asked the Secretary of State for Foreign Affairs, whether he can give the exact particulars of the Czar's ukase with regard to the sale of spirituous liquors in Russia; and whether he can also give particulars with regard to France?

I have recently instructed His Majesty's representatives at Petrograd and Bordeaux to obtain for me particulars in regard to temperance reforms. As soon as these particulars reach me I will communicate with the hon. Member.

asked the Secretary for Scotland, whether he will authorise the formation of a women's patrol corps in Scotland on the same lines as the corps which has been formed in England, so as to deal with cases of female offenders, especially in the neighbourhood of military camps?

My right hon. Friend is in communication with the promoters of this movement in Scotland, as well as with the military and naval authorities, as to proposed arrangements for women patrols.

asked the Secretary for Scotland in what districts in Scotland the provisions of the Intoxicating Liquor (Temporary Restriction) Act, 1914, have been put into operation, and the hours during which licensed premises have been closed in each case under the powers conferred by Section 1 of the Act?

Following recommendations under the Statute by the respective sheriffs, action has been taken by the Licensing Courts of Greenock and Dundee. In the case of Greenock the Licensing Court has directed that public-houses should be closed at 9 p.m., that sale for consumption off the premises should be stopped at 7 p.m., and that soldiers may be supplied with liquor for consumption on the premises between the hours of 5 p.m. and 8 p.m. In the case of Dundee the Licensing Court has directed that all licensed premises shall be closed at 9 p.m. A recommendation by the sheriff in regard to Gourock is under consideration by the Licensing Court of the burgh. The sheriff of Caithness. Orkney and Shetland reports that the licence-holders in Wick, Lybster, and Thurso under voluntary arrangement close their premises at 9 p.m., that licensed premises in Kirkwall are closed at 8 p.m. by order under the Defence of the Realm Regulations, and that by similar order the sale of liquor in Lerwick to naval and military forces is prohibited after 8 p.m.

asked the Parliamentary Secretary to the Board of Agriculture if his attention has been called to the interpretation of the recent Order prohibiting the export of certain classes of herrings to Italy and Greece; if it was intended that such Order should apply to the case of smoked herrings which are consumed in those countries and not in Germany and Austria; if he is aware that several steamers with cargoes of these smoked herrings are now hung up in English ports, and losses are being incurred by the shippers in consequence of the interpretation put on the Order; and if he proposes to take any action in the matter?

The export of herrings of the character referred to is prohibited to certain European countries, including Italy and Greece, except under licence. Applications for licences can, however, be made through the usual channels, and where they relate to consignments of herrings specially cured for Mediterranean countries they will probably in the great majority of cases receive favourable consideration.

May I ask if it is clear from the interpretation of the Order that smoked herrings from the Mediterranean markets will come under the Order?

It is intended that they should come under it.

asked the Secretary to the Board of Education, as Vice-Chairman of the Committee on the Provision of Free Medical Attendance and Drugs, when necessary to the dependants of men serving with the Army, whether any arrangements have been arrived at to make use of the offer of the British Medical Association to provide free medical attendance to such dependants; and what arrangements have been made for the supply of the necessary medicines?

The special committee set up for the purpose have prepared a scheme for utilising the generous offer of the British Medical Association and have issued instructions to local representative committees in England and Wales, together with a supply of special medical books for issue to suitable dependants of men serving with the Army or the Navy. The scheme is now in operation throughout England and Wales, except in a few areas where a local scheme had been adopted. The local arrangements vary, but, as a rule, the books, which are accepted as evidence of bona fides by doctors and chemists working under the scheme, are issued by the local representative committee, assisted by the Soldiers' and Sailors' Families Association. The scheme has also been brought into operation in Scotland, where it is being worked by the Soldiers' and Sailors' Families Association. The Pharmaceutical Society of Great Britain generously offered on behalf of their members to supply the necessary medicines and appliances at cost price. The cost price of medicines and appliances supplied under the scheme is being defrayed from a grant made out of the Prince of Wales's Fund. The work of checking and pricing prescriptions is being undertaken at considerable expense by the Pharmaceutical Society under a system approved and inspected by the committee.

asked the First Lord of the Admiralty at what date the steamer "Aquitania" was launched and what date was ready for sea; what was the price reported to be paid for her by her owners; at what date was she taken over by the Government, and how much money was spent on gutting her out and fitting her for the Admiralty's work; is the Government under contract to replace the whole of the fittings, etc., taken out of her; and, if so, will he say what it is estimated such replacement will cost his Department?

The "Aquitania" was launched on the 21st April, 1913. She was ready for sea about 30th May, 1914, that being the date of starting her first voyage. The Admiralty have no knowledge of the price paid by the Cunard Company for the vessel. She was taken over by the Admiralty on the 31st July, 1914. The work of removing superfluous woodwork from the ship, and fitting her out for Admiralty purposes, was carried out by the Cunard Company, the figures of the actual cost not yet being available. Liability as to replacement of fittings, etc., is set forth in the agreement with the company, Command Paper, No. 1703, of 1903. Negotiations are now in progress with the company as to the extent of those liabilities.

asked the First Lord of the Admiralty whether his Department is at present giving out large orders for clothing; whether it refuses to deal with contractors who can supply only small quantities per week; whether he is aware that tailors in the large provincial cities are suffering from unemployment at the same time as the Government Departments cannot get delivery of clothes; and, if so, whether he will see that smaller makers get a fair share of the orders?

The quantities of clothing for the Navy obtained from the trade have been considerably increased during the War. Orders have been placed with many firms, both large and small. Very close attention has been paid to representations received as to the existence of unemployment, and there is no intention of excluding small makers. In this connection, I may say, speaking of Admiralty contracts generally, that during the present emergency the Admiralty have availed themselves of the services of a large number of firms not previously on the list for orders of a non-confidential character, and that it is always open to firms to make application.

Can the right hon. Gentleman say what is the definition of "small firm"?

A firm which is not a large one.

asked the Prime Minister whether he is aware that there is at the present moment a considerable demand for merchant shipping; and whether, in order to meet this demand, he can initiate steps for the prompt sale of all merchant ships prizes of war, thus enabling them to be utilised at once for the carriage of merchandise?

There is a lack of shipping, and it would be to some extent relieved by the prompt sale of the prizes. The whole matter is receiving careful attention.

asked the Secretary of State for the Home Department whether, in view of the fact that the Aliens Restriction Act, 1914, and the Regulations made thereunder have no application to naturalised Germans and Austrians, and that in some cases such persons are at least as dangerous to the State as non-naturalised Germans and Austrians, he will at once introduce legislation empowering the Secretary of State in all proper cases at his discretion, and not merely in cases of fraud or misrepresentation, to cancel the certificates of naturalisation of such persons or to suspend them during the period of the War so as to make these persons amenable to the provisions of the Aliens Restriction Act, 1914, and the Regulations made thereunder?

I have considered the proposal, which has been made very widely, that power should be taken to withdraw naturalisation certificates at discretion in the case of persons who are dangerous to the State. I think that, apart from any objection to the proposal in principle, as a matter of practice any circumstances of danger to the State which would justify the use of such a power would also afford sufficient ground for action against the individual in question under the very wide powers conferred by the present law—in particular the Defence of the Realm Acts.

Is it not desirable that, in cases such as those referred to, it should be possible to put in force the Regulations made under the Aliens Restriction Act? Without some such power is it not impossible to enforce those Regulations?

As I understood his question, the hon. Member wishes to leave in the Home Secretary a discretion to suspend certificates. I very much doubt whether that discretion ought ever to be exercised unless there are circumstances of suspicion, and, if there are circumstances of suspicion, the person suspected can already be proceeded against under the law. It would be bad policy, I submit to the hon. and learned Member, to give a discretion to any Secretary of State which would enable him to supersede the law.

asked the Home Secretary if he will consider the desirability of advising the Admiralty authorities to considerably relax the existing stringent regulations governing the lighting of London's streets; and whether, in the interest of public safety, he will cause instructions to be issued to the proprietors and drivers of all mechanically-propelled vehicles whereby the speed at which such vehicles are driven through the streets at night may be materially reduced?

In this matter I act on the advice of the Admiralty authorities, and in their opinion the existing regulations could not safely be relaxed at present. A warning has already been issued by the Commissioner of Police as to the necessity of driving with the utmost care through the dimly lighted streets, and I hope that the drivers of all vehicles will show a proper public spirit in complying very strictly with this injunction.

Can the right hon. Gentleman say when that suggestion or instruction was issued?

I could not give the date, but it was recently.

I take it that the Home Office is alive to the importance of the matter?

Yes. The Home Office is quite alive to it. I would remind my hon. Friend that in the recent figures which I gave it appeared that there had not been any increase of accidents in London owing to the restricted lighting.

Has the speed limit in London been reduced at all?

No. There has never been any speed limit in London streets except under the ordinary law.

Would it not be a good occasion to fix a speed limit?

The Commissioner of Police advises me that the enforcement of a speed limit in London is extremely difficult. His opinion is that it would be inadvisable to fix any speed limit other than that imposed by the ordinary law.

asked the President of the Board of Trade whether he is aware that the armament firms of Vickers and Armstrong have promoted the Imperial Ottoman Arsenals Company, a Turkish undertaking for supplying ships and munitions of war to an enemy State, and that these firms hold moneys advanced as debentures on the undertaking; and whether he will take steps to have moneys so advanced returned forthwith to the investors?

The trustees for the bondholders have already instituted proceedings for the purpose of obtaining the return of the money subscribed for bonds of the Imperial Ottoman Docks, Arsenals, and Naval Constructions Company. The matter is being dealt with by the Court, and is not one in which the Board of Trade can take action.

asked the President of the Board of Trade whether he has now received the sanction of the Treasury for payment of extra overtime and Sunday duty performed by the clerks in the office of the Registrar-General of Shipping and Seamen who have been engaged, since the outbreak of the War, in connection with the mobilisation of the Royal Naval Reserves; and, if so, when payment will be made?

The sanction of the Treasury has been received, and arrangements for the payment of extra overtime and Sunday duty are now being made.

asked the Under-Secretary for War how many recruits have enlisted in Ulster since the commencement of the War?

I would refer the hon. Member to the reply I gave to the hon. Member for Brentford on the 18th instant, and to the reply given to the hon. Member himself by my right hon. Friend the Prime Minister yesterday.

asked the Under-Secretary for War what has been done by the committee of officers, under the presidency of the Adjutant-General, in providing facilities for employing the leisure of recruits in our camps; and can he say what staff has already been appointed to meet the need?

Arrangements are being made by the General Officer Commanding for lectures on hygiene and military subjects to be given by specially selected officers, among whom will be included officers returned from the scat of War. Most of the spare time will be thus occupied, but the General Officers Commanding are making arrangements locally for entertainment as and when the opportunity arises.

asked how many commissions have been given to gymnastic instructors since the War began; and whether it is intended to give any more commissions than the two already given to the musketry instructors at Hythe?

Twelve commissions have been given to gymnastic instructors and six additional commissions are about to be given to musketry instructors at Hythe.

asked the Under-Secretary of State for War whether his Department proposes to take the initiative in making arrangements whereby the tailors of large cities such as Glasgow, at present suffering severely from unemployment in that trade, will get a share of the large orders of the War Office, or whether his Department means to wait until the tailors club together to supply sufficient quantity to be worth the attention of the clothing inspectors?

Knowledge of local conditions should place local firms in a better position than the War Department for taking the initiative in this matter. In some places the trade is already being organised with a view to securing a share of War Office orders. The Department will be glad to receive any applications from representative bodies able to submit collective tenders on behalf of such firms.

asked the Under-Secretary for War whether the Scottish regiments at present stationed at Kettering have yet been paid the 7s. 6d. per man promised them for the loss to them of their own boots and clothing; and whether this sum is considered by his Department sufficient return in view of the length of time these regiments have been in training?

The payment of 7s. 6d. represents a daily rate to cover wear and tear of civilian clothing for a month. In cases where it is necessary to extend the period, the daily rate will be extended also up to a total limit of 15s. Inquiry is being made into the case of the Scottish regiments at Kettering.

asked the Under-Secretary for War whether the sub-contract for the supply of materials in connection with the erection of huts by Mr. Randolph Meech, of Hamworthy, Poole, contains the Fair-Wages Clause; and whether he has yet received any reply from the two contractors concerned with regard to the complaint that the carpenters were not receiving the proper rate of wages?

Replies from the two contractors concerned show that the orders placed with Mr. R. Meech did not contain the Fair-Wages Clause. Instructions are being issued to all firms acting on behalf of the War Office that this Clause should be included in all contracts made by them. Mr. Meech has been asked for his remarks on the complaint, and directions have been given that pending a satisfactory explanation no further orders are to be placed with him.

Would the hon. Gentleman consider the advisability of appointing one or two ex-inspectors for the time being to see that the Fair-Wages Clause is observed?

I think that the Fair-Wages Clause is almost universally included. This happened to be a particular emergency order—over the counter, so to speak—and it was only for that reason that it was not in the contract. I doubt if there was a signed contract.

asked the Under-Secretary of State for War if his attention has been called to the sum paid to licence holders for billeting horses when compared with the sum paid to others for the same accommodation; if the sum of 1s. 9d. per day paid at present prices of feeding stuff does not represent a loss, why the ordinary rate of 2s. 7½d. for the same should not be paid to them; and if he will take steps in the matter?

The statutory rate of 1s. 9d. covers the cost of forage supplied by a licence holder. The position of a private occupier with regard to billeting is altogether different, and this is recognised by a higher rate.

Is it suggested that it costs a licensed victualler 10½d. less to keep a horse than an ordinary individual; if that is not so, is this not an indirect war tax, in addition to the other taxes upon the licensed victualler?

No, Sir, I do not think that that is so. If the hon. Gentleman will put himself in the position of a private occupier I think he will see that that is not the case, as the billeting of the horses causes to the private occupier considerably more inconvenience, expense, and disturbance.

asked the Financial Secretary to the War Office whether firms are being asked by the War Office to tender for furniture at dates on which it is impossible to do so, having regard to the time necessary for application to be made for specification forms through the post; and whether he proposes to take any action in the matter?

The proportion of replies to invitations to tender for furniture does not suggest that the time allowed has been insufficient for the preparation of tenders. The urgent need of securing early supplies renders it necessary to obtain tenders with the minimum of delay, but every effort is and will be made to allow as much time as possible for their return.

asked the Financial Secretary to the War Office whether ex-soldiers who re-enlist are entitled to any extra rate of pay for which they had qualified during their previous service; and, if not, has he received complaints on the ground of unfair treatment of re-enlisted soldiers as compared with soldiers who have not served before?

Broadly speaking, the-rates on re-enlistment correspond to the old rates. I have not received any complaints. If my hon. Friend will give me particulars, I will have inquiry made.

Does the Chancellor of the Exchequer propose to make any statement in regard to this Clause?

I think I stated the last time I addressed the House on the subject of the Finance Bill that I was in communication with the brewing industry of the country and with the retail trade as well. The hon. Member opposite made a very moderate and powerful appeal to the House for the reconsideration of the duty on beer, and of the figure which the Government suggested to the House. I am not saying, without having considered the matter, that it is a very heavy increase in the duty which is imposed. I must say that the way in which the trade has accepted, I will not say the actual figures, but accepted the fact that they must be prepared to face an increase in taxation is a thing which is in itself a gratifying symptom of the present moment. They have not protested in the slightest degree against the imposition on their trade of a very heavy duty. They have protested against details and have made strong representations on the subject. They have submitted to the Government very detailed figures showing that if the figure were placed at 17s. 3d. it would be impossible for them, even with the addition of ½d. on the half-pint, to carry on their business without very severe loss, which would amount in many cases to difficulty, if not bankruptcy. The conclusion we came to was this. Supposing a new brewery were started at the present moment and adapted itself to the diminution in the quantity of beer which will be consumed, we think that the 17s. 3d. imposed by the Government would enable them not merely to pay the duty, but also to have a reasonable margin of profit. But that is not quite the case here. You are dealing with a trade which has its own establishment—an establishment which is adapted to the present rate of consumption. With the compulsory curtailment of the hours of labour and the removal from Great Britain of a very considerable number of people who might fairly be regarded as probable customers, and also with the inevitable reduction in the consumption which will be effected, we came to the conclusion that it might be impossible for the trade for a year or two or even three years, to adapt itself immediately to the demand upon it in these circumstances. Therefore, although we think 17s. 3d. a perfectly fair thing as a standard, there ought to be some relief granted for the first three years on the amount of the charge, so as to give the trade time to cut down its establishment charges, to effect economies, and generally to put itself in a position to adapt itself to such an enormous increase upon its charges. The proposal which we make is this: We stand by the 17s. 3d. duty per barrel, but we propose that up to 31st March, 1916, there should be a rebate of 2s. per barrel and that the actual charge should be 15s. 3d., that after 31st March, 1916, and up to 31st March, 1917, there should be a rebate of 1s., and that after that date the full duty of 17s. 3d. should apply. This should give the trade the necessary time to adapt itself to the new condition which is undoubtedly imposed upon it by this enormously increased duty. I am bound to say that the right hon. Gentleman opposite (Mr. Chamberlain) thinks that we ought to go further and make a little more liberal and generous allowance. If we did that, we should be unfair not merely to the general tax payer, but also to the general public who are paying this ½d.

I think the trade are entitled, as a whole, to ask that the Government should impose the duty upon them in such a way as not to inflict a serious injury upon their business. This is not a temperance proposal; it is a fiscal proposal for the purpose of raising money for the War, and we are bound to consider it from that point of view. I have considered it exclusively from that point of view: as an instrument for the raising of money for the purposes of the War. I have set before myself as an object that this money ought to be raised without inflicting any unfairness upon the trade itself and without doing any injury to it that we can possibly avoid. Of course, the reduction in consumption is bound also to diminish profits. That is in the nature of every tax upon commodities of any sort or kind. That we cannot avoid, but within those limits it is right that the Government should be called upon to consider this problem from the point of view of imposing a charge merely for fiscal purposes, and they ought to do it with the least possible injury to the particular trade upon which they are imposing the duty. I am sorry the right hon. Gentleman does not think that we have gone quite far enough, but I think we shall find on the whole that the trade will not suffer very much from this imposition. There will undoubtedly be a reduction in consumption which will not be due to this charge.

There has already been a very large reduction.

Not very large. There has undoubtedly been some reduction in the amount consumed which is attributable to the curtailment of the hours of business, but I am not sure that the public will not gradually accommodate itself to the change of hours. The removal of one or two million men across the seas within the next twelve months will also undoubtedly have an effect. The Government are not responsible to make up that loss, and I do not think that it ought to be taken into account; but when you come to a reduction that can be directly attributable to the tax of between 30 and 50 per cent., then, I think, the trade are entitled to ask us to impose it in such a form as not to do any injustice to their business, and not to do any severe damage to them. That is the point of view from which we have approached the matter. I might give one or two figures on this occasion. It is a very difficult duty to adjust, because the charge, as the Committee will realise, is not a charge upon the actual barrel. If you said, "Here is a barrel of beer, we will charge 25s. upon it," it would be a very easy matter. But the barrel of beer for duty purposes is purely an abstraction. It is something which is called "a standard barrel," the standard barrel being a question of gravity, and not of bulk. You have got in every barrel of beer 288 pints, but for business purposes you have only 272 pints—16 are waste in some shape or another. It is lost by the publican when he transfers the beer from the barrel to the pewter. Then you have the dregs as well. Yon have eight pints of dregs and eight pints of waste. Therefore the publican has for sale 272 pints. That has to be taken into account when you are fixing your duty. The standard barrel of beer is a 55 degree beer. That is not drunk by the public as a general rule, except in Ireland. They like to get it really good, solid, thick, and stimulating, and it is mostly drunk there in the form of stout. I do not think there is very much beer in the ordinary sense drank there. Stout is beer for the purposes of taxation, luckily. In Scotland I am told the average is about 47 degrees.

I thought it was higher.

I am told it is 47.

Then it has gone down.

This is the information I got only this morning. The average in England is about 51 degrees, but that includes all classes of beer. It includes your bottle beer and also your lager beer. There is a very great difference in the taxation according to the gravity of the beer itself. A 55 degree beer would pay the full 25s. They like to have something really stimulating in the right hon. Gentleman's constituency, and they drink beer of very strong gravity in the Midlands. I do not think they do so in the hon. and learned Member's (Mr. Harold Smith's) constituency. They rather like it light Take the 55 degree beer. There you pay the full 25s. Take the average beer for the whole of England. They pay 23s. 6d. What does that mean? They pay on a barrel of average beer something like 1s. 6d. less than the charge we are imposing. All that, from the trade point of view, is a kind of margin created for the purpose of enabling the brewer and the publican to tide over their difficulties. But you take the cheap light beer which is sold sometimes in London and in the Home Counties, and I am not at all sure that it is not sold very largely in the West. That is a 41 degree beer. There, instead of paying 25s. on your barrel, you pay 18s. 7½d. roughly. That shows how difficult it is to adjust this tax. A brewer who is selling the 41 degree beer will get 6s. 5d. in the gravity to begin with, and we are allowing another 5s.

He sells the beer cheaper.

That is a false point, and I am very surprised that the hon. Baronet should make it. The publican charges a halfpenny per half pint in respect of that particular transaction, and a halfpenny on a barrel is 22s. 8d.

No—

If the hon. Baronet will allow me, I will finish my argument. He can answer me afterwards. A halfpenny a half pint is 22s. 8d. per barrel. We are charging 17s. 3d., so there is 5s. 5d. to enable the publican to adapt himself to the diminution of business. I agree it is not enough upon all gravities, but on the lower gravities he gets not merely 5s. 5d. but also 7s., which is given in in the difference of gravity, and it ought to enable him at any rate to get along very well by charging the extra halfpenny. The House of Commons has drawn this distinction between the heavy and lighter beers, because it wants to encourage the trade in lighter beers, and I should be sorry to take away the financial inducement we are now offering to publicans to push the lighter beer rather than the heavier one. That is why, instead of altering the charge on gravity, we thought it better to make an allowance for the first two or three years to enable the publican to adapt himself to the altered conditions. I understand there will be a new Clause moved to-night, and in it we shall provide for a rebate of 2s. per barrel up to the 31st March, 1916, and a rebate of 1s. per barrel up to the 31st March, 1917. Having regard to the fact that both brewers and publicans have stocks in hand upon which they are charging the extra halfpenny at the present moment—

In the same way as the grocers are charging the extra duty on tea.

Having regard to these facts, I think the concession made by the Government ought to enable the trade to bear this additional charge without serious injury.

Can the right hon. Gentleman say at what he estimates the cost of this concession?

About £450,000 for the present year, and between £3,000,000 and £4,000,000 for the three years.

I had hoped I should have been able to dispense with the necessity of making any observations as to whether or not I exactly agreed with this provision, but I am afraid I must occupy the time of the Committee, although I will not keep it very long, in explaining my position. As I came into the House this afternoon, I met an hon. Friend who suggested that I was occupying a very awkward position at the present time, and I am inclined to agree with that. At this moment I do not know whether I have to resign from the Cabinet of which I am not a Member. I am afraid I have to do so. In other words, I find myself so much divided in opinion from the Chancellor of the Exchequer that I cannot, by my silence, take any responsibility for the decision of which the Government has arrived. I desire at once to say that, in the confidential conversations which I have had with the Chancellor of the Exchequer and his colleagues since I was invited to discuss the details of the Budget with the right hon. Gentleman, I can make no complaint whatever of the spirit in which he has approached the questions with which we have had to deal. I am not merely ready, but I am desirous to admit that he has looked at the questions which came before him as revenue questions pure and simple, and has not allowed himself to diverge towards any ulterior objects which might have had a place in other Budgets, but which clearly ought to be excluded from an emergency Budget of this kind. It is not therefore of the spirit of the Chancellor of the Exchequer or of the purpose to which he has set himself that I complain.

But I differ from the judgment which he has formed. I think that the burden which he thinks he can appropriately place on the trade to correspond with the increase of a ½d on the half-pint of the consumer is heavier than the trade can fairly be asked to bear. At this stage I may just say, in passing, that I recognise, as the Committee must have recognised, that when I accepted the invitation of the Chancellor of the Exchequer to confer with him and his colleagues privately on these matters I forwent the ordinary freedom of criticism, because it is not possible at one moment to be in the most confidential discussion with a Minister and then to play your part in debate as if nothing had passed between you. Therefore I am not going to make an elaborate argument such as I might have presented to the Committee under other circumstances. If I did so, I should necessarily base myself in part on facts which came to my knowledge owing to my collaboration with the right hon. Gentleman, although in the majority of cases, certainly, they would no doubt have been available to me if I had never been called into consultation at all and had sought to obtain them for myself. At the same time I realise that limits are placed on my action by the fact that I did enter into the consultations, and I think the House will understand my desire to keep well within those limitations, rather than to run any risk of transgression. I can quite understand a great many people making a simple arithmetical calculation as to the number of half-pints in a standard barrel on which duty will be charged, and the additional number of half-pints which there are in an average barrel as such, and supposing that the trade, either in the shape of the brewer or the publican, had the whole of the addition. That is not so. Even if there is a general rise of a ½d. on the half-pint, it does not follow that every half-pint that is sold will carry the extra ½d. with it. When you sell a half-pint only I think it will, but when you sell by the gallon or the jug probably something of the ½d. will be given back in increased measure. If the order is large enough, some of the extra halfpennies may be taken off.

What about the glass which is less than a half-pint.

If the hon. Member studies the trade he will find that a very small part of the trade in workmen's beer is done by the glass. It is usually sold by the half-pint. But for the purpose of the discussion of this tax I really think we should only confuse our minds by going into that question. At any rate I want to keep to very simple facts. How much of that ½d. the trade will be able to get, and on how many of the half-pints in the barrel the trade will be able to get the additional ½d. is a thing nobody, not even a brewer himself, can say at the present time with absolute certainty. He will not get the whole of it, and he will not get anything that you can prove or any result that you can arrive at by a purely mathematical calculation. The effect of raising the price will be, undoubtedly, to give a great shock to the consumption and cause a great fall in the consumption. At the moment, in my opinion, the fall will be very heavy. It will tend in the course of succeeding months and years to recover, but it will not get back to the point where it was before the additional duty was imposed. That is the reason for a sliding scale, such as the Chancellor of the Exchequer has proposed, and I am glad that he has at any rate gone that far. I want the Committee to consider for a moment what the effect of such a reduction of consumption is upon the brewers' profits. People sometimes speak and argue as if it were the case that if you reduce the sale from four barrels to three you reduce the profits in the same proportion. That is not so. I am going to take a purely imaginary figure, which has no relation to the facts, merely in order to illustrate my argument. Having asked the Committee to bear in mind that the object set before us by the Chancellor of the Exchequer is, as far as this tax is concerned, to leave the profit to the trader as little altered as possible—he wants the publican and the brewer to get out of the increased price such a sum as will pay them their old profits, if they are reasonable and average traders, and will enable them to pay him the increased duty that he asks—I ask the Committee to look at the case I am imagining. Suppose you sold four barrels of beer at a profit of 5s. each, you made a profit of 20s. on the four barrels. Suppose that the result of your tax alone, without the other circumstances to which the Chancellor of the Exchequer alluded, is to reduce the consumption by one-quarter, then instead of selling four barrels you will sell three. Suppose you make the old profit on them, are you as well off? Of course you are not. Your total profit is then 5s. on each of the three barrels, or 15s. in place of the 20s. Accordingly, if you want to make the man as well off as he was before, you have to enable him now, when he sells only three barrels, to make the same total profit on the three barrels that he previously made on the four barrels. In other words, subject to one consideration, in order to make the three barrels produce the same profit of 20s. that was produced by the four barrels, he must make a profit on each barrel of 6s. 8d. instead of 5s.

It may be asked are there no reductions he can make in his expenditure. What deductions can he make? It is an extremely difficult figure to arrive at. The Chancellor of the Exchequer has said, and I fully bear out what he said, that representative brewers placed before us with great candour and fairness figures drawn from their own experience—the kind of figures which in ordinary circumstances are the secret of the partners in a business and revealed to nobody else. Even with the aid of those figures it is extraordinarily difficult to arrive at any result. No man of business experience will pretend that in any business it is possible to reduce your standing charges in the same proportion as that in which your turnover is reduced. It is true that if you equip a new brewery, with a knowledge of all the new conditions, so that it shall be made to turn out just the amount of trade you can do, you can work on the most economical figure. But when you take a brewery equipped and started to turn out 100 units and if to-morrow your trade drops from 100 units to 75 units, you cannot cut down expenses in the same proportion or in anything like the same proportion. Those are very important factors. If you examined the different brewers and if they told you exactly what they believed, you would get different results and different estimates from each of them, partly according to the nature of their trade, and partly according to their own expectations of what the course of the trade generally would be. It is impossible for any of us to pretend to make such calculations accurately. Anyone who has not examined all these questions carefully is not in a position to form an estimate of what the trade can afford to do at all, and the mere fact that you say you are going to add ½d. to the half-pint to the consumer is absolutely no guide, without a detailed examination of all these factors of the tax, as to whether it would be fair to the brewer.

I do not suppose the Chancellor of the Exchequer will mind my saying that I think probably he has given away a little more than he would have done if he had never been in conference. He might have come without my assistance to exactly the same decision. At any rate, I am not prepared to say that he refused, and he certainly did not refuse, me a hearing, and I am not prepared to say that he refused me any concessions. That being so, I do not want to say what is the further concession for which I should ask, or what is the figure I myself would have selected on such information as was available. I do not think it would serve any public purpose. I am quite ready to state it to the Chancellor of the Exchequer, but I do not think it is necessary for me to state it here. But I do have to say that, in my opinion, the margin allowed for these circumstances which I have been attempting to sketch to the Committee is not sufficient, and that I cannot assume personal responsibility, even in the way I might otherwise have done, and do, in regard to some other matters in the Budget, subject to the limitations imposed upon me. Considering these circumstances, I cannot assume personal responsibility for the result, even as a compromise. That is all that it is necessary for me to say in personal explanation. I hope it will not be necessary for me, under all the circumstances, to take any part in the discussion to which the Chancellor of the Exchequer's proposal gives rise.

There is, however, one general observation I should like to add. The Chancellor of the Exchequer spoke of this tax as a War Tax. So it is. But that is a phrase which is open to misunderstanding, and a misunderstanding which might be dangerous. All the new taxes which the Chancellor of the Exchequer is now putting on is war taxation, but if anybody thinks that all of it can come off when the War ends, or even three months or six months or twelve months after the close of the War, they are making a great mistake. However high the yield of the taxation is during the War, it will be but a small fraction of the liabilities which will be maturing during the War, even should the rest of them be met by a loan. After the War is over, there will be gradually, for a term of years, other liabilities maturing under the guarantees which the Government have had to give, and which will form the subject of discussion in the Bill dealing with guarantees to-morrow. For a generation—it may be for two generations—we shall still be paying part of the cost of this War, and therefore you must not put on a tax under the impression that, after all, it is only going to last for a year or two years, and therefore it does not very much matter. You have got to bear in mind that huge additional resources will be required for many years after peace has been made. I do not mean to say that we may not in time look forward to some reduction in our burden; but the man would be rash indeed who, at the present stage of the War, before we are in sight of peace, counted upon such reduction in armaments as a result of this War as would enable him to counterbalance to any considerable degree the enormous additional burden caused by the War itself. That is a factor which ought to be impressed upon our countrymen at once, because, while it is right that they should make this great sacrifice now, it is not right that we should delude them into believing that they are making it only momentarily. They have got to bear it for many years, and they have got to be as stubborn in bearing their burden as the men in the trenches are stubborn in bearing theirs. That is germane to the appeal I should have made to the Chancellor of the Exchequer for greater indulgence at the moment. If these duties were only to remain in force for a short time, if within a few months of the close of the War the whole of the taxes would come off and the ½d. charged to the consumer would come off, the right hon. Gentleman might say, "I must get the last farthing I can." I do not say that has been the attitude of the Chancellor of the Exchequer on the point, but a Minister or Members of the House might say we must make hay while the sun shines. What the taxes will produce during the War is only a small part of what they will have to produce in the long years after the War, and it is far more important, to my mind, to bring them into operation without economical hardship and friction. It is far less dangerous to drop a little money at the beginning than to produce a sense of injustice, and it would be a wise policy for the House of Commons, in imposing such large burdens, either on Income Tax payers or on traders, to be very generous in the inception, and to make up their minds that the more smoothly they can set their taxes to work the larger will be the revenue that in the long run they will get out of them.

I should like to follow the spirit and attitude of the right hon. Gentleman (Mr. Chamberlain) in discussing what we must all regard as essentially a very important fiscal question. I am sure that in no part of the Committee will the right hon. Gentleman's spirit and attitude be more appreciated than by those who sit on these Benches. I listened with very special relief to the announcement which the Chancellor of the Exchequer made a few moments ago. Like all, I suppose, who have attempted to grasp any of those intricacies connected with this question to which the Chancellor of the Exchequer referred, I must frankly say I felt when the right hon. Gentleman put forth his original proposal that he was pressing the trade further than it could be fairly be called upon to bear the burden, and that consideration was the more important because I thoroughly appreciate the spirit in which the Chancellor of the Exchequer has approached this matter from a desire to treat it and judge it on purely fiscal grounds, and not from any propagandist or temperance point of view. I will not say that the Chancellor of the Exchequer has fully met my misgivings in the concession which he has just announced. He has said, very properly, that if he went further in the way of concessions he might be doing an injustice to the taxpayer himself. When the Government puts forward a proposal which, by its very nature, has for one of its consequences a very great burden upon trade, and if the Chancellor of the Exchequer proposes a tax upon a particular trade which inevitably, in the very nature of things, tends to reduce the volume and measure of the trade done by that industry, he is bound to have some regard to the consequences which make themselves apparent in the reduction of the volume of trade.

Another point that has to be considered is that by the very nature of our fiscal system, and by the Exchequer demands which require that duty shall be paid by a particular industry on a particular date, you inevitably create in regard to this particular industry a necessity for a large volume of what I may call floating capital by which the Treasury itself may be advanced the amount of money which otherwise it might, in the ordinary processes of trade, have to wait a very considerable period for, and we must never lose sight of the fact in regard to this particular proposal that the State fixes a limit to the period within which the duty must be paid, whereas the trade itself on its part has to provide a much longer period of credit for its customers in that trade. But I am inclined to think, on reflection, while personally I should desire that the Chancellor of the Exchequer could have seen his way to extend the provisional period a little longer still, the trade will find a material benefit and advantage from the proposal which the Chancellor of the Exchequer has made. After all, the real injustice which the original proposal placed upon the trade was that the Chancellor of the Exchequer was calling for the advance of a considerable sum of money in the form of a duty which the brewer had no possible chance of getting back from his customers except within a much longer period. It seems to me that one inevitable consequence of this new proposal which the right hon. Gentleman has made will be that in the transitional period the trade may be able to accommodate itself to the altered conditions by revising the credit period which at present the brewers allow to their customers. I imagine that if the brewing industry can take into reconsideration the period of trade credit they may very considerably soften for themselves the pressure of this new tax even when the transitional period has passed.

But, after all, the real disadvantage of this, as of all kindred proposals, is the inevitable inequality of incidence which is bound up in them. The Chancellor of the Exchequer has said that he is seeking by this tax—and that may possibly be within limits one of its indirect results—to give an advantage to the brewers of the lighter beers. I am not quite sure that that is the best way to bring about equality. I have long held that in reference to taxation, both of beer and spirits and all excisable liquors, a much more thorough and simple as well as scientific plan would be to tax these products according to their alcoholic strength. Throughout the Continent in recent years there has been an increasing tendency to tax beer according to its alcoholic strength—to divide the products of beer into certain categories according to alcoholic strength and tax them relatively to their alcoholic strength—but I believe, and I sincerely hope, that the time will come, when the pressure of this war taxation has passed, when the Treasury and the Inland Revenue may have time to reconsider the whole basis of our taxation of the liquor trade, both in reference to the Excise product and the manufactured product and the Licence Duty, and seek for a basis of taxation which will be more free from the inequalities which now attach to the existing system than is the case at present. But, on the whole, I confess to a sense of distinct relief at the concession which the right hon. Gentleman has announced this afternoon, and I hope and believe that the trade may, in the transitional period, by altering their period of trade credit, adapt themselves to the increased taxation.

I should like to thank the hon. Member for the extremely able and temperate way in which he has dealt with the Chancellor of the Exchequer's statement. His speech shows his very intimate knowledge with the question. I endeavoured the other day to make a certain number of points which the hon. Member has now reasserted, and I shall adhere to the position I then took up, that the right hon. Gentleman has not anything like discovered the enormous effect his new taxation is going to have on the pockets of the publican, not arising altogether from the existing circumstances, but arising in a very great measure, as I am sorry to see from telegrams which have just been sent to me, from the objection which the public has to any extra cost being put on its drink. We know what happened when the Whisky Tax was increased, and I am sorry to say the very same thing is happening apparently in England owing to the increase in the price of beer. These telegrams are addressed, not to me, but to the National Trade Defence Association, in Queen Anne's Chambers. They come from Portsmouth, and they say that already the customers there are avoiding beer, and the drop in sales is from 50 to 64 per cent. That, I earnestly hope, is not going to continue and I am not going to make any point about it. I hope that feeling will vanish before long and that there may be some moderate return, though there cannot possibly be an entire return to the original sales. For my own part, and on behalf of those who saw the Chancellor of the Exchequer, I have to thank him for the very kindly way in which he heard what we said, and the careful way in which he no doubt had gone into the figures. They were very striking figures. They bear out, I should think, in every case what I said to the House last Thursday. In some cases they went far beyond the figures I gave and the statements I made about the effect of this reduction. In some cases they were positively alarming, and I think the right hon. Gentleman will admit that if his calculation of the drop is borne out—35 per cent. of loss in sales—one or two very important concerns will cease to pay very much interest on their capital. The figure which the Chancellor of the Exchequer has fixed today for the first year is beyond the limit of these particular people to meet, and still continue to make a profit on their trade.

I am in the position of not being able to do anything more than accept the decision of the Government. I deplore it. I think it is an unfortunate decision. I think with the hon. Member (Mr. Sherwell) that the limit has been placed too high and that a lower limit ought to have been fixed. This is a case in which you should not adopt the usual practice. The usual practice in ordinary circumstances, I understand, is to take the highest possible figure, and say, "if I find my calculations are wrong, if I am hurting you or anything of that kind, I have a revising Budget in April next and shall reduce it if you satisfy me that you are unable to bear the burden, which I had no intention of imposing on you." That in ordinary circumstances would be quite a proper course to take, but I do not think the circumstances are ordinary. I do not think anyone can calculate what the effect of the tax is going to be. We are harassed, and have to face difficulties of every sort and kind. The navigation of our rivers is stopped and extra railway charges in consequence have to be paid. In my own case the navigation of the Forth has been stopped, and instead of being able to send our product by steam we shall have to send it by rail at an extra charge of 2s. 6d. per barrel. That is a matter that should be taken into account. It is no fault of ours. We are absolutely shut out from the use of what has been our waterway all these years, and that is a very important factor in our business. At the moment, therefore, the right hon. Gentleman ought not to take the course I have indicated, but ought to begin at the lowest point of the scale, and if it is found in April or at the time of the next Budget that too large an allowance has been made, and too big a margin left, I shall be most happy that he shall increase it. That is the real way to deal with the situation.

He has rather taken too high a figure in his last figure of 15s. 3d. Whether the trade will ever be able to pay 16s. 3d. or 17s. 3d. remains to be seen. I dare say he will be open to argument about that. He does not want to penalise us, and I am sure he will treat us fairly and honestly, but he is putting a heavy burden, quite unintentionally, which I do not think the trade can possibly bear. I do not know whether he is in a position to make any alteration in his proposal. I do not know whether the Government has finally decided, if so, I shall leave it at that; but I should like to ask him one or two questions. First of all, he has made no provision whatever for granting a rebate of duty on faulty beer or returned beer? He is not dealing with spirits. He is not dealing with a stable article, but with an article which is extremely difficult to manufacture, and however careful you are and whatever care you may take in the selection of your materials, a little difficulty in fermentation may produce a beer which is unsaleable. That beer cannot be sent out, and if it is, it is very likely returned. When it is returned another barrel has to be brewed to make it good. Of course the man loses his character and all that, but the revenue does not lose by it. The beer is not consumed, and it is replaced by another cask which can be consumed. There is no provision to make any allowance for beer returned, and that is a terrible burden on the trade. Two per cent. or 3 per cent. is about the average of returned beer in the best regulated brewery. Under these circumstances to lose 5s. or 6s. a barrel is one thing, but when it comes to losing 24s. it is perfectly impossible. I shall press the right hon. Gentleman to introduce a Clause into the Bill to deal with that question. I have brought it before him myself, and I know his advisors have mentioned it, and I beg him to consider it in a favourable way. There is another point I should like to ask him whether he has considered. I do not know whether he thinks Clause 7 would protect his revenue against an increase of brewing at home. Of course, if home brewing is to be restricted to an article only containing 16 degrees of alcohol my hon. Friend (Mr. Leif Jones) may safely drink it, because it would be rather weaker than the stone ginger beer, which I was once told he rather affected.

I have avoided it since the hon. Baronet warned me against it.

I am sorry for that, because the hon. Member must have seriously disappointed his palate. If that is intended to produce revenue it is all right, but if the Chancellor of the Exchequer is going to put a heavy duty like this on beer he will largely encourage the manufacture of home beer and very seriously reduce his revenue, and very likely increase smuggling. My right hon. Friend has already challenged the Chancellor of the Exchequer upon his statement that this is a War Tax. I am certain that if this price of beer is established permanently there will also be that permanently established tax—of course in proper relation to the income. Therefore it is all the more important that you should not make a start of this kind without endeavouring to construct the new proposal, not on revolutionary but upon reasonable lines. As to what has been said about the profits upon the large stocks of beer in hand before the imposition of the extra duty, it has been said that very large profits are going to be made by the brewers. I should like to tell the House what is happening Scotland. Reference has been made to certain stocks held by brewers in Scotland, but I can say, speaking from my own experience, that every gallon of that stock was cleared by customers at the old price and not a shilling extra profit will be made by myself or by anyone else.

I did not specially say that it would come to the brewer, but to the trade, and in the case which the hon. Baronet has mentioned it goes to the trade.

It will, of course, be a plum to the retailer, and he thoroughly needs it. I only wish to make it clear that these people should be treated perfectly fairly, and no unfair attempt should be made to obtain any benefit out of the increased duty. I have nothing more to say, except to thank the Chancellor of the Exchequer for what he has said, although I am not altogether satisfied with his statement. I still believe that if he honestly intends, as I am sure he does, to carry out this revolution in the trade without penalising anyone, and if we can show him by actual experience that he is penalising the trade, he will put the matter right in the future.

I am sure we all appreciate the spirit in which this Debate is being conducted, and I am not desirous of discussing this question from a temperance standpoint. The hon. Member for Ayr Burghs (Sir G. Younger) has read a telegram to the House which indicates that a serious decrease has taken place in the sale of beer, and will continue. The hon. Baronet regrets this, and that is the only difference I have with him. Incidentally I might say that I should like to alleviate the anxiety of the hon. Baronet, but, judging from our experience in the past, I feel sure that if the Chancellor of the Exchequer had come here to-day and made his proposal 10s. 3d., the hon. Baronet opposite would have got up and said that it was too much.

No. I think the Chancellor of the Exchequer will confirm me when I say that I mentioned a higher figure than 10s. 3d.

Some hon. Members have been at great pains to point out that if any further burdens are placed upon the trade it will be done for, and I was judging the hon. Baronet's remarks from that point of view. I congratulate the hon. Baronet upon having succeeded in taking £3,000,000 from the Chancellor of the Exchequer's Budget. The primary point I wish to deal with is to try and show that this is one of the clearest illustrations of the unfair methods of indirect taxation. In the two taxes which were primarily intended to deal with the poor man, namely, the Tea Duty and the Beer Duty, immediately 3d. is put on tea the poor people are charged 1d. extra for a quarter of a pound, and if they buy a few ounces of tea the proportion is more. Consequently, whilst the Chancellor of the Exchequer gets 3d. per pound on tea the poor people are paying 4d. extra in taxation. In the particular case we are dealing with, and taking the figures of the Chancellor of the Exchequer himself, it works out something like this: The right hon. Gentleman gets 15s. 3d. on beer as a contribution to the War Taxes. Already I have seen a circular from the brewers in Nottingham and Derby intimating to the publicans that the taxes to them amount to £1. This applies to the taxes already charged, and over and above that they themselves are only paying 15s. 3d. They have charged the publican £1, and the public are called upon to pay £1 2s. 8d., or, in other words, the poor people who have been talked about so much in this matter are paying £1 2s. 8d. as their contribution on the increased price of beer, while the Exchequer gets 15s. 3d. There again you have another illustration of the unfair manner in which the poor people are always called upon to bear the burden, and I submit that with the original margin between 17s. 3d. and £1 2s. 8d., which the Chancellor of the Exchequer clearly indicated was making every allowance for wastage, I regret the further concession of £3,000,000 in this connection.

I wish to ask the Chancellor of the Exchequer if he is prepared to make any concession in the Customs Duty on what is called black beer? Will he make the same concession which he has promised with regard to home-brewed beer? I am told that black beer is more a food for invalids than ordinary beer, and the trade in black beer is very much affected by this high duty. I have a letter from a large retailer in black beer, and he says that the effect of the additional duty will practically be to kill the trade. I am sure the Chancellor of Exchequer did not wish to interfere with the trade in connection with a food for invalids. I should be very glad to know whether he is ready to make any abatement in regard to black beer to correspond with what he has promised in regard to home-brewed beer?

I am in agreement with the views which have been put forward by the Chancellor of the Exchequer that this tax should be borne by the consumers and should not fall upon the brewing trade. I have listened carefully to the views expressed by the hon. Baronet opposite upon the duty as it has been proposed, and what I find is that there is an absence of any sort of figure which will give any evidence that what is allowed to the brewing trade by the Chancellor of the Exchequer is not sufficient to cover any demand which is now being made upon them.

We have had the opportunity of laying such figures before the Chancellor of the Exchequer, and we formed our opinion on such detailed information.

I have made some calculations of my own and I propose to go into them. As far as I can judge, the margin allowed to the brewing trade by the £1 charged to the consumer will really cover the whole cost to the brewing trade. I take the figures for the financial year ending April this year, and I find that the brewing trade has paid a tax in round figures on 35,000,000 standard barrels; but really they sold to the public 37,500,000 barrels.

Where did you get those figures from?

I think they are fairly correct.

I have asked the hon. Member where he got his figures from? I suppose he got them from the Excise returns, and they do not deal with standard barrels sold.

Yes, I got them from the Excise returns. My calculation was made for the financial year. I have got the exact returns from the calendar year 1913, but these figures have been calculated for me, and they have not been published. It docs not really affect the argument, or, at any rate, only in a fractional degree.

Is the hon. Member quite certain that he is speaking of standard barrels?

My point is that in paying the tax the brewer pays a proportion of thirty-five in taxes, and receives from the public thirty-seven and a half payments in selling a barrel. That proportion will be continued for every pint of beer which is sold, and taking that proportion of thirty-seven and a half to thirty-five, and reducing it, it comes down to the proportion of fifteen to fourteen.

Does the hon. Member suppose that on these light beers the publican is going to get an extra 1d. per pint?

Yes.

No, he will not, because he will sell a larger measure.

I believe that he will charge the extra 1d. a pint on these light beers, and I am informed that he is already doing it. Where the trade have been paying fourteen times 17s. 3d., in the future they are going to receive from the public fifteen times 24s. In other words, you have to spread a profit of 24s. over every fourteen barrels sold. In other words, there is an extra gain to the trade in selling to the public of 24-14ths of a shilling on every barrel sold, or very nearly 1s. 9d. a barrel, to add to the margin of allowance in the Chancellor of the Exchequer's figures. This is very complicated, and I am not sure whether I have made clear to the Committee what is perfectly clear to myself. Before the concession was made by the Chancellor of the Exchequer the tax was to be 17s. 3d. a barrel, and the trade was going to get From the public a penny a pint, which would amount to 24s. That gives us—

What about the waste?

The Chancellor of the Exchequer takes a figure of 22s. 8d. I think that that made a very generous allowance to the trade for wastage and so on, and I think that the trade have ways of preventing that waste. My impression is that 24s. is a great deal nearer what they will get than 22s. 8d. At any rate I am going to show that the margin is sufficient to cover them. Assume for the moment they will get 24s.—that is, 6s. 9d. on the barrel. They will sell fifteen barrels for every fourteen on which they pay duty to the Chancellor of the Exchequer, which gives another 1s. 9d. on the standard barrel. That means that on every standard barrel brewed on which they pay duty to the Government they have a margin of 8s. 6d. a barrel, which is amply sufficient to cover any loss that is foreseen on the figures of the Chancellor of the Exchequer. The calculation of the Chancellor of the Exchequer was that the reduction in the trade was going to amount to 35 per cent. That means a reduction of about 12,000,000 barrels in the year. Take a profit of 10s. a barrel, which is allowed commonly as compensation to the trade for loss of trade, and on this basis the loss due to loss of trade would not exceed £6,000,000. But assuming, again, the Chancellor of the Exchequer's figures, the trade are going to sell next year somewhere about 23,000,000 barrels, being a reduction of 35 per cent. below last year's figures, and the compensation at 8s. 6d. a barrel, which the brewers will receive, will amount to a little over £9,500,000. The loss of profit due to decreased sales is only £6,000,000 on the Chancellor's own showing, which means that there is £3,500,000 going into the pockets of the brewing trade with which to finance the scheme of the Chancellor of the Exchequer. I would like the hon. Baronet to produce figures which would upset those figures. The hon. Baronet exhibits a certain amount of mirth—

The hon. Gentleman's calculations are perfectly ludicrous. He has wholly forgotten that the brewer's profit is gone owing to the drop in trade of 35 per cent.

I do not see what fault the hon. Baronet can find with the argument, except that he says the trade are not going to charge a penny on the pint, which I have yet to see.

There will be a larger measure.

On this 23,000,000 barrels they will receive extra from the public, over and above the tax, £9,500,000. The loss on the 12,000,000 barrels which they do not sell, taking it at 10s. a barrel which is a very ample allowance for the trade—is only £6,000,000, which means that the brewing trade will have £3,500,000 out of which to make new payments to the Exchequer to finance the business. The trade is perfectly safe in the matter. I do not wish it to be otherwise. But with the new concessions which the Chancellor of the Exchequer announced to-day it seems to me that the members of the trade may be perfectly easy in their own minds that the adjustment which they have to make will be well greased by the amount of money which they have passing through their hands in order to put the system into operation, and that they have nothing to fear, which is the purpose of the House and my purpose at this moment, because I have no wish to put this on the brewing trade. I contend that the figures prove, that the burden will fall entirely, as it is intended to fall, on the consumer, and the hon. Baronet may rest easy with that assurance.

From the figures which the hon. Gentleman has given, the House will recognise that he is not a business man. His speech reminds me of the story of the man who used to make shawls, and he sold them so cheaply that he lost 2s. 6d. on every shawl which he made. He was asked how then did he manage to make a profit on his business, and his reply was that it was owing to the number that he sold. The important point which the hon. Gentleman does not take properly into account is the cost of production. Then there is the question of the enormous disturbance of the trade to the country, which would be caused by the reduction of the output of large businesses to less than two-thirds of what it is at the present moment. How would the Chancellor of the Exchequer like the doubling of the burden on a department such as the postal service? He would say at once that it would reduce my output. He is so fond of reducing people's output; why does he not reduce his own first, and see what it looks like at the end of three months? He is going to take three months' experience of this tax, just to see how it goes, and whether he will lose money or not, and he will be able to find out no doubt, as Chancellor of the Exchequer, from the Income Tax returns, what the profits are of the firms who are affected. No doubt in a trade like this the weakest will go to the wall. The strongest only can carry on. But we should think of the trade as a whole, and should have some consideration for those who are not in as strong a position as others. At the same time we are going to pay this tax as patriots to finance this War, without a growl or a frown. We are going to stand up like men and do our share. But this tax will have one very great effect. Immediately the War ceases, it will be the excuse for every workman in the country to demand more money for his drink. It will lead to turmoil among the labouring classes. The result will be that you will immediately increase the cost of production of every article in the Kingdom.

This is a very knotty proposal indeed, and I do not understand it. It is altering a system that has been in operation for a very great number of years, owing, I believe, to some scientific flaw in the specification table, with which I need not trouble the House. But there is a very novel and extraordinary Section of this Clause, which says that this particular table has been signed by the chairman of the Commissioners of Customs and Excise, and deposited not in the Vote Office, and not attached to the Bill, but deposited in the office of the King's Remembrancer of the Royal Courts of Justice. Who is he? Where does he exist? I understand that, when he was asked to provide a copy of this table, he stated that he had never heard of it. I understand that a small committee of the brewers have agreed with the Excise authorities on this matter. But I do submit that, when there is anything of this kind, it should be put into the Schedule of the Bill, or should be available in the Vote Office, and it ought not to be hidden away, if it exists at all, in some remote office in the City. I do not even know where it exists.

The hon. Baronet is perfectly right. This is a matter that was discussed between the brewers and the Customs and Excise authorities for a very long period. I believe that it is practically an agreed new Schedule. What was felt was this, that when we put a duty on beer it was of very great importance that the Schedule should be on a much more scientific basis than the present one. It gives nothing to the Exchequer.

Three halfpence a barrel, or twopence.

I am told that it is practically very little. With regard to the second point raised by the hon. Baronet, I understand that the new Schedule is deposited in the Vote Office. It is there now.

I sent actually to this gentleman, and he had not got it.

It is in accordance with precedent that these Schedules should be deposited with this very important official. It is in accordance with the ancient traditions of this realm, from which I do not like to depart. I have never done so in my life. Therefore it was deposited with this ancient official on this occasion. If this had not been done, we should have had the hon. Baronet the Member for the City of London (Sir F. Banbury) complaining of our innovation. This is not a time for innovation, and therefore I thought that the best plan was to adhere to this very ancient and honoured custom. But the Schedule is now in the Vote Office. The committee of brewers have gone into the matter very fully, and the Schedule is there for anybody who wishes to see it.

I would like to know whether this Clause is a protective Clause against home brewing?

The idea is to exempt from duty certain beverages which are now technically beer. The Clause is inserted to protect both the brewer and the revenue against invitations.

I beg to move, in Sub-section (1), after the word "retailer's" ["If the holder of a retailer's"], to leave out the word "on-licence," and to insert instead thereof the word "licence."

The Amendment has reference to the case of the ordinary beer retailer who holds an off-licence. The Clause will be extremely hard upon him, and he ought, in fairness, to have, some concession made to him. There is the half-holiday once a week, and so on, and, as the hon. Member for Aberdeen knows, there is a grievance in Scotland in regard to this matter. A fully-licensed house in Scotland, in many of the country districts, pays actually less than the grocer, £5 and £10 minimum, while the beer seller with an off-licence pays £14. If a concession is given to one part of the trade, it ought to be given to the other.

This case has been put before me by communications I have received from representatives of the beer off-licence holders. The difficulty is this, that speaking of the majority of off-licensed holders, they are not affected in the same way as holders of full licences.

Some of them.

I should like to hear something about their grievance. If the hon. Gentleman can point out to me where there is any real grievance, then I will certainly consider it. The hon. Member referred to the trade in Scotland, and I should like to hear about that. If you take an ordinary grocer's licence, you find that the grocer does not open at more than from eight or nine in the morning until eight at night. Any order of the magistrates therefore, while it nominally affects him, does not do so really. Why therefore should he get an allowance in respect of diminished trade because of a curtailment of hours which does not affect him in the slightest degree?

The right hon. Gentleman has altogether forgotten the off-beerseller, who is a man that pays more Licence Duty than the others, and why is he not to get some allowance?

Formerly grocers were entitled to sell at eight a.m., and now they cannot sell before ten a.m. There is a reduction there.

If the hon. Baronet the Member for Ayr Burghs and my hon. Friend will give me particulars and put before me practical cases of grievance, I shall consider them. I agree there is a nominal grievance, but if it can be pointed out to me that there is a practical grievance, and that these retailers close their premises at a time they have been in the habit of keeping open, and that they are doing that under the order of the magistrates, then I am prepared to consider it. But I do object to giving a privilege which is extended to people whose opportunities of doing business are not curtailed—giving them the same privileges as people obtain whose business is really curtailed. If the hon. Gentleman will give me any particular facts on the subject there will be no difficulty in dealing with the matter when it comes before me. I am not objecting on principle, but on the ground that I do not think that those for whom the hon. Gentlemen speak are in the same position as other portions of the trade. I am prepared, how-ever, to consider the matter between now and the Report stage.

As my hon. Friend said, grocers formerly could open at eight o'clock in the morning, but in some instances they did not take advantage of that, and opened at ten o'clock. Under the Temperance (Scotland) Act, licensed grocers are no longer able to open their premises before ten o'clock, and they are on all fours in that respect with public-houses. Under the enactment to which I have referred, they have suffered loss. Similarly public-houses have suffered loss, but public-houses are getting an advantage from the Chancellor of the Exchequer which grocers are not receiving. They hold that they are entitled to be put on the same footing, now that they are precluded from opening before ten o'clock.

I should like to call the attention of the Chancellor of the Exchequer—having had some experience in this matter—to the fact that an enormous number of off beer licences are granted in this country, for the same hours as ordinary licences. If you go to any village in England you will find two on-licensed premises, where drink can be consumed on the premises, and two other places where beer is not consumed on the premises.

The whole trouble is deeper seated; it is that you can have a fully licensed house for £5, while the grocers pay £10 and £14. As the hours of the latter are being curtailed some part of the alleviation should be granted to them. I am quite sure if the Chancellor of the Exchequer looks into it, he will come to the conclusion that they have a very great grievance, and there is now the opportunity of giving them some form of alleviation.

I beg to move, in Sub-section (1), after the word "premises" ["not have effect as respects premises"], to leave out the words "in any area."

As the Clause stands, I do not think it is fair. In the first place, there is no definition of the word "area"; and, in the second place, the licence holders of an area may get no benefit at all. Therefore I propose that it should read, "This provision shall not have effect as respects premises to which the Secretary of State orders that it is not to apply," and so on. I think a man ought to have the opportunity of proving whether or not he has any advantage before he is penalised in this way. I think it is grossly unfair, besides not being workable. Supposing a particular camp is in question, what would be the area affected by that camp? I submit that each case ought to be tested on its merits.

I think it is quite apparent to those who visit country districts where camps are established at the present time that something of the description contained in the Bill is necessary. As to whether the provision of the Bill exactly meets the case, I do not know. I have had plenty of opportunities, of which I have availed myself, to visit villages in my own region and the camps now established on Salisbury Plain. There are public-houses in different villages around the Plain which did very little trade before the War broke out. The existence of these great camps of the New Army now being organised in different parts of the country has resulted in public-houses that have hitherto done scarcely any business beyond merely catering for the ordinary population of their respective districts are now doing an enormous business. As a matter of fact, you can go to village public-houses, where once scarcely a customer was to be seen, and find them crowded. If you take the Hampshire side of Salisbury Plain, where there are places filled with troops, in barracks, tents, or huts, you find that the village public-houses have had their business, owing to the presence of this military population, enormously increased. As a matter of fact, the soldiers have to go where they can get accommodation, sometimes going miles, and those public-houses are crowded out. Under these circumstances, I imagine that a Clause of the suggestion suggested here is necessary. I do not know whether the term "area" is suitable, or how the ground is to be covered, but I certainly think that some provision of the kind suggested ought to be made. In these cases instead of losing trade these people are making immense profits as a result of the War. I have seen village public-houses absolutely loaded four or five miles away from camp.

I hope the hon. Baronet will not press this Amendment. The effect might be to convert the Secretary of State for War into a sort of licensing authority to pick and choose amongst the various public-houses of the neighbourhood. That would be an invidious task to cast upon him. In practice the area practically would be defined by the War authorities. You cannot ask them to say that this public-house should be in and that public-house out. They have got to take into account the whole circumstances and prescribe an area, and to consider whether the number of available customers of all classes has increased. In such areas you have privates and officers and the various drafts attached to the battalion, and therefore I think the hon. Baronet may depend on it that all kinds of licensed premises will derive some benefit by the fact that you have got an aggregation of troops in that area. I think it is very much better to leave the words as they are, and that an area should be prescribed rather than that individual public-houses should be singled out and that the Secretary of State for War should be converted into a sort of licensing authority.

I have no objection to the definition of an area, but I would suggest some sort of provision which would not refuse to a man a concession owing to some advantage which he had never received. There will be many cases of the kind, I am told. I know nothing myself about these matters, and the right hon. Gentleman knows I am not in a position, nor do I desire, to press any Amendment. I can only state the case to him, and leave him to decide as he thinks best. I am bound to bring these matters under his notice. I quite agree it would be a cumbrous thing for the Secretary of State for War to arrange this, but the licensing authority could satisfy themselves. I have stated the case; the Chancellor may or may not consider it. I can do nothing more.

I do not wish to suggest any Amendment, but I would suggest that when the Secretary of State or the authority that is to make this order comes to consider the particular area they should not be bound by a Local Government Board area, but that it should be an area of drinking, so to speak. It might seem a very simple thing to take a parish area which might produce the kind of thing mentioned by my hon. Friend. If it is clearly understood that the Secretary of State may take what I may call a drinking area and not a Local Government area he ought to be able to do substantial justice.

I will convey that suggestion to the Secretary of State for War.

I hardly think the period of credit is long enough. There is one point I want to ask the Chancellor to consider against the Report stage to-morrow and that is the propriety of dealing with the question of rebate. Will the right hon. Gentleman undertake to look into the question and suggest a Clause to-morrow? He ought to do so; I press him very hard to do so, and I think it is his duty to do so.

No one knows better than the hon. Baronet that this is a very difficult practical question and there are unlimited possibilities for fraud upon the revenue unless it is very carefully safeguarded. I have gone into the case but I have not yet satisfied myself that I have found a scheme which, while being perfectly fair to the wholesaler and the retailer, will be equally fair to the revenue. I should rather not be forced to deal with the question in this particular Budget. It is one of the things that I have got in my mind. I thought it might be one of the ways I could meet the trade and the proposal I made to-day was the alternative. I am rather inclined to consider the best method of doing this because I conceive infinite possibilities of the revenue being imposed on, and the hon. Baronet knows that perfectly well. There are many who would take advantage of perhaps reducing the amount of duty and which they would regard as within the limits of the law. I am afraid that between now and to-morrow it will be quite impossible to come to any decision on the question, which is one which involves a very considerable amount of money.

made an observation which was inaudible in the Reporters' Gallery.

I quite agree. It is in respect of beer—

made an observation which was inaudible.

I agree, but even then it does run to hundreds of thousands of pounds, so that it is a matter to be carefully considered. It is not as if I were departing from any rule—

You are trebling your duty.

The only ground really for a consideration of the question is that I am proposing to treble the duty. Up to the present the Customs and Excise have invariably refused to consider this question, and successive Governments have invariably refused to alter that decision for reasons which I think are very, very strong. Therefore I should rather myself have a little longer time to consider it. I promise to do so, and on the next occasion for considering the question of the finances of the year, if I am responsible for the revenue of the country, I will give it very careful consideration, and with an open mind and with a desire to do what is fair by the trade. By that time, too, we will be in a better position to know the effects of the duty and to adjust the asperities of the tax.

Nobody has got any time to consider it. You have a revolutionary proposal chucked at your head one day and you have got to submit or otherwise you are not doing your duty to your country. It is very hard lines, and this is a very important matter, as the Chancellor very well knows. With all respect I say to him now it was his duty to ask the experts properly to prepare a statement and a scheme for dealing with the matter, and now for six months you leave open the question of the whole of the difficulty of arranging prices and as to whether the retailer is or is not to receive credit for those returns. I quite admit that some people are not honest, but we must safeguard from fraud the brewer as well as the revenue, because the brewer would be swindled just as much as the revenue, and they are both in the same boat in this respect.

I beg to move, at the end of Sub-section (e), to insert the words "Persons paying Income Tax direct shall be allowed to pay same by two equal instalments, the first of which shall be due on the 1st day of January and the second on the 31st day of March."

When the Bill was down for Second Reading the question of the payment of Income Tax by instalments was raised by the hon. Member for Wigan (Mr. Neville) and by the hon. Member for Warwick and Leamington (Mr. Pollock). The Financial Secretary to the Treasury and the Attorney-General dealt with questions raised during the course of the evening, but so far as I can remember they made no allusion whatever to this question. I have put this Amendment down for the purpose of eliciting some expression of opinion, at all events, from the right hon. Gentleman in charge of the Bill with regard to payment of Income Tax by instalments. As the matter exists at present Income Tax on property and on securities is payable as it accrues due, quarterly or half-yearly or even monthly, as the case may be. But with regard to Income Tax which is payable out of earnings it is all collected in one lump sum at the beginning of January. It has been represented by several hon. Members that that practice, especially on the professional classes, constitutes a very grave hardship. At a very expensive period of the year when money is outgoing in various directions there is a large sum to be paid for Income Tax. As the law is being altered by this Bill in the future a far larger sum than has ever been payable in the past will become due in January.

I suggest to those who have charge of the Bill that this is a matter which requires and deserves attention. To take out of the pockets of professional people this very large sum—large relatively to their income—in one lump is an enormous hardship upon those who have to pay it, and I have proposed this Amendment as a very slight alleviation. The practical result will be to make the tax payable in two instalments with an interval of three months. I have made the second instalment payable on the 31st March in order to bring it within the financial year. That would give a very appreciable relief to the taxpayer, without, as far as I can see, causing any difficulty or embarrassment to the Treasury. The Treasury will merely have to wait a period of three months for the second instalment. I should have liked to propose a much more drastic Amendment, namely, that the Income Tax should be spread over the year; but on consideration it seemed to me that that would be too large a matter to take up in the present state of affairs. Therefore I have put forward this little measure of alleviation, and I very urgently press upon the Treasury authorities the absolute necessity of giving some such relief. We have almost at the end of the year a large increase of Income Tax, and it is obvious that many people who had not expected this increase will, if such a large demand is made at the beginning of January, be very seriously embarrassed. It must be borne in mind that at the present time the raising of money upon securities or anything of that sort is a very difficult matter, and very grave pecuniary embarrassment may be brought upon many well deserving people if the tax has to be paid in one lump sum.

My hon. and learned Friend has raised a matter of very great importance with which I wish to deal in the manner that such an important matter deserves; but I am a little embarrassed because he was not able to put his Amendment on the Paper, and consequently I have to do my best to gather its terms from my hon. Friend's description of his intention. I do not pause to criticise his proposal in point of form. It would certainly need to be looked at before such a proposal could be adopted in order to define more precisely the cases to which it was intended to apply. But I do not trouble about that at all. My hon. Friend's intention was explained by his speech, and I want to deal with the matter in a broad way. My hon. Friend did not refer to the fact that the collecting of Income Tax by instalments has been tried before. There is nothing new about it. Anybody who turns to Section 176, I think it is, of the Income Tax Act, 1842, will find that that enactment provided for the collection of Income Tax in four quarterly instalments, payable on the 20th June, the 20th September, the 20th December, and the 20th March. The Committee will observe that there was an attempt to divide the year into equal portions. My hon. Friend cannot make an equal division, because more than half of the fiscal year has already gone by. I will point out presently a great practical difficulty that would arise from his proposal. What was the experience of the revenue in relation to the provision of 1842? Income Tax was collected under that provision, or at any rate that was the law relating to its collection from 1842 to 1868. I alter my phrase and say that that was the law because, as a matter of fact, it was found even at that time that the attempt to collect by instalments went too far, and I believe that in practice people usually paid in two, and not four, instalments. That was altered by Parliament in 1868, and since that date, I believe, Income Tax has been due to be paid for the year at one specified time—at a date, be it noted, which is decidedly at the later end of the fiscal year.

The experience which immediately emerged as the result of the change was that collection was much more effective and rapid, and much less expensive. So that apart from the special necessities of the time, I do not think it can be doubted that it was a wise change for Parliament to make, and that, at any rate in ordinary times, it is well that Income Tax should be collected at one date, and not be spread by instalments over the year. My hon. Friend says "Yes, but we have here a special difficulty which calls for special treatment." I want to deal with that point quite sympathetically. It is quite true that the occasion is special in two ways, perhaps in more. It is special, because there is a substantial increase in the duty, and because there may be in some cases special difficulty in paying the tax. It is special in a third way, I think, because it is specially important that we should collect a substantial amount of money without frittering that money away unnecessarily in the process of collection. But it would not at all have the easy consequences which my hon. Friend supposes if we adopted his proposal. If you say that half the Income Tax becomes due on the 31st March, you will not collect more than the smallest fraction of the second instalment on that day. You will not get in this financial year at all the Income Tax which Parliament sets out to get. I do not know whether everybody's experience is the same as mine, but I confess quite freely—and I do not believe that I have been specially favoured by the authorities—that I do not find my self compelled, as one of the first good resolutions of the New Year, to draw my cheque for Income Tax. There are a good many people who do not, as a matter of fact, pay on the nail. Of course there has to be a certain reasonable amount of give-and-take in the matter.

I submit, therefore, that it is a mistake, as a matter of effective administration, to divide the tax in two. Moreover, the date suggested would have the result of postponing the payment of a very large sum of money, running into millions, until it was not part of the revenue of this year at all. Taxation is counted as the revenue of a particular year, not because of the date of the Act of Parliament under which it is charged, but according to the time when it is collected. My hon. Friend is quite right when he says that we must consider hard cases, such as that of a man who had every reason to expect that he would this year enjoy the ordinary income that he has enjoyed for years past, but who, owing to the special circumstances connected with the War, finds that his income this year has dropped substantially. It is obviously right that we should deal with these cases, and we have made a proposal which I hope the Committee will consider one well worth making and well worth adopting to deal with them. That proposal is contained in Clause 12. That will still leave cases where the income of the taxpayer for this year is, in fact, less than the income in respect of which he is assessed. Still, the modification is substantial, necessarily involving, as it does, a considerable loss to the revenue, and therefore a considerable concession to the taxpayer, and I am afraid that under the circumstances it is as far as we can go. As my hon. Friend will see, I have assumed that he was making his suggestion not as an improvement in Income Tax machinery in general, though that might have appeared to be the case from his speech, but as something called for in view of the special difficulties in which we now stand. I have not occupied a moment's time in criticising the form of the proposal. While desiring to be as generous and reasonable as we can, I suggest that the right way to meet the difficulty is by Clause 12, and not by making, side by side with Clause 12, a concession of quite another kind, reversing the method by which Income Tax has been collected for so long and undoubtedly postponing a large part of the revenue which in the circumstances we must raise.

The right hon. and learned Gentleman has not quite, I think, understood the object of the Amendment of the hon. and learned Gentleman opposite. That object, so far as I understand it, is this: Supposing a person whose income is £4,000 a year—the ordinary case quoted—has spent in a year £4,000, less the amount which he has reserved for the payment of the Income Tax in the ordinary way, and that Income Tax is increased by a considerable amount. I gather that the hon. and learned Gentleman thinks that it will be rather difficult for that person to find the extra money, because at this time it is not easy to borrow money on any kind of securities, or to find the money which he did not expect so suddenly to have to pay. It may be difficult for him to find the money.

That is precisely the point.

I think the right hon. and learned Gentleman adduced arguments against the proposal which related to something else. I believe that is sometimes done by hon. Gentlemen learned in the law.

I am sorry that the right hon. Gentleman the Attorney-General has not been able to meet the hon. and learned Gentleman behind him. What are the arguments of the Attorney-General? It really comes to this: He made an interesting speech telling us the history of Clause 176 of the Income Tax Act of 1842, which was the Section under which payments for particular periods were allowed. That Section was abolished in 1874. Up to that time—I may be corrected, but I think I am quite right—nobody had ever heard of an Income Tax anything like what is intended at the present time. My impression is that in 1874 even the sixpenny Income Tax was very much resented. About that time Mr. Gladstone declared that he would abolish even the sixpenny Income Tax. In 1874 the method of instalment may have been a very bad one. I think it is quite possible, with the growth of the country, that men should be able to pay a sixpenny Income Tax by one instalment. So that the history of the matter does not help us very much. No history can show us a parallel to the present time, and no difficulties occurred up to 1870 which were anything like the parallel of what we are likely to suffer in January, 1915. The right hon. and learned Gentleman does not criticise the form of the Amendment. If so, we need not bother for the moment as to whether or not we take 31st March or 1st March, because if there is no criticism of the form, we feel quite confident that the hon. and learned Gentleman the Member for Norwich will immediately agree to insert 1st March as the best he can get, instead of 31st March. If there is any difficulty in meeting the revenue or the Income Tax next year, we could modify these details quite well on Report. We could modify the whole Clause, and so could meet the difficulty of the Attorney-General. If you make a second instalment on 1st March you would probably have got rid of the difficulty. Modifications could be made in the actual proposals which ought to meet the real principle which underlies this very valuable Amendment.

I am going to put one more point. It is one which I put last night, but as the Attorney-General was not present in the House, he is not likely to have heard it. It bears very closely upon the suggestion that the Attorney-General makes that Clause 12 will really meet all that is required up to the present time. I asked last night: Will it? If I understand the principle of the Income Tax at all, you pay your Income Tax for the financial year which closes on 5th April. Look at what Clause 12 does. It does this: it brings forward Section 133, as modified by Section 6 of the Act of 1865, and enables the Income Tax payer to make use of it. What are the benefits and exemptions which they get under these two Clauses? They get the right to go to the Commissioners of Income Tax and to show that by reason of a bad year they should be entitled to have a modification of the assessment made upon them. A provision is made in Sections 133 and 134 that the repayment of the taxes they have already paid shall be made to them. Let us see what Clause 12 does. Clause 12—and we are grateful for it—enables a man after payment has been made in January which is an excessive payment, to have the advantage of going before the Income Tax Commissioners in April or May and getting repayment. The cases are likely to be so many that I do not suppose repayment will take place till June. The result, is that you will be taking advantage of Clause 12 to the full, and you will put the Income Tax payer in this position: he will have paid in January what he will have the right to get back in June. The Financial Secretary was probably right when he seemed to have some doubt as to whether it will be possible for the abatement to be made in the early months of the year, or in the early weeks of the year, because the Income Tax Commissioners may say, "Oh, we will take your current year up to 31st December." I doubt whether they have any such power, or legal right.

If they do that they may be flying in the face of Statutes. If they adhere to their present system, as laid down by Statute, I think it is quite clear that what will happen is immediate payment in January, and possible repayment in June. Then comes the suggestion—because, after all, the hon. and learned Member for Norwich makes it no more than as a suggestion of a principle—he suggests that there should be some sort of delay in the final complete payment in the early weeks of the year. If there was a delay in the payment if not of a half, even of a tenth or an eighth, to the later period, it would give the Commissioners some time, perhaps, in which to meet the case, and give the benefit of Clause 12. The position might then not be this: that the tax-payer will have paid and the Commissioners will repay; the position might more fairly then be this: the payment of a portion, the Commissioners holding their hand as to a smaller balance up to one-seventh or one-eighth, then seeing whether or not that account is adjusted, or whether there is anything more to pay. It seems to me that the hon. and learned Gentleman for Norwich has embodied in this Amendment a principle which is a very valuable principle, and one which might well be adapted in order really to make of use the principles which are laid down in Clause 12. Without something of this sort, we shall fail to obtain the full benefits offered in Clause 12. Therefore, while the Attorney-General says that Clause 12 ought to be a benefit, I beg to point out where it is not, and I also think that no reason whatever has been shown why in this very difficult year of heavy burdens we should not have some sort of remission in which perhaps the Income Tax payer and the Commissioners might meet on terms of greater equality, so that the Commissioners might not have the opportunity of taking what ultimately may prove not to be theirs, and be compelled to repay what they never ought to have taken.

It seems to me that the hon. and learned Gentleman the Member for Norwich, and the last speaker, are straining the point too far. The last speaker admits that if the Amendment were accepted it would have to be 1st March. Can anyone then really argue in favour of the extra expense of collecting the tax twice for the difference between a date when any Income Tax payer who can prove that it is a hardship to pay promptly will at all events get a month's grace from the Inland Revenue people? This would bring him to 31st January. Can it be seriously argued that we ought to ask the Government to go to expense in collecting a tax in two instalments for the sake of the dates between 31st January and 1st March? I do not really think that ought to be seriously pressed upon the House. I dare say it would be convenient if our system of taxation was so arranged that the Income Tax, now it is such a heavy burden, could be collected half-yearly. That is not the system, and that is not the Amendment. I think, under all the circumstances, it would be very unwise for hon. Members to press the Government to accept the Amendment.

May I point out what has not been mentioned, that this particular Amendment is simply a matter of relief for the man who is earning income—that is to say, the professional man, or one in similar case, because people who own property pay their Income Tax quarterly. Their Income Tax is deducted from the quarterly rents. People who have Government Stock pay their Income Tax quarterly, because it is deducted from the quarterly payments of incomes paid by the Bank of England. People with shares in railway and other companies as a rule pay the Income Tax half-yearly, seeing it is deducted from the half-yearly dividend payments. In the case, however, of the professional man who is making, say, £4,000 or £5,000 a year, he is called upon on 1st January to pay the whole of his Income Tax out of his own pocket, so to speak. Instead of it being deducted from him, he is called upon to find the money and pay it over in one lump sum on 1st January. There is therefore a particular hardship upon that class of person. I think that the principle suggested in the Amendment would do something—it would not do much—to put that class of person on something like an equitable footing with the rest of the people who con-contribute to Income Tax. For that reason I should be very glad personally to see something done in the direction of enabling that section of the community to pay their Income Tax in reasonable instalments. If I might make a suggestion to the hon. and learned Member who moved the Amendment, it would be that he should, on his part, make some concession to the Inland Revenue authorities that those people who desire to have the power to pay their Income Tax in two instalments should pay the earlier instalment at an earlier date than 1st January, and, if they do so, that they should have a corresponding right to postpone the second instalment for an equal period after 1st January—say, a month or two months on each side of that date.

Unfortunately there are already less than two months from 1st January.

The right hon. Gentleman understands that it is not a particular date that is of importance to the taxpayer. It is being called upon at one moment to pay the whole of a particular tax in one lump sum out of his own pocket. No other contributor of Income Tax does that. As I have pointed out, all these other classes find it spread over a period, and pay in a manner which they do not feel in the same way that the class feels on whose behalf this Amendment has been moved.

I sincerely trust that the Attorney-General will not accept this Amendment, particularly in the form in which it has been suggested by the hon. Member opposite (Mr. Pollock). He said that in this matter we have nothing to learn from history. I am quite sure that those who have read what took place in 1868—I quote from memory—will have discovered that every argument which is being used to get one payment in January and another later was pressed to the full against the instalment plan. When the change was brought about by Mr. Gladstone the amount which came to the revenue as the result of the one collection made an extraordinary difference in comparison with the four collections that previously were made. I am quite sure that if we accept this Amendment in any shape or form we shall be going back upon the benefit of the experience we have gained since 1868. The change Mr. Gladstone brought about was most beneficial.

Would the hon. Gentleman say what the Income Tax was then?

That does not affect the argument at all. I am talking of what would be the effect on the Treasury if it divided the collection into two instead of one, and I say all experience shows that the change brought about by Mr. Gladstone was most beneficial. The hon. Member for the West Derby Division of Liverpool referred to the case of big companies and railways, but the expenses there would be entirely different from what they would be calculated separately, and therefore if the Treasury had to look to every individual who does not happen to be a shareholder, they will find themselves in the position of having to employ a considerably larger staff. The hon. Baronet the Member for the City referred to an individual having £4,000 a year and who, when called upon to pay this tax, may find that he has spent more than his income. I think a man living so near the total amount of his income as that the payment of the tax would leave him on the wrong side is a very imprudent individual.

There are very many imprudent individuals in the country.

There may be many imprudent individuals in the country, but you do not legislate on behalf of imprudent individuals. I am quite sure if you make this departure you will simply have the experience you had before the change was brought about by Mr. Gladstone.

I do not deny that there are a great many difficulties, such as the hon. Member pointed out and such as the Attorney-General indicated, in levying Income Tax by instalments. In respect to the amount of this Income Tax I might point out to my hon. and learned Friend the Member for Leamington that there was once an Income Tax of 2s. I do not know how it was levied. I think the Attorney-General would add to the debt the Committee owes him if he explained how he conceives the provisions of this Act will work in respect of people whose incomes are derived from unsettled profits, and especially people whose income year goes up to the 31st of March. I heard of the case of a trader who says "I really do not know, if I am asked on the 1st of January, what my income will be, because I do not make up my books until the 31st March, and as I understand this current year is to be taken into account in the three years' average I cannot tell you what my income is until I have made up my books." That is all I want to make clear. I think it is a difficulty, and a great many people do not understand how the levy is to be made.

May I put a point to the same connection. The Attorney-General announced the other night that in levying Super-tax a new concession would be made. The illustration he gave was this. He took the case of a man with £6,000 a year, and he said if a man proved that his income for Super-tax in the year of charge was one-third less than the amount upon which he should he charged according to the period of average, he would be allowed to pay upon the diminished sum.

That comes on on an Amendment to the next Clause, standing in the name of the hon. Baronet the Member for the City.

I shall endeavour to deal with the point put by the Noble Lord, and, if I may say so, I understand the point put by the hon. and learned Gentleman who has just sat down. He referred to the Super-tax case by way of illustration. I answer the Noble Lord in this way: As I conceive it, the way it will work out is something like this—and what I am going to suggest would also have a bearing on the criticism of the hon. and learned Gentleman the Member for Leamington, because I do not agree that you will have what he suggests—that is to say, an unduly large sum paid on the 1st of January, followed some months later by a large rebate. I think what will happen will be this: Of course some incomes will not be affected by this difficulty at all, as the hon. Member for the West Derby Division of Liverpool pointed out. One of the difficulties of the Amendment of my hon. and learned Friend is that probably it would apply to everybody. His proposal is that if a man this year is making an income three times as big he shall nevertheless only pay half his tax on the 1st January. Take a case such as the Noble Lord mentioned, where this year a trader or a commercial man or a professional man is earning an income which fluctuates, and says to himself, "Here I am offered a concession so that I may bring my income of this year into the average for last year and the year before, in place of being assessed upon the average obtained by historical data. But what is the good of telling me that, because I do not know what my income this year will be until this year comes to an end?" If he makes up his books at the close of the 31st March his case is the most difficult of all. I imagine what will happen is that if you find a taxpayer of that sort who is having a thoroughly bad time, and he says to the Inland Revenue before the New Year "it is already plain to me that my income this year is going to be a good deal below the figure I am assessed at," I am sure his appeal will be successful.

I imagine what the Inland Revenue would say is this—and the same would apply to Super-tax, but I do not want to go into that now—they would say, "What is your estimate by 1st January, when three-quarters of the year is over?" He will offer some figure. If they think that is fair, the Inland Revenue will say, "Let us take that estimate, and we will average it with last year and the year before, and pay on the average of the three years. If it turns out by the 31st March that you have underestimated your last three months as compared with what you have actually received, there will be something more to pay. But if it turns out that your last three months were worse than you thought, then possibly you have paid too much." That, I think, the Noble Lord will see tempers the harshness, and the apparent difficulties of our proposals, and I am quite confident that is in practice the way the thing has got to be done. Everybody knows that the way in which the Inland Revenue proceeds is to ask for an estimate, and there is an adjustment if it is a little wrong. That is what I am informed is the intention of the Inland Revenue. We quite appreciate that there are many professional and commercial people who find themselves in such a position, and it would be most unreasonable not to meet a genuine case in a fair way. I hope that is the way it will be met. If this Amendment were adopted it would affect all people, even those whose incomes are bigger than usual, and it is not the way in any case to deal with special cases. It does not apply to extra Income Tax, and so far from a man who has to pay Income Tax on profits and accounts, being hard hit in comparison with a man who receives rents, I think the hon. Member for West Derby will see Income Tax on profits is favoured as compared with other Income Tax, three-fourths being always paid in arrear, but as to one-quarter it is paid in advance. If the suggestion I make, after communication with the authorities, is a fair suggestion, I hope my hon. and learned Friend may see his way, having raised this very important point, to withdraw this Amendment.

While one is very grateful to the Attorney-General for what he has said, the problem, I am afraid, still remains. Perhaps the Attorney-General will say where the Commissioners get the right to say that the year ends on 31st December, rather than the ordinary financial year. I may be wrong, but I always understood, for the purpose of Income Tax, you had to make the financial year the same as the Treasury. [HON. MEMBERS: "No, no!"] Is it done by custom, or by regulation or by Statute?

By Statute.

Then you can make your year end at any period you please.

Section 100 of the Income Tax of 1842 provides that in respect of Schedule D the assessment is to be the just average of three years, ending on such a date in the year immediately preceding the year of assessment on which accounts have usually been made up or the 5th April.

That explains what was in my mind. So it will not be a concession to the trader. They will have to work on the same system as heretofore. Otherwise there is considerable difficulty as between the trader and the Treasury. If the Treasury do not hold him to the same year, he may choose a year in which his receipts are very much worse. On the other hand, if he keeps to the usual period of the year, they will keep him to the normal average and not allow him a period of the year in which he should choose to make up his books. I think the Attorney-General in his answer has been too liberal, from the Treasury point of view, when he indicated that the Commissioners were to allow us to make up our books to a period of the year never before allowed.

I said nothing of the kind.

I understand from the Attorney-General that the question I have raised will be considered by the proper authorities, and therefore I ask leave to withdraw the Amendment.

In answering the point raised by the Noble Lord the Member for Oxford University (Lord Hugh Cecil) we were told that the case would be met of the difficulties with traders' books where they are made up in March by allowing that trader to assess the amount which he thought he would be likely to have as his income at the end of the year. Will the right hon. Gentleman give the Committee an assurance that instructions to that effect will be sent out by the Commissioners? The right hon. Gentleman was rather careful to say that he imagined it would be so. It would make it very much simpler if instructions were issued from the Treasury that this is to be the way in which the difficulty is to be met.

Personally, I do not think there is any doubt about this point, but some doubt has been expressed to me as to the way in which Income Tax is going to be taken on foreign bonds. I suppose it will be deducted at 1s. 8d.? It is deducted differently on English companies and Consols and foreign bonds.