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Stamp Duty On Certificates Of Registration Of Alkali, Etc, Works

Volume 155: debated on Friday 16 June 1922

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Motion made, and Question proposed,

"That in lieu of the stamp duties chargeable on certificates of registration of the works mentioned in Sub-section (1) of Section nine of the Alkali, etc., Works Regulation Act, 1906, there shall be charged duties at rates which shall be fixed by the Treasury after consultation with the Minister of Health and the Secretary for Scotland, and which shall be such that the duties levied under the said Act shall not exceed the amount required to meet the costs incurred in respect of the remuneration (including superannuation allowances) and expenses of the inspectors, and otherwise in connection with inspection under the said Act, and different rates of duty may be fixed as respects different classes of works."—[Sir J. Baird.]

12 N

This Resolution leads up to the Clause which is to be inserted among these presented on the Committee stage of the Finance Bill, and is to alter the Stamp Duty imposed upon the certificate of registration of certain works under the Act of 1906. The Act says:

"(1) An alkali work, a scheduled work, a cement work, or a smelting work shall not be carried on unless it is certified to be registered.
"(3) A certificate of registration… shall be enforced for one year.…
The Act imposes a scale of stamp duties,£ in the case of an alkali work and £3 in the case of any other works, and the Commissioners of Inland Revenue shall issue stamp forms of certificate for the purpose. When these figures were agreed to by the House originally, it was the intention that they should cover the cost of inspection of works necessary before the certificate could be granted. It has turned out that the cost of inspection and other costs incidental to granting the certificate exceed the cost of the certificate. The Geddes Committee drew attention to the fact, and suggested that the cost of the certificate should be raised so as to meet the expenditure involved upon the Government. It has been found difficult, without largely burdening the industry, to get those concerned to assent to prices which heavily burden the small manufacturers, but we found that we could get the consent of the manufacturers to bear the cost of the certificate being raised so as to cover the whole cost: therefore the proposal submitted to the Committee, and embodied in the Resolution, that the duties to be levied under the Act referred to shall not exceed the amount required to meet the cost incurred. The amount it is proposed shall be settled by consultation between the Treasury, the Ministry of Health, and the Secretary for Scotland, and there is every reason to believe that an equitable arrangement will be come to. The Resolution does not specify the exact amount, but does limit the amount of the levy to the total cost incurred, and the reasons for that are set out.

Although this is only a very small matter it is a very objectionable innovation into our taxation system. It is indeed giving to a Department the power to impose taxation upon the subject without the sanction of this House. In the present state of affairs this House fixed or has fixed the amount chargeable upon the various concerns, and now an alteration is proposed to be made by a recommendation of the Geddes Committee by which the total cost, as I understand it, of the inspection of factories is to be charged on the industry. This House has no voice in saying what is a reasonable amount to be so charged. That is left to the Board of Trade or the Inspecting Department, and they may raise their costs to any extent they like, and those costs have to be borne by the industry whether this House approves or not. That, in my opinion, is a very objectionable institution, and this House would be far better advised in the case of registration fees to keep control of the matter, and not to allow it to be in the hands of the Treasury. I do not know whether this is the time to deal with this innovation or whether it should be done on the Finance Bill, but I hope those who take an interest in the curbing of the bureaucracy will take the opportunity in this House strongly to enter their protest.

I have only just had the opportunity of reading this Resolution, and it appears to me that the fears of the hon. and gallant Member for East Middlesbrough (Colonel P. Williams) are well founded. I believe he has given correct interpretation of what will take place if this Motion be carried, and eventually embodied in the Finance Bill. At the present moment certain duties are charged on certificates of registration of the works used for alkali purposes and they are dealt with in Sub-section (1) of Section 9 of the Alkali, etc., Works Regulation Act, 1906. What we are going to do is for the future, instead of Parliament imposing certain charges under the Section I have mentioned, the Minister of Health and the Secretary for Scotland can impose those charges after consultation with the Treasury. That is an extraordinary course. It is a complete innovation and contrary to the custom and practice of this House from time immemorial. In the past, taxation has been imposed by this House and not by the Secretary for Scotland or the Minister of Health, and we seem now to be going back to the days of Charles I.

I do not see any member of the Labour party present. I always understood that the Labour party were in favour of democracy, by which they mean "government of the people by the people, for the people," and yet they are not present on this occasion to prevent the government of the people by the Minister of Health and the Secretary for Scotland, after consultation with the Treasury. This seems to me a most extraordinary proposition and I very much regret that only some 15 Members were present to hear the remarks of the hon. Gentleman opposite. In a Committee with only 15 Members present, we are going to make a tremendous alteration in the principle which governs taxation and finance, and I shall be quite willing to divide against this proposal if the hon. and gallant Gentleman opposite will support me. I do not think that we ought to pass a proposal of this sort, and we seem to be passing rapidly from our usual constitutional procedure to a system of government by the Cabinet and that is what I object to. If we are to have an autocratic government I would much sooner be governed by the King. If the hon. and gallant Gentleman who spoke last will tell with me, I shall certainly divide the Committee against this proposal.

The last speaker and the hon. and gallant Gentleman who preceded him are quite correct in drawing attention to this innovation. We are, however, placed in this difficulty. On the one hand we have to impose a charge on an industry not in excess of what we believe is necessary to meet the costs incurred, because that would be a handicap upon the industry. On the other hand, if we do not do this we shall be forcing the taxpayer to bear the difference between the amount collected in the form of licences and the costs incurred. The product of the licences last year was about £4,000, and the cost of collection and inspection was about £10,000. It is hoped by this proposal to be able to arrive at an amount of revenue which, if it does not cover the entire cost, will go a considerable way in that direction. It will be seen from the Resolution that the amount to be imposed must not exceed the amount required to meet the cost incurred in respect of the remuneration and expenses of the inspectors, and the work which is necessary to collect this money paid in the form of registration.

I am surprised to find the right hon. Gentleman the Member for the City of London (Sir F. Banbury) alluding to the Minister of Health as a new Minister, because he is really only a direct successor of the President of the Local Government Board. I do not complain of hon. Members exercising immense care to see that the taxpayer is not overcharged or that this House does not lose control over the amount of taxation imposed, but in this proposal we are definitely limiting the amount to be collected, and the House can refuse in the Estimates to pass any amount which is considered to be excessive, and they can do this on the Estimates of the Ministry of Health. Under these circumstances I hope they will not divide the Committee, because if this Motion be not carried they may be forcing the taxpayer to provide the deficiency, and we are not asking for power to impose a charge in excess of what the industry ought to be asked to pay. Under these circumstances I hope this matter will not be pressed to a Division.

As I understand it, the sum in question is estimated to amount to about £6,000. My hon. and gallant Friend says, "Here is a sum which is very small indeed. It is limited by providing that it shall not exceed the expenditure." He also says that in Committee of Supply, if the expenses are too great, the House can check them. Everybody knows that in Committee of Supply a small sum like this is almost certain to be overlooked, and, if it be not overlooked, the Minister in Charge will say, "This is only a very small point. You cannot move a reduction which is a vote of censure upon the Government on a small point like this. It is absolutely necessary. You do not want to impose a heavier charge on the industry." And nothing will happen. Then my hon. Friend says, "After all, you do not wish to put a charge on the taxpayer." He has rather misunderstood my objection. If these duties are to be altered, the amount of the alteration should be put in the Resolution, and should be confirmed by this House. The object is right, but the method is wrong.

Hon. Members may say, "What does it matter about a small amount of £6,000?" It matters very much. If we pass this Resolution, how do we know that in a few years to come some Government will not take this as a precedent, and introduce another Resolution giving perhaps greater powers, and a larger limitation as to the amount? If any objection be made, they will say, "Oh, but the hon. Gentleman is mistaken. This is not an innovation. There is a precedent for it. If the hon. Gentleman will only look at the Resolution of 16th June, 1922, he will see that there is a precedent for it." Then in all probability, the vast number of Members in the House will not know what occurred on 16th June, 1922, and they will say, "Probably this is all right," and an innovation will occur. The only time to check these things is at the commencement, and, if it be such a small amount, for Heaven's sake do not let us alter the procedure of this House, and introduce an entire innovation for a small amount. We do not know what harm we may be doing. There may possibly be some delay by putting in the amount, but what does that matter if you get over all the objections? I really cannot see why my hon. and gallant Friend cannot agree to this suggestion.

There is another danger. As far as I can see, there is no limit to the number of inspectors that may be appointed. We know the Ministry of Health is not exactly an economical Ministry, and it may say—I do not say under this Government, but under some future Government—"We must have some more inspectors to inspect these alkali works." The whole charge will come on a very small industry which may have very few friends in this House, bureaucracy will be increased, and a great injustice will be done to the trade. This House could not stop it, because it would he done under the Regulations. That is an equally large danger, because there is nothing in the Resolution limiting the number of inspectors required. I think we ought to hear from the Minister in charge as to whether there cannot be some check placed on the number of these inspectors. It is a very great danger, and will seriously prejudice the trade which will have to bear the whole expense.

I do not think that the explanation given by the hon. and gallant Gentleman is at all satisfactory. He seems to charge us with desiring to put a burden on the taxpayer. We wish to do nothing of the sort. We say that this House should have control over the amount levied, and fix it at an appropriate amount to meet the cost. It very frequently happens that this House votes taxation in the nature of Income Tax in excess of the requirements of the year, and the next year, that Income Tax is reduced to absorb the surplus. In this case the duty ought to be fixed to meet the cost of inspection. If it be found that the amount is too great, then the next year in the Budget it. should be remitted, so as to absorb the surplus in the same way. This is a very important departure, and it is a very dangerous one. I would like to call the attention of the hon. and gallant Gentlemen to the fact that there has been in recent years a very great demand for industries to provide for the unemployment in those industries, but I take it it would be exceedingly improper for this House to let the Minister of Labour levy a tax on an industry to meet the unemployment within that industry, and for this House to have no control over the amount of that levy or the means by which it should be raised. This House should not part with the control of any such levy upon an industry. These levies are becoming increasingly difficult for industry. Every industry is groaning under the burden of taxation, and gradually we are having additional burdens of taxation imposed on industry. It is bad enough when the amount is definitely; fixed by this House, but to allow two Ministers in consultation with the Treasury to impose any cost they think fit on an industry and for us to have nothing to say to it is a departure which this House would be very ill-advised to make, and, if my right hon. Friend will divide, I shall be very glad to go into the Lobby with him.

I omitted to see the point, raised by my hon. and gallant Friend the Member for Honiton (Major Morrison-Bell), which is another strong argument against passing this Resolution in its present form. My hon. and gallant Friend points out that under this Resolution there would be an opportunity for a Government who wished to reward its friends to appoint a large number of inspectors. It gives an opportunity for corruption. It gives power to Ministers to appoint inspectors with an unlimited amount of salary, including superannuation, and charge the cost to the industry without the House of Commons knowing in the least what the charge is going to be, and that, to my mind, is a most dangerous innovation. I have had the privilege and pleasure of my hon. and gallant Friend's acquaintance for some years, and I really do not believe that he thought the Resolution really entailed these results. I do ask them whether it is not worth while to postpone the consideration of this particular Resolution until we have a larger number of Members present than we have now. If not, I shall certainly divide with my hon. Friend.

I cannot accept my right hon. Friend's suggestion. This Resolution has to go through a Report stage when, very likely, there will be a larger attendance of Members. That depends on the amount of interest which hon. Members really take in the subject. As regards the point raised by my right hon. Friend, is it really the case that we are taking powers now by this very moderate proposal to increase indefinitely the number of inspectors? Surely that is not the case. If this Resolution be accepted, and the Clause which will be based on it is passed, our power to appoint inspectors remains precisely the same as it is, and my right hon. Friend will take care that we do not appoint too many. He always does.

On reflection my right hon. Friend will admit that the passing of this Resolution in no way hampers him in his efforts to keep down expenditure, and the number of officials, so that that particular point has very little substance. With regard to the charge imposed upon industry referred to by the hon. and gallant Member for East Middlesbrough (Colonel P. Williams) we are confronted with this alternative. The Geddes Committee recommended that the cost of levying these duties—which, nobody would deny, involves inspection and registration and somebody must pay for that—should be recovered from the industries. When the Bill was passed in 1906 there is very little doubt—though I have not looked up the Debate—that the Minister made it clear to the House that the cost of the inspection should be met by the amount of the payment. No doubt we have been disappointed in that. The cost of inspection, like everything else, has gone up. What are we to do? Is the taxpayer to meet the difference? Is the Government to be prevented from reducing the burden on the taxpayer? That is what it comes to. This is an effort on the part of the Government to carry out the policy of economy. We are relieving the taxpayer from the burden which he now has to meet, represented by the difference between the amount collected for licences and the cost of inspection, etc. If my hon. Friends insist that the taxpayer ought to bear that cost, they cannot escape from the position that they are resisting a legitimate and honest attempt by the Government to reduce the charges which fall on the taxpayer.

I am sure that the hon. Baronet does not want to state the case unfairly, but there is the alternative of increasing the fee to meet the actual cost, and letting this House have the control over the amount of the fees charged.

Then we are in this position. So far as our information goes, and as a consequence of consultation which takes places between those concerned, my hon. and gallant Friend will agree, that if you put on industry a charge representing the legitimate cost of inspection, etc.—and my hon. and gallant Friend will admit that inspection, if done at all, should be well done by competent people—the legitimate cost of that inspection does exceed what we think would be a legitimate charge to meet the proposal of the Geddes Committee. We propose not to go so far as the Geddes Committee in imposing a charge upon the industry, but we want to be reasonable and to impose a reasonable charge which will be sufficient for the purpose and which will be settled by the Treasury after consultation with the Minister of Health and the Secretary for Scotland. The most satisfactory way would be to charge industry with as much as you fairly can do of the cost of collection, limiting definitely the total cost of collection. There is a distinct precedent for that in the Finance Act of last year which provides in Section 61, Sub-section (1):

"The stamp duty charged on local authorities by the District Auditor's Act, 1879, as amended by any other Act, in respect of the audit of their account by district auditors, shall, instead of being calculated according to the scale contained in the First Schedule to that Act, be calculated according to a scale to be fixed from time to time by the Treasury after consultation with the Minister of Health."
That precedent must have escaped my right hon. Friend's attention. This is on all fours with that, only that the sum involved is different. But the present procedure follows the precedent of last year. I hope that he will accept my assurance that there is no intention on the part, of the Government to appoint large numbers of additional inspectors and in any event there is nobody in the Kingdom who is more vigilant than he in asserting control over public expenditure. In the circumstances I trust that he will not press the matter to a Division.

It is true, no doubt, that at present a large number of inspectors can be appointed and they would be paid by the taxpayer. Consequently, it is just possible that one might be able to induce the House to object to an increased number of inspectors. Linder this Resolution, however, the inspectors will be paid by a duty charged upon the alkali works, and in these circumstances I very much doubt whether you could get a sufficient number of Members of the House to do two things: firstly, to vote against the Government—it is very difficult to get anyone to do that—and, secondly, to vote against the Government on the ground that the alkali works have got to pay something. I do not think the hon. Baronet has made out much of a case by saying that the Government already have power to appoint inspectors. He has said there was a precedent, and I listened with great interest to hear what it was. There could not have been a worse precedent, for it was done last year, probably in the same kind of way in which it is being done now—in an almost empty House, when I, probably, was asleep or talking to someone else, and there was hardly anyone there. Therefore, I venture to say that last year's precedent is a very bad one. Moreover, it confirms my argument that, if we pass this, we shall be told on another occasion that there are two precedents and not one. I am ready to fight one, but I am not quite certain that I should be able to fight two; but I am not going to be asleep again to-day, as, apparently, I was last year. I listened carefully to what the hon. Baronet read, and I do not think it is quite the same precedent. What I understood him to read was that there was to be a variation in the stamp duty. This, however, abolishes the stamp duties. It says:

"That in lieu of the stamp duties chargeable on certificates of registration of the works mentioned …there shall be charged duties at rates which shall he fixed by the Treasury after consultation with the Minister of Health. …"
Therefore, you are doing away with the stamp duties on registration, and imposing, instead, duties upon an industry by which, without Parliament being required to sanction the charge, you compel that industry by an Order of the Minister of Health with the approval of the Treasury, to pay a certain amount of money. That is totally opposed to all the principles which have ever governed the House of Commons.

I am afraid that, quite unintentionally, I did not give my right hon. Friend all the information that should have given him with regard to the precedent. If I had gone on reading, it would probably have been clearer to him, and perhaps the Committee will bear with me if I quote the whole of the Subsection, because I agree that this is a very important principle. The Subsection runs as follows:

"The stamp duty charged on local authorities by The District Auditors Act, 1879, as amended by any other Act, in respect of the audit of their accounts by district auditors, shall, instead of being calculated according to the scale contained in the First Schedule to that Act, be calculated according to a scale to be fixed from time to time by the Treasury, after consultation with the Minister of Health and with such associations of local authorities as appear to the Minister to be concerned, and the scale so fixed shall be such as to secure that the duties levied under the said Act shall he sufficient to meet the costs incurred in respect of the remuneration, including superannuation allowances, and the expenses, of district auditors."
The parallel, therefore, is absolutely complete. My right hon. Friend says that he was probably asleep when that was passed last year, but, although he might have been asleep at one of the stages, he certainly was not asleep at all of them, and, therefore, I am surprised at his putting forward that argument. Quite seriously, I suggest to him that the precedent established last year, and accepted by the House, is one that may be legitimately applied now, and that the two cases are absolutely on all fours, with the exception that a very much smaller sum is involved in the present case than previously.

I am much obliged to the hon. Baronet for reading the whole of the Sub-section, which puts a considerably different interpretation upon the matter. It means that the local authorities have to be consulted. I do not know that that is a good thing. I do not say that we ought to allow a tax on any individual, or any body of individuals, to be imposed by the Ministry of Health and the Treasury, even after consultation with the local authorities, but the local authorities are brought in there, and the public have some possible chance of being protected by them. They are not brought in here, and I still say that, as far as I can understand it, that was merely an alteration in the stamp duty, whereas this is the abolition of the stamp duties and the imposition of other duties. The real point, however, is that, under this Resolution, we are going to give power to impose taxation and charges upon an industry without the amount being sanctioned by Parliament. I say that that is an innovation. The hon. Baronet says that it is only a small one, but that does not affect the principle. The only other argument is that we did it last year. I remember that the late Sir Charles Dilke, in this Chamber, when he was confronted with a precedent which he thought was a bad one, said, "Mr. Speaker, for goodness sake, because we have made one mistake, do not let us make another." I did not agree with Sir Charles Dilke in his politics, but I think that that was a most sensible remark, and one which it is very necessary at the present time that hon. Members should bear in mind when they are met by the argument that on some occasion in an empty House, without knowing what was going on, certain bad things were done.

Question put.

The Committee divided: Ayes, 97; Noes, 42.

Division No. 140.]


[12.45 p.m.

Agg-Gardner, Sir James TynteFremantle, Lieut.-Colonel Francis E.Neal, Arthur
Amery, Rt. Hon. Leopold C. M. S.Gee, Captain RobertNewman, Sir R. H. S. D. L. (Exeter)
Baird, Sir John LawrenceGeorge, Rt. Hon. David LloydNewton, Sir D. G. C. (Cambridge)
Baldwin, Rt. Hon. StanleyGibbs, Colonel George AbrahamNicholson, Reginald (Doncaster)
Barlow, Sir MontagueGilmour, Lieut.-Colonel Sir JohnNield, Sir Herbert
Barnes, Rt. Hon. G. (Glas., Gorbals)Glyn, Major RalphParker, James
Barnett, Major Richard W.Green, Joseph F. (Leicester, W.)Pease, Rt. Hon. Herbert Pike
Barrand, A. R.Greig, Colonel Sir James WilliamRenwick, Sir George
Bartley-Denniss, Sir Edmund RobertHacking, Captain Douglas H.Richardson, Sir Alex. (Gravesend)
Benn, Sir A. S. (Plymouth, Drake)Harmsworth, C. B. (Bedford, Luton)Richardson, Lt.-Col Sir P. (Chertsey)
Boscawen. Rt. Hon. Sir A. GriffithHerbert, Dennis (Hertford, Watford)Roberts, Samuel (Hereford, Hereford)
Bowyer, Captain G. W. E.Horne, Sir R. S. (Glasgow, Hillhead)Scott, A. M. (Glasgow, Bridgeton)
Breese, Major Charles E.Hurd, Percy A.Scott, Sir Leslie (Liverp'l, Exchange)
Bridgeman, Rt. Hon. William CliveHurst, Lieut.-Colonel Gerald B.Shortt, Rt. Hon. E. (N'castle-on-T.)
Broad, Thomas TuckerInskip, Thomas Walker H.Simm, M. T.
Brown, Brig.-Gen. H. C. (Newbury)Jesson, C.Sprot, Colonel Sir Alexander
Bruton, Sir JamesJodrell, Neville PaulStanley, Major Hon. G. (Preston)
Buckley, Lieut.-Colonel A.Kellaway, Rt. Hon. Fredk. GeorgeStewart, Gershom
Burdon, Colonel RowlandKelley, Major Fred (Rotherham)Sturrock, J. Leng
Cautley, Henry StrotherKing, Captain Henry DouglasSurtees, Brigadier-General H. C.
Chamberlain, Rt. Hn J. A. (Birm., W).Lewis, T. A. (Glam., Pontypridd)Taylor, J.
Cheyne, Sir William WatsonLoseby, Captain C. E.Thomson, F. C. (Aberdeen, South)
Churchill, Rt. Hon. Winston S.M'Donald, Dr. Bouverie F. P.Tryon, Major George Clement
Coats, Sir StuartMacdonald, Rt. Hon. John MurrayWalters, Rt. Hon. Sir John Tudor
Cockerill, Brigadier-General G. K.McLaren, Robert (Lanark, Northern)Watson, Captain John Bertrand
Conway, Sir W. MartinMacnamara, Rt. Hon. Dr. T. J.Wheler, Col. Granville C. H.
Davidson, J. C. C. (Hemel Hempstead)Macpherson, Rt. Hon. James I.Winterton, Earl
Doyle, N. GrattanMalone, Major P. B. (Tottenham, S.)Wise, Frederick
Edgar, Clifford B.Mitchell, Sir William LaneWood, Hon. Edward F. L. (Ripon)
Ednam, ViscountMolson, Major John Elsdale
Edwards, Hugh (Glam., Neath)Mond, Rt. Hon. Sir Alfred Moritz


Evans, ErnestMunro, Rt. Hon. RobertColonel Leslie Wilson and Mr.
Falle, Major Sir Bertram GodfrayMurchison, C. K.Dudley Ward.
Fisher, Rt. Hon. Herbert A. L.Murray, John (Leeds, West)


Ammon, Charles GeorgeHogge, James MylesO'Connor, Thomas P.
Banton, GeorgeIrving, DanPain, Brig.-Gen. Sir W. Hacket
Birchall, J. DearmanJohn, William (Rhondda, West)Sexton, James
Bromfield, WilliamJohnstone, JosephShaw, Thomas (Preston)
Cape, ThomasJones, Morgan (Caerphilly)Thorne, G. R. (Wolverhampton, E.)
Clynes, Rt. Hon. John R.Kennedy, ThomasWatts-Morgan, Lieut.-Col. D.
Craig, Captain C. C. (Antrim, South)Lawson, John JamesWhite, Charles F. (Derby, Western)
Davies, Rhys John (Westhoughton)Lister, Sir R. AshtonWilliams, Aneurin (Durham, Consett)
Edwards, C. (Monmouth, Bedwellty)Mills, John EdmundWilson, James (Dudley)
Finney, SamuelMorrison-Bell, Major A. C.Windsor, Viscount
Foot, IsaacMyers, ThomasWintringham, Margaret
Foxcroft, Captain Charles TalbotNaylor, Thomas EllisWood, Major M. M. (Aberdeen, C.)
Galbraith, SamuelNewbould, Alfred Ernest
Hallas, EldredNicholson, Brig.-Gen. J. (Westminster)


Henderson, Rt. Hon. A. (Widnes)Nicholson, William G. (Petersfield)Sir F. Banbury and Colonel Penry Williams.