HC Deb 16 November 1955 vol 546 cc475-748

Question again proposed, That the words proposed to be left out stand part of the Clause.

Mr. McKibbin

The men about whom I was speaking do not qualify for the cars which are rightly supplied free by the Government to limbless ex-Service men who are disabled in the highest degree. I am not asking for charity for these men. I am merely asking for this concession because they have had the courage and integrity to overcome their disability and also have the ability to continue in work, which enables them to earn enough to purchase a car at a reasonable price. If the concession is not granted, many of them may have to give up the employment which enables them to keep their families and themselves and will have to apply for National Assistance, which will cost the country much more than the loss in Purchase Tax if the concession is granted.

The average age of 1914–18 limbless ex-Service men is now 64. As these men get older, it becomes much more difficult for them to stand about in queues and go to their work. One man told me that he is so exhausted after travelling to and from work every day and standing in queues that he has to go to bed over the week-end in order to be able to go to his employment on Monday.

I suggest to the Chancellor that Purchase Tax at 60 per cent. might make all the difference between a man purchasing a new car, which would run comparatively free from trouble for two or three years, and his being landed with a secondhand car. Anyone with experience of cheap second-hand cars will know that they have to have the engines rebored, new tyres and new batteries, and will appreciate how very expensive a "cheap" second-hand car can be.

The concession would cost the Government little or nothing. The men would get no grant for petrol, and would have to pay the full price, and the duty on the petrol could be offset against the loss in Purchase Tax resulting from the concession. I earnestly appeal to the Chancellor to grant this reasonable concession, for the cost would be infinitesimal, whereas it would be a matter of great importance to the individuals. We ought to have in mind the fact that these men were wounded in our service, and, with advancing years, are suffering from increased fatigue and loss of activity.

Mr. J. T. Price (Westhoughton)

I should like to bring the Economic Secretary back to an extremely important matter which he very gracefully, if that is the right word to use, avoided when he last spoke.

My hon. Friend the Member for Stechford (Mr. Roy Jenkins) earlier referred briefly to the relationship between the Purchase Tax, which it is now proposed to increase to 60 per cent., on motor cars and the initial and depreciation allowances under present fiscal arrangements. The Economic Secretary did not pay the attention to the problem which the Amendment demanded.

Mr. R. A. Butler

Might I raise a point of order, Sir Rhys? We are somewhat perplexed on this side of the Committee. If we are to go into questions of the investment and initial allowances and other matters which have been mentioned, which are not included in the Amendment, I do not know how we shall keep wthin the rules of order or the terms of the Amendment. If I am expected to answer the hon. Member—I was proposing to attempt to join in the debate later if I caught your eye—I should be rather foxed if I did not know whether I was permitted to speak on those points or not.

The Deputy-Chairman

I have great sympathy with the right hon. Gentleman. I tried earlier on to curb the extent of the debates, but it is very difficult in some cases to keep strictly within the scope of Amendments. I do not think that hon. Members should range over the whole subject of Purchase Tax on every Amendment.

Mr. H. Wilson

Further to that point of order, Sir Rhys. We all understand that we are debating the question of the increase in Purchase Tax from 50 per cent. to 60 per cent. on a very wide range of goods, even if so far the debate has been rather narrowly confined in the main to motor cars. One hopes that in the next hour or two the debate may widen to embrace some of the other items which are covered by the Purchase Tax proposals. I presume that we shall be in order in doing that. Surely my hon. Friend is in order to asking questions about initial allowances, at any rate as long as he does not go too wide or take too long in doing so, in that it is very difficult for the Committee to make up its mind whether an increase in Purchase Tax from 50 per cent. to 60 per cent. is the right to increase exports of motor cars or whether there might not be some other perhaps simpler method which would obviate the necessity for the increase in Purchase Tax, which some of my hon. Friends have suggested may do damage to industry.

The Deputy-Chairman

It is difficult to draw a line as to how far one should range, but the range on nearly all the Amendments has really been too wide.

Mr. Price

I am grateful to the Chancellor for his intervention, and to you, Sir Rhys. I think, it is proper that hon. Members on both sides of the Committee should have a clear picture of how far they can go within the rules of order on these Amendments. I have not yet reached the point of indicating the reasons why I am supporting the Amendment and am introducing the question of allowances on the lines first mentioned by my hon. Friend the Member for Stechford.

I submit that the Chancellor's case for increased Purchase Tax in his Budget and in the Finance Bill rests entirely on his assumption that the increases will be an important step towards arresting inflation. My remarks were uttered from the point of view that I do not believe that an increase of £15 million in motor car taxation will have any effect whatever in arresting inflation and deflecting motor cars into the export trade.

What are the facts? I pay due respect to the Chancellor for what he said in his Budget speech about the pace of inflation and the concern which he, with his great responsibility, is bound to feel about it.

The Deputy-Chairman

I have no doubt that inflation is involved here, but I hope we shall not have the general argument on inflation on every one of the Amendments.

Mr. Ede (South Shields)

But they all tend to inflation.

Mr. Price

I will try to keep within the rules of order on this point, Sir Rhys, but I think I am legitimately entitled to remind the Chancellor that, if the Committee and the House are not satisfied that his proposals will have the effect which he claims, then we are entitled to debate not only the figures and mathematics of the situation but the basic ideas upon which his case rests.

On 22nd October, Economist said that during 1955 the motor output had been booming more than the boom itself. It said it had boomed to such an extent that during the last year more than a million vehicles of various descriptions had been turned out from British factories. I would not be so churlish as to deny that great enterprise has been shown by motor manufacturers not only in servicing the home market, which has been rather over-serviced, but in developing the export trade.

I refuse to accent the case presented by the Chancellor and the Economic Secretary that the tax will have no material effect upon the output of motor cars available for export. Out of the rather more than one million motor cars produced in 1954, 917,000 were produced by the "Big Four" companies and the marginal firms' output brought the total to more than a million. I am prepared to assume from figures published in the Trade and Navigation Returns and the Abstract of Statistics that during the past twelve months about 700,000 vehicles have come on to the home market. That is confirmed by the fact that 728,000 new registrations were entered in the Board of Trade in the last twelve months.

If one takes 560,000 vehicles out of the 700,000 as a very reasonable estimate of what might be chargeable in business accounts in the estimation of Income Tax liabilities and Profits Tax liabilities to the Treasury, one reaches the conclusion that if the average price of a vehicle is about £500—that figure can be checked with official statistics—approximately £280 million worth of motor cars were sold in the home market last year to business firms who were entitled to set off their cost as business expenses against liability to tax.

One of my hon. Friends said that 40 per cent. initial allowance would be chargeable to the Government as against the Purchase Tax on these vehicles which the Government would receive. I would not go so far as to say that. The Chancellor will probably agree that in the first year the initial allowance on the vehicle will be 20 per cent., which, with 10 per cent. depreciation, makes 30 per cent. in all. However, many hon. Members who have experience of this business will know that when a motor car is kept for fourteen or fifteen months, going into the second taxation year, there is another 10 per cent. depreciation, making 40 per cent. in all.

With what I estimate to be the British output of cars sold to British firms last year, one reaches the situation that 30 per cent. of the total value of the cars would be £84 million in a year and if one takes 40 per cent., it would be £112 million as against the extra £15 million taxation which the Chancellor estimates he will get. This is a very serious state of affairs and has become endemic in British industry today, because in the fiscal system which we are operating in British industry when even a minor executive is engaged he has to be offered a motor car.

The Deputy-Chairman

To discuss the fiscal system is beyond the scope of the Amendment.

Mr. Price

I will go back to mathematics if I cannot discuss principles, Sir Rhys. I am bound to bow to your Ruling, so I will go back to figures, although I had not wanted to bore the Committee with statistics.

This is a valid line of country which has not been properly explored and it is most important that the Committee should consider it. We are dealing with more than £100 million of public finance and if we are not careful in the Committee to have proper and prudent regard for public finance, on which the Chancellor himself claims to be a purist, and are to confine our debates to merely high falutin' abstractions, we shall not do the job which our constituents sent us here to do.

6.15 p.m.

Purchase Tax has been increased in this range of goods to 60 per cent. and in the trade there is great consternation and objection, but I am not attacking the tax from that angle. The tax will have no effect whatever in arresting manufacture of motor cars for the home market. It is a massive deception of the people to fiddle about and put a tax on pots and pans, brushes and brooms and all the little things that will annoy every housewife in the country and, at the same time, allow this racket to continue and to deceive people that they will get something from taxation.

This is a cumulative process. The initial allowance of 30 or 40 per cent. does not stop at one infliction. It is perpetuated year by year by a very large number of companies. The practice in the trade is that when new vehicles are ordered there is generally an arrangement with a distributing agency that after twelve or fifteen months the cars will go into and form the basis of the second-hand market. In the next year, the same initial allowances are granted all over again. This is a very serious matter that warrants closer examination, and before we on this side of the Committee are satisfied we will strongly resist the Clause to which we have put the Amendment.

Mr. Douglas Glover (Ormskirk)

I am sure that the hon. Member for Westhoughton (Mr. J. T. Price) would not want to leave a wrong impression with the Committee. If a car is sold at the end of fifteen months, the price paid for the car is ploughed back—

The Deputy-Chairman

I do not think that that question is in order.

Mr. H. Wilson

It may be convenient if I intervene at this stage, because so far no one has spoken from the Opposition Front Bench and the Chancellor will probably agree that, although no one would say we are at the beginning of the end in this debate, we are, to coin a phrase, at the end of the beginning. It has been a somewhat discontinuous debate for reasons of which the Committee will be aware. Some very important points have been raised and on a number we have had an answer from the Economic Secretary.

The main characteristic of the debate—indeed, the main characteristic of the tax range which we are now debating—is that this afternoon we have been away from the essentials, the necessities that we debated for a rather short time last night. We have been in the range of what some hon. Members have called luxuries and others have called conventional necessities. I rather like the phrase used by the hon. Member for Basingstoke (Mr. Freeth), who spoke an hour ago, although we have not seen much of him since, when he referred to "comforts." A number of the things which we are discussing may be regarded as comforts and I hope that when the Chancellor replies he will pay very careful attention to what was said by his hon. Friend the Member for Belfast, East (Mr. McKibbin), who put—quite apart from the interruptions—. some rather important points.

My hon. Friend the Member for Stechford (Mr. Roy Jenkins) began the debate with what I am sure all hon. Members will agree was a very fine speech. If I have any criticism of him—and I am sure my hon. Friend will take this in the spirit in which it is meant—it is that I thought he was rather narrow in his attack on the situation. My hon. Friend referred mainly to cars, as have a number of my hon. Friends, but I am sure that he would have liked to have taken a much wider view of the subject, and given equal attention to a number of other very essential items covered by this range of Purchase Tax. I think that my hon. Friend showed great forbearance and consideration to the Chancellor in confining his remarks to so narrow an aspect of the problem.

My hon. Friend made one comment which I think must have been in the minds of, at any rate, all hon. Members on this side of the Committee, when he said that we must balance every increase in Purchase Tax which we are now debating with the remissions of Income Tax given by the Chancellor last April. I am bound to say that that does affect the attitude of hon. Members on this side of the Committee when they consider whether these increases in Purchase Tax are necessary.

A great deal of the time we have so far spent on this Amendment—there is plenty of time to remedy this lack of balance—has been devoted to debating the Purchase Tax on cars and the wider problems of the motor car industry. I do not wish to go very deeply into the problems of the motor car industry. That has been done so very well by a number of my hon. Friends, including the hon. Member for Northfield (Mr. Chapman) the hon. Member for Edmonton (Mr. Albu), and, in a remarkable speech, my hon. Friend the Member for Westhoughton (Mr. J. T. Price), in addition to my hon. Friend for Stechford.

A point was made by the hon. Member for Basingstoke which, I think, calls for a reply. He said that we on this side of the Committee supported the increase in the tax on cars which was included in the Budget introduced by my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) in 1951. The hon. Gentleman said that even though we must have realised that the cuts in the Australian import of cars were at that time imminent, yet we nevertheless supported the increase in the tax. The hon. Gentleman was very wide of the mark. He was not a Member of this House at that time, and I have not checked the details of this or the exact timing; but it was my impression that the import cuts took place in March, 1952, or thereabouts, almost twelve months after the Budget introduced by my right hon. Friend on 10th April, 1951. Therefore, the two situations are not in any sense parallel.

Today, the Committee is considering this proposal to increase Purchase Tax on cars from 50 per cent. to 60 per cent. at the very moment when there has been an announcement about a restriction on imports not only into Australia, but New Zealand as well. From what was said by the Economic Secretary in his, if I may say so, very helpful speech—helpful to this side of the Committee—I think it clear that one of the things that the Government had in mind in proposing this increase in Purchase Tax was the hope that it would drive more into exports, in general, increase exports. We may take it, since so much of the right hon. Gentleman's speech was related to cars, that he was referring to the effect on the export of cars as well as other goods. I presume we are right in assuming that from what he said.

The right hon. Gentleman gave some figures, some estimates of the yield from cars, which we might expect on the basis of Customs and Excise estimates as a result of the increase in tax from 50 per cent. to 60 per cent. It would be helpful if the Chancellor would give the Committee an indication of the basis on which those estimates were made. My hon. Friend the Member for Jarrow (Mr. Fernyhough) tried to get that information from the Economic Secretary, who did not have it readily to hand at the time. But if the Treasury experts made estimates of the yield from the increase in the rate of tax, they must, in the course of doing so, have made some assumptions about the proportions in which the motor car output is to be divided between the home and the export trade in the year that lies ahead—indeed, in the eighteen months that lie ahead.

I hope that the Chancellor will tell us what was estimated. Was it estimated that one result would be a further diversion to exports, or was it assumed that the increase in the Purchase Tax would not be sufficient to counteract the effect of further factors which are reducing our export trade in cars at the present time? We should like to know how much diversion to exports was assumed and how much would be due to the increase in Purchase Tax.

The Economic Secretary referred to the Chairman's statement made by Sir Leonard Lord at the annual meeting of the British Motor Corporation. The right hon. Gentleman said—I think he was quoting Sir Leonard—that the intention was to produce 2,000 more cars per week next year than had been produced this year. I think it important to know—perhaps the Chancellor or the Economic Secretary can tell us—what will happen to the 2,000 additional cars. Is it intended that there shall be an increase in exports, or will they all come on to the home market? If they come on to the home market, it would certainly improve the revenue position for the Chancellor, but it would also add to the congestion on our roads, and perhaps endanger our economic situation in other ways.

I suggest that it is important that the Chancellor give us some views about this proportion between home market and export market. At present, the motor car industry is a very heavy exporter and is earning some valuable foreign exchange, though not as many dollars as it was formally earning. At the same time, it is a very heavy consumer of dollar raw material. A couple of weeks ago we had figures given by the President of the Board of Trade in answer to a Question from my hon. Friend the Member for Rugby (Mr. J. Johnson). If I remember the figures correctly—the Chancellor will put me right if I do not—the President said on that occasion that we were spending about 59 million dollars a year on imported sheet steel. A great proportion of that must be consumed by the motor car industry, though the President did not have the remotest idea of how much. If that be the position, it is relevant to this Amendment to know what proportion of the cars to be produced out of this quantity of sheet steel—or perhaps out of an increased import of sheet steel, we do not know—will be diverted to export as a result of the proposal at present before the Committee, namely, an increase in the Purchase Tax on cars from 50 per cent. to 60 per cent.

We on this side of the Committee are very doubtful whether this proposed increase in the Purchase Tax will do the trick. I am sure that I should be ruled out of order were I to indicate to the Chancellor all the measures open to him by which he might ensure that increase in exports which hon. Members on both sides of the Committee desire to see. I have indicated one or two in the past, particularly in relating the sheet steel allocation to this question, but I do not propose to pursue this matter any further because, as I say, I am sure that I should be out of order were I to do so.

We on this side of the Committee who are not pursuing that kind of argument, are, I am bound to say, interpreting the Amendment extremely narrowly. We are conducting this debate within very narrow limits, Major Anstruther-Gray, as I tried to suggest to your predecessor in the Chair a few moments ago. Before they decide whether it is right to increase the Purchase Tax from 50 per cent. to 60 per cent. it is important that hon. Members should know whether any other measure might be more effective and achieve the same end more simply. I believe that if the Government sent for the motor car manufacturers and said that their continued use of sheet steel depended on still further efforts in the export market, it might do the trick much more successfully than this proposed increase in Purchase Tax.

6.30 p.m.

Of course, it may be that the main purpose of this increase in Purchase Tax is not so much to provide a simple incentive to increase exports as a means of dealing with the inflationary situation. Again, my hon. Friends have had some difficulty in knowing how far they were in or out of order on the question of inflation. As I understand, it will be out of order to discuss the inflationary situation in general and the reasons for it, though that would form a very interesting debate, but it will be in order to discuss how far this Amendment might relieve the inflationary situation. Of course, it is certainly in order, I would suggest with respect, for us to discuss how far the Government's proposals are adding to the inflationary situation by pushing up prices. A number of my hon. Friends have dealt with that point.

Before I leave the subject of cars, I wish to refer to the question of commercial vehicles, because most of my hon. Friends have referred to private cars rather than to commercial vehicles. The Economist last week gave some figures of the increased production of commercial vehicles. I think it said that about 112,000 vehicles were sold on the home market in the first nine months of this year. If we look particularly at the small delivery vans weighing under 15 cwt., those dreadful little vehicles which contribute far more than anything else to the congestion in our big cities, and which are generally responsible for most of the bad driving, and, particularly, most of the bad parking—[HON. MEMBERS: "Oh."] I think that is the experience of most hon. Members in this Committee.

Mr. Kenneth Thompson (Liverpool, Walton)

It is not my experience.

Mr. Wilson

The hon. Gentleman, who has experience of running a business in Liverpool, requires a rather more slower-moving vehicle than the kind I have in mind, but I think it would be rather difficult for him to suggest that it is impossible to run a business without having one or more, or a considerable number, of the less than 15 cwt. commercial vehicles. In fact, if the figures given by the Economist are correct, there was an increase of 61 per cent. in the number of these vehicles delivered to the home market in the first nine months of this year compared with the same period last year. The hon. Gentleman has a constituency very near mine, and he made some extraordinary claims in the speeches which he made during the last Election, but even he does not suggest that industry is increasing at that rate.

Mr. Thompson

I would not have it thought for one moment that the speeches which I made during the General Election were other than those stimulated by the competition in the neighbourhood. The fact is that the growth in the use of these small commercial vehicles arises entirely from their attractiveness to business and commerce. They serve a vital and useful purpose in businesses of all kinds.

Mr. Wilson

I can quite understand the hon. Gentleman being under competitive pressure in the Merseyside area, especially when one considers the claims of his competitors in the Birmingham district.

It is recognised that these vehicles may be very convenient to a number of industries, but the Chancellor has been telling us for a long time now—I think he first made this point with some force on 26th July—that industries must review their investment programmes and must not spend their resources on everything handy, convenient and nice to have, but only on those things which are essential. That, surely, is the Chancellor's policy, and I would have hoped that the hon. Member for Walton (Mr. K. Thompson) would support him in that.

At a time when the Chancellor is making very severe cuts in investment elsewhere, it is essential that private industry equally, especially the less essential sectors of it—and there are many such sectors—should be extremely restrained in its call on the resources of the nation, especially those resources which involve imported sheet steel from the dollar area. That is why, although my right hon. and hon. Friends and I have many reservations about this part of the Bill, I personally do not regret an increase from 50 to 60 per cent. in Purchase Tax so far as the smaller commercial vehicles are concerned. I hope that the Chancellor will consider at some time, especially when he contemplates the road programmes necessary, the congestion in London, and all the rest of it, putting an even higher tax on these small commercial vehicles.

Turning from cars—and I have complained that perhaps we have spent too high a proportion of the debate on cars—

Mr. Glover

On a point of order. Could we have a little more quietness on the benches opposite? I am very interested in what the right hon. Gentleman is saying, and I should like to be able to hear what he is saying.

Mr. Wilson

I am grateful to the hon. Gentleman, who represents another neighbouring constituency to mine. Perhaps I might say that, so far as my hon. Friends are concerned, they all know what I am saying. Perhaps that explains why they are not listening as attentively as the hon. Gentleman.

Mr. Leslie Hale (Oldham, West)

I hope that by his gesture a moment ago my right hon. Friend was including the most responsible, well-behaved and quietest section of his hon. Friends.

Mr. Wilson

My hon. Friend will know that it is a little difficult to indicate by a gesture of that kind an area which does not include him.

Before I was interrupted, I was attempting to take the debate away from the subject of cars and commercial vehicles to other items included in this list, because cars, I think, represent only about 1 per cent. of the items covered. Radio and television sets have been mentioned by a number of hon. Members, and reference has been made to the 1951 Budget. In his speech, the hon. Member for Basingstoke seemed to think that there was something inconsistent about hon. Members on this side of the Committee increasing the tax on radio and television equipment in 1951 and yet being opposed to this increase today.

I suggest that there is certainly nothing inconsistent about that at all, because in the 1951 Budget, which was certainly a very tough Budget, my right hon. Friend made it perfectly clear that his reason for increasing Purchase Tax on these items was the fact that the home consumption of them was competing with the demands of the arms programme, particularly in the electronics industry, but also in respect to aircraft, tanks and other parts of the defence programme. I would remind the Committee, however, that, in that very same Budget, my right hon. Friend also removed Purchase Tax from a wide range of essential goods which the Chancellor of the Exchequer has put back into tax in this supplementary Budget.

There is one other item on which very little has been said, and I am sure that the Chancellor, and particularly the Economic Secretary, would not like it to be omitted from this debate. It is the item of gold and silverware. The Economic Secretary was very eloquent in 1951. when he asked the Chancellor to reduce the tax on gold and silverware. In due course, the Chancellor took steps in that direction, which he has continued to take this time. I should be out of order in going from one list to another, but there are a number of items now in the 50 per cent. range which go up to 60 per cent., and some of them are of considerable interest.

I am sure that the Economic Secretary will be concerned at the fact that the gold wedding ring which was selling at 5 guineas, of which Purchase Tax represented £1 4s., will now bear a tax of £1 9s. That means that it will now he selling at £5 10s., or, as usually happens when the retailers get a chance of putting up prices, at more than £5 10s.—probably at £5 12s. 6d. We have an increase there of 5s. or 7s. 6d. in the cost of a plain gold wedding ring which at present is selling at 5 guineas.

Here we have a situation in which the Government are not only making life almost impossible for the young married couple in respect of the mortgage payments if they buy a house, which the Government have suggested they should do, not only making it very costly in terms of equipping that house with furniture, bedding and all the rest, and not only making it much harder for them to live because of the cost of food, but even increasing the tax on the wedding ring itself.

We have heard a lot about incentives, and I am not at all sure which particular incentive the Chancellor had in mind in increasing the tax on wedding rings. A wedding ring, surely, is an essential, at any rate to the newly married couple. Yet, at the very moment of time when the Chancellor is increasing the tax on gold wedding rings, he is reducing the tax on more and more luxury items of gold and silver.

For some reason which we have been unable to understand, the Purchase Tax has come off gold and silver petrol lighters. The price of a gold lighter has come down from £25 to £20, while some of the more expensive items, such as silver teaspoons, have been reduced from 5 guineas to £4 12s. 6d. A silver teaset which costs £120 at present will come down to £108, and, of course, gold plate comes down even more. At last, we are beginning to understand why Sir Bernard Docker, despite all those blood chilling warnings to the effect that he thought he would have to go to live abroad, has now decided that he will not leave this country, because these expensive items are to be cheaper.

Finally, let me come to the question referred to by the Economic Secretary to the Treasury. He said that the proposal we are debating on this Amendment will help exports, particularly because of the present strain on the metal goods industry. He gave the Committee some interesting figures about what he called the excess demand for labour. This is always a phrase that rather frightens us when we hear a Minister talking about the excess demand for labour. He said it was greatest in areas in which the metal goods industries are now most strongly concentrated—and I think we would agree about that—but he quoted with approval some words which were used by my right hon. Friend the Member for Leeds, South on 10th April, 1951. I am paraphrasing his words, although the hon. Gentleman think quoted them exactly. My right hon. Friend said that we must concentrate the tax on those goods which might be diverted to export.

The hon. Gentleman approved of this policy, as stated by my right hon. Friend, and gave us to understand that that is the policy of the Government today in increasing the Purchase Tax, because they want to divert to the export trade those items which are capable of being exported, where it is thought that there is too much being consumed in this country at the present time. That was the main reason, or one of the main reasons, for this increase in the tax. I would only say that all this is very interesting, and I think we can follow very easily the reasoning of the hon. Gentleman in putting that argument forward.

I must remind the hon. Gentleman and the Chancellor, however, that it is at complete variance with what we were told by the President of the Board of Trade on 10th June this year. I should like to remind the Committee once again of the words which the President of the Board of Trade used on that occasion, in reply to what I thought was a helpful and constructive speech of my own on that Friday morning. He then said this: What about consumption? Do not let us be too afraid of our people consuming things Sometimes, to hear the right hon. Gentleman, one would think it was terribly shocking for our people to be consuming things which ought to be all going into the export market. Nobody is keener about exports than a President of the Board of Trade.".—[OFFICIAL REPORT, 10th June, 1955; Vol. 542, c. 162.] Well, not this one. It is because of this difference, because of this completely schizophrenic view about exports which characterises the whole Government, that we are in this difficulty today. The President has not taken any of the measures which we advocated as being necessary for increasing exports, and, because he will not increase exports, the Chancellor of the Exchequer has to come along and try to do it by means of the fiscal weapon.

So far in this debate, over the narrow field to which the discussion has been restricted for the last hour or so, we have had no convincing argument to suggest to us that we should agree with the Government in their proposal to increase this range of Purchase Tax from 50 to 60 per cent.

6.45 p.m.

Mr. R. A. Butler

It would perhaps be reasonable if, after three and a quarter hours of discussion, we should now come to a decision on this Amendment, because we have the next range of Purchase Tax to consider. After that, we then have the general debate on the Clause, and we then have, as is known, eight or nine debates on the rest of the Amendments on the Order Paper, which will, I think, make our deliberations somewhat protracted. Therefore, I think that it will probably be for the convenience of the Committee to come to a decision on this matter, upon which the difference of opinion between us is now sufficiently clear to enable the point to be decided in the Division Lobbies.

The first point that I wish to deal with is that concerning commercial vehicles, which was raised by the right hon. Gentleman the Member for Huyton (Mr. H. Wilson). I had understood that commercial vehicle chassis stood at 25 per cent., now raised to 30 per cent. in this Budget, and not at 50 per cent. now raised to 60 per cent., but if I am at fault—and I have only just been informed on this—we can discuss it later. It would be out of order to try to do it on this Amendment.

On the question which the right hon. Gentleman raised about the revenue from cars, my hon. Friend the Economic Secretary to the Treasury correctly gave the revenue figures, which amount to approximately £15 million on motor cars, leaving aside all the other items in the list. All the items in the list total about £30 million—items which we are considering on this Amendment—and motor cars come to about £15 million out of that £30 million. I am informed that this estimate is based on the current level of receipts in a year. If, during the coming year, as we hope, exports take an increasing proportion of output, we shall not get this revenue, for the reason that there is no Purchase Tax on exports, but to that extent we shall have an improvement from the economic point of view. Quite frankly, I would rather have exports than revenue at the present time, and that is as good an answer as I can give the right hon. Gentleman on that point because I cannot go into the methods of calculating the revenue figures.

This particular Amendment deals with a list of items which was read out in his able speech by the hon. Member for Stechford (Mr. Roy Jenkins), and it covers such things as motor cars, radio and television sets, electric and gas fires, certain jewellery, including costume and imitation jewellery, trunks and bags, fancy goods, smokers' requisites and mirrors. It would be a pity if, in our discussion, we became attached to one particular trade or item, such as the motor trade or anything else.

The Government have particularly used, and used on purpose, the weapon of the Purchase Tax for very much the same reason as it was used by the right hon. Gentleman the Member for Leeds, South (Mr. Gaitskell) when he spoke on 10th April, 1951. These motives were referred to by the right hon. Gentleman the Member for Huyton, and the motives remain in general very much the same in the particular economic difficulties which we are facing at the present time. One difference between the right hon. Gentleman and myself is that I am not quite so keen on the revenue aspect as he was when he imposed the Purchase Tax at that time on motor cars, whereas with television sets and a range of other domestic appliances, the range, I fully acknowledge, was not the same.

Perhaps the right hon. Gentleman will have plenty of opportunity later to indicate whether he differs from me in the choice of articles, but, in these articles, which broadly correspond with those which we are debating today, I think that the motives, which, I trust, in each case were in the country's interests, were the same, except that I am less keen on getting revenue, and if there were to be an increase in exports and we got less revenue, I should be less dissatisfied than he was, owing to the difference in the budgetary situation. At present, the budgetary situation is what is called satisfactory; that is, purely from a budgetary point of view, we have an adequate surplus. What is wrong is our balance with overseas countries. The answer now is to increase our exports in these ranges, and to relieve the presssure upon the metal-using industries.

The most telling argument that I can use in the very few minutes for which I shall detain the Committee is to use exactly the same words as the right hon. Member for Leeds, South used on 10th April, 1951, when he said: …in choosing the articles we must turn to those whose production for the home market we want to discourage because their production and sale at home is likely to conflict most seriously with the needs of export and defence. Increased taxation for this range of articles is clearly indicated, for so long as these other claims continue."—[OFFICIAL REPORT, 10th April, 1951; Vol. 486, c. 859.] Leaving aside all the other articles which I have mentioned, I notice that the proportion of exports in the motor trade in 1952 was 69 per cent., and that in the first half of this year it was 45 per cent. There is, therefore, a distinct need for improvement in our exports of motor cars, and exactly the same reason as that given by the right hon. Gentleman in his speech on 10th April, 1951, prevails in this instance in regard to the metal-using industries, especially the motor car industry. I have given statistics to indicate that I am basing my policy upon ascertainable facts and ascertainable needs.

As for the needs of defence, it so happens that, as Sir Stafford Cripps used to say, the nexus of our economic problem is in the metal-using sector, because it is precisely within that sector that one has the terrible pull of defence; the needs of the housewife for all these new appliances — [Interruption.] — some of which will bear increased taxation this year, and, at the same time—

Mr. H. Lever

On a point of order. An hon. Member was heard to say of the Chancellor that he was putting forward pure "Butskellism." I know that a number of offensive words are out of order, and that some do not change with the times. Would you say, Major Anstruther-Gray, whether the charge of "Butskellism" which was made against the Chancellor is a proper one, and within the rules of order?

The Temporary Chairman (Major W. J. Anstruther-Gray)

I heard no such word. That being so, I take no cognisance of it.

Mr. Percy Dailies (East Ham, North)

Surely it is up to the hon. Member concerned to say whether or not he said "Butskellism."

Mr. Butler

Whether or not my hon. Friend the Member for Dorset, South (Viscount Hinchingbrooke) said "Butskellism," I thought that that attractive and agreeable figure had been killed in recent controversy, and that his place had been taken by "Mr. Gaitvan"—a different figure, whose controversies I shall leave to right hon. Gentlemen opposite, who will have opportunities for talking to and debating with my hon. Friend.

I would only point out to him that if he imagines that a policy of freeing the economy, as we have so successfully indulged in over the last four years—by opening up markets, freeing payments, widening our trade, cheapening our provisions, giving a choice to the housewife, and, generally, following a policy of liberation in order to relieve the economy—is the same as that practised by the right hon. Member for Leeds, South, he is making a great mistake.

He is also making a mistake if he thinks that I, or anybody occupying my position, would be lacking in the courage necessary to take unpopular actions such as raising the tax upon a certain section of the metal-using industry—which is what this proposal does—because it is in short supply; we want to limit home demand, and conquer inflation. That is why we are doing this. We are not going back to the physical controls used by the right hon. Gentleman opposite, or to many of the other methods used by him. It is not a question of rudery or of wishing to impugn the motives of the right hon. Gentleman in using these methods. I am merely stating that we are not going back to those methods. Therefore, when methods exist which we believe will be effective in limiting home demand, we intend to use them. One of the methods which I believe will be most effective in this respect is the use of Purchase Tax, whose effect is immediate.

I conclude upon that note of immediacy. I should be out of order if I followed the speeches made by the hon. Member for Stechford—upon the subject of investment and initial allowances—the hon. Member for Westhoughton (Mr. J. T. Price) or the right hon. Member for Huyton. I would merely say that the difference between withdrawing the initial allowance from the motor car industry and the use of Purchase Tax is that Purchase Tax operates at once.

Mr. Lewis

On a point of order. I understood the Chancellor to say that he could not reply to certain points made by my right hon. and hon. Friends because he would be out of order. In view of the fact that they made those points during the debate, and were permitted by the Chair to do so, surely they were in order. If the Chancellor desired to answer them surely he would also be in order.

The Temporary Chairman

My information is that the Chair attempted to restrict the debate and to prevent it going outwith the proper limits. If the Chancellor can continue to keep within the limits, that is what he should do.

Mr. Butler

I am in a stronger position than the hon. Member, because I have been here throughout the debate. I have had no diversions outside the Chamber. I have watched the changing of Chairmen. Each Chairman has given an opportunity for a wider debate in this matter, up to a certain point, but the only attitude I am taking is to say to the hon. Member for Stechford, the right hon. Member for Huyton, the hon. Member for Westhoughton and others, that the only action which operates as from the day of its introduction is Purchase Tax. If I had withdrawn the initial allowance, that would not have had the same effect as I believe these measures will have.

I therefore draw these measures to the attention of the Committee. I believe that they are in accordance with precedent and, according to the best economic advice available, the best measures, under the circumstances, to deal with the danger of inflation. I hope that we shall now be able to reach a decision upon this matter, because we have a very heavy programme before us and if we cannot make progress I believe that the Committee will be unduly detained.

Mr. Pargiter

I do not think that the matter can be allowed to rest where the Chancellor proposes to leave it. He has adduced no evidence that Purchase Tax, in the past, has effectively restricted consumption. Certainly, in the case of certain classes of goods it has not done so. The best evidence available from manufacturers at present is that the effect will be that some people who previously purchased goods of this kind for cash will now do so by hire-purchase instead, because of the little extra they will have to pay. In many respects the long-term effect will be worse than if they had purchased for cash. The Chancellor's arguments are not well founded in their application to this range of goods.

It cannot be shown that there is any analogy between the present circumstances and those which existed in 1951, especially in relation to the metal-using industries. In 1951, there was an expanding market abroad in various countries for motor cars, vehicles and other durable consumer goods. It cannot be argued that the position is the same today. We are now meeting with increased competition from other countries, and are not able to make the same progress in foreign markets as we were in 1951, when other countries were a long way behind us.

The argument to which the Chancellor should address himself is that the general effect of these proposals, among his others, will be to increase costs at home, and if costs increase we shall be in a still worse position in trying to compete with other countries in the various markets in which the Chancellor thinks that we shall be able to expand.

7.0 p.m.

We shall not get the expansion of those markets. We shall pay something more for the goods, but the goods will still be sold on the home market. So long as there is no distinction as to where metal is going and the types of firms to which it is going, it will go to those who can pay most for it, and into the market which is most readily available. That is a fact, and there is no question about it, whether the Chancellor likes physical controls or not. The time when the export market worked well, and when there was the greatest volume of goods going into the export market in relation to production, was when there were physical controls such as those on steel and other raw materials. The Chancellor may not like it, but the facts are there. It cannot be said that steel control broke down at any time and failed to do its job.

The Chancellor will really have to look at this question of the inflationary effect. Quite apart from purchases made by housewives, let us look at those made by local authorities, who do not buy things for nothing and have been pruning their budgets for long enough now, because of rising costs. The Chancellor's proposals will mean to my own county council an additional cost of £68,000 in a full year. The money must come from somewhere; it will come out of the rates. It will have an inflationary effect because people will want more money to pay more rates. The process of inflation will grow as a result of the Chancellor's proposals.

It seems that very little research has been done by the Treasury or by the Chancellor himself into the effect of these proposals on the relationship between goods and markets. The effect of Purchase Tax on the whole range of goods available on the home market has not ultimately, over a period of years, been to reduce consumption. Its effect has been what we have already said it would be. If prices go up, there will be a demand for more money to buy the goods. The

increase in Purchase Tax will not work in the way the Chancellor thinks it will.

If the Chancellor chooses to see that firms which are prepared to do their utmost to export are placed in a favourable position for their raw materials against those who rely on the home market, he will be doing a more useful job of work than in the proposals he is putting before us.

Question put, That the words proposed to be left out stand part of the Clause:—

The Committee divided: Ayes 280, Noes 237.

Division No. 45.] AYES [7.4 p.m.
Agnew, Cmdr. P. G. Davidson, Viscountess Horobin, Sir Ian
Aitken, W. T. D'Avigdor-Goldsmid, Sir Henry Horsbrugh, Rt. Hon. Dame Florence
Allan, R. A. (Paddington, S.) Deedes, W. F. Howard, Hon. Greville (St. Ives)
Alport, C. J. M. Dodds-Parker, A. D. Howard, John (Test)
Arbuthnot, John Donaldson, Cmdr. C. E. McA. Hudson, Sir Austin (Lewisham, N.)
Armstrong, C. W. Doughty, C. J. A. Hudson, W. R. A. (Hull, N.)
Ashton, H. Drayson, G. B. Hughes, Hallett, Vice-Admiral J.
Astor, Hon. J. J. Dugdale, Rt. Hn. Sir T. (Richmond) Hughes-Young, M. H. C.
Atkins, H. E. Duncan, Capt. J. A. L. Hulbert, Sir Norman
Baldock, Lt.-Cmdr. J. M. Duthie, W. S. Hurd, A. R.
Baldwin, A. E. Eden, Rt. Hn. SirA.(Warwick&L'm'tn) Hutchison, Sir Ian Clark (E'b'gh, W.)
Balniel, Lord Eden, J. B. (Bournemouth, West) Hutchison, James (Scotstoun)
Banks, Col. C. Elliot, Rt. Hon. W. E. Hyde, Montgomery
Barlow, Sir John Emmet, Hon. Mrs. Evelyn Hylton-Foster, Sir H. B. H.
Barter, John Errington, Sir Eric Iremonger, T. L.
Baxter, Sir Beverley Erroll, F. J. Irvine, Bryant Godman (Rye)
Beamish, Maj. Tufton Farey-Jones, F. W. Jenkins, Robert (Dulwich)
Beattie, C. Fell, A. Jennings, J. C. (Burton)
Bell, Ronald (Bucks, S.) Finlay, Graeme Jennings, Sir Roland (Hallam)
Bennett, Dr. Reginald Fisher, Nigel Johnson, Dr. Donald (Carlisle)
Bevins, J. R. (Toxteth) Fleetwood-Hesketh, R. F. Johnson, Eric (Blackley)
Bidgood, J. C. Fletcher-Cooke, C. Kaberry, D.
Biggs-Davison, J. A. Fort, R. Keegan, D.
Birch, Rt. Hon. Nigel Fraser, Hon. Hugh (Stone) Kerby, Capt. H. B.
Bishop, F. P. Freeth, D. K. Kerr, H. W.
Body, R. F. Galbraith, Hon. T. G. D. Kershaw, J. A.
Boothby, Sir Robert Gammans, L. D. Kirk, P. M.
Bossom, Sir A. C. Garner-Evans, E. H. Lagden, G. W.
Boyle, Sir Edward Glover, D. Lambert, Hon. G.
Braine, B. R. Godber, J. B. Lancaster, Col. C. G.
Bromley-Davenport, Lt.-Col. W. H. Gomme-Duncan, Col. A. Langford-Holt, J. A.
Brooke, Rt. Hon. Henry Gower, H. R. Leather, E. H. C.
Brooman-White, R. C. Graham, Sir Fergus Leavey, J. A.
Browne, J. Nixon (Craigton) Grant, W. (Woodside) Leburn, W. G.
Bryan, P. Grant-Ferris, Wg Cdr. R. (Nantwich) Legh, Hon. Peter (petersfield)
Buchan-Hepburn, Rt. Hon. P. G. T. Green, A. Lennox-Boyd, Rt. Hon. A. T.
Bullus, Wing-Commander E. E. Grimston, Hon. John (St. Albans) Lindsay, Hon. James (Devon, N.)
Burden, F. F. A. Grimston, Sir Robert (Westbury) Lindsay, Martin (Solihull)
Butcher, Sir Herbert Gurden, Harold Lloyd, Maj. Sir Guy (Renfrew, E.)
Butler, Rt. Hn. R. A.(Saffron Walden) Harris, Frederic (Croydon, N.W.) Lloyd-George, Maj. Rt. Hon. G.
Campbell, Sir David Harris, Reader (Heston) Longden, Gilbert
Carr, Robert Harrison, A. B. C. (Maldon) Low, Rt. Hon. A. R. W.
Cary, Sir Robert Harrison, Col. J. H. (Eye) Lucas, Sir Jocelyn (Portsmouth, S.)
Channon, H. Harvey, Air Cdre. A. V. (Macclesfd) Lucas, P. B. (Brentford & Chiswick)
Chichester-Clark, R. Harvey, John (Walthamstow, E.) Lucas-Tooth, Sir Hugh
Clarke, Brig. Terence (Portsmth, W.) Harvie-Watt, Sir George McAdden, S. J.
Cole, Norman Hay, John Mackeson, Brig. Sir Harry
Conant, Maj. Sir Roger Head, Rt. Hon. A. H. McKibbin, A. J.
Cooper-Key, E. M. Heald, Rt. Hon. Sir Lionel Mackie, J. H. (Galloway)
Cordeaux, Lt.-Col. J. K. Heath, Edward Maclay, Rt. Hon. John
Corfield, Capt. F. V. Henderson, John (Cathcart) McLean, Neil (Inverness)
Craddock, Beresford (Spelthorne) Hicks-Beach, Maj. W. W. Macleod, Rt. Hn. Iain (Enfield, W.)
Crookshank, Capt. Rt. Hn. H. F. C. Hill, Rt. Hon. Charles (Luton) MacLeod, John (Ross & Cromarty)
Crosthwaite-Eyre, Col. O. E. Hill, Mrs. E. (Wythenshawe) Macmillan, Maurice (Halifax)
Crouch, R. F. Hill, John (S. Norfolk) Macpherson, Niall (Dumfries)
Crowder, Sir John (Finchley) Hirst, Geoffrey Maddan, Martin
Crowder, Petre (Ruislip—Northwood) Holland-Martin, C. J. Maitland, Hon. Patrick (Lanark)
Cunningham, Knox Hope, Lord John Markham, Major Sir Frank
Currie, G. B. H. Hopkinson, Rt. Hon. Henry Marlowe, A. A. H.
Dance, J. C. G. Hornsby-Smith, Miss M. P. Marshall, Douglas
Mathew, R. Profumo, J. D. Summers, G. S. (Aylesbury)
Maude, Angus Raikes, Sir Victor Sumner, W. D. M. (Orpington)
Maudling, Rt. Hon. R. Ramsden, J. E. Taylor, Sir Charles (Eastbourne)
Mawby, R. L. Rawlinson, P. A. G. Taylor, William (Bradford, N.)
Maydon, Ut.-Comdr. S. L. C. Redmayne, M. Teeling, W.
Medlicott, Sir Frank Rees-Davies, W. R. Thomas, Leslie (Canterbury)
Milligan, Rt. Hon. W. R. Remnant, Hon. P. Thomas, P. J. M. (Conway)
Molson, A. H. E. Renton, D. L. M. Thompson, Kenneth (Walton)
Monckton, Rt. Hon. Sir Walter Ridsdale, J. E. Thompson, Lt.-Cdr. R. (Croydon, S.)
Morrison, John (Salisbury) Rippon, A. G. F. Thornton-Kemsley, C. N.
Mott-Radclyffe, C. E. Roberts, Peter (Heeley) Tilney, John (Wavertree)
Nabarro, G. D. N. Robertson, Sir David Touche, Sir Gordon
Nairn, D. L. S. Rodgers, John (Sevenoaks) Turton, Rt. Hon. R. H.
Neave, Airey Roper, Sir Harold Tweedsmuir, Lady
Nicholls, Harmar Ropner, Col. Sir Leonard Vaughan-Morgan, J. K.
Nicholson, Godfrey (Farnham) Russell, R. S. Vickers, Miss J. H.
Nicolson, N. (B'n'm'th, E. & Chr'ch) Schofield, Lt.-Col. W. Vosper, D. F.
Nield, Basil (Chester) Scott-Miller, Cmdr. R. Wakefield, Edward (Derbyshire, W.)
Noble, Comdr. A. H. P. Sharpies, Maj. R. C. Walker-Smith, D. C.
Nugent, G. R. H. Shepherd, William Wall, Major Patrick
O'Neill, Hn. Phelim (Co. Antrim, N.) Simon, J. E. S. (Middlesbrough, W.) Ward, Dame Irene (Tynemouth)
Orr, Capt. L. P. S. Smithers, Peter (Winchester) Watkinson, H. A.
Orr-Ewing, Charles Ian (Hendon, N.) Smyth, Brig. J. G. (Norwood) Webbe, Sir H.
Orr-Ewing, Sir Ian (Weston-S-Mare) Soames, Capt. C. Whitelaw, W.S.I.(Penrith & Border)
Page, R. G. Spearman, A. C. M. Williams, Gerald (Tonbridge)
Pannell, N. A. (Kirkdale) Speir, R. M. Williams, Paul (Sunderland, S.)
Partridge, E. Spence, H. R. (Aberdeen, W.) Williams, R. Dudley (Exeter)
Peake, Rt. Hon. O. Spens, Rt. Hn. Sir P. (Kens'gt'n, S.) Wills, G. (Bridgwater)
Pitt, Miss E. M. Stevens, Geoffrey Wilson, Geoffrey (Truro)
Pott, H. P. Steward, Harold (Stockport, S.) Wood, Hon. R.
Powell, J. Enoch Stewart, Henderson (Fife, E.) Woollam, John Victor
Price, David (Eastleigh) Stoddart-Scott, Col. M. Yates, William (The Wrekin)
Price, Henry (Lewisham, W.) Storey, S.
Prior-Palmer, Brig. O. L. Studholme, H. G. TELLERS FOR THE AYES:
Mr. Oakshott and Mr. Barber
NOES
Ainsley, J. W. Cronin, J. D. Houghton, Douglas
Albu, A. H. Crossman, R. H. S. Howell, Denis (All Saints)
Allaun, F. (Salford, E.) Cullen, Mrs. A. Hoy, J. H.
Allen, Arthur (Bosworth) Daines, P. Hubbard, T. F.
Allen, Scholefield (Crewe) Davies, Ernest (Enfield, E.) Hughes, Emrys (S. Ayrshire)
Anderson, Frank Davies, Harold (Leek) Hughes, Hector (Aberdeen, N.)
Attlee, Rt. Hon. C. R. Davies, Stephen (Merthyr) Hunter, A. E.
Awbery, S. S. Deer, G. Hynd, H. (Accrington)
Bacon, Miss Alice Delargy, H. J. Hynd, J. B. (Attercliffe)
Balfour, A. Dodds, N. N. Irvine, A. J. (Edge Hill)
Bartley, P. Donnelly, D. L. Irving, S. (Dartford)
Bellenger, Rt. Hon. F. J. Dugdale, Rt. Hn. John (W. Brmwch) Isaacs, Rt. Hon. G. A.
Bence, C. R. (Dunbartonshire, E.) Dye, S. Janner, B.
Benn, Hn. Wedgwood (Bristol, S.E.) Edwards, Rt. Hon. Ness (Caerphilly) Jeger, George (Goole)
Benson, G. Edwards, Robert (Bilston) Jeger, Mrs. Lena(Holbn&St.Pncs,S.)
Beswick, F. Edwards, W. J. (Stepney) Jenkins, Roy (Stechford)
Bevan, Rt. Hon. A. (Ebbw Vale) Evans, Albert (Islington, S.W.) Johnson, James (Rugby)
Blackburn, F. Evans, Edward (Lowestoft) Johnston, Douglas (Paisley)
Blenkinsop, A. Evans, Stanley (Wednesbury) Jones, Rt. Hon. A. Creech (Wakefield)
Blyton, W. R. Fernyhough, E. Jones, David (The Hartlepools)
Boardman, H. Fienburgh, W. Jones, Elwyn (W. Ham, S.)
Bottomley, Rt. Hon. A. G. Fletcher, Eric Jones, Jack (Rotherham)
Bowden, H. W. (Leicester, S.W.) Forman, J, C. Jones, J. Idwal (Wrexham)
Bowles, F. G. Fraser, Thomas (Hamilton) Jones, T. W. (Merioneth)
Boyd, T. C. Freeman, Peter Kenyon, C.
Braddock, Mrs. Elizabeth Gaitskell, Rt. Hon. H. T. N. Key, Rt. Hon. C. W.
Brockway, A. F. Gibson, C. W. King, Dr. H. M.
Broughton, Dr. A. D. D. Gooch, E. G. Lawson, G. M.
Brown, Rt, Hon. George (Belper) Gordon Walker, Rt. Hon. P. C. Ledger, R. J.
Brown, Thomas (Ince) Greenwood, Anthony Lee, Frederick (Newton)
Burke, W. A. Grenfell, Rt. Hon. D. R. Lee, Miss Jennie (Cannock)
Burton, Miss F. E. Grey, C. F. Lever, Harold (Cheetham)
Butler, Herbert (Hackney, C.) Griffiths, David (Rother Valley) Lever, Leslie (Ardwick)
Butler, Mrs. Joyce (Wood Green) Griffiths, Rt. Hon. James (Llanelly) Lewis, Arthur
Callaghan, L. J. Griffiths, William (Exchange) Lindgren, G. S.
Carmichael, J. Hale, Leslie Lipton, Lt.-Col. M.
Champion, A. J. Hall. Rt. Hn. Glenvil (Colne Valley) Logan, D. G.
Chapman, W. D. Hannan, W. MacColl, J. E.
Chetwynd, G. R. Harrison, J. (Nottingham, N.) McGhee, H. G.
Clunie, J. Hastings, S. McGovern, J.
Coldrick, W. Hayman, F. H. McInnes, J.
Collick, P. H. (Birkenhead) Healey, Denis McKay, John (Wallsend)
Collins, V. J. (Shoreditch & Finsbury) Herbison, Miss M. McLeavy, Frank
Corbet, Mrs. Freda Hobson, C. R. MacMillan, M. K. (Western Islet)
Cove, W. G. Holman, P. Mahon, S.
Craddock, George (Bradford, S.) Holt, A. F. Mallalieu, E. L. (Brigg)
Mallalieu, J. P. W. (Huddersfd, E.) Probert, A. R. Thomas, George (Cardiff)
Mann, Mrs. Jean Proctor, W. T. Thomson, George (Dundee, E.)
Marquand, Rt. Hon. H. A. Pryde, D. J. Thornton, E.
Mason, Roy Pursey, Cmdr. H. Timmons, J.
Mellish, R. J. Rankin, John Tomney, F.
Mikardo, Ian Reeves, J. Turner-Samuels, M.
Mitchison, G. R. Reid, William Viant, S. P.
Monslow, W. Rhodes, H. Wade, D. W.
Moody, A. S. Roberts, Albert (Normanton) Warbey, W. N.
Morrison, Rt.Hn. Herbert(Lewis'm,S.) Robinson, Kenneth (St. Pancras, N.) Watkins, T. E.
Mort, D. L. Rogers, George (Kensington, N.) Weitzman, D.
Moss, R. Ross, William Wells, Percy (Faversham)
Moyle, A. Royle, C. West, D. G.
Mulley, F. W. Shinwell, Rt. Hon. E. Wheeldon, W. E.
Noel-Baker, Francis (Swindon) Short, E. W. White, Mrs. Irene (E. Flint)
Oliver, G. H. Silverman, Julius (Aston) White, Henry (Derbyshire, N.E.)
Oram, A. E. Silverman, Sydney (Nelson) Wigg, George
Orbach, M. Simmons, C. J. (Brierley Hill) Wilcock, Group Capt. C. A. B.
Oswald, T. Skeffington, A. M. Wilkins, W. A.
Owen W. J. Slater Mrs. H. (Stoke, N.) Willey, Frederick
Padley, W. E. Slater, J. (Sedgefield) Williams, Ronald (Wigan)
Paget, R. T. Smith, Ellis (Stoke, S.) Williams, Rt. Hon. T. (Don Valley)
Paling, Will T. (Dewsbury) Sorensen, R. W. Williams, W. R. (Openshaw)
Palmer, A. M. F. Sparks, J. A. Williams, W. T. (Barons Court)
Pannell, Charles (Leeds, W.) Steele, T. Willis, E. G. (Edinburgh, E.)
Pargiter, G. A. Stones, W. (Consett) Wilson, Rt. Hon. Harold (Huyton)
Parker, J. Strachey, Rt. Hon. J. Winterbottom, Richard
Parkin, B. T. Strauss,Rt. Hon. George (Vauxhall) Woodburn, Rt. Hon. A.
Paton, J. Stross, Dr.Barnett (Stoke-on-Trent,C.) Yates, V. (Ladywood)
Pearson, A. Summerskill, Rt. Hon. E. Younger, Rt. Hon. K.
Peart, T. F. Swingler, S. T. Zilliacus, K.
Plummer, Sir Leslie Sylvester, G. O.
Popplewell, E. Taylor, Bernard (Mansfield) TELLERS FOR THE NOES:
Price, Philips (Gloucestershire, W.) Taylor, John (West Lothian) Mr. J. T. Price and Mr. Holmes.

7.15 p.m.

Mrs. Eirene White (Flint, East)

I beg to move, in page 2, to leave out lines 3 and 4.

This Amendment proposes that those articles at present carrying Purchase Tax at the rate of 75 per cent. should not, as is sought, be charged at a rate of 90 per cent. When one has a group of articles in the very highest range of Purchase Tax—and all hon. Members will agree, I think, that a 90 per cent. tax is a very heavy tax indeed—one would at least have expected that the articles affected would be those of extreme luxury, of vast expense, which would vitally affect our export trade, our balance of payments, the inflationary situation and all the other aspects of our economy.

When I looked at the articles included in the group, I was astonished to find that, far from being articles of major expenditure and great luxury, they are a very small group of curiously-assorted things. I can only conclude that, not content with an attack on the home which he has been conducting with some ferocity in the earlier parts of the Bill, the Chancellor has now turned his attack to beauty. [HON. MEMBERS: "Shame."] Most of the articles with which we are here concerned are aids to beauty, and it seems to me, to say the least, that it is ungallant of the Chancellor to put the highest possible rate of tax on those things which affect the morale of so many of our women and. I hope, add to the pleasure of so many of the men.

Included in this group, which covers hairdressing equipment, various toilet articles and other things, are some very odd items indeed. Further to his attack on aids to beauty, the Chancellor also adds a very high tax on articles required for manicure and chiropody and also, I am happy to say—just to keep the balance even between the sexes—certain articles required for shaving. It would therefore seem that the end-result of "Britain Strong and Free" is a 90 per cent. tax on corn eradicators, shaving bowls and denture boxes. Perhaps we shall be told why it is necessary to put this penal tax on these things.

The Chancellor has told us that he is not particularly concerned about the revenue aspect of Purchase Tax but that his concern is with the great metal-using industries, with our exports, our balance of payments and the inflationary position. That being so, why this attack on "home-perms"? I do not suppose that the right hon. Gentleman—I am sorry that he is not here to tell us—knows which twin had the "Toni." He quite clearly does not care. One may go to the hairdresser and have to pay for the increased rates of tax on the equipment used there, but it so happens that, on the whole, those articles are taxed at a somewhat lower rate, while the working woman using the home permanent waving set has to pay the highest tax of all at 90 per cent. I should be very much interested in an explanation as to just why it is that the woman who tries to economise—as, indeed, she will have to as a result of the other provisions of the Budget—by doing her own permanent waving at home is singled out for this damaging tax.

I cannot really believe that this will affect our balance of payments. It certainly does not affect the metal-using industries because, with home permanent waving, metal equipment is not used. We want to know why, in this particular group, this item is singled out. There are various items, such as curling papers—they are somewhat old-fashioned things—but this most modern method of dealing with the hair is penalised in this fashion. It is a very great pity because, evidently, the Chancellor in considering the matter—and I am sure that he has given the deepest possible attention to it—cannot have had much sympathy with men who, throughout the ages, have referred to a woman's hair as her crowning glory. Even St. Paul, that rather austere man, referred to the glory of a woman's hair, although, as one might have expected from him, he preferred it long.

Why does the Chancellor impose this largest possible increase upon something which is not very important economically? I can hardly believe that it is of major importance to our national economy, but it makes a difference to the happiness and comfort of many women in this country and, I hope, adds some pleasure to life for men.

These hairdressing requisites, which are dealt with in Group 3 in the Schedule of Purchase Tax increases, are only the first of the groups and I will pass to another which is included in the 90 per cent, tax range—various toilet requisites. I am sorry to say that there seems to be a sadistic streak in the Chancellor. Otherwise why should he consider it necessary to impose a 90 per cent, tax upon corn rasps and eradicators and corn knives, other than those with metal handles. If they have metal handles they are taxed at a lower rate, so this can be nothing to do with saving metal. Perhaps we might have an explanation.

It seems to me a very peculiar tax when one has a 90 per cent. tax on articles required for chiropody, which is never a pleasure and not something in which we indulge; to some people, unfortunately, it is a necessity. Anything which even slightly adds to the cost of these painful processes is to be deprecated, and I should be glad to know on what possible principle these articles are included in the group to bear this high rate of tax.

Manicures are not perhaps quite as important to health as chiropody, but they are important for decent and civilised living. For some obscure reason the Chancellor imposes this very heavy tax upon nail clippers if they do not exceed 3½ inches in length. If they are longer than that they carry a lower rate of tax, which is also very peculiar. Even such very ordinary requisites to any civilised person as nail files and emery boards carry this fantastic rate of tax. Surely they have nothing to do with our balance of payments. Surely that argument cannot be used.

Some more elaborate articles are included, for instance chin straps for correcting double chins. On these, too, there is a penal rate of taxation. I greatly admire any of my feminine companions who have sufficient patience to use one of these corrective articles, and if they are prepared to go through what must be a very tedious process I cannot see why they should also have to pay a 90 per cent. tax. Again, I should be glad to know the economic reason which makes it necessary to apply a 90 per cent. rate of tax to these articles.

Speaking of the same group, I have a certain feminine satisfaction when I observe that shaving mugs, strop oils, powders and other shaving requisites are also charged at the same rate, but this is a much shorter list than the very long list which applies to so many of the feminine requisites in this group.

The next group which is charged at this rate comprises various toilet preparations, including lipstick, face powder and rouge. Speaking of chiropody, I said that there might be a sadistic streak in the Chancellor. It seems that there might also be a Puritanical streak; for all I know he may feel that women should be discouraged from trying to improve upon Nature. Whereas few women are born beautiful and need only perhaps to emphasise the features with which they have been endowed, the great majority of us, I am afraid, when we look into our mirrors feel that Nature could have made a very much better job of it and therefore, with more or less skill, we endeavour to make up for Nature's deficiency.

Although this reference to cosmetics may seem a very trivial matter, they are regarded by psychologists as of very great importance—so much so that even the women convicts in Holloway Gaol, as part of their corrective treatment, are now permitted the use of cosmetics. [HON. MEMBERS "Tax-free?"] I do not know. In any case, what I suggest is that these articles are of value and importance to the great majority of the women of this country, and I cannot see why we should have to pay this excessive tax of 90 per cent. upon them. I cannot believe that they make all that much difference to the fundamentals of our economic situation. If they do, I shall be happy to hear the reasons, but I find it very difficult to see why, as they already bear a heavy enough tax of 75 per cent., we should have to pay this rather undignified tax of 90 per cent.

These are the major articles which we are discussing on the Amendment. I have not been obliged to mention any of the group previously discussed—motor cars, television and radio sets and so on; at least there is an arguable case for a tax on those articles, although we do not think the arguments are very strong. Why this other group should have to bear the highest rate of tax, bearing hardly on the women of the country, who are already being penalised in their home lives, I do not know. Now the women are being taxed in their personal lives. The title of "Austerity Chancellor" was carried for many years by my friend the late Sir Stafford Cripps, but I think the present Chancellor deserves it more.

There is one other group of articles which is also to carry this tax of 90 per cent. If any hon. Members have not had sufficient time to study the schedule of Purchase Tax, I am sure they will never guess the other articles which have been selected by the Chancellor and his Department to carry this extremely high rate of tax. I am about to inform those hon. Members who have not been able to inform themselves. I was astonished, first, that the groups which I have already mentioned should be singled out, but my surprise was increased when I found that of all the purchases one can make, the only other articles on which one has to pay this extremely heavy rate of tax—now increased even further—are those included in Group 34, among which are coloured greetings cards.

Mr. Jack Jones (Rotherham)

Merry Christmas.

Mrs. White

I was interested to see the explanatory note which follows the lists because there are many articles of stationery which carry a lower rate of tax. The articles which carry the 90 per cent. tax are: … in general, cards, or similar articles which bear words conveying greetings, thanks, sympathy, wishes, congratulations or similar sentiments. They have also to be coloured.

Mr. S. Silverman

I wonder whether my hon. Friend's researches have gone so far as to enable her to inform the Committee whether a coloured card containing a housewife's opinion of the Chancellor would come within the Schedule.

7.30 p.m.

Mrs. White

I think that it very well might. I am very glad of my hon. Friend's correction, because in reading the list I made one slight error. It was "greetings," "thanks"—that is unlikely in a message to the Chancellor—"sympathy"—and I can hardly think that would be included in a message to the Chancellor, but it might—and "wishes." I think that a message carrying bad wishes to the Chancellor, possibly with a touch of sympathy, if it were coloured, would bear the 90 per cent. rate of tax.

Then there are Christmas cards, birthday cards, anniversary cards, and cards for special occasions or festivals. Valentines are not mentioned, but I am sure that they would be included. There are also Easter and Christmas service cards giving information regarding church services, and also words of greetings, birth announcement cards, wedding invitation cards, memorial cards, motto or text cards and mass cards. All these cards bearing this information have, for some astonishing reason, been singled out by the Treasury for this very high rate of tax. Surely this is a ludicrous situation.

I am not pretending that this is gross hardship upon the nation. After all, one must keep these things in proportion. But surely it is ridiculous. That is really the burden of my argument. It is ridiculous that this group of articles should carry this extraordinarily high rate of tax. At a time when we have this special autumn Budget—

Mr. Tom Brown (Ince)

Christmas Budget.

Mrs. White

Yes, indeed, a Christmas Budget. It is all part of the Christmas spirit. Surely this was an opportunity to deal with something which has perhaps been overlooked on previous occasions. As a gesture, the Chancellor might have come along and said, "As this is Christmas time, I will take the tax off coloured Christmas cards." But so lacking is he in the Christian spirit or good public relations, I am not sure which, that this quite obvious manoeuvre did not even occur to him. So we are left with this ridiculous and foolish situation in which the very highest rate of tax which the public has to pay is on the articles which I have enumerated.

There are various trade hardships concerned with this into which I do not feel competent to enter, but I know that some of my hon. Friends have obtained information, or have connection with the trade, and they will be able to present the various arguments My principal argument is on the stupidity of having the very highest rate of 90 per cent. imposed on these articles. I do not believe it can be defended by any Minister, however able or well-informed, and I hope that the Committee, whatever it may have done when discussing some other articles, will, in considering this group, decide to support our Amendment.

Viscount Hinchingbrooke rose

Mr. George Thomas (Cardiff, West)

Speak for England.

Viscount Hinchingbrooke

This is not a post-prandial debate. It has come on at an early hour, and I wondered why the Labour Party was in such a state of gay abandon. The hon. Lady the Member for Flint, East (Mrs. White) delighted us with a speech which was full of wit and humour, with an interesting association of chiropody and St. Paul's views. She brought in a great many light and gay arguments to amuse us. Her speech was not unlike the speech delivered earlier this afternoon by the hon. Member for Stechford (Mr. Roy Jenkins). He spoke a little about motor cars. There was no real concern or anxiety. It was a light occasion, and he made an able, amusing speech lasting 40 minutes. Yesterday evening, the hon. Member for Rossendale (Mr. Anthony Greenwood) initiated a debate on another of these three Amendments on increases in the Purchase Tax. That also was quite light, gay and amusing, and I wondered what the reasons for it were.

I think that there are perhaps two reasons. The first is that the Labour Party has to discharge its formal duty in opposition. It has to put down a few Amendments to a Finance Bill, or whatever it may be. It is the duty of the Opposition to oppose, and the Labour Party must discharge its duty if it is to go down well with the country and its supporters. This is obviously one of the reasons why we have had this series of trite and comparatively innocuous Amendments so far to the Purchase Tax.

Mr. H. Hynd (Accrington)

Is it in order, Sir Charles, to impute motives?

The Chairman

I did not hear any motives being imputed.

Viscount Hinchingbrooke

One of the answers is that the Labour Party likes the Purchase Tax. [HON. MEMBERS: "Rubbish."] It has always liked the Purchase Tax. It has put it up in the past whenever it could. It is part and parcel of its political doctrine. Conference after conference of the Labour Party, for fifty or sixty years back, has passed resolutions in favour of indirect taxation. Hon. Members opposite prefer indirect taxation, selective taxation which impinges on different sections of the community, whenever possible, and they are opposed traditionally and doctrinally to direct taxation.

Therefore, when it comes to a position in which a Conservative Chancellor is increasing the Purchase Tax, it goes against the grain for the Labour Party to produce any Amendments to reduce it. [HON. MEMBERS: "Rubbish."] It is fundamentally against the party's doctrine. That is one of the reasons why we have had speeches of comparative inconsequence, without any sense of urgency, without reflecting the real grief and hardship in the community, put in a light, gay, bantering way before hon. Members opposite depart for the Dining Room.

The second reason why the Labour Party has failed to reflect the anxiety, if there is any anxiety in the country, is because it is convinced, as I am myself convinced, that the increase in the Purchase Tax will have no effect whatever on the people. [HON. MEMBERS: "Rubbish."] They will pay the tax and go on buying the goods. The hon. Lady the Member for Flint, East, speaking about the difficulties of the trade, put them in such a light and inconsequential way as to lead me to suppose that she knew very well, or had information—or had failed to obtain information—from the firms concerned that this really was of no political consequence.

We all know—and this is the main burden of the attack on the Purchase Tax which comes from this side of the Committee as well as the other side—that this is no inflationary weapon at all. After the first initial shock, and laying off buying for a matter of weeks, people will begin to return to the shops and make the purchases which they have always made, because in a community which is based upon democracy and freedom, where no physical controls exist, people will definitely buy the goods which they want to maintain the standard of living they want; and when they have run into financial difficulties, they will go back to their employers, or to their trade unions, and insist upon having given to them the financial resources which will enable them to acquire the standard of living which they want.

Mrs. Harriet Slater (Stoke-on-Trent, North)

Will the noble Lord give way?

Viscount Hinchingbrooke

I have really come to the end.

Mrs. Slater

What does the noble Lord think the landlords intend to do when they ask his own Tory Government to remove rent control and when one considers the contents of the Housing Subsidies Bill which we are to discuss tomorrow? Are these things designed to meet the financial difficulties of the Tories or not?

Viscount Hinchingbrooke

It would not be in order for me to answer the hon. Lady's question now.

This is a pernicious tax which ought never to have been introduced and even now ought to be withdrawn. If I have an opportunity later, when we come to the Question, "That the Clause stand part of the Bill," to develop the full argument against the tax, I hope to do so.

Mr. G. Thomas

I was disappointed with the speech of the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke). I thought that he was going to make a serious contribution to our deliberations but, instead, he brought all the prejudice of the Tory on questions of this kind. The noble Lord ignored almost all the arguments of my hon. Friend the Member for Flint, East (Mrs. White) in dealing with the items which are being taxed.

I recall Lord Woolton making a speech in which he said he wished that the day would come when a young man could once again take his young lady to the pictures, buy her a box of chocolates and have a happy evening. I give that as an illustration, and only as an illustration, because now we have reached the stage in which apparently a young man's young lady is not to be allowed a "home perm" and the ordinary additions to her beauty without paying excessive taxation. I do not suppose for a moment that there will be a duchess in Britain who will be upset by the tax on "home perms." We realise that the people who will be affected by this increase in tax belong to one section of society—the working class. They are the people who indulge in these cheaper "perms." We are telling those people who have already had their resources strained by other increases due to the Budget—

Mr. Glover rose

Mr. Thomas

I will give way in a moment to the hon. Member who is struggling with himself.

These, as I was saying, are the people against whom a further blow is now being struck.

Mr. Glover

It is kind of the hon. Member to give way. I was rising to tell him that a bachelor should not enter into these arguments. "Home perms" are used in many more homes than the hon. Member believes.

Mr. Thomas

When I look at the hon. Member, I am surprised that he should mention a "perm" at all.

There are other items which enter into the life of our people which mean a great deal to them. There is the posting of a congratulatory card when a baby is born. What does the Chancellor mean by putting an increased tax on such cards to solve his export-import problem?

Mr. S. Silverman

He cannot put the tax on the babies.

Mr. Thomas

The right hon. Gentleman puts the tax on babies indirectly.

An increased tax is put on Christmas greeting cards. We have a dollar problem, of course, but this is a fantastic thing for the Government to do. The Financial Secretary to the Treasury is not an unreasonable man when he is given the chance. I am afraid that he is not given much opportunity to express that warm human nature which he enjoys, but I hope that tonight he will say that the Government can make a concession in relation to the Amendment. The Government's proposals are indefensible, they are mean, they are spiteful and they are hitting at that section of our community which most needs the protection of the Committee. I ask the Government to think again.

7.45 p.m.

Mr. Glover

I did not intend to enter into the debate until the question of "perms" was raised. The hon. Lady the Member for Flint, East (Mrs. White) opened the discussion in a most charming manner. If I may not be misunderstood, I should like to say that obviously she is so far not suffering from the tax because her make-up looks so very nice.

I hope that the Chancellor will give a second thought to the argument which is being put forward on the Amendment. I do not think that attacks on cosmetics will reduce the consumption of cosmetics. While there are men in the world women like to look attractive. Therefore, cosmetics are the last things on which a woman will cut down. A tax on cosmetics means a real hardship to women.

Women are already paying a tax of 75 per cent. and have done so uncomplainingly for several years. I do not think that anyone who looks round the country could suggest that during those years the consumption of cosmetics has gone down. If the Chancellor's policy is to reduce expenditure, it seems to me that in the process he wants us to spend a little extra time at home. Husbands are more likely to sit at home if their wives, sitting on the other side of the fireplace, are attractive than if their wives are a little bedraggled and without makeup on their faces. If one wants to reduce the consumption of luxury goods one is more likely to get people to stop at home if they are happy.

The Chancellor has increased Purchase Tax in order to damp down purchasing power and has thus automatically affected the womenfolk. By increasing the tax on these things which are so dear to a woman's heart and the things that make her more attractive, the Chancellor is losing the good will which many women would bear towards his general proposals if he would only consider them from a human point of view. I hope that my right hon. Friend will give second thoughts to this matter.

Mr. Charles Royle (Salford, West)

We receive support from all kinds of unexpected quarters. I am sure that my hon. and right hon. Friends are very much obliged to the hon. Member for Ormskirk (Mr. Glover) for his unexpected support. We sincerely hope that when we divide the Committee on the Amendment he and the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) will be with us in the Lobby. We have never had any doubt about the courage of the noble Lord, and we recognise with gratitude his gesture in coming into the Lobby with us on the Budget proposals on this subject. We look forward to his presence in our Lobby tonight on this very important point. I am sure that the hon. Member for Ormskirk will be with him on that occasion.

I bow to the superior knowledge of the hon. Member for Ormskirk and my hon. Friend the Member for Cardiff, West (Mr. G. Thomas) about cosmetics and "home perms," particularly my hon. Friend, for, as one of the bachelors in the House of Commons, he knows much more about these things than a mere married man like myself could possibly know, and he speaks with a great deal of authority. Not knowing a great deal about cosmetics, I want to concentrate upon greetings cards. On Second Reading the Financial Secretary said that the only articles left in this higher range of Purchase Tax were cosmetics and greetings cards. The right hon. Gentleman must have been very narrow in his outlook, because my hon. Friend the Member for Flint, East (Mrs. White) gave a much longer list.

The House is justified in accusing the Chancellor of meanness about greetings cards. Cards printed in up to two colours attract 30 per cent. tax, but if the printing is in more than two colours they have 90 per cent. tax on them. Will the Finance Secretary point out how it is that cards with three-colour printing should attract three times as much as cards printed in two colours? Why cannot all greetings cards at least be put in the lower range of tax? I am told by people in the industry that greetings cards going away from the manufacturer's premises at £5 per gross cost £11 11s. 11d. per gross by the time they reach the public, tax and the retailer's profit being included. That is a ridiculous figure.

The imposition of the higher tax discourages first-class work. An immediate cost is imposed upon the manufacturers. They have already produced and sent out their lists, catalogues and sample books for the 1956 Christmas, and these are having to be withdrawn. The lists, catalogues and sample books will have to be reprinted and sent out again to retailers and wholesalers. I am told authoritatively by the representative of a firm with 800 employees in my part of the country that the cost of revision will amount to at least £1,000, an expenditure with no return at all.

This is a crazy way to go about the policy of checking spending. This is one of the trades which pays an automatic cost-of-living bonus.

Mr. W. A. Wilkins (Bristol, South)

It is ending today.

Mr. Royle

My hon. Friend says that it is ending today, but the Budget proposals came into operation before today. The benefit to such employees represented 1s. for men and 9d. for women for every point rise in the cost of living. Millions of workers in this industry and other industries are affected.

Once more the crazy vicious circle operates. In this industry, as in many other industries, printing prices rise, the cost-of-living index goes up, then wages go up, and as a result of that printing costs rise again, the cost-of-living index goes up, and there are more wage demands. That is what the Chancellor is encouraging at present. Is that the object of the Budget? If so, it is in complete contradiction of all the speeches that we have heard from the Government benches since the Budget was introduced.

There is another instance of the meanness of the Government in respect of greetings cards. The minimum cost of a telegram is now 3s., and telephones are difficult to obtain. The only way hundreds of thousands of our people can send messages to friends in times of joy is by means of a greetings card. Our very pleasant custom of sending greetings to our friends on important occasions in their family life is being taxed by a Tory Chancellor to the extent of 90 per cent.

I am sure the Financial Secretary will "come clean" about this. Whatever else the Government may have resisted during our debates, surely he will say that there are so few articles left in this range of Purchase Tax that it might as well be wiped out and the articles placed in a lower range.

Mr. Jack Jones

As one who has nothing to "perm" and to whose skin the finest cosmetics would make no difference, I support the plea which has been made by my hon. Friends. It is right and proper that back benchers representing heavy industries should do so.

I commend the hon. Member for Ormskirk (Mr. Glover) on his contribution to the debate. I was not surprised. He happens to be a manufacturer of beautiful gowns, and he does his best to ensure that the ladies, so far as he is able to supply them, look their very best. It would be ridiculous for him to be producing beautiful gowns and, at the same time, supporting the Chancellor in doing away with lipstick and rouge. I hope to see him with us in the Lobby. We shall see.

A psychological factor is involved in this question. The Chancellor tells us that we must import less steel from America and produce more steel in this country, and that the way to achieve that is to get Bill Bloggs, the steel maker, to go home and tell his wife that she has to pay 6d. more for the bucket which he has helped to make, and then he, with his whiskers unshaved, will see her not looking at her best. The Chancellor says that that is the way to get a happier Britain. He wants to get that idea out of his head.

8.0 p.m.

I happen to be the very proud father of six very fine children. I have two very beautiful daughters and those hon. Members who have seen them will agree with that. I know that nothing gave me greater joy than to go home and see my wife and my two daughters looking their best. It helped my attitude towards my job. It gave me a feeling of having something worth living for and I went back to work happier among people of the same mind, and we were able to increase production a little.

I say that very seriously. If the Chancellor, with all the other evils he has committed, is to de-pretty the womanhood of our nation he ought to be damned well ashamed of himself. [HON. MEMBERS: "Oh."] It is quite Parliamentary. It is in the Bible. The Government are both damned and doomed as far as I am concerned. Where I live there are two very fine works belonging to the C.W.S. They are margarine and soap works and I confess that when I am on my allotment I watch the girls coming away from work. They sometimes call to see whether there are any spare roses. I know that the attitude of those girls is conditioned by how well they look in the eyes of their fellow women and how well they feel they look when they go to work.

Foremen and management like to see people looking at their best. When I was a Member for Bolton I used to look at some of the youngsters in the mills and I saw that the happiest were conditioned by the way they looked. That all helps to bring about what the Chancellor is seeking. I conclude with the very old story of the parson who, at Christmas time, got a bottle of cherry brandy. He said that, like the Christmas cards, it was not so much the price as the spirit in which the cherries were sent that mattered. That spirit is being broken by the difficulty in paying for these cards.

This may appear to be humorous, but it is serious. The aggregate effect of this pinpricking is unnecessary. I cannot understand why the Government are telling women that to go to a dance, to a works canteen, to appear amongst their fellow women, or to go out with their boy friend looking a little less than their best, is the right road to economic recovery. I support my hon. Friend who has my name, the Member for The Hartlepools (Mr. D. Jones), in hoping for a remission of this tax which is so unnecessary and which is doing so much harm.

Mrs. Lena Jeger (Holborn and St. Pancras, South)

I rise to support the Amendment. Nothing we have heard from the Government can justify the penal tax of 90 per cent. As long as there is Purchase Tax, none of us on this side would claim special consideration for cosmetics and this class of goods, but we are asking that the tax should stay at 75 per cent. I should have thought that that would have been enough to satisfy the tax collectors. I am very puzzled about the source of the feminine advice on which the Treasury acts in these matters. [An HON. MEMBER: "Lady Docker."] I cannot think to whom they are looking for advice and I should like to give the Financial Secretary a little information.

The life of every normal woman is a constant fight between the Dorcas and Jezebel influences and in this constant fight we are not at all helped by the Treasury Bench. The good housewife wants to go and buy a pot scourer to keep her saucepan cleaner. I should be out of order if I pursued that. However, she is receiving nothing but discouragement in her good housewifely intentions and one might therefore be led to the conclusion that hon. Gentlemen opposite are more interested in women pursuing more light-hearted purchases. But no, the girl who wants to go and buy herself a lipstick or "home perm" meets with the same disapproval from the Treasury Bench, and the women of this country have to ask themselves, "What do right hon. Gentlemen opposite want of us?"

This is not solely a feminine problem. It is not only women who spend money on these articles. The articles within this range form the most acceptable presents. I am referring especially to perfume. For myself, I never use it unless it has been given to me. It is a sad woman who buys her own perfume, and I hope that hon. Gentlemen opposite will pay attention to the impact which they will feel in their personal economies from this increase in tax.

It may be that it is very impudent of working-class girls to want to look nice. I often think that that must be at the back of these arguments, because women who are living on a fair margin of personal expenditure are not very much worried when lipstick goes up by 1s. and face powder by 1s. 9d. But it is important to the young working girl. Any woman worthy of the name has gone without lunch more than once in order to effect these very necessary purchases. Working-class girls with comparatively small incomes will be the worst hit by these increases in price.

I profoundly agree with the hon. Member for Ormskirk (Mr. Glover), who said that the tax would not discourage consumption, because women would go on buying these essential things. Of course they will, but they will be buying them only at the price of keeping down on something else and that will probably be detrimental to health and certainly not to be encouraged. The Customs and Excise definition of the goods in this class runs as follows: 'Toilet preparations' includes articles of a kind used generally for personal hygiene or cleansing. … Why should the Treasury want to discourage what seems to be a very proper pursuit of civilised living? I cannot see what public service is being served by the discouragement of personal hygiene and cleansing.

The case that has not been made out, least of all for the women, who are very logical about these matters, is that there is any connection between this sort of penal taxation and the difficulties in which the country finds itself. How can it be maintained that by making lavender water more expensive at home, automatically the volume of lavender water which we do not buy is exported? In logic, there is no connection between the two things. Our difficulties in the export market with perfume have to do with the much more fundamental problems of the traditional predominant place of France in this great industry, and have very little to do with the amount of money which the average housewife squeezes out for this kind of expenditure.

I do not think that any hon. Gentlemen opposite, when they are thinking of engaging a secretary, would be particularly attracted to a girl who came to them with unkempt hair, unmanicured nails and a neglected skin. When I look at some of their secretaries, I think that their standards are very high. What with the demands of employers with quite natural reasons and the impact of advertising, on which so much money this country has spent, it is ludicrous to suggest that there will be any serious decrease in consumption or expenditure on these goods. We must be told the reason for selecting these articles and putting them into this absurdly high tax group.

Mr. H. Hynd

May I remind my hon. Friend of the Government's argument, which she seems to have overlooked, that if a girl pays more for lavender water she will buy fewer motor cars?

Mrs. Jeger

I thank my hon. Friend for his reminder. Another illogicality is that men and women who take care of their hair will have to pay 90 per cent. Purchase Tax on the commodities which they need to help them do this, whereas, even under the new rates of tax, we can buy false beards and moustaches at a Purchase Tax of only 30 per cent. There are certain circumstances in which false beards used for theatrical purposes only can be bought tax-free. There is an unfortunate illogicality there.

Mr. Glover

Would the hon. Lady, for the comfort of the hon. Member for Rotherham (Mr. Jack Jones) and myself, tell me whether wigs are included?

Mrs. Jeger

Wigs were relieved from tax by my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) when he was Chancellor of the Exchequer.

There is to be this tax of 90 per cent. on implements used for manicure and chiropody. The wording of the Schedule is "knives and instruments." On the other hand, if one examines the other Schedules in the notice issued by the Commissioners of Excise, one finds that most knives are charged at the rate of only 30 per cent. even under the increased charges. Specialised knives such as grapefruit knives, cucumber knives, whatever they are, and oyster knives are to be charged at the rate of only 30 per cent., but chiropody knives are to be charged at the rate of 90 per cent. Where is the logic in that situation? I should like the Financial Secretary to tell us why the oyster knife should carry only 30 per cent. tax and the chiropody knife should be charged at 90 per cent. Oysters might sometimes be in greater need of the knife than the feet of the right hon. Gentleman, but I wish that we could have an explanation.

I refer now to some of the toilet preparations. There is a very narrow line between the cosmetic and the medicinal. I wish the opportunity had been taken to clear up some of the anomalies. The Chancellor intends to charge us 90 per cent. if we get sunburn and want some camomile lotion with which to relieve it, but if we use some other lotion, an un-perfumed preparation, which does not have the smell of camomile, we shall have to pay only 30 per cent. tax.

In fact, the whole Schedule is full of anomalies, contradictions and unfairness. The best thing to do is for the Government Front Bench to accept the Amendment, and then the whole situation will be cleared up.

8.15 p.m.

Mr. H. Lever

I knew that this was a bad Budget and that the Chancellor was treading on extremely dangerous ground, but until my hon. Friend the Member for Holborn and St. Pancras, South (Mrs. L. Jeger) concluded her speech I had not appreciated that he had ventured even further into dangerous pastures and that he has cast himself between the two restlessly warring personalities which, I am reliably assured, exist in every female. I can only hope that this added difficulty will bring to an end the evils which he is inflicting upon the country.

We have had little argument to support the whole idea of Purchase Tax being increased, whether in the range we are now discussing or generally. The Chancellor said yesterday, he admitted it quite freely, that all the economists were in favour of this tax; but there are other grounds for opposing it apart from that. The Chancellor, by that argument, puts me in mind of a famous judge who, towards the end of the last century, was nearly as often wrong in his decisions as the economists have been in their financial and economic judgments. If I may adapt what the Court of Appeal said of him to the economists who have advised this evil tax, I would say that to have the economists of this country on one's side is like setting out to sea on a Friday—not necessarily fatal, but most unfortunate. It is a poor argument for the inflictions of the Chancellor that he has the economists on his side.

The difficulty about economists is that they can never do anything in a simple straightforward manner. They are always indirect, over-subtle and tortuous in their reasoning. This tax is supposed to help the general situation of the country. The argument is as ludicrous as the intervention of my hon. Friend the Member for Stalybridge and Hyde Mr. Blackburn) led us to suppose. When we have too much bridge building under the Tory Government, advised by the economists, we do not stop bridge building. That would be too obvious. Instead, we put a tax on frying pans.

If too much steel is being used in building unnecessary office blocks, then the economist who is advising will tell us that the way to remedy that pressure is to make it rather more expensive to sit one's child upon a chamber pot with floral decorations. If there is excessive demand for machine tools, why, Sir Charles, you must remove your corns only at penal expense to your personal exchequer. It is an odd situation.

Having lost, as I have, the ability to address the Committee while standing on my head, I find some difficulty in arguing with economists on their own ground. Only an economist could urge that the way to reduce the cost of living was to put it up. It is freely agreed that this tax will have that effect. They do say, of course, that it will only put it up in order to bring it down—a sort of fiscal aspirin treatment for the nation. More Purchase Tax, send up the cost of living and hope that somehow, some time, it will come down again.

The Chancellor also said something which I find alarming and very discouraging. He said that the economists had urged him to pick up this weapon—not to impose a tax. Notice that, under the new enlightened economic theory, Chancellors of the Exchequer do not think in terms of duties, imposts and taxes; they think in terms of weapons. This is the final result of that enlightened economic doctrine which has enslaved the nation. Chancellors now think and speak in terms of criminal assault rather than in the language of the tax gatherer. They are always picking up weapons to deal with the unfortunately recalcitrant public who are struggling through a life of taxation and toil to make both ends meet. It is a very odd expression for the Chancellor to use, though it is extraordinarily apt to the particular tax that he has increased.

There is one final matter with which I should like to deal on the Amendment. Here is a chance for ordinary hon. Members on both sides of the Committee—I am sure that I shall command an adequate response from this side, and I am not altogether without hope that we shall have support from hon. Members opposite—who have not been misled by all this over-theoretical, economic poppycock, to assert themselves.

Some of them have. I am glad to note that the hon. and gallant Member for the Isle of Ely (Major Legge-Bourke) made a courageous stand against this iniquitous tax. He may well serve as an example to the more timid or more ambitious of his colleagues who are not prepared to give effect to their very deep feelings about this tax in the Division Lobby. That is the only way in which their expressions will take effect upon a Treasury Department as obdurate and insensitive to ordinary human feeling as the Chancellor and his advisers have shown themselves to be.

Hardly a single back-bench Member has supported the Government on any one of these Amendments. Everyone knows that this is a bad tax. All hon. Members who have not studied economic theory and, like myself, may even be in arrears with their reading of the Economic Survey from time to time—all the normal hon. Members, who know that "the king has no trousers on"—have refused to speak in favour of the tax, and those with courage have condemned it vigorously.

How is it that time and again most important Measures are carried through this House of Commons when it is plain that 90 per cent. of the hon. Members regard them as an affront to common sense and a menace to the finances and economic welfare of the nation? Surely there must be some courage shown in this matter; and this is a chance, which may not readily recur, for hon. Members opposite to distinguish themselves and make it thoroughly unpleasant for the Chancellor and his obedient minions to impose this sort of tax.

Here is an occasion for courage, despite any sacrifice they may make of their political ambitions, in connection with this Amendment—and no more than that, because I do not expect too much of them. Here is an occasion when such a sacrifice will be well rewarded, for they will derive solace and encouragement when they return home from the Division Lobbies. Their families, their friends, their wives, all the women in their constituencies, will want to know what they did about this Amendment, for, as has been rightly pointed out, this tax aims a blow at all the things that make life worth living.

It was proper and necessary that the Chancellor should overtax greeting cards—though, having removed all the grounds that are likely to lead to joy or greeting, it was a work of supererogation on his part to increase the tax on the actual greetings cards. I do not wish to say more than that it will be a deep disappointment to me if hon. Gentlemen opposite miss this unique chance to assert themselves on a relatively minor point so far as the Revenue is concerned but a major point so far as our outlook is concerned. They have a great opportunity, by supporting this Amendment, to show to the world, to their friends and to their constituents that they have some principles and that they are prepared to stand up for them, even in the Division Lobby.

Mr. Wilkins

I think it well that at this point someone should say something on behalf of the printing industry. I think I am the only representative of this industry in the Committee from the point of view of practical knowledge, that is, working knowledge in the industry itself; although I did note that my hon. Friend the Member for Salford, West (Mr. Royle) had a superb knowledge of the printing industry although he is a butcher. I presume that is because his constituency happens to be the home of the largest branch of the printing industry in this country, and I imagine that he has been well primed by some of my friends who live in that area.

I wish to be serious about what is really a serious matter. I wish to try to divert the attention of hon. Members for a moment from thoughts that may be lingering in their minds about the effect of this tax on cosmetics, although we all enjoyed the contributions from the ladies on the subject. The manufacture of those cosmetics would not have met with the success that they have had it not been for the superb ability of the printing industry to sell the commodities for the manufacturers by first-class printing.

This proposal is disastrous for the printing industry. For some years now, particularly for the last two or three years, we have been subjected, as an industry, to the most intense competition in the highest class of printing that we have ever experienced. I would remind hon. Members of the fact that bulbs are sent to this country from Holland and, in order to sell those bulbs, catalogues are produced showing how beautiful the flowers will appear when they are grown. The catalogue is a highly multi-coloured production.

I wish to discuss the effect of this tax on three-coloured printing. We have been unable successfully to compete with this new industry in Holland because, instead of the bulb growers sending their bulbs to this country and having their catalogues printed here, the catalogues have been produced and sent with the bulbs at prices which, I am advised, it is absolutely impossible for our people to compete with.

There are many technical considerations which arise on this proposal. I suggest that I could put the Financial Secretary in very grave difficulty if I asked him to decide on what might be a three-colour printing job which would be subject to this proposed 90 per cent. tax. The Tories should be well aware of this difficulty, because it is the habit of the Conservative Party to print their literature in what appears to be three colours but very often is only two colours. Red, white and blue may easily be produced by the use of only two colours provided that the appropriate kind of type is used which shows the printed article as a white print. How would the right hon. Gentleman give a definition in such a case? I believe that it will be impossible to apply this proposal without a lot of argument between the Master Printers' Federation and the Treasury. I hope that in our discussions we shall hear something from hon. Members opposite about the opinion of the Master Printers' Federation on this subject.

8.30 p.m.

I am pleading for the reconsideration of this proposal, because I believe that it will lead to the debasement of the craft in the printing industry. No one in this Committee would, I think, deny that printing, and particularly the production of printing—I am thinking now of the creative part of the job, the building of the job in the first instance—is a very highly skilled craft. The result of this proposal will be to drive prospective customers into ordering only cheap or even shoddy printing.

The menace is already with us. Printing has already become so expensive that hundreds of business firms are now resorting to the use of duplicating machinery. The printing industry is very gravely concerned about that. It views it with alarm, because it is not always easy, once a machine has been installed, to interest firms in other types of printing. For instance, the huge pools firms have their own duplicating machinery.

Is it not rather strange that the Chancellor should decide to increase the tax from 75 to 90 per cent. on the best class of work produced when, in the same Schedule, he is entirely exempting from tax, pool, lottery and sweepstake tickets unless they are provided with counterfoils for completion in manuscript? What utter nonsense all this is. The Treasury Bench has no understanding at all of the difficulties in which it is placing British industry, and, therefore, I plead with the Chancellor to look again at this proposal.

Who, in the ultimate, is going to pay this increased tax? I will quote to the Committee from a speech made during the debate on the Finance Bill on 20th June, 1950, by a well-known printer who happened to be, and still is, a Member of this House. Indeed, I am very pleased to see the hon. Gentleman on the benches opposite at this moment, and perhaps he will tell me if he still agrees with the opinion which he expressed on that occasion. I am referring to the hon. Member for Bath (Mr. Pitman). His firm bears a very highly respected name in the printing industry. In that debate, the hon. Gentleman said: When the hon. Gentleman mentions stationery, does he not realise that the tax on stationery is passed on to all these articles which he claims are exempt? Business stationery is 95 per cent. of stationery and bears virtually all the Purchase Tax in that field, and that tax is recovered in these Utility blankets, in food, and in all cost of living items of the people. The whole of that big sum of tax on stationery is actually borne by others than the payers, including the working people in their homes. That is the argument which we have been trying to advance throughout this debate on the Government's financial proposals. It is a matter for regret that, so far, we have had no contribution to the debate from the Leader of the House, because that right hon. Gentleman had a very happy time when Purchase Tax was under discussion during the debate on the Finance Bill of 1950. The right hon. Gentleman called in aid—that was the term he used—the observations of the chairman of Woolworths. He suggested that the advice of such an eminent person would be worthy of the consideration of the House. Of Woolworths, the right hon. Gentleman said: Whatever else may be said about that great organisation, it does not really cater in the most luxurious class of goods or for the wealthier section of the community. I presume we are all agreed about that. The chairman said: 'I think it appropriate to repeat the contention I uttered last year—the terrific burden the consumer public bears in the matter of Purchase Tax, increasing as it does the cost, not only of essential goods, but also of semi-essential goods'."—[OFFICIAL REPORT, 20th June, 1950; Vol. 476, c. 1230 and 1233.] We say that these increases in Purchase Tax will bear hardly upon the consuming public of this country. They will also do something more. In certain cases, and particularly in the case of the printing industry, the increase in Purchase Tax will be a disastrous thing. I wondered, as I sat here most of the time during the last two days, whether there is any hope at all that the Chancellor will give way on any single one of his proposals. If it is not too late, may I suggest that he might give the most serious reconsideration to this proposal to jump a tax, which is already extremely heavy at 75 per cent., up to 90 per cent., and in so doing tax all the better things which we in the printing industry are able to provide, not least of which are the Christmas cards now on sale in the shops.

I went into a shop in Kingsway only yesterday morning. It was obvious that the proprietors had already stuck another Purchase Tax list over the one already printed in the book, and the new ones were simply appalling. It is only when we see these things in black and white and when we come to purchase the goods that we realise exactly what the Government are doing in this connection.

When I think of all the drivel which we heard from the Front Bench below me, during those years from 1946 to 1950, when the present Government were in Opposition, and when I recall the speech of the present Lord Clitheroe, then Sir Ralph Assheton, ridiculing our proposals for this very thing in the case of Christmas cards—unfortunately, I have been unable to find a copy of HANSARD for that day, but I recall it well—I think that hon. and right hon. Gentlemen opposite have an awful nerve to come here with a proposal like this. How they hope to defend their position in the country on this issue I just do not know.

May I beg the Financial Secretary—[Laughter.]—I know it sounds pretty hopeless, but while there is life there is hope, and we do not despair of making some sort of impression on the Chancellor, although I must admit that it looks as if he is almost beyond hope. Nevertheless, I do appeal to the Financial Secretary to bring to the notice of the Chancellor the serious and very sincere observations which I have tried to make, and to ask him if he cannot do something to try to prevent this industry being severely penalised by his present proposal.

Mr. H. Brooke

I purposely waited before rising until the hon. Member for Bristol, South (Mr. Wilkins) had spoken, because I felt convinced that he had a serious and sincere contribution to make to a debate which previously had been of a lighthearted character, although I entirely agree that every hon. Member who took part in it was seriously urging a case.

In reply to the hon. Member for Bristol, South, I feel bound to say—indeed, he almost invited me to do so—that this distinction, which at first sight looks a curious one, between the greeting cards printed in three or more colours, taxed at the highest rate, and other greeting cards of a less elaborate character, taxed at the former 25 per cent. rate, was worked out during the period of the Labour Government and has been in force ever since. I agree at once that to the uninitiated it looks a very strange distinction. I understand, however, that it was the result of long consultations between the Customs and the trade, and that it was decided in the end that this was a reasonable line of demarcation. I would assure the hon. Gentleman that no change whatever in that respect has been made by this Government, and indeed the proposed rate of tax which he is now so sincerely criticising is 10 per cent. lower than the tax imposed in the time of the Government which he supported.

Mr. Wilkins

Of course, the right hon. Gentleman is talking about five years later, and one would now expect that there would have been some improvement.

Mr. Brooke

The Amendment was moved in a charming speech by the hon. Lady for Flint, East (Mrs. White), and I should like to congratulate the Opposition on selecting her for this important duty. The hon. Lady alleged that my right hon. Friend was making an attack on beauty. I hope she will accept my assurance that I am seeking to pay her a compliment when I say that she should, perhaps, have declared an interest. We all enjoyed her speech. The Amendment could not have got off to a better start than she gave it.

Mr. David Jones (The Hartlepools)

Does the right hon. Gentleman agree that the tax upon soft soap is much less than that upon cosmetics?

Mr. Brooke

I had better keep in order and not go back to previous Amendments.

At this stage I should like to describe the somewhat miscellaneous list of articles that enters into this top Purchase Tax group. It consists of picture postcards; greeting cards in not less than three colours; and pictorial calendars; equipment for dyeing, bleaching or otherwise beautifying the hair; the more specialised and less essential toilet requisites and preparations; equipment for chiropody, and a variety of other such articles. I agree that 90 per cent. is a high and punishing rate of tax, and in our calculations we have allowed for the probability that this increase of 15 per cent. may have a considerably restricting effect upon sales.

At an earlier stage in our debates I was asked what increased revenue was expected from this highest taxed group, and I said that it was expected to be only £2 million. The present revenue from this group is £19 million. It is proposed that the tax should rise by one-fifth, but we do not expect to get anything like a one-fifth increase upon the £19 million.

As the hon. Lady has said, at first sight this list comprises a rather strange and miscellaneous collection of articles. I know that she will grant me that it appears like this because it was left in a form very like this by the Government which she supported. It is quite true that at that time jewellery and furs were also included. Jewellery was taken out of it by common consent about two years ago; furs were taken out of it, also by common consent, one year ago, and yesterday the Opposition moved an Amendment against further increasing the tax upon furs, from which I take it that they are in no way criticising their absence from this list.

The fact is that it has been left with a rather curious scattering of articles, ranging from cosmetics to greeting cards.

Mrs. White

Does not the Financial Secretary agree that this is a most admirable opportunity to complete the process? Having removed jewellery and furs, all that remains for him is to remove the very articles that we are now discussing.

Mr. Brooke

I quite appreciate that the hon. Lady is criticising me for not seizing this opportunity to correct what she is denouncing as a mistake of the Labour Government, but it would be an inopportune moment to reduce the tax upon these articles when it is necessary to increase the tax over the whole of the rest of the range. If we were to omit articles from this category I am quite sure that nobody would be quicker to criticise us than some hon. Members opposite.

Mr. H. Hynd

The Financial Secretary has repeated two or three times the assertion that it was the Labour Government that drew up this list. Is he insisting upon that? Is not he aware that it was not the Labour Government who introduced Purchase Tax?

8.45 p.m.

Mr. Brooke

The Coalition Government introduced the Purchase Tax during the war. I am speaking of the way in which Purchase Tax was handed over to us when the Labour Government fell and we came into power.

The hon. Member for Cardiff, West (Mr. G. Thomas) sought to win my heart by kindly references, which I greatly appreciated, to my warm human nature. He touched me when he levelled the charge that this particular tax was discriminatory against the working class. I quickly picked up my Purchase Tax Schedules to refresh my memory. The first item that caught my eye was: Packs containing henna or other preparations for tinting the hair. I had never thought that the tinting of the hair was a mark that distinguished the working class from any other class in this country.

Mrs. White

Surely the hon. Gentleman knows the difficulty that women over the age of 45 have in obtaining employment and that they need something to conceal their age. One of the aids on which they rely is tinting to conceal greying hair.

Mr. Brooke

I congratulate the hon. Lady on the originality of her argument. Perhaps for reasons of feminine modesty she excluded face patters from her list of the odder items included in this category. I presume that they are mechanical and not human agents. I would like to assure her that throughout the Schedule that defines this tax there is no distinction between the sexes, and that articles such as hair-waving apparatus are taxable whether they apply to men or to women. She agreed that the shaving requisites of men were included.

We heard earlier in our debates that these increased taxes are specially attacked by the Opposition on the ground that they are forcing up the cost of living. I have been examining the cost-of-living schedules. I found it extremely hard to discover a single item in this highest category which affects the cost of living. [HON. MEMBERS: "Oh."]

Mr. H. Lever

The cost-of-living index.

Mr. Brooke

I meant to say "which affects the official cost of living." I want the help of the Committee in understanding why the Opposition are alleging at this moment that these articles are necessities of life while, in virtually the same breath, they assert that the policy of the Labour Government was to place the highest rate of Purchase Tax upon luxuries. It is from that dilemma that I invite hon. Members opposite to escape.

The truth is that this category of goods consists almost entirely of luxury articles. I am sorry that the hon. Member for Holborn and St. Pancras, South (Mrs. L. Jeger) has left the Committee. She threw out a suggestion that we ought to hesitate before taxing Jezebels. She said this group was suffering absurdly high taxation. She did not mention to the Committee that even the tax we are now proposing would be 10 per cent. lower than that which was existent on these very articles when the Labour Government fell.

We have heard it said that the tax will be cruel to the daughters and wives of some hon. Members, and to many other ladies. In fact, a number of these cosmetics that are taxed are of a character that are more highly valued by the purchaser the higher the price that is charged for them. [HON. MEMBERS: "How does the right hon. Gentleman know?"] I am asked how I know—I, too, have lady friends. [HON. MEMBERS: "Oh."] Perhaps if I end by saying "Not too many," it will be considered a fault on the right side.

I must put it quite seriously to the Committee that it would be entirely out of keeping with what we are otherwise doing in this Committee if we exempted this highest group in the Purchase Tax Schedules from the additional tax which my right hon. Friend thinks right to put upon the lower groups. I must say that it surprises me to hear representatives of the Labour Party in the House of Commons attacking the Government on the ground that the Government are causing hardship by putting a higher rate of tax on such articles as perfumed bath salts and eyelash curlers.

Mr. Anthony Greenwood (Rossendale)

I rise at this stage not with any intention of bringing this debate to a close, but because I want immediately to say how unconvincing we find the answer given by the right hon. Gentleman. I hope that many of my hon. Friends will follow me in replying to the points he made.

This has been a most useful, constructive, and, at times, entertaining debate, but it is a little surprising to find that, in what the Chancellor says is a serious economic situation for the country, one of his contributions to finding a cure for the country's ills is to insist on our debating not only the face patters to which the Financial Secretary referred, but also—according to the document issued by Her Majesty's Commissioners of Customs and Excise—blackhead removers and chinstraps for correcting double chins.

I would remind the Committee that, according to the same list, there will be chargeable at a rate of 90 per cent. … hair curlers … papers put up as 'end papers' or with any other indication of suitability for use in hair waving, curling, etc. … powder puffs, make-up pads … nail files … tooth brush bags, sponge … bags … soap cases … shaving mugs … denture bowls … Does the Financial Secretary really think that a denture bowl is a luxury? Of course it is not. Then there are such items as anti-midge lavender, personal deodorizers—so we can go on. From this heterogeneous collection of goods the Financial Secretary hopes to collect £2 million in taxation at what must be very nearly the same cost to the public Exchequer in paying the large number of officials who will collect it.

I enjoyed, as we always enjoy, the speech of the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke), but he was, I think, less correct in his facts than is normally the case. He was quite wrong about the traditional attitude of the Labour Party towards indirect taxation. In fact, we have always argued strongly in favour of direct taxation as being more in accordance with the principles of social justice than is indirect taxation. He was equally wrong in referring to the additions to the Schedules which were made in the régime of my right hon. Friend the Member for Leeds, South (Mr. Gaitskell). Although I do not propose to do so at present, I could read out a list of the goods which were removed from the Schedules in 1949 and 1951. It is significant that many of the goods which were freed from tax at that time are within the category of goods which are now being brought once again within the scope of Purchase Tax.

Of course, we continue to believe, as we have always believed, in a tax on luxuries, and undoubtedly many of the goods comprised in this scheme come within those categories, but we say that at regular intervals the Committee should consider the list of goods classified as luxuries for taxation purposes and should make such amendments as seem desirable in the light of the circumstances at any moment. It is surely a little unconvincing for the right hon. Gentleman to argue from a position which existed ten or five years ago. Is the most that he can say, after four years of Conservative Government and ten years from the end of the war, that the economic position of the country is no better than it was eight or nine years ago? We know that that is the case, but it is a little surprising to find the Financial Secretary admitting it from the Government Bench.

We believe that the Government are not being as flexible in this matter as they ought to be and we feel that we are obliged to contrast what some of my hon. Friends called the Scrooge-like attitude of the Treasury with the quite remarkable generosity which it showed in the Budget in April. We have to take the concessions bestowed on that occasion on the Surtax payers and the big corporations and contrast them with the niggardliness, the meanness and the pusillanimity of the tax proposals which the Chancellor has brought before the Committee tonight.

What a bunch of wet blankets the Government are. As a number of my hon. Friends have said, on the eve of Christmas we find them increasing the tax on the highest grade of Christmas card. We have been told earlier how the Government's policy in this difficult economic situation is to put up the price of the house which the young couple have to buy. My right hon. Friend the Member for Huyton (Mr. H. Wilson) told us a couple of hours ago that the Government are also putting up the price of the wedding ring which they need to get married. Now we find that the Chancellor is putting a tax upon the invitation which they send out to the guests they hope will be present at their wedding. When, after due season and in the ordinary course of events, there is an addition to the family, a further tax is levied by the Chancellor upon the announcement which is made by the proud parents. I think it is a mean and paltry attitude to adopt.

I have referred to some of the goods included in this category for Purchase Tax. The hon. Member for Ormskirk (Mr. Glover) showed an interest in the subject. I am sorry that he has left the Committee, because he would have learned something to his advantage. He asked about the provision of wigs and whether they were tax free. I am happy to inform him that not only are wigs tax-free but also eyelashes, eyebrows, curls, ringlets, plaits and switches.

Mr. D. Jones

If my hon. Friend goes a little further he will find that eyewash is taxed at the rate of 25 per cent., which is probably why the Financial Secretary is using it.

Mr. Greenwood

It may also interest hon. Members to know that although denture bowls and shaving mugs are regarded as luxuries, artificial fingernails are apparently regarded as necessities because they come within the category of goods not subject to taxation.

My hon. Friend the Member for Bristol, South (Mr. Wilkins) made a most impressive and constructive speech upon the effect of these proposals on the printing industry. My hon. Friend the Member for Salford, West (Mr. Royle) had previously tried to explain to the Financial Secretary the difficulty in which we find ourselves. In case my hon. Friend did not make himself clear—and we have certainly had no reply from the Financial Secretary—I should like to make the position crystal clear in the pellucid language of Her Majesty's Customs and Excise by reading its views on the subject, because afterwards the position will be perfectly clear to all hon. Members: Greeting cards which, apart from (a) ribbons, cords or tassels tied to the card, (b) black lettering and (c) the basic colour of the paper after its manufacture, display or bear one or two colours are chargeable with tax at 25 per cent. while those displaying or bearing, apart from (a), (b) and (c), three or more colours are liable at 75 per cent. These rates will apply whether the articles are produced in quantity for general sale or not. The paper or paper board on which designs or lettering etc. are printed can be of any colour or colours this is called setting the people free— provided that those colours are not applied by printing or similar process after the manufacture of the paper or paper board itself. The colour or colours of ribbons cords or tassels tied to the card can be ignored for the purpose of deciding whether the cards to which they are tied are within Group 34 (c) or (d). I think the Committee will now appreciate the position much more clearly and much more realistically than it did.

9.0 p.m.

The point put by my hon. Friend the Member for Bristol, South is a most serious and pertinent one, and I do not think that it had the answer which it merited from the Financial Secretary. I have in my constituency a firm engaged in the manufacture of some of the finest multi-coloured printing machines in the country. It is an old-fashioned family firm, still run in the old tradition, where the hundred or so workpeople in the firm all feel that they are members of a team doing a job of craftsmanship and producing something worth while and important in the life of the nation. These are the kind of people whose livelihood will be imperilled by this kind of foolish restriction which the Government are placing upon craftsmanship. I do not think that we can allow the Financial Secretary to get away with it without giving a more satisfactory reply to my hon. Friend.

Over and over again we have had occasion to criticise the timing of the Chancellor's proposals about Purchase Tax. Here, surely, is a classic example of disastrous timing on the part of the Treasury. The two main articles of goods included in the Schedule are two of the things for which the sale is biggest in the weeks approaching Christmas, and one would have thought that even the Treasury would have realised that the peak sale for Christmas cards is in the weeks preceding Christmas.

That is also true of cosmetics. We all know the tendency that our friends and relations have at Christmas time to give us things like bath salts and talcum powder which are no doubt intended to ensure that the spirit of sweetness, if not of light, may pervade the festive season. The firms producing these goods are placed in a most embarrassing position by this sudden impetuous decision on the part of the Treasury. They have their Christmas packaging complete and price lists issued, and now they have to start once again on the procedure of getting out new price lists, cataloguing, and all the rest of it. It is surely unimaginative for the Treasury, for the sake of the paltry return that there will be, to impose such chaos on one of our comparatively smaller industries in this country.

I am not happy about the answer which the Financial Secretary has given. I have listened to the arguments which he has put forward and I have weighed them against the rest of the Budget and against the dereliction of duty of the Chancellor and the Financial Secretary in the Budget of April, and if my hon. Friends, when they have finished this debate and made all the speeches which they feel it desirable to make, feel it necessary to divide the Committee, I for one shall warmly support their decision.

Mr. Hale

I do not think that the Committee has had the privilege of listening to a speech from the Treasury Bench similar to the one which we heard a few moments ago from the Financial Secretary to the Treasury since "Hellfire" Dashwood ceased to be Chancellor in 1762. [Laughter.] I do not find that humorous. I was trying to refer to the argument put forward by the Financial Secretary. "Hellfire" Dashwood introduced a 40 per cent. tax on cider, and when asked to explain it he asked the House to "Take it rough as it comes." That was the only argument that he put forward in defence of the tax. He was never able to explain his tax, and he was removed from the Chancellorship and appointed Keeper of the Wardrobe. It may well be that the talents of the Financial Secretary might also find some other employment.

The Financial Secretary was a little ungenerous to me yesterday and for that reason I am most reluctant to intervene at all. He told the Committee that I had spoken for about half an hour, on a subject of importance to my constituents. It was the first time that I had opened my mouth in this Chamber for about five months and I thought that that reticence might have been appreciated.

I spoke, according to the OFFICIAL REPORT, for twelve minutes but I suppose that an extra 150 per cent. is of no great consequence to the Financial Secretary. The right hon. Gentleman's attitude apparently seemed to be that it was a gross intrusion of Oldham and, still worse, of Wigan to enter into discussions which were the concern of the City of London. But if the Financial Secretary had taken time off a fortnight ago to take a tour of the back streets round Threadneedle Street he would have found a lot of stockbrokers' sons wheeling in prams guys which bore a remarkable resemblance to him. The City is not pleased with this Measure, and I do not know who is.

This argument—and I call it an argument as a matter of courtesy—is one which I hope will not be used again. The Financial Secretary said that some of these taxes were imposed by Labour ten years ago. We have had two Elections since, two fought on "Tory Freedom Works," two fought on "Set the People Free," two in support of propaganda that hon. Members opposite, the Lobby fodder who will vote almost to a man, with the exception of the hon. and gallant Member for the Isle of Ely (Major Legge-Bourke)—

The Temporary Chairman (Major W. J. Anstruther-Gray)

I hope that the hon. Member will address himself to the Amendment as soon as may be.

Mr. Hale

Could I ask for your guidance, Major Anstruther-Gray, in this matter? It is important. If it is in order for the Financial Secretary to say that one of the reasons for these taxes is that the Labour Government imposed them ten years ago and the Labour Government defended them, is it not in order for me to reply?

The Temporary Chairman

As long as the hon. Member makes clear that he is dealing with the Amendment. Hitherto, there has been no mention of it.

Mr. Hale

I am much obliged and I will keep myself strictly to Christmas cards for the moment, or perhaps, if I may change my mind, try to deal with one small technical point on which I should be grateful for the assistance of the Financial Secretary. [HON. MEMBERS: "He has gone."] I hope I may say that I do not regard the exchange as one from which I shall suffer. I welcome the fact that the Economic Secretary is here. I know that he will deal with the matter seriously. It is not a matter for persiflage. It is one which places a new burden upon people. The Chancellor of the Exchequer, in answer to the question, "What did you do in the great economic crisis, daddy? "replies," I slapped 15 per cent. on Christmas cards."

I have in my hand a letter from my constituents, manufacturers of a wide range of brushes and constituents of very great reputability. It seems to me clear that the majority of these items will fall to be discussed on an Amendment to leave out paragraph (j) of a section of the Schedule but this firm says most sincerely that it is in the greatest possible difficulty in knowing what brushes are taxed and how and when and, of course, why. Naturally, we cannot hope to have an explanation of that last matter.

The letter states: The Customs and Excise have informed the British Brush Manufacturers Association that the brushware becoming chargeable for the first time is 'of a kind used for domestic purposes.' Purchase Tax Notice No. 78 states 'the question whether an article falls within a tax group is determined by reference to the character of the article itself, and not by reference to the particular purpose for which it is bought'. As I understand—I have tried to follow this through—we now have three or four, or possibly five, main categories of brushes. We have brushes used for toilet purposes, which are dealt with in Groups 30 and 31, some of which come within the Clause and some do not. We have brushes used for household purposes, which I understand will fall within the new paragraph (j) which is being amended by the Bill. Some people think the tax will be 5 per cent. and some think it will be 30 per cent. Then we have industrial brushes.

The difficulty of the definition arises in this way. In the first instance—I hope the Economic Secretary is trying to follow me, because I should like to have my mind clear on this before we move on—I understand that a toilet brush is a brush which is normally used on a human being—roughly speaking. [Laughter.] I wish my hon. Friends would not regard my most serious observations as matters for laughter. I am trying to deal with a matter of complexity. I do not know how manufacturers will deal with it.

Mr. E. Fletcher

I hope my hon. Friend is not overlooking the special rate for animal toilet brushes.

Mr. Hale

I was coming to that. There is a difference between animals domestic and ferae naturae. I understand that the definition of animals ferae naturae includes some domestic animals. For this purpose a horse has an industrial brush, a dog has a household brush and a man has a toilet brush. That is as I understand it. If the brush has some processed metal on the back, it comes under the goldsmiths and silversmiths or some other section and attracts some higher rate of duty. [HON. MEMBERS: "A lower rate."] I believe it is a higher rate. The fact that I and my hon. Friends differ about this is an indication of the difficulties which manufacturers will have. Perhaps some of my hon. Friends have in mind the human toilet, the dog toilet or the horse toilet.

Brooms come in a different class from brushes. As I understand, the household brush would normally, in ordinary comprehension, include a broom, but "broom" has a separate definition. A whole variety of brushes is shown in the Schedules as separate articles. On the other hand, if the brush is packed in an ordinary toilet case, it goes to a higher rate still.

There is very genuine difficulty for anyone who reads paragraph (a) of Group 30, because it refers to Articles designed for use in one or more of the following processes, that is to say waving, curling, setting, dyeing, tinting, bleaching, or in any way dressing or treating the hair. … One would have thought that that included brushes, but one would have been wrong. This is followed by a note referring one to Group 31, and there one comes to brushes and combs and finds that they are dealt with separately. I am trying to make this clear as I understand it, and I am sure that the Economic Secretary will try to help.

Group 30 (b) refers to: Assemblies of two or more such articles as are comprised in the foregoing paragraph, or of one or more such articles together with any other article not so comprised. Therefore, if one sells two things together, such as a brush and a pair of scissors, they come under paragraph (a). The brush and comb come within Group 31 because combs are included with brushes as human toilet apparatus. If, on the other hand, one sells not merely the apparatus of dyeing but a brush to tint it up, this being sold in a little collection, it comes under the 75 per cent. tax in Group 30.

9.15 p.m.

It may be that I am wrong. I am prone to err and I should be grateful to the Economic Secretary for such enlightenment as he can give me on this problem, which is very serious. The gravity of the matter may perhaps come more for discussion when we debate paragraph (j) and the question of when a broom ceases to be a broom and when a house broom becomes an industrial broom and how far into the backyard one must go before it becomes industrial. It is clear that if it gets to the stable and stays there, it is industrial and if it stays in the house, it is domestic. I am not sure where the line of demarcation in the backyard is.

Mr. Victor Collins (Shoreditch and Finsbury)

It has been decided that if it is a stiff broom and is 12 inches wide or more, it is industrial and if it is less than 12 inches, it is domestic, unless it has a hump, when it can be smaller than 12 inches, and still be industrial. My hon. Friend may like to have that clarification of the position.

Mr. Hale

I am grateful to my hon. Friend for that addition to my stock of information, but whether it was a clarification is open to some dubiety.

A broom seems to be hermaphrodite, partly domestic and partly industrial and, presumably, one will have to go to the Customs and Excise and submit samples and a list of one's customers who usually buy it, and if the majority buy it for domestic purposes then it will be a domestic brush.

Mr. David Renton (Huntingdonshire)

Hermaphrodite is not partly one and partly the other. It is wholly both.

Mr. Hale

That is a somewhat new definition. As I understood, it was a combination of Hermes and Aphrodite in one being and it is, of course, extremely difficult for one being to be wholly Hermes and wholly Aphrodite.

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

I ask my hon. Friend the Member for Oldham, West (Mr. Hale) to remember in this definition of hermaphrodite the old Saxon term "Will-Jill," meaning that it is neither one nor the other.

Mr. Hale

I will not attempt to deal with that point, because I may be getting to the bounds of order. I remember an authority in Punch who once advocated an amalgamation of Her Majesty's Forces as a sort of giddy hermaphrodite, soldier and sailor, too. Every time I make a humble submission without authority, the high scientific authority of the Committee is always ready to say that I am right. This gives me a confidence which I would otherwise lack.

May I just have one word about Christmas cards? I do not want to detain the Committee. The argument which the Financial Secretary put forward was perhaps the most astonishing of all the suggestions which he has made. He said that people value things by their price and that if we put 100 per cent. tax on things, they will cost more and that people will think more of them. He thinks that greetings going from one member of a family to another to call attention to the greatest of our religious festivals will be appreciated more because the Chancellor is taking a higher rake-off.

There has been a very notable and important change in the use of Christmas cards in the last few years. Organisations which have the great respect of everyone in the Committee, organisations like the United Nations International Children's Emergency Fund; organisations like the Movement for Colonial Freedom, in which I have some interest to declare—[HON. MEMBERS: "Spastics."] Yes, and, I believe, the Cancer Research Association, and so on, have used this admirable method of saying, "Here is a way by which we can convey at this time of the year, when people might well feel charitable and remember human kindliness, a reference to those activities which we are carrying out on behalf of humanity. By spending your money with us, you can substantially contribute to the work which we are doing."

That is an admirable thing. I do not know what the rate of Purchase Tax is, but I understand that they have to use a limited number of colours and a small design in order to try to escape the maximum tax. I believe that if they reproduce a picture more than a hundred years old as well, that reduces the tax. Whether a picture over a hundred years old would be appropriate to the United Nations Children's Emergency Fund is a matter of some technical consideration.

What does the Financial Secretary say in reply to all this? What he says is, in fact, what Scrooge said, "Out upon you and your merry Christmas. Christmas is all humbug. Ten years ago my partner Jacob Marley died, leaving me his sole and residuary legatee, sole heir and sole mourner." That is the answer that we get.

Mr. H. Lever

Not as attractively expressed.

Mr. Hale

The argument was put differently yesterday. Then the argument was that if we put up the price of Christmas cards people will pause before they buy them; they will consider the economic implications of the tax but if they do decide to buy they will gradually get used to the higher price. Presumably, by next Christmas they will think that it is the normal rate for Christmas cards, unless another Budget has put up the price again.

That was the argument yesterday, but it is not the argument today. Today, it is that people actually benefit by paying more; they get a higher value. The way in which they get the higher value is that instead of buying a 6d. card and sending it to their brother, they buy a 3d. card with 3d. tax and send it and they get the same sense of value, because it costs as much. That is the argument put forward today in defence of this increase as an economic proposition. It is really astonishing in view of what we are told is a major crisis.

My hon. Friend the Member for Cheetham (Mr. H. Lever) quoted the story of Mr. Justice Kekewich. There is the famous story of the man who had fifteen defences, including two alibis.

The Temporary Chairman

Order. I hope that the hon. Member will not proceed to relate that story unless it is definitely connected with the Amendment.

Mr. Hale

It is a short point. It is exactly what the Financial Secretary said, "I have two or three explanations; they all conflict; they cannot all be true because they are completely conflicting." Today's explanation is now reinforced by the suggestion, "Anyhow, people pay the tax and they are reasonable, so I should not worry." The point I was making on the story is that of the counsel who said to the jury, "You can take any explanation you like. I do not mind which it is as long as you believe one of them." He was putting a point which, on the whole, it is not proper for counsel to put; and when the Financial Secretary to the Treasury put the point that it is no responsibility of his because somebody did it before he came into office—"It is no interest of mine because it happened years ago; I am not responsible for Christmas cards; that is contained in the Budget of 1946, 1947 or 1948"—he is putting an argument which no responsible Minister ever ought to advance.

We are really getting a little tired of it. The other argument is that it has been said, "Everybody knew that there were economic difficulties even if we lied about it in April. We lied about it in April for the best of reasons, because we wanted to win the Election." My Conservative opponent did not know that there was an economic crisis, because he was promising great expansion, new schools, and so on. When I read his Election address I felt my own modest contribution of suggested reforms, weakened, perhaps, by my personal predilection for never being quite sure that any party I do not lead myself will implement my suggestions paled into insignificance.

Now, having dealt with the two minor points, I come to what is the major point. The articles which mainly fall within the scope of the present Amendment are the articles classed as toilet requisites and cosmetics. Here I wish to say seriously that it is easy to be facetious about cosmetics. It may be that they are not in great use in the House of Commons. But the toilet compact today is as much the equipment of the average factory girl as her dress, or her brush and comb, or anything else. It is part of the ordinary amenities of her life. It has come and it has come to stay.

When the Russians had to face this problem in 1918 they had to put a ban on cosmetics altogether, because they wished to concentrate on other forms of production, and they used that mechanics to try to divert production to another source. No one is suggesting that today. Today, the little toilet compact that a girl carries about with her, and which attracts 75 per cent. tax, is just as much a part of her equipment as is the razor to the average man. It is just as necessary to her and she would be lost without it. Therefore, this is quite an unnecessarily vicious tax which benefits no one. And here again the Financial Secretary has shown an economic ambivalence, on the one hand estimating what we shall get from this tax and, on the other, how it will reduce the purchases of these things.

Who will benefit by that? Will labour be driven from the cosmetic factories into the production of motor cars—or armaments? No, of course not. It will merely cause pockets of unemployment and difficulty and I imagine that people will go on buying cosmetics in spite of the 50 per cent. tax and economise on something else—probably food. But I have little doubt that they will go on buying them.

Group 32 is even more difficult because under the heading of "cosmetics" the thing has been set out by the Commissioners of Customs and Excise for the guidance of the trade including cosmetics and preparations of a comparable character. Really, these are genuine trade difficulties. What is a "cosmetic" and what is not. What is a "preparation of comparable character"? What is a disinfectant and when does it not disinfect, and so on? It includes: Face cream, cleansing creams, massage creams, including slimming or flesh forming creams, and all other toilet pastes and creams. The unfortunate thing is that we are inclined to laugh about these things, but some of them are medicinal preparations used in industry. What about the man with dermatitis? What about the man in the cotton spinning industry who wishes to avoid spinners' cancer? These things are used and they are costly. It goes on: Astringent lotions; 'after shaving' lotions, blocks (excluding blocks made substantially of alum … dusting powders, tinted or perfumed, except as specified under paragraph 2 above; face powder in all circumstances; talcum powder, except when it is of an alleviating character and untinted and unperfumed. e.g., foot powder (chargeable under Group 32 (b) (ii))); all dusting etc. powders (other than untinted and unperfumed alleviants chargeable under Group 32 (b) (ii) … Baby talcum powder, as I understand it—

Mr. F. Blackburn (Stalybridge and Hyde)

Would my hon. Friend explain what "alleviating talcum powder" is?

Mr. Hale

No, I am blowed if I will.

I noticed that an exception is baby talcum powder. I think I am right, but perhaps the experts in this matter will tell me: All dusting etc. powders … whether or not tinted or perfumed, including French chalk, fullers earth, rice starch, talc, papier poudre, kaolin and powdered soapstone, which are specially prepared for toilet use or are put up for sale with any implication by label, literature or otherwise that they are intended for toilet purposes. 9.30 p.m.

If I remember rightly, kaolin is used as a plaster. If I poultice a boil with kaolin, is that regarded as a toilet preparation, or is it not? Does anybody know? Do the manufacturers know? How is anybody to say whether it is a toilet preparation, a thing of comparable character or a thing of incomparable character. Then we come to: Lipstick, lip salve, rouge, grease-paint … Every amateur operatic and dramatic society in Oldham and elsewhere has been taxed by this proposal. It goes on: Eye lotion masks; mud packs and other toilet 'packs'; and the like; preparations made op for sale primarily as nicotine stain removers. One would have thought that the removal of such stains was not a criminal process which should be regarded as a subject for punitive taxation. It continues: … nail polishes enamels, pencils, etc., Cuticle removers, and other preparations for use in manicure or chiropody (but see Notice No. 78B as to corn cures, salves and paints). If there is one service which ought to be extended in this country, and which is wholly inadequate at the present time, it is the chiropody service. One of my hon. Friends has been talking today about old-age pensioners. Here is a service which they specially need, a service which we talked of introducing under the National Health Service. Indeed, it is a service which we have ostensibly introduced, but which is not being implemented at the moment on anything like the scale that it should. Many aged people find difficulty in walking, and a simple operation would help them a great deal. But the necessities to this end are taxed at 90 per cent.

I have no doubt that the Economic Secretary, for whom I have a great admiration, will say that if it is a corn cure, it comes out. [HON. MEMBERS: "What the corn?"] I do not know. I must again rely on my medical friend to find out what exactly is a corn. As I understand it, the sort of thing one gets on the foot is very rarely a corn. I do not know whether chilblains, growths—

Dr. Stross

Warts.

Mr. Hale

Well, there we are.

Three hundred years ago, Oliver Cromwell might have had his disfiguring warts removed, but it would have been at a heavy cost to the National Health Service. That Service would still have had to pay 90 per cent. tax on the implement for removing the warts. Then we come to: Perfumes (including solidified perfumes); anti-midge lavender; pomades and scents of all kinds; scented sachets; perfumed smelling salts; perfumed spraying fluids (except approved disinfectants—in respect of which no toilet claims of any kind are made This is really nonsense. I do not believe that there is an hon. Member on either side of the Committee who thinks that anyone in the Treasury has gone through this list carefully and tried to find out what these things mean. In some working conditions, disinfectant is an absolute necessity in order to make it possible for the workers to work. It is fantastic to visualise slaughterhouses without disinfectant.

This is the interesting thing. Under this Schedule, if a manufacturer is honest enough to say that this disinfectant serves no useful purpose, it attracts the lower tax. If he puts on the bottle a label with a statutory declaration to say that the preparation disinfects but does nothing else, he would still be absolved from this increase, but if he says, "This is good disinfectant; it does you good," then, as I understand, it attracts 90 per cent. tax, because it then becomes something that has made a claim other than a claim for disinfectant.

Mr. H. Lever

What is a toilet claim?

Mr. Hale

My hon. Friend asks what is a toilet claim; I really do not know, and I would hate to hazard a guess. It is absolutely confusing. There can be claims for toilets which have nothing to do with the toilets we are discussing. And then we come to this: floral absolutes, floral concretes and concentrated perfumery essences, either simple or mixed (whether supplied as such or as collections of ingredients in related quantities). Floral absolutes I take to be the direct extract from the flower, but if it is digitalis, then it is poison and probably comes under another section. It goes on: —and concentrated perfumery essences, either simple or mixed (whether supplied as such or as collections of ingredients in related quantities). What that means I do not know. Does it mean that if they are in a collection of other things that portion bears the tax or that the whole collection bears the tax? If not, what does it mean? To quote again: —when put up for toilet use or when supplied in conjunction with a vehicle or diluent suitable for the production of finished perfumes. (These absolutes, concretes and essences, if free from vehicle or diluent such as ethyl alcohol and when not put up for toilet use, are not chargeable. Food flavourings also are not chargeable under this Group.) The next paragraph talks about Perfumed bath salts, cubes, essences and the like (whether medicated or not), … coloured or containing pine oil, pine compounds, etc., whether or not sold as bath salts; toilet oat-meals, depilatories, perfumed deodorants and personal deodorisers. This is the final observation which I should like to make.

Mrs. Slater

Before my hon. Friend sits down, would he say where the poor consumer comes into this? Would he explain how the consumer is to know what the price of the article is, and why the matter is left so wide that the consumer will have even more burdens added because of complications being added to complications?

Mr. Hale

Of course, let us be fair to the trader about this. If the trader does not know, he would be wise to add the tax on the price of the article. If he is wrong, he can claim a refund, and if he is right he will not have lost anything. People are saying that they do not know, and the trade papers are publishing long articles in which they say they do not know.

The last paragraph really was the most frightening of all, because, when the Financial Secretary returns like a giant refreshed with new arguments, he will say that this is being done in the interests of a Spartan country. He will say that we are going to aid the health of the people by discouraging the use of these things. He will say, "You will take your deodorants and disinfectants in an unpleasant form. It will certainly form your character on the stern lines of your Victorian forebears. The Chancellor had in mind, in imposing this tax on perfumes, a new and more Spartan race arising as a result of this Budget capable of bearing burdens of the magnitude of those imposed upon it by a Tory Government."

Mr. H. Hynd

As my hon. Friend the Member for Oldham, West (Mr. Hale) said in the course of his very interesting and amusing speech, this is a subject which lends itself to a little frivolity. Since we are faced with a rather long sitting, perhaps it is just as well that we should be able to deal with it in a lighthearted way, but I hope that the Committee will not assume from the lighthearted arguments which have been adduced by my hon. Friends that there is not a serious effort behind them to make the tax more just than is now proposed.

I want to complain about the inadequate reply we have had from the Financial Secretary. My hon. Friend the Member for Bristol, South (Mr. Wilkins), who is an expert in the point of view he was putting to the Committee, gave us some very serious reasons why the printing trade should not be faced with this extra imposition, but his arguments were completely ignored by the Financial Secretary. We should have a certain amount of sympathy with the right hon. Gentleman, however. He is not the Chancellor and is obviously here tonight under strict instructions. He is limited in what he can say, and in the concessions that he is allowed to make. Nevertheless, the arguments put forward by my hon. Friend deserved some reply from him, and, if he was not armed with an adequate reply, he had ample opportunity to get a brief from the Treasury representatives for that purpose.

We also sympathise, to some extent, with the Economic Secretary, who is to reply upon this occasion, because of the very difficult task he has in harmonising conflicting arguments. We have heard hon. Members opposite saying that the result of this tax will be a reduction in our financial difficulties, and we have heard the hon. Member for Dorset, South (Viscount Hinchingbrooke) say this afternoon that the tax is not inflationary. I understood from the speech he made during the Second Reading debate that he thought it was inflationary, and that that was why he voted against the Government. Apparently, he has changed his opinion in the meantime. When hon. Members opposite try to tell us at one and the same time that Purchase Tax is not inflationary and also that it is inflationary, I can understand the dilemma in which the Minister finds himself.

There was also a very inadequate reply from the Financial Secretary in the case of toilet articles. He confined himself to stating repeatedly that it was the Labour Government which were responsible for those articles being included in the Schedule. The Labour Government did not introduce Purchase Tax and did not draw up these Schedules. They made certain alterations in those groups, and if the argument from the Treasury Bench is to be that it is impossible to alter the list of articles in the various groups, it is contradicting itself, because it has already made an alteration in the groups by bringing household articles within the tax range. That is a definite alteration in the list of articles, and if that alteration can be made I suggest that it would be equally easy to remove from this highest group some of the articles about which my hon. Friends have been complaining.

It is rather strange that no voice has been raised from the benches opposite in defence of the proposal we are attacking, except the official voice of the Front Bench. I should like to hear some hon. Members opposite explain why they are supporting the Chancellor in the action which he is taking. When my hon. Friend the Member for Rossendale (Mr. Anthony Greenwood) said that the Financial Secretary's reply was unconvincing, he was guilty of a gross understatement.

9.45 p.m.

The Amendment is part of our attack on the Budget, which we believe will put up the cost of living in flat contradiction to the speeches that were made by Government supporters at the General Election. They said that above everything else they stood for a reduction in the cost of living. They would bring down prices—

Mr. Lewis

And in 1951.

Mr. Hynd

Yes. My hon. Friend reminds me that Government supporters said the same thing in 1951. They said that they would reduce taxation. They are doing the very opposite. We complain about that, and we intend to insist, as far as we possibly can by our votes, upon this small adjustment being made.

Mr. Percy Holman (Bethnal Green)

I am sorry that I was not present during the whole speech of the Financial Secretary to hear what he said about greeting cards, showcards and calendars. I heard him say that the tax had been carefully worked out with the trade, but that was many years ago. As one who is closely associated with the Joint Committee of the Stationery and Allied Trades, I can tell him that for years the trade has been getting more and more dissatisfied with the present arrangements.

The Budget is presumed to be part of a policy to damp down consumer demand, yet we can have tax-free as much beautiful printing as we like for advertising and to help to sell goods, while there is a 90 per cent. duty on beautiful printing, which means multiple-colour work, for human, decent reasons and not for profit making or selfish purposes, such as for Christmas, birthday greeting cards and things for the more humanitarian side of life.

On this side of the Committee we realise that beautiful printing ranks very close to any other art. Many countries are surpassing us in this respect. The export trade for greeting cards is limited, unfortunately, by quotas in the case of Australia, and it may be adversely affected financially for other parts, but the trade can extend within the English-speaking world. The cost of production for the home market regulates to a large extent the volume of the export trade in multi-coloured work of this character. It is work of the best quality, which it is not likely to be economical to produce for smallish communities where there is only a limited demand for it. That is where our opportunity lies for developing further the export trade in multi-coloured printing.

I appeal to the Treasury Bench to reduce the tax, if not now, then next April, on an essentially artistic side of printing. I remind them that they are going back on every promise they made, including promises to the trade. I am sorry that the Minister of Pensions and National Insurance is not here. [HON. MEMBERS: "Where is he?"] When the Tories were in Opposition in 1951, he said: The Opposition have gone further than that"— He referred to the statement from the then Government benches that we believed in the steady, gradual reduction of Purchase Tax— and have said that had we been in office during the last six years Purchase Tax would long ago have disappeared."—[OFFICIAL REPORT, 19th June, 1951; Vol. 489, c. 362.] We have had five years of Tory Government. They now tell us that the financial position is at least nine-tenths as bad as it was in 1951.

Mr. George Brown (Belper)

Nine-tenths worse.

Mr. Holman

The tax is to be 90 per cent. now, as against 100 per cent. then. The Government are now legislating for the largest income from Purchase Tax in our history—£400 million. They are going back to the penal levels of taxation which, in the case of Rolls Royce motor cars and furs, for different reasons, we were compelled to reduce from 100 per cent. to 50 per cent. because the lack of the home market—in the case of the cars—was killing the export trade.

In normal conditions, we cannot continue indefinitely to tax commodities at the rate of 90 per cent. To me, that is a sign that the crisis is far worse than the Government are willing to admit. They say that they do not need the revenue. In that same speech in 1951 we were told by the right hon. Gentleman that it looked as though the tax was becoming permanent and that once it was looked at in that light people paid the extra price as the normal thing. The tax is inflationary; the income derived from it is small. I say to the Government, "Bring down Purchase Tax in the next Budget, because otherwise you are damaging the best part of the highest craftsmanship of British work today. You are increasing the tendency to produce inferior goods, and not helping the more artistic side of the trade. You are making the trade produce fairly shoddy goods instead of the best." I plead with the Chancellor to take all printed matter, as such, out of the highest range of tax and to bring it down to the lowest.

Mr. R. A. Butler

I should like to appeal to the Committee to come to a decision on this Amendment because there are others to be dealt with before we come even to Clause stand part. Hon. Members agreed that on Clause stand part there are general considerations to raise; and if anyone should be disappointed because he cannot express views on Purchase Tax there is the whole of the First Schedule, in which there is almost indefinite opportunity for the human mind and imagination to exercise its skill and for hon. Members who feel conscientiously to express views on behalf of constituents. In the interests of our sitting, therefore, I would ask hon. Members to come to a decision on this Amendment, which relates only to the highest part of the tax.

I have paid due attention to the points raised with great sincerity by the hon. Member for Bethnal Green (Mr. Holman). I cannot give any promise, but I do understand some of his anxieties. With this assurance, I hope that we may come to a decision on the Amendment and then proceed to the latter part of the Bill in which there is endless opportunity for further debate.

Mr. Hale

The difficulty is that the Financial Secretary rose at the Box and virtually demanded the right to speak when at least six of my hon. Friends, who had genuine constituency points to raise, had not been called. We rose afterwards and put those points. No answer has been given. I raised a point about brushes, for I am concerned, as I know are some of my hon. Friends, about the fact that these provisions will affect a very substantial industry. I know that the Chancellor is having discussions with the brush industry.

I have no desire to be obstructive, but we put a whole series of questions, and now the Chancellor rises to say, "We have had enough. We will not answer the questions. Let us finish the debate and get on with something else." Surely an answer to the main points would be eminently proper at this stage. I asked for some information. If it is promised at a later stage I shall be grateful. There is a genuine dilemma about the effect of these provisions on brushes. No one knows where the line of demarcation is.

Mr. Butler

It so happened that I was absent from the Committee during the speech of the hon. Member for Oldham, West (Mr. Hale), although I have not been absent very much during the last two days. The point about brushes was brought to my attention, just as was the point about slippers, about which I should like to say something later tonight. All these points are genuine, but anything like the point about slippers, which is an anomaly which can be dealt with, will be looked at.

I have already been told, outside the Chamber and by my hon. Friends inside the Chamber, about the hon. Member's speech. All I can do is undertake that I will look into this curious position, which is one of the many curious positions in which any Chancellor of the Exchequer is landed in trying to defend Purchase Tax in its present form. I can assure the hon. Member that that is a very difficult task. If he will accept that, I will undertake to look into the point which he raised.

Mr. B. T. Parkin (Paddington, North)

I should gladly have done nothing to obstruct the conclusion of this part of the debate if the Chancellor had done what for a moment I hoped he was about to do—repair the very serious damage done by the weak speech of the Financial Secretary. Because of the attitude of the Government Front Bench it has been necessary for hon. Members to make again the points which were obviously wasted on the Financial Secretary. The way in which the serious and considered speeches of my hon. Friends, especially that of my hon. Friend the Member for Bristol, South (Mr. Wilkins), were virtually ignored by the Financial Secretary amounted to an insult. Hon. Members have the right to a serious reply.

I have been here throughout the whole of these debates and, like my hon. Friends, have noticed a very interesting pattern of opinion building up on the other side of the Committee. The Chancellor himself just used a very interesting phrase, in which he said he found it very difficult to defend the present structure of Purchase Tax. Again and again criticisms from this side of the Committee of anomalies are greeted with flippancy or ribaldry and receive no answer at all, but the right hon. Gentleman and his colleagues—all three of them—have been at the Treasury for a considerable time and they ought to have been able to find out the significance of these differences in Purchase Tax at the time they were introduced.

They still seem quite unable to realise that Purchase Tax, if it is to be used intelligently, must be flexible and adaptable to the needs of the moment. It is one thing to say, at the end of a war, that we must impose some restrictions on certain industries in order that others may recover, and quite another thing to continue for ten years those restrictions to such an extent that the training and re-equipment needed for the best quality of work in the industry are held back.

The Government owe us a serious and considered reply to the points made on behalf of the printing trade. Points have been made about other industries, too, and it has been emphasised that if we penalise the best work we are harming the training of apprentices and lowering the standards of the country. My hon. Friends have spoken of the important work done by the great printing firms. A short time ago, at a social function connected with my old university, I was sitting next to no less a person than the university printer. He is a very important person, in charge of a very important press, but he started as an apprentice in a small firm. Indeed, these big firms can exist only because they can recruit their personnel and their skill from a wide area. All the time these restrictions are enforced on that industry it means that certain firms, certain apprentices and certain workers are being deprived of the opportunity of developing the best skills in their trade. That is why I hope that the Chancellor will not treat these anomalies with flippancy.

I too can take this booklet and read out silly nonsense. There is a bit about the reproduction of pictures more than 100 years old, and a piece of solemn advice by the Commissioners to the trader to authenticate that the picture is in fact more than 100 years old before charging it at the lower rate. There is a further paragraph and a warning that a trader must not imagine that he can sell at the lower rate a reproduction of a piece of sculpture. If it is of three dimensions the tax is at a different rate.

The Chancellor knows about these things better than we do. He has had years in which to study them. Why has he not tidied them up before? Why has he not inquired what their significance was when these distinctions were made—unless he is trying to build up in the minds of his supporters on that side of the House the idea that sooner or later, when we have had Purchase Tax put up steadily in Budget after Budget, we shall have reached a stage when he can say that a general sales tax can now be imposed with the consent of the whole country, because the country will be ready for it.

Many hints have been given to that effect. Questions have been asked. The Chancellor would certainly cut short the discussions if he intervened now and told us what is his long-term view on the sales tax, and whether he now agrees with the view put forward by his party, as quoted by my hon. Friend, four or five years ago, when it held the view that the counter-inflationary effect of the Purchase Tax was lost once the public had got used to it.

Mr. R. A. Butler

I can help the hon. Gentleman and the Committee immediately by saying that the only opportunity to make a general statement of that sort is when we debate the Question, That the Clause stand part of the Bill. I should be out of order in doing it on this Amendment. I will, of course, pay attention to what the hon. Gentleman has said, particularly as he once came from Gloucestershire, a county with which I have many affinities, and I will attempt to be sympathetic to some of his ideas.

Mr. H. Hynd

Can the Chancellor elaborate the remark which he made a moment ago when he appealed to the Committee to get on in view of the assurance he had given on the question of printing? I did not understand that he had given any assurance beyond a general remark to the effect that he understood the point which my hon. Friend the Member for Bristol, South (Mr. Wilkins) and others had made. That did not seem to me to constitute an assurance. Perhaps I misunderstood him. If he can define what he meant it would help this side of the Committee.

Mr. Butler

The hon. Member's interpretation is perfectly correct. I did not give an assurance that I would give a concession on this occasion in this debate. I simply said that I understood the extreme discomfort of the trade, to which the hon. Member referred, which has always been a source of considerable anxiety to me, particularly owing to the difficulty in which stationery lies as between the 30 per cent. and the 90 per cent. and all this question of colouring and everything else of which I am fully aware. I only gave an assurance that I would

like to study what he said with a view perhaps on a future occasion of being able to do something about it. I can absolutely give no assurance to the Committee, and I would be quite dishonourable if I said that we proposed to do anything tonight.

Question put, That the words proposed to be left out stand part of the Clause:—

The Committee divided: Ayes 270, Noes 228.

Division No. 46.] AYES [10.5 p.m.
Agnew, Cmdr. P. G. Donaldson, Cmdr. C. E. McA. Hutchison, James (Scotstoun)
Aitken, W. T. Doughty, C. J. A. Hyde, Montgomery
Allan, R. A. (Paddington, S.) Drayson, G. B. Hylton-Foster, Sir H. B. H.
Alport, C. J. M. Dugdale, Rt. Hn. Sir T. (Richmond) Iremonger, T. L.
Amery, Julian (Preston, N.) Duncan, Capt. J. A. L. Irvine, Bryant Godman (Rye)
Arbuthnot, John Duthle, W. S. Jenkins, Robert (Dulwich)
Armstrong, C. W. Eden, Rt. Hn. Sir A. (Warwick & L'm'tn) Jennings, J. C. (Burton)
Ashton, H. Eden, J. B. (Bournemouth, West) Jennings, Sir Roland (Hallam)
Atkins, H. E. Emmet, Hon. Mrs. Evelyn Johnson, Dr. Donald (Carlisle)
Baldock, Lt.Cmdr. J. M. Errington, Sir Eric Johnson, Eric (Blackley)
Baldwin, A. E. Erroll, F. J. Kaberry, D.
Balniel, Lord Farey-Jones, F. W. Keegan, D.
Banks, Col. C. Fell, A. Kerby, Capt. H. B.
Barber, Anthony Finlay, Graeme Kerr, H. W.
Barlow, Sir John Fisher, Nigel Kershaw, J. A.
Barter, John Fleetwood-Hesketh, R. F. Kirk, P. M.
Baxter, Sir Beverley Fletcher-Cooke, C. Lagden, G. W.
Beattie, C. Fort, R. Lambert, Hon. G.
Bell, Ronald (Bucks, S.) Foster, John Lancaster, Col. C. G.
Bennett, Dr. Reginald Fraser, Hon. Hugh (Stone) Langford-Holt, J. A.
Bevins, J. R. (Toxteth) Freeth, D. K. Leather, E. H. C.
Bidgood, J. C. Galbraith, Hon. T. G. D. Leavey, J. A.
Biggs-Davison, J. A. Gammans, L. D. Leburn, W. G.
Birch, Rt. Hon. Nigel Garner-Evans, E. H. Legh, Hon. Peter (Petersfield)
Bishop, F. P. George, J. C. (Pollok) Lindsay, Hon. James (Devon, N.)
Body, R. F. Glover, D. Lindsay, Martin (Solihull)
Bossom, Sir A. C. Gower, H. R. Linstead, Sir H. N.
Boyle, Sir Edward Graham, Sir Fergus Lloyd, Maj. Sir Guy (Renfrew, E.)
Braine, B. R. Grant, W. (Woodside) Lloyd-George, Maj. Rt. Hon. G.
Bromley-Davenport, Lt.-Col. W. H. Grant-Ferris, Wg. Cdr. R.(Nantwich) Lucas, P. B. (Brentford & Chiswick)
Brooke, Rt. Hon. Henry Green, A. Lucas-Tooth, Sir Hugh
Brooman-White, R. C. Grimston, Hon. John (St. Albans) Mackeson, Brig. Sir Harry
Browne, J. Nixon (Craigton) Grimston, Sir Robert (Westbury) McKibbin, A. J.
Bryan, P. Gurden, Harold Mackie, J. H. (Galloway)
Buchan-Hepburn, Rt. Hon. P. G. T. Harris, Frederic (Croydon, N. W.) Maclay, Rt. Hon. John
Bullus, Wing Commander E. E. Harrison, A. B. C. (Maldon) McLean, Neil (Inverness)
Burden, F. F. A. Harvey, Air Cdre. A. V. (Macclesfd) Macleod, Rt. Hn. Iain (Enfield, W.)
Butcher, Sir Herbert Harvey, John (Walthamstow, E.) Macmillan, Maurice (Halifax)
Butler, Rt. Hn. R. A. (Saffron Walden) Hay, John Macpherson, Niall (Dumfries)
Campbell, Sir David Head, Rt. Hon. A. H. Maddan, Martin
Carr, Robert Heald, Rt. Hon. Sir Lionel Maitland, Cdr. J. F. W. (Horncastle)
Cary, Sir Robert Heath, Edward Maitland, Hon. Patrick (Lanark)
Channon, H. Henderson, John (Cathcart) Markham, Major Sir Frank
Chichester-Clark, R.
Clarke, Brig. Terence (Portsmth, W.) Hicks-Beach, Maj. W. W. Marlowe, A. A. H.
Cole, Norman Hill, Rt. Hon, Charles (Luton) Marples, A. E.
Conant, Maj. Sir Roger Hill, Mrs. E. (Wythenshawe) Marshall, Douglas
Cooper, Sqn. Ldr. Albert Hill, John (S. Norfolk) Mathew, R.
Cordeaux, Lt.-Col. J. K. Hirst, Geoffrey Maude, Angus
Corfleld, Capt. F. V. Holland-Martin, C. J. Maudling, Rt. Hon. R.
Craddock, Beresford (Spelthorne) Hope, Lord John Mawby, R. L.
Crookshank, Capt. Rt. Hn. H. F. C. Hopkinson, Rt. Hon. Henry Maydon, Lt.-Comdr. S. L. C.
Crosthwaite-Eyre, Col. O. E. Hornsby-Smith, Miss M. P. Medlicott, Sir Frank
Crouch, R. F. Horobin, Sir Ian Milligan, Rt. Hon. W. R.
Crowder, Sir John (Finchley) Howard, Gerald (Cambridgeshire) Moison, A. H. E.
Crowder, Petre (Rulslip—Northwood) Howard, Hon. Greville (St. Ives) Morrison, John (Salisbury)
Cunningham, Knox Howard, John (Test) Mott-Radclyffe, C. E.
Currie, G. B. H. Hudson, Sir Austin (Lewisham, N.) Nabarro, G. D. N.
Dance, J. C. G. Hudson, W. R. A. (Hull, N.) Nairn, D. L. S.
Davidson, viscountess Hughes Hallett, Vice-Admiral J. Neave, Airey
D'Avigdor-Goldsmid, Sir Henry Hulbert, Sir Norman Nicholls, Harmar
Deedes, W. F. Hurd, A. R. Nicholson, Godfrey (Farnham)
Dodds-Parker, A. D. Hutchison, Sir Ian Clark (E'b'gh, W.) Nicolson, N. (B'n'm'th, E. & Chr'ch)
Nield, Basil (Chester) Robertson, Sir David Thompson, Kenneth (Walton)
Noble, Comdr. A. H. P. Rodgers John (Sevenoaks) Thompson, Lt.-Cdr. R. (Croydon, S.)
Nugent, G. R. H. Roper, Sir Harold Thornton-Kemsley, C. N.
Oakshott, H. D. Ropner, Col. Sir Leonard Tilney, John (Wavertree)
O'Neill, Hn. Phelim (Co. Antrim, N.) Russell, R. S. Touche, Sir Gordon
Orr, Capt. L. P. S. Schofield, Lt.-Col. W. Turton, Rt. Hon. R. H.
Orr-Ewing, Charles Ian (Hendon, N.) Scott-Miller, Cmdr. R. Vaughan-Morgan, J. K.
Page, R. G. Shepherd, William Vickers, Miss J. H.
Pannell, N. A. (Kirkdale) Simon, J. E. S. (Middlesbrough, W.) Vosper, D. F.
Partridge, E. Smithers, Peter (Winchester) Wakefield, Edward (Derbyshire, W.)
Peake, Rt. Hon, O. Soames, Capt. C. Walker-Smith, D. C.
Pickthorn, K. W. M. Spearman, A. C. M. Wall, Major Patrick
Pitman, I. J. Speir, R. M. Ward, Dame Irene (Tynemouth)
Pitt, Miss E. M. Spence, H. R. (Aberdeen, W.) Waterhouse, Capt. Rt. Hon. C.
Pott, H. P. Spens, Rt. Hn. Sir P. (Kens'gt'n, S.) Watkinson, H. A.
Powell, J. Enoch Stevens, Geoffrey Webbe, Sir H.
Price, David (Eastleigh) Steward, Harold (Stockport, S.) Whitelaw, W. S. I.(Penrith & Border)
Prior-Palmer, Brig. O. L. Steward, Sir William (Woolwich, W.) Williams, Gerald (Tonbridge)
Profumo, J. D. Stewart, Henderson (Fife, E.) Williams, Paul (Sunderland, S.)
Raikes, Sir Victor Stoddart-Scott, Col. M. Williams, R. Dudley (Exeter)
Ramsden, J. E. Storey, S. Wills, G. (Bridgwater)
Rawlinson, P. A. G. Stuart, Rt. Hon. James (Moray) Wilson, Geoffrey (Truro)
Redmayne, M. Studholme, H. G. Wood, Hon. R.
Rees-Davies, W. R. Summers, G. S. (Aylesbury) Woollam, John Victor
Remnant, Hon. P. Sumner, W. D. M. (Orpington) Yates, William (The Wrekin)
Renton, D. L. M. Taylor, Sir Charles (Eastbourne)
Ridsdale, J. E. Taylor, William (Bradford, N.) TELLERS FOR THE AYES:
Rippon, A. G. F. Thomas, Leslie (Canterbury) Colonel J. R. Harrison and
Roberta, Peter (Heeley) Thomas, P. J. M. (Conway) Mr. Godber.
NOES
Ainsley, J. W. Dodds, N. N. Janner, B.
Albu, A. H. Donnelly, D. L. Jeger, George (Goole)
Allaun, Frank (Salford, E.) Dugdale, Rt. Hn. John (W. Brmwch) Jeger, Mrs. Lena (Holbn & St. Pnos, S.)
Allen, Arthur (Bosworth) Dye, S. Jenkins, Roy (Stechford)
Allen, Scholefield (Crewe) Ede, Rt. Hon. J. C. Johnston, Douglas (Paisley)
Awbery, S. S. Edelman, M. Jones, Rt. Hon. A. Creech (Wakefield)
Bacon, Miss Alice Edwards, Rt. Hon. Ness (Caerphilly) Jones, David (The Hartlepools)
Balfour, A. Edwards, Robert (Bilston) Jones, Elwyn (W. Ham, S.)
Bellenger, Rt. Hon. F. J. Edwards, W. J. (Stepney) Jones, Jack (Rotherham)
Bence, C. R. (Dunbartonshire, E.) Evans, Albert (Islington, S. W.) Jones, J. Idwal (Wrexham)
Benn, Hn. Wedgwood (Bristol, S. E.) Evans, Edward (Lowestoft) Jones, T. W. (Merioneth)
Benson, G. Evans, Stanley (Wednesbury) Kenyon, C.
Beswick, F. Fernyhough, E. Key, Rt. Hon. C. W.
Bevan, Rt. Hon. A. (Ebbw Vale) Flenburgh, W. King, Dr. H. M.
Blackburn, F. Fletcher, Eric Lawson, G. M.
Blenkinsop, A. Forman, J. C. Lee, Frederick (Newton)
Blyton, W. R. Fraser, Thomas (Hamilton) Lee, Miss Jennie (Cannock)
Boardman, H. Gaitskell, Rt. Hon. H. T. N. Lever, Harold (Cheetham)
Bottomley, Rt. Hon. A. G. Gibson, C. W. Lever, Leselie (Ardwick)
Bowden, H. W. (Leicester, S. W.) Gooch, E. G. Lewis, Arthur
Bowles, F. G. Gordon Walker, Rt. Hon. P. C. Lindgren, G. S.
Boyd, T. C. Greenwood, Anthony Lipton, Lt.-Col. M.
Braddock, Mrs. Elizabeth
Brockway, A. F. Grey, C. F. Logan, D. G.
Broughton, Dr. A. D. D. Griffiths, David (Rother Valley) MacColl, J. E.
Brown, Rt. Hon. George (Belper) Griffiths, Rt. Hon. James (Llanelly) McGhee, H. G.
Brown, Thomas (Ince) Griffiths, William (Exchange) McGovern, J.
Burke, W. A. Hale, Leslie McKay, John (Wallsend)
Burton, Miss F. E. Hamilton, W. W. McLeavy, Frank
Butler, Herbert (Hackney, C.) Hannan, W. MacMillan, M. K. (Western Isles)
Butler, Mrs. Joyce (Wood Green) Harrison, J. (Nottingham, N.) Mahon, S.
Callaghan, L. J. Hastings, S. Mallalieu, E. L. (Brigg)
Carmichael, J. Hayman, F. H. Mallalieu, J. P. W. (Huddersfd, E.)
Champion, A. J. Healey, Denis Marquand, Rt. Hon. H. A.
Chapman, W. D. Henderson, Rt. Hn. A. (Rwly Regis) Mason, Roy
Chetwynd, G. R. Herbison, Miss M. Mellish, R. J.
Clunie, J. Hobson, C. R. Mikardo, Ian
Coldrick, W. Holman, P. Mitchison, G. R.
Collick, P. H. (Birkenhead) Holmes, Horace Monslow, W.
Collins, V. J. (Shoreditch & Finsbury) Holt, A. F. Moody, A. S.
Corbet, Mrs. Freda Houghton, Douglas Morrison, Rt. Hn. Herbert (Lewis'm, S.)
Cove, W. G. Howell, Denis (All Saints) Mort, D. L.
Craddock, George (Bradford, S.) Hoy, J. H. Moss, R.
Cronin, J. D. Hubbard, T. F. Moyle, A.
Crossman, R. H. S. Hughes, Emrys (S. Ayrshire) Mulley, F. W.
Cullen, Mrs. A. Hughes, Hector (Aberdeen, N.) Noel-Baker, Francis (Swindon)
Dalton, Rt. Hon. H. Hunter, A. E. Oram, A. E.
Davies, Ernest (Enfield, E.) Hynd, H. (Accrington) Orbach, M.
Davies, Harold (Leek) Hynd, J. B. (Attercliffe) Oswald, T.
Davies, Stephen (Merthyr) Irvine, A. J. (Edge Hill) Owen, W. J.
Deer, G. Irving, S. (Dartford) Padley, W. E.
Delargy, H. J. Isaacs, Rt. Hon. G. A. Paling, Will T. (Dewsbury)
Palmer, A. M. F. Silverman, Sydney (Nelson) Warbey, W. N.
Pannell, Charles (Leeds, W.) Simmons, C. J. (Brierley Hill) Watkins, T. E.
Pargiter, G. A. Skeffington, A. M. Weitzman, D.
Parker, J. Slater, Mrs. H. (Stoke, N.) Wells, Percy (Faversham)
Parkin, B. T. Slater, J. (Sedgefield) Wells, William (Walsall, N.)
Paton, J. Smith, Ellis (Stoke, S.) West, D. G.
Peart, T. F. Snow, J. W. Wheeldon, W. E.
Plummer, Sir Leslie Sorensen, R. W. White, Mrs. Eirene (E. Flint)
Popplewell, E. Sparks, J. A. White, Henry (Derbyshire, N. E.)
Price, J. T. (Westhoughton) Steele, T. Wilcock, Group Capt. C. A. B.
Price, Philips (Gloucestershire, W.) strachey, Rt. Hon. J. Wilkins, W. A.
Probert, A. R. Strauss, Rt. Hon. George (Vauxhall) Willey, Frederick
Proctor, W. T. Stross, Dr. Barnett (Stoke-on-Trent, C.) Williams, Ronald (Wigan)
Pryde, D. J. Summerskill, Rt. Hon. E. Williams, Rt. Hon. T. (Don Valley)
Pursey, Cmdr. H. Swingler, S. T. Williams, W. R. (Openshaw)
Rankin, John Sylvester, G. O. Williams, W. T. (Barons Court)
Reeves, J. Taylor, Bernard (Mansfield) Willis, E. G. (Edinburgh, E.)
Reid, William Taylor, John (West Lothian) Wilson, Rt. Hon. Harold (Huyton)
Rhodes, H. Thomas, George (Cardiff) Winterbottom, Richard
Roberts, Albert (Normanton) Thomson, George (Dundee, E.) Woodburn, Rt. Hon. A.
Robinson, Kenneth (St. Pancras, N.) Thornton, E. Yates, V. (Ladywood)
Rogers, George (Kensington, N.) Tomney, F. Younger, Rt. Hon. K.
Ross, William Turner-Samueis, M.
Royle, C. Usborne, H. C. TELLERS FOR THE NOES:
Short, E. W. Viant, S. P. Mr. Pearson and
Silverman, Julius (Aston) Wade, D. W. Mr. James Johnson.

10.15 p.m.

The Temporary Chairman (Mr. Malcolm MacPherson)

It may be for the convenience of the Committee if the next Amendment, in page 2, line 7, to leave out certain words were taken together with the next but one, that is, in page 2, line 12. The Amendment coming in between, that is, in page 2 to leave out lines 12 and 13 and insert certain words, is not selected. If the two Amendments which I have just mentioned were discussed together, it would remain possible, if it were so desired, for a Division to be taken on each.

Mr. Hugh Gaitskell (Leeds, South)

I had supposed, Mr. MacPherson, that the Chairman would select the intervening Amendment as it is the official Amendment and we had supposed that all three would be taken together. It is rather unfortunate, if I may say so, that the middle one is not selected, because that raises a very important point, namely, that the change in the rate of tax can be made only if it is a reduction in tax and not if it is an increase. Can we not discuss all three Amendments together?

The Temporary Chairman

The matter has been considered, as I think the right hon. Member will understand, and these decisions are not lightly reached. It has been decided that the second of these three Amendments is not selected. I am not sure to what extent the substance of the Amendment can be discussed during discussion of the other two which are both being called.

Mr. Gaitskell

Since the middle one seems to be part of the point covered by the first Amendment, perhaps we can cover it by that. I do not know what my hon. Friend the Member for Islington, East (Mr. E. Fletcher) feels, but if he would be good enough to cover the second Amendment, we might proceed.

The Temporary Chairman

In effect, the Committee will have a discussion on the three Amendments together. Before calling the first Amendment, I should point out that I will call it in a form slightly different from that which appears on the Paper.

Mr. E. Fletcher

On the procedural point, I am sure, Mr. MacPherson, that the Committee appreciates the difficulty in which you are placed, but as there may have been some misunderstanding, might I suggest that we should discuss the substance of the three together? After that discussion and perhaps after the Chairman has returned, we might then consider whether, at the end of the debate, it might be desirable to divide on the middle Amendment as well as on the other two.

The whole Committee will agree that it will be most convenient if all three Amendments are discussed together, because they all relate to the same point. They deal with a point rather different from that which has been considered by the Committee during today and yesterday. In these Amendments we are not dealing with the details of the Purchase Tax, nor particular rates.

The Temporary Chairman

I should make it clear that the question of what can be done about the middle Amendment can always be raised when we have gone further in the discussion, but the situation now is that the Chairman has decided that the middle Amendment is not selected; and I have no authority to change that decision. I am calling the first Amendment and I suggest to the Committee that it might like to discuss with it the next Amendment but one.

Mr. Fletcher

The Amendments in my name are in page 2, line 7, to leave out from "Act" to end of line 13, with which we shall discuss the Amendment, in page 2, line 12, after "the" to insert "next". We will leave until later any points of order which we may wish to raise with regard to the second Amendment, that is, in page 2, to leave out lines 12 and 13 and to insert: lower rate than the operative rate whether or not such lower rate is for the time being chargeable in respect of goods of any class". The Amendment deals with a quite different matter from that which has occupied the attention of the Committee earlier this afternoon and yesterday. Here we are dealing with a matter which I venture to think the Committee will feel is of constitutional importance. I am not sure that the Committee have realised as yet what the Government are trying to do by the introduction of these words at the end of the subsection. They are trying to insinuate into the Clause a power in future to change the rates of Purchase Tax by Statutory Instrument to a far wider degree than has hitherto been permitted.

It is all very well for the Chancellor to shake his head, but we have suffered a great deal from his two Budgets this year. Parliament has been deprived of its usual opportunity to put down a series of Amendments on our financial structure. We have been deprived on two occasions of the opportunity to put down any new Clauses, and now the Chancellor is going a stage further and trying to eliminate, or to reduce, Parliamentary discussion about the changes he wants to make in future in the rates of Purchase Tax. That is very serious.

The Committee will be conscious of the widespread interest, shown not only in the Committee but in the country, in any change in the rate of Purchase Tax. If the subsection is carried in its present form the Chancellor will be able in future, by a mere Statutory Instrument, without coming to Parliament and asking for a new Finance Bill, to make drastic alterations in the rate of any category of goods to which Purchase Tax applies.

I remind the Committee how matters stand at present. It has been the case that under Section 21 of the Finance Act, 1948, the Treasury has power to change the rates of Purchase Tax in a very restricted manner. It is able to change any article from one existing rate of tax to another, but there is no power at present which entitles the Treasury, without coming to Parliament, to place an intermediate rate of Purchase Tax on any article. That was a very sensible provision which has hitherto obtained.

The Chancellor is now suggesting that he should be given power to take any commodity from all this wide range of goods, to which we have now got not merely three rates but at least six different rates of tax. Some goods are taxed at 5 per cent. and others at 10 per cent., 30 per cent., 50 per cent., 60 per cent., and 90 per cent. As the Financial Secretary said when moving the Second Reading of the Finance Bill, the object of this additional provision for which the Government are seeking authority is to enable them in future by Statutory Instrument to change an existing rate of tax, either up or down, to any intermediate rate.

In other words, in future the Chancellor can change the rate of tax on textiles, motor cars, household goods, furniture or anything else. He can take an article taxed at 5 per cent., and say that in future the rate should be 7½ per cent., 10 per cent., 12½ per cent., 15 per cent. or anything right up to 90 per cent. There can be no possible justification for that. These rates of Purchase Tax are matters of close and immediate concern to all sections of the community. It cannot be right to give the Treasury power to change the rates of tax without coming to Parliament in the ordinary way and producing a Finance Bill so that the question can be properly considered in all its aspects.

When I read the Clause—I was about to say that it was a piece of impertinence—it certainly seemed to me an audacious attitude on the part of the Chancellor. We know that he does not particularly welcome these protracted discussions on the details of the Finance Bill, but there is no excuse whatever for stifling the full opportunity for Parliamentary criticism in this way. To give the Treasury what they are seeking in this Clause is very nearly as serious as giving the Chancellor the power to raise the Income Tax by Statutory Instrument, which is something no Chancellor has yet dared to suggest.

Mr. Ede

There is time.

Mr. Fletcher

I know, but I mention the analogy only to show the seriousness of the matter.

Hitherto, no Chancellor would dare to try to slip into a Finance Bill some power giving him, by Statutory Instrument, the right to change the level of Income Tax, or Surtax, or Profits Tax, or to change the allowances. It would be contrary to all our constitutional traditions even to think of such an innovation. In my submission, it is no less serious to ask this Committee to surrender its fundamental right of control over these important matters of legislative action, and to give the Chancellor complete freedom, subject, of course, to affirmative Order. As the Committee knows, the opportunities for debating an affirmative Order are much more restricted than if the Chancellor introduces a Finance Bill. That is what the Chancellor is asking—

Mr. R. A. Butler

If the hon. Member will give my right hon. Friend an opportunity to explain, he will see that the thing is not quite so sinister as he thinks. But he must, of course, develop his own case first.

Mr. Fletcher

I think it a pity that neither the Chancellor nor the Financial Secretary, at any previous stage in our discussion, has indicated what was the real purpose of the suggestion. If there is an onus on anyone to prove the necessity for this innovation, it surely falls upon the Treasury Bench.

So far, the only observation we have had is what the Financial Secretary said in his Second Reading speech. He said that Clause 1 removes what I think is an obvious anomaly in the existing law. … These words are very ominous, because one thing we have learnt as a result of our discussions yesterday and today is that this matter introduces far more anomalies than it removes.

On the one hand, we have the Treasury resisting a whole series of Amendments proposed from this side of the Committee on the ground that they would introduce anomalies. But when it suits the Financial Secretary, he says that something would remove an anomaly. I suppose it could be argued that it would simplify matters and remove an anomaly if the Chancellor had the power to raise the rate of Income Tax by Statutory Instrument or to change the child allowance or some other allowance.

What is the suggested anomaly? I wish to quote what was said by the Financial Secretary. He said he thought that it was an obvious anomaly in the existing law, in that at present goods may have tax imposed on them at any existing rate, including the highest rate of all, by an affirmative Order but not at any new rate."—[OFFICIAL REPORT, 8th November, 1955; Vol. 545, c. 1673] Why is that an anomaly?

In the debates this year, as in previous years, we are acceding, willingly or unwillingly, to suggestions from the Government that the rates of Purchase Tax should be fixed in some respects, and that in other respects they should be changed, and there is a good deal of argument about what the rates of Purchase Tax should be. Once the rates are fixed Parliament has hitherto laid down that they are the rates of Purchase Tax which should operate, and that is a very sensible provision, because then manufacturers, merchants, wholesalers, traders and the public know where they stand; the public know at a certain time that that is the Purchase Tax they can look forward to paying on particular goods if they want to continue buying them.

10.30 p.m.

I suppose the Chancellor will tell us that it might be convenient for him to have power to do this so that he can make these changes on some occasions other than when he introduces a Budget. I am familiar with the argument that there have been occasions in the past when the Chancellor has been urged not to wait for the Budget before announcing changes in Purchase Tax, and I do not want to overlook it. But that is not an argument which the Chancellor can use. When he has been urged to mitigate the uncertainty that falls upon traders by not knowing until the Budget what, if any, changes are to be made in Purchase Tax, the argument is only on the ground of removing uncertainty; but on this occasion the Chancellor himself has introduced the maximum uncertainty to traders, he has introduced a whole range of changes in Purchase Tax at a time of the year which necessarily leads to the maximum confusion—just before Christmas. There would be less objection to it by shopkeepers and the public if it were done after Christmas, but to do it immediately before Christmas introduces the maximum confusion, the maximum dislocation and the maximum uncertainty.

Mr. W. R. Rees-Davies (Isle of Thanet)

I wonder whether I might interpose one question in this very interesting speech—which I am following, as I am sure we all are, very carefully—on a point of principle. The hon. Member said that the Committee would "surrender control" in the event of this Clause remaining as it stands. I wonder whether we could be told exactly what is meant by "surrender control". Would the method of Prayer be that used to oppose the Statutory Instrument which would then be laid, or what would be the method?

Mr. Fletcher

I will give that information if it will not bore the Committee. I thought most hon. Members were familiar with the matter. If the Treasury has power to change the rates of Purchase Tax by Statutory Instrument it is able to make an omnibus Order, and all hon. Members can do is to put down a Prayer that the whole Order shall be annulled. I thought the hon. Gentleman knew, as most hon. Members on this side know, that there is no opportunity for the Opposition—or for Government supporters for that matter—to analyse it in detail or put down Amendments to an Order.

The really insidious nature of this proposal, which the Financial Secretary has tried to slip into this Bill unnoticed, thinking that we shall all be so concerned with these objectionable increases in Purchase Tax that we shall let it go by—which we are not going to do—the offence which the Government are seeking to commit, is to give the Government power in future to change the Purchase Tax on perhaps half-a-dozen goods, perhaps on a whole range of goods, from an existing rate to a quite different rate, up or down, even up to 85 per cent. or 90 per cent., or any other figure they may choose, and to do it in such a way that all the House could do would be to have a relatively short debate, which generally comes on late at night, when the argument is confined by the rules of order, and when no amendment can be proposed.

There may be some elements in such an Order that the House would wish to support and there may be other elements that the House would wish to oppose. There is no machinery whatever under such a procedure for dissecting the objectionable from the unobjectionable and the Committee is faced with the choice of either having to accept it in toto or to reject it. That is the situation, which I think is not only intolerable, but which I think is a piece of audacious effrontery that this Committee should be asked to accept.

That is why I say that in reality the Chancellor is asking the House of Commons to surrender one of its cherished measures of control over financial legislation. We can see why the Chancellor is doing it. He realises that the country takes a great interest in these rates of Purchase Tax. That is why we are having these debates. That is why if, as at present, the Chancellor wants to change the rates he has to introduce a Finance Bill. Instead of having to put down a Prayer we can put down Amendments to oppose items which we do not like or probing Amendments to see what is the real object of the Government. We have the opportunity of dissecting the whole thing and attacking it item by item. Hon. Members from different parts of the country with different interests according to their constituencies, and according to the different industries in the constituencies they represent and the particular parts of the country they represent, are able to give expression to the views of their constituents.

Let no one doubt that although the debates we are having this week and no doubt next week—and although the Chancellor may find them a little tedious; perhaps one can forgive him if sometimes he appears to look a little tired—

Mr. R. A. Butler

Perhaps the hon. Member would permit me to say that I have very much enjoyed the debates and that had it not been for the Government's undertaking to give the House every opportunity of debate, we might have got these changes through by Order in Council on this occasion. But we thought it fairer to the House to have an autumn Budget. That is precisely why the hon. Member is having the opportunity of making his speech tonight, which I think he should. If he will give the Financial Secretary an opportunity to reply, the hon. Member may receive an explanation which I think will satisfy him.

Mr. Fletcher

In some respects I welcome that interruption. I welcome the sentiments the Chancellor has expressed. We are very glad to have his acknowledgment of the rights of Parliament to discuss this matter. We are glad to have his assertion—I do not think it is justified, but I am glad to hear that he thinks he is entitled to claim some credit for having done this by legislation and not by Order. But surely he is wrong in thinking that he could have made these changes in Purchase Tax by Order in Council.

Under the powers Parliament entrusted to the Treasury in 1948 all the Chancellor could have done would be to change some articles from one category to another. What he wanted to do with this Budget was to raise the existing rates of tax and he introduced some new rates. We have never had a 5 per cent. rate before; we have never had a 10 per cent. rate before. He had no power to do that by Statutory Instrument. The Government could not have abolished the D Scheme by Statutory Instrument. I hate to say so, but I feel that the Chancellor's observation was a little disingenuous. I admire his sentiments—

Mr. Butler

To do the hon. Member justice, his argument is quite correct. Had we wished an operation on Purchase Tax to deal with inflation we could have done it by Order in Council, but it would not have been the same operation as this, for some of the very good reasons to which the hon. Member has referred, in connection with the D Scheme and other matters. We have not powers to do that by Order in Council, but we could have put through another operation by Order in Council which would not have required legislation.

Mr. Fletcher

The further we go, the more the Chancellor and I seem to agree. The Chancellor is now saying that he could have done by Order something which he did not want to do, but he could not have done by Order what he wanted to do. I cannot see how it is relevant to the argument for the Chancellor to say that, by making an Order, he could have done something totally different which he did not want to do.

Parliament has been very careful to circumscribe what the Treasury can do by Order. I hope the House will always be very vigilant against attempts by the Treasury to slip into Bills additional powers to enable it to act by Order. We should be very vigilant in ensuring that existing rights are not exceeded or abused. The provision for which the Chancellor is seeking power in the Clause is an obvious abuse and something for which no other Chancellor would have dared to ask.

As to our first Amendment, Parliament having decided, in 1948, that the Treasury should have some limited rights to change the rates by Statutory Instrument, we are content that those rights should be reserved. I am not at the moment concerned with arguing whether that was a good or a bad thing, although personally I am not very happy about it. We are not seeking, in our Amendment, to take away any existing rights.

Parliament considered the matter in 1948. In those days there was nothing like the vigilant Opposition that there is today, and that may be why the Section was passed in that form. However, there can be no excuse for extending it and for letting the Chancellor have power in six weeks' or six months' time to increase Purchase Tax on, say, furniture from 5 per cent. to 9 per cent., 19 per cent. or any other figure. It is beyond all reason to give the Treasury such power. What would be the result? We should have no opportunity to discuss or ventilate it and no opportunity to let the Government know what the people thought about the incidence of Purchase Tax.

I hope that the first of these Amendments will be accepted. In case it is not, it was suggested from the Chair that it would be appropriate to discuss with it the next Amendment but one, leaving aside for the moment the second Amendment, with which we may want to deal separately.

The Deputy-Chairman

I understand the position to be that the three Amendments are being discussed together, but the first and third can be selected for a Division if required.

Mr. Fletcher

Thank you very much, Sir Rhys. That clarifies the position completely.

Mr. R. A. Butler

A point of great delicacy arises here, Sir Rhys. Not only did your predecessor say that there was some doubt about the selection of the second Amendment, but it is already covered by an existing statute. So it is not a very controversial matter. I suggest that we just carry on with the discussion. As we have now heard the hon. Member's argument in full, perhaps we may now proceed.

The Deputy-Chairman

I must point out that the Amendment has not yet been moved.

10.45 p.m.

Mr. Gaitskell

What you have just said, Sir Rhys, is fully in accordance with our expectations about this matter.

Mr. Fletcher

Perhaps I may continue, Sir Rhys, although the Chancellor is apparently anxious that my arguments should come to the point where I move the Amendment. It is happy suggestion of yours that we should consider the three Amendments together. I will mention the second and third briefly because I still hope, in view of the Chancellor's sympathetic reception of the arguments addressed to the Committee on the first Amendment, that it will not be really necessary to deal with the other two.

The second Amendment is less objectionable than the Clause, but not so suitable as the first Amendment. It would give the Chancellor power to lower but not to raise the rate of Purchase Tax. Why the Chancellor thought this was covered by the existing law I fail to understand. At the moment all he can do is change one rate for another. He can reduce the rate from 60 per cent. to 30 per cent., from 60 to 40 per cent. or from 10 to 7. per cent. The second Amendment would give him power by statutory Instrument to reduce the rate to some lower rate, but not to raise it without coming to Parliament.

The third Amendment is the absolute minimum for which we are entitled to ask. It would give the Treasury power, by Statutory Instrument, to increase the rate of Purchase Tax to the next higher existing rate. A rate of 5 per cent. on furniture or textiles could be increased to 10 per cent., but not to 90 per cent. or 85 per cent. Under the Clause, the Chancellor is asking us to increase the rate from 5 per cent. to 85 per cent. Surely the Chancellor could not possibly ask for more than the third Amendment proposes, that he should be able to, raise the rate to either the next higher rate or to some intervening rate between the existing and the next higher. For example, he could move something taxed at 30 per cent. to 50 per cent. but not to 90 per cent., which is what he is now asking us to do.

If it becomes necessary to do so, I have no doubt that some of my hon. and right hon. Friends will be elaborating the arguments that apply to the second and third Amendments, but I conclude by saying, as I did at the beginning, that this seems to me to be a matter of some constitutional importance, involving the rights of the House over the Executive in relation to a matter which is of very great human interest and affects all sections of the community. The Chancellor having expressed those sentiments, and wishing to observe Parliamentary propriety, I hope that he will accept the Amendment. I therefore beg to move, in page 2, line 7, to leave out from "Act" to the end of line 13.

Mr. H. Brooke

I rise at once to give the Committee an objective explanation of this subsection, which the hon. Member for Islington, East (Mr. E. Fletcher), in his long speech, failed to do. He was certainly less than fair to the Government and to me in insinuating that this provision had been slipped into the Bill without any explanation. I explained this subsection fully during the Second Reading debate, but he chose to quote to the Committee only one or two sentences out of what I then said about it.

The position is that the second of the Amendments, so far as I can ascertain, proposes to re-enact what is already enacted in Section 11 of the Finance Act, 1953. By that Act there is already power to move any article or duty down to a new rate, by order. I shall, therefore, leave the second Amendment out of consideration and confine myself to the first and third. Under Secton 21 of the Finance Act, 1948, which was passed in the time of the Government which the hon. Member for Islington, East supported, authority was given by order to exempt any goods from tax to impose tax upon any goods at one of the rates which already existed, or to move goods from one existing rate upwards or downwards to another.

Mr. G. R. Mitchison (Kettering)

I am looking at the second Amendment, which provides for goods being moved into a lower rate, whether or not such lower rate is for the time being chargeable in respect of goods of any class. That is to say, goods can be moved from their present rate to a lower rate which is not mentioned in existing legislation and which does not apply to goods of any class. Surely that is beyond the provisions of the 1948 Act.

Mr. Brooke

When I have finished what I am going to say about the first Amendment it may be necessary to revert to the second, but I should like to continue my speech upon the first, which is the one which the hon. Member moved.

Under the Act which was passed through the House on the suggestion of a Labour Chancellor of the Exchequer, it is possible to take any article which is not taxed at all and impose a tax upon it at any rate—however high—which already applies to any other article. In other words, when this Bill is passed it will be possible, under the powers of the 1948 Act, to take goods which were exempt and impose upon them by affirmative order the highest rate of 90 per cent. I understand that that is the policy which hon. Members opposite approve, but that they strenuously disapprove the suggestion contained in the subsection that goods which are now exempt—although they can be raised to bear 90 per cent. tax by order—must not be raised to bear 2½ per cent. tax, because there are no goods at 2½ per cent. tax at the present time.

It seems absurd that Parliament should enable the largest possible rise of tax to be imposed by Order, subject to affirmative Resolution, and yet should deny the possibility of making a small upward adjustment of tax unless the House goes through the whole procedure of legislation. That is an absurd position, and the provisions were introduced into the subsection to remedy that absurdity. I understand that hon. Members opposite feel that this absurdity should be retained. I want to make it perfectly clear that it is not essential for our autumn Budget that this change should be introduced and, therefore, as hon. Members opposite appear to feel strongly about it, I have my right hon. Friend's authority to accept the Amendment.

Amendment agreed to.

Motion made, and Question proposed, That the Clause, as amended, stand part of the Bill.

Mr. Anthony Greenwood

In the course of our discussions in Committee we have stated our general objections to the Purchase Tax, and we have spoken of the way in which it produces distortion of our industrial production, of the way in which it makes planning difficult, of the way in which it imposes an unfair burden on the traders and of the way in which it penalises those sections of the community which are already the hardest hit. Now we are opposing the Question, "That the Clause stand part of the Bill," in order to protest against the extension of the range of goods covered by the Purchase Tax, to protest against the increase in the tax and to protest against what appears to be the Government's intention to make this a permanent tax and even to develop it into a general sales tax.

It had always been generally expected that in the years after the war the tax would be gradually reduced, and it is surprising to find the Chancellor presiding over the present operation because his right hon. Friends have from time to time spoken about distorting the national pattern of a free economy. Indeed, they have used that as an argument against the existence of food subsidies. According to the Tories, it is wrong to have subsidies which make the price of food artificially low but right to have a Purchase Tax which makes the price of the plates off which the food is eaten artificially high. That is a reasoning which my hon. Friends cannot accept.

The Committee will not be surprised if I first address my remarks to the position of the Lancashire cotton industry. Since the right hon. Gentleman took over the reins of the Treasury in 1951, we have discussed Lancashire in the Committee on many occasions. We on this side of the Committee have tried to get a reduction in Purchase Tax on textile goods, we have tried to get alternative industry into the textile areas and we have tried to get some protection for the industry against what we believe to be unfair competition from countries overseas. I hope we shall soon have another opportunity of stating in the House the case for the Lancashire cotton industry, because already this year 50 mills have closed down. As the hon. Member for Darwen (Mr. Fletcher-Cooke) will no doubt confirm, most of the mills have less than four-fifths of their machinery working at present, nearly 30,000 operatives in the industry are on short-time and in the first nine months of this year no fewer than 28,000 insured workers left the industry.

11.0 p.m.

The result is that the average age of the workers in the industry is increasing and the recruitment of school-leavers is steadily falling. This is due partly to a fall in home demand and partly to a drop in exports. We are now going through a time of intensifying foreign competition, in which we are having to face competition from cloth and yarns produced by cheap labour out of subsidised cotton. The precariousness of the position is made even worse by uncertainty about the policy of the Americans regarding raw cotton prices—an uncertainty exacerbated by the Government's ill-advised and doctrinaire reopening of the Liverpool Cotton Exchange. Now, at what is for the industry a moment of the gravest difficulty, the Government have delivered two new blows to the industry. The first, of course, is the credit squeeze, which is making things more difficult for the industry in two ways.

The Deputy-Chairman

I think that that is getting a little wide of the Question before the Committee.

Mr. Greenwood

With great respect, Sir Rhys, and as I hope I may explain to your satisfaction in a moment, because in this Clause we are putting up the tax on the products of the industry, the argument I am adducing is that we are making it more difficult for wholesalers and retailers to hold the stocks at inflated prices when the credit facilities offered by the banks are being reduced and withheld. I think that that is not perhaps unfair, and it is also the case that the credit squeeze is making it much more difficult for the mill owners to re-equip their mills.

However, I will pass to the second blow which is directly connected with the Clause, and that is the attack on the home market by the extension of the Purchase Tax to a new range of goods. The Government's intention, apparently, is to reduce home consumption and so to encourage exports. But even if home consumption is reduced, how will that help Lancashire to compete in East and West Africa with Japanese and Indian-produced goods? It will not make any contribution at all. It is particularly unfortunate that the Government should be delivering these blows at the industry just at the time when the trade unions have accepted the principle of three-shift working, so giving a further valuable impetus to re-equipment in the industry.

At this time of intensifying foreign competition one should not overlook the fact, which I tried to put to the Committee last night, that the Purchase Tax exaggerates differences in prices. Five per cent. of a large amount is more than 5 per cent. of a smaller amount, and if cheaper cloth is coming into this country and competing with more expensive home-produced cloths, the Purchase Tax makes the differences in price even greater than they normally would be.

Because we are opposing this Clause we would not wish it to be assumed that we are, therefore, against the abolition of the D Scheme so far as clothing is concerned. In April and May, 1952, we on this side of the Committee advised the Government over and over again against the adoption of the D Scheme. We said that it would impose a heavy burden on retailers, that it would discourage the production of quality goods, that it would have a harmful effect on our export trade, and would distort the pattern of the woollen and cotton textile industry. We were told that the purpose of the scheme was to encourage exports. We are now told by right hon. Gentlemen opposite that they are abolishing the scheme to encourage the export trade. The Financial Secretary, on the Second Reading, had this to say: The D Scheme is to go entirely and I have not seen anyone closely acquainted with it who has shed a single tear on that account. The right hon. Gentleman went on: What really moved my right hon. Friend to his decision—and it was a bold decision—to abolish the D Scheme completely was the handicap it placed on export trade. We must live so largely by exporting high quality goods, the best goods that we can produce, and yet the D Scheme contained a tax incentive to make less high quality goods below the D level for sale in the home market."—[OFFICIAL REPORT, 8th November, 1955; Vol. 545, c. 1675.] What a mockery it is, after we have been saying that to the Chancellor and to hon. Members opposite in this Committee for four years, that it has only at last been realised by them that there was truth in the criticism that we made four years ago and now, having introduced the scheme to help the export trade, they are presiding over its demise to help the export trade.

It is absurd that, when industry has been clamouring for a lifebelt to be thrown to it for so long, the Government throw it only after holding the victim under water for three-and-a-half years. On 28th April, during a discussion late one night in reply to speeches by my hon. Friend the Member for Blackburn (Mrs. Castle), my hon. Friend the Member for Oldham, West (Mr. Hale), Mr. Shackleton, who then represented a Preston constituency, and others, the Chancellor said that he could not accept our proposal that a tax on a very limited range of textile goods should be abolished instead of being merely halved.

I ask the Committee to realise that that was on 28th April. Less than a week later, on 3rd May, the Prime Minister announced at the Dispatch Box that exactly what the Chancellor had told us could not be done was being done by the Government. We had this unashamed piece of electioneering on the eve of the Election—the Prime Minister telling the House that there could be done what the Chancellor had told us, with great sincerity and great firmness, a few nights before was quite out of the question.

I hope that on this occasion the Chancellor will prove himself as flexible as he did on that occasion. We make no complaint that the D Scheme is to be abolished. Our complaint is that it has taken the Chancellor four years to realise the truth of our arguments. What a pity that the Chancellor should be accompanying the abolition of the D Scheme with a 5 per cent. or 10 per cent. tax on things which previously did not carry tax at all. Now all garments, including the ones which were in the Utility range, or later came into the D Scheme, will pay tax.

On 5th November, the periodical Men's Wear said, The Chancellor, in effect, has clamped a sales tax on textiles and clothing, and although at first sight this might not appear to constitute a very serious menace, the danger is that the industry may now be saddled permanently with a tax that it should not be called upon to bear, especially in respect of those grades of merchandise which previously were granted relief. The Drapers' Record on the same date said: Henceforth the trade will once again have to contend with pettifogging fractions of pence tax on small items, with no apparent advantage to the Chancellor's coffers or to the nation, Many manufacturers, wholesalers and retailers today plan their production and sales to satisfy the public's price requirements. Abolition of the D Scheme might mean in some cases that quality will be debased if existing price levels are to be maintained. Because Purchase Tax has remained on a fairly even keel since the commencement of the D Scheme in March. 1952, manufacturers and distributors have been able to plan ahead. Last week's announcement, at the height of the season, therefore, threw the industry into a state of chaos and worsened the delivery situation. More disquieting is the effect for the future that the changes will have on the trade. By placing Purchase Tax once more in the cockpit of politics, the Chancellor has created nervousness and tension throughout the industry, which will heighten on the approach of each Budget. Those are the views of two leading journals in the textile industry, periodicals which never commit themselves to a political point of view, but both of them are most critical of the Chancellor over his policy.

My hon. Friend the Member for Bermondsey (Mr. Mellish) tabled a Question the other day asking the Chancellor the proportion of the total volume of sales of clothing, footwear and furniture wholly exempted from Purchase Tax by the operation of the D Scheme at the time of its abolition. The Financial Secretary replied: It is estimated that about five-sixths of the footwear (other than young children's footwear), and about three-quarters of the furniture sold before the Budget was free of tax by reason of the D Scheme. In the case of clothing, the proportion varied widely from one article to another …"—[OFFICIAL REPORT, 15th November, 1955, Vol. 546, c. 22.) Then the Financial Secretary told my hon. Friend that previously less than a quarter of the three-piece suits were free of tax; between a quarter and a half of the two-piece suits were free of tax and between half and three-quarters of jackets, waistcoats, cardigans and pullovers, overcoats, woollens, shirts and non-woollen vests and pants and more than three-quarters of trousers, overalls, woollen socks, and pyjamas were free of tax. All these garments will come within the tax range as a result of the change which the Chancellor has made.

Where is the evidence of an excessive demand for clothing over the last few years? I was looking the other day at a copy of The Statist for 24th September and in an article on the Government's national income and expenditure figures it pointed out that outlay in real terms on clothing in every year since the post-rationing spurt of 1950 has been below the level of 1938. It does not appear from the Government's own figures that there has been any excessive pressure on the textile industry or an excessive home demand. It is not suggested, either, by the condition of Lancashire today, evidence of which I gave to the Committee a few minutes ago.

How will it help exports to knock the bottom out of the home market, so that there is additional uncertainty in the industry, so that there is a further loss of craftsmen and a greater difficulty in recruiting? I read in the Manchester Guardian of 5th November a speech by Mr. Leslie Gamage, the president of the Institute of Export. He said: Much as I admire Mr. Butler, I must emphasise again and again that without an adequate home market we cannot export effectively or competitively. To adventure into overseas markets, with no home market behind us, is going into a fight with one hand tied behind our back. Every hon. Member with experience of the trade, like the hon. Member for Oxford (Mr. Turner) and others, will know that what Mr. Gamage said is 100 per cent. right. Of course we cannot expect to have a healthy export market when we are knocking the bottom out of the home market in this way.

There is an extraordinary lack of consistency in the Chancellor's choice of industries to help. In my view, it is difficult to find any principle of selection whatever. There are some industries which the Chancellor is helping in this Budget because he believes that it will provide him with a market basis for exports, and the idea is to encourage craft or quality goods. He is singling out for help of this kind the poorer kinds of clothing—but not furs—and glassware and silverware. Why only those? Why not furs as well? What about craft production of pottery? I hope hon. Members read in The Times yesterday a most interesting letter from a craftsman in the pottery industry about the difficulties that men of his kind are facing under the Chancellor's new proposals. Why does not the Chancellor apply it to cutlery or leather goods and to many other ranges of articles where in fact the rate has been increased?

11.15 p.m.

I should like to remind the Chancellor that in 1952 he made the Purchase Tax No. 4 Order which operated from 22nd September and reduced from 100 per cent. to 66⅔ per cent. the tax on both cut glassware and leather goods. He advocated both these changes on the ground that they would help to provide a home market as a basis for expanding exports. Now the Chancellor is in the position when he reduces the tax on glassware and increases it on leatherware. There does not seem to be very much consistency of policy on the part of the right hon. Gentleman.

If I may turn from cotton to wool, I would say that the Chancellor's proposals are not altogether an unmixed blessing for the wool industry. The Textile Mercury, in its current number, makes this criticism of the Chancellor's proposals: Woollen piece goods departments in the London stores have little to thank him for in the matter of his latest tax measures. The abolition of the D scheme and the introduction of a straight tax on woollens may be of advantage to the higher-priced quality goods, but penalises those goods in the popular price bracket, which previously came under the D level and carried no tax. Several shillings a yard are added to cloths which previously sold well at just under £1 per yard, and this rise is sufficient in the eyes of some buyers to occasion sales resistance among consumers. It expresses the fear that all woollen cloths may well be driven off the market in the department stores of the West End.

What I have said about the cotton industry applies to quite a considerable extent to the pottery industry, also. This is an industry which depends to a large extent upon craftsmen. Only 1 per cent. of the pottery industry's raw materials have to be imported, and a great proportion of its output goes overseas. I do not think anyone can deny that no industry in this country has done more to expand its exports than has this industry.

Now, when the pottery industry, like the cotton industry, is subject to increasing foreign competition, when it is facing competition particularly from Germany and Italy and to a lesser extent from Japan, the Chancellor chooses to impose a new tax on the industry and to reimpose tax on some sections of the industry's products which, for a considerable time, have been free from tax. That is not the way to encourage an industry which has played more than a fair part in developing the export trade of Great Britain.

I know it is difficult to base an argument on individual industries. But if we are to regard Purchase Tax as a planning instrument, as the Chancellor appears to regard it, surely there is a case for special treatment for industries subject to very keen foreign competition.

I was impressed the other day by a speech by the hon. Member for Yeovil (Mr. Peyton), in which he described the growing imports of gloves into the United Kingdom. He said that in the first nine months of 1953, 282,000 dozen pairs were imported, in the first nine months of 1954, 733,000 dozen pairs and in the first nine months of this year, 1,383,000 dozen pairs. That means that the number has increased five times in just about two years. It is understandable that the hon. Member for Yeovil and other hon. Members representing glove-producing constituencies should be anxious about the situation.

Purchase Tax, as I have said, always increases the disadvantage which home-produced goods are at when faced with competition from cheap goods from overseas. There is one absurdity, before I leave this industry, which has been commented upon in the Press. That is the one relating to babies' gloves, which are said to be exempt from Purchase Tax. The ruling of the Customs and Excise is interesting as showing the difficulties into which we get with taxes of this kind. It says: Any gloves having separate fingers are not exempt and are chargeable at 5 per cent. When the whole of the hand is enclosed in a 'bag' it is not a glove and is not subject to tax. Gloves with four fingers enclosed and a thumb are exempt, provided the inside thumb measurement does not exceed 1¼ inches. That is the kind of absurdity into which we get when we bring goods of that kind within the scope of Purchase Tax.

We can give many examples of anomalies which are created by this Clause, but I want to confine myself to mentioning two and I hope that the Committee will forgive me if one has a particular constituency interest of mine. My hon. Friend the Member for Flint. East (Mrs. White), in an admirable speech yesterday, stressed the difficulties that have been imposed upon the slipper manufacturing industry by the absurd distinction between lamb's wool and rabbit fur. The Chancellor undertook to look into the position which my hon. Friend revealed and I should like to emphasise to the Chancellor that the longer the uncertainty in the industry continues the greater difficulties the slipper manufacturers in my constituency will have to face. We would all be grateful if, tonight, the Chancellor were able to tell us whether he has come to a conclusion in this matter.

Another anomaly to which I should like to draw his attention also relates to shoes. I want to read to the Committee a letter which was written to The Times by Mr. E. 0. Scammell, footwear buyer to Thomas Donne, Ltd., of Corporation Street, Birmingham. It is widely believed that children's shoes are exempt from Purchase Tax. Mr. Scammell, however, said: Previous Chancellors, alive to the importance of keeping children's clothing and footwear tax free, have done this through the medium of the utility scheme and latterly the 'D' scheme. In his new Budget, however, Mr. Butler has either overlooked this or is prepared to do nothing. To the unthinking, the exemption of girls' shoes to size 3 and boys' to 5½ might make it appear that children's shoes are tax free, but when one realizes that the average girl of II would be wearing over size 3 and the average boy of 12 over size 5½., in footwear, and that many much younger than this would be wearing larger sizes, the contention that children's footwear is tax free is palpably dishonest. Those are only two anomalies which I should like to bring to the Chancellor's attention tonight.

I shall conclude by saying that before the Budget the Chancellor of the Exchequer received a good deal of advice from many organisations. One of them was the National Union of Manufacturers. On 22nd October, the Manchester Guardian told us what advice the National Union of Manufacturers had submitted to the right hon. Gentleman. It reads: … the National Union urges the Chancellor not to attempt to correct the tendency to overspending at home by additional taxation, whether directly or by an increase in purchase tax. Additional taxation is in itself one of the main causes of the country's recurring financial crises. To add to it would be a retrograde step likely very quickly to provoke another round of wage demands. It is the last sentence which I should like to commend to the Chancellor, because if he had accepted that advice and refrained from increasing Purchase Tax on this occasion, he might have been spared some of the pressure to which he is now subject.

Immediately after the Budget, many of the great unions pronounced and gave the country their views upon it. The National Union of Mineworkers issued a statement which read: Mr. Butler's proposals are an indication of the usual Tory technique and affect substantially the position of the poorer sections of the community.

The Deputy-Chairman

I am not sure that this bears upon the Question, "That the Clause stand part of the Bill."

Mr. Greenwood

With respect, the unions are basing the wage claims they are submitting upon the higher cost of living, part of which they attribute to the increased Purchase Tax included in the Clause under discussion. I do not want to weary the Committee too much, but if I may continue with that quotation, it reads: Thousands of families, because of insufficient means to provide all the domestic requirements of the kitchen and the table, and whose supply now falls short of what is required, are going to be in a worse position. This is an attempt to lower the living standards of the people. The unions in the engineering industry take much the same view. The National Union of Tailors and Garment Workers, in a colourful phrase, said that the Budget was unsurpassed as a piece of class legis- lation. Less progressive opinion on much the same lines was expressed by Time and Tide, which said, Deliberately to put up the cost of living and then to call for wage restraint shows, on the face of it, an outstanding naievity. The Observer, on the Sunday after the Budget, referring to the Purchase Tax Clause, said, The justification for the increase is somewhat difficult to see, at any rate over a very wide range of the things affected. On many of the articles the irritation caused, and the retaliation by the unions, will be more than likely to outweigh the economic interest. That is the view which we take on this side of the Committee. We believe that this Clause embodies an unfair and unnecessary proposal. We believe that it is inadequately thought out. We think it is irrelevant to the economic needs of the country, and that it is a proposal which could have the gravest consequences not only for individual industries, but for the whole economy of the country. That is why we are opposing the Clause.

Mr. Charles Fletcher-Cooke (Darwen)

The hon. Member for Rossendale (Mr. Anthony Greenwood) was very stingy in his praise of the Chancellor for abolishing the D Scheme, which had been attacked from both sides of the House for many years. It is rather ungenerous, now that it has gone, to give the Chancellor such faint praise. The abolition of this scheme was by far the best part of this Budget. It is time the Chancellor was given some praise for removing it. I regret the absence from these benches tonight of Lord Clitheroe, formerly Mr. Ralph Assheton, because he led the attack of the Conservative hon. Members from Lancashire on the D Scheme for many years.

Mr. Hale rose

The Deputy-Chairman

If an hon. Member does not give way, another hon. Member must resume his seat.

Hon. Members

Give way.

The Deputy-Chairman

Order.

Mr. Hale

I hope that the hon. Member for Darwen (Mr. Fletcher-Cooke) will realise that if he refuses the normal courtesies hon. Members on this side may find themselves reciprocating.

Mr. H. Lever

On a point of order. When an hon. Member gets up and an hon. Member who is speaking refuses to give way, is it not out of order for the hon. Member who wanted to interrupt to remain standing? Supposing another hon. Member gets up to interrupt, and the hon. Member speaking refuses to show the ordinary courtesies of debate, is that in order, Sir Rhys?

The Deputy-Chairman

There is no point of order there.

11.30 p.m.

Mr. Fletcher-Cooke

I am not usually reluctant to give way, but I had begun a short speech, after listening to a series of long speeches from hon. Members opposite which were not interrupted, and in those circumstances, since it is reciprocation that hon. Members opposite are anxious to have, I should have thought—[Interruption.]

The Deputy-Chairman

Order. I cannot hear what the hon. Gentleman is saying.

Mr. Fletcher-Cooke

I usually give way as frequently as I can. The reason I have not given way tonight is, as I indicated, because I wished to speak for only three minutes, but my speech has now already lasted for five minutes because of interruptions from hon. Members opposite—

Hon. Members

Speak up.

The Deputy-Chairman

I cannot hear either.

Mr. Fletcher-Cooke

As I was saying, I do not think hon. Members opposite are really doing justice to their case, and I was trying to answer the hon. Member for Rossendale [Interruption]—

Mr. H. Lever

On a point of order. Is it not out of order for the hon. Gentleman to speak so quietly that hon. Members on this side of the Committee cannot hear a word he is saying?

The Deputy-Chairman

I agree. I think it is equally out of order for hon. Members to make so much noise that we cannot hear him.

Mr. Fletcher-Cooke

I was attempting to say it was a pity that Mr. Ralph Assheton, as he then was—

Mr. H. Hynd

In view of what the hon. Gentleman has just said, may I ask him whether, at the recent Election, he explained to the electors of Darwen that if and when he was returned to Parliament he would support an increase in Purchase Tax?

Mr. Fletcher-Cooke

The hon. Gentleman is quite mistaken. At the time of the last budget I said unless the D Scheme was abolished—[An HON. MEMBER: "Which party was the hon. Gentleman in then?"] I was asked whether I supported an increase in Purchase Tax at the time of the General Election, and the answer is that I told the electors that I would urge, as I have always urged, for the abolition of the D Scheme. That scheme has been abolished, and I think hon. Members opposite, who agreed with me in this and who were urging its abolition, are showing a poor spirit in not congratulating the Chancellor on at least this part of the Budget, whatever else they may feel about other parts of it.

Mr. Anthony Greenwood

I am grateful to the hon. Member for giving way. I am sure he will agree that the difference between him and ourselves over the last four years has been that we have consistently voted against the D Scheme while he has done nothing but speak against it.

Mr. Fletcher-Cooke

We have certainly been speaking against it and I am glad of that corroboration from the other side of the Committee. As the hon. Member says that all along he has been opposing the D Scheme, it is only fair to Remind him that the complaint made from his benches when his attack began was not to favour of a flat rate but that the Utility Scheme was much better. But the Utility Scheme was something which penalised quality far more than the D Scheme. That is what hon. Members opposite were advocating and the repeal of it they were much regretting.

It is now no good to say, "We were always against this tax on quality," because, in fact, the Utility Scheme taxed quality much higher."—[AN HON. MEMBER: "Nonsense"] I think that that is so and any fair-minded person who reads those debates—which I well remember because they were the first which I listened to when I came to the House—will see that it was the Utility Scheme, on the usual grounds of social justice, which I quite understand, which conflicted with our export requirements.

I agree with the hon. Member for Rossendale when he says that the abolition of the D Scheme will not help the great problem which faces Lancashire industry at the moment, the problem of the importation of cheap cloth. I should like to follow him on that, but your predecessor in the Chair, Sir Charles, ruled that out of order. But abolition of the D Scheme with its frightful consequences of manufacturers, for psychological reasons, trying to get below the D line at all costs and trying to debase their cloth—must surely have an effect now on our ability to compete with the higher quality European cloths, not only in Europe but in this country as well. That is a direct help to our industry in the finer cloths and for that reason I think we should all show our appreciation of what has been done even if, like the hon. Member for Rossendale, we would like to have seen it done somewhat earlier.

Mr. Mitchison

I should like for a moment to put my foot in it by referring to boots and shoes. I can satisfy the hon. Member for Darwen (Mr. Fletcher-Cooke) by congratulating the Chancellor on the removal of the D Scheme. I would add that it ought to be have been removed long ago and, so far as boots and shoes are concerned, it ought never to have been introduced.

In a recent Answer to a Question the Financial Secretary to the Treasury made it clear that the effect on the boot and shoe trade had been to tax only one-sixth of the total production. Of course it did not tax the ordinary boot or shoe that is worn by the ordinary man; it taxed only the higher ranges in the trade. I regret very much, not that the D Scheme has been abolished, but that a tax has now been put on boots and shoes.

Surely of all the articles in the country they are about the most inelastic in demand. They are things which are bought in quantities varying a little from time to time it is true, but, on the whole, fairly steadily. The effect of putting a tax on them as far as any direct result on the export trade is concerned I believe to be very small indeed. I simply cannot see the sense of expecting any large increase in export trade by making ordinary boots and shoes dearer for people in this country.

This seems to me to be exactly the kind of case that in a quite different connection the Financial Secretary mentioned a short time ago. People will have to pay more for them, they will still have to have them even more than the Christmas cards to which he was referring, and they will buy them. Therefore, the effect of putting a tax on a commodity of this sort seems to be not to reduce inflation but to create it. It is simply putting people to a larger expenditure which they are bound to meet.

There is, of course, a way out of it. If one has to pay more for one's boots and shoes and one has to have them, one will inevitably ask for more pay in order to do so. If, at the moment, the Chancellor taxes standard commodities of this kind, it seems to me that he is expecting and encouraging wage demands.

I agree that the amount is not very large, but it is large enough to make a considerable difference to a trade which is not desperately strongly organised from the manufacturing point of view. We have already had adverse comments on the Chancellor's decision from trade organs. It should be borne in mind that they are commenting on the whole decision, the abolition of the D Scheme coupled with the introduction of the tax on boots and shoes. In its issue of 3rd November, the Shoe and Leather News said: Does Mr. Butler really think the best way to put out a fire is to add fuel to it? Its effect on our industry is thoroughly disruptive. A small proportion of high priced footwear will pay less tax. But there will be many millions of pairs of lower priced productions that will bear a tax which in the opinion of many is a monstrous imposition. Inevitably, because tax liability was immediate, there has been a general holdup in deliveries; and where there are no deliveries there is no inflow of money to meet expenses. Nor is there a good prospect, thanks to Mr. Butler's credit squeeze, of getting required help from bankers. Manufacturers, in other words, have been plunged into a complicated dilemma. The paper put it in its own way and in its own language, but that is only one of many trade papers—certainly not Labour in politics; usually, as in this case, completely non-political—which have found the Budget thoroughly unsatisfactory because, first of all, introduced as it is at this moment, it is causing the maximum disruption to trade, and, secondly, the effect on the trade is to put an additional tax on the ordinary man, in this instance on the ordinary footwear that he wears.

It is pointed out, too, that the increase in price will not be strictly confined to the increase in tax. If we add to the ordinary prices of boots and shoes an artificial percentage of this kind, we reach some odd figures which will, in fact, be evened out upwards, so the increase will be slightly more than the actual increase in tax.

11.45 p.m.

I fail to see the point of this kind of increase. The Chancellor tells us that we are in a dire crisis in our financial relations with the world and he attempts to save us by taxing toy swords and Christmas cards. I suppose he will kill the dragon of inflation with a toy sword taxed at an increased rate and will put the poor beast into one of the articles so happily described as a "pedal-operated hygienic dustbin", which, too, is taxed.

This kind of tax is highly uncertain in its effect, and in the case I have in mind seems more likely to be inflationary than the deflationary step it ought to be. Taking this one essential commodity upon which a considerable area of the East Midlands depends, I say that it will do the maximum harm to the trade, will put up prices of boots and shoes to ordinary people and will inflict a measure of hardship—not on a large scale, of course, but still hardship—that is unnecessary and out of proportion to any good it might be expected to do.

Captain Charles Waterhouse (Leicester, South-East)

It is extremely interesting to hear hon. Members on the opposite side take strong views about the boot and shoe industry and stand up for the manufacturers. That is the sort of mood that we do not expect from them, and we look forward to hearing it again in the future.

Mr. Mitchison

The right hon. and gallant Member need not be so surprised. I made an exactly similar objection on the introduction of the D Scheme.

Hon. Members

Withdraw.

Captain Waterhouse

I shall not withdraw. I do not want to withdraw my refreshment from the fact that hon. Members on the Opposition side should take that particular viewpoint. I agree with what the hon. and learned Member said about the D Scheme for the boot and shoe trade. It was a real imposition. The trade paid a relatively small tax of about £500,000 under the older scheme but about £4 million or £5 million under the D Scheme. It was an unfair and very heavy tax on the better end of the trade, making it harder for the trade to compete in foreign markets. The trade said, "Remove the D Scheme and we shall be able to develop the market in England up to a point comparable with what we can export. Therefore, we shall be able to improve our power in export markets."

This matter affects my constituents far more than the constituents of the hon. and learned Member. Nobody likes to have a tax of 5 per cent., or 1s. in the £, on trade. The bulk of the Leicester trade is in the cheaper shoes. Therefore, Leicester regrets this tax. On the other hand, I am satisfied that it is in the long-term interest of the boot and shoe trade that we should have done away with the D Scheme and have a flat tax. Any tax must affect sales and is bound to put up prices to some extent, but it is a great deal worse to have a differential tax, one range of goods carrying a higher tax and another range a lower tax. My right hon. Friend has changed his mind: I wish that we had not had the D Scheme, and I am glad that he has gone over to the 5 per cent., and has done away with the D Scheme. I hope the time will come when he will be able to do away with the tax altogether.

Miss Alice Bacon (Leeds, South-East)

I can well understand the hon. Member for Darwen (Mr. Fletcher-Cooke) having difficulty in explaining to the Committee his attitude to the D Scheme and the Utility Scheme which preceded it, because I understand that he has had to change his attitude in the last few years according to which party he happened to be standing for at the Election.

We have now spent two days discussing this Clause. I only wish that the people who went to the polls a few months ago could have been in the Chamber during the last two days and seen how the party opposite has kept its promises to reduce the cost of living. It has been said on several occasions—it was said several times yesterday evening—that the Chancellor has made these changes in Purchase Tax in order to curb inflation. If that is his objective, surely it is a very curious way of achieving it so to arrange the Purchase Tax scheme that he decreases the cost of expensive articles and increases the cost of the cheaper ones. I will give just one example of the way in which this tax has been arranged. A £27 coat is reduced in price by £2, and a £9 coat is increased in price by 10s.

It was also argued yesterday that because of the increases in Purchase Tax people would have less money available for other things, but apparently this applies only to those who are earning low wages. Last night we heard a very curious speech from the hon. and gallant Member for Worthing (Brigadier Prior-Palmer), although I agreed with a great deal of what he said. He talked about the difficulty experienced by the man earning £8 a week, having to keep himself, his wife and, perhaps, two or three children. He also referred to the difficulties of those people living on small fixed incomes, and asked us how we would like to try living on £100 a year. I would remind hon. and right hon. Gentlemen opposite that quite a few million of our people are living on £100 a year—our old-age pensioners. We are wondering whether anything will be done in the very near future to help them with the increases they will have to pay under the Budget proposals.

I want to say something about the abolition of the D Scheme. I am very sorry that this is the only opportunity which we shall have to talk about it. It appears that the Amendments upon the particular items in the Schedules will not be in order, and will not be called. That means that we shall not have an opportunity of voting specifically upon the scheme, and can refer to it only generally in this debate on the Question, "That the Clause stand part of the Bill." It is quite true that when the D Scheme was introduced hon. Members on this side of the Committee opposed it, and hon. Members opposite are saying that that is inconsistent with our attitude today. Not at all; it is not the abolition of the D Scheme that we oppose, but what has been put in its place.

The worst feature of what is proposed is that clothes and boots and shoes which were never before taxed—either in wartime or in the dark days immediately after the war—are today to be taxed, and taxed in such a way that there are decreases in the prices of the expensive articles and increases in the prices of the inexpensive ones.

My hon. and learned Friend the Member for Kettering (Mr. Mitchison) spoke about shoes. I want to give a concrete example in that connection. A pair of women's shoes which today costs £2 10s. will, as a result of these changes, cost £2 12s.—an increase of 2s. Under the changes, a pair of shoes now costing £6 will be reduced in price to £5 15s.—2s. extra on the cheaper pair and 5s. less on the dearer pair.

I represent a constituency which is the centre of the clothing trade. My right hon. Friend the Member for Leeds, South (Mr. Gaitskell) and I have in our constituencies some of the great multiple firms which produce hundreds, thousands, even millions of the cheaper men's suits. Let us see what will happen. A man who buys a suit now costing £23 will in future get a reduction of 30s. If he is in the Surtax class and buys a suit costing, at present, £40, he will get a reduction of £3 10s. A man who buys an overcoat costing £5 will pay 3s. 9d. extra.

A man's shirt costing £1 will be increased in price by 8d. A shirt costing £2 will be decreased in price by 1s. 2d. Many other similar examples have been given to me by the trade. A woollen vest now costing 8s. 6d. will be increased to 8s. 11d., but a vest costing 35s. 6d. will be decreased by 3s. to 32s. 6d. I could give many other examples. Coming from Yorkshire, as I do, I am concerned, as is my hon. Friend the Member for Rossendale (Mr. Anthony Greenwood), that we are to have a tax on wool cloth.

I feel very strongly, too, about the increase in the tax on electrical equipment. Those who live in a working-class area, as I do, realise that for the first time the working-class housewife is having some of the drudgery taken out of her daily work by means of such equipment as electric washing machines. It is a great blow to the woman in the home that these are to bear an increased tax. There is to be an increased tax of 1d. on electric light bulbs. Think of the administration we are to have in order to collect these pennies here and twopences there.

I tried to speak earlier in the discussion on the increased tax on such things as cycles and stationery and I should like to comment now on the increased price of cycles. I do not know anything about the trade and I am not pleading a particular trade interest. Cycles are used chiefly by two kinds of people—by men and women going to work and by children going to school. Do not let us forget that some time ago this Government reduced the amount of free travel for children going to school by increasing the distances involved, and this has meant that many parents have had to buy cycles for their children. This was necessary because, as a result of the Government's action, the free buses were no longer available.

The Bill also increases the tax on stationery, but nothing has been said about the effect of this on the cost to local education committees. I know that the Chancellor has a genuine interest in education, but the increased Purchase Tax will bear heavily on local education committees. I wonder whether the right hon. Gentleman retains his interest in education so much as to read the official journal of the Association of Education Committees, Education. On 11th November that publication made this comment: The Budget is going to hit the School Meals Service together with the hotel industry (whose sensitivities have already been reflected in the correspondence columns of The Times). Silver and cut glass are not likely to bulk large in the annual purchases of any Authority, but the range of goods on which the increase of one-fifth will have to be paid includes many articles which are already on many requisition lists. As for the imposition of 30 per cent. duty on pots and pans and kitchenware hitherto exempt—the impact is bound to be severe. The list of goods affected is formidable. It runs from cups and saucers, by way of frying pans, to wringers and mangles and all manner of more or less likely pieces of equipment. It is not easy to work out just how the increase will affect canteens … As far as Education Authorities are concerned this is just one more example of the absurdity of making education pay purchase tax at all. And when it comes to tax on stationery and work books it is extreme folly. Those are the words of the official journal of the Association of Education Committees, and I hope that the right hon. Gentleman will have this in mind, because we know perfectly well that other measures which the Government are taking will hit local authorities very severely, and these Purchase Tax changes will also hit them.

I do not want to spend any more time going through any more of the items, though there are many more we can go through. But when one thinks, for instance, that toilet soap, toothpaste, brushes, combs and all these things will have extra coppers put on their price, one knows what it will mean. I know hon. Gentlemen opposite will say these are only pence—but pence make up shillings, and shillings make up pounds, and together with the other increases in the cost of living which this Government have im- posed, we know that it will be an extremely heavy burden which will fall very hard on every working-class house.

12 midnight.

Mr. Lawrence Turner (Oxford)

I will not seek to detain the Committee for more than about ten minutes, unless the hon. Member for West Ham, North (Mr. Lewis) is expecting any more deputations. I speak in a very critical vein of Clause 1. I do so with very great regret and in the presence of my right hon. Friend the Chancellor of the Exchequer, to whom I think the whole country has been so grateful in the last few years for his economic policy. I also speak with regret because of the very yeoman work also done in this debate by the Economic Secretary to the Treasury, a true Oxford man who has gone to the rescue of a Cambridge Chancellor.

As one who is actively engaged in industry, I must support the view that there must be full production if Great Britain is to hope to compete successfully in the export markets. Unless there is a full and satisfied home market no manufacturer can possibly hope to tender in the export markets, least of all in the hard currency markets. He has to find the maximum quantities of raw materials; he has the constant capital cost of tooling up; he has to have the available labour force for his production—in other words he has to have his overheads fully covered and be able to produce on a scale that covers his overheads. Then and only then can he make bids for overseas contracts.

Mr. S. Silverman

I am trying to discover whether the hon. Member is advocating that there should be more consumption in the home market or less.

Mr. Turner

Happily, I can put the hon. Member at his ease. I am one of those who, unfortunately, has felt unable so far during the course of the Finance Bill to support the Government. I wish only that I did not have to say that. When I am trying to meet the point about the need to have a strong, healthy home market, I am trying to see the Clause against the background, which my right hon. Friend painted in his Budget statement, of the need to support the £ sterling. Every hon. Member in the Committee must agree with the need to add to our gold and dollar reserves and to improve our balance of payments position.

I cannot see how, under the Clause, the imposition of additional Purchase Tax will achieve any of these objects. The only argument that I have heard so far—put with great skill by my hon. Friend the Economic Secretary to the Treasury—is the quite ordinary argument that we must cut down home consumption. I suggest that it would be a dangerous thing to do as a matter of policy, quite apart from taxation.

We are in very great danger of being out-priced, and sometimes tenders are quite fractional between being accepted or rejected. I do not think that any hon. Member is unaware of how important and vital the effect of any and every wage demand is on export tenders. The attitude of the T.U.C. has been and is increasingly very responsible in this matter. It has preached wage restraint to an increasing extent. I cannot see, therefore, that it will help the T.U.C., or anyone else for that matter, let alone manufacturers, to practise wage restraint, with the cost-of-living index as high as it is at the moment, to have additions to the index.

A great deal has been said about 4d. per head per week as the net overall result of these increases in Purchase Tax. I just do not understand that. If it is true, it is no way to deal with inflation. If it is not true, we would like to know exactly what the increase will do and how far these figures will be computed in a cost-of-living index. I hold the view that if we are to reduce the cost of living and thus help to have more tenders accepted in the export market we must reduce and eventually abolish all artificial taxation, of which Purchase Tax seems to me to be the most artificial of all.

Earlier in the debate we gave considerable thought to the motor car industry. I believe I understood my right hon. Friend aright when he referred to the retaining of the initial allowances for companies which buy cars. It has been stated that the British Motor Corporation, for instance, is making plans to increase its weekly output from 10,000 to 12,000, even though it is said that the export sales of motor cars generally have fallen to 47 per cent. from a much higher figure.

I would, however, ask my right hon. Friend to bear in mind that this fall in sales—which certainly will not be helped by an increase in the Purchase Tax—is due to several things. Undoubtedly, one of them is very stiff German competition, and subsidised competition at that. Another is that these big British motor companies, including the British Motor Corporation are, and I think quite rightly, building factories overseas, and these figures do not reflect in home sales.

When the right hon. Gentleman referred to imports of steel—rather lightly —I fully appreciated his point. Surely what the Prime Minister said yesterday about the cost of importing coal was very much more important. The £80 million we spent on importing coal is precisely what the motor car industry earned last year in exports overseas. I think that he is giving to the wrong people.

My other example, before I come to my questions, relates to television sets. I simply do not understand Government policy. We spend day and night introducing legislation and we produce an I.T.A. I am much more impressed with it than I expected to be. But new television sets have to bear a proportion of this increase in the Purchase Tax. What are we supposed to do? People, at any rate those in London, either have to adapt their existing sets, which costs between £15 and £20 a time, or buy new sets—and why should they not do so? I cannot see the object of getting people to work overtime if they cannot buy. "Earn overtime and enjoy spare time" seems to be the thing.

I have three questions to ask the Chancellor: first, does he really think for one moment that anyone will stop buying anything because of Purchase Tax increases? I would say—not to the Chancellor—but to some of his advisers, let them leave Whitehall and cross to Vauxhall and learn the facts of life. Secondly, do my right hon. Friend's advisers really want to balance the under-the-line account? Do they really want this £80 million? My right hon. Friend said earlier that this was not what he wanted, and it seems to me that if he gets it he will not have achieved the object of Clause I. Lastly, has my right hon. Friend forgotten the value of incentives which he and many of us have been preaching for so long? I am not so much referring to profit sharing—it does not relate to this Clause—but I believe that an increase in the Purchase Tax is anything but an incentive.

I hope that by the time next spring comes along we shall have more "carrot" and less "stick;" that at any rate my right hon. Friend will allow industry to do what any citizen can do, and that is to have an incentive in direct taxation remission by reclaim forms for export orders won. I hope that he will give sympathetic consideration to what I have said.

12.15 a.m.

Mrs. E. M. Braddock (Liverpool, Exchange)

I am in a difficulty, because I have been unable to bring along any quotations. I have been given a lot of quotations which refer to the Chancellor, but they are couched in unparliamentary language and I cannot repeat them here. Last night I told the right hon. Gentleman something privately which I dare not repeat in this Chamber—[HON. MEMBERS: "Say it."] I dare not, but perhaps the Chancellor might like to whisper it in the ears of his hon. Friends. However, what I want to deal with—the right hon. Gentleman is telling the Economic Secretary what I said—

Mr. Lewis

On a point of order. The hon. Lady said she has a quotation that she cannot use because it may be unparliamentary. With respect, Sir Charles, how do you know whether, it is unparliamentary or not until she has made it?

The Chairman

I cannot tell until I hear it, but I have no doubt that it is.

Mrs. Braddock

I know it is unparliamentary. That is the trouble. I do not want to be thrown out of the Committee until I have made by speech. May I suggest to you, Sir Charles, that when I get to the end of my speech, if I feel I have had enough, I may then tell the Committee what I said?

I want to deal specifically with one or two items that have not been dealt with in reference to this Clause. I support my right hon. and hon. Friends in their very strong opposition to it. I hope, even at this late hour and in spite of the fact that the Chancellor has said that he is not going to make any alterations, that perhaps some of the things I say to him in ordinary working-class language may persuade him that he has been a little severe in what he has done.

I represent a constituency which had a lot of unemployment during the years between the wars and where there was abject poverty. The attitude being adopted by this Government is responsible for bringing that state of affairs back again to my constituency. I can tell what is happening, because I am there every week. They come along to me, and I can tell by the type of case they bring. Let me quote just one case which came to me on Saturday morning—an old lady of nearly 70, who had to work in industry as long as she could, was now managing on her own on the £2 pension, plus supplementation. She has a little place of her own; her rent is 7s. 11d. a week, and she has to buy everything she needs out of the money she receives.

The National Assistance Board is not to any large extent at present giving additional clothing grants to old people. It is saying, in general, "Out of the money you are receiving you ought to put 1s. a week into a clothing club, so that you can obtain the clothes you want." She came to me and said, "I have broken my teacup—I have not got a saucer—and I went to Lewis's shop—a shop in the area which is very well known—and was told that the teacup I wished to buy, because of the additional tax put on to it, instead of costing 8½d. as the last one did, will cost 11d." That is 2½d. on an ordinary cup for an ordinary person who has a limited amount of money.

Is that the sort of expenditure that the Chancellor wants to restrict? Does he want the people to go back to using the jam pots which they used in the years when they had no money to buy cups and saucers? I believe that that is what he does want, and what his party wants. It is the kind of thing that they have been doing in the last four years. [HON. MEMBERS: "Oh"]. Of course, you think it is rubbish; you think it is nonsense, because you do not understand. What have you done?

The Chairman

If the hon. Lady addressed her remarks to me, there would probably be less noise.

Mrs. Braddock

I am sorry, Sir Charles. I probably blame you for too much.

Hon. Members opposite do not understand. They do not realise what has happened. They do not realise that by their attitude and policy of "setting the people free" the Government have set free those people who have done nothing all their lives but batten upon the ordinary working class. Because the Chancellor's policies set them free, we now have to face a situation which the Government created, because private enterprise exists only for the purpose of making as much profit as possible.

Controls were taken off as part of the policy of setting people free and people who should have been manufacturing goods for export were switched to production of those things which could make the most profit in the home market. That is a simple economic fact. The Chancellor knew what he would have to do at the beginning of this year and he was completely dishonest. What some people are saying about him is, "Deceitful and dishonest, because he wanted power to get the people whom he represents to go on exploiting the working class and making as much profit as possible." It is time that that was said in straightforward English in this House of Commons.

Besides making my old constituent perhaps use a jam jar instead of a cup—[Laughter.]—hon. Members should not think that funny; it is actual fact—the Chancellor's policies have been such that people have been finding the cost of things they need increasing week after week. They cannot buy bacon, it is too expensive; they have forgotten what butter is like, because of its price; children are not eating butter these days, except that which they get at school meals, which have also been increased in price.

It is no good beating about the bush. That is what is happening. Let the Chancellor remember that we are not dealing with the sort of people with whom we were dealing in the years between the wars. The young people will not put up with the sort of thing his Government is trying to put upon them. By this increase in Purchase Tax, the Chancellor is making it very difficult indeed for the Trades Union Congress to be able to put into operation what it wants to do. What he is actually doing is giving those in this country who control the Communist Party an opportunity of getting control of the situation, an opportunity which they would not have had had the present Government not been in power. That should be quite openly stated on the Floor of the House of Commons.

Let me tell the Chancellor of something else which he has done. Every hospital management committee has had to face increases in the prices of the goods they purchase. Their estimates for crockery and brushes and the other things they require have already been securely tied down by the squeeze of the last couple of years. The only things they have ordered are absolute necessities. The hospital management committee of which I am a member is one of the smallest in the country—I am referring to the area which it administers—and the additional cost for actual requirements is £2,500. That is for one management committee. The Treasury has already agreed that any increases will be met by the Treasury.

I ask the Chancellor to say how much it is estimated that this will cost. He may say that he has not been able to get the information. I asked for the information in a supplementary question a little while ago, so there has been plenty of time to obtain it. How much additional expenditure is it estimated will be required to meet the Purchase Tax through the hospital service alone? It is £2,500 for the management committee of which I am a member. For the Liverpool board of governors, the increase on an estimate of £5,000 for crockery, etc., is estimated to be £1,300. How much will the Treasury take out of the Treasury to pay the Treasury?

Was that amount of increase considered when the Chancellor stated the amount he expected to obtain from Purchase Tax? There is another thing. Every hospital matron is given an amount with which to purchase things for Christmas, for the hospital and the patients. Every one of them, on ordering the things she required, has found that she had insufficient money to meet the additional cost. Wholesalers had orders about sixteen weeks ago from the retail shops at which parents had ordered something for the children at Christmas. Those parents cannot pay down the whole of the purchase money at once. They go to the showrooms of the shops and choose what they want from samples. The retailers do not buy them then, but indicate to the wholesalers that they want the things a week or two before Christmas. Weekly payments for these toys are made by the parents. The price of every child's toy has been increased. Some have gone up 1s., some 2s.

When the retailers send to the wholesalers for the things ordered it will be after the date when the tax comes into operation. Every mother or father will have an additional few shillings to pay on top of the weekly payments for the Christmas toys. Is not the Chancellor ashamed of himself? The cost of every Christmas decoration has risen. Did the Chancellor do it deliberately? Did he think about it? He said he had given plenty of thought to the matter when he put the tax on certain goods. I heard a lot of talk from right hon. and hon. Gentlemen on that side of the Committee, when we were in control, about difficult Christmases; but the Chancellor has made this one more difficult. He has made fewer things available, because of the cost, and he has said that that is what he wants to do.

What is to be the effect on export production, and upon exports and imports, of making people do less for their children and themselves for Christmas? I do not suppose that the Chancellor thought about it. The Chancellor's proposals also mean that many more retail and wholesale establishments will have to be registered for the collection of Purchase Tax. They mean that there will have to be many more clerical workers, and much more work will have to be done in wholesale and retail establishments assessing the additional tax over Christmas.

I suggest that the Chancellor should withdraw this Clause and have a look at the arrangements for the collection of the tax. He is being diddled out of thousands of pounds by his friends. Purchase Tax collection was a hasty sort of thing during the war; it was improvised administration. It has never been overhauled, and if the tax is to be collected properly it needs a similar sort of system to that of the brewers over the amount of beer they sell—somebody sitting there watching it.

12.30 a.m.

Let me tell the Chancellor what is happening about Purchase Tax. It is quite easy for the wholesaler to order from the manufacturer so many things on which Purchase Tax has to be charged; he gets so many of them, but the Purchase Tax is charged on the invoice, and in thousands of cases—some of which I could quote, but I am not what is known in Liverpool as a "copper's nark"—goods obtained through the manufacturers are never invoiced to the wholesaler at all; they are sold at the price of the Purchase Tax on them. The only way the Purchase Tax is collected is through the invoices submitted by the manufacturer to the wholesaler. Why does not the Chancellor have a look at that to see whether there is something wrong and the tax collection is short?

I could quote case after case, but let me give just one more. The Chancellor says, "People do not need to buy a pan every week." Do not they? Has he forgotten, or does he not know, that there are thousands of people still cooking on ordinary coal fires with ordinary pans that burn out very quickly? People are still cooking on ordinary bedroom gas rings or coal fires, and a pan used for all sorts of purposes on an ordinary coal fire wears out very quickly. Sometimes it is forgotten and it wears out very quickly; it is useless a couple of days after its purchase.

The Purchase Tax that the Chancellor has put on these items is positively disgusting and almost obscene, and the attitude he has adopted towards it proves to me that he knows nothing at all about the conditions under which ordinary people have to live. If he did he would not have done what he has done. If he was so sure of his ground, why, when he was invited to go to the old-age pensioners' demonstration on 9th November, did he not go and listen to them? He dared not listen to them. He dare not come into my constituency and talk to them there either.

Mr. Lewis

Or my constituency.

Mrs. Braddock

I am talking about my own constituency. My hon. Friend can talk about his if he likes.

Last Saturday morning, two groups of people came to see me. The first was a few dockers who wanted to know why none of us from Liverpool had said anything in the House about the proposed increased Purchase Tax. I cannot repeat the expression they used in telling me to tell the Chancellor about it, but anybody who knows the language of Liverpool dockers will have some idea what it was they said.

The second group who came to see me was a group of old people from my constituency. Many of them live in one room. They, also, had some very caustic comments to make in ordinary Liverpool working-class women's language-which very often is much more expressive than the men's language-and they asked me to convey it to the Chancellor. If he wants to know what it was and meets me outside the Chamber afterwards I will tell him.

Mr. Lewis

What was it?

Mrs. Braddock

There are a lot of things my hon. Friend wants to know.

In conclusion, let me quote the proposed increases on things ordinary working-class women use. I am one of those peculiar people who does not believe the working-class understand percentages at all. We have to tell them about these things in pounds, shillings and pence—usually in shillings and pence because they do not know much about pounds. I will take the items which have not had tax on them before. A set of good aluminium pans cost 22s. 11d. before the tax and will cost 27s. 6d. with the tax. An aluminium teapot before the tax cost 5s. 11d. and will now cost 6s. 9d. A cake tin cost 2s. 6½d. and will now cost 2s. 11½d. I have mentioned the earthenware cup, which I think is the wickedest increase of all. An earthenware teapot cost 17s. 11d. before the tax and will now cost 21s. 6d. A zinc bucket cost 5s. 11d. and will now cost 7s. 3d. A sweeping brush cost 1s. 9d. and will cost 2s. 0½d. with the tax.

I have a very vivid recollection of a General Election in which I was taking part and in which Viscount Kilmuir had quite a lot to say. He called together a lot of Conservative women and issued them with buckets and mops for the purpose of clearing up the mess which he said the Labour Government had made. What is the Chancellor doing—preventing women clearing up the mess he has made by charging an extra 6d. on a sweeping brush?

Scrubbing brushes cost 1s. 4½d. before the tax and now are to cost 1s. 8d. A Pyrex casserole—I do not know whether the Chancellor knows what that is; it is something you cook meat in and that sort of thing—now costs 7s. 6d. and will cost 9s.—1s. 6d. additional because of the tax. A pudding basin—it is getting near Christmas and perhaps the Chancellor wants to stop people having them cost 2s. 9d. and will cost 3s. 3d. with the tax. An ironing board-but perhaps I had better leave that because I am dealing with things which my people buy and they have not the room for ironing boards. Frequently they have not room for ironing. Children's tea sets cost 12s. before the tax and with the tax will cost 14s. 5d. Children like tea sets. Perhaps the Chancellor did not know that, or may have forgotten, or not looked into this. Dolls of a decent size are expensive. A doll now costs 25s. 11d. and, with the tax, will cost 26s. 8d. A child's toy car cost 10s. 11d. and will cost 11s. 3d. with the tax.

I hope the Chancellor feels satisfied. If I were him I would feel thoroughly ashamed of the sort of thing he has done to ordinary people. The sooner they have the responsibility of getting him and his crowd out of it, the sooner we shall be satisfied.

Mr. Geoffrey Hirst (Shipley)

The Committee has been regaled by a speech from the hon. Lady the Member for Liverpool, Exchange (Mrs. Braddock) which I think was one of her more unfortunate. I have had the pleasure of listening to some very constructive speeches from the hon. Lady, on local government and other matters, from which I have learned a lot and which I valued. I do not think that many of us have appreciated the type of speech she has made tonight.

Mrs. Braddock

I did not expect the hon. Member to do so, and should be very upset if he did.

Mr. Hirst

I do not happen to find myself on this occasion very much in line with the Chancellor about Purchase Tax. [HON. MEMBERS: "Which way will the hon. Member vote?"] I am to some extent running parallel with my hon. Friend the Member for Oxford (Mr. Turner), but not entirely so. I have taken an interest in financial affairs ever since I have been in the House, and have always had a very high regard for the Chancellor. If, on one occasion, he does something which I do not think is the best thing or the right thing, that does not mean that I have to vote against or not support a Government which I think is doing a good job and a Chancellor who, I think, is doing a good job.

In spite of my feelings on the matter, I am appalled at the disgraceful allegations which the hon. Member for Liverpool, Exchange has made against him. I hope that he will deal with them firmly, if he thinks it is worth while dealing with remarks of that sort. I think they are quite despicable.

Mr. S. Silverman

On a point of order. Even if one makes the fullest possible allowance for the freedom of controversy, especially at this time of the morning and on such a subject, are words such as "disgraceful" and "despicable," used by one hon. Member of the speech of another, Parliamentary expressions? If so, would I be in order in telling the hon. Member what I think of his speech?

The Temporary Chairman (Mr. Malcolm MacPherson)

There will be no objection to the hon. Member for Nelson and Colne telling the hon. Member for Shipley (Mr. Hirst) what he thinks of his speech. There are certain words which are not Parliamentary when applied to individual hon. Members, but which may still be applied to speeches.

Mrs. Braddock

On a point of order. Would you, Mr. MacPherson, on my behalf, mind telling the hon. Member for Shipley (Mr. Hirst) that I have not the slightest objection to whatever he says about me? Hon. Members can say whatever they like. The more they say, the better it will suit me.

The Temporary Chairman

That is not a point of order.

Mr. Hale

On a point of order. It was said from the Chair yesterday that the Chair would try, as far as possible, to call one speaker from each side of the Committee. Shall we have the opportunity, in the course of the debate, of hearing anyone who supports the Budget?

The Temporary Chairman

That is not a point of order, either.

Mr. Hirst

Perhaps we may now get on with the discussion, which, in case any hon. Member has forgotten, is on the Question, "That the Clause stand part of the Bill." I have already indicated that I am supporting the Government and also my right hon. Friend, even if I choose to criticise him on one point. My point does not cover the whole field which has been discussed at great length, almost at too great a length—

Mr. Ede

Then why is the hon. Gentleman carrying on the discussion?

Mr. Hirst

It will take a long time if I am continually interrupted like this. I want to deal with a specific point which interests me very much and to which I drew attention in an intervention on Second Reading. It is a point which I hope my right hon. Friend will answer, because he then indicated to me that he might at a later stage.

It is the discrimination against wool cloth under the present tax vis-à-vis non-wool cloth. A certain amount has been said about the D Scheme. I have already said that I welcome the end of the D Scheme. However, we ought to get a little proportion into the matter so far as certain industries are concerned. The wool textile industry in Bradford, and in my constituency of Shipley and all round there, welcomed the D Scheme in comparison with the scheme that was in force before. It appreciated its value then and now wanted it to go. Like the constituents of the hon. Member for Rossendale (Mr. Anthony Greenwood), they did not want the 5 per cent. Purchase Tax on wool cloth put into its place.

12.45 a.m.

There cannot be a good case for this discrimination against wool cloth. I have never heard a good argument for it. It existed under the D Scheme and it is to be continued now. It is inexplicable and unfortunate. I have never heard an argument for it that holds water after all the delegations to the Treasury and to the Board of Trade. One argument, administrative convenience, I never tolerate at any time. That is no excuse for upsetting a whole industry. Another reason, that it suits the Customs and Excise, does not carry any weight. As to the argument that there is considerable scope for evasion in the industry, I tell my right hon. Friend that I shall need to have good evidence if that is to carry any weight.

I know approximately the extent to which wool cloth goes to people who are not registered for Purchase Tax and could alone be within the bracket of evasion, but I am not giving the figure. I want to know how much my right hon. Friend knows. The extent is so small that it cannot be accepted in the trade as an excuse for discrimination.

I cannot accept any of these conceivable excuses. If there is some excuse that I do not know and have not learnt from the trade, some extra reason why it is necessary to have discrimination, I would like to know it, and I will then go back and discuss the matter further with the trade. I am deeply sincere about this point, because it upsets the trade very considerably. Traders have sent letters and telegrams to the Chancellor of the Exchequer and to the Prime Minister and I have done the same, but still the same situation goes on.

I am not prepared to believe that the amount of taxation involved in the bracket to which I am referring—I believe the amount is less than £1 million—will cut down inflation or will mop up purchasing power. I have put these points quite straight. I am always straight to the point on anything about which I feel keenly. This is a limited but important point of great interest to my constituency and to the wool textile industry. Psychologically, it is perhaps more important than it is financially. I press it, but it is not sufficient in itself to out-weight the many admirable advantages and services that my right hon. Friend has given to this country as Chancellor of the Exchequer.

Mr. Arthur Palmer (Cleveland)

The hon. Member for Shipley (Mr. Hirst) praised himself by saying that he was always straight. Samuel Butler said that the advantage of praising oneself was that one could always put it on thick and in exactly the right places.

The hon. Gentleman objected to the plain speaking of my hon. Friend the Member for Liverpool, Exchange (Mrs. Braddock). The ordinary elector would much prefer the honesty of my hon. Friend to the kind of performance that we are having tonight from hon. Members opposite. [An HON. MEMBER: "Double-talk."] Yes, double-talk. The hon. Member for Shipley and the hon. Member for Oxford (Mr. Turner) were very brave in words, but when they have an opportunity of translating that bravery into action later they will be found complacently walking behind the Chancellor of the Exchequer—

Mr. Hirst

I do not mind criticism, but I am not going to be accused of double-talk. There is no double-talk going on at all.

Mr. Palmer

I have expressed my opinion to the Committee. I contrasted the words of the hon. Member with what I think will be his behaviour in the Lobby later on. If, by any chance, I am wrong in my judgment—if I am doing him an injustice—he can prove me wrong by voting according to his words.

I have not burdened the Committee up till now with my observations upon the Clause, and if I now speak—with the night still young—I cannot believe that it will do very much harm. We have had discussions upon what we might describe as the technicalities of the Clause. We have had fur boots, dustbins, shirts, toy swords, and Christmas cards, all in a bewildering variety, marching in front of us. I do not propose to go into the technicalities of the Clause myself, because I feel that my hon. Friends will have plenty of further scope for that if they follow me in the debate.

I want to discuss the general intentions of the Clause. It seems to me that it is no abstract essay in revenue-raising; its plain intention is to increase the cost of living, to put up prices. If it had any other intention it would surely contradict the policy of the Chancellor. He said himself that he was anxious to damp down and restrain purchasing power, and he proposes to do it by putting up prices and increasing the cost of living.

I suggest that that is a very extraordinary exercise, coming from a party which climbed to power upon precisely the opposite claim. I can remember quite well the Elections of 1950 and 1951. I was not successful in being returned to the House on those occasions. I remember that the hon. Member who now sits for Wimbledon (Mr. Black)—he is not in his place at the moment—was very anxious to win that seat, which I held previously. I would not bring him into the debate without giving him prior notice that I intended to do so but he was only typical of many Conservative candidates in the Elections of 1950 and 1951, especially in surburban London.

A Conservative candidate not only must be able to speak passably well, I assume, but must be able to act well, and do demonstrations upon public platforms. The hon. Member to whom I am referring took an umbrella on to the platform to illustrate the incidence of Purchase Tax. The umbrella was a very appropriate weapon for the Conservative Party representative to use.

The general inference which I am sure was taken by the housewives of Wimbledon, Merton and Morden and Croydon—if that sort of thing went on at Croydon—was that the Conservative Party was against Purchase Tax and would gradually abolish it if returned to power. We can see the practical outcome, however, from the Clause now under discussion.

We have had some excellent deputations today from the women of the Cooperative movement and some of us have spent some time talking to these good ladies, although we also told them that they would be using their time more usefully if they spoke to hon. Members opposite.

I feel that it is a pity that these excellent women from the Co-operative movement were not joined by the disillusioned women from the London Women's Conservative Party. I am not referring to the women of the Housewives' League, who, I understand, have been underground for some time, but to the official London Women's Conservative movement, which held a conference recently which the Economic Secretary attended. It seems to me that these Conservative ladies now look upon their former heroes of the Government Front Bench with "all passion spent."

It is four years since the Conservatives came into power, and I noticed from the report of the conference in the Manchester Guardian, which is a reputable, still more or less Liberal newspaper, that four of the resolutions on the agenda dealt with the rising cost of living. I tried to check this report with The Times, but there was very little in that newspaper about the conference. Those resolutions dealt with the rising cost of living—four years after the Conservative Party returned to power and the effect of this Clause is to raise the cost of living higher still. It is an extraordinary policy, as I say, for a party which climbed to power through advocating precisely the opposite policy. One of the ladies told the conference that she no longer enjoyed meeting the electors. I would say to her that is nothing. It is no longer a pleasure for us in the Committee to listen to the Government Front Bench.

Two arguments seem to have been used in defence of the Government's action. One was used by the Economic Secretary in a recent speech which was supposed to be a tremendous come-back for the Government. He said that these changes in Purchase Tax rates would not put up the cost of living by more than a point or so. The second argument was put forward last night by the Financial Secretary, who said that people will soon get used to higher prices. We must try to take these arguments, if we can, in intellectual conjunction. If we examine the first argument—I will not use the words of a celebrated servant girl—it is in effect, "My sin is small and hence it is hardly wicked." It hints that there will be no justification for wage or salary increases on the part of the trade unions because the actual alteration in the cost of living index is not likely to be more than one point.

1.0 a.m.

Does any hon. Member in the Committee believe that it will work out that way in practice? What happens, as we know, is that in any ordinary family the housewife goes out to buy a set of saucepans, for example. I understand that a set of suacepans which would have previously cost say £1 14s. 0d. is now likely to cost more than £2. When the housewife goes out and finds this increase in such an essential article of household use, which she needs and must buy, she comes back and, naturally, complains to her husband and the family generally about the price of things. She has had a practical demonstration, and her husband, in due course, will take that example into his trade union branch meeting, and in the long run it will have an effect on the policy of his union.

In those circumstances, with that kind of mental, emotional and psychological background, it is no good talking in abstract terms, as do right hon. and hon. Gentlemen, saying that it is only one point on the cost-of-living-index, because people think not in abstractions but in concrete and real terms. Is that what the Financial Secretary meant when he said that at the end these changes would make little difference, because people would get used to them? He was right if he meant that, in the end, incomes would be adjusted by fresh applications for wage and salary increases. Up till now I have heard no convincing reason—certainly not by any back-bencher on the other side of the Committee—against that conclusion from the arguments used.

It may not be that everyone on my side of the Committee agrees with me on this, and perhaps all my hon. and right hon. Friends on the Front Bench do not, but I am one of those who believe that the Purchase Tax is thoroughly bad in principle. I believe that taxation should be broadly based according to the ability of the taxpayer to pay, and not according to the movement of consumer needs. The Economic Secretary to the Treasury, when he addressed the Committee earlier in the debate, said that the Purchase Tax was a blunt instrument. I would like to see the House of Commons and the country generally recognise Purchase Tax not just as a blunt instrument but as an instrument that should be discarded altogether. I had hoped that ten years after the war we should now have been at the point when Purchase Tax was on the way out. Instead of that, quite deliberately, as an instrument of policy on the part of the Government, not only is the Purchase Tax not moving out but the present Chancellor has earned a distinction, if one may call it that, for having riveted this bad tax more thoroughly about our necks.

Mr. A. C. M. Spearman (Scarborough and Whitby)

Many hours ago I had given up the idea of detaining the Committee and at this hour I rise only to meet the challenge of the hon. Member for Oldham, West (Mr. Hale), who is not now in the Chamber, to say that I am one among many of my hon. Friends who support the whole of the Budget. It is, of course, easy and popular to attack increases in taxation but not entirely consistent for those of us who are intent on maintaining the Welfare State to the full, who know that for safety our finances must be strong, and who want to check inflation.

It seems to me that the two main attacks on the Budget are that the Purchase Tax increases are inflationary, and that they are unfair in the burden that they lay. I should like to make some attempt to answer those two points. I do not think that the right hon. Member for Leeds, South (Mr. Gaitskell) would disagree with my saying that putting up prices by taxation could not be anything but deflationary in itself. Obviously, it there is less money to buy things there must be less inflation. I think that it would be argued by hon. Members on both sides of the Committee that it could only be inflationary in so far as it caused wage demands.

We all want wage increases, in so far as they are consistent with increased production. It is argued that these increases in the cost of living caused by Purchase Tax might bring about wage claims. I suggest that far too much responsibility is placed on wage claims. We all claim more money if we think that we can get it. Members of Parliament do that. It is human nature. The claims are not the cause; it is the ability to pay. The cause of excessive increases in wages is largely the ability of industrialists to pay more than trade union rates, very often to keep men they do not really want, because they know that they can stick the cost on prices. They know that demand has been so high lately, indeed ever since the war, that it has been too easy for industrialists in many cases to make profits and to stick increased costs on to the price and raise the price.

This is all because we have been in a boom. Indeed, in every year but one since the end of the war there have been bigger rises in money incomes and the money we have to spend than there has been in the national income. The only year in which that did not occur was 1953–54. During that year there was a balance and no material rise in the cost of living, because wages did not go up any more than production. Therefore, I believe that it is absolutely imperative to get that balance between resources and demand, and I think that a great deal of the brunt of reducing that excess demand must fall on investments, although I hope only temporarily. But I feel strongly that the consumer must bear some share of it, for three reasons.

First, inflation is something which we attack from every side. Secondly, I believe it to be of great importance that everyone at home, and particularly abroad, should realise that the Chancellor is absolutely determined to maintain the value of the £, whatever the cost and however unpopular it may make him. Chancellors, whether Conservative or Socialist, do not do unpopular things because they like to. They do them most reluctantly and many politicians avoid doing the unpopular things which they ought to do.

Thirdly, I think it a very logical thing that at this time we have a situation which is the exact opposite of what it was before the war, when there was a glut of goods and not enough purchasing power, and that taxation should be used to curb spending; that is to say, indirect taxation, like the Purchase Tax, rather than direct taxation which checks production and saving.

Mr. Palmer

The hon. Member is not suggesting, is he, that there is any scarcity of consumer goods at present?

Mr. Spearman

I should say that the money incomes are increasing all the time much more than the actual goods. I think that the scarcity of goods is so great that they are being diverted to the home market when they ought to be exported.

Mr. Chapman

Has not the hon. Gentleman seen the recent figures which try to summarise the position between 1948 and 1954? He will find that, roughly, the purchasing power of wages is up by about 10½ per cent. and production is up 20 per cent. How can he think that goods are short when the men in the shops have been producing much more than they have taken in wage demands over the last few years?

Mr. Spearman

If the hon. Gentleman will look at the Digest of Statistics, he will see that for every single year, except the one I mentioned, 1953–54, there has been a greater increase in money incomes than in the national income. I do not wish to pursue the question any further. I have given my opinion and the paper from which I quoted.

I was saying before that interruption that I believe that Purchase Tax, unhappy a thing as it may be, is a very necessary evil at the present time, and were he present in the Chamber, I should expect to gain the support of the right hon. Member for Bishop Auckland (Mr. Dalton), who said in one of his Budget speeches: Now I come to the Purchase Tax. I must confess that I do not regard this as a temporary tax or as a wartime aberration of one of my Conservative predecessors to be hastily swept away. On the contrary, my view is that Purchase Tax has got to stay.… This tax … not only raises revenue but also absorbs or 'mops up,' as they say in the Treasury, purchasing power, and so helps to prevent inflation."—[OFFICIAL REPORT, 9th April, 1946; Vol. 421, c. 1822.] That is as true today as it was nine years ago.

It has been said that this is an unfair tax, and I wish to try to deal with that point. We must keep a sense of proportion in these things which I do not think was apparent in some of the speeches by hon. Members opposite, but was present in others. From 1951 to 1954 consumption in this country has gone up from £8,500 million to £9,400 million, which is double what it went up in the last three years of the Socialist Government. It we take the estimate for this year, I think it is up by £1,000 million in the last five years.

1.15 a.m.

Mr. G. Thomas

Would the hon. Gentleman mind indicating how much that is in terms of real value, because the £ has depreciated?

Mr. Spearman

I am taking 1948 prices. At 1948 prices, consumption in this country, in 1948, was £8,500 million. In 1951 it was £8,820 million. In the first three years of the Conservative Government it was up £600 million. Now it is up £1,000 million.

I am trying to show that, in the vast majority of cases, consumers are far better off than they were, and, it so happens, far better off than under the Socialist Government. I am just stating that if consumption is up then spending is up by £1,000 million in the last four years, and that, therefore, £75 million of Purchase Tax is not really such a great calamity. It is only a fraction of 1 per cent. of total consumption. The whole of this £75 million which it is estimated that Purchase Tax will bring in is equal to about as much as the increase in the cost of living which we have had, on average, every six weeks since the end of the war, during the time of both Governments.

I realise that these increases in the cost of living do not matter so seriously to those who have got capital, because they can spend it—although it goes eventually—or to wage earners who are getting more wages. What we are all agreed upon is that it is a tremendous hardship to those people with fixed incomes, and that is why I say—

Mr. S. Silverman

I cannot follow this at all. I do not know whether the hon. Gentleman is saying that these proposals will or will not mop up surplus purchasing power. I do not know what he suggests is the effect of a budgetary scheme which raises prices in such a way that, as he says, the workers will get higher wages to meet them. If that is the effect which the Budget is going to produce, why is the hon. Gentleman in favour of it?

Mr. Spearman

I do not think that higher taxation will mean wage rises. [HON. MEMBERS: "Oh."] I have been asked a question and I think I might be allowed to answer it. I maintain that wage rises are given because industrialists can afford to pay them because they can stick the extra on their prices. The urgent need is to get general demand down so that industrialists cannot raise prices so easily. I want to make it much more difficult than at present for them to make their profits, and I therefore say that if we get down demand we shall check excessive wage rises. I believe that one of the ways of cutting down demand is to increase taxation and, as the right hon. Member for Bishop Auckland said, mop up purchasing power.

Mr. Silverman

I was trying to relate that part of the hon. Member's argument, which I heard and understood, to the latter part, which seemed to be inconsistent with it. He was saying, when I interrupted him the first time, that these increases in prices did not matter to the man with capital, because he could spend his capital while it lasted, and did not matter to the wage earner because he could get wage increases to cover them. I am asking the hon. Member what effective purpose will be served by raising prices in such a way that wage earners are not affected by them.

Mr. Spearman

It is absolutely imperative to check the rise in the cost of living. A rise in the cost of living may be compensated for by increased pensions and wage demands, but when one is in the sort of danger with which we are now faced, when it is not possible to compensate for the increased cost of living, without, possibly, causing an acute crisis in our balance of payments, it is imperative to check the rise in the cost of living. If it can be checked by a slight decline in demand, by Purchase Tax producing £75 million, then that is a very small price for those with small fixed incomes to pay—4d. a week—if, by that means, we prevent a really serious rise in the cost of living.

Dr. Horace King (Southampton, Itchen)

The Chancellor must indeed be very refreshed by the noble effort which has just been made by the hon. Member for Scarborough and Whitby (Mr. Spearman). If we could persuade hon. Members on the Government back benches to say exactly what they think about Purchase Tax, almost every one of them would imitate those who have so far taken part in this debate and would be supporting the Opposition in denouncing the Purchase Tax. My hon. Friend the Member for Cleveland (Mr. Palmer) wittily dragged in a reference to Milton's "Samson Agonistes." It was most appropriate to bring in a reference to "Samson Agonistes" tonight, because the Chancellor is obviously "blind, among enemies" on both sides of the Committee.

Indeed, it is worthy of a headline for newspapers tomorrow that one hon. Member opposite should have so eloquently supported the Chancellor's proposals. In spite of everything which the hon. Member for Scarborough and Whitby said to justify Purchase Tax, hon. Members opposite have been consistently opposing Purchase Tax for year after year. As the Chancellor has always been one move ahead of his party, one can understand the unwillingness and slowness of the benches behind him to move as rapidly as he does. Both sides of the Committee have consistently renounced Purchase Tax for four years as something evil and something that ought to go. We have regarded it as a necessary evil to be maintained in difficult times, but anyone who has taken part in debates on Purchase Tax during the last four years has expressed the view that if the tax has had to be maintained it is something which ought to be got rid of at the earliest moment.

Those who, like myself, have argued about this tax have been tackling the problem of how it was to be got rid of without imposing injustice upon retailers. One of the alarming features of this reactionary Clause is that not only does it again impose a kind of tax which my hon. Friend the Member for Cleveland thought he was a heretic in denouncing, but which most hon. Members denounce; but that it means that at some time in the future we will again be faced with the problem of dealing with the injustice inflicted upon retailers left with taxed goods when the time comes to remove the tax.

I say that the Clause is reactionary because Purchase Tax is a flat-rate tax. The same Purchase Tax is paid by the rich and the poor. Indeed, if that is not true about the taxes imposed in this Clause it is only not true because in some cases the people who will pay less will be the rich. This Clause gives concessions to rich people on clothing, for example.

Mr. Lewis

Will my hon. Friend add that the people who will find their taxes reduced are those who had the £150 million which the Chancellor gave away in April?

Dr. King

That is further support of what I was saying.

In 1951, when we were discussing certain increases which the Labour Chancellor made in Purchase Tax, the then Mr Oliver Lyttelton said: …we must satisfy ourselves about one or two matters before we can accept it … The first qualification is whether the things which are subject to Purchase Tax are really things that people can do without. Or does the list still contain a number of articles which any sensible man or woman would regard as necessities?"—[OFFICIAL REPORT, 8th May, 1951; Vol. 487, c. 783.] He was arguing then, as I think everyone has been during the last four years, that if Purchase Tax were ever to be reimposed it ought to be imposed only upon luxury goods. No one who has heard any part of the long debate on this Clause can deny that the bulk of the new Purchase Tax is imposed upon things which people cannot do without. The Minister who spoke in the debate yesterday said that the Purchase Tax which was being imposed on the miscellaneous list of household articles would not prevent people buying them, because they must have them. I believe that this Clause is only the first part of an attack on the workers' standard of living, and that it must be considered in connection with the second part, which we will be debating on Thursday, namely, the attack on council house rents. It must also be considered in connection with something which will take place when the climate has been prepared. That is an attack on private rents—the end of controlled rents.

This attack tonight, Clause 1, which the Chancellor seeks to impose upon the people, is one of three attacks on the standard of living not of all the people of England, but of the ordinary people. But it will not succeed as far as most workers are concerned. All the benefits which the Chancellor seeks from this Purchase Tax will be nullified because the trade unions are strong enough to offset any rise in the cost of living by increased wage demands. While those wage demands will add to the cost of living in addition to the increase made by this Clause, the people who will suffer from this Clause, and by its resultant effects of wage increases which will be demanded and secured by the workers of this country, will be the people about whom the hon. and gallant Member for Worthing (Brigadier Prior-Palmer) spoke last night—the people on low incomes, the people with fixed incomes and the pensioners.

I speak with the memory fresh in my mind of an interview some of us had in a Committee Room upstairs yesterday with representatives of the National Association of Old-Age Pensions Associations, with whom some of us went this morning to plead with the Chairman of the National Assistance Board for some immediate relief for the million poorest people in the country. It is those million poorest people who cannot offset the effect of the new Purchase Tax on their weekly budget who will suffer most from this Clause, and I therefore welcome the opportunity of declaring my reasons for voting against it.

1.30 a.m.

Mr. R. A. Butler

We have had a very considerable debate, and I think it may be convenient if I intervene at this stage. I would remind the Committee that, although the night may be young, there is still a great deal of work to do and that the sooner we can come to a decision on this Clause the better it will be for our business. [HON. MEMBERS: "No."] I have always taken the Committee into my confidence about the course of business. There is a great deal of business to be done, and if I do not warn hon. Members it simply means the Committee will have to sit all the longer. It is for the Committee to choose.

Mr. Gaitskell

The right hon. Gentleman will recall, however, that last night, at the end of our proceedings, he did himself draw attention to the fact that it would be possible for all those who had been unable to speak last night to speak on the Question, "That the Clause stand part of the Bill." I am sure he will bear that in mind and realise that, naturally, the discussion must be a rather lengthy one.

Mr. Butler

Certainly. It has been lengthy already. We have had the benefit of at least one speech from the hon. Lady the Member for Liverpool, Exchange (Mrs. Braddock) which lost nothing in the telling, to which we had all been eagerly looking forward and were not at all disappointed to hear, so we have had some reward for our early bed last night and for our late bed this evening.

I thought that perhaps the most interesting point from which to start the observations I want to make about this Clause would be in response to my hon. Friend the Member for Scarborough and Whitby (Mr. Spearman), who pointed out that it was only in 1953–54 that in his opinion, as a very competent economist, if I may say so—a fact which I think the Committee acknowledges—there was a balance between our resources and the money available.

That was an achievement, under the late Government, of which we were justly proud. It was towards the end of 1954 and the beginning of 1955 that symptoms began to be drawn to my attention of the start of inflation. I first had a hint of it when I discussed this matter with the Commonwealth representatives in that autumn in Washington, and at that time we thought we were going to get on top of the inflationary tendency. In fact, it appeared by February that the inflationary tendency in this country was starting. Therefore, action was taken in February, at the earliest possible date, to start dealing with inflation in one way, namely, by the Bank Rate, by the "credit squeeze" and by restriction of hire purchase.

On the analogy of other countries which I had studied—in America, and I have tried to study these things in other countries, some of whom run their economic affairs with great skill, and it is wise to study their example—I had hoped that by these methods it would be possible to control the inflationary urge. What we had not estimated correctly is—as I said in my reply to the right hon. Member the other day—the extraordinary urge of expansion which had been created by freeing the economy under the late Government and under the present Government. That urge for expansion manifested itself in increased factory building, the figures for which are 60 per cent. in the last year above the year before, which shows the immense increase in investment in one sphere alone to which right hon. and hon. Members opposite attach great importance. It also manifested itself in what we forecast this summer as a likely increase in demand and personal consumption at home. It was to some extent balanced by an increase in personal savings, which has been a very welcome feature of our economy.

However, it became clear by this autumn that measures were necessary to deal with this situation, that is, the urge to expansion and an inflationary tendency—which is not confined to this country but which I have discussed with the Finance Ministers of Holland, Germany, the United States, and at least two of our Commonwealth countries. This inflationary tendency happens to be being dealt with by a variety of countries in not dissimilar ways from our own. What we want to keep, as my hon. Friend the Member for Scarborough and Whitby said, is the right balance between the resources and money available. If so you do not get rising prices, you get the benefit of prosperity and of full employment in this country.

Even in the middle of the night I am not going to be rude to the hon. Lady the Member for Liverpool, Exchange—

Mrs. Braddock

I do not mind a bit.

Mr. Butler

I am sure the hon. Lady does not mind, but I do not want to follow the argument she used. Although she said some very hard things about me, I hope she will see me when we finish the debate, so that I might hear those remarks she did not make and be fully apprised of her vocabulary. Despite her remarks, including "obscene" and other words, which evidently are now Parliamentary, I do understand many of the difficulties which arise in her constituency.

The hon. Lady said one especially hard thing—that I would not meet the old-age pensioners. The reason is the same as that for which my predecessors did not meet them. It is always the habit of the Chancellor of the Exchequer, when invited to that function, to refer the invitation to the Minister of Pensions and National Insurance and for him to be the representative who meets them. It may sound bureaucratic, but that is what is done.

Mrs. Braddock

Did he go?

Mr. Butler

My right hon. Friend went last year; I do not know whether he went this year. That has been the practice in previous Governments and of myself. I am perfectly ready to meet old-age pensioners, or constituents of the hon. Lady, or anyone in the country and to explain—as I am doing now—why we had to take action to deal with inflation. I refer particularly to what the hon. Lady said because we have conferred certain very marked benefits on the working people. Gone are the cries of "Unemployment under the Tories". It is, in fact, under the Tories that we have record employment in the history of our country. Not only have we had this record employment, but one of the problems facing us now is that no less than ½ million vacancies are unfilled in our industries—particularly in the metal-using industries, which will be partly affected by the Purchase Tax. That is a problem which gives any economist who considers this matter seriously an impression of impending inflation.

It is our desire to maintain in a free society a system of full employment. I sometimes think that if there is a criticism of this Government it is not of the policies we have adopted, or the motives which have driven us to adopt those policies; it is that we have not explained sufficiently to the people that if we are to carry an immense defence programme, the social services programme, with its improvements, which we intend to maintain, and a system of full employment, we have to have moderation in spending and to get the right relationship between the manpower available and the resources available and the money to meet it.

It is because we want to achieve that position and maintain the undoubted benefits which we have brought to the working people—[HON. MEMBERS: "The Government have?"] Certainly. We have brought them full employment, we have brought them record production, and we have opened the markets and brought them supplies from overseas. It is largely due to our policies of freeing the economy that so much improvement has come about.

But what has resulted from our policies, as I have freely and openly acknowledged, has been this surge of expansion, in a form which amounts in some sectors to over-investment and in this sector to over-consumption, and an increase in home demand that we now insist on taking steps to quell. It would be out of order for me to discuss some of the steps we have taken. I cannot discuss, for example, our investment control plans. But what is in order is discussion of the attempt to control home demand.

It would have been absolutely wrong not to use Purchase Tax as an instrument to deal with home demand at the present time. I defy the right hon. Member for Leeds, South (Mr. Gaitskell) to deny the words which he used in his Budget of 10th April, 1951 when he said that one of the objects of Purchase Tax was: … the withdrawing of spending power to check inflationary tendencies.…—[OFFICIAL REPORT, 10th April, 1951, Vol. 486, c. 858.] That is precisely the reason we have used it as one of our weapons. Although it may seem very contentious, and although I acknowledge that the spirit of the debate has been excellent, that is one of the weapons that I have got to use, and I think it is a weapon which is going to help us out of our difficulties.

The hon. Member for Rossendale (Mr. Anthony Greenwood) wanted to know whether this would be a permanent tax, whether we were turning it into a sales tax. The hon. Member for Itchen (Dr. King) asked whether we ought not to rely solely on the taxation of luxuries.

Taking the question of luxuries first, the right hon. Member for Leeds, South, speaking in the Budget debate, said the policy should be to limit Purchase Tax as far as and as fast as possible to luxury goods only. However, it is only fair to point out to him that in the hands of his Government the Purchase Tax Schedule was far from being confined to luxury goods. It included such things as linoleum, stationery, electric light bulbs, sewing machines, toothpaste, bicycles, and goods vehicle chassis, none of which can be said to be a luxury. He knows that, however much any Government might want to restrict the tax to luxury goods, it is impossible to do so and obtain the result from the tax which he described in his own words on the 1951 Budget, which I have quoted.

What we have done—the right hon. Gentleman must himself face up to the problem—is to try to share the burden of Purchase Tax as a whole. [HON. MEMBERS: "Oh."] This, as a matter of fact, appears a more unpopular course than trying to confine it to certain goods, but it is just as effective a course in dealing with the problem of inflation.

The hon. Member for Rossendale asked whether we were moving to a sales tax. I would reply that at present no decision has been taken. I certainly cannot say anything at the Dispatch Box in answer to his question whether we had ready-made schemes for a sales tax in our pocket, because we have not got one. We have plenty of work on hand; there is plenty for the present Government and a future Government to consider.

What we have done, however, is to abolish the D Scheme. That has been widely welcomed. It has been welcomed by the hon. Member who is the famous and most successful draftsman of the party opposite and by many other hon. Members, even by the hon. Lady the Member for Blackburn (Mrs. Castle). It has been welcomed on this side of the Committee by my hon. Friend the Member for Darwen (Mr. Fletcher-Cooke). It was welcomed by the hon. Member for Farnworth (Mr. Thornton). It was welcomed, and the defects of the scheme as regards gloves were previously clearly pointed out, by my hon. Friend the Member for Yeovil (Mr. Peyton). The anomalies of the scheme were brought out by my hon. Friend the Member for Lewisham, West (Mr. H. A. Price). I have also heard from the Federation of Master Cotton Spinners, from the Cotton Board, and from Lancashire generally that the abolition of the scheme is welcomed.

1.45 a.m.

That is an improvement. To say, in the words of the hon. Member for Rossendale, that a tax of 5 per cent., which is normal now on these textile goods and on the boots and shoes to which the hon. and learned Member referred, is knocking the bottom out of the home market, is a gross exaggeration of the English language. It is doing nothing of the sort. The hon. Gentleman challenged me, and it is my business to answer him. Why did I say that the introduction of the D Scheme would help exports? The answer is that when we first assumed power we had the Utility Scheme, in which there was the so-called "black spot" in which no manufacturer was planning his designs, and which almost inevitably spoilt and hurt our export trade. As a result of the findings of an expert committee, we adopted the D Scheme, which was an improvement on the Utility Scheme, but had great defects in regard to the export trade which became quite clear to me.

More than one member of the Douglas Committee confessed to me that the D Scheme had to go. It goes, under this Clause. It is very good that it does. The 5 per cent. that we are imposing is not a great burden upon our economy or upon spenders. The words of the hon. Member for Rossendale that it is knocking the bottom out of the home market are an exaggeration.

I was asked questions about wool, not only by—

Mr. H. Rhodes (Ashton-under-Lyne)

Is it not very significant that, despite the criticisms of the Utility Scheme and of the way in which the marketing was done in those days, the performance of all the consumer-goods industries in exporting overseas was higher then than it is now?

Mr. Butler

That is a generalisation which it would be very hard to maintain. There has been a great variety of change in the overseas markets and a great increase in competition from certain countries, as the hon. Member knows. I would like to look into the matter scientifically with him. I have heard from manufacturers, and I am certain that the abolition of the D Scheme, enabling them to plan for quality goods, will give us a greater chance in the exports markets, especially in textiles. From my information, I am certain that that is so.

My hon. Friend the Member for Shipley (Mr. Hirst) and the hon. Member for Rossendale asked about wool. As my hon. Friend knows, there are certain concessions in the wool field. The opportunity has been taken to exempt from the tax blankets and other woollen household textiles as a class. That is one advance that we have made. I was asked why wool cloth should remain at 10 per cent. and wool suits and other made-up goods should be at 5 per cent. We went into that matter carefully; it is not just because of administrative difficulty. I would like to pay my respects to the deputations from Yorkshire on this subject. They put their case very well, and I think they understood some of our difficulties.

The problem in the wool trade in administering Purchase Tax is how to control it in the case of the small tailors who make up the cloth. It is impossible administratively to operate the Purchase Tax unless we preserve the ratio which was started by the Socialist Government of 2 to 1 as between the cloth and the made-up garment.

Mr. Hirst

I thank my right hon. Friend very much for his reply. My objection was not against the 2 to 1 but against the discrimination applying to wool as against non-wool cloth. I am well-informed that the actual percentage of tailors and people who use this material is less than 3 per cent. of the turnover of wool cloth.

Mr. Butler

I listened to everything that my hon. Friend told me, and I have listened to deputations to this House. We have studied with care all that has been said, and we find a complete difference between the cotton and the wool situation, owing to the numerous small tailors who make up the wool cloth. That is the answer which I am obliged to give to my hon. Friend.

The hon. Member for Flint, East (Mrs. White) raised the question of slippers, and I was asked by the Committee yesterday not to delay in dealing with this matter. I have accordingly decided to take some action at once. I am able to say that the Government accept the need to treat slippers and bootees—such as were produced by one or more hon. Members, and by the hon. Lady—in the same way, whether they are trimmed with sheepskin, rabbit, or other fur.

As I explained yesterday, there are difficulties in doing this by an Amendment to the Finance Bill, owing to the manner in which the Resolution is drawn. In view of the hold-up in trade to which the hon. Lady drew my attention, I propose to effect the necessary change during the next few days by a Treasury Order. Fur-trimmed footwear will be treated upon the same basis as ordinary footwear, and charged at 5 per cent. At the same time, I propose to deal with fur-trimmed hats in the same way as other headgear, namely, to charge a 10 per cent. tax.

So that there shall be no confusion, I must announce that the change will operate from next Monday morning. That does not tie me to the exact hour at which I lay the Order—because I have still a lot of work to do on it—but I wanted to tell the Committee at the earliest date of the effect of the representations which have been made, and the decision of the Government to deal with the matter to the best of their ability. The House will see the Order when it is laid, and if hon. Members wish to discuss this matter further they will be able to do so, but I hope that after the discussions we have had this may be an Order which, for once among all Orders, is agreed.

I was asked by the hon. Member for Leeds, South-East (Miss Bacon) whether we were not being unfair to the education authorities, and by the hon. Member for Liverpool, Exchange whether we were not being unfair to the hospital authorities. Those subjects will come up in the later debate upon the second part of the First Schedule, in relation to the special supplies needed by hospitals, in particular of what are known as "pots and pans", and I will reserve my reply until then. I will simply tell the hon. Members that I have noted their points and will look into them in the meantime.

My hon. Friend the Member for Oxford (Mr. Turner) made a speech critical of me and my policies. I respect anybody who states his view in the House—but I am not sure how he reconciles his own statement that we must not cut home consumption with that criticism. If we are to keep a proper balance—which will maintain full employment and the living standards of our people—without cutting home consumption, it means that we have further to cut home investment. That is my answer to him. I do not believe that either he or his business friends will want us to cut home investment more than we are now proposing to do. The most important thing in summarising our policy is to think not only of the present but of the future, and the less we can cut investment, which is so vital to the future of our employment, the better will be our situation.

My hon. Friend suggested that we should abolish all artificial taxation, such as Purchase Tax. Much as I would like to, I am unable to do so. Partly for revenue reasons and partly for the reasons I have given in dealing with inflation, we still need this tax. To me—or to any Chancellor of the Exchequer—or to my devoted Ministers who support me, it is clearly the most odious to defend. It was just as difficult for the right hon. Gentleman opposite when he had to do it. It is bound to be so. In the national interest, the money we are getting from this tax, and the effect of our measures, will, I believe, help our main objectives as a nation.

I must therefore ask the Committee to agree to pass the Clause, unpopular as it may be. I do not think that it will have a disastrous effect. I do not believe that a rise of just under one point in the cost of living will pull down the standards of the people in the way that has been suggested by some hon. Members. I believe that there are greater benefits which the people will derive, and it is because we want to maintain and improve present standards that I ask the Commitee to take this step.

Mr. Gaitskell

I had not intended to intervene so early in the debate upon the Clause, but the Chancellor made a number of references to myself and I felt it appropriate to reply immediately. As far as his reply goes, it certainly does not satisfy me, and I do not think that it will satisfy my hon. Friends. I hope they will continue to express their point of view with the same force and vigour as that which they have shown throughout the evening. I may even wish to catch your eye again, Sir Charles, should the occasion demand it later.

The Chancellor has given us one concession, at any rate—on slippers and bootees—and we are grateful for it. I think my hon. Friend the Member for Flint, East (Mrs. White) is entitled to much credit for having brought this matter forward and to much satisfaction from the fact that she has so quickly achieved what she wanted. I have no doubt that the manufacturers of these slippers will be grateful to her and to those of us who have pressed this matter with the Chancellor.

The right hon. Gentleman has given one other concession, in that he withdrew, almost when the first shot was fired, the greater part of one subsection of the Clause. I could not help feeling that it was extraordinary that the Chancellor, having taken the trouble to insert in the Clause a completely new procedure under which Purchase Tax Orders should be made, should be willing to withdraw it after one speech from this side of the Committee, but it only shows what a powerful advocate my hon. Friend the Member for Islington, East (Mr. E. Fletcher) is. I hope that the Chancellor will respond in the same way to my hon. Friend when he speaks again.

The right hon. Gentleman has defended the Purchase Tax proposals in the Clause by referring on a number of occasions to statements which I have made in the past, and I have taken the trouble to read again what I said in 1951, both during my Budget and in June of that year. The Economic Secretary said that in June, 1951, I presented the classic case about the relationship between exports and the Purchase Tax. I am bound to say that on reading what I said on those occasions I find it sensible and see no reason to depart from anything I said. I would certainly still say that in certain conditions—if there is very full employment, if there is a limit on what we can produce, if export markets are buoyant—restricting home demand is likely to be necessary and effective in achieving additional exports. Nor do I question the general argument about mopping up purchasing power, always provided that the circumstances in which that speech was made are borne in mind.

I do not wish to enter into the long and interesting argument about the circumstances in which it is more important for exports to have a continually expanding home market and the circumstances in which that is less important. I dealt with that fairly effectively, I think, in June, 1951, and I will leave it at that.

If this attempt to enlist my aid on behalf of the Government were to be soundly based, it would also have to show, first, that the circumstances were the same in 1955 as in 1951; secondly, that the Budget on the whole was substantially the same as that of 1951; and, thirdly, that the Purchase Tax changes themselves were the same. None of these is true. The circumstances, of course, are totally different today from those of 1951. The dominating feature of the 1951 Budget was the start of the defence programme when, as Chancellor, I had to face an increase in Defence Estimates of £500 million. To do them justice, hon. Members opposite supported that defence programme. We were then faced with the inevitability of increasing taxation in order to find the money to pay for defence and, equally, if I may put it in economic terms, of releasing the resources which had to be made available to produce the arms.

That was the situation in 1951, and it was the basis of the Budget. In 1955, there is no increase in defence expenditure. If I remember rightly, the expenditure is about the same level in the Estimates for 1955–56 as in the previous year. The background to this Budget is quite a different one, as the Chancellor explained just now. It is, of course, what he called the incipient inflation, the steadily worsening economic situation, but on this occasion this worsening economic situation has not arisen through any external events. There is nothing in the nature of a Korean war to explain the Chancellor's behaviour. There has been no sharp adverse change in the terms of trade against us this time; we are not having to pay vastly increased prices for our wool, cotton, rubber, timber and food.

The whole situation can only be explained, as we all know, by internal events; and the fact is that this worsening position, this incipient inflation which the Chancellor described, is the result of his own policy. Not only has it grown, as he admitted, from as long ago as the latter half of 1954—a point which I hope the Committee will bear in mind when hon. Gentleman opposite say so frequently that we were very slow in taking action in 1951. I do not wish to labour the point too much, but I must point out that this Budget takes place one year after the incipient inflation and the worsening to which the Chancellor has himself drawn attention.

2.0 a.m.

Mr. R. A. Butler

The right hon. Gentleman will remember that action was taken in February which, I think, was the earliest possible date. There is also no possible comparison in the situation of the reserves between the autumn of 1954 and the disastrous situation when the right hon. Gentleman fled from office. Lastly, the measures in February, both in the trade gap which had narrowed to normal proportions and in the position of our reserves and of sterling, had appeared, by April, to be beginning to take effect.

Mr. Gaitskell rose

The Deputy-Chairman

I think both right hon. Gentlemen are now about equal. I do not want unduly to interrupt the interchange, but—[An HON. MEMBER: "Then do not."] The Chair is concerned with keeping the debate within some limits. Both right hon. Gentleman have been given fair latitude to deal with the point, but are now really going a little beyond the Clause.

Mr. Hale

With great respect, Sir Rhys, the Chancellor of the Exchequer addressed the Committee for a considerable time without any interruption or objection. He detailed the whole of his policy, discussed American economic policy, said he had consulted American methods, and had come to the conclusion that increased Bank Rate was preferable, and the credit squeeze was preferable, to other methods in dealing with the economic situation. He said he had discussed the matter on the Continent, in Holland and Belgium, and he was allowed to enter into his economic theories without any restraint or any kind of objection from this side of the Committee.

I am hoping to catch your eye, Sir Rhys, to deal with the situation in the cotton industry. I want to put to you, with seriousness and, I hope, a responsible sense of gravity, the position of the cotton industry, which is to be affected by the credit squeeze, which affects every small mill, which is affected by—

The Deputy-Chairman

I think I have allowed the same latitude to the two right hon. Gentlemen on both sides, but I am now saying to both that we might come nearer to the debate on the Clause.

Mr. Gaitskell

I think it is only fair that I should reply to the Chancellor's interjection. If my hon. Friend will allow me, I am sure he will be successful in catching your eye later, Sir Rhys, when we shall look forward to hearing him, as we heard him with so much enjoyment earlier this evening. But if I allow him to go on I may forget the point I wanted to put to the Chancellor, which was this. The right hon. Gentleman referred to the position of the reserves. The most striking thing about that is that, of course, in July, 1951, they were at easily the highest level they have reached since the war. Even at the end of October, when we left office, they were still about £220 million above what they are today. I now will accept your Ruling, Sir Rhys. I do not want to pursue that point further, although I want to make it clear that I am endeavouring to draw a comparison, in reply to the right hon. Gentleman, between the position in 1951 and the position today.

I come to another important point of difference. The Chancellor is frequently boasting of the way the Government have removed controls of various kinds. It is quite true that they have, but what are the consequences? It really is very extraordinary that, having done all those things and encouraged this free-for-all economy, the right hon. Gentleman should say to the Committee that they had not impressed upon people sufficiently the need for moderation and restraint. The right hon. Gentleman had better review his policies again if he wants moderation and restraint. Of course, a policy that may be successful when one has restraint, when one is restraining prices and incomes, either by persuasion or legislation, is one thing. A policy where one has no restraint and no controls of that kind may be very different.

The second difference to which I want to draw attention is the difference of the Budget itself. We have to put this Budget alongside the April Budget. They are both of the same year and any reasonable person would agree that that must be done. We find that in April the Chancellor, in striking contrast to the stern measures he took in February, and apparently misled—as he wants us to believe—by a sudden gleam of silver lining in the sky conveniently appearing just before the Election, procedeed to give away £150 million in reductions in Income Tax. We all know that a considerable part of that went to those who, on the whole, are the better-off part of the population.

I do not think that anybody would deny that reductions in Income Tax are popular, but it is also the fact that if one reduces the standard rate of Income Tax that reduction inevitably—unless one corrects it in some other way—goes far more to the benefit of the wealthier people. Alongside that we have the autumn Budget and in that Budget, as my hon. Friend the Member for Stechford (Mr. Roy Jenkins) said earlier, we may certainly cancel out the position of the companies. They had about £40 million in the April Budget. They lose it—or they do not yet, but we hope they eventually will—in the autumn Budget. In the case of everybody else there is a marked difference which the Chancellor cannot deny. On balance, taking the increase in the Purchase Tax on one side and the reductions in the Income Tax on the other, there is imposed a net additional burden on the poorest people.

Mr. R. A. Butler

indicated dissent.

Mr. Gaitskell

The right hon. Gentleman simply cannot deny that, because if one takes the 5 million or 6 million people who are too poor to pay Income Tax, taking their family circumstances into account, they have the extra 1s. a week insurance to pay and on top of that they have to pay Purchase Tax on all the essential articles which the Chancellor has brought into the tax range. On the other hand, it cannot possibly be said that those who made the big gains in the April Budget, the wealthy Income Tax payers, will pay those gains back again following the autumn Budget.

If hon. Members will contrast that with the 1951 Budget, this is what they will find. It is true that I did make some increases in Purchase Tax, and I will return to them in a moment. But I also increased Profits Tax, bringing in another £35 million, and I increased Income Tax at the same time. It was not a very popular thing to do, any more than this Budget is popular, but I thought it the right thing to do, and no one can say that the 1951 Budget was unduly harsh in operation on the poor people compared with the rich. There is no doubt that the greater part of the £170 million that we had to raise then was raised, on the whole, from those who could afford to pay more easily than the others. That is the second difference.

The third difference is the Purchase Tax itself and, really, to hear hon. Members trying to defend the Chancellor on the basis of what I did in 1951 is most extraordinary. The Chancellor himself has told us why I increased Purchase Tax on motor cars, television sets and radio and one or two other things. The net total increase in revenue was I think, £20 million in that year, compared with £75 million now. But the reasons were perfectly plain, and I put them forward at the time. They were to make it possible to carry through the defence programme as quickly as possible.

It was the fact at that time the television and radio industry was in direct competition with the radar programme and we had to make way for the radar programme. We had to do what we could to damp down the demand there. There was a direct conflict between motor cars and aircraft and tanks, and I think that that was a perfectly legitimate use of the Purchase Tax. But, if I may so to the right hon. Gentleman, it was a very different use from what he is doing now. I agree that we were also anxious to build up exports still further, as the right hon. Gentleman is doing today. But I would say that here again there is some difference. The export markets, certainly in 1951, were a great deal more buoyant than they are today—indeed, the right hon. Gentleman is often telling us that, and how much easier it was for us, because export markets were more flourishing then than now. Therefore, all these differences really make the comparison indefinite.

But the biggest difference of all I have not come to, and that is the treatment of these essential articles. I think that the Chancellor will hear a great deal more about all these articles as the night goes on, or if not tonight, next week or the week after, when we shall probably be discussing the items individually. However, if I may, I will draw attention to some of them now, because they are very relevant.

It so happens that in 1951 I took out of Purchase Tax a long list of articles. They included serving trays, bread boards, bowls and jugs and ewers, pedal operated sanitary bins, coal hods and coal scuttles, baths, wash tubs, wash boards, ironing boards, shields and stands for smoothing irons or pressing irons, clothes line posts, clothes pegs and clothes props, pot scourers and steel wool, pastry boards and rolling pins, coal or cinder sieves and sifters, kitchen scales and weights therefor, kitchen weighing machines, hand operated wringers and hand operated mangles.

I notice—though I must confess that I had forgotten about it—that we even exempted by special Order interval timers incorporating an alarum mechanism. After that, for the Chancellor to say, "I am only doing what you did" is absurd. He is doing exactly the opposite. This, indeed, is our main complaint so far as Purchase Tax is concerned.

By replacing the D Scheme with this flat-rate tax and by bringing these additional items into Purchase Tax, the Chancellor is going back on the principle in which we believed and still believe, that it is highly desirable to use the fiscal instrument, to use a tax so as to encourage the production of cheap well-made and decent and properly price-controlled articles for the poorer consumers. That was the basis of our policy when we were in office, and it has been gradually dismantled by the Chancellor. But the dismantling has gone on a great deal faster in this Budget than in the last.

2.15 a.m.

We have had case after case. We have had the case of the cheap fur coats and the furniture, and we have had the case of these new items which have been brought into Purchase Tax.

This Budget, which largely consists of the particular Clause we are now discussing, is unpopular for three reasons, and I think the Chancellor is at last beginning to realise them: first, because of the astonishing contrast which exists between what this Clause contains, with the rest of the Budget, and what was said and done last April; secondly, that, taken with the other Budget, it is a grossly unfair one; and, thirdly, that it will not succeed in achieving its objective—that is to say, that it will not succeed in stopping inflation.

I am not going to get into a long argument with the hon. Member for Scarborough and Whitby (Mr. Spearman). We all respect him; we all appreciate his attempt to come to the aid of the Chancellor, and I am sure that the Chancellor appreciates it, too. But I do not think he is right about it because when, in present circumstances and with no restraints in a free-for-all economy, no controls, and everyone encouraged to get rich quick and not bother about anybody else, the Chancellor imposes taxation, as this Budget does, on essential commodities, he must expect—it is natural and you cannot stop it—an immediate reaction in the form of wage claims.

It is no use saying that we should squeeze the manufacturers so much that they will not be able to meet these claims. I do not know whether that is the Chancellor's intention, but, if so, it is certainly dangerous. It might mean very serious industrial disputes and serious unemployment as well. I know he would not wish that, but he must see that there is that great danger. I do not think that that is likely to happen. I think that when we get the wage claims quickly we will see them granted, and then we shall get further increases in prices and further inflation. That is the most probable outcome.

It has been very noticeable during the debate that, apart from the hon. Member for Scarborough and Whitby, no hon. Member on the Tory back benches has had a good word to say for the Budget. They have all begun by paying the Chancellor a compliment, a little bouquet is handed with one hand but a hand-grenade is thrown with the other—or a brickbat, if hon. Members prefer that. I am bound to say that in this I feel some sympathy for the Chancellor. I find the attitude of hon. Members opposite difficult to understand. The Chancellor won the Election for them. It was his Budget, his policy, his primrose path of prosperity programme which won them all those votes, and they should not have been taken in by it all.

Hon. Members opposite should be very grateful to him for all he did for them. They should not be grumbling now because they have to pay the price. They should support him and say that they support the Chancellor's tough Budget. They should say, "We know that it was all lies last April, but now we have won the Election." That would be honest. Then we could have a real set-to. I feel uncomfortable with the Chancellor all alone there against the whole Committee. It is most unfair. I hope that as the debate goes on—and I hope it will go on for many hours still—we shall have a better response from hon. Members opposite so that we can have a real debate. Let them come to his help, and give him a hand. He has done all this for them and they should now stand by him.

Viscount Hinchingbrooke

I am not going to waste the time of the Committee in debating with the right hon. Gentleman what he achieved or failed to achieve before 1951 or about the opposition he staged or failed to stage after 1951. Suffice to say that all the issues which he has been raising earlier in his speech were brought out at the General Election in May, when his party was decisively defeated in a sense that no political party has been defeated in a hundred years. Defeat at two General Elections running is the record of the Labour Party.

The Deputy-Chairman

We are dealing with the Question, "That the Clause, as amended, stand part of the Bill."

Viscount Hinchingbrooke

I was saying in passing, apropos what the right hon. Member for Leeds, South (Mr. Gaitskell) said about my right hon. Friend the Chancellor of the Exchequer, that while we on this side of the Committee all pay my right hon. Friend well-deserved tributes for his magnificent record, a major cause of our success in the Election was the ineptitude and stupidity of hon. and right hon. Gentlemen opposite and their conduct in handling the affairs of the country for six years.

There are some matters connected with Purchase Tax which, as speeches on this side of the Committee have shown, have caused profound anxiety. During the course of the debates on the Budget, my right hon. Friend and his colleagues have failed to give us some of the subsidiary reasons in the national economy which it is essential for us to know, if we are to make a just appreciation of the relation of this tax to other events.

My right hon. Friend referred only in passing tonight to the preparation for a sales tax. I do not like a sales tax any more than does my hon. and gallant Friend the Member for the Isle of Ely (Major Legge-Bourke), but it is at least an equalitarian tax, it is a general tax and more easily administered.

The Deputy-Chairman

A sales tax cannot be discussed in the debate on this Clause.

Viscount Hinchingbrooke

The Chancellor of the Exchequer referred to the question whether the increase in Purchase Tax embodied in this Clause was a preparatory measure for a sales tax.

The Deputy-Chairman

The Chancellor of the Exchequer said that he had no intention about it. He did not discuss the tax at all.

Mr. S. Silverman

Surely we are discussing real things and not the names which people choose to attach to them. A sales tax does not cease to be a sales tax because the Chancellor calls it Purchase Tax.

The Deputy-Chairman

We are discussing the taxes in the Clause.

Viscount Hinchingbrooke

I can easily end the point by saying that it would have made it much easier for us to stomach this increase in Purchase Tax if we had been directly and frankly informed that it was a preparatory measure for an equalitarian sales tax in due course.

Likewise, we have been told nothing at all about the use of the Budget surplus which is likely to arise at the end of next year. Embellished by this increase in Purchase Tax, it will probably be about £400 million or £500 million. Had we been told that that was to be used for a reduction of the Floating Debt, which is the most practical way of achieving deflation, that would have helped us to pass this Purchase Tax. It would also have helped if the Chancellor had been able to say why the Bank Rate was being left at its present level. Of course, he could not say when he was going to raise it, if he was, but he could at least have said why it is not higher than it is, because a high Bank Rate is obviously one of the instruments of deflation. I believe that throughout this Budget and Finance Bill too many purposes beyond the immediate issues have been concealed, and that we have been asked to take too much on trust.

I listened carefully to my hon. Friend the Member for Scarborough and Whitby (Mr. Spearman). His point was simple. It was that Purchase Tax reduces the demand for goods, and that in consequence there will be a slowing down of trade and manufacturing activities. I believe that that is the case; but the issue which is raised by this is which action of the public operates first? Does the shock of having the Purchase Tax increased result in people refusing to buy goods, and achieve the result which the Chancellor wants; or does it result, after the initial period, in their coming back again for goods which they must have for their households at the higher prices and, when their savings run short and their salaries become inadequate, going to the sources of wages and salaries, their employers, and practically demanding higher incomes?

I believe that the experience of everyone is that the second factor operates first. Therefore, what my hon. Friend raised does not come into account until later, when it is nullified by the inflationary effect of higher incomes granted.

Mr. H. Lever

Will the noble Lord tell the Committee why, having shown the likely consequence of a Purchase Tax increase, to raise the same amount of money in a sales tax would not have the same effect?

Viscount Hinchingbrooke

I do not want to go too deeply into the matter at this late hour. I do not like a sales tax, for the reason given by my hon. and gallant Friend the Member for the Isle of Ely, yesterday, namely, that it distorts the real value of the goods. It does not, however, distort the value of the goods to anything, like the same degree as Purchase Tax, and it does not have the retailer-wholesaler disadvantages of Purchase Tax.

I come now to something said by my right hon. Friend the Financial Secretary and by my hon. Friend the Economic Secretary. We glory in the fact that both of them are honest men. They showed that yesterday by being unable to erect a proper defence for this tax. [HON. MEMBERS: "Oh."] The truth shone through the transparent sentences they used. The Economic Secretary said that rising prices brought about by Purchase Tax absorbed the excess purchasing power of the nation. He is quite right that it does; but this is all part of the chicken and the egg argument, because what happens then? I have just referred to it in connection with the speech of my hon. Friend the Member for Scarborough and Whitby. What happens then is that, the purchasing power having been absorbed, people demand more purchasing power, and in a free economy that is bound to happen.

Mr. S. Silverman

What is to be done about it?

Mr. R. A. Butler

Cut down all investment.

Viscount Hinchingbrooke

I think there is sense in that interjection. There is a rapidly rising level of investment, and quite a case being built up for its reduction in some respects, though not in others; for a cut-back in the building of factories and the outpouring of goods—

2.30 a.m.

Mr. Gaitskell

This is a most interesting point. Would the noble Lord agree with us that it is necessary, therefore, to reintroduce building licensing in order to achieve this?

Viscount Hinchingbrooke

I certainly do not agree with that. The Government can do it for the public sector for which they are responsible; they are beginning to do it in many ways, and I support all that part of the extra-budgetary measures that are being taken. The private economy can be made to do it. [HON. MEMBERS: "How?"] By a higher Bank Rate.

I wanted to finish that part of my remarks about the speech of the Financial Secretary yesterday. The Financial Secretary was forced by his ability and by his honesty to prove the whole case for us. He said: I accept at once that this"— that is, the institution of the Purchase Tax— is bound to be an unpleasant blow to the cheaper end of the trade, but I cannot accept the suggestion that it will render those goods unsaleable.… The public will soon accustom itself to the adjusted prices that will follow.… We shall certainly see what happens. There is very considerable buying power in the nation; more, perhaps, than the hon. and learned Member realises. I do not believe for one moment that the provision will put rabbit-fur goods beyond the reach of the public or will produce a situation in which the public will cease to buy."—[OFFICIAL REPORT, 15th November, 1955; Vol. 546, c. 220.] He meant, I think, buy generally all the goods that are subjected to this tax.

Mr. H. Brooke

No, I did not. [HON. MEMBERS: "What did the right hon. Gentleman mean?"] When I say "rabbit-fur" I mean rabbit-fur.

Mr. Gordon Walker (Smethwick)

Would the right hon. Gentleman say that the principle could apply to one lot of goods like that rather than to other goods? Surely, by analogy, it applies throughout the whole field.

Viscount Hinchingbrooke

We must accept what the Financial Secretary says here and now, that he meant only rabbit-fur.

I come now to something which my right hon. Friend the Chancellor said yesterday, which he reiterated tonight in his speech, and which I must say I find really disturbing. He said, speaking of the Purchase Tax and its implementation: Practically no economist in this country would deny that if we have to deal with the menace of inflation here is one weapon ready to hand, which I have used and which we shall propose to go on using until such time as we get the situation right."—[OFFICIAL REPORT, 15th November, 1955; Vol. 546, c. 239–40.] I have sought to show that I disagree with Purchase Tax as a deflationary weapon, and I now feel obliged to say that I deplore the fact that my right hon. Friend has had recourse to economists' advice in order to institute this tax. Since the death of Lord Keynes every economist in this country—with the possible exception of one, who is not a United Kingdom citizen—has been, in my view, profoundly wrong. They have consistently advocated increased taxation in order to reduce inflation, yet consistently since the war inflation has gone rampantly forward in face of their advice.

I think it quite deplorable that at this stage, ten years after the end of the war, we should still be taking the advice of these economists, who have never followed Keynes in reverse. If Keynes had been alive today I am quite sure he would be propagating the reverse of his theory, which obtained such tremendous force before the war, and saying that it was necessary in overfull employment to reduce taxation in order to reduce inflation.

It is essential in these matters to declare a standpoint of faith and I must do that. I am completely won over to the Colin Clark thesis, which I will simply state as being that taxation above a certain figure in an elected democracy is inflationary. I forget the figure, I think it was 25 per cent., and we have obviously surpassed that at present. There is, and always will be, an inevitable increase in private outlay. We cannot stop it except by physical controls, or by the great moral sanctions which war or a near-war situation provide.

If we have physical controls we are really moving towards a totalitarian society and destroying the philosophy and ethos on which we base ourselves in the West against the Iron Curtain countries. I do not believe that any Chancellor of the Exchequer, of any party, today—taking into account the wider ideological purposes of our times—could possibly institute physical controls. It would be giving game, set and match to the people of Russia. Therefore, the reason this Purchase Tax is so deeply frustrating is that it shows that my right hon. Friend has not really consulted the great movement and tide of our times. He has been the architect of Conservative fortunes. He has built up the position where we are now the dominant party in the State, but I think that at this critical moment he has failed to identify himself with that inner purpose and objective. He has failed to identify himself with the aspirations of the private sector of the economy and the philosophy of the capitalist order, which we must uphold if we are to win our battles overseas.

My right hon. Friend has been moving against that whole philosophy instead of receding from it. He has been moving in with a weapon, the Purchase Tax, which I have sought to show is quite blunt and useless. I say this with all humility and, I hope, without effrontery. He ought, I believe, to be welcoming the open society with open arms and be instituting a grand recessional of State power. Nothing else, I believe, short of physical controls, will bring this inflation to an end. As my hon. and gallant Friend the Member for Worthing (Brigadier Prior-Palmer) said yesterday, inflation is causing the utmost moral disturbance in our society at present. The effects of it are quite incalculable. It must be brought to an end. It cannot be brought to an end by the institution of physical controls; therefore, the only thing to do is to recede on the front of government, reduce Government expenditure, and reduce taxation.

I feel this so strongly that I feel bound to say that I must vote with the party opposite tonight unless the Chancellor tells us that this question of Purchase Tax is part and parcel of the whole group of measures he is taking and that the prestige and position of the Ministry is involved. If he will say that, I will vote with the Government; otherwise, I must vote in the Opposition Lobby. People attend funerals for vastly different reasons and in going into the Lobby with the party opposite tonight I do not accept one single iota of their political faith.

Mr. Hale

Anyone who listens to the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) realises that he is listening to someone who speaks with great sincerity. The noble Lord has put forward academical propositions with which I would agree. I suspect that 99 per cent. of the hon. Members of the House of Commons can accept most of his academic propositions, because they never get very near to reality.

It is intellectually arguable that controls are minor steps on the road to totalitarianism, just as it is intellectually arguable that the removal of controls is a step on the road to anarchy. Controls of all sorts are so much a part of our life today that anyone who argues against controls is an intellectual anarchist, and intellectual anarchy is a proposition for which I am not without some sympathy.

It is at least remotely arguable whether these propositions are—of course they are relevant, of course they are important, but perhaps they are not, if I may use a word which I prefer—the guts of the question whether Clause 1 should stand part of this year's Finance Bill.

I intervened—I am sorry the Chancellor has gone—really thinking that the time had come when someone should say a good word for him. We all have a great respect for him. I do not think many of my right hon. Friends would associate themselves with the suggestions of dishonesty which have been made against him. It is, of course, unfortunate that if one absolves him from dishonesty one has to convict him of incompetence. I think that is at least a fairer way to describe the situation.

The debate itself has taken an unusual course. I want to make only a passing reference to it because I had some part in the opening stages. The hon. Member for Darwen (Mr. Fletcher-Cooke) made a speech with which I do not want to deal in detail. I would merely say that I thought the opening section was much more impressive than the closing section.

At that stage of the discussion, my hon. and learned Friend the Member for Kettering (Mr. Mitchison) put forward an extremely able plea for the boot and shoe industry, which is very well understood because it has constantly been put from these benches over the years. The right hon. and gallant Member for Leicester, South-East (Capt. Waterhouse) rose and said that there was a curious dishonesty about putting that point now, although we have put it every year for four years. For many years I have been one of the solicitors to the National Union of Boot and Shoe Operatives, and I know their views on this. If he were here now, the right hon. and gallant Member might be the first to say that in the boot and shoe industry there are ex- tremely happy relations between employees and employers, which I find to be the case in very few other industries, and it is partly so in this case because of continued prosperity. In general, the representatives of the workers and the representatives of the employers have found it possible to put forward concerted views.

Having made that curious intervention, the right hon. and gallant Member disappeared. He was not here to listen to the Chancellor's reply and, so far as I have been able to observe, he has not been seen since. I do not know whether there is any nobbling going on, but if a Division is to take place on the Question, I can understand that some hon. Members might be told that, on the whole, their absence is preferable to their presence. It is, at least, unhappy when an hon. Member gets up and makes a critical speech and then disappears and does not return. However, the right hon. and gallant Member might have had a minor accident, so I will not pursue that subject.

The unreality of the whole of the discussion was evidenced by one single factor in the brilliant speech of my right hon. Friend the Member for Leeds, South (Mr. Gaitskell). He was listened to on these benches with enthusiasm and on the benches opposite with silence up to one point. That point was when he referred to the state of things in 1951. Then hoi polloi below the Gangway burst out in ironical cheers.

Mr. Gerald Nabarro (Kidderminster)

Hoi polloi?

2.45 a.m.

Mr. Hale

I am sorry if the hon. Member for Kidderminster (Mr. Nabarro) does not like that, but it is a Gilbert and Sullivan method of expression and a fairly common phrase. I think it comes in a chorus to "Iolanthe". [An HON. MEMBER: "Sing it."] It is a phrase which may normally be put a little differently, except perhaps in the constituency of my hon. Friend the Member for Liverpool, Exchange (Mrs. Braddock).

Hon. Members cheered ironically. What were they saying? That things were much better now than in 1951. That is what they mean; that is their reaction. Then what are we talking about? If things are better, why do we put on this tax? Why are people to be asked to pay these sums, after two General Elections? The noble Lord the Member for Dorset, South was a little inaccurate when he said that this is the first time in a century that a Government has won two Elections. He may be right; it may be the first time it has happened to the Tory Party. The Liberal Party won three Elections in my lifetime, and I am not yet a hundred years old. The only remarkable thing that has happened, probably, in my lifetime is that this is the first time an Election has been won by a deliberate fraud.

Viscount Hinchingbrooke

The Tory Party has won the Election with an increased number of votes. For the first time in a hundred years the Tory Party has come back to power with an increased number of seats.

Mr. Hale

It may be that the noble Lord is historically accurate, because on the previous occasion the Tory Party won the Election by a minority of votes.

Before I come to the compliments I want to pay to the Chancellor, there are one or two points on which we have not had much information, and to which I would like to refer. On the first of them I must declare a personal interest. It is an acute personal problem. One of my hon. Friends showed me a letter just before I rose to speak from a firm in his constituency, stating that trousers more than 29 inches in girth will have to pay extra tax. I should be grateful for some assurance on that point. If the Economic Secretary to the Treasury would intervene I would be able to continue my speech with more confidence. It seems to me that in the weeks ahead I may have to face the problem of having to resign one seat because I cannot cover the other. The only practical alternative open to me, Sir Charles, as the victim of the credit squeeze, is the possibility of seeking your suffrage to secure me membership of the Scottish Standing Committee.

There is another problem, a very serious one, which I would like to put at once, because we have not discussed textiles on any Amendment. It is almost impossible to frame an Amendment to Clause 1 which would express our modest approval of the removal of the D Scheme and, at the same time, would condemn or approve of some of the measures now proposed. It is a constituency point. I have a letter from a very reputable firm in my constituency, one with a high reputation. It makes protective clothing. The firm is deeply concerned at the proposition that a tax may be imposed for the first time on protective clothing. For the last two or three years—indeed for the last six or seven years—the Minister of Health has conducted a tremendous campaign to induce people to wear this kind of clothing in handling food and all sorts and sizes of commodities which can transmit infection.

When we have got an industry going, after encouraging it by saying that it is serving a national cause, helping national health and adding to the health of the community, the Chancellor of the Exchequer says, "We must put a tax on it." I am quite sure that he did not mean that. He is to be congratulated upon his early response to the representations made yesterday. It is an interesting example of the way in which democracy works, and it is a good thing that democracy works. The Chancellor's fair and direct response to the speeches made from this side of the Committee yesterday is an earnest of the fact that he will consider any serious point.

It is quite fantastic to say, "We are conducting a campaign advocating the extensive use of protective clothing by people who have no special interest in wearing it, or any financial gain from doing so, in order to help serve the community by preventing the spread of infection" and then to impose a tax which will prevent them doing it.

The tax has one more serious and unhappy implication for Oldham. One of the scourges of Oldham, which we were beginning to think would be a thing of the past within the next few years, is epitheliomatous cancer—a cancerous growth normally of the scrotum. It is a scourge of the cotton industry, and no one coming to Lancashire for the first time and walking down the street can fail to see some examples of the suffering it has caused. It first used to affect chimney sweeps—boys—but for years the Tory Party voted against legislation designed to prevent their use for this work.

Viscount Hinchingbrooke

Whig industrialists.

Mr. Hale

No; it was Lord Lauderdale, who called himself a Tory, who threw the Bill out year after year in the House of Lords. It passed the Whig industrialists. I am not defending them, but it was the Tory Party in the House of Lords which stopped the legislation designed to protect the chimney-sweeping boys. This may not be directly concerned with the debate, so I shall not develop the point.

The main consideration of people concerned with Lancashire is the question of the D Scheme. I have never known why it was called the D Scheme, although one can improvise answers even to that occult problem—but the new measures are being referred to in Oldham as the "B Scheme." I want to stress with all the gravity I can the position of Lanashire today. We called the attention of the President of the Board of Trade to this matter two years ago. We did not want to be alarmists. I remember the first speech which I made upon the subject. I said that one of the problems that really worried us was that if we made speeches crying "wolf" in the House of Commons it could do great harm to a delicate industry like the textile industry.

The whole trouble arises from lack of confidence. Anyone who has had to deal with the textile industry knows that all through the years the people working in it have asked, "Will 1923 come again?" It has affected investment. There is always a case to be made out for the company director who says, "I am not going to pay an enormous price to replace my textile machinery unless I can be assured of stability." One can understand that unsettlement and lack of confidence has been one of the big obstacles to success, and the trouble in the last twelve months has been the fantastic fact that we have had new schemes every week.

The Chancellor comes along one day and says that we are a prosperous nation, and that everything is good. He comes along in February and says that we are faced with a crisis; there is the traditional cloud on the horizon. In March, the sun is shining; in August, we are facing a gale. This is a really serious matter for a textile worker who has lost his job and is wondering what is the best thing to do. A big piecer in the cotton industry, a man working a mule, or a coal miner who has worked underground for years, does not like to leave his job. In a sense, all his friends are there; in a sense his industrial club is there.

Cotton has been part of the life of Oldham for 150 years. Every house bears a historic reference to the growth of the industry, to the sufferings of the industry and to things which have been part of the history of the world. The American Civil War affected Oldham and the cotton famine affected Oldham. It all came down from the spinning wheel. It is part of Oldham's history, of Oldham's life, of Oldham's love, but those of us who wanted to see Oldham prosperous never wanted to see it prosperous solely as a textile town. In prosperous days we are glad to be able to boast that 50 per cent. of the people in Oldham are no longer employed in the textile industry, but are in other good employment; and we are proud to boast of the other goods which Oldham has produced. But the textile industry is still Oldham. There was a time when it was England, when it was our great export industry and when the whole question of the balance of payments depended very largely on the products of Lancashire.

What are the facts today? We have tried to get them by Questions and by seeking the figures, but they are not easy to get. Nevertheless, some facts are known. In the first eight months of this year 50 mills closed down. I never use the word "permanently" when I talk of mills closing down, for I always have hope, but in this case there is no immediate intention of reopening. I can never think of a mill closing down without some feeling of emotion. It means that in the 50 mills 850,000 spindles have been closed down and 3,500 mules—a very substantial figure.

This is not the whole story. There is also the problem of the short-time which has been taking place in mule spinning for years. We have tried to raise this matter with the Government ever since they came into office, for the mule spinners have been working short-time for years. As far as one can gather, the reduction in spindle hours is from nine to about seven—about 25 per cent. reduction taking place in operative hours all over the industry. Unhappily, it is not only a question of the export trade. The imports of Indian cloth into this country have risen so that instead of occupying 4 per cent. of the home market, as in 1954, they are now occupying 10 or 11 per cent. What is the good of the Chancellor saying that we want to restrict purchases on the home market in these circumstances.

I was about to develop my main point—I always do so in a single sentence: this is a fantastic economic world. The noble Lord the Member for Dorset, South was quite right when he said all the economists were wrong. Where I disagree with him very much is in the implication which seemed implicit in the observation—that he might be right. Here is a world in which millions of people need cotton. Here is our Colonial Empire in which, we are told, there is no effective demand for cotton—effective demand meaning that people can pay cash—and yet where millions of people need the cotton products of Lancashire. Why do we not have a decent colonial policy which will give these people the means to live a full life and enable Lancashire to sell its goods?

I said that in considering this matter I would say some pleasant words to the Chancellor, and I am anxious to do so. He is always courteous to the Committee. There was a time when we on this side of the Committee regarded him as an intellectual oasis in the and desert of Front Bench mediocrity. But it has to be admitted that things are apparently changing. On the benches opposite fewer of the back bench camels are coming to this fount of learning for refreshment as the weeks go by. Some of those who were among his greatest admirers are now among his most able critics. One of the most damaging criticisms of the Budget came from his hon. Friend the Member for Oxford (Mr. Turner), who tactfully prefaced his remarks by saying that the thanks of the whole nation would go to the Chancellor for his Budget and then damned it hip and thigh and by bell, book and candle in the most effective terms.

The Chancellor cannot be absolved from blame. Everyone knew where he was last February and March. He has issued constant praise to his own navigation. A master mariner in stormy seas has seldom paid higher tributes to himself. Last March he was where Christopher Columbus was on the eve of St. Pilar. He was a long way from where he started and a long way from his objec- tive. He was not quite sure where he was. He was still alive and afloat. Those of us who remember will recall that on the following day Columbus received that ornithological warning of the nearness of land, the birds led him to safety in the West Indies, and his voyage was successfully completed.

3.0 a.m.

Of course, the Chancellor did not have anything like that. His ornithological warning was more in the form of the dove coming to the ark. What, in fact, happened was that a carrier pigeon landed from Uncle Fred's loft bearing a message which said that the Plimsoll line was no longer showing, that the economic bilges were awash and that unless some steps were taken forthwith the ship might sink before he got his vote of confidence. Thus we had a General Election.

The crew had been won over by promise of nothing immediate, but pay-as-you-earn would be mitigated in the weeks that went by. They recorded a vote of confidence and the Chancellor sighted land ahead, saw the Cape of Good. Hope, and not what had been feared, and he was turning round in happy and pleasant seas within a reasonable period. Nautically speaking, it was not correct, but that is different. Since then, of course, we have had a different state of affairs. A little black cloud in the distance has grown into an enormous gale, and the Chancellor has really been doing rather a lot of Walter Mittying.

The economic ship has assumed all forms. Sometimes it is the "Queen Elizabeth," sometimes the "Great Eastern," sometimes the "Cutty Sark" and sometimes the "Golden Hind." It has had all the characteristics of every ship, but always on the helm, always on the bridge, always slapping down the economic orders, stood the Chancellor, facing the economic storm. In these last few weeks we have seen him standing there, chin firmly out and those steel blue eyes looking ahead, letting himself steer the ship through.

In the confusion of orders the Financial Secretary to the Treasury has been lashed to the mast for his own safety and for the safety of everyone else on board, rather in the manner of the girl on the "Hesperus," the courageous form of the Minister of State has been seen above in the crow's nest, taking observations on the uncharted waters ahead. But always the Chancellor is there, issuing certificates for his own navigational efficiency, slapping down the mechanical order for full speed ahead, swinging the wheel of the "Cutty Sark" a turn or two to windward to face the full measure of the storm, and when the moment came Captain Walter Mitty would face the storm with confidence and courage, even if it was a storm of his own creation.

It is unfortunate that the Chancellor arrived in time to hear that portion of my remarks which could be said to be mildly critical and missed that portion in which I complimented him. I thought he needed cheering up. But this is the position. The Chancellor ought to make up his mind and go upstairs to whatever the Ku Klux Klan organisation of the Tory Party calls itself—the 1922 Committee or something of that kind—and say to them, "You must have an agreement about this. Either there is a crisis or there is not a crisis." Quite obviously, if there is not a crisis the Budget of April is justified, and if there is a crisis this Budget would be justified if it were sensible, which it is not.

The Chancellor is in a happy position now. This is a position which he should consolidate and this is his opportunity of going forward to the eventual leadership of the Government Front Bench. [HON. MEMBERS: "Oh."] I would rather have a man of ability with whom I do not agree than—well, let us leave it at that. I did hope that the right hon. Gentleman

might lead the Tory Party. I will be quite frank about it. The right hon. Gentleman can consolidate his position. He has now reached the position in which, whatever he says, he will lose on the swings and gain on the roundabouts. There is no financial situation on which he has not now given two conflicting opinions. There is no statement that the right hon. Gentleman can make on economics that he cannot reinforce by a quotation of his own in the past—and we cannot demolish by another quotation.

In these circumstances, the right hon. Gentleman can look forward to a successful political future, reinforced by the knowledge that he will be always able to convince his supporters that what he is saying now he said before. Few politicians can hope to say more than that. It is only those of us in the comparative obscurity of the back benches who are able to pursue a completely consistent course. Having said that, I hope that the Chancellor will pay some attention to my remarks about protective clothing, and so on, and will give me an assurance later on.

The Parliamentary Secretary to the Treasury (Mr. P. G. T. Buchan-Hepburn) rose in his place and claimed to move, That the Question be now put:—

Question put, That the Question be now put:—

The Committee divided: Ayes 193, Noes 148.

Division No. 47.] AYES [3.08 a.m.
Agnew, Cmdr. P. G. Bryan, P. Fell, A.
Aitken, W. T. Buchan-Hepburn, Rt. Hon. P. G. T. Finlay, Graeme
Allan, R. A. (Paddington, S.) Burden, F. F. A. Fisher, Nigel
Amery, Julian (Preston, N.) Butler, Rt. Hn. R. A. (SaffronWalden) Fleetwood-Hesketh, R. F.
Arbuthnot, John Chichester-Clark, R. Fletcher-Cooke, C.
Armstrong, C. W. Clarke, Brig. Terence (Portsmth, W.) Fraser, Hon. Hugh (Stone)
Ashton, H. Cole, Norman Freeth, D. K.
Atkins, H. E. Conant, Maj. Sir Roger Galbraith, Hon. T. G. D.
Baldock, Lt.-Cmdr. J. M. Cooper-Key, E. M. Garner-Evans, E. H.
Baldwin, A. E. Cordeaux, Lt-Col. J. K. George, J. C. (Pollok)
Balniel, Lord Corfield, Capt. F. V. Glover, D.
Banks, Col. C. Craddock, Beresford (Spelthorne) Godber, J. B.
Barber, Anthony Crookshank, Capt. Rt. Hn. H. F. C. Gough, C. F. H.
Barlow, Sir John Crosthwaite-Eyre, Col. O. E. Graham, Sir Fergus
Barter, John Crouch, R. F. Grant, W. (Woodside)
Baxter, Sir Beverley Cunningham, Knox Grant-Ferris, Wg Cdr. R. (Nantwich)
Beattie, C. Dance, J. C. G. Green, A.
Bevins, J. R. (Toxteth) Davidson, Viscountess Grimston, Sir Robert (Westbury)
Bidgood, J. C. D'Avigdor-Goldsmid, Sir Henry Harris, Frederic (Croydon, N.W.)
Biggs-Davison, J. A. Dodds-Parker, A. D. Harrison, A. B. C. (Maldon)
Birch, Rt. Hon. Nigel Donaldson, Cmdr. C. E. McA. Harrison, Col. J. H. (Eye)
Bishop, F. P. Drayson, G. B. Harvey, Air Cdr. A. V. (Macclesfd)
Body, R. F. Eden, J. B. (Bournemouth, West) Harvey, Ian (Harrow, E.)
Boyle, Sir Edward Emmet, Hon. Mrs. Evelyn Harvey, John (Walthamstow, E.)
Braine, B. R. Errington, Sir Eric Heald, Rt. Hon. Sir Lionel
Brooke, Rt. Hon. Henry Erroll, F. J. Heath, Edward
Brooman-White, R. C. Farey-Jones, F. W. Hill, Mrs. E. (Wythenshawe)
Hinchingbrooke, Viscount Macmillan, Maurice (Halifax) Rodgers, John (Sevenoaks)
Hirst, Geoffrey Macpherson, Niall (Dumfries) Ropner, Col. Sir Leonard
Holland-Martin, C. J. Maddan, Martin Russell, R. S.
Hope, Lord John Maitland, Cdr. J. F. W. (Horncastle) Schofield, Lt.-Col. W.
Hopkinson, Rt. Hon. Henry Maitland, Hon. Patrick (Lanark) Scott-Miller, Cmdr. R.
Horobin, Sir Ian Markham, Major Sir Frank Shepherd, William
Howard, Gerald (Cambridgeshire) Marlowe, A. A. H. Smithers, Peter (Winchester)
Howard, Hon. Greville (St. Ives) Marples, A. E. Stevens, Geoffrey
Howard, John (Test) Marshall, Douglas Steward, Harold (Stockport, S.)
Hudson, W. R. A. (Hull, N.) Mathew, R. Steward, Sir William (Woolwich, W.)
Hulbert, Sir Norman Maude, Angus Stewart, Henderson (Fife, E.)
Hurd, A. R. Maudling, Rt. Hon. R. Summers, G. S. (Aylesbury)
Hutchison, James (Scotstoun) Mawby, R. L. Sumner, W. D. M. (Orpington)
Hylton-Foster, Sir H. B. H. Maydon, Lt.-Comdr, S. L. C. Taylor, William (Bradford, N.)
Iremonger, T. L. Morrison, John (Salisbury) Thomas, Rt. Hn. J. P. L. (Hereford)
Irvine, Bryant Godman (Rye) Nabarro, G. D. N. Thomas, Leslie (Canterbury)
Jenkins, Robert (Dulwich) Nairn, D. L. S. Thompson, Lt.-Cdr. R (Croydon, S.)
Jennings, J. C. (Burton) Neave, Airey Thormon-Kemsley, C. N.
Johnson, Dr. Donald (Carlisle) Nicholson, Godfrey (Farnham) Tilney, John (Wavertree)
Johnson, Eric (Blackley) Nicholson, N.(B'n'm'th, E. & Chr'ch) Touche, Sir Gordon
Kaberry, D. Nield, Basil (Chester) Turton, Rt. Hon. R. H.
Keegan, D. Nugent, G. R. H. Vickers, Miss J. H.
Kerr, H. W. Oakshott, H. D. Vosper, D. F.
Kershaw, J. A. O'Neill, Hn. Phelim (Co. Antrim, N.) Walker-Smith, D. C.
Kirk, P. M. Orr, Capt. L. P. S. Wall, Major Patrick
Lagden, G. W. Page, R. G. Ward, Dame Irene (Tynemouth)
Lambert, Hon. G. Pickthorn, K. W. M. Waterhouse, Capt. Rt. Hon. C.
Leather, E, H. G. Pitt, Miss E. M. Webbe, Sir H.
Leavey, J. A. Pott, H. P. Whitelaw, W.S.I. (Penrith & Border)
Legge-Bourke, Maj. E. A. H. Powell, J. Enoch Williams, Gerald (Tonbridge)
Legh, Hon. Peter (Petersfield) Price, David (Eastleigh) Williams, Paul (Sunderand, S.)
Lindsay, Hon. James (Devon, N.) Prior-Palmer, Brig. O. L. Williams, R. Dudley (Exeter)
Lindsay, Martin (Solihull) Raikes, Sir Victor Wills, G. (Bridgwater)
Longden, Gilbert Ramsden, J. E. Wilson, Geoffrey (Truro)
Lucas, P. B. (Brentford & Chiswick) Redmayne, M. Yates, William (The Wrekin)
Lucas-Tooth, Sir Hugh Remnant, Hon. P.
Mackie, J. H. (Galloway) Ridsdale, J. E. TELLERS FOR THE AYES:
Maclay, Rt. Hon. John Roberts, Peter (Heeley) Mr. Studholme and
McLeavy, Frank Robinson, Sir Roland (Blackpool, S.) Mr. Edward Wakefield.
NOES
Ainsley, J. W. Fletcher, Eric Mason, Roy
Albu, A. H. Fraser, Thomas (Hamilton) Mayhew, C. P.
Allaun, F. (Salford, E.) Gaitskell, Rt. Hon. H. T. N. Mellish, R. J.
Allen, Scholeficlcl (Crewe) Gibson, C. W. Mikardo, Ian
Awbery, S. S. Gordon Walker, Rt. Hon. P. C. Monslow, W.
Bacon, Miss Alice Greenwood, Anthony Moody, A. S.
Bonn, Hn. Wedgwood (Bristol, S.E.) Grey, C. F. Moss, R.
Benson, G. Griffiths, David (Rother Valley) Mulley, F. W.
Blackburn, F. Hale, Leslie Noel-Baker, Francis (Swindon)
Blyton, W. R. Hamilton, W. W. Orbach, M.
Boardman, H. Hannan, W. Oswald, T.
Bottomley, Rt, Hon. A. G. Hayman, F. H. Owen, W. J.
Bowden, H. W. (Leicester, S.W.) Healey, Denis Palmer, A. M. F.
Boyd, T. C. Herbison, Miss M. Pargiter, G. A.
Braddock, Mrs. Elizabeth Hewitson, Capt. M. Parkin, B. T.
Brockway, A. F. Hobson, C. R. Pearson, A.
Broughton, Dr. A. D. D. Holman, P. Peart, T. F.
Brown, Rt. Hon. George (Belper) Howell, Denis (All Saints) Plummer, Sir Leslie
Burton, Miss F. E. Hoy, J. H. Popplewell, E.
Butler, Herbert (Hackney, C.) Hughes, Emrys (S. Ayrshire) Price, J. T. (Westhoughton)
Butler, Mrs. Joyce (Wood Green) Hunter, A. E. Price, Philips (Gloucestershire, W.)
Champion, A, J. Hynd, H. (Accrington) Probert, A. R.
Chapman, W, D. Irving, S. (Dartford) Proctor, W. T.
Chetwynd, G. R. Jeger, Mrs. Lena(Holbn & St.Pncs, S.) Rankin, John
Coldrick, W. Jenkins, Roy (Stechford) Rhodes, H.
Collins, V. J. (Shoreditch & Finsbury) Johnson, James (Rugby) Robinson, Kenneth (St. Pancras, N.)
Corbet, Mrs. Freda Jones, J. Idwal (Wrexham) Rogers, George (Kensington, N.)
Craddock, George (Bradford, S.) Jones, T. W. (Merioneth) Ross, William
Cronin, J. D. Kenyon, C. Silverman, Julius (Aston)
Dalton, Rt. Hon. H. King, Dr. H. M. Silverman, Sydney (Nelson)
Davies, Harold (Leek) Lawson, G. M. Simmons, C. J. (Brierley Hill)
Deer, G. Lee, Frederick (Newton) Skeffington, A. M.
Delargy, H. J. Lever, Harold (Cheetham) Slater, Mrs. H. (Stoke, N.)
Dodds, N. N. Lever, Leslie (Ardwick) Slater, J. (Serigefield)
Donnelly, D. L. Lewis, Arthur Smith, Ellis (Stoke, S.)
Ede, Rt. Hon. J. C. Lipton, Lt.-Col. M. Sorensen, R. W.
Edwards, Rt. Hon. John (Brighouse) MacColl, J. E. Sparks, J. A.
Edwards, Robert (Bilston) McGovern, J. Steele, T.
Edwards, W. J. (Stepney) Mahon, S. Stewart, Michael (Fulham)
Evans, Albert (Islington, S.W.) Mallalieu, J. P. W. (Huddersfd, E.) Strachey, Rt. Hon. J.
Fernyhough, E. Mann, Mrs. Jean Stross,Dr.Barnett (Stoke-on-Trent, C.)
Fienburgh, W. Marquand, Rt. Hon. H. A. Swingler, S. T.
Sylvester, G. O. Wheeldon, W. E. Willis, E. G. (Edinburgh, E.)
Taylor, John (West Lothian) White, Mrs. Elrene (E. Flint) Wilson, Rt. Hon. Harold (Huyton)
Thomas, George (Cardiff) White, Henry (Derbyshire, N.E.) Winterbottom, Richard
Thomson, George (Dundee, E.) Wilkins, W. A. Yates, V. (Ladywood)
Thornton, E. Willey, Frederick Younger, Rt. Hon. K.
Tomney, F. Williams, Ronald (Wigan)
Warbey, W. N. Williams, W. R. (Openshaw) TELLERS FOR THE NOES:
Wells, Percy (Faversham) Williams, W. T. (Barons Court) Mr. Holmes and Mr. Short.
West, D. G.

Question put accordingly, That the Clause, as amended, stand part of the Bill:—

The Committee divided: Ayes 190,Noes 149.

Division No. 48.] AYES [3.16 a.m.
Agnew, Cmdr. P. G. Godber, J. B. Morrison, John (Salisbury)
Aitken, W. T. Gough, C. F. H. Mott-Radclyffe, C. E.
Allan, R. A. (Paddington, S.) Graham, Sir Fergus Nabarro, G. D. N.
Amery, Julian (Preston, N.) Grant, W. (Woodside) Nairn, D. L. S.
Arbuthnot, John Grant-Ferris, Wg. Cdr. R.(Nantwich) Neave, Airey
Armstrong, C. W. Green, A. Nicholson, Godfrey (Farnham)
Ashton, H. Grimston, Sir Robert (Westbury) Nicolson, N. (B'n'th, E. & Chr'ch)
Atkins, H. E. Harris, Frederic (Croydon, N.W.) Nield, Basil (Chester)
Baldock, Lt.-Cmdr. J. M. Harrison, A. B. C. (Maldon) Nugent, G. R. H.
Baldwin, A. E. Harrison, Col. J. H. (Eye) Oakshott, H. D.
Balniel, Lord Harvey, Air Cdre. A. V. (Macclesfd) O'Neill, Hon. Phelim (Co. Antrim N.)
Banks, Col. C. Harvey, Ian (Harrow, E.) Orr, Capt. L. P. S.
Barber, Anthony Harvey, John (Walthamstowe, E.) Page, R. G.
Barlow, Sir John Heald, Rt. Hon. Sir Lionel Pickthorn, K. W. M.
Barter, John Heath, Edward Pitt, Miss E. M.
Baxter, Sir Beverley Hill, Mrs. E. (Wythenshawe) Pott, H. P.
Beattie, C. Holland-Martin, C. J. Powell, J. Enoch
Bevins, J. R. (Toxteth) Hope, Lord John Price, David (Eastleigh)
Bidgood, J. C. Hopkinson, Rt. Hon. Henry Prior-Palmer, Brig. O. L.
Biggg-Davison, J. A. Horobin, Sir Ian Raikes, Sir Victor
Birch, Rt. Hon. Nigel Howard, Gerald (Cambridgeshire) Ramsden, J. E.
Bishop, F. P. Howard, Hon. Greville (St. Ives) Redmayne, M.
Body, R. F. Howard, John (Test) Remnant, Hon. P.
Boyle, Sir Edward Hudson, W. R. A. (Hull, N.) Ridsdale, J. E.
Braine, B. R. Hulbert, Sir Norman Roberts, Peter (Heeley)
Brooke, Rt. Hon. Henry Hurd, A. R. Robinson, Sir Roland (Blackpool, S.)
Brooman-White, R. C. Hutchison, James (Scotstoun) Rodgers, John (Sevenoaks)
Bryan, P. Hylton-Foster, Sir H. B. H. Ropner, Col. Sir Leonard
Buchan-Hepburn, Rt. Hon. P. G. T. Iremonger, T. L. Russell, R. S.
Burden, F. F. A. Irvine, Bryant Godman (Rye) Schofield, Lt.-Col. W.
Butler, Rt. Hn. R. A. (Saffron Walden) Jenkins, Robert (Dulwich) Scott-Miller, Cmdr. R.
Chichester-Clark, R. Jennings, J. C. (Burton) Shepherd, William
Cole, Norman Johnson, Dr. Donald (Carlisle) Smithers, Peter (Winchester)
Conant, Maj. Sir Roger Johnson, Eric (Blackley) Stevens, Geoffrey
Cooper-Key, E. M. Kaberry, D. Steward, Harold (Stockport, S.)
Cordeaux, Lt. Col. J. K. Keegan, D. Steward, Sir William (Woolwich, W.)
Corfield, Capt. F. V. Kerr, H. W. Stewart, Henderson (Fife, E.)
Kershaw, J. A. Summers, G. S. (Aylesbury)
Craddock, Beresford (Spelthorne) Kirk, P. M. Sumner, W. D. M. (Orpington)
Crookshank, Capt. Rt. Hon. H. F. C. Lagden, G. W. Taylor, William (Bradford, N.)
Crosthwaite-Eyre, Col. O. E. Lambert, Hon. G. Thomas, Rt. Hn. J. P. L. (Hereford)
Crouch, R. F. Leather, E. H. C. Thomas, Leslie (Canterbury)
Cunningham, Knox Leavey, J. A. Thompson, Lt.-Cdr.R. (Croydon, S.)
Dance, J. C. G. Legh, Hon. Peter (Petersfield) Thornton-Kemsley, C. N.
Davidson, Viscountess Lindsay, Hon. James (Devon, N.) Tilney, John (Wavertree)
D'Avigdor-Goldsmid, Sir Henry Lindsay, Martin (Solihull) Touche, Sir Gordon
Dodds-Parker, A. D. Longden, Gilbert Turton, Rt. Hon. R. H.
Donaldson, Cmdr. C. E. McA. Lucas, P. B. (Brentford & Chiswick) Vickers, Miss J. H.
Drayson, G. B. Lucas-Tooth, Sir Hugh Vosper, D. F.
Eden, J. B. (Bournemouth, West) Mackie, J. H. (Galloway) Walker-Smith, D. C.
Emmet, Hon. Mrs. Evelyn Maclay, Rt. Hon. John Wall, Major Patrick
Errington, Sir Eric Macmillan, Maurice (Halifax) Ward, Dame Irene (Tynemouth)
Erroll, F. J. Macpherson, Niall (Dumfries) Waterhouse, Capt. Rt. Hon. C.
Farey-Jones, F. W. Maddan, Martin Webbe, Sir H.
Fell, A. Maitland, Cdr. J. F. W. (Horncastle) Whitelaw, W.S.I.(Penrith & Border)
Finlay, Graeme Maitland, Hon. Patrick (Lanark) Williams, Gerald (Tonbridge)
Fisher, Nigel Markham, Major Sir Frank Williams, Paul (Sunderand, S.)
Fleetwood-Hesketh, R. F. Marlowe, A. A. H. Williams, R. Dudley (Exeter)
Fletcher-Cooke, C. Marples, A. E. Wills, G. (Bridgwater)
Fraser, Hon. Hugh (Stone) Marshall, Douglas Wilson, Geoffrey (Truro)
Freeth, D. K. Mathew, R. Yates, William (The Wrekin)
Galbraith, Hon. T. G. D. Maude, Angus
Garner-Evans, E. H. Maudling, Rt. Hon. R. TELLERS FOR THE AYES:
George, J. C. (Pollok) Mawby, R, L. Mr. Studholme and
Glover, D. Maydon, Lt.-Comdr. S. L. C. Mr. Edward Wakefield.
NOES
Ainsley, J. W. Hamilton, W. W. Plummer, Sir Leslie
Albu, A. H. Hannan, W. Popplewell, E.
Allaun, F. (Salford, E.) Hayman, F. H. Price, J. T. (Westhoughton)
Allen, Scholefield (Crewe) Healey, Denis Price, Philips (Gloucestershire, W.)
Awbery, S. S. Herbison, Miss M. Probert, A. R.
Bacon, Miss Alice Hewitson, Capt. M. Proctor, W. T.
Benn, Hn. Wedgwood (Bristol, S.E.) Hinchingbrooke, Viscount Rankin, John
Benson, G. Hobson, C. R. Rhodes, H.
Blackburn, F. Holman, P, Robinson, Kenneth (St. Pancras, N.)
Blyton, W. R. Holmes, Horace Rogers, George (Kensington, N.)
Boardman, H. Howell, Denis (All Saints) Ross, William
Bottomley, Rt. Hon. A. G. Hoy, J. H. Short, E. W.
Bowden, H. W. (Leicester, S.W.) Hughes, Emrys (S. Ayrshire) Silverman, Julius (Aston)
Boyd, T. C. Hunter, A. E. Silverman, Sydney (Nelson)
Braddock, Mrs. Elizabeth Hynd, H. (Accrington) Simmons, C. J. (Brierley Hill)
Brockway, A. F. Irving, S. (Dartford) Skeffington, A. M.
Broughton, Dr. A. D. D. Jeger, Mrs. Lena(Holbn & St.Pns, S.) Slater, Mrs. H. (Stoke, N.)
Brown, Rt. Hon. George (Belper) Jenkins, Roy (Stechford) Slater, J. (Sedgefield)
Burton, Miss F. E. Jones, J. Idwal (Wrexham) Smith, Ellis (Stoke, S.)
Butler, Herbert (Hackney, C.) Jones, T. W. (Merioneth) Sorensen, R. W.
Butler, Mrs. Joyce (Wood Green) Kenyon, C. Sparks, J. A.
Champion, A. J. King, Dr. H. M. Steele, T.
Chapman, W. D. Lawson, G. M. Stewart, Michael (Fulham)
Chetwynd, G. R. Lee, Frederick (Newton) Strachey, Rt. Hon. J.
Coldrick, W. Lever, Harold (Cheetham) Stross, Dr.Barnett (Stoke-on-Trent, C.)
Collins, V. J. (Shoreditch & Finsbury) Lever, Leslie (Ardwick) Swingler, S. T.
Corbet, Mrs. Freda Lewis, Arthur Sylvester, G. O.
Craddock, George (Bradford, S.) Lipton, Lt.-Col. M. Thomas, George (Cardiff)
Cronin, J. D. MacColl, J. E. Thomson, George (Dundee, E.)
Dalton, Rt. Hon. H. McGovern, J. Thornton, E.
Davies, Harold (Leek) Mahon, S. Tomney, F.
Deer, G. Mallalieu, J. P. W. (Huddersfd, E.) Warbey, W. N.
Delargy, H. J. Mann, Mrs. Jean Wells, Percy (Faversham)
Dodds, N. N. Marquand, Rt. Hon. H. A. West, D. G.
Donnelly, D. L. Mason, Roy Wheeldon, W. E.
Ede, Rt. Hon. J. C. Mayhew, C. P. White, Mrs. Eirene (E. Flint)
Edwards, Rt. Hon. John (Brighouse) Mellish, R. J. White, Henry (Derbyshire, N.E.)
Edwards, Robert (Bilston) Mikardo, Ian Wilkins, W. A.
Edwards, W. J. (Stepney) Monslow, W. Willey, Frederick
Evans, Albert (Islington, S.W.) Moody, A. S. Williams, Ronald (Wigan)
Fernyhough, E. Moss, R. Williams, W. R. (Openshaw)
Fienburgh, W. Mulley, F. W. Williams, W. T. (Barons Court)
Fletcher, Eric Noel-Baker, Francis (Swindon) Willis, E. G. (Edinburgh, E.)
Fraser, Thomas (Hamilton) Orbach, M. Wilson, Rt. Hon. Harold (Huyton)
Gaitskell, Rt. Hon. H. T. N. Oswald, T. Winterbottom, Richard
Gibson, C. W. Owen, W. J. Yates, V. (Ladywood)
Gordon Walker, Rt. Hon. P. C. Palmer, A. M. F. Younger, Rt. Hon. K.
Greenwood, Anthony Pargiter, G. A.
Grey, C. F. Parkin, B. T. TELLERS FOR THE NOES:
Griffiths, David (Rother Valley) Pearson, A. Mr. John Taylor and
Hale, Leslie Peart, T. F. Mr. James Johnson
Mr. Gaitskell

I beg to move, That the Chairman do report Progress and ask leave to sit again.

I submit this Motion in order to obtain from the Chancellor of the Exchequer an explanation of the extraordinary way in which the previous debate was brought to a close, and a statement of his intentions for the rest of our sitting. Hon. Members will recall that last night, just before we adjourned, the Chancellor said in the presence of many of us that we would have opportunities to speak on the Question "That the Clause stand part of the Bill." Believing that that meant, as I think I was entitled to, that there would be no attempt to move the Closure, we agreed last night not to oppose the Motion that we should report Progress. Yet this evening, or rather this morning, when at least 12 or 15 of my hon. Friends were still waiting to speak, the Patronage Secretary moved the Closure.

We must assume that the Government are not so disunited that the Patronage Secretary moved the Closure against the wishes of the Chancellor. I hear one of my hon. Friends say that he did not approve of it. If we could have an apology from the Chancellor that would clear the air. It would have to be followed by his resignation, or that of the Patronage Secretary, or of both of them. There are differing views on whether it should be the Chancellor. I think that hon. Members opposite, on the whole, would rather get rid of the Chancellor, at the moment; but we would prefer to keep him and get rid of the Patronage Secretary, because he was the person who moved the Closure.

This is quite unsatisfactory. I do not know whether the right hon. Gentleman assumed that the only person who was dissatisfied yesterday was my hon. Friend the Member for Liverpool, Exchange (Mrs. Braddock). There was no doubt that she was dissatisfied yesterday, and made a powerful speech this evening; but I know she will not mind my saying that she was not the only one in that position, and that a number of other hon. Members were anxious to speak. It was outrageous that the Chancellor, having given a solemn undertaking last night, should either inspire, or at any rate permit, the Patronage Secretary to closure the debate in this way. I must ask for an explanation. Does it mean that he does not want to go further tonight? We are sorry if that is so, because many of my hon. Friends wanted to make further speeches. Is the Chancellor going on using the Closure in this way? We must have an explanation before we can proceed further.

3.30 a.m.

Mr. R. A. Butler

The right hon. Gentleman has made several imputations, and I cart reply to them quite easily. When we adjourned last night I was attempting to meet the convenience of the Committee, as I have done for four Budgets with absolute success, and with a good deal of understanding from the right hon. Gentleman and his party, in view of the need to meet the Parliamentary business, to conduct it in a decent way and not be obliged to bring things to a close or to use the Closure. On this occasion the right hon. Gentleman said, after four hours' debate—which I have checked—on the Question, "That the Clause, as amended, stand part of the Bill" that his hon. and right hon. Friends would continue the debate. It was, therefore, seen on this side of the Committee that if we are to get the business which we must get, because it is essential that we should make further progress tonight—

Mr. G. Brown

Who says so?

Mr. Butler

The Government say so. Strange to relate, we have a Government which is able to govern, which may seem strange to hon. and right hon. Gentlemen opposite. It is quite a good thing to remember at times. In view of that, and the fact that the right hon. Gentleman obviously thought that it would be a good thing for his followers to proceed with the debate, we thought the only course, and a perfectly fair course, to adopt was the one we did adopt, and I make no apologies about it whatever.

On the second point, when I spoke last night I said that there would be various opportunities of speaking, one of which was the debate on the Question, "That the Clause stand part of the Bill" —which I anticipated would last two hours but which, in fact, lasted four hours, which I really think is quite sufficient discussion on the Purchase Tax when we have had earlier debates on the Purchase Tax, and when the Committee realises that we have further debates on Purchase Tax to come.

I have nothing to add in reply to the right hon. Gentleman, except to say that the nearer we can get to the practice to which I have always attached great personal importance, of getting our business by agreement, the better it will be. Subject to trying to continue that rule, we intend to get the further business, and if hon. and right hon. Gentlemen opposite do not intend us to get it then we shall have to get it despite them.

Mr. Brown

Tough guy.

Mr. Butler

I am not a tough guy at all, but the fact is that we intend to get this Budget business, and other Government business which is of equal importance which is coming up in the weeks to come, and if we show any signs, in face of the right hon. Gentleman's imputations, of not being capable of getting or ready to get our business I do not think we should be fit for the offices we hold or the responsibility we have.

Therefore, I say quite sincerely, let us try as far as we can to give every hon. and right hon. Member the opportunity of expressing his view. I think that on the Finance Bill that is a matter of supreme importance. I indicated in my last speech that I was desirous of meeting hon. and right hon. Gentlemen opposite, but I did not get a very good response from the right hon. Gentleman for meeting him on that point of procedure, simply because I thought it was just; he tried to make fun of that. I have tried to serve the Committee to the best of my ability, and I shall now continue to serve the Committee to the best of my ability while getting the business which it is essential for us to get.

Mr. Michael Stewart (Fulham)

The speech which the Chancellor has just addressed to us has been entirely true to form. In the manner pointed out by my hon. Friend the Member for Cleveland (Mr. Palmer) and my hon. Friend the Member for Oldham, West (Mr. Hale), he has laid on the butter really thick and given himself a few extra certificates.

It was also true to form in that the Chancellor managed to skate over the real view put before him by my right hon. Friend the Member for Leeds, South (Mr. Gaitskell). It is well known that the Chancellor used a form of words which gave the impression that he would welcome many hon. Members who had not previously had an opportunity of expressing themselves getting such an opportunity in the debate on the Question, "That the Clause, as amended, stand part of the Bill." That was the impression which had previously been given. It became clear when it came to the point that they were not to have that opportunity.

This is a repetition on a relatively small scale of the somewhat dubious procedure adopted over the Budget last year and the Budget before that. It was perhaps not a particular matter for marvel that the Closure was employed when not only were hon. Members on this side of the Committee getting up, but when hon. Members behind the Chancellor were rising. Surely it is difficult to believe that it was necessary to move the Closure in those circumstances—or would have been had it not been for the fact that the great majority of hon. Members who have risen from the other side of the Committee have been in opposition to the Chancellor. Possibly if he had observed those behind him as well as those in front it would have strengthened his determination to bring this unhappy procedure to an end.

Earlier, my hon. Friend the Member for Oldham, West made a most impressive speech, although, if he will allow me, I will make one criticism of it. At the beginning of the speech he said he wished to say a word in favour of the Chancellor, but it did not appear to me when he finished the speech that he had entirely succeeded in doing that. I was anxious to have a try myself because I felt that there lay underneath the question we had been discussing a grand design in the mind of the Chancellor—the design of increasing and sharpening the difference in standards of life and culture which exist between the different classes in this country. I felt that no speech on either side of the Committee—if I may venture to say so with humility—had quite given the Chancellor the credit for the way in which that design had been pursued. Now, by the moving of the Closure, the powerful speech I might have made in defence of the Chancellor by saying what he in his customary modesty had failed to point out in the speeches he made during the evening, cannot be delivered.

After all, the Chancellor has not had so many defenders and he is robbed of one more. For all I know, other hon. Members on both sides of the Committee might have wanted to defend him. We are faced with the situation that the Chancellor—if I may use a colloquial phrase suggested by an earlier speech by my right hon. Friend the Member for Leeds, South—having once again led us up the garden in the matter of the opportunity which hon. Members might have expected to have had, having listened again to his presentation of certificates to himself, and having had it made increasingly clear that opportunities for discussion are not to be made available, I feel bound to say that I am in full agreement with the view expressed by my right hon. Friend the Member for Leeds, South, that it would be proper for us to conclude the proceedings at this stage in order that the Chancellor may at least have an opportunity to find a few more friends among those who are supposed to be supporters of the Government.

Mr. Roy Jenkins

For four years we have listened to constant boasts from the Chancellor and his assistants that never once has a Closure been used in a Finance Bill debate. We shall not have to listen to that again at any rate. It is typical of the Chancellor that, having boasted for four years about never having used the Closure, he now boasts of the wonderful judgment with which he used it at precisely the right time. It is significant that it was implicit in his speech to the Committee that his judgment of how long the debate on the Clause should last should have been accepted by the whole Committee as infallible. He said he thought two hours would be reasonable, and his tone implied that it was most reprehensible on the part of anybody else to have any other view at all as to how long it should last.

There is another point to be borne in mind. Not only were hon. Members opposite still rising when the Patronage Secretary moved the Closure, but throughout the whole debate hon. Members had been called from each side of the Committee alternately, a state of affairs which did not apply when the Labour Government used the Closure on the Finance Bill. It is reasonable to assume that if the debate had been going on an unreasonably long time, that would have been recognised by Government back benchers and they would not have participated.

In view of the overthrow of the Chancellor's proud record of the last four years, he ought now to adjourn further consideration of the Bill and consider his own position, because I certainly do not think he will be able to make as rapid progress as he might like if he continues to conduct the debate in his present mood. The Chancellor is sometimes not at his best in the middle of the night. He announced a little earlier that he respected anyone on his own side or on this side of the Committee who disagreed with him. He was not showing much respect during the speech of his noble Friend the Member for Dorset, South (Viscount Hinchingbrooke), for we had one or two rather sharp interventions from him.

In the Budget debate I referred to the Chancellor's sullen bad temper. That was taken up quickly by the Economic Secretary, and the Chancellor brightened up a little after that. I fear that if he goes on in this debate in his present mood, he will be sinking back into his sullen bad temper, and that will not do him or the progress of the Bill any good at all.

Having got into the position where he has had to throw overboard his proud boast of the last four years, where he himself is showing some little signs of wear and tear, and where he is receiving from his assistants at the Treasury rather less able help on the Bill than he has had in previous years, he would be well advised to adjourn the debate and go on with the other important Amendments when he is rather fresher than he is at present.

Mr. Victor Yates (Birmingham, Ladywood)

As one who, normally, never speaks on a Finance Bill—I have never considered it to be particularly my subject—I am shocked when the Chancellor says that he considers that the time so far allowed to the debate is adequate. He must have known—it was patently obvious last night—that a large number of hon. Members on this side of the Committee, some of whom had not previously spoken, wanted to put the points of view of their constituencies. The right hon. Gentleman specifically said that we should have a full opportunity to put the points of view of our constituents.

I represent a new constituency which contains the larger part of the Birmingham jewellery industry. Those of us who represent constituencies of that type are entitled to make a contribution to the debate. I believed, Sir Charles, that you conveyed the impression that on the Question, "That the Clause, as amended, stand part of the Bill," we should be able individually, as representatives of constituencies, to state our problems as they are affected by the Budget.

The Chairman

I said that, but, on the other hand, I did not say that I would never on any account accept the Closure Motion.

Mr. Chapman

That is the whole point.

3.45 a.m.

Mr. Yates

That is true. You did not say that you would not accept a Closure Motion in any circumstances, Sir Charles. The issue is so serious that the constituency of practically every hon. Member is involved. It is absolutely shocking that the Chancellor should decide to stop the discussion on this short Bill, and on a vital Clause which affects every home in the land.

The Economic Secretary to the Treasury knows that Birmingham's jewellery industry is of very great importance. When he was successful in the Ballot, about two years ago, he introduced a Motion on behalf of this industry, which now comes into my constituency.

The Chairman

This has nothing to do with whether I report Progress.

Mr. Yates

We have not been given a fair opportunity. I am emphasising the importance of the industry whose problems the present Economic Secretary, then supposed to be a true representative of Birmingham, placed before the House two years ago. It was important then, but now we have not been able to say a word about the great problems of this industry. It is important that you report Progress, Sir Charles, so that the Chancellor might now reconsider the whole problem. What chance have I or other hon. Members to put before the Chancellor the problems of marketing arising from imposing increased Purchase Tax on this range of commodities?

The Chairman

The hon. Gentleman asks me a question. The only answer is that he cannot do it at the moment.

Mr. Yates

I said I was shocked and hon. Gentlemen laughed. That is grossly unfair to those of us who do not normally worry the Committee except upon very important matters. It is not as though we spoke on every occasion. I do not think I have spoken on a Finance Bill for a few years. The Chancellor says that he always gives a fair chance to us, but he has deliberately prevented those of us who remained in our places from giving him the benefit of our opinions, and so getting a full explanation.

My right hon. Friend who moved to report Progress said that he was not asking the Committee to go on all night. He did not want the House to think that the debate was finished; and those who wanted to speak would have a chance. The Chancellor has let us down. I support the Motion.

Mr. Albu

On a point of order. I am not quite certain upon what grounds you accepted the Motion, Sir Charles. As I understand, it is usual not to accept a Motion for the Closure, in Committee, until three, four or five speeches have been made on one side of the Question. Is it for that reason that you accepted the Motion?

The Chairman

What Motion?

Mr. Albu

The Motion for the Closure.

The Chairman

I had been listening to speeches for four hours upon the Question, "That the Clause, as amended, stand part of the Bill."

Mr. Albu

Is it because they were all on one side of the Question that you accepted the Motion?

The Chairman

I hope that the hon. Member is not suggesting that I did anything unfairly.

Mr. Albu

No, Sir Charles. I understand that in Committee it is usual for the Motion for the Closure not to be accepted when speeches are being made upon both sides of the Question. Not until a number of speeches have been made on one side of the Question is the Motion accepted. I only wanted to know whether those were the grounds for your decision in this case.

The Chairman

The hon. Member is putting a question which has never arisen. When the Chair feels inclined to accept a Motion for the Closure, it does so; when it feels inclined to refuse it, it does so. The material of the speeches does not affect the matter.

Mr. R. A. Butler

A later Amendment deals with silverware, cut glass, and so forth, and will give an opportunity to the hon. Member of raising some of the points in which he is interested. If we were able to reach that, we should be able to make some progress, and the hon. Member and his constituents would be interested in our discussion.

As I calculate the position, there are still eight or nine discussions remaining on the subject of Purchase Tax, and I do not think it likely that any hon. Member will be inclined to go home without having expressed his opinion upon many of these important subjects. I would further add, in answer to the hon. Member for Stechford (Mr. Roy Jenkins) that I have never been calmer in my life. I am quite ready to assist the Committee. I apologise to the Committee and to the right hon. Gentleman if I gave any other impression. It is our wish to get through the business in the best possible spirit, but it appeared to us that there was very little chance of getting though it unless we adopted the course we chose.

Mr. Ede

After listening to that second speech by the Chancellor, I must say that he would be better served if he left the oratory upon this issue to the Patronage Secretary, who can always—in the shortest possible time—see that the Government get their way. In his first speech upon the Motion the Chancellor issued a challenge to hon. Members on this side of the Committee. Let me assure him that it will be taken up, for he spoke not only for this Bill but for the remainder of the Measures which the Government propose to bring before the House—and Measures not connected with his Department but spreading over the whole range of Government policy.

Whatever may have been the feeling of the Committee before he made his first speech upon this Motion tonight, let me assure him that he has lost the confidence and the esteem of this part of the Committee as being a competent person to lead us in the discussions we are bound to have upon this issue. It was an astonishing speech. It really showed the relief he felt at being able to escape from the criticisms which had been hurled at him from his own side of the Committee earlier in the evening, and which would have been continued but for the intervention of the Patronage Secretary.

In my experience of many all-night sittings in the House I have never known the Closure to be moved when a number of hon. Members on the Government side have risen to continue the discussion. It was not a fear of what might be said by hon. Members on this side of the Committee that moved the right hon. Gentleman. I have sat by his side too often not to know that he never fears criticism from those whom he knows to be convinced opponents.

What has happened today is that one hon. Member after another, capable of speaking with very considerable weight on behalf of particular industries, while paying a wonderful tribute to the Chancellor's personal character in the first two or three sentences, has gone on to prove that that Chancellor knows nothing about the business before the Committee and is only leading the country into a worse state than that in which he has allowed it to get already.

Let us be quite certain of this: any feeling there has been on this side of the Committee that the right hon. Gentleman is a little above the battle has disappeared. When he says, "I am genuine. I am sincere. I recognise that the hon. Member who has spoken is sincere"; all that is a mere suave polish which vanishes the moment he gets rattled by what is occurring behind him, and we get the kind of brutality which we would have expected from the former Captain Margesson.

The right hon. Gentleman has done himself no service by the first speech he made this evening, and when, in future, he tries to apply soft soap, in the hope that a little friction will be avoided, we shall not forget the threats which he has uttered and his indication that the Government intend to get their business, even when their supporters behind them think that it is bad business.

Mr. S. Silverman

Unlike some of my right hon and hon. Friends, I do not complain of the Chancellor's bad temper. I understand that he has a great deal to be bad tempered about and perhaps, in view of the provocation he has had all yesterday and throughout the night, he is deserving of a slight expression of sympathy and appreciation in that his temper is no worse.

But that is no reason that the Committee should suffer from it or that his bad temper, however understandable, should be a law for the Committee. It may very well be that in our discussions we are sometimes a little extravagant, that discussions go on a little too long, and that it is necessary for Governments to get their business and to make up their minds at what stages they will insist on getting it; but they must not do that by the ipse dixit of the Chancellor of the Exchequer. If they want a Guillotine Motion on the Committee stage of the Finance Bill, why do not they move one?

The right hon. Gentleman thinks two hours would be enough. What does it matter what he thinks? If he wishes to invite us to say that two hours is enough, then the Committee may accept that opinion and pass a Resolution to that effect or it may not, but if he has not the guts to move a Guillotine Motion on the Committee stage of the Finance Bill, he is not entitled to act as though we had already adopted one. The Chancellor was good enough to tell us that he would not have sought the Closure on the Question, "That the Clause, as amended, stand part of the Bill," but for something said by my right hon. Friend the Member for Leeds, South (Mr. (Gaitskell), in his speech a little while ago. He said it was that part of my right hon. Friend's speech hi which he indicated that he was intervening at that stage in the debate not by any means for the purpose of indicating that it should then come to an end, but because of the understanding which we all had—and which I am bound to say I thought the Chair was a party to last night—that the Closure would not be moved and that if we gave the Government the stage they wished to have last night, then we would all be allowed to say what we wished to say about it during our debates today.

4.0 a.m.

I do not want to make a personal point or grievance of it, but I have sat through the whole of the Committee stage of the Finance Bill so far, most of the day before yesterday, all yesterday, and from 9 p.m. last night until now. I have not made a speech on any one of the questions which have been put before the Committee during all that time. I even refrained from seeking to do it on any of the Amendments because I relied on the understanding that one could have a general debate on the Clause. I reserved myself for it. I did not prolong the debate on the several series of Amendments where I could easily have said some part of what I wanted to say to the Committee and the Chancellor about it.

I sat from 9 o'clock until quarter past three waiting for an opportunity. I got up after every speaker. I am not complaining that I was not called. The Chair cannot call more than one at a time and must call them in some order, so I have no complaint about that. But Lancashire is involved in the matters which we are discussing—very seriously and deeply involved.

I spoke for a short time in the Second Reading debate on the Finance Bill, and limited what I had to say largely to questions about Lancashire. The Economic Secretary to the Treasury replied at the end of the debate with a very attractive speech. I did not agree with a word of it, but he always speaks attractively and the fact that one does not agree does not lessen the attraction. But he did not find time to mention Lancashire once, and I had no reply to the points I made in that debate. That has made me all the more anxious to take advantage of the opportunity I thought I had been promised last night, and I think it was rather a shocking thing, in view of all those circumstances, that the Closure should be moved, and for the Chancellor to say now that he did it because of something said by my right hon. Friend. It is something that, if it were not out of order to say so, I should say I find very difficult to believe.

None of us on this side of the Committee, with all our respect for my right hon. Friend the Member for Leeds, South, would speak or refrain from speaking merely in response to an indication or hint from him. If we had nothing that we thought worth saying we would not be provoked or incited to speak because my right hon. Friend wanted it. I think that my right hon. Friend would be the first to admit that there have been many occasions when he thought we might have been more restrained and we have taken another view and have made our speeches. We shall continue to do so, subject to the Chancellor's monolithic guillotine, his ipse dixit, his riding of the storm, his determination that he, and nobody but he, will decide what the Committee will discuss, when it will discuss it, how long it will discuss it, when it will stop and when it will resume. That is not the practice, and if the right hon. Gentleman thinks it is, the Committee on both sides should take some opportunity of convincing him of his error.

I hope that we shall pass the Motion. There are plenty more days left yet, and plenty more nights. If the right hon. Gentleman wants matters discussed in that way he can have them discussed in that way. No one can see any sense of emergency in anything that the right hon. Gentleman has proposed. Certainly, there is an emergency, but the emergency will not get any worse for lack of the measures that the Chancellor is proposing to take. We can afford to wait, and the right hon. Gentleman may find that he will have to wait longer for his measures than he would have had to wait had he shown a better sense of the duty which is demanded of him in circumstances like these.

Mr. G. Thomas

The Chancellor has come out in his true colours. It is astonishing what a difference he is showing in his demeanour in this Parliament from the demeanour he showed in the last Parliament, when the Government majority was so much smaller than it is now. The Chancellor has broken faith with the House of Commons and has broken with the understanding which he conveyed to the Committee in the hearing of us all.

Mr. R. A. Butler

indicated dissent.

Mr. Thomas

The Chancellor need not shake his head. The Committee heard what he said on that occasion, and it is not merely a matter of the Chancellor's interpretation of his own words, but the interpretation that the Committee put upon them. No one on the benches opposite has endeavoured to suggest that any indication was given that on the Question, "That the Clause as amended, stand part of the Bill," the Government would not follow the tradition, always accepted by the Committee and the House of Commons hitherto, that there should be full and frank discussion until every hon. Member had had his say.

It is little short of monstrous that when so many millions of pounds of the taxpayers' money are involved in the Clause, so many hon. Members have been silenced and denied the right to speak in Committee. The Chancellor has indicated that the Government apparently have decided upon this line of action in connection with the new rents Measure and other Measures which are to be introduced during the coming weeks. The right hon. Gentleman, therefore, has informed the nation that the Government are ready, with their new-found majority, to ride rough-shod over the Opposition. The right hon. Gentleman may succeed in doing it here, but he will damage both himself and his party in the country, because such bullying tactics are not popular among the people.

I remember the indignation of hon. and right hon. Members opposite when my right hon. and learned Friend the Member for St. Helens (Sir H. Shawcross) once said jocularly, "We are the masters now." [HON. MEMBERS:"Where is he?"] How they sought to exploit it in the country, but now we hear from the Chancellor another version of the same words. I say with every respect that I think it dangerous for us to start asking where any right hon. and hon. Members are tonight. This is a well-attended Committee for an all-night sitting, and I feel very pleased with the way the Chamber has been filled for most of the debate. We have not been addressing empty benches. But the very fact of the attendance of hon. Members throughout the night is an indication of the major importance of the decision we are called on to take.

I suppose that there is no way of undoing the mischief which has been done by cutting short this discussion, other than by continuing the discussion in the country. In the meantime, neither the Chancellor nor the Government have the moral right to say to the Committee, "Let us consider the next item on the Order Paper" without any guarantee that when the whims of the Chancellor are suited the Closure will not be moved again. I hope that the Committee will support my right hon. Friend and accept the Motion.

Mr. Hamilton

I am glad to rise after the hon. Member for Cardiff, West (Mr. G. Thomas), who is a Welshman, because he was the first Welshman to take part in this debate, and I am the first Scottish Member, although I have been sitting here non-stop since eleven o'clock.

It is obvious that the Chancellor has insensed hon. Members on this side of the Committee. Speaking for myself, it is positively nauseating to see him getting up at that Box and parading his honesty like a prostitute parading her morality in Piccadilly—

Hon. Members

Withdraw.

The Temporary Chairman (Mr. Malcolm MacPherson)

There is a limit to the phraseology which should be used, even at this time of night, and I hope that the hon. Gentleman will continue without using phrases of that sort.

Hon. Members

Withdraw.

Mr. Hamilton

I think that the picture I painted is an accurate one, and that while the language may have been a bit more colourful than hon. Members opposite would like, it is, nevertheless, effective.

Hon. Members

Withdraw.

The Temporary Chairman

I have not asked the hon. Member to withdraw, and in the remark he has just made I think that at least he made a partial withdrawal. Perhaps he may now be allowed to proceed.

Mr. Hamilton

The Chancellor, in his speech on the Question, "That the Clause, as amended, stand part of the Bill," boasted about the full employment that he had brought about and the factory space that had been built under this Government. We in Scotland have twice the unemployment of the United Kingdom as a whole and we have not the factory buildings that we should like. These are just some of the points that I should have liked to have made, had I had the opportunity of speaking on that Question.

4.15 a.m.

It is obvious that even if this Motion is not accepted we shall not make much more progress tonight, or, rather, this morning. But, assuming that we do not make any more progress now, I cannot see what is lost. Rumour has it that we are to have five weeks' holiday at Christmas—or even six. If that be the case, it is an added argument for suspending business now and knocking a week off that holiday. Back bench Members have a vested interest in knocking a week off it. The Chancellor may parade his forces behind him and say, "We will get the business through despite the Opposition." I hope the right hon. Gentleman keeps it up, because that is just what unites us on this side of the Committee.

As my right hon. Friend the Member for South Shields (Mr. Ede) said, we are prepared to accept the challenge. I wonder whether hon. Gentleman opposite are fully conscious of what that implies. It is quite obvious that the Chancellor is not so much concerned with gagging this side of the Committee as the other side, and that, I think, is why he caused the Closure to be moved. But when he gets up and says, in his superior tone, that he estimated that there would be a two-hour debate and that we wicked Members took four hours, I would point out to him that the Creator is up above and not in the Treasury. I wish the Chancellor would realise that; he has really got on the nerves of hon. Members on this side of the Committee. [HON.MEMBERS: "Oh."] We are in no hurry. We are trying to make democracy work, and it is quite clear that the majority of this Committee is against the basic principles in Clause 1.

The hon. Lady the Member for Tyne-mouth (Dame Irene Ward)—who, I see, is asleep outside the Chamber—made a similar protest a few days ago against the old-age pensioners earning rule. Again, we had a majority of the House in favour of a modification of that rule, and the hon. Lady asked why we pretended to be a democratic community when we had an Executive which would not accept majority decisions of the House. The Chancellor is in that position today. He knows full well that a majority of this Committee is against him in his proposals in Clause 1, and that is why, with his connivance, the Patronage Secretary moved the Closure. That is why we are convinced that he was wrong. The right hon. Gentleman will get very little more progress now. Although he may call upon his legions behind him and win the day in the Division Lobby, he will not get the progress he wanted.

Mr. Walter Monslow (Barrow-in-Furness)

Like my colleagues, I have stayed for many hours in the Chamber with a view to speaking. I have been denied that opportunity. I represent a large industrial constituency. I have had a large volume of correspondence which clearly indicates to me that the policies which the right hon. Gentleman is pursuing are policies which they are not disposed to accept without protest. I thought the Chancellor's attitude a moment or two ago was indicative of the Hitler régime in the Reichstag. I am bound to say that, because he certainly conveyed that impression to me.

Mr. R. A. Butler

We have looked up the number of times upon which the right hon. Member for Leeds, South (Mr. Gaitskell), when he was Chancellor of the Exchequer, moved the Closure on the occasion of his Budget. The Closure was moved more frequently when hon. Gentlemen opposite were in Government. We are sorry to have done it on this occasion, but we have done it less than was done by hon. Gentlemen opposite.

Mr. Monslow

I do not want to take a selfish view. I have sat in the House many times—the hon. Member for Stafford and Stone (Mr. H. Fraser) smiles; he can smile—when I would have liked to have spoken, had I had the opportunity. But there is no hon. Member on either side who has ever heard me complain. I have taken it in my stride and accepted the basis of democracy, which is that only one hon. Member at a time can speak. By his attitude tonight the Chancellor is attempting to destroy what we preserved in fighting the Hitler régime, the right of social democracy to prevail in Britain. Whatever he may attempt to do, he will not stifle discussion. I ask him to be more conciliatory and co-operative. [Laughter.] If hon. Members want to be hilarious, that is O.K. by me.

I am disposed to play my part in the debate, if I am given the opportunity and if this is a democratic assembly I hope that that right will not be denied me by hon. Members opposite. The Chancellor of the Exchequer is a prominent member of the Church of England and his attitude reminds me of the hymn, "I am weary worn and sad." Having that attitude, it would be better for him to accept the Motion in the interests of himself, the Committee and the country.

Mr. Stephen Swingler (Newcastle-under-Lyme)

With the Chancellor's permission, I should like to make one or two observations. The Motion arises from the Chancellor's bad faith. I do not think that that is really denied. It has clearly emerged in the course of our discussion. The Chancellor promised an ample opportunity for hon. Members on both sides of the Committee to discuss the Question, "That the Clause, as amended, stand part of the Bill." The Clause covers a very wide range of subjects.

We now learn that when the Chancellor says that he wants to have ample discussion, he means a couple of hours.[HON. MEMBERS: "Four"]. The Chancellor said that two hours was ample. On Tuesday night he said that he was in favour of ample opportunity for hon. Members to discuss Clause 1. We now learn from him, in his explanation of the Closure, that he meant a couple of hours. We now know what the Chancellor means when he says that he is in favour of ample discussion.

Mr. Butler

The hon. Member is raising a question of good faith. Speaking from memory, what I said was that there would be ample opportunity today—that is, during the whole of the sitting—to discuss these aspects. We took each of the rates and we had a very considerable discussion on each of the rates. I said that there would also be an opportunity on the Question, "That the Clause stand part of the Bill." That discussion lasted from about 3.30 p.m. to about 3.30 a.m. —about 12 hours. I think that that is ample time to fulfil the undertaking I gave, when I said yesterday that there would be time. At any rate, I did not envisage at the time that the debate would actually go on so long, so I was, in fact, speaking in absolutely good faith.

Mr. H. Wilson

If my hon. Friend will permit me to interrupt him for a moment, so that the Chancellor shall not further mislead the Committee about what happened, I will interpolate the exact words which the Chancellor used last night when he suggested that we should foreshorten the debate on the 25 per cent. range of Purchase Tax. They were: As I said before, hon. Members will have another opportunity of raising all the points that they desire to raise to their hearts' content, and representing their constituents' point of view. He used the phrase, "to their hearts' content," and not to the Patronage Secretary's heart's content. He then went on: I therefore think that it would be reasonable to give hon. Members an opportunity to get home at a reasonable hour tonight, having come to a decision on this Amendment, leaving the whole of the rest of the debate to another occasion. The Chancellor used the words, "the whole of the debate," and not about a quarter of it.

Mr. Swingler

I am such obliged to my right hon. Friend for that intervention, which puts the matter on the record quite clearly.

I do not know why the Leader of the House should treat this so frivolously. It is a question whether the Chancellor deliberately misled the Committee last night. I say, and it is clear on the record that the Chancellor last night was suggesting that the discussion should be adjourned because he was in favour of ample opportunity for discussion of the general issues on Purchase Tax in Clause 1. The Chancellor cannot deny that in the discussion of this Bill the most important part of it is obviously the debate on Clause 1. I hope that he is not going to deny that. It is obvious that the general discussion of this Bill in Committee would be on Purchase Tax and its rates. The Chancellor has said that in his opinion there was ample opportunity for discussion of that in a couple of hours. That is his interpretation tonight.

Mr. Butler

The statement was made in good faith last night. I could only give my assurance to the Committee that there would be opportunities on the rates, and in each of the debates which we have had, and which have lasted 12 hours—from 3.30 p.m., to 3.30 a.m.—and also in the general debate on the Clause. I think that almost every hon. Member had an opportunity to put his case. If not, there will still be ample opportunities during the discussion of these Amendments.

Mr. Swingler

The Chancellor may think what he likes, but it happens to be a fact that when he moved the Closure hon. Members on both sides of the Committee wanted to speak on Clause 1, and that he stopped them. He went back on his promise of an ample opportunity which he gave last night, and deliberately gagged hon. Members. The undertaking which he gave last night has not been carried out. Therefore, hon. Members on this side are not able to accept from him now the assurance that there will be ample opportunity for discussion of the Schedules.

Will the right hon. Gentleman give us now an undertaking that the Closure will not be moved on Amendments to the Schedule? In view of what has happened I think that we are entitled to have an answer to that question. We are told that there will be ample opportunity for a general discussion on Purchase Tax but we have a Closure, and the Chancellor explains that what he meant by that opportunity was a couple of hours. Now the Chancellor gets up in this discussion and says, "Oh, well, hon. Members will be able to intervene in debates on Amendments to the Schedule." Can we have an undertaking from the Government—and an undertaking which will this time be fufilled—that there will be no Closure moved on Amendments to the Schedule, so that we can have ample opportunity for discussion?

4.30 a.m.

It is quite clear that this arises not merely from the Chancellor's bad faith, but also from the cowardice of his supporters. We have been quite clearly placed in this situation because hon. Members opposite have felt that these proposals of the Chancellor's were so politically unpopular in the country that they dare not get up and support them. That is the real reason why the Patronage Secretary moved the Closure, to prevent any more hon. Members opposite from standing up and washing their hands Pilate-like, leaving the Chancellor the sole proposer of these Purchase Tax measures. That was why they had to move the Closure, and why the Chancellor had to break faith with the Committee.

Why should we on this side be gagged and prevented from democratic discussion because of the failure of the party opposite to be able to control their supporters? That is the position—a position which we may see again on discussions to come on this Finance Bill, because no doubt there will be more like the noble Lord the Member for Dorset. South (Viscount Hinchingbrooke), who will enter disclaimers—in speeches in Committee, not, of course, in the Lobbies. [HON. MEMBERS: "He did."] I am very glad to hear it. No doubt there will be other hon. Members opposite who will rise in future to oppose the Chancellor on this or that unpopular measure, so that once again the Chancellor and the Patronage Secretary will be tempted to go back on their undertaking and closure their own side, gag their own supporters from expressing their criticism.

I hope that the Committee will agree to report Progress so that time may be given to considering this whole situation, to reviewing the undertaking given by the Chancellor and what has, in fact, been done by the Patronage Secretary, so that time may be given for further discussion, with assurances which can be accepted by hon. Members about the future discussion of this Bill, so that we may have ample opportunity for the democratic expression of the opinions of the people on the penal measures being brought forward by the Chancellor.

Mr. Gordon Walker

The right hon. Gentleman must realise that he has left us with a deep sense of grievance and resentment. We feel we have been defrauded, first of all because he tells us that a certain amount of time has been spent on this debate, whereas a very large part of that time, amounting probably to nearly half, has been taken up by his supporters—or, at any rate, those who normally support him. The other reason why I and many of my hon. Friends feel we have been defrauded is because the Chancellor now argues, to sustain his case, that he has kept good faith, that we can bring up on the Schedule all the matters which he promised us we would be able to bring up.

Now, that is not true. There is the question of textiles, and so forth, which cannot now be brought up because the Closure has been moved, although the Chancellor gave an absolutely explicit undertaking that all these constituency matters could be brought up. He now pretends that they can be brought up on the Schedule. They cannot be brought up on the Schedule. A very important firm in my constituency makes power-assisted bicycles. Its case cannot be raised on the Schedules. I came to the debate this evening confident in my trust in what the Chancellor had said and that I would be able to raise that matter. I can only tell the firm that I could not raise it because the Chancellor did not keep faith with us.

Mr. Ronald Williams (Wigan)

I really find it very difficult to believe that the Chancellor has been vigilant in putting the point he has put to the Committee on this Motion. It is one of the most breathtaking and amazing statements I have heard for several years in this House. Whatever qualifications the Chancellor may now make concerning the effect of what he said, it is within the recollection of the Committee that when he was talking about the debate on the Question. "That the Clause, as amended, stand part of the Bill" he said he had in mind a period of two hours.

I am aware that since making that statement the Chancellor has said he also had in mind that there would be debates on other related points. But on the general debate on the Clause there arises one of the most important debates on this Bill. That the Chancellor would agree, I am sure. What does a two-hour debate mean against that background? Surely it means that we must assume there will be at least three Front Bench speeches, if not four, and it would not be unreasonable to say that each one would take 15 minutes. I should have thought that quite a conservative estimate. Therefore, the Chancellor must have known that at least an hour would be taken by the two Front Benches. For all the back benchers there would be sixty minutes left in the whole debate in which hon. Members could air grievances of their constituents.

In a debate of that kind—[Interruption.] If the hon. Member desires to interrupt, perhaps he will respect the conventions and rules of order and get up and make an interruption. If he is too tired to do so, perhaps he will keep quiet. I appreciate that the hon. Member is obviously very fatigued. He has been in the Chamber a long time and perhaps I mistook what he had to say for an intervention. It might have been that he was rousing himself from a somnolent position. If so, I can quite understand that.

Mr. F. Harris

I have been in this Committee from the start. My comment was not to the hon. Member, but to someone else.

Mr. Williams

I accept the observation of the hon. Member without any question. He is a fair-minded person and I am sure he would be the first to recognise that when one hears something from the other side of the Committee and sees that an hon. Member is apparently interested in what one is saying, one is justified in thinking that an intervention is being made.

When the Chancellor had in mind a debate of two hours, he must have had in mind that back benchers would have only 60 minutes in which to air all the grievances of their constituents. In my constituency the most shocking effects are already being felt as a consequence of the Chancellor's Budget, but I have had no opportunity to put this to the Committee and now I shall have no opportunity at all. What opportunities had anybody?

We may assume that, in a debate of the importance of this one, it is not an unreasonably long period to devote 15 minutes to a speech from the back benches. That being so, the Chancellor's statement amounts to the fact that, hon. Members being called alternately from either side of the committee as has been faking place, there would be two speeches from the back benches on either side.

The Chancellor has the audacity to tell the Committee that he had that in mind. It should go on the record that on such an important matter as this the Chancellor thought he was being generous in letting the Committee have a free run in the debate to the extent of two speeches from the back benches on the Government side of the Committee and two speeches from the Opposition back benches.

If the Chancellor bears in mind the significance of what I have just been saying, he will realize that from the very beginning he had in mind the idea that the debate was to be very seriously curtailed, but under pressure, chiefly from his own side, of numbers of speeches harshly critical of his proposals, he had to retreat from the position of allowing two speeches from the back benches on either side. How upset he must have been about that! At last he got so upset that he had to call for the aid of the patronage secretary.

This is a shocking state of affairs. I can hardly believe that the Chancellor. When he considers what he has asked us to accept, can regard his proposal as anything but most unreasonable and unfair to the Committee. In the course of the years that I have been in the House. I have never come across a case where a Chancellor has put forward a proposal which, justifiably, has caused such bitter resentment on the part of the committee.

If there had been a substantial debate for, say, the equivalent of three hours, there might have been something in his proposal, but there was nothing like that

period. For this state of affairs there is only one man in the Chamber to blame, and that is the Chancellor.

I hope my right hon. Friend the Member for south Shields (Mr. Ede) id wrong in his estimate of the subsequent debates. But I have grave misgivings; I think he is right. I believe that on this occasion the Chancellor has gone too far. He has insensed hon. Members, who rarely take part in debates of this sort. It is no good hon. Members opposite pretending that is not a point of substance. Had some hon. Members opposite been present during the debate, as I have been present, they would have seen large numbers of their hon. Friends rise, but hon. Members opposite have also been gagged.

4.45 a.m.

The Chancellor has come out of this very badly. If we find a new note creeping into our debates now, he will bear a full measure of responsibility for it. Daring to come here after having taken a step which has restricted the debate so badly, and pretending that he was dong something generous, he expressed himself in the most sickening and unctuous way I have ever heard. No expression of insult could have been more provocative. Then, in the course of his observations, he went even further and virtually snarled as he coined the phrase, "The Government must govern." What strange words, coming from this most urbane, sportsmanlike and fair-minded gentleman, who, in this Committee, has tarnished his record perhaps beyond any hope of its ever being cleansed.

Mr. Buchan-Hepburn rose in his place and claimed to move, That the Question be now put:—

Question put, That the Question be now put:—

The Committee divided: Ayes 190, Noes 145.

Division No. 49.] AYES [4.45 a.m.
Agnew, Cmdr. P. G. Barlow, Sir John Brooman-White, R. C.
Aitken, W. T. Barter, John Bryan, P.
Allan, R. A. (Paddington, S.) Baxter, Sir Beverley Buchan-Hepburn, Rt. Hon. P. G. T.
Amery, Julian (Preston, N,) Beattie, C. Burden, F. F. A.
Arbuthnot, John Bevins, J. R. (Toxteth) Butler, Rt.Hn.R. A. (Saffron Walden)
Armstrong, C. W. Bidgood, J. C. Chichester-Clark, R.
Ashton, H. Biggs-Davison, J. A. Clarke, Brig. Terence (Portsmouth, W.)
Atkins, H. E. Birch, Rt. Hon. Nigel Cole, Norman
Baldock, Lt.-Cmdr. J. M. Bishop, F. P. Conant, Maj. Sir Roger
Baldwin, A. E. Body, R. F. Cooper-Key, E. M.
Balniel, Lord Boyle, Sir Edward Cordeaux, Lt.-Cot. J. K.
Banks, Col. C. Braine, B. R. Corfield, Capt. F. V.
Barber, Anthony Brooke, Rt. Hon. Henry Craddock, Beresford (Spelthorne)
Crookshank, Capt. Rt. Hn. H. F. C. Hurd, A. R. Pickthorn, K. W. M.
Crosthwaite-Eyre, Col. O. E. Hutchison, James (Scotstoun) Pitt, Miss E. M.
Crouch, R. F. Hylton-Foster, Sir H. B. H. Pott, H. P.
Cunningham, Knox Iremonger, T. L. Powell, J. Enoch
Dance, J. C. G. Irvine, Bryant Godman (Rye) Price, David (Eastleigh)
Davidson, Viscountess Jenkins, Robert (Dulwich) Prior-Palmer, Brig. O. L.
D'Avigdor-Goldsmid, Sir Henry Jennings, J. C. (Burton) Raikes, Sir Victor
Dodds-Parker, A. D. Johnson, Dr. Donald (Carlisle) Ramsden, J. E.
Donaldson, Cmdr. C. E. McA. Johnson, Eric (Blackley) Redmayne, M.
Drayson, G. B. Kaberry, D. Remnant, Hon. P.
Eden, J. B. (Bournemouth, West) Keegan, D. Ridsdale, J. E.
Emmet, Hon. Mrs. Evelyn Kerr, H. W. Roberts, Peter (Heeley)
Errington, Sir Eric Kershaw, J. A. Robinson, Sir Roland (Blackpool, S.)
Erroll, F. J. Kirk, P. M. Rodgers, John (Sevenoaks)
Farey-Jones, F. W. Ropner, Col. Sir Leonard
Fell, A. Lagden, G. W. Russell, R. S.
Finlay, Graeme Lambert, Hon. G. Schofield, Lt.-Col. W.
Fisher, Nigel Leavey, J. A. Scott-Miller, Cmdr. R.
Fleetwood-Hesketh, R. F. Legge-Bourke, Maj. E. A. H. Shepherd, William
Fletcher-Cooke, C. Legh, Hon. Peter (Petersfield) Smithers, Peter (Winchester)
Fraser, Hon. Hugh (Stone) Lindsay, Hon. James (Devon, N.) Stevens, Geoffrey
Freeth, D. K. Lindsay, Martin (Solihull) Steward, Harold (Stockport, S.)
Galbraith, Hon. T, G. D. Longden, Gilbert Steward, Sir William (Woolwich, W.)
Garner-Evans, E. H. Lucas, P. B. (Brentford & Chiswick) Stewart, Henderson (Fife, E.)
George, J. C. (Pollok) Lucas-Tooth, Sir Hugh Summers, G. S. (Aylesbury)
Glover, D. Mackie, J. H. (Galloway) Sumner, W. D. M. (Orpington)
Godber, J. B. Maclay, Rt. Hon. John Taylor, William (Bradford, N.)
Graham, Sir Fergus Macmillan, Maurice (Halifax) Thomas, Rt. Hn. J. P. L. (Hereford)
Grant, W. (Woodside) Macpherson, Niall (Dumfries) Thomas, Leslie (Canterbury)
Grant-Ferris, Wg. Cdr. R.(Nantwich) Maddan, Martin Thornton-Kemsley, C. N.
Green, A. Maitland, Cdr. J. F. W. (Horncastle) Tilney, John (Wavertree)
Grimston, Sir Robert (Westbury) Maitland, Hon. Patrick (Lanark) Touche, Sir Gordon
Harris, Frederic (Croydon, N.W.) Markham, Major Sir Frank Turton, Rt. Hon. R. H.
Harrison, A. B. C. (Maldon) Marlowe, A. A. H. Vickers, Miss J. H.
Harrison, Col. J. H. (Eye) Marples, A. E. Vosper, D. F.
Harvey, Air Cdre. A. V. (Macclesfd) Marshall, Douglas Wakefield, Edward (Derbyshire, W.)
Harvey, Ian (Harrow, E.) Mathew, R. Walker-Smith, D. C.
Harvey, John (Walthamstow, E.) Maudling, Rt. Hon. R. Wall, Major Patrick
Heald, Rt. Hon. Sir Lionel Mawby, R, L. Ward, Dame Irene (Tynemouth)
Heath, Edward Maydon, Lt.-Comdr. S. L. C. Waterhouse, Capt. Rt. Hon. C.
Hill, Mrs. E. (Wythenshawe) Mott-Radclyffe, C. E. Webbe, Sir H.
Hinchingbrooke, Viscount Nabarro, G. D. N. Whitelaw, W.S.I.(Penrith & Border)
Hirst, Geoffrey Nairn, D. L. S. Williams, Gerald (Tonbrdge)
Holland-Martin, C. J. Neave, Airey Williams, Paul (Sunderland, S.)
Hope, Lord John Nicholson, Godfrey (Farnham) Williams, R. Dudley (Exeter)
Hopkinson, Rt. Hon. Henry Nicolson, N. (B'n'm'th, E. & Chr'ch) Wills, G. (Bridgwater)
Horobin, Sir Ian Nield, Basil (Chester) Wilson, Geoffrey (Truro)
Howard, Gerald (Cambridgeshire) Nugent, G. R. H. Yates, William (The Wrekin)
Howard, Hon. Greville (St. Ives) Oakshott, H. D.
Howard, John (Test) O'Neill, Hn. Phelim (Co. Antrim, N.) TELLERS FOR THE AYES:
Hudson, W. R. A. (Hull, N.) Orr, Capt. L. P. S. Mr. Studholme and
Hulbert, Sir Norman Page, R. G.. Mr. Richard Thompson.
NOES
Ainsley, J. W. Dalton, Rt. Hon. H. Howell, Denis (All Saints)
Albu, A. H. Davies, Harold (Leek) Hoy, J. H.
Allaun, F. (Salford, E.) Deer, G. Hughes, Emrys (S. Ayrshire)
Anderson, Frank Delargy, H. J. Hunter, A. E.
Awbery, S. S. Dodds, N. N. Hynd, H. (Accrington)
Bacon, Miss Alice Donnelly, D. L. Irving, S. (Dartford)
Benn, Hn. Wedgwood (Bristol. S.E.) Ede, Rt. Hon. J. C. Jeger, Mrs. Lena(Holbn & St.Pncs.S.)
Benson, G. Edwards, Rt. Hon. John (Brighouse) Jenkins, Roy (Stechford)
Blackburn, F. Edwards, Robert (Bilston) Johnson, James (Rugby)
Blyton, W. R. Edwards, W. J. (Stepney) Jones, J. Idwal (Wrexham)
Boardman, H. Evans, Albert (Islington, S.W.) Jones, T. W. (Merioneth)
Bottomley, Rt. Hon. A. G. Fernyhough, E. Kenyon, C.
Bowden, H. W. (Leicester, S. W.) Fienburgh, W. King, Dr. H. M.
Boyd, T. C. Fletcher, Eric Lawson, G. M.
Braddock, Mrs, Elizabeth Fraser, Thomas (Hamilton) Lee, Frederick (Newton)
Brockway, A. F. Gaitskell, Rt. Hon. H. T. N. Lever, Harold (Cheetham)
Broughton, Dr. A. D. D. Gibson, C. W. Lever, Leslie (Ardwick)
Brown, Rt. Hon. George (Belper) Gordon Walker, Rt. Hon. P. C. Lewis, Arthur
Burton, Miss F. E. Greenwood, Anthony Lipton, Lt.-Col. M.
Butler, Herbert (Hackney, C.) Grey, C. F. MacColl, J. E.
Butler, Mrs. Joyce (Wood Green) Griffiths, David (Rother Valley) Mahon, S.
Champion, A. J. Hale, Leslie Mallalieu, J. P. W. (Huddersfd, E.)
Chapman, W. D. Hamilton, W. W. Mann, Mrs. Jean
Chetwynd, G. R. Hannan, W. Marquand, Rt. Hon. H. A.
Coldrick, W. Hayman, F. H. Mason, Roy
Collins, V. J. (Shoredltch&Finsbury) Healey, Denis Mayhew, C. P.
Corbet, Mrs. Freda Herbison, Miss M. Mellish, R, J.
Craddock, George (Bradford, S.) Hobson, C. R. Mikardo, Ian
Cronin, J. D. Holman, P. Monslow, W.
Moody, A. S. Rogers, George (Kensington, N.) Tomney, F.
Moss, R. Ross, William Warbey, W. N.
Mulley, F. W. Silverman, Julius (Aston) Wells, Percy (Faversham)
Noel-Baker, Francis (Swindon) Silverman, Sydney (Nelson) West, D. G.
Orbach, M. Simmons, C. J. (Brierley Hill) Wheeldon, W. E.
Oswald, T. Skeffington, A. M. White, Mrs. Eirene (E. Flint)
Owen, W. J. Slater, Mrs. H. (Stoke, N.) White, Henry (Derbyshire, N.E.)
Palmer, A. M. F. Slater, J, (Sedgefield) Wilkins, W. A.
Pargiter, G. A. Smith, Ellis (Stoke, S.) Willey, Frederick
Parkin, B. T. Sorensen, R. W. Williams, Ronald (Wigan)
Pearson, A. Sparks, J. A. Williams, W. R. (Openshaw)
Peart, T. F. Steele, T. Williams, W. T. (Barons Court)
Plummer, Sir Leslie Stewart, Michael (Fulham) Willie, E. G. (Edinburgh, E.)
Popplewell, E. Strachey, Rt. Hon. J. Wilson, Rt. Hon. Harold (Huyton)
Price, J. T. (Westhoughton) Stross,Dr.Barnett(Stoke-on-Trent,C.) Winterbottom, Richard
Price, Philips (Gloucestershire, W.) Swingler, S. T. Yates, V. (Ladywood)
Probert, A. R. Sylvester, G. O. Younger, Rt. Hon. K.
Proctor, W. T. Taylor, John (West Lothian)
Rankin, John Thomas, George (Cardiff) TELLERS FOR THE NOES:
Rhodes, H. Thomson, George (Dundee, E.) Mr. Holmes and Mr. Short.
Robinson, Kenneth (St, Pancras, N.) Thornton, E.

Question put accordingly, That the Chairman do report progress and ask leave to sit again:—

The Committee divided: Ayes 145, Noes 190.

Division No. 50.] AYES [4.53 a.m.
Ainsley, J. W. Hamilton, W. W. Price, Philips (Gloucestershire, W.)
Albu, A. H. Hannan, W. Probert, A. R.
Allaun, F. (Salford, E.) Hayman, F. H. Proctor, W. T.
Awbery, S. S. Healey, Denis Rankin, John
Bacon, Miss Alice Herbison, Miss M. Rhodes, H.
Benn, Hn. Wedgwood (Bristol, S.E.) Hobson, C. R. Robinson, Kenneth (St. Pancras, N.)
Benson, G. Holman, P. Rogers, George (Kensington, N.)
Blackburn, F. Holmes, Horace Ross, William
Blyton, W. R. Howell, Denis (All Saints) Short, E. W.
Boardman, H. Hoy, J. H. Silverman, Julius (Aston)
Bottomley, Rt. Hon. A. G. Hughes, Emrys (S. Ayrshire) Silverman, Sydney (Nelson)
Bowden, H. W. (Leicester, S.W.) Hunter, A. E. Simmons, C. J. (Brierley Hill)
Boyd, T. C. Hynd, H. (Accrington) Skeffington, A. M.
Braddock, Mrs. Elizabeth Irving, S. (Dartford) Slater, Mrs. H. (Stoke, N.)
Brockway, A. F. Jeger, Mrs.Lena(Holbn & St.Pncs,S.) Slater, J. (Sedgefield)
Broughton, Dr. A. D. D. Jenkins, Roy (Stechford) Smith, Ellis (Stoke, S.)
Brown, Rt. Hon. George (Belper) Johnson, James (Rugby) Sorensen, R. W.
Burton, Miss F. E. Jones, J. Idwal (Wrexham) Sparks, J. A.
Butler, Herbert (Hackney, C.) Jones, T. W. (Merioneth) Steele, T.
Butler, Mrs. Joyce (Wood Green) Kenyon, C. Stewart, Michael (Fulham)
Champion, A. J. King, Dr. H. M. Strachey, Rt. Hon. J.
Chapman, W. D, Lawson, G. M. Stross,Dr.Barnett(Stoke-on-Trent,C.
Chetwynd, G. R. Lee, Frederick (Newton) Swingler, S. T.
Coldrick, W. Lever, Harold (Cheetham) Sylvester, G. O.
Collins, V. J. (Shoreditch&Finsbury) Lever, Leslie (Ardwick) Taylor, John (West Lothian)
Corbet, Mrs. Freda Lewis, Arthur Thomas, George (Cardiff)
Craddock, George (Bradford, S.) Lipton, Lt.-Col. M. Thomson, George (Dundee, E.)
Cronin, J. D. MacColl, J. E. Thornton, E.
Dalton, Rt. Hon. H. Mahon, S. Tomney, F.
Davies, Harold (Leek) Mallalieu, J. P. W. (Huddersfd, E.)
Deer, G. Mann, Mrs. Jean Warbey, W. N.
Delargy, H. J. Marquand, Rt. Hon. H. A. Wells, Percy (Faversham)
Dodds, N. N. Mason, Roy West, D. G.
Donnelly, D. L. Mayhew, C. P. Wheeldon, W. E.
Ede, Rt. Hon. J. C. Mellish, R. J. White, Mrs. Eirene (E. Flint)
Edwards. Rt. Hon. John (Brighouse) Mikardo, Ian White, Henry (Derbyshire, N.E.)
Edwards, Robert (Bilston) Monslow, W. Wilkins, W. A.
Edwards, W. J. (Stepney) Moody, A. S. Willey, Frederick
Evans, Albert (Islington, S.W.) Moss, R. Williams, Ronald (Wigan)
Fernyhough, E. Mulley, F. W. Williams, W. R. (Openshaw)
Fienburgh, W. Noel-Baker, Francis (Swindon) Williams, W. T. (Barons Court)
Fletcher, Eric Orbach, M. Willis, E. G. (Edinburh, E.)
Fraser, Thomas (Hamilton) Oswald, T. Wilson, Rt. Hon. Harold (Huyton)
Gaitskell, Rt Hon. H. T. N. Owen, W. J. Winterbottom, Richard
Gibson, C. W. Palmer, A. M. F. Yates, V. (Ladywood)
Gordon Walker, Rt. Hon. P. C. Pargiter, G. A. Younger, Rt. Hon. K.
Greenwood, Anthony Parkin, B. T.
Grey, C. F. Peart, T. F. TELLERS FOR THE AYES:
Griffiths, David (Rother Valley) Plummer, Sir Leslie Mr. Pearson and Mr. J. T. Price.
Hale, Leslie Popplewell, E.
NOES
Agnew, Cmdr, P. G. Graham, Sir Fergus Nabarro, G. D. N.
Aitken, W. T. Grant, W. (Woodside) Nairn, D. L. S.
Allan, R. A. (Paddington, S.) Grant-Ferris, Wg.Cdr. R. (Nantwich) Neave, Airey
Amery, Julian (Preston, N.) Green, A. Nicholson, Godfrey (Farnham)
Arbuthnot, John Grimston, Sir Robert (Westbury) Nicolson, N. (B'n'm'th, E. & Chr'c'h
Armstrong, C. W. Harris, Frederic (Croydon, N.W.) Nield, Basil (Chester)
Ashton, H. Harrison, A. B. C. (Maldon) Nugent, G. R. H.
Atkins, H. E. Harrison, Col. J. H. (Eye) Oakshott, H. D.
Baldock, Lt.-Cmdr. J. M. Harvey, Air Cdre. A. V. (Macclesfd) O'Neill, Hn. Phelim (Co. Antrim, N.)
Baldwin, A. E. Harvey, Ian (Harrow, E.) Orr, Capt. L. P. S.
Balniel, Lord Harvey, John (Walthamstow, E.) Page, R. G.
Banks, Col. C. Heald, Rt. Hon. Sir Lionel Pickthorn, K. W. M.
Barber, Anthony Heath, Edward Pitt, Miss E. M.
Barlow, Sir John Hill, Mrs. E. (Wythenshawe) Pott, H. P.
Barter, John Hinchingbrooke, Viscount Powell, J. Enoch
Baxter, Sir Beverley Hirst, Geoffrey Price, David (Eastleigh)
Beattie, C. Holland-Martin, C. J. Prior-Palmer, Brig. O. L.
Bevins, J. R. (Toxteth) Hope, Lord John Raikes, Sir Victor
Bidgood, J. C. Hopkinson, Rt. Hon. Henry Ramsden, J. E.
Biggs-Davison, J. A. Horobin, Sir Ian Remnant, Hon. P.
Birch, Rt. Hon. Nigel Howard, Gerald (Cambridgeshire) Ridsdale, J. E.
Bishop, F. P. Howard, Hon. Greville (St. Ives) Roberts, Peter (Heeley)
Body, R. F. Howard, John (Test) Robinson, Sir Roland (Blackpool, S.)
Boyle, Sir Edward Hudson, W. R. A. (Hull, N.) Rodgers, John (Sevenoaks)
Braine, B. R. Hulbert, Sir Norman Ropner, Col. Sir Leonard
Brooke, Rt. Hon. Henry Hurd, A. R. Russell, R. S.
Brooman-White, R. C. Hutchison, James (Scotstoun) Schofield, Lt.-Col. W.
Bryan, P. Hylton-Foster, Sir H. B. H. Scott-Miller, Cmdr. R.
Buchan-Hepburn, Rt. Hon. P. G. T. Iremonger, T. L. Shepherd, William
Burden, F. F. A, Irvine, Bryant Godman (Rye) Smithers, Peter (Winchester)
Butler, Rt.Hn.R.A. (Saffron Walden) Jenkins, Robert (Dulwich) Stevens, Geoffrey
Chichester-Clark, R. Jennings, J. C. (Burton) Steward, Harold (Stockport, S.)
Clarke, Brig. Terence (Portsmth, W.) Johnson, Dr. Donald (Carlisle) Steward, Sir William (Woolwich,W.)
Cole, Norman Johnson, Eric (Blackley) Stewart, Henderson (Fife, E.)
Conant, Maj. Sir Roger Kaberry, D. Studholme, H. G.
Cooper-Key, E. M. Keegan, D. Summers, G. S. (Aylesbury)
Cordeaux, Lt.-Col. J. K. Kerr, H. W. Sumner, W, D. M. (Orpington)
Corfield, Capt. F. V. Kershaw, J. A. Taylor, William (Bradford, N.)
Craddock, Beresford (Spelthorne) Kirk, P. M. Thomas, Rt. Hn. J. P. L. (Hereford)
Crookshank, Capt. Rt. Hn. H. F. C. Lagden, G. W. Thomas, Leslie (Canterbury)
Crosthwaite-Eyre, Col. O. E. Lambert, Hon. G. Thompson, Lt.-Cdr.R.(Croydon, S.)
Crouch, R. F. Leavey, J. A. Thornton-Kemsley, C. N.
Cunningham, Knox Legge-Bourke, Maj. E. A. H. Tilney, John (Wavertree)
Dance, J. C. G. Legh, Hon. Peter (Petersfield) Touche, Sir Gordon
Davidson, Viscountess Lindsay, Hon. James (Devon, N.) Turton, Rt. Hon, R. H.
D'Avigdor-Goldsmid, Sir Henry Lindsay, Martin (Solihull) Vickers, Miss J. H.
Dodds-Parker, A. D. Longden, Gilbert Vosper, D. F.
Donaldson, Cmdr. C. E. McA. Lucas, P. B. (Brentford & Chiswick) Wakefield, Edward (Derbyshire, W.)
Drayson, G. B. Lucas-Tooth, Sir Hugh Walker-Smith, D. C.
Eden, J. B. (Bournemouth, West) Mackie, J. H. (Galloway) Wall, Major Patrick
Emmet, Hon. Mrs. Evelyn Maclay, Rt. Hon. John Ward, Dame Irene (Tynemouth)
Errington, Sir Erie Macmillan, Maurice (Halifax) Waterhouse, Capt. Rt. Hon. C.
Erroll, F. J. Macpherson, Niall (Dumfries) Webbe, Sir H.
Farey-Jones. F. W. Maddan, Martin Whitelaw, W.S.I.(Penrith & Border)
Fell, A. Maltland, Cdr. J. F. W. (Horncastle) Williams, Gerald (Tonbridge)
Finlay, Graeme Maltland, Hon. Patrick (Lanark) Williams, Paul (Sunderland, S.)
Fisher Nigel Markham, Major Sir Frank Williams, R. Dudley (Exeter)
Fleetwood-Hesketh, R. F. Marlowe, A. A. H. Wills, G. (Bridgwater)
Fletcher-Cooke, C. Marples, A. E. Wilson, Geoffrey (Truro)
Fraser, Hon. Hugh (Stone) Marshall, Douglas Yates, William (The Wrekin)
Freeth, D. K. Mathew, R.
Galbraith, Hon. T. G. D. Maudling, Rt. Hon. R. TELLERS FOR THE NOES:
Garner-Evans, E. H. Mawby, R. L. Mr. Redmayne and Mr. Godber
George, J. C. (Pollok) Maydon, Lt.-Comdr, S. L. C.
Glover D. Mott-Radclyffe, C. E.
Mr. R. A. Butler

I beg to move, That Clauses 2,3,4 and 5 and any new Clauses be postponed until after the First Schedule.

The object of this Motion is to continue the debate on the Purchase Tax and to enable us to carry on with the same subject by moving up the Schedule concerned with Purchase Tam to follow immediately upon the discussion which we have just had. I should explain that, as perhaps some small sign of redemption, I should be ready to accept the Amendment in the name of the hon. and learned Member for Kettering (Mr. Mitchison) to leave the new Clauses out of the Motion if it were to be moved.

Mr. E. Fletcher

I beg to move, as an amendment, to leave out "and any new Clauses".

In moving the Amendment I am afraid it will be necessary to make a few observations about the Chancellor's Motion. We are now in this position. In other circumstances it might well have been that my hon. Friends would have been disposed to accept the Motion which the Chancellor has moved as a matter of procedure, but in the circumstances in which we find ourselves at this hour of the morning we must consider the matter on its merits. The first question is whether it would be reasonable to postpone consideration of these Clauses until we come to the Schedule.

The Chairman

I have called the hon. Member to move the Amendment to the Motion. It concerns only the new Clauses. Is that what he is doing?

Mr. Fletcher

Yes, Sir Charles.

Mr. R. E. Winterbottom (Sheffield, Brightside)

On a point of order, Sir Charles. The Chancellor has made only a suggestion to the Committee. It has not yet been accepted by the Committee and, therefore, I submit that my hon. Friend the Member for Islington, East (Mr. E. Fletcher) is quite right in advancing his argument.

The Chairman

Strangely enough, I do not think that the hon. Member for Islington, East (Mr. E. Fletcher) is quite right. The position is that the Chancellor has moved a Motion to postpone certain Clauses and any new Clauses, since when I have called on the hon. Member for Islington, East to move the Amendment to the Motion. He tells me that that is what he is doing and, therefore, we want to get rid of the Amendment to the Motion before we get back to the question of Clauses 2, 3, 4 and 5.

Mr. Fletcher

It would be much more convenient to me and to the Committee if we adopted your suggestion, Sir Charles, and I confined my remarks to the Amendment, leaving consideration of the Motion, which, inevitably, must take a great deal of time, until a later occasion. I will address myself, with the indulgence of the Committee, to the effect if the Amendment were made. If the Amendment were to find favour with the Committee, the result would be that Clauses 2, 3, 4 and 5 would be postponed, but any new Clauses would not be postponed. In other words, the effect of the Amendment would be to postpone consideration of the rest of the Bill, other than the new Clauses. The Committee would then be able to go straight on to consideration of the new Clauses, then the Schedule and then come back to the remaining Clauses of the Bill. I should like to give a few reasons why that would be convenient.

Examination of the new Clauses on the Order Paper will show why I am anxious that consideration of them should not be postponed until after the Schedule. This raises a matter of some importance. I think it may come as a surprise to you, Sir Charles, that there are any new Clauses on the Order Paper at all, and the last thing that I should want to do is to anticipate in any way what may be your Ruling when you have to decide whether this new Clause, or any of them, shall be called. I think it better that the Committee should consider this matter on the hypothesis that some or all of the new Clauses may be called.

Therefore, what the Committee will have to consider as a matter of convenience is whether we should embark on a consideration of these new Clauses, and I have no doubt that the hon. Member for Wimbledon (Mr. Black) is ready to move the new Clause in his name—[HON. MEMBERS: "Where is he?"] If the hon. Member is not present, I have no doubt that he has deputed someone to move it for him. This is obviously a matter of the gravest concern to the hon. Member for Wimbledon and those who hold the same views as he does, and the sooner we can deal with the proposed Amendment to Section 7 of the Finance Act, 1894, the better.

Even if, by any chance, that new Clause were not to be called, there are two other most important new Clauses on the Order Paper. I hope the Chancellor will share my view that, as we have reached a rather acrimonious stage in our discussions on the Purchase Tax, it may well be in the interests of the Committee if an interval were to elapse before we went on to the Schedule in order that there might be time for reflection. It seemed to me that it might be advantageous to all concerned if, before resuming our discussions on the Purchase Tax we were to have, by way of diversion, a discussion about Section 7 of the Finance Act, 1894, which, as the Committee will observe, deals with a most important question. It says that Where expenses in the realisation of property have been incurred within twelve months after the death of the deceased and the Commissioners are satisfied that such expenses were incurred in order to realise the property at the best price obtainable in the open market they shall make an allowance from the value of the property of an amount equal to the amount of the expenses so incurred. A discussion on that new Clause, or indeed on any of the new Clauses, would seem to me a far more appropriate matter to engage the attention of the Committee at 5.15 a.m., and it would have the added advantage that it would enable the discussion on the Purchase Tax to be resumed at a later date.

There is a further reason why I would urge my hon. Friends, if they are persuaded by what I am saying, to support my argument about this Amendment. I was particularly struck by something which the Chancellor said a few moments ago when he was indicating the sort of progress that he thought we ought to make tonight. I had hoped to have had an opportunity of intervening at the time, but there were a number of other points of order. But I recollect distinctly what the Chancellor said. He made an observation to the effect that the next Purchase Tax Amendment which we should be discussing in the normal way would relate to cut glassware. I am sure that the right hon. Gentleman must have been under a complete misapprehension—

The Chairman

The Chancellor may have been, but I think the hon. Gentleman is also under a misapprehension. All we are now discussing is the Amendment to the Motion. That is perfectly clear.

5.15 a.m.

Mr. Fletcher

The only point which is at all relevant in this relatively short debate is whether we should proceed to discuss the new Clauses in the order in which the Chancellor suggests, or proceed to discuss something else.

In analysing the question of the relative advantages of the two alternatives, whether, on the one hand, we should proceed to discuss the new Clauses and the all-important question about the Finance Act of 1894, or whether, on the other, we should proceed to discuss the Purchase Tax, it must be relative to consider which particular aspect of the Schedule we should be discussing if the Amendment were not carried.

The Chairman

I understood the Chancellor to say that he was prepared to accept the Amendment.

Mr. Fletcher

I am not concerned, Sir Charles, with what the Chancellor said. I am addressing an argument to my hon. Friends on this side of the Committee and to hon. Members on the other side. Surely we have not arrived at the state in which the Chancellor can, by his ipse dixit, indicate—

Mr. S. Silverman

Might I remind my hon. Friend that for the greater part of the last eight hours hon. Members opposite have been explaining to the Committee that they were not willing to accept the Chancellor's advice, and the fact that the Chancellor is ready to accept something is no guarantee whatever that the other side of the Committee would accept it.

Mr. Fletcher

It goes much further than that. The intimation of the Chancellor that he was prepared to accept my Amendment makes it far more difficult for me to convince my hon. Friends. I hesitate to quote Timeo danaos dona ferentes even at this hour of the morning, but my task has become intensely more difficult by reason of the blessing which the Chancellor so unwittingly gave to it without any request from me.

I am doing my best to explain the relative advantages either of accepting the Amendment or of refusing it. I have no doubt that many hon. Members will wish to discuss it. All I can hope to do is to put the alternatives as simply as I can. It did seem to me that some hon. Members might think there would be some advantages in not postponing consideration of the new Clauses. It might be, if we came straight on to them, that we could deal with them in a relatively tranquil atmosphere. We have not heard them discussed; we do not know whether the Chancellor agrees; and we do not know which of them would be called or at what length they would be explained to the Committee.

I notice that there is one proposed new Clause in the name of the hon. Member for St. Marylebone (Sir W. Wakefield) and about two dozen other Conservative Members, which deals with the interesting and, no doubt, contentious, proposal that there should be relief from Profits Tax when profits are paid to employees. That opens up a vista of a most interesting debate. If this Motion had not appeared on the Order Paper and my hon. and learned Friend the Member for Kettering (Mr. Mitchison) had not thought it desirable to put down the Amendment—unfortunately, he could not be here to move it; that is why he asked me to do it—I imagine that a great many hon. Members on both sides of the Committee would have looked forward with keen anticipation to discussing that matter as a relatively pleasant interlude between our debates on Purchase Tax, which must inevitably be protracted over a period of weeks.

There cannot, in present circumstances, be any vital object in pressing on with the Purchase Tax discussions for a few hours, because we are now faced with a large number of Amendments dealing with Purchase Tax and with the inevitable necessity of having to spend several days on that subject. It therefore seems to me that we should leave the rest of the Purchase Tax Schedules in abeyance for a time and devote ourselves to these new Clauses.

All hon. Members who have studied the Order Paper will have noticed with some pleasure that there are new Clauses. I was particularly glad when I saw the Chancellor's Motion drawn in these terms, because some of my hon. Friends who have expressed a desire to put down new Clauses had been under the impression that the terms of the Money Resolution were so tightly drawn that there would be great difficulty in introducing new Clauses. Apparently, hon. Members opposite, who have no doubt taken advice about the matter, have come to the conclusion that new Clauses would be in order and it would also be apparent that the Chancellor has accepted that view, because, otherwise, he would not have drafted the Motion in this way.

That being so, now that we know by clear implication that new Clauses will be in order, I am sure that a great many of my hon. Friends will be most anxious to seize the opportunity for putting down new Clauses. There are many subjects which my hon. Friends representing con- stituency interests of one kind and another are anxious to urge and many Amendments and improvements can be made to this Finance Bill. I would not want to weary the Committee unduly. All I seek to do is to explain the matter as I see it and I hope that my hon. Friends, in forming a conclusion on this matter, will not be unduly disturbed by the fact that the Chancellor of the Exchequer indicated that he may have been disposed to accept the Amendment.

Mr. R. A. Butler

I wish simply to say formally, on behalf of the Government, that I will be ready to accept the Amendment. That is the position of the Government and I hope that we may now proceed with the business.

Mr. L. M. Lever (Manchester, Ardwick)

I am very pleased that I am able to speak on this all-important matter. I feel that the acceptance of the Amendment by the Chancellor, while it may be in order as it stands, is something which we should bear in mind in the light of the Motion moved by my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) "That the Chairman do report Progress and ask leave to sit again." I cannot understand whether the Chancellor's acceptance is to get this business out of the way so that the Committee cart conclude its labours for the night, and resume them on a future occasion.

This gives me an opportunity to say something which has been in my heart for quite a few hours. I am sure it will be re-echoed by our fellow citizens throughout the country. I feel that on an all-important Measure like the Finance Bill, to sit from 2.30 p.m. yesterday continuously until now does not give hon. Members a full opportunity to consider carefully, after due leisure, rest and relaxation, the implications of the Bill.

Do I understand that the Chancellor of the Exchequer's ready acceptance of the Amendment in the name of the hon. and learned Member for Kettering (Mr. Mitchison) means that he is going to show the same disposition towards other Amendments on Purchase Tax when we move them; and that we shall be able to present to the country a Finance Bill which is not going to impose the burden of Purchase Tax on old-age pensioners, and others who are of limited means?

I would ask that the Committee at this juncture should adjourn, and that we may have an opportunity of going carefully into what these new Clauses are, and—

The Chairman

Is the hon. Member moving to report Progress?

Mr. Lever

If, Sir Charles, I knew that my Motion to report Progress would be received with such a welcome as was the Amendment in the name of the hon. and learned Member for Kettering, I would be prepared to submit such a Motion in the interest of the proper conduct of the business of the Committee, upon which the eyes of the country are concentrated.

The Chairman

I must make clear that I would not accept a Motion to report Progress at this moment.

Mr. Lever

If you cannot accept it, Sir Charles, then the Chancellor of the Exchequer cannot. There would be no point in my moving it.

The Chairman

I would not put it from the Chair. I would not accept it.

Mr. Lever

May I just say that any proposed Motion I had in mind to report Progress would be as logical as to leave out Clauses 2, 3, 4, and 5, which follow Clause 1, and to proceed to with the Schedules. I feel that in proceeding with this business we ought to take the Bill Clause by Clause. It seems to me, as I think it will by common consent be seen by all hon. Members, that the procedure on this Bill is to go backwards instead of forwards.

5.30 a.m.

The Deputy-Chairman (Sir Rhys Hopkin Morris)

I must draw the hon. Member's attention to the fact that we are now dealing with an Amendment to the Chancellor's Motion.

Mr. Lever

This, I understand, is an Amendment to an Amendment.

The Deputy-Chairman

No. It is an Amendment to the Chancellor's Motion.

Mr. Lever

Then the Chancellor had to move an Amendment to his own Bill.

The Deputy-Chairman

We are not dealing with the Motion itself. We are dealing with an Amendment to the Motion.

Mr. Lever

I gather from the Chancellor that our Amendment has been accepted, but I think that there ought to be an expression of opinion of hon. Members on both sides, even from Liberal Members, on this matter. The consideration of the deferment of these Clauses—

The Deputy-Chairman

We are not dealing with the deferment of the Clauses. We are on the Amendment to the Motion.

Mr. Lever

I want to say how very pleased I am that the Chancellor has accepted this Amendment. It shows that he has again resumed the conciliatory attitude which he showed earlier, when we were considering rabbits skins in slippers.

Mr. Roy Jenkins

I am sorry that in the last few minutes the Committee should have approached this rather serious matter in a light-hearted way. I followed very closely what my hon. Friend the Member for Islington, East (Mr. E. Fletcher) said, because he always addresses very close-knit and compressed arguments, but I think that possibly he went too far in that direction tonight, because I, for one, found his arguments unconvincing. I am very unhappy indeed about this unholy alliance of the Chancellor and my hon. Friend. I do not think we ought to agree too loosely to this proposal contained in the Amendment moved by my hon. Friend and accepted so readily by the Chancellor.

After all, let us consider what we are doing. We are saying that we must take the proposed new Clauses now. We must now assume—which may not have been apparent to all of us earlier—that new Clauses will clearly be in order on this Bill, because I cannot imagine that the Chancellor, who was responsible for drawing up the Financial Resolution, with all that that involves, would have put down a Motion of this sort which, if new Clauses were not in order, would have been deliberately misleading to us, or that he would have intervened in our debate on the subject of my hon. Friend's Amendment without indicating that new Clauses would not, in fact, be in order. Therefore, I take it, we may assume that the Chancellor's reading of the Financial Resolution, which perhaps is quite different from that of some of my hon. Friends, is that the new Clauses would be in order. We are, therefore, considering the very important proposition of whether we change the order of the Bill from that in which we would have anticipated it.

While I certainly agree with my hon. Friend the Member for Islington, East up to the point that there would be a great deal to be said for having an interval before we went on with discussions on the Purchase Tax, which have got into a very unfortunate state because of the action of the Chancellor, I cannot accept the view that it would be still desirable to take these important new Clauses in the atmosphere which the Chancellor has imported into the Committee as a result of the Closure on Clause 1.

The first of the new Clauses is in the name of the hon. Member for Wimbledon (Mr. Black), whose interventions are always important, although on the last occasion on which I heard him he, to our interest and surprise, protested against the provision of licensed premises at airports. We have to remember that this is a proposal to amend the Finance Act of 1894—

The Deputy-Chairman

The hon. Member is now discussing the new Clause.

Mr. Jenkins

I believe, Sir Rhys, that you were not here in the earlier stages of this discussion and did not hear the speech of my hon. Friend the Member for Islington, East, which I thought unfortunate. I think you will agree that it would be unfortunate if we could not develop the proposition which is contained in this Amendment.

The Deputy-Chairman

One cannot anticipate the new Clause. One can only now deal with this Amendment.

Mr. Gaitskell

Further of that point of order. In the first place, you were not here, Sir Rhys, and, as my hon. Friend the Member for Stechford (Mr. Roy Jenkins) said, you did not hear the speech of my hon. Friend the Member for Islington, East (Mr. E. Fletcher), but he—I think perfectly properly—explained to the Committee exactly what would happen if the Amendment were accepted. What would happen does, of course, involve all the new Clauses because the Amendment proposes that we should proceed immediately to those new Clauses. My hon. Friend the Member for Islington, East then proceeded to discuss them. My hon. Friend the Member for Stechford happens to take a different view and I submit that he is in order in referring to the new Clauses. I do not see why not, because they are referred to in the Amendment.

Mr. R. Williams

In my submission, Sir Rhys, it is extremely dangerous just to take four words such as we have here, "and any new Clauses," and assume that one can have a debate as it were in vacuo simply referring to those particular words. I add this to the point of order put by my hon. Friend the Member for Leeds, South (Mr. Gaitskell). The term, "any now Clauses" is a very dangerous pitfall because of the stage we have reached in our debates.

I do this for the purpose of clarity since this point was probably obvious to your predecessor in the Chair, and perhaps I can link it up a little to indicate why it is so important. If those four words were passed in the form in which they appear and, having passed them, we had a discussion—as, in my submission, would be proper—we would be in the position of going on to a discussion, of what? Not exactly the new Clauses on the Order Paper, although we certainly go on to those. But, were they withdrawn, it would mean that although the whole Committee, including the Chancellor, would be under the impression that no further new Clauses—

The Deputy-Chairman

It is in order on the Amendment to discuss whether we go straight on to the new Clauses or whether or not the words should be included in the Motion, but to discuss the new Clauses themselves is not in order on the Motion.

Mr. Williams

I do not want to create confusion, Sir Rhys. I want you to be seized of the very important point that to proceed with the Bill without the Motion and without the Amendment means that our consideration follows a certain course and we discuss certain things in their order. By changing that order, we may be putting ourselves in the position that a new Clause cannot now be discussed although the Chancellor is prepared to discuss it.

Mr. Roy Jenkins

As a result of the helpful interventions by right hon. and hon. Friends, we have gone a long way towards clearing up the position. We are considering whether, in the atmosphere which the Chancellor has created in the Committee, it is better, or, perhaps, less bad, to consider the new Clauses or some more Purchase Tax Amendments. We ought to consider that objectively, mentioning the new Clauses although not discussing their substance. That is all I propose to do, following the powerful arguments of my hon. Friend the Member for Islington, East (Mr. E. Fletcher).

The first of the new Clauses is a matter of importance, not only because it bears the name of the hon. Member for Wimbledon (Mr. Black) but because it seeks to alter in an important provision a statute which has remained the law of this country for 61 years.

The Deputy-Chairman

That is really discussing the new Clause. [HON. MEMBERS: "No."] It appears to me to be discussing the new Clause. We have not reached the new Clauses. The Amendment is purely procedural.

Mr. Jenkins

I was in no way attempting to discuss the merits or substance of the new Clauses, Sir Rhys. I am merely attempting, under great difficulties, to deal with the matter in the way that my hon. Friend the Member for Islington, East, expressing an opposite point of view, dealt with it. However, if you say that we cannot proceed in that way, I will go no further.

All I would say is that the debate has served one useful purpose; and that is that the Chancellor has confirmed that it is his view, having drawn up the Financial Resolution, that the new Clauses are in order. There has been no contradiction of that.

Mr. R. A. Butler

I really must leave that to the Chair. I have never given a ruling on matters of that sort.

Mr. Jenkins

One would not, of course, dream of asking the Chancellor to usurp the functions of the Chair, although he earlier tried to usurp the functions of the Committee. However, we are entitled to assume that he has some view in mind. After all, whether or not the new Clause is in order is determined by the form of the Financial Resolution, and that was drawn up by the Chancellor. While he cannot tell us definitively what its effect is, he could tell us what its intention is. We are justified in assuming that if its intention was to exclude new Clauses, the Chancellor would neither have put down the Motion, which would have been very misleading had that been his view, nor allowed the debate to go on without correcting the unfortunate impression which has been created—

Mr. H. Lever

And wasting our time.

Mr. Jenkins

—and wasting our time. Circumscribed as we are by very difficult rules of order, I cannot do more than say that I listened with great interest to my hon. Friend the Member for Islington, East, but perhaps because he was putting his case in such a very compressed form, I was not entirely convinced by him. I am afraid that I can agree with neither the Chancellor nor my hon. Friend.

5.45 a.m.

Mr. William Ross (Kilmarnock)

This is a very important matter. I hope that I may be forgiven for intervening. In the 15 or 16 hours of this debate mine is only the fourth Scottish voice to be heard. The first was that the Chairman of Ways and Means, the second that of his colleague in the Chair, the hon. Member for Stirling and Falkirk Burghs (Mr. Malcolm MacPherson), and, I regret to say, the third was that of the Patronage Secretary, who does not exactly speak with the accent of the Gorbals. We have been waiting to put the views of our constituents upon the Purchase Tax.

The Chancellor is prepared to accept, this Amendment, but we should in this case look a gift horse in the mouth. Either the Chancellor has prior knowledge that the proposed new Clauses will not be called or his hon. Friend the Member for Wimbledon (Mr. Black) is not here and they are not likely to be moved. He therefore gives this appearance of generosity and of accepting something, without giving us anything at all.

We cannot judge the merits of the Chancellor's acceptance of the Amendment when we consider the time we should have to wait before the proposed new Clauses will be reached. I agree with my hon. Friend the Member for Stechford (Mr. Roy Jenkins) that it might be advisable to have an interval before discussing other items in the Bill. If we accept the Amendment that the Chancellor is prepared to accept, we shall be in order in discussing the proposed new Clauses. If not, we shall discuss the Amendments to the Schedule.

If we make no more progress in discussing the proposed new Clauses than we have so far made, they will take some little time. We have no idea how long this sitting will last, but I would remind the Committee that I have to be in the Scottish Standing Committee at 10.30 to deliver a speech. The probability is that I shall be here, getting once again a little of the "ample opportunity" which the Chancellor, helped by the Patronage Secretary, might afford on the Amendments to the Schedule. I have duties elsewhere, so I must consider carefully Whether we should accept the Amendment. I am not convinced that it is in the interests of my constituents and of my colleagues in the Scottish Standing Committee—71 of them—to do so. We must all appear at the Scottish Standing Committee.

The Deputy-Chairman

This does not arise on the Motion before the Committee.

Mr. Ross

It is vital. If we make the same rate of progress as we have been making, assisted by the Government Front Bench, and go on to discuss the proposed new Clauses, we shall find that they will take three or four hours.

Mr. Ede

Each.

Mr. Ross

If we had this kind of treatment from the Secretary of State for Scotland we should not make very much progress in the Scottish Grand Committee.

I am sorry for my hon. and learned Friend the Member for Kettering (Mr. Mitchison)—we usually defer to his judgment in these matters, and he sponsored the Amendment—but there has been a revolt against the Government by the back benchers opposite, and it has inevitably affected us. I therefore hope that my hon. Friend will consider this matter very carefully and bear in mind the invidious position in which he is placing Scottish Members. At 10.30 a.m. we shall have to consider whether we should stay here in order to have a chance of discussing Purchase Tax—and the first Amendment affects my constituents, as it deals with footwear.

The Deputy-Chairman

The hon. Member is now repeating his argument.

Mr. Ross

I am not repeating the argument, Sir Rhys, because this is the first time I have mentioned footwear. I am particularising the interest which the Amendment has for me and for my constituents. Having pointed out the position in which Scottish Members will be placed at 10.30 a.m., I hope that my hon. Friends will consider the situation very carefully.

Mr. H. Hynd

I am sorry that my hon. and learned Friend the Member for Kettering (Mr. Mitchison) is not here, because the Amendment was tabled in his name. I feel that if he had been here he would not have wished to move the Amendment, because the circumstances have entirely changed since it was put down. When the Chancellor moved his Motion a short time ago he asked us to accept it on the ground that it would enable us to continue the discussion of Purchase Tax items, so that those Members who had been unable to make their speeches because of the unwarrantable gag applied by the Patronage Secretary would be able to make them during the discussions of the various Amendments to the Schedules.

As I understand the position, however, if we accept the Amendment we shall go straight on to discuss the new Clauses, which will mean that we shall spend a long time discussing subjects other than Purchase Tax. That is why I say that the circumstances have entirely changed. The speeches made by my hon. Friends have raised many doubts in my mind about the wisdom of the Amendment. I should much rather go forward to discuss the Purchase Tax items, because I have been trying to take part in the debate upon the tax for the last eight hours—and some of my hon. Friends have been waiting longer than that.

Another point, which has already been touched upon, is that if we start discussing new Clauses, the three which are already upon the Order Paper may not be the only new Clauses we want to discuss. We did not realise our opportunity of putting down new Clauses. The Liberal Party has not been represented here all night, and it may want to put down some new Clauses. Some of us who have constituency points which we wanted to raise in the debate upon the Question, "That the Clause, as amended, stand part of the Bill" may well consider the desirability of embodying those points in some kind of new Clause.

A short time ago the Chancellor said, in a declamatory statement, "Gone are the days of unemployment under the Tories." One can imagine the effect of that statement upon me, representing, as I do, the constituency of Accrington, which is suffering very badly from unemployment. Other hon. Members are affected in the same way. That is the kind of point we may want to embody in a new Clause. I do not know how long this sitting will last, but it may be that an endeavour will be made by the Government to discuss all these three new Clauses today, and we shall then go straight on to the Schedules, thereby losing our chance of putting down our own new Clauses.

Another new circumstance is the Chancellor's threat that he would drive the Bill through. In view of that threat, I do not think we ought to agree to such a dangerous Amendment as this until we know how much time the right hon. Gentleman will give us to discuss the first new Clauses and the other Clauses and the Schedule which are proposed to be taken out of the normal course. Unless we know that we may fall into another trap, and I warn my hon. Friends against that. In view of those circumstances, I feel disposed, much to my regret, to vote against an Amendment proposed from my own side of the Committee.

Mr. S. Silverman

I began listening to the debate with a completely open mind, influenced, of course, by a natural desire to support, if possible, an Amendment moved by one of my right hon. or hon. Friends—not necessarily feeling bound to support it, but with an inclination to support it if I could. I was a little alarmed, however, to find the Chancellor minded to accept the Amendment and, in view of his behaviour throughout the long hours of the night, that was something which put me on my guard and on notice of inquiry to see what there might be in it.

The curious feature was that the right hon. Gentleman indicated his readiness to accept the Amendment before my hon. Friend the Member for Islington, East (Mr. E. Fletcher) had moved it. As I acquit my hon. Friend of collusion before the sitting, it is clear that the right hon. Gentleman could have had no conception whatever of my hon. Friend's arguments for moving the Amendment. The right hon. Gentleman must, therefore, have been indicating his readiness to accept the Amendment not to please my hon. Friend or because he agreed with his reasons, but because he had reasons of his own. I was at once a good deal more interested in speculating what the Chancellor's reasons might be than in listening to my hon. Friend's reasons.

Mr. H. Hynd

Like the Death Penalty (Abolition) Bill.

Mr. Silverman

I do not quite see the connection, but if my hon. Friend says there is one I will accept it from him.

I therefore perhaps did not pay sufficient attention to the reasons advanced by my hon. Friend in moving the Amendment. I listened with great care to my hon. Friend the Member for Accrington (Mr. H. Hynd), who was not satisfied with those reasons and who recommended us not to accept the Amendment, and I know that his reasons were more substantial than my own psychological reaction against doing anything the Chancellor wanted me to do and was ready to do for himself. I listened very carefully to my hon. Friend the Member for Accrington and I am bound to say that I now find considerable ambiguity and confusion in the position and do not quite see what we ought to do.

The Chancellor's proposal was simple enough to understand. Whether it is an idea that we should accept or not is a matter which we are not at the moment entitled to discuss, because we have not reached that stage, but, at any rate, it was clear enough in itself. He was saying, "In the normal course of things one would take the Clauses in the Bill in their order and only consider the Schedule when one had concluded discussion of the Clauses". And he was saying that is an inconvenient thing to do on this occasion because the Schedule relates almost exclusively to Clause 1, and the discussions on the Schedule would be related in some way and would be some sort of continuation of the prematurely truncated discussions on the general debate on Clause 1. That was a proposition that one could well understand. On whether or not one would agree with it we would not wish to hear further argument.

Now, the Amendment was not nearly so simple, because one would have thought the proposal would be either to take the Schedule immediately after Clause 1, or to take all the Clauses after Clause 1 and then take the Schedule. There may be considerable reason for taking one or other of those perfectly intelligible courses. But under the Amendment which my hon. Friend has moved, and which, most surprisingly, the Chancellor has indicated his readiness to accept, if we were to do that we would then be in an extremely queer situation, because it would result in our getting the worst of both worlds. We would not deal with Clauses 2, 3, 4 or 5 until it had been covered. [Interruption.] My hon. Friends behind might differ in their opinion.

6.0 a.m.

The Deputy-Chairman

No private discussion can be carried on.

Mr. Silverman

I am sorry, Sir Rhys. I thought my hon. Friend was not able to hear me, whereas the Chair was.

I was saying that I cannot understand on what basis the Committee could possibly be invited to accept the situation that would result from accepting the Chancellor's Motion amended by my hon. Friend's proposal, because in that case it seems to me we would get the worst of both possible worlds. We would have to discuss the other Clauses in the Bill in their order so as to get on at once to the First Schedule, and, having decided to get on to that, we would then, under the Amendment, not get on to the First Schedule at all, but instead would get on to the new Clauses. While one concedes quite easily the intelligibility of postponing discussion on the remaining Clauses to get on at once to the Schedule, I really cannot understand why we should be invited to postpone discussion on Clauses 2, 3, 4 and 5, not to get on to the Schedule but to get on to new Clauses which may or may not be in order.

It seems to me that if ever there was a Gilbertian way of dealing with what is said to be an emergency situation it is the way in which the Chancellor has invited the Committee to grapple with our immediate problems. This is something with which we had to deal at once. The only excuse, he has told us repeatedly, for introducing an autumn Budget at all is the urgency of the situation. Normally, one would not have had a Budget until next spring, but it is because of the emergency and because of the necessity to deal with the matter at once that we have this Budget and this Finance Bill.

Mr. H. Wilson

On a point of order, Sir. Rhys. The point which is now being discussed is extremely intricate and of great importance and we are asked to come to a decision about it without any guidance from any Law Officer of the Crown. The Lord Advocate has been in the Chamber and has gone away again. I am aware that it is not a point of order to ask for the presence of a Law Officer, but would you be prepared after a reasonable interval, say, of five minutes, if no Law Officer is forthcoming, to accept a Motion, "That the Chairman do report Progress and ask leave to sit again"?

The Deputy-Chairman

I cannot deal with a hypothetical question in that form.

Mrs. Jean Mann (Coatbridge and Airdrie)

On a point of order. The Bill applies to Scotland, which is part of Great Britain and there is not a Member from Scotland on the Government Front Bench. There is not a Scot on the back benches. [HON. MEMBERS: "Yes."] Cannot we send for more Scots?

Mr. R. J. Mellish (Bermondsey)

Further to that point of order.

The Deputy-Chairman

It is not a point of order. No point of order has been put forward and, therefore, there cannot be any "further" to what was not originally a point of order.

Mr. Mellish

This is a new point of order. Are we not entitled to have somebody representing Northern Ireland on the Government Front Bench?

The Deputy-Chairman

That, too, is not a point of order.

Mr. S. Silverman

One must accept your Ruling, Sir Rhys, that that is not a point of order, but if it is not, it is at any rate a point of which the Committee might take cognizance. We all understand that the Solicitor-General is prob- ably engaged on much more important matters at the Old Bailey. One has to realise that not all conspiracies are organised in one place.

Lieutenant-Colonel Marcus Lipton (Brixton)

Surely my hon. Friend is not suggesting that the Old Bailey is sitting now, at six o'clock in the morning.

The Deputy-Chairman

Hon. Members would do well to keep to the Amendment.

Mr. Silverman

I thought that I was dealing reasonably competently with the complications involved in the Motion and the Amendment and the arguments that have been advanced both ways about them. But I cannot help feeling that my right hon. Friend the Member for Huyton (Mr. H. Wilson) was probably quite right if he felt at the end of the argument that he needed some legal assistance. In the absence of any Law Officers of the Crown one must do one's best without it.

Mr. Hale

This is important. The real trouble is that not only is the Chancellor away, the Economic Secretary away and the Law Officers of the Crown—

The Deputy-Chairman

The hon. Members knows quite as well as I do that that is neither a point of order nor really an intervention in a speech.

Mr. Hale

On a point of order, Sir Rhys. I did not raise a point of order at all. My hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) was gracious enough to give way for me to make a relevant comment on the Amendment. The relevant comment that I shall make—

The Deputy-Chairman

Then the hon. Member has plenty of time in Committee to make his own speech. He should wait for that opportunity.

Mr. Hale

On a point of order, Sir Rhys. I stand by the traditions of the House, which are well understood and accepted—[Interruption].

The Deputy-Chairman

Order. I cannot hear what is being said by the hon. Member.

Mr. Hale

I asked the hon. Member for Nelson and Colne, who had possession of the Floor, to give way, and the hon. Member was good enough to do so. I was making an observation which, I submit, was entirely relevant to the Amendment which we are discussing. The act of the hon. Member for Nelson and Colne in giving way to me was an example of a courtesy universally and habitually exercised between hon. Members, and it is one of the amenities of the House of Commons which it would be most unfortunate if we dispensed with. May I now make the interjection in the speech of my hon. Friend which he has been gracious enough to permit me to do?

We are discussing the question whether we should proceed to discuss three Amendments, and I was venturing to call the attention of the Committee to the fact that, so far as I am aware, none of the people in whose names the Amendments stand is present to move them. The hon. Member for Wimbledon (Mr. Black) is, no doubt, at home, studying the Finance Act of 1894 so as to be able to discuss this matter with great clarity—

The Deputy-Chairman

Order. The hon. Member is developing an intervention into a speech.

Mr. Thomas Steele (Dunbartonshire, West)

I was listening with extreme care to the argument of my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) and I was becoming convinced about what he was saying. But, with all these interruptions and the long time they have taken, I have forgotten the point he was making. I wonder whether my hon. Friend would be good enough to go over the ground again, in order to clear my mind.

The Deputy-Chairman

I hope that hon. Members will direct their minds to the Amendment.

Mr. S. Silverman

I am sure that my hon. Friend will forgive me if I do not accept his invitation. I am sure that to attempt to repeat the arguments which I have attempted to advance to the Committee so far would be out of order.

I think that my hon. Friend the Member for Oldham, West (Mr. Hale) was quite right to remind me of the absence of certain hon. Members whose presence one would have thought would have been relevant. But, for my part, I so much rejoice at the absence of the Patronage Secretary that I really do not care who else is absent.

I shall probably not be out of order if, briefly, I recall to the Committee the point I was making. I was saying that if we had had the Chancellor's Motion without an Amendment, one could have understood that as a straightforward proposal which one could accept or reject. But if we have the Amendment added to the Motion, and particularly if the Chancellor accepts it, we find ourselves in what seems to me to be a Gilbertian situation, which is something that I feel sure neither the Chancellor nor my hon. Friends really intended should happen.

The reason for the Chancellor's Motion would be completely defeated if we interposed several Clauses—which have no bearing on Clause 1 and the First Schedule—between the discussion on Clause 1 and the discussion on the First Schedule. I think that a serious point and something which the Committee is bound to consider. I was saying that the readiness of the Chancellor to accept the Amendment, having regard to the inevitable result, is a further example of the complete irresponsibility with which he has handled this whole matter from the start. In a situation in which he is inviting the Committee, as a matter of urgency, to deal with an emergency Budget of a drastic kind we have these frivolous proposals and Amendments which leave the Committee in considerable doubt about whether he is anxious to have the Schedule discussed or not. It is really an indication of the seriousness with which the Committee should regard anything which the right hon. Gentleman says.

What is the situation? We do not know now what would be the effect of accepting the Amendment and accepting the Motion because we do not know whether, in fact, there are any new Clauses to discuss. It seems to be a childish thing, inexpert and amateur, that we should deal with what is probably the most serious matter that the House of Commons is called upon to discuss—a matter of public finance, on which our whole Parliamentary representation has arisen. Our power to control the Executive has always depended on our power to control financial proposals, and here we have these proposals presented light-heartedly at 6.15 in the morning after nearly a 16-hour debate, and presented in such a way as to make it clear that the Chancellor neither knows nor cares what we deal with, or when.

6.15 a.m.

Mr. M. Stewart

I must say that I find myself unconvinced of the arguments advanced for this Amendment. I can see that a case can be argued for the Motion in its original form and also for having neither the Motion nor the Amendment. I find it difficult to see any logical reason for the proposed Amendment. I confess to the hon. Member for Islington, East (Mr. Fletcher) that I do not find his argument on the matter convincing. I hope we shall hear further arguments deployed, and I was happy to notice that you, Sir Rhys, said recently to my hon. Friend the Member for Oldham, West (Mr. Hale) that he would have full opportunity to make his own speech in this debate, and I trust we may assume from that that no Closure will be moved or accepted in this debate until my hon. Friend has been able to make his speech.

The normal way of taking a Bill in Committee is to go through it with, first, the Clauses and then the Schedules, in the order in which they are printed. That is what would happen if we had neither Motion nor Amendment. There is a case for that course on the grounds that it is normal practice. The burden of proof lies with anyone who suggests we should depart from that procedure. It is the procedure recommended by the King of Hearts in "Alice in Wonderland" —to start at the beginning, go on to the end, and then stop.

The Chancellor took on the burden of proof of showing that there was a reason here for departing from normal procedure. It seemed sound enough—that the First Schedule dealt with a matter similar to that in the Clause I. One could say that we were departing from normal procedure only in this respect, that we bring forward to an earlier point in the debate a part of the Bill because it is closely allied in matter and sense to the part we have just considered.

That is an argument to which the Committee must give a great deal of weight. Indeed, it suggests a very interesting reflection—that we might specifically consider revising our whole procedure and making it a general rule that a Schedule in Committee should always be considered after the Clause or Clauses to which it refers. However, I do not wish to trespass on your patience, Sir Rhys, and I will not develop that point any further. I will say merely that there is a case for the Chancellor's Motion.

What happens if we accept the Amendment? We are unable to stand on either of the original grounds which I have so far advanced. We should not proceed with the Bill, in accord with the rule of the King of Hearts, in the order printed on the Notice Paper and we should not be dealing with it in the order of sense. We should be considering, immediately after Clause 1, matters with no connection of sense or logic with Clause 1 in the way that the First Schedule has a connection.

We are hampered in developing this part of the argument, because, apparently, we do not know what new Clauses there would be to discuss and, even if we did, it would be out of order to discuss them. Without developing that to the point where it would transgress the rules of order, we are entitled to say on the evidence available to us that we have no reasonable grounds for supposing that any new Clause which we might find ourselves discussing would have any direct connection in sense or logic with the Clause which we have just been discussing. There would, therefore, be no proper ground for departing from the original order in which the matter is printed on the Notice Paper.

There would be such a ground, if we were going on to the First Schedule, but if we are going on to a new Clause, the nature of which we do not really know, but which we have no reasonable ground for supposing is connected in sense with the Clause which we have just left, we have no logical ground for proceeding in that manner. If it is not in order to discuss a new Clause, which appears on the Notice Paper in the name of the hon. Member for Wimbledon (Mr. Black), it may be in order to discuss the hon. Member for Wimbledon. The most relevant fact about him is that he is not here. Having said that, there is really no more one need say on that topic, because it emphasises again the unwis- dom of proceeding on a Clause, which may be the Clause we are to discuss, or which might not, but which, if it were, would be a Clause to be moved by an hon. Member who is not here to move it.

If I may quote it as an illustration, I very well remember hearing a very wise and important lecture on prison reform in which the lecturer began by saying that, while there may be many differences of opinion about how prisoners should be treated in prison there was one essential for all forms of treatment of prisoners, and that was that the prisoner should be there to receive the treatment. Arrangements were needed, even in the most humane prisons, to ensure that the prisoners did not escape. I submit that we do not know which new Clauses we might have to discuss, if we accept the Amendment, but it is a cardinal necessity of any new Clause being moved that the mover must be here to move it.

One other reason might be advanced. It may be said that we have had a wearisome discussion on Purchase Tax on the Question, "That the Clause, as amended, stand part of the Bill" and that that is another reason for departing from the ordinary order. It might be said that we should have a change of subject and that the Committee should refresh itself before again turning to Purchase Tax. If that is the object, surely it would be better served by a Motion to report Progress, which it would be out of order to attempt to move at present. We have been given to understand that it is unlikely that such a Motion will be accepted. I think that a short time ago one of my hon. Friends was given to understand that it was unlikely that such a Motion would be accepted, although if other of my hon. Friends wish to try their hands, it is for them so to do.

If the object of the Amendment were that it would give the Committee an opportunity to refresh itself before again talking about Purchase Tax, I can see force in that, but the best way of achieving that end is for the sitting to be brought to a conclusion.

Mr. Monslow

Is the hon. Member not confused about the Ruling from the Chair? The Chair ruled, about 20 minutes ago, that the Chair could be asked in five minutes; and that is 20 minutes ago.

The Deputy-Chairman

This has nothing to do with the Amendment.

Mr. Monslow

My hon. Friend must be misled about the Ruling.

The Deputy-Chairman

We are not discussing a Ruling of the Chair, but an Amendment.

Mr. Stewart

I pointed out that the Amendment could not be justified on the ground that it would result in our taking the Bill in the order in which it is printed on the Notice Paper. It could not be justified on the ground that it would result in our taking the Bill in the order of sense. The Chancellor's Motion would have done that, but the Amendment will not. It cannot be justified on the ground that it would give the Committee rest and relaxation before returning to Purchase Tax, because that would have been better served by the moving, and the acceptance, of a Motion to report Progress.

There remains another possibility, namely, that the Committee might refresh itself not by adjourning the sitting, but by discussion of some other part of the Bill. It was all the more exciting because we did not know what new Clause was to come forward. This seemed an argument for the Amendment to which we might give some consideration. I am reminded of the great economist, Professor Alfred Marshall, who relates that when studying economics, to keep his mind clear he never pursued his studies for more than fifteen or twenty minutes at a stretch. At the end of each stretch he turned aside and relaxed by reading the works of Shakespeare, or the Greek dramatists. He said that he got through the whole of the works of Shakespeare in that fashion.

It might have been argued that this Amendment is to enable the Committee to proceed very much in the manner recommended by Professor Alfred Marshall.

Mr. Ian Mikardo (Reading)

Is the hon. Member suggesting that we should interrupt our proceedings so that the Chancellor can give a rendering of one of the speeches of the First Assassin?

Mr. Stewart

I had not thought of that. It seems a happy and appropriate proposal.

Mr. S. Silverman

Does the hon. Member not consider that the speech of the Second Gravedigger would be more appropriate?

Mr. Stewart

I submit that practically everything I have said has borne closely on the Amendment. I was dealing with the last ground on which a case might be made for the Amendment. That was that it might provide a kind of refreshment for the Committee before it reverts to the stern subject of Purchase Tax. I instanced Professor Alfred Marshall to show that the idea of refreshment had commended itself to the powerful minds of eminent scholars. But, again, we are up against a difficulty.

Mr. Monslow

What Amendment is my hon. Friend speaking to?

Mr. Stewart

With great respect, I thought that that was within the knowledge of the Committee. I think it will also be clear to the Committee that, so far, I have advanced reasons very solidly against the Amendment. Since the Amendment in the name of one of my hon. and learned Friends was moved by the hon. and learned Member for Islington, East (Mr. E. Fletcher) I have searched carefully for arguments which might justify it. I have so far advanced three possible ones, but, to my regret, find them all unsatisfactory.

6.30 a.m.

I am now advancing a last argument—what I may call the refreshment argument—for this Amendment, and, I regret to say, finding that also unsatisfactory for this reason—a reason which has troubled us previously. How can we suppose that we should, if we accepted this Amendment, find ourselves refreshed before returning to the subject of Purchase Tax when we do not know what new Clause, if any, this Amendment would land us into the discussion of? [HON. MEMBERS: "Grammar!"] It is quite true that the proposed new Clause on the Notice Paper would give us quite a change from Purchase Tax, but we do not know if it is in order, and we do not know whether by the time the discussion on this Amendment is over, assuming it were carried and we started discussing new Clauses, some other new Clause might have made its appearance, dealing possibly very closely with Purchase Tax, for then we should not be refreshed at all because we should simply be landed into discussing Purchase Tax from another point of view.

I submit, therefore, that a number of arguments might have been advanced to show we should accept this Amendment, but to my mind none of them carries conviction. I am sorry to say this to those of my hon. Friends who have argued the other way, but nothing they have said has made the case for the Amendment any clearer. We are left, then, with the situation I put before the Committee at the beginning of my remarks, that there was a case for doing nothing at all and proceeding with our normal procedure, and there was a case for the Chancellor's Motion and dealing with the Purchase Tax Schedule immediately after the Purchase Tax Clause; both those courses had a great deal to recommend them. But the course that is now proposed to us in the Amendment cannot be justified on any of those grounds, and though I have endeavoured, perhaps with excessive ingenuity, to find other grounds on which that course might have been justified, I have been unable to do so in a way that convinces myself, and if I do not convince myself it is very unlikely that I shall convince any other hon. Member.

Mr. H. Wilson

Before my hon. Friend finally gives up the hope of convincing himself and the Committee on this point, would he not agree that it would be easier to convince both himself and the Committee if we had a Law Officer present?

Mr. Stewart

I feel sure that is so. I think we ought to have Law Officers for both parts of the United Kingdom. Indeed, I am not at all sure that there is not an important passage in brackets that bears on this, which raises the question whether Clauses should be taken out of their proper order or not, and I should very much like to hear it expounded by one of the Law Officers of the Crown.

Seriously, there is a logical case for doing nothing and a logical case for the Chancellor's Motion. If there is a case of any kind for this extraordinary Amendment, it has not so far been advanced in the Committee, and I trust therefore that, unless such a case is forthcoming, this Amendment will not commend itself to my hon. Friends.

Mr. Mellish

I feel very confused now. It was bad enough when we started, but now I do not know where I am. Having listened to my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) and my hon. Friend the Member for Fulham (Mr. M. Stewart), I feel I have reached a stage when I should invoke the conscience clause of my party and abstain from voting. May I say how delighted I am to see you in the Chair, Mr. MacPherson? I now know that we cannot have the Patronage Secretary moving the Closure on this important question. Seeing the Patronage Secretary here reminds me of an out-of-work parson—

The Temporary Chairman (Mr. Malcolm MacPherson)

I hope that the hon. Member will discuss the Amendment rather than the Patronage Secretary.

Mr. Mellish

I am sure you will allow me to continue my remarks about the Patronage Secretary, Mr. MacPherson. He reminds me of an out-of-work parson who keeps running in and out of church saying "Amen" and bringing the service to a close.

It is a great pleasure to see the Chancellor of the Exchequer here because, as he has said that he is prepared to accept the Amendment, we are once again in the atmosphere, not of an out-of-work parson, but of a full-blown archbishop—an atmosphere he has created. If I may say so quite respectfully, this is a weird sort of church because not only do we put money into the plate when we come in but also when we go out, and there are pick-pockets taking money away as well.

My hon. and learned Friend the Member for Kettering (Mr. Mitchison) is not here. Where is he? His name has been put to the Amendment. We all know the hon. and learned Member—

Mr. Gaitskell

If my hon. Friend will allow me—

Mr. Mellish

Do not get too upset about it.

Mr. Gaitskell

I know what a loyal colleague my hon. Friend the Member for Bermondsey (Mr. Mellish) is. I know he would do just what I am doing now, get up and defend the honour of my hon. and learned Friend the Member for Kettering (Mr. Mitchison), who put his name to this Amendment. I am not expressing an opinion on the Amendment—just listening carefully to the debate—but I must say that my hon. and learned Friend is not here because he has a Committee to attend later this morning and he did warn us that he was not able to remain here. I do not think we ought to become personal in discussing this Amendment; it is the principle that matters.

Mr. E. Fletcher

It might interest the Committee to know that I am expecting my hon. and learned Friend the Member for Kettering (Mr. Mitchison) to be back here by about 10 o'clock and that I am hoping he will be able to reply to the debate.

Mr. Mellish

That is another two hours and ten minutes. There is, of course, no more honourable Member of this House than my hon. and learned Friend the Member for Kettering. He is a first-class Member and a credit to his party. I have no doubt that he is on a Committee this morning, but it seemed to me that there might be some collusion here. Perhaps I ought not to say this in his absence, but here is an Amendment to which my hon. and learned Friend has put his name and suddenly he may have realised that he has done wrong and gone away. He has a feeling it is not a very good Amendment and the Chancellor might accept it. The Chancellor has accepted it. That, of course, arouses suspicion on this side of the Committee. Anything the Chancellor does in the manner of an archbishop is enough to make us worried. I should like to know what the Tories think about this. We are entitled to have an opinion from them.

Lieut.-Colonel Lipton

The view of the hon. Member for Galloway (Mr. Mackie), who appears to be asleep, would be interesting.

Mr. G. Thomas

I think something has happened to the hon. Member for Galloway.

Mr. Mellish

Frankly, I never know whether the hon. Member for Galloway is awake or not.

We have heard a spirited defence of my hon. and learned Friend the Member for Kettering. I know his qualities, but his absence is suspicious. He suddenly rose and made a statement which I could not understand, I think because he has legal training. I can rarely understand lawyers. The brilliant speech of my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) seemed so confusing that I felt sorry for him. One of the difficulties about legal arguments is that one cancels out the other until, in the end, one has nothing with which to argue.

Dr. Stross

Has my hon. Friend considered the possibility that my hon. and learned Friend the Member for Kettering (Mr. Mitchison) and the hon. Member for Wimbledon (Mr. Black) have cancelled each other out in some peculiar way?

Mr. Mellish

Knowing my hon. and learned Friend, I do not think he would cancel out anything with the hon. Member for Wimbledon. My hon. and learned Friend certainly cannot have gone off with the hon. Member for Wimbledon. I do not think they have anything at all in common. The hon. Member for Wimbledon is a great property owner and also head of the Free Church. I believe my hon. and learned Friend does not own any property and is in a different Church.

The fact that my hon. and learned Friend is not here and the fact that the Chancellor has accepted his view make me suspicious, and I think there must be some collusion. My hon. and learned Friend must have known what the Chancellor would do, and felt ashamed and went away. My hon. Friend the Member for Islington, East (Mr. E. Fletcher), with great courage and decency, decided to step in and deputise for my hon. and learned Friend, and I admire him for it.

I insist we are entitled to ask all Tories, asleep or awake, to express their point of view. The hon. Member for Wolverhampton, South-West (Mr. Powell) was present just now. He is usually vocal on all sorts of matters, but for a long while he sat where he was, obviously unaware of what was going on. My hon. Friend the Member for Fulham (Mr. M. Stewart) put a legal argument which should have suited the hon. Member, for he is a professor in Greek, but he slunk away.

Before we conclude, I hope we shall be given a simple, honest statement, not by a lawyer but in good English that every layman on this side of the Committee can understand—including the Scots, and particularly the Scots—of what this all means, so that in the end we may make up our minds whether this is a concession by the Chancellor or just a trick.

Mr. Maurice Orbach (Willesden, East)

What is the view of the hon. and gallant Member for Portsmouth, West (Brigadier Clarke)'?

Mr. Mellish

I doubt whether the hon. and gallant Member has any view about anything.

6.45 a.m.

Brigadier Terence Clarke (Portsmouth, West)

On a point of order. Is the hon. Member for Bermondsey (Mr. Mellish) in order in saying that I have no views on anything? I have lots of views, but I have not had an opportunity of stating them.

Mr. Mellish

All that the hon. and gallant Gentleman can say is "Six years of Socialism".

Mr. Hale

Surely the observations of the hon. and gallant Gentleman are a direct reflection on the Chair. If ten Members from each side have spoken, and he yet says that he has been trying to intervene and has not had an opportunity of taking part, is that not a reflection on the Chair?

The Temporary Chairman

I do not consider the observation to be a reflection on the Chair.

Mr. R. Williams

The hon. and gallant Gentleman must not be permitted to misquote the observations made by my hon. Friend the Member for Bermondsey (Mr. Mellish), who did not at any time say that the hon. and gallant Gentleman knew nothing about anything, but merely expressed doubts.

Mr. Mellish

All that I have ever heard the hon. and gallant Gentleman say, with great force, is "Six years of Socialism". I do not know what he will do now that we have had four years of Toryism.

Miss Margaret Herbison (Lanarkshire, North)

The hon. and gallant Gentleman did make another important speech one Friday afternoon, when he called "Object" to an important Bill.

Mr. Mellish

I am delighted to know that. No doubt the time will come when he will ask someone to shut the windows.

The Temporary Chairman

The hon. Gentleman has so far managed to keep some connection, tenuous though occasionally it appeared, between his remarks and the Amendment. I hope that he will now strengthen the connection.

Mr. Mellish

I appreciate, Mr. MacPherson, that you are again in the Chair, for you keep the Patronage Secretary away from us. He is the man we want to have kept away. In the true spirit of the Church, which I had almost said emanated from "Archbishop" Butler, he tried to convey that if we were to get the atmosphere he would like in the discussion on this Amendment, a sort of High Church attitude, then we really had the genuine thing and not a spurious one.

The Temporary Chairman

The hon. Gentleman must stick more closely to the Amendment.

Mr. Steele

I have listened with great care to the arguments, but there has been no speech from the hon. and gallant Gentleman the Member for Portsmouth, West (Brigadier Clarke) so far. I hope to have an opportunity to defend myself against attacks which have been made.

Mr. Mikardo

The carrying of this Amendment may put me into very great difficulty in respect of a point which I wanted to raise, and in which many of my constituents have a direct interest. I do not suppose or claim that it is any more weighty and important than points which some of my hon. Friends wish to raise in respect of the trades and industries in their constituencies adversely affected by the Finance Bill. Nevertheless, I hope to be allowed to put it because it illustrates the dilemma in which we shall be put if the Amendment of my hon. Friend the Member for Islington, East (Mr. E. Fletcher) is carried.

I was advised by those who know much more about these matters than I do that the best way for me to deal with this constituency point concerning the important industry of biscuit manufacture would be to put down a new Clause, but it was impossible to know what form that new Clause should take until I knew what was to be the fate of a certain part of the First Schedule, which it is proposed, by an Amendment, to delete. I cannot, therefore, draft this new Clause, or even seek advice about its drafting, until we have advanced a very considerable way through the First Schedule. I believe that this is the point which was made by my hon. Friend the Member for Accrington (Mr. H. Hynd) and I listened very carefully to what he said because his argument really touched upon my own difficulty.

The effect of the Amendment moved by my hon. Friend the Member for Islington, East (Mr. E. Fletcher) would be to bring the discussion of the new Clauses much further forward than would otherwise be the case. If it is carried I shall be in the position—as will other hon. Members with constituency points—of not being able to put down a new Clause to deal with my constituency point. I have as great a regard for my hon. Friend as anyone in the Committee. I say, without any suggestion of sycophancy, that we all value him, the contributions he makes to our debates, and the enlightenment which he throws upon our proceedings. There are few men in the Committee whom one would want to oppose more than he. I would not want to vote against an Amendment which he moved.

I appeal to him, however, in the light of the arguments which have been put to him by some of my hon. Friends—besides the further arguments which will doubtless be addressed to him—earnestly to consider whether he could not square it with his conscience to ask leave of the Committee to withdraw the Amendment. It will be very difficult if an important industry like the biscuit-making industry—which is doing a very good job in the export market, especialy the dollar export market—cannot have its case heard and make known the way in which it is being grossly and adversely affected by the Chancellor's proposals, simply because we have, in midstream, changed the procedure upon which we started out. On those grounds I appeal earnestly to my hon. Friend the Member for Islington, East, to consider whether he can see fit to ask leave to withdraw the Amendment.

Mr. R. Williams

I was deeply moved by the plea of my hon. Friend the Member for Reading (Mr. Mikardo), but I thought he rather overstated his case in his closing remarks. I take it that what he really intended to put forward was that my hon. Friend the Member for Islington, East (Mr. E. Fletcher) might, at a proper stage—after a full discussion of all the points had taken place—con- sider whether or not he should ask the Committee to take a certain course. If my hon. Friend the Member for Reading meant that, I have no quarrel with him, but if he meant that he wanted my hon. Friend the Member for Islington, East to suggest this course now, I would consider it a very grave discourtesy to the Committee, and I would beg my hon. Friend the Member for Islington, East to take no such course. It would be a very terrible thing to do without considering the merits of all the various cases.

What is the case for the Amendment? It is a very serious one, and much of the confusion which has arisen has occurred not because of some inherent difficulty in its wording—complex and difficult though it be—but because there has been a changed situation during the course of the debate. [Interruption.] The attention of the Committee has been distracted because some hon. Members may be under the impression that the Closure may be moved on this important matter, but I cannot think that would be possible and I prefer to assume that there are levels of decency which the Patronage Secretary will recognise. Perhaps he has come to the Committee because of an unfortunate remark by my hon. Friend the Member for Islington, East, who referred to the possibility of a dramatic intervention in our proceedings at 10 o'clock by my hon. and learned Friend the Member for Kettering (Mr. Mitchison). The Committee badly needs the expert guidance which my hon. and learned Friend can give but the time should not necessarily be fixed at 10 o'clock. I hope we may say that that can be reconsidered, thus removing the apprehensions of the Patronage Secretary.

The Temporary Chairman

I hope that the hon. Member will relate his remarks more closely to the Amendment.

Mr. Williams

I am indebted to you, Mr. MacPherson. The point of my remarks was to illustrate that perhaps my hon. Friend the Member for Islington, East had momentarily forgotten that this is the minor debate and that the major debate is on the Motion which we cannot yet discuss and which has not yet been explained by the Chancellor. This debate is therefore limited. The terms are "and any new Clauses," and the significance of the word "any" has not been mentioned. On the Notice Paper, "any" seems to be restricted to three new Clauses; there is no indication that there are any new Clauses other than those on the Order Paper.

Mr. E. Fletcher

Perhaps I can assist my hon. Friend by saying that if the Amendment is accepted, as I hope it will be, it will not prevent any subsequent new Clauses being put down for consideration at a later stage of the Bill.

Mr. H. Lever

On a point of order. Is it in order for my hon. Friend the Member for Islington, East (Mr. E. Fletcher) to attempt to persuade us in our votes by arrogating to himself the privileges of the Chair and expressing an opinion about what is and what is not, and what will be and what will not be, in order?

The Chairman (Sir Charles MacAndrew)

I did not quite make out what the hon. Member for Islington, East (Mr. E. Fletcher) was saying, but I thought he made his statement with a view to hon. Members either supporting or opposing the Amendment.

Mr. Lever

He was arrogating to himself the privileges of the Chair.

The Chairman

I know the hon. Member very well, and I am sure he would never do that.

7.0 a.m.

Mr. Mellish

Another question we must ask is whether or not the view expressed by the hon. Member for Islington, East, is in accord with the view of the hon. and learned Member for Kettering.

Mr. Williams

It is, of course, a great encouragement in putting an extremely complicated and technical argument to realise that I have such support and sympathy from hon. Members sitting around me, who have such wide experience in this particular field. But, quite frankly, I have never come across a more shocking misinterpretation than, with great respect, that which my hon. Friend the Member for Islington, East just put. This is a very difficult matter to resolve. I do not see how it can be resolved between my hon. Friend and myself. It would have to be the subject of prolonged discussion and argument between us, as so many of these technical and legal matters are.

Mr. Hale

There is just a possibility that a manuscript Amendment could make this matter clear. If the hon. Member for Islington, East, would ask leave to put down a manuscript Amendment to say, "Such new Clauses as are at the moment on the Order Paper", we should remove the apprehension of the hon. Gentleman.

Mr. Williams

With great respect, I think that is a subsidiary question. If we submit a manuscript Amendment, we must submit at least three Amendments. And my hon. Friend, the Member for Oldham, West (Mr. Hale) must know, the word "such" is a word which it is very doubtful to say has been really judicially construed at all. I am sure, in the the absence of the Law Officers, that this particular word "such," if used in this context, would be very difficult to construe. I would be greatly assisted if my hon. Friend the Member for Oldham, West would say whether he agrees that there is some point in this particular aspect of the matter, because, otherwise, the Committee might be seriously misled, and I know it is far from the thoughts of the hon. Member for Oldham, West to be in any way concerned in so serious a matter.

Mr. Hale

I am much obliged. If I am told to give a final and definitive ruling on the matter, I would say that in the course of a long legal experience I have come to the conclusion that there is no form of words which has been judicially defined in such a sense as to give a definitive and final ruling.

Mr. Williams

As to that, I would say it might relieve the anxiety of the Committee if I say that to a certain extent, but with grave limitations, I am almost entirely in agreement with the observations which have been made by the hon. Member for Oldham, West. With that concession, which I think he will feel is quite a generous one on my part—I see he acquiesces—the position is obviously so completely clarified that no Member of the Committee can be in the slightest doubt as to what would be the effect of a manuscript Amendment in the terms suggested by the hon. Member for Oldham, West.

Mr. H. Wilson

Before the hon. Member for Wigan (Mr. R. Williams) accepts too hastily the advice tendered by the Member for Oldham, West (Mr. Hale), does he not feel he would have more confidence in accepting it if we had a Law Officer to confirm it?

Mr. Williams

We should, I am sure, be assisted by the presence of a Law Officer, but I would hasten to point out to my right hon. Friend that he was under a most curious impression. He was apparently under the impression that I had agreed with my hon. Friend the Member for Oldham, West, whereas it should have been apparent to every Member of the Committee that what had happened was that the hon. Member for Oldham, West and I had clearly indicated not only that we emphatically disagreed with each other, but the nature and extent of our disagreement as well. When my hon. Friend the Member for Oldham, West and myself combine forces in this way to express disagreement so profound and clear and it is not recognised by my right hon. Friend the Member for Huyton (Mr. H. Wilson) it embarrasses me and, I am sure, my hon. Friend the Member for Oldham, West.

Mr. H. Wilson

I am sure that my hon. Friend would not want to misrepresent me. I did not say that he had agreed with my hon. Friend the Member for Oldham, West (Mr. Hale). I said, "Before my hon. Friend too readily accepts what my hon. Friend the Member for Oldham, West said." If the result of the matter is that both my hon. Friends, both distinguished lawyers, cannot agree on the point, that supports the view which I have developed three times that we should have the benefit of guidance from the Law Officers of the Crown to get the matter clear.

Hon. Members

Where are they?

Mr. Williams

The observations of my right hon. Friend the Member for Huyton have now completely cleared up a most ambiguous point of extreme difficulty. Should such a situation recur in the course of discussion, and it is possible that when my hon. Friend the Member for Oldham, West addresses the Committee there will be a very large number of points, it will be necessary for us to get into touch with each other to clarify the points as we go along. Now that the mind of my right hon. Friend the Member for Huyton is absolutely clear—

Mr. Monslow

It was with profound distress that I heard of the disagreement between my hon. Friend and my hon. Friend the Member for Oldham, West (Mr. Hale). Can we be told how it arose?

Mr. Williams

That is simplicity itself. My hon. Friend the Member for Oldham, West decided at a certain stage in our discussion to indicate to the Committee, and myself in particular, that there were certain points upon which he felt that my interpretation might be conceivably open to objection. He expressed himself in the most charming way, as he always does in this Chamber. He suggested that there should be a manuscript Amendment and subsequently, when I pointed out that the implications of his suggestion would involve my drafting three manuscript Amendments, he acquiesced. In the course of consideration of what interpretation might be applied to the word "such," my hon. Friend the Member for Oldham, West quite clearly indicated that there was a point where we did not agree with one another. It is a highly technical matter and I cannot hope in the time at my disposal to explain it more clearly, but since most hon. Members are entirely satisfied and few have the slightest doubt of what the effect of it will be, I am sure that my hon. Friend the Member for Barrow-in-Furness (Mr. Monslow) will bear with me and allow me to proceed.

Mr. John Rankin (Glasgow, Govan)

Would my hon. Friend bear in mind that the Scottish Grand Committee meets at 10.30 this morning?

Mr. Monslow

There is also the Committee which is to consider the Dentists Bill. We have extractions to do at 10.30.

Mr. G. Thomas

What about the Welsh interests?

Mr. Williams

The difficulty in that respect is that I must confine myself to this Amendment. Were I to attempt to move a Motion to report Progress, it would not be accepted.

Mr. Rankin

I assure my hon. Friend that I am not asking him to shorten his remarks, but merely to remember that the proceedings in the Scottish Grand Committee start at 10.30 a.m.

Mr. Williams

Since this is a minor debate, and will immediately be followed by a much longer and more detailed debate on the Motion, I shall be brief.

Mr. Ross

We have no desire to curtail the remarks of the hon. Gentleman, but if he could manage to persuade the Government to have the Lord Advocate in the Chamber at half-past ten, it would facilitate progress in legal matters in the Scottish Grand Committee.

Mr. Williams

I should very much like to oblige both my hon. Friends who have intervened, but all the ingenuity and experience that I possess would not be sufficient to move the right hon. and learned Gentleman from one point to another, and I think that unless something is done by the Government to help, they will be in a difficult, if not impossible position in this as in so many other matters.

I thank both hon. Members for their interventions as it has helped me to develop the particular theme relating to these four words. I have not offended against the rules of order in responding to the interventions and I am grateful for that. The main difficulty that I see is that we are put in the position of being obliged to address ourselves to one debate while we have hanging over us the effect of a larger debate behind it and a larger one behind that. We cannot discuss in detail the significance of these four words without referring in passing to the significance of the Clauses themselves, while at the same time, because of the rules of order, we must not discuss the Clauses in any detail.

The Chairman

The Clauses may not be discussed at all. We are dealing only with four words.

Mr. Williams

We are dealing with four words which we think should be left out or put in. The Amendment says that they should be left out. I submit that we must discuss where we are leaving them out of—as one of my hon. Friends put it. May I, in passing, say to my hon. Friend that that form of words put in a succinct and pointed way the details of the Amendment? From the response of the Committee I am sure that he felt that he had added lustre to our Parliamentary life by the observation he made, and particularly by the winning and attractive way in which he put it. It was almost as good an effort in draftsmanship as I find here in the Motion and the Amendment.

If we are to discuss these four words and nothing else we are in a difficulty, because to carry on a debate for the time that we have, and to be within the rules of order, and yet to discuss nothing but four words, would put even the most experienced debater in an extraordinarily difficult position. We have reached a point where we can say with confidence that we know what these words mean.

7.15 a.m.

Mr. Harold Davies (Leek)

I have listened to the lawyers for quite a long time. I want to speak simple English to them. Looking at the semantics, it is important to the laymen of the Committee to understand this. I am sure that the Committee does not know what my hon. Friend is talking about. The Chancellor says in his Motion that Clauses 2, 3, 4 and 5, and any new Clauses, should be postponed until after discussion of the Schedule. He is saying "I do not want to talk about Clauses 2, 3, 4 and 5 and any new Clauses, until I have talked about the first Schedule." Then an hon. Member on the Opposition side says "No, I want the Chancellor not to talk about the first Schedule," but he leaves out "and any new Clauses." So I can assume that they can talk about any new Clauses before they talk about the first Schedule. That is absolutely logical. I want my hon. Friend to tell me whether my logic is right and whether his law is right.

Mr. Buchan-Hepburn rose in his place and claimed to move, That the Question be now put.

Question put, That the Question be now put:—

The Committee proceeded to a Division

Mr. Fletcher

(seated and covered): I want to address you, Sir Charles, on a point of order. There are surely no precedents for the Closure being moved before an hon. Member who has moved an Amendment, and has been bitterly attacked in the debate, has had an opportunity of replying.

The Chairman

I am surprised that the hon. Gentleman did not know there is no precedent touching anywhere near that.

Mr. Fletcher

Can I take it from that reply, there being no precedents, that the Closure ought not to have been moved, and can be cancelled.

The Chairman

It ought to have been moved, I think, or I would not have accepted it.

Ayes 189, Noes 140.

Division No. 51.] AYES [7.17 a.m.
Agnew, Cmdr. P. G. Godber, J. B. Medlicott, Sir Frank
Aitken, W. T. Graham, Sir Fergus Nabarro, G. D. N.
Allan, R. A. (Paddington, S.) Grant, W. (Woodside) Nairn, D. L. S.
Amery, Julian (Preston) Grant-Ferris, Wg Cdr. R. (Nantwich) Neave, Airey
Arbuthnot, John Green, A. Nicholson, Godfrey (Farnham)
Armstrong, C. W. Grimston, Sir Robert (Westbury) Nicolson, N. (B'n'm'th, E. & Chr'eh)
Ashton, H. Harris, Frederic (Croydon, N.W.) Nield, Basil (Chester)
Atkins, H. E. Harris, Reader (Heston) Nugent, G. R. H.
Baldock, Lt.-Cmdr. J. M. Harrison, A. B. C. (Maldon) Oakshott, H. D.
Baldwin, A. E. Harrison, Col. J. H. (Eye) O'Neill, Hn. Phellm (Co. Antrim, N.)
Balniel, Lord Harvey, Air Cdre. A. V. (Macelesfd) Orr, Capt. L. P. S.
Banks, Col. C. Harvey, Ian (Harrow, E.) Page, R. G.
Barber, Anthony Heald, Rt. Hon. Sir Lionel Pickthorn, K. W. M.
Barlow, Sir John Heath, Edward Pitt, Miss E. M.
Barter, John Hill, Mrs. E. (Wythemhawe) Pott, H.P.
Powell, J. Enoch
Baxter, Sir Beverley Hirst, Geoffrey Price, David (Eastleigh)
Beattie, C. Holland-Martin, C. J. Prior-Palmer, Brig. O. L.
Bevins, J. R. (Toxteth) Hope, Lord John Raikes, Sir Victor
Bidgood, J. C. Hopkinson, Rt. Hon. Henry Ramsden, J. E.
Biggs-Davidson, J. A. Horobin, Sir Ian Redmayne, M.
Birch, Rt. Hon. Nigel Howard, Gerald (Cambridgeshire) Remnant, Hon. P.
Bishop, F. P. Howard, Hon. Greville (St. Ives) Ridsdale, J. E.
Body, R. F. Howard, John (Test) Roberts, Peter (Heelay)
Boyle, Sir Edward Hudson, W. R. A. (Hull, N.) Robinson, Sir Roland (Blackpool, S.)
Braine, B. R. Hulbert, Sir Norman Rodgers, John (Sevenoaks)
Brooke, Rt. Hon. Henry Hurd, A. R. Ropner, Col. Sir Leonard
Brooman-White, R. C. Hutchison, James (Scotstoun) Russell, R. S.
Bryan, P. Hylton-Foster, Sir H. B. H. Schofield, Lt.-Col. W.
Buchan-Hepburn, Rt. Hon. P. G. T. Iremonger, T. L. Scott-Miller, Cmdr. R.
Butler, Rt. Hn. R. A.(SaffronWalden) Irvine, Bryant Godman (Rye) Shepherd, William
Chichester-Clark, R. Jenkins, Robert (Dulwich) Smithers, Peter (Winchester)
Clarke, Brig. Terence (Portsmth, W.) Jennings, J. C. (Burton) Stevens, Geoffrey
Cole, Norman Johnson, Dr. Donald (Carlisle) Steward, Harold (Stockport, S.)
Conant, Maj. Sir Roger Johnson, Eric (Blackley) Steward, Sir William (Woolwich.W.)
Cooper-Key, E. M. Kaberry, D. Stewart, Henderson (Fife, E.)
Cordeaux, Lt.-Col. J. K. Keegan, D. Summers, G. S. (Aylesbury)
Corfield, Capt. F. V. Kerr, H. W. Sumner, W. D. M. (Orpington)
Craddock, Beresford (Spelthorne) Kershaw, J. A. Taylor, William (Bradford, N.)
Crookshank, Capt. Rt. Hn. H. F. C. Kirk, P. M. Thomas, Rt. Hn. J. P. L, (Hereford)
Crosthwaite-Eyre, Col. O. E. Lagden, G. W. Thomas, Leslie (Canterbury)
Crouch, R. F. Lambert, Hon. G. Thompson, Lt.-Cdr. R. (Croydon,S.)
Cunningham, S. K. Leather, E. H. C. Thornton-Kemsley, C. N.
Danoe, J. C. G. Leavey, J. A. Tilney, John (Wavertree)
Davidson, Viscountess Legge-Bourke, Maj. E. A. H. Touche, Sir Gordon
D'Avigdor-Goldsmid, Sir Henry Lindsay, Hon. James (Devon, N.) Turton, Rt. Hon. R. H.
Dodds-Parker, A. D. Lindsay, Martin (Solihull) Vickers, Miss J. H.
Donaldson, Cmdr. C. E. McA. Longden, Gilbert Vosper, D. F.
Drayson, G. B. Lucas-Tooth, Sir Hugh Wakefield, Edward (Derbyshire, W.)
Eden, J. B. (Bournemouth, West) Mackie, J. H. (Galloway) Walker-Smith, D. C.
Emmet, Hon. Mrs. Evelyn Maclay, Rt. Hon. John Wall, Major Patrick
Errington, Sir Eric Macmillan, Maurice (Halifax) Ward, Miss I. (Tynemouth)
Erroll, F. J. Macpherson, Niall (Dumfries) Waterhouse, Capt. Rt. Hon. C.
Farey-Jones, F. W. Maddan, Martin Webbe, Sir H.
Fell, A. Maitland, Cdr. J. F. W. (Horncastle) Whitelaw,W. S. I.(Penrith & Border)
Finlay, Graeme Maitland, Hon. Patrick (Lanark) Williams, Gerald (Tonbridge)
Fisher, Nigel Markham, Major Sir Frank Williams, Paul (Sunderland, S.)
Fleetwood-Hesketh, R. F. Marlowe, A. A. H. Williams, R. Dudley (Exeter)
Fletcher-Cooke, C. Marples, A. E. Wills, G. (Bridgwater)
Fraser, Hon. Hugh (Stone) Marshall, Douglas Wilson, Geoffrey (Truro)
Freeth, D. K. Mathew, R. Yates, William (The Wrekin)
Galbraith, Hon. T. G. D. Maude, Angus
Garner-Evans, E. H. Maudling, Rt. Hon. R. TELLERS FOR THE AYES:
George, J. C. (Pollok) Mawby, R. L. Mr. Studholme and Mr. Legh.
Glover, D. Maydon, Lt.-Comdr. S. L. C.
NOES
Alnsley, J. W. Hale, Leslie Plummer, Sir Leslie
Albu, A. H. Hamilton, W. W. Popplewell, E.
Allaun, F. (Salford, E.) Hannan, W. Price, J. T. (Westhoughton)
Awbery, S. S. Hayman, F. H. Price, Philips (Gloucestershire, W.)
Bacon, Miss Alice Healey, Denis Probert, A. R.
Benn, Hn. Wedgwood (Bristol, S.E.) Hewitson, Capt. M. Proctor, W. T.
Benson, G. Hobson, C. R. Rankin, John
Blackburn, F. Holman, P. Rhodes, H.
Blyton, W. R. Howell, Denis (All Saints) Robinson, Kenneth (St. Pancras, N.)
Boardman, H. Hoy, J. H. Rogers, George (Kensington, N.)
Bowden, H. W. (Leicester, S.W.) Hughes, Emrys (S. Ayrshire) Ross, William
Boyd, T. C. Hunter, A. E. Short, E. W.
Braddock, Mrs. Elizabeth Hynd, H. (Accrington) Silverman, Julius (Aston)
Brockway, A. F. Irving, S. (Dartford) Silverman, Sydney (Nelson)
Broughton, Dr. A. D. D. Jeger, Mrs. Lena(Holbn&St.Pncs,S.) Simmons, C. J. (Brierley Hill)
Brown, Rt. Hon. George (Belper) Jenkins, Roy (Stechford) Skeffington, A. M.
Burton, Miss F. E. Johnson, James (Rugby) Slater, Mrs. H. (Stoke, N.)
Butler, Herbert (Hackney, C.) Jones, J. Idwal (Wrexham) Slater, J. (Sedgefield)
Butler, Mrs. Joyce (Wood Green) Jones, T. W. (Merioneth) Smith, Ellis (Stoke, S.)
Champion, A. J. Kenyon, C. Sparks, J. A.
Chapman, W. D. King, Dr. H. M. Steele, T.
Chetwynd, G. R. Lawson, G. M. Stewart, Michael (Fulham)
Coldrick, W. Lee, Frederick (Newton) Stross,Dr.Barnett(Stoke-on-Trent,C.)
Collins, V. J.(Shoreditch & Finsbury) Lever, Harold (Cheetham) Swingler, S. T.
Corbet, Mrs. Freda Lever, Leslie (Ardwick) Sylvester, G. O.
Craddock, George (Bradford, S.) Lewis, Arthur Taylor, John (West Lothian)
Cronin, J. D. Lipton, Lt.-Col. M. Thomas, George (Cardiff)
Dalton, Rt. Hon. H. MacColl, J. E. Thomson, George (Dundee, E.)
Davies, Harold (Leek) Mahon, S. Thornton, E.
Deer, G. Mallalleu, J. P. W. (Huddersfd, E.) Warbey, W. N.
Delargy, H. J. Mann, Mrs. Jean Wells, Percy (Faversham)
Dodds, N. N. Marquand, Rt. Hon. H. A. West, D. G.
Donnelly, D. L. Mason, Roy Wheeldon, W. E.
Ede, Rt. Hon. J. C. Mayhew, C. P. White, Mrs. Eirene (E. Flint)
Edwards, Rt. Hon. John (Brighouse) Mellish, R. J. White, Henry (Derbyshire, N.E.)
Edwards, Robert (Bilston) Mikardo, Ian Willey, Frederick
Edwards, W. J. (Stepney) Monslow, W. Williams, Ronald (Wigan)
Evans, Albert (Islington, S.W.) Moody, A. S. Williams, W. R. (Openshaw)
Fernyhough, E. Moss, R. Williams, W. T. (Barons Court)
Fienburgh, W. Mulley, F. W. Willis, E. G. (Edinburgh, E.)
Fletcher, Eric Noel-Baker, Francis (Swindon) Wilson, Rt. Hon. Harold (Huyton)
Fraser, Thomas (Hamilton) Orbach, M. Winterbottom, Richard
Gaitskell, Rt. Hon. H. T, N. Oswald, T. Yates, V. (Ladywood)
Gibson, C. W, Owen, W. J. Younger, Rt. Hon. K.
Gordon Walker, Rt. Hon. P. C. Palmer, A. M. F.
Greenwood, Anthony Pargiter, G. A. TELLERS FOR THE NOES:
Grey, C. F. Parkin, B. T. Mr. Wilkins and Mr. Holmes.
Griffiths, David (Rother Valley) Peart, T. F.

Question put accordingly, That "and any new Clauses" stand part of the Question:—

The Committee divided: Ayes, 119, Noes 210.

Division No. 52.] AYES [7.25 a.m.
Ainsley, J. W. Edwards, Rt. Hon. John (Brighouse) Hynd, H. (Accrington)
Awbery, S. S. Edwards, Robert (Bilston) Irving, S. (Dartford)
Bacon, Miss Alice Edwards, W. J. (Stepney) Jeger, Mrs. Lena(Holbn &St.Pncs,S.)
Benson, G. Evans, Albert (Islington, S.W.) Jenkins, Roy (Stechford)
Blackburn, F. Fernyhough, E. Johnson, James (Rugby)
Blyton, W. R. Fienburgh, W. Jones, J. Idwal (Wrexham)
Boardman, H. Fletcher, Eric Jones, T. W. (Merioneth)
Bowden, H. W. (Leicester, S.W.) Fraser, Thomas (Hamilton) Kenyon, C.
Boyd, T. C. Gaitskell, Rt. Hon. H. T. N. King, Dr. H. M.
Broughton, Dr. A. D. D. Gibson, C. W. Lawson, G. M.
Brown, Rt. Hon. George (Belper) Gordon Walker, Rt. Hon. P. C. Lever, Harold (Cheetham)
Burton, Miss F. E. Greenwood, Anthony Lever, Leslie (Ardwick)
Butler, Herbert (Hackney, C.) Grey, C. F. Lewis, Arthur
Champion, A. J. Griffiths, David (Rother Valley) Lipton, Lt.-Col. M.
Chetwynd, G. R. Hale, Leslie Mahon, S.
Corbet, Mrs. Freda Hamilton, W. W. Mallalieu, J P W. (Huddersfd, E.)
Craddock, George (Bradford, S.) Hannan, W. Marquand, Rt. Hon. H. A.
Cronin, J. D. Hayman, F. H. Mason, Roy
Dalton, Rt. Hon. H. Healey, Denis Mayhew, C. P.
Davies, Harold (Leek) Herbison, Miss M. Mellish, R. J.
Deer, G. Holman, P. Mikardo, Ian
Delargy, H. J. Holmes, Horace Monslow, W.
Dodds, N. N. Howell, Denis (All Saints) Moody, A. S.
Donnelly, D. L. Hoy, J. H. Moss, R.
Ede, Rt. Hon. J. C. Hughes, Emrys (S. Ayrshire) Mulley, F. W.
Noel-Baker, Franols (Swindon) Short, E. W. Warbey, W. N.
Orbach, M. Silverman, Julius (Aston) West, D. G.
Oswald, T. Silverman, Sydney (Nelson) Wheeldon, W. E.
Palmer, A. M. F. Simmons, C. J. (Brierley Hill) White, Mrs. Eirene (E. Flint)
Pargiter, G. A. Skeffington, A. M. White, Henry (Derbyshire, N.E.)
Parkin, B. T. Slater, Mrs. H. (Stoke, N.) Wilkins, W. A.
Peart, T. F. Smith, Ellis (Stoke, S.) Willey, Frederick
Popplewell, E. Sparks, J, A. Williams, Ronald (Wigan)
Price, J. T. (Westhoughton) Steele, T. Williams, W. T. (Barons Court)
Probert, A. R. Stewart, Michael (Fulham) Willis, E. G. (Edinburgh, E.)
Proctor, W. T. Stross,Dr.Barnett(Stoke-on-Trent,C.) Wilson, Rt. Hon. Harold (Huyton)
Rankin, John Swingler, S. T. Younger, Rt. Hon. K.
Rhodes, H. Sylvester, G. O.
Robinson, Kenneth (St. Panoras, N.) Taylor, John (West Lothian) TELLERS FOR THE AYES
Rogers, George (Kensington, N.) Thomas, George (Cardiff) Mr. Winterbottom and
Ross, William Thornton, E. Mr. Wedgwood Been
NOES
Agnew, Cmdr. P. G. Fraser, Hon. Hugh (Stone) Markham, Major Sir Frank
Aitken, W. T. Freeth, D. K. Marlowe, A. A. H.
Albu, A. H. Garner-Evans, E. H. Marples, A. E.
Allan, R. A. (Paddington, S.) George, J. C. (Pollok) Marshall, Douglas
Allaun, Frank (Salford, E.) Glover, D. Mathew, R.
Amery, Julian (Preston, N,) Godber, J. B. Maude, Angus
Arbuthnot, John Graham, Sir Fergus Maudling, Rt. Hon. R.
Armstrong, C. W. Grant, W. (Woodside) Mawby, R. L.
Ashton, H. Grant-Ferris, Wg. Cdr. R.(Nantwich) Maydon, Lt.-Comdr. S. L. C.
Atkins, H. E. Green, A. Medlicott, Sir Frank
Baldock, Lt.-Cmdr. J. M. Grimston, Sir Robert (Westbury) Nabarro, G. D. N.
Baldwin, A. E. Harris, Frederic (Croydon, N.W.) Nairn, D. L. S.
Balniel, Lord Harris, Reader (Heston) Neave, Airey
Banks, Col. C. Harrison, A. B. C. (Maldon) Nicholson, Godfrey (Farnham)
Barlow, Sir John Harrison, Cot. J. H. (Eye) Nicolson, N. (B'n'mth, E. & Chr'ch)
Barter, John Harvey, Air Cdre. A. V. (Macclesfd) Nield, Basil (Chester)
Baxter, Sir Beverley Harvey, Ian (Harrow, E.) Nugent, G. R. H.
Beattie, C. Heald, Rt. Hon. Sir Lionel Oakshott, H. D.
Bevins, J. R. (Toxteth) Heath, Edward O'Neill, Hn. Phelim (Co. Antrim, N.>
Bidgood, J. C, Hill, Mrs. E. (Wythenshawe) Orr, Capt. L. P. S.
Biggs-Davison, J. A. Hirst, Geoffrey Owen, W. J.
Birch, Rt. Hon. Nigel Hobson, C. R. Page, R. G.
Bishop, F. P. Holland-Martin, C. J. Pickthorn, K. W. M.
Body, R. F. Hope, Lord John Pitt, Miss E. M.
Boyle, Sir Edward Hopkinson, Rt. Hon. Henry Plummer, Sir Leslie
Braddock, Mrs. Elizabeth Horobin, Sir Ian Pott, H. P.
Braine, B. R. Howard, Gerald (Cambridgeshire) Powell, J. Enoch
Brockway, A. F. Howard, Hon. Greville (St. Ives) Price, David (Eastleigh)
Brooke, Rt. Hon. Henry Howard, John (Test) Price, Philips (Gloucestershire, W.)
Brooman-White, R. C. Hudson, W. R. A. (Hull, N.) Prior-Palmer, Brig. O. L,
Bryan, P. Hulbert, Sir Norman Raikes, Sir Victor
Buchan-Hepburn, Rt. Hon. P. G. T. Hunter, A. E. Ramsden, J. E.
Butler, Mrs. Joyce (Wood Green) Hurd, A. R. Redmayne, M.
Butler,Rt. Hn. R. A.(SaffronWalden) Hutchison, James (Scotstoun) Remnant, Hon. P.
Chapman, W. D. Hylton-Foster, Sir H. B. H. Ridsdale, J. E.
Chichester-Clark, R. Iremonger, T. L. Roberts, Peter (Heeley)
Clarke, Brig. Terence (Portsmth, W.) Irvine, Bryant Godman (Rye) Robinson, Sir Roland (Blackpool, S.)
Coldrick, W. Jenkins, Robert (Dulwich) Rodgers, John (Sevenoaks)
Cole, Norman Jennings, J. C. (Burton) Ropner, Col. Sir Leonard
Collins, V. J. (Shoreditch & Finsbury) Johnson, Dr. Donald (Carlisle) Russell, R. S.
Conant, Maj. Sir Roger Johnson, Eric (Blackley) Schofield, Lt.-Col. W.
Cooper-Key, E. M. Kaberry, D. Scott-Miller, Cmdr. R.
Cordeaux, Lt.-Col. J. K. Keegan, D. Shepherd, William
Corfield, Capt. F. V. Kerr, H. W. Slater, J. (Sedgefield)
Craddock, Beresford (Spelthorne) Kershaw, J. A. Smithers, Peter (Winchester)
Crookshank, Capt, Rt. Hn. H. F. C. Kirk, P. M. Stevens, Geoffrey
Crosthwaite-Eyre, Col. O. E. Lagden, G. W. Steward, Harold (Stockport, S.)
Crouch, R. F, Lambert, Hon. C. Steward, Sir William (Woolwich, W.)
Cunningham, Knox Leather, E. H. C. Stewart, Henderson (Fife, E.)
Dance, J. C. G. Leavey, J. A. Studholme, H. G.
Davidson, Viscountess Lee, Frederick (Newton) Summers, G. S. (Aylesbury)
D'Avigdor-Goldsmid, Sir Henry Legge-Bourke, Maj. E. A. H. Sumner, W. D. M. (Orpington)
Dodds-Parker, A. D. Lindsay, Hon. James (Devon, N.) Taylor, William (Bradford, N.)
Donaldson, Cmdr. C. E. McA. Lindsay, Martin (Solihull) Thomas, Rt. Hn. J. P. L. (Hereford)
Drayson, G. B. Longden, Gilbert Thomas, Leslie (Canterbury)
Eden, J. B. (Bournemouth, West) Lucas-Tooth, Sir Hugh Thompson, Lt.-Cdr. R. (Croydon, S.)
Emmet, Hon. Mrs, Evelyn MacColl, J. E. Thomson, George (Dundee, E.)
Errington, Sir Eric Mackie, J. H. (Galloway) Thornton-Kemsley, C. N.
Erroll, F. J. Maclay, Rt. Hon. John Tilney, John (Wavertree)
Farey-Jones, F. W. Macmillan, Maurice (Halifax) Touche, Sir Gordon
Fell, A. Macpherson, Niall (Dumfries) Turton, Rt. Hon. R. H.
Finlay, Graeme Maddan, Martin Vickers, Miss J. H.
Fisher, Nigel Maitland, Cdr. J. F. W.(Horncastle) Vosper, D. F.
Fleetwood-Hesketh, R. F. Maitland, Hon. Patrick (Lanark) Wakefield, Edward (Derbyshire, W.)
Fletcher-Cooke, C. Mann, Mrs. Jean Walker-Smith, D. C.
Wall, Major Patrick Williams, Gerald (Tonbridge) Wilson, Geoffrey (Truro)
Ward, Dame Irene (Tynemouth) Williams, Rev. Llywelyn (Ab'tillery) Yates, V. (Ladywood)
Waterhouse, Capt. Rt. Hon. C. Williams, Paul (Sunderland, S.) rates, William (The Wrekin)
Webbe, Sir H. Williams, R. Dudley (Exeter)
Wells, Percy (Faversham) Williams, W. R. (Openshaw) TELLERS FOR THE NOES:
Whitelaw, W.S.I.(Penrith & Border) Wills, G. (Bridgwater) Mr. Leigh and
Mr. Barber.
Mr. Buchan-Hepburn

I claim, That the main Question, as amended, be now put.

Question put accordingly, That Clauses 2, 3, 4 and 5 be postponed until after the First Schedule:—

The Committee proceeded to a Division

Mr. G. Thomas

(seated and covered): On a point of order. With every respect to you, Sir Charles, may I draw your attention to the fact that immediately the Patronage Secretary rose I rose and, at the top of my voice, shouted, "On a point of order." I realise that you may not have heard me because my voice is not strong, but my hon. Friends helped me and shouted as well. I wonder whether, since it was ruled by the Chair that we could not discuss the main Question and were only to discuss the Amendment, it is within our right to ask that the main Question be not granted?

The Chairman

I did not hear the hon. Member [HON. MEMBERS: "Oh "] —perhaps I might be allowed to finish my statement—but even if I had I would have taken no notice because, under the Standing Order, I have to put it forthwith.

Mr. E. Fletcher

(seated and covered): May I ask your guidance on this point of order, Sir Charles? You will recall that when the Amendment was being discussed, you were careful to rule that hon. Members could address themselves only to the Amendment and not to the main Question. Surely we ought to be entitled to have a debate on the main Question.

Mr. S. Silverman

(seated and covered): You said just now, Sir Charles, that under the Standing Order you had the power to put the main Question forthwith. I should like to submit to you that that power exists only if, in your discretion, you are of opinion that the main Question has been sufficiently discussed. With great respect, you could not possibly have reached any conclusion in a matter in which you had yourself prevented discussion on the main Motion on the ground that that would be out of order.

The Chairman

There is nothing whatever about that in the Standing Order so long as it has been put from the Chair, and it has been put; I put the Question myself.

Mr. Silverman

(seated and covered): On a point of order. I did not catch a single word of your Ruling, Sir Charles.

The Chairman

The hon. Member, on a point of order, said that the main Question had not been discussed. It does not have to be discussed. If the hon. Member will look at the Standing Order he will see that is so, so long as it has been put from the Chair.

Mr. Silverman

(seated and covered): At the beginning of the discussion, Sir Charles, you had told us we must confine ourselves to discussion to the Amendment on the ground that the Chancellor's Motion would be discussed later.