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Title: British speeches of the day
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Full Text





WINSTON CHURCHILL, Prime Minister, May 13, 1945.
Five Years.

WINSTON CHURCHILL, Prime Minister, June 5, 1945.
The Levant States.

SIR JOHN ANDERSON, Chancellor of the Exchequer, April 24, 1945.
The Budget.

THOMAS JOHNSTON, Secretary of State for Scotland, May 1, 1945.
Education (Scotland) Bill.

H. U. WILLINK, Minister of Health, May 9, 1945.
Local Government (Boupdary Commission) Bill.

LORD SWINTON, Minister of Civil Aviation, April 24, 1945.
Ministry of Civil Aviation Bill.

THE DUKE OF DEVONSHIRE, Parliamentary Under-Secreta
Colonies, May 15, 1945.
Mines in British Colonies.


Vol. III, No. 6 June 1945
NEW YORK 20 . .. 30 ROCKEFELLER PLAZA . . Circle 6.5100
WASHINGTON 5, D. C. . 1336 NEW YORK AVENUE, N.W.. . Executive 8525
SAN FRANCISCO 8 . 391 SUTTER STREET . . . Sutter 6634

Prime Minister
Broadcast to the Nation, May 13, 1945

It was five years ago on Thursday last that His Majesty the King commissioned
me to form a National Government of all parties to carry on our affairs. Five
years is a long time in human life, especially when there is no remission for good
conduct. However, aided by loyal and capable colleagues and sustained by the
entire British nation at home and all our fighting men abroad, and with the un-
swerving cooperation of the Dominions far across the oceans and of our Empire
in every quarter of the globe, it became clear last week that things had worked out
pretty well and that the British Commonwealth and Empire stands more united
and more effectively powerful than at any time in its long romantic history. Cer-
tainly we are in a far better state to cope with the problems and perils of the future
than we were five years ago.
For a while our prime enemy, our mighty enemy, Germany, overran almost
all Europe. France, who bore such a frightful strain in the last great war, was
beaten to the ground and took some time to recover. The Low Countries, fighting
to the best of their strength, were subjugated. Norway was overrun. Mussolini's
Italy stabbed us in the back when we were, as he thought, at our last gasp. But
for ourselves, our lot, I mean the British Commonwealth and Empire, we were
absolutely alone.

Battle of Britain
In July, August, and September, 1940, 40 or 50 squadrons of British fighter
aircraft broke the teeth of the German air fleet at odds of seven or eight to one
in the Battle of Britain. Never before in the history of human conflict was so
much owed by so many to so few. The name of Air Chief Marshal Lord
Dowding will ever be linked with this splendid event. But conjoined with the
Royal Air Force lay the Royal Navy, ever ready to tear to pieces the barges,
gathered from the canals of Holland and Belgium, in which an invading army
could alone have been transported. I was never one to believe that the invasion
of Britain would be an easy task. With the autumn storms, the immediate danger
of invasion in 1940 had passed.
Then began the blitz, when Hitler said he would rub out our cities. This
was borne without a word of complaint or the slightest signs of flinching, while a
very large number of people-honor to them all-proved that London could take
it and so could the other ravaged centers.
But the dawn of 1941 revealed us still in jeopardy. The hostile aircraft could
fly across the approaches to our island, where 46,000,000 people had to import
half their daily bread and all the materials they need for peace or war, from Brest
to Norway in a single flight or back again, observing all the movements of our
shipping in and out of the Clyde and Mersey and directing upon our convoys the
large and increasing numbers of U-boats with which the enemy bespattered the
Atlantic-the survivors or successors of which are now being collected in British
The sense of envelopment, which might at any moment turn to strangulation,
lay heavy upon us. We had only the northwestern approach between Ulster and
[ 373

British Speeches of the Day

Scotland through which to bring in the means of life and to send out the forces
of war. Owing to the action of Mr. de Valera, so much at variance with the
temper and instinct of thousands of southern Irishmen, who hastened to the battle-
front to prove their ancient valor, the approaches which the southern Irish ports
and airfields could so easily have guarded were closed by the hostile aircraft and

A Deadly Moment
This was indeed a deadly moment in our life, and if it had not been for the
loyalty and friendship of Northern Ireland we should have been forced to come
to close quarters with Mr. de Valera or perish forever from the earth. However,
with a restraint and poise to which, I say, history will find few parallels, we never
laid a violent hand upon them, which at times would have been quite easy and
quite natural, and left the de Valera Government to frolic with the German and
later with the Japanese representatives to their heart's content.
When I think of these days I think also of other episodes and personalities. I
do not forget Lieutenant-Commander Esmonde, V.C., D.S.O., Lance-Corporal
Keneally, V.C., Captain Fegen, V.C., and other Irish heroes that I could easily
recite, and all bitterness by Britain for the Irish race dies in my heart. I can
only pray that in years which I shall not see the shame will be forgotten and the
glories will endure, and that the peoples of the British Isles and of the British
Commonwealth of Nations will walk together in mutual comprehension and
My friends, we will not forget the devotion of our merchant seamen, the vast,
inventive, adaptive, all-embracing and, in the end, all-controlling power of the
Royal Navy, with its ever more potent new ally, the air, which have kept the life-
line open. We were able to breathe; were were able to live; we were able to strike.
Dire deeds we had to do. The destruction or capture of the French fleet which,
had it ever passed into German hands would, together with the Italian fleet, have
perhaps enabled the German Navy to face us on the high seas. The dispatch to
Wavell all round the Cape at our darkest hour, of tanks-practically all we had
in the island-enabled us as far back as November, 1940, to defend Egypt against
invasion and hurl back with the loss of a quarter of a million captives the Italian
armies at whose tail Mussolini had planned a ride into Cairo or Alexandria.
Great anxiety was felt by President Roosevelt, and indeed by thinking men
throughout the United States, about what would happen to us in the early part
of 1941. This great President felt to the depth of his being that the destruction of
Britain would not only be a fearful event in itself, but that it would expose to
mortal danger the vast and as yet largely unarmed potentialities and future destiny
of the United States.

Invasion Threat
He feared greatly that we should be invaded in that spring of 1941, and no
doubt he had behind him military advice as good as any in the world, and he
sent his recent Presidential opponent, Mr. Wendell Willkie, to me with a letter
in which he had written in his own hand the famous lines of Longfellow, which
I quoted in the House of Commons the other day:-
Sail on, O Ship of State!
Sail on, O Union strong and great!
Humanity with all its fears,
With all the hopes of future years,
Is hanging breathless on thy fate!

Five Years

We were in a fairly tough condition by the early months of 1941 and felt
very much better about ourselves than in the months immediately after the collapse
of France. Our Dunkirk army and field force troops in Britain, almost a million
strong, were nearly all equipped or re-equipped. We had ferried over the Atlantic
a million rifles and a thousand cannon from the United States, with all their am-
munition, since the previous June.
In our munition works, which were becoming very powerful, men and women
had worked at their machines till they dropped senseless with fatigue. Nearly
one million of men, growing to two millions at the peak, working all day had
been formed into the Home Guard, armed at least with rifles and armed also
with the spirit "Conquer or Die."
Later in 1941, when we were still all alone, we sacrificed, to some extent un-
willingly, our conquests of the winter in Cyrenaica and Libya in order to stand
by Greece, and Greece will never forget how much we gave, albeit unavailingly,
of the little we had. We did this for honor. We repressed the German-instigated
rising in Iraq. We defended Palestine. With the assistance of General de Gaulle's
indomitable Free French we cleared Syria and the Lebanon of Vichyites and of
German intrigue. And then in June, 1941, another tremendous world event
You have no doubt noticed in your reading of British history that we have
sometimes had to hold out all alone, or to be the mainspring of coalitions, against
a Continental tyrant or dictator for quite a long time-against the Spanish Armada,
against the might of Louis XIV, when we led Europe for nearly 25 years under
William III and Marlborough and 130 years ago, when Pitt, Wellington, and
Nelson broke Napoleon, not without the assistance of the heroic Russians of 1812.
In all these world wars our island kept the lead of Europe or' else held out alone.

Hitler's Mistake
And if you hold out alone long enough there always comes a time when the
tyrant makes some ghastly mistake which alters the whole balance of the struggle.
On June 22, 1941, Hitler, master as he thought himself of all Europe, nay indeed
soon to be, he thought, master of the world, treacherously, without warning, with-
out the slightest provocation, hurled himself on Russia and came face to face
with Marshal Stalin and the numberless millions of the Russian people. And then
at the end of the year Japan struck her felon blow at the United States at Pearl
Harbor, and at the same time attacked us in Malaya and at Singapore. Thereupon
Hitler and Mussolini declared war on the republic of the United States.
Years have passed sine then. Indeed every year seems to me almost a decade.
But never since the United States entered the war have I had the slightest doubt
but that we should be saved and that we had only to do our duty' in order to win.
We have played our part in all this process by which the evildoers have been
overthrown. I hope I do not speak vain or boastful words. But from Alamein
in October, 1942, through the Anglo-American invasion of North Africa, of Sicily
and of Italy, with the capture of Rome, we marched many miles and never knew
And then last year, after two years' patient preparation and marvelous devices
of amphibious warfare-in my view our scientists are not surpassed by any nation,
specially when their thought is applied to naval matte4s-last year on June 6 we
seized a carefully selected little toe of German-occupied France and poured millions
in from this island and from across the Atlantic until the Seine, the Somme, and
the Rhine all fell behind the advancing Anglo-American spearheads. France was
liberated. She produced a fine Army of gallant men to aid her own liberation.'
Germany lay open.

British Speeches of the Day

And now from the other side, from the East, the mighty military achievements
of the Russian people, always holding many more German troops on their front
than we could do, rolled forward to meet us in the heart and center of Germany.
At the same time in Italy Field-Marshal Alexander's Army of so man)' nations, the
largest part of which was British or British Empire, struck their final blow and
compelled more than 1,000,000 enemy troops to surrender. This 15th Army Group,
as we call it, are now deep in Austria joining their right hand with the Russians
and their left with the United States Armies under General'Eisenhower's command.
It happened that in three days we received the news of the unlamented de-
partures of Mussolini and Hitler, and in three days also surrenders were made to
Field-Marshal Alexander and Field-Marshal Montgomery of over 2,500,000 soldiers
of this terrible warlike German Army.
I shall make it clear at this moment that we have never failed to recognize the
immense superiority of the power used by the United States in the rescue of France
and the defeat of Germany.
For our part we have had in action about one-third as many men as the
Americans, but we have taken our full share of the fighting, as the scale of our
losses shows. Our Navy has borne incomparably the heavier burden in the
Atlantic Ocean, in the narrow seas and Arctic convoys to Russia, while the United
States Navy has used its massive strength mainly against Japan. It is right and
natural that we should extol the virtues and glorious services of our own most
famous commanders, Alexander and Montgomery, neither of whom was ever
defeated since they began together at Alamein, both of whom had conducted in
Africa, in Italy, in Normandy and in Germany battles of the first magnitude and
of decisive consequences. At the same time we know low great is our debt to
the combining and unifying of the command and high strategic direction of Gen-
eral Eisenhower.

Chiefs of the Staff
Here is the moment when I must pay my personal tribute to the British Chiefs
of the Staff with whom I have worked in the closest intimacy throughout these
hard years. There have been very few changes in this powerful and capable body
of men who, sinking all Service differences and judging the problems of the war
as a whole, have worked together in the closest harmony with each other. In
Field-Marshal Brooke, Admiral Pound, Admiral Andrew Cunningham, and
Marshal of the R.A.F. Portal a power was formed who deserved the highest honor
in the direction of the whole British war strategy an4 its agreement with that
of our Allies.
It may well be said that never have the forces of two nations fought side by
side and intermingled into line of battle with so much unity, comradeship, and
brotherhood as in the great Anglo-American army. Some people say, "Well, what
would you expect, if both nations speak the same language and have the same
.outlook upon life with all its hope and glory." Others may say, "It would be an
ill day for all the world and for the pair of them if they did not go on working
together and marching together and sailing together and flying together wherever
something has to be done for the sake of freedom and fair play all over the world."
There was one final danger from which the collapse of Germany has saved us.
In London and the southeastern counties we have suffered for a year from various
forms of flying bombs and rockets and our Air Force and our Ack-Ack )atteries
have done wonders against them. In particular the Air Force, turned on in good
time on what then seemed very slight and doubtful evidence, vastly hampered and
vastly delayed all German preparations.

Five Years

Blasting the Viper
But it was only when our Armies cleaned up the coast and overran all the
points of discharge, and when the Americans captured vast stores of rockets of
all kinds near Leipzig, and when the preparations being made on the coasts of
France and Holland could be examined in detail, that we knew how grave was
the peril, not only from rockets and flying bombs but from multiple long-range
Only just in time did the Allied Armies blast the viper in his nest. Otherwise
the autumn of 1944, to say nothing of 1945, might well have seen London as
shattered as Berlin. For the same period the Germans had prepared a new U-boat
fleet and novel tactics which, though we should have eventually destroyed them,
might well have carried anti-U-boat warfare back to the high peak days of 1942.
Therefore we must rejoice and give thanks not only for our preservation when we
were all alone but for our timely deliverance from new suffering, new perils not
easily to be measured.
I wish I could tell you tonight that all our toils and troubles were over. Then
indeed I could end my five years' service happily, and if you thought you had had
enough of me and that I ought to be put out to grass, I assure you I would take
it with the best of grace. But, on the contrary, I must warn you, as I did when
I began this five years' task-and no one knew then that it would last so long-
that there is still a lot to do arid that you must be prepared for further efforts of
mind and body and further sacrifices to great causes if you are not to fall back
into the rut of inertia, the confusion of aim, and the craven fear of being great.
You must not weaken in any way in your alert and vigilant frame of mind, and
though holiday rejoicing is necessary to the human spirit, yet it must add to the
strength and resilience with which every man and woman turns again to the
work they have to do, and also to the outlook and watch they have to keep on
public affairs.
On the continent'of Europe we have yet to make sure that the simple and
honorable purposes for which we entered the war are not brushed aside or over-
looked in the months following our success, and that the words freedom, democracy,
and liberation are not distorted from their true meaning as we have understood
them. There would be little use in punishing the Hitlerites for their crimes if law
and justice did not rule, and if totalitarian or police governments were to take the
place of the German invaders.

"We Must Make Sure"
We seek nothing for ourselves. But.we must make sure that those causes
which we fought for find recognition at the peace table in facts as well as words,
and above all we must labor that the world organization which the United Nations
are creating at San Francisco, does not become an idle name; does not become a
shield for the strong and a mockery for the weak. It is the victors who must
search their hearts in their glowing hours and be worthy by their nobility of the
immense forces that they wield.
We must never forget that beyond all lurks Japan, harassed and failing but still
a people of a hundred millions, for whose warriors death has few terrors. I can-
not tell you tonight how much time or what exertions will be required to compel
them to make amends for their odious treachery and cruelty. We have received-
like China so long undaunted-we have received horrible injuries from them our-
selves, and we are bound by the ties of honor and fraternal loyalty to the United
States to fight this great war at the other end of the world at their side without'
flagging or failing.

British Speeches of the Day

We must remember that Australia, New Zealand, and Canada were and are
all directly menaced by this evil Power. They came to our aid in our dark times,
and we must not leave unfinished any task which concerns their safety and their
future. I told you hard things at the beginning of these last five years; you did not
shrink, and I should be unworthy of your confidence and generosity if I did not
still cry, "Forward, unflinching, unswerving, indomitable, till the whole task is
done and the whole world is safe and clean."
[The Times, London]

Prime Minister
House of Commons, June 5, 1945

When regrettable incidents like those in Syria occur between nations so firmly
attached to one another as are the French and British and whose fortunes are so
closely interwoven, it is nearly always a case of the least said the better. On the
other hand I am assured that harm would be done by leaving some of the state-
ments in General de Gaulle's speech to the press of June 2nd unanswered by His
Majesty's Government, and I also feel that the House of Commons would expect
to be authoritatively informed.
The sense of General de Gaulle's speech was to suggest that the whole trouble
in the Levant was due to British interference. I think the Foreign Secretary has
already made it clear that, so far from stirring up agitation in the Levant States,
our whole influence has been used in precisely the other direction.
The most strenuous and, I think, successful efforts have been made by His
Majesty's Minister in Beirut to produce a calmer atmosphere in which negotiations
could be conducted for the settlement of outstanding questions between France and
the Levant States. I myself impressed on the President of Syria most strongly the
need for a peaceful settlement when I saw him in Cairo in February. We were
successful in persuading the Levant States to open negotiations which they had
previously been unwilling to do. They asked the French for their.proposals. That
was last February. While General Beynet was still in Paris awaiting his instruc-
tions, it became known in the Levant in April that the French intended to send
reinforcements. The Syrian and Lebanese Governments were greatly disturbed by
this delay in receiving the French proposals and also by the prospect of reinforce-
ments arriving. We had already represented to the French Government that the
arrival of reinforcements, however small, was bound to be misunderstood as a
means of pressure in these negotiations and to have serious repercussions, but our
representations did not meet with success.

No Designs Against French Interests
On May 4th, at the suggestion of the Foreign Secretary, I sent a friendly personal
message to General de Gaulle who had expressed to our Ambassador his concern
as to our ultimate intentions in the Levant States. I explained, as I have done on
many occasions, that we had absolutely no ambitions there of any kind. We want
only to be treated just like any other country would be treated. We seek no terri-
tory or any kind of advantage there that is not given to all other nations of the
world. I also explained that we had recognized France's special position in the
Levant. That does not mean we undertake to enforce that special position. We

The Levant States

shall be no obstacle to it either at the council table or in any other way. But I
explained that our commitments and .duties extended throughout the Middle East,
where our main task was to ensure that the Allied war communications were kept
secure from interruption and disturbance. We could not therefore disregard events
in the Levant States. His Majesty's Government has no designs against French
interests in Syria and Lebanon, and I was willing, I told General de Gaulle, to order
the withdrawal of all British troops from Syria and Lebanon the moment the treaty
had been concluded and was in operation between the French Government and the
Syrian and Lebanese Governments.
From this point of view I expressed the opinion that it would be a great pity
if the sending in of reinforcements above those needed as replacements were to
cause unrest or a rise of temperature. I urged that the reinforcing of French
troops at this moment, when the Levant States have been waiting for the treaty
proposals, would give the impression that they were preparing a settlement to be
concluded under duress, and thus poison the atmosphere for the negotiations which
were about to begin. General de Gaulle replied that General Beynet, the French
delegate general, was returning with instructions to open negotiations, but made no
reference to the question of French reinforcements. When these arrived, the effect
was as we had feared and as we had warned him would be the case.
On May 12th, General Beynet returned to Beirut and started his discussions
with the Syrian and Lebanon Governments. They informed him that they were
prepared to negotiate, but not if reinforcements arrived. In spite of this and of
our representations-I might almost have said entreaties, because it would have been
no exaggeration-French forces began to arrive on May 17th, and on account of
that, and because the Levant States considered that the French proposals went
further than they were prepared to discuss, the Syrian and Lebanese Governments
broke off negotiations.
The internal situation became very tense. In the towns of Damascus, Beirut, and
Tripoli, bazaars and shops were closed on May 19th, and there were demonstrations
in Damascus involving some firing from the grounds of the French hospital. About
a dozen people were injured but none killed. On the next day, May 20th, a serious
riot took place at Aleppo., Three French soldiers were killed and some injured.
French armored cars entered the town and cleared the streets after a good deal of
firing. It was estimated that at least ten civilians were killed and 30 injured. In
all the main towns of Syria the bazaars remained closed for some days, and in
Aleppo both the Syrian gendarmerie and the French troops patrolled the town. The
Lebanon towns of Beirut and Tripoli reopened their shops on May 23rd following.
an appeal by the Lebanese Government to the population to carry on their busi-
ness and leave it to the Government to defend Lebanese independence.

Attempts to Restrain and Mediate
Throughout these events we constantly counseled patience on both sides and we
were endeavoring to arrange diplomatic discussions at which the whole situation
produced by the breakdown of negotiations could be discussed and if possible settled.
The Syrian Government appealed earnestly to us to supply further arms for the
gendarmerie, to enable them to keep order. In spite of popular excitement, they
could, they said, retain controleof the situation provided the population were not
unduly excited by the too ostentatious French military precautions, and provided
that the gendarmerie, who were becoming tired, were reinforced. Nevertheless, the
French authorities persisted in their objection to our supplying any further arms
to the Syrian gendarmerie for their reinforcements, presumably because they were
afraid they might be used against themselves. By May 24th the French had to
evacuate their troops from the Citadel in Aleppo, but disorder was feared in the
process, and the French general threatened to shell the town if any shot were fired.

British Speeches of the Day

On May 25th, H.M. Minister was instructed by the Foreign Office to represent
to the Syrian Government at once that it was essential that they should maintain
control of the situation, especially at Horns and Hama, where great tension had
developed. Strong representations were also made in Paris and to the French
Embassy in London, drawing attention to the extremely tense local situation and
urging that the French Government should suspend the dispatch of the contem-
plated further reinforcement. It was pointed out that French armored car and
lorry patrols continued in the streets of Aleppo and Damascus, that aircraft were
flying low over the mosques during the hour of prayer, and that machine guns were
prominently placed on the roofs of buildings. This naturally excited the population.
We represented very strongly the unfortunate consequences which further disturb-
ances might have in the Middle East as a whole, which incidentally would affect
the communications of the war with Japan. Serious fighting broke out in Hama
on May 27th. The gendarmerie, under orders of the Syrian Government, at first
protected the railway station from being interfered with, but were eventually over-
powered. This was disappointing, as only the day before a British political officer
had been able to arrange a meeting between the various parties and a diminution of
the tension. I need not detail the subsequent spread of the disorders, but on May
28th the Syrian Minister for Foreign Affairs informed H.M. Minister that events
had overtaken him and that he could no longer be responsible for internal security.
At Homs and Hama there was shelling by the French, and the situation got
quite out of hand. Disorders spread to Damascus, where French shelling began
on the evening of May 29th-in this open and crowded city-and continued off
and on until the morning of May 31st. Official casualty figures for Damascus are:
killed, gendarmes 80, civilians 400; seriously wounded, 500; injured, 1,000. These
are of course approximate. The Foreign Secretary has already explained to the
House how these very unfortunate events overtook our proposals for international
discussions of the position and how a tense situation was created throughout the
Middle East which made it inevitable for us to intervene to restore a situation which
had got out of hand and might spread almost without limit.
I should like here to express my regret that the message to General de Gaulle
informing him of our intervention reached him some three-quarters of an hour
after the Foreign Secretary had made his statement in the House. I need hardly
say that no discourtesy was intended. I should also like to say that it was a pity
that General de Gaulle did not see fit to inform His Majesty's Government of the
instructions, which I understand he has said were sent to General Beynet late on
May 30th, to cease fire. At the moment when we took our decision we had no
reason to suppose that that was the case, and the shelling of Damascus was certainly
continued on the morning of May 31st.

A Firm Denial
I hope it will be clear from the information which has been given the House
that it is not true, as has been suggested, that we have endeavored to stir up agita-
tion, but that the very opposite is the truth. We have done our utmost to preserve
calm, prevent misunderstandings, and bring the two sides together. My promise
to General de Gaulle, to withdraw all our troops as soon as satisfactory arrange-
ments were made which would prevent disorder in Syria and Lebanon, was a serious
step in policy, and ought completely to have removed from the French mind a'ny
idea that we wished to supplant them or steal their influence. We do not intend
to steal the property of anybody in this war, though a caveat may be necessary in
respect to foreign enemies, and that not for our own benefit. General de Gaulle
also suggested that, after the recent breakdown of negotiations, disturbances were
caused by bands armed with British weapons attacking isolated French posts. As
the House has been informed by the Foreign Secretary, Syrian gendarmerie and

The Levant States

police were last year supplied by agreement with the French with some modern
rifles and equipment. I wish to make clear, here and now, that until we had to
intervene, no arms were issued by us to the Syrians or Lebanese except by agree-
ment with the French, although in the opinion of our military authorities the Syrian
Government would have been better able to maintain order if more arms had
been issued to their gendarmerie. For the sake of maintaining order we are now
doing that. We have now issued some arms. It is unfortunately true that some
200 men of the 16th Arab Battalion of the Palestine Regiment were involved in
minor disturbances in Beirut, capital of the Lebanon, on V-E Day-which is a
long time ago compared with these events-and the day after. There were a
number of other disturbances in Beirut at that time, and it would be absurd to
suggest that these instances had the smallest connection with the subsequent serious
disturbance in Syria. An immediate inquiry was held and the unit concerned was
withdrawn from the Levant States at once. There is no evidence at all to support
the allegation that the men carried a swastika flag.

Sir Edward Spears
Finally, I feel I must answer the insinuation that Sir Edward Spears was recalled
from his post as His Majesty's Minister in Beirut at the request of General de Gaulle.
The reasons for which he wished to relinquish his post, namely, to return to his
parliamentary duties before the General Election, were fully explained in com-
muniqu6s issued at the time, and the suggestion that he was recalled to please
General de'Gaulle is entirely unfounded. I may say that he was selected by me a
long time ago for this appointment in Lebanon because, among other qualifications,
he wears five wound stripes gained in his work as Liaison Officer between the French
and British Armies during the last war. He is the last person upon whom General
de Gaulle should cast reflections because he personally secured General de Gaulle's
escape to England from Bordeaux in his motor car and airplane on June 18, 1940.
[Mr. Vernon Bartlett (Bridgewater): In view of General de Gaulle's press state-
ment that he informed the Ambassador here at 11 o'clock on the night of Wed-
nesday, May 30, that the cease fire had been ordered, can he say when he first heard
from the French of the cease fire?]
Not until after the Foreign Secretary had made the answer which he did in
this house-not until some time after. When I woke up the morning after the
Foreign Secretary's statement I was delighted to see "cease fire" written in the
headlines of the newspapers. We had no information at that time.
[Mr. Clement R. Attlee (Limehouse): Can the Prime Minister give any indica-
tion of what proposals there are now for obtaining a settlement, and will he, before
the House rises, if there is any further information make a further statement?]
Yes, sir. Our acceptance of the idea that there should be a conference between
the British, United States and French Governments in London still stands, and we
hope that it will not be cast aside.
You have seen suggestions that it should be a five-power conference, bringing in
Russia and China. This would certainly cause a great deal of delay and require
very careful consideration on many grounds. If there is anything to tell the House
while it is in being I shall certainly take advantage of any opportunity that may be
[Mr. Aneurin Bevan (Ebbw Vale): Is not France in alliance with us in the
war against Japan and equally concerned about maintaining proper communications
with the Far East?]
That is perfectly true, [y
[By cable]

British Speeches of the Day

Chancellor of the Exchequer
House of Commons, April 24, 1945

Circumstances compel me to open my Budget at a moment when tremendous
events are happening and impending all over the world. As a consequence, I have
no firm basis for many of the calculations I have to make. No one can tell me
exactly when the fighting in Europe will end, and I do not know what the course
of the Japanese war will be. I have no means of estimating precisely the rate at
which our fighting men will return, or the speed at which our industries can be
brought back to a peace footing. Therefore while I shall do my best to present a
realistic picture, I must ask the Committee to recognize the peculiar difficulties of
my task on this occasion, and to regard this Budget as one which may possibly.
have to be superseded before the year is out.

Expenditure in 1944-45
In the year that has just closed our total expenditure exceeded for the first time
6,000,000,000. The precise total was 6,063,000,000, or 126,000,000 more than my
Budget estimate of a year ago. That excess is entirely attributable to the Vote of
Credit for which, as the Committee may remember, I took the very round sum of
5,000,000,000 and which, in the event, required 5,125,000,000. A large proportion
of the excess in fact arises from the year's expenditure on war damage which, as I
explained at the time, was excluded from my Budget estimate. My Budget figure
has thus been substantially justified. On items other than the Vote of Credit, the
amount required for Debt interest proved to be 5,000,000 less than the Debt charge
provided and left that amount towards the Contractual Sinking Funds. Expendi-
ture out of the Civil Supply Votes was almost exactly the same as the Budget esti-
mate, although that was the result of compensating Supplementaries and savings.
Of the Supplementaries of some 12,000,000, the most notable items were security
expenditure in Palestine, Supplementary Pensions, Colonial development and wel-
fare, and the extra Votes in all were exactly balanced by savings on a number of
different services and by an increase in Post Office revenue which reduced the excess
of Post Office expenditure over the self-balancing revenue.

Revenue in 1944-45
On the revenue side also my expectations were exceeded. For Inland Revenue
the estimate was put at the record total of 2,000,000,000, and this has been passed
by a margin of 29,000,000. The main items of increase were Income Tax, which
at 1,317,000,000 showed an excess of 17,000,000; Excess Profits Tax and National
Defence contribution, which realized 510,000,000-10,000,000 above the Estimate;
and Estate Duties which at 111,000,000 showed a surplus of 11,000,000. The
increased yield of Estate Duty was mainly in the lower ranges of estates, and is a
reflection of the more equal distribution of wealth. On other Inland Revenue
items there were deficiencies amounting in all to 9,000,000.
The Customs and Excise Duties yielded 1,076,000,000, compared with the
Budget estimate of 1,038,000,000, that is to say, a surplus of 38,000,000. There
were two main reasons for this surplus. First, in spite of the departure during
the year of many consumers on military service abroad, there has again been a sub-
stantial rise in the home consumption of beer. The Beer Duty receipts have in
consequence exceeded Budget expectations by nearly 20,000,000. In the second
place, there has been a large increase in the turnover of aviation spirit. This is,
however, on Government account and the consequent yield of the duties on im-

The Budget

ported oil means a transfer from one pocket to another. This accounts for a surplus
over the estimate of a further 20,000,000. There were smaller differences above or
below the estimates under other Customs and Excise headings, but these almost
cancel out.
Miscellaneous revenue was 66,000,000 higher than the estimate, the excess
arising in part because receipts from war damage contributions and premiums, were
as usual excluded from the estimate.
Revenue and expenditure thus exceeded the estimates by 136,000,000 and
125,000,000 respectively. As a result the amount by which expenditure over the
year exceeded revenue was 2,825,000,000 or 11,000,000 less than the Budget
estimate. But the really significant feature of 1944-45 is that the proportion of our
total expenditure met out of revenue was 53 per cent, a higher proportion than in
any previous war year. Such a result, in the sixth year of war is a striking mani-
festation of the steadfastness and resolution which have helped to bring this country
to the eve of victory.
Borrowing in 1944-45
During the past year we exercised the option to repay, on May first, the 5 per
cent Conversion Loan, 1944-64, amounting to 317,000,000. Including provision
for that transaction and for various other items, the cash borrowed during the year
was 2,931,000,000, or 181,000,000 more than in the previous year. The amounts
and proportions which we raised by small savings and by the sales of the various
issues of Bonds to the public were slightly less than in the previous year, but that
is largely to be attributed to the fact that in the closing weeks of the past year we
did not have the assistance of any special drive in the Savings Campaign.
[Mr. Stokes (Ipswich): Hear, hear. It is all humbug.]
On the other hand, we borrowed more from extra-Budgetary funds than during
the previous year and in the result the proportion of our total borrowings which
took the form of floating debt in the hands of the market was rather less than in
1943-44. It was, in fact, 37 per cent as against 39 per cent.
Totals of War Finance
The Committee may at this point like to have a few details of our total expendi-
ture on all services, war and civil, during the five and a half years of war up to
March 31st of this year. Total expenditure was 27,400,000,000. Of this 13,300,-
000,000, or no less than 49 per cent, was met out of current revenue. To provide
for the balance, for debt repayments during the period and for other capital pur
poses, we borrowed in all 14,300,000,000, and that total was raised in this way:
through small savings, 22 per cent; by the sale of other war loans to the public,
33 per cent; by floating debt in the hands of the market, 31 per cent; from various
extra-Budgetary funds, 6 per cent; and from various other sources, 8 per cent. I
think that as part of an up-to-date record of our financial effort during the last five
and a half years these figures speak for themselves. I would add only this comment.
It is estimated that during the war period the amount provided by way of taxation
and saving towards financing the Government's expenditure and thus no longer
available for expenditure on personal consumption has been no less than 42 per cent
of the whole of the personal income of the community during the period. Behind
that simple percentage lies a striking record of individual sacrifice and effort. More-
over, if we look behind the financial record at its economic counterpart, it serves to
remind us that we shall always have to make a deliberate choice as to how our avail-
able national resources shall be used. In so far as it is deemed necessary or desirable
to devote those resources to services of a national character, whether it be defense,
or houses, or schools or anything else, or to the provision of capital equipment for

British Speeches of the Day

industry, it cannot also be available to satisfy personal demands for consumable
goods or services.

Sources of Finance in 1944
But to return to the.figures for 1944, the Committee may remember that in my
last Budget speech I made certain estimates of the kind that have become customary
during the war as to the funds available to cover our expenditure during 1944-45.
The outcome for the calendar year 1944 will be found in Tables 17 and 19 of the
White Paper on National Income and Expenditure. The amount of overseas dis-
investment appears to have been very close to the estimate. The only other item on
which I need comment is the figure for private saving. In spite of some further
increase of private income after payment of taxation, private saving in all its forms
was a little less than in the previous year. This is because there was some increase
in expenditure on personal consumption. If reference be made to Tables 21 and 22
of the White Paper, it will be seen that this increase is mainly accounted for by
expenditure on food and clothing. In the case of food both the actual expenditure
and the quantity consumed, after falling in 1943, have risen slightly and returned
to about the 1942 level. In the case of clothing, the increased expenditure in 1944
appears to have been largely due to the incidence in the calendar of the opening of
new coupon periods. In the case both of food and of clothing the increase in
expenditure was the direct consequence of the rationing arrangements made by the
Government Departments concerned and was not due to any inflationary factors. In
less essential directions, such as drink, tobacco and entertainments, the increases in
expenditure which have occurred are appreciably smaller.

Various Taxation Questions
What I have said so far relates to the year just completed. Before I review our
general position and as I look ahead into the future and before I attempt to fit the
Budgetary prospects for the coming year into that picture, there are a few special
matters relating to taxation which I must mention. Many of these will require pro-
visions in the forthcoming Finance Bill. The first-which will not, as it happens,
require either a resolution or legislation-concerns the duties under the Safeguarding
.of Industries Act and the Imports Duties Acts. During the war, as a matter of
convenience, an extensive range of goods predominantly imported for Government
purposes has been exempted from duty. This special arrangement will, of course,
have to be terminated before private importations are resumed on any considerable
scale. Although large Government importations will no doubt continue to be neces-
sary in connection with the war with Japan, the general position will be substantially
changed when victory over Germany has been achieved, and it is consequently pro-
posed to restore these duties to their former level by Treasury Order about that date.
Exemption from duty will be continued, however, for a further period in respect
of a limited range of finished military supplies.

Hydro-Carbon Oils
In my Budget speech last year I referred to the intention of my right hon.
Friend the Minister of Fuel and Power and myself to appoint a Committee to study
certain questions of great industrial significance in connection with the duties on
hydro-carbon oils. The Committee which we set up was presided over by Sir Amos
Ayre, and hon. Members will find a full disquisition upon this important and intri-
cate subject in the Committee's most able and useful Report which was published
as a White Paper on April llth. I propose to accept the recommendations of the
Committee. The Finance Bill will include a provision freeing from Customs duty
imported hydro-carbon oils used as raw materials for chemical synthesis. Provision

The Budget

will also be made for an allowance of an equal amount to the Customs duty in
respect of indigenous oils used in these processes, in order that the competitive posi-
tion in respect of home-produced materials shall not be worsened by this change.
There are many who believe, notably in the United States, that synthetic chemical
processes based on the use of hydro-carbon oil are going to be of rapidly growing
industrial importance, and will affect the traditional manufacturing methods of
many industries which lie outside the field of synthetic chemistry. Research on
these problems has been active in several countries during the last five years. I hope,
therefore, that the double gift I have found myself able to make, towards the cost
of research in my last Budget and now in respect of the raw materials of this impor-
tant new industry, will lead to an intensive and co-operative effort, so that we can
quickly establish ourselves in a worthy position in relation to these new develop-

Further Customs and Excise Matters
Still in the field of Customs and Excise duties there are one or two other matters
on which I will touch very briefly. I have to propose a Resolution covering the
repeal of certain allowances which have been payable for many years to users and
exporters of spirits arising from the fact that the Excise law imposes certain restric-
tions on the distillers' operations. The repeal of the allowances is a corollary to
another proposal which I shall introduce in the Finance Bill to modernize the Excise
law and to remove restrictions which I am advised are no longer necessary in the
interests of the Revenue. The interrelation of these two proposals is complex, and
an explanatory White Paper on the subject is being issued today.
The duty of 4 per cwt. on hops, which has been in existence since the control
introduced during the last war ended in 1925, expires in August next. Those con-
cerned are in agreement that it should be renewed, and after consultation with my
right hon. Friend the Minister of Agriculture I propose to renew it for a further
four years, subject in all respects to the same conditions as before.
I have also to propose a small modification of the law relating to the exemption
of partly educational entertainments from entertainment duty. As the law stands.
it requires the Commissioners of Customs and Excise to be satisfied not only as to
the character of the society providing the entertainment, but also as to the cultural
quality of each individual entertainment. This latter requirement, as the Committee
will readily understand, has involved invidious distinctions between different works,
and the difficulties have not been entirely overcome even with the assistance of the
Committee which, as I announced in the House on October 19, 1943, I appointed
to advise the Commissioners. I therefore propose to make the exemption depend
on the character and activities of the society, without the necessity for classifying
any particular works as cultural or non-cultural. I do not regard this as necessarily
a final solution of a somewhat difficult question, but I hope it will improve the exist-
ing position.
Finally, there will be a short Resolution dealing with procedure in connection
with Purchase Tax and utility goods.

Motor Taxation
I now turn to the duties on motor vehicles. In a statement in the House on
December 19th last I announced that I had been in consultation with the motor
industry, in fulfillment of the promise which I made in my Budget speech last year
that I would be ready to listen sympathetically to representations if it was thought
that a change from the present horsepower tax to some other basis of taxation on the
vehicle, yielding about the same amount of revenue was desirable. In that state-

British Speeches of the Day

ment I said that I had concluded that there would be appreciable advantage in
altering the basis of calculation from the cross-section of the cylinders, as now, to
their cubic capacity, and that the rate to secure about the same amount of revenue
as is produced by 25s. per horsepower would be 1 per 100 cubic centimetres.
There have now been further consultations with the industry on the details of
this proposal, particularly as regards the steps by which the new duty is to be gradu-
ated. This is a matter on which there is substantial difference of opinion and I
have found real difficulty in deciding what is the right course. After considering
the various views expressed, my noble Friend the Minister of War Transport and
I have come to the conclusion that it would be best to make as little change as pos-
sible in the scheme of graduation, and we propose therefore that the duty shall
proceed, subject to a minimum as at present, by steps of 100 cubic centimetres.
This new scheme of duties will apply only to vehicles first registered after the
date of its introduction. As there is necessarily uncertainty as to when cars will be
coming forward from production which have been manufactured with knowledge
of the new basis of taxation, the date of introduction will have to be fixed later. It
certainly cannot be as early as January 1st next, which I mentioned last year in my
Budget Speech. I should naturally propose to consult the interests affected before
the date is fixed. What the rate of duty will be at that time I cannot now prejudge.
In the case of omnibuses and coaches and goods vehicles I propose to introduce
scales which progress by one seat and one quarter ton steps respectively. Details
will be found in the White Paper. This change will apply to all such vehicles after
January 1st next.
I hope these changes will be of some assistance to the motor industry in pre-
paring for post-war production. I know, of course, that what this industry would
really like is a reduction of taxation, but that I am not at this moment in a position
to concede. The new proposals, however, do not in any way determine the future
rate of taxation. That must clearly be a matter for consideration from time to time
in the light of circumstances.

Pay-as-you-earn in Practice
The new system of deducting tax from salaries and wages known as Pay-as-you-
earn has now been in operation for a full year. In my Budget statement last year
I indicated that the scheme had been successfully launched, and I am now glad to
be able to inform the Committee, at the end of the first year of working, that it
has operated in this first year with remarkable success. When the scheme was first
presented to Parliament some doubts were expressed whether it was not too com-
plicated. But events have shown that the late Sir Kingsley Wood .was amply justi-
fied in taking the bold course and deciding on a scheme which not only relates the
tax deductions to the weekly pay-packet but ensures within narrow limits that the
correct amount of tax is paid at every point of time over the course of the year,
despite fluctuations in pay. At all events there can be no doubt that Pay-as-you-earn
is a boon to the employee who has to live on a weekly or monthly budget and I
believe it has been generally welcomed by him as such. He is up to date with his
tax payments and no longer has an arrear of tax hanging over his head if his wages
fall or cease. On the contrary not only does the tax deduction fall or cease in
sympathy, but the cumulative principle, as it has come to be called, on which the
system is based has the effect of giving back to him if this happens some or all of
the tax deducted in the earlier part of the year.
Here are some figures which illustrate the magnitude of the task involved in the
introduction of Pay-as-you-earn. About 16,000,000 persons come within the scope of
the scheme, of whom the number liable to tax is about 12,000,000, consisting of

The Budget

7,500,000 weekly wage-earners and 4,500,000 other employees or office holders.
About 1,000,000 employers are concerned in operating the scheme. In the year
just concluded the total amount collected under the scheme was about 540,000,000,
an increase of about 100,000,000 over the corresponding yield for the previous year.
Of this yield 250,000,000 was paid by manual wage-earners, compared with a yield
of 200,000,000 in the previous year.
[Mr. Thorne (Plaistow): Are any women included?]
All employed women are included. The increase of 100,000,000 in the yield
over the whole field is mainly due to the fact that where earnings are increasing
the Exchequer gets the increase on them immediately instead of levying the tax on
the lower earnings of some past period; but some part of the 100,000,000, perhaps
a quarter, is due to the efficiency of Pay-as-you-earn as a means of collection, which
has succeeded in bringing into the net large numbers of individuals whom the old
arrangements were not sufficiently swift and flexible to catch.
These figures illustrate the importance of the Income Tax reform reflected by
Pay-as-you-earn, and I think a tribute is due to all those concerned in working the
system for the success achieved. I should like first of all to thank employers and
employees for their co-operation. The working of the system has meant a con-
siderable burden of work for employers, work of a new kind.which has been cheer-
fully borne despite war conditions, but the worker, too, has played his part. 'The
success of our Income Tax system has always depended upon the willingness of the
taxpayer to pay.
This spirit has been evident in the ranks of the workers in the operation of
the new system. The administration of Pay-as-you-earn has placed an enormous
burden on the Inland Revenue Department, which had to face not only the taxation
of largely increased numbers but the application of an entirely new system of taxa-
tion involving, by its very nature, new complications and new methods. The
Department has had to face the task under war conditions, with an acute shortage
of the trained staff necessary for such an important reform, and the success that
has been achieved has meant very heavy pressure of work and a great strain on a
staff already fully employed in the war effort. I am sure the Committee will agree
that a special tribute is due to the Inland Revenue staffs.

Excess Profits Tax and Small Businesses
In reviewing the incidence and effects of wartime taxation I have again received
many representations regarding the incidence of the 100 per cent Excess Profits
Tax on new and expanding businesses which may enjoy only a low pre-war stand-
ard. I explained last year the reasons why, so long as the war in Europe continues,
there can be no question of reducing the rate of Excess Profits Tax or of making
any general alteration in its basis of charge. I am sorry to say that those reasons
still hold. It is, no doubt, true that the 100 per cent rate weighs heavily on concerns
which have had a big expansion in turnover for, subject to the provision that an
allowance is made in respect of additional capital employed in the business, the 100
per cent takes away the whole of the additional profit arising from the expanded
turnover, including any increase due merely to a change in the standards of values.
But it must not be forgotten that the law provides for a post-war credit which will
in effect' reduce the 100 per cent rate retrospectively to 80 per cent and that this
credit, less the Income Tax attributable thereto, is accumulating and will be avail-
able as a fund to enable industry to face the task of transferring from war produc-
tion to peace production.
In the case of small businesses, however, there is a special case for consideration;
a case which, I think, is recognized on all sides. As the Excess Profits Tax con-
tinues from year to year, it cannot but have a cramping effect on the growth of

British Speeches of the Day

small and young enterprises, an effect quite disproportionate to the revenue in-
volved. In my Budget of last year I provided, for that reason, a special relief for
small businesses. It took the form of increasing practically all types of standard for
small businesses by the sum of 1,000. The exception to this relief was the profits
standard, and the result has been that small businesses which had only a low profit
standard, but may now, as part of the war effort, be producing on a much larger
scale, obtained no immediate relief.
I think, on further consideration of the matter, that I should now widen some-
what the scope of what I did last year. I propose to give a further relief to small
businesses, which will be in such a form as to extend to profits standard cases as
well as to other cases. The relief that I propose is based on a principle already
applicable to small businesses in connection with the National Defence Contribution.
That Contribution, as the Committee may remember, which represents an alternative
charge to the Excess Profits Tax if it is greater in amount than that tax, is a tax
of Is. in the on the total profit. But where the total profit is less than 12,000 an
allowance of one-fifth of the amount by which the profit falls short of 12,000 is
deducted from that profit before" National Defence Contribution is levied on it.
I now propose applying that principle similarly to Excess Profits Tax, that where the
existing standard is less than 12,000 there will be an addition to the standard of
one-tenth of the amount by which the existing standard falls short of 12,000.
Thus, where the standard under the existing law is, say, 4,000, the effect of my
proposal will be to make the standard 4,800 by the addition of one-tenth of the
8,000 by which the existing standard falls short of 12,000. This relief will apply
to all existing standards, whether the minimum standard, the capital standard or
the profits standard. Its effect will be to raise the exemption limit of the Excess
Profits Tax to 3,000 and to raise the personal standard for the single working
proprietor from 2,500 to 3,450. The relief dwindles to nothing as the pres-
ent standard approaches 12,000 and it has, of course, no effect at all where the
existing standard exceeds 12,000. Taking into account the gain in Income Tax
which will result by reason of the abatement of Excess Profits Tax charge leaving
a higher amount to be charged to Income Tax, the cost of this proposal for relief
for small business I estimate to be about 12,000,000, a sum which is of course also
a measure of the benefit to the taxpayer.

Double Taxation
I come now to a subject of the greatest importance which has been occupying
the thoughts of myself and my advisers for many months past-the question of
double taxation. The Committee will be glad to hear that I am able to report very
substantial progress. The Income Tax Bill, which is at present under the considera-
tion of Parliament, is directed to carrying out important changes of Income Tax
policy designed to help industry to face the modernization and re-equipment which
will be so vitally necessary in the post-war period. I have regarded the relief of
double taxation as a second main step in the same direction, designed this time to
help in particular that part of industry which will in future be so vital to the well-
being of this country, namely, that concerned with our exports.
Under our existing Income Tax Law a system of relief from double taxation is
provided within the Empire but, for technical reasons into which I need not now
enter, the system does not provide -full relief against duplicating charges even within
the Empire. In the case of foreign countries we have no general arrangement for
relief of income from double taxation, though there are special provisions df a very
limited character concerned with shipping and aviation and with agency bui~5inC5~.
Apart from these small exceptions it is true to say that British trading concerns earn-
ing profits in foreign countries and paying tax in the foreign countries on the profits
so earned can at present obtain no relief from double taxation. There can be no

The Budget

question that this state of affairs must not be allowed to continue. With the present
high rates of taxation and the prospect of taxation remaining high for some years
to come we can no longer acquiesce in a system which places burdens that are
neither just nor tolerable on those who take part in the overseas activities which
are essential to our economy.
We could, of course, deal with the problem by ourselves if we liked. There is
no reason why this House, if so minded, should not provide that income or assets
coming under charge to tax in foreign countries should be charged in this country
only to the extent that the appropriate British charge might exceed the foreign
charge. Such an allowance, no doubt, provides an appropriate solution over part of
the field, but the unilateral approach is not in my view the way to tackle the ques-
tion. Double charges of this kind ought to be eliminated in a regulated fashion
which will distribute the cost equitably between the Governments concerned and
for that purpose we have to proceed by agreement with like-minded foreign Govern-
Accordingly, as the Committee knows, we embarked some time ago on discus
sions with the United States on the general question of providing relief from
double taxation in respect'of income coming under charge to tax both in the United
States and in the United Kingdom, and I am glad to be able now to announce that
those negotiations have resulted in a double taxation Treaty between the two coun-
tries. The terms of that Treaty are being published today and will be available to
Members in a White Paper.
The Treaty covers all income liable to tax in both countries. Its provisions are,
therefore, complex and I cannot do more than indicate some of its major features.
In the case of trading profits, the United States is one of the countries with which
we already have an agreement for the relief of shipping profits and the Treaty con-
firms that agreement and extends it to include the profits of air transport which,
like shipping profits, will in future come under charge only to the tax of the
country to which the company running the air transport belongs. As regards trading
profits generally, the Treaty adopts the system of crediting the foreign tax against
the home tax. The United States already has this system in force for its own trading
concerns and the United Kingdom will now adopt the like principle and allow the
United States tax paid on profits made in the United States to be credited against
the United Kingdom tax payable by the concern on the same profits. A similar
credit will be given for the United States Excess Profits Tax against the United
Kingdom Excess Profits Tax.
There are also provisions for profits made through agencies which are similar
to the arrangements already made with various countries under the existing limited
powers. And there are provisions for the settlement on favorable terms of old
arrears of United States tax due from United Kingdom residents.
SThese arrangements about trading profits are perhaps the most important
for the purpose of freeing commerce between our two countries. But fruitful
economic relations cover a wider field than direct trading alone, and the Treaty
contains important provisions in regard to dividends, interest, royalties, rents and
income from employment. At present dividends flowing from the United States
to this country are subjected to a "withholding tax," as it is called, of 30 per
cent, and United Kingdom tax is then levied in full on the balance of 70 per
cent that remains. Under this agreement the rate of withholding tax is reduced
from 30 to 15 per cent in the ordinary case and to 5 per cent in the case of divi-
dends received by a United Kingdom company from a subsidiary in the United
States. The tax withheld under this arrangement will in future be set against
the United Kingdom liability as in the case of trading profits. Furthermore this
setoff will extend also, in the case of ordinary dividends, to the tax paid by the

British Speeches of the Day

United States Corporation, which is generally at the rate of 40 per cent on the
profits out of which the dividend is paid.
As regards interest and royalties, provision is made on a reciprocal basis for
complete exemption from tax in the country from which the interest or royal-
ties are derived in those cases in which the recipient is not trading in that country.
So far as interest is concerned it will be recalled that many British Government
securities already carry tax exemption where the interest flows to a non-resident
and this principle is now extended to cover all interest on both sides. The ex-
emption of royalties includes literary as well as industrial royalties. It also applies
to royalties received by British film producers for the exhibition of their films in
the United States, thus bringing American taxation of films into line with the
existing treatment of foreign films exhibited in this country.
Our discussions with the United States also resulted in the preparation of a treaty
to cover double taxation arising in the field of Estate Duty. Under it the two
countries agree to adopt a common code of rules for determining the situation of
property where both countries have a prima facie claim for tax; and where the
code admits of double taxation, provision is made for relief by means of tax
credits. The administration of the reliefs and exemptions provided in these treaties
will necessitate the confidential exchange of information between the Revenue
authorities of the two countries and the provisions for this exchange extend to
information necessary for the prevention of fraud and avoidance.
For technical reasons Resolutions will be required for both the Income Tax
and the Estate Duty Treaties, and the legislation to be included in the Finance
Bill will be wide enough not only to give statutory effect to the United States
Treaties, but also to enable similar agreements to be concluded with other coun-
tries. First and foremost, we desire to come to an arrangement with the Domin-
ions which, in place of the existing partial relief, will give complete relief from
double taxation within the Empire. We have already informed the Dominions of
the general sense of our agreement with the United States, and I hope that in the
course of the summer we may be able to open discussions with them with the
object of adjusting the existing measures of relief with effect from the beginning
of the present Income Tax year.

Overseas Finance
So much for these particular questions of taxation policy. I should like now to
examine some of the major factors in our general financial situation before I turn
to the details of finance for the coming year. We have fought this war without
stinting any part of our effort on grounds of cost. Whatever was physically pos-
sible as an aid to victory was provided. The limits to our efforts were physical and
not financial. We are now near reaping the reward of our single-mindedness, but
the phase of not counting the cost has to come to an end or we may find our-
selves unable to enjoy much of what victory might have been expected to secure
for us.
Everyone knows that the war will not be over with the defeat of Germany. It
may not be so well realized that a great measure of our present war effort will
still be required to finish off Japan as quickly as possible. We must concen-
trate upon that task. Every member of the Committee knows that in an expan-
sion of effort and of organization as vast as we have undertaken, all sorts of what
I may call vested interests in free spending grow up. That spending was well
justified while it was an essential part of the total war against Germany and
Japan, but we need to revise our war policies and decisions, and to reduce estab-
lishments with the minimum of time lag, to cut away ruthlessly what no longer

-The Budget

serves the essential purpose of defeating Japan, whatever good part it may have
played in the past. On this non-essential field Treasury control must now in
one form or another immediately assert its effective authority. If we are slow in
this we may lose tens, if not hundreds of millions. Everyone, I know, will approve
of this policy in general, but its detailed application may not be so popular in all
quarters. I therefore appeal to this House for help in the task of severe and
searching scrutiny.

Overseas War Expenditure
In this connection, it will be particularly necessary to pay attention to expend-
iture overseas, for it is our overseas financial position which is our main immed-
diate cause for anxiety. In my last Budget statement I told part of a story of
the growth of our overseas indebtedness. This indebtedness began to accumulate
owing largely to our military expenditure in the Middle East and India. For
five years we alone provided practically the whole cash outgoings for the war over
the territories from North Africa to Burma. With that expenditure we stopped
Rommel in the battle which history may well regard as the turning point of our
military fortunes. Moreover, we have in the Burma theatre waged war against
the Japanese on a scale which has only recently been surpassed anywhere in
the Far East. No one will grudge such expenditure, but to obtain the results
achieved we inevitably had to dispense with the detailed control of expenditure
which might have checked the prosecution of the war. The principles of good
housekeeping scarcely apply when you are fighting for your lives over three con-
tinents far from home. We threw good housekeeping to the winds, but we saved
ourselves, and we helped to save the world.
A-large part of the area was not only a battlefield, but it was also part of our
lines of communication. In modern war it is inevitable that behind the bayonet
strength there should be a vast ancillary military organization. That organization
is now spread over North Africa, South Africa, East and West Africa, Egypt, the
Levant, the Middle East and India, as well as in the territories bordering the
Pacific scene of operations, such as Australia and Ceylon.
Because of supply and shipping difficulties, it has been necessary to make
large local purchases of supplies and to buy local services, for which we have had
to pay in many cases very high prices. We have had to borrow local currency for
these' local purchases. High prices are, of course, reflected in the size of our in-
Now, as we shift our military effort from the territories which were bases
against Italy and Germany to the territories which will be the bases against
Japan, we must take great care that, consistent with military safety for our lines
of communication, we reduce local expenditure as far as the operational needs
and the welfare of our troops allow. We must be careful not to create in the bases
which were used against Germany any of those vested interests in free spending
of which I have spoken. When we cease having to fight Germany we must not
maintain the overseas apparatus which was necessary for that fight.
Let me tell the Committee the total of our war expenditures in the fields and
bases of operational lines of communication in Asia and Africa, apart altogether
from what we have spent in North and South America and in Europe. Exclusive
of the food and raw materials which we have purchased from these areas, and
exclusive also of the munitions of war and other supplies for the troops which
we have sent to those areas, we have incurred local cash expenditures estimated
at 584,000,000 in 1942, 689,000,000 in 1943, and 716,000,000 in 1944. Nor does
there seem to be much prospect of a substantial reduction in this expenditure in
the coming year. It will be seen that it is largely this expenditure which is re-

British Speeches of -the Day

sponsible for the war indebtedness and loss of overseas assets which we have
The total of these expenditures over the three years runs to 1,989,000,000. A
reference to the White Paper will show that our total disinvestment throughout
the world during the same period amounted to almost an identical figure. It
follows that, apart from these local war expenditures, our balance of payments,
including payment for everything we have imported from the-areas now in question,
as well as from elsewhere, has broken even over the last three years, for though
some growth in our overseas liabilities has been incurred otherwise than for the
overseas local expenditure just mentioned, this has been approximately covered
by an increase in our reserves.
The physical resources of the Empire have, of course, been pooled throughout
the war. But on the financial side the arrangements within the sterling area
have necessarily taken a somewhat different form from the Mutual Aid arrange-
ments in force with Canada and the United States. It would have been impos-
sible, for example, for countries like Australia and New Zealand to have pro-
vided us on a basis of Mutual Aid with all our requirements of foodstuffs and raw
materials on which so large a part of their whole economy is built. With these
countries the principle was adopted that each member of the Commonwealth in
the sterling area would be financially responsible for the maintenance of its own
Forces, wherever they might be serving, and also for such supplies as it might
need from other parts of the area. It thus comes about that, broadly speaking, we
pay for local war expenditures incurred on our account.
In addition, each member of the Commonwealth which receives Lend-Lease
from the United States is incurring expenditure in providing reciprocal aid for
the United States Forces, apart from the expenditure on its own war effort. Great,
however, as has been the financial burden which they have shouldered, each in their
own way, in pursuance of the common task, our partners in the Empire would,
I feel sure, be the first to admit that, partly as a result of the arrangements I
have described, and partly as the result of other factors, their external position
has in fact been improved, indeed, in some cases transformed, whereas our own
has become increasingly grave.
Relations between the sterling area and the dollar countries raise a fresh set of
problems. The Mutual Aid that we ourselves accord to the United States and
to our European Allies, which is now on a vast scale, is more than matched by the
liberality of the American Lend-Lease and Canada's Mutual Aid. This does not-
mean that the whole of our expenditure in those countries is covered in this way.
Last year, for example, we incurred United States dollar expenditure-cash ex-
penditure-of the order of a billion dollars on items not covered by Lend-Lease.
This, however, we have met out of various sources of dollar income, including
the substantial personal expenditure of the American Forces in this country.
Virtually everything that is required here by the American military authorities
is provided by us free of charge as Mutual Aid, and their expenditure in this country
is negligible, whether on billets, air fields, transport, hospitals and miscellaneous
supplies, including food obtained in this country. But this, of course, does not
apply to the personal expenditure of the troops.

Our Overseas Liabilities
As is now well known, our liabilities to overseas creditors by the end of last
year had reached, and now exceed, 3,000,000,000. Including the expenses of
clearing up arrears and of demobilization, the total is likely to reach at least
4,000,000,000 before we are finished, and this liability takes no account of the
assets we have sold. The best means of liquidating these financial consequences

The Budget

of the part we have played in the war, so as to free the flow of international com-
merce and to allow to the sterling balances the minimum possible freedom of
use, is an outstanding problem of the post-war settlement.
I cannot now enter on a discussion of this settlement in which others besides
ourselves will have a part to play, and which must be undertaken in consultation
with the United States and Canada and the holders of sterling. Many factors are
relevant and will have to be taken into account in the final reckoning. We have
incurred these liabilities as an expression of the burden of the war for the help,
and indeed on behalf of, most of the holders of the balances. It would be utterly
contrary to the reputation of this country -for fair dealing that we should settle
this matter by some unilateral act without preliminary consultation and an at-
tempt to arrive at a settlement which all concerned will be able to regard as reflect-
ing the true facts of the position. At the same time, it would be contrary to the
elementary principles of justice and fair dealing between nations that obligations
incurred in this way should be treated as an ordinary commercial debt. But
it need not be thought by anybody, either in this House or elsewhere, that the final
burden upon us of the settlement will be light.
Whatever means are found for clearing up the past, we shall still be faced with
the formidable problem of developing a volume of exports sufficient to pay for
what we need from overseas and to meet our financial obligations in the new condi-
tions which will exist after the war. For the first three years after the war I foresee
a very heavy deficit on current account in the balance of payments. In other words,
for the imports which will be absolutely essential to feed our people, and to pro-
vide raw materials for industry, we shall have to incur further indebtedness. How
large that indebtedness is and how long it lasts, depends on two questions to which
in large part we ourselves can provide the answers. The first is the sense of urgency
with which we treat the expansion of our export trade, even if that means waiting
a little longer before we satisfy our personal wants in full. I do not want on this
occasion to speak in detail about the expansion of our exports, but I do want
to say to the Committee with all possible emphasis that for the next five years
much of the creative intelligence in industry, which has come so splendidly to the
assistance of the Government during the war, will have to devote itself to this
issue, and we shall all have to accept the discipline which this urgency involves.
The second question is how far we shall be willing to enforce a strict economy
in external cash expenditure. Our overseas cash expenditure will not, of course,
come to a sudden end even when the Japanese war finishes. There will be large
numbers of troops abroad and their return will take time and will of course cost
money. What we must avoid is unnecessary commitments which might be beyond
our continuing strength, and we must closely limit external expenditure which
does not produce a fairly quick return.
In the home field if we match prudence with courage, and particularly if we
curb impatience and recognize beneath any political controversies the need for
national solidarity in tackling the fundamental economic issues of the peace as we
have tackled the issues of the war, then I shall have comparatively little anxiety.
But I am anxious on the external side about demands which may come from all
sides of the House for expenditure on this or that form of political or personal
satisfaction. We shall have to undertake heavy obligations in the interests of the
security of the world. I think everyone will agree that this must remain a prior
charge upon our economy. But we must be very careful to see that these obliga-
tions are accurately defined, that they represent in fact full, but no more than full
acceptance of the obligation, and we must see to it that our position and power
in the world are represented by effective strength which we know we can main-
tain physically and financially. We must also aid in the reconstruction of our over-
seas dependencies towards which we have special obligations, thus enabling them to

British Speeches of the Day

build up their own income in order to improve their own standard of living and
to enable their products, some of which are essential for the economy of the world,
to be put at the disposal of the world as soon as possible. Beyond these pressing
needs, all external expenditure will have to be severely limited and to be looked
upon in nearly all cases as a luxury, to be increased only as we increase our net
external income.

Home Finance: The.National Income White Paper
Returning to our domestic affairs, I should like to say a word about the
White Paper on National Income and Expenditure which I mentioned earlier.
The Paper circulated to hon. Members today covers the same general ground as
the paper issued on Budget day for the last four years. But the technique of this
Paper is novel and is developing, and this year the form of it has been a good deal
altered and expanded in order to make the underlying logic and the analysis of
the statistics more generally intelligible. I cannot expect that this White Paper
will ever be a best seller. I fear that the new form of presentation is inevitably
somewhat lengthy. But I am hopeful that it will enable a wider public to under-
stand the main lines of a national statistical study which will be of primary im-
portance for us as the factual basis of sound policy particularly during the next
few years.
It would take too long on this occasion to explain all that the new version of the
White Paper aims to do. I must leave it to speak for itself to a large extent. In a
word, it seeks to measure the national income, that is the total money value of
all the goods and services produced by the community, and to show how that in-
come has been spent. We must interest ourselves in this analysis, for the standard
of living can only be maintained from the community's output of goods and serv-
ices. If we wish to study fluctuations in economic activity, with the object in par-
ticular of taking timely action to prevent fluctuations in employment, we must dis-
cover not only what is happening but what seems likely to happen in the future
to our total output of goods and services.
But we must also see how we spend our income as well as how we earn it.
It is the capacity to earn income which makes expenditure possible. But it is not
less necessary to maintain adequate expenditure under one head or another if
our potential capacity to earn income is to be actually realized.' This Will be
of particular significance in the swiftly changing circumstances of the years im-
mediately after the war. The main charges on the national income will be the
expenditure of the Government and other public authorities on goods and services,
the consumption expenditure of individuals and capital re-equipment. As a con-
sequence of the war we have heavy arrears of capital equipment to make up.
Provision must also be made for the improvement of the capital equipment of
industry and for capital programs of such primary social importance as housing
and education. For the improvement of our standard of efficiency and standard
of living it will be essential to provide adequately for these needs. This will
only be possible, without risking either inflation on the one hand or unemploy-
ment on the other if we can provide a proper balance between the scale of aggre-
gate investment and personal expenditure on consumption. It will be part of the
duty of Parliament to watch the broad tendencies that show themselves.
There is another major statistical recording that we shall need both for gen-
eral post-war purposes and for the policy of full employment, and that is what I
might describe as a continuous census of production. An improvement in the
real standard of living will depend on an increase of efficiency output and we must
devise methods for measuring this at regular and more frequent intervals than in
the past.

The Budget

I therefore commend this White Paper to the attention of the Committee. It is
no doubt inevitable and proper that there should be lively discussion and contro-
versy on all major issues of economic policy. Politics would lose much of their
vitality if it were not so. But it will be essential that the assertions of controversy
should be checked by recognition of indisputable and objective facts. In manag-
ing the delicate and difficult economy with which this country must support
itself and its external responsibilities, we shall have little margin for avoidable
mistakes or for frequent and dramatic reversals of fundamental policy.

The Burden of the National Debt
I have already said something about the external debt resulting from this war;
but we shall of course be left also with a greatly increased internal debt. I must
emphasize how much the task of my successors in dealing with this will be
lightened by the successful establishment and maintenance of cheap rates of borrow-
ing by the Treasury. At the end of the Napoleonic wars the interest burden of
the national debt took a little more than 7 per cent of the taxable income of the
nation. After the first World War the figure was about the same. At the end of
this war the aggregate volume of the debt will be more than 25 times as great as
after the Napoleonic wars and more than three times as great as after the first
World War. But it seems likely that the annual interest as a percentage of tax-
able income will be no higher at the end of this war than on the two previous
occasions, though this time, of course, the opportunities for subsequent saving by
conversion to a lower rate of interest will be much less ample.
This is because we have not only maintained the relatively low rates of interest
which were ruling just before the war but we have actually improved on them. The
average rate of interest on the national debt in 1938 was 3.1 per cent. It is now
2.3 per cent. Few people before the war would have believed the possibility of
what has been actually achieved. With this experience behind us I reiterate the
practical possibility as well as the advisability of low interest rates after the war,
although I believe it is wise to move gradually and to avoid sensational changes
in a factor so interwoven as is the rate of interest with our social as well as our
economic fabric. The favorable effect on the finance, for example, of the housing
program is obvious. But that is no more than one impressive example of the bene-
ficent effects which will be felt in many directions.
Some authorities have thought of a fall in the value of money as something
which will become almost inevitable if the national debt rises too high. There are
indeed many examples in history to show that where the burden of the national
debt involves a level of taxation which is higher than is tolerable, that way out is
the'one most likely to be found. Now, it seems to me, a much better means has
been discovered, in the shape of a low rate of interest, for mitigating the real bur-
den of the national debt incurred in time of war. It has been the establishment and
maintenance of low rates which have helped to remove that particular threat
to the maintenance of the purchasing power of money. We shall aim, I hope,
at low rates of interest and stability of prices without deflation.

Prices and Wages
I have to repeat what I said last year about the use of subsidies to maintain
stability in the cost of living. I made it clear to the House in my last Budget
speech that I was not prepared as a matter of course to offset increases in cost auto-
matically by corresponding subsidies, although I would aim at preventing the
cost of living index from rising above 135 per cent of the pre-war figure.
In fact, we have been able to maintain almost complete stability, and the index
which stood at 129 a year ago is still only a fraction above 130, although the indica-

British Speeches of the Day

tions are that we shall not be able to hold that figure much longer. The position
remains that it will be unwise, in my opinion, to look to subsidies as the appro-
priate remedy for all increases of costs, though, as before, I am hopeful that the
figure can during the coming year still be kept within the limit of 135. This will
still remain a low figure, especially when compared with the general level of wage
rates, which today stand at 146 per cent of pre-war and with average earnings
which stand at 182 per cent of pre-war, though these may be expected to fall with
the reduction of overtime. Moreover, this figure of prices for essentials is much
below the ruling price level in the outside world. We are paying at a price level of
about 185 per cent for our imports. The national product and income, as a whole,
must, I suggest, be thought of, in terms of the value of money, as being of the
order of 150 per cent pre-war rather than the level df 130 per cent at which the
cost of living index still stands. In the long run the domestic price level is neces-
sarily mainly a function of what we pay for our imports and of the ruling rate of
wages and output. A stable price level will be compatible with a slow and steady
increase of wages if that increase corresponds with an increase of efficiency of out-
put. Disciplined and orderly progress in the determination of wage rates should
Sbe recognized as a prime interest of the wage-earning class as well as of the com-
munity as a whole. For it is the level of efficiency wages which mainly determines,
in the last resort, the purchasing power of money.

Expenditure in 1945-46
I must now consider the immediate Budgetary prospects of the year which has
just begun. The Committee will, I am sure, realize how slender is the evidence
on which I have to build my estimates of revenue and expenditure. We may
expect that hostilities in Europe will soon come to an end, but the precise date at
which the end comes is of importance to our estimates of expenditure and, to some
extent, to the revenue estimates, Military forecasts are, fortunately, no part of
the responsibility of the Chancellor of the Exchequer. On the other hand, in fram-
ing the Budget, I must take as realistic a view of the position as possible. I think
the best I can do is to assume-not to forecast-that the war in Europe will come
to an end some time in the early summer.
I shall put the Debt charge at 465,000,000, which is 50,000,000 more than
the cost of interest on the Debt in 1944-45. I propose to ask, as usual, for power
to borrow, if necessary, to provide for the contractual sinking-funds. Other Con-
solidated Fund Services will require 19,000,000. Civil Supply Votes will re-
quire 581,000,000, which is some 68,000,000 higher than the total Votes for the
past year. Details of this total have already been published, but, in view of the
size of the increase, I think I should recall its main causes. The Education Act
reforms and teachers' salaries, pensions and training account for 22,000,000;
training schemes for demobilized or disabled Service personnel for 12,000,000;
new works of various kinds in preparation for post-war developments 8,000,000;
Supplementary and old age pensions 7,000,000; Civil Service war bonus 6,000,-
000; new and increased grants to universities and colleges 4,000,000, and a num-
ber of smaller items.
The provision to be made for Votes of Credit is naturally the most uncertain of
all the Budget figures. Even if a precise date could now be set to the end- of
hostilities in Europe, there would still be a number of uncertain factors, such as the
rate of our war expenditure in the Far East, the rate at which commitments
arising out of the war in Europe will be liquidated, and so on. I am, therefore,
compelled, in this Budget, to have resort to the provision of a very round sum for
Votes of Credit, and I propose to take the figure of 4,500,000,000. I imagine
that this may bring disappointment in many quarters, but I have had to base

The Budget

myself on the usual computations of the spending Departments, and while
imagination has been given some rein, I am sure the Committee will realize that I
cannot afford to indulge in excessive optimism. But I assure hon. Members that
the Treasury will not, as the months pass, be content with evidence that the esti-
mated figure is not going to be exceeded. We shall make the most strenuous and
sustained efforts to ensure better results, and I have great hope, though I cannot
give any guarantee, that the outcome will prove much more favorable. On this
occasion we shall take no pride in establishing the accuracy of our forecasts,
so long as the deviation is in the right direction.
Taking this figure of 4,500,000,000 for Votes of Credit, total expenditure will
be 5,565,000,000, or about 500,000,000 below the total for 1944-45.

Revenue in 1945-46
On the Revenue side, I estimate the yield of Income Tax at 1,350,000,000, an
increase of 33,000,000 over the outturn of 1944-45. The yield of Excess Profits
Tax I put at 500,000,000, which is 10,000,000 less than the amount actually
received from this source last year. The decrease is largely due to the effect of the
provision made in last year's Finance Act by which all standards except profit
standards were increased by 1,000. As I explained last year, only a small part of
the cost fell into the year 1944-45, but practically the full annual cost will fall
into the year 1945-46. The Estimate also takes into account the effect of the fur-
ther change which I mentioned earlier. The remaining Inland Revenue duties
I put at 215,000,000, or 13,000,000 more than last year's receipts. The total for
Inland Revenue will then be 2,065,000,000.
It is difficult to forecast 'what will be the consumption of the various dutiable
articles on which the Customs and Excise revenue depends. Obviously, the end of
the war in Europe will bring considerable changes. The return of troops on leave
or for demobilization or in transit to other battle fronts will increase the number
of consumers, and so far as supplies can be made available for the home market
there will no doubt be a rise in consumption in many directions. The receipts of
duty will, however, in most cases, continue to be limited by the shortage of sup-
Tobacco consumption has lately been equivalent to a revenue of nearly 400,-
000,000 a year, and I have adopted this convenient figure as the Budget estimate
for 1945-46. Similarly, I put the estimate for Customs and Excise duties on beer
at the round total of 300,000,000.
I have already referred to the proposed restoration of certain duties under the
Safeguarding of Industries Act and the Import Duties Act which have been sus-
pended during the war. The estimates for 1945-46 include a sum of 15,000,000
on this account. The actual receipts will depend largely on the date at which this
change comes into operation, which will be determined by the course of the war.
On the other hand, I must expect a considerable fall in-the revenue from oil,
through a reduction in the consumption of the Royal Air Force from duty-paid
supplies in this country.
Taking account of all these factors and the minor adjustments I mentioned
earlier, the total Customs and Excise estimate is 1,130,000,000, that is to say,
54,000,000 more than I received last year.
All other heads of Revenue should produce 70,000,000, making the total
revenue 3,265,000,000. The resulting excess of expenditure over Revenue, which
we shall have to borrow, is 2,300,000,000, some 525,000,000 less than the cor-
responding figure for 1944-45.

British Speeches of the Day

As in previous years, we shall need borrowing powers to cover this deficit
and I shall ask the House to pass the necessary National Loans Bill at an early

The Need for Economy
Though the estimates I have just given to the Committee show a considerable
reduction as compared with recent years in our total expenditure and in the Bud-
get deficit, both are still very large and must necessarily remain so while we have
to play our full part in the war against Japan. We must not, therefore, let the
present slight easing of the position blind us to the need for all possible economies
in our expenditure. I have already spoken about our war expenditure overseas,
but I hope that at home, as well as overseas, the process of liquidating our Euro-
pean war commitments in a businesslike way will be carried out as speedily and
economically as possible, and that all expenditure not absolutely essential will be
quickly brought to an end. That must be done, not only on financial grounds, but
because we shall need the speediest possible liberation of manpower for the pur-
poses of civilian reconstruction and development. In the civil departments ex-
penditure on war activities must similarly be terminated as quickly as possible.
As regards their peacetime functions, activity and expenditure during the war
have been, to some extent, determined by the staff available, and it is important
that the easing of the staff position which will follow the end of hostilities in Europe
should not in any Department be made the occasion for any relaxation in the
pursuit of economy in its existing administration, or the carrying out of what-
ever new duties fall to it in the future. The total cost of our normal peacetime
services and the new developments of policy which the Government are pledged
to follow after the war will be very heavy, and it is essential that the burden on the
taxpayer should not be increased by unnecessary expenditure in any direction.

Sources of Finance in 1945
It has been customary to give the Committee some estimate as to how far we
may expect to rely on the various sources of finance to cover our borrowings in
the year to which the Budget relates. In this respect, as in others, I am this year
faced with considerable difficulty. The end of the war in Europe will affect, in
varying degrees, all these sources of our borrowings-the deficit on our external
balance of payments, the various extra-Budgetary funds, private saving, and so on.
In present circumstances, I do not think it would be profitable to try to estimate
these various items for the current year in money terms, and I do not propose
to make the attempt.
But I should like to say this: the primary object of our statistical studies of
the sources of war finance has been to establish how far our methods of financ-
ing the war may have led to inflationary developments. No statistics are neces-
sary to underline the truth of the warning already so often given-that, with the
end of the war in Europe, we shall approach a period which from the anti-in-
flationary point-of view will be more difficult than any we have yet experienced.
In the absence of a further curtailment of purchasing power by the increase of taxa-
tion-a course which I hasten to assure the Committee I do not propose to adopt
-we shall, in fact, be able to support our continuing high rate of expenditure as
soundly as we have done during the war only if, for the time being, the greatest
restraint should continue to be maintained in personal expenditure. That may
seem a hard doctrine on the morrow of a great victory and as a sequel to five and
a half years of great sacrifice, but it is none the less true, and I am relying on the
Savings' Movement to bring home to our people, more directly than I can, the
fact that it is necessary in both the immediate and more distant interests of this

The Budget

country. There is one further point to be borne in mind in this connection. The
yield of taxation and saving will depend on the size of the national income. The
higher the national income, the higher will be the yield of taxation and the level
of saving. It is therefore essential that those men and women who are in due
course released from the Forces and war industries should be reabsorbed as quickly
as possible into productive civil employment.

The Future of Taxation
I have already said that I do not propose any major increase in taxation of
this Budget. Equally, I do not propose any major reduction. Apart from the
minor alterations to which I referred earlier in my speech, I think that our present
rates of taxation should remain unchanged for the present.
I reach this conclusion for two main reasons. First of all, the burden of the
war is still upon us, and it would be highly dangerous that there should be greater
pressure of purchasing power on the market before there can be any correspond-
ing increase of supplies. In the second place, I do not think that we have reached
a stage at which the task of the Chancellor of the Exchequer in relation to post-
war taxation can yet be begun. I have been able, in the figures I have given
to the Committee, to forecast some reduction in war expenditure this year. But
I am convinced that major reductions in taxation must be made as part of a
comprehensive review by the Chancellor of the probable course of post-war expen-
diture and of our system of taxation as a whole in relation to it. We shall have
to survey the whole field in the light of known needs and of the alternative methods
of meeting those needs which present themselves. Only so, in my opinion, can
justice be done all round.
I should like to remind the Committee of two figures which I gave in the early
part of my statement, that 42 per cent of the whole of the personal income of the
country since the outbreak of war has been taken in taxation or saved towards
financing the central Government's expenditure, and that of the total expendi-
ture 49 per cent has been met out of current revenue by taxation. We have
been able to draw on savings, partly through the willing sacrifice of the country,
and partly, of course, because the things on which income might be spent were not
there, as labor could not be spared for them. This includes industrial replace-
ments, renewals and re-equipment which have had to be postponed, as well as
the running down of all household stocks. It is this sacrifice and deep privation,
added to the country's great productive effort, that makes it possible to spend so
many millions a day on the war.
But on taxation, I hope that no one in the Committee will, as a result of what I
have said, take too pessimistic a view. We must not let the readiness with which
all classes have borne the relentless pressure of taxation during the war delude us
into thinking that it would be either possible or desirable to maintain that degree
of pressure into the peace. I should indeed be fearful of allowing a psychology
to grow up in the country based on such an expectation. The present level of
taxation is unquestionably oppressive to the spirit of enterprise and industry. It
is of the first importance that when the compelling incentive of working for vic-
tory is no longer present there should be an early alleviation of the existing heavy
obstacles to the normal incentives to work.
The taxation levied on private taxable income is running today at about 36 per
cent over-all, of which about 3 per cent is represented by Excess Profits Tax,
after allowing for the additional Income Tax which would be payable in the
absence of Excess Profits Tax. Thirty-three per cent of taxable income, apart
from Excess Profits Tax, is much above the level which the country should be
expected to sustain in time of peace. It is my own conviction that taxation can-

British Speeches of the Day

not, and should not, be continued without material relaxation. Nor will this be
impracticable if we build a world in which we can avoid continued expenditure
on defense on a vast scale, and in which employment is maintained and efficiency
progressively increased. If we can- do these things we can reduce taxation, as
well as carry out the programs of social improvement to which we have set our
I have already indicated that I regard this as an interim Budget. The calendar
obliges me to present it on the eve of victory, but before the smoke of battle
has cleared away, and before our financial future can be seen in detail, even by
such an ex-officio prophet as a Chancellor of the Exchequer. For the reasons
I have just given, I think we must postpone any attempt to draw practical con-
clusions from an examination of the future until another occasion-which in my
opinion may well arise after less than the yearly interval which customarily sepa-
rates these occasions.
rates these occasions. [House of Commons Debate]

Secretary of State for Scotland
House of Commons, May 1, 1945

In a postscript to his recently published study on "English Social History," the
Master of Trinity College, Professor G. M. Trevelyan, writing in 1941, says:
"The Battle of Waterloo was won not on the playing fields of Eton, but on
the village greens."
He adds:
"The men who fought in the ranks on June 18th, 1815, were little educated,
but they had the qualities of country bred men. Today we are urban and edu-
cated. The flyers of the R.A.F. are not and could not be the product of rural
simplicity. If we win this war it will have been won in the primary and second-
ary schools."
With all its defects and inadequacies and shortcomings which we are resolved to
improve and develop to the utmost of our power, we need not unduly deprecate
the culture we have inherited from our forebears, or indeed the efforts of our genera-
tion to add to that inheritance. Our Scottish standard of literacy is high. Our phys-
ical standards of schoolchild fitness even during the war are rising. Increasing
numbers avail themselves of the opportunities open for secondary technical and uni-.
versity education, and so far as I can form a judgment the generation which is fol-
lowing ours will bear favorable comparison with ours for equipped intelligence,
quickness of wit and capacity to arrive at reasoned and logical conclusions.
But experience has shown us obvious gaps in our educational system, obvious
improvements in the national interest to be effected, obvious dividends on good
citizenship, corporate amenity and wider diffusion of knowledge which we have it
in our power to secure.
The nursery school, for example, is not a fad; it is a vital link in the educational
chain, and the junior class at age five, or, as it is probably technically correct to call
it, the infant class-one of the most difficult of all classes for a teacher-would be
made immensely easier if there were more frequently a preliminary nursery school

Education (Scotland) Bill

course in habit-forming learning. Many years ago Margaret Macmillan at Deptford
showed the way, and I remember over 20 years ago being greatly impressed with
the results at Miss Mabel Brydie's nursery school experiment in Dundee. There
have been other experiments, many of them in Edinburgh. Out of 23 voluntary
efforts 12 were situated in Edinburgh. Clearly, too, at the other end of school life
changes are imperative. The school-leaving age should be raised and a secondary
education for a three years course made obligatory. Junior colleges for compulsory
part-time further education, local technical colleges and added provision for volun-
tary adult education are essential if the fullest harvest is to be reaped in culture, in
good citizenship and in technical efficiency. But in making these advances we must
be careful to do nothing which would destroy any facilities our young people already
enjoy. These are provided by a variety of agencies, and we believe that the position
of these agencies is fully maintained under the provisions of our Bill. The Cadets,
the Scouts and the Guides, for instance, have all done valuable work before and
during the war, and we are all anxious that the essential benefits of that work
should be continued.
The Bill today before the House is the Government's attempt to make provision
for the bridging of these gaps in our educational system. 'It has emerged from the
crucible of long discussions with a wide variety of organizations interested in Edu-
cation-local authorities, Churches, the Educational Institute of Scotland, the Direc-
tors of Education, the political parties, and in some important respects, for example,
the compulsory day continuation classes and education authority bursaries-it bears
the impress of the advice tendered by the Advisory Council on Education, to which
influential body, under the chairmanship of Principal Sir W. Hamilton Fyfe, of
Aberdeen, I would, on behalf of every education interest in Scotland, pay my most
sincere tribute.
In some respects, particularly on its machinery and administration side, the Bill
is an attempt to reconcile widely divergent, but sincerely held views. It would not
have been a Bill but a miracle 'had I succeeded in reconciling the ad hoc and ad
omnia protagonists, but I take some comfort from a study of the controversies which
raged furiously around, say, the conscience clause in the Act of 1872, or the Act of
1918 which brought the voluntary schools within the public system. Whatever may
be said of our effort today, it is a love feast compared with the vocal virulences
which accompanied previous Bills. This comparatively peaceful atmosphere may
be due to the fact that our Bill raises no theological controversies. I have purposely
avoided making this Bill a consolidation as well as an amending Bill. I have
therefore deliberately avoided raising or reopening the settlement arrived at by the
Act of 1918. A consolidation Bill will be necessary at no distant date, but this Bill
treats as settled the relationship of the voluntary schools to the public educational
system and deals with the form and extension of the system only and how it is to
be controlled.
The Bill does not deal with the details of the curriculum. If it did I am afraid
we should be a long time in the Scots Grand Committee, for some of us have
minority or heterodox views about, for example, the content of many of our history
books, or about the relative importance attached to Romulus and Remus as against
the Diesel engine. But, as in the past, general principles on the content of the pub-
lic education to be provided will be set forth in codes which are laid upon the Table
of Parliament, and schemes of work and time-tables are the responsibility of head-
masters, within the policy of the education authority and subject to the approval of
H.M. Inspectors. On the curricula, I expect this year from the Advisory Council
on Education three important reports: one on primary, one on secondary and one
on technical education. They will serve to put more flesh upon the bones of this

British Speeches of the Day

The Supply of Teachers
Before I seek to explain in outline the major changes and developments proposed
in this Measure I should like to place upon record my conviction that there is one
fundamental prerequisite to any development and extension whatsoever in our
educational system, and that is our ability to attract larger numbers of first-class
men and women into the teaching profession. If we cannot do that then our pro-
posals for nursery schools, extension of the leaving age, junior colleges and after-
school education, more and better school buildings, are simply wastepaper. The
Advisory Council has calculated that we have even now in Scotland an under sup-
ply from the training colleges of about 1,760 teachers, but through war service cas-
ualties the present deficiency is now about 2,500, made up at the moment from the
ranks of married women and retired teachers, and they proceed to show how, accord-
ing to the dates upon which compulsory full-time education to age 15 and day
continuation classes are introduced, the teacher deficit may rise to 4,000, plus, of
course, the 2,500 emergency volunteers to whom I have already alluded. The
shortage will now, through war casualties, be greater than that. In an interim report
it will be remembered that the Advisory Council stressed the need for urgent revi-
sion of the teachers' salary scales, declaring:
"We make this recommendation with the object of obtaining a permanent
improvement in the supply. of teachers both in quantity and in quality. The
number of persons entering the teaching profession before the war was steadily
declining; the salaries payable to teachers are often lower than those paid in
other professions which require a comparable training for entry."
Immediately upon receipt of this recommendation I invited the National Joint
Council, composed, as hon. Members are aware, as to half of teachers' representa-
tives and half local authority representatives, to see whether they wanted the present
system of minimum national scales, with local authorities here and there paying
increases upon the minima, or whether they would agree to standard national scales
and whether these scales should be of uniform application in all regions and areas.
Last July they recommended the abandonment of the fixed minima and the institu-
tion of standard national scales. That recommendation, I am glad to say, was a
unanimous one, local authority and teachers' representatives being in agreement.
This is now provided for in the Bill through Clause 53, and this cancellation of the
power of a local authority to pay other than nationally agreed upon scales is the
only power taken away from the local authority by the Bill. It is taken away at
their own request. In future standard scales will be agreed by the Secretary of
State after consulting the National Joint Council and thus will disappear one fester-
ing sore in our relationships with the teaching profession.
Today, for example, the maximum salary payable to a non-graduate woman
teacher is, in Glasgow, 305, in Lanarkshire, 270, in Edinburgh, 250, in Rox-
burgh, 260, and so on. There is one county where the male certificated teacher
starts at 150, less than 3 per week, and it takes him 10 years to reach his maxi-
mum of less than 5 per week. In the same county a male graduate with a
teacher's training starts at 200 per annum, less than 4 per week-
[Mr. Stephen (Glasgow, Camlachie): Which county?]
I will tell my hon. Friend later. Incidentally, the figure of less than 4 per week
is lower than the 4 8s. Od. per week which is being paid to the young policeman
on entering the force. It takes men 10 years to get 300 per annum and 14 years
to get 360 per annum. I am glad to say that the National Joint Council-half the
membership local authority representatives and half teaching profession representa-
tives, with an independent chairman Lord Teviot, well remembered in this House
as Sir Charles Kerr-have succeeded in getting unanimity, and I am hoping that
these disparities will disappear from our educational system. An hon. Gentleman

Education (Scotland) Bill

asked me to which county I was referring. It was the county of Angus, but there
are other counties with figures bordering on those I have quoted. The National
Joint Council have now reached provisional agreement upon scales of salary for
teachers with the general certificate and the special certificate, and are at present
discussing scales for teachers with the technical certificate.

The Principal Changes
The main features of the educational changes we propose are: (1) Nursery
schools and classes,.to which I have alluded. Attendance here will be purely volun-
tary; (2) From age 5 to about 12, as now, we have our primary schools and depart-
ments with compulsory attendance; (3) Secondary schools and departments, as now,
with compulsory attendance between 12 and 14 until not later than April, 1947.
Thereafter the age will be raised for compulsory attendance to 15 until it is prac-
ticable to raise the age further to 16; (4) Between the upper age limits of 15 and
16 and age 18 further education will be provided at Junior Colleges. These Colleges
must be provided within the next five years. Attendance will be compulsory for
.one day a week for 44 weeks a year. Here attendance will be compulsory upon all
young persons not undergoing other education approved by the education authority
as equivalent to about seven hours a week; and (5) We provide for voluntary further
education, either full time or part time, for persons of any age over school age. This
education includes all kinds of adult and technical instruction. All the various
types of education may be provided at day schools, colleges or boarding schools. It
will be the statutory duty of education authorities to prepare schemes for their areas
covering all this extensive field of instruction. These schemes are to be submitted
to the Secretary of State who may amend a scheme before approving it. But if his
amendment is not finally made with the concurrence of the local authority, the
authority may have the scheme laid before Parliament, where it may be annulled
by either House. Parliament is, therefore, the Supreme Court of Appeal.
Here may I interpolate a comment that the underlying principle of the Bill is
that responsibility should rest with the local authority and that central control, even
when designed by Parliament to ensure a certain uniformity of education facilities
to the youth of every area, and a general control, on behalf of Parliament, in the
local spending of nationally provided money-that central control should be kept
to the minimum. The greater the local responsibility the better the type of citizen
who will be willing to serve his fellows in local administration. And my firm con-
viction is that the worst form of bureaucracy is a long distance one.
In this Bill, as I have already said, there'is only one power taken from local.
authorities and at their own request-the power to fix standard scales of teachers'
salaries. It is not a power which any Secretary of State would yearn to possess,
and had there been any way of placing this duty upon the Law Courts with the
concurrence of the local authorities and the teaching profession, I would cheer-
fully have taken it. But by common consent, or rather by common request, the
Secretary of State now shoulders this responsibility, after seeking the advice of the
National Joint Council.
Apart from some new duties consequential upon new functions conferred upon
education authorities by the Bill, there are six other new powers now conferred
upon the Secretary of State by this Bill. They are not taken from the local au-
thorities, but they are new. The first is that he may settle a dispute between
a parent and an educational authority as to the suitability of a secondary course
selected by the parent. Secondly, he may make regulations defining categories
of defective children. Thirdly, he may require education authorities to combine
for particular purposes. Fourthly, he may make regulations raising the school
leaving age to 16. Fifthly, he may make regulations as to school meals. Sixthly,

British Speeches of the Day

he may -make orders releasing land held for educational purposes from obsolete
restrictive conditions. And for the way the Secretary of State exercises these powers
he is answerable to Parliament, and in the cases where he makes new regula-
tions they must be laid before Parliament who may, of course, annul them.
Provision is made for certain ancillary services-by Clause 34 for transport with-
out charge to and from school or college, the provision of bicycles or other suitable
transport facilities or payment of travelling expenses; by Clause 36 for the provi-
sion of milk in a midday meal, the proportion of the cost to be charged to the
consumers to be fixed by regulations. There is to be a medical inspection at the
junior colleges, free medical treatment including the provision of spectacles; free
cleaning facilities. Negligent parents who allow reinfestation after cleaning are
subject to increased penalties. Suitable and sufficient clothing may be provided.

Bursaries; Handicapped Children
Under the Bursary Clause-Clause 32-it will be noted that scholarship bur-
saries and other allowances may be paid to persons over school age. This will
cover students at universities and central institutions. In assessing the needs of
applicants, bursaries won in open competition, and awards made by the Carnegie
Trustees, are to be left out of account. There are about 3,000 open competitive
bursaries current in Scotland at any time, of which about 1,000 are awarded an-
nually, and there are 3,000 Carnegie Trust beneficiaries every year receiving an
average award of 17. Henceforth these bursaries and awards will be left out
of computation by local authorities when they are assessing bursars' needs. This,
I think, is a considerable step in encouraging the lad and the girl o' parts, and
will relieve many a working class household of a serious burden in the higher
education of a promising child. Then there is provision, too, for the making of
regulations to provide suitable education and treatment for the various categories
of handicapped children. The treatment will be given in special schools, and will
include child guidance clinics and occupational centers. Education authorities
are empowered to provide a child guidance service for the study of handicapped,
difficult or backward children. Experience of these child guidance clinics was
clearly demonstrated, at the great conference we had in Edinburgh on delinquency,
to be a service of primary importance. On the question of granting exemption it
will be for discussion, no doubt, on the Committee stage, whether the provisions
in the English Act are preferable to our proposals.
In the English Act, under Section 39, a child may be granted leave of absence
from school by any authorized person-that is any person authorized to grant
exemptions by the managers, or governors, and the exemption, so far as the Act
goes, may be for any reason and at any age. In our Scots Bill we definitely limit
exemption to domestic hardship cases and to children over 14. Full records must
be kept, and the Secretary of State may call for returns, and ask the local authority
to revoke exemption in any case where the reasons are, in his opinion, insufficient.

Size of Classes
Some commentators have expressed disappointment that in the Bill there is no
statutory limitation fixed to the numbers of pupils who may be taught in the vari-
ous grades of classes, primary, secondary, single teacher schools in rural areas, and
so on. But these comments are based, I think, upon a misapprehension. There
is no disputing the fact that classes of the size still, I am sorry to say, found
in some of our schools impose a serious handicap on the education of the pupikl
and a heavy burden on their teachers. I am in entire sympathy with those who
desire to see the maximum size of class reduced. Such reduction indeed may

Education (Scotland) Bill

well be the most desirable of all educational reforms. But it is not a matter for
this Bill. Our invariable practice has been to deal with it by Codes, made under
an Act of Parliament. Thus, in the Codes in force before 1923, the prescribed maxi-
mum for primary classes was 60 children habitually under the charge of one
teacher; the Code of 1923 reduced that figure to 50; and in the Code of 1935 the
maximum was further reduced by a change to 50 pupils on the roll of each
class. Immediately teaching staff and accommodation are available, a new Code
effecting further reductions in primary schools, and in secondary schools as well,
will be laid. That, at least, is the intention of the Education Department, and the
record in this respect of the Central Administration has been creditable.
The average size of classes in Scotland as a whole has been reduced in the 50
years to 1942 from 67 to 32, and it is hoped that this trend will continue. But
in the difficult-that is, the most populous-areas there are still 362 classes above
the maximum laid down in the Code, and enforcement of a new and further re-
duced figure is at the moment impossible.
[Mr. Maxton (Glasgow, Bridgeton): Does that average figure include classes
of mental detectives, handwork classes, secondary school classes, and so on?]
I do not think it includes defective children. I will make inquiries and let
my hon. Friend know.
But as an earnest of our intentions, I may say that in the Building Regula-
tions, which will in due course be laid before Parliament, we propose to refuse
sanction to the designing of any classroom for more than 40 primary or 30 secondary
pupils; and as soon as the necessary teachers and the additional accommodation
are available to make a reduction of the Code maximum reasonably practicable,
the Code will be amended accordingly.
Fees in Certain Schools
Before I leave this survey of the education provisions, and come to the, as it
appears, more disputed and controversial sections on administrative machinery, I
should like to say something about'the reasons which have motivated Clause 11.
Under this Clause there is an option still left to the education authorities to charge
fees in a limited number of schools, always provided that this option may only
be exercised where it is without prejudice to the prior and adequate provision of
free primary and secondary education in public schools where no fees are charged,
or where in other schools the managers take a bulk payment from the education
authority, and admit and educate pupils free of charge on the nomination of the
education authority.
[Mr. McNeil (Greenock): My right hon. Friend, in his speech, has used the
words "prior and adequate." Does he mean to amend the Clause in that fashion?
It is very important.]
I was not quoting the Clause, textually. The words in the Clause are:
"Primary, secondary and compulsory further education provided in public
schools and junior colleges under the management of an education authority
shall be without payment of fees, provided that if the authority think it expe-
dient they may charge fees in some or all of the classes in a limited number
of primary and secondary schools, provided further that the power to charge
fees may be exercised only where it can be exercised without prejudice to the
adequate provision of free primary and secondary education in public schools
in which no fees are charged, or in other schools the managers of which agree,
in respect of such payment by the education authority as may be agreed, to
admit and educate pupils free of charge on the nomination of the education

British Speeches of the Day

The strongest argument against any fee-paying schools in the public education
system is that it tends to separate children according to the financial means of
their parents, and on that ground alone there is powerful and weighty reason for
ending the option.
[Mr. Gallacher (Fife, West): That is not the worst of it. It makes the chil-
dren undesirable snobs, apart from educational consideration.]
That is what I was saying-it tends to separate them according to the financial
means of their parents.
But there are other considerations which, both on Second Reading of the
Bill and, probably more in detail, on the Committee stage, we shall require to face.
Last year, for example, Glasgow resolved to cancel its fee system in all its high
schools. It was perfectly entitled to take that decision, and I intimated that I had
no objection if the Department could be satisfied that the arrangements which
would follow upon the cancellation of fees were educationally sound. Henceforth,
the high schools including Notre Dame school were to be filled on a geographical
basis-that is to say, the children in the neighborhood were to go to these schools,
and the pupils presently being taught there on a fee-paying basis were to go to
the schools in the areas of the city and outside where they resided. Most of these
schools were on the perimeter of the city, and when Glasgow took a census of the
primary classes in these perimeter schools, which inevitably would be ldded to by
the new system, a curious result emerged. Thus 217 pupils from the Notre Dame
high school for girls in the primary department would have had to be distributed
among 17 schools, with already 66 over-size classes, and when examination was
made as to what would happen if the primary department children presently at
the high schools were redistributed on a zoning system, it was found that 347
pupils would have to go to 27 schools, where there are presently 65 over-size
classes. Educationally, therefore, that would have been disastrous, and until there
is a sufficiency of school places in any area to accommodate all the children in
that area, we would do well to avoid making it obligatory upon any local authority
to make such zoning re-arrangements as nyan additions to already over-sized
classes. It has been suggested that it is possible to abolish fees and still avoid
the zoning system, by selecting pupils at these high schools upon an educational
test. Apart altogether from the difficulty of such a test in the primary departments,
there are educational disadvantages, so far as the secondary schools are concerned,
in de-grading, say, 20 schools and up-grading one, by this method of canalizing
the brighter pupils into one school. I know there are other arguments, pro and
con, which may be adduced upon this issue. But all I am concerned about this
afternoon is to explain why, on educational grounds, it has been considered inad-
visable in this Bill to give a central prohibitory direction to local authorities. They
will continue, as now, to exercise an option on these matters.

And now to the administrative Clauses-44 to 47 inclusive. Here- it is idle to
pretend that there is any general acceptance of the compromise proposals, which
we devised with a view to overcoming the differences between those who support
the ad hoc principle and those who support the present system, in which, since
the 1929 Act, education has been incorporated as a unit among the services for
which the cities and the county councils are administratively responsible. But there
are not only two alternative methods of administering an education service, can-
vassed, and urged, upon us. There are at least five. The teachers, the Educational
Institute of Scotland, have proposed that education should not be a locally-con-
trolled service, but should be a nationalized service. A majority of the county
councils and the four large cities favor the present system-that is, one rate

Education (Scotland) Bill

collection, and education run by committees of the local authorities in much the
same way as water, housing or any other public service is run now. Then there
are the supporters of ad hoc-that is, a separate service, separate elections, and a
separate rate collection or a budget for education, simply intimated to the rating
authority for it to collect-pretty much what we had before the 1929 Act. This
ad hoc system is supported by the Convention of Burghs and by a large number
of Church organizations.
[Mr. McKinlay (Dumbarton): The deathbed repentance.]
I am sure these proposals cut across all parties and organizations.
There are the compromise proposals on the present Bill between ad hoc and
the ad omnia systems. Our proposals for the Bill are that up to two-fifths of the
membership of the education committee should be directly elected for education
purposes, so that citizens desirous of serving in an educational capacity are not
also required to serve upon drainage or water or housing or public health or upon
the large variety of other committees and sub-committees which go to make up
local authority administration. These proposals have been criticized on the ground
that they might lead to theological controversy. Even were that so, it would not
he a unique experience in Scotland, and there are-for example, in Edinburgh-
direct representatives of sectarian interests in local government now. Indeed it is
at least arguable-to put it no higher than that-that our proposals might diminish
the sectarian interests in municipal government in so far as that interest today is
actively concerned with educational affairs. And, when you come to think of it,
so long as all the churches and all the sectarian organizations are interested in edu-
cation, then, so long are they likely to use their influence at the local polls, whether
the occasion be ad hoc, ad omnia, or on a compromise basis between the two.
Nevertheless, the Government appreciate the fact that neither the supporters
of ad hoc nor ad omnia have shown any great enthusiasm for the compromise in
the present Bill. There was one other suggestion which was put to us as a possible
alternative-that we might exclude the four cities from any rearrangement of
administration on an ad hoc or compromise ad hoc basis, and might run separate
systems for the cities and the counties. But that proposal was not seriously pressed,
and its supporters would, I think, line themselves up in general with those who
urge a retention of the present local government setup for all Scotland.
If we were starting afresh, I should myself express my personal preference for
an ad hoc system. All the arguments are not upon one side, but the responsibilities
of local government are so vital, so extensive and so expanding that the volun-
tary system of administration in local affairs may soon crack before our eyes if
men are to be called upon to give public service to a dozen departments as a con-
dition of being permitted to give service to the one in which they may be specially
But we are not starting afresh, and it is a trite but a truthful observation
that it is easier to scramble an egg than to unscramble it, and, whatever may be
the future rearrangement of our local government system, I am quite convinced
that, if we were to seek to tack on to our present Education Bill any major altera-
tion in our local government structure, we shall not be able to get this Bill on to
the Statute Book. We are running against time.
In my view, the only possible alterative to the machinery proposals in this Bill
-let us call them the direct election proposals-are the proposals we advanced in
our first Bill. These were continuance of the present system of running educa-
tion as a conjoint service with health, housing, water and the other services but
qualified by delegation of real and effective education powers to the Education
Committee from its parent body and abolition of co-option to the Education Com-
mittee of persons other than those authorized to speak for the Churches.

British Speeches of the Day

Either of these proposals could work, but I am bound to report here the strong
preference of the great bulk of the local authorities for the proposals in our first
Bill-and that covers both Unionist and Labour majorities on these local authorities.
The Government has, in fact, sponsored both proposals either in its first or the
present Bill, and is prepared to accept the decision of the Scottish Grand Com-
mittee. The issue, therefore, which might appropriately be decided at the Com-
mittee stage, is whether we should retain meantime the present administrative
local authority setup (including school management committees) but, as I hope,
minus co-option to the Education Committee-[HoN. MEMBERS: "Why?"] I am
going to explain that. As I said, minus co-option to the Education Committee for
persons other than Church representatives, or whether we adopt the proposals
in the present Bill. I know that there are other views being advanced in favor of
the co-option of representatives of special interests. The Chambers of Commerce
ask for direct representation. Every Chamber of Commerce in Scotland has sent
a resolution asking for direct representation.
Pleas are put up for direct representation of the teachers, and the present
arrangement of co-option of persons specially interested in education, in some areas,
at least, has petered out into a co-option of defeated candidates at the previous
polls. There are no doubt areas where the co-optee has given 'most valuable and
disinterested service to the cause of education, but personally, I regard the co-option
system with grave misgivings, and, apart from the Church representatives, who,
in some instances, handed over considerable school properties to the community,
and, in others, have great historic interests in Scottish education, I should say
we would be well advised to move as far as we can away from a syndicated setup
in local government.
[Major Lloyd (Renfrew, East): Has the right hon. Gentleman asked for the
Advisory Council's views on this thorny question of administration; has he received
any advice, and, if so, what?]
Yes, Sir. I understood that my right hon. Friend was going to collect the
voices at the end of the day, but the Advisory Council, I believe, has decided
in favor of the ad omnia system-the present setup-provided a Committee
of Inquiry is set going as to the future arrangements of local government adminis-
tration, so far as education is concerned.
[Major Lloyd: Could the right hon. Gentleman not give his view on this
important advice since he asked for it?]
I do not know. The point here is whether there should be a Committee of
Inquiry set up immediately or not. Well, there are reasons, which I am sure
would cause my hon. and gallant Friend to pause before he presses that issue. For
example, I have already said that I propose to leave the issue to the Scottish Grand
Committee, and I cannot very well, in the one breath, say that the Scottish Grand
Committee shall decide and that we will set up a Committee of Inquiry. There
is another and more important issue about which we must be careful before we
have this inquiry, and it is this. Can we limit our inquiry in local government to
education? There are grave risks, and we must be cautious before we plunge
into that, but I have not turned down this Committee of Inquiry. Indeed, frankly,
I am certain that the present setup in local government administration, as I have
already said, cannot continue on this present basis. The overwhelming adminis-
trative difficulties suffice against it.
This bill is a denial that education either begins at age five or ends at age 14.
It is a machinery Bill providing for nursery schools, for primary schools, for com-
pulsory secondary education up to age 16 for after-school education. It does not
touch the content or the substance of what is to be taught in the schools. That is
material to be developed and amended from time to time by education authorities,

Local Government (Boundary Commission) Bill 409

Headmasters and teachers, H.M. Inspectors, and the Secretary of State, advised, as
I hope, increasingly, by his Advisory Council. But a large and growing part of
our educational opinion, I think, goes steadily towards the abandonment of much
of our bookish, academic, and date-memorizing learning and is reaching out more
and more to tuition in good citizenship and in relating our school culture to the
facts of twentieth-century life.
There is a well-known apophthegm: "Open a school and close a prison." It
is manifestly an exaggeration. Nevertheless it is true that, while it costs 13 5s. Od.
per annum to educate a primary school child and 22 14s. Od. per annum to edu-
cate a secondary school child, it is also true that the cost of a Borstal inmate is 110
per annum and penal servitude cases cost 140 per annum. And that all our
hopes of a better, happier and more prosperous world are surely based not upon
ignorance but upon enlightenment. Comm s
[House of Commons Debates]

Minister of Health
House of Commons, May 9, 1945

This, I hope, will turn out to be, as I think it is, a good day to move the
Second Reading of a reconstruction Measure, and the Bill is one which I submit
to the House with confidence. It is, I think, true to say that the policy which it
embodies has not only been fully and thoroughly discussed but has met with a
broad measure of agreement in all quarters. In those circumstances it would be
proper, considering the circumstances of the day, that I should not delay the
House too long, particularly as if any detailed points arise on the Bill they will
be dealt with by my hon. Friend the Parliamentary Secretary to the Ministry of
Town and Country Planning, whose familiarity with all matters in connection with
the work of county councils is well known to us all.
I may perhaps remind the House that the White Paper "Local Government
in England and Wales during the Period of Reconstruction" was published on
January 3rd and was debated on February 15th. In the course of that Debate,
which was marked by notable speeches from hon. Members experienced in all
forms of local government, the proposal that a Boundary Commission should be
established was welcomed by speakers familiar not only with the work of the
county councils and county boroughs but with the urban and rural districts.
I was greatly encouraged, and towards the end of the Debate my hon. Friend
the Member for South Tottenham (Mr. Messer), in a speech which I think all
who heard it will remember, commented on the fact that commendation of the
White Paper had come from representatives of all parties.
The immediate object of the proposals is to ensure that during the next few
years there shall be a co-ordinated and comprehensive review of the circumstances
of our local government areas outside the administrative county of London, for
which a separate procedure was suggested and has already been set in motion,
and at the same time to provide that the adjustment of areas and, where necessary,
changes in the status of the authorities administering the areas should be effected
by a more expeditious- and less expensive procedure. I have referred to the next
few years. It may be-but no one can prophesy-that the procedure may be so
satisfactory as to last for many years. It is at any rate clear-and I need not
emphasize the point-that this is a field of our governmental administration in
which co-ordination 'is necessary, and is at present lacking. -Different tribunals

British Speeches of the Day

with different procedure deal with different aspects of the same problem. As things
stand, the Parliamentary Committee, in examining a Bill, for example, for the
creation of a new county borough, and the county council reviewing its county,
are each dealing with part only of a problem which ought to be considered as a
whole. The Boundary Commission which the Bill proposes will have authority to
deal with the whole problem.
The House will have observed that the existing control by Parliament of major
alterations-that is, adjustments between a county and a county borough or between
neighboring counties and county boroughs-will be preserved. No Order made
by the Commission for effecting or refusing an alteration of that kind can take
effect without submission to Parliament. I hope that the Bill, if it becomes law,
will substantially reduce both the time occupied and the expense to which local
authorities may be put under the law as it stands, whether they are making an
application or feeling it their duty to resist an application by one of their neighbors.
In the case of a Private Bill not only the details but the Preamble of the Bill
have to be considered in Committee, maybe twice over, first in one House and
then in the other.
I should perhaps, comment on the point, which hon. Members will have
noticed, that the Bill provides that a certain type of Order made by the Commis-
sion shall be provisional only, and it might be quite properly suggested that merely
to substitute Provisional Order procedure for Private Bill procedure would not,
in the case of an opposed Order, save either much time.or much money; but with
regard to that, I should call attention to the proposal in another Measure already
introduced by my right hon. Friend the Chancellor of the Duchy of Lancaster,
the Statutory Orders (Special Procedure) Bill. Should that Bill reach the Statute
Book it is contemplated that the Parliamentary control appropriate to the more
important decisions of the Boundary Commission would be secured by means
of that special procedure, which would effect, we believe, a considerable saving
of time and expense.
Apart altogether from any change of Parliamentary procedure, the Boundary
Commission would relieve local authorities, particularly the smaller local authori-
ties, of much work at a time when they will be very busy and will have many
most important decisions to make. It should also relieve them of expense. The
existing machinery for dealing with county districts, wherever there is opposition
and dispute, involves a double investigation, first by the county council and,
secondly, by the Minister of Health as the confirming authority. Under the
Bill, the Boundary Commission will take over the powers in this respect both of
the county council and of the Minister, and, in those cases where Orders do not
have to come to Parliament for confirmation, there would therefore be only one
stage of inquiry. I gave a number of pledges in the course of the earlier Debate,
and I ought perhaps to call attention to the fact that I think those pledges are
implemented in the drafting of the Bill.
May I give three examples? No decision involving an alteration of area or
status which is opposed by any affected local authority will be made without a
public local inquiry. That is secured by Clause 3 (9). Secondly, except in the
case of the amalgamation of two boroughs, no alteration of area or status will
involve the loss by any borough of its charter. In the third place, the Commission
will be guided by general principles, to be prescribed by the Minister of Health and
requiring approval by affirmative Resolution in each House.

The Bill's Clauses
Now I think I can pass to a few comments on the actual Clauses of the Bill.
Clause 1 provides for the establishment of the Commission, and the first Schedule

Local Government (Boundary Commission) Bill 411

deals with its constitution and proceedings. It is thought that a full membership
of five, with a quorum of three, will be appropriate. The Schedule provides for
payment, either by salary or by fees and allowances, with Treasury approval. I
contemplate that in the early years the chairman, and probably the deputy-chairman,
would devote the great bulk of their time to the work, and that the remaining
members could be on a part-time basis. It has been generally agreed, I think-
it was certainly the view of the local government associations-that the members
of the Commission should not be selected as representing particular local govein-
ment interests or particular points of view. What we shall look for is a judicial
outlook which will weigh with impartiality the interests of every type of local
authority, from the largest to the smallest.
It is in this Clause that power is given for the prescription of general principles.
In laying these down the Minister would, of course, have regard to the observations
of the Royal Commission on Local Government, which reported 20 years ago. He
would have regard to the accumulated experience of Parliament in dealing with
Bills during those 20 years and also, of course, to the experience which has accu-
mulated in the Department in dealing with Orders for county review to be made
by county councils. I am sure that everyone would agree that the framing of
these general principles and general directions is a matter on which consultation
with the local government associations would be not only proper but necessary.
The directions will come to Parliament, which will have the opportunity in that
way of guiding the Commission and, in addition, certain other opportunities which
I shall mention in a moment for keeping the work of the Commission under
Clause 2 is in very comprehensive terms. I hope that the language, which
is in a measure repetitive, will not be subject to criticism. The powers reproduced
are, in fact, those of the county councils and of Parliament under the existing
law, with this exception-that the Commission will not deal with parish boundaries
except kvhere these fall to be dealt with consequentially as a result of other parts of
an Order. Clause 3 contains the main provisions as to procedure. The Commis-
sion is given power to take into consideration-that means to hold an investiga-
tion into the circumstances of-any area of local government where they think it
desirable. In addition to that, the Minister is empowered to require the Commis-
sion to look into the circumstances of any part of the country which he thinks
should be examined. These provisions are valuable, because the working of the
first county review was somewhat uneven in quality. In some counties the job was
well done: in others there was considerable apathy. The Department is well aware
of these cases, and this provision ensures that where there was such apathy there
may be an early review. The Commission is also required to consider the position
where application for a review is made by the council of the county or by an
existing county borough. As I mention county boroughs, I am led to Sub-section
(3), which imports a change in the law. The House will remember that in 1926
the minimum figure of population for a new county borough was raised to 75,000,
and it became the law that no new county borough could be created except by
Act of Parliament, as against the Provisional Order made by the Local Govern-
ment Board of the old days. The Bill proposes that a county borough can be
created by recourse to the Commission without the promotion of a separate Bill
for the purpose, and it raises to 100,000 the figure of population needed before a
borough council can demand that the Commission shall consider such an applica-
tion. No dissent was expressed in the course of the Debate to that suggestion,
which I believe is appropriate to the greatly increased functions of such authorities.
[Mr. T. 1. Brooks (Rothwell): Is there any reference to rateable value in addi-
tion to the level of population?]

British Speeches of the Day

No, not in the Bill. That may be a matter for the general directions and will
be for consideration by the Commission in dealing with an application. What I
want to indicate is that the fact that there is this minimum does not mean that
any town with a population of 100,000 has the right to become a county borough.
The Commission will have to consider the matter as a whole, subject to any other
guiding principle which the House may decide, when any such application is
submitted for approval.
The next point is that the Minister is empowered to direct the Commission as
to the. order in which it is to proceed with its work. It will be recalled that earnest
representations were made on behalf of some of the. blitzed areas that they should
have priority. I should also mention that in the course of the present Stssion two
Private Bills have been withdrawn, on the footing that the case of those promoting
the Bills would be considered when the Commission is set up; and the Minister
will be enabled by the Bill to consider what the proper priority should be. Another
point is that, in Sub-sections (5) and (6), the Commission are required to embody
the result of their consideration in an Order, whether that Order is positive or
negative. The negative Order may surprise hon. Members at first glance, but
it is necessary for two reasons-first, to provide an Order from which an appeal
can be taken, even if it appears to effect nothing, as that may well be a ground for
complaint, and, in the second place, an Order, whether positive or negative, affords
the starting point for the period of ten years which has been brought into the
Bill. Again I think there was no dissent from the view which I expressed at this
Box that the principle of stability in regard to local government areas was of very
great benefit.
At the end of Clause 4 there is a provision that, with regard to any Order
going to Parliament, the Commission shall lay a statement summarizing the pro-
ceedings and the considerations which have led them to make their Order. That,
I think, will be of value to the House in considering such an Order. There will
not merely be a formal Order, but a statement of all that has transpired in the
course of the discussion of the case. And, in the same sphere, the sphere of the
provisions which enable Parliament to guide and keep in touch with the work
of this Commission, I regard Clause 5 as a most valuable provision, and I hope
the House will agree-the provision that the Boundary Commission shall prepare
and transmit to the Minister for laying before Parliament, an annual report. I
cannot help thinking that such annual reports from a body of the status of the
proposed Commission will be of great value and of assistance to Parliament in
considering local government affairs.
Thus it will be seen that Parliament has three different means for keeping
under review the work of the Commission, the first being that they see the
report of the proceedings which lead up to the major orders of the Commission;
secondly, the general principles which shall guide the Commission, and indeed
the main points with regard to their procedure, are to be submitted to the House
before they become effective; and thirdly, this annual report, which I think
will be of great value. The proposals in the Bill do not purport to effect radical
changes ii our local government system. I think that the view that this was not
the moment for any attempt to do that commended itself to the vast majority of
those concerned; but, having studied the question with much care and with a
profound belief in the value of our local democratic system, having had great
assistance from the local government associations, and having had the benefit of
the Debate on the White Paper, to which I have referred, I believe that this
Measure is one which will be of great value. I hope it may become law at an
early date so that the processes it contemplates, in particular the framing of the
necessary general directions, may be put in hand.e o C
[House of Commons Debates]

Ministry of Civil Aviation Bill

Minister of Civil Aviation
House of Lords, April 24, 1945
I hope with decent modesty to commend to your Lordships this short measure
to legitimize myself. The Bill vests all the civil aviation functions of the Secretary
of State for Air in the Minister of Civil Aviation. The whole of the powers and
duties which it is sought to transfer are set out in the Schedule to the Bill.
They come mostly out of two Acts of Parliament, the Air Navigation Act, 1920,
and the Air Navigation Act, 1936. Those. two Acts are concerned because, in
the first place, the Act of 1920 vested all these powers in the Air Council and
the Act of 1936, while adding certain new powers, vested those and transferred
all the existing powers in the person of the Secretary of State as an individual
Minister as distinct from the Air Council. There is, in addition to the Schedule
and to those clauses which are common form in any Bill of this kind, Clause 1
which, following our modern practice, sets out the scope of the Minister's work.
Without creating any new powers, it sets out concisely the objects of the
Ministry and the functions of the Minister and it divides them broadly into four
classes. There is the duty of organizing, carrying out and encouraging measures
for the development of civil aviation. That includes matters like airline policy,
such as we debated recently, under the White Paper, matters such as negotiations
with the Commonwealth and foreign countries for services overseas and the like,
the general policy and general agreements such as we achieved in the Common-
wealth conversations in Montreal and London, and the detailed application of all
such agreements such as we achieved in the recent and very successful confer-
ence in South Africa. I think perhaps without digressing unduly, because it is
a good example of the powers under this Bill, your Lordships might wish me in a
sentence or two to refer to that South African Conference from which I have
so recently returned.
We there dealt with Commonwealth air services in the territories represented
and in addition to the United Kingdom and the Union-because the High Com-
missioners representing both the Rhodesias and Nyasaland were present-those
special territories and all territories of East Africa. We dealt with the great trunk
route from the United Kingdom to South Africa, we dealt with the local services
in all the different territories, and with the regional services which will link up
those groups of territories and we dealt also with the inter-territorial services with
neighboring foreign countries. We agreed-and I think it was rather a remark-
able achievement in a Conference which lasted only six days-on all the details of
the operation of the great trunk route between here and South Africa. It will be
operated in a parallel partnership by B.O.A.C. and the South African Air Lines
and will be borne by those airlines using, I am glad to say, the same types of
British aircraft. We agreed upon the number of frequencies to the route, how
those frequencies shall be shared between the operators, the pooling and sharing
of revenue, how the expenses should be borne, and on the areas in which each
company will look after the commercial and technical interests of the other. We
went further because we wanted to make a thorough job of this, and under the
very expert chairmanship of Dr. Schonland, one of the ablest physicists in the
world, our experts worked out together all the meteorological services, the com-
munications and the flying aids which will be required in the various territories
for regular day and night flying all along the route. That in itself, I think your
Lordships will agree, was an extremely complete and successful thing to have
done in these few days.
We succeeded because we and the Government of South Africa and the other

British Speeches of the Day

territories were all applying those principles of ordered partnership in the air in
which we most profoundly believe. We had plenty of practical difficulties, but we
never had differences, and those practical difficulties were overcome, and easily
overcome, because we were in partnership acting to overcome them. The Con-
ference itself approved of the agreement and passed the following resolution:
"The Conference notes with satisfaction the arrangements made for the
inauguration and operation of the trunk service between the United Kingdom
and South Africa under which the British Overseas Airways Corporation and
South African Airways will operate reciprocal services on an agreed partnership
South African Air Transport Council
The Conference also set up-because we wanted to follow up the good work
and make sure that not only difficulties but all the practical questions could be
dealt with regularly and in complete agreement-the South African Air Transport
Council representing all the services concerned, including of course the United
Kingdom with the following functions: to keep under review and promote the
progress and development of civil air communications in Southern Africa; to
serve as a medium for the exchange of views and information between the mem-
ber countries on civil air transport matters; to consider and advise on such civil
aviation matters as any member Government may desire to refer to the Council;
and, in order to link it up with the Commonwealth Air Transport Council estab-
lished at Montreal with its headquarters here, to furnish a link and to co-operate
with the Commonwealth Air Transport Council and to keep the Council fully
informed of its deliberations. I think that is a great example. Other examples, of
course, of organizing this development of civil aviation are the Commonwealth
Air Transport Council itself and that interim international organization which
we agreed to set up at Chicago and which we hope we shall get established in the
very near future with its headquarters in Canada.
Then the second of the duties is defined as measures for design, development
and production of civil aircraft with a proviso which was intended to make clear
the intention of the Clause that that would not entitle the Minister to engage in
direct production. Whatever anybody's views may be on the question whether
we should have private enterprise or State enterprise or both, I do lot think any-
body would suggest that it is the proper function of a Minister of Cixil Aviation
to set up great factories. It is his business to make sure that he can place all the
orders needed for research and development, for prototypes or the like. I would
like to emphasize that that power does not in the least mean that the Minister
should take the place of that essential close contact between the user and the
producer, between the operator and the aircraft constructor which is absolutely
vital if the country is to get the right advice on aircraft. On the contrary, I take
it that these powers mean that it is the duty of the Minister to ensure that close
contact. During the war when all capacity has to be allocated by the Ministry of
Aircraft Production in order to meet the demands of the Air Ministry, of the
Admiralty and of civil aviation, the Minister must make his demand, and place
his orders through the Ministry of Aircraft Production.
The third function is defined as the duty of taking measures for safety and
efficiency-for example, the provision of navigational aids at airports and along
the flying routes; the charge of airworthiness on the advice of that admirable Air
Registration Board, and matters like trying, as we are trying now, to work out
details of the framework we laid down at Chicago, to get, as I hope we shall get,
a complete and world-wide navigation code. The fourth of these functions is
defined as research on questions relating to air navigation-for example, things
like the development of radio. Then, again, there is the link-up with thc Common-

Ministry of Civil Aviation Bill

wealth, as I explained on a previous occasion to your Lordships. We have taken
under the aegis of the Commonwealth Air Transport Council all the work which is
being done by C.E.R.C.A. The countries of the Commonwealth will work together
on radio development for civil aviation.

Type of Craft to be Used
Then your Lordships will see there is a proviso about the acquisition and dis-
posal of aircraft and their engines and equipment. The discharge of the Minis-
try's duty will be subject to the approval of the Treasury. That is that proper
financial partnership which should always, I venture to submit, exist between the
Treasury and the spending Department, and which properly is of very great benefit
to the Department. I think your Lordships will be interested in one example, that
is the disposal of aircraft. I come-back to the South African agreement. As
I have explained, we have agreed that these partnership services should be run
with the same type of aircraft, which is obviously a great economy, and these will
be British aircraft. I am glad to say that we have been able to agree-the South
African Government and myself when I was in South Africa-that these lines,
which I hope will start next July, shall be run with York aircraft. These are
quite good aircraft. I made an excellent voyage there and back myself in a
York, being on time at every single place. But they are temporary and the in-
tention is that they should be superseded by the Tudor aircraft when they are
ready. We therefore made this arrangement, that the Yorks should be leased
by His Majesty's Government to the South African Government, as they will
be to the British Overseas Airways Corporation until the Tudors are ready, and
then we shall take them back and the South African Government will buy the
Tudor aircraft. Your Lordships will probably agree that that is a practical
application of a provision about which there is a paragraph or two in the White
Paper suggesting that aircraft might be leased where that was possible. I think
your Lordships will agree that a singularly appropriate commencement has been
made by the Minister of Transport in the South African field.
The Schedule contains statutory powers and duties transferred. One or two will
be exercised jointly by the Secretary of State for Air and the Ministry-for ex-
ample, in regard to accidents. Accident investigations may relate to Service
planes or civil planes. Obviously we want the same people to make the investiga-
tions. Therefore either Minister can direct the necessary investigation. There
is no desire, as far as I am concerned, to duplicate organizations which already
exist. I will give this undertaking that I shall not seek, because a new Ministry
is established, to set up a vast number of sections and sub-departments within
it. Wherever there is an organization, which can do the job, available to the
Ministry, then it will be my aim to employ that organization for that purpose.
For instance, take research. It would be madness to set up, first of all, entirely
new research organizations. The thing to do is to strengthen those that exist. It-
will, I take it, be the Minister's job to see that all the research organizations
know what civil aviation needs, and that those organizations serve its purposes.
This is a Bill for which this House has long pressed. If these powers are vested
in me by Parliament, I give this undertaking: that my whole object will be to
use them for building up British civil aviation to play its full part on the air-
ways of the world, and, first and foremost; in linking the countries of the Com-
monwealth and Empire where we have already made so propitious a start. I
am deeply indebted to this House, which has taken so keen an interest in civil avia-
tion, and which contains among its members such a wealth of practical experi-
ence in this matter. It will, I know, continue to give me that help and counsel
which I need, and which I shall, I hope, use to the full. My Lords, I beg to
move. IHouse of Lords Debates]

British Speeches of the Da)

Parliamentary Under-Secretary of State for the Colonies
House of Lords, May 15, 1945

The general subject of mining in the Colonies is, of course, one of very far-
reaching importance in very many ways. It affects, and affects most profoundly,
the lives and the whole system of living of the populations in those Colonies where
minerals are discovered; and, by producing revenue from a hitherto relatively barren
territory, it may make possible administrative reforms and advances which even
with the aid of the Colonial Development and Welfare Fund would otherwise have
been scarcely within the realm of practical politics. Because it is of such great
importance, the whole subject of mining operations in the Colonies is now under
review, in order that a definite policy for the guidance of Colonial Governments
may be formulated. The conditions, as has been mentioned by the noble Lord,
Lord Hailey, are very diverse in'the different Colonies, and it is therefore quite
impossible to lay down more than broad, general principles. It would not be pos-
sible to lay down a detailed course of policy which would be equally applicable in
every case.
There is, of course, one great difference between mining activities and almost
all other forms of productive activity, such as agriculture, animal husbandry and
forestry. These are continuous processes and, provided due attention is given to
the maintenance of soil fertility, and provided that the goat and the camel can
be restrained from their hereditary task of creating a desert, there is no reason why
they should not go on indefinitely. Mining, however, is an entirely different opera-
tion, in that it consists in the removal of valuable substances which, in the nature
of things, can be removed only once. I believe that in the case of sulphur it is
mined in volcanic vents and so does renew itself, but otherwise minerals do not
renew themselves at all, and once you have taken them away you have taken them
away for good. The process is therefore in the nature of the realization of a capital
asset rather than the reaping of a crop. The aim of mining policy must therefore
be to make the best possible arrangements for realizing this capital asset and to make
sure that when it is exhausted the labor forces who have been attracted to the scene
of operations shall not be left high and dry.

Ownership of Mines
The noble Lord who spoke last mentioned that mining operations vary greatly.
Some are temporary operations from which you move on. The labor force which is
desirable varies greatly according to whether the life of your deposit is likely to be
a long or a short one. Some measure of control is therefore necessary and inevitable,
but care must be taken to avoid such excessive control as would stifle private enter-
prise or check the flow of capital for the development of the mineral resources of
the Colonies. I can see no reason, however, why the interests of the private investor
and the limited liability company should not be reconciled with those of the Colonial
communities concerned, to the mutual advantage of both. As has already been
said, the law regarding the ownership of minerals varies very greatly between the
different Colonies. In some the Crown owns all the rights; in others it retains rights
in lands alienated after a given date, the rights in lands alienated before that date-
being in the hands of private owners. In other territories, again, the rights are
vested in corporations, and in others all mineral rights belong to the surface owners.
In the Colonies especially I think that powerful arguments can be adduced for
the vesting of all mineral rights in the Crown. In pursuit of that conception, most
Colonial legislation already provides for the reservation of mineral rights in any

Mines in British Colonies

future sales or alienations of Crown lands; but a very different problem arises when,
as has not infrequently happened, mineral rights have already been alienated and
have passed into private hands. The question then arises of whether it is or is not
desirable for the Colonial Governments to re-acquire such rights, for the Crown.
It would obviously be entirely contrary to the principles of equity for such a re-
acquisition to be made without compensation. In the case of mineral deposits which
are already being actively exploited, it is a matter for judgment in each separate and
individual case whether the course of acquisition would in fact be justified by the
advantages gained. It is not possible, therefore, to lay down any general rule about
the policy governing the acquisition for the Crown of mineral rights.

A Committee of Geologists
It seems desirable that there should be a comprehensive geological survey of the
potential mineral wealth of the Colonial Empire. My right hon. Friend has there-
fore appointed a committee of eminent geologists to advise him. Their report has
been made, and is now under consideration in the office. It recommends the setting
up of regional surveys in the Colonial Empire, with a central pool in London, from
which specialized officers can be loaned to the regional surveys dr carry out geologi-
cal work in the small Colonies not included in the regional surveys. I believe that
is a better plan than the setting up of a Mines Department. in the Colonial Office,
because the conditions -are so diverse that no central office could possibly be com-
petent to deal with all the problems which would arise. What seems to be required
is the strengthening of the Mines Departments in the Colonies and closer co-opera-
tion between these Departments and the geological surveys. It is scarcely possible
to hope that the Mines Departments in all the different Colonies should be familiar
with all types of mine. That would seem to indicate the necessity for some form
of expert advice being available when required, and I think it possible that this ex-
pert advice can be made available by the setting up of a panel of experts, each one
expert in some special department of mining, who could make investigations and
give technical advice whenever a problem arises.

Colonial Governments' Revenue
Then the noble Lord and other noble Lords went into the question of taxation.
There are two aspects to be considered. On the one hand, there is the question of
whether an enterprise which is exploiting the mineral resources of a particular
Colony is making sufficient contribution to the revenue of that Colony,,and, on the
other, there is the difficult and thorny question of the division, in the cases of mining
companies which are registered or controlled in the United Kingdom and are there-
fore subject not only to local taxation but also to United Kingdom taxation, of the
total tax levied between the United Kingdom and the Colonial Governments. That
is a very difficult question, which will need very careful consideration when war
conditions exist no longer. The normal method by which Colonial Governments
obtain revenue from mines as such is either by means of a royalty on the mineral
worked or by export duties. Royalty is a very much misunderstood term. Strictly
speaking, it is not taxation or a rent, but purchase money or compensation for the
removal of a capital asset, and the payment of royalty does not therefore relieve a
company from its liability to general taxation. Where minerals are privately owned
and the royalty therefore goes into private hands, Colonial Governments have some-
times derived revenue by means of an export duty, especially where more general
forms of direct taxation are not in operation.
I think I can definitely assure the noble Lord that the general policy to be laid
down from the Colonial Office will be that, while anything in the nature of penal
taxation, taxation such as is likely to discourage any kind of individual enterprise,
must be avoided, mining enterprise should be taxed on a scale which will not only

British Speeches of the Day

repay to the Government such expenditure as they incur in the way of new roads,
possibly new railways or other communications, but will replace the capital asset
which will have gone when the mineral is exhausted. On the difficult question of
double taxation the arrangements are now being reviewed in the light of the prin-
ciples of the Treaty which has just been concluded between the United Kingdom
and the United States on this same subject of double taxation.

Education of Africans
The noble Lord who moved the Motion raised the question of the education of
Africans and other Colonial nationals to undertake positions of responsibility. This
question of course affects the mining industry, but not the mining industry alone.
He also referred to the education of doctors in Africa. I can assure him that there
is a medical school in Lagos, but for some reason the practice of the bar seems to
have more attraction than the practice of medicine, and greater numbers of students
are attracted by the legal profession. But the question of the education of Africans
affects, of course, the whole of Colonial administration and of social welfare in the
Colonies. But I can assure the noble Lord that Colonial nationals are being actively
encouraged and taught to take a more prominent part in the development of their
own affairs. To take only one example, a grant of f401,000 has recently been
obtained under the Colonial Development and Welfare Act for a ten-year plan of
technical education in Nigeria. In addition, Government scholarships are to be
made available for suitably qualified members of the staff of the Nig rian Govern-
ment colliery and of the Mines Department. That will enable students to come to
this country for training in mining engineering at a British university. Of course,
these are voluntary spare-time classes, and other measures have also been introduced
to enable African technical staff of the Mines Department to improve their qualifi-
cations. So I hope I can assure the noble Lord that the kind of steps that he desires
are being pursued now, and they will be pursued more actively as soon as the war
is over and the staff can be made available.
I do not propose to follow the noble Lord in his references to the color bar.
On that I think he has been so fully answered that I need not pursue the subject.
My right honorable Friend has stated publicly quite recently that the principles
outlined in the resolution of the British Council of Christian Churches do form the
basis of the policy of His Majesty's Government, which is to do all in their power to
secure equal treatment irrespective of color for all His Majesty's subjects. That
remains the policy of His Majesty's Government.

Problems Involved by Change
The noble Lord also referred to the question of lack of co-ordination between
mines and the needs of surrounding villages. Of course the opening up of a mine
inevitably produces far-reaching changes in the life of a primitive community. In
Africa, more particularly, the African is transferred not by compulsion but by attrac-
tion from rural to urban surroundings. The problems created by this abrupt change
-a noble Lord used the phrase "an urban proletariat"-are being carefully consid-
ered by my right honorable Friend's experts and advisers. At the five principal
mining centers in Northern Rhodesia the mines managements provide and supervise
their own mine compounds for the accommodation of the people they employ. In
each case a town has grown up outside the mine's compound, and in each of these
towns the Government have established a township board for the purpose of local
administration. Outside the boundaries of these townships there are a number of
small villages, and these are under the control of the local native administrations,
which employ their own sanitary inspectors and provide certain other services, such
as the control of the brewing and sale of beer, which provides one of the principal
social problems in the mining townships and the adjacent villages,

Mines in British Colonies

The noble Lord also referred to the social and physiological disturbance created
by taking natives away from their villages to work in mines at a distance. I do not
know whether your Lordships are under any misapprehension on that subject. No
compulsion is exercised in Colonial territory for the recruitment of labor for the
mines. There was one exception which no longer exists, which was at a moment of
acute need, when it was necessary for vital war production to conscript labor for
the Nigerian tin mines. But that is a thing of the past. The African seeks work
on the mines of his own volition, and it would be extremely difficult to check the
recruitment of labor for the mines, even if it were desirable to do so. The attrac-
tions are relatively high wages and the possibility of earning in a year or two more
cash than the cultivator of the soil could earn in many years, the prospects of a
change in a new occupation, and perhaps the love of adventure. It is a case that
an African who has served in the mines does enjoy a prestige which his stay-at-home
brother does not. His visit to the mines may make formidable problems. He may,
unhappily, contract miner's phthisis or some other disease of civilization. But he
goes back home with his bicycle, his gramophone, possibly his wireless set, and,
above all, with cash to buy himself a wife or two; and he would regard it as most
unjust if he were debarred from taking part in this adventure.
I would maintain, therefore, that the migration of labor from all over Africa to
the mining areas is not in itself bad, though of course it may develop highly undesir-
able features such as the unsatisfactory conditions of recruitment, travel or employ-
ment and excessive migration involving absence from home for too long periods-
and I could not agree more than I do with what my noble relative said about that.
It is most undesirable that if a man is going to be a visiting miner it should be for
a long period. Absence for too long periods of too large a proportion of the male
population from their homes may lead to a breaking down of local custom and
authority, to a loosening of home ties, and so on. All those things need to be very
carefully considered.

Policy of the Governments on Labor
The policy of the Governments of Northern Rhodesia and Nyasaland is to secure
proper conditions of employment for their nationals migrating to Southern Rhodesia.
or to the Union of South Africa, by agreement with the authorities in those terri-
tories. The tripartite agreement among Northern Rhodesia, Nyasaland and South-
ern Rhodesia provides, among other things, for the proper care of migrant labor
during employment, the provision of rest camps, food depots and so forth on the
main labor routes, the provision of cheap and rapid transport and the introduction
of a voluntary remittance system so that the laborer can send a fair proportion of
his wages home. That is the tripartite agreement among Northern Rhodesia,
Nyasaland and Southern Rhodesia. The Northern Rhodesian and Nyasaland Gov-
ernments have made an agreement permitting the Witwatersrand Labour Associa-
tion to recruit from their territories a fixed number of laborers for work in the
Union. The conditions of employment conform to the requirements of the I.L.O.
and include free transport from the place of recruitment to Johannesburg; the provi-
sion of free quarters; adequate food and medical services; repatriation and transport
home after a period not exceeding eighteen months; a system of deferred pay
whereby approximately a quarter of the workman's pay is retained for him pending
his return home; and the advance to each African on engagement of a sum equal
to his current taxation to his territory and the payment of that sum to his Govern-
The danger of excessive migration is being met by local development designed
to provide more attractive conditions of life and work at home. Both the Govern-
ments of Nyasaland and Northern Rhodesia are actively engaged on the preparation
of plans for post-war social and economic development designed to improve the

British Speeches of the Day

standard of living and economic conditions in both rural and municipal areas, and
it is reasonable to hope that the application of these plans will tend to some extent
to reduce the stream of migration of Africans in search of work and money.

Measures are already actively in hand to deal with the problems of health in
the mining areas. A bureau is being set up in Northern Rhodesia which will under-
take the systematic examination of all persons engaged in the mining industry with
a view to checking the spread of silicosis. In Nyasaland a Committee has already
reported on the problem of venereal disease, and some of its recommendations are
already being put into operation. My right honorable Friend has recently) approved
the grant of 42,000 under the Colonial Development and Welfare Act fir the pur-
chase of drugs to provide free treatment at all Government and mission medical
centers, and active' steps are also being taken to deal with tuberculosis in the rural
areas. I hope I have said enough to show that the noble Lord, in what he said
this afternoon, is really knocking at an open door. The policy he desired is being
pursued, and actively pursued. [House of Lord- Debates]

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 from some of -the questions asked during April and May, 1945,
is included below, together with the Ministers' answers, with the int, nation
of illustrating the scope and purpose of this part of Parliamentary bu.iness.

Mr. Higgs (Conservative) asked the Chancellor of the Exchequer if he can give
the approximate annual value of goods supplied on Lend-Lease to Russia by this
Country and the U.S.A. since the system was introduced.
The Chancellor of the Exchequer [Sir I. Anderson]: The approximate
value of goods provided by His Majesty's Government to the U.S.S.R. under Mutual
Aid up to June 30, 1943, was 179,000,000 and 90,000,000 during the ycar ending
June 30, 1944, making a total of 269,000,000. These figures, which do not of
course include such indirect contributions as the loss of ships on convoy, have been
published, with certain further details, in the two reports on Mutual Aid issued as
Cmd. 6483 and 6570.
Figures of Lend-Lease aid by the -Government of the U.S.A. to th. U.S.S.R.
have been given in the President's 18th Report to Congress on Lend-Lease opera-
tions, dated February 20, 1945. This shows that supplies valued at about 606,-
000,000 were exported to the U.S.S.R. under Lend-Lease up to the end of June, 1943,
and supplies valued at about 1863,000,000 during the ensuing year, making a total
of 1,474,000,000. [May 15, 1945]

Viscount Hinchingbrooke (Conservative) asked the Secretary of State for
India whether he is now in a position to state how many members of the Indian
Legislative Assembly are serving terms of imprisonment; and of those released, how
many are precluded from attending or speaking in the Assembly and for what
period it is intended that this disability shall persist,

Question Time in the House oj Commons

The Secretary of State for India [Mr. Amery]: Yes, Sir. None of the
200 members of the Central Legislature is serving a term of imprisonment. One
member of the Council of State and three members of the Legislative Assembly are
at present under detention. Of the three members who have been released from
detention, none is precluded from attending or speaking in the House.
Viscount Hinchingbrooke: Is my right hon. Friend satisfied that no
change of policy is warranted in this regard?
The Secretary of State for India: The matter is continuously under the
review of the authorities in India. [May 3, 1945]

Colonel Sir Arthur Evans (Conservative) asked the Secretary of State for
the Colonies if His Majesty's Government have now had an opportunity of con-
sidering the Report of the Jamaican Economy Policy Committee, of which Dr.
Benham, Economic Adviser to the Comptroller of Development and Welfare in the
West Indies, is chairman; and whether he has any observations to make.
The Secretary of State for the Colonies [Colonel Stanley]: The Economic
Policy Committee was appointed by the Governor of Jamaica and the Committee
reported direct to him. The report is now under consideration by the Government
of Jamaica, and I have no observations to make on it at this stage.
Sir A. Evans: Am I to take it that this matter 4oes not come under review
at the Colonial Office? Will not my right hon. and gallant Friend also express
himself on it?
The Secretary of State for the Colonies: My hon. and gallant Friend
will realize that Jamaica now exercises a very considerable.degree of self-government,
and any observations I have to make would naturally be very much influenced by
the views of the Jamaica Government. [May 16, 1945]

Major-General Sir Edward Spears (Conservative) asked the Secretary of
State for Foreign Affairs what steps, now that the Arab League has been formed,
are being taken to carry out the pledge he gave in May, 1941, that His Majesty's
Government would give their full'support to any scheme of Arab unity that com-
mands general approval.
The Minister of State '[Mr. Law]: His Majesty's Government have wel-
comed the successful formation of the League of Arab States. They will await
with sympathy and interest the results of the detailed conversations which are now
to be begun for reducing the various barriers which divide the Arab peoples and
for promoting co-operation between them. They hope that these discussions will
yield useful and practical results. rMay 9, 1945]

Sir L. Lyle (Conservative) asked the Secretary of State for War the extent to
which we are undertaking to feed German civilians; and what ceiling there is to
the amount of food we are able to supply.

British Speeches of the Day

The Financial Secretary of the War Office [Mr. A. Henderson]: Instruc-
tions have been issued by the Supreme Commander, Allied Expeditionary Force,
that no imported foodstuffs will be issued to the German people except in extreme
emergency. Such a state of emergency will only be held to arise when indigenous
resources available in any area are insufficient to prevent disease or are such that,
unless supplemented, they will lead to conditions which will interfere with the
objects of the' occupation. While it is further laid down that the levels of food
consumption by the German population will not be permitted to exceed those for
civilians in liberated countries, the actual amount of food which may be available
is subject to the limitations, first, that the requirements of Allied countries have
priority over those of German civilians, and, second, that the amount of food which
can be imported into Europe as a whole is limited by transportation difficulties.
S[May 9, 1945]

The Secretary of State for the Home Department [Mr. Herbert Mor-
rison]: In accordance with the Government's declared policy of relaxing wartime
restrictions as soon as changes in the war position make this possible and desirable,
advance consideration was given to the question of what Defence Regulations could
be dispensed with on the termination of hostilities in Europe, and I am glad to be
able to announce that a large number of Defence Regulations have been revoked by
Order in Council today. Five of the special codes of Regulations, including the Fire
Guard Regulations, have been revoked entirely and parts of other special codes.
Of the Defence (General) Regulations 84 have been revoked entirely nnd another
25 in part. The Regulations which have been revoked include those to which
Parliament has rightly given especially vigilant attention because of their effect on
the general field of civil liberties.
Among those revoked are the following:
Regulation 1AA which contained exceptional provisions relating to trade dis-
putes, Regulations 2C and 2D which related to the systematic publication of matter
calculated to foment opposition to the war effort, Regulation 18A which empowered
the Home Secretary to restrict the movements and activities of suspected persons,
and Regulation 18B, which is perhaps sufficiently well known not to need descrip-
tion. By the beginning of this week the release of all persons detained under this
Regulation had been authorized, with the exception of one alien who is to be
deported and is being detained temporarily under a Deportation Order. There
have also been revoked Regulation 18D, which authorized the temporary detention
of suspected persons pending inquiries, together with the corresponding part of
Regulation 88A, Regulation 39BA, which dealt with the publication of reports likely
to cause alarm or despondency, and Regulation 39E, which gave special powers
for the prohibition of processions and meetings.
It will of course be present to the minds of hon. Members that the end of the
fighting in Europe is not the end of the war and that a number of the Regulations
imposed whether for security or other reasons, must be retained until the war
against Japan has been brought to a successful conclusion. There also remains for
consideration the question of such of the controls as will be required during the
transitional period to ensure the best use of available supplies and services in the
national interest. A Bill which will give the House an opportunity for the full
consideration of this question is about to be introduced.
A Revocation Order will be laid before Parliament at once-copies will, I hope,
be available in the Vote Office tomorrow-and its lengthy Schedules will show that

Question Time in the House of Commons

every effort has been made to dispense without delay with those Regulations which
have ceased to be essential now that the European war has come to an end.
As the Minister who has been chiefly concerned with certain limitations imposed
on our civil liberties by the stress of war, I am happy to announce the sweeping
away of these limitations, the relinquishment of the exceptional powers entrusted
to the Home Secretary, and the return to those traditional British freedoms which
all of us who hold the democratic faith are zealous to maintain.
[May 9, 1945]

The Parliamentary Secretary to the Ministry of Supply [Mr. John
Wilmot]: The Government have given instructions that paper-including en-
velopes-is to be made available for the-General Election at the rate of one ton for
each candidate for a constituency of up to 40,000 electors, with an extra five hundred
weights for every additional 10,000 electors; the quantity to be increased by one-
quarter for independent candidates. [Hon. Members: "Why?"] If hon. Members
will allow me.to proceed, I think they will see frort the rest of the reply. The
headquarters of the established parties will, in addition, be allowed paper at the
rate of one ton for each candidate run by the party. In the case of the small
parties, an additional five tons will be licensed, provided that their total quantity
is not increased above 40 tons. On the announcement of the General Election,
candidates will be entitled to obtain their paper on presentation to any paper mer-
chant of a certificate that they intend to stand; this certificate will be signed by the
candidate's agent. The certificate will entitle the merchant to obtain replacement
of the quantity of paper supplied. There will, no doubt, be a large number of
candidates, and, in ordei to ensure that they shall have no difficulty in securing
their supplies promptly, the Paper Control will be ready to license delivery of stocks
of paper in advance, upon which candidates may draw in due course, to a limited
number of paper merchants with whom the parties have made arrangements. The
maximum prices in the Control Orders will, of course, apply to these as to other
sales. [May 9, 1945]

Major Lloyd (Conservative) asked the Prime Minister whether he can now
state the total casualties suffered by the Armed Forces of the Crown during the
present war to date, compared with those suffered in the Great War, 1914-1918.
The Prime Minister: The total casualties suffered by the Armed Forces,
of the British Commonwealth and Empire in the present war, as reported from
September 3, 1939, to the end of February, 1945, a total of 66 months, were
1,128,315 of which 307,201 were deaths....
In the first Great War the total casualties suffered by the British Commonwealth
and Empire Forces in 52 months were 3,286,090 of which 996,230 were deaths ....
[May 29,1945]

Mr. E. Granville (Independent) asked the Secretary of State for the Home
Department the total civilian casualties to date from enemy action.
The Home Secretary [Mr. H. Morrison]: The total number of civilian
casualties, killed and injured, due to enemy action in the United Kingdom from the
outbreak of war to date is 146,760.

British Speeches of the Day

The following table gives the separate figures of killed and injured and detained
in hospital:

Killed (or missing, believed killed)
Men Women under 16 Unclassified Total
26,920 25,392 7,736 537 60,585

Injured and detained in hospital
Men Women under 16 Total
.40,736 37,816 7,623 86,175
[April 20, 1945]

Lieut-Colonel Sir Assheton Pownall (Conservative) asked the Secretary of
State for the Home Department if he will state the number of civilians killed dur-
ing the war by enemy action in the London region and the number wounded.
The Secretary of State for the Home Department [Mr. H. Morrison]:
The civilian casualties due to enemy action in Loridon Region during the war in
Europe are:
Injured and
Killed detained in hospital
29,890 50,497
In addition there were numerous slightly injured persons who did not require
hospital treatment. [May 17, 1945]

Commander Locker-Lampsbn (Conservative) asked the Prime Minister if
he will give an estimate of the total damage to houses and property in this country
through bombing; and if he will ensure that the Germans pay for this in reparations.
The Chancellor of the Exchequer [Sir i. Anderson]: It is not possible at
present to estimate closely the total damage caused to all property in this country
as a result of German bombing attacks, but I think it would be safe to say that the
figure will exceed 1,000,000,000. As already announced, a Commission is to be
established, which will consider the question of the extent and methods for com-
pensating the damage caused by Germany to the Allied Powers. Bomb damage will
certainly not be left out of account in this connection.
Sir I. Albery (Conservative): Is my right hon. Friend's estimate of approxi-
mately 1,000,000,000 based on the actual damage done, at today's cost, or is it
the compensation which will be paid under the War Damage Act?

Question Time in the House of Commons 425

The Chancellor of the Exchequer: Any calculation must necessarily be
based, in the first instance at any rate, on the compensation which is likely to be
payable. I did not give an estimate of 1,000,000,000. I want to make it clear
that what I said was that I thought it was safe to assume that the damage would be
at least 1,000,000,000. [May 9, 1945]

Mr. Petherick (Conservative) asked the Minister of Health what is the total
number of dwelling-houses in the United Kingdom which have been so badly dam-
aged as a result of enemy action since the beginning of the war that they are
irreparable; and how many persons those dwellings are estimated to have housed.
The Minister of Health [Mr. Willing]: The number of houses recorded as
destroyed or damaged beyond repair is 203,720. The number of persons who occu-
pied these houses is estimated at approximately 800,000.
[April 12, 1945]

Mr. Speaker: If I might make a slight interruption in the proceedings at
this stage I would remind the House that in peacetime it was the custom that the
lantern light above Big Ben always shone out after sunset, in order to show that
the House of Commons was at work. For five years, seven months and 23 days,
this light has been extinguished. When I press the switch beside the Chair, as I
am about to do now, our lantern light will shine once more.
Hon. Members: Hear, hear.
Mr. Speaker: In so doing I pray that, with God's blessing, this light will
shine henceforth, not only as an outward and visible sign that the Parliament of
a free people is assembled in free Debate, but, also, that it may shine as a beacon'
of sure hope in a sadly torn and distracted world.
I now turn on our lantern light.
Hon. Members: Hear, hear.
The Comptroller of the Household [Mr. Mathers]: On this unique
occasion, may I be permitted to move, "That the words which you, Mr. Speaker,
have addressed to the House relating to the light on the Clock Tower be-entered
on the Journals of this House."
Hon. Members: Agreed.
Question put, and agreed to.
Speaker's words to be entered upon the Journals of this House.
[April 24, 1945]


The Journal of the Parliaments of the Empire is a quarterly publica-
tion issued by the Empire Parliamentary Association, giving a summary
of the proceedings of general interest in the various legislatures of the
British Commonwealth. It provides not only an account of the views of
representatives of various parties in the different Parliaments on inter-
national affairs and other important subjects, but also an account of
legislative enactments of general interest. It thus provides information,
in a condensed form, on legislation and the points of view of leading
men in various parts of the British Commonwealth upon many matters
which are of common interest to those in the United States of America
who are concerned with parliamentary and international affairs.
The Journal is obtainable in North America from the Oxford Uni-
versity Press, 480 University Avenue, Toronto 2, Ontario, Canada. Price:
$1.25 per copy, plus postage, $5 per annum post free.



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Britain. A monthly magazine. $1.00 a year; $1.20 in
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Education, Rationing, Women's Work, Industry, etc., may
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50 Facts About Britain's War Effort.
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