I am glad that the right hon. Gentleman has met at least three of the points to which I called attention. The first case is that of the yearly tenancies, which in Ireland have saleable value, whereas in England yearly tenancies have practically no selling value at all. Therefore, if the case were not provided for in this way you really would be putting a tax upon Ireland which would never be permitted in England. The matter embraces a very large number of agricultural tenants in Ireland. The second point is that small estates, both in England and Ireland, within the meaning of the Finance Acts, especially the Act of 1894, are those of the value of between £100 and £300, and those valued between £300 and £500. With regard to these the difficulty has always been this: in estimating for the purpose of Estate Duty, the owner of this property is not entitled to make any deduction whatever. That has the effect of taking out of the class of small estates estates which are really small, and depriving them thereby of the benefit accorded to small estates by all the Finance Acts. The right hon. Gentleman proposes to meet that particular point both in regard to holdings that have been purchased and in regard to holdings where agreements have been made, but no money advanced, by allowing a deduction—that from the gross value of these small holdings you are to deduct the amount of the purchase money remaining due out of the moneys agreed to be paid. But I do not think that that meets the difficulty altogether. It certainly does not meet all the points to which I called attention. If the intention of the Government, as I gather, is to be carried out, I would beg to suggest that something else ought to be added; and when the time comes I shall move to add to the end of Sub-section (2) the following words:—"And when such property includes an agricultural holding subject to an annuity under the Land Purchase (Ireland) Act, Section 7, Sub-section (5), of the principal Act shall continue to apply." I would like to impress upon the right hon. Gentleman that there is no sense in this matter in carrying the thing just to the point of full advantage in these small estates. A real concession would not involve any considerable loss to the revenue at all. The third Sub-section remedies a very great grievance peculiar to Ireland alone. In consequence of the operation of the Local Registration of Title (Ireland) Act you only give one year to pay, whereas if this property were to be, for the purpose of the payment of duty, real property, as it is for every other purpose, then the time for paying duty would be extended from one year to nine. And this, after all, is not a great concession to Ireland, because by the Land Transfer Act of 1897 you did exactly the same thing with regard to property in England. By that Act all the proceeds of the land sold were to be treated as real property for the purposes of the payment of duty, thus giving nine years to the executor or administrator as the case might be to pay the duty, and although the moneys of the property remained personal property for the purposes of devolution, they would have to pay the whole of the duty in one year. The right hon. Gentleman has made things even as regards England and Ireland in that respect, and I cordially acknowledge the fact. I think it is a very considerable concession, although it has been made since 1897 to England. What I have to say about the Clause as a whole is that it does not provide for one rather important case. I admit at once when a man buys his holding he cannot be treated on precisely the same footing any longer as a tenant who has not bought; he is in a different category altogether. As a matter of fact for 25 or 30 years to come the purchaser under the Land Purchase Acts will be practically a tenant from year to year, paying his rent in the shape of annuity to the State, and I do not see why he should not be treated in practically the same way as the occupying tenant who has not bought out My suggestion is that he ought to be allowed to deduct the amount of the unpaid purchase money remaining unpaid. He is entitled at present to do that; but where the injustice comes in, as I submit, is this: that before the deduction is made the amount of the purchase money unpaid is added to the estate for the purpose of finding out the principal value, and if that be the case there is obviously no advantage given to the tenant who has bought out in deducting the amount of the unpaid advance. I had some doubts as to whether or not the language of Sub-section (7), Section 5, of the Act of 1894, which contains the definition of principal value, made it clear that the Inland Revenue Commissioners were entitled in the first place to add the amount of the purchase money or encumbrances to the value of the estate in order to find the principal value. If they have no such power, my grievance in that respect would be gone, because then the deduction of purchase money would give practically what I have asked for. Whatever the law may be, I am not aware of any case decided upon the subject; the practice, I understand, of the Inland Revenue Commissioners is to add the amount of the unpaid purchase money to the value of the estate before they make the deduction of the same amount. In order to find the principal value you add these particular encumbrances, and then their practice always has been to make a deduction of what they have added. Obviously there is no advantage in that; you take away the advantage you seem to give. These people ought not to be exceptionally treated. They will be exceptionally treated if what I ask is not given. They will be a class which do not exist in England and they will be taxed because they are in Ireland. I hope the right hon. Gentleman will not make the answer he made the other day, namely, that the Irish tenants are getting specially favourable terms for the purchase of their holdings. There will be very little left of that advantage if you take it away bit by bit, and I submit the right hon. Gentleman ought to treat this point also in a spirit of broad-mindedness. The tenant purchaser will be paying his annuity, and for the first 25 or 30 years he will not have secured the larger part of the interest in the concern. What is really proposed is that all this time the State, which is the larger owner, is taking a toll, not only off the tenant's property, but also upon its own property. The difference between the mortgagee in England and the mortagee in Ireland is that the State stands in the character of the lender. The mortgagee in England is a private individual; the mortgagee in Ireland is the State. The State lends the money and is the owner of the greater part of the property for many years to come; it is the sleeping partner of the business, and if you regard the State as the mortgagee, on what ground of expediency do you ask for the State a larger benefit than the ordinary mortgagee gets? I submit that there is a very strong case meeting the points I have raised in this otherwise satisfactory Clause. I hope the Government will give favourable consideration to what I have said.

I confess that I cannot see that Ireland is getting much under this Clause. What you are doing by this proposal is that you are treating both sets of tenants on the same basis. Sub-section (3) provides that "land subject to an annuity under the Land Purchase (Ireland) Acts shall be treated as real property for the purposes of Sub-section (8) of Section 6 of the principal Act relating to the payment of Estate Duty by instalments." The other part of the Clause is British, and there is no attempt to give to Ireland the smallest concession. It is idle to pretend that you are giving any concessions to Ireland by this proposal, because you are doing nothing of the kind. The English building societies raised the point that in the case of outstanding mortgages the amount should be added to the value of the property, and that it should be assessed as a whole. The Government met the building societies as regards transfers inter vivos, and now it is proposed to do the same thing with regard to duties levied at death. As you are doing that for the English building societies you ought to do it for Ireland. You are meeting the whole of the English building society case and only about one-tenth of the Irish case. The limit here is in the case of "property of a gross value not exceeding £300 or £500, as the case may be." My intellect is not nimble enough at twelve o'clock in the day to understand a Clause which I have only seen for the first time half an hour ago, and therefore I must ask some questions. In the first place I want to know if the £300 or £500 mentioned in Sub-section (2) includes the mortgage money. If it does not, it does not do the Irish tenant any good whatever.

Take the case mentioned by the Chief Secretary for Ireland in his speech on the Second Reading or the Committee stage of the Irish Land Bill. He showed that in nine-tenths of the cases, or in the vast majority of the cases, the purchase money raised was about £400. In the case of a building society the landlord's interest is at least equal to that of the tenant. In the case of Irish tenancies the figures, instead of being £300 and £500, if they include the mortgage money, will at least be £800 or £1,000. A man in England who buys his house through a building society seldom borrows from the building society more than £200, and that includes practically the whole value of the house. But the case of the Irish tenant is wholly different, because he gets an assignment of from £300 to £400. He borrows a similar amount, and that brings the total amount of his assets at death to something like £700, £800, or £900. Is that case met by this Sub-section? If I do not get a satisfactory answer on that point, then I say that the Irish case is not met at all. What is the good of all this pretence that the Irish case is being met by this proposal? It is not being met, and that is clearly proved by what you do when you deal with transfers inter vivos.

When dealing with assignments, the concession made is of no value because it deals with nine-tenths of the English case and only one-tenth of the Irish case. My impression is, after a cursory examination, that all you are doing by this Clause is that you are extending to English building societies and to the owners of houses in England mortgaged in building societies, upon their death, the same concession you gave to them when they were alive, namely, you are exempting them from Death Duty just as you exempted them during their lives from Stamp Duty. That is all you are doing. How can the Chancellor of the Exchequer say that he is doing this to meet the case put forward by the Irish Members? I deny it. He is doing nothing of the kind, and this does not meet the case put forward by the Irish Members at all. The Irish case relates not to amounts of £300 and £500, but to £800 and £900. If I am wrong in this it will be because I did not have an opportunity of seeing the Clause until about half an hour ago, and this is how we are treated in regard to a proposal which is dealing with a case in which the State is investing £180,000,000 in Irish land. Every shilling of that money will be subject to Death Duty, and some of it will be liable to transfer duty in case of assignment. I think the Government might have put down this Amendment a little earlier so that we should have had an opportunity of debating this subject in a full House. This is not a matter which can be dealt with at half an hour's notice, and sufficient notice ought to have been given as would allow the best legal intellects in Ireland an opportunity of knowing in advance whether our case is met by this Clause. English Members are given days and days to consider the Clauses put down by the Chancellor of the Exchequer, but poor Cinderella Ireland has to come at the end of the new Clauses on the 1st of October. I repeat that the Irish case is not being met, and anybody who thinks so will only be misled by the statement of the Chancellor of the Exchequer.

I cannot let this Clause pass without comment. I wish to call attention to the first Sub-section of the Clause, which gives an exemption to the tenant from year to year which is not enjoyed by the freeholder. He gets a special low rate of duty, but I do not say anything about that. I call attention to this matter as a further example of the extraordinary hostility of the Government to this class of people. I do not think that Sub-section (2) has been fully explained to the Committee. At present, in the case of small estates of £500 or £300, if the gross value does not exceed those two sums they are charged with a fixed duty of 50s. or 30s. The gross value must be those sums, and so you have rather the absurd position that where the gross value is £300, and the debts are £300, and the estate is bankrupt, you still have to pay the fixed duty. The Government say that they will allow certain debts to be deducted. What are those debts? They are the unpaid charges on the purchase money. Let me take a concrete case. Suppose a man has bought a property for £1,000, and has left £700 on mortgage. The net value in that case is £300, and he will have to pay a fixed duty of 30s. on that estate. But supposing, instead of leaving £700 on mortgage, he goes to somebody else a little while afterwards and raises the money with which to pay for the estate; there will still be a charge to the same extent on the estate, but he will have to pay it on the full £1,000. Surely the Government cannot intend that. According to the words of the Sub-section, the exemption is to be made in the case of unpaid purchase money. If the money has been borrowed elsewhere in order to pay the purchase money, he will have to pay on the gross value of the estate. Is that not a case of perfect absurdity? If you mean to take off the mortgage money which is raised in order to pay for the property you must change the wording of your Clause, because, as at present framed, it only meets the case where the money has been lent by the vendor of the property, and where it is left on mortgage. You are changing the whole system and making a fixed duty payable on the net value and not on the gross value. I think in doing so you should go the whole way. I do not know why you should only deduct mortgage debts; there may be other debts, such as gifts, which have to be paid out of the estate, but here you select one special class of debt and say that the rest of the debts are not to be counted. This Clause has evidently been hastily drawn, and I do suggest that it requires very careful reconsideration.

The two speeches to which we have just listened appear to me to answer one another. The hon. and learned Gentleman the Member for North Louth (Mr. T. M. Healy) said that this was not a Clause for the benefit of Ireland and that it met no Irish grievance. He also was good enough to say that he did not understand it, but that fact makes no difference to him apparently, when he is attacking the Government.

I said I was trying to understand it.

I do not think the hon. and learned Gentleman always realises exactly what he does say; he was very angry and perhaps he does not remember the exact words he used. He made a further complaint that we should be discussing a complex matter of this sort at 12 o'clock in the day—a matter which he argued had nothing to do with Ireland. His words were that it does not cover the case of Ireland, but it actually covers the British case. Evidently he wants something to be given to Ireland which shall not be extended to Great Britain. Why if we are meeting an actual grievance in Ireland should we not be allowed to deal in the same way with a grievance existing in Great Britain? I must say I think his complaint was most extraordinary. I think if he had looked at the Clause he would have realised that his speech was absolutely irrelevant, and thoroughly ill-informed and that he did not actually know what he was criticising. The hon. Member for Durham, who followed him, clearly did understand the Clause, yet he had just as long as the hon. and learned Member for Louth to make himself acquainted with its provisions. The hon. Member for Durham in fact declared that the Clause was really intended to meet an Irish grievance.

The point is, what have you to say on that matter?

I will deal with that in due course. As a matter of fact, in the main, the grievance is an Irish one, and I agree with the hon. Member for Durham that it meets the Irish case. The first part of the Clause is entirely Irish, and the hon. and learned Member for Louth chose to take no notice of that fact. The second Sub-section is also very largely Irish, but at the same time it will meet the cases of building societies. Perhaps the hon. and learned Member will allow us to redress a British grievance incidentally. I hope he will not regard our doing so as an injustice to Ireland. Surely, when we are redressing an Irish grievance, we ought to be allowed to extend that redress to a British grievance.

Why does the right hon. Gentleman say that Subsection (1) is purely Irish?

Because it deals with the marketable value of the yearly tenancy, and there is no such thing practically in England. There is here no market for tenancies from year to year, as is the case in Ireland. Therefore I say it is a purely Irish section as far as its practical application is concerned. The criticism of the hon. and learned Gentleman the Member for Louth is against the law as it stands at the present moment. He has made it a matter of complaint against the Government, although the alteration is certainly an alteration in favour of small estates both in England and in Ireland.

My objection to it is that it excludes some estates which have an equal claim with those included to this concession.

There is always that difficulty in redressing grievances. As a rule we go just as far as we can afford at the particular moment, and I must point out that we have gone further in redressing both English and Irish grievances in this matter than any of our predecessors. I hope that the hon. and learned Member for Louth will admit that the view he has expressed of the Clause is wrong. Under our proposal estates under £300 will be placed in one category and will pay a fixed duty of 30s. Estates under £500 will be put in another category and will be charged 50s. This must be a privilege to small estates, seeing that they are charged on a different scale to estates over £500. The scale for those estates is £2 per £100, and therefore an estate of £550 would pay £11, as against the 50s. paid by the estate just under £500. We are, for the first time, deducting the unpaid purchase money from the gross, and no one can deny that this is a very substantial concession. It is one which will make a difference to small owners as between £2 10s. and £11. The hon. and learned Gentleman must admit that his only complaint is that this is a concession which, although in the main for the benefit of Ireland, applies also to the United Kingdom. Of course, it is more to the benefit of Ireland because there are more cases in that country, at any rate, according to population, than in this country that will benefit. There is another thing of which I think I have a right to complain. The hon. Member is indignant because this Clause has only been on the Paper for 24 hours, but may I remind him that the whole thing has been discussed in his absence on several occasions, and, luckily for the Irish tenants, there was somebody in the House at the time able and willing to criticise it, and not only to criticise it, but to bring pressure to bear on the House of Commons. After all, I accepted the concessions which are embodied in this Clause quite a month ago. There was some question as to whether the new Clause should be put down as a Government proposal or whether it should be put down in the name of the hon. Member for North Dublin, but it was thought better it should be advanced as a Government Clause, because that would give it a certain preference for discussion. Still I repeat these are things I was prepared to accept quite a month ago. Only last week the hon. and learned Gentleman was complaining that we were debating Irish grievances at two o'clock in the morning; now he is complaining because we are discussing them at noon. Really I do not think the hon. and learned Gentleman has taken a course which he can justify, and certainly he has extended to me treatment which I do not deserve.

I must say I have a much higher sense of the intellect of the hon. and learned Member for North Louth than that which he seems to suggest he himself possesses. He tells us he is not able to undertand the Clause. My idea is that he was determined not to understand it. He said it was no con cession to Ireland that it in no way met the Irish case. I say it is a large concession to Ireland, and I invite the hon. and learned Member, if he thinks so badly of it, to go into the Lobby and vote against the Clause as it stands. To listen to his speech one would suppose that a fresh grievance was being inflicted upon Ireland by this Clause. Let the hon. Member have the courage of his opinions and go into the Lobby against it. I have only this further to say with regard to the criticisms to which we have listened—criticisms which are little calculated to assist us in getting concessions for Ireland from the Government. When I listened to the speech I asked myself this question, Does the hon. Member desire the Government to make any concession to Ireland? I am inclined to think that he does not, and that the object of such speeches as these is to secure that the representatives of the Irish people shall not get any concessions in order that he himself may have a special grievance against the Government. That is the only ground on which I can explain his speech. He passed over Sub-section (1) of this new Clause without a word, yet that Sub-section is an immense concession to Ireland. The Bill, as it stood, originally inflicted a most cruel injustice upon year-to-year tenancies in Ireland, an injustice which the repeal of Sub-section (5) of Section 7 of the Act of 1894 did not inflict on England at all. In all the communications I have had from Ireland on this subject the point which has been in the forefront of the representations made was that we should try and get rid of this grievance affecting yearly tenants. The Chancellor of the Exchequer met us frankly. He has given us a redress of the grievance, and yet he is told that he has done nothing for Ireland. Really I should have thought that by noon the intellect of my hon. and learned Friend would have been sufficiently awakened to enable him to understand a concession of this character. As the Chancellor of the Exchequer has truly said, this is not the first time this subject has been discussed. When it was under Debate on a previous occasion the hon. and learned Member for North Louth was in Dublin or somewhere else, greatly to the advantage of his colleagues here, and we discussed this matter in a very amicable spirit, these concessions being promised in reply to appeals from this side of the House. I doubt very much if we would have succeeded in getting such large concessions if the hon. and learned Member had been on these benches at that time. I repeat that the first Sub-section is an exceedingly valuable concession for which I, at any rate, thank the Chancellor of the Exchequer.

Now I come to Sub-section (2). That, again, embodies a most valuable concession, one which we were pressed over and over again in Ireland to obtain. To listen to the speech of the hon. and learned Member for North Louth one would suppose that the whole law as regards small estates is being altered by the Sub-section to the injury of the Irish tenants. It is nothing of the kind. The only alteration made by this Sub-section is to the actual advantage of the purchasing tenant in Ireland. It is an alteration which we pressed upon the Chancellor of the Exchequer. There is one point on which the right hon. Gentleman has not met us in this Sub-section, and on which we trust he may be induced to accept an Amendment which it is intended to put forward. It is a rather small point so far as he is concerned, but it is important to Ireland. We desire that in the case of the purchasing tenant, so far as leases are concerned, he shall be put on the same footing as the year-to-year tenant—that the method of calculation shall remain as it is under the present law.

Does the hon. Member suggest that this method of computation should be confined to cases where we try to arrive at the gross value?

I want to ask the right hon. Gentleman if he cannot see his way to accept the Amendment of the hon. Member for North Dublin, which would have the effect of preserving for the purchasing tenant, who, after all, has really become the tenant of the State, which creates the incumbrances and steps into the landlord's shoes—I want to ask whether in such a case he cannot, for the purpose of calculating the gross value of small estates, proceed by the old method of computation? That would greatly add to the value of this Clause, which, even as it stands under this Sub-section, we welcome as a most substantial concession to Ireland, despite the legal protest of the hon. and learned Member for North Louth. The reason why I am pressing for this small Amendment is this. In Ireland you have many holdings, such as bog holdings, of the value of £2, or £3, or £4 a year, which have however the preposterous value of 50 to 60 years' purchase. That from one point of view is a rather wholesome state of affairs, because, if land is once divided into small farms like that, it will never be reabsorbed by big men. The result of observations in Ireland is this, that the smaller the farm the more keen the competition and the more extravagant the price. Therefore some of the extremely small farms, owing to the high and extravagant market value of the purchase price of the farm, would be lifted out of the small estates zone and would suddenly jump up from the 30s. or 50s. Estate Duty to £7, £8, or £10. The moment you get outside the £500 limit, however, great additional legal costs and court fees will be incurred, and that is a very great burden on these small holders. Coming to the third Sub-section of this Clause, that also is a most valuable concession, because it is manifest that to a small farmer to be called upon to pay the whole of the Estate Duty is a very grievous thing, and it ought not to be put out of his power to act as the large estate owner can do. The hon. Member for Louth (Mr. T. M. Healy) says nothing has been done, but, if he thinks so, let him move the omission of this Sub-section and see what Irish opinion will be. I have had dozens of letters from Ireland asking me to endeavour to secure this valuable concession, and I thank the Chancellor of the Exchequer for it. I do hope that he will see his way to make the smaller concession we are asking for, which is really of no consequence to him, but which will be very valuable to small holders in Ireland.

I am sorry to draw the Debate away for a moment from the differences of opinion entertained by the representatives of Ireland as regards the value of this Clause, but I desire to say just one or two words from the point of view of the English purchaser of land—the small thrifty purchaser who is buying his land and raising part of his purchase money on mortgage, and who is not always able to borrow his purchase money from the vendor or the landlord. That is a common case, and it is one which everyone would desire, to encourage and enable the purchaser to secure the most beneficial terms. How would this new Clause deal with this common or desirable process? The point was put to the Chancellor of the Exchequer just now, but in dealing fully with the Irish criticism he entirely ignored it, but I have no doubt the Attorney-General will deal with that. As I understand the matter, it is quite plain and simple. People are taxed on what they have, and in ascertaining the duty incumbrances are deducted. In regard to the question of graduation, the basis is quite different as to the rate on which they pay. That also depends upon the principal value, and in classifying a man you deduct his incumbrances, which seems to me to be right, in principle, but he is not only taxed on principal value, but also graded on principal value, and in order to secure the benefits of this Clause and bring himself on the lowest grade of all he has to obtain this special exemption, and to bring himself within this Clause not upon principal value, but upon gross. I will not say it is an anomaly, but it is not symmetrical, to grade cases down to the lower or net value, and then it is shifted to the gross; but the Government are proposing to alter the basis of graduation as to this lowest step of all, and they are not proposing to shift the basis from gross value to principal, because they are not proposing to deduct all encumbrances. They are proposing to base this lowest rate not on one or the other. They are going to allow some deductions, but not all, and the deductions which are allowed to ascertain principal value will not be allowed for the purpose of this exemption. The case which I desire to put is this: I am not urging the Government to allow interest or to allow all deductions, but I do say this, that when for obvious and weighty reasons of policy you are allowing the deduction of encumbrances for the purpose of discharging the unpaid purchase money, it is an illogical and it is an unfair advantage to the Irish purchaser, whose vendor is always the State, and whose vendor, therefore, is the lender and mortgagee; it is unfair because the proportional number of small purchasers will be immensely greater in Ireland than in this country. In Ireland it will benefit everyone, but in this country it will only benefit the exceptional purchaser whose vendor is able to lend him the money or the purchaser through building societies, and while I do not grudge anyone this advantage, I think it should be extended generally to the thrifty purchaser who is borrowing a sum of money on mortgage.

The hon. and learned Member is not quite correct. He need not necessarily borrow from the vendor; as long as he borrows money anywhere for the purpose of purchase, it does not matter where he borrows it.

I am very glad that the Chancellor interposed He deals absolutely with my point. The only remaining point is drafting. I only had a short time to read this Clause, but it appears to me as if it were so limited. If the Chancellor of the Exchequer says it is not intended to be so limited, it is a mere question of drafting to provide that the words should be so altered that it will assume that the mortgagor is going to pay any body the purchase money, whether borrowed from the vendor or not.

I think the Chancellor of the Exchequer is better at polemics than he is at facts, and I think that his promises to the Irish tenants are very like his promises to the Welsh people about Disestablishment. The right hon. Gentleman thought it right to get up and make an attack upon me for asking a plain question which he has not answered. I asked him a plain question, and he dealt with me as if I had asked him for Disestablishment. I was not—I was only asking a plain question. The right hon. Gentleman has said that I was absent on a former occasion when this matter was discussed. Perhaps I am too often present for the right hon. Gentleman, and I distinctly remember the other morning, when a promise was made at four o'clock, or perhaps three, that he would speak by the Under-Secretary to the Treasury, but he did not find it at all desirable to take that course, and his complaint of me now is this, that because I complained of an Irish tax amounting to millions of money being put on at four o'clock in the morning, when a pledge was given on his behalf which was broken, that I am wrong in coming down and complaining that we have not got in regard to a much less important matter a little time for the understanding of this Clause. I am not in the least ashamed to avow that I cannot take in a clause involving reference to three or four Acts of Parliament at five minutes' notice. I agree in that respect with everyone except the hon. Member (Mr. Dillon). He is able to take in everything at a moment's notice, and in that sense I acknowledge the great advantage he has over myself. I asked a question a little while ago. It was not answered. Now I will ask it again. I asked whether the main body of the Irish purchasing tenants were in any way dealt with under this Clause. I said they are not, and I repeat it. I will separate them into two classes—the class which has purchased and the class which has not. As to the class which has purchased, according to the figures of the Irish Secretary, the borrowings are on the average between £300 and £400. That is the landlord's money. To that must be added the £300 or £400 of tenants' right, so that you are dealing with a case where the majority of these men will have an interest of between £800 and £900. I am not ashamed to ask a question in this House, even of the British Government or even of the Chancellor of the Exchequer. I have addressed still more experienced Chancellors of the Exchequer and got more courteous replies, but still I put the question to the present Chancellor of the Exchequer, and I ask him how will this affect the majority of the Irish tenant purchasers? I do not think it is any discredit to a private Member to be unequipped and to be driven to ask questions of a highly-paid Minister with a large staff of assistants under the Gallery to whom he can refer at a moment's notice and whose coaching is evident at every turn of the Debate.

With regard to the general body of tenants who have not bought, the so-called concesion is valueless for a wholly different reason, though I do not say it will not meet the case for a comparatively few of them. The only way you are able to hit the majority of the Irish tenants in regard to these Death Duties is because of the Registration Acts, and because they have bought. The general body of these people who have not bought do not take out any administration at all. There is no will, and if the State tried to levy the duty the State would fail, and the State does not levy the duty. It is a very different case when documents are in existence, whether in the case of a building society or in the case of those tenants who have bought. There at once you come down upon them. Title has to be made, administration has to be taken out, and if there is a will there has to be probate, and you are able in the great mass of these cases to impose the duty. All this £180,000,000 will in future be subject to Death Duties. All I ask the right hon. Gentleman is whether, assuming these fee simples to be of the value I put them at on the suggestion of the Irish Secretary, this Clause fits their interest or whether it does not? I dealt with one branch of the Clause, and it was only with regard to that point that I asked for information.

I certainly do not complain of the hon. and learned Gentleman or anyone else asking me for information. I am here to give such information as I have at my disposal with the advice of my officials, and I am bound to give it, and I have no right to complain. I complained because the hon. and learned Gentleman first asked a question, then said he did not understand it, and then proceeded to denounce it in the most violent terms. I think it is a perfectly legitimate complaint when I was doing my best to meet the case. I will show upon the question he has put to me how very far wrong he was in his assumption. It is very unfair to assume that we are trying to deceive the Irish tenant. The hon. and learned Gentleman has given the case of an Irish tenant who owes £300 or £400 unpaid purchase money. His tenant right is worth another £300 or £400. First of all, we are limiting the amount of tenant right upon which he will pay by the first Subsection. The tenant right is worth 40 years' purchase, but we only claim 25. We are, first of all, depressing the first item, and sometimes probably halving it. Supposing it comes to £300 and the other is £300—that is £600. We deduct the whole of the amount which remains unpaid to the State with a view of getting the gross, and the very case put by the hon. and learned Gentleman under this Clause would escape altogether. I hope he will now admit that there is a concession. That tenant does not merely come under £500. He will be a £300 man, and had it not been for this Clause that tenant would be paying £18, whereas now he pays 30s. As a matter of fact, we are putting the small man, both in England and Ireland, in a better position than he is in at the present moment, and we mean to deduct all the mortgage so long as it is proposed to purchase. I hope the hon. and learned Gentleman will in justice now say he did not understand the Clause at first, and that there is a substantial concession that he was not aware of.

I do not say anything of the kind. What I say is this. You are meeting the case of the English building society man and inferentially you have to make a small concession to Ireland.

I listened to the speech of the Chancellor of the Exchequer, in which he described the concession he intended to make, and I gathered that he would be prepared to accept my Amendment, which is, to add at the end of line 3, Sub-section (1), the words "and the tenancies subject to annuity under the Land Purchase (Ireland) Acts." I admit that that is an arguable point. The effect of that Amendment will be to carry out what I understood the Chancellor of the Exchequer to say was the concession he desired to give. The right hon. Gentleman gave an illustration of the concession he intended to make to the purchasing tenants of Ireland, and I wish to direct the right hon. Gentleman's attention to his own words. When explaining the concession he proposed to give he said that one of these purchasing tenants might sell at 40 years' purchase, but owing to the limitation contained in the Sub-section proposed to be repealed the Government could not charge more than 25 years on the valuation.

was understood to indicate dissent.

In the speech which the right hon. Gentleman made he was alluding to the purchasing tenants, and I concluded that he had made up his mind to give the concession.

We are prepared to leave the small freeholders in England and Ireland exactly where they were—the small proprietors up to £500. It means that they will be entitled to deduct these advances. In order to do that the words proposed by the Government are the only words that can be used. The words suggested by the hon. Member for Dublin (Mr. Clancy) would really do away with the benefit we propose to give. I doubt whether his Amendment would be in order. I should be prepared to add at the end of Sub-section (1) the words "and for the purpose of determining the gross value of property for the purposes of Section 16 of the principal Act." That is for the purpose of determining what will be the limitation.

Even in the case of the purchasing tenant?

Yes, whether in England or Ireland. The same thing would apply in both cases, and I do trust that hon. Members will feel that I have gone very far.

I must say that I consider that that is a very substantial and valuable concession to Ireland, but I must thoroughly repudiate the idea that we do not value the concessions we get in Ireland because they apply to similar cases in England. That is a preposterous doctrine to put forward. We have no desire that people similarly situated in England should not get the concessions; I was anxious to move an Amendment to extend that protection to all purchasing tenants. I must confess that the right hon. Gentleman has met us so fairly in the valuable concession he has made to the poorest and smallest people interested that I will not move the Amendment which otherwise I would have liked to submit.

I think this is a great concession to the freeholder. If I understand it aright, all estates under £500 will come under it in ascertaining the gross value.

That applies to small estates of less than the £500 limit. The number of years' purchase on the gross value cannot exceed 25 years' purchase.

I made no suggestion that the English people should not get the same concession as the Irish people. The difference is this: In regard to the Irish purchasing tenants, nine-tenths are hit by this and one-tenth benefited, whereas in the case of the British building societies nine-tenths are benefited and one-tenth are hit.

The Clause hits no Irish purchaser. It relieves, and substantially relieves, tens of thousands of Irish purchasing tenants. I think it is really a monstrous thing to say that a majority of the Irish purchasers are hit. Let the hon. Member for North Louth (Mr. T. M. Healy) go into the Lobby against the Clause. It obstructs in the most outrageous manner any attempts to get concessions from the Government if, when they are made, they are denounced as further Irish grievances. This matter is a little technical, and I would ask the Chancellor of the Exchequer to explain to us how the words he proposes to add apply to purchasing tenants in Ireland.

Sub-section (1) as it stands limits the 25 years' purchase to purely tenant right. Now we mean to extend it not only to tenant right but freehold as well for, the purpose of ascertaining whether a man is entitled to the privileges that attach to £300 or £500.

That will cover all the purchasing tenants in Ireland.

It will cover the vast majority of the estates in Ireland, because, after deducting the purchase money, I should very much doubt if one-tenth of the purchasers of Ireland would be over £500. The Amendment carries out the promise I made with respect to purchasing tenants of Ireland.

moved, after Clause 45, to insert the following:—

The hon. Member has brought forward a subject which is by no means a new one, and which has been discussed several times in the course of these Debates on the Finance Bill. It is quite true that the hon. Member, when he collects figures like those which he has placed before the Committee, is able to show—assuming that it is always necessary to keep an estate intact—some hard cases. He has compared the figures of the Finance Act before 1894 with the figures which would represent the taxes under the present Bill. Of course, he is entitled to do that, but a fair comparison would have been between the figures under the Act of 1894 for the last 15 years with what they will be under the present Bill. Of course, that comparison would not show in so strong a light as the comparison made by the hon. Gentleman. It must be quite obvious to the Committee that if we adopted the sliding scale suggested by the hon. Member the State would lose nine-tenths of the taxes in one year, eight-tenths in two years, seven-tenths another year, and so on. The diminution in the taxes which the State would receive would be enormous, and if my right hon. Friend the Chancellor of the Exchequer were here I think that would be for him a conclusive answer to the proposal of the hon. Gentleman. It is impossible to calculate what the loss of revenue would be, but it would be very considerable indeed. The principle of the Estate Duty, as I understand it, is that if property passes at death to any individual, whether he be a near relative or some distant relative, or, indeed, a stranger, the State has a right to come in and say: "This property has been protected under the possession of the former owner, it has come to you without paying anything for it at all, and it is fairly subject to taxation." Of course, the amount of the tax is another matter; it is the principle I am speaking of. I have never been able to understand the complaint of people who have to pay even £50,000 on succeeding to a property. I should be delighted to pay £50,000 Legacy Duty, but no one ever leaves me anything.

"Suppose the estate were left to you by your father?"

I should pay it; and I claim that the principle of the tax is a perfectly sound one. If a man receives property from somebody else, the State should come in and take a fair share of it. The hon. Member who moved the Amendment gave us the instances of particular estates. He admitted candidly that he had done so, and lay answer to him is that the estate is not necessarily the same after a death as it was before, because it may have been added to or deducted from by expenditure; it is not necessarily always the same property. I do not think that hon. Members are entitled to assume that a particular estate, because it happens to be in land, ought to be untouched by the tax to the extent that you ought to knock off portions of it. At any rate, that cannot be done now, and, since the Act of 1894, it is impossible. I have not gone into the figures; I have no doubt that they are perfectly accurate, because the hon. Member takes great pains to be accurate in anything which he puts before us. I think, in principle, the answer is that the amount has already been fixed, and that however frequent deaths may be, although this is a case of property coming from father to son, yet it is in principle the same transfer of property at death to a successor. The Committee has decided the amount, and we cannot accept a sliding scale exempting people from the operation of the tax simply because the devolution of the property has been earlier and quicker than succession usually is in such cases.

The subject which my hon. Friend has raised is one of vast importance and of far-reaching consequences in the administration of the Death Duties. It must be apparent to anybody who has followed the history of these Death Duties, particularly in the last three or four years, since the present Government came into power, that we are coming to a point in relation to the Death Duties at which tremendous hardships must necessarily occur, having regard to the way in which the present Government have gone on increasing the Duties. The present Government since they came into power have increased the Death Duties up to something like 75 per cent. When in 1894 they were imposed by Sir William Harcourt he assured us that what had to be paid would in no degree militate against the carrying on of business, having regard to the necessary capital which is to be maintained. But when in the course of three or four years you bring the tax up to the point of 75 per cent., of course the matter becomes one of extreme hardship and gravity in some cases. The case put by my hon. Friend is one which sooner or later will have to be met. I do not suppose that the Solicitor-General could meet it now, nor I suppose could the Chancellor of the Exchequer. But the deduction of capital from business will depend upon the mere accident of whether a man lives a long time or a short time. Anyone can see that with successive deaths and successive payments of the duty a whole business may be very easily ruined. Whereas by an accident or, as the hon. and learned Gentlemen would prefer to say, by the gift of Providence, a man gets a long life and the distribution of his estate, and the retention of his capital in his business takes an entirely different form. I do not believe myself with these high duties that it is possible for this to go on. I do not think it is fair, and I do not think it is impossible to find a solution. Take where in lieu of Death Duties you have a tax every 15 years, that is exactly the same principle of logic that my hon. Friend is trying to apply. It certainly would be far fairer to value the property every 15 years and take away a portion of it than to say in some cases, "We shall take away a portion of your property once in 50 years and in another case three times within five or ten years," which frequently happens. The question is one of equity, and must force itself to the minds of thinking men, and men who do not wish to carry on the taxation of the country in a haphazard fashion, as I am afraid we are getting into the habit of doing, especially since this Budget was brought in. My hon. and learned Friend the Solicitor-General, being a Welshman with a peculiar temperament, cannot see how anybody does not exult in paying taxes. I, as an Irishman, have not got the same great desire to pay the Death Duties. He seems to think nobody ought to abject. Let me put this case, and it is, I think, a very ordinary case throughout the country. A man has nothing but his business, and when he dies the Death Duties must be taken out of the capital of his business. You cannot avoid that. Supposing he dies and leaves the business to a son, and that two or three deaths occur in the business within three or four years: What will become of the whole capital of the business? Now is that a case where, from what the Solicitor-General says, the son, or the grandson, or the nephew, ought to be absolutely delighted at the idea of having to take away from their business the necessary capital for carrying on the business?

The question raised by my hon. Friend (Mr. S. Roberts) is certainly not a new subject, but it is one which will have to be fully considered. I agree with the Solicitor-General that the acceptance of the new Clause would be to diminish the Exchequer; but, at the same time, I think my hon. Friend is doing good service, and the matter has really nothing to do with politics, in raising the question, and in the figures he has given he has pointed out the way in which we are going in this country by leaps and bounds increasing these Death Duties, which must certainly be an abstraction of capital necessary for the purpose of carrying on the business and trade of the country. I do hope that some time or other some Chancellor of the Exchequer will think it worth his while to look into the question, and see whether some more equitable means of charging these Death Duties to taxpayers cannot be invented than the haphazard way of leaving it to the chance of life and death, without regard to whether a business is to be really ruined or not.

I regret that the Chancellor of the Exchequer has not been converted on this somewhat important new Clause. Although I cannot say that the machinery proposed by the hon. Member (Mr. S. Roberts) appears to be altogether equitable, still I have always felt that the point he has raised is one which ought to have been met long ago. The scale of Death Duties must naturally have some relation to the normal expectation of life. This House would never tax at the present rate if it was usual for those duties to become payable, say, every five years. Therefore we fix the scale on the normal expectation as to when those duties will become payable. There are, however, exceptional cases, and those exceptional cases, it seems to me, ought to be dealt with in a more businesslike manner than they are now being dealt with. The only argument against dealing with these exceptional cases in an exceptional manner seems tome to be that they are very rare. If they were more numerous there would be such an outcry that no Government could possibly withstand the legitimate demand that this burden should not fall on what you may call a few families much more severely than it does on other families. I am bound to say that in other countries where Death Duties exist this has been taken into account. In Germany the proposition was that no such duty should be paid on any particular estate within ten years of the last death. The principle has been admitted in other countries, I think properly, and I think it ought to be admitted here. I cannot quite follow the line of argument that this would mean a great loss of revenue to the Exchequer. After all, as was pointed out, these cases are very exceptional; they are not common. The very fact that they are exceptional shows that the Treasury would lose very little. It is not a common thing for an estate to pay frequently, so that some limitation of time in which an estate would be made free of duty would not diminish the yield to the revenue very much. I think most of the estates will be found to pay from every 20 to 25 years, and certainly not frequently under 10 years. I do not see that that would be any reason for not making a change. It would be more equitable to raise the scale of the Death Duties rather than to take it out of what you may call the accidental misfortune of certain persons.

The learned Solicitor-General's argument that the individual inheriting money is happy to inherit and that he is better off than he was before is no doubt true; but you cannot quite put the Death Duties in that way. After all, a man who has a family largely consisting of daughters, incapable of earning their own living, would like to have some guarantee, or to have the satisfaction of knowing that his estate will not be diminished in an unreasonable manner. Accidental or unnecessary hardship ought to be avoided. I cannot quite agree with the right hon. and learned Gentleman (Sir E. Carson) about the assumed destruction of capital owing to the Death Duties. It seems to me that it is a perfectly fallacious argument. If a man has £100,000, and leaves it to ten nephews nobody says it is destroyed. If you substitute the State for one of the nephews I do not think the capital is any more destroyed. Some of the nephews might take their share out, and spend it at Monte Carlo. If the business is a good one, I do not think there would be any difficulty in finding someone who would put capital into it, and the business would go on as before. I do not think that the argument has any real foundation. We have not heard that owing to Sir William Harcourt's Death Duties any business has ceased to exist owing to the fact that the executors had to pay Death Duties. It is the first function of the executor to proceed to convert the estate into money, and very often to pay much larger amounts than the Death Duties. If you are so anxious to protect the business capital of the country, you ought to pass a short Bill preventing testators from so leaving their money that it is withdrawn from the business to be paid out to the beneficiaries. The fact that the State is one of the beneficiaries does not affect the business aspect of the question at all.

I do not quarrel in the least with the moderate suggestion made by my hon. Friend with regard to Death Duties; it might very well be considered by the Government. But I cannot see my way to vote with the hon. Member opposite. The right hon. and learned Gentleman (Sir E. Carson) threw out the interesting suggestion that the State would do better if, as an alternative to the present method of collecting Death Duties, it took an instalment every 15 years. I imagine that any Government that proposed to penalise a man in that way for living long would be far more complained of than the Government which is now alleged to be penalising a man for not living long enough. I cannot agree with the right hon. and learned Gentleman that these Death Duties are inflicting an extreme hardship upon society. It seems to me that the minimum of hardship which taxes must impose upon the payer is inflicted by taxes which are imposed at death. When a man comes to die, his property is of no consequence to him; he cannot take it with him; he has no further interest whatever in it himself. Therefore it seems to me that if a man is asked to pay these taxes only when he has done with his wealth, when he is obliged to lay it down, the minimum of hardship is inflicted upon him. It is said that the successor is the sufferer. No doubt he has less money. But who is there who will contend that the son should begin where the father leaves off?

I do, for one.

If that were always done there would be an enormous accumulation.

Why not?

Mr. Carnegie said the other day that he thought the State would do right to take half the estate of a millionaire at death. I hope that the taxes challenged by this Amendment are deliberately intended to discourage, or that they are part of the policy, of which I approve, of discouraging huge accumulations of wealth. Recently a man died leaving ten millions of money. We do not want men to leave ten millions of money. It is not good for themselves that they should acquire so much, nor for their dependents, nor for their tenants upon whom they are able to levy tribute, nor for the nation at large. In my judgment, the policy of the Government in regard to Death Duties is one which should have the support of Members representing the people. Let them take as much as they can when, a man has done with his wealth. It is desirable that wealth should be diffused, not accumulated, because when diffused it fertilises the nation, but when accumulated it injures the nation.

I agree with the whole of the speech of the hon. Member for Chester (Mr. Mond), except his statement that there is nothing in the contention that Death Duties destroy capital, because if a man leaves £10,000 apiece to ten nephews it makes no difference if you substitute the State for one of the nephews. I think it makes a great difference. If the tenth nephew spent the whole of his legacy in the first year, I agree it would make no difference. But the difference arises because the chances are many thousands to one that that will not be the case, but that the money will remain capital in the hands of the nephew, whereas in the hands of the State it will not, but will be spent. The essence of

Large accumulations.

I understand then, that the hon. Member does not say that the process of saving, by which I mean the accumulation of capital as distinguished from income, is a disadvantage to the State? He would, I take it, agree that the more money is saved in the nation the more capital is accumulated; speaking of the nation as a whole, the better for us all. I should like to know what his view is. If by saying that large accumulations are an evil he means to attack, not the principle of accumulation, not the abstraction of money from revenue and the creation of capital, but accumulations in single hands; if he means that it is undesirable that the resources of the country should be gathered into a few hands, then, without entering into that very wide question, I would say that that is a very different matter. That evil would be struck at, not by these Death Duties, but by some kind of legislation such as exists, I think, in France and elsewhere, prohibiting those who possess means from leaving them all to one person. If what he means is that he is opposed to the accumulation of capital, I differ from him utterly. I say that that view is utterly unsound; but if he merely means that he is opposed to the aggregation of capital in a few hands, whatever our views may be in regard to that, that evil is not struck at by the Death Duties. You do not strike at that by abstracting from any man's capital and spending it as income.

moved to insert the following:—

I fully sympathise with the object the hon. and gallant Gentleman has in view, but I think he will find the existing law really meets the case. At any rate, I should like to have some evidence that it does not. It is purely a matter of regulation, and does not require an Act of Parliament. If the regulations are not satisfactory or liberal enough to cover cases of the kind raised by this Clause, I think they could be adjusted as to give protection in the case of persons who grow tobacco purely for this purpose. The existing regulations allow tobacco, whether imported or home grown, to be used for the manufacture of nicotine for horticultural or agricultural purposes, it is not necessary to make such provision in an Act of Parliament. It might, indeed, be mischievous and might be used for other purposes in the future. Therefore, I hope the hon. and gallant Gentleman will not press this Clause now. If he will demonstrate to me that the present regulations do not quite meet his case and do all he wants, I think I could suggest regulations by which people would be unable to grow tobacco for this purpose.

Am I not right in thinking that all tobacco grown for this purpose is liable to pay 3s. or 4s. per lb. duty?

No, even under the existing regulations tobacco, whether imported or grown for this purpose, so long as it is properly safeguarded and kept in a proper place, is duty free, and therefore there is no real necessity for putting anything into an Act of Parliament. It is already met under the existing law.

I think I am right in saying that at present all tobacco has to go into bond, and that practically excludes all home-grown tobacco. You cannot send that to a bonded warehouse in London.

I have no doubt that is a practical difficulty. I will consider the point, and, if necessary, remedy it next year—

You may not be here next year; why not now?

I am glad of the testimony of confidence the hon. Member has in me. I will do my beat to press upon the next Chancellor the desirability of dealing with this matter.

moved to insert the following:—

I was under the impression that upon one occasion I had met the hon. Member, not with generosity, because you ought not to do that at the public expense, but at any rate substantially. I am sorry that I cannot meet him here. In the first place his demands under this Clause are too expensive, and they would cost the Exchequer an enormous sum of money. Under his proposal not merely should we lose the percentage, but we should lose upon the whole of the rest of the estate. It is almost incalculable what we should lose. The provision which a man makes for his family is a very proper one, and so is any form of savings, but I cannot see any difference between the two. Supposing one man takes out an insurance policy for £500, and another man pays into a bank year by year a sum of money to save it up. In both cases the principle is the same. A man who insures does it in that way because he wants to make provision in case anything happens to him within a short period of time, in which case his relatives would be sure of a certain sum of money, whereas the life of a man who is saving year by year might come to an abrupt end. The principle, however, is the same. As far as the State is concerned, if you are going to spare these savings at all, you cannot confine it to insurance.

I think the right hon. Gentleman has over-estimated the sacrifices which the State would make in this case. My proposal only applies in cases where the property does not exceed one-twenty-fifth of the whole estate, and therefore the amount would be comparatively small. There is a great difference between putting £500 in a savings bank and taking out an insurance policy for £500. If a person dies in the first year he gets the better of the insurance company, but, as a rule, the insurance companies get the best of the bargain on account of the large number of transactions they undertake. From that point of view, I think the Chancellor of the Exchequer might have given my proposal a more sympathetic consideration.

I would ask the Chancellor of the Exchequer to consider this Clause in a sympathetic way before the next year's Budget, because this question of insurance is a matter in which we are more interested than any other. Under this proposal he would receive his money immediately, without any question whatsoever, and this would enormously benefit the Exchequer. It would mean an increase in the business of insurance, which would be good for insurance companies. It would also mean that the testator during his lifetime would be able to make such arrangements that he would know how much money he would leave at his death.

I am inclined to think that the Chancellor of the Exchequer has considerably over-estimated the effect of this Clause upon the Exchequer. The loss must be an unknown quantity, and it is not fair to assume that it would be extensive. There is another distinction to be drawn. The right hon. Gentleman says that insurance is very much the same as if a man puts something annually into the savings bank. In actual experience it is not the same. A man with an insurance policy running knows he is liable for the premium, and on that account he will make greater efforts to keep his expenditure at such a level as to make sure that he can meet his premium, and that fortification of his moral strength grows stronger every year. Therefore it means something to the State to encourage insurance by legislation.

moved to insert the following Clause:—

This is a grievance, to the extent to which it is a grievance, which I am afraid is inevitable so long as we have the present machinery of collection of the Income Tax. It is a machinery which all those who are engaged in the undertaking of collecting the revenue feel essential to success. I think the hon. Gentleman will agree there. It is desirable that you should collect as much as possible at the source. It saves trouble, and secures revenue which otherwise would escape altogether. This Clause would involve a very serious departure from that principle. I agree there is a certain measure of harshness in its operation, but it is almost inevitable in some oases. It is desirable that, as far as possible, you should do your best to minimise the number of hard cases, but the real danger is that the moment you begin to infringe upon the principle of collection at the source the whole machinery would break down, and you would be driven to the system of collecting by means of declarations. I do not think that is desirable unless you are really compelled to do it. The more limited the application of that method the better for the revenue. This is an illustration of the danger. There are two or three Amendments, each in its own way seeking to impinge, as it were, upon that principle. There are Amendments by the hon. Member for Manchester (Mr. Joynson-Hicks) and the hon. Member for Sheffield (Mr. James Hope), each suggesting some method of getting out of the present arrangement, and the hon. Member (Sir Seymour King) wants to carry it a little further. That is the real danger. If the hon. Member can show me means whereby it can be done without really breaking one of the cogs, as it were, of the wheel, then I shall be very glad to consider it; but, foreseeing the dangers and the far-reaching possibilities of admissions of this kind, I am afraid it is quite impossible for me to accept the Amendment. I am quite willing to consider, not only any representations which may be placed before me, but any suggestions which may be made with a view of meeting the difficulty.

I am entirely at one with the Chancellor of the Exchequer as to the advisability of the maintenance of the principle of collection at the source. I regard it as a vital thing in the collection of the Income Tax. I would, however, point out that the Amendment of the hon. Member for Sheffield is identical with my own, and the Amendment of the hon. Member for North-West Manchester is also practically identical, though it does not go quite so far. I will show the right hon. Gentleman in a minute how the difficulty can be met. At the present moment when a bank, for instance, makes up its accounts for the purposes of the Income Tax, it gives its gross trading profits, shows the amount it has received on securities, and sets off the amount it has already paid in Income Tax, and, if the profits exceed the amount of interest on securities, pays Income Tax on the difference. There would not be the least difficulty in making up a similar account showing when anything has been paid in excess and getting back an abatement, exactly as abatements are granted in other cases. All people who get abatements have their Income Tax deducted at the source, but they go to the Inland Revenue Department and file a certified account showing their income is only so much. I do not wish to avoid one shilling that is justly due, and all I ask is that in these cases they should be allowed to file a certified account with a list of securities and counterfoils showing on the strictest lines that the profits for the year, for instance, were only £30,000, whereas Income Tax had been paid on interest amounting to £40,000 on securities, and asking the Inland Revenue to return the Income Tax on £10,000. It would be a simple matter. It would not add a hundred returns for consideration at the Inland Revenue Offices, and would not disturb what I agree is a most precious instrument for collecting the Income Tax at the source.

I do not think it is quite as simple as the hon. Member seems to imagine It would in the first place involve a yearly adjustment. It would involve a close examination of each individual transaction, otherwise there would be no proper check. This year certainly I should not be justified in adding such additional labour to that which I have already imposed upon the Departments by this Bill. I may point out also that mutual assurance companies would escape altogether, since there are no profits made by them.

A mutual assurance company makes profits to be divided amongst its members.

I know of one company which only divided losses. In a case of that kind, wherever there are investments, they would escape altogether. I hope the hon. Member will reconsider his Amendment from that point of view, and I will also promise to reconsider the matter.

I have great sympathy with the Amendment, and I am bound also to express my gratification at the friendly manner in which the various suggestions have been received by the Chancellor of the Exchequer. The question of interest on investments is one of the most important parts of the work of directors of insurance companies. On their decisions the profits are often based. It should be the policy of the State to encourage as much as possible the assurance of lives. The matter is attracting much attention among life assurance companies, and I am glad that the Chancellor of the Exchequer has received in so kindly a manner the suggestions which have been made this afternoon. I hope he will leave the matter open for further consideration.

After the friendly way in which the Chancellor of the Exchequer has received my Amendment I will leave it for him to think over.

moved the following:—

I am very sorry not to be able to respond to the appeal of the hon. Member, but perhaps he may find it possible to respond to my appeal and thus set a good example. I will tell him why I do not think his proposal is a very desirable one. At the present moment the procedure before the Commissioners is not like the procedure before a court of law, and I doubt if any one would really desire that it should be. It is a question of the best way of getting at the facts. Now the business is conducted in a more or less conversational way between the parties. It is not as though there were an appellant and a respondent, with counsel appearing for each, documents put in, cross-examination allowed, and points of law raised. I do not think it is desirable that the business should be conducted in that way. In the long run it would be to the disadvantage of the subject, for the State would always be in a position to employ the best counsel, and the subject might not be able to do so. I, therefore, hope the hon. Member will not press the Amendment, as it really is not in the interest of the parties chiefly concerned.

I think there is a good deal in what the Chancellor of the Exchequer has said. The investigations before the Commissioners are not conducted in accordance with law court procedure. But the real grievance which I found to exist at the time I had the honour of acting as Solicitor-General was that appellants were well aware that, after they had been asked to leave the room, the surveyor was allowed to put his case before the Commissioners, and they had no opportunity either of hearing it or answering it. I would suggest to the Chancellor of the Exchequer that the Commissioners should not be entitled to hear anything from the surveyor of taxes, or anyone except in the presence of the other party. That is simply a matter of administration, and I think it would be an enormous improvement and give great satisfaction to people, because they do feel that after they have gone out statements are made to the Commissioners. It is a recognised practice, although I do not say that anything improper takes place, but a man states his case and goes out, and then the surveyor of taxes makes a statement in his absence. The man, therefore, goes away with a sense of injustice, because he has had no opportunity of answering the objections made. If the right hon. Gentleman would make that simple change in the procedure, he would remove a grievance, although I do not in any way impugn the action of these Gentlemen.

I think that is a suggestion of the right hon. Gentleman which deserves consideration. I think it is undesirable that the surveyor should, after all the evidence is put in, then suggest some kind of information to the Commissioners to which the subject has no opportunity of replying. I do think that is unfortunate, having regard to the fair and impartial judgment of the question. It is, however, not a matter of legislation, but of regulation and of procedure, and I shall be very glad to inquire into it and see if something cannot be done to put the matter right.

I entirely agree with the right hon. Gentleman, although in Scotland nothing is said either on the part of the Commissioners or the surveyors except in the presence of the subject. Therefore we have no matter of complaint in Scotland, but I am quite sure that if the plan adopted were for the surveyor, after the subject had left, to give the Special Commissioners information, we should complain. If such a procedure obtains in England I hope it will be put right.

I am perfectly satisfied with the statement of the right hon. Gentleman. The real grievance is, as has been stated, that after we have left the room the surveyor of taxes remains with the Commissioners, and, undoubtedly, we are of opinion that the information that he gives influences them. If the right hon. Gentleman will consider the matter I will withdraw.

moved the following:—

This is a very old grievance that comes up every year—indeed, it is a hardy annual—but it is rather a serious alteration of the general law for me to contemplate, and I think it would mean a serious diminution of the revenue, because there are many cases in which, if it is passed, exemptions may be claimed. In many cases the income is brought up to £700 by taking the two. I do not think, however, that there is any real hardship, as the provision does not apply to any people who cannot afford a contribution to the Income Tax; and, after all, these married people do live together, as they ought to do, and they have a joint duty in regard to the expenses of the household. Therefore, I do not think there is a real case of hardship, and the grievance is a sentimental one. As they live together the expenses of the wife are considerably less, and she has an income of her own. I think when we make an alteration of the general law it ought to be in cases of real hardship and suffering, and not in cases of this kind. I do not think there is any claim which would justify me in making the Amendment.

I am not going to argue the general question. I have not any sympathy with anybody who marries a woman with money, but there is a question which I wish to ask. Certain abatements were given to persons living abroad, and who happened to be there in the service of the country, and to others. I have a letter in regard to a missionary abroad who really has little or no money, but his wife, who is with him, has under £160 a year, and I have been asked whether, in that case, an abatement will be allowed. The lady is carrying out what the Chancellor of the Exchequer says she ought to do, and is with her husband. She is not a missionary, she is not the person who comes under the exemption, but between them they would, as there is a common fund.

In that case, I understand the lady has accompanied her husband in his capacity as a missionary. I should think a case of that kind should come within the exception which I promised to insert. I will consider it.

I understand the right hon. Gentleman's reason for not accepting the Clause was that it would cost too much money to the State. I am sorry the right hon. Gentleman has changed from the good example he set the House yesterday, when he said the question which the Committee should consider was whether or not the tax was just, and not whether or not it would cost the State money. I was lost in admiration at the excellent sentiment which he gave vent to yesterday. Now I find all these good instincts have left him, and he has reverted to his own bad self again.

I do not admit the grievance.

The rest of the Committee, I think, do. I will put this case. The right hon. Gentleman says if husband and wife are living together their joint income goes to the household expenses. A brother and sister live together, both enjoying incomes of their own. They pool their incomes, and they go to the household expenses in exactly the same way as a husband and wife, but their incomes are not aggregated together for the purpose of Income Tax, though, of course, the house is equally dear to them as to the husband and wife. But there is another point where a grievance comes in. For the purpose of Death Duties husband and wife are not taken as being one, but as being two. The right hon. Gentleman cannot have it both ways. If the husband and wife are to be taken as being one person for the purpose of Income Tax they must be treated as one person for the Death Duties. That seems to be absolutely unanswerable.

moved to insert the following:—

I really cannot accept this Amendment. We discussed the question very fully the other day, and I do not think I can depart from the position I took up then. I was not aware that it would be in order to move this Clause, for the exemption of land held for public or charitable purposes was dealt with in Clause 25.

In connection with a long Bill like this, it is sometimes difficult to remember whether individual questions which are raised in the form of Amendments have been already dealt with or not.

I think part of the new Clause was discussed on Clause 25, namely, that part which refers to the exemption of bodies constituted for public or charitable purposes, but the grievance of the local authorities was not discussed at all.

Part of this has already been decided, and that ought not to be moved now. As I have put the new Clause to the Committee, however, perhaps the hon. Member will withdraw.

I would ask the Chancellor of the Exchequer whether he cannot see his way to give the exemption to local authorities?

I will consider the point put by the hon. Member.

I beg leave to withdraw the Clause.

had the following on the Notice Paper:—

This Clause is outside the scope of the Bill.

This day week I raised a question on Clause 67 as to whether that Clause, which made a change in the Licensing Act of 1904, was not outside the scope of the Finance Bill, and you held that it was not, for Sections 33 and 36 of this Bill altered in a number of respects the Licensing Act of 1904. I submit that my Clause goes no further than any of these Clauses, and as it deals with a matter of some importance I would ask leave to move the Amendment.

In regard to Subsection (2) of Clause 67, I would point out that that was a question of an appearance on the part of the Treasury in connection with a matter to which other Clauses in the Bill relate. In regard to the right hon. Gentleman's new Clause, I would say that, although the situation indicated may arise from the taxation imposed by this Bill, the proposal would upset the provisions of the Licensing Act of 1904. In my opinion it goes a great deal further than the other Sub-section, and is not within the scope of this Bill.

moved to insert the following:—

Did he get a peerage?

That is coming. That Gentleman was wise in his generation. He not only got protection from unfair foreign competition in his own industry, but took particularly good care that no one else should have the same advantage, and thus passed on some of the money to the Free Trade party. That is one of the ways in which the Free Trade business is run. Cocoa is used to a very considerable extent in most of our towns by the very poor. It is considered by them to be both a food and a drink, and has the advantage of being very nourishing, while it has not got the disadvantages of tea and coffee, yet unless this Amendment is accepted this great Free Trade Government is going to put 1d. per pound on the raw material and 2d. on the manufactured article.

"Why did you not take it off?"

I do not think I had found out about this. But if we want to know what excellent stuff this cocoa is I will take the "Alliance News and Temperance Reformer," which I am sure many hon. Gentlemen opposite must be very fond of. This well-known paper says, "Cadbury's cocoa is a liquid food, and a high-class beverage, produced by British labour under the very best conditions." So it is, but it is protected from unfair foreign competition, and if we could have the same for our other industries we could have the same well-treated labour. I do not see why there should be protection for that one industry, in which the manufacturers were the particular friends of the Liberal Party, and no protection for anybody else. I may fairly say this, that as the cocoa industry is protected from unfair competition we certainly ought to have the hop industry protected— —

That appears to be going outside the scope of the Amendment.

It was only an instance, of course. I was allowed to make it last year, and I thought I should be allowed to make it this year. The effect of differentiation between cocoa and hops is that you encourage people to drink beer and discourage them from drinking cocoa. I think that that would be altogether against the principles of many hon. Gentlemen opposite. Furthermore, the growing of cocoa produces no labour. Another point is that chocolate imported into this country, if it is over 50 per cent. chocolate, has to pay the same duty as if it was all manufactured cocoa. Therefore the home producer gets a tremendous advantage, because he has much less taxation to pay on this kind of chocolate than the foreign producer. That is how it is that almost all the chocolate used in this country is made in this country, and that not one-twentieth part of it is imported from abroad. The consequence is that a great industry has grown up to the extent, I think, of something like £10,000,000. Hon. Gentlemen will thus see what an enormous advantage it is to protect our industries from unfair foreign competition, and how very much it helps the labour of this country. I hope the Government will accept this Clause. We shall anyhow have the chance of knowing whether hon. and right hon. Gentlemen on the other side are in favour of keeping this tax on raw material and the food of the people—a tax which does give the cocoa manufacturer of this country very effective protection from unfair foreign competition.

I do not propose to follow the hon. gentleman into the ethics of Tariff Reform, but I desire to state to the Committee what would be the effect of the hon. Member's proposal. It would do three things. It would repeal in the first instance the Customs Duty of one penny a pound on imported raw cocoa from 1st April, 1910; it would, in the second place, leave in force the duty on husks and cocoa shells of two shillings a hundredweight, and it would, in the third place, reduce from twopence to one penny the duty on cocoa and chocolate which is in any way manufactured. The hon. Gentleman is perfectly well aware that that would make a very considerable hole in the revenue, and it would reduce the amount received from the tax by £290,000. I do not think the hon. Member can expect us at this period of the financial year to accept the proposal.

I would like to support the Clause of the hon. Gentleman for reasons which I have on many occasions put before this House. In the first place, I support it because it proposes to reduce the amount of the indirect tax, and in the second place to reduce the amount of taxation levied upon an article of food. In supporting the Clause I do not commit myself absolutely to its details. I should not, were I to propose such an Amendment, leave, for instance, the penny duty on the imported manufactured article, for that is Protection pure and simple. In regard to the answer of the right hon. Gentleman, it is the old story of the late period of the Session and the interference with the Budget. May I ask how long it is since the Chancellor of the Exchequer for the first time made a concession to the landlords which involved, not the sum spoken of just now by the right hon. Gentleman, but about double the amount? It is largely a matter of willingness. I am sure the Government cannot complain of want of support on the Labour Benches during the progress of this Bill. I suppose this will be the second or third time I have voted against them in connection with this measure. There are many things in the Budget with which I and my colleagues are in hearty agreement. May I be allowed to say that I think the Chancellor of the Exchequer could have made the Budget far more popular than it is, and at very little cost to the country, if he had swept away the Cocoa Tax, which I do not think gives a total revenue of more than about £300,000. The amount of revenue from the tax on coffee is somewhat smaller, and therefore the Chancellor of the Exchequer might have repealed the duties on these articles. If the hon. Gentleman carries his proposal to a Division I shall go into the Lobby with him.

I do not think the right hon. Gentleman has given any answer to the question I have raised. He merely says that the Government cannot afford to lose the revenue. That is a very poor reason, considering the smallness of the amount. According to the right hon. Gentleman's own principles, he had no right to leave this duty on. To put a tax on a raw material which is a food of the people is bad enough, but to put an extra tax on a

I find that the hon. Member's Clause proposes, in the first place, to take off taxation on raw material, and, secondly, it proposes to put on the manufactured article enough to protect British industry.

moved to insert the following:—

In putting on the taxes this year we do not make any change at all in the nature of the appeal allowed. This would be a very serious alteration of the law. There is an appeal now, and it is not quite fair to say that the cases are not stated fairly.

I did not say intentionally.

The appeal now is by way of case stated. You must assume that the people from whom the appeal is made will state the case fairly. I do not know what appeal other than that you can offer, except generally, on fact and law, leaving the whole matter open. That may or may not be a great improvement in the law, but at this stage it is rather a strong order to ask the House of Commons to make it. Wherever there is an appeal by way of case stated the same alteration ought to be made. Practically all the appeals from the inferior courts of this country are by way of case stated, and the same arguments used in favour of this Amendment might be used in regard to most cases. The appeals from quarter sessions and petty sessions, and in rating appeals, which are analogous to Income Tax cases, are all by way of case stated. The case of the county court is quite distinct. There the appeal is only on a clear point of law, unmixed with fact, which must have been clearly stated by way of objection before the county court judge. The answer to my hon. Friend is two-fold. First, there has been no serious complaint up to now of the method of appeal in Income Tax cases by way of case stated; secondly, appeal by way of case is not at all confined to these cases, but is quite the ordinary form of appeal, and there is no reason for the alteration on this particular matter any more than in the other matters where the appeal is in this form.

I hope the Chancellor of the Exchequer will favourably consider this proposal. I must differ entirely from the Solicitor-General when he says that there has been no complaint of the present procedure of appeal by way of case stated. I was Solicitor-General for six years, and I could not count the number of complaints that were made. When the Income Tax gets high, as it was during the war, an immense number of complaints are made by parties interested in Income Tax assessments. Many complaints come to me, mainly on the ground that it is impossible in cases where there are mixed questions of law and fact, unless you have a general right of appeal, that the court should have cognisance of the real question raised. I believe that these objections come from the very persons who are most willing to act honourably and fairly towards the revenue, and who are perfectly prepared to pay their fair quota towards the revenue of the country; but they feel a grievance when there is a point which they thoroughly understand in relation to their own business coming before these Commissioners, who very often give the go-by to the contentions put forward, maybe because they do not understand them. These Commissioners are not lawyers, and a man has to be a long time at the Bar before he understands when a case passes the border line between law and fact and becomes a mixed question of law and fact. I remember many cases in which I have appeared for the Crown where the parties have complained through their counsel that the way in which the case was stated stated them out of court. I do not say that it was done with any improper intention; but it was impossible to argue the question you wished to argue, because you were at once met with the statement, "The Commissioners say that they have found, as a matter of fact, so and so," and you were thereby precluded from going into questions of law on which the facts which the Commissioners professed to have found might depend. That is entirely unsatisfactory. I remember cases in which the judges have strained the administration in order to allow facts to be stated, so as to show the way in which the Commissioners have dealt with a particular point, and the matter has been sent back to the Commissioners from the court for them to state various facts in order that the appellate tribunal might have them before it, and be able to see the real bearing of the facts on the question of law. Nobody who has had to deal with the matter can help knowing that the complications of business, the various ways in which accounts are kept, what are legitimate trading deductions are all matters which may very materially affect the assessment for Income Tax, but are matters which under the present system the parties are precluded from bringing into court. All through these Debates we have fought for an appeal in regard to the new taxes, especially the Land Taxes, and the Government have met us satisfactorily. We have the fullest appeal in relation to the Land Taxes. Why should Income Tax be in a worse position? The Income Tax is becoming by far the most important in the country. We have the fullest possible appeal in relation to Death Duties. What difference in principle is there between Death Duties and Income Tax in the matter of the appeal? The sole case now left outside is that of Income Tax, which, in my opinion, having regard to the diversity of businesses existing in the country, raises far more complicated questions than any other tax. The Solicitor-General referred to rating cases. In every one of those cases there is an appeal to quarter sessions on value.

I was talking about appeals from quarter sessions.

Quarter sessions is the oldest court of record in the land. It is a court of the same importance as any other. In every one of those cases you have an appeal to the court of quarter sessions, one of the most competent of courts. You will not find a single Act dealing with valuations for any purpose in this country—I have had the matter searched out—in which there is not an appeal both upon the question of fact and upon the question of law. I submit that

I do hope the Government will not treat this matter in the way they have so far treated it. After all, what do the arguments of the Solicitor-General amount to? He does not say a word against the Amendment on its merits. He does not deny that such an appeal would be a great improvement in order to ascertain the truth and do justice. Nobody can deny it. Everybody knows that an appeal from the Commissioners to the High Court would better secure justice.

dissented.

The Solicitor-General must really not be quite serious when he shakes his head. The right hon. Gentleman says that there is no appeal from quarter sessions, but you can always have one by way of case stated. You have an appeal at present to quarter sessions, which, though not quite equal to an appeal to the High Court, is infinitely superior to the method proposed in the Bill. The case for the Amendment is absolutely overwhelming. The only argument against putting it into the Bill is that this is 1st October. There is no other reason. If this matter had been raised at a reasonable period of the year I do not believe the Government would have resisted it for a moment. I do earnestly hope the Committee will uphold the contention of the hon. Baronet and adopt the Amendment.