House of Commons
Tuesday, October 26, 1915
Private Business
Dundee Corporation Order Confirmation Bill,
Read the third time, and passed.
Shops Act, 1912
Copies presented of Orders made by the councils of the undermentioned local authorities, and confirmed by the Secretary of State for the Home Department:—
City of Bradford;
Urban district of Fleetwood (two)
[by Act]; to lie upon the Table.
Land Registry
Return presented relative thereto [ordered 8th June; Mr. Rowlands ]; to lie upon the Table, and to be printed. [No. 374.]
Agriculture (Scotland)
Copy presented of Statement showing, for the year ended 31st March, 1915, the Financial Position in respect of each Land Scheme on Estates taken over by the Board of Agriculture for Scotland from the Congested Districts Board [by Command]; to lie upon the Table.
Food Production (England and Wales) (Departmental Committee)
Copy presented of Final Report of the Departmental Committee appointed by the Board of Agriculture and Fisheries to consider the Production of Food in England and Wales [by Command]; to lie upon the Table.
Board of Education
Copy presented of Statistics of Public Education in England and Wales. Educational Statistics, 1913–14 [by Command]; to lie upon the Table.
Copy presented of Statistics of Public Education in Wales (with Monmouthshire). Educational Statistics, 1913–14 [by Command]; to lie upon the Table.
Copy presented of Regulations for the Training of Teachers for Secondary Schools (in force from 1st August, 1915) [by Command]; to lie upon the Table.
Diseases of Animals Acts
Copy presented of Report of Proceedings by the Department of Agriculture and Technical Instruction for Ireland, under the Acts, for the year 1914 [by Command]; to lie upon the Table.
Destructive Insects and Pests Acts, 1877 and 1907
Copy presented of Order, numbered D.I.P. 265, declaring an area described in the Schedule thereto to be infected with Wart Disease and an infected area for the purposes of the Wart Disease of Potatoes (Infected Areas) Order of 1914 [by Act]; to lie upon the Table.
Sailors' and Soldiers' Dependants
Copy presented of Scheme for Allowances to Dependants of Deceased Sailors and Soldiers [by Command]; to lie upon the Table.
Colonial Reports (Annual)
Copies presented of Reports Nos. 865 (Cyprus, Report for 1914–15) and 866 (Swaziland, Report for 1914–15) [by Command]; to lie upon the Table.
Oral Answers to Questions
War
Naval and Military Services (Pensions and Grants)
asked the Secretary of State for Foreign Affairs whether any provision is made for the dependants at home of civil prisoners of war who are interned abroad; and, if so, what?
My right hon. Friend has asked me to answer this question. The dependants at home of British civil prisoners of war interned abroad are, if in distress, eligible for assistance from the National Relief Fund, and those who are in need of help are receiving such assistance.
Can the right hon. Gentleman say how many who have applied are actually in receipt of benefit?
It is obvious that I cannot answer that question unless I have notice.
Is it known that applications can be made?
I should say it is generally known that they can apply in their own local districts.
asked the Prime Minister whether he is aware that there is discontent regarding the allowances made to dependants of men who enlisted in the Army or Navy while they were in the third or fourth year of their apprenticeship to some trade and who, if they had not enlisted, would now in many cases be in receipt of wages three or four times greater in amount than the wages they received as apprentices, which determine the present scale of allowances; and whether, if so, the Government will consent to some modification of this scale which would tend to cancel the discontent?
This question was very fully considered by the Select Committee, and it is not proposed to depart from their conclusion in the matter. But I would remind the hon. Member that the new authority proposed to be set up will have power to deal with such cases.
Is my hon. Friend aware that the new authority to which he refers us has no money to deal with the matter?
asked whether the decision that retired established workmen who re-enter the Service for the period of the War shall not be paid their pensions during such service can be reconsidered; and, if not, whether, in the event of any such workman falling sick, he can be paid his pension during such sickness, in view of the fact that he will not be entitled to benefit under the National Insurance Act?
The answer to the first part of the question is in the negative. As my hon. Friend is aware, these men receive the hired rate of their class plus the war bonus. The suggestion made in the second part of the question will be carefully considered.
Cyprus (Offer to Greece)
asked the Secretary of State for Foreign Affairs, if he can give the House any information as to the conditional offer by the Government to cede the Island of Cyprus to the Kingdom of Greece?
Yes, Sir; His Majesty's Government felt bound, in the very critical position in which their Serbian Allies were placed, to make every possible effort to obtain for them the only assistance which was immediately available. Accordingly, they made it known that, if Greece would give full and immediate support to Serbia against Bulgaria, His Majesty's Government would be prepared to give Cyprus to Greece. As Greece has not seen her way to support Serbia, the condition on which the offer was made has not been fulfilled, and it has, therefore, lapsed.
Will the right hon. Gentleman inform the House as to the reasons for giving wide publicity to this offer before the Government had ascertained whether or not Greece was willing to accept it?
Perhaps the hon. Member will give me notice.
China (Shameen Territory)
asked the Secretary of State for Foreign Affairs, whether, subject to the nominal sovereignty of China, there is any and, if so, what limitation of the legislative and executive power of Great Britain in the Shameen territory leased from China at Canton; whether the lease imposes any conditions on the British Government or reserves any specific rights to the Government of China; if so, what is the provision which renders it illegal for the British Government to expel alien enemies from the Shameen territory in time of war; and if he will say by what convention or international instrument the rights of sovereignty and neutrality have been so defined as to preclude His Majesty from expelling alien enemies from a British concession?
The position at the Shameen seems to be as follows: China has granted a perpetual lease of the Shameen territory to the British Government in return for a certain cash rent reserved. China has not parted with the ultimate ownership and sovereignty of the territory. It is therefore still part of China. So long as tenants under us of enemy nationality comply with the conditions of their lease, we cannot turn them out by process of law. In these circumstances, for China to permit the British authorities to expel by force from the territory such German lessees would be to allow an encroachment upon or an invasion of Chinese sovereignty, and would constitute unneutral behaviour on the part of the Chinese Government, leading in the opinion of those best able to judge, to consequences which would certainly not be in the interests of this country; it would, I am advised, lead to considerable disturbance in China, the disadvantage of which would be out of all proportion to any profitable advantage.
Will the right hon. Gentleman answer the last part of the question?
I imagine that the answer to the last portion is that unless the rights of sovereignty have been actually transferred by some convention, they still remain vested in the authority which originally had them.
Will the right hon. Gentleman lay on the Table the representations made by British residents of Shameen and the correspondence between them and the Consul-General?
I will look into that.
Recruiting
Leitrim Agricultural Show
asked the Under-Secretary of State for War whether the War Office accepts responsibility for the conduct and language of Second Recruiting Lieutenant O'Donel, at a county Leitrim agricultural show, on the 21st September last, for his dancing in the public street with drunken woman of ill repute, who were fined at the following Petty Sessions for drunkenness, and for his conduct at Rosses Point; and, if military men do not now report scandalous conduct on the part of a recruiting officer, whether he will consult on the subject any of those responsible for the morals of the people of county Leitrim?
The hon. Member in a question he put to me on the 13th October made many allegations and imputations which, on inquiry, proved to be without foundation. The question he now puts regarding Lieutenant O'Donel contains similar allegations of, if possible, a still more intemperate and offensive character, and I do not consider any further report on the matter is required, especially in view of a communication I have received from one of the hon. Members for the county.
Does the War Office approve of conduct which the right hon. Gentleman does not deny?
I am informed, and I believe that Second Recruiting Lieutenant O'Donel behaved as an officer and a gentleman in very difficult circumstances.
Did he or did he not conduct himself on the 21st September as stated in the question?
No, Sir, he did not.
He did.
Questions
Prejudicial Speeches (Ireland)
asked the Undersecretary of State for War for what illegality, if any, a banishment order has been issued against Mr. Desmond Fitzgerald; and to what terms and restrictions he is subject at the present time?
After Mr. Desmond Fitzgerald has made public speeches showing sympathy with the enemy and advocating fighting against England he was directed to leave country Kerry, and forbidden to enter prohibited areas or defended ports in Ireland in January last. At the present time he is awaiting trial on charges of having recently made a speech prejudicial to recruiting and of having disobeyed the above-mentioned Order.
Why was he not prosecuted for the alleged speeches in the first instance?
It was thought quite sufficient to deport him from the place in which he could do any harm.
Instructions to Local Committees
asked whether, under the new system of recruiting under Lord Derby's scheme, instructions have been given to local committees to abstain from canvassing and from accepting as recruits, should they offer themselves for enlistment, those skilled agricultural hands who have been recently referred to by Lord Selborne as being exempt from military service and necessary for the carrying on of agriculture in this country?
All skilled agricultural workers, if enlisted, will be returned to their civil occupation provided they can be shown to belong to the classes considered essential to agriculture; but as the arrangements made provide for their non-acceptance, it is hoped that there will not be many such cases.
Will instructions to that effect be given to these various committees? At present they are not.
Yes.
Employers Refusing Permission to Enlist
asked the Under-Secretary of State for War whether he is aware that there are many men of military age who are debarred from enlisting owing to their employers refusing them permission to go and keep their places open for them after the War; and whether he can take any steps in the matter?
The Army Council have already asked a very large number of employers in various industries and commercial houses not only to allow, but to encourage, their employés to enlist, and have pointed out that one of the most effective means in encouraging men to enlist would be to undertake to keep their places open. I am not aware that anything can be done beyond making appeals to the employers, but I believe that employers have shown themselves willing to offer facilities in this direction.
Is the right hon. Gentleman aware that in many cases employers have refused and are refusing permission to men to go, and can the Government, either by legislation or otherwise under the Defence of the Realm Act, take any steps in regard to this matter?
That is a very large question which the right hon. Baronet has opened up. I can only say that we believe the appeals that have been made have had very great effect in the past, and I continue to hope that they will have a good effect in the future.
Selection of Officers
asked the Under-Secretary of State for War whether he will give consideration to the number of men of military age who, in civilian life, occupy responsible positions in the selection of officers for the New Army; and whether some regard can be given to the fact that in many instances, owing to the sacrifices that will be made, their homes will have to be broken up?
The primary consideration in appointing officers, must, of course, be capacity to command men under military conditions, but men such as my right hon. Friend has in mind would bring qualifications which would entitle their possessors to consideration as regards selection for a commission if and when they have become sufficiently trained in their military duties.
Executive Duties
asked whether, in the special efforts that are now being made through Lord Derby for recruiting, consideration has been given to the numbers of men of military age who, in civilian life, hold responsible positions and are accustomed to duties of an executive character; and, if so, whether it is intended to utilise these abilities in the interests of the country in any special way?
I think I can assure my right hon. Friend that there is every intention to make the best use possible of every man who joins His Majesty's Army.
Scottish Aeronautical Society
asked the Under-Secretary of State for War whether representations have been made by the Scottish Aeronautical Society to the Director of Military Aeronautics as to the desirability of establishing an aerodrome in the Clyde district in order to provide facilities for testing, experimenting with, and otherwise developing the manufacture of aircraft in that district, for which the district has excellent industrial facilities; and whether he proposes to take any steps in the matter?
Yes, Sir, the suggestion of the Scottish Aeronautical Society has been received. Although suitable sites for the establishment of an aerodrome in the Glasgow district have been inspected it has not yet been found necessary to establish this flying station, but should the necessity arise, the assistance of the Scottish Aeronautical Society will certainly be welcomed.
Armoured Shields
asked the Under-Secretary of State for War whether he has considered the advisability or otherwise of issuing any form of armoured shields or helmets to the British troops?
I stated on the 14th and 21st of October that helmets are already being supplied to the troops in large quantities in accordance with the recommendation of the Commander-in-Chief. Immediate action will be taken upon any recommendation Sir John French may make in regard to shields, of which various patterns have been sent to France for trial.
Leather Equipment
asked the Under-Secretary of State for War whether all contracts placed in Canada and the United States of America for military harness, saddlery, and leather equipments have now been completed and duly forwarded; and whether, in view of the fact that the leather trades in this country are now in a position to cope with all the requirements of his Department and of the importance of restricting imports from America, instructions have been given to stop the placing of further contracts for leather goods with American firms?
Deliveries under the contracts mentioned in the first part of the question are approaching completion. With regard to the second part of the question, the War Office is fully alive to the importance of placing its orders in this country whenever possible, and in so far as requirements can be met in the United Kingdom there is no intention of placing contracts abroad.
Commandeered Lunatic Asylums
asked the Undersecretary of State for War if he can say to what extent effect has been given to the intention of removing all commandeered asylums from the jurisdiction of the Lunacy Board during the War and placing them under the sole control of the War Office; and when this policy will be given full effect?
No asylums have been commandeered. All asylums or parts of asylums offered to the War Office have been freely offered by the authorities concerned, and have, on being accepted, come under the full control of the War Office.
asked the Undersecretary of State for War if he will say how many soldiers have been put in lunatic asylums in this country, and how many in annexes to lunatic asylums, since the beginning of the War?
The men who have been treated in the buildings referred to in the previous question have not been treated as certifiable cases, but as nerve-shock cases for which recovery is possible, and in many cases probable. It is undesirable to give figures which might be misleading, but I can assure the hon. Gentleman that the number of certifiable cases relatively to the size of the Army is very small.
asked the Undersecretary of State for War whether, having regard to the intention already expressed that no case of nerve strain is to be placed under asylum administration and to his statements of policy, indicating a desire to save soldiers from the opprobrium connected with treatment in lunatic asylums, he will arrange, with as little delay as possible, to have those soldiers stated to be uncertifiable removed from the block of the Middlesex County Asylum at Wandsworth, where they are under the same lunacy administration as the rest of the institution, being thus placed in a position in which no uncertifiable civilian could be placed legally?
The administration of the block in which soldiers are treated is under the full control of the War Office, who propose to continue to avail themselves of the excellent facilities for treatment which exist there.
asked the Undersecretary of State for War whether the present practice of placing uncertifiable soldiers in annexes to asylums will be discontinued and appropriate hospital treatment, apart from lunacy, provided in order to protect uncertifiable soldiers from the risk of the detriment which, as pointed out by the Murray Commission on disablement, is likely to result in respect of the men's industrial future?
Appropriate hospital treatment is now provided for the class of soldiers mentioned in the question. The arrangements now in force adequately safeguard the point of view which the hon. Member has in mind.
Army Food Supply (Putrid Sausages)
asked the Undersecretary of State for War whether he is aware that a contractor, named Jones, was fined at Warminster Police Court on Saturday, 16th October, for supplying 60 lbs. of putrid sausages to a military camp in that district; and what action he intends taking in the matter?
The facts are as stated by my hon. Friend. I am informed that the individual referred to is not a War Department contractor, but that local purchases of vegetables, etc., have been made from him by officers commanding units stationed in the neighbourhood of Warminster and Sutton Veny. He has now been prohibited from entering any military camp in the area.
Bombs and Hand Grenades
asked the Undersecretary of State for War whether all draft-producing units at Home are to be supplied with a certain number of the various types of bombs and hand grenades now in use at the front for instructional purposes; and, if so, whether he can state when these bombs and hand grenades will be supplied?
The hon. and gallant Gentleman's suggestion has been anticipated. Arrangements such as he suggests have already been made, and weekly issues are being made.
Sandbags
asked the Financial Secretary to the War Office whether his attention has been called to the fact that one private agency in this country alone received in the month of September over 100 appeals from various units in the Army for further supplies of sandbags, although his Department stated three months ago that the necessary number was sent out at the public expense; and whether he will either see that this statement is made good or that private enterprise is not discouraged in future?
Since the reply I gave in this House on this subject on the 16th September a senior officer of the War Office staff has visited all the advanced depots in France, and made special inquiries into the matter. He was informed that there has not been the slightest difficulty in meeting daily the demands for sandbags from the Divisions. There is a vast reserve of sandbags at the various bases, and if any unit requires a further supply the officer commanding should apply through the usual military channels.
Army Pay (French Exchange)
asked the Financial Secretary to the War Office whether he is aware that British soldiers serving in France are paid locally at the rate of 25 francs to 20s., and that this local pay, in the case of soldiers going on leave, is, by an Army Order of September, 1915, exchanged at the rate of 25 francs to 18s. 4d.; and whether he will take steps to devise a system of payment which would save soldiers this loss?
Pay is issued in France at a rate based on the average market rate of exchange for the previous month. French money brought to this country can be exchanged at the same rate, and, therefore, there is no loss to the soldier. The rate of 25 francs = 18s. 8d. is not in existence. The second part of the question, therefore, does not arise.
Billeting Rates
asked the Financial Secretary to the War Office what sum of money would approximately have been saved if the rates for billeting from the beginning of the War had been the same as are paid now?
In many instances reduced rates were paid by agreement last winter, instead of the full billeting rates. To prepare an estimate of the kind required by my hon. Friend would involve much labour which I am reluctant to throw upon an overworked Department.
Can the hon. Gentleman give me an approximate figure?
I do not think any figure that would not be sufficiently close to the scientific result would be of any great value.
asked what was the rate paid to contractors and others on behalf of His Majesty's Government for the maintenance of horses at the beginning of the War, and what is the rate now; and what sum would approximately have been saved if the lower figure had been paid throughout?
The rates paid have been fixed locally according to circumstances, within maximum rates laid down by the War Office. The maximum for imported horses while being conditioned was 25s. a week and remains unchanged, but the attention of local officers has recently been called to the fact that it is a maximum and that normally lower rates should be paid, and to the desirability as soon as a horse is fit for work of placing him out on terms of work for maintenance. The maximum of 35s. a week for horses undergoing veterinary treatment has been reduced to 24s. 6d. a week generally, with lower rates for large numbers. It is not possible to estimate the saving due to these steps.
Can the hon. Gentleman explain why the rate for horses undergoing veterinary treatment is 6d. below the other?
I was rather struck by that at first, but it appears that a sick horse eats a good deal less corn.
Finance (No. 3) Bill
Import Duties
asked the Chancellor of the Exchequer if he is aware that an American firm of motor manufacturers has, since the introduction of his Budget, acquired a site for the erection of a large motor manufactory in the Metropolitan area which will employ a number of workmen; and, seeing that he is dropping part of his proposals for raising revenue, will he consider the advisability of imposing Import Duties on other manufactured articles and so ensure abundance of work for our men when they return from the War?
I have no information that any American firm of car manufacturers have acquired such a site since the introduction of the Budget. The answer to the second part of the question is in the negative. It must not be assumed that I agree in the assumption of the hon. Member as to the effect of the duties referred to.
Would not the erection of such works be making a new demand for a class of work much needed in munition factories and for the kind of men we are now withdrawing from the active field in order to take part in munition work?
Yes, I entirely agree with my hon. Friend.
Income Tax
asked the Chancellor of the Exchequer whether the offices and employments excluded under Clause 35 of the Finance (No. 3) Bill include the case of a man who derives his income partly from a fixed salary and partly from commissions, or whether only the latter portion would be subject to Excess Profits Tax?
I would refer the hon. Member to the answer I gave on the 19th instant to the hon. Member for Hastings.
asked whether, in regard to Australians, visiting or residing in this country, taxes are levied on incomes or other property which have already been subject to taxes in Australia; and whether, in view of the disappearance of the argument on which this practice was based, any alteration will be made?
Persons residing in this country, either permanently or for a period of six months in any one year are liable to Income Tax upon their income from foreign or Colonial sources after deduction from that income of any tax borne in the country where it arises. I am not clear what arguments my hon. Friend refers to in the last part of the question.
asked the Chancellor of the Exchequer whether he can state the amount of the loss to the revenue if Income Tax were deducted from the pay of all officers and warrant officers in the Navy and Army at the rates and with the limit of exemption provided by the Finance Act of 1914, instead of at the rates and limit of exemption provided by the Finance Act of 1915 and the Finance (No. 3) Bill?
It is roughly estimated that the loss to the Exchequer would be about £625,000 for 1915–16, and £825,000 for 1916–17.
asked the Chancellor of the Exchequer whether no provision exists in the Income Tax Acts legalising the refund of payments of Income Tax on the amount of interest paid to bankers; if not, why forms have been distributed for years past by the Board of Inland Revenue to obtain a certificate from bankers of the amount of interest so paid in order that the refund may be made; whether, if a loan has run for the whole year, the Income Tax may be deducted as a concession, whereas if it has existed for a less period no refund will be made; and, if so, whether he will introduce a Clause in the present Budget to simplify and legalise the practices of the Board of Inland Revenue in this matter?
This matter was dealt with by Section 22 of the Finance Act, 1915, to which I would refer my right hon. Friend.
Messrs. Levensteins, Manchester
asked the Chancellor of the Exchequer whether his attention has been directed to the case of Messrs. Levensteins, of Manchester, who have made a profit of £80,343 on a capital of £90,000, which enables the company to pay 14½ years of preference dividend, to distribute 30 per cent. on the ordinary, to write £21,728 off for depreciation, to eliminate goodwill from the assets side of the balance-sheet, and also to wipe out the patent and library fund; if he can state whether the firm are Government contractors, and, if so, what kind of work they are doing for the Government; and if he intends taking any action in the matter?
The circumstances of the case referred to, in common with those of other cases, will receive due consideration in connection with the question of liability to any tax imposed by Parliament. I am informed that the firm have no contracts with Government Departments.
Is this not one of the very few firms that have been making dyes in competition with German dyes, and have so anticipated the manufacture of British dyes in this country, and is it not fair that they should have profits upon their capital?
The hon. Member's question seems to be of an argumentative character.
Excess Profits Tax
asked the Chancellor of the Exchequer whether in any accounting period commencing after the 30th June, 1915, businesses which have become controlled establishments will pass the Excess Profits Tax proposed in the Finance Bill?
As I stated in my Budget speech, the tax is at present limited to accounting periods ended prior to 1st July, 1915, and opportunity will arise before the introduction of the next Budget of judging the effect of the Munitions Act and making proper arrangements in this matter.
asked the Chancellor of the Exchequer whether provision will be made in the Finance (No. 3) Bill that where a company carries on branches of its business in various parts of the world through the agency of subsidiary companies, all registered here, the profits of all subsidiary companies will be aggregated for the purpose of the Excess Profits Tax and that the subsidiary companies shall not be treated as separate entities?
I notice that the hon. Member has put down an Amendment to the Finance Bill dealing with this question. I will consider whether within proper limits the principle of that Amendment can be accepted.
asked the Chancellor of the Exchequer whether it is intended to be provided by the Finance (No. 3) Bill that where a person, firm, or company earns an income by carrying on businesses of a like class in various towns or localities but has been hitherto assessed to and paid Income Tax in respect of each such business separately, the profits shown by such several assessments in pre-war years may be aggregated for the purpose of comparing the profits of the war year, and thereby ascertaining whether the income of such person, firm, or company, taken as a whole, is liable to pay Excess Profits Duty under the Bill?
The answer is in the affirmative.
asked whether the object of the Finance Bill is that all firms should arrive at their net profits in the usual way by deducting establishment and working expenses, and then deduct 50 per cent. less £100, before they allocate or distribute their profits to persons entitled to them, whether resident in the United Kingdom or not?
The object of the Clauses in the Finance Bill to which the hon. Member refers is to secure for the Exchequer 50 per cent. of the excess profit, calculated in the prescribed manner, which arises from any trade or business as defined in Clause 35.
Cinematograph Films
asked the Chancellor of the Exchequer whether an estimate has been made by the Customs authorities of the expenses that will be involved at the principal Customs Houses in providing bonded accommodation for cinema films, with the necessary facilities for importers to examine them and Customs experts to assess the duties; and whether he can say what the total annual estimated cost will amount to?
Bonded warehouses for dutiable goods are provided by the respective trades concerned, and it is impossibly at present to estimate the separate cost of the Customs staff that may be required in the special case of cinematograph films.
Can my right hon. Friend not say whether this allowance is made as a concession or as a legal right?
My right hon. Friend must not ask me to construe the Act, which will speak for itself.
Surveyors of Taxes
asked the Secretary to the Treasury (1) the additional number of surveyors and assistant surveyors of taxes that will require to be appointed in the event of the proposals in the Finance Bill becoming law, and from what sources it is proposed to obtain them; and (2) whether he is aware that a notice has recently been issued by the Board of Inland Revenue inviting applications from land valuation officials for posts as surveyors and assistant surveyors of taxes; whether he can state specifically what qualifications for these posts the aforesaid officials are supposed to possess; whether any similar invitation has been issued to clerks to surveyors of taxes?
Applications will be considered from members of public Departments, including the temporary valuation staff, in connection with possible vacancies in the tax surveying branch. All applications will be carefully scrutinised by a Selection Committee with a view to discovering the applicants possessing qualifications best suited to the particular work. There will be no bar to the selection of tax clerks who may satisfy this test of capacity. Until the form in which the Finance Bill is to become law is finally settled it would be premature to come to a decision as to the changes which may be requisite in the tax-surveying branch.
asked the Secretary to the Treasury what obstacles there are to prevent the placing on the establishment those clerks to surveyors of taxes who are now serving in His Majesty's Forces, seeing that many of them are exempt by service from the qualifying literary examination and that there is primâ facie, evidence as to their physical fitness; and whether, in view of the difficulties in the way of those clerks who are liable to the literary test undergoing the same, the Treasury will, in the exceptional circumstances, permit the examination to be dispensed with altogether?
I am investigating this matter, and will communicate with my hon. Friend.
Questions
Agriculture
asked the Parliamentary Secretary to the Board of Agriculture whether he is aware of the shortage of men who are skilled in the use of steam ploughs and other agricultural mechanical appliances; and can he say what steps are being taken to supply, as far as possible, these men, whose services are so much, required at the present time?
Yes, Sir. The President is aware that a number of steam ploughs are being worked at the present time without their usual complement of skilled men, but it appears that comparatively few machines are standing idle. It is not proposed to take any special steps to provide men for the present steam cultivating season which is drawing to a close, but the President hopes to be able to make arrangements through the County War Agricultural Committees to provide for any shortage of the necessary skilled men which may occur next spring.
asked when the bound volumes of pamphlets of the Board of Agriculture, Nos. 100 to 200 and 200 to 300, respectively, will be ready for circulation, in view of the fact that the Board of Agriculture have recently called attention to these volumes as being ready, but upon inquiry it has been found that they are not procurable at present.?
The bound volumes of leaflets to which the hon. Member refers are now with the printers, and it is hoped that they will be obtainable in a fortnight or three weeks' time. I much regret that a delay should have occurred. In the case of one volume, the existing stock became exhausted sooner than expected, owing to the exceptionally heavy demands during the last two months, and certain of the leaflets contained in the other volume took longer to complete than had been anticipated.
Sittings of the House
asked the Prime Minister whether, having regard to the congestion in the Questions list and to the need of passing important Bills through all stages in one Sitting, and even before they are circulated to Members, he will arrange for the House to sit at least four days a week?
asked the Prime Minister whether he has noticed that the proceedings in the Committee on the Finance Bill were not concluded till almost 1.30 a.m. on Wednesday last, and that the time between 11.45 and that hour were occupied in the consideration of an enactment reversing the practice of the Treasury and the Board of Customs with regard to all dutiable commodities; and whether, as Parliament is only sitting three days in the week, having regard to the many important novel provisions which the Bill contains and the desirability of the public being informed as to their nature before they are passed into law, he will arrange, if necessary, by more frequent Sittings, that the Committee shall adjourn at a reasonable hour during the consideration of this Bill?
My right hon. Friend is of opinion that in the present circumstances there is no occasion to add to the number of Sittings of the House.
Does the right hon. Gentleman realise that with three day Sittings the House was kept until one o'clock in the morning, when only forty Members were present, most of them in the Smoking Room, making Acts of Parliament?
Will he ask his right hon. Friend the Chancellor of the Exchequer to arrange that the proceedings on the Finance Bill, in which much interest is taken, should not be continued until a very late hour?
My right hon. Friend has no intention of continuing them to a very late hour.
Is the right hon. Gentleman aware that on Thursday night the Government, without notice, referred an Irish Bill to a Hybrid Committee and nobody knew that was the intention of the Government?
I am not in possession of the facts. I will make inquiries.
Government Policy
Prime Minister's Statement
asked the Prime Minister whether, with a view of stimulating recruiting, increasing public confidence in His Majesty's Government, and dispersing the doubts and fears which are finding increasing public expression, he will make a statement to Parliament as to the progress of the War on its several fields of action, on the present relation of Britain and her Allies, and on the duty which he conceives at this moment to be laid upon our people in regard to men, munitions, and money?
asked the Prime Minister whether he has observed the evidence that there is growing, both inside and outside this House, a desire to demand further information and explanations upon the military and diplomatic achievements and policy of the Government; and what opportunities will be given to discuss in this House the policy and conduct of the War?
asked the Prime Minister whether, in view of the fact that important statements on the military situation and the position of recruiting were recently made by him and the Secretary of State for War to a private conference on 28th September, he and the Secretary of State for War are now prepared to make similar statements to a private conference of Members of the House of Commons or to an open Session of Parliament?
asked (1) whether, in view of the possibility of Lord Derby's final effort to secure recruits by voluntary enlistment not proving successful, any steps are being taken by His Majesty's Government to work out the administrative and legislative details of a scheme of compulsory service; and (2) if the Government has settled upon any standard by which it means to decide whether Lord Derby's final effort to secure recruits by voluntary enlistment has by 30th November proved a success or otherwise?
asked, in reference to the new recruiting campaign, whether Lord Derby's statement at the Mansion House that this is the final effort on behalf of voluntary service represents the policy of the Government on this question?
The Prime Minister intends very shortly to make a full statement.
Can we have an indication as to the definite day? Is my right hon. Friend aware that it is four weeks to-day since the confidential information referred to in my question was given to a small group of Members? May we understand that when the statement is made the House will be put into possession of all the facts which were given to the hon. Member for Leicester (Mr. Ramsay Macdonald).
I cannot anticipate what my right hon. Friend will say, but I have no doubt at all that he will have my hon. Friend's question in mind when he comes to decide what statement he will make to the House.
Will there be an opportunity for discussion on the Prime Minister's statement?
That I am not in a position to answer.
Is the right hon. Gentleman aware that the Prime Minister was Hot present when the statement referred to was made?
Questions
German Goods (Confiscation)
asked whether the Government has, and, if not, whether it proposes to take, power to confiscate German goods, whether or not contraband?
His Majesty's Government have already power to seize and apply to the Prize Court for the condemnation of enemy property if on board British or Allied vessels, and similarly to seize and apply for the condemnation of property, whatever the ownership, on board neutral vessels if it is contraband, and the necessary destination can be proved. They have also power, under the Proclamation of 11th March, to seize enemy property, not being contraband, on board neutral vessels, and to apply to the Prize Court in order that such property may be dealt with in accordance with the provisions of that Proclamation. These powers are considered by His Majesty's Government to be the best suited for the effective prosecution of the War.
Does that reply mean that the, Government is at length going to put forward its full strength in respect of its sea power?
I am glad my hon. Friend has asked me that question. As far as I am aware the Government, ever since I have been a member of it, has put forward the whole of its strength, and exercised all its belligerent powers, in order to bring this War to a conclusion, and always will do so.
War Badges
asked the Secretary to the Board of Trade whether the Department have arrived at any decision with regard to the issue of war badges to officers and seamen in the merchant service employed on vessels not under Admiralty contract?
Since this matter was raised in this House, on the 29th September, I have given it further consideration, and have come to the conclusion that it is not possible to adopt the proposal.
asked the Minister of Munitions (1) whether he has received any applications from doctors who are attending military hospitals two or three days per week to give medical treatment to wounded soldiers for war badges for their chauffeurs; and, if so, whether he is prepared to comply with their request; and (2) whether any doctor or doctors who are devoting two or three days per week to the treatment of wounded soldiers in military hospitals, have applied to him to allow their chauffeurs to wear war badges; and, if so, whether he is prepared to comply with their request?
I understand that applications of the kind described have been received, but that it is not considered that in these cases the conditions governing the issue of war service badges are satisfied.
asked the Minister of Munitions whether he is aware that a letter was sent from his Department on 12th October to the London district secretary of the National Union of Gas-workers and General Labourers, stating that war badges could not be issued to unskilled workmen; and if he will state why unskilled labourers are treated differently to other classes of workmen?
I am aware that such a letter was sent to the union. As was explained in reply to a question by the hon Member for North-East Manchester on the 14th instant, badges are not given to unskilled workmen unless in any particular case the Ministry is of opinion that removal from their present employment is likely to prejudice the production, transport, or supply of munitions of war or the successful prosecution of the War.
Cotton Waste (Exportation)
asked the President of the Board of Trade if cotton waste can be exported from this country to destinations abroad since the Order in Council of 19th October?
No, Sir. The exportation of cotton waste of all descriptions still remains prohibited to all destinations.
Commandeering of Trawlers
asked the First Lord of the Admiralty whether, before commandeering further trawlers, he will take steps to ascertain whether the existing supply of fishing vessels is adequate to supply the needs of the people for cheap food?
My hon. Friend may rest assured that the considerations to which he refers are carefully borne in mind by the Admiralty; but, of course, war is war, and dislocation here and in other directions is inevitable. At the same time, I would venture to express the opinion that, so far as the country as a whole is concerned, any hardship or inconvenience arising out of the dislocation of the fishing industry is more than compensated by the invaluable work of another character which is being done for the community by these trawlers and their dauntless crews.
Admiralty Metal Purchases
asked the First Lord of the Admiralty if he can state the relations that have existed, or may exist, between the firm of Messrs. Henry R. Merton and Company, Limited, and the Admiralty; and whether that firm has been entrusted to negotiate on behalf of the Government for the purchase of supplies of material or commodities?
The company named are not and never have been metal brokers for the Admiralty. But since the outbreak of War, the Admiralty has purchased from the company 2 tons of aluminium notch bars, and, in addition, 8½ tons of lead were purchased from the Broken Hill Proprietary Company, Limited, for which Messrs. Merton acted as agents. In October, 1914, the company were also employed to secure a large consignment of copper which it was believed would ultimately find its way to the enemy. The copper was distributed for use in Government work, with the exception of a portion which was sold by the company. As regards the last part of the question, Mr. Gardner, a director of the company, has from time to time given his services to the Government, and has advised upon several matters connected with the metal trade, in which his expert knowledge has been found to be of considerable value in preventing the transit of consignments of contraband.
Land Valuation Department
asked the Secretary to the Treasury if it is intended to employ the officers in the Land Valuation Department who have received notice of dismissal in any other Department; if so, will all these officers be employed in such new duties; and will these officers be given the opportunity to take up other posts in the Government service before outsiders are taken on?
The Commissioners of Inland Revenue are prepared to receive applications from members of the valuation office for appointment to vacancies which may possibly arise in the tax-surveying branch, but I am unable to say how many vacancies will arise or how many of that staff may be found by the Selection Committee to be suitable for employment in this capacity. With regard to the last part of the question, the attention of such Government Departments as might be likely to require men with valuation qualifications has been called to the fact that the temporary valuation staff is being reduced as the work for which it was engaged is advancing towards completion.
Is Ireland also to be relieved by the reduction of its staff?
As quickly as possible as the staff is not required the services of its members are being dispensed with.
Musical-Roll Makers (Advertisement)
asked the Postmaster-General whether he is aware that an advertisement is being sent out by a firm of musical-roll makers through the Post Office, which is enclosed in envelopes imitating those of the Eastern Telegraph Company and with the words "wireless message" printed on them; that such packets have been delivered to ladies who have relatives fighting in the East and who may thereby be seriously alarmed and injured; whether the sending of such missives through the post is contrary to the rules of the Post Office; and, if so, will he take steps to stop it?
My right hon. Friend is advised that the issue and use of these envelopes is not technically illegal, because they do not resemble any Post Office envelope. But it is evident that their use is objectionable, especially at the present time; and he is in communication with the senders.
Newspaper Post
asked the Postmaster-General whether newspapers are now forbidden to pass through the post to persons in foreign neutral countries unless sent from the publishing offices; and, if so, how it is that postal officials have no knowledge of such a rule?
Such restrictions as exist at present on the transmission of newspapers to foreign countries are imposed not by the Post Office, but by the War Office. My right hon. Friend understands some of the details of the restrictions are not yet completely settled.
Can the hon. Member say why these restrictions are put into force before the public are made aware of them?
That is really a question for the War Office. The extent of the restrictions and the issue of notices by the postal staff to the public are under discussion with the War Office.
Can the hon. Gentleman give an answer to this simple question: If a newspaper is posted to a foreign neutral country, will it be delivered or will it not be delivered—that is what we want to know?
I must ask my hon. Friend to put that question to the War Office.
I have done so, and received no reply.
Defence of the Realm (Amendment) Act
asked the Secretary of State for the Home Department if, having regard to the action taken by the Crown against the proprietors of certain pamphlets seized by the police at the offices of the Independent Labour Party, St. Bride's House, Salisbury Square, E. C., he has called the attention of the Law Officers of the Crown to the assurance given by him concerning the object of the Defence of the Realm (Amendment) Act, which was to the effect that the Act in question would not be used to prosecute persons for expressions of opinion honestly held, as distinguished from wilful and dangerous misstatements of fact?
I am confident that the distinction which I pointed out in the Debate on the 2nd of March is fully borne in mind.
Is not the holding of these trials in secret a violation of the right hon. Gentleman's undertaking that they would not be held in secret unless the evidence was of a nature to disclose facts of military advantage to the enemy?
No; I am quite certain that there has been no such violation.
Baltic (British Submarines)
asked the First Lord of the Admiralty whether, in view of the published accounts of the activity of British submarines in the Baltic, especially against enemy mercantile shipping, he can make a statement showing the policy and achievements of our Navy in this area?
As previously stated, it is for the Russian Government to decide what can properly be made public as to the proceedings of the British submarines which are operating under their orders in the Baltic.
Merchant Ships (Chartering)
asked what is the percentage of increase in the price per ton of chartering merchant ships by His Majesty's Government now as compared with any recent date before the War?
It is difficult to make any useful comparison on the lines suggested in the question, since Admiralty chartering in peace time was naturally not extensive. In the case of troop transports, the percentage of increase in the price per ton, so far as comparable, of chartering merchant ships, may be taken as about 11 per cent. above the figure generally ruling at a date shortly before the War. In the case of colliers the rates, so far as comparable, are about 18 per cent. higher than in 1913. In the case of coilers the rates now being paid are actually 20 per cent. lower than in 1913. In connection with this question I may perhaps draw my hon. Friend's attention to the reply which I gave to the hon. Member for the Attercliffe Division, on 20th April last, of which I will send him a copy.
asked the First Lord of the Admiralty whether he is aware that allegations have been made of want of economical use of merchant shipping tonnage for transport in the War; and whether he is taking steps to deal with the situation?
I am aware that such allegations have been made, and the matter has engaged, and is engaging, our closest attention.
Lerwick (Explosion)
asked the First Lord of the Admiralty if he is aware that an explosion took place at the Admiralty store in Lerwick on the 12th April last, and that a good many people were injured and much damage done to the property of the Lerwick Harbour Trust and also to that of individuals, and that shortly after Government assessors came down to receive claims and assess the damage done, and that since then no satisfactory reply has been received; and will he give the matter his reasonable consideration, as even the fishermen whose nets were destroyed have received nothing?
The matter has been the subject of careful consideration. It has been decided, as an act of grace, to make a grant in respect of the damage caused by the explosion. The distribution of the Grant is now being dealt with by the Scottish Local Government Board on behalf of the Admiralty.
Enemy Steam Trawlers
asked the Secretary to the Admiralty if he will consider the advisability of utilising the enemy steam trawlers lately captured to increase the food supply of the country, or to use them for mine-sweeping and patrol services, and thereby liberating some of our own steam-fishing fleet which are now mine-sweeping, and which could then be returned to their owners for fishing as before?
I do not think that it would be in the public interest to specify the uses to which captured enemy vessels may be put.
Munitions
Limitation of Profits Rules, 1915
asked whether the attention of controlled owners has been called to Rule 17 of the Munitions (Limitation of Profits) Rules, 1915, now lying upon the Table of the House, which prohibits appeals against decisions of the Referee, however large may be the sums of money involved in those decisions?
A copy of the Munitions (Limitation of Profits) Rules has been sent to all owners of controlled establishments. As regards the provisions of Rule 17, I think the hon. Member may have overlooked the concluding words of paragraph 5 (3) of the Munitions Act, which expressly lay down that the decision of the Referee shall be conclusive for all purposes on the matter referred to him.
National Factories
asked what progress has been made with the national factories for manufacturing munitions?
My hon. Friend may rest assured that substantial progress is being made.
asked the result of the recent appeal to the Army to provide temporarily munition workers for factories, etc.?
The special arrangements for the release from the Colours of skilled men necessary for the production of munitions are still in progress and I am not in a position to make any statement as to the results. I should like, however, to take this opportunity of expressing my cordial appreciation of the valuable help given me by a number of highly qualified volunteers, including fifteen Members of this House, in securing the successful carrying out of the scheme.
Prosecutions
asked the Solicitor-General whether all persons engaged on war work in Government establishments are subject to the provisions of the Munitions Act; whether any cases have occurred in which he has declined to authorise the prosecution of persons who have left the Government service; and whether he will himself prosecute in such cases?
All persons engaged on war work in Government establishments are subject to the provisions of the Munitions Act. No case has occurred in which the Law Officers have declined to authorise a prosecution. Prosecutions for offences against the Act are conducted by the Ministry of Munitions and by the Director of Public Prosecutions. Whether a Law Officer would appear would depend upon the circumstances of the case.
Where Cabinet Ministers are engaged on war work in Government Departments, would anything happen if one of their number went on strike?
Prize Court Judgment (Steamship "Bilbster")
asked the Minister of Munitions if he will state the extent of the transactions which his Department have had with Messrs. Henry R. Merton and Company, Limited; and whether, in view of the recent judgment of the Prize Court, regarding a cargo of zinc concentrates per the steamship "Bilbster," it is intended that this Department shall have any further dealings with that firm?
Three purchases of metals have been effected through Messrs. Merton since the Ministry was formed and they have been invited on several occasions to tender with others for various metals, but have not recently secured any orders on their tenderings. I am in communication with other Depart- ments concerned in respect to future relations with the firm, having regard to the judgment referred to.
asked the Solicitor-General whether, in view of the judgment of the Prize Court in connection with the case of Messrs. Henry R. Merton and Company, Limited, regarding the cargo of the steamship "Bilbster," he will state whether it is proposed to take any action in the matter?
The Director of Public Prosecutions has decided, after consultation with myself, that it is not desirable to take further action in this matter. A second case in which Messrs. H. R. Merton and Company are concerned, and which raises many of the same facts as the "Bilbster," is now the subject of an appeal to the Prize Court. It would be inconvenient and improper to take any decision until the appeal is disposed of.
Questions
House Rents
asked the Minister of Munitions whether it is intended to introduce an emergency measure to protect short-period and tenement tenants from arbitrary rent raising and capricious eviction; whether he is aware that complaints have arisen in many places in Ireland; and whether such Bill will include Ireland as well as Great Britain?
My right hon. Friend has asked me to reply to this question. The matter is receiving the earnest attention of His Majesty's Government. The Irish authorities will be consulted in reference to any legislative measures that may be proposed.
asked the President of the Local Government Board whether he can state the results of his investigation into the attempts now being made on a large scale to raise rents in poor districts; whether he proposes to introduce legislation to stop the practice; and whether, in view of the effect which it produces both on labour and on recruiting, he will, so far as possible, expedite the introduction of whatever remedial measures he is intending to take?
I cannot at present say more than that the matter is engaging the careful attention of my right hon. Friend.
Is there a chance of getting some statement very soon, as to what steps the Government intend to take?
Will it be applied to provincial towns as well as the London area?
Will the right hon. Gentleman, in framing legislation of this kind, take into consideration the higher charges which have been imposed on the owners of these houses in the way of increased rate of interest, increased cost of repairs, and increased rates and taxes?
Every aspect of this question will be very carefully considered.
Will the President of the Local Government Board also consider the advisability of dealing with the landlords in parishes where rates have gone down?
At once.
An HON. MEMBER: Where?
South West Ham, for one.
Canadian Trade Unionist
asked the Minister of Munitions whether a trade unionist from Canada, himself a trade unionist, but belonging to a different union, was compelled to abandon his work in a Scottish workshop because he refused to join the trade union of the men in that shop?
I will have inquiry made if my hon. Friend will supply me with particulars which will enable me to identify the workman concerned.
National Insurance Act
asked the Comptroller of the Household, as representing the National Health Insurance Commissioners, what steps, if any, are being taken to reduce the cost to the State of the National Insurance Act?
I am giving close attention to the point raised by the hon. Member, and a number of administrative changes, which it is hoped will result in substantial savings, have been carried out in the Department since the outbreak of War. Proposals for further economies, the majority of which could only be effected by legislation, have been submitted to the Committee on Public Retrenchment, and are under their consideration.
Is legislation, to which the hon. Gentleman has referred, contemplated?
I can make no statement about that.
Does that involve any alteration in the Scottish Commission?
I can make no statement about proposals which have been submitted to the Committee on Public Retrenchment.
Press Censorship
asked the Home Secretary the number of persons employed in the Department of the Censor, with particulars as to the minimum and maximum salaries paid, and an estimate of the total expenditure incurred by the Censor's Department during the last twelve months?
I presume that by the Department of the Censor my hon. Friend means the Official Press Bureau. The number of persons employed there on shifts during the night and day is 122, of whom two are directors, two assistant directors and secretary, forty censors (of whom the War Office appoints twenty-five and the Admiralty eight), sixteen clerks, eight typists, twenty-nine messengers, and twenty-five Post Office servants. This number (122) is exclusive of charwomen, liftmen, etc., who are employed jointly by the Bureau and the Royal United Service Institution. The minimum pay is that of the boy messengers (11s. a week), and the maximum pay is that of the directors (£1,000 per annum). The expenditure incurred, borne by the Home Office, for the twelve months ending 30th September, 1915, was £4,547. This does not include the salaries of the censors, who are employed at the Press Bureau by the War Office or the Admiralty, nor the pay of some officials belonging to the Post Office or other Departments.
asked whether, amongst the employés of the Censor's Department, there are any men of military age and otherwise available for military service; and, if so, how many?
Of the employés at the Official Press Bureau, who are employed by the Home Office, it is believed that about seventeen are of military age, but of these it is probable that some would not be deemed fit for military service. With regard to employés at the Official Press Bureau who are engaged by other Departments, I am unable to give the information asked for.
May I ask whether those who are of military age and fit for military service would not be better employed at the front than in hoodwinking the British public?
If the hon. Gentleman has any particular case in mind I should be very glad to have it brought to my notice.
asked whether the lowest salary paid to any employé engaged in clerical work in the Censor's Department is £3 3s. a week; whether the salary is paid when the employé is on leave; and whether the private correspondence of any employés of the Censor's Department is liable to be intercepted and examined?
The lowest salary paid for clerical work in the Press Bureau is 16s. a week. The Home Office rules as regards leave and leave pay apply in the Press Bureau. The private correspondence of employés in the Press Bureau is not interfered with by the Bureau, but it is liable, like any other correspondence, to be dealt with by the Postal Censorship.
War Trades Department
asked the Home Secretary how many naturalised enemy aliens are employed, both permanently and temporarily, in the War Trades Department and other Government Departments?
I cannot answer this question. I think the hon. Member could best obtain the information he seeks if he addressed a separate question to the representative in the House of each Department concerned.
Would the right hon. Gentleman explain why, as regards the War Trades Department, they should take five months for a merchant to get an export licence?
Questions concerning the War Trades Department ought to be addressed to the Under-Secretary of State for Foreign Affairs. The hon. Gentleman has put down on the Paper a portmanteau of questions which concern a large number of different offices.
Metropolitan Police
asked the Home Secretary whether within the Metropolitan Police district, additional constables in the police reserve are being re-engaged to supply the vacancies created by enlistments in His Majesty's Forces; and, if so, whether such persons are being paid the sum of 50s. per week in addition to their pensions; and, if this should be so, will he take steps, in view of the need for national economy, to inquire into the whole matter for the purpose of ascertaining whether better arrangements can be made and suspend any further employment being given on the terms now mentioned?
It is necessary that in times of emergency the police authority shall be able to secure the assistance of police pensioners of good reputation and good health. Such men often have to give-up other employment, and also to live away from home. The scale of 50s. a week, which was fixed some years ago for pensioners of all ranks recalled to duty, is nearly equivalent in value to the maximum pay of a contable plus pension rights. It may be necessary, if further requisitions are made by the naval and military authorities for further police protection, for the commissioner to take on-more pensioners, as he is not recruiting.
asked the Home Secretary whether he is aware that stoppages are being made for superannuation purposes from the pay of police officers in the Metropolitan area who through length of service are entitled to, and have given notice of, their desire to retire on pension, but whose services are retained under the Police (Emergency Provisions) Act, 1915; whether he is aware that these stoppages are considered by the men to be unfair, owing to the fact that such payment does not qualify them for any increase in their pension and whether he will give instructions for these deductions to cease forthwith?
The Police Act, 1890, Section 15 (1), provides that the police authority of every police force shall deduct from the pay of every constable in the force sums at a rate not exceeding 2½ per cent. per annum on his pay as a contribution to the pension fund. In the case of those officers of the Metropolitan Police Force who gave notice of their desire to retire on pension and who, having completed twenty-six years' approved service, had earned the maximum pension permitted by the Police Act, I have given directions that the deduction should be the merely nominal sum of 1s. per annum. From the pay of officers who when they gave notice of their desire to retire on pension had completed only twenty-five years' service, and had not therefore earned the maximum pension, rateable deductions at the ordinary rate are properly deducted until the twenty-sixth year of service is completed.
Will the officers who pay the further year's contribution become entitled to the higher pension?
I am afraid I shall have to ask for notice of that.
Aircraft Raids
asked the Home Secretary whether he is aware that during the recent Zeppelin raids guidance was afforded to the enemy in outlying districts by motor cars exhibiting excessively bright lights or flashing signals to the enemy aircraft; and whether, in order to prevent, or at least limit, this mischief in the future, he will prohibit all motor cars travelling later than an hour after sunset, either generally or on specified main approach roads, unless the driver be furnished with a special permit so framed as to prevent transfer and containing the signature of the persons to whom they are issued, and to provide for the examination of these permits at regular intervals?
I am not aware of any case of the kind referred to in the first part of the question, or any circumstances to justify at present the very onerous restrictions suggested in the second part.
asked the Prime Minister whether he is aware that official statements in reference to the recent Zeppelin raid were issued both by the Home Office and the War Office, and that the Home Office announced that an additional statement would be forthcoming from the Admiralty; and, having regard to these circumstances, can he say definitely what Department of Government is responsible for the aerial defence of London and the country?
asked which Department of State is now responsible for the anti-aircraft defences of London?
The Admiralty are responsible for the defence against aircraft both of London and most parts of the country. There are, however, certain places—for example, fortified ports—for the defence of which the responsibility rests with the Army. I need hardly add that this division of responsibility does not imply that the Navy and Army do not endeavour by whole-hearted co-operation each to assist each other in their respective tasks.
Would it be convenient for the Admiralty to issue a statement, in the case of another raid, instead of other offices?
The Admiralty are quite ready to state what has occurred, so far as the public interest permits, upon the day of the raid, but all subsequent statements should be made by some other office directly connected with the facts. For instance, the public are naturally anxious to know the number of casualties, and the Admiralty have no information of that, except what we get from the Home Office. Therefore I think it would be better for the Home Office to make the statement.
May I ask whether the order for the aeroplanes to go up in the event of an air raid is issued by the Admiralty or the War Office?
It depends whether the order is given to a member of the Army Flying Corps or the Naval Flying Corps. The Army Flying Corps gets its orders from the War Office. The flyers in the Naval Flying Corps get their orders from the Admiralty.
Then it is correct to say that the Admiralty are not entirely responsible for the defence against Zeppelin raids, and the Army does come in with regard to sending up aircraft?
The Army co-operates so far as its means permit in the common defence of the country, but the primary responsibility for the defence of London, under an arrangement come to here last September, does rest with the Admiralty.
Has there been any increase in the number of armed aeroplanes since the last raid?
No attempt has been made to increase aeroplanes in consequence of the last raid, but there has been a steady and rapid increase in the number of aeroplanes, and that increase is going on quite irrespective of the particular defence of London or any other part of the United Kingdom, and it is part of the general policy of the Government.
Are we making any Zeppelins?
That is getting rather far from the question on the Paper.
asked the Secretary of State for the Home Department whether, in connection with the recent Zeppelin raids, anyone was arrested on suspicion of having signalled to the enemy?
I am informed by the military authorities that two men were arrested, one of whom has since been released. The case of the other is still under consideration, but I understand that no charge of signalling is being made against him.
National Registration
asked the President of the Local Government Board if he will lay before the House the result of the examination and tabulating of the returns collected under the National Registration Act?
It would not be in the public interest to publish, at the present time, the results of the tabulation of the returns under the National Registration Act.
Royal Irish Constabulary
asked the Chief Secretary for Ireland, in view of the number and expense of the police force in Ireland in proportion to the population and to the amount of real crime there, and the fact that most of the police are engaged on political rather than police services, will he say what number of officers and of men, respectively, have left that force for the Army since 1st August, 1914, what number have joined the force in that time, and why cadets are still being received for that force when wanted for the Army?
Twenty officers and 416 men have left the Royal Irish Constabulary for the Army since the 1st August, 1914, and ninety-four additional men will leave within the next few days. Five hundred and fifty-one recruits joined the force between the same date and the 10th April last, when recruiting was closed. The admission of cadets into the force has been suspended.
Edward Moraghan (Sentence at Mullingar)
asked the Chief Secretary whether Edward Moraghan, sentenced to imprisonment at Mullingar for refusing to enlist, is still in prison; and whether the unanimous appeals of the Mullingar district council and of the Mullingar town commissioners for the immediate release of Moraghan will be acceded to?
As the hon. Member is well aware, Edward Moraghan was not sentenced to prison by the Mullingar magistrates for refusing to enlist. I am not in a position to say what action the Lord Lieutenant will take on any appeals that may have been made for the exercise of the prerogative of mercy on behalf of this man.
Russo-Japanese Entente
asked the Secretary of State for Foreign Affairs whether he has received from the representative of any Power any communication on the subject of the proposed Russo-Japanese entente; and, if so, whether he can state the nature of the communication?
I must refer the hon. Member to the answer given to the hon. Member for the Tower Hamlets, Poplar, on the 20th instant.
Home Service Force
asked how many Home-service soldiers we have, and what is their cost to the country?
It is not clear whether the hon. Gentleman desires to know the number of soldiers serving at home or the number of those who can be used for service at home only. In either case, it is, I am afraid, impossible to give the information for which he asks, and as regards the cost, no estimate, still less any precise figure, is available under either hypothesis.
Second-Lieutenants and Captains (Regular Army)
asked the Under-Secretary of State for War whether he is aware that there are now many second-lieutenants in the Regular Army at the front with longer training and service than many captains in the New Army; and whether such captains would take command of mixed companies in a battle over the heads of such second-lieutenants who are in reality senior in service and experience?
I take it the hon. Gentleman is referring to units which belong to the same regiment. I have explained on previous occasions the reasons why promotions cannot be made from one general list when some of the units are serving at home and some abroad. Obviously this would involve continual transfers of officers from home to abroad, and from abroad to home, and would be a source of continual disturbance to the units at the front. If, however, a captain were transferred from a New Army unit to a Regular unit he would assume position in accordance with his rank under the general rule, but it would be open to the commanding officer to represent any case in which a captain was, in his opinion, unfitted for specific command.
National Insurance Act
Representation of Approved Societies
asked the Prime Minister if a communication has been received from the National Conference of Friendly Societies with regard to the vacancy on the English Health Insurance Commission caused by the death of Mr. Lister Stead; whether he has received a further letter on 18th October referring to this vacancy, and also that caused by the resignation of Mr. Thomas Neill from a group of leading approved societies, including the industrial insurance societies as well as the national conference; and whether the Treasury considers itself bound by the promises as to representation on the Commission made in 1911 by the present Minister of Munitions?
The answer to the first part of the question is in the affirmative. As regards the second part, my hon. Friend is no doubt aware that the original appointments to the Commission were expressly made for a limited period, and I am not aware of having given any promises which could be interpreted as guaranteeing that the vacancies as they occurred would be filled up.
In view of the fact that the approved societies have now lost their spokesman, may they make representations to the Treasury direct? There are some very important matters requiring attention.
My right hon. Friend's answer on that is in the affirmative.
Questions
Law Officers' Fees and Salaries
asked the Prime Minister whether, in making new appointments of Law Officers in consequence of the resignation of the late Attorney-General, he will abolish the system of payment partly by fees and partly by salary?
My right hon. Friend will consider the suggestion.
Midwives Bill (Scotland)
asked whether the Government propose to introduce a Mid-wives Bill for Scotland at an early date?
I am not without hope that this may be arranged.
Depredations of Rabbits
asked the Parliamentary Secretary to the Board of Agriculture whether he has any figures which give the approximate loss, stated in millions of pounds sterling, to the nation's food supplies which is caused by the depredations of rabbits; whether he can give any estimate of the cost of the various preventive measures taken to protect the crops against these animals; and whether he will state what, if any, steps are being taken to prevent these devastations and waste?
I am afraid that no estimate can be given of the loss caused by the depredations of rabbits or of the cost incurred in attempting to prevent them. The attention of the War Agricultural Committees is being directed to the importance of keeping down vermin of all descriptions, including rabbits.
Will my hon. Friend recommend the abolition of the Game Laws?
I think it would be a good thing if the provisions of some of the Game Laws were relaxed in favour of tenants who would do their best to exterminate rabbits, and not regard them from the point of view of the interests of sport.
Foot-and-Mouth Disease
asked the Parliamentary Secretary to the Board of Agriculture whether an outbreak of foot-and-mouth distemper has occurred in Great Britain; and, if so, whether he can state particulars and what arrangements have been made to prevent its spreading?
Yes, Sir; as I announced on Thursday last, an outbreak of foot-and-mouth disease has, I regret to say, occurred. The following is the information available up to 11.30 a.m. to-day:
The first intimation that foot-and-mouth disease was suspected to exist in the north-eastern corner of Somerset was received by the Board on the 20th inst., although there is reason now to believe that it had, in fact, been in existence since the beginning of the month.
Up to the present, disease has been detected on thirteen holdings or premises all of which lie in an area about 4 miles in length and 1½ miles in breadth, stretching in a south-easterly direction from the city of Bath to the neighbourhood of Winsley, Wilts.
A connection is traceable between all the outbreaks in the Bath district, which must have had a common origin, but the latter cannot at present be suggested.
The arrangements for dealing with these outbreaks follow the normal procedure, which I think is well known to the hon. Member. In the present case, how- ever, the local circumstances hinder the rapid carrying out of the slaughter of the animals involved. I will make further statements to the House as definite information becomes available.
Merchant Vessels (Signalling Apparatus)
asked the President of the Board of Trade whether he can state the terms of the representations made by the Board of Trade to the different shipowners' associations on the subject of the carrying on all British merchant vessels of efficient apparatus for signalling both by night and day?
I am sending the hon. Member a copy of the communication on the subject which was addressed to the associations.
asked the First Lord of the Admiralty whether, in view of the importance attached to the correct reading of Morse and other signals by merchant vessels and answering such signals when made by vessels of His Majesty's Navy, the Admiralty have been able to insist upon all merchant vessels employed by them carrying efficient signalling apparatus for use both by night and day?
Yes, Sir.
Canadian Wreck Commissioners' Judgment
asked the President of the Board of Trade if his attention has been drawn to the judgment of the Canadian Wreck Commissioners Court in the inquiry into the collision between the "Bengore Head" and the steamer "Batiscan," whereby the certificate of the master of the latter steamer has been cancelled for a period of two years, and the issue of a certificate as chief mate deferred for a period of twelve months subsequent to the inquiry, notwithstanding the fact that there was neither loss of life nor vessels; and will he cause an investigation to be made in this case?
My attention has been called to the judgment in question, and the matter is receiving very careful consideration.
Irish Police Force
asked the Chief Secretary the amount of reduction to be effected in the cost of the Irish police force in the current year in pursuance of the policy of retrenchment?
Considerable savings will be effected in the cast of the Irish police force in the current year in pursuance of the policy of retrenchment, but it is not possible at the present time to forecast the amount.
Will the right hon. Gentleman apply the savings to keep open the Ulster Canal?
Does the right hon. Gentleman's answer also take into consideration the reduction of the number of the Metropolitan Police?
No, Sir.
Why not, Sir?
Poor Relief (Ireland)
asked the Chief Secretary whether he is now in a position to state the entire amount spent on poor relief in Ireland in the financial years 1908–9 and 1914–15, respectively, and the difference between those two years' amounts, in order to show the amount of relief derived by ratepapers in Ireland from the Old Age Pensions Act and the National Insurance Act?
It will, I regret, be some time yet before I can add to the answer I gave to the hon. Member on 22nd June last.
Illicit Distillation (Kaira, India)
asked the Secretary of State for India whether the Government of Bombay have approved the raising the number of liquor shops in the Kaira district from fifty-five to eighty, on the ground that illicit distillation prevails in some parts of that area; and, if so, whether there is no alternative method of suppressing illicit practices without increasing the general facilities for obtaining drink; and whether the opinion of the Excise advisory committees in the Kaira district was ascertained before it was decided to open twenty-five additional shops?
The answer to the first question is in the affirmative. As regards the second question, the increase in the number of shops has been accompanied by several other measures for the prevention and detection of illicit distillation. Even with this addition to the number of licensed shops facilities for obtaining licit liquor in the Kaira district are less than in neighbouring districts. As regards the third question, Excise advisory committees have apparently not been constituted in the district.
Ulster Canal Bill
Can the Patronage Secretary state, for the convenience of the House, if it is intended to proceed with the public Bill connected with the Ulster Canal, and send it to a Hybrid Committee; and, if so, what date is it proposed to take this extraordinary step and to nominate the Committee?
I understand that there is a misunderstanding with regard to that matter, and it is proposed to discharge the Order in order to put it exactly in the same position as it was before.
I beg to thank the right hon. Gentleman.
Orders of the Day
FINANCE (No. 3) BILL
Considered in Committee—[Progress 20th October, 1915.]
[Mr. WHITLEY in the Chair.]
CLAUSE 15, ( Increase of Penalty for False Declarations, etc. ) ordered to stand part of the Bill.
CLAUSE 16.—(Rate of Reduction of Licence Duty where Sale of Liquor is Curtailed.)
The amount of the repayment to be made to the holder of a retailer's on-licence in cases to which Sub-section (1) of Section nine of the Finance Act, 1914 (Session 2) (which provides for a reduction of licence duty where the sale of liquor is curtailed) as extended by Section six of the Finance Act, 1915, applies, shall in all cases be one-fourth part of the whole duty payable by the licence holder in respect of his licence:
Provided that when the suspension in respect of which the repayment is made ceases owing to the expiration of the Act under which the suspension has been imposed, or owing to the cessation of the war, during the currency of the year for which the licence is in force, the repayment to be made for the year shall be such proportion of one-fourth of the whole duty as the expired part of the year bears to the whole year.
(2) The holder of a retailer's on-licence in Scotland shall not be entitled to the rebate of two-fifteenths of his licence duty under Sub-section (2) of Section nine of the Finance Act, 1914 (Session 2), as well as to the repayment of one-fourth part of his licence duty under this Section; but nothing shall prevent the allowance of the rebate of two-fifteenths of his duty, after any repayment under this Section ceases owing to the discontinuance of the suspension of hours in respect of which that repayment is given
I beg to move, at the end of Sub-section (1), to insert the following new Sub-section:—
"(2) Where in any year the hours of sale of intoxicating liquor have been restricted in any area by an order made by the Central Control Board (Liquor Traffic) by virtue of regulations made in pursuance of the Defence of the Realm (Amendment) (No. 3) Act, 1915, the holder of a retailer's off-licence for premises within the area shall be entitled to the same repayment in respect of his Licence Duty as that to which the holder of a retailer's on-licence is entitled under Section nine of the Finance Act, 1914 (Session 2), as amended by this Section."
This Amendment is intended to do a little justice to off-licence holders. Since the Act of 1909 off-licence holders have had to pay a very great more than on-licence holders, because on-licence holders have had certain deductions allowed under under various Acts. I have, therefore, put down this Amendment in order that certain deductions should be made in the case of off-licence holders. The Finance Act of 1909, introduced a Clause increasing the quantity below which an on-licence might not sell. He was not allowed to sell anything less than a quart, whereas previously he had sold smaller quantities. Off-licence holders, particularly country grocers, seldom sell so large a quantity as a quart. I do not consider it fair, and I do not think any man would consider it fair, that whilst this limit should have been raised to prevent them doing any trade the duty should have been more than trebled. The Control Board in certain areas, and particularly country areas, has raised the quantity which an off-licence holder may sell from a gill, half a pint, or a pint, to a quart, and that means practically that the whole of the trade will disappear. In these circumstances, it is only fair that a certain amount of the Licence Duty should be returned to them, and that is all I ask under this Amendment.
I am very happy indeed to assure my hon. Friend and the hon. Baronet opposite (Sir G. Younger) that we feel ourselves justified in accepting this Amendment.
Question, "That those words be there inserted," put, and agreed to.
Clause, as amended, ordered to stand part of the Bill.
CLAUSE 17.—(Repeal of s. 2 of 2 and 3 Geo. 5, c. 8.)
Section two of the Finance Act, 1912 (which relates to the distribution of payments on account of liquor licence duties in certain cases), shall cease to have effect and is hereby repealed, without prejudice to the validity of any payments made in pursuance of that Section before the passing of this Act.
I beg to move to leave out the Clause.
I move the deletion of this Clause in order to insert another Clause standing in my name later on the Paper ("Amendment of Section 2 of the Finance Act, 1912"), so as to get rid of the undoubted hardships which have arisen through the operation of Section 2 of the finance Act, 1912. The Chancellor of the Exchequer, I think, will agree with his predecessor that Section 2 of the Act of 1912 did nothing more than carry out the principle of the Budget with respect to the new Licence Duty imposed in 1909–1910. Very great hardships have arisen through the construction of the Section, and, although some of those hardships have been removed by decisions of the Law Courts, substantial injustices or hardships still remain to be dealt with. I think I may claim that the new Clause which I have put down on the Paper to a very large extent, if not entirely, gets rid of most of those hardships. At any rate, the Chancellor of the Exchequer, my hon. Friend beside me (Sir F. Banbury), and the hon. Member for Leamington (Mr. Pollock) will admit that, although it does not go quite as far as they would wish to go, it is a very substantial proposal—
indicated dissent.
Surely my hon. and learned Friend does not think that this is in the least like Section 2 of the Finance Act, 1912?
It makes it worse.
It is, of course, impossible for me to press the Clause, and do not propose to do so; but we have endeavoured to come to an agreement in this matter and have not been able to do so. I can only say that Section 2 was on the Paper from 1909 to 1912, and was accepted by the Committee as a reasonable proposal in the interest of the free-licence holder. It has worked perfectly well in Scotland, where we have no tied-house system, and there has not been the least complaint made there. The leases in Scotland are very short, and I doubt very much whether there are now any existing which were running previous to the Act of 1909. The abolition of the Section, so far as Scotland is concerned, will not therefore make any difference. I am sorry that we have not been able to arrange a modus vivendi by which some portion of this tax would be paid, as it ought to be paid, by the rack-rent landlord in the case of the free-licence holder, but I have done my best to see that the Clause has been amended as far as possible, and I can do no more. It stands to speak for itself on the Paper.
4.0 P.M.
I would like to express-my gratitude to the Chancellor of the Exchequer for having introduced this Clause which my hon. Friend moves to omit. The question raised is one which requires ample consideration. No one would say a single word against the hon. Baronet who secured the introduction of Section 2 in the Finance Act of 1912. We all realise his-ability and we give him credit for the fact that when he is watching over the interests of Scotland he neither slumbers nor sleeps. It is quite true also that the Clause was on the Paper for some time, and as he secured its introduction we cannot help feeling that he must necessarily regard it with a feeling of parental pride, but when I have said that I have really said ail that can be said with respect to it. For some time I was one of those who endeavoured to try and find a viâ media, so that, without entirely repealing it, we should get some system by which some of the intended benefits of the Section could be retained. But after carefully looking into the matter, hearing both sides, and listening to a number of persons connected with the trade, who fully set out their case, and after having had the advantage, thanks to the Chancellor of the Exchequer, of considering the point with those actually connected with the Department which had the administration of the Clause, I finally came to the conclusion that nothing could be done but repeal Section 2.
Just let us see the inequity which is introduced by that Section. It provides where a grantor has granted a lease the grantor may have recovered from him a portion of the increased Licence Duty that is imposed on the licensed premises, under the appropriate Clause in the Finance Act, 1910, and the person who has had to pay that tax is able to recover it as a debt due from the grantor of such lease. Although the grantor may have parted with his interest in the lease the liability to pay that sum of money remains upon him. The Courts, finding the difficulty of administering what they conceived to be the wisdom of Parliament, as enshrined in that Section, have on two occasions given some rather remarkable decisions. The Master of the Rolls, in a particular case last year, protested against the apparent difficulties raised by the Act, and decided that the grantor was only the person who actually granted the lease. Another of the Lords Justices pointed out there was no provision under the Section for imposing liability on the reversioner who was interested, and in that event all that was intended was that the actual grantor should pay, whether he was interested and still receiving the rent or not.
I do not want to go into other cases, because I desire to be quite short in my answer to the hon. Baronet, but on the question of the repeal of the Section the hon. Baronet asks us to leave it out, in order that he may introduce another Clause under which he is going to impose this liability, not only on the grantor, who is no longer interested in receiving the rent, but also on the grantor's heirs, executors, administrators and other persons legally representative of him, in spite of the fact that many years ago they have parted with the money, or have not been in receipt of it for a number of years. He asks us to forego the right of repeal in order to put that Clause in, and in so doing he is asking us to appeal from Philip sober to Philip drunk. I prefer the first tribunal.
But, as a matter of fact, the equity of this Clause is clearly seen when you come to think that, under the provision, and under the Clause as it stands at present, the fact that a man once granted a lease some years ago, and has had no interest in it for years, is still liable under the hon. Baronet's Section 2 to pay a portion of the duty imposed on the premises, although he has no interest whatever in them in respect of rent or anything else. That only needs to be stated to see that the Clause cannot remain. If the alternative is to adopt the suggestion embodied in the new Clause of the hon. Baronet, I think adequate reasons are given for those who have looked at the matter calmly to come to the conclusion that there really is no halfway house, and that repeal is the only sound and equitable course. I desire to thank the Chancellor of the Exchequer for fulfilling the promises given to the Committee by his predecessor in July, 1913, by his predecessor in the early part of this year, and by himself on the 14th of July last. We are glad to find that this Clause finds its place in the Finance Act, thanks to the right hon. Gentleman, and I trust we shall all be satisfied that an injustice has now been removed, and that the time has come when no alternative can be accepted, but that the only way to deal with the matter is to put an end to it, root and branch.
Having had some responsibility for this Section, I should like to say a few words to the Committee in order to explain that the Finance-Act, 1912, operated in a totally different way from that in which the hon. Baronet and I expected it would. Perhaps I may give a few figures, which will help to enlighten the Committee on this point. We will assume for a moment that a man has a house which is, under ordinary circumstances, let for £100 a year. He lets it to a tenant for £150; the idea being that the extra £50 represents the licence value, so far as the original landlord and tenant were concerned, and the duties being highly raised, part of the extra duty was to be obtained from that source. We did not knew at the time, or if we did we had forgotten, the position that existed in England, where most of these houses are let for a small rent with a big premium added. We will imagine a house let at a rental of £50, with a premium of £2,000. The original landlord got the premium and has gone away. He has sold his £50' lease to somebody else. The licence value includes not only the £50, but the £2,000 premium, and the consequence is that the brewer who had the lease came back on the original grantor or rather on the man who had the £50, and demanded from him, sometimes, not only the £50, but more. That, of course, was absurd, and I do not see how the hon. Baronet can get over that difficulty.
With regard to Scotland, there were but very few cases where the difficulty was likely to arise, and they were in the southern part of the country. In the north of Scotland there were no cases of the kind, for the reason that most of the houses there are not tied houses. What is done is this: A piece of ground is sold on a perpetual feu. A house is built, a mortgage is obtained, and possibly a second mortgage to the brewer. The man is never tied. The Committee will see he might have a ground rent of £20; if he takes that ground rent, the original grantor of this perpetual feu may very well get from him far more than he has received in rent. The whole thing has become absolutely absurd. I think the Chancellor of the Exchequer has very properly seen that it is an injustice, and has taken the only step he can reasonably take.
I should like to point out that if we pass Clause 17 it will make absolutely impossible the adoption of my hon. Friend's new Clause. I can only say that a great injustice will be done in many cases. At the present moment exceedingly hard cases occur in regard both to tied and free houses, in which the landlord takes the whole property value as rent, and in some cases the persons who made the purchase are placed in a most painful position, through having taken over the property without having had in view legislation of this character. I do not pretend to be an expert with regard to details of these cases, but I feel it is clearly my duty to get up and say I understand very great injustice will be done in a great many cases, and that hardship will result. For my part, I hope the Section will be retained as it stands.
I think my hon. Friend is under a misapprehension about the effect of the repeal of Section 2 of the Act of 1912. The intention of the original Finance Act in dealing with these matters was that the licensed trade should be subjected to taxation which it should at any rate be in a position to pass on to those who consume intoxicating liquors. It was thought there were certain classes of persons receiving benefits from licensed premises who might share the burden with the rest of them. It was a very reasonable proposal, but the practical effect of Section 2 has been that a considerable number of persons have been penalised by reason of past transactions in regard to public-houses. People who have let public-houses years ago, and taken the premiums, and sold them to other persons, people who have parted with the money, or are not in a position otherwise to recoup themselves in any sort of way, have been called upon to pay to the brewers in this country amounts which sometimes exceeded their whole interest in the property. That never was the intention of this House. The matter was considered by those who had to advise owners of property, or who had in the past owned such property, and representations were made to the Treasury. It was recognised by the Tight hon. Gentleman's predecessors and by the right hon. Gentleman himself, that Section 2 of the Act of 1912 inflicted an unintended and extreme hardship on certain classes of owners of property, or persons who had been owners of property. In that state of the case nobody has been able to suggest any practical means of dealing with the hardship, except the repeal of the Section, and that is the present proposal.
I thank the hon. and learned Member (Mr. Duke) and my hon. Friend below me (Mr. J. M. Henderson) for their contributions to this Debate. From information which has been given to me I agree with the latter part of the hon. and learned Member's speech, in which he implied that because some injustice was done therefore people who ought to pay will now be released. That was the inference I drew from his speech. No doubt in some cases there are people who are pocketing revenues from these dues without contributing their proper share to the revenue. This particular Section 2 did get at them, but in getting at them, as the hon. and learned Member says, it also got at innocent people long after they had parted with any interest in licensed premises. I am quite clear that this Clause is not a solution of the matter. If some innocent people have been hit, we are very sorry and we should like that stopped; but we must admit that some people will continue to draw a certain amount of revenue without contributing a fair share of the burdens of those who are carrying on the business. It does mean that in certain cases some people will retain profits untaxed, leaving the burdens to be borne by those conducting the industry. It may be that nobody can find a way out. I do not know who is to blame. As one who has no interest except to see justice done, I do not think that this Clause is finality. I gathered from the hon. and learned Member (Mr. Duke) and from the hon. and learned Member for Warwick and Leamington (Mr. Pollock) that a sufficiently large number of innocent people have been hit by this provision and that it had better be repealed. Then it is the duty of the Government to get at the right people and to get some contribution from these people in the interests of those who are carrying on the industry. We ought to expect, when the next Finance Bill is framed, to see that the Government has found some means of carrying out what was a proper purpose, but in regard to which this particular Section 2 has been proved to be misapplied.
Question, "That the Clause stand part of the Bill," put, and agreed to.
CLAUSE 18—( New Tables for Ascertaining Weight and Strength of Spirits )—ordered to stand part of the Bill.
CLAUSE 19.—(Increase of Income Tax.)
Three Amendments which have been handed in to this Clause should come in as new Clauses.
Clause ordered to stand part of the Bill.
On a point of Order. I rose before you put the Question, and called your name three times. I wish to say something on the Question that the Clause stand part of the Bill.
I beg the hon. Member's pardon, but I have already put the Question and cannot go back. I apologise to the hon. Member. I did not either see him rise or hear him. He must try a little more to attract my attention at another time.
CLAUSE 20.—(Reduction of Exemption and Abatements.)
(1) The exemption granted under Section one hundred and sixty-three of the Income Tax Act, 1842, as extended by Section thirty-four of the Finance Act, 1894, to persons whose respective incomes do not exceed one hundred and sixty pounds a year shall be restricted so as to apply only to persons whose respective incomes do not exceed one hundred and thirty pounds a year.
(2) The relief from Income Tax allowed under Section thirty-four of the Finance Act, 1894, to persons whose respective incomes do not exceed five hundred pounds and under Section eight of the Finance Act, 1898, to individuals whose incomes do not exceed seven hundred pounds shall be reduced so as to be—
( a ) in the case of persons whose incomes do not exceed four hundred pounds, the tax upon one hundred and twenty pounds; and
( b ) in the case of persons whose incomes exceed four hundred pounds and do not exceed five hundred pounds, the tax upon one hundred pounds; and
( c ) in the case of individuals whose incomes exceed five hundred pounds and do not exceed six hundred pounds, the tax upon one hundred pounds.
(3) Where relief for the current Income Tax year under either of the said Sections has, before the commencement of this Act, been given by reduction of the assessment, the assessment shall, without further notice or authority, be treated as varied in such a manner as to give effect to the Amendments made by this Section.
(4) One hundred and thirty pounds shall be substituted for one hundred and sixty pounds in Section thirty-six of the Finance Act, 1894 (which relates to depositors in savings banks) and in Section sixty-eight of the Finance (1909–10) Act, 1910 (which relates to relief from Income Tax with respect to children); and any reference in any enactment to Section thirty-four of the Finance Act, 1894, or to Section eight of the Finance Act, 1898, shall be deemed to be a reference to that Section as amended by this Act.
(5) Section twelve of the Finance Act, 1898 (which grants an exemption from Land Tax in the case of certain persons who have been allowed a total exemption from Income Tax by reason of their income not exceeding one hundred and sixty pounds), shall have effect as though the words, "relief from Income Tax," were substituted for the words, "a total exemption from Income Tax."
I beg to move, to leave out Sub-section (2).
I move this Amendment for the purpose of continuing the relief which was given by previous Income Tax Acts to persons whose incomes did not exceed £500 and other persons whose incomes did not exceed £700. In the present Bill it is proposed, in the case of persons whose incomes do not exceed £400, to reduce the exemption to £120, and, in the case of persons whose incomes exceed £400 but do not exceed £500, they will be taxed upon £100, as contrasted with the present relief and abatement of £160. We have been frequently told that the principle which underlies all these proposals of the Government to lay heavy burdens on the community in the present Finance Bill is one of equal sacrifice. When you introduce a Bill such as the present Finance Bill, which lays wholly unparalleled burdens upon the public, that principle of equal sacrifice becomes of far greater importance than it is even in the case of ordinary Finance Bills. I shall be able to show without any difficulty that this particular provision outrages the principle of equal sacrifice in a quite extraordinary degree. When this Bill was first introduced my attention was drawn to complaints of certain classes of the population who, in my opinion, have suffered more from the present War—I mean suffered more as a class—than probably any other section in this country. Those are the people who are in the enjoyment of incomes of from £200 to £300 per annum. They form a very considerable number of the people of this country, and they belong to a class who are very much unremunerated for their services, at least some of them are, in proportion to the remuneration granted to other classes. They are teachers, clergymen of various denominations, shop assistants, clerks, and I think I might also add a certain class of members of the Civil Service. To them may be added another class for whom I might say a special word, which is a clear case of exceptional hardship—the numerous class of widows or professional men who have been obliged, through ill-health, to retire or abandon their professions and who are living on very limited incomes, perhaps £200 to £.300 a year, derived from investments in securities, and who by another anomaly of the existing Acts have to pay a higher rate of Income Tax, although they are eminently, some of them pre-eminently, deserving of indulgence under Income Tax Acts.
They are charged at the full rate as receiving unearned income, in contrast to many men who are receiving an income of £5,000, £6,000, or £10,000 from their profession or other occupation, and who get off at a cheaper rate. That is one of the anomalies which has been left under the Income Tax System. It involves a special grievance on those who are included in these classes if my Amendment is not accepted. I take the class of persons earning £300 a year and having two children. Under the present Bill they will get an allowance of £50 in respect of the two children under sixteen years of age. I recognise fully that they will get an increased allowance for children, which, I think, might be reasonably still further increased. Under the present Bill they will pay increased Income Tax on £130, whereas under the previous Acts and the present system they would pay only upon an income of £90; in other words, in the case of the man with £300 a year, who has a family to keep, who has, at the best, a very hard struggle for life, you are not content with putting on the great increase in the Income Tax proposed by this Bill, but you first of all practically double his Income Tax and then add 40 per cent., whereas when we come to the class of person with £4,000 or £5,000 a year you do not do that, but you simply add the 40 per cent. So far as I can work out the figures—it is a somewhat complicated matter—if you take the case of a person with £8,000 or £10,000 a year, the increase proposed by this Bill works out not at 40 per cent. but something like 27 per cent. or 30 per cent. In other words, you add to the Income Tax of the struggling poor man an enormously greater proportionate increase than you do in the case of a man with £10,000. I am very curious to know how the Chancellor of the Exchequer can possibly attempt to defend such a position as that.
Again, take the case of a man who has £200 a year. That covers a great many cases. A man with £200 a year and with two children, under the present system, pays no Income Tax. At present he gets £20 allowance for each child, which would bring him exactly to the Income Tax limit. Under this Bill a man with £200 a year gets £50 allowance for his two children, and he pays Income Tax on £30 a year. He is not only brought in under the Income Tax in respect of the £30 a year, but he is brought in under these enormously increased taxes? If we confine our attention entirely to the incidence of these taxes, I cannot conceive how any man could attempt to justify it on the principle of equal sacrifice. That you should, in a Bill of this character, double the Income Tax and add 40 per cent. in the case of a man with £300 a year and bring in under a very heavy Income Tax a man who has £200 a year, but who under the present system pays nothing, and that when you come to a man with £10,000 a year you should only add 27 per cent. to the tax he is now paying, it is impossible on any principle of equal sacrifice to justify such a system as that. If you really want to understand the full injustice—I say it is a crying injustice—of this particular Sub-section, you must not confine your attention to the mere effect of the Income Tax, you must take into consideration the whole situation, because you must, in order to endeavour to be just in laying all these new burdens on the people, consider fully the resources of the different classes found to be affected. I take the case of a person with £200 to £300 a year. What has been the effect on their position, and their struggle to live, of the War, taken as a whole? In the first place, you have to remember the increases which have taken place in the cost of the absolute necessaries of life—coal, bread, tea and sugar, as they are affected by the rise in prices. Not only have we to consider those matters, but the Chancellor of the Exchequer has added to the burden by new indirect taxation, which still further increases the prices of the necessaries of life. Hon. Members belonging to the Labour party protested against these new taxes, and while I sympathised very strongly with their protest, I did not feel justified in opposing these taxes, because I felt that every class of the community in this great crisis ought to pay its share. But we cannot leave them out of sight. They do throw a heavy burden on the workers of this country and on the classes of which I am now speaking.
In the case of people having about £200 or £300 a year the burden is enormous. I quoted a letter the other day from a lady who said that her weekly allowance to keep the house going was £2 per week, and before the War she was able to buy necessaries for her family for £2, but since the War her bill had risen to £2 18s. for exactly the same commodities. I have no doubt that was a very fair statement of the effect of the War prices. The taxes will bring that up to at least £3 a week. That is to say, that in the case of a family of that limited income the circumstances of the War, including these new indirect taxes, will put an absolutely necessary extra expenditure of something like £50 a year; and yet in spite of that you propose to put this penal and unjust Income Tax on top of that enormous burden. It is unnecessary to emphasise the fact that the rise in prices, and these indirect taxes, bear with tenfold greater pressure and weight upon people of these limited incomes than on people with larger incomes. If you take a man with £5,000 or £10,000 a year, I suppose it costs him £20 or £30 a week to pay for the ordinary expenses of his house. He has a large margin over and above the necessaries of life from which, however unpleasant it may be to him, he can bear these extra taxes. But the man of narrow income has no margin, and if you put these enormous burdens upon him the only way in which they can be met is by limiting the necessaries of life and reducing the supplies of meat and bread and coal in the house. Therefore it is preposterous, in my opinion, to contend that this Clause observes the principle of equality of sacrifice in the slightest degree.
I was greatly struck by an argument of the Chancellor of the Exchequer the other day in introducing the Bill—indeed, it was the only argument he attempted to make. He said what really affects men is what they are accustomed to. If you compel a man with £10,000, £5,000, or £20,000 a year to pay heavy taxes and to alter his methods of life, you are inflicting upon him just as great a hardship as if you compel a man of £200 a year to alter his methods of life and put a heavy tax upon him. That principle I cannot for a single moment accept. A man who has a large income may feel it very disagreeable to be obliged to part with what has become second nature to him—the luxuries and amenities of life. No doubt he does. But if you have regard to any fair consideration of the principles of taxation you cannot, in my opinion, compare on the same terms at all the necessity which falls upon a man with a large income to part with some of the amenities and pleasures of his life with the necessity which compels a man with a narrow income, barely sufficient to supply the absolute necessities of life, to reduce his. That is exactly the whole of my argument. Therefore I should say there is no ground for this wholly new departure in the present Bill.
Let me put this point. We have had this question raised more than once recently in the House, even before the War broke out—the desirability of bringing the whole community practically under the Income Tax. There are some Members who hold it to be good in principle, and even I have noticed in very liberal-minded financial newspapers like the "Economist" have advocated this tax on the ground that it is an excellent principle to bring home to every member of the community his responsibility by bringing the whole population, working class and all, under the Income Tax. That is a perfectly arguable question, but I urgently put it to the Chancellor of the Exchequer that this is not the time—when a great War is upon us, and when Bills of this character have necessarily to be passed by the House in rather a hurried manner, without full consideration—to introduce, as it were by a side-wind, a wholly new and far-reaching principle of Income Tax. If we examine the history of the Income Tax for the last fifty years the whole principle of successive Chancellors of the Exchequer has been in the opposite direction. The principle on which the Income Tax has been worked has been to increase and develop this system of abatement and objection and to extend the principles of graduation and also to bring in the Super-taxes. There is another ground on which I am most strenuously opposed to this Sub-section, because it really is introducing in a small way something like the taxes we passed the other day on imported articles, a wholly new principle, which, if it be a good principle, ought to be introduced after the War is over, when we could have an opportunity of investigating afresh the whole question of the Income Tax, full as it is still of anomalies and injustices, even after the great reforms which the late Government successfully brought about. Any change of this character should be comprehensive, and should certainly not be included in the same Bill which imposes a vast increase in the indirect taxation of the country. All those who before the War advocated this principle of lowering the exemptions and abatements of Income Tax, so as to bring fresh classes under its operation, accompanied it by urging that there should be something approaching to a free breakfast table and a reduction of the indirect taxation of the country. I have my own ideas about those principles, but I never heard any man yet, until this Bill was introduced, advocate the idea that in one and the same Bill you should heavily increase indirect taxation on the necessaries of the people and lower the abatements and exemptions of the Income Tax. That is a wholly new departure, and one which, in my judgment, ought not to be introduced in war time. It is, moreover, a radical reversal of the old principle that all Governments have followed, Conservative and Liberal, in these Income Tax Acts for the last sixty years so far as graduation goes. In all previous Acts, ever since I have been in the House and long before I entered it, dealing with Income Tax, wherever an alteration was made, it was based on the principle of increasing the burden in proportion to the wealth of the people who had to pay it. This Bill for the first time increases the burden enormously on those who are least able to pay and grades it off according as you reach the higher incomes. Therefore it is in principle an absolute reversal of the whole spirit of the Income Tax Acts for many years.
There is one other reason against this proposal, and this consideration has puzzled me very much as regards the principle on which the Budget was drawn up. It is a very peculiar Budget. It looks like one which did not come from a homogeneous Government, but from various suggestions pieced together by way of compromise from different sections holding different principles. This proposal is not of very much value to the Exchequer. It will not bring in a very large revenue. If the Government had made up their minds to raise certain sums by Income Tax it would have been infinitely simpler to put 1d. on to the higher grades. Many hon. Members were very much relieved when they heard the Chancellor of the Exchequer explain his proposals as to future Income Tax. If he felt absolutely bound to raise the sum he proposed to raise he could easily have avoided Clause 20 by putting 1d. more, or something very small, on the general Income Tax. But here he has introduced—and this, again, is against all the principles I have heard laid down over and over again by the greatest Chancellors of the Exchequer in the past—for the sake of a very small revenue, almost negligible in view of the vast bulk of the new taxation, a proposal to raise a tax which will create the maximum of irritation, and it is not only the extreme irritation that the demand for these taxes will create when people come to realise, as they have not, of course, yet been able to realise, the injustice of the tax, but it is the investigations and inquiries and returns which are becoming more onerous and more incessant year by year, as the Income Tax is more carefully collected than it used to be, which even where there is only £1 or 30s. to be paid, create an extraordinary amount of worry and irritation amongst a considerable number of people who never had to do with Income Tax before. This is not the time to arouse that kind of feeling, more especially when it will be combined with a feeling of injustice and a strong and, I think, justifiable feeling that in this particular tax there has been no attempt to observe the law of equality of sacrifice. It will cause an amount of annoyance wholly disproportionate to the revenue which will be recovered, and not only is that the case, but there will be an extraordinary amount of extra work thrown upon revenue officers which will undoubtedly involve the necessity of the creation of several new officials.
Is the hon. Member on Sub-section (2) now?
I confess that the observation I was now making had more reference to the whole Clause.
In replying to the Amendment to leave out Sub-section (2), had we not better postpone the discussion of the other objections to the Clause?
I think the right hon. Gentleman is quite correct. I will reserve what else I have to say for the discussion of the Clause as a whole.
( indistinctly heard ): The hon. and learned Member for Mayo (Mr. Dillon) had a great deal to say for his case. I would particularly ask the Committee to see how it affects small incomes of a fixed nature, or incomes derived from annuities or some particular fund which cannot be increased to meet the demands made upon it. I would mention the case of a clergyman or a doctor with £200 a year, or a lady who has a fixed annuity of that amount. This makes a difference to them of 2s. in the £ on a tax of £40, or an extra tax of £4. That is rather a big demand to make upon a man with £200 a year, and it is very high. I agree with the hon. Member for Mayo that the whole question of this deduction starts upon a wrong basis. You take an arbitrary sum irrespective of what the result may be, instead of having a fairly graduated Income Tax rising from, say, £70 or £80 a year, until you touch the real necessities limit, which touches these people who cannot increase their income and who have no means of increasing their income. To put an extra tax like this upon them is not wise. I quite agree that everybody should contribute a fair sum as a sacrifice, so that the exigencies of the nation can be brought home to every individual in it. I think, however, that when the right hon. Gentleman reduces this limit by £40, he is going a little bit too far, and he will produce a very great deal of hardship upon people who have small incomes and no means of increasing them.
I have been deputed by certain of my Constituents to represent to the Chancellor of the Exchequer that this particular Clause in the Income Tax will hit the small traders very hardly. What the hon. Member for East Mayo has mentioned is a matter that deserves a great deal of attention. This new assessment will cause a great deal of annoyance to the small traders, and will impose a certain amount of hardship upon them. I quite agree with the principle that has always been at the bottom of what I may call democratic taxation, and that is, equality of sacrifice. I maintain, however, that if we work out the taxation in figures, and see how this matter stands in regard to the proposal in this particular Clause of the Bill, and compare it with the amount of money that is to be taken in Income Tax from those who enjoy much larger incomes, say, of over £5,000 a year, it will be found that the ratio paid by the smaller man far exceeds that which is paid by the rich man. Arithmetic must enter into this question to a certain extent, and it is questionable whether those who have had to deal with the preparation of this Income Tax have looked into it from what we may call the arithmetical point of view. The men who are working at their trades and the labourers are really the bone and sinew of the nation and the men who make the produce which makes the wealth of the nation. Therefore I maintain that the wealthy, those at the top, whom I might call the classes, ought to contribute in greater proportion according to their means than the principle of equality of sacrifice would suggest. I hope the Chancellor of the Exchequer will take into serious consideration the suggestion which has been made by the hon. Member for East Mayo, and that he will see whether it will not be better to add 1d. to the Income Tax all round rather than to specialise on one particular class with the object of getting a greater sacrifice than that which is entailed on any other class in the community. I would not have intervened in this Debate had it not been for the fact that I have been particularly requested to do so by a very large class of people in my Constituency who represent the small traders, who will be most grievously hit if this Clause is carried in its present form. I would appeal to the Chancellor of the Exchequer to consider that everybody is desirous to have fair play in this matter of Income Tax. Of course, nobody likes to pay Income Tax unless forced to do so. While that is true, the right hon. Gentleman ought not to give any class in the community any more reason to complain than any other class. I hope, therefore, he will consider the arguments that have been put forward in support of our case and that he will see if he can meet us.
With several of the principles that have been enunciated by hon. Members I heartily agree. I am entirely in sympathy with those who think that we should accept the principle of equal sacrifice, and that every class in the community ought to bear its share of the national burden. When we come, however, to the application of those admirable principles, I regret to observe that there seems to be a great deal of difference of opinion. When we say that there ought to be equality of sacrifice, do we mean there ought to be equality of sacrifice this year? If the hon. and learned Member for East Mayo (Mr. Dillon) means when he says there ought to be equality of sacrifice that those who paid too little last year ought to continue to pay too little this year, then he and I are not at one. It is no good his telling the Committee that the increased Income Tax charged is such and such percentage of an income of a certain size, and is a much smaller percentage of a higher income, unless he shows that the charge before this Bill was introduced was such as to support his case.
My point is that any great change of Income Tax of this character ought to be attempted in peace time.
My object is to secure, as far as I can, equality of sacrifice, and to make a serious effort to secure contribution from every class. Both these principles are accepted by the hon. Member. I want to examine how far these principles have been adopted in the present Budget. The hon. Gentleman took as a typical case an earned income of £200 a year in the case of a man with two children. I will accept his challenge. I assume he took that case as his best case. Let us see what was the sacrifice of a man with £200 a year and two children before this Budget, what is the sacrifice which this Budget imposes upon him, and how does that sacrifice compare with the sacrifice imposed upon other classes. I think that is a fair case to take. I will re-examine a whole series of family budgets in order to get at some definite idea of how much of a man's income goes in taxation, taking taxation, in its entirety, indirect taxes through the Customs, and direct taxes through the Inland Revenue.
I find that a man with £4 a week, which represents an income roughly of £200 a year, contributed in taxation before this Budget, when he had no children, 1s. 2d. in the £. When he had one child he con- tributed 1s. in the £. It seems rather strange that he should contribute less with one child than when he had no child. The fact is that in a typical family Budget the moment a man begins to have a family he spends less on himself in alcoholic liquors and tobacco, and although he consumes—the child consumes—more tea and sugar, he is not so heavily taxed in those respects as he was in connection with his consumption of alcoholic liquors and tobacco. Then I come to a man with £4 a week who has two children. His contribution to the State in taxation before the Budget was 10½d. in the £.
Before this Budget?
Yes, before this Budget. I am glad to see the hon. Member for Blackburn (Mr. Snowden) here, because he raised a similar point in regard to this Budget in a previous Debate. I am now taking the case which was given by the hon. Member for East Mayo as one which showed the marked injustice of this Budget. The man with £4 a week who has two children contributed before this Budget in taxation 10½d. in the £.
An HON. MEMBER: On the whole?
Yes, on the whole income. It so happens that the man with £200 a year, with two or three children, was the least heavily taxed man in the country before this Budget. A man with such an income who had three children paid 10d. in the £ compared with the 10½d. in the £ paid by the man with two children. How is the man with £200 a year treated under this Budget? If he has no children his contribution goes up from 1s. 2d. in the £ to 1s. 11d. With one child his contribution goes up from 1s. in the £ to 1s. 8d. With two children his contribution goes up from 10½d. in the £ to 1s. 5½d., and with three children it goes up from 10d. in the £ to 1s. 3d. in the £. It is a very remarkable thing that even under the new Budget, with the additional Income Tax imposed upon him, the man with £200 a year is still the lowest taxed man in the country. I admit that he very nearly comes on an equality with those less rich than himself, but it so happens that he still is less taxed than the poor man of whom my hon. Friend (Mr. Snowden) spoke on the last occasion.
Is this all on earned income?
Yes, on earned income. I am speaking of cases of earned income entirely. I had no cases put to me except cases of earned income. My hon. Friend Mr. Henderson spoke of a doctor or clergyman. Those are cases of earned income. He spoke of no other classes.
I spoke of ladies receiving an annuity.
I regret that I did not note that particular part of his argument. I only heard the cases of earned income addressed to me by the hon. Member for East Mayo and my hon. Friend, and I have given figures showing the position of the man with an earned income of £200 a year before and after the introduction of the present Budget. Let us compare his case with the case of other classes, and then let us see how this Budget in fact conforms to the principle of equality of sacrifice.
5.0 P.M.
I am giving the rate comparing the amount of taxation paid with the total income received. Take the case of a man with an income of 30s. a week. Before the Budget his total taxation was 1s. 3d. in the £. After the Budget it becomes 1s. 9½d. A man with 40s. a week before the Budget paid 1s. 2d. in the £. After the Budget he pays 1s. 8d. That is to say, those two classes pay very nearly at the same rate. There is only a 1d. in the £ difference between them both before and after the Budget. The man with 50s. a week, who is now at Income Tax limit, before the Budget paid 1s. 1½d. After the Budget he pays 1s. 6½d., as compared with 1s. 8d. paid by the man with the smaller income. The man with 60s. a week, who now comes under the Income Tax law, before the Budget paid 10½d. in the £. The man with one child paid 11d., the man with two children 11½d., and the man with three children 1s. After the Budget the man with no children pays 1s. 7½d., the man with one child 1s. 4d., the man with two children 1s. 3d., and the man with three children 1s. 4d.; so that the man with £3 a week and no children pays practically the same amount as the man with £2, but he pays slightly less when he has children. I have already given figures for the man with £4 a week. From these figures it will be seen that if you take incomes from 30s. a week up to £4 a week, the rate of taxation ranges from 1s. 11d. in the £ paid by the man with £4 a week and no children to 1s. 3d. paid by the man with £4 a week and three children, and that he pays less than anybody below his rate of wage. It will be observed that while there is still this discrepancy which it is almost impossible to avoid, the rate of taxation after the Budget is far more equal than it was before the Budget. Now I will turn to the higher ranges of income. The maximum which we have reached up to the present is 1s. 11d. in the £, paid by the man with £4 a week and no children. Now I go up increasing by hundreds a year. On an income of £300 a year, the rate varies from 1s. 8d. in the £ for the man with three children to 2s. 2½d. for the man with no children. On an income of £500 a year the rate is 2s. 1d. for the man with three children and 2s. 4½d. for the man with no children. On incomes of £1,000 a year the rate varies from 2s. 10d., after the Budget, to 4s. 4d., according to whether it is wholly earned or wholly unearned. On incomes of £5,000 a year it ranges from 4s. 7d. to 4s. 9d., according to whether it is wholly earned or wholly unearned. On incomes of £10,000 a year it ranges from 5s. 5½d. to 5s. 7d., again according to the same conditions; so that while we start making the equality of sacrifice a reality so far as we can under this Budget—1s. 3d. or 1s. 4d. or 1s. 6d. in the £ for the man earning £2, £3, or £4 a week—we go up to 5s. 7d. in the £ in the case of the man with £10,000 a year.
Does that include Supertax?
These estimates include Income Tax, Super-tax, House Duty, Land Tax, Stamps and indirect taxes, including the taxes on motor cars and petrol—they include all taxation. I am trying to give a fair account of what burden is imposed on the different classes of incomes. I am putting these figures forward as the best we can obtain. Of course the higher figures are accurate. It is not considered necessary in these cases to bring into account the number of children. The real source of revenue in the case of the higher incomes comes from the Income Tax. The indirect taxes amount only to a small proportion—a few pence in the £—of the large incomes. If these figures are accurate in the case of the small incomes it must be admitted that a very real attempt has been made to proportion the burden to the ability to pay. I admit frankly that the rate is not sufficiently proportioned downwards below the Income Tax level. As regards the particular Amendment, my contention is that by the reduction of the abatement we still do not right the inequality below that level. We still do not do enough to redress the inequality in the case of the man who suffers by the total effect of our taxation. That is to say, the man who makes too big a contribution out of his income is not the man with £3 or £4 a week who is brought under Income Tax for the first time, but the man with £2 a week and 30s. a week. I frankly admit that under the present system of indirect taxation these men pay 2d. or perhaps even 3d. in the £ more than they would pay if it were possible to grade the scale absolutely proportionately down to the lowest level. The difficulty is inherent in the system of indirect taxation. We have got this enormous rate of taxation upon articles such as tobacco, alcoholic liquors and tea, which though none of them can be described as absolute necessaries of life are nevertheless the subject of very general consumption, almost universal consumption, and so long as a man, however poor, will spend some part of his income upon those taxed commodities it is inevitable that it may lead to the result that he should contribute slightly in excess of his income But the excs3s is not a large excess. By reducing the abatement on Income Tax and by steadily increasing the rate of Income Tax, we have largely redressed the grievance of the man below Income Tax level. Dealing with the particular case brought forward by my hon. Friend the Member for East Mayo, I must say that of all men the man with £200 a year and two or three children has the least right to complain with regard to the total amount which is taken from him in taxes. I quite agree with what fell from the hon. Member with regard to the infliction of new burdens. I have always held that opinion. But where a man has enjoyed immunity for too long a period, you cannot for the moment bring him up to the level of the others. He feels the blow too heavily. The man with £200 a year is still behind. While I admit that he does feel the burden, because it is a new burden, he has no ground of complaint that he is exceptionally selected for special taxes. On the contrary, he escapes more easily than the rest of his fellow countrymen.
The effort of the right hon. Gentleman has been to try to establish the contention that this Budget, if it does not altogether produce the equality of sacrifice between the different classes of taxpayers, at any rate makes an approach towards the realisation of that state of affairs. He submitted extremely interesting figures, but it is quite impossible to estimate the value of those figures until we are in possession of much more information as to the data upon which these figures are calculated. But assuming the accuracy of these figures, I submit that they establish one thing. As I stated the other day, it is impossible, or at any rate very difficult, to consider any particular tax without at the same time considering its relationship to other taxes which the same individual has to pay. The trend of the right hon. Gentleman's speech has been to establish the contention that there is, roughly speaking, equality of sacrifice between all the different kinds of taxpayers. He gave us the amount of taxation per £ in the case of men making below £200 a year, and he stated that a man with £200 a year and no children is now paying a tax of 1s. 11d. in the £. Later on he contrasted the sacrifice of that man with the sacrifice of the man with an income of £5,000 a year who was called on to pay a total taxation—whether it includes the tax on motor cars and petrol I do not know—of 4s. 7d. in the £. Does the right hon. Gentleman contend that a tax of 10 per cent. upon a man with an income of £200 a year involves that man in no greater sacrifice than is involved by a tax of 4s. 7d. in the £ in the case of a man with an income of £5,000 a year? I may direct the attention of the Chancellor of the Exchequer to this very important matter. There is certain essential and necessary expense in every household for food, clothing, and rent to which the right hon. Gentleman made no reference. The cost of these necessary things is practically the same in the house of the man with an income of £200 a year as in the case of a man with an income of £10,000 a year. The man with an income of £10,000 a year can only be wearing one suit of clothes at a time, and one pair of boots at a time. He can only consume a certain amount of tea. He can only smoke a certain amount of tobacco, and it is a fact accepted by all who are entitled to speak upon the matter that even the lowest ranges of income pay as much in indirect taxation as those who have the large incomes.
Then, in regard to the matter of rent, the proportion of income of a man with £200 a year which is taken for rent is enormously greater than the proportion which a man with an income of £5,000 or £10,000 a year has to pay. The man with an income of £200 a year in London will pay 20 per cent. of that income in rent, and a man with an income of £10,000 will not pay any more than 4 per cent. or 5 per cent. of his income in rent. The Chancellor of the Exchequer seems to have forgotten the right point of view when trying to establish a system of taxation which will roughly involve equality of sacrifice. When you take 10 per cent. of the income of £200 a year you place a burden of £20 a year on that income, every penny of which is needed to keep the family in that standard of life which their station demands; every penny of that £200 a year is required; and, therefore, if you take £20 from that income, the burden must be felt. A tax ought not to be a burden which trenches upon either the necessaries of life or of reasonable comfort. It seems to me that this is the failure of the taxes which the Chancellor of the Exchequer has put forward and the weakness of the case he has tried to establish. The amount he proposes to take by this Budget from people of incomes of £200 a year and downwards involves far greater sacrifice, although the percentage may be less than in the case of incomes very considerably above that limit. Some curious and indefensible anomalies are to be established for the first time in the Income Tax system. Hitherto the abatement has been £160, and therefore the person with an income of £161 was assessed on £1 only. The abatement is not to be the same as the minimum income assessed to Income Tax, and that is a very curious result.
Take the case of the man with an income of £130 a year, he does not pay Income Tax at all. The man with an income of £131 a year is going to pay Income Tax, not upon £1 only, but upon £11, and that Income Tax at 2s. 1d. in the £ for earned income is going to make the man actually worse off than the man whose income is smaller than his own. I know that in any system of graduation you are always faced with that difficulty, but if the Chancellor of the Exchequer had put the 10 per cent. rate down to £120 the anomaly would have been removed.
It is not an anomaly!
It is not to people who pay Super-tax, but it is something more than anomalous in the case of those with lower incomes, to whom it becomes unjust and oppressive. In the speech of the right hon. Gentleman there were one or two observations introduced by him which filled me with something like alarm. It is invariable that the Chancellor of the Exchequer never gives any forecast of what he is going to do in future years; but when he spoke about anomalies in regard to the rate of taxation on various incomes, he said it was difficult to impose suddenly a large burden on any particular class. I do not know whether he had in his mind at the moment that the Income Tax had been reduced to £130 a year this year, because it would have been too much of a burden to impose a new tax if the income had been fixed at a lower figure than £130. If the Chancellor of the Exchequer has got anything of that sort in his mind, I want to warn him to consider very carefully before he further reduces the figure as to incomes on which the tax is to be paid.
I would like to say that I have not any such intention, nor any such proposal in my mind. I do hope that some day the present rate may be altered more favourably.
An hon. Member on the Back Benches opposite said that the Income Tax is not popular, but whether the Income Tax is popular or not, I think that the Chancellor of the Exchequer ought always to bear in mind that new taxation always causes a considerable amount of irritation, and it is desirable if possible to avoid that. The only thing which can justify a new tax that is likely to cause a great amount of irritation is that it is going to bring to the Exchequer a sufficient amount of revenue to compensate for the irritation. Certainly that does not apply to the new Income Tax proposal. You are going to tax for the first time a very large body of men; but the amount of revenue that is going to be derived from that taxation is so small that it is certainly not worth the trouble. I know, of course, that in Committee, as to these proposals, the only thing we can do is to express our views and give our reasons. That we have done. I do regret that the Chancellor of the Exchequer has done this; and, if it was necessary to graduate this Income Tax downwards, I think he would have done much better than he has if he had avoided the additional anomaly of making the abatement less than the minimum amount to be taxed.
The Chancellor of the Exchequer has necessarily, in this time of war, to impose great burdens on the people. He has none of the advantages enjoyed by his predecessors. The Prime Minister brought in old age pensions, and the late Chancellor proposed the insurance boon, supposed to be for the benefit of the working classes. The right hon. Gentleman has had no opportunity whatever of making remissions or of proposing any measures for the benefit of the people as a whole. He is in a position in which he has to provide for the carrying on of a great war, and any one of us in criticising him must be prepared to put ourselves in his position. We Lave heard the views expressed by the hon. Gentleman the Member for Mayo, but I would rather direct my criticism to the fact that the Government are not making sufficient deductions. I think that, while you must accept something in the nature of contributions from all classes, the contributions from the classes to which the hon. Member for Mayo referred are too high. It is said that a poll tax is obnoxious to British ideas. I do not see why, if you are determined to take something from the pockets of these people, it should be any more obnoxious to get £4 by poll tax than £4 by Income Tax.
It appears to me that some system could be invented enabling you to tap another source of revenue, yet, at the same time, not making the contributions of the poorer taxpayers so high, and especially not to make them so high at the outset. We were all extremely struck by the statement of the Financial Secretary to the Treasury the other night, when he announced that every man must be prepared in this War to part with half his income. That may be only a small matter in some cases, but while it must be a serious matter even to a man with £5,000 a year or £1,000 a year, it is certain death to the man of £4 a week. I must say that I do not believe that we shall be relieved of these taxes in our lifetime, and therefore I think it is incumbent on the House to resist at the beginning, though we are in time of war, and desire to put down a ferocious enemy. Still, we are assenting to this system of burdens being put on men of small incomes, and for my part I assent to it with the very utmost reluctance. With the tea, sugar, spirits, and tobacco taxes to which they are subjected, I think we are making upon them a very considerable demand.
I simply rose with the purpose of entering a caveat in any future years, or after this War is over, against its being said that we accept this system of taxation. I do not accept it. I protest against it. I say that it is unjust to the people of the humbler classes, and especially unjust to people of the small professional class; I think it is more unjust to them than to members of the working classes. It is assumed that if you put a tax on any individual, so long as that tax is the same on others, it will be equally fair. It is not. The advantages of life in this country are not the same. There are differences in education, a different system of universities, a different system of bonuses, and greater facilities of getting children situations, or getting them indentured to trades. Why, Sir, it used to be said long ago, and I used to read it constantly, "What a terrible burden the Catholic Church was upon the Irish people!" I have been considering this matter of what Churchmen get, and when you remember it is willingly given, and that they get value for it, what is it compared with the taxes imposed by the State in a Bill of this kind upon persons with incomes of £3 or £4 a week? I do not believe there is one man, and I am speaking now peculiarly of Ireland, with £3 a week in Ireland from whom the Church, whether it is Catholic or Protestant, gets £l per year. What a terrible burden that is! What does the State take in Ireland, where, unlike this country, you have not opportunities of making money out of the War? Look at the wealth that is pouring into the pockets of contractors and others in this country connected with the War, and look at the increased wages which many of the working classes are receiving. I think it is quite right that they should; they have given their blood freely and generously to the State, and do not let it be supposed that I am grudging them those additions; they are giving their labour as well.
Contrast the two countries and in addition remember this point: The working man can wear corduroys, the schoolmaster or the small professional man can not. The working man can go to shops where he will get cheap bargains. The dispensary doctor in Ireland, a man with a diploma, was, certainly up till the War, in many places only getting from £120 to £130 a year. I am pointing out the differences in advantage of the working man in this country compared with the small profes- sional classes in Ireland. I do not propose to enlarge upon that subject any more than I have done. I simply desire to enter my protest against this system. At the same time I do not agree quite with the hon. Member for Blackburn (Mr. Snowden) in what he has said about the rich. He has entirely forgotten the Death Duties. I saw a remarkable article in the "Times" the other day about the Wyndham family contribution, and to which I propose to refer to-morrow. What did the State take out of the Wyndham family within three years? In 1911, from the grandfather, £51,490; in 1913, on the estate of the son, £41,400; and then on the estate of the poor boy, George Wyndham's son, who was killed in action, the State took no less than £52,000. That is to say that in three years of that estate the State captured £140,000 in Death Duties, and let it be remembered there are many others. While I enter my protest against the incidence of this taxation, I do not do it for the purpose of differentiating between the classes, but I am quite walling, and I believe those who earn professional incomes would be willing, to have the Income Tax increased on themselves rather than put it on persons of lower walks of life, or, rather, on those who are called, unjustly called, the lower ranks.
I think too, when we are putting these taxes on, the tax gatherer ought to have on the back of his notice some idea of the condition of the law. These taxes will fall upon new people who will not know anything about the law. There should be on the back of the taxing demand some statement as to exemptions and claims and remissions, and as to the quarterly payments where those exist. In other words, as the Government are now enjoying the patriotic support of all classes, they should treat the people, especially the new Income Tax payer, from a different point of view from what, perhaps, they were treated hitherto. I often wondered why the members of the Labour party did not draw attention to this point before, namely, that all previous taxing Acts have been passed for the purpose of blindfolding the House of Commons and of misleading them. It is the business of the Government draftsmen to throw dust in our eyes, and all taxing Statutes have been framed with a view to befooling and deceiving the House of Commons. We are proposing to bring in a new class of taxpayer, and the Acts of Parliament are not at all easy to understand even when they are printed on the back of the demand note. I do think that in plain English, in the King's English for the new taxpayers at least, there should be a plain, bold statement as to what the state of the law is. Why should a man who gets a demand for taxes be compelled to go to a solicitor and have to pay him 6s. 8d. to know what his contribution is, or why should he be driven to those Income Tax agencies which are now so very widely advertised? The existence of those Income Tax agencies is the worst condemnation in the past of the action of the various Governments. The notion that you should have a body of persons growing up, a series of professional men necessary to teach the people, I will not say to dodge the tax, but to evade unjust proposals, because you have men who boast—
The hon. and learned Member is getting very far from the Amendment.
I was only doing it in aid of the view that this explanation should in future be put on the back of the taxing note. While I hope the Government has not yet abandoned the idea of any reduction downwards and that they will give us some concession on that point, I content myself with the protest I have made so far as these duties are concerned. Then with regard to the question of reducing it down from £160 by the mere filling up every year of the forms, I say that in the case of poor men and illiterate men that is a great additional grievance and one that should not be forgotten. Upon all those grounds, whilst sympathising with the position of the Government in the action they have taken, I deny that this is a war tax, and because I believe it to be a permanent tax I enter and register my serious protest against this proposed change.
I am very bitterly disappointed at the speech of the Chancellor of the Exchequer. I do not propose to put the House to the trouble of a Division for two good reasons. In the first place because I know I would be beaten, and in the second place, even if I thought I could defeat the Government, I certainly would not do so because I might find myself in some strange company. I am still very much disappointed by the answer of the Chancellor. He based the whole of his argument on this point. He frankly admitted that this was not a war measure at all, but that it really was a reform of the Income Tax. He said that in the course of his investigation he discovered that the man with £200 a year was favoured by the old Income Tax law. My contention is that in dealing with this War emergency Budget we ought not to attempt to introduce by a side wind and under the present stringent conditions of debate which now prevail any radical change in principle in existing taxation. We ought to accept the general scheme of taxation which existed before the War, and to distribute the burden according to those principles. I object in the strongest possible manner to the Chancellor of the Exchequer taking advantage of this War Budget to introduce great changes of principle in the incidence of the Income Tax. That is exactly what he has done. The Chancellor of the Exchequer is so enthusiastic and so enraptured with his new discovery as to the man with £200 a year, that he says the man with £200 a year is still behind in taxation. Thus there is the pleasant prospect before the unfortunate class for whom I have endeavoured to speak, not only that the Chancellor has put this most unjust increase of the Income Tax upon him, but he says it is only the first step, and he must bring it on by degrees until he has raised what the Chancellor is pleased to consider is that man's due proportion of the Income Tax. He says that the man with £200 a year is still the lowest taxed man in the country, but that you cannot put the burden suddenly upon him, but must bring him on by degrees, and that this is only the first step towards further burdens.
The Chancellor of the Exchequer then developed the theory to which I take absolute exception, and against which I now desire to protest, and that is, he seemed to assume that equality of sacrifice meant that all classes of the community should pay the same poundage in taxation, and that then there was equality of sacrifice. That is a very dangerous doctrine, and a very good illustration of the wrong course he has taken in introducing this change against which I protest. It is a doctrine which ought to be debated in times of peace and not in times of war. It is a doctrine which I protest against, and if I do not divide the House it is simply because of the peculiar circumstances which now prevail and which make it impossible to have discussions at present as in ordinary time. I beg to give full notice to the Chancellor of the Exchequer that I do not accept the principles laid down in his speech, and if I chance to be a Member when this matter comes up in the Finance Bill when the War is over, I shall do everything in my power to defeat what I think to be a great injustice.
The Chancellor in his speech dealt entirely with earned income, but the alteration in the case of an income of £200 a year unearned is even higher than in the case of earned income. The class with those incomes is not too well off, and generally they are either widows or pensioners. At the present time such people with £200 unearned pay an income tax of £4; but under the new scheme that will amount to £ll 4s., while in the case of earned income of £200 the increase is to 8 guineas. Thus the rise on unearned income of this amount is very great, and I would suggest to the Chancellor that he might quite fairly abolish the difference between earned and unearned income below, say, £300 or £250. By doing so no hardship would be inflicted on anybody, and he would be giving relief to a class who are already heavily taxed.
Will the right hon. Gentleman take this opportunity of correcting the extremely widespread misapprehension which exists in regard to the speech to which my hon. and learned Friend has referred? I heard the speech—an admirable speech it was—and I understood the right hon. Gentleman clearly to say that the taxpayer was to look forward to parting with something like half his income, as loans to the State and as taxation in the future. As that statement has been very widely interpreted to mean that half a man's income will shortly be taken by the State, is it not desirable that the right hon. Gentleman should take this opportunity of explaining his statement if, as I believe is the case, that is not his meaning.
I wish to point out that with regard to widows, with or without children, drawing incomes of from £150 to £200 a year and small people whose funds are invested to bring in from £150 to £200 a year, the proposal we are now discussing would have the effect of multiplying their tax by three. I do not think there is a single proposition in the whole Budget that is likely to cause any other class an increase so out of proportion in the taxation which they have to pay. I think the class to which I have referred is probably one which the Chancellor of the Exchequer has left out of account.
Amendment negatived.
I beg to move, in Sub-section (2), to leave out the words, "five hundred pounds, the tax upon one hundred pounds; and ( c ) in the case of individuals whose incomes exceed five hundred pounds and do not exceed"
This is not an important Amendment. It simply proposes to leave out three lines which are unnecessary and rather misleading. There is no differentiation between the classes with incomes of from £400 to £500 a year and those with between £500 and £600 a year. I do not press the Amendment, but it seems to me that it would be an improvement.
This is one of those unfortunate cases where a layman has to discourse on a legal point. It is not a question of the draftsman trying to carry out what has just been alleged to be the traditional practice of deceiving the House of Commons, nor is it a question of attempting to draw the Clause in one particular way. It is a question of the word "person" and the word "individual." It is another example of the difficulty in which we stand in connection with the Income Tax. It is another reason why the labours of the Committee which has been arranged by the late Attorney-General ought to be viewed with the greatest favour by this House. It is doubtful whether there is any difference in the question of relief between a person and an individual since the decision of the House of Lords in the case of Curtis and the Old Monkland Conservative Association. The Clause was drawn in this way in order to keep the wording of the Act in harmony with the Act of 1898 and the earlier Income Tax Acts. I fear the form must survive until we get a Consolidation Bill.
I have an Amendment on the Paper which would simplify the matter by making the Subsection read—
"In the case of persons whose incomes exceed £400 and do not exceed £600, the tax upon one hundred pounds,"
and then leave out Sub-section ( c ) altogether. If there is any difficulty in discriminating between a person and an individual, why should we not use both words and say "in the case of a person or individual"?
Amendment, by leave, withdrawn.
Question proposed, "That the Clause stand part of the Bill.
Having regard to what has been said by the hon. Member for Blackburn (Mr. Snowden), I should be sorry—and I am sure many of my hon. Friends would be sorry—to be party to giving the impression that the presence of those new taxes in the Finance Bill and their adoption without resistance by the House of Commons meant that the House of Commons regarded them as part of the permanent apparatus of taxation in this country. I should not be at all content, if it were not for the War, to vote in favour of the removal of these reliefs which our predecessors years ago adopted in view of the great disparity between the conditions of classes in this country. It is solely because we are at war and because the Chancellor of the Exchequer, after considering the whole matter, thinks that without undue hardship these additions may be made to the taxation of particular classes, that I personally do not resist the Motion that these additional taxes shall be imposed. But we have not a very systematic method of taxation; we have two somewhat inconsistent modes of distributing the public burden; and I can only hope, as these are burdens which we have to bear in an unprecedented measure, that just as heaven tempers the wind to the shorn lamb in circumstances with which we are familiar in literature, so the sense of patriotism may temper this class of taxation to the lambs who are about to be shorn and who are under the particular care of the hon. Member for Blackburn.
I wish to ask the Secretary to the Treasury two questions. First, has he made any estimate of the number of the new taxpayers who will be brought under the Income Tax Acts by the operation of this Clause? Secondly, in pursuance of that estimate, which I assume he has made, has he made any estimate of the number of new officials who will be required to put this Clause into operation? One of the main grounds on which I object to this Clause is this: We are at war, the country is very united, and I think it is a bad time to bring under this class of taxation a number of people who find it very hard to make ends meet. No matter how great may be the patriotism to which the right hon. Gentleman appeals, this imposition of new and strange taxes, particularly a tax like the Income Tax, which we all know is very irritating, accompanied, as the hon. Member for North-East Cork pointed out, by the filling up of very puzzling returns, will unquestionably create a great deal of irritation and annoyance. As soon as the Income Tax collector comes round, and the people get these forms, they will begin to inquire into the matter as they have never yet done. The amount of irritation and annoyance generated by the operation of this tax will more than counterbalance the additional revenue the Exchequer will gain.. I do not accept the view of the Chancellor of the Exchequer that it is justice to adopt this new system. I hope the Secretary to the Treasury will answer the questions I have put. I do not know whether there is any truth in the statement—I think it is most scandalous if true—in the "Times" as to the appointment of a number of new officials, graded from £l,000 a year downwards, at a time when many poor men with very small salaries—
made a remark which was inaudible in the Reporters' Gallery.
Then I will say no more about it. I have no doubt that new officials will be required, and I should like to know whether any estimate of the number has been made.
Will the right hon. Gentleman accept my invitation to explain the statement to which I referred? If it is relevant to do so, it is certainly expedient. Many Members have doubts on the point; the right hon. Gentleman knows what he means; will he be good enough to resolve those widely-spread doubts?
As it appears likely that Members will not have an opportunity of voting against this Clause, which carries the Income Tax forward to a new class and brings a large number of working men under the Income Tax provisions, I, as representing an industrial constituency, would not like to let the occasion pass without verbally registering my protest against this new departure. It must be clear to all who have thought about the matter that a large number of working men who, at present, in consequence of large families and high food prices, have very little to spare will be brought under the Income Tax Acts. I therefore enter my protest against the Clause.
I am told that in the Insurance Act persons with a certain income are allowed for Income Tax purposes to deduct their insurance payments, and that that deduction is not extended to the new class who are now being brought under the Income Tax system for the first time. I may be wrong, but if that be true—
was understood to dissent.
If the right hon. Gentleman says it is not so, I am satisfied. But would he say it audibly, so that it may be recorded in the OFFICIAL REPORT?
I will reply presently.
6.0 P.M.
I wish to protest against the form of Sub-sections (4) and (5). In each of these Sub-sections there is a reference to a previous Act of Parliament, and the substitution of figures. I think, particularly seeing that this Clause brings in a vast number of people who have never before paid Income Tax, that it is a most objectionable thing to complicate matters by reference to previous Acts of Parliament, instead of taking the trouble really to set out, where alterations are made, what the law is on these particular points. This is not the first time that protests have been made in Committee of the House against this method of drafting an Act of Parliament by reference to particular Acts. It is particularly objectionable in a Finance Act, and more than ever objectionable where a vast number of new people are going to be drawn in, that these complications should be added in this manner. It is quite inconsistent with the assurances we have received during the Debate upon this very Budget from the Chancellor of the Exchequer that some attempt should be made to co-ordinate the different Statutes, and to give us a reasonable and sensible effect of the whole lot. I sympathise very much with the hon. Gentleman below the Gangway, that in respect to the effect of this particular Clause there should be some statement printed upon the back of the tax-paper to explain what the law is to the new taxpayer. If the hon. Member or anybody else will draw up such a statement it will be a very convenient one to have, but I am afraid in the confusing state of taxation, when so many Acts of Parliament refer to the matter, such a statement will be almost impossible. I add, however, to this discussion my emphatic protest against this system of drawing up an Act of Parliament.
In reply to the hon. Member for East Mayo, I would say that under the provisions for ordinary assessment contained in this Bill we do not believe that the cost of collecting the new Income Tax would be relatively very large. It may, of course, require some new staff, but I do not think it will be a very serious matter.
made an observation which was inaudible in the Reporters' Gallery.
Yes, and in regard to the number of new taxpayers it is estimated that the number will be three-quarters of a million. In respect to what the hon. Member for Nottingham said, I should be very glad to take the opportunity of explaining what I really thought was more an arithmetical deduction than a statement of policy, but I am told by the Chairman that I shall be out of order. With regard to what the hon. Member for Liverpool said, I think a most valuable suggestion was made by one hon. Member that steps should be taken to make the new law perfectly clear. I promise to bring that suggestion before the Chancellor of the Exchequer and the Inland Revenue Department, with a view to seeing what steps it may be best to take, agree that legislation by reference is horrible, but, on the other hand, I do not think that the taxpayer will consult this Act, having regard to the state and confusion of the Income Tax law, in order to see how he stands. I fear, however, that the avoidance of legislation by reference is at the present moment impossible. In reference to the life insurance premiums—
Not that, but the premiums under the 9d. for 4d. Act.
There are no deductions, I think, for that.
The right hon. Gentleman evidently misunderstood me. I am told— I do not say I know—that there are deductions allowed to persons having incomes of, say, £160 a year, which are not carried on now that you are reducing that limit to £130. I suggest that the Government, before the Report stage, should look into that question and see if that statement is correct.
My recollection is—and I think I can speak with a considerable degree of confidence—that there will be no difference of any kind or amount between the premiums allowed to these new taxpayers and those allowed to the old.
It is not premiums at all.
Deductions for premiums! I will gladly look into that matter before the Report stage, and endeavour by correspondence, or in debate, to satisfy the hon. and learned Gentleman.
What about the question of earned and unearned small incomes?
I would suggest to the hon. and gallant Member that that criticism had better come in as a Motion to deal with the matter when earned incomes are considered. It does not apply so much at this stage.
On the question of abatement much has been said by previous speakers as to the injustice of the deduction limit as regards earned incomes. In the case of unearned incomes it is even less reasonable. The Chancellor of the Exchequer said he had not heard my point, but if the right hon. Gentleman is against me I can say no more, because it is no use bringing up a new Clause.
Question, "That the Clause stand part of the Bill," put, and agreed to.
CLAUSE 21.—(Charge of Schedule B Tax.)
(1) Sections twenty-six and twenty-seven of the Finance Act, 1896, shall, as respects Income Tax under Schedule B, have effect as if references to one-third of the annual value were references to the annual value.
(2) The election of a person occupying lands for the purpose of husbandry to be assessed under Schedule D may, in the current Income Tax year, be signified as provided by Section eighteen of the Customs and Inland Revenue Act, 1887, at any time before the seventh day of December in that year.
I beg to move, in Sub-section (1), after the word "effect" ["have effect as if references to one-third"], to insert the words, "except in the case of woodlands."
Perhaps the right hon. Gentleman will explain to the House the distinction that has been made between commercial timber and woodlands.
This is, I admit, a very difficult matter. But I do not think the Committee will be well advised to treat the matter in the way proposed by the hon. Baronet, and merely to include woodlands in the purview of the Clause. When woodlands are occupied by the owner who enjoys not only the amenities of the woods, but also the sporting rights, he pays under Schedule A as the owner of the woods, and, I understand, under Schedule B too. When the owner lets his woodlands as a whole—the woodlands themselves and the enjoyment of the sporting rights—he still pays under Schedule A, and the occupier pays under Schedule B. When the woodlands are occupied by the owner, who lets the sporting rights, the owner pays under Schedule A and B on the value of the land, exclusive of the sporting rights and under Schedule A—not Schedule B—on the sporting rents received: So that the woods under different categories have got to be treated very differently.
How about it when they have no sporting value?
When they have no sporting rights they are treated under Schedule A, but I am coming to commercial woodlands in a moment. I understand that when woods are used for commercial purposes, when you are dealing really with forestry undertakings, the woods are assessed as being in a natural or unimproved condition, and the assessment is very low. That is my information. But the Committee, I am perfectly certain, would be very reluctant to interfere in any way with wood, particularly now, and although I venture to think that woodlands used for enjoyment, and not for commercial purposes, ought not to be treated differently from any other land used for enjoyment, and not for commercial purposes, yet, when woodland is used with a view to cultivating wood and selling that wood, then I think we ought to make some special provision, and this is the suggestion I would throw out. The hon. Member for Windsor (Mr. James Mason) has got an Amendment on the Paper which comes very near to meeting the difficulties. But there is one difficulty that remains. I do not at present see how you are to assess the woods, which it is agreed are managed on a commercial basis under Schedule B. It might well be there might be a cutting of woods every ten years or some longer period, and that during the intervening time no profit is made out of this at all, and under this Amendment, if adopted, it might very well be that the owner of the wood would choose to be assessed under Schedule D in all the years when doing no cutting, and when doing the cutting come under Schedule A, and so escape with lighter taxation. I think a basis could be found. The Central Land Association, which organisation has assisted this House more than once in legislation dealing with land, has circularised Members of this House—at any rate, I have a copy of the circular pointing out these difficulties—and if hon. Members, between now and the Report stage, either through the Central Land Association or through deputation or other means, can arrange a basis of assessment, in order that we can arrange some average under Schedule B, then the Government would be very willing to recommend to the House the adoption of something like what the hon. Member proposes. But before we can do that we must try and see what basis of assessment can be adopted. Subject to that, I hope the hon. Baronet will withdraw the Amendment.
I think the right hon. Gentleman has certainly endeavoured to meet the view of the Committee, so far as he can at the present moment, and the matter is certainly a grave one in the case where the wood is occupied by the owner himself, where there are no sporting rights exercised, and where it is dealt with entirely on commercial principles. I have endeavoured to look into this matter myself, but, unfortunately, I have left the figures behind me, not realising we should have reached this point at this comparatively early hour. I know, and I am advised by the gentleman who acts as my agent at the present time, that in the case of land occupied by the owner where the sporting rights are not exercised or let, and where it is conducted on commercial principles, taxation under the Bill as it stands now will be raised over three or four times, or perhaps even more. I think where those conditions prevail, the matter certainly ought to be dealt with, and I think the right hon. Gentleman made a fair proposal when he suggested that a basis might be arrived at either through the means of the organisation he mentioned, or by other means. I think if that is done, and we are fairly met, it would probably be the best way out of the difficulty.
I raised this question previously, on the Resolution, and I am very grateful to the right hon. Gentleman for the consideration he has given to it since. I hope that before the Report stage some definite Amendment may be agreed upon, but I wish to remind him that in his summary of woodlands he has entirely omitted the form of woodlands which really prevail all through the southern counties where the underwood is cut in regular cycles of ten or twelve years. The right hon. Gentleman said the owner might escape taxation, but the fact is in underwood cutting there is cutting every year. The wood gradually matures, and some of it is cut in regular ten or twelve year cycles, and there is always, therefore, each year some income, though not a very large one. But this principle of cutting the cuttable underwood does prevail all through Kent and Sussex especially, and in old days, of course, was a very valuable agricultural industry. That is the particular form of woodland to which I especially wish to call attention. It is one that should be perfectly well met, I think, under Schedule D. I do not in the least ask that woodland which is kept for any amenity should be put in any favourable position, but practically the whole of the woodland in the southern counties is dealt with on commercial principles, and it is perfectly easy to meet.
I should like to give the right hon. Gentleman an instance for which I can speak, because it is my own case. I have a little over 200 acres of woodland. I am now taxed under Schedule A to the extent of something like £100 for that woodland. I am taxed under Schedule B for rather more than one-third of that, because there is also tithe on this woodland. If this tax were carried out as suggested in this Clause, I should practically have to pay Income Tax at 3s. 6d., having an income above the limit, on £250. That would be more than the gross value I get for the wood each year, putting aside all expenses, and, as I happen to be unfortunate enough to pay Super-tax, I should have again to pay under that tax the amount in connection with the woodland, so that practically it might be possible I should be paying in Income Tax something like three times the amount of the gross income I receive from the woodland. I do not think that could be a fair condition of things to place even upon those who can be said to be able to afford the additional tax. There is the fact that in the southern counties in old days the rateable value was a very considerable one, and assessment committees had very much recourse to underwood for their rates, and they very reluctantly put down their assessments. Notwithstanding Official Circulars, I have appealed in vain, and I have never been able to get mine down under 7s. per acre, which is a very considerable amount. Therefore these rates do affect our Income Tax, and Income Tax, if conducted under the principle of this Clause, would really bring great injustice to a very large number of people in the South of England. I would, therefore, most earnestly ask the right hon. Gentleman on the Report stage to bring some Amendment to put us in a better position than we stand under the Clause as at present.
The right hon. Gentleman stated that at this particular juncture we should not desire to do anything to retard forestry. I think at this particular juncture we should be very careful to see we do nothing to encourage the preservation of game, and there is no doubt whatever that a great deal of so-called woodland has very little commercial value for wood, but chiefly exists for the preservation of game. At a time like this, when we desire to extend the area under cultivation, when we are levying such taxation on necessaries of the people, it is entirely undesirable that it should go forth that necessaries are taxed, but the game preserves of the country landowner should be allowed to escape. The hon. Member who has just sat down mentioned the hard case of the class of woodland in the South of England, but I know there is a great deal of woodland in the South of England that has very little commercial value at all, and the sooner such taxation is levied upon it that it will cease to exist and can be utilised for farming purposes, the better it will be for the South of England and the rest of the country. These woodlands can be utilised for other purposes if the people are given an opportunity of doing so. All over the country you will find land utilised for farming purposes withdrawn from the purpose of game and so-called woodland, and the reduction of rates has taken place immediately; so I hope the right hon. Gentleman will resist any covert attempt to alter the system of taxation as suggested for the purpose of encouraging the preservation of game.
There is just one point I wish to put with regard to this proposal, and that is as to how it would affect osier beds. I have raised it once before and caused some little trouble on the Front Bench, and apologise for not giving them notice.
I might say the proposal is only made with a view of getting a declaration of policy from the Government. I do not intend to press it.
If that is so, I have nothing further to say.
I should like, if I may, to make a practical suggestion to the right hon. Gentleman as a method of dealing with this question of woodland. I do not think anybody in the House would require one word in reply to the speech of the hon. Member for Hanley (Mr. Outhwaite). We are dealing with a practical subject. Woodlands are assessed to Income Tax both under Schedule A and Schedule B upon the assessment in the Poor Kate, and in the Rating Act you will find that woodlands are distinguished in three classes—woodland which is used as a wood or plantation; land which is used for the growth of saleable underwood; and a composite woodland which is partly one and partly the other. Now, as I understand the right hon. Gentleman, he wishes to relieve the saleable underwood from the pressure of this tax, or, rather, to give the occupier of saleable underwood the option to prove his actual profits under Schedule D. If you accept that condition, you will be able to achieve your object without running the risk of a man in occupation of woodland or plantation evading payment by trying to reduce his profits under Schedule B. If you made the Clause apply to the occupier of land assessed as land for saleable underwood under the Rating Act of 1784, you would produce the required result, because the woodlands are rated gross and rateable value as if they were let and occupied in their bare natural unimproved value, whereas woodlands are estimated upon an estimate of the produce actually growing thereon. In the composite woodlands it rests with the assessment committee to rate it as woodland, or plantation, or saleable underwood. If you accept some such form of words as I have suggested you bring to bear on the question the practical local knowledge of the assessment committee and the committee rating for the poor rate, who know if they let land off they have to pay more poor rate, and consequently they will take very good care that the poor rate is assessed in the best way for themselves, and in that way you will be able to protect the revenue under the Income Tax.
I hope that the right hon. Gentleman will go rather carefully into this matter, and, if he intends to make any exemptions, see that they are made to those that are really and truly used for commercial purposes. He must be very careful about that. I have petitions from three boards of guardians in my Constituency, all complaining very strongly about the absurdly low assessments of woodlands when used for sporting purposes. It is perfectly grotesque at the present time, and these sporting woodlands are not paying their fair share of local charges, and under Schedule B they escape all Income Tax at the present time. Let me give some information with regard to sporting woodlands in my Constituency. In one parish there are 312 acres, previously rated at £144, which is a little less than 10s. per acre. I thought that sum was reasonable, but these people appealed; Quarter Sessions upheld the appeal, and consequently the assessment is reduced from £144 to £37, or about 1s. per acre. If the assessment is reduced to 1s. per acre, and they are paying Income Tax under Schedule B, they are paying at 4d. per acre. In the next parish 235 acres were previously assessed at £103.; the owners thought that too much and after an appeal got it reduced to £29. In the next parish 123 acres of sporting woodlands has been reduced from £51 to £13.
Is the hon. Gentleman speaking of rating for sporting rights or the rating of the woods?
I am speaking of the rating for the whole.
Will the hon. Gentleman give the figures for the rights and for the woods.
There are none.
There must be!
The hon. and learned Member is wrong, and that is why we are protesting. A meeting in my Constituency unanimously passed a resolution declaring that the manner of assessing woodlands and sporting rights is unjust and inequitable, and demanding legislation to amend the present rating law. Schedule B is based upon the value as it appears in the rate book. In the cases I have mentioned you have 670 acres of land, previously assessed at £298, now reduced to £79, and the whole of the poor rate produces only £7 18s. These sporting woodlands are not contributing anything to local rates, and therefore I implore the right hon. Gentleman not to let them off Income Tax altogether. Where the wood is used for commercial purposes we want to encourage the growth of timber, but I ask the right hon. Gentleman to be quite sure that the woodlands referred to by the right hon. Gentleman the Member for Ashford (Mr. L. Hardy) are not these sporting woodlands.
( indistinctly heard ): This is a matter which is of the greatest importance to the whole of Scotland, where land has unfortunately been diverted from commercial purposes to the preservation of game. By encouraging authorities to do what has been indicated you are not only encouraging a most desirable industry, but you are doing something which is of the greatest value to the population of Scotland. We have progressed to a certain extent in Scotland in this matter, but you cannot keep the small owner at work, unless you give—
This is not an occasion for a general discussion upon the merits of this question.
I hope the whole of this question will be carefully looked into by the Government.
I ask leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
I beg to move, at the end of Sub-section (1), to insert,
The "annual value" in Ireland for the purposes of the Income Tax under Schedule B shall be taken to be
Question, "That the proposed words be there inserted," put, and agreed to.
Question proposed, "That the Clause, as amended, stand part of the Bill."
I would like again to suggest to the right hon. Gentleman that he should do something for one particular class under this Clause. The Chancellor of the Exchequer has said he is very anxious that there should not be too heavy a burden put upon people suddenly in connection with this new taxation, and I think it is also generally laid down that this emergency Budget should not be made the opportunity for changing the general law. I am not now opposing the general application of the Clause to farmers, and I think we ought to give them the credit for having accepted this change really without a murmur; but I do think the small farmer has a very strong claim upon the right hon. Gentleman's consideration. If the hardship is great in the case of other people mentioned in the different scales which the right hon. Gentleman has given us, it is still greater in the case of small farmers paying rents of £200 and less. He first begins by having the basis of his Income Tax made threefold what is was before, and then he has to bear additional tax upon it. It is really a very serious matter to a small farmer who has to pay this enormous increase. The hardship is not made lighter by the argument used by the Financial Secretary to the Treasury. He said that it was desirable to make this change because it would be of enormous advantage to agriculturists when the subject of local taxation was eventually dealt with. I am afraid the day when that relief in local taxation which we have been so often promised has not been, perhaps, hastened by the War, and it may be a very long time before we can look forward to that just reform. It is a little hard that the farmer, in order that he may get relief at some future date from an injustice which is admitted should have to bear the burden of another form of taxation to a very large extent. I do not think the argument is an extremely good one, but I do not wish to press it, and I should like to ask the right hon. Gentleman whether he could not lessen the burden upon the small farmer, who will really find it an extremely heavy burden if the Clause is passed as it at present stands.
I agree with the right. hon. Gentleman most profoundly, when be dwells upon the reception which this Clause has received from those concerned. I have the honour and responsibility of sitting for a constituency which, I think, is more purely agricultural than almost any other constituency in the country, and I have not received from any single farmer of my Constituency of any party, great or small, any opposition to this Clause, although, undoubtedly, the result of it will be to increase his taxation very severely. We ought not to pass this Clause without recognising the patriotism with which the farmers have accepted this new burden, but I also feel that the Committee ought to make this change apply to all farmers, great and small. The small farmer pays a small rent, and therefore his assessment under Schedule B will be smaller than the Income Tax assessment. This Clause does not impose a change in rating, but only in the method of assessment, and, in my opinion, we are far nearer a correct method of taking the revenue than we were in taking one-third of the rental value. For that reason I venture to suggest that we should not consider any exception, but make the reform universally applicable to all farmers, great and small alike.
Question put, and agreed to.
CLAUSE 22—( Extension of Sale of Supertax )—ordered to stand part of the Bill.
CLAUSE 23.—(Extension of Relief in Respect of Children.)
Section seven of the Finance Act, 1914 (which extends the relief from Income Tax given in respect of children), shall have effect as if twenty-five pounds were substituted for twenty pounds.
I beg to move, after the word "Section," to insert,
"sixty-eight of the Finance (1909–10) Act, 1910 (which gives relief from Income Tax in respect of children), and Section."
The object of this and another Amendment down in my name is perfectly simple. It is to extend the relief now made in respect of children to include wives as well as children. The Debate on Clause 20 must have impressed the Committee with the hardship that is likely to be imposed on persons with small incomes just coming within the new provision, and if the Chancellor of the Exchequer would only show himself to be in a melting mood and make this little concession it would help to some extent to relieve the hardship. It will be a very considerable relief to persons who now for the first time become taxable under the Income Tax Acts, persons with £2 10s. and £3 per week, and I assure the Chancellor of the Exchequer if he will extend the concession so reasonably made with regard to children, necessitating expenditure in regard to education and so on, to include wives as well it will be much appreciated and will do something to reconcile a very large number to the new arrangements. I trust that I may have the favourable ear of the right hon. Gentleman, and that he will make this concession.
I gather that this Amendment is part of another Amendment and that the combined effect of the two Amendments would be to treat the wife as a child.
That is one way of putting it, but it is not my way.
I venture to submit that we had better confine this relief to children. To adopt my hon. Friend's suggestion would cost the State £1,000,000 a year, and it cannot be said that the wife imposes upon her husband the same obligation as his children. It cannot further be said if you once leave the safe category of children that you can be sure of knowing where to stop. Why should you treat wives differently from parents, and parents differently from brothers and sisters, who may or may not be dependent on the wage earner or taxpayer. It would make every concession dangerous and every concession liable to lead to costly and inquisitorial inquiry, but the formidable figure of £1,000,000 alone ought to give us pause. I would therefore suggest that this Amendment should be rejected.
I would like to add one word in support of my hon. Friend's Amendment. I can understand how the Financial Secretary is frightened at the idea of the cost of the wife, but I think he has put it unduly high when he says it would be £1,000,000 a year. I do not think that figures like that ought to be flung at the Committee without our getting some estimate. I very much doubt whether it would cost as much as £1,000,000 a year, and I should be glad if the right hon. Gentleman could give us some basis for that very large figure. I do not want to delay the Committee, which seems now to be in a very businesslike mood, but if the Chancellor of the Exchequer could see his way to tell us how far he intends to go to-night it might facilitate matters still more. If, at the same time, he could give us the basis for this estimate of £1,000,000, I for one should be glad.
I am very glad that my right hon. Friend has given me the opportunity of saying that we do not propose this evening to go beyond Clause 33. We do not propose to begin the discussion on the Excess Profits Tax. I understand an Amendment is to be placed on the Paper of a rather wider scope which would enable the opening discussion to partake rather of the nature of a general discussion, but I think it would be for the general convenience of the Committee if you, Sir, could indicate if such a discussion would be in order.
It is a little irregular to give a ruling in advance about an Amendment going to be put upon the Paper. The only ruling I have given up to now is that I cannot allow a Motion to leave out Sub-section (1) of a Clause to lead to a discussion of the whole Clause. That is an established rule of the House, but I believe means can be found by an early Amendment of the Clause to allow something which will bring up the question of the basis upon which the tax is to be imposed.
7.0 P.M.
I am sure that the Committee is very much obliged to you for informing them what, after all, is of very great importance to know—that we shall have an opportunity first thing to-morrow of taking a wider discussion than is customary on the principle of the excess profits tax. We do not therefore propose this evening to go beyond Clause 33. With regard to the estimate on which the £1,000,000 is calculated, my right hon. Friend will readily understand that we have our estimate of the number of assessments upon which now rebate is given, and if we add to that a further rebate we know, more or less, what is the total of assessments of that kind. The loss on the 2s. Income Tax will, in this case, be not less than £1,000,000.
Question, "That those words be there inserted," put, and negatived.
I beg to move, to leave out the words "twenty-five," and to insert instead thereof the word "thirty." I move this on behalf of my hon. and gallant Friend the Member for South Bucks (Captain Amery). I should like to associate myself with my hon. Friend in thanking the Chancellor of the Exchequer for having already made a concession by substituting £25 for the £20 which was the amount originally fixed. But in view of the heavy additional burdens due to increased Income Tax and the reduced abatement, which are inflicted on people with small incomes, I respectfully beg the right hon. Gentleman to consider whether he cannot go a little further and adopt my hon. Friend's Amendment.
My hon. Friend will recognise that another figure was put in by the Chancellor of the Exchequer at the desire of the hon. and gallant Member, and £25 was chosen rather than £30, because the right hon. Gentleman considered he would not be justified in going further. It is estimated that the extra £5 now asked for would cost double what the increase to £25 costs, which means a loss of £200,000 this year, £420,000 next year, and £490,000 after that. Under these circumstances I beg to suggest to my hon. Friend that he should, in view of the existing financial situation, be content with the concession already given.
I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
I beg next to move, on behalf of my hon. and gallant Friend, to add at the end of the Clause the words "and, for the purpose of this Section children dependent on the taxpayer and living under the same roof shall be reckoned as if they were the taxpayer's own children."
My hon. and gallant Friend has already stated to the House his views on this question, and I will only ask the right hon. Gentleman, therefore, whether he cannot give favourable consideration to this proposal.
If we departed from the stated conditions of relief in this matter it Would require the greatest possible inquiry, and it might lead to the creation of a system under which children might be hired out, and exemption would be then obtained by the person to whom they were lent and also by the person who hired them out because they were his own. In view of the difficulty of administration, if for no other reason, I hope this Amendment will not be pressed.
On behalf of my hon. and gallant Friend, I ask leave to withdraw this Amendment.
Amendment, by leave, withdrawn.
Question, "That the Clause stand part of the Bill," put, and agreed to.
CLAUSE 24.—(Quarterly Assessment and Charge of Employed Persons.)
(1) Employed persons to whom this Section applies shall be assessed and charged to Income Tax in respect of the remuneration arising from their employment in each quarter of the year instead of in the whole year, and shall in all cases (including those in which, but for this Section, those persons would be charged on an average amount) be assessed and charged on the actual amount of the remuneration for that quarter, and as respects any such assessment and charge and the collection of the tax the Income Tax Acts shall have effect as if Income Tax were charged for each quarter instead of for the year.
(2) This Section applies to any employed persons (including, in the case of a company or other body corporate, any director or person engaged in the management thereof), whatever may be the amount of their remuneration, except any class of employed persons who may be for the time being excluded from the operation of this Section by regulations made by the Commissioners of Inland Revenue for the purpose of carrying the provisions of this Act as to the assessment of employed persons into effect.
(3) This Section shall not have effect as respect the tax for the current Income Tax year.
The notice of Amendment on the Paper, in the name of the hon. Baronet the Member for the City of London (Sir F. Banbury) is not quite clear. It does not read.
I will propose the Amendment in an amended form, and I beg to move, in Sub-section (2), to leave out the words "(including in the case of a company, or other body corporate, any director or person engaged in the management thereof)." The Clause says that people who are employed shall be liable to tax, and that the tax shall be collected every three months. It also says that in the case of a company, or other body corporate, any director or person engaged in the management thereof shall be so taxed. My Amendment was not quite explicit enough as it appeared on the Paper, and I apologise for that fact. Its object is twofold. It is to save expense and trouble to the Treasury, and in that I take it I have the support of the right hon. Gentleman. Apparently, he does not quite understand my statement, and I may therefore point out to him that, if the Inland Revenue is to collect four times a year a tax which previously it has only collected once a year, from directors and managers of companies, it would involve additional work, which ought to be avoided in these days of economy and stress, when it is so desirable to lighten the work of the officials as far as possible. It seems to me the right hon. Gentleman proposes to increase work in this direction without any object. If, indeed, he can show any object, I shall be happy not to press my Amendment.
I can understand the desirability of the provision in the case of a working man who may not always be working for the same employer, or in the same place, but the director of a company can always be found, and, therefore, there can be no object in assessing him four times a year. Then, again, a person concerned in the management of a company is generally a responsible individual with a registered address, and he, too, can be found whenever required. The proposal gives, not only extra work to the Inland Revenue officials, but it also imposes upon directors and managers additional and quite un-necessary labour. Under these circumstances I hope my Amendment will be accepted.
I am under the impression that the second reason for this Amendment, which the hon. Baronet has disclosed to the Committee, is one which really relates to the next Clause rather than to this.
I gave two reasons. The first related to the trouble to the Treasury, and the second to the unnecessary trouble to the directors and managers.
We propose in this and the next Clause to introduce a system of quarterly assessment, and there has been a good deal of misunderstanding about it, which I shall hope to be able, at the proper time, to remove. We propose that that system of quarterly assessment shall be applied to all employed persons. In the case of the director or the manager of a company we have only included them, for the sake of uniformity, in the general rule. They would be defined, no doubt, as employed persons, but we do not propose that the directors shall pay Income Tax at any time at which he does not pay it now. At the present time the Income Tax is paid at the date when the remuneration is received, and I think as a general rule it is received every year.
Oh no!
They are quarterly payments as a rule.
I have heard three definite statements. One that the payment is yearly, another that it is half-yearly, and another that it is quarterly. There is clearly a divergence of opinion. But, at any rate, we do not propose to make any change as regards directors in the practice of deducting Income Tax from their fees. We have proposed a general change in the law with regard to quarterly assessments on all employed persons, and it is far better to make such a change general, and to cover all persons who are employed. I ask the Committee to make the change general and to accept my assurance that we do not propose to make any change except where it is convenient to the taxed person. In many cases it would be very convenient to an employed person to pay quarterly in order to be relieved from the burden of a heavy payment at a single time. The quarterly assessment is intended for the relief of the taxpayer and not as an additional burden. The taxpayer will not pay more or less; he will only pay at a more convenient time. We shall not make any change where it is not desired. But I think we ought to have the power to make the change so as to give relief where relief is needed. When I come to Clause 25 I shall be able to deal at greater length with our whole proposal as regards quarterly assessment.
I think the right hon. Gentleman will be able to make out a good case for quarterly payments by employed persons. But I also agree with the hon. Baronet behind me as to the position of the director of a company. In one sense surely the director stands in the place of the employer, and if the right hon. Gentleman will bear that in mind, of course then the director would be exempt. I think the Government will be able to give an excellent justification for the provisions of Clause 25. I also consider that Sub-section (1) of this Clause is all right. But it seems to me that the whole of Sub-section (2) is surplus age and unnecessary. In my experience it would be very inconvenient and perfectly uncalled for to apply this particular provision to directors. There are all sorts of directors; some are paid annually, some half-yearly, others quarterly, and in many cases they are paid monthly. Why should the right hon. Gentleman interfere with the management of companies? The operations of companies are often carried on in different places. The right hon. Gentleman has fallen into a false analogy. He compares directors, who stand in the position of employers, with employed persons. The director is really the head of the thing, and he stands in exactly the same position as an employer in a private firm, and as such he might very well be exempt. I may say that this Amendment is supported by the Chamber of Commerce of the City of London, and, generally speaking, by the chambers of commerce throughout the country.
I do not in the least object to accepting the Amendment. The words were only put in to give us power to do what a director might want to have done. I thought I had sufficiently explained that point.
Question, "That the words proposed to be left out stand part of the Clause," put, and negatived.
I beg to move, to leave out Sub-section (3).
I move this Amendment for the purpose of obtaining a statement from the Chancellor of the Exchequer upon one point. I think you, Sir, were in some doubt whether, if the Amendment were made, it would not add a tax upon some part of the community. It is a matter of some doubt, and if the Amendment were to do that, of course, it would be out of order, and I should not press it. I really want to understand the effect of the Sub-section. I will put a concrete case. Supposing a man is earning 5 guineas a week now, possibly owing to the fact of his being able to get employment during the War which he could not obtain before, and is therefore earning a larger remuneration than he did previously, he would not be liable to the Income Tax for the next two quarters, because this Sub-section says that the Clause shall not come into force for the current Income Tax year. After 5th April next what is to be done with regard to that man's Income Tax? Is it to be lost to the State, or will that man have to make a special return at some date next year, or this year? If this Clause came into force at once he would be assessed at the end of this quarter and again on the 5th April, and would have to pay the tax. If you leave the Sub-section in there will be no quarterly assessment or collection for the first quarter of the year, that is, 1st January to 31st March, and that would result in a loss to the Exchequer. If the system is a good one—I frankly say that at present I do not quite understand it—why should it not come into force on the 1st January, so that the first quarterly payment could be made on the 31st March or the 5th April? I put the Amendment forward with some diffidence, because I am not absolutely certain that I understand what the scheme is.
We put in this Sub-section in order that the operation of this Clause should only begin in a full year. Otherwise you might have overlapping. You might have the very case my hon. and learned Friend gave put forward as an argument in favour of this Sub-section, because if we did not have the Sub-section you might have deductions or an assessment in that particular case which would be most unjust. A man might be liable to Income Tax in an earlier part of the year, and he ought to be allowed in the last quarter of the year to be directly assessed. If we brought cases of that kind under this Clause during the currency of the Income Tax year, we might be doing the man an injustice. We propose that the reform proposed in Clause 24 should only begin to operate in the beginning of the new year. That is necessary to prevent overlapping.
Question, "That the words proposed to be left out stand part of the Clause," put, and agreed to.
Clause, as amended, ordered to stand part of the Bill.
CLAUSE 25.—(Supplemental Provisions as to Quarterly Assessment.)
(1) If any person fails to pay the amount of any Income Tax assessed and charged on him quarterly Under this Act within one month after a demand has been made for the tax in accordance with regulations made by the Commissioners of Inland Revenue under this Section, those Commissioners may cause notice to be served on any employer by whom the person from whom the tax is due is for the time being employed setting out the said facts, and directing that employer to pay over to the Commissioners, as the remuneration of the person employed becomes due, such proportion of that remuneration (not exceeding one-quarter thereof) as may be required by the notice until the amount due is satisfied.
The employer shall pay, in accordance with the notice of the Commissioners, any amount so directed to be paid, notwithstanding the provisions of any Act or any contract to the contrary, and that amount, if not paid, may be recovered as a debt due to His Majesty from the employer.
(2) Section twenty-one of the Finance Act, 1907, which relates to returns to be made by the employer, shall extend so as apply to all employed persons to whom the provisions of this Act as to quarterly assessment apply, and so as to enable returns to be required at such times and intervals as may be fixed by regulations made under this Section.
Where an employer is a body corporate, including a company, that body corporate shall be liable to a penalty for failure to deliver a return in pursuance of Section twenty-one of the Finance Act, 1907, as well as the secretary or other officer performing the duties of secretary of the body corporate.
(3) The assessment and charge of Income Tax in each quarter under this Act shall not affect the grant of any exemption, relief, or abatement which is dependent wholly or partially on total annual income; and any such exemption, relief, or abatement shall be given, in cases where the Income Tax is assessed and charged quarterly under this Act, as if the total remuneration on which the tax is charged and the total tax charged for the four quarters of the year were respectively the total income for the year from the remuneration and the total tax charged for the year in respect of the remuneration.
The Commissioners of Inland Revenue may, however, if they think fit in any case, in accordance with regulations made by them under this Section, allow any such exemption, relief, or abatement by way of reduction of the quarterly assessment or repayment of the quarterly tax.
(4) The Commissioners of Inland Revenue may make regulations generally with respect to the assessment and collection of Income Tax in the case of employed persons, and with respect to the procedure to be adopted for the purpose, and may in particular by those regulations provide for the assessment of the tax by the surveyor of taxes and for the collection of the tax by a collector appointed by them, and for the application to the tax of the rules and provisions applicable to Schedule E in cases where those rules and provisions are not otherwise applicable, and also for the appointment, in cases where the Commissioners of Inland Revenue think it necessary for the purpose of expediting the hearing of appeals, of persons to sit as, and having the powers of, General Commissioners with respect to appeals.
I beg to move, to leave out Sub-section (1).
I move this Amendment in order to get rid of the most objectionable principle of imposing upon employers the duty of collecting this tax, and I venture to hope that I shall receive the considered attention of the Chancellor of the Exchequer. In the first place, a month is given to the Commissioners to collect the tax. They serve a notice on the employer to deduct it from the wages, and to hand over the amount to the Commissioners. It is quite true that in the Insurance Act a start has been made in deducting from wages the amount required to pay for the stamps, but this is a much larger question, because in this case they will have to deduct a certain proportion of the remuneration, not exceeding one-fourth of the amount which may be required until the notice is satisfied. One-fourth of the wages is a considerable amount, and there is no question whatever that the deduction of so large an amount will create trouble between employers and employed. I do not understand how it is that the right hon. Gentleman is so ready to commit a breach of the Truck Act. He is telling employers now to deduct amounts from wages. If a man gets an attachment against him in the County Court there is no attachment of wages. If a man gets a maintenance order against him in the Police Court there is no attachment of wages in order to obtain payment. Here you are going to garnishee a man's wages until he has paid this tax. That is a most objectionable provision. How are you going to do it? You inform the employer that he is to deduct so much from the wages. What will happen if the man does not remain in the situation? The moment he gets this reduction he will begin to consider how he can remove his situation, and get to a place where the attachment will not follow him. I have it on the authority of shipowners on the East Coast that many seamen are now receiving £3 per week in wages. They will come under this tax. When you give notice to the shipowner to pay the tax out of the wages, what certainty have you that the man will remain in a particular ship, and will not at once transfer his services somewhere else.
In these days there is so much trouble with regard to labour and getting men to remain. The first thing that would happen when you attach a man's wages for the payment of this tax is that he will give notice to leave his employment and go elsewhere. I do not see you are going to keep in with them. There is so much suspicion between employers and employed at the present moment. If there had been any Labour Members here—I do not see any—I would have asked whether they did not think that this attachment of wages would increase the friction that exists between employers and employed. I will illustrate the suspicion that exists by the case of a savings bank lately having been started in a large works. Did any money come in? No, because the men, when asked, said that the employer was going to get a bit out of it. In the same way, when the War Loan was issued, I can vouch for 13,000 workmen with high wages to whom every facility was offered, that as they were paid their wages they could go into another office and obtain a War Loan voucher of 5s. Did they accept it? No. I think that by the 13,000 workmen only £20 was subscribed, principally by the staff at the works. The reason given was that they suspected that the employer was going to make a bit out of it. With that feeling undoubtedly existing in the country, here you are going to make the employer the bum bailiff for the Government to collect the tax, and you are going to make him attach the wages and deduct the amount. That is going to add to our troubles and friction.
I am largely engaged with labour, and I know that our people say that this will create difficulties, that feelings will arise and that it will shift the men and turn them out of their employment. It is a hard thing to say, but undoubtedly there is a general feeling that, when the War is over the difficulties between capital and labour will be so great that they will be likely to lead to a revolution. Yet you are going to add to this friction the obligation on the employer to collect the tax. There must be some better method. It is very easy for the Chancellor of the Exchequer and the Commissioners to say, "Let the employer have the job. It does not matter what the feeling is between the employer and the employed, it is a very easy system for us." That is not government. What you have to do is to make the people satisfied. You do not make them satisfied in this way. If you adopt a system of stamps that will bring some trouble. There is already an illustration of that in the Insurance stamps. That might not be felt so much, although that, to my mind, would be rather objectionable. The Secretary to the Treasury informed us that about 750,000 men would come under this Clause. I do not think that it ought to be beyond the capacity of collectors of taxes to get the money in without putting the work on the employers. At any rate, I do protest most strongly against the Clause putting it on the employers, and I have a general authority from employers to say so. I do not see how it is to be done. If it is done I am sure it will enormously increase the trouble, suspicion, and jealousy which unfortunately exist too much at present, and which are hampering us in the efforts which are required at the present moment. We do not want strife, but the first thing which will happen when a man has 9s. taken off his wages will be that he will go round and get up a meeting and there will be a strike. We are all having strikes at present. We never know, when we hear from our employés, whether it is to be an extra demand for wages or a strike in some quarter or another. You are going to add to the question of strikes. These men will have to pay 9s. and they will want it back at once. They will not wait. You are doing a most dangerous thing, and I appeal to the Chancellor of the Exchequer to find some other method of collecting the taxes.
The point has been put to me as to whether this is in conflict with the decision which I gave a few minutes ago as to it not being in order to leave out Sub-section (1). Perhaps I had better explain to the Committee that the only reason why this is in order in this case is that the Clause contains two propositions, the second of which would stand by itself if the first were deleted. That is the reason why this is now in order.
I hope my right hon. Friend may be able to listen to the argument of the hon. Gentleman. Deductions from wages are most objectionable. Deduction on account of Income Tax will be about the most objectionable duty the Government could ask employers to perform. The duty is to be imposed on a new class of taxpayers, who are not accustomed to pay the tax, and who are pretty certain to dispute their being correctly assessed on their first note. Probably every demand will be the matter of an honest dispute between the man and the collector. Then, although the man still thinks he is in the right, the collector sends in his note to the employer, and it becomes obligatory upon him to make the deduction. I hope my right hon. Friend will be able to withdraw this altogether. The duty of employers nowadays is difficult enough. This is a most invidious thing to ask us to undertake. I think there is a great deal of force in the arguments that we have presented and I hope my right hon. Friend may be able to meet us.
This Amendment illustrates one of the difficulties with which the Chancellor of the Exchequer is always confronted in framing any scheme. I have had represented to me, by public deputations of large and important bodies, by representatives of individual trades, and privately by a very large number of people, that if this Income Tax is to be made effective it ought to be collected by the employer by deduction from the wages. I have strenuously opposed that. I have always maintained that there will be no more certain source of friction between employer and workman and no more unfair burden cast upon the employer in the calculation of the infinite variety of rates of Income Tax which you will have to charge than by the adoption of such a system. I have strenuously opposed it, in spite of being told by employers that it is the only proper way to act. Now, instead of that system, we have adopted the principle of direct assessment, and we propose that the State authorities shall charge upon themselves, and not cast upon the employer, the whole burden of assessment, which is not a light burden in these cases, and primarily of collecting. Then we have to face the question, what would be the best method of enforcing collection in those rare cases in which taxpayers would refuse to pay. There are only two alternatives: payment by deduction at the source—that is to say, by the employer—which is the ordinary case generally adopted in regard to employed persons; or procedure in the Courts. There is no other method. I came to the conclusion that far the most merciful method, to the workman at any rate, was to obtain the amount, which will never be a large amount, of the quarterly assessment by deduction rather than by expensive procedure in the Law Courts. That is the view that recommends itself to me, and I hope that on consideration it will recommend itself to the majority of the Committee. We want, too, in collecting this new tax—because it is a new tax—on the one hand to make it a reality and on the other not to make it oppressive. My hon. Friend (Sir W. Pearce) stated that in many cases the workman would not pay because he would be ignorant of his liability, and there would be a genuine disagreement between him and the taxing authorities. But he has the right to appeal against the assessment.
To whom?
I want to make the whole of this machinery very simple and direct, but that will come on a subsequent Amendment. I want to make the whole of the machinery suitable for this kind of work, but I will deal with that later. The workman will have an appeal, and I hope an immediate appeal, upon the question of assessment. The Committee must make up its mind whether they mean this to be a real quarterly assessment, because quarterly assessment is the only condition under which a tax of this kind could be paid. Do they mean that the State shall really get the money? If they do, the only question is whether, where he is in default, the taxpayer shall be charged the tax by deduction, as in the case of most employed persons, or whether he is to be brought into the County Court. I hope the much quicker, much less expensive and much, more merciful method to the taxpayer will be adopted, because in these cases there can be no defence, of obtaining the money by deduction.
Does the right hon. Gentleman say it is usual to make deductions at the source, because I do not think it is?
In a great many cases it is, by arrangement. It is very usual by arrangement to deduct at the source.
Not in ordinary commercial businesses.
In commercial businesses under Schedule E it is deducted at the source. My Income Tax, and that of all Government employés, is deducted at the source. It is not a new principle. This is a matter of very great thought and selection between alternative methods. I was at first opposed to the far more stringent method which was recommended to me very strongly, both by Members of this House and of the other House, and by employers, of using the employer to assess and collect the tax. I think this method is, on the whole, the best to adopt as being in the long run most merciful to the taxpayer.
I was very much disappointed with the statement of the right hon. Gentleman, because I raised this question of deduction immediately after his first speech on this Bill, and from the hearty dissent which he gave to my question as to whether this would be put upon the employer I gathered that we were safe from any such Clause as this. I now understand that his dissent only applied to the direct form of assessment. But I think this form which he suggests in this Clause is even worse than the original idea of dealing with it by stamp or otherwise. In this case he said there are other alternatives—either deduction or penal action. But in this case you bring the penal action against the employer and not against the person who fails to pay the tax, and that seems to me to be an extension of the principle of deduction which has certainly never been heard of before. The tax collector generally gets some reward for collecting the taxes. In this case the employer is to be put into the County Court in order that the amount may be recovered as a debt due to His Majesty from the employer. It seems to me a new extension of tax collecting which can hardly be popular in the country. There is another matter. In these days the link between employer and employé is rather frail. There are great inducements to employés of special merit to go elsewhere, and I can conceive no more embarrassing position than that of an employer who is asked to deduct a quarter of his wages from a skilled man whom he can very ill afford to lose in the business he is carrying on. In that case it seems to me almost inevitable that the contribution will be transferred from the employé to the employer, and he will practically have to pay the tax in order that he may retain the servant whose services he values. It introduces so many points which have always been contested between employer and employé, and at this moment, when we know the difficulties there are between capital and labour, the difficulty of keeping labourers, and the objection to making the employer the penalised person, that I think there is very good ground for asking the right hon. Gentleman to reconsider the question. It is not a desirable precedent. It will inevitably bring trouble, and I hope he will adopt the better and straighter course of dealing directly with the taxpayer.
I must join in the general feeling that it is very objectionable for this duty to be imposed upon the employer of collecting Income Tax. If it is to be done by the employer I consider it is very much better that it should be done in the shape of a poundage each week, deducted from the man's wages. So far as the coal trade is concerned, the miners in South Wales are accustomed to that mode of procedure. For years it was the custom, at the request of the men, to deduct weekly 2d. in the £ from their wages to pay for the doctor. Practically the men never felt it. Perhaps it was in contravention of the Truck Act, but, at any rate, it was done at the request of the men and the miners' leaders and with the knowledge of the Home Office. It always worked smoothly. The men did not feel this amount deducted in that way. At the end of a quarter, however, the amount looms very much larger than a weekly sum does. There is this to be said in favour of the weekly poundage system, that the man knows exactly what he has to pay. He knows what his wage is and that the deduction is so much in the £, and, therefore, there is no dispute as to what be has to pay. On the other hand, under the much more complicated system which is proposed to set up by this Clause, there will be dispute and friction. I hope the Chancellor of the Exchequer will see his way to alter his proposals and to adopt the poundage system instead of the system proposed in the Bill.
When the right hon. Gentleman explained his financial proposals earlier in the Session, I ventured to suggest that any procedure by which he expected to get in a lump sum in payment of Income Tax from men earning weekly wages would probably cause a good deal of friction. I cannot help thinking that the right hon. Gentleman has put himself in the way of getting this friction four times a year by the present proposal, and not merely getting this friction four times a year between himself and the workman who earns the wages, but friction between the earner of the wages and his employers four times a year. Sympathising as I do with the desire and the readiness of all classes in the country to contribute, according to their means, to the great burdens which are put upon us by the War, I feel that it would be a calamity if we adopt a mode of collecting these taxes which raises causes of friction which do not exist at the present time, and which not only raises possible friction between the Exchequer and the taxpayer, but raises friction or threatens to raise friction between the taxpayer and the employer. After all, the employer has troubles enough of his own without multiplying them by taking upon himself one of the most invidious things that has ever been known, and that is, the office of tax collector. I would suggest to the right hon. Gentleman whether it might not be possible, difficult as it will be to collect this tax, to ease the difficulty by having a fixed poundage and requiring by Statute that that poundage should be collected week by week, or whenever the wages are paid. The hon. Member below the Gangway (Sir C. Cory), speaking with his great knowledge of the coal mining industry, has said, and we know it is a fact, that there is not very great difficulty in collecting sums where there is a readiness to submit to deduction. There is no great difficulty in collecting them when the man knows the amount that is to be collected and he approves of it. We know that no body is more resolute in the prosecution of this War than the whole body of the working classes. No body has submitted more cheerfully to sacrifices than the working classes, sacrifices of a much more serious kind than a deduction from their weekly wages; but when once a quarter the man who has not been accustomed to be taxed is suddenly going to be taxed at the pay table and by his employer in effect—
made a remark which was inaudible in the Reporters' Gallery.
I know the right hon. Gentleman regards that as a parody of the proposal, but at any rate it seems to me that that is the effect of the proposal. The man will be assessed—and we are going to discuss the matter of assessment—and it will be the duty of the employer to collect the tax from his wages. I confess that the difficulty I feel about this first part of the Clause is aggravated by the difficulty I feel about the second part of the Clause. If you are going to have a man assessed without any real appeal, or even with a real appeal, by the Exchequer, and then you are going to have him brought to the wages table, and to have pressure put upon him at the wages table, I fear it will cause difficulties which the right hon. Gentleman does not apprehend. I hope the right hon. Gentleman will not think that I am making a speech for the purpose of putting any difficulties in his way. We must look at this matter in regard to its effect in the country, and I cannot help thinking that the right hon. Gentleman would do well to have regard to the representations of employers of labour, who know where the shoe pinches, and also to the views of Members of the Labour party in the House, who also know how this method of taxation is likely to be received. I hope that between this and the Report stage we may get a proposal which is not regarded so widely as likely to cause friction. It may be that the right hon. Gentleman will think it worth while to reconsider the question, and whether the line of least resistance would not be the line of the weekly collection.
I do not know whether the Chancellor of the Exchequer has consulted the representatives of labour in connection with this matter. I am rather inclined to think that he has not. I would like to support the appeal made by my right hon. Friend (Mr. Duke), and to suggest that he should call a conference of representatives of the working men and the employers, in order to see if some scheme can be devised whereby we can get over the difficulty. There is going to be immense difficulty in connection with the matter. I can see that. Even if it is a poundage system, and the tax is paid weekly, the difficulty will arise whether a man who may be earing good wages during the two middle quarters of the year should come within this tax or not. That will want consideration. I am inclined to think that the Chancellor of the Exchequer is putting too high an estimate on the amount he is going to receive from this tax. He is basing his estimate, I fancy, on the wages that are being paid now. The men who are working at seasonable trades, whilst earning big wages during the six months in the middle of the year, earn low wages in the first and last quarters of the year. Therefore, there will be a considerable amount of refunding when this is collected, and there will be appeals. I do support the suggestion made that between now and the Report stage the right hon. Gentleman should consult the people who are directly affected. So far as the tax is concerned I have not heard any complaints whatever from working men, but if it is to be taken quarterly we shall have complaints. If it is taken from men who think they ought not to pay the tax I am afraid there will be something like a sympathetic strike in connection with the matter. For instance, if the men think that one of their number has been unjustly dealt with by the employers the result will be a down-tools policy. I would urge the right hon. Gentleman to take warning from the working of the Munitions Act, and if he takes that warning he will consult the people themselves and see if some amicable arrangement cannot be come to.
I cannot see why the Chancellor of the Exchequer wants to bring the employers into what will be an element of friction and difficulty. Why cannot he proceed in the ordinary way in which he proceeds against any other person for default, by process of law? The right hon. Gentleman said it would be more merciful to the taxpayer if the employer is interposed to collect this tax. It would be very much more awkward for the employer. There is nothing that will be more likely to cause bad feeling between the workmen and the employers than the making of these deductions from the wages, deductions which the workmen do not understand, and in connection with which they may imagine that the employer is by some mysterious way getting a benefit. The workmen are not good accountants, and they do not readily understand calculations, but they may have the idea that the employer is mak- ing a bit on his own out of the tax. No more unfortunate thing could happen, particularly at the present time. There is always a tendency, which has been seen under the Insurance Act, of those deductions being added to wages. What the right hon. Gentleman ought to do is not to adopt a complicated system of weekly contributions, but simply to proceed in eases of default through the County Court in the ordinary way. That, it seems to me, is the right way to proceed. It shows the workman that he is being dealt with by the State and that his employer has nothing whatever to do with the tax. The cases probably will be very few, and I am perfectly certain that the proposal I make will in the long run be more beneficial and probably more economical than the course suggested in the Bill.
8.0 P.M.
I want to express the hope that the Chancellor of the Exchequer has not said his last word on this matter. I hope that however much consideration he may have given to the question he will give it a little more. The question that first arises to my mind in considering this tax is this: Is it not a reflection upon the workers, because it gives a suggestion that the employés will not be willing to pay this tax. I, as a working man, and knowing the working classes, more particularly miners in the Midlands, have no reason whatever to think that the employés will be behind other classes in the payment of this tax. I was very astonished to hear the Chancellor of the Exchequer say that the employers had suggested that this course should be pursued. He did not mention any particular employers nor did he mention employers in a particular place. Certainly, I think they would not be the colliery owners of the Midlands who would suggest that he should take this course. I know that the coal owners of the Midlands, whatever they may do in South Wales, are very strongly opposed to making deductions from wages and that the workers are still more strongly opposed to deductions being made. I do rot think that the miners of the Midlands are more opposed to anything than they are to deductions from wages at the pay office. Even when their own organisation suggests to the employers that a deduction shall be made for a very worthy and noble object, such, for instance, as 1d. per week towards providing the money necessary for the upkeep of the motor ambulance con- voy—I can conceive no more noble object than that—we meet with considerable opposition from our own members, because they are opposed in principle to any deductions being made from their wages at the pay office. I can see endless trouble in the effort to enforce this method of collection. A month's grace is allowed, but we do not know where a man may get to in a month. I know this, that even to-day the authorities cannot trace men. Men for one reason or another leave their employment, they leave the district, and the law is put into operation, but the law cannot trace these men. I can quite see that there will be endless difficulty, endless struggle, and endless friction if the Chancellor of the Exchequer persists in his efforts to collect taxes in this way. I would like to support the suggestion made by a Member of the Labour party who has already spoken, that the Chancellor of the Exchequer should, if possible, get the trade-union leaders and the employers of labour together and take their opinion upon this matter. I think he will find that they are not only very probably opposed to this form of deduction, but that he will have suggestions made which would enable him to deal with this matter in a much better way than that which is suggested in this Bill.
I hope sincerely that the Chancellor of the Exchequer will not persevere in this proposition. I agree with the last speaker that there is no other course which would cause so much friction and embitter so greatly the relations of employers and employés as the carrying out of this procedure. I do not think that anyone who has not had practical acquaintance with working people could at all imagine the complications that would arise. It would certainly be against the interests of the trade of the country to introduce this system. It would embitter the relations between masters and men, and we have enough to do at the present time to keep things straight. I think that the proposal made that employers and employés should meet together and try to arrive at some scheme which would be without this drawback is a good one which is certainly worth a trial. Deductions from wages are looked upon with very great antagonism by the men. It raises a barrier between one section and another. You cannot remove that barrier when it is raised. Someone has said in the course of this discussion that this would amount to a very small matter. This cannot be said in cases where working men are getting £5, £6, £7 or £8 a week, and their contributions in the course of three months would amount to from £10 to £15. That is not a small matter as far as the working man is concerned, and in many cases you will find it somewhat difficult to get that amount from a man who is perhaps a spendthrift, and it would be laid upon the employer to pay the money. Why it should be laid upon the employer I do not see for one moment. I am very sorry that this has been introduced. I think that this is one of the most important Clauses in the Bill as regards upsetting the relations in works between masters and men. I sincerely hope that the Chancellor will see some other way—and I believe there are other ways—out of this difficulty. I think that we can leave it to him in the next few days to see if something cannot be done. I certainly think that the workmen will be against the principle, and I think that masters and men working together might evolve some principle which would be much better than this.
I am glad to accept the suggestion that has been made from both sides of the House that I should endeavour to obtain the views of representatives both of employers and of workmen as to what would be the best method of enforcing the tax in what I believe would be the rare cases in which it was not paid in the first instance. I should like to say that I have not had a single objection raised by workmen to the proposal that they should be included in the tax. It is only fair that that should be stated. It is a mere question of machinery how to enforce the Act in reference to persons who are willing to pay. I am glad to fall in with the suggestion that has been made. There is one observation with regard to the poundage question—the payment of Income Tax by deduction from wages. I would ask my hon. Friends who favour that system whether they have considered certain typical disadvantages. If the poundage is a flat rate in the £ it means that you are going to charge the same rate of Income Tax upon the man earning £l a week who is now exempt, and upon the man earning £7 a week. It would mean also that you would give no abatement for children and no abatement for insurance. If you had the Income Tax raised at the level which was appropriate to a man earning £6 a week it would be absolutely impossible to be paid by the man earning £1 a week. If you put the poundage at the level proportionate to the man earning £l a week it becomes ridiculous in the case of the man earning £7 a week. It will be seen that a mere poundage deduction is practically impossible. This question has been very fully considered in a very full Committee at the Treasury three times. In every case the Committee has started almost unanimously in favour of the poundage system, and in every case the Committee has ended with this proposal.
I want to try to help the right hon. Gentleman to make up his mind in this matter. It so happens that I know the feeling in my Constituency with regard to deduction from wages. I remember in 1912 when the present Prime Minister came down to my Constituency and told the people of the lowering of the Income Tax limit and hinted that the tax would be deducted from the wages they were very furious. The workers are willing to pay Income Tax. They are proud for the first time to be Income Tax payers, and to be able to contribute towards the cost of this War, and I do say that all the Income Tax payers ought to be placed upon the same basis and that these people should not be treated as a class separate from the other Income Tax payers. The right hon. Gentleman ought not to treat them differently from other Income Tax payers. Of course his plan is effective, I admit, but it is extremely unpopular, and I am quite sure that the assurance which he has given us that he will thrash out the matter is enough; but I just want to point out that in a very large industrial constituency the deduction from wages is most unpopular.
May I ask the Chancellor of the Exchequer, before withdrawing the Amendment, if we have a promise from him that he will have a conference of representatives both of workmen and employers on this matter?
Yes, I propose to have a conference immediately, before the Report stage, to endeavour to come to some agreement as to what form of procedure shall be adopted.
With that promise I withdraw my Amendment.
I object to the Amendment being withdrawn. Hon. Members may wish to speak on it, and I see no reason why a private Member should be able to prevent them.
I desire to protest strongly against the proposal of the Chancellor that this charge should be deducted by employers from the wages of the men. I have a distinct recollection of what happened in reference to the weekly charge under the Insurance Act, and I do not want to have a repetition of the differences which arose and which will arise again in a very clamant form if an attempt is made to levy the Income Tax at the source in that way. I do hope that the right hon. Gentleman will see that the great merit of his tax is that it is being made by him a direct charge, and I hope that it will continue so. I object very strongly to the suggestion that the employer should be made liable for the amount due by the employé where the man refuses to pay or fails to pay. I think that it is an impossible proposal and one that is very unfair to the employer. I am sure that a much simpler method could be arrived at. In Scotland there is no difficulty whatever in collecting rates or small accounts, from people who refuse to pay, by a very ordinary method of which I am sure the hon. Member for Fife is very well aware, and which could be applied in this case. I hope that the right hon. Gentleman may be pleased to consider something of this kind as an alternative.
I gather that there is no objection as to the merits of this tax. The whole difference is as to what would be the best way of collecting it without friction to anybody. I submit that there are two people primarily involved in the proposal of the Government. There is a certain responsibility thrown upon the employer. It has been pointed out by numerous employers that it would be a hardship upon the employer, that there would be various objections to it by them, and that it might lead to friction. It has also been pointed out, and I agree entirely, that there is nothing which makes the workman more suspicious than to have deductions from his wages, and the best evidence of that is not so much the Insurance Act provident side, what we call Part I., but Part II., under which the employer, by an unfortunate decision, was compelled to deduct when men were paid out of revenue, and not compelled to deduct when they were paid out of capital. The ordinary workman would not appreciate the difference between capital and revenue. All that he knew was that his 2½d. was being stopped. The result was that there was endless friction. That certainly ought to be avoided in this case. I am not going to be so optimistic as some people in saying that working men are going to jump at this, because if they do they will be doing something different from any other class of the community, and the best test of this would be when the first deductions take place. I think that it is much better to reserve our judgment on that point. But in the meantime everyone has got to bear some burden in this great War. I understand that the Chancellor's one object in his present proposal is to try to make this burden as easy as possible to the worker.
indicated assent.
But in doing that you must not throw suspicion upon the worker, because what will happen will be that the deductions will be made not on one man, but on a large number of men, and because of the ending of the quarter probably you will have to deduct more than the total earnings for that particular week. That will probably happen in one particular industry. I submit that that must lead to friction, and I hope that the suggestion that has been made as to the meeting of employers and employés will be adopted and will lead to some satisfactory result.
I would be the last to rise in order to continue the Debate and to avoid the opportunity of accepting the suggesting made by the Chancellor of the Exchequer, but some of us, and I certainly, like many Members who represent large numbers of working men, resent the idea that there is going to be any feeling at all on the part of working men in regard to accepting direct liability to the tax, or that they would have the tax deducted from their wages as a whole. When ninety-nine out of 100 would gladly pay the tax directly, there is no necessity whatever for any deduction of any sort or kind.
That is the Bill.
Quite so; but it is a question of the power which is taken. Speaking on behalf of working men and a great number of others both in Leaming to and Warwick, I say that it is quite certain they accept direct liability, and that they will willingly and loyally pay the Income Tax just like anybody else, whether called upon to pay a larger sum or a smaller sum. When the Chancellor of the Exchequer proposed taxation upon men with small incomes, I believe they responded very readily. The plan of deduction from wages might, it is said, mean, in cases where there is a feeling against deduction, a strike for an advance of wages from the employer. For myself, I do not think that will arise. I believe that this tax will be met by those who are liable to it in a patriotic and right and proper spirit. I am not certain that it is at all necessary to have any such power as this. But we shall find out, when a meeting takes place between employers and employed and the Chancellor of the Exchequer, if any such power or any remnant of it is necessary. You can safeguard the interests of both sides by accepting some such Amendment as appears on the Paper in the name of the hon. Member for Lime-house, who would limit the power of the Crown to obtain any such deduction to a case where they have obtained a magistrate's order, or it might be a County Court judge's order, for that purpose. I suggest, in the interest of working men, that the power proposed to be taken is far too great. If any power of deduction is required it ought to be after some proceedings have been taken against those who have failed to pay, and you ought not take a sweeping power to deduct the tax from wages in the case of great numbers of men who would resent the deduction, and in whose case, also, it would be quite unnecessary, as they would be perfectly prepared to pay readily and directly.
I am not going to discuss the merits of the question, but only to make a suggestion. It is said that the deduction from wages will be resented by working men. That may be true in the Midlands, but it a very popular practice amongst the working men in Wales. My suggestion to the Chancellor of the Exchequer would be that in the proposed conference which is to take place between the employers and employés and himself, they should consider the case of those workmen who desire that deduction should be made from their wages as a most convenient and easy way of paying the tax. Such workmen should be given the option of having the Income Tax deducted from their wages, and it will be found, if that be adopted, that it will be regarded as a very practical and convenient method of meeting the tax by many thousands of working men with whom I am familiar in the coal mines of Wales. In regard to the suggestion that some of the employers should be penalised because some of his workmen would not pay the tax, I think such a suggestion is an outrage, whoever is responsible for it. [Mr. MCKENNA made an observation which was inaudible in the Reporters' Gallery.] At all events, whether that is so or not, I do beg the Chancellor of the Exchequer not to turn down the consideration of these particular workers and societies, who wish for the option of having the tax paid by deductions.
There are one or two phases of this matter that neither the Chancellor of the Exchequer nor anyone who has yet spoken has taken into view, and it is that if you make any kind of arrangement between employers or working men for a deduction of this tax, in important cases you will be unable to carry it out.
If it is a voluntary arrangement you could carry it out.
It is utterly impossible to carry it out in some employments. I think the Chancellor of the Exchequer must have a pretty wide knowledge of the operation of the National Insurance Act, and how it was found impossible in some cases to work the provision whereby the employer is to deduct the man's contribution from his wages and pay it over. Arrangements had to be made to get over the difficulty. I submit that the same thing would occur in this instance. I have been asked, "Why talk about this kind of machinery at all; is not a working man as good as any other civilian in the land?" Have you forgotten that this House in its wisdom or otherwise, about twenty years ago—I forget the exact date—passed a Finance Act making everyone liable who had £100 income? There was no special arrangement made on that occasion, and the assessment was made and demand issued to those with incomes of £100 just as to anyone else. It did not last more than one or two years, but there you have a case in point. What is the case now? The man who has an income of £130 a year is exempt, and he is, also, allowed exemption in respect of each child up to £25. That of course brings the figure up very much higher. Personally it is my view, and I am not speaking for my Friends, that there should be no difference in this Finance Act in making the tax applicable to all alike, and neither weekly, quarterly, or anything else is necessary in my opinion, but I agree that a conference between employers and workmen is good, seeing that it has gone so far. Surely the working man is going to be as good a man as anyone else, and if he has got the money which makes him liable to pay Income Tax, he will pay it as readily as anyone else. You did not consider it necessary to make the distinction years ago, and it should be less your concern to do so now when the amount at which a man becomes liable is higher than it was years ago.
I quite agree with the Mover of the Amendment, that it is a very objectionable thing for the State to make the employers tax collectors. As an employer, I can see nothing but difficulty in the way of collecting this tax quarterly. There appears to be a desire on the part of the Committee to make the process of collection as easy as possible to the working class. I think the simplest and easiest way is to get the money weekly. In many towns there is a system of compounding the rates where the landlord pays the rates, say for 100 houses, and he gets a reduction of 33 1–3, or whatever it may be, for paying the rates of the whole of the houses, which allows for a third of them being empty. The system there is for the landlord to collect the tax weekly, and it is very much more acceptable to the tenant than for the rate collector to come quarterly to collect the tax, because in nine cases out of ten he would find that the people were not at home or had not got the money. I think we ought to endeavour to make this tax as easy to collect as possible, and with the least expense. If it is collected by the employers giving a stamp weekly to the people who are entitled to pay the tax, I do not think any of the working men would object to pay the In-come Tax. My experience as an employer is that they have objected in the past that they have not got sufficient salary to entitle them to pay it. There is, I believe, a desire on everybody's part to shoulder the burden and to pay their corner in this great War. Paying a sum every week would remove all suspicion, because the employer would only pay the necessary amount, and the receiver of the sum would know perfectly well that it was a legitimate demand and he would have no objection to paying it. I hope the Chancellor will consider this matter with the workpeople, and also with the employers. I am sure he will be convinced, as I am fully convinced, that to collect quarterly is the most expensive and the most objectionable-method to the people concerned.
After listening to the very kind offer of the Chancellor of the Exchequer, made nearly an hour ago, to meet representatives of the employers and of the men, I think it is most unwise to follow up this argument here this evening, pending their decision, at any rate. I wish to protest against the Clause as it reads at present, and I consider, if put into operation in Ireland, it would cause considerable trouble between the masters and the men. The one thing men object to is deduction. I think a man will pay more willingly if allowed himself to do so than he would by the employer doing so. I think the difficulty would be easily got over by the employers having a certain number of stamps that could be given to the men weekly, which would give them the opportunity of paying their Income Tax on their weekly wage. I regret to say that this Bill, as far as workmen are concerned, will not apply to Ireland so much as it does to any of your towns in England, because the workmen in Ireland will not be in a position to earn sufficient money to enable them to pay Income Tax. They would be glad of the opportunity of getting some work from England in the way of munition work that would bring up their salaries and put them in a position to pay Income Tax. I think the Clause as it reads is most despotic, and casts a reflection on the working men, and I am sure will end in untold trouble between themselves and the masters.
The Chancellor of the Exchequer must be impressed with the opposition to the Government method of collecting the Income Tax, when he finds every single Member who has spoken objecting, from some point of view, to the Clause, suggests a conference between employers and employed. I desire to protest against the idea that the employers are in this business at all. I do not see why there should be a conference between labour and capital, or employers and employed in this matter. I entirely agree with hon. Members opposite who ask what has labour done in this country that now when the workers are to be more directly liable for Income Tax they should be assessed as a separate class altogether from the rest of the Income Tax payers. I do not think it is necessary to hold a conference. The Chancellor of the Exchequer ought to have consulted the leaders of the Labour party, and those who represent labour, not only here but outside, and to have found out what their views were. I protest against this Clause altogether and very much regret that the Motion to omit the first Section was not definitely pressed to a Division. It would then be out of the Bill and if the Chancellor wanted it back on the Report stage he would have to move to get it put there, but once out it would be likely to remain so. The Chancellor asked just now whether the House meant this to be a real tax. I am quite sure if he wants it to be a tax which will be paid, and paid willingly by the employed classes of the country, he is going the very worst way of securing that result by bringing in this principle of deductions from wages and this method of collection. That means that the people whom he is taxing for the first time will not understand their position as taxpayers. They will see in it one more item knocked off their wages by the employer. Their natural feeling will be that it is some new dodge, or some fresh method of robbery, and their next feeling will be that they must get it back as quickly as possible. Therefore the method, which the Chancellor of the Exchequer says is so merciful to labour, will not treat them fairly. It will result in the long run in the passing on of the tax in the form of increased cost owing to increased wages, and, like most other taxes that are passed on, it will be not only the tax itself, but something in addition. If the right hon. Gentleman wants the tax to be a real tax, and one actually paid by the class whom he proposes to tax, he must absolutely drop this method of collection. If it is a matter between the Government and those whom they employ to collect the tax, if it is understood to be a tax imposed in this time of stress, I believe that those who say it will be readily paid are right. But if it is going to be done by this method I am sure it will not be readily paid, and I do not believe it will be paid at all by the people whom the Chancellor of the Exchequer wishes to tax.
Amendment negatived.
:I beg to move to leave out Sub-section (4).
The object of this Sub-section is, by a side-wind, to alter the procedure which has been in existence ever since the commencement of the Income Tax Acts, whereby there is a body of Special Commissioners who stand as a buffer between the Income Tax payer and the Government. There seems to me no reason why the Special Commissioners should not try the cases of appeal equally for the working man as for the ordinary taxpayer.
They do under the Bill.
I am afraid I do not understand that from the Clause. The Clause states:—
"The Commissioners of Inland Revenue may make regulations …. and may in particular by those regulations provide for the assessment of the tax by the surveyor of taxes and for the collection of the tax by a collector appointed by them …."
At present it is for the General Commissioners to assess, and in some cases, not in all, they appoint collectors.
"… and also for the appointment, in cases where the Commissioners of Inland Revenue think it necessary for the purpose of expediting the hearing of appeals, of persons to sit as, and having the powers of, General Commissioners with respect to appeals."
That is to say, it does away with the General Commissioners and substitutes a body—
No. The new Commissioners will be appointed precisely as the General Commissioners are appointed. It does not mean that the Inland Revenue officials will appoint. It is only that where conditions arise in which the existing number of General Commissioners is not sufficient to hear the appeals, power is taken to make regulations for the appointment of additional General Commissioners, who will be appointed exactly as the existing Commissioners are appointed. We do not propose to take the appeals from them.
Then I do not see the object of the Clause.
If the words are obscure on that point we will put in Amendments. We do not want to take the hearing of appeals from the General Commissioners. We think we have not done so; but if we have done so, we will amend the words, as that is not the intention. We merely mean to provide for the appointment of additional General Commissioners where there are not enough Commissioners to hear the appeals.
If the right hon. Gentleman assures me that he does not wish in any kind of way to interfere with the powers of the present Commissioners, or to alter the method of appointment—because, as the right hon. Gentleman knows, the General Commissioners at the present moment are appointed by the magistrates, and it seems to me that under this Clause, unless the words are altered, it is the Inland Revenue people who would have the power to appoint.
No.
With regard to assessments, the General Commissioners make assessments now.
What we propose now is co-option by the existing Commissioners, where the existing Commissioners are insufficient in number to hear all the appeals. That will be done by regulation. When the hon. Baronet has moved his Amendment I will explain what we propose to do, and when I explain it I am sure that the whole misunderstanding will disappear.
Then I think the simplest way will be for me simply to move the omission of the Sub-section without saying anything further, except that on my reading of it the wording does not carry out what the right hon. Gentleman says is the intention of the Government.
I am much obliged to the hon. Baronet for giving me the opportunity of explaining what it is we intend to do by regulation under the powers conferred by this Clause, and when I have explained it I am sure that the whole of the charges against the Treasury of a plot or design to deprive a most admirable body of men of the work which they have so excellently done in the past will be discovered to be founded on pure suspicion, without any solid basis of fact. The following is the reason for this Clause. As has been already explained, we propose that in the case of weekly wage earners there should be direct assessment to Income Tax quarterly. One annual assessment would bring upon the wage earner a charge at the end of the year which he would find it very inconvenient to pay, and we propose quarterly assessments in order to divide up the total burden into four sums, instead of its being payable in one sum. A similar proposal in connection with Schedule D, enabling the tax to be paid in two instalments, which has been accepted by everybody as a boon, we propose to extend to the weekly wage earner, giving him the option of making the assessment and collection four times a year instead of once. That is a very great change in our Income Tax assessment, and it will entail a very great deal of new work, of quite a different kind to anything that has ever been carried out by the General Commissioners. The system that we propose is that an employer shall be asked to make a quarterly return of those of his weekly wage earners who, in the course of the quarter, have received an amount in wages in excess of £32 10s. The employer, having given the names of the workmen who will become liable to Income Tax, we propose that that list shall be taken by certain of the Inland Revenue Commissioners, and not by certain of the General Commissioners, because it is new work which you could not call upon a General Commissioner to perform. [HON. MEMBERS: "Why?"]
They are quite willing to do it.
I do not think hon. Members are right, and before I have done I will tell them to what the General Commissioners really object. The list having been obtained, it is very necessary to personally visit everyone concerned to inquire as to the number of children, and whether he is entitled to any abatement in respect of insurances. All that involves a very great deal of personal work. Having obtained materials for assessment, and the amount of the tax, the latter is to be collected quarterly, which will again involve a call upon the wage earner. But the work is not over then. That work has to be repeated every quarter. A new kind of work, too, is involved at the end of the year, because then it may happen that, although the quarterly assessments have been perfectly proper, a workman may have been out of work during one quarter, or he may have been employed at a much lower wage during another portion of the year, so that he may be entitled to repayment, it may be, of all he has paid in his more prosperous times. That matter has to receive individual attention. We felt that if the work is to be made a reality, and is to be thoroughly and properly carried out, it should be undertaken by persons in the employment of the State.
Oh!
Perhaps the hon. Baronet will allow me to finish. That is what we propose to do; that is what our regulations will carry out in the case of the assessment and collection of the tax from the weekly wage earner. The Commissioners of Inland Revenue will provide for the assessment of the tax by a surveyor of taxes, and for the collection of the tax by a collector appointed by them. The powers under this Clause, however, go a great deal further as they stand, and they extend to the whole Clause. We take certain powers under this Clause. If we intended to use the powers there would be ground for the opposition of the hon. Baronet. But we do not. However, if there is any strong objection, or if other words can be found, personally, I have not any objection to inserting them in this Clause. We take powers to deal with the whole of the employed persons by the General Commissioners. We do not propose to take anything from them they have got. We propose that all employed persons with whom they now deal—who are the persons that they care about—shall be left to them, and they will be provided for in our regulations. If those who are objecting to this proposal will consult with the representatives of the General Commissioners between now and the Report stage, and if they find that the statements which I have made are not satisfactory, then we can renew discussion on the Report stage. But I believe that they will find that, whether it be by regulations, or by what is in the Clause, that when we have strictly limited, either the powers or the exercise of the powers, to weekly wage earners, to this new class of persons in respect of whom all this additional new work will have to be undertaken, the objections raised will disappear. I hope that explanation will be found satisfactory.
I am afraid I cannot, as I should wish to do, accept the explanation of the right hon. Gentleman as a satisfactory one. But he has said distinctly that this Sub-section goes very much farther than he intends to go; that he can make regulations, but does not intend to make those regulations. I do not doubt the right hon. Gentleman.
I have offered the Committee fresh words in the Clause.
I have given way a great deal to the right hon. Gentleman, and I wish to do everything I can to save time. As there seems to be a great deal of difficulty about this, perhaps the much simpler way would be for the right hon. Gentleman to accept my Amendment, and to bring up a new Clause on Report: then we should have some knowledge as to what the Clause is going to be, and we should have some opportunity of looking into it. If the right hon. Gentleman will not accept what I suggest, the burden is put upon us suddenly to move a new Clause, which will be very difficult to do. In regard to the question of the General Commissioners, of course I can only speak for myself, but I myself am a Commissioner for a part of Wiltshire. I was down there yesterday, and I saw the clerk to the Commissioners, and he told me that in all that district the whole of the Commissioners were prepared to do the work. The City of London is, I believe, similarly circumstanced; and, therefore, so far as I know the General Commissioners are not desirous of having this work taken away from them. I would further point out to the right hon. Gentleman the danger of doing this, because as soon as it is done for one particular class, the officials of the Inland Revenue will immediately say, "We must alter it in order that we may obtain further powers over other classes." This is not the first time that this sort of thing has happened. I have in my pocket a list of attempts made, ever since 1861, to alter the powers of the Commissioners. Over and over again both parties have made attempts to do this, and over and over again the Government have been obliged to withdraw their proposals. This moment, when we are going to have a review of the whole of the Income Tax Acts, is a very dangerous and unnecessary moment to choose to make any alterations in regard to these Commissioners. Surely it is better to delay the whole thing, to leave things as they are, until there is a general review of the whole of the Income Tax.
I hope the right hon. Gentleman will accept the proposal of my hon. Friend behind me. We are all agreed, I am sure, that the right hon. Gentleman opposite has been perfectly frank in stating what he intends to do, and for what the Clause is intended. So far as I am able to follow it, it appears to me to be a perfectly clear Clause in its present form, but it has not the effect that we think it has. The right hon. Gentleman has overlooked this: The Sub-section begins by saying that the Commissioners of Inland Revenue may make regulations generally, etc., in respect to various matters. Then it goes on to say,
"and for the appointment, in cases where the Commissioners of Inland Revenue think it necessary, for the purpose of expediting the hearing of appeals, of persons to sit as, and having the powers of, General Commissioners in respect of appeals."
But those persons are to be appointed by the Commissioners.
No. If the right hon. Gentleman will look at the Sub-section, he will see that the words "in cases where the Commissioners of Inland Revenue think it necessary for the purpose of expediting the hearing of appeals" must be read in brackets. It is not the Commissioners who make the appointment.
I am taking the Clause as it is. There are no brackets in it. Subject to the legal opinion of my right hon. Friends on my left, I venture to contend that what I say is perfectly correct, that you take power by the Regulations for the appointment in certain cases "of persons to sit as, and having the powers of, General Commissioners with respect to appeals." Even to a man who has had no legal training, that is clearly the purport and effect of the Sub-section as it stands now, and I hope for that reason the right hon. Gentleman will accept the proposal of my hon. Friend behind me, and then he can produce a new Sub-section on another occasion giving effect to the views which he has expressed to the House.
I only wish to say that I am delighted for once to be in full accord with the hon. Baronet the Member for the City of London. I only rise to ask the Chancellor of the Exchequer to listen to the hon. Baronet's appeal in this respect.
9.0 P.M.
May I express the hope that the right hon. Gentleman will accept the proposal of the hon. Baronet, and for the time being withdraw the Clause with a view to a new Clause if necessary. The only reason I heard from the right hon. Gentleman why he should make this change—which may be the beginning, for all we know, of changes that will go pretty far in the whole policy of the Income Tax—was that an entirely new kind of work was to be done, and, therefore, I presume new people are to be appointed to do it. But surely they could be appointed under the existing Commissioners and under the control of the existing clerks. In either case there are to be new officials, and I think a great deal of suspicion at the present time is due to a circular sent out with regard to finding new posts for the old land valuers. The right hon. Gentleman opposite shakes his head. There is, however, great suspicion, because a circular has been addressed to the officials of the Old Valuation Department, who have been told that if this Bill goes through there will probably be posts going in connection with the Income Tax. It is perfectly clear and natural that there should be deep suspicion. It is evident on the face of it, that if you are going to collect a large quantity of Income Tax with new payers you will require new people to collect it, but surely those people could be employed just as much under the existing Commissioners, and then, in the middle of a war, you would not raise the great question of principle which is lurking in this small matter at the present time, and you would get your money just as well. The question very naturally raises suspicion, because at the present time we have no official Opposition. We have a Coalition Government in full power, and very naturally we do look with suspicion upon anything which will give to the Treasury, which already has sufficient power over the purse, and to the Commissioners of Inland Revenue under them, powers which may go very far indeed. It may be perfectly true, the right hon. Gentleman intends by regulation to indicate perfectly clearly that what he is intending is something perfectly fair; but at least we want words in the Bill. I am informed by the clerks of the Commissioners for the cities of Glasgow and Edinburgh—the officials of both those cities have taken great interest in this matter—that two-thirds of the assessments which at the present time come under their Commissioners, would be affected by this Clause. It seems very unreasonable to ask us to secure that these two-thirds of assessments shall remain as at present by regulation. Surely the only proper thing when you are dealing with such a huge mass of business is to do it by Act itself, and not by regulation. I cannot see why the Chancellor of the Exchequer cannot take the line of least resistance, and ask the present Commissioners to add to their staffs, if necessary, sufficient power to carry through the measure he is proposing here by methods which certainly will call for great criticism, and, I venture to say, for opposition within this House. I agree with my right hon. Friend who has just spoken that, to say the least, the words are ambiguous, and do admit of a construction which is not, I admit, the construction put upon it by the Chancellor of the Exchequer. For the rest, I venture to appeal to the right hon. Gentleman to leave out the Clause for the present, and, if he must bring it in, to bring it in in a recast form, and, better still, give to the present Commissioners the duty of collecting this tax altogether.
I quite appreciate the anxiety hon. Members may feel at allowing a Clause to go through which is to be modified in its operation by regulations which they have not seen, and I am so impressed by that argument that I must admit that I could not press the Clause in its present form until the regulations were before the Committee. I agree so far; but now I want the Committee to do something on the other side. I am willing now to put into this Clause words which would limit its scope to what precisely I have described, but I think the Committee ought to give me those words now. If in that form it is not satisfactory to the Commissioners—I believe it will be—we shall then rediscuss it on Report, because I understand hon. Members are speaking in general of the General Commissioners. But I think it is really my duty to press the Committee to let me primâ facie have the power, limiting it as I am proposing, which we regard as essential to make this tax a reality. If we are wrong, and the General Commissioners come forward hereafter and say, "We can undertake quarterly collection and assessment without cost, without employing new paid clerks—
Of course you could not do it without some extra cost.
We shall then be in as good a position to discuss it again on Report, and the offer to the Committee I propose to make will be, I hope, generally accepted. I would ask now to strike out the word "persons" ["in the case of employed persons"], and to insert the words "weekly wage earners." Then I will propose to strike out the last four lines, leaving it free, on Report, to put in any words not open to ambiguity. All I am asking for now is a reserved power to assess and collect in the case of weekly wage earners, and quarterly assessments of those weekly wage earnings by the Surveyor and Collector of Taxes. I am limiting it to that. We all mean the same thing. We only want this power for the weekly wage-earners.
One of our greatest objections is that the surveyors have power to assess.
We must remember that the Income Tax Laws were devised for a certain class of Income Tax, and as devised it was never intended in the original law for the weekly wage-earners. My hon. Friend opposite speaks of the assessment by the surveyor. What doers this mean in the case of a weekly wage-earner? It is an arithmetical calculation obtained from the actual total of wages paid and communicated to the surveyor by the employer with the deductions for children and insurance.
And other things.
That is the whole point of the change. The Committee may say we do not want this tax—and that is quite intelligible—or you may say it is not worth having, and that is an attitude which can be understood. But if we mean to have this tax, let us have it a reality and not a sham; and you cannot have it as a reality unless you have quarterly assessments and collection. It is something entirely new, and you must have it carried out by persons definitely appointed. I will communicate with the representatives of the General Commissioners between now and Report, and I will endeavour to come to some definite arrangement as to the final form of the Clause. If this Amendment is pressed, I should have to seriously consider dropping the whole tax. We must make it a reality, or it is no use at all. We regard this machinery—and we have had a good deal of experience—as being indispensable for this particular kind of tax. I am striking out those four lines, and I will only put in an appeal Clause by arrangement with the Commissioners. There will be a greater number of cases than the present General Commissioners could deal with, and we propose, when that state of things exists, that the General Commissioners should have power to co-opt additional members, who would then be- come General Commissioners for those cases. I will propose that in the Clause on Report, by agreement with the Commissioners. Meanwhile, as I cannot now put in words to make the matter clear, I suggest the striking out of the words I have indicated. I hope the Committee will now conclude the discussion on this Clause.
The right hon. Gentleman has gone a very long way to meet the representations made from all parts of the country with regard to this Clause. To my mind the basic objection was what appeared to take powers to abolish the old appeal to a disinterested tribunal. If it were possible that Income Tax should be a mere matter of ascertainment by a Department and appeal within the Department, that would introduce a feature with regard to the Income Tax which would make it less popular than it is at the present time.. The right hon. Gentleman has said quite frankly that he is ready to delete from the Clause that part of the Sub-section which would give power apparently to abolish the present appeal to an unofficial tribunal, and to introduce a process of appeal which will not be objectionable. I am sure we all accept that proposal in the spirit in which it is made, in fact in the spirit in which the right hon. Gentleman has conducted all these discussions.
I cannot help thinking that one reason why there has been very strong suspicion about this matter is that the discussion of the Clause has coincided with the publication of the circular purporting to emanate from Somerset House advertising the possibility of appointments at great salaries, from £1,200 a year down to £100 a year, with the prospect of appointment to earn those salaries to gentlemen who are disappointed of salaries they were earning in some other quarters. At this time to have associated a new process of taxation with an apparently new scheme for creating an unlimited number of appointments was enough to put anybody into a state of alarm. The right hon. Gentleman now says that nothing of that kind is intended. I cannot conceive that anything of the kind is reasonably intended, because the ascertainment of the amount due in respect of taxation from ninety-nine persons out of a hundred, or even 999 cases out of a 1,000 of the 750,000 who will come under this scheme, ought to be a matter of simple arithmetic. The whole question is, what is to be the simple and businesslike process by which that sum in arithmetic shall be worked, and how the working of it shall be secured promptly and regularly on the part of the Treasury. I understand the right hon. Gentleman to assure the Committee that, given the power to make regulations, ho will treat it, when this matter comes up on the Report stage, as an open question, so far as the Government are concerned, whether these calculations may not be made under the direction of the General Commissioners and the clerks whom they appoint. If the right hon. Gentleman does that, with rather a leaning, I hope, towards the continuance of the authority of the General Commissioners than away from it, then, as I say, he goes a very long way, indeed, to meet our opposition. My own impression is that the clerks appointed need not be at almost the fabulous figures mentioned in this circular.
They were not for this purpose.
I am very glad to hear that they were not for this purpose, because clerks who can work sums in addition and subtraction of pounds, shillings, and pence, and of multiplications of pounds, shillings, and pence, will be the class of people who will have to be employed, and the General Commissioners, to whom the general public has less dislike than it has to persons who are always and habitually employed in assessing and enforcing taxation, may be the body to whom the right hon. Gentleman will leave these appointments. If that is so I think we may be able to agree with the right hon. Gentleman.
I should like to ask if we are perfectly clear in understanding the right hon. Gentleman's promise, that the assessment of the tax by the surveyor of taxes will be open to consideration again. There is a feeling throughout the country, so far as I can interpret it locally, that the old system of assessment by the Commissioners, acting with the surveyors and officials, holds good. I object to making any difference between the men who are in receipt of weekly wages and others. If the present system of Commissioners meeting with their clerk and surveyor is permitted to remain, and they have nominally the responsibility of continuing these assessments, and it is simply a question of arithmetic, then I think the fears of the public will be allayed, but we object to the surveyors being empowered to make the assessments instead of the Commissioners.
I want to make a suggestion to the Chancellor of the Exchequer. These further persons who will be necessary for the purpose of collecting the tax may be persons armed with a knowledge of arithmetic, or they may be persons of even more knowledge, but the question is, by whom will they be appointed? There would be no difficulty in entrusting their appointment to the local or General Commissioners, but some misgiving has been created by the fact that we find the powers of the Commissioners of Inland Revenue are very largely increased. If a number of additional officers, be they surveyors or collectors, are required to collect these taxes, and I think that must be so, their appointment might still be entrusted to the same body which is at the present time giving satisfaction throughout the country. I object to the Commissioners of Inland Revenue taking power for the purpose of making these appointments. The General Commissioners will be able to select in the localities persons proper and fit to make the calculations. I quite agree that the right hon. Gentleman ought to have the opportunity of employing for this purpose a larger number of persons than are employed at the present time. I would suggest that he should take out the words "by a collector appointed by them" and let the Clause run in this way: "They may make regulations, and by those regulations provide for the assessment of the tax by the surveyor of taxes, and for the collection of the tax, and for the application to the tax of the rules and provisions," and so on. The difficulty would then, I think, be met. At any rate the Chancellor of the Exchequer would have an opportunity of reconsidering the question of these appointments, and deciding whether or not he ought to entrust them, not to the central body, but to the persons who collect the tax from the rich, and who might also be entrusted to safeguard the poorer payers of the tax. It is this central power of appointment which I dislike, and I should be sorry to let the Clause pass to-night if it is still to contain these words, "by a collector appointed by them." It is for the Chancellor of the Exchequer to reflect upon the matter and to reconsider it, and possibly to come to a view contrary to that I have put before the Committee, but I do ask him to take the Clause to-night without those words.
The Chancellor of the Exchequer must have been impressed by the fact that the Members of the Committee are in sympathy with the hon. Baronet (Sir F. Banbury), but I confess that I think he has met us in a fairly generous spirit, particularly by being willing to strike out the last four lines of the Sub-section. I would appeal to him very strongly, if he is going to table these regulations and amend this Sub-section, to do so at once and give the Members of the Committee time to consider them. This Finance Bill was put into our hands with far too little time for its consideration, and I think we ought to appeal to him here and now to see that nothing of that kind is going to happen on the Report stage.
I quite agree that the right hon. Gentleman has done a great deal, but so far as I am concerned he has not done enough. The first objection which I think must strike anyone when he looks at the Clause as it is to be amended by the Chancellor of the Exchequer is that while the Income Tax is to be extended to classes to which it did not apply before, the proposal is to apply to these new classes a different and at least, so far as appearances go, a more oppressive rule of taxation than applies to the classes which have hitherto been subject to the tax. While there are many of us I daresay who think it is wise and expedient to draw the net of the Income Tax wider than it is at present, I think there are few of us indeed who would like to see that done upon the footing that the new classes brought in are to be made the subject of exceptional measures. The right hon. Gentleman may think it is monstrous, but my own impression is that there are many Gentlemen in this House who would think it very monstrous if he proposed to apply a new and exceptional method of collection to one or other of the classes already within the net of the Income Tax. I do not see that any other principle can be applied in criticising what he does now, when he applies a new and exceptional method to the new class to be brought in. An exceptional method it is. The right hon. Gentleman is going to make the assessment and collection rest entirely with the revenue authorities, apart from appeals altogether, without any protection of the kind which the ordinary Income Tax payer gets at present. The right hon. Gentleman says his reasons for that are twofold. The first is that the existing assessment body will be overworked. I reply, "Let the right hon. Gentleman extend that body." Then he says the existing assessment body has not the necessary machinery. I say, "Give it the necessary machinery, but do not change the assessment body, or make it the surveyor of taxes, who is going to be just as much overworked; you will have to give him more help and more machinery." Why, if more help and more machinery has to be given, do you not give it to the existing authority, which is a certain safeguard to the subject in the case of the Income Tax payer? Why not give the new class of Income Tax payer the same safeguard?
Then the right hon. Gentleman said that in the case of the new class of taxpayer there is nothing but arithmetical calculation. I do not understand that. Are all wage earners in receipt of no income except the weekly wage? And, if you come to that, what is a weekly wage? There are plenty of questions that will arise about that. There are many people who are in receipt of other income than the weekly wage, and some of them are in receipt of income which is not taxed at the source. Then why tell us that the assessment of income will be a mere arithmetical calculation? If the right hon. Gentleman means that a great many wage earners have no other source of revenue, I have no doubt he is perfectly right, but that does not apply to all; and when we are bringing in a new class surely we ought to see that the rules we apply are fair and equal for everybody. They are not going to be fair and equal unless you treat the new wage earner whom you bring in as you are treating the rest of the Income Tax payers. If the right hon. Gentleman will do that, I shall be satisfied. I admit he has gone far to meet us. I quite appreciate his action, but, so far as I am concerned, he has not gone far enough. If this new class is to be brought in, let it be brought in on the same terms as the old class, and give more assistance and more machinery to the existing body, but do not let us be told that the application of the scheme is a mere arithmetical calculation.
I am absolutely compelled to reply at once to the speech to which we have just listened. Would anybody who has heard it dream that in Scotland at this moment there is not a single collector appointed by the Commissioners? They are all appointed by the Inland Revenue. The same is the case in Ireland, and in such places as parts of London, Birmingham, Liverpool, Manchester, Sheffield, Leeds, Bristol, Hull, and Bradford, some of the collectors are appointed by the Commissioners of Inland Revenue. The practice is quite general.
That was not my point.
The hon. and learned Gentleman spoke of assessment and collection, and I am dealing with the collection. He says with regard to the assessment that it ought to be done by the General Commissioners. I thought I had dealt with that point sufficiently. In ninety-nine cases of a 100—indeed in more than that proportion—the only points to be considered in the assessment will be, first, the return of the amount of wages paid during the preceding quarter by the employer; secondly, the amount of the abatement for children; and, thirdly, the amount of abatement for insurance. To speak of an assessment in which those are chief factors as being of the same kind of assessment which was in contemplation under the Income Tax Acts when the work was handed over specifically to the General Commissioners is merely a misreading of history.
Travelling and other allowances come in, and these are known to local people; any number of them.
When in the past any change in Income Tax law has been introduced, the working of it has been entrusted to Inland Revenue officials. The assessment for Super-tax is entirely in the hands of Inland Revenue officials.
In that case a man has to make his own return.
So, too, have the Commissioners.
He is not assessed; he makes the return.
Yes, he is invited to make the return, but he may be assessed equally if he does not make a correct return for Super-tax. I am dealing now with the question of assessment. The assessment for Super-tax, which was of a different nature to the ordinary Income Tax was, by Parliament, placed in the hands of the Inland Revenue Commissioners. We have now got another change in the Income Tax, and I seriously say it is play- ing with words to speak of the new Income Tax, as proposed, under a quarterly collection from the wage earner as being the same tax in kind and nature as the Income Tax which is based on the assessment of an uncertain amount of profits. The two things are absolutely different, and if it was appropriate in the case of the Super-tax to place the assessment in the hands of the Inland Revenue Commissioners, so it is appropriate to place the quarterly levy on the wage earners in their hands. I think that under these circumstances I am not asking too much when I ask the Committee to allow the Sub-clause to be taken with the Amendments I have suggested, the principal Amendment absolutely removing the whole ground of principle, because the principle of the Amendment was in regard to the appeal.
If the Clause were struck out we should have seriously to consider the abandonment of the whole proposal. We must not have any more threats, or any more barren attempts at this kind of Income Tax. Three or four years ago it was suggested that it was fair that weekly wage earners of over £3 a week should be charged Income Tax, like other members of the community who had to pay on any income above £160. Accordingly a return was to be asked for from the employers of workmen who earned more than that amount. But when it came to putting it into operation, the Inland Revenue could not collect it, because under the old Income Tax the rule was to assess the tax on a three years' average, and therefore you could get no Income Tax from the wage earner. If we mean it to be a real Income Tax, we have got to have a quarterly collection. I submit to the Committee that that is the only clear way of making it work in practice. As to the point that the assessment and collection should be undertaken by persons employed by the General Commissioners but paid by the State, I would strongly deprecate divorcing patronage from payment. If Parliament is called upon to pay through the Votes the salaries, it ought to be somebody directly responsible to Parliament who makes the appointment.
The clerks are appointed locally now.
I am not proposing to extend that. If any new appointment has to be made for this purpose, the responsibility both for the appointment and for the payment should be in the same hands.
For the first time in my life I rise to support the Chancellor of the Exchequer. I rose five times before he spoke just now with the idea of putting the three points he has just placed before the Committee. So far as I understand the position as it now stands with the Amendment it is this: In the case of weekly wage earners the assessment is to be made by the surveyor of taxes, but there is to be reserved the right of appeal to the General Commissioners. [HON. MEMBERS: "No.!"]
It is so.
I heartily approve of that. The hon. and learned Member opposite (Mr. Clyde) put forward, as his main point, that it was an unfair discrimination to impose a different system in regard to assessment upon a certain class of Income Tax payers. Aye, but the hon. and learned Member forgot one thing; that there has been discrimination between the two classes of Income Tax payers already established by this Bill. The class who are to be assessed by this new method have been given what I suppose is regarded as an advantage, namely, a quarterly assessment and a quarterly payment of tax. I think that very much vitiates the point the hon. and learned Member put forward. I must express my surprise, indeed my amazement, at the testimonials that have been given this evening in every quarter of the Committee to the General Commissioners. I have always regarded them as the most unpopular institution in this country and as an unmitigated nuisance in our Income Tax system. The reason why they are unpopular is because of their local knowledge and because of their personal acquaintance with the people of the locality. The hon. and learned Member for Warwick and Leamington (Mr. Pollock) would aggravate that feeling of irritation and of objection to the local Commissioners of Income Tax. Under this Clause, as it is proposed to be amended, the right of appeal would still be reserved to a workman to the District Commissioners, but I am quite sure the workman would not exercise that right except in a very few cases indeed. I am quite sure he would prefer to have his case settled by the Surveyor of Taxes. From my knowledge—some years ago I had a very intimate knowledge of the work of Local Commissioners—they are not only an unpopular body because of their constitution, but they are unpopular because of their politics. A local Surveyor of Taxes is a man who understands Income Tax law, whereas the Local Commissioners of Income Tax know nothing at all about it. The only reason I can suggest why these testimonials have been given to the General Commissioners of Income Tax is that all the hon. Members who have spoken are in the same position as the hon. Baronet the Member for the City of London (Sir F. Banbury), namely, that they are General Commissioners themselves. This Clause, as amended, gives the right of assessment to the local Surveyor of Taxes; I think he is the most competent person to do that work. I have no objection to the right of appeal to the District Commissioners being maintained. It might be accepted in a small minority of cases, but I am quite sure that in the large majority of cases the workmen would be quite willing to leave the decision in the hands of the Local Surveyor of Taxes.
I want to emphasise what the Chancellor of the Exchequer said in regard to the danger of patronage if we give the Local Commissioner of Taxes the power to make these appointments. The hon. and learned Member for Warwick and Leamington suggested that these appointments should be given to local men. Of course they would be given to local people, but they ought not to be given to local people, because they are people who have too close personal acquaintance with those whose incomes they have to investigate.
I believe I am right in saying that all tax under Schedule D is paid direct to the collectors of Inland Revenue, while the local collectors still collect under Schedule A. That practice has been extended considerably in recent years. I am not far wrong when I say that the reason why the collection of taxes is passing more and more into the hands of established Civil servants is the reason I have just been advancing, namely, the objection that Income Tax payers have to their private affairs being known to people in the neighbourhood. I have, and I am quite sure other Members have thousands of times heard Income Tax payers say, "I am paying on far more than my income." When asked, "Why do you not appeal?" the reply is, "Because I am not prepared to take my books and put them before my competitors in trade." What I should like to see is the whole of the assessment for Income Tax placed in the hands of fully qualified men and those established Civil servants, but I do strongly protest against any additional appointments that are going to be made for carrying out this additional work-in connection with the Income Tax being placed in the hands of the Local Commissioners of Income Tax. It will mean jobbery and it will create a vast number of unestablished Civil servants who will at once begin an agitation for establishment, increases of salary, and so forth. I beg the Committee not to encourage that method of meeting the needs which will be created by the passing of this. Clause.
I should be prepared to accept the proposal of the Chancellor of the Exchequer subject to these conditions: I do not myself attach very much importance to the collectors. As I said in the few remarks I made, which I cut very short at the request of the right hon. Gentleman, I was aware that in many cases the collectors were appointed-already by the Government. But I do attach considerable importance to the question of assessment. There the right hon. Gentleman very cleverly turned the subject by referring to the Super-tax. With regard to Super-tax, a return is made by the person who pays it. If no return is made, as might be the case here, then it is the General Commissioners who make the assessment and not the local surveyor. The local surveyor naturally would desire to make the assessment as high as possible. The General Commissioners, knowing the facts of the case and being utterly unprejudiced, notwithstanding what the hon. Member (Mr. Snowden) has said about their incompetence and being desirous of doing their duty, and being as competent so far as I know as the majority of surveyors of taxes or even as the hon. Member himself—
I am not one.
I am comparing the hon. Member with one of the Commissioners who he thinks are incompetent. I am not sure he did not attach even worse adjectives to their name. However that may be I think it is very important that the assessment should not be made by a person who has a direct incentive to make it as high as possible, but by some independent tribunal. If the right hon. Gentleman agrees that in accepting his proposals we do not bind ourselves to approve the Clause as altered I have no objection to withdrawing my Amendment in order that the Clause as altered may now pass, it being understood that we can review the whole thing on the Report stage and in addition, before the Report stage, that the right hon. Gentleman will put upon the Table of the House the form of regulations which he desires to make.
I will endeavour to get them before the Report stage. I will either put the regulations on the Table or put Amendments, if they are necessary, to the Clause which will make it clear that it is limited to what we propose. In one form or the other I can give the assurance that before hon. Members lose possession of the Clause we limit ourselves.
Under those circumstances I will go to dinner.
Amendment, by leave, withdrawn.
I beg to move, to leave out the word "persons" ["in the case of employed persons"], and to insert instead thereof the words "weekly wage earners."
Do I understand that there will be a distinct opportunity given on Report of raising again this one particular part of the point, namely, the assessment of the tax by the surveyor of taxes?
Amendment agreed to.
Further Amendment made: Leave out the words, "and also for the appointment, in cases where the Commissioners of Inland Revenue think it necessary for the purpose of expediting the hearing of appeals, of persons to sit as, and having the powers of, General Commissioners with respect to appeals."
Question, "That the Clause, as amended, stand part of the Bill," put, and agreed to.
CLAUSE 26—( Extension of Time for Claim of Relief on Account of Earned Income )— ordered to stand part of the Bill.
>CLAUSE 27.—(Income Tax on Interest on Deposits.)
(1) In estimating for assessment, under Schedule D, the amount of the profits and gains of any banker, no deduction shall be allowed from the profits or gains for any year of any interest paid or credited to any customer of the bank or to any other person, on deposits with the bank; but the banker shall be entitled to deduct and retain out of any interest so paid or credited the amount of the Income Tax thereon.
(2) This Section shall not have effect as regards the current Income Tax year, but if any banker proves to the satisfaction of the Special Commissioners that for that year he has been charged to Income Tax, by deduction or otherwise, on an amount exceeding his profits from all sources, estimated in accordance with the rules contained in the Income Tax Acts, he shall be entitled to repayment of the excess.
I beg to move, to leave out Sub-section (1).
I should like to ask the hon. Member if he will withdraw the Amendment, in order that I may move the deletion of the Clause altogether. There have been various conferences on this subject with bankers and others concerned. The Clause was originally put in under a misapprehension. It was thought it would meet the objections they raised, but it has not. It has met with almost universal condemnation. We propose, therefore, to withdraw the Clause and move a new Clause, which will appear on the Paper to-morrow morning, which has been agreed with the bankers, and which I think the Committee will find acceptable.
Amendment, by leave, withdrawn.
I beg to move, to leave out the Clause.
Question put, and agreed to.
CLAUSE 28 ( Place for Assessment of Income Tax ) and 29 ( Payment of Income Tax by Installments in Certain Cases ) ordered to stand part of the Bill.
CLAUSE 30.—(Deductions in Respect of Schedule A Tax in Scotland.)
Notwithstanding anything in Section forty of the Income Tax Act, 1853, or in Section fifteen of the Revenue (No. 1) Act, 1864, or in any other enactment, deductions in respect of Income Tax under Schedule A on lands and heritages in Scotland made from any rent, interest, or payment due for the period ending on the fifteenth day of May, shall be made at the rate of the tax in force at the commencement of that period.
I beg to move to leave out the words "at the commencement of that period," and to insert instead thereof the words "during the preceding financial year ending 5th April."
There are other feu duties and ground rents payable yearly. If the words stand as they are, from rents falling due on 15th May next year, 1916, the tax will be deductible at 2s. 6d., because the commencement of the period will be 15th May, at which period the tax stood at 2s. 6d. I should like my right hon. Friend to think this out. There are other charges which may be payable once a year, and which might be increased during the period of the year. This will help you to get more money, but there is also the matter of justice in it, because sometimes a tax is deducted by one man and paid by another, and it would not do to have the tax deducted at 3s. and recouped at 2s. 6d. I think there is good substance in the Amendment.
As far as I understand the hon. Member's remarks, the Amendment seems to me to lay an additional charge upon the subject.
No, not necessarily. The tax might be less.
The hon. Member distinctly said that the result of it would be that the State would get more money. I should like to hear the Minister in charge of the Bill on the point.
The Clause as it stands is very difficult to understand. It might be a different rate. I do not wish to put any more tax upon anyone, but there should be differentiation in the rate. It might be less than the man ought to pay. It does not ask him to pay anything more than he should pay. It does not put additional taxation on. At all events, I should like to know what my right hon. Friend says in regard to it, because it is very ambiguous at it stands and ought to be cleared up so that there is no misunderstanding.
I will put the Amendment, but I have entered my caveat.
As I understand it, in Scotland at present, when rent, interest, or feu is due on 15th May, the man who makes the payment is entitled to deduct Income Tax at the average rate up to the 15th May. In practice it very rarely is done. In practice, by agreement, Income Tax deductible is the Income Tax on the 5th April of the preceding period. In Scotland, where there are contracts of this kind in which the tax is deductible in the middle of the year, by agreement it is generally understood that the tax actually deductible should be the Income Tax, not on the new rate, but the Income Tax deductible for the end of the last financial year. This Clause was inserted in the Bill because in Scotland they like the law, and they like to act in strict accordance with the law. They become very restless in regard to a matter that rests upon agreement, however wisely that agreement may be made, and they want it in black and white. This Clause, as it stands, merely regularises the procedure, which, I understand, in ninety-nine cases out of a hundred is taken to Scotland. My hon. Friend proposes to substitute for the words "at the commencement of the period" the words "during the financial year ending 5th April preceding." I do not think that there is very much difference, but I do not know what the words "during the financial year ending 5th April preceding" would actually mean, because there may be two Income Tax rates during the year ending 5th April. The rate may be varied. I would suggest, therefore, although I do not see very much objection to the Amendment, that after the appeal which the Deputy-Chairman (Mr. Maclean) made when he said that there might be certain cases in which this would be an increased charge upon the taxpayer, my hon. Friend should not press the Amendment.
There may possibly be under certain circumstances an additional charge, and there may equally be a lower charge. This practice in Scotland has been more or less convenient, but it has been more or less arbitrary. I think it is dependent entirely upon the action of lawyers in Glasgow or Edinburgh who fix the rate. I think that the whole Clause ought to pass as it is, and that this practice ought to be regularised by law.
Amendment negatived.
Question, "That the Clause stand part of the Bill," put, and agreed to.
>CLAUSE 31.—(Computation of Profits and Gains in Relation to Excess Profits Duty.)
Where any person has paid excess profits duty under this Act in the course of any year, the amount so paid shall be allowed as a deduction for the purpose of computing the profits and gains of that person for the year with respect to his liability to Income Tax in any subsequent year; but where any person has received repayment of any amount previously paid by him by way of excess profits duty, the amount repaid shall be treated as profit.
The payment of excess profits duty shall not be deemed to be a specific cause for the purposes of Section one hundred and thirty-four of the Income Tax Act, 1842.
( indistinctly heard ): I beg to move, to leave out the words "in any subsequent year" ["with respect to his liability to Income Tax in any subsequent year"], and to insert instead thereof the words "in the year in which the excess profits is included in the return of profits, and such excess profits upon which excess duty is paid or chargeable shall not be included in any returns for assessment of Income Tax or Super-tax."
I move this Amendment in order to correct what I think must be a mistake on the part of the draftsman of the Bill. The Chancellor of the Exchequer made it clear in his statement on Thursday, 23rd September that
According to this Clause, as I read it, he will be required to pay Income Tax on that £50,000. This Clause says that he does not make the deduction on the excess duty paid until the year after he has paid it. As regards the year up to the 31st December, 1914, the amount in respect of which excess duty is to be paid would be included in the assessment which he would pay on the 1st January, 1916, and he would pay the full Income Tax and Super-tax on that amount. That is absolutely clear from the way the Bill now stands. It is true that in the course of three years he would get this money back, because after he had paid his excess duty he would deduct it from his Income Tax and he would get relief in the next year. He would pay Income Tax and Super-tax on his excess duty on the 1st January, 1916. In 1917 he would obtain, by deducting that excess duty on his average, a relief of one-third, in 1917–18 another relief of one-third, and in 1919 another relief of one-third, which he would get back. But as a matter of fact, he would not get it back in the current fiscal year, which was so clearly promised by the Chancellor of the Exchequer. The Chancellor of the Exchequer said he would never pay Income Tax on the amount for which he has to-pay excess duty. It is clear from the way the Clause now runs that he will have to pay that Income Tax, because his earnings during the year 1st January, 1914 to 31st December, 1914, will be taken in, and it will include the amount in the average of the duty for which he has to pay Income Tax on the 1st January, 1916. That is perfectly clear. I do not know whether the right hon. Gentleman has appreciated the point, but if he will look at the Bill he will see that it says:—
"Where any person has paid Excess. Profits Duty under this Act in the course of any year, the amount so paid shall be allowed as a deduction for the purpose of computing the profits and gains of that person for the year with respect to his liability to Income Tax in any subsequent year; but where any person has received repayment of any amount previously paid by him by way of Excess Profits Duty, the amount repaid shall be treated as profits."
It is only when he has paid excess duty. Very few will pay this year on the profits from 1st January, 1915 to 31et December, 1915, but they will pay next year. Their profits, which include the amount they pay excess duty upon, will certainly be included, and they will have to pay Income Tax and Super-tax on it. For the purpose of meeting the point I move my Amendment. I do not know whether it is in as good wording as a draftsman would put it. However, I have tried to make it clear. For instance, if the profits returned to 31st December, 1914, include any amount on which Excess Profits Duty has been paid
"Such excess profits upon which excess duty is paid, or is chargeable, shall not be included in any returns for assessment of Income Tax or Super-tax."
Of course, it is difficult to say if it is not paid until February or March next year what the amount will be. Still, the man ought to have the right of having next year an appeal and of getting the amount returned that has been so taken. The Chancellor of the Exchequer said absolutely and most distinctly that no one would pay Income Tax or Super-tax on the amount on which excess duty was payable.
I am very much obliged to the hon. Gentleman for the explanation which he has given of the Amendment. I did not quite appreciate it as it appeared on the Paper. I think that I am now in a position to suggest that what he asks is unnecessary, and goes far beyond the pledge which the Chancellor of the Exchequer gave. It is, it seems to me, quite apparent that when you are in a position to assess what are your profits for this year, you should deduct from those profits, as your working expenses, the amount of your Excess Profits Tax. If you have made a profit of £10,000, and you will have to deduct from that £2,500 as your Excess Profits Tax, in your return of your profits for this year you ought clearly to be allowed to return them at £7,500 and not £10,000. That is what the Clause does, and, as that year appears three times in your average for Income Tax, eventually you will get the full benefit in your Income Tax of the reduction of your profits by the amount of the Excess Profits Tax. The hon. Member for Liverpool has an alternative suggestion. He cannot mean that he shall have it both ways. His suggestion is that in this year, when the Income Tax is levied, not on anything which has happened this year, but is levied by our immemorial Income Tax system on the average of three previous years, he should be allowed to deduct the whole of this irrelevant consideration of the Excess Profits Tax which he is going to pay on this year. Surely that is not as logical, as relevant, as consistent with our existing forms of taxations as to get the benefit of the allowance for the Excess Profits Tax spread over the three years of assessment which go to make up your ordinary Income Tax. Therefore, I suggest to the Committee that they should keep the Clause as it is.
I listened with very great attention to the right hon. Gentleman, but I do not think he meets the case at all. This case has been put to me as one of real doubt and real substance. Income Tax payers want to know, say, in a company where the year ended on the 31st December last, and where the profits for last year have been assessed for Income Tax, what was the meaning of the Chancellor of the Exchequer's words on the 23rd of September? They seem perfectly clear to me. The Chancellor of the Exchequer was assuming £100,000 excess profits, and he said that the person will not pay Income Tax or Super-tax on the £50,000, but that the £50,000 would be regarded as an expense of his business. The right hon. Gentleman says we must not try to get it both ways. My hon. Friend does not ask for it both ways. What he asks for is the fulfilment of the pledge of the Chancellor of the Exchequer. In a business which I have in mind, not only is the income for 1914–15 settled, but it has been reckoned in calculating the profit of the business for the year, before anyone connected with the business knew anything about this Excess Profits Tax. It has been settled, and the shares have absolutely changed hands on the basis of that profit. Now the right hon. Gentleman comes forward and says that we are to have this retrospective Excess Profits Tax. That raises a question, in view of the words of the Chancellor of the Exchequer, as to the assessment for Income Tax of every business where the year terminates at or about the end of the year. With regard to last year it makes a very material difference.
A simple illustration has been worked out for me in this connection. The assumed profits for 1911, 1912, and 1913 were £1,000 each year. For 1914 they were £1,500. Therefore the Excess Profits Tax would be upon the £500 or £250. That is according to the Chancellor of the Exchequer a charge in respect of the business for the financial year ending April, 1915. Therefore we have to consider the effect of the Income Tax. We have profits for 1912 of £1,000, 1913 £1,000, and 1914 £1,500, from which we are entitled to deduct, as expenses of the business, £250, leaving a total of £1,260. That means that the three years' average on which the Income Tax ought to be paid is £1,083, instead of what was already settled, £1,166, which is the average of the three years without the deduction of the Excess Profits Tax. Therefore I maintain that it is not asking for a thing twice over. It is simply asking, in the words of this Amendment, for the fulfilment of a definite statement by the Chancellor of the Exchequer that people will not be required to pay Income Tax upon the amount which is taken from excess profits of the business as excess profits tax. That is a simple proposition. If these words or similar words are not accepted, then in respect of the initial year, the year ending according to the Bill after the 1st September last, and up to the 1st July next, in all those businesses which have the year terminating between those periods, in every case there will be an inclusion of the sum which it is now sought to take from them as Excess Profits Tax, an inclusion as profits already assessed for Income Tax. Therefore in respect of 1914–15, in every case they are, in fact, asked to pay Income Tax upon the sum which is taken away as Excess Profits Tax. It is all very well to tell us that you will get it all right in the future, and that it will work out in the three years' average. It will never come back. Income Tax will be paid on it, as in the case of Super-tax on Income Tax; it will be paid upon 50 per cent. of the excess profits which are not really divisible, though they may have been already divided and paid out to the shareholders.
I listened to the explanations made by the hon. Member for Liverpool, and the hon. Member for Devizes, and I cannot help thinking that my hon. Friends are trying to do two things. This Clause, as explained by the Financial Secretary, seems to be a Clause which is necessary in order that we may have the advantage, which we often sought in the case of Super-tax, given to us in the case of Excess Profits Tax. That is to say, persons who have paid the Excess Profits Tax, which is a very heavy one, in calculating the profits in subsequent years, shall have a right to measure the profits by the fact that those profits had already been depleted by the large sum which had been taken from it, in this Excess Profits Tax, for the Exchequer. That seems to be a perfectly proper principle, and properly applied to this very heavy tax. It is a suggestion which has been made in respect of the Super-tax, but has never been acceded to by the Chancellor of the Exchequer. So far as I understand Clause 31 that is all that it does. I do not think that it does any more. I have looked at it with a certain amount of suspicion, because it occurred to me that incidentally it provided that there should be some payment of Income tax upon the sum which is returned by way of excess profits, or rather which is allocated to the payment of Excess Profits Tax. But I do not think it does. I think that it simply affects the Amendment which we have all sought on previous occasions in the analogous case of the Super-tax. Now my hon. Friend wants something more. They say that that is all very well in the future, but what are we to do in the present year? And they suggest that this Clause should be amended in order that it may apply merely to the future, but that as regards the present some reduction ought to made in respect of the Income Tax which is being paid, or which covers the period for which the Excess Profits Tax is being taken. I suggest to my hon. Friend that this is a matter which ought to be dealt with by this Clause. I think you want Clause 31. I do not think you can do without it. I think it would be a pity to complicate the Clause by introducing into it something which should relate to what is of a temporary nature, namely, a Clause designed for the purpose of meeting the difficulty as to Income Tax during the period for which the Excess Profits Tax is to be paid. I hope my hon. Friend the Member for Liverpool will put this Amendment down in the form of a new Clause complete in itself, and designed to meet what is really a temporary difficulty. If he does that, I think the Financial Secretary might give it his careful consideration. I think that Clause 31 is necessary, as the Financial Secretary has rightly indicated what its meaning is, and it should, therefore, be allowed to stand.
It appears to me that the meaning of Clause 31 is extremely ambiguous, and I think that it should be materially altered. Nothing could be clearer than the Chancellor of the Exchequer's statement when he said that so far as the Excess Profits Tax is concerned it must be treated as a working expense, that the balance, the other half, to remain with the trader will be subject to Income Tax, etc., but that the halt that is taken under the tax should be entirely free from Income Tax or any other charge. He made that so absolutely clear that the mixing up with the expression in this Clause of the reference to Super-tax makes it extremely confusing. I, for my sins, have had a good deal to do with Income Tax, and I have read many Income Tax Acts. I think I have read this Clause through three or four times, and I fail altogether to understand it. I have submitted it to various accountants and those who ought to clearly understand it, but none of them seems to be able to give a clear expression of opinion as to its meaning. Under these circumstances, while I am sure that the intentions are all that we were promised by the right hon. Gentleman, do you not think it would be possible for us to have a clearer statement of what is intended, so that we may give it that complete accord which I am sure it deserves? As it stands it is too ambiguous for any business man to understand what is the clear intention of the Clause.
I think this Clause says in so absolutely a roundabout way what the Chancellor of the Exchequer promised that I cannot understand for one moment how the Treasury could have worded it in the way they have. What the Chancellor of the Exchequer said was that the proportion of the extra profits which the Government claim was not to be charged with Income Tax or Super-tax. There is only one simple method of dealing with this, and that is that when you are calculating the profits the first charge on those profits is the tax being paid to the Government, and that amount should therefore be deducted from the profits of the company or firm, and the balance should only pay Income Tax and the Super-tax in addition.
I do not dispute that in the least, but the hon. Member for Liverpool has moved a totally different Amendment—that an excess profit tax paid this year shall be deducted from the Income Tax assessment. That is a totally different thing.
I hope my hon. Friend (Sir J. Harmood-Banner) will persist in this in some way or other. I know of a case in which before 1914 no Super-tax was paid. The man's excess profits in 1914 brought him into the Super-tax list. If the Chancellor of the Exchequer's promise as I understand it stands he would take half of that extra profit before the man became accessible for Income Tax or Super-tax, and he would not then come under the Super-tax at all. Am I right in supposing that the excess profit of 1914 shall be deducted before the Income Tax or Super-tax is paid?
I must read what the Chancellor of the Exchequer said:
"The happy recipient of an excess of £100,000 will contribute out of that £50,000 as Excess Profits Tax. He will not pay Income Tax or Super-tax on £50,000. That £50,000 will be regarded as an expense of his business."
According to this Clause he is going to be called on to pay Income Tax and Supertax on that £50,000. I challenge the right hon. Gentleman, on looking into the matter, to deny that the Clause runs counter to the statement of the Chancellor, and that the Income Tax and Super-tax payer will pay Income Tax and Super-tax en the excess profits.
I am very sorry. I have not succeeded in convincing the hon. Member for the Everton Division of Liverpool (Sir J. Harmood-Banner). The hon. Member for Warwick and Leamington (Mr. Pollock) found no difficulty in understanding the reading of this Clause. The difference between the hon. Member for Liverpool and myself is that he wants to count his Excess Profits Tax as expenses in a year in which he never paid it.
In a year in respect of which excess profits are assessed.
"In respect of which," and the suggestion of the Chancellor of the Exchequer is that he shall not pay Income Tax or Super-tax on the £50,000 which he pays, and in the year in which he pays it, and that is so. The whole of the principle of this Excess Profits Tax, which may be right or wrong, is that it is charged in one year on the profits of the year before. When it is charged, in the year in which it is charged it will not influence Income Tax in that year, but it will influence Income Tax the next year as a working expense. To reduce the amount of profits earned, and, therefore, the amount on which Income Tax is to be paid, and to suggest that we should treat it as an expense in a year in which it was not an expense and in which it was not paid is to ask the Chancellor of the Exchequer to grant more than he ever suggested at all.
That is not my suggestion at all.
Amendment negatived.
Question, "That the Clause stand part of the Bill," put, and agreed to.
CLAUSE 32—( Service of Notices by Post )—ordered to stand part of the Bill.
CLAUSE 33.—(Amendments to have Effect in Current Income Tax Year.)
Any Amendments made by this Part of this Act with respect to Income Tax shall have effect as respects the tax for the current Income Tax year except where the context otherwise requires.
I beg to move to add at the end of the Clause the words, "Provided that where dividends are derived from money invested in a company registered under the Companies. Acts domiciled outside the United Kingdom but within the British Empire, Income Tax shall be collected on such dividends at no higher rate than would be collected if the company had been domiciled in the United Kingdom."
It seems to me that the Inland Revenue, who took powers last year to collect money all over the world, have no very good machinery for carrying out their wishes—
Until the hon. Member read his Amendment, I did not appreciate its purport. If it is to amend a Section of the Act of last year, it ought to come as a new Clause, and not as an Amendment to this machinery Clause.
In that case I will put it down as a new Clause.
Question, "That the Clause stand part of the Bill," put, and agreed to.
Committee report Progress; to sit again to-morrow (Wednesday).
Shorthand Writer's Staff
Motion made, and Question proposed, "That it be an instruction to the Select Committee on Publications and Debates Reports to inquire into and report on the position, duties, and remuneration of the Shorthand Writer to this House and of his staff.—[ Mr. Walter Rea. ]
I think we ought to have some explanation of this Motion, for Motions of this kind get carried without our realising what is the effect of them. One or two unfortunate effects of recent Motions of a similar nature have been brought to my cognisance. I cannot go into that now, but I want to be assured by someone on the Treasury Bench as to the effect of this Motion.
I support very strongly the remarks of my hon. Friend. This Motion is a misleading and a most extraordinary one. I suppose it is put down on the Paper in pursuance of the policy of retrenchment and economy, of which we have heard so much in recent times. I would not oppose a general policy of economising in times like the present if the economy were fair, all-round, and impartial economy; but when a Motion of this kind is directed, apparently for the purpose, it seems to me, from the wording of the Motion, of prejudging the matter of reducing the staff of the Reporter of our Debates and their remuneration, the House, I think, ought not to pass such a Motion without some justification from the Treasury Bench. In the first place, I desire to say that I think the House of Commons owes a debt of gratitude to the Official Debates staff. We all remember the horrible method in which our reports were dealt with before the new staff was instituted. We have every reason to be proud of the work of the gentleman who is in charge of the official reporters of this House, and the officers who serve under him. The Reports are now admirably done. I must confess that I feel strongly on the process which appears to be carried on to some extent in the House, namely, that of economising in the salaries of the officials who are least remunerated, whilst all who are in high positions in the House are spared. I am opposed in principle, and generally, to this whole scheme of cutting down the salaries of public officers and the Civil servants of this House.
I do not want it to be supposed for a single moment that I advocate a general cutting down. I do not. I think it is a mean method of economy—the one adopted in Turkey and in the South American Republics when war is on. There the first thing to be done is to stop the salaries of the public officials. I have never heard or read in the history of England that we have adopted this course. I do, therefore, most earnestly impress upon the House that if we are to go in for a system of cutting down the remuneration of the public servants of this country, there should be a general all-round proportionate cutting down; the high salaries ought to be struck at as well as the low. Some time ago we were informed that the police who are told off for special duty in this House had, in pursuance of this great virtue of economy, so loudly preached to us all now, got 2s. a week taken off their pay. I consider that sort of economy contemptible. If we are going to pursue any general policy of economy, let us have the thing introduced, not in the way this Motion has been introduced, but by a Motion to have a day set aside for discussion, and some principle laid down upon which the economies are to be carried out. For my part, I feel so strongly on this matter that if my hon. Friend goes to a Division on this Motion I shall be inclined to go with him. To pass this Motion with- out a word of justification, a Motion which apparently—I do not say it is intended—but apparently is a kind of Vote of Censure on the reporting staff of this House, and to prejudge the question—
The Motion does not relate to the Official Reporting Staff here, but to the official shorthand writer to the House.
Then I have mistaken it. I suppose it means the official shorthand writers who take reports in the Committees? I really think that the Treasury ought to give the House an explanation of what is the intention of this inquiry. If it be for the purpose of economy we ought to have the grounds on which the Motion is made, and the general scope of the inquiry.
I hope I may be able to satisfy the hon. Member for East Mayo and the hon. Member for Somerset, because I am quite in accord with what they have said. The object of this Motion is the very reverse of what the hon. Member has, at first sight, supposed. A suggestion was made to me, as Chairman of Committees, and therefore responsible for the Standing Orders referring to private Bills, that there might be an economy made in revising the payment for the shorthand writers who take the reports in the Committees upstairs. I gave a certain amount of attention to that matter, but came to the conclusion that I could not recommend to the House a change in a long-established practice of that kind embodied in our Standing Orders unless a Parliamentary Committee had first inquired into the matter and recommended the change. So that I was doing exactly what the hon. Member would approve. I further stated that, as we had already a Committee existing in the House which was experienced in matters of this kind, I could consider no better authority to which the matter could be referred for any proposals made to the House on which the House might take action. So that the very object of this Motion is that no change should be made until the matter has been considered from all sides by this Committee. As to what the hon. Member said about this Motion prejudging the question, it has been drafted with the very purpose of avoiding that. The fact is that the official concerned has been very badly hit indeed, I understand, by the War and by the great reduction of Private Bill work in this House, his remuneration being at present entirely by means of fees. Therefore I wish in this Motion that his side of the case should be considered as well as that of the Retrenchment Committee, and the very object of the Motion is that all sides of the question may be heard before a competent Committee of this House, that that Committee may report its recommendations to the House, and that the House, as it pleases, may take action on the recommendation. I think that that meets the case.
I should like to put one point to the Chairman of Committees. Does he think that the Committee dealing with Publications and Debates Reports is the proper Committee to consider this matter? If this has to do with the work of the shorthand writer to the Private Bill Committees, it ought to be referred to a Committee of Members who sit upon those Bills. So far as I know, those who compose the Committee on Publications and Debates Reports are not the Members who see what these shorthand writers are doing. I rather agree with the hon. Member for East Mayo that if we are going in for economies in this way, there is a large amount of extravagance not only to the House of Commons, but to the local authorities with regard to private Bills. It is essential that their money should be saved as well as the national money. This has really a very wide scope. If we are going into questions of this kind, it should be to a different Committee from that which is suggested.
Those points have been fully considered. In the first place, the Committee there referred to, which sits under the presidency of my hon. Friend the Member for Bury (Sir G. Toulmin), is an experienced Committee. It is the very Committee which built up the system that we now enjoy of our reporting upstairs. In the second place, I have arranged with the hon. Member for Bury that he should call before his Committee experienced chairmen of Private Bill Committees upstairs in order that the point referred to by the hon. Member for Stockton should have the fullest consideration, namely, the importance of accuracy and the highest quality of work in the reporting of those Committees. With regard to his further point, the expense that falls upon local authorities, I am well aware that some saving might be made, and that will be done within the scope of the Resolution as it is drawn. The Committee will have power to consider the whole system and the charges both to the Treasury under the Standing Orders of this House and also to the local authorities.
With regard to the remarks made by the hon. Member for East Mayo, I agree that if this is considered to be a time when it is necessary to cut down salaries at the expense of a few junior officials on the shorthand staff, I shall be compelled myself to go into the Division Lobby against such a proposal. When we have thousands of pounds being wasted outside by various Government Departments, I think it is lowering this House to the level of some tuppenny-ha'penny board of a country town to talk of economy at the expense of these junior officials.
Question put, and agreed to.
Whereupon Mr. SPEAKER, pursuant to the Order of the House of the 3rd February, proposed the Question, "That this House do now adjourn."
Question put, and agreed to.
Adjourned accordingly at Eighteen minutes before Eleven o'clock.