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Commons Chamber

Volume 32: debated on Tuesday 12 December 1911

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House Of Commons

Tuesday, 12th December, 1911.

The House met at a Quarter before Three of the clock, Mr. SPEAKER in the Chair.

Private Business

Lerwick Harbour Order Confirmation Bill [ Lords],

Read the third time, and passed, without Amendment.

Army

Copy presented of Report by the Inspector-General of the Forces on the Territorial Force [by Command]; to lie upon the Table.

Trade Reports (Annual Series)

Copies presented of Diplomatic and Consular Reports, Annual Series, Nos. 4825 and 4826 [by Command]; to lie upon the Table.

East India (Coronation Durbar)

Copy presented of Announcements by and on behalf of His Majesty the King-Emperor at the Coronation Durbar held at Delhi on the 12th December, 1911, with Correspondence relating thereto [by Command]; to lie upon the Table.

West India Mail Service

Copy ordered "of Contract, dated the 4th day of November, 1911, between His Majesty's Postmaster-General and the Royal Mail Steam Packet Company for the conveyance of Mails to the West Indies; together with a copy of the Treasury Minute thereon, dated the 11th day of December, 1911."—[ Mr. McKinnon Wood.]

East India (Vaccination And Small-Pox)

Returns ordered, "showing the following particulars for each year in respect of which records have been kept for each

province of British India and for British India as a whole: ratio of successful Vaccinations per 1,000 of the population; Small-pox death rate per 1,000 of the population at all ages; percentage of the total deaths from Small-pox occurring at the following ages: under one year, one to ten years, and over ten years."—[ Mr. Ramsay Macdonald.]

Message From The Lords

That they have agreed to:—

Merchant Shipping Bill, without Amendment.

Public Roads (Ireland) Bill, with Amendments.

Public Roads (Ireland) Bill

Lords Amendments to be considered to-morrow, and to be printed.

Oral Answers To Questions

Russia And Persia

asked the Secretary of State for Foreign Affairs whether there has been received at the Foreign Office any communication from the German Government relative to present affairs in Persia?

The answer is in the negative. We have not received any such communication from the German Government.

Fair-Wages Clause (Government Contracts)

asked the Under-Secretary of State for India whether the advisory committee of the Board of Trade has now reported as to the new wage arrangements at the Dowlais works; and whether he is now in a position to restore the firm in respect of those works to the list of contractors recognised by his Department.

asked the Under-Secretary of State for India whether he has yet received a report from the advisory committee concerning the wages scale for Dowlais; and whether, as the dispute was settled ten weeks ago, the firm of Guest, Keen and Nettlefold is again eligible to tender for contracts for his Department?

As I understand that an arrangement has been arrived at at Dowlais which is satisfactory to all parties, I have given instructions that orders may again be placed with Messrs. Guest, Keen and Nettlefold at their Dowlais works.

asked the First Lord of the Admiralty whether his attention has been drawn to the refusal of Messrs. Thornycroft, Government contractors, of Southampton, to observe the trade union conditions and wages to their workmen; whether this firm have recently discharged workmen for asking for the trade union rate and substituted men paid at the rate of 22s., being 6s. and 8s per week lower than the recognised rate of the district; and what action he proposes to take to prevent this firm evading the Fair-Wages Resolution of the House of Commons?

As I informed the hon. Member for South-West Ham yesterday, investigation is now being made into this matter.

asked whether Messrs. Scott's Shipbuilding and Engineering Company, Limited, Greenock, are contractors for his Department; if so, is he aware that this firm refuses to pay the recognised rates of wages to the members of the Associated Iron, Steel, and Brass Dressers of Scotland; and whether he will approach the firm with a view of compelling them to observe the Fair-Wages Resolution of the House of Commons?

No official communication had been received prior to this question being placed on the Paper. Inquiry is now being made into the matter.

Indian Police (Convictions For Torture)

asked the Under-Secretary of State for India whether he is in a position to state in how many of the fifty-seven cases of convictions for torture by the Indian police during the last six years the victims were Europeans; in how many cases, where death ensued, the accused policemen were either charged with or convicted of murder, and how many charges of torture during the same period were dealt with by Departmental or private police inquiries; and can he say in how many of the above cases any compensation was paid to the sufferers and, if so, to what amount?

I have asked the Government of India to supply the information for which my hon. Friend asks, and will communicate with him when I have received it?

Does the Government of India recognise any general obligation to pay compensation to persons who have been so treated?

My hon. Friend will remember that in answer to a previous question of his I have stated the rules with regard to compensation, how the Court can order the payment of compensation, and how the Government can pay, if the local government so advise, compensation in addition to the compensation recommended by the Court itself.

Indian Army (Aeroplanes)

asked if any arrangements have been made for the instruction in India in practical aeroplanism of officers belonging to the Indian Army?

The subject of aviation is now under the consideration of the Government of India whose proposals are awaited.

Hospital Stoppages (Army)

asked the Under-Secretary of State for War whether his attention has been called to the fact that the soldier does not receive free medical attendance, in view of the fact that while he is in hospital 7d. per diem is deducted from his pay, his ration allowance, 6d. per diem, is stopped, and he loses the benefit of messing allowance, 3d. per diem, making a total charge of 1s. 4d. per day against an average charge for subsistence per patient per day estimated to be 11¼d.; and whether, in view of the fact that the soldier receives no benefits under the Insurance Bill while serving, he will consider the desirability of either abolishing hospital stoppages or reducing them to at least one-third of the present rate?

My right hon. and learned Friend undertook in Debate on the Insurance Bill on 7th November to give an opportunity for adequate discussion of the whole question of hospital stoppages on Army Estimates next Session. I cannot now add anything to the statements made during the discussion of this matter in the Insurance Bill Debates.

Will the hon. Gentleman give an undertaking that he will thoroughly consider the whole matter before the Estimates are discussed next year?

I will give notice that I will raise the question on the Estimates. Will there be opportunity for discussing it?

Army Air Battalion

asked how many officers belonging to the permanent establishment of the Air Battalion are at present engaged in aeroplane work on Salisbury Plain?

Three officers of the Air Battalion and two officers attached are at present engaged on aeroplane work at Salisbury Plain.

Are the two officers attached included in the permanent establishment to which the question relates?

That is to say there are three officers now engaged in work on Salisbury Plain belonging to the permanent establishment?

The hon. Member has managed to ask four supplementary questions, all separate questions, to which he has got full answers.

asked whether any cross-country flights have been undertaken by officers of the Air Battalion during the past six months acting under official instructions; if so, whether their expenses in connection with such flights have been refunded; and, if so, what sum has been expended in such manner?

Several cross-country flights have been undertaken by officers of the Air Battalion during the last six months. Claims for expenses are for the consideration of the local military authorities, and it is understood that certain claims are now being so considered.

asked whether an engineer officer engaged in aviation work receives no additional pay; whether an officer of the Guards on joining the Air Battalion loses his Guards' allowance; and, if so, whether steps will be taken in framing the proposed pay regulations for the Air Battalion to deal with these cases?

In regard to the first and second parts of the question the facts, under present arrangements, are as stated. As regards the last part of the question, these cases will be considered.

asked whether it is proposed to form an aviation corps apart from the Royal Engineers and under separate administration?

I am not in a position to make any further statement on this subject at present.

asked whether officers who obtained an Aero Club certificate before the issue of the new regulations will be entitled to the allowance of £75?

If they are recommended and selected for aviation work they will be entitled to the allowance.

asked whether, if, as is officially stated, 100 officers are to pass through a short aviation course, it is the intention of the Government on mobilisation to withdraw such officers from their regiments for the purpose of forming an aviation corps; and, if so, how the deficiency in regimental officers is to be made good?

asked whether the Army Council has sanctioned the proposed system whereby, on the outbreak of hostilities, officers who are also aeroplanists would, when their services are most needed, be permanently withdrawn from the regiments to which they belong?

The officers in question will be withdrawn from their regiments on mobilisation, and vacancies in the regiments will be dealt with in the usual way when officers are withdrawn for staff duties.

If any of these officers break their necks or get injured otherwise, will any allowance be given?

I hope that there will not be very many fatal accidents. The whole question of compensation for injury is under careful consideration.

Army Confidential Reports

asked the Under-Secretary of State for War whether, in view of the existing system of confidential reports on officers in the Army, sometimes required to be made by commanding officers recently transferred from other units, whose knowledge as to individual officers must therefore be more or less superficial, he would consider the advisability of abating or amending the present custom under which these reports are furnished?

It is the custom for commanding officers when they have not served for a sufficiently long time to enable them to form a due appreciation of the character and qualifications of the officers under their command to refrain from expressing an opinion in the confidential report. In any case an officer is reported on by at least three senior officers, all of whom normally have knowledge of him?

Danger Area Of Shells, Isle Of Wight

asked the name of the officer who was responsible for under-estimating the danger area of partially filled shells, whereby portions of shell recently fell in the town of Bembridge, Isle of Wight, doing damage to property and placing persons in peril of their lives; and what steps have been taken to prevent a recurrence of similar accidents?

Under the practice instructions 800 yards on either side of the line of fire is considered safe for filled shell, and was therefore deemed to be an ample allowance for shell with blowing charges. As I have already explained, the question of increasing this safety zone is being carefully considered to prevent any possible recurrence of such an incident. It is considered that the officers superintending the practice were not to blame.

There are Regular officers, with Regular soldiers firing, so I understand.

Territorial Force (County Associations)

asked whether representations have been made, either officially or unofficially, to the Under-Secretary for War that the funds at the disposal of the county associations of the Territorial Force are inadequate; and whether, in that case, he has arrived at any decision on the matter?

Representations have been received from some associations that their funds are inadequate and from others that they are adequate. A return now in course of preparation on the Motion of the hon. Member for West Dorset will show the actual financial position of each association on 31st March last. Any decision as to further grants can be taken only in connection with the Estimates for next financial year.

Will figures also be compiled for the last six months preceding the 31st March, so that we may have the whole thing up to date?

Are measures going to be taken in the Budget of the next financial year?

Bank Of Upper India

asked the Under-Secretary of State for India whether a concern known as the Bank of Upper India, at Meerut, is in fact a money-lending institution owned by certain Eurasian and native financiers; whether the said bank is permitted to lend money to officers at a high rate of interest; whether the premises are situate within the limits of the cantonment; and what rent, if any, is paid by the financiers who own the bank for the site which their bank occupies?

The Bank of Upper India has its headquarters at Meerut, and branches at a number of other places in Northern India. The Secretary of State has no reason to suppose that it differs from other important Indian banks either as regards the classes of persons by whom its shares are held or as regards the nature of the business which it transacts. The Secretary of State has no information as to the situation of the bank's premises at Meerut or as to the terms on which the site is held.

I have no reason to suppose that it differs from other Indian banks. I have no particular information. It is not a Government dispute.

The hon. Member, I think, is imparting in an imperfect manner information which he possesses. If he cares to give me the information I will make inquiry.

Is it illegal for an Eurasian or native of India to operate a bank in India?

Indian Cantonments

asked whether the sites of cantonments for British troops were recently selected in order that the troops might be removed from crowded centres of native population; and whether, seeing that such cantonments, notably Mian Mir, Rawal Pindi, Umballa, and Meerut, are now occupied as well by a large native population, he will state on what terms British officers are housed in such cantonments by payment of rent to native landlords or on payment to Government of a fixed rate for quarters?

The cantonments of Mian Mir—now known as the Lahore Cantonment—of Rawal Pindi, of Umballa, and of Meerut have all been occupied by troops for well over half a century, and cannot be said to have been "recently selected." In cantonments where Government quarters exist they are occupied by officers at rents which are fixed according to the rank of the officer. Where Government quarters do not exist or are insufficient officers rent houses from their owners. Such rents necessarily vary with the class of accommodation which the house affords.

Do the officers rent the houses in those places from natives or from Englishmen?

asked what special regulations, if any, exist as regards the conduct and control of natives resident in the bazaars of Indian cantonments; and whether any dustin or fee is paid by them to any official, or whether they pay rent to the Government for any dwelling within such compound that they may occupy?

The special regulations regarding the conduct and control of natives resident in the bazaars of Indian cantonments are embodied in the Cantonments Act, 1889 and in the Cantonment Code, 1909, issued by the Governor-General in Council under the powers conveyed by Sections 25, 26, and 27 of that Act. The only fees required of such residents are those sanctioned by that Code. Their dwellings are not necessarily or even usually the properly of Government.

Price Of Polo Ponies (India)

asked whether the attention of the Under-Secretary for India has been drawn to the increase in the price paid for polo ponies in India within recent years and the consequent financial difficulties in which many officers find themselves involved; whether a suggestion has been made to him that to obviate incurring such expenses, polo tournaments at Royal Durbars and other official entertainments should be discouraged, or recommendations conveyed to polo committees that any team should be disqualified where it was ascertained that any pony had been purchased or acquired for more than a figure to be fixed by regulation; and whether he proposes to take any action in the matter?

I have no information regarding the price of polo ponies in India. The answers to the other parts of the question are in the negative.

County Court Officials

asked the Chancellor of the Exchequer whether he will reconsider the claims of clerks and officers of the County Courts to receive similar rates of pay and pension to those existing in the High Court, in view of the fact that recent legislation has thrown upon these County Court officials a large increase of work and such as necessitates a much wider range of knowledge than was formerly required?

These clerks and bailiffs are, and always have been since the institution of the present system of County Courts in 1847, engaged, paid, and dismissed by the registrars and high bailiffs of County Courts. Their salaries are paid out of the statutory remuneration fees and allowances of their employers, partly derived from moneys voted by Parliament and partly from fees charged to suitors. In this connection it should be remembered that registrars and high bailiffs are clothed with considerable responsibility, and that they give large security to the Crown for the carrying out of their duties which covers, and always has covered, the acts and defaults of their employés. Such a system, which has produced great efficiency in the County Courts, does not admit of consideration being given to a claim on the part of the clerks and bailiffs to receive similar rates of pay and pension to those existing in the High Court, where the circumstances are different.

Is there any possibility of these clerks in the future being put on the establishment?

Is it not very desirable, in view of the dissatisfaction which has been prevalent over a long period of years, that there should be some promotion to the establishment staff?

National Insurance Bill

Cost Of Production

asked whether any actuarial estimate has been, or can be, made of the increase in the prices of commodities and manufactures as a result of employers placing the contributory charges under the National Insurance Bill on the cost of production?

I see no reason to anticipate the result apprehended by the hon. Member, which, in any case, would obviously not admit of actuarial calculation.

My expectation is justified not only in Germany, but in other countries where the system has been adopted, that it will be absorbed in the increased efficiency of the workmen.

Does the right hon. Gentleman expect increased efficiency to result at once?

Appointments Under Part I

asked whether particulars relating to the appointments for the organisation of Part I. of the National Insurance Bill will be published; and, if so, in what manner?

I will refer my hon. Friend to the answer that I gave yesterday to the hon. Member for West Bradford.

Will the right hon. Gentleman make it clear that it is useless to make applications to Members of Parliament?

It is important that it should be made clear. I say it is worse than useless, and would rather prejudice an applicant.

Administration

asked the Prime Minister whether he intends to appoint a Parliamentary Insurance Minister; and, if not, who will be responsible to Parliament for the administration of the Government's insurance scheme?

The Treasury will be responsible for Part I. of the insurance scheme. It may be convenient that I should state that the Joint Committee to be set up under Clause 83 of the Bill will consist of a Chairman, the four Chairmen of the Commissions, Mr. Bradbury, Dr. Smith Whitaker, and the Chief Registrar of Friendly Societies. The present Under-Secretary for the Home Office will be Chairman and will reply in this House in respect of the work of the Joint Committee, and of the four Commissions, and Sir Robert Morant will be Vice-Chairman. The President of the Board of Trade will be responsible for Part II. of the Insurance Bill.

Supposing we wish to recommend any gentlemen for appointments under the Insurance Bill, to whom ought we address them?

May I ask if the right hon. Gentleman will consider the appointment of an actuary on this Commission?

Can the right hon. Gentleman say what appointments he will make for Scotland?

Part Ii—(Unemployment)—Appointments

asked the President of the Board of Trade whether he is prepared to make any announcement which would deter candidates for appointments under Part II. of the National Insurance Bill from seeking the influence of Members of Parliament in support of their applications?

In making appointments in connection with unemployment insurance regard will be had solely to the efficiency of the service and to the qualifications of the candidates. I may take this opportunity of stating that political influence should not be sought in support of any application, and that such action would prejudice rather than assist the candidature. I feel sure that in making this statement I have the full support of hon. Members.

Will the right hon. Gentleman say where, when, and to whom the applications are to be made?

Can the right hon. Gentleman give instructions for the preparation of postcards setting out that Members of Parliament have no power of influencing the appointments to be given, so that Members may be able to use them if necessary?

I do not think that is practicable. What I do propose to do, having given this answer, is to have it printed, and to send copies to hon. Members who desire them, so that they may send the answer to those who apply to them.

I have no control over Part I., but I understand the Chancellor of the Exchequer has already given a similar reply to mine.

The hon. Member had perhaps better apply to the Chancellor of the Exchequer.

Will the right hon. Gentleman answer my question. Where, when, and to whom are applications to be made?

asked the President of the Board of Trade whether particulars relating to the appointments for the organisation of Part II. of the National Insurance Bill will be published; and, if so, in what manner?

I am in hopes that a large proportion of the more responsible appointments may be made from among persons already in the Government service. The remaining appointments will be made on the recommendation of the Civil Service Commissioners, and I shall be guided by them as to the necessity and manner of giving public notice of vacancies.

asked the President of the Board of Trade whether Part II. of the National Insurance Bill will be carried out in conjunction with the present machinery of the Labour Exchanges?

Approved Societies' Books

asked the Secretary to the Treasury whether it is implied in Part I. of the National Insurance Bill that the Insurance Commissioners shall supply approved societies with the necessary books?

I will consult with the Insurance Commissioners when they are constituted as to whether any of the books should be supplied gratis to societies, but there is nothing in the Bill to require the Treasury to take this course.

Employment In Post Office (Inquiry)

asked whether, in view of the fact that it is proposed to accelerate the date of the inquiry into the conditions of employment in the Post Office owing to the recent increase in the cost of living, he will expedite the Treasury concurrence in the Admiralty proposals on the Macnamara staffing committee's Report, to enable a reply to be given to the petition of the Admiralty and Out-ports Clerical Federation, dated January, 1908, observing that the pay of this body of public servants has remained practically stationary for over thirty years?

This question is receiving the careful consideration of the Government, but I cannot undertake to say at this stage when a decision will be reached.

Bankruptcy Of Farmers (Statistics)

asked the President of the Board of Agriculture whether he will, in conjunction with the Board of Trade, agree to a Return being made giving the statistics about the bankruptcy and liquidation of farmers of all classes in the last four quinquennial periods?

My right hon. Friend has asked me to reply to this question. Information as to the failures of farmers is included in the Annual Bankruptcy Reports presented by the Board of Trade to Parliament. I am having a table giving statistics for the periods referred to printed with the Votes.

Ceylon (Civil Service)

asked the Secretary of State for the Colonies how long has the regulation been in force prohibiting other than persons of pure European descent from competing for the Civil Services of Ceylon; and whether he will give the exact terms of the old regulation and the alterations recently made by his Department?

The Ceylon Civil Service is not confined to persons of pure European descent. Candidates for cadetships must be natural-born British subjects either (a) of pure European or Asiatic descent on both sides, or (b) of mixed European and Asiatic descent. The wording of this regulation was altered last year in order to make it clearer. Previously it had stated only that cadets must be natural-born British subjects of European or Asiatic descent. As regards the police force, the regulations issued when the system of competitive examination was introduced in 1908 slated that probationers must be of European descent. In order to obviate any possible ambiguity the clause was altered this year so as to read, "Every candidate must be a British subject of pure European descent on both sides."

With reference to that part of the reply which deals with the police, will the right hon. Gentleman say whether the rank and file are required to be of pure European descent?

Australia And United States

asked whether the Secretary for the Colonies has any official information showing that a Member of the Australian Parliament, declaring himself to be empowered by his Government, is at Washington in order to discuss the primaries of a reciprocity arrangement between Australia and the United States; whether, in view of the fact that the official discussions connected with the recent Canada-United States reciprocity agreement were prefaced by earlier approaches of a somewhat similar character, His Majesty's Ambassador is keeping the Government advised of the progress of affairs and the British and Imperial interests involved; and whether, in the event of no such representations having yet been received, he will undertake to communicate at once with Mr. Bryce?

I have no information to the effect referred to by the hon. Member. His Majesty's Ambassador would, of course, inform His Majesty's Government if he was aware of any such negotiations taking place.

Government Contracts (Colonies)

asked whether the right hon. Gentleman has yet received a Report from the advisory committee concerning the wages scale for Dowlais; and whether, as the dispute was settled ten weeks ago, the firm of Guest, Keen, and Nettlefold is again eligible to tender for contracts for his Department?

As I understand that an arrangement has been arrived at at Dowlais, which is satisfactory to all parties, I gave instructions on the 22nd November, so far as my Department is concerned, that orders may again be placed with Messrs Guest, Keen, and Nettlefold at their Dowlais works.

Prison Employés (Scotland)

asked the Lord Advocate why so small a percentage of ex-Service men, namely 20.71, are employed under the Prisons Commissioners, Scotland; and whether, in view of the fact that many ex-Navy and ex-Army men are well qualified for such posts as those of attendants and warders, he will give instructions that the percentage of ex-Service men employed by the Prisons Commissioners should be raised to at least 50 per cent. as soon as possible as vacancies occur?

All applications from ex-Service men are considered, but a very large number of candidates are found to be ineligible, as they do not fulfil the requirements of the War Office Regulations as to the civil employment of discharged soldiers. Appointments are given to all ex-Service candidates considered suitable, but many do not care for the work, and resign before long. The percentages of total appointments given to ex-Service candidates during the last four years ended 30th September, are:—

190846 per cent.
190940 per cent.
191040 per cent.
191142 per cent.
It will thus be seen that the average of such appointments in recent years is well over 40 per cent.; and in these circumstances, while all such applications will be carefully considered, I do not think that it would be desirable to give such further instructions as are suggested by the hon. and gallant Member.

Wharncliff Buildings, Boscombe, Post Office

asked the Postmaster-General whether it is intended to give telegraphic facilities at the new sub-post office at the Wharncliff Buildings, Boscombe?

The necessary inquiries are not yet complete, but I will let the hon. Member have a reply as soon as possible.

Post Office Employés

asked the Postmaster-General whether the maximum wage for postmen in the districts of Leigh, Tyldesley, and Atherton is 23s. per week, being a reduction of 1s. per week on the maximum paid prior to 1st January, 1908; and whether, in view of the cost of living in these urban areas, he will consider the advisability of transferring this district from Class 4 to Class 3, so that the earnings of the postmen affected may approximate more nearly to a living wage?

The facts are as stated in the first part of the question. The cost of living index number for Leigh, furnished by the Board of Trade, is 92, which is considerably below the average, and on a strict reading of the Parliamentary Committee's recommendations Leigh would have fallen into Class V., and the maximum pay of future entrants to the postmen's class would have been reduced by 3s. a week. Atherton and Tyldesley were classed by analogy with Leigh, and there would be no justification in either case for improving the classification at present. The scales of pay of postmen were fixed on the basis of the report of the Parliamentary Committee, and in addition they enjoy certain privileges, uniform, boot allowance, sick pay, pension, etc., the actuarial value of which is estimated at about 7s. a week, besides being eligible for good conduct stripe allowances up to a maximum of 6s. a week. The total remuneration of a postman in a Class 4 office is therefore much larger than the wage payment quoted by the hon. Member, and rises to a maximum of about 36s. a week. I am unable to agree that the postmen do not receive a living wage.

Yes, Sir, generally. I am not sure that it is not rather higher. It varies with the wages and the actuarial value of the pensions which is based on a wage payment.

asked the Postmaster-General whether his attention has been called to the threatened strike of Post Office officials; and whether he can make any statement to allay the uneasiness felt by the public in consequence?

I do not think that there has been any probability of a strike of Post Office officials. No appreciable number of established civil servants would be likely to terminate their employment by adopting such a course. Even the suggestions of a strike which appeared a few days ago in some of the newspapers have now ceased, and any uneasiness which may have existed is already allayed.

In view of the acceleration of the inquiry asked for sometime ago by the postal service, may I ask whether he is aware that a frequent cause of serious trouble and grievance amongst the postal service is the prolonged delay in dealing with grievances presented to headquarters, and whether he can take any action to accelerate their settlement?

asked if the sum of £1,064,000 which was provided for the salaries, wages, and allowances of sub-postmasters in the Estimates, Revenue Department, for the year ending 31st March, 1911, was sufficient for the purpose; whether more or less than that amount was expended; and by how much the amount actually expended differed from the amount estimated?

The estimate of £1,064,000 for wages, salaries, and allowances of sub-postmasters for the year 1910–11 was part only of a total of upwards of eight and a quarter millions voted under three sub-heads, C 1, 2, and 3, for the salaries, etc., of provincial establishments generally. The total of these three sub-heads cannot readily be analysed, and I am unable to state precisely by how much the amount actually expended on the purposes mentioned by the hon. Member differed from the estimate. I may say, however, that on this total there was a balance of 2.6 per cent., and probably there was a similar margin in the part appropriate to sub-postmasters.

asked if sub-postmasters generally have been instructed to obliterate stamps on parcels; whether this is an additional duty introduced since the Hobhouse Report was adopted; and, if so, to what extent it is intended to improve the remuneration of sub-postmasters in consequence?

The duty of obliterating stamps on parcels posted, which was introduced experimentally at some sub-offices as far back as 1906, has recently been entrusted to all sub-postmasters. For many years sub-postmasters had been required to date-stamp the labels on parcels, or if they had no date-stamp to write the name of the office and the date. The additional work involved is inconsiderable, and it is not proposed to make any additional payment on that account to sub-postmasters.

Post Office Savings Bank (Small Deposits)

asked the Postmaster-General if he can give any particulars of the nature of the economies in the Savings Bank which he has lately foreshadowed?

I have arranged to introduce on 1st January next a new method of dealing with small accounts in the Post Office Savings Bank, which will, I anticipate, effect substantial economy in the working of the Bank without any withdrawal of public facilities or lessening of security. Under the existing system a record is made in ledgers at the chief office of the Bank of every transaction in every account; and the cost of dealing with small accounts, especially if small sums are deposited and withdrawn at frequent intervals, is excessive. About 800,000 accounts a year are opened with amounts of less than £1, and about half of these are closed without ever reaching £1. Under the new system any person opening an account with a deposit of less than £1 will be given a deposit book of new design. In this book the counter officer will affix adhesive labels, called coupon receipts, each of which, after being date-stamped and initialed, will denote a deposit of 1s. If, for example, the sum of 5s. is deposited five coupons will be affixed. When the depositor wishes to withdraw he will sign a withdrawal form, and the counter officer, before handing him the money, will detach from the perforated pages of the book a number of coupon receipts corresponding to the number of shillings withdrawn. Whenever the amount deposited reaches £1, at which stage under the Savings Bank Regulations it begins to bear interest, the depositor will be given an ordinary deposit book in place of his coupon book, and all further transactions will be dealt with under the existing system. For transactions dealt with under the coupon system no ledger record will be necessary, but dockets in respect of deposits and coupon receipts in respect of withdrawals will be sent to the chief office and stored in such a way that, in the event of a depositor losing his book, the Bank will, as at present, be able to ascertain the amount standing to his credit. The precautions against fraud will be as complete under the new system as under the old. It is estimated that no less than 4,000,000 transactions a year will be dealt with under the new system, and it is anticipated that the working expenses of the Bank will eventually be reduced by upwards of £17,000 a year. But, as I do not propose to dispense with the services of any of the existing staff, the full amount of this saving will probably not be realised until the system has been in operation for two or three years, and the surplus staff has been absorbed.

Parcels Post

asked how many parcels were posted in the United Kingdom during the year ending 31st March, 1911, and what proportion of these were posted at sub-offices?

The number of parcels posted in the United Kingdom during the year ending 31st March, 1911, was 120,032,000; but I cannot say what proportion of this number was posted at sub-offices.

House Of Lords

asked the Prime Minister whether it is the intention of the Government to proceed with a Bill for the reform of the House of Lords next Session before the introduction of the Home Rule Bill?

May I ask whereas a distinct mandate was given for the reform of the House of Lords and the question brooked no delay, how it is consistent with his pledge of honour——

May I ask whether he has considered that the House of Lords has been reformed?

May I ask whether he thinks the country will accept his suggestions for reform?

Profane Language (Conviction At Leeds)

asked the Prime Minister whether his attention has been drawn to the case of Thomas William Stewart, who was sentenced at Leeds on 5th December to three months' imprisonment for using profane language, and also to the case of John William Gott, who, at the same time and place, was sentenced to four months' imprisonment for having published a pamphlet entitled, "Rib-ticklers or Questions for Parsons"; and whether in view of these and of other similar cases, he will take steps to reform the laws respecting blasphemy?

One of these prisoners has applied for leave to appeal against his conviction and sentence, and so long as the case is before the Court of Criminal Appeal I cannot say anything about it.

May I ask whether the right hon. Gentleman does not consider that apart from these cases the blasphemy laws stand in need of amendment, and whether he is aware that under a Stature of William III., which has never yet been repealed, many of the most harmless and orderly Members of this House could probably be held liable to imprisonment for three years?

I believe there is a great deal of substance in the question. It is a question of very old standing, and perhaps the hon. Member would postpone any further inquiry on the subject until these particular cases have been dealt with.

Is the right hon. Gentleman aware that the late Mr. Justice Stephen, in his "Digest of the Criminal Law," sets out in parallel columns two versions of the blasphemy law, for each of which he says there is high authority?

Is the right hon. Gentleman taking any steps to shorten the sentences passed upon these people? In any case, might not the man who has not appealed be dealt with?

No. I must wait until the appeal in the first case has been heard. I must also wait until application is made to me by the parties that the sentences should be revised.

Apart altogether from the criminal appeal in this case, can the right hon. Gentleman say whether the Government will consider or is considering a reform of the law respecting blasphemy?

I do not think one week's delay will make much difference, if my hon. Friend will postpone his further inquiry until this subject has been disposed of.

Brussels Sugar Convention

asked the Prime Minister whether he could so use his influence with regard to the length of time that speakers from the Front Benches would occupy in the Debate on Foreign Affairs on Thursday next that reasonable time might be allowed for discussing the Amendment dealing with the Brussels Sugar Convention without unduly curtailing the facilities desired by Members to raise other questions; and, if not, whether he would give another opportunity for raising this specific question in such a manner that the House might express its opinion upon it?

I gather that there are many Members wishing to take part in the general Debate, and, of course, I cannot interfere with their freedom in any way. So far as this bench is concerned, the speeches will be few and short, and I hope that my right hon. Friend may get the opportunity he seeks.

If the Debate on the general question is extended, will the right hon. Gentleman find another opportunity for this very important subject to be discussed?

There will be a very full opportunity in the Debate on the Address.

What view would the right hon. Gentleman take about the Division in the Debate on the Address? The Division is the important part.

I am afraid I cannot deal with that question until the occasion arises.

Has the right hon. Gentleman any guarantee that the speeches from the Back Benches will be equally short?

asked whether a meeting of the Brussels Sugar Convention was held as arranged last Friday; if so, whether permission was given to Russia to export an additional 500,000 tons of sugar westwards; whether any conditions were attached to the concession; whether the export of this sugar can take place immediately, or if it will be necessary for the decision to be ratified by the Governments of the respective countries who are parties to the Convention; and, if so, what delay such ratification may involve?

With regard to the first part of the question, a meeting of the International Sugar Commission was held on Friday last. I cannot yet give any answer to the remainder of the question, as the meetings are still in progress, and no decision has yet been arrived at.

Can the right hon. Gentleman say whether the notice which appeared in "The Times" yesterday was an accurate account of what is going on, and what his attitude would be towards the proposal to make the price of sugar 15s. per cwt.?

I have not heard of the proposal. If my hon. Friend would give me notice, I will make inquiry.

Welsh Disestablishment Bill

asked whether it was the intention of the Government to send to Grand Committee the proposed Bill to disestablish and disendow the Welsh Church; and, if so, whether, having regard to the controversial nature of such a Bill, the Government would reconsider their decision?

The Government have not yet considered the method of procedure to be adopted in regard to this Bill.

Is it within the recollection of the right hon. Gentleman that the late Mr. Gladstone and the late Sir H. Campbell-Bannerman frequently deprecated sending highly controversial Bills to Grand Committees; and will the Government bear that in mind?

Home Rule Bill (Finance)

asked the Prime Minister whether his attention had been drawn to a statement made at the annual meeting of the General Council of Irish County Councils on the 5th instant by a member who had recently been examined by the Special Committe on Irish finance now sitting in camera that the claims put forward by the Standing Committee on national finance and involving large extra subventions from the Imperial Exchequer to relieve the Irish ratepayers in respect of national education, Poor Law relief, and district lunatic asylums, would be recommended for adoption by the secret committee alluded to; and whether, should any such proposals be actually carried into effect, it was the Government's intention to introduce legislation conferring corresponding relief to British ratepayers in accordance with the recommendations of the Royal Commission on Local Taxation?

I have not seen the statement referred to. If made, it was made without any authority, and, as I have said more than once, I cannot at this stage anticipate the proposals that will be brought forward by the Government.

Is it not a fact that the education rate does not fall on the Irish ratepayers at all?

I do not think that that arises out of the answer. Perhaps the hon. Member will address that question to the Chief Secretary.

Parliament Act

asked the Prime Minister whether, in view of the recent statements of prominent Members of the Cabinet, it was the policy of the Government to shorten the period during which the suspensory veto of the Second Chamber operated under the Parliament Act, and to enable the will of the House of Commons to override the views of the Second Chamber within a less period than two years?

Is the right hon. Gentleman aware that the statement was made by his colleague, the Foreign Secretary? Does he allow his colleagues to make important statements of this description without his sanction?

Has not the Prime Minister read the report of his right hon. Friend's speech at Plymouth on a revised Second Chamber? Does he not read these speeches?

I read them to the best of my ability. There is nothing in my right hon. Friend's speech which in the least degree bears out the suggestion in the question.

May I call the right hon. Gentleman's attention to the latter part of the speech? May I send it to the right hon. Gentleman?

Out-Door Relief

asked the Prime Minister whether he would give the House the assurance that the Order concerning out-door relief proposed to be issued by the Local Government Board should not be so issued until the House had had an opportunity of examining and, if necessary, criticising the provisions?

My right hon. Friend proposes to introduce certain Amendments to the Order in question, which he has explained in a Paper which is being circulated to-day. When these Amendments have been considered it is hoped that they will be found to meet all such criticisms as have been made upon the Order, which can, of course, at any time be amended.

Telephone Service (Postmasters' Payment)

asked the Postmaster-General whether, in connection with the taking over of the telephones from the National Telephone Company, a revision was contemplated of the existing rates paid by the Department to scale payment sub-postmasters for providing for the accommodation of and the working of telephones; and, if so, to what extent the rates were to be improved for such postmasters?

A revision of the existing rates of remuneration of scale payment sub-postmasters for telephone work is contemplated, but I am not yet in a position to give any information as to the effect of the revision. I would add that persons who are sub-postmasters and who also have charge of Exchanges of the National Telephone Company receive remuneration on a lower scale than is paid by the Post Office for similar work.

Postmasters And Railway Duties

asked the Postmaster-General if he was aware that the postmaster at Angmering, Sussex, was also the station-master at the London, Brighton, and South Coast Railway station at that place; and, if so, whether he had given his sanction to a person occupying dual positions of this kind?

The station-master at Angmering railway station was appointed sub-postmaster in 1901, when no other candidate applied for the position. The sub-postmaster of an office of this class is not required to devote his whole time to the duties, and I see no reason for disturbing the appointment.

Delivery Of Letters (East Preston)

asked the Postmaster-General if he was aware that letters addressed to a resident in Seaside Road, East Preston, were not delivered at that address, but were left at a house some hundreds of yards away; and that when the postmaster of the district was approached upon the matter he said that his men had not time to deliver the letters at the address given; and whether he would give instructions to this postmaster that all letters in his district must be delivered at the address given on the letter?

Letters for residents in Seaside Road, East Preston, are delivered as addressed; and even in the case of a portable bungalow, situated about 200 yards beyond that road, and almost on the foreshore, the postmaster of Worthing arranged for a delivery. On one occasion only since September last, when the bungalow was closed, a letter was left at the house of the caretaker.

Atlantic Cable

asked whether, in view of the fact that the whole of the Atlantic cable system has now passed under the control of a foreign corporation and the risk of interruption of communications resulting therefrom in time of war, it was the intention of the Government to proceed with the scheme of a State-owned Atlantic cable?

asked the Postmaster-General whether, under the existing arrangement, the whole cable system between the United Kingdom and the Dominion of Canada was under the control of the United States; and what steps he proposed to take to establish an all-British cable to avoid this strategic disadvantage?

There are thirteen cables from the United Kingdom to North America, and all of them land on Canadian or Newfoundland territory. This fact should be borne in mind in connection with the strategic consideration raised by the hon. Member's question. The land lines both in Canada and in the United States are in the hands, not of the Governments, but of private companies, and there is no guarantee under existing conditions that a State-owned cable, if laid, would be able to establish connections with the land lines in those countries. On this side the British Post Office would not be able to supply the cable with much traffic, as the Anglo-American Cable Company is entitled, under an old agreement, to receive all transatlantic cablegrams which are not ordered by the sender to be transmitted by a specified route. The business of the Pacific Cable Board is at present far from sufficient to justify laying an additional cable across the Atlantic in order to carry its traffic alone. The hon. Member's question is inaccurate in that it suggests that all the transatlantic cable system is now under the control of one corporation. The Commercial Cable Company, with five cables, is not a party to the combination recently formed. I have established, as a condition of the renewal or transfer of landing licences, Government control of the rates charged by some of the cable companies, and shall extend this control as the licences of others fall to be renewed. Where the control applies rates cannot be raised without the consent of the Government, and may be reduced on the demand of the Government. The companies have a right of appeal to the Railway and Canal Commissioners if the equity of any proposed reduction is disputed. In view of all these circumstances, and of the substantial reductions now being made in many of the transatlantic rates, His Majesty's Government has no present intention of embarking on the large capital expenditure and annual commitments which would be involved in laying a State-owned cable.

Is the right hon. Gentleman aware that one transcontinental line in Canada, as regards telegraphic facilities, is not under the control of the American Telegraph and Telephone Company? Now is the opportunity, if I might respectfully suggest it, for us to make our arrangements with them as regards through traffic for the Pacific cable.

The Pacific Cable Board has already leased a wire of its own from Montreal to Vancouver.

Are we to understand that the right hon. Gentleman has reasonable expectation that in time of war he will be able to get complete control?

asked if any estimate had been prepared of the cost of a State-owned Atlantic cable between Ireland and Newfoundland?

No recent estimate has been prepared, but I may state, for the hon. Member's information, that the cost of one of the cables laid last year between this country and Newfoundland was about £450,000.

Did not the right hon. Gentleman state at the Imperial Conference that the annual cost would be about £50,000, and did not New Zealand offer to pay about £12,000 per annum?

The partners on the Pacific Cable Board were willing to share the cost of a Pacific cable and an Atlantic cable if one were laid.

Telephone Service (Mere, Wiltshire)

asked the Postmaster-General whether he is aware of the demand at Mere, in Wilts, from a considerable number of would-be subscribers for the installation there of the long-promised telephone service, and that its absence tends to restrict the development of agricultural and other industries and especially of the important furniture business for which the town has become famous; and whether, as the inquiry by the postmaster at Shepton Mallet as to prospective telephone customers at Mere was quite inadequate to gauge the demands of the inhabitants, he will cause further inquiry to be made by some other responsible official of his Department?

The result of the recent canvass at Mere for telephone subscribers resulted in six agreements only being obtained. I think that more subscribers than this should be obtained in the town, and I will arrange shortly for another canvass to be made.

Salisbury District (Postal Service)

asked the Postmaster-General whether he is aware that letters posted on Sunday morning in Salisbury do not reach Steeple Langford, Little Langford, and Hanging Langford, villages only eight miles away in the district of which Salisbury is the market and commercial centre, until Tuesday morning, and that it is a two-days post to these villages from Bournemouth and other towns in the South of England not forty miles distant; and whether, to avoid the inconvenience suffered by the inhabitants of these villages, he will substitute Salisbury for Warminster as their postal centre?

I have called for a report, and I will communicate the result to the hon. Member.

Out Relief (Local Government Board Order)

asked the President of the Local Government Board whether he proposes to issue a similar Order as to the provision of out-door relief to the Order he published on the same subject about a year ago and intended issuing, but subsequently withdrew; and if he would agree to delay the issuing of any such Order as to out-relief until the next Session of Parliament, so that opportunity may be given to the House of Commons to consider the same?

I propose to issue shortly an Order on the subject of out-relief. The modifications of the Order proposed last year by the Departmental Committee are shown in a Paper I have recently circulated. I do not think it necessary to defer the issue of the Order as suggested.

Motor Traffic (Warning Signals)

asked the President of the Local Government Board whether he is aware that, notwithstanding the circular recently issued by the Commissioner of Police, many drivers of motor vehicles in London still continue, especially during the hours of darkness, to make excessive and inconsiderate use of warning signals; and whether, in these circumstances, he can hold out hopes of passing next Session legislation on the lines contained in the Motor Traffic (Street Noises) Bill introduced on 4th July, 1911, by the hon. Member for Kincardineshire?

It is possible that the response to the circular issued by the Commissioner of Police has not been so good as was anticipated. I am not in a position at the moment to make any promise as regards legislation next Session, but the matter is engaging my attention.

Railway Strike (Casual Signalmen)

asked the President of the Board of Trade whether he is aware that during the recent railway strike a colliery official was employed to work the points at the Abram North signal-box, Bickershaw branch, near Wigan; and whether, in view of the public danger involved in the employment of inexperienced persons as signalmen, he will take steps to prevent a repetition of actions of this kind?

I received a communication with regard to this matter in August last, but in the exceptional circumstances it did not appear necessary to take any action.

French Tariff

asked the President of the Board of Trade whether he has received any representations from chambers of commerce or textile manufacturers protesting against the new French tariff regulations to come into force on the 1st January; and what steps the Board of Trade are taking to assist these manufacturers in urging upon the French Government the desirability of reducing any such duties as may be considered oppressive?

I would refer the hon. Member to the answer given yesterday by the Parliamentary Secretary to the Board of Trade to the hon. Member for the Enfield Division, of which I am sending him a copy.

Is the right hon. Gentleman aware that the President of the textile section of the London Chamber of Commerce considers that these duties average something like 30 or 40 per cent. additional?

If the hon. Gentleman considers it well, I shall be glad to answer any further question.

Lifeboats On Passenger Ships

asked the President of the Board of Trade if he is prepared to submit regulations for securing the proper inspection and testing of lifeboats on passenger ships, especially such as carry emigrants; whether in these regulations he will insist that all passenger ships shall possess sufficient seaworthy lifeboats to carry at least a reasonable percentage of the passengers and crew; whether, in deciding the question of seaworthiness, inspectors shall have regard to the time it takes to launch the boat; and whether he will insist that all boats undergoing the test shall be allowed to remain in the water not less than five minutes?

Under the provisions of the Merchant Shipping Act, 1894, and the instructions issued by the Board of Trade, the boats of every passenger steamer are inspected by the Board surveyors at each survey of the vessel for passenger certificate, and at other times as opportunities occur. The boats of emigrant ships are also inspected at the survey which takes place before a vessel is allowed to clear as an emigrant ship from a British port. It is the custom of the surveyors to require, whenever practicable, a number of the boats to be lowered into the water, and in the case of emigrant ships they are frequently manned and rowed about for five minutes. The owners and masters of all British ships are also responsible, under the Merchant Shipping Act, 1894, for seeing that the life-saving appliances are kept so as to be at all times fit and ready for use; and the masters are required to keep a record, in the official log, of every occasion on which boat drill is practised and the life-saving appliances are examined. The Board of Trade have reason to believe that this is regularly performed on passenger and emigrant steamers. It is also required by the statutory rules that means shall be provided for launching ships' boats as quickly as possible, and attention is always paid to this point by the Board's surveyors. The Board of Trade are carefully considering at present the question of the number of boats required to be carried by large passenger and emigrant steamers, and also the question of the seaworthiness of ships' boats.

Pottery (Mark Royal)

asked the Secretary of State for the Home Department what are the conditions under which his Department grant permission to pottery manufacturers to use the mark Royal upon their ware; whether such permission is granted indiscriminately to all applicants, or whether it is granted for use only to such as are supposed to produce high-class articles; and, if so granted, by what means does his Department provide that the mark Royal shall not be used upon the cheap and common kinds of china and earthenware?

The hon. Member is mistaken in thinking that permission to use the title or mark "Royal" is granted by my Department. I would refer him to Section 68 of the Trade Marks Act, 1905, and Section 90 of the Patents and Designs Act, 1907, which prohibit the use of the Royal Arms or the title "Royal" in connection with any trade without His Majesty's authority. Any application for the King's permission would, in ordinary course, be submitted through the Home Secretary, and His Majesty's pleasure would be conveyed to the applicant through the same channel. So far as I am aware, there are only three firms of pottery or porcelain manufacturers who have authority to use the title or mark "Royal." These firms are all long established and of high repute. No rules have been laid down as to the use of the word "Royal" in respect of certain qualities of merchandise only.

Conviction Of Old Age Pensioner

asked the Home Secretary whether his attention has been drawn to the case of an old age pensioner, Amos Burgess, who was sentenced to seven days' hard labour for an alleged theft of coal, value 6d., from an allotment; whether such sentence also involves the loss of his old age pension; and, if so, whether there is any action he can take to prevent such penalty following this crime?

My attention has been called to the case, and I have made inquiry as to the facts. I find that the newspaper reports of the case which the hon. Member has no doubt seen, are incomplete and inaccurate; and after full consideration I have not felt justified in advising any interference with the sentence. Under the Act, which received the assent of Parliament this Session, the forfeiture of pension is for two years only.

Among the facts that are now within the knowledge of the right hon. Gentleman is it a fact that the coal was on the prisoner's allotment?

The coal in question was a considerable quantity, weighing, I believe, 43 lbs. I understand the man was at the time carrying it across his allotment, but that there can be no question whatever that the coal was stolen.

No, Sir; I do not think that the place of origin of the coal was found, but my hon. Friend will understand that in an article like coal it is very difficult to prove where such a quantity as 43 lbs. may have been stolen from.

The matter is rather important: is there any evidence to disprove the statement of the prisoner that he found the coal and the sack on his own allotment?

Yes, Sir; the Court was satisfied that the prisoner had stolen the coal. My hon. Friend must understand that I do not occupy the position of a Court of Criminal Appeal. Upon the report of this case, assuming the guilt of the prisoner, I have no doubt that the sentence was perfectly proper. My hon. Friend must remember that the man concerned is one against whom there had been a large number of convictions.

Assistant Mines Inspectors

asked how many assistant mines inspectors have been appointed; how many are still to be appointed; and when they will be appointed?

The examinations in the different districts to fill the first batch of thirteen sub-inspectorships of mines will be held on 9th January. As soon as the results of these examinations are known, the appointments will be made, and steps will then be taken to consider applications and arrange for the examinations for the second batch of nine sub-inspectorships.

Is it the intention of the Government to appoint an adviser acquainted with mines?

Yes, Sir. The announcement has already been made that it is the intention to appoint an adviser especially acquainted with mining.

Rosyth Dockyard (Fatal Accidents)

asked the First Lord of the Admiralty whether his attention has been drawn to the death of a workman named A. Sandiars, as the result of an accident on the new dock works, Rosyth, on Friday night, 1st December; whether he can say how long a time elapsed between the accident and the arrival of medcial assistance; how far the injured man had to be conveyed to his home or hospital, and the kind of conveyance used; whether any report has been received as to the causes of the injuries; and, if so, will he state them?

A fatal accident occurred on 1st December at Rosyth. Thirty-five minutes elapsed between the accident and arrival of medical assistance. The injured man was conveyed three miles to the hospital in a motor car. An inquiry will be held by the Procurator Fiscal in accordance with the provisions of Scotch law. Any representation from that Court will be carefully considered by the Admiralty.

Does the hon. Gentleman, think that for a man injured internally in the way this man was, that a motor car for a three-miles' journey is the proper means of transit?

Will the hon. Gentleman give the House a Return of the serious and fatal accidents that have occurred at Rosyth, and will he say whether there is an attempt at Rosyth now to introduce Sunday labour?

I do not think there would be any objection to give a Return of the fatal accidents; however, they have been very few up to now.

Should not that question be addressed to the right hon. Gentleman the Under-Secretary of State for War?

Will the right hon. Gentleman reconsider the whole question of the hospital arrangements at Rosyth?

I beg the hon. Gentleman's pardon; the hospital accommodation at Rosyth and the arrangements there are very satisfactory.

Will there be any inquiry by the sheriff in the case of fatal accidents?

I believe it is in accordance with the Scotch law that inquiries should be held, and so I stated in my answer.

May I ask whether two medical practitioners are appointed, one by the Admiralty and the other by the directors?

Coal (Royal Navy)

had the following question on the Paper: To ask the First Lord of the Admiralty if he will state how many tons of coal for naval purposes were sent out from this country in the months of June to November, 1911, inclusive, and in the corresponding months of the three previous years?

With regard to this question on the Paper, the hon. Member has already exhausted his right on this matter.

Mechanic Writers (Establishment)

asked whether a decision has yet been reached on the question of the establishment of mechanic writers employed since before April, 1907?

It has now been decided that the mechanic writers employed as such since before April, 1907, and subsequently placed on the establishment, retain their rights to pension.

Staffing Committee's Report

asked the First Lord of the Admiralty if he will say on what date the last communication was received from the Treasury in connection with the Staffing Committee's Report?

I must refer the hon. Member to the reply given to a similar question addressed by him to my right hon. Friend the Secretary to the Treasury on the 28th ultimo.

Clerical Staff, Royal Navy (Overtime)

asked what are the conditions governing the payment of overtime to the clerical staffs in His Majesty's Naval establishments; what extra attendance is expected from the present staffs before payment is made; and whether he will authorise payment in those departments in which overtime becomes necessary for prolonged periods in order to cope with the ordinary duties?

It is customary to pay writers below the grade of principal writer for time worked in excess of forty-eight hours a week in connection with the annual demands and the annual programme of dockyard work, and the revaluation of stock. Applications for the payment of overtime on other occasions are dealt with on their merits.

Commercial Subjects (Inspectorship)

asked the President of the Board of Education (1) whether any appointment has been made to the staff inspectorship in commercial subjects; what salary will be paid; whether any minute respecting the duties of this post has been approved and, if so, will it be published; and whether the duties of the inspector will have regard to elementary as well as higher education; (2) whether other staff inspectorships, in addition to a staff inspectorship in commercial subjects, have recently been established; if so, what salaries are attached to the posts; whether the persons appointed will combine regular inspection of a district with their special duties; and if appointments have been made?

It will be convenient to answer this and the next question together. Four staff inspectorships in the technological branch of the Board have recently been established. The annual salary is £800, rising by £50 a year to £900. Staff inspectors of engineering and agricultural subjects have already been appointed. A memorandum dealing with the duties of all inspectors of the technological branch has recently been issued for the information of officers of the Board; it seems hardly worth while publishing the memorandum. Each staff inspector will combine the regular inspec- tion of a small district with his special duties, and he may be required occasionally to deal with elementary and secondary schools, as well as with technical and evening schools.

In view of the objection that has been taken to previous instructions of inspectors, will the right hon. Gentleman allow me to see a copy of these instructions?

Foreign Affairs (Adjourned Debate)

I desire to submit to you, Mr. Speaker, a question on a matter of Order. At the conclusion of the first days' Debate on foreign affairs there were a considerable number of hon. Members who desired to speak upon matters which were raised by the Foreign Secretary in the course of his speeches, but in order to avoid inconvenience to the House by prolonging the Sitting the offer of the Government to give a further day to the discussion was accepted on the understanding that the Debate on the second day would be as unrestricted as on the first day. I understand, Mr. Speaker, you ruled on the first day that Amendments were interpreted as unduly limiting discussion, and I desire to ask whether that arrangement will hold good on the second day's Debate?

I think there are a considerable number of Members anxious to take part in the Debate on the general question, and, in my judgment, it would be undesirable to limit or confine the discussion on a particular Amendment. Of course, if the general discussion was exhausted in a reasonable lime, there would be an opportunity then for hon. Members to move Amendments, but, so far as my knowledge goes, I understand there are still a considerable number of Members on both sides who desire to take part in this discussion.

Am I to understand, Mr. Speaker, that there is no intention to limit the general right of hon. Members to move Amendments?

It is rather the other way. It is the hon. Member who moves an Amendment that limits the general right of Members. I do not wish to limit the rights of hon. Members either way.

Is it not an old privilege of hon. Members to move an Amendment to any Motion that is brought forward?

Certainly, I should look with some fear on any hon. Member who rose if I had reason to suppose that he was going to conclude his speech by moving an Amendment. My eye would probably wander in another direction.

Is it not a fact that if due notice were given it is quite in your hands, and if you do not take an hon. Member's Amendment it would not be moved?

Small Arms Ammunition

I beg to ask the Under-Secretary for War what was the amount of small arms ammunition expended by the British troops in the South African war, and what was the quantity expended by the Japanese in the Russo-Japanese war, and what was the duration of each war respectively—i.e., from declaration of war to cessation of hostilities?

I could not possibly answer this question without longer notice. I shall be glad to give the Noble Lord the figures if he calls at the War Office.

Messrs Cammell Laird's Employés

I beg to ask the Home Secretary a question of which I have given him private notice: Whether he was correctly informed in stating, in reply to a supplementary question yesterday, that the number of employés in Messrs. Cammell Laird's yards was about 2,500; and, if so, will he now state the correct number?

Through the courtesy of the hon. Member, I received a telegram from the firm, in which they state that the number of their employés is 7,500. The figure given to me was, as I told the House yesterday, 2,500. I am very glad to hear from the hon. Member the true figures should be 7,500, which renders the proportion of accidents, not as stated by my hon. Friend below the Gangway—one in two each year—but something more like one in fifteen each year.

Having regard to the fact that the inspector did not know the number of employés, are we quite sure we have now got the proper number of accidents.

Oh, yes. It was not the duty of the inspector to inform us of the number of employés. The figures were obtained through the office.

Does the right hon. Gentleman believe that those 7,000 employés are the whole of the employés of Messrs. Cammell Lairds' yards, and whether the accidents are only shipyard accidents?

I cannot say any more on this question without notice. I have given the figures as they were supplied to me.

Seat Of Government, India

Removal From Calcutta To Delhi

I beg leave to inform the House at the earliest possible moment that the King-Emperor this morning made the following announcement at the Durbar:—

We are pleased to announce to Our People that on the advice of Our Ministers tendered after consultation with Our Governor-General in Council, We have decided upon the transfer of the seat of the Government of India from Calcutta to the ancient Capital Delhi, and, simultaneously and as a consequence of that transfer, the creation at as early a date as possible of a Governorship for the Presidency of Bengal, of a new Lieutenant-Governorship in Council administering the areas of Behar, Chota Nagpur and Orissa, and of a Chief Commissionership of Assam, with such administrative changes and redistribution of boundaries as Our Governor-General in Council with the approval of Our Secretary of State for India in Council may in due course determine. It is Our earnest desire that these changes may conduce to the better administration of India and the greater prosperity and happiness of Our beloved People.
I may add that the official correspondence between the Secretary of State in Council and the Governor-General in Council together with the text of this announcement, and an announcement of other boons by the Governor-General has been printed as a Parliamentary Paper, which will be available at the Vote Office to-day.

It is obvious to the House that the statement which the right hon. Gentleman has just made announces changes of the utmost gravity to the Government of India. At this moment I only wish to make one comment. I am sure the right hon. Gentleman will be the first to recognise that this is a subject which ought to be discussed in this House. I am doubtful, however, whether it would be to the public advantage to discuss it now. I say this, not because we are at the fag-end of the Session, but because His Majesty is in India, and I am inclined to think that it would be very undesirable for any discussion to take place here which might even be critical in regard to something which has just been done in the person of His Majesty himself. I have not had time to consult my colleagues, and I am sure if, after consultation with them, we think the time ought to be given for a discussion, probably the right hon. Gentleman will be prepared to consider our request.

Certainly. This is a matter of so much gravity that obviously it must be subject to Parliamentary discussion. I share the view which the right hon. Gentleman has expressed that it would not be desirable that discussion should take place at the present moment until hon. Members have had ample opportunity of seeing the documents and considering all the arguments there set out, and more particularly while His Majesty the King is absent.

Finance Bill

As Amended, considered.

I beg to move, that the following new Clause be read a second time:—

Provision For Enabling The Post Office To Exercise Powers In Relation To Stamps, Etc

His Majesty may by Order in Council provide that any powers and duties of the Commissioners of Inland Revenue, whether statutory or otherwise, with reference to any stamps used to denote duties of postage, or any stamps used to denote other duties, being either adhesive stamps or stamps which are usually sold or distributed at a post office, or with reference to any postal orders, licences, or forms usually so sold or distributed, shall be exercised and performed by the Postmaster-General, either to the exclusion of the Commissioners of Inland Revenue or concurrently with those Commissioners, and any such Order shall have effect as if enacted in this Act.

Such provisions may be made by the Order as appear necessary or expedient to give full effect to the exercise and performance of the powers and duties to which the Order relates in manner provided by the Order.

This is merely a matter of departmental procedure enabling the Post Office to exercise powers in relation to stamps.

Question put, and agreed to.

Question, "That the Clause be added to the Bill," put, and agreed to.

I beg to move, that the following new Clause be read a second time:—

To Extend Allowances In Respect Of The Duty On Motor Spirits To Veterinary Surgeons

(1) As from the passing of this Act, Part I. (4) of the Fifth Schedule to the principal Act shall be read as though the words "or veterinary surgeon" were inserted therein after the words "medical practitioner," and Part I. of the said Schedule and Section eighty-five of the principal Act shall be construed and have effect accordingly.

(2) Nothing contained in this Section shall operate to entitle any person to the allowance or repayment of any duty under the principal Act in respect of motor spirit used prior to the date of the passing of this Act.

As from the passing of this Act, Section eighty-six, Sub-section (4), of the principal Act shall be read as though the words "or veterinary surgeon" were inserted therein after the words "medical practitioner."

The object of this Clause is to give duly qualified veterinary surgeons the same privileges and allowances which are now allowed to members of the medical pro- fession under the Finance Act of 1910. Under Section 85 and Section 86, duly qualified members of the medical profession get an allowance to the extent of half the duty they pay upon a licence for their motor-cars, and also an allowance on the duty they pay on motor spirit so long as it is proved to the satisfaction of the authorities that it has been used for a motor-car in connection with their profession. I hope that this Clause will meet with approval in all parts of the House. It cannot be said that in any sense of the word this is a party matter. As far as I know I cannot see any reason for a distinction being drawn between veterinary surgeons and members of the medical profession. Nearly all the members of the Royal College of Veterinary Surgeons are interested in this matter. Before a man can become a member of that college he has to undergo a severe eaxmination. He has to pass a preliminary examination in Latin, English, and other subjects, and he has to spend no less than four years in studying before he can get his diploma.

4.0 P.M.

I will read to the House some of the matters upon which he has to be examined, and then hon. Members will recognise what a serious examination it is. They are examined in biology, physiology, anatomy, chemistry, physics, pathology, bacteriology, and nearly all the other 'ologies there are, and they have, of course, to be competent in the principles and practice of veterinary medicine and surgery. It takes them four years' hard work. They have to pass four examinations, and they have to spend a very considerable sum of money before they can get their diploma. Therefore, I think it is pretty obvious they do become duly qualified people to undertake the duties of their profession. Apart from those who still hold certificates from the Highland and Agricultural Society of Scotland and those who had been practising for five years before the passing of the Act of 1881, the veterinary surgeons are all members of the Royal College of Veterinary Surgeons, and there are 289 Fellows and 3,134 members. I think everybody will agree this profession is a noble one. The members of it spend their lives in mitigating the sufferings and curing the sicknesses of dumb animals, and the service they render to the State is by no means inconsiderable, because of the services they render to agriculture and those interested in it. Everyone will agree the life of the veterinary surgeon is an especially hard and strenuous one, particularly in the country districts. He has to go great distances in order to attend to the cases for which he is required. He has to go out at all times of the day, irrespective of the weather and irrespective of his own state of health. Everyone will also agree the remunerations which they receive is by no means excessive. In many cases in the country districts the veterinary surgeons are not very much more than making both ends meet.

The advent of the motor car has been a very serious thing to veterinary surgeons, because they have lost their best paying clients. The country gentleman who used to keep three, and even more horses, has now ceased to keep horses, and is keeping motor cars instead, and therefore the services of the veterinary surgeon are no longer required. He has to go greater distances. He has to make up his living by going further afield and extending his area of operations, and, just as the motor car has reduced his income, so it has become absolutely necessary to him in carrying out the duties of his profession. The loss to the State, if these allowances are made, can be very small indeed, because I do not suppose motor cars will be used by all veterinary surgeons, though they will, I hope, be used by a considerable number. The loss to the Treasury must be infinitesimal as compared with the advantages given to the individual members of the profession, and I do hope the allowances which I propose, which can do no real harm, and which will be of great advantage to the individual members of the profession, who spend their lives in pursuing a noble object, will meet with support from all quarters of the House.

I beg to second the Motion. I should like to do it not merely from the point of view of the practitioner himself, or even from the point of view of the stock-owner in whose services he is working, but from the point of view of the State. I do not think it would be any loss of tax to the State, because it would be a direct inducement to veterinary surgeons who do not keep motor cars to do so in the future. There is nothing which restricts their inclination to keep motor cars more than the somewhat high tax they have to pay if they do so. There is another point of view, from which the public will undoubtedly benefit. A very large number of these serious cases of anthrax, foot-and-mouth disease, and other virulent stock diseases for which the public has to pay a large bill every year, would be prevented from spreading in certain districts if the veterinary surgeon could act promptly and be on the scene of the disease as soon as it broke out. There are many diseases, from the stock-owner's point of view, which it is really not worth attending to at all unless they are attended to promptly. Perhaps the most ordinary disease in dairy farming is milk fever. If it is attended to at once, it is an easily curable disease, but, if it is not attended to for several hours, it is almost inevitably fatal. This is only one of many illustrations of the necessity of stock-owners having the prompt attention of competent veterinary surgeons in order to effect a cure of the contagious diseases of animals.

I desire to support this new Clause as a representative of an agricultural district in which a considerable number of veterinary surgeons reside and carry on their profession. I can assure the Government there is considerable hardship under existing conditions, and, as this tax was primarily imposed as a tax on luxuries and not on necessities, I think it would be only just that the same assistance which has been given to members of the medical profession should also be extended to veterinary surgeons in carrying on their work. In the course of their profession veterinary surgeons have to do an enormous amount of travelling. I had a letter from a very well-known veterinary surgeon only a day or so ago, in which he told me he had actually travelled in his motor car about 22,000 miles in one year, and his petrol bill amounted last year to no less than £65. This is a profession which, unfortunately, is not very well paid, and it is also a profession which, with the increasing attention which is rightly given to health matters, is becoming more and more a public one. After all, the veterinary surgeon in London is the inspector of meat, and in the country districts he has to do a vast amount of work inspecting cowsheds and other things, often a long distance from the place where he lives; and if this new Milk Bill which we are promised comes in there is no question whatever his work will be largely extended. It is, as the hon. Member has pointed out, absolutely essential, if these serious diseases of which we have, unfortunately, had an example in Somerset during the last month or so, are to be properly coped with, that the veterinary surgeon should be on the spot at the earliest possible opportunity. I do hope the Government may accept this new Clause, because I think veterinary surgeons are an exceedingly deserving class of professional men. They are not highly paid; their clients in a number of cases are poor people, and the tendency is more and more in the direction of making them public officials. I therefore think they are entitled to the consideration suggested by the Clause proposed by my hon. Friend.

I should like to say a few words in support of this Clause. At present there is a very distinct grievance among veterinary surgeons, because they feel they ought to have the same measure of tolerance as the doctors. The doctors have certain advantages, and the veterinary surgeons feel they might be placed in the same position. It must be borne in mind it is only when a motor is kept by a duly qualified practitioner and while it is being used by him for the purposes of his profession that we demand this concession. It would probably encourage veterinary surgeons to use motor cars, and they will help them to get to the scene of action rapidly, and consequently alleviate pain; and that ought to be the object of every Member of this House. It would cost the Government very little, it would add to the usefulness of these excellent men, and I strongly urge the Government to accept the Amendment without further discussion.

The Chancellor of the Exchequer will remember a similar Motion was made on the Budget, and it was received with sympathy in all quarters. The right hon. Gentleman at that time told us he was afraid if he once allowed any exceptions he would be smothered with them, and the benefit of his tax would be lost to the Exchequer. I would ask him now whether he really has received any other requests for exemptions except for these veterinary surgeons. We have put down no other Amendments to include any other body beyond these deserving people, and I would urge upon him whether, if he has not received the floods of requests he anticipated, he could not grant this small concession.

Of course, although this is a new Clause, it is a very old question. The question was raised on the Finance Bill of 1909–10, and it has been raised since, certainly on one if not on more occasions. The answer is really that these exemptions open the door to very large demands, and there is no particular reason why we should extend the exception from doctors who minister to the needs of humanity to veterinary surgeons, which would not apply to other cases, and we should have a list of exemptions which would be very serious. All these suggestions have something to be said for them, but in the mass they would make very serious inroads upon the revenue, and I regret we are unable to accept this suggestion.

I must express my regret at the decision of the Government. I have somehow got an impression, obviously ill-founded, this was one of the Clauses they were prepared to accept to-day. I do not suggest the Government misled me in any way, but it was rumoured they would give way on this point. I really think there is force in what was said by my hon. Friend who spoke last on this side. I quite understand the Chancellor of the Exchequer, bringing in a tax for the first time, is confronted by every kind of claim for an exemption, and he is extremely reluctant to admit any exceptions, but, when the tax has been in force for some time, things settle down, and the claims, as it were, sort themselves. This is the one claim of all that were made which has survived, and will continue to survive, and I think it differs from any others that could be made, whilst it does

Division No. 443.]

AYES.

[4.20 p.m.

Aitken, Sir William MaxGoulding, E. A.Pease, Herbert Pike (Darlington)
Amery, L. C. M. S.Greene, Walter RaymondPeel, Hon. W. R. W. (Taunton)
Anstruther-Gray, Major WilliamGretton, JohnPole-Carew, Sir R.
Ashley, Wilfrid W.Gwynne, R. S. (Sussex, Eastbourne)Pretyman, Ernest George
Baird, John LawrenceHamersley, Alfred St. GeorgePryce-Jones, Colonel E.
Baldwin, StanleyHamilton, Lord C. J. (Kensington, S.)Rawson, Col. R. H.
Banbury, Sir Frederick GeorgeHardie, J. Keir (Merthyr Tydvil)Roberts, S. (Sheffield, Ecclesall)
Barnes, George N.Helmsley, ViscountSamuel, Sir Harry (Norwood)
Benn, Ion Hamilton (Greenwich)Herbert, Hon. A. (Somerset, S.)Sandys, G. J.
Bentinck, Lord H. Cavendish-Hills, John WallerScott, Sir S. (Marylebone, W.)
Beresford, Lord CharlesHoare, S. J. G.Smith, Rt. Hn. F. E. (L'pool, Walton)
Bigland, AlfredHope, Harry (Bute)Smith, Harold (Warrington)
Bowerman, Charles W.Hume-Williams, W. E.Stanier, Beville
Boyton, JamesIngleby, HolcombeStarkey, John Ralph
Bridgeman, William CliveJardine, Ernest (Somerset, East)Staveley-Hill, Henry
Burn, Colonel, C. R.Kerry, Earl ofStewart, Gershom
Campion, W. R.Knight, Capt. E. A.Sykes, Mark (Hull, Central)
Carlile, Sir Edward HildredLaw, Rt. Hon. A. Bonar (Bootle)Talbot, Lord Edmund
Cassel, FelixLawson, Hon. H. (T. H'mts., Mile Ed)Thompson, Robert (Belfast, North)
Castlereagh, ViscountLewisham, ViscountTryon, Captain George Clement
Chaloner, Col. R. G. W.Locker-Lampson, G. (Salisbury)Tullibardine, Marquess of
Chamberlain, Rt. Hon. J. A. (Worc'r.)Locker-Lampson, O. (Ramsey)Valentia, Viscount
Craig, Captain James (Down, E.)Lockwood, Rt. Hon. Lt.-Col. A. R.White, Major G. D. (Lancs., Southport)
Craig, Norman (Kent, Thanet)Lyttelton, Rt. Hn. A. (St. Geo., Han. S.)Williams, Col. R. (Dorset, W.)
Craik, Sir HenryLyttelton, Hon. J. C. (Droitwich)Worthington-Evans, L.
Croft, H. P.Magnus, Sir PhilipYate, Col. C. E.
Du Cros, Arthur PhilipMorrison-Bell, Capt. E. F. (Ashburton)Younger, Sir George
Eyres-Monsell, B. M.Newdegate, F. A.
Falles, Bertram GodfrayNewman, John R. P.

TELLERS FOR THE AYES.—Mr. Sanderson and Mr. C. Bathurst

Fell, ArthurNicholson, William G. (Petersfield)
Forster, Henry WilliamOrde-Powlett, Hon. W. G. A.

does not differ from one of the exemptions which is made already, namely, the exemption of the medical man. I think my hon. Friend who seconded the new Clause put the proposal on true grounds. This is not one of the cases where our sympathies are specially called for for the individual, but it is in the public interest that we ask that this exemption should be made. I am one of those who think the interests of humanity infinitely superior to the interests of the lower animal creation. But interests may be comparable and the occasions for their exercise are of the same kind. The conditions which govern them are of the same nature, there is the same need for haste and skill and the same long distance to travel. In the case of a veterinary surgeon, a very large proportion of whose business lies in country districts, long distances are normal, and, unless they avail themselves of this mode of traction, they are unable to cover the same radius of country or to arrive in the same space of time, and this not only involves suffering to animals but great loss to one of the primary industries of the country. It is really on the ground that public interest is involved in the interests of that great industry that I support and shall vote for the Clause of my hon. Friend.

Question put, "That the Clause be read a second time."

The House divided: Ayes, 89; Noes, 165.

NOES.

Abraham, William (Dublin Harbour)Harcourt, Rt. Hon. L. (Rossendale)O'Grady, James
Acland, Francis DykeHarmsworth, R. L. (Caithness-shire)Palmer, Godfrey Mark
Adamson, WilliamHavelock-Allan, Sir HenryParker, James (Halifax)
Agar-Robartes, Hon. T. C. R.Haworth, Sir Arthur A.Pearce, Robert (Staffs, Leeks)
Ainsworth, John StirlingHayden, John PatrickPearce, William (Limehouse)
Asquith, Rt. Hon. Herbert HenryHenderson, Arthur (Durham)Ponsonby, Arthur A. W. H.
Baker, Harold T. (Accrington)Henderson, J. M. (Aberdeen, W.)Power, Patrick Joseph
Baker, Joseph A. (Finsbury, E.)Henry, Sir CharlesPriestley, Sir W. E. B. (Bradford, E.)
Barton, WilliamHodge, JohnPrimrose, Hon. Neil James
Beauchamp, Sir EdwardHolt, Richard DurningRaffan, Peter Wilson
Benn, W. W. (T. H'mts, St. George)Hope, John Deans (Haddington)Raphael, Sir Herbert H.
Bentham, George JacksonHorne, C. Silvester (Ipswich)Rea, Walter Russell (Scarborough)
Birrell, Rt. Hon. AugustineHughes, Spencer LeighReddy, Michael
Black, Arthur W.Illingworth, Percy H.Redmond, John E. (Waterford)
Boland, John PiusIsaacs, Rt. Hon. Sir RufusRendall, Athelstan
Brady, Patrick JosephJones, Sir D. Brynmor (Swansea)Richardson, Thomas (Whitehaven)
Burns, Rt. Hon. JohnJones, Henry Haydn (Merioneth)Roberts, Charles H. (Lincoln)
Burt, Rt. Hon. ThomasJones, Leif Stratten (Notts, RushcliffeRobertson, Sir G. Scott (Bradford)
Buxton, Noel (Norfolk, North)Jones, William (Carnarvonshire)Roch, Walter F. (Pembroke)
Byles, Sir William PollardJowett, Frederick WilliamRoe, Sir Thomas
Carr-Gomm, H. W.Keating, MatthewRose, Sir Charles Day
Cawley, Sir Frederick (Prestwich)Kellaway, Frederick GeorgeRowlands, James
Chancellor, Henry GeorgeKennedy, Vincent PaulRowntree, Arnold
Chapple, Dr. William AllenKing, J. (Somerset, N.)Runciman, Rt. Hon. Walter
Clough, WilliamLawson, Sir W. (Cumb'rld, Cockerm'th)Samuel, Rt. Hon. H. L. (Cleveland)
Clynes, John R.Levy, Sir MauriceScanlan, Thomas
Collins, Stephen (Lambeth)Lewis, John HerbertScott, A. MacCallum (Glas., Bridgeton)
Condon, Thomas JosephLough, Rt. Hon. ThomasSeely, Colonel Rt. Hon. J. E. B.
Cornwall, Sir Edwin A.Lundon, ThomasSmith, Albert (Lancs., Clitheroe)
Cory, Sir Clifford JohnLynch, A. A.Soames, Arthur Wellesley
Cotton, William FrancisMacdonald, J. Ramsay (Leicester)Spicer, Sir Albert
Crawshay-William, EliotMacdonald, J. M. (Falkirk Burghs)Strauss, Edward A. (Southwark, West)
Crooks, WilliamMacpherson, James IanTaylor, John W. (Durham)
Crumley, PatrickM'Callum, John M.Thorne, G. R. (Wolverhampton)
Davies, Ellis William (Eifion)McKenna, Rt. Hon. ReginaldThorne, William (West Ham)
Davies, Timothy (Lincs., Louth)M'Laren, Hon. F. W. S. (Lincs., Spalding)Toulmin, Sir George
Doris, WilliamM'Micking, Major GilbertTrevelyan, Charles Philips
Duncan, C. (Barrow-in-Furness)Marshall, Arthur HaroldUre, Rt. Hon. Alexander
Edwards, Enoch (Hanley)Masterman, C. F. G.Ward, John (Stoke-upon-Trent)
Edwards, Sir Francis (Radnor)Meehan, Francis E. (Leitrim, N.)Ward, W. Dudley (Southampton)
Edwards, John Hugh (Glamorgan, Mid)Meehan, Patrick A. (Queens County)Wason, Rt. Hon. E. (Clackmannan)
Elibank, Rt. Hon. Master ofMenzies, Sir WalterWason, J. Cathcart (Orkney)
Essex, Richard WalterMolteno, Percy AlportWatt, Henry A.
Esslemont, George BirnieMontagu, Hon. E. S.Wedgwood, Josiah C.
Falconer, JamesMooney, John J.White, J. Dundas (Glasgow, Tradeston)
Ffrench, PeterMorton, Alpheus CleophasWhitehouse, John Howard
France, G. A.Munro, RobertWiles, Thomas
Gelder, Sir William AlfredMurray, Capt. Hon. A. C.Williams, Penry (Middlesbrough)
George, Rt. Hon. D. LloydNannetti, Joseph P.Wilson, Hon. G. G. (Hull, W.)
Gill, Alfred HenryNeedham, Christopher T.Wilson, W. T. (Westhoughton)
Gladstone, W. G. C.Nicholson, Charles N. (Doncaster)Winfrey, Richard
Goddard, Sir Daniel FordNolan, JosephWood, Rt. Hon. T. McKinnon (Glasgow)
Greig, Colonel J. W.Norton, Capt. Cecil W.Yoxall, Sir James Henry
Guest, Hon. Frederick E. (Dorset, E.)O'Brien, Patrick (Kilkenny)
Hackett, JohnO'Doherty, Philip

TELLERS FOR THE NOES.—Mr. Gulland and Mr. Geoffrey Howard.

Hancock, John GeorgeO'Dowd, John

Extension Of Time For Objection To Provisional Valuation

It is hereby declared that, for the purposes of Section twenty-seven, Sub-section (2), of the Finance (1009–10) Act, 1910, the words "the first claim for Increment Value Duty or Undeveloped Land Duty" shall be inserted in place of the words "the copy of the provisional valuation," and this Section shall be amended accordingly.

Before moving this new Clause I feel I must express my personal regret, which I am sure is shared by everyone who takes an interest in this question, that the learned Solicitor-General is too unwell to be here to-night. Both sides have profited by his knowledge and his courtesy. From the point of view of hon. Gentlemen opposite, I am sure they will agree with me that we are conducting this Debate under circumstances of very great difficulty. These new Clauses are being taken on the Report stage, but it is really a continuation of the Committee stage, and the position we are in is this, that Clauses of a very difficult character, dealing with subjects which require a good many questions and answers across the floor of the House, and which are essentially matters for Committee stage, are, owing to circumstances with which every Member of the House is well aware, remitted to the Report stage where they can only be debated under limitations which do not make for efficient discussion. We, on this side of the House, have serious reason to complain of the manner in which the Finance Bill has been put back until a week before Christmas. I think I shall be within the rules of order in saying that the excuse of the Government, that the Bill contains little or no new matter, does not hold good. It must be recognised, seeing the number of new Clauses on the Paper, that the Finance Bill of the year is the only opportunity for the House itself to review the financial system of the country. This is our only opportunity, and it is confined to new Clauses, Amendments to the Bill itself being necessarily restricted to new proposals made by the Government, or to proposals of long standing. So far as the finance of the year is concerned, the House of Commons is in the position that it can only criticise or make any new proposals in the form of new Clauses, and we are now confined to one evening for the Report stage. I think that is a most regrettable position, which ought not to be repeated. Some hon. Members opposite cheer that; will they support it by going into the Lobby? That is the only course by which apparently the Government may be diverted from a procedure not adopted for the first time, but really the last stage of a long course of financial decadence, and treating control of the House of Commons over finance with absolute contempt.

This Amendment deals with the question of the method of valuing property for Increment Value Duty and Undeveloped Land Duty. The present position is that a provisional valuation is served on the owner of the property, and within sixty days of that being served he is entitled to object to the figures of the total value and site value but not to the gross value or full site value. If he does not object to that within sixty days the figures become absolute and cannot be altered, amended, or repealed. That is indicated by Section (33a), which enacts that

An appeal shall not lie against a provisional valuation made by the Commissioners of the total or site value of any land except on the part of a person who has made an objection to the provisional valuation in accordance with this Act.

That is to say within sixty days. That matter is, therefore, perfectly clear. What I want to put to the House is this: What is the position of an owner of small house property under the Act as it now stands? He receives his provisional valuation, and

upon it he sees certain figures, one a figure of site value, the other a figure of total value. These terms are Greek to him; he does not understand them. There is no demand made from him at all. All that he receives is a yellow piece of paper containing the statement on it that the total value of his propery is a certain figure, and that the site value is another figure. He is not asked to take any action upon it. Naturally the ordinary attitude of a small owner, who has no comprehension whatever of the mysteries of the Finance Act, is that he simply does nothing. In, I believe, a large majority of the cases in which owners of small property have been served with this valuation, they take no action whatever upon it.

Let us go another step in knowledge. Let us suppose that some of these gentlemen are followers of the Land Tax gospel. They have heard that gospel perpetually preached, and they have also read and heard of it being enunciated over and over again by the Chancellor of the Exchequer in the Debates of 1909, that this tax is levied on the site value only; that is, upon the bare value of land and on any increase which takes place in that value. An owner of small property, having that in mind, would look mainly to the figure fixed upon his site value, and if, in his opinion, the site value approximates the value of the land on which his house stands, he would not consider it was necessary for him to take professional advice or to object to it. He would not consider that the figure of the total value being considerably below what he considered to be the selling value of his property would have any effect upon the tax he would ultimately have to pay, particularly having regard to the fact that all the taxes within his knowledge have always been levied directly upon the assessment, and he has always been accustomed to know that a low assessment means a low tax. His natural desire would be to confine his objection to the site value, and he would raise no question upon the total value. What is the next step? It is that he sells the property. I am assuming that the property has been undervalued. That is the normal position. I am not stating an accidental but a normal case. The original site value is usually fixed by a process which is not enjoined by the Act, but a process which the valuers have adopted. They say we consider the value of the land on which the house stands is £50. They may be approximately right. That is what they do. That means that the normal site value is not very far out, although in some cases it may not be normal. But with regard to the total value—I do not wish to throw stones at anybody—I say there is systematic under-valuation. It is occurring everywhere, especially in regard to small house property. The cases are to be numbered by tens of thousands all over the country.

Then comes an occasion, and the properly is sold at what, for the moment, I am entitled to call its real value, the value which it cost the owner to either build or purchase, and something about what he considers it to be worth. It is sold at a figure considerably higher than the total value fixed by the provisional valuation. What happens then? Another process is brought into play, and a totally new kind of calculation or valuation is made based upon the purchase price. A comparison is made between the original site value, fixed by the process I have just described, and the site value on the occasion, which is derived by an arithmetical process from the price on the occasion. The practical effect of it is that the whole difference between original total value and the total value on the occasion is debited to site or credited to site and treated as assessable site value; and the whole difference, minus 10 per cent., is liable to a 20 per cent. Increment Value Duty. Let us see for a moment how this new Clause bears upon it, and the position the owner is in. By the lapse of these sixty days he has got what I am entitled to assume is, and which certainly is the fact in innumerable cases, a fictitious total value placed upon his property. By the lapse of these sixty days that fictitious value has become a statutory value, absolutely unalterable by any process of law or of appeal. That is to be compared on the occasion with a figure which is a real figure, derived from the actual sale of the property; that is unquestionable because there is the fact that the property has been sold at a certain figure which the owner cannot dispute, which he is not in a position, nor does he desire to dispute. He only realises the necessity for disputing the matter when he finds the original figure of the total value which has been fixed upon him by the lapse of the sixty days by, you may say, his own laches, ignorance or carelessness. I say you fix upon him a liability under an Act of Parliament which he cannot understand, and which he ought to have a fair and reason- able opportunity of objecting to when his attention is called to it.

What the Clause says is, that instead of this provisional valuation being fixed for all time against the owner by the mere lapse of sixty days from the date of its service, it shall not be fixed until there has been an occasion. The advantage of that is this, that it will be fixed at a time when a claim has been made upon him for Increment Value Duty. Then you will really make the process more workable, and for the first time you will have an opportunity for comparison between the theoretical value fixed by the valuation and the actual price fetched in the open market by the property. You cannot test it otherwise, because the fictitious value placed upon the property by the provisional valuation, a month, a year, or two or three years before, is fixed as a statutory figure by the lapse of sixty days. There is nothing like chapter and verse to show how these cases occur in actual practice. There is one case in point which I need not deal with at length, but I must mention it because it is the most complete illustration. It is the far-famed Richmond case. That is an illustration up to the very limit. The actual process proposed in this Clause of mine had to be taken in the Richmond case. What happened there was that a valuation was fixed upon the property, the sixty days were allowed to elapse. That value was obviously an undervaluation. Then came the sale at the true value. You then got two fixed figures, that of the under-valuation, fixed by the lapse of sixty days, and the higher figure, fixed by the fact of sale. You had the comparison between the two, and then you got to the impasse. What happened in that case, and what did the Government do? Their first action when the matter was put to them by the sufferers was to refuse to do anything. When the matter was put to the highest authority, the Commissioners of Inland Revenue, by the solicitors for the party, there was no redress. The matter was debated in this House, and the Government were forced to take action. What action did they take? The action which this new Clause suggests is proper in all such cases. They allowed the question of sixty days after the real value had been found by the actual sale. What was the answer the Government gave on that matter? That it was an isolated case. As a matter of fact they come into the Land Union in shoals.

I will take the most recent case, that was only handed to me yesterday. It was also in Yorkshire. A lady purchased two small properties in 1892 for £550. She died in 1911 and the property was sold on the 31st July, 1911, by auction. It realised £1,065 and Estate Duty was actually paid on that sum of £1,065. On the 2nd November the district valuer made and served a provisional valuation, showing a gross value of £765 and a site value of £30. He then calculated the sum exactly as I have described, taking the purchase price of £1,065, and deducting £735, and he brings out the site value on the occasion at £330. That is in a village or a small town in Yorkshire, where there has obviously been in the two years from April, 1909, no general increase in the value of the site. Here you have the site value of a small house fixed as on the 30th April, 1909, at £30, and in July, 1911, it is multiplied by eleven and fixed at £330. That is what happens to the small owner, and that is the vice of this matter. The small owner can be bullied and taxed, and money can be extorted from him. I speak strongly on this matter because that is what is being done. What makes me more indignant is what I see happens to people who can defend themselves. There is a certain gentleman who is a property owner in this country who has made it his business to make a close study of this Act. The valuers know that, and they are not in a hurry to cross swords with him. He to-day gave me certain information. I am prepared to give his name if required to the right hon. Gentleman, but for obvious reasons I cannot give his name now. This is what happens to a big owner who can defend himself and who has professional advice. About the time of the passing of the Act this gentleman bought four plots of bare land, for each of which he paid £181. He sold them recently, plot by plot, for £220 each, making a pront on each plot of £40. The valuer does not want to cross swords with this gentleman, and he has served a provisional valuation on him of £220 for each plot, so that there is no tax payable. The valuation, in the case of the poor woman in Yorkshire who makes no profit, is raised from £30 to £350, and there is £279 of taxable increment. Something like £60 is extorted from her. The big owner makes an actual profit of £40 on each plot, and it is wiped out, and there is not a penny charge made on him at all. That is the way this Act is being administered.

There is no other means except this Amendment by which the Act can be made workable. You have two different processes, under different conditions, of arriving at figures which are to be compared for the purpose of levying the tax. Taking the value of the land without the house on it, and getting that figure statutorily fixed, and then comparing it afterwards with another figure arrived at by a different process, the sale value of the land, and calling that site value is not a method of taxation at all. It is simply a method of serving on owners of small house property a piece of paper bearing certain mystical, cabalistic figures which no human being can understand. I know of no valuer who can describe by what process these two values are obtained under the Act. There are innumerable cases ready to go to the Referees on points of this character. I complained the other day that these matters were not taken to the Referees, and I asked that cases of doubt should not be pressed against people from whom this tax was claimed, where these doubtful points arose, until they had been settled by the Referees or the Courts. The Secretary to the Treasury gave me the answer, straight across the floor of the House, that the Government intended to press these claims and to press their own interpretation of this Act upon the owners of house property and to demand the money from them even before the case was decided by the Referees or the Courts. That is not the method in which taxation should be administered. This is a grave indictment which I make, not on behalf of the large owner who can obtain professional advice. There has been very little got out of the large owners. There has been very little got out of the Act altogether.

There is the question of leaseholds, which is even worse than the case I have named. I will not go into it myself, but I hope someone else will deal with that question and show how the Amendment is absolutely necessary to enable a leaseholder charged with Increment Value Duty to have any opportunity of realising his position and of objecting within a reasonable time. There is also the most complicated and extraordinarily difficult question of substituted site values, which has been debated over and over again, and on which the assurances and promises of the Chancellor of the Exchequer, in his conference with the builders, have been contrasted with the procedure under the Act. It is obvious that these promises have not been fulfilled. Substituted site value is almost worthless. There again this Amendment would afford very great opportunity for a fair and reasonable valuation as between the owner and the Government. It is only a question of time before the Act will fall to pieces. Its administration is a farce and the Government are a laughing-stock. Surely it must be to their interest, if they wish the Act to stand at all, to try and bring it into some form in which it can, at any rate, have the appearance of being reasonably worked. The Amendment will have the effect of enabling the valuation, upon which Increment Value Duty and Unveloped Land Duty are to be based, to be a matter of real, fair argument, question and decision between the owner of the property, the Government, the Referees and the valuers concerned, whereas under the law as it stands now the Government and the owners on any point at issue go into Court with their hands absolutely tied, because fictitious figures are fixed by Statute which cannot possibly be sustained, and when the case is brought to this House the Government have to take the very course which this Amendment enjoins upon them. I accuse the Government and the Valuation Department of levying taxes upon poor owners of house property which this House had not imposed upon them. This Amendment will do something to remedy that grievance. We have very little opportunity for stating grievances in this House, especially financial grievances under special conditions. This is a real grievance, and I hope it will receive sympathetic treatment, and I think we have a right to demand that this process, which has been exposed over and over again, shall now cease.

The hon. Gentleman has travelled very far afield in his observations upon this Amendment. When the House comes to realise what the Amendment proposes it will be seen that his intention is, indeed, to destroy the object of the Act. It will have the effect of destroying altogether our datum line, the starting-point for the collection of this duty. If it were carried the consequence would be that all your valuation would be absolutely unworkable. There is no definite time given at all at which the valuation is to take effect and be fixed. The hon. Gentleman desires to take the sixty days which are to fix the time in the Act and to substitute for them the first occasion. It might be sixty years, it might even be one hundred years.

The first occasion is the occasion of either a death or a change of ownership. I hope the right hon. Gentleman will live one hundred years, but I cannot say I think he will.

It may be that one hundred years is taking too large a view of human life, notwithstanding the Insurance Bill, but sixty years is quite sufficient for the purpose. The object of the Amendment, as I understand it, is to postpone indefinitely this valuation and the collection of these duties on the first occasion. The hon. Gentleman wishes the first claim for Increment Value Duty or Undeveloped Land Duty to be inserted in place of the copy of the provisional valuation. The sixty days runs now from the copy of the provisional valuation being served. If the Amendment is carried the sixty days will run from the first claim for increment value or Undeveloped Land Duty. Then you would have no datum line at all at the time the first occasion arose.

You cannot fix the value until you come to the period of sixty days after the first copy of the valuation.

You may have, during this period of sixty years, land multiplying in value two, three, four, five or six times over, and what the hon. Gentleman desires to do is to postpone the operation of the Act indefinitely.

You prevent the valuation being a fixed and definite thing for a certain period. At present you can do it by taking sixty days from your copy of the provisional valuation having been served. If no objection is raised it is the fixed value, and the hon. Gentleman seems to destroy that altogether. Upon that the Act, and the whole scheme under the Act with reference to these duties, is based, and if we give effect to the Amendment we should undoubtedly be destroying the scheme as it passed this House. So far as I follow what he said, he gave no grounds for that except the objection, to which he has given utterance a good many times, to the whole scheme under the Act. Except for that I fail to see that he has given any reason why we should take out the sixty days.

You must have some definite time fixed from which your valuation is to date. How will the hon. Gentleman's proposal affect valuations? What was intended by the House when the Act was passed was that we should have the valuation as soon as possible. Under the Amendment it would be postponed indefinitely, and you would have an entirely different system. You might have the value of one parcel of land fixed in ten years' time, while the adjoining parcel of land might not be fixed for twenty or thirty years, and another parcel would not be fixed for sixty years. When the proposal comes to be understood, I think the alteration that the hon. Member desires to make would be grotesque in view of the scheme which has been passed. I cannot really think he means what his Amendment says, but, if he says he does, all I have to say in regard to it is that it is an absolutely impossible Amendment for us to accept, and the acceptance of it would have all the defects I have stated, which I have not exaggerated in the slightest degree; and, as far as valuation is concerned, it will make it quite indefinite when we shall be able to say we have a valuation of the land. Under these circumstances I cannot accept the Amendment.

5.0 P.M.

There is only one matter which the hon. and learned Gentleman has not thought worthy of consideration, and that is whether justice is done. That never entered into his head for a moment. Not a word did he say on that subject. He made two observations. He said it would upset the whole scheme of the Act as regards valuation, and that it would postpone the collection of taxation indefinitely. I interrupted him on the second point and asked "Why?" He did not answer my interruption. He dealt with the other subject. What is the delay in the collection of taxes involved in my hon. Friend's Amendment? No tax becomes due until there is an "occasion." On the occasion you may, under the law as it stands, appeal against the valuation. My hon. Friend says you ought to be able to appeal against the original valuation.

Yes, Sir, I understood the point which was made by the Attorney-General, and which I was endeavouring to answer, was that you would indefinitely delay the collection of taxes by this Amendment. I say that is not so. You cannot collect the tax until the valuation on the occasion is made, and if an appeal is taken you cannot collect it until the appeal is decided. An appeal against the original valuation could be decided as rapidly as the appeal against the new valuation on the occasion. There is no foundation for the statement of the Attorney-General that the collection of the tax would be delayed. His other point is that this Amendment would destroy the whole scheme of the Act. What was the scheme of the Act? It was a Finance Act to raise the revenue for that and succeeding years. The object was, I presume, to collect taxes. This Amendment will not interfere with the collection of taxes justly due. If you have an ulterior view, utterly unconnected with the collection of revenue from taxes immediately, that is another matter. If you want the valuation for some other purpose, which you can Act upon at once, I admit that my hon. Friend's Amendment would prevent you having that, but that is not the point of the Attorney-General, who is most enthusiastic about this tax. [An HON. MEMBER: "You want to kill the valuation."] Hon. Gentlemen opposite desire it for some other purpose. They do not care twopence for the taxes as they stand. They support the Government for some entirely different purpose. Yes, but that is not the line of the Government. It is not open to the Attorney-General to say that my hon. Friend's Amendment destroys the principle, or any leading principle, of the Finance Act of 1909–10. It may prevent some other Bill which hon. Gentlemen below the Gangway opposite desire to see introduced, but it does not prevent or seriously interfere with the administration of the Act of 1909–10, as passed by this House.

The Attorney-General boldly stated that my hon. Friend had made no case whatever for his proposal, unless it was his desire to destroy the whole Act. My hon. Friend has made and proved his case again and again in this House. What is the case? It is that you are serving forms of valuation upon a great number of poor people who are not learned in the law, not able to readily afford the cost of obtaining skilled assistance, such as is necessary either for the valuation of land or for the interpretation of an Act of this complexity—that you are serving a great number of forms of valuation upon those persons who have no idea whatever of the effect of these valuations. They have the right of appeal within sixty days, but they have not the least conception that there is the least necessity to appeal, or of what the effect of accepting these valuations will be. All the experience they have of other taxation leads them to suppose that a low valuation is in their interest. For the first time a low valuation acts against them. They are not prepared for that, they are not suspicious, and they are not people who can readily afford the fees of lawyers, surveyors, or technical experts to advise them whether they ought to appeal or not. They have a very well-founded abhorrence of any legal expenditure or action. These persons of small means have reason to avoid procedure of that kind, and they accordingly take no action. They take no action in ignorance. Is there anybody to protect these people against the results of their ignorance? Have we any evidence that the agents of the Inland Revenue are really seeking to protect these people against possible injustice? No, Sir, all the evidence is the other way. My hon. and gallant Friend has had case after case brought to his notice. I think I may say that hundreds of cases have been brought to his notice, and more than once he has brought cases before this House.

There is one case now specifically under appeal, and of the merits of which I will say nothing. It was a case that was brought to the notice of this House, and the Government thought it was of such primâ facie force that they at once consented to an indefinite extension of the time for appeal against the valuation in order that the case might be brought before the Court. But do the Government desire or think it possible that Members of Parliament should bring every one of these cases to the attention of the House? That which the Government has admitted to be just was refused to these people until the case was brought before the House of Commons. We want to protect these poor people. All the rich people in these cases employ the skilled advice of people who are constantly dealing with the Act, and they therefore protect themselves at considerable cost to themselves. It is the small man to whom the right of appeal, when he sees the effect of the valuation tells upon him, is so necessary. If you do not have appeals, you will have valuations which are not correct from the beginning, and which could not be substantiated if they were challenged, having all the force of law, and these men will become subject to taxation without knowing what was involved in not appealing against the valuation.

That is a side of the case with which the Government have not shown the slightest sympathy. To make their scheme workable is their first desire, and it is extremely natural that it should be so. It is not an easy task. I sympathise with them in their efforts whether in or out of Courts to achieve that object. I observe that their efforts out of Court meet with a great deal more success than their efforts in Court. As long as they are judge and jury in their own case they get on, but when an appellant does have access to the Court, then we learn something of the amount of reliance we can place on the knowledge or the competency of those who are charged with the administration of this Act, and who deal with the very complicated questions which have been left to them. I think it is absolutely essential in the interest of justice, and in order that men shall not be fined sums of money for which, as my hon. Friend says, there is no legal authority under the Statutes dealing with taxation. The right of appeal, which my hon. Friend has asked for, should be given, or the Government should find some other way of redress. As long as the Government offer no other method of redress I stand by the proposal of my hon. Friend, and I say it is the least this House can do for the protection of the citizen.

I think there are obviously strong practical objections to the proposal of the hon. and gallant Member (Mr. Pretyman). Does he suggest that it will be as easy to value property in ten, twenty, or forty years time as now? The right hon. Gentleman (Mr. Austen Chamberlain) made a great deal of the case of the poor. It is very remarkable how intimately the poor are connected with the ownership of land in all these discussions—much more in argument than in real life. Let us take the case of the poor. How is the poor man advantaged by having his appeal put off for an indefinite time? We are told—and it is the argument used on the other side—that these valuations are matters of opinion. Well, it is at any rate the opinion under present existing conditions. It is not speculative opinion given in appeal, ten, twenty, or forty years hence as to the value of a property under the 1909–10 Act. Just fancy what would be the nature of a trial in a case of that kind. You would have valuers brought up to speculate as to what the value of the land was forty years hence, when everything had changed and the whole of the buildings had been swept away. That is the practical improvement proposed by the hon. and gallant Gentleman. Is that a practical method of carrying out the valuation? It would be a valuation of one property now, a second next year, another in seven years, and another possibly seventy years hence. That is the method of valuation propounded by the hon. and gallant Member. That is what his Amendment means.

No doubt the cases brought forward by the hon. and gallant Gentleman are thought fair argument. One of them is sub judice. One is the case of a property in which a high price was given because the resident tradesman did not wish to be disturbed. That is the contention of the Inland Revenue. That is a very common case where a tradesman, having built up a business, will give either a fancy rent or a fancy price rather than be disturbed and have his business damaged.

Does that alter the site value? Do you assess site value on the profits of the business?

I never made any such absurd statement. We were talking of a case in which the hon. and gallant Gentleman suggested that the valuation was fixed on a higher price than the price in the total original valuation.

Then I did not understand the case put by the hon. and gallant Gentleman.

May I explain again? The case was simply this. A certain property was sold by auction for £1,065 on July 11th, and Death Duty was actually paid on that amount. Therefore the Government were ready to accept that as the value then. They did not take duty on the profits. They took duty on the total value. On 2nd November a valuer served an additional valuation of £765, and a site value of £30, after the property had been sold, and the Death Duty paid upon it, on which duty is to be paid. This is a new case, which I brought forward to-day.

I was not discussing that case at all, but a different case in which the Board of Inland Revenue allowed an appeal. That shows the difficulty of arguing any cases unless you are given the facts and unless you have time to look into those facts. It has happened that the hon. and gallant Gentleman has given us cases, and when we investigated them we found that material circumstances had not been known to the hon. Gentleman, so that it is perfectly impossible——

I am talking about a case in South Wales. My point is this. It is absurd to think that any effect can be made on the mind of the House by simply bringing up cases on the floor of the House without giving notice or allowing any opportunity for examination so that we might have all the circumstances of the case before us. It would be perfectly impossible to conduct the valuation in the way suggested, and instead of having a valuation that was more in accord with facts and less a matter of opinion you would have a valuation that was a matter of speculative opinion at the latest possible time, because you would have a valuation after all the facts had passed away and where you were dealing with a state of affairs long gone by.

The attitude of the two right hon. Gentlemen who have just spoken seems I am bound to say to support our contention during the passage of the Bill of 1909 that this Bill was intended not so much as a method of raising revenue as a punitive measure for those who possess the land. The right hon. Gentleman who spoke last was most sneering in his allusion to small owners of land. He seemed to think that no poor man had a right to have an acre or even a rood of land, and I do not wonder at it. The whole of this land agitation has been started with the idea that 10,000 people own the whole land of this country. Now it has been discovered that there are 36,000 owners of freehold in London alone, and the Government have discovered, from the enormous number of separate occupations and ownerships, that the number of small owners is far greater than they ever imagined. Now these gentlemen think that it is extremely difficult to fix these valuations if they post- pone them for ten, twenty, thirty, or forty years. But that is just what is going on at the present. From some of the calculations which have been gone into it has been shown that at the present rate of progress it will be between thirty and forty years before the valuation of all the land in this country has been settled. How about these enormous difficulties? I agree that they are difficulties. But these difficulties are going on, and will go on, under the plan of the Government just as much as under the scheme brought forward by my hon. Friend below me. The case is really very strong. They say it is impossible to go back twenty or thirty years to find the measure of the site value thirty years before you get your datum line; but that is exactly what is going to happen under the Act. You have got the datum line, say, fixed for two properties as from 1909. A hundred years hence, we will say, after various changes, two portions of those properties are amalgamated for sale. Then you have got to go back 100 years, and you have got to discover what portion of the site value of the whole occupation of each of those old occupations was, represented by the particular premises that are going to be sold, one hundred years before. And that may take place 200 years hence even. The whole scheme of this Bill involves that you have always to be going back twenty or thirty or an indefinite number of years.

The method of valuation that has been carried out by hon. Gentlemen opposite really traverses the whole principle of the Bill. The whole principle of the Bill was this: that the tax be taken on the addition, the snippings as it were, the very modest snippings, as the right hon. Gentleman said opposite, on the increment value, on the increased site value. But by this valuation they do not get snippings on the increased site value. They are taking great slabs of the actual value itself, that particular valuation which they said they were never going to touch or tackle at all. Ordinary small people, and many people, are utterly deceived by this method of carrying on business. Why the very words "provisional valuation" have got a nice mitigating, compromising sound about them. Nothing final is suggested by the word "provisional," and no particular document or paper is ever sent to these people afterwards to tell them when the sixty days have elapsed or that if they do not send in their papers before sixty days the valuation will be a per- manent valuation. It is impossible to expect a very large number of owners in the country to be aware of the details of a Finance Bill of that kind. There is one point that I would like to allude to in the way of a concrete case which shows how very severely people are affected, for instance, as regards that principle of substituted site value which was referred to by my hon. Friend below. Hon. Members are aware that under Sub-section (3) of Section 2 of the Act owners are allowed, if the property has been purchased within the last fifty years, and if the site value is higher than the site value in 1909, to substitute the one value for the other. But they have got to do that within a certain time after the provisional valuation, and of course it is not everybody who knows that that can be done. I have got here a concrete case to which I would like to call the attention of the House, and under which great hardship will result.

There is a row of sixteen houses. Three of them were bought by working men and thirteen were bought by one large owner. The three were bought for £380 each, and the thirteen for £370 each. The site value is brought out at £50 to the large owner, but he, being able to employ advice and understanding how he would be affected, got the other site value substituted for the new site value, so that his site value works out at £110. The others did not do that, so if these three unfortunate men who purchased these separate properties sell their properties, and if the site value works out at only £110, they will have to pay one-fifth of the £60. They will have to pay a large sum which they have no business to pay, and which is their own, and ought to go into their own pocket, and which is being taken from them by the Government merely because they do not happen to know particular conditions and details, and have not got the means to pay for the advice which is necessary for them to understand so complicated a measure. If the right hon. Gentleman opposite is not going to accept the Amendment it really is his duty to consider how these hard cases are to be obviated. He does not seem to have the slightest sympathy with a case of this kind. He does not seem to want to deal with it in any way. He simply stands up vigorously and opposes a strong front to the Amendment of my hon. Friend because he says that that particular Amendment is not practicable. I think that I have shown that it is quite as practicable as the working of the Bill under the Government scheme. If he does not think that it is practicable, does he think that it is a right thing that these injustices should be committed on these small owners of property? If he does not think that they ought to be done, it is his business to propose some Amendment to prevent these injustices which are committed under the Act, and it is the duty of the Government to see that, when people's property is taken from them in this way, because of their un-familiarity with complicated legal details, if they do not accept the Amendment they should at least provide some remedy.

I think the position which the Government take up on this question is most unsatisfactory. If hon. Members on this side produce what the Government are pleased to call isolated cases they say, "What is the use of raising cases of this sort when we have had no chance of investigating them." If, on the other hand, you raise them as general propositions they say, "What is the use of raising general propositions when you cannot give us concrete cases?" Still the fact remains that under the provisions of this Act great injustices have been done, and this Amendment, if carried, would go far to remove some of those injustices. I am not in the least impressed by the argument of the learned Attorney-General on the subject. It seems to me there was no reason whatever why the owners should not have the opportunity of protesting against the original valuation at the time when the occasional valuation was made. It presses particularly severely on leaseholders who are called upon to pay Increment Duty for the value of their interest in leasehold premises. The learned Gentleman does not like concrete cases, but there is a concrete case which has been brought to my notice. It is the case of a leaseholder who had bought his interest in the property in 1909 for £270 and sold it in 1910 for £260, and yet was called upon to pay £3 18s. as Increment Duty. Where is the increment in that, and why is it that he was called upon to pay that duty?

Is it because of the provisional valuation? When the provisional valuation was served upon him he naturally thought that it was perfectly satisfactory, because he saw the actual figure £270, which was the same as what he had paid for the property, put down in the provisional valuation as the difference between the gross value and the value of the fee-simple divested of buildings, trees, etc., which must be natu- rally the value of the building. He, therefore, thought that his interest had been correctly valued at £270, not realising that what he should have looked into was the original full site value; and, moreover, in the provisional valuation there was no figure whatever to show him how it is worked out in tables by the Inland Revenue people when they charged the duty, and what was the proportion of the interest in the site value, which interested him, and on which he would be called upon to pay duty when the occasion arose. Now he finds himself served with this claim. He cannot make an appeal, because the sixty days have long ago elapsed, and when the provisional valuation was served it appeared to him, as far as he understood the Act, satisfactory. Therefore, you get this ridiculous position that this man is called upon to pay Increment Duty when, in fact, he has suffered a loss of £10 on the actual sale made, besides the expenses, which are another £10 or £15. There is a concrete case, and in spite of the objection of the Front Bench opposite to concrete cases, I do think that these cases occurring so constantly, as they do, show that the system is wrong. I do not want to attach particular importance to this particular case. It may be right or it may be wrong. There may be facts withheld or they may not. But when you get a succession of these cases arising time after time brought up in this House on every possible occasion, then it is a monstrous thing for the Government to disregard them and brush them aside, and say that the Act of 1909 and 1910 is perfectly satisfactory and is working all right, and that they do not propose to alter it in any direction whatever.

I say it is a great injustice upon the subject, and the sooner the Government realise that, and realise also that their scheme is unjust in principle and unworkable in practice, the better it will be both for the taxpayers of the country and for the revenue of the country. It is interesting to observe how much this country is losing by the expenditure on this so-called valuation. The Government seems to me to be very fond of going outside the provisions of the Act, and the Act itself, as we find, is sufficiently unjust. But there is another injustice about which I should like some explanation from the learned Attorney-General, and it relates to the instructions issued by the Inland Revenue Department on the 21st January, 1911, and printed by order of this House. I do not wish to quote the whole of them, but it is comparatively easy to see what the instructions amount to. They amount to this, that where the occasion for valuation arises the valuers are not necessarily bound to take the price at which the property changed hands as the accrued value, but they are to arrive at the gross value independently, and at the full site value independently. The result of that is that if the property has been sold for a larger sum than the gross value which is put down, then the whole of the increment is attributed to the value of the site, although, as a matter of fact, it ought to be attributed to the value of the building. This remarkable document goes on to say, firstly, secondly, and thirdly——

Is the Noble Lord in order in going into the instructions upon this particular Amendment?

I was endeavouring to show the necessity for appeal because of the way in which valuations are made. Firstly, secondly, and thirdly——

May I ask for your ruling, Sir, upon a point of Order? The Noble Lord is going into instructions which were issued to the valuers, whereas the Amendment deals purely and simply with the length of the period of appeal.

I think the Amendment goes a good deal further than that. It is not merely the question of time, it is the question at what particular period the appeal is to be taken. I think the Noble Lord is entitled to proceed.

The first paragraph of these Instructions says:—

"By this method the following result shall be achieved."
The second paragraph says:—
"The Increment Value Duty will be collectable in all cases where there has been either (a) an increase in the value of the site as compared with the actual site value; or (b) the unit of valuation or the interest therein has actually been sold for more than its worth at the time."
What provisions are there in the Act to justify increment being taken in that case? We were told all through that the increment was on the site value, and the site value only. The Chancellor of the Exchequer frequently waxed eloquent on the point that no improvements were to taxed, and that no other incidental accretion to the value of the property which was not due to the value of the site was to be taxed. Yet we find the Government Department issuing to the valuers an Instruction to take the occasional profit and charge Increment Duty upon it, although there is not a word in the Act of Parliament to justify such a proceeding. The result of that is that you take the highest value where it suits you, in order to deduct the value of the building which you have ascertained by putting your gross value lower than the highest value, and then you attribute the whole increase to the increase in the site, and so charge Increment Value Duty. I shall be very glad to hear what the Attorney-General has to say upon the point, which is of vast importance. I raise the subject only to show how necessary it is that the person who is charged the duty should have an opportunity of appealing when he sees the duty which is going to be charged. Naturally, it is essential for him to be clear that the site value has been fairly fixed, otherwise he might be improperly charged with the duty. I must say I think the Government ought to accept the Amendment of my hon. Friend. It would at all events mitigate some of the injustice done under this Act, and I do not think any argument against it has been advanced from the Treasury Bench that has the least validity of any sort or kind.

The officials who have the administration of this Act have a very difficult task to perform, and they can only deal with valuations as occasions serve. The Financial Secretary to the Treasury, in endeavouring to deal with one concrete case put before the House, tried to make out that the tradesman was being penalised by the high price being asked. It may surprise the House, and it may surprise a great many people to know that, instead of the landlord trying to take advantage under this Act, he is compelled under this Act to take as much as he can from the tenant. I will give an illustration of how the matter works. The tenant approaches his landlord for the surrender of a certain interest on the grant of a longer lease. The landlord, out of consideration for the long tenancy, quotes a reasonable rent, which the tenant accepts. This is the occasion for a valuation, and, in the endeavour to make their valuations uniform in a particular street or road, the officials under this Act have to ask that the landlord shall pay Increment Duty to correspond with the rents and value of the property on either side. That is actual experience of the working of the Act, and landlords are being penalised for treating their tenants with due regard to the fact that they are long-established tenants. The great majority of leaseholders in this country are quite unaware, up to the present, that they have anything to do with this Act. The valuations are only doled out on occasion, and it comes as a very great surprise to people to find that they have anything to do with these valuations at all. I am speaking of leaseholders. A great many people are still under the impression that the valuation has only to do with land, and they receive a very rude awakening when they are applied to in respect of Increment or Reversion Duty under transactions on which these charges accrue. They are not served with a notice of what the Government consider the valuation to be as in 1909, and the leaseholders only receive notices when their cases come under official notice. From the way in which this Act is worked, landlords, I say, are unable to extend the consideration to many of their tenants that they would otherwise do, because it is the desire of the officials to make the valuations uniform in a street. In one case, I know of a landlord who was asked to pay as much as 62½ per cent. Reversion Duty, instead of the 10 per cent. under the Act.

The right hon. Gentleman the Financial Secretary rather laughed at the Amendment of my hon. Friend on the ground that it would take sixty or seventy years to make a valuation, and it would be impossible to make valuations under those circumstances. That was dealt with by my hon. Friend behind me, who pointed out that under this Act probably thirty or forty years would elapse before the valuations are completed. I think there are very great reasons for having an extension of time in which to make appeal. The right hon. Gentleman told us that cases had been given to him, and that it is quite impossible for him to judge of them unless he has been told beforehand what the cases are. I will give him a case which is so simple that I think he will be able to understand it, having been given previous notice of it. I happen to be trustee for certain freehold properties in the neighbourhood of London which belong to a near relation of mine. I had some valuations made of those properties. I looked into the matter, and I found that five houses of the same character were valued differently from other houses—that is to say, the assessable site value of the five houses was only £5, whereas the assessable site value of all the other houses was £24. I have the letter of the district surveyor, and this is what he says:—

"I beg to acknowledge receipt of your letter of yesterday's date. The reason that the assessable site values of Nos. 13 and 20, Plevna Road and Nos. 21 and 26, Osman Road, are lower than the remainder, is that these are corner plots of land with flank frontages to Beaconsfield Road of about seventy feet each, and therefore part of the value of the land is attributable to the fact that the side road has been made up and taken over. You are aware that in the case of corner plots of land where the side road has not been taken over, the value of the land is practically nil owing to the liability for road-making charges. I have taken the value of works executed at £35, so as to have a nominal assessable site value. If the actual cost of road-making was deducted instead of the value attributable thereto, the assessable site value would be minus £40."
Because I happen to own five houses in the neighbourhood of London, in the case of four of them, in consequence of the road-making, I found that the site value was minus £40, and that the sites were worth £160 less than nothing. I received the following communication from the Valuation Department of Inland Revenue:
"In regard to No. 14, Osman Road, it appears that by a clerical error the value attributable to works executed was put at £35 instead of £16, and the assessable site value should have been £24. In this case, I have pleasure in enclosing an amended valuation."
Perhaps, being naturally of rather a suspicious disposition, and having spent many years in this House and many hours in listening to the exposition of this Act, I was very careful before accepting the new valuations. If I had been an ordinary innocent sort of person who had not spent many years in the House of Commons, I should have let this go by, and should have been assessed by a clerical error on something quite different from what the value really was.
"I have taken the value of works executed at £35 so as to have a nominal assessable site value."
And he puts the value of these four houses at £5 each. I want to ask the Attorney-General this question. I wrote to this gentleman, and asked him to point out to me the Clause in the Act which permits him to attribute a hypothetical value to the site of £40 less than nothing, and then put it at £45. I always understood you had to pretend to know what the assessable site value was, and that, having taken certain precautions and made certain inquiries, you came to a conclusion. I should like the Attorney-General to inform me where there is any power under the Act to put a different site value on property to that which the assessor says is the correct one, because if we are going to allow these valuers to say, "I believe that the valuation is so much, but for certain purposes of my own I will put it at something else," then there is an unalterable case for the Amendment, which would give time to find out all these difficulties, so that people will not be eventually caught in a trap and compelled to pay something which they never ought to pay. I am sorry the right hon. Gentleman has already spoken, but I am sure that the Under-Secretary for the Home Department, who has a very quick mind, would easily take any reference or hint as to this particular Clause. I am really most anxious on this point, not only in my own interests, but in the interests of people who are not rich men, though I do not think it should make the slightest difference whether they are rich or poor men.

I should like to say a word in support of this Amendment, which seems to me to be extremely desirable and necessary at the present time, inasmuch as it deals with those two most contentious taxes, the Increment Value Duty and the Undeveloped Land Tax. I do not agree with the argument of the Attorney-General about valuing land on distant dates. I venture to say that the land which is being valued to-day is being valued at its value to-day, and not at its value two years ago. It is well known that since the passing of the Act of 1909 there has been a large fall in the value of urban land, because there happened what some of us said would happen, and it has killed the building trade, which is the trade of all others which the community should foster and encourage, because it is the trade which creates rateable value, which has caused the growth of our large towns, and which makes provision of houses for the people without risk or expense to the community. By the ruin of this trade the municipalities must be great sufferers, while a large number of people who used to be steadily employed are now thrown out of work for the reason that there is no one now, neither banker nor solicitor, to finance the builder, and there is no one to buy land since the passing of this Act. I had a valuation served on me yesterday morning on land which cost me actually 25s. per square yard. That value was 5s. 6d. per square yard, so that if I could ever obtain 6s. for what cost me 25s. I should have to pay Increment Duty to the State.

I should like further to say that it is desirable to postpone by any means the time for valuation, because the methods of valuation are so imperfectly understood at present. The Amendment of the hon. and gallant Gentleman will remedy the Act in this respect. Those methods of valuation are so fantastic and grotesque that it seems really as if what is desired, firstly, is not the simple value, but the manipulation of figures designed to bring the landowner into the grasp of the tax-collector. Indeed, they are not only grotesque, but almost unintelligible, and I am sure anybody who has wandered through them must come to the conclusion of a well-known character in fiction who said with regard to learning the alphabet that it was hardly worth while going through so much to know so little. I am sure that even the expert, who has perhaps made himself acquainted with the letter of the Act, learns very little of land or property by these methods of valuation. I was hoping the Government would now know enough and have heard enough to show that these taxes in some respects are utterly unworkable and impracticable, and that there is real reason for their repeal. I looked on through the various Debates on this subject during the last two years, and heard the statements of hon. and right hon. Gentlemen on the Treasury Bench, some of them lawyers of great eminence, whose name and fame are on the lips of men, and it is a curious spectacle to see them floundering in the mazes of this bewildering Act trying to make plain the unintelligible, and to explain the unexplainable, and to fulfil what I am sure must be the disagreeable and almost impossible task of excusing and palliating its many injustices. Surely the authors of this Act must have realised by this time how hopelessly they have failed to hit the mark. They shot at a pigeon and killed a crow. They went out for dukes, and they have hit the hard-working builder and the poor and struggling property owner and investor. They professed to be going to help the municipalities and the communities which maintain them, and they have dealt to both of those a mortal injury.

The only way by which the Act can be made to produce revenue is by the manipulation of figures under these extraordinary methods of valuation. Simple value seems to have disappeared as the standard of the measure of property. When you have imagined some things and guessed at others, and added this and deducted that, then the poor property owner is so fogged that he cannot elucidate the problem. I do not wish for a moment to say anything offensive, but it is the working of the Act, and not in any sense those who made it, to which I wish to refer. I think it as well to say here what is freely said outside, and that is to guess the prospects of property because something may happen which has not happened, and may never happen, and to tax landowners on purely imaginary capital, and to take away from a man who has earned and worked or invested some part of his legitimate profit, and to claim by the manipulation of figures that the man who has lost by his investments, or by his labour, is to be treated in the same way as he who has won, and to take increment from losers, they say truly outside, that the Act in those respects is a swindle and a fraud on the landowner. I submit that the cases that have been brought forward in this country go to prove that, and also the experience which we have had of its working day by day. To taxes of this kind the Government must expect Amendments and determined opposition. By the removal of a few of them they will be able to secure the simple and easy working of the Act, which otherwise must remain a perennial source of irritation and soreness, and calculated to defeat the objects and purposes for which it was framed and passed.

As to the interesting speech which we have just heard, I should like to make a passing reference. As a matter of fact the building trade of this country is quite as prosperous to-day as when the Act of 1909–10 was passed. May I say that the view of the Members of the House who are associated with me in this matter is that the reason the building trade is not more prosperous is not because we made a beginning in land value taxation in the Finance Act of 1909–10, but it is because that advance is too timid. I would suggest a practical experience to prove the truth of that inference, and that is in Sydney, New South Wales, where they have direct land taxes put on land values instead of buildings. This country has been scoured for masons, bricklayers, carpenters, and other men connected with the building trade, and it is impossible to find men in Sydney or in New South Wales or in Australia for the purpose of meeting the demands of the building trade, which has been in a state of boom there since the passing of the land taxes a few years ago. I rose to direct attention to one feature of the Amendment which is proposed by the hon. and gallant Member for Chelmsford (Mr. Pretyman) to which I would fain think he has not himself paid sufficient attention. It is perfectly true that this Amendment is introduced in the

6.0 P.M.

interests of the poor and not in the interests of the rich, and it is perfectly true that we are informed of particular cases of hardship which this Amendment would rectify. But the hon. and gallant Gentleman cannot limit the effect and scope of this Amendment. He cannot apply this Amendment to merely that part of the country where the land is in the hands of a certain number of people, thousands of people, and keep outside its scope half the land which is in the hands of 5,000 people. It is bound to equally apply to both. May I put to him this case for the purpose of showing that this Amendment is absolutely inconsistent with the general fabric of this Bill. His case, as I understand it, is that land at present is persistently undervalued, and that when the owner receives the valuation he is satisfied with the under-valuation and does not appeal. Might I put a very ordinary case—that of land in the neighbourhood of a town, at present used as agricultural land. That land is treated by the valuer as being agricultural land, and it is rated at the moment at £2 an acre. Its capital value could not be more than £50. According to the hon. and gallant Gentleman there can be no appeal until the occasion arises. After twenty years that land is sold to an education authority for the site of a school, and the education authority is asked not £50 but £1,000 an acre. According to the hon. and gallant Gentleman the owner of the land would lodge an appeal when he was asked to pay Increment Duty on this difference, and he would say, "What you are asking me for is totally unjust. This land was of the value of £1,000 all the time." He would go to the Referee and endeavour to prove to him that the land had been of that value for the whole twenty years. If the owner is able to prove to the satisfaction of the Referee that the land was worth £1,000 all the time, he will have escaped paying Undeveloped Land Duty during those twenty years. Under this Amendment, will the Government have any opportunity of recovering that Undeveloped Land Duty? If not, the Amendment is obviously a sham. It is not meant to meet a genuine need by proposing a genuine remedy. It is merely meant as another of the many attacks on the Finance Act of 1909–10 which the hon. and gallant Gentleman has made in this House and in the country. He tells us that the Government are a laughing-stock because of their association with this Finance Act, and that the framework of the Act is bound to be destroyed. At any rate, the Government have gone through two General Elections with this Act to defend, and, so far as I have been able to see, there is no indication that the people regard either the Government or the Act as a laughing-stock.

At any rate, in both of those General Elections all the case that could be made against the Act was made by the Land Union whenever the party with which the hon. and gallant Gentleman is associated was willing for the Land Union to lake part; and wherever the Land Union was particularly active, there the Government majority rose. The whole suggestion that the present arrangement is unfair and that the landowner is being unfairly treated is based upon the alleged ignorance of the owner. We are told that these are poor men who have no opportunity of securing advice, and who cannot get expert assistance. As a matter of fact, the Land Union have told men all over the country that they have only to send to the offices of the Land Union and they can get all the expert advice they want for nothing or for a small fee of one guinea a year. Seeing that the propa-

Division No. 444.]

AYES.

[6.8 p.m.

Aitken, Sir William MaxCraig, Norman (Kent, Thanet)Knight, Capt. Eric Ayshford
Amery, L. C. M. S.Craik, Sir HenryLarmor, Sir J.
Anson, Rt. Hon. Sir William R.Croft, H. P.Law, Rt. Hon. A. Bonar (Bootle)
Anstruther-Gray, Major WilliamDixon, Charles HarveyLewisham, Viscount
Ashley, Wilfrid W.Doughty, Sir GeorgeLloyd, George Ambrose
Baird, John LawrenceDu Cros, Arthur PhilipLocker-Lampson, G. (Salisbury)
Baldwin, StanleyFalle, Bertram GodfrayLocker-Lampson, O. (Ramsey)
Banbury, Sir Frederick GeorgeFell, ArthurLockwood, Rt. Hon. Lt.-Col. A. R.
Banner, John S. Harmood-Fisher, Rt. Hon. W. HayesLowe, Sir F. W. (Birm., Edgbaston)
Barrie, H. T. (Londonderry, N.)Fletcher, John Samuel (Hampstead)Lyttelton, Rt. Hon. A. (S. Geo. Han. S.)
Bathurst, Hon. A. B. (Glouc., E.)Gardner, ErnestLyttelton, Hon. J. C. (Droitwich)
Bathurst, Charles (Wilts, Wilton)Gibbs, George AbrahamMacCaw, Wm. J. MacGeagh
Beach, Hon. Michael Hugh HicksGordon, Hon. John Edward (Brighton)Mackinder, Halford J.
Benn, Arthur Shirley (Plymouth)Goulding, E. A.Malcolm, Ian
Benn, I. H. (Greenwich)Greene, Walter RaymondMason, James F. (Windsor)
Bentinck, Lord H. Cavendish-Gretton, JohnMills, Hon. Charles Thomas
Bigland, AlfredGwynne, R. S. (Sussex, Eastbourne)Morrison-Bell, Capt. E. F. (Ashburton)
Bird, AlfredHaddock, George B.Morrison-Bell, Major A. C. (Honiton)
Boyle, W. Lewis (Norfolk, Mid)Hall, D. B. (Isle of Wight)Newdegate, F. A.
Boyton, JamesHamersley, Alfred St. GeorgeNewman, John R. P.
Brassey, H. Leonard CampbellHamilton, Marquis of (Londonderry)Nicholson, Wm. G. (Petersfield)
Bull, Sir William JamesHarris, Henry PercyNield, Herbert
Burn, Colonel C. R.Harrison-Broadley, H. B.Orde-Powlett, Hon. W. G. A.
Butcher, John GeorgeHelmsley, ViscountPease, Herbert Pike (Darlington)
Campion, W. R.Henderson, Major H. (Berks., Abingdon)Peel, Capt. R. F. (Woodbridge)
Carlile, Sir Edward HildredHerbert, Hon. A. (Somerset, S.)Peel, Hon. W. R. W. (Taunton)
Cassel, FelixHills, John WallerPole-Carew, Sir R.
Castlereagh, ViscountHoare, S. J. G.Pollock, Ernest Murray
Cave, GeorgeHope, Harry (Bute)Pretyman, Ernest George
Cecil, Lord R. (Herts, Hitchin)Hume-Williams, W. E.Pryce-Jones, Col. E.
Chaloner, Col. R. G. W.Ingleby, HolcombeRemnant, James Farquharson
Chamberlain, Rt. Hon. J. A. (Worc'r.)Jardine, Ernest (Somerset, East)Rolleston, Sir John
Chaplin, Rt. Hon. HenryJessel, Captain H. M.Rothschild, Lionel de
Coates, Major Sir Edward FeethamJoynson-Hicks, WilliamRoyds, Edmund
Courthope, George LoydKerry, Earl ofRutherford, John (Lancs., Darwen)
Craig, Captain James (Down, E.)Kirkwood, John H. M.Samuel, Sir Harry (Norwood)

ganda has been carried on up and down the country, that every property owner—large or small—has been circularised, that he has been told that he has only to pay one guinea a year to get all the expert advice that he requires, the hon. and gallant Gentleman is in this dilemma: either the ignorance which he assumes does not exist, or this propaganda has miserably failed to touch the property owners. I do not think it is necessary to appeal to the Government to continue to resist this proposal. The Amendment is absolutely inconsistent with the main fabric of the Finance Act of 1909–10. I do not think that the Government are a laughing stock now or that the framework of the Act is likely to fall; but if the right hon. Gentleman attempted to weave this Amendment into the framework of the Act, then, indeed, the Government would be a laughing stock and the framework of the Act would be in danger of falling. I have sufficient confidence in their good sense and good judgment to believe that the Government will resist the Amendment, and that the House will by a large majority support them.

Question put, "That this Clause be read a second time."

The House divided: Ayes, 136; Noes, 202.

Sanderson, LancelotSykes, Mark (Hull, Central)Warde, Col. C. E. (Kent, Mid)
Sandys, G. J. (Somerset, Wells)Thompson, Robert (Belfast, N.)Wheler, Granville
Smith, Rt. Hon. F. E. (L'pool, Walton)Thomson, W. Mitchell- (Down, North)White, Major G. D. (Lance., Southport)
Smith, Harold (Warrington)Thynne, Lord AlexanderWilliams, Col. R. (Dorset, W.)
Stanier, BevilleTobin, Alfred AspinallWilloughby, Major Hon. Claude
Starkey, John RalphTouche, George AlexanderWorthington-Evans, L.
Staveley-Hill, HenryTryon, Captain George ClementYounger, Sir George
Steel-Maitland, A. D.Tullibardine, Marquess of
Stewart, GershomValentia, Viscount

TELLERS FOR THE AYES.—Lord E. Talbot and Mr. Bridgeman.

Swift, RigbyWalker, Col. William Hall
Sykes, Alan John (Ches., Knutsford)Ward, Arnold S. (Herts, Watford)

NOES.

Abraham, William (Dublin Harbour)Hackett, JohnO'Grady, James
Acland, Francis DykeHall, F. (Yorks, Normanton)O'Malley, William
Adamson, WilliamHancock, John GeorgeO'Shee, James John
Addison, Dr. C.Harcourt, Rt. Hon. Lewis (Rossendale)Palmer, Godfrey Mark
Agar-Robartes, Hon. T. C. R.Harcourt, Robert V. (Montrose)Parker, James (Halifax)
Ainsworth, John StirlingHardie, J. Keir (Merthyr Tydvil)Ponsonby, Arthur A. W. H.
Allen, Charles P. (Stroud)Harmsworth, R. L. (Caithness-shire)Power, Patrick Joseph
Atherley-Jones, Llewellyn A.Harvey, A. G. C. (Rochdale)Price, C. E. (Edinburgh, Central)
Baker, Harold T. (Accrington)Harvey, T. E. (Leeds, West)Priestley, Sir W. E. B. (Bradford, E.)
Baker, Joseph Allen (Finsbury, E.)Harvey, W. E. (Derbyshire, N. E.)Primrose, Hon. Neil James
Balfour, Sir Robert (Lanark)Haslam, Lewis (Monmouth)Radford, G. H.
Barlow, Sir John Emmott (Somerset)Havelock-Allan, Sir HenryRaffan, Peter Wilson
Barton, WilliamHaworth, Sir Arthur A.Raphael, Sir Herbert H.
Beauchamp, Sir EdwardHayden, John PatrickRea, Walter Russell (Scarborough)
Beck, Arthur CecilHayward, EvanReddy, Michael
Benn, W. W. (T. H'mts., St. George)Henderson, Arthur (Durham)Redmond, John E. (Waterford)
Bentham, George JacksonHenry, Sir Charles S.Rendall, Athelstan
Bethell, Sir John HenryHigham, John SharpRichardson, Thomas (Whitehaven)
Birrell, Rt. Hon. AugustineHinds, JohnRoberts, Charles H. (Lincoln)
Black, Arthur W.Hobhouse, Rt. Hon. Charles E. H.Roberts, Sir J. H. (Denbighs)
Boland, John PiusHodge, JohnRobertson, Sir G. Scott (Bradford)
Bowerman, Charles W.Holt, Richard DurningRobertson, John M. (Tyneside)
Bryce, J. AnnanHope, John Deans (Haddington)Robinson, Sidney
Burns, Rt. Hon. JohnHughes, Spencer LeighRoch, Walter, F. (Pembroke)
Burt, Rt. Hon. ThomasIsaacs, Rt. Hon. Sir RufusRoe, Sir Thomas
Buxton, Noel (Norfolk, N.)Johnson, W.Rose, Sir Charles Day
Cameron, RobertJones, Sir D. Brynmor (Swansea)Rowlands, James
Carr-Gomm, H. W.Jones, Edgar R. (Merthyr Tydvil)Rowntree, Arnold
Cawley, Sir Frederick (Prestwich)Jones, Henry Haydn (Merioneth)Runciman, Rt. Hon. Walter
Cawley, H. T. (Lancs., Heywood)Jones, Leif Stratten (Notts, Rushcliffe)Samuel, Rt. Hon. H. L. (Cleveland)
Chancellor, Henry GeorgeJones, William (Carnarvonshire)Scanlan, Thomas
Chapple, Dr. William AllenJones, William S. Glyn- (Stepney)Seely, Col., Rt. Hon. J. E. B.
Clough, WilliamJowett, Frederick WilliamSherwell, Arthur James
Clynes, John R.Keating, MatthewShortt, Edward
Collins, Godfrey P. (Greenock)Kellaway, Frederick GeorgeSmith, Albert (Lancs., Clitheroe)
Collins, Stephen (Lambeth)Kennedy, Vincent PaulSoames, Arthur Wellesley
Compton-Rickett, Sir J.King, J.Spicer, Sir Albert
Condon, Thomas JosephLaw, Hugh A. (Donegal, West)Stanley, Albert (Staffs, N. W.)
Cornwall, Sir Edwin A.Lawson, Sir W. (Cumb'rld, Cockerm'th)Strauss, Edward A. (Southwark, West)
Cotton, William FrancisLevy, Sir MauriceSummers, James Woolley
Cowan, W. H.Lewis, John HerbertTaylor, John W. (Durham)
Crawshay-Williams, EliotLow, Sir Frederick (Norwich)Thorne, G. R. (Wolverhampton)
Crooks, WilliamLundon, T.Toulmin, Sir George
Crumley, PatrickMacdonald, J. R. (Leicester)Ure, Rt. Hon. Alexander
Dalziel, Sir James H. (Kirkcaldy)Macdonald, J. M. (Falkirk Burghs)Wadsworth, J.
Davies, Ellis William (Eifion)Macpherson, James IanWalters, John Tudor
Davies, Timothy (Lincs., Louth)M'Callum, John M.Ward, John (Stoke-upon-Trent)
Davies, Sir W. Howell (Bristol, S.)M'Curdy, C. A.Ward, W. Dudley (Southampton)
Dawes, J. A.McKenna, Rt. Hon. ReginaldWason, John Cathcart (Orkney)
De Forest, BaronM'Laren, Hon. H. D. (Leics.)Watt, Henry A.
Denman, Hon. R. D.M'Laren, Hon. F. W. S. (Lincs., Spalding)Webb, H.
Doris, WilliamM'Micking, Major GilbertWedgwood, Josiah C.
Duncan, C. (Barrow-in-Furness)Marshall, Arthur HaroldWhite, J. Dundas (Glasgow, Tradeston)
Edwards, Enoch (Hanley)Masterman, C. F. G.White, Patrick (Meath, North)
Edwards, Sir Francis (Radnor)Meehan, Francis E. (Leitrim, N.)Whitehouse, John Howard
Elibank, Rt. Hon. Master ofMeehan, Patrick A. (Queen's Co.)Williams, John (Glamorgan)
Essex, Richard WalterMenzies, Sir WalterWilliams, Llewelyn (Carmarthen)
Esslemont, George BirnieMond, Sir Alfred MoritzWilliams, P. (Middlesbrough)
Falconer, JamesMooney, John J.Wilson, Hon. G. G. (Hull, W.)
Ferens, Thomas RobinsonMorton, Alpheus CleophasWilson, W. T. (Westhoughton)
Gelder, Sir William AlfredMunro, RobertWinfrey, Richard
George, Rt. Hon. D. LloydNeedham Christopher T.Wood, Rt. Hon. T. McKinnon (Glasgow)
Gill, A. H.Nolan, JosephYoung, W. (Perthshire, E.)
Gladstone, W. G. C.Norton, Captain Cecil W.Yoxall, Sir James Henry
Glanville, H. J.O'Brien, Patrick (Kilkenny)
Goddard, Sir Daniel FordO'Connor, John (Kildare, N.)
Greig, Colonel J. W.O'Connor, T. P. (Liverpool)

TELLERS FOR THE NOES.—Mr. Illingworth and Mr. Gulland.

Griffith, Ellis JonesO'Dowd, John
Guest, Hon. Frederick E. (Dorset, E.)Ogden, Fred

Proviso As To Valuation Of Agricultural Property

It is hereby declared that for the purposes of Section sixty, Sub-section (1), of the Finance (1909–10) Act, 1910, the words "Provided that the principal value of any part of an estate which consists of agricultural land, which has no higher value for building purposes than its market value at the time for agricultural purposes only shall be estimated on its rental as assessed to Income Tax under Schedule A, and there shall be no separate valuation of each piece of land under separate occupation, or of any houses or buildings occupied solely for agricultural purposes or by persons engaged solely in the cultivation of the land" shall be added to this Sub-section and this Section shall be amended accordingly.

I am glad to see the Chancellor of the Exchequer here, because the Amendment raises a question of some importance; really rather a matter of the interpretation of the law, and of a definite pledge and undertaking given by the right hon. Gentleman on a former occasion. It will be within the recollection of the House that when the Finance Act of 1909–10 was under discussion, one Clause——

May I ask the right hon. Gentleman the date of the pledge which I gave? I want to see exactly.

Oh, no, this is a definite pledge. The matter possibly had been referred to in some casual way before. This is an absolutely definite pledge on which I rely. It was given in so many words. I will hand over to the right hon. Gentleman the copy of the report, if by the end of my speech he has not been able to obtain a copy. The point at issue was a question of the method of the valuation of agricultural land. It will be within the recollection of the House that by the Finance Act of 1894 there was a limit placed upon the value for Death Duties. I refer to the valuation for the Death Duties. It has nothing to do with the Land Taxes. Perhaps I should have made that point perfectly clear. It is purely a question of the Death Duties on agricultural land. Under the Finance Act of 1894 a limit of twenty-five years' purchase of rental was placed upon the value of agricultural land. By what is now Section 60 of the Finance Act of 1909–10, the Chancellor of the Exchequer removed that limit. So far as that limit was concerned he placed agricultural land upon the same basis as property of other kinds. We were alarmed and anxious lest the removal of that limit of twenty-five years should affect the method of valuation, and we asked the Chancellor at that time to make it perfectly clear, to give us an assurance, that he did not intend to alter the method of valuation; that agricultural land would continue to be valued at so many years' purchase of rental, and would not be valued like other property upon the separate units of agricultural value. I have in my hand a copy of the report of the Debate which took place on 14th September, 1909. My right hon. Friend the Member for East Worcestershire (Mr. Austen Chamberlain) said:—

"Mr. Austen Chamberlain: I should like to ask the right hon. Gentleman a question, and I rather hope that his answer may avoid the necessity for a Division. I understand him to say that the only change he wishes to make in the valuation is the removal of the arbitrary limit of twenty-five years. If that is the case, then I do not think there is any difference between the two sides. What my hon. Friends behind me were afraid of was that under cover of removing an arbitrary limit, the right hon. Gentleman was in fact contemplating a change in the system on which the valuation had been made. Of course, if an estate would have been valued at more than twenty-five years, and if yon take off that arbitrary bar, it will make a change to that extent, but it will not make a change in the method. The reason why this proposal has caused so much anxiety in the minds of many of those who are interested in the matter outside, and of many of my hon. Friends here, is that certain phrases have fallen on occasion, I think, both from the Chancellor of the Exchequer and the Prime Minister as to very large new revenue which the Government expected to get from this proposal. What I want the right hon. Gentleman to tell me is whether I am right in gathering from what he has said that the only effect of the change he proposes is to remove this arbitrary bar, and that there will be no change in the method or character of the valuation."—[OFFICIAL REPORT, 14th September, 1909, Vol. X., col. 2113.]
That was a perfectly plain question, and the answer was quite plain. The report says:—
"Mr. Lloyd George: I have no difficulty at all in giving that assurance to the right hon. Gentleman."

Nothing could be plainer than that!

"If he will compare the operative words of the Act of 1894 with the operative words of my Clause he will see that they are exactly the same. I do not think that either the Prime Minister or myself have said that the Government anticipated any large increase in revenue from this proposal."—[OFFICIAL REPORT, 14th Sept., 1909, Vol. X., col. 2113.]
The hon. Gentleman the Member for Tewkesbury (Mr. Hicks Beach)—he will recall it—even then was not quite satisfied, and he said:—
"I must confess I am not quite satisfied. Surely this is, according to the Bill, a different basis of valuation."—[OFFICIAL REPORT, 14th Sept., 1909, Vol. X., col. 2114.]
The report continues:—
"Mr. Lloyd George: There is no change in the fundamental basis of valuation. The Only difference is that with regard to the limitation of twenty-five years."—[OFFICIAL REPORT, 14th Sept., 1909, Vol. X., col. 2114.]
Nothing could be plainer than that! There are two definite pledges given in one Debate. I was, however, doubtful from information which reached me as to whether that pledge was being carried out, and I was also doubtful as to the interpretation in the matter of the valuation of timber which is being dealt with in the next Amendment. I wrote to the right hon. Gentleman, and asked his authority to go to the Treasury and to ascertain there, because the point was that it was impossible——

May I interrupt. I want first of all to grasp the point which the right hon. Gentleman is putting to me. Is this his grievance: That these cottages are valued now separately as though they were not part and parcel of the agricultural estate, and as if they had no reference at all to agricultural usage? Is it his suggestion that they ought to be valued as part and parcel of the estate? I only really want to be clear.

Nothing whatever is said about cottages in this Amendment. The question is not one of cottages. The cottages were a mere illustration of the simple unit. The cottages were merely a small unit quoted in the Debate at the time. The question is one of the valuation of agricultural property as a whole, and that was the matter on which the pledge was given. It was not a matter of cottages. The right hon. Gentleman can look at the matter himself. It is in the Debate. Where does the word "cottages" occur in it? This was a matter of the valuation of agricultural land. I desire to pin the right hon. Gentleman very closely to his actual pledge. The whole question was the entire valuation of agricultural land. The matter of the cottages was merely an illustration given by me of the extreme hardship that would occur in that particular case as part of the whole case, for we had not time to cover the whole ground.

I continue my narrative. I wrote to the right hon. Gentleman and asked him if he would give me authority to go to Somerset House in order that we might get a proper basis for debating this question, and so that I might ascertain in what way the valuation was being made. The right hon. Gentleman did not answer my letter. I have no doubt he was too busy. I waited for six weeks. Then I wrote to the Secretary to the Treasury, and he gave me the authority I desired. I went to Somerset House. I was there, on the authority of the Secretary to the Treasury, very courteously met by two officials—Mr. Percy Thompson, the Assistant-Secretary, and Mr. Howell Thomas, Deputy Chief Valuer. I asked them as to what alteration, if any, had taken place since the passing of this Clause, on which this Debate took place, in the method of valuing land—because I may say here that the right hon. Gentleman said it was entirely in connection with building land in the neighbourhood of towns that he looked for the increase. That is in the same speech. What the House was led to believe, and what no doubt the right hon. Gentleman believed himself, was that this Amendment only affected building land, and that the method of assessing agricultural land was not touched at all. The two officials, whose names I have given, told me this: "By that Clause the method of valuing building land remains exactly as it was; there is no alteration at all. The method of valuing agricultural land, which until that Clause was passed, had been a multiple of the rental"—that is, so many years' purchase—"has ceased; and the valuation of agricultural land has now been entirely altered, and has been exactly assimilated to the valuation of urban land." [An HON. MEMBER: "Hear, hear."] Yes, but that is exactly the contrary of the pledge given by the right hon. Gentleman! I am not asking now what the hon. Gentleman's opinion is who interrupted. We all know what he wants. I am claiming this Amendment as the fulfilment of a definite pledge given across the floor of this House. This Amendment never ought to have been required at all. I think I have a right to complain that the right hon. Gentleman did not see that his pledge was given effect to. He gives a definite pledge in this House that the method of valuation of agricultural land will not be departed from. I go to Somerset House on behalf of my hon. Friends only to find that the method has been departed from, that the apprehensions of my hon. Friend behind me were fully justified, and that this valuation is now being carried out on a different basis. All that this Amendment does—and I do not need to elaborate it any further—is, in so many words, to give effect to the Chancellor of the Exchequer's pledge. I call upon the Chancellor of the Exchequer, without arguing the point further—because we are under very severe difficulties in respect to the limitation of the Debate owing to the Government's conduct of business—and because after his answer I should like an opportunity of reply. I prefer to leave the matter as I have put it after my direct narrative. There are other hon. Members on this side who are quite competent to deal with the rights and wrongs of the matter. I could put a good many arguments forward in favour of my Amendment, and if I were appealing to the Chancellor to make a change in the law I might do so. I am not so appealing to him. I confine myself to a mere statement of the pledge which he gave, and I request him to give effect to it.

There are two more points which I wish to make. The one is that this does not exhaust quite the matter of the valuation of agricultural land raised upon the Amendment. I wish to challenge and to contradict the claims made by hon. Gentlemen opposite, and acknowledged or encouraged by the Front Bench, as to the additional value which has been obtained in Death Duties by means of the valuation under the Finance Act of 1909–10, Part I. It is said that that valuation has been the means of increasing the revenue. That I dispute. On 29th October, 1909, the Chancellor of the Exchequer stated "that there had then been an increase in the yield from the Death Duties." He said it was attributed partly to the cause pointed out by the Prime Minister, namely, improvement already effected in valuation. He went on to say:—
"The mere fact that we have not accepted too freely some of the accounts submitted to us has had a very appreciable effect and in the course of a single week it has added £100,000 to the duties. That fact shows that there is a great deal in the criticism of the Prime Minister, namely, that a revaluation would make a very substantial difference even in the Death Duties. Land which has been taxed as agricultural land we have discovered is valuable building land, and that has made a difference in the Death Duties, and a very substantial portion of this £1,300,000 is attributable——"
And this is the point I myself want particularly to call the attention of the House to—
"is attributable to the fact that we have got an efficient valuation department."—[OFFICIAL REPORT, 29th October, 1909, Vol. XH., col. 1361.]
Therefore, what the right hon. Gentleman had then done was that he had taken advantage of the powers given, or existing, in the Act of 1894, wherein land was to be valued as agricultural land, except land on which there was any expectation of future increase of income. Therefore, any building land where there was any expectation of a future increase of income, coming under the Act of 1904, without any Amendment of the law, it was valued by the Government valuer and its full value obtained. Not only was that possible, but it was actually done. The Chancellor of the Exchequer told the House he had appointed a special body of valuers who did obtain the value and were obtaining it before the Finance Act became law, and therefore the full Death Duties value of all land was obtainable before the Act was passed, and not a penny of that could be attributable to the new valuation under Part I. of the Finance Act. Therefore, that claim is absolutely untenable. The only further point is that the right hon. Gentleman has been good enough to frame an Amendment which, I understand, he has accepted and will propose in regard to cottages, but I think that does not cover the ground and does not fulfil the pledge.

No. The last words, "workmen in the locality," are not satisfactory. Perhaps I had better read the Amendment,

"In estimating for the purposes of Sub-section (5) of Section 7 of the Finance Act of 1904, the principal value of any agricultural property which comprises any cottages occupied by persons employed solely for agricultural purposes in connection with the property, no account shall be taken of any value attributable to the fact that the cottage is suitable for residential purposes by any persons other than agricultural labourers or workmen in the locality."
The words "workmen in the locality" would destroy the value of the whole Clause. There are few agricultural properties which are not within a few miles of populous centres where workmen would be only too glad to obtain an agricultural cottage and to pay perhaps 6s. a week for it, though they are let to agricultural labourers with a quarter of an acre of land for 1s. 6d. a week. The Amendment is really no value if these words "or work- men in the locality" are included. It does not cover the ground. You may have an agricultural estate and cottages upon it, and it may be necessary to be able to let them to woodmen and others working upon the estate. I understand the right hon. Gentleman is prepared to accept the words "working upon the estate," instead of the words "workmen in the locality." That would be better certainly and would do I think. I felt bound to say a word about that Amendment. The real reason why this Amendment is moved is to give effect to the definite pledge given by the Chancellor of the Exchequer which I have read.

I have looked into this question of the pledge given in 1909, and if any pledge had been given I certainly should redeem it. I think I shall satisfy, not merely the House, but the hon. Gentleman opposite, that if a pledge was given the pledge was redeemed. There was no actual pledge, but a statement was made as to the intentions of the Government, which was, of course, equivalent to a pledge. What was the statement I made. I will just summarise the effect. The hon. Gentleman asked me then if there was any change proposed in the method of valuation. I said the change was a change in the limit of maximum. Where a valuation was proposed we got rid of the maximum, but there was no change in the method of valuation, and no change has been made. What was the method of valuation? Under the law of 1894 the value of agricultural land was the market value, and it was not to exceed twenty-five years' purchase. If the hon. Gentleman will look at the tables during the last twenty years he will find that the average market value is something like 17.90 or about 18 years' purchase. What does that mean? It means wherever years' purchase are put in it is cub down to twenty-five years. On the other hand, if the years' purchase which you can get in market value only amount to fifteen, the maximum of twenty-five was not fixed. There you have a valuation which is supposed to be the market value, and if the market value was fifteen years' purchase the tenant got the benefit, but the Crown never got the benefit beyond twenty-five years, and if the hon. Gentleman will look at my speech which I made then he will find that I was pointing out that you would get in certain parts of the country thirty or forty years' purchase.

I was taking purely agricultural land, and you will get that figure in many parts of Wales. Land which had no other value would fetch a very high number of years' purchase. In this case I pointed out the Crown could only assess upon the basis of twenty-five years' purchase. I pointed out in that very speech that it was unfair as between one class of agricultural property and another, and that the poorest class of agricultural property paid up to its full value, because if it was only worth fifteen years' purchase it would have to pay upon fifteen years' purchase, whereas rich agricultural land, which might be worth thirty or forty years' purchase, only paid upon 50 or 60 per cent. of its value. That was my case, and the right hon. Gentleman (Mr. Austen Chamberlain), who possibly will reply, will find it at page 2106. That was what I based my case upon. What did Clause 60 of the Act of 1909 do? The only change it made was this: It got rid of that limit. The basis of valuation was exactly the same. We just adopted the methods in this case to which I am referring, that the value of agricultural land is the market value. We have got rid of the limit of twenty-five years. Where the market value exceeds twenty-five years then the Crown gets the benefit. That is the only change affected at all. That was my impression, and I made inquiries since, and I am assured there has been no change at all in the valuation. On 9th August last the hon. Gentleman (Mr. Pretyman) called my attention to the fact that although, nominally, there was no change in the method of valuation, there was a real change so far as cottage property was concerned. The hon. Gentleman said it does not pay a landlord to set up these cottages. That is perfectly true. The landowner may only get 1 or 2 per cent. He sets these cottages up not in order to get a dividend, as it were, upon his expenditure, but because they are necessary for the purpose of inducing labourers to remain in the district, for the purpose of cultivating his property there.

Then the hon. Gentleman said a man may come down from London and take a fancy to one of these cottages. It may be a very pretty cottage, with woodbine and clematis, and a gentleman might be prepared to give £20 a year for it, and come down and spend his summer holidays there, and it would be very unfair to charge Death Duties upon a basis of that kind. I said I agreed that it would be unfair. I have got the words I used, and I am prepared to stand by them, and if the hon. Gentleman can point out to me that that pledge has not been carried out I am prepared to carry it out in the spirit and in the letter, and if my words which I submit do not do so, I shall be quite willing to accept words that will do so. I said:—
"I think it is undesirable that cottages user for the housing of labourers and the business of the estate should be treated as a sort of separate property if it was put to the highest bidder and sold to a man who came down to spend his summer holidays in it and not be treated as a part of the estate. That I think is very undesirable. I will look into the matter very carefully. The hon. Gentleman mentioned it to me last night. I have made enquiries but he will not expect me to answer at the present moment. I think the financial arrangements may tend rather to increase the building of rural cottages than to diminish them."
I promised to look into the matter. I have looked into the matter, and I have framed an Amendment to carry out my promise. I do not think that a fancy value ought to be placed upon these cottages because, as a rule, they are built at a loss by the landlord. It is exceedingly desirable that every encouragement should be given to the building of these cottages, and that landowners should know when cottages are built that they need not fear that Death Duties can be levied on this class of property on account of any fancy value that might be given to it by people coming down from town to reside in them. If the suggestion which I am putting to the hon. Gentleman be accepted I shall move this Amendment to carry it out:—
"In estimating for the purposes of Subsection (5) of Section 7 of the Finance Act of 1904, the principal value of any agricultural property which comprises any cottages occupied by persons employed solely for agricultural purposes in connection with the property, no account can be taken of any value attributable to the fact that the cottage is suitable for residential purposes for any person other than agricultural labourers or workmen in the locality."
The hon. Gentleman opposite says, the words "workmen in the locality" adds a kind of artificial value to that property. I am rather disposed to accept that view, and to insert instead of them the words "or workmen on the estate," because the Amendment must refer not only to agricultural labourers but to workmen on the property. I am assured there is no difference made in the valuation at all. If the market value is found to be over twenty-five years' purchase you simply use a multiple of twenty-five years. If it was under twenty-five years the landlord gets the benefit on the basis of market value, which is the basis at the present moment.

Is the property treated as one unit, or is it broken up into units of occupation?

I think the hon. Gentleman is wrong. I am assured that they made no difference at all in their methods of valuation. They only considered the Act of 1909 as an Instruction except in respect to the multiple of 25, which is the only difference it makes. At any rate it is not so now. The right hon. Gentleman assumes that under the Act of 1909 there was some difference in that respect, but I am assured that there was not. The method was in force under the old Act, except where the value was more than twenty-five years' purchase, and I am suggesting this as an alternative.

Perhaps the Chancellor of the Exchequer will excuse me for not saying anything about his proposed new Clauses with regard to cottages. I think we had better keep these questions quite distinct. He is right in saying that he gave a specific pledge, and the only question is whether his words fulfil that pledge or not. I do not wish to go into the early part of the right hon. Gentleman's speech as to the treatment before the Act of 1909–10 of properties worth more than twenty-five years' purchase. I was astonished then, and I am still surprised to hear that in regard to purely agricultural properties no building value in Wales or elsewhere is worth more than thirty years' purchase. I accept the statement, of course, coming from the right hon. Gentleman, because he has means of knowing. In any case there is no dispute, and there was no dispute between the two sides of the House as to the propriety of valuing them on the number of years' purchase they were worth and not at a less number of years. The immediate question before us is a very much narrower one, and it turns upon the pledge given by the Chancellor of the Exchequer in the Debate of 14th September, 1909, and on the methods of valuation actually employed. What are the true facts as to the valuation actually employed before the passing of that Act? I am very much interested in this matter, because I have a vivid recollection of that discussion and the grave suspicion that many of my hon. Friends regarded the change which the Chancellor of the Exchequer was making. At the time I asked for a clear definition from him, and, after getting it, I remember persuading my hon. Friends not to divide the House on this matter. They were good enough to act on my advice, and no Division was taken. The Chancellor of the Exchequer does not dispute the pledge that was given, but he asserts that the pledge has been kept and that there has been no change in the method of valuation. Really I think we are placed in a position of great difficulty. With the authority of the Secretary to the Treasury, my hon. and gallant Friend (Mr. Pretyman) went to the Inland Revenue Office to ascertain what was their practice in this matter. He saw two officials and he has given us his account of what they told him. From his statement it appears that they started in unmistakable terms that the method of valuation on agricultural land had been totally changed, that formerly they valued the estate as a unit and now they valued it as separate occupation. That is exactly what my hon. Friend feared when the change was made. Our whole protest was directed against that, and it was in order to guard against that and make certain that that was not going to happen that I put to the Chancellor of the Exchequer in plain terms the following question:—

"Whether I am right in gathering from what he has stated that the only effect of the changes he proposes is to remove the arbitrary power, and that there would be, no change in the method of alternative valuation?"
The right hon. Gentleman replied:—
"I have no difficulty at all in giving that assurance to the right hon. Gentleman."
What has happened is that, on the authority of the Inland Revenue, we have now two accounts of how they formerly valued these agricultural properties. I do not know whether the right hon. Gentleman has been able to consult the officials.

I think we must have their account of the conversations. At any rate they differ from the account given by my hon. and gallant Friend, and I am sure the House, under these circumstances, would permit my hon. and gallant Friend to make any further statement if he thinks it is necessary. The dispute is not as to the pledge, but as to the practice of the Inland Revenue before the passage of this Act. According to the account given by my hon. and gallant Friend the official admitted to him that there had been a complete change. Unless it be conclusively proved that this is not so the Chancellor of the Exchequer is bound to act in the spirit of the words he has spoken. I do not think I can say anything more while there is this conflict of evidence which took place at an interview at which I was not present. I want the Government and the House to realise that we are not so much concerned with the twenty-five years' purchase or the Chancellor of the Exchequer's Amendment, but we are concerned with the methods of valuation and with the allegation that there has been a change.

I understand the hon. and gallant Gentleman's point is that prior to the Act of 1909 there was no separate valuation, say, of farms——

Yes, of farms, but not of every unit of occupation. The rent of each farm was taken and no doubt added together to the rent. Each farm was treated as a single unit, but now a separate valuation is made of every occupation, whereas the whole rental of the estate was previously taken and multiplied by so many years' purchase.

That is rather a different statement from what I understood the hon. and gallant Gentleman made. I understood his contention was that the estate was taken as a whole. I am assured by the very official who was seen by the hon. and gallant Gentleman that there must have been some misunderstanding as to what took place at a private conversation.

It was not a private conversation, because the interview took place in the presence of two witnesses, and I did not give any reason for my inquiry. I asked, is the valuation on the same basis as under the Act of 1909, and I gave an account of what took place to the House. I was told that the valuation of agricultural land was now altered.

At any rate, it was a private interview between the hon. and gallant Gentleman and the officials. This is always what happens when you have to depend upon conversations. I do not know how long ago it was, but the very official that was present says the hon. and gallant Gentleman is under a misapprehension, and he says that he did not say that there had been a change, because there has been no change whatever in the method of valuation. It is true that there has been a quickening up. The passages which have been quoted refer not to a change in the method of valuation, but rather to a much severer check upon the valuations submitted to the Treasury. Prior to that date there was a disposition rather to haggle and bargain with the officials and those who presented the accounts, but the principles and the methods of valuation have not been altered at all, and the official in question assures me that the hon. and gallant Member must be under a complete misapprehension if he thinks that he accepted the interpretation which the hon. and gallant Member has put upon that conversation, because there has been no change at all. This can be ascertained by looking up the old papers, and I shall certainly look into the matter. My inquiry does not affect the conversation, because the point depends upon the documents. I am afraid, therefore, I shall have to look into the documents, because it is a question of redeeming pledges given, and that is a very important matter to a Minister.

As I was one of those who took some part in the Debate which has been referred to, perhaps I may be allowed to say a word or two. Obviously it is clear that there has been a difference in the method of valuation since the Budget was passed, because before the Budget of 1909 the valuation for Estate Duty on agricultural estates was based on Schedule A assessment. What I imagine was done was that the Government official took the Schedule A assessment on separate estates, and not altogether, and now he does not do that; but goes into all the details of the separate farms, and so there must be a difference in the method of valuation of agricultural estates.

Of course there is a change in cases where the value of the property is more than twenty-five years' purchase. In those cases Schedule A was the basis. In values below twenty-five years' purchase there has been no change.

Yes, and for the minimum too. Really, I think that is the case. I remember the Debate very well, and I am pretty certain that it was admitted that Schedule A was the basis. What was our contention on that occasion? Under Schedule A you are allowed certain deductions from the gross rental. You are allowed one-sixth in the case of houses and one-eighth in the case of land. There were one or two other deductions under the Succession Duty Act of 1853. The Section of the Act of 1894 says:—

"The principal value shall not exceed twenty-five times the annual value as assessed under Schedule A of the Income Tax Acts, after making such deductions as have not been allowed in that assessment and are allowed under the Succession Duty Act, 1853, and making a deduction for expenses of management not exceeding 5 per cent. of the annual value so assessed."
7.0 P.M.

That is to say, besides deductions of one-sixth and one-eighth under Schedule A, there were also other deductions allowed. If you do away with the Schedule A assessment, you take the gross capital value of the estate and make allowance for the necessary outgoings and management. I made a definite point to the Chancellor of the Exchequer about it. I said I was not quite satisfied with his reply on that occasion. What I said was this:—
"All he intends to do is to remove the twenty-five years' limit. He does not intend to remove the basis of valuation. That is to say, agricultural land is still to be valued in the future on the Income Tax assessment of Schedule A, with certain deductions for management and maintenance. Are these deductions still to be allowed? The twenty-five years' limit is by no means of much importance. The really important matter is the basis of assessment. Is agricultural land to be valued on the capital value of the gross income or the capital value of the net income? That is the material point."
The Chancellor of the Exchequer very courteously replied and said:—
"Certainly; deductions of the kind mentioned must, necessarily be taken into account, and where the deductions are very heavy I should have thought that, on the whole, agricultural land would rather benefit by the methods I have adopted here, because the deductions which are made under Schedule A do not represent the total deductions which can be made from the gross income."—[OFFICIAL REPORT, 14th September, 1909, Vol. X., col. 2110.]
The Chancellor of the Exchequer by that speech led us to believe the whole basis of valuation would be rather more lenient in the average number of cases than it had been before for the simple reason that all expenses of management would be allowed, whereas all that had been allowed were the deductions under Schedule A. I think it is therefore really essential the Chancellor of the Exchequer should give us now some definite assurance he will make very careful inquiries into the whole system of the valuation of agricultural land in the future. We were led to believe by the definite undertaking he gave across the floor of the House that the idea of removing the twenty-five years' limit was not to raise the total assessment of agricultural land, and that the change he was making would, in fact, be some relief to agricultural land.

The hon. Member assumes that a special allowance is to be made from the market price in order to take into account the outgoings on the estate when the market price includes all the outgoings. That is one of the advantages of taking the market value as the basis of your assessment for Estate Duties. It takes into account all outgoings, and is thereby an improvement on Schedule A assessment. The hon. and gallant Member for Chelmsford (Mr. Pretyman) appeared to believe he had a grievance against the Chancellor of the Exchequer. I believe it was a disingenuous plea, and I think I can show it was so from the speech of the hon. and gallant Member himself. He made a point against us that we were claiming that the large increase in the Death Duties was due simply and solely to the valuation of the land taking place under the 1009–10 Budget, but he showed by quotations that increased return from the Death Duties took place before the Budget was passed. He knows perfectly well that increase was due to the more strict following of and the more rigid adherence to the 1894 Act, and that the change took place before the Budget of 1909–10 was passed.

There was, as a matter of fact, no change of principle on the passage of the Budget. The Chancellor of the Exchequer maintained in my hearing that there was no change of principle due to the passage of the Budget, and that all that happened was the taking off of the twenty-five years' limit. Of course, the change took place when the Liberal Government came into power. We know what happened previous to that. An estate was valued at about fifteen years' purchase of the net rental. That was accepted as the proper value of the estate, and on that Death Duties were paid. When the Liberal Government came into power they brought it up wherever possible to the full value, tied, of course, as before, by the twenty-five years' purchase limit, and if the officials in Somerset House gave the hon. and gallant Member to understand a change had taken place, in the method of valuing, that change took place before the passage of the Budget, and not on the passage of the Budget. All the Budget did was to remove the twenty-five years' purchase limit, and thereby secure a proper valuation in all cases, and not only in some cases. The question raised by the hon. and gallant Member is a perfectly simple one. It is only another dodge of the landlords to cut down their assessments for Death Duty purposes. Ever since the Budget was passed they have been bringing in Amendments and trying to persuade the Chancellor of the Exchequer he has given pledges. They have been seeing him behind the back of the Chair in order to get any sort of concession and some sort of alteration in the idea that capital value is to be the basis of Death Duty taxation.

This claim brought forward to-day is going back to the condition of affairs before the Budget. It is doing away with the capital value basis and going back to the annual value basis. I am quite certain Members on this side of the House are not prepared to go back to the annual value basis and give up all we got under the 1909–10 Budget. Of course, the capital value basis is the best for reasons too obvious to state. It is easier to arrive at. It is perfectly easy to arrive at the total value. It is obviously for other other purposes to the advantage of the State the basis should be on the capital value instead of on the annual value. If a landlord does not make good use of his land and does not get good rent for it, but lets it go to seed, he escapes Death Duties, but now that the capital value is taken the bad landlord pays as much as the good landlord, and they are all screwed up to make the best possible value of their land. I want to say a word or two about the Amendment the Chancellor of the Exchequer is proposing to concede to the hon. and gallant Member for Chelmsford. The worst of the hon. and gallant Member is that he persuades the whole House he is really anxious for something very big, and then looks very happy when he gets something not quite so big, but something fairly substantial. I am quite certain this is much too substantial to be very pleasant to us on these benches.

What is the concession the hon. and gallant Member has got? He is again complicating the issue. Instead of taking the ordinary market value of the estate, our valuers, for Death Duty purposes, have to make a special deduction. They have to consider whether a cottage is let at 1s. 6d. a week, because the landlord wants to get labour at a very cheap rent, or whether it is let to an artisan going on a bicycle to a neighbouring town and coming home at night, or whether it is let to some professional man who goes down there in the summer. All sorts of complications are introduced, making the valuation for Death Duty purposes more difficult. The object is to encourage apparently landlords to let cottages at charity rents. We do not want cottages let at charity rents. We want them let at economic rents, and the only way to do that is to pay the labourers decent wages. So long as you pay them 16s. and 17s. a week, you will have to let them cottages at 1s. or 1s. 6d. a week. Pay your men decent wages, and they will be able to pay proper and economic rents and not merely charity rents. The best way to improve the condition of the agricultural labourer is not to provide a cottage for him at a rent at which you would not let a cottage to any other labourer, but to get his wages up to that level at which he can pay an economic rent. When agricultural labourers are paid decent wages, you will have a large increase in the building of cottages in the country. You cannot expect people to build cottages and let them at 1s. 6d. a week, and I do not think having some sort of problematical reduction in the Death Duties will be any inducement to landlords to put up cottages and supply this crying want of the country. If you want to have cottages increased in the country, the best way is to take the burden of the rates off cottages and leave the rates on land values altogether.

I am sorry if I have gone outside the Amendment, but the issue raised is of considerable dimensions. The question is whether we are doing our best to encourage the building of cottage property by omitting part of the value of that cottage from the assessment for Death Duties, and I must say the method adopted by the Chancellor of the Exchequer to meet the difficulty of housing is not the right one. It is merely making it more difficult to have a correct valuation made of the estate at death, and I hope he will not go on with the concession promised.

I do not propose to enter into the arguments of the hon. Member who has just sat down, because we all know his views on the subject. He regards it purely from the theoretical, and not at all upon the practical, standpoint; otherwise he would find the results are exactly contrary to that which he says. He entirely differs from the Chancellor of the Exchequer. The Chancellor of the Exchequer says the valuation now is exactly the same as it was previous to the passing of the Budget. The hon. Member has been glorifying in what he says they got out of the Budget.

I said particularly there had been no change in the method of valuation at the passage of the Budget; the change took place before the passage of the Budget.

Then I am at a loss to know what the hon. Member meant when he said they had got the basis of capital valuation out of the Budget.

I cannot reconcile those two things. It does not, however, matter; the point is what is actually being done. I might recall to the Chancellor of the Exchequer an answer given to the hon. and gallant Member for Chelmsford to a question on 14th November. Perhaps it will throw some light on the subject. My hon. and gallant Friend asked the Secretary to the Treasury:—

"Whether it is with his knowledge and sanction that the Land Valuation Department are refusing to report agreed figures of valuation of real estate for probate until their provisional valuations for Land Value Duties have been agreed to by executors?"
And the answer was:—
"It is considered of great importance that the original value, where there has been no alteration since the 20th April, 1909, should be recorded at the same amount as the value for Estate Duty purposes, and for this reason instructions have been issued to valuers that valuations for both purposes are to be completed at one and the same time."—[OFFICIAL REPORT, 14th Nov., 1911, col. 189.]
I think that throws a little light on the subject, because that means, where possible, the values are to agree and to be completed at the same time. What is the result? It seems to me there is a great difference in valuing for Estate Duty purposes and for the new Land Duties. It is obvious that in valuing for the new land duties the owner must in self-protection, put upon those hereditaments valued the highest commercial value in the market. It is in his own interest and he must do so unless he is to be charged Increment Duty in the future. If a man includes farm buildings, enlarges them, and makes them more suitable, and yet does not raise the rent he gets no more out of the property annually, and therefore should not be called on to pay any more Estate Duty. But, on the other hand, if these improvements are to be valued separately for Land Value Duties, it is necessary to take into account the money spent on bricks and mortar, although producing no interest on that money, and therefore the whole tendency of taking the land valuation for Estate Duty is to discourage estate owners from improving their property while not getting full interest. That has been done in a great many cases. Many good landlords have spent a lot of money on improving their property without increasing their incomes by so doing, and there could be no better way of stopping that process than by valuing bricks and mortar for Estate Duty purposes, as they are valued for increment purposes. I entirely contradict the argument of the hon. Member who last spoke. His desire was to impose a heavy tax on the owner who did not make the best use of his property, but that very owner is being let off taxation, while the man who makes the best use is having it imposed upon him. If this owner making improvements also charges for them in rent, thereby increasing his income, and setting aside a sinking fund, he will pay the Estate Duty. On the other hand, if a man, instead of improving his property, lets it run down, the Increment Value Duty will suit him better because the value of the property is lower. Therefore, if the valuation for the purpose of Land Value Duty is taken, and not the valuation for estate purposes duty, you are benefiting the man who allows his property to run down, and you are imposing an extra duty on the man who improves his property.

I submit that the rental assessment is the right assessment for Estate Duty purposes. There is no inconsistency consequently between there being two different valuations for two different purposes: there is no inconsistency in this sense when the Death Duty and the Estate Duty valuation is lower than the valuation for Increment Duty purposes. Where the position is reversed, and where the Death Duty valuation is higher than the increment valuation, there is, of course, an inconsistency. It is only when the full income which might be derived from the property is not being derived from it that the lower valuation for Death Duty purposes is perfectly permissible. I hope the Chancellor of the Exchequer will see that agricultural properties shall be valued on the same basis as before 1909, and that is on a rental basis.

There seems to be some inconsistency on the part of hon. Members opposite. It has been argued, in one instance, that the valuation has been put too low, and now they are arguing that it is being put too high. What is meant by the Amendment which has been moved? The Amendment itself proposes two things: that there shall be no separate unit for the purposes of valuation, and, secondly, that the amount assessed under the Income Tax Schedule shall be the basis of calculation. I notice that the right hon. Gentleman the Member for East Worcestershire emphasised the fact that, for the purposes of this valuation, it was not proposed to take a specific number of years. May I ask the hon. Member who moved the Amendment what is the object of that Amendment? As it stands now it proposes to lay down, as a basis of valuation, the Income Tax assessment, and, if the Income Tax assessment is taken as the basis of valuation, and if no particular number of years is to be taken, then I am wondering why the hon. Member is pressing his Amendment. I conclude the only possible reason is that he knows that the assessment for Income Tax of agricultural land in this country——

May I interpose. I do not desire to press the Amendment after what the Chancellor of the Exchequer has said. He has undertaken to make inquiry, and, pending that inquiry, it is quite obvious that this matter cannot be decided. Under the circumstances I shall ask leave to withdraw the Amendment.

The only obvious reason for pressing the Amendment at all, is making the Income Tax assessment valuation applicable to cases where the assessment of agricultural land is really lower than agricultural values. That must be the object of the Amendment. If the valuation of agricultural land in future is to depend on Income Tax assessment, and not upon its real annual value, the result will be that the estate will be undervalued and the Government will lose.

I ask leave to withdraw the Amendment, and to substitute for it the words which have been read out by the Chancellor of the Exchequer and myself.

Division No. 445.]

AYES.

[7.28 p.m.

Abraham, William (Dublin Harbour)Clough, WilliamHarvey, T. E. (Leeds, W.)
Acland, Francis DykeCoates, Major Sir Edward FeethamHaslam, James (Derbyshire)
Addison, Dr. C.Compton-Rickett, Rt. Hon. Sir J.Haslam, Lewis (Monmouth)
Allen, Charles P. (Stroud)Condon, Thomas JosephHavelock-Allan, Sir Henry
Anson, Rt. Hon. Sir William R.Cornwall, Sir Edwin A.Haworth, Sir Arthur A.
Anstruther-Gray, Major WilliamCotton, William FrancisHayden, John Patrick
Astor, WaldorfCraig, Norman (Kent, Thanet)Hayward, Evan
Baird, J. L.Crawshay-Williams, EliotHelme, Norval Watson
Baker, H. T. (Accrington)Croft, H. P.Helmsley, Viscount
Baker, Joseph A. (Finsbury, E.)Crumley, PatrickHenderson, Major H. (Berks, Abingdon)
Baldwin, StanleyDavies, E. William (Eifion)Henderson, J. M. (Aberdeen, W.)
Banbury, Sir Frederick GeorgeDawes, J. A.Henry, Sir Charles
Banner, John S. Harmood-De Forest, BaronHigham, John Sharp
Barlow, Sir John Emmott (Somerset)Denniss, E. R. B.Hills, John Waller (Durham)
Barlow, Montague (Salford, South)Dixon, Charles HarveyHinds, John
Barran, Sir J. (Hawick)Doris, W.Hobhouse, Rt. Hon. Charles E. H.
Barrie, H. T. (Londonderry, N.)Doughty, Sir GeorgeHodge, John
Bathurst, Hon. A. B. (Glouc., E.)Du Cros, Arthur PhilipHope, Harry (Bute)
Bathurst, Charles (Wilton)Duke, Henry EdwardHoward, Hon. Geoffrey
Beach, Hon. Michael Hugh HicksEdwards, Clement (Glamorgan, E.)Hughes, S. L.
Beauchamp, Sir EdwardEdwards, Enoch (Hanley)Hume-Williams, William Ellis
Beck, Arthur CecilElibank, Rt. Hon. Master ofIngieby, Holcombe
Benn, Ion Hamilton (Greenwich)Essex, Richard WalterIsaacs, Rt. Hon. Sir Rufus
Benn, W. W. (T. H'mts., St. George)Esslemont, George BirnieJardine, E. (Somerset, E.)
Bentham, George JacksonEyres-Monsell, B. M.Jones, Edgar (Merthyr Tydvil)
Bentinck, Lord H. Cavendish-Falconer, J.Jones, H. Haydn (Merioneth)
Beresford, Lord C.Fell, ArthurJones, Leif Stratten (Notts, Rushcliffe)
Bethell, Sir John HenryFerens, T. R.Jones, William (Carnarvonshire)
Bigland, AlfredFiennes, Hon. Eustace EdwardJones, W. S. Glyn- (T. H'mts., Stepney)
Bird, A.Finlay, Rt. Hon. Sir RobertKeating, M.
Black, Arthur W.Fletcher, John Samuel (Hampstead)Kellaway, Frederick George
Boyle, W. Lewis (Norfolk, Mid.)Foster, Philip StaveleyKennedy, Vincent Paul
Boyton, JamesGardner, ErnestKerry, Earl of
Brassey, H. Leonard CampbellGelder, Sir William AlfredKirkwood, J. H. M.
Bridgeman, W. CliveGeorge, Rt. Hon. D. LloydKnight, Captain E. A.
Brunner, J. F. L.Gibbs, G. A.Lambert, George (Devon, S. Molton)
Bryce, J. AnnanGibson, Sir James PuckeringLarmor, Sir J.
Bull, Sir William JamesGill, A. H.Law, Hugh A. (Donegal, West)
Burke, E. Haviland-Gilmour, Captain J.Lawson, Sir W. (Cumb'rld, Cockerm'th)
Burn, Col. C. R.Gladstone, W. G. C.Levy, Sir Maurice
Burns, Rt. Hon. JohnGoldman, C. S.Lloyd, George Ambrose
Burt, Rt. Hon. ThomasGoldsmith, FrankLocker-Lampson, G. (Salisbury)
Butcher, J. G.Gordon, Hon. John Edward (Brighton)Lonsdale, Sir John Brownlee
Buxton, Rt. Hon. S. C. (Poplar)Goulding, E. A.Lowther, Claude (Cumberland, Eskdale)
Eyles, Sir William PollardGreene, Walter RaymondLundon, T.
Cameron, RobertGreig, Colonel J. W.Lynch, Arthur Alfred
Campion, W. R.Gretton, JohnLyttelton, Rt. Hon. A. (S. Geo., Han. S.)
Carlile, Sir Edward HildredGrey, Rt. Hon. Sir EdwardMacCaw, William J. MacGeagh
Carr-Gomm, H. W.Griffith, Ellis JonesMacdonald, J. M. (Falkirk, Burghs)
Cassel, FelixGuest, Hon. Frederick E. (Dorset, E.)Mackinder, Halford J.
Castlereagh, ViscountGuinness, Hon. Walter EdwardMacpherson, James Ian
Cave, GeorgeHackett, J.M'Callum, John M.
Cawley, Sir Frederick (Prestwich)Haddock, George B.M'Curdy, C. A.
Cawley, Harold T. (Heywood)Hamersley, A. St. GeorgeMcKenna, Rt. Hon. Reginald
Cecil, Lord R. (Herts, Hitchin)Hancock, J. G.M'Laren, Hon. H. D. (Leics.)
Chaloner, Col. R. G. W.Harcourt, Rt. Hon. L. (Rossendale)M'Laren, Hon. F. W. S. (Lincs., Spalding)
Chamberlain, Rt. Hon. J. A. (Worc'r.)Harcourt, Robert V. (Montrose)M'Micking, Major Gilbert
Chaplin, Rt. Hon. HenryHarris, Henry PercyMagnus, Sir Philip
Chapple, Dr. W. A.Harvey, A. G. C. (Rochdale)Malcolm, Ian

The original Amendment which I moved covers the Amendment which it is now proposed to substitute for it.

Question put, "That the Clause be read a second time."

The House divided: Ayes, 283; Noes, 31.

Markham, Sir Arthur BasilRadford, G. H.Swift, Rigby
Marks, Sir George CroydonRawlinson, John Frederick PeelSykes, Alan John (Ches., Knutsford)
Marshall, Arthur HaroldRea, Walter Russell (Scarborough)Sykes, Mark (Hull, Central)
Mason, James F. (Windsor)Reddy, MichaelTalbot, Lord Edmund
Masterman, C. F. G.Redmond, John E. (Waterford)Terrell, George (Wilts, N. W.)
Meehan, Francis E. (Leitrim, N.)Remnant, James FarquharsonThompson, Robert (Belfast, North)
Meehan, Patrick A. (Queen's Co.)Rendall, AthelstanThomson, W. Mitchell- (Down, N.)
Menzies, Sir WalterRichardson, Albion (Peckham)Thorne, G. R. (Wolverhampton)
Montagu, Hon. E. S.Roberts, Charles H. (Lincoln)Thynne, Lord Alexander
Morrison-Bell, Major A. C. (Honiton)Robertson, Sir C. Scott (Bradford)Tobin, Alfred Aspinall
Munro, R.Robertson, John M. (Tyneside)Toulmin, Sir George
Murray, Captain Hon. A. C.Roch, Walter F. (Pembroke)Trevelyan, Charles Philips
Needham, Christopher T.Roe, Sir ThomasTryon, Captain George Clement
Newman, John R. P.Rolleston, Sir JohnTullibardine, Marquess of
Nicholson, Wm, G. (Petersfield)Rothschild, Lionel deValentia, Viscount
Nolan, JosephRowlands, JamesWalker, Colonel William Hall
Norton, Capt. Cecil W.Rowntree, ArnoldWalters, John Tudor
O'Brien, Patrick (Kilkenny)Royds, EdmundWard, Arnold (Herts, Watford)
O'Connor, John (Kildare, N.)Rutherford, John (Lancs., Darwen)Ward, W. Dudley (Southampton)
O'Connor, T. P. (Liverpool)Salter, Arthur ClavellWardle, George J.
O'Dowd, JohnSamuel, Sir Harry (Norwood)Wason, Rt. Hon. E. (Clackmannan)
Ogden, FredSamuel, Rt. Hon. H. L. (Cleveland)Wason, John Cathcart (Orkney)
O'Malley, WilliamSanders, Robert A.Webb, H.
Orde-Powlett, Hon. W. G. A.Sanderson, LancelotWhite, Patrick (Meath, North)
O'Shee, James JohnSandys, G. J. (Somerset, Wells)Williams, Penry (Middlesbrough)
Palmer, Godfrey MarkScanlan, ThomasWilloughby, Major Hon. Claud
Pearson, Hon. Weetman H. M.Sherwell, Arthur JamesWood, Rt. Hon. T. McKinnon (Glas.)
Pease, Herbert Pike (Darlington)Shortt, EdwardWorthington-Evans, L.
Pease, Rt. Hon. Joseph A. (Rotherham)Smith, Harold (Warrington)Yate, Colonel C. E.
Peel, Capt. R. F. (Woodbridge)Spicer, Sir AlbertYoung, William (Perth, East)
Peel, Hon. W. R. W. (Taunton)Stanier, BevilleYounger, Sir George
Ponsonby, Arthur A. W. H.Starkey, John RalphYoxall, Sir James Henry
Power, Patrick JosephStaveley-Hill, Henry
Pretyman, E. G.Stewart, Gershom
Priestley, Sir W. E. B. (Bradford, E.)Strauss, Arthur (Paddington, North)

TELLERS FOR THE AYES.—Mr. Illingworth and Mr. Gulland.

Primrose, Hon. Neil JamesStrauss, Edward A. (Southwark, West)
Pryce-Jones, Colonel E.Summers, James Woolley

NOES.

Adamson, WilliamJohnson, W.Taylor, John W. (Durham)
Barton, WilliamJowett, F. W.Thomas, J. H. (Derby)
Bowerman, C. W.King, J.Wadsworth, J.
Chancellor, Henry G.Macdonald, J. R. (Leicester)Ward, John (Stoke-upon-Trent)
Clynes, John R.Morrell, PhilipWhite, J. Dundas (Glasgow, Tradeston)
Dalziel, Sir James H. (Kirkcaldy)O'Grady, JamesWilliams, J. (Glamorgan)
Duncan, C. (Barrow-in-Furness)Parker, James (Halifax)Wilson, W. T. (Westhoughton)
Glanville, H. J.Price, C. E. (Edinburgh, Central)
Hall, Frederick (Normanton)Raffan, Peter Wilson
Harvey, W. E. (Derbyshire, N. E.)Richardson, Thomas (Whitehaven)

TELLERS FOR THE NOES.—Mr. Wedgwood and Mr. Watt.

Henderson, Arthur (Durham)Smith, Albert (Lancs., Clitheroe)
Hudson, WalterSutton, J. E.

I beg to move, in the proposed new Clause, to leave out all the words after the word "that" ["It is hereby declared that"], and to insert instead thereof the words "in estimating for the purposes of Sub-section (5) of Section seven of the Finance Act, 1894, the principal value of any agricultural property which comprises cottages occupied by persons employed solely for agricultural purposes in connection with the property, no account shall be taken of any value attributable to the fact that the cottage is suitable for the residential purposes of any persons other than agricultural labourers or workmen on the estate."

I think that these words are very dangerous, and I venture to suggest to my hon. Friends who voted not quite in accordance with their usual principles by a mistake in the last Division —otherwise the numbers would have been considerably more than thirty-one—that they should have an opportunity of knowing what this proposition amounts to. It amounts to this: That if a landlord who manages a great estate has a number of cottages on that estate, and if he lets those cottages or a certain number of them to the labourers employed on the estate, paying them considerably less wages than he ought to do, and giving them practically a portion of the rent in wages, that reduces the cottages that ought to be let to other workmen at 5s. down to 2s. 6d. a week, or to 1s. as the case may be, for the men who are working on the estate—in that case in regard to the Death Duties the value of the cottages is to be based upon the price that is paid by the men actually working on the estate. Any number of cottages may be let to workmen living in the locality who are not employed on the estate but in some other work. If the Amendment is carried the majority of the cottages on the estate may be let at 5s. a week to workmen who do not happen to be employed on the estate and the cottages that are let to the workmen employed on the estate may be paying only 1s. a week, yet the value of the whole of these cottages is to be taken at the price paid by the men actually working on the estate. That is grossly unfair. I am quite prepared to let the hon. and gallant Gentleman opposite (Mr. Pretyman) convince me to the contrary, but if I understand the words which have been read out—I confess I have not seen them, but I have heard them read out three or four times—I venture to say that the last words of this Amendment amount to nothing less than what I have suggested. It says, that "no account shall be taken of any value attributable to the fact that the cottage is suitable for the residential purposes of any persons other than agricultural labourers or workmen in the locality."

It has been altered to "on the estate." If it had been left with the words "in the locality" I could have understood it. You have got another bit of flesh since the Clause was read a second time. If it were to remain "workmen in the locality" instead of "on the estate," then the proposition I am attempting to make would apply. If the English language means anything, and the Clause says that the value of the cottages is to be fixed in accordance with the rent paid by the labourers working on the estate holding those cottages—if I am to understand that, a great deal of my opposition evaporates at once. I understood that the case made by the hon. Gentleman was this: That he did not want the value of a cottage increased simply because someone had taken a fancy to it, and was prepared to pay a big price in rent every year. One can imagine an estate with some hundreds of cottages on it. Not more than ten or a dozen of them would be actually let to workmen on the estate, while some seventy or eighty might be let to other workmen at three times the rent charged to those working on the estate. The right to live in a cottage is part of the wages paid to the labourer on an estate. It would be grossly unfair, when all the cottages might possibly be let at 5s., if the men did not happen to be working on the estate, in the case of a valuation, to decide that the value of the whole of the cottages was the value paid in the particular case of the men who happened to work on the estate. It would be robbing the Revenue. In view of the fact that the hon. Gentleman opposite is so anxious to propose it, and the fact that every time this subject has come up he has nibbled first at one corner of the Chancellor of the Exchequer's proposal and then at another, I think the ease with which the Chancellor gives way to his opponents on one point and then another is remarkable. I have always looked upon the Chancellor of the Exchequer as one who stood to his guns in the face of opposition. So he does until he gets his opponents down. Then he gives them back what he has been fighting for. That is what is happening on this occasion.

I am afraid the hon. Gentleman does not understand the Amendment. Under the first part of the Amendment the cottages can be let merely to labourers working on the estate.

Even then my argument holds good, for the simple reason that if there are two cottages side by side, one occupied by a man working on the estate at a rent of 2s., and the other let to another person not working on the estate for 6s. a week, it is not right that these cottages should be valued differently one from the other. The first cottage would be equally valuable. What has happened is that the man engaged on the estate has agreed to take 4s. a week less wages to make up for the advantage that he gets in his cottage. The landlords are really trying to get an advantage over the rest of the community by the proposal now before the House. Most certainly if it is put to a Division I shall vote against it.

I want to associate myself with the protest made by my hon. Friend against the proposal which, as a matter of fact, is inspired by the Government itself. I believe the effect of the Amendment would be to keep down the wages of employés working on small and large estates alike. I want to register my protest against this premium that is being paid to the wealthy landowners of this country to exploit the labourers employed upon their estates. I wish to call attention to the very different treatment meted out to the wealthy as compared with the unfortunate poor. I have known numbers of cases where aged people have been housed by their relatives, but even in those cases an official of the Government insists upon adding as an item of income, not the cottage rents, which would be charged on estates referred to in this Amendment, but the average rates paid in the village or town in which the applicant lives. Consciously or unconsciously, the Government is being led by the representatives of the landed and vested interests to make a concession which, in my judgment, is not only unjust, but inflicts a very grave injustice, not only upon the Exchequer and the State, but more particularly upon the employés engaged on small and large estates alike, and I shall certainly join with my Friends and vote against this proposal.

I think my hon. Friends have completely misconceived both the purport and the effect of the Amendment. With regard to its purport, the correction, which was interpolated by the hon. Gentleman (Mr. Pretyman), completely disposed of a good deal of the powerful rhetoric of the hon. Member (Mr. John Ward), but when it is suggested that this is an oppression of the poor cottager and labourer it really surpasses my poor Celtic imagination to find out on what ground that is based. It is exactly the opposite. Anyone who knows anything about cottage property in country districts would not embark upon it as a sort of speculation. The theory that rich landlords build cottage property in order to plunder workmen and make huge fortunes out of it, has absolutely nothing to do with the facts of the case. Everyone knows that cottage property is not a speculation. It is a bad investment from the point of view of anyone who tries to secure a percentage on the money which he puts into it. You cannot get good houses. It does not pay the landlords to set them up. It is a distinct loss to the landlord from a pecuniary point of view to do so, and it is really the business of the State not to discourage the landlord who does it, but I go beyond that, and say it is the business of the State to encourage the landlord. If I had my way, I would go far beyond a mere small concession of this kind in the way of encouragement. It will be one of the great problems of the future how the State is to encourage landlords and others, municipal authorities and county councils, to see that there is proper housing accommodation in the villages. I read to a Committee of the House of Commons a short time ago a Report upon some district in Essex as to the conditions of the workman's cottages. That is because very often the landlord cannot afford to set up these cottages, and if you are to say to him that not merely is he to lose money on the transaction but that the better the cottage is the more money he loses and the more you tax him, that is exactly the way to oppress the workman. The greatest oppression of all is to be a workman, not merely at a low wage, but living in a bad house which will inflict physical injury upon him and destroy the health of his family. I am not exaggerating the value of the Amendment, but it has some value. It is some encouragement to the landlord to erect cottages. Talk about encouraging rich landlords, it is an encouragement not to the rich but to the good landlords. The worse a landlord is the less he will get out of this. The better he is the more he will get out of it.

I think the Chancellor of the Exchequer has got rather far away from the actual Amendment. The Amendment is that where a landlord lets a 5s. house for 1s. 6d. he shall benefit. I do not think that man ought to benefit, and I do not believe any Liberal economist would say the State ought to give an advantage to people who let 5s. houses at charity rents. See what the first result will be. Take any landlord who knows that the Amendment has been carried and understands how far-reaching it is. He has, at present, houses on his estate let at 4s. or 5s. a week to the people who work on the estate, who are paid 20s. a week. That man, if he desires to get the benefit of the Act, will immediately reduce the rent of his houses to his own men from 5s. to 1s. and reduce their wages from 20s. to 16s. The men will be exactly as well off after the change as before. The landlord will have the advantage that when Death Duties are levied lower duties will be levied upon him. Further than that, the very fact that he is able to reduce the wages of his labourers from 20s. to 16s., without hurting the labourers, it is true, has a bad effect on wages throughout the district, and they are cut down. The way to get houses for the people at reasonable rents is not to give an inducement to the landlord to let houses at charity rents to their own employés. This Amendment is confined to agricultural labourers and those employed upon the estate. If he chooses to let his houses at charity rents he will have smaller Death Duties to pay. I do not think anybody who knows what the difficulty is of getting houses in our country districts wants to encourage landlords to let houses at 1s. or 1s. 6d. a week. We want to have full living wages and economic rents, and I protest against the Amendment being carried.

Division No. 446.]

AYES.

[7.55 p.m.

Abraham, William (Dublin Harbour)Furness, Stephen W.Magnus, Sir Philip
Acland, Francis DykeGardner, ErnestMalcolm, Ian
Addison, Dr. ChristopherGelder, Sir W. A.Markham, Sir Arthur Basil
Allen, A. A. (Dumbartonshire)George, Rt. Hon. D. LloydMarks, Sir George Croydon
Allen, Charles Peter (Stroud)Gibbs, George AbrahamMarshall, Arthur Harold
Astor, WaldorfGibson, Sir James PuckeringMason, James F. (Windsor)
Baker, H. T. (Accrington)Gilmour, Captain JohnMasterman, C. F. G.
Baker, Joseph Allen (Finsbury, E.)Gladstone, W. G. C.Meehan, Francis E. (Leitrim, N.)
Baldwin, StanleyGoldman, C. S.Meehan, Patrick A. (Queen's Co.)
Barlow, Sir John Emmott (Somerset)Goldsmith, FrankMenzies, Sir Walter
Barlow, Montague (Salford, South)Gordon, Hon. John Edward (Brighton)Montagu, Hon. E. S.
Barran, Sir J. N. (Hawick)Goulding, Edward AlfredMurray, Captain Hon. Arthur C.
Barrie, H. T. (Londonderry, N.)Greene, Walter RaymondNewdegate, F. A.
Barton, W.Grey, Rt. Hon. Sir EdwardNewman, John R. P.
Bathurst, Charles (Wilts, Wilton)Griffith, Ellis J.Nicholson, William G. (Petersfield)
Beach, Hon. Michael Hugh HicksGuest, Hon. Frederick E. (Dorset, E.)Nolan, Joseph
Benn, W. (Tower Hamlets, St. Geo.)Guinness, Hon. Walter EdwardNorton, Captain Cecil W.
Bentham, G. J.Hackett, J.O'Brien, Patrick (Kilkenny)
Bigland, AlfredHamersley, Alfred St. GeorgeO'Connor, John (Kildare, N.)
Black, Arthur W.Harcourt, Rt. Hon. L. (Rossendale)O'Connor, T. P. (Liverpool)
Boyle, W. Lewis (Norfolk, Mid.)Harcourt, Robert V. (Montrose)O'Doherty, Philip
Boyton, JamesHarris, Henry PercyOgden, Fred
Bridgeman, W. CliveHarvey, A. G. C. (Rochdale)O'Malley, William
Brunner, John F. L.Harvey T. E. (Leeds, W.)Orde-Powlett, Hon. William
Bryce, J. AnnanHaslam, Lewis (Monmouth)O'Shee, James John
Bull, Sir William JamesHavelock-Allan, Sir HenryPease, Herbert Pike (Darlington)
Burke, E. Haviland-Haworth, Sir Arthur A.Pease, Rt. Hon. Joseph A. (Rotherham)
Burn, Colonel C. R.Hayward, EvanPeel, Hon. W. R. W. (Taunton)
Burns, Rt. Hon. JohnHelme, Norval WatsonPonsonby, Arthur A. W. H.
Burt, Rt. Hon. ThomasHelmsley, ViscountPower, Patrick Joseph
Buxton, Rt. Hon. S. C. (Poplar)Henderson, Major H. (Berkshire)Pretyman, Ernest George
Cameron, RobertHenderson, J. M. (Aberdeen, W.)Priestley, Sir W. E. B. (Bradford, E.)
Campion, W. R.Henry, Sir Charles S.Pryce-Jones, Col. E.
Carlile, Sir Edward HildredHobhouse, Rt. Hon. Charles E. H.Radford, George Heynes
Cassel, FelixHolt, Richard DurningRawlinson, John Frederick Peel
Cave, GeorgeHope, Harry (Bute)Rea, Walter Russell (Scarborough)
Cawley, Sir Frederick (Prestwich)Horne, C. Silvester (Ipswich)Reddy, Michael
Cawley, H. T. (Lancs., Heywood)Howard, Hon. GeoffreyRedmond, John E. (Waterford)
Cecil, Lord R. (Herts, Hitchin)Hughes, Spencer LeighRemnant, James Farquharson
Chaloner, Colonel R. G. W.Hunt, RowlandRichardson, Albion (Peckham)
Chamberlain, Rt. Hon. J. A. (Worc'r)Ingleby, HolcombeRobertson, Sir G. Scott (Bradford)
Chapple, Dr. William AllenIsaacs, Rt. Hon. Sir RufusRobertson, J. M. (Tyneside)
Clough, WilliamJardine, Ernest (Somerset, E.)Roch, Walter F. (Pembroke)
Coates, Major Sir Edward FeethamJones, Edgar R. (Merthyr Tydvil)Roe, Sir Thomas
Compton-Rickett, Rt. Hon. Sir J.Jones, H. Haydn (Merioneth)Rolleston, Sir John
Condon, Thomas JosephJones, Leif Stratten (Notts, Rushcliffe)Rothschild, Lionel de
Cornwall, Sir Edwin A.Jones, William (Carnarvonshire)Royds, Edmund
Cotton, William FrancisKeating, MatthewRutherford, John (Lancs., Darwen)
Craig, Norman (Kent, Thanet)Kellaway, Frederick GeorgeSalter, Arthur Clavell
Crawshay-William, EliotKerry, Earl ofSamuel, Rt. Hon. H. L. (Cleveland)
Crumley, PatrickKing, Joseph (Somerset, North)Sanders, Robert A.
Davies, Ellis William (Eifion)Kirkwood, John H. M.Sanderson, Lancelot
Dawes, J. A.Knight, Captain Eric AyshfordSandys, G. J. (Somerset, Wells)
Denniss, E. R. B.Lambert, George (Devon, Molton)Scanlan, Thomas
Dixon, Charles HarveyLarmor, Sir J.Seely, Colonel Rt. Hon. J. E. B.
Doris, WilliamLaw, Hugh A. (Donegal, West)Sherwell, Arthur James
Doughty, Sir GeorgeLevy, Sir MauriceShortt, Edward
Du Cros, Arthur PhilipLonsdale, Sir John BrowniceSmith, Harold (Warrington)
Duke, Henry EdwardLundon, ThomasSpicer, Sir Albert
Edwards, Clement (Glamorgan, E.)Lynch, Arthur AlfredStanier, Beville
Elibank, Rt. Hon. Master ofLyttelton, Rt. Hon. A. (S. Geo. Han. S.)Starkey, John Ralph
Elverston, Sir HaroldMacCaw, William J. MacGeaghStaveley-Hill, Henry
Essex, Richard WalterMacdonald, J. M. (Falkirk Burghs)Stewart, Gershom
Esslemont, George BirnieMackinder, Halford J.Strauss, Arthur (Paddington, North)
Eyres-Monsell, Bolton M.Macmaster, DonaldSummers, James Woolley
Falconer, J.Macpherson, James IanSwift, Rigby
Fell, ArthurM'Callum, John M.Sykes, Alan John (Ches., Knutsford)
Ferens, Thomas RobinsonM'Curdy, Charles AlbertTalbot, Lord Edmund
Ffrench, PeterMcKenna, Rt. Hon. ReginaldTennant, Harold John
Fiennes, Hon. Eustace EdwardM'Laren, Hon. H. D. (Leics.)Terrell, George (Wilts, N. W.)
Fletcher, John Samuel (Hampstead)M'Laren, Hon. F. W. S. (Lincs., Spalding)Thompson, Robert (Belfast, North)
Foster, Philip StaveleyM'Micking, Major GilbertThorne, G. R. (Wolverhampton)

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

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

The House divided: Ayes, 236; Noes, 42.

Thynne, Lord AlexanderWebb, H.Yate, Col. C. E.
Tobin, Alfred AspinallWhite, Major G. D. (Lancs, Southport)Young, William (Perth, East)
Toulmin, Sir GeorgeWhite, Patrick (Meath, North)Younger, Sir George
Tullibardine, Marquess ofWilliams, Penry (Middlesbrough)Yoxall, Sir James Henry
Valentia, ViscountWilloughby, Major Hon. Claud
Walker, Colonel William HallWilson, Hon. G. G. (Hull, W.)

TELLERS FOR THE AYES.—Mr. Illingworth and Mr. Gulland.

Ward, Arnold (Herts, Watford)Wood, Rt. Hon. T. McKinnon (Glas.)
Ward, W. Dudley (Southampton)Worthington-Evans, L.

NOES.

Adamson, WilliamHinds, JohnRowlands, James
Bowerman, C. W.Hodge, JohnSmith, Albert (Lancs., Clitheroe)
Byles, Sir William PollardHudson, WalterSutton, John E.
Chancellor, Henry GeorgeJohnson, W.Taylor, John W. (Durham)
Clynes, John R.Jowett, Frederick WilliamThomas, J. H. (Derby)
Duncan, C. (Barrow-in-Furness)Lansbury, GeorgeWadsworth, John
Edwards, Enoch (Hanley)Lawson, Sir W. (Cumb'rld., Cockerm'th)Ward, John (Stoke-upon-Trent)
Gill, A. H.Macdonald, J. Ramsay (Leicester)Wardle, George J.
Glanville, H. J.Morrell, PhilipWedgwood, Josiah C.
Hall, Frederick (Normanton)Needham, Christopher T.White, J. Dundas (Glasgow, Tradeston)
Hancock, John G.O'Grady, JamesWilliams, John (Glamorgan)
Harvey, W. E. (Derbyshire, N. E.)Parker, James (Halifax)Wilson, W. T. (Westhoughton)
Haslam, James (Derbyshire)Price, C. E. (Edinburgh, Central)
Henderson, Arthur (Durham)Raffan, Peter Wilson

TELLERS FOR THE NOES.—Mr. T. Richardson and Mr. Watt.

Higham, John SharpRendall, Athelstan

Question, "That the Clause, as amended, be added to the Bill," put, and agreed to.

Timber

"Where an estate, in respect of which Estate Duty is payable on the death of a person dying on or after the thirtieth day of April, nineteen hundred and nine, comprises land on which timber, trees, wood, or underwood are growing, the value of such timber, trees, wood, or underwood shall not be taken into account in estimating the principal value of the estate or the rate of Estate Duty, and Estate Duty shall not be payable thereon, but shall, at the rate due to the principal value of the estate be payable on the net moneys (if any) after deducting all necessary outgoings since the death of the deceased, which may from time to time be received from the sale of timber, trees, or wood when felled during the period which may elapse until the land, on the death of some other person, again becomes liable or would but for this Sub-section have become liable to Estate Duty, and the owners or trustees of such land shall account for and pay the same accordingly as and when such moneys are received, with interest at the rate of three per centum per annum from the date when such moneys are received.

"This Section shall take effect in substitution for Sub-section five of Section sixty-one of the Finance (1909–10) Act, 1910."

This Clause deals with the valuation of timber for Death Duties. We have had some debates on this matter on previous occasions. The Clause divides itself into two parts. The first part deals with the particular case of hardship of persons who died between 30th April, 1909, and the date of the passing of the Finance Act. The estates of those persons became liable to the new scale of duty, and, owing to the drafting of the Act, they were liable to pay duty at once, instead of having the benefit of the provision of the Act, which deferred payment of the duty until the timber was sold. Therefore they were obviously put in an unintended position of great hardship, and this Clause would have the effect of removing that hardship and putting them in the same position as the estates of persons who died since the passing of the Act. It gives no special favour to anybody. It merely assimilates the position for that period to the position now. I understand the Chancellor of the Exchequer is willing to accept that part of the Clause, and that he has words which will carry the proposal into effect. There may be some technical difficulty in inserting the words of my Clause, but I will leave to the Government to propose words to be inserted in place of those in the Clause which I move. I am sure that no hon. Member below the Gangway would for a moment desire that persons who died in that particular twelve months should be subjected to a special disability not intended to be inflicted by the Act itself, but merely by a mischance in the matter of drafting.

I come to the main point of the Clause which deals with the method of the valuation of timber for Death Duties. It is enacted by the Act that timber is to be valued for Death Duties separately from the land, and that the value of the timber is to be added to the value of the land by the process of aggregation, and become with the land the total value of the estate. But so far as regards the portion of the total value which is the value of the timber, payment upon it is deferred until the timber is actually sold. When the timber is sold the duty is to be paid at the same rate as upon the whole estate, and that payment is not only upon the value of the timber at the time of the death, but upon the increased value which the timber has obtained by growth since the death took place. In a previous Debate on this question the Chancellor of the Exchequer stated that the object of the Amendment was to give some relief from the previous state of things. I think when the Secretary to the Treasury gives his mind to this question he will see that there is really no relief. On the contrary, the position which existed before the Act as to timber is aggravated. Timber is under the law agricultural property. I think nobody will contradict that. Timber before came within the twenty-five years' limit, and therefore where an estate was up to the twenty-five years' limit there was no separate valuation of timber at all. Where an estate did not come up to the twenty-five years' limit, there was a valuation of timber, and timber was aggregated with the rest of the estate. I believe it was not a true timber valuation. It was taken on a percentage of the annual value on a sale of the wood. That is a matter that can be ascertained. I have no accurate knowledge on that point, but I am inclined to think that that was the method adopted.

What happens now is that the valuation for timber is taken on the basis—I think I am quite accurate, but the right hon. Gentleman will correct me if I am wrong—which obtains in some parts of the country on purchasing. Supposing a property is for sale a certain price is fixed for the property as a whole, and timber is, in addition, to be taken at a valuation. That is the method of sale, and though not very common, it is one which is well known, and certainly does occur in practice. But in that method the valuation of timber is really valued twice, because, first of all, the land is not valued as though denuded. That is a point of some importance, because the Chancellor of the Exchequer was apparently under the impression that if an Amendment of this character were accepted, it would mean that the land was to be valued as though denuded of timber. That is not the intention of the Amendment at all, and I do not think it would have that effect. Let us take the case of a residential property of some 500 acres in the Surrey hills which is nicely timbered. That property has a residential value of £60 or £70 an acre. Some of it has beautiful ornamental timber, and if you were to divest the property of the timber and give the value of the property as bare land, you would reduce the value to £30 an acre. I do not make any such suggestion. When this matter was debated recently the Chancellor of the Exchequer appeared to be under the impression that the Amendment would involve the taking of the value of the land as bare land after stripping it of the timber. I do not desire that. What the Clause is intended to enact, and what I believe it would enact, is that you should merely take the value of the land as it would sell in the market as it stands, including the value of the timber on it as a residential property. The valuation would include the amenity value of the timber. This is a very difficult matter I know, but I think I am right in stating that the value of the timber referred to in the Act, and in the new Clause, is quite clearly the timber value pure and simple. Trees have two values—the timber value and the amenity value, and what is dealt with in the Clause is the timber value and not the amenity value at all. I am willing that words should be inserted so that the land should be valued as the value in the open market, not taking into account the special timber value, but taking the property as it stands with the trees upon it. I should be the last to suggest that the owner of that land should be able to ask that the value of it should be the value as a cleared site with the value of the timber removed from it. I think we have to treat timber clearly as timber value, and I claim the sympathy of the whole House in the demand that those who plant timber should have equal treatment with those who buy pictures and things which have an artistic or scientific interest. Men sometimes put their money in china, pictures, old furniture, or anything which has a scientific, artistic, or historic interest. We have a Clause in this very Finance Bill which enormously improves the position of those people. This Bill provides that the word "artistic" is to be read into the Clause, and things with artistic value of which any person dies possessed, whether settled or not settled, are as regards Succession and Estate Duties to be exempt. They are not aggregated as estate in any shape or form.

Say there are two persons of equal wealth, each worth £100,000. One collects artistic objects, pictures, china, and handsome furniture, which has an artistic value, and has these up to £20,000. He dies, and his estate is valued, minus all those objects of art. Not one single penny of that is taken into account, and his estate is only valued at £80,000, and duty would be paid only on that amount. But if at a subsequent date any of those objects are sold by his successor, duty would then be paid on their value, at the rate due to £80,000. All that I ask is that the timber value of standing trees should be treated on exactly the same basis. Which is the greater value to the nation, ornamental timber standing in the hedges, parks, or different parts of the country, or pictures and objects of artistic merit which are shut up in houses? To my mind there is no comparison. The nation derives more enjoyment from ornamental timber throughout the country than from objects of artistic merit. What would be the effect on our climate if, following this Act, the timber was cut down? I am quite sure that hon. Gentlemen do not realise what the effect of the present Clause as it stands is. I cannot believe that if the subject were really understood by the House they would refuse to make this Amendment.

The second case is the man with £100,000 who, instead of putting £20,000 into pictures, puts it into plantations and employs labour to do it. Hon. Gentlemen opposite will admit that one of the subjects which they are most fond of referring to on platforms in the country is an increase of afforestation and State schemes have been proposed with this object. Surely it is more economical and wiser for the State to encourage those who are in a position to carry out such afforestation work upon their estates, at considerable trouble and sacrifice of revenue, than to spend enormous sums planting large areas, many of them very unsuitable for afforestation. The same should apply, suppose that this owner of land who dies and leaves £20,000 worth of timber value on his estate, as applies in the case of objects of artistic merit, and if his successor cuts down a tree and sells it let him pay the duty just the same as the man who sells the picture. But I say to take that £20,000 and aggregate that with the remainder of the property and increase the whole rate 1 per cent. on the remainder of the property because the man has planted trees when you do not increase a farthing on the man who buys pictures is grossly unfair as between those two classes. I do not ask for any favour for the owners of land, but purely on national grounds I appeal to hon. Members in all parts of the House. If a man has got pictures and shuts the door on them he can prevent other people from enjoying them, but if he has got trees he cannot prevent other people from enjoying them. No man can plant a tree and allow it to grow without benefiting others as well as himself. On that ground, which is really unanswerable, I ask that the Amendment should be accepted. The effect is simply to give exactly the same treatment to the planters of timber as is now given to the owners of pictures and objects of artistic merit. I should be inclined to ask on national grounds for better treatment, but I do not ask for better treatment. I only ask for equal treatment, and I feel perfectly certain that the right hon. Gentleman cannot in fairness, on national grounds, refuse this concession.

I desire to support the Clause moved by my hon. Friend. Timber, or rather the want of timber, is a subject more connected with rural depopulation than almost anything else in my part of the country. I do not want to make a personal attack upon the Chancellor of the Exchequer, but the right hon. Gentleman has helped to put down the planting of timber, and I only hope he will help it up again. He has expressed a great deal of sympathy with and taken more interest in the question than I think any other Chancellor of the Exchequer. At the same time, quite unconsciously—I do not think he wished to do it—he has done more harm to timber plantation by the last Budget than was ever done before. The hon. Gentleman who has last spoken comes from a wealthy part of the country where they can afford possibly to have ornamental timber, and he was thinking of the artistic side of the case. But I come from Scotland, where we plant absolutely from the commercial point of view, which I think is very much more important when considering the employment that will be given to the country. In my part of the country, if you want commercial timber, it has got to be grown in very big lots, and therefore as a rule on biggish estates. Estates are very much bigger in Scotland because the land is very much poorer, and an estate worth £5,000 a year there would be perhaps ten times the size of an estate worth £5,000 a year here. The land is very much poorer, and almost the only or the best use that it can be put to, if the altitude and other things are correct, is growing timber. On these estates after the risings of 1745 and towards the end of the eighteenth century, landlords were beginning to realise modern economic ideas as to their duty to the people on these estates. The result was that they borrowed very large sums of money and spent them in improving their estates and in many cases planting.

Probably when it amounted to £2,000 or £3,000 they would not only be able to pay off the debt, but have very much more valuable properties. Things moved tremendously in the seventies, and the landlords thought these things were going to continue. They may have been stupid, possibly, in not having a sinking fund instead of putting the money back into the land and improving their estate. There is no question of riotous living; the money was put back during the boom, and, instead of its continuing, there was a slump, and at the present moment owners of estates find a very great difficulty in paying off mortgages and paying the duties on their estates. Every single tax that comes on such estates means that there is greater difficulty in developing them or in maintaining the present state of development, of which planting is one of the principal features. Take two estates of absolutely the same value, one with a little bit of agricultural land, and little bit of moorland behind. The hon. Member for New-castle-under-Lyme (Mr. Wedgwood) spoke of screwing up the estates, but the very estates that are pushed up in value are being hammered under this Clause of the Finance Bill. The value of the two estates which I take for the sake of illustration, is, say, £60,000 each. In each case the 7 per cent. Death Duty would amount to £4,200. One landlord may have possibly established small holdings on part of his estate. In the case of the second estate, it may be divided into two or three big farms, or a deer forest. I mention deer forests because deer forests are not very popular among hon. Members opposite.

The result of that is that an injustice is done in the case of the first estate when the owner dies, and the estate is valued for Death Duties. The Chancellor of the Exchequer or his myrmidions in my part of the world take the whole of the timber, and put it on one side to value it. Having valued it separately, they put it back to the estate, and the two aggregated make a higher value. It would be quite easy to have timber worth £200,000, and that would immediately bring the simple value of the estate to £260,000 under the aggregation, although the owner might never possibly enjoy the result of that value. He would pay 11 per cent. on that total, making £28,600 instead of £4,200. Taking the timber away from the aggregation the actual land itself, in the case of the good landlord, would be liable to £6,200, while the estate of the bad landlord would remain at £4,200. That is where the real hardship comes in. By this system of aggregation the agricultural industry is going to be absolutely throttled in that part of the country. I wish to ask one or two questions in respect of this Clause. If you cut the whole of your timber, that is well and good; you have got £200,000 worth on which I have to pay duty. That is not the point I am grumbling about. I do not quite understand whether we pay simply on the value of the timber as it originally was. Supposing instead of £200,000 worth of timber, I cut during lifetime £90,000 worth. That means, of course, that I have enjoyed £90,000, plus the £60,000, making altogether £150,000. You make me pay 11 per cent. on the profits and also the 7 per cent. on the value it had originally, £150,000. You admit that you only want me to pay on the timber that I have enjoyed, and I think you ought to let my successor off the percentage on the £150,000. That would be perfectly fair to both parties. The next injustice is this: The Financial Secretary to the Treasury just now was talking of the absurdity of the idea of trying to come to any conclusion as to what would be the value of the land ten, twenty, thirty, or forty years hence. What will you do about timber? Timber may have gone up in value. I am sure it is perfectly possible. Surely you do not mean us to pay on the value of timber when it is cut. It would be so monstrously unjust that I do not think the Chancellor of the Exchequer entertains the idea.

Certainly, I have to pay on the value of the timber, £200,000. Do you mean to say when I cut that timber twenty years after, when it happens to have gone up in value during my lifetime, that you are going to add to the value of that timber as it was when I succeeded. What happens if I cut a piece of that timber? Supposing I take block B, worth £22,000, are you going to make me pay the whole of my Death Duties on the profits of that block which has been out, or are you going to make me pay any proportion that is due on that block at its value when I succeed? Really, I ought only to pay a very small amount on it, and you are surely not going to make me pay the Death Duties on the whole of my estate, or only a part of it. It could be read that way, but I do not think that is the spirit of the Clause. There is one other point. I wish to know from the right hon. Gentleman if he will tell me the answer to a third question I will put to him. Nothing fluctuates like the price of timber, and I do not see how on earth they can value it. It is very difficult from the timber point of view, though quite easy from the ornamental point of view. If you take the timber point of view, you may have a variety of circumstances sending up the price of wood—such as the Admiralty building "Dreadnoughts," and so on, which would affect the value of timber at the time. Or, you may have an earthquake, such as was experienced at San Francisco, which would put up the value of wood. The value of wood would be higher although a greater proportion of it would not be ready for the market. A slump might come later, and I should never be able to realise the amount put upon my timber. It is very difficult really to arrive at any proper valuation. Then again the valuation is entirely different in various parts of the country.

Just to show how difficult it is to value wood, I am going to give hon. Members the offers I have had for certain blocks of wood last year. Those were made by experts in the trade, wood merchants, and if they were so hopelessly out you may imagine how hopelessly out a valuer would be. I had five offers for one block, the highest being £2,800, and the lowest £2,120, or a difference of £700. That shows how very difficult it is. It all depends on whether the particular wood merchant has a market for the moment. The valuer who came to value might hear of the highest of those prices, and he might value accordingly. For the next lot the highest offer I received was £1,460 and the lowest £840. For the next the highest I received was £2,803, and the lowest, £2,150, and in quite a small little bit of wood that had got a bit damaged there was actually a limit of error of about 33 per cent., the highest offer being £145 10s., and the lowest £103, which shows how extraordinarily hard it is to value wood. My point is that it is a very difficult industry to carry on. We built up the industry with a great deal of trouble, and now, when we are just getting it right, the Chancellor of the Exchequer comes down with these enormously heavy duties. The industry was built up first of all upwards of a hundred years ago, when we knew nothing about it in this country, and we had to buy our experience. Since that we have had a number of gales, a great deal of it has been injured, and we have had fires and diseases. It does not give a good percentage on the money invested, and now, last but not least, we have the Chancellor of the Exchequer with his Death Duties, which will kill off the trade in my opinion.

We are carrying on the industry to a great extent from a patriotic point of view. We have been trying to get people on the land, but all that is going to be impossible if you are going to put on heavy burdens of this sort. The timber is being cut down before the succession, and that the money is being invested in something better somewhere else, and surely you do not want that to happen. If you give the slightest hint that you are going to help it you will see the money put back into the industry, and that will result in putting a great many people on the land. You may have afforestation which would be free of taxes and rent, and that would be another competitor against those who have to pay this tax. We have got to compete against virgin forests abroad in America, and if you are going to continue this aggregate system of Death Duties, you will absolutely destroy the industry. I do hope the Financial Secretary to the Treasury will convey our views to the Chancellor of the Exchequer, and will do what he can to get the views of my hon. and gallant Friend accepted. I am quite well aware that the Financial Secretary probably himself cannot promise anything, and cannot keep a promise. I do not mean it in any sense save that it is impossible for him to give a promise. Last year the Chancellor of the Exchequer showed great sympathy and wept tears, which, if I may say so, were also the tears of another voracious animal. We had no result then, but I hope the right hon. Gentleman will really try to help what is a very useful industry in this country.

We are now only dealing with the fourth new Clause, and I believe there are about seventy new Clauses to be discussed. I think I quite understand the sense in which the Noble Lord said that I could not keep a promise, but he did me the justice as a fellow countryman, of assuming that I should not make a promise which I could not keep. In regard to this matter there are two points. The first is the question of the treatment that ought to be fairly given in case of deaths between the 30th April, 1909, and the 30th April, 1910, in regard to which the Government are perfectly prepared to meet the request of the hon. and gallant Gentleman which seems a perfectly reasonable request. It is not practical to deal with it by Amendment to the Clause which is put down, but there is another Amendment in the name of the hon. Member for Sleaford later on on the Paper which will effect the object he desires. With regard to the other matter, the question of aggregation, that is a matter about which the Government do not see eye to eye with the hon. and gallant Member. I think perhaps it would be convenient if I answered the question put to me by the Noble Lord as to the basis upon which the duty would be levied. He asked me whether you took the value of the timber as it originally was at the time of the inheritance or if you took the price of the timber when cut. The Section of the Act provides that the duties

"shall be payable on the net moneys (if any) after deducting all the necessary outgoings since the death of the deceased which may from time to time be received from the sale of the timber, trees or wood when felled."

On the basis of net moneys received from time to time making allowances for outgoings.

I want to know, is it the value when I succeed or on the growth twenty years afterwards?

I think the basis from which you start is the net moneys which you from time to time receive subject to the deduction of necessary outgoings. Those are the words of the Act. The argument used by the hon. and gallant Gentleman to justify the differentiation of timber from other kinds of property in arriving at the total value and the estimate of the rate of duty was that it was similar to pictures or other objects of art, and that it ought to be treated in the same way; but I think there is a very marked distinction between the two cases. In the case of pictures and objects of art you derive no income from them and you cannot derive any income from them until you sell them, but in the case of timber you do derive income, and duty is put on that income as it is derived.

I do not think it is quite the same. You have a picture, but you cannot sell a piece of it while you can sell part of the wood.

That is fair, because ornamental timber adds to the value of the estate and the price you obtain for it. I cannot see why you should treat timber in arriving at the aggregate value different from any other kind of property. The concession with regard to objects of art was made for the reason that they are not income producing, whereas the growth of timber is income producing.

I thought I had made the point clear. It takes at least eighty years, and often upwards of 100 years, to grow timber, and to all intents and purposes the man who plants it gets no profit out of it.

I am afraid we must differ in opinion. The Government are prepared to meet the case of deaths between April, 1909, and April, 1910, but we are not able to meet the case as regards aggregations.

I am glad the right hon. Gentleman does not see his way to accept the Amendment. I must confess, however, that I did not quite follow his argument in regard to the difference between timber and works of art. I should have been more pleased if he had taken up the position that the exemption of works of art was made by a Tory Government.

I was under the impression that it was in the Estate Duties Act passed by a Conservative Government. The hon. and gallant Member is right. But the exemption of works of art is not the principle. I remember a statement being made by a leading financier, who objected most strongly to the incidence of the Estate Duties on the ground that, while he himself put all his money into industrial concerns on which he was taxed, a relative of his invested an enormous sum in works of art, on which he paid neither duty nor Income Tax. The hon. Member, in moving his Amendment, practically confined his argument to ornamental timber, but I fail to find anything in the Amendment itself limiting the provision in that way. If that is so, his object was to exempt not merely ornamental timber, but all timber. If we exempt anything which at present brings in taxation to the coffers of the Government, we must increase the taxation upon other property. I submit that after the position taken up by the Chancellor of the Exchequer last night the Government should not now be asked to do away with this tax on a certain kind of property. Further, the hon. Member's Amendment is impracticable, and would be unworkable in practice. What does it amount to? The wording is not very clear, but as I read it it means that on the death of the owner of an estate the value of the timber must not be calculated, and that no Death Duty is to be payable upon it until that timber is being sold. If the estate changes hands Estate Duty will be payable, not by the representatives of the deceased, but by the assignees of the estate. I submit that if such a duty was enforced upon those assignees it would hinder rather than facilitate the transfer of land.

I am disappointed that the right hon. Gentleman has not seen fit to reply to that part of my hon. Friend's argument in which was pointed out the very good parallel between timber and works of art. The hon. Member opposite (Mr. Ellis Davies) described a certain investment in a commercial undertaking as one of considerable risk, and, by way of contrast, he seemed to indicate that there was not any considerable risk involved in the cultivation of timber. I know of no species of property that is attended with such considerable risk as is the planting and ownership of timber.

I made my statement on the authority of the Report of the Afforestation Committee, which stated that timber growing in this country could be made to pay, not in eighty, but in forty years.

Assuming the Report of the Afforestation Committee to be correct—and I may say that there is not a single timber expert in the United Kingdom who endorses the view of the Committee in that respect—the Committee pointed out that there is no kind of property, certainly no kind of agricultural property, that is subject to a greater extent to the results of unforeseen events than timber is. Not only does it suffer at times from serious gales, and from still more serious fungoid diseases, but there is a chance of the whole of it being swept away by a serious fire. In addition to that, the successor to such a property would certainly never enjoy any sort of return from the growing part of the timber upon his estate, and it is quite conceivable that he might enjoy no profit whatever from the presence of that timber. In the case of hard-wood trees, at least four generations have to elapse between the time when the timber is planted and the time when money is given in consideration of its sale. In the case of conifers, at least two generations, and in some parts of the United Kingdom, certainly north of the Tweed, three or four generations have to elapse before the timber can be put on the market. That means that on every occasion when the so-called owner of the estate dies there is to be aggregated as part of the estate the value of the timber in respect of which his successor receives no benefit whatever. If the Government are sincere in their desire to put a premium upon the cultivation of timber, if they are anxicus to see afforestation develop with its larger employment of labour, particularly in connection with small holdings—which, by the way, cannot be carried on economically in many parts of the country without employing labour in the woods for a part of the year—surely they must desire to do nothing that would check the tendency on the part of owners to plant timber. The tendency at the present time, as is seen by the result of sales which have taken place during the last three years, is all against the purchase of land largely timbered, and certainly all against present owners continuing the plantation of timber, which has been a feature of estate management in previous days.

I should like in particular to point to the frequent case of a tenant for life under the Settled Lands Acts. That tenant for life is unable, except in the case of what is called a timbered estate—an estate where timber is cut by rotation on the same system as farm crops—to put any of the proceeds of the sale of the timber into his own pocket. In the case of a timbered estate he is able to have one-fourth only of the value of that timber when it is sold, and the rest of it, as my hon. Friend being a lawyer will realise, is treated as capital monies over which he has no control whatever. In the case of ornamental timber, to which my hon. Friend referred, he has no power whatever even to cut such timber, and he derives no possible benefit therefore from its conversion. Surely if this aggregation is defensible at all it is only on the ground that the settlement of landed estates as existing in the country at the present time is materially altered before such aggregations become a part of a system of valuation for the purpose of the Death Duties.

For all these reasons I feel confident that this aggregation is not only calculated to operate most unfairly upon the successors to landed estates throughout the country, but is calculated, above all, to put a discount upon what is regarded from a national point of view as a desirable enterprise, that is, the continuous appropriation of a portion of our large landed estates to the cultivation of timber with a view to its being made, not merely an economic proposition, but of employing the largest number of persons in a most desirable way. There can be no object for any valuation of timber except for the purpose of this aggregation. There can be no object for such an aggregation for undeveloped land value, or for the purpose of Increment Value Duty, in which case the whole land can be reckoned as though the timber did not exist. Therefore the valuation is only to be undertaken for this purpose. It seems to me not only undesirable from a national point of view and unfair from a private point of view, but a serious waste of energy involving a very considerable cost, with nothing to be gained from any standpoint.

After what the right hon. Gentleman the Secretary for the Treasury has said, it is obvious that the Government will not accept this Amendment. I must say that I am profoundly dissatisfied. I think that the whole agricultural industry and the country at large has reason to complain of the most perfunctory manner in which this very serious question has been dealt with. [An HON. MEMBER: "The time."] I do not think it is too much to grudge an hour in discussing this matter? I am sorry that in this respect matters are as they are; but I do not desire to delay the House, and in order to meet the Government, which has been good enough to accept one part of the Amendment, I shall propose that this Amendment be read a second time then amended. If you, Mr. Whitley, can see your way to accept that I shall propose the words which the Government have suggested to meet the case of those dying between April, 1909, and April, 1910, should be subsequently added to the amended Amendment. It will then become the Government's Clause.

9.0 P.M.

I think it would be permissible that the Clause should be read a second time, and then that the subsequent Clause referred to be moved as an Amendment to it. Then, having left out the words down to "Sub-section" ["for Sub-section (5) of Section 61"], at the end to add the further words which appear as set down by the hon. Member (Mr. Pretyman).

Question, "That the Clause be read a second time," put, and agreed to.

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

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

"Sub-section (5) of Section sixty-one of the Finance (1909–10) Act, 1910 (which relates to duty in respect of timber, trees, or wood), shall have effect and shall be deemed always to have had effect as if the words 'on or after the thirtieth day of April, nineteen hundred and nine,' were substituted for the words 'after the passing of this Act.'"

Question, "That the proposed words be there added," put, and agreed to.

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

To Make Provision For Valuations Resulting In Minus Quantities

For the purpose of the valuation under the Finance (1909–10) Act, 1910, and the assessment of Increment Value Duty there-under, whenever the original site value of any land is less than nothing it shall be deemed to be nothing, and in cases where the original site value is nothing, or deemed to be nothing, on the first occasion for the collection of Increment Value Duty the increment value shall be deemed to be reduced by an amount equal to ten per centum of the site value on such occasion, instead of ten per centum of the original site value.

The new Clause which I propose to move has a marginal note which may, perhaps, rather astonish some Members. The Clause is, "To make provision for valuation resulting in minus quantities." This is a matter which is of very great importance, and when the House has listened to what I have to say I think hon. Members will consider that the case is absolutely unanswerable for making the Amendment for which I ask. The object of this Amendment is simply to prevent a man from having to pay Increment Value Duty until the site value of his property rises above zero. [An HON. MEMBER: "Rubbish!"] The right hon. Gentleman says "Rubbish!"

I understood the right hon. Gentleman to say so. I think he will find out before I have done that it is the Government Act which is rubbish and not the Amendment which I propose. One might almost think that this minus value was an algebraical problem. The Finance Act of 1909–10 gave us a few remarkable things, but the most remarkable of all was this minus value. On 24th October I asked a question as to how many valuations had up to 30th September resulted in minus quantities. The astounding reply that I received to that question was 30,610 valuations up to that date had resulted in minus quantities, and that the largest minus quantity ever arrived at was minus 7325. Just fancy what a man thinks who is told that the valuation of his property is minus 7325? This is not a small matter which may be dismissed with an airy wave of the hand of the right hon. Gentleman. I am going to show the right hon. Gentleman that there are many more cases than those given which resulted in minus quantities. In each of these pieces of land not only one person, but a large number of persons are interested, so that the thing affects thousands, and possibly hundreds of thousands of people. The particular cases with reference to which the answer was given were only cases in Scotland and Lancashire, and cases where the minus quantities resulted in this fact: that if there was a perpetual feu duty or a fee farm rent, and the capitalised value of that feu duty or fee-farm rent was greater than the value of the property itself. There were other cases, one of which was cited to-day as an example by the hon. Baronet (Sir F. Banbury), who gave a case he had himself where the minus quantity resulted from a different reason, but in that case the absurdity followed from the fact that the capitalised value of the feu duties or fee-farm rent was greater than the value of the land. That means that since the feu duty or fee-farm rent was imposed, the land failed to have any value. I put it that at least you ought not to charge an Increment Value Duty until the land has got back to the point where it is worth less than nothing. You ought not to charge Increment Duty until you gel back to zero. This is in strange contrast with one of the reasons given by the Prime Minister for the imposition of Increment Duty at all, because he distinguished land from all other classes of property on the ground that it had a certain continuous rise in value. In remarkable contrast to that, the fact is that about 10 per cent. of the valuations up to the 30th September have resulted in these, minus quantities, and show that since feu duty or fee-farm rents were imposed, the land must have fallen in value to the extent of the minus quantity. It is absolutely unworkable to apply the provisions of this Act at all to minus quantities.

I am quite sure the House, in passing the Finance Act, never had any idea in its mind that it was going to impose duties upon minus values. I contend there is no such thing as a minus value, and the first time these values come before the Court, the Courts will say that these minus values are mere nonsense. You cannot have a minus value any more than you can have a minus asset. To talk of minus value is in itself a contradiction in term, and it never was intended by this Act to tax them. In spite of this, we have actually got 36,000 cases. The Solicitor-General, whose absence we all regret, because he always treats us with such fairness and courtesy, defended himself by talking about Fahrenheit and Centigrade, but all the arguments about Fahrenheit and Centigrade would carry but cold comfort to the mind of a man who was told that the value of his property was minus £7,320.

I am sorry the hon. and learned Gentleman is not here, because if he were, I should like to challenge him on this amount of £7,320, and as to whether my statement is not correct. If the owner of that property was successful in giving it away, it would not be open to any deduction at all, for this reason: that a gift is something upon which Increment Duty is not charged. There are three cases in which Increment Duty is charged, namely, transfer on sale, on lease, and on death. So I put the proposition that a gentleman owning a property of minus £7,320 value, if he could get it away as a gift would pay no duty.

It seems to me the hon. and learned Gentleman is introducing rather a wider question than that opened up by his now Clauses on the Paper.

I will explain. The Clause is intended to do away with the payment of any duty until you get to zero, and to provide that there should be no Increment Duty payable until the value of the property rises to zero. Unless the Government accept this Amendment we have this extraordinary anomaly, that in the case of a man whose property had a minus value of £7,320 giving it away he would pay no duty at all, but if he sold it for £100 he would pay Increment Duty of £1,484, If the Attorney-General was here I am quite sure he would confirm the correctness of that proposition, because the man who sold his property for £100 would pay Increment Value Duty on the difference between £7,320 and £100, which would amount to £1,484. Anything more ridiculous than that has never been produced by any legislation submitted to reasonable men. It means that a man who sells something for £100 would have to sell out other investments in order to pay Increment Duty upon that sale. It is said it does not matter from what datum line you start, whether a minus datum line or a plus. I will show that a minus datum line is absurd and unworkable under the provisions of the Act itself. Take the case of the 10 per cent. allowance. The House decided that before you charge a man Increment Duty he should have 10 per cent. deducted from the amount of the increment before you assess the duty. That is under Section 3, Sub-section (5) of the Act. How are you going to apply that to a minus quantity? Supposing the minus £7,320 goes up to £4,300, that is an increment of £3,000. How are you going to deduct your 10 per cent. of the minus quantity? I think it would baffle the wit of man to apply 10 per cent. to the case of a minus quantity. Will the right hon. Gentleman give me an explanation in this particular case where there has been a rise from minus £7,320 to minus £4,320. How is the man to get the benefit of the 10 per cent. in that case? Since the right hon. Gentleman the Secretary to the Treasury did me the honour to call the Amendment rubbish I think I am at least entitled to ask him to explain how he proposes to deal with a 10 per cent. allowance in that case. Let me ask further how are you going to deal with the allowance under Section 25 (4). That Section provides that if a man spends money on making roads or improving his property he is allowed to deduct that from the total value when arriving at site value, so that he might be saved from paying Increment Value Duty on his improvements. If you have a minus quantity how will you apply that? Because if you deduct that it will make the minus quantity still greater. I have given a case of a property which is valued at minus £7,320. Let us assume that man spends £1,000 on making roads and under Section 25 (4) you want to give him the benefit. You want to give him the benefit of that Section, which provides that the value of the land means the total value after deducting any part of the value which the Commissioners deem directly attributable to works executed or expenditure of capital of the person interested in the land, or the gift of any land by any person for streets, roads, squares, or gardens. Supposing that Gentleman had spent £1,000 on the road, how are you going to give him the benefit of that deduction in case of a minus quantity? The result of this operation is that instead of saving Increment Duty you make him pay more. How are you going to make apportionments as between freehold and leasehold interests when you have a minus quantity? If the value of the fee simple is zero, what is the value of a leasehold interest for fifty years. I venture to tell the right hon. Gentleman that the whole of this attempt to get at minus values is absurd, and when it gets to the courts I think they will say that it is sheer nonsense. If any part of this Bill is likely to make a laughing-stock of the Government it is these minus quantities. In no legislation that has ever been passed by any reasonable body of men has there ever boon a provision which has led to results so inexplicable on the face of them, so ludicrous and wholly indefensible as these absurd minus quantities.

My hon. and learned Friend has excelled himself in invective and strong expression, but the ludicrousness of the whole business is his misapprehension of what is meant by a minus quantity. He seems to think that a minus quantity represents the value of the land.

It means the value of the land less the rent charges upon it, and that is not the same thing as the value of the land. It is a purely artificial figure. It is not the figure of the value of the land, but the figure subject to the fact—the purely artificial fact—that a rent charge has been created on that particular land. The hon. and learned Gentleman says that he received the astounding reply that there has been 36,610 such cases. Why is it astounding, and what is there surprising about it? The hon. and learned Gentleman is doubtless more familiar than I am with the fact that it is the constant practice to take a piece of land, erect buildings upon it, and then create a feu duty or rent charge which exceeds the value of the land. I know the case in London of a building erected on land, and the actual rack rent of the building in the course of a few years was turned into a ground rent. I know of many cases where a permanent rent charge is created upon land which very considerably exceeds the value of the land. The Government could have said, "We will take the actual site value." What they did say is, "We will take the actual site value, and to arrive at the starting figure of assessable site value we will take the permanent rent charge." Of course, you arrive at the figure which is not the value of the land, and the absurdity of the whole case is supposing that it is the value of the land. The hon. and learned Member asked what you would do in case of a minus value of £7,300 where £1,000 had been spent on roads, and he said, supposing that land had gone up to zero, what would you do with that £1,000? You would take it off the difference before you arrived at the Increment Value Duty. What the hon. and learned Member proposes is that in all cases where you arrive at the minus quantity we should assume that it is zero, and start from zero.

Let us take a simple concrete case. Supposing you have a plot of land, the full site value of which is £100; there is no rate charged upon it of any kind, and that is the assessable site value. That is your original valuation. You start with that, and unless the land goes up to £200 after allowing for the 10 per cent. you charge your increment value on the difference. Supposing there was a rent charge of £200 on the same land, the value of the land is £100 just the same, but because you have decided to take off the fixed rent charge or feu duties and so forth, you arrive at a negative value of minus £100. Supposing those two identically similar sites both increase in value equally, they both go up £200, one would then be worth £200 assessment value and both of them would be worth £300 real site value, but in assessable site value one would be worth £300 and the other £100. What is there to distinguish between these two cases to justify one being subject to a different Increment value than the other. There is no reason under the sun why you should discriminate. The difficulty of my hon. and learned Friend really is not a difficulty in the nature of the case, but the difficulty arises merely because he has misapprehended what the nature of the case is. There is nothing to be surprised at. This is a concession to the landowners, and does my hon. and learned Friend say we ought not to take off the amount of the rent charge? If that is his view, and if that is the view of the party to which he belongs, I am sure the Chancellor of the Exchequer will not be altogether reluctant to consider his view. That is not what he wants. If you do maintain this concession of allowing for rent charges, you cannot help arriving at minus quantities. You will arrive at a great many, and there is nothing in the least to be surprised at.

My right hon. Friend has laboured more or less under a misapprehension over this question. A man is assessed at his interest in the land. His interest in the land is a minus quantity—that is to say, his interest is so many pounds less than nothing. Suppose the property goes up, his interest in the land may still be worthless, and yet the Government propose to take Increment Duty from him for something which is still absolutely worthless and less than worthless. That will not commend itself to any man who can follow these things with anything like consecutive thought. Of course, it is only, I believe, in Scotland that up to now these minus quantities have come forward. [HON. MEMBER: "No, no."] It simply means that the land has for some reason or other gone down in value. The whole theory upon which these taxes are founded—and I have always been in favour of an Increment Tax—is that a man's interest in land increases and that upon that increment he should pay some duty to the State. The reason he pays that duty is because the State, the community, has increased the value. If the community have decreased the value, is it unfair to ask the community to stand till it gets back to the point at which Increment Value Duty is payable? Are you going to say, "We are going to take the increment which the community create and tax you on the decrement plus the increment which the community create?"

I cannot conceive of a position in which you are going to say to a man, "You have taken a feu duty. If you took that land to-day, you could get it so much cheaper." The Courts have decided over and over again that a man is not bound to reckon a loss until he realises it. If a man has bought a piece of land for £100, it is nothing to him that the value of adjacent land may have receded to £50. The law has decided he is entitled to take it and put it in his books at £100, and he is not bound to write off any loss upon it until he has actually realised it. Here is a man who has not realised it; he has not attempted to realise it, but you say to him, "We will realise it for you in figures at this moment." I say you have no right to do that. You have no right to say to him, "You have made a loss. If hereafter you recoup that loss, we are going to charge you duty to the extent to which you do recoup that loss." That cannot be right. It offends almost every principle of justice. My right hon. Friend cited a case of a plot of land at £100 and of another plot at £200. He was confusing two parties. He was taking in the one case the freeholder and in the other case the leaseholder. There cannot be any decrement in a freeholder; there cannot be a minus quantity in a freeholder. I never heard of a piece of land worth nothing. It is always worth something. It is only when it has a burden on it that it has a minus quantity.

The whole trouble has arisen in the very cumbersome way in which the House set out to find various values. If you look at the Act you will find this is how we have got to get at the assessable site value. You have to take the gross value, and the gross value minus the divested value equals the full site value. Having got that, you start again. The gross value, minus deductions for fixed charges, is the total value. Having got that, you start again. The total value minus the fixed charges plus works executed equals the assessable site value. Why should there be all this mathematical calculation to find out what was perfectly easy to find out in the records of all the valuers and assessors in the country? So far as Scotland is concerned, I have never yet been able to understand why this complicated method of valuation should be applied. You have in the valuation roll of Scotland the whole of the values, including also the feu duties, so there is absolutely not the slightest difficulty in getting at the value by any valuer, because the facts are all disclosed every year in the valuation roll. Of course, I know it is a mathematical formula of a Member of the Front Bench, who happens to be a Fellow of Trinity. If you look at the Section and work it out you will find I am exactly correct.

Of course, I can quite understand what my right hon. Friend says. He says: "Here is a piece of land that has a certain feu duty on it, and the feuer is bound to pay that feu duty. The gross value for both building and feu duty is so much. Deduct the feu duty, and it becomes a minus quantity, having regard to the price at which you could get the same land at that day. I say again, if I made a purchase of a feu which is, say, £10 a year, you will value the superior at £10 a year, and make no deduction for him. You have, on the other side, the feuer who is charged £10, and now, for the purposes of valuation, you put the other man down at £5. That cannot be right, because you have the same piece of land valued at two different sums. I do not know how far the Government will meet this case, but it seems to me an extraordinary thing, and I feel sure, with the hon. and learned Gentleman opposite, that it comes to a Court of Law the judges will not understand it, and, if they do, they will put it aside. I appeal to the Government to come to a straightforward business proposition. If a man has bought land and made a loss, he is entitled, not to write that loss off, but to keep it as a cost to pay off when he realises it. If there is a profit, you are entitled to Increment Duty, but if there is a loss, you are not entitled to it. That is the plain basis of the thing, and it is nothing but justice.

The hon. Gentleman opposite has made an extremely clear statement, and I do not desire to add anything to what he has said on that part of the question over which he has traversed except this. I do not know how the hon. Member can expect the Government to meet him. It would indeed be to run counter to the whole principle of their legislation if we were now to provide that if a man has made a loss he should not be taxed as if he; had made a profit. The contention the hon. Member put forward to-day he himself, unless my memory misleads me, and many hon. Gentlemen on this side of the House, put forward repeatedly when the Finance Bill of 1909 was under discussion. He got no satisfaction, and we got no satisfaction, and now, two years after, not only is the hon. Member——

Minus quantities were never believed in or thought, of until last year. I was the first man to call the attention of the House to them, to the great surprise not only of the House, but also of the Government.

Nobody has been more surprised by their own case than the Government have and they have good reasons for it. I am not suggesting that the minus value could have been foreseen by the Government or anybody else when the Act of 1909 was under discussion. But the question whether a man should be taxed when he has made a loss was foreseen, and it was argued over and over again. In the argument I think the hon. Gentleman opposite gave his assistance.

Does the right hon. Gentleman suggest that a minus quantity involves a loss?

I accept the statement of the case by the hon. Member for West Aberdeenshire.

The question is as to the intentions of the Government. Take the 10 per cent. allowance; that is intended to be universal. But can anybody say that a man whose property taxably is worth less than nothing is more deserving of the 10 per cent. than a man whose taxable interest is very valuable. You cannot apply the 10 per cent. in these cases, and the Government do not pretend that they can. There is a case under Section 25, which has already been referred to. My hon. Friend took the specific case of a man whose property site value was minus £7,000. He had spent £1,000 on roads, and it was asked how he would benefit? The right hon. Gentleman said, "You will deduct that from the difference between the original site value and the site value on the occasion before you tax it." Therefore, if the original site value was minus £7,000 and the present site value is nothing the difference is £7,000, and with the deduction of £1,000 spent on roads you fix the amount at £6,000. That apparently is the best case the Government can make out. Where is the right hon. Gentleman's authority? Not, I think, in the terms of the Act. I take it that the assessable site value of land means the total value after deducting any part which can be proved to be attributable to the works executed thereon. I am sorry there is no Law Officer present at this moment. This is a matter with which a Law Officer ought to deal. I think the answer which has been given is a very perfunctory answer. The Government deny there is any case worth consideration at all, and that reply, to my mind, is wholly unsatisfactory. I hope my hon. and learned Friend will insist on a Division as a protest against that answer.

I really cannot understand how anybody with an elementary acquaintance of algebra can talk about minus quantities in the way the hon. Gentleman opposite has done. He does not seem to realise that a very little practice in handling minus quantities enables one to add or to subtract from one thing, and by thus handling minus quantities to convert them into positive quantities. This difficulty of minus site values arises solely from the policy adopted by the Government in deciding what they would call an assessable site value. They took the value arrived at after deducting the charge on the land, and they called the assessable site value the original assessable site value. If the property increases in value it is probable that the assessable site value has also increased. The hon. Member put forward a case in which the original assessable site value of a property represented a minus of £7,300, and it subsequently proved to be a minus value of £4,300. The hon. Gentleman says that to take an increase from a minus of £7,320, which becomes £4,320, is an absurdity.

I said it was unreasonable to put a tax upon an increment when it reached zero.

That raises a wholly different issue than was put forward by the right hon. Gentleman (Mr. Austen Chamberlain). It is wholly apart from the purpose of this Clause. The whole of the hon. and learned Gentleman's speech was to point out that there was no increase in value from minus £7,320 to minus £4,320, and that you ought to call both these quantities zero. I say the substraction of minus £7,320 from minus £4,320 is no more difficult than the substraction of £4,320 from £7,320, and the result is—as every boy in school with an elementary knowledge of algebra knows—£3,000, and that under the Bill is the taxable increment, subject to the 10 per cent. deduction. You are taxing not assessable site value, you are taxing the difference between the original site value and the site value on the occasion of the tax, and the difference between the two minuses must be a positive quantity, because there is an increase in value, and in the case in question it is £3,000, just as if the site value had increased from £4,320 to £7,320. The other question is as to whether it is right to tax a man whose property, owing to the fixed charges upon it, has a site value of minus £7,320, and then only rises to minus £4,320. That is quite another issue from that raised by the hon. and learned Gentleman.

I think so. I want to enable the hon. and learned Gentleman to do these sums for himself without trouble, and I want to offer him a very simple formula which will dispense altogether with minus quantities. Let me in the case, both of the original site value and of the subsequent site value add £10,000. I will take his own case. We start from minus £7,320. Let him add £10,000 to that. I do not know whether the hon. and learned Gentleman's arithmetic will enable him to arrive at the result. The result is that there is a positive quantity resulting, which is £2,680, for £7,320 taken from £10,000 gives you £2,680. Let him add to the subsequent site value of minus £4,320 the £10,000. He will then reach a positive quantity of £5,630. Now let the hon. and learned Gentleman deal confidently with two positive quantities. Let him take his new original site value, arrived at by this process, of £2,680 from the £5,680 arrived at as the subsequent site value, and he will reach the identical result of subtracting the two minus quantities, namely, a positive quantity of £3,000. That, simple method of adding £10,000, or by adding £100,000, if he is dealing with larger quantities, to his site value will enable him always to deal with positive quantities which he understands, and not to meddle at all with those minus quantities which so befog and puzzle his mind. The hon. and learned Gentleman took the case of a landowner who had spent £1,000 on his property. Is there any difficulty in that? We have got £3,000 taxable increments, but £1,000 of that is due to the expenditure by the landlord of £1,000. The taxable increment is therefore not £3,000, but £2,000.

Where does the hon. Gentleman find in the Act any authority to treat that £1,000 in that way? The £1,000 is to be subtracted from the value, and it makes the minus smaller still.

If the right hon. Gentleman will look at Section 25, Sub-section (4), he will find the fact is exactly as I stated it.

May I point out to the right hon. Gentleman another feature of elementary mathematics, which is that it does not in the least matter at what point in this long chain of mathematical operations you perform this subtraction of the £1,000.

It makes all the difference in the world whether you deduct the £1,000 from the value or from the difference between the two values. In the one case you increase the charge and in the other case you diminish it.

I should like to understand the point. Does the right hon. Gentleman really suggest that the £1,000 spent by hypothesis on roads will increase the increment?

Because I have had an opportunity of consulting the Chairman of the Board of Inland Revenue, and he agrees with my view. I hope that will be a relief to the right hon. Gentleman's mind.

May I point this out to the right hon. Gentleman. Supposing earlier in the chain we had got a site value which is increased from minus £7,320 to minus £4,320, the right hon. Gentleman says in that case the landlord has spent £1,000, and therefore the assessable site value on the occasion is not to be minus £4,320, but minus £5,320.

May I then go on. May I take this point. I think I have really got a case which illustrates the problem. We have got an original assessable site value of minus £7,320, which is increased to minus £4,320, but the landlord has spent £1,000 in improving the property. Therefore you are to subtract £1,000 in order to arrive at the site value, and instead of it being minus £4,320, the site value on the occasion is minus £5,320. That is making it smaller, says the right hon. Gentleman. Quite so, because you are deducting a fresh charge laid on the property by the landlord's expenditure, and therefore the assessable site value is smaller than if you had not spent that £1,000. You have made it minus £5,320 instead of minus £4,320, and that is quite right. If you take the minus £7,320 from the minus £5,320, you again arrive at the taxable increment of £2,000 which you would have arrived at at the end of the process instead of arriving at it earlier. There is really not any difficulty at all if hon. Members will accustom themselves, as they can do by an elementary course of algebra, to handling minus quantities with the same facility as positive quantities.

The hon. Member has not really appreciated my point. The point was this. What we are to arrive at is the original site value, and you do it in this way. Your total value is minus £7,325. The total value is what you arrive at by deducting the capitalised value of the duty from the gross value. Having got that total value you then have to make the other deduction under Sub-section (4) of Clause 25. Assuming the deduction you have to make in respect of roads to be £1,000, how do you arrive at the original site value so as to give effect to the £1,000 spent on the roads?

I think the hon. and learned Gentleman has now produced a fresh instance. I do not think it is necessary to go through the form again. If they were not the figures used by the hon. and learned Gentleman it is a possible case, and I hope I have succeeded in making it clear. It seems perfectly clear to myself. I very likely have failed, but I have endeavoured to put clearly before the Committee, without touching on the larger question raised by the right hon. Gentleman (Mr. Austen Chamberlain), how far it is right to tax this increment, which is an increment, although it has not resulted yet in getting back to the zero point which they regard as the proper starting point of taxation.

10.0 P.M.

It is extremely interesting to know that the hon. Gentleman still remembers the mathematics which most of us have forgotten, although as a matter of fact I think he rather remembers that he once learned them, for when he rose after the interruption of my hon. and learned Friend (Mr. Cassel), I did not see that his instruction in elementary algebra and higher mathematics enabled him to apprehend in the least the point which my hon. and learned Friend made. As regards what has been said by the right hon. Gentleman (Mr. McKinnon Wood) that the Commissioners of Inland Revenue tells him that he does deduct this £1,000 for roads from a minus quantity, I am quite willing to believe that he does that, but I am not in the least willing to believe, without some argument, that he has any authority in the Act to deduct it in such a way as he points out. But the real point for which I have risen is that, like the hon. Member (Mr. J. M. Henderson), I do not think we should collect taxes by means of higher mathematics. We should levy them by means of commonsense. The hon. Member has put a question, and until the Government can give an answer to it, I do not see how they can go on levying taxes in this way. The question is: how can a man's interest in land be less than nothing unless he has made a loss, and if he has made a loss how in the world are you going to tax it. That is the whole case. It seems to me that elementary justice and elementary common sense also should lay this down as one of the most obvious maxims of taxation, that if you are imposing an Increment Value Tax you should not impose it on a man because he has made a loss. What my hon. and learned Friend is trying to do, and what, I believe, his Amendment does, is simply this, to ask the Government to take the view that is now taken by every Court of Law, that a man is not bound to consider that he has made a loss because the nominal value of his property has fallen until he is compelled to realise. What the Government do is to compel him in practice, to realise his property at the wrong time for him, and then, because of that, to tax him on account of his having to realise it. All through the discussions on this Finance Bill I did not feel, and I think the majority of my Friends behind did not feel, that the Increment Tax, provided it was really levied on profits, was anything more than unfair for this reason, that it did not go all round. We do not say it is an improper form of tax if it applies to every kind of property, but since it is shown by practice, and by the experience of the working of the Act, that what you do is to tax for increment a man who has made a loss, it is the clear duty of the Government to reconsider the position and put an end to so scandalous a method of collecting taxes.

I think on the subject of minus quantities it is obviously suitable that private Members might be heard. The interesting speech we have heard from the hon. Member (Mr. Leif Jones) made me hope it might be possible, when we are revising the procedure of the House, that the use of the blackboard may be permitted. The Finance Act of the late Government is at any rate having one useful effect, and that is that it is encouraging the study of mathematics and arithmetic by hon. Gentlemen opposite. On this occasion I think they have been misled very much by the remarks of the hon. Member (Mr. J. M. Henderson). Both the right hon. Gentlemen opposite (Mr. Austen Chamberlain and Mr. Bonar Law) founded their remarks expressly upon the question put by the hon. Member (Mr. J. M. Henderson) as to whether it was possible that there could be a minus quantity where there was no loss. I think I can satisfy the House that there has been a confusion between two entirely separate subject matters. The question of whether there has been a loss upon the property has now, by a Sub-section of Clause 2, which was in virtue of a pledge given by the Chancellor of the Exchequer, further amended in the Revenue Act, been satisfactorily dealt with. That is Sub-section (3) of Section 2 of the Act which, as originally passed by the House, provided that where it was proved to the Commissioners that the site value of any land, at the time of any transfer on sale of the fee simple of the land which took place at any time within twenty years before 30th April, 1909, exceeded the original site value as on 30th April, 1909, there should be substituted for the purpose of Increment Value Duty the site value at that time for the original site value as ascertained under the Act. Everyone remembers that that was extended so as to cover the entire lifetime of the purchaser. If there is any case of loss arising, the purchaser is protected. If there has been any loss sustained—any depreciation in value—between the time the purchaser first bought it and the time when the Increment Value Duty has to be paid, the vendor is now protected by the provisions of Clause 2.

Minus quantities do not arise in connection with these losses at all. Minus quantities are another branch of the subject altogether. They arise, irrespective of loss or profit, in this way. I purchase to-day a plot of land of the value of £100; £5 a year is the annual value. I put upon it buildings of the value of £500. The value of the plot of land, with the buildings upon it, is now £600. You can now charge upon that land a perpetual ground rent, a Feu Duty, or whatever the Scots legal expression may be, of £10 or £15, and that £10 or £15 will be reasonably, though perhaps not amply, secured by the value of the house and the buildings put upon the land. The value of the man's property is the value of the house and the land less the value of the rent charge which he created, for which, presumably, he has received the full market consideration at the time of its creation. When you come to make an assessment for the purposes of Increment Value Duty under this Act you do not make it upon the total value of the man's land and house. You proceed to take away such portion of that value as represents the value of the building—the superstructure value, as the Solicitor-General called it. The result is that when you artificially divide the property into two halves for the purpose of taxation, taking the value of the buildings on the one hand and the value of the land on the other, you will, of course arrive, if no rent charge has been created, at the position at which you started, the building value of £500, and the land value of £100; but if in the meantime you create a rent charge which is secured by both, and that rent charge is a charge of £10 a year—of the value of say £250—then under the Act that rent charge is to be deducted from the full site value in order to arrive at the total value. Section 25, Sub-section (3), of the Finance Act, 1909–1910 says,
The total value of land means the gross value after deducting the amount by which the gross value would be diminished if the land were sold subject to any fixed charges.…
Therefore the whole of the argument of the right hon. Gentleman the Member for East Worcestershire (Mr. Austen Chamberlain), expressly and avowedly based on the statement of my hon. Friend the Member for West Aberdeenshire (Mr. J. M. Henderson), that there could be no minus quantify except where the owner of the property has sustained a loss, disappears, and the argument of the right hon. Gentleman the Leader of the Opposition, expressly and avowedly based upon his inability to answer the same conundrum of how there could be a minus quantity arrived at by the valuation where the owner of the property sustains no loss, suffers the same fate.

What I wish to know is how you can tax a man for increment where the taxable interest is less than nothing?

The absence of a blackboard makes explanation not so easy and simple a matter as it otherwise would be. But I think I can explain the right hon. Gentleman's difficulty to him. He must remember that the taxable interest is

Division No. 447.]

AYES.

[10.15 p.m.

Anson, Rt. Hon. Sir William R.Barrie, H. T. (Londonderry, N.)Burn, Col. C. R.
Ashley, W. W.Bathurst, Hon. A. B. (Glouc, E.)Butcher, John George
Astor, WaldorfBathurst, Charles (Wilton)Campion, W. R.
Bagot, Lieut.-Colonel J.Beach, Hon. Michael Hugh HicksCarlile, Sir Edward Hildred
Baird, J. L.Beck, Arthur CecilCave, George
Baldwin, StanleyBigland, AlfredCecil, Lord R. (Herts, Hitchin)
Banbury, Sir Frederick GeorgeBird, A.Chaloner, Colonel R. G. W.
Banner, John S. Harmood-Boyton, J.Chamberlain, Rt. Hon. J. A. (Worc'r)
Barlow, Montague (Salford South)Bridgeman, W. CliveChaplin, Rt. Hon. Henry

neither the original assessable site value nor the site value on the occasion. He asks, What is it? Section 1 of the Finance Act, 1909–10, gives the answer. In the first three lines it says,

"Subject to the provisions of this Part of this Act, there shall be charged, levied and paid on the increment value of any land a duty, called Increment Value Duty …"

The only value on which Duty is payable is Increment Value, and therefore I think I shall be able to answer the question of the right hon. Gentleman. Although assessable site value may be a minus quantity, there may be a positive increment value which may properly be taxed. To explain this in detail it would only be necessary to repeat the perfectly lucid speech of my hon. Friend above the Gangway. Let me take a simple illustration in order that the right hon. Gentleman may follow me the more easily. Let me take the case of a plot of land worth £100, a house of the value of £500 put upon it, and a rent charge of £10 a year by marriage settlement in favour of the owner's wife. Let us assume that owing to the opening of a tube railway undoubtedly all land in the neighbourhood doubles in value. The assessable site value on 30th April, 1909, was £100, being the value of the land divested of the buildings, less £250 value of the rent charge. The value of the assessable site value upon the occasion is £200, less the same deductions as before. There is an obvious increment in value which will be immediately reflected in the market price if the property is put upon the market. It is upon the positive increment value of £100 that the Government levy the modest tax which is imposed. I think I have answered the right hon. Gentleman. I do not hope to satisfy my hon. Friend the Member for West Aberdeenshire, but I trust the explanation is satisfactory to the rest of the House.

Question put, "That the Clause be read a second time."

The House divided: Ayes, 108; Noes, 188.

Courthope, G. LoydIngleby, HolcombeRutherford, John (Lancs., Darwen)
Craig, Norman (Kent, Thanet)Jardine, E. (Somerset, E.)Salter, Arthur Clavell
Craik, Sir HenryKerr-Smiley, Peter KerrSanders, Robert A.
Denniss, E. R. B.Kerry, Earl ofSanderson, Lancelot
Dixon, C. H.Knight, Captain E. A.Sandys, G. J. (Somerset, Wells)
Doughty, Sir GeorgeLarmor, Sir J.Smith, Harold (Warrington)
Du Cros, Arthur PhilipLaw, Rt. Hon. A. Bonar (Bootle)Starkey, John R.
Eyres-Monsell, Bolton M.Lewisham, ViscountStaveley-Hill, Henry
Fell, ArthurLockwood, Rt. Hon. Lt.-Col. A. R.Stewart, Gershom
Fletcher, John Samuel (Hampstead)MacCaw, Wm. J. MacGeaghSwift, Rigby
Foster, Philip StaveleyMackinder, H. J.Sykes, Alan John (Ches., Knutsford)
Gardner, ErnestMacmaster, DonaldTalbot, Lord E.
Gibbs, G. A.Magnus, Sir PhilipTerrell, G. (Wilts, N. W.)
Gilmour, Captain J.Malcolm, IanThompson, Robert (Belfast, North)
Gordon, John (Londonderry, South)Mason, James F. (Windsor)Thynne, Lord Alexander
Goulding, Edward AlfredMount, William ArthurTobin, Alfred Aspinall
Grant, J. A.Newdegate, F. A.Tryon, Capt. George Clement
Greene, W. R.Newman, John R. P.Valentia, Viscount
Gretton, JohnNicholson, William G. (Petersfield)Ward, Arnold (Herts, Watford)
Haddock, George BahrOrde-Powlett, Hon. W. G. A.Warde, Col. C. E. (Kent, Mid)
Hamersley, A. St. GeorgePease, Herbert Pike (Darlington)White, Major G. D. (Lancs., Southport)
Hamilton, Marquess of (Londonderry)Peel, Captain R. F. (Woodbridge)Willoughby, Major Hon. Claud
Harris, Henry PercyPole-Carew, Sir R.Worthington-Evans, Laming
Henderson, Major H. (Berks., Abingdon)Pretyman, Ernest GeorgeYate, Col. C. E.
Henderson, J. M. (Aberdeen, W.)Pryce-Jones, Col. E.Younger, Sir George
Hills, John WallerRawlinson, J. F. P.
Hope, Harry (Bute)Rothschild, Lionel de

TELLERS FOR THE AYES.—Mr. Cassel and Sir W. Bull.

Hume-Williams, W. E.Royds, Edmund

NOES.

Abraham, William (Dublin Harbour)Furness, Stephen W.Lynch, A. A.
Acland, Francis DykeGelder, Sir W. A.Macdonald, J. M. (Falkirk Burghs)
Adamson, WilliamGeorge, Rt. Hon. D. LloydMacphersen, James Ian
Ainsworth, John StirlingGibson, Sir James P.M'Callum, John M.
Allen, Arthur Acland (Dumbartonshire)Gill, A. H.M'Curdy, C. A.
Allen, Charles P. (Stroud)Gladstone, W. G. C.McKenna, Rt. Hon. Reginald
Armitage, R.Glanville, H. J.M'Laren, Hon. H. D. (Leics.)
Baker, Harold T. (Accrington)Guest, Hon. Frederick E. (Dorset, E.)M'Laren, Hon. F. W. S. (Lincs., Spalding)
Baker, Joseph A. (Finsbury, E.)Hackett, J.M'Micking, Major Gilbert
Barlow, Sir John Emmott (Somerset)Hall, Frederick Normanton)Markham, Sir Arthur Basil
Barran, Sir J. N. (Hawick)Hancock, J. G.Marks, Sir George Croydon
Barton, W.Harcourt, Rt. Hon. L. (Rossendale)Marshall, Arthur Harold
Benn, W. W. (T. Hamlets, St. George)Harcourt, Robert V. (Montrose)Masterman, C. F. G.
Bentham, G. J.Harvey, A. G. C. (Rochdale)Meehan, Francis E. (Leitrim, N.)
Black, Arthur W.Harvey, T. E. Leeds, W.)Meehan, Patrick A. (Queen's Co.)
Bowerman, C. W.Harvey, W. E. (Derbyshire, N. E.)Morrell, Philip
Brunner, John F. L.Haslam, James (Derbyshire)Munro, R.
Burke, E. Haviland-Haslam, Lewis (Monmouth)Murray, Captain Hon. Arthur C.
Burns, Rt. Hon. JohnHavelock-Allan, Sir HenryNeedham, Christopher T.
Burt, Rt. Hon. ThomasHaworth, Sir Arthur A.Nolan, Joseph
Byles, Sir William PollardHayden, John PatrickNorton, Captain Cecil W.
Carr-Gomm, H. W.Hayward, EvanO'Brien, Patrick (Kilkenny)
Cawley, Sir Frederick (Prestwich)Helme, Norval WatsonO'Connor, John (Kildare, N.)
Cawley, Harold T. (Heywood)Henderson, Arthur (Durham)O'Connor, T. P. (Liverpool)
Chapple, Dr. W. A.Henry, Sir Charles S.O'Doherty, Philip
Clough, WilliamHigham, John SharpOgden, Fred
Clynes, John R.Hinds, JohnO'Grady, James
Collins, Stephen (Lambeth)Hobhouse, Rt. Hon. Charles E. H.O'Shee, James John
Condon, Thomas JosephHodge, JohnParker, James (Halifax)
Cornwall, Sir Edwin A.Holt, Richard DurningPearce, Robert (Staffs, Leek)
Cotton, William FrancisHope, John Deans (Haddington)Pearson, Hon. Weetman H. M.
Cowan, W. H.Horne, C. Silvester (Ipswich)Pease, Rt. Hon. Joseph A. (Rotherham)
Crawshay-Williams, EliotHoward, Hon. GeoffreyPonsonby, Arthur A. W. H.
Crumley, PatrickHudson, WalterPower, Patrick Joseph
Dalziel, Sir James H. (Kirkcaldy)Hughes, S. L.Price, C. E. (Edinburgh, Central)
Davies, E. William (Eifion)Isaacs, Rt. Hon. Sir RufusRaffan, Peter Wilson
Davies, Timothy (Lincs., Louth)Johnson, W.Raphael, Sir Herbert H.
Dawes, J. A.Jones, Edgar (Merthyr Tydvil)Rea, Walter Russell (Scarborough)
De Forest, BaronJones, H. Haydn (Merioneth)Reddy, Michael
Denman, Hon. R. D.Jones, Leif Stratten (Notts, Rushcliffe)Rendall, Athelstan
Doris, W.Jones, William (Carnarvonshire)Richardson, Albion (Peckham)
Duncan, C. (Barrow-in-Furness)Jones, W. S. Glyn- (Stepney)Richardson, Thomas (Whitehaven)
Edwards, Enoch (Hanley)Jowett, F. W.Roberts, Charles H. (Lincoln)
Edwards, Sir Francis (Radnor)Keating, M.Roberts, Sir J. H. (Denbighs)
Edwards, John Hugh (Glamorgan, Mid)Kellaway, Frederick GeorgeRobertson, Sir G. Scott (Bradford)
Elibank, Rt. Hon. Master ofKing, J. (Somerset, N.)Robertson, J. M. (Tyneside)
Elversten, Sir HaroldLambert, G. (Devon, S. Molton)Roch, Walter F. (Pembroke)
Essex, Richard WalterLaw, Hugh A. (Donegal, West)Roe, Sir Thomas
Esslemont, George BirnieLawson, Sir W. (Cumb'rld, Cockerm'th)Rowlands, James
Falconer, J.Levy, Sir MauriceRowntree, Arnold
Ferens, T. R.Lewis, John HerbertScanlan, Thomas
Ffrench, PeterLow, Sir F. (Norwich)Seely, Col. Rt. Hon. J. E. B.
Fiennes, Hon. Eustace EdwardLundon, T.Sherwell, Arthur James

Shortt, EdwardTrevelyan, Charles PhilipsWhitehouse, John Howard
Smith, Albert (Lancs., Clitheroe)Ure, Rt. Hon. AlexanderWilliams, J. (Glamorgan)
Spicer, Sir AlbertWadsworth, J.Williams, P. (Middlesbrough)
Stanley, Albert (Staffs, N. W.)Ward, John (Stoke-upon-Trent)Wilson, Hon. G. G. (Hull, W.)
Summers, James WoolleyWard, W. Dudley (Southampton)Wilson, W. T. (Westhoughton)
Sutton, John E.Wardie, George J.Wood, Rt. Hon. T. McKinnon (Glas.)
Taylor, John W. (Durham)Watt, Henry A.Yoxall, Sir James Henry
Tennant, Harold JohnWebb, H.
Thomas, J. H. (Derby)Wedgwood, Josiah C.

TELLERS FOR THE NOES.—Mr. Illingworth and Mr. Gulland.

Thorne, G. R. (Wolverhampton)White, J. Dundas (Glasgow, Tradeston)
Toulmin, Sir GeorgeWhite, Patrick (Meath, North)

In view of the last Amendment having taken some time, I do not propose to move the next which stands on the Paper in my name. With regard to the third Amendment in my name, in reference to tobacco, I can see that it is impossible to introduce any change in the duties at present, but I have put it on the Taper in order that the Chancellor of the Exchequer may have in mind the fact that the small tobacconists and retailers are feeling the effect of the tax extremely. I believe they have presented a memorial to him on the subject. I do not propose to proceed further with the new Clause standing in my name on the Paper in regard to the Tobacco Duties.

Exemption For Market Gardens

Notwithstanding anything contained in The Finance (1909–10) Act, 1910, undeveloped land duty shall not be charged on the site value of any land which is used for market gardens, nursery gardens, or allotments, and for which there is no immediate demand for building purposes.

The Clause is a very simple one, and I trust it will meet with the sympathetic consideration, of the House, and particularly of the Government Bench, Section 17 of the Act of 1909 provides that agricultural land shall not be charged except it exceeds £50 per acre as its value for agricultural purposes. I have had an opportunity of saying a few words about the Super-tax and the superfluity of wealth, and I now want to say a word or two on what is considered the superfluity in the value of land. The Undeveloped Land Tax, like the Super-tax, is not unpopular, and it is capable of being explained in a broad and popular way, as it has been explained on a thousand platforms. The Chancellor of the Exchequer is a master of word painting, and he can bring forward pictures of the tailor's shop at Cardiff, or the Welsh girl, or a duke, or the greedy and grasping grabber of land, and

so forth. Bear in mind exactly what he said in 1909 when introducing the Budget:

"There is another aspect of this matter which I should like to say a word upon before I come to the actual proposals of the Government. I have dwelt upon the fundamental difference in the demeanoar of land owners towards their urban tenants, and that which under the inspiration of more high-minded and public-spirited principles guide their conduct towards their aged tenants. There is no doubt that the spirit of greed is unconsciously much more dominant and unrestrained in the former case. One disastrous result of this is that land which is essential to the free and healthy development of towns is being kept out of the market in order to enhance its value."

That was true in a certain sense, but that picture was adopted by other speakers, distorted and overdrawn, with the result that this Undeveloped Laud Duty was made out to be a necessary and popular tax, and became part of the great Budget. This tax having been imposed two or three years ago, of course we are now able to assess the result of if. I was rather interested, in looking over papers I had, to find what the Chancellor of the Exchequer prophesied would be the result. In "The People's Budget," explaining the 1909–10 Budget, and written by the right hon. Gentleman himself, this is what he said about it:

"The second proposal relating to land is the imposition of a tax on the capital value of all land which is not used to the best advantage. The owner of valuable land which is required or likely in the near future to be required for building purposes, who contents himself with an income therefrom, wholly incommensurate with the capital value of the land in the hope of recouping himself ultimately in the shape of an increased price."

Having explained what the Increment Tax was, he went on to say:

"I therefore feel justified in assuming that a duty of a halfpenny in the pound on undeveloped land and ungotten minerals will produce not less than £350,000 in the current financial year."

Then, in introducing the Budget this year, the right hon. Gentleman also naturally made a certain forecast of what Undeveloped Land Duty would bring during the current year. He said:

"This year we hope to be able to complete the valuation of most of the undeveloped urban sites and——"

On a point of Order. This is a very small point, which simply raises the question of the exemption of market gardens. The hon. Gentle- man is going into the question of estimates of the whole Undeveloped Land Duty, a course which will involve a reply on my part, and I suggest it is not germane to the question on the Paper.

I will come to the point as quickly as possible. I will take a concrete case of the actual operations of this Undeveloped Land Tax. I take my own Division, the Enfield Division of Middlesex. I suppose in the whole of my Division there is not a single acre that is not built over which has not got a value above its agricultural value, that is to say, Undeveloped Land Duty will be charged, or can be charged, on every single acre in my Division, always excepting golf grounds, football grounds, and cricket grounds. There is not a single acre that is not being used, and all being put to the best value it can be possibly put to, though I quite admit it has depreciated in value since the Budget, and at the present moment——

In my Division we have a great many acres under market and nursery gardens. At least six of the biggest nursery gardeners in England, whose names are household words throughout the country, have their gardens there; and on behalf of this class I desire to show why they should be exempt from Undeveloped Land Duty. What is the position of these men? I will deal, first of all, with the large market gardeners. They mostly own their own land. By the nature of their trade they have to be near a big market where they can sell their produce easily. These men are exposed to severe foreign competition. Their profits have gone down lately year by year, and under the Insurance Bill an additional heavy burden will be laid upon them. These men, who know their own business, have told me that the Undeveloped Land Duly will represent a tax of from 1s. to 1s. 6d. on their rental value. There are three years' taxes due now. I had hoped that the whole of the amount would not be collected at one time. I put a question to the Chancellor of the Exchequer with a view to not more than one year's tax being collected at a time, but I could not get a satisfactory answer. Therefore it is possible—I hope not probable—that these men will have a tax of 3s. in the £ levied upon them. That, combined with the imposition under the Insurance Bill, will certainly mean that some of them will not be able to continue to carry on their business. Take next the small man, the tenant who leases land from the landlord. I admit that until his lease runs out he is all right. But the minute his lease runs out the landlord will either have to turn him out or pay Undeveloped Land Duty on the land. In any case there is no encouragement for the landlord to keep the man on the land. It is better for him to send the tenant away and cover the land as quickly as possible with bricks and mortar. Take, then, a smaller, but perhaps more important, class, who ought to have the sympathy of every Member of the House, namely, the allotment holders. Members who, like myself, represent semi-urban divisions, have in the course of the year to attend a great many fruit and flower shows. It is wonderful how in small places near London the allotment holders can produce the fruit and vegetables they do. I suppose it is because a great many of them are descendants of rural or agricultural men. We want to encourage these men. We do not want to make it impossible for them to keep their allotments. But that is what this Act does. There was one notorious case in my Division where, soon after the Act was passed the rent of the allotment holders was actually raised. In this Undeveloped Land Tax there is no revenue and less justice. Where a market gardener, or a nursery gardener, or any man at all, actually sells his land, and makes a profit—if it can be shown that he makes a profit—then I may perhaps admit that he might pay a certain percentage, not to the revenue of the country, but to the local rates. What is going to happen, say, with the Undeveloped Land Duty that we are going to pay all over my Division? It is not going to be spent to develop Enfield. It it going perhaps to develop British Somaliland. Apart, however, from these considerations, I do say that where land is not being held up, and where it is being profitably employed, this tax ought not to be chargeable.

I desire to second the Clause moved by the hon. Gentleman the Member for Enfield. I am very glad to have this opportunity of saying a word on what is no doubt a very great industry, and an industry which a great many of my Constituents are very closely interested in. I take it that the principal object of the Undeveloped Land Duty is to induce a great amount of land to come under bricks and mortar. This Clause has for its object that where it is proved that there is no difficulty in obtaining land for building that market gardeners, nursery gardeners, and allotments should not be taxed. I think a case in my own Division is a very good illustration. In the borough of Worthing it has been calculated that there is no less than forty miles of glasshouses. I am quite aware that those houses are not liable for Undeveloped Land Duty. But there is a very large industry in the cultivation of high-class fruits and high-class plants. This ground is not at present required for building purposes, and it finds a great deal of occupation and permanent employment for a number of people. In addition, in the borough and on the outskirts there are some four or five hundred acres of market gardens and nursery gardens under cultivation.

If there was any difficulty in obtaining land for building at a reasonable figure there might be something to be said for charging Undeveloped Land Duty on these properties. As a matter of fact in this particular case—and I have no doubt it applies to a great many other cases throughout the country—the population is increasing, and the building that is wanted—I do not mean speculative building—for the increase of the population is easily procurable, while the borough is increasing in size, and I think in prosperity too. In the case of the market gardens and the nursery gardens propinquity to a big town and propinquity 10 a market is almost a necessity. That being so, it follows that in almost every case the nursery garden or market garden will come under the total amount, and will be subject to Undeveloped Land Duty. The market gardening industry is one that requires some consideration. The profits of it are not large, competition is very keen; consequently, although employment is regular, wages, as a rule, are not particularly high, and any increased charge on this industry must necessarily militate against an increase in the rate of wages of those employed. We hear a good deal about the necessity of our getting people back to the land. That is an idea which we all on both sides support. I venture to suggest that the encouragement of this industry, which employs a greater num- ber of people per acre than are employed in the ordinary agricultural industry, is one that is deserving of the attention of His Majesty's Government. It is a healthy occupation; it is an occupation which employs some four or five men to the acre as against one man to tea acres in other branches of agricultural industry, and when you come to another industry, which is also a growing industry and increasing in my Division, that of the French system of intensive cultivation, where more men still are employed to the acre, there is a great deal more need for consideration. I put these points as briefly as possible. In cases such as I have described, where there is no difficulty in obtaining land for building purposes, it would be relieving considerable hardships upon an important industry and would be conferring benefits upon those employed in that industry, and upon the town which benefits from that industry, and would be a benefit not only to the masters, but to those who are employed as well, and I hope therefore consideration will be given to my suggestions.

With every word that fell from the hon. Gentleman who has just sat down in his admirable speech I am in full sympathy. I quite agree with what he said about the desirability of improving intensive cultivation and encouraging that sort of cultivation in this country without having to go abroad for its produce. I am thoroughly in sympathy with what he stated about that. I think I shall be able to satisfy him there is nothing in the Bill as it stands to interfere with that quite famous industry which has arisen in the course of the past few years, more especially in his constituency. I should like to say a word as to what fell from the hon. Member (Mr. Newman). He gave us a dismal, not to say a funereal account of the industry in his constituency. He was not as hopeful about Smilax as the hon. Member for Worthing was about intensive cultivation. Let me say to the hon. Member that he, and his constituents as well, will find considerable comfort from the inconsistencies of his speech, and in the inconsistencies of his own Amendment. He will find the best answer to his speech in his own Amendment. He gave an account of the destruction that would fall upon market gardeners' industry owing to the prevalence of this tax, and in a few sentences later he said there was no revenue at all raised from this tax. If there is to be no revenue I do not see how his constituents are going to be oppressed. I would also call his attention, to the fact that in his own Amendment he gives a complete answer to the demand he makes. He referred to the case of the market gardeners and the nursery gardeners, where there is no demand for land for building purposes. In such cases the hon. Member may depend upon it that the best economic rent is that received from the gardeners themselves. What it means is that before we get at the building value you have to deduct the value for agricultural purposes, and the value of those purposes is exceedingly high. Take the case of Worthing. The rents are very high for these allotments, and run to prodigious figures by the acre, in fact, they are let in much smaller plots. If in these cases you capitalise the value of the land on the basis of the rent, I should not be surprised at their value for agricultural purposes being higher than for building purposes. That would certainly be the case under this Amendment, because the assumption is that there is no immediate demand for building purposes, and if you take land for which there is no immediate demand for building purposes near a very good market, the value of the market gardens is higher than the immediate value for prospective building use. I listened very carefully to both the Mover and Seconder of this Amendment for specific instances, because a good many valuations have been completed, and I thought they would have given me a single instance where the building value was higher than the value for nurseries and allotments. I doubt very much whether they can give me such a case, and even if they can I am certain that the margin is so small that when you come to charge the duty the burden will be found to be very small indeed. So far from this duty being a burden in these cases, I think the other part of the hon. Member's argument that there will be very little revenue indeed is more likely to be true because the land is being put to the best use. The hon. Member invited me to survey a very wide field, but I really cannot go into considerations outside the Amendment, and if I did I should very properly be called to order, but I should be very glad to answer the hon. Member if he will raise those points on the Third Reading. I am now dealing with his Amendment, and from that point of view there is no burden thrown upon the market gardener by the Bill. In the vast majority of cases they are not owners of the land but they rent it and are not the owners of the freehold. Therefore, the Undeveloped Land Tax, if there were any, and it would be a mere trifle in these cases, would fall upon the owner and not upon the market gardener, so that it is no burden at all upon them. If it is a burden it is a burden upon the owner who receives a very high rent indeed, amounting to as much as £10 or £15 an acre in many cases and in the neighbourhood of Brighton it runs into a very high figure.

Can the hon. Member give me a single case where the duty runs to more than a few shillings per acre, while the landlord is receiving £10 or £15 per acre. I thought the hon. Member would be able to supply me with at least one case where there had been an assessment of the kind he complains of, but there has not been any such case. This matter was discussed at very great length upon the Budget, and I am not sure it was not discussed last year. I only mention that as a reason why I think we might soon come to a decision upon it. The cases mentioned in this Amendment are not cases which exist in fact. It is only in the case where there is a building value and where the land is used as a market garden that the owner will have to pay upon the value of the land. That is the principle. The principle is not the driving of land into bricks and mortar. All we say is he must pay on the true value of the land.

The right hon. Gentleman has just told us this Undeveloped Land Tax had nothing to do with driving land into bricks and mortar, but on the Budget Bill he urged it again and again on the ground that it would force land to return to building purposes. I think that was his principal defence for it.

I think I can undertake to find the right hon. Gentleman ample confirmation of my statement in his own speeches. Leaving the object of the tax, I come to the merits of the case. The right hon. Gentleman divided it into two parts. In the first place, he said if there is any tax it is only a few shillings, and, in the second place, he said it is paid not by the market gardener or the allotment holder, but by the owner. It would be just as injurious to the market garden and allotment industry if it were unprofitable to the land as if it were unprofitable to the tenant. Then the right hon. Gentleman says it will only be a few shillings. I wonder he did not say a halfpenny. He wants instances. I will give him an instance I have cited before. A piece of land, let partly in a market garden and partly in allotments at £3 per acre. The capital value of that is £100, but its value for sale is £200, because of its prospective building value. There is £100 on which duty is payable. The right hon. Gentleman says it is only a few shillings, but, if you make the land less remunerative than it is now you do not encourage market gardens or the provision of allotments in the neighbourhood of large towns. You penalise them, and make it less likely they will be retained or provided in the future. What the Chancellor of the Exchequer, I think, overlooks is the fact that on the necessities of the case these industries are almost always carried on on land which has a prospective building value, but for which there is no immediate building demand, and the value of it, therefore, at the time is greater than the capitalised value of the agricultural rent. I do not think that there are any cases where the rent of agricultural land or the capitalised value of the rent of land used as agricultural land, is higher than in the Bill. But there are many cases in which the reverse is the case, and the right hon. Gentleman is, in fact, doing what he always professes to wish to avoid: he is discouraging the use of land in this way and is driving it into bricks and mortar.

I would like to take the case of land which has a certain building value. Builders come along from time to time to take up land in the neighbourhood. There is a certain disinclination to let land for the purpose of market gardens, because it might interfere with an opportunity of turning it into building land. If a man takes land for market garden purposes he has a right to a long notice and is entitled to very heavy compensation for the fruit trees and the work he has put on it before the owner can get it back and let it for building purposes. I speak of one particular instance which I can remember, where for years an estate was gradually developed for building purposes, and the difficulty caused by letting it for market gardening was so great that it was necessary to pay about £30 per acre in order to make it possible to turn it into building land. I think it is very important that land should be made the best use of and that there should be every encouragement, especially in cases where so much labour has been spent on it. It would be a very small matter for the Government to give way on this point and at the same time it would encourage owners to let their land for market gardening. Every inducement should be given to owners to allow land to be used for market garden purposes.

11.0 P.M.

The right hon. Gentleman the Chancellor of the Exchequer asked for an instance, which would support the Clause, of market gardens or allotments. I should like to give him one dealing with allotments. He will admit that it is desirable, from the point of view of the working-class community, that allotments should exist within reasonable reach of the dwellings of the working people themselves. In the case which has come within my own personal knowledge, there is an extensive allotment ground just outside a small but growing country town. The actual ground occupied by the allotments is not immediately ripe for building, but undoubtedly it will be so in the course of the next two or three years, and it has, therefore, a distinct prospective building value. It is let, I will admit, not at the best economic rent from the point of view of the landowner, but at what is undoubtedly the most economic advantage to the community at large. The allotments are let at quite a low rent, from 2d. to 3½d. per rod.

I admit that, but the important point is this: that in the interests of the working people who occupy them, these allotments are let at rents varying from 2d. to 3½d. a rod, the landlord maintaining the fences, gates, paths, and so on. To my knowledge the owner has within the last year received offers to purchase the land for prospective building purposes, on one occasion £350 an acre, and on another occasion £480 an acre. A very elementary calculation will prove to the Chancellor of the Exchequer that the amount of Undeveloped Land Duty for which the owner will be liable, assuming he is assessed on the value of the price that has been offered, will exceed the net rents which he now receives. I think that may fairly be cited as an instance in support of the Clause. Of course, it may be said that this is not the best economic use to which the land can be put, and I admit that from the point of view of the owner it is not.

But a very remarkable thing has happened in respect of this very allotment ground and the ground immediately ad joining it. The whole of this allotment ground was occupied at low rents, and there was a considerable demand for further allotments. The local parish council were approached by a number of would-be allotment holders, and they in turn approached the owner of this and the surrounding land and asked whether he would provide further ground for allotments. He offered some suitable ground as near as possible, not at a fancy rent, but at the agricultural rent he was actually receiving at that time from the tenant of a farm of considerable acreage, a rent of 30s. or 31s. an acre. The parish council, on going into the matter and working it out, found that they would be obliged to charge 7d. a rod to the allotment holders in order to maintain the allotment ground without placing a charge upon the rates. They were unable to secure allotment tenants at that rent. The would-be allotment holders did not think it possible to pay as much as 7d. a rod. One of two courses were open. The owner of the land has either got to charge the full rack-rent value and get his 7d. or 7½d. a rod—in which case the allotment tenancies would cease altogether, and I think that would be to the loss and not to the gain of the community at large in that district—or else he has to go on letting the land at what I admit is apparently an uneconomic rent, and submit to pay an Undeveloped Land Duty which actually exceeds the net rent coming to him from these allotments. If the right hon. Gentleman will look at that from the point of view of the interest of the community and of the working men who occupy these allotments he will see that in a case of this kind it is all important that the owner should not be compelled to shut up the allotments which are now let at a cheap rent, and for that reason he should be willing to accept some Clause with the same object as this. If nothing of this kind is done there is no doubt that either the rent of the allotments will be raised to a large extent, or else the land will have to be sold for prospective building purposes, and that particular village will be deprived of the allotments. I am willing to give privately the names of individuals and of places. This is a typical instance, but one which has actually happened within my personal knowledge, and there are many cases where the owners of land are desirous, in the interests of the community, of providing allotments within the reach of the dwellings of the working classes, and at a rent within the means of the working classes, and yet who, if no Amendment is made to the Undeveloped Land Duty, will be compelled to deprive the community of the advantages they now enjoy.

It seems to me that hon. Gentlemen opposite who have spoken look upon this ½d. tax as one which will be bad for market gardeners. I am supporting it because I think it is good for market gardeners, and likely to increase the number of market gardeners in the country. One hon. Member pointed out that there was a large amount of land in Surrey which had a large building value, but which at present the owner was not inclined to be allowed to be put to market gardening use for the very natural reason that the market gardener would have a large claim for compensation. But surely this tax provides an increased inducement to the owner of the land to allow it to be used for market gardening purposes. It is levied on the difference between the capital building value and its total value for agricultural purposes. If you do not use it for market gardens, that is what the tax is based upon. If, on the other hand, it is used for market gardens and the land is improved by manure, the value of that land for agricultural purposes will be £100. Therefore there will be a smaller tax to be paid by the landlord, and consequently an increased inducement to put it to market-garden purposes. That is one example of how the ½d. tax will increase the area of market gardens and reduce the area for grazing and other agricultural purposes. The right hon. Gentleman opposite said quite rightly that the landlord was making a loss in any case by keeping his building land out of the building market and using it for market gardens, because he only gets £3 an acre for market gardens, while he would get £10 if the land was used for building purposes. But he would make a bigger loss if he only got £1 an acre.

The value of the land for agricultural purposes is not affected by the use to which he puts it. The value is the same whether it is used as a field for grazing cattle upon or for market gardens, or for intensive cultivation.

The right hon. Gentleman will see at once that if the owner did not use the land for market garden purposes he would still have to pay on the difference. In any case surely it would be to his advantage to get £3 per acre instead of £1. He would have an additional advantage and incentive to get that sum because he has to meet the tax. Therefore, however you look at it, you will see that the tax must result in more land being put to market garden purposes. It would be an advantage to allow the land to be used for building purposes rather than for market gardens. Employment would be given in the building trade in building houses, and there would be employment for kitchen gardeners in growing vegetables for the house, and for men in making tennis lawns and what not. I therefore support the Government in resisting the Amendment.

The hon. Gentleman opposite (Mr. Wedgwood) says the tax is necessary to make a landowner use his land for market gardens rather than for agricultural purposes. I should have thought myself that if he could get a better rent for market gardens than for agricultural purposes that would have been quite enough to make him use it for market gardens. I do not think I need follow the hon. Member any further. I appeal to the Chancellor of the Exchequer at any rate to exempt land used for allotments from the tax. There are few more urgent needs for the working-class population of our great towns than to have an adequate supply of allotments in the neighbourhood of these towns, and to have them at a moderate rent. These allotments are not only a healthy recreation for the working classes in their leisure time, but also afford a very valuable addition to their domestic resources. I have some experience of that in my own Constituency in the city of York. There is a large and growing demand for allotments in the neighbourhood of that city. Those allotments are immediately taken up, and have led to small flower shows, vegetable shows, and undertakings of that

Division No. 448.]

AYES.

[11.20 p.m.

Anson, Rt. Hon. Sir William R.Baird, J. L.Barlow, Montague (Salford, South)
Archer-Shee, Major MartinBaldwin, StanleyBathurst, Hon. A. B. (Glouc., E.)
Ashley, Wilfrid W.Banner, John S. Harmood-Beach, Hon. Michael Hugh Hicks

character, which are greatly valued by the population and are in themselves most desirable. Now it is proposed to put a tax on this land which is let for these purposes, and I hardly imagine that the Chancellor would deny that the effect of putting that tax on will be to cause an increased rent to allotment holders. [HON. MEMBERS: "No."] I venture to hold the opposite opinion. The Chancellor of the Exchequer has said that this is a tax on the owner, but if you put a tax on the owner of land which he can let for such purposes, surely in nine cases out of ten that tax will be borne by the allotment holder.

The broad proposition is that if you put a tax on the owner of land, the owner will try to put it on the man who pays the rent. Will anyone tell me that if a man is willing to let his land at £3 an acre for allotment purposes, and the Chancellor of the Exchequer puts on a tax of 5s. or 10s. per acre on the owner, the owner will not try to get it from the tenant? Of course he will. The question is whether he will be able to get it in all cases. That depends on the demand for allotments. If the demand for allotments is, as it is, a large and growing one, in the neighbourhood of big towns, he will be able to get it. There may be cases, as the Chancellor of the Exchequer says, in which duty will not be charged on the land referred to in this Clause, but it is equally true that there are cases in which the tax will be paid for such land. My right hon. Friend the Member for East Worcestershire (Mr. A. Chamberlain) gave a very obvious case of land which is not yet actually ripe for building, but which has a large prospective value for building purposes. Why should you not exempt that land? This tax will fall most severely on the poor working classes and the small occupiers, and by exempting allotments you will relieve the working classes from having to pay increased rent for them.

Question put, "That the Clause be read a second time."

The House divided: Ayes, 103; Noes, 177.

Benn, Arthur Shirley (Plymouth)Haddock, George BahrPole-Carew, Sir R.
Benn, Ion H. (Greenwich)Hall, D. B. (Isle of Wight)Pollock, Ernest Murray
Bentinck, Lord H. CavendishHall, Fred (Dulwich)Pretyman, Ernest George
Bird, A.Hamilton, Marquess of (Londonderry)Pryce-Jones, Col. E.
Boyton, J.Harris, Henry PercyRothschild, Lionel de
Bridgeman, William CliveHelmsley, ViscountRoyds, Edmund
Bull, Sir Willam JamesHenderson, Major H. (Berks, Abingdon)Rutherford, John (Lancs., Darwen)
Burn, Col. C. R.Hills, John Waller (Durham)Sanders, Robert A.
Butcher, J. G.Hoare, Samuel John GurneySanderson, Lancelot
Carlile, Sir Edward HildredJardine, E. (Somerset, E.)Sandys, G. J. (Somerset, Wells)
Cassel, FelixKerr-Smiley, Peter KerrScott, Sir S. (Marylebone, W.)
Castlereagh, ViscountKerry, Earl ofSmith, Harold (Warrington)
Cecil, Lord R. (Herts, Hitchin)Kirkwood, John H. M.Starkey, John Ralph
Chaloner, Col. R. G. W.Knight, Captain Eric AyshfordStaveley-Hill, Henry
Chamberlain, Rt. Hon. J. A. (Worc'r.)Larmor, Sir J.Stewart, Gershom
Chaplin, Rt. Hon. HenryLaw, Rt. Hon. A. Bonar (Bootle)Swift, Rigby
Courthope, George LoydLewisham, ViscountSykes, Mark (Hull, Central)
Craig, Norman (Kent, Thanet)Locker-Lampson, G. (Salisbury)Talbot, Lord E.
Craik, Sir HenryLockwood, Rt. Hon. Lt.-Col. A. R.Terrell, George (Wilts, N. W.)
Dixon, C. H.MacCaw, Wm. J. MacGeaghTouche, George Alexander
Eyres-Monsell, Bolton M.Macmaster, DonaldWard, Arnold (Herts, Watford)
Fell, ArthurMalcolm, IanWarde, Col. C. E. (Kent, Mid)
Fletcher, John Samuel (Hampstead)Mills, Hon. Charles ThomasWheler, Granville C. H.
Forster, Henry WilliamMorrison-Bell, Capt. E. F. (Ashburton)Williams, Col. R. (Dorset, W.)
Gardner, ErnestMorrison-Bell, Major A. C. (Honiton)Willoughby, Major Hon. Claud
Gibbs, George AbrahamMount, William ArthurWorthington-Evans, L.
Goldsmith, FrankNeville, Reginald J. N.Yate, Col. C. E.
Gordon, Hon. John Edward (Brighton)Newdegate, F. A.Younger, Sir George
Goulding, Edward AlfredNicholson, Wm. G. (Petersfield)
Grant, J. A.Orde-Powlett, Hon. W. G. A.
Greene, Walter RaymondPease, Herbert Pike (Darlington)

TELLERS FOR THE AYES.—Mr. Newman and Mr. Campion.

Gretton, JohnPeel, Captain R. F. (Woodbridge)
Guinness, Hon. W. E.Peel, Hon. W. R. W. (Taunton)

NOES.

Abraham, William (Dublin Harbour)Elverston, Sir HaroldLambert, George (Devon, S. Molton)
Acland, Francis DykeEssex, Richard WalterLansbury, George
Adamson, WilliamEsslemont, George BirnieLaw, Hugh A. (Donegal, West)
Ainsworth, John StirlingFalconer, JamesLawson, Sir W. (Cumb'rld, Cockerm'th)
Allen, Arthur Acland (Dumbartonshire)Ferens, Thomas RobinsonLevy, Sir Maurice
Allen, Charles Peter (Stroud)Ffrench, PeterLewis, John Herbert
Armitage, R.Fiennes, Hon. Eustace EdwardLow, Sir F. (Norwich)
Baker, H. T. (Accrington)Furness, Stephen W.Lundon, Thomas
Baker, Joseph Allen (Finsbury, E.)George, Rt. Hon. D. LloydLynch, Arthur Alfred
Barran, Sir John N. (Hawick, B.)Gibson, Sir James PuckeringMacdonald, J. M. (Falkirk Burghs)
Barton, WilliamGill, Alfred HenryM'Curdy, C. A.
Beauchamp, Sir EdwardGladstone, W. G. C.McKenna, Rt. Hon. Reginald
Benn, W. T. (T. H'mts., St. George)Guest, Hon. Frederick E. (Dorset, E.)M'Laren, Hon. H. D. (Leics.)
Bentham, G. J.Gwynn, Stephen Lucius (Galway)M'Laren, Hon. F. W. S. (Lincs., Spalding)
Birrell, Rt. Hon. AugustineHackett, J.Markham, Sir Arthur Basil
Black, Arthur W.Hall, F. (Yorks, Normanton)Marks, Sir George Croydon
Bowerman, Charles W.Hancock, John GeorgeMarshall, Arthur Harold
Brunner, John F. L.Harcourt, Robert V. (Montrose)Meehan, Patrick A. (Queen's County)
Burke, E. Haviland-Hardie, J. Keir (Merthyr Tydvil)Montagu, Hon. E. S.
Burns, Rt. Hon. JohnHarvey, A. G. C. (Rochdale)Morrell, Philip
Burt, Rt. Hon. ThomasHarvey, W. E. (Derbyshire, N. E.)Morton, Alpheus Cleophas
Byles, Sir William PollardHaslam, James (Derbyshire)Murray, Capt. Hon. A. C.
Carr-Gomm, H. W.Haslam, Lewis (Monmouth)Needham, Christopher T.
Cawley, Sir Frederick (Prestwich)Havelock-Allan, Sir HenryNolan, Joseph
Cawley, Harold T. (Heywood)Haworth, Sir Arthur A.Norton, Captain Cecil William
Chancellor, H. G.Hayden, John PatrickO'Brien, Patrick (Kilkenny)
Chapple, Dr. William AllenHelme, Norval WatsonO'Connor, John (Kildare, N.)
Clough, WilliamHenderson, J. M'D. (Aberdeen, W.)O'Connor, T. P. (Liverpool)
Clynes, John R.Henry, Sir Charles S.O'Doherty, Philip
Collins, Stephen (Lambeth)Higham, John SharpOgden, Fred
Condon, Thomas JosephHinds, JohnO'Grady, James
Cornwall, Sir Edwin A.Hobhouse, Rt. Hon. Charles E. H.O'Shee, James John
Cowan, William HenryHodge, JohnParker, James (Halifax)
Crawshay-Williams, EliotHolt, Richard DurningPearce, Robert (Staffs, Leek)
Crumley, PatrickHope, John Deans (Haddington)Pearson, Hon. Weetman H. M.
Dalziel, Sir James H. (Kirkcaldy)Horne, C. Silvester (Ipswich)Pease, Rt. Hon. Joseph A. (Rotherham)
Davies, E. William (Eifion)Howard, Hon. GeoffreyPower, Patrick Joseph
Davies, Timothy (Lincs., Louth)Hughes, S. L.Price, C. E. (Edinburgh, Central)
Dawes, James ArthurIsaacs, Rt. Hon. Sir RufusRaffan, Peter Wilson
De Forest, BaronJohnson, WilliamRaphael, Sir Herbert Henry
Denman, Hno. Richard DouglasJones, Edgar (Merthyr Tydvil)Reddy, M.
Doris, WilliamJones, H. Haydn (Merioneth)Rendall, Athelstan
Duncan, C. (Barrow-in-Furness)Jones, Leif Stratten (Notts, Rushcliffe)Richardson, Thomas (Whitehaven)
Edwards, Clement (Glamorgan, E.)Jones William (Carnarvonshire)Roberts, Charles H. (Lincoln)
Edwards, Enoch (Hanley)Jones, W. S. Glyn- (T. H'mts., Stepney)Robertson, Sir G. Scott (Bradford)
Edwards, Sir Francis (Radnor)Jowett, Frederick WilliamRoberts, Sir J. H. (Denbighs)
Edwards, John Hugh (Glamorgan, Mid)Kellaway, Frederick GeorgeRobertson, John M. (Tyneside)
Elibank, Rt. Hon. Master ofKing, J. (Somerset, N.)Robinson, Sidney

Roch, Walter F. (Pembroke)Taylor, John W. (Durham)Wedgwood, Josiah C.
Roe, Sir ThomasTennant, Harold JohnWhite, J. Dundas (Glas., Tradeston)
Rowlands, JamesThorne, G. R. (Wolverhampton)White, Patrick (Meath, North)
Samuel, Rt. Hon. H. L. (Cleveland)Toulmin, Sir GeorgeWiles, Thomas
Scanlan, ThomasTrevelyan, Charles PhilipsWilliams, John (Glamorgan)
Seely, Col. Rt. Hon. J. E. B.Ure, Rt. Hon. AlexanderWilliams, P. (Middlesbrough)
Shortt, EdwardWadsworth, JohnWilson, Hon. G. G. (Hull, W.)
Smith, Albert (Lancs., Clitheroe)Walters, John TudorWilson, W. T. (Westhoughton)
Stanley, Albert (Staffs., N. W.)Ward, John (Stoke-upon-Trent)Wood, Rt. Hon. T. McKinnon (Glas.)
Strauss, Edward A. (Southwark, West)Ward, W. Dudley (Southampton)
Summers, James WoolleyWatt, Henry A.

TELLERS FOR THE NOES.—Mr. Illingworth and Mr. Gulland.

Sutton, J. E.Webb, H.

Reduction Of Excise Duty On Motor Spirit Made In Great Britain And Ireland

(1) As from the first day of January, nineteen hundred and twelve, the Excise Duty payable under Sub-section (2) of Section eighty-four of The Finance Act, 1910, on motor spirit made in Great Britain or Ireland shall be reduced to three halfpence per gallon.

(2) This Section shall be construed with Section eighty-four of The Finance Act, 1910.

The object of this Clause is to make an alteration in the duties upon motor spirit made in Great Britain and Ireland. The intention of the Clause is quite obvious, and in recommending it to the Chancellor of the Exchequer there are one or two observations I desire to make with reference to the industry in order to secure his support. First of all, I do not in any way object to the general principle of the tax upon motor spirit because I recognise that it is a tax which produces a very considerable sum, and an increasing sum. The first year it was put on it produced a sum of £320,000, and that has now gone up, according to the last estimates, to a sum of £440,000. As I say, I do not object to the principle of the tax, but in view of the enormous development which has already taken place since the tax was first introduced in this particular industry, and in view of the still greater development which we have every reason to anticipate will take place ill the next few years, I think even now it is desirable to reconsider this question, and see whether this tax could not be put on in a more equitable way, and in such a manner as to involve the least possible hardship upon the consumers of petrol. I may relieve the anxiety of the right hon. Gentleman at once on this question by saying that so far as petrol is concerned, it is obviously a tax which is entirely paid by the consumer of the article.

This industry of petrol production is growing very rapidly. So far as the production of crude petroleum is concerned, upon which the industry depends, there are no definite figures since 1908, and in that year 63 per cent. of the total came from the United States. Unfortunately only 2 per cent. came from any part of the British Empire—from Burmah, Assam, and the Dominion of Canada. As far as the output of petrol in European countries is concerned, 60 per cent. is controlled by the great combine of the Royal Dutch and Shell Company. On the other hand, the Standard Oil Company, which is not a great factor in the European petrol market, to a very large extent controls the illuminating oil throughout Europe generally. The industry of Great Britain, so far as petrol is concerned, is practically controlled by the Royal Dutch combine.

When the right hon. Gentleman introduced the tax on motor spirit he was exceedingly fortunate, because very shortly afterwards the price of petrol was lowered owing to a war of prices being entered into by the Royal Dutch combine and the Standard Oil Company, by way of retaliation by the former firm because the Standard Oil Company had cut prices in kerosene in the Eastern market. Therefore the tax was not felt, owing to the competition between these two great organisations. The situation is now somewhat changed. A reconciliation has practically been effected between these rival organisations, and there has been a tendency for prices to go up in consequence, which tendency will probably continue. Our experience with regard to petrol spirit surely shows that the idea that because this country is a free trade country therefore we are relieved from the undesirable operations of trusts and combines cannot be in the least degree substantiated. I do not suggest that the combine is likely to raise prices to a prohibitive figure. There is an enormous supply of this article from which motor spirit can be obtained. In addition, the motor spirit represents extra profit on the original undertaking, because it is a product for which until a few years ago there was small demand, the greater portion of it being thrown away or burnt.

The object of the new Clause is, while leaving the customs tax on the ready refined petrol spirit coming into this country exactly as it is at present, to reduce by 50 per cent. the Excise Duty upon the petrol spirit refined in Great Britain and Ireland. I hope the right hon. Gentleman will not say that any suggestion of this kind is inconsistent with the policy of free trade. So far as this question is concerned, I hope he will have the courage to rise above what I may describe as a foolish consistency. His object should surely be to do his best for British industries, to frame his taxes where they are necessary in such a way that they shall stimulate employment and bring more capital and more work to this country. I would urge upon him, if possible, to accept this view, and to follow his own excellent example in the Patents Act, 1907. The operation of this new Clause would have exactly the same effect on the petrol industry as the Patents Act has had upon the various industries concerned. What was the result of the Patents Act? I am not aware that the right hon. Gentleman has been seriously attacked by his own followers because the Patents Act represented any lapse from the principles of Free Trade, and in operation that Act has been in every way satisfactory to the industrial classes of the country. Since the introduction of that Act, I understand, about sixty foreign firms found it expedient to come into this country, and to set up their factories in Great Britain.

On the other hand, thirty-five British firms are now, under the operation of the Act, manufacturing on royalty terms for foreign firms who do not think it worth while to establish their individual factories in this country. I am told—I give it subject to correction—that the result of the operation of the Act of 1907 has been to give additional employment to no less than ten thousand persons in this country; that it has induced a million additional capital to be spent on plant, etc., whilst new industries have been introduced. If this process of refining motor spirit had been a patent process it would automatically have come under the operation of that Act. I do suggest that because it does not happen to be a patent process that we should not lose all the benefits which we should gain under the Patents Act. I believe if this new Clause were accepted the result would be that we should build up a new great refining industry in this country; that it would encourage employment and the investment of capital. If in the future the right hon. Gentleman is charged with inconsistency to free trade principles he would, I say, be perfectly justified in laughing at his accusers. I believe we are quite justified in saying that the result of a policy of this character in regard to this particular industry would have the same results as the Patents Act. It would lead to the investment of capital here. Those great organisations, the Standard Oil Company, the Shell Company, and the Royal Dutch Company, would be practically obliged to start their refineries here. Thus employment would be given to a very large number of people, and those the very people whom we desire to benefit—the unskilled labourer. I am told that in the production of this motor spirit a very large quantity of unskilled labour is required. Another advantage that we should gain from the adoption of this policy would be an increase of shipping rates, because when the crude oil was carried here, obviously the freight would be heavier than that in respect to the refined spirit merely.

There is another advantage which I would urge upon the right hon. Gentleman, and that is that it would be an encouragement to the storage of crude oil here in Great Britain. I do not want to overstate the case, but certainly some portion of our naval supremacy, and some portion of that undisputed position which our merchant shipping occupies amongst the mercantile marines of the world must be due to the monopoly we possess in steam coal. It is obvious that changes are taking place. The steam engine is admittedly a wasteful source of power, and some experts have come to the conclusion that the internal combustion engine is very likely to a large extent to take the place of the steam engine, especially for marine purposes. If that is so we shall have to look to our position in the future. We shall not occupy the same situation as we do at the present time with our monopoly of steam coal, and as I pointed out earlier, unfortunately, so far as oil is concerned the British Empire only produces about two per cent. out of the world's supplies. In these circumstances surely it should be our policy to give every encouragement to the storage of crude oil: it is a process which will have to be gradually brought about for the use of our Mercantile Marine, and what is still more important for the use of our Navy in time of war. I urge upon the right hon Gentleman in view of these developments whether he could not reconsider the whole question as to altering the incidence of this tax and whether he could not rearrange the taxes in some way in the manner I have indicated in this Clause. Even if there was a slight loss of revenue, I believe we should be more than compensated by the other results of the change of policy which I have indicated. We should be encouraging the storage of crude oil in this country which, I believe, will be a necessity of the future; we should be able to build up a new industry, and to give encouragement to capital, and what is perhaps more important, we should be able to give increased employment to labour.

I beg to second the Motion. It is perfectly obvious that the motor industry will be the great industry of the future. We ought to try to keep the industry in this country. We ought to build the car, and make the tyre, and prepare the motor spirit, and manufacture from the crude oil. I was greatly struck by the arguments of my hon. Friend when he spoke of the demand of the Navy, and the Mercantile Marine as well, for petrol. We ought to try and have the crude oil brought over here and refined in this country, and by doing so we should possibly be able to combat the machinations of the trusts, such as the Standard Oil Company, the Shell Oil Company, and others. There are many places in this country where we could set up manufactures for crude oil, and where we could get crude oil turned into petrol for use in our ships.

The hon. Member who moved this Clause made a very interesting speech, but I feel sure he will not expect me, when dealing with the Finance Bill, to follow him into all the arguments he used and which he stated with so much ability and skill. To put the matter shortly, the hon. Member's object is to secure protection for this industry. That may be a very laudable object, but the hon. Member must have articipated that the reply would be that it would be contrary to the Free Trade principles of the Government to indulge in any such Protectionist views at the expense of the taxpayers. The hon. Member dealt with a variety of subjects. He told us that the effect of his proposal would be to stimulate industry and create employment. In regard to all these subjects I must exercise considerable restraint upon myself and decline to follow the hon. Member, pleading not only the lateness of the hour but also the lateness of the Session and the impossibility of bringing the Debate on the Finance Bill to a conclusion within a reasonable time if I attempted to follow him. The hon. Member quoted as an illustration the Patents Act. I am grateful to him for the tribute he paid to the Chancellor of the Exchequer for the introduction of that Act and to the useful results to which he has borne testimony. This, however, is the old point as to whether that was a Protectionist Act or not, and every hon. Member of this House is quite familiar with the arguments. I trust, therefore, that the hon. Member will not think me disrespectful if I leave his arguments on this question where they are, and say that we must stand firm to the principles upon which we have commanded a majority of votes in this country, and we cannot go back upon the views which have been so endorsed.

I wish to point out this interesting feature. My hon. Friend who made this proposition made no reference whatever to any of his views on Protection. He put his case with regard to this particular motor industry quite fairly and impartially, and yet the right hon. Gentleman has made no attempt to answer it on the merits. The case for the Government is very weak indeed when they have to take refuge in the general principles which are held to be sacrosanct by hon. Gentlemen opposite.

Proposed new Clause negatived.

Grant Of Licences For Sale Of Spirits For Medicinal Purposes, Etc, On Payment Of A Reduced Duty

(1) Any manufacturing or wholesale chemist and druggist who requires a licence for the purposes only of selling rectified spirits of not less than forty-three degrees above proof, for medicinal purposes, to duly qualified medical practitioners or duly registered pharmaceutical chemists or chemists and druggists, or persons requiring the spirits for use for scientific purposes in any laboratory, and undertakes not to sell spirits otherwise than for those purposes and to those persons, may obtain a licence on payment of a reduced duty of ten pounds.

(2) The Commissioners of Customs and Excise may attach such conditions to any licence granted on payment of a reduced duty under this section as they think expedient for the protection of the revenue.

(3) If any person holding a licence granted on payment of a reduced duty under this Section sells spirits in any manner contrary to his undertaking, or to the conditions attached to his licence, he shall be liable in respect of each offence to an Excise penalty of fifty pounds.

The first paragraph of my Amendment provides for a modified licence at a reduced cost for manufacturing and wholesale chemists. The position at present is that a wholesale chemist cannot sell less than two gallons of spirit at one time. Doctors and chemists require the spirit very often in much less quantities, and in order to do this a wholesale house requires to take out a licence based upon the value of their premises, which means a £50 licence.

My Amendment, as it appears on the Paper, contains a Sub-section enabling a chemist to obtain a licence to sell medicated wines on payment of a reduced duty of 10s., but that is a provision the Government are not able to accept. I believe they have an idea it will be regarded as a controversial matter. I therefore move my Amendment in an amended form, so that all it now does is to allow wholesale chemists to supply these spirits to these special people for a reduced licence of £10, and I think perhaps in that form the House will be prepared to agree to it. If so, as most other people, I must be thankful for small mercies.

Question, "That the Clause be read a second time," put, and agreed to.

Clause added to the Bill.

Maximum Limit To Excise Licence Duty 10 Edw 7, C 8

Notwithstanding anything contained in The Finance (1909–10) Act, 1910, the duty of excise chargeable in respect of a publican's licence shall not in any case exceed the sum of two hundred and fifty pounds, and the duty payable in respect of a beer-house licence shall not in any case exceed one hundred and sixty-six pounds thirteen? shillings and fourpence.

This is of the greatest possible interest to the licensed trade in London. The Government themselves fixed a limit which was in fact in practice for two years. A maximum was fixed of £500, and beyond that no Licence Duty was charged. It is admitted by those at any rate who have the advantage of the advice of the officers of the Crown that in those cases where the licence exceeds £500 annual value there is an enormous charge far beyond the value of the trade done on the premises to which the licence is attached. That is very serious. I think an unanswerable case is put forward by the very condition of the licensed trade in London. And it is not altogether confined to London. There is also the same condition, and the same charges are made in regard to the larger premises in county towns. This argument has been used very effectively, and I think the Chancellor of the Exchequer in the remarks he made to the House last night admitted that there was great force in it. The charge on a valuation of £500 is almost a charge on the sum expended by the owner of licensed premises in fitting them up for the purposes of the trade. The House agreed last night that it was not in the interest either of the licensed trade or of the public that licensed business should be done in small inconvenient premises. It was better that in connection with premises entirely devoted to the exploitation of the sale of drink, there should be facilities for reasonable recreation and rest. I do not want to expand this argument unduly at this late hour of the night, but I do venture to press on the Chancellor of the Exchequer the fact that if he would accept this proposal he would very sensibly relieve the licensed trade, and at the same time would not get beyond the point which he originally fixed himself for the extra Licence Duty.

I do not know that I can add anything useful to what I said in a discussion on practically the same subject last night. The hon. Gentleman proposes, before we have a revaluation, to impose a maximum limit on the duties fixed by the Bill of 1909–10. By the first part of his proposal he would reduce the duty on about 200 public houses. I am not aware of a single case where the duty does exceed £166, and therefore that part of his new Clause would be practically inoperative. But the first part would have the effect of reducing the Licence Duty considerably in about 200 cases, and it is quite impossible for me to agree to that. We discussed this point at very great length yesterday on a kindred question to that raised in this new Clause.

I fully appreciate the arguments used by the right hon. Gentleman, and in that part of my speech I was stopped by Mr. Speaker.

12.0 M.

At any rate, when I made that speech I was replying to the right hon. Gentleman (Mr. Austen Chamberlain). For the reasons I stated then I do not think it is possible at this stage, and before we get the revaluation, to lop off different parts of the scale. I hope the hon. Gentleman will be satisfied with his protest.

Question, "That the Clause be read a second time," put, and negatived.

I beg to move that the following new Clause be read a second time:—

Separate Areas Within Boundaries Of Enlarged Boroughs

Where the boundaries of any borough are extended or the boundaries of a new borough are fixed so as to include any previously existing borough or urban or rural district, or part thereof, the original borough and the included or partly included boroughs and urban or rural districts, as previously existing, shall be deemed to be separate areas for the purpose of determining the minimum duties payable for publicans and beerhouse licences under Scale 3 in the First Schedule to The Finance (1909–10) Act, 1910, for such period, not exceeding fifteen years, as the Commissioners of Customs and Excise may determine, having regard to the extent to which the amount of any business carried on in fully-licensed premises and beerhouses situate in any of those areas is, or is likely to be, affected by the inclusion of the areas within one borough. And during the same period the closing hours prescribed by The Licensing (Consolidation) Act, 1910, shall remain the same for licensed premises in any of the said boroughs or districts as they would have been if those boroughs and districts had not been included within one borough. I should like formally to move this now because it is the only possible chance of moving a Clause of this kind at all.

On a point of Order. This is substantially the point dealt with yesterday on the Motion of the hon. Member for Sheffield. It is the question of the extension of borough boundaries, and its effect on the Licence Duties. That was discussed yesterday, and I thought it was disposed of then.

I have no knowledge of what occurred in Committee. The fact that it was discussed in Committee would not preclude it from being discussed upon Report, although there may be, on the merits, no good reason for accepting it.

I do not intend to make a speech upon it, but I think the Clause the right hon. Gentleman has in the Bill does not in any way meet the case. Other Members have serious cases to bring forward, notably that of Birmingham, where the minimum duty is put up from £20 to £30. Already it is a very heavy burden, and the right hon. Gentleman ought to say something on that.

I beg to second the Motion. This matter arose on the Revenue Bill in the case of one borough represented by a Member of the Government. The Government admitted that case, saying that that borough was different from all other boroughs in the country, and that special provisions should apply to Dewsbury only. We on this side took objection to a very proper principle being applied to only one borough, which happened to be represented by a Member of the Government. The Government then withdrew their Clause. There is a great and real hardship in the case of an arbitrary extension of a boundary without any reference at all to the licensed trade. In many cases the values of the licensed houses are supposed to be raised, and in some cases nearly doubled. As a matter of fact, there is no greater trade done in the house, yet those premises are taxed, on a larger scale of minimum duties because for municipal purposes the borough boundaries are extended.

We suggest that the hardship which the Government admitted in the case of Dewsbury should not be inflicted upon other districts where borough boundaries are extended. There should be a period of grace during which matters should continue upon the footing which while the licensed houses were supposed to be within a rural district, was considered quite adequate. The matter might then be reconsidered, and by that time the House of Commons, I hope, will be universally convinced that the scale of minimum duties which is involved in the extension of borough boundaries into rural districts is entirely unjustifiable by any process of reason or justice or equity, and that it is a device adopted by the Government to provide more revenue and increased Licence Duties, and if possible in some cases reduce the number of licences by taxing them out of existence. There never was any adequate pretence made of justifying the procedure that this Clause proposes to modify.

I cannot agree that there is not an increase in trade. The reason for the extension of the boundaries is the growth of the population which has become an essential part of the borough. Instead of being a rural area with a scattered population they suddenly find themselves part of the town with increased population, but no increase in the number of licences. Having got the benefit of the incorporation of the town, I do not think

Division No. 449.]

AYES.

[12.15 a.m.

Amery, L. C. M. S.Forster, Henry WilliamLocker-Lampson, G. (Salisbury)
Archer-Shee, Major M.Gibbs, G. A.Lockwood, Rt. Hon. Lt.-Col. A. R.
Ashley, W. W.Goldsmith, FrankMills, Hon. Charles Thomas
Baird, J. L.Gordon, Hon. John Edward (Brighton)Morrison-Bell, Capt. E. F. (Ashburton)
Baldwin, StanleyGrant, J. A.Mount, William Arthur
Banner, John S. Harmood-Greene, W. R.Neville, Reginald J. N.
Bathurst, Hon. A. B. (Glouc., E.)Gretton, JohnNicholson, William G. (Petersfield)
Beach, Hon. Michael Hugh HicksGuinness, Hon. Walter EdwardOrde-Powlett, Hon. W. G. A.
Benn, Arthur Shirley (Plymouth)Haddock, George BahrPease, Herbert Pike (Darlington)
Benn, Ion Hamilton (Greenwich)Hall, D. B. (Isle of Wight)Peel, Capt. R. F. (Woodbridge)
Bridgeman, W. CliveHall, Fred (Dulwich)Pollock, Ernest Murray
Burn, Colonel C. R.Hamilton, Marquess of (Londonderry)Pretyman, Ernest George
Butcher, John GeorgeHarris, Henry PercyPryce-Jones, Col. E.
Campion, W. R.Henderson, Major H. (Berks, Abingdon)Rothschild, Lionel de
Carlile, Sir Edward HildredHills, John WallerRutherford, John (Lancs., Darwen)
Cassel, FelixHoare, S. J. G.Sanders, Robert Arthur
Chaloner, Colonel R. G. W.Hunt, RowlandScott, Sir S. (Marylebone, W.)
Chamberlain, Rt. Hon. J. A. (Worc'r.)Jardine, Ernest (Somerset, East)Smith, Harold (Warrington)
Courthope, George LoydKerr-Smiley, Peter KerrStarkey, John Ralph
Craig, Norman (Kent, Thanet)Kirkwood, J. H. M.Staveley-Hill, Henry
Dixon, C. H.Law, Rt. Hon. A. Bonar (Bootle)Strauss, Edward A. (Southwark, West)
Eyres-Monsell, Bolton M.Lewisham, ViscountSwift, Rigby

it is unfair, as the municipal corporations profit by getting the rates upon them, that the Imperial Exchequer should share the general advantage.

I represent a place called Urdington, which has lately been added to Birmingham. It has a population of 16,368 people. A year ago it had to pay a minimum rate of licensed victuallers £20, and beerhouses £13 a year. Through being added to Greater Birmingham they now pay licensed victuallers £35 a year and beerhouses £23 10s. a year. The right hon. Gentleman says that the reason these places were added to cities is because they are being built upon. That is true to a certain extent, but in this particular district while certain districts are being built upon others are not, and it is a very great hardship. In these places there are only forty licensed houses, which is not a very large proportion. Fourteen have full licences, three have beer on licences, and twenty-three have beer off licences. I do say that certainly in the rural parts recently added to the city of Birmingham it is a very great hardship that these people have to pay these Licence Duties. I know that this question was brought up earlier in the Session. I am sorry I was not here yesterday, but even at the eleventh hour I urge the Chancellor of the Exchequer to do what I consider justice to these people. If my hon. Friend goes to a division, I shall certainly support him; I shall have greater pleasure in supporting this proposal than almost any other since I have been a Member of the House.

Question put, "That the Clause be read a second time."

The House divided: Ayes, 75; Noes, 138.

Sykes, Mark (Hull, Central)Ward, A. S. (Herts, Watford)Yate, Col. C. E.
Talbot, Lord E.Wheler, Granville C. H.
Terrell, G. (Wilts, N. W.)Williams, Col. R. (Dorset, W.)

TELLERS FOR THE AYES.—Sir George Younger and Mr. Newdegate.

Touche, George AlexanderWilloughby, Major Hon. Claude

NOES.

Abraham, William (Dublin Harbour)Gibson, Sir James P.Norton, Capt. Cecil W.
Acland, Francis DykeGill, A. H.O'Brien, Patrick (Kilkenny)
Adamson, WilliamGladstone, W. G. C.O'Connor, John (Kildare, N.)
Ainsworth, John StirlingGulland, John WilliamO'Doherty, Philip
Allen, Arthur Acland (Dumbartonshire)Gwynn, Stephen Lucius (Galway)Ogden, Fred
Allen, Charles Peter (Stroud)Hackett, J.O'Shee, James John
Baker, Harold T. (Accrington)Hancock, John GeorgeParker, James (Halifax)
Barran, Sir John N. (Hawick)Harcourt, Robert V. (Montrose)Pearce, Robert (Staffs, Leek)
Barton, WilliamHardie, J. Keir (Merthyr Tydvil)Pease, Rt. Hon. Joseph A. (Rotherham)
Benn, W. W. (Tower Hamlets, St. Geo.)Harvey, W. E. (Derbyshire, N. E.)Price, C. E. (Edinburgh, Central)
Bentham, George JacksonHaslam, Lewis (Monmouth)Primrose, Hon. Neil James
Birrell, Rt. Hon. AugustineHavelock-Allan, Sir HenryRaffan, Peter Wilson
Black, Arthur W.Haworth, Sir Arthur A.Reddy, M.
Bowerman, C. W.Hayden, John PatrickRendall, Athelstan
Brunner, J. F. L.Helme, Norval WatsonRoberts, Charles H. (Lincoln)
Burns, Rt. Hon. JohnHenry, Sir Charles S.Robertson, Sir G. Scott (Bradford)
Carr-Gomm, H. W.Higham, John SharpRobertson, J. M. (Tyneside)
Cawley, Sir Frederick (Prestwich)Hobhouse, Rt. Hon. Charles E. H.Robinson, Sidney
Cawley, Harold T. (Heywood)Hodge, JohnRoch, Walter F. (Pembroke)
Chancellor, H. G.Horne, C. Silvester (Ipswich)Samuel, Rt. Hon. H. L. (Cleveland)
Chapple, Dr. William AllenHughes, Spencer LeighSamuel, S. M. (Whitechapel)
Clough, WilliamIllingworth, Percy H.Seely, Col. Rt. Hon. J. E. B.
Clynes, John R.Isaacs, Rt. Hon. Sir RufusShortt, E.
Collins, Stephen (Lambeth)Johnson, W.Smith, Albert (Lancs., Clitheroe)
Condon, Thomas JosephJones, H. Haydn (Merioneth)Stanley, Albert (Staffs, N. W.)
Cornwall, Sir Edwin A.Jones, Leif Stratten (Notts, Rushcliffe)Sutton, John E.
Cowan, W. H.Jones, William (Carnarvonshire)Taylor, John W. (Durham)
Craig, Herbert J. (Tynemouth)Jones, William S. Glyn- (Stepney)Tennant, Harold John
Crumley, PatrickKeating, M.Thorne, G. R. (Wolverhampton)
Davies, Ellis William (Eifion)King, J. (Somerset, N.)Toulmin, Sir George
Davies, Timothy (Lincs., Louth)Lambert, George (Devon, S. Molten)Trevelyan, Charles Philips
Dawes, J. A.Law, Hugh A. (Donegal, West)Wadsworth, J.
Denman, Hon. Richard DouglasLawson, Sir W. (Cumb'rld, Cockerm'th)Walters, John Tudor
Doris, WilliamLevy, Sir MauriceWard, W. Dudley (Southampton)
Duncan, C. (Barrow-in-Furness)Lewis, John HerbertWatt, Henry Anderson
Edwards, Clement (Glamorgan, E.)Lundon, T.Webb, H.
Edwards, Enoch (Hanley)M'Curdy, C. A.Wedgwood, Josiah C.
Edwards, Sir Francis (Radnor)McKenna, Rt. Hon. ReginaldWhite, James Dundas (Glasgow)
Edwards, John Hugh (Glamorgan, Mid)M'Laren, Hon. F. S. W. (Lincs., Spalding)Wiles, Thomas
Elibank, Rt. Hon. Master ofM'Laren, Hon. H. D. (Leics.)Williams, Penry (Middlesbrough)
Elverston, Sir HaroldMarkham, Sir Arthur BasilWilson, Hon. G. G. (Hull, W.)
Esslemont, George BirnieMarshall, Arthur HaroldWilson, W. T. (Westhoughton)
Falconer, JamesMeehan, Patrick A. (Queen's Co.)Winfrey, Richard
Ferens, Thomas RobinsonMontagu, Hon. E. S.Wood, Rt. Hon. T. McKinnon (Glas.)
Ffrench, PeterMurray, Captain Hon. Arthur C.
Fiennes, Hon. Eustace EdwardNeedham, Christopher T.

TELLERS FOR THE NOES.—Captain Guest and Mr. Geoffrey Howard.

George, Rt. Hon. D. LloydNolan, Joseph

Relief In Respect Of Income Tax Under Schedule A

"(1) Notwithstanding anything contained in Section thirty-five of the Finance Act, 1894, in respect of Income Tax imposed under Schedule A, the amount of the assessment shall, for the purposes of collection be reduced by a sum equal to one-fourth part thereof—

  • (a) in the case of an assessment on lands, inclusive of the farmhouse and other buildings, if any; and
  • (b) in the case of an assessment on any house, the annual value of which, as adopted for the purpose of Income Tax under Schedule A, does not exceed eight pounds.
  • (2) Section 69 of the principal Act is hereby repealed."

    The House will remember that Section 69 of the principal Act inserted a certain measure of relief from Income Tax under Schedule A in certain cases. The case of assessments on land inclusive of farmhouses and other farm buildings, and the case of assessments on houses, the assessment of which did not exceed £8; in other words, labourers' cottages. I do not propose by the new Clause which I am moving to deal with any larger class of property and hereditaments than those already dealt with by Section 69 of the right hon. Gentleman's Act. I think that what has been happening under that Section is generally admitted. It is generally admitted that whenever a claim has been made for rebate under that Act it has been successful, and that the experience of the Treasury has been that the 25 per cent. rebate from the assessment for Income Tax under Schedule A for repairs, insurance, and management under that Section has always been maintained wherever a case has come under the notice of the Treasury. It will also be admitted that there are two special reasons why it should no longer be necessary, once it is proved that these claims can be successfully made, to make a claim under the flat rate. One reason is that an increased amount of trouble has admittedly been caused to the staff at Somerset House—trouble which is quite incommensurate with the amount of saving to the Treasury through the work which the staff does.

    The second reason is that the cases in which failure to obtain rebate under Section 69 of the Finance Act has arisen are the cases of very small owners who have not got agents, estate staffs, and the other necessary assistance to enable them to make the claims which the larger landowners can make under the Section. It is perfectly easy on a large estate to fill up Form 99 in claiming rebate, and to give all the necessary particulars. I do not say there is no trouble, but there is no great difficulty about it. The books dealing with estate expenditure are there to hand, the staff is there to do the work, and the big landowners have no particular difficulty in respect of matters of that kind. With a small landowner it is a very different matter. He has not got the staff or the agents; in many cases he has not got the elaborate form of book-keeping, and it may be very difficult for him to give the necessary particulars entitling him to claim this rebate in respect of insurance and repairs. In every case where 25 per cent. is spent in repairs he must have the particulars at hand. But the claim which may be made on the Treasury this year, next year, and in the year following in that respect, will each year become smaller, and at the end of five years after the passing of the principal Act it will certainly cease altogether.

    Let me make my meaning clear. The claim under Form 99 is based on the expenditure not of the preceding year, but of the five preceding years. Many small owners may possibly not have got carefully-kept books showing in detail the expenditure on this class of work for five years back, but since the passing of the Act every single owner has kept the necessary accounts to enable him to claim in future, and five years after the passing of the Act, only two and a half years off now, every owner, large or small, whether he has to keep his own accounts or whether he has experts to do it, will be able to make a successful claim under Section 69 of the principal Act. Unless the right hon. Gentleman who will deal with this matter is able to show—and I know he cannot show—that in any substantial number of cases a successful claim cannot be made for this rebate, I do not think this Clause can be reasonably resisted. It is moved not in the interests of the large landowner, but of the small man, who has not had the advantages many of the larger estates have, and in addition to the interests of the small owner it is moved in order to save unnecessary labour and unnecessary expense on behalf of the staff of the Treasury. I think if the matter is referred to them it will be found that an immense saving might be made in the Treasury if a flat rate was substituted for the rebate claim under Section 69. At this late hour I will not go into greater detail, and I will not give specific instances of this point, as I do not think the facts are in serious dispute. I appeal to the right hon. Gentleman to give this matter his favourable consideration, and to tell the House what the experience is of the permanent officials of Somerset House who have to deal with the details.

    This is a case in which a concession was made as a maximum and it is now sought to be made usual in a considerable number of cases in which no claim has been made for reduction.

    This matter was discussed so lately as last March and then my right hon. Friend the Chancellor of the Exchequer stated that he had a strong objection to making a deduction of this kind. Now it is proposed to turn the concession which he gave as a maximum into a flat rate. I am sorry the Government is not able to accept the Amendment.

    I should like to re-remind the right hon. Gentleman who has just spoken that he is not correct in saying that this was offered as a maximum. If he will allow me to read what the Chan- cellor of the Exchequer said on this subject when dealing with it on 20th September, 1909, he will find that he was wrong in that statement. He said that there were many landlords who spent more than 25 per cent. in repairs, and he was going to allow half-a-million to meet those claims. He added that if the whole of that half-a-million were not absorbed by conceding those claims he would then consider the question of giving what was over to those who had spent more than 25 per cent. These are the words the Chancellor of the Exchequer used, and I should like the right hon. Gentleman (Mr. McKinnon Wood) to note them:—

    "If it is found that the £500,000 is not altogether disposed of by this concession, the Government will probably be in a position, at any rate next year, to increase the maximum. If there is any surplus we propose to increase the maximum to those who are spending more than 25 per cent. and no doubt, there are several landlords who are spending considerably more."
    So the right hon. Gentleman (Mr. McKinnon Wood) is entirely wrong in saying that the maximum was fixed definitely by the Chancellor of the Exchequer in 1909. What I want to know is, what is the Chancellor of the Exchequer going to do to redeem the pledge which he gave distinctly in 1909 that if the £500,000 was not spent—and it has not been spent—he would give whatever was over to those who have spent more? I do not know that I altogether agree with the proposal of my hon. Friend (Mr. Courthope), but I say that the Government ought to fulfil the promise made by the Chancellor of the Exchequer on the occasion to which I have referred. If they are not prepared to give a flat rate of 25 per cent. all round then I say they are still under the obligation to give more in the way of relief to those who have spent more in repairs. I should like to know from the right hon. Gentleman how the Chancellor of the Exchequer proposes to carry out his specific undertaking.

    Surely we are entitled to hear some answer from the Treasury Bench to the remarks of my hon. Friend. He has pointed out that there was a distinct undertaking given by the Chancellor of the Exchequer in September, 1909, to the effect that he was allotting £500,000 to pay for the abatement on the Income Tax under Schedule A. The Chancellor of the Exchequer distinctly told the House at that time that if this sum was not sufficient he would take steps to allot a larger sum in years to come, but if, on the other hand, the £500,000 should prove more than sufficient for the purpose in view——

    On a point of Order. The point which has been discussed by the last two speakers is not the point raised by the Amendment, but a distinct point.

    Surely we are allowed to discuss one or two items which have a considerable bearing on the question in connection with which my hon. Friend has moved his new Clause. The ground on which my hon. Friend has brought forward his proposal is very largely that in practically all the cases which have been submitted to the Inland Revenue authorities there have been shown to be good grounds for demanding this abatement. In connection with the new Clause, I submit that we are entitled to some explanation regarding the undertaking which the Chancellor of the Exchequer undoubtedly gave. If there were any other at any other time than half-past twelve in the morning of raising this question we should be only to glad to discuss it then, but as far as I know this is the only possible occasion on which it can be discussed. What we also want to know is this, if the £500,000 is more than the amount required to pay the claims which have been sent in up to 25 per cent., are we then going to have an extra allowance made in the case of those claims in which it has been proved that a greater amount than 25 per cent. has been spent? I hope the right hon. Gentleman will give us some answer on that point and also with respect to the Chancellor of the Exchequer's undertaking.

    This is quite a distinct point from that raised in the new Clause which has been moved by the hon. Member opposite (Mr. Courthope), but the position is this: Whatever pledge my right hon. Friend the Chancellor of the Exchequer gave, he will be prepared, as I think the House recognises, to fulfil to the full. I am advised, however, that it is quite impossible to tell how far the money will go towards fulfilling this arrangement of 25 per cent. Sufficient time has not yet elapsed to enable us to judge as to whether there will be any margin.

    The Chancellor of the Exchequer said distinctly that he would do it "next year," which was last year.

    Question, "That the Clause be read a second time," put, and negatived.

    Tobacco For Agricultural Purposes

    The Commissioners of Customs and Excise may issue licences to responsible persons within the United Kingdom to grow tobacco for the purpose of the use of the extract for the manufacture of insecticides or sheep-dips or other purely agricultural or horticultural purposes, subject to regulations to be approved by the Commissioners, such regulations to deal with the area to be grown, the varieties of tobacco to be used, and the manner of growing and harvesting the crop.

    If the crop is denatured in accordance with the requirements of the Commissioners, no duty shall be charged upon the tobacco raised, provided that the denaturing entirely prevents any illegal use of the leaf or the extract. This is a point which I think was raised on a new Clause on the last Finance Bill, and I want very briefly to point out its purpose. We are simply asking that permission should be given to grow coarse tobacco for purely agricultural purposes, and not for smoking in any form whatever. The purpose in view is the extraction from the tobacco of nicotine. The reason it is desired to extract nicotine from the coarse tobacco is that when mixed with water it is one of the most valuable washes you can possibly have for fruit or hops, as well as for use for sheep-dipping. At the present time nicotine, because of its high price, is beyond the reach of many agriculturists who would like to utilise it for the purposes I have described.

    We desire that a licence should be granted in England to certain people to be allowed to grow a certain amount of coarse tobacco for this purpose, and we have had a deputation to the Treasury on this question. The whole matter has resolved itself into a question as to whether this tobacco, if grown, can be so denatured that the nicotine can be extracted from it for agricultural uses, but that it cannot be used for smoking purposes. We press this strongly on the Treasury, because we say that the nicotine thus extracted can be put to valuable uses from the fact that it is a vegetable wash, and can be used for both fruit and hops when both crops are in full leaf. These crops will not suffer from the use of the wash, whereas if a mineral wash were used it would have a deleterious effect. All we ask is that the Government should consider the question, which is one of great importance to hop and fruit growers. We ask the Government instead of laying the whole burden upon agriculturists to get the Government chemists to help us to get something that can be used, and to obtain the greatest benefit from the extracted nicotine. If that is done it will be an enormous benefit to hop growers, fruit growers, and other agriculturists in all parts of England.

    I beg to second the Clause. I do not want to make a speech, but, from the point of view of a user of hops, I want to endorse what the Mover of the Clause has said, that this would be the greatest possible relief in many seasons. Any concessions that the Government can give to the hop industry it deserves, for it is not only an agricultural industry, but it has depending upon it other industries.

    I have had the advantage of conferring in private with the hon. Member who moved the Clause, and he has stated quite accurately what the view of the Government is. They entirely sympathise with his object, and the only difficulty in his and in their way is to discover a denaturant which will prevent fraud. I hope that will be discovered at no distant date and then I hope that we will be able to meet the hon. Member.

    Will the Government chemists help us, instead of all the burden being upon us?

    Motion and Clause, by leave, withdrawn.

    moved that the following new Clause be read a second time:—

    Exemption For Motor Fire Engines, Etc, In Respect Of The Duty On Motor Spirit

    Any local authority using motor spirit for the purpose of supplying motive power to any motor fire engine provided by them or to any motor car kept by them while it is being used by them for the purposes of their fire brigade service shall be entitled to an allowance or repayment of the duty paid in respect of the motor spirit in the same manner as persons using motor spirit for purposes other than the supply of motive power for motor cars.

    I think the anomalies which exist at the present time do happen to be well known. The idea I have is that the whole of the spirit used for motor fire engines and motor fire appliances should be exempted from the tax. As the law stands at the present time there is no duty charged upon spirit that is used for pumping fire engines.

    Clause read a second time, and added to the Bill.

    I beg to move that the following new Clause be read a second time:—

    Exemption Of Motor-Cars Used For Fire Brigade Purposes From Duty On Licences For Motor-Cars

    Sub-section (6) of Section eighty-six of the Finance (1909–10) Act, 1910, shall be construed as if the words 'or any motorcar used by any local authority for fire brigade purposes' were added at the end thereof.

    Clause read a second time, and added to the Bill.

    May I make an appeal to the House now to, if possible, make a little more rapid progress, having regard to the lateness of the hour, and to the fact that we sat up very late last night? I do not know that there is very much left. I understand that there are several Amendments on the Paper which are not going to be moved. I should like to know from the right hon. Gentleman what his view is with regard to the position.

    It is no pleasure for me to sit up, I assure the right hon. Gentleman. I cannot give him anything more than the assurance that the undertaking we gave will be carried out. We must finish this stage of the Bill at one sitting. Many of my hon. Friends have very much curtailed their remarks, and they are not moving many of their Amendments. I am sure that nobody will at this time of night use up any unnecessary time. I cannot, of course, at this stage forecast the exact moment at which we shall rise.

    Off-Licensed Retailers' Licence Duty

    Notwithstanding the provisions of the First Schedule of The Finance (1909–10) Act, 1910, and the scale of Licence Duty payable for off-licences for sale by retail of excisable liquor, the total annual Licence Duty payable by an off-licensed retailer in Scotland, in areas which are not urban, and in urban areas with a population of less than ten thousand, for the sale of spirits, beer, and wine, inclusive, shall, where the annual value of the licensed premises does not exceed thirty pounds, be according to the following scale:—

    Duty.
    Annual value of licensed premises not exceeding £10£5
    Exceeding £10 and not exceeding £20£10
    Exceeding £20 and not exceeding £30£15

    I protest against our having to discuss this matter at this hour of the morning. This particular Clause was put down on the Paper for yesterday, and as no opportunity was given for moving it then, it is to-day again on the Paper. The idea of this new Clause is to remedy what I consider an error in the Finance Act of 1909–10; if it was not an error, then it was an injustice to retailers of wines and spirits in Scotland. Under that Act those who sold liquor in rural districts, who had retail licences in the form of off-licences or grocers' licences have to pay in Scotland a minimum Licence Duty of £14. The idea of this Clause which I am moving is to put the holders of grocers' licences on the same footing as publicans who are in the same district. Publicans' Licence Duties in rural districts and in urban districts under 10,000 population are, I think £5 for rentals of £10; £10 for £15 rentals, and £20 for £30 rentals.

    It seems to me to be a gross injustice that grocers who are only permitted to sell liquor for consumption off the premises should be called upon to pay a minimum Licence Duty of £14, whereas publicans in the same neighbourhood who are permitted to sell liquor for consumption both on and off the premises should be granted licences at a much lower figure. The result of this minimum duty of £14 is that a grocer in these districts who pays, perhaps, a rent of £10 has to pay for his Licence Duty a higher figure than his rental, and often more than double what the publican tradesman has to pay in the same town. Now the cost to the State, if my Clause is adopted, will not be very excessive. It will not amount to more than £5,000, and when we take into consideration that the Licence Duties have realised much more than the Chancellor of the Exchequer anticipated when right hon. Friend anticipated some-he introduced his Budget, this amount is not much for him to abandon. My thing like £2,100,000 would be realised from licences in Great Britain, but, instead, something like £2,600,000, or an additional £500,000, has been realised by the State. In these circumstances I venture to think the sacrifice of this comparatively small sum of £5,000 in order to remove a gross injustice to these grocers is not much to ask my right hon. Friend. I therefore beg to move my Clause.

    I have the same Clause down later on, and therefore I propose to second the Motion of my hon. Friend. This is only one more of those extraordinary anomalies of the Licence Duties which we spoke of yesterday. It only requires mention to show how absurd and what a scandal it is that a man with a fully licensed house should have a £5 duty to pay, while a man with the same rent should have to pay £16 for a restricted sale. There can be no justification for it. The only answer that can be given, or sought to be given, is that when the licensed grocers came to London to see the Chancellor of the Exchequer some two years ago the right hon. Gentleman appears to have made some sort of arrangement whereby, if they agreed to his duties, he would restore the quantities, which there was a proposal to cut down, but the small grocer is unable to derive advantage—I am speaking, of course, of people in little townships of 2,000 inhabitants. Here are three cases which I have given to my right hon. Friend the Secretary to the Treasury. One is that of a £14 house, in respect of which £11 is paid for a spirit licence, £2 10s. for a wine licence, and £2 10s. for a beer licence, or altogether £16. I asked that man how much wine he had sold, and he said 2½ dozen, to sell which he pays £2 10s. duty. What reason is there why a full licence holder should pay only £5, and in the very same place a man with a restricted sale should be charged three times as much? There is really no justification that I know.

    Whilst I find myself unable to agree with my hon. Friends who have brought forward this Clause, I admit that there are anomalies in connection with these licence duties. At the same time I hope that hon. Members opposite who have so constantly pressed upon us temperance reformers the dangers of grocers' licences are not now going to support my hon. Friends on this side by giving preferential terms to grocers' licences. What is the case? In England and Wales before the Finance Act of 1909–10 the grocer had to pay thirteen guineas. There was a special privilege to the grocer in Scotland. He had the advantage of paying a smaller sum, which, nevertheless, was rather larger than that which my hon. Friends propose at the present time. Still, it was a reduced sum.

    We are quite prepared to strike out Scotland, and make it apply to the whole of the United Kingdom.

    Yes, that is exactly what you would have to do if you carried this new Clause. Directly after carrying a Budget which unifies the whole of these licences for the United Kingdom, you could not make a special exemption for Scotland, and the thing would have to be extended to England—that is to say, you would be encouraging these grocers' licences, and cutting down the licence duty, which has hitherto been charged as a minimum of thirteen guineas to £5. That is, I venture to say, entirely wrong. We cannot go into licensing matters too much in these discussions, which rest upon finance, but Lord Peel in his report did suggest that these particular licences should be abolished——

    But what my hon. Friend is trying to do is to get a special privilege in Scotland which must be extended to England, and in that way encourage these grocers' licences, the evils of which are being perpetually pressed, especially by hon. Members opposite. That being so, I trust that the Government will stand firm. I quite agree that there is a difference between the off-licence and the on-licence, but in my opinion the minimum licence duty of the on-licence is far too low—ridiculously too low. There are many parts of the United States where the minimum licence duty is £200. If my hon. Friend will propose to level the on-licence up to the same level as the off-licence, I will support him, but in his desire for Scottish uniformity he is taking the wrong method, and levelling down instead of levelling up. Therefore, I hope the Government will resist this pressure which comes from my hon. Friends.

    1.0 A.M.

    I think the House will agree that it would be impossible to consider this question as affecting Scotland alone. It is a very serious proposition to enter upon at this hour of the night considering that it involves a complete reconstruction of the whole scale of grocers' licences. This is a proposal to introduce a new basis. The real grievance is that the off-licences of grocers were increased. It is not that the difference of the proportion between them and publicans' licences is a new feature; it is that the licence has been increased. But it is impossible for us to deal with this matter by itself as affecting only this small class of licences in Scotland. It is necessary that we should deal with the thing as a whole and the Chancellor of the Exchequer has shown his desire to deal with the matter by a fairer way, namely, by taking the quantity of liquor sold.

    The right hon. Gentleman has raised the vexed question of the basis on which this Licensed Duty should be charged. He evidently forgets that that special process is already embraced in Clause 44 of the Budget. The House has accepted the principle of charging annual value licence based on the amount of the traffic. It is entirely due to the fault of the Government that that process is not now on the register. I regret this Amendment is not a general Amendment covering the whole country. Undoubtedly the grievance is a very clamant one. The hon. Member for Lincoln (Mr. C. Roberts), with his desire to increase the duty on everyone who has anything to do with the liquor traffic, I have no doubt desires to increase the duty on everything except barley water. It is absurd that a man with a full licence, next door, it may be, to an off-licence, should pay less for the larger privilege than the other pays for a restricted privilege.

    Proposed new Clause negatived.

    Restrictions On The Use Of British Wines For Blending Purposes

    The Commissioners of Customs and Excise may make regulations prohibiting or restricting the mixture for sale of any British wines with any foreign wine or with any description of spirits, or the sale or exposure for sale of any such mixture, and requiring every manufacturer for sale of British wines to enter in the book obtained by him from the offices of Customs and Excise such particulars as may be prescribed by them in reference to all British wines made and sent out by him, and if any person acts in contravention or fails to comply with any of these regulations the article in respect of which the offence is committed shall be forfeited, and the person committing the offence shall be liable in respect of each offence to an Excise penalty of fifty pounds.

    I understand the Government intend to accept this Clause, and therefore I will formally move it.

    Question put, and agreed to.

    Clause added to the Bill.

    Provision As To Payment Of Reversion Duty And Undeveloped Land Duty By Persons Having Defective Title

    (1) Where a payment of any sum on account of Reversion Duty or Undeveloped Land Duty has been made by any person purporting to be the lessor or owner of the land, as the case may be, and that person is subsequently dispossessed by reason of an adverse title being established against him, the payment of the duty made by that person (in this section referred to as the dispossessed owner) shall be treated for all purposes as if it had been a payment made by the rightful lessor or owner, as the case may be.

    (2) The dispossessed owner shall be entitled to recover as a debt from the person by whom the adverse title is established (in this section referred to as the reinstated owner) the amount of any sum so paid by him on account of duty, together with interest as provided by this section; and, without prejudice to any other mode of recovery, that amount may be set off against any costs or mesne profits payable by the dispossessed owner to the reinstated owner, and any Court before whom the title of the reinstated owner is established shall order that the amount so far as unsatisfied shall be a charge on the land as from the date on which the title is established in the same manner as if it had been charged by deed upon the land by the owner thereof at that time, and any such order shall take effect, and the benefit thereof may be transferred, in like manner as if it were a mortgage.

    (3) The interest payable under this section shall be simple interest at the rate of four per cent. per annum as from the date on which the payment of the sum in respect of which interest is payable has been made, but not more than twelve years' interest shall be so payable; provided that where it is proved to the Court before whom the adverse title is established that proceedings have not been taken for the purpose of establishing the title within six months after the date on which the reinstated owner became aware or could reasonably have become aware, that he had such a title and was in a position to take proceedings for recovery of possession, compound interest at the rate of four per cent. per annum without any limitation shall be payable in lieu of simple interest in respect of any period which has elapsed between that date and the date on which the proceedings for the establishment of the title have been commenced.

    (4) In this section any reference to the reinstated owner includes a reference to any predecessor in title of the reinstated owner, and any reference to the dispossessed owner includes a reference to any person who would have been a predecessor in title of the dispossessed owner if the title had been a good title.

    In moving this new Clause I would say that its fundamental object is to meet the case where the apparent owner of land has paid the Reversion Duty and the Undeveloped Land Duty. It seems really to be an act of elementary justice. In order to facilitate the passage of the Clause it has been very much cut down. In its earlier appearance it was proposed to apply not only to Reversion and Undeveloped Land, but also to Increment Value Duty. It is not now proposed to apply it to the Increment Value Duty for various reasons with which hon. Members will be familiar. Also, instead of making the repayments a condition for agreement, it proposed to make them a charge on the land. There have been further modifications in order to meet the case of those who may not have been aware of their title, and also to meet the case of the reversionary who may have been aware of the title for some time, but has not been able to come forward and pay the duty.

    As my hon. Friend has modified this Clause I do not see any objection to it, and I hope the House will agree to it.

    This Clause seems to introduce an entirely new principle into our law. It is absolutely unprecedented for a wrongful owner to be repaid duties which he has paid while he was wrongfully in possession of the property. The very fact that Undeveloped Land Duty has been paid by the wrongful owner does not prove that the rightful owner would have had to pay it. He might have developed the land. The rightful owner on coming into possession does not pay back all the tithes—such as Income Tax or Death Duties—due while the wrongful owner has been in possession. Such a principle has never been heard of in court. It seems to me to be an altogether unsound one, and I certainly hope the Government will give the Clause a little more consideration than they have given it, and that they will deal with it more seriously than the right hon. Gentleman has dealt with it in the speech he delivered. Unless more serious arguments are advanced for adopting it I shall be very much inclined to go to a Division.

    I think the suggestion of my hon. Friend is not an unreasonable one. I was very much struck, as were other Members, by what he said. The Clause does introduce an entirely new principle. It proposes to treat a particular subject in quite a different way from other charges to be paid by a person who has been in wrongful possession. If that be true, and seeing we have no Law Officer present to guide us, we should hesitate at one o'clock in the morning to put in a long and complicated Clause of this kind. I suggest to the right hon. Gentleman and to the hon. Gentleman who moved the Clause, that they had really better not press it. They can bring it up, if they still remain of the same opinion, in the Budget Bill of next year.

    I should like, if I may, to say a word about a phrase which I venture to think has rather misled Members—the expression "the wrongful owner." The case the Clause has in view is that of the man who has the best title he can get. Then a dormant title turns up—a man who might have asserted his title, but did not. It seems to me very hard in such a case if that man, who has got the best title he could, and who has been acting in perfect good faith, should, in such an event, not only lose the land, but the taxes he has been paying on behalf of the other.

    I really do hope that the Government will reconsider the position they have taken up with regard to this Clause. It really does seem to me to be a most extraordinary proposition. Here is a Clause which suggests that, where a person has been in possession of land which he is not entitled to and is dispossessed, he may recover any payments he has made in regard to it from the rightful owner. Not only may he recover the payments he has made but the Clause suggests he shall be entitled to be paid interest for the money he has paid, and not only is he to be paid interest by the person who takes possession but the predecessor in title of that person is involved. Here is a Clause which contains no fewer than four sub-sections, all of them full of matter of the very greatest importance, introducing an entirely new principle into our law. A person who is a trespasser may recover from the rightful owner money which he has been forced by the process of law to pay, and may not only recover the money from the rightful owner, but may obtain interest for the money he has been compelled to pay, because of the improper position he has put himself into. That is a direct encouragement to wrong-doing, to taking land you are not entitled to and holding them as long as you can, knowing perfectly well that any money you pay in taxes, is, under the Bill, invested at the not unattractive rate of 4 per cent. I really hope the right hon. Gentleman will reconsider the position and, at any rate, take the advice of the Law Officers of the Crown.

    I am glad the Government has agreed to accept this Clause. I have myself bought land in which the title, strictly speaking, only covered a period of twelve years. That is to say, the predecessor of that person from whom I bought the land showed no right to sell the land beyond that time. It is just possible that, after I got the land, another person might have proved he had a better title than the person from whom I bought it. It would be grossly unfair if, having bought the land in good faith in such circumstances, I were unable to recover the taxes I had paid.

    The last speaker has put a case which would appeal to the House, but I think he forgets, in so doing, that, in order to protect the case which he has put, he is going, as my learned Friend has said, to open the door to a vast amount of wrongdoing. The Government, I do submit, have treated the House upon this question with little consideration. Here is a Clause not only of enormous length, but of enormous importance, opening up a totally new idea to everyone in this House. What is the position of the Government? The Clause is moved at about one o'clock in the morning——

    I make an appeal to my hon. Friend behind me. This is a long Clause. I see no objection to it, but many Members do object to it being passed just now. Suppose he brings it up again in time for the Budget.

    I shall be glad to do so rather than keep the House at this hour of the night. I shall be glad to withdraw the Clause on the understanding that it will be considered for the next Finance Bill.

    Motion and Clause, by leave, withdrawn.

    I beg to move that the following new Clause be read a second time:—

    Provision For Payment Of Licence Duty In Two Instalments 10 Edw 7, C 8

    (1) Where the duty payable by any person under Part II. of the Finance (1909–10) Act, 1910, on any licence for the manufacture or sale of intoxicating liquor amounts to the sum of twenty pounds or upwards, the licence may, at the option of the licence-holder, be granted upon payment of one-half only of the duty so payable, and in that case the other half of the duty shall be paid immediately after the expiration of six months from the commencement of the year for which the licence was granted, or, in case the licence is granted after the month of September, on the first day of February next ensuing, and, if default is made in payment of the second half of the duty, the licence shall be deemed to be of no effect so long as the default continues.

    This provision shall apply to two or more licences granted in respect of one set of premises as it applies to a single licence.

    (2) Any amount remaining unpaid in any case in respect of the second half of the duty may be recovered either as a debt due to the Crown or by distress on the licensed premises in the same manner as unpaid duty payable in respect of purchases of intoxicating liquor in a club may be recovered by distress on the club premises, and Sub-section (3) of Section forty-eight of the Finance (1909–10) Act, 1910, shall, so far as applicable, apply accordingly with the substitution of the licensed premises for the club, and of the holder of the licence for the secretary of the club.

    (3) The power of recovering the second half of duty under this section shall apply to the recovery of the unpaid portion of duty in cases where a licence for the manufacture or sale of intoxicating liquor has been granted before the passing of this Act on payment of a portion of the duty only, except that in cases where the licence has been so granted under Sub-section (3) of Section forty-nine of the Finance (1909–10) Act, 1910, and is now in force, the first day of March next after the commencement of the year for which the licence was granted shall be substituted for the first day of February next ensuing.

    I think this is another Clause of mine which the Government is willing to accept, so I only move it formally.

    Question, "That the Clause be read a second time," put, and agreed to.

    Clause added to the Bill.

    Repayment Of Proportional Part Of Duty Where Justices' Licence Expires

    Where an Excise licence ceases to be in force owing to the fact that the justices' licence or certificate in pursuance of which it was granted has expired and has not been renewed, there shall be repaid to the holder of the Excise licence such sum as bears to the full amount of the duty the same proportion as the unexpired period of the licence bears to a whole year, unless there has been such a conviction against the licence holder as is mentioned in Section twenty-two of The Excise Licences Acts, 1825.

    I understand the Government are going to accept.

    Question, "That the Clause be read a second time," put, and agreed to.

    Clause added to the Bill.

    Licences For New Beginners Amendment Of Section 17 Of The Excise Licences Act, 1825, As Respects Licences For The Sale Of Intoxicating Liquor

    In the case of licences for the sale of intoxicating liquor granted to a new beginner, the proportional part of the duty upon payment of which the licence may be granted, shall be such sum as bears to the full amount of the duty the same proportion as the period for which the licence will be in force bears to a whole year.

    Question, "That the Clause be read a second time," put, and agreed to.

    Clause added to the Bill.

    I beg to move that the following Clause be read a second time:—

    Distribution Of Payments On Account Of Licence Duties In Certain Cases 10 Edw 7, C 8

    Where the licensed premises are held under a lease or agreement for lease made before the passing of The Finance (1909–10) Act, 1910, which does not contain or import any covenant, agreement, or undertaking on the part of the lessee under such lease or agreement for lease to obtain a supply of intoxicating liquor from the grantor of the lease or agreement for lease, the lessee under such lease or agreement for lease shall be entitled, notwithstanding any agreement to the contrary, to recover as a debt due from, or deduct from any sum due to, the grantor of such lease or agreement for lease so much of any increase of the duty payable in respect of the licence under the provisions of The Finance (1909–10) Act, 1910, as may be agreed upon as proportionate to any increased rent or premium payable in respect of the premises being let as licensed premises, and, in default of agreement, the amount proportionate to such increased rent or premium shall be determined in manner directed by Rules of Court, by a County Court in England or in Ireland and by a Sheriff Court in Scotland.

    The words "lease," "leased," "agreement for lease," and "lessee" in this Section include sub-lease, sub-leased, agreement for sub-lease, and sub-lessee, respectively. I have made no bargain with the Government about this Clause. It has had a peculiar history. I moved it in a rather different form, though exactly to the same effect in Committee. We were nearing the end of the proceedings when the Clause was to be taken. The Chancellor of the Exchequer was a little bit sick of the whole thing, and asked me, as he had not had time to consider the question very carefully, to postpone it until Report. He thought it was fair and reasonable as it stood, and he wanted to give it due consideration. When the Clause came up on Report, Mr. Speaker ruled that it came within a technical rule, which prevented it being moved, and that it was out of order. The Clause, as I now submit it, is a Clause proposed in the interest of the free tenant, the darling of hon. Members opposite, and the man who has never been the least protected by any of them.

    I am formally moving this Clause just to show the sort of position we are in regarding the Budget, which has been put off until the last hours of the Session, and is now going through without adequate time for discussion. Had time permitted this Clause would have been accepted, probably in its present form, on the Report stage of the Budget of 1909–10. It was put down on the next Budget—that of 1910—but the Bill was largely dropped. It then appeared in connection with the Revenue Bill, and was guillotined. It appears again to-night, and is going to meet with very much the same reception. This Clause originally was one which the Chancellor of the Exchequer thought ought to appear in the Budget Bill, but instead of caring for the administration of these affairs the right hon. Gentleman has been busy legislating in other directions. The consequence is that the free tenant of licensed premises is denied a right which is given to the tied tenant. The latter may recover part of the extra Licence Duty from those who supply him with liquor, but the free tenant is not allowed to recover from a rack-renting landlord a part of the monopoly value which is charged on his rent. I have not the sympathy of the right hon. Gentleman (Mr. McKinnon Wood), and what I wish to say to-night on the subject is that I shall assuredly bring up the question again on the next Budget Bill. That measure I hope will be introduced and discussed at a time of the year which will give us a decent chance of getting some justice for people whom we desire to protect.

    Proposed Clause, by leave, withdrawn.

    I beg to move that the following new Clause be read a second time:—

    Amendment Of 10 Edw 7, C 8, S 61 (1)

    Section sixty-one, Sub-section (1), of The Finance (1909–10) Act, 1910, shall be read as if there were inserted in line six that if after the word Acts the words and for determining the principal value of any holding subject to an annuity payable to the Land Commission from which there shall be deducted the amount of the outstanding mortgage due to the said Land Commission.

    My desire in moving this Clause is to get from the Chancellor of the Exchequer a clear and explicit declaration of the manner in which we should interpret Section 61, Sub-section (1) of the Finance (1909–10) Act. I ask for this information because I hope the Chancellor of the Exchequer will be able to give an answer that will allay apprehensions which have arisen in Ireland. What I want to know is whether, when a farm is purchased under any of the Land Acts and the value of the holding does not exceed £1,000, there is the option of taking advantage of Section 7, Sub-section (5) of the principal Act. This is an important matter for tenant purchasers in Ireland. If the value of farms is to be estimated at their market value, as it is alleged in some cases it is, then it would put an end to land purchase in Ireland. It is only fair to the people of Ireland that the Treasury should make it clear that the tenant farmers can still come under the original form of valuation provided the estate is under £1,000. I therefore ask the Chancellor of the Exchequer whether "tenant purchasers or tenants who have agreed to purchase under any of the Land Acts, although the saleable value of their holdings may exceed £1,000, have the option of taking advantage of the proviso of Subsection (5) of Section 7 of the Principal Act, and it is only when the value of the estate calculated on the latter basis (the amount advanced or to be advanced having been deducted from the principal value) exceeds £1,000, that such holdings are to be estimated at their market value."

    I wish to second the Clause. The question my hon. Friend desires to have cleared up is this: Whether when a purchase agreement has been signed the value of the farm will be ascertained in the same way as it would be ascertained in case a vesting order had been made on that purchase agreement. It is the position of the man who has signed a purchase agreement during the interval between the signing of the agreement and the making of a vesting order that is the subject of the Clause. My hon. Friend only wants to have cleared up the point whether during that interval the same principle will be adopted in order to determine the value of the farm as is adopted under the Act when the vesting order has been made on that purchase agreement. If that is so my hon. Friend will be quite satisfied.

    If the words of this Clause are in themselves too wide, I think I can give the assurance the hon. and learned Member desires—namely, that where the tenant has entered into an agreement to purchase, then if he dies and his estate is not worth more than £1,000 net the old twenty-five years rule will apply.

    Motion and Clause, by leave, withdrawn.

    I beg to move that the following new Clause be read a second time:—

    Caretakers

    The fact that the husband or wife of a caretaker, or other member of the family of a caretaker, or the servant of a care- taker, dwells in any house or tenement together with the caretaker shall not be of itself sufficient to deprive the house or tenement of the benefit of any exemption under Schedule B, case 5, of The House Tax Act, 1808, or Sub-section (2) of Section Thirteen, of The Customs and Inland Revenue Act, 1878.

    I only need move this Clause formally, as I understand it is accepted by the Government.

    Question put, and agreed to.

    Clause added to the Bill.

    Income Tax Act, 1842, Amendment

    Notwithstanding anything contained in Section one hundred and three of the Income Tax Act, 1842, a person who shall prove before the Commissioners for General Purposes in the manner in that Act mentioned that the aggregate annual amount of his income, estimated according to the several rules and directions of that Act, is less than one hundred and sixty pounds shall be entitled to be repaid all payments of Income Tax on account thereof even if such payments have been made by some person or persons on account of interest paid to him under a contract to pay a fixed rate of interest free of Income Tax, and in such case such payments shall, for the purpose of Sections one one hundred and sixty-four and one hundred and sixty-five of The Income Tax Act, 1842, be deemed to be money charged and paid by way of deduction from such interest.

    The Clause is intended to secure protection under the Income Tax laws for a considerable number of persons whose incomes are under £160 a year. In Lancashire the cotton mills are largely run on loan capital and that capital amounts in all to something not less than £20,000,000. Those loans are very largely made up of small amounts. The small tradesmen and the operatives make loans to the mills in sums of £10, £5, and even as low as £1, so that it is estimated there are not less than 27,000 loanholders in Lancashire mills. Most of them are these small loanholders and are men with incomes of less than £160 a year. The usual form of contract is that the mill undertakes to pay interest at the rate of four, four and a half, or five per cent. free of Income Tax. For a considerable number of years these men whose incomes are under £160 a year have been receiving interest money free of Income Tax. The procedure has been that the Income Tax has in all cases been paid by the company on the loans of the poorer people and then these men have applied for the return of the Income Tax, which has been granted. It has recently been decided, however, not to allow this return in future. The determination of the Income Tax Commissioners has not yet been put in force, but it is intended to be shortly. This Clause is intended to provide for the paying back of Income Tax to those men whose income is under £160 a year. The reason why it is unlawful to pay it back at the present time is that there is a Clause in the Act of 1842, which makes any contract to pay a fixed rate of interest free of Income Tax void. These people having received these payments for a large number of years, it would be a great hardship to them if they were stopped. It may be said that this money is only paid on profits, but that is not so, because the companies pay whether there are profits or not. This was Income Tax definitely paid and applied to these loans. It has been the understanding that these people should get a sum which when Income Tax is deducted will give them a clear 4 per cent. The same result could be obtained under the present contracts by simply altering the form, but that would cause the greatest inconvenience and trouble to mills throughout Lancashire. And not only that, but it would be a considerable blow to the credit of many of these mills. It is evident that a considerable number of people who are not legally obliged to pay Income Tax do, in fact, pay at the present time. I ask the House to give a Second Reading to the Clause.

    I beg to second the Motion. I hope the Government will give some consideration to the case of these people. The proposal will not be a very great matter for the revenue. These people have been used to having 4 or 4½ per cent. plus the return of Income Tax if their income is less than £160 a year. I hope the custom will be permitted to go on.

    No one could have listened to what my hon. Friend who moved the Clause said without admitting that there is a great deal of force in his observations. I think, however, that this is really a proposal which he ought not to press. In his Clause, he begins with the words, "Notwithstanding anything contained in Section 103 of the Income Tax Act, 1842." Those words appear to be extremely innocent, but as a matter of fact Section 103 of the Act of 1842 renders the very kind of bargain which he describes in his Clause invalid. The law having decided very properly that this kind of bargain ought not to be entered into, is it reasonable that the House should assist persons who do enter into these invalid bargains to recover Income Tax? I think they have a very simple remedy in their own hands, and that they ought to apply that remedy themselves, and not ask the House of Commons to do so. All they have to do is, instead of agreeing to £4 free of Income Tax, to agree to £4 5s., and pay Income Tax themselves. That would put the bargain in the proper form.

    This is an important question in Lancashire. We have been allowed the rebate for a period of forty years, and it seems to us very strange at this time of day there should be this alteration without any alteration in the law whatever. This has been going on for forty years, and one naturally asks why it has been allowed to go on all this time if it is illegal. The limited company system is extending very largely in Lancashire, and small men have invested in these companies. They have always had interest free of Income Tax, and the matter has not depended upon profit in any way whatever. The companies might have been working at a loss, but they have had to pay in exactly the same way as when they made large profits. If these are to go on in the way the Government suggest, the Government will certainly be getting Income Tax to which they are not entitled. Whoever is entitled to it, of course it is not the Treasury. There are a considerable number of companies which pay 5 per cent., and people generally, if they see a number of advertisements offering a larger interest, will think the companies are not safe, and it will certainly affect the credit of the companies, as the people will think it necessary to draw out their money. That is a matter which has been considered to be a serious matter. I see no reason why they should not go on as in the past. We have had no reason given us for the change now, and I hope the Government will reconsider the matter and allow it to remain as before.

    Division No. 450.]

    AYES.

    [1.43 a.m.

    Adamson, WilliamHall, Fred (Dulwich)Pryce-Jones, Col. E. (Montgom'y B'ghs)
    Amery, L. C. M. S.Hamilton, Marquess of (Londonderry)Raffan, Peter Wilson
    Baird, J. L.Haworth, Sir Arthur A.Sanders, Robert A.
    Baker, H. T. (Accrington)Henderson, Major H. (Berks, Abingdon)Scott, Sir S. (Marylebone, W.)
    Barton, W.Hoare, S. J. G.Smith, Albert (Lancs., Clitheroe)
    Campion, W. R.Hunt, RowlandSutton, John E.
    Carlile, Sir Edward HildredKerr-Smiley, Peter KerrSykes, Mark (Hull, Central)
    Cassel, FelixLewisham, ViscountTalbot, Lord E.
    Cawley, Sir Frederick (Prestwich)Lockwood, Rt. Hon. Lt.-Col. A. R.Thynne, Lord A.
    Chaloner, Col. R. G. W.Mount, William ArthurToulmin, Sir George
    Courthope, G. LoydNeedham, Christopher T.Ward, Arnold (Herts, Watford)
    Craig, Norman (Kent, Thanet)Neville, Reginald J. N.Williams, Col. R. (Dorset, W.)
    Duncan, C. (Barrow-in-Furness)Parker, James (Halifax)
    Eyres-Monsell, Bolton M.Pease, Herbert Pike (Darlington)

    TELLERS FOR THE AYES.—Mr. Cawley and Mr. Gill.

    Gibbs, G. A.Pretyman, E. G.

    NOES.

    Acland, Francis DykeHackett, J.O'Brien, Patrick (Kilkenny)
    Ainsworth, John StirlingHall, Frederick (Normanton)O'Connor, John (Kildare, N.)
    Allen, Charles Peter (Stroud)Hancock, J. G.O'Doherty, Philip
    Benn, W. W. (Tower Hamlets, St. Geo.)Harcourt, Robert V. (Montrose)Ogden, Fred
    Bentham, G. J.Havelock-Allan, Sir HenryO'Shee, James John
    Birrell, Rt. Hon. AugustineHayden, John PatrickPearce, Robert (Staffs, Leek)
    Black, Arthur W.Helme, Norval WatsonPease, Rt. Hon. Joseph A. (Rotherham)
    Bowerman, C. W.Henry, Sir Charles S.Price, C. E. (Edinburgh, Central)
    Brunner, J. F. L.Higham, John SharpPrimrose, Hon. Neil James
    Carr-Gomm, H. W.Hobhouse, Rt. Hon. Charles E. H.Reddy, M.
    Chapple, Dr. W. A.Howard, Hon. GeoffreyRendall, Athelstan
    Clough, WilliamIsaacs, Rt. Hon. Sir RufusRoberts, Charles H. (Lincoln)
    Condon, Thomas JosephJohnson, W.Robertson, J. M. (Tyneside)
    Cornwall, Sir Edwin A.Jones, H. Haydn (Merioneth)Robinson, Sidney
    Cowan, W. H.Jones, Leif Stratten (Notts, Rushcliffe)Samuel, S. M. (Whitechapel)
    Crawshay-Williams, EliotJones, William (Carnarvonshire)Seely, Col. Rt. Hon. J. E. B.
    Crumley, PatrickJones, W. S. Glyn- (Stepney)Shortt, E.
    Dawes, J. A.Keating, M.Stanley, Albert (Staffs, N. W.)
    Doris, W.King, J. (Somerset, N.)Tennant, Harold John
    Edwards, Clement (Glamorgan, E.)Lambert, George (Devon, S. Molton)Thorne, G. R. (Wolverhampton)
    Edwards, Sir Francis (Radnor)Law, Hugh A. (Donegal, West)Walters, John Tudor
    Elibank, Rt. Hon. Master ofLawson, Sir W. (Cumb'rld, Cockedm'th)Ward, W. Dudley (Southampton)
    Elverston, Sir HaroldLevy, Sir MauriceWebb, H.
    Essex, Richard WalterLewis, John HerbertWhite, Patrick (Meath, North)
    Falconer, J.Lundon, T.Wiles, Thomas
    Ferens, T. R.M'Curdy, C. A.Wilson, Hon. G. G. (Hull, W.)
    Ffrench, PeterMcKenna, Rt. Hon. ReginaldWilson, W. T. (Westhoughton)
    Fiennes, Hon. Eustace EdwardM'Laren, Hon. F. W. S. (Lincs., Spalding)Wood, Rt. Hon. T. McKinnon (Glas.)
    George, Rt. Hon. David LloydMarkham, Sir Arthur BasilYounger, Sir George
    Gladstone, W. G. C.Marshall, Arthur Harold
    Guest, Hon. Frederick E. (Dorset, E.)Murray, Capt. Hon. A. C.

    TELLERS FOR THE NOES.—Mr. Illingworth and Mr. Gulland.

    Gwynn, Stephen Lucius (Galway)Norton, Captain Cecil W.

    Clause 4—(Definition Of Premises For The Purpose Of The Valuation Of Licensed Premises)

    The following definition shall be substituted, as from the first day of April nineteen hundred and eleven, for the definition of premises contained in Section fifty-two of the Finance (1909–10) Act, 1910:—

    The expression "premises" in relation to the annual value of licensed premises includes any offices, courts, yards, and gardens which are occupied together with and are within the curtilage, or in the immediate vicinity of the house or place where the liquor is sold, except any such offices, courts, yards, or gardens as are proved to the satisfaction of the Commissioners to be used ex-

    Question put, "That the Clause be read a second time."

    The House divided: Ayes, 42; Noes, 93.

    clusively for any trade or business which is entirely distinct from the trade or business carried on upon the premises by the licence holder as such, and also includes any building or place which though not within the curtilage, or in the immediate vicinity, of the house or place where the liquor is sold, is used by the licence holder for receiving or storing liquor or, which in the opinion of the Commissioners is used by him, otherwise than occasionally, for any purpose in connection with the sale of liquor.

    Amendment made: Leave out the word "exclusively" ["to be used exclusively for any trade"] and insert instead thereof the words "either altogether, or with exceptions only."—[ Sir George Younger.]

    Part Iv

    National Debt

    Clause 8—(Partial Application Of Surplus For Development Fund And Sanatoria And Loan To East Africa Protectorate, 38 And 39 Vict, C 45 9 Edw 7, C 47)

    (1) The Old Sinking Fund for the financial year ending the thirty-first day of March, nineteen hundred and eleven, as calculated under Section nineteen of the Revenue Act, 1911, shall, notwithstanding anything in the Sinking Fund Act, 1875—

  • (a) to the extent of one million five hundred thousand pounds, be issued and paid by the Treasury at such times as they direct to the development fund under the Development and Road Improvement Funds Act, 1909, in lieu of the sums to be issued out of the Consolidated Fund under Sub-section (2) of Section two of that Act in the years ending the thirty-first day of March, nineteen hundred and thirteen, nineteen hundred and fourteen, and nineteen hundred and fifteen respectively; and
  • (b) to the extent of one million five hundred thousand pounds, be issued by the Treasury at such times as they direct, and carried by the Treasury to a separate account, and made available in such manner as Parliament may determine for the purposes of the provision of sanatoria and other institutions for the treatment of tuberculosis, or such other diseases as the Local Government Board, with the approval of the Treasury, may appoint; and
  • SCHEDULE.
    ENACTMENTS REPEALED.
    Session and Chapter.Short Title.Extent of Repeal.
    42 & 43 Vict., c. 21The Customs and Inland Revenue Act, 1879.Section three.
    9 Edw. 7, c. 47The Development and Road Improvement Funds Act, 1909.Sub-section (2) of Section two, as from the thirty-first day of March nineteen hundred and twelve.
    10 Edw. 7, c. 8The Finance (1909–10) Act, 1910.In Section fifty-two the definition of "premises."

    Amendments made:—

    At the beginning of the Schedule, insert,

    6 Geo. 4, c. 81.The Excise Licences Act, 1825.Section twenty-four.

    ( c) to the extent of two hundred and fifty thousand pounds, shall be issued by the Treasury at such times as they may direct for the purpose of the advance authorised by this Act to the Government of the East Africa Protectorate.

    (2) The Treasury may advance by way of loan to the Government of the East Africa Protectorate for the purpose of providing improved railway communication and harbours in the Protectorate, and improved water supply for Mombasa any sums not exceeding in the whole two hundred and fifty thousand pounds.

    The Government of the Protectorate shall annually, until the whole advance is deemed to have been repaid, pay to the Treasury interest at the rate of three and a half per cent. on the amount advanced, and also, by way of sinking fund, a further sum equal to one per cent. on the amount advanced, and the whole of the advance shall be deemed to have been repaid when sinking fund payments have been made sufficient, if accumulated at three and a half per cent. with yearly rests, to produce an amount equal to the advance.

    Any sums paid on account of the principal or interest of the advance shall be paid into the Exchequer, and issued to the National Debt Commissioners, and shall be applied by them in like manner as the Old Sinking Fund.

    Amendment made: In paragraph ( b), after the word "Board" ["such other diseases as the Local Government Board "], insert the words "or as respects Scotland, the Local Government Board for Scotland, or as respects Ireland, the Local Government Board for Ireland."—[ Mr. McKinnon Wood.]

    At the beginning of the line in the third column ["In Section fifty-two"], insert, "Sub-section (3) of Section forty-nine."

    Bill to be read the third time to-morrow (Wednesday).

    Telephone Transfer Amendment Bill

    Read a second time, and committed to a Committee of the Whole House for to-morrow (Wednesday).

    Naval Discipline (Dominion Naval Forces) Bill

    Read a second time, and committed to a Committee of the Whole House for tomorrow (Wednesday).

    Metropolitan Police Rate Bill

    Considered in Committee and reported without Amendment; read the third time and passed.

    Military Manœuvres Bill Lords

    Considered in Committee and reported without Amendment; read the third time, and passed.

    Whereupon, Mr. SPEAKER, pursuant to the Order of the House of 24th October, proposed the Question, "That this House do now adjourn."

    Old Age Pensions Act

    Administration In Ireland

    I owe an apology for having again to refer to a subject which has often been discussed. I consider it necessary, however, once more to bring before the notice of the House a few glaring cases which have received scandalous treatment at the hands of the authorities responsible for the administration of the Old Age Pensions Act in Ireland. Everyone in Ireland knows that the difficulty arises from two causes—the absence of baptismal or parochial records and the imperfect and inaccurate census returns of 1841 and 1851. It is with the last-mentioned cause I intend to deal. I maintain that the people were not to blame for these imperfections. It was the Government of that day which is responsible, and I submit that the Government of the present day ought not to take advantage or benefit on that account. I have here several cases which, I believe, were refused pensions because their names did not appear in the Census of 1841 or of 1851. On that ground they were refused pensions, although we have satisfactory letters from people of seventy and eighty years of age, testifying that the applicants are certainly over the required age. We have often heard it stated here that if in the absence of census returns, other satisfactory evidence could be produced the pension would be granted.

    The first name I would mention is that of Elizabeth M'Intyre, who is certified to be of age by a gentleman named Robert Barr and also by a lady named Isabella Butler. Both certify that they have known the lady for upwards of seventy years. I think that should be sufficient evidence to enable the Local Government Board and the pension officers to admit this claimant to the advantages of the Act. The second name is that of John Dennison. The Right Rev. Mons. M'Faul certifies that he has satisfied himself that the claimant is over seventy years of age. I submit his reverence would not give that certificate if he was not satisfied that the applicant is of ago. In view of the fact that a name does not appear in the Census returns no other evidence can possibly be adduced or required in order to give the applicant the pension. The next name is that of Cecilia M'Cready, on whose behalf a declaration is made by an old gentleman named Patrick M'Monagle, who I know to be a man of the highest respectability and integrity. He certifies and declares that the applicant is over seventy years of age. He himself is eighty-five years of age, and therefore, I submit, is in a position to make that declaration.

    Then there is another name—Elizabeth Leonard. The declaration made here, made also by a gentleman of over seventy years of age, testifies to the same facts. Another is Rose M'Ginley. The declaration is made by a gentleman aged seventy-four. He has no hesitation in saying the applicant is over seventy. Another, the last I shall trouble the House with, is Charles Bell. He is certified by a gentleman named James Wiley, who is seventy-six years of age, and another gentleman named Moses Walker, seventy-four years of age. Both certify he is only two or three years younger than either of them; they all grew up as children together. Consequently they have no hesitation in certifying that he is of age. Their declaration is countersigned by Mr. James McLauglin, J. P.

    At that time, Mr. Speaker, there was no parochial certificate or register. At all events, nothing is available now. They were unfortunately destroyed in some way. Is it not very hard on these people who lived at that time that they should be deprived of their pensions because of this? It is possible that, if these registers were now available, they would show these persons were fully entitled to obtain pensions. There is no other evidence we can procure except respectable people, who can testify and certify in the way I have mentioned. I submit these are cases which call and demand the fullest and most sympathetic consideration, not only the most sympathetic, but right and just consideration, so that these persons shall get the pensions to which they are entitled by Act of Parliament.

    This is not a matter of economy. It is a matter of scandalous injustice to deprive these people in this way. Now I will refer you to the answers we have got from time to time across the floor of this House. We have tried to follow them as well as we could. I have the honour to be on a pensions committee myself, and I can say that that committee, and I know several of them personally, are most anxious that no applicant shall receive a pension unless he is entitled. They go most carefully and most scrupulously into all the cases, and would not recommend one single applicant unless they were quite satisfied he or she was seventy years of age. It is absurd to talk of bogus claims and people who are not entitled to pensions getting them. No pension committee I know of would do anything of the sort. On the 24th April of this year the President of the Local Government Board here (Mr. Burns) said in answer to a question:
    "In the absence of documentary evidence of age, the Board are willing to give consideration to any other evidence which may be adduced."

    "Hear, hear," the right hon. Gentleman says. We have adduced all the evidence it is possible to adduce, and that evidence should be considered and respected. Further, on the 24th May of this year, the Chancellor of the Exchequer said, in answer to a question:—

    "Pension authorities already have the power to grant old age pensions, in the absence of documentary proof of age, if other satisfactory evidence is afforded."
    In the cases I have cited the documentary proof of age is not forthcoming, because there is no parochial certificate, but we have given all the other satisfactory evidence that we could possibly obtain, and I submit that the claims should be considered. On the 14th of July last the then Secretary to the Treasury (Mr. Hobhouse) said:
    "I see no necessity for the issue of any further instruction to pension officers in the matter. In the case of any claimant who can produce no certificate of birth, baptism, or marriage, to establish a claim with regard to age, or who cannot be traced in the Census Records of 1841 or 1851, the existing instructions allow the pension officer to refrain from an appeal, if he is himself satisfied that the claimant has attained the age of 70."
    That answer exactly meets my cases. The right hon. Gentleman may tell me, of course, that pension committees are sympathetic to the applicants for pensions. No doubt they are. But they are also just and they will allow no claim merely through sympathy. As to the pension officers, sometimes in a heroic way a man will show his independence of a committee and refuse claims he should allow and lodge appeals because he would like to appear independent. But I should like to know what is the use of committees being formed at all if they do not have some authority to act. What is the use of having constituted them by Act of Parliament if their recommendations are not respected? I should like to know if such evidence is to be considered by the committee and acted on or if we are to act only on the censuses? In that case the committees might be abandoned altogether and the duties left in the hands of the pension officers.

    I shall also be told, I suppose, that the cases of appeal are against me, but I submit it was never the intention of the House to deprive worthy applicants of pensions, I shall be told of the great number of pensions now being paid in Ireland, and, especially, that some are being paid unjustly. I say in answer to that, that no number of pensions being paid can justify refusal to one deserving applicant. I would, therefore, ask the Chief Secretary to-night, to give the assurance that these respectable people who have given declarations to facilitate worthy applicants, shall have their declarations considered, and that the pension officers will do their duty. I do not reflect upon them as a body, but there may be individuals who are indiscreet and who may through a sense of false heroism, do what they should not do, to destroy the administration of the Act because they are showing their independence. I ask the Chief Secretary to give me an assurance that he will respect the declarations and the evidence given, and that he will take steps to see that no worthy applicant shall be deprived of the benefits of this beneficent Act that was passed for the good of the people.

    I only wish to intervene for one moment. I am very sleepy myself and I dare say others are. I thoroughly endorse everything that has fallen from my hon. Friend. I have made some inquiries, and I think everything he says is absolutely correct as far as I can gather. There is no doubt there is very great difficulty in tracing the age of these people, but everything possible is done. I know that this is so in the case of my own constituency. The hon. Member is a member of the Pensions Committee himself, and is more competent to speak than I am on the matter. I hope the Chief Secretary will give what he has said the most favourable consideration.

    I can assure the Noble Lord and my hon. Friend that there is no question here of the respectability either of the good people who want to have pensions or of the people who occupy the position of guarantors. This is a question of the practice and duly of the Local Government Board, to whom under the Act there is an appeal from the decision of the Pensions Committee. I have often spoken on this question in the House of Commons, and I have found it rather difficult to induce gentlemen who are concerned with the cases of particular applicants for pensions to bear in mind the obligation imposed by the Act. It is not a case of "Do you think a person is seventy years of age." It has been laid down even by the Court of Appeal in Ireland that attainment of the age of seventy is an inexorable, rigid condition in connection with the grant of a pension. Therefore a person may, in fact, be seventy years of age, but unless he or she is in a position to give reasonable evidence which would satisfy a reasonable person—something, that is, which may really be called evidence, and not merely the general pious belief of another person that this particular person is seventy—unless that reasonable evidence is forthcoming, however hard the case may be, that person cannot get a pension. Applicants, therefore, have to prove themselves to be seventy.

    The Local Government Board has strained the point a good deal, it is true, having regard to the fact that there are no certificates of birth in Ireland prior to 1865. We have practically allowed the two censuses which are capable of being referred to as being in themselves proof that a person is seventy to be used as evidence, but because we have done that people have jumped to the conclusion that if a person's name is not in one or other of those censuses we do not acknowledge that any evidence can be forthcoming satisfactory to the Local Government Board. But that is really not so. We have done in Ireland just what has been done in England. We have admitted any evidence which we considered to be of a really satisfactory character. We have not probed the matter too far. The cases put forward by the hon. Member are cases in which quite responsible people have in an affidavit, a letter, or a statutory declaration, stated what they know regarding the ages of various applicants. But when we have come to investigate cases we have found that in a good many instances the means of knowledge are of the flimsiest and most unsatisfactory character. When they come to be traced they amount to nothing more than a belief that the person is seventy years of age.

    We have had at the Local Government Board in Ireland up to July, 1911, no fewer than 49,190 appeals and we have in the great majority of instances allowed the person to come in and get the pension. But in the case of others, on investigation and examination, it was found there really were not sufficient grounds for admitting them. We are not for a moment disputing the verity and veracity of these people. I am far from saying that any lies at all are being told in respect of this matter. This is not a question of lies. It is a question what your knowledge is. The inexorable, rigid condition is that a person must prove himself or herself to be seventy before he or she can get the pension. We open our minds to any evidence which can properly be called evidence. The President of the Local Government Board has instanced a case where a sampler was worked by a particular person when a child of eight or nine years. That was accepted by the Local Government Board in England and so it would be in Ireland. We grasp at everything which can be called real evidence, but we really cannot let loose the floodgates by saying that all you have to do is to get three or four respectable people in your neighbourhood to say they have known you all their lives and are satisfied themselves that you are seventy and are therefore entitled to a pension. That is why opinion in so many cases is not evidence. In some cases it is because the deponents have not stated what their means of knowledge are. No court ever pays any attention to an affidavit unless there is a paragraph at the end stating what the means of knowledge are; and those means of knowledge have to be closely investigated.

    When the Local Government Board of Ireland is accused of being hard in these matters I may give the percentages of persons who have been granted pensions in different parts of the United Kingdom. They are: 17 per 1,000 in England; 19 per 1,000 in Scotland; and 46 per 1,000 in Ireland. In rural districts in Ireland it rises as high as 52 per 1,000. It is the bounden duty of the Local Government Board to investigate this matter strictly. I have taken a great interest in it myself and have had scores of those cases which are considered typical put before me. It is impossible to lay down any general rule except that it is the duty of the Local Government Board to consider anything which is evidence, but we cannot give any assurance that we shall be satisfied with mere statements that people believe somebody else to be of the age of seventy. We must have something more than that. There is evidence of appearance. Let me say as to that, it is rather difficult between sixty-five and seventy-five to be quite confident of the age of an old lady. I have often attempted myself to come to some conclusion, and I have found it very difficult. At the same time there are people who have had no other evidence but that of appearance and they have got pensions. I will call the attention of the Local Government Board to the cases which have been referred to and they will look into one or two and see whether by any chance there was real evidence in the statement as to the belief of some of the other persons as to the ages of the applicants. But I cannot give any assurance that we shall depart from what I consider to be our absolute duty imposed on us by statute to see that people do not obtain these pensions unless there is something that a reasonable man can honestly believe to be good evidence. There is no reason whatever why the people who have been referred to should not make new claims, but I cannot say, being responsible for this Department, which has done its work admirably well, that I am going to loosen my opinions as to what is true evidence.

    Question, "That this House do now adjourn," put, and agreed to.

    Adjourned accordingly at Twenty minutes after Two a.m., Wednesday, 13th December, 1911.