In consequence of the statement of the Financial Secretary to the Treasury yesterday, I ask leave to move an Amendment in the Preamble. The Preamble states:—

"We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Ireland in Parliament assembled, towards making good the Supply which we have cheerfully granted to Your Majesty."

I wish to insert after the word "cheerfully" the words "lent and," so that it may read, "lent and granted to Your Majesty." I wish especially to ask the opinion of the Law Officers on this. As I understand the view of the Government is that under this Bill we are no longer making Grants to the King, and that the Statute which says we have granted money to the King, is waste paper, and that in fact what does control the Treasury, the Sovereign, and all the Estates of the Realm is some piece of dirty paper in the portfolio of the Secretary to the Treasury, which he says apart altogether from the Statute overrule the Statutes of this House, control the Treasury, control the King, and that what we are doing here now in saying we have cheerfully granted these sums to His Majesty, is a pure and absolute farce.

On a point of Order. I wish to ask whether it is in order to take an Amendment to the Preamble of this Bill now, or whether the Preamble should be taken after the Clauses?

There really is no Preamble and no separate question is put in regard to the Preamble. I find the hon. Member himself who was then the hon. Member for North Louth raised this point on the 21st March, 1900, and the reply given to him then I am obliged to give him now:—

"The enacting words of a Money Bill are different from other Bills. Any alteration in this form would have to be considered by the House. The Committee on a particular Bill has no authority to revise it, and no question is put to the Committee thereon."

Was that not before the old Motion? There was an old formula which used to be put at the commencement of every Bill the moment the Chair was taken. That formula has been en-entirely abolished, and therefore I would suggest if this be the enacting part, and if the Treasury will not obey the enactment and treat these Grants as loans that is my point.

The question is that Clause 1—

I wish to know whether you have effectively put the question "That Clause 1 stand part of the Bill." I could not hear what was your ruling, and I wish to move an Amendment to that question.

I was in process of putting the question that Clause 1 stand part when the hon. Member for North-East Cork rose.

I wish to know whether it is necessary to take power to raise money at so high a rate of interest as 5 per cent. Surely, in these times His Majesty's credit is such that we can raise money at a less interest than that.

I will put this matter in order. The question before the Committee now is, "That Clause 1 stand part of the Bill."

I wish to ask whether it is the Statutes of the Realm that govern the practice of the Treasury or some Minutes of their own which they are pleased to lay before the House? The right hon. Gentleman the Secretary for the Treasury yesterday stated that in spite of the Statutes to which he referred me, and in spite of the fact that these Statutes have received the Royal Assent and we are declaring by these Statutes that we have granted the money, these Grants are not Grants, and the right hon. Gentleman at the Treasury can imprint upon these Grants the character of loans because of some antecedent Minutes which have been before this House. If that is the view of the law, it seems to me to be a defiance of the Statutes. The matter is of considerable importance, having regard to the practice of the Treasury on Budget nights. That practice is that the moment they get a Resolution of the House of Commons, they enforce it at the ports and elsewhere. I have nothing to say against that practice, and I know the present Government are not responsible for it, because it has gone on over a series of years. These Resolutions were taken on Budget night, and they are invariably confirmed by Statute, so that all the Treasury does in that case is that they anticipate the Statute and treat it afterwards as practically an Indemnity Act. This is inverting the whole procedure. It is not merely putting the cart before the horse, but providing that, though your Statute says that these Grants are Grants only, you will defy the Statute and treat them as loans.

As regards the particular £500,000 to which I take exception, you have not any Resolution in Ways and Means to support it. My recollection is that what happened was that the Ways and Means Resolution never touched this £500,000 for East Africa at all. What happened was that the Government came down on the Report stage and said, "We will amend the Ways and Means Resolution on Report," as the procedure then suggested was only putting £5,000,000 into the Sinking Fund instead of £6,500,000, and the odd £1,500,000 will be provided for by special Resolution. This £500,000 has no Ways and Means Resolution to support it. It is simply a Resolution in Supply, and that gives a certain amount of validation to it. If you consider the Standing Orders, there is no Resolution of Ways and Means to authorise the procedure we are adopting to-day. Does it not follow that it is a piece of unexampled audacity on the part of the Treasury to say that, having got this in the form of Statute, they will declare by some secret document which they have at the Treasury, a litte Memorandum which has never received the authority of the King, Lords, or Commons, we will govern and override the Statute? Even James II. never did anything of that sort. It is all very well to say that it has been done before. Some of these provisions are dated the 1st of August, and then you put them in your Finance Bill five days afterwards. If this House is to be treated in this way by slipping things through and dodging things through, then all our control over finance is gone. The Government have never before stated in terms they would override the Statute law, and I respectfully put this to the learned Attorney-General. Here is a sum of £500,000 which the Treasury say is Grant money, and which the Statute says is Grant money. What position is the King in? Are you going to advise him against the Statute, which says he has got this money granted? I maintain, as far as His Majesty is concerned, when this Act is passed, he could spend this money on a racecourse. [HON. MEMBERS: "Oh!"] I maintain it. Let me read to the Committee the only granting part.

I am trying to find the hon. Member's point, but I am afraid what he is proposing is really out of order. This first Clause deals with a sum of money that has been voted by the House first in Committee of Supply and then in Committee of Ways and Means, and the Resolution has been agreed to by the House. It is not competent for this Committee either to add to or reduce that sum. It is bound to be the exact sum on which the Bill is based, and which has been dealt with in that manner. Therefore, at this stage, it is not competent to raise this question. I understand the hon. Member raised it in the House, which is the proper place. As far as this Bill is concerned, it is bound to be pari passu with the Resolution on which it is founded.

I follow your observations, but you have stated this Bill is founded not merely on Committee of Supply, but also on Committee of Ways and Means. My point is it is not. There is no Ways and Means Committee.

The hon. Member must take that point from Mr. Speaker. It is not a point to be dealt with at this stage.

On the point of Order. I understand the hon. and learned Gentleman is discussing the Question that "Clause 1 stand part of the Bill." I submit it is an argument against the Clause standing part of the Bill if the Clause contains a misstatement on the face of it. His point, as I understand it, is that, as a matter of fact, Supply has not been granted to His Majesty as stated in the Clause, but has been in part lent to His Majesty. I apprehend, therefore, it is in order for the hon. and learned Member to argue that the Clause contains an inaccuracy as an argument for voting against the Clause.

I do not think so. The Clause conforms exactly to the Resolution of the House on which the Bill is founded, and, as far as this Committee is concerned, that is an end of it. The hon. and learned Member, as I understand, is raising a point as to the competency, first of all, of the Ways and Means Resolution, and, as far as we are concerned, this Clause is bound to conform with that Resolution.

I quite understand it is impossible to amend the Clause, as it is absolutely governed by the Resolution on which it is founded. The question is not whether we can amend it, but whether we shall have it at all, and it does seem to me relevant to that question whether the Clause contains a misstatement or not, and that it would be perfectly proper to strike out the Clause if it is in fact incorrect.

That really is hardly so. After all, the discussion on the Clause must be relevant to something that can be done.

I shall give my reason for opposing the Clause. It is because, in fact, we are told by the Government that the Clause they are passing into law will not be treated by them as the law. Although they have stated they will obtain the Royal Assent to this Statute, they have declared they will disobey it because, although we have granted, and are granting, and cheerfully granting to His Majesty this Clause, they tell us that in fact they will treat the Clause not as a Grant but as a loan. For the first time, they will put His Majesty in this position: Without giving him any directions as to the way in which this £500,000 is to be spent.

On the point of Order. This is not the first time on which a discussion on the Committee stage of the Appropriation Bill has been attempted, but, if it is allowed now, it will be a very serious precedent, and I should like your ruling upon it. My hon. Friend is attempting to raise a discussion on the Committee stage of the Bill, and I think he has done so many times in the past.

I am following your example.

Yes, and up to the present we have always failed. I do not believe there has ever been an occasion on which a discussion of the merits of any particular Vote or the method in which it is going to be spent has been permitted in Committee. I understand my hon. Friend's argument is that the Government have expressed their intention in a different way from that which is included in the Bill, and that the money is going to be spent in a different way. That, I submit, is not a question to be discussed in Committee on the Appropriation Bill, but is one which can be discussed on a subsequent stage if the Government have overriden the Statute. If the money appropriated for a specific purpose was used for a different purpose, that could be discussed at the proper stage, but not at this stage.

Let me illustrate the ground of my remarks. There is in this Bill, without any Resolution either in Ways and Means or in Supply, a Vote of £300,000 for our salaries. Is it to be suggested we could not on this Clause or on another Clause raise, as we did last year, the whole question of the salaries of Members of Parliament? Is this the position: That, so far as the Committee is concerned, the granting to the Government of £150,000,000 of money is a farce?

The Chancellor of the Exchequer is quite correct. It is not competent on the Committee of the Bill to raise any question of policy or as to the method the money has been granted in Supply or in Committee of Ways and Means. The hon. Member, of course, can vote against the Clause. There is one further observation I must make. It is not quite correct to say no discussion can take place. The Amendment of the hon. Member for Sheffield (Mr. James Hope) on Clause 2 is one previously allowed, and I shall allow it on this occasion.

This, with great deference, is not a question of moving an Amendment. Am I not entitled to give my reasons for being opposed to this Clause? Do you rule that speech is forbidden on this Clause, because that is the contention of the Chancellor of the Exchequer? Surely there are plenty of weapons in the armoury of the Government for shutting us out. Let them move the Closure, but until you tell me to sit down I will go on speaking.

The hon. and learned Member, I am sure, will take it from me that he is not entitled to discuss policy, or whether this should or should not be this sum or any particular amount. I do not know whether there is anything else he can find to say apart from that. My ruling follows previous precedents that it would not be competent to discuss policy.

I will not discuss any policy. I will give my reasons for voting against the Clause if I can get anybody to support me, and as soon as you rule me out of order, I will approach another topic. I stated my objections to the methods of the Government, and I was met by the statement of the Secretary to the Treasury that the methods of the Government followed the lines of previous Governments. I respectfully say, if that be the case, it is time this Government and all Governments adopted a new method of procedure in respect of this Appropriation Bill.

The hon. Member is now doing exactly what I ruled he could not do; he is discussing the policy included in the Vote. The proper time to discuss that was when the Vote was in Committee, and not now.

If you say no discussion is to be allowed, I am not going to enter into any contest with the Chair; I have too much respect for the Chair; but I do wish to have some definite ruling from the Chair. For instance, I want to know from you whether it would be out of order at this stage to discuss any of the Votes included in this Bill?

May I quote to the hon. Member a passage from Sir Erskine May:—

"The conduct of the official or of the Department which has received a Supply Grant cannot be challenged in Committee on the Bill."

Would it not be quite in order to discuss whether the Clause is properly and correctly drafted, and truly expresses the intention of the Bill or the Resolution on which the Bill is founded? I take it it is in order to discuss any point of drafting, but it is not in order to discuss any point on the merits of the Grant.

Of course, the Clause follows strictly the Resolution of the House in Ways and Means on which the Bill is founded.

I will not discuss the conduct of any of the Departments in reference to this Bill or the merits of any Grant, but I will discuss the enormous difficulty in which this would place His Majesty the King.

The hon. Member said he would bow to the considered judgment of the Chair.

Very well; I will not carry the matter further.

I beg to move, in Sub-section (3), to leave out the word "five" ["five pounds per cent."], and to insert instead thereof the word "four."

1.0 P.M.

I know it is the custom in Appropriation Bills for the Treasury to take power to borrow at 5 per cent., but I would ask why it is necessary to put in so high a figure. I quite understand that for a short period of time it might not be possible to get money at 5 per cent., or even at 10 per cent., but when you insert figures in any Bill of this kind you ought to put in the figure of a likely rate; otherwise the Treasury might very easily be led into acts of improper borrowing. To put in a figure as high as 5 per cent, does tend to encourage the Treasury to borrow at a higher rate than may be necessary. We have heard a good deal about the depreciation of credit recently, and we ought not to put in a figure of this kind in this Bill to encourage the notion that 5 per cent, should be regarded in any way the normal figure at which the Government of this country may borrow.

This is the figure which has been inserted in every Appropriation Bill for some generations. I cannot give the exact number. It is quite necessary that the Government should take that power. I think that during the American bank crisis, when the Unionist Government was in power, the Bank rate was 7½, entirely due to that crisis, and the Government had to borrow at 4½. That shows that the margin is a very reasonable working margin when there is a great crisis of that kind, which sends up the Bank rate. I do not think it would be safe for us to alter the figure. As a matter of fact the Government always borrow at about that rate.

The only remark I would make in answer to the Chancellor of the Exchequer is that if he intends to provide against a possible crisis, he ought not to put in a maximum figure of 5 per cent. He says that at the time of one crisis they had to borrow at 4½, but on some other occasion they might find it necessary to pay more than 5. His argument shows that we ought not to put in any maximum. If we put in a maximum for ordinary purposes it should be 4 per cent., but if he contemplates a great crisis, then he ought not to put in any maximum.

The sum of £152,160,560 includes the sum for the payment of Members of this House. I had proposed to move a reduction of the sum by £362,000. Shall I be in order in doing so?

Will it be possible? for me to ask the Chancellor of the Exchequer who are the nine Members of the House who have declined—

The hon. Member must do that, if he wants to, at Question Time.

I did not hear the reason why I could not move my Amendment.

If the hon. Member had been in the House earlier, he would have heard it.

I understood that we had a promise from the Government that we should be allowed to discuss this year and every year—

That is not a matter which can be discussed on this Bill. The hon. Member must take the proper opportunity for that.

Is it possible to avoid a discussion by slipping this into the Bill?

I could not allow an answer to that question, and obviously, therefore, I cannot allow the question.

May I ask why no Vote in Supply has been made the foundation for this present amount? My recollection is that there was not a Vote in Supply for Members' salaries.

There was.

This year?

Certainly.

I asked the Prime Minister when we could discuss this question, and he replied, "On the Appropriation Bill." I quite agree it should properly have come when it was moved in Supply, and I was prepared then to do so, but it was closured.

It may be raised on the Third Reading.

Would it make a difference in your ruling if you were made aware that the Government had promised facilities for discussion on this topic, and that it was guillotined?

It is a matter of policy.

Will the only opportunity be on the Third Reading?

Yes. On that stage any matter which comes up in Supply is open for discussion.

If we cannot discuss it now I presume we shall be perfectly in order to vote against the Clause or against Schedule B in order to emphasise our disapproval of the course the Government has taken?

Hon. Members are certainly at liberty to vote against the Clause or the Schedule.

Are you going to put Schedule (B), Part I. and Part II. separately?

No.

May I point out that they are quite separate questions?

I cannot put the two parts of the Schedule separately.

I beg to move, that the Clause be read a second time.

I think this Clause will be considered quite uncontroversial. Its object is merely to remove an inequality which exists in respect to claims for substituted site value by executors of a deceased owner. That inequality arises very largely from the necessary delay in making the land valuations. I recently addressed a question to the Chancellor of the Exchequer on the subject. I asked him—

"Whether—he is aware that it is the practice of the Commissioners of Inland Revenue to refuse an application under Section 2 of the Revenue Act. 1911, for substituted site value when made by the executors of a deceased owner who was not himself in a position to make the claim during his lifetime in consequence of the delay of the Commissioners in making the valuation required by the Finance (1909–10) Act, 1910: and whether he will give instructions for such applications to be considered as if made by the owner within the meaning of the Section?

The answer I got was:—

"I am aware of the practice, which is in accordance with the law; and I will consider what can be done to obviate any inequality such as that indicated by the hon. Member."—[OFFICIAL REPORT, 22nd May, 1912, col.2044, Vol.XXXIII.]

The position seems to be this. Section 2 of the Finance Act of 1910 empowers any owner to claim substituted site value in respect to sales made within twenty years of 30th April, 1909, and application for such substituted site value may be made by the owner, whether he was the actual purchaser of the land or not. Any owner for the time being may make the application. That Section was amended by Section 2 of the Revenue Act, 1911, which removed the time-limit of twenty years in the case of an owner who was the actual purchaser, and he must, under that Section, personally apply for substituted site value within three months of the passing of the Revenue Act, in the case of a valuation which has already been made, and within three months after the final valuation as regards any future valuation after the passing of the Revenue Act. This is the difficulty that arises now: If the owner died after the passing of the Finance Act of 1910, and before he had had an opportunity of claiming the substituted site value under the Revenue Act of 1911, the Inland Revenue Commissioners hold that his representatives could not exercise the right which had accrued to the deceased in his lifetime. That right undoubtedly had accrued to the owner, and the only reason he could not exercise the right was because the valuation had not been made. I am not finding any fault that the valuation had not been completed, because there has not been time to make it, but I think the Chancellor of the Exchequer will agree that the owner had not had an opportunity during his lifetime of exercising his privilege under Section 2 of the Revenue Act of 1911. He might have died within three months after the final valuation. The Act gives him three months within which to make the application. Of course, if he dies within the three months without having made it, the time not being sufficient, that right should accrue to his personal representatives. It is to remove that in- equality that I move this Clause. I should say that I am not quite satisfied with the Clause as drafted, and I have drafted another in these terms:—

"It is hereby declared that an application under Sub-section (3) of Section two of the Finance (1909–10) Act, 1910, as amended by Section two of the Revenue Act, 1911, may be made by the legal personal representatives of a deceased person who, but for his death, could have made an application under the above Sections.

Any application under this Section may be made within three months after the date of the passing of this Act, and the provisions of Sub-section (2) with regard to alteration of the original site value and the repayment of duty shall apply to an application made under this Section."

That is a shorter Clause which covers the point, and I think it is better than the one I have moved. I only mention that because I thought the Government might be willing to accept it.

The hon Gentleman has accurately stated the position in regard to this matter. He called my attention to this inequality some time ago, and, having considered it, I confess that I think his case is made out. Personally, I think we ought to try to find some way of dealing with the point, and in doing so we should consider whether an alteration cannot be effected within the four corners of the existing law without an Amendment of this Bill. I am advised that it can be done, and I have given instructions accordingly. What the hon. Member proposes to effect by this new Clause is the practice at the present moment. I forget when he called my attention to the matter.

It was on 22nd May last.

A very few days after that the present practice was established, and therefore this Amendment is quite unnecessary. The hon. Gentleman admits that the Amendment he has moved is capable of improvement for the purpose of carrying out his idea. The inclusion of the Amendment in the Bill might conceivably—although I express no opinion on the subject—take the Bill out of the category of Money Bills. I hope the hon. Member will be satisfied with the statement I have made.

What does the right hon. Gentleman mean by taking it out of the category of Money Bills? Does he mean that might happen under the wretched Parliament Act? [An HON. MEMBER: "Why 'wretched'?"] I hope the hon. Member will not withdraw the Amendment. I think it is desirable that it should be passed. The right hon. Gentleman says, "I agree that a grievance exists."

No.

Well, he says, "I agree it did exist." It does not exist now because the autocratic Chancellor does not insist upon enforcing the law as it stands. I protest against that system of revenue legislation. I know that the Treasury is fond of it, but it is grossly unjust. What they are fond of doing is to take extreme power, which gives them a large reserve of power in the background which they can use to oppress an individual who may cause them trouble, or to raise additional revenue on a special occasion. It runs right through the whole of the taxes. I do not pretend to be familiar with this particular inequality. It is the Chancellor's answer that seems to me to make it absolutely essential that some such new Clause as that proposed should be put in the Bill. If he is not satisfied with the drafting, let him draft another. As to the other ground of objection, if it is the right hon. Gentleman's desire to preserve to the Treasury the power to exercise on an emergency the right which the Statute gives them, I maintain that that is a most portentious proposal. As to the suggestion that the inclusion of the Amendment in the Bill might prevent it being regarded as a Money Bill, I think it is exceedingly doubtful whether the Amendment put in on the proposal of the Secretary to the Treasury has not removed it out of the category of Money Bills already. But that is not a matter for us to consider. It is for us to say what is just and proper. If that is the only objection the Government have to the Amendment, I trust my hon. Friend will go to a Division.

The Chancellor of the Exchequer has admitted that as a matter of fact the law as it exists actually caused a grievance until he altered the practice in relation to its administration. I submit that the alteration of the practice was without any justification in law. He was perfectly right when he stated in his answer on 22nd May that the only person who could claim exemption was the owner at the time of the application. It was of the essence of the case in claiming the substituted site value that it should be done in accordance with the terms of the Statute, and that a person who had had a transfer made to him could not claim. That really excluded the executors of a deceased person from making an application. That was an omission in the drafting of the original Statute. Now the Chancellor of the Exchequer proposes to remedy that error not by an Amendment, but by an illegal practice on the part of the Inland Revenue Commisioners. They have no right to do it. It may be the proper course to take, but I submit it is a dangerous doctrine that the Inland Revenue Commissioners should administer the law as they think fit, and not in accordance with the Statutes framed by this House. What is the reason they give for it? They say, "We are afraid, if we amend the law, this would bring the Finance Bill of the year outside the scope of the Parliament Act." They claim to themselves in their administration to dispense justice as they think fit, merely because they do not wish to run the risk of taking the Finance Bill outside the purview of the Parliament Act. That itself is a curious admission. Whether Mr. Speaker would rule that the Bill, if this Amendment were introduced, was not a Money Bill, nobody can tell. If an Amendment of the Valuation Clauses in the original Bill is not a proper matter for a Finance Bill, it is perfectly clear that the original Clauses were not proper matters for a Finance Bill. The Chancellor of the Exchequer is now afraid that the whole of the Valuation Clauses in the Bill of 1909–10 were improperly put into that measure, and on that ground he resists this Amendment. May I remind the right hon. Gentleman of what he himself stated? He said himself, "I quite recognise in dealing with the land system in this country I am dealing with an intricate and complicated matter, and from time to time if questions may come before me which have never arisen I will always give attention to them and rectify them." In this case he refuses to rectify it in the only proper way by legislation, but proposes to do it by mere administration.

I wish to ask the Solicitor-General does he say that the law at present allows this claim to be made by executors or not? That is really the whole question. If the law does not allow the claim to be made by the executors, it is quite improper that the Treasury should do anything inconsistent with Statute law, and in those circumstances, apart from what the Chancellor of the Exchequer has said, with which I do not wish to find any fault, it is absolutely necessary that if not the very words at least the substance of this Amendment should be adopted.

Nobody can say that in these matters a lawyer's opinion is beyond challenge, and I claim no such inspiration. But it does appear to the Attorney-General