. D.

    Thomas, P. J. M. (Conway)

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

    Thompson, Kenneth (Walton)

    Legh, Hon. Peter (Petersfield)

    Orr, Capt. L. P. S.

    Thompson, R. (Croydon, S.)

    Lindsay, Hon. James (Devon, N.)

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

    Thorneycroft, Rt. Hon. P.

    Linstead, Sir H. N.

    Osborne, C.

    Thomton-Kemsley, Sir Colin

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

    Page, R. G.

    Tiley, A. (Bradford, W.)

    Lloyd, Rt. Hon. Selwyn (Wirral)

    Pannell, N. A. (Kirkdale)

    Turton, Rt. Hon. R. H.

    Low, Rt. Hon. Sir Toby

    Partridge, E.

    Tweedsmuir, Lady

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Peel, W. J.

    Vane, W. M. F.

    Lucas, P. B. (Brentford & Chiswick)

    Peyton, J. W. W.

    Vaughan-Morgan, J. K.

    Lucas-Tooth, Sir Hugh

    Pickthorn, K. W. M.

    Vickers, Miss Joan

    McAdden, S. J.

    Pilkington, Capt. R. A.

    Vosper, Rt. Hon. D. F.

    Macdonald, Sir Peter

    Pitman, I. J.

    Wakefield, Edward (Derbyshire, W.)

    Mackeson, Brig. Sir Harry

    Pitt, Miss E. M.

    Wakefield, Sir Wavell (St. M' lebone)

    McKibbin, Alan

    Pott, H. P.

    Wall, Patrick

    Mackie, J. H. (Galloway)

    Powell, J. Enoch

    Ward, Rt. Hon. G. R. (Worcester)

    McLaughlin, Mrs. P.

    Price, David (Eastleigh)

    Ward, Dame Irene (Tynemouth)

    McLean, Neil (Inverness)

    Price, Henry (Lewisham, W.)

    Webster, D. W. E.

    MacLeod, John (Ross & Cromarty)

    Prior-Palmer, Brig. O. L.

    Whitelaw, W. S. I.

    Macmillan, Rt. Hn. Harold (Bromley)

    Profumo, J. D.

    Williams, Paul (Sunderland, S.)

    Macmillan, Maurice (Halifax)

    Ramsden, J. E.

    Williams, R. Dudley (Exeter)

    Macpherson, Niall (Dumfries)

    Rawlinson, Peter

    Wilson, Geoffrey (Truro)

    Maddan, Martin

    Redmayne, M.

    Wood, Hon. R.

    Maitland, Hon. Patrick (Lanark)

    Roberts, Sir Peter (Heeley)

    Woollam, John Victor

    Markham, Major Sir Frank

    Robinson, Sir Roland (Blackpool, S.)

    Marlowe, A. A. H.

    Rodgers, John (Sevenoaks)

    TELLERS FOR THE NOES:

    Marples, Rt. Hon. A. E.

    Roper, Sir Harold

    Sir G. Wills and Mr. Hughes-Young.

    Motion made, and Question proposed, That the Clause stand part of the Bill.
    Mr. Houghton: This Clause contains all the reliefs which the Chancellor proposes to make this time in the form of personal reliefs to Income Tax payers. It is, of course, the Clause which usually concerns the greatest number of taxpayers, because the millions of ordinary taxpayers, men and women, workers in factories, shops and offices, are principally if not wholly concerned with personal reliefs, reliefs for earned income, concessions for premiums paid on life assurance policies, National Insurance contributions, differential rates of tax, and probably the tax treatment of small savings in co-operative societies, the Post Office, building societies, and so forth. Those things really make up the Income Tax interest of the very large proportion of taxpayers of the country.
    Dividend stripping is not for them. Covenants, capital gains and expense accounts are all forbidden areas to most
    944
    of them. They are not able to employ their wives as secretaries, receptionists, farm managers or house decorators. Indeed, they suffer the handicap of very little scope for arranging their affairs to the best advantage from a tax point of view.
    Mr. Ellis Smith: Why house decorators?
    Mr. Houghton: I do not want to stray from the Clause before the Committee, but I will say a word to my hon. Friend about some of the matters arising on maintenance claims under Schedule A. If a taxpayer's wife is a competent paper hanger or painter, he may employ her to redecorate the house and, as long as he genuinely pays her wages and she accounts for the tax on those wages, if any, that is perfectly admissible from the point of view of a maintenance claim under Schedule A. However, that is not under the Clause. I was merely illustrating

    945
    some of the respects in which it is possible to arrange one's affairs to obtain the best tax advantage. As I say, most of the taxpayers to whom I have referred pay just what the Chancellor demands of them under P.A.Y.E.
    I suppose that one day the Committee ought to give some attention to the disparity between the treatment of those who pay their tax under P.A.Y.E. and those who pay on profits or gains under Schedule D. Those who pay as they earn begin to pay their tax in the very first pay week after the beginning of the Income Tax year, whereas those who pay under Schedule D pay the first instalment eight months after the beginning of the Income Tax year and have, shall I say, some room for manoœvre in regard to the payment of the tax. The only two agents which have direct access to the pay packet and can take money out of it irrespective of the special circumstances of the individual are the Minister of Pensions and National Insurance for National Insurance contributions and the Chancellor of the Exchequer for Income Tax. These are very ruthless rights conceded to the Administration to recover debts from wages at the time they are paid.
    The Committee will bear in mind that there is no discount given to the P.A.Y.E. taxpayer for beginning his payments so early in the Income Tax year; no personal relief is given by Clause 12 or by any previous Finance Act for this different date of commencement. I am not, of course, overlooking that in the year of change, years back, there was a forgiveness of the accumulated instalments of tax under the old arrangements in order to start the P.A.Y.E. scheme with a clean slate.
    Mr. Diamond: Does my hon. Friend recollect under which Government that was done? Was it a Labour Government or not?
    Mr. Houghton: I think that it was the Coalition Government when the P.A.Y.E. arrangement was introduced. There are many thousands, perhaps some millions, of taxpayers now paying under P.A.Y.E. who had no benefit from the transitional arrangements and who look at the matter solely from a current tax point of view.
    946
    I have pointed out on previous occasions that a taxpayer under Schedule D is given longer in which to pay, and not only is the taxpayer under P.A.Y.E. given no discount for prompt payment but the Schedule D taxpayer is not charged interest until his tax has been due for more than three months and amounts to more than £1,000. Then the Chancellor charges him interest at the modest rate of 3 per cent., notwithstanding the credit squeeze and the fact that Bank Rate may be at twice that level of interest.
    Taxpayers generally are very interested in what this Clause and the corresponding Clauses of other Finance Acts do in the matter of personal reliefs. This Clause does three things. In earlier debates, we went over them rather thoroughly. First, it increases the limit of income for exemption of the over-65s from £250 to £275 for a single person and from £400 to £440 for a married couple, with an extension of marginal relief in both cases. Secondly, it lifts once again, and for the third time since 1952, the limit of income qualifying for age relief for the over-65s. This time, the increase is from a ceiling of total income of £700 to £800, notwithstanding that it was increased from £600 to £700 last year. Thirdly, the Clause adjusts the limit of income of dependents in the case of dependent relative relief to take acount of the recent increase in the National Insurance retirement pension.
    We may ask why the Chancellor has proposed these three things to the exclusion of others. So far in the debate, we have had little comment from the benches opposite about the treatment of those on small incomes, notwithstanding that the reliefs in Clause 12 are almost wholly confined to them. We missed the hon. Lady the Member for Tynemouth (Dame Irene Ward)—
    Dame Irene Ward: She is here.
    6.0 p.m.
    Mr. Houghton: —in the early debates. I knew that the hon. Lady was present, but we were hoping that she would join with us in our plea to the Chancellor to extend still further the age relief provided for in this Clause, especially age exemption, and also for an increase in small income relief.
    An Hon. Member: She voted against that.
    Mr. Houghton: I do not know what the hon. Lady did in the most recent Division, which was an effort to put into practice much of what she has urged upon her right hon. Friends.
    The age exemption was a new relief last year. It differs in conception from age relief which still is confined to treating unearned income as if it were personal and, within the limits, giving the benefit of earned income relief. The Financial Secretary drew attention a few moments ago to the reason for age relief, namely, to give to elderly people who have retired on an annuity or investment income the corresponding benefit of earned income relief which is granted to the increasing number of people who are retiring on occupational pensions. We think that that provides some sort of equity between those who have to save for their retirement, like shopkeepers, traders and professional men in practice, and those who retire on occupational pensions.
    What is the proper limit for this concession is a matter of opinion. Certainly the Chancellor seems to think that this relief is due for another improvement, notwithstanding the succession of improvements in the ceiling of this relief which have been given in recent years. It may be that we are getting near the limit of this concession. The limit of £800 ceiling with marginal relief is now going fairly high up the scale.
    The other relief, age exemption, raises more acutely questions of equity between taxpayers of different ages. The ceiling is now increased from £250 to £275 for a single person and from £400 to £440 for a carried couple. On 6th May this year, in answer to my hon. Friend the Member for Wallsend (Mr. McKay), the figures which were given by the Chancellor revealed some disparities in the tax due on lower incomes according to age. The Committee ought not to lose sight of the effect of this relief on the tax liability of people in the same income group but of different ages. A married wage earner under 65 pays £18 12s. 6d. on an earned income of £450, but if one of a married couple is over 65 the tax payable on the same income is only £5. We in fact get three different amounts of tax on the same amount of income according to the nature of the income and the age of the taxpayer or his wife.
    948
    These facts were clearly brought out by the replies that the Chancellor gave to the Questions to which I have referred. If the income of £450 for a married couple, both of whom are under 65, is wholly unearned, then the tax that will have to be paid is £42 7s. 6d. If the income of £450 is wholly earned in the case of a couple under 65, the tax payable is £18 12s. 6d. With the same amount of income of £450, whether earned or unearned, in the case of a couple, one of whom is over 65, the tax payable is £5. Those figures raise some questions which are related to the theory that Income Tax is graduated according to the ability to pay.
    I think that I have on a previous occasion referred to the Irishman who was a member of one of the early Royal Commissions on Income Tax. He could see no justification for giving relief on earned income. He said that if Income Tax is a tax levied according to assumed ability to pay, then Income Tax is no different, neither better nor worse, whether the money is earned or unearned.
    We have gone a long way from that extreme theory in tax differential today. We have given more and more relief to earned income. Originally the differential between earned and unearned income was justified on the ground that earned income was less secure and, therefore, a lighter tax burden was justified having regard to the insecurity of the income of the taxpayer, whereas the taxpayer with unearned income had greater security of income and most likely had the advantage of capital resources. Whatever the reasoning behind it in the first place, it has become accepted practice in our approach to taxation affairs to differentiate between earned and unearned income. We began by giving earned and even unearned income reliefs in the case of the elderly in order to put those who had retired on investment income or annuities in some sort of equitable position in relation to those who had retired on pension, to which, as we know, earned income relief applies.
    Now the age exemption does more than give the benefit of earned income relief to unearned income. It actually exempts from tax altogether persons whose total income is below a certain limit, whether earned or unearned, but only, of course, in cases where the taxpayer is over 65

    949
    or one of a married couple is over 65. It seems that these reliefs are now creating certain disparities and one wonders whether a re-examination of relativities at those points is now due.
    We should like to draw attention to the recommendation of the Royal Commission on the Taxation of Profits and Income which the Chancellor has not yet brought forward. We feel particularly disappointed that the Chancellor has not felt able to support the recommendation contained in paragraph 201 and others of the second Report—
    The Deputy-Chairman (Sir Gordon Touche): Order. The hon. Gentleman realises that the debate is confined to the Clause itself?
    Mr. Houghton: Yes, Sir Gordon. However, I hoped that it was in order to refer to some of the matters which we hoped the Chancellor would include in Clause 12.
    The Deputy-Chairman: We should deal with what the Chancellor has included in Clause 12.
    Mr. Houghton: I shall bear your Ruling in mind, Sir Gordon.
    Mr. Mitchison: Further to that point of order. For purposes of comparison, cannot we compare what the Chancellor has included and the corpus from which he has drawn that which he has included? Otherwise it becomes most difficult to relate what he has included to anything.
    The Deputy-Chairman: I am afraid that the debate on the Question, "That the Clause stand part of the Bill," is rather narrow and is confined to that question.
    Mr. Houghton: May I express it in this way? We regret that the Chancellor has confined his proposals in Clause 12 to the particular reliefs that he has given, when in our view the scope of the reliefs might well have been extended to other claims for the Chancellor's consideration. The Order Paper is positively littered with very good suggestions in that connection.
    The whole emphasis of the Clause, apart from the almost automatic extension of the ceiling of income for a dependent relative, has been to extend still further and only the reliefs given to the
    950
    elderly. While we approve of the steps that the Chancellor is taking in that direction, we are disappointed that he has not felt able to include other reliefs which the Royal Commission discussed in its Report and which we hoped to have seen in the Clause.
    In any event, the sum total of the "package" deal on personal reliefs this time is in this one direction, which, however much we may approve, is rather narrow in its approach to the relief of direct taxation at this time. We fully acknowledge that the right hon. Gentleman has made considerable concessions in indirect taxation in an earlier part of the Bill, but the reliefs to the Income Tax payers have to be kept in reasonable relationship to tax reliefs generally.
    We can only look forward to a future occasion, if there is one—time may be running short—for the right hon. Gentleman to do all the things he wants to do. We should hope that if the right hon. Gentleman gets an opportunity of introducing another Budget, Clause 12 of that Bill—it is curious how frequently Clause 12 is the personal reliefs Clause in successive Finance Bills—will contain a wider selection of personal reliefs which, perhaps, will make his proposals of wider appeal to taxpayers generally.
    Dame Irene Ward: I am delighted to know that the hon. Member for Sowerby (Mr. Houghton) would like to hear from me. I think it is true to say that he probably wants to hear more from me than does my own Front Bench. I have no intention of taking up the time of the Committee, except to take this opportunity of saying that I am delighted that my right hon. Friend has at least made progress, though to a small extent, I agree, in trying to do something for those who live on small fixed incomes. [An HON. MEMBER: "He has done the opposite."] I am always ready for more in that direction. I shall start my campaign straight away so that we can prepare for the next Budget. In the meantime, Clause 12, with the extended personal reliefs, has done something, and I am proud that I have been able to do my little bit of battle.
    While the hon. Member for Sowerby was speaking, I was thinking that he had not been quite so successful in persuading

    951
    the Chancellor of the Exchequer of his own party to do something for those living on small fixed incomes as I have been in persuading my Chancellor of the Exchequer to do something for them. In other words, I have had greater success than the hon. Member has had. All I can say is that if we compare what has happened in Clause 12 with what happened in the equivalent Clause when his right hon. Friend introduced the Budget, he did nothing at all. All that he did was to put up the indirect taxation, put up the direct taxation and do nothing at all for those who have suffered most under inflation. [An HON. MEMBER: "Nonsense."] It is no good saying "Nonsense", which is all that hon. Members opposite ever say. I prefer action to words and—
    Mr. William Ross: Why did the hon. Lady not put that into practice in the last Division?
    Dame Irene Ward: I am not interested in Divisions.
    6.15 p.m.
    Mr. Mitchison: Is that why the hon. Lady has just voted against a tax concession in favour of people with small incomes? Is it because she prefers action to words?
    Dame Irene Ward: The hon. and learned Member is very clever and subtle. If, however, we take on balance what the Government which I support have done and the financial position under the Chancellor whom I support and compare it with comparable Clause 12's, the hon. and learned Member must agree—indeed, his hon. Friend the Member for Sowerby has just said so—that in indirect taxation the Chancellor of my Government has given—
    The Deputy-Chairman: The hon. Lady is going very far from the Clause.
    Dame Irene Ward: I know, Sir Gordon, but the hon. Member for Sowerby said that and you did not stop him.
    The Deputy-Chairman: If one Member is out of order, that does not excuse another hon. Member.
    Dame Irene Ward: I have it on the record, Sir Gordon, so I am quite happy
    952
    about it. Anyone who reads it will know the answer. All I am saying is that I am not prepared to throw over the substantial gains in financial stability which have enabled the Chancellor of the Exchequer whom I support—
    The Deputy-Chairman: I am afraid that this is going far from the Clause.
    Dame Irene Ward: I will not go very far from the Clause. After all, these are substantial concessions which are embodied in the Clause and it is necessary to have the money in the Exchequer to pay for them. I do not want to continue the argument further, except to say that I am glad we have started to make progress. I look forward to a good many more Clause 12's with much better treatment of those living on small fixed incomes. Heaven help the whole lot if the party opposite should ever win another General Election.
    Mr. Diamond: I am sure I speak for the whole Committee when I say how much we have enjoyed the intervention of the hon. Lady the Member for Tyne-mouth (Dame Irene Ward). Everything she has said was clear and to the point, and it was nice to know that she was supporting the Government and the Chancellor of the Exchequer. I imagine it is the Government now in power and the right hon. Gentleman who is sitting on the Front Bench to whom the hon. Lady was referring.
    On that point, I differ with the hon. Lady. I do not wish to support the Chancellor or the Government in relation to the Clause. It is John Citizen's Clause. It is the Clause which affects the ordinary, straightforward, average taxpayer of simple means and simple tastes and with no complexities in his economic affairs. We can call him John Citizen or, in this context, we can call him Honest John.
    Dame Irene Ward: Why not Mary?
    Mr. Diamond: In these matters of the Finance Act, and, indeed, all Acts, the male includes the female. Therefore, Honest John would include the femme sole who pays tax also. The point which I was anxious to make is that it is Honest John's tax Clause and Honest John is called upon to pay his tax, subject to these allowances, in full.

    953
    Honest John, as my hon. Friend the Member for Sowerby (Mr. Houghton) mentioned, has no opportunity for so arranging his affairs as to relieve the burden of taxation which falls upon his shoulders. He has no opportunity, nor does he have any element of credit or time, as my hon. Friend pointed out. My hon. Friend, with his usual moderation, understated the position and said that under Schedule D most businesses paid their tax eight months after the start of the Income Tax year. That would be much earlier than is the fact. The fact is that most businesses receive requests to pay their tax some eight months after the start of the Income Tax year. They proceed to pay their tax about eleven months, on average, after the start of the Income Tax year, and they are charged no interest for doing that. But in this Clause John Citizen, who is given the benefit of these allowances, has neither latitude in time nor in manœuvrability to so adjust his affairs as to pay other than the fullest possible amount of tax, less any allowances that are given, in this straightforward way.
    This is extremely relevant to the Clause, because it is taken into account in the general trend of taxation that any concession which goes beyond a statutory provision is shared equally among all classes of taxpayer. If the concession is shared equally, it matters not that it is being taken. If everybody pays under the concession slightly less tax than he would normally be called upon to pay, that is fair between one citizen and another. But our tax system is so devised that the man who earns a weekly wage pays proportionately more Income Tax than any other category of the community, except possibly the civil servant who receives a weekly or monthly wage and probably also the Cabinet Minister.
    None of the reliefs to which I have referred, and none of the opportunities to adjust his affairs so as to reduce the burden of taxation, are open to him. It follows, therefore, that he should be given special, sensitive and considerate treatment in any allowances that are provided in Clause 12. The reliefs are given in the Clause and there is some improvement in them, but they are of small account. Every time that, in the course of the debate, an attempt has been made to persuade the Government to widen
    954
    their vision a little and to be even a little more generous in their approach, it has been turned down for a variety of reasons. No consideration has been given to the fact that here we are largely dealing with the worst hit taxpayer in the sense that 100 per cent. of the appropriate tax burden falls on his or her shoulders whereas in very few other cases in the community does that apply.
    Mr. Geoffrey Stevens: I have been trying to follow the hon. Member's argument. He has referred at some length to Honest John Citizen and also to weekly wage earners. I have been glancing at the Clause, and in doing that I hope, Sir Gordon, that I was in order. Nowhere in it do I find any reference to wage earners. The only references are to John Citizens and Mary Citizenesses who are 65 years of age or more. I should be glad if the hon. Member would relate his observations to them.
    Mr. Diamond: I am grateful, Sir Gordon, that you have been courteous enough to follow my argument with a good deal more understanding than the hon. Member for Langstone (Mr. Stevens) and that you perceived immediately the direct and absolute relevance of my argument to the Clause.
    Dame Irene Ward: I saw the relevance of my argument, but I was still out of order.
    Mr. Diamond: I do not want to trespass on your generosity, Sir Gordon, or the generosity of the Committee by repeating my arguments for the benefit of the hon. Member for Langstone.
    Therefore, the first aspect of the criticism which I, and I hope all my hon. Friends, make against the Government is that in giving the allowances in the Clause no account has been taken of the fact that the full burden of tax falls upon the shoulders of those affected by the allowances. I have called them John Citizens. To make the point even more clear, since later in our discussion of the Bill we shall be referring to dividend stripping, I have also called them Honest Johns.
    Secondly, the Clause illustrates the Government's approach to the little man, or to the little woman, if the hon. Lady the Member for Tynemouth would wish me to add that.
    Dame Irene Ward: Yes, certainly.
    Mr. Diamond: The reliefs given in the Clause are to be contrasted with the reliefs given in the Clauses which deal with Income Tax and Profits Tax where, according to the Financial Statement, allowances amounting to £23 million in a full year are given. The Clause is to be contrasted with the Profits Tax Clause which gives a relief of £16 million in a full year. Sums of £23 million and £16 million, respectively, are given largely to business in initial allowances and Profits Tax reliefs.
    The Government illustrate their point of view towards the little man who is affected by Clause 12. It is he who receives the reliefs given in that Clause, and the total amount given by the Budget in these reliefs is £4¾ million in a full year, against £39 million given to business. This illustrates absolutely the comparable importance which the Government attach to the little man, who pays his full whack of tax at his full rate and who never succeeds in reducing his burden without making an awful hash of it. No doubt he is unable to afford the fees of consultants to advise him how it should be done properly. He has to do it himself, with the result, for example, of what occurred when a labourer claimed a child allowance, and he was shown by the dates in respect of which he had made the claim to have fathered the child at the age of 12, thereby casting some doubt on its eligibility for the child allowance.
    I repeat what I have been compelled to say on other occasions—that all claims put forward for increases in allowances have been met with complete courtesy, and nothing else whatsoever. Apparently, the Chancellor and the Financial Secretary are now developing a technique of being kind to the Committee. I am sure that the Paymaster-General will not feel hurt if I do not include him in that category. He is a very polite man, but he does not come anywhere near the standard of his right hon. Friend and the Financial Secretary in the matter of giving nothing but courtesy when we ask for help. Again on this occasion we have had courteous replies and nothing else.
    Mr. Simon: The hon. Member for Gloucester (Mr. Diamond) was less than fair to the Government when he implied that my right hon. Friend the Chancellor
    956
    and myself—kindly excusing the Paymaster-General—had refused any concession during discussions on the Bill. On the contrary, anybody viewing fairly the review of indirect taxation which has taken place would feel, particularly in the context of this year's discussion, that was hardly a very fair observation. It is perfectly true that, for reasons which I gave when we discussed Amendments to this Clause, we had not found it possible to accede to the arguments urged; but, looking at the field of taxation so far as we have discussed it generally, it would be less than fair to accuse my right hon. Friend of inflexibility or of inability to appreciate the arguments put forward in the Committee.
    Dame Irene Ward: There is a future.
    6.30 p.m.
    Mr. Simon: The second thing which it occurred to me to say in listening to the speech of the hon. Member for Gloucester was that one often comes across the attitude of taxpayers who say, "There is nothing for me in this year's Budget. Why is so-and-so getting something when my claims are at least as good?" Sometimes we tend to forget the fact that a concession once given goes on until it is revoked by a subsequent Finance Bill. If there is an improvement in personal allowances—and there have been three improvements in them since 1951—that continues from year to year, and each time the taxpayer pays his tax he has the benefit of it.
    It is against this background, and because every claimant on the Exchequer cannot be dealt with in every Finance Bill, that successive Chancellors of the Exchequer have to decide whose turn it is this time. They have to decide who it is who must now be enabled to take the next step forward. So we must view this against the background that the concessions previously made are still enjoyed, and indeed under this very Finance Bill, because of the Clauses reimposing the general rates of taxation.
    Therefore, when the hon. Gentleman quotes the tax remissions that have been made in initial allowances and in the Profits Tax, and contrasts unfavourably with this the smaller figure of direct taxation remitted under this Clause in a full year, again I say that this figure must be viewed in relation to the previous substantial remissions of taxation which have

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    been given in earlier Finance Bills and which are continuing to be enjoyed under this one. In so far as direct taxation relates to this year's Finance Bill, my right hon. Friend has concentrated such reliefs as he felt it possible to make on the people concerned in this Clause, namely, the aged with the age relief and the age exemption, the dependent relatives and so on.
    I then come to the remarks of the hon. Member for Sowerby (Mr. Houghton), who, if I may say so with respect, gave us his usual interesting general review of the Income Tax exemptions against the background of the general fiscal system. It is not necessary for me, nor would it be strictly in order, to follow him in his argument, but I think the hon. Gentleman was right in saying that this Clause is the one which usually concerns the largest number of taxpayers. Apart from the purchase Tax provisions of this Finance Bill I should be surprised if that is not equally true of this year. As regards age exemption Clause 12 exempts for the first time 200,000 of the poorest taxpayers and, in addition, it gives marginal relief to another 200,000 taxpayers who are the next poorest. Those are the ones who the House agreed should be the recipients of such relief as was possible this year, namely, the aged.
    We need not go into the difficulties which we all know have been experienced in recent years by that class of the community. It is not only that 400,000, because under the age relief another 50,000 obtained the full relief and others—I cannot give the exact figure—received a marginal relief. So nearly half a million taxpayers, of whom 400,000 are amongst the poorest who have previously paid tax and all of whom are aged, are those who qualify for relief and who are helped by this Clause.
    It is against this background that I commend the Clause to the Committee. It has been generally welcomed not only in this Committee but throughout the country. In spite of the fact that the hon. Gentleman the Member for Sowerby recommended my right hon. Friend to look at the other recommendations of the Royal Commission, actually telling him which paragraph to study, and remarking that he was disappointed that those were not included and that the Notice Paper was positively littered with good sugges-
    958
    tions, all I can say within the rules of order—I am not sure even then that it is within them—is that there is a great deal to be said against some of those other recommendations for exemption put forward by the Royal Commission, but I can assure the hon. Gentleman that my right hon. Friend has read the Notice Paper with great care.
    I think the Committee will agree generally that if there is only a comparatively small sum which can be remitted this year in the way of direct taxation my right hon. Friend has concentrated on those whom the Committee would most wish to see helped.
    Mr. Mitchison: I am afraid that on this side of the Committee we shall find that reply unsatisfactory, although we do not propose to divide against a Clause containing concessions. Indeed our general complaint about them is that they are insufficient. I cannot go into the Amendments that have been turned down by the Government this afternoon, but those who read HANSARD will see for themselves what has been denied and to whom.
    I cannot assess the value of the pages of the Order Paper which in relation to the Finance Bill, if I may be topical for a moment, somewhat remind me of the break-up value of a disused cemetery. Surrounded as I am by a collection of learned economists, contemplating a Government which proclaim so readily their capacity to govern in all fields, which some people from time to time believe, I have been looking at the function of the type of relief provided by this Clause.
    In the light of what this Clause ought to do, I cannot believe that this concession, or indeed many similar concessions in the past, is sufficient. After all, for the average individual citizen the personal reliefs, and nothing but the personal reliefs, make Income Tax a progressive form of taxation. The House has frequently been occupied lately with considering the difference between rates of taxes and between remembering that rates are not a progressive but a regressive tax on the whole, whereas by virtue of what we are considering now, the concessions made in Clause 12, it is claimed that Income Tax is progressive.
    Looking at these concessions, can we really feel that the objections which the Royal Commission took to the fairness

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    of income taxation as between some classes of the community and others are met by the type of concession that we find here? The first point in the Royal Commission's majority Report was the very steep rise at the beginning of the taxable group of people. It was very sharp indeed in the lower limits of taxable people. That tends to mean that the concessions in the way of personal relief—using the term in its broadest sense, referring not merely to the two particular personal reliefs—have on the whole been insufficient.
    Looking at the minority Report, we find rather definite points which I should like for the moment to recall to the attention of hon. Members. In paragraph 8 it is pointed out that the starting point of liability is at a much lower level of real income than before the war. Therefore, one would expect a corresponding increase in personal reliefs near that level. Then it is pointed out that the rise in taxation has been proportionately much greater in the lower categories of Income Tax payers, the £300-£1,000 range—broadly the people we are considering today—than in the case of those higher up the income scale. This was, of course, a Report which appeared in 1954 before the somewhat considerable concessions to Surtax payers made in a recent Budget, and what was true then is no doubt true now.
    Mr. Simon: I am sure that the hon. and learned Gentleman will not omit to state that it was also before the very considerable remissions in taxation to the very lowest Income Tax payers contained in the 1955 Budget.
    Mr. Mitchison: Yes, there has been something both ways, but I invite the Government to say that the conclusions drawn from the tables in that Report are now incorrect. They are broad conclusions and they seem to me to be correct now as they were then, though no doubt there may be differences of degree. It is in the light of conclusions of this sort—I will add a third in a moment—that I feel that Clause 12 contains concessions of a somewhat niggardly character.
    The third point was that the rise in the tax burden has been much greater on the family man than on married persons without children and much greater on married persons than on single
    960
    persons. I am willing to be corrected by those who have all these matters at their fingertips if any of these general conclusions which were correct then are incorrect now, but I believe I am right when I say that the broad picture presented by the minority Report is still true and that it is still the case that the first call on a Chancellor of the Exchequer concerned with maintaining the progressive character of income taxation and concerned with doing broad justice—
    The Temporary Chairman (Sir Norman Hulbert): I would remind the hon. and learned Gentleman that the Clause deals with three specific reliefs, and I think he is getting rather wide of it.
    Mr. Mitchison: I had not explained what I thought the Chancellor's first duty was, Sir Norman, but, if I may continue, the first duty will be relevant to the Clause.
    The first duty in the circumstances that I stated seems to me to deal with personal reliefs—that is what the Clause is about—and if that is the Chancellor's first duty, I would regard the personal reliefs in the Clause as insufficient in number and quantity. I cannot give details because the attempts which have been made by the Opposition to correct both those insufficiencies have been refused by the Government. Consequently, we take what we can on behalf of the taxpayer, but we look a little critically at the number of items on the plate and the size of each item, and we feel that in present times this taxpayer has not come out as well as have many other types of taxpayer, including the corporate one and the man whose very large income makes these personal reliefs less important to him.
    Question put and agreed to.
    Clause ordered to stand part of the Bill.

    Clause 13.—(INCREASE OF CERTAIN INITIAL ALLOWANCES.)
    6.45 p.m.
    Mr. Roy Jenkins: I beg to move, in page 8, line 9, at the end to insert:
    Provided that this subsection shall not apply in respect of expenditure incurred on the provision of road vehicles unless they are of a type not commonly used as private vehicles and unsuitable to be so used or are provided wholly or mainly for hire to or for the carriage of members of the public in the ordinary course of a trade.
    The Temporary Chairman: It will probably be for the convenience of the Committee to consider at the same time the next Amendment in the name of the right Dn. Member for Huyton (Mr. H. Wilson), in line 9, at end insert:
    Provided that in computing any additional initial allowance to be made to a person for any year by virtue of this subsection there shall be disregarded an amount equal to the annual average of the expenditure (if any) allowed to be deducted in computing profits and gains for the purposes of income tax for that and for the two next preceding years being expenditure incurred by that person on the provision of road vehicles which are of a type commonly used as private vehicles or not unsuitable to be so used and are not provided wholly or mainly for hire to or for the carriage of members of the public in the ordinary course of a trade.
    Mr. Jenkins: The purpose of the first Amendment is that the increase in initial allowances shall not apply to expenditure on private motor cars. The purpose of the Clause as a whole, I take it, is to give a fillip to the at present slightly declining rate of industrial re-equipment. The Opposition are certainly in general support of the Clause in its endeavour to achieve that purpose, though we think it does not go far enough in that direction.
    It is extremely doubtful, however, whether any hon. Member would argue that the supply of private motor cars is in real terms a piece of industrial equipment, as we normally understand the phrase. In the first place, I think it is undoubtedly the case that the purchase by firms of motor cars of a private type is at present almost entirely a replacement demand. To a very much less extent is it an increase in their total fleet of motor cars than a question of year by year providing directors or executives in the firm with new cars at a very rapid rate of turnover.
    Apart from the fiscal unfairness which is very often involved in this practice, I should say that on the whole the purchase of motor cars in this way at an almost steadily increasing rate of turnover is, if anything, a drain on the investment resources of the companies concerned, particularly as I think that the practice of buying large and expensive motor cars at frequent intervals for directors or high executives is one which operates more proportionately in medium sized and small companies than in big companies. I think that in a large number
    962
    of cases the practice encouraged by the present working of the initial allowances stepped up by the Clause would lead to an undesirable drain of investment resources rather than an addition to the true rate at which the firms build up their productive capacity.
    In dealing with the Amendment we have to consider not only the fairness of the existing position and the extent to which it is desirable to encourage investment of this sort but also the effect which our Amendment would have upon the state of the motor industry. As I represent a constituency which has a very great interest in the prosperity of the motor industry—though it is not as dependent on it as are the constituencies of my hon. Friend the Member for Birmingham, Northfield (Mr. Chapman) and my hon. Friends who represent Coventry—I would not wish to put forward an Amendment without considering very closely this other aspect. My right hon. Friend the Member for Battersea, North (Mr. Jay) moved a new Clause to the Finance Bill in 1956 which went further than my Amendment because it sought to put private motor cars outside the range of initial allowances altogether. The present Prime Minister, who was then Chancellor of the Exchequer, used some rather extravagant language about the deleterious effect which this would have upon the prosperity of the motor industry as a whole.
    Let us be clear about the logical position before we consider the facts of the case. To the extent that an Amendment along these lines—towards a mitigation of the application of the initial allowance in respect of private motor cars—would have an important effect upon the prosperity of the motor car industry, it must follow that this concession, which enables many people to buy motor cars which they would not otherwise buy, is a very important one. It cannot be argued at one and the same time that the position with which we are seeking to deal is unimportant, although if we were to correct it it would have a damaging effect upon the prosperity of an industry as large as the British motor car industry today.
    I do not believe that the Amendment would have a damaging effect, and I do not believe that the best-informed and most forward-looking people in the motor car industry believe that to be so, especially if, as should be the case, this

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    change were to be considered in conjunction with the level of Purchase Tax. At present the motor car industry is in a highly prosperous condition; far more so than when we last debated the matter, during the debates on the Finance Bill of 1956. That is very fortunate for the Government, in so far as they take pride in the index of industrial production being up rather than down. Incidentally, I am never sure whether the Government feel it to be a matter for congratulation when the index is up, stationary or down. But since, on the whole, they obviously do not wish it to go down, it should be a matter of great importance and comfort to them that the motor car industry is as prosperous as it is, because it is moving very rapidly against the general trend. If the level of production in that industry in the past twelve months had moved in step with that of British industry as a whole, instead of very sharply against the trend, I suspect that instead of being the same as it was a year ago the index of industrial production would be two or three points down.
    To that extent the industry is in a better state to stand up to changes than might otherwise be the case. One would not necessarily argue that we should impose a burden upon it for that reason, but if we are to make taxation changes which affect the industry we ought to consider whether it would be better not to allow it to depend upon this quite unreasonable and unfair working of the initial allowances but, instead, to give it a slighty lower level of Purchase Tax. If we were to keep the industry producing at the same level, while making an adjustment of this sort, it would mean that there would be a shift—
    The Temporary Chairman: Order. The hon. Member can argue about initial allowances but he cannot argue in favour of a reduction in Purchase Tax.
    Mr. Jenkins: I certainly do not wish to go against your Ruling, Sir Norman. One of the difficulties we always find in debating these complicated matters, and deciding what is and what is not in order, is that we can go very wide—almost completely wide—of the Amendment under discussion, whereas if we go a little wide it is much more apparent, and we are far more open to be challenged by the Chair.
    Mr. Donald Chapman: On 20th May we were debating Purchase Tax on commercial vehicles, and at that time it was felt to be in order to allow hon. Members, in developing their arguments, to refer to the question of initial allowances. The two matters are so interlinked that the debate on that occasion covered them both. There is, therefore, a case for allowing us to develop this argument to some extent.
    The Temporary Chairman: Today happens to be 17th June.
    Mr. J. T. Price: I respectfully submit for your consideration, Sir Norman, that when we are discussing initial allowances, and reducing our consideration to the terms of a mathematical formula, we must relate the initial allowances to the total cost of the vehicle, including Purchase Tax. With great respect, therefore, it seems quite irrational to imagine that we can distinguish between the two factors and at the same time have a comprehensive discussion of the point at issue. We are making initial allowances on the Purchase Tax as well as on the capital value of the machine.
    The Temporary Chairman: It is not in order to argue about alternative means of taxation.
    Mr. Jenkins: I accept your Ruling, Sir Norman, although the powerful points which have been raised by my hon. Friends have taken about five times as long as I would have taken to complete my point. All I will submit is that I should be allowed to put before the Committee arguments dealing with the submission—which I am sure will be put by the Paymaster-General and possibly other hon. Members opposite—that the Amendment might deal a damaging blow to the prosperity of the motor car industry. I would not in any way go outside that argument, which I am sure you will agree must be relevant to the Amendment.
    Accepting the fact that we want to order our system of taxation in such a way that we do not reduce total output in the British motor car industry, we must consider whether we wish to have the particular balance which is produced

    965
    by giving an enormous advantage to business men purchasing motor cars, as against those who are not business men. That is the only point that I am seeking to argue. The system which we at present operate undoubtedly produces a different shape of market than would be the case with a system of taxation which did not give this great and unreasonable advantage to the business man, but enabled the industry to maintain and expand its present level of production by depending less upon the increasing velocity of circulation of new cars amongst the business community and more upon bringing the possibility of buying new motor cars within the range of new income brackets. That would be fiscally more desirable and socially more just, and it would provide a more secure economic basis for the motor car industry.
    The Amendment fits in with others which have been put from this side of the Committee today and on previous occasions. A dispute may exist between hon. Members on the respective sides of the Committee as to what general level of taxation is compatible with the healthy working of the economy, but, whether we have a high, low or medium level of taxation, there should not be any dispute about the proposition that taxation should be levied in such a way as to bear as fairly as possible upon all sections of the community. That is not the position at present, because—to use a phrase which was used by my right hon. Friend the Member for Huyton (Mr. H. Wilson) a few years ago—there are great islands of fiscal privilege. This is a very big one, enabling a great number of new and expensive motor cars to be bought by business firms. Indeed, this is encouraged by the present operation of initial allowances, stepped up as they are under the Bill.
    7.0 p.m.
    Mr. Austen Albu: I support the Amendment. This is an attempt to deal with something akin to the use of business expenses which, as we have so often pointed out, narrows the tax base and therefore makes the general levels of direct taxation higher than they would otherwise be. There can be no doubt that very full advantage is taken of those provisions, and I have never been able to understand the logic of in-
    966
    cluding motor cars other than for reasons of pure practicability, and that is a matter which, I believe, can be dealt with.
    The object of the initial allowance was not to encourage the sales of particular types of machinery and plant but to encourage their purchase in order to increase productivity and to change and technically develop our industries. No one can argue that the continual change of motor cars, especially in the luxury range, does anything to raise the productivity of British industry. No doubt it enables businessmen to get rather more quickly from offices to clubs or places where they lunch on their expenses accounts, but I cannot really think that it helps British industry in any way. In any case, I am sure that there are ways of ensuring that those means of transport which are necessary for a manufacturing or trading company are relieved of taxation, if that is thought desirable. The present system has no logic in it at all.
    My hon. Friend the Member for Stechford (Mr. Roy Jenkins), in moving this Amendment, had something to say, as one would expect of one who has a constituency interest, about the effect of the Amendment on the motor manufacturing industry. I have no constituency interest, so perhaps I can be a little rougher about it than he was. We shall never, surely, have taxation relief for the sole purpose of encouraging the consumption of particular types of products. Those taxation reliefs are in the nature of subsidies, and that is what this concession is. A motor car industry which was dependent on subsidies and a similar type of stimuli to purchases would be an industry very dangerously placed indeed. I have very grave doubts about the motor industry's future in its present form. I should be loth to see the continuation of any concession to provide the motor industry with what is really an artificial market. This is extremely dangerous.
    I agree with my hon. Friend that a higher general level of consumption of motor cars by ordinary people is more desirable than a high turnover by a number of business purchasers, because the size of the home market for motor cars of all types must be determined by the level of the motor car industry's exports. We have seen in the last few years what happens to the home market

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    where the industrial or commercial market, which is, of course, what this Amendment is about, grows at the expense of exports and when the industrial output grows faster than the economy as a whole can stand. We are approaching the situation in which our imports of steel sheet and other raw materials exceed the total earnings which the industry is obtaining by its extra exports. There is a serious danger in an artificial stimulus to consumption in the motor car industry.
    The whole object of tax policy as it affects the price of motor cars must be to try to maintain the correct balance. I believe that there will be very substantial changes in the motor car industry, especially if the Paymaster-General has any success—which is extremely unlikely at the present time—in the negotiations that he is conducting for a Free Trade Area. The type of artificial stimulus given in the present concession of initial allowances is, apart from its social injustice, economically unsound.
    I would say one word about the practicability of these Amendments and how they can be carried out. One has to distinguish between the use of cars. One can either, as in the Amendment, refer to them by type, or one can, as has been suggested in the House before now by, I think, hon. Members opposite, mark those cars which are used for business purposes. If every car used for business purposes were marked like a commercial vehicle with the name of the company to which it belonged, I think that the present practice of buying large and expensive cars for the use of directors or anyone else would soon disappear. These would be the alternative methods by which I would propose to deal with the problem.
    To return to the main argument on the Amendment, it is that there is absolutely no logic at all in having the initial allowance for motor cars. It bears no relation whatsoever to the purpose of the initial allowance when it was originally introduced, and it is socially unjust as between different classes of consumers of transport.
    Mr. J. T. Price: I should like briefly to support the Amendment. In the first place, I would remind hon. Members opposite that my colleagues on this side of the Committee have consistently sup-
    968
    ported the extension of initial allowances and investment allowances for quite good economic reasons, as we see them. We have done so because we have felt that special inducement ought to be offered to industry to plough back profits into re-equipment and increased efficiency rather than to disperse profits in the form of large dividends.
    Surely, when we look at this question rationally, we are bound to confess, regardless of what our political angle may be on fiscal questions, that the allowance of 20 per cent. on the initial value of a motor vehicle which is used largely for private purposes in no way assists in the re-equipment of industry by the use of those surpluses which we should like to encourage to be ploughed back into industry.
    It is commonly known by anyone who has any contact with the business world that, particularly in large-scale industry and the newer industries, there is always a struggle for the services of qualified executives to fill the most important positions. In this struggle, it is almost axiomatic that one of the inducements of any important or well-established firm that wishes to attract the services of a competent executive is to offer, along with whatever salary is offered, a large glossy motor car which will be renewed at frequent intervals. I know from close personal knowledge that these offers are made and that no restriction is placed on the use of the vehicle for the purpose of the company's business. It is conveyed to the man offered the job that he will have the unlimited free use of the car for his own private pleasure and that of his family. If that were done at the expense of the company, it would be very difficult to resist it in the sense that we are objecting to it in these Amendments; but when it is being done, not at the expense of the company making the offer, but at the expense of the Revenue and the Treasury, to that extent a burden is transferred to the rest of the taxpayers which ought not to be borne by them.
    As I have said, the initial allowance has no reference whatever to motor cars when we consider its application to the requirement of ploughing back capital into industry. We have seen a wide extension of this abuse in recent years. From time to time we have heard critical statements from Treasury Minister

    969
    about the payment of benefits in kind instead of cash to avoid taxation. If a man is offered large-scale benefits in kind, including the one mentioned in the Amendments—the provision of a motor car—to that extent he does not pay tax on the equivalent capital value of the service given by the vehicle and what it brings to him in personal amenities. We object to that and we do so, as we hope, on sound financial principles.
    I think that my hon. Friend the Member for Stechford (Mr. Roy Jenkins) made a valid point when he said that none of us on this side of the Committee—I am sure the same applies to hon. Gentlemen opposite—wishes to do anything detrimental to the continued prosperity of the motor industry. But we say that these entirely artificial fiscal arrangements—giving substantial benefits to those who purchase motor cars for executives or other servants as an inducement to secure their services—render no kind of economic service to the industry or to the economy of the country.
    Mr. Stevens: Is it not a fact that in the case of any director or senior executive in receipt of a salary of £2,000 a year or more, the value of benefits, which would include the private use of the company's motor cars, is required to be returned each year under Schedule E to the Inspector of Taxes?
    Mr. J. T. Price: The hon. Gentleman is, of course, accepted in this Committee as an authority on taxation. If I am paying him an unworthy compliment, I will not withdraw it and he may take what satisfaction he likes from what I have said. But do not let him delude himself or me—he will not delude me although he may delude himself—that these motor cars about which I am complaining are handed over to the people who use them. They remain the property of the company and when the company is making its return for general taxation on the various schedules, they are charged back against the taxation imposed on the company in an appropriate depreciation allowance of 10 per cent. having regard to the ten-year life of the car, so that in the first year there may be as much as 30 per cent. charged back.
    Not only is the capital value of the vehicle charged back on its purchase
    970
    price from the company or agent providing it, but a very large proportion of the Purchase Tax is included in addition. I say that it is a Gilbertian situation for any Government to go on with this sort of thing. I am a member of a motoring organisation, like most hon. Members and I understand that propaganda is not always identical with truth. But when members of motor organisations complain that a large amount of the taxation collected from motorists is not returned in the form of more high-class roads and all the other things motorists want, they forget that a good deal of that taxation is charged back in business accounts, because over 80 per cent. of the motor vehicles in the country are chargeable wholly or mainly to business accounts.
    I repeat what has been said before in these finance debates. There are many private citizens who have not the advantage of this highly lucrative arrangement enjoyed by many business people, and they strongly object to being treated on an unequal footing regarding taxation when they buy a vehicle for their private purpose. It is about time the Treasury woke up to this. Treasury officials are not unaware of the situation. I have had the privilege and pleasure of saying these things before both in this Chamber and privately to Treasury Ministers. If the Ministers were honest with this Committee and with themselves, they would admit that there is great force in the case we are putting forward.
    We appeal to the Treasury seriously to consider these Amendments. We consider this an entirely unsatisfactory and unfair discriminatory system as applied to the purchase of private motor cars for private pleasure in order to induce people to give their services. I strongly support the Amendment and appeal to the right hon. Gentleman responsible for this Bill to come with us some of the way in meeting this case which we have tried to present moderately and temperately tonight.
    7.15 p.m.
    Mr. Chapman: I think that I ought to pay a tribute to my hon. Friend the Member for Westhoughton (Mr. J. T. Price). He has raised this matter from year to year in our Finance Bill debates and has been tenacious about it. He has been exposing continually the taxation evasion and abuse which we all know

    971
    this to be. He should be very pleased that more and more people are coming round to his view that it is time something was done about it.
    We have already had a debate on this subject. The position was put very well indeed by the hon. Member for Kidderminster (Mr. Nabarro) on 20th May when we debated the question of the taxation of commercial vehicles and the Purchase Tax upon them. By taking the 30 per cent. Purchase Tax on chassis and by saying, quite rightly, that there is an initial allowance of 20 per cent. plus a depreciation allowance of 25 per cent. per annum for commercial vehicles, the hon. Member for Kidderminster was able to show that the net effect of the two taken together was lunatic. The hon. Gentleman said on 20th May:
    "It follows that the amount of Purchase Tax which is paid by a buyer of one of these articles namely a chassis, gives what is in effect, an interest-free loan to the Treasury over a period of five years."—[OFFICIAL REPORT, 20th May, 1958; Vol. 588, c. 1173.]
    This is indeed the general situation. I am not talking about abuse in the case of passenger-carrying vehicles, but in the case of commercial vehicles. The two together, the Purchase Tax and the depreciation allowance, end up by creating the rather farcical situation outlined by the hon. Member for Kidderminster on 20th May.
    On that occasion we had a very unsatisfactory reply from the Solicitor-General. All the right hon. and learned Gentleman could say about these calculations, and this general problem, was that the Treasury had made no estimate of the impact of a package deal. Nor had the Treasury considered some way of reducing Purchase Tax and at the same time cutting out these initial allowances. The right hon. and learned Gentleman could give no indication of the way in which the Treasury was examining the general problem. We consider that the Treasury should begin to think whether some such package deal could be made on a future occasion.
    I do not expect the right hon. Gentleman even now to say that the Government are in favour of some package deal of this kind, or anything similar. But late in the day during the debate on 20th May, after we had, so to speak, asked him to intervene personally, we got from
    972
    the Chancellor an assurance that in the course of the coming year he would receive representations from the motor car industry about the general problem of motor car taxation. This statement has been well received by the industry, and I think the Chancellor ought to expect that representatives of the industry will try to come to see him later in the year to discuss this whole matter. If so, I hope that the Paymaster-General will now say that this will be one of the matters that the Chancellor will be quite willing to discuss.
    Here, indeed, is a very formidable case of evasion in the case of passenger-carrying vehicles, and an almost farcical position in the case of goods vehicles. It really is time that these matters, together with all the other problems of motor car taxation, were reviewed by the Treasury, in consultation with the industry during the coming year. I do not want to press the right hon. Gentleman to give an assurance that would be embarrassing, but the Chancellor has given that broad assurance that he would receive this general respesentation, so what I ask him now is that these matters should also be included in that general review which we believe will take place in the next few months.
    The Paymaster-General (Mr. Reginald Maudling): In reply to the hon. Member for Northfield (Mr. Chapman), I can certainly confirm that my right hon. Friend would be very glad to receive the representations of the motor car industry on any subject affecting its welfare, including, if necessary, this present matter, but I must say that I do not see that this point has much relevance to the Amendment now before the Committee.
    In moving the Amendment, the hon. Member for Stechford (Mr. Roy Jenkins) placed quite a bit of the burden of his argument on countering what he thought that I would say about the effect on the motor industry. In fact, I do not intend to say anything about the effect on the motor car industry, because, whether or not it is accepted, I do not think that this Amendment would have any significant effect on the demand for motor cars. The effect of the Amendment would be to leave the initial allowance on motor cars used for business purposes at 20 per cent., rather than increasing it

    973
    to 25 per cent. I do not think, really, that that difference would make any noticeable change in the demand for motor ears in this country—
    Mr. Harold Wilson: The right hon. Gentleman will realise, of course, that what we should like to have is a debate on the whole question of initial allowances for motor cars, and not whether the allowance should be 20 per cent., or 25 per cent. or nought. That has been discussed many times before, but it would be quite out of order to put down an Amendment to reduce the figure to nought, as that would be introducing a charge. Therefore, the broad issue has to be mounted on this rather narrow Amendment. But if the right hon. Gentleman were now to announce that the Government were to drop the allowance to nought in this case, it would be a very suitable occasion for such debate.
    Mr. Maudling: I think that the right hon. Gentleman has it the wrong way round, because if an Amendment to reduce the figure to nought were in order it would give me the sort of argument that hon. Members opposite suggested I would use, and which I do not need to use now. The arguments that I propose to advance against the Amendment are, I think, more relevant—
    Mr. Roy Jenkins: Is the right hon. Gentleman advancing the argument that the level of initial allowances at 20 per cent. or 25 per cent. is not really sufficiently different to affect the demand for whatever goods are being purchased?
    Mr. Maudling indicated dissent.
    Mr. Jenkins: If he is not doing that, why draw the distinction between motor cars and other forms of capital equipment?
    Mr. Maudling: The demand for motor cars, and the position of the industry, is very different from the demand for other capital goods. The arguments that I shall now put forward are not only relevant to this Amendment but would, I think, have been even more relevant to an Amendment to double or to abolish this allowance on motor cars.
    The charge of Income Tax on businesses depends on their profits, and the capital allowances are designed to ensure that, in the computation of their profits
    974
    for tax purposes, a proper allowance is made for the cost of the capital assets used in earning those profits. The case made by the hon. Gentleman and his colleagues is that a special exception from this rule should be made in the case of motor cars suitable for private use, and those motor cars only. I think that is the case that must be sustained in support of this Amendment, or in support of any similar Amendment, and I do not think that it has been sustained in any way this afternoon.
    Only three main arguments have been advanced for treating motor cars used for business purposes on a wholly different basis from any other capital asset used for business purposes. The hon. Gentleman's first argument was that, by and large, motor cars at the moment are bought for replacement rather than for expansion purposes. I would have thought that that would apply to a very large proportion of all the new plant and machinery going into British industry today. A great deal of the new plant and machinery now going into British industry is not sheer expansion of capacity but replacement of existing capacity. Therefore, I do not think that that is at all a good argument for the special treatment of motor cars.
    Secondly, the hon. Gentleman said that the buying of new motor cars was an excessive drain on the companies' investment resources. For myself, I should have thought that it would probably he wiser to leave that decision to the businesses themselves. If they think that it is an excessive drain on their investment resources, I think that they will cease that expenditure.
    The third argument, and the one to which most importance appears to be attached by hon. Members opposite, is that there is widespread abuse in this matter. I noticed that the hon. Member for Stechford put his argument far more on the economic basis, with which I have been dealing so far, whilst others of his hon. Friends addressed themselves more to the question of abuse. There still seems to be some misunderstanding about the tax position of those motor cars that are suitable for use for private purposes. The hon. Member for Westhoughton (Mr. J. T. Price) certainly seemed to be under a slight misapprehension about the position of cars owned by companies.

    975
    In the first place, where there is a car not owned by a company but owned by a taxpayer and used by him partly for business and partly for private purposes, that part of the use that is private is taken into account in working out the allowances he can take in computing his business profits. For instance, if he uses it half for business and half for private purposes, only half of the capital allowances are allowed to him in computing his profits. That applies not only to the proportion of private use, but also if the type, size or expense of the car was greater than would be justified solely for its use for business purposes—
    Mr. J. T. Price: I quite understand what the right hon. Gentleman has just put to the Committee, that there is an allocation where the vehicle is used by the individual partly for his private purposes and partly for his business. I am under no misapprehension at all about that. I think that I know the situation as well as he does. My complaint is based, not upon the division of the two functions of the car, but on the practice of the car being wholly owned and controlled by the company, and unlimited use of the vehicle being given to the individual for his own private purposes. In those circumstances, the Treasury cannot make the sort of assessment that the Paymaster-General has just described.
    Mr. Maudling: If the hon. Gentleman had only waited for a second, I was about to deal with that. There are two points—there is the point of the privately-owned car being used partly for business and partly for private purposes, and the point of the company-owned car. In the case of the company-owned car, my hon. Friend the Member for Langstone (Mr. Stevens) pointed out the tax position, which is that in so far as the car owned by the company is given or lent to a director or executive who is paid more than £2,000 a year and is used by him for private purposes, the cost of that private use of the car is treated as part of that individual's salary, is returnable as such and is chargeable in full both as to Income Tax and Surtax.
    Therefore, if he is charged fully as to tax on the benefit that he obtains it is reasonable that the company should have the benefit of the allowances because the company's provision of the car for use
    976
    for private purposes is clearly analogous to additional salary and in the case of those people who are caught by the Income Tax Act, 1952, it is treated as additional salary both for Income Tax and Surtax purposes.
    I think, therefore, that both in the case of the privately-owned car and in the case of the company-owned car—by reason of legislation for which, I think, the party opposite was responsible—there is full provision for charging for tax all private use of cars which is not justifiable, within the relevant statutes, as business expenditure. I therefore do not think that a case has been made out that this Amendment can be supported on grounds of abuse, or on grounds of the inadequacy of the tax laws. Nor, for the reasons that I put forward earlier, do I think that any economic case has been made out, or can be made out, for putting this form of plant and equipment on a basis slightly different from that of any other form of plant and equipment. I recommend the Committee to reject the Amendment.
    7.30 p.m.
    Mr. Douglas Jay: We have to bring forward this Amendment every year because, under the present Government, we have a new Chancellor every year and as soon as one has understood the argument he moves to another place and we have to start all over again. That is why I was a little disappointed with the Paymaster-General's speech, because off and on he has been at the Treasury for some years and I had hoped that he would have grasped the argument by now.
    We are not putting forward this argument in any party or contentious sipirit. We are trying to appeal to the better instincts of the Treasury Ministers, and I am sure that they have some better instincts left, however long or short a time they have been at the Treasury. If we have to divide the Committee on this issue tonight, it is not in order to be contentious, but to try to stir the better instincts of the Treasury Ministers and to establish the hope that they may keep an open mind on the issue.
    It is necessary to recall the history of initial allowances. When they were introduced by my right hon. Friend the Member for Bishop Auckland (Mr. Dalton), with the support of Sir John Anderson, who had been his predecessor at the Treasury, what everybody had in mind

    977
    was the re-equipment of British industry with automatic looms and mechanised foundries and plant of that kind and not motor cars for stockbrokers. I am not saying that stockbrokers ought not to have motor cars.
    Mr. Stevens: Is the right hon. Gentleman not aware that motor cars for stockbrokers most emphatically are not the subject of Income Tax relief?
    Mr. Jay: It all depends on their use. I do not want to introduce any hint of prejudice into the argument. I am merely saying that what we all had in mind was the re-equipment of industry, and I do not think any of the Chancellors or any hon. Member realised that we were giving a concession which affected private motor cars.
    What happened was that the Inland Revenue naturally and legitimately stepped in and used the traditional argument, which the Paymaster-General trotted out tonight, that where a motor car happened to be a tool of trade it was fiscally on all fours with any other form of equipment and that there must therefore not be a special exception for motor cars. That was the Paymaster-General's argument, and in all these years it is the only serious argument which has ever been advanced against the proposals which we are making tonight.
    I remind the Paymaster-General that this article in the sacred books of the Inland Revenue was entirely abandoned when the present Lord Privy Seal introduced investment allowances, I think with the assistance of the Paymaster-General, in the Budget of 1954. When investment allowances were introduced, it was apparent to the present Lord Privy Seal that it would be a scandal if investment allowances were given for private motor cars, and he admitted that fiscally and practically it was possible to make precisely this special exception which the Paymaster-General now says it is impossible to make. There is, therefore, no substance in that part of the argument, and we can reasonably consider it from a general moral and economic point of view.
    There is another point which nobody has mentioned. Quite a few Chancellors—we have had so many—when they have considered this problem freshly have been influenced by another argument which we
    978
    have not heard tonight, but which is quite persuasive.
    Mr. William Shepherd: The right hon. Gentleman will remember that investment allowances were given to encourage the use of certain articles of capital equipment. It was quite right for the Government to take the view that they did not wish to encourage the use of motor cars, which may be essential in many respects, but not in that respect.
    Mr. Jay: That is my point, because the only objection is that it is fiscally and practically impossible to make this distinction.
    I was about to say that Chancellors have also been influenced by the argument that there are certain classes of taxpayers, such as doctors, midwives and travelling workers of that kind, who in a genuine and special sense use a private motor car as a means of business. It is now argued that it would be unfair to withdraw the concession from them, since they are very worthy people. Those who advance that argument forget that such people get the ordinary depreciation allowance anyway. For them a motor car would possibly be classed as a 100 per cent. tool of trade, and they would get the ordinary depreciation allowance. All that is at issue is whether they should get the initial allowance, which is an interest free loan, in addition.
    Mr. Maudling: If the right hon. Gentleman is arguing that they would lose nothing by losing the initial allowance, how can he argue that they gain too much by getting it?
    Mr. Jay: The right hon. Gentleman cannot answer the point that way. I am not arguing that they would lose nothing, but I am saying that they would be reasonably and properly treated and do not need this additional concession on top of the ordinary depreciation allowance.
    So much for the fiscal and legal aspect of the matter. On the economic side, the irony of the argument is that although we appear to be dealing with a rather small point of fiscal law, there is a good deal of evidence that economically this is a substantial issue relating to the whole state of the country's internal economy. It is true that when we made this argument two years ago the present Prime Minister replied that, if the proposal to

    979
    abolish the allowance altogether were accepted, it would be a savage blow to the motor industry. As we have not been given figures, I do not know what proportion of cars sold in the home market are sold with the assistance of the initial allowance. There are many people, such as accountants and persons in the motor industry, who say that the figure is 70 or 80 per cent. of the total.
    Mr. J. T. Price: I am sorry that I cannot produce the quotation tonight, but I think I am correct in saying that two years ago the research staff of the Economist suggested the figure of more than 80 per cent. I do not have a clue as to what the figure is now, but I should think that it was something of that order.
    Mr. Jay: That figure has been frequently quoted. If it is the case that the removal of the concession would have a serious effect on the motor industry, then it must be a very substantial abuse and there must be much revenue lost.
    I agree that the Amendment which we are formerly moving to leave the allowance at 20 per cent. instead of 25 per cent. would presumably not present very much revenue to the Chancellor. However, I draw the Chancellor's attention to the fact that we are trying to present him with some revenue and not, as is more usual, to take it from him—and I hope that that is some attraction. Can the Paymaster-General say what is the total annual loss of revenue which results from the initial allowance being applied to private motor cars? There are those who say that it is as much as £30 million or £40 million a year. If it is as large as that, it is a serious item in our accounts.
    Economically, there is not much doubt, on the basis of this evidence, that the initial allowance has been a subsidy from the Treasury to the sale of cars in the home market ever since the war, an effect which was not intended. I shall not enter into the argument, which we so often have, about whether a good home market is a basis for exports. The truth is that when an industry is under-producing, bigger sales at home probably help it to export more, but when it is producing to capacity, more sales at home are an impediment to exports. In most years since the war, and it is true now, the motor industry has been producing very near
    980
    to capacity. There is not much doubt that this deliberate stimulus to sales in the home market, which the Treasury has been effecting on the one hand through initial allowances while trying to restrain it on the other hand by Purchase Tax, has been a substantial national cost in terms of steel and other resources.
    I agree with my hon. Friend the Member for Stechford (Mr. Roy Jenkins)—and I only say this in passing—that if it were shown that a reduction or withdrawal of the allowance would have a serious effect on the motor industry, it would perhaps be a much better general solution to give a concession of the Purchase Tax and remove the allowance at the same time. That would at least put the purchaser of the purely private car and the business car on an equality instead of discriminating, as at present, so heavily in favour of the business car.
    I leave aside the argument that what we are proposing would make no difference one way or the other, which argument I have heard advanced. If the initial allowance is of no help, there would be no objection to withdrawing it, but I do not think anyone would regard that as a serious argument. I appeal to the Chancellor and the Paymaster-General at least to keep an open mind on this matter. It seems to me that this is a case of one of those islands of fiscal privilege, as my hon. Friend said. I do not call it a scandal, but it does amount to an abuse if the figures are anything like what has been said by the Economist and others.
    It seems to me that it is unfair fiscally, that it is undesirable economically, and that it is perfectly practicable, as we saw from what was done in the case of investment allowances, legally to correct the position. If it is to be done, surely the time to do it is when the motor car industry is, as we are all very happy to see, in a thoroughly prosperous state.
    Mr. Diamond: I hope we shall not let the Paymaster-General get away with the argument he put without dealing fully with all those points on which one feels the Treasury Bench should be most happy to accept the Amendment, and showing that the Government appreciate that here is one place where tax dodging has focused the attention of very many people. The Treasury is under suspicion at the moment with its withdrawal of

    981
    the dividend stripping taxation proposal and is under a charge of helping or, at least, of not being sufficiently harsh towards tax dodgers at this point of time, and one would have thought that the Amendment would have been one they would have been most happy to accept.
    I referred to an earlier Amendment as affecting Honest John. No one by any stretch of the imagination could refer to this Amendment as one affecting Honest John. Anything but that. This part of the Clause, if it is left unamended, will encourage in a most unsatisfactory way the diversion of resources to ever bigger and better motor cars, partly at the expense of the Treasury.
    The economic argument has been very adequately put by my hon. Friend the Member for Stechford (Mr. Roy Jenkins) as the only right thing to do as far as exports are concerned. The Government here have suggested giving art additional allowance as an encouragement to the exports of motor cars, which are such a vital part of our economy. Let us start from the beginning. Initial allowances are granted on plant and machinery and industrial buildings and, in this particular connection, on plant and machinery. It is a doubtful extension of English to include a motor car used for the conveyance of employees of a company from place to place in what is called plant and machinery at all.
    One starts off by having initial allowances on plant and machinery for the very good reason that we want to encourage what the Chancellor himself referred to in his Budget speech—the willingness of those engaged in running plant and factories to be progressive and to change from something that is now old and becoming obsolete to something that is up to date, which is, incidentally, the answer to the point which the Paymaster-General made when he said that there was no difference in changing cars and changing plant. One changes plant and machinery in order to get rid of plant which is no longer doing the job efficiently and to get newer plant that will do it more efficiently. To that extent, it was in the country's interests to get rid of old plant.
    982
    7.45 p.m.
    That cannot possibly be said to apply to motor cars. It is doubtful whether motor cars should ever have been included in these allowances from the beginning. The case for motor cars being included rests on a very thin argument indeed. The Paymaster-General says that the motor car is in and he saw no good reason why it should be taken out, but the real point is that there is very little reason why it should be in at all. As has been shown with the investment allowance, it is very easy to differentiate between motor cars and other items of so-called plant for the purpose of revenue relief.
    The point I want to make is that there is no real justification for including the motor car in the first place, but if we do include it, the last thing we want to do at this point of time is to encourage inflationary expenditure on bigger, brighter, longer and more space-taking motor cars, which is in fact what happens. This is a great psychological encouragement, though, of course, it is only from 20 to 25 per cent., but when the Government say to a consumer, "We are going to increase your allowance by a quarter," does the consumer think the Government do not want him to buy a new car—an up-to-date, new car, a bigger and brighter car? If the Government take the positive step of introducing an allowance like this, a motor car owner says to himself that it is obviously in the country's interests that he should discard his car which takes up only 16 or 18 ft. and buy another which will take up 20 or 24 ft., or whatever it may be.
    The Chancellor is taking up the time of Parliament in bringing in a Clause in the Finance Bill which gives the motor car owner this advantage, provided that it is used for business purposes. I should have thought that this was entirely inflationary. It certainly has a considerable effect. It either means cars being changed more often, as the Paymaster-General said, which is no particular benefit to anybody, so long as the motor car industry is fully employed, or it means that a man gets a more expensive car, and that means a bigger one. What advantage to the nation is there in that?
    There is the other aspect of it, to which the Paymaster-General referred. What

    983
    he said, of course, was, theoretically, 100 per cent. right, and, in practice, 5 per cent. right, in my humble experience, if he thinks that we can deal with the matter as simply as that—this business of 50 per cent. for private and 50 per cent. for business use. My hon. Friend was dead right so far as a quarter of a century's experience in practice is concerned, and the Paymaster-General is only 5 per cent. right.
    How can Inland Revenue officers of the greatest ability and with the powers at their elbow proceed to winkle out this information relating to a car owned by a company which is put at the disposal of an employee who works five days a week and goes home at the weekend? How do they know what he does with the car at the weekend? How are they going to apportion the mileage and the additional initial allowance which the Paymaster-General referred to? Why does not an hon. Member opposite get up and—
    Mr. Stevens: To respond to that invitation, may I say that the hon. Member for Gloucester (Mr. Diamond) belongs to a profession of which I am also a member? He will know perfectly well that a very large number of these inquiries come through his office to him and to other members of the profession. Is he suggesting that his profession and mine, in answering these inquiries as to how much is private use and how much is public, are perjuring themselves, because if so, he is a disgrace to his profession?
    Mr. Diamond: The hon. Member belongs to a very distinguished profession and is a great luminary of that profession. Let us leave it at that. I repeat that it is beyond the capacity of the Inland Revenue officers—if the Chancellor doubts it, let him ask them—to needle out this information relating to motor cars which are wholly owned by a company and used by that company, as my hon. Friend the Member for Westhoughton (Mr. J. T. Price) rightly said, as part of the conditions to entice a particular employee to become an employee.
    One has only to read the enormous advertisements in the Sunday papers and elsewhere to see how difficult it is for large firms to attract to their employment the right sort of brains. They
    984
    make all sorts of offers. The right hon. Gentleman must know that, in the City of London, and, indeed, throughout London, if someone wants a clerical employee the first question asked by an inquirer is, "What about luncheon vouchers?" It is not a question about hours of work or about promotion. There it is on a small scale.
    On a larger scale, the question is, "What about a car?" Why does the Paymaster-General think that the manufacturers of Bentley motor cars advertise and say, "Go into partnership with a Bentley"? I think I recall the terms of the advertisement aright. It is a very powerful advertisement; the manufacturers are appealing to every company to buy a Bentley. Why buy a Bentley? It has now become part of the esteem in which a businessman is held that he should own and run a Bentley and be seen by everyone running a Bentley. A Bentley is a very expensive motor car. It is a very expensive initial allowance, and the difference between 20 per cent. and 25 per cent. on a Bentley is worth having. The right hon. Gentleman said that it is only another 5 per cent., but there is the inducement to go one better.
    My right hon. Friend the Member for Battersea, North (Mr. Jay) referred to midwives and doctors. The doctor who has a car and uses it, quite properly, for professional purposes is a human being also and may well like a nicer and better car, something to indicate how well he is getting on in his profession. I know from experience of two occasions on which I have been rung and asked, "Is this really true? Can it be done? If so, I am scrapping my so-and-so and getting a more expensive one". If that is what the Chancellor wants, let him say so. I did not think that it is. I thought he wanted to discourage inflationary moves of this kind. I thought he wanted to give a sign to the nation that the Government were not on the side of the tax dodger. He is in great jeopardy at the moment of being held to be on the side of the tax dodger because of what he has done in another matter which we shall be debating shortly. In view of these very powerful arguments and because what the Paymaster-General said is, as usual, right in theory but utterly wrong in practice, I hope that the Chancellor will say that he will reconsider the matter.
    Question put, That those words be there inserted:—
    The Committee divded: Ayes 196, Noes 238.

    Division No. 158.]

    AYES

    [7.54 p.m.

    Ainsley, J. W.

    Hale, Leslie

    Paling, Will T. (Dewsbury)

    Albu, A. H.

    Hall, Rt. Hn. Glenvil (Colne Valley)

    Pannell, Charles (Leeds, W.)

    Allaun, Frank (Salford, E.)

    Hamilton, W. W.

    Parker, J.

    Allen, Arthur (Bosworth)

    Harrison, J. (Nottingham, N.)

    Paton, John

    Allen, Scholefield (Crewe)

    Hastings, S.

    Pearson, A.

    Awbery, S. S.

    Hayman, F. H.

    Peart, T. F.

    Bacon, Miss Alice

    Herbison, Miss M.

    Pentland, N.

    Balfour, A.

    Hewitson, Capt. M.

    Popplewell, E.

    Bence, C. R. (Dunbartonshire, E.)

    Hobson, C. R. (Keighley)

    Prentice, R. E.

    Benson, Sir George

    Holman, P.

    Probert, A. R.

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

    Houghton, Douglas

    Proctor, W. T.

    Blenkinsop, A.

    Howell, Charles (Perry Barr)

    Pursey, Cmdr. H.

    Blyton, W. R.

    Hoy, J. H.

    Rankin, John

    Boardman, H.

    Hubbard, T. F.

    Redhead, E. C.

    Bottomley, Rt. Hon. A. G.

    Hughes, Emrys (S. Ayrshire)

    Reeves, J.

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

    Hunter, A. E.

    Reid, William

    Bowles, F. G.

    Hynd, H. (Accrington)

    Reynolds, G. W.

    Boyd, T. C.

    Irvine, A. J. (Edge Hill)

    Rhodes, H.

    Braddock, Mrs. Elizabeth

    Irving, Sydney (Dartford)

    Roberts, Albert (Normanton)

    Brockway, A. F.

    Janner, B.

    Roberts, Goronwy (Caernarvon)

    Broughton, Dr. A. D. D.

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

    Robinson, Kenneth (St. Pancras, N.)

    Burke, W. A.

    Jeger, George (Goole)

    Rogers, George (Kensington, N.)

    Burton, Miss F. E.

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

    Ross, William

    Butler, Herbert (Hackney, C)

    Jenkins, Roy (Stechford)

    Royle, C.

    Butler, Mrs. Joyce (Wood Green)

    Johnson, James (Rugby)

    Silverman, Julius (Aston)

    Callaghan, L. J.

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

    Silverman, Sydney (Nelson)

    Carmichael, J.

    Jones, David (The Hartlepools)

    Simmons, C. J. (Brierley Hill)

    Castle, Mrs. B. A.

    Jones, Elwyn (W. Ham, S.)

    Skeffington, A. M.

    Chapman, W. D.

    Jones, Jack (Rotherham)

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

    Clunie, J.

    Jones, J. Idwal (Wrexham)

    Slater, J. (Sedgefield)

    Collins, V. J. (Shoreditch & Finsbury)

    Kenyon, C.

    Smith, Ellis (Stoke, S.)

    Cove, W. G.

    Key, Rt. Hon. C. W.

    Sorensen, R. W.

    Craddock, George (Bradford, S.)

    King, Dr. H. M.

    Soskice, Rt. Hon. Sir Frank

    Cronin, J. D.

    Lawson, G. M.

    Spriggs, L.

    Crossman, R. H. S.

    Lee, Frederick (Newton)

    Stewart, Michael (Fulham)

    Dalton, Rt. Hon. H.

    Lee, Miss Jennie (Cannock)

    Storehouse, John

    Darling, George (Hillsborough)

    Lever, Leslie (Ardwick)

    Stones, W. (Consett)

    Davies, Harold (Leek)

    Lewis, Arthur

    Summerskill, Rt. Hon. E.

    Davies Stephen (Merthyr)

    Lindgren, G. S.

    Swingler, S. T.

    Deer, G.

    Mabon, Dr. J. Dickson

    Sylvester, G. O.

    de Freitas, Geoffrey

    McCann, J.

    Taylor, Bernard (Mansfield)

    Diamond, John

    MacColl, J. E.

    Taylor, John (West Lothian)

    Dodds, N. N.

    MacDermot, Niall

    Thomas, George (Cardiff)

    Donnelly, D. L.

    McGhee, H. G.

    Thomson, George (Dundee, E.)

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

    McGovern, J.

    Ungoed-Thomas, Sir Lynn

    Dye, S.

    McInnes, J.

    Warbey, W. N.

    Ede, Rt. Hon. J. C.

    McLeavy, Frank

    Watkins, T. E.

    Edwards, Rt. Hon. John (Brighouse)

    MacMillan, M. K. (Western Isles)

    Weitzman, D.

    Edwards, Rt. Hon. Ness (Caerphiliy)

    MacPherson, Malcolm (Stirling)

    Wells, William (Walsall, N.)

    Edwards, Robert (Bilston)

    Mann, Mrs. Jean

    Wheeldon, W. E.

    Edwards, W. J. (Stepney)

    Mason, Roy

    White, Mrs. Eirene (E. Flint)

    Evans, Edward (Lowestoft)

    Mitchison, C. R.

    Wilcock, Group Capt. C. A. B.

    Fernyhough, E.

    Monslow, W.

    Wilkins, W. A.

    Finch, H. J.

    Moody, A. S.

    Willey, Frederick

    Fitch, E. A.

    Morris, Percy (Swansea, W.)

    Williams, David (Neath)

    Foot, D. M.

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

    Williams, Rev, Llywelyn (Ab' tillery)

    Forman, J. C.

    Mort, D. L.

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

    Fraser, Thomas (Hamilton)

    Moyle, A.

    Willis, Eustace (Edinburgh, E.)

    George, Lady Megan Lloyd (Car' then)

    Mulley, F. W.

    Wilson, Rt. Hon. Harold (Huyton)

    Gibson, C. W.

    Neal, Harold (Bolsover)

    Woodburn, Rt. Hon. A.

    Gordon Walker, Rt. Hon. P. C.

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

    Woof, R. E.

    Greenwood, Anthony

    Oliver, G. H.

    Yates, V. (Ladywood)

    Grenfell, Rt. Hon. D. R.

    Oswald, T.

    Younger, Rt. Hon. K.

    Grey, C. F.

    Owen, W. J.

    Zilliacus, K.

    Griffiths, Rt. Hon. James (Llanelly)

    Padley, W. E.

    TELLERS FOR THE AYES:

    Griffiths, William (Exchange)

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

    Mr. Short and Mr. J. T. Price.

    NOES

    Agnew, Sir Peter

    Baldock, Lt.-Cmdr. J. M.

    Bell, Ronald (Bucks, S.)

    Aitken, W. T.

    Baldwin, A. E.

    Bennett, F. M. (Torquay)

    Amery, Julian (Preston, N.)

    Barber, Anthony

    Bevins, J. R. (Toxteth)

    Amory, Rt. Hn. Heathcoat (Tiverton)

    Barlow, Sir John

    Biggs-Davison, J. A.

    Arbuthnot, John

    Barter, John

    Bingham, R. M.

    Armstrong, C. W.

    Batsford, B. C. C.

    Birch, Rt. Hon. Nigel

    Ashton, H.

    Baxter, Sir Beverley

    Bishop, F. P.

    Atkins, H. E.

    Beamish, Col, Tufton

    Body, R. F.

    Bonham Carter, Mark

    Holland-Martin, C. J.

    Noble, M. A. C. (Argyll)

    Bossom, Sir Alfred

    Holt, A. F.

    Oakshott, H. D.

    Bowen, E. R. (Cardigan)

    Hope, Lord John

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

    Boyle, Sir Edward

    Hornby, R. P.

    Orr, Capt, L. P. S.

    Braine, B. R.

    Hornsby-Smith, Miss M. P.

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

    Braithwaite, Sir Albert (Harrow, W.)

    Horobin, Sir Ian

    Osborne, C.

    Bryan, P.

    Howard, Gerald (Cambridgeshire)

    Page, R. G.

    Bullus, Wing Commander E. E.

    Howard, John (Test)

    Pannell, N. A. (Kirkdale)

    Butcher, Sir Herbert

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

    Partridge, E.

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

    Hughes Hallett, Vice-Admiral J.

    Peel, W. J.

    Campbell, Sir David

    Hurd, A. R.

    Peyton, J. W. W.

    Carr, Robert

    Hutchison, Michael Clark (E 'b' gh, S.)

    Pickthorn, K. W. M.

    Chichester-Clark, R.

    Hutchison, Sir James (Scotstoun)

    Pilkington, Capt. R. A.

    Conant, Maj. Sir Roger

    Hyde, Montgomery

    Pitman, I. J.

    Cooke, Robert

    Hylton-Foster, Rt. Hon. Sir Harry

    Pitt, Miss E. M.

    Cooper-Key, E. M.

    Iremonger, T. L.

    Powell, J. Enoch

    Cordeaux, Lt.-Col. J. K.

    Irvine, Bryant Godman (Rye)

    Price, David (Eastleigh)

    Craddock, Beresford (Spelthorne)

    Jenkins, Robert (Dulwich)

    Price, Henry (Lewisham, W.)

    Crosthwaite-Eyre, Col. O. E.

    Jennings, J. C. (Burton)

    Prior-Palmer, Brig. O. L.

    Crowder, Sir John (Finchley)

    Johnson, Dr. Donald (Carlisle)

    Profumo, J. D.

    Crowder, Petre (Ruislip—Northwood)

    Johnson, Eric (Blackley)

    Rawlinson, Peter

    Cunningham, Knox

    Joseph, Sir Keith

    Redmayne, M.

    Currie, G. B. H.

    Joynson-Hicks, Hon. Sir Lancelot

    Roberts, Sir Peter (Heeley)

    Davidson, Viscountess

    Kaberry, D.

    Robertson, Sir David

    D' Avigdor-Goldsmid, Sir Henry

    Keegan, D.

    Robinson, Sir Roland (Blackpool, S.)

    Deedes, W. F.

    Kerby, Capt. H. B.

    Roper, Sir Harold

    Digby, Simon Wingfield

    Kerr, Sir Hamilton

    Ropner, Col. Sir Leonard

    Donaldson, Cmdr. C. E. McA.

    Kershaw, J. A.

    Russell, R. S.

    Doughty, C. J. A.

    Kimball, M.

    Sharples, R. C.

    du Cann, E. D. L.

    Lambton, Viscount

    Shepherd, William

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

    Langford-Holt, J. A.

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

    Duncan, Sir James

    Leavey, J. A.

    Smithers, Peter (Winchester)

    Eden, J. B. (Bournemouth, West)

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

    Smyth, Brig. Sir John (Norwood)

    Elliott, R. W. (N' castle upon Tyne, N.)

    Legh, Hon. Peter (Petersfield)

    Spearman, Sir Alexander

    Emmet, Hon. Mrs. Evelyn

    Lindsay, Hon. James (Devon, N.)

    Speir, R. M.

    Errington, Sir Eric

    Lindsay, Martin (Solihull)

    Stevens, Geoffrey

    Fell, A.

    Linstead, Sir H. N.

    Steward, Harold (Stockport, S.)

    Finlay, Graeme

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

    Steward, Sir William (Woolwich, W.)

    Fisher, Nigel

    Low, Rt. Hon. Sir Toby

    Studholme, Sir Henry

    Fletcher-Cooke, C.

    Lucas, P. B. (Brentford & Chiswick)

    Summers, Sir Spencer

    Fort, R.

    Lucas-Tooth, Sir Hugh

    Sumner, W. D. M. (Orpington)

    Fraser, Sir Ian (M'cmbe & Lonsdale)

    McAdden, S. J.

    Taylor, Sir Charles (Eastbourne)

    Freeth, Denzil

    Macdonald, Sir Peter

    Taylor, William (Bradford, N.)

    Gammans, Lady

    Mackeson, Brig. Sir Harry

    Teeling, W.

    Garner-Evans, E. H.

    McKibbin, Alan

    Temple, John M.

    George, J. C. (Pollok)

    Mackie, J. H. (Galloway)

    Thomas, Leslie (Canterbury)

    Gibson-Watt, D.

    McLaughlin, Mrs. P.

    Thomas, P. J. M. (Conway)

    Glyn, Col. Richard H.

    McLean, Neil (Inverness)

    Thompson, Kenneth (Walton)

    Godber, J. B.

    MacLeod, John (Ross & Cromarty)

    Thompson, R. (Croydon, S.)

    Goodhart, Philip

    Macmillan, Rt. Hn. Harold (Bromley)

    Thorneycroft, Rt. Hon. P.

    Gough, C. F. H.

    Macpherson, Niall (Dumfries)

    Thornton-Kemsley, Sir Colin

    Gower, H. R.

    Maddan, Martin

    Tiley, A. (Bradford, W.)

    Graham, Sir Fergus

    Maitland, Hon. Patrick (Lanark)

    Turton, Rt. Hon. R. H.

    Grant, W. (Woodside)

    Manningham-Buller, Rt. Hn. Sir R.

    Tweedsmuir, Lady

    Green, A.

    Markham, Major Sir Frank

    Vaughan-Morgan, J. K.

    Gresham Cooke, R.

    Marlowe, A. A. H.

    Vickers, Miss Joan

    Grimston, Hon. John (St. Albans)

    Marples, Rt. Hon. A. E.

    Vosper, Rt. Hon. D. F.

    Grimston, Sir Robert (Westbury)

    Marshall, Douglas

    Wade, D. W.

    Grosvenor, Lt.-Col. R. G.

    Mathew, R.

    Wakefield, Edward (Derbyshire, W.)

    Gurden, Harold

    Maudling, Rt. Hon. R.

    Wakefield, Sir Wavell (St. M' lebone)

    Hall, John (Wycombe)

    Mawby, R. L.

    Wall, Patrick

    Harrison, Col. J. H. (Eye)

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

    Ward, Rt. Hon. G. R. (Worcester)

    Harvey, John (Walthamstow, E.)

    Medlicott, Sir Frank

    Ward, Dame Irene (Tynemouth)

    Heald, Rt. Hon. Sir Lionel

    Milligan, Rt. Hon. W. R.

    Webster, D. W. E.

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

    Molson, Rt. Hon. Hugh

    Whitelaw, W. S. I.

    Henderson-Stewart, Sir James

    Morrison, John (Salisbury)

    Williams, Paul (Sunderland, S.)

    Hesketh, R. F.

    Mott-Radclyffe, Sir Charles

    Williams, R. Dudley (Exeter)

    Hill, Rt. Hon. Charles (Luton)

    Nabarro, G. D. N.

    Wills, Sir Gerald (Bridgwater)

    Hill, Mrs. E. (Wythenshawe)

    Nairn, D. L. S.

    Wilson, Geoffrey (Truro)

    Hinchingbrooke, Viscount

    Neave, Airey

    Woollam, John Victor

    Hirst, Geoffrey

    Nicholls, Harmar

    TELLERS FOR THE NOES:

    Hobson, John (Warwick & Leam' gt' n)

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

    Mr. Brooman-White and Mr. Hughes-Young.

    Amendment proposed: In page 8, line 9, at end insert:
    Provided that in computing any additional initial allowance to be made to a person for any year by virtue of this subsection there shall be disregarded an amount equal to the annual average of the expenditure (if any) allowed to be deducted in computing profits and gains for
    988
    the purposes of income tax for that and for the two next preceding years being expenditure incurred by that person on the provision of road vehicles which are of a type commonly used as private vehicles or not unsuitable to be so used and are not provided wholly or mainly for hire to or for the carriage of members of the public in the ordinary course of a trade.—[Mr. H. Wilson.]
    Question put, That those words be there inserted:—
    The Committee divided: Ayes 200, Noes 240.

    Division No. 159.]

    AYES

    [8.3 p. m

    Ainsley, J. W.

    Hamilton, W. W.

    Paling, Will T. (Dewsbury)

    Albu, A. H.

    Harrison, J. (Nottingham, N.)

    Pannell, Charles (Leeds, W.)

    Allaun, Frank (Salford, E.)

    Hastings, S.

    Parker, J.

    Allen, Arthur (Bosworth)

    Hayman, F. H.

    Paton, John

    Allen, Scholefield (Crewe)

    Herbison, Miss M.

    Pearson, A.

    Awbery, S. S.

    Hewitson, Capt. M.

    Peart, T. F.

    Bacon, Miss Alice

    Hobson, C. R. (Keighley)

    Pentland, N.

    Balfour, A.

    Holman, P.

    Popplewell, E.

    Bence, C. R. (Dunbartonshire, E.)

    Houghton, Douglas

    Prentice, R. E.

    Benson, Sir George

    Howell, Charles (Perry Barr)

    Price, Philips (Gloucestershire, W)

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

    Hoy, J. H.

    Probert, A. R.

    Blenkinsop, A.

    Hubbard, T. F.

    Proctor, W. T.

    Blyton, W. R.

    Hughes, Emrys (S. Ayrshire)

    Pursey, Cmdr. H.

    Boardman, H.

    Hunter, A. E.

    Rankin, John

    Bottomley, Rt. Hon. A. G.

    Hynd, H. (Accrington)

    Redhead, E. C.

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

    Irvine, A. J. (Edge Hill)

    Reeves, J.

    Bowles, F. G.

    Irving, Sydney (Dartford)

    Reid, William

    Boyd, T. C.

    Isaacs, Rt. Hon. G. A.

    Reynolds, G.

    Braddock, Mrs. Elizabeth

    Janner, B.

    Rhodes, H.

    Brockway, A. F.

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

    Roberts, Albert (Normanton)

    Broughton, Dr. A. D. D.

    Jeger, George (Goole)

    Roberts, Goronwy (Caernarvon)

    Burke, W. A.

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

    Robinson, Kenneth (St. Pancras, N.)

    Burton, Miss F. E.

    Jenkins, Roy (Stechford)

    Rogers, George (Kensington, N.)

    Butler, Herbert (Hackney, C.)

    Johnson, James (Rugby)

    Ross, William

    Butler, Mrs. Joyce (Wood Green)

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

    Royle, C.

    Callaghan, L. J.

    Jones, David (The Hartlepools)

    Silverman, Julius (Aston)

    Carmichael, J.

    Jones, Elwyn (W. Ham, S.)

    Silverman, Sydney (Nelson)

    Castle, Mrs. B. A.

    Jones, Jack (Rotherham)

    Simmons, C. J. (Brierley Hill)

    Chapman, W. D.

    Jones, J. Idwal (Wrexham)

    Skeffington, A. M.

    Clunie, J.

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

    Collins, V. J. (Shoreditch & Finsbury)

    Kenyon, C.

    Slater, J. (Sedgefield)

    Cove, W. G.

    Key, Rt. Hon. C. W.

    Smith, Ellis (Stoke, S.)

    Craddock, George (Bradford, S.)

    King, Dr. H. M.

    Sorensen, R. W.

    Cronin, J. D.

    Lawson, G. M.

    Soskice, Rt. Hon. Sir Frank

    Crossman, R. H. S.

    Lee, Frederick (Newton)

    Spriggs, L.

    Dalton, Rt. Hon. H.

    Lee, Miss Jennie (Cannock)

    Stewart, Michael (Fulham)

    Darling, George (Hillsborough)

    Lever, Leslie (Ardwick)

    Stonehouse, John

    Davies, Harold (Leek)

    Lewis, Arthur

    Stones, W. (Consett)

    Davies, Stephen (Merthyr)

    Lindgren, G. S.

    Summerskill, Rt. Hon. E.

    Deer, G.

    Mabon, Dr. J. Dickson

    Swingler, S. T.

    de Freitas, Geoffrey

    McCann, J.

    Sylvester, G. O.

    Diamond, John

    MacColl, J. E.

    Taylor, Bernard (Mansfield)

    Dodds, N. N.

    MacDermot, Niall

    Taylor, John (West Lothian)

    Donnelly, D. L.

    McGhee, H. G.

    Thomas, George (Cardiff)

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

    McGovern, J.

    Thomson, George (Dundee, E.)

    Dye, S.

    McInnes, J.

    Ungoed-Thomas, Sir Lynn

    Ede, Rt. Hon. J. C.

    McLeavy, Frank

    Warbey, W. N.

    Edwards, Rt. Hon. John (Brighouse)

    MacMillan, M. K. (Western Isles)

    Watkins, T. E.

    Edwards, Rt. Hon. Ness (Caerphilly)

    MacPherson, Malcolm (Stirling)

    Weitzman, D.

    Edwards, Robert (Bilston)

    Mann, Mrs. Jean

    Wells, William (Walsall, N.)

    Edwards, W. J. (Stepney)

    Marquand, Rt. Hon. H. A.

    Wheeldon, W. E.

    Evans, Edward (Lowestoft)

    Mason, Roy

    White, Mrs. Eirene (E. Flint)

    Fernyhough, E.

    Mitchison, G. R.

    Wilcock, Group Capt. C. A. B.

    Finch, H. J.

    Monslow, W.

    Wilkins, W. A.

    Fitch, E. A.

    Moody, A. S.

    Willey, Frederick

    Foot, D. M.

    Morris, Percy (Swansea, W.)

    Williams, David (Neath)

    Forman, J. C.

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

    Williams, Rev, Llywelyn (Ab'tillery)

    Fraser, Thomas (Hamilton)

    Mort, D. L.

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

    George, Lady Megan Lloyd (Car' then)

    Moyle, A.

    Willis, Eustace (Edinburgh, E.)

    Gibson, C. W.

    Mulley, F. W.

    Wilson, Rt. Hon. Harold (Huyton)

    Gordon Walker, Rt. Hon. P. C.

    Neal, Harold (Bolsover)

    Woodburn, Rt. Hon. A.

    Greenwood, Anthony

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

    Woof, R. E.

    Grenfell, Rt. Hon. D. R.

    Oliver, G. H.

    Yates, V. (Ladywood)

    Grey, C. F.

    Oswald, T.

    Younger, Rt. Hon. K.

    Griffiths, Rt. Hon. James (Lianelly)

    Owen, W. J.

    Zilliacus, K.

    Griffiths, William (Exchange)

    Padley, W. E.

    Hale, Leslie

    Paget, R. T.

    TELLERS FOR THE AYES:

    Hall, Rt. Hn. Glenvil (Colne Valley)

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

    Mr. Short and Mr. J. T. Price.

    NOES

    Agnew, Sir Peter

    Ashton, H.

    Batsford, B. C. C.

    Aitken, W. T.

    Atkins, H. E.

    Baxter, Sir Beverley

    Amery, Julian (Preston, N.)

    Baldock, Lt.-Cmdr. J. M.

    Beamish, Col. Tufton

    Amory, Rt. Hn. Heathcoat (Tiverton)

    Baldwin, A. E.

    Bell, Ronald (Bucks, S.)

    Anstruther-Gray, Major Sir William

    Barber, Anthony

    Bennett, F. M. (Torquay)

    Arbuthnot, John

    Barlow, Sir John

    Bennett, Dr. Reginald

    Armstrong, C. W.

    Barter, John

    Bevins, J. R. (Toxteth)

    Biggs-Davison, J. A.

    Holt, A. F.

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

    Bingham, R. M.

    Hope, Lord John

    Orr, Capt. L. P. S.

    Birch, Rt. Hon. Nigel

    Hornby, R. P.

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

    Bishop, F. P.

    Hornsby-Smith, Miss M. P.

    Osborne, C.

    Body, R. F.

    Horobin, Sir Ian

    Page, R. G.

    Bonham Carter, Mark

    Howard, Gerald (Cambridgeshire)

    Pannell, N. A. (Kirkdale)

    Bossom, Sir Alfred

    Howard, John (Test)

    Partridge, E.

    Bowen, E. R. (Cardigan)

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

    Peel, W. J.

    Boyle, Sir Edward

    Hughes Hallett, Vice-Admiral J.

    Peyton, J. W. W.

    Braine, B. R.

    Hughes-Young, M. H. C.

    Pickthorn, K. W. M.

    Braithwaite, Sir Albert (Harrow, W.)

    Hurd, A. R.

    Pilkington, Capt. R. A.

    Bryan, P.

    Hutchison, Michael Clark (E'b'gh, S.)

    Pitman, I. J.

    Bullus, Wing Commander E. E.

    Hutchison, Sir James (Scotstoun)

    Pitt, Miss E. M.

    Butcher, Sir Herbert

    Hyde, Montgomery

    Powell, J. Enoch

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

    Hylton-Foster, Rt. Hon. Sir Harry

    Price, David (Eastleigh)

    Campbell, Sir David

    Iremonger, T. L.

    Price, Henry (Lewisham, W.)

    Carr, Robert

    Irvine, Bryant Godman (Rye)

    Prior-Palmer, Brig, O. L.

    Conant, Maj. Sir Roger

    Jenkins, Robert (Dulwich)

    Profumo, J. D.

    Cooke, Robert

    Jennings, J. C. (Burton)

    Rawlinson, Peter

    Cooper-Key, E. M.

    Johnson, Dr. Donald (Carlisle)

    Redmayne, M.

    Cordeaux, Lt.-Col. J. K.

    Johnson, Eric (Blackley)

    Renton, D. L. M.

    Craddock, Beresford (Spelthorne)

    Joseph, Sir Keith

    Roberts, Sir Peter (Heeley)

    Crosthwaite-Eyre, Col. O. E.

    Joynson-Hicks, Hon. Sir Lancelot

    Robertson, Sir David

    Crowder, Sir John (Finchley)

    Kaberry, D.

    Robinson, Sir Roland (Blackpool, S.)

    Crowder, Petre (Ruislip—Northwood)

    Keegan, D.

    Cunningham, Knox

    Kerby, Capt. H. B.

    Roper, Sir Harold

    Currie, G. B. H.

    Kerr, Sir Hamilton

    Ropner, Col. Sir Leonard

    Davidson, Viscountess

    Kershaw, J. A.

    Russell, R. S.

    D'Avigdor-Goldsmid, Sir Henry

    Kimball, M.

    Sharples, R. C.

    Deedes, W. F.

    Lambton, Viscount

    Shepherd, William

    Digby, Simon Wingfield

    Langford-Holt, J. A.

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

    Donaldson, Cmdr. C. E. McA.

    Smithers, Peter (Winchester)

    Doughty, C. J. A.

    Leavey, J. A.

    Smyth, Brig. Sir John (Norwood)

    du Cann, E. D. L.

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

    Spearman, Sir Alexander

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

    Legh, Hon. Peter (Petersfield)

    Speir, R. M.

    Duncan, Sir James

    Lindsay, Hon. James (Devon, N.)

    Stevens, Geoffrey

    Eden, J. B. (Bournemouth, West)

    Lindsay, Martin (Solihull)

    Steward, Harold (Stockport, S.)

    Elliott, R. W. (Ne'castle upon Tyne, N.)

    Linstead, Sir H. N.

    Steward, Sir William (Woolwich, W.)

    Emmet, Hon. Mrs. Evelyn

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

    Studholme, Sir Henry

    Errington, Sir Eric

    Low, Rt. Hon. Sir Toby

    Summers, Sir Spencer

    Finlay, Graeme

    Lucas, P.B. (Brentford & Chiswick)

    Sumner, W. D. M. (Orpington)

    Fisher, Nigel

    Lucas-Tooth, Sir Hugh

    Taylor, Sir Charles (Eastbourne)

    Fletcher-Cooke, C.

    McAdden, S. J.

    Taylor, William (Bradford, N.)

    Fort, R.

    Macdonald, Sir Peter

    Teeling, W.

    Fraser, Sir Ian (M'cmbe & Lonsdale)

    Mackeson, Brig. Sir Harry

    Temple, John M.

    Freeth, Denzil

    McKibbin, Alan

    Thomas, Leslie (Canterbury)

    Gammans, Lady

    Mackie, J. H. (Galloway)

    Thomas, P. J. M. (Conway)

    Garner-Evans, E. H.

    McLaughlin, Mrs. P.

    Thompson, Kenneth (Walton)

    George, J. C. (Pollok)

    McLean, Neil (Inverness)

    Thompson, R. (Croydon, S.)

    Gibson-Watt, D.

    MacLeod, John (Ross & Cromarty)

    Thorneycroft, Rt. Hon. P.

    Glyn, Col. Richard H.

    Macmillan, Rt. Hn. Harold (Bromley)

    Thornton-Kemsley, Sir Colin

    Godber, J. B.

    Macpherson, Niall (Dumfries)

    Tiley, A. (Bradford, W.)

    Goodhart, Philip

    Maddan, Martin

    Turton, Rt, Hon. R. H.

    Gough, C. F. H.

    Maitland, Hon. Patrick (Lanark)

    Tweedsmuir, Lady

    Gower, H. R.

    Manningham-Buller, Rt. Hn. Sir R.

    Vaughan-Morgan, J. K.

    Graham, Sir Fergus

    Markham, Major Sir Frank

    Vickers, Miss Joan

    Grant, W. (Woodside)

    Marlowe, A. A. H.

    Vosper, Rt. Hon. D. F.

    Green, A.

    Marples, Rt. Hon. A. E.

    Wade, D. W.

    Gresham Cooke, R.

    Grimston, Hon. John (St. Albans)

    Marshall, Douglas

    Wakefield, Edward (Derbyshire, W.)

    Grimston, Sir Robert (Westbury)

    Mathew, R.

    Wakefield, Sir Wavell (St. M'lebone)

    Grosvenor, Lt.-Col. R. G.

    Maudling, Rt. Hon. R.

    Wall, Patrick

    Gurden, Harold

    Mawby, R. L.

    Ward, Rt. Hon. G. R. (Worcester)

    Hall, John (Wycombe)

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

    Ward, Dame Irene (Tynemouth)

    Harrison, Col. J. H. (Eye)

    Medlicott, Sir Frank

    Webster, D. W. E.

    Harvey, John (Walthamstow, E.)

    Milligan, Rt. Hon. W. R.

    Whitelaw, W. S. I.

    Heald, Rt. Hon. Sir Lionel

    Molson, Rt. Hon. Hugh

    Williams, R. Dudley (Exeter)

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

    Morrison, John (Salisbury)

    Wills, Sir Gerald (Bridgwater)

    Henderson-Stewart, Sir James

    Mott-Radclyffe, Sir Charles

    Wilson, Geoffrey (Truro)

    Hesketh, R. F.

    Nabarro, G. D. N.

    Wood, Hon. R.

    Hill Rt. Hon. Charles (Luton)

    Nairn, D. L. S.

    Woollam, John Victor

    Hill, Mrs. E. (Wythenshawe)

    Neave, Airey

    Hinchingbrooke, Viscount

    Nicholls, Harmar

    TELLERS FOR THE NOES:

    Hirst, Geoffrey

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

    Mr. Brooman-White and Mr. Chichester-Clark.

    Hobson, John (Warwick & Leam' gt' n)

    Noble, M. A. C. (Argyll)

    Holland-Martin, C. J.

    Oakshott, H. D.

    Sir Frank Soskice: I beg to move, in page 8, line 9, at the end to insert:
    Provided that this subsection shall not apply to expenditure on the provision of a ship for the purposes of a trade, unless the claimant
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    proves that the ship is registered or intended to be registered as a British ship and delivers to the Commissioners of Inland Revenue a statement and undertaking that the ship is or will be so registered and will remain se registered for three years from the date of her first registry:

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    Provided also that if the claimant fails to cause the ship to be registered as a British ship or by any disposition made before the expiry of the said three years causes or allows the ship to cease to be so registered, he shall be liable to a penalty not exceeding the sum of one hundred pounds and to a further penalty of the like amount for every day from the date when the ship ceases to be registered as a British ship or, not having been so registered, is registered under a foreign flag until the expiry of the said three years.
    I hope that whichever of the right hon. Gentlemen, the Chancellor of the Exchequer or the Paymaster-General, replies will not answer by saying that he finds it extremely difficult to conceive of a case to which the Amendment could apply, because I entirely agree. One might conceive of the case of a secondhand ship in respect of which the person who had caused it to be provided might seek an initial allowance rather than an investment allowance, which he would get in the case of a new ship at the rate of 40 per cent.
    If, however, one assumes the case of a second-hand ship and one which has been incorporated in a fleet and which, having been incorporated in a fleet, has been used for the purpose of trading and making profits in such circumstances that there would be profits against which the initial allowance could be set off, and if one then assumes that the person who has that ship for some reason or other within three years decides that he will sell it to a foreign owner to be registered on a foreign registry, I suppose that the Amendment might have some application.
    The right hon. Gentleman will, no doubt, ask why, if it is so difficult to find a case to which the Amendment could apply, it has been put down at all. I should like to explain. Frankly, we have put down the Amendment for the purpose of probing and asking the Government a question. The right hon. Gentleman knows perfectly well that the Opposition are tightly constricted by the rules of order and cannot put down an Amendment which would impose a charge unless it is one which is sanctioned by a Financial Resolution. Therefore, what we have done is to select and put down this Amendment as the vehicle through which we can ask the Government whether they have given thought to what is today an extremely pressing problem: that is, the
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    question of ships registered under flags of convenience.
    8.15 p.m.
    On Thursday, we are to debate the question of shipping. That will be a Supply Day and it will not, I believe, be in order to debate matters of taxation then. Therefore, we are taking this opportunity to ask the Government whether they have given thought to the question whether it is possible by means of a taxation discouragement to impose some disability upon the use of these flags of convenience. Theoretically, I suppose, there might be a case which would fall within the scope of the Amendment of a ship which is used for trading here first and is then turned over to a fleet registered under a flag of convenience.
    We do not find it easy to conceive of a way in which by fiscal legislation some solid discouragement could be placed upon persons who run ships under flags of convenience. When one remembers, however, that in 1939 the fleets under those flags totalled nil tonnage and now total, I think, a tonnage of about 15 million tons, virtually 17 per cent. of the total world's merchant tonnage, one realises the magnitude of the problem which these flags of convenience present. A number of suggestions have been made for dealing with them. Within the scope of this debate, we can discuss only the rather narrow one of a tax discouragement.
    I therefore ask the Chancellor of the Exchequer or the Paymaster-General, if he is to reply, this plain question. I hope that the Government have considered whether there is some way of imposing a tax obstacle in the use of these ships. Frankly, I doubt it. I should like to know the result of the research upon which the Government have embarked—if they have embarked on any research—and whether they can assure the Committee that they will give thought to the problem of whether there is any method whereby, in some way at least, some portion of profits which might otherwise go to the owners of these fleets registered in these "Panlibhonco" countries, as they are called, could be taken away from them and used in the public interest in this country.
    Obviously, one would have thought that the only sort of case in which that could be applied would be one in which

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    profits had been made here at least for some period of time. Having that in mind, we have chosen a three-year period in respect of which the Amendment would impose a penalty if a ship registered, perhaps, first under a British registry is transferred to a foreign registry. I do not think that much more can be said in asking the question.
    In moving the Amendment, I say quite frankly that that is our purpose. We accept that the Amendment is possibly in a sense somewhat unreal as it can apply to only a very few cases, if any, and I have no evidence of any special case to which it might be thought to be applicable. I do not know whether there are any such cases of the kind I have described, but I ask the Government fairly and squarely whether they have considered whether some tax burden could be imposed on these people in order in some way to equate their situation with the situation of comparative British shipping. If not, will the Government give an undertaking that they will think carefully of this and will in due course, in some form or other, give the House the result of their inquiries? I imagine that some thought has been given to the problem and I should be grateful if the right hon. Gentleman would be good enough to say what it is.
    I do not imagine that my right hon. or hon. Friends would regard this as an Amendment which they should press to a Division. Its purpose is probing and to ask a question. I have explained the reasons why it is put down. I hope that we may have an answer, which will give pleasure in all parts of the Committee if it is a positive and effective answer.
    Mr. Maudling: I will gladly respond to the questioning of the right hon. and learned Member for Newport (Sir F. Soskice) as far as I can within the rules of order. First, as the right hon. and learned Gentleman pointed out, the Amendment in fact would have no practical effect. Indeed, even in the actual case which he quoted it would have no effect because though a person bought a second-hand ship and sold it again there would be a balancing charge and he would get benefit only over a period. I believe that the right hon. and learned Gentleman would accept that the Amendment is not likely to have any practical
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    effect, but he has raised, in relation to shipping and flags of convenience generally, an immensely important matter, and I should like to say a few words about the Government's attitude to it.
    Clearly, an extension of the merchant fleets of flags of convenience countries causes much concern to the Government, and has been causing concern over a considerable period. In the near future, there is to be a general discussion in the House on the subject. Therefore, on this occasion, I must confine myself strictly to the question of taxation. It seems to me that by way of taxation there are very few ways in which we, as a Government, can do anything to help in this problem of flags of convenience. Owners of ships registered under flags of convenience are by definition outside the net of British taxation. That is why they register under those flags. Therefore, there is nothing we can do as far as tax goes to affect the owners.
    Theoretically, we can do something to impose a penalty on people who sell ships to owners operating in those countries, or who hire the ships of those operating in those countries, but I should think that no one would propose that we use the tax law in that discriminating way. Speaking without the book, I should have thought that it would be contrary to all our international obligations. The Government, therefore, cannot see any way in which the imposition of tax of a deterrent kind upon people who own ships and operate them under flags of convenience or who trade with them could do anything to alleviate the situation, even if it were accepted—and I do not know that it is necessarily accepted—that it would be the right way to proceed. In any case, it is impracticable. Therefore, we need not argue the merits of the case.
    What the Government have been able to do, with the general approval of the House of Commons, has been to assist British shipowners to meet competition by improving their tax position. That is why a ship is treated in a particular way and the 40 per cent. investment allowance has been retained in the case of shipping, whereas otherwise the investment allowance is retained only for scientific research assets and fuel equipment. The rest of industry has gone back to the initial allowance. It was thought right to maintain the investment

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    allowance for shipping because of the special nature of the asset used in the industry and because of the nature of the competition. People can set up a shipping industry in any country but not motor car manufacture. The position of shipping has been recognised as being different.
    The attitude of the Government would be that the 40 per cent. investment allowance has done an immense amount to help British shipping in competing with ships under flags of convenience which pay no tax. Some of my friends in the shipping industry were at first inclined to doubt it, but when an undertaking regularly ploughs part of its profit into new construction and gets 40 per cent. addition to capital allowance, it is left better off than if it paid no tax at all. So far as tax is paid, something net is received back from the Revenue. It is true that that applies much more to the bigger concerns and to those who are replacing tonnage more rapidly.
    What has already been done in the field of taxation relief for shipping and new tonnage goes as far as we consider at present one can go by way of taxation relief to put the British shipping industry in a position to compote with flags of convenience. The ship owner operating under a flag of convenience and pays no taxation has no advantage in that respect over the British owner who pays taxation but gets 140 per cent. of what he pays back again. That being over and above the 100 per cent. depreciation, it means that if one spends £100 on replacing a ship not only does one get back tax of £100 but in addition one gets tax on £40.
    Mr. Rhodes: That is precisely why my right hon. and learned Friend the Member for Newport (Sir F. Soskice) moved the Amendment. If, having got back 40 per cent. over the 100 per cent., the owner within a short time sells that ship abroad, who will get the advantage—the person abroad? Surely there should be some method of re-writing into the value of the ship what has been allowed by the taxpayer.
    Mr. Maudling: That is covered already by the Income Tax Act. The Amendment refers not to the investment allowance but to the initial allowance. That point is covered in the rather complicated
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    arrangement which was made when we introduced the investment allowance. I agree that the hon. Member has made a perfectly good point, but I was arguing the rather broader point on which the right hon. and learned Member for Newport was hanging the Amendment. By common consent, the Amendment is not so much a practical matter as a peg on which to hang an argument. I have been trying to put the Government's thoughts in the specific context of taxation. In the wider, general context, this matter will be discussed in the House of Commons soon. It is one to which we attach the greatest importance, and the Government will be glad to see suggestions from the Opposition or elsewhere as to what more can be done.
    Mr. J. T. Price: There is another point which to my mind conclusively demolishes the right hon. Gentleman's argument. He has replied to the intervention by my hon. Friend the Member for Aston-under-Lyne (Mr. H. Rhodes) by saying that the man who receives 140 per cent. is actually in a better position than the man overseas who is operating under a flag of convenience, but that relates only to one year. The man who gets the ship under a flag of convenience escapes the continuing liability of current taxation during every year in which the ship operates.
    Mr. Maudling: The point is that the man who pays no tax has to buy his new tonnage out of his gross profits, not out of his net profits. The man who gets an investment allowance can also buy new tonnage out of gross profits, to the extent that he gets the 40 per cent. investment allowance. This is a very complicated subject, but this point is strictly limited to cases where there is a large-scale replacement of tonnage, and I think that in those cases the hon. Member will find my argument valid.
    Mr. Mitchison: May I ask the right hon. Gentleman a question which puzzles me in this connection? It relates both to the initial allowances which we are discussing and to the investment allowances which we cannot discuss, but in principle it is the same point.
    Let us suppose there is a shipowner here carrying on a trade, and let us suppose that he buys a ship and gets on

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    it a tax advantage, whether in the nature of an initial allowance or an investment allowance. Having had that tax advantage he is thereby enabled to resell the ship to a foreign owner at a price lower than it would otherwise have suited him to sell it, so that in the result the original British shipowner does not do too badly and will, in the type of case I am contemplating, actually put the ship into use for a little time and thereby bring it into his trade, whereas the foreign owner will get the advantage of a ship at a cheap price because of the lax advantage given to the British shipowner.
    I appreciate that balancing charges come into this, but that is a question of what is the final price. If there is any uncertainty in the matter, is not the door wide open to a collusive arrangement by which there is a very close business connection between the original British owner and the final owner under the flag of convenience? So much so, indeed, that the British owner may promote, let us say, a company in Panama—I do not know that this is even necessary in most of these cases—or may have some sort of subsidiary with an independent trade or some sort of body which, without being a subsidiary, he is nevertheless interested in.
    8.30 p.m.
    I would respectfully ask the right hon. Gentleman whether he is satisfied that the present legislation really covers that kind of case, because the inherent difficulty in the giving of what from the taxation point of view is an abnormal concession to a specific British industry, shipping, for a purpose the merits of which are not under discussion now, is that this abnormal concession might very well be used, if the law so permits, to pass on some of the benefit, collusively or to some independent foreigner whom we do not really wish to benefit by it, having regard to the purpose for which it is made.
    Is the right hon. Gentleman really satisfied that this is impossible? One could work out all sorts of possible combinations of ways in which it might be done. I am not at all happy, because the original initial allowance and investment allowance arrangements were intended to deal with re-sales and so on, but they were intended to deal with them in cases where there were no phenomenal and
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    special advantages, and in which the asset being dealt with did not in general play such an overwhelming part in the trade in question as a ship necessarily does in a shipowner's business.
    Mr. Maudling: These are important points and the answers are twofold, according to whether the transaction is of the type which the hon. and learned Gentleman is suggesting and is a genuine or a collusive transaction.
    On the first point, I do not see how any difficulty could arise in relation to the initial allowance where the transaction is genuine, because, taking the period over which the man owns the ship, the total amount he receives by way of capital allowances cannot exceed the difference between what he pays for the ship and what he sells it for. In other words, he has bought it for £100,000, has written it down to £50,000, has taken the capital allowance and then sells it for £80,000. He has to pay back the capital charges, so I cannot see how in any genuine transaction any difficulty can arise.
    On the question of a possibly collusive transaction, there are provisions in the Income Tax Acts, Which I cannot quote out of my head, but for which I think the party opposite were responsible, dealing with the use of capital allowances where transactions are not at arms length. My impression is that these are sufficient to deal with what the hon. and learned Gentleman has in mind, but it would be unwise for me to try to give a firm assurance off the cuff. I will look at the point, but my impression is that with a genuine transaction there should be no difficulty and that any collusive transaction is covered by existing legislation. However, I will look at the point again.
    Mr. Mitchison: Perhaps the right hon. Gentleman will be able to look at that point before the Report stage in case the matter arises again then?
    Mr. Maudling: Yes, certainly. That is understood.
    Amendment negatived.
    Motion made, and Question proposed, That the Clause stand part of the Bill.
    The Chancellor of the Exchequer (Mr. Derick Heathcoat Amory): The object of this Clause is to enact the proposal which

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    I announced in my Budget speech that, in order to give what I called a little practical encouragement to industrial investment, the initial allowance should be increased from Budget day by one-quarter. That increase brought these allowances to a level of 25 per cent. for plant and machinery and 12½ per cent. for industrial building. The special rate of 40 per cent. for mining works will remain.
    It is still the main aim, I should like to remind the Committee, of the Government's economic policy to put the strength of sterling, the soundness of our international financial position and price stability as our first objective. The need to maintain the value of our money by the exercise of moderation in demands for higher money incomes, I need not remind the Committee, has not diminished, but I also made it clear in my Budget statement that, while our objectives are fundamental and unchanging, we are determined to keep our policies flexible and to adjust them promptly whenever our assessment of the situation suggests the need for that.
    The two parts of our economy in which we must make sure, in particular, that we go ahead as fast as conditions allow are, first, those activities which concern our export trade and, secondly, our industrial investment. I have been considering whether I should be justified now, two months after I took the decision on initial allowances which I announced in my Budget speech and which is embodied in the Clause, in going a little further in this matter. It is very desirable, as I said in my Budget speech, that plans for investment in industry should continue to be made with confidence if we are to be in a position to exploit the opportunities that lie ahead.
    Weighing the various factors which I have to take into account, I have come to the conclusion that it would be well to make some increase in the practical encouragement which I sought to give to industrial investment by improvement in the initial allowances. While one cannot suppose that initial allowances are by themselves often likely to be a determining factor in investment plans when they are under consideration, I believe that they nevertheless exert a positive influence. Although frequent changes in the rates would be confusing, the fact that the allowances can be varied year
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    by year may influence the timing of capital expenditure.
    If you will allow me to do so, Mr. Blackburn, I should like to tell the Committee that I propose to move on the Report stage of the Bill an Amendment to this Clause which will provide for an increase in these allowances by one-half instead of one-quarter. The effect will be to raise them to 30 per cent. for plant and machinery and 15 per cent. for industrial building. I do not propose to alter the special rate for mining works.
    This amended increase in the rate of the allowances will date, as did my original proposal, from Budget day. The total effect of the new proposals will be, approximately, to double the cost of the original proposal embodied in the Clause. I believe that the Clause, amended in due course as I have indicated, will be even more acceptable to the Committee than the Clause in its present form.
    Mr. H. Wilson: I am sure the whole Committee will welcome what the Chancellor has just told us, though I am bound to say that it is a rather pussyfooted way of doing it.
    In the Budget debates in 1957 we said to the then Chancellor that it was obvious that the boom rate of investment would diminish and that by 1958 there would be a need to give some further stimulus to industry. We suggested to the then Chancellor in that debate that he ought to make it clear that he would restore investment allowances in this year's Budget. That would have enabled businessmen who had rather vaguely at the back of their minds plans for capital expansion to prepare their plans to take advantage of a tax concession this year, and then just as the slack began to appear in the economy, especially on the investment side, they could have taken full advantage of what the Chancellor could offer. That advice was not accepted by the then Chancellor.
    This year we were glad to see that the present Chancellor made a small bow in the direction of encouraging increased investment by increasing the initial allowances to 25 per cent., though we told him in April that it was not enough, and suggested that it would have been better to restore investment allowances which,

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    by the common agreement of the Committee, are a better incentive to capital investment than the initial allowances. In his rather cautious approach to these matters—and still busily fighting last year's inflation—he seemed to think that that advice was not right at the time, although, to be fair to him, he said that he would consider the matter again in due course. So tonight, two months afterwards, we have had this further increase.
    The Chancellor said that we do not want too many changes in these rates, but I do not think that anyone will criticise him on the ground that he has changed them upwards. Changes up and down are the ones which cause difficulties. I only wish that he had made the changes all at once, in April, but I am glad that he did not feel inhibited from making them now by the fear that there would be criticism from hon. Members on this side of the Committee or anywhere else about the uncertainty created by his action. Despite the terrifying appearance of the right hon. Member for Blackpool, North (Sir T. Low), I hope that the Chancellor will not be worried that on this occasion he is introducing retrospective legislation.
    He made it quite clear that he is going to backdate this concession to April. It is right that he should do that, because it is only making good the excess of caution which he displayed at the time of the Budget, and I have not seen the right hon. Member for Blackpool, North rising in his wrath to threaten the Chancellor with an adverse vote by hon. Members opposite. That is because they do not object to retrospective legislation which benefits public companies; they object to it only when it acts to their detriment. I can promise the Chancellor that if the right hon. Member for Blackpool, North opposes this use of retrospective legislation, we shall be glad—as we would have been on the other occasion—to come to his rescue and to bail him out against the wishes of his contumacious back benchers. On those two points we certainly do not criticise the Chancellor. Since we are debating the question of initial allowances, however, I hope that the Committee will be able to take the debate rather more widely.
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    What is the position in relation to investment? Over the past four or five years there has been a virtual stagnation—the word is being rather over-used in these days—of investment in industry. I well remember the then Chancellor, the present Lord Privy Seal, standing at the Dispatch Box and wringing his hands on many occasions about the failure of industry to expand investment. Year by year he had to concede that the publicly-owned industries were expanding investment reasonably well while the privately-owned industries were not expanding at all. It was not until, in 1954, the then Chancellor introduced investment allowances that we had the upsurge in investment which has now gone down in economic history as the period of the Butler boom.
    The then Chancellor was pleased with the investment increase. That was the year when he coined the phrase, "Invest in Success," and said that we could double our standard of living in twenty-five years, and all the rest of it. An essential part of any such programme must be a great increase in capital investment. His investment allowances were designed for that purpose and, in effect, they have replaced the initial allowances, because any firm having a choice between the two would obviously go for investment allowances.
    But what happened? There was an enormous increase in the rate of capital investment and plans for further capital investment in 1954–55, and that increase was spread very widely over the whole economy. It could not be claimed that it was concentrated mainly in the essential sectors of the economy. The biggest increases were in motor cars, then mainly producing for the home market although there has been a big improvement since which we are all pleased to see. The other big increase was in printing, paper and packaging, which has no doubt had a great deal to do with the advertising and sales boom and with the higher standards of consumer packaging in this country—desirable, but not essential.
    8.45 p.m.
    All this was superimposed upon—I quote from memory the Economic Survey of 1956—a buoyant consumer economy, a buoyant rate of consumption to the point where, as soon as the election was safely out of the way, right hon. Gentlemen opposite decided that there must be

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    some restraint; and we had a whole series of restraints. It would be out of order if I tried to deal with them all but I think that there is no doubt that highly relevant to this Clause was the decision of the then Chancellor, now the Prime Minister, which was announced, speaking from memory, on 17th February, 1956, when he withdrew the investment allowances.
    From the time of the withdrawal of the investment allowances, the initial allowances became of much greater importance, and, of course, they have remained at 20 per cent. There have been the small changes, referred to by the Paymaster-General just now, in the maintenance of investment allowances for shipping and the other two items which he mentioned—scientific research and fuel economy equipment. Apart from that very narrow field, and apart from the debates which we have had in the past when we have sought to extend the range of this special exemption, initial allowances are now the principal tax incentive for industrialists to extend their investment.
    The 20 per cent. initial allowance was an incentive, as the Chancellor has said. It was not an inappropriate rate for a Government who were trying to hold down investment and curb the excesses of the Butler boom. With the present situation of investment beginning to tail off and this country facing much more the danger of recession than inflation—a fact which became clear to this side of the Committee long before it penetrated the minds of most hon. Members opposite—the Chancellor is right, if he is going to depend on the initial allowances, to increase the rate, as he has done, from 20 to 30 per cent. It would have been better, in our view, to reintroduce investment allowances. Even if he had kept them at a fairly low rate in the early stages, this would have been a better incentive.
    I want to put this point to the Chancellor, whether he thinks that he can regulate the rate of investment in this rather thermostatic way, this kind of built-in initial allowances thermostat. The right hon. Gentleman wants to encourage investment. There is no disagreement between the two sides of the Committee about that. We on this side of the Committee believe the time has come, and is long overdue, for that investment in the industrial production of this country.
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    Hon. Members opposite—I want to be fair—take the view that the time has not yet come, though they hope it will come soon. They take that view because they think it essential to hold back and to hold down the economy. I am trying to put the point of view of both sides of the Committee as fairly and objectively as possible. I am not trying to make party capital out of this.
    Hon. Members opposite have sometimes said to us—not so much in the House, where arguments are usually reasonably fair and sophisticated, but in rather crude forms of propaganda which we sometimes see emanating from the party opposite—that we want a rip-roaring consumption boom. Of course we do not. We want an investment boom. I am sure that that is what the Chancellor wants. The difference between us is on how to achieve these things and the timing of them. There can be no doubt that this country needs a high investment economy. Surely, that must receive endorsement from both sides of the Committee.
    Although the total rate of investment in this country has increased compared with 1951—I concede that to the Government, and, my goodness, it ought to, thirteen years after the end of the war compared with a period of six years after the end of the war—we have lagged a long way behind most other advanced industrial countries in the matter of industrial investment. Looking at any form of international comparison, and the figures of investment between these countries, there is no doubt that Britain has lagged a long way behind most of these countries over that period. Therefore, there can be no doubt that we want this expansion in capital investment in industry.
    The Chancellor, therefore, gives this encouragement by initial allowances. We should like to see the next stage of industrial expansion in this country concentrated so far as possible, on investment, but more narrowly than the Chancellor contemplates. We want to see it concentrated above all on essential investment; because on the experience of the so-called Butler boom—I trust that I am not out of order in using that expression; I think it has become rather a term of art in economic discussions, but I will alter it if any hon. Member

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    takes objection to it—we had a vast expansion in inessential investment which caused a dangerous strain on the economy. We all know to what kind of things I am referring. I have mentioned some industries. There was a great deal of expansion outside productive industry, particularly in certain aspects of distribution—and there was commercial television and all those other things—to the point where, in 1955–56, the Government had to introduce very strong doses of medicine in order to purge the economy of its excesses and its difficulties.
    One of the results of doing so during that period was that the Government had to cut down more than they wanted to—more than otherwise they would have done—on the level of public investment, on the rate of investment in the nationalised industries, many of them highly essential, and on the rate of investment by local authorities. It was because of the push they had given to inessential private investment—uncontrollable as it is by anything in the Tory philosophy—that the Government had to put on controls over essential investment.
    The Chancellor is slowly coming to the point of view that we must encourage investment again; now he is moving away, I hope, from the right hon. Member for Monmouth (Mr. P. Thorneycroft) and from Professor Robbins and these other mid-nineteenth century types we have around, and slowly emancipating himself from the fetters he inherited when he became Chancellor so far as these things are concerned. But I am afraid that the right hon. Gentleman will stick to the view of the Lord Privy Seal, that there cannot be any selectivity in investment or controls; that it is all or nothing in investment; either everything expands and shoots ahead or everything has to be held back.
    We have often complained—making use of one of the Chancellor's favourite phrases—that it is "all accelerator or brake and never the steering wheel." I know that the Chancellor likes that phrase. He used it again a couple of weeks ago, and he often used it during the Budget debates. He is going to take off the brakes as soon as he can see the road ahead, and all that sort of thing. We have suggested that the most modern
    1008
    cars in these days have steering wheels fitted to them and that they are valuable accessories. The Chancellor is in the position of the driver of a car—and an extremely old-fashioned type it must be—who steps on the gas and goes zooming ahead, and then has to jam on the brakes when he gets to a corner and get out and hump the wheels until he can get round the corner. This leads to a rather lurching form of progress, which is what we have been having regarding investment policy and the economy graph over these past few years.
    I hope, therefore, that the Chancellor, now that at last he is beginning to take a timid and occasional little step every couple of months towards expansion, looking over his shoulder to see if the right hon. Member for Monmouth is there and whether he approves [Laughter.]—no, the right hon. Member for Monmouth is not present tonight and it is quite safe, though one of his hon. Friends is present—will give a great deal of thought to the question whether he could go ahead more vigorously and strongly if at the same time he introduced some controls to prevent the less essential section of the economy from expanding. I hope that he will think very hard about that possibility—
    Sir Toby Low: Garages.
    Mr. Wilson: That was a case in point. I did not myself intend to refer to it, because I know that it is a sore point with some hon. Members opposite, but I remember that in the debate on the Gracious Speech in 1955, only a couple of weeks after the General Election—I think that the date of the debate was 10th June, but the right hon. Gentleman can check this—I pressed this point very strongly on the then President of the Board of Trade who later became Chancellor, but who is now no longer on the Treasury Bench. The arguments he used about the virtues of expansion and about how we did not want to restrict investment read very strangely today when one looks at what he had to say on these issues last September and subsequently.
    We have pressed the necessity for increasing investment. The Chancellor, I think, in his heart would not only like to accept our arguments, but would like to go a long way in the matter of invest-

    1009
    ment, because none knows better than he—or, if anyone does, it must be the Paymaster-General, so I say that both of them know—that if ever the Paymaster-General succeeds in negotiating the European Free Trade Area involving this country, then this country stands or falls on whether or not we are a high or a low investment economy.
    We cannot face that competition with the level of investment that we have had in the last few years. I know there are some who say that we should, therefore, oppose the Free Trade Area, but whether or not there is a Free Trade Area, sooner or later we shall find the competition from abroad if we do not become a high investment economy as we need to be. It is not a question of a Free Trade Area or of no Free Trade Area, but simply that the Free Trade Area will merely hasten the process and the extent of that competition that we know we have to face—that, indeed, we are already facing in an increasing degree—in the markets of the world.
    Therefore, it is vital that we become a high investment economy, but we must not go forward on the same basis that we did in 1954–55 of encouraging such vast and wide expansion of investment in essential and inessential industry that a month or two later we have to come back, cut down on everything and, because of the Government's fear of controls, have to rely on methods which, in the main, cut down an the essential investment while having a less direct impact on the inessential investment.
    There is another reason why the Chancellor has come forward with this proposal tonight. He has been very cautious about it; he put it in a very restrained way because he knows that the country is facing a danger of recession that is much greater than the problem of inflation about which, of course, he has to keep on making these speeches if he is to keep well in with some of his more weighty back benchers. I do not, of course, refer to any physical characteristics.
    As I say, he knows that we are facing that danger. The position since April is not encouraging in that respect. Indeed, it is worse. I know that there are right hon. Gentlemen opposite who say that unemployment did not rise very much last month. I did not know that it would
    1010
    be necessary to deal with this question tonight, because I did not know that the Chancellor was to make this announcement, so I have not had an opportunity of looking up facts and figures and dates, but have to rely on my memory. However, I do not think that the right hon. Gentleman will challenge these figures, which I quote from memory.
    In March of this year the numbers unemployed were 70,000 greater than in March of last year. In April, the numbers unemployed were 100,000 greater than in the same month of last year, and in May they were 130,000 greater. Therefore, in each of those months the position relative to the previous year was 30,000 worse.
    9.0 p.m.
    It is not a question of whether the absolute figure rose by only 4,000 or 5,000, because this is the period when seasonally there should be a sharp decrease in the numbers unemployed, and we all know that in many areas the unemployment position is a great deal worse.
    Frankly, I believe that the unemployment figures at present gravely understate the true position of the under-capacity of industry. It is not a question of the number being turned off. There is a great degree of under-use. We know that there is considerably less overtime and considerably more recorded short time, but we also know, apart from those factories where it can be measured in terms of overtime and short time, that there is a great deal of slackness which cannot be measured, but which is none the less real. There are many factories which could produce 10, 20 or 30 per cent. more with the same degree of labour. This problem cannot be measured in terms of the numbers of unemployed.
    Many employers have a different attitude from that adopted in pre-war days and when they try to keep on labour as long as possible, some because they are afraid of union action in case of redundancy, but many because they feel that the recession is only temporary and will not affect them. I do not want to pursue that matter, but there is a great deal more of recession in this country than one would dream from the figures and facts given by the Chancellor.

    1011
    That recession—and here we have a very close parallel with what happened in the United States a few months ago—is being concentrated more and more in the investment industries. Certain industries, like cotton which is abysmally depressed, are seriously depressed. I am glad the Minister of Works has now entered the Chamber, because this affects him very much, since one of the most depressed is the building industry, as he well knows. The reason for the depression in the building industry is the slow drying-up of investment programmes of the 1954–55 boom.
    One would be glad if one felt that the Chancellor's announcement about initial allowances would lead to an increase in essential investment, since it could have an important effect on the position of the building industry. I am concerned only because the result of the Chancellor's efforts over the past few months has been to create a psychology in industry which will make it difficult for this concession to correct the position.
    It is no good the Chancellor continuing on the basis of brake-accelerator, accelerator-brake in the way he has done, because the kind of braking action which was applied last September—and it did not start last September; it started with the Budget of the Prime Minister two years ago—has had such an effect on the psychology of British industry that even if the Chancellor were now to remove the credit squeeze and remove many of the other inhibitions on investment, and even if, as he now proposes, he were to increase initial allowances. I doubt whether the psychology of expansion is there for industry to accept his offer.
    The greatest tragedy in the past two or three years is that whereas before the war there was a generation of stagnation in industry, as we all know, and too much restrictive practice on both sides of industry and too much playing for safety, and so on, both parties can take satisfaction from the fact that since the war there has been a change in the psychology of British industry and British management. Whereas it was anti-investment before the war, today many industrialists and business managers are pro-investment, very investment conscious. Given half a chance, they will do all they can to modernise and mechanise their industries.
    1012
    It is therefore a double tragedy that just when we have this psychological change of climate in British industry the Government have come along in the last two or three years and have said that we could not afford investment because we should run into so many crises. We must welcome the fact that the Chancellor is slowly moving, but we must warn him that if he moves in this direction without a steering wheel he will run into the same difficulties which the Lord Privy Seal encountered. If he succeeds in getting investment expansion—recognising that we warned the Government many months ago that this was happening in America, although they were still very complacent about it—it is doubtful whether the Chancellor's proposals will create the expansionist urge in industry, especially in essential industry, which both sides of the Committee would like to see.
    Sir T. Low: After that considerable impromptu speech by the right hon. Member for Huyton (Mr. H. Wilson), I should like to express on behalf of myself, and I believe all my hon. Friends on this side of the Committee, a very warm welcome to the statement which my right hon. Friend the Chancellor of the Exchequer made at the beginning of this short debate.
    My welcome is warm and complete, and I have no reservations—no nonsense about "pussyfooting", which was the word which the right hon. Member for Huyton introduced. I think my right hon. Friend is to be congratulated on having got his timing about right. When we heard him speak to us at the time of the Budget debate, we thought that the move which is now embodied in the Clause was the right thing to do, and we welcomed very much his statement that he was keeping his eye on the position and that his approach was one of flexibility. It is good to know that after two months he has re-examined the matter and has found it wise to move forward once again, and that he has come to tell the Committee so this evening.
    The right hon. Member for Huyton made a speech which we all realised was impromptu, and I think that all Members of the Committee would like to congratulate him upon the way in which he steered through the difficult rules of order on the Question, "That the Clause

    1013
    stand part of the Bill", so that he managed to express his innermost thoughts on some of the most fundamental matters of our economic life. If I tried to answer him on all those points, I should indeed try your patience, Mr. Blackburn, and therefore I shall not do so.
    I should like to make this general observation. I hope that we shall not exaggerate the significance of this important step which the Chancellor has announced, and I think the right hon. Member for Huyton was in danger of getting into hyperbole too often. He seems to think that we ought to live in a boom, but what I want to see is a steady expansion based upon stable conditions, which are now very nearly in being here. On that basis of steady expansion, I believe that we can get the steadily expanding standard of life which he and his right hon. and hon. Friends want every bit as much as we do.
    I hope the right hon. Gentleman will refrain from crying "stinking fish" on the level of investment in British industry in the course of the last two years or so. If he studies the figures, he will see that we have got up to a level of investment which does challenge our main competitors in overseas markets, and that is the way we want to keep going. My right hon. Friend told us in his Budget speech that he wanted to avoid a gap taking place between what had been done and what it was essential to do if we are to keep a steady expansion going. That seems to me to be the right thing, and we do not want to talk now about suddenly stamping our feet on the accelerator and projecting ourselves forward into an unhealthy boom. That is not, as I understand it, the philosophy of the right hon. Gentleman, and it certainly is not my view.
    I welcome this because I think it has the makings of an incentive to industry just at the right time, when we have stable conditions which will allow industry to take advantage of it and really earn the fruits of the conditions which have at last been created by the very wise economic policy pursued by the Government during the course of the last year, the result of which we see in the value of the £ and in the very good balance of trade we now enjoy.
    Mr. Harold Lever: Will the right hon. Gentleman clear up one point? He spoke about an unhealthy boom. Could he give us an example of a recent case of an unhealthy boom, and give the date of it?
    Sir T. Low: An unhealthy boom, as I mean it, is a state of affairs in which there is great expansion and prices go up and up and costs go up.
    Mr. Lever: What was the date of the last one?
    Mr. Rhodes: As for stable conditions, I would remind the right hon. Member for Blackpool, North (Sir T. Low) that before de Gaulle came on the scene merino wool was at 46d. During de Gaulle, it was at 64d., and is back again now to 48d. We do not know how far prices will go further down.
    We must ask ourselves again what we will do about stable conditions. Unless the question of commodity prices is tackled, it is not a ha' p' orth of use giving initial allowances. It might be an inducement if the Chancellor gave us investment allowances, but not initial allowances, because they are really valueless. It is the timing which matters. The situation now is quite different from what it was two or four years ago. Then the delivery dates for machinery were long, and it was not unusual to be told that it would take two years to deliver a machine of a particular sort. Now, one can have it in three months.
    To what extent one will encourage the desire of manufacturers or those putting in capital equipment by an increase of initial allowances up to 30 per cent., I really do not know. It would have been far better if the Chancellor had said, "I believe it is time that we thought more in terms of an expansionist policy. If we get over the difficult period in September in the matter of the £, I will introduce a mild dose of investment allowances, nicely timed, say, in September or October." That would have been better from the point of view of an industrialist thinking of investing in capital equipment.
    The industrialist, during the last eighteen months or two years, has not really been encouraged to think ahead about buying new machinery. He has, indeed, been discouraged. He has been

    1015
    told all that time that he has been producing too much. Gradually, there has been a run-down. Manufacturers have assessed their requirements up to date, and I think it will be found that a great many manufacturers will be content to run on at their present levels, if they can, for some time ahead. I urge the Chancellor to think again about this question of initial allowances and investment allowances during the months between now and September. I think that initial allowances are very overrated. They have to be taken into account over the years in any case. If the Chancellor could introduce a mild inducement in the form of an investment allowance later, it would be welcomed by those who are now thinking of placing orders.
    9.15 p.m.
    Mr. John Arbuthnot: I should like to join with my right hon. Friend the Member for Blackpool, North (Sir T. Low) in congratulating my right hon. Friend the Chancellor of the Exchequer on the further step he has foreshadowed to improve initial allowances. I am not in agreement with the remarks of the hon. Member for Ashton-under-Lyne (Mr. Rhodes) in what he said comparing the merits of initial allowances with investment allowances. Personally, if I had to choose between the two from the national point of view, I would think that initial allowances are the better in the sense that they do not in the long run cost the Exchequer anything. But the corollary to that is that one can have larger initial allowances with greater impunity than investment allowances.
    Therefore, I should like the Chancellor of the Exchequer to consider before he tables his Amendment on Report whether he cannot go further than the proposal that he has told us about this evening. One of the things that strikes me about the proposal is that it could be extended still further if he were prepared to insist that any initial allowance that is given should be written off in the books of the company at the same time. By doing that it would provide a deflationary effect to counteract the possible inflationary effect that an increase in initial allowances might provide.
    Mr. Rhodes Mr. Rhodes rose—
    Mr. Arbuthnot: May I just finish this part of what I am saying?
    1016
    Therefore, I hope that my right hon. Friend will consider that point, bearing in mind that the total cost over the life of machinery or plant to the Exchequer of initial allowances at whatever rate will be no greater than it is at the present moment. I should like him to consider whether it would be possible to take the lid off completely and to allow industry to write off its plant and machinery at whatever rate it wishes. The important thing at the moment is that we should encourage our industrialists to bring in new equipment, to experiment with new plant and to make themselves as efficient in competition with other countries—
    Mr. R. T. Paget: Is that why the Government have a credit squeeze?
    Mr. Arbuthnot: —as they possibly can. The credit squeeze is another matter. I am sure that my right hon. Friend is right to respond to the decrease in industrial investment that has taken place since he introduced his Budget two months ago by giving this additional increase in initial allowances. I hope that he will go still further than that.
    I think that the hon. Member for Ashton-under-Lyme wishes to interrupt.
    Mr. Rhodes: Yes, because I could not follow the hon. Gentleman. I thought he was getting very mixed up with regard to the principle of initial allowances. It does not matter in the long run whether one gets 30 per cent. in the first year or at some other time. But with investment allowances it does matter, if they are at the rate of 40 per cent., as with shipping. In that case, one gets a tax relief of 40 per cent. straight away, which, of course, is at the expense of other taxpayers. If we are going to give an incentive to industry to put in plant, the best incentive that we can give them is to put in plant at the expense of somebody else, which means investment allowances.
    Mr. Arbuthnot: What the hon. Member is suggesting is that we should put in plant at the expense of the Chancellor of the Exchequer or other taxpayers. I appreciate that point and that that might be a still greater incentive. The hon. Member is not, however, right in saying that it does not matter at what rate we can write down plant and machinery through initial allowances. It matters

    1017
    a great deal, for this reason. We in this country say that our working man does not have the same chance as his American competitor since the capital equipment behind his American competitor is three times the capital equipment behind our own working man.
    If we encourage our industry to use its capital equipment more rapidly, to make greater use of it and to use it for three shifts a day instead of only one or even part of one, that would be of immense use in stimulating our industrial activity. If the initial allowance is high in the first place, not only will it encourage industry to use its capital equipment more and to use it more quickly, but it will also mean that the industrialist will be able to replace his capital equipment more rapidly since he knows that he has been able to write it off, both from a tax point of view and in his accounts, at a much earlier date. Therefore, the hon. Member was not right in saying that the rate of the initial allowances does not matter. It matters a great deal.
    It would, however, be even more helpful to industry, and it would not cost the Exchequer anything in the long run, if my right hon. Friend were to take the lid off and allow industry to decide itself the rate at which it could write off its capital equipment, provided that it also wrote off that equipment in its accounts.
    Mr. H. Wilson: I should like to put a question to the Chancellor, who might be able to help the progress of the debate. This is obviously an important debate. Both sides of the Committee have taken that from the right hon. Gentleman's announcement. A number of my hon. Friends have speeches to make on the Clause which they probably would have made without the Chancellor's announcement but which are now rather more pointed to what the Chancellor has said.
    Is the Chancellor's announcement part of a general series of anti-recession measures, and does it merely happen to be convenient that tonight is the night when he has announced this one? I obviously would not ask him his intentions about Bank Rate. If I did, he would not be likely to give much of an answer tonight. Even if he did, it would be out of order. It is important to know whether this is one of a series of measures that the Chancellor intends to announce
    1018
    over the next day or two or whether it is one on its own.
    The Temporary Chairman (Mr. F. Blackburn): The Chancellor would have difficulty in keeping in order in answering the question.
    Mr. Wilson: Surely he would say "Yes" or "No" and still be in order.
    Some of my hon. Friends might want to say that the need for anti-recession measures is so great that if the Chancellor is not announcing any other measures, we ought to press him to go from 30 per cent. to 40 per cent. or from 40 to 50 per cent. If this is part of a well-considered plan and a real shift of Government policy compared with the Budget, many of us might say that the 30 per cent. is more reasonable.
    Mr. Amory: I can answer that within the terms of order by repeating that our policies are flexible and we shall change our policies whenever we feel that change is required in the light of changing circumstances.
    Mr. H. Lever: I join my hon. and right hon. Friends in giving a conditional welcome to the Chancellor's proposal. There are, however, one or two words which must be said in qualification. I am glad to note that the indulgence to the Front Bench in discussing this matter is being extended with equal generosity to the back benches. Contrary to the views of the hon. Member for Blackpool, North (Sir T. Low), this issue opens up the consideration of the whole of our economic policies. It is impossible to discuss what is or should be the right investment allowances without considering what is the inflationary position and what are the Chancellor's economic and financial policies.
    It is quite clear that the Chancellor has revealed tonight the Government's divided mind. He cuffs industry now and again and then suddenly starts giving it encouraging concessions. If there were any wobbling in the exchange rate of sterling there would be more reaction on the part of his party and we should hear once again of what the hon. Member for Blackpool, North calls an unhealthy boom and we should have investment allowances cut again.
    Perhaps the Chancellor would explain why he thinks it is desirable to give this

    1019
    investment encouragement in this case when he thinks it necessary to pull it back in so many essential fields. Criticism of the Chancellor from this side of the Committee has been too fair. My complaint is not that the Chancellor is encouraging unselective investment. It is that he is encouraging selective investment, but the wrong investment. He has deliberately used financial control to cut down on the most vital investment for the future of the country, namely, roads and railways, and he is allowing a general investment encouragement, with tax incentive, as proposed tonight.
    Why does the Chancellor think it more essential that money should be made available, with a tax reward, without qualification or selection in this matter when at the same time he and the Government have deliberately hamstrung the most vital development work upon railways and roads? If anybody surveys our economy he will realise that, apart from the morale of the people, the greatest national resource of the country today in the modern world, which makes it competitive, is the country's compact size and splendid communications. It is a natural advantage. Very often people do not realise what a big part it plays in modern complicated industrial processes when one has to go only within a radius of a few miles to carry out innumerable complicated processes on the same article. Somebody running a pin-table can benefit from the Chancellor's proposals tonight, but there is no incentive to investment in absolutely basic and vital matters such as roads and railways.
    This is a key question. Britain, instead of leading the world as it once did, is every year, under the present Government, quite unjustifiably falling behind in railway and road development. Everywhere we go on the Continent of Europe we can see immense and very wise expenditure on communications, and only in Britain is this subject neglected.
    Sir T. Low: Nonsense.
    Mr. Lever: The hon. Member for Blackpool, North says that it is nonsense. Either he suffers from defective eyesight or he has not travelled very far. All the facts are available, but it might very well be felt Chat I was trespassing the rules of order if I quoted them in detail. Every schoolboy who has paid any attention to
    1020
    economics knows that there is a woeful bottom-of-the-table look about expenditure in this country on the roads and railways compared with expenditure in other European countries.
    Sir T. Low: No.
    Mr. Lever: If the hon. Member wants to go on record in HANSARD as denying that, I will be very ready to allow him to have the opportunity of having his fatuousness reported in the Committee debates. I hope that the hon. Member for Dover (Mr. Arbuthnot) will encourage the Chancellor. He does not believe in a policy of restriction, but he is like an old man in love. The intentions are excellent but the capacity is in question. The Government have a past of intentions and I do not believe them. We have seen this happen in so many fields at home and abroad.
    Mr. Amory: I trust that the hon. Gentleman is referring to my colleagues and myself collectively.
    9.30 p.m.
    Mr. Lever: I am compelled to say that it is a collective difficulty which seems to have afflicted the Government even before the right hon. Gentleman was Chancellor of the Exchequer. I was pointing out that he himself was the most expansionist of these right hon. Gentlemen, and he would therefore be the least open to the suggestion which has just been made if it were taken in a personal manner.
    Mr. Raymond Gower: But does not the hon. Gentleman agree that a policy which has brought about the position where the trade gap is the lowest since the end of the war and where the overall position is that this country is earning a surplus would appear to be justified by results?
    Mr. Lever: Members of the Conservative Party seem to be considerably bone-headed in spite of the many lectures which many of my hon. Friends have given, and which I myself at intervals have offered for their consideration. They must get out of this habit of reasoning because it would not deceive a subnormal schoolboy that when things go well with our balance of payments that is due to the Chancellor of the Exchequer and when things go badly

    1021
    that is an unfortunate conjunction of international circumstances beyond their control. We have suffered from this puerile reasoning for too long.
    The reason why our balance of trade figures have improved has nothing material to do with anything the Government have done. It is largely because the immediate effect of the American recession has been to alter the terms of trade favourably to this country. It has many dangers in it, though the immediate result is of a character guaranteed to cheer up the hearts of the backwoodsmen in the Conservative ranks.
    Mr. Cyril Osborne: It has a long way to go before it is back to normal.
    Mr. Lever Mr. Lever rose—
    The Deputy-Chairman (Sir Gordon Touche): Order. The hon. Member is going far beyond the Question, "Thai the Clause stand part of the Bill."
    Mr. Lever: I was led away not only by your predecessor, Sir Gordon, but by the Chancellor and by my right hon. Friend the Member for Huyton (Mr. H. Wilson), who when you were not present discussed exhaustively matters of great interest to the Committee which have a great relevance to these proposals, namely, the state of inflation, the state of world trade, and the like. I assure you that if you had heard this contribution you would not have wished that the Front Bench opposite should be allowed to spread an error and that the back bench on this side of the Committee, by some rule of order, should be restricted from correcting it.
    The Deputy-Chairman: The point of order applies in both cases. I understand that brief references were made to these subjects, but we are bound by the rule of order on the Question, "That the Clause stand part of the Bill."
    Mr. Lever: I will not try your patience, Sir Gordon, as I have always been treated with extreme generosity by the Chair. I will say, without appearing at all obstreperous, that it is very odd that the Chancellor of the Exchequer, who is still retarding investment in our basic and essential industries, is making this proposal and, at the same time, has not yet recanted from his previous position that
    1022
    we are in some need of restriction upon production when, on the other hand, he gives it a push.
    This is a crucial question for a democratic society—whether we can encourage investment; that is to say, whether we can get the society in which we live to save enough to build its future and by competition with the rest of the world, and particularly with the authoritarian part of the world, to make these allocations of investment material at the expense of the consumer by simple degrees. The technique of developing this kind of encouragement ought to be studied.
    There is one word of caution I ought to utter before joining the uncritical welcome for this tax concession. I have a brief general complaint to make. Every selective concession of tax delays and makes more difficult a general concession of tax. I would not go the whole way with the hon. Member for Dover, but I have a great deal of sympathy with those industrialists who say that their rates of tax are kept at too high a level because other people are getting immense tax concessions which they perhaps do not need and without which they would perhaps operate just as efficiently, and that this keeps up the rate of taxation.
    I urge the Chancellor to make his proposal tonight a final and firm act of defiance of the bankers and all others who, representing the mortgage interests of society, so to speak, have sought to curb production at the expense of the welfare of the community and the expansion of the country's productive capacity.
    Mr. M. Philips Price: We all agree about the desirability of assisting investment enterprise by some method. There is no doubt that the initial allowances have provided one way in which it can be done. The difficulty with both initial allowances and investment allowances seems to be that they are not selective. As my hon. Friends have pointed out—I emphasise it still further—if we are to proceed with encouraging the most useful kind of investment, improving and cheapening our methods of production and increasing efficiency, the Chancellor must find some way by which he can be more selective than is possible today.
    I am not sufficiently expert to say whether this could better be done with

    1023
    initial allowances than investment allowances, but I have a feeling that attention will have to be given to other things as well, and particularly, if he is in earnest, the Chancellor must take further steps to encourage the nationalised industries, which have been hamstrung, once more to invest as they wish.
    There has been some relaxation in the case of tie railways. Owing to the wage crisis, the railways are to be allowed to do something more. The road and railway problem is absolutely vital. We are a small country with many geographical advantages and many important resources, such as coal, but our transport system is extraordinarily behind the times. I cannot visualise initial allowances or any other allowances dealing with the problem, although we all welcome the steps which the Chancellor has taken and the further step which he foreshadows of increasing the allowances by one-half instead of one-quarter. All this seems to show that he has very much in mind the importance of the problem. We shall listen with much interest on Report to the details of what he proposes.
    The hon. Member for Dover (Mr. Arbuthnot) raised an important point, arguing that it was important to write off investments as quickly as possible in order to encourage further investments. There is something in that. I have noticed in the agricultural industry how, owing to rapid scientific discoveries in relation to machinery, what a farmer today considers to be the most up-to-date machinery for one type of work on the land is almost out of date in a couple of years' time and something better is introduced. Knowing that that problem exists in agriculture—I am certain that it exists in industry, too—there is much to be said for something which would encourage rapid writing off and further investment in more up-to-date machines. I raised this question during the Second Reading debate, and the Chancellor was kind enough to write me a letter explaining that this provision applied to agricultural machinery, although not to buildings. I am glad that he has seen his way to apply it to agriculture, and we shall listen with much interest to his further statement on the matter.
    Mr. Paget: If this concession is made in order to encourage further investment,
    1024
    I should like to know where the money is coming from. The former Chancellor of the Exchequer had a somewhat obsolete theory that inflation could be controlled by controlling the amount of available money, and he did just that through the banks. If we are going to do that I can never see the point of having a high Bank Rate. If the demand for credit is greater than the amount of credit allowed to be available at 7 per cent., what in the world does it matter if it is made available at 2 per cent.?
    Further, if investment is to be encouraged but no more money is to be made available to replace these machines which are to be written off, where are the machines coming from? Shall we have a change in this restrictionist policy or shall we not? What matters is not the investment allowance but the credit policy of the Government.
    Mr. Roy Jenkins: I hesitate to rise in case the Chancellor wishes to answer the question put by my hon. and learned Friend the Member for Northampton (Mr. Paget). I take it that the right hon. Gentleman does not wish to do so.
    Mr. Amory: I should be out of order if I made a speech on the credit policy of the Government.
    Mr. Jenkins: I should have thought that it was possible to answer my hon. and learned Friend's question in terms which were either in order or out of order—entirely as the Chancellor wished to take it. No doubt we shall hear from the Government upon that matter at a later stage.
    There is no doubt that the Chancellor's important announcement reflects a change of Government policy. How significant a change it is we must judge, as my right hon. Friend the Member for Huyton (Mr. H. Wilson) said, by taking into account whether or not it is accompanied by other measures. But it is clear that the Chancellor's diagnosis of the situation and of what it is safe and proper for him to do today is different from what it was two months ago, in the middle of April. Why is it different? The right hon. Member for Blackpool, North (Sir T. Low) who assured us, to our great regret, that he was making his only speech on the Finance Bill—and he made it very fast—has always seemed to me to be attempting the rather difficult and thank-

    1025
    less task of trying to build a bridge between the policy of the right hon. Member for Monmouth (Mr. P. Thorneycroft) and that of the present Chancellor. I thought he sought to do that this evening by suggesting that it was now possible to have a change of policy because the objective of stability had been almost achieved.
    If that is the Government's view, what basis of stability has been almost achieved at present? Presumably it is not a basis of price stability, because, whatever else has happened in the past six months, it is clear that we have made a much less close approximation to price stability than we did during the same period a year ago. This is one of the striking facts which are now available to us. I do not seek to make a great deal of the rise of two points in the cost of living index which suddenly appeared a month ago. That was largely to be accounted for by the fact of rounding off to the nearest number. I would not make much of anything that happened in one month. But I would make a good deal of a six or seven months' move.
    9.45 p.m.
    If one looks back over this winter and compares it with the previous winter, one sees that the rate of price increase has been quite appreciably greater for this six months than it was for the comparable six months. That is a striking fact. It has happened during the past six months, during the period when we have been greatly helped by falling import prices, whereas during the comparable six months of 1956–57 we had prices working against us and other troubles as well.
    Therefore, it must not be thought that the policy announced on 19th September, the policy associated particularly with the name of the right hon. Member for Monmouth, has produced price stability. Under extraordinarily favourable international conditions, it has been less successful in producing price stability than the policy applied twelve months before, and there is no foundation here on which the Chancellor—if his object before he moved to expansion was to achieve price stability—can say that success has been achieved.
    I should quite understand if he came to the Committee—I expect that to some extent this was at the back of his mind
    1026
    —and said that we have tried a good deal of deflation, we have lost a good deal of national wealth, we are on the edge not merely of losing national wealth but of actual depression and growing unemployment, and we therefore have become extremely sceptical as to whether we can get price stability by means of this deflationary policy and we shall try to get it by the much more attractive and sensible policy of a little expansion. That would have been a possible attitude, although it would have involved throwing the right hon. Member for Monmouth right out of the window.
    Do not let us try to pretend that everyone can be perfectly happy. The right hon. Member for Blackpool, North, sitting in the corner seat, almost as if the right hon. Member for Monmouth were here, has told us that both the Chancellor and his right hon. Friend have been right, and he is now in the happy position of promoting an intellectual union between them.
    There is no basis of success on which the Chancellor can now relax. There is a basis of failure, and I think that he is perfectly right to recognise this and to try another policy. I hope, from what he has said, he now realises that he is doing that. The perfectly clear position is that price stability has not been maintained.
    It is perfectly true, as one hon. Member opposite said earlier, that we have a very favourable balance of payments position at the present time. I forget which hon. Member it was who paid tribute to the policies which have produced a most favourable credit trade balance, but he said that the Government's policy had produced in May the most favourable trade balance since the war. The dock strike had something to do with it.
    It may be, of course, that Government policy produced the dock strike, but that question apart, the underlying trade position is very favourable at present; but it was not quite so favourable, but comparatively very favourable, last September. We did not have a 7 per cent. Bank Rate, or the policies specifically associated with the right hon. Member for Monmouth, because we had created a position in which we had an unfavourable trade balance. We already had a favourable trade balance.

    1027
    Whatever those policies were designed to do, it was something other than that. I have always understood that they were designed to produce price stability here at home. From this point of view, despite the most favourable possible international conditions, they have failed to do that, and in the seven months since last October we have had a worse movement of prices than in the seven equivalent months of the preceding years. Therefore, I hope, as I say, that there will be no doubt about realising that there is no basis of success on which to proceed from that point of view.
    The hon. Member for Dover (Mr. Arbuthnot) made a number of interesting technical points about the difference between investment allowances and initial allowances. He also made a point which my hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes) said he could not understand. I was with my hon. Friend in finding it extremely difficult to understand, though I thought it was an interesting point, and I wish that the hon. Member for Dover had developed it more. As I understood it, his point was that it was possible that any increase in the initial allowances may have no inflationary effect, provided it was merely given as a short-term tax concession to companies and was not accompanied by their writing off in their own books at a faster rate than they otherwise would do. As I understand it, the point the hon. Member had in mind was that, unless this happened, the tax concessions made to companies by an increase in initial allowances would merely make them more eager to distribute and make them have more funds available for distribution. Unless that is so, I am unable to clothe the hon. Member's words with any meaning. I think that is what he meant.
    If so, the hon. Gentleman takes the view, which is clearly a view that could be supported very strongly, that it is important at present not to encourage a distribution policy, and I can well understand how he might adopt that view. But I find it difficult to see how he can support the Budget as a whole, and the unification of Profits Tax, at a time when he regards the most important thing to be done in continuing initial allowance concessions to be to ensure that companies should apply this in their own bookkeeping policy in such a way
    1028
    as to make it difficult for them to use those concessions in any way to encourage an increase in distribution policy. I find it difficult to see how the hon. Member can take that view strongly on Clause 13 when I think one may hazard the guess that he will possibly take a slightly different view and one favourable to the Government when we come to discuss Clause 20 and put forward a constructive point of view.
    The right hon. Member for Blackpool, North (Sir T. Low)—to whom I come back for a moment—was eager that we on this side of the Committee should not "cry stinking fish" regarding the level of investment which we had achieved in this country. I think it important that we should not "cry stinking fish". I have never been absolutely sure what that expression means—
    Sir T. Low: It was an expression frequently used in the old days by the hon. Gentleman's former leader, now Earl Attlee, who constantly accused me of doing so, and therefore the hon. Gentleman ought to know.
    Mr. Jenkins: I am sorry if the right hon. Gentleman has indulged in this unfortunate practice. I did not myself accuse him of doing so, and I do not recollect any speech in which he has done so. But if he says that he has, the Committee must accept it. I am still not absolutely clear about what the expression means.
    Mr. Mitchison: It means something nasty.
    Mr. Jenkins: I understand it means something nasty or disagreeable when applied to the level of investment or to anything else.
    It is true that over the few years and up to a year or so ago we had a mounting level of investment, largely as a result of the investment allowances introduced by the Lord Privy Seal, which, I think, were by far the most effective method yet developed of stimulating investment in the private sector. We did have a rising level of investment, and one should not underestimate the amount achieved. But equally, it is important to bear in mind that investment rose from a low level very slowly, and even at its highest level—before it recently began to tail off a little and while it was a good deal better

    1029
    than previously—it was not nearly at the level at which we want to see it jerked up, and at which we ought to keep it if we are to do as well as our major competitors by a really dynamic expansion economy.
    I must say that I do not think either of the Governments which have governed this country since the war have in any way a faultless record in this respect. Nothing is less rewarding, of course, than an argument based on the assumption on one side that everything was all right until 1951 and, on the other side, that nothing was right until 1951 but that everything got right afterwards in some mysterious way. Broadly speaking, whatever the reasons, and different although the circumstances were, over the whole of the post-war period our investment has been inadequate. It is still not adequate today and has to go a lot higher. I think that on that basis we can agree, and I hope that we can do something more than agree and really move towards getting it higher.
    The Chancellor's concession this evening is a move in that direction, though a small one. But as the investment allowances appear on a priori grounds to be more effective than initial allowances, I hope that he will turn towards them, go further in that direction, and realise overtly as well as explicitly that the policy of the last six months has been a dismal one, has not achieved the results it was designed to achieve, has given great disadvantages without corresponding benefits, and that we should turn our back on it as firmly and quickly as we can.
    I recognise that the Chancellor, still placed somewhat under the shadow of his right hon. Friend the Member for Monmouth, cannot do this too dramatically. I hope, however, that he will not worry too much about this shadow—perhaps disguising what he is doing under a few phrases designed for consumption below the Gangway on his own side of the Chamber—and that we may begin to move firmly and rapidly towards a return to expansion which will not only bring great benefits for its own sake but, on the evidence, is far more likely to give stable prices than is the bankrupt and sterile policy that has been pursued in the last few months.
    Question put and agreed to.
    Clause ordered to stand part of the Bill.
    Consideration of postponed Clauses 15 to 34 and new Clauses further postponed until after consideration of Schedule 5.—[Mr. Amory.]

    Clause 14.—(FEES AND SUBSCRIPTIONS TO PROFESSIONAL BODIES, LEARNED SOCIETIES, ETC.)
    Mr. Eric Fletcher: I beg to move, in page 9, line 6, to leave out from "persons" to "whose".
    The Committee will appreciate that this Clause introduces some concessions with regard to the expenses of Schedule E taxpayers, a matter which was debated in some detail during the debates on last year's Finance Bill. In fact, for a long time past we on this side of the Committee have urged that relief should be given to those who already suffer very considerably in comparison with Schedule D taxpayers by reason of the fact that the subscriptions they make to various professional organisations and learned societies have not hitherto been allowed as deductible expenses for Income Tax.
    We recognise that this Clause goes some way, although only a very short way, to meet those past criticisms. In fact, the Economist, in commenting on the Clause in its issue of 24th May said
    "… although it takes two pages of the Bill and a Schedule … if this is the Chancellor's last word as well as his first, it will be a big disappointment."
    The three Amendments which I have put down are intended to remove some of what seem to be the quite unnecessary—
    The Deputy-Chairman: Only the first Amendment is selected. Of course, the hon. Member can discuss the point of the other two on the Motion, "That the Clause stand part of the Bill."
    10.0 p.m.
    Mr. Fletcher: I realised that the other two Amendments to delete subsection (3) and (4) were not to be called. I shall confine my remarks to this Amendment, which is designed to remove one of the restrictions which the Chancellor has unnecessarily introduced. The words to which I object are:
    "not of a mainly local character".
    Those words should be excluded, because if for the purposes of their work people

    1031
    make contributions or send subscriptions to professional bodies and learned societies which are of a mainly local character, they are entitled to precisely the same relief as if those professional bodies and learned societies were national in character.
    It is well known that a great many of these organisations, the learned societies, are of a local character. They are just as deserving of support as national organisations. The concession is modest. Neither the Chancellor nor the Financial Secretary has yet given an estimate of what the concession in the Clause will cost, but I cannot imagine that it will be very considerable. I should have thought that it would have been almost de minimis for the Amendment to be accepted and the ambit of the Clause widened so that local societies and local professional bodies could have the same benefits as national societies.
    Mr. Stevens: I support what the hon. Member for Islington, East (Mr. E. Fletcher) has said. It is certainly the case with the large professional bodies that a good deal of the work of the advancement and the spread of knowledge and the maintenance or improvement of standards of conduct is, as a matter of policy, devolved upon local district societies, which are probably mainly of a local character, but which play an extremely important part in protecting the public by ensuring the maintenance of minimum standards of knowledge and conduct.
    Whether such a body can satisfy the requirements of paragraphs (a), (b) and (c) of subsection (2) should be the test and not whether the society happen to be in a certain locality. The words which the hon. Member proposes should be deleted should properly be deleted. I warmly commend the Amendment to the Committee.
    Mr. John Cronin: I add my support to what has been said by my hon. Friend the Member for Islington, East (Mr. E. Fletcher) and the hon. Member for Langstone (Mr. Stevens). I should say at the outset that most of us feel considerable satisfaction that the Clause has been drafted at all, but we are rather surprised that this unfortunate little phrase should appear.
    1032
    Why are the Government so opposed to local bodies? It is clear that many serve a very useful purpose. As has been pointed out, they also contribute to the maintenance and improvement of standards of conduct and the spread of knowledge and learning. Why is the position changed if it happens to be a local body?
    I can give a simple illustration. A doctor can discuss a case and other matters with his professional colleagues at the Royal Society of Medicine, because that is a national body; but an equally useful body, the Chelsea Clinic Society, is completely ruled out because of this unfortunate phrase. I am sure that the Financial Secretary will appreciate that many of these useful bodies require the physical presence of their members to derive the maximum benefit. What will happen, say, to a Liverpool lawyer if he can get this concession only if he belongs to a national organisation? Why cannot he discuss matters of law at the Liverpool local society? Why should a doctor who lives in Aberdeenshire have to go to Edinburgh or to London before he can discuss cases and increase his knowledge with the help of his colleagues? It seems to me that the economy involved must be negligible, so that it can hardly be for financial reasons that the Government would wish to dissociate themselves from the Amendment.
    The Clause, as drafted, will literally strangle these very useful learned local societies, and it seems to me that it would be very unfortunate if that should happen. I feel sure that the Financial Secretary will be prepared to leave the whole matter to the discretion of the Commissioners of Inland Revenue, as indicated in subsection (2), instead of retaining these unfortunate words which so severely limit their discretion. This is a very useful Clause and most of us on this side of the Committee are very satisfied with it, but it has this small imperfection, rather like a wart on the Mona Lisa's nose, and if the hon. and learned Gentleman will deal with that, we shall be very satisfied.
    Mr. Mitchison: May I ask one question of the hon. and learned Gentleman before he replies to the debate? Suppose that there are bodies of persons who, apart from this phrase, would be

    1033
    approved, and that these bodies carry on precisely similar activities in the following areas. Would be tell me which of them would be of a mainly local character? First of all, England; secondly, Scotland; thirdly, Wales; fourthly, the Channel Islands; and, fifthly, Northern Ireland.
    Mr. Simon: I am very grateful for the general reception that this Clause has obviously had. I think it will be of value to a number of professional men for whom the operation of the Schedule E expenses rule has been a source of genuine grievance; and, indeed, it goes beyond professional men.
    The hon. Member for Islington, East (Mr. E. Fletcher) asked me the cost of the concession in the Clause. I should not like to be tied to a figure, because it is very difficult to estimate it, but as far as we can estimate, it will be about £1 million. The hon. Member for Loughborough (Mr. Cronin) said, I think quite rightly, it could not be economy which caused the inclusion of the phrase which the Amendment seeks to remove. He is perfectly right there. The reason is not the direct saving in revenue. It is a purely practical one. In all these matters, one has to measure the grievance which is sought to be removed against the burden that its removal would put on the Revenue—the difficulty and the cost of administration; and it is purely because of the disproportion on this count that the phrase has been included.
    I think that, perhaps quite naturally, when one finds my hon. Friend the Member for Langstone (Mr. Stevens) agreeing with the hon. Gentleman opposite, one suspects that the reasoning and logic are impeccable, and indeed they are. There is no logical reason why local societies should be excluded. As the hon. Member for Islington, East, said they are just as deserving and just as good a case can be made out for them, until one considers on the one hand the grievance and difficulty their exclusion causes and, on the other, the administrative difficulty of including them in the concession made by this Clause. In theory, any local society should be approved, if it satisfies the test just as much as any national body, but it is when we come to the difficulty of applying the test that we see
    1034
    why it is desirable to exclude the local societies.
    Many local societies are primarily of a social or recreational type. At any rate, they have a very strong recreational element, far more so than the national bodies. This is particularly clear, I think, when there is a national body with its local counterpart. I think that any hon. Gentleman who reflects on the nature of the activities of the local body will see what I mean when I say that, generally speaking, there is a strong social and recreational element.
    Mr. Cronin: The hon. and learned Gentleman is, of course, aware that subsection (3) deals with that very point, that all matters which do not come strictly within the ambit of subsection (2) are excluded or a certain proportion is removed from the benefit.
    Mr. Simon: I had that in mind. If the hon. Gentleman will allow me to continue, I think he will see the relevance of the point I am making. As we know, even local professional societies are frequently little more than luncheon clubs; at any rate, the luncheon club element is quite strong. One finds it in local scientific societies: the scientific and the social elements are inextricably mixed. There are bodies such as societies of naturalists, photographic societies, local archæological societies, societies of horticulturists, Shakespeare reading societies and so on. It is obvious that, in societies such as those, the interest of members is really in a hobby. The main function of the society or the common interest of the members is the development of a hobby.
    I have no doubt that there will be certain members of local societies—for instance, the local photographer's assistant, the local librarian, or possibly, a school teacher—who will be able to say that their interest is a purely professional one. I come now to the point I was making. This Amendment would mean that every single one of these societies would have to be examined by the Inland Revenue in the light of the provision to which attention has been drawn to see whether its activities qualified under the Clause. That is a formidable assignment to give to the Inland Revenue. We reckon that the national societies will probably number about 3,000. Even that is putting a considerable burden on the Inland Revenue,

    1035
    because there is no question but that the examination ought to take place during the six months after the passing of the Finance Bill so that taxpayers can take advantage of the Clause during this financial year. If one adds to that all the local bodies, the administration of the Clause would break down.
    How far is it a grievance that they are excluded? I do not controvert what has been said by my hon. Friend the Member for Portsmouth, Langstone, by the hon. Member for Islington, East and by the hon. Member for Loughborough, that one cannot deny that, in logic and on the merits, they are entitled to be included. But, generally speaking, the subscription to these local societies is very small, 10s. a year or something like that. The financial grievance in excluding them is comparatively small for the individual taxpayer.
    Mr. E. Fletcher: May I just test what the hon. and learned Gentleman is saying by asking this question? Will he regard a Welsh society or a Scottish society as a purely local society?
    Mr. Simon: I am anxious not to be drawn into saying whether individual societies come within the Clause or not. This is really a matter on which the Committee is entitled to have legal advice, but, for what it is worth, I would say that a national society is not a local society, if I am asked that question. We all know what the local societies, such as the county archaeological society, and the village scientific or horticultural society, mainly are. A national society of the sort that the hon. and learned Member for Kettering (Mr. Mitchison) and the hon. Member for Islington, East asked me about would not be a local society. That is a national society.
    10.15 p.m.
    Sir Hugh Lucas-Tooth: Can the Financial Secretary say whether or not a local branch of a national society would be included? In many national societies, I think the subscriptions go very often to the local branches.
    Mr. Simon: If the subscription goes to the local branch, that is a local society. It is a question of where the subscription is paid.
    1036
    I was dealing with how much grievance is caused by the exclusion. I was pointing out that in the case of local societies or the local branches of national societies the subscription is comparatively small, and in the cases that we have in mind, such as the professional societies mentioned by hon. Gentlemen opposite, those taxpayers will already have benefited very greatly by the inclusion of subscriptions to the national counterpart in the main part of the Clause.
    In the context of this year's administration of the Clause it would not be practical in any way to go through all these local societies. It would cause a breakdown in the administration, Therefore, I say that there is no real grievance or hardship, whatever the logic, in the exclusion, and I cannot advise the Committee to accept the Amendment.
    Mr. E. Fletcher: I am most disappointed with what the Financial Secretary has said, and I do not think the Committee could possibly leave the matter in the way that he has suggested. There is a very real grievance here.
    The Financial Secretary has admitted the case for the inclusion of these local societies on their merits. The only reason that he has given for denying the justice of their claim is an administrative reason. That really will not do. First, the merits of the case are conceded. He says that there is no grievance, but there is. The grievance arises not so much in connection with the professional bodies—which I concede are largely national in character—but in connection with the local societies to which he has made reference—for example, local archæological, geographical and geological societies. Many of these learned societies are essentially local in nature, and the contribution that they make to both academic and scientific knowledge and the general standard of culture throughout the country depends entirely upon local activities.
    I speak as a Londoner, and, therefore, I do not suffer; I have the benefit of the learned societies which centre on the Metropolis. But people in Northumberland are interested in Northumbrian archælogy and geology. They have their local societies, local librarians and local school masters and university dons who subscribe to these societies. It is notorious that in these days learned

    1037
    societies are suffering considerably. They have suffered considerably in recent years because of the activities of the Revenue. They used to derive part of their benefit from covenants, but that has now been stopped by a decision in the Court of Appeal, with which the Financial Secretary is no doubt familiar. They have also suffered because some of their premises are rated. Formerly, they used to get the benefit of exclusion from rating, but the law in that respect has now been changed.
    The number of people who effectively contribute to these societies in order to maintain their activities, which are of great national advantage, is limited owing to the depletion in people's incomes. However, the cost of running these societies is continually increasing, largely because of the steadily rising cost of printing and publications.
    It will not be a very good thing for the culture of the country and for our national scholarship, for which we have been rightly famous in the past and which has depended largely upon amateur, voluntary efforts and upon the contributions of a number of people especially interested in these matters, if they are to be denied the benefit of this concession for purely administrative reasons, especially when the hon. and learned Gentleman agrees that in logic and on merit they should have it.
    I am not happy about these administrative reasons. It cannot be all that difficult to examine the nature and affairs of a particular society to see whether it justifies inclusion. Even if there is some delay, it is better that societies should be included than excluded. I do not concede that it is necessary that the whole of the Commissioners of Inland Revenue should adjudicate upon each society. Surely, this is a matter which could be delegated. I therefore hope that if the Financial Secretary is not prepared to make this concession tonight, he will give us an assurance that he will draw to the attention of his right hon. Friend the representations which have been made from both sides of the Committee about this matter.
    Mr. I. J. Pitman: This is a much more important issue than we at first thought. I believe that the Royal College of Physicians and Surgeons has
    1038
    either "Edinburgh" or "London" in brackets after its name, in which case it is debatable whether that is an Edinburgh or a London society. That would apply to a great many professional bodies.
    I should like my hon. and learned Friend the Financial Secretary to consider whether he ought not to accept the Amendment and introduce his qualification in paragraphs (a), (b) or (c). In other words, the issue is not a question of whether it is local persons or whether they are calling themselves or are, in fact, local persons, but whether the advancement or spreading of knowledge is on a wide and not merely national, but international, level, for many of these societies support the interests of their members throughout the Commonwealth, certainly in Ireland and elsewhere.
    It seems to me that the correct way out of this difficulty is not to try to discuss whether the society itself is local or purports to be local, but whether its activities, its advancement of knowledge and its maintenance and improvement of standards is directed to the wider field or only locally.
    Sir Herbert Butcher: I do not want to delay the Committee, except to say that my hon. and learned Friend the Financial Secretary underestimated the capacities of his own Department in terms of administration. This is the Department of the Inland Revenue which even in wartime could switch over to P.A.Y.E. as an entirely new system, which as soon as the war ended was able on a national scale to produce post-war credit certificates, which in 1952 was to call upon every director and salaried person earning more than £2,000 a year to fill in form P.11D and to examine them without difficulty, and the Department which has managed to lead itself quite easily through all the intricacies of Purchase Tax. To say that there is any administrative difficulty when there are in each area a local inspector and local commissioners of taxes is asking this Committee to believe rather more than it is inclined to do at this time of night.
    Mr. Mitchison: I should like the Financial Secretary to reconsider this matter. Perhaps he was about to say that he would do so. Let me tell him shortly why I think he should. First of all, the hon. and learned Gentleman

    1039
    says, quite rightly, that he hesitates to express an opinion as to how these words will work.
    Mr. Simon: No, that is not what I said. I said that I would not express an opinion on whether any individual society ranked for relief or not, but I ventured to say that in my opinion, and I have since had this confirmed by the Inland Revenue officials, a national society in the sense of an English, Scottish, Welsh or Irish society or a Channel Island society would not be a local society. It would be considered to rank for relief. It was in relation to individual societies that I did not want to be drawn.
    Mr. Mitchison: I am much obliged, but I am afraid that that is not the end of the story. There is the difficulty which the hon. Member for Hendon, South (Sir H. Lucas-Tooth) pointed out in his question. What about the difference between a national society, which has branches, and a number of local societies doing in effect exactly the same thing? Surely, there ought not to be a Revenue distinction between those two bodies, and it ought not to depend on the way subscriptions are collected.
    We are dealing here with Schedule E cases and cases where the membership of a society has to be relevant to the employment. There is a limiting clause to that effect. Let us take the Law Society. What about people in local government on the legal side who are expected to join the local law society for some purpose or another? It really cannot be right to leave them out; and I am sure that there are parallel cases in other professions, cases which will depend upon the extent to which the research and knowledge side of the profession happens to be organised nationally or locally.
    The Financial Secretary conceded very properly that the logic is all one way, in favour of leaving the words out, but he suggested that the real reason for leaving them in was the administrative difficulty of leaving them out. I suggest that the administrative difficulties of leaving them in are quite considerable and that he may find himself involved in a number of very difficult distinctions and troublesome cases, for if one chooses to found oneself on a complete absence of logic a penalty is attached to that.
    1040
    One thing which the hon. and learned Gentleman might consider is making his own meaning a little clearer in this matter. The words "mainly local character" are not clear to me when one considers particular cases. The hon. and learned Gentleman must remember that he is dealing with people who really ought to be enabled to find out the meaning quite easily. Will he undertake to reconsider the point and see whether some suitable form of words could be devised to make the intention quite clear? It would be even better if he could undertake, in all the circumstances, to abide by logic for once and go the right way. If he cannot go as far, perhaps he will undertake to reconsider the matter before Report, and, if he sticks to his decision, do some elucidation.
    10.30 p.m.
    Mr. Simon: I do not want to weary the Committee with another speech at any length, but, in view of the cogent and friendly way in which the representations have been made, it would be less than courteous if I did not reply to one or two points. Perhaps it puts it wrongly to put it as the hon. Member for Islington, East (Mr. E. Fletcher) put it, that the only reason is administrative. In all these matters, one has got to balance the relief to the taxpayer against the cost to the taxpayer. One has to consider the individual taxpayer who may like to get relief in respect of a subscription to a society, and, on the other hand, the cost to the general body of taxpayers if we have to recruit a tremendous accretion to the Inland Revenue staff.
    The hon. Member for Islington, East drew attention to the importance of the scientific and learned societies generally. I think he is wrong in saying that they suffer under this Clause. They do not. Equally, with great respect, the hon. Member for Loughborough (Mr. Cronin) put it too strongly when he said that this will strangle useful local bodies. This does nothing of the kind. They are no worse off under this Clause. The only point is that they are no better off. The subscriptions will be paid as in the past. The persons with whom we are concerned are not the local bodies themselves but the taxpayer who may be able to deduct for Schedule E purposes his subscription.
    The hon. and learned Member for Kettering (Mr. Mitchison) spoke of the administrative difficulties of leaving out

    1041
    the local societies. I am assured—and I have no doubt at all—that the administrative difficulties of bringing them in are very much greater. However, in view of what has been said, I cannot make any commitment; I cannot say that I will reconsider this matter before the Report stage. It is not for me to do so. But in view of the representations that have been made, and without entering upon any sort of commitment or raising any hopes, I will bring to the attention of my right hon. Friend what has been said.
    Mr. E. Fletcher: In view of the hon. and learned Gentleman's assurance, modified and limited though it is, and in the hope that some further thought will be given to this matter by the Chancellor and that it will be reconsidered between now and Report, I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Motion made and Question proposed, That the Clause stand part of the Bill.
    Sir H. Lucas-Tooth: The question I want to ask my hon. and learned Friend is really the converse of that which we have just been debating. There are some societies which are very small, but there are also some societies which are large and of an international character. I apprehend that when there is an international society based in this country, it is perfectly within the terms of this Clause.
    There are, however, some international societies that have their headquarters overseas. So far as I can understand this Clause, such societies are within its purview, and it would be open to the Commissioners of Inland Revenue to allow subscriptions to them to be treated as proper deductions. But I should like to know from my hon. and learned Friend whether that is the intention of the Government. There are cases of societies which are completely foreign bodies, and I do not think that they would be excluded. But I would not press my hon. and learned Friend in such cases.
    I am asking about those cases of an international character to which a fairly considerable number of people in this country subscribe. I think that there may be some deficiency in the machinery of the Clause to deal with such cases. The application would have to be made by the body itself as the Clause now stands. It might be a little inappropriate
    1042
    for a body based overseas to make such an application, and in that case it seems desirable that a member of the body in this country should be allowed to make the application. I do not know whether that would call for any Amendment. I should be grateful if my hon. and learned Friend would clear up the point.
    Mr. Albu: As one who during the Committee stage of the last two Finance Bills had the pleasure of moving an Amendment along the lines of subsection (1, b) of this Clause, I give it a hearty welcome. I must say that the debate which we have just had went rather wider than the intentions of those of us who in past years have moved an Amendment to the Finance Bill in this way.
    The main intention of those of us who have done so in the past—it has been done primarily by those connected with the Parliamentary and Scientific Cornmittee—was to help those, very often civil servants and others in public positions, who found that in order to obtain a job they had to have certain qualifications. They found, for instance, that they had to have corporate membership of one of the professional engineering societies and that when they had obtained the job the Treasury was unwilling to state that their membership was necessarily part of their duties.
    This matter, of course, has been dealt with by subsection (1, b) and the Chancellor is taking the opportunity also to introduce, as I understand, a completely different relief for those who have statutorily or by virtue of their profession to be on a register. This seems to be quite a different point. I am slightly surprised about that, because I should have thought that the condition laid down in subsection (4, a) that the fee payable in respect of registration is a condition of the performance of the duties or office would entitle the taxpayer to relief.
    I suppose that there have been cases in which that is not so. A slight doubt has arisen in the minds of the members of some of these societies. One of them arises out of the drafting of subsection (4). I notice that the Liberal Party has put down an Amendment to clarify the point by introducing the word "or" between paragraph (a) and paragraph (b).
    I should like to ask the Financial Secretary whether that is necessary. It does not seem that it is. I understand that paragraph (a) refers to the fee or

    1043
    contribution payable in the case of registration whereas paragraph (b) refers to a subscription to a body whose purposes are different and is not a body without membership of which one cannot practise one's profession. I shall be glad if the hon. and learned Gentleman will make that clear, that is to say, that both conditions do not have to be fulfilled.
    The only other thing I wish to say is that there is a number of societies and that there will be a good deal of anxiety among them as to which are and which are not included by the Commissioners of Inland Revenue as suitable bodies under subsection (2). I hope that the hon. and learned Gentleman will indicate that, although it is important that the relief is not too widely given, it is at least generously given and is not going to be very narrowly interpreted. Having said that, I think that on the whole the taxpayers who are most concerned with these matters welcome the Clause.
    Mr. Richard Fort: I join other hon. Gentlemen who have welcomed the Clause, the intention behind which has been moved in previous years, as the hon. Member for Edmonton (Mr. Albu) said, by those connected with the Parliamentary and Scientific Committee, particularly the chairmen, one of whom I see in the Chamber.
    In welcoming the Clause, I want to underline from this side of the Committee what the hon. Member for Edmonton said about some of the obscurities which worry those learned societies belonging to the Parliamentary and Scientific Committee, particularly in subsection (4). Perhaps the Financial Secretary will give an undertaking to look into the possibility of making paragraphs (a) and (b) clearer, just as he did on an earlier paragraph about which there was some controversy.
    Sir Hugh Linstead: As long ago as 1949 I took a deputation of scientific societies to the then Financial Secretary to try to persuade the Treasury to insert in a Finance Bill a Clause similar to this one, and from that point of view I welcome the Clause.
    I had not intended to do more than thank my right hon. Friend and my hon. and learned Friend tonight for having gone so far to meet the representations which for nearly ten years have been put
    1044
    to the Treasury, but the more I have considered the Clause the more I have become concerned whether it will achieve as much as those who have been advocating this for so long have hoped and as much as my hon. and learned Friend has suggested it will achieve.
    When my hon. and learned Friend talks about the cost to the Treasury being about £1 million in a full year and about 3,000 societies being involved, it is obvious that it is the intention of my right hon. Friend to make a really generous gesture. Yet when I consider what is being done now and relate it to the Clause, I wonder whether any very great advance is being made. I am particularly concerned about the provisions of subsection (4, a).
    I want very briefly to remind the Committee of the background. We know the comparison between Schedule D and Schedule E. Under Schedule D a man carrying on his own trade, profession or vocation is entitled to offset against his income expenses which are wholly and exclusively for the purposes of his trade, profession or vocation. He decides what claim he will make in relation to subscriptions, books, periodicals, instruments and even the tools of his trade, and he argues it out with the inspector. If he can persuade the inspector that it is for the purposes of his trade he is entitled to the relief.
    Under Schedule E, however, the employed professional man, who may have the same qualifications as the man in business on his own account, has to contend with a phrase to the effect that the expense was wholly, exclusively and necessarily expended in the performance of the duties of an office or an employment.
    10.45 p.m.
    In the case of an employed person, the word "necessarily" had been interpreted by the Inland Revenue as meaning "required by his employer", so that in the past he has had two fences to surmount. He has first had to satisfy the inspector of taxes that the claim he is making is in respect of something wholly and exclusively for the performance of his duties—not necessarily for the purposes of his profession—and also that it is necessarily so expended, that is to say, that his employer required him to do so. When the Royal Commission considered

    1045
    the difference between the Schedule D and the Schedule E wording, it proposed that:
    "… all expenses reasonably incurred for the appropriate performance of the duties of the office or employment"
    should be allowed. In other words, it amalgamated the two phrases. My right hon. Friend has not found it possible to do that, but he has spent a great deal of time in the past year in considering the matter, and this Clause is the outcome.
    As I see it, however, the Clause is liable to do very little more than is already being done at present in practice. The statutory fees in the Fifth Schedule are now probably allowable to any person who makes a claim for them. As for the:
    "annual subscription paid to a body of persons approved for the purposes of this section …"—
    as stated in subsection (1, b)—I suspect that wherever a person is able to satisfy an inspector that membership of a particular society is required by his employer as a condition of employment, he is certainly allowed that.
    Therefore, subsection (1, b) read in conjunction with subsection (4, a) seems simply to reproduce the existing practice. In other words, we are once again throwing the professional man into the arms of his employer and requiring him to satisfy the inspector of taxes that his employer is laying down membership of a particular society as a condition of employment.
    I hope that my hon. and learned Friend will be able to tell me that I am wrong in this, but if I am not and membership in the case of every one of these 3,000 societies must be incorporated as a condition of employment in individual cases, we are going back to an extremely strict interpretation, which leaves the employee entirely at the mercy of his employer. Some employers are very good and say, "Membership of such-and-such a society will be of use to you as a professional man, and therefore may be of some use to me. Therefore, I shall put it in your contract as a condition of employment that you join that society." Others are more difficult. The nationalised industries and some Government Departments are very chary of putting in such a condition of employment.
    1046
    If I am right in my conjecture, I am afraid that the Clause will not fulfil its purpose. I very much hope that some further thought may be given to the matter, particularly in respect of subsection (4, a), and that the requirement which makes it necessary for membership to be a condition of employment can be reconsidered. It will be very cramping, and will make the employer the decisive factor in the question, and not the man himself and his desire to improve his own professional and technical qualifications. If further consideration can be given to the matter, nothing but good can come of it.
    Mr. Houghton: The temptations to widen this debate into the whole field of Schedule E expenses are very strong, but I think the Committee will be well advised to stick to the Clause. It is true that the Royal Commission did discuss in paragraph 137 of its Report some of the disabilities of professional men in employment. They are not able to claim tax relief on the cost of professional subscriptions. The Commission mentioned magazines and papers and even travel as one of the essentials of many professional men. But unless these expenses were incurred as a condition of holding an office or employment, they are not admissible for Income Tax relief under Rule 9 of Schedule E. I think that was decided in the case of Tate v. Simpson in 1925, which reinforces the strictness of that rule.
    If I remember rightly, the Royal Commission made no separate recommendation regarding the expenses of these professional men. In paragraph 140 it suggested a new definition of admissible expenses under Schedule E which the hon. Gentleman has just quoted. But the debate so far suggests some of the dangers that lie ahead if any attempt is made to relax the strictness of the rule under Schedule E. We know that the strict rule under Schedule E and the comparative laxity of the rule under Schedule D constitute some unfairness in the treatment of one taxpayer and another engaged in similar professions and employed in different circumstances; one on his own and the other working for an employer.
    I confess that I was anxious when the hon. and learned Gentleman said that there were some 3,000 societies to look at and the cost might be as much as

    1047
    £1 million in a full year. I cannot be sure on what evidence those estimates are based, but I am sure there must be some fairly good grounds for them. My hon. Friend the Member for Edmonton (Mr. Albu) has persistently raised the question in debates on the Finance Bill, supported largely by professional men in public employment. Many of them had to be members of a professional or learned society as a condition of appointment, but were not required to continue their membership after their appointment. Many of them chose to do so for reasons which will be obvious to the Committee. They get no relief for tax purposes for having done so, unless the employing Department or local authority states that it is a condition of holding their office that they continue their membership.
    I am a little surprised at the possible range of societies which may now have to come within the review. There seems to be a process which may have to be gone through, though, of course, fundamentally the onus lies on the taxpayer who is a claimant. He is the person who has to claim relief on the subscriptions he pays, and in the last resort it is he who must prove his case to the satisfaction of the Inland Revenue. The society itself will be interested obviously in settling its accounts for the Inland Revenue in order to save a number of people who may be claiming tax relief on their subscriptions from pursuing their claims separately and independently.
    Even when the society has been established as one admissible under the Clause, it will still rest with the taxpayer to satisfy the conditions under subsection (4). As I am no lawyer, I can only read this in a commonsense way, and my interpretation is the same as that of my hon. Friend the Member for Edmonton—that paragraph (a) is one thing and paragraph (b) another; that they do not go together and are quite distinct things.
    The trouble will not come in paragraph (a) but in paragraph (b), where there are words that will make an absolute picnic for the lawyers one fine day—
    "… are relevant to the office or employment, that is to say, the performance of the duties of the office or employment is directly affected by the knowledge concerned or involves the exercise of the profession concerned."
    There it is. One can begin to put interpretations upon that, but it does
    1048
    narrow the claim of a taxpayer to have his subscription admitted.
    The man who merely goes round with a butterfly net and is a member of some society that looks after people who go round with butterfly nets will have no claim unless the performance of the duties of his office or employment is directly affected by the knowledge that he will gain by going round with a butterfly net and by being a member of a society that deals with people who go round with butterfly nets. It will have to have something to do with the man's job.
    It might help all round—administratively as well—if the Inland Revenue could compile some notes for the guidance of societies, and of claimants, that might assist them in deciding whether to ask to be considered. I realise that, with a provision in the Clause for the right of appeal, the Revenue will be naturally cautious not to put out anything that might be construed to lay down the law, but surely something can be said that will assist people to know how the Commissioners of Inland Revenue will view applications, enlarged somewhat by giving examples, if they can, of the kind of thing they have in mind. That might save a good deal of work—and I am the last person to minimise the additional work which this might create in the Inland Revenue.
    I do not know whether the Financial Secretary has seen the Accountant for 10th May, but in commenting on the Finance Bill, in rather caustic terms, this observation was made:
    "Outside the quasi-statutory subscriptions described in the Fifth Schedule, it is going to be quite a feat la obtain any allowance."
    That seems to be at variance with the estimate of the Financial Secretary, and with the hopes and expectations so far reflected in some of the speeches. Therefore, I think that any assistance that the hon. and learned Gentleman can give to intending applicants under the Clause as a denial of the rather severe criticism that I have just quoted—or the implications of what I have just quoted—might be helpful. Perhaps it would be just as well if he also were to say that, for the time being, no further applicants need apply for relaxation of Rule 9 under Schedule E. I can only assume that the Chancellor has decided, quite deliberately, that he will go thus far, but, for the moment, no farther.
    Mr. Simon: I am very grateful for the way in which this Clause has been received. It has obviously been welcomed by hon. Members who have been pressing for some concession in this field; although I was disappointed that my hon. Friend the Member for Putney (Sir H. Linstead), having originally welcomed it, should then have expressed apprehension that it would not effect any improvement in the final position. I hope to reassure him in the course of my remarks.
    My hon. Friend the Member for Hendon, South (Sir H. Lucas-Tooth) asked three questions. The first related to societies of an international character, large societies which might have their headquarters abroad but which operated in a number of different countries. So far as I can see, and I am so advised, there is no reason at all that they should not rank for relief. They can certainly come prima facie within the phrase
    "a body of persons not of a mainly local character"
    provided that they satisfy the remaining stipulations in the Clause. He mentioned also completely foreign bodies. Again, I see no reason that they should not rank equally for relief. He did say, however, that there might be difficulty in the case of such bodies in the way of applications from the bodies themselves, and he suggested that, in their case, the member concerned should be able to make the application. I do not doubt that the initial investigation by the Inland Revenue could be made at the instance of the member. After all, he has the same right as any other taxpayer to approach the Inland Revenue; but in the end, the application must come from the society, because only the society can give the requisite information to satisfy the Inland Revenue that the requirements of the Clause are being complied with. I think that the hon. Member for Sowerby (Mr. Houghton) referred to this point also.
    11.0 p.m.
    The hon. Member for Edmonton (Mr. Albu), who was very closely concerned in the discussions and debate which led to the formulation of the Clause, asked, first of all, a question about the scope of subsection 4 (a), as also did my hon. Friend the Member for Clitheroe (Mr. Fort). The point was spelt out very clearly by my hon. Friend the Member
    1050
    for Putney. I think I ought to deal with it right away. My hon. Friend the Member for Putney went as far as to say that it was liable to do little more than is done at the moment by administrative action, that it reproduces the existing practice and leaves the employed man entirely at the mercy of his employer.
    As I read the Clause, and as I am advised, that is not correct. It is true that, in the past, it has been the practice to allow a subscription to a professional society where the employer has made continued membership a condition of holding the appointment. But that is not a condition under this Clause. Subsection 4 (a) does not make it a condition that the employer should stipulate for membership. It is sufficient that the registration must be a condition of the performance of the duties. The views of the employer are no longer material, no longer necessary and no longer relevant.
    The next point made by the hon. Member for Edmonton was an echo of an Amendment which has not been called, but which arises perfectly properly on the Motion, "That the Clause stand part of the Bill", namely, whether there should be the word "or" between paragraphs (a) and (b). The hon. Gentleman is quite correct in saying that they deal with quite different matters. Paragraph (a) deals with the registration fee, and (b) deals with subscriptions to the body. I do not think that it would matter if one did put in the word "or". On the other hand, with great respect to the representative of the Liberal Party, the hon. and learned Member for Cardigan (Mr. Bowen), who is here this evening, I think that it would not really add anything to the Clause.
    Finally, the hon. Member for Edmonton and my hon. Friend the Member for Putney asked whether this would be narrowly interpreted by the Inland Revenue. The hon. Member for Sowerby quoted the rather caustic phrases used in the Accountant. I think that it must be quite clear from the figures I gave of the number of societies whose applications the Inland Revenue expects to have to consider—not all of which, of course, will qualify—and particularly of the estimated cost of the concession, that the Clause will not be restrictively construed by the Inland Revenue. It will be construed in a commonsense way in the

    1051
    spirit in which it is drawn, in other words, with a desire to assist professional men who can bring themselves fairly within its terms.
    The only other points arose in the speech of the hon. Member for Sowerby. I do not feel the same difficulty as the hon. Member about the wording of subsection (4, b). If the Inland Revenue chose to construe the Clause restrictively, I do not doubt that there could be a spate of litigation. I do not think, however, that the words are difficult of construction. Certainly, the meaning is quite plain. The passage which states
    "… the performance of the duties of the office or employment is directly affected by the knowledge concerned or involves the exercise of the profession concerned"
    is simple English and none the worse for that in an Act of Parliament. I think that the Committee understands what it means, I do not doubt that the Inland Revenue, or the Commissioners, if necessary, will understand what it means and I hope that it will not be necessary in many cases to have recourse to the courts for its interpretation, although, of course, there is the right of a taxpayer to invoke the law if he is dissatisfied with the ruling of the Inland Revenue.
    Finally, the hon. Member suggested that the Inland Revenue might compile notes. I will certainly consider that in the course of the next few days and before the Bill passes into law. I do not, however, think that it would be appropriate in the case of this Clause, because there are many different types of society. The simple thing is that it should be known that any society can write to the Inland Revenue stating its activities and its objects and the Inland Revenue will give a ruling in each case. I cannot help thinking that that would be more useful than the compiling of notes where one has to deal with such diversified activities.
    Having said that and having, I hope reassured my hon. Friend so that he can join with the other Members of the Committee in unfeignedly welcoming the Clause, I commend it to the Committee.
    Question put and agreed to.
    Clause ordered to stand part of the Bill.
    Fifth Schedule agreed to.

    Clause 15.—(AMENDMENT AS TO RELIEFS IN RESPECT OF PROPERTY BELONGING TO CHARITIES AND CERTAIN OTHER INSTITUTIONS OR OCCUPIED BY MINISTERS OF RELIGION.)
    Motion made, and Question proposed, That the Clause stand part of the Bill.
    Sir F. Soskice: The Clause, I understand, is designed to give effect to recommendations contained in paragraph 920 onwards of the Royal Commission's Report. My right hon. and hon. Friends on this side of the Committee would think that that was a laudable objective and I have no more to say about it than that. There is, however, one slight drafting point that I would put before the Financial Secretary for his consideration.
    Subsection (1) says that certain allowances to charities shall not be affected by reason of the occupancy by an officer of premises in respect of which the allowance is granted, never mind what his income is. The original Section of the Income Tax Act, 1952, which it purports to amend says that the allowance shall not be affected if the officer's income is not in excess of £150. If it is said that it does not matter what his income is to be, the result might be that the charity gets no allowance, simply because an officer is occupying the premises, never mind what his income is. Obviously, that is not the intention of the Government. Perhaps the Financial Secretary will be so kind as to say that he will look at this purely as a matter of drafting.
    On the second subsection I simply want to put a question. It purports to repeal Section 479 (3) of the Income Tax Act, 1952. The Royal Commission said it could not understand what that repealed subsection meant. I certainly cannot understand it, and I have never met anybody who could understand it. Why a minister of religion should be empowered to ask that certain income on which he is not taxable should be treated as though it were his income in order that he can get tax relief on part of it, passes my comprehension. That is apparently what the subsection does. That is what the Royal Commission thought it did, and it is the opinion of those who have considered it that that is the intention.
    I gather that the Inland Revenue has taken the bull by the horns and has

    1053
    interpreted it by giving the allowance to the body to which the dwelling occupied by the minister belongs. I can see the wisdom of repealing something which one does not understand, subject to the caution that one might be repealing something of inestimable but unperceived value. I trust that this has not been done by the Government's endeavours. If the Financial Secretary has been able to plumb the extraordinary depths of this subsection, which nobody else has been able to do, I am sure that the Committee will be grateful for the result of his researches.
    The Solicitor-General (Sir Harry Hylton-Foster): We will, of course, look into the drafting point mentioned by the right hon. and learned Member for Newport (Sir F. Soskice). I believe the Clause to be quite all right but, as a matter of courtesy and in the interest of getting it right, we will look at it and put anything right which turns out to be wrong. I hope that there is nothing.
    I have some diffidence in trying to explain what has happened to Section 479 (3) of the 1952 Act. It has the great legislative advantage at the moment of being utterly valueless and obscure of meaning, and therefore it seems desirable to repeal it. In a moment, without detaining the Committee, I can explain how we believe it came about. Time was, before 1919, when the minister or the caretaker of the charity, or whatever it might be, who had rent-free use of the house was regarded invariably as the statutory occupier for the purpose of Schedule A tax. He was in worse plight than most Schedule A payers because, as there was no rent, he could not deduct the tax from his rent. His plight being miserable in this country, was rendered even more miserable by activities across the Border, because of the decision of a Scottish court that he could not treat the annual value of the house as part of his income. Therefore, he could not have it taxed on the basis of earned income at relieved rates.
    Accordingly this subsection, originally a provision in the Finance Act, 1919, provided that if a minister occupied a house rent-free, by virtue of his office and the annual value of the house did not fall to be regarded as part of his income, he could claim that the annual value
    1054
    should be treated as earned income of his and so he had a reduced rate appropriate to that. The Scottish decision was later found to be wrong. Another court said that it did not matter whether or no he was entitled to let the house, so that the jolly position now arrived at by 11.15 tonight is that if he is a beneficial occupier he must have the annual value treated as part of income under existing law. Therefore, in any event, he is outside the subsection about which the right hon. and learned Gentleman the Member for Newport expressed his anxiety.
    If, on the other hand, he is a representative occupier it is absurd to give him any concession on Schedule A tax, because he does not have to pay it. It falls on the charity. The Inland Revenue, with its customary generosity in every conceivable circumstance, by extra-statutory concession under Governments of every political complexion, has granted to the trustees of the charity a concession which enables them to deal with it as if it were earned income of the charity. But it really does not matter—the enactment we seek to remove from the Statute Book is absurd, meaningless and valueless, except for our enjoyment at this hour.
    Question put and agreed to.
    Clause ordered to stand part of the Bill.
    Mr. Amory: I beg to move, That the Chairman do report Progress and ask leave to sit again.
    With co-operation from all parts of the Committee, reasonable progress has been made with our work today. Therefore, I would move that we do now report Progress.
    Question put and agreed to.
    Committee report Progress; to sit again Tomorrow.

  PRIVILEGES
  Ordered,
  That the Report which, upon 30th October, 1957, in the last Session of Parliament, was made from the Committee of Privileges, together with the Report of the Judicial Committee of the Privy Council, a copy of which was presented to this House on 7th May, be referred to the Committee of Privileges.—[Mr. R. A. Butler.]

  CHARING CROSS HOSPITAL (PROPOSED REBUILDING)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Hughes-Young.]
  11.17 p.m.
  Mr. Michael Stewart: The Minister of Health is at present considering a proposal to rebuild Charing Cross Hospital and Medical School on the site of what is now Fulham Hospital. The citizens of Fulham first learned of this proposal from the columns of the Press last summer, and were greatly concerned about it, because for more than two years previously the people of Fulham, acting through a committee under the chairmanship of the mayor of the borough, and representing all shades of opinion, in many walks of life, had been agitating for the rebuilding of Fulham Hospital itself. That is to say, they wanted to have their own local hospital, as they have now, but rebuilt.
  That rebuilding was, indeed, in process, though we could have hoped it would have been carried on a bit faster. Our hopes had been raised, particularly by the interest taken in the matter by the right hon. Gentleman the Member for Runcorn (Mr. Vosper), shortly before—to everyone's regret—illness obliged him to resign the office of Minister of Health. At that stage, the people of Fulham learned that it was being considered that they should not have their own hospital rebuilt, but instead should have a teaching hospital put in its place.
  I readily concede that the right hon. and learned Gentleman, the present Minister of Health, has been willing to consider the views of Fulham people, as expressed by the mayor's committee, and has given up a good deal of his time to receive a deputation and listen to our views. I believe he still has the matter before him and under consideration, and I thought it right, in view of the strength of feeling in the borough, to take this opportunity, before he reaches any final decision, of emphasising why the people of Fulham—and others—believe that this proposal is not desirable and should not be proceeded with, and that it is not in their interests, or in the interests of the teaching hospital itself.
  1056
  We are not taking merely a parish pump view of this matter. Our objection is supported by people of weight and authority, not directly connected with our local problem, and it is an objection based as much on the needs of the teaching hospital as on the concern of Fulham people themselves.
  Their objections may be briefly summarised as follows. First, at present there is provision for some 950 beds. If the proposal to rebuild Charing Cross Hospital on the Fulham site is proceeded with there will be, on even the most optimistic estimate, a loss of some 150 beds to the people of Fulham and the neighbourhood. In discussions that have taken place on this matter in the appropriate organs of the British Medical Association the view has been expressed that the loss of beds may well be as high as 300, but on no estimate has it been suggested, nor was it suggested when we met the Minister, that it would be a loss of fewer than about 150 beds.
  Secondly, we have to consider the needs of the chronic sick and of emergency cases. It is known that an ordinary local regional hospital is subject to certain requirements to receive emergency cases, and under the working of what is called the emergency bed service some 700 patients were admitted to Fulham Hospital last year.
  A teaching hospital will not and, indeed, cannot provide a service of that kind. In order that it shall do its own work properly it is not made subject to the same requirements with regard to receiving emergency cases as an ordinary hospital is. It is reasonable to say that if in place of the present Fulham Hospital a teaching hospital were established, it would be unlikely to receive more than, say, 200 emergency cases in the course of a year, whereas, as I have said, last year Fulham Hospital received 700 cases under the emergency bed service.
  The third point is that in Fulham, as indeed in several parts of inner London, the proportion of the population who are elderly is decidedly above the average of the Kingdom as a whole. Endeavours are already being made even with the present building to meet the special need, and in the plans for the rebuilding of Fulham Hospital, which we hoped were going ahead until this proposal came forward, provision was to be made for

  1057
  a proper geriatric unit. We are obliged to ask whether, if a teaching hospital were established on the site, anything like that provision could be made.
  We have pressed this question already in the discussions that have gone on, and although it is admitted that the teaching hospital that was established on the Fulham site could make some provision of that kind, it will not be contended that it could make provision equal in scope to what could be made if the original plan for the rebuilding of Fulham Hospital itself were proceeded with.
  A fourth point bearing on the needs of the people of Fulham is this. A teaching hospital by its nature must have in it and ought to have in it a higher proportion of unusual cases than an average hospital. I am told that not so much stress is laid on that today as was formerly the case in considering what a teaching hospital ought to be like. But even allowing for that, it cannot be disputed that it is in the nature of a teaching hospital that, in order to perform its teaching function, it should provide a wide variety of different types of cases, and in order to do that it must have a somewhat higher proportion of unusual cases than an average hospital has.
  In order to do that it must draw its patients not merely from the surrounding area but from a rather wider area, because the immediately concerned area will not provide it with a sufficient number of the less usual types of case. That means, therefore, that a teaching hospital, if it is doing its teaching job properly, cannot have quite the same proportion of its beds available for people in that neighbourhood as an ordinary hospital has.
  If, therefore, this proposal is proceeded with, first of all there is the loss of total number of beds that I referred to earlier. Then we have to notice that of such beds as there are, a bigger proportion must be set aside for people not from the immediate neighbourhood. Therefore, the people of Fulham will suffer a further loss in the number of beds. The only way of saving the people of Fulham from that would be to prevent the teaching hospital from doing its own job properly.
  That brings me to the other leg of my argument, that we are arguing this matter not only with regard to the needs of the people of Fulham, though the mayor, the
  1058
  citizens and the mayor's committee have quite properly put that as their first concern. I regard it as my duty as a Member of Parliament to mention also the wider question of the needs of the teaching hospital itself. On that point, the striking fact about this whole proposal is that this suggestion that Charing Cross Hospital and Medical School should be rebuilt on the site of the Fulham Hospital has arisen because an earlier suggestion to rebuild Charing Cross Hospital and Medical School on a site in the Harrow area has, as far as many of us think, for no sufficient reason been abandoned.
  I put it to the Parliamentary Secretary that the needs of Charing Cross Hospital and Medical School would be better met by proceeding with the Harrow site proposal, where, indeed, the building of the hospital would be welcomed, than by putting it in Fulham where the building of it must necessarily cause concern to the inhabitants for the reasons I have mentioned.
  Why do I say that the Harrow site would be better? In the first place, it was to have been a site of 47 acres instead of the 9 acres at most that will be available on the Fulham site. Secondly, and surely this is an extremely important point, putting it on the Harrow site would have meant that the Harrow neighbourhood would have had a greater number of hospital beds made available to it. If it went to Harrow both the Charing Cross Hospital and Medical School and the inhabitants of Harrow would be better off. It would be putting a hospital where there was a need for more beds, and more beds would have been provided. Instead, it is proposed to put it in Fulham where the result must be a reduction in the number of beds for the local inhabitants.
  It is suggested that the Harrow site was not suitable because it was not sufficiently easy of access from Central London. Consultations with the Underground railway reveal the fact that it takes just about as long to travel on the Underground from Central London to Fulham as it does to Harrow. That is really not a sufficient reason against the other reasons that I have urged.
  The Minister has pointed out to us that it is his duty under the Act to provide teaching facilities, and I think he took the view that if the Medical School

  1059
  said that the Harrow site would not provide adequate teaching facilities he must accept that view and look elsewhere. The Minister has looked and found Fulham. Surely that is not sufficient. If the Medical School says that the Harrow site is not suitable, it ought to provide very weighty and serious reasons for that refusal.
  I think it is true to say that so far no reasons have been provided which countervail the very serious objections of proceeding with the Fulham proposal. I would draw the Minister's attention to a phrase in the letter sent to the town clerk of Fulham from his Ministry on 12th September last year. It states:
  "The needs of the Fulham area for hospital facilities will be given no less weight than the requirement of the Medical School for teaching facilities."
  But proceeding with this proposal means apparently that the requirements of the Fulham area are to be given less weight than what is apparently a very unsubstantial argument advanced against proceeding with the plan for the Harrow site.
  I mentioned that Fulham citizens feel very strongly on this matter, and if Ministers have any doubt about that, consultation in the area will reveal it to them very clearly. Many general practitioners in Fulham were asked their opinion about the project, and 75 per cent. of them were opposed to it. I have reports of discussions in the British Medical Association where also the most marked hostility is expressed to the proposal, partly because of the decline in beds in the inner London area that it will mean and partly because of the reduced facilities for emergency cases. It is also true that the Fulham and Kensington Hospital Management Committee has expressed its strong opposition to the proposal.
  Consequently, I ask the Parliamentary Secretary to say on behalf of his right hon. Friend that he has completed his examination of the matter and that the proposal to rebuild on the Fulham site is not to be proceeded with. If he cannot say that, I hope that he will say that before reaching any decision he will agree to the holding of a public inquiry in Fulham. I have a leaflet issued by his Ministry about the closure or change of use of hospitals in which it is stressed
  1060
  that when anything of that kind is done it is important to give opportunity for interested persons to express their views. If the right hon. Gentleman is still thinking of the proposal at all, will he please hold a public inquiry in Fulham before proceeding with it? I trust that he will decide to abandon it and, instead, do what the former Minister of Health was apparently inclined towards doing, and that is proceed as rapidly as possible with rebuilding Fulham Hospital itself to provide a real service for the people of Fulham.
  11.32 p.m.
  The Parliamentary Secretary to the Ministry of Health (Mr. Richard Thompson): I am obliged to the hon. Member for Fulham (Mr. M. Stewart) for the manner in which he has raised the question, which is indeed one of public importance, transcending, as he said, the needs of Fulham, although obviously those are very much in his mind.
  The proposal—at present it is no more than a proposal—to rebuild Charing Cross Hospital at Fulham raises two very important considerations which I would hope we could reconcile when the final arrangements come to be made. First, there is the best way of organising medical education in the University of London, and, secondly—and from the hon. Member's point of view very important indeed—the provision of an adequate hospital service in Fulham in discharge of the Minister's statutory responsibility.
  If I may take the University of London's problem first, ideally all medical schools in London should be in central London as close as possible to the university precincts. It is desirable that medical schools should be located as close as possible to the other places where the basic sciences are taught and that clinical teachers should not be separated from other science teachers. I make that point because I do not want the hon. Member to think that the geographical question was the whole point involved here. The physical distance was a point but it was not the whole of it. Also, it is important that medical students should be able to mix readily with other students at the time when they are taking their training.
  Nevertheless, in spite of those considerations the Goodenough Committee in 1944 recognised that ideals are not always attainable and recommended that the

  1061
  Charing Cross Hospital should move to Middlesex as part of the necessary decentralisation of hospital services in London. As the hon. Member said, originally the University and the University Grants Committee accepted the move to Middlesex and acquired land at Northwick Park. Subsequently they reconsidered the position, and they now take the view that a solution must be found not involving so distant a separation from other university life and centres where basic sciences are taught. There is also the point that the University statutes contemplate that all its institutions shall be within the administrative County of London, and, hence, the removal to Middlesex, if not strictly illegal, would be contrary to the spirit of those statutes.
  If we look at the Minister's problem, namely, the planning of the hospital services, it is clear that the shift of population of Greater London requires some decentralisation of hospitals to serve it. This involves the development of services in outer London and the reduction of the former concentration in the centre. Hence it was that successive Ministers accepted the Northwick Park scheme, and the Charing Cross rebuilding was selected in 1955 as a major project for early progress. But because of the strong views of the University of London and the University Grants Committee that the Northwick Park scheme should be reconsidered in the best interests of medical education, my right hon. and learned Friend felt bound to seek an alternative solution.
  Many possibilities were reviewed, and last summer the site of the present Fulham Hospital seemed to provide a reasonable possibility. The hon. Member mentioned that he felt that people in Fulham had not been consulted at a sufficiently early stage, but the original discussions had to be with the hospital authorities concerned, because if they had turned the scheme down, further and wider discussion would have been quite fruitless.
  There is a most urgent local need—which I acknowledge at once—for improved hospital facilities, and the demolition and rebuilding of the existing Fulham Hospital, which was badly damaged during the war, had already been agreed upon. From the medical education angle the site of the Fulham Hospital is closer to the University than
  1062
  Northwick Park, and within easy reach of the science departments of the University. It is also within the administrative boundaries of the County of London, thus conforming to the statutes. On that basis the proposal was put before the hospital authorities for consideration last August, and indeed, as the hon. Member said, a letter was sent to the mayor's committee in September agreeing that further consultations would follow.
  The new scheme involves the rebuilding of Charing Cross Hospital and Medical School on the site of the Fulham Hospital, Secondly, the rebuilt Charing Cross Hospital would eventually replace the existing Fulham Hospital and also Fulham Maternity Hospital and the West London Hospital. Thirdly, the early regrouping of hospitals would take place, so that the Board of Governors of the regrouped Charing Cross Hospital could start work in Fulham.
  Discussions have taken place with the hospital authorities, all parties agreeing in principle to the proposal. The agreement of the South West Metropolitan Regional Hospital Board is subject to two important considerations; first, that the new hospital should provide district hospital services comparable with those proposed under the Board's earlier plans for redevelopment of the Fulham Hospital—and it made a very strong point that the local provision should not be any worse than it would have been if the original Fulham proposal had gone through—and, secondly, that the position of the existing staff should be safeguarded.
  The Board of Governors of Charing Cross Hospital has given the following assurances in reply: in consultation with the South West Metropolitan Regional Hospital Board a service fully adequate to the needs of the Fulham area would be provided—and by "fully" I have no doubt that it had in mind a quite precise definition. Secondly, the Board has given the assurance that it would accept the transfer of all the staff involved.
  It may be asked whether a hospital can combine the function of a teaching hospital with the provision of a district service, or whether the teaching requirements might unduly restrict the admission of normal cases from the locality, including the chronic sick and emergency

  1063
  cases. It is a fact, as the hon. Gentleman acknowledged, that teaching hospitals now treat most patients from the local community, thus providing a district medical service. The modern tendency is to provide a greater variety of patients for teaching purposes to familiarise students with normal types of cases as well as the more complicated which were formerly sent to teaching hospitals. There is no reason to think that a teaching hospital cannot provide a district service in addition to fulfilling its teaching function.
  Anxiety was expressed over the situation regarding the emergency bed service which I do not think is justified. A teaching hospital accepts patients from the emergency bed service although its strict liability to do so does not go quite so far as in the case of the non-teaching hospital. But in an emergency I am quite certain that we could rely on the hospital to help in every way possible. I wish to emphasise that the Charing Cross Board of Governors has already given the Minister an assurance that, in consultation with the regional board, a hospital fully adequate for Fulham's needs would be provided.
  I wish to say a word about the fears regarding the loss of beds, the arithmetic of beds, on which the hon. Gentleman spent a little time. It is proposed that the new Charing Cross Hospital should replace Fulham Hospital with 382 beds, Fulham Maternity Hospital, with 28 beds, and the West London Hospital with 238 beds, giving a total of 648 beds which ultimately would be closed. Would the new beds be sufficient for the purpose and provide enough margin for the teaching work? The first point I would make is that the hospitals being replaced will not all be closed at once. Secondly, no decision has been taken on the ultimate size of Fulham were it to be rebuilt as a non-teaching hospital.
  Mr. Stewart: One result of the rebuilding would be to give more beds than 650, probably 200 more.
  Mr. Thompson: I have not yet mentioned a figure of replacements. I said that 648 beds were being lost, but it is unlikely that the original proposal would have provided Fulham with more than 400 or 500 beds, even allowing for the closing down of the West London Hospital. The Board of Governors of Charing Cross Hospital has in mind a hospital with 700 to 800 beds, with the usual range of specialities. This would mean ultimately that the present total of 648 beds in the Fulham hospitals would be replaced in stages by about 750.
  It is proposed that 10 per cent. of the total beds should be allocated for the chronic sick which would give 70 or 80. That is slightly lower than Fulham's present allocation of 87 beds. The Regional Board recognises the need for more beds for the chronic sick and discussions have taken place about where these might be provided.
  The hon. Gentleman suggested that in view of these divergent views we should either not go on with the scheme or agree to a public inquiry. My right hon. and learned Friend does not rule out a public inquiry, but he is not entirely convinced that it is the best way to proceed. For one thing, it would entail considerable delay and expense to many people and might not establish many facts or points of view not already known. Many discussions with the various hospital authorities and medical interests concerned have already taken place, and my right hon. and learned Friend heard the views of the local people through the hon. Member's deputation last month. Nevertheless, I repeat, no hard-and-fast decision has been taken, and my right hon. and learned Friend has not closed his mind to this possibility.
  The proposals have been under consideration, and discussions have been going on since last summer, and, while full investigation and discussion are obviously essential, I can say that my right hon. and learned Friend hopes to come to a decision fairly soon.
  Question put and agreed to.
  Adjourned accordingly at fourteen minutes to Twelve o'clock.

AFRICAN TERRITORIES
  United States Foreign Service Officers (Visit)
  United States Foreign Service Officers (Visit)
NIGERIA
  Government Trade Centre, Bukuru
  Government Trade Centre, Bukuru
KENYA
  Prisoners and Detainees, Lokitaung
  Prisoners and Detainees, Lokitaung
HONG KONG
  International Labour Day
  International Labour Day
SARAWAK, BRUNEI AND NORTH BORNEO
  Closer Association
  Closer Association
  Subversive Propaganda
  Subversive Propaganda
UGANDA
  Chiefs (Memorandum)
  Chiefs (Memorandum)
  MINISTER OF CULTURE, SCIENCE AND ART
  MINISTER OF CULTURE, SCIENCE AND ART
MINISTRY OF WORKS
  Son et Lumière Display, Greenwich
  Son et Lumière Display, Greenwich
SCIENTIFIC AND INDUSTRIAL RESEARCH
  Scientific Attaché, Moscow
  Scientific Attaché, Moscow
SCOTLAND
  Swimming Pool
  Swimming Pool
  Lockhart Hospital, Lanark
  Lockhart Hospital, Lanark
  A.74 Road
  A.74 Road
TRADE AND COMMERCE
  Export Order (Threshing Machines)
  Export Order (Threshing Machines)
LOCAL GOVERNMENT
  Marshalling Yard, Gloucester (Site)
  Marshalling Yard, Gloucester (Site)
  Moreton Valence Airfield
  Moreton Valence Airfield
  Cinemas
  Cinemas
  Rent Act, 1957
  Rent Act, 1957
PENSIONS AND NATIONAL INSURANCE
  Trade Disputes (Assistance)
  Trade Disputes (Assistance)
MINISTRY OF SUPPLY
  United States Lunar Rocket Project
  United States Lunar Rocket Project
  Moreton Valence Airfield
  Moreton Valence Airfield
  AFRICA SOUTH OF THE SAHARA (TECHNICAL ASSISTANCE)
  AFRICA SOUTH OF THE SAHARA (TECHNICAL ASSISTANCE)
ROYAL NAVY
  "Castle" Class Frigates and Support Ships
  "Castle" Class Frigates and Support Ships
BRITISH ARMY
  Casualties, Cyprus
  Casualties, Cyprus
MINISTRY OF HEALTH
  Chinese Eggs
  Chinese Eggs
  Mental Hospital Staff (Salaries)
  Mental Hospital Staff (Salaries)
  Smallpox (Vaccinations)
  Smallpox (Vaccinations)
  Local Government Officers (Journal Supplement)
  Local Government Officers (Journal Supplement)
HOME DEPARTMENT
  Police (Training Cost and Resignations)
  Police (Training Cost and Resignations)
EMPLOYMENT
  Wages and Salaries (Sickness)
  Wages and Salaries (Sickness)
  Severance Pay Agreements
  Severance Pay Agreements
  Swindon
  Swindon
  Borough Employment Exchange
  Borough Employment Exchange
  East Kilbride
  East Kilbride
  Leadhills, Lanark
  Leadhills, Lanark
  R.E.M.E. Workshops, Lanark
  R.E.M.E. Workshops, Lanark
  Aberdeenshire
  Aberdeenshire
MINISTRY OF POWER
  Petrol, Paraffin and Diesel Oil (Sulphur Compounds)
  Petrol, Paraffin and Diesel Oil (Sulphur Compounds)
ROADS
  Hadrian's Wall
  Hadrian's Wall
  Birmingham—Bristol Motorway
  Birmingham—Bristol Motorway
NATIONAL FINANCE
  Occupational Pension Schemes
  Occupational Pension Schemes
Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers
The Duke of St. Albans—Took the Oath.

THE LATE EARL FORTESCUE
2.36 p.m.
THE SECRETARY OF STATE FOR COMMONWEALTH RELATIONS (THE EARL OF HOME): My Lords, I believe the House would like to know that my noble friend Lord Onslow, who particularly wished to be associated with what I have to say this afternoon about the late Lord Fortescue, has gone to Lord Fortescue's funeral. In consultation with the noble Viscount the Leader of the Opposition and the noble Lord, the Leader of the Liberal Party, I have arranged that a wreath shall be sent from the whole of the House to Lord Fortescue's funeral.
The roots of Lord Fortescue's family go deep into the history of England, and it is significant that when I recall "Tim" Fortescue's life and my association with him the first quality in him which springs to my mind is loyalty, and perhaps that is the greatest of all the human virtues. There was his loyalty to his wife, who was his beloved partner and gay companion, and made, with him, a wonderful home—indeed, it was the long drawn out sorrow of her illness and death which penetrated even his fortitude, and really left him with no will to live. Loyalty to his County of Devonshire, to which he would return, whenever his duties allowed, with all the countryman's excitement and satisfaction in Nature and in the land, in his farming and his forestry, in which he was so expert; back to the country sports and pursuits in which he delighted in the rare times which he had free for recreation. Loyalty, too, to the West Country, where he was, of course, Lord Lieutenant of the County of Devon and a member of the Council of the Duchy of Cornwall, where he had commitments with the Royal Agricultural Society and where he and Lady Fortescue
980
were ready to serve a multitude of local causes. There they will be remembered with particularly deep affection because there were few activities which they did not inspire with their interest and enliven with their presence; and they were both vivid personalities. Loyalty to his regiment, to his country and to his Queen—and, we know, to this House in which he served many what I like to think were to him happy years.
He used rather to laugh at himself as a politician and a Parliamentarian and wonder how he drifted into politics. Perhaps it is true that this debonair, brave, direct cavalry soldier, rather slow to collect his thoughts and slow to express them, perhaps was not on the face of it of the stuff of which conventional politicians are made. But for twenty-one years he pursued his duties here with punctuality and with acceptance to everybody, as Whip and as Chief Whip, and gave to this House unstinted devotion. In doing so he gained the affection of everybody and had a success which was a personal triumph; and he achieved that triumph by methods peculiarly his own.
I remember that once during a debate in this House, when the House was in a somewhat "edgy" mood, a late Sitting was required. I told "Tim" Fortescue that I hoped he would go into the House and explain the necessity for this late Sitting, and I said I had no doubt that he would use his whole tact in persuading your Lordships to sit late. I happened to be in the House when he made his announcement. It went like this: "My Lords, I have an announcement to make. Your Lordships will not like it. You have to sit after dinner." After that, of course, the whole House would cheerfully have sat until early the following morning if need be. We all have a thousand memories of his humour and good temper and his kindness. Here was a man whose character was pure gold; and when we find such a person perhaps the simplest words are most faithful to his memory. I can only say that none of us could ever have known a nicer man or a more loyal friend.
2.42 p.m.
LORD SILKIN: I rise to associate my friends and myself with the tribute which the noble Earl the Leader of the House has paid to the memory of Lord Fortescue. In Lord Fortescue—or

981
"Tim" as we all knew him—the whole House has lost a friend. It is not the case that we are paying a tribute to an official of one Party for we on this side all looked upon him as belonging to us as well as to noble Lords opposite. My noble friend and Leader yesterday used the term "imperturbable" and I feel that that is probably as good a description of Lord Fortescue's character, together with the loyalty of which the noble Earl spoke, as one could find. I have myself never known him to be put out, even though there must have been times when it would have been perhaps justifiable for him to be excited or upset by the conduct of certain people who shall be nameless. I have never known him lose his temper or even be put out in the slightest, degree.
He was invariably kind and courteous and, rather strange for one who had been a military man, gentle. He was a person to whom one could go to talk about one's difficulties, and he would always give a sympathetic ear. My own personal memory of him—and we all have special memories—is of repeated conversations about pigs. He was tremendously interested in my pig-keeping, as I was in his, and we were frequently exchanging views on the subject, on which he held some very good ideas. We shall mourn his loss. It seems hardly credible that he is no longer with us. His memory will remain for a long time with all of us in this House; and we deeply mourn his passing.
2.45 p.m.
THE MARQUESS OF SALISBURY: My Lords, may I, as a former Leader of the House, re-echo all that has been said by the noble Lords, Lord Home and Lord Silkin, about Lord Fortescue. I do not suppose there is anyone in this House to whom the news of Lord Fortescue's death has not come with a sense of severe shock. It was only a few days ago that he was here in this Chamber, his own quiet, unobtrusive self, a part—one might almost, I think, say an essential part—of our lives. And now that he has left us it seems almost impossible to believe that he is not here still, so great a place had he carved for himself in all our hearts.
It was my good fortune to work with him from the time he became Chief Whip of the Conservative Party in this House
982
until my retirement from the Leadership last year, and I do not think I ever remember a happier relationship, at any rate on my part. I hardly knew him when he took over; but soon came to appreciate his rare qualities. Humble he was—I do not think there ever was a humbler man; but his counsel was always wise and he had an unerring instinct about men. That, and his complete integrity and, as the Leader of the House has said, loyalty combined with a natural goodness and kindness, were, I think, the secret of his remarkable success as Chief Whip. He liked everybody and everybody liked him: and so he came to have, to a marked degree, if I may use the phrase in this context, the confidence of the House.
He was, of course, as has been said, pre-eminently a countryman, with that robust common sense which is the hallmark of the true countryman; and it was in the countryside, and especially in his own County of Devon, that he was happiest. It was the occupations of the countryside, and in particular the care of his own estate, that gave him, I think, the keenest pleasure. Indeed, if one had to find one single word which would accurately describe him, I think that that word would be "Squire"—and in its best sense that is a pretty good word.
Such, my Lords, was "Tim" Fortescue, whom we have lost. We cannot, I think, in one sense, wish him to have lived longer, for without his wife, to whom he was so deeply devoted, life could have held little for him. But we are all the poorer for his death, and I am very glad that there has been this opportunity to-day to record our respect and deep affection for one who, as Lord Silkin has said, was a friend to us all and to whom the House, and much more than the House, owe so much.
2.48 p.m.
LORD AMMON: My Lords, I make no apology for entering into these tributes. As the first Chief Whip of the former Labour Government, I succeeded Earl Fortescue. I want only to be allowed to say how much I was indebted to him both for helping me to feel at home and for showing me all the ropes. He became a close personal friend. It is more than four years since I have been able to raise my voice in this House, but I thought that I had to get here

983
somehow to-day to pay my respects and gratitude to Lord Fortescue.
THE EARL OF MORLEY: My Lords, I should like to rise to express my opinion in the same way. I have known Hugh Fortescue, I think, longer than any of you—since he was 13. I was a great friend of both Lord Fortescue and his wife, who in my County of Devon could not have done more. They worked hard together, and I could not conceive his living without his wife.
2.49 p.m.
LORD STRABOLGI: My Lords, I think that to anybody of my generation in this House it will be very difficult to imagine the Front Bench opposite without Lord Fortescue, because he used to sit there, I think, for longer than many of us care to remember. I remember twenty years ago my father telling me how helpful, kind and courteous he always found Lord Fortescue, although their views must have been poles apart. When I myself came to your Lordships' House I also experienced a great deal of his kindness and courtesy. I think one of the great qualities of Lord Fortescue was the fact that he never bore personal rancour, although he could not have agreed with many of the views expressed from this side of the House. Yet in all one's dealings with him one found underneath what I might perhaps describe as superficially the somewhat gruff manner was the merry twinkle of the eyes which betrayed the inner kindliness and innate goodness of the man. I think that on this side of the House he will be greatly missed.

BIRMINGHAM CORPORATION BILL
Read 2a, and referred to a Select Committee.
TEES VALLEY WATER BILL
Read 2a, and referred to a Select Committee.
SURREY COUNTY COUNCIL BILL [H.L.]
Read 3a, and passed, and sent to the Commons.

ARCHBISHOP MAKARIOS
2.52 p.m.
LORD TEVIOT: 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 regard to the Archbishop of Canterbury's invitation to Archbishop Makarios to attend the Lambeth Conference on June 27, and in view of the past and present activities of Archbishop Makarios and the distress caused by this invitation to many of our people who are mourning relatives murdered in Cyprus, they will consider taking steps to prevent his admission to this country.]
THE EARL OF HOME: My Lords, Archbishop Makarios enjoys the normal rights of a citizen of the United Kingdom and Colonies. Her Majesty's Government therefore have no power to exclude Archbishop Makarios from this country. The decision whether to invite him to this country for the Lambeth Conference was a matter for the ecclesiastical authorities, and the Archbishop of Canterbury was so informed.
LORD TEVIOT: My Lords, in view of the statement which I understand the noble Earl the Leader of the House is to make later this afternoon, I do not propose to ask any supplementary questions at this stage, but the House will no doubt wish to consider most carefully what has been said in the Government reply.
THE EARL OF HOME: My Lords, I am grateful to my noble friend. I think that everybody wishes to make it possible for us to get a favourable outcome to the Cyprus question, and therefore it is a help to me not to have to answer questions simply "off the cuff".
THE MARQUESS OF SALISBURY: 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 Archbishop Makarios is a British subject, whether he has been issued with a British passport, and whether it was with the aid of this British passport that he recently visited Egypt.]
THE EARL OF HOME: My Lords, Archbishop Makarios, as a native of Cyprus, is a British subject and is the holder of a British passport. So far as is known, it was valid at the time of his visit to Egypt; it is not known whether he used it.
THE MARQUESS OF SALISBURY: My Lords, for the reason which has already been given by my noble friend Lord Teviot, I do not propose to ask any supplementary questions at the present stage, but I think that it is only right that your Lordships should be aware of the full facts regarding the Archbishop.
THE EARL OF HOME: My Lords, perhaps I may say that I hope to make a statement about half past three, or soon after.

OPENCAST COAL BILL
Brought from the Commons; read 1a, and to be printed.

BUSINESS OF THE HOUSE
THE EARL OF HOME: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That Standing Order No. 35 be considered in order to its being suspended until the Summer Recess for the purpose of giving to Orders relating to Public Bills the same precedence on Mondays as they have on Tuesdays and Thursdays.—(The Earl of Home.)
On Question, Motion agreed to, and ordered accordingly.

INDUSTRIAL ASSURANCE AND FRIENDLY SOCIETIES ACT, 1948 (AMENDMENT) BILL
Order of the Day for the Third Reading read.
LORD HENDERSON: My Lords, on behalf of my noble friend Lord Milner of Leeds, who is prevented from being in his place by a family bereavement, I beg to move that this Bill be now read a third time.
Moved, that the Bill be now read 3a—(Lord Henderson.)
On Question, Bill read 3a, and passed.

MARRIAGE ACTS AMENDMENT BILL
House in Committee (according to Order): Bill reported without amendment.

DEFENCE CONTRACTS BILL
2.57 p.m.
Order of the Day for the Second Reading read.
THE MINISTER WITHOUT PORTFOLIO (LORD MANCROFT): My Lords, this Bill is concerned, first, with the Government's powers to use, or to authorise the use of, privately owned patented inventions and registered designs. It is concerned secondly, and chiefly, with the Government's power to authorise the use of privately owned technical information. The Bill also revokes the existing emergency powers in these two fields—a matter upon which your Lordships have been frequently exercised. In substitution, the Bill adds very slightly to the Government's existing permanent powers in connection with the use of patented inventions and registered designs for defence purposes. It also provides a new permanent power, more limited than the existing emergency power and subject to safeguards, to facilitate the use of technical information in defence contracts.
Your Lordships may, and I suspect probably will, recall that this is not the first occasion upon which the House has debated these matters. In December, 1953, the House considered the Inventions and Designs (Crown Use) Bill. But, in view of the criticism and doubt expressed on both sides of the House on that occasion, the Government withdrew the Bill. Since then the Government have carefully reviewed their needs for permanent powers in this field, in the light of experience in recent years. On the defence side the position is no longer overshadowed (as it was, of course, in 1953) by the Korean war. What is more, events have underlined the importance to our economic progress of avoiding any discouragement to the exchange of technical information at home or its flow from abroad. Both these developments have had some influence on the present Bill.

987
One of the main criticisms of the 1953 Bill was that it enabled the Government to require the disclosure, either to a Government Department or to a third party, of confidential industrial technical information required in connection with defence contracts—that is, the Bill sought to put the Defence Regulations on a permanent basis. In point of fact, those emergency powers have not been much used. The Government decided, therefore, not only that they would not seek permanent powers of this kind, but also that the emergency power was no longer justifiable or necessary. The regulation in question was revoked in 1954, and the present Bill does not provide for the disclosure of technical information: indeed, it specifically states that such powers are not held.
In the course of the debate in 1953 some of your Lordships emphasised the important contribution which the confidential exchange of technical information makes to industrial progress. Your Lordships suggested that there should be much closer consultation with industry before we took any final decision on the Bill. The Government have now had full consultations with industry and have received a report from an independent Committee of Inquiry about the Government's powers to authorise the use of technical information for defence purposes. The Government are grateful to Sir Harold Howitt and his two colleagues for their report. The Committee considered that the Government should have powers to authorise, subject to safeguards, the use by a manufacturer of technical information in defence contracts overriding any restrictions or conditions which might be placed on the use of that information by his commercial agreements.
The Committee, however, went on to suggest provisions designed to ensure that the power would not be abused by any Government and to give assurance to the owners of technical information, both here and abroad, that their rights and interests would be adequately safeguarded. All the Committee's main proposals are implemented in this Bill, as well as one or two others subsequently suggested by the representatives of industry. The Government believe that industry regards the present Bill as im-
988
plementing the spirit of the Committee's recommendations. I should like to return to the recommendations of the Committee when I come to deal with Clauses 2 to 4 of this Bill.
Before I do so, I must refer to Clause 1. This clause is concerned with patented inventions and registered designs. In what follows anything I say about patented inventions and the Patents Act applies in substance to registered designs and the Registered Designs Act. The Patents Act, 1949—Lord Lucas of Chilworth's Act—includes both permanent powers and powers which can be exercised in an emergency. The permanent powers enable the Government to use, or to authorise the use of, patented inventions for (to use the expression in the Bill) the "services of the Crown". In addition, the Act provides for the Government to exercise similar powers during a period of emergency for a wide variety of other purposes set out in Section 49 of the Patents Act. The present Bill provides in Clause 7 for the termination of the emergency so far as the 1949 Acts are concerned, and thus, until there is an Order in Council prescribing a further period of emergency, the Government will be left with only the permanent powers of the 1949 Acts by which such inventions can be used for the "services of the Crown".
The Government wish to increase the powers given by the Patents Act only in two minor respects, where the present provisions are not enough for modern conditions. The Patents Act does not cover the case of what is, in the current N.A.T.O. jargon, known as an "offshore purchase"—that is, where the purchase is to be made by one Ally for the defence of another—or the case in which the supply is to be made to armed forces acting under the authority of the United Nations. This Bill amends the Patents Act to provide for these two cases. It has, however, been suggested in previous discussion, both in your Lordships' House and elsewhere, that these powers should be conditional on reciprocal action by other Governments. We considered this point carefully, but the Government do not regard this suggestion as either appropriate or desirable. We have not experienced difficulty in purchasing defence materials abroad because of the absence of precisely similar legislation in the supplying

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country. If a condition of reciprocity were attached to the exercise of the powers in the two cases covered by this Bill, the most likely effect would be that orders for off-shore purchases would go to other countries and that we should not be able to supply equipment to forces acting under the authority of the United Nations. Logically, indeed, I think such a condition would have to be applied to any exercise of the powers under the 1949 Acts for supply to overseas Governments. The practical effect would be to encourage our Commonwealth and other friends to obtain their requirements elsewhere, because of the difficulty of defining what reciprocal treatment involves. This would be to the detriment of our export trade, and I can see no good reason for making such amendments either to the 1949 Acts or to the present Bill.
I should like to draw attention at this point to another of the main differences between this Bill and the 1953 Bill. When preparing the 1953 Bill, the Government considered the desirability of removing any doubt about whether certain borderline cases were "services of the Crown" for Which the use of patented inventions might be authorised under the Patents Act. The doubts arose because certain goods, although obtained and owned by the Crown, might be issued to the public or passed on to a local authority. Your Lordships may recall the specific cases of deaf aids, artificial limbs, civilian gas masks and fire service communication equipment.
Since 1953, the Government have carefully examined whether special provisions to cover these cases are really necessary and whether it is desirable to include them in this Bill. We have reached the considered view that they should not be specifically covered, after all—and for two main reasons. On the one hand, we have come to the conclusion that no harm is likely to be done, in practice, if such provisions are not included in the present Bill. On the other hand, experience has shown that, if they are included, there is a serious risk of misunderstanding, particularly overseas, as to the purpose and scope of the Bill, which would be likely to do harm to our national interests. In the Government's view, all these supplies, except certain fire service communication equipment, about which I shall have a word to say later, are in fact required for the "services of the Crown", and the
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use of patented inventions and registered designs in their manufacture is therefore currently being authorised under the existing permanent powers. The need for special provisons would accordingly arise only if the matter came before the counts and the courts decided that the Government's view was not correct in a particular case. If that occurred it would still not mean that the use of patented inventions and registered designs for those supplies would be prevented or subjected to unreasonable royalty payments. The 1949 Acts already provide for compulsory licensing, on, of course, reasonable terms.
If difficulty arose as to the use of patented inventions or registered designs for these purposes the Government could, and would, take immediate steps to deal with the situation, and, if they thought it necessary, would introduce legislation to deal with the particular problem which had arisen. They do not, however, consider it necessary or appropriate to include the provisions suggested in 1953 in the present Bill, which is concerned with the use in defence contracts of patented inventions, registered designs and, more particularly, technical information. There would indeed be a real risk of misunderstanding, especially among owners of technical information abroad, whom we do not wish to discourage from passing their knowledge on to British manufacturers, if this Bill, which takes certain powers to require that information to be used in defence contracts, also covered what might appear to be new powers as regards civil contracts.
In the case of fire service communication equipment not required for civil defence, the Government have come to the conclusion that it would not be proper, just because it is ordered centrally, as a matter of convenience, to extend the term "services of the Crown" to cover goods which are required by local authorities to carry out duties laid by Statute not on the Crown but on those authorities. The use of certain of the compulsory licensing powers in the Patents Act would be considered if there were any difficulty about the use of patented inventions in this equipment.
My Lords, I now pass to Clause 2. Subsection (1) gives the Government power to authorise the use; of technical information in defence contracts, notwithstanding the restrictions on its use

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imposed by its owner, by the manufacturer who is negotiating with the Government for a defence contract. The manufacturer, your Lordships will appreciate, already has the information. The Government have no need for powers to require the disclosure of the information to a Department since the information is, by definition, part of the production process for which the manufacturer is responsible. These two factors mean that the Bill does not contain the same element of compulsion as the 1953 Bill and there is, therefore, no need for penalties.
The Howitt Committee considered that the Government should have the power provided by this subsection, but considered that safeguards were necessary. They suggested both limitation of the field in which the power should operate and also certain obligations which the Government should undertake when exercising the powers. First, the Committee suggested that owners of technical information, here and abroad, should be reassured by a specific declaration that powers to require disclosures were not being taken. This is done in subsection (6) of Clause 2. The Committee also considered that the defence requirements for the production of which the power might be exercised should be strictly defined. This recommendation is fully implemented by the definition of "defence materials" in Clause 6 which governs the field in which the powers may be exercised. Indeed, by providing that the defence materials must be designed or adapted for the armed forces or for civil defence purposes, as well as required by the forces or for civil defence, the Bill gives a real basis for appeal to the High Court when an interested party considers that an authorisation is ultra vires as regards the goods covered.
The Committee recommended that the manufacturer should be allowed three months in which to negotiate with the person who licensed him to use the technical information, in the hope that they would be able to agree on arrangements acceptable to all parties for the use of that information in the production of the defence materials. This is provided for in subsection (1) of Clause 3. The Crown must also, the Committee proposed, notify any person likely to be affected
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if the negotiations failed and an authorisation was issued, so that any of these people could make a claim for compensation. Subsection (2) of Clause 3 covers this point. The Committee considered that, as in the 1953 Bill, there should be provision for compensation and for appeal to the courts about it by anyone dissatisfied. This matter is covered by Clause 4.
There are, in fact, only two suggestions on procedure on which we have not followed the Committee. The Committee suggested that the decision as to whether assessors should sit with the court should be taken by the parties. In the Government's view, however, that is a matter which must be left to the court itself. Again, the Committee proposed that the Minister, or the permanent head of the Department, should certify that he personally had considered each particular case when an authorisation is issued. We do not think that the exercise of the powers should be limited by Statute to a Minister personally, or that it would be right, in a matter of this kind, to single out one class of official from another. I am anxious, however, that there should be no misunderstanding as to the importance we attach to the views which have been expressed to us on this matter. I can give your Lordships an assurance that in normal times the decision to issue an authorisation will, in fact, he made by the Minister personally. I want to stress this point, so that any fear that authorisations might be issued without proper consideration will be removed.
Finally, my Lords, I should like to draw attention to one other respect in which this Bill differs from the 1953 Bill. In 1953 we sought permanent powers for all Departments to authorise the use of technical information for services of the Crown "generally and not just defence purposes. The Government have now decided that this went too far. This is partly because the owner of technical information, unlike the owner of a patented invention, seeks no privilege from the Crown, and any powers to make use of his property must be justified specially; and partly because the powers have not, in fact, been needed outside the defence field. By limiting the powers to defence the Government recognise the need to

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encourage the exchange of technical information in industry and its flow from overseas.
Indeed, we have looked at all the questions raised by this Bill in that light and I believe that the Bill does avoid both extremes. On the one hand, it provides permanent powers which the Government really need to ensure the use of all our inventive resources for defence purposes. On the other, it avoids taking powers just in case they might be useful. Your Lordships will probably agree that this would be likely to discourage the investment of industrial resources in research and the exchange of information within industry, which is vital to our industrial progress and economic prosperity.
Thanks to the suggestions made by your Lordships, to the advice of the Howitt Committee, to the willingness of industry to recognise the genuine needs of the Government for defence purposes and to the willingness of Parliament to renew the emergency powers until the matter was fully examined, I think that this Bill is not only a better Bill than its predecessor but provides the best solution of the complicated problems with which it deals.
The taunt is frequently heard that some Ministers seldom stay long enough in one job to learn more than the bare bones of their duties. This, however, has one great advantage: that if the Government have second thoughts about a problem, the Minister explaining the change can tacitly shift some of the odium there may be on to the vanishing shoulders of his predecessor in title. No such defence is, alas! open to me. For nearly six years now I have had the honour to be the spokesman in your Lordships' House for the Board of Trade and it was indeed (as your Lordships may by now have realised) who was responsible for presenting the Bill of 1953 to your Lordships for a Second Reading. Amongst the deaf aids and artificial limbs, the civilian gas-masks and fire service communication equipment, your Lordships may therefore have caught a fleeting glimpse of humble pie. I can only plead, in mitigation, that I have succeeded in making a speech of nearly twenty minutes upon patents, registered designs and technical information without once using the word "know-how". I beg to move.
Moved, That the Bill be now read 2a.—(Lord Mancroft.)
3.18 p.m.
LORD SILKIN: My Lords, it falls to me to say a word on this Bill, as it did four and a half years ago. On that occasion we were confronted with a Bill which was strongly condemned from all sides of the House. The Government, through the instrumentation of the noble Lord, were wise enough to take that Bill back, and I must confess that I thought it had gone for ever. But here it is again, after all this time, and undoubtedly the Government have had ample opportunity for reconsidering the matter. And that they have done. They now present a Bill which, so far as I can see, is unobjectionable in principle. Admittedly, it overrides private rights—though with provision for compensation—but, if the noble Lord was right in his explanation, it does so only for the purpose of defence, and does not go beyond the requirements of defence. If that is so, and if proper compensation is paid and justice is done to those who are deprived of their legal contractual rights, then I feel that there is nothing more that could be said, because after all the interests of defence must predominate even over the rights of private individuals. So I would say to the House that, so far as the general principle of this Bill is concerned, we on this side are prepared to support it. As the noble Lord explained, it is a very complicated Bill which will require detailed examination, and if there are any points that require to be raised at a later stage that will of course be done. At this stage I think the least said about the Bill the better. It can go forward in principle, though we may have something to say at a later stage.
3.20 p.m.
LORD CAWLEY: My Lords, I wish to congratulate Her Majesty's Government most heartily on this Bill. It enshrines a major principle which as yet, has not been alluded to by any Government spokesman. I listened with interest to my noble friend's speech on Second Reading; I have read the speech of the Parliamentary Secretary to the Board of Trade in another place, and I have looked at the Explanatory Memorandum, and they all seem to have avoided saying anything about this major question of principle. I think that your Lordships ought to know something about it.

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It is my daily task, as a member of the Patent Bar, to advise clients on the meaning and effect of the Patents Act, 1949. Ever since that Act has been passed there have been two sections which have been particularly repellent to me; the first is Section 49, and the second is a portion of Section 18. This Bill will completely sterilise Section 49 and make it, at least temporarily, of no effect. My noble friend has said that it can be resuscitated. I rather doubt that. I would much rather that it was taken off the Statute Book.
Section 46 of the Patents Act, which deals with the normal authorisation for Crown use of patented inventions, uses the words
"make, use and exercise"
only. Section 49, which this Bill sterilises, uses the words
"make, use, exercise and vend"—
that is, sell—
"for any purpose which appears to the department necessary or expedient".
There are a number of different purposes, of which these are some:

"(d) for promoting the productivity of industry, commerce and agriculture;

(e) for fostering and directing exports and reducing imports, or imports of any classes, from all or any countries and for redressing the balance of trade"—whatever that may mean, and—

"(f) generally for ensuring that the whole resources of the community are available for use, and are used, in a manner best calculated to serve the interests of the community."

That section makes possible the following situation—I am not saying that the section has been used oppressively, but this could happen. An inventor manufacturer of refrigerators is exporting under his patent, let us say, 50 refrigerators a month to Venezuela. He is making them most carefully and he cannot make any more; they are good quality goods. Then Messrs. "Cheap and nasty" come along to the Board of Trade and say, You want to increase exports to Venezuela? "and the Board of Trade say," Yes". The firm then says, "We can export 500 refrigerators a month to Venezuela." The Board of Trade say, "Right. We will give you a licence under the refrigerator patent to use the invention of the firm of good repute and to export these refrigerators
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to Venezuela. "The" cheap and nasty "firm then export 500 refrigerators a month to Venezuela. Owing to its bad construction one of the refrigerators blows up and kills a few of the local inhabitants. Thus the reputation not only of the" cheap and nasty "firm but also of the firm of good repute is ruined. That is a situation which can arise under the present law, and this Bill seeks to make that impossible. The Crown will no longer be allowed to authorise any person for his own ends to use the patented invention and sell the goods to the general public either at home or abroad. That is a major point of principle, and for that reason I congratulate the Government on bringing forward this Bill.
It is with regret, however, that I see that the Government have not dealt with the provisions of Section 18 of the Patents Act, 1949. This section deals with secret patents. It was a new section in 1949 and it was enacted before the Crichel Down case and before Mr. Pilgrim's unfortunate death—in fact, at the height of the "smash and grab" era. The noble Lord who piloted it through this House has, I see, since then had second thoughts on this sort of thing, because when he spoke on the Copyright Bill, as the chief Opposition spokesman, he spoke of the natural property right of the creator in the works of his own mind. Some of the provisions of Section 18 read quite contrary to that. This section, Section 18, allows the Comptroller General to issue directions with reference to patents applied for in relation to inventions
"of a class notified to him by a competent authority as relevant for defence purposes,"
and the directions may prohibit or restrict
"the publication of information with respect to the invention, or the communication of such information to any person or class of persons specified in the directions. …"
All that means that the inventor has his invention completely sterilised; he can do nothing with it. And if he does tell anybody about his invention he may be punished for his disobedience with imprisonment not exceeding two years and/or a fine not exceeding £500.
The man's brain child is completely sterilised. What happens when it is completely sterilised? If the Government Department use this invention then he is paid compensation in accordance with the provisions of Section 46. But what

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happens if the Government Department do not use the invention, and merely want to keep it up their sleeve so that the enemy does not get it? Then you would expect some provision such as is found in Section 260 of the Customs and Excise Act to apply. That provision is to the effect that if an importer has a dispute with the Customs and Excise as to the value of his goods, the dispute shall be referred to a referee appointed by the Lord Chancellor who Shall not be an official of the Government Department.
What do we find in Section 18 of the Patents Act? This man has had his invention entirely sterilised and can do nothing with it. The Government are not using it. This provision applies:
"if it appears to a competent authority that the applicant for the patent has suffered hardship by reason of the continuance in force of the directions, that authority may,"—
and your Lordships will notice that the word "may" is used here and not "shall"—
"with the consent of the Treasury, make to him such payment (if any) by way of compensation as appears to them to be reasonable having regard to the novelty and utility of the invention"—
and so on. If an invention is worth suppressing then it is worth paying for. What on earth does "hardship" mean in the section? If the inventor, let us say, is an employee of Imperial Chemical Industries, Limited, that company may have spent half a million pounds on the invention. It is completely sterilised. The Government Department may well say, "A big company like that can well afford £500,000. They have not suffered hardship." It is not laid down at all what that word means.
I mentioned that there is no compulsion on the Government Department to pay any compensation, and there is no independent arbitrator whatsoever. Two Government Departments have to decide together whether the man is to get any compensation. I do not apologise for bringing up this matter, because it has rankled for a long time and it is germane to this Bill. But I do suggest that the Government should take note that it would be a good thing to amend this section, along with the other sections that they have amended already in this Bill, to abolish the means test for inventors and to appoint some independent person to assess what compensation the inventor whose invention is suppressed should get,
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and that that compensation should be as of right and not merely at the whim of a Government Department. Now, my Lords, I commend the rest of the Bill. It is an excellent Bill; but I suggest that that point should be borne in mind by Her Majesty's Government, either as an Amendment later to this Bill or in other legislation.
3.30 p.m.
VISCOUNT STONEHAVEN: My Lords, I welcome this Bill for several reasons. I find myself at a considerable disadvantage and in some trepidation as being the only non-lawyer who has spoken on this subject. The Bill is really very technical indeed. I have done my best to understand it, but it is open to very considerable doubt whether a layman, at any rate of my calibre, ever understands such a complicated Bill. I must admit that the point raised by Lord Cawley did not strike me. I thought there was provision whereby the patentee, if he could not come to agreement with the Government contractor in three months' time—I think it is three months; but it may be six—could then go to the High Court and have the matter adjusted there. However, that just shows how little one really knows when one is not a lawyer.
Nevertheless, the point that impresses me, and I think is of cardinal importance, is the recognition that is given to the provisions of secrecy. I think it is paramount that there should be no question whatever of the Government's being able to demand secret information, secret patents and the one word I may not use—"acquired skill" is an interpretation of it. American opinion showed itself at one time very touchy indeed on this subject, and I am sure that if we are to get interdependence, or the benefit of interdependence, in manufacturing to other people's designs in this country, complete and absolute belief on the part of the manufacturers that their secret information is safe and secure is essential.
I am impressed by how extraordinarily closely this Bill follows the Howitt Report. The point that strikes me, after the Howitt Report, is the great trouble to which the Board of Trade, or my noble friend the Minister, went in order to make sure that industry had a complete and full chance of discussing these problems. I know that meetings were held while the Bill was being drafted and the matter was gone through by representatives of the

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industry with a fine tooth comb—at any rate, their advice was sought on it. The people who were consulted were the Federation of British Industries, British European Airways, the Association of British Chambers of Commerce, the National Union of Manufacturers, the Trade Marks, Patents and Designs Federation, the Chartered Institute of Patent Agents and the London County Council. That gives a fairly good cover of general opinion, and all those bodies appear to have been at least satisfied, if not entirely enthusiastic. I think most of them were very enthusiastic.
A matter which to my mind is of greater importance than anything else is paragraph 21 on page 7 of the Howitt Committee Report. It is quite short, and with your Lordships' permission I will read it. They say:
"We regard it as of paramount importance that the proposed legislation should, expressly and positively, and not merely by inference, make it clear beyond the peradventure of a doubt that no disclosure is authorised by any person to any person ('person' in both cases including the Crown and its representatives), of any information which any person is by the relevant contract prohibited from disclosing.
This, we understand, is acceptable to the Departments concerned, in the full realisation of its meaning and effect. If it had not been acceptable, our conclusion as to the desirability of granting the powers to the Crown might well have been different."
Then I leave out a little bit. The Committee go on to say:
"It is, of course, at this point that the vital difference emerges between patented inventions and inventions or information which are not, or cannot be, patented. Where patents exist, the disclosure of the particulars of the invention is not harmful—indeed, it is necessary—but the disclosure is accompanied by statutory protection. In the case of unpatented inventions there is no such statutory protection.
"We assume that the Act will be binding upon the Crown, particularly as to the provisions forbidding disclosure of information."
That seems to be very strongly expressed, and I think it is the key to the whole matter.
It is a courageous thing on the part of the Government to grasp the nettle, and I think they have done extremely well in producing—as a second shot, I might almost say—a Bill which seems to have answered all these difficult problems. I can only hope that a similar kind of legislation, negotiation, or whatever would be appropriate, will follow in Europe,
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where the seven countries in the Western European Union are continually being faced, when they start talking about standardisation or helping each other out, or manufacturing other people's weapons, and so on, with the problem that is always cropping up on the disclosure of information. There is the possibility which is at the back of all industrialists' minds, that their competitive position will be damaged by that. I think this is a good and courageous lead on the part of Her Majesty's Government, and I hope that something of the kind I have indicated, not tied on to it in any shape or form, will be forthcoming in the future.
3.38 p.m.
LORD MANCROFT: I will stand for only a few brief minutes between your Lordships and the Leader on the important statement to which we are looking forward. I should like to thank your Lordships for the friendly way in which this Bill has been received—a great deal more friendly than the reception which was extended to its predecessor in 1953. As to the kindly remarks which my noble friend, Lord Stonehaven, has just addressed to me, I must point out that in this case "B.E.A." and "L.C.C." do not mean the British European Airways and the London County Council but the British Engineering Association and the London Chamber of Commerce. We had better get that matter straight at once.
The noble Lord, Lord Cawley, raised a highly technical point about Section 18 (3) (b) of the Patents Act. The Act provides, as he has told us, for statutory compensation to be paid for the Government use of patents held secret for defence reasons; but by holding a patent secret the competent authority may in fact deprive the owner of the opportunity of exploiting his invention for ordinary civil use. It was agreed on both sides of the House in 1949, at the time of Lord Lucas of Chilworth's Act, that there should be statutory provision for an ex-gratia payment to be made to the owner for any loss of a potential civil market. It was also agreed, however, that this was not a suitable place for statutory compensation; that is, settlement by the courts.
The power to have patents held secret has been most carefully exercised so as not to impair the owner's position. As

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I think the noble Lord, Lord Cawley, would agree—and no one knows better than he—every effort has been made, when the patent appears to have a civil market, either not to hold it secret or to remove the secrecy provisions as soon as possible. I am glad to be able to reassure my noble friend and to tell the House that, as a result, the Ministry of Supply and the Admiralty have not had a single claim made to them under Section18 (3) (b). That seems to me to be the best possible evidence that the power is being exercised with circumspection. I however, look carefully into the extremely cogent and closely argued remarks which my noble friend addressed to the House, and will take the expert advice which they certainly deserve. If there is anything further I can do to meet the noble Lord's point I will certainly do it, but I feel that I can assure the House that the fears he has expressed are not actually so prevalent as he might other-wise think. With those few words I ask your Lordships to give this Bill a Second Reading.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

DISABLED PERSONS (EMPLOYMENT) BILL
3.41 p.m.
House in Committee (according to Order): Bill reported without amendment.

CYPRUS
3.42 p.m.
THE EARL OF HOME: My Lords, perhaps your Lordships will allow me to interrupt Business for a few moments. Your Lordships will know that an undertaking was given by my right honourable friend the Colonial Secretary on May 19 that a detailed statement of the comprehensive policy on the Cyprus problem which Her Majesty's Government had prepared during recent months would be made not later than to-day. In preparation for this the policy has been fully explained to the Turkish and Greek Governments. It has also been put be-for the N.A.T.O. Council, and yesterday
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afternoon there was a full and helpful discussion during which our efforts to rind a new basis for a solution received general recognition.
As a result, M. Spaak, on behalf of the Council, conveyed to Her Majesty's Government last night the strong request to postpone for forty-eight hours their Parliamentary statement in the belief that this short delay would be of advantage. I trust your Lordships will feel that Her Majesty's Government have done right in all the circumstances to accede to this request. We recognise the great forbearance which Parliament as a whole has shown on this matter. We also have in mind the definite undertaking that a full statement would be made not later than to-day; and we had already made arrangements for a debate in another place next week. Nevertheless, we did not feel that we could turn a deaf ear to the plea of our Allies in N.A.T.O.; nor do we think any opportunity should be neglected which might lead to a settlement. We shall in any case make a statement on Thursday in the light of the progress made.
LORD SILKIN: My Lords, we are grateful to the noble Earl, Lord Home, for the statement he has made. I am sure that no one in any quarter of the House would wish to embarrass Her Majesty's Government in this matter, and we will therefore accept the position and look forward to the statement on Thursday.
THE MARQUESS OF SALISBURY: My Lords, I am sure the whole House is in agreement with what the noble Earl the Leader of the House has said, and it would clearly be premature if we were to press Her Majesty's Government at the present time. I should, however, like to ask one question of the noble Leader of the House: will he give facilities for a debate in this House when the time comes and will he be good enough to let us know when he thinks such a debate could usefully be held?
THE EARL OF HOME: My Lords, I will certainly respond to the request of the noble Marquess. Perhaps we might see how we get along and arrange a debate through the usual channels at a convenient time.

LAND POWERS (DEFENCE) BILL
3.45 p.m.
Order of the Day read for the Bill to be considered on Report.
EARL BATHURST: My Lords, I beg to move that this Report be now received.
Moved, That the Report be now received.—(Earl Bathurst.)
On Question, Motion agreed to.
THE EARL OF ALBEMARLE: My Lords, I do not propose to move either of the Amendments standing in my name, and if your Lordships will permit me I should like to give an explanation. I was able to table those Amendments only late on Friday evening, having received instructions from the River Boards' Association in the country in the morning. I did what I could, just in time. The River Boards' Association have had further discussions with the Government Departments concerned, and as a result of those discussions the Association have received assurances that the matters which I should otherwise have raised by my Amendments will be satisfactorily dealt with by legislative action. It was also indicated that such concurrence of views would be put in writing for the benefit of the records kept by the River Boards' Association. Lastly, I would thank those Departments for their understanding of our difficulties, and express regret for the late tabling of the Amendments on the Report stage—it was unavoidable on our part, as we assemble representatives from the length and breadth of this country only at stated intervals, and the last full meeting occurred early last week.
EARL BATHURST: My Lords, I should like to thank my noble friend Lord Albemarle for not moving his Amendments, and to hasten to assure him, as my noble friend has said, that the interests of the drainage boards are in no way detrimentally affected by this Bill. As the noble Lord has asked, I will see that the Departments concerned write to him to make it quite clear that this is so.
This somewhat complicated but modest Bill has passed through its various stages in your Lordships' House and another place, and has generally met with assent. I shall, therefore, with your Lordships'
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permission, deal only with the two points raised by the noble Earl, Lord Dundee, when he moved and withdrew his Amendments, and that raised by the noble Viscount, Lord Alexander of Hillsborough. The noble Viscount suggested that inconvenience would possibly be caused to farmers, landowners and others when manœuvres are being held, in that they would have to make great research into the various Manœuvres Acts dating back to 1897. I assure the noble Viscount that the new Manœuvres Commission will be a most vital and approachable body, and in any case most of the problems will be capable of solution on the spot. It is the intention of Her Majesty's Government, however, to consolidate all these various Manœuvres Acts, going back to 1897, and to bring them all up to date in one Act, together with the relevant clauses of this Bill.
With regard to Clause 10 and the Amendment withdrawn by my noble friend Lord Dundee, I am most grateful to him for bringing the attention of your Lordships to this point. It has been most closely looked into, and I am glad to say that we have found, as I intimated to my noble friend, that this point was groundless. My noble friend was afraid that an owner would not be notified of any work that was to be commenced upon his land and would not have the opportunity of removing offending obstructions himself. It is quite clear from the Second Schedule, at page 33, line 36, that the owner will, in fact, be notified. The circumstances envisaged by my noble friend would arise only if the owner were to object or if the owner could not be found, and I think that that last point would be a very rare case indeed; nevertheless, it happens. In the case of objections being raised by the owner a full inquiry would be held by a tribunal, with an independent chairman, which would be appointed by my noble and learned friend who sits upon the Woolsack, under the Franks Committee's recommendations. If it were a case for compensation, then the compensation would be decided by the Lands Tribunal, as is stated on page 15, line 36; and in Scotland it would be by the official arbiter, under Clause 25, page 29, line 37. And, of course, as is also stated in the Bill, the owner would have the full right to sell the timber, stone or salvage that was involved with the removal of such objects or property.

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We are referring to a compulsory order upon an owner which must be carried out. In the event of a refusal by the owner, or of his inability to remove such objects, it is necessary that the onus should be put upon the occupier, after due inquiry and with due compensation, for the lull loss and for damages incurred. I am most grateful to the noble Earl, Lord Dundee, for drawing your Lordships' attention to this point and for withdrawing his Amendment; and I trust it is now quite clear that his fears are unfounded. My noble friend's second Amendment was to Clause 25, at page 29, line 23. The Amendment sought to remove from the definition of owner—
LORD SILKIN: My Lords, I hope the noble Earl will forgive me, but I should like to be clear as to exactly what we are doing. It looks as if the noble Earl is replying to Amendments which have not been moved, and which it is not intended to move; and he is making the speech he would have made if those Amendments had been moved. As the matter stands at the moment, there are no Amendments.
THE EARL OF DUNDEE: My Lords, the Amendments were moved in Committee and withdrawn.
LORD SILKIN: We are now on the Report stage, and I am wondering exactly what is the procedure that we are adopting in this case. I should have thought that the noble Earl's speech that he is making now would have been appropriate on the Third Reading. I wonder whether it is appropriate on the Report stage, when there is nothing before us. There are no Amendments.
EARL BATHURST: I am grateful for the noble Lord's intervention. I promised my noble friend that I would make it clear that his fears were unfounded, and therefore he withdrew his Amendment. But I would certainly, if your Lordships would wish it, and if I have your Lordships' permission, state that fact on Third Reading or at any other time your Lordships wish.
LORD SILKIN: I do not mind the noble Earl going on, but I wanted to know what was the procedure. I should have thought it rather unorthodox for him to continue and that his speech would have been more appropriate on Third Reading.
EARL BATHURST: Perhaps it would be better if these points were brought out on Third Reading. I am most grateful to the noble Lord opposite.

AGRICULTURAL MARKETING BILL [H.L.]
3.55 p.m.
An Amendment reported (according to Order).

PREVENTION OF FRAUD (INVESTMENTS) BILL [H.L.]
Read 3a (according to Order), and passed, and sent to the Commons.
STATUTE LAW REVISION BILL [H.L.]
Read 3a (according to Order), and passed, and sent to the Commons.
MATRIMONIAL PROCEEDINGS (CHILDREN) BILL
Read 3a (according to Order), with the Amendments, and passed, and returned to the Commons.

PARK LANE IMPROVEMENT BILL
3.57 p.m.
Debate resumed (according to Order), on the Motion for Second Reading moved yesterday by Lord Mancroft.
LORD GISBOROUGH: My Lords, there is no doubt that at first sight the Park Lane Improvement Bill is viewed by all with the greatest favour, as are all Bills dealing with the improvement of roads. However, though the objects may be admirable I feel that the means it implies are not at all good, and I have the gravest doubts whether the scheme would succeed in its objects. I think that many noble Lords will have been considerably reassured by Lord Mancroft's statement yesterday that the utmost care will be taken to retain as many trees and amenities as possible. One point on which I should like reassurance, however—and I think there are many other people who would also—is the Cavalry Memorial. It is a very

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well-loved Memorial and there is a very big parade every March (I believe it is) when a large number of Cavalrymen come to parade before it. Could an assurance be given that this Memorial will be placed in a most suitable position and with the full accord of suitable senior Cavalry officers?
LORD MANCROFT: My Lords, perhaps I might interrupt to give the noble Lord that assurance at once. The matter is being discussed with the Royal Armoured Corps, with a view to cooperating with them concerning their Memorial. It will probably be in the vicinity; probably just inside the new gates on the south road.
LORD GISBOROUGH: With regard to the improvement scheme itself, I wonder whether Hyde Park Corner is the correct place to start these alterations. Hyde Park Corner is a place of traffic jams only at rush hours—indeed, at ten o'clock to-day I drove straight through it without being held up for a moment.
EARL HOWE: There are no buses running at the moment.
LORD GISBOROUGH: Even when the buses are running I have found the same thing, although perhaps the road has not been quite so clear. But in St. James's, Regent Street, Piccadilly and Knightsbridge (to mention a few places) there is a constant "jam"; there is in these places a far greater jam", when buses are running, than there is at Hyde Park Corner. It should be remembered, perhaps, that even if the plan is put into effect, the buses will be using the Corner when they return.
If this new plan succeeds there will be a constant flow of traffic in all directions. Presumably this constant flow will be towards Piccadilly, so that if one comes from the direction of the Ritz and wants to go to Park Lane Hotel, it will be impossible to cross over the road in either direction. It will be necessary to go right round the whole Corner before one can get across the road. This constant flow of traffic will also pile up against Knightsbridge and Piccadilly Circus and the area of St. James's, with no phasing by lights, as there is at the moment, so that the traffic can sort itself out. What plans are there for relieving
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this constant flow of traffic on either side, in the way it has been so well catered for towards Marble Arch?
This is a grandiose plan. Cannot we be reassured that it is going to be effective not just for twenty years' time but for almost all time? Because a plan of this size should be big enough to last almost for ever. One point which I think has been omitted is parking facilities. On June 11 the noble Lord, Lord Mancroft, said that parking facilities in the Park would be slightly decreased by this plan. When so many millions are being spent, and so much roadway and park is being dug up for foundations, would it not be a comparatively small matter to dig a little deeper and create underground car parks, perhaps at the two corners and in the middle of the new dual-carriageway? Surely this is an opportunity which will not come again. I sincerely hope that the suggestion of the noble Lord, Lord Blackford, of using Rotten Row for parking, will not be countenanced. It would be a great pity to have a mass of cars visible in the Park.
With regard to the actual working of the plan, competent foreign authorities have condemned it because they say that it will not work. I trust that their reasons for saying this have been fully studied. I think that, with a plan of this size, if there are any reasonable doubts, we should be satisfied whether or not they are correct. I myself have grave doubts whether the plan is adequate. First, the openings from the dual-carriageway are opposite streets running into Mayfair, so that, for example, anyone coming out of Upper Grosvenor Street and intending to go north will have to cross over at right angles to the traffic coming south, which seems to me to be a bad plan, necessitating lights or some form of control which, ideally, should not be necessary.
Then, surely, the road going round the roundabout is, as planned, far too narrow for "weaving" traffic. London Transport have said that they will not use the underpass road. I believe that only 14 per cent. of the traffic using the spot at the moment will use the underpass. Surely that percentage will soon be made up by the increase in the number of cars on the road. With all the buses on the

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roundabout, and the increased traffic to absorb the 14 per cent., in spite of the area which the roundabout is to take up there will still be a great amount of crossing, intermingling traffic. The Park Lane—Constitution Hill traffic will be crossing with the Knightsbridge—Piccadilly traffic; the Piccadilly to Victoria traffic with the Park Lane—Constitution Hill traffic; the Constitution Hill—Knightsbridge traffic with the Piccadilly to Victoria. So it goes on all the way round. The scheme provides for a comparatively narrow entrance to Knightsbridge—certainly no wider than the one at the moment. Again, with all the buses and only 7 per cent. less traffic (7 per cent. is going the other way) surely there will be no less a jam than there is at the moment and certainly no improvement. I do not think that this roundabout is a satisfactory proposition at all.
One route which I think has been entirely neglected is the route from Piccadilly to Belgrave Square, Pond Street and out to the West. That route has been given no special treatment, and one has only to go that way to see how many cars use it. The same may be said of traffic from Belgrave Square coming eastwards. Surely a scheme of such magnitude cannot be allowed to start with such basic and inherent faults. The whole corner is to be enlarged in area. The Royal Parks are to be decreased. The only advantage is that there will be 14 per cent. less traffic using the surface roads, of which presumably only 7 per cent. will be effective in any one direction. Apart from the enlargement of the whole area, there is to be no great improvement; and what imporvement there is will be taken up very soon by the increase in traffic. There will still be a "jam"—but over a larger acreage. If there is not a "jam," the constant stream down St. James's, Piccadilly and Knightsbridge will be made infinitely worse, unless improvements to the approaches are planned and integrated with this present scheme.
If a scheme of this size is to be undertaken, surely it would be more sensible that we should tackle effectively the problems of this "weaving" traffic, of which there are no fewer than eight or nine different permutations. It should be well linked with the traffic problems for a mile in all directions, just as it has been so well linked with the Marble Arch. Until the time when a comprehensive
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plan, even if only for the future, can be made, surely it is preferable to modify the present set-up. I believe that the present "jam" is caused by one main source. I firmly believe that if the traffic going from St. George's into the Park could be diverted, perhaps taken to the West and then into the Park, that would allow a constant flow up North and then to the West and East, and the whole "jam" would be vastly relieved at a much lower cost than the enormous scheme envisaged at the moment.
LORD LUCAS OF CHILWORTH: My Lords, would the noble Lord be kind enough to inform the House whither he would divert the traffic. Where would it enter the Park from St. George's?
LORD GISBOROUGH: I cannot claim to be a road designer, but I had in mind that if the traffic was not allowed to cross over and through the Decimus Burton screen but had to go to the left, towards the West, perhaps it could turn into the Park by a tunnel or some means of that sort. The road planners would have a much better idea than I have, but I believe that it might be the answer. Perhaps not; I do not know. Of course, there would be a great need for pedestrian tunnels. I dislike this plan. I do not think it achieves enough improvement over what we have at present. It does not improve the problem of cross-traffic and mingling traffic; and until such time as they may be altered, it infinitely worsens the position of Knightsbridge and Piccadilly.
LORD SOERS: May I interrupt the noble Lord to remind him that in any through-traffic route, if one looks over the entire country, there are bound to be a series of bottlenecks. If one is going to remedy them, one can start only with one at a time; we cannot deal with them all at once.
LORD GISBOROUGH: I agree. But I feel that when the time comes for a complete review, in order to make the traffic flow readily through Piccadilly and Knightsbridge, it may be necessary to alter Hyde Park Corner to fit in with the plan. I dislike the plan for several reasons: it reduces the Royal Parks; it has no parking facilities attached to it; the tunnel is unacceptable to the buses; and the gain on any one side will be only 7 per

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cent. I believe that the problem is soluble on a far more limited and less costly scale by modification of the present corner, which is by no means London's worst bottleneck, until such time as complete control of all the West End traffic can be incorporated in one co-ordinated plan.
4.12 p.m.
LORD DERWENT: My Lords, I find myself in almost entire agreement with what the noble Lord, Lord Lucas of Chilworth, said yesterday. It follows, I suppose, that I am to a large extent in disagreement with my noble friend Lord Conesford; and I think I am in disagreement with my noble friend Lord Gisborough, although I am not clear as to what he meant. So far as I understand it, the gist of his speech was this: first, that because traffic is going to increase largely in the near future, you should therefore do nothing now; and secondly, that this does not answer the whole traffic problem of Central London, The first argument I must disagree with; but with the second, that it does not answer the whole traffic problem of Central London, I entirely agree.
I am not going to enter in detail into my differences with my noble friend Lord Conesford, because I imagine that my noble friend Lord Mancroft will deal with what is necessary, but I will say this. With respect, I think that much of my noble friend's argument yesterday was based on prejudice rather than on reason. I do not wish to be in any way impolite, but I should like to quote one paragraph from the noble Lord's speech. In column 878 of yesterday's Hansard the noble Lord was discussing the question of a roundabout at Marble Arch. The argument against having underpasses there, so he said—and indeed it is true—is the excessive cost owing to the valuable property in Edgware Road which would have to be demolished. That was, I think, the reason given by the Ministry; and it certainly is the reason why a roundabout is being used there. Then the noble Lord went on to say:
"I am not joking—that was the reason given. What will be thought by posterity of a Parliament that thought the expense of demolition in the Edgware Road so obviously more important than the destruction of the amenities of Green Park?"
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What on earth has the roundabout at Marble Arch got to do with the amenities of Green Park?
I will deal, first of all, with my view of the amenities. It is most regrettable that they have to be affected in certain directions, but I think a sense of proportion is necessary here. With this scheme, unfortunately, a considerable slice has to be taken off Green Park—that I admit. On the immediate inside of Hyde Park at Hyde Park Corner the amenities are not, in fact, affected. That is not an open space amenity; it is a roadway open space. It is there now, and does not take away anything from the open space element of the Park. On the way up Park Lane, on the west of the present East Carriage Drive, I think I am correct in saying that no trees will have to come down. On the part that is between the East Carriage Drive and Park Lane, for the whole length of the Park there will be somewhere about ten or twelve trees (the exact number is not yet certain) that will have to come down.
When we get to Marble Arch, in my view anything that is done to Marble Arch from the amenity point of view must be an improvement on the present situation. I always think of that corner of Marble Arch—and I include the roadway—as something of a Park slum. I think that this new design will be a great improvement; and in my view, it will be a great improvement from the amenity point of view when the Speakers' Corner is set rather farther back. So I think, on balance, regrettable as the Green Park end is, we are not losing very much; and as the noble Lord, Lord Lucas of Chilworth, said yesterday, this is a matter where we have to balance one thing against another.
As regards the actual road and traffic side of the question, the noble Lord, Lord Silkin, said yesterday that this matter has been discussed since 1937. I think it must have been discussed, first of all, somewhere about 1850, when I know there were complaints about the crowds of carriages at Hyde Park Corner. The London County Council have at any rate been dealing with this matter certainly since 1937, and before. In the decision that has been taken on the present plan I am fully aware that the expert road engineers and road designers have disagreed. There are various methods of dealing with the matter. The Ministry,

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and successive Ministers, have had all the information and all the advice from all sides as to the best method of handling it, and, on balance, they have decided on this scheme. It may not be perfect, but, in my view, it is probably as good as any other.
What is my noble friend Lord Cones-ford asking? This is a problem which exists. It is no good saying that Hyde Park Corner is satisfactory. It carries this great volume of traffic, and it is, apart from the volume of traffic, owing to its shape, size and the way the traffic comes in and out, an extremely dangerous corner. This is the scheme that is considered the best—I am not suggesting it is the best, because that is, among the experts, a matter of opinion, some taking one view and some another. But if this Bill does not go forward, nothing will be done for another three years; the same result will probably come out "in the wash," and the same scheme will be put forward again.
LORD CONESFORD: My Lords, I am grateful to the noble Lord for allowing me to explain. He has asked what I am asking for. The answer is quite simple. I am asking for the publication to this House of the report on this scheme and the experiments made by the Road Research Laboratory. I think it is a reasonable demand that, if we are to take twenty-one acres of the Royal Parks—though I know some of that is carriageway—we should at least know that, in the opinion of the traffic experts, the scheme is going to work. We have been refused that report.
LORD DERWENT: Unfortunately I cannot answer the noble Lord in detail about the Road Research Laboratory, because I have had a confidential indication (not from the Minister) and therefore I must say nothing about it; I must leave it to the Minister. As to which view they take, I am not going to hazard a guess. But assuming—and I by no means assume it—that they take a view against this particular plan (I have no reason to think they do) other experts are in favour of the plan, and you will simply get the same thing over again. I am a great admirer of the Road Research Laboratory, but they are only one expert against another. I repeat, that what the noble Lord is asking for is that this Bill should not go forward. If it does not go forward
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now we shall have several years' delay and the result may be the same.
As regards the actual traffic, I hope and trust that this plan will be adequate for internal traffic—I will explain what I mean in a minute. Even on Lord Conesford's figure of 14 per cent. of the traffic approaching Hyde Park Corner going through the underpasses—and I do not accept or reject that figure; I do not know how it is arrived at—that is an improvement, because that traffic will not be using Hyde Park Corner. Are we never going to have any improvement because the percentage is not high enough? That may be the right percentage or it may not; I do not know. But it is time we had an improvement.
This scheme will not be adequate for the traffic going there unless, as the noble Lord, Lord Lucas of Chilworth, said yesterday, we deal with the through traffic; that is to say, the traffic coming into one end of London and going out the other—Ealine to the Docks, for example, where the quickest way is to go through Central London. Owing to the ring roads being old-fashioned and congested and having crossroads and so on, very often the quickest way for through traffic is, strange to say, through the centre of London. If ring roads are made with limited access, even if traffic has to do an extra five miles of route it will probably save half an hour in traffic jams. This is only part of a large scheme, but it will not work until through traffic is taken out of the centre of London, and you will not do that except by providing proper roads. This is only part of the total scheme. On the other hand, it would be madness not to start improving things, instead of arguing year in and year out whether something might or might not be an improvement. This is, at any rate, an improvement.
I want to raise one minor question and ask the noble Lord, Lord Mancroft, for some help. Immediately behind the garden of 148, Piccadilly—not Apsley House but 148, Piccadilly—just outside the present garden fence and inside the Park is a specimen plane tree. It is, I am informed, the largest plane tree in any of the parks. It is a magnificent tree in very good condition and clearly one of the finest trees in London. There has been a difference of opinion amongst the experts, as usual. As the plan is

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made at the moment, there is just beyond that tree to be the roadway of an island, a roadway which is called "Southern Apsley Link". I am informed by some experts that if we move that island a few yards to the north, or alternatively if we cut a bit off the southern piece of that island, the tree can be saved and the traffic flow will not be affected. The other experts, who are largely on the engineering side, say that it will interrupt the flow of the traffic. It is such a magnificent tree that it ought to be saved if possible, and I merely ask my noble friend if he will have a special look at it. My own advisers think somebody may be being pigheaded. On the other hand, they may not. Will he see if it can be saved? I do not know.
4.25 p.m.
VISCOUNT COLVILLE OF CULROSS: My Lords, I was one of the noble Lords who accompanied the noble Lord, Lord Conesford, last Friday morning on the expedition to look at the ground plan of this scheme on the spot itself. In the first place, I should like to thank very much those who made that possible and made the morning so interesting and took so much trouble to show us everything in great detail. Although I am not a great expert on this subject, I should like to point out a few things which impressed me about this scheme.
The first is that although so much of the Park is apparently going to be taken, in fact only four and a half acres of amenities throughout the entire area are going to be lost from grass to roadway, and I think that that is an astonishingly small acreage to lose in so large a scheme in the middle of London. In addition, although the total figure to be lost from the Royal Parks is twenty-one acres—and, of course, I regret that as much as any other noble Lord—the reason this is being done is because the Park railings on the east side, which at the moment run in between Park Lane and the East Carriage Drive, are going to be moved to the west side of the East Carriage Drive. The central strip between Park Lane and the East Carriage Drive, although it will no longer technically be in the Royal Parks, will still be green. It will be more accessible than it is at the moment, as any noble Lord will know who has tried to cross the East
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Carriage Drive in the middle of the day, because there will be subways; and in fact I very much doubt whether there will be much loss of amenity in that central strip.
As for the Green Park, a great deal has been said about the lamentable loss of the row of trees flanking Piccadilly from Down Street up to Hyde Park Corner. I would agree that it is a great pity that any fine plane trees of that size should be lost. But nobody has yet said that there is in fact a second row of trees inside Green Park which will stretch almost as far as does the present outside row and will not be touched by the present scheme, so that those who look out from offices on the north side of Piccadilly will still look at green plane trees, and at one point a chestnut tree.
Further on towards Grosvenor Gardens there will be lost the triangle of what is at the present moment marked green on the corner of Buckingham Palace Gardens. If any noble Lord looks at that particular corner, I do not think he will say that much amenity will be lost if that is no longer kept green. It is not open to the public; it is full of weeds and it takes the form of a high bank with some rather nondescript shrubs upon it. On the other hand, in the middle of Hyde Park Corner at the moment there is a large expanse of concrete and some small plane trees, of which at least two are almost dead. I am not surprised they are dead considering the amount of the exhaust fumes that must be puffed out at them every day in the morning and the evening when the traffic is stationary all round them. On the contrary, this scheme provides for a large area of green grass in the centre of Hyde Park Corner and more trees than there are at present. Among other things, I suggest that that will be a great deal pleasanter prospect for St. George's Hospital than the present expanse of concrete and half-dead plane trees.
I do not know very much about the traffic scheme, but I have driven round Hyde Park Corner many times and it would surprise me if the traffic went any slower by the removal of traffic lights at St. George's Hospital Corner. At the moment, either the traffic coming up the side of St. George's Hospital from the south is stationary, or the traffic coming from west to east along Knightsbridge is stationary. As the scheme is now intended

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to go, that traffic will not be stationary in any direction at any point. It will have to weave across, but there will not be any period in which traffic lights are red and cars cannot cross each other.
As for the traffic at Marble Arch, I cannot but feel that any improvement would be a large one. In the rush hour there are two small gates for all the traffic to get out of the Park, and there are two small gates by which to get in. When the traffic gets into the Park from Marble Arch itself and wishes to turn west it has to cross all the traffic that is waiting to go out of the Park by those gates. Equally, all the traffic which is going along the North Carriage Drive and which has to go along the East Carriage Drive in a southerly direction also has to cross all the traffic which is going out of the gate from south to north. As the scheme is proposed, there will be one traffic island and the traffic will all go round in the same direction, from whatever direction it may have come. I cannot but think that this is a scheme which is going to make a great difference, and improvement, and the cost in amenities is not very great in comparison. I would support the scheme.
4.31 p.m.
LORD LATHAM: My Lords, I rise most warmly to support the Second Reading of this Bill, which is designed to authorise the carrying out at Hyde Park of a most comprehensive, imaginative and bold scheme to deal with a congestion problem that is probably the most acute there is in London. As the noble Lord, Lord Derwent, has said, this problem has been under consideration by the London County Council and by the Ministry of Transport and Civil Aviation for many years. I can remember as far back as 1946 considering at County Hall a number of schemes then designed to deal with this problem, and I think it would be a thousand pities if now, some twelve years after, we should hesitate to carry out a scheme which on balance, as my noble friend Lord Lucas of Chilworth said yesterday, has the advantage of adequately dealing with the problem.
It has been said that this is the largest single scheme carried out in London since the construction of Kingsway in 1905. I would remind the House that that scheme was most strenuously opposed, yet few would be heard to say now, or for some
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years past, that Kingsway was not a successful road improvement scheme. I do not wish to revive old controversies, but I cannot help reflecting this afternoon upon the opposition which the construction of Waterloo Bridge met with between the wars—an opposition which, unhappily, was shared by the Government of the day, with the result that the London County Council were punished for carrying out their statutory duty and responsibility to the tune of loss of grant of some £220,000. The demolition of the old bridge, which was opposed among others by the Royal Fine Art Commission, was of course part of a larger scheme to embrace the north and south approaches; and if those approaches be taken into account with the bridge, probably that scheme would be larger in extent and cost than the present scheme in respect of Marble Arch and Hyde Park Corner. But who would say now that the London County Council were wrong? They have constructed what I think may be described, with due modesty, as one of the most beautiful bridges in this country, and it may well be in Europe. It is a pity that the scheme for the improvement of the northern approach at Wellington Street has not proceeded.
I well recall agreeing with the then Minister of Transport as far back as 1939, after a long tussle, the rate of grant which we should receive in respect of that scheme which even then was a most expensive scheme, having regard to the property which would have to be acquired. Now the powers have been obtained and a fair measure of the property has been acquired. I understand that that scheme is one of those receiving the attention of the Committee presided over by the Parliamentary Secretary to the Ministry of Transport and Civil Aviation as to priorities in respect of London street improvements. I hope that it may earn a reasonable and respectable priority. As regards the approach from the south the Elephant and Castle scheme is in hand and I gather that the first half is proceeding satisfactorily. May I say here, as it were in parenthesis, that London is not under-bridged? The trouble with London's bridges is the bad approaches to them, which render nugatory much of the facility which the bridge has for traffic; and informed opinion is satisfied that if we could improve the approaches

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to Waterloo Bridge it would result in a considerable relief of congestion both on the north and on the south of that bridge.
One of the chief objections to the present scheme at Hyde Park Corner is the encroachment on the Royal Parks. No one would desire to encroach upon any park or open space, whether Royal or otherwise, if it were avoidable. No one would wish to take more than is absolutely essential. I think those persons responsible for designing this scheme have really achieved a great success in being able so to fashion it, if I may use that phrase, that no more than about 4½ acres net will be taken from the Royal Parks. It is regrettable that anything should be taken, but that is a fairly minimum amount. As my noble friend Lord Silkin said yesterday, offset against that, and quite near to it, is the fact that the London County Council has acquired Holland Park, an area of 38 acres. I am always encouraged when I remember that I was largely instrumental in advising the London County Council to acquire that open space just before I resigned from the Council in 1947. I will say, quite frankly, that I could have wished that that 38 acres had been in some other part of London, notably in the congested boroughs of the East End and South-East London, but one has to take the land for open space where it is available. But as I say, I am very proud that the London County Council, after much negotiation, succeeded in acquiring that open space for the benefit for all time of the people of London.
The London County Council propose to spend some £500,000 on the lay-out of the reservation and islands, on the advice—and I stress this—of the Royal Fine Art Commission. As has been said, the East Carriage Drive is now a traffic route carrying an enormous volume of cars and similar vehicles. The scheme does nothing more in that respect than regularise and control the position, as it will also regularise traffic through Park Lane; and unless that is done we may easily find that traffic passing, as it now does, along the East Carriage Drive and Park Lane will come to something near a standstill.
Then the question of the destruction of trees has been raised in opposition. No sensible person would wish to destroy trees, but they are not sacrosanct, as
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Lord Blackford said yesterday—indeed, additional trees can be planted. Many of the local authorities in London have for years been planting additional trees along their highways and their streets. The matter was initiated by Dr. Salter in Bermondsey as far back as 1920. Dr. Salter was a fine citizen of London, devoted to Bermondsey, and when he became Mayor of Bermondsey he instituted a policy of planting trees in its dingy streets. Furthermore, as the Council at that time had no power to spend money on the planting of trees, Dr. Salter paid for them out of his own pocket. Now that the authorities have that power, they have over the past twenty years planted quite a number of trees. My Lords, desirable and beautiful as are trees, we cannot live by trees alone.
Questions have been raised about why we are retaining Hamilton Place in the scheme as the main southbound traffic route into Hyde Park Corner. That matter has been very carefully considered on more than one occasion. The essence of the Hyde Park Corner problem is that a considerable proportion of the total traffic wishes to turn in one direction or another, and fly-overs and underpasses are of no direct value to these traffic streams. Of the various methods of catering for them, roundabout operation in which interweaving of different streams is facilitated was agreed by all those concerned to be the most satisfactory. On this basis, if "weaving" for southbound traffic from Hamilton Place were to be provided, the central island at Hyde Park Corner would have to be much larger and the underpass longer, resulting in a much less favourable time factor; and, what is not less important, more of Green Park would be absorbed. If the island were kept to the present size, there would be a direct traffic cut, as at present, at Hamilton Place, and this would require signal control at this corner of the central island. This would greatly reduce the traffic capacity of the intersection and would increase delays. Another disadvantage would be that Hamilton Place would become of inadequate width, and in these circumstances the widening would have been very costly. I think that is a satisfactory answer to the quite understandable point as to what function Hamilton Place will serve in the reconstructed area.

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I am sure that we are all pleased that the Government ultimately accepted the necessity for a four-lane underpass, which I believe was the original suggestion of the London County Council. It is true that it will cost £750,000 more, but my own view is that that will be money well spent; especially as we gather from the statement by the Minister in another place that the two-lane underpass would have provided for no more than a 40 per cent. reserve capacity over the next ten to fifteen years, whereas in another connection the Ministry have told local authorities to make provision in their plans for a 75 per cent. increase in traffic within the next ten to fifteen years. I find it difficult to understand why the Minister should have first decided on no more than a two-lane underpass. One can only hope that the four-lane provision will be adequate for the needs of the future. My noble friend, Lord Lucas of Chilworth, raised yesterday the question of congestion as a consequence of increased traffic from the underpass into Sloane Street, Brompton Road and Kensington. He also asked whether it would create a bottleneck in Knightsbridge. I understand that the interim improvement scheme at Knightsbridge will take care of this increase in traffic.
We are informed that the scheme is acceptable to the Westminster City Council, to the Paddington Borough Council and to the St. Marylebone Borough Council, and that the various Ministers concerned have also approved. It is the case that the Royal Fine Art Commission are opposed to the whole scheme in general because of its encroachment on the Royal Parks, notwithstanding that the extent of that encroachment is no more than 4·4 acres. I regret this opposition. One has some respect for the Royal Fine Art Commission; but, after all, they are not an arbitration court: their decision is not necessarily final. The final decision must rest with the authorities charged with the responsibilty of dealing with matters of this kind, subject always, of course, to the approval and consent of Parliament. I am pleased to observe that the County Council and the Commission will be working together in connection with the layout of the strip and of the island, and no doubt in respect of other elements of amenity associated with the scheme.
1022
My noble friend Lord Lucas of Chilworth criticised—I thought perhaps a little unfairly—the London Transport Executive because of their decision that buses shall not use the underpass. First of all, one must bear in mind that the London Transport Executive are charged by Her Majesty's Government to provide a convenient, safe and speedy service of passenger transport. There is nothing to justify the idea that London Transport is against underpasses. I could point to scores of places where it would be of great advantage to London Transport if there were underpasses. But they must have regard to the facts of the case. Perhaps your Lordships will care to hear what they are.
London Transport have been forced to the conclusion that buses cannot use the underpass because if they were to do so it would be necessary to move bus stops in Knightsbridge so far away from the main traffic objective—Hyde Park Corner itself—that the public would be gravely inconvenienced. One cannot dispose of the demand reasonably to satisfy public convenience as regards a passenger transport service. Moreover, London Transport are not able themselves to determine where a bus stop shall be. Bus stops cannot be put just anywhere, and the location of each bus stop must be approved finally by the Metropolitan Police.
In any case, not all buses could use the underpass, even if that were justified on traffic grounds. There are only five routes—Numbers 9, 14, 19, 22 and 96—which traverse the crossing from east to west to and from Piccadilly and Knightsbridge. The others either turn or cross from north to south. If the buses on those five routes were to be put through the underpass it would be necessary for the stopping places for eastbound and westbound buses now located in close proximity to the intersection itself, in Knightsbridge, to be moved about 400 yards west to about the location of the existing stops opposite Wilton Place—to which the police already object because of the narrowness of the road.
In effect, therefore, the Hyde Park Corner stops would have to be eliminated, and the eastbound stops in Piccadilly which are shared with other services would require to be moved a further distance east, still further away

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from the traffic objective, so as to give adequate space for buses to cross the traffic stream on emerging from the ramped exit of the underpass. It is important to appreciate that much of the passenger traffic at Hyde Park Corner is interchange traffic between bus route and bus route and between road and underground. So far as the five routes in question are concerned, this interchange traffic would be completely disrupted, to the continuing serious inconvenience of the public.
According to the census of 1956 carried out by the Metropolitan Polic, 91,000 vehicles proceed through Hyde Park Corner in twelve hours. Of those 91,000 vehicles no more than 7,602 are buses; that is 8 per cent. Coaches total 1,213–1 per cent—and other traffic, 82,185, being 91 per cent. The buses on the five routes that could be sent via the underpass account for about one quarter of the total bus traffic, and no more than 2 per cent. of the total traffic. No coaches could use the underpass because the routes run along Piccadilly.
I recall that my noble friend, Lord Lucas of Chilworth, asked: "Why should not London Transport re-route its buses?" It is not as simple as that. It is not simply a question of changing the routes to Hyde Park Corner. Other routes and services reaching far away to other districts of London would have to be adjusted, and that would almost certainly create more congestion in those parts even though it might lead to less congestion at Hyde Park Corner. For those reasons I believe your Lordships will agree that London Transport are perfectly entitled to take the view that buses should not proceed to use the underpass.
May I conclude by saying that the London County Council, despite its critics—and it has many (and probably deserves some of them)—is not a body composed of Philistines. It has as much regard for preserving open spaces in London as any other body of persons, whether in London or outside; and it has given outward and visible proof of that. At the present time the London County Council maintains 133 parks or open spaces. The noble Marquess, Lord Aberdeen and Temair, was for some years the Chairman of the Parks Committee and knows with what care and concern the London
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County Council in those days protected, improved and beautified the open spaces within its charge and mostly within its ownership; and it is no less concerned in these days.
The London County Council spends upwards of £1¾ million a year on maintaining and providing open spaces and also providing for suitable entertainments in those open spaces. The problem of London's open spaces is not so much that we are, in totality, short of them but that our open spaces are so badly distributed. That is the real problem of London. In the County of London Plan it was suggested, I think with the assent of most persons who were informed, that it would be a modest provision to have 4½ acres of open space per 1,000 of the population. The County of London, on that basis, is short of some 6,218 acres; and even on the basis of 2½ acres per 1,000 of the population there is a deficiency of about 3,000 acres. In some areas (and I am not saying this in a critical sense), the area is some 7 acres or 6 acres or 5 acres per 1,000 of the population; whereas in Shoreditch it is less than half an acre per 1,000 of the population; in Southwark it is even less; in Finsbury it is less; and in Islington also it is less.
It is in those areas that we need additional open space, which would, I readily admit, be no justification for encroaching upon existing open spaces. I raise these facts merely to show what the position is as regards open spaces and to make this point: that the residents of those areas are without adequate open space and have little open space at all. I believe I am right in saying that in Shoreditch almost all the open space available consists of disused burial grounds or graveyards. It means that the people who live in those districts should have good transport communications to get to the places where there are open spaces, which is another argument in favour of this important scheme. Apart from the parks being great natural "lungs", they are also places to which people wish to go to get the repose which comes from them and the entertainment which is provided; and this scheme will make the approaches and access to Hyde Park much more safe, much more convenient and much more speedy. I think that this improvement will become a

1025
great amenity as well as a great traffic improvement, and I hope that your Lordships will give the Bill your unanimous support.
EARL HOWE: My Lords, before the noble Lord sits down, could he tell us what is the view of London Transport with regard to the treatment of Marble Arch and Park Lane itself?
LORD LATHAM: I am sorry, my Lords, I cannot. I am no longer officially associated with London Transport and therefore I am unable to give that information. But if the noble Earl will let me have a note of the point I will ascertain what the views of London Transport may be upon it.
5.3 p.m.
LORD MANCROFT: My Lords, no Victorian Duchess with her carriage and pair on a Sunday morning could have driven round Hyde Park more conscientiously or more argumentatively than your Lordships on the Second Reading of this Bill. The noble Lord, Lord Latham, has driven further afield still; and I do not propose to traverse the ground again. But I should like, briefly, to answer one or two points which have been specifically put to me.
A point which many of your Lordships have raised is the question of the bus stops at Hyde Park Corner, and that, fortunately, has been answered for me, most accurately, by the noble Lord, Lord Latham. That is the answer. Several of your Lordships have asked about the timetable of this scheme and have criticised the length of time it is proposed to spend upon it. Her Majesty's Government agree that once Parliament have passed the Bill the scheme should be carried out with all possible speed. The London County Council intend to do so; but they and the police will have to work out a very careful programme in order to keep traffic moving throughout the whole period. My right honourable friend the Minister of Transport has asked to he kept informed of the timetable for all stages of the work.
Your Lordships have on more than one occasion mentioned underpasses at Brussels and in other Continental cities. I am certain that those comparisons are a little misleading. Here we have at Hyde Park Corner one of the busiest junctions in Europe, and the traffic must
1026
be kept going all the time, in an area where there are practically no suitable alternative routes. I think it is clear that it will not be possible to attack the whole scheme at once and that it will have to be carefully phased in stages. And, unlike some of these places abroad where underpasses have been successfully dug, you cannot just go digging down under Hyde Park Corner at random. If you look for the first time at a map of what goes on underneath Hyde Park Corner you will be amazed to see how much goes on. If you dig to the right you are liable to come out at Kings' Scholars' Pond Sewer; if you dig to the left you are liable to put half the telephones in South-West London out of action; if you dig too far down you are liable to cut into the Piccadilly Tube; and if you stay too near the surface you are liable to get your ears boxed by the noble Lord, Lord Conesford. It is a very difficult operation and one which will require expert phasing.
The noble Lord, Lord Lucas of Chilworth (who asked me to apologise for the fact that he cannot be present), raised the question of notice to owners of property. They are mostly concerned with the shops on the north side of the west end of the underpass. We give under the Bill fourteen days' notice, and he thinks that is too short. I think, actually, that a period of x days would have been all right to give, because this is a nominal period. Everybody knows about this scheme; there has been consultation, and there will be consultation; and I have not heard of any complaints about it. I agree that we do not want to appear to do injustice and certainly not to do injustice. If the noble Lord has had any complaints I shall be grateful to know of them. In the meantime. I will look at the matter again, and if a further period will meet his difficulty I shall be pleased to put down an Amendment to that effect. But I must emphasise that we have not received any petitions against the provisions, although we do not set enormous store by the figure which actually appears in the Bill.
I wish I could help the noble Lord, Lord Derwent, about his magnificent plane tree. I should have liked it to go down to history with King Charles's Oak and Washington's cherry tree; but the engineers tell me—and I will check on this point—that, if the tree he refers to is

1027
the one I have in mind, at the west end of the southern Apsley Link, it is an enormous tree with very big roots, and if the island is moved to preserve that tree it will cause chaos in the traffic pattern at that place. But I will not ask the noble Lord to accept that; I will go and look at the tree with the experts, and if I can meet the noble Lord's point I shall be happy to do so. I hope that I have made it clear to your Lordships that I deplore the loss of these trees just as much as your Lordships do.
As to car parking, I may say that the noble Earl, Lord Attlee, raised this matter some time ago in a supplementary question. I told him then, and I repeat it, that we intend, if it is possible (and I think it will be possible), to get as many cars as possible out of the Park when this scheme is in operation.
EARL HOWE: My Lords, if the noble Lord succeeds in getting as many cars out of the Park as possible, could he tall us where those cars will go?
LORD MANCROFT: First I will tell the noble Earl where they will not go. They will not go in car parks built on or under Rotten Row. I am sorry not to support the noble Lord, Lord Blackford, on that point, but it is one of the few things about which I could not agree with him. There has been a question, about which we have talked on more than one occasion, of a car park under the open space at the north-east end of Hyde Park. That could be done without affecting trees or amenities at all. This may be some time ahead, however, and it is a rather nebulous suggestion at the moment, but we may one day have to consider it. In the meantime, when the noble Earl, Lord Howe, asks where they can go, I would only ask him whether we should go over again all the argument we had during the passage of the Road Traffic Act, on parking meters. I very much hope that cars will not come into London in such large numbers. When the new garages have been built—and they are being built—and when the existing car parks are full—and they are not full—and when the cars have been removed from outside the South side of Curzon Street and the West side of Montagu Square, I think that we may still need to have another look at this matter, as the noble Earl knows full well.
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The last point I want to deal with is the major one: will the scheme work? This is not a question of black and white, of one scheme that is infallible and another that cannot possibly work. Therefore, I do not argue on this point with the noble Lord, Lord Conesford, who said that his expert advice was that it will not work. I should like to point out that it is not correct to say that the Road Research Laboratory have not approved the proposed scheme. They were represented on the Working Party on whose Report the present scheme is based, and their representative signed that Report. Since then they have also favoured a four-lane underpass, rather than one providing two lanes only. With regard to the surface roundabout at Hyde Park Corner, the police, engineers of the Ministry of Transport and the London County Council have studied the traffic at this important centre over many years. A scheme of "channelisation" (as the horrible word is) with police control was in existence before the conversion to the existing layout in 1925, and the existing lay-out was a considerable improvement.
We have studied carefully the criticisms of the foreign experts and we respect them. We have compared our own conditions with the very different conditions in which that criticism was formed. A large number of experts have studied this problem for a great length of time. They may not have hit upon the perfect solution, but they have hit upon a solution which the Government are convinced will work. It may not be the Utopian solution. It may have one or two of the faults to which noble Lords have drawn attention, but I think that the time has come when we must make up our minds that something has to be done.
I concede the value of the arguments of the noble Lord, Lord Conesford (I listened carefully to his speech), particularly that any encroachment upon the Royal Parks should be examined carefully. The noble Lord thinks that this is the thin edge of the wedge. The British Constitution is stuck full of wedges, which the common sense of the public has never yet driven home. I suggest that the noble Lord's fears will not be fulfilled. Indeed, I hope that his anxieties will prove false. I sympathise with the regret he has expressed at the loss of the trees—no Member of your Lordships' House has done anything else. But there is no

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other alternative that we can see. If we accede to the request of the noble Lord to reject this Bill, we go back to "Square 1", and nothing will be done for years and years.
Here at last we have a major scheme. The noble Lord, Lord Gisborough, asked how far ahead we were thinking. We are thinking as far ahead as we possibly can. That is why we have a four-lane underpass in the plan. We do not guarantee that the scheme will do everything that we expect of it, but I hope that it will. The experts advise us that it will. I beg your Lordships not to reject the scheme now. Here at last we have the chance not only of relieving the traffic congestion at Hyde Park Corner and Marble Arch but also of dealing, to some extent, with the problem that spreads right out to Alexandra Gate and Lancaster Gate. We have a chance of improving the amenities of Hyde Park Corner and Marble Arch and of relieving the whole circulation of traffic in this part of London. We have to pay the price of the encroachment on the Royal Parks and the loss of a number of trees. We deplore that bitterly, but this is a balance sheet, which we have had to
Resolved in the affirmative, and Bill read 2a accordingly, and referred to a Select Committee.
weigh up carefully. Having listened to everything that has been said, and recognising that the weight of opinion has been chiefly on the side of the Bill, I have come to the conclusion that I can confidently advise noble Lords who love London, and who wish to see its amenities increased, the circulation of traffic improved and the benefits to its people enlarged, to give the Bill a Second Reading.
THE MARQUESS OF ABERDEEN AND, TEMAIR: My Lords, having been Chairman of the first Town Planning Committee of the London County Council, may I say that this Bill is an extremely important one and ought to receive the support of every noble Lord? I thank the noble Lord opposite for mentioning my name. This Bill is one of the most important from London's point of view. It will help to prevent so many of the accidents that now take place. I heartily support the Bill.
On Question, Whether the Bill shall be now read 2a?
Their Lordships divided: Contents 38; Not-Contents, 4.

CONTENTS

Kilmuir, V. (L. Chancellor.)

Swinton, E.

Henderson, L.

Kinnaird, L.

Hailsham, V. (L. President.)

Alexander of Hillsborough,

Latham, L.

Bridgeman, V.

Lawson, L.

Aberdeen and Temair, M.

Colville of Culross, V

Mancroft, L.

Lansdowne, M. [Teller.]

Margesson, V.

Merthyr, L.

Mills, L.

Albemarle, E.

Aberdare, L.

Pakenham, L.

Bathurst, E.

Ashton of Hyde, L.

Sandford, L.

Goaford, E.

Chesham, L. [Teller.]

Silkin, L.

Home, E.

Derwent, L.

Somers, L.

Howe, E.

Dynevor, L.

Teynham, L.

Morley, E.

Glyn, L.

Tweedsmuir, L.

Perth, E.

Greenhill, L.

Williams, L.

Winster, L.

NOT-CONTENTS

Dundee, E.

Conesford, L. [Teller.]

St. Oswald, L.

Gisborough, L. [Teller.]

ROYAL SOCIETY FOR THE PREVENTION OF CRUELTY TO ANIMALS BILL
Returned from the Commons with the Amendments agreed to.
CLERGY ORPHAN CORPORATION BILL [H.L.]
  LONDON COUNTY COUNCIL (GENERAL POWERS) BILL [H.L.]
  Returned from the Commons, agreed to with Amendments: the said Amendments considered and agreed to.
PIER AND HARBOUR PROVISIONAL ORDER (MARGATE) BILL
Reported, without amendment, and recommitted to a Committee of the Whole House.

CITY OF LONDON (VARIOUS POWERS) BILL [H.L.]
Reported, with Amendments.
House adjourned at twenty-five minutes past five o'clock.