Skip to main content

New Bill

Volume 178: debated on Tuesday 16 July 1907

The text on this page has been created from Hansard archive content, it may contain typographical errors.

Larceny Bill

"To amend The Larceny Act, 1861," presented by Mr. Courthope; supported by Sir John Dickson-Poynder, Mr. Warner, Mr. James Mason, Mr. Leif Jones, Mr. Hicks Beach, Mr. Lane-Fox, Mr. Everett, Mr. Gardner, Mr. Acland, Mr. Brace, and Mr. Verney; to be read a second time To-morrow, and to be printed. [Bill 279.]

Finance Bill

As amended (in Committee and on re-committal), considered.

moved a new clause providing that notices of assessment of income-tax shall be issued as nearly as may be in the same terms on or after the first day of December in each year, and the same shall become payable and shall be collected in the same form and at the same time in the United Kingdom, and legal proceedings in the respective countries for recovery of income-tax shall also be taken as nearly as may be at the same time. So far, he said, nothing had been done to remedy the inequality which existed in the matter of the levying of the income-tax in England, Scotland and Ireland. Broadly speaking, the tax should be levied in the three countries in precisely the same way. It was a common and just principle that each country should be treated alike. In recent years there had been a great deal of resentment felt at the way in which the tax had been collected. The notices of assessment differed in the three countries. In Scotland the notice was printed with the words "Notice to pay" in bold type and underlined, whilst in England the demand was simply a polite intimation that the tax was due. In Scotland the notices. were issued in September, October and November, while in England they were not issued till the end of November or the beginning of December. He had in his hand a list of notices sent out in the two countries. In Scotland the first was issued on 22nd September and the last on 7th November; of these, thirteen were received. In England, the first was not sent out until 30th November and the last on 24th December, during which time nine were received. He failed to see why there should be this difference in the collection of the tax. It was not due until January, and there was no need at all why the notices in Scotland should be issued as early as September. Of all countries in the world, in Scotland this was the least necessary. Unless this new clause were accepted the Scottish income-tax returns would continue to be received into the Exchequer at an earlier date than was the case with England. Another point he wished to bring out was that of enforcing payment of the tax. A friend of his received a notice that the tax was due within seven days. Unfortunately he was ill in bed at the time and the matter escaped his attention until after the prescribed date. He sent a cheque immediately to the income-tax collector, but it was returned, and he was informed that it could now only be paid to the sheriff's officer. This he did, together with 10 per cent. added for the extra cost of collecting. That was the sort of thing which had been going on in Scotland for many years. Inasmuch as the tax is an Imperial one, he contended there should be no greater pressure in Scotland than in England or Ireland, and he sincerely trusted that the Chancellor of the Exchequer would accept his new clause. On 8th June, 1901, the Secretary to the Treasury stated that Scotland and England should be treated alike and that no pressure should be used in one country which was not also used in another. Since then the question had been brought before Parliament, but no difference whatever had been made in the collection of the tax. The pressure had been going on in Scotland while England had been allowed to lag behind. The Chancellor of the Exchequer had stated that he was anxious to establish equality between the two countries, and all that this new clause asked was that there should be common justice in the matter. He begged to move.

seconded. He failed to see why there should be any difference between the collection of the tax in Scotland and the collection in England. For 200 years England had been joined to Scotland, and during the whole of that time instead of trying to assimilate the law of the country and its procedure Parliament had been engaged in passing separate laws in the two kingdoms. He saw no reason why the Scottish people should be pressed for their income-tax to a greater extent than the people of England. It seemed to him monstrous that in Scotland notices should be sent out in September reminding a man that he had got to pay a tax in January, whereas in England no such reminder was issued until December. Much of this pressure would seem to arise through the extra vigilance of the Scottish excise officer. The income-tax collectors in Scotland were much more stringent and arbitrary than was the case in England. In the latter country the method of collection was more gentle and reasonable. He urged the Chancellor of the Exchequer to give effect to his hon. friend's new clause so that the process of collection in the two countries might be the same.

New clause—

"Notices of assessment of income-tax shall be issued as nearly as may be in the same terms on or after the first day of December in each year, and the same shall become payable and shall be collected in the came form and at thee same time in the United Kingdom, and legal proceedings in the respective countries for recovery of income-tax shall also be taken as nearly as may be at the same time."—(Mr. C. E. Price.)

Brought up, and read a first time.

Motion made, and Question proposed, "That the clause be read a second time."

assured his hon. friends that he was entirely in sympathy with them in their desire to remove any disabilities under which Scotland lay in regard to this or any other matter. He hoped, however, that the new clause would not be pressed. In the first place, the hon. Member proposed to prohibit the issue of notices before the first day of December, and he did not think that that was at all a desirable thing, He was aware that the system of collection in England and Scotland was not uniform. He thought the hon. Member would find that upon many estates in Scotland it was the practice to deduct the in come-tax from the November rent, and it would be very inconvenient to disturb that arrangement. With regard to the main purpose of the Amendment he entirely agreed with the hon. Member. He did not think the machinery for the collection of the tax should be more stringently enforced in one country than in the other, but what he was anxious to do was to bring England up to the level of Scotland. He had already expressed his opinion on this point, and he trusted that by rigorous and effective administrative action he would be able to get the income- tax in at an earlier date. Scotland had led the way in the matter. He could assure his hon. friend that everything was being done to bring about an assimilation of the dates of collection, and certainly, no preference would be shown to the southern side of the border.

hoped the fact that they had at present a Scottish Chancellor of the Exchequer would somewhat allay the anxiety of hon. Members opposite on this point. He agreed that it was desirable to expedite the collection of the income-tax, although he was inclined to believe that the grievance in Scotland was largely an imaginary one. Whilst he was at the Treasury attention was specially directed to what were called the threatening notices. It was not possible for all those notices to go out on the same day, but the collectors might all begin on the same day to send them out. He thought the pressure should be brought to bear equally in all the three kingdoms, and he wished success to the efforts the Chancellor of the Exchequer was making in that direction. He thought something more might be done to expedite the collection of the income-tax in England, although in his opinion the greivance alleged on behalf of Scotland was very largely exaggerated, and such foundation as existed for it was not a sufficient basis for the superstructure which some hon. Members had tried to place upon it.

said he could not agree with the ex-Chancellor of the Exchequer that this was an imaginary grievance in Scotland. They had had a long fight in regard to it. He raised the same question five years ago, and successive Chancellors of the Exchequer had promised to do their best to bring about an equality. The two predecessors of the right hon. Gentleman had said they could not make the change while the war income-tax stood at 1s. 3d. in the £, but the late Chancellor of the Exchequer set himself to redress the grievance and accelerated the collection in England, with the result that within the financial year he got in an extra £800,000. That was the point he wished to impress upon the House. He had more faith in the regeneration of England than his hon. friend. He thought they ought to direct their attention to bringing up England to the standard of Scotland. Two legitimate grievances had resulted from the present system. One was that the large amount of income-tax outstanding for two months after it was due in England, amounting to £11,500,000, necessitated a great loss to the State in interest. He calculated that in this way there was a loss to the revenue of £30,000 every year. On 18th March they had a very definite pledge from the Chancellor of the Exchequer, who said—

"I think any change ought to be made in the direction of increased stringency in England rather than increased laxity in Scotland."
They ought to accept that as a pledge given by the right hon. Gentleman. The second grievance resulted from the income-tax not being collected within the financial year, which was very detrimental to their financial system. Sir Michael Hicks-Beach put an extra 4d. on the income-tax in one year, and he expected to raise by that another £10,000,000, but owing to the loose system, instead of getting £10,000,000, he could only calculate on getting £8,000,000 within the financial year, and the State had to lose the benefit of the £2,000,000 for that year. Therefore, from the point of view of equality of treatment and making good this loss of interest, he asked the Chancellor of the Exchequer to carry out the pledge he had given. They did not want Scotland dragged down to England's level, but they wanted England brought up to the Scottish standard. If they issued the notices in December the tenant would have to pay his landlord's tax, and at the very latest would have to pay it in the second week in February; consequently he would have to wait for his money for twelve weeks till the Whitsunday term. He thought the Chancellor of the Exchequer might consider whether the tax under Schedule A should not be levied directly upon the landlord. He could point to municipal administration where a system obtained under which the occupier had to pay the landlord's share and deduct it from his rent. That system had now been abolished and the collection had not suffered. He thought it was equitable that the landlord who owed the debt should pay it in the first instance. For these reasons he hoped his hon. friend would withdraw his Amendment, because in its present form it was a step backward. They were now within sight of port after five years fighting, and he hoped the Chancellor of the Exchequer's assurance would be accepted.

hoped his hon. friend would press his Amendment to a division as a protest against the existing inequality. It was all very well for the Chancellor of the Exchequer to tell them that he was trying to bring England up to the Scottish standard. That was exactly what the right hon. Gentleman's predecessors had promised but had always failed to carry out. It was a very difficult task to bring England up to the level of Scotland, and he thought it would be better to drop Scotland down to the level of England. They also had a grievance in the tone of the notices sent out in Scotland, which was arbitrary and almost insolent. In the Scottish form the words were, "To the person on the back hereof. Take notice." He thought that tone indicated that the income-tax collector had the view that Scotland was a nation to be overridden easily. He would vote for the new clause if it was pressed to a division.

said he agreed with the Chancellor of the Exchequer in desiring that England should be brought up to the standard of Scotland. The hon. Member for the College Division of Glasgow had alluded to the manner and tone of the tax collectors. He himself thought that, at times, there was something left to be desired in that matter. He remembered bringing under the notice of the right hon. Gentleman the Member for East Worcestershire, who was then Chancellor of the Exchequer, a grievance of his own. He happened to pay taxes in various parts of the country, and he had always paid his income-tax before the end of January. In the particular year to which he referred he received a somewhat peremptory notice, and when the matter was looked into the right hon. Gentleman found that similar complaints had been received from other Members of the House, who had always paid their income-tax regularly. He hoped that such instructions would be given by the Chancellor of the Exchequer to his subordinates of the Inland Revenue as would secure that, in the sending out of the notices, due regard would be had to what was reasonable and proper, so that people might not be harassed and troubled unnecessarily. He was quite willing to increase the stringency of the collection provided this was made uniform and the matter was conducted with reasonable courtesy.

said that the debate had fully justified the hon. Member for the Central Division of Edinburgh in moving the now clause. This was not an imaginary grievance. Some of his own constituents had been harshly treated in the matter. He received almost every year communications which had convinced him that the taxpayers of Scotland were treated in a different manner from those of England. The Chancellor of the Exchequer had delivered a speech which many hon. Members thought indicated that he had at last made up his mind to deal with the question, and that in the following year there would be no further ground of complaint. The grievances still existed, and his hon. friend's contention that the systems in England and Scotland should be assimilated was fair and reasonable. If that was really the aim of the Chancellor of the Exchequer he would advise his hon. friend to be content with that for this year, in order that the right hon. Gentleman might have an opportunity of seeing what could be done before bringing forward next year's Budget.

thought the income-tax payer who was placed at the greatest disadvantage in Scotland was the man in a country district; he got an additional notice-paper when the term came round in November, and he very often paid three months ahead of the corresponding taxpayer in England. So far from wishing that there should be any slackness in the system of collection, he thought the bringing up of the "predominant partner" to the level of Scotland would be the proper solution of the question.

said his hon. friend the Member for the College Division had referred to the tone of the income-tax notices. Manners were a matter of taste and opinion. He had known Ministers accused of ''slamming the door.'' The office of tax-collector was not a very happy one, and he could only say that he would either by example or precept endeavour to infuse a little more amenity into the manners and customs of the tax collectors in Scotland.

said the case to which the right hon. Member for the Rushcliffe Division called his attention was one where through absence from home the right hon. Gentleman had been treated by the tax collector as if he were a person who might decamp and disappear. He thought the difficulty might be met if the Chancellor of the Exchequer would arrange for a little more intercommunication between the collectors. If that could be done a great deal of friction would be saved. He found that wherever he was living for the moment he received a demand to make a return of his income. If he appeared in a district for the first time and had never made a return before, that would be natural, but year after year he was asked to return his income in every place where he might possibly reside. He asked the Chancellor of the Exchequer to consider whether some clearing-house system could be established which would enable the tax collectors to ascertain where a person who had a number of addresses paid the tax.

said he gathered from what had been said that the tax-collectors in Scotland were lacking in the suaviter in modo which all desired. As the Scottish taxpayer was particularly sensitive, he would suggest that the Scottish collectors should be removed to England and the English collectors sent to Scotland.

said he was glad that the Chancellor of the Exchequer had given an indication that the tax would be collected in the same way in Scotland as in England. On the understanding that the forms for both countries would be printed in precisely the same way and that the collection would be identical, he asked leave to withdraw the Amendment.

Motion and Clause, by leave, withdrawn.

moved a new clause to provide "that as from the first day of January, nineteen hundred and eight, the duties imposed by Section 2 of the Finance Act, 1901, and by the First Schedule to that Act, shall each be reduced by one-half in respect of British and British Colonial grown sugar." He pointed out that proposals for the total repeal and for the reduction of the tax by one-half had already been considered and rejected, and expressed the hope that the House would favourably consider the proposal he now made. The conditions with respect to the sugar trade had been altered during the last few months by the announcement that the Government would not renew the Brussels Convention in its present form. There was some doubt as to the exact form which the Government action would take. He did not propose on the present occasion to go into all the arguments which could be stated for and against that Convention. The purpose of it, as he understood, was to do away with sugar bounties and cartels, and to equalise the price of sugar in the countries which were parties to the Convention. According to experts, the withdrawal of this country from the Convention would mean the revival of bounties and cartels, and that was not objected to by those persons in this country who had been advocating a change in the Brussels Convention. His proposal had the advantage that it would not increase the cost to the consumer in this country, whether he was a manufacturer or a householder. He admitted that the influence on the price of sugar would be small, but such as it was, it would be to reduce the price to the consumer. There had been a considerable revival in the sugar industry in the West Indies, and it was expected that the industry would be extinguished by the revival of bounties. It was therefore only just and right that they should take some measures by which an important industry in a struggling Colony, and one capable of vast expansion in many other parts of the Empire, should not be stamped out. He admitted that his proposal was, on the face of it, one of Colonial preference. That presented no terrors to him or to a large number of persons in the country. Colonial preference was a policy which had received the support of vast sections of the people and one which many of them desired to see make headway. At any rate, it was a policy worth discussion in that House. They were taunted the previous night by a right hon. Gentleman sitting on the Treasury Bench that they had no concrete proposal to make. That complaint could not be made to-day, because this was a definite and concrete proposal to give Colonial preference in a very important article of consumption in this country. The sugar industry on the Continent of Europe had been developed by a system of giving preference to the home growth. He knew that preference was called protection; but protection might be necessary in cases of this kind. It had certainly been a great drawback to the agricultural and many other industries that no serious effort had been possible hitherto to produce sugar in this country for the home consumer. Under the Brussels Convention, which was now in danger by the announcement of the change of policy of the Government, certain persons, gentlemen of great experience in agriculture, had made experiments in the neighbourhood of Sleaford in Lincolnshire, with a view to starting the cultivation of beet sugar. Experiments made with many different classes of beetroot on different soils, differently treated with manure, showed that beet sugar could be economically grown in this country. The experiments were carefully checked by competent experts, and there was no doubt that an industry of great value to agriculture might be established. The gentlemen who had made the experiments were of all shades of political opinion, many of them being ardent supporters of the present Ministry, so that there was no suspicion that they were made with any Party object. These gentlemen were prepared to establish a factory and to invest a sum of money in the industry, but in the present circumstances they decided on 25th June that the whole experiments must be abandoned and that they could make no further progress unless the Government made some change in their policy. The experiments were made by agricultural associations on subscriptions by their members, and the money for the factory which was to be erected would have been subscribed by tenant farmers and others, not landowners, interested in the cultivation of the land. Contracts had been made to grow beet on 1,500 acres, nearly all of which were small holdings. Not one large landholder had entered into any contract to supply beet. It was a spontaneous movement made by enterprising agriculturists in a large district, and it was free from any speculative character. It was made entirely for the benefit of the land and the cultivation of the soil. The cultivation of beet sugar had enormous advantages. It was very profitable, the least estimated profit being, he believed, £3 per acre; it was a crop which could be advantageously grown continuously without deterioration to the soil; the manurial effect was of great value to the field; and it tended to employ an increased number of people. The House were considering two Bills, one for England and one for Scotland, under which a vast amount of time and a large sum of money were to be spent in the endeavour to keep the agricultural labourer on the soil. Here was an industry by which they could find employment for many on the soil, and prevent land going out of cultivation. It was no use establishing small holdings except on an economical basis, and the cultivation of beet sugar was especially suitable for small holders, who wanted an occupation in which they could profitably employ themselves and be certain of paying their way.

said he had listened very carefully to what the hon. Gentleman had said, but he could not connect his remarks with the clause he proposed.

thought he could explain. If the tax was maintained as at present, the home grown sugar industry could not be started.

called the attention of the hon. Member to the fact that there were no Customs, and so far as he knew, no Excise duties upon home grown sugar, and therefore he thought his remarks were out of order.

inquired whether it was not admissible for his hon. friend to leave out the words "British and" so that the new clause would be limited to Colonial grown sugar.

also suggested that if his hon. friend left out the words "of British and" his Amendment would be in order.

I did not say that the Amendment was not in order. I said the speech was not in order.

said he was sorry if he had been speaking out of order, but he thought he was urging a view which ought to be put before the House. He would endeavour to confine himself to points which were strictly in order with regard to his proposal to give some discrimination in favour of Colonial production and of home products. On the previous evening the Under-Secretary for the Colonies, when speaking quite guardedly, made a remark which was received with cheers and approbation from the other side of the House. While he declared against discrimination generally he said that discrimination involved a reduction of tariff or a differentiation between the sum which involved a sound and that which involved an unsound operation. That was exactly what he had given his attention to, and his Motion was one to reduce taxation and not to increase the duties on the sugar consumed by any person in this country whether he was a householder or a lodger. He thought he had shown that there were some grounds for encouraging the production of sugar in our Colonies and at home, while the action of the Government would lead to a curtailment of the experiment in regard to the product, which must lead to the ruin of the industry in the Colonies. He begged to move.

in seconding the new clause, said that the word "preference" seemed to act as a sort of bogey to hon. Gentlemen opposite, and the very mention of it seemed to frighten them out of their lives; but if only they got to closer quarters with is in operation they would get used to the idea and probably they would be willing to extend it to many articles other than that included in the proposed clause. The adoption of this proposal would afford an excellent opportunity of testing this on a small scale, and the experiment could do no possible harm to the people of this country, whilst it might do a great deal of good to some of our Colonies. It would be, for instance, of great advantage to our West Indian possessions, which had suffered so much from the untoward events which had recently taken place in Jamaica. As to home-grown sugar, there were, no doubt, great possibilities open to us in the way of producing beet for sugar in this country, and its production should be encouraged in every possible way. If, as seemed probable, the Government were about to withdraw from the Brussels Convention, it would mean that bounty-fed sugar would once more be allowed to be imported into our markets, and it would then be impossible for sugar to be produced in this country at a profit unless some preference in the way of duties such as that indicated in the new clause were given to the Home producer. At all events the acceptance of this clause would indicate a desire to encourage the people of the United Kingdom to embark upon this new form of industry, which if it were successful would afford employment to large numbers of labourers, especially in connection with small holdings.

New clause—

"As from the first day of January, nineteen hundred and eight, the duties imposed by Section two of the Finance Act, 1901, and by the First Schedule to that Act, shall each be reduced by one-half in respect of British and British Colonial grown sugar."—(Mr. Gretton.)

Brought up and read a first time.

Motion made, and Question proposed, ''That the clause be read a second time."

said it had been pointed out by Mr. Speaker that there were no customs or excise duties on this class of sugar, and therefore the question appeared to be irrelevant altogether, because it was not a subject upon which any discussion could possibly arise. On the other hand, he had no hostility to extending the cultivation of beetroot in this country with a view to the production of sugar. But whatever the merits of the case were we were absolutely bound by the treaties and obligations into which we had entered with other countries of the world. Up to the present moment the Sugar Convention had not been denounced, and it could not come to an end for any purpose till 31st December, 1908. In effect, over nine months must elapse before we could take steps which would involve any violation of our Treaty obligations, and to reduce the tax now would be against our obligations under the present Convention which had to remain in force for five years, and in regard to the termination of which six months notice had to be given. Therefore, until the expiry of the prescribed period he could not assent to the proposal before the House, as it would be a breach of the Convention.

quite agreed with the effect of the Convention as stated by the Chancellor of the Exchequer, and doubled whether his hon. friend had the details of it in his memory. He doubted whether he would have made any effort to raise the question except that it was the only way of bringing forward the treatment of Colonial and British-grown sugar. As regarded Colonial sugar they were prevented from giving it preferential treatment as long as the Convention remained in force in its present terms, unless the signatories were prepared to release us. No doubt the matter was one for consideration. His hon. friend recognised that the Government had taken action, but the action was imperfect. What his hon. friend desired was that we should at the earliest possible date set ourselves free from one of the terms of the Convention. We ought to set ourselves free also from the condition that we should not grant a preference to sugar produced by any of our Colonies. He was not concerned now as to whether the Government we e inclined to give preferences or not. The present Government would not give a preference if they could. But except for the special reasons given at the time this Convention was signed we should not admit in any treaty with foreign powers any clause or condition which bound us in regard to our relations with our Colonies. We ought not to bind ourselves to a certain course with our Colonies in any treaty we made with other Powers. When we revised the convention we ought to strike out the part of the protocol which limited our freedom in that respect, even if there was no intention of granting a preference. These was no excise on Colonial sugar, but the right hon. Gentleman the Chancellor of the Exchequer had said he would be bound to exact an excise if any sugar was produced in this country. It was in the knowledge of the House that in the matter of tobacco grown for experimental purposes in Ireland most special exceptions were made. It was thought likely there would be a lucrative crop if firmly established as in the same way sugar beet was regarded in this country, and in order to allow the experiment to be made effectively the Inland Revenue waived its prohibition against the growing of tobacco, and lowered the duty on all Irish-grown tobacco. Would the right hon. Gentleman do the same with regard to the growing of sugar beet?

was understood to say he was quite prepared to do that. At the present time sugar could be grown in this country with perfect safety for experimental purposes. If it were to be grown for commercial purposes he would have to impose an excise. In the case of tobacco in Ireland there was a statutory prohibition which had only lately been got rid of. He thought the Inland Revenue went very far, but the concession was subject to very stringent conditions. It was made for experimental and not for commercial purposes, and if sugar was to be grown in that way he would be prepared to extend the same facilities.

said that if this convention was denounced it would be found that the condition of the West Indian Colonies, which had embarked in a vast enterprise in the growing of sugar cane, and incurred considerable outlay, relying on the bona fide spirit of this country, would be worse than in the pre-convention days. It seemed to him an extraordinary thing that when there was a question of taking any fiscal step that incidentally would benefit the Colonies without hurting anybody the Government seemed paralysed by some fiscal atrophy. He appealed to the Chancellor of the Exchequer to consider the matter in a large-hearted way, and to give our West Indian Colonies some encouragement.

said the hon. Gentleman who moved this clause, and many of those who supported it, also supported him in the lobby when he moved to abolish the sugar duty. He thought on that occasion they supported him because they desired to see the duty abolished and not merely because they desired to attack the Government. He certainly could not reconcile the two attitudes. At the present time they were arguing in favour of a thing which if it were carried would make impossible that for which they voted the other day. If they got rid of the sugar duty it would be impossible to grant a preference to the Colonies, who would say, "You are depriving us of the preference which you promised us. You are robbing your own flesh and blood." He certainly hoped hon. Members opposite would pause and think a little before they supported this clause. Those who supported the Sugar Convention a few years ago would now find out the result of the revolver practice recommended by Lord Lansdowne. We had fired our revolver, with the result that we had made sugar dearer in this country, and were prevented giving a preference to our Colonies. Hon. Members had evidently forgotten that we had tried the system of preference years ago, and abandoned it in disgust. As recently as 1842 Colonial preferences in sugar were in full force, and in that year we were paying double as much for West Indian sugar as we could buy Brazilian sugar for in the markets of the world. Not only did we not obtain that expansion of the Colonial industries that was now desired by hon. and right hon. Gentlemen opposite, but the export from the West Indies actually fell in eleven years from 4,000,000 cwts. to 2,500,000 cwts. What happened was that the West Indians got so much for so little that they became lazy, and cultivation instead of being stimulated went down. At the same time our exports to the West Indies declined. It was calculated in 1840 that if our exports to the West Indies were given for nothing and this country had been allowed to buy her sugar in the markets of the world, £1,000,000 a year would have been saved to this country. The abandonment of the system of preferences naturally caused disappointment in the Colonies and would again do so. Soon after their abolition in 1846 a mass meeting was held in Montreal, now one of the most loyal of our Colonies, at which a resolution was passed for annexation with the United States as a punishment to the Mother Country for the fiscal action she had taken. The smaller the tax, the smaller, of course, the effect. He gathered that the argument was that by reducing the duty on Colonial sugar they would reduce the price on the whole volume of sugar supplied.

said that was not his contention. He did not consider that the reduction of the duties on Colonial and Home grown sugar would necessarily lower the price to the consumer in the first instance.

said there would, in that case, be no benefit to the consumers here, and all the arguments used by hon. Members opposite as to relieving the British consumer were irrelevant. He had rather understood the argument of the mover of the Amendment to be that there would be a general benefit, because if they reduced the tax on a portion of the sugar, to some extent they made a reduction in the price of the whole supply.

said that the whole object of Colonial preference was to stimulate trade between us and our Colonies.

said he was glad to understand that, but the attitude of hon. Members opposite had been completely changed within the last three or four days. It was now no longer the British consumer, but the Colonial producer they were pleading for. That was a very remarkable change of attitude, and he could only express the hope that hon. Members who wished to be true to their pledges in favour of the abolition of the sugar duty would vote against the Amendment.

said he wished to enter his caveat against it being assumed as absolutely established that the provisions of the Sugar Convention were a bar to this Amendment. It was quite true that Article 5 of the Convention said that we should charge the lowest rate of duty on the imports from the contracting parties, but that might very well be construed to mean our imports of sugar from foreign countries. That appeared to have been the meaning attached to Article 5 by the framers of the Convention, as would appear from article 11, because there was a curious provision in the protocol which preserved our relations towards imports on Colonial sugar. It was a somewhat obscure reservation embodied in the words giving entire liberty as regarded the fiscal relations between the United Kingdom and its Possessions. The reservation probably meant that so long as it was a question of the action of the Mother Country herself, she was bound by the words of the protocol; but that if and when the Colonies proceeded to move for definition of our fiscal relations with them, we should be considered free under the general, though somewhat obscure reservation in the protocol to which he had referred.

Motion and clause, by leave, withdrawn.

in moving a new clause to the effect that a landowner farming his own land might be assessed under Schedule D in lieu of Schedules A and B, said he submitted it with the object of raising a question which was referred to during the Committee stage of the Bill. The point of the clause was that a person who invested his money in land was just as much entitled to make his return under Schedule D as was the ordinary business man, and was entitled to be fairly assessed and to obtain relief under the Act just as much as the person who invested his money in business. The effect of the landowner who farmed his own land coming under Schedules A and B was that he really paid the income-tax twice over. He paid it under Schedule A, which represented his capital, regarding the land as capital, and he paid it again under Schedule B in regard to profits arising from farming his land. That, he submitted, was unfair to the person who invested his money in land, because the business man only paid on his net profits which were assessed under Schedule D. The Chancellor of the Exchequer would no doubt tell him that his Unionist predecessors had not seen fit to remedy this state of affairs, and no fresh circumstances had arisen which should cause him to do so; but in his opinion the present Budget had introduced additional features which aggravated the injustice, because, in the first place, it appeared to be pretty evident that the income-tax on unearned income was not likely to go below the rate of 1s. in the £ for a good many years to come; and secondly, by the differentiation between earned and unearned income the Chancellor of the Exchequer had caused people to think whether they were properly assessed, and whether they could not come under the words "earned income" like others. Under Schedule A the landlord was very unfairly assessed, and did not get the same allowances by any means as the person who invested his money in business. That point he had brought up on the Committee stage, and though the Chancellor of the Exchequer had not been very sympathetic to that argument? he had expressed his intention of looking into the matter. So he hoped that if he could not accept the clause to-day, before another Budget statement the right hon. Gentleman would go carefully into this point also in order to see whether the landowner who farmed his own land could not at any rate have the same treatment as the person who invested his money in any kind of business. Large landlords, for some reason or other apparently, were looked upon with disfavour by the Party opposite, but, if his proposal was accepted, people with an income of less than £2,000, who had invested their money in land which they farmed themselves, would benefit. He submitted that these people were worthy of this encouragement just as much as the man who invested his money in any kind of business. The man who farmed his own land spent as much time, money, and energy in that work as did the man in business. If he did not do so his farm would go to ruin and he would certainly lose his money, just as would any man who neglected any other kind of business in which he was engaged. He submitted that this was a case for the indulgence of the House, and that the class for whom he spoke ought at any rate to be put on an equal basis with other classes of people who earned their money in different kinds of businesses. He begged to move.

in seconding, said he did not see why the landowner farming his own land should not be put upon the same terms as any other business man. At the present time such landowner had to pay under Schedule A on a fixed assessment for landlord's profits, and also under Schedule B, where he farmed his own land, on the profits of farming that land. If he, were running a business, he would only have to account under Schedule D for the the actual profit he made. It therefore seemed to him that such landowners ought to be treated on the same lines as those engaged in business concerns. It was well known that in a great many of the light lands farming operations were not a success, and that landlords having at heart the interests of the community amongst which they lived kept these lands tilled even at a loss. It might be said that the landlord farming his own land unsuccessfully could make application for the return of the tax paid under Schedule A. But everybody knew that that was a very cumbersome and difficult operation, and a good deal more trouble than it was worth. Furthermore, if that course were taken in one year, it had to be all gone through the following year. It was much simpler that the people who wished to do the best they could for their land, who were ready to expend large sums in putting up buildings and in keeping the land in good fettle for the benefit of themselves, their neighbours, and the whole community, should come under the same arrangement as any other business man. In all cases where a landlord farmed his own land he ought to be allowed to make his assessment under Schedule D, and not be made to pay under Schedules A and B.

New clause:—

"A landowner farming his own land may be assessed for income-tax under Schedule D in lieu of under Schedules A and B."—(Mr. Hicks Beach.)

Brought up, and read a first time.

Motion made and Question proposed, "That the clause be read a second time."

said he had endeavoured to explain in Committee the grounds on which it was impossible to accept this clause. He could not admit that anything he had done this year had made this anomaly more urgent. He had already told the hon. Gentleman who moved the clause that he would very carefully consider the effect of the case he put forward, and if on investigation he satisfied himself that there was a real grievance that he could properly deal with, no prepossession on his part would stand in his way. He thought the hon. Gentleman was content with that assurance; at any rate, he hoped he would he satisfied with it now.

said he hoped his hon. friend would be content with that assurance. He did not understand when they had a short discussion on this subject on a previous occasion that the promise made by the right hon. Gentleman applied to this point as well. He thought there was a new reason for considering the matter. The Chancellor of the Exchequer had said that nothing he had done this year affected the question, but he wished to remind him that the change in the income-tax, by which a differentiation was made between earned and unearned income, did very materially affect the matter, and made the grievance of the landowner farming his own land a very real one. The right hon. Gentleman was going to say to such a landowner that so much as represented interest on capital was unearned, and only so much as represented the reward of his exertions was earned income and assessable at the lower rate. That was to deprive him of relief which was given to the man in an exactly similar position, who invested his money in business instead of in land. The right hon. Gentleman would see that the concessions he had made in the present Budget had introduced a new condition of things, and if there was no reason existing previously for relieving the landowner farming his own land, there was every reason for doing it now. They would be doing a great injustice unless they gave this class of landowners the same relief as they gave to the townsmen.

said he was not very hopeful of the result of the Chancellor of the Exchequer's consideration of this subject, because the right hon. Gentleman had said that in his opinion there was no grievance. When a landlord farmed his own land he had to put into it capital for live stock and implements, and that capital was not, assessed for income-tax unless it made a profit. All they asked was that the landowner farming his own land should be treated in exactly the same way as a man who carried on any other business. If, however, the Chancellor of the Exchequer was prepared to consider the point from the practical point of view, and to deal with it with justice and impartiality, he would ask his hon. friend not to press the clause.

said the distinction drawn between earned and unearned income was so fine that it was almost impossible to carry out this proposal. He understood that this question was going to be considered upon its merits, and he hoped the point would be cleared up. He did not at all agree with the hon. Baronet the Member for the City of London, when he said that labourers did not work for yeomen as they did for the tenant farmers.

said it seemed a double hardship that a landowner who was farming his own land should have to pay income-tax which he did not earn. A landowner with a farm to let very often took it into his own hands to get it into good condition, and employed more labour, while more often than not he lost money on it. He thought that it should be so arranged that if the landowner made a profit he should pay income-tax on it, but if he did not he should not be called on to pay anything.

said that, in view of the Answer given by the Chancellor of the Exchequer, he would ask leave to withdraw the Amendment.

Motion and clause, by leave, withdrawn.

in moving the following clause:—"It shall be lawful for any company registered with limited liability, in estimating the amount of profits chargeable to income-tax, to deduct from such profits the expenses incurred in any issue of debenture or other capital, which expenses have to be, in whole or in part, paid out of the profits of that year," said he wished to draw attention to a grievance which arose when discussions took place before the Commissioners of Inland Revenue as to what deductions should be allowed on these properties. The matter did not arise specially in connection with the present year's Budget, except in so far as it was a fact that there was a tendency more and more to turn business concerns into limited companies, the result being that the question came up more frequently now than before. There were hardly any companies which did not at some time or other make an issue of debentures. If a company was successful, it made an issue of, say, £100,000, and if it was not successful it was equally in need of money, and an issue of debentures was made. In practice the issue of £100,000 of debentures meant a cost of £3,000 or £4,000, but there was no asset representing that amount in the company's funds as shown by the balance sheet. From the other side of the account it appeared that only £96,000 had been received. The auditors naturally said that some provision must be made for the extinction of the £4,000 which represented the cost of issuing the debentures; they said that it must be extinguished over a period of two or three years, or paid off at once, out of profits. If the money was paid out of profits that year, the profits were reduced by that amount, but the Income-tax Commissioners would not allow a deduction in respect of it. That was a grievance which was felt by companies, and when the question came before directors they would scarcely believe that the Commissioners insisted on payment of the assessment on profits which their companies did not receive. The Chancellor of the Exchequer had stated more than once that it was the grievances which were felt in connection with the assessment of income-tax which were most detrimental to the collection. He understood that the right hon. Gentleman had said that he would consider the whole question as to what should be deducted before profits were arrived at. The case to which attention was now called was one of the most glaring.

in seconding the Amendment, said the expense of an issue of capital was a proper deduction to make in connection with the assessment of income-tax, and it ought to be allowed. Though he did not expect the Chancellor of the Exchequer to accept the clause at once, he hoped that this would be one of the items he would allow next year after a careful survey.

New clause—

"It shall be lawful for any company registered with limited liability, in estimating the amount of profits chargeable to income-tax, to deduct from such profits the expenses incurred in any issue of debenture or other capital, which expenses have to be, in whole or in part, paid out of the profits of that year."—(Mr. Fell.)

Brought up, and read a first time.

Motion made, and Question proposed, "That the clause be read a second time."

said the question was whether these charges arose in connection with the capital of the company or in connection with its annual profits. His right hon. friend was prepared to consider the question with others with a view to ascertaining whether there was any justification for the demand made. So far, however, as he had looked into it, he did not think there was any justification, because the expenditure referred to was a capital expenditure, and ought not to be deducted from profits. When they raised the subject of debentures they raised at the same time a large number of other matters in connection with which the question arose as to whether the cost ought or ought not to be allowed in assessing income-tax. The Government resisted the Amendment on the ground that this was only one portion of a large question, and that a debenture issue had no particular claim over other issues of the same character.

said it was quite clear that the money spent on raising capital was not an asset of the company. If a man in business unfortunately became bankrupt, he would be told by the Court that the amount of the cost for raising capital should have been deducted, and ought not to have been shown as profits. On the other hand, if the man remained solvent, he was told by the Income-tax Commissioners that the same amount represented profits, and that no deduction could be allowed in respect of it in the assessment for income-tax. If the man was landed in bankruptcy, he might be censured, or perhaps even sent to prison, for showing as profits what he was told he ought to have written off, while, on the other hand, the Income-tax Commissioners would not allow a deduction to be made for the sum because they held that it was profits. He, however, admitted the complication of the subject, and did not desire to secure from the Government anything more at present than an undertaking that they would look into the matter.

said that no one was more ready than he to admit the difficulties and complications which arose in connection with these matters. Our income-tax legislation had been framed on the plan of saying what deductions should not be allowed, instead of what deductions should be allowed. That he thought led to a great deal of obscurity, and probably to some amount of injustice. This matter was the subject of a legal decision in 1894. He deprecated, as his right hon. friend had said, dealing piecemeal with questions of this kind. It was germane to a number of other questions raised in the course of other debates in Committee, and as to which the real difficulty was in determining what they must do before they arrived at the taxable profit. He thought both hon. Gentlemen had put forward arguments which made the case one worth further consideration, and, if they would be content with his assurance, he would undertake to consider the matter in connection with other points already raised in Committee.

said that under the circumstances he would withdraw the clause. He might add that it was a matter of increasing importance, and he hoped it would have full consideration.

Motion and clause, by leave, withdrawn.

moved the following clause:— "Incomes of husband and wife shall be added together and divided by two for the purpose of ascertaining the exemption from or abatement of income-tax to which they are respectively entitled." He said that his purpose was to remove not only an admitted anomaly, but also a great injustice and hardship upon a class of people who could ill afford to pay the extra taxation imposed upon them. Before marrying both a man having £400 a year and a woman having £350 a year were entitled to abatements, but after marriage for some anomalous reason their incomes were treated as one, and they were not entitled to any abatement, because the total exceeded £700. There was a case of even greater hardship. A man in receipt of £150 and a woman in receipt of £150 a year, so long as they remained single, were exempt from income-tax, but directly they married they became liable to pay income-tax upon the excess of £160 per annum of their joint incomes. That was a great hardship and gross injustice to people who could ill afford to pay extra taxation. A single man with £150 a year and a single woman with £140 a year were well off compared with a married couple with their joint incomes. The Chancellor of the Exchequer had always refused the Amendment on the ground that previous Chancellors of the Exchequer had taken the same line, and he had said that the expense would be very considerable, though it was difficult to say what it would actually be. He (Mr. Rawlinson) submitted that that was not a satisfactory argument. It was not absolutely clear that the amount of loss to the Exchequer would be very large. Even if it were as much as had been suggested, he submitted that it was essentially a case where relief of taxation ought to be given. Surely, so far as married couples with limited incomes were concerned, it was a case for relief instead of imposition of taxation. The state of the law as regarded the income of husband and wife had been gradually altering for some forty years, and, whereas forty years ago the incomes of husband and wife were looked upon as one, now under the Married Women's Property Act, they were separated for most purposes. They had, therefore, this anomaly. The Chancellor of the Exchequer took advantage in the death duties that the incomes of husband and wife were not one for all purposes, but for the purposes of the income-tax they were treated as one. He moved the new clause for the purpose not only of removing an anomaly, but also of relieving what he suggested was a great hardship on married couples with limited incomes, both in regard to the question of abatement on higher incomes and total exemption in the case of lesser incomes.

seconded. It seemed to him that there were no arguments by which the statement of his hon. friend could be met. The only argument which he was evidently afraid would be adduced was that a man and wife were one. He ventured to say that in this case they were not one. In view of the alterations in the law made by the Married Women's Property Act, he thought everyone would agree that if a man with £150 a year married a woman with £140 a year, he would soon find out that they were not one if he tried to take away his wife's income. For the past forty years they had tried to preserve to the woman the right in her own property, and, having done that, they must go a step further, and say there was no reason why she should be prevented from gaining the benefit of exemption from income-tax because she had married a man whose income, added to hers, brought the amount over £160. His hon. and learned friend had said truly that the expenses of a married couple were necessarily larger than the expenses of a single man and a single woman. That was unanswerable, and it therefore seemed that they were seeking out people who were desirable of entering into what was always considered an honourable state, and endeavouring to put every possible difficulty in their way of doing so. He thought it would be very hard if the legislation acted as a deterrent to marriage. It was, however, on the ground of the injustice of the present law more than anything else that he appealed to the Chancellor of the Exchequer. It was most absurd that persons should suddenly lose their exemption because they had got married and their expenses had increased. Under those circumstances he really thought the only argument brought forward against the proposal of his hon. and learned friend was that the Chancellor of the Exchequer might lose a little money. He sympathised with him in that position, and he quite recognised the difficulty of providing the large sum required for the administration of the country, but they must have some regard to justice, and even sacrifice a little money in order to see that no injustice was done to deserving people. They might in this matter have the support of the hon. Members below the gangway, because it could not affect the people so much who had incomes over £700, and they were not laying themselves open to the charge that they were acting in favour of trusts and monopolies. He hoped his hon. friend would go to a division.

New clause—

"Incomes of husband and wife shall be added together and divided by two for the purpose of ascertaining the exemption from or abatement of income-tax to which they are respectively entitled."—(Mr. Rawlinson.)

Brought up and read a first time.

Motion made, and Question proposed, "That the clause be read a second time."

said that this was a very familiar topic and occurred annually with the same regularity as the Budget itself. He doubted whether the existing law was as serious a deterrent to marriage as the hon. Baronet imagined. He had never come across a couple, young or old, who, animated by a sincere and ardent affection for one another, had been prevented from joining their lots together in life by the fact that their incomes would be aggregated for the purpose of the income-tax. Of all the forms in which this particular Amendment had been presented, that adopted by the hon. and learned Member struck him as being the most peculiar. Under it a husband's income of £999 and a wife's income of £1 would be treated as two incomes of £500, each of which would become entitled to abatement. The proposition was incapable of being defended, and he could hold out no hope of being able to make a concession on the point. All the cases of real hardship were met under the Finance Act of 1897, under which, where the total income did not exceed £500 and was made up partly from profits of business carried on by the wife and partly from business carried on by the husband, the two things were separately assessed. As to the practical consequences to the Exchequer, all the best authorities agreed that the loss would be very considerable indeed, and no Chancellor of the Exchequer had ever felt himself justified in agreeing to it.

said that possibly there might be good reason for considering whether or not the limit of £500 as it existed at present should be extended so as to cover a total of £700. He did not, however, wish to press the point now, but he hoped the matter would be considered in later years.

Motion and clause, by leave, withdrawn.

moved a new-clause to the effect that incomes which had already paid income-tax in the Colonies should not be liable to be assessed for income-tax in Great Britain. The hon. Member said this proposal had also been brought before the Chancellor of the Exchequer before and argued that it was unjust that an income which had already paid income-tax in the Colonies should also have to pay it here. He would take the case of a man who received an income from South Africa, in which place he had to pay an income-tax. Under the present system he would have to pay income-tax here also; that was to say, he would have to pay it twice over. It was that anomaly that he proposed to remove by the Amendment. Last year the Chancellor of the Exchequer stated that it was a question of expense and the Exchequer could not give up this amount of money. In his judgment, however, the present situation was an unfair one. He begged to move.

seconded the proposed new clause. Last year he alluded, in connection with this question, to the case of an officer who was at home on furlough and who might be called upon to pay the income-tax—once, say, in India and once in this country. He thought that was a case of hardship which should be met and the new clause of his hon. friend would meet it.

New clause—

"Incomes which have already paid income-tax in the Colonies shall not be liable to be assessed for income-tax in Great Britain."— (Mr. Rawlinson.)

Brought up and read the first time.

Motion made, and Question proposed, "That the clause be read a second time."

was not able to accept the proposed clause. Since this matter was discussed last year he had had the opportunity of going into the question very thoroughly at the Colonial Conference, in the presence of the Colonial Premiers, including Mr. Deakin and Dr. Jameson, and he was rather disposed to flatter himself that he succeeded in persuading them that it was quite impossible for His Majesty's Government to make any change in the income-tax law in this direction. He did not think the case of the officer came within this provision. He did not know of any such occasion, but if the hon. Gentleman would call his attention to anything of the kind he would consider the matter. The real question had arisen in regard to the De Beers and other South African companies which paid income-tax in Cape Colony and had also been held liable by the House of Lords to pay income-tax in this country, because they had their registered offices here. He could not agree that any grievance existed as regards individuals. If a man, for reasons of his own, resided in this country and enjoyed the protection of our laws, it was only fair that in consideration of that voluntary act on his part, and the Government protection extended to him, he should contribute income-tax on the whole of his income, where so ever that income arose. That was the root principle which went to the basis of the whole matter and he could not recede from it.

said, in supporting the Amendment, that anybody in this country who bought rupee paper had the English income-tax deducted by the person who cashed it, and he also had to pay the Indian income-tax. As he had to pay the charge here, he could not understand why he should also have to pay it in India.

also supported the Amendment, and said the question was worthy of consideration in regard to both individuals and companies. He knew of one case where the whole of the trade of the company was done in a colony and all the shareholders except 10 per cent. resided there, and yet because the company had a registered office here, while its property was in Natal, they had to pay income-tax here. Therefore it seemed to be against the interests of the company to be registered here and to have an office where only office and secretarial work and the work of distribution was carried on. The question was quite as important to a company as to an individual.

said it was only where a company found it worth while to keep its head centre here in England that it became liable to pay income-tax out of the whole of its profits; when a company was substantially controlled and directed in a colony or foreign country income-tax was only payable on that part of the profits which was remitted.

said he agreed with the Chancellor of the Exchequer in regard to this matter. If a company carried on business abroad and had an establishment here he thought there was no hardship in its having to pay income-tax.

said he agreed with his hon. friend who had just spoken, and hoped that his hon. and learned friend who had moved the new clause would not press it to a division. The contribution which a company made for income-tax in this country and in the Colonies, although it was no doubt collected on the same income, was paid in respect of two services, because the company had interests in two places. Where a company contributed to the expenditure of a Colony in regard to a business carried on there that was no reason why they should not pay income-tax in this country for a different service.

drew attention to the fact pointed out by Sir Joseph Ward at the recent Conference that travellers to New Zealand who were domiciled here and resided in New Zealand for a sufficient time to become assessable there in regard to income-tax invariably protested on the ground that income-tax had already been paid in England. He suggested that there should be some reciprocal arrangement between the Mother-country and the Colonies in the matter. It was very hard that such persons should pay income-tax twice over. The question of charging companies income-tax also raised a most important point. He believed that if companies were assessed for income-tax the revenue would suffer. The De Beers' Company, for instance, would have to pay both here and at Cape Colony on all their profits, and he saw from a statement in the papers that they proposed to remove their London office to New York in order to avoid that. They would never get a company to pay income-tax twice over in two countries on the same income, and the result, if it was attempted, would be that other companies like De Beers would close their London offices.

said the law at present seemed rather anomalous. As he understood, a company which, had its head office in the country where it carried on its business and an office in this country had to pay income-tax in both countries. But he could imagine a company for the purpose of evading the income-tax using an office in a colony and doing all its business in this country through an agency. The agency would then pay all the profits over to the office in the Colony, which would divide them among the shareholders, who would then pay no income-tax at all. He did not know whether this question arose out of the new clause, but he thought the Chancellor of the Exchequer should endeavour to insist upon foreign and Colonial companies paying the same income-tax as was imposed on the English companies with which they competed.

Question put, and negatived.

moved the following clause:—"All death or succession duties payable in respect of land shall be payable, wholly or in part, in land which shall be valued at the assessment at which it was assessed for the purposes of such duties before any deductions whatsoever were made from such assessment." He said that the proposal was introduced in a more elaborate form by the right hon. Member for Wimbledon in 1894, and the lack of argument against the proposal adduced by Sir William Harcourt on that occasion was somewhat remarkable. Unless the present Chancellor of the Exchequer had some more pertinent argument to bring against it, he should, he thought, be justified in pressing the clause to a division. It was not a good argument to compare the death duty to a debt to one's butcher or baker. The death duty on landed estates should be dealt with as a definite charge on the land, and not as a personal charge on the individual who happened to inherit the land. At the present time it was very difficult to raise money on agricultural land, and an individual with no large means of his own who inherited a landed estate would undoubtedly experience great difficulty in raising sufficient to meet the death and succession duties, and the result might be a forced sale of the most disastrous character. He thought the Government might meet this state of things by allowing a portion of the laud to be handed over to them at the amount at which it was assessed for death duties. Such a thing would be. particularly desirable at the present time, when they were complaining of the difficulty of obtaining land for small holdings. He would suggest to hon. Members who were in favour of the nationalisation of the land that it would be a good opportunity for them, because the proposal would tend inevitably to decrease the size and increase the number of holdings on estates, which would enable land to be more easily bought and sold. It would certainly place a great deal of extra land at the disposal of His Majesty's Government for allotments and small holdings or other purposes. It was objected that his clause contained no elaborate provision for assessing the value of the land. He thought it did. The mere fact of its assessment to the death duties was security in the long run both to the Crown and the individual, and he thought it would be very rare that any injustice would be done to either. He hoped the Chancellor of the Exchequer would be able to give this proposal more favourable consideration than was given to it by his predecessor in 1894, and if he was not able to entertain it from the Government's point of view, that he would adduce more serious arguments against it than had already been offered.

in seconding the new clause, said he thought it an excellent one, though it ought to have a provision which would leave it open to the executors to pay either in money or in land. When the clause had been read a second time, however, an Amendment could be submitted to that effect, and he hoped his hon. friend would accept it. He thought this proposal ought to appeal to hon. Members below the gangway opposite. One hon. Member opposite had said that there was nothing more unfair than the manner in which land was assessed for the death duties—that the land was taken on exceptionally favourable terms, and that the valuation put upon it was very much below what it ought to be. He did not agree with him; but if it were so it was a very strong reason for his supporting the Amendment, because, the State would obtain payment not only quickly and without trouble, but in a way which would render that payment, when it was received, very much more valuable to the State than if it were made in a lump sum down, the land would be very much more valuable than the nominal amount at which it was assessed. That seemed to him an unanswerable reason why hon. Gentlemen below the gangway opposite should support the clause. On the whole the valuation of the land was taken very fairly; if it erred, it was in the contrary direction— that was to say, that the valuation was higher than the real value of the land, and that made it difficult for people to sell their land in a hurry. For instance, a property might be worth £20,000, or £30,000 or £50.000; but they could not realise that at once; it might be two or three years before they could find a purchaser. Unless this clause was passed, the unfortunate heir would have to borrow money in order to provide for the death duties. It would be difficult to borrow money on a landed estate if they were to have much more of the legislation which was desired by hon. Gentlemen opposite. The Chancellor of the Exchequer had made reassuring statements in the City, hut he did not think the right hon. Gentleman's followers had done enough to justify those statements, because they were still pursuing their predatory legislation in the Grand Committees. He thought, in view of this, that it was very necessary that some facilities such as wore foreshadowed in the new clause should be granted to those people who were unfortunate enough to succeed to property in land. Supposing the land was over-valued, the State would benefit; if, on the other hand, the land was properly valued, then nobody would be hurt; and, if the land was under-valued, owing to the legislation of hon. Gentlemen opposite, then they would suffer, and. he would say, ''Serve them right." The Chancellor of the Exchequer, he understood, was getting better terms under the existing system than he would obtain if the clause was carried. It might be that the State was making rather more than it ought out of the valuations as at present conducted; but if that were so, he was sure that the Chancellor of the Exchequer did not want to take advantage of the unfortunate person who succeeded to a property which he found it difficult to realise, and on which he already had to pay a heavy duty. The right hon. Gentleman would not desire to mulct him to a greater degree than was contemplated by the law when it was first established, and therefore the scrupulous way was to take over the land itself at the valuation given. He would suggest to his hon. friend that there should be the option to pay either in cash or in land, for there were a good many people desirous of retaining properties because they were ancestral or in desirable positions, or for other reasons, and he was sure his hon. friend would not desire to prevent their doing that. On the understanding that such an Amendment would be accepted, he seconded the clause.

New clause—

"All death or succession duties payable in respect of land shall be payable, wholly or in part, in land which shall be valued at the assessment at which it was assessed for the purposes of such duties before any deductions whatsoever were made from such assessment." —(Mr. Courthope.)

Brought up and read a first time.

Motion made, and Question proposed, "That this clause be read a second time."

said the subject of this clause was last brought forward in 1894, when it seemed to have been lightly brushed aside by the late Sir William Harcourt, and he did not recollect its having again appeared since. It was quite impossible for him to accept the clause in any shape or form. It was absolutely without precedent, so far as he was aware, in the whole of our legislation, that a man should pay his taxes in kind. And not only that, but the clause now proposed was compulsory in its terms. It said that the duties "shall" be payable in land; it was an absolutely mandatory clause; it did not even give the wretched executor a chance of paying in money. They were not in the habit of receiving taxes in kind, either in land or in any other form. As the proposal would work out, the tax-payers could go about their estates, and pick out a little bit of land here, or a bit there, to be handed over to whom? He did not know. Who was it to be vested in, the Crown, the Prime Minister, or the Chancellor of the Exchequer? They were entirely in the dark. It was to be handed over to some person who represented the State, and a nice job that person would have. He would have cast upon his hands isolated bits of land, of which he would have to make the best he could in the interests of the country. It was really not a proposition on which he ought to detain the House, but he could assure them that every payment of death duties on land would be equitable, fair, and easy. He could not possibly accept the clause.

said he was the last person to deny that the clause could not be accepted in this particular form, but they were only on the Second Reading of it, and not on the details, and the right hon. Gentleman had referred rather more to the general principle, than to the details of his hon. friend's proposal. He was not going into the general question. The ease for a clause of this kind had strengthened since 1894. There had been legislation in favour of increasing the number of small holdings, schemes for the compulsory acquisition of land, and the old views had been widely departed from. According to the modern ideas held by many Members, the value of land was perpetually to increase under the force of social laws, and the benefits that thereby accrued to the landowner should belong to the community generally. Land, unlike any other property, was peculiarly susceptible to State ownership, according to the opinion of many of the Government supporters, and he could not understand why the Government should not seize the opportunity for increasing State ownership of land. He quite agreed it might be inexpedient to compel a Government to take the tax in this form, and would recommend the leaving open of a voluntary arrangement. Peculiar difficulties stood in the way of those who had to pay death duties, and he did not know how the Inland Revenue would deal with property which had been reduced in value by various legislative projects, but surely it would be well to allow this silent voluntary method of transfer agreeable to owners. Those were some of the grounds which did not exist to the same degree when this subject was discussed in 1894, and he ventured to say that they constituted a real reason why the clause should be read a second time, so that the details of it might be dealt with later. He did not associate himself with the particular terms of the clause, but if it was pressed to a division he should certainly support it on the distinct grounds not that this special proposal was one which the House ought to accept, but because it was one which deserved a Second Reading, taking into account all the new conditions which, according to the majority now ruling, ought to govern the relations between this House and landed property.

drew a distinction between the words in the clause "shall be payable" and a mandatory declaration "shall be paid."

, in supporting the Amendment, said it gained force in view of what was going on in the Scottish Grand Committee. It was clear to all that great difficulties would in the future confront the landowner, who had to sell land for the purpose of paying duty in many cases. He would have to accept a diminished price, and in many cases would have difficulty in attracting any price at all. Moreover, he could not sell his feu duties as the danger and risk of a future taxation of feu duties rendered that difficulty greater. It was true that the Prime Minister had said that it was no part of the policy of the Government to rate feu duties for local purposes, but he had never said that ho did not propose to tax them for Imperial purposes.

pointed out that the difficulty in the way of carrying out schemes for creating small holdings or providing houses was that of borrowing money for the purpose, and the acceptance of this proposal or some modification of it might prove most useful to an embarrassed Exchequer. The fundamental difficulty was that of getting anybody to lend money on such terms as would enable small holdings to be established at a profit. He thought if the Government could see their way to accept this emendation of their proposal they would do a great deal to relieve that difficulty. When a landowner had to borrow money on his estate to pay the death duties he came into the money market and had to compete against the Government. Consequently, by accepting this proposal the Government would be killing two birds with one stone.

said that -much as they desired to obtain land the Labour Members felt they had no wish to have small patches hero and there in estates all over the country. He did not pretend to discuss the


Acland-Hood,RtHn.Sir Alex.F.Douglas, Rt. Hon. A. Akers-Randles, Sir John Scurrah
Anson. Sir William ReynellDuncan,Robert (Lanark,GovanRawlinson,John Frederick Pee
Arkwright, John StanhopeFaber, George Denison (York)Roberts-.S. (Sheffield, Ecclesall)
Ashley, W. W.Fell. ArthurRutherford, John (Lancashire)
Aubrey-Fletcher,Rt.Hon.SirH.Forster, Henry WilliamRutherford, W. W. (Liverpool)
Baldwin, AlfredGretton. JohnSalter, Arthur Clavell
Balfour,RtHn.A.J.(City Lond.)Harrison-Broadley, H. B.Sassoon, Sir Edward Albert
Banne, John S. Harmood-Hay, Hon. Claude GeorgeStarkey, John R.
Barrie, H. T. (Londonderry,N.)Helmsley, ViscountStone, Sir Benjamin
Beach,Hn. Michael Hugh HicksHervey,F. W. F. (BuryS. Edm'dsTalbot, Lord E. (Chichester)
Beckett. Hon. GervaseHill, Sir Clement (Shrewsbury)Thomson,W.Mitchell- (Lanark)
Bignold, Sir ArthurHills, J. W.Thornton, Percy M.
Burdett-Coutts, W.Hunt, RowlandValentia, Viscount
Butcher, Samuel HenryKennaway,Rt.Hon.Sir JohnH.Walker, Col. W.H. (Lancashire)
Campbell, Rt. Hon. J. H. M.Law, Andrew Bonar (Dulwich)Williams, Col. R, (Dorset, W.)
Castlereagh, ViscountLockwood,Rt.Hn. Lt.-Col.A.R.Wilson, A. Stanley(York,E.R.)
Cavendish,Rt. Hon. Victor C.W.Long,Rt.Hn.Walter Dublin,S.)Wortley, Rt, Hon. C.B.Stuart
Cecil, Evelyn (Aston Manor)Lowe, Sir Francis WilliamWyndham, Rt. Hon. George
Cecil, Lord R, (Marylebone, E.)MacIver, David (Liverpool)Younger, George
Coates, E. Feetham (LewishamMeysey-Thompson, E. C.
Collings,Rt.Hn.J.(BirminghamMorpeth, ViscountTELLER FOR THE AYES—
Corbett. T. L. (Down, North)O'Neill, Hon. Robert TorrensMr. Courthope and Sir
Craig, Charles Curtis(Antrim, S.Powell, Sir Francis SharpFrederick Banbury.


Abraham, William (Rhondda)Benn,W.(T'w'r Hamlets,S.Geo.Byles, William Pollard
Acland, Francis DykeBerridge, T. H. D.Cameron, Robert
Agnew, George WilliamBethell,SirJ.H.(Essex,RomfordCarr-Gomm, H. W.
Ainsworth, John StirlingBirrell, Rt. Hon. AugustineCauston,Rt. Hn. RichardKnight
Alden, PercyBlack, Arthur W.Cawley, Sir Frederick
Allen, Ovules P. (Stroud)Boulton, A. C. F.Charming, Sir Francis Allston
Ashton, Thomas GairBrace, WilliamCheetham, John Frederick
Asquith,Rt.HonHerbert HenryBramsdon, T. A.Cherry, Rt. Hon. R. R.
Astbury, John MeirBrigg, JohnChurchill, Rt. Hon. Winston S.
Atherley-Jones, L.Bright. J. A.Cleland, J. W.
Baker, Sir John (Portsmouth)Brocklehurst, W. B.Clough, William
Balfour, Robert (Lanark)Brodie, H. C.Cobbold, Felix Thornley
Baring,Godfrey (Isle of Wight)Brooke, StopfordCollins, Stephen (Lambeth)
Barlow,Sir John E. (Somerset)Brunner,J.F.L.(Lancs., Leigh)Collins.Sir Wm.J.(S. Pancras W.
Barlow, Percy (Bedford)Bryce, J. AnnanCorbett, A. Cameron (Glasgow)
Barran, Rowland HirstBuchanan, Thomas RyburnCorbett,C H.(Sussex,E.Grinst'd
Barry, Redmond J. (Tyrone,N.Buckmaster, Stanley O.Cornwall, Sir Edwin A.
Beauchamp, E.Burns, Rt. Hon. JohnCory, Clifford John
Bell, RichardBurt, Rt Hon. Thomas Cotton, Sir H. J. S.
Bellairs, Carlyon Buxton,Rt.Hon.SydneyCharlesCox, Harold

difficulties of those who succeeded to big estates, but whatever those difficulties might be it was ridiculous to suggest that the Chancellor should take the duties in kind. Whether it was seriously meant he did not know. Probably it was not. They might as well propose that the Chancellor of the Exchequer should on the death of a whisky distiller go to the distillery and take the duties out in whisky. Certainly hon. Members below the gangway would not vote for this clause.

Question put.

The House divided:— Ayes. (55: Noes, 275. (Division List No. 284.)

Craig,Herbert J. (Tynemouth)Jones,William(Carnarvonshire)Ridsdale, E. A.
Crean, EugeneJowett, F. W.Roberts, G. H. (Norwich)
Cremer, Sir William RandalKearley, Hudson E.Roberts, John H. (Denbighs.)
Crombie, John WilliamKekewich, Sir GeorgeRobertson, J. M. (Tyneside)
Crooks, WilliamKilbride, DenisRobinson, S.
Crosfield, A. H.King, Alfred John (Knutsford)Robson, Sir William Snowdon
Crossley, William J.Laidlaw, RobertRoche, Augustine (Cork)
Curran, Peter FrancisLamb. EdmundG.(Leominster)Roche, John (Galway, East)
Davies, David(Montgomery Co.Lambert, GeorgeRoe, Sir Thomas
Davies, Ellis William (Eifion)Lamont, NormanRogers, F. E. Newman
Davies, Timothy (Fulham)Lardner, James Carrige RusheRose, Charles Day
Davies, W. Howell (Bristol, S.)Lehmann, R. C.Rowlands, J.
Dewar, Arthur (Edinburgh, S.)Lever, A.Levy(Essex,Harwich)Runciman, Walter
Dickinson,W.H.(St.Pancras,N.Levy, Sir MauriceSamuel, S. M. (Whitechapel)
Dilke, Rt. Hon. Sir CharlesLewis, John HerbertSchwann, C. Duncan (Hyde)
Duffy, William J.Lloyd-George Rt. Hon. DavidSchwann, Sir C.E.(Manchester)
Duncan, C. (Barrow-in-FurnessLough, ThomasSeddon, J.
Dunn, A. Edward (Camborne)Lundon, W.Shackleton, David James
Dunne,Major E.Martin(WalsallLuttrell, Hugh FownesSimon, John Allsebrook
Edwards, Enoch (Hanley)Lyell, Charles HenrySmeaton, Donald Mackenzie
Edwards, Sir Francis (Radnor)Macdonald, J. R. (Leicester)Snowden, P.
Elibank, Master ofMacdonald,J.M. (Falkirk B'ghsSoares, Ernest J.
Ellis, Rt, Hon. John EdwardMaclean, DonaldSpicer, Sir Albert
Everett, R. LaceyMacnamara, Dr. Thomas J.Stanley,Hn.A. Lyulph (Chesh.)
Faber, G. H. (Boston)Macpherson, J. T.Steadman, W. C.
Fenwick, CharlesMacVeagh, Jeremiah (Down,S.)Stewart, Halley (Greenock)
Ferens, T. R.MacVeigh,Charles (Donegal,E.)Stewart-Smith, D. (Kenda')
Fiennes, Hon. EustaceM'Callum, John M.Strachey, Sir Edward
Fuller, John Michael F.M'Crae, GeorgeStrauss, E. A. (Abingdon)
Fullerton, HughM'Hugh, Patrick A.Stuart, James (Sunderland)
Gill, A. H.M'Kenna, Rt. Hon. ReginaldSummerbell, T.
Gladstone,Rt.Hn.Herbert JohnM'Laren, H. D. (Stafford, W.)Taylor, John W. (Durham)
Glendinning, R. G.M'Micking, Major G.Taylor, Theodore C. (Radcliffe)
Glover, ThomasMallet. Charles E.Tennant,Sir Edward(Salisbury)
Goddard. Daniel FordMansfield, H. Rendall (Lincoln)Tennant, H. J. (Berwickshire)
Gooch, George Peabody Markham, Arthur BasilThompson,J.W.H.(Somerset,E.
Grant, CorrieMarks, G. Croydon (Launceston)Torrance, Sir A. M.
Grey, Rt, Hon. Sir EdwardMarnham. F. J.Toulmin, George
Gulland, John W.Massie, J.Vivian, Henry
Gurdon,RtHn.Sir W.BramptonMeagher, MichaelWalker, H. De R. (Leicester)
Hall, FrederickMenzies, WalterWalters, John Tudor
Halpin, J.Micklem, NathanielWalton,Sir John L. (Leeds, S.)
Harcourt, Rt. Hon. LewisMond, A.Wardle, George J.
Hardy, George A. (Suffolk)Montagu, E. S.Warner, Thomas Courtenay T.
Harmsworth. Cecil B. (Worc'r)Montgomery, H. G.Wason,Rt.Hn.E.(Clackmannan
Hart-Davies, T.Morley, Rt. Hon. JohnWason, John Cathcart(Orkney)
Harvey,W.E. (Derbyshire,N.E.Morrell, PhilipWaterlow, D. S.
Harwood, GeorgeMorse, L. L.Watt, Henry A.
Haslam, Lewis (Monmouth)Morton, Alpheus CleophasWhitbread, Howard
Haworth, Arthur A.Myer, HoratioWhite, George (Norfolk)
Hazel, D. A. E.Napier, T. B.White. J. D. (Dumbartonshire)
Hazleton, RichardNewnes, F. (Notts, Bassetlaw)White, Luke (York, E.R.)
Hedges, A. PagetNicholson,Charles N.(Doncast'rWhite, Patrick (Meath, North)
Helme, Norval WatsonNorton, Capt. Cecil WilliamWhitehead, Rowland
Henderson, Arthur (Durham)O'Grady, J.Whitley, John Henry (Halifax)
Henderson,J.M. (Aberdeen,W.)O'Shaughnessy, P. J.Whittaker, Sir Thomas Palmer
Higham, John SharpParkes, EbenezerWiles, Thomas
Hobart, Sir RobertPartington, OswaldWilkie, Alexander
Hobhouse, Charles E. H.Paulton, James MellorWilliams, J. (Glamorgan)
Hodge, JohnPearce, Robert (Staffs Leek)Wills, Arthur Walters
Hogan, MichaelPearson, W.H.M.(Suffolk, Eye)Wilson, Henry J. (York, W.R.)
Holden, E. HopkinsonPhilipps, Owen C. (Pembroke)Wilson, John (Durham, Mid)
Holland, Sir William HenryPirie, Duncan V.Wilson, J. H. (Middlesbrough)
Hope, John Deans (Fife, West)Price, C.E.(Edinburgh,Central)Wilson, P. W. (St. Pancras, S.)
Hope,W. Bateman(Somerset,N.Price,Robert John (Norfolk,E.)Wilson, W. T. (Westhoughton)
Hudson, WalterPriestley,W.E. B. (Bradford,E.)Winfrey, R.
Hyde, ClarendonRadford, G. H.Wood, T. M'Kinnon
Jackson, R. S.Rainy, A. RollandYoung, Samuel
Jardine, Sir J.Raphael, Herbert H.Yoxall, James Henry
Jenkins, J.Rea, Russell (Gloucester)
Johnson, John (Gateshead)Rea, Walter Russell (Scarboro'TELLERS FOR THE NOES—
Johnson, W. (Nuneaton)Richards,T.F.(WolverhamptonMr. Whiteley and Mr. J. A.
Jones, Leif (Appreby)Richardson, A.Pease.

moved an addition to Clause 8 in order to carry out a promise which he gave when the Bill was in Committee.

Amendment proposed—

"In page 3, line 28, at the end, to insert the words" (3) Section eleven of The Finance Act, 1899 (which relates to policies of insurance in respect of injury to workmen), shall be read as if two pounds were substituted for one pound as the amount of the annual premium therein mentioned.—(Mr. Asquith.)

Question, "That those words be there inserted,"—put, and agreed to.

Amendment proposed—

"In page 3, to leave out Clause 9."—(Mr. Asquith.)

Question, "That Clause 9 stand part of the Bill," Question put, and negatived.

The following Amendments were proposed by Mr. Asquith and agreed to—

"In page 3, line 39, to leave out the word 'passing,' and to insert the word 'commencement.' "
"In page 4. line 18, after the word 'the,' to insert the word; loan.' "
"In page 4, line 24, after the word 'existing,' to insert the word 'loan.' "
"In page 6, line 3, at the end, to insert the words 'Provided that if as respects any such deduction the person by whom the duty is payable requires the Commissioners, on the first delivery of his account, to calculate the deduction as if this section had not passed, the deduction shall be so calculated.' "
"In page 8, line 33, after the word 'claim,' to insert the words 'for relief under this section.' "—(Mr. Asquith.)

moved the insertion of words in Clause 20 for the purpose of giving effect to promises made in Committee with respect to the relief to be granted to persons in receipt of pensions. The joint effect of the Amendments was to include "compensation for loss of office" in the expression "earned income," and to bring in under the same expression pensions enjoyed by widows and children.

Amendment proposed —

"In Clause 20, page 9, line 11, at beginning, to insert the words 'any income arising in respect of.' "—(Mr. Asquith)

Question proposed, "That those words be there inserted."

said that as he understood the question, the Chancellor of the Exchequer had promised that all pensions, whether any contribution was made towards them by annual deduction or not, should be considered as earned incomes. That promise ho had carried out by the proposed Amendments, and he (Mr. Morton) desired to thank him for the way in which he had met them.

said he was afraid the clause as now amended by the right hon. Gentleman did not cover the case of a pension to a family towards which a deceased husband or parent had contributed. He had an Amendment in manuscript, to insert after the second word "profit" the following: "Where the individual or the—

The hon. Member should wait until he reaches that point of the Amendments to be proposed and then raise his Amendment.

said that he also had an Amendment which arose on that same question, viz., the case where a person had been in the employment, say, of a railway company and got from that company a pension towards which he himself had contributed.

If the hon. Member will wait till that Amendment is reached he will then have an opportunity of discussing it.

on a point of order, asked if it would not be more convenient for the House to take something like a general discussion of the subsection as the Chancellor of the Exchequer proposed to amend it. It was very difficult to follow the exact effect of the insertion of each of these Amendments as they went along, and might very easily be that they would pass the point at which the amending words ought to be introduced.

said he thought it was better to wait until they reached a further stage of the Amendments.

said the point raised by the hon. Member for Stirlingshire and the hon. Gentleman opposite had been carefully borne in mind, and the words were drawn up in such a way, he was advised, as particularly to cover that case.

I still recommend the hon. Member to wait. I will call upon him when we reach the point in the Bill where his Amendment comes in.

Question put, and agreed to.

The following Amendments were also agreed to:—

"In page 9, line 12, to leave out the word 'including,' and to insert the words 'or in respect of.' "
"In page 9, line 13, after the word 'superannuation,' to insert the words 'or other.' "
"In page 9, line 13, to leave out the word 'or.' "
"In page 9, line 13, after the word 'pay,' to insert the words 'or compensation for loss of office, given.' "
"In page 9, line 14, after the word 'of,' to insert the word 'the.' "—(Mr. Asquith.)

Amendment proposed—

"In page 9, line 14, after the word 'services,' to insert the words 'of the individual or the husband or parent of the individual.' "—(Mr. Asquith.)

Question proposed, "That those words be there inserted."

thought that the right hon. Gentleman had hardly carried out the whole of the promise he understood him to have made and which was contained, he thought, in the Motion of the hon. Member for Stirlingshire. He said he would extend his generosity to the widows and children of pensioners, as he understood, either of the Army or Civil Service. But the Amendment now proposed did not really carry that promise out in any way whatever. He would be very glad to be told he was wrong. He thought that for nearly every pension enjoyed by a widow or a child of a member of the services, either military or civil, that member had paid during the whole period of his service or had had to contribute to a specific fund. It was from that source that the pension was derived, and he was afraid the income-tax authorities if they followed the strict sense of the words of the Amendment would find in some cases that it was not in connection with services but in connection with savings. He would be glad if the right hon. Gentleman corrected him, but he was most anxious to see that the pensions of the widows and children of military officers and civilians in the employ of India should be treated as earned income.

said they were not dealing merely with India, but with all sorts of pensions for all kinds of services, to the State, to the railways, or anything else; all classes were to be put exactly on the same footing. There was no pension of any sort which was not in respect of services. A pension was given in respect of services, not in respect of a man's contribution, although that might be in some measure the amount of his pension. These Amendments were for the purpose of giving the widest possible fulfilment of the pledge he gave in Committee on the Bill.

, speaking as a former secretary a d manager of the Bombay Civil Service, Fund, said that on appointment to the Indian Civil Service an officer was required to enter into a covenant that he would subscribe to a superannuation fund for officers and a pension fund for widows and children, and he did both from the moment he arrived at Bombay until he retired from that service, and while a bachelor and afterwards. When he married he had to ray as increased subscription to provide a pension for his widow, if he ever had one, and as soon as any children were born a separate subscription had to be paid for them, and if in the interval he died, what he had paid in lapsed into the fund and did not go to the benefit of his heirs. It might possibly be contended that the pension he was providing in that way for widows and children originated in the covenant and thus was separate from that which was awarded at the end of his service for his own services and to keep him going after he had retired. He thought those facts were not generally known—the fact of the lapsing of the payments which were made into the general funds so that his heirs got no value for them if he died, the fact, that if he was a bachelor all his life what he had paid towards that contingent potential liability, namely a widow, also lapsed, and that if his children died the same thing happened to what he had I paid for them.

said there had been a doubt expressed as to whether the clause as amended covered the case of a contribution by the deceased pensioner towards a pension for his widow and family.

If the hon. Member will only have a little patience, I will call upon him when we reach the point where his Amendment comes in.

Question put, and agreed to.

The following Amendments were also agreed to—

"In page 9, line 14, to leave out the word 'that,' and to insert the word 'any.' "
"In page 9, line 14, after the word 'employment,' to insert the words 'of profit.' "
"In page 9, line 16, to leave out the word 'such.' "—(Mr. Asquith.)

said he apologised for hiss anxiety about this clause, but this was the last and only opportunity of clearing up a doubtful matter, and he hoped the House would grant him their indulgence. The only reason he had for proposing those extra words was because of a doubt n it only felt by lay men, but even by lawyers as to whether this new clause covered the case of a contribution of a deceased pensioner towards the allowance to his widow and family. If the right hon. Gentleman could give an assurance that he would instruct the Inland Revenue Office that such was the proper construction of the clause, he would be quite prepared to withdraw his Amendment. His suggested Amendment was "to add, after the second word 'profit,' the words 'whether the individual, or the husband or parent of the individual, shall have contributed to such pension, superannuation allowance, or deferred pay or not.' "The only reason he had in putting forward the Amendment was to make perfectly clear that the intention of the right hon. Gentleman was expressed in terms about which no possible doubt or dispute could arise.

considered the Amendment was unnecessary. In conjunction with the Revenue officers he had chosen form of words which he thought completely covered the case made by the hon. Member who had just spoken.

asked the Chancellor of the Exchequer if he could not see his way to make absolutely clear what was his expressed intention. He had the greatest faith, in his own opinion and he asked the right hon. Gentleman to adopt one of the Amendments on the Paper to make the mutter clear. He hoped the right hon. Gentleman would accept the hon. Member's Amendment.

said that of course, if the hon. Gentleman entertained any doubt as to the construction of the clause as he proposed to amend it, he would accept the words suggested. If he thought there was a shadow of doubt upon the question he would do so, especially as this was the last occasion on which they could effectively amend the framework of the Bill.

rose to protest against the tone adopted by the Chancellor of the Exchequer towards his hon. friend whose suggestion he had pooh-poohed and afterwards accepted at the instance of the hon. and learned Gentleman. Those who were interested in the freedom of debate were not prepared to allow the Chancellor of the Exchequer to set himself up as an infallible pope in these matters.

thanked the Chancellor of the Exchequer for his great courtesy and said, although he agreed with him in his construction of the sentence, he thought it might he construed by the Courts in a different way. He did not like to take the risk of letting the clause go through as it stood, and although he agreed with the Chancellor of the Exchequer's view he thought if he could see his way to adopt the Amendment to the Amendment it would do no harm and make things clearer.

said that after the speech to which they had just listened he would accept the Amendment.

expressed his thanks for the great courtesy which the right hon. Gentleman had shown him.

Amendment agreed to.

moved to add as a new subsection the following words "(d) Any annuity which has been purchased out of savings from income derived from the exercise of any trade, profession, or vocation." He thought that annuities purchased out of earned income should be treated favourably in the manner he suggested. It was more difficult for a man himself to save money out of his income and invest it than it was for a man in a situation where a certain portion of his income was deducted perforce by his employer and invested for him. Therefore he assumed that the right hon. Gentleman would do his best for persons possessed of such annuities in order that he might safeguard savings of this kind. He hoped the right hon. Gentleman would include them in the same category as pensions for long and faithful service and deal with them as earned incomes. He begged to move.

in seconding, said a similar Amendment was moved in the Committee stage, when he pointed out to the Chancellor of the Exchequer that unless he accepted some such Amendment as this he would inflict a great hardship on a certain class. He did not blame the House for safeguarding pensions received for civil, military, naval, or other services. He thought all pensions should be safeguarded, and that if a man was in receipt of an income of under £2,000 a year he was entitled to the benefits of the; clause. But if those persons were entitled to these benefits professional men and those engaged in trade or commerce were doubly entitled. The Indian civil servant in receipt of £1,500 or £2,000 a year knew that so long as he did his work he would receive his income; he need not put by anything because the State was putting it by for him. On the other hand, the struggling barrister, the doctor, or other professional man had perhaps a small capital embarked in a profession in which there was enormous competition. He might make £600 one year, and the next, owing to illness or some other circumstance over which he had no control, he might earn only £300 or £400 or he mid t make no profit at all. If by great assiduity and hard work he at last succeeded in making a small competence, and out of that competence he-put something by for old age, he had to exercise a great amount of self-denial. Everybody regarded a man who exercised such self-denial, and out of the money he had earned put by something as a provision against bad times and old age, as a man who did a great service to the State. What sort of a reward for that man was it if, after the exercise of that self-denial and thrift, having purchased an annuity of £ 1,000 a year, he had to pay 1s. in the £ income-tax, whilst the civil servant who had had a much easier time and had not to exercise that quality of self-denial was at once met by the Chancellor of the Exchequer and allowed this deduction? If the right hon. Gentleman had said that such men as these were to be exempt and that the civil servants were not he would have thought it hard, but that on the whole the right hon. Gentleman had done the right thing; but as it was. unless the right hon. Gentleman accepted this Amendment, he had done the wrong thing. He had favoured a class already favoured to the exclusion of a class equally deserving. He however, recognised the fact that the right hon. Gentleman desired to do what was fair and so far as possible to put everybody on an equal footing. But he desired to point out that it would be very difficult to justify the selection for this benefit of a class which had had by far the easier time. He appealed to the right hon. Gentleman to accept the Amendment.

Amendment proposed to the Bill—

"In page 9, line 24, at the end, to insert the words '(d) any annuity which has been purchased out of savings from income derived from the exercise of any trade, profession, or vocation.' "—(Mr. Fell.)

Question proposed, "That those words be there inserted in the Bill."

reminded the House that this matter was fully discussed in Committee, and he declined, for the reasons he gave then, to accept the Amendment. An annuity was a form of investment, and who was to tell from what source any particular investment had been derived? He admitted that pensions were an exception or an excrescence upon the scheme, but he found it impossible to make an exception in favour of annuities, which were only one form of investment.

said he failed to see the distinction in point of principle or equity between pensions and annuities, though he quite understood the administrative difficulties. The Chancellor, having admitted pensions, had no longer a logical principle to stand upon, the governing consideration being, not the equity or inequity of the claim, but the convenience or inconvenience of the Chancellor of the Exchequer. And, it being a quarter-past Eight of the Clock, and there being Private Business set down by direction of the Chairman of Ways and Means under Standing Order No. 8, further Proceeding was postponed without Question put.