• TABLE OF CONTENTS
HIDE
 Front Cover
 Table of Contents
 Main
 Back Cover














Title: British speeches of the day
ALL VOLUMES CITATION THUMBNAILS PAGE IMAGE ZOOMABLE
Full Citation
STANDARD VIEW MARC VIEW
Permanent Link: http://ufdc.ufl.edu/UF00076217/00039
 Material Information
Title: British speeches of the day
Physical Description: 5 v. : ; 23 cm.
Language: English
Creator: British Information Services
Publisher: British Information Services,
British Information Services
Place of Publication: New York
Publication Date: May 1946
Frequency: monthly
regular
 Subjects
Subject: World War, 1939-1945 -- Periodicals   ( lcsh )
Politics and government -- Periodicals -- Great Britain -- 1945-   ( lcsh )
Foreign relations -- Periodicals -- Great Britain   ( lcsh )
Genre: federal government publication   ( marcgt )
periodical   ( marcgt )
 Notes
Dates or Sequential Designation: Began with Mar. 1943.
Dates or Sequential Designation: -v. 5, no. 5 (June 1947).
General Note: At head of title: British Information Services, an agency of the British government.
General Note: Description based on: Vol. 4, no. 1 (Feb. 1946); title from cover.
 Record Information
Bibliographic ID: UF00076217
Volume ID: VID00039
Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: oclc - 01412079
lccn - 45006482

Table of Contents
    Front Cover
        Front Cover
    Table of Contents
        Table of Contents
    Main
        Page 239
        Page 240
        Page 241
        Page 242
        Page 243
        Page 244
        Page 245
        Page 246
        Page 247
        Page 248
        Page 249
        Page 250
        Page 251
        Page 252
        Page 253
        Page 254
        Page 255
        Page 256
        Page 257
        Page 258
        Page 259
        Page 260
        Page 261
        Page 262
        Page 263
        Page 264
        Page 265
        Page 266
        Page 267
        Page 268
        Page 269
        Page 270
        Page 271
        Page 272
        Page 273
        Page 274
        Page 275
        Page 276
        Page 277
        Page 278
        Page 279
        Page 280
        Page 281
        Page 282
        Page 283
        Page 284
        Page 285
        Page 286
        Page 287
        Page 288
        Page 289
        Page 290
        Page 291
        Page 292
        Page 293
        Page 294
        Page 295
        Page 296
        Page 297
        Page 298
        Page 299
        Page 300
        Page 301
        Page 302
        Page 303
        Page 304
        Page 305
        Page 306
        Page 307
        Page 308
        Page 309
        Page 310
        Page 311
        Page 312
        Page 313
        Page 314
    Back Cover
        Page 315
        Page 316
Full Text








































G'7 8 (os
v.4
I14o, 4










WELCOME TO THE EMERGENCY CONFERENCE ON
EUROPEAN CEREALS SUPPLIES
RT. HON. ERNEST BEVIN, Secretary of State for Foreign Affairs
London, April 3, 1946. It is my privilege, on behalf of His Majesty's
Government, to welcome this conference to London. This 1is the widest
European conference since the war. It must also feel the advantage-as
against other conferences-that it is not concerned with politics at all; the
fact that representatives of States which were neutral in the war or which
fought on the opposite side are attending the conference has no political
significance. The conference has come together to discuss a purely prac-
tical question, and who is here and who is not here is unimportant.
As I see it, the conference has two main jobs. The first, to consider what
steps the European countries can take to help tide over the critical period
between now and the harvest. We are not here to discuss allocations of
supplies. That is done elsewhere. We know that the allocations would
not be large, and we have to see what we can do to eke out.
If there are measures which one country has found effective, all should
know them. If there are measures which may be unpleasant, and which
individual Governments would feel reluctant to take by themselves, we
should consider whether they can be faced by all of us together.
The second main job is to see how the position looks for the period
after the harvest, that is, the crop-year 1946-47. Estimates of the world food
supply position for next year differ.
We agree, however, that this harvest will not see the end of our diffi-
culties, and one reason why estimates differ is uncertainty about the extent
to which European agriculture will have recovered at this harvest.
If this conference does nothing else, it has given us a more precise
picture of what we may expect from this year's harvest in Europe, and it
will have been worth while.
Perhaps a third task should be added. That is, to consider measures
which may increase effectiveness of agriculture production in Europe begin-
ning with the autumn'of this year.
This is a large agenda to cover in a short time. I hope that the con-
ference will get down to brass tacks and stay down and not waste its energies
in airy statements.
Europe is an important part of the world food problem because of the
damage of the war, but it is only a part. If we are to avert widespread
famine we have got to act in the prairies of North America, in the paddy
fields of Burma and Siam, and in the waters of the Antarctic. This con-
ference leads to the Food and Agriculture Organization Conference in
Washington in May, which no doubt Governments here represented will
be attending. This conference will do some of the spade work for the wider.
conference.
I hope it will show to the world that the countries of Europe can take
the lead in solving their own problems, and I trust it will lay the founda-
tions for an ultimate permanent nutrition policy, which would be a blessing
to the peoples of the world and no mean contribution to the peace of
mankind. [Official Release]








WORLD FOOD SHORTAGE

HOUSE OF COMMONS, April 4, 1946 [Extracts]

The Prime Minister (Rt. Hon. Clement Attlee): We are facing a world
food shortage. It is the aftermath of war. It is a retribution which, as so
often, falls on the innocent for the general follies of mankind. The plain
fact is that millions of people today are faced with a scarcity of food, and
some with absolute starvation. We in this country are not faced with star-
vation, but, necessarily, a country such as ours, which depends to a greater
extent than any other, on imported food, has a very difficult position to
face. It is quite impossible for us, by any degree of sacrifice on our part,
to restore the world situation. We all know from our own experience that,
during the war, we had to put up with a far less varied, and a far duller,
diet than we were accustomed to in peacetime. We had to give up many
pleasant forms of food; we had to depend on a narrower range. But
throughout the war our people were fed. Whatever else was rationed, we
were able to give our people bread. It is today precisely in the great staple
foods, on which the greater part of the human race depends-wheat and rice
-that the world shortage exists. I myself doubt whether, if distribution and
transport were ideally perfect, there would even then be enough to go
round. It is certain that that is not possible in the conditions obtaining
today.
I think it right that we should look at tfe reasons. First, there is the
destruction of war-the destruction of the fields, of transport, of plant-and
the,removal from production of millions of workers. There is the inter-
ruption of the normal movement of supply between producers and consu-
mers, which, in the modern world, had become a very complicated inter-
change. Second, there was a series of disastrous losses due to natural causes,
of which widely distributed drought was the chief.
What was the normal cereal position in the world, in its broadest aspects,
before the war? While Europe"supplied a great deal of its wheat require-
ments itself, it was the principal market for the great surplus area=of
Canada, the United States, the Argentine and Australia. Asia supported
itself partly in each country from local resources of meat and rice, but India,
Malaya, China and Japan depended for a proportion of their needs on the
surplus.produced in Burma, Siam and Indo-China.

WAR, POPULATION AND DROUGHT
There is a very close parallel between the events that happened in 'the
war in both these great areas of supply and demand. The German war cut
off the European market except for Britain, and the surplus countries
accumulated very considerable reserves by that outlet being cut off. They
also reduced their acreage while an increased purchasing power, due to full
employment and better wages among the poorer sections of the community,
enhanced the home demand. Meanwhile, in Europe, the withdrawal of
labor from the land, the actual destruction of crops and transport, and the
shortage of fertilizers-all these things due to the operations of the war-






World Food Shortage
reduced everywhere, except in Britain, the actual production. Parallel with
this, in Asia the Japanese offensive severed the consuming from the pro-
ducing areas. The result was that output in Siam and Indo-China was
reduced-there was no incentive to produce more than enough for subsist-
ence-while the war in Burma upset the whole economy of that country, so
that after the liberation there was only a very small exportable surplus.
Meanwhile the increase of demand in Asia is due to the constant increase
of the population of India by no less than five millions a year with no
comparable increase in production. Thus when the war came to an end
there was bound to be an increased demand for wheat. and rice, but the
effects of the war were rendered far more serious by the widespread failures
of crops.
I need not relate in detail all that happened. There was drought in
the Mediterranean countries, in North Africa, in South Africa, and in New
Zealand; there was the failure of the rains both in Northern and Southern
India, and there was also a tidal wave in Madras. These were all unfore-
seeable calamities, and, of course, the difficulties with regard to rice in Asia
had their repercussions on the wheat situation, by setting up a new demand
on the common wheat supplies of the world. How far was this critical
situation foreseen? Some things were foreseeable and others could not have
been anticipated, but it had always been realized that time would be needed
for, Europe and the Far East to recover from the ravages of war. It was
contemplated, and indeed calculated, that the great stocks built up by the
wheat exporting countries would tide the world over this difficult time
until normal harvests resumed. It was further anticipated that the Japanese
,war would continue for some 12 or 18 months after the end of the European
war. THE SITUATION CONFRONTING THE NEW GOVERNMENT
It must be remembered that we could not estimate what would be the
food position in the enemy countries, or the enemy-occupied countries, and
of course, we could have no foreknowledge of the drought. Therefore it
was quite reasonable for the. Coalition Government to decide that we could
allow our own wheat production to fall from its wartime peak. We could
anticipate that increased feeding stuffs would be available for farmers in
successive stages from the autumn of 1945, so that we could begin to build
up our depleted livestock. We had probably reduced our livestock more
than the vast majority of countries.
When the present Government assumed office the position was already
different from that which obtained during the war. We had the claims of
liberated Europe; Lend-Lease came to an end, and from this time on,
supplies rather than shipping became the major consideration. Iy Septem-
ber, reports came' in which showed that the wheat position was not as good
as had been hoped. Stocks in the exporting countries had been reduced-
there was a good deal of feeding to livestock-and droughts had already
occurred in the Mediterranean basin, but the best opinion was that we
could still get through till the harvest of 1946. Nevertheless, the scene was
already beginning to be overcast, and various steps were recommended
in 1945 by us to the exporting countries. We suggested a reduction in the
amount of wheat fed to stock, a maximum effort to move wheat from North






British Speeches of the Day [ME ATTLEE
America to Europe, and a reduction of the end-of-season stocks to a mini-
mum. After further reviews in January and February, and the visit of the
Minister to Washington in January, we ourselves in February raised our
extraction rate, with the inevitable result of reducing the supply of feeding
stuffs for our livestock. That was a heavy sacrifice to make and it was
particularly hard on our own farmers. We invited other countries to do
the same.
The response by the great exporting countries was immediate and I
doubt whether it is always sufficiently recognized how quickly came the
response from those countries. Within a week of a cable that I sent to
President Truman, he announced those far-reaching steps which were set
out in the statement of February 6th. Action was taken by Canada and
Australia, and it is thanks to the prompt action of those countries that the
situation has not become entirely out of hand. We, here, also set on foot
an increased wheat sowing and bread saving campaign.

THE NEEDS OF INDIA AND GERMANY
Meanwhile the Indian drought, which had begun in the autumn, con-
tinued through January to February, reducing the Indian wheat crop by as
much as 25 per cent. This meant a great new demand by India on the
common pool. The situation in Germany has been increasingly difficult.
We have to occupy a zone which has never been self-sufficing in food, but
we have from our own scanty stocks more than once helped the Germans
of the British zone. At the beginning of the year, a special delegation came
from India td this country to represent the grievous position that was
looming up there. At their request my right hon. Friend the Minister of
Food went to Washington to help them to plead their cause. The amount
required for India was tremendous considering the resources available, and
in the result, although they got less than they sought, they did get an alloca-
tion three times greater than that which was allotted in January. The
leader of the deputation, Sir Ramaswami Mudaliar, has expressed his grati-
tude to my right hon. Friend for his efforts on their behalf. . I will see
that the figures are given in the course of the Debate. Meanwhile we have
been setting on foot a whole series of measures to try to extract the utmost
that can be made available of rice from Siam and Burma. One has to
remember what the position of those countries has been-Siam was prac-
tically under Japanese domination, and Burma had been overrun. Those
were the great sources from which surplus rice in the past was available.
Lord Killearn is now in Singapore co-ordinating these efforts. I would like to
add here that no one must imagine, that this is a very short-term problem.
There is a short-term problem, but we also have to look ahead for the next
year and see what the situation is going to be. We are trying to stimulate
the greatest possible effort to get more cultivation-and more production,
because next year is not going td be easy at all.

FATS
I have stressed the cereal position because it is fundamental. Whenever
the human race is driven away from other foods; it always comes down






World Food Shortage
eventually to the question of cereals. But there is a world shortage of other
foods; in particular, of fats. We have decided not to make immediately a
further cut in the fats ration, but to intensify our efforts to increase .upplies.
Throughout all our Colonies, where there is anything that can be done,
special efforts are being made, by sending out transport and so forth, to try
to get greater supplies of fats made available. The whaling fleets, which
unfortunately had a very poor season, have been instructed to stay out in
the Antarctic beyond the normal date. Everywhere we are making these
efforts, but I am bound to warn the country that I cannot guarantee that
a further cut will not be necessary, though we shall do our utmost to avoid
it. During these past six months, we have been trying, not merely to safe-
guard supplies for our own consumers here at home, but to bring to the
notice of the great producing countries the reality of the situation, and to
organize supplies for the world in general, and especially for those areas
outside this country for which we have a responsibility.

STEPS TO REMEDY THE SITUATION
I said earlier that, whatever effort we make in this country, we ourselves
cannot deal with this situation, but we are doing what we can. We have
raised our extraction rate. We had to cut down our feeding-stuffs to
animals. We have encouraged the maximum sowing of Spring wheat. We
have reintroduced compulsory direction for higher acreage of wheat in the
1947 harvest, and taken steps to increase the labor force, including prisoners
of war. We have launched a campaign of saving. We have also summoned
a Conference of Ministers of Food and Agriculture, Which is sitting today
and has been sitting since yesterday in London, in order to stimulate Euro-
pean food production and make the maximum use for human consumption
of existing supplies. As the House knows, the Food and Agricultural
Organization is holding a Conference in May on the world shortage, and
we shall take our part in this. Mr. Hoover, whose great services after the
last war are still fresh in our memory, is arriving here, I believe today, and
will.be consulting with the Foreign Secretary.
As a result of the efforts which are being made throughout the world, and
especially the response of the great exporting countries, the position is
rather,better than it was a short time ago, but the outlook is still very
uncertain, and the outlook for next year is not satisfactory. By next June
the world will have consumed all those abnormal stocks of wheat that were
accumulating during the war at the time when the producing countries were
cut off from their main markets. We ourselves shall have reduced our
stocks to a level even below what was deemed to be the minimum in peace-
time-and in peacetime our stocks had not got to be very heavy because
there were regular supplies and there were greater surpluses. We must all
pray that the world harvests this year will not fall below the average, but
we have to recognize that if they do, the outlook will be black. Meanwhile,
we must all, whether farmers, smallholders or allotment holders, do our
utmost to increase production, and we must all use the greatest economy
in our consumption.
We have endeavored to set out the facts as well and fully as we can, but






British Speeches of the Day [Ma. ATTLEEn
I am bound to say to the House that the standard of accuracy in the infor-
mation given about different countries varies very considerably. Few coun-
tries have such accurate statistics as we have here. I think no other country
has such an efficient system of rationing, such a complete system of adminis-
tration, and, let me say, such complete co-operation on the part of the
ordinary citizen. In looking at this question, one must always beware of the
fallacy of averages. In many countries the conditions vary very much
between town and country. Travelers coming back will give a completely
different picture, and there is often, by averages, given an illusion of a
uniform color that really covers a patchwork. We are trying to enable
people to see this picture as a whole.
Many mistakes are made by trying to build up an argument on the basis
of a simple figure. For instance, well-meaning people write to' me some-
times calling attention to a figure of our stocks. They will suggest that
because we have a stock of so much, we can therefore afford to disperse it
and send it abroad. Stocks must be related to prospective supply and
prospective demand, and people like that are really living in the past,
because they have not got away from the idea that the normal flow which
we had in peacetime of food coming in, week by week, and day by day,
from all over the world, will still be the fact in the future.
It will not be for some time yet, and in estimating our stock position we
have to watch very carefully not only what we have got here but what is com-
ing in in the future. I know very well that all of us in this country feel acutely
distressed at the thought of other people suffering want, and even starvation,
while we can carry on. But a Government is charged with responsibility
to its own people which it cannot shirk. It has no right to disregard its
obligations. It cannot take. unjustifiable risks. We have, as I believe the
people of this country would have wished us to do, reduced our margin of
safety to the limit to help others, but further we cannot go. We must
maintain the strength of our people as a vital factor in the economic, polit-
ical and social recovery of the world.
REQUESTS TO SEND FOOD PARCELS ABROAD
There is another matter which is sometimes pressed upon me. I am
asked to allow schemes of voluntary collection of our food to be undertaken,
so that food parcels may be sent abroad. I have not agreed to this, first
because the method is very wasteful of labor; secondly, because the distribu-
tion of food in countries suffering from shortages is far better and more fairly
done by Government agencies than by some person here and there receiving
a parcel, not perhaps the person who most needs it; thirdly, because I am
not without fear of a kind of moral pressure being brought upon people to
give up food which they really ought not to give up. After all, this people
has been rationed for six years on standards which are only just enough to
keep us in health, and one has to remember there are a great many people
in this country who are living on the bare rations. I fear that individual
gifts, while satisfying the conscience, do not make an effective contribution
to the solution of the problem, and the less spectacular course of making,
every one of us, as small a demand as possible on the common pool of food,
is really far more effective.






World-Food Shortage
It is our policy that consumption in this country should not fall further
if it can possibly be avoided. We want to maintain our present standard. Our
people have endured much over a very long period, longer than most other
countries. Everything possible that can be done will be done to try to make
our dietary more varied and more palatable within-the limits that the world
situation imposes. In the present world position it is inevitable there
should be stringency. We should do all we can to prevent our late enemies
suffering starvation. Out of our own meager resources we have done what
we can, but I am bound to point out that, if it is inevitable that some should
suffer, I must rank the claims of those who, like the Indian people, have
fought by our side and the people of the liberated territories, higher than
the claims of the Germans and the Japanese who fought against us, people
who, for the most part, accepted the leadership of the men who are respon-
sible for the unhappy state of the. world. If we could, we would provide all
- with food, but I say that if that choice comes, one is bound to help our
friends before our late enemies.
I think we have no cause to be ashamed of the part our people have
played in this as in other spheres. I doubt if any other people or Govern-
ment has, while conscious of their own domestic needs, devoted more atten-
tion to trying to help others. There has never, I think, in the history of
the world been a time when all the people, all the time, have been ade-
quately fed, or have had a reasonable certainty for a reasonable period that
.that would be so. Only in more modern times have advances in the science
of production and transport rendered that possible. The lesson of the war
is that international, as well as national, planning and control are necessary
if we are to get full nutrition for all.

THE COMBINED FOOD BOARD
The Combined Food Board is an experiment, the essential principle of
which we should like to see continued. It has not any executive powers,
because the executive power to decide this issue of exports naturally rests
with the Governments of the exporting countries. But it is an international
forum in which information and arguments can be jointly examined, and
recommendations forwarded to the sovereign Governments. In fact those
Governments are, today, observing the recommendation made, and I think
it is only by those means that large-scale famine has been avoided. We
were wise in this country not to give in to those who wished to abandon
rationing and price controls at an early stage. If we had done so, the
present shortages might have caused starvation here. If the international
system of allocation had been abandoned, there would have been starvation
of millions in many countries. I think the moral is the same, internal or
international: in times of scarcity, planning is the only means of providing
fair shares for all and avoiding the coincidence of starvation oq the one
hand, and lavish consumption on the other.
I hope that, when these present difficulties have been overcome, we shall
be moving into an era in which, by utilizing the resources of the world, we
shall see that there is no starvation, no undernourishment in any part of
the world at all, but at present we have to go through a grim period-a






British Speeches of the Day [Mn. HuDsox)]
grim period in which we, as far as we can, will do our part with the other
nations to try to save others. Our duty today, every one of us, is to have
a full realization of what this position is and, as far as we may, particularly
by avoiding waste, to reduce to the utmost our demands, so that there may
be a little more for others.


Rt. Hon. R. S. Hudson (Conservative): We have just listened to a state-
ment from the right hon. Gentleman the Prime Minister which, in sub-
stance, paraphrased the White Paper that the Government were good
enough to lay before us the other day. This White Paper is divided into
two parts. It starts with a description of the world situation, and goes on
to .describe the methods which His Majesty's Government have taken to
deal with production at home. If I may be allowed to say so, I thought the
Prime Minister dealt very cursorily with the latter part. I propose to deal
with it myself later.
The first thing I want to say about this White Paper-and I am bound
to add, in fairness, that the Prime Minister to a very large extent avoided
it-is that it attributes, as anyone who looks can see on page I, the cause
of the critical situation in which we find ourselves today to an exceptional
succession of droughts. That is not true. The right hon. Gentleman the
Prime Minister said that he devoted a good deal of his speech to cereals
because of the importance of that subject. The fact of the matter is that,
taking a large number of years, we find that weather does not make an
appreciable difference to the total annual yield of wheat throughout the
world. It is a very remarkable fact that what you gain in one part of the
world on the swings, you lose in arrother part of the world on the round-
abouts. Wheat is the only crop which is planted somewhere in the world
every day of the year. It is harvested every week of the year. The result
is that, taking one year with another, the total crop for the world as a
whole does not vary materially from year to year as a result of the weather.
Much more important is the actual acreage sown to wheat in different parts
of the world every year.

ALLEGED MISTAKES IN WHITE PAPER
If the House wants any proof of that, it is contained in the White Paper
itself. The White Paper gives; at considerable length,. instances of the
shortages of wheat that are alleged to have occurred in 1945 as a result of
bad harvests. There was a poor harvest in the Argentine; there was an
indifferent harvest in Australia and Canada, but, to offset that, the harvest
in 1945 in India was one of the three best on record. To give an illustra-
tion of some of the mistakes of the White Paper, I ask hon. Members to
look at the comparison on page 7. They will find that the White Paper
describes what happened in 1945 in New Zealand, and four other countries
where there were shortages, and goes on to refer to the harvest in India
from December to April being a failure. That is not comparing like with
like. That is taking the 1946 harvest in India and comparing it with the
1945 harvest in those other countries. If we compare the 1945 harvest in




'I.


World Food Shortage
India with that in those other countries, we find that it was one of the three
highest on record. Even allowing for the fact that the harvest in the Argen-
tine, New Zealand and Australia was poor, the United States, in 1945, not
only had the biggest ever grown in the history of the United States, but of
any single country in history. If one looks at the table on page 9 one finds
that in the four chief producing countries of the world, the United States,
Canada, the Argentine and Australia, the pre-war average production was
36.9 million tons and, in 1945, 45.3 million tons, an increase of just on 10
million tons.

SHORTAGE ASCRIBED TO WRONG PRICE-FIXIN
Theiactual reason for the shortage of wheat that we are facing today is
quite different. It is mentioned in several places in the White Paper, but
was not referred to by the Prime Minister, and it is insufficiently empha-
sized in the White Paper. The real reason why we are suffering from this
shortage of wheat in the chief producing countries of the world is faulty
price-fixing, as a result of which it paid the farmers in the United States, to
some extent those in Canada and to a lesser extent those in the Argentine,
to feed their wheat and grain to animals and sell the animal products, or to
sell the wheat for making industrial products, rather than to let it go for
direct human consumption. It was not any bad harvest that reduced the
carry-over in the United States and Canada from 45 million tons in 1943,
to 23 million tons last year and 11 million tons this year. The harvest had
nothing to do with it, and the weather had nothing to do with it.
The Prime Minister: I never said it had. If the right hon. Gentleman
followed what I said he will remember that I pointed out that the carry-
over stocks had been gradually .reduced. That is the point we have made.
I never'suggested it was the bad harvest.
Mr. Hudson: I acquitted the Prime Minister of that. I said it was not
dear in the White Paper. The reserve stock was 45 million tons in
1943, 23 million tons last year and 11 millions this year and the drop was
not caused by bad harvest or weather, but by the abnormal consumption of
grain, especially wheat, by farmers for feeding livestock. In other words,
the real reason for the shortage from which we are suffering today was that
the.judgment of the price-fixing authorities was at fault. Incidentally, it
was also due-with respect to what the Primne Minister said-to unharmo-
nized planning, rather than to natural catastrophe.

DIVERsION oF GRAIn FROM ANIMAL FEED
There is quite an arguable proposition, although I am not going to
develop it at length, that if a similar situation had started to develop in
normal times when there had been no control of prices, that there would
have been very quickly such an automatic adjustment of prices that the
farmer would soon have found that it did not pay him to feed wheat to
animals, or for the brewer to buy the wheat for beer, and it would have gone
into human consumption. That argument gains strength from what is
happening today in respect to certain coarse grains. At present rye, for
example, is not under control. The price of rye has gone up in relation






British Speeches of the Day [MR. HUDsolyj
to wheat. Rye is, at present, coming forward to the ports for shipment for
human consumption instead of being fed to animals. The remedy therefore
-and-this is not brought out in the White Paper to the extent to which it
should be-is a very drastic curtailment indeed of the feeding of bread
grains to animals in the United States of America and Canada. What we
would like to know is, did the Minister of Food get the specific commit-
ment that a stop would be put to this practice, or only a pious hope such
as is expressed in the White Paper issued in February?
To illustrate the importance of this may I say that Asia was, pre-war, one
of the largest grain producing areas of the world and in Asia only 14 per
cent of the total crop of grain was used for seed or fed to animals. In the
United States no less than 75 per cent of the grain crop,.not only wheat but
also maize, was fed to animals or used for industrial purposes. That is
where the big leak is. The same thing is true in the United States of other
things such as cottonseed and soya beans. I am told that somewhere between
80 per cent and 90 per cent of the cottonseed and soya bean crop goes into
some processing industry. Some of it, of course, finds its way into human
consumption in the shape of margarine, but the great bulk does not. The
total annual cottonseed crop in America is of the order of 51/ million tons.
The Minister of Food will see that there is a pretty good margin there for
getting some more fats.
There is a further real trouble, to which no adequate reference is made
in the White Paper. A secondary real trouble is the enormous number of
acres throughout the world that are not being planted for wheat, and have
not been, for many reasons which the Prime Minister gave. But the real
gap in the information contained in the White Paper-I am not blaming
the Government for it-if we want to see the picture of the world as a
whole, is what is happening today behind the iron curtain which stretches
from Trieste to Stettin.

GERMANY; EASTERN EUROPE; MANCHURIA
Before the war that area was one of the greatest food producing areas
of the world. When I was in Germany for a few days last July, I had a
look at what was happening in our area, and at what was happening in the
American zone. In our area we gave instructions, which have been carried
out, that they were to adopt our methods of agriculture. We said: "You
must feed your grain and your food directly to humans, not to animals."
We gave instructions that large increases in the growth of potatoes and
vegetables were to be undertaken. When I got to the American zone I was
told, "It is no use doing anything here. The Nazis were self-sufficient? they
had been practising self-sufficiency for ten years. They must have got the
best system, and the best thing we can do is to apply the Nazi system."
That was based on a complete fallacy. It is true that the Nazis wanted to,
make themselves self-sufficient, but it was self-sufficiency so far as overseas
sources were concerned. As a result of Dr. Schacht's bilateral trade agree-
ments, they developed an enormous import trade of feeding-stuffs from the
Balkans and from Hungary, which enabled them to build up an artificially
high level of livestock. Cut off Huigary and Bulgaria, and the supply of
248 '







World Food Shortage
vegetables from Italy, and they were stranded. They had much too high
a population of livestock.
What is happening in those countries?. Why cannot those countries,
which used to provide this vast mass of feeding-stuffs and grain, help Ger-
many and Western Europe for that matter? Such information as I have got
is that, .in Hungary, the cattle population has been reduced by two-thirds,
the horse population by four-fifths. Men cannot cultivate the land under
such conditions. The same is probably true in Bulgaria. So far as Russia
and Manchuria are concerned, I was told from an American source the
other day that in Manchuria there is hardly a beast of any sort left. There
are millions 6f acres lying untilled this year. No one knows what Russia's
position is. The other day she was reported to have offered 400,000 tons
of wheat and 100,000 tons of barley to France. Did she grow it herself?
Did she loot it from Hungary or Bulgaria, or was it merely a transfer of
wheat which the Americans had sent earlier? . .


UNEQUAL DISTRIBUTION NOT NEW
Sir John Boyd Orr (Independent): The overriding fact is the world
food shortage and the inequitable distribution of available food. This is
no new problem in the world. Before the war, there were countries which
had so much food that they were burning it, although other countries were.
suffering hunger because of the lack of it. It is no new problem even in
this country. In the early part of the war, Members of a Committee of
another place, representing all parties, considered what should be the
country's agricultural policy after the war. Wisely they decided that it
should be based on the food requirements of the people. They came to
the conclusion that if the people of this country were to be fed on a health
standard, we would need, in addition to all the food that was imported
before the war, to increase production of the more important foods, such
as meat, dairy produce, milk, fruit, vegetables, eggs and bacon, from 25 per
cent to as much as 70 per cent. In the United States similar inquiries were
made, and it was found that, if the people of the United States were to be
fed on a health standard, production of those foodstuffs would have to be
increased by from 15 to 75 per cent. In South America, India and China,
the food shortage was very much greater. A food shortage is not something
to which mankind has been unaccustomed in the past. Nor is the maldis-
tribution of food a new problem. As I have said, before the war some
countries had so much food that they burned it, whereas other countries
lacked food. Even in this country, in some households as much as 4,000
or 5,000 calories went into the houses, with accompanying waste, while in
families on the lower income scale, less than 2,000 calories went in.
On top of that condition, there came the war, with a worsening of the
whole food position. We are, therefore, faced with two aspects of the world
food problem. The first is the temporary crisis, which is being dealt with
by UNRRA and the Combined Food Board. Secondly, there is the long-
term planning which is necessary to relieve the world forever from hunger
and malnutrition. Those two problems are closely related. When the







British Speeches of the Day [Sm.J. BomD OBn
measures which are at present being taken to alleviate starvation are ended,
and the world is brought back to the pre-war position, there will still be
many millions of people suffering from malnutrition and many more mil-
lions offering from hunger and, indeed, famine.
The work must be maintained until all mankind has food on a health
standard. Furthermore, a new problem will arise. During the war, certain
countries have stepped up production far above the pre-war level. There
is a great danger that there will accumulate piles of food for which there
is no market, with the result that there will be a depression in agriculture,
which may lead to another economic crisis such as occurred in 1929. The
world economic system, which has been shattered by the present war, will
not stand for a second time such a great crisis ...

THE FOOD AND AGBICULTUBAL ORGANIZATION
I would now like to refer to the aims of the Food and Agricultural
Organization. As hon. Members know, it deals not only with food, but
with fishery and forestry .... The object of the food and Agricultural
Organization is to raise the levels of nutrition of people in all countries of
the world. ... It is also given the task of raising the standard of living
of the food producers, many of whom were living in abysmal poverty before
the war. When that has been accomplished, I would like hon. Members
to consider bringing about a change in world affairs leading to the promo-
tion of human welfare. It has been agreed that before the war one-half of
the world's population suffered from lack of food, and that lack of food
was the cause of disease, misery and premature death. If we can produce
the necessary foodstuffs to raise the health standard, then that pre-war posi-
tion will be replaced by health, happiness and.longer life. When the world
decides to feed the peoples of the world as human beings should be fed,
there will be a greatly increased market for agricultural products, and there
will be no slump in agriculture after the war which has just ended as there
was after the previous war.
If food is to be produced it will be necessary for Governments to offer a
price which will encourage the production of food. The food producers
of the world must have a good standard of living. Thqoe living in the
country producing food must have as high a standard as those who consume
the food in the towns. To enable agriculturists to bring about a great in-
crease in food production there will be a great demand for industrial
.products. Millions and millions of agricultural implements will be needed.
As conditions of living are improved, and purchasing power is increased,
there will be a greater market for vast masses of consumer goods. There-
fore, stability and prosperity in agriculture will overflow into industry. We
must put first-things first, and do the things which we know to be right, . .
We are all aware that science has made the world seem so small, and
brought nations into- such close contact with each other, that there are only
two alternatives facing nations today: collaboration for their mutual benefit,
or war for their mutual destruction. ... In the Food and Agricultural
Organization we have a means whereby nations can begin to operate some-
thing which will do none of them harm, but all of them good. ... .






W world Food Shortage
We have been able to bring together the best brains of the world to
come and meet us in consultation. We have people from Europe, from
Asia, from North America; people whom we think are the ablest experts.
They will come to Washington and work with us for three or four days
and give us the benefit of their economic and financial knowledge, because
we should have financiers to .help us to work out these problems. They
will sit down and consider the information we have, thinking of ways and
means, and say "Yes, it can be done'"-and it can be done; it would be sound
economic policy. A further thing which gave great encouragement was the
fact that nations are to form Food and Agricultural Organization Commit-
tees within each country, in order to be able to get the information as
quickly as possible-information with'regard to food consumption and food
production, and any measures which are being taken or are in contempla-
tion. We found that Governments were eager to set up these committees.
Some committees consist of Ministers themselves. We have had the greatest
encouragement from these countries to proceed with our work, instead of
being driven by the Press from behind. I am sure this great nation will
not be last in doing its utmost to promote the work of the Food and Agri-
cultural Organization.
BBTrrN's REPUTATION
I am not sure whether or not all hon. Members of the House are aware
of the great reputation of this country. Between the two wars, when there
was grave malnutrition, a series of measures was taken resulting in the
saving of agriculture, rendering it more prosperous, and improving out of
all recognition the feeding of the people of this country. The result was
that the infant mortality rate, and other death rates, were cut in half. It
shows how easily health and welfare can be attained.
The war food policy of this country has been the admiration of all the
countries of the world. There is every reason why we should show the
world that we intend to give all the support we possibly can to the Food
and Agricultural Organization, which is trying to carry out a tremendous
task. The nations are co-operating. In the present appalling crisis I believe
that it will be possible to lay the foundation of permanent collaboration
among the nations in a plan which will bring about a world food scheme
based on human needs, and that it will set going a really benevolent revo-
lution ....

Miss Jennie Lee (Labor): The Prime Minister said this afternoon that
we had no reason to be ashamed of what we are doing in regard to the
world food situation. I want to be rather more positive, rather more crude
if you like. I want to ask Members on the other side, as well as over here,
if they can name a single great Power in the world which, according to its
resources, is making as big a contribution as we are. Let us say quite
bluntly that world leadership on the food front at the present moment is
not being given by the United States of America, or by Soviet Russia; it is
being given by this little island, by people who might- be excused if they
took a rather more selfish attitude. ...






British Speeches of the Day [Miss JENNIE LEE)
If we do ask our people to put up with hardships, we are not doing so
because we are hiding stocks of food anywhere; we are not doing so for
capricious reasons; we are doing it because, according to our means, we do
want not only to preach to other nations, but to give an example to other
nations of what can be done by co-operation towards helping'in this very
grave situation . .
I think we can be grateful that there are many Americans who take a
more civilized attitude than the American Government in a world situation
in which there is real danger of more people being killed by hunger than
were killed by war. America, Great Britain, Russia, all of us must, accord.
ing to our resources, show what we can do to meet that situation, and I
hope it will go across to America, that there are many of us in this country
who appreciate the stand of such enlightened Americans. I hope that they
will press their Government to reintroduce rationing in America, because,
after all, it is 'America's world, it is America's peace, as well as our own.
Why not say what we all know? If there were anything like equality of
sacrifice between America and Europe, then this menace of famine could
be lifted, at least, from the European theatre.

SACRIFICE TO RELIEVE INDIA
But now I look farther afield. We in Great Britain have a special
responsibility for India. We have in India old associations, old friendships,
old emnities. Again I turn to my many friends in America. I have crossed that
continent seven times. Always in America, by Americans who are progress-
ive to those who are extremely conservative, I, as a British representative,
have been upbraided with what Great Britain has done in India. Again
and again I have assured American friends that we of the Labor movement
were genuine when we said we would work for the independence of India.
At the present moment that independence is going forward, but darkening
the entire sky is the knowledge that millions of Indians are, literally, threat-
ened with death by starvation, that their plight is even more desperate than
that of Europe. I ask the Minister of Food, Is it necessary that he should
hide his virtues? Is it necessary that he should not tell us, openly, exactly
what he, as spokesman for this country, has been suggesting should be done
to meet that threatened famine in India?
We are game enough, are we not, in this country to do our, best. Then
cannot we ask all our good American friends who have expressed such great
concern about the welfare of India and the Indians to join with us in doing
something really big and really worth while? Will not our own Food
Minister say, will not the Organization that the hon. Member for the
Scottish Universities (Sir J. Boyd Orr) discussed so well, the Food and
Agricultural Organization, do something in addition to collecting statistics
and information? ... I would suggest, for instance, that as rice is the
daily bread of the East, we in this country, in addition to what we are
already doing on the food front, should agree to do entirely without rice.
[HON. MEMBERS: "We are."] I beg pardon. I thought there was a little
coming in. I am glad to know there is none at all coming in. That
strengthens what I want to say. Why not invite America to send all their






World Food Shortage
rice to India and the East? That would substantially ease the situation. It
seems to be one of the tragedies of the modern world that one is not heard
if one only speaks; one must shout. Why do not we say in a way that can
be heard across the Atlantic .that, if only our friends in America, where
there is no rationing of food, would follow the example of Britain, where
there is rationing, they woul4 be doing something that would be a contribu-
tion towards alleviating the suffering of the East? . .


/ STARVATION ON 1,000 CALORIES
Rt. Hon. Sir Arthur Salter (Independent): There is, in this White
Paper, what I regard as a rather sinister suggestion-that it is only as diets
fall below the 1,000 calorie mark that real trouble must be expected. Our
caloric level is 2,850. We know what that, means, and I say, and challenge
contradiction, that a diet of 1,000 or thereabouts means real starvation,
perhaps slow starvation, but starvation. I was a little sorry that the Prime
Minister, when making what would have been an almost platitudinous
remark if the underlying factors were different, that we must give a prefer-
ence to our friends and ourselves, over our ex-enemies, did not seem to have
in mind the fact that we are dealing with the difference between not, say
2,500 and 2,000 calories, but 2,850 and 1,014, which is the unsupplemented
ration of 10,000,000 people, half of those in the British zone of Germany
for whom we have a direct administrative responsibility. I will not press
my criticisms of this White Paper further at this moment, for the reason
that I have a promise from the Foreign Secretary, of which I would like
to remind, the Government and the House, that this White Paper is to be
followed by periodical suinmaries keeping the information up to date.
There will, therefore, be an opportunity, as there is certainly room, for
improvement in future.
THE FATE OF INDIA
Anyhow, scattered about in this Paper, andprevious Papers, there is, at
least, enough information now to enable us to assess the true gravity of the
world situation. Take, for example, the position in India. Little is said
here, but in his earlier speech the Minister of Food referred to a shortage
of wheat and rice amounting to several million tons. We must, therefore,
realize that there is likely to be a famine on a scale largely exceeding that
of 1943, and possibly involving as many persons as all those involved in the
European countries put together. I do not know whether that position is
still capable of remedy and, in particular, I do not know whether the allo-
cation to India, to which there has been some reference in Press reports
from across the Atlantic, will substantially alleviate the position. . The
Prime Minister said it would be possible, in the course of the Debate, to
give us information of what was then allocated to India. I do not know
whether he could do so now, or whether that will come later. All of us in
.this House are very conscious of our special and direct responsibility in
regard to India and the fate of the millions there. We have many of us
been proud of the achievement of the administration in India, that for a
253


*>"'<- :*






British Speeches of the Day [Sm A. SALmLER
number of years it was able completely to end the recurrent famines of the
past, and we all hope that the luster of the settlement which we are awaiting
will not be tarnished by a great catastrophe.

THE GRAVITr OF EUROPE'S PLIGHT
I would like to refer to the significance of some of the figures of the
European situation. The report of the Emergency Economic Committee
for Europe published in February included one extremely striking figure
which has now been confirmed in the White Paper. It said that no fewer
than 100,000,000 people in the part of Europe covered by the survey, which
does not include Russia, must be expected to have no more than a diet of
1,500 calories or less. And we have, as I have already mentioned, been
informed that in the British zone of Germany there will be 10,000,000
people who will have no more than 1,014 calories. That is an extremely
grave position, and I trust that in considering our own food restrictions
and in determining our future policy, we shall always bear in mind that we
have in Europe these vast numbers of people only having between one-half
and one-third of the diet now available for the British public. . .


A WOBLD PROBLEM
Dr. Barnett Stross (Labor): The fact that we are debating the subject
of the world food shortage gives one some conviction that, at long last, the
world has become aware that this is a world problem, and that perhaps for
'the first time in our age we are prepared to solve the problem by means
of world organization. It would be a mistake to believe that all was well
in the past, as many hon. Members have already suggested. Before the war,
both the quantity and quality of food consumed ini the world left much to
be desired, and if an estimate were .taken of the total weight of food con-
sumed, on the average it would have been apparent that at least 60 per cent
consisted of grain foods and only 40 per cent of other kinds of food, includ-
ing meat, fish, fruit, nuts and nut products, etc....
I have heard suggestions made which have seriously insinuated that one
individual in this country, or one individual on the Front Bench-the Min-
ister of Food-could possibly be responsible for some of the things we are
describing now. As one who has been interested for so very many years in
Nutrition from a scientific and social point of view, I must say I find myself
entirely in disagreement with that suggestion. I find it is nonsensical to
suggest that a few months in point of time could have made the slightest
difference to world events as they now stand. As some of the critics of the
Ministry's policy know very well, the reason why one could not go out into
the market and force up the price of certain staple goods by suggesting
there is going to be an immediate shortage of a world nature, is that we
are desperately short, and must have the food, and we know very well that
there would be a tendency to put the price up against us immediately. All
of us are, however, agreed about one thing. It is that the contribution
made by this country is indeed an heroically great one. We are satisfied
that every effort will be made, and indeed must be made, to carry on with





World Food Shortage
the work that has already been begun, and to see to it that the problem is
tackled at its source and dealt with as a world problem. ...



INDI'S NEED AND ALLOCATION
The Minister of Food (Rt. Hon. Sir Benjamin Smith): I will begin by
reporting on my visit to Washington. As the House will remember, I
reported at considerable length on the result of my earlier visit. The situa-
tion that I have to deal with . depends on the crops. The need for my
return to Washington is best expressed by the fact that, when I first went
there, there was a known deficit of 51V million tons of wheat in the world
which had increased to upwards of 8 million tons. India, whether the
House will believe it or not and whether the date is right or wrong, has lost
by a tidal wave 740,000 tons of rice between those times. The monsoon in
India had failed completely, and the total stock position of the whole
country had fallen by 25 per cent. When I was in Washington in January
the Indian claims were for half a million tons of rice or wheat. I was
successful on that occasion in getting an allocation of 400,000 tons, at the
same time surrendering approximately a quarter of a million tons of the
United Kingdom's.wheat allocation. When I returned to Washington the
claims of India had risen from that figure to upwards of 4 million tons for
the rest of this year. When I say, as I say in the White Paper, that I am
not at all dissatisfied, the reason is that the 400,000 tons has been raised to
1,400,000 tons, with a rice allocation of between 145,000 and 150,000 tons
out of a world pool of just over half a million tons. .
In Siam, if we are correctly informed, there is approximately one and
a half million tons of rice. The problem is getting that rice out of Siam.
They have no faith in the currency, called the tical; they have gold, they
have dollars; what they need are consumer goods and agricultural imple-
ments. On top of that, the rice is mostly in the hands of Chinese merchants,
who are holding out in the hinterland, and because of lack of internal
transport we are finding difficulty in getting the rice to the coast. When we
get it there, because we have no barges, it has to be hauled 34 miles in a
14-ft. deep waterway, to be transhipped from the L.S.T.'s, which we are
trying to use, to the ships which will take it to foreign countries. In Burma,
where they had a rice harvest before the war approximating to 6,250,000
tons, the total is down to 3,000,000 tons. Burma assures us that she cannot
export any more rice to India.
The claims on rice, of course, come not only from India; there is Borneo,
Malaya, Hong Kong, Siam, the Philippines, Porto Rico, Cuba-one could
go on, there is a whole list of countries. South Africa also is another
claimant. Yet despite this shortage, I was successful in getting an allocation
of 145,000; and possibly 150,000 tons of rice for India. I was successful in
maintaining 90,000 tons of rice for Ceylon, where for four years the people
have been living on 4V2 lb. of cereals weekly. For Malaya and Hong Kong
we got the best possible allocation that we could.
Sir A. Salter rose-





British Speeches of the Day [SIm B. SMITH]
Sir B. Smith: Would the right hon. Gentleman please allow me to
continue-
Sir A. Salter: It is reported that the Indian representatives who visited
America said that they had been granted about 60 per cent of their requests.
Could the right hon. Gentleman say whether that is true?.
Sir B. Smith: The claim of the Indians was for 2,000,000 tons for the
first half-year. I was successful in getting within 5,000 tons of an allocation
of 1,550,000 tons. The Indian delegation, although dissatisfied, nevertheless
went out of their way to pass a vote of thanks for the work I had done, but
of course I have not done enough. That was repeated here in London at
the Food Council this week. . We did get the best possible allocation
for India and the various colonies in the Pacific.

WHEAT
With regard to the allocation of wheat in general, it will be known that
it has been agreed that, because of the short supply of wheat, in the enemy-
Soccupied territories there is to be a uniform system of rationing. I hope it
will be agreed quite shortly, and it will be based, as I understand at the
moment, on a minimum of 1,000 calories per day. I am sorry, but the
House must go with me along this road. In a world of deficit one must
give the fairest possible allocation, especially to our friends, but of course
nobody would ever dream that I, through sheer malice or spite, would keep
a German or any other person short of reasonable food if we could only.
get that food. . .
As we say in the White Paper, on the whole we. got a fair allocation.
When I left Washington on the last occasion, having had discussions with the
President and with the Secretary for Agriculture, Mr. Clinton Anderson, I
impressed upon them the necessity for increasing their extraction rate from
72 per cent to some higher figure. To their credit they, immediately on
my leaving, increased the extraction rate to 80 per cent. They also issued
what I call the "39 Articles"-39 different methods of saving cereals which,
if successful in reducing the amount of food grain eaten in America, will
save approximately 2,000,000 tons in the 120 days for which it is being
imposed. One can only hope it will be successful, and if it is successful,
then that 2,000,000 tons will reduce the deficit by exactly that much.
Mr. R. S. Hudson:' Why does the right hon. Gentleman not answer the
question? It is fundamental. It would have saved time if it had been
answered. The question I asked was whether, when he was at Washington, he
got a specific promise to achieve this or merely an expression of a pious
hope? It wbuld have altered the price structure. Did he get any promise
on that?
Sir B. Smith: America is a sovereign country. It is not my business to ask
America to increase the price of wheat in America. What I did do,, how-
ever, was to get an allocation. Please do not let the House be misled.
That allocation is agreed. It then goes to the Exporters' Committee, who
have to find the ships, and ultimately, I hope, get it to its destination.
There was one outstanding point. Because of the difficulty of reconciling
the final figures, I think, to something like 500,000 tons-please do not






World Food Shortage
hold me down to .a ton or two on that-the Combined Food Board will
meet at the end of this month to go into the question of what savings there
are, and how best that small deficit in America can be wiped out. If this
economy campaign is successful, if they do achieve the saving of 2,000,000
tons that they are hoping to achieve, the deficit will be lowered by that
amount. In other words, instead of getting from America alone 5,500,000
tons we shall be getting something like 7,000,000 tons. That is hypothet-
ical. I hope the cut in the consumption of bread grain will be successful.
So when I say in the White Paper that we are more or less satisfied, that is
exactly what I mean, and I mean no-more than that and no less than that.
We had to cut the ration or the allocation for every country in the world.

SOUTH AFRICA'S NEED
One change that took place between my visit and my report to this
House after my first visit to Washington was that two Ministers flew over
from South Africa-I reported it to the House at the time-saying they
would have no wheat at the epd of the month. I immediately diverted
10,000 tons to South Africa. On top of that, their demand-I speak from
memory-for something like 50,000 tons in January, had risen to 230,000 tons
through the complete failure of the wheat crop in South Africa. What is so
much worse, not only has the crop been lost but the rains have not come,
and they are not in a condition to plant for the next harvest. I was
successful in getting-I am challenging my memory on this-for South Africa
170,000 tons out of their demand for 230,000 tons. That is another reason
for saying that we are fairly satisfied with the result. So I think that it is
a fair statement that the result of that visit, on the whole, was much better
for the countries of the world that have suffered so much as a result of
droughts and various other difficulties.

CAUSES OF WORLD GRAIN SHORTAGE
Another factor is this, that the number of claimant countries today is
so much greater. The Government stated in the White Paper that Europe
before the war was yielding 60,000,000 tons. That was down to just over
30,000,000 tons last year. That means that all the countries of Europe, at
any rate from Poland westwards, are now claimant countries. India was
never a claimant country, but because she lost her rice by a tidal wave, and
through the failure of the monsoon lost her wheat in the Punjab, she has
just become a claimant country. A surplus existed in the world in 1944,
and it was a large surplus, 174 million bushels of which were fed to cattle in
the United States of America. I think I am right in saying that something
in the order of approximately 184 million bushels were used in the conduct
of the war for making industrial alcohol. It does not take long, in talking
in these stupendous figures, for surpluses to become deficits quickly. Those
are the facts. 4
WHEAT PRICES
The right hon. Gentleman the Member of Southport [Mr. R. S.
Hudson] asks why we do not discuss the prices. Does he know the prices
at this moment? We are paying $1.55, over double the pre-war price, to
257





British Speeches of the Day [SIa B. SMIan)
Canada. Here let me pay Canada a great tribute. She could have exploited
this market or any other market in the world. But because she is with us
she has' maintained that figure at $1.55. I turn to the United States of
America. The wheat price there is $1.84 a bushel. Think in the terms
of the millions of bushels I am taking from Canada, and work it out at 29
cents saved on each bushel, and see what a saving we are getting from
Canada. I think it is a great tribute to our Canadian relatives that they
have held the price where it is. Nevertheless, it is a price that ought to
get wheat out of the ground. The House must know this, that the more
wheat you determine to take for human consumption the less wheat will
go to animal feeding, and the result will be less eggs, less bacon, less cheese,
less meat. That cannot be denied. It is all part of a vicious circle. That
is why I am looking ahead and saying the things I have said in the White
Paper. On the whole, I think, the House will agree that I, on behalf of
the Government, did make a fair contribution to the world situation.
ANSWERS TO Mi. HUDSON
I have npt a word of complaint to America as to their desire to help.
I ask the House to visualize this. To be successful in getting 6,000,000 tons
out of the United States of America we have got to ship over 1,000,000 tons
a month to get it out. If the Exporters' Committee are successful in allo-
cating and getting the sources of supply, if the internal transport is efficient
enough to get the wheat down to the docks and into the ships themselves,
I doubt whether India would be able to absorb through her ports the
1,400,000 tons of wheat I was able to get allocated to her. The right hon.
Gentleman the Member for Southport, by ignoring the essential parts of the
White Paper, endeavored to argue that this Government attributed the
present shortage of surplus to droughts. He knows much better than that.
He does not want me to tell him. If he had only read the White Paper in
a constructive and not in a critical way he would have seen that large
quantities of grain had been fed to animals, and that we have more claim-
ant countries. But I do not mind. I do not blame him. The duty of the
Opposition is to oppose. Whether that is the right way or not, I leave to
his judgment.
He argued also that the wheat crop does not vary from year to year,
but that the shortages in one part of the world are offset by surpluses in
another. That is very good pre-war economics, but I beg the House to
believe that lots of things have intervened to check that. War devastation
of countries, lack of transport, and lack of internal transport, and all those
other factors have entered into the problem. It is not only the droughts
which have had their effect, but all these other factors have had their effect
upon the movement of wheat-getting the seed down, getting petrol to run
the tractors in war-devastated countries, finding horses to plough and food
for the horses, and, finally, having to use the handplough and drag it
through the furrow. All these things have militated against the right hon.
Gentleman's pre-war conception.
Mr. R. S. Hudson: The right hon. Gentleman did not say that in the
White Paper.





SWorld Food Shortage
Sir B. Smith: The fact remains that the crops in the four main exporting
countries fluctuated from a maximum of 511/ million tons, in 1942-45,
to 40,000,000 tons, in 1943-44. The right hon. Gentleman has also com-
pletely ignored the enormous decline in European production. It is idle
to compare the post-war wheat harvests with pre-war harvests. The essen-
tial part of the problem is human need. Europe is in desperate need for
food. The Far East has suffered from an acute shortage of rice, including
China and Japan. Japan is claimant for upwards of one million tons, and
that demand has come from the military representative as a demand upon
America. China is asking for rice, wheat or flour. All the countries which
are failing to get rice because of devastated conditions, the Pacific Islands
included, say, "If we cannot get rice give us wheat." These are all claim-
ants on the stocks of the world. I have dealt with the price of wheat. The
right hon. Gentleman seems to think that one can wander around the world
picking up. wheat wherever it is. I have dealt at some length with the
Combined Food Board, who deal with allocating but not with procurement.
Had it not been for that body, dealing with wheat, rice and other things
in short supply, then the right hon. Gentleman would have had the greatest
joy in his life, because prices would have risen and inflation would have
followed. Would he not have had great joy in pointing to this Govern-
ment, saying, "You are responsible for this inflation"?
THE USE OF GRAIN FOR NON-HUMAN PURPOSES
The right hon. Gentleman had two solutions' for the problem. He
suggested we should persuade America to reduce feeding grain to animals.
I have done my best, and the Government have done their best, on more
than one occasion. The Prime Minister, on behalf of the Government,
has cabled to his opposite numbers in all the main exporting countries of
the world trying to get them to cut down the feeding of grain to animals.
I am not sure whether it was the right hon. Gentleman who said in the
course of the discussion that the Argentine were not burning cereals, but,
if so, I can assure him that they are. I met an ex-civil servant, a chairman
of the railways in the Argentine, three weeks before I left for Washington.
He is now in the Argentine. He has oil, and he is hoping to get coal from
South Africa by direct purchase. He told.me that it breaks one's heart to
see mountains of wheat and maize outside frigorificos and electrical under-
takings being burned daily with the world dying for the need of grain.
Those were his words.
Mr. R. S. Hudson: I have checked up on this today. I had a telegram
sent from the Argentine. I am told that they have the oil and coal and that
they stopped burning a month ago, and all the new crop is now available.
Sir B. Smith: All I am saying is that at that time they were burning it.
I am trying to get the wheat and other cereals out of the Argentine. With
regard to maize, South Africa, which seldom imported this commodity, are
now a claimant on the world's supply to the extent of no less than 700,000
tons. Never before has that demand been made. She is shipping coal
against the maize. They are taking approximately 25 per cent of the ship-
ment, and I am taking approximately the same amount. I cannot take.






British Speeches of the Day [Sm B. SMITH]
more than my allocation under the Combined Food Board. With regard
to Russia, it was decided in Washington that UNRRA should appeal to
the Soviet Union to allow them to buy wheat. Already I understand that
the Soviet Union have agreed to sell to France 400,000 tons of wheat and
100,000 tons of barley. Immediately that became known, we excluded
France to the equivalent value of half a million tons of cereals, and added
the amount to claimant countries.

FATS
The right hon. Gentleman also raised the question of the fat position.
It is one of the great difficulties, when cereals~are in short supply, that other
people hold on to any foodstuffs they have. What is the result? In India
the allocation of groundnuts for this country is 600,000 tons. I had tenta-
tively bought something like 570,000 tons. I have shipped 280,000 tons,
and there is now a complete embargo on Indian groundnuts and rape seed,
and they are discussing placing an embargo upon linseed. That is the
position so far as India is concerned. In West Africa there is a fairly good
crop, and we are doing our best to lift it. Mention has been made of the
whaling industry. It is all very well to say that we did not do this and that
we did not do that, but the fact remains that the moment the war ended
every effort was made, and by the Coalition Government I may say, to get
the ships out to the whaling stations. We got them out to the stations, but,
as I have already reported to the House, we have had a very poor catch.
We have decided to fish beyond 24th March, and I can only hope that
they will continue until May, which will be the latest possible date owing
to weather conditions. . .
/
HERRINGS FOR THE CONTINENT
The right hon. Gentleman referred to the export of herring to Europe.
We will be able, during 1946, to send 500,000 barrels of herrings abroad. I
know that that is nothing like equal to the 800,000 to 1,000,000 barrels
before the war. He was complaining that we were not doing enough with
our trawlers or with the fish supplies of this country. Yet, on the whole,
we are releasing every month-I think I am correct in saying-20 trawlers
as they come off mine sweeping. As quickly as they can be repaired, they
are going into service, with the result that I am already lifting licenses, at
least temporarily, to allow fish to be more widely distributed. We shall
take every possible advantage, I can assure the right hon. Gentleman, of
getting all the exports of herring that we can possibly get. . .

BRITAIN'S FOOD STOCKS
The right hon. Gentleman the Senior Burgess for Oxford University
returned to his pet subject, the revelation of stocks. Unless specifically
ordered, I do not propose to give figures of individual commodities in this
country. But I will say this: that at the end of December, 1944, our stocks
stood at 6,221,000 toiis, and that by the end of last year they had fallen to
approximately 4,821,000 tons. The best estimate I can make of the present
position is 3,940,000 tons. . .






The Budget
Between 50 and 60 per cent of this total is made up of wheat, flour,
coarse grain, and animal feeding-stuffs. The comparative figures I have
given of the Ministry's owned and controlled stocks of food and feeding-
stuffs do not, however, include stocks on farms. They do not include stocks
held by secondary wholesalers, and certain manufacturers. Everyone knows
that these stocks are moving all the time, that they have to be kept up from
my stocks.
[House of Commons Debates]


THE BUDGET
HOUSE OF COMMONS, April 9, 1946

The Chancellor of the Exchequer (Rt. Hon. Hugh Dalton): The
financial year which ended nine days ago, on 31st March, was a year of
transition from war to peace, and I will begin by resuming some of the
figures relating to the past year. First, there is the revenue. The revenue
which my predecessor 12 months ago estimated at 3,265 millions came
within 20 millions-less than one per cent-of the target, which I regard,
and I think the Committee will agree, as another amazing example of the
prophetic precision of my advisers. The actual revenue was 3,284 millions.
So far as the Customs and Excise are concerned, the estimate last April
for the yield of these duties was 1,130 millions. The remissions of Pur-
chase Tax which I made in the October Budget reduced this to 1,129
millions, and the receipts have turned out to be 1,111 millions-18 mil-
lions less than the target. But I am glad to be able to report to. the
Committee that beer has flowed in very well during the past year indeed.
Beer-well it is called beer, and taxed as such-tobacco and entertainments,
have all three established new high records, yielding over 300 millions for
beer, over 400 millions for tobacco, and over 50 millions for Entertain-
ment Duty. They have not merely beaten the estimates; they have beaten
all previous records. Purchase Tax at 118 millions also set up a record,
though it fell short of the estimate by 6 millions. A number of the other
Customs duties failed to reach the estimates by a relatively small margin.
On the other hand, most of the other Excise Duties were very close on the
estimates.
Turning to the other great branch of the tax revenue, the Inland
Revenue Duties-this last year at 2,043 millions-fell short of the estimate
by 22 millions. The Income Tax produced 1,361 millions, which beat
the estimate by 11 millions and set up a new high record. Death Duties
at 120 millions beat the estimate by 5 millions. Stamp Duties at 25
millions beat the estimate by 6 millions. On the other hand, Surtax at
69 millions fell short of the estimate by 11 millions. That was before
I put it up. The Excess Profits Tax and the National Defense Contri-
bution together brought in 466 millions, falling short of the estimate by
34 millions-because during the past year the amount of profit coming
under charge to these taxes declined considerably. In the miscellaneous
category of revenue, the sale of war stores last year brought in 60 millions.






British Speeches of the Day [MB. DALTON]
The process of disposal began slowly, as was to be expected, but during the
year it quickened considerably. So much for the revenue.
LAST YEAR'S EXPENDITURE
With regard to the expenditure last year, the actual expenditure was
5,484 millions. This is a saving of 81 millions on last April's estimate
of 5,565 millions. The Committee may wish me to analyze for a moment
this net saving. On the Vote of Credit, which was, of course, the main
item on the expenditure side, issues were only 4,410 millions as against
an estimate, 12 months ago, of 4,500 millions, and a total amount, voted
during the year, of 4,750 millions, which, as I said at the time, contained
a margin for caution. In the result, we have spent 340 millions less under
the Vote of Credit than the amount voted.
The total expenditure on Defense and Supply Departments fell slowly
between the ending of the war, first in Europe and then in Japan, and last
December. But since the new year, the reduction has been rapid, and, in
the last three months the rate of expenditure by these Departments has
fallen by a quarter, as compared with the month of June last year, and has
fallen by a quarter in spite of very heavy terminal expenses during this
time. As the speed of release from the Forces and from munitions produc-
tion has been accelerated, these terminal expenses in the form of gratuities
to men released and compensation for war contracts cancelled, have
increased faster than the non-terminal expenditure has diminished. If we
had demobilized more slowly, our total expenditure last year would have
been smaller. But that would not have been a wise economy.
On the other hand, there are some items of expenditure outside the Vote
of Credit which have been above the estimate. There was a supplementary
block grant to Local Authorities of 10 millions; a 10 millions loan to
Greece, to stabilize the drachma and to get production going in that
country; increased provision of 7 millions for civil aviation; and of 614
millions for education. On the other hand, the debt interest . was 10
millions below the estimate, the first fruits of the cut in short-term rates
of interest, for Treasury bills and the like, which I was able to announce
last October. Therefore, the realized deficit for last year was 2,200
millions, 100 millions less than the estimate.
Towards financing this deficit, and other capital items, Small Savings
provided 658 millions-a very fine total in my view-as against 666
millions in the previous year. The larger tap loans-the National War
Bonds and the Savings Bonds-produced no less than 1,290 millions, a
larger figure than in any previous year. The flow of subscriptions to these
loans was heaviest in the December quarter-hastened by hints dropped as
to the probable future movements of interest rates-and the floating debt
in that quarter was reduced by 522 millions, mostly in our borrowings
from the banks.'
FLOATING DEBT
The net increase in the floating debt over the year was only 371
millions. I think perhaps I might, at this stage, say that I do not regard
the present floating debt of nearly 6,500 millions as too large in relation
262






The Budget
either to the total of the internal debt, which is 23,000 millioris, or to the
present scale of our expenditure and revenue, or to our future requirements.
Since most of the floating debt costs us only one half of one per cent, I see
no pressing reason to replace it by more expensive forms of public borrow-
ing at this stage.
PRosPEcTs FOR 1946-47
So much for the past; now let us face the future. Prospects for the year
1946, on which we have just entered, are less somber than some scribes have
imagined. The estimated expenditure is 3,837 millions, a reduction of
1,728 millions, or 31 per cent, on the Estimate for last year. This year's
expenditure is made up of three elements: first, the Defense and Supply
Departments, on which-we shall expend 1,667 millions; secondly, the Civil
Departments-excluding, for this purpose, the Ministry of Supply, which
we class with the Defense Departments-1,652 millions; thirdly the Consol-
idated Fund services, mainly interest on the National Debt, 518 millions.
The Civil Departments, other than the Ministry of Supply, will, as I
have said, require 1,652 millions. As was shown in the White Paper on
the Civil Vote on Account, published some little while ago, these Civil
Estimates contain some 886 millions for services which last year were
borne on Votes of Credit, which, as the Committee knows, have now been
discontinued and replaced by Departmental Estimates. If we exclude these
services, transferred from the one category to the other, the Civil Estimates
for this coming year require 766 millions as against 621 millions voted
for corresponding services last year. Thus, the true increase this year over
last year in the Civil Departments is 145 millions.
SOCIAL SERVICES
This increase is due to the fulfillment of the pledges that we gave to the
electors in relation to our social program. It signifies a swift advance along
a broad front of social improvement, each item of which I am prepared to
defend on merits. The main items are: first of all, 21 millions more for
education. This includes, among other items, 4 millions more for the
universities, and for museums, libraries and art galleries. There will be an
increase of 4 millions for school milk and meals. As my right hon. Friend
the Minister of Education recently announced, milk in schools will be free
for all children from 1st August next. There will be, this next year, 19
millions more for housing. There will be 38 millions for the start, next
August, of the Family Allowances scheme which was passed under the Coali-
tion Government. There will be 14 millions more for old age and widows'
pensions, under the great charter of "Freedom from Want" now being pi-
loted through the Standing Committee by my right hon. Friend the Min-
ister of National Insurance. Under his program, to which I am sure the
Committee will be willing to work, the old people will begin to draw their
increased pensions next autumn.
DEVELOPMENT AREAS
I am also finding 10 millions more for the Development Aread. The
battle of the Development Areas is not yet won, but we mean to win it,






British Speeches of the Day [MR. DALTON)
and we mean to wipe out the evil heritage of mass unemployment in these
areas, due to long years of political neglect and private unenterprise. The
Distribution of Industry Act, also the product of the Coalition Government,
was a good Act. We have powers under it strong enough to bring these
pre-war distressed areas-industrial Scotland, South Wales, County Durham,
the North-East Coast and West Cumberland, recently added by my right
hon. Friend the President of the Board of Trade, with their very fine people,
who, let it never be forgotten, produced some of our bravest fighters in two
World Wars-to the same level of full employment and prosperity which
it is our aim to maintain throughout the country. If I may be permitted
a personal word here, I would say that no task lies nearer to my heart than
this. I have studied this topic in pretty close detail for many years. I
think I may claim to have done my share, in speaking, writing and agitating
on the subject. Now we have the Statute which we inherited from the
previous Parliament, and the power, and the will, to use it.
One of the first instructions I gave when I became Chancellor of the
Exchequer last July was that, as regards constructive plans for the Devel-
opment Areas, the Treasury was henceforth to be no longer a curb but a
spur. I have told my right hon. Friend the President of the Board of Trade,
and other colleagues co-operating with us in solving this problem, that I
will find, and find with a song in my heart, whatever money is necessary to
finance useful and practical proposals for developing these areas, and
bringing them to a condition which they never had in the past, a condition
of full and efficient and diversified economic activity. I pledge my word
that this job shall not fall down for lack of finance.

CIVIL AVIATION AND FORESTRY
I am finding also 11 million more this year for civil aviation, another
great new socialized service that this Government is creating. I am finding
2 million more for the Forestry Commission. ....

SERVICE PAY AND ALLOWANCES
Finally, on the Defense Votes this year, not in the Civil Estimates, there
are some 20 million more for better pay and allowances for officers and
other ranks, designed to make life in the Services more attractive, and to
remove any inferiority of living standards and of prospects compared with
civil life. I have further provided, as part of the 145 million, 10 million
this year for more generous war pensions under the new Royal Warrant.%
All the items in this wide and varied range of increased expenditure
have this in common. They will all add, I believe, to the health and
welfare of our people. They are all social investments, some in material
things, and some in human values. They are all expenditures which we
cannot afford not to incur in the national interest. They are the first year's
instalment of our five year plan for this Parliament. I commend them to
the Committee; and I believe that this expenditure will be approved.
DEBT CHARGE
As regards the Debt Charge, I put that for this year at 490 million, an
increase of 35 million over the cost of interest last year. This includes






The Budget
interest on borrowing to meet the prospective Budget deficit, and also on
borrowing under the Miscellaneous Financial Provisions Act of this year,
and the Finance Act of last autumn to cover the exceptional and non-
recurrent items of payments for war damage on the one hand, and Excess
Profits Tax refunds on the other. Neither of these can be closely estimated
as yet; but I am provisionally assuming that war damage will require, this
year, between 100 million and 150 million, and E. P. T. refunds some-
thing between 150 million and 200 million. Other Consolidated Fund
charges, on the existing basis, will cost 28 million.

COST-OF-LIVING SUBSIDIES
I would like at this stage to say a word on the cost-of-living subsidies.
With regard to these, we are spending a formidable total. We are pro-
viding, this year, no less than 335 million for cost-of-living subsidies., In
my Budget Speech last autumn I announced the decision to hold the present
cost of living steady, even if this meant an increase in Exchequer subsidy.
I went on to say that, for the next year at least-I was speaking in October
-and until further notice, we should seek to hold the index where it then
was, and not allow it to vary by more than an insignificant amount. I am
sure that has been a w4se decision. A stable cost-of-living index is a sheet
anchor for us in the stormy and unsettled waters of transition from war to
peace. I am sure the smoothness of what has been a gigantic turnoverof
our industrial machine from war to peace, and the almost complete absence
of industrial disputes in Britain . [are] largely due to the quiet confi-
dence of our people that they can rely on a firm basis for the cost of living,
and for the purchasing power of the money they receive. I intend to
continue this policy, with as little departure from it as possible, for the
year 1946.
The Committee must appreciate that this policy of price stability is
costing a lot of money. These subsidies were running at the rate of 250
million a year before Lend-Lease ended, and in my Budget statement in
October I estimated that the ending of Lend-Lease would add at least 50
million a year to the cost. In fact, it has added more than that. As I have
said, I now put the cost for 1946-47 at 335 million. This is a very large
figure. It is already nearly three-quarters of the cost of the National Debt,
and it may rise still higher. For the cost of imported food is steadily
tending upwards, for reasons altogether outside our control. And when,
as we hope to do, we are able to import a greater volume of supplies, the
cost of the subsidy will rise by reason of the larger quantities of goods being
brought in, in addition to any rise that may be due to the increase in their
unit price. Having said that, I repeat that to hold the cost of living steady
in present circumstances is still, in the judgment of His Majesty's Govern-
ment, wise. But we cannot go on doing this indefinitely, regardless of cost.
We shall have to reconsider this matter next year. We might even have to
do so earlier, if the prices of our necessary imports, or home supplies, rose
steeply. Subject, however, to this qualification and this warning, I repeat
my determination, on behalf of the Government, to hold the cost of living
substantially at its present level for the calendar year 1946..






British Speeches of the Day [MR. DALTON]
REVENUE, 194647
I turn to the question of revenue in the coming year, the revenue on the
existing basis of taxation. We have a total expenditure of 3,837 million.
What revenue shall I have, this year, to meet that expenditure, on the
existing basis of taxation? The estimate for Customs and Excise shows a
welcome increase over the receipts last year. With the progress of demobili-
zation, there will be more consumers 6f dutiable articles in this country,
and some of the cigarettes and other goods which used to be sent abroad
for the troops, without paying duty, will now be sold in this country and
will pay duty. This is one of the pleasures-from the point of view of a
Chancellor of the Exchequer in his departmental capacity-in movie rapid
demobilization! I have felt justified in putting receipts from beer at 312
million this year, from spirits at 77 million, from tobacco at 425 million
and from Entertainment Duty at 51 million. In addition, I can look
forward to a substantial increase in the production of articles subject to
Purchase Tax. I have assumed a rise of a little over 50 million compared
with the receipts from Purchase Tax last year. At the existing rates of
taxation, therefore, Customs and Excise Duties should produce about 1,200
million this year-and increase of 89 million on last year-though this
figure might have to be substantially reduced if unfavorable developments
abroad led to reduced imports, and hence reduced Customs revenue.
Turning to Inland Revenue, Income Tax last year yielded 1,361
million. I said in my Budget speech in the autumn that the reductions in
Income Tax, which I then proposed, would cost the Exchequer 322
million in a full year-or 315 million after allowing for a slight increase
in Surtax-and that they would cost 283 million in the current year. This
would leave me with a yield on Income Tax this year of 1,078 million.
But, thanks to increasing profits and increasing incomes generally, I expect
to do a bit better than this, and to get an additional 67 million from
Income Tax this year, giving a total yield of 1,145 million.
I am advised by my experts, who calculate these things, that Surtax.
should produce 80 millions this year, Death Duties 125 millions, Stamp
Duties 29 millions, and Miscellaneous Duties 1 million. Excess Profits
Tax and National Defense Contribution, together yielded 466 millions
last year. The reduction in the rate of Excess Profits Tax to 60 per cent,
which I proposed in,.the autumn Budget, will hardly affect the yield this
year, and the full cost of that reduction will not be felt until 1947-48. But
a further fall must be expected in the profits subject to E. P. T., and repay-
ments on account of deficiencies, which up to date have been small, will
increase. I do not, therefore, count on the Excess Profits Tax, together
with National Defense Contribution, to produce more than 325 millions
this year. This gives a grand total of 1,705 millions for the Inland
Revenue Duties, a decrease of 338 millions on last year's receipts.
Then there is revenue other than the tax revenue to be considered.
Motor Vehicles Duties are always put in a class by themselves for purposes
of classification, and are an uncertain quantity. I put them at 45 millions
for this year. The new form of motor taxation which I proposed in my
last Budget, and which was accepted by the Committee and the House, will







The Budget
apply to vehicles first registered after 1st January, 1947. Miscellaneous
revenue I put at 43 millions. This year, and henceforth, it will not include
any large amount for war damage contributions and premiums.
I would like the Committee to notice the next point. It is one of those
which were, naturally, not known to the commentators in the Press, and
were partly responsible for their too gloomy estimates of our prospects.
There are two substantial items of non-tax revenue which I shall get this
year as legacies of the war. I can only estimate them in round figures; but
I count on getting 150 millions from the sale of surplus war stores, and
50 millions as surplus receipts from the trading activities of various Gov-
ernment Departments, particularly the Raw Materials Department of the
Board of Trade. I shall thus get 200 millions of which the Press have had
no notice. My total estimated revenue is, therefore, 3,193 millions, or
some 91 millions less than that received last year. To put it in another
way, this 200 millions which comes from the sale of war stores, and from
the trading receipts of the War Departments, practically cancels out the
loss of revenue due to the Income Tax reductions-not quite, but it goes
a long way towards it.
Putting it with still more exactitude, the 200 million from these two
items plus the natural increase in Income Tax due to larger incomes-these
two together practically cancel out the loss of revenue this year due to the
Income Tax reductions of last autumn. ...

DEFICIT, 1946-47
What conclusion do we reach regarding the deficit for the coming year,
on the existing basis of taxation? We have an estimated expenditure,
including the 50 million carried to the special Fund, of 3,887 million,
and a total revenue, on the existing basis of taxation, of 3,193 million.
Thus, the prospective deficit for this financial year stands at 694 million.
This is a considerably smaller figure than most of the prophets anticipated.
Most of them said it would be 1,000 million, at least; it is, in fact, 694
million. This deficit represents a drop of 1,506 million, or 68 per cent,
on the realized deficit of 2,200 million for last year.
I think the Committee may be interested in the following figures. In
the last full year of war, 1944-45, our expenditure was 6,063 million
and our revenue 3,238 million. That is to say, in the last full year of war,
out of every 1 of expenditure we met 10s. 8d. out of revenue. We thought
that was a good record for a full year of war, and so it was. In 1945-46, the
year of transition from war to peace, our expenditure was 5,484 million,
and our revenue 3,284 million; so that, last year, out of every 1 of expen-
diture, we paid 12s. out of revenue. In the year which is now opening,
1946-47, the first full year of peace, expenditure is estimated at 3,887
million, and revenue, on the existing basis of taxation, at 3,193 million;
so that, on this basis, we shall pay, this year, out of every 1 of expenditure,
16s. 5d. out of revenue. This, I suggest, is a pretty quick recoil towards a
balanced budget.
Nor is this all that can be said about this year's prospective deficit. Both
the expenditure and the revenue this year contain large terminal items due






British Speeches of the Day ([M. DALTON]
.*to the winding up of the war. These will not recur in future years. The
clearest and most definite of these items are the following. On the expen-
diture side, there is 576 million on the Defense and Supply Departments.
Of the total provision which those Departments require this year, 576
million is terminal and will not recur. Also there is the 50 million-which
I have already mentioned-which I am carrying, as a "once for all" opera-
tion, to the special Fund. On the revenue side, there is the 200 million,
which I have mentioned to the Committee, from the sale of war stores and
war trading receipts. If we substract these terminal items from each side,
the prospective deficit is reduced to 268 million this year, and out of every
1 of expenditure, we shall be paying no less than 18s. 4d. from revenue.
We may, therefore, claim that, if we allow for these terminal items on both
sides of the account, we shall not be very far off a balanced Budget this year.
This I regard as a most remarkable achievement, to be proclaimed not
only in this country, but throughout the world, in countries where too
little is known of what we are doing and what we shall do. It is a great
tribute to the practical capacity of the British people, in the management
both.of their public and of their private affairs, that, in the first year follow-
ing our victory, after six years of long and exhausting war, and with a
Government in power which has deliberately embarked upon a great and
costly program of social betterment, we should so nearly have attained this
goal of traditional financial rectitude. In my view that is something to
boast about.
In 1947-48, and in following years, the choice between having a Budget
surplus and a Budget deficit is in our own hands. Throughout the war.
period, Budget deficits have been inevitable. From now on, as I say, the
choice is in our own hands, and will depend predominantly on our own
decisions in the field of economic and financial planning. As I said last
autumn, we shall aim at balancing the Budget, not year by year, but over
a series of years, making our choice each year according to the state and
prospects of trade and employment and in the light of the general economic
and financial situation. But we shall choose in future. The choice will
not be made for us. We shall choose whether to balance the Budget, or
Whether to incur a deficit, for clearly understood reasons.
THE BUDGET DEFICIT AND THE OVERSEAS DEFICIT
So much for the prospective Budget deficit. It is not so serious as some
have imagined. A much more serious and more anxious problem is
presented by another kind of deficit, by the deficit in our overseas balance
of payments. For the calendar year 1946, I put this deficit at 750
million. It represents, of course, the excess of our overseas expenditure
-mainly on essential imports, but also on the maintenance of troops
abroad and other overseas expenditure of a. miscellaneous character-
over receipts from our exports, visible and invisible.
Here, the special and unique character of our contribution to the
common war effort has strained us very severely. We put everything into
the war effort, and, as a consequence, we are suffering, not from any deep
or permanent disability-far from it, we are pretty healthy in our essen-






The Budget
tial economic life-but, for the moment, from a strain, due to this exten-
sive and unique contribution we made. This deficit cannot disappear
in this year. It will certainly persist, in 1947, and perhaps in 1948. Our
problem is to find ways and means of bridging the gap until we have
fully recovered our strength and restored the flow of our export trade-
which, at the moment, is moving very well. Exports now are rising more
rapidly than some people thought likely. Our good friends and kinsmen
in Canada have granted us a credit, which will be a welcome aid while we
are bridging this gap. We appreciate deeply the spirit in which that aid
is given.
ANGLO-AMERICAN LOAN AGREEMENT
The proposed Anglo-American Loan Agreement is now before the
American Congress; and it would not be proper for me to intervene in that
debate. But it is right for me to emphasize now how greatly we need, and
how greatly we shall appreciate, the proposed measure of assistance, in
order to hasten the time-for this is the purpose of it-when we shall once
again pull our full weight in the expansion of world trade, and when it
will be no longer necessary to restrict imports as closely and as harshly as
was inevitable in time of war. My Budget has been prepared on the
assumption that the Agreement will be approved. Some of the figures I
have used would need to be amended if it failed. If it did fail, we should
at once have to take very vigorous measures to reduce imports, especially
those which have to be paid for in American dollars, and to adapt our
economy, and that of other countries which trade with us, to the changed
situation. This would mean a substantial loss in revenue, and it might be
necessary for me, in that event, to introduce some supplementary financial
proposals.
THE PROSPECT A FEW YEARS AHEAD
If I might return from the Overseas Deficit to the Budget proper, it
may interest the Committee if I now look a little further ahead than the
current year. I have been asked to do that sometimes in these Debates, and
to say something on the probable trends, so far as we can now discern them,
over the next few years. The Budget of 1946-47, as I have explained to
the Committee, is not very far from being balanced, if the more obvious
terminal elements on both sides of the account are excluded. But there
are some items of expenditure which will undoubtedly grow considerably in
the next few years.
I take, in particular, what I might call,the central group of the social
services-education, housing, health services, national insurance and family
allowances, and war pensions. These are the central group of the social
services. They will cost the Exchequer some 500 millions in 1946-47, and
this total is likely to rise to some'700 millions in 1948-49, two years hence,
and, after that, to go on rising, though at a much slower rate. The move-
ment will be from 500 millions to 700 millions in two years, and then
the curvemwill flatten considerably, so far as we can foresee, but it will still rise,
though much more slowly. More than half the increase of 200 millions in
these two years is in the health services, and especially in the new arrange-






British Speeches of the Day [Mn. DALTON]
ments for hospitals, under the bold and constructive National Health
Service Bill of my right hon. Friend the Minister of Health. But, from the
point of view of the Treasury, it is necessary to remember that a great part
of this increased Exchequer contribution to the Health Services is, in fact,
a transfer from the rates to the taxes, and will have to be offset, in large
part at least, by a rearrangement in the relations between the central and
local authorities, by a reduction in the total grants from the Exchequer to
Local Authorities, and by a revision of the Block Grant.
On the other hand, as an offset to the increase which we shall delib-
erately incur in regard to social services, there should be some big savings
in expenditure over the same period. Unless we should be faced by some
serious worsening of international relations, and we hope that will not be
the case, we are entitled to anticipate further substantial reductions in
Defense expenditure. A figure of 500 millions a year in the post-war years
used to be taken as a rough, approximate estimate in the war period, when
the late Sir Kingsley Wood was Chancellor of the Exchequer. In looking
forward to the future, he once offered such a figure, in a speculative spirit,
to the Committee-something of the order of 500 millions a year for
Defense Services, in times of peace. We may not be able to get down as
low as that for a long time; but, leaving out the terminals altogether, the
present expenditure on Defense Services and supplies is more than twice
the figure which Sir Kingsley Wood thought might be proper in times of
peace.
Furthermore, it is of great value to the national finances if we cannot
merely reduce expenditure on defense, but reduce the overseas expenditure
incurred in connection with defense. In a sense, the soldier in this country
costs the Exchequer much less than the soldier overseas, because he repre-,
sents a less severe pressure upon our balance of payments. In any case, my
point is that we are entitled to anticipate, unless some ill befall us, a
substantial reduction in defense expenditure, a reduction at least, I hope, as
large, and, perhaps, substantially larger than the increase in social expen-
diture.
Moreover, we are spending this year no less than 80 millions under the
estimate for the Control Office. This is a large figure. It represents, in
part, the cost of the British civilian administration in the Western Zone of
Germany-the cost not of the military, but of the civil, administration-and,
in part, the cost of the food for the Germans in that Zone. This food costs
us dollars, from our limited reserves. So far, we are getting disappointingly
little in return, and that is a matter which may have to be probed in the
House one of these days. I am quite sure that the British taxpayer cannot,
and should not, much longer be expected to go on paying, on this scale,
what are, in effect, reparations to Germany. Speaking as Chancellor of the
Exchequer, I grudge the money.

CHEAPER MONEY
May I turn to the topic of interest rates? I have frequently declared,
since taking office, and I now once more repeat, that the aim of the Govern-
ment is to cheapen money and to lower rates of interest to the greatest
270






The Budget
extent that economic and financial conditions will permit. In my Budget
speech last October, I was able to announce a cut in short-term rates. The
Treasury bill rate was reduced from one per cent to one-half of one per cent
and the rate on Treasury deposit receipts from one and one-eighth per cent
to five-eighths per cent. Thus the cost of the Floating Debt was cut nearly
in half.- On the 27th November I proposed the repayment of the 21 per
cent Conversion Loan, 1944-49, and of 21 per cent National War Bonds,
194547, offering the holders of these Bonds the option of conversion into
s/4 per cent Exchequer Bonds, 1950. The response was pretty good. It was
sufficiently good to reduce, as I told the House on 7th March, the interest
on the National Debt by a further 31/ million a year. I might add that
in so far as the offer of conversion was not taken up, the floating debt looked
.after the balance, and the interest saving was even greater.
On 15th December I "turned off the taps"-as the City phrase goes-
and stopped the sale of the 21/ per cent National War Bonds, 1954-56, and
the 3 per cent Savings Bonds, 1965-75. Since then, no new tap loan has
been offered.
NATIONAL SAVINGS MOVEMENT
My path for the future has been made much easier by. the splendid
tenacity of the National Savings Movement, to which, once more, I desire
to pay my tribute. Only last week I was, with my right hon. Friend the Mem-
ber for Warwick and Leamington (Mr. Eden), and my right hon. Friend
the Prime Minister, at a most impressive demonstration at the Albert Hall,
where the Movement pledged themselves to find, during this coming year,
520 million of new money in the form of small savings. I regard that as
an exceedingly fine figure, having regard to the relaxation which must
naturally follow the ending of the war. I told them that I would take them
at their word, and write this figure into my Budget Estimates. This massive
contribution, from a great multitude of patriotic and not over-rich citizens,
powerfully fortifies the Treasury and also guards us against the danger of
inflation. It is exceedingly desirable that all thesd hundreds of millions
should be saved at this time, instead of being spent.
With this reinforcement of our finances by the Savings Movement, I
frankly tell the Committee that I shall not need to borrow, from the City
of London and the money market, any very large sums of new money this
year. This means, I am glad to say, that much new money which otherwise
might have been absorbed by Government Loans will now be available to
finance other needs, including those of Local Authorities, of the great
Public Boards, and of the whole range of private industry. All of these,
Local Authorities, Public Boards, and private industrialists, will gain,
equally with the Treasury, from reductions in rates of interest. It is not
sense to pay more for a loan of money than you need.
BRITISH GOVERNMENT CREDIT
Since last October, British Government credit, which already was high
then, judged by the standards of the City, and measured by the yields on
Government stocks, has risen even further. The long-term rate of interest
has already fallen below 3 per cent, and it is still tending to fall. It follows
271






British Speeches of the Day [MR. DALTON)
from this that the 3 per cent Defense Bond is no longer an appropriate
security, and I intend to discontinue the present series at the end of this
month. There are three weeks in which these bonds may still be taken up
at 3 per cent-three precious, fleeting weeks. As from 1st May, there will
be a new offer of Defense Bonds, bearing interest at 21 per cent, but
otherwise on the same terms as the present issue. The maximum individual
holding of Defense Bonds, of all series taken together, will be raised from
1st May, from 2,000 to 2,500. Further, since, as I have already told the
Committee, my need for new money will be so much less this year than
last, I do not propose to issue any new tap loan at present. I intend, how-
ever, to take the first opportunity, on 15th May, to give notice to repay,
on 15th August, the 490 million of the 2 per cent National War Bonds,
1946-1948. Any terms of replacement will be announced later. I have great
faith-and I believe it is justified by facts and events-in the financial
strength and resiliency of Britain. I ask Members in all parts of the Com-
mittee-for this should be above party, and I am sure it is-to support the
Government in our determination to do all we can to register a still further
improvement in the National Credit.

TAX CHANGES-GENERAL
Now I come to an interesting topic, namely, consideration of what
changes, if any, should be made in taxation. The Committee will have'
realized, from what I have said earlier, that we must go slow with further
tax reliefs this year. Until there are more goods in the shops, the risk of
inflation will remain serious. Let us not blink that fact. I must be careful
not to release too great a flow of purchasing power too soon, before there
are goods to absorb it. Particularly, in the next few months, we must be
cautious as to what further tax reductions we provide.. I must remind
the Committee, as, of course, they will recall, that the Income Tax con-
cessions made in my October Budget, which are worth, to those who benefit
from them, no less than 322 million in a full year, have only begun to
take effect three days ago.
The only counter to inflation is to produce more goods. It is with
this object that Ministers, supported, I know, by broad and sober bodies
of public, opinion among organized workers and employers, and other
elements in our community all over the country, are now engaged, both
in propaganda and in practice, in a campaign to increase production. As
I say, the only counter to inflation is to produce more goods, and thus to
increase both the national income and the public revenue. It is against
this" background-the need- to stimulate more production, and the need,
on the other hand, to hold back purchasing power from too precipitate
and premature a release-that we must judge all proposals for further tax
reliefs. We must be cautious, but this does not mean that there is nothing
that can be done, and I will now unfold to the Committee a series of
modest proposals, falling, I believe, within the bounds of prudence.
First, as to Customs and Excise. I will begin with a few quite minor
proposals, none of which appreciably affects the Revenue. The Finance
Bill will, as I promised in my Budget Speech last October, provide for






The Budget
the continuance, until the next Schedule A general revaluation, of the
rebates of liquor license duty provided in the Finance Act, 1942. It will
also provide, for the first time-and this will be good news for travelers-
for the issue of Excise licenses for the sale of liquor and tobacco in air-
craft. That shows what a socialized service can do. I am assured that
there is no danger either to passengers or to pilots, in this change. Theo-
bromine may be known to some Members, but it was not known to me
until my attention was drawn to it. My right hon. Friend the Member
for the Scottish Universities (Sir J. Anderson), my predecessor, will have
met it before, but I did not know that it is a drug, made from cocoa
residues. I propose to remove the title to drawback of cocoa duty Ion
the export of British manufactured theobromine. A Clause in the Finance
Bill will enable British manufacturers to obtain the drawback when they
receive the residues for manufacture, and the drawback on export will
thus become unnecessary. I also propose to remove the statutory prohibi-
tion on the import of coffee essences, and to substitute an import duty.
But no import licenses will be granted for the present.
The existing legislation governing the Key Industry Duties expires
this year. These duties were imposed after the first world wvar to protect
manufactures vital to our war potential. We shall consider, in the light
of recent experience and scientific developments, what changes may be
necessary in these duties. Meanwhile, I propose that they should be ex-
tended in their present form for two years, though we may make some
changes before the end of this period.
The present sugar preference margins expire next August, and I pro-
pose to continue them for a further period of two years. We are pledged
to give 18 months' notice of any change.

PURCHASE TAX
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 Con-
servative predecessors, to be hastily swept away. On the contrary, my
view is that the Purchase Tax has got to stay, and must yield an increasing
revenue over the next few years to help to pay the bill for social better-
ment. Its yield will rise as the production of taxable goods increases. This
tax, in present conditions, not only raises revenue but also absorbs, or
"mops up," as they say in the Treasury, purchasing power, and so helps
to prevent inflation. But, having said these rough words to optimists, I
would add that, following the beginning which I made last October, I
propose, on a carefully selected range of articles, either to remit the Pur-
chase Tax altogether or to reduce the rate ....
I shall also provide, in the Finance Bill, that visitors to this country
froqi abroad including officials on leave from India and from the Colonies,
may buy a British car for use here, free of Purchase Tax, provided they
take it away with them when they leave. Visitors can now bring in a
foreign car, free of Customs Duty and free of Purchase Tax; and I there-
fore propose to remove what I regard as an indefensible discrimination
against British cars, and to put them on the same footing.
273





British Speeches of the Pay [MR. DAL'TONj
It has been represented to me that the charge of Import Duty and
Purchase Tax on legacies of personal effects-I am not now talking of
securities, but of personal effects received from abroad-occasions hardship.
I propose, therefore, to relieve such objects from these charges. I promised
during the discussions on the autumn Finance Bill to go carefully through
the whole range of articles now subject to Purchase Tax, and to consider
how far I could make further concessions. I have done so, and I will
now make to the Committee the following proposals. I propose, first, to
exempt wholly from the Purchase Tax a number of articles, which I will
enumerate in a moment, and, secondly, to reduce the rates of Purchase
Tax upon a further list. Full descriptions of these articles will be found
in the White Paper which will be available in the Vote Office. I will
name them briefly. I propose to remit the Purchase Tax entirely from
the following articles. First, pots and pans; more broadly, articles of pot-
tery, china, glassware, plastics or metal hollow-ware used for the prepara-
tion or serving of food or drink-a wide class of goods. These are now
taxed, in nearly every case, at 16Y per cent. I believe that this remission
will be popular with housewives, particularly now that there are more
pots and pans in the shops. It might have seemed a mockery to tell
people that they would not be taxed on something which they could not
buy. Now that these articles are flowing into the shops in larger quan-
tities, I hope this remission will be helpful to many.
Next I propose to exempt certain articles now taxed at 33Y3 per cent,
the most important-being: kitchen fitments, such as dressers, cupboards,
draining boards and so on. This should reduce the cost, and increase the
convenience, of setting up house.
Mr. Gallacher (Communist): Stoves?
Mr. Dalton: Stoves were freed in the autumn Budget. I propose to
make Utility spring mattresses tax free, to encourage healthy slumber.
Next, Utility woolen blankets. These are a new and welcome venture by
my right hon, and learned Friend the President of the Board of Trade.
When I was President of the Board of Trade I could never persuade the
'Wool Control to make Utility woolen blankets, but he has done better
than I could. We will remit the tax on them. Then come electric kettles;
and at the request of my right hon. Friend the Minister of Fuel and Power,
firebricks and certain other fuel saving devices, designed to encourage
economy in fuel consumption. Next, office machinery-the tax on office
machinery, including typewriters and cash registers, has been represented
as a tax on business efficiency and modern methods, and this remission
will take care of that. Further, I propose to exempt certain items which
are of more limited interest but are important to the people concerned-
sensitized document base paper, mains operated hand lamps, certain rail-
way lamps and public clocks. Finally, I propose to exempt one item now
taxed at 100 per cent, namely, epidiascopes, for the benefit of education-
alists. All the articles which I have mentioned will now be completely
free from tax.
I next propose reductions in the rate of tax as follows: a reduction
from 100 per cent to 33Y per cent on musical instruments, gramophones,
274





The Budget
and gramophone records; on photographic requisites and projectors; on
hair-waving and hair-drying machines-[Laughter]-in which, perhaps, I
should declare that I have no interest; but these are the tools of trade
for hairdressers, including many men and women returning to this honor-
able and artistic calling from the Forces. Next, we have leather cases for
professional use, garden furniture, and, finally, plain wooden walking
sticks. It seems to me to be most unfair that these should be taxed more
heavily, as they were up to now, than umbrellas.
I propose to reduce from 33y per cent to 162S per cent vacuum flasks
and also lawn mowers and garden rollers, in the interests of those who
are interested in their gardens. All these changes will apply to goods de-
livered by registered manufacturers and wholesalers to retailers as from
tomorrow. Many of these articles are still in short supply. The public
should be warned of that, and should realize it. In addition, the clearance
of all tax paid stocks will, of course, take a little time. But, as new supplies
come forward there should be price adjustments on all goods on which
I have announced concessions, whether complete repeal or reduction of
the duty. Most of these goods are subject to price control, and our price
control is pretty good. It would be an offense for a trader to try to pass
on to the purchaser a tax which he had not paid. Therefore, I hope that,
after an interval of time for the clearance of tax paid stocks, many of
these articles will be both cheaper and more plentiful for our consumers.
The total revenue which I shall sacrifice on Purchase Tax will be about
12,000,000 this year, and 15,250,000 in a full year.

ENTERTAINMENTS DuTY
Now I turn to Entertainments Duty. As the Committee knows, there
are two scales of rates of entertainments duty. The lower scale now applies
only to the theatres and to a few other live performances, the higher scale
applies to all other entertainments. I have received many representations
in favor of applying the lower scale to football, cricket and a number
of other sports and I have decided that it is right to do so. I propose that
the lower scale shall now apply to football, cricket, boxing, tennis, ath-
letics, swimming; in short to all outdoor sports-including the University
Boat Race; I could not anticipate that at Question Time-except horse,
motor and dog racing. Horse, motor and dog racing will continue, with
the cinema, to pay at the higher rate. Broadly speaking, practically every-
thing else-those I have mentioned and a number of others that I have
not mentioned-will come down to the lower level. This reduced scale
will be brought into force for all events held on or after 5th May. I should
add that the reduced scale will apply also to indoor games such as billiards
and chess.
I think that these changes will be welcomed in all parts of the Com-
mittee. I have proposed that they should be made because I am very
anxious to help dubs all over the country, especially the football and
cricket dubs, to restore their finances and to improve their facilities, in
the interests of their members and of those whom they employ, and in
the interests of the general public. I hope that, as a result of this con-






British Speeches of the Day [MR. DALTON]
cession, the principal football cubs will be able next season to reduce
their usual price of admission from Is. 6d. to Is. 3d., and that all other
sports clubs and associations, who will gain from the concession, will pass
on part of the benefit to the spectators. Part of the benefit will, of course,
need to be retained by them, to improve their facilities, which have nec-
essarily been neglected during the war years. This concession will cost
1,000,000 this year, and 1,250,000 in a full year. I believe that it is well
worth the money, in the interests of British sport, recreation and physical
fitness.
While still on this topic, may I say that I shall also fulfill the prom-
ise which I made last November to amend the law relating to entertain-
ments provided for a partly educational purpose by nonprofit-making
bodies. At present, exemption is allowed only if the Commissioners of
Customs and Excise are satisfied that, in each particular case, the enter-
tainment has educational value. I propose that in future the test shall
be, not the educational merit of a particular play or a particular film,
but whether the nonprofit-making body which provides the entertainment
has educational aims and activities.

INLAND REVENUE
I now turn to the Inland Revenue. I propose to amend the law re-
garding payments made to charities under what are known as "seven-year
deeds." Under the existing law, those who make such payments escape
both Income Tax and Surtax. Thus, if someone who is liable to Income
Tax and Surtax at the highest rate now ruling makes such a payment,
nominally for charity, he himself pays only 6d. towards each of his con-
tribution, and the Revenue finds the remaining 19s. 6d. The number of
deeds of this type has been increasing year by year, and it is clear that
this state of affairs cannot be allowed to go on. Therefore, I propose,
without changing the provisions regarding Income Tax, to disallow these
payments for Surtax. This provision will not be retrospective, but will
apply to all payments made under any seven-year covenant entered into
from today.
On the other hand, my right hon. Friend the Minister of Education
has suggested to me that it would be helpful to the progress of technical
education if the existing right to Income Tax relief on contributions by
employers toward the current costs of technical colleges were extended to
cover capital contributions also. I therefore propose, in response to her
persuasive arguments, to grant an Income Tax allowance in respect to
such capital contributions made by an employer to a technical college
attended by his own employees. I hope that employers, who are interested
-as I am sure many are-in the advancement of technical studies, will
respond to this inducement.
INCOME TAX
As regards Income Tax, the reliefs announced in my autumn Budget
came into operation only three days ago. They are very substantial. Every
weekly wage earner will become conscious of them this week; he will take






The, Budget
home a heavier pay packet. The Committee will recall that the standard
rate of Income Tax is being reduced from 10s. to 9s. in the ; the per-
sonal allowances are being increased from 80 to 110 a year for a single
person, and from 140 to 180 a year for a married couple; the exemption
limit is being raised from 110 to 120 a year; and the standard rate of
tax is being regraded, so that this year the first 50 of taxable income
will pay only 3s. in the and the next 75 only at 6s. in the . These
changes mean that no less than 2,000,000 people are being exempted from
Income. Tax altogether this year, and that everyone who remains liable
will pay substantially less this year than last. I recall these facts to the
Committee; but I do not propose to go further now in giving examples
of the reliefs given to particular cases, because full particulars are given,
in relation to various incomes, in the White Paper which was, issued with
the autumn Budget. I will not, therefore, repeat the details now. These
tax remissions, only just now coming into operation, will cost the Revenue
283,000,000 this year. Undoubtedly they contain a certain danger of in-
flation; but they were made deliberately, with the approval of this Com-
mittee, in order to provide incentive for, and to remove discouragement
from, large numbers of wage earners.
There is, perhaps, some exaggeration in the stories told of the check
to productive activity due to Income Tax. But we deliberately took a
risk last autumn, and we are facing it now. The only answer is: increased
productive activity and more output. His Majesty's Government rely on
the workers of the country to 'respond, in increased and sustained effort,
to this new stimulus, and to this beginning of the lightening of their
heavy war burden. It is a snare to give people more to spend, unless they
are also given more on which to spend it. I hope that is going to be ac-
complished now.
Clearly; I cannot do a great deal more by way of further immediate
Income Tax relief, but I have one or two more proposals to make to the
Committee. First, I propose to exempt the workers' contributions under
the National Insurance Bill from Income Tax. The law on this matter
is, at present, in a very untidy condition, and one of the purposes I have
in mind is to tidy it up. At the moment, these contributions are not
exempt from Income Tax, though part of the compulsory contribution
relating to widows' and orphans' benefit and to old age pension is given
relief as life insurance. My proposal to exempt all workers' contributions
to National Insurance from Income Tax will give the contributors a
noticeable relief, equivalent, when, the contributions reach their maximum
under the Bill, to an additional allowance of 11 a year. The employers'
contributions are exempt now; they are a trading expense. I should add
that the exemption will extend to self-employed persons on the one hand,
and householders, who employ domestic servants or gardeners, on the
other. My broad intention is to treat all contributions to the National
Insurance Scheme, by whomsoever made, as due deductions for Income
Tax purposes. This concession will cost the Revenue 40,000,000 in a full
year; it is, therefore, substantial. But the full cost will only be felt when
the new and higher rates of contribution become payable. I attach im-
S277






British Speeches of the Day [MR. DALTON]
portance to this fact, because my proposal is a relief, but a postponed
relief, which does not become fully operative until 'we have had a chance
to pick up production and to avoid inflation.
It is a necessary counterpart of this proposal that, apart from lump
sum payments, such as death and maternity benefits, all benefits, and not
merely some, as now, should be assessed for Income Tax. But I must make
it clear that benefits will never, in fact, be reduced by Income Tax, be-
cause they are less than the present Income Tax allowances-and even
these might, in the future, be increased, and will, in fact, be increased
under the provision which I have mentioned as regards contributions.
If earnings cease, no further tax is payable under Pay As You Earn. On
the contrary, there are tax repayments due and the only effect of assessing
the benefit, as I propose to do, will be that the repayment will be sbme-
what less than it would otherwise have been. The effect on the Revenue
this year is negligible.
I have no doubt that the balance of advantage in this arrangement is
wholly with the general body of contributors. The proof of that is that
it is costing the Revenue such a lot of money to do it. It will not apply
either to the benefits or to the contributions under the Industrial Injuries
Bill.
POST-WAR CEDIrs
As to the post-war credits, the Committee will appreciate, from what
I said earlier, why I cannot contemplate as yet any general repayment of
those credits. The total mass of them, more than 800 millions, is a great
inflationary potential which we must hold back for the present. Were we
to release this flood too soon, it would wash away all our defenses against
profiteering and inflation. Moreover, we may well need this- mass of re-
serve purchasing. power in the next year, or two, as an anti-deflationary
corrective, should there be any worsening in the prospects of trade and
employment. But I think the time has come when we can make a small
beginning in the repayment of the Income Tax post-war credits. I pro-
pose that here, following the same sequence of benefits as in the National
Insurance Bill, the old warriors, the veterans of industry, shall march in
front and be the first to draw an installment. This view was expressed in
all parts of the Committee when this matter was debated in October. I
have taken that into account in reaching this conclusion.
I propose to start with a payment to men over 65 and to women over
60. In order to simplify administration as much as possible, I shall not
restrict the payment to old age pensioners, but shall make eligibility de-
pendent on age only. I do this entirely for reasons of administrative sim-
plicity and economy of labor in the Tax Offices. Payments will be made
on application-but no one who does not want his credits need apply; he
can leave them with me-as from 1st September, and will cover the credits,
of those entitled to them, for the three first years of the post-war credit
system, that is to say, 1941-42, 1942-43, and 1943-44. Credits for the two
following years have not been fully calculated, and cannot be for some
time, owning to the very heavy pressure of work in the Inland Revenue
Department. Nor do I wish to go too far at this stage in disbursing, even






The Budget
to the. old people, the credits that are being held in store. They will get
three years' credits on 1st September or soon thereafter. Payments will
be made in cash, not, as we intend to make the general rule when we
are releasing credits in larger quantities, in the form of deposits in savings
banks. But I hope recipients, whenever they reasonably can, will put some
or all of the money into Savings Certificates or some other form of na-
tional savings. I estimate the sum involved in these payments at 26 mil-
lions. This will be found by borrowing-under powers I shall seek in the
Finance Bill-because it is of a nonrecurrent character.

TAXATION OF MARRIED WOMEN
There is another class of taxpayer for whom I am anxious to do some-
thing now, and that is the married women in industry. It is in the national
interest, as the Prime Minister and others have stated, that married women,
who can do so, should enter or remain in industry, particularly for the
next year or two. I am told that Income Tax is acting as a deterrent to
married women from remaining in or taking up industrial work. The
married woman already enjoys a special allowance of 80, in addition to
the married allowance of 180. I propose to increase this special allowance
to 110, the figure at which the single person's allowance now stands. I
think that this change gives better results than the separate assessment,
which is sometimes suggested. A separate assessment would not help in a
great number of these cases; it might, indeed, increase the tax liability of
the married couple. I am satisfied that this is the best way to give assistance,
and I hope every married woman will reflect how this concession will
affect her personally and, wherever possible, will respond to the Govern-
ment's appeal for more volunteers for the production drive. The cost this
year will be 4 millions and slightly more ine a full year.

EARNED INCOME ALLOWANCE
I have one further proposal in the field of Income Tax to make to the
Committee. I can go no further by way of immediate relief; but I am
thinking of the situation six months hence, after six months, as I hope,
of strenuous productive effort by all producers, of a steady increase in the
output of goods, both for the home market and for export, and of steady
decline in the fear of inflation over 'that period. Six months hence summer
will be over. The days will be growing darker and we shall be at the
threshold of another winter. I should like to give a further letup at that
time. Therefore, running some risk, consciously running some risk, but
putting the hope of incentive above the fear of inflation, I propose to
increase the earned income relief allowance of one-tenth to one-eighth,
subject to the present maximum of 150 a year. The allowance of one-
eighth will apply to the whole of this financial year; but, for, the reasons
I have indicated, the benefit will not begin to accrue until October. Until
then, the existing P.A.Y.E. tables, calculated on the basis of one-tenth,
will continue to be used; but in October new tables will come into use
and will automatically adjust the total tax payable to the new basis of
one-eighth for the whole year. The cost of this relief will be 80 millions






British Speeches of the Day [MR. DALTON]
this year and 33 millions in a full year. All those with earned incomes
of less than 1,500 a year will benefit, and this change will relieve a further
350,000 people from all liability to Income Tax. Taking into account,
also, the exemption of National Insurance contributions from Income
Tax and the increase in the allowance for the earnings of married women,
I estimate that the total additional number of persons wholly relieved
from Income Tax by the changes made in this Budget will be about 500-
000 in a full year.
The effect of the reliefs in the autumn Budget, together with the
adjustments of the earned income relief, to which I have just referred,
will be that this year, in the case of earned incomes-looking at the whole
year-no single person with less than 2 8s. a week will pay any Income
Tax; no married couple without children with less than 3 19s. a week-
it is worth while getting married; no couple with one child with less than
5 Is. a week; no couple with three children with less than 7 5s. a'week;
and no couple with five children with less than 9 9s. a week. I give three
further examples, hoping that I shall illustrate the point, without wearying
the Committee with excessive statistics. A single person earning 300 a
year will, this year, pay only 42 7s. 6d. as against 66 2s. 6d. last year. A
married couple, without children, having an earned income of 400 will
pay only 50 5s. this year as compared with 81 2s. 6d. last year. And a
married couple with two children and an earned income of 600 a year
will pay only 84 this year as against 121 2s. 6d. last year. Next year,
allowing, in addition, for the exemption of the National Insurance con-
tributions, these reliefs will be even larger.

EXCESS PROFITS TAX AND NATIONAL DEFENSE CONTRIBUTION
So much for Income Tax. I now turn to E.P.T. and N.D.C. Last
autumn I proposed a reduction in the rate of E.P.T. to 60 per cent as
from 1st January this year, and I made provision for the early repayment
of the 20 per cent E.P.T. post-war refund, in order to assist industry to
reconvert and re-equip itself. The Committee will be glad to know that
these refunds, amounting to about 250 million altogether after deduction
of Tax, are already being paid to the industrialists entitled to them. Since
the autumn I have been considering the future of these taxes. I said
then the
"E.P.T. at the rhte of 100 per cent is the perfect tax for a short war"-
and I believe that still-
"but as the war period lengthens and, still more, as we enter upon the postwar period,
this tax works against incentive and against efficiency,"
even when the rate is less than 100 per cent, as it is now. Further reflec-
tion has not weakened my opinion on this matter. I now propose to repeal
E.P.T. as from 31st December next.
This repeal will cost me nothing this year, because we shall still be
collecting tax at 100 per cent on the profits of 1945. It will cost very little
next year, because we shall be collecting at 60 per cent on the profits of
1946. It will cost me more perhaps, 150 millions gross, in 1948-49, when






The Budget
we shall be collecting nothing except arrears from earlier years. This
estimate takes into account the fact that the yield from E.P.T. would,
in any case, be running down during these years, with the gradual cessation
of profits due to war contracts. Further, as the Committee understands,
for every 1 I lose through the reduction of the rate or total repeal, I
get 10s. back in Income Tax and Surtax; and the net cost, in 1948-49, of
repeal will not, therefore, exceed 75 millions. This repeal has been asked
for by industry. I hope, therefore, that it will stimulate private enterprise
to put its best foot forward, and to go flat out on an expansionist course.
Turning to ND.C., I propose to retain that at the present rate, but
to change its name from National Defense Contribution, which is no
longer very apposite, to the "Profits Tax." E.P.T. will disappear, and
N.D.C. will in future be known as the Profits Tax. It is a flat tax of Is.
in the on all profits prior to distribution. With the termination of
E.P.T. it should bring me in about 50 millions a year. It is not open
to the strong objection that can be urged against E.P.T.
As I propose that E.P.T. shall come to an end this year, I am including
in the Finance Bill appropriate provisions dealing with terminal losses-
allowance for deferred repairs and renewals, Post-E.P.T. expenditure on
the rehabilitation of industry to a peacetime footing, and falls in stock
values. I propose also to fix the date at which the provisions relating to
exceptional depreciation are to come into operation.
I have carefully considered whether, while repealing E.P.T., I should
either increase N.D.C. or introduce some new tax on profits or on excess
dividends. Upon this I have not yet reached a final decision. Nor is it
necessary for me to do so this year, in order to replace lost revenue. Even
if I were to decide to make good, by a new tax on profits, the whole of
the loss from the repeal of E.P.T., it would not be necessary for me to
make legislative provision until next year's Budget, for the reasons I have
been explaining to the Committee. I shall continue, during the coming
year, to study this and other possibilities of new taxes, of which a great
variety has been suggested to me. Human nature is most inventive with
regard to new taxes.
SI shall be guided in my decision next year, as to whether or not to
impose such a tax, by a number of considerations-by the general budgetary
and financial situation to a large extent, and, to some extent, by the con-
duct of private enterprise ift the meantime. I can assure the right hon.
Members for Aldershot (Mr. Lyttelton) that I shall be so guided. Last
autumn, I expressed the view that post-war development should come
before increased dividends, and I invited industry to plough back in-
creased profits rather than to distribute them to shareholders. The res-
ponse to this invitation has been very patchy. Many of the most efficient
and, up to date concerns have responded very well; but others have shown
a tendency to chuck money about among the shareholders, rather than
to strengthen their reserves and improve their equipment. Therefore, it
would be premature for me to decide now whether or not, next year, it
would be in the general interests to introduce a new tax, designed to check
these, as I think, unfortunate practices.
281






British Speeches of the Day [MN. DALTONJ
DEATH DUTIES
I have also been giving some consideration to the Death Duties. I have
been having a good look in particular at the Estate Duty, which, as the
Committee knows, is by far the most important of the Death Duties, bring-
ing in some'90 per cent of the total Death Duty revenue. The Estate Duty
was first introduced by Sir William Harcourt, that most gifted and attrac-
tive Victorian Radical, in his historic Budget of 1894. His scale started
at one per cent on estates between 100 and 500. This part of the scale,
it is extraordinary to relate, indeed, the whole scale up to 5,000, has re-
mained unchanged from that day to this. Sir William Harcourt's scale
rose to a maximum of 8 per cent on estates over 1,000,000. The history
of the Estate Duty since then has been one of continuous increase. The
rates of duty were increased by Mr. Asquith in 1907, by Mr. Lloyd George
in 1909 and again in 1914, by Sir Austen Chamberlain in 1919, by the
right hon. Member for Woodford (Mr. Churchill) in 1925, by Mr. Philip
Snowden in 1930, by Sir John Simon in 1939, and by Sir Kingsley Wood
in 1940. All these successive increases have brought the scale up to a maxi-
mum of 65 per cent on estates over 2,000,000. The most notable of them
was that imposed by Sir Austen Chamberlain in 1919, in the first post-war
Budget after the last great war, the opposite number to this one. Sir Austen
Chamberlain increased the Estate Duty on estates over 2 millions. He
doubled it by increasing it from 20 per cent to 40 per cent.
All these illustrious predecessors of mine, whenever they have touched
Estate Duty, have touched it only to increase it. None of them has ever
reduced it. I propose to break with this long tradition as regards the
smaller estates, but faithfully follow it as regards the larger. A moderate
inheritance is a reasonable provision for the widow and dependents of
the deceased. We should seek to secure this possibility for all. An im-
moderate inheritance, on the other hand, seems to me to serve no good
social purpose, and even to look somewhat unseemly in these modern
days. It is leading a man into very great temptation to dangle before him
the prospect, while he waits for a dead man's shoes, of an enormous un-
earned increment of his fortune. Unless that man has an unusually strong
character, he will be tempted to become lazy and thriftless, unambitious
and unenterprising. Was it not H. G. Wells who once said, in what I
thought to be a most penetrating characterization:
"No energetic, directive people can be deeply in love with inhRtance. It is a fatty
degeneration of property."
In the light of these observations which, I hope, will win general ac-
ceptance, I propose to raise the exemption limit for Estate Duty from
100 to 2,000. No estate of less than 2,000 will pay Estate Duty any
more. I further propose to regrade the Duty so that all estates from 2,000
to 7,500 are partly relieved; estates from 7,500 to 12,500 pay as at pres-
ent; and estates above 12,500 pay more than at present, on a scale rising
gently up to a maximum of 75 per cent, as against the present 65 per cent,
on estates of 2,000,000 and over. The results of this regrading are very
remarkable. The total number of people who die each year is about 600,000.
Of these, only about 200,000-one in three-leave property which even now
282






The Budget
is subject to Estate Duty. As a result of the changes which I am proposing,
150,000 out of the 200,000 estates now liable-75 per cent of the whole-
will be entirely relieved. This change, taken alone, will cost the Revenue
only 2 millions, out of a total yield from the Estate Duty of over 100
millions. To repeat-of the 200,000 estates now liable, 150,000 will be
wholly free. Of the 50,000 which will still be liable, more than 30,000
will have their liability reduced, and the charge on rather less than 7,000
more will remain unaltered. The increased duty, therefore, will apply only
to about 10,000 estates, or 5 per cent of the whole number. . .
On the other hand, the total amount of capital now becoming liable
to Duty each year is about 680 millions. Of this sum, only some 94
millions-about 14 per cent of the total-falls in the range of estates which,
henceforward, will be wholly exempt from Duty. But no less than 396
millions-nearly 60 per cent of the total-belongs to those estates which
will pay a higher Duty. An estate of 2,000,000, having paid Estate Duty
on the new scale of 75 per cent, would still leave 500,000 to the fortunate
heirs of the deceased. They should be able to keep out of harm's way
on that.
These changes in the Estate Duty will operate from tomorrow. Taken
together, they will give an additional yield, from the Duty thus remodeled,
of 15 million this year and 22 millions in a full year.
I propose also to extend the period in which gifts inter vivos are liable
to Dutyi from three years, with one year for charities, to five years, with
two years for charities. In my first Budget speech, last October, I said that
I regarded it as part of the mission of this Government, and of the great
Parliamentary majority which sustains it, representing an awakened and
war-scarred generation, to dose, from both ends, the gap which separates
the standard of living of the great mass of our fellow citizens from that
of a small privileged minority. I think that this rearrangement of the
Death Duties is in harmony with that idea.

1946-47 OUT-TUBN
What is the final effect of these changes in taxation upon the balance
sheet for 1946-47? The concessions on Purchase Tax and Entertainments
Duty will cost about 13,000,000 this year. The increases in the Earned
Income relief and the special allowance for the earnings of married women
will cost a further 34,000,000. To offset this total of 47,000,000, there
will be some 15,000,000 of additional revenue from the Estate Duties.
There is thus a net loss of revenue of 32,000,000. The total revenue
should, therefore, amount to 3,161,000,000, as against an expenditure
estimated at 3,887,000,000. The deficit will thus be about 726,000,000.
But, if we subtract from each side the terminal items which I have men-
tioned earlier, the deficit is reduced to only 300,000,000; and, on that
basis, we shall still be paying-after these tax remissions and adjustments-
out of every 1 of expenditure not less than 18s. 2d. from revenue. I
regret that it has been necessary to speak in this degree of detail; but I
thought it would be the wish of the Committee that these figures should
be deployed at full length, on this first full year of the post-war period.
283






British Speeches of the Day [MN. DALTON)
NATIONAL LAND FUND
Finally, I have a word to say about the land, and about the special fund
to which I have already referred. In 1909, 37 years ago, David Lloyd
George introduced a famous Budget. Liberals in those days sang the "Land
Song"-"God gave the land to the people." I think that the right hon.
Member for Woodford (Mr. Churchill) used to sing that song.
The Leader of the Opposition (Rt. Hon. Winston Churchill): I shall
sing it again.
Mr. Dalton: Then I hope for the right hon. Gentleman's full support in
the proposals I am about to make. The strains of that song have long
since died away. But much land has passed, since then, from private into
public ownership and it is the declared policy of the Labor Party that much
more should so pass, and that the principle of the public ownership of land
should be progressively applied. There remains on the Statute Book one
Section of the famous Finance Act of the late David Lloyd George which
is of present day interest and importance in this connection. Section
56 of the Finance (1909-10) Act, 1910-I will not trouble the Committee
with its wording in full-provides that, when the Executors and the Com-
missioners of Inland Revenue agree, Death Duties may be paid by the
handing over of the land instead of cash. . .
I propose that, from now on, much more use should be made of this
power to accept land in payment of Death Duties. Even as the law stands,
much can be done. I have instructed the Inland Revenue to keep a
constant watch for suitable instances, and to suggest this possibility to
Executors, particularly where landowners are embarrassed by the burden
of their estates in relation to their liabilities.
Further, to fortify this provision, I propose, as I indicated earlier in my
speech, to carry 50 millions in this coming year-due to the sale of war
stores-to a special Fund, to be called the National Land Fund. It will be
available for a variety of purposes, all designed to increase the National
Estate.
I do not expect that this Fund will all be spent for some years to come.
It will be a convenient reserve against any operations which it may seem to
be in the public interest to undertake in this connection. Any balance in
the Fund will be lent to the Treasury at a suitable rate of interest.
We shall use this Fund in various ways. In some cases, where payment
of Death Duties is made in land, it may be in the public interest that that
land should be transferred to some nonprofit-making body which may not
have the money with which to purchase it. The National Trust may be
such a body, or the Youth Hostels Association. There are other examples.
In such cases the National Land Fund would be used to reimburse, wholly
or in part, the Inland Revenue.
The necessary provision, up to this point, will be made in the Finance
Bill. But I do not intend to stop there. In consultation with my right hon.
Friends the Secretary of State for Scotland and the Minister of Town and
Country Planning, I have been considering future possibilities, including
the creation of National Parks and the acquisition for the public of






The Budget
stretches of coast and tracts of open country. Legislation will be required
for these further advances, and for using the Fund, in other selected cases,
to cover the cost of acquisition, whether voluntary or compulsory, of land
which, in our view, should be publicly owned.
The Fund might well be used to help such bodies as the National Trust,
the Youth Hostels Association, the Ramblers' Associations and many other
such societies whose purpose is not to make profit but to open the country
to the people and to facilitate recreation, open-air sport and physical fitness.
We regard all these bodies as friends of the public interest, as good supports
of the commonwealth, and we desire to help them. We propose, following
upon the announcement I have made today, to take counsel with them in
due course.
There is still wonderful beauty to be found in our country. Much of it
has been spoiled and ruined beyond repair, but we still have a great wealth
and variety of natural scenery in this land. The best that remains should
surely become the heritage, not of a few private owners, but of all our
people, and above all, of the young and the fit, who shall find increased
opportunities of health and happiness, companionship and recreation, in
beautiful places. There is still a wonderful, incomparable beauty in Britain,
in the sunshine on the hills, the mists adrift across the moors, the deep
peace of the woodlands, and the wash of the waves against the white, uncon-
querable cliffs which Hitler never scaled. There is beauty and history in
these things. It is surely fitting, in this proud moment of our history, when
we are celebrating victory and deliverance from overwhelming evils and
horrors, that we should make of this Fund a thank-offering for victory, and
a war memorial which, in the judgment of many, is better than any work
of art in stone or bronze. I should like to think that through this Fund
we shall dedicate some of the loveliest parts of this land to the memory
of those who died in order that we might live in freedom, those who for
our sake went down to the dark river, those for whom "the trumpets have
already sounded on the other side." In this way, let this land of ours be
dedicated to the memory of our dead, and to the use and enjoyment of
the living forever.
[House of Commons Debates]



IRON AND STEEL INDUSTRY (GOVERNMENT
PROPOSALS)
HousE OF COMMONS, April 17, 1946

The Minister of Supply (Mr. John Wilmot): The House will remember
that on 19th November, 1945, in announcing the Government's plans for
the socialization of industries, the Lord President of the Council stated that
the Coalition Government had invited the iron and steel industry to submit
a report on the improvements required to put the industry on an efficient
operating basis, and that His Majesty's Government proposed to await this






'British Speeches of the Day [MR. WILMOT]
report before taking final decisions on the future organization of the iron
and steel industry. A report prepared by the British Iron and Steel Feder-
ation was received and has been considered. It set out plans for the devel-
opment and modernization of the industry over the next five to seven years
at an estimated cost of 168,000,000. Proposals were also made to effect
a certain rationalization of production in order to achieve maximum plant
efficiency. Reports have also been received from the Joint Iron Council
dealing with the foundry iron and iron foundry sides of the industry. The
Government welcome these reports as an important contribution to the
planned development of this basic industry.
After full consideration the Government have reached the conclusion
that the position of the industry and its importance in the national economy
necessitate a large measure of public ownership and that legislation for
this purpose should be prepared. Meanwhile, immediate discussion will
take place to ensure that urgent modernization and development schemes
are carried through without delay. The Government are anxious to secure
the utmost co-operation of both managements and workers during the
period which will be necessary for the preparation and putting into effect
of the scheme of public ownership. For this period I propose to establish
a Control Board. This Board will replace the existing Iron and Steel
Control, and will be responsible to me for the general control and super-
vision of the industry. The Board will pay special attention, in consulta-
tion with the industry, to facilitating the early execution of the urgent
development schemes. The Board will also act as my advisers on questions
arising in the preparation of the scheme of nationalization, including the.
definition of the sections of the industry to be taken into public ownership.
[louse of Commons Debates]



NATIONAL HEALTH SERVICE BILL
HousE OF COMMONS, April 30, 1946

The Minister of Health (Rt. Hon. Aneurin Bevan): I beg to move,
"That the Bill be now read a Second time."
In the last two years there has been such a clamor from sectional interests
in the field of national health that we are in danger of forgetting why these
proposals are brought forward at all.. It is, therefore, very welcome to me-
and I am quite certain to hon. Members in all parts of the House-that
consideration should now be given, not to this or that sectional interest,
but to the requirements of the British people as a whole. The scheme
which anyone must draw up dealing with national health, must necessarily
be conditioned and limited by the evils it is intended to remove. Many
of those who have drawn up paper plans for the health services appear
to have followed the dictates of abstract principles, and not the concrete
requirements of the actual situation as it exists. They drew up all sorts
of tidy schemes on paper, which would be quite inoperable in practice.






National Health Service Bill
The first reason why a health scheme of this sort is necessary at all is
because it has been the firm conclusion of all parties that money ought not
to be permitted to stand in the way of obtaining an efficient health service.
Although if is true that the national service insurance system provides a
general practitioner service and caters for something like 21 million of the
population, the rest of the population have to pay, whenever they desire
the services of a doctor. It is cardinal to a proper health organization that a
person ought not to be financially deterred from seeking medical assistance
at the earliest possible stage. It is one of the'evils of having to buy medical
advice that, in addition to the natural anxiety that may arise because people
do not like to hear unpleasant things about themselves, and therefore tend
to postpone consultation as long as possible, there is the financial anxiety
caused by having to pay doctors' bills. Therefore, the first evil that we
must deal with is that which exists as a consequence of the fact' that the
whole thing is the wrong way round. A person ought to be able to receive
medical and hospital help without being involved in financial anxiety.
In the second place, the National Insurance scheme does not provide
for the self-employed, nor, of course, for the families of dependents. It
depends on insurance qualification, and, no matter how ill You are, if you
cease to be insured you cease to have free doctoring. Furthermore, it gives
no backing to the doctor in the form of specialist services. The doctor has
to provide, himself, he has to use his own discretion and his own personal
connections, in order to obtain hospital treatment for his patients and in
order to get them specialists, and in very nany cases, of course-in an over-
whelming number of cases-the services of a specialist are not available to
poor people.
FACILITIES AND SERVICES Too LIMITED
Not only is this the case, but our hospital organization has grown up
with no plan, with no system; it is unevenly distributed over the country,
and indeed it is one of the tragedies of the situation that very often the
best hospital facilities are available where they are least needed. In the
older industrial districts of Great Britain hospital facilities are inadequate.
Many of the hospitals are too small-very much too small. About 70 per
cent have less than 100 beds, and over 30 per cent have less than 30. No
one can possibly pretend that hospitals so small can provide general hospital
treatment. There is a tendency in some quarters to defend the very small
hospital on the ground of its localism and intimacy, and for other rather
imponderable reasons of that sort, but everybody knows today that if a
hospital is to .be efficient it must provide a number of specialized services.
Although I am not myself a devotee of bigness for bigness' sake, I would
rather be kept alive in the efficient if cold altruism of a large hospital than
expire in a gush of warm sympathy in a small one.
In addition to these defects, the health of the people of Britain is not
properly looked after in one or two other respects. The condition of the
teeth of the people of Britain is a national reproach. As a consequence of
dental treatment having to be bought, it has not been demanded on a scale
to stimulate the creation of sufficient dentists, and in consequence there is
287.






British Speeches of the Day [Mn. BEVAN]
a woeful shortage of dentists at the present time. Furthermore, about 25
per cent of the people of Great Britain can obtain their spectacles and get
their eyes tested and seen to by means of the assistance given by the
approved societies, but the general mass of the people have not such facili-
ties. One of the evils from which this country suffers is the fact that
sufficient attention has not been given to deafness, and hardly any attention
has been given so far to the provision of cheap hearing aids and their
proper maintenance. I hope to be able to make very shortly a welcome
announcement on this question.

MENTAL HEALTH
One added disability from which our health system suffers is the isola-
tion of mental health from the rest of the health services. Although the
present Bill does not rewrite the Lunacy Acts-we shall have to come to
that later on-nevertheless, it does, for the first time, bring mental health
into the general system of health services. It ought to be possible, and
this should be one of the objectives of any civilized health service, for a
person who feels mental distress, or who fears that he is liable to become
unbalanced in any way, to go to a general hospital to get advice and assist-
ance, so that the condition may not develop into a more serious stage. All
these disabilities our health system suffers from at the present time, and
one of the first merits of this Bill is that it provides a universal health
service without any insurance qualifications of any sort. It is available to
the whole population, and not only is it available to the whole population
freely, but it is intended, through the health service, to generalize the best
health advice and treatment. It is intended that there shall be no limita-
tion on the kind of assistance given-the general practitioners' service, the
specialist, the hospitals, eye treatment, spectacles, dental treatment, hearing
facilities, all these are to be made available free.
There will be some limitations for a while, because we are short of
many things. We have not enough dentists and it will therefore be neces-
sary for us, in the meantime, to give priority treatment to certain classes-
expectant and nursing mothers, children, school children in particular and
later on we hope adolescents. Finally we trust that we shall be able to
build up a dental service for the whole population. We are short of nurses
and we are short, of course, of hospital accommodation, and so it will be
some time before the Bill can fructify fully in effective universal service.
Nevertheless, it is the object of the Bill, and of the scheme, to provide this
as soon as possible, and to provide it universally.
Specialists will be available not only at institutions but for domiciliary
visits when needed. Hon. Members in all parts of the House know from
their own experience that very many people have suffered unnecessarily
because the family has not had the financial resources to call in skilled
people. The specialist services, therefore, will not only be available at the
hospitals, but will be at the back of the general practitioner should he need
them. The practical difficulties of carrying out all these principles and
services are very great. When I approached this problem, I made up my
mind that I was not going to permit any sectional or vested interests to






National Health Service Bill
stand in the way of providing this very valuable service for the British
people.
VOLUNTARY HOSPITALS
There are, of course, three main instruments through which it is intended
that the Health Bill should be worked. There are the hospitals; there are
the general practitioners; and there are the health services. The hospitals
are in many ways the vertebrae of the health system, and I first examined
what to do with the hospitals. The voluntary hospitals of Great Britain
have done invaluable work. When hospitals could not be provided by any
other means, they came along. The voluntary hospital system of this
country has a long history of devotion and sacrifice behind it, and it would
be a most frivolously minded man who would denigrate in any way the
immense services the voluntary hospitals have rendered to this country.
But they have been established often by the caprice of private charity.
They bear no relationship to each other. Two hospitals close together
often try to provide the same specialist services unnecessarily, while other
areas have not that kind of specialist service at all. They are, as I said
earlier, badly distributed throughout the country. It is unfortunate that
often endowments are left to finance hospitals in those parts of the country
where the well-to-do live while, in very many other of our industrial and
rural districts, there is inadequate hospital accommodation. These volun-
tary hospitals are, very many of them, far too small, and therefore to leave
them as independent units is quite impracticable.
Furthermore-I want to be quite frank with the House-I believe it is
repugnant to a civilized community for hospitals to have to rely upon
private charity. I believe we ought to have left hospital flag-days behind.
I have always felt a shudder of repulsion when I have seen nurses and
sisters who ought to be at their work, and students who ought to be at
their work, going about the streets collecting money for the hospitals. I do
not believe there is an hon. Member of this House who approves that
system. It is repugnant, and we must leave it behind-entirely. But the
implications of doing this are very considerable.

VOLUNTARY HOSPTrAL FINANCE
I have been forming some estimates of what might happen to voluntary
hospital finance when the all-in insurance contributions fall to be paid by
the people of Great Britain, when the Bill is passed and becomes an Act,
and they are entitled to free hospital services.* The estimates I have go to
show that between 80 per cent and 90 per cent of the revenues of the
voluntary hospitals in these circumstances will be provided by public funds,
by national or rate funds. [An HON. MEMBER: "By workers' contributions."]
And, of course, as the hon. Member reminds me, in very many parts of the
country it is a travesty to call them voluntary hospitals. In 'the mining
districts, in the textile districts, in the districts where there are heavy indus-
tries it is the industrial population who pay the weekly contributions for
the maintenance of the hospitals. When I was a miner I used to find that
situation, when I was on the hospital committee. We had an annual






British Speeches of the Day [MR. BEVAN]
meeting and a cordial vote of thanks was moved and passed with great
enthusiasm to the managing director of the colliery company for his gene-
rosity towards the hospital; and when I looked at the balance sheet, I saw
that 974 per cent of the revenues were provided by the miners' own contri-
butions; but nobody passed a vote of thanks to the miners.
Major Guy Lloyd (Conservative): What was the right hon. Gentleman
doing?
Mr. Bevan: I can assure the hon. and gallant Member that I was no
more silent then than I am now. But, of course, it is a misuse of language
to call these "voluntary hospitals." They are not maintained by legally
enforced contributions, but, mainly, the workers pay for them because they
know they will need the hospitals, and they are afraid of what they would
have to pay if they did not provide them. So it is, I say, an impossible
situation for the State to find something like 90 per cent of the revenues
of these hospitals and still to call them "voluntary." So I decided, for this
and other reasons, that the voluntary hospitals must be taken over.

GROUPED HOSPITAL SERVICES
I knew very well when I decided this that it would give rise to very
considerable resentment in many quarters, but, quite frankly, I am not
concerned about the voluntary hospitals' authorities: I am concerned with
the people whom the hospitals are supposed to serve. Every investigation
which has been made into this problem has established that the proper
hospital unit has to comprise about 1,000 beds-not in the same building
but, nevertheless, the general and specialist hospital services can be provided
only in a group of that size. This means that a number of hospitals have
to be pooled, linked together, in order to provide a unit of that sort. This
cannot be done effectively if each hospital is a separate, autonomous body.
It is proposed that each of these groups should have a large general hospital,
providing general hospital facilities and services, and that there should be a
group round it of small feeder hospitals. Many of the cottage hospitals
strive to give services that they are not able to give. It very often happens
that a cottage hospital harbors ambitions to the hurt of the patients, because
they strive to reach a status that they never can reach. In these circum-
stances, the welfare of the patients is sacrificed to the vaulting ambitions
of those in charge of the hospital. If, therefore, these voluntary hospitals
are to be grouped in this way, it is necessary that they should submit them-
selves to proper organization, and that submission, in our experience, is
impracticable if the hospitals, all of them, remain under separate manage-
ment.
THE RECEIVER OF VOLUNTARY HOsPITALS
Now, this decision to take over the voluntary hospitals meant that I
then had to decide to whom to give them. Who was to be the receiver?
So I turned to an examination of the local government hospital system.
Many of the local authorities in Great Britain have never been able to
exercise their hospital powers. They are too poor. They are too small.
Furthermore, the local authorities of Great Britain inherited their hospitals






National Health Service Bill
from the Poor Law, and some of them are monstrous buildings, a cross
between a workhouse and a barracks-[An HON. MEMBER: "And a prison."]
-qr a prison. The local authorities are helpless in these matters. They
have not been able to afford much money. Some local authorities are first
class. Some of the best hospitals in this country are local government
hospitals. But, when I considered what to do with the voluntary hospitals
when they had been taken over, and who was to receive them, I had to
reject the local government unit, because the local authority area is no
more an effective gathering ground for the patients of the hospitals than
the voluntary hospitals themselves. My hon. Friend said that some of them
are too small, and some of them too large. London is an example of being
too small and too large at the same time.
It is quite impossible, therefore, to hand over the voluntary hospitals
to the local authorities. Furthermore-and this is an argument of the
utmost importance-if it be our contract with the British people, if it be
our intention that we should universalize the best, that we shall promise
every citizen in this country the same standard of service, how can that be
articulated through a rate-borne institution which means that the poor
authority will not be able to carry' out the same thing at all? It means
that once more we shall be faced with all kinds of anomalies, just in those
areas where hospital facilities are most needed, and in those very conditions
where the mass of the poor people will be unable to find the finance to
supply the hospitals. Therefore, for reasons which must. be obvious-
because the local authorities are too small, because their financial capacities
are unevenly distributed-I-decided that local authorities could not be
effective hospital administration units. There are, of course, a large number
of hospitals in addition to the general hospitals which the local authorities
possess. Tuberculosis sanatoria, isolation hospitals, infirmaries of various
kinds, rehabilitation, and all kinds of other hospitals are all necessary in a
general hospital service. So I decided that the only thing to do was to
create an entirely new hospital service, to take over the voluntary hospitals,
and to take over the local government hospitals and to organize them as a
single hospital service. If we are to carry out our obligation and to provide
the people of Great Britain, no matter where they may be, with the same
level of service, then the nation itself will have to carry the expenditure,
and cannot put it upon the shoulders of any other authority.

THE REGIONAL HOSPITAL ORGANIZATION
A number of investigations have been made into this subject from time
to time, and the conclusion has always been reached that the effective hospi-
tal unit should be associated with the medical school. If you grouped the
hospitals in about 16 to 20 regions around the medical schools, you would
then have within those regions the wide range of disease and disability
which would provide the basis for your specialized hospital service. Fur-
thermore, by grouping hospitals around the medical schools, we should be
providing what is very badly wanted, and that is a means by which the
general practitioners are kept in more intimate association with new medical
thought and training. One of the disabilities, one of the shortcomings of






British Speeches of the Day [MR. BEVAN)
our existing medical service, is the intellectual isolation of the general prac-
titioners in many parts of the country. The general practitioner, quite
often, practices in loneliness and does not come into sufficiently intimate
association with his fellowcraftsmen and has not the stimulus of that asso-
ciation, and in consequence of that the general practitioners have not got
access to new medical knowledge in a proper fashion. By this association
of the general practitioner with the medical schools through the regional
hospital organization, it will be possible to refresh and replenish the fund
of knowledge at the disposal of the general practitioner.
This has always been advised as the best solution of the difficulty. It
has this great advantage to which I call the close attention of hon. Members.
It means that the bodies carrying out the hospital services of the country
are, at the same time, the planners of the hospital service. One of the
defects of the other scheme is that the planning authority and executive
authority are different. The result is that you get paper planning or bad
execution. By making the regional board and regional organization respon-
sible both for the planning and the administration of the plans, we get a
better result, and we get, from time to time, adaptation of the plans by the
persons accumulating the experience in the course of their administration.
The other solutions to this problem which I have looked at all mean that
you have an advisory body of planners in the background who are not able
themselves to accumulate the experience necessary to make good planners.
The regional hospital organization is the authority with which the special-
ized services are to be associated, because, as I have explained, this special-
ized service/can be made available for an area of that size, and cannot be
made available over a small area. When we come to an examination of
this in Committee, I daresay there will be different points of view about
the constitution of the regional boards.

REGIONAL BOARDS
It is not intended that the regional boards should be conferences of
persons representing different interests and different organizations. If we
do that, the regional boards will not be able to achieve reasonable and effi-
cient homogeneity. It is intended that they should be drawn from members
of the profession, from the major public health authorities in the area, from
the medical schools and from those who have long experience in voluntary
hospital administration. While leaving ourselves open to take the best sort
of individuals on these hospital boards which we can find, we hope before
very long to build up a high tradition of hospital administration in the
Boards themselves. Any system which made the boards conferences, any
proposal which made the representatives delegates, would at once throw
the hospital administration into chaos. Although I am perfectly prepared
and shall be happy to co-operate with hon. Members in all parts of the
House in discussing how the boards should be constituted, I hope I shall
not be pressed to make these regional boards merely representative of
different interests and different areas. The general hospital administration,
therefore, centers in that way.





National Health Service Bill


THE POSITION OF THE GENERAL PRACTITIONER
When we come to the general practitioners we are, of course, in an
entirely different field. The proposal which I have made is that the general
practitioner shall not be in direct contract with the Ministry of Health,
but in contract with new bodies. There exists in the medical profession a
great resistance to coming under the authority of local government-a great
resistance, and with which I to some extent sympathize. There is a feeling
in the medical profession that the general practitioner would be liable to
come too much under the medical officer of health, who is the administrative
doctor. This proposal does not put the doctor under the local authority;
it puts the doctor in contract with an entirely new body-the local executive,
coterminous with the public health area, county or county borough. On
that local executive, the dentists, doctors and chemists will have half the
representation. In fact, the whole scheme provides a greater degree of
professional representation for the medical profession than any other
scheme I have seen.
I have been criticized in some quarters for doing that. I will give the
answer now: I have never believed that the demands of a democracy are
necessarily satisfied merely by the opportunity of putting a cross against
someone's name every four or five years. I believe that democracy exists
in the active participation in administration and policy. Therefore, I
believe that it is a wise thing to give the doctors full participation in the
administration of their own profession. They must, of course, necessarily
be subordinated to secular control-we do not want the opposite danger
of syndicates. Therefore, the communal interests must always be safe-
guarded in this administration. The doctors will be in contract with an
executive body of this sort. One of the advantages of that proposal is that
the doctors do not become-as some of them'have so wildly stated-civil
servants. Indeed, one of the advantages of the scheme is that it does not
create an additional civil servant.
It imposes no constitutional disability upon any person whatsoever.
Indeed, by taking the hospitals from the local authorities and putting them
under the regional boards, large numbers of people will be enfranchised
who are now disfranchised from participation in local government. So far
from this being a huge bureaucracy with all the doctors little civil servants
-the slaves of the Minister of Health, as I have seen it described-instead
of that, the doctors are under contract with bodies which are not under
the local authority, and which are, at the same time, ever open to their
own influence and control.
One of the chief problems that I was up against in considering this
scheme was the distribution of the general practitioner's service throughout
the country. The distribution, at 'the moment, is most uneven. In South
Shields before the war there were 4,100 persons per doctor; in Bath 1,590;
in Dartford nearly 3,000 and in Bromley'1,620; in Swindon 3,100; in
Hastings under 1,200. That distribution of general practitioners throughout
the country is most hurtful to the health of our people. It is entirely
unfair, and, therefore, if the health services are to be carried out, there
293






British Speeches of the Day [MR. BEVAN)

must be brought about a redistribution of the general practitioners through-
out the country.
THE DISTrIUTION oF G. P.s
Captain Crowder (Conservative): Does that mean the number on the
panel or the population?
Mr. Bevan: The population. Indeed, I could amplify those figures a
good deal, but I do not want to weary the House, as I have a great deal to
say. It was, therefore, decided that there must be redistribution. One of
the first consequences of that decision was the abolition of the sale and
purchase of practices. If we are to get the doctors where we need them,
we cannot possibly allow a new doctor to go in because he has bought
somebody's practice. Proper distribution kills by itself the sale and pur-
chase of practices. I know that there is some opposition to this, and I will
deal with that opposition. I have always regarded the sale and purchase
of medical practices as an evil in itself. It is tantamount to the sale and
purchase of patients. Indeed, every argument advanced about the value
of the practice is itself an argument against freedom of choice, because the
assumption underlying the high value of a practice is that the patient passes
from the old doctor to the new. If they did not pass there would be no
value in it. I would like, therefore, to point out to the medical profession
that every time they argue for high compensation for the loss of the value
of their practices, it is an argument against the free choice which they claim.
However, the decision to bring about the proper distribution of general
practitioners throughout the country meant that the value of the practices
was destroyed. We had, therefore, to consider compensation.

COMPENSATION OF DOCTORS
I have never admitted the legal claim, but I admit at once that very
great hardship would be inflicted upon doctors if there were no compensa-
fion. Many of these doctors look forward to the value of their practices for
their retirement. Many of them have had to borrow money to buy practices,
and therefore it would, I think, be inhuman, and certainly most unjust, if
no compensation were paid for the value of the practices destroyed. The
sum of 66,000,000 is very large. .In fact, I think that every one will admit
that the doctors are being treated very generously. However, it is not all
loss, because if we had provided superannuation and given credit for back
service, as we should have had to do, it would-have cost 35 million. Fur-
thermore it will fall to be paid to the dependents when the doctor dies or
when he retires, and so it is spread over .a considerable number of years.
This global sum has been. arrived at by the actuaries, and over the figure, I
am afraid, we have not had very much control, because the actuaries have
agreed it. But the profession itself will be asked to advise as to its distribu-
tion among the claimants, because we are interested in the global sum, and
the profession, of course, is interested in the equitable distribution of the
fund to the claimants.





National Health Service Bill


NEATIVE CONTROL, NOT DIRECTION
The doctors claim that the proposals of the Bill amount to direction-not
all the doctors say this but some of them do. There-is no direction involved
at all. When the Measure starts to operate, the doctors in a particular area
will be able to enter the public service in that area. A doctor newly coming
along would apply to the local Executive Council for permission to practice
in a particular area. His application would then be referred to the Medical
Practices Committee. The Medical Practices Committee, which is mainly a
professional body, would have before it the question of whether there.were
sufficient general practitioners in that area. If there were enough, the com-
mittee would refuse to permit the appointment. No one can really argue
that that is direction, because no profession should be allowed to enter the
public service in a place where it is not needed. By that method of negative
control over a number of years, we hope to bring about over the country a
positive redistribution of the general practitioner service. It will not affect
the existing situation, because doctors will be able to practice under the new
service in the areas to which they belong, but a new doctor, as he comes on,
will have to find his practice in a place inadequately served.

THE PRINCIPLES OF REMUNERATION
I cannot, at the moment, explain to the House what are going to be the
rates of remuneration of doctors. The Spens Committee report is not fully
available. I hope it will be out next week. I had hoped that it would be
ready for this Debate, because this is an extremely important part of the
subject, but I have not been able to get the full report. Therefore, it is not
possible to deal with remuneration. However, it is possible to deal with
some of the principles underlying the remuneration of general practitioners.
Some of my hon. Friends on this side of the House are in favor of a full
salaried service. I am not. I do not believe that the medical profession is
ripe for it, and I cannot dispense with the principle that the payment of a
doctor must in some degree be a reward for zeal, and there must be some
degree of punishment for lack of it. Therefore, it is proposed that capita-
tion should remain the, main source from which a doctor will obtain his
remuneration. But it is proposed that there shall be a basic salary and that
for a number of very cogent reasons. One is that a young doctor entering
practice for the first time needs to be kept alive while he is building up his
lists. The present system by which a young man gets a load of debt around
his neck in order to practice is an altogether evil one. The basic salary will
take care of that.
Furthermore, the basic salary has the additional advantage of being some-
thing to which I can attach an increased amount to get doctors to go into
unattractive areas. It may also-and here our position is not quite so defi-
nite-be the means of attaching additional remuneration for special courses
and special acquirements. The basic salary, however, must not be too large,
otherwise it is "a disguised form of capitation. Therefore, the main source
at the moment through which a general practitioner will obtain his remu-
neration will be capitation. I have also made-and I. quite frankly admit it






British Speeches of the Day [Mn. BEVANI
to the House-a further concession which I know will be repugnant in some
quarters. The doctor, the general practitioner and the specialist will be
able to obtain fees, but not from anyone who is on any of their own lists,
nor will a doctor be able to obtain fees from persons on the lists of his
partner, nor from those he has worked with in group practice, but I think
it is impracticable to prevent him having any fees at all. To do so would
be to create a black market. There ought to be nothing to prevent anyone
having advice from another doctor other than his own. Hon. Members
know what happens in this field sometimes. An indivdiual hears that a
particular doctor in some place is good at this, that or the other thing, and
wants to go along for a consultation. He gets a consultation and pays a
fee for it. If the other doctor is better than his own, all he will need to do
is to transfer to him and he gets him free. It would be unreasonable to
keep the patient paying fees to a doctor whose services can be got free. So
the amount, of fee payment on the part of the general population will be
quite small. Indeed, I confess at once if the amount of fee paying is great,
the system will break dowli, because the whole purpose of this scheme is
to provide free treatment with no fee paying at all. The same principle
applies to the hospitals.
Mr. Sydney Silverman (Labor): Before we leave that point, I should
like to ask whether we are to gather from the right hon. Gentleman that a
doctor will be entitled to receive a fee for consultation from a patient who
is on some other doctor's list?
Mr. Bevan: Yes.
Mr. Silverman: I always understood it was improper for a doctor to see
a patient who was being treated by another doctor.
Mr. Bevan: He would not be treated by another doctor, but would be
on the panel of the other doctor. We are hoping when our scheme gets
going properly that everybody will be on somebody's panel, and unless an
individual on someone else's panel is able to pay a fee no one will be able
to pay a fee.
Mr. Logan (Labor): If a patient can get specialist advice under the
scheme, what necessity will there be for him to pay for a consultant?
Mr. Bevan: '1 hope there will be very little necessity. Nevertheless, this
is a field in which idiosyncrasies are prevalent. If an individual wishes to
consult, there is no reason why he should be stopped. As I. have said, the
fact that a person can transfer from one doctor to another ought to keep
fee paying within reasonable proportions.

FEE-PAYING PATIENTS IN HOSPITALS
The same principle applies to the hospitals. Specialists in hospitals will
be allowed to have fee-paying patients. I know this is criticized and I
sympathize with some of the reasons for the criticism, but were driven
inevitably to this fact, that unless we permit some fee-paying patients in
the public hospitals, there will be a rash of nursing homes all over the
country. If people wish to pay for additional amenities, or something to





National Health Service Bill
which they attach value, like privacy in, a single ward, we ought to aim at
providing such facilities for everyone who wants them. But while we have
inadequate hospital facilities, and while rebuilding is postponed, it inevit-
ably happens that some people will want to buy something more than the
general health service is providing. If we do not permit fees in hospitals,
we will lose many specialists from the public hospitals, for they will go to
nursing homes. I believe that nursing homes ought to be discouraged.
They cannot provide general hospital facilities, and we want to keep our
specialists attached to our hospitals and not send them into nursing homes.
Behind this there is a principle of some importance. If the State owned
a theatre it v~ould not charge the same prices for the different seats. It is
not entirely analogous, but it is an illustration. For example, in the dental
service the same principle will prevail. The State will provide a certain
standard of dentistry free, but if a person wants to have his teeth filled with
gold, the State will not provide that.

HEALTH CENTERS
Third instrument to which the health services are to be articulated is
the health center, to which we attach very great importance indeed. It has
been described in some places as an experimental idea, but we want it to be
more than that, because to the extent that general practitioners can operate
through health centers in their own practice, to that extent will be raised
the general standard of the medical profession as a whole. Furthermore,
the general practitioner cannot afford the apparatus necessary for a proper
diagnosis in his own surgery. This will be available at the health center.
The health center may well be the center for the maternity and child welfare
clinic of the local authority. The provision of the health center is, there-
fore, imposed as a duty on the local authority. There has been criticism
that this creates a trichotomy in the services. It is not a trichotomy at all.
If you have complete unification it would bring you back to paper planning.
You cannot get all services through the regional authority, because there
are many iinmediate and personal services which the local authority can
carry out'better than anybody else. So, it is proposed to leave those per-
sonal services to the local authority, and some will be carried out at the
health center. The centers will vary; there will be large centers at which
there will be dental clinics, maternity and child welfare services, and general
practitioners' consultative facilities, and there will also be smaller surgeries
where practitioners can see their patients. . .
The representatives on the local executives will be able to co-ordinate
what is happening at the health centers. As I say, we regard these health
centers as extremely valuable, and their creation will be encouraged in every
possible way. Doctors will be encouraged to practice there, where they will
have great facilities. It will, of course, be some time before these centers
can be established everywhere, because of the absence of these facilities.
SOME CBITICISMS
There you have the three main instruments through which it is proposed
that the public health services of the future should be articulated. There





British Speeches of the Day' [Ma. BEVAN]
has been some criticism. Some have said that the preventive services should
be under the same authority as the curative services. I wonder whether
Members who advance that criticism really envisage the situation which
will arise. What are the preventive services? Housing, water, sewerage,
river pollution prevention, food inspection-are all these to be under a
regional board? If so, a regional board of that sort would want the Albert
Hall in Which to meet. This, again, is paper planning. It is unification for
unification's sake. There must be a frontier at which thp local authority
joins the public health service. You can fix it here or there, but it must be
fixed somewhere. It is said that there is some contradiction in the health
scheme because some services are left to the local authority and the rest to
the national scheme. Wqll, day is joined to night by twilight, but nobody
has suggested that it is a contradiction in nature. The argument that this
is a contradiction in health services is purely pedantic, and has no relation
to the facts.
GYNAECOLOGICAL SERVICES
It is also suggested that because maternity and child welfare services
come under the local authority, and gynaecological services come under the
regional board, that will make for confusion. Why should it? Continuity
between. one and the other is maintained by the user. The hospital is
there to be used. If there are difficulties in connection with birth, the
gynaecologist at the hospital center can look after them. All that happens
is that the midwife will be in charge-the mother.will be examined properly,
as she ought to be examined-then, if difficulties are anticipated, she can
have her child in hospital, where she can be properly looked after by the
gynaecologist. When she recovers, and is a perfectly normal person, she
can go to the maternity and child welfare center for post-natal treatment.
There is no confusion there. The confusion is in the minds of those who
are criticizing the proposal on the ground that there is a trichotomy in the
services, between the local authority, the regional board and the health
center.
CONSULTATIONS WITH THE MEDICAL PROFESSION
I apologize for detaining the House so long, but there are other matters
to which I must make some reference. The two Amendments on the Order
Paper rather astonish me. The hon. Member for Denbigh (Sir H. Morris-
Jones) informs me, in his Amendment, that I have not sufficiently consulted
the medical profession--
Sir Henry Morris-Jones (Liberal National): That is not the wording on
the Order Paper. I said there were no consultations.
Mr. Bevan: I' intend to read the Amendment to show how extravagant
the hon. Member has been. He says that he and his friends are:
". .. unable to agree to a measure containing such far-reaching proposals involving
the entire population without any consultations having taken place between the
Minister and the organizations and bodies representing those who will be responsible
for carrying out its provisions .. "
I have had prepared a list of conferences I have attended. I have met the
medical profession, the dental profession, the pharmacists, nurses and mid-
298






National Health Service Bill
wives, voluntary hospitals, local authorities, eye services, medical aid ser-
vices, herbalists, insurance committees, and various other organizations. I
have had 20 conferences. The consultations have been very wide. In addi-
tion, my officials have had 13 conferences, so that altogether there have been
33 conferences with the different branches of the profession about the
proposals. Can anybody argue that that is not adequate consultation? Of
course, the real criticism is that I have not conducted negotiations. I am
astonished that such a charge should lie in the mouth of any Member of
the House. If there is one thing that will spell the death of the House of
Commons it is for a Minister to negotiate Bills before they are presented
to the House. I had no negotiations, because once you negotiate with out-
side bodies two things happen. They are made aware of the nature of the
proposals before the House of Commons itself; and furthermore, the Min-
ister puts himself into an impossible position, because,-if he has agreed
things with somebody outside, he is bound to resist Amendments from Mem-
bers in the House. Otherwise he does not play fair with them. I protested
against this myself when I was a Private Member. I protested bitterly, and
I am not prepared, strange though it may seem, to do something as a Minis-
ter which as a Private Member I thought was wrong. So there has not been
negotiation, and there will not be negotiation, in this matter. The House
of Commons is supreme, and the House of Commons must assert its suprem-
acy, and not allow itself to be dictated to by anybody, no matter how power-
ful and how strong it may be ...
These consultations have taken place over a very wide field, and, as a
matter. of fact, have produced quite a considerable amount of agreement.
The opposition to the Bill is not as strong as it was thought it would be.
On the contrary, there is very considerable support for 'this Measure among
the doctors themselves. I myself have been rather aggrieved by some of the
statements which have been made. They have misrepresented the proposals
to a very large extent, but as these proposals become known to the medical
profession, they will appreciate them, because nothing should please a good
doctor more than to realize that, in future, neither he nor his patient will
have any financial anxiety arising out of illness.
"INTERFERENCE" WrH ENDOWED FOUNDATIONS
The leaders of the Opposition have on the Order Paper an Amendment
which expresses indignation at the extent to which we are interfering with
charitable foundations. The Amendment states that the Bill:
"gravely menaces all charitable foundations by diverting to purposes other than those
intended by the donors the trust funds of the voluntary hospitals."
I must say that when I read that Amendment I was amused. I have been
looking up some precedents. I would like to say, in passing, that a great
many of these endowments and foundations have been diversions from the
Chancellor of the Exchequer. The main contributor was the Chancellor
of the Exchequer. But I seem to remember that, in 1941, hon. Members
opposite were very much vexed by what might happen to the public
schools, and they came to the House and asked for the permission
of the House to lay sacrilegious hands upon educational endowments






British Speeches of the Day [MR. BEVAN]
centuries old. I remember protesting against it at the time-not,
however, on the grounds of sacrilege. These endowments had been
left to the public schools, many of them for the maintenance of the build-
ings, but hon. Members opposite, being concerned lest the war might affect
their favorite schools, came to the House and allowed the diversion of
money from that purpose to the payment of the salaries of the teachers and
the masters. There have been other interference with endowments. Wales
has been one of the criminals. Disestablishment interfered with an enor-
mous number of endowments. Scotland also is involved. Scotland has been
behaving in a most sacrilegious manner; a whole lot of endowments have
been waived by Scottish Acts. I could read out a large number of them, but
I shall not do so.
Do hon. Members opposite suggest that the intelligent planning of the
modern world must be prevented by the endowments of the dead? Are we
to consider the dead more than the living? Are the patients of our hospitals
to be sacrificed to a consideration of that sort?
Major Guy Lloyd: Henry VIII did it.
Mr. Bevan: He was a good king too; he had many good points. We are
not, in fact, diverting these endowments from charitable purposes. It would
have been perfectly proper for the Chancellor of the Exchequer to have
taken over these funds, because they were willed for hospital purposes, and
he could use them for hospital purposes; but we are doing no such thing.
The teaching hospitals will be left with all their liquid endowments and
more power. We are not interfering with the teaching hospitals. Academic
medical education will be more free in the future than it has been in the
past. Furthermore, something like 32 million belonging to the voluntary
hospitals as a whole is not going to be taken from them. On the contrary,
we are going to use it, and a very valuable thing it will be; we are going
to use it as a shock absorber between the Treasury, the central Government,
and the hospital administration. They will be given it as free money which
they can spend over and above the funds provided by the State.
I welcome the opportunity of doing that, because I appreciate, as much
as hon. Members et any part of the House, the absolute necessity for having
an elastic, resilient service, subject to local influence as well as to central
influence; and that can be accomplished by leaving this money in their
hands. I shall be prepared to consider, when the Bill comes to be examined
in more detail, whether any other relaxations are possible, but certainly,
by"leaving this money in the hands of the regional board, by allowing the
regional board an annual budget and giving them freedom of movement
inside that budget, by giving power to the regional board to distribute this
money to the local management committees of the hospitals, by various
devices of that sort, the hospitals will be responsive to local pressure and
subject to local influence as well as to central direction.
I think that on those grounds the proposals can be defended. They
cover a very wide field indeed, to a great deal of which I have not been
able to make reference; but I should have thought it ought to have been
a pride to hon. Members in all parts of the House that Great Britain is able
to embark upon an ambitious scheme of this proportion. When it is carried






National Health Service Bill
out, it will place this country in the forefront of all countries of the world
in medical services. I myself, if I may say a personal word, take very great
pride and great pleasure in being able to introduce a Bill of this compre-
hensiveness and value. I believe it will lift the shadow from millions of
homes. It will keep very many people alive who might otherwise be dead.
It will relieve suffering. It will produce higher standards for the medical
profession. It will be a great contribution towards the well-being of the
common people of Great Britain. For that reason, and for the other reasons
I have mentioned, I hope hon. Members will give the Bill a Second
Reading.

Rt. Hon. Richard Law (Conservative): The right hon. Gentleman the
Minister of Health has received an ovation from the Benches behind him
for a speech as eloquent, as unconvincing, and as disingenuous as any I
have ever heard from him. The right hon. Gentleman had a great oppor-
tunity with this Bill. He had the chance of bringing to the House of Com-
mons proposals which would have been warmly welcomed by every party
in the House and by every section of opinion, lay or medical, outside.
Instead, he has preferred to bring to the House these proposals which are
in fact feared and distrusted by the great majority of those who will be
called upon to make them effective. The right hon. Gentleman might have
done so much without doing this. He might have done so much more if
he had been content to do a little less.
It is surely a most extraordinary thing that the right hon. Gentleman
the Minister of Health, who has absolutely no administrative experience of
a great Government Department, and who has no great knowledge, either
practical or theoretical, of the very important subject matter with which
this Bill is dealing, should have set his own intuition and judgment against
all those best informed in the medical profession and in the hospital services
outside the House. In fact, the right hon. Gentleman has done just that.
The British Hospital Association and the British Medical Association are
opposed to this Bill. [Laughter.], I do not know why hon. Members laugh
at the mention.of the British Medical Association. The British Dental
Association is also opposed to this Bill, and the three Royal Colleges have
criticized it with varying emphasis.
Mr. Bevan: Have the Royal Colleges placed anything on record against
Sthe Bill?
A SERIOUS CHARGE
Mr. Law: The three Royal Colleges have criticized the Bill with varying
emphasis-[HON. MEMBERS: "Answer."]-and for various reasons. I think
I am right in saying that the Royal College of Surgeons passed a resolution
condemning aspects of the Minister's proposals in the most categorical terms.
The Royal College of Obstetricians did the same. They said, if my memory
serves me, that the Minister's proposals were likely to lead to a great increase
in maternal mortality. [Interruption.] That was, I think, the purport of
a document which I have certainly seen and which emanated from the Royal
College of Obstetricians. And even the powerful advocacy of its president,
Lord Moran, was unable to influence the Royal College of Physicians to






British Speeches of the Day [MI. LAw)
give support to the Minister's proposals for taking over the voluntary
hospitals.
Mr. Bevan: I must ask the right hon. Gentleman to amplify his statement
which otherwise might cause a great deal of alarm. Does he say that the
Royal College of Obstetricians have placed on record a declaration that the
consequence of the Bill will be to raise the maternal mortality rate? Will
he quote the resolution? ...
Mr. Law: I said-and I am in the recollection of the House-that this docu-
ment stated that the proposals of the Minister with regard to certain
aspects of the Bill increased the chances of maternal mortality. If I gave
the House the impression that that was said, in those exact words, I was
wrong and of course I withdraw. This is in fact what the Royal College
of Obstetricians said in this document:
"The Royal College has considered these questions"-
that is, the question of duality of administration which, I think, the Min-
ister touched on-
"in its recent report on a national maternity service. In that report the Royal College
gave evidence for its conviction that the care of the pregnant woman, whether at
home, in the clinic, or in hospital, is a responsibility which: cannot be discharged with
the maximum safety to the two lives at stake if it is shared between different admin-
istrative bodies"
That is what the-[Interruption.] We can pursue this argument forever,
but the plain facts is, as the Minister knows, that the 'Royal College of
Obstetricians have very serious misgivings about the proposals in this Bill.
I therefore hold that I am fully entitled to Claim that the expert opinion
of the Royal College is opposed to the Minister's intuitions and judgment
on this matter. When the Minister interrupted me a few moments ago-
I do not complain since perhaps I gave him cause-I was going on to speak
of the Royal College of Physicians and to explain to the House that in
spite of his own advocacy and in spite of his great authority, the President
was quite unable to bring the Royal College to endorse his view that the
Minister, in taking the hospitals into his own control and ownership, was
doing a good thing.
The plain fact is that everybody of informed and expert opinion outside
this House is against the Minister on one part of the Bill or another. The
Minister rides off by talking of sectional and vested interests. I have known
the Minister fairly well in this House. I think he has the sort of mind
which, when anybody disagrees with him or holds a different view, makes
him fasten immediately upon phrases like "sectional interests" or "vested
interests." It is a monstrous perversion of the ordinary usage of words to
describe great, responsible, professional bodies such as I have been mention-
ing as vested or sectional interests. I would like first to make clear, as far
as I can, theposition of those who sit on these benches with regard to the
principle of a comprehensive, national, health service available to all. . .
ACCEPTANCE OF END, NOT, MEANS
I was saying, and I hope I shall now have the chance to finish my
sentence, that I am anxious to make cear our position on these Benches






National Health Service Bill
in regard to the principle of a national, comprehensive, 100 per cent health
service. Of course we accept that principle today, as we accepted it in 1944,
when the Coalition White Paper was published. I assure the Minister that
on this side of the House we are just as anxious as he is, or any of his hon.
or right hon. Friends by his side or behind him are, to give the people of
this country the fullest possible benefits which can come from the accept-
ance 6f the principle of a comprehensive service. I hope the Minister will
understand that. We accept the principle, and we accept the consequences
that flow from it. We understand, for example, that once we are com-
mitted, as we are gladly committed, to the principle of a 100 per cent service,
we require an enormous expansion andl development in the health services
as a whole. We understand, once we accept the principle, that we are
committed to a far greater degree of co-ordination,' or planning as it is
usually called, than we have ever known before. ...
I was saying that we accept the consequence that flow from the principle,
and if my right hon. and learned Friend the Member for North Croydon
(Mr. Willink) had still been Minister-of Health, had the General Election
result gone another way, I do not doubt that he would have introduced,
before this, a Bill which would have differed from this Bill only in that my
right hon. and learned Friend would not have attempted to control, own
and direct the hospital service of this country or to interfere with that age-
old relationship which exists, always has existed, and in our view ought to
continue to exist, between a doctor and his patient. Therefore, the right
hon. Gentleman is not entitled to say-he has not said it, but he might-that
we will the end without the means. We will both the end and the means. We
will this end, a comprehensive and effident health service. We are willing
to support any practicable means that will give us that end.
But we differ from the right hon. Gentleman on this issue. We believe
that the right hon. Gentleman could have reached his end, and a better
end, by other means, and by better means. We believe that he could have
established a health service, equally comprehensive, better co-ordinated and
far more efficient, if he had not been determined to sweep away the volun-
tary hospitals; if he had not been determined to weaken the whole structure
of English local government by removing from the field of local government
one of the most important and vital responsibilities of local authorities; and
if he had not sought to impose upon the medical profession a form of
discipline which, in our view and in theirs, is totally unsuited to the practice
of medicine, an art, a vocation, however you like to call it, which depends
above all else upon individual responsibility, individual devotion and indi-
vidual sympathy.
Mr. Bevan: Where is the discipline?
Mr. Law: I will come to that point. The right hon. Gentleman said that
the Bill covered a tremendous field, but he did not cover the whole field
himself, and I certainly will not attempt to traverse the whole field. Before
the Debate ends, very important questions have to be answered on the
administrative structure which runs through the Bill, and particularly
whether it is desirable to divide the health service into three watertight
303






British Speeches of the Day [Mn. LAw)
compartments by vertical lines: the hospital and consulting services in one
division, the general practitioner services in, another, and the local authority
services in a third. There is the question of the dental service, to which
the Minister referred. I would like to say in passing that no Bill of this
kind can cure the appalling dental conditions to which the Minister
referred. They can be cured only by education and nutrition, among other
things.
There is the question of opticians. There is the further question of the
employees of hospital contributory schemes and why they are being left out
of the operation of Clause 64, which compensates those who have been
concerned with voluntary hospitals. That seems to me to be a most grievous
injustice, and I hope we shall be able to persuade the Minister to change
his mind on that. These and other matters will be developed, I have no
doubt, either now or at a later stage, by others of my hon. and right hon.
Friends on this side of the House. I propose to confine myself in the main
to the two fundamental issues of principle which seem to me to divide us
from the Minister, the question of the hospitals services in Part II of the
Bill, and the question of the general practitioner services in Part IV.

THE OWNERSHIP OF HOSPITALS
Why is the Minister determined to take over the ownership of the hospi-
tals? It seems to me that the burden of proof must be upon him. It is
for him to show why it is necessary for the State and for the Minister to
take over the hospitals. It is not for us to show that it is not necessary.
I say that because, as I understand the policy of the present Government,
that is, as far as it is possible to understand it, nationalization as a principle
and for its own sake is not a part of that policy. We have been repeatedly
told, for example, by the Lord President of the Council, that the Govern-
ment would not take over an industry unless it could be shown demon-
strably that the change would be for the benefit both of the industry and
of the community. I am quite certain that the Lord President would not
apply any more sordid standard than that in the case of the health services
and medicine.
It is, indeed, only a little more than 12 months ago that the Lord Presi-
dent of the Council, speaking in this House, explained why it would be
wrong for the State, for the Government and for the Minister of Health, to
take over the hospital services in this country. What he said was so inter-
esting that I would like to repeat an extract from it. He was speaking on
a Motion on local government, and referring to a speech by the hon. Mem-
ber for South Tottenham (Mr. Messer), the Lord President said:
"My hon. Friend the Member for South Tottenham . . was absolutely right."
Why was he absolutely right? This is what the Lord President of the
Council said:
"He said that as a local government man he did not mind what we did with elec-
tricity, gas, water and drainage. What he wants to keep in his hands as a local
government man are the human services like health, education and Jousing. I think
he is right."






National Health Service Bill


The Lord President then went on:
"When you come to economic undertakings, you have to find what is the best
administrative and managerial setup for efficient running of the industry, but when
you come to human services, efficiency has to be balanced with humanity."
At a later stage in that same speech the Lord President of the Council
said that in his view there were certain matters-things that he called "engi-
neers' questions rather than human questions"-which could be dealt with
on a national rather than a local basis. Having said that, he went on to
except the hospital services from those engineers' questions. He said:
"The other service is hospitals. There the view of the Minister of Health and the
Government was that it would not be right to take the hospitals over into a national
concern. I think that is quite right, but it is a case that hospital administration is
beyond the administrative ability of a large number of county boroughs. It is even
beyond a large number of county councils. Therefore the Minister was driven and
I was dragged with him, to swallow the joint board doctrine . ."-[OFFICIAL REPORT,
15th February, 1946; Vol. 408, c. 506 and 512.]
The Lord President of the Council has been dragged a good deal further
by the Minister of Health. When the Lord President was speaking in the
House he was only reaffirming something to which he was committed by
the Coalition White Paper. Not only was the Lord President committed,
but the present Prime Minister and the present Foreign Secretary were
committed. Therefore, I say we are entitled to know what has happened
in the last 12 months that has made what was then wrong right today. We
are entitled to know what the arguments are that have convinced the Lord
President of the Council, the Prime Minister and the Foreign Secretary that
they made a mistake when the Coalition White Paper was issued. . .
I would suggest to the Minister that if the region is the right area-and
I dare say that it is desirable that the hospital services should be centered
on a university-then let him make the regional board not a controlling and
an administrative board, not a directing board, but a planning board. Let
the board create the plan, if necessary under the final authority of the
Minister. Let the board create the plan and let the hospitals, whether
existing or to be created, whether voluntary or municipal, carry out the
plan. The Minister, by his financial sanction, would have ample powers
to see that the plan was in fact carried out. It might not be so tidy on
paper, but the Minister would not object to that-apparently, he would
rather like it-and I believe it would prove in the long run to be a far more
effective method of co-ordinating and developing the hospital organization
than the one the Minister has chosen. . .
I can understand the attitude'of the right hon. Gentleman in regard
to voluntary hospitals better than I can understand his attitude in regard
to municipal hospitals, because municipal hospitals are free froi any of this
taint of private benevolence, or charity. I cannot see why the Minister
condemns the just with the unjust. Still less can I understand how he has
been able to persuade his colleague, the Lord President of the Council, who
has always come before us as a great champion of local government, to
accept it, or how he has been able to persuade another colleague, the Home
Secretary, who has had great experience of local government. Is it the case
that these two right hon. Gentleman believe that local authorities are unable
to live up to their responsibilities, that they are unable to bear the heavy







British Speeches of the Dy [MBn.,LAw]
responsibility-among the most important of their responsibilities-of hospi-
tal provision? Those two right hon. Gentlemen may believe that, but we.
on these Benches do not.
Mr. Messer (Labor): The right hon. Gentleman is aware that after the
1929- Act, county councils and county borough councils were entitled to
hospitalize their services. Does he know that 68 out of the total number
have not yet done so, and are still living under the Poor Law?
Mr. Law: What the hon. Member for South Tottenham (Mr. Messer)
says is perfectly true; a large proportion of local authorities have not hospi-
talized their services as they might have done under the Act of 1929. But
the local authorities had a very short period only eight years until the out-
break of war, and it was a period of very great difficulty. Although the
standard of local authority hospitals is not in general as high as the standard
of voluntary hospitals in this country, I can see no reason why, with time
Sand with the kind of assistance which will be given by the financial impli-
cations of a comprehensive health service, the standard of the voluntary
hospitals should not be equalled very quickly.
THE GENERAL PRACTITIOJNE SERVICE
I have spent rather more time than I had intended to spend on the
question of the hospital services, but I must say a word about that other
important part of the Bill, Part IV, the general practitioner service. Here,
again, there is a broad measure of agreement between us. We are agreed
on this side of the House that there is a shortage of doctors and that doctors
have to be fairly distributed. But there are two principles to which we
attach enormous importance. The first is the principle that the doctor's'
only loyalty and only responsibility should be to his patients. The second
principle is that as far as his judgment is concerned, the doctor should be
responsible to nobody else but himself, and certainly he should not be
responsible to the State. Running through Part IV of the Bill there is a
wholesale denial of both these principles. The Minister would not admit
that, but I say there is a wholesale denial of both those principles. There
is the assertion that the doctor is responsible not so much to his patient but
to the Minister, through some Government body or another. I think I am
right in saying that every body or committee set up under this Bill has to
act within regulations, not specified,. which will be laid down by the
Minister.
Mr. Bevan: I am sorry to interrupt the right hon. Gentleman; he is very
courteous in giving way so frequently. But it is very important that state-
ments he makes should not go out without being put right When they mis-
represent the situation so fundamentally. There is nothing at all in the
Bill, no power whatever, which confers on the Minister the right to make
.a regulation which interferes between the doctor and his patient.
Mr. Law: I find that very difficult to understand, because under Clause 33
the doctor makes his contract with the Executive Council, and
"it shall be the duty of every Executive Council, in accordance with regulations"-
presumably those regulations emanate from the Minister-
306






National Health Service Bill
Mr. Bevan: The existing position is not being changed at all. At the
present time there are insurance committees responsible for administering
the general practitioner service under the National Health Insurance Act.
Where there are complaints against a doctor, as indeed there may be, that
committee is responsible for investigating them. All that happens in this
Bill is that I have put in an additional protection for the doctor-more than
he has got under the existing law. So far from the relationship between
doctor and patient being weakened, this Bill actually puts the doctor in a
stronger position.
Mr. Law: I do not see how the Minister can say, or how I can know,
that the existing position has not been changed, because the position as it
will be under this Bill will be governed by regulations, the existence of
which I do not know and the nature of which neither I nor anyone else,
except perhaps the Minister, can guess. I do not see how the Minister can
expect me to accept that the position will be exactly as it is today ....
It is not so much the existence of the local executive committee;
it is the fact that the doctor is to receive part of his salary as a fixed
payment from the State. The Minister said it was not from the
State, it was only from the executive committee. That is merely a
play upon words. The fact is that the doctor is to be paid, in part,
by the State. He is to work in premises which are owned, staffed and
managed, if not technically by the State, by the State as represented by the
local authority; and his field of work is to be defined for him by the State.
I say that those three things add up to the beginnings of a whole-time State
medical service. It is incomplete at the moment, it is still only embryonic,
but it is the first step, and the step that counts, towards a full-time medical
service.
I do not think it is possible to be surprised that so many doctors feel it
is in fact that first step, in particular when one considers once again what is
the declared, policy of the party opposite. Here is an interesting statement
from the Socialist Medical Association:
"The proposals in regard to the payment of doctors fallshort of the policy we
have advocated, and which the Labor Party' has, in the past, accepted., We still
insist that the best service, the perfect doctor-patient relationship, and the highest
form of team work will be possible only when the service becomes one employing
whole-time salaried officers, and we shall watch the basic salary system very closely
indeed."
[HON. MEMBERs: "Hear, hear."] That is the statement, and the House has
heard the reception which it has got from hon. Members opposite, [An
HON. MEMBER: "Do you agree with it?"] I certainly do not agree with it.
It is hardly surprising if, in spite of the soft and soothing words which the
Minister las used this afternoon, the medical profession still believes that
it is being driven along towards a full-time salaried State service, a form of
service which is absolutely incompatible with the two principles I enunci-
ated a few moments ago. Will the doctor be a better doctor because he is
paid a salary? I say he will be a worse doctor, because all his prospects of
material advancement will depend, not on the service that he can render to
his patients, but on the impression which he is able to make on his admin-
istrative superiors.






BritisF Speeches of the Day [MB. LAW)
Mrs. Jean Mann (Labor): Is it not the case that his medical superiors
will be his own colleagues on the medical practices committee?
Mr. Law: I do not think that affects my argument at all. It is not a ques-
tion of who the administrators are, but of whether the practice of medicine
as a science and an art will be made subservient to administrative consid-
erations. I say that that is what happens when the doctor is paid a salary
and that that does not make-a doctor a better doctor. It makes him a
worse doctor. From the point of view of the patient, who is the one who
matters, it is far better that the material prospects of the doctor should
depend upon the impression the doctor makes on the patient, and not oh
the impression he makes on his administrative superiors.
When these provisions become effective, if they become effective, the
doctor will be under great temptation to make himself. known to these
people and these bodies, to seek their favor, to cultivate them. He will be
under great pressure to limit the issue of certificates to his patients. . .
The plain fact is that the payment of doctors by salary means that the
doctor will depend less and less upon the confidence he has earned with
his patients and more and more on the impression he makes upon-govern-
mental bodies of one kind and another.

THE SALE OF PRACTICES
I wish to refer to the sale of practices. The Minister said it was the
sale and purchase of patients. He knows perfectly well that that is humbug.
He knows perfectly well that when a doctor buys a practice, he is not buying
patients. When a doctor sells a practice he is not selling patients, he is not
selling bodies, he is selling the goodwill he has earned with his patients. If
-he has been a diligent doctor, if he has been devoted, forgetful of himself,
if he has worked his hardest in the interests of his patients, the value of
that goodwill will be high. If he has been a bad doctor, the value of that
goodwill will be low. Conversely, when a doctor is buying a practice he
is not buying patients, he is only buying an opportunity to serve his patients.
If he does not make use of that opportunity he loses his practice. What the
Minister is doing by forbidding the buying and selling of practices is to
remove one more material inducement which a doctor has to give the best
service he can to his patients. . .
To deprive him, in his practice, of the inducement to improve his
material position, to improve the prospects of his children, is to do harm,
not to him but to his patients. It is to do harm because it will reinforce the
tendency already begun, with the payment of the decreasing capitation fee
and so forth, to sit back and look for his future and remuneration, not to
an increase in the value of his practice, not to the impression he makes on
his patient, not to the creation of goodwill. Again, it will force him to look
to his administrative superiors. I believe that will have a very harmful
effect upon the practice of medicine.
We on these benches are in no way opposed to the principle of a compre-
hensive service. We support that principle and we will give the Minister
every support we can in inaking it effective if he will only reconsider and
modify his proposals about the hospital service and his proposals in Part






National Health Service Bill
IV of the Bill. We object to Part IV of the Bill because it destroys the
existing relationship between doctor and patient, it removes some of the
incentives-not all of them but some'of them-which the doctor at present
has-to serve his patient. It involves the unnecessary expenditure of 66
million of the taxpayers' money. In our view it means that even if, by a
combination of threats and bribes, the Minister persuades all the medical
profession to work under him in making this Bill effective, the doctors of
the future will not be as good as the doctors of today. The bad effects of
this Bill, in so far as they are bad, on the points on which I have been
speaking, may not be seen now or in six months' or a year's time but they
will make themselves evident in 10, 15 or 20 years' time. By then it will'
be too late to do anything about it. I think the same is true of the hospital
services. We are opposed to the Minister's proposals because they weaken
local interest and initiative and the feeling of responsibility of the individ-
ual for his own hospital. The proposals weaken the fabric of local gov-~
ernment.
The Minister is dealing in these matters with something very different
from housing, something in some senses which is far more important than
housing. It is more important because if the Minister makes a mistake
here, as I believe he is making a mistake, that mistake is irremediable:
there is nothing we can do about it. If the House passes this Bill in its
present form it means that we are taking a step from which there will be
no going back. I believe it would be a fatal step. Therefore, I hope that
between now and the end of our discussions, which I imagine are likely to
be fairly protracted, the Minister will be able to consider very carefully the
points that have been put to him. I hope he will consider more carefully
than he has yet done, the points put by those who are interested in the
hospital services and in the practitioner services, and by all those bodies of
which in my judgment the Minister spoke with scant courtesy when he
referred to them as "sectional interests" and "vested interests." I ask the
Minister between now and the time when this Bill leave the House, to
consider very carefully the representations which have been made to him by
people-I obviously do not mean myself-who know far more than he does
of this subject, and who are likely to-be fO better judges than he of the
tendencies which he has set in operation by this Measure.
[House of Commons Debates]


QUESTION TIME IN THE HOUSE OF COMMONS
The first hour of every sitting day in the House of Commons is
devoted to answering questions which Members of Parliament put
to Ministers. A selection of some of the questions asked during
April, 1946, is included below, together with the Ministers' answers.

ARABS AND JEWS IN THE ARMED FORCES
Mrs. Ayrton-Gould (Labor) asked the Secretary of State for War how
many Arabs and Jews, respectively, men and women, served in the Pales-
309
'






British Speeches of the Day
tinian Forces during the war; and how many in the British Forces, other
than in the Palestinian.
The Secretary of State for War (Mr. Lawson) I will, with permission,
circulate the figures of enlistments'in Palestine in the British Forces in the
OFFICIAL REPORT. These figures include enlistments in the Palestinian
Regiment which is a Regiment of the British Army. I regret that no fig-
ures are available of the numbers of Arabs and Jews other than from
Palestine who served in the British Forces.
Earl Winterton (Conservative): Is it not the case that a great number
of Arabs are not permitted to serve because they are not British subjects,
and that there is a very small Arab population in this country and a con-
siderable Jewish one, especially in some quarters?
Mr. Lawson: I have no information to that effect.
Following are the figures:
The following numbers of Arabs and Jews enlisted in Palestine in the
British Forces during the war:

Jews Arabs
Men Women Men Women

Army ................ 18,880 3,125 8,680 148
R.A.F. ............... 1,863 740 130 4
R.N. ................ 1,106 83 -

[April 2, 1946]
FASCIST ACTIVITY
Dr. Haden Guest (Labor) asked the Secretary of State for the Home
Department whether he now has any further statement to make oni the
control and restraint of Fascist and anti-Semitic political activities.
The Secretary of State for the Home Department (Mr. Ede): Fascist
and potentially Fascist bodies in this country are small, disunited and inef-
fective. They will be watched with the utmost vigilance, and the potential
danger of such bodies will always be kept in mind. The Government have
examined in consultation with the Law Officers the scope of the existing
law and are satisfied that in present circumstances the law is fully adequate
to enable action to be taken against all really dangerous activities. If.
believers in Fascist doctrines engage either singly or in conspiracy in sub-
versive activities, or disturb the peace, they can be, and will be, dealt with
firmly as law-breakers.
[April 11, 1946]
WORLD FOOD SITUATION
The Leader of the Opposition (Mr. Churchill) asked the Prime Minister
whether he has any statement to make on the rationing of bread and the
American proposals that "further sacrifices in oils and fats should be made."
The Prime Minister (Mr. Attlee): When my right hon. Friend the Min-






Question Time in the House of Commons
ister of Food was. ii Washington, provisional proposals were made for the
distribution of wheat up to the end of June. Unfortunately it now appears
that supplies from the United States and other supplying countries are
not coming forward in sufficient quantities to meet these proposals. The
short fall will affect, not only the countries for which UNRRA is respon-
sible, but also the United Kingdom and other parts of the British Common-
wealth and Empire including the large populations in India. It will also
affect occupied countries and other foreign countries in which we have
special responsibilities-indeed it will apply to all importing countries alike.
This situation can be met only by the united action of all countries, export-
ers as well as importers, each contributing to the maximum of its ability.
During the war the Allies developed a system whereby all our resources
were shared in common for the common good. If the same principle is
followed now, we in the United Kingdom are willing to play our part and
we shall not fall behind in the contribution which we make.
The House knows already the successful efforts which we have made to
increase our wheat production and the efficient system which we have
developed for drawing all millable wheat from the farms at an agreed price,
so that it is used only for human consumption. We have recently increased
our extraction rate, even though this seriously affects our supplies of animal
foodstuffs.
We are now prepared to go further in the common cause. We are
willing to ration bread if the supplying countries are prepared to do the
same. Alternatively, we are ready to take administrative measures to save
wheat and flour which are comparable in their effect to those which the
supplying countries are prepared to adopt, so that the fullest contribution
may be made by all to avert the risk of widespread faniine and starvation.
We are anxious to apply the same principle of common effort to meet
the world's requirements of oils and fats. On this subject, however, I can
make no statement at the moment, beyond saying that we are doing every-
thing in our power to increase supplies from all parts of the world.
[April 11, 1946]
AFRICA (Social Security Schemes)
Mr. Hector Hughes (Labor) asked the Secretary of State for the Colonies
what steps have been taken to provide social insurance, workmen's compen-
sation and other similar legislation or schemes for the African colonies to
bring them up to date.
The Secretary of State for the Colonies (Mr. George Hall): Apart from
certain East African Colonies where Bills are in preparation, workmen's
compensation legislation is already in operation. The attention of all
Colonial Governments has been drawn to the question of social security
and improved workmen's compensation under Colonial conditions and my
Labor Advisory Committee are examining this matter.
Mr. Hughes: Has the Colonial Development Welfare Act been used for
the purpose of developing the social amenities of these Colonies?
Mr. Hall: Yes, Sir, a certain portion of it has.
[April .10, 1946]
311






British Speeches of the Day
ARMED FORCES (Eire Citizens)
Mr. Skeffington-Lodge (Labor) asked the Secretary of State for War
whether he will make a statement showing the number of volunteers from
Eire enrolled in His Majesty's Forces during the war who were killed in
action or wounded; and provide information about the number and char-
acter of any decorations earned by residents or citizens of that country
which were awarded to them by the British authorities in the same period.
The Financial Secretary to the War Office (Mr. Bellenger): I regret
that no exact figures are available either as regards casualties or awards.
The following estimates have, however, been made of the casualties suffered
by men born in Eire serving in the Army or Navy since the beginning of
the war:
R.N. Army
Killed or missing ......................... 220 1,550
Wounded .......................... No information 2,550

No satisfactory estimate in the case of the R.A.F. is at present available.
Up to 31st March the total number of awards made to persons born in
Eire is thought to be at least 780. This figure includes eight Victoria
Crosses and one George Cross.
[April 8, 1946]
RUSSIA (British Empire War Assistance)
Colonel Crosthwaite-Eyre (Conservative) asked the Prime Minister if
he will publish a comprehensive statement giving a list of the weapons and
materials, together with their costs, that were supplied in aid to the U.S.S.R.
by the British Empire, between 1st October, 1941, and the termination of
hostilities in Europe.
-The Prime Minister (Mr. Attlee): Yes, Sir. I am circulating a full
statement in the OFFICIAL REPORT. The House may like to have the follow-
ing summary of this. In the period from 1st October, 1941, to 31st March,
1946, we supplied to the Soviet Union 5,218 tanks, of which 1,388 were
from Canada. We supplied 7,411 aircraft, including 3,129 aircraft sent
from the United States of America. As previously explained on the 10th
May, 1944, the aircraft from the United States of America were sent on
United States Lend-Lease to the Soviet Union as part of the British commit-
ment to the U.S.S.R. in exchange for the supply of British aircraft to United
States Forces in the European Theatre. The total value-of military supplies
despatched amounts to approximately 308 million. We have also sent
about 120 million of raw materials, foodstuffs, machinery, industrial- plant,
medical supplies and hospital equipment.
We are very glad to have been able to give this assistance to our Soviet
Allies and to have helped to equip and sustain them in their bitter struggle
against the common enemy.
Colonel Crosthwaite-Eyre: Can the Prime Minister say whether the
Soviet public have been informed by the Soviet press and radio of this
substantial contribution to the Allied victory over Germany in the East?






Question Time in the House of Commons
The Prime Minister: Full publicity was given to the reply which was
given by the right hon. Member for Woodford (Mr. Churchill) on 10th
May, 1944.
[April 16, 1946]
INDIA (Food Situation)
Mr. Boardman (Labor) asked the Under-Secretary of State for India
whether the recent rains in India have materially improved the food situ-
ation there.
The Under-Secretary of State for India (Mr. A. Henderson): No, Sir.
Parts of the Punjab and the United Provinces received some rain in the
last week of February and the first week of March. But no material
improvement is to be hoped for from this. The total rain received over
the period November-March was only 2.8 inches against a normal 6.3
inches in the Punjab and 3 inches against a normal of 5.9 inches in the
United Provinces. It is clear that any improvement in the poor-outturn
of the spring crops which was apprehended in the areas affected will be
negligible in relation to the over-all shortage in India.
India's import requirements for the first half of this year were stated
to the Combined Food Board as two million tons of wheat and half a
million tons of rice. Allotments of 1.4 million tons of wheat or maize and
145,000 tons of rice were proposed by the Board, and India will require
at least those quantities in order to maintain the existing low cereals
ration of 12 oz. per adult, per day.
[April 18, 1946]



OTHER SPEECHES AND DEBATES IN APRIL, 1946
These can be consulted in the
Library of British Information Services.

STATEMENT ON REVISION OF ANGLO-EGYPTIAN TREATY
Commons, April 2. Mr. Bevin.

BRITISH BASES IN THE MEDITERRANEAN
Commons, April 3. Mr. Bevin.

DEVELOPMENT OF JAMAICA
Commois, April 3. Mr. George Hall (Secretary of State for the
Colonies).

EMPIRE PREFERENCE
Commons, April 4. Mr. Attlee.

BURMA (FAILURE OF CONSTITUTIONAL MACHINERY)
Commons, April 5. Mr. A. Henderson.
313






British Speeches of the Day
JUVENILE DELINQUENCY (1939 to 1945)
Commons, April 8. Mr. Ede.

PRODUCTION
Mr. Bevin. Manchester, April 11.

SPEECH AT PARLIAMENTARY PRESS GALLERY DINNER
Mr. Attlee. London, April 12.

COMMONWEALTH AND INTERNATIONAL DISCUSSIONS ON TRADE
AND EMPLOYMENT
Commons, April 15. Mr. H. Morrison, etc.

ARMED FORCES (EXTENDED SERVICE ENGAGEMENTS)
Commons, April 15. Mr. H. Morrison, etc.

HEALTH SERVICES: FUTURE OF HOSPITALS
Lords, April 16. Lord Moran, Lord Horder, etc.

SPEECH TO CONFERENCE OF MIDLAND EMPLOYERS AND TRADE UNIONISTS
Mr. Herbert Morrison. Birmingham, April 17.

FAREWELL SPEECH TO THE PILGRIMS OF THE UNITED STATES
Lord Halifax. New York, April 22.

A REVIEW OF THE LABOR GOVERNMENT'S WORK
Mr. Attlee. Newcastle, April 27.










University of Florida Home Page
© 2004 - 2010 University of Florida George A. Smathers Libraries.
All rights reserved.

Acceptable Use, Copyright, and Disclaimer Statement
Last updated October 10, 2010 - - mvs