Skip to main content

Orders Of The Day

Volume 155: debated on Tuesday 20 June 1922

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

Finance Bill

Considered in Committee.

[SECOND DAY.]

[Mr. JAMES HOPE in the Chair.]

Clause 6—(Excise Duties On Sugar And Molasses Made From Home-Grown Materials To Cease)

  • (1) The duties of excise chargeable under Section nine of the Finance Act, 1918, in respect of sugar and molasses made in Great Britain or Ireland and (except as regards goods in respect of which the said duties have been paid) the excise drawbacks and allowance under the said Section shall, as respects sugar and molasses made from beet grown in Great Britain or Ireland (in this Section referred to as "non-dutiable sugar and molasses") cease and determine as from the commencement of this Act.
  • (2) Part III of the First Schedule to the Finance (No. 2) Act, 1915, shall have effect as though references therein to the manufacture and manufacturers of sugar included references to the manufacture and manufacturers of non-dutiable sugar, and with the substitution in the application thereof to the manufacturers of non-dutiable sugar of the words "with a view to securing that no drawback or allowance shall be, paid in respect of sugar or molasses upon which no duty has been paid" for the words "with a view to securing and collecting the excise duty imposed by this Act."
  • (3) Notwithstanding anything in any Act, the Commissioners of Customs and Excise may, subject to the prescribed conditions, permit a person refining sugar in bond to receive non-dutiable sugar or molasses at his bonded premises and to deliver therefrom without payment of duty a corresponding quantity of sugar or molasses.
  • (4) A person manufacturing non-dutiable sugar or molasses shall not, except with the permission of the Commissioners of Customs and Excise and subject to the prescribed conditions, have in his custody or possession any materials out of which sugar or molasses are manufactured other than beet grown in Great Britain or Ireland or materials produced from such beet.
  • If any person acts in contravention of this Sub-section he shall in respect of each offence be liable to an excise penalty of one hundred pounds, and the goods in respect of which the offence is committed shall be forfeited.

  • (5) In this Section the expression "prescribed" means prescribed by Regulations made by the Commissioners of Customs and Excise.
  • I beg to move, in Sub-section (1), to leave out the words,

    "as respects sugar and molasses made from beet grown in Great Britain or Ireland (in this Section referred to as non-dutiable sugar and molasses)."
    4.0 p.m.

    We now come to the Clause dealing with the Sugar Duties. There are two Amendments on the Paper in the name of the party for which I speak, and we wish to see that the discussion on such Amendments that you may select does not eliminate the points which we want to raise. The effect of the first Amendment is to abolish the Excise duties on sugar, and the second Amendment is to leave out Clause 6 which raises the question of the special protection given to the growing of sugar in this country. The two questions involved are totally different. The two points we want to raise are, first, the abolition of the Sugar Duties in tato, and, secondly, the refusal to sanction this new special protection for home-grown sugar. I do not know what points the other Amendments raise, but from a hasty glance at them they seem to be protective in character. To the uninitiated this first Amendment would seem to be one which would indeed be lamentable as coming from the Labour party. It is, on the face of it, a case of the grossest protection. If the Customs duty were left in, it would be setting up a system of protection for refineries in this country such as has never yet been asked for even by the proprietors of the refineries themselves. I need hardly say that the Labour party in moving this Amendment have no intention of protecting home refined sugar. We are moving this Amendment, because we are perfectly well aware that, if we can get rid of the Excise, we can get rid of the Customs also, and thereby abolish the whole of these duties upon sugar. That is the intention of the Labour party—to abolish the indirect taxes upon sugar and thereby lighten the burden upon the whole of the consuming population of this country.

    Every argument that has been used in favour of the abolition of the Tea Duty can be used in favour of the abolition of the Sugar Duty, and many other arguments. Not only is sugar the food of the people, and particularly of the children, but it is also the raw material of a very large number of industries in this country. Cheap sugar is the basis not only of human life, but also of a considerable amount of human industry in this country. I do not propose to descant on the advisability of abolishing the Sugar Duty, or to refer to the fact that under this wonderful rich man's Budget £61,000,000 comes off the direct taxes and only £5,500,000 off the indirect taxes. There are plenty of hon. Members behind me who will state the arguments in favour of the abolition of the Sugar Duties. All I want to do, in opening this Debate, is to make it clear in the first place that the intention of our Amendment is not protective, but is directed solely towards the abolition of the Sugar Duties. The arguments in favour of that I will leave to my hon. Friends behind me. No doubt when the Chancellor of the Exchequer comes to reply, his argument will be that he has not got the money. After four years' experience of this Government, we have come to the conclusion that the only way to make this Government economical is not to let them have the money in the first instance.

    It might be of service to the Committee if you, sir, could indicate the next two or three Amendments that will be selected.

    The next two Amendments in the name of the hon. Member for the Moseley Division of Birmingham (Mr. Hannon)—in Sub-section (1), after the word "Ireland" ["beet grown in Great Britain or Ireland], to insert the words "and of a polarisation not exceeding ninety-seven degrees"; and, in Sub-section (2), after the word "paid," to insert the words

    "and also, with a view in the case of non-dutiable sugar and molasses entering a refinery working in band, that no duty shall be paid on delivery on such non-dutiable sugar or its equivalent"—
    are in order, and I propose to call them. Then the Amendment on Clause 8 of the hon. and gallant Member who has just spoken (Colonel Wedgwood)—to leave out the words
    "having regard to the nature of that ingredient or part and to the smallness of its value in comparison with the total value of the article"—
    will be in order, as will also the first two Amendments on Clause 3—to leave out paragraph (b), and, at the end of the Clause, to add the words
    "Provided, however, that the Entertainments Duty within the meaning of Section one of the Finance (New Duties) Act, 1916, as amended by this Clause, shall not be deemed to extend, and shall not apply in the case of any exhibition of a cinematograph film or films generally described as a 'trade show' where such exhibition is mainly or primarily attended by persons to view such film or films for the purpose of trade."—
    but not the last Amendment—at the end of the Clause to add the words
    "(2) The Entertainments Duty payable under Section one of the Finance (New Duties) Act, 1916, and Section eleven of the Finance Act, 1918, where the payment for admission to any entertainment does not exceed twopence halfpenny, shall cease to be payable as from the fifteenth day of May nineteen hundred and twenty-two."

    Are we to understand that the Entertainments Duty will be discussed on these Amendments to Clause 9 or on the new Clause standing in the name of the hon. Member for West Leyton (Mr. Newbould)?

    Clause 9 is a purely declaratory Clause, and no Amendment which involves substantive changes in the law will be in order.

    It seems to me that the Amendment does not at all raise any discussion upon the general efficacy of the Sugar Duties. The whole point involved is that while the Clause proposes to exempt from Excise Duty sugar which is made from beet grown in this country, the hon. and gallant Member proposes to exempt from the Excise Duty sugar made from beet grown in other countries. The Amendment does not deal in any way with sugar as a whole, but purely with sugar made from beet. Therefore, the Amendment does not seem to me to raise the large question that my hon. and gallant Friend proposes to discuss. Accordingly, I shall deal with it as it stands and with the necessary restrictions which are imposed by the Amendment itself. I can reply to this suggestion almost in one sentence. If you exempt from duty sugar which is made from beet grown in other countries, it is perfectly obvious that you destroy the whole intention of the Clause itself. You would then encourage the importation of beet from other countries in order that sugar may be made from it to compete at an unfair advantage with sugar grown in other parts of the world. I cannot imagine that any seriously-minded Member wishes to bring about that particular result, and, whether the proposal which we make in this Clause be bad or good, at least the proposal which my hon. and gallant Friend makes would be of the greatest possible detriment and injury to the sugar industry in this country. It would also have the effect of destroying a considerable portion of our revenue—not the whole £35,000,000 which he is anxious to get rid of—at present obtained from sugar, and, accordingly, on these two grounds, I would ask the Committee to reject the Amendment.

    The Amendment has certainly left some of us who are not so familiar with the procedure of the House in quite a quandary as to whether we can debate the Sugar Duties, or merely the point raised by the Chancellor of the Exchequer as to the subsidies to British-grown beet and the sugar industry. I have no desire to depart from the ordinary course of procedure, but, so far as the Sugar Duties are concerned, I think I can safely say that there were many manufacturers and refiners in this country who were looking forward to a reduction. I remember, when the Budget was about to be introduced, receiving from a firm in this country a wire which I may be permitted to read. It was as follows:

    "Rumours here that Sugar Tax will be reduced, to operate on some deferred date. This would be serious mistake for everyone. Am prepared for reduction being effected from to-night. If deferred all the great inconvenience of preparation for reducing stocks, etc., will have to be repeated."

    I think I must rule on this Amendment that the discussion will have to be confined to the distinction between Excise Duty on sugar grown at home and Excise Duty on sugar imported in this country and used for the purposes of manufacture in this country.

    This Amendment quite clearly goes to the root of the whole of the Sugar Duties as we know them. If we carry this Amendment, the Sugar Duties fall to 'the ground. Are we not therefore entitled, in arguing in favour of this Amendment, to show that the Sugar Duties as a whole are bad, and that therefore those who are voting for this Amendment are voting against the Sugar Duties.

    If it be for the general convenience of the Committee to take a general discussion on this Amendment, I am willing to acquiesce, but that discussion must not be repeated. If I allow a general discussion on the Sugar Duties, then, although the matter of the Customs Duty might be divided upon, the discussion could not be repeated. I can only allow a general discussion now on that ground.

    We put this Amendment down in this form in order to get the discussion taken when we should be in the House. We have a conference next week at Edinburgh, and we shall be mostly away. We wanted a discussion now, when we can take part, rather than later, when we shall not be able to be here.

    Is not the Amendment a direct negative of the Clause? If the Amendment were carried, the Clause would read:

    "The duties of Excise chargeable under Section nine of the Finance Act, 1918, in respect of sugar and molasses made in Great Britain or Ireland and (except as regards goods in respect of which the said duties have been paid) the Excise drawbacks and allowance under the said Section shall cease and determine as from the commencement of this Act."
    That is exactly what the Clause does. This is a direct negative to the Clause, and should be brought up on the question that the Clause stand part of the Bill.

    No, I think not. The immediate effect of the Amendment is to extend the operation of the Clause to all manner of sugar as regards Excise. It is in order if argued on the limited issue. If the Committee are of opinion that it would be convenient to take the general discussion now, I am willing to allow it.

    The words at the beginning of the Clause are

    "The duties of Excise chargeable under Section nine of the Finance Act, 1918, in respect of sugar and molasses made in Great Britain or Ireland."
    Those words are still left in, and under those circumstances the only result of leaving the words out is that the duties in respect to sugar and molasses made in Great Britain and Ireland shall cease and determine, and that is really the effect of the Clause.

    I think not. I read it otherwise. If the right hon. Baronet is right the words "as respects sugar and molasses made from beet grown in Great Britain or Ireland" would be meaningless. I do not think they are meaningless, and I think the hon. and gallant Gentleman was fully aware of that when he asked the Committee to disallow any possible taint of Protectionism.

    I hope we shall have an opportunity later of discussing the question of the Customs Duty on sugar apart from this particular question of sugar produced from beet grown in this country. It can only be discussed on a new Clause, and if we attempt to discuss it here and now, on the mere question of beet sugar versus sugar produced from any other source, we shall not have a satisfactory discussion. I hope we shall keep this Amendment to the question of beet sugar versus any other kind of sugar.

    If objection be taken to having a general discussion now, I am bound to rule rigidly according to the Rules of Order.

    Is it not a fact that you have ruled out my Amendment on the Sugar Duty because it was appended to a Clause which dealt with beet sugar and not with other sugar?

    No. The ground on which I ruled it out was that this was a Clause which dealt with Excise and not with Customs. I only suggested a general discussion because it might be for the convenience of the Committee, it being somewhat difficult to discuss Excise Duty without the corresponding Customs Duty. As objection has been taken, I feel bound to rule narrowly on the matter that the discussion must be confined to.

    Amendment, by leave, withdrawn.

    I beg to move, in Subsection (1), after the word "Ireland" ["beet grown in Great Britain or Ireland"], to insert the words "and of a polarisation not exceeding ninety-seven degrees."

    This Amendment is intended to help the Chancellor of the Exchequer to get a little more revenue. Its object is to confine the experimental stations which have been organised in this country for the production of sugar from beet to the manufacture of raw sugar. The sugar refining industry in this country is one of considerable magnitude and highly specialised, and gives a large volume of employment to a great number of people. If the concessions which are contemplated in this Bill are given to these stations engaged in the manufacture of sugar from beet it will tend to deprive the sugar refiners of a considerable proportion of their activity and will inflict considerable injury upon the large number of people engaged in this industry. Up to the present the beet sugar industry has been in receipt of a subsidy of 6s. 2¾d. per cwt. It is now proposed to increase this subsidy to 25s. 7d. per cwt. Of course, the Minister of Agriculture, whose devoted loyalty to the farmer is becoming one of the assets of our public life, says quite cheerfully, "We are going to increase this subsidy from 6s. 2¾d. to 25s. 7d. a cwt," and he paints a beautiful picture of the wonderful achievements in the future of these sugar factories. But the right hon. Gentleman ought to remember, in so cheerfully subsidising these experimental factories at the expense of the British taxpayer, those who are already employed in the sugar refining industry and those enterprising people who have invested large capital in sugar refineries. The deficiency at Kelham in the year ending 31st March, 1922, as shown in their revenue account, was £103,509, and what the Committee is asked to do is to support a concession which reduces substantially the loss incurred in this experimental working. If, as a matter of fact, the Government had given the additional 19s. 5d. a cwt. subsidy which is now proposed in the Finance Bill to this factory, it would have been an actual loss last year of 263,000. Is it reasonable or sane public finance to spend money in that way at the expense of the taxpayer in order to prop up what is at best a purely speculative enterprise? I have been associated most of my life with agricultural experiments. I had a great deal to do at one time with the promotion of sugar beet growing, but I would be no party to the British taxpayer being invited to put his hand in his pocket and pay out to the tune of £60,000 or £70,000 a year in order to maintain experimental stations, of which no one can say they can work on a properly organised commercial basis.

    The actual subsidy given under the existing arrangement to Cantley last year was £26,700. The actual amount of subsidy proposed to be given to this industry is considerably in excess of the value of refined sugar without the duty, and all we ask is that these experiments may be continued, but continued by limiting their work to the production of raw sugar. My proposed 97 degrees of polarisation simply indicates that the sugar produced within that limitation shall be what is known as raw sugar. I do not want to discourage these people from making the trial, but I do not want their experiments to be conducted at the expense of another class of the community who are already doing very successful and valuable work, and I suggest that this Amendment ought to be embodied in this Clause, and the operation of these beet sugar experimental factories be limited to the production of raw sugar. Every Member of the Committee is all for the encouragement of agricultural development, but it ought to be encouraged upon lines which would not inflict an unfair burden upon the taxpayer, and do injustice to a considerable section. Then look at the position in which we are placed with regard to our own Colonies. If this subsidy, as contemplated in the Bill, is given to the sugar beet factories, you inevitably place them in unfair competition with our own Colonies, which we are always proclaiming our desire to help. My hon. and gallant Friend who has just come back from the West Indies will appreciate the significance of that observation. I do not think we ought to adopt any method of subsidy which would inevitably put us in conflict with our own people overseas, and I suggest to my right bon. Friend who is so desirous of saving the finances of the country, and so anxious to conduct the public administration at a minimum of expense, that here is an opportunity of preventing waste of public money on an enterprise which, at all events, up to the present has given no evidence of achieving success.

    While agreeing with a great deal which has fallen from my hon. Friend, I do not think he has explained very fully why he would select 97 degrees of polarisation. I believe, in regard to Canadian and West Indian sugar, the figure is 98, and this is the first time I have known the figure of 97 given in dealing with this matter. I do not understand what is the precise point of fixing 97 degrees as the test of what is raw sugar and what is manufactured sugar, which I understand the hon. Member wishes to differentiate by this Amendment.. He thinks that, up to a point, we are justified in giving special assistance to the production of raw sugar from beet grown in this country, but that we should not encourage artificially and specially those people who are producing the raw beet sugar by going into a further process quite apart from their original process of producing something which is now produced from raw sugar imported into this country from the West Indies into a manufactured article. With that object I understand this Amendment has been put down. But whether he is right in fixing 97 degrees I very much doubt. I hope the Chancellor of the Exchequer will satisfy us on that point, because I know my friends in the West Indies are a little apprehensive on points of this kind. They have had experience of the introduction of figures of this kind in the working of the Canadian agreement, and they would like it satisfactorily cleared up that this fixing of 97 degrees is not a new departure in the making of a new standard of quality which may necessitate them in their operations changing the whole of their methods of manufacture.

    This Amendment has given us an opportunity of discussing the subsidy which is being paid to Kelham and Cantlay. I am not prepared to give an affirmative or a negative answer to the question put by the hon. Member for Stafford (Mr. Ormsby-Gore). I cannot speak from the refiner's point of view. So far as the subsidy to the Kelham and Cantley factories is concerned, there is a consumer's point of view as well as a. taxpayer's point of view. A few days ago several of us bad the privilege of meeting the Chancellor of the Exchequer in his palace, and we attempted to put the position, so far as we thought it advisable, as to the complete dropping of the subsidies to these two factories. Our strong protest as consumers and as taxpayers is based on the fact that the proposed increase of subsidy is from 6s. 2¾d. per cwt. to 25s. 8d. per cwt. That amount is too great. We claim, first and foremost, that there cannot be any argument that can be put forward that would justify the attempt of the Government to sub- sidise this industry, We are living in days when economy is the watchword, and here is an opportunity for the Government to save money. It will not be a hardship upon those involved in the industry, but will give these people an opportunity to use their genius in order to increase their own industry, so that there will not be any claim upon the taxpayers of this country.

    As taxpayers we consider that it is essentially wrong to give such an inducement to Kelham and Cantley to continue making this sugar. The deficiency on 31st December, 1922, amounted, roughly, to £104,000, which has to be made up out of the country's revenue. Can my right hon. Friend say that the time is opportune for the spending of such a vast sum of money? He may say that it has a tendency to increase employment and to encourage industry that shall have a British basis. If he is going on these lines of giving subsidies to one particular industry he can no longer justify his action in refusing to give a subsidy to any other industry that asks for it.

    I do not propose in dealing with this Amendment to discuss the whole question of policy, because I do not think it arises upon an Amendment which is confined to the refiners' interests. Accordingly, I do not propose to give to my hon. Friend the reply which he would expect that in courtesy I should give to him. I should imagine that he could bring forward his argument upon the Motion that the Clause stand part.

    As I understood the speech of the Proposer, he wishes to qualify the reduction of the Excise Duty on the ground that the relief is excessive. I hardly see that I can rule out the argument as irrelevant.

    I am desirous of concurring in your ruling, and am anxious to meet the statement made by the Chancellor of the Exchequer. He generally attempts to meet us somewhat fairly, and I try to meet him on reasonable grounds. I thought that this Amendment gave us an opportunity of raising the question of the subsidy. Those who are familiar with the industry at Kelham and Cantley will remember that so far as Cantley is concerned, in one part of its history it only started in 1912, and after three years working it proved a failure and was closed down. It was reopened in 1920, on the ground that a preference was given to it in the form of a subsidy by the Government. At the present time Cantley is barely paying its way, even with the subsidy. If Cantley cannot make a profit and make ends meet, even with the gift of 6s. 2¾d. per cwt. upon its production, it should be closed for a second time. It not good business for the taxpayers to carry the shareholders of Cantley upon their backs. When we have proposed Amendments with the object of promoting social reform and to removing many difficulties with which the working classes have to contend, the first argument of the right hon. Gentleman has been that we cannot afford the money; that it would amount to a subsidy, and that industries must stand upon their own basis. Is my right hon. Friend prepared in this case to let this industry stand upon its own basis, without subsidy? He will probably say that he is prepared to support British enterprise, and British initiative and British capital. Is he aware that many of the shareholders of Cantley are Dutchmen? If we are to enter into the question of giving the subsidy for British enterprise, we ought to say that where British money is taken from the British taxpayers it should go into British avenues, in order to encourage British trade.

    What is proposed this year means that Kelham and Cantley will receive in subsidy an amount which is more than double the value of the sugar that either of these factories produces. The subsidy that the British taxpayer will have to find will be a greater amount than the total value of the sugar produced in these factories. That is extremely bad business, to say the least of it, it is bad statesmanship, and I appeal to the right hon. Gentleman to reconsider his position in the matter. I cannot speak for the refiners, but I am informed on good authority that the English refiners to-day are melting what is known as Cuban raws. These raw sugars, which are grown in Cuba, are conveyed to the refineries in the United Kingdom, and they are offered upon the market, after being refined, at the rate of 22s. 6d. at the door of the refinery, and yet you are offering a subsidy to these two factories at the rate of 25s. 8d. per cwt. How can business be conducted in that way?

    Is the subsidy 25s. per cwt., or 25s. per ton? One speaker has mentioned one figure and another has mentioned another figure.

    It is 25s. 8d. per cwt. The gift on last year's production at Cantley of 4,300 tons of sugar amounted to £80,000, raising the total gift to Cantley, based on last year's production, to the large sum of £114,000. The position at Kelham is slightly different from that at Cantley. At Cantley the private shareholders benefit or suffer according to the trade profits which are made, but at Kelham there is a different situation. The private shareholders, au matter what happens at Kelham, are entirely protected and safeguarded until 1930. Their 5 per cent. interest is entirely safe until that time, and it has to be drawn out of the revenue of this country. All the losses that they are compelled to deal with at that place fall upon the taxpayers. If Cantley has cost the taxpayers £114,000, what have we to hope for if the desire of these people to establish 50 factories is realised? We shall want a new Chancellor of the Exchequer to secure the revenue, or at some future time we shall have a Chancellor of the Exchequer telling us that he will have no Sinking Fund for that year. We cannot go on in this way. It is not sound business. My right hon. Friend may say, "What about the men who will be thrown en the streets? What about the blow to the agricultural industry"? I admit that those are excellent points, but when they are examined and analysed he will find that much more good would be done and more benefit would be yielded to those who are engaged in the industry by setting up an industry that can be more fruitful than the one on which the subsidy is granted. I appeal from the consumers' point of view, and particularly from the taxpayers' point of view, that the right hon. Gentleman should reconsider the position, and that he should allow this industry to stand upon its own legs. If you are to subsidise these industries you must subsidise others. If the right hon. Gentleman wants to end the subsidies, he must end them at the earliest possible moment.

    I think that, my hon. Friend is wrong in some of his assumptions respecting the Cantley factory. Neither Cantley nor Kelham has received anything as yet. This proposal cannot be operative until this Bill is passed. I gather from his observations that he was of opinion that the Cantley factory had already received a subsidy from the State. The Amendment before the Committee was obviously put down in the interests of the refiners. They are naturally apprehensive. For my part, this seems to imply a confidence in this new industry, which is not traceable in my hon. Friend's speech, because unless the industry does develop on very large lines the interests of the refiners will not be affected. It is true that if the industry does develop on the lines that are now projected, and if it becomes a big, industry, of necessity the interests of the refiners will be affected adversely. There is no secret about it. This Committee requires to know the facts. Under the new processes which are now in operation at Cantley and Kelham refining is carried on as part of the general operations. It is a continuous process. You make and refine sugar in a modern sugar factory. It is obviously most uneconomic—this is apart from the particular merits of the policy—to convey beet to the factories and restrict the manufacture to raw sugar, and then have to transport the raw sugar to a refinery, refineries in this country, being mainly situated at a port., because obviously they have hitherto dealt exclusively with the imported raw sugar.

    My hon. Friends who represent the refiners are entitled to be apprehensive, in the event of this home-grown industry developing, that their interests may be affected. It will be a matter of slow and gradual development. Nevertheless, they are entitled to take the fact into consideration. On the other hand, looking at the matter from a broad point of view of the economic conduct of an industry, the application of the Amendment would be a most undesirable thing. I would simply say to them that the prospects, even if much more hopeful than they are now, are such that they need not cause the present generation of refiners serious alarm. There will still be plenty of raw sugar in the country for the refiners to work on. In fact, I do not see that that part of the business will be materially affected for a number of years.

    With respect to the remission of duty in the case of the factories at Cantley and Kelham, of course this does raise a great question of policy. I am appreciative of the way in which it has been introduced and debated in this House. For my part, I have long approved the policy. It is one that has been adopted intentionally by Parliament. I was a member of the Sub-committee of the Reconstruction Committee of the Government, presided over by Lord Selborne, which recommended to the Government that an experiment should be carried out in the growth of sugar beet in this country, and the manufacture of sugar from the beetroot. Ultimately the Government decided to assist a number of private individuals in the carrying out of such an experiment. Now it has been proved so far, as I anticipated is always the case in a new industry, that you must have a number of years' experience before you reach economic production, but we have at least proved this. One of the earliest objections which we used to encounter was that the soil of this country was not suitable to the cultivation of sugar beet. We have proved on the contrary that sugar beet is grown in this country equal to, and I believe better than, that of almost any other country in the world.

    Moreover, the growth of sugar beet is a real help to agriculture. You introduce into the. rotation a crop which is profitable to the farmer. I do not profess to be an expert agriculturalist. I have made many speeches on agriculture, and perhaps because of my limitations of knowledge I have preferred to speak with greater authority than others who have more wider and intimate knowledge, but no one aware of the facts will dispute that in the rotation in England there must be either a fallow or a root crop, and that the farmer has had to grow a root crop which was a dead loss to him, and he had in the course of the rotation to make up, in his profits, for the dead loss on the crop which was essential to the cleaning of the land. But sugar beet introduces into the rotation a crop which has the quality of cleaning the soil, and it is also one which gives a profit to the farmer. He has a ready market. He will not produce unless you give him a definite contract to take his beet at a particular period, and this in itself is a real advantage to agriculture. Moreover, it does bring large numbers of persons on to the land. I have friends in my locality who have worked out the figures for me, and in the course of last season's crop there was a general expenditure of at least £8 per acre on actual manual labour on the land. My hon. Friends, in this connection, will recall come of the arguments which they have used. They have told the Government that it is much better to put men in employment, even uneconomically, rather than have them draw the dole without doing anything for it. I recognise the difficulties, but here we have taken some step in that direction, and last year we had employed on the land several thousand men who otherwise would have been in the ranks of the unemployed.

    I want to be as accurate as I can. There were a thousand additional labourers employed on the land. That is in the cultivation of 7,937 acres last year. That is for the two factories, and the average wages were per acre. We have ascertained £63,500 the books of the two factories that £63,500 were paid out on labour in the production of sugar beet for last year's crop.

    No, they are not. It is well known that I am closely connected with one of the enterprises and everyone will relieve me of even the suspicion of trying to make any private profit out of it. So far as profit is concerned, it is the worst venture that I ever made in my life, but my interest is in the development of the land. I believe that it is going to be a real contribution to applied agriculture in this country. While I say that, I assure the Committee that what we are doing is simply done out of considerations of the public policy, and I ask them simply to accept the assurance that I derive no private profit out of it. As soon as it appeared certain that a loss would be incurred, as a result of operating the season's crop, my colleagues met and decided to abolish all payments to directors, and since then we have all been working without any fees and paying all out-of-pocket expenses in visiting the works and farms, so that I hope that my colleagues and myself shall not be charged with looking after private profit. In my opinion it is a good thing for agriculture. Everybody must be aware of this further fact, which I will not elaborate, that our country needs, and in my opinion must have, sound agriculture. World conditions are constantly changing. It is the policy of every country to avoid the lopsided development which has characterised this country for very many years in the development of its agriculture and its industry. Your Dominions are doing it, and rightly doing it. We do not attempt to interfere with the fiscal development of the Dominions, and of the overseas dependencies, and accordingly we expect that they will not interfere with any arrangement which we deem it desirable to make.

    The right hon. Gentleman is going away somewhat from the particular subject of home-grown beet sugar.

    I will endeavour to keep within the limits, but I thought that the whole policy had been opened up in the course of this Debate. I will certainly obey your suggestion and keep close to the point. As a result of the operation of these factories it was found that they could not, during the experimental stage, continue to pay the heavy duties. As my hon. Friend stated, Cantley started in 1912, and worked for two or three seasons, I am not sure which, but it is not accurate to say that the factory was closed down because it failed to make a profit. It had to close down because the War was on, and the Dutch Government, from whom seed was previously secured, forbade the exportation of sugar beet seed from that country, and Cantley was consequently closed down. Cantley, undoubtedly, has been very efficiently conducted. I can see the point and the danger that, if the remission of the duty was simply to tend to the advantage of foreigners, however good their relationship may be with us, there would be a strong point of criticism.

    5.0 P.M.

    First of all, I think that we are indebted to the Dutchmen for having introduced the industry into this country. It is recognised that, in order to carry on the industry economically, the two enterprises ought to be amalgamated, and we are now engaged in endeavouring to effect that policy. The Dutchmen will have no hesitation in putting up the necessary capital in order to carry out this policy. We, on the other hand, are concerned that the enterprise shall be carried on by British capital and be a British sugar-beet industry, and be that alone. That is the policy which we are endeavouring to carry on. Much criticism has been advanced respecting the result of the first year's operations at Kelham. Cantley I do not know as well. They are certainly in a better position than Kelham because of several years' working, and because they have at their disposal experts who have been engaged in the growth of beet and the manufacture of sugar. It is very largely that expert assistance which will he placed at our disposal in the event of amalgamation taking place. In respect of Kelham, you must bear in mind that we built under the most adverse circumstances. It is a legitimate point of criticism to say that the enterprise ought not to have been started at that particular moment, but if we carry our minds back, we know that at that time everybody was urged to develop business in order to provide employment and to assist reconstruction. We recognised that we were starting a new industry, and that very few of us had actual knowledge of the working of a complicated sugar factory it would be well to pay a visit to the factory to see the elaborate machinery required for the production of sugar. We decided to go on. Indeed, the plans were in readiness before I joined the enterprise. But I think my colleagues were perfectly right. First of all, they foresaw that there was some danger that the machinery might not be ready, and the works not even completed. Therefore they limited the programme and estimated for about one-half of the crop that could be operated in a factory of that size. Contracts with the farmers have to be made in October and November for the beet of the following September or October. The price has then to be fixed and you have to make the contract on that basis. I admit that we paid too much for the beet, but at the moment none could have foreseen the great cut in prices which was to ensue in the following year.

    With regard to the factory, we were very soon hung up with labour disputes. We had then to pay heavy sums in order to persuade the men to get on with it. I have stated in this House that, whereas we were in need of between 50 and 60 bricklayers, we could get only 15 or 16 at a time when we were told that unemployment was rife. Those were some of the difficulties. The result was that we had then again to cut down the programme, so that the factory only operated at one-third of its capacity. Everybody knows that it cannot be an economic proposition on that basis. But we were experimenting, and we felt that everybody would be reasonable enough to recognise that in establishing a complex industry of this character some years must elapse before success could be reached. It is not only a question of public money being granted, if the policy is a good one. I know of men who have ventured large sums and have already lost heavily, with no possibility whatever—with the remission of duty or otherwise—of recouping themselves. Therefore it can never be said that they have benefited by the remission of duty. The Government have recognised the strength of the case. They feel that it is an industry which ought to be established. They realise that this money goes to the development of agriculture and the provision of employment. I have every reason for believing that in the course of a few years, with the aid of this remission—bearing in mind that every country with which we have to compete has built up its sugar industry on aid from its own Government—we will have established in this country, on a sound basis, a sugar beet industry which will develop rapidly. I know that there are already schemes in existence for the creation of new factories, so great is the confidence already inspired, among agriculturalists and others, in the prospects of this industry.

    While the Committee has appreciated the arguments and the facts which the last speaker has addressed to them, I wish to refer more specifically to the Amendment under discussion. I share some of the difficulty experienced by the hon. Member for Stafford (Mr. Ormsby-Gore). I understand that if the words of the Amendment are inserted in the, Clause sugar grown in this country, which passes through the refineries in this country, will not pay the Excise Duty. That will have the effect of placing the refining industries at Greenock, London and Cantley on an equality. If the Amendment is carried the Government subsidy will be paid to the farmers for growing sugar and the refineries in different parts of the country will be on an equality; that is to say, they will be treated alike by the Chancellor of the Exchequer. This is not the time for the outpouring of public money to the farmers of the country to encourage them to grow beet sugar or any other commodity. With one aspect of this subject I will deal later when the question before us is that the Clause stand part of the Bill. If the hon. Member who moved the Amendment goes to a Division meanwhile I shall be unable to support him in the Lobby.

    I am sure we all appreciate what the right hon. Member for Norwich (Mr. G. Roberts) has told us about Cantley and Kelham. I had an idea that an amalgamation was going through and that if that amalgamation succeeded there was a chance of the Dutchmen subscribing more cash and therefore, possibly, saving the British Government. I do not think the bounty referred to by the hon. Member for Greenock goes to the farmers. It goes to support the factory. One of the great crises in 1914, when War broke out, was our position with regard to sugar. We must be careful it does not recur again. These factories, especially that at Kelham, should be supported, but I am not anxious that they should be supported by further Government money. The great thing to consider is the shortage of sugar at the present time and that that shortage—it is about 50 per cent. down compared with 1914—may put a factory such as that at Kelham and Cantley in a position to make both ends meet. With regard to employment, I have always understood that the factory worked for only three months in the year. Perhaps the hon. Member for Norwich can inform us on that point?

    The sugar factory can work only three months of the year. It has to take the beet when it is ready, for beet deteriorates if kept. The factory, once started, works throughout the 24 hours for seven days a week, and, taking the number of hours worked, it is approximately an ordinary working week. Many endeavours have been made to utilise the factory in other parts of the year, but so far without success.

    We must realise that the total output of sugar beet in this country is only 1,850 tons, which is very low. We have been told that the factory has worked to only one-third of its capacity. I hope that the output will be increased, so as to reduce the cost, and possibly in that way a certain amount of the Government subsidy could be saved. At the same time I support, as far as I can, a scheme of this sort to get new industries established in this country, but, as I have stated, I am not very anxious that the Government should give financial support.

    In the ordinary course I would not have taken part in this Debate. The right hon. Member for Norwich (Mr. G. Roberts) has very frankly stated his position and has put the case in his usual able manner. It is only fair that the British refiners' point of view should be stated. There are one or two points in the speech of the right hon. Gentleman which I must controvert. He has spoken a great deal about the benefits to agriculture and the enormous number of men who have been or will be employed in the agricultural industry. But, surely to goodness, it is possible to employ a great many men in any industry if you are going to bolster up and subsidise that industry! It is not necessary to mention agriculture only. I personally confess to being one who wishes to protect British industry, if it can be done fairly. It is quite easy to give instances of many trades and industries where one could employ a great number of men, in addition to those already employed, if that trade or industry was subsidised. There are all the arguments on the other side, whether you do not lose more in one way than you gain in the other is another matter. I will leave that point. All of us want agriculture to prosper, and, speaking from the point of view of the British sugar refiners, I say we certainly do not want to put any spoke into the wheel of industry. The right hon. Member for Norwich said it was a mistake for hon. Members on this side of the House to think that Kelham and Cantley had already received any money from the Government. What he meant was, no doubt, that they had not received the enormous subsidy which is proposed by the Government to-day. But they have been receiving the preference and benefit of 6·;2¾d. per cwt. They have been receiving the preference which the Colonial is getting, and an additional 2s. 4d., so that altogether these Kelharn and Cantley factories have been in receipt of a benefit of 6s. 2d. per cwt. over their competitors, and in spite of this benefit they have not been able to make things pay. It is very unfortunate, but they have not been able to do it. This Amendment which we have put down limits them as to the quality of the sugar which they should turn out. It limits them to this extent, that they may turn out sugar of a polarisation of 97 only. The hon. Member for Stafford (Mr. Ormsby-Gore) asked why that figure had been selected. We do not put that figure as an absolutely rigid figure, but we want to prevent the British beet-sugar grower from getting a benefit of £25 13s. 4d. a ton over the British sugar refiner, and we had to put down some figure to mark the difference between raw and refined sugar. The hon. Member criticised the figure somewhat, but I have been looking up the figures in our own factories, and I find the polarisation of the raw sugar which we receive is between 95 and 96. I would be quite prepared to alter that figure of 97, but we deliberately put it high because we did not want to exclude any of the sugars which were coming over from the Colonies and from other parts. The right hon. Member for Norwich suggested that it would be a retrograde policy for any beet sugar factory not to go to the full length and produce white sugar. I entirely disagree with him. Previous to the War I do not think there were more than five factories in Germany and Austria which turned out white sugar. I admit that the position is different in France, but still it is not at all necessary to turn out white sugar, and I challenge contradiction on the point.

    We do not wish to put any spoke in the wheel of an infant industry. We should like to see the industry prosper, if it can be made to prosper as a commercial undertaking; but we do not think it fair or right to bolster up and to prop up an industry with the undreamed of protection of £25 13s. 4d. per ton. In the past we British sugar refiners had to fight the German bounty system, which gave a direct bounty on every ton of sugar they exported to this country, and we managed to survive it; but we would have been delighted if we had had protection to the extent of 6d. per cwt., and for a protection of 1s. per cwt. we would have thrown our hats into the air. These people have been getting, not 6d. or 1s. per cwt., but a protection of 6s. 2d. per cwt., and they have not been able to make it pay. Now they are not only to get the 6s. 2d. per cwt., but a protection of £25 13s. 2d. per ton, which is 25s. per cwt., something which absolutely flabbergasted everybody who heard it.

    No doubt this thing was entered into by the Government without full consideration of what it meant. If I may say so, with great respect, they did not understand the position, or perhaps they thought the Sugar Duty was going to come down, and the remission of the Excise Duty would not, in that case, have been the enormous concession which to-day it appears to be. As the Committee knows, it was announced in a speech by the Minister of Agriculture, who, probably, was not too well informed about it. He said the Government had decided, in view of the exceptional circumstances of the new industry, and of the position of unemployment in the country, that no Excise Duty should be charged to home-grown sugar. That was the first intimation we had of it, on 30th March. I really think he did not realise what he was saying when he was committing the Government to give £25 per ton protection. What is to be the position as to unemployment? Presumably, you are going to employ more people in agriculture and in the sugar-beet factories, which are going to turn out white sugar, but I say that for every man you put into a sugar-beet factory you are going to take away a man from the British sugar refineries. The British sugar refiner has been able, in the face of the sternest competition, to compete with his business rivals, and his is a business which—without wishing to blow one's own trumpet—is fairly efficiently managed. You are going to replace a man in that business by a man placed in a business which is highly speculative and which, even with a benefit of 6s. 2d. per cwt., has not been able to make its way.

    Many of us feel that the Government rushed into this question partly because they were pushed by the Minister of Agriculture and partly on unemployment. They did not quite realise what they were doing. Also, there are many of us who feel the Government are taking this action partly because they have already invested certain money in the business, and having done so, and having found it is not a paying business—not business which can stand on its own legs—they are going to throw good money after bad. From the strict point of view of the Amendment, we say that if you are going to protect this industry, if you are going to try and bolster it up, and if you think sugar beet growing can be undertaken in this country, give it protection, but do not do it at the expense of the old established industry of the British sugar refiner. We say it is a monstrous injustice to give them a protection of £25 a ton on white sugar, and we suggest in our Amendment a fairer method. I do not say that the figure 97 is a permanent and definite figure, but it is a good figure, and I should be prepared to defend it. If you are determined to give this enormous protection, we ask you to do it in a way that will not ruin an old business which is already established.

    I do not propose to enter into the wider field which has been opened up, but to devote myself entirely to the point which has been raised in the Amendment, and I hope another opportunity will come later on for other matters.

    I can only say to the right hon. Gentleman what I have said before, that we cannot have two discussions on the same subject. I could not allow a discussion on the question of Kelhana and Cantley to take place on the Clause after it has already taken place.

    I bow to your ruling. I shall say a word or two on the general question; but let me deal first of all with a matter raised by the Amendment. My hon. Friend who proposed the Amendment indicated in a very interesting speech that he was very anxious that nothing should be done to injure an infant industry. He was perfectly clear that, in principle, he had no objection whatever to what was proposed to be done, and the only topic which he raised was the particular interest of the refiners in this country as against the in- terests of the people who are managing this infant industry. His solicitude, I found, very rapidly disappeared, because the comments which he made revealed the fact that what he proposed to do would effectually kill this infant industry—as effectually as if nothing had been done to give it any help whatever. His proposal contained the suggestion that only sugar of a certain polarisation should be produced in these factories. My hon. Friend is very well aware that while the practice in past times may have had the result of producing only raw sugar in certain sugar factories, that modern practice. has gone—as one would have anticipated it would, having regard to the development of every other form of business—in favour of uniting the production of raw sugar with its refining.

    I challenge that statement. Of Austrian and German sugar-producing factories before the War, not more than five or six turned out white sugar.

    Of course, I bow to the superior knowledge of my hon. Friend in this business, but what he has said really only confirms what I have just stated, because in point of fact the tendency has been towards amalgamating these two processes, which can undoubtedly he carried on side by side. Whether that practice is right or wrong, it is enough for me to say that these two particular factories have been equipped with refining machinery as well as the machinery used for the production of raw sugar. It is impossible in their case to say that you can make it a paying business by confining them to the production of raw sugar. The capital charges which they have incurred by equipping their factories has made it absolutely impossible for them to carry on a profitable business if they produce only the raw sugar and do not proceed to refine it.

    Does the right hon. Gentleman know whether either of these two factories has a single particle of charcoal, or any charcoal plant? Are they in any sense equipped as refineries?

    I cannot answer my hon. Friend with regard to the details of the particular plant, but that they do produce refined sugar, I suppose, my hon. Friend will not deny, because the whole object of his Amendment is to compel the sugar they produce to be sent to refiners to be refined. The reason he is anxious to get this Amendment passed is that the refiners should get the business which at present is being done by these factories themselves.

    My hon. Friend should confine himself to the point I am at for the moment. The issue between us was whether these factories could produce refined sugar or not. I think I have demonstrated to the House—despite the anxiety of my hon. Friend who now seizes a different argument on which to reply—that they do produce refined sugar and are equipped for that production. It is impossible to say in that case that they can carry on a profitable business, if having put up plant for producing refined sugar, they have to start a process which falls short of that and then have to convey all their sugar to the refinery. The point made by the right hon. Member for Norwich (Mr. G. Roberts) is cogent and irresistible. By doing so they would not only forego the profit they could make on the refining, but they would add to their charges by conveying all the raw sugar to the factories by rail covering great distances.

    They have to convey the sugar when they are marketing it, but that is a totally different thing from sending the sugar a distance to be refined. I listened to my hon. Friend's speech and I would remind him that one does not advance one's arguments by interruption. What I desire to say is that undoubtedly this would enormously increase the charges to these factories not only by what they would have to forego, but also by the extra cost, which they would incur. The difficulties of their present position have already been made plain. A great part of the speech of my hon. Friend dealt with the fact that to-day they are working at a great, loss. What then is the fear that the refiners have that anything will be taken away from them by what they call the large subsidy at present being granted? In point of fact, it is not a subsidy at all it is only a remission of Excise Duty. There is no question at all as to the effect of this Amendment. If it is passed, then these factories are doomed as surely as if we gave them no aid whatever.

    I turned to the larger question which has been opened in the course of the Debate, but only for a moment, because the matter has been very thoroughly threshed out. This suggestion of a remission of Excise duty is by no means new. When the sugar beet industry in this country was first started, the Excise duty was remitted by a Liberal Government, which, as everyone knows, on these matters always gives the pure milk of the true economic word. The Excise duties were only put on in the year 1915, when Mr. McKenna was Chancellor of the Exchequer, because of the fact that under the Sugar Convention we were bound to impose them. Mr. McKenna, in dealing with the matter, stated that but for our obligations under the Convention he would not have thought it worth while to impose these charges. Now we are in a position in which nothing is to be gained by continuing them. If we exact these duties to-day it is as certain as that we are here that neither of these factories can carry on. Accordingly, the Exchequer has nothing to gain by exacting these Excise duties, because there would be nothing to come from these factories. I was approached by a very responsible deputation, representing both employers and workpeople connected with this industry, and it was very strongly urged upon me that unless this was done, and a concession granted to the extent to which the Government is proposing in this Clause, the industry would disappear. The Government had to consider what action they should take. It had been made perfectly plain that, so far as capacity to grow sugar beet is concerned, the soil of this country is in no way inferior to that of any other country. We had to consider whether, in these circumstances, there was any reason why this industry should not be a success in this country.

    It was pointed out that the growth of sugar beet has not only been a great cause of profit in connection with the sugar industry in Germany, but that it also had the effect of enormously advancing the farmers' profits. As the right hon. Member for Norwich has explained, having a sugar beet crop as one of the crops in rotation, not only has the effect of giving the farmer a profitable crop, but leaves in the ground elements which greatly enrich the soil and enables the farmer to get a better crop of cereals in the following year. These were considerations worthy of attention. Was there any reason why the manufacturers of sugar here should not be able to compete with the makers of sugar in Germany and Austria? So far as appears, there is no reason, except that in this country it is an infant industry and has not yet acquired the necessary experience to engage effectively in competition. It has the effect of employing a larger number of people on the land and of giving employment to the large number of people who go to these factories. Were we to forego these benefits, especially after we had made a start with the industry, and when it had been acquiring a certain amount of experience and had collected round it a number of men who had become practised in the operations of the industry? I think the Committee will agree with me we came to the right conclusion. I have no doubt that if my hon. and gallant Friend the Member for Leith (Captain W. Bonn) is going to speak after me upon this matter, he will give us some of the ancient shibboleths of the economic doctrine to which he adheres, as to the support and protection of industry. I would remind him that all the economists whom he professes to follow in the doctrine which he so often advances in this House, have made at least one exception in the case even of Protection, and that is with regard to infant industries. I would refer him in particular to a long and eloquent passage in John Stuart Mills' work on Political Economy, in which he sets forth the great advantages to be obtained from Protection by the State of an infant industry which has an opportunity of acquiring natural growth, and in the end standing upon its own feet. If this industry does not justify in the future that test, then undoubtedly it must cease to have the support of the State.

    At any rate, under present conditions, this is not the time to give up an industry which at least has made a promising start but has been hit by the extraordinary circumstances which have arisen in connection with the sugar industry in recent times. In particular this is not the time—if this industry has any chance for the future and has already so much capital embarked in it—to deprive people of employment until it is shown to demonstration that the industry is unfit to afford profitable employment in the future. Accordingly I ask the Committee to reject the Amendment.

    The right hon. Gentleman anticipated, as he thought, some arguments which I was to bring forward. I shall submit whatever arguments I have, in my own words to be judged by the Committee on their merits rather than on the prejudice which the right hon. Gentleman sought to import in advance. The right hon. Gentleman received a deputation from the employers and the employed in this industry pointing out that it would be a great advantage if they could receive a benefit from the State amounting to £25 per ton.

    The deputation which I received was not only from people immediately connected with the industry but was also representative of the whole agricultural industry of the country. It also represented agricultural labour as a whole and not merely to those employed in this particular industry.

    I should like to know what industry would not be prepared to get up a deputation to the Chancellor of the Exchequer if they thought they were going to get some remission of taxation. Of course, any industry would do so. Nobody doubts that an individual industry may benefit by some such measure as this, but the point is whether the public benefits in the way that private interests benefit. The right hon. Gentleman says this is an experiment. He says, first of all, that the duty imposed will yield no revenue, and, therefore, there is no harm in its remission. That is not an argument which he applies all round. There are many industries complaining that they cannot afford the taxation imposed upon them. They say they will perish, and some of them actually do perish, because of the taxation. But that makes no appeal to the heart of the Chancellor of the Exchequer. He says, "No, there is the duty; it has to be imposed, and if you cannot meet it you must go out of business." In the second place, he says that we should try this experiment for a certain number of years, and submit it to the test of time. What will his answer be when that test has been applied? We have had experiments of this sort tried before. The Motor Car Duty is a case in point. Immediately it begins to yield revenue the. Chancellor will come forward and say, "I am really not dealing with the general question of Protection, but this yield is a thing I cannot forego, owing to the needs of the Exchequer." Either there is no yield, and it is not worth while raising the question, or else there is a yield and he cannot forego the revenue. It is just another step in the Government's preconceived plan of a stealthy imposition of Protection in this country. [HON. MEMBERS: "Hear, hear."] Exactly. The hon. Member for East Birkenhead (Mr. Bigland) understands that perfectly well, and, of course, the Minister for Agriculture also understands it perfectly well. There is now a majority of Protectionists in the Cabinet, and they are striving in every way to impose a Protectionist system on this country. The only wonder to us is that they continue to receive the support of their so-called Free Trade followers and colleagues.

    The proposal to remit this Excise duty has already done a good deal to destroy that feeling of gratitude on which the scheme of Imperial Preference is supposed to be based. We know quite well that protests against the remission of the Excise duty have been received from producers in the Dominions who did not receive anything like the advantage which is about to be offered to small factories in this country. The right hon. Gentleman says we must have regard to the number of persons employed. Can he tell us, are there as many as 1,000 people employed in this industry? The number is said to be only 800 or 900. His argument was immediately devastated by the lion. Member for Stratford (Mr. Lyle), who pointed out that for every man you put into this failing and unsuccessful industry you have put a man out of work in a successful and prosperous industry. That is the story of Protection all round—supporting people who have not got the strength to support themselves and throwing out of work people who are in industries which can bring profit to this country. I should like to ask the Chancellor of the Exchequer some questions. The first is, who are the holders of the shares in the Kelham factory? Of course, it is these shareholders who will benefit. Are they British nationals at all? Are the majority of the shares held by British nationals, or it is true that the majority are still held, as they were a few months ago, by foreigners? Would it be right to say that 133,000 out of 140,000 shares are not in the possession of British subjects at all? Because it does seem rather a pity that, if we are going to give this enormous bounty on the ground of some inscrutable patriotism, the bounty should not come the way of people of this country. Would it be correct to say that part of the shares are actually held by Austrian aliens? Would it be correct to say that part of the £25 per ton is to he given to the Administrator of Austrian property in England? If so, what becomes of this plea that we must give this great bounty to foster an infant industry on which the future life of this country depends?

    Is it a fact that it is either this, or that the money, amounting to £325,000, which the Government have sunk in this commercial industry, is going the same way as that on celluloid and dyes, and all the other industries into which they have put the public money of this country? Is it true to say that if they do not get this bounty, the Board of Trade will be compelled to tell us that the 250,000 shares are worthless, that the taxpayer must find the 5 per cent. on the other 250,000 until 1930, and that the 125,000 second debentures which the Government hold are worthless? Is that the alternative? Is this really a sort of hotchpotch of ineffective protection, combined with a shrewd stroke of business on the part of the Government so as to make their experiment with public money appear more successful? If this be done for one industry, why not for other industries? My Noble Friend the Member for Aldershot (Viscount Wolmer), if I recollect, actually appealed for the remission of Excise Duty on home-grown tobacco. Why not? What fairness can there be in allowing yourself to be moved to make a concession with public money to so substantial an amount to one deputation, when I am perfectly certain the Noble Lord could bring just as influential a deputation on behalf of his plea? That brings me to the final argument against this. Either it is a small, weak and futile manœuvre, or else it is the beginning of a system of depending on this country to some large extent for our supply of sugar. If that be so, it seems to us that it is the beginning of the most offensive of all protective taxes, that is, a protective tax on food—in fact, it means that this is another step in the direction indicated by the Leader of the House when he said, referring to the policy of his distinguished father, who advocated food taxes, that the day was come when these taxes would be imposed.

    I would like to say a few words on this question of home-grown sugar. I would not have intervened, except that I do think this matter has been coloured, and made a very technical question, when it might be confined to two or three points. One is that it is of great advantage to agriculture. Last February I wrote to the Ministry of Agriculture for constituents of mine on behalf of this very industry. We have heard a great deal about the subsidy, but the Excise Duty on the value of the sugar has not been mentioned. I have the figures which, I believe, are perfectly correct. On one ton of sugar, valued at £27, the Government were receiving an Excise Duty of £19 8s. I do not think any commercial undertaking can possibly exist which has to pay a tax of £19 8s. on a value of £27. From the point of view of agriculture, this industry employs many agriculturists, who would be otherwise thrown out of work, from October to December. It is a particularly good crop for cleaning the land. Further than that, the Government were asked to invest money to re-establish industries, and they have invested Government money in these factories. Surely, then, it is rather bad business for the Government to ruin its own shares. I am not at all interested in any of these undertakings, but I think many Englishmen have invested their money from a patriotic motive, and it would be a mistake to cause them to lose money in that way.

    I am afraid that I am not quite so strict a Free Trader as my hon. and gallant Friend who sits beside me, and, therefore, I look at this matter primarily from an agricultural point of view [An HON. MEMBER: "A landlord's!"] I pre- fer to say "from an agricultural point of view," and from that point of view I have come to the conclusion that there is not a single argument to be said in favour of the Government on this matter. I have considered it as it has been laid before the Agricultural Committee and other bodies by deputations, and I have tried to understand it, and to justify this request from an infant industry for exceptional treatment. I think there was some justification for treating it exceptionally when it was in the very infantile stage, but I think that that stage is passing away, and, with the best will in the world, I have not been able to convince myself that it is justifiable for the Government to continue this policy, as they clearly do intend to continue it for some years more. They have said they intend to pursue this policy for five years more. I cannot for the life of me see the justification. Probably before I was able to be present here this afternoon, the facts have been stated as to why the industry claimed this exceptional treatment, and why it was they were not able to make a profit last year, and are therefore asking for bigger rebates this year. The arguments of those interested in the factories, I remember, were, first, that the workers were not yet really accustomed to the machinery, and could not get the best out of the plant; and, secondly, with regard to one of the factories, at any rate, the management had not been satisfactory. They brought over, I believe, a Frenchman or a Belgian, to show them how to do it, and he had not got on well with the workmen, and so on, and, what otherwise might have been a profit, had been converted into a loss. Those two arguments do not go very far with me. If those responsible were so foolish, from a business point of view, as to bring over a manager who did not understand how to get on with the workers, instead of sending an Englishman to learn the business over there so as to be able to handle the work here, it did not presage well for the future management, and I was led to believe that the machinery was of so complicated a nature, that with a full season's experience and more, they were not able to get workers sufficiently accustomed to it.

    The arguments, however, which make me come down very violently against the Government's proposal are not the ones I have mentioned. They are these: I do not believe that beet-sugar production will ever pay against cane-sugar production, without special subsidies, unless it be able to depend on a very favourable situation, which it can never have in this country. I do not believe there is an instance of a really successful beet-sugar production unless, for instance, it can depend on exceptionally cheap labour. I do not believe there is a single instance in Europe where beet sugar is being produced to compete with cane sugar on open and fair terms, unless it be in a special position for getting cheap labour. I believe that in the Western part of Europe production depends wholly on cheap labour, which comes forward to do the winter work in connection with the sugar industry, and that in Belgium and other countries there are workers and their families ekeing out an extraordinarily small livelihood from small holdings, who are accustomed to work in sugar factories at wages an Englishman would never look at, and never could be asked to take. Therefore, I do not believe this industry can ever be established on a non-subsidised basis. This Committee knows that it requires great discipline on the part of the farmers to make the industry go properly. This is not an easy crop to get out of the ground when the season is dry, and, therefore, every farmer will wait till the land is in a state of wetness to enable the crop to be raised easily, and the factory will be flooded with products at one period which suits the farmer. It is going to be an entirely difficult thing, with the tendency of English farmers to manage their own industry as best suits themselves, to get that evenness of deliveries throughout the winter season which has been ingrained in foreign farmers as a necessity, but which would be extremely difficult for English farmers to learn. It is not possible for those who support the Government proposal to point to beet sugar being a success anywhere where labour conditions are such as they are bound to be, and we wish to see in this country. Therefore, I am perfectly certain the industry will never be able to act in this country on a non-subsidised basis. If this is to be considered at all by this Committee, let it be considered frankly as a permanent matter of artificial subsidies, and do not let us have any camouflage about it being a temporary thing for three or four years, while the industry is getting on its legs. If it could really be proved that the industry in a few years could get going without help, it would be a different matter, but as I am certain this industry could never get on to a permanent non-subsidised basis, I am going to support the Amendment.

    6.0 P.M.

    I should like to endorse what the right hon. Gentleman the Member for Camborne (Mr. Aoland) has said. I think every Member of this Committee who served in France or Germany will be able to see the situation, and be able to give evidence in this matter. It is perfectly clear that at certain times of the year the cultivation of beet sugar requires labour conditions such as none of us in this Committee would like to see introduced into this country. It requires child labour on a very large scale, and it involves very long hours of work under very difficult conditions. I cannot, myself, see how, in a country like this, we are ever to compete against the cheap labour in Northern France and Belgium, and particularly that which comes from Poland and Russia into the German beet-sugar districts. In fact, I have had this whole matter out with those interested in this great industry—I am not referring to the hon. and gallant Member for Stratford (Mr. L. Lyle). The gentleman in question is one of the largest persons concerned in this trade, and he told me that the whole trouble in regard to the beet sugar industry in this country is that labour conditions would have to be accepted which no Englishman would accept for any long period. The hon. and gallant Member for Leith did not go quite far enough in what he said. He pointed out—I think quite rightly—that any benefit which was going to accrue, apart from the benefit of wages, from this policy of the Government would accrue to Dutchmen and other foreigners. He also pointed out that this was evidently an attempt to bolster up a really bad investment on the part of the Government. He pointed out—also quite justly—that this was not the first; but what, I think, he failed to point out was the failure of this policy: that in another notorious case, the case of the manufacture of dyes in this country, we had exactly the same typical form of legislation we are getting in this particular Clause. We passed the Dyestuffs (Import Regulations) Act, and when it became perfectly obvious that the taxpayers' money had been lost owing to the reckless gambling of those who put it into British dyes, then, in order to try to "boost" up that investment, and in order that the Chancellor of the Exchequer, who was then President of the Board of Trade, might say that the taxpayers' money had not been lost, and that we should be able to get out of this company with a 50 per cent. instead of a 75 per cent. loss, he came down to this House and introduced legislation just like this Clause in order to bolster up an industry in which he had wasted the taxpayers' money.

    Everybody in commercial circles knows perfectly well that it is quite impossible to realise the Government investments in the beet sugar factories, and that it is highly probable, as the hon. and gallant Member for Leith says, that we shall have to fulfil the guarantees which have been recklessly given over a long period. Now he comes, just as in the case of the Dyes Bill, trying to bolster up a company which is really on the rocks already, and to try to prove to the taxpayers that their money has not been squandered. When is this going to end? Are we to have legislation to prevent the farmers in this country from buying their phosphates from anywhere except Nauru? Are we to be told that nobody is to buy artificial silk except from that other magnificent company, the British Cellulose Company? Is a single farthing of the taxpayers' money which has been squandered in these reckless gambles to be returned to them as a result of the taxation of the whole population? The right hon. Gentleman knows perfectly well, and so does every Member of this House who is engaged in commercial concerns, that it is utterly impossible to realise our investments in cellulose, in British dyes, or in British beet sugar at the present time. I do think it would become the right hon. Gentleman if he got up and admitted once for all that he has lost our money for us, and not to attempt by excessive taxation in other directions to "boost up" the shares of industries in which he has lost that money.

    The last speaker addressed the House as if this proposal to remit the Excise Duty on sugar-beet had only reference to the two companies in question at the present time. It is a very broad proposal, and one in the highest interests of agriculture, and has as its main object the increasing of the arable land in this country. Did not the increased production of wheat and oats, which was the object of the Agriculture Act, receive the support of three-quarters of the House of Commons? Of course it did. We are quite forgetting what happened in the War and after. Most of us then came to the conclusion that it was in the highest interests of this country to encourage the production of wheat, and to keep land which was under the plough under the plough, and to get more under the plough if we could procure it. We are starting to grow sugar beet, and it will surely have some effect in this country, in the direction I have indicated, if it is as successful, as I believe it will be, as it is in Germany. Germany attributes much of her success in agriculture and in increasing her cereal crops as do the other European countries from growing the sugar beet. That is the main object of this proposal. The right hon. Gentleman talked about labour. It is not only labour in factories. It is labour on the land that will be employed, labour which growing beet occasions, and it will be of the greatest advantage to the small people whom we have set up since the War. They have a, ready market with cash sales for a root crop, and they look forward to better cereal crops afterwards. I only rise to remind the Committee that this has nothing to do with those two particular factories. This is done to fulfil the intention and policy of the Government as expressed also in this House to increase the producttion of wheat throughout the country.

    Division No. 156.]

    AYES.

    [6.11 p.m.

    Acland, Rt. Hon. Francis D.Foot, IsaacHolmes, I Stanley
    Ammon, Charles GeorgeGalbraith, SamuelJohn, William (Rhondda, West)
    Armitage, RobertGanzoni, Sir JohnKenworthy, Lieut.-Commander J. M.
    Barton, Sir William (Oldham)Gillis, WilliamKiley, James Daniel
    Bowerman, Rt. Hon. Charles W.Graham, W. (Edinburgh, Central)Lawson, John James
    Bramsdon, Sir ThomasGuest, J. (York, W. R., Hemsworth)Lister, Sir R. Ashton
    Brian), FrankHall, F. (York, W.R., Normanton)Loseby, Captain C. E.
    Brown, James (Ayr and Bute)Hallas, EldredLunn, William
    Cairns, JohnHalls, WalterLyle-Samuel, Alexander
    Carter, W. (Nottingham, Mansfield)Harmsworth, Hon. E. C. (Kent)Maclean, Nell (Glasgow, Govan)
    Cowan, D. M. (Scottish Universities)Hartshorn, VernonMurray, Dr. D. (Inverness & Ross)
    Davies, A. (Lancaster, Clitheroe)Hayday, ArthurMurray, Hon. Gideon (St. Rollox)
    Davies, Rhys John (Westhoughton)Hayward, EvanMurray, John (Leeds, West)
    Davies, Sir William H. (Bristol, S.)Henderson, Rt. Hon. A. (Widnes)Myers, Thomas
    Dawson, Sir PhilipHenderson, Lt.-Col. V. L. (Tradeston)Nall, Major Joseph
    Doyle, N. GrattanHodge, Rt. Hon. JohnNewbould, Alfred Ernest
    Finney, SamuelHogge, James MylesO'Grady, Captain James

    I think somebody at this time, some supporter of the Government., ought to get up and make a protest. Last night I came into the House with the intention of supporting the Government, but a Protectionist speech by the Solicitor-General sent me out of the House. This afternoon I come here and I hear what is advocated by the Chancellor of the Exchequer on the ground of the protection of a small industry. I will not go into details, but it is really an absolute Protectionist proposition. I agree with the right hon. Gentleman the Member for Camborne (Mr. Acland), who stated the agricultural point of view. We have heard other agricultural points of view. I have seen attempts to grow sugar in my neighbourhood in Suffolk, where it was attempted to put down a factory a great many years ago. That factory is now being pulled down. The experiment has been tried over and over again. It is not a nascent industry which is being tried in this country. It has been tried for more than 20 or 30 years, and has always failed. I do not believe it will he any remedy for agriculture. I know cultivation of these crops necessitates cheap labour; not in the factories, but cheap labour on the farms, and that is what we do not want to see. If it is only going to resuscitate underfed and underpaid men in agriculture, it is not the sort of industry this country should support. I am against any sort of contribution from the Government to any industry, because I am still a believer in Free Trade.

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

    The Committee divided: Ayes, 80; Noes, 274.

    Ormsby-Gore, Hon. WilliamShaw, Thomas (Preston)Waterson, A. E.
    Parkinson, John Allen (Wigan)Shaw, William T. (Forfar)Watts-Morgan, Lieut.-Col. D.
    Poison, Sir Thomas A.Short, Alfred (Wednesbury)White, Charles F. (Derby, Western)
    Rae, Sir Henry N.Smith, Sir Harold (Warrington)Williams, Aneurlin (Durham, Consett)
    Raffan, Peter WilsonSpoor, B. G.Williams, Col. P (Middlesbrough, E.)
    Rees, Capt. J. Tudor- (Barnstaple)Sueter, Rear-Admiral Murray FraserWintringham, Margaret
    Rendall, AthelstanSutton, John EdwardWood, Major M. M. (Aberdeen, C.)
    Robertson, JohnTillett, Benjamin
    Rodger, A. K.Wallace, J.

    TELLERS FOR THE AYES.—

    Rose, Frank H.Walsh. Stephen (Lancaster, Ince)Mr. Hannon and Mr. Leonard Lyle.
    Shaw, Hon. Alex. (Kilmarnock)Warner, Sir T. Courtenay T.

    NOES.

    Adamson, Rt. Hon. WilliamEdwards, Allen C. (East Ham, S.)Lorden, John William
    Agg-Gardner, Sir James TynteElveden, ViscountLowther, Major C. (Cumberland, N.)
    Amery, Rt. Hon. Leopold C. M. S.Evans, ErnestM'Donald, Dr. Bauverie F. P.
    Archer-Shee, Lieut.-Colonel MartinEyres-Monsell, Com. Bolton M.Mackinder, Sir H. J. (Camlachie)
    Armstrong, Henry BruceFalcon, Captain MichaelMcLaren, Robert (Lanark, Northern)
    Ashley, Colonel Wilfrid W.Falle, Major Sir Bertram GodfreyMc-Lean, Lieut.-Col. Charles W. W.
    Atkey, A. R.Farquharson, Major A. C.Macleod, J. Mackintosh
    Baird, Sir John LawrenceFell, Sir ArthurMcNeill, Ronald (Kent, Canterbury)
    Balfour, George (Hampstead)FitzRoy, Captain Hon. Edward A.Macpherson, Rt. Hon. James I.
    Banbury, Rt. Hon. Sir Frederick G.Ford, Patrick JohnstonMacquisten, F. A.
    Banner, Sir John S. Harmood-Foreman, Sir HenryMagnus, Sir Philip
    Barlow, Sir MontagueForestier-Walker, L.Mailalleu, Frederick William
    Barnes, Rt. Hon. G. (Glas., Gorbals)Forrest, WalterMarriott, John Arthur Ransome
    Barnett, Major Richard W.Foxcroft, Captain Charles TalbotMiddlebrook, Sir William
    Barnston, Major HarryFraser, Major Sir KeithMildmay, Colonel Rt. Hon. F. S.
    Barrand, A. R.Frece, Sir Walter deMolson, Major John Elsdale
    Bartley-Denniss, Sir Edmund RobertFremantle, Lieut.-Colonel Francis E.Moreing, Captain Algernon H.
    Beauchamp, Sir EdwardGardner, ErnestMorrison, Hugh
    Beckett, Hon. GervaseGee, Captain RobertMorrison-Bell, Major A. C.
    Bell, Lieut.-Col. W. C. H. (Devizes)Gibbs, Colonel George AbrahamMunro, Rt. Hon. Robert
    Bellairs, Commander Canyon W.Gilmour, Lieut.-Colonel Sir JohnMurchison, C. K.
    Benn, Capt. Sir I. H., Bart.(Genw'h)Glanville, Harold JamesMurray, Rt. Hon. C. D. (Edinburgh)
    Bennett, Sir Thomas JewellGlyn, Major RalphNeal, Arthur
    Betterton, Henry B.Goff, Sir R. ParkNewman, Colonel J. R. P. (Finchley)
    Bigland, AlfredGoulding, Rt. Hon. Sir Edward A.Newton, Sir Percy Wilson
    Birchall, J. DearmanGreen, Joseph F. (Leicester, W.)Newton, Sir D. G. C. (Cambridge)
    Bird, Sir William B. M. (Chichester)Greene, Lt.-Col. Sir W. (Hack'y. N.)Nicholl, Commander Sir Edward
    Blair, Sir ReginaldGreer, Sir HarryNicholson, Brig.-Gen. J. (Westminster)
    Blake, Sir Francis DouglasGreig, Colonel Sir James WilliamNicholson, William G. (Petersfield)
    Borwick, Major G. O.Guest, Capt. Rt. Hon. Frederick E.Norris, Colonel Sir Henry G.
    Boscawen, Rt. Hon. Sir A. Griffith-Guinness, Lieut.-Col. Hon. W. E.Oman, Sir Charles William C.
    Bowles, Colonel H. F.Gwynne, Rupert S.Parker, James
    Bowyer, Captain G. W. E.Hacking, Captain Douglas H.Parry, Lieut.-Colonel Thomas Henry
    Brassey, H. L. C.Hamilton, Sir George C.Pearce, Sir William
    Breese, Major Charles E.Harmsworth, C. B. (Bedford, Luton)Pease, Rt. Hon. Herbert Pike
    Bridgeman, Rt. Hon. William CliveHarris, Sir Henry PercyPeel, Col. Hn. S. (Oxbridge, Mddx.)
    Briggs, HaroldHennessy, Major J. R. G.Pennefather, De Fonblanque
    Broad, Thomas TuckerHerbert Dennis (Hertford, Watford)Percy, Lord Eustace (Hastings)
    Brown, Brig.-Gen. H. C. (Newbury)Finder, Lieut.-Colonel FrankPerkins, Walter Frank
    Buckley, Lieut.-Colonel A.Hills, Major John WallerPerring, William George
    Bull, Rt. Hon. Sir William JamesHinds, JohnPhilipps, Gen. Sir I. (Southampton)
    Burdon, Colonel RowlandHoare, Lieut.-Colonel Sir S. J. G.Philipps, Sir Owen C. (Chester, City)
    Burgoyne, Lt.-Col. Sir Alan HughesHohler, Gerald FitzroyPickering, Colonel Emil W.
    Burn, Col. C. R. (Devon, Torquay)Hood, Sir JosephPilditch, Sir Philip
    Butcher, Sir John GeorgeHope, Sir H.(Stirling & Cl'ckm'nn,W.)Pollock, Rt. Hon. Sir Ernest Murray
    Campion, Lieut.-Colonel W. R.Hope, Lt.-Col. Sir J. A. (Midlothian)Pownall, Lieut.-Colonel Assheton
    Carr, W. TheodoreHope, J. D. (Berwick & Haddington)Pretyman, Rt. Hon. Ernest G.
    Carter, R. A. D. (Man., Withington)Hopkins, John W. W.Purchase, H. G.
    Chamberlain, Rt. Hn. J, (Birm, W.)Horne, Sir R. S. (Glasgow, Hillhead)Raeburn, Sir William H.
    Cheyne, Sir William WatsonHunter, General Sir A. (Lancaster)Rankin, Captain James Stuart
    Child, Brigadier-General Sir HillHurst, Lieut.-Colonel Gerald B.Ratcliffe, Henry Butler
    Churchman, Sir ArthurInskip, Thomas Walker H.Raw, Lieutenant-Colonel Dr. N.
    Clay, Lieut.-Colonel H. H. SpenderJackson, Lieut.-Colonel Hon. F. S.Rawlinson, John Frederick Peel
    Clough, Sir RobertJames, Lieut.-Colonel Hon. CuthbertReid, D. D.
    Clynes, Rt. Hon. John R.Jephcott. A. R.Remer, J. R.
    Coats, Sir StuartJesson, C.Remnant, Sir James
    Cobb, Sir CyrilJones, Sir Evan (Pembroke)Richardson, Sir Alex. (Gravesend)
    Cockerill, Brigadier-General G. K.Jones, G. W. H. (Stoke Newington)Richardson, Lt.-Col. Sir P. (Chertsey)
    Cohen, Major J. BrunelJones, Henry Haydn (Merioneth)Richardson, R. (Houghton-le-Spring)
    Colfox, Major Wm. PhillipsKelley, Major Fred (Rotherham)Roberts, Rt. Hon. G. H. (Norwich)
    Conway, Sir W. MartinKidd, JamesRobinson, S. (Brecon and Radnor)
    Cope, Major WilliamKing, Captain Henry DouglasRobinson, Sir T. (Lancs., Stretford)
    Crack, Rt. Hon. Sir HenryLambert, Rt. Hon. GeorgeRothschild, Lionel de
    Curzon, Captain ViscountLane-Fox, G. R.Roundell, Colonel R. F.
    Dalziel, Sir D. (Lambeth, Brixton)Larmor, Sir JosephRoyce, William Stapleton
    Davidson. J. C. C. (Hemel Hempstead)Law, Alfred J. (Rochdale)Royds, Lieut.-Colonel Edmund
    Davies, Thomas (Cirencester)Leigh, Sir John (Clapham)Rutherford, Colonel Sir J. (Darwen)
    Davison, Sir W. H. (Kensington, S.)Lewis, Rt. Hon. J. H. (Univ., Wales)Samuel, A. M. (Surrey, Farnham)
    Dean, Commander P. T.Lindsay, William ArthurSamuel, Samuel (W'dsworth, Putney)
    Dewhurst, Lieut.-Commander HarryLloyd, George ButlerSanders, Colonel Sir Robert Arthur
    Du Pre, Colonel William BaringLocker-Lampson, G. (Wood Green)Sassoon, Sir Philip Albert Gustave D.
    Edge, Captain Sir WilliamLocker-Lampson, Com. O. (H'tingd'n)Scott, A.M. (Glasgow, Bridgeton)

    Scott, Sir Leslie (Liverp'l, Exchange)Townley, Maximillan G.Wilson, Col. M. J. (Richmond)
    Seddon, J. A.Tryon, Major George ClementWindsor, Viscount
    Seely, Major-General Rt. Hon. JohnTurton, Edmund RussboroughWinfrey, Sir Richard
    Sharman-Crawford, Robert G.Waddington, R.Winterton, Earl
    Simm, M. T.Walters, Rt. Hon. Sir John TudorWise, Frederick
    Smith, Sir Allan M. (Croydon, South)Walton, J. (York, W, R., Don Valley)Wolmer, Viscount
    Sprot, Colonel Sir AlexanderWard-Jackson, Major C. L.Wood, Hon. Edward F. L. (Ripon)
    Stanley, Major Hon. G. (Preston)Ward, Col. J. (Stoke-upon-Trent)Wood, Sir J. (Stalybridge & Hyde)
    Stanton, Charles ButtWard, Col. L. (Kingston-upon-Hull)Wood, Major Sir S. Hill (High Peak)
    Starkey, Captain John RalphWaring, Major WalterWoolcock, William James U.
    Steel, Major S. StrangWedgwood, Colonel Josiah C.Worthington-Evans, Rt. Hon. Sir L.
    Stephenson, Lieut.-Colonel H. K.Weston, Colonel John WakefieldYate, Colonel Sir Charles Edward
    Stewart, GershomWheler, Col. Granville C. H.Young, Sir Frederick W. (Swindon)
    Sugden, W. H.White, Col. G. D. (Southport)Young, Robert (Lancaster, Newton)
    Sutherland, Sir WilliamWignall, JamesYoung, W. (Perth & Kinross, Perth)
    Swan, J. E.Williams, C. (Tavlstock)Younger, Sir George
    Taylor, J.Willoughby, Lieut.-Col. Hon. Claud
    Terrell, George (Wilts, Chippenham)Wills, Lt,-Col. Sir Gilbert Alan H.

    TELLERS FOR THE NOES.—

    Thomson, F. C. (Aberdeen, South)Wilson, Field-Marshal Sir HenryColonel Leslie Wilson and Mr.
    Thomson, Sir W. Mitchell (Maryhill)Wilson, Rt. Hon. J. W. (Stourbridge)Dudley Ward.
    Tickler, Thomas GeorgeWilson, Lt.-Col. Sir M. (Bethnal Gn.)

    I beg to move, in Subsection (2) after the word "paid" ["upon which no duty has been paid"] to insert the words:

    "and also, with a view in the case of non-dutiable sugar and molasses entering a refinery working in bond, that no duty shall be paid on delivery on such non-dutiable sugar or its equivalent."
    I am moving this Amendment in order to help the Chancellor of the Exchequer.

    Perhaps the hon. Member will allow me to point out that the object of this Amendment is already provided for in Sub-section (3) of the Clause.

    Division No. 157.]

    AYES.

    [6.25 p.m.

    Agg-Gardner, Sir James TynteBrown. Brig.-Gen. H. C. (Newbury)Falcon, Captain Michael
    Amery, Rt. Hon. Leopold C. M. S.Buckley. Lieut.-Colonel A.Falle, Major Sir Bertram Godfray
    Archer-Shee, Lieut.-Colonel MartinBull, Rt. Hon. Sir William JamesFarquharson, Major A. C.
    Armstrong, Henry BruceBurdon, Colonel RowlandFell, Sir Arthur
    Ashley, Colonel Wilfrid W.Burgoyne, Lt.-Col. Sir Alan HughesFitzRoy, Captain Hon. Edward A.
    Alkey, A. R.Burn, Col. C. R. (Devon, Torquay)Ford, Patrick Johnston
    Baird, Sir John LawrenceButcher, Sir John GeorgeForeman, Sir Henry
    Balfour, George (Hampstead)Carr, W. TheodoreForestier-Walker, L.
    Banbury, Rt. Hon. Sir Frederick G.Carter, R. A. D. (Man., Withington)Forrest, Walter
    Banner, Sir John S. Harmood-Cecil, Rt. Hon. Sir Evelyn (Aston)Foxcroft, Captain Charles Talbot
    Barlow, Sir MontagueChamberlain, Rt. Hon. J. A.(Birm.,W.)Fraser, Major Sir Keith
    Barnes, Rt. Hon. G. (Glas., Gorbals)Cheyne, Sir William WatsonFrece, Sir Walter de
    Barnett, Major Richard W.Child, Brigadier-General Sir HillFremantle, Lieut.-Colonel Francis E.
    Barnston, Major HarryChurchman, Sir ArthurGanzoni, Sir John
    Barrand, A. R.Clay, Lieut.-Colonel H. H. SpenderGardner, Ernest
    Barrie, Sir Charles Coupar (Banff)Clough, Sir RobertGee, Captain Robert
    Bartley-Denniss, Sir Edmund RobertCoats, Sir StuartGibbs, Colonel George Abraham
    Beauchamp, Sir EawardCobb, Sir CyrilGilmour, Lieut.-Colonel Sir John
    Beckett, Hon. GervaseCockerill, Brigadier-General G. K.Glyn, Major Ralph
    Bell, Lieut.-Col. W. C. H. (Devizes)Cohen, Major J. BrunelGoff. Sir R. Park
    Bellairs, Commander Canyon W.Colfox, Major Win, PhillipsGoulding, Rt. Hon. Sir Edward A.
    Benn. Capt. Sir I. Bart. (Gr'nw'h)Conway, Sir W. MartinGreen, Joseph F. (Leicester, W.)
    Bennett, Sir Thomas JewellCrack, Rt. Hon. Sir HenryGreene, Lt.-Col. Sir W. (Hack'y, N.)
    Betterton, Henry B.Curzon, Captain ViscountGreer, Sir Harry
    Bigland, AlfredDalziel, Sir D. (Lambeth, Brixton)Greig, Colonel Sir James William
    Birchall, J. DearmanDavidson, J. C. C. (Hemel Hempstead)Guest, Capt. Rt. Hon. Frederick E.
    Bird, Sir William B. M. (Chichester)Davidson, Major-General Sir J. H.Guinness, Lieut.-Col. Hon. W. E.
    Blair, Sir ReginaldDavies, Thomas (Cirencester)Hacking, Captain Douglas H.
    Blake, Sir Francis DouglasDavison, Sir W. H. (Kensington, S.)Hall, Rr-Admi Sir W. (Llv'p'1,W. D'by)
    Barwick, Major G. ODawson, Sir PhilipHamilton, Sir George C.
    Boscawen, Rt. Hon. Sir A. Griffith-Dewhurst, Lieut.-Commander HarryHarmsworth, C. B. (Bedford, Luton)
    Bowles. Colonel H. F.Doyle, N. GrattanHarmsworth, Hon. E. C. (Kent)
    Bowyer, Captain G. W. E.Du Pre, Colonel William BaringHarris, Sir Henry Percy
    Braseey, H. L. CEdge, Captain Sir WilliamHennessy, Major.J. R. G.
    Breese, Major Charles E.Elveden, ViscountHerbert, Dennis (Hertford, Watford)
    Bridgeman, Rt. Hon. William CliveEvans, ErnestHilder, Lieut.-Colonel Frank
    Briggs. HaroldEyres-Monsell, Corn. Bolton M.Hills, Major John Waller

    I have an Amendment to move in the shape of a new Clause to repeal the whole of the Sugar Duty take this opportunity of rising now to intimate that when the new Clauses are taken I wish to state my reasons why the Sugar Duty should be repealed.

    After what the Chancellor of the Exchequer has just stated I ask leave to withdraw my Amendment.

    Amendment, by leave, withdrawn.

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

    The Committee divided: Ayes, 267; Noes, 88.

    Hoare, Lieut.-Colonel Sir S. J. G.Nicholson, Brig.-Gen. J. (Westminster)Sprot, Colonel Sir Alexander
    Hohler, Gerald FitzroyNicholson, Reginald (Doncaster)Stanley, Major Hon. G. (Preston)
    Hood, Sir JosephNicholson, William G. (Petersfield)Stanton, Charles Butt
    Hope, Sir H. (Stirling & C'ckm'nn'n,W.)Norris, Colonel Sir Henry G.Starkey, Captain John Ralph
    Hope, Lt.-Col. Sir J. A. (Midlothian)Oman, Sir Charles William C.Steel, Major S. Strang
    Hope, J. D. (Berwick & Haddington)Parker, JamesStephenson, Lieut.-Colonel H. K.
    Hopkins, John W. W.Parry, Lieut.-Colonel Thomas HenryStewart, Gershom
    Horne, Sir R. S. (Glasgow, Hillhead)Pearce, Sir WilliamSturrock, J. Leng
    Hunter, General Sir A. (Lancaster)Pease, Rt. Hon. Herbert PikeSueter, Rear-Admiral Murray Fraser
    Hurst, Lieut.-Colonel Gerald B.Peel, Col. Hn. S. (Uxbridge, Mddx.)Sugden, W. H.
    Inskip, Thomas Walker H.Pennefather, De FonblanqueSutherland, Sir William
    Jackson, Lieut.-Colonel Hon. F. S.Percy, Lord Eustace (Hastings)Taylor, J.
    James, Lieut.-Colonel Hon. CuthbertPerkins, Walter FrankTerrell, George (Wilts, Chippenham)
    Jephcott, A. R.Perring, William GeorgeThomson, F. C. (Aberdeen, South)
    Jesson, C.Philipps, Gen. Sir I. (Southampton)Thomson, Sir W. Mitchell (Maryhill)
    Jones, Sir Evan (Pembroke)Philipps, Sir Owen C. (Chester, City)Tickler, Thomas George
    Jones, G. W. H. (Stoke Newington)Pickering, Colonel Emil W.Townley, Maximilian G.
    Kelley, Major Fred (Rotherham)Pilditch, Sir PhilipTryon, Major George Clement
    Kidd, JamesPollock, Rt. Hon. Sir Ernest MurrayTurton, Edmund Russborough
    King, Captain Henry DouglasPolson, Sir Thomas A.Waddington, R.
    Lane-Fox, G. R.Pownall, Lieut.-Colonel AsshetonWalters, Rt. Hon. Sir John Tudor
    Larmor, Sir JosephPretyman, Rt. Hon. Ernest G.Walton, J. (York, W. R., Don Valley)
    Law, Alfred J. (Rochdale)Purchase, H. G.Ward-Jackson, Major C. L.
    Lewis, Rt. Hon. J. H. (Univ., Wales)Raeburn, Sir William H.Ward, Col. J. (Stoke-upon-Trent)
    Lister, Sir R. AshtonRandies, Sir John ScurrahWard, Col. L. (Kingston-upon-Hull)
    Lloyd, George ButlerRankin, Captain James StuartWaring, Major Walter
    Locker-Lampoon, G. (Wood Green)Ratcliffe, Henry ButlerWarner, Sir T. Courtenay T.
    Lorden, John WilliamRaw, Lieutenant-Colonel Dr. N.Weston, Colonel John Wakefield
    Lowther, Major C. (Cumberland, N.)Rawlinson, John Frederick PeelWheler, Col. Granville C. H.
    M'Donald, Dr. Bouverie F. P.Reid, D. D.White, Col. G. D. (Southport)
    Mackinder, Sir H. J. (Camlachie)Ramer, J. R.Williams, C. (Tavistock)
    McLaren, Robert (Lanark, Northern)Remnant, Sir JamesWilloughby, Lieut.-Col. Hon. Claud
    M'Lean, Lieut.-Col. Charles W. W.Richardson, Sir Alex. (Gravesend)Wills, Lt.-Col. Sir Gilbert Alan H.
    Macleod, J. MackintoshRichardson, Lt.-Col. Sir P. (Chertsey)Wilson, Field-Marshal Sir Henry
    McNeill, Ronald (Kent, Canterbury)Roberts, Rt. Hon. G. H. (Norwich)Wilson, Lt-Col. Sir M. (Bethnal Gn.)
    Macpherson, Rt. Hon. James I.Rothschild, Lionel deWindsor, Viscount
    Macquisten, F. A.Roundell, Colonel R. F.Winfrey, Sir Richard
    Magnus, Sir PhilipRoyds, Lieut.-Colonel EdmundWinterton, Earl
    Marriott, John Arthur RansomeRutherford, Colonel Sir J. (Darwen)Wise, Frederick
    Middlebrook, Sir WilliamRutherford, Sir W. W. (Edge Hill)Wolmer, Viscount
    Mildmay, Colonel Rt. Hon. F. B.Samuel, A. M. (Surrey, Farnham)Wood, Hon. Edward F. L. (Ripon)
    Molson, Major John ElsdaleSamuel, Samuel (W'dsworth, Putney)Wood, Sir J. (Stalybridge & Hyde)
    Moreing, Captain Algernon H.Sanders, Colonel Sir Robert ArthurWood, Major Sir S. Hill (High Peak)
    Morrison, HughSassoon, Sir Philip Albert Gustave D.Woolcock, William James U.
    Morrison-Bell, Major A. C.Scott, A. M. (Glasgow, Bridgeton)Worthington-Evans, Rt. Hon. Sir L.
    Munro, Rt. Hon. RobertScott, Sir Samuel (St. Marylebone)Yate, Colonel Sir Charles Edward
    Murchison, C. K.Seddon, J. A.Young, Sir Frederick W. (Swinden)
    Murray, Rt. Hon. C. D. (Edinburgh)Seely, Major-General Rt. Hon. JohnYoung, W. (Perth & Kinross, Perth)
    Neal, ArthurShaw, William T. (Forfar)Younger, Sir George
    Newman, Colonel J. R. P. (Finchley)Shortt, Rt. Hon. E. (N'eastie-on-T.)
    Newson, Sir Percy WilsonSimm, M. T.

    TELLERS FOR THE AYES.—

    Newton, Sir D. G. C. (Cambridge)Smith, Sir Allan M. (Croydon, South)Colonel Leslie Wilson and Mr.
    Nicholl, Commander Sir EdwardSmith, Sir Harold (Warrington)Dudley Ward.

    NOES.

    Acland, Rt. Hon. Francis D.Halls, WalterRae, Sir Henry N.
    Adamson, Rt. Hon. WilliamHannon, Patrick Joseph HenryRattan, Peter Wilson
    Ammon, Charles GeorgeHartshorn, VernonRees, Capt. J. Tudor (Barnstaple)
    Armitage, RobertHayday, ArthurRendall, Athelstan
    Asquith, Rt. Hon. Herbert HenryHayward, EvanRichardson, R. (Houghton-le-Spring)
    Barton, Sir William (Oldham)Henderson, Rt. Hon. A. (Wldnes)Robertson, John
    Benn, Captain Wedgwood (Leith)Henderson, Lt-Col. V. L. (Tradeston)Robinson, S. (Brecon and Radnor)
    Bentinck, Lord Henry Cavendish-Hinds, JohnRose, Frank H.
    Bowerman, Rt. Hon. Charles W.Hodge, Rt. Hon. JohnShaw, Thomas (Preston)
    Bramsdon, Sir ThomasHogge, James MylesShort, Alfred (Wednesbury)
    Briant, FrankHolmes, J. StanleySpoor, B. G.
    Broad, Thomas TuckerHopkinson, A. (Lancaster, Mossley)Sutton, John Edward
    Brown, James (Ayr and Bute)John, William (Rhondda, West)Swan. J. E.
    Cairns, JohnJones, Henry Haydn (Merioneth)Tillett, Benjamin
    Carter, W. (Nottingham, Mansfield)Kenworthy, Lieut.-Commander J. M.Walsh, Stephen (Lancaster, Ince)
    Cecil, Rt. Hon. Lord R. (Hitchin)Kiley, James DanielWaterson, A. E.
    Clynes, Rt. Hon. John R.Lawson, John JamesWatts-Morgan, Lieut.-Col. D.
    Cowan, D. M. (Scottish Universities)Lunn, WilliamWedgwood, Colonel Josiah C.
    Davies, A. (Lancaster, Ciltheroe)Lyle, C. E. LeonardWhite, Charles F. (Derby, Western)
    Davies, Rhys John (Westhoughton)Lyle-Samuel, AlexanderWignall, James
    Davies, Sir William H. (Bristol, S.)Macdonald, Rt. Hon. John MurrayWilliams, Aneurin (Durham, Consett)
    Finney, SamuelMaclean, Nell (Glasgow, Govan)Williams, Col. P. (Middlesbrough, E.)
    Foot, IsaacMaclean, Rt. Hn. Sir D. (Midlothian)Wilson, Rt. Hon. J. W. (Stourbridge)
    Galbraith, SamuelMallalieu, Frederick WilliamWintringham, Margaret
    Gillis, WilliamMurray, Hon. A. C. (Aberdeen)Wood, Major M. M. (Aberdeen, C.)
    Glanville, Harold JamesMurray, John (Leeds, West)Young, Robert (Lancaster, Newton)
    Graham, D. M. (Lanark, Hamilton)Myers, Thomas
    Graham, W. (Edinburgh, Central)Nall, Major Joseph

    TELLERS FOR THE NOES.—

    Guest, J. (York, W. R., Hemsworth)Newbould, Alfred ErnestSir Godfrey Collins and Dr.
    Hall, F. (York, W. R., Normanton)O'Grady, Captain JamesMurray.
    Hallas, EldredParkinson, John Alien (Wigan)

    Clause 7—(Excise Licence Not Required For Sale Of Certain Liquor)

    An excise licence shall not be required for the sale in Great Britain, whether wholesale or retail, of any liquor which, whether made on the licensed premises of a brewer of beer for sale or elsewhere, is found, on analysis of a sample thereof at any time, to be of an original gravity not exceeding one thousand and sixteen degrees and to contain not more than two per cent. of proof spirit.

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

    I beg to ask the Chancellor of the Exchequer what kind of liquor is referred to in this Clause, and why any change in the law is necessary in this respect?

    I also wish to put a. question on this point. Some time ago a gentleman invented a process for the manufacture of a liquor, something like strong beer, from which he extracted the alcohol, selling the remainder as a temperance drink. I think it was a successful experiment, but, for some reason or other, the Excise authorities shut the business down and would not allow the liquor to be brewed in the brewery. Is this Clause intended to be a reversal of that policy?

    The object of this Clause is to enable certain categories of liquor manufactured in a brewery to be sold on premises where no excise licence is required. It puts the liquor on exactly the same footing as similar liquor manufactured outside a brewery.

    Question put, and agreed to.

    Clause S—(Exemption Of Certain Compound Articles From Duty Under 11 & 12 Geo 5, C 47)

    Where the Treasury after consultation with the Board of Trade are satisfied as respects any article which is liable to duty under the Safeguarding of Industries Act, 1921, by reason only that some ingredient or part of the article is liable to duty under that Act, that it is inexpedient, having regard to the nature of that ingredient or part and to the smallness of its value in comparison with the total value of the article, that duty should be charged under that Act, the Treasury may by order exempt that article from duty under the said Act.

    I beg to move to leave out the words

    "having regard to the nature of that ingredient or part and to the smallness of its value in comparison with the total value of the article."
    This Clause enables the Treasury practically to reverse the Safeguarding of Industries Act. It gives them a power which we, naturally, on this side of the House want to see them exercise, but it only gives them that power in certain specified cases, and the object of my Amendment is to widen the powers of the Treasury and to enable them to reverse the Act of Parliament with greater facility and frequency than is possible at the present time. In moving this Amendment I am torn between the natural instinct of objecting to a Government Bill and a real desire to help the Government out of a hole. The Government, for good or ill, passed this Safeguarding of Industries Act. They have since found it to be in. convenient even in the privacy of their own Cabinet, and they are endeavouring by his Clause to get round some of the difficulties which they have made for themselves. It does not help them much, and I do not see why we should not give them slightly more ample powers than they are now seeking. Under the Clause they may only exempt articles coming into this country, such as dolls having eyes that are valuable. If the eyes are not of much value, then they cannot exempt the dolls. We would like them to be in a position to exempt anything they think fit, whatever the value of the dutiable part of it. Our proposal would facilitate matters enormously, and it would help the staff, which at present, in the small hours of the morning, are sitting with towels around their heads trying to solve the problem whether certain articles shall come in or be stopped. It would also give a help to the President of the Board of Trade. There he is he has to carry out an Act of Parliament which he does not like. He knows it is his duty to carry it out. This Clause would help him to get round some of his difficulties, and therefore I move the Amendment in order to enable him to do so all the more quickly.

    It is a matter of very great regret that I am not able to take advantage of the very unusual 'offer of assistance just made by the hon. and gallant Member. I am bound, however, to refuse that help. I would like to point out, moreover, that his offer would not facilitate the operations of the Government Department. It would rather impose upon it a very much larger burden of work than now falls to its lot, because the discretion which the hon. and gallant Member seeks to impose upon it is one of a most wide and far-reaching character. It would enable it, in fact, to tear up the Act of Parliament; it would enable the Treasury upon its mere ipse dixit to say that no compound article at all shall be charged the duty. The Safeguarding of Industries Act has been placed upon the Statute Book, and I am sure that the House of Commons would not be prepared to give such a power to abrogate it to any Government Department. When an Act has been passed, it is the duty of the Government Department to carry out the legislation and not to render nugatory any decisions of the House. I thank my hon. and gallant Friend for his generous offer in this matter, but I cannot ask the Committee to accept it.

    I very much regret the decision just announced. I look upon this Amendment as a very serious one. I think it would be an improvement on the Bill as it stands. The Bill gives power to exempt articles where only a small part is subject to the operation of the Safeguarding of Industries Act. Under the Clause as it stands, the Government must be satisfied that the part which is subject to the duty is only a small portion in comparison with the total value of the article. But that is a very vague expression, and I think this Amendment would only add to the doubt of the trader whether or not an article is likely to be taxed. It would add to the complexity of the matter, while it would not give the Government freedom to exempt any compound article, whether by reason of the smallness of the duty or by reason of the condition of the trade, or by reason of the size of the part which is subject to the duty. In none of these cases will they be allowed to exempt it under this Clause. The Clause proceeds on the principle that the wording of the Act has shown that some elasticity must be given unless you are to be landed in the most absurd results, as has happened in the case of dolls' eyes, of which we have heard so much recently.

    This seems to prove that some dispensing power must be given to the Government, and that is the reason for this Clause. It would be very foolish to confine that dispensing power to the single case of the smallness of the value of the dutiable part of the article. The immense probability is that this unfortunate piece of legislation, as I look upon it, when it comes to be worked further will disclose still other absurdities, which will make it very desirable to exempt all compound articles from the duty and not only those of which but a small part are subject to the duty. If you are going to give this dispensing power, it is far better to give it in as wide terms as possible, leaving it to the Department to carry out so much of the exemption as may seem desirable to it. This Amendment would make a material improvement in the Bill. There are other reasons which might be advanced for its adoption. The British Government have been represented at an international conference at Genoa. It has been there solemnly repeated, as it was constantly urged at previous economic conferences, that it is of the utmost importance to diminish to the greatest possible extent all barriers to trade between European countries. That has been laid down by every authority one can possibly conceive, strictly technical as well as political authorities. The Government now come down here and have an opportunity of showing, even in a slight degree, that they really do mean what they said at Genoa, and that they desire to diminish artificial barriers to trade between various countries. I venture to hope that this Committee will insist on accepting this Amendment, which seems to me to be a real improvement in the legislation and in some measure a fulfilment of the professions which the Government have made in the name of the House.

    Twelve months ago, when the Government introduced the Safeguarding of Industries Bill, they were told repeatedly that its administration was impossible. Despite all the advice tendered to them they persisted in putting it on the Statute Book, and now they have found that their arrangements are incapable of carrying it out. That is the reason why even at this late date, instead of bringing a Bill to amend the Act they have brought forward this proposal -in their Finance Bill to help them out of their difficulty. I have no doubt that one of the factors which led up to this Clause was the famous case of the dolls' eyes. In this Clause the Government take power to exempt dolls' eyes when they come in as part of the dolls, but there are manufacturers in this country who make the dolls but import the eyes, and they have to pay the duty upon them. The Germans, however, can send in dolls with the eyes, and they are exempt. That has been the policy of the Board of Customs for some time, and in order to give it legal authority we are now asked to pass this Clause. I could keep the Committee going for a considerable period with illustrations of the impossibility of administering this Act as it is on the Statute Book at the present moment.

    Again, why confine this to the Safeguarding of Industries Act? There are the Import Duties, in the case of which the same problem arises. A question was asked a few weeks back with regard to an electric lighting outfit upon which a trifling amount—something like 1s.—of duty had to be collected, and the apparatus had to be held up for weeks, at a cost of over £1, in order to enable that duty to be collected. There is no provision made in this Clause for such a case as that, because it comes under Import Duties and not under Safeguarding of Industries. If the Chancellor of the Exchequer wants, as I am sure he does, to assist the Customs, I suggest that it would be better to delete the reference to the Safeguarding of Industries Act and let it, apply to all duties. That would be of some use to the Customs, and, I take it, would be appreciated by their officials. Then there is another factor. Let it be realised that when this power is given there will be no control as to how the Customs will interpret or use it. An interesting question was asked some time ago by the hon. and gallant Member for Central Hull (Lieut.-Commander Ken-worthy) as to why a toy bagpipe, costing 2s., imported from France, was defined as a musical instrument subject to duty, whereas a mouth-organ imported from Germany, costing the same sum, came in free. The reply of the Financial Secretary to the Treasury was that mouth-organs were expressly exempted from the Customs Duty on musical instruments by a Treasury Order made under Section 5 of the Finance Act, 1915. This Order also covered all other musical instruments the value of which did not exceed 1s. Therefore, a toy bagpipe coming from France, and costing 2s., would not be exempted, but a mouth-organ, costing exactly the same sum, would be exempted. What nonsense it is to proceed with legislation of this kind.

    Perhaps I might give one other illustration. A well-known firm of pickle manufacturers imported glass bottles with their name embossed on the glass. The Customs officials said that the name of the country of origin must also be put on the bottles. The manufacturers said that that would not be right, because their pickles were not made in Holland but in Great Britain. That necessitated a meeting of His Majesty's Board of Customs, and, after a good deal of consideration, they decided that in such a case the bottles might come in despite the fact that they had an English name embossed upon them. All this shows the absurdity of this legislation, but., while the Chancellor of the Exchequer and the Government insist on its remaining on the Statute Book with all its foolishness, I do not think we can do better than make it as easy as possible for them to conduct their business. I would point out to the Chancellor of the Exchequer that it is no use his proceeding without taking ample powers, so that, for instance, a doll manufacturer who wants to import the eyes shall not be penalised in favour of the foreign exporter of the complete doll.

    I think the Chancellor of the Exchequer has forgotten the Safe-guarding of Industries Act. His argument just now was on the assumption that the articles upon which the duty was to be levied are definitely stated in the Act, but the Board of Trade have, in the exercise of their discretion, introduced from 6,000 to 8,000 articles that were not named in the Act at all. I should much prefer the matter to be left in the hands of my right hon. Friend. He has a scientific staff at his disposal who could decide many of these cases. For instance, there is the question of gas mantles. The whole question whether a duty was to be levied on gas mantles depended upon whether certain fine chemicals, nitrate of cerium and nitrate of thorium, lost their identity when worked up into the mantles, and any duty would be levied upon that part of the mantle which was composed of oxide of cerium and oxide of thorium—it becomes oxide in the process of manufacture. The question that had to be determined was whether these substances, after being combined, lost their identity altogether. I can illustrate what I mean by a political allusion. Did the Coalition Liberals, on the one hand, or the Coalition Unionists, on the other, lose their identity when they became merged in the Coalition? That is a question that has puzzled many people. I should not mind leaving it to the discretion of the scientific Department at the Treasury to decide a question of that sort, and that sort of question, having been before the various officials indirectly for some time, might help them to come to a decision as to whether these substances have lost their identity when they are made part of a gas mantle. My sole point is that the right hon. Gentleman is not taking more discretion than the Board of Trade have already. They have already the discretion to put thousands of articles into the Schedule without getting the direct consent of the House of Commons. Here we are not extending to the Treasury any more discretion in applying taxes than the House has already granted to the Board of Trade, and I would much prefer, and I think the House generally would prefer, that this discretion should be in the hands of the Treasury, which is a Department accustomed to decide questions of that sort, rather than of the Board of Trade. My right hon. Friend is just a little too modest in assuming that he could not do this hit of work better than the Board of Trade. Therefore, I support the Amendment.

    It is very hard to resist the temptation to take advantage of the rare opportunities that occur for pursuing the investigation of this fascinating Act of Parliament. This Clause in the Finance Bill, apparently, enlarges the powers which the Government already have to exempt various articles from the incidence of the duties imposed by this Act. I should like to ask the Chancellor of the Exchequer one or two questions with reference to that, and to the effect which the proposed Amendment of the Act—because this is in effect an Amendment of the Safeguarding of Industries Act—will have upon the Act itself and upon its somewhat complicated operations. Under Section I (4) of the Act, where an imported article consists of ingredients one or more of which is dutiable it may be freed from duty if such ingredient or ingredients lose their identity, as my hon. Friend the Member for the Western Isles (Dr. Murray) has rightly stated. Is this power intended to assist the Government? Where the question of loss of identity is difficult to determine, does this give them power to decide the question? It says here that if an ingredient is liable to duty, then for certain reasons, although the articles becomes thereby liable—

    This Clause does not deal with cases in which the identity of the ingredient is lost, but only with cases in which it is of very small value as compared with the total value of the article.

    Exactly. I think I am right in saying that, if the identity of the ingredient is held to be lost, the article is not dutiable. But here, even if the identity of the ingredient is not lost, the Government may for certain reasons waive the duty. The question I want to ask is, Are the Government intending to use this power for the purpose of assisting them in cases such as have arisen, when the Court could not decide whether the identity of the articles had been lost or not?

    Let me make clear what I have in my mind. The gas mantle is a case in point.. I understand that there was great difficulty in deciding whether these dutiable ingredients had lost their identity, and I do not know now what is the position with regard to the gas mantle—whether is dutiable or not. In that case, is the Government intending to use the power conferred upon them by this Clause to relieve the gas mantle from the imposition of a duty which would otherwise tall upon it? That, I imagine, is the sort of case which the Government has in mind, and also the very absurd cases which are constantly arising, such as the one we had to-day at Question Time, in which a duty of 11d. was levied on some parcel and the Post Office charged 15s. for opening the parcel in order to ascertain whether it was dutiable or not. That, I imagine, is primarily the kind of case, but would this additional power enable the Government to settle the controversy in regard to gas mantles? That is a question which I should like the Chancellor of the Exchequer to answer.

    Then there is another point. If hon. Members will look at the Clause they will find that it is not in the least confined to Part I of the Safeguarding of Industries Act. Part I of the Safeguarding of Industries Act imposes duties according to lists published in pursuance of Section 1 of the Act. Part II allows duties to be imposed by Orders which must he on the Table of the House of Commons. As snowing how fascinating the study of the subject can become, if hon. Members will look at Part II, Section 3, they will find that where an article is partly made in one country and partly in another, or where some of its ingredients are of one origin and some of another, it may escape the imposition of the duty under an Order made by the Board of Trade. Now these Orders are about to be made. Will this Clause enable the Government again to defeat the intention of Parliament when such Orders have received the approval of the House of Commons? That is an interesting inquiry, because, is very difficult really to understand where the trade of the country is under this legislation. Inquiries are held, the results are reported to the Government, long delays take place, and finally Orders are made or promised, and, when they are presented to the House of Commons, and if they receive the approval of the House, apparently, under this Clause, the Government will still, although a Part Order has been made, have the right in certain cases to set aside the decision of the House and of their protectionist followers that the duty shall be imposed. It is obvious from what I have said that it is a subject which, so far from being small or unimportant, deserves the closest study, and I invite the Chancellor of the Exchequer to give answers at least to the two questions which I have ventured to ask him.

    7.0 P.M.

    The Chancellor of the Exchequer interrupted my hon. and gallant Friend the Member for Leith (Captain W. Benn) to say that he was unable to understand him or to follow his argument. I sympathise with the Chancellor of the Exchequer, and whilst I am talking, and when I sit down, it will be quite competent for him to say that he was unable to understand me. When, however, the right hon. Gentleman has explained to the Committee the purpose of this Clause as it will affect businesses in this country, no one will he able to understand him, and we shall then sympathise with him. As one reads this Clause, one is bound to ask where is the business in it, and where is the sense in it. There is this discretionary power. Just let us imagine, and I would ask the Chancellor of the Exchequer to imagine it. Business men, sufficiently harassed by a thousand business and financial considerations, have to be bothered by not knowing whether or not any particular line of goods will recommend itself to the Treasury after consultation with the Board of Trade. The trade of England was never built up by business manufacturers having to bother themselves as to whether, after a consultation between the Treasury and the Board of Trade, and the exercise of certain discretions, they can go ahead or must hold back. I would ask the Chancellor of the Exchequer, after this consultation has been held and if there is a difference, who is to be the final arbiter and who is ultimately to decide whether or not business men should be hampered or should be free under this Clause?

    I should like to ask the right hon. Gentleman another question, to which I attach very great importance. Does he not think it a most unfortunate thing, with reference to business matters, that discretionary powers are left either to the Board of Trade or to the Treasury to say how a business is to be affected by Acts of Parliament? Discretionary powers! A flat tariff everyone can understand. An exaction upon a business, a duty upon a business, a Corporations Profits Tax, any tax upon a business, a flat rate, are understandable; but discretionary powers! Vested in whom? Vested in officials who know nothing of the practical conduct of the business; harassing the heads of businesses, who do riot know how the officials will view a thing in January compared with the way in which they viewed it last October harassing cashiers and the financial Departments as to whether they may have to pay so much money in order to get in a certain quality of goods and whether the discretionary powers are with them or against them. I say, with great respect to the Chancellor of the Exchequer, that anyone who tries to speak about this Clause speaks about it in a fog. When he replies, I say with great respect, he will speak in a fog. No one knows how it is going to affect the practical conduct of businesses, but everyone does know that every business man will resent it. Whilst I have no hopes of any reply the right hon. Gentleman can make, I think this is one of the least workable and least justifiable Clauses included in the Finance Act.

    I hope I may be allowed to remind my hon. Friends, after what took place last night, that this Debate has occupied three hours and we have not yet got Clause 8. [HON. MEMBERS: "It is due to your friends!"] I do not think it is fair to this side of the Committee to say that the time has been occupied this afternoon by them. My hon. Friends cannot complain as to the shortness of my speeches or replies. I entirely agree with one remark of my hon. Friend who spoke last, that discretions under an Act of Parliament are not a good thing and lead to uncertainty, and that they are things one would very much rather avoid. The misfortune of this Amendment is that it seeks to increase the discretion and to make the uncertainty still greater than is the case under the Clause at present. I do not think there is a great deal in what the hon. and gallant Member for Leith (Captain W. Benn) apprehends. I believe, while he usually gives very diligent study to these matters, that a little more deliberation on his part would have explained it to him. There is no difficulty about the Act itself in this respect when there is a Schedule of the class of articles which may come under the Act, and there is a provision that the Board of Trade shall issue Schedules of those things which come under the general definition at that time. Therefore, the trader knows where he is in regard to

    Division No. 158.]

    AYES

    [7.0 p.m.

    Adkins, Sir William Ryland DentBeauchamp, Sir EdwardBowles, Colonel H. F.
    Agg-Gardner, Sir James TynteBeckett, Hon. GervaseBowyer, Captain G. W. E.
    Amery, Rt. Hon. Leopold C. M. S.Bell, Lieut.-Col. W. C. H. (Devizes)Brassey, H. L. C.
    Armstrong, Henry BruceBellairs, Commander Canyon W.Breese, Major Charles E.
    Ashley, Colonel Wilfrid W.Benn, Sir A. S. (Plymouth, Drake)Bridgeman, Rt. Hon. William Clive
    Atkey, A. R.Benn, Capt. Sir I. H., Bart.(Gr'nw'h)Briggs, Harold
    Baird, Sir John LawrenceBennett, Sir Thomas JewellBroad, Thomas Tucker
    Balfour, George (Hampstead)Betterton, Henry B.Brown, Brig.-Gen. H. C. (Newbury)
    Banbury, Rt. Hon. Sir Frederick G.Bigland, AlfredBuckley, Lieut.-Colonel A.
    Banner, Sir John S. Harmood-Birchen, J. DearmanBull, Rt. Hon. Sir William James
    Barnes, Rt. Hon. G. (Glas., Gorbals)Bird, Sir William B. M. (Chichester)Burdon, Colonel Rowland
    Barnett, Major Richard W.Blair, Sir ReginaldBurgoyne, Lt.-Col. Sir Alan Hughes
    Barnston, Major HarryBlake, Sir Francis DouglasCarr, W. Theodore
    Barrand, A. R.Borwick, Major G. O.Carter, R. A. D. (Man., Withington)
    Bartley-Denniss, Sir Edmund RobertBoscawen, Rt. Hon. Sir A. Griffith-Casey, T. W.

    this matter. [HON. MEMBERS: "Oh, oh!"]

    On the question of identity, if the identity of the article is lost then no duty is chargeable. What I failed to understand in my hon. and gallant Friend's speech was that part of it wherein he suggested that there were cases in which it would be impossible to tell whether the identity was lost or not. That is really impossible. A decision must be come to in those cases whether identity is lost or not. If the identity is lost, then the duty is not chargeable. On the other hand, if the identity is not lost, there still arises a subsequent question whether the dutiable article is something so small in relation to the whole compound that it is worth charging. That is raised in the present Clause, and we provide that where it is something infinitesimal to all the compounds, although its identity is preserved, it shall then be in the discretion of the Treasury entirely to exempt from duty in that case.

    Will the right hon. Gentleman answer my question, whether this applies to Part II?

    There is no difficulty about that. It will apply to any article under Part II brought within the Act. That is to say that if under Part II the Committee appointed under the Act decides that certain articles coming from certain countries are dutiable, then the other question will still arise whether the amount of the dutiable article in a compound is of sufficient importance really to be charged. The whole object of the present Clause is to decide that point.

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

    The Committee divided: Ayes, 278; Noes, 94

    Cecil, Rt. Hon. Sir Evelyn (Aston)Hopkins, John W. W.Rankin, Captain James Stuart
    Chamberlain, Rt. Hn. J, A. (Birm, W.)Horne, Sir R. S. (Glasgow, Hillhead)Ratcliffe, Henry Butler
    Chamberlain, N. (Birm., Ladywood)Hunter, General Sir A. (Lancaster)Rawlinson, John Frederick Peel
    Cheyne, Sir William WatsonHunter-Weston, Lt.-Gen. Sir AylmerReid, D. D.
    Churchman, Sir ArthurHurd, Percy A.Remer, J. R.
    Clay, Lieut.-Colonel H. H. SpenderHurst, Lieut.-Colonel Gerald B.Remnant, Sir James
    Clough, Sir RobertInskip, Thomas Walker H.Richardson, Sir Alex. (Gravesend)
    Coats, Sir StuartJackson, Lieut.-Colonel Hon. F. S.Richardson, Lt.-Col. Sir P. (Chertsey)
    Cobb, Sir CyrilJames, Lieut.-Colonel Hon. CuthbertRoberts, Rt. Hon. G. H. (Norwich)
    Cockerill, Brigadier-General G. K.Jephcott, A. R.Roberts, Sir S. (Sheffield, Ecclesail)
    Cohen, Major J. BrunelJodrell, Neville PaulRobinson, S. (Brecon and Radnor)
    Colfox, Major Wm. PhillipsJohnson, Sir StanleyRobinson, Sir T. (Lanes, Stretford)
    Colvin, Brig.-General Richard BealeJones, Sir Evan (Pembroke)Rodger, A. K.
    Conway, Sir W. MartinJones, Henry Haydn (Merioneth)Rothschild, Lionel de
    Cralk, Rt. Hon. Sir HenryKidd, JamesRutherford, Colonel Sir J. (Darwen)
    Curzon, Captain ViscountKing, Captain Henry DouglasRutherford, Sir W. W. (Edge Hill)
    Dalziel, Sir D. (Lambeth, Brixton)Lane-Fox, G. R.Samuel, A. M. (Surrey, Farnham)
    Davidson, J. C. C. (Hemel Hempstead)Larmor, Sir JosephSamuel, Samuel (W'daworth, Putney)
    Davies, Alfred Thomas (Lincoln)Lewis, Rt. Hon. J. H. (Univ., Wales)Sanders, Colonel Sir Robert Arthur
    Davies, Thomas (Cirencester)Lewis, T. A. (Glam., Pontypridd)Sassoon, Sir Philip Albert Gustave D.
    Dawson, Sir PhilipLister, Sir R. AshtonScott, A. M. (Glasgow, Bridgeton)
    Dewhurst, Lieut.-Commander HarryLloyd, George ButlerScott, Sir Leslie (Liverp'l, Exchange)
    Doyle, N. GrattanLorden, John WilliamSeddon, J. A.
    Du Pre, Colonel William BaringLoseby, Captain C. E.Seely, Major-General Rt. Hon. John
    Edwards, Major J. (Aberavon)Lowe, Sir Francis WilliamShaw, William T. (Forfar)
    Edwards, Hugh (Glam., Neath)Lyle, C. E. LeonardShortt, Rt. Hon. E. (N'castle-on-T.)
    Erskine, James Malcolm MonteithM'Donald, Dr. Bouverie F. P.Smith, Sir Harold (Warrington)
    Eyres-Monsell, Com. Bolton M.Mackinder, Sir H. J. (Camiachie)Sprot, Colonel Sir Alexander
    Falcon, Captain MichaelMcLaren, Robert (Lanark, Northern)Stanley, Major Hon. G. (Preston)
    Falle, Major Sir Bertram GodfrayM'Lean, Lieut.-Col. Charles W. W.Stanton, Charles Butt
    Farquharson, Major A. C.Macleod, J. MackintoshStarkey, Captain John Ralph
    Fell, Sir ArthurMcNeill, Ronald (Kent, Canterbury)Steel, Major S. Strang
    FitzRoy, Captain Hon. Edward A.Macpherson, Rt. Hon. James I.Stephenson, Lieut.-Colonel H. K.
    Foreman, Sir HenryMacquisten, F. A.Stewart, Gershom
    Forestier-Walker, L.Magnus, Sir PhilipSturrock, J. Leng
    Forrest, WalterMallalieu, Frederick WilliamSueter, Rear-Admiral Murray Fraser
    Foxcroft, Captain Charles TalbotMarriott, John Arthur RansomeSugden, W. H.
    Fraser, Major Sir KeithMartin, A. E.Surtees, Brigadier-General H. C.
    Frees, Sir Walter deMeysey-Thompson, Lieut.-Col. E. C.Sutherland, Sir William
    Fremantle, Lieut.-Colonel Francis E.Middlebrook, Sir WilliamTaylor, J.
    Ganzoni, Sir JohnMildmay, Colonel Rt. Hon. F. B.Terrell, George (Wilts, Chippenham)
    Gardner, ErnestMolson, Major John ElsdaleThomson, F. C. (Aberdeen, South)
    Gee, Captain RobertMond, Rt. Hon. Sir Alfred MoritzThomson, Sir W. Mitchell- (Maryhill)
    Gibbs, Colonel George AbrahamMoraine, Captain Algernon H.Tickler, Thomas George
    Gilbert, James DanielMorrison, HughTownley, Maximilian G.
    Glimour, Lieut.-Colonel Sir JohnMorrison-Bell, Major A. C.Tryon, Major George Clement
    Glyn, Major RalphMunro, Rt. Hon. RobertTurton, Edmund Russborough
    Goff, Sir R. ParkMurchison, C. K.Waddington, R.
    Gould, James C.Murray, Rt. Hon. C. D. (Edinburgh)Wallace, J.
    Goulding, Rt. Hon. Sir Edward A.Murray, Hon. Gideon (St. Rollox)Waiters, Rt. Hon. Sir John Tudor
    Gray, Major Ernest (Accrington)Nall, Major JosephWalton, J. (York, W. R. Don Valley)
    Green, Joseph F. (Leicester, W.)Neal, ArthurWard-Jackson, Major C. L.
    Greene, Lt.-Col. Sir W. (Hack'y, N.)Newman, Colonel J. R. P. (Finchley)Ward, Col. L. (Kingston-upon-Hull)
    Greer, Sir HarryNewson, Sir Percy WilsonWard, William Dudley (Southampton)
    Gretton, Colonel JohnNewton, Sir D. G. C. (Cambridge)Watson, Captain John Bertrand
    Gritten, W. G. HowardNicholl, Commander Sir EdwardWeston, Colonel John Wakefield
    Guest, Capt. Rt. Hon. Frederick E.Nicholson, Reginald (Doncaster)Wheler, Col. Granville C. H.
    Guinness, Lieut.-Col. Hon. W. E.Nicholson, William G. (Petersfield)White, Col. G. D. (Southport)
    Gwynne, Rupert S.Nield, Sir HerbertWilliams, C. (Tavistock)
    Hacking, Captain Douglas H.Norman, Major Rt. Hon. Sir HenryWilloughby, Lieut.-Col. Hon. Claud
    Hall, Lieut.-Col. Sir F. (Dulwich)Norris, Colonel Sir Henry G.Wills, Lt.-Col. Sir Gilbert Alan H.
    Hall, Rr-Adml Sir W.(Liv'p'l,W.D'by)Norton-Griffiths, Lieut.-Col. Sir JohnWilson, Lt.-Col. Sir M. (Bethnal Gn.)
    Hamilton, Sir George C.Oman, Sir Charles William C.Wilson, Col, M. J. (Richmond)
    Hannon, Patrick Joseph HenryOrmsby-Gore, Hon. WilliamWindsor, Viscount
    Harmsworth, C. B. (Bedford, Luton)Parker, JamesWinfrey, Sir Richard
    Harmsworth, Hon. E. C. (Kent)Pearce, Sir WilliamWinterton, Earl
    Harris, Sir Henry PercyPease, Rt. Hon. Herbert PikeWise, Frederick
    Henderson, Lt.-Col. V. L. (Tradeston)Peel, Col. Hon. S. (Uxbridge, Mddx.)Wolmer, Viscount
    Hennessy, Major J. R. G.Percy, Lord Eustace (Hastings)Wood, Hon. Edward F. L. (Ripon)
    Herbert, Dennis (Hertford, Watford)Perkins, Walter FrankWood, Sir J. (Stalybridge & Hyde)
    Hickman, Brig.-General Thomas E.Perring, William GeorgeWood, Major Sir S. Hill-(High Peak)
    Hilder, Lieut.-Colonel FrankPhilipps, Sir Owen C. (Chester, City)Woolcock, William James U.
    Hills, Major John WallerPickering, Colonel Emil W.Yate, Colonel Sir Charles Edward
    Hinds, JohnPilditch, Sir PhilipYeo, Sir Alfred William
    Hoare, Lieut.-Colonel Sir S. J. G.Pollock, Rt. Hon. Sir Ernest MurrayYoung, Sir Frederick W. (Swindon)
    Hood, Sir JosephPownall, Lieut.-Colonel Assheton
    Hope, Sir H. (Stirling &Cl'ckm'nn'n,W.)Purchase, H. G.

    TELLERS FOR THE AYES.—

    Hope, Lt.-Col. Sir J. A. (Midlothian)Raeburn, Sir William H.Colonel Leslie Wilson and Mr.
    Hope, J. D. (Berwick & Haddington)Randies, Sir John ScurrahMcCurdy.

    NOES.

    Acland, Rt. Hon. Francis D.Barker, G. (Monmouth, Abertillery)Benn, Captain Wedgwood (Leith)
    Adamson, Rt. Hon. WilliamBarnes, Major H. (Newcastle, E.)Bentinck, Lord Henry Cavendish-
    Ammon, Charles GeorgeBarton, Sir William (Oldham)Bowerman, Rt. Hon. Charl
    Banton, GeorgeBell, James (Lancaster, Ormskirk)Bramsdon, Sir Thomas

    Briant, FrankHenderson, Rt. Hon. A. (Widnes)Roberts, Frederick O. (W. Bromwich)
    Bromfield, WilliamHerbert, Col. Hon. A. (Yeovil)Robertson, John
    Brown, James (Ayr and Bute)Hirst, G. H.Royce, William Stapleton
    Cairns, JohnHodge, Rt. Hon. JohnSexton, James
    Carter, W. (Nottingham, Mansfield)Hogue, James MylesShaw, Thomas (Preston)
    Cecil, Rt. Hon. Lord R. (Hitchin)Holmes, J. StanleySitch, Charles H.
    Clynes, Rt. Hon. John R.Irving, DanSmith, W. R (Wellingborough)
    Collins, Sir Godfrey (Greenock)John, William (Rhondda, West)Spencer, George A.
    Davies, A. (Lancaster, Clitheroe)Jones, J. J. (West Ham, Silvertown)Spoor, B. G.
    Davies, Evan (Ebbw Vale)Jones, Morgan (Caerphilly)Sutton, John Edward
    Davies, Rhys John (Westhoughton)Kiley, James DanielSwan, J. E.
    Davison, J. E. (Smethwick)Lambert, Rt. Hon. GeorgeThomas, Rt. Hon. James H. (Derby)
    Edwards, C. (Monmouth, Bedwellty)Lawson, John JamesThomson, T. (Middlesbrough, West)
    Entwistle, Major C. F.Lunn, WilliamThorne, W. (West Ham, Plaistow)
    Finney, SamuelLyle-Samuel, AlexanderTillett, Benjamin
    Foot, IsaacMaclean, Neil (Glasgow, Govan)Walsh, Stephen (Lancaster, Ince)
    Galbraith, SamuelMaclean, Rt. Hn. Sir D. (Midlothian)Waterson, A. E.
    Gillis, WilliamMills, John EdmundWatts-Morgan, Lieut.-Col. D.
    Graham, D. M. (Lanark, Hamilton)Mosley, OswaldWedgwood, Colonel Josiah C.
    Graham, W. (Edinburgh, Central)Murray, Hon. A. C. (Aberdeen)White, Charles F. (Derby, Western)
    Grundy, T. W.Murray, Dr. D. (Inverness & Ross)Wignall, James
    Guest, J. (York, W. R., Hemsworth)Myers, ThomasWilliams, Col. P. (Middlesbrough, E.)
    Hall, F. (York, W.R., Normanton)Newbould, Alfred ErnestWilson, James (Dudley)
    Hallas, EldredO'Grady, Captain JamesWilson, Rt. Hon. J. W. (Stourbridge)
    Halls, WalterParkinson, John Allen (Wigan)Wood, Major M. M. (Aberdeen, C.)
    Hartshorn, VernonRattan, Peter WilsonYoung, Robert (Lancaster, Newton)
    Hayday, ArthurRendall, Athelstan
    Hayward, EvanRichardson, R. (Houghton-le-Spring)

    TELLERS FOR THE NOES.—

    Mr. T. Griffiths and Mr. Kennedy.

    Clause ordered to stand part of the Bill.

    Clause 9—Entertainments Duty Declared To Be Chargeable On Certain Payments)

    For removing doubts it is hereby declared that Entertainments Duty within the meaning of Section one of the Finance (New Duties) Act, 1916, is by virtue of that Act chargeable on the following payments, that is to say:

  • (a) payments for admission to an entertainment made to a person other than the proprietor of the entertainment; and
  • (b) payments of rent made in respect of an interest in any premises which is primarily acquired for the purpose of securing admission to an entertainment;
  • and accordingly in that Section the expressions "the proprietor of the entertainment" and "the proprietor" shall include and be deemed always to have included any person on whose behalf payments for admission to an entertainment are received.

    Perhaps it will be, convenient if I mention that this is a declaratory Clause for removing doubts and does not raise the whole question of the Entertainments Duty. That comes up when the new Clauses are dealt with. The hon. Member (Mr. Newbould), I think, understands that, but I thought it advisable to intimate it to the Committee.

    I beg to move, at the end of the Clause, to add the words

    "Provided, however, that the Entertainments Duty within the meaning of Section one of the Finance (New Duties) Act, 1916, as amended by this Clause, shall not be deemed to extend, and shall not apply in the case of any exhibition of a cinemato- graph film or films generally described as a 'trade show' where such exhibition is mainly or primarily attended by persons to view such film or films for the purpose of trade."
    The Clause has for its purpose the removal of doubts. I am not quite sure what doubts it purports to remove, but it raises in my mind one fresh doubt, and it is in order to get that removed that I have put down the Amendment. In the cinema trade it is customary to hold trade shows. It is done in this way. The proprietor of a cinema theatre lets it to the owner of a film in order that it may be shown to the trade. It is done mainly for the purposes of trade. It is quite true that these exhibitions are not necessarily confined strictly to people engaged in the trade. The actors and actresses who have played in a. film and their friends may attend a trade show. Various people on the fringe of the industry but not directly associated with it may attend those trade shows. But the real purpose of the show is for the trade purpose of exploiting the particular film or films shown, and all my Amendment is intended to ascertain is that paragraph (b) is not intended to apply to these trade shows. If the Chancellor of the Exchequer accepts my Amendment he loses nothing at all and merely clears away a doubt which this Clause certainly raises—a Clause which has for its purpose the removal of doubts. I hope the right hon. Gentleman will either accept the Amendment or assure me that the Clause will not have the effect which I fear it may have.

    I think I can give the hon. Member the assurance he desires. If there be any doubt at all, and it is thought necessary to put in the words he asks, or something like them, I shall be very glad to do so on the Report stage, but my present state of mind is that no such qualification is required, for the kind of show he has described is entirely outside the purview of the Clause and could not in any circumstances be brought within it. The kind of circumstances in which these shows are held do not create the first requisite which makes the duty apply, namely, that of attendance at an entertainment, because in point of fact they are not attending an entertainment in the ordinary sense of the term, but attending a show for the purposes of the trade. In the next place, there is no charge for admission at such trade shows, and accordingly the very thing upon which the Entertainments Duty is levied, namely, the charge for admission, does not exist. Accordingly, as it appears to me at present, and as I am advised also, there is no necessity at all for the words the hon. Member proposes.

    I readily accept the right hon. Gentleman's assurance, but I would point out that paragraph (b), as drafted, says:

    "Payments of rent made in respect of an interest in any premises which is primarily acquired for the purpose of securing admission to an entertainment."
    The exhibitor pays rent for the purpose of securing admission to a trade show. Whether you can call a trade show an entertainment or not is in doubt, but seing that these trade shows take place at West End cinemas or theatres and they have 2,000 people in, there is a doubt in my mind. I shall be satisfied if the right hon. Gentleman will look into it, and if the doubt exists make the necessary Amendment. I beg to ask leave to withdraw my Amendment.

    Amendment, by leave, withdrawn.

    Clause ordered to stand part of the Bill.

    Clause 10—(Income Tax And Super-Tax For 1922–23)

    (1) Income Tax for the year 1922–23 shall be charged at the rate of five shillings, and the rates of Super-tax for that year shall, for the purposes of Section four of the Income Tax Act, 1918, as amended by the Finance Act, 1920, be the same as those for the year 1921–22.

    (2) All such enactments relating to Income Tax and Super-tax respectively as were in force with respect to the duties of Income Tax and Super-tax granted for the year 1921–22, shall have full force and effect with respect to the duties of Income Tax and Super-tax respectively granted by this Act.

    (3) The annual value of any property which has been adopted for the purpose either of Income Tax under Schedules A and B, or of Inhabited House Duty, for the year 1921–22, shall be taken as the annual value of that property for the same purpose fur the year 1922–23:

    Provided that this Sub-section

  • (a) so far as respects the duty on inhabited houses in Scotland, shall be construed as referring to a year of assessment ending on the twenty-fourth day of May instead of to a year of assessment ending on the fifth day of April; and
  • (b) shall not apply to lands, tenements, and hereditaments in the administrative county of London with respect to which the valuation list under the Valuation (Metropolis) Act, 1869, is, by that Act, made conclusive for the purposes of Income Tax and Inhabited House Duty.
  • Motion made, and Question proposed, "That the Clause stand part of the Bill."

    I should like to draw attention to the necessity next year or in the future of making some attempt to reduce the very large taxation which is imposed by this Clause. With the reduction of the Income Tax to 5s. and a Super-tax of 4s. there are still a large number of people who during this year will be, paying at least 9s. of their income to the Government, and to that has to be added the necessary sinking fund for Death Duties, so, without exaggeration, I might say if the Clause is passed the result will be that there will be a large number of people who are paying at least 11s. a year to the Government. We are dealing later on with Clauses which seek to prevent evasion of Income Tax and Super-tax, and those Clauses are perfectly right. But what is the real reason for the evasion? It is only within the last three or four years that these evasions have taken place. It is because you put such an enormous burden upon the people as to amount to practical confiscation in many cases, and, consequently, people who perhaps are not so strict in their moral ideas as they should be are almost driven to evasion. Perhaps I should not say anything about moral ideas, because evasions have always been strictly legal, and people have endeavoured to find out how they can avoid, without coming into contact with the law, the payment of a burden which it is almost impossible to bear. During the War people paid these enormous taxes without a murmur, but they did not expect that they were going to be kept on for an unlimited time after the War.

    I have suggested more than once that Income Tax and Super-tax should be made into one tax. That would do away with the possibility of evasion of Super-tax, because people would be assessed for Income Tax and would have to pay it. There would be no question whether or not they were liable to Super-tax, and therefore one of the methods by which Super-tax is evaded would disappear. Another great advantage of that would be that everyone would know what people are paying. At present I believe a very large number of people—I do not mean rich people, but people with £300 or £400 a year—do not in the least know what the richer people are paying and it is very difficult for them to find out. They see in the papers that Income Tax is 6s. or 5s. and they see something about Super-tax, but as a rule there is no mention of the amount of the Super-tax. They do not know what the Super-tax is, or what it amounts to. If it was put on the paper that Income Tax was 9s. in the £1, if there was no Super-tax, everybody would know what the Income Tax was. It might be said that it would be difficult to impose an Income Tax of 9s. on everybody. It would be difficult when the Income Tax was a flat rate, but now it is graduated. Therefore it is easy to say that those people who are liable for 9s. Income Tax and Super-tax, should be charged Income Tax at the rate of 9s.

    I put these suggestions forward in all seriousness, and I would commend them to members of the Labour party. We all desire that the state of unemployment should disappear, and in whatever part of the House we sit we desire that there should be employment for our own people in this country. You cannot have employment unless you have capital, you cannot have capital unless you have the means of saving, and you cannot save if such a large proportion of your profits are taken from you by the Government. Therefore, I hope that hon. Members opposite will not think that if there was a reduction in Income Tax and Super-tax that it would benefit the rich man only. That idea is erroneous. It would benefit also the people who live by weekly wages and manual labour. It would give increased employment. [HON. MEMBERS: "Oh!"] Those are my views. It would give an opportunity for more factories to be built, more machinery to be bought, and it would tend to a general development of the industries of the country. Some of us, during the last two or three years, have been endeavouring to get the Government to reduce expenditure, but so far we have practically failed. There is one remedy which may eventually have to be put into force, and that is to refuse to give the Government the money to spend. If we were unwilling to vote money, the Government could not pay. I am not advocating that course, because that is something that should only be done in the very last resource; but unless the Government takes some steps to reduce expenditure we shall have to adopt something of that sort. I make these remarks in no spirit of hostility to the Government, and I hope they will be considered by the Chancellor of the Exchequer.

    The right hon. Baronet will forgive me if I say that the remarks which he has just made, which apparently received the general approval of the Committee, and apparently the approval of Members sitting beside me, are very disastrous remarks to go out to the public. The right hon. baronet knows that they are perfectly unsound.

    They may be unsound, but I do not think so. It is a matter of opinion.

    I think on reflection the right hon. Baronet will see that they must be unsound. It is not taxation which ruins trade, but expenditure which ruins it. The particular form of taxation which we are considering at the present time is 1s. off the Income Tax, and we are getting that reduction off the Income Tax by reducing the sinking fund. Does the right hon. Baronet really think that it helps trade to reduce the repayment of debt by reducing the Income Tax?

    I have never been in favour of the suspension of the Sinking Fund. What I have said was that we must reduce expenditure, and that we could reduce it by doing away with some of the offices created during the War, and reducing the expenditure on the Civil Service.

    The right hon. Baronet is advocating the reduction of the Income Tax, although he knows perfectly well that that reduction is obtained at the expense of honest finance. So long as the expenditure remains constant and you reduce taxation by reducing the repayment of debt, you are doing nothing whatever to benefit trade. Trade would benefit infinitely more if the £51,000,000 that are being lost to the Exchequer by reducing the Income Tax were collected from the public of this country and used for the repayment of debt. If used for the repayment of debt, the money would go back into trade, capital would become cheaper, trade would develop, and production would become cheaper. Instead of its being used for the repayment of debt, it means putting £50 into that man's pocket, £60 into another man's pocket, £100 into another man's pocket, and they will spend it. They will squander it and it will not go back into trade. A great deal of it will be spent at Monte Carlo. Instead of benefiting trade, the Chancellor of the Exchequer, as the right hon. Baronet knows perfectly well, by that action is really damaging trade. It is not a fact that by reducing taxation you are going to help trade. You must reduce expenditure. The one sound argument made by the right hon. Baronet was that the only way to stop this extravagant Government, was to refuse money, and then they would bring their expenditure down. That argument was quite right, but the rest of his speech was wrong.

    The right hon. Baronet complains that the wicked, foolish, uneducated working classes do not know what the Super-tax is. Surely every rich man when he pays Super-tax tells the public all about it. Are we not told that three-fourths of a rich man's income is going in payment of taxation? It is very nice to hear that, but nobody knows better than the right hon. Baronet that although he signs a cheque he collects it from the consumer. Be passes the tax on. With regard to the Corporation Profits Tax, the right hon. Baronet gets the railways exempted for three years under this Budget, for the very good reason that the railway companies, being monopolists, are not able to pass the tax on to the consumer. Other industries pay the Corporation Profits Tax, and are quite ready to pay it, because they know that it goes on the overhead charges of the business and falls upon the community in the long run. The rich man signs a cheque but the rich man, through the natural organisation of our present competitive system, collects from the consumer the money required for the cheque paid to the Government. I think that is generally recognised. Hon. Members opposite complain about the heavy taxation they have to pay when it suits their purpose, and when it suits their purpose on another occasion they say to the Labour Members, with tears in their voice: "Do you not realise that I am not really paying this cheque, and that it comes upon the working man?" Of course it does. When it suits the right hon. Baronet's arguments to say that he does not pay the tax, the workman pays it, he uses it. On the other hand, when the right hon. Baronet wants to show what agonies the big financiers suffer owing to the Super-tax and the Income Tax, he takes a different line, and says that the rich man pays the tax. He cannot have it both ways.

    Let us stick to sound economics. Let us realise that two and two make four, even in the House of Commons, and that when you put heavy taxes upon business, the inevitable result is that the cost of production is greater, that the article which the business produces costs more to produce. There is another point which ought to he made in view of the lecture which we have had from the right hon. Baronet. What about reducing direct taxation or reducing indirect taxation? Which really is the best for trade? The right hon. Baronet told us, with almost a break in his voice, that he wanted reduction in Income Tax in order that there might be more employment in this country. Would it not be better for employment in this country if an equal amount of taxation were remitted from the indirect taxes? If you take £10,000,000 of taxation off the Income Tax, it does not benefit trade so much as would be the case if it were taken off sugar or tea. If it were taken off sugar or tea it would mean that at the end of the week every working man would have more money to spend; everybody would have more money to spend. They would not throw that money into the sea. They would buy the things they wanted with that money. It would mean that more people would be employed satisfying their wants, and every penny reduction off indirect taxation would go back into trade, thereby increasing production and employment. Hon. Members opposite may say that exactly the same thing would happen in regard to reduction of Income Tax. They will say that if they get a certain sum off the Income Tax it means that they buy more things than they would otherwise buy, that people would be employed in producing the articles they required, and that, in the long run, it is the same thing—more employment all round. It all depends how the money is spent. The object of reducing the indirect taxation is that you produce the maximum amount of employment. A great deal of the increased expenditure, due to the reduction of Income Tax, will be spent in this country, but not all. Therefore, it is best for trade to reduce indirect taxation, which will increase production here and increase employment. I apologise to the Committee for keeping them so long, but I was drawn into this argument on account of the speech of the right hon. Baronet, a speech which, coming from him, where we usually get sound economics, was, perhaps, unfortunate at the present moment.

    In common with most Members of the Committee I suppose I have done a certain amount of misrepresentation of the speeches of other Members, but the speech of the hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) goes beyond anything I have ever heard in that direction. It was just a series of arguments which had nothing to do with what the right hon. Baronet (Sir F. Banbury) said The right hon. Baronet merely suggested that it would be of more educative value to the hon. and gallant Member himself and those who sit behind him, if an equivalent amount of taxation were collected in such a form that the people of this country would know exactly where the burden lay, and the hon. and gallant Member must admit that in any demo- cratic form of State it is very desirable that people should have the fullest knowledge of where the money comes from and how it is being spent. As the right hon. Baronet said, if you have a graduated Income Tax with Super-tax in addition, it is extraordinarily difficult for the people of the country to know what taxation is being paid as between one citizen and another.

    The hon. and gallant Gentleman told us he was going to give us sound economics this evening. I listened with great attention, but I am afraid that many of us were disappointed, and I would like to give him this thought to sleep upon to-night. Let him consider whether a graduation of tax with a Super-tax is sound economics or not. To my mind, it appears that, if there is to be a graduation of Income Tax at all, the incidence ought to be made heaviest on incomes where they are small rather than where they are large. The graduation of Income Tax ought to be such that Income Tax shall be heavier on small incomes than on large. For this reason, that incomes generally up to £400 or £500 per annum are spent entirely by the people who earn them, or the people who inherit them, but incomes above £10,000 per annum are very largely reinvested in the industries of this country, and if you graduate the Income Tax and the Super-tax in the way in which it is done at present—I make a present of this idea to the Chancellor of the Exchequer—you put a heavy tax on the capital of the country, and therefore reduce the possibility of greater wealth production and a better condition of living for the worker in the future.

    Hon. Members on both sides have explained what they are pleased to call sound economics. I think they are more sound than economic. The hon. Member for Mossley (Mr. Hopkinson) has put forward one of the most absurd ideas of taxation which have ever been placed before this Chamber, that is that the smaller the income the more heavily it should be taxed. The further down the scale of income the higher the graduation should be. The bricklayer's labourer earning 30s. a week now and again is to have the heaviest graduation upon the 30s. a week, while the city financier with his £10,000 and over is to get off with the lightest graduation. If the hon. Member for Mossley were to go down to his constituents and advocate this sort of doctrine be would never come back to the House.

    I was not advocating it. I was merely stating it as a fact of economics.

    If the hon. Member believes it to be a fact in economics then he is not doing his duty as one who claims to be a sound economist in not preaching it to his constituents in Mossley. If he is a sound economist then he is remaining in this House on a subterfuge. He is not teaching the working classes of his constituency those sound economic facts which would lead them to understand thoroughly what is actually paid by the wealthy people of this country in their Income Tax. The right hon. Baronet the member for the City of London (Sir F. Banbury) has put forward the idea that we ought to have a graduated tax so that the people of this country would understand exactly what the total sum of taxation placed on incomes really amounts to. I do not see anything wrong with that. The Labour party have been advocating practically that sort of thing for years, even before they had got a Member in the House. They have advocated time after time a graduated Income Tax, not graduated along the lines suggested by the hon. Member for Mossley from the highest income downwards until the poor charwoman would pay the highest rate of taxes in the country but the other way about, starting from some amount laid down as being the sum necessary to enable the individual who has earned or inherited that income to live upon it in comfort, and beyond that figure graduating Income Tax on an increasing scale according to the amount of income, until, having reached a certain figure, it would take away the greater part of anything above that figure under the graduated Income Tax which you would raise upon it. That I think is the sound economics so far as taxation goes.

    I can understand the reason why the right hon. Baronet is so anxious that the people of this country should understand exactly how much is being levied in taxation upon income. We all realise that the average man who has not got an income, but has merely got wages of £1, £2 or £3 per week, does not worry about Super-tax. He does not know what it means in many cases. He never has had to pay Super-tax, because his income is so low that even Income Tax will not be paid. Consequently, he does not bother much about Super-tax and the amount, but as the right hon. Baronet say, if you do away with Super-tax, or do not call it Super-tax, but add it to the Income Tax, it will be seen that the individual who has to pay what is called Super-tax is really paying, instead of 5s. Income Tax and a Super-tax of 4s., an Income Tax of 9s. in the £. I agree with that, but it is not with the object of educating the man in the street that the right hon. Baronet and the hon. Member for Mossley put forward that idea. If you say that there is an Income Tax of 9s. in the £, then with the love of justice which is inherent in every Britisher, no matter to what station he belongs, when he sees in the "Daily Mail," the "Sunday Express," the "Sunday Pictorial," and all the other papers, stunt articles pointing out that the wealthy people of this country have to pay this enormous Income Tax of 9s. in the £, and suggesting that 1s. in the £ should be knocked off the tax, it is said that is in the £ would never be missed, and they secure, not only 1s. in the £ off the tax, but bring about that which the right hon. Baronet and the hon. Member want, an actual reduction in the Income Tax, an actual bringing down of the graduated scale.

    Where you have, as you have in this country to-day, to meet the enormous expenses which are a consequence of the War, we must find money, and we can only get this money to pay Sinking Fund and interests on our debts by levying taxation upon something in this country. The Income Tax is one of the methods of carrying on that work in this country. The people who benefit most out of the charge are the very people for whom the right hon. Baronet and the hon. Member speak, because they have the largest incomes in this country and they have got the greatest advantage out of the victory of the Allies. Now we have them trying to escape the responsibility of paying, out of the wealth they possess, their full share of that which they are enjoying because of the victory of the Allies. I think it, is absurd for the hon. Member to preach sound economics, because he is not a sound economist. His facts are not facts, but theories. Theories are not facts until they are applied. If some hon. Member would take the hon. Member into the Library and give him a lecture on sound economics, it might be of some benefit to him. I hope that before the hon. Gentleman again intervenes in Debate he will give a thought to what, after all, sound economics are, and see if there is not a way in which those economic theories in which he believes can be applied for the benefit of the taxpayers of the country. If he is able to show that that can be done, he will contribute more to the education of the Committee than he is doing at present, when he is only contributing to its hilarity.

    8.0 P.M.

    The Debate seems to be wandering round the question, whether direct or indirect taxation is the better form. Both forms of taxation are bad and we want to keep them down as much as possible. The real question is whether we can reduce taxation, not only direct, but indirect. I agree with the hon. Member who has just spoken that we must reduce indirect taxation when possible, taxation on such things as tea, beer, coffee. Yesterday we had a discussion on tea and I agreed with what was said by hon. Members on these benches, because taxes on various commodities keep up the cost of living and thus produce the same effect as direct taxation. Direct taxation besides keeping up prices does something worse, because it prevents new capital from being invested in any form of enterprise to enable the country to carry on, and it also prevents the country from becoming more prosperous as, unless capital is saved, the country would become less prosperous, though hon. Members on those benches may be pleased if the country does become less prosperous—[HON. MEMBERS: "No!"]—or if certain individuals in the country become less prosperous, and save less money. But I think that some foreign countries might become more pleased because they would get the trade which we must lose in consequence. I listened to the speech of the hon. Member for Newcastle-under-Lyme, and I thought it was extremely strongly favour of the reduction of the Income Tax, He said that the people who now pay Income Tax are not the people who suffer, but that the people who suffer are the consumers, because the people who pay Income Tax make the consumers pay more for their goods. I do not think that is the case. Assume for the moment that it is true. Is it- not an even greater reason for reducing the Income Tax? Surely the question of Income Tax is a national question, and not a question of one group or one section of the community. The question affects not only the man who pays Income Tax. Every person in the community suffers from a grievous Income Tax, which is a direct levy, and almost a capital levy, upon the whole community, and must have its effect on every trade and industry in the country. On every business, whether big or small, it has its effect, and surely on all the people employed in that business, not only those high up with large salaries, but those who get only wages. It must have the effect of producing lower wages, and of fewer people being employed.

    The point to consider is how we can get the Income Tax down. I agree with the statement that Income Tax should not be reduced by suspending the interest on the Sinking Fund. It should have been reduced by cutting down national expenditure. That is the only way of doing it. I do not want to go into the question whether it was advisable to reduce Income Tax by is. I think the Government were probably quite right in taking the risk, and in trying thus to give an impetus to trade. They should have had a better balance sheet to present to the country. Next year the country will not be satisfied with the Income Tax of this year, but will expect another 1s. to come off. That is what I wish to urge upon the Government now. This is the only opportunity we have of telling the Government that next year the country will expect a further reduction of Income Tax and in all other taxes. The only possible way to make that possible is to cut down national expenditure. I would urge the Chancellor of the Exchequer and the Government to review national expenditure once more, and to cut down in every Department. That is the most pressing question of the hour. If trade is to be got going again, and business in the country is to be helped and unemployment checked, it can be done only by cutting down taxation.

    The speech, which the hon. Member for Govan (Mr. N. Maclean) made, displayed a good deal of indignation in the reply he made to the hon. Member for Mossley (Mr. A. Hopkinson). The hon. Member rediculed the idea that the hon. Member for Mossley had been expressing sound economics. The hon. Gentleman is really confusing two things which are perfectly distinct. The hon. Member told my hon. Friend that if he went to his constituency and preached the same doctrine that he preached in this House he would never come back. I think that is probably true. That is because the hon. Gentleman opposite was confusing sound economics with practical politics. They are two totally different things. I doubt very much if any Member of this House would be likely to come back if he preached sound economics in his own constituency. As a matter of fact, that is one of the great difficulties we all have in dealing with these questions. Sound economics are a very cruel thing. Equity is one thing and sound economics a very different thing. In practical politics we constantly are obliged to say good-bye to sound economics, in order that we may do justice between one class and another. Take the case which was spoken of by the hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood), the question whether relief from direct taxation or from indirect taxation is of the greater benefit, from the point of view of industry and employment. He said quite truly that the saving of money by the reduction of expenditure is the great point, and that the crucial matter is how the money saved is spent. But as a matter of practical politics and of practical knowledge we all know that whereas the saving of direct taxation may, and probably will, result in investment which will give employment, the saving of very small sums through the consumer on indirect taxation will have no such result.

    Take the Tea Duty or the Sugar Duty. It is perfectly right, apart altogether from whether it is sound politics or not, that we should reduce, as far as possible, the burden on the consumer, in order to do justice and to enable people to live with decent comfort. But if it comes to a question of what will give employment and what will be invested, we know perfectly well that a small weekly saving will not result in investment to give employment, but that a reduction of direct taxation, especially on the larger incomes, will have that result and will give employment. Therefore, I believe that the hon. Member for Mossley, although he was not speaking practical politics, because such a thing could not be done, was speaking perfectly sound economics when he said that the proper graduation of income would be higher on the low income. [HON. MEMBERS: "No!"] Yes; it was sound economics. I say again that the hon. Member for Govan is confusing two things. Neither of us advocates such a graduation, but let us recognise the distinction between politics and economics. What is economics? It is the science that deals with the production of national wealth. [HON. MEMBERS: "And its distribution."] And its distribution, I agree. I do not want to pursue it, because it is an academic point. If you could have such a system of graduation as was suggested it would result, as a matter of fact, in a greater increase in the national wealth than the system which we have to pursue, not for an economic reason at all, but for the equitable reason of putting the greater burden on those who have the greater resources. That is equity, not economics. Therefore, I think that, although we must, of course, keep in view the reduction of the burden upon the people and maintain the balance which has always been maintained, roughly speaking, between indirect taxation and direct taxation, yet I join with my right hon. Friend the Member for the City of London (Sir F. Banbury) in saying that if next year the Government can give a further reduction in the very pressing burden of Income Tax on the industries of the country, not merely as a means of relieving people who require relief less than others, but for the purpose of increasing the general prosperity of the country out of which alone employment can grow, they will be taking the right course.

    Seeing that the hon. Gentleman desires prosperity for the country, how does the proposal to place the heavier tax on the lower incomes produce it?

    I am not fully aware of what has passed in the earlier discussion, but it seems to me that the discussion is now taking a range far wider than the Clause would allow.

    It was the point raised by the hon. Member for Mossley which produced practically the whole of the speech of the hon. Member for Govan. I will answer the hon. Member briefly. I do not think it would produce prosperity to do what was suggested. The hon. Member for Mossley said was sound economics. Apart from that, we require equity and justice.

    It would be very difficult to justify the present reduction of Income Tax while we keep intact the tremendous burden of indirect taxation. I share the view of the hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) that any reduction in taxation which is specifically applied to what can be termed luxuries will have considerably less benefit on the trade of the country than a similar reduction of taxation applied to the common necessaries of life, and that if the £50,000,000 reduction in Income Tax had been applied to the reduction of taxes upon food, a greater advantage to trade and commerce would have been forthcoming. Several hon. Members have urged that one of the methods whereby Income Tax can be reduced now and reduced still further in future is by a reduction in expenditure. There is considerable loose talk upon various political platforms, in the newspaper Press and in this House about reduction of expenditure. I think the time has come—

    It is quite clear that this general discussion cannot be continued. The question is whether there shall be an Income Tax of 5s. in the £or not. It must be assumed that a certain sum of expenditure has to be met, and the question is whether it should be met by a 5s. Income Tax or not.

    With all respect, I say it is very unfortunate that the Debate has proceeded on the lines hitherto followed, with all these aspects of the matter brought in. If we are restricted now to the point you have laid down, having regard to the wide field that the discussion has taken hitherto, I do not feel justified in continuing the Debate.

    It is unfortunate that you, Mr. Chairman, were not here when the discussion opened. It was not on a question of whether or not the Income Tax should be 5s. in the £. The right hon. Baronet the Member for the City of London (Sir F. Banbury), on the Clause being moved, took the opportunity of pointing out how desirable it was that Income Tax and Super-tax should be levied together as one sum and not separately. He went on to say that if that were done the burden of the joint tax would become apparent to the most simple-minded, and the result would be to bring home to the country the necessity for further reductions. That is how the Debate opened, and I do not desire to carry it further than that point. Super-tax is only another word for additional Income Tax. The Statute calls it additional Income Tax, and those who have occasion to negotiate with the authorities on this matter know how they insist that the same rules which apply to the levying of Income Tax should apply also to the levying of Super-tax. That being so, why should they not be levied as one? It would effect a great saving. It would mean getting rid of one Department, and that is a matter which should command the attention of the Chancellor of the Exchequer. In regard to the local authorities—certainly those of England and Wales—the two collections of local taxation have been merged into one, and the ratepayer receives a demand note which comprises the poor rate and the district rate, each of which was collected separately in former times. I earnestly ask the Chancellor of the Exchequer to consider this aspect of the matter. The lumping together of these taxes is simple and educative, and it would effect a very large saving. I venture to think the officials who now levy Income Tax have become used to the rules relating to Super-tax. It would he a mere matter of accountancy to add the requisite sums to the demand notes and we would get rid of the establishment which at present flourishes in Kingsway and keeps a very large and expensive building and has a very large and expensive staff. That would be a beginning of economy without the least interference in Government work, and I hope the Chancellor of the Exechequer will consider it.

    I think I shall not stray without the ambit of your ruling, Mr. Chairman, in referring to one or two of the arguments which have been advanced from the opposite benches. I would like in this direction to animadvert for one moment to the argument employed, first of all, by the hon. Member for Mossley (Mr. Hopkinson) and supported by the hon. Member for Canterbury (Mr. R. McNeill). Their argument was, in brief, that the incidence of Income Tax should be heavier in exact proportion to the decline in income, and that those possessing small incomes should be taxed in a heavier degree than those possessing larger incomes, because in the case of the larger incomes more money was saved annually and re-invested. That remarkable argument was hailed with satisfaction by the hon. Member for Canterbury as sound economics. He pointed out in support of his belief that sound economics had no concern with equity. That is quite true, but sound economics are greatly concerned with efficiency. Efficiency, in fact, might be described as the keynote of sound economics. No one would contend that the heaviest pressure of taxation should be directed against those members of the community who have to contribute by their labour to the production of the wealth of the country, and that this would conduce to those sound economics which are desired by the hon. Gentleman. The contention of the hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood), to the effect that the suspension of the Sinking Fund in order to provide remission of Income Tax did not contribute to the end which the Government had in view, namely, the stimulus of trade, was greatly scoffed at from the opposite benches, but surely it is evident that the release of capital which, in all probability, would be re-invested in industry must conduce more to the stimulation of trade than a remission of taxation.

    There are separate provisions in connection with the suspension of the Sinking Fund, and I think, on the question now before the Committee, the hon. Member must confine himself to Income Tax.

    I bow at once to your ruling, Sir, but I may point out, as a matter of order, that all this has been debated at great length in the course of this particular discussion, and it is difficult for me to know exactly in whose footsteps I may tread and in which direction I am debarred from going. The argument was advanced that this remission of Income Tax which we are now discussing was obtained by a raid upon the Sinking Fund, and consequently that this remission was unsound finance. Am I to understand that we are debarred from debating the methods by which this reduction is obtained?

    The hon. Member states that a certain argument was adduced in the course of this discussion. It would be obviously unfair to prevent him referring to that, but I must ask him not to go beyond the matter iself.

    On a point of Order. If an hon. Member is desirous of answering remarks made by another hon. Member opposite, will he be entitled to do so no matter whether his argument conies under the specific head of Income Tax or not?

    That is a large proposition, and I am not desirous of pronouncing a universal opinion which will hold good in all cases. The hon. Member for Harrow (Mr. Mosley) mentioned a concrete argument which has been put forward, and I cannot refuse to allow him to answer it, but hon. Members must not go beyond the scope of this Clause in any further arguments they may adduce.

    I hope to keep within your ruling, Mr. Chairman. I was only going to answer the attempted refutation of the argument advanced. It is said that in the release of capital which has been invested in Government securities there is a far greater probability that the capital so released will be invested for the promotion of enterprise and industry. The argument is that it is more likely that capital so released from Government securities will be re-invested than that the shilling given to the taxpayer by this remission will in all cases and invariably be invested and so promote trade revival. It must be evident that it is not on those grounds that we can base our demand for a lower Income Tax. Then, again, with very great confidence, another argument of the hon. and gallant Member for Newcastle-under-Lyme was rebutted from the opposite benches—his argument that the remission of indirect taxation as opposed to Income Tax, was equally efficacious in the matter of the stimulation of trade. The hon. Members opposite pointed out that in a remission of Income Tax the money not demanded of the taxpayer is more likely to be invested in industry than a remission of taxation to the indirect taxpayer, who will probably spend the money, but those advancing that argument altogether ignore the fact that all indirect taxation must raise the cost of living and that, wages being based upon the cost of living, the cost of production must inevitably he raised by indirect taxation. In fact, it is, if anything, more inevitable that the cost of industry should be raised by indirect taxation than by direct taxation, because if it be admitted that direct taxation raises the cost of production, then another argument of the hon. and gallant Member for Newcastle-under-Lyme is admitted, that the direct taxpayer who is engaged in commerce is not paying the tax out of his own normal income but is handing the tax on to the consumer.

    I rather disagree with that argument. I think that in very many cases the tax is being paid out of the normal income of those engaged in the promotion of industry and that consequently it is not handed on to the consumer, and therefore the cost of production is not raised in all cases by direct taxation, but it must inevitably be raised in every case by indirect taxation, which raises the cost of living and consequently raises the cost of wages. I therefore cannot follow the arguments of those who assert with such confidence that a remission of direct taxation is very much more conducive to a trade revival than a remission of indirect taxation. We must face the fact that the greatest stimulus of all to trade is the repayment of debt, in that capital is released for investment, and beyond that we must recognise that much of taxation which is remitted will be spent on things that are unnecessary, and if money is spent by the individual on things that are unnecessary, it is just as badly spent, or very nearly as badly spent, as if it were spent by the State. If a rich man who has received a remission of taxation of, say, £1,000 spends that money this autumn on a deer forest, trade will no more be stimulated than if it was spent on battleships by the State. Any luxury or unnecessary expenditure in times of economic stress, whether by the State or the individual, is equally vicious, and we cannot possibly contend that industry will benefit through money—

    The hon. Member is now embarking on an uncharted sea, and I really must ask him to keep to the point.

    I certainly will not pursue that argument. I have contented myself with rebutting some of the extreme arguments, as I consider them, from the other side in favour of this reduction of direct taxation as opposed to the payment of Sinking Fund and the remission of indirect taxation, and I will now con-elude by saying that in my view the real benefit from a remission of 1s. of the Income Tax is a psychological benefit rather than anything that is materially conducive to a trade revival. I think it has this effect, that when taxation is lower, when direct taxation on men's earnings or on the interest on their money which they may have invested in enterprises, often of a speculative character, is reduced, they have a greater incentive to embark upon fresh enterprises, and enterprises which are of a speculative character, and in the event of success may open up vast new sources of work for the development of mankind; and so, as a psychological move, I welcome the remission of 1s. of direct taxation. That psychological benefit is equal, of course, in the case of a remission of indirect taxation, but I agree essentially with the remarks that have been voiced from all quarters of the Committee to the effect that a reduction, an all-round reduction, of taxation, involving a great psychological benefit to trade and industry in this country, is essential, and also that it is equally essential that debt should be repaid for the release of capital for the enterprises which are now so vitally necessary. On those grounds, I think we are entitled to press for a reduction of Government expenditure and to vote for any reasonable reduction of taxation on the ground that cutting off the supply is the only possible method of making this Government economical.

    Question, "That the Clause stand part of the Bill," put, and agreed to.

    CLAUSE 11 (Computation of profits under Case III of Schedule D) ordered to stand part of the Bill.

    Clause 12—(Income Tax On, Offices, Employments And Pensions To Be Chargeable Under Schedule E)

  • (1) Such profits or gains arising or accruing to any person from an office, employment or pension as are, under the Income Tax Act, 1918, chargeable to Income Tax under Schedule D (other than the profits or gains chargeable under Case V of Schedule D, or under Rule 7 of the Miscellaneous Rules applicable to Schedule D), shall cease to be chargeable under that Schedule and shall be chargeable to tax under Schedule E, and the Rules applicable to that Schedule shall apply accordingly subject to the provisions of this Act.
  • (2) Rule 2 of the Rules applicable to Cases I and II of Schedule D (which relates to the assessment and charge of weekly wage-earners), shall be deemed to be one of the Rules applicable to Schedule E.
  • (3) Rule 7 of the Rules applicable to Schedule E (which relates to the charge of tax in respect of offices and employments of profit held under a railway company), shall apply to all offices and employments held under and pensions paid by, a railway company:
  • Provided that nothing in this Sub-section shall affect the provisions relating to the quarterly assessment and the collection of Income Tax in the case of weekly wage-earners employed by way of manual labour.

  • (4) Paragraph (5) of Rule 18 of the Rules applicable to Schedule E shall have effect as though the words "or in which he is employed" were inserted at the end thereof.
  • (5) The following paragraph shall he inserted at the end of Rule 5 of the Rules applicable to Schedule E: "If any person proves to the satisfaction of the Commissioners concerned that the amount for which an assessment has been made in respect of his salary, fees or emoluments for any year of assessment exceeds the amount of the salary, fees or emoluments for that year, the assessment shall be adjusted and any amount overpaid by way of tax shall be repaid."
  • (6) The provisions of Sub-section (1) and Sub-section (3) of this Section shall have effect and shall be deemed always to have had effect, for the purpose of any assessment to Income Tax which is made or becomes final and conclusive after the first day of May, nineteen hundred and twenty-two, in respect of any employment (other than that of pa weekly wage-earner employed by way of manual labour) under any public department, or under any company, society or body of persons or other employer mentioned in Rule 6 of the Rules applicable to Schedule E.
  • (7) Income Tax in respect of profits or gains which would, but for the provisions of this Section, have been chargeable under Schedule D for the year 1922–23, may be charged for that year either under Schedule D or under Schedule E, but the tax shall in all cases be computed in accordance with the provisions and Rules applicable to Schedule E as amended by this Act.
  • The Amendment in the name of the hon. and learned Member for Moss Side (Lieut.-Colonel Hurst) and other hon. Members—[at the end of Subsection (1) to insert the words

    "Provided that allowances granted under Royal Warrant to a widow in respect of her children shall not be treated as forming part of the pension or income of such widow for the purposes of her assessment for Income Tax, and shall cease to be so chargeable as against her"]—
    would have to come as a new Clause.

    I beg to move, in Sub-section (2), after the word "wage-earners," to insert the words

    "have effect as though after the word 'quarter,' where that word secondly occurs, there were inserted the words less any cost of travelling to and from their places of employment,' and such rule as amended by this Sub-section."
    When, during the War, the wage-earners were made subject to the Income Tax, they were granted a concession whereby a man could deduct from his wages, in the amount of assessment to Income Tax, the cost of travelling to and from his work. This concession was made mainly because of men having to remove during the War very large distances from their homes to their work, and now we are afraid that the Chancellor of the Exchequer has not got a proper understanding with regard to the situation that still continues. The concession was made at that time in the form of a Regulation, and the object of my Amendment is to continue that concession, on the ground that the conditions that obtained during the War have not yet been removed and will not be removed for some years to come. There may be other hon. Members who will be able to speak for their own districts, but I speak more directly for the industrial district of South Wales, both in regard to mining and other industries. Take mining industry houses, which are still very scarce. We have men travelling from Cardiff, Barry, Swansea and Newport almost to the ends of the valleys, and especially the valleys converging on Cardiff. They travel distances of 22 to 28 miles from their homes to the pits. That means that where they are living at Cardiff, or Llandaff, or anywhere around the Barry district, where houses are more plentiful than with us in the valley, it entails upon those men a cost of anything between £22 and £28 per annum to enable them to carry on their occupation. At a time like the present, when the cost of living is so high, they can ill afford that sum. The point may seem a small one to the Chancellor, but it is a very important one indeed to those men, who are forced to live a long distance from their work. It is a question of equity and justice as between them and the people in other spheres of life. Commercial people are allowed to put their expenses against their assessment of Income Tax, and it would only be a measure of justice and equity to these people that they should be allowed to account for any money they are paying to enable them to fulfil their occupation at the collieries, and thus be treated on exactly similar lines as other people in the country.

    It is quite true that this concession was made during the War, particularly owing to the necessity of large bodies of men leaving their homes and going, in some cases a great distance, to work at munition works especially. It was a concession made without statutory authority, and strictly speaking, was illegal. But it was made in order to meet the peculiar exigency of that time. The hon. Member who has moved the Amendment has moved it on the express ground that it is fair to put wage-earners, whose Income Tax is assessed quarterly, on the same footing in regard to expenditure as other classes of the community. That ground, of course, would have been a ground of almost irresistible force had it been a well-founded ground. But that is not the case, and, indeed, anticipating that possibly some question of the kind might arise, I took the trouble to bring here the leading book on the subject of the Income Tax Acts, in order to tell the Committee exactly what the legal position is. It has been quite clearly decided for many years, and is undoubtedly the law, that travelling expenses cannot be deducted. There was the case of a solicitor who carried on his profession at Worcester, and, on certain days of the week, had to go to a neighbouring town some distance away, where he was clerk to the Justices, and he was told that those travelling expenses could not be deducted. In the same way, directors who live at a distance from the offices of companies where board meetings take place, are not allowed to deduct expenses in going from their house to those offices.

    That being so, the main ground upon which the appeal to the Committee is made that wage-earners should be put upon the same footing as other people, not only fails, because it is not based upon a true appreciation of the actual position, but, indeed, it has exactly the opposite effect. To grant the Amendment would be to put this particular class of Income Tax payers, who pay on a quarterly assessment, on a different and privileged footing as compared with everybody else. When this concession was made during the War, to meet the peculiar case of the munition workers, other people in a very similar position, but not the same, made complaint that they were not given the same privilege. Those complaints, I am informed, have been very frequent from various classes of Income Tax payers, who think that their position is similar to that of the wage earners. Consequently, it was felt that, as the wage conditions began to recede into the background, although I appreciate that, in regard to housing, the position is still not normal, yet a time came when it was essential to deal with the matter of principle, in order that all Income Tax payers might be put on a footing of equity in regard to the basis of their assessment. Mr. McKenna, the Chancellor of the Exchequer who introduced it, authorised it as a purely temporary concession, and this year it has been expressly stated by the Chancellor of the Exchequer that, after due consideration, it was felt quite impossible to continue the concession as a special privilege to a particular class. There always must come a point of time where, as a matter of degree, you cannot say that the particular grievance continues to any extent as to justify peculiar and exceptional treatment.

    May I say that the grievance has existed for many years in our district so far as the scarcity of houses is concerned, and that there is no analogy between the case of director travelling from his residence to his office in Cardiff or elsewhere and the workman who has to travel 24 miles to his work at the colliery?

    The case I took, I think, covered the case of the solicitor who is not entitled to make the deduction, and directors' position is the same. The Committee must take it there is no question of doubt about this; that the law is that travelling expenses cannot be deducted. Any idea that in any other classes of the community travelling expenses are allowed is erroneous, and the claim put forward cannot be put upon those grounds. If it be said in answer to the argument I put forward that it ought to be made general that travelling expenses should be treated as a deduction, then I would like to quote the findings of the Royal Commission upon Income Tax, which we all recognise was an extraordinarily impartial body and which made a Report which was received with a very wide measure of general approval. That Commission said

    "Travelling expenses incurred by the taxpayer in going from his place of residence to his business should not, in our view, be our allowed. The question of travelling expenses is one which reacts on other private expenses, such as the expenditure on rent and rates. It is more truly an expenditure or disposal of income than an expense essentially necessary to earn the income. We are of opinion that a general allowance for travelling expenses would result in very grave inequity."
    There is another observation to be made, that one of the reasons present with the Royal Commission in expressing that opinion was that it is a very difficult thing indeed to deduct this. I cannot help feeling sympathy with the hon. and gallant Mover of this Amendment. I know the Rhondda Valley and the difficulties there. The valley is very narrow. There is no room for more houses, and you cannot put them on the tops of mountains. The result is that the workman has to go considerable distances, I know, in many cases. It is a hardship, but for all that you cannot make a general rule of this kind applicable to a vast number of taxpayers unless you make it general. You cannot do that merely because there is one particular small section in a particular locality that, under the existing law, feels a particular hard- ship. I express sympathy, and I regret, on behalf of the Government, I am not able to express anything more.

    The Solicitor-General has expounded to us the law on this question. But it would appear to me that it is desirable to consider aspects of this question other than the purely legal aspects. The law as it is now is not necessarily above Parliament. Parliament can elevate itself above the la The law is what it is now because Parliament made it. This Order Paper in my hand is strewn with Amendments—this one at least being in order—proposing an Amendment of the law. It is not a sufficient answer to that Amendment to tell us what the law is, and to cite the practice that has so far been pursued. If these Amendments are in order in relation to the Bill which the Committee is now considering, it is within the province of the Committee to determine to change the law.

    If that is so, may I suggest that the case which my hon. and gallant Friend has put forward is a case for justice, and a case to judge in view of the different circumstances which have arisen. My hon and gallant Friend himself would be the first to admit that the law is against the workman in these expenses, and, therefore, my plea that the case is one for argument in view of the circumstances which now prevail. The workmen have no choice in these matters. The compulsion which drives them to travel many miles to their labour is a compulsion which penalises them, and they may be penalised to the extent of £20 or £30 in the year in paying travelling expenses to their employment in comparison with their fellow workmen who live close to their colliery, steel works, or other employment.

    What does the Amendment propose? It is not to confer a privilege, but to remove a disability; to remove a real grievance and to create a state, not of favour or privilege, but of equity. That is what it aims at. I cannot believe that the administrative difficulties are insuperable.

    The right hon. Gentleman will forgive me for intervening, but in what way would he suggest he could differentiate in the cases? I have myself said that I recognise the hard case of the Rhondda Valley, but there are other cases, and what is to prevent us, once we start, giving this concession as a general thing to everybody?

    There must be some limit fixed—a low limit if you will—below which there would be no allowance for expenses. That is commonly done in connection with the numerous exceptions and exemptions which are strewn over the Income Tax paper which we receive. The House has, throughout all the handling of these questions in relation to every form of tax, shown consideration in cases of hardship where there are groups of persons or even individuals treated rather hardly by the incidence of the law. There is exemption for this, and for that. There is this exception and the other exception. In this case we are asking, as I said, not to put men into a privileged position, but in a position of something like equality with the neighbours who have not to travel and who earn the same wage. The position of the man who travels is that he is expending certain sums to earn his living, and that in order to get a certain income he must incur a certain expenditure. The claim in this Amendment is not to impose a tax upon that part of the workman's wage which he must pay in fares. This to him is really not income at all. He does not get any benefit whatever from it. If the country taxes him upon what is left after he has received his money and met the cost of travelling, then, I think, so far as any Government reasonably can give consideration, they should do so.

    The illustration adduced by my right hon. Friend does not at all destroy the argument upon which this Amendment rests. I cannot imagine the Commission in the instances cited having in mind the workman. The Report speaks not of the workman's labour or his work, but of a man's business. When we are speaking of workmen's employment we do not speak of the workman's business at all. It is only when we come into the regions of business, in which a man earns not a few pounds a week but hundreds, and in some instances thousands, a year, that we talk of business. Clearly, what the Commission had in mind was the case of a man's business, and to allow him no remission of Income Tax from that item of his income which was incurred in the pursuit of his business. That, however, is a different thing altogether from considering the case of the workman, and his ordinary means of employment.

    There is another point. These fares are very much higher than they were, and distances are much longer. Housing and social conditions in industrial centres have driven the worker further and further away from his place of employment, so that in both ways the total cost has been very much increased until now it is considerably more than it used to be in the case of many workmen. If it be true that this only applies to odd cases, and a few instances in certain sections and parts of the country, then the revenue would lose very little by doing a just thing to those few who are affected. I am not, however, adducing that as an argument, but I wish to point out that there is a tendency more and more for an ever-increasing number of workmen to be forced into incurring costs in order to travel to and from their employment. If the workmen could get a house near to his work, or if he could get employment near to his house, there would be something to be said for the argument of the Solicitor-General in regard to treating all people alike. I suggest that no Commission, no law, and no precedent stands in the way of the Government accepting this Amendment, which clearly is aimed not at putting any class in a position of privilege, but would have the effect of placing every section of workman in exactly the same position.

    It would be very wrong if any hon. Member got the impression that there was a lack of sympathy on this question with the miners employed in the Rhondda Valley.

    I hope the hon. Gentleman will not think that I was confining my proposal to the miners. I did not refer to other sections of workers because I did not want to bore the Committee by citing other cases.

    My hon. and gallant Friend has anticipated my point. I hardly think the right hon. Gentleman (Mr. Clynes) has displayed his customary clearness of thought in suggesting that particular persons who travel to their work are entitled to any special consideration. In my constituency a number of people are obliged to live in very hot, close, and expensive dwellings in order to be near their work. This Amendment might allow them to go and live in the country and save about 10s. a week. A season ticket might amount to about 10s. a week. A man could deduct that from his expenses, and then he could practically live rent free, and that would mean taxing those who have to live near to their work for the benefit of those living in more healthy surroundings.

    So far as the Rhondda miners are concerned, I think the right remedy is that they should be paid a wage appropriate to the place in which they live, and to the circumstances under which they offer their labour to the industry. Unfortunately, owing to the mistaken idea of a national settlement, these local considerations are precluded from having proper weight given to them, but it would be a complete fallacy to suppose that a person who has to incur expenditure in railway travelling is entitled to greater consideration in this respect than a man who has to maintain an expensive house in the country or in the city. Some people would like to live near the Houses of Parliament, but they cannot afford it. Some people might think it desirable to live near St. James's Park, but some of us have to be content to live in less attractive and cheaper parts. Why should we be given an allowance in respect of our travelling expenses because we cannot, live in an expensive house near St. James's Park? However well-intentioned this Amendment may be, I am sure it would produce an intolerable anomaly in the Income Tax law.

    9.0 P.M.

    I hope the Committee will not be led away by the illustration put forward by the last speaker. The Clause itself deals with weekly-wage earners. The hon. Member for Central Bristol (Mr. Inskip) would have us believe that there are wage-earners earning wages sufficiently high to allow them to live in the vicinity of St. James's Park, but such an argument is too ridiculous for words. The Solicitor-General has some sympathy with us, but his sympathy is very much like mustard without beef to the hungry man. We require some more practical sympathy. In the course of his remarks the Solicitor-General said that there must be a point of time when these War concessions should cease, and I entirely agree with him. I want to submit very sincerely that there could not be a more inappropriate moment to dispense with this War concession than the present time.

    The difficulty as far as housing is concerned has been put by one or two other speakers. I want to draw attention to the fact that, besides travelling from day to day to their employment, there are many people who travel day after day into the various cities and towns trying to get employment, paying travelling expenses, and finding nothing to do, and they go home and come again very often the following day. They have to keep coming in order to see whether there is any employment for them. It appears to be nothing to the Solicitor-General that railway rates 'are still as high as ever they were. On the other hand, what have working men been experiencing? There has been a constant demand that if we are to stimulate trade and economise the only thing to be done is to cut down the wages of the working classes, and the result has been that wages have been decreased on every hand. The wages of some workers have gone dawn considerably and their travelling expenses have not, decreased one iota. This is an increased burden on these people, and I want the Solicitor-General to view the matter in that light and give to these people some concession, thus removing a hardship which they are experiencing in this connection.

    I want to deal with this question from quite another point of view. Supposing these workmen do not pay their own fares and the company provide the travelling facilities. It can hardly be argued that the company in that case is debarred from charging that to the general account for carrying on the business, and thereby reducing the balance which ultimately pays Income Tax. What difference does it make whether the tax is deducted from the earnings of the worker or from the profits of the company? I quite recognise the difficulty of the Solicitor-General, but I think, if he would view the matter from the point of view I have suggested, he would be bound to admit that the cost of conveying these workmen would be a legitimate charge on the cost of running the concern, and therefore it would be deducted from the amount on which Income Tax is payable to the Government. Surely that is exactly equivalent to the tax being remitted as against the worker. I recognise the difficulty of establishing any general rule. What I suggest is this, that under the Income Tax Act a fairly wide discretion is left to the officials to assess each case according to its merits, and where there are really bonâ fide grounds for a man having to travel some distance to his work, and where there is no responsibility on the part of the employer to find accommodation for the man near his work, then I submit the remission of the tax on the travelling costs of the man would be perfectly legitimate. I hope, before the Committee stage on this Bill is reached, the hon. and learned Gentleman will consider whether some such discretionary power cannot be given.

    May I offer something in the nature of a reply to the suggestion made by the hon. and learned Member for Central Bristol (Mr. Inskip). Surely if a private firm for its own benefit were sending out men to work on a job and the railway fares of those men were paid by the firm the sum so paid would go on to the wages sheet and no Income Tax would be charged upon it in any way. I see no difference between that and the workmen themselves who receive no income at all being relieved of the tax. I want to call the attention of the Committee to the fact that the workmen never really receive this income. Can it make any difference to the State whether it be the employer who charges the fares on his wages sheet and does not pay Income Tax upon them or whether the worker himself is relieved of the burden of paying Income Tax on his travelling expenses. In the wildest estimate that I can make by the use of pencil and paper, I can scarcely get beyond an average charge of 10s. per week for railway fares. That for 52 weeks in the year represents a total of £26, and a 3s. Income Tax on that, 3s. being the usual amount paid by workmen, produces the magnificent sum of £3 I6s., a sum no doubt of considerable importance to the poor worker, but quite inadequate to enable him to go out on the Mendip Hills to live there by taking advantage of rebate he gets from his Income Tax. There ought to be some perspective and some reason in the arguments put forward, and to talk of men being enabled to live on the Mendip Hills out of their savings from Income Tax is surely drawing the long bow in a way the hon. and learned Member for Central Bristol very seldom does. I want to appeal to the Government to accept this Amendment for still another reason. Not only does the workman never receive this sum as income which we claim he ought to have deducted from his Income Tax, but the mere fact that he must live away from his work makes him spend more time every day in travelling to his work. A man who can get a home near the place where he works, is far better off than the man who lives farther away and who not only has to pay Income Tax, but has to spend his own time in travelling to and fro. From the point of view of equity, justice and elementary fairness, I appeal to the Solicitor-General to accept this Amendment.

    I am much disappointed at the attitude taken up by the Solicitor-General. There is a good deal to be said for the Amendment as far as miners and iron workers are concerned. In my own district we have men who travel a considerable distance to work for two reasons. In the first place they desire to have the benefit of living in a town and of the use of the educational facilities therein provided. The other reason is that at the collieries where they are employed there are no houses to be had, and they are therefore forced to go into the towns to live. The sum paid by a man for travelling to and from his work is really a deduction from his wages. There is no doubt about that. In cases with which I am acquainted, in Lanark for instance, men have to travel a considerable distance by train and it costs them a good sum every year in that case. The sum ought to be charged in such a way as not to be subject to Income Tax. One hon. Member just now spoke of the cases of men who travelled to and from their work at the expense of their employers. I would like to bring to the attention of the Solicitor-General the case of painters and other tradesmen, men who have to go a distance into the country to do work and who are taken there by motor cars, the cost of which is charged against the employer and is not liable to Income Tax at all. What is the difference between an owner taking the men to their work and the man himself paying the fares to his work. I know that in some cases men do not desire to live near the collieries, because they prefer the comforts afforded by towns. Surely, however, when men have to travel for a long distance, something might he done by way of an allowance, not, perhaps, to the extent of all that they pay but to a certain extent, in connection with Income Tax. After all, it is only fair that a man who has to pay for getting to and from his work, because he cannot get a house there or for other reasons over which he has no control, should have an allowance made to him on his Income Tax. Therefore, I appeal to the Government, while they may not be prepared to accept the Amendment on the Paper, to bring in on Report a Clause providing for some modification in the case of these men who are certainly compelled to pay more than they ought for getting to and from their work.

    I trust that the Government will not accept this Amendment. What are the real facts in connection with it? A man lives some distance from his work—I understand that the hon. Gentleman was alluding to men who live permanently at some distance from their work—either because he gets his house cheaper, or because it suits him better for some other reason. In these circumstances, why on earth should he be excused from paying Income Tax? It has been mentioned that there are many cases in which the employer pays the workman's travelling expenses, and no doubt that is the case; and, as has been pointed out by the hon. Member for North Lanark (Mr. R. McLaren), this will relieve the employer of paying the workman's expenses. It is desired to shift that on to the Exchequer. As an Income Tax Commissioner I have had some experience of the working of the Income Tax Acts. In many cases people say that their income is so-and-so, but the surveyor says that it is a considerably larger amount, and I, as a Commissioner, have asked how these two statements are reconciled. "Oh," they say, "the surveyor is quite right, but we have deducted the cost of living before we think we ought to pay tax." This is not an isolated case. It has come before me, during the last six months, at least seven or eight times. With this idea prevailing, nothing could be more mistaken than to begin to introduce something which will enable a man to say, "My travelling expenses are free of tax; why should not my tailor's bill also be free? It is just as necessary for my work that I should wear clothes, and, therefore, the cost of clothes ought to be deducted." There is no greater mistake than to make all these concessions. Over and over again people come to me and say it is unfair that they have not been included in the exemption. You not only do no good, but you create a spirit of grievance. If Jones has been exempted, and Smith, because he does not live so far from his work—though he may pay 2s. or 3s. a week more for his house—is not exempted, he has a grievance. Therefore, I trust that my hon. and learned Friend will adhere to the proposal in the Bill.

    The right hon. Baronet who has just sat down has told us that he has had considerable experience of the working of the Income Tax Acts.

    I fear that he will require to get a little more experience still, because he has entirely missed the point raised by my hon. Friend, even having regard to his own experience. The right hon. Baronet, as everyone knows, is interested in railway companies. Railway companies carry their men every day many miles from their homes for the purposes of their work. These men are carried free. The railway company pay whatever cost is incurred thereby, and the railway company are not charged Income Tax on the cost of carrying those workmen.

    The railway company do not carry them to and from their work if they live at a distance from their work. All that the company do is this: If they want to send a man, say, from King's Cross to Peterborough, or to bring him back, they do so, but they do not carry him to and from his own house.

    The railway companies convey hundreds of men every day to and from particular points for the purpose of their work, and they do not charge them for travelling. My point is that the cost of that to the railway company escapes Income Tax, whereas the individual workman who has to travel 20 or 30 miles in the Rhondda Valley or elsewhere—because this is a matter that affects workmen all over the country—the individual workman who has to travel 5, 10 or 20 miles to his work has to pay his fare, and he is charged Income Tax on the money that he has paid. That is an unfair position in which to place the workman. On the broad general ground of justice, the Chancellor of the Exchequer and the hon. and learned Gentleman who is assisting him in the conduct of this Bill ought to accept this Amendment. It will simply be placing a section of the workmen of this country in the same position as their fellow-workers. There are men living near their work who have not to bear this burden. It is placed upon those who have to bear it, because of the fact that they cannot get housing accommodation near their work. There is also another large section of the workmen of this country who have their travelling expenses paid. That means that the section with which this Amendment deals are placed in an unfair and unjust position as compared with their fellows, and that ought to be remedied. The Chancellor of the Exchequer can very easily remedy it. It would not cost a very large sum. I know that the Chancellor, under the conditions which surround us for the time being, has no very large balance upon which he can draw. He has, however, a sufficiently large balance to enable him to give to the section of the workers who are covered by the Amendment this measure of justice. It is purely and simply a measure of justice for which we are asking, and it is something which the Chancellor of the Exchequer ought to give and is able to give.

    I think the Committee would like me to say just a word in reply. Take the case of London. There are a vast number of men in London who have to travel backward and forward every day to their work. Some of those men are engaged in manual labour. To those men, and to those men only, this Amendment will apply.

    Yes. It is an Amendment of the rule of the Income Tax Act, which is limited to weekly wage-earners employed by way of manual labour only. There are, in addition to those men who travel backward and forward to their work in London from the suburbs, or wherever they live, a vast number of clerks who do not earn one penny more in the week or the year than many of the manual workers. Not one of those men would get the benefit of this Amendment.

    What would be more invidious than that there should be two men sitting side by side in the same train, a manual worker and a clerk, and that one of them should have this exception and the other should not? To give the advantage of the Amendment to the manual worker alone would cost £250,000. To extend it to all those who earn similar incomes, but not by way of manual labour, would add enormously to the cost of the Amendment. If you gave it to, those people, you would at once get a claim from the next grade higher to get the benefit of the Amendment also. Then we should all get it, and the general result of our all getting it would be that something extra on the Income Tax would have to be imposed all round.

    The, truth of the matter is that the position of apparent, hardship in cases such as have been mentioned is met by the system of the Income Tax Acts having a graduated scale of payment and extra allowances in exemptions at the lower end of the scale. Most of the workers in regard to whom the Amendment is urged are men who would be in the neighbourhood of the lowest rates of those who have to pay tax at all. They would be on the 2s. 6d. rate, and many of them would have very large exemptions, and would have to make very small payments in consequence. All that can be done in taxation is to treat everybody alike. There must be some cases of hardship, and I assure the Committee that this Amendment is one which will be utterly impossible to work in practice, even with fairness to those who apparently come within it.

    I do not feel that we can allow such an interpretation of this Amendment to go by without some sort of protest. I have yet to learn that it is possible to read into it any such meaning as the Solicitor-General seems to imply; because a wage-earner is a wage-earner, whether he is fighting for it at a dock gate or on a daily job one day in 10, or whether he is drawing what you are pleased to call a salary. If it can be proved in legal phraseology that this Amendment has that limiting power and effect, then I am quite certain it is foreign to the intention of all those who have it at heart. After all, we on this side of the Committee and hon. Member's on the other side have our differing opinions as to who should pay the burden of' taxation. We will be perfectly frank about it, and say that the struggle is unceasing and will he ceaseless until the cost is borne by those best able to shoulder it. Until the time when Income Tax is paid by those best able to bear it, we shall press this Amendment continuously until we get some kind of consideration. I have received dozens of letters from men who are paying many shillings a week more than the ordinary worker mentioned in order to keep up an appearance, although the Solicitor-

    Division No. 159.]

    AYES

    [9.34 p.m.

    Acland, Rt. Hon. Francis D.Guest, J. (York, W. R., Hemsworth)Raffan, Peter Wilson
    Adamson, Rt. Hon. WilliamHall, F. (York, W.R., Normanton)Rendall, Athelstan
    Ammon, Charles GeorgeHalls, WalterRichardson, R. (Houghton-le-Spring)
    Banton, GeorgeHartshorn, VernonRoberts, Frederick O. (W. Bromwich)
    Barker, G. (Monmouth, Abertillery)Heyday, ArthurRobertson, John
    Barnes, Major H. (Newcastle, E.)Hayward, EvanRose, Frank H.
    Barton, Sir William (Oldham)Henderson, Rt. Hon. A. (Widnes)Royce, William Stapleton
    Bell, James (Lancaster, Ormskirk)Hirst, G. H.Sexton, James
    Benn, Captain Wedgwood (Leith)Hodge, Rt. Hon. JohnShaw, Thomas (Preston)
    Bowerman, Rt. Hon. Charles W.Hogge, James MylesShort, Alfred (Wednesbury)
    Bramsdon, Sir ThomasHolmes, J. StanleyStich, Charles H.
    Briant, FrankIrving, DanSpencer, George A.
    Bromfield, WilliamJohn, William (Rhondda, West)Spoor, B. G.
    Brown, James (Ayr and Bute)Johnstone, JosephSutton, John Edward
    Cairns, JohnJones, J. J. (West Ham. Silvertown)Swan, J. E.
    Cape, ThomasJones, Morgan (Caerphilly)Thomas, Rt. Hon. James H. (Derby)
    Carter, W, (Nottingham, Mansfield)Kennedy, ThomasThomson, T. (Middlesbrough, West)
    Clynes, Rt. Hon. John R.Kiley, James DanielThorne, G. R. (Wolverhampton, E.)
    Cowan, D. M. (Scottish Universities)Lawson, John JamesThorne, W. (West Ham, Plaistow)
    Davies, A. (Lancaster, Ciltheroe)Lunn, WilliamWalsh, Stephen (Lancaster, Ince)
    Davies, Alfred Thomas (Lincoln)McLaren, Robert (Lanark, Northern)Waterson A. E.
    Davies, Rhys John (Westhoughton)Maclean, Neil (Glasgow, Govan)Watts-Morgan, Lieut.-Col. D.
    Davison, J. E. (Smethwick)Maclean, Rt. Hn. Sir D. (Midlothian)Wedgwood, Colonel Josiah C.
    Edwards, C. (Monmouth, Bedwelity)MacVeagh, JeremiahWhite, Charles F. (Derby, Western)
    Edwards, Hugh (Glam., Neath)Mills, John EdmundWignall, James
    Entwistle, Major C. F.Murray, Hon. A. C. (Aberdeen)Williams, Col. P. (Middlesbrough, E.)
    Finney, SamuelMurray, Dr. D. (Inverness and Ross)Wilson, James (Dudley)
    Foot, IsaacMyers, ThomasWood, Major M. M. (Aberdeen, C.)
    Galbraith, SamuelNaylor, Thomas EllisYoung, Robert (Lancaster, Newton)
    Gillis, WilliamNewbould, Alfred Ernest
    Graham, D. M. (Lanark, Hamilton)O'Grady, Captain James

    TELLERS FOR THE AYES.—

    Graham, R. (Nelson and Colne)Parkinson, John Allen (Wigan)Mr. Walter Smith and Mr. T.
    Graham, W. (Edinburgh, Central)Poison, Sir Thomas A.Griffiths.
    Grundy, T. W.

    NOES.

    Adkins, Sir William Ryland DentBarnston, Major HarryBridgeman, Rt. Hon. William Clive
    Agg-Gardner, Sir James TynteBarrand, A. R.Briggs, Harold
    Amery, Rt. Hon. Leopold C. M. S.Barrie, Sir Charles Coupar (Banff)Broad, Thomas Tucker
    Armitage, RobertBartley-Denniss, Sir Edmund RobertBrown, Brig.-Gen. H. C. (Newbury)
    Armstrong, Henry BruceBeckett, Hon. GervaseBuckley, Lieut.-Colonel A.
    Astbury, Lieut.-Com. Frederick W.Bell, Lieut.-Col. W. C. H. (Devizes)Bull, Rt. Hon. Sir William James
    Atkey, A R.Bellairs, Commander Carlyon W.Campion, Lieut.-Colonel W. R.
    Baird, Sir John LawrenceBigland, AlfredCarr, W. Theodore
    Baldwin, Rt. Hon. StanleyBirchall, J. DearmanCasey, T. W.
    Balfour, George (Hampstead)Bird, Sir William B. M. (Chichester)Chamberlain, Rt. Hn. J. A. (Birm, W.)
    Banbury, Rt. Hon. Sir Frederick G.Blake, Sir Francis DouglasChamberlain, N. (Birm., Ladywood)
    Banner, Sir John S. Harmood-Borwick, Major G. O.Cheyne, Sir William Watson
    Barlow, Sir MontagueBowles, Colonel H. F.Churchman, Sir Arthur
    Barnes, Rt. Hon. G. (Glas., Gorbals)Bowyer, Captain G. W. E.Clough, Sir Robert
    Barnett, Major Richard W.Breese, Major Charles E.Coats, Sir Stuart

    General suggests that they are not the type of worker we have in mind. These men are paying something like 8s. 6d. a week to the railway companies out of their earnings, yet they are not allowed one penny more in the way of reduction in Income Tax. Whether or not the Solicitor-General reads the Amendment in this way, that certainly is not the intention of those hon. Members who support it. If his contention is proved to be right, then, at some stage or other, we shall have to make clear, by some other Amendment, what is the intention and effect of the proposal mow before the Committee.

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

    The Committee divided: Ayes, 96; Noes, 243.

    Cobb, Sir CyrilHunter-Weston, Lt.-Gen. Sir AylmerReid, D. D.
    Cohen, Major J. BrunelHurd, Percy A.Remer, J. R.
    Colfox, Major Wm. PhillipsHurst, Lieut.-Colonel Gerald B.Remnant, Sir James
    Colvin, Brig.-General Richard BealeInskip, Thomas Walker H.Richardson, Sir Alex. (Gravesend)
    Conway, Sir W. MartinJackson, Lieut.-Colonel Hon. F. S.Richardson, Lt.-Col. Sir P. (Chertsey)
    Cope, Major WilliamJames, Lieut.-Colonel Hon. CuthbertRoberts, Rt. Hon. G. H. (Norwich)
    Cowan, Sir H. (Aberdeen and Kinc.)Jephcott, A. R.Roberts, Sir S. (Sheffield, Ecclesall)
    Craik, Rt. Hon. Sir HenryJohnson, Sir StanleyRobinson, S. (Brecon and Radnor)
    Dalziel, Sir D. (Lambeth, Brixton)Jones, Sir Evan (Pembroke)Robinson, Sir T. (Lancs., Stretford)
    Davies, David (Montgomery)Jones, G. W. H. (Stoke Newington)Rodger, A. K.
    Davies, Thomas (Cirencester)Jones, Henry Haydn (Merloneth)Rutherford, Sir W. W. (Edge Hill)
    Davies, Sir William H. (Bristol, S.)Joynson-Hicks, Sir WilliamSamuel, A. M. (Surrey, Farnham)
    Dawson, Sir PhilipKellaway, Rt. Hon. Fredk. GeorgeSamuel, Samuel (Vedsworth, Putney)
    Dewhurst, Lieut.-Commander HarryKelley, Major Fred (Rotherham)Sanders, Colonel Sir Robert Arthur
    Doyle, N. GrattanKing, Captain Henry DouglasSassoon, Sir Philip Albert Gastave D
    Edge, Captain Sir WilliamLane-Fox, G. R.Scott, A. M. (Glasgow, Bridgeton)
    Ednam, ViscountLarmor, Sir JosephScott, Sir Leslie (Liverp'l, Exchange)
    Edwards, Allen C. (East Ham, S.)Law, Alfred J. (Rochdale)Seddon, J. A.
    Elveden, ViscountLeigh, Sir John (Clapham)Shaw, William T. (Forfar)
    Erskine, James Malcolm MonteithLewis, Rt. Hon. J. H. (Univ., Wales)Shortt, Rt. Hon. E. (N'castle-on-T.)
    Evans, ErnestLister, Sir R. AshtonSimm, M. T.
    Falcon, Captain MichaelLloyd, George ButlerSmith, Sir Allan M. (Croydon, South)
    Falle, Major Sir Bertram GodfrayLocker-Lampson, Com. O. (H'tingd'n)Smith, Sir Harold (Warrington)
    Farquharson, Major A. C.Lorden, John WilliamSprot, Colonel Sir Alexander
    Fell, Sir ArthurM'Connell, Thomas EdwardStanley, Major Hon. G. (Preston)
    FitzRoy, Captain Hon. Edward A.Mackinder, Sir H. J. (Camiachle)Stanton, Charles Butt
    Ford, Patrick JohnstonMacleod, J. MackintoshSteel, Major S. Strang
    Foreman, Sir HenryMacnaghten, Sir MalcolmStephenson, Lieut.-Colonel H. K.
    Forestier-Walker, L.McNeill, Ronald (Kent, Canterbury)Stewart, Gershom
    Forrest, WalterMacpherson, Rt. Hon. James I.Sturrock, J. Leng
    Fraser, Major Sir KeithMacqulsten, F. A.Sugden, W. H.
    Frece, Sir Walter deMagnus, Sir PhilipSurtees, Brigadier-General H. C.
    Fremantle, Lieut.-Colonel Francis E.Mallalieu, Frederick WilliamSutherland, Sir William
    Ganzoni, Sir JohnMiddlebrook, Sir WilliamTaylor, J.
    Gee, Captain RobertMoison, Major John ElsdaleTerrell, George (Wilts, Chippenham)
    Gibbs, Colonel George AbrahamMorden, Col. W. GrantThomson, F. C. (Aberdeen, South)
    Gilmour, Lieut.-Colonel Sir JohnMoreing, Captain Algernon H.Thomson, Sir W Mitchell (Maryhill)
    Glyn, Major RalphMorrison, HughTownley, Maximilian G.
    Goff, Sir R. ParkMunro, Rt. Hon. RobertTryon, Major George Clement
    Gould, James C.Murchison, C. K.Turton, Edmund Russborough
    Gray, Major Ernest (Accrington)Murray, Rt Hon. C. D. (Edinburgh)Vickers, Douglas
    Green, Joseph F. (Leicester, W.)Murray, John (Leeds, West)Waddington, R.
    Greenwood, William (Stockport)Nall, Major JosephWallace, J.
    Greer, Sir HarryNeal, ArthurWaiters, Rt. Hon. Sir John Tudor
    Greig, Colonel Sir James WilliamNewman, Sir R. H. S. D. L. (Exeter)Walton, J. (York, W. R., Don Valley)
    Gritten, W. G. HowardNicholl, Commander Sir EdwardWard, Col. J. (Stoke-upon-Trent)
    Guest, Capt. Rt. Hon. Frederick E.Nicholson, Reginald (Doncaster)Ward, Col. L. (Kingston-upon-Hull)
    Hacking, Captain Douglas H.Nield, Sir HerbertWard, William Dudley (Southampton)
    Hamilton, Sir George C.Norris, Colonel Sir Henry G.Warner, Sir T. Courtenay T.
    Hannon, Patrick Joseph HenryNorton-Griffiths, Lieut.-Col. Sir JohnWarren, Sir Alfred H.
    Harmsworth, C. B. (Bedford, Luton)Oman, Sir Charles William C.Watson. Captain John Bertrand
    Harmsworth, Hon. E. C. (Kent)Ormsby-Gore, Hon. WilliamWheler, Col. Granville C. H.
    Harris, Sir Henry PercyParker, JamesWhite, Col. G. D. (Southport)
    Henderson, Lt.-Col. V. L. (Tradeston)Parry, Lieut.-Colonel Thomas HenryWild, Sir Ernest Edward
    Hennessy, Major J. R. G.Pearce, Sir WilliamWilliams, C. (Tavistock)
    Herbert, Dennis (Hertford, Watford)Pease, Rt. Hon. Herbert PikeWills, Lt.-Col. Sir Gilbert Alan H.
    Hickman, Brig.-General Thomas E.Peel, Col. Hon. S. (Uxbridge, Mddx.)Windsor, Viscount
    Wider, Lieut.-Colonel FrankPerkins, Walter FrankWinfrey, Sir Richard
    Hinds, JohnPerring, William GeorgeWise, Frederick
    Hohler, Gerald FitzroyPickering, Colonel Emil W.Wood, Sir J. (Stalybridge & Hyde)
    Holbrook, Sir Arthur RichardPollock, Rt. Hon. Sir Ernest MurrayWoolcock, William James U.
    Hope, Sir H. (Stirling & Crckm'nn, W)Purchase, H. G.Worsfold, T. Cafo
    Hope, Lt.-Col. Sir J. A. (Midlothian)Rae, Sir Henry N.Young, Sir Frederick W. (Swindon)
    Hope, J. D. (Berwick & Haddington)Raeburn, Sir William H.
    Hopkins, John W. W.Handles, Sir John Scurrah

    TELLERS FOR THE NOES.—

    Hopkinson, A. (Lancaster, Mossley)Rankin, Captain James StuartColonel Leslie Wilson and Mr.
    Horne, Edgar (Surrey, Guildford)Ratcliffe, Henry ButlerMcCurdy.
    Horne, Sir R. S. (Glasgow, Hillhead)Rawlinson, John Frederick Peel

    I beg to move to leave out Sub-section (3).

    The subject of this Amendment is, unfortunately, a little dull and technical, but I think the Solicitor-General will agree that it raises a point of very great importance. The Clause makes a very important change in Income Tax practice, in that it transfers to Schedule E, the old Schedule for salaries and the emoluments of public offices, a very large number of salaries and profits which were formerly assessed under Schedule D. That is, of course, in keeping with the recommendation of the Royal Commission on Income Tax, and to that general proposal we take no exception at the present stage. But in this Clause, and particularly in Sub-section (3), it is provided that Rule 7 of the Rules applicable to Schedule E, which relates to taxes in respect of offices and employments of profit held under a railway company, shall apply to all offices and employments held under and pensions paid by a railway company. The precise Rule to which the Section refers is very short. It is provided under Rule 7 of Schedule E, in the Act of 1918 that
    "The tax in respect of offices and employments of profit held under a railway company shall be charged by the special commissioners, who shall notify to the Secretary or other officer of the company the particulars of the assessments."
    The second point provides that
    "Any such assessment shall be deemed to be and shall be an assessment upon the company and the tax in respect thereof shall be paid, collected and levied accordingly, and the company or the secretary or other officer may deduct out of the emoluments of the holder of any such office or employment of profit the tax so charged."
    The difficult position which is raised by this proposal is comparatively simple. Hitherto the salaried officials of railway companies in this country have been charged under Schedule E. That has been the subject of a very important case which was decided by the House of Lords recently, and which it would only be relevant to discuss on a subsequent Amendment. The point I am putting to the Chancellor of the Exchequer at this stage is this: Why should it be necessary to put this Sub-section in the Finance Act of the present year, continuing this exceptional system—for it is an exceptional system—in the method of imposing Income Tax, and collecting Income Tax from the officials of the railway companies. There are only one or two similar cases in the country, but there is no doubt that this method of imposing and collecting the tax has led to a very great deal of irritation and ill-feeling among the railway clerical staffs. There was a recent experience in the case of the Caledonian Railway Company, in which, in 26 cases, the company owed men a total of £133. I agree that they were not very large sums in each case, but they were important to the men in respect of excessive deductions, and it was only after very great delay that these sums could be recovered. I would cite here the case of other railway companies in which similar experience has been found.

    I do not in any way blame the railway companies for this difficulty. I am prepared to blame the system under which this tax is imposed and collected. I suggest to the Chancellor of the Exchequer that now that he is making this very wide transfer of classes of people who were formerly assessed and taxed under Schedule D to Schedule E, that there is no longer any case for the exceptional treatment of one or two large concerns in this country, by means of which the tax is imposed and collected by railway companies in this way. The Solicitor-General will appreciate that I am not making an attack upon collection at the source—there may be some' other method of providing for that—but I am attacking in this Section the method employed in the case of railway companies, and one or two other cases, and I suggest that, as a great change is taking place, in keeping with the recommendations of the Royal Commission on the Income Tax, that the time has come when we should not repeat this Subsection in the present Bill, but should allow it to lapse.

    As the hon. Member has said, this is an extraordinarily technical point, but I understand that his Amendment is intended for the moment to limit it to the one question, namely, whether or not, as is proposed by Clause 12 (3), the railway companies should be the medium for collecting this tax. The answer on that point is that at the present time, and for a great many years past, the railway companies have been the medium for collecting the tax from, at any rate, certain of their employés. The recent case in the House of Lords has thrown the system that has been in use for half a century or more into confusion by a decision that certain employés who were supposed, and had been supposed through all these years, to come within the definition of Schedule E, really came under Schedule D. The main object of Clause 12 is to put that confusion right, and in regard to that I understand that the hon. Member makes no complaint. That being so, the position is, as regards the railway companies' employés, and the Clause which puts such employés under Schedule E, we have the position that some of these employés are already taxed through the railway company, under the existing practice, which has worked very well, and for the sake of simplicity it was thought much the best, in the interests of everybody, that the whole of the employés should be treated in the same way as some employés. Consequently, Clause 12 (3) provides that the existing practice of collection through the railway companies should apply to all. We believe there is no objection on the part of the railway companies to this method of collection of the tax at the source. It seems to be a means by which the Treasury can be saved a very considerable amount of expense, and, it being a cheap and simple way of doing it, I submit that it would be a great mistake to go back upon the practice which has existed and worked well for a very large number of years, particularly when that practice is one which saves money to the Exchequer.

    Amendment negatived.

    I beg to move, at the end of Sub-section (6), to insert the words

    "but these provisions shall not apply to assessments in respect of offices and employments (other than offices and employments of profit) held under, and pensions paid by, a railway company, for the years ending the fifth day of April, nineteen hundred and nineteen, nineteen hundred and twenty, nineteen hundred and twenty-one, and nineteen hundred and twenty-two, and readjustments and repayments in respect of such assessments for those years may be made on the basis of Income Tax having been chargeable under Schedule D, notwithstanding that such assessments would, but for this provision, have become final and conclusive."
    I will not detain the Committee with any long argument, because the Solicitor-General has referred to the case which gives rise to this Amendment. The case was brought a considerable time ago by the Great Western Railway Company. The important point is that it was brought by the railway company and not by the employé, the clerk, who was involved. They raised an action in which they contended that a clerk at Swindon was entitled to be assessed, not under Schedule E, which was the practice enforced by the Inland Revenue authorities, but under Schedule D. The litigation lasted for about three years, and in March last the House of Lords decided, one judge dissenting, that the clerk in question was entitled to be assessed under Schedule D, and that he had been wrongly assessed under Schedule E.

    It is perfectly plain that that raises a question, as the Solicitor-General has suggested, of very great importance. The point as regards Schedule E was that this was employment in a public capacity. The learned Judges argued that it was not public any more than any other employment which might be followed by a clerk in a hundred and one pursuits. So that contention went by the board. It was clear then that, on the ground of being public employment or in some public service, the clerk did not come within Schedule E. That was, I think, an overriding consideration. But it led to certain important results for the clerk and all the other thousands of railway clerks in this country. It indicated that the Inland Revenue authorities had been wrong in assessing the clerk under Schedule E. Under Schedule E he was denied the right to the three years' average, which was applicable under Schedule D, because there was only a one year's basis so far as Schedule E was concerned.

    10.0 P.M.

    Immediately after the decision was reached the railway clerks applied to the Inland Revenue authorities to get the tax made on the average of the preceding three years, to which they were entitled under the decision. They were met by the reply on the part of the Inland Revenue authorities that that request could not be entertained, that the case applied to the one man, Hall, in respect of whom the action was brought. The reply to that is that the ease of Hall was obviously a test case, and that, if the Inland Revenue was wrong in the case of Hall, it was wrong in the case of the whole class of railway clerks, who were in exactly the same position and were entitled to take the benefit of any advantage which Hall got by reason of the decision reached in the House of Lords. The statement was made that, if Hall made a claim for the benefit of the three years' average, he would be entitled to it, but that in all the other cases the other clerks were to be denied the right which this one clerk obtained, simply because the action had been brought in his name. I have seen part of the correspondence, and I have no doubt that the case has been stated by me with substantial accuracy. I am simply asking in this Amendment that effect shall be given to the decision of the House of Lords as regards all these other thousands of railway clerks. That is, that the law as it was in reality throughout, if the House of Lords' position is accepted, as it must be, should be now applied, no doubt at a distance of some years. It is an Amendment under which we are simply seeking to do justice to railway clerics, from whom justice was withheld by a misunderstanding on the part of the Inland Revenue authorities. I am not making any request as regards the future. We agree to Schedule E and the one-year basis for the future, but the Solicitor-General must admit that it is very wrong to deny to all these thousands of clerks the concession which will be open to Hall by reason of the decision of the House of Lords.

    I am going to apeal to the Solicitor-General to see if he cannot consent to this particular Amendment. So far as money is concerned, I think that there is very little involved. It is confined, as the hon. Member for Central Edinburgh (Mr. W. Graham) has said, simply to the time up to the present and does not extend to the future. But my objection to the Clause as it stands is that it is to some extent retrospective taxation. My hon. Friend was right in what he said about the case which was heard by the House of Lords. They decided that certain employés were taxable upon the three years' average. It had generally, I believe, been supposed to be the opposite. Now the House of Lords gives this decision and down come the Government and say, "Notwithstanding the decision of the House of Lords, the law shall be held to be something different from that decision and this provision shall cover the last three years."

    The point was really covered by Sub-section (6) and Sub-section (3), which has already been dealt with, but my hon. Friend does not propose to leave out Sub-section (3) but to modify it by Sub-section (6) so far as to preserve the rights which are covered by a decision of the House of Lords by allowing them the benefit of the average on the past three years. There can be very little money involved in that, and the Government will be doing an act of justice at a very small cost if they refrain from the very objectionable principle which they adopted last year, and which I opposed at the time in another matter, in their Budget, of trying by legislation to say that what they intended should have been the law in the past and which was not the law should be the law. That is nothing more or less than retrospective taxation. I hope that the Government may see their way to accept this particular Amendment.

    The hon. Member for Central Edinburgh (Mr. W. Graham) and the hon. Member for Watford (Mr. D. Herbert) have delivered very interesting speeches, but they do not in the least adequately represent the existing position. It is true that the decision of the House of Lords was stated by the hon. Member for Central Edinburgh in a speech that might have been made by a member of my profession, having regard to its accuracy. It is true that the House of Lords did say that these men who had been taxed under Schedule E ought to have been taxed under Schedule D. The House of Lords said that in the middle of last March, which is three months ago. Down to that date this House certainly, the Treasury and Inland Revenue certainly, and the great bulk of lawyers also, thought that the employés of companies were properly taxed under Schedule E. The House of Lords held that the word "public" in Schedule E was an over-riding word, and for that reason said that these employés could not come within Schedule E, which deals with public employés or employés of a company of a public character. But the fact is that all these assessments have been made during the past year, and the taxes paid by all these men under Schedule E.

    I do not think there have been any exceptional protests. For the space of a month or two, till the full statement was made by the Chancellor of the Exchequer, the position was an interregnum between the period during which everybody thought that Schedule E was the right Schedule and the intimation by the Chancellor of the Exchequer, which was really in accordance with what was an implied suggestion in the judgment of the House of Lords—that legislation should be, introduced to regularise a position which it was believed always had existed until the House of Lords gave judgment in March last. The Amendment now proposes that all the assessments made during the last three years should be ripped up, that in all these cases new assessments should be made, and that in a vast number of cases enormous trouble should be taken. Under existing circumstances, from the common-sense point of view and not from the legal point of view, is it reasonable to rip up all these assessments? It would mean vast expenditure and vast trouble. And for what? In order that a number of individuals should be put on a basis on which this House during the time that they were taxed did not think they were entitled to be put, on which the general public did not think they were entitled to be put, and very few people thought they were entitled to be put. There is no ground of ordinary fairness or equity why it should be done.

    What is the proposal? It is that the employés of certain companies, to wit, railway companies, should have this done for them, not that the employés of all other companies to which the House of Lords decision applied should have it done. Why should railway employés be put in a privileged position? Lastly, the difference in the aggregate is not very much. Under Schedule D the tax is paid on the average of three years; under Schedule E it is paid upon the income of the preceding year, except in the case of manual workers, who pay on the actual earnings of the year of assessment. In the aggregate there is not a very great difference. Under the circumstances the proposal is one that ought not to be accepted.

    After the statement of the learned Solicitor-General, I think my hon. Friend the Member for Central Edinburgh (Mr. W. Graham) might reflect upon the compliment paid to him. Reference has been made to the difference between the legal point of view and the common-sense point of view. The action having been entered by the railway company indicated, I understand, that the case was to be a test case. The point at issue was that these clerks have been overcharged for a certain number of years. Surely, if judgment is given on that point and the taxing authorities are held to be wrong, it must follow that they must refund the money in respect of which judgment was given. The House of Lords sat as a judicial body to try this particular case. It is not a question of the amount of money at stake, but a question of equity, and a question whether or not, for a cer- tain convenience, the Government can defy the decisions of the Courts of Law. The House, for the sake of maintaining the dignity and prestige of the Courts of Law, surely cannot allow this sort of thing to stop on the statement of the learned Solicitor-General.

    Let us understand what this Clause does. It really increases the Income Tax paid by a large number of salaried people. It substitutes one schedule for another, and, generally, as salaries rise, that means an increase in the Income Tax payable. The Government would not have made the change unless they had expected to get more revenue out of it.

    Then why not accept the Amendment, reduce the amount of money you expect to lose, and at the same time please those who are concerned?

    The hon. and gallant Gentleman does not understand the character of the Amendment.

    The character of the Amendment, as I understand it, is that these railway clerks have hitherto been assessed for Income Tax under Schedule E.

    The hon and gallant Member does not seem to understand that we lose £500,000 by the introduction of this change. The Amendment does not prevent the change taking place.

    The Amendment prevents the change taking place retrospectively. It gives to the clerks the rights they have obtained in a Court of Law and prevents them from having to pay the increased charges that they might have to pay under Schedule E. To that extent these clerks will benefit by the Amendment. Are they legally entitled to enjoy this benefit? They carried the case through the Courts. Now you are going by the Clause, not only for all future time to assess them under Schedule E, which I hold, would bring more money into the Treasury, but for the last three years the basis of assessment is to be affected.

    Can the hon. and gallant Member point out which word provides for that?

    I am simply seeking for information. The hon. and gallant Gentleman says the Clause itself alters the law and makes it retrospective for three years so that these men cannot get their money back. Where in the Clause does he find that statement?

    I cannot say where it is in the Clause, but if the right hon. Baronet had listened to the speech of the Solicitor-General he would understand that such is the intention of the Clause and the effect of it. The effect of it is to reverse the decisions which have been come to by the Courts of Law—to reverse them for the future—and to make the law what the Treasury always held it to be and what the House of Lords found it not to be. That is, I believe, the object of the Clause. It is, by Act of Parliament, trying to defeat the decision of the House of Lords. Observe how differently the Government treat a decision of the House of Lords when it goes in favour of the railway clerks, who are small taxpayers, from the way in which they treated it in the case of the landlords who defeated the intention of the Budget of 1909–10 in the Law Courts. There, the action of the Law Lords was accepted as a permanent defeat of the intentions of Parliament. Here when the Law Courts defeat what the Treasury believed to be the intention of Parliament, in passing the original Act, immediately a Clause is introduced in the next Finance Bill to put the matter right. I do not, mind their putting the matter right in the future, but they need not retrospectively affect the interests of the people who won the case against them in the Lords.

    I object to my hon. and gallant Friend attempting to give the Clause any meaning which is not justified. I do not think the Mover of the Amendment made out a case that there was anything in Clause 12 which was retrospective for three years. The Clause provides that from the present time these men shall be taxed under Schedule E, and there is nothing retrospective about it. I understand from the decision of the House of Lords that these men can to-day in spite of Clause 12 apply for re-assessment.

    Sub-section (6) contains the words

    "shall be deemed always to have had effect."
    That is what makes it retrospective. The hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) is perfectly correct. The House of Lords decided that for the last three years the law has been something different to what was supposed. This Sub-section now says that the law shall be deemed always to have been something which the House of Lords says it was not.

    Sub-section (6) says:

    "The provisions of Sub-section (1) and Sub-section (3) of this Section shall have effect and shall be deemed always to have had effect, for the purpose of any assessment to Income Tax which is made or becomes final and conclusive after the first day of May, nineteen hundred and twenty-two."
    I submit that it does not apply to assessments made in 1921, 1920, or 1919. Perhaps the Solicitor-General will tell us whether I am or am not right, and whether this Clause is or is not retrospective?

    I want to ask the Solicitor-General whether it is not a fact that under this Clause assessments under Schedule E, signed by the Commissioners after the 1st May, 1922, and assessments under the appeal or otherwise open for any previous year, which become final and conclusive after the 1st May, 1922, will, in effect, fall to be, determined as if the decision referred to had not been given, and that to that extent assessments will be made on past years?

    In answer to the hon. Member for Twickenham (Sir W. Joynson-Hicks), I agree with his interpretation of the Clause. Sub-section (6) applies only to assessments which are made or become final after the 1st May. In answer to the hon. Member for Northeast Derbyshire (Mr. Holmes), I think that assessments that were open on 1st May would then become final, and that, therefore, they would be made under the terms of the new law.

    I think the Committee will agree that an important principle has been raised in this Amendment. Unfortunately I am by no means satisfied with the reply which the learned Solicitor-General has given. He suggests that the effect of this Amendment will be to rip up all the assessments which have been made during the past three years, to lead to great administrative and other difficulties, and probably also to involve a considerable sum of money. In reply to that point, for at least a part of that period, many of the salaries which were paid were very low, and the aggregate numbers involved may not he considerable, but even if they were larger than we have any reason to assume to-night, the fact that the railway companies made these returns under Schedule E on the particular basis laid down in that rule of the Act of 1918 makes the accessibility of these returns very easy and places at the disposal of the Department a mass of information which, I think the Solicitor-General will agree, they do not often get where Income Tax assessments are concerned, so that we must not strain the administrative difficulty in giving effect to this Amendment.

    There is another point on that head which I am rather surprised the Solicitor-General should ignore. He refers to our going back over assessments for three years, but he knows perfectly well that this litigation has been going on for three years, and that it was not till about 26th March last that a final decision was given in the House of Lords. So that it was perfectly impossible, of course, for any railway clerk, or for the Inland Revenue authorities, to come to any definite decision. It was only in March last that the decision emerged, and it is only now that we can give effect to this remedy. Important as those considerations are, there is another consideration which, I believe, although I speak with great respect of the law, to be final in this matter. The House of Lords' decision makes it plain beyond a shadow of doubt that this was an erroneous assessment, and that sums were wrongly collected from these people under the assessment. I venture to suggest that nothing can get round that argument, and that we are entitled, even if it be a case of going back three years, to give effect to the position which these men should have occupied all that time, and to put into force the basis of assessment on which the authorities should have proceeded. The learned Solicitor-General has also failed to meet the point I made, namely, that the concession is being withheld from all other clerks, although this obviously was a test case applying to railway clerks in the country as a whole.

    These considerations will compel me to go to a Division on this Amendment. The learned Solicitor-General urges another argument in conclusion. He says: "You are, by your Amendment, proposing to give a preference to one section of employés, namely, the clerical staff of a railway company. Why do you not suggest a similar concession to all other people in this position?" My reply to that is that there may be some small number, but it must be a very small number of people indeed, who are in this position. This litigation, however, was brought in respect of the clerk of a railway company, and in respect of all clerks of railway companies; and, further, the railway company was in an exceptional position under Schedule E of the Act of 1918. There can be no comparison of the employés of a local authority and of the other bodies named in Schedule E to that Act, because they are quite clearly defined. There was a doubt in the case of a railway company, and it took three years of litigation to remove that doubt by a judgment in the House of Lords. So that I think in that reply I have tried to meet the arguments which were put by the learned Solicitor-General, and I cannot understand why he should refuse to give effect to a decision of the highest court in this land, and to give these men a right, of which they should never have been deprived, and, in fact, which they possess in law under the Inland Revenue system of this country.

    I have listened with very great interest to the very moderate speech made by the hon. Member for Central Edinburgh (Mr. W. Graham), and I am sure he and the Committee will accept my assurance that the Government does not want to do anything that could be remotely described as an injustice in a matter of this kind. But I should like the Committee to understand the considerations which moved us upon this matter. The decision of the House of Lords was, undoubtedly, a surprise, not merely to the Treasury officials and the Government, but, I think, to the great bulk of people who knew anything about Income Tax law. The result was that it threw into confusion the whole basis of assessment of employés in this country, and it was hinted in that judgment of the House of Lords that something was necessary to be done, and it was obvious to the people who had the administration c) the law in their hands that it was necessary to out the whole matter on a proper foundation. We decided, accordingly, not to take advantage of the judgment of the House of Lords, because it would have been an advantage to us at the present time, as a mere matter of money. We decided not to take advantage of the judgment of the House of Lords, but to bring in at once legislation which would have the effect of putting all employés of the country of the character described on the basis of Schedule E instead of Schedule D, so that there would be no further difficulty. We are now in a time of falling salaries. By the process of making this change at the present time we should lose something like half a million in the present year. The hon. Gentleman who moved the Amendment is still supporting what the Government is doing, and this would, as I say, involve us in the present year in the loss of half a million.

    But the Committee is asked to address itself specially to the case of the past and not the future. My hon. Friend on the Front Opposition Bench addressed himself to the future, or the future mixed with the past, and I do not think that he disentangled them. But about the past, and about the particular case of these railway servants, what are we to do? In the first place, let me say while I am not at present in active practice as a lawyer, I do not entirely forget my legal training, and I think anybody who tries to consider the judgment of the House of Lords will find it extraordinarily difficult to decide just what class of people that judgment will apply to. There was a vigorous examination of the case of this particular claim, and the particulars relating to the clerk, the particular posts which he had held, the salary which he then had, and say with confidence that you could not so easily, as my hon. Friend seems to think, discriminate between the classes of railway servants or say with any great certainty that the judgment in the case deals with a certain grade, and would apply to that and no other. Nor could you take any group or body of servants, and say that in their case the judgment would necessarily be followed if the matter was raised. More than that, if you were to apply the judgment in the case of all railway servants, as my hon. Friend suggests, you will equally require—to do justice—to apply it to a great many servants of public companies other than railway companies. You are thus immediately landed in a morass of difficulties.

    What about equity? If there had been any great appearance of injury or damage either to individuals or a large class of individuals, we might have found some rough measure of dealing justice in the matter. But what is the situation? It is quite right to say that the Lords pronounced a technical judgment that these were people who had erroneously been assessed under Schedule D instead of Schedule E. What had they been doing? Nobody could say that they were doing other than paying upon the actual amount which they had earned. Therefore, from that point of view, there is no appearance of damage or injury, that is, from the equitable point of view. All we can say is that from the technical point of view, at a. time when salaries were rising, they had not the advantage of reducing their Income Tax by working upon the average which would have produced this result, that at a time when salaries throughout the country were on the increase, they did not get an advantage to which they really and ordinarily would not have been entitled. When salaries began to fall, they were again paying upon the salary of the year so far as the assessment to Income Tax is concerned. I do not think that anybody here will regard that as really a case of real injury which requires exceptional measures to be taken in order to prevent injustice being done. If the matter were an easy one we might, perhaps, have looked at the whole affair with a greater desire to put it right. It is not easy, and there is no very obvious injustice. It is not easy because, in point of fact, what we should require to do would be to rip up the assessment not merely of the railway employés, but of large bodies of other employés in this country back for a period of three years. That is not easy and I doubt very much whether we should derive more justice from that line than the line we have taken. Although I am willing to give further consideration to this matter, and I have been much impressed by the case put forward by my hon. Friend the Member for Central Edinburgh (Mr. W. Graham), I think upon the face of it this matter is not one upon which we have been neglecting the interests of the parties with whom we have been dealing.

    I do not think the Chancellor of the Exchequer has answered the point which was put by my hon. Friend the Member for Central Edinburgh. I want to put this case on the ground of equity. During the years 1920, 1921 and 1922 hundreds of thousands of assessments were made under Schedule D. I agree with the statement made by the right hon. Gentleman that the decision of the House of Lords was a surprise, but what is being done by this Bill is that there are still a certain number of people who have not been assessed for 1920, 1921 and 1922 because they have escaped the

    Division No. 160.]

    AYES.

    [10.40 p.m.

    Acland, Rt. Hon. Francis D.Graham, D. M. (Lanark, Hamilton)Parkinson, John Allen (Wigan)
    Adamson, Rt. Hon. WilliamGraham, R. (Nelson and Colne)Poison, Sir Thomas A.
    Adkins, Sir William Ryland DentGraham, W. (Edinburgh, Central)Raffan, Peter Wilson
    Ammon, Charles GeorgeGriffiths, T. (Monmouth, Pontypool)Remnant, Sir James
    Banton, GeorgeGrundy, T. W.Randall, Athelstan
    Barker, G. (Monmouth, Abertiliery)Guest, J. (York, W. R., Hemsworth)Richardson, R. (Houghton-le-Spring)
    Barnes, Rt. Hon. G. (Glas., Gorbals)Hall, F. (York, W. R., Normanton)Roberts, Frederick O. (W. Bromwich)
    Barnes, Major H. (Newcastle, E.)Halls, WalterRobertson, John
    Barton, Sir William (Oldham)Hartshorn, VernonRose, Frank H.
    Bell, James (Lancaster, Ormskirk)Hayday, ArthurRoyce, William Stapleton
    Benn, Captain Wedgwood (Leith)Hayward, EvanSexton, James
    Bowerman, Rt. Hon. Charles W.Henderson, Rt. Hon. A. (Widnes)Shaw, Thomas (Preston)
    Briant, FrankHerbert Dennis (Hertford, Watford)Short, Alfred (Wednesbury)
    Bromfield, WilliamHirst, G. H.Sitch, Charles H.
    Brown, James (Ayr and Bute)Hogge, James MylesSpencer, George A.
    Cairns, JohnHolmes, J. StanleySutton, John Edward
    Cape, ThomasIrving, DanSwan, J. E.
    Carter, W. (Nottingham, Mansfield)John, William (Rhondda, West)Thorne, G. R. (Wolverhampton, E.)
    Clynes, Rt. Hon. John R.Johnstone, JosephThorne, W. (West Ham, Plaistow)
    Collins, Sir Godfrey (Greenock)Jones, Sir Evan (Pembroke)Tillett, Benjamin
    Conway, Sir W. MartinJones, J. J. (West Ham. Silvertown)Walsh, Stephen (Lancaster, Ince)
    Cowan, D. M. (Scottish Universities)Jones, Morgan (Caerphilly)Waterson, A. E.
    Davies, A. (Lancaster, Ciltheroe)Kiley, James DanielWatts-Morgan, Lieut.-Col. D.
    Davies, Evan (Ebbw Vale)Lawson, John JamesWedgwood, Colonel Josiah C.
    Davies, Rhys John (Westhoughton)Lister, Sir R. AshtonWhite, Charles F. (Derby, Western)
    Davison, J. E. (Smethwick)Lunn, WilliamWignall, James
    Edwards, C. (Monmouth, Bedwelity)Maclean, Neil (Glasgow, Govan)Williams, Col. P. (Middlesbrough, E.)
    Entwistle, Major C. F.Maclean, Rt. Hn. Sir D. (Midlothian)Wilson, James (Dudley)
    Erskine, James Malcolm MonteithMills, John EdmundWilson, Col. M. J. (Richmond)
    Finney, SamuelMurray, Dr. D. (Inverness & Ross)Young, Sir Frederick W. (Swindon)
    Fitzroy, Captain Hon. Edward A.Naylor, Thomas EllisYoung, Robert (Lancaster, Newton)
    Foot, IsaacNewbould, Alfred Ernest
    Galbraith, SamuelO'Connor, Thomas P.

    TELLERS FOR THE AYES.—

    Gulls, WilliamO'Grady, Captain JamesMr. Walter Smith and Mr.
    Kennedy.

    NOES.

    Agg-Gardner, Sir James TynteBaldwin, Rt. Hon. StanleyBarrie, Sir Charles Coupar (Banff)
    Ainsworth, Captain CharlesBalfour, George (Hampstead)Bartley-Denniss, Sir Edmund Robert
    Amery, Rt. Hon. Leopold C. M. S.Banbury, Rt. Hon. Sir Frederick G.Beckett, Hon. Sir Gervase
    Armitage, RobertBanner, Sir John S. Harmood-Bell, Lieut.-Col. W. C. H. (Devizes)
    Armstrong, Henry BruceBarker, Major Robert H.Bellairs, Commander Carlyon W.
    Astbury, Lieut.-Com. Frederick W.Barnett, Major Richard W.Benn, Sir A. S. (Plymouth, Drake)
    Atkey, A. R.Barnston, Major HarryBenn, Capt. Sir I. H., Bart. (Gr'nw'h)
    Baird, Sir John LawrenceBarrand, A. R.Bennett, Sir Thomas Jewell

    net, and by this Clause we are going to get them into the net, and we are going to catch them for past years. That is not a matter of equity. Surely, having, regard to the decision of the House of Lords, and the House of Lords having suggested that the law should be altered, the Chancellor of the Exchequer is perfectly entitled to alter the law, but let him start from April, 1922, and say that from that time they shall all come under Schedule F. Do not catch them by this Resolution after hundreds and thousands of them have got through. The Chancellor of the Exchequer has said that he will consider this point further, but I put it to him that he should accept the Lords' decision from the 5th April, 1922, backwards and from that date everybody should come under this few Clause.

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

    The Committee divided: Ayes, 99; Noes, 252.

    Birchall, J. DearmanHarris, Sir Henry PercyPickering, Colonel Emil W.
    Bird, Sir William B. M. (Chichester)Henderson, Lt.-Col. V. L. (Tradeston)Pollock, Rt. Hon. Sir Ernest Murray
    Blake, Sir Francis DouglasHennessy, Major J. R. G.Pownall, Lieut.-Colonel Assheton
    Borwick, Major G. O.Hickman, Brig.-General Thomas E.Purchase, H. G.
    Bowles, Colonel H. F.Hilder, Lieut.-Colonel FrankRae, Sir Henry N.
    Bowyer, Captain G. W. E.Hinds, JohnRaeburn, Sir William H.
    Boyd-Carpenter, Major A.Hchler, Gerald FitzroyRandles, Sir John Scurrah
    Breese, Major Charles E.Hood, Sir JosephRankin, Captain James Stuart
    Bridgeman, Rt. Hon. William CliveHope, Sir H.(Stirling & Cl'ckm'nn,W.)Rawlinson, John Frederick Peel
    Briggs, HaroldHope, Lt.-Col. Sir J. A. (Midlothian)Remer, J. R.
    Broad, Thomas TuckerHope, J. D. (Berwick & Haddington)Richardson, Sir Alex. (Gravesend)
    Brown, Brig.-Gen. H. C. (Newbury)Hopkins, John W. W.Richardson, Lt.-Col. Sir P. (Chertsey)
    Buckley, Lieut.-Colonel A.Hopkinson, A. (Lancaster, Mossley)Roberts, Rt. Hon. G. H. (Norwich)
    Bull, Rt. Hon. Sir William JamesHorne, Edgar (Surrey, Guildford)Roberts, Sir S. (Sheffield, Ecclesall)
    Burdon, Colonel RowlandHorne, Sir R. S. (Glasgow, Hillhead)Robinson, S. (Brecon and Radnor)
    Campion, Lieut.-Colonel W. R.Hunter-Weston, Lt.-Gen. Sir AylmerRodger, A. K.
    Carr, W. TheodoreHurd, Percy A.Rutherford, Sir W. W. (Edge Hill)
    Casey, T. W.Inskip, Thomas Walker H.Samuel, A. M. (Surrey, Farnham)
    Cecil, Rt. Hon. Sir Evelyn (Aston)Jackson, Lieut.-Colonel Hon. F. S.Samuel, Samuel (W'dsworth, Putney)
    Chamberlain, Rt. Hn. J. A. (Birm. W.)James, Lieut.-Colonel Hon. CuthbertSanders, Colonel Sir Robert Arthur
    Chamberlain, N. (Birm., Ladywood)Jephcott, A. R.Sassoon, Sir Philip Albert Gustave D
    Churchman, Sir ArthurJohnson, Sir StanleyScott, A. M. (Glasgow. Bridgeton)
    Clough, Sir RobertJones, G. W. H. (Stoke Newington)Scott, Sir Leslie (Liverp'l, Exchange)
    Coats, Sir StuartJones, Henry Haydn (Merloneth)Seddon, J. A.
    Cobb, Sir CyrilJoynson-Hicks, Sir WilliamSeely, Major-General Rt. Hon. John
    Colfax, Major Wm. PhillipsKellaway, Rt. Hon. Fredk. GeorgeShaw, Hon. Alex. (Kilmarnock)
    Colvin, Brig.-General Richard BealeKelley, Major Fred (Rotherham)Shaw, William T. (Forfar)
    Cowan, Sir H. (Aberdeen and Kinc.)Kidd, JamesShortt, Rt. Hon. E. (N'castle-on-T.)
    Cralk, Rt. Hon. Sir HenryKing, Captain Henry DouglasSimm, M. T.
    Curzon, Captain ViscountLarmor, Sir JosephSmith, Sir Allan M. (Croydon, South)
    Dalziel, Sir D. (Lambeth, Brixton)Law, Alfred J. (Rochdale)Smith, Sir Harold (Warrington)
    Davidson, Major-General Sir J. H.Leigh, Sir John (Clapham)Sprot, Colonel Sir Alexander
    Davies, Alfred Thomas (Lincoln)Lewis, Rt. Hon. J. H. (Univ., Wales)Stanley, Major Hon. G. (Preston)
    Davies, David (Montgomery)Lewis, T. A. (Glam., Pontypridd)Stanton, Charles Butt
    Davies, Thomas (Cirencester)Lloyd, George ButlerStarkey. Captain John Ralph
    Dawson, Sir PhilipLocker-Lampson, Com. O. (H'tingd'n)Steel, Major S. Strang
    Dewhurst, Lieut.-Commander HarryLorden, John WilliamStephenson, Lieut.-Colonel H. K.
    Doyle, N. GrattanLoseby, Captain C. E.Stewart, Gershom
    Edgar, Clifford B.Lyle, C. E. LeonardSturrock, J. Leng
    Edge, Captain Sir WilliamM'Connell, Thomas EdwardSugden, W. H.
    Edwards, Major J. (Aberavon)Mackinder, Sir H. J. (Camlachle)Surtees, Brigadier-General H. C.
    Edwards, Hugh (Glam., Neath)McLaren, Robert (Lanark, Northern)Sutherland, Sir William
    Bleeder. ViscountMacpherson, Rt. Hon. James I.Taylor, J.
    Evans, ErnestMallalieu, Frederick WilliamTerrell, George (Wilts, Chippenham)
    Falcon, Captain MichaelManville, EdwardThomson, F. C. (Aberdeen, South)
    Falle, Major Sir Bertram GodfrayMarriott, John Arthur RansomsThomson, Sir W. Mitchell- (Maryhill)