House of Commons
Monday, December 6, 1915
Sailors' and Soldiers' Dependants
Copy presented of Scheme for allowances to Dependants of deceased Sailors and Soldiers [by Command]; to lie upon the Table.
Civil Contingencies Fund, 1914–15
Return presented, relative thereto [ordered 2nd December; Mr. Montagu ]; to lie upon the Table, and to be printed. [No. 393.]
Superannuation Act, 1887
Copy presented of Treasury Minute, dated 25th November, 1915, granting a Retired Allowance to Mr. Alfred O'Hea, Assistant Clerk, General Prisons Board, Ireland, under the Act [by Act]; to lie upon the Table.
National Insurance Act
Copy presented of Regulations, dated 20th November, 1915, made by the National Health Insurance Joint Committee and the Welsh Insurance Comsioners, acting jointly, entitled the National Health Insurance (Medical Benefit) Regulations (Wales), 1915 [by Act]; to lie upon the Table, and to be printed. [No. 394.]
Deaths from Starvation or Accelerated by Privation (England and Wales)
Return presented, relative thereto [ordered 16th February; Mr. Herbert Lewis ]; to lie upon the Table, and to be printed. [No. 395.]
Universities (Scotland) Act, 1889 (Ordinance)
Copy presented of University Court Ordinance, No. 49 (Edinburgh, No. 17) (Regulations for Degrees in Music, supplementary to Ordinance, No. 34 (Edinburgh, No. 8), of the Commissioners under the Universities (Scotland) Act, 1889 [by Act]; to lie upon the Table, and to be printed. [No. 396.]
Shops Act, 1912
Copy presented of Order by the Secretary for Scotland, dated 22nd November, 1915, affecting Fleshers' shops in the burgh of Paisley [by Act]; to lie upon the Table.
INDICTMENTS BILL [Lords]
As amended, to be printed. [Bill 165.]
Oral Answers to Questions
War
Great Central Railway (Women Employes)
asked the President of the Board of Trade whether he has any information as to any body of officials of the Great Central Railway having attempted to influence or interfere with the right of lady clerks joining or abstaining from joining the Railway Clerks' Association, or any other association formed for the protection of employés; and, if so, whether he will take steps to see that the same complete liberty of action in this matter is secured to women who replace men engaged in military or other war service as is extended to the men themselves?
As regards the first part of this question, I must refer my hon. Friend to the answer which I gave on Thursday last to the hon. Member for Stockport, and as regards the second part, I am informed that women are in this respect in exactly the same position as men.
Is the hon. Gentleman aware that the Railway Clerks' Association contend that the facts do not bear out the answer to which he has referred?
If my hon. Friend likes to put a question I will answer it.
Timber Supplies (Committee of Inquiry)
asked the Parliamentary Secretary to the Board of Agriculture whether a Committee has been set up to inquire into the question of timber supplies; and, if so, whether he will state the terms of reference and the names of the members of the Committee?
Yes, Sir; and I hope shortly to be in a position to make a statement upon the subject.
Sugar Supply
asked the Parliamentary Secretary to the Board of Agriculture what was the amount in value of sugar, refined and unrefined, imported into the United Kingdom in the year 1914; whether these imports are below those of the average of the preceding five years; if he can give the figure for the first six or nine months of the current year; and whether he will state precisely what steps the Board of Agriculture are taking to render this country less dependent on imports from abroad of this commodity?
The reply to the first part of the hon. Member's question is £32,118,170; the reply to the second is in the negative; and the reply to the third is, for the nine months, £23,531,454. These figures are taken from returns compiled by the Board of Trade, to whom I would ask the hon. Member to address any further questions as to values or quantities of imports. In reply to the last part of the question, the hon. Member knows, I believe, generally the steps which have been taken to secure that the beet sugar factory at Cantley shall be enabled to continue its development; and he is probably aware of the difficulty which exists under the terms of the Development and Road Improvement Funds Act of giving any very definite assistance to any profit-making company.
Will the right hon. Gentleman say whether the efforts to maintain a single factory are the only efforts the Board of Agriculture have made to deal with the question of home-grown sugar in this country?
We have tried to give such assistance as we could to any other similar schemes for getting sugar beet started in this country, but not being able to give financial assistance to private profit-making companies, our power must obviously be limited.
Office of Works (Temporary Employes)
asked the First Commissioner of Works whether he proposes to terminate the Civil employment of any temporary men in his Department at present serving with the Navy in the North Sea on Home defence, or with the Army at home or in France, on the grounds that he has no work for them, seeing that he has applied this principle to three men serving in the Royal Naval Volunteer Reserve engaged in Home defence?
The answer is in the negative.
Is the right hon. Gentleman aware that three members of his staff have been dismissed, and must keep up their service in the Royal Naval Volunteer Force, where they are only paid nine-pence a day, and therefore it is very difficult for them to get employment which will adequately keep them in their position in life?
I think the hon. Member is referring to partial service in the Anti-Aircraft Corps in the neighbourhood of London. If anybody who has ceased to work in my Department on account of recent economies wishes to be discharged from that service to take up work elsewhere, then I will see that he gets that discharge.
Trade With Denmark
asked the Secretary of State for Foreign Affairs if an Agreement has been signed between His Majesty's Government and representatives of the Merchants' Guild of Copenhagen and the Industrial Association of Denmark; if so, whether he will state the terms of the Agreement; and whether it contains a provision that commodities may be re-exported from Denmark to belligerent countries?
On Thursday last I told the House that I would consult the Secretary of State, and if he thought there was no objection and that the Agreement might be put upon the Table of the House so that everybody might see what it was, that should be done. In fulfilment of that undertaking I have made inquiries, and find to my great regret that there are insuperable public objections to laying the Agreement on the Table. Under those circumstances I can only say that this, like other agreements of a similar nature, is based on the principle of making effective distinction between bonâ fide neutral and enemy oversea trade.
Would the Noble Lord say whether this Agreement is consistent with the policy of preventing Germany from getting those supplies which she needs to carry on the War?
Our policy is to prevent Germany getting them.
I said preventing."
I thought the hon. Baronet, by a slip of the tongue, said "permitting." Certainly this Agreement is consistent with our policy.
Is the Noble Lord aware that we are sending to Denmark from twelve to twenty times the quantity of tea required for her home consumption, and that a good deal of this tea is being sent to Germany?
Can the Noble Lord answer the last part of the question upon the Paper?
With regard to tea, I will make inquiries. I was not aware of the figures.
I will give them to the Noble Lord. Can he answer the last part of the question?
It is quite obvious that if I cannot give a full account of this Agreement it would be very improper for me to give any account of particular terms in it.
Will the Noble Lord inform the House whether this Agreement was submitted to and approved by the Cabinet before it was signed?
I do not know whether it was submitted to or approved by the Cabinet, but it was certainly submitted to and approved by the Admiralty and by other Departments of the Government. I am not sure about the Cabinet.
Is this not a further surrender of our sea power; is it not a distinct advantage to Germany and a distinct disadvantage to our country, and is it not likely to prolong the War?
I say, unhesitatingly, "No" to all these inquiries.
Is it not far more important to consider other matters than tea, which is not a good thing on which to fight?
I beg to give notice that I will call attention to this matter upon the first opportunity.
Entente Powers and Greece
asked the Secretary of State for Foreign Affairs whether he is yet in a position to make a statement as to the position of the Entente Powers and Greece?
I regret that I am not yet in a position to make a statement on this subject.
Peace Mission
asked the Secretary of State for Foreign Affairs whether his attention has been called to the proposed visit to this country of Mr. Ford and Mr. Bryan on a peace mission; and whether he will consider the desirability of notifying both these gentlemen, through the British Embassy in the United States, that their visit for such a purpose would be irritating and unwelcome to this country at the present time?
I understand that in this case passports have been issued for neutral countries only, and the contingency contemplated by the hon. Member does not arise.
May I ask the Noble Lord whether, although these people have left apparently in a storm of ridicule, he will have conveyed to them, in whatever neutral country they are, an intimation that they are not wanted here at any time?
Has the Noble Lord seen the statement made by Mr. Ford that he intends to come to this country, and has he anything to say to that?
No, I have nothing to say to it. I have not seen the statement.
Will the Noble Lord say whether any intimation will be made to these people, even if they arrive in a neutral country?
Speaking only for myself, I think it would be in the highest degree undignified for the Government of this country to send any intimation to a lot of ladies and gentlemen who, whatever their merits may be, are not particularly important.
Have they not a right of asylum, and cannot we certify them?
Foreign Surnames
asked the Secretary of State for the Home Department if he will give the date when it became an offence for anyone bearing a German or Austrian name to change it to a British name?
asked the Home Secretary if he will reconsider the question of allowing persons with foreign names to assume other names for the purpose of concealing their identity since the War; and if he will bring in a Bill to make it compulsory for such persons, for a period of ten years, when they use the assumed name, to put after it their former discarded name on every occasion so that the public may not be deceived?
The Aliens Restriction (Change of Name) Order, which made it an offence for an alien enemy to change his name, was passed on 12th October, 1914, and has been in operation ever since. I would refer the hon. Gentlemen to my previous answers on this subject, and particularly to an answer to the hon. Member for the St. Augustine's Division on 16th June last, and to my predecessor's answer to the hon. Member for Yarmouth on 10th March last.
Is the Order retrospective so far as the outbreak of war is concerned?
I do not think it is retrospective, but it operates from 12th October. We can hardly make such an Order retrospective, because there is a penalty as for a criminal offence.
Registered Companies (Enemy Control)
asked the Home Secretary what steps he proposes to take to deal with the registered companies under the cloak of which Germans and other enemies are enabled to continue their business and connections in this country whether the shares are nominally held by British investors or not?
Effective steps are taken by the Board of Trade under the powers conferred upon them by the Trading with the Enemy Acts to prevent any trading with the enemy by such companies as are referred to by the hon. Member, and consideration is being given to the question whether any steps should be taken after the War to prevent the registration of companies the majority of whose shares are under foreign control.
Will the Bill to be introduced in another place have the support of the Government, and, if not, do they propose to bring in legislation similar to that which has just been passed in the Australian Commonwealth?
I must have notice of that question.
English Press (Incitements to Rebellion in Greece)
asked the Home Secretary whether the incitements in the English Press to the Greek people to rebel against their king have been submitted to and approved by the Censor; and, if not, what action has been taken to punish their authors or to prevent their continuance?
I do not know to what incitements the hon. Member is referring.
The right hon. Gentleman has not observed the London papers then.
Munitions
Workmen's Fares
asked the Minister of Munitions whether he is making any arrangements to secure from the railway companies the issue of tickets at workmen's fares to workmen and women engaged on night shifts in the munition factories?
Arrangements have been made under which tickets at cheap fares are issued to munition workers in Government controlled establishments, whether working on the morning, afternoon, or night shifts.
Gratuitous Services to Ministry of Munitions
asked the Minister of Munitions if he will furnish a list of the persons whom he has engaged and who are giving their services gratuitously to the Ministry.
Yes, Sir, a list has been prepared and will be circulated with the OFFICIAL REPORT. The list does not include a large number of Civil servants, military and naval officers and railway officials who have been lent temporarily to the Ministry by their own Departments or authorities, and whose remuneration therefore involves no additional burden on public funds. Nor does the list include a large number of Members of both Houses of Parliament who are assisting the Ministry on Committees and in other ways. A list of such members was printed with the OFFICIAL REPORT in reply to a question on 28th October.
How many gentlemen from Wales are engaged in the Ministry?
I could not say, but quite a very small proportion.
The majority.
New Factories (Shortage of Labour)
asked the Minister of Munitions what steps are being taken to equip the new Government munition factories with men; and whether the starting of these establishments is likely to be delayed on account of the shortage of labour?
My right hon. Friend proposes to deal with this point fully in the course of the statement which he will make to the House later in the week.
Will the hon. Gentleman deal definitely with the point—not in vague, general terms, but definitely?
The hon. Member raises a very large number of important questions. I could not speak definitely upon all.
Officials (Leaving Employment)
asked the Minister of Munitions if managers and other officials of munitions works are under the same restrictions as workmen with reference to leaving their employment, or are they able to search for fresh employment whenever they please or to employ the threat of doing so as a means to obtaining an increase of salary?
Section 7 of the Munitions of War Act, which prohibits the employment in certain areas of persons who have been employed on munitions work, is limited specifically to "workmen." I am advised that it could not be held to apply to managers and officials.
Questions
Duty on Films
asked the Secretary to the Treasury if he will state the total gross amount of duty received from films and the amount of drawback claimed under the three heads up to the 30th November, and how much of his drawback has been allowed?
The Duty received is as follows:— No drawback has yet been paid, but claims amounting to about £17,000 are under consideration.
Defence of the Realm Acts
asked the Attorney-General for Ireland if he will say under what Statute Patrick Dyer has been sentenced to a month's imprisonment by a police magistrate in Dublin for agitating against Conscription at Tubbercurry, county Sligo, where Dyer's home is; why the proceedings were not taken in county Sligo; under what Statute is agitation against Conscription treated as illegal in Ireland while allowed in England; and what is the authority for the present habit of stipendiary magistrates in Ireland to palliate their sentences in political cases, as Mr. Drury did in this case, by assertions of what would be done in Germany in like cases?
Patrick Dyer was sentenced to one month's imprisonment under Regulation 58 of the Defence of the Realm (Consolidation) Regulations, 1914, for the doing of acts intended to prejudice recruiting in His Majesty's Army contrary to Regulations 27 and 48 of these Regulations. The facts in connection with the defence were submitted to the competent military authority, who, pending their determination as to how Dyer should be proceeded against, conveyed him to Arbour Hill Detention Barrack in Dublin. The competent military authority having afterwards determined that the accused should be proceeded against in a Court of Summary Jurisdiction, he was, in accordance with the Regulations, brought before a Dublin magistrate, who heard the case fully and made the order mentioned. The magistrate had no necessity to palliate his sentence and exercised his own discretion in making such observations as he considered proper, having regard to the circumstances of the case.
Is not the right hon. Gentleman aware of the fact that the sole offence this man committed was to agitate against Conscription?
No; there is a distinction, no doubt, between the two, but I am afraid this man failed to observe it.
Is it not the Irish Channel that makes the distinction?
It makes many distinctions, but not that.
Irish Volunteers (Permission to Drill Cancelled)
asked the Attorney-General for Ireland whether a magisterial notice has been served by the hands of the police on the members of any Volunteer Force in Ireland except the Irish Volunteers canceling permission previously given to them to drill, with a verbal warning against their drilling; if he can say at whose instance Messrs. John A. Coen, William Clarke, Patrick J. Duffy, and William H. Rice, magistrates at Ballaghaderrin, have issued such a notice and warning; at whose instance similar tactics are being practised in other places but only against Irish Volunteers; what the reason is for this discrimination; and what beneficial purpose the Government expect to achieve by it?
In the case referred to by the hon. Member the magistrates acted on their own initiative and on account of the Irish Volunteers hooting a very distinguished Irish soldier—Lieutenant Michael O'Leary, V. C.—on the occasion of a recent recruiting visit to Ballaghaderrin. I know of no other instance in which the magistrates have thought it necessary to take similar action.
Is the right hon. Gentleman aware that at the time the alleged hooting occurred the Volunteers at Ballaghaderrin were in an entirely different direction, engaged in a route march?
No, I am not aware of that.
Conviction of John M'galey (Tralee Petty Sessions)
asked the Attorney-General for Ireland if his attention has been called to the conviction at Tralee Petty Sessions of John M'Galey and his sentence of three months' imprisonment on the uncorroborated evidence of one military sergeant against the corroborated evidence of another military sergeant; by whose direction the police in that and other cases influenced the bench against parties and witnesses by asking offensively whether they belonged to the Irish Volunteers; what is their ground for suggesting that this is illegal or criminal; and by whose direction stipendiary magistrates in Ireland allow this conduct in the Courts over which they preside?
Accused has appealed, the appeal is pending, and the case being sub judice, it would obviously be improper for my right hon. Friend to deal with the matters in the hon. Member's question.
Are we again face to face in Ireland with the bad old system of police interference in a mean and persecuting way, and, if so, would it not be better, in the interests of the Government itself, to adopt some other system?
I am not prepared to suggest any other system than that which at present exists.
The right hon. Gentleman is ready to patronise the dirtiest work.
Royal Naval Aircraft School (Travelling Allowance)
asked the Secretary to the Admiralty whether his attention has been drawn to the withholding of travelling allowance to building workers employed at the Royal Naval Aircraft School, Kingsnorth; whether he is aware that the men first employed were paid from the time of embarking on the dockyard ferry at Gillingham Pier until their arrival back at the same point, that men taken on later were allowed two hours' pay for travelling time, and that now notice has been published that no allowance whatever is to be given; whether this action has been taken with Admiralty authority; and whether he will reconsider it and revert to the practice of booking the men's time from leaving to arriving back at Gillingham Pier?
I am aware that till recently travelling time was allowed for certain of the workmen employed at the Royal Naval Air Station at Kingsnorth coming from Chatham and Gillingham, and provision was made for their transport by the Admiralty ferry service. Free transport by ferry boat from Chatham and Gillingham to the Royal Naval Air Station continues to be provided. But it has been decided, after due notice, to withdraw the payment on account of travelling time, and thus follow the normal practice prevailing at other out-stations.
Recruiting
Foreign Newspaper Criticism
asked the Home Secretary whether his attention has been drawn to the reproduction in the "Cologne Gazette," of 9th October, of an article contributed to the "Daily News," and presumably printed by that journal as part of their campaign against compulsory military service; whether he if aware that the article in question occupied a column of the "Cologne Gazette," and was headed, "England's Limited War Strength"; and whether he proposes to take any action in the matter?
Yes, Sir. The article which was thus reproduced was an article by Mr. Arnold Bennett setting forth considerations in favour of the voluntary system of recruiting. I see no reason to take any action in the matter.
Does not the right hon. Gentleman think this sort of article is likely to hearten the enemy?
I should not have thought they would necessarily be heartened by learning that in the opinion of some people in this country we can exert our full strength by relying upon the voluntary principle.
Press Publicity Campaign
asked the Secretary to the Admiralty who is responsible for the Press publicity campaign for recruiting on behalf of the Royal Navy, Royal Marines, and Royal Naval Division?
Arrangements for the publication of any articles in the Press in connection with recruiting for the Royal Navy and the Royal Marines are under the control of the Inspector of Recruiting, Colonel G. M. Campbell, Royal Marine Artillery. The Director of Recruiting for the Royal Naval Division, Commodore Sir R. H. Williams-Bulkeley, controls any similar arrangements in connection with the Division.
Training College Students
asked the President of the Board of Education whether students in training colleges supported by Govern- ment funds who are of military age but have not enlisted will continue to enjoy the advantages of State-aided education?
The Board have asked training college authorities to inform them of the number of students in each college who offer themselves for military service under Lord Derby's scheme and are accepted as physically fit. Until these facts are known the Board will not be in a position to consider the possible alternatives for dealing with the students who remain.
Eyesight Tests
asked the Under-Secretary of State for War whether he is aware that intending recruits are not being accepted by some recruiting committees at the present time because they wear glasses or pince-nez; and will he state the reasons for this action?
The question of eyesight is dealt with, not by recruiting committees, but by medical officers. Men are not rejected because they wear glasses, but because their sight does not come up to the required standard.
Is the right hon. Gentleman aware of a case three, weeks ago where an individual presented himself for recruitment who was not accepted because he wore glasses, although his sight was perfect; and is he aware that this same gentleman was a former Territorial, a first-class shot—
The hon. Member should give notice. The right hon. Gentleman cannot be expected to answer these questions without notice.
Lord Derby's Scheme (Applications for Commissions)
asked the Under-Secretary for War whether anyone enlisting in his group and attested under Lord Derby's scheme is in any way prejudiced in applying for a commission until he is attached to a particular unit?
asked the Under-Secretary of State for War whether he will inform the House if members of Officers' Training Corps who have finished their course and have been certi- fied by their commanding officer as fit for commissions, but who for some reason or other remain ungazetted, are to be starred under Lord Derby's scheme, or what is to become of them?
The answer to the hon. Gentleman the Member for Devenport is in the negative. As regards Question No. 44, any member of the Officers' Training Corps selected to receive an immediate commission will, of course, be commissioned without delay. Others not so selected should be attested under Lord Derby's scheme. It is the present practice to give commissions only to men who gain experience in the ranks, and there is nothing to prevent such members of the Officers' Training Corps who are not selected for immediate commissions from presenting themselves for immediate service with the Colours without waiting for their group to be called up.
Am I to understand from that answer that boys of eighteen at public schools who are in Officers' Training Corps should now attest?
If they do so they will be trained, and retained until they are nineteen. There is no objection to their doing that.
Is it necessary for them to attest?
No, Sir; it is not.
Can the right hon. Gentleman say that if a man who is now of military age does not get attested he will not be eligible for a future commission? To make it necessary that he should be attested will the right hon. Gentleman say, "If you do not attest now your chances of getting a commission its future will be practically gone?"
A man has to take his chance. If he is attested, and if he is a person suitable for a commission the chances are that that suitability will demonstrate itself in fullness of time and he will be suitably rewarded.
Are these members of Officers' Training Corps, who are not to get commissions under Lord Derby's scheme or not?
I suppose we are all under Lord Derby's scheme?
Oh, no, I wish I were.
It depends upon our suitability. I am not quite sure that I understand what my hon. Friend wants to ask me?
Is there any chance of an Officers' Training Corps being used by a very small minority of its members as a hiding place for shirkers—people waiting for soft jobs?
No. I think my hon. Friend may rest assured that that is not the case.
May I bring to my right hon. Friend's notice one or two instances which seem to illustrate this point?
Yes.
Yeomanry (Second-Line Units)
asked the Under-Secretary for War whether it is now possible to give facilities to second-line Yeomanry units to recruit at least up to their nominal strength; whether, in view of the fact that most of these units are from 25 per cent. to 40 per cent below strength, they are still expected to fulfil the three purposes of Home defence, possible foreign service, and conditional draft-finding units; and whether he will at once, in the interest of economy and efficiency, either amalgamate these units or enable them to be made up to full strength?
The Army Council have after careful consideration decided that the filling up of the reserves of the Infantry is of the most pressing importance and they have consequently shut down recruiting for the Yeomanry except in the case of those Yeomanry regiments whose first line is now serving abroad as Infantry.
Will the right hon. Gentleman answer that part of my question which refers to the second-line units which are in many cases nearly 50 per cent. under strength, and asks him whether, as there has been no more recruiting, he proposes, in the interests of efficiency and economy, to amalgamate these units or enable them to be made up to full strength?
The hon. Member asks me a series of most important and difficult questions. The difficulty is to find enough men to fill up the ranks, and while the third-line units are not full I can throw out little prospect to my hon. Friend that the second-line units will receive recruits.
Am I to understand from that that there are no proposals, and that no steps are likely to be taken to amalgamate the units that are not up to strength?
No; I should not like my hon. Friend to run away with that idea.
Advisory Committees
asked the Under-Secretary for War whether he is aware that in certain cases the local Advisory Committees set up for the purpose of working Lord Derby's scheme are insufficiently acquainted with the scheme itself, and that in one case the Committee was unable to give an applicant any information on the points about which he was requested to apply for information to the Committee; would he consider the advisability of enlarging these Committees and inviting magistrates to serve instead of leaving the matter in the hands of individuals who apparently neither possess the necessary public or business knowledge nor are even acquainted with the details of that part of the scheme that they are appointed to administer; and will he explain the procedure to be adopted by an applicant who desires to appeal against the decision of an Advisory Committee?
I am not quite sure that the hon. Gentleman's remedy for the alleged shortcoming of the Committees he mentions— i.e., the enlargement of their numbers—would be an advantage. I should point out that the hon. Gentleman is himself somewhat mistaken as to the function of the Advisory Committees. Their function is to advise the War Office representative what action he should take before the local tribunal, but they are not competent to give any decision.
Is it the Committee's business to understand their business before advising the War Office Committee?
Yes. I would not suggest for a moment that that was not part of their business, as I think it is part of the business of the War Office Committee to understand the duty of the Advisory Committee.
Questions
Alien Enemies (Property in British Empire)
asked the Secretary of State for the Colonies what steps, if any, have been taken by the Government in connection with the wharves in Kingston, Jamaica, owned by German steamship companies; and if the Government contemplate introducing legislation by which all real estate owned in the British Empire by alien enemies shall be acquired and the subjects of countries at present at war with us debarred in the future from owning any real estate in the British Empire?
So far as I am aware, no wharves are owned by German steamship companies in Jamaica. A small slip dock, formerly the property of the Hamburg America Company, has been taken over by the Government for the use of the naval and military authorities for the period of the War. The same company were co-lessees of a railway pier at Kingston jointly with a neutral company. The Government has, by agreement with the neutral company, resumed possession of this pier, and the question of future disposal of both dock and pier after the termination of the War is receiving consideration. The last part of my hon. Friend's question raises issues too wide to permit of satisfactory discussion within the limits of a question.
Gold Coin in Circulation
asked the Chancellor of the Exchequer the amount of gold coin which circulated in this country in the year 1914 prior to the outbreak of War; and what is the amount of gold coin in circulation in this country at the present time?
The amount of gold coin held by the banks (including the Bank of England), according to returns furnished to the Master of the Mint, was:—
Can the right hon. Gentleman give details as to the basis on which they arrive at the estimate of the gold in the hands of the public?
I assume that the estimate is founded upon the knowledge of the amount of gold imported in the period and the amount of gold which has been exported in the same period. The balance is assumed to be in the hands of the public.
Are we to understand that there are only £3,000,000 less in circulation in the hands of the public this year than last year?
That was on 30th June. I assume that there is much less in the hands of the public now, but I have not the figures.
War Savings Committee (Leaflets)
asked the Chancellor of the Exchequer whether he has arranged for the distribution of Leaflet No. 4, issued by the Parliamentary War Savings Committee and distributed to working people in mills and workshops, which advises people to eat less meat, to be careful with their bread, to use home products wherever possible and to use them sparingly, and to grow their own vegetables, to the guests who were present at the recent Lord Mayor's banquet; and, if not, whether he will do so at the earliest opportunity?
I have no reason to doubt that, having regard to the wide circulation of the leaflet in question, it has already been brought to the notice of the persons referred to.
Savings Bank Deposits
asked the Chancellor of the Exchequer whether he will consider the advisability of raising the interest now paid on deposits in the Savings Bank to the level of that paid to investors in the War Loan, so as to prevent withdrawals and encourage economy.
The hon. Member's suggestion will receive consideration along with the other proposals which have been made for the encouragement of saving.
Royal Irish Constabulary
asked the Chief Secretary for Ireland whether he has brought under the notice of those devising measures of retrenchment in Ireland the scope for their policy in the police force, some county inspectors having only sixteen stations to control while others have up to ninety-one stations; some district inspectors having only three stations each to superintend while other district inspectors are efficiently controlling fourteen stations each; one policeman being maintained per 202 of the population in some counties while in other counties one policeman is sufficient per 732 of the population; whether all ranks of the police force will be reduced to the minimum found to be sufficient; and what measures he is taking to secure for Irish purposes the benefit of all economies effected in Ireland?
The possibility of effecting economies in the cost of the police has engaged my attention, and, as shown by my replies to hon. Members' questions of the 19th July and 26th October, considerable savings have already been secured. There is now no county inspector having only sixteen stations, and no district inspector in charge of only three. It would not, however, equalise the work of county inspectors or district inspectors to divide the number of stations in the country equally between them, nor would it tend to economy or efficiency to distribute the police solely on the basis of population. The answer to the second part of the question is in the affirmative. As regards the third part, economies made during the War will lessen the indebtedness and therefore the taxation of the United Kingdom at the end of it, and Ireland will be benefited in proportion to her share of this taxation.
Is the right hon. Gentleman in a position to question the distribution of the rank and file of the police?
No.
Officers (Rations Allowance)
asked the Under-Secretary of State for War if he will state for what reason the allowance in lieu of rations to officers at the War Office has been suspended since April last; whether his attention has been directed to paragragh 119 of the Regulations for mobilisation, in which it is laid down that on a general mobilisation field rations and forage are to be issued to all ranks from and including the first day of mobilisation; and whether there is any regulation or order differentiating between officers at the War Office and other officers of His Majesty's Army?
The House of Commons is informed by foot-notes in the Army Estimates that the rates of pay given to officers holding appointments in the War Office "include all emoluments with the exception of pensions for wounds and rewards for distinguished services." When the issue of the ration allowance came to the notice of the accounting officer he found himself unable to continue it in the absence of an order by superior authority, and it was therefore suspended.
West Surrey Regiment (Ejectment of Family)
asked the Under-Secretary for War whether his attention has been called to the case of Private George Edmund Gunter, of the Royal West Surrey Regiment, against whom an ejectment order has been granted in respect of a cottage in Church Street, Godalming; whether he is aware that this soldier has taken part in the War and is now a prisoner of war in Germany; whether he is aware that the eviction of the soldier's wife and three young children will take place at Christmas, owing to arrears of rent due to the illness of the children and to the expense involved in sending parcels to the prisoner husband; and whether, in view of all the circumstances, steps can be taken to keep together this soldier's home until his return?
Yes, Sir, my attention has been called to the case mentioned, the facts of which are substantially as stated in the question, except that I am not aware of the reasons why the rent has fallen into arrears. The House, however, will be glad to hear that I have ascertained from the police superintendent at Godalming that the woman's home will not be broken up, and steps are being taken to provide another house for her. I should like to state as evidence of the good feeling of our soldiers that the men at Witley Camp have subscribed in aid of this poor woman and her children.
Union of Democratic Control
Memorial Hall Meeting
had given notice of the following question: To ask the Under-Secretary of State for War whether he is aware that a considerable number of soldiers wearing His Majesty's uniform were invited and organised by means of forged tickets to break up a meeting of the Union of Democratic Control at the Memorial Hall on 29th November; whether this is contrary to the Regulations; and whether, seeing that the utilisation of members of His Majesty's Forces to participate in acts of mob violence is likely to discredit the Army in the public estimation, he will take steps to see that orders are issued to prevent soldiers from accepting similar invitations in future?
Would I be in order, in view of the mischievous and unpatriotic nature of this and the like questions, in moving that the hon. Member be not heard?
The nature of the answer which will be given will probably sufficiently dispose of it.
I will deal first with the specific point raised in the question, and then, with the permission of the House, add one or two remarks which will throw light on this matter. Careful inquiry which has been made at all stations concerned fails to disclose any knowledge of invitation to soldiers or organisation by means of forged tickets with a view to the breaking up of the meeting of the Union of Democratic Control on the 29th November. An Assistant Provost-Marshal of the London District who was present in plain clothes throughout the meeting examined the tickets held by one or two of the stewards which had been collected by them, and could see no signs of forgery in any of them. He states, however, that the checking of tickets at the doors was very incompletely carried out, and that it was quite possible for soldiers or other persons to enter without tickets.
My hon. Friend appears to make an allegation in the question against some unnamed person, but I have entirely failed to find any evidence of any organised steps having been taken of the kind he alleges.
On behalf of the Army, however, on the members of which this question, if not contradicted, constitutes a serious reflection, I would state that such disorder as took place seems to have originated from an ill-considered act upon the part of two of the persons on the platform. The meeting was perfectly quiet and orderly until one of the stewards, apparently on the instruction of the hon. Member for Leicester, attempted to remove four or five Colonial soldiers who were seated in the front of the hall. At the same time another person on the platform said in a voice sufficiently loud to be heard "Let that accursed military element be got rid of before we start." Similar remarks were audibly made in Teutonic accents by three or four of the stewardesses.
I am informed that but for these provocations the meeting would have passed off without disorder, and, even as things turned out, the behaviour of the soldiers is stated by civilian sympathisers with the union who were present to have been greatly restrained and entirely admirable.
Arising out of the right hon. Gentleman's reply, which, I may say, is a tissue of misrepresentations—[HON. MEMBERS: "Order!"]
That is not a phrase that we are accustomed to in this House. The hon. Member will remember that at the present time all that he is able to do is to ask a question, and not to make statements of a controversial character.
I withdraw the expression, and beg to give notice that I shall call attention to the matter on the Adjournment of the House to-night.
The answer which I have given to the House is the report by an inspector, whose name I can give my hon. Friend.
As my name has been mentioned, may I be allowed to say that the reference to me is absolutely without foundation. I never said anything of the kind.
Questions
Royal Aircraft Factory
asked the Under-Secretary of State for War whether a neutral journalist was recently permitted to inspect new types of British aeroplanes at the Royal Aircraft Factory; and, if so, whether he was taken for a trip over areas of military importance; and whether steps were taken beforehand to ascertain that his sympathies were wholly with the Allies and that his knowledge of aeroplane design was so slight as to preclude the possibility of information useful to the enemy being transmitted to foreign countries?
The answer to the last three parts of this question is in the affirmative. As to the first, the newest types were not shown.
asked the Under-Secretary of State for War (1) whether a party of journalists were recently conducted round the Royal Aircraft Factory at Farnborough; and, if so, whether any of these were taken for flight on Government aeroplanes, and will he say whether they represented newspapers of our Allies or of neutral countries; whether similar privileges are accorded to British journalists in order that they may impress the British public with the efficiency of the nation's aircraft; and (2) whether a visit of journalists recently to the Royal Aircraft Factory was arranged primarily by the Department of Military Aeronautics or whether it was arranged by the chief official or officials of the Royal Aircraft Factory with or without the permission of the Director-General of Military Aeronautics?
This visit was one of a series of visits to various centres arranged by the Foreign Office and War Office in conjunction, with a view solely to making some of our Allies and Neutrals better acquainted, through the medium of the newspapers of their several countries, with the efforts being made by this country in the common cause, and so removing wrong impressions fostered by the enemy. These journalists represented both Allies and Neutrals. They visited a portion of the Royal Aircraft Factory and other centres of activity bearing on the prosecution of the War, including a private aeroplane factory, a private manufacturing establishment, and some munitions factories. Somewhat similar facilities have been given from time to time to representatives of British newspapers, and these may be repeated; but it must be borne in mind that the staffs of all these establishments are already very heavily pressed by their normal work, and have little time to spare for superintendence of visitors.
asked whether it is the policy of the War Office to advertise the products of the Government aeroplane factories in the foreign Press; and whether, in cases where it has been possible to institute comparisons, aeroplanes which are the product of independent design have not usually been shown to be superior to those of Government design?
The answer to both parts of the question is in the negative.
Is there not a tendency in this Department rather to discourage new types, even if they are advanced types, on the ground that they are not in conformity with certain models which are being built?
I do not think that there is any ground for believing that the Royal Aircraft Factory discourage new types. On the contrary, they are constantly producing new types and constantly sending out specifications to the trade.
Staff Duties (Training of Officers)
asked the Under-Secretary of State for War whether he will state what arrangements, if any, exist at the present time to train able and promising officers of the New Armies in Staff duties, and how many such officers are undergoing now this kind of instruction?
I have indicated in previous answers given to my hon. Friend the methods by which officers are selected for training in Staff duties and also stated that applications from officers of the New Armies are considered equally with those from others. As regards the second part of the question, I am informed that 50 per cent. of the officers now being trained at home in Staff duties are from the New Armies. These are in addition to such officers as are being trained in France, where a special course is being instituted, but as to the number being trained in France I have no information.
Orders in Council (Publication)
asked the Prime Minister whether he is aware that on 14th March, 1907, Sir Henry Campbell-Bannerman admitted that it was the rule that all Orders in Council should be published in the "London Gazette," and stated that the rule had been broken in practice, and that he would consult with the Lord President of the Council as to the course to be adopted in future; and whether an assurance can be given that all Orders in Council have been published in the "London Gazette" since 14th March, 1907, in accordance with the rule?
I have already circulated an answer to this question. But I understand the hon. Member wishes to know the exact meaning of the phrase "of the character described" in my answer. It means Orders made tinder the Naval and Marine Pay and Pensions Act, 1865, to which the hon. Member referred in the question he addressed to my predecessor on the 14th March, 1907.
Is it in war time or peace time?
Certainly in war time; possibly in peace time.
Does the right hon. Gentleman recognise the danger of Orders in Council being passed which may remove Parliamentary control?
I am well aware of that.
Near East (Ministerial Statement)
asked the Prime Minister whether, if he is satisfied that there is a general desire on the part of the House that a Ministerial statement should be made on the War situation in the Near East previous to the adjournment for Christmas, he will accede to the request?
As I said last week, I am afraid that I can give no undertaking, but if there be such a general desire it will, of course, receive careful consideration.
Allies (Military Co-Operation)
asked the Prime Minister whether the arrangements for closer military co-operation already announced with regard to France have been completed and extended to all the other Allies; and whether he can state the extent to which this will be a change from the system hitherto prevailing?
Arrangements for closer military co-operation have been completed with regard to France, and are under consideration with regard to other Allies. It would not be in the public interest to announce details of these arrangements, which might be of value to the enemy.
"Times" Newspaper
asked the Prime Minister whether, in view of the fact that the "Times" newspaper is regarded on the Continent as having a semi-official, if not official character, and in view of the importance of preventing the dissemination of news that misrepresents the position of this country and the Allies, he will consider the advisability of taking it over and running it as a Government organ until the close of the War?
No, Sir. I am disposed to think that the Government have sufficient responsibilities without taking over such a serious addition.
Staff Appointments
asked the Under-Secretary of State for War whether he will say if, speaking generally, all Staff appointments are reserved exclusively for officers of the Regular Army, including those old officers who have been brought back out of retirement; whether any officers of the New Army have been nominated for appointment to any brigade, divisional, or Army corps staff on active service; and, if so, how many such officers are at this moment so employed?
The way I would put this is that, speaking generally, Staff appointments are reserved exclusively for those officers who have the most knowledge and experience. Such officers are, in present circumstances, found for the most part in the Regular Army. There are, however, several officers who have only temporary commissions employed on the Staff and there is no bar to the selection of such officers for Staff employment if they are considered suitable and are recommended. I am afraid I cannot undertake to have a list of these officers drawn up.
Are any of those officers to whom my right hon. Friend refers on active service?
Oh, yes, I think so; but perhaps my hon. Friend will give me notice.
Mediterranean Expeditionary Force
asked the Prime Minister whether he is in a position to give any information as to the results of Lord Kitchener's visit to the Eastern Mediterranean?
No, Sir.
asked the Undersecretary of State for war if the percentage of sickness amongst our troops oil the Gallipoli Peninsula is greater than the percentage of sickness amongst the French troops; and if he can state if the French medical authorities consider that the ration of claret served out to the French troops has caused a good deal of immunity from a prevalent disease?
The Army Council have no information as to the comparative immunity from sickness of the British and French troops on the Gallpoli Peninsula, nor whether the ration of claret stated to be served out to the French troops has proved salutary as a prevention of disease. Even if this were so, it does not, I think, follow that like results would follow if claret were served out to British troops, nor am I perfectly certain that such a step if adopted would commend itself to all Members of this House.
Apart from Members of this House, is there any member of the medical profession who recommends it?
Is the right hon. Gentleman aware that the late M. Pasteur made inquiries and investigations into the value of claret, and found it an exceedingly good thing for killing germs of all kinds?
I quite sympathise with that statement.
Is the right hon. Gentleman aware that a Commission of eminent medical men have been considering this very subject, and that it was on their re- commendation that French light wines were supplied?
Is the right hon. Gentleman aware that some of our soldiers have exchanged their jam for French claret?
Motor Wagons (Defective Steering Chains)
asked the Home Secretary if his attention has been called to the death of Miss Norah Newton, of Bradford, as the result of an accident due to the defective steering chain of a motor wagon which had been temporarily repaired by a bolt; and whether, having regard to the fact that several fatal accidents recently occurred within the period of a few weeks as the result of using defective steering chains on motor wagons, he will take steps to bring owners of these vehicles to a sense of their responsibility in these matters?
My attention had not previously been called to this case. I have made inquiry into the circumstances, but I am afraid that there is no action which I can usefully take in the matter. I trust proceedings in the Coroner's Court and the opinion expressed by the jury in this case will bring home to owners of vehicles their responsibilities in this matter.
Orders of the Day
Business of the House
Will the Prime Minister state the business for Wednesday and Thursday?
On Wednesday, we shall take the Committee stage of the Increase of Rent and Mortgage Interest (War Restrictions) Bill.
On Thursday, we shall take the Third Reading of the Finance (No. 3) Bill.
On both days we hope also to take some of the smaller Orders on the Paper; and it is possible that on one or other of the two days we may be able to introduce some of the other measures which we have promised.
Will the Parliament and Registration Bill be introduced this week?
That comes within the last category of my answer.
Finance (No. 3) Bill
As amended, considered.
NEW CLAUSE.—(Power for Soldiers and Sailors to Claim Pre-War Rates of Income Tax in Certain Cases.)
(1) Where any person who, during the current Income Tax year, has served or is serving as a member of any of the naval or military forces of the Crown, or in service of a naval or military character in connection with the present War, for which payment is made out of money provided by Parliament, or in any work abroad of the British Red Cross Society or the St. John Ambulance Association, or any other body with similar objects, proves that his total income from all sources does not exceed three hundred pounds, and that he is assessed or charged to Income Tax, or has paid Income Tax either by way of deduction or otherwise on his pay in connection with any such service, he shall be entitled to claim such relief from Income Tax as will reduce the amount of Income Tax on that pay to the amount which would have been payable at the rate in force immediately before the commencement of the present War.
(2) The relief given under this Section shall be in addition to and not in deroga- tion of any exemption or other relief or abatement under the Income Tax Acts and shall not be subject to the reduction of exemption and abatements for which provision is made under this Act; but relief in respect of earned income shall be given in respect of the pay by reference to the rate in force immediately before the commencement of the present War; and, in calculating any earned income on which relief is to be given, any deductions from earned income made under Sub-section (2) of Section nineteen of the Finance Act, 1907, shall be made primarily from the pay.
(3) All the provisions of the Income Tax Acts which relate to claims for exemption or relief, or the proof to be given with respect to those claims, shall apply to claims for relief under this Section and the proof to be given with respect to those claims.
Brought up, and read the first time.
I beg to move, "That the Clause be read a second time."
I may explain, Sir, that this new Clause is to carry out an arrangement made on the Committee stage of the Bill.
Clause read a second time.
I beg to move, in Subsection (1), to leave out the words "proves that his total income from all sources does not exceed £300, and that."
The Chancellor of the Exchequer has stated that this new Clause is to carry into effect an agreement which was arrived at in Committee, but I am prepared to state that it was made somewhat hurriedly at the end of an exhaustive Debate. I want to deal with two questions only. First of all, in regard to this concession which the Chancellor of the Exchequer has made, I wish to say that I am grateful for it so far as it goes, but in reality in respect of many officers who are on active service at the front it is a sham. I am sure that was not the intention of the Chancellor of the Exchequer. I am bound to point out to him that to require an officer on active service to prove his total income from all sources whose income does not exceed £300—although it may be possible in the case of officers serving at home, who receive the various forms from the Commissioners of Income Tax—is really more than he can undertake. He has no records with him, or does not trouble about what dividends he may have from some small investments in public companies or otherwise. Indeed, it is a matter of considerable difficulty to those in civil life to find out precisely what has been the effect of the War upon their income, and I do not believe that one officer in ten serving in Gallipoli or Flanders—when he finds what steps are to be taken to prove his claim, and the frequent applications that come for further particulars" from the Commissioners of Income Tax—will even make any application at all. On the 24th November I asked the Chancellor of the Exchequer, in relation to officers whose income is below £300, what exactly was the amount involved by providing that soldiers and sailors whose income did not exceed £300 should be relieved of all liability to pay Income Tax at any higher rate than that provided in Section 3 of the Finance Act, 1914—that is 9d. on earned income, instead of the rate, which is double, of the Finance Bill of this year, and which would be 1s. 6d., plus further increases. I think, so far, the only point I have to meet is that there are a certain number of officers who are in receipt of quite large incomes. They are very limited in number, and I ask hon. Members because they may be giving a concession to a very few people who really do not need it not to take away the real value of that concession in certainly nine-tenths of the cases of all officers on active service. There is then the question of limit. I think the House was under the impression, when this concession was given, that it really covered the pay of officers up to the rank of captain so far as the Army is concerned, but it does not do so. It cuts right across the rank of captain, and in some branches of the Service does not give the concession to captains. Let me give an example. A captain in the Royal Engineers gets total pay of £320, and a captain in the Royal Garrison Artillery gets £266. I cannot see in any logic or reason why the concession should be granted to the Royal Garrison Artillery and why you should leave out the Royal Engineers. In the same way we find in other branches that some are in and some are out. Thus the Guards are out and the Army Service Corps in by a few pounds.
I have had a complete list, for which I am indebted to Messrs. Cox, and taking into consideration that increased pay is given after three years' service and the rank of captain on a total service of twelve years, I find that the concession would apply to the Household Cavalry, the Cavalry and Infantry, and would leave out the Foot Guards, the Royal Artillery, the Royal Garrison Artillery, the Royal Horse Artillery, and it would also leave out all captains of the Royal Engineers, if you took into consideration their allowance as well as pay. I have put down an Amendment to make the sum £400, and I tell the House frankly on looking very closely into the matter I am not satisfied with £400, and I want to add a few pounds more principally for this purpose, or at least it is one of my main purposes. I do not think the House would care to leave out in the giving of this concession officers in the Navy who are of the rank of commander and who get £401 10s., and still less so those of lieutenants on the Staff of the Admiralty patrol, who get from £400 to £430. Therefore if the House entertains the proposal I have put before them. I should like to ask leave to amend my figure to £450. The alteration will make very little difference to the total cost. The estimated cost for £300 was given as £590,000, and in the second class as £635,000, and for £400 at £720,000. Therefore, in the second class it would only mean an increase of £45,000, and in the full £400 of £85,000 more. We have at last, after a good deal of effort on the part of some hon. Members and myself, got a concession which gives the main principle that it is not reasonable to ask men who are on active service, risking their lives, to pay a substantial part of their own pay and reduce that pay below the level which the War Office and the Admiralty considered was adequate for time of peace. When we have got that main principle conceded I do ask the House to pass my Amendment and to make it a practical concession which officers can use and also to fix it at such a level that it would really cover the cases of the bulk of the officers of the lower grade. I think I can fairly claim to include commanders who are in large proportion married men and who have to support a wife and family as well as themselves, in many cases out of their pay. I hope the Chancellor will not be unmoved by the appeal, and that if he is we shall have the opportunity of dividing with perfect freedom on the question.
I hope the Chancellor will consider the proposal as to raising the limit to £400, and I speak particularly of the Navy. I pointed out the other day that those officers in the Navy cannot get on shore at all during the War; they have all the expense of educating their children, and the cost of everything has gone up. The commanders have ships worth millions in their charge, an immense amount of human life, and the amount of responsibility to the State which is upon them should be taken into consideration in this small sum involved in the difference between raising £300 to £400. I do most earnestly hope that the Chancellor will look into the question, and that he will be able to give us an assurance that he will increase the amount to £400.
The hon. Member who moved this Amendment and the Noble Lord who seconded it feel so strongly on the subject that I am not altogether surprised that they have made a further effort to obtain an additional concession. I hope they will not feel surprised either if I on my side feel that I have certain ground for complaint. It is not that I gave way upon the principle of this Amendment when I undertook to introduce a new Clause on the Report stage. After a very long Debate, opinion was not altogether on one side. In fact, a considerable number of Members on both sides were opposed to my making any concession at all. They did not speak so fully, but, if I could judge from the cheers, there were a considerable number who were opposed to any concessions being made. It was not upon the principle that I gave way, but upon an agreed Amendment, and I undertook to bring up a new Clause freeing from Income Tax on the War basis officers' incomes up to £300 a year where the officers were not in possession of private means bringing the amount above that figure. I have carried out my promise, at a cost to the Exchequer of £590,000 a year. I am now asked to make what the hon. Member for Devizes calls a reality of the concession by increasing the amount by a further £120,000. I really do not think I ought to be asked to do so. I certainly could not recommend the House to accept the proposal. This was made, I understood, as an agreed arrangement between the two sides, and therefore in this Bill I think it ought to stand.
We did ask for the £400 limit; we are not now springing it on the right hon. Gentleman as a new proposal.
I would not for a moment suggest that the Noble Lord was in any way guilty of breaking away from the arrangement. I opened my speech by stating that I knew how strongly the Noble Lord felt on the subject, and that I was not surprised that he should make one more effort to obtain a further concession. But the Noble Lord must remember that the Amendment was withdrawn on my undertaking to bring up this particular Clause. The hon. Member for Devizes says that this will greatly complicate the applications of officers for reduction of Income Tax. I have consulted those who are aware of the facts, and I am told that the great bulk of the officers already apply for reductions of Income Tax. The hon. Member is quite mistaken in thinking that this new Clause will throw any additional burden upon them. The officials take every means they can to facilitate applications, and they make the machinery as simple as possible. In fact, I believe they were brought to. book for having exceeded their powers under the law in their efforts to make repayment easy. The Clause will not add any complications to the practice, as far as these officers are concerned. I must therefore ask hon. Members to be content, at any rate for this Bill, with the arrangement that was come to, and not press their Amendments further.
I am very much surprised to hear the Chancellor of the Exchequer's explanation, because I was present throughout the Debate the other day, and I cannot recall the opposition to the concessions being granted. Nor did I realise that this was an agreed Amendment. We asked the right hon. Gentleman at the time to increase the amount to £400, but he refused to do so. In the Debate on the 17th November the Chancellor of the Exchequer based his whole argument on the plea that the hardship of Income Tax is no greater in the case of the soldier than in the case of the civilian. He refused to take into account the extra insurance premiums that a soldier has to pay on account of war risk. He told us that a man does not pay Income Tax on that portion of his income represented by the insurance premium. That is all very-well, but that is a mere flea-bite in comparison with the amount a soldier has to pay. I will give one concrete instance of what a soldier has to suffer in this respect I take the case of a major, whose pay a few years ago was 16s. a day, less 1s. in the £ Income Tax when he first insured. He drew at that time a total of £277 12s. a year. In order to provide for his wife he insured his life for £3,000. At that time the rate of interest was probably about 3½ per cent., so that that would bring his wife about £2 a week. That is not a large insurance for a major to provide for his wife. For this insurance he had to pay £63 15s., leaving £213 17s. for him and his wife to live on. He was ordered to India, and Had to pay £30 extra premium for Indian risks. He came back from India, and when the present War broke out in order to save his insurance he was called upon to pay an additional war risk premium of £5 5s. per £100, making a total of £157 10s. in addition to the £63 15s. Therefore, to save that insurance, he had to pay £221 5s. out of a total income of £277 12s., leaving £56 for himself and his wife to live on. Since then his pay has been increased to 18s., which brings him just over the £300 limit. Is it right that that solder should have to pay this extra Income Tax? The positions of the soldier and the civilian are absolutely different, and for the Chancellor of the Exchequer to plead that they come on the same terms is unjust and wrong. You must give different treatment to the soldier. I appeal to the Chancellor of the Exchequer to reconsider the matter in the interest of the soldier. Majors and commanders ought to be free from this extra charge. The major whose case I have instanced is, unfortunately, now lying with a shattered leg, and goodness knows whether he will ever do anything again. To say that that man is on the same basis as a civilian is utterly unjust. This man has given his all to the country. Is it fair to tax him in this way? I ask the Chancellor of the Exchequer to increase the limit to £400. I shall certainly give my vote in its favour if the Amendment goes to a Division.
4.0 P.M.
I can quite understand that there may have been considerable difference of opinion on this subject on the Committee stage, because many of us feel that this is not the best way of dealing with questions of pay in the Services. If this method be adopted you will probably find later on that it will be quoted as a reason for refusing consideration to the matter of an increase of pay. I should like to see that the allowance, such as it is in this case, is made really substantial, and I should be prepared to see it raised to the £400 limit proposed in this Amendment There is one small matter of administration to which I should like to call the attention of the right hon. Gentleman. I am told by men in the Navy that the paymasters already have knowledge of the officers who are under £400 per year income, and that, therefore, nothing will be easier for them, if the House adopts this Amendment, than to give effect at once to the concession. On the other hand, I do not know whether, if the £300 limit, as proposed by the right hon. Gentleman, is adopted, there will not be very great difficulties, because the paymasters have no knowledge of the men who come between £300 and £400. Inquiries, therefore, will have to be made in every case, and it may very well be that it will be impossible to give effect to this concession at all within the present year. If the Chancellor of the Exchequer can see has way to accept these Amendments—both of them, I hope—then I take it there would be no difficulty in presenting these gallant men, whose incomes are between £300 and £400, with a nice little Christmas-box of £5. I really believe a very great deal of trouble, and probably a very great deal of expense in administration, will be saved thereby, because, as the House knows very well, every change in administration induces extra work, and the eventual result is that you have to pay a great many more officials. It may very well be that a considerable amount of your savings will go in extra clerical work.
Civil administrators are familiar with the argument that the soldier and sailor in respect of Income Tax are on a totally different plane to anybody else With all respect to, and every sympathy with, the soldier and sailor, I find it impossible to admit the argument. I think it is a bad argument, and I have never seen anything to support it. However, the Chancellor of the Exchequer has made an allowance on behalf of the soldier, and I am very glad he has. I think everybody at the present time will approve of it. As he has done this I certainly shall vote for making the limit not £400, but, if possible, £401 10s., so as to include a particular class of officers, commanders in the Royal Navy, who may be in command of a destroyer, or craft of that sort. These men lead a life of such extreme anxiety and of such great responsibility that is almost inconceivable for anyone to realise who has not been placed in a position to see or know, or who has not been brought in immediate contact with them. If the Chancellor of the Exchequer makes any concession at all, I think he ought to so draw it as to include commanders in the Royal Navy. As to the argument of the hon. and gallant Gentleman behind me (Colonel Yate) of the position of the soldier who cannot marry on his income, I submit it would be an impossible and a dangerous principle to lay down that the State ought to enable any man to marry. At the present moment, and in the immediate future, few men will be able to marry, and none will be able to afford to die, such are the rates of tax prevailing, and to prevail. The arguments of my hon. and gallant Friend, though I sympathise altogether with them as a matter of feeling, have no real logic and no consideration for the public purse. How is it possible to provide that any particular class of officer should be able to marry, or should be able to insure his life? Seeing, however, we are in war time, and that the concession has been allowed by the Chancellor of the Exchequer, I would make it £405 a year so as, as I have said, to include commanders in the Royal Navy. As an argument, however, it is perfectly impossible to seriously argue that one man in receipt of a salary from the State is really, in respect of taxation, in a different position to any other man in respect of taxation. It is quite true that our soldiers and sailors are bearing the brunt of things. That we all gratefully acknowledge; but I would point to this aspect of the case: there are contemporaries of my own who have lived all their lives without having been brought into active service, and have retired. War risks are a chance men take, and war is an accident they welcome.
By leave of the House I would like to remind hon. Members, and the hon. Member who has just spoken, what I stated on the Committee stage of the Bill. I think it is very relevant to the discussion we are having now. I said in reply to the hon. and learned Gentleman the Member for Exeter:—
"On principle I remain where I stood, but I cannot help recognising that there is a very strong body of feeling in Committee, not universal by any means and not shared by me, but a strong body of feeling in regard to special cases of hardship. I should be willing to propose to make this proposal on Report, if it meets with general acceptance: 'that soldiers and sailors whose income from all sources does not exceed £300 shall be relieved of all increase over and above the pre-war rates of Income Tax on their pay.'"—["OFFICIAL, REPORT 17th November, 1915, cols. 1955–6, Vol. LXXV.]
After some further discussion upon that statement of mine, the Amendment proposed was negatived. Three hon. Members on this side of the House all argued against, or, at any rate, raised an objection to, any concession being made. The hon. Member who spoke last must realise that I remained firm to my original principle, and only put this forward as a concrete Amendment. What have we done? We have allowed the new abatement, not under the new law of £120, but on £160; we have allowed the new deduction for children, not on £20, but on the new law of £25. With these two advantages under the new law we have placed the officer, with a total income under £300, under the old law for Income Tax. Therefore we have gone a very very long way, at serious cost to the State, to meet the case put before us, and I really do not think it is within the four corners of the bargain to press this Amendment.
The right hon. Gentleman has given no reason at all for his selection of £300. Why does he not try to meet concrete cases such as that mentioned by my hon. and gallant Friend behind me? Why does he not make his proposal more specific?
The hon. Member refers to the concrete case given by the hon. and gallant Gentleman behind him (Colonel Yate). Is it really a concrete case of figures paid? The major, of whom the hon. and gallant Member spoke, would have had allowances which would have brought his income far beyond the figure named by the hon. and gallant Member. His figure is not the same as my figure.
Is it not the case that a major's pay is 18s. a day?
With allowances.
Just over £300; consequently it would not come under this?
With allowances or after?
That is his pay, his full Pay.
I cannot review the specific case given by my hon. and gallant Friend, but certainly all of us can give innumerable instances from our personal acquaintances. When the Chancellor proceeds to take the course he does I do not understand why he does not take definite and concrete cases of hardship, and fix the amount at a figure like that suggested! Let the amount be chosen to meet specific cases, and the rule not laid down in accordance with an abstract £300.
I think in justice to the right hon. Gentleman the Chancellor of the Exchequer it ought to be again brought to the notice of the House that what he has stated is quite correct. There was considerable opposition on this side of the House to any concession at all being made. I think I am in the recollection of the House when I say that the Labour Benches suggested, indeed, that the concession should be withdrawn. That being so, I take it that it was certainly with the idea that the House was under the impression that it was an agreed Amendment that the right hon. Gentleman offered it and has now put it forward.
I desire to withdraw my Amendment.
No, no!
Before many months we shall have another Bill on which we shall be able to bring forward our arguments with such force that the right hon. Gentleman will see the real operation of the concession he has made. He will then be more ready, I hope, to make the concession a reasonable one.
Amendment, by leave, withdrawn.
Question, "That the Clause be added to the Bill," put, and agreed to.
NEW CLAUSE.—(Relief in Respect of Premiums on Policies.)
(1) In any Income Tax year to which this Section applies, the whole amount of profits and gains by reference to which the limit of the relief granted in respect of the premiums on insurance policies under Section fifty-four of the Income Tax Act, 1853, and any Act amending the same is calculated shall be taken to be and to have been the whole amount of the profits and gains within the meaning of that Section for the year ending the fifth day of April, nineteen hundred and fourteen, where that amount is or was greater than the amount of the profits and gains by reference to which the limit would be calculated but for this Section.
(2) This Section applies to the Income Tax year ended on the fifth day of April, nineteen hundred and fifteen, to the current Income Tax year, and to any future Income Tax year which includes any time during which the present War continues, and any amount which has been paid before the passing of this Act, and would not have been paid if this Section had been in force, shall be repaid.
Clause brought up, and read the first time.
Motion made, and Question proposed, "That the Clause be read a second time."
I bring this forward in order to meet the request made, I think, by the hon. Baronet the Member for the City of London (Sir F. Banbury), that some assistance should be given in regard to premiums on life policies. As the House knows, up to one-sixth of the present income, in Income Tax, is allowed upon sums paid by way of premiums on life policies. The income of the insured person may be very greatly reduced during the War, and as a consequence of that reduction, the life policy, which in the past has not been more than one-sixth of the total income, may, during the War, become more than one-sixth of the total income. In consequence, therefore, of the reduction of income the insured person would not get the larger allowance in respect of Income Tax on the premiums paid. We propose, therefore, by this new Clause to treat all incomes during the War as being at least equal to the incomes prior to the War so far as the allowance may be made for premiums paid on life insurance policies. I think this is quite reasonable. I hope I have made the purpose of the Clause clear; that it is a reasonable and proper Amendment.
The Clause seems to carry out the undertaking given to me during the Committee stage by the right hon. Gentleman. It is not a very easy Clause for the layman to understand, but I believe the difficulty of drafting it is owing to the variety of Acts with which it has to deal. I am a little sorry that the right hon. Gentleman could not have extended the Clause so as to make it apply after the War, because the hardship probably continues. But the right hon. Gentleman clearly stated at the Committee stage that it would only apply to the War, and, so far as I am concerned, I am much obliged to him.
Question put, and agreed to.
Clause added to the Bill.
NEW CLAUSE.—(Extension of 4 and 5 Geo. 5, c. 76, to Legacy and Succession Duty.)
Section two of the Death Duties (Killed in War) Act, 1914 (which provides for the remission of Estate Duty in respect of property passing more than once owing to deaths caused by the War), shall apply, and shall be deemed always to have applied, to Succession and Legacy Duty as well as to Estate Duty.
Clause brought up, and read the first time.
I beg to move, "That the Clause be read a second time."
The House will remember that a concession was made in regard to Estate Duty in the case of a person killed in the War, and we, therefore, propose to extend the same concession to Succession and Legacy Duty. The concession is made retrospective, as if it had been given at the same time as the concession in regard to Estate Duty. The amount involved is very small, but it is a reasonable and fair concession to make.
I have to thank the right hon. Gentleman for putting down this Clause, and I would only ask him to look very seriously between now and next Budget into the question of the Death Duties (Killed in War) Act in reference to the 3 per cent. on which the deduction is calculated. Although that was not adequate when the Bill was passed in 1914, it is still more inadequate now. Perhaps the right hon. Gentleman will look at that in connection with what his predecessor said, that the Government had no desire to make any profit out of the deaths of our soldiers at the front. That being so, I think he will see that it is necessary to extend the 3 per cent. on which the deduction is made so as to make it more in accordance with what the Government have to pay themselves for money at the present time.
I only rise to add my voice to the request that has been urged by my hon. Friend. I think the Chancellor of the Exchequer sees it is really a sound point that, inasmuch as the rate of interest even the Government have to pay has gone up to 4½ per cent., the Death Duties ought to be discounted at a much higher rate than 3 per cent. I hope, therefore, the right hon. Gentleman will put that right before the next Budget.
Question put, and agreed to.
Clause added to the Bill.
NEW CLAUSE.—(Procedure on Death of Person Entitled to Government Stock.)
Where the holder of any Government stock dies, the production of probate, con- firmation, or letters of administration granted by any Court in the United Kingdom having authority to grant the same shall be sufficient authority to the Banks of England and Ireland, to the National Debt Commissioners, to the Postmaster-General, and to any savings bank authority to transfer the stock to the person to whom the probate, confirmation, or letters of administration were granted or as directed by that person.
The expression "Government stock" has the same meaning as in the Savings Bank Act, 1893, as amended by any subseqent enactment.
Clause brought up, and read the first time.
I beg to move, "That the Clause be read a second time."
This Clause is one in which an hon. Gentleman opposite is very much concerned. It relates to the procedure on the death of a person entitled to Government stock. Under the existing law much Government stock is inscribed in the Bank of England, and, therefore, in the case of a Scotsman who dies in Scotland the whole of whose property would normally be considered to be Scottish, the property which consists of Government stock inscribed in the Bank of England is held to be English, and consequently before the property can pass under a Scottish will, the Scottish will would have to be resealed. It is a highly technical matter, but it was thought right as between this country and Scotland, and other parts of the United Kingdom that the law should be put on a perfect footing of equality for all parts. Therefore we have introduced this Clause.
This Clause is the very satisfactory response which the right hon. Gentleman has made to a memorial submitted to him some months ago by the Faculty of Advocates, and by the representatives of practically all the business bodies in Scotland. The importance of it is not wholly technical. The real difficulty in Scotland was that we felt the existing state of the law kept Scottish investors to a great extent out of the market for Consols. We desire to thank the Chancellor of the Exchequer for the full, fair, and very prompt way in which he met our view, and, so far as his Clause deals with the matter, it entirely and fully redeems the promise he made to us. At the same time I would like to draw his attention to the fact that we also submitted to him two other small points. One was dealt with in a supplementary memorial to the First Lord of the Admiralty and the Secretary of State for War, and it dealt with this small point. Cases were arising of the death on active service of Territorial officers and men who left small balances, £5, £10, or £20, with banks such as Cox's and Child's, which are, of course, English banks. I was in correspondence with the right hon. Gentleman at the time, and he assured me the matter was having the attention both of the Admiralty and the War Office, and that he would be open to consider further representations on the subject when the matter came before Parliament. Here is the opportunity. I have given him short notice, I regret, of a little additional wording to this Clause as it stands. A bank such as Cox's feels, I think, quite rightly that it does not have full and proper authority to dispense with the re-sealing process even in respect of balances of £5. I believe very often Cox's bank does it, and it is very good of them, but what we wish is that Cox's bank should be given the full legal authority, and a few words added to this Clause would bring that about. We thought in Scotland it was uncertain whether a Clause in a Finance Bill was required to effect this. We thought all that was wanted could be done by a Treasury Order of some kind. I now recall the right hon. Gentleman's memory to the fact, and I hope he will be able to meet me on the point. The other small point was the desirability of relieving Judical Factors in Scotland of the same difficulty. It is well known in Scotland that trust estates under the provision of the Accountant of Court, which is the nearest equivalent in Scotland to the Public Trustee in England, are practically encouraged to abstain from investments of that kind.
How does that come in under this Clause?
I gave short notice of a suggestion that certain words should be added at a particular place in the Chancellor of the Exchequer's Clause. With your permission, may I read the wording? I suggest that a few words should be added at the end of the first paragraph as follows: "In the case of any holding of Government Stock, the production of an order or decree granted by any Court in the United Kingdom having authority to grant the same shall be sufficient authority to the Banks of England and Ireland, to the National Debt Commissioners, to the Postmaster-General, and to any savings bank authority to transfer, or otherwise deal with, such holding in accordance with such order or decree, or as directed by the person authorised by, or entitled to, or by virtue of such order or decree." The point is that the Judicial Factor in Scotland holds certain funds, and he knows he cannot complete his title to the same except by a very expensive process involving resort to the English Courts. The result is that trust money of that kind is not invested in Consols, or in War Loan, and that is an extremely undesirable state of matters. It is well known in Scotland that an opinion was obtained from Lord Haldane when at the Bar, and Lord Kinross, when he was at the Court of Session expressed the same view, that these orders were not necessary. I hope the Chancellor of the Exchequer will be able to meet us on that point too. I am not sure whether, at this stage, I should move the Amendments of which I have given notice, but substantially I have said all I desire to say in favour of them, and perhaps the right hon. Gentleman will say how he regards them.
The Second Beading had better be taken first, and the speech of the hon. Member treated as made in moving the Amendment.
Question put, and agreed to.
I beg to move, after the word "person" ["or as directed by that person"], to insert the words, "In the case of any holding of Government Stock, the production of an order or decree granted by any Court in the United Kingdom having authority to grant the same shall be sufficient authority to the Banks of England and Ireland, to the National Debt Commissioners, to the Postmaster-General, and to any savings bank authority to transfer, or otherwise deal with, such holding in accordance with such order or decree, or as directed by the person authorised by, or entitled to, or by virtue of such order or decree."
I beg to second the Amendment.
I gratefully recognise the hon. Member's acknowledgments of the fact that the Chancellor of the Exchequer's Clause as it stands fulfils in every possible way the pledge made to him and those whom he represents, and I do not want to argue against the Amendment on its merits. But I do suggest to the House that we are not now properly seized of all the considerations to incorporate the Amendment in the Bill. We have had time to consult those who are concerned as to the Clause which appears on the Paper. I do not want to commit myself or the Government in any hostile sense to the proposal now made, but the hon. Member does propose a far-reaching Amendment of the law concerning a large number of authorities, and I do not think we ought to proceed to legislate without those authorities being consulted in as broad and free a way as before, and, therefore, I suggest that the hon. Member should postpone this question until we come to the next Budget, in the promise that it shall have every consideration we can give it.
Does that remark apply also to my suggestion with regard to small balances?
I would rather leave the Clause as it is. It is a very difficult and technical matter, and I should not like to proceed to any Amendment in the way of extension at the present time.
I quite recognise that, so far as I referred to the position of Judicial Factors, the matter may very properly require further consideration, but I earnestly plead that, with regard to these small balances, and the expenses cast upon the estates of these poor soldiers who lose their lives, it is absolutely a trifling matter, and with the addition of a very few words the Clause would give the required protection. The right hon. Gentleman is prepared to order the Bank of England and other Departments to accept a certain class of evidence. All I ask is that Army and Navy agents should receive the same instructions. Instructions which are good enough for the Bank of England should not be objected to by banks such as Cox's. They very often waive the point. I would really appeal to my right hon. Friend to give way on this matter and undertake to make a small addition to his Clause.
The hon. Member is now arguing an Amendment which is not even before us.
Amendment negatived.
Clause added to the Bill.
CLAUSE 2.—(Additional Duties on Cocoa.)
In addition to the duties of Customs payable on cocoa imported into Great Britain or Ireland there shall, as from the twenty-second day of September, nineteen hundred and fifteen, until the first day of August, nineteen hundred and sixteen, be charged, levied, and paid, the following additional duties, that is to say:—
£ s. d. Cocoa, the lb. 0 0 0½ Cocoa husks and shells, the cwt. 0 1 0 Cocoa butter, the lb. 0 0 0½
I beg to move to leave out Clause 2.
I should not have troubled the House at all if there were not, under this apparently simple proposal to make an increase in the Cocoa Duty of ½d. in the lb., a really important principle to which I want to call the attention of the House, and particularly the attention of the Chancellor of the Exchequer. I asked about the middle of October from the Board of Trade for information as to the imports of cocoa, both raw and in the manufactured condition, during the nine months preceding the War—that is, for the first nine months of last year and the nine months of this year up to September. The figures I received, both in regard to the imports of the raw material and of the manufactured chocolate from Switzerland and the United States, were so remarkable that I feel convinced that the Chancellor of the Exchequor and his Department have never studied the information that was obtainable in the returns made to the Board of Trade or they would never have put down at a time like the present a Clause in an almost perfunctory manner, making a sort of pro rata increases on the existing duties. I will not trouble the House with many figures, but I must give one or two. First of all with regard to the effect of the War on our imports of raw cocoa. I find that for the first nine months of 1915 our total imports were 160,750,000 lbs., as against 71,000,000 lbs. for the first nine months of the year 1914. That shows the effect the War has had upon sweeping into our ports vast quantities of raw cocoa which previously went to the Powers with which we are now at war. I wish particularly to call attention to three figures which go to make up that great total. First of all, the imports from German West Africa in 1914 were 465,000 lbs., and during the first nine months of this year the total was 6,055,000 lbs. From the German possessions in the Pacific the corresponding figures were 279,000 lbs. for 1914 and 1,074,000 lbs. for 1915; whereas evidently very large quantities of cocoa grown within our Empire went to Germany in 1914. For Portugal and Portuguese West Africa the figures are equally remarkable, being 1,359,000 lbs. in 1914, as against 5,233,000 lbs. this year—
I do not quite follow the arguments of the hon. Member. Is he giving these figures with a view to showing that it is undesirable to levy a tax on cocoa?
I am giving them with a view to showing that the increase of a halfpenny all round is not the sort of tax that will be of any use to put on, and if you allow me, Mr. Speaker, to go into the imports, I think you will see that that will make my argument quite clear.
All the arguments which the hon. Member is using go to show the desirability, and not the un-desirability, of this tax.
May I not argue against the undesirability of imposing the tax in the particular form in which it is being imposed, and may I not show that it is quite useless for war purposes, or for any purpose of controlling the course of trade?
I do not know how the hon. Member arrives at that conclusion. He is now proposing to strike out the whole Clause. The result would be that there would be no tax on cocoa at all, and he cannot introduce any taxation levied in any other way. Consequently the result of his action would be that cocoa would escape altogether.
With all due respect, Mr. Speaker, I submit that the result of my proposal would be, if carried, that the cocoa duty would remain at one penny per pound, instead of with this additional halfpenny. I will simply mention specific reasons why I want to leave out this Clause. In the first place, I wish to omit this Clause because I think it has been shown unquestionably that it was not framed after consideration of what is shown by our import figures. I feel convinced that the Chancellor of the Exchequer would have proposed a wholly different Clause had he known these facts. The duty is a very trifling one. We shall have another Budget very shortly, and I would much rather see cocoa not touched at all, because what is proposed will produce no effect, and on those grounds I want to move the omission of this Clause altogether. With regard to the importation of manufactured chocolate, I want to show that there has been an enormous increase in spite of the immense increase in the raw material, which we have mainly from Switzerland, and that includes 50 per cent. of enemy sugar. That is a fact which can be proved, and I think that is so potent and so concerned in the conduct of the War, that it is a, good ground for leaving out this proposed tax, which does not deal with the real question at all. The increase of the imports of manufactured chocolate from Switzerland amount to 148,000 cwts. in 1915 as against 65,000 cwts. in 1914, and that is an increase of nearly 100,000 cwts. of an article which contains 50 per cent. of enemy sugar. It has been ascertained that there were enormous crops in Germany and enormous stocks of sugar at the beginning of the War, and from inquiries on the spot it has been ascertained that this so-called Swiss chocolate is manufactured with German sugar. I pointed out the other day that in Germany the only article of consumption which has not gone up in price during the War is sugar, and that acts as a direct bounty on the export of Swiss chocolate. When I come to chocolate from the United States, I find the figures are 1,170 cwts. in 1914, as against 29,199 cwts. for the corresponding nine months of this year. I am told on the best authority that practically that great increase is due to one order placed by the War Office for chocolates for our troops. The Chancellor of the Exchequer has again and again pointed out that it is really vital to the conduct of the War that we should not increase our imports.
The hon. Member is not now discussing the Motion, of which he has given notice, to omit this Clause. He is making suggestions for the imposition of taxation on some totally different matter, and he cannot do that upon a discussion of this Clause.
I merely ask for leave to move that this Clause be omitted. The reason I do so is to show that there is no connection whatever between the taxation proposed by the right hon. Gentleman and the facts which ought to be familiar to his Department and the other Departments of the State. The increase of this tax by a halfpenny on the raw material shows perfectly clearly that the questions which I have tried to put before the House have never had any consideration by the Treasury, therefore I move to omit this Clause altogether, in the hope that the Chancellor of the Exchequer will study the figures and the other facts which I have put before his notice before the next Budget is brought in, and I trust he will bring in a Clause later on dealing with the importation of cocoa and manufactured chocolate into this country which will be upon a War basis, and calculated to assist us and injure the enemy in the contest we are now waging, instead of leaving the whole of these considerations absolutely on one side.
I beg to second this Motion, upon the simple ground that the taxation imposed upon cocoa is entirely insufficient, although I am quite aware that it is not competent for me or anyone else to move that that taxation should be increased. I support this Motion upon grounds which I have frequently given—that I do not think that cocoa is sufficiently taxed in comparison with the tax imposed upon the substance dealt with in the last Clause, namely, tea.
In supporting this proposal, I wish to point out that the object of my hon. Friend is not to get rid of taxation on cocoa—
Hon. Members are opposing this Clause in order to take the opportunity of speaking, not because they wish to strike it out, but because they wish to impose further taxation.
No, Sir, we do wish to strike it out, because the old taxation remains if this Clause is struck out. My hon. Friend's point is that there is a certain inconsistency of action between the Treasury and the other Departments in this matter. Certain other Departments are actively engaged at the present time in doing their best to check German trade and prevent the importation of German articles into this Kingdom. My hon. Friend (Mr. Peto) has shown by his figures, and his general argument is borne out by a comparison of the Swiss official Returns, that 99 per cent. of the sugar used in the manufacture of these articles is of enemy origin, and comes from Germany and Austria. My hon. Friend's view is that we should get rid of this additional taxation and leave the regulation of this trade entirely in the hands of the War Department. In that way we should be carrying out the object of the Government, instead of setting a dangerous precedent like this. Personally, I do not wish that this Motion should be pressed to a Division, and I merely desire to urge that in the arrangement of these duties regard should be had to the need of co-ordination between the various Departments, and we do not want to have this inconsistency of action. I would rather leave the regulation of this Swiss trade entirely to the War Department concerned, rather than encourage in this way the importation of goods of enemy origin into this country.
I much regret to say that I am quite unable to follow either of the arguments put forward. The hon. Gentleman the Member for Devizes (Mr. Peto) says that we ought not to add a halfpenny to the tax upon cocoa because the Admiralty have diverted a large number of ships carrying cocoa to neutral countries and have brought them into British ports. To say that because we have prevented it going to Germany we should therefore refrain from putting an additional halfpenny on cocoa, not on that which we bring to our ports but on that which we take out of bond and consume, is something I am utterly unable to understand. Supposing we gave up the practice of diverting cocoa from neutral ports to our own ports, would the hon. Gentleman maintain this tax? His only objection is that we are diverting cocoa from neutral ports to British ports. The hon. Gentleman the Member for Hereford (Mr. Hewins) followed him in another quagmire on the question of Swiss chocolate. Does he really suggest that whether Swiss chocolate is to come into this country or not it to depend upon an additional halfpenny tax on the lb.?
No; it is a question of what the right hon. Gentleman proposes to do with regard to the sugar used in these imports, which is of enemy origin.
Is not that a ground for excluding it altogether?
Yes.
Yes. We should do nothing either one way or the other.
We do not confine ourselves to Swiss chocolate made of enemy sugar. This Clause relates to all chocolate. If, in compliance with the hon. Gentleman's Motion, we dropped this Clause and took off the halfpenny additional tax, and then Switzerland ceased to make chocolate from enemy sugar, where should we be? We should have abandoned our Clause because Switzerland made chocolate from enemy sugar. Switzerland would have given up the practice, and we should have no means of taxing chocolate which was not made of enemy sugar. If the hon. Gentleman is right, and it is desirable to exclude Swiss chocolate because it is made of enemy sugar, it has nothing to do with the Finance Bill, and it must be a measure entirely conducted by another Department.
Will the right hon. Gentleman recommend that course?
Not on the Finance Bill. The argument of the hon. Gentleman the Member for Nottingham (Sir J. D. Rees) has been perfectly consistent throughout. He has always objected to the Cocoa Tax, not because we divert cocoa from neutral ports to our own ports, and not because Swiss chocolate is made with enemy sugar, but because he says that it is not heavy enough. He raised that argument on the Committee stage and in a vague way he raises it again now. I can quite understand his position. The rules will not allow him to move an increase; therefore he moves a decrease.
It is the only course.
Yes, it is the intelligible and only course.
It is the course which I have pursued.
The argument of the hon. Member for Devizes (Mr. Peto) is that we should take off the additional ½d. because we divert cocoa from neutral ports to our own ports, and he quotes the great figures—of course there are great figures—of imports here. We are not, however, putting any tax on that sugar unless it is consumed here. I am sorry, but I have no alternative except to recommend the House to adhere to the additional tax and to leave the hon. Member for Nottingham once again on a future occasion to urge that the tax should be raised.
Question, "That the Clause stand part of the Bill," put, and agreed to.
CLAUSE 12.—(New Import Duties.)
(1) There shall, as from the twenty-ninth day of September, nineteen hundred and fifteen, until the first day of August, nineteen hundred and sixteen, be charged, levied and paid on any of the following articles imported into Great Britain or Ireland the following duties of Customs, namely:—
Motor cars, including motor bicycles and motor tricycles An amount equal to thirty-three and one-third per cent. of the value of the article. Accessories and component parts of motorcars, motor bicycles, or motor tricycles, other than tyres Musical instruments, including gramophones, pianolas, and other similar instruments Accessories and component parts of musical instruments, and records and other means of reproducing music Clocks, watches, and the component parts of clocks and watches
Cinematograph films imported for the purpose of the exhibition of pictures or other optical effects by means of a cinematograph or other similar apparatus:—
Per linear foot. £ s. d. Blank film, on which no picture has been impressed, known as raw film or stock 0 0 0½ Positives, i.e., films containing a picture and ready for exhibition films containing a picture and ready for exhibition 0 0 1 Negatives, i.e., films containing a photograph from which positives can be printed films containing a photograph from which positives can be printed 0 0 8
(2) The value of any article for the purposes of this Section shall be taken to be the price which an importer would give for the article if the article were delivered, freight and insurance paid, in bond at the port of importation, and duty shall be paid on that value as fixed by the Commissioners of Customs and Excise.
In the case of a motor car imported with tyres attached, the value of the tyres shall be deducted from the value of the car for the purpose of the charge of duty.
(3) Any dispute arising as to the proper rate of duty payable under this Section shall, so far as any question of value is concerned, be referred to a referee appointed by the Treasury, and the decision of the referee shall be final and conclusive.
Sections thirty and thirty-one of the Customs Consolidation Act, 1876, shall, as respects any such dispute as to value, have effect as if an application for reference to a referee under this provision were substituted for the action or suit mentioned in that Section.
(4) The procedure on any such reference shall be such as may be determined by rules made by the Treasury for the purpose.
If the decision of the referee involves any variation in the amount of duty payable, duty shall be paid or repaid, as the case may be, so as to correspond with that decision.
(5) If it is proved to the satisfaction of the Commissioners of Customs and Excise that the duty under this Section has been duly paid in respect of any article, and that the article has not been used in Great Britain or Ireland, a drawback equal to the amount of duty paid shall be allowed on that article if exported as merchandise.
(6) An article shall not, notwithstanding anything in any Act to the contrary, be charged with duty under this Section on importation if it is proved to the satisfaction of the Commissioners of Customs and Excise that duty has been paid on a previous importation of the article into Great Britain or Ireland and that drawback has not been paid on its exportation or that the article is imported into Great Britain or Ireland after having been exported therefrom before duty became payable thereon in pursuance of this Section.
(7) Where it is proved to the satisfaction of the Commissioners of Customs and Excise that any article is of a kind mainly used as an accessory of a component part which is liable to duty under this Section but is imported for use for some other purpose or has been and is being exclusively used for some other purpose, the Commissioners shall, subject to such conditions (if any) as they think fit to impose, allow the article to be imported free of duty, or repay any duty paid on importation, as the case requires.
(8) Motor cars which are proved to the satisfaction of the Commissioners of Customs and Excise to be constructed and adapted for use, and intended to be used solely, as motor omnibuses, or motor ambulances, or in connection with the conveyance of goods or burden in the course of trade or husbandry, or by a local authority as fire engines or otherwise for the purposes of their fire brigade service, and chassis, component parts, and accessories, which are so proved to be intended to be used solely for any such motor cars, shall not be charged with duty under this Section:
Provided that in such cases as the Commissioners of Customs and Excise direct, cars, chassis, accessories, or parts, as the case may be, shall not be exempted unless they are marked or stamped in such manner as the Commissioners direct or approve with some distinctive stamp or mark showing that they are only to be so used.
If any person obliterates or removes any such distinctive stamp or mark, or uses any motor car, chassis, accessory, or part which has been exempted from duty under this provision for any purpose other than the purposes therein mentioned, he shall be liable to a penalty of five hundred pounds: Provided that the Court may, if it think fit, in lieu of ordering the offender to pay a penalty, order that he be imprisoned with or without hard labour for a term not exceeding two years.
If it is shown to the satisfaction of the Commissioners of Customs and Excise that any motor car, chassis, component part, or accessory has been, and is being, exclusively used for purposes which entitle it to an exemption from duty under this provision, the Commissioners may, subject to such conditions (if any) as they think fit to impose, repay any duty paid on the car, chassis, part or accessory on importation.
(9) The Treasury may by order exempt any articles mentioned in the order which are liable to duty under this Section from that duty if they are satisfied that, having regard to the small value of the article, it is inexpedient that the duty should be charged.
(10) The Treasury may make regulations providing for the total or partial exemption for a limited period from the duty payable under this Section of any motor cars, including motor bicycles and motor tricycles, brought into Great Britain or Ireland by persons making only a temporary stay therein.
I beg to move to leave out the Clause. This is a pretty long Clause covering three pages of the Bill, but it is bad from beginning to end, and I therefore propose to omit the whole of it. This part is entitled "New Import Duties." An equally appropriate title for it would be "Dead Flies," because, as the wise man said:— If I apply the first part of that wise saying to this Clause, I hope the right hon. Gentleman will not retaliate by applying the second part to myself. The dead flies contained in this Clause are Tariff Reform and Protection. These dead flies, because of the arguments of the Chancellor of the Exchequer, send forth a stinking savour. My right hon. Friend has been exceedingly friendly and approachable throughout every stage of this Bill. He has listened in a most courteous manner to all the criticisms from every quarter of the House. If we can only persuade him to listen to this quarter of the House this time, and to leave out this Clause, then he will have the glory of producing an alabaster box of precious ointment. It may be that my right hon. Friend is under the delusion that this Clause does not bring into practice the bad old principle of Protection, but it should not be very difficult to disillusion him on that point. We can see very easily how it will work. Supposing by way of illustration that I am a maker of musical instruments and their accessories—supposing I am a pianoforte maker, what do I do under this Clause? Immediately after September 29th I began to put up my prices 10 per cent., 20 per cent., 30 per cent., until I got them up to the full 33⅓ per cent. We will further suppose that before September 29th I sold my pianos at £30 each, and that they brought me in a profit of 10 per cent. They cost me £27 5s. 6d., and I sold them for £30. Now I have got my prices up to £40; consequently, I am making a profit to-day of £12 14s. 6d., or 46⅔ per cent. instead of 10 per cent. It is an ill-wind that blows nobody any good, but this wind blows a lot of good to the makers of musical instruments and accessories in this country. This Clause 12, in fact, is a godsend to them, and they will be very well-advised to make hay while the War rages. All these extra profits from 10 per cent. up to 46⅔ per cent. go into the pockets of the home manufacturer. None of them find their way into the National Exchequer, but they all come out of the pockets of the consumer.
5.0 P.M.
We may ask, Who pays this tariff of 33⅓ per cent.? It is very easy to tell the Chancellor of the Exchequer who will not pay it. The foreigner will not pay it, the importer will not pay it, the middleman will not pay it, and the home manufacturer will not pay it. It is just as easy to tell the Chancellor of the Exchequer who will pay this tariff of 33⅓ per cent. The con- sumer will have to pay it, and the consumer will have to pay it through the nose, to use a vulgar saying. We heard a great deal during the Budget agitation of 1909 about "Your pipe and your glass will cost you more." Under this Budget of 1915, your musical instruments and your motor cars will cost you more. It is the consumer that will have to pay. The Chancellor of the Exchequer assured us more than once in Committee that according to the information given to him the musical instrument trade had not put up their prices. The right hon. Gentleman would be well-advised to mingle a grain of salt with that information. My hon. Friend the Member for Poplar (Mr. Yeo) told us quite a different story. I myself was in a piano shop a month ago, and they told me then that Steinway's pianos had gone up by 50 per cent. It is an American firm. You could have bought a piano of Stem way's in that shop on 29th September for £100, but on 9th November you could not buy it for less than £150. It is therefore quite certain that prices have gone up and that considerable profits are being made out of all the present stocks. We will assume for the moment, however, that the right hon. Gentleman's information is correct. If prices have not gone up it can only be because the demand is already abnormally low, and that the public have voluntarily decided to deny themselves at the present time of these luxuries. Therefore, under these circumstances, there is no need to proceed further with these prohibitory duties. It must be so, or else, there being a strain of human nature even in musical instrument makers, they would already either have put up their prices by 33⅓ per cent. or be approaching that limit. The Chancellor of the Exchequer has commended this Clause to the House on the ground that because of the War the rate of foreign exchange has gone against us, and he hopes by means of this legislation to readjust the exchange. We have a right to ask the right hon. Gentleman to furnish us with the precedents which justify these proposals. Can he refer to any byegone legislation that purported to combat the rate of the foreign exchange, and can he inform us that that legislation achieved the purpose for which it was enacted? Did it reduce the rate of the foreign exchange, either materially or immaterially? I am neither a financier nor the son of a financier, but in my inexpert opinion the right hon. Gentleman, in trying to reduce the rate of foreign exchange by imposing these tariffs, is pursuing a will o'-the-wisp that will only land consumers in the quagmire of extortionate prices for inferior articles without even, in an infinitesimal degree, reducing the rate of the foreign exchange.
The Prime Minister and the Colonial Secretary, in their contributions to the Debate upon this Clause, appeared to think that the Government was beating all records by putting on tariffs of 33⅓ per cent. One would like to say respectfully that they also are the victims of an illusion. Our forefathers experimented in this quack finance a hundred years ago, and they far and away outstripped them in this respect with regard to the amount of tariff. They also imagined a vain thing—that they could keep out foreign goods by putting on a prohibitive duty. They put an Import Duty of 75 per cent., which is more than double 33⅓ per cent. on saddles, boots, and shoes. They had a duty of 75 per cent. on imported earthenware; while on linen manufactures they began at 50 per cent. and went up to 180 per cent. They had high duties on other articles as well. What was the effect of those tariffs in those days? It was to lower the standard of the article. The home manufacturers, having no competition to fear, made those articles which paid them best. They were not particular as to style or quality, and, if their customers did not like it, they could do the other thing, for they were not likely to fare better elsewhere. Under those tariffs our forefathers came to the conclusion to drop these quack financial expedients, and they dropped them with disgust. Surely we are not going to revive them in this twentieth century? Surely we shall be wise enough to make other men's shipwrecks our sea marks?
I do not desire to throw any mud at, or to depreciate without rhyme or reason, Our Coalition Cabinet. I would rather cultivate a thoughtful spirit that so many of our misgivings, doubts, and fears when it was formed have not fructified. But I think we are justified in reminding our leader, the Prime Minister, that, on the reconstruction of the Government, we were given to understand that it was formed for one object and for one object only, to carry forward the War to a victorious conclusion. We were assured and reassured that party cries, that attempts at making party capital were to be taboo, and, therefore, we think we have just ground for com- plaint of the introduction of this Clause. Under the Clause the Cabinet is seeking to play ducks and drakes with principles—call them domestic, political, or moral, as you like—with principles and settled convictions which are life-long and very dear to most of us. We Free Traders most heartily object to the Tariff Reformer stealing a march upon us under the shield of a Coalition Cabinet. I should like to appeal to the right hon. Gentleman not to put on the Government Whips on this occasion, but to allow every hon. Member, official or unofficial, to vote according to his convictions on this matter, settled or otherwise.
Has the Chancellor of the Exchequer analysed the Division List on the occasion on which this Clause as amended was added to the Bill in Committee? If not, he may be interested to learn that it was carried by seventy-eight votes to twenty-six—a majority of fifty-two. Of the seventy-eight Ayes, no fewer than forty-two were Tories and Tariff Reformers, and amongst them were no more than nineteen unofficial Liberals and Free Traders, so that there were actually more unofficial Liberals who had the temerity to vote against the Clause than there were of those who smothered their conscience and voted for it. Of course, the right hon. Gentleman is perfectly aware that there were scores of his supporters who deliberately abstained because the principle of the Clause was so repugnant to them, and yet there were obvious reasons why they did not desire to vote against it. I gratefully admit we have been permitted throughout the stages of this Bill to indulge in a free discussion, but what I would plead for on this occasion is that just for once we shall have a free Division. For the sake of "Auld Lang Syne" give us absolute freedom on this occasion, not only to talk about our principles, but to live up to them in the Division Lobby. Many of us have sat on these benches since January, 1906. Every one of us is aware that Free Trade was one of the greatest issues of the 1906 election, and it does not appear to me that any hon. Member elected on that issue can, with a clear conscience, vote for this Clause. Since 1906, the Liberal party and the Liberal Government have been faithful to their mandate, they have fought the good fight, they have kept the faith, and they have kept the Free Trade flag flying at the top of the mast, but they will be unfaithful to their trust if they allow it to be hauled down now at the behest of a minority of Tariff Reformers in the Coalition Cabinet.
The irony of the situation is really excruciating. When you come to think that Free Traders who support this Clause vote against all their previous promises and professions, while Tariff Reformers who vote for it will be equally guilty by enacting Tariff Reform at this time without first fulfilling the solemn treaty obligation of their leaders, who have repeatedly said that they would before carrying Tariff Reform submit it to the electors either at a General Election or in the shape of a Referendum. The late Sir Wilfrid Lawson, in his gay wisdom, used to say that no one ever got lost on a straight road, and therefore he must not take it amiss if we decline to follow him on these matters into By-path Meadow, which will only land us in Doubting Castle, and eventually into the Dungeons of Giant Despair. Free Trade never brought this commonwealth anything but prosperity and happiness. We maintain that no Government, neither a Coalition Government nor any other Government, have a right to deal this felon stroke at the great achievement of Cobden and Bright without first of all receiving the willing assent of the common people.
In view of the admirable and comprehensive speech we have just had in support of this very important Amendment I shall not attempt to cover the same ground, but I do gladly seize this opportunity of saying that, in this Clause, and in the history of it, the Government have made a very great mistake. They themselves must admit that, because the Clause, as it now stands, is totally different from the one originally introduced. It is a poor little thing now. It was a little bit more comprehensive when it was introduced, but compared with the objects which the Government said they had in mind in introducing it, it was, even from the first, a misbegotten and misshapen offspring. What did the Government say they had in view in introducing these proposals? I believe their first object was to get some revenue. They will get very little revenue, and it will be very expensive. There are certain provisions in the Clause by which they will give back the revenue in certain circumstances. From the speeches made by the Chancellor of the Exchequer in introducing the Budget, you can see that their real object was to limit, if possible, expenditure in luxuries among all the people. I suppose that is why musical instruments were specially singled out, why hats—the tax on which has had to be dropped—and why clocks, watches, and similar articles were also included. There has been no definite attempt to put on what has been called—I think rather foolishly—a scientific or comprehensive tariff, but certain things have been singled out, perhaps by way of a small beginning for future legislation. They have been singled out because obviously they are articles which the Government thought were articles of luxury, and by striking at which they will be striking at the luxurious instincts and practices of the present time.
Let me point out that if they really wanted to deal with luxury in the shape of motor cars, it would have been very much better to put high taxation upon the use of motor cars. The licences might have been increased and in various ways, not only on the horse-power. For instance, something might have been done in connection with the use of petrol for purely pleasure cars. As a matter of fact, luxury in regard to motoring is largely a matter not of initial cost, but of upkeep, and also a matter of the objects for which the cars are run. I believe that, by a comprehensive scheme of licensing all cars and making some provision as to the objects for which they were used, a great deal more might have been done against luxury, and, at the same time, a great deal more in the way of revenue might have been brought in. I would say a word about the tax here proposed upon cinematograph films. Here, of course, you have an undoubted luxury of the people—a widespread luxury at the present time. If you are going to allow cinematograph shows, which I do not hesitate to say are a luxury of the common people, and very widely appreciated—possibly they are useful, if any luxuries are useful at the present time—it will be perfectly easy to get a much larger revenue from cinematograph shows and a much larger restriction generally upon the luxury of frequent visits to them, the luxury of having numerous, greatly varied and frequently-changing shows, by licences upon certain films and licences instead of merely duties on the importation of the films. Looked at from the point of view of those two objects—restriction of luxury and increase of revenue—this Clause, as we have it now, is a very poor affair altogether from the point of view of the Treasury. Knowing, as I do, what ingenuity there is in the brains of those Gentlemen who sit on the Treasury Bench—I am very sorry that only one is present now—and knowing also what need they have of revenue and how ready we are to grant them any revenue we can, I say that the Clause is a very poor affair altogether. The best thing would be to eliminate it from the Bill and to bring in some other taxation which would attain the objects, which I quite admit are right, namely, the bringing in of revenue and the restriction of luxuries. That might be brought in on other lines and achieve the things much more effectually; therefore with the greatest confidence I second the Amendment for the rejection of the Clause, and I do so feeling that if we could only eliminate this Clause from the Bill we should be helping the country and assisting the Treasury and the Chancellor of the Exchequer to put his taxation and the objects that he has in view in that taxation on a much better and stronger basis.
I have listened, of course, with very great respect to everything that has been said by my two hon. Friends in moving this Amendment, and I want most respectfully to appeal to the House to come to a decision at once on the Amendment. [HON. MEMBERS: "Why?"] I will tell them why. In the Committee stage of this Bill we had this debated at great length, and I think that every Member whom I can see here, with very few exceptions, spoke. [HON. MEMBERS: "We did not get an answer then!"] All the arguments which have been advanced so far this afternoon were answered fully by the Chancellor of the Exchequer—certainly more fully than I could answer them now. It is too late to suggest the substitution of other taxes for these taxes, because we are now on the Report stage. The House of Commons will have an opportunity of reviewing and revising or of urging the rejection of these imposts of necessity in the course of a very few months. I venture to submit that we should make far better use of our time on the Report stage in considering how the various Clauses of the Bill can be improved, rather than once again having a full-dress Debate upon the application of Tariff Reform and Free Trade to the conditions of War. I am not making any protest against those who feel strongly on this matter taking the legitimate oppor- tunity of once again registering their views, but I venture to think it would not be the best use to make of a very short time to repeat the arguments, either on the side of the Government or against the Government, which have been made so eloquently and so well in the Committee stage of the Bill.
The right hon. Gentleman has said that the various statements we made before in objection to these duties have been answered. I should certainly not speak again if I had received any answer to the criticisms which I made and which other Members, who still stick to their principles, made on that occasion. There is another reason why one is justified for detaining the House for a few moments on these points. It is because some time has elapsed since these duties were first imposed and we have had further time for consideration as to their effect and what they mean as regards the future. I only desire to say that the time that has passed has only confirmed my opposition to the introduction of a Protective Tariff in the time and circumstances of war. The case for these duties is in no way made out by the Government. We now see more clearly their futility, and we have a right to express the opinion that their futility is obvious with regard to the rectification of the exchange between this country and America. We see clearly that as a revenue-producing instrument they are absurdly ineffectual at a time when we are spending five millions a day on the War, and we see their futility still more to-day as a means of checking the consumption of luxuries. It is clear that if this system is to have any effectiveness what sover as a revenue-producing machine or as the means of checking the consumption of luxuries, these duties will have to be extended over a wide range. If you do that you will have the full establishment of a Protective tariff, and it is no use the Government in any way endeavouring to dodge that fact. Either these duties are useless, or they are the beginning of a system which, to have any effect at all, must be widely extended and land us in a Protective tariff.
One main reason of objection is that at a time of tremendous financial stress, when enormous demands are being made upon the people, you introduce a system of taxation which the Chancellor of the Exchequer, as a Free Trader of the past, knows perfectly well has this effect, that it introduces two systems of taxation. It means you have two tax gatherers. In one part the revenue goes to the Treasury, and in the other part you have a number of privileged individuals manufacturing the articles on which the duties are levied, who are able to raise their prices behind the tariff, levying another form of taxation on the people and putting it into their own pockets. A time of war and national difficulty is the very time when you should not introduce that system. I have no doubt that the right hon. Gentleman, the Member for Wimbledon (Mr. Chaplin) will obey the suggestion made by the Financial Secretary to the Treasury, and will not address the House. It is a pity that he was forestalled, because this must be a day of triumph for him. For nearly seventy years we have had Free Trade established in this country, and we have had small bands of men endeavouring to upset that system. At one time amongst the faithful, faithful only was he to the system of Protection, and now he has the triumph of seeing a Free Trade Chancellor of the Exchequer introducing this system, and succeeding, where Mr. Joseph Chamberlain himself failed, in proposing a system of taxation which the country over and over again has rejected, and rejected, too, under peculiar circumstances.
I remember the days when the organisation to which the right hon. Gentleman the Member for Wimbledon belongs used to send over to Germany deputations of British working men. You asked them to consider how much better the German system of tariffs was than ours. You asked them to go over there, you sent them over there, paying them for these joy rides, to come back and convert the people of this country to Prussianism. For the economic basis of Prussianism is Protection and land monopoly, and the people at that time who were free objected to being Prussianised. But now we are at war with Germany to overthrow Prussianism, and along comes the Chancellor of the Exchequer, and with the unanimous support of the Tory party, which is peculiarly interested, they say, in overthrowing Prussianism in Germany, and at the same time equally enthusiastic for establishing it here, they combine forces in order to introduce now this system of Prussianism in time of war against Germany. The absurdity of the whole thing is obvious, but the danger is perhaps not so obvious. To my mind, it is this, that you have set to work to destroy the financial system that enables and has enabled 50,000,000 people to live in these small islands, and if you proceed, as you will have to proceed, to set causes to work which will compel you to extend these tariffs, to see them being generated in every direction, having abandoned Free Trade, we shall set to work to form financial unions with various countries and discard entirely our Free Trade system. You have made a start with the destruction of that system on which the whole of our prosperity in the past has been founded, and through which the 50,000,000 of our people have obtained employment and the means of existence. I oppose it because I believe, whatever may be the result of our military and naval operations, this War will be a calamity to Great Britain if during its course you extend, as you have begun, the introduction of Protection.
I feel that the House must give some attention to the appeal that my right hon. Friend has made to us, so far as we can do it without sacrificing the principles which we hold very dear with regard to this very important matter. I shall, therefore, make very few observations. I shall not appeal to anybody else to follow my example, but if they think well afterwards of doing what my hon. Friend (Mr. Clough) suggested, namely, vote against the Clause, I need hardly say I will support them with a great deal of pleasure. I admit that the right hon. Gentleman is in this difficulty. This Clause is undoubtedly a great blot on this Bill. It is no part of the Bill. The Bill is to obtain money for the purposes of the War. There is hardly any money to be obtained under the Clause. We have passed through—and we have had illustrations this afternoon of the great sympathy that the House of Commons has with the Government—eleven very oppressive Clauses to the people of this country in an hour and a half, almost without a moment of discussion, and when we pass through this Clause again we shall come to eight pages of the Bill dealing with Income Tax, laying again heavy burdens on the people of the country, and here there will be no note of contention at all. So that this thing stands out an excrescence on the face of the Bill, a thing that the Government need not have done at all, and a thing which certainly, if they had the moral courage to do it, the best thing they could do even at this last moment would be to drop it. The right hon. Gentleman suggested that the argument was entirely put forward at the Committee stage of the Bill and that no fresh argument had arisen. On the contrary, fresh arguments against this foolish policy that the Government has adopted will develop every day and every week and every month in this country until at last there will be such an accumulated force of hostility to this policy that it will be swept away with shame on the part of those who have introduced it. To-day's Order Paper is a study which ought to please anyone who, wants as it were, to revel in the patriotic feeling of the House of Commons. There are hardly any Amendments put down by anybody but the Chancellor of the Exchequer. Why has he put down such a lot of Amendments to his own Bill? Because it wanted a deal of amendment. Because it is a very imperfect Bill.
: You asked for it.
We asked for it! We did our duty in that respect, and we appealed to those last remnants of the common sense of right hon. Gentlemen opposite. They resisted our arguments and bowled us down, but then in the silence of their own rooms their conscience flickered and my right hon. Friend has put down all these Amendments. [An HON. MEMBER: "All promised."] Not all promised. [An HON. MEMBER: "Very nearly."] There are twenty Amendments to this Clause none of which were promised. To whom were they promised? [An HON. MEMBER: "YOU and me."] No. My hon. Friend always puts forward his claims in an amiable and sometimes a rather weak manner. He is too much intimidated by Ministers. He never put forward a claim on this Clause. No one on this side of the House asked him to do anything. Hon. Members opposite put forward claims, but not one of the claims that they asked has been granted. We said, "Get rid of the thing." We said, "Abolish the taxes." That has not been done. What have you? Twenty Amendments produced by the Government to try and make the thing march, to try and make it work, and a most difficult task it has been up to the present, and most difficult they will find it to the end.
I only desire to make three observations with regard to why we have fought these proposals, and why I think it right to fight them to the last. The first is that they are contentious proposals in the large sense in which the Government should not have made them. We are working now under a Coalition Cabinet, and the Prime Minister and all the Ministers are pledged to refrain from introducing legislation which will be received in a hostile spirit by any large classes of the people. There could not be anything more contentious, than this Bill, for this simple reason. If it were necessary to check luxuries, as they said, why do they not accompany the duties with a proposal for Excise? If that had been done it would have met the objections of the Liberals. If they had made proposals for revenue you would have heard nothing of this Debate that is taking place. The Government proposed them in the most objectionable shape which will not check luxurious expenditure on the one hand, and which will, on the other hand, create the maximum of friction amongst Liberals who support the Government. Therefore the whole scheme was highly contentious. I think, also, it was. a very wasteful scheme, and here again I should like to take my right hon. Friend to task. He says no arguments have developed against the Bill. I do not know whether he is in touch with the Customs; Department. The Bill is working with the greatest friction. It has upset the Post Office and the Custom House, and the thing is not working at all, as the right hon. Gentleman admitted in the answer he-gave me. But the thing is wasteful to a tremendous extent. The effect of the Clause is not to reduce the price of anything, but to increase the price very much, and to increase it in such a way that the produce of the tax does not go into the pocket of the Treasury. Great profits will be made out of the Bill and great burdens will be laid upon the people. Why should the Government do that in time of war, when all the burdens we have to bear should go directly into the Treasury? In this respect the whole of the proposals of the Bill are of the most wasteful character, and on that ground they should not have been proposed at all.
There is another thing. The progress of the taxes has shown that the Government had not complete knowledge of the proposals they made. Before proposing a duty of 33 per cent., they ought, at any rate, to have studied up the various trades: in connection with which they imposed this heavy duty. They did nothing of the kind. The Clause which they will crush through the House of Commons is not the same-Clause that they introduced. There was a duty on hats. What has become of the Hat Duty? They proposed it without knowing what a hat was. They threw it at the head of the poor Custom House, and the Custom House came back and said, "We cannot tell what a hat is. A hat is a most mysterious thing." The Government commenced without knowing what they were dealing with. Then, again, they proposed a duty on plate glass. I suppose my right hon. Friend thought he knew what plate glass was. He had not a notion of it in a commercial sense. He sat there and assented to the proposal—I was going to say a monument of want of knowledge. But when the 33 per cent. duty was enforced they learnt that plate glass, instead of being an article of luxury, was an important raw material, and so they ran away from the Plate Glass Tax. The whole argument that they were luxurious taxes has failed the Government. They did not know what they were talking about. The Waltham and other cheap watches dealt with in the Bill were not articles of luxury at all. On the contrary, the whole scheme was proposed by the Government without any knowledge of what its effect would be. The House of Commons is in a very great difficulty with regard to this matter, and it is an example of the difficulty we are in with regard to everything. The House of Commons cannot do its duty. Its hands are tied behind its back. We are bound to support the Government, but not because of the arguments given by my right hon. Friend. He gave none. I congratulate him on this, that his tone to-day was far better than his tone in Committee. He gave no argument. He said, "I will crush it through by brute force, as it were." But it is not the right hon. Gentleman opposite who will press through the Bill. It is the Government. We do not want to oppose the Government; we want to instruct them, and this is not the only example in which the Government is laying a heavy burden on the House of Commons in asking for its support. Why should the Government digress in this time of war to do that which it is not necessary, to do that which is wasteful, to do that which will cause our strength and our health, which ought to be reserved for the great struggle in which we are engaged, to be frittered away on a side issue?
It is the part of the House of Commons to correct a Government that does these things. But we cannot correct the Government to-day. We can hardly speak freely. We cannot divide freely. We have no Cabinet Ministers here to listen to us if we do speak. There is no one to whom we can appeal. We can make no progress at all in the matter. When I come to think of these proposals and the man who has pressed them upon us, I cannot believe that he is their real author. Who would suppose that the Chancellor of the Exchequer, who used to be the honorary secretary of the Free Trade Union, would ever have devised this tariff and basely taken the opportunity, when the House of Commons is prevented from discussing the matter freely or acting freely with regard to it, of crushing it through? No. I cannot believe that the proposals in the Clause have the authorship of the Chancellor of the Exchequer. It would be one of the most extraordinary examples of political decrepitude we have ever seen in the annals of the House of Commons. Therefore we must come to the conclusion that some evil genius whispered the idea of this Clause to the Government. It is a very remarkable thing that the right hon. Gentleman the Secretary for the Colonies, whom we all thought was the leader of the Tariff Reform party, was the only Minister, apart from the Chancellor of the Exchequer and the Financial Secretary to the Treasury, who spoke on this matter. Does the House remember what the right hon. Gentleman said? It was the most interesting speech we have had in the whole of the Debate on this Bill. He said, "This Tariff Reform! This thing the sort of thing that I would propose No. I would not propose such a thing. If I had to bring in a Tariff Reform proposal, it would be something very different, and something much more excellent than this."
Why, in Heaven's name, in this day of emergency, cannot the Government give us something that is excellent? Why are we to have these wretched proposals, in which nobody believes, and of which nobody is proud to have the authorship? The country is getting tired of this sort of thing, and though the House may acquiesce in the appeals made to it by the Government, the day may come faster than the Financial Secretary to the Treasury thinks when the House of Commons will not be so complacent as it has been in regard to this Clause.
Amendment negatived.
I beg to move, in Subsection (1), after the word "Customs" ["imported into Great Britain or Ireland the following duties of Customs"], to insert the words "(in this Act referred to as new Import Duties)."
Clause 12 has become a very long one, and there are a series of Amendments upon the Paper, which follow this one, but they are purely drafting Amendments, to substitute the words "new Import Duties," with the hope of making the thing clear. They do not alter the Amendment.
Question, "That the words be there inserted," put, and agreed to.
I beg to move, after the word "foot" ["per linear foot"], to insert the words "of a standard width of 1⅜ inches."
Raw film, which is the subject of this part of the Clause, is imported into this country in a standard width. I think I am right in saying that there never has been, up to the passage of this Clause in Committee, any importation of raw film for the purpose of its being made into cinema films which was more than 1⅜ in. in width. Therefore, when the Chancellor of the Exchequer moved the Resolution upon which this Clause is founded, and when we dealt in the Committee stage with the tax per linear foot of raw cinema films, the Chancellor of the Exchequer intended to tax at a certain rate per linear foot cinema films of a standard width. It has been apprehended, although I do not think the fears have materialised up to the present, that ingenious people, with a view of getting rid of this tax, will form a new practice—the object of which can only be to divert the revenue and avoid the decision of Parliament—of, for the first time, importing films in greater width than the invariable standard width, paying duty per linear foot, and then cutting up the film. It is with a view that the House shall arm itself against this attempt, if it be made, of avoiding their decision in regard to taxation, that I ask leave to move this Amendment, so that the intention of the Resolution, and of the Clause as it passed through Committee, should be made clear, and that we should add the words "of the standard width of 1⅜ in." I think "of the" is better than the words "of a," as they appear on the Paper.
May I ask whether the right hon. Gentleman will gain his point by the method he proposes? Would it not be better to drop the linear foot of measure altogether, and, in view of the possible development of this industry, to secure himself by making a scale of the tax upon the superficial measurement, say, so much per square foot? Then, whenever machines alter, or the ingenuity of the importers changes, or whatever causes arise to disturb the area of the things imported, the right hon. Gentleman will be secured. To limit the width to 1⅜ in. seems to me to be introducing further difficulties. Supposing, for instance, the machines can take 1½ in. or 2 ins., and the imported film happens to be a multiple of either of those sizes, the right hon. Gentleman will have put himself into a difficulty by binding himself down to 1⅜ in. I am in favour of this tax, and I think it might be a great deal heavier, and my only object is to make matters easier by substituting superficial measure for the linear foot measure.
I think it is a good suggestion which has been made by my hon. Friend (Sir W. Essex). I want the House to notice that the right hon. Gentleman who proposes this Amendment has admitted that they did not understand the point when they began the taxation. For my part I have heard no objection to the proposed Amendment on the part of the Government, therefore I have nothing to say about it.
Question, "That the words 'of the standard width of 1⅜ inches' be there inserted," put, and agreed to.
I beg to move to leave out "½d." [blank film, on which no picture has been impressed, known as raw film or stock, per linear foot ½d."] and to insert "⅓d."
This is one of those shocking examples of lack of knowledge of the subject which characterised the Government when this matter was brought forward. Surely it is nothing to be ashamed of, and I do not feel ashamed, under my right hon. Friend's chastisement, of the fact that when you are imposing for the first time on a complicated industry new taxation that as your discussion of this subject continues, and as your experience ripens, you can find some improvements in the original proposal laid before Parliament. The difficulty about the taxation of imports, or even of the taxation of any particular trade in any form, is that forewarned is forearmed. There are so many ways of avoiding taxation that these things have always got to be done in secrecy, and it is only after the publication of your proposals that you can gain assistance from those who have peculiar knowledge of the circumstances. We have had consultations with the representatives of the trade since the Committee stage of this Bill, in pursuance of the promise made to the Committee. It was suggested that we have not got the right proportion between the taxation of the raw film and the positive and the negative, and after consultation with the trade our advisers and the Chancellor of the Exchequer have come to the conclusion that the right proportion is ⅓d. instead of ½d. and 5d. instead of 8d., giving 1d. as the unit for the positive, which appears unaltered in the Bill. I would like the House to understand that the subsequent Amendment to leave out "8" and insert "5" is regarded by the Government as consequential upon the acceptance of this Amendment.
It is very curious that the right hon. Gentleman, and the Chancellor of the Exchequer also, justify almost every tax on the ground that some attempt at evasion, if not fraud, will be made by the taxpayer.
I never said that.
You said that in the course of discussion it was found that attempts would be made so that the tax might be avoided.
I speak within the recollection of the House. What I said was that you could not discuss with a trade the taxation which you proposed to impose upon them, but that after the Clause is proposed and made public, and imposed by the Resolution, then discussion ensues and you have got the advantage of information which could not be given to you before by those who know something about it. I never said anything about fraud.
6.0 P.M.
Fraud was not mentioned in the last speech on this Amendment, but it was used in the speech before on the other Amendment. The right hon. Gentleman did say that the passing of that Amendment would help to prevent evasion of the tax. I have an Amendment on the Paper—but I do not intend to move it, because I can make the observations I desire now—to leave out this film tax altogether. I believe that it is working very badly, and that all these Amendments which the Government have put down will not make it go very well. It is a very curious thing that this tax on blank films, from which £40,000 of supposed revenue has come in during the last six weeks, is the one tax that the right hon. Gentleman proposes to alter. If it is producing revenue so well, why not leave it alone? The answer is that the right hon. Gentleman has discovered when he has had a little experience of it that the tax is one with which much harm can be done; and so, without anyone asking for it, he reduces the tax from ½d. to ⅓d. If he were entirely candid, he would tell the House that there is every prospect that the revenue produced by this tax of £40,000 will entirely disappear within the next few weeks. I think that sum was nearly all paid by a single firm, and that firm is arranging to manufacture its raw material in this country, so that the little bit of revenue that has been produced will disappear altogether. If we leave out this item of the blank films, the revenue produced by the tax is £23,000 by the negatives and the positives. Of this £23,000, there are appeals now before the Customs for a drawback of £17,000, so that I think the right hon. Gentleman must see, and I believe his Custom House officers must tell him, that the tax is likely, when it gets into full working order to be as unproductive in its character as we prophesied when it was proposed. I think the right hon. Gentleman ought to tell us more about the difficulties that have arisen in regard to this tax. He did announce to-day in reply to a question of mine that none of the claims for drawback have yet been satisfied. The tax is going on. Why cannot the claims be dealt with? Simply because the matter is causing a great deal of trouble to the Custom House, and I believe also to the Post Office. I have an Amendment down later to enable the Post Office to deal more easily with this matter, and so I may postpone it for the present. The ½d. on the blank film has produced by far the largest amount of revenue, and the 8d. levied on the negatives has produced only about £5,000. I think that we might have some explanation of these figures from the right hon. Gentleman in the case of this new tax on a new industry in view of the prospects which he held out to us when the tax was passed. I cannot object to the reduction. A third of a penny tax is better than a ½d., and 5d. tax is better than 8d. It is easy to see that the tax is going in the way in which it is sure to go, and that after a little it will disappear altogether; but it is a very remarkable thing that these reductions should be made by the Government on their own initiative, especially on the productive item of the taxes, and we should have some explanation.
I should be glad if the right hon. Gentleman would tell us to what extent these proposals will reduce the sum which, it was estimated, would be produced? Some of us see no reason to diminish taxes of this kind.
The right hon. Gentleman, by the leave of the House, might give some explanation on this point, because the whole object of this tax is to diminish the expenditure on luxuries. Those of us who are Free Traders have acquiesced in these taxes because, at any rate, they were taxes upon luxuries which would tend to diminish the consumption of luxuries, and when the Government propose to reduce the taxes, that seems to us to call for more explanation than he has given. He told us that the proportion is not right. I know nothing of the trade, but I believe that it would be quite easy to start from the ½d. and alter the other figures in an upward direction so as to secure proper proportion, and at the same time not increase the amount spent on these articles.
These alterations are being made because those who are concerned have come to us and complained that the proportion was wrong. It was to meet that complaint that the reduction was postponed. They say that the trade has been hampered by what they allege was the wrong proportion. I can only give a very doubtful estimate as to the total revenue, placing the figure at £400,000 and the reduction by these alterations at something between £50,000 and £100,000.
The right hon. Gentleman has not yet explained why he did not start with the ½d., and increase that and also increase the 5d. and obtain the proper proportion in that way.
I am sorry to have to speak once again. One of the real difficulties of the question is that all these taxes have got to be revised again in a short time, and when we consider the very few months during which we are going to have them it does not seem to be worth while to re-commit the Bill and pass new Resolutions in order to increase the taxation on one or two things.
Amendment agreed to.
Further Amendment made: Leave out "8" ["from which positively can be printed 008"], and insert instead thereof "5."
I beg to propose, in Sub-section (2), after the word "motorcar," to insert the words "including a motor bicycle arid a motor tricycle."
This again is purely a drafting Amendment, made as a result of various suggestions put forward in the Committee stage of the Bill. I believe that there is not the slightest doubt that without them the tax would apply to motor bicycles and motor tricycles. If the House will look at Subsection (10) of this Clause it will be seen that this phrase is there used, and it is obviously better to use the same language in both places.
Amendment agreed to.
I beg to propose, in Sub-section (3), after the word "referee," to insert the words "or board of referees."
This is one of four Amendments which are in answer to various suggestions made to the Chancellor of the Exchequer, and a question put in this House on the 20th October as to whether the Bill enables more than one referee to be appointed. The Bill, as drafted, only allows one referee. This was done because it seemed a quicker method of dealing with the question than a reference to a board. But during the Committee stage representations were made that, in order to facilitate business and to avoid congestion, power should be taken to appoint more than one referee if more were necessary—I do not think they would be necessary—in order to get rid of the fears of those people who anticipate a possible congestion of business.
Is the effect of this Amendment that every case will go before more than one referee instead of before only one referee? It seems to me very much better to have a single man giving his opinion than to have several people deciding. Are there to be several referees appointed to deal with each individual case, or are the different members of a board of referees to deal with the different cases?
Only one referee will sit in each case.
The House should pay a little attention to this question. It is an entirely new matter, and there are two or three points as to which the House is entitled to some information. What is this board of referees? Is it to be a board of Government officials exclusively, or a board on which the trades which would be affected under these taxes would be represented? How will a board of referees, say, in London, carry out its duties in Glasgow, Dublin, Liverpool, Hull, or any of the ports of the Kingdom into which these goods may come? The thing is entirely new. It touches the amount of duty. Somebody will have to pay a very large sum of money under the decision of the board. Therefore I ask is this a board which we are going to have set up on the spot, or is the board of referees appointed in Whitehall which is to fix the boards for the different parts of the United Kingdom and for the different trades? Is that the proceeding? My right hon. Friend in his explanation confined himself to this point, that it should be a board instead of an individual. We heard nothing about whether the board will be composed of Custom House officials entirely or whether the trades and businesses affected will be represented on the board, nor did we hear anything as to the number of the board, or whether there would be more boards than one. Perhaps my right hon. Friend will see his way to giving some information on this point. A new system is being set up, when the machine is working very well at the present time, and we should hear a little more about it.
May I call attention to the Clause as it stands in connection with the answer which was given to the hon. Baronet the Member for the City of London that the board of referees will not sit in any of these cases, but that individual members will decide in individual cases. It seems to me that the Bill without these Amendments is property drawn, and that the power of appointing a board of referees is very ambiguous. There is nothing in the Bill as it is drawn to prevent the Treasury appointing a referee whenever a difficulty occurs. They can, therefore, go on with the process of appointing individual referees as often as the occasion seems to demand. Therefore, I suggest that the Amendment merely introduces confusion into the Bill, and it will be much clearer if the right hon. Gentle- man would leave the Bill as drafted without these Amendments.
In answer to my right hon. Friend, I may say that none of these referees will be Government officials; they will be experts. In reference to the re marks of the hon. Member for Devizes (Mr. Peto), this is one of the difficulties which arise from giving way to representations made in Debate. These Amendments are moved in response to suggestions made by the right hon. Gentleman the Member for Swansea (Sir A. Mond), whom I do not see in his place, but who, in reference to this Clause, at any rate, acted in concert with the right hon. Gentleman the Member for Islington (Mr. Lough). If the House of Commons thinks that the Clause is better now as it stands I have not the least objection. I am perfectly prepared to withdraw the Amendment. It was only in fulfilment of a promise that it was introduced.
Leave it out!
Amendment, by leave, withdrawn.
Amendment made: In Sub-section (5), leave out the words "the duty under this Section."—[ Mr. Montagu. ]
I beg to move, in Subsection (5), at the end, to insert,
"Provided that in the case of cinematograph films:— given for readdressing the films to a foreign or a Colonial address without being taken away from the post office, any excess postage, of course, being paid. I think these facilities exist in every other country, and I have been assured that they do not exist at the present time in this country. The other proposal is that facilities should be given at bonded warehouses for the examination, alteration, or repair of films which are intended for export without payment of duty. I think I am right in saying that these facilities do not exist in this country. I submit this Amendment, which speaks for itself, for the consideration of the right hon. Gentleman.
I ask my right hon. Friend not to press this Amendment, not because I am unwilling to assent to it in principle, but because it is really of a kind which is quite unnecessary to secure by legislation. It is one of those things which can be accomplished by administration under the Act. I am assured that these matters are working much more smoothly than the right hon. Gentleman thinks, and we have had very few complaints as regards the Post Office. I am not yet convinced that the trade makes any fresh demand, but if there should be any made, it could be dealt with administratively and by regulations. In regard to bonded warehouses I would remind hon. Members that the bonded warehouse is not a matter for the Government, but for the trade itself. The trade has, so far, made no proposals to the Government on the question of bonded warehouses, and I do not think it would be possible to make arrangements for the examination or alteration or repairs in a very large number of warehouses, but if the trade should suggest the establishment of one large bonded warehouse, or possibly more, that might be considered; but the difficulty is that these materials are very inflammable, and there would have to be conformity with the regulations of the London County Council. I may state that it is our intention to do everything we can of the kind the right hon. Gentleman suggests.
If it is necessary, it will be done?
Yes.
After what the right hon. Gentleman has said, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
I beg to move to leave out Sub-section (6), and to insert instead thereof the following Sub-section:—
"(6) Section six of the Customs and Inland Revenue Act, 1879, shall not apply to articles liable to the new Import Duties, and any such articles reimported into Great Britain or Ireland after exportation therefrom shall be exempt from duty if it is shown to the satisfaction of the Commissioners of Customs and Excise either that the articles had not been imported previously to exportation or that no drawback of duty was allowed on exportation or that any drawback so allowed has been repaid to the Exchequer:
Provided that articles which have been imported and exported by way of transit only under bond shall not be deemed to have been imported or exported for the purposes of this provision."
This is to meet a point raised by the hon. Member for Devizes in Committee. What is wanted is to export and reimport any articles, British or foreign, which are in this country at the present moment free of duty. I do not think that the original Clause did that, and I think that the language of this substituted Sub-section is much better, and covers everything the hon. Member for Devizes has suggested.
In regard to this Sub-section, I wish to call the right hon. Gentleman's attention to the fact that those who are interested in the film business in the Channel Islands have raised the question whether the new Sub-section would not be still better if the words were omitted, "either that the articles had not been imported previously to exportation, or." These words are put in to meet the case of the film manufacturer in this country, but it has been suggested that if it is proved that no drawback duty was paid on exportation you really cover the whole case; therefore if the right hon. Gentleman would agree to leave out those words the course of business with the Customs officials would be simplified. On the other hand, I may be told that the difficulties are likely to be to some extent removed; but at present they are likely to be serious, so much so that the largest vendors of films refuse to supply them because so long a time is taken in examination Perhaps the right hon. Gentleman will consider whether the Sub-section would be just as efficacious if those words were left out, and move the Clause with their omission.
I should like to call the attention of my right hon. Friend to an Amendment I have on the Paper which deals with the original Sub-section for which this new one is proposed to be substituted. I am told, in regard to the export of these articles to the Colonies, that it is done on what is commonly called "sale or return"—that is to say, the things are consigned to a person in one of our Colonies who endeavours to sell them if he can, and he generally succeeds in doing so. If he succeeds, so much the better for our trade; if he fails, then he sends them back to the person from whom he originally received them. Under the Clause, as it stands, without the substitution now proposed, goods that have been exported to the Colonies and are sent back do not then become liable to pay this duty. In the original Clause the Government have provided that no duty should be payable on those goods if they were shipped before the duty became payable under this Act. That, of course, did not include goods which are subsequent to the date fixed for the commencement of the Act, and which were exported to the Colonies on condition that they might be returned. I find it a little difficult to see at a glance whether this new Sub-section has the effect which, I think, the Committee would desire, or the Chancellor of the Exchequer would desire, namely, to exempt these goods on their return.
It does.
I am quite satisfied with that assurance. I will not proceed further with my remarks.
Amendment agreed to.
Further Amendments made: In Subsection (7), leave out the words "duty under this Section" ["liable to duty under this Section but is imported"], and insert instead thereof the words "a new Import Duty."
In Sub-section (8), leave out the words "under this Section," and insert instead thereof the words "the new Import Duty."
I beg to move, in Sub-section (8), after the word "used" ["stamp or mark showing that they are only to be so used"], to insert the words "on any transfer of a motor car or chassis which has been exempted under this provision, the transferor shall give notice of the transfer and of the name and address of the transferee to the Commissioners of Customs and Excise."
Any car which is imported for commercial purposes is exempted from taxation, but if it is shown afterwards that it has been used as a private car we ought to have the means of getting that car registered and finding what becomes of it, so that the concession shall not be used to escape the tax which ought justly to be paid.
May I ask the right hon. Gentleman whether he proposes to introduce a time limit? It might happen that the car was used probably some little time after its original importation. If there is not a time limit, the Government will have serious difficulties following these cars from the hands of one owner to another.
This only applies to the conversion of a car which has escaped duty into a private car.
Amendment agreed to.
Further Amendments made: In Subsection (8), after the word "if" ["if any"], insert the words "while the duty on motor cars, motor bicycles, and motor tricycles, and accessories, and component parts thereof under this Section, remains in force"; after the word "mentioned" ["therein mentioned"], insert the words "or fails to give notice of a transfer in accordance with this provision"; leave out the words "to a penalty of five hundred pounds, provided that the Court may, if it thinks fit, in lieu of ordering the offender to pay a penalty, order that he be imprisoned, with or without hard labour, for a term not exceeding two years," and insert instead thereof the words "on summary conviction to a fine not exceeding one hundred pounds, or, at the option of the Court, to imprisonment, with or without hard labour, for a term not exceeding six months."
In Sub-section (9), leave out the words "duty under this Section," and insert instead thereof the words "any new Import Duty."
In Subsection (10), leave out the words "duty payable under this Section," and insert instead thereof the words "new Import Duty."—[ Mr. Montagu. ]
CLAUSE 14.—(Discontinuance of Duties on-Certain Articles in the Manufacture of which Spirit is Used.)
The duties of Customs on the articles mentioned in Part II. of the Third Schedule to the Finance (1909–10) Act, 1910, being articles in which spirit is contained or in the manufacture of which spirit is used, shall cease.
I beg to move, to leave out the Clause. I do so with very great regret, because I think it is a most valuable provision. It is a provision which enables the manufacturer of certain valuable and important chemical commodities, chloral hydrate, chloroform, and ether substances, to be made out of duty-free spirits, and abandons the taxation of those articles in harmony with the duty upon whisky and brandy. The House will remember that whenever the Chancellor of the Exchequer proposes to increase the duty on whisky or spirits or brandy, there is a Sub-clause setting out an elaborate scale for the taxation of imported chemical substances. We thought when the Bill was introduced that it would be a good thing to put an end to the taxation of those, and to allow them to be made out of duty-free spirits. We adhere to that view, and I hope in happier times to be able to introduce a Clause to abolish those duties. [An HON. MEMBER: "Why do you not do it now?"] I venture to think the House will be well advised not to press this change in the law now, for this reason: The manufacturers of those articles have made representations to us, which make it quite clear to me that, however desirable the change, there may be a risk at this time, of all others, of a shortage of the supply of anæsthetics, consequent upon the structural alterations which would have to be made in the factories to enable the use of duty-free spirits for some articles, while other articles would be under taxation. They represented to us, with some force, that labour is scarce, and that in some of the factories a very substantial alteration in the structure of the factory would have to be made in order to ensure the necessary Excise supervision. My right hon. Friend felt that he could not persevere at this time, when operations in hospitals at home and abroad are so frequent, in recommending any changes in the law, which might result in a temporary dislocation of the manufacture of anæsthetics The trade themselves have asked before a Select Committee, which considered this matter in time of peace, for this reform, and there is no question but that in normal times they would welcome it. They ask us, however, not to do it in time of war, and I hope the House will consent.
I am very glad that the right hon. Gentleman has consented to delete this Clause, because otherwise the manufacturers of ether in its various forms would certainly be placed at a great disadvantage, and ultimately the whole of the trade in those ethers would go to a foreign country. This is one of the industries, invented originally in this country by, I think, a Scotsman, and which has been kept in this country by reason of the fact that the Excise Duty on spirits and the countervailing Customs Duty gave a slight turn in favour of those manufactures. Had this Clause remained in the Bill, that would not only be taken away, but the effect would be to subsidise foreign manufacturers to the extent of 70 per cent. on the cost of that which they almost entirely consist. This is an industry which is very useful now for the supply of anæsthetics, not only for the Army, but for the rest of the country. The aniline dye industry was killed in this country by the Germans, although the dye was the invention of an Englishman. This industry to which I refer has survived. The right hon. Gentleman said that on some future occasion he hoped they would take some action, but before doing so I hope he will look at the case all round and not destroy an industry like this, which is so useful to the country, and if it were destroyed in the event of another war we might find, ourselves without any anæsthetics, just as the textile trade found itself without aniline dyes.
It is quite impossible to resist the plea that the right hon. Gentleman has put forward, but I do hope that the House may take seriously his promise of subsequent legislation as in the nature of a positive assurance. Many of us, and particularly some of us who have studied very closely the possible uses of alcohol and duty-free spirit for manufacturing purposes, hope that we may be assured that the understanding that the right hon. Gentleman has given us this evening, may be translated by the House as a positive pledge for action on a subsequent occasion. [An HON. MEMBER: "No, no!"]
Amendment agreed to.
CLAUSE 15.—(Restriction of Delivery of Goods from Bond.)
(1) During the continuance of the present war and for a period of twelve months thereafter, the Treasury may by order authorise the Commissioners of Customs and Excise, during any period named in the order not exceeding three months, to refuse to allow the delivery of goods or commodities for home use from ship's side or a warehouse on payment of duty in any cases where deliveries are demanded of amounts exceeding the deliveries which appear to the Commissioners to be reasonable deliveries in the circumstances.
(2) Any refusal of the Commissioners of Customs and Excise within one month before the twenty-first day of September, nineteen hundred and fifteen, to allow the delivery of goods or commodities is hereby confirmed, and shall be as valid as if any order of the Treasury had been in force under this Section.
Where, by reason of the refusal of the Commissioners of Customs and Excise within the period aforesaid to allow the delivery of any goods any person has been prevented from performing any contract for the sale of, or otherwise in connection with, the goods in accordance with the terms thereof, that person shall be freed and discharged from all actions and proceedings under the contract for or in respect of his failure to perform the contract so far as due to the reason aforesaid.
I beg to move, to leave out the Clause. I think this Clause is perfectly unnecessary. It contains a most extraordinary proposal, and would not, I think, be submitted to the House were it not that we are working under those circumstances to which I have previously referred. It is a proposal of a kind which has never been asked before in this country, and which I think ought not to be granted unless very substantial reasons are given. It is suggested that forestalments take place, and that there are abnormally large clearances of goods from the Customs and Excise, and that it is necessary to take the drastic steps proposed in this Clause. It is a most violent remedy for the disease, if there be any disease at all. I think the circumstances are greatly exaggerated. The Chancellor in May last said that there was a tremendous forestalment, amounting to some millions of pounds worth of goods, and he added that those who cleared out those goods were caught. I do not know how they were caught, and it certainly was a most extraordinary expression to use. The Clause really springs from that attitude of the right hon. Gentleman's mind, which entertains undue suspicion of everything in the nature of trade. What took place? There was then another Chancellor in power, and, like the present Chancellor, he spoke gravely about the Budget to be introduced, and the heavy taxes that were to be imposed. As a result a panic was created throughout the country, and people who usually only buy in small quantities rushed to buy in large quantities, and the shops were emptied of their goods. It was then necessary to clear out of bond a larger proportion of goods than usual, and that is what has been described as forestalment. It did not take place at all to the extent which is stated, and what harm was done by it? The Exchequer got the money, which is what they wanted, and there was no intention of touching any of those particular commodities. The people who wanted the goods got them and felt reassured in matters of trade, the Chancellor got his money, and there was a period of good business as against bad business at other times.
We have had an experiment under this Clause already. The Customs House was closed for about three weeks in September. We have now increased the number of articles liable for duty. We cannot select one or two articles and prevent a clearance of those, because in that way the Treasury would indicate which they were going to tax. Therefore it will be necessary, in order to secure the object they have in view, to close the Customs House altogether. I think the evil, if there be an evil, has been greatly exaggerated. Take the instance of tea clearances. Tea has fallen 4d. or 5d. per lb. since the extra duty of 4d. has been imposed. So that tea is cheaper now with a duty of 1s. a lb. than it was when the duty was 8d. Sugar would have fallen by more than the amount added to the duty but for the fact that it was in the hands of the Government, who held up the supply. It nearly always happens that if any duties are imposed the price of the article falls. What is the object the Government have in view? They wish to prevent these enormous clearances. As a matter of fact, they only accentuate the panic which they seek to prevent. They will spread the panic over two or three months instead of having it over at once. There is a much more excellent way. I do not think the House realises how easy it is to get up these panics. Clearances on any day are on such a vast scale that if attention were called to them people would think there were forestalments going on. For instance, 4,500,000 lbs. of sugar and 10,000 chests of tea have to be cleared every day. It would be quite easy any day to say forestalling was going on when, as a matter of fact, there was nothing abnormal happening
I suggest that the evil of which the Government complain is caused by the Government themselves. It is caused by their talking so much about their Budgets before they introduce them. I suggest that they should keep their mouths well shut about possible taxation. Let them come down to the House and propose a Resolution at one day's notice, and then there can be no forestalments. I have one or two illustrations of the evils which arise from this course of action, but I will not trouble the House with them if they are not going to have any effect on the right hon. Gentleman. I understand that in the month of September, when the delivery of goods out of bond was stopped, a great deal of money was declined by the Customs authorities. One man sent a cheque for £3,000 duty on wine and it was refused. What right had the Government to refuse to take money? Money is what they want now. It is really allowing the right of taxation, which the House has always jealously guarded, to be taken out of our hands. I hope the Government will agree to strike the Clause out of the Bill or, at any rate, to modify it or give us an assurance that no violent steps of the kind recently taken, with so much prejudice to the trade of the country and harm to the Customs, shall be taken again if it can be avoided.
I would very much like to meet my right hon. Friend by agreeing to leave out the Clause, but I suggest that the evil which it is designed to meet is a real one, and that the discussion in Committee justified the Chancellor of the Exchequer in bringing the matter before the House. I agree with my right hon. Friend (Mr. Lough) that the Government has no power at the present moment to refuse to clear goods from bond or to refuse to accept the payment of money. The Chancellor of the Exchequer admitted that in the House. He stated that he had acted illegally when, in the strong and prompt manner in which the House is always urging the Government to act, he stopped the withdrawal of tea from bond, and this Clause is in part a humble request to the House for an indemnity for that illegal act. That is admitted. Let us see what happened. One example is sufficient to prove my case. Take tea. In the first ten working days of September of this year the clearance of tea exceeded those of the first ten working days of September, 1914, by 7,201,000 lbs.
That is not a fair comparison.
The evidence goes to show that the forestalments began in August, and the Customs estimate is that the forestalments amounted to about 10,500,000 lbs. in all. That represents a. revenue of £350,000, or, having regard to the 4d. extra imposed by the Budget, a loss to the revenue of £175,000. If the Chancellor of the Exchequer had not acted illegally and clearances had proceeded in the eight working days between 11th September and 22nd September, when the Budget was introduced, at the same rate as in the previous week, they would have been about 12,950,000 lbs. more. But the actual clearances, owing to the illegal action of my right hon. Friend, were only 1,400,000 lbs.; so that the saving to the Exchequer at 4d. per 1b. was £193,000. This Clause is intended to apply only during the War and a period of twelve months after. It might be said, though I do not see it myself, that there would be some justification for forestalment at a time when people did not approve of the taxation imposed or of the object to which the money was to be devoted. But at a time of war I think my right hon. Friend opposite saw enough in the Committee stage on this Clause to assure him that the over whelming sense of the House of Commons is that forestalment with a view to depriving the Exchequer of receipts which it would otherwise obtain, and with the possibility of charging the consumer the taxed price on an article which has not paid the tax, ought to be prevented by every means in our power. My right hon. Friend has suggested that there was an alternative method which would be much simpler, namely, that Chancellors of the Exchequer should keep their mouths shut. The people who conduct trade in commodities that are likely to be taxed are far too much in the habit of gauging the future to take any notice of the particular aspect of the mouth of the Chancellor of the Exchequer. They know when taxation is necessary; they know when taxation is likely. They know what topics are being considered at any rate by the newspapers and by Members of the House of Commons, and they proceed to forestal over a wide range, sometimes being right and then profiting, sometimes doing wrong and then being caught or overloaded with goods. I suggest that the action illegally taken by my right hon. Friend last September was a right action, and that the House ought to condone and sanction it, and arm the Chancellor of the Exchequer for the period of the War and twelve months after with power to act in the same way before future Budgets.
Amendment negatived.
I beg to move, in Sub-section (1), to leave out the words "and for a period of twelve months thereafter."
Let the Government take the power for the period of the War and be content with that. The figures given by the Secretary to the Treasury are quite unfair. If they were carried a little further it would be seen that the-Exchequer lost a great deal instead of gaining £193,000, because a great shock was given to trade and far less tea was cleared at 1s. a 1b. I should say that the Exchequer lost £250,000 by the action that was taken. My right hon. Friend used language which I greatly deplore should have been used on the part of the Treasury. He spoke as if all the clearances were taken—
We have disposed of the Amendment proposing to leave out the Clause; we are now dealing with the next Amendment on the Paper. The right hon. Gentleman must confine his observations to that.
The evil, if evil it be, would apply to this Amendment also. But I do not desire to repeat the argument. The right hon. Gentleman has admitted that there was great inconvenience to the trade in these large powers being taken. If he had a more complete knowledge of the way in which trade is carried on he would see the desirability of keeping as short as possible the period for which these drastic powers were taken. If he can do anything to meet me, I am sure he will. If he cannot, I will not press the matter further.
7.0 P.M.
Once again I would like to meet my right hon. Friend, but I do not think it would be a good thing to do as he suggests. We have already had from the Attorney-General a suggestion that the words "the duration of the present War" will at some time or other require statutory definition. They occur in all kinds of legislation, and it would be very difficult for lawyers to say what is the moment when the present War ends. The words that we have taken here occur, I think, in all the emergency legislation which Parliament has sanctioned, and they will allow for the reassumption of normal conditions. During the twelve months after the War the objects to which we devote our taxation are not likely to be other than those connected with clearing up the heavy expenditure of the War and, perhaps, greater expenditure in bringing the troops home and getting back to peace conditions. I think that for those twelve months, at any rate, the conditions with regard to this matter which are proper in time of war, ought to be continued just as has been done in other emergency legislation.
Amendment negatived.
CLAUSE 17.—(Rate of Reduction of Licence Duty where Sale of Liquor is Curtailed.)
(1)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) 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 retailers 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.
(3) 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, in Subsection (2), after the word "under" ["under Section 9 of the Finance Act, 1914 (Session 2)"], to insert "Sub-section (1) of."
This and the next Amendment are merely formal drafting Amendments which have been inserted in answer to representations. The object is to make it quite clear—the House will see, and so particularly will my hon. Friend on whose suggestion the Amendments were made in Committee—that the provisions of Section (9) of the Finance Act of 1914—that is, the second Finance Act—are not applied in this Clause except so far as Sub-Section (1) is concerned, and further that the provision applies not only when the hours are actually suspended, but when other comparable restrictions have been imposed.
Question, "That the words proposed be there inserted," put, and agreed to.
Further Amendment made: In Sub-section (3) leave out the words "of hours" ["discontinuance of the suspension of hours"].
CLAUSE 18.—(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, after the word "made" ["any payments made"], to add the words "or due."
There are a number of cases where payments have been made by some people where they ought to have been made by other people in respect of matters arising before the passing of this Act. In the absence of, or subject to, any explanation by my right hon. Friend it does not seem fair that those people who have managed to evade the duty put upon them in respect of matters before the passing of this Act should now get clear, when the others who have paid their proper duties cannot under this Act have them repaid. I will give an illustration—and the details of this case I can give to my right hon. Friend if he wishes for them—where a licensed house is held by joint owners. Some of these have obeyed the law and paid up their proportion of the extra Licence Duty—it may or may not have been under threat of legal proceedings—but others, by various arts and delays, have evaded payment. As this Clause now stands in the Bill they will be exempt. You may have a case, as I understand it, in respect to a single public-house where part of the duty has been paid, and cannot be got from the tenant, and where another part has not been paid, and cannot be got back from the defaulting owner.
Let me put to the House a rather more general argument. Where strong pressure has been brought to bear, the owners have paid up the duty. In other cases where the pressure put has not been so great, or where the owners have delayed or evaded the operation of the Act, no payments have been made. Both those who have paid, and whose payments are not going to be returned to them, have agreements with, and against, those who have managed to dodge the payments up till now, and who under the provisions of this Clause will be able to dodge the payments in future. I hope my right hon. Friend will see that the only object is to get absolute fairness of treatment. Where you are repealing the Clause of an Act of Parliament, if you do so without prejudice to the payments made under it, you should equally, I submit, do it without prejudice to the payments that ought to have been made under it, and that are due at the date on which you repeal. Then for the future everyone concerned is in the same position. No one then would be able to say that by dodging his liabilities until this House repealed an Act he got out of them altogether; and no other person would be able to say that because he did his duty, and paid his duties promptly, he was in a worse position than his neighbour who managed to evade the duties until the Act was repealed. My only object is to get fair play between the two. I have had my attention called to the actual practical injustice of the matter, and I submit that all we are asking for is fair play between these different classes of persons. If he is able to show the House that his Clause as it stands secures fair play, well and good. If, on the other hand, it be true, as I have been trying to show to him and the House, that as the Clause stands those who have done their duty and paid are in a worse position than those who have dodged the duties, we ask him to put that matter right.
I beg to second the Amendment.
I regret that the protagonist in this matter does not really appreciate the meaning of the Clause. What happens does not affect the State. We do not get it. It is only a question as between the two different classes of persons as to which method is going to do justice between them. It has nothing to do with the Exchequer. My hon. Friend speaks of the unfairness of it. We get nothing out of it. After long controversy this question has been settled, and I beg my hon. Friend to leave the settlement, alone, and let us have the Clause as it stands.
The hon. and learned Gentleman opposite has certainly put his finger on one weak point which the Chancellor of the Exchequer himself will admit we all found in dealing with this question. Some people have paid up and others have not. Those who have not paid are getting out of the obligation which exists equally with the others, and they perhaps ought not to do it. The difficulty in this case is when you have gone as far as the hon. Member desires to go, you would not have got rid of unfair and harsh cases which we all felt ought to be dealt with. I myself am not in the least satisfied with the compromise, because it is not a compromise! This Section has been repealed because of the difficulty of dealing with these hard cases in an Act of Parliament in any kind of language which the Chancellor of the Exchequer or anyone else can find to express their view. Therefore this is the last resort, though a very objectionable resort.
If the words proposed were added to the Clause, the Clause would not read. The Amendment as proposed clearly will make nonsense of the whole of the Clause. I hope we shall be able to get on.
Amendment negatived.
CLAUSE 21.—(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 in-comes 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, in Subsection (2), paragraph ( c ), at the end, to insert,
"( d ) Section eight of the Finance Act, 1898, shall be amended by omitting the words 'Seven hundred pounds,' and inserting the words 'Six hundred pounds.'"
I have two Amendments on the Paper. I do not propose to move the first. I beg to move the second, which is proposed in all good faith, and with the object of securing for the Chancellor of the Exchequer a considerable sum of money. If I read the Acts of Parliament aright, the right hon. Gentleman is inadvertently allowing this to escape. This Amendment not only increases the amount of the Income Tax, but it promotes the object it has in view by another means—that is, by reducing the relief paid.
On a point of Order, Mr. Speaker. If this Amendment does what the hon. Member says, puts a charge on someone who he says is escaping, is it in order?
The hon. Member for Islington cannot impose any further charge.
He says it is putting on a charge which at present is escaped.
Under the Finance Act of 1894, certain persons whose incomes were small, were entitled to allowances, and under the Finance Act of 1898 certain other persons, whose incomes were small, were also relieved in like manner. That Act proposed that individuals, whose incomes exceeded £600 but did not exceed £700, should be entitled to relief to the extent of deduction upon that £100. If this Bill is passed in its present form, the effect will be that persons whose incomes exceed £600, but do not exceed £700, will still be entitled to relief in respect of Income Tax upon £100. As I understand it, this is inconsistent with what was stated to us by the Chancellor of the Exchequer when he introduced the Bill. I move this Amendment with a view to remind my right hon. Friend of that Act. If he can assure me that my solicitude for the Treasury is unnecessary, then I do not desire to persevere with it. As I understand it, the effect of my Amendment will be to take away the relief to which persons whose income is more than £600 but less than £700 are entitled.
The hon. Member has given himself away in his last sentence. His proposal is to take away relief. That means that he imposes a tax which has not hitherto been borne. Therefore he cannot move his Amendment.
CLAUSE 22.—(Charge of Schedule B Tax, 59 and 60 Vict, c. 28.)
(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 annual value in Ireland for the purpose of Income Tax under Schedule B shall be taken to be—
( a ) the judicial rent fixed under the Land Law (Ireland) Acts or any of them; or
( b ) the annual interest payable to the Irish Land Commission in lieu of rent under the Land Purchase (Ireland) Acts or any of them; or
( c ) the purchase annuity payable under the Land Purchase (Ireland) Acts or any of them;
in any case in which it is shown that the judicial rent, the annual interest in lieu of rent, or the purchase annuity, as the case may be, is less than the Poor Law valuation.
(3) The election of a person occupying lands for the purposes 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 Subsection (3), to leave out the words "December in that year," and to insert instead thereof the words "February, nineteen hundred and sixteen."
I would like to ask the right hon. Gentleman whether this Amendment—for which I am sure we are all grateful—will apply to woodlands?
I think it is quite clear. The Clause which we are now discussing deals with the time which a taxpayer under Schedule B will have to elect to be taxed under Schedule D. When we come to deal with woodland it is the case of a taxpayer who, unless he uses his option to be taxed under Schedule D, is taxed under Schedule B, and therefore the words in Clause 22 must apply to him and are intended to apply to him equally with the ordinary farmer taxed under the Bill.
Is it intended to apply this particular date to this year?
Only to this year.
So that the whole thing goes back to 7th December as before?
Yes.
Amendment agreed to.
I beg to move, to add the following as a new Sub-section:
"(4) Any person occupying woodlands who proves to the satisfaction of the general Commissioners that those woodlands are managed by him on a commercial basis and with a view to the realisation of profits may elect to be charged to Income Tax in respect of those woodlands under Schedule D instead of under Schedule B, in the same manner as a person occupying lands for the purpose of husbandry only, and Section eighteen of the Customs and Inland Revenue Act, 1887, shall apply accordingly, subject as follows:—
The right hon. Gentleman says that this Amendment has been introduced to carry out a pledge. Certainly to some extent it is, but the right hon. Gentleman must remember this: I moved, when we came to this Clause in Committee, that woodlands ought to be exempted altogether from the new proposal, and the Financial Secretary to the Treasury suggested that, as there were difficulties arising about this, particularly with regard to the meaning of the words "commercial basis," he would like to have some conference with the Land Union and other people between the Committee stage and the Report stage of the Bill and bring up a Clause which he thought would probably meet the opinions of those people. I quite agree that the Clause as now proposed is an enormous advance on the Clause in the Bill, and it gives the option, which we all want in, of having the right to be assessed under Schedule D; but I think the whole proposal as regards woodlands is thoroughly unwise. I do not think in the present position woodlands ought to be so severely taxed. It is quite right that they should pay the new Income Tax, but it surely is not right, at the same time, in view of the position in which we are placed in regard to woodlands and wood, that they should also have their basis of assessment trebled. At present they pay upon one-third of the rental value, and now they are to pay not only upon the full annual value, but 3s. 6d. or 5s., or whatever the Income Tax is to be, and which is likely to be high for many years. It is bound to put a considerable spoke in the wheel of those who desire to see a great deal more planting and afforestation encouraged. It is not a question of justice or injustice, but of wisdom.
I do not know who suggested to the right hon. Gentleman that he ought to bring in woodlands, but I am bound to say I think he is making a profound mistake. I want further to put this very important point. The election of any woodlands proprietor to be assessed under Schedule D is in a wholly different position to the election of a farmer to be assessed under Schedule D. He can make that selection in any year he pleases, or drop it in any year he pleases; but in this particular case, if you once elect to be taxed under Schedule D, you are never allowed to go back upon it. That is a fair provision as it stands, because naturally you cannot expect to be taxed on the lower basis, and then in the fourteenth or fifteenth year say that you want to be taxed on the annual value. Therefore it is quite fair that he ought to be bound to go on so long as he himself occupies the wood to be taxed under Schedule D. The point I want to put is this—I have no doubt about it myself. I do not think the owners of these woods are bound in any way to make a choice of being taxed under Schedule D until they choose to do so. There is no compulsion on them to say that within a certain limited time, or within any particular time at all, they desire to be taxed under Schedule D. I ask the right hon. Gentleman to make that clear for this reason. At the present moment, as everybody knows, there is a tremendous dearth of pit-props in the country. I know one man who has put 16,000 acres at the disposal of the Board of Agriculture in Scotland for the purpose of getting pit-props. If that proprietor had to say now how he wanted to be taxed he would be placed in a very unfortunate, an unfair and an unjust position, if he said that in the future he would prefer to be taxed under Schedule D. I want the right hon. Gentleman to say that that man, or anyone so situated, would not be in any sense penalised. Of course, until he chooses, either the next year or the year after, or whenever it may be, to be taxed under Schedule D, he will continue to be rated on the annual rental—at least, I assume that to be the position, and if not I shall oppose this most bitterly, because I know the necessities of the case, and how unfair it would be, and how essential it is, that that should be made perfectly clear. Subject to that, I do say that the new Clause is a great improvement on the original proposal, but I again repeat I think it most unwise that at the same time you are increasing enormously the tax upon the rental you should treble the basis on which that tax is charged I do not think it is right.
As I raised the matter originally in connection with woodland, I have to thank the right hon. Gentleman for having given that alternative which, I think, on looking at the matter he admitted was desirable, and, in fact, necessary. Therefore, I am very grateful to him for that which he has been pleased to put down upon the Paper. But I wish at the same time to re-echo that which has just fallen from the hon. Baronet, and to say that I do not think this is the most satisfactory way of dealing with the matter. I think it ought to have been left on the old footing altogether. I am not going to oppose the Clause, however, for I am very glad to have received the consideration asked for. I only hope it will not fall too heavily on those who are possessors of real timber, although I fear it will fall very heavily, and be a distinct veto upon people who encourage the growth of forestry in this country. I hope that by the time we have another Finance Bill we may find a better way of dealing with the matter.
This Amendment, as the House knows, has been the subject of very careful consideration in order to arrive at an agreement between all parties. The suggestion that woodlands should continue to be taxed at one-third of the annual value was objected to at the Committee stage. It was thought that the principle of taxing anything on the basis of one-third was really an objectionable principle, but that some differentiation ought to be made between woodlands which were merely grounds of pleasurable occupation or the means of sporting rights and woodlands that were kept for commercial purposes. This method does that. A wood will now be taxed like any other amenity ground, unless it is managed on a commercial basis and for commercial purposes. When it is managed for commercial purposes and on a commercial basis, then it will be taxed like any other industry under Schedule D, unless the owner chooses to continue it to be taxed like all other lands under Schedule B, which represents the full value.
Will the right hon. Gentleman tell the House whether he has now satisfied himself as to what "managed on a commercial basis" means?
It is purposely left without any definition because the tribunal which will have to define it will be the hon. Baronet's friends, the General Commissioners, with all their freedom from official machinery, with all their knowledge of local circumstances, and they will be far better able to decide a woodland on a commercial basis, living next door to it, than any official of the Inland Revenue. If a man does not elect to be taxed under Schedule D he will be taxed under Schedule B. He need not elect to be taxed under Schedule D this year or next year, but once he has elected he must stick to that election so long as he occupies the woods. As I pointed out in the Committee, one could not allow an owner of a wood to come in or out as he chooses to sell his timber or not. Therefore the hon. Baronet need have no apprehension.
Question, "That those words be there inserted," put, and agreed to.
CLAUSE 25.—(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 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 respects the tax for the current Income Tax year.
I beg to move, in Subsection (1), to leave out the words "Employed persons" ["Employed persons to whom this Section applies"], and to insert instead thereof the words "Weekly wage earners."
Perhaps I might briefly explain that the Amendments to this Clause in my name are a series of Amendments which have been agreed upon in consultation with the representatives of the General Commissioners, and are, I believe, quite satisfactory to all parties. The effect of the Clause is limited to wage earners, so that the class of employed persons whose assessment heretofore has been made by General Commissioners will continue to have their assessments made as before. Weekly wage earners are brought under the operation of this Clause, and I understand now that the Clause may be regarded as an agreed one so far as it affects the relations between the General Commissioners and the Inland Revenue Commissioners.
I do not know who are the parties who have been in consultation, and who have agreed upon this series of Amendments. I should assume that in regard to this agreement there are certain sections who are not represented. It seems to me that this proposed alteration will make confusion a great deal more confounded. This Amendment draws a distinction between "wage earners" and "employed persons." There are wage earners and those who are neither employed persons nor wage earners, but who are employed at weekly wages, and these different classes are being assessed in a different way, by a different method and by a different authority. I will give one illustration which seems to me to show that these Amendments will affect certain people very injuriously. At the present time you have people engaged in clerical employment who are assessed at Income Tax. I take it that by this series of Amendments they will continue to be assessed and pay their Income Tax in the old way. But you have at the present time weekly wage earners, who -I believe are also paying Income Tax. They are going to be assessed by a different method and by a different person under this new arrangement, and it seems to me that that is going to affect one class badly. Take a person on a progressive salary with an increment of £10 a year. That man will be assessed on a three years' average, and I will suppose that the three years' income on which the average has been based are £160, £170, and £180, and he would be assessed on £170. Take a wage earner who is liable to Income Tax, and assume that his wages have been progressive. He is going to be assessed on his present income, and he will be paying a larger sum than the person assessed by the other method. I think the Chancellor of the Exchequer will find that his proposals are going to lead to more difficulties than those which he is trying to remove. I should prefer all wage earners to be placed in the same category both with regard to the method of assessment and collection under Schedule D.
I should like to know what is the general effect of substituting "weekly wage earners" for "employed persons." Is the idea to exclude people employed on piece-work, and all the people who are engaged by the day or half-day and paid by the hour. Are all those working on the scales of the trades in the country like engineers to be excluded? This is only one Amendment of a long series, and I should certainly like the Chancellor of the Exchequer to tell us the general effect of the whole of these Amendments of which this is the first. If you construe "weekly wage earners" strictly you will cut down the employed persons in the original Clause to a very small class indeed.
Amendment agreed to.
Further Amendments made: In Subsection (1), leave out the words "the remuneration arising from their employment," and insert instead thereof the words "their wages."
Leave out the words "(including those in which, but for this Section, those persons would be charged on an average amount)."
Leave out the word "on" ["charged on the actual amount of the remuneration"], and insert instead thereof the words "in respect of."
Leave out the words "the remuneration" ["the actual amount of the remuneration for that quarter"], and insert instead thereof the words "their wages."
Amendment proposed: In Sub-section (2), leave out the words, "to any employed persons 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," and insert instead thereof the words,
"only to weekly wage earners employed by way of manual labour in respect of the wages arising from that employment, and does not apply to persons employed as clerks, typists, draftsmen, or in any other similar capacity.
"The expression 'weekly wage earner' means a person who receives wages which are calculated by reference to the hour, day, week, or any period less than a month, at whatever intervals the wages may be paid, or who receives wages, however calculated, which are paid daily, weekly, or at any less intervals than a month.
"If any question arises whether any person is a person to whom this Section applies, that question shall be determined jointly by the Commissioners of Inland Revenue and the General Commissioners, and their determination shall be final and conclusive on the question."—[ Mr. McKenna. ]
There is here a long description of what a weekly wage earner includes, but it must be quite clear even to the Chancellor of the Exchequer that, having inserted the words "weekly wage earners," he proceeds to say that a weekly wage earner includes a whole lot of people who are not weekly wage earners at all. I would like to have some explanation of the real meaning of the alteration which it is sought to bring about in the meaning and intent of this Clause, and not so much in the actual wording of each of these particular Amendments. It is exceedingly difficult in a series of Amendments like this to understand without some explanation what the whole set of Amendments really amount to, and the reason why from one end of the Clause to another all these Amendments are necessary. Personally, I want to help this Bill through, and I am sure we have not attempted tonight to say anything to impede progress, but here is a drastic set of alterations of the Clause from beginning to end, and we have not been told what they amount to.
I think the hon. Member for West Derby has shown by his observations, and the speech he has just made shows that probably he has only just glanced at these Amendments, and has not appreciated what they mean. These Amendments exclude from weekly wage earner a good many who are weekly wage earners, and I rise for the purpose of asking the Chancellor of the Exchequer why he makes this distinction. For instance, why should a mechanic be regarded as a weekly wage earner while a clerk is not so regarded? I think there will be very considerable difficulty due to the exemption of the manual labour class. For example, who is going to define a clerk? Take a railway wagon checker, whose work is purely clerical. Are you going to call him a wage earner? As another example, take a shop assistant. Is he to be considered as a clerk? I think the Department are raising by this proposal quite unnecessary difficulties, and it will cost a great deal of money to put this proposal into operation. I should be very grateful to the Chancellor of the Exchequer if he will tell us why he is making this distinction between different classes of weekly wage earners.
I think the question put by the hon. Member for Blackburn is a very fair one. My hon. Friend will remember that on the Committee stage there was no objection to the new method of assessment, but that, on the contrary, it met with general approval. There was, however, very considerable opposition raised to the old method of assessment and collection. The complaint was that all other Income Tax assessments are made by the General Commissioners, and therefore we should not apply a new method of assessment by the Inland Revenue Commissioners to this particular class of income taxpayers. At the time I argued the necessity for that change existed in the fact that the assessment of the wage earners could not be effectively carried out by the existing machinery of the General Commissioners, but that, apart from the wage earners, I did not wish to interfere with any of the existing work now done by the General Commissioners. Accordingly I agreed to an Amendment which, as nearly as I could arrange it, would leave to them all their existing work and only give to the Inland Revenue Commissioners the new part. I agree with the objection raised as to those cases who are on the border line, but they will not be numerous. We have thrashed this point out in Committee as to how So-and-so should be treated, and we have found great difficulty in deciding; but I think we shall get over the difficulty, and that is why the change was made. As regards the general question of a quarterly collection as against a yearly collection under Schedule D, we proposed the quarterly collection in order that the wage earner would never have to pay more than a quarter of the Income Tax due at one time. Under Schedule D we have found two difficulties. First of all the three years' average is not applicable to this class of wage earner. He moves frequently and is often lost sight of, and you cannot trace him; consequently, as a rule, he would escape all payment of Income Tax in these circumstances. Secondly, there is the difficulty of paying only once a year. I had a case brought to my notice where a workman was called upon for a payment of £14 in one lump sum for Income Tax. He had been earning large wages, but he had not got £14 at the time, and it was very difficult for him to pay that sum in one payment. For that reason we have made the assessment quarterly, and for the reason I have given previously we have divided the work between the General Commissioners and the Inland Revenue Commissioners.
At a previous stage, when an Amendment was moved to omit Clause 1, which was then Clause 25, we were told that a conference would be held—
That question arises on the next Clause.
With regard to the point to which the Chancellor of the Exchequer has addressed himself, I do not want it to pass over without saying that the matter of making the employer collect these taxes annually—
That point also comes on the next Clause. I only referred to quarterly assessments in reply to my hon. Friend.
Amendment agreed to.
CLAUSE 26.—(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 to 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 exemp- tion, 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 weekly wage earners, 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.
I beg to move, to leave out Sub-section (1). Perhaps it might be for the convenience of the House if I say that I propose to move a new Sub-section in the following words:
"The amount of any Income Tax assessed and charged quarterly under this Act shall, without prejudice to any other method of recovery under the Income Tax Acts, be also recoverable summarily as a civil debt."
Under these two Amendments we abandon entirely the proposal in any circumstances to throw upon the employer the duty of collecting arrears of Income Tax. In pursuance of the promise I gave to the House, I have had a very large conference with representatives of employers and workmen, and, after a long discussion, we eventually came to the conclusion that on the whole this would be the most satisfactory method for both parties. The employers had other proposals which they made, but they fell in with the workmen's view that they would rather the employers were left entirely out of the whole ma-chinery of taxes. Consequently, I have made the proposal to the House to leave out Sub-section (1). We hope that in many cases, by agreement between the workmen and the employer, which is always possible, that the employer may be authorised by the workman to deduct a certain sum weekly from him—an agreement which we should be only too glad to recognise—so that the sum may be recoverable summarily as a civil debt, which of course is the cheapest form of collecting the tax.
I rise just to thank the right hon. Gentleman, who has seen fit to reconsider his position in this matter. I am quite sure that he is right in dividing this work altogether from the connection which was in the Bill originally. I asked him on the very first occasion when he brought in the Budget in reference to this matter, and I understood then he appreciated that it was most desirable to keep the employer out. He has now adopted this method, and I can only thank him most gratefully, and say that I am sure he has followed the wise course.
I pressed this matter upon the right hon. Gentleman in Committee, and I put it on a ground which I thought would appeal to workmen. They are now, for the first time, becoming Income Tax payers; they are very anxious to help their country to pay for the War, and they are quite willing to contribute to the Income Tax, but they ought not to be treated as a separate class. They ought to be treated the same as every other class of Income Tax payers. The Amendment carries out that important principle of making no distinction, and Income Tax payers will all be treated alike.
Question, "That Sub-section (1) stand part of the Clause," put, and negatived.
Drafting Amendments agreed to.
I beg to move to leave out Sub-section (4). This Sub-section involves a very far-reaching change in the mode of assessment and collection of Income Tax.
It is agreed.
I have never agreed to anything, and I am speaking in the public interest. It places the class of weekly wage earners in a different position from that of any other class of Income Tax payers, and in a very prejudicial position. I oppose the change mainly for two reasons: First, because the present system of assessing Income Tax has been in existence for over seventy years, has worked well and economically, has given general satisfaction, and has been repeatedly approved by Parliament; and, secondly, because the change would be unfair to these weekly wage earners and deprive them of a protection enjoyed by other classes of Income Tax payers. Further than that, the change would be costly in itself. The existing system has been in existence for a great number of years. When Mr. Pitt introduced the Income Tax in 1798, Parliament decided that the assessment and collection of Income Tax should be done by impartial local bodies, who should be free from the influence and control of the Crown. This continued till 1816, when the Income Tax was abolished for the time being. When the Income Tax was revived in 1842, the same system of acting through local bodies was re-established, and ever since there has been in each locality a body called the Commissioners for the general purposes of taxation, generally described as the "General Commissioners," who have been entrusted with the assessment and collection of this taxation.
These bodies are, in the first instance, impartial bodies, who have the confidence of the residents of the locality. In the second place, they are unpaid bodies. An unpaid body has many advantages, and personally I regret that in this House we are not an unpaid body. In the third place, these local bodies stand between the taxpayer and the Crown. They hold the balance evenly between the taxpayer and the Crown, and they command the confidence of the people, for the one reason that the public realise that in the matter of fixing the basis upon which Income Tax should be assessed the Income Tax payer should not be under the uncontrolled influence of a tax-gathering Department of the State. This system of assessing and collecting through local bodies is not only expedient in itself, but is really in accordance with the constitutional usage of this country. Upon that I might perhaps be allowed to quote an authority which I am sure the Chancellor of the Exchequer will not impugn. Sir Robert Peel, when he reimposed the Income Tax of 1842, refused to supersede the local tribunals, which had been adopted by Mr. Pitt, and he said:—
Hear, hear!
8.0 P.M.
I am very glad to hear that cheer. Yet now he is going to propose to relieve them of certain duties which they perform so admirably. He went on to say that they have done their work excellently well in the past. I am glad he cheers that now. The Prime Minister, when Chancellor of the Exchequer, also gave his tribute to the admirable work of the Commissioners, and to the way in which they had discharged their duties. This system of tribunals for assessing and collecting the Income Tax was approved by Select Committees of this House in 1852 and 1861, after hearing evidence on the subject from all parties interested. Further than that, although repeated attempts were made in Parliament between the years 1864 and 1906 to infringe upon the duties and powers of the Commissioners, those attempts in every case were defeated. Each body of local Commissioners has its own trained clerk. It appoints its own assessors, and, with exceptions, in the case of Scotland and Ireland, it appoints its own collectors. It is perfectly true that these collectors, although appointed by the General Commissioners, are paid out of State funds. It is only fair to add that these men are under strict public control, as I am sure the Chancellor of the Exchequer himself would admit. By the Act of Parliament they must obey the instructions of the Board of Inland Revenue. The assessors in their work are helped and checked by surveyors of taxes, who likewise are officers of the Board of Inland Revenue. These assessors are liable to heavy penalties for any failure in the discharge of their duty. The collectors have to give security for the discharge of their duties, and if there is any failure in respect of that the surveyor of taxes brings it under the notice of the General Commissioners and the matter is put right.
Let me add this word as to the mode in which the duties are performed. The work is done extraordinarily cheaply. I am told that in the City of London it costs¼d. in the£1. In the country it is 1d. in the£1. I should be very much surprised to hear that these duties could be discharged as cheaply by any Government official or any Government office. As to the amount of work which the General Commissioners do, I confess I am myself surprised. In England and Wales alone they deal, in round figures, with about 1,300,000 assessments in Schedules D and E, and between 700,000 and 800,000 are made in respect of employed persons only. The Chancellor of the Exchequer says he does not propose to interfere with any of their existing duties. In answer to a question the other day he said that of the assessments made under the direction of the General Commissioners there are a large number referring to weekly wage earners earning over £160 a year. He could not tell me how many, but there must be many thousands, because the information I have shows that assessments are made upon a class of skilled workmen earning over £160 a year, and including engineers, shipbuilders, brassfounders, papermakers, ordnance workers and colliers. The Financial Secretary also said the other day that, not only as regards their ordinary duties, but also as regards their duties in assessing and collecting from wage earners, there was no complaint whatever to be made as to the mode in which they discharged their duty.
That being the case, we naturally inquire what is this change, and why is it proposed? The change suggested is that, in the case of weekly wage earners earning over £130 a year, instead of being assessed and having their taxes collected by the General Commissioners, their taxes are to be assessed and collected in a manner different from that of any other class of Income Tax payers. These weekly wage earners are not to have the advantage the other classes have of assessment by an impartial local body—independent bodies standing between the taxpayer and the Crown. They are, instead, to have exceptional, and I think, most prejudicial treatment. Their Income Tax is to be assessed by the surveyor of taxes. I have not one word to say against surveyors of taxes. We all know that they are admirable, zealous, and able public servants. But I say that their position is different from the position of the men who assess the ordinary Income Tax payer. The surveyor of taxes is a servant of the Crown. His duty is to get as much as he possibly can out of the Income Tax payer. He would not be discharging his duty unless he did. But in the case of the ordinary Income Tax payer the assessment to Income Tax is made by an independent local body whose duty it is to stand between the Crown and him, and to see that the Crown does not exact too much. I ask the Chancellor of the Exchequer, and I hope he will give me an answer: Is there any reason why these relatively poor men in the position of weekly wage earners, who are going to be assessed to this tax, should be treated in a different and less advantageous way than any other class of Income Tax payer? They have not the same opportunities, as a rule, of getting skilled and expert advice, and yet, instead of having this buffer, as I may call it, between them and the Crown they are to be taxed directly by the surveyor of taxes without the intervention of this independent local body.
If ever there was a case where the onus of proving the necessity for a change lay upon the man who proposed the change, I should have thought it was the present case. The Chancellor of the Exchequer proposes the change, and it is for him to make out his case. I looked with some curiosity to see the argument by which he supported the change when the question was discussed here last. I propose to examine what he then said, and I hope to do it fairly, because there is no object in twisting arguments when one wants to see what is really at the bottom of the matter. In the first place he told us that the assessment of weekly wage earners would entail a very great deal of new work of quite a different kind to anything which has been carried out by the General Commissioners I dispute both of these propositions. I say most of the work is not new at all except in the sense that there is an increase of work owing to these new taxpayers being brought in. But, as I have already pointed out, a great deal of precisely the same character work is already done by the General Commissioners, inasmuch as they already tax weekly wage earners earning over £160 per year. That is not all, because in so far as this work is new it is not different in kind to the work they did before. It may be, indeed, it is practically the case that the only difference in the work now proposed to that hitherto done is that instead of one assessment a year they will have to make four assessments a year, and at the end of the year, if there has been any overpayment, it will have to be refunded. But that is not difference in kind, and I would really ask the Chancellor of the Exchequer to reconsider his reason for the change when he says it is difference in kind. I say the only new duty will be to examine matters at the end of the year and see whether a man has overpaid, and if he has to repay him.
If I want a really conclusive argument to show that this work is of a character which the General Commissioners can and will do perfectly well, I may take the Chancellor of the Exchequer's own statement. What he said was this:— by the Commissioners, but paid out of public money, and the reason why the system has worked so well is because they are under public control, and they give security for the carrying out of their duties properly. If the argument of the Chancellor of the Exchequer as to divorcing patronage from payment was in any sense valid, surely it would be an argument for holding to the present system. The truth is, there really is no validity in that argument. The present collectors and assessors, although paid by the State, are appointed by the Commissioners, and therefore in the future they can be appointed and selected in the same way. They can be appointed by the Commissioners and paid by the State. I need not go into any further arguments or reasons for the change advanced by the Chancellor of the Exchequer.
But I would point out to the House that if the Bill remains as it stands now the Chancellor of the Exchequer will be guilty of a serious inconsistency. I dare say he did so inadvertently, but he told us, when the Bill was before the House last time, that he did not propose to take anything away from the General Commissioners which they had now got. That implies, of course, that all the persons with whom they now deal are to be left to them. May I put this question to the right hon. Gentleman? If he does not propose to take anything away from the General Commissioners which they have now got, does he propose to leave them to assess and collect taxes from wage earners earning over £160 a year? As the Bill stands, if it does not propose to do that, it would mean ousting the Commissioners' jurisdiction to that extent. Perhaps I am wrong in that, but as the Bill stands I understand that for all wage earners earning over £130, including those over £160, there is to be this new system of assessment and collection—assessment by the surveyor of taxes and collection by collectors appointed by the Board of Inland Revenue. It will be interesting to hear from the Chancellor of the Exchequer what is to be the exact position of wage earners with only £160 a year, who, up till now, have had their Income Tax assessed by the General Commissioners. In future will they have it assessed by surveyors of taxes appointed by the Inland Revenue?
I may summarise my objections in two or three sentences. In the first place, the system has worked well for over seventy years, and is in accordance with constitutional usage. In the second place, no adequate reason has yet been given for the change. In the third place, from the point of view of the taxpayers, there is grave objection to making this change because you are depriving these weekly wage earners who have the most need of protection, seeing that they are men who cannot get expert advice in the same way as men in our own position in life; you are depriving them of the protection which assessment by local bodies gives to all other classes of Income Tax payers. And my last main reason for objecting to the change is that it must be necessarily very costly. The Chancellor of the Exchequer goes to the representatives of the wage earners and preaches economy. May I be allowed to say to him that I think he does it very well. I read his speech with great admiration, and I now ask him to apply those principles of economy which he so admirably urged upon the representatives of the trade unions to this particular change which he now contemplates. Is there any reason why, when he imposes a tax for the first time on wage earners down to £130, his economy should be thrown to the winds and he has to set up a necessarily costly system of State officials in order to collect the tax, when the existing system is good enough and is approved of as regards other classes of Income Tax payers? Why should you create these new State officials to do work which has been up to now perfectly well and cheaply done under the existing system? Of course it would require, owing to the large number of Income Tax payers, a certain increase in the staff of the General Commissioners if they were to do the work, but it is quite a different thing from increasing the existing staff which is doing the work cheaply and setting up a new Department of State, with costly officials at the head of it, in order to do work which is already so well done.
Our fears in this matter are not altogether without foundation. Most of us have read that somewhat ominous circular which was sent out from Somerset House advertising the possibility of new post's with salaries varying from £100 to £1,000 a year. These new posts presumably to be created for the purpose of the Clause which is under discussion, and this at a time of enforced war economy! That is not all, because if this new system is adopted, there will be something like 300 or 400 new premises in different parts of the country which will be necessary to accommodate these new Government officials. For these new premises, rates, taxes, repairs, upkeep, fixtures, fittings, furniture and all the rest of it will have to be provided out of public funds. Perhaps I have put the number of 300 or 400 too high, but if he is going to set up the staff he contemplates he will require a large number of new premises throughout the country, with all the expenses I have indicated. Can he give us, in justification for the proposal, any estimate of the cost of all these offices, of the upkeep of all these offices and of the fixtures and fittings; and can he give us any estimate of what the salaries of all these new officials will be, what their pensions will be, and what the total cost to the public funds will be, if we adopt this new system of State officials as compared with increasing the staff of the existing local tribunals? I trust it is not too late to hope that, at a time when the public and private economy is an urgent matter, he will abandon a proposal which, while not in any way improving the fairness or increasing the efficiency of this mode of collecting Income Tax, will undoubtedly throw new and heavy burdens on the public purse.
I beg to second the Amendment. I am very sorry that the Chancellor of the Exchequer should have introduced this proposal to do away to some extent with the present Commissioners and set up this new and very expensive body. I understand that this is not a war measure at all, and that it is not a matter of emergency or anything out of the way. I have no hesitation in saying that, if this House were in its normal condition, no Government whatever would have the slightest chance of carrying a proposal doing away with the old Commissioners. It is all very well for the Chancellor of the Exchequer to laugh, but is what he is doing fair? We have given him great power. Having given him that power, having sunk everything in the hope that the Government would do their very best to end the War, most of us have refrained even from making speeches or putting questions in this House for the last year and a half solely for the purpose of enabling the Government to get done business directly connected with carrying on the War successively. So far as I can understand, not a single reason of any value has been given; certainly no reason having anything to do with carrying on the War has been given in connection with this proposal. I trust that even at this late hour the Chancellor of the Exchequer will not proceed with it. It cannot be properly discussed. It is known not to be wanted, and while we have this promise on the part of the Government and of authorities of all sorts and sizes, namely, that economy shall be carried out and persisted in, is it fair that the Government should come down and make a proposal to set up all these new offices, with the buildings, etc., at a moment when we are asking for practical economy? have not heard of anybody being in favour of this proposal. Certainly in the City of London it is not wanted at all. There is no call for it, and it must cause a lot of extra expense. I do not attempt to go into the arguments the hon. and learned Member for York (Mr. Butcher) has fairly and properly set before the House, because I do not want in any way to stop the Government from getting their Finance Bill through, but I trust that the Chancellor of the Exchequer will bear in mind that this is not a War measure, that he has no honest right whatever to make use of the Coalition Government to pass something which he knows as well as I do, if the House were in its normal condition, could not pass at all. I hope, therefore, he will allow this Clause to be deleted and got rid of altogether.
I recognise, of course, the perfect right of the hon. and learned Gentleman (Mr. Butcher) to move this Amendment and to bring the subject as fully as he did before the House. I do not in the least complain, but I do observe it is an inconvenience arising from a necessary circumstance of occasional attendance only in the course of Debate. This subject was raised on the preceding Clause—Clause 25—when a whole series of Amendments were accepted by us in consequence of an arrangement that was come to between the Treasury and the representatives of the General Commissioners all over the country.
The right hon. Gentleman suggests I was not here. I was here during the whole period that the last Clause was being discussed, and I am right in saying that the last Clause had nothing whatever in the world to do with the question now under discussion.
We had a long Debate in Committee on this subject, and there was a very general feeling expressed on both sides of the House against the proposal of the Bill as it then stood. I recognised that feeling, and I undertook to do my utmost between Committee and Report to come to an agreement with the representatives of the General Commissioners. I have come to an agreement.
With all the General Commissioners?
With the representatives of all of them.
Will the right hon. Gentleman tell us something about it? We do not know what the agreement is.
It is incorporated in the Amendments. Every one has been the subject of discussion and debate.
Does it include the Commissioners for the City of London?
Yes. It includes Sir Thomas Hewitt.
Mr. Cosmo Bonsor?
Yes, and all the Scottish and Irish Commissioners. I have come to this arrangement with them, and, in consequence of it, placed the Amendments on the Paper, and I thought the whole matter was settled. The hon. and learned Gentleman is absolutely within his rights, of course, and is justified in raising the whole question afresh if he chooses, but I think his arguments, in the teeth of the arrangement that is made, sound a little hollow.
Will the right hon. Gentleman maintain that the Commissioners are the only people who ought to be satisfied, and that the taxpayers and Members of the House of Commons have nothing to do with it?
No. I said the hon. and learned Gentleman had a perfect right to bring this case forward. As a Member of Parliament, he was absolutely justified, but I say that, in view of all that took place in Committee—
The whole thing was left open in Committee.
For me to endeavour to come to an arrangement with the Commissioners.
As to collection?
No, as to assessment and collection. It stands upon record. A very considerable amount of time was occupied in making the necessary arrangements with the Commissioners, while the hon. and learned Gentleman, who is perfectly within his rights if he chooses to do so, makes a speech in which he absolutely ignores the whole of the arrangements which have been come to in pursuance of the agreement.
Behind our backs.
Is it the fact that these Commissioners have given us away, and are we obliged to follow the Commissioners?
Certainly not.
What authority had the members whom the right hon. Gentleman saw to pledge the other Commissioners, more especially as regards the City of London? Who has pledged the authority of the Commissioners of London to make any arrangement? I shall certainly take steps upon it if the right hon. Gentleman will tell me.
I will give the hon. and learned Gentleman the whole proceedings.
I had a letter from the General Commissioners for the City of London, and received one of them this afternoon. They asked me to say they had come to an agreement with the right hon. Gentleman.
I am much obliged to the hon. Baronet. That is certainly the fact. We did come to an agreement, and these Amendments were placed on the Paper in consequence. In these circumstances, I hope the House will not require me to do more than touch briefly upon the arguments advanced by the hon. and learned Gentleman. He speaks of us under this proposal as setting up a new State Department.
State officials.
I took down the hon. and learned Gentleman's words, "set up a new Department in the State." Frequently in the course of his speech he spoke of assessment by Inland Revenue Commissioners as being a novelty, as being unconstitutional, and as being a practice which this House did not tolerate. He used every sort of expression in regard to this novelty. What is the fact about it? I do not say the total number of assessments, but as regards the yield of the Income Tax, the cases of assessment made directly by the Inland Revenue Commissioners amount to something between 30 per cent. and 40 per cent. of the whole of the yield of the Income Tax and Supertax together, and it includes a very large number of persons. The assessments are made directly by the Inland Revenue Commissioners on all Super-tax payers, on all salaried railway officials, including all employés of the Crown, all taxpayers in Ireland, all persons entrusted with payment in the United Kingdom of dividends, interest from Colonial and foreign Governments and companies, all payments out of public revenue of the United Kingdom, and any person chargeable under Schedule D who elects to be assessed by special Commissioners, Crown officials, in preference to assessment by local Commissioners. It is no new Department in the State. It is not unconstitutional; it is not a novelty. On the contrary, in many cases it is found to be the most convenient method of assessment and collection. As regards collection, not only does it cover the whole of Scotland and Ireland, and, as the hon. Gentleman said, some towns in England and Wales. It includes all the following towns in which the collection is made by collectors appointed by the Board of Inland Revenue: Birmingham, Manchester, Sheffield, Leeds, Bristol, Hull, Bradford, Newcastle, Nottingham, Leicester, Cardiff, Salford, and Oldham. In fact, I could go on. The list is three times as long as those I have read, and includes nearly the whole of the principal cities and towns in the country. So much for the new Department of the State. Then the hon. and learned Gentleman speaks about economy, and says this assessment by State officials will be much more costly. We have to appoint a Surveyor of Taxes in any event. We shall, of course, where practicable, employ as collectors either the collectors who are collecting now or the collectors who are employed by the General Commissioners, whichever is the most convenient and the most economical. The notion that we are anxious to spend money, or that we should set up this system if it were going to be unduly extravagant, is quite mistaken. We have adopted this system because we believe it to be the only practicable method of carrying quarterly assessments and collection into practice. If the hon. and learned Gentleman had had an opportunity of including himself among those I consulted I should have been glad to explain the whole of the machinery.
Will the right hon. Gentleman explain it now? We knew nothing about all this.
The hon. and learned Gentleman knows what a mining district is like. You will have a whole series of small mining towns, or villages, which include in their area a very large number of persons who will for the first time become Income Tax payers under this law. But in that same area there has hitherto been a very small number of Income Tax payers, and consequently the work of the General Commissioners, though highly important, has not been either constant or very heavy. Now for the first time you will have a very large number of assessments which have to be made immediately, and you must have some official who will be in constant session, able to make an immediate assessment and to give instructions for the immediate collection of the tax. It has to be done quarterly, and in the case of large numbers of workmen who very often move from place to place and have to be traced. That is really, if it is not work in one sense of the same kind which the General Commissioners have done, at any rate work for which they have machinery on the spot in respect really of the same nature as the work to which they have been hitherto accustomed. We have been able to satisfy most people who have gone closely into the subject. For the quarterly assessment under this Bill the permanent official is essential. That is to say, you must have somebody who can deal with all the assessments as they come in one after the other quickly. If you do not, your tax will inevitably fall into arrears. After all, that is only the first stage in the assessment. If the hon. and learned Gentleman will look further on the Paper he will see another Amendment which we have put down by arrangement, namely, in paragraph (4) to add the words,
"Nothing in this Part of this Act shall affect the right of appeal to the General Commissioners."
It is necessary that there should be a safeguard for the taxpayer, and that safeguard is assured to him by the appeal. This is a new venture in taxation which it is not easy to carry out, and we want, at any rate, to be quite sure, so far as we can be, that our machinery is going to be effective. In order to have that security we feel that the machinery which we propose is necessary, and after long discussion with the General Commissioners we have come to the decision, by agreement, that this is the right method of carrying out the law. I hope, under the circumstances, the hon. and learned Gentleman will be satisfied.
Can the right hon. Gentleman give me the estimate I asked for as to the cost of additional buildings and of the salaries and fees of the officials?
No, Sir, I am afraid I cannot. It would be almost impossible to do so until we know with more definiteness what the number of the officials will be. I do not suppose that there will be any additional cost over what there would have been if the work had been done by the General Commissioners.
Has an estimate been made as to the relative cost?
I can easily get the estimate as to the relative cost, but I think I can say that the additional cost will be nil. We shall have to have our surveyors of taxes anyhow, and the collectors are paid out of State funds anyhow. We should not save anything by the hon. and learned Gentleman's proposal.
I have here the actual words of the letter written to me by the Commissioners of Taxes for the City of London, and I notice that they ask me to read it to the House. I will read shortly what they say:—
"The Commissioners of Taxes for the City of London, whilst still holding to the important principle of noninterference with the control of the General Commissioners of Taxes and their officials, yet, having regard to the sincere endeavours on the part of the Chancellor of the Exchequer to extend by the Bill fair treatment to them and their officials, reluctantly feel that they ought not to take part in further active opposition to this Clause."
That is the statement which I received to-day. I would add that the fact of the right hon. Gentleman having made an agreement with certain General Commissioners does not preclude in any kind of way Members of this House from discussing the matter or even acting in opposition to the General Commissioners.
Oh, no!
I think it is a very great pity that the General Commissioners have come to this conclusion, or, rather, the General Commissioners for the City of London. I do not know about any other General Commissioners. I believe myself, from what I have heard from them, that they were quite capable of carrying out the assessments and the collection, and I am sorry that they have not done so. I think it is a mistake to differentiate between different members of the community in this country. I do not know why working men should be treated differently from employers, or the idle rich, or any persons of that description. I think that the payers of Income Tax should be subject to exactly the same rules and treated in exactly the same manner. I do not think that the new procedure is going to lead to economy. Everybody knows perfectly well that Government officials are more expensive than private bodies. Under the circumstances, however, it seems to me that as the General Commissioners have come to an agreement with the right hon. Gentleman, it is hardly worth while pursuing the matter further. I do not know whether it is a good precedent that arrangements should be made outside the House, but it has been done, and under the circumstances I feel it is not worth while considering the matter further.
This question has resolved itself now, it seems to me, into the very practical question of rapidity of collection. It is quite clear that there is no grievance as regards the class of new taxpayer, as he is called, in regard to assessment, because the assessment, as the right hon. Gentleman has said, is purely a question of arithmetic. It can be done just as easily by the General Commissioners as it can be done by the Inland Revenue Commissioners through their surveyors of taxes. All they have to do is to get a return quarterly from the employers of the Actual amount of wages, and to deduct from that the allowance for any children up to a certain age which the man may have, and any small amounts for insurance. The workman is not prejudiced at all, whether that is done by the General Commissioners or whether it is done by the Inland Revenue surveyors of taxes, because it is more or less arithmetical. If he were prejudiced, and I think he is not, there is an appeal to the General Commissioners, that popular tribunal which has been so much praised by my hon. and learned Friend the Member for York (Mr. Butcher). Therefore, it really comes to the question of collection.
I quite see from what the Chancellor of the Exchequer has said that rapidity is the essence of the tax. We must not forget that, in approaching this question, and we must not lose ourselves in theoretical argument. The workman's quarterly returns must be collected as quickly as possible, because the workman moves about. The question is whether the collectors appointed by the General Commissioners can do that work as well as the collectors appointed by the Inland Revenue. The right hon. Gentleman has come to the conclusion, after discussing this very subject, the collection of these taxes, with the General Commissioners, that as a practical question they are not able to collect them so well as the Inland Revenue; therefore, they withdraw opposition to this Clause, and they seem to agree that on the whole, though they object on principle, in the circumstances of the case, these payments of Income Tax quarterly can be better and more efficiently collected by the collectors appointed by the Inland Revenue. It is quite clear that if the General Commissioners collected it they would have to appoint a great many more collectors, so that the saving of expense could not be very great. On the other hand we have an assurance of the Chancellor of the Exchequer that in every case where he can he will appoint the collectors who are appointed by the Commissioners as collectors of this new Income Tax. We have that assurance, I understand, from the right hon. Gentleman, that in every case as far as possible the collectors who are appointed by the Commissioners will be utilised for the purpose of collecting this tax all over the country.
indicated assent.
That will remove a great difficulty and a very great and justifiable prejudice which has existed in this House from the time this tax was first proposed, against the repeated attempts of the Inland Revenue to enlarge its jurisdiction, to oust the jurisdiction of the General Commissioners and to get the jurisdiction of the General Commissioners themselves. The hon. Member for York has made it so clear that, as the hon. Member opposite said, the House would reject any proposal of the kind if it were ever brought forward. But that is not the proposal before us tonight. The proposal before us merely resolves itself into a question of collection. The assessment is merely arithmetical. We heard the Chancellor of the Exchequer say in Committee that this new tax was, so to speak, trembling in the balance, and that if he had not proper machinery to collect it efficiently he had better drop it altogether, and inasmuch as he thinks it advisable that we should have such a tax at this time, and workmen do not object to it, and it is an education to them in a sense that they should be directly responsible for part of the cost of the War, and they will be more interested in the War from having to pay towards its expenses, I can no longer see any reason for the opposition which I had originally to this Clause, and I trust that it will be adopted in the form which the Chancellor of the Exchequer has put it down.
Though I have heard a good deal of the last discussion and the Debate on the present occasion, I have not, heard sufficient to make me share the opinion of the hon. Gentleman who has just sat down. I have heard a very good speech against the tax altogether from the Chancellor of the Exchequer. He has said a great deal to show that if it were necessary to tax people every three months, instead of every year, then it might be necessary to set up special machinery to put the tax into operation. But it seems to me that that is a very good argument against the new proposal to tax quarterly. I am against this tax mainly because it differentiates between working men and other men. That may be a theoretical, abstract sort of reason, but it is something which weighs on the minds of a large number of people.
What is the differentiation?
That you set up this special machinery.
It is not so.
The Clause says that the Commissioners of Inland Revenue may make regulations generally in respect to the assessment and collection of Income Tax in the case of weekly wage earners. Is not that differentiation?
A quarterly assessment.
It is made necessary by virtue of the quarterly assessment.
To make him pay quarterly instead of yearly is to the advantage of the working man.
The hon. Member has just shown that, owing to the migratory habits of working people, if they are subject to Income Tax at all it might be necessary to collect it more frequently. I say again that that is a reason, to my mind, why you should not have that Income Tax at all. I oppose the proposal first of all because it differentiates between working people and other people. I object to it also because it extends the principle of bureaucratic control and selection, as distinct from local control. The proposal has been defended on certain grounds by the hon. Gentleman who has just sat down. He said, first, that the tax would be better collected by the Inland Revenue people. Why should he say that? What justification is there for saying that? It seems to me that collectors ought to be appointed by local people rather than by central people. Then he says that provision is made for appeal to the General Commissioners. That is perfectly true. I find on page 17 of this White Paper that the Chancellor has an Amendment giving the weekly wage earner a right of appeal to the General Commissioners. What use is that to working men? The great majority of working men are absolutely unaccustomed to pay Income Tax, or to have anything at all to do with Government or other officials. Most of them are simply weekly tenants of houses, not even paying their own rates.
The great bulk of them are going, for the first time, to be subject to an Act of Parliament of this kind. They are to have an assessment sent down from some central office, scores of miles away, of which they know nothing, and forms will be made out for them in the usual manner, and then the hon. Gentleman says that, if any injustice is done by these bureaucratic officials, after all this simple working man has his remedy because he is going to be given a right of appeal to the General Commissioners. "The General Commissioners may if they think necessary for the purpose of—" and so on Just fancy all this stuff being put before the simple working man who is being taxed for the first time! With all due deference to the Chancellor of the Exchequer, to whom I give credit for having put this in, in order to meet certain objections, that appeal would be absolutely useless to nine out of every ten men brought under the operation of this Act. The Chancellor said a little while ago that this was an agreed Clause. Who agreed? Are we going to give up our rights in this matter? When this was last before the House I had been bombarded with letters from Glasgow, including a letter from the Lord Mayor of Glasgow, pointing out to me that the Commissioners there had given every satisfaction, that the people had got accustomed to them and felt a certain amount of confidence in them, and wanted to know for what reason the change was being made. I could give no reason, and I have not heard any yet.
It has been suggested that it might be necessary owing to the three-monthly collection, but even with regard to this the General Commissioners could very well add to their staff, and that would not involve the setting up of any new machinery or anything of that sort. The Chancellor of the Exchequer has no business to go behind the back of the House of Commons and make an arrangement with the General Commissioners or any other Commissioners. My hon. Friend (Mr. Morton), speaking for the City of London, said that so far as he knew nobody there has asked for this. Nobody here has asked for it. I happen to be in the position to speak for the second city of the Empire, and when the matter was last before the House I had all those letters protesting against the change. I have had no letter since indicating that people have agreed to the change, and I have no reason to believe that these little alterations which are now introduced by the Chancellor have ever been before the people, and they are certainly not calculated to gain the confidence of the working people and make them anxious to be brought within the scope of this Bill.
Whatever arrangement the Chancellor of the Exchequer has made with the General Commissioners in the City of London, however much he may have satisfied them as to the machinery he has now adopted for the collection of this tax, he has not had time to communicate with the hon. Member for the Blackfriars Division (Mr. Barnes). I listened with a good deal of surprise to what I can only term an attack on the hon. and learned Member for York (Mr. Butcher), who not only asked for some explanation of this change, and expressed his opinion on this proposal, as of course he has a right to do, but also gave to the House a clear and lucid account of the law with regard to Income Tax at the present time. Here we have a proposal which we are told is based on an agreement arrived at since the Bill was in Committee, and I should like to remind the House what it was the Chancellor of the Exchequer said he was going to do between the Committee stage and the Report stage. On the 26th October he said:—
I cannot find any reference in the Debate, nor any statement that he was going to consult the General Commissioners in the City of London and arrive at an agreement with them in reference to the method of assessment, while this House was to be entirely debarred from saying anything whatever on the subject. There has not been a single word said by the Chancellor of the Exchequer, or by anybody who supported this proposal, giving any reason why this particular extension of the Income Tax could not be met by the necessary addition to the staff of the present General Commissioners. I have here a letter which relates to Finsbury. There, where they are already engaged in assessment for Income Tax, they have gone very carefully into the matter, and they say that they believe the difference in cost to Finsbury alone between the Chancellor of the Exchequer's proposal setting up a new body altogether, instead of an addition to the staff of the existing assessment body, would be an increase of £2,500 a year. They estimate that an addition of £500 a year would cover all the collection for the borough of Finsbury in connection with the new Income Tax payers. It may be that there are certain districts in the country where very large new bodies of taxpayers will be brought in, but why, because in a mining village it may be almost necessary to have practically a new Income Tax assessing body, should the whole of England—and in many districts where only a comparatively small number of additional taxpayers will be brought in—be subjected to an entirely new method, involving new principles which have been only very partially accepted, and I think never accepted in principle, as the basis of Income Tax assessment? We also have had no explanation on the point—which even the Chancellor of the Exchequer admitted was a point of great difficulty—of marginal contact between the new body that is going to be set up and the old Commissioners of Income Tax. There is no doubt that you will get a great deal of overlapping, and it would have been very much simpler to extend the staff, and to extend the jurisdiction of the existing body of Income Tax Commissioners, than to set up a new authority side by side with them, running practically parallel with them, and touching at many points, thus leaving it possible that some wretched Income Tax payer will be a subject of dispute between the two bodies. It seems to me that it is a most complicated as well as costly method which is proposed, whereas it would have been quite easy to have had the necessary clerical staff.
Then, as to the cost of buildings, the Chancellor of the Exchequer said it would be very difficult, until he could find how many Income Tax payers were to come in, to say what the cost of buildings will be. We find in regard to this new method of legislation—and it is a point on which I wish to warn the House—that the cost of buildings alone, as well as the cost of salaries, has become an enormous item, and I do not think that, in this instance, it is in the least likely to be less. I find the item of sundry public buildings provided for in the Votes has risen within the last ten years from £490,000 to £843,000, and that increase alone means at 5 per cent £8,500,000 on the National Debt. I do not think that this is the time for a proposal of that kind of permanent expenditure on new buildings without the slightest protest from any Member of this House. In regard to this agreement which has been arrived at with the General Commissioners, I should like to know whether the people who saw the Chancellor of the Exchequer, or other Member of the Treasury Bench, really represented all the local bodies as well as the City of London—whether the representatives of all the local Commissioners were there. Whatever arrangement was made it is perfectly clear, from what the hon. Member for the Blackfriars Division has said, that the people who are actually concerned have never been consulted at all about any agreement; yet we are told that because this Agreement has been reached, and the basis settled, the matter is not to be reopened. I do not know whether my hon. and learned Friend is going to press the matter to a Division, but I must say that a more unsatisfactory statement and a more unsatisfactory Debate I have never listened to in this House. We began with a protest from the Chancellor of the Exchequer against anybody venturing to raise a question at all, and now we find that the people most concerned have never been consulted.
I desire to correct certain misapprehensions under which the House is labouring. The hon. Member for Devizes (Mr. Peto) could discover no sort of promise in the Committee stage for anything that was going to be done, except a consultation as to the best method of enforcing the Statute. I would like to draw his attention to the OFFICIAL REPORT of the 26th October, when my right hon. Friend the Chancellor of the Exchequer used these words:—
"I will communicate with the representatives of the General Commissioners between now and the Report, and I will endeavour to come to some definite arrangement as to the final form of the Clause."—[OFFICIAL REPORT, 26th October, 1915, col. 142, Vol. LXXV.]
That is the promise that he has carried out, and that is the promise which he refers to when he says that there has been an agreement on this Clause between the interested parties. My hon. Friend the Member for Blackfriars (Mr. Barnes) said, "What about Glasgow? I have had letters from the people at Glasgow, and I have no reason to believe that they are satisfied." The representatives of the Glasgow Commissioners came to the Treasury and saw the Chancellor of the Exchequer and myself, and from the lips of one of their representatives (Mr. Baird) we had the statement that so far as Glasgow was concerned they were quite satisfied. I would tell my hon. Friend the Member for Blackfriars that Glasgow was far easier to deal with than the City of London, as London wanted far more than Glasgow wanted. What is the complaint about this Clause? Let us just consider what it is that hon. Members are complaining about. We are told of new machinery which is going to be very expensive. "The cardinal principle of the Income Tax assessment"—I am quoting now from a leading article in the "Times"—"namely, by local Commissioners independent of the revenue officials"—that is the principle which is being infringed. We are told that we are departing from the cardinal principle of Income Tax assessment by local Commissioners independent of the revenue officials, and that is the forefront, at any rate, of our offence. It really is rather extraordinary to have that stated as one of the cardinal principles of the Income Tax when we know how very largely that is not the principle at all of the Income Tax assessment, for 36 per cent. of the Income Tax is now collected not by local Commissioners independent of the revenue officials, but by the revenue officials themselves. All the Super-tax, all the Income Tax paid by railway companies, and by the salaried railway officials, all the Income Tax paid by the employés of the Crown, and by soldiers and sailors and Civil servants, and all the Income Tax in that distressed country, Ireland, and all the Income Tax on dividends paid in the United Kingdom, and on interest and dividends on Colonial securities, are collected by Inland Revenue officials, and 36 per cent. of the total already infringes the sacred principle which we are called upon to admire now, and which we are told is a new departure to depart from.
May I ask how many in number are there assessed by Special Commissioners?
I can supply the hon. Member with that information, but I am dealing now with the amount. I would remind hon. Members that I do think it is rather hard on the Inland Revenue officials, and not only rather hard but most unfair, to have the remarks that are always made about them, as though they were the most brutal, prejudiced, and unfair-minded of men. Consider all that we have done with the Income Tax since 1906, and how it has been amended and altered, and how new elements have been brought in, and of the differentiation first between earned and unearned incomes, and then the differentiation between one kind of unearned income and another, and to every appeal that the House of Commons has made to the Inland Revenue authorities they have responded. It is not true to say that they are primarily interested in the collection of money. It is true to say that they are probably the most public-spirited branch and the most efficient of the Civil Service, and that they have responded to every demand made by the House of Commons, and their only zeal for the honour of their profession has been to see that the taxes imposed by this House worked well and are collected fairly. I do not believe that any country in any age has got a body of public servants with a record like the record of the Inland Revenue officials. I venture to suggest that the constant jeers and sneers at officials who have loyally served the British House of Commons is not the way to get good service out of some of the best of our officials.
Who has said a word against the Inland Revenue officials?
I am simply taking this opportunity of replying to a series of remarks which hon. Members have made. I have sat through most of the Debates, and anybody can see on reference to the OFFICIAL REPORT what in spirit anyhow ran through the speeches of hon. Members not only to-night but before to-night, and which I happen to know is very much felt by those concerned.
The right hon. Gentleman talks about jeers and sneers. I was careful to say in referring to the surveyors of taxes that they were a most upright, able, zealous and honourable body. I indulged in no sneers or jeers.
The whole controversy as to Inland Revenue officials and local commissioners and boards of referees is often based upon the statement, will they be Government officials or unprejudiced people. Remarks of that kind are deeply resented and, however intended, wound Civil servants. It is said also "you are going to appoint collectors by the Commissioners of Inland Revenue, and once again you are making a breach of the principle by which the collectors have in times past been appointed not by the Commissioners." Will the House be surprised to learn that 64 per cent. of the revenue derived from Income Tax is already collected by collectors appointed by the Inland Revenue. In most of our large towns those people are appointed already by the Inland Revenue, and therefore there is no difference in principle. The hon. Member for Blackfriars said, "What is the use of appeal to the General Commissioners of Income Tax from the Inland Revenue officials?" And he added that he saw that an Amendment was down in the name of the Chancellor of the Exchequer, and he asked what use was it? I would respectfully point out to him that the Amendment is not an Amendment giving an appeal which was not in the Bill before the Amendment was put down. The Amendment makes it clear that there is no intention of depriving those assessed to the tax of their appeal, which was always in the Bill, as we thought, but it was desired to make it clearer, and the Amendment, I think, makes it so. It is quite wrong to say that this assessment will be made far away in some place to which the taxpayer has no access and over which he has no control. The surveyor of taxes will make the assessment, and in practice very largely the surveyor of taxes always did make the assessment. The only thing that differs is that the assessment will now be signed by the surveyor instead of being presented by the surveyor of taxes to the General Commissioners.
I do not know whether the House will be interested, but I will take the case of the City of London. For the year 1914–15 there were some 107,000 assessments of employed persons in the City of London. Of those, 84,000 were under Schedule E, and it was technically the function of the assessors to make the assessments. These gentlemen, however, contented themselves with making 9,000 assessments in gross sums—that is, without any allowances—and the balance of 75,000, as well as the revision and the completion of the 9,000, were done by the surveyors, and the whole were accepted without investigation by the General Commissioners. Therefore really hon. Members are making a mountain out of a molehill. A large number of new people have to be assessed, and it is not an infringement of the practice for them to be assessed by officials of the Inland Revenue. Many people are already assessed by officials of the Inland Revenue. Having a great number of new people to be assessed, and finding that in practice the surveyors actually do the work and make the assessments, and that their work is taken unquestioned by the General Commissioners, because speed is of the very essence of the working of the tax, and because payments have to be made quarterly, and therefore meetings of the General Commissioners at frequent intervals would be very cumbersome and lead to delays which might vitiate the tax, we have suggested that the General Commissioners' signature should be dispensed with and the assessment signed by the surveyors of taxes themselves. There is no great infringement of principle there; in fact, I think there is no infringement of principle at all. It is true that the General Commissioners of Income Tax, especially in the City of London and in different parts of the country, objected to the Clause as first framed, but they, including the Commissioners of the City of Glasgow, have now withdrawn their objection. I would, therefore, respectfully submit to the hon. Member that if he still proposes to divide upon this Amendment he is dividing on an Amendment which is not worthy of so extreme a measure.
I rise mainly for the purpose of associating myself with certain observations made by the Financial Secretary to the Treasury. The right hon. Gentleman said that those who were opposing the proposals of the Bill were making a mountain out of a molehill. With that expression I heartily agree. I am sure that if those Members had been acquainted with the machinery and the working of the Income Tax administration they would not have put forward the statements they have made to-night. I am sure that my hon. Friend the Member for the Blackfriars Division, if he had known anything about the way in which the Income Tax Acts are administered, would not have committed himself to the extraordinary statements which he made just now. At the conclusion of his speech I felt considerable difficulty in knowing what he really wanted. His earlier observations conveyed to my mind the impression that he was supporting the General Commissioners of Income Tax, the local assessment, and the local collection of Income Tax; but the concluding part of his speech was a vehement attack upon that part of the Bill which proposes to retain the right of appeal to the General Commissioners. Really, my hon. Friend ought to have made it more clear what he wants. He spoke about bureaucrats. By a bureaucrat I suppose he means a person in the service of the State; but an official appointed by a local body of men, doing something like the same work, is not a bureaucrat. I do not know what kind of epithet my hon. Friend would apply to that man.
The position is in a nutshell. The proposals of this Bill do not take away from the local assessors of Income Tax or the General Commissioners of Income Tax any part of the work which devolves upon them at the present time, or any of the duties which they now discharge. What it does propose are additional assessors, and that the new class of assessments which are called into being shall be made by the surveyors of taxes, who in reality do the work which is nominally accredited to the General Commissioners of Income Tax and the local assessors. Take this question of the right of appeal to the General Commissioners. As a matter of fact, anybody who knows anything about the working of the Income Tax laws knows that 99 per cent. of the disputes in regard to Income Tax assessments are settled now by the surveyors of taxes. It is stated that there were twenty-seven appeals in the City of London last year, and the impression conveyed in the circular is that those appeals were dealt with by the General Commissioners of Income Tax, with the assistance of the local assessors. That is not the fact at all. Ninety-nine per cent. of those cases were dealt with by the surveyors of taxes, and I am sure that any Member who has any technical knowledge of this question, or has had to arrange some alteration, abatement, or adjustment in connection with his own Income Tax assessment, will agree that the surveyor of taxes, with his practical knowledge, his knowledge of the law, and his wide experience, is a far better person to deal with the matter than the General Commissioners of Income Tax, who know nothing about the Income Tax laws. As a matter of fact, the work with which the General Commissioners of Income Tax are accredited is purely of a nominal character. The real work is done by the surveyors of taxes. Suppose the proposal of hon. Members opposite were adopted. It means unnecessary duplication of work. The surveyors of taxes would really continue to do the work, as in the past, but you would have the local assessors and the General Commissioners signing their forms, with a great amount of unnecessary clerical work in connection with it. The proposal of the Bill obviates that unnecessary duplication of work.
I want to associate myself with what was said by the right hon. Gentleman in regard to the officials of the Commissioners of Inland Revenue. It might be difficult to point out any statement made in the course of the Debates on the Finance Bill, which contains a slur upon or jeer against the revenue officials, but anyone who has followed these Debates closely knows that that has been implied or insinuated in a great many speeches. I strongly protest against that. I associate myself with the statement of the right hon. Gentleman that there are no more high minded, fair minded, and public spirited servants in this country than the surveyors of taxes. I know of no body of men who are better entitled to be entrusted with additional duties. Objection has been raised against the surveyors of taxes having these new duties exclusively placed upon them. Are hon. Members opposite aware that under this Bill the surveyors of taxes are made the one assessing authority in connection with the Excess Profits Tax? Therefore, hon. Members who object to the surveyor of taxes assessing the workman's. 5s., 10s., or £1 have never uttered one single word of protest against the surveyor of taxes as the exclusive taxing authority for individual assessments, it may be of £50,000 or £100,000. I rise, as I said, mainly for the purpose of associating myself in the strongest possible manner with the Secretary to the Treasury in what he said about the worthiness of the surveyors of taxes and of the Inland Revenue officials generally.
Question, "That the words proposed, to be left out stand part of the Bill," put, and agreed to.
That disposes of the next Amendment on the Paper.
Further Amendments made: In Sub-section (4), after the word "tax" ["collection of Income Tax"], insert the words "under this Act."
Leave out then word "employed" ["of employed weekly wage earners"].
After the word "regulations" ["those regulations provide"], insert the words; "in the case of those weekly wage earners."
There are two Amendments to follow—one on the Paper, while the second has been handed in to me. I think the manuscript Amendment ought to go in front of the one on the Paper.
It does not matter, whichever you think best, Mr. Whitley.
It seems tome to read better as I suggest.
Yes, certainly.
Amendment made: At end of Sub-section (3) add "(4) Any Income Tax assessed and charged quarterly shall, without prejudice to any other method of recovery under the Income Tax Acts, be also recoverable summarily, and as a civil debt."
I beg to move to add:
"(5) Nothing in this Part of this Act shall affect the right of appeal to the General Commissioners, and the General Commissioners may, if they think it necessary for the purpose of expediting the hearing of appeals, add to the number of General Commissioners by the co-optation or appointment of such persons for the purpose as they think fit.
The powers under this provision may be exercised notwithstanding any limitation under any Act of the number of the General Commissioners."
Does this apply to the case of assessments under the other Section? In the quarterly assessments will there be an appeal to the General Commissioners?
was understood to reply in the affirmative.
Question, "That those words be there inserted," put, and agreed to.
CLAUSE 29.—(Provisions with Respect to the Charge of Income Tax on Non-Residents.)
(1) Section forty-one of the Income Tax Act, 1842 (which relates to the charge of Income Tax in special cases), shall, so far as it relates to the taxation of non-residents, be extended—
( a ) so as to make non-resident persons chargeable to Income Tax in the name of any branch or manager as well as in the name of any factor, agent, or receiver; and
( b ) so as to make non-resident persons so chargeable, although the branch factor, agent, receiver, or manager may not have the receipt of the profits or gains of the non-resident.
(2) A non-resident person shall be chargeable in respect of any profits or gains arising, whether directly or indirectly, through or from any branch, factor-ship, agency, receivership, or management, and shall be so chargeable under Section forty-one of the Income Tax Act, 1842, as amended by this Section, in the name of the branch, factor, agent, receiver, or manager.
(3) Where a non-resident person not being a British subject or a British, Dominion, or Colonial Firm or Company, or branch thereof, carries on business with a resident person, and it appears to the Commissioners by whom the assessment is made that, owing to the close connection between the resident and the non-resident person, and to the substantial control exercised by the non-resident over the resident, the course of business between those persons can be so arranged, and is so arranged, that the business done by the resident in pursuance of his connection with the non-resident produces to the resident either no profits or less than the ordinary profits which might be expected to arise from that business, the nonresident person shall be chargeable to Income Tax in the name of the resident person as if the resident person were an agent of the non-resident person.
(4) Where it appears to the Commissioners by whom the assessment is made or, or any objection or appeal, to the General or Special Commissioners that the true amount of the profits or gains of any nonresident person chargeable in the name of a resident person with Income Tax cannot in any case be readily ascertained the Commissioners may, if they think fit, assess the non-resident person on a percentage of the turnover of the business done by the non-resident person through or with the resident person in whose name he is chargeable, and in such case Section fifty-three of the Income Tax Act, 1842, shall extend so as to require returns to be given of the business so done by the nonresident through or with the resident in the same manner as returns are to be given under that Section of the profits or gains to be charged.
(5) The amount of percentage shall in each case be determined, having regard to the nature of the business, by the Commissioners by whom the assessment on the percentage basis is made, subject, in the case of an assessment made by the additional Commissioners, to objection or appeal to the General or Special Commissioners.
If either the resident or non-resident person is dissatisfied with the percentage determined either in the first instance or on objection or appeal by the General or Special Commissioners he may, within four months of that determination, require the Commissioners to refer the question of the percentage to a referee or board of referees to be appointed for the purpose by the Treasury, and the decision of the referee or board shall be final and conclusive.
(6) The fact that a non-resident person executes sales or carries out transactions with other non-residents in circumstances which would make him chargeable in pursuance of this Section in the name of a resident person shall not of itself make him chargeable in respect of profits arising from those sales or transactions.
Amendment made: In Sub-section (3), after the word "British" ["a British, Dominion, or Colonial"], insert the word "Indian."—[ Mr. Montagu. ]
I beg to move, to add,
"(6) Nothing in Section forty-one of the Income Tax Act, 1842 (as amended by any subsequent enactment or by this Section), shall render a non-resident person chargeable in the name of a broker or general commission agent in respect of profits or gains arising from sales or transactions carried out through such a broker or general commission agent."
I beg to move, in the proposed Amendment, to leave out the words "a broker or general commission" and to insert instead thereof the word "an."
The Section would then read:
"(6) Nothing in Section 41 of the Income Tax Acts, 1842, etc. …. shall render a non-resident person chargeable in the name of an agent and in respect of profits or gains arising from sales or transactions carried out. …
When this subject was last discussed in Committee, several hon. Members were very anxious that an agent should not be included in the tax which was to be imposed upon non-resident persons. They pointed out that that would mean either that the business would not come here at all, or that an agent would be sent from abroad, and would reside here at an hotel for a short period to execute orders and would go away again; and that the profits charged by the agent on behalf of the members of the firm abroad would be increased so that the principal would evade payment of the tax. There was considerable discussion. What followed I quote from the OFFICIAL REPORT:—
"Be it enacted that the trustees, guardians … or committee of any person, be it a married woman, a lunatic, an idiot, or insane, having the direction or control or management of the property so concerned of such person … residing in Great Britain, or not, shall be chargeable at the same rate, in the same manner. …"
It deals, as far as I can see, almost if not entirely with the guardian of a person who is an infant or who is a married woman, or who is a lunatic. I have been informed by a person in whose authority I have every confidence that the Courts have held in some mysterious way, because the commas are omitted, that this applies to somebody else, but whether this is so or not—I should say, looking at it, it is very doubtful—that was not the question I raised. The question I raised was very simple, and the pledge of the right hon. Gentleman was also very simple, and I feel certain that he will carry out that which he promised in Committee. I have no doubt he will do so because if in deference to requests by the Government we postpone any Amendments we have during the Committee stage until the Report stage, and the Government does not carry out the pledge which it gives, it will make it really impossible to carry on the business of this House, because on the Report stage there are not very many Members present, and the Amendments are not always very clear—I do not complain of the Government because legal Amendments are not clear—and the consequence is that people, trusting to the Government to carry out their promises, go away. Then, unless the pledges of the Government are fulfilled, those who are entrusted with them are placed in a very awkward position.
This is a very serious matter concerning a large number of commercial people, not only in London but in other places. If the law exists by which these people are already subject to taxation, why is it necessary to bring in all this new Clause and all these new Regulations? I must confess that I am a little sceptical about that. I have never found that the Government, or any Government, or any draftsmen are desirous of putting Clauses in a Bill unless there is some object in it. I have never found a Clause put in a Bill to give effect to an old Act of Parliament unless it alters that old Act of Parliament, and I feel certain in my mind there was something of that kind in putting in the Clause. With regard to this particular Amendment, why should not a merchant who acts as an agent be in the same position as a commission agent or broker? There are a large number of people who have businesses of their own, but who also act as agents. When they are acting as agents they should be treated exactly in the same way as any other broker or agent. They have no personal interest in the business, but only act for a commission, and they should be treated in the same way. I had the opportunity of consulting a learned friend of mine this afternoon, and he tells me that if the word "agent" appears, and it is not particularised as to any kind of agent, it is perfectly simple, and there will be no legal confusion, because it is always understood that where a man acts as an agent, even if only for one day or part of a day, this Amendment will apply. Therefore, in these circumstances, especially in view of the pledge the right hon. Gentleman has given, I beg to move the Amendment in the sure and certain hope that the right hon. Gentleman will accept it.
I should like to support this Amendment. The Amendment of the Chancellor of the Exchequer was put in to fulfil a pledge given in Committee, in which he said he would carry out the wishes of the Committee, which were very definitely expressed. The right hon. Gentleman pledged himself to modify the Clause so as to prevent it being so wide in its application. In his Amendment he has confined the relief to two cases, that of a broker and that of a commission agent, but there is no reason why it should not cover the whole of the series of cases which arise in transactions of this kind, with the exception of those which are of a collusive nature, and which he said he specially desired to get at, his object in bringing them within this Clause being to bring them within the purview of the Income Tax. We agreed to that, and we also understood that it would faithfully carry out the pledge to render the ordinary transaction by which anybody in this country sells an article from a Colony or any other country—it might be a bale of wool, a bunch of bananas, or whatever it might be—free from the purview of this Clause, and any liability to Income Tax. That was the wish of the Committee most clearly expressed by Member after Member. We all agreed that the agent's own commission should come in for Income Tax, but that there should not be in addition a tax on the proceeds of the sale. That was the clear and distinct agreement upon which the Committee passed that Clause. It will be in the recollection of the right hon. Gentleman and those present then that the suggestion was made, and the Chancellor of the Exchequer threw himself upon the Committee and asked them to treat the Clause kindly and not destroy it altogether, because he would undertake to make it entirely satisfactory to the Committee. I myself have put down an Amendment which, unfortunately, I could not get on the Paper, which was to effect the same purpose as the Amendment of the hon. Baronet. I think his Amendment would be simpler and clearer, and therefore I very strongly support it.
If hon. Members will throw their minds back to what took place in Committee on the Bill they will remember we were then discussing new taxation. The objections that were raised to the proposal which I put before the Committee then were all based upon arguments showing that the new taxation which we were imposing was partly unfair and partly would react injuriously upon our own trade. I was asked to make certain promises with regard to the operation of the new taxes, and I think I can show that I have carried them out. Several quotations from my speeches have been made, but there was one which was not quoted which I think is very relevant. I said in the course of the Debate which has been quoted by the hon. Baronet:—
"I listened to the whole of this Debate, and I think one of the difficulties under which we labour is that we are not all equally well acquainted with the existing Income Tax law."
In the quotation which the hon. Baronet made, from Section 1 of the Act of 1842, he stopped short just where the Section began to be relevant to the point under discussion. I make no complaint, because the hon. Baronet is not a lawyer, and he is not familiar with the law, and it is quite natural that he should stop at the relevant point.
I am aware of the last part of the Section, and in my opinion it is all governed by the first part. As the right hon. Gentleman has said, I am not a lawyer, but that part of the Section does not affect my argument.
The hon. Baronet is not a lawyer, and he does not appreciate the force of that Section. I went on to say:—
"Agents, in one sense of the word, are now liable to all the taxes which some hon. Members who spoke think so objectionable."
What we were discussing in Committee was a concession in the new law, and not upon the old law.
I am sorry to interrupt the right hon. Gentleman. He has told me that I do not read everything; but here is something which the right hon. Gentleman has not quoted:—
"Resident agents are already liable, in respect of profits of their non-resident principals, when the contract to sell the principal's goods is made in the United Kingdom."
The hon. Baronet has omitted "and under other conditions." That quotation is a good deal further on, but it is not relevant to the point I am making. What have I said here? The proposal I am now making is as follows:—
"(6) Nothing in Section forty-one of the Income Tax Act, 1842 (as amended by any subsequent enactment or by this Section), shall render a non-resident person chargeable in the name of a broker or general commission agent in respect of profits or gains arising from sales or transactions carried out through such a broker or general commission agent."
That is to say, so far as the new imposition of taxation under the proposal in Committee goes in this Amendment, I say that all that new proposal shall not apply. If my hon. Friend will give his mind to this, and assume for once that the Treasury might be right, he would be more to the point. We say, "Nothing in Section forty-one of the Income Tax Act of 1842 as amended shall render a non-resident person chargeable in the name of a broker or general commission agent" liable. We do not say that nothing shall render a broker or general commission agent liable, because he is already liable under the Act of 1842.
Goods made in the United Kingdom.
The hon. Baronet stopped short of the words "under other conditions," and he is asking that we shall amend the Act of 1842 and not our new Bill. I have cut out of the operative part of the new Bill all that was introduced which would have made a non-resident chargeable through a broker or general agent. But he has always been chargeable through an agent, and that has been the principle of the Income Tax law from the very first. I claim that I have carried out my pledge in the letter and the spirit, and nothing has been said to-night which leads me to any other conclusion. I am firmly of the opinion that the Income Tax law is not generally understood, and if the hon. Baronet really appreciated the Section of 1842 he would know that his present claim is devoid of all foundation.
I appreciate what the hon. Baronet is endeavouring to get at, and I also appreciate the answer of the Chancellor of the Exchequer. I do not, however, think that the purpose of the Chancellor of the Exchequer is quite happily carried out in the Clause on the Paper. It is quite clear, under Section 41 of the Income Tax Act that an agent is made liable in respect of contracts made over here, where they are made for a principal, and if profits or gains accrue to the principal, an agent has a corresponding right under Section 46 of the Income Tax Act, which enables him to stop out of the money he ought to remit to the principal the money he has had to pay to the Income Tax authorities. You cannot read Section 41 without its concomitant Section 44. While the Chancellor of the Exchequer twitted the hon. Baronet the Member for the City of London for not reading all he ought to have read of Section 41, I am asking the House to read Section 44, because you cannot possibly understand Section 41 without it. That is how the matter stands, and no doubt from the year 1842 onwards the agent has been liable for contracts made on behalf of a principal who has allowed the agent to have in his hands money from which he can reimburse himself for money he has had to pay to the Income Tax authorities. Now under this Bill, Section 41 is to carry the liability of the agent to cases which are dealt with, primâ facie, under the other Section.
In Committee it was pointed out by some hon. Members well versed in business that if you were to leave Section 41 without any Clause saving the rights of the agents, you would put a person in this position. A number of sales are effected in the exchanges and public rooms in the City where a great deal of business is done in respect of goods which are sent over here for sale, and it was pointed out that instead of those goods coming over here for sale to be sold, if you were to make the agent liable in respect of any profit made by the person who sent the goods over here, you put the agent in an impossible position. Say, for instance, cotton comes from America, hemp from India, and a number of other products come, and are consigned to an agent for sale, and the agents sells them at the auction sales which take place from time to time in the City of London. If you are going to make the agent responsible for the profits made by his principal you put the agent in an impossible position. How can he know what profit the principal is going to make in respect of sales which are carried out, and which are merely consigned over here for the purpose of sale? Therefore, we want some words to safeguard those transactions.
That is a broker.
I do not agree that a "broker" would be a happy expression. The Chancellor of the Exchequer, who is a lawyer and who thoroughly understands the Income Tax and all its intricacies, knows that a broker hat, no authority to receive payment. The right hon. Gentleman, who began his earlier career by studying common law, will agree with me on a point so elementary as that, but, whether he calls him a "broker" or an "agent," I am dealing with those cases which really arise from a business point of view. Has the Chancellor of the Exchequer met that case by the Clause which he put before us? I appreciate the reason for it, and I want to see whether he has done it. The point which the hon. Baronet (Sir F. Banbury) brings forward, and which is supported by the hon. Member below the Gangway (Mr. Molteno), is that you have confined the relief which is given within too narrow limits. Let me see what is the limit:—
"(6) Nothing in Section forty-one of the Income Tax Act, 1842 (as amended by any subsequent enactment or by this Section), shall render a non-resident person chargeable in the name of the broker or general commission agent in respect of profits or gains arising from sales or transactions carried out through such a broker or general commission agent."
Do those cases cover the business case which I have ventured to indicate to the House? I venture to say "No," and I think what is necessary is that you should leave out the words "general commission." You want to cut out words which might be used in a narrow sense in the Court. You want to take the simple case of an agent or a broker who is carrying out sales or transactions, and you want to prevent any liability in respect of those transactions so carried out by the broker or agent. If you put in the words "general commission agent," I think they become alternative words and do not fully meet the case. If you cut out the words "general commission," the Section would do, because then you would be dealing with certain profits and gains. What are those profits and gains? They are the profits and gains which arise through a person, as a broker or as an agent, being instructed by persons overseas to carry out particular sales, and in respect of those sales he is not be liable. If you take away the words "general commission" and read "every broker or agent," you still get your limitation as to profits or gains in the last two lines of the Clause. May I read the Clause as I venture to think it should read:—
"(6) Nothing in Section forty-one of the Income Tax Act, 1842 (as amended by any subsequent enactment or by this Section), shall render a non-resident person chargeable in the name of a broker or agent in respect of profits or gains arising from sales or transactions carried out through such a broker or general agent."
10.0 P.M.
Whether he is a general commission agent or not, if you have got the fact that this business is done and begins and ends by the sale which is carried out by an agent, you want to preserve that business to the City of London. If you put in the words "general commission agent," a controversy may arise as to whether the person who carries out the business is within this indemnity Clause or not. I do press the Chancellor of the Exchequer to ask those who advise him whether he would not be much wiser to leave the Clause as I have suggested and trust to the limitation or rather to the definition of sales and transactions which are hit at and which come within the last two lines. If he would do that the Clause might be accepted by the House, but, if not, then he has not given, as he intends to give, the full indemnity as is required—required not merely as a matter of drafting, but to safeguard very important interests in the large towns of this country. A great deal of business is sent over here on commission to consignees merely for sale, and, if those rights are not safeguarded, the only effect will be that the goods will not come over here to be sold, but will be sold direct.
They would be liable in that case.
What the agents and owners feel is this—
I cannot agree to that. I have a letter here from the owners themselves—from the General Produce Brokers' Association, of London.
I should be glad to hear what they say.
I did not read it, as I did not think it proper to do so in the first instance, but, as I am to be told what the general brokers think about it, I would like to read this letter. The General Produce Brokers' Association of London write to my private secretary to say:—
"Your favour, dated 3rd instant, enclosing amendment to Clause 29 of the Finance Bill, has been placed before my Committee this morning. In thanking yon for the same, I am directed to say that the amendment appears to meet the views of the members of this Association, and there is, consequently, no need to trouble you to receive the proposed deputation on the matter."
I understood the hon. and learned Gentleman to say what the brokers of London thought.
The right hon. Gentleman has misunderstood me. I do not venture to stand here on behalf of all the brokers in London. I have no authority to do that. I was speaking from a much broader point of view. I was speaking from the point of view of business men who have explained the matter to me. I have no authority to speak for the brokers of London, Liverpool, or Manchester, and I do not purpose to do so. I should be the last to claim any such authority. I quite understand the attitude of that body which I have known well. They give a reply which one would have expected, namely, that in all cases where a man is an authorised broker and is a member of the association he feels that he is covered. That is quite true, but there is a number of cases of persons acting as agents who cannot be brought within the true definition of "brokers," and that is the point which I am asking the Chancellor of the Exchequer to meet. Obviously, I have not made myself quite clear to the right hon. Gentleman. Every agent dealing with the business with which I am dealing is not necessarily or by trade or profession a general commission agent. I think that I shall have the assent of a number of business men on that point. He has dealt with brokers and general commission agents, but he has not dealt with cases of business where they are not properly described either as "brokers" or "general commission agents." "Merchants" is suggested by another business man who is well versed in a great many parts of the country—
A merchant is not liable.
The Chancellor of the Exchequer still has not quite appreciated the point. If a person is an agent and carries out a transaction of this nature, then he is liable under the other Clauses unless he can bring himself within the protection of this Clause. That is why we are opposing this Clause. What is the protection for which we ask? It is the protection which is offered to a broker and general commission agent. We ask ourselves: "Does that cover all cases of sales which are carried out by agents?" I do not pretend to be in the least an expert, but I do understand and appreciate when business men say, "No, there are other sales which are carried out by others than brokers and agents," and, if business men tell me that, I think that they have made a good point which ought to be considered. I have no doubt that the Chancellor of the Exchequer is anxious to give due protection in all these cases. I hope he will agree with me that by putting in words "general commission" you cut down the effect of the word "agent." Surely he does not want to do that, and if he will agree to leave out the words "general commission" I believe he will meet my view, and will at the same time conform to his early studies in the law.
May I put two questions to the hon. and learned Member? Does he agree with me that under the Act of 1842 the foreign resident is liable in respect of transactions carried on by his agent in this country, and does he further agree that if his Amendment were accepted that liability would be cut down? In my opinion the effect of the Amendment would be to cut down the existing liability of the foreign resident through his agent.
I agree with the first proposition of the right hon. Gentleman, but I disagree with the second, and that is where the whole difficulty arises.
As it was on my Amendment that this interesting discussion took place in Committee, I hope I may be allowed to say a word or two in answer to the question just put by the Chancellor of the Exchequer. I do not care whether under the Act of 1842 the agent is liable or not. I am not a lawyer. But I do know that in our business practice in this country at present he is not liable. Transactions are being carried on every day. That has been the case for years. It has been the case for seventy years since the Act of 1842 was passed, and to apply to an old Act like that a meaning which it does not carry in our ordinary business transactions is, I think, a very dangerous thing to do. That is my answer to the right hon. Gentleman to start with. But I do not want to carry on this Debate in an acrimonious spirit. I want, indeed, to thank the right hon. Gentleman for' going the long way he has gone to meet the objections urged in Committee.
The Clause was rather startling to many of us when it first appeared, but the Amendments of the right hon. Gentleman, and especially this last one, have gone a very long way to meet our objections. We have now almost come to an agreement, and in a moment or two I propose to quote certain words by the right hon. Gentleman which, I trust, will enable us to complete the agreement. A great deal of interest is taken in the City of London on this point. I was at a meeting of the chamber of commerce last week, where we discussed the amended Clause, and on that occasion a case was put before us which exactly illustrates the point put by the hon. Baronet the Member for the City of London. A gentleman who was present at that meeting said that he received 30,000 hides from the Argentine last year and sold them here. He was agent for his friend in the Argentine, and if that gentleman was to be made liable for his profit on those hides, then no more would be sent to this country. It was always a question whether they would come to this country or be sent to the United States, and the imposition of this liability would undoubtedly prevent them coming to England. That is a perfect example of what is running in the minds of hon. Members who are fighting this Clause. I do not think the right hon. Gentleman has sufficiently remembered all the promises that he made us. In the Debate on the 17th of November he said:—
"Where.… owing to the close connection between the resident and the non-resident person, and to the substantial control exercised by the non-resident over the resident, the course of business between those persons can be so arranged, and is so arranged, that the business done by the resident in pursuance of his connection with the non-resident produces to the resident either no profits or less than the ordinary profits which might be expected to arise from that business, the non-resident person shall be chargeable to Income Tax in the name of the resident person as if the resident person were an agent of the non-resident person."
That is the whole thing.
No, it is not the whole thing. I want to bring the right hon. Gentleman to his promise. I am sure he will fulfil it. Every Chancellor of the Exchequer does. He has introduced 106 Amendments to fulfil the promises he made in Committee, and surely he is not going to break down on this one. He is always willing to try and meet us; he makes a small concession, and when we press him he is willing to go a little further. This is what he said:—
"If wool—"
just mark the connection: I spoke of skins a moment ago, and he is speaking of wool; that shows how close the connection is—
"If wool is bona fide sold in this country to a manufacturer, merchant, or dealer there is an end of it, so far as this tax is concerned, because the profit of that transaction will be brought into account in this country."—[OFFICIAL REPORT, 17th November, 1915, col. 1894, Vol. LXXV.]
If the wool is sold bonâ fide that is an end of it. I would ask the right hon. Gentleman to fulfil the promise therein given. I believe it will be excellently carried out if he will leave out the words "general commission" so that the Clause may read "whether sold by a broker or agent." Under the circumstances I think the right hon. Gentleman ought to accept that Amendment. All I have to add is that I shall not move the Amendments I have put down to this Clause of the Chancellor of the Exchequer, and I would appeal to him now to cut short the Debate and give us these words.
There is clearly a misapprehension as to the law. I have done ray best again to inform my mind as to the state of the case, and I can assure the House that on such advice as I have had, and which I profoundly believe to be true advice, the speech of the right hon. Gentleman who has just sat down is a flat contradiction of itself He wants to retain paragraph 3 of this Clause. But that is the only Clause in question.
No.
The hon. Member (Mr. Molteno) is really not familiar with the law. He maintains a persistent chorus of "Noes," but I do not think he understands the law. The only paragraph of this Clause which operates as to an agent is Sub-section (3). We propose to make a person liable as an agent where the relation between him and the nonresident principal is of the kind described in Sub-section (3). When he is liable as an agent he will then become liable under Section 41 of the Act of 1842. If we accept the Amendment of the hon. and learned Member for Warwick (Mr. Pollock), the effect would be to destroy all liability, and more people who, by common admission, ought to be taxed, would escape. The case is simply this: Agents are now liable whose foreign residents are liable. A non-resident person is chargeable in respect of any profits or gains arising through an agent in this country.
That is not in force.
I can assure my right hon. Friend it is in force.
I never heard of it in connection with tea or sugar.
I have had forty years' experience, and the right hon. Gentleman (Mr. Lough) is right.
The Chancellor of the Exchequer is quite right.
Because one or another hon. Member has not heard of a thing it does not follow that it does not exist. I can assure them that if they will inquire at the Inland Revenue we shall be happy to inform them of the amount of revenue we collect in this way. It is a very substantial revenue. It is idle to tell us that a source of revenue, of which we know and which is very lucrative, does not exist.
It is very different from this case.
That is the present law. All I am asking for is that we should maintain that law. We find that that law is evaded by devices which we try to meet in Sub-section (3). The right hon. Gentleman says, "By all means secure the advantage of Sub-section (3), and prevent these evasions of the law." That is all we ask. In asking for that in Committee I went too far according to the opinion, as I read it, of the Committee, and I appeared to bring in other persons who were not liable—that is to say, brokers and commission agents, who were not liable under the existing law. I appeared to be making them liable or was making them liable for the first time. I have struck that out.
You are making other people liable.
I am not making other people liable; I am making agents liable, and even liable although technically they evade the law by some of the devices described in Sub-section (3). It is true that under Sub-section (2) an agent would not now be liable because he had used these devices, but we are treating these devices as frauds upon the revenue, and I am asking the House so to treat them and say that the law of 1842 ought not to be evaded by these devices. My right hon. Friend supports me. That is all I am asking for, and that is the whole effect of this Clause so far as it relates to agents. Really I would appeal to hon. Members, unless they are satisfied in their minds that they really understand Income Tax law and are thoroughly familiar with all its practice, to accept the views expressed with great fairness and reiteration by those who are both thoroughly versed in the law and thoroughly practised in the revenue. For these reasons I think we must adhere to the tax.
I rather agree with the right hon. Gentleman (Mr. Lough) that this Act of 1842 which has been made so much of, though it may apply in some particular industries, does not apply in the general business of the sale of imported goods or foreign account in this country. I speak with forty years' experience of Liverpool and London. I was president of the Brokers' Association, and I can assure the right hon. Gentleman that the Income Tax Commissioners, in this business of the sale of enormous amounts of produce from foreign countries, do not attempt to go into this Clause of the Act of 1842, and I am afraid this discussion will raise a new issue in the minds of all the collectors of Income Tax that they have been abrogating their duties. If they really take this matter up an enormous amount of business will be turned away from this country. It is not the desire of the Chancellor of the Exchequer to turn legitimate business away from Great Britain. It is his desire that men who have been, as he says, committing frauds on the revenue should be stopped. Surely we can come to a business arrange- ment in some way. We may be wrong—we are not lawyers, but we business men are afraid this Clause does not meet the position that we hold. Take the case of a man in Jamaica who sends cigars to a Liverpool man to sell for him. He sells and receives the money. He charges in his account 2½ per cent. commission for collecting the money and making the sale. He is not an ordinary broker, and he is not by business a commission agent. He is a man of business doing affairs in exporting and different things, but you could not call him strictly a commission agent, and therefore the Commissioners of Inland Revenue might come down on him and say the manufacturer of these cigars in Jamaica ought to pay Income Tax in England.
Is that under the existing law or under this Clause?
Under the existing law first of all.
If he is liable at all he is liable under the existing law.
Then we must alter the existing law. We are here to make laws for the business community, and if this old law that has been dug out is not in consonance with modern business let us change it. The right hon. Gentleman in his Finance Bill surely is able to do it, and if we have been trading for years under a misapprehension of what the law is, because that seems to me what it is, we do not want our Civil servants to be acting in such a way as will make business, so difficult and so onerous that men would refuse to accept the responsibility and turn business aside which other countries are only too eager to get. That is the whole gist of what we are asking for, and I am certain the right hon. Gentleman does not want to turn business away. If the Amendment of the hon. Member for Warwick will meet the case, I should be very pleased to support him. At the moment I admit that I find a difficulty in putting the words so that it shall be clear to all the parties concerned, more particularly to the authorities who will have the right to collect this Income Tax in future. We want to give them directions as to how they should act and what they should claim. If we do that the object of all parties will be met.
I think the hon. Member who has just sat down has gone to the heart of this matter. It is very clear from the Statute of 1842, which I have been engaged in studying, that we are moving round in a circle. First we find, as the Chancellor of the Exchequer very properly said, that under the existing law undoubtedly these non-residents were liable to be charged through their agents. The particular Section (41) of the Statute of 1842 says,
"and any person not resident in Great Britain, whether a subject of Her Majesty or not, shall be chargeable in the name of such trustee, guardian, tutor, curator, or committee, or of any factor, agent or receiver, having the receipt of any profit or gains accruing as herein mentioned, and belonging to such persons, in the like manner and to the like amount as would be charged if such person were resident in Great Britain, and in actual receipt thereof; and every such trustee, guardian, tutor, curator, committee, agent, or receiver shall be answerable for the doing of all such acts, matters, and things as shall be required to be done by virtue of this Act in order to the assessing of any such person and things as shall be required to be done by virtue of this Act, and praying the same."
It is perfectly clear that that is the law, and I note that the right hon. Gentleman the Member for Islington (Mr. Lough) says that the law has not been carried out during these fifty or seventy years. I agree with the Chancellor of the Exchequer that there has been very probably very considerable revenue derived from the partial carrying out of this law, but as the hon. Gentleman (Mr. Bigland) has well said, if this ancient Statute is found not to be in accordance with our existing business relations, then we are here for the purpose of getting rid of it and repealing it. Large businesses have been built up in the City of London and in this country, and if you put in force this particular Statute now the result would be to undermine the fabric of great businesses, and probably, in our anxiety to get some revenue from this source, to cut off a much larger revenue derived from Income Tax on the large businesses carried on in this country. There is a great deal of confusion. First we have this existing Statute of 1842, from which it is very clear that these non-residents ought to have been traced through their agents. This has not been carried out. This particular Clause which we are now discussing, Clause 29, says:—
"Section forty-one of the Income Tax Act, 1842 (which relates to the charge of Income Tax in special cases), shall, etc."
That is rather misleading, because the Section that I have read covers the very matter which we are now discussing. It rather misleads one in saying that it only relates to special cases. Special cases are first mentioned in Section 41, which refers to lunatics, insane persons, etc., and agents representing them. That particular Section does not lead one to suppose that it covered this particular matter which is now under discussion, because the Clause in the present Finance Bill goes on to say,
"shall, so far as it relates to the taxation of non-residents be extended—
( a ) so as to make non-resident persons chargeable to Income Tax in the name of any branch or manager."
Why we should amend this Act to do what the law already provides for, this seems to me to make legislation a burlesque. The Chancellor of the Exchequer proposes his Amendment because we were told in speeches on the Committee stage that if we are to carry out this Statute of 1842, we would undoubtedly injure the great trade of the City of London, and of this country. Then he comes forward very properly in response to the wishes of Members of this House with an Amendment to cancel that particular statement. Surely it would have been much better instead of all this confusion to have repealed this particular Section. As we have not done that, and, as the hon. and learned Member for Leamington in his very able speech pointed out, the case can be met by passing this Amendment which will really repeal the original Section. I do not see why that should prevent the right hon. Gentleman from carrying out Section 3. I admit that once we pursue the downward path, "facilis descensus Averni," confusion becomes worse confounded. Therefore I would suggest that some proposal should be made for the purpose of repealing the original Section of the Act of 1842. If the right hon. Gentleman is correct, if we cannot get what everyone wishes, we should then face the situation and if a bad law is on the Statute book, repeal it. The Chancellor of the Exchequer is in possession of the sense of the House, and the desire of the House that we should not do anything to undermine the agency business of the City of London, and if he cannot accept the Amendment of the hon. and learned Member for Leamington then I submit that we should propose the repeal of the original provision. I ask again, is there no way whereby we can provide for the case of evasion or fraud, and yet get rid of this most unwise provision which will hurt the trade of the country?
I am afraid that the Government do not understand the very grave question which is raised by this Clause. The Chancellor of the Exchequer read a letter from the Produce Brokers' Association. I have been approached by a great many members of that association. They gave me this morning a petition against that Clause to present to this House. That petition, signed by some 200 leading merchants, bankers, and produce brokers, is now in the bag behind Mr. Speaker's chair. I was not able to present that petition sooner, because it was not ready. They considered at their last meeting that the Amendment to the Clause did not cover all the points. Another reason is this: The Treasury do not understand that the brokers of the City of London, Liverpool, and other places, do not trade direct with foreign countries. The broker sells for the merchant in this country, and it is considered a breach of etiquette among brokers to deal with people abroad instead of through the merchant classes. The great danger of this Clause is that for generations we have been receiving in this country the produce of the world. It has been the work of hundreds of years to induce merchants in different parts of the world to send their produce here for sale.
When we were in Committee I asked the Chancellor of the Exchequer if it was his intention to tax the merchants who consigned various produce here and to make their agents here liable to pay Income Tax on supposed profits derived from that sale. I pointed out to him that we have here in this country, especially in London, monthly wool sales. We have consignments of wool, and buyers come from all parts of the world to London and attend these sales, and they take notes of the whole of the merchandise, and either buy at the sales or send their orders afterwards. I mentioned these matters to the Chancellor of the Exchequer, and when he did not answer my remarks I repeated to him afterwards the points I especially desired to bring to his notice. I said:— it would be impossible to defeat it, but the consequence of this Clause if persisted in will be the absolute ruin of the commercial power of the country to deal in the produce of the world.
I would like to support what has been said by the hon. Member for Warwick and Leamington (Mr. Pollock) about agencies and from my commercial experience I can confirm as absolutely correct what he has said, and also what has been expressed by the other hon. Member. The Chancellor of the Exchequer on 17th November used these words:—
"A great deal of confusion arises from the fact that the word 'agent' is used in two different senses. Some hon. Members understand it as the ordinary business relation, but the word has another and technical tax meaning."—[OFFICIAL REPORT, 17th November, 1915, col. 1887, Vol. LXXV.]
There, I believe, is the cause of the whole confusion that there are really two kinds of agents, and that the Chancellor of the Exchequer, in framing his Clause, had in mind one kind of agent, and hon. Members of this House who are connected with business had in mind another kind of agent. There are some agents who are what the Chancellor of the Exchequer would call, strictly speaking, resident agents who, I perfectly agree, do come under the operation of the Income Tax Acts. There are others in a sense resident, but they are not resident in the sense in which "resident agent" is generally used. The agents I refer to are men who sell on commission; not necessarily brokers, but under a limited agency sell perhaps for two or three different firms in a perfectly straightforward way. The Chancellor of the Exchequer defined on 17th November what were the conditions which rendered such an agent as he was thinking of liable to Income Tax under the Clause. He said:—
"The first condition is trading within this country."
It is a very debatable point whether some of the agents I am referring to are really trading "within this country." In many cases they are collecting orders in this country and are cabling those orders to America and other places, and the reply comes back, perhaps, "Offer is accepted." It is a very delicate point as to whether the trading really took place in this country or America. The Chancellor then said:—
"The second condition is that the profits pass through the hands of the agent"
In many cases the ordinary commercial agent has no profits whatever passing through his hands. I imagine it may come as a surprise to some Members, although not to many others, to know that in many cases all the agent does is simply to put before the general commission merchant a. cable saying, "You may sell such-and-such a quantity of goods on such-and-such conditions." When the merchant or broker accepts that offer a cable goes out abroad, and the non-resident principal draws a draft at sixty days for the invoice value of the goods, not upon the agent, but upon the merchant or broker. The result is that no profits whatever are in the hands of the agent. All the money the agent handles is that which he collects from his foreign principal by sending out a debit note at the end of the quarter or year, saying, "You owe me so much for commission on the sale and for cable expenses." Very often the non-resident merchant abroad has five or six, or it may be twenty, customers in this country who are in the habit of dealing with him fairly regularly. It would be an expensive matter for that non-resident merchant to send twenty different cables to these people with his quotations. Consequently he appoints what we call an agent—that is, simply a person who transmits or shows his cable messages to the clientele in this country, collects the orders and sends them out. That is a very different kind of agent from the agent in the mind of the right hon. Gentleman. There is another class of agent with which I am familiar—a person who is not necessarily a broker or general commission agent; probably he deals in only one kind of merchandise, and does not as a rule accept consignments. But he has connections who occasionally make him consignments, and for these selected people he does act as agent. These people consign to him raw materials which we require for our industries and build up our export trade. If they were to be told that because that man did not happen to come under the legal definition of a broker or general commission merchant they would have to pay Income Tax on their profits, it would kill that consignment business to this country. Moreover, it is impossible to estimate the profits of such a class of business. It is quite possible that a nonresident may ship goods to this country, that the market may rise, and that the goods may show in the books of the agent in this country a considerable profit; yet the engagements which that non-resident merchant has in other parts of the world may nullify that profit, so that on the whole transaction there is a loss. That is why it will be a very dangerous thing for this country if the right hon. Gentleman does not take steps to make it perfectly clear what kind of agent is going to come under the operation of this Clause and what sort of agent will be exempted.
There will be consternation in the City of London tomorrow if they are told that this proposal will include merchants who sell hides for people in South America, when all that they do is to transmit a cheque for the price they receive after deducting their 2½ per cent. commission. There will also be great surprise that since 1842, when the enactment was passed, it has never been enforced in these cases by the Commissioners of Inland Revenue. There must be something wrong about the Chancellor of the Exchequer's argument. I think I can divine what it is. An agent in the Act of 1842 is a factor, an agent, or receiver of a non-resident, and this factor, etc., is a person in the same sort of position as the agent or trustee of a married woman, or the control of a lunatic—that is the person who actually receives money that is income, profit, or gain. That agent, under the Act of 1842, is liable to Income Tax. But the commission agent or merchant whom the Chancellor of the Exchequer wants to make liable if he receives the money, is only a conduit pipe; he is not liable to pay Income Tax. Why I Because the words of the Act of 1842 say, "A person who receives profits or gains." The merchant in the City of London who sells the hides between South America and someone in or out of the country never receives any profits or gains. When a merchant sells at the price at which he is told to sell, or at the price in the case I have described, how does he know whether there is profit on the transaction? We are told by the Tariff Reformers, for instance, that the Germans dumped their goods here under cost price and made a loss because they sold at a higher price in their own country. It, seems to me, therefore, that the Amendment of the hon. Baronet the Member for the City of London will not quite meet the case. The hon. Member for Warwickshire suggested another way out of the difficulty. May I suggest to the Chancellor of the Exchequer certain words:
"Nothing in Section 91 of the Income Tax Act, 1842—as amended—shall render a non-resident person chargeable in the name of a broker or general commission agent, or a merchant or other person carrying out sales or transactions usually carried out by brokers or general commission agents. …"
I have other words which I think will satisfy the hon. Member.
Then I retire in favour of the right hon. Gentleman.
I beg to move, "That the Debate be now adjourned."
We have had a most interesting Debate on the particular Amendment now before the House. It is, I think, obvious that the Debate has not followed lines of obstruction in any way. It is, however, a remarkable fact that almost every Member who has spoken has differed from the Chancellor of the Exchequer as to the purpose of the Amendment. The Government have been very successful to-night. They have got through a large number of Clauses. It is obvious now that they will get through with comparative ease at to-morrow's sitting. I would suggest, in view of the difficulties which have arisen, that the Government might consider this a convenient time to adjourn in order that the right hon. Gentleman might have full opportunity to confer with his advisers on the point, and that hon. Gentlemen, on both sides, may be able to review, in calmness and with full deliberation, this very important point. The right hon. Gentleman has said he has got words which he thinks will satisfy the House. I am glad to hear it, because it is obvious that he does not wish to drive the House in an important matter of this kind. It has been very pleasant up to the present, and I hope it will remain so. I trust the right hon. Gentleman will give the House an opportunity of seeing the words he suggests in print to-morrow morning, and so probably facilitate the Debate to-morrow afternoon. Of course, the right hon. Gentleman has no intention of the House sitting beyond the ordinary time, because the Prime Minister the other day pledged himself to me—at any rate, he expressed his intention that no late sittings would be asked for at all, and there is no reason, I am sure, to work the House unnecessarily at this stage. I therefore appeal to the reasonableness of the right hon. Gentleman whether this is not a convenient stage for the Adjournment of the Debate. If you, Mr. Speaker, will accept it, I would like to move that the Debate be now adjourned.
Might we have the words?
We can have them on the Adjournment.
Question proposed, "That the Debate be now adjourned."
I think my right hon. Friend, if he has followed our Debates throughout this Bill, will agree that while there has been no undue pressure on the side of the Government, on the other hand there has been no unwillingness on the part of the House to discuss the matters and to take the Bill in reasonable stages. I hope, therefore, the right hon. Gentleman will allow me to-night to go down to the Part dealing with Excess Profits, but not to enter upon that. [HON. MEMBERS: "No!"] I think it is far better we should finish this part of the Bill tonight, and we could finish it very shortly. If we do not start to-morrow with the Excess Profits Duty we shall get delayed, and the Excess Profits and Schedules will take a very full day. I hope, therefore, my right hon. Friend will withdraw his Motion so that I may state the words.
State them now.
I would rather my right hon. Friend withdrew his Motion I should have to explain the words, and I could not do so on the Motion.
Would there be any means of going on with the rest of this Bill up to the Excess Profits Duty, and still leave this particular point open? I am afraid there would not be, and, if not, I venture to add a few words to what has been said by representatives of commercial interests.
The hon. Member cannot do that on this Motion.
Then may I simply urge the Government that, if it is not possible to get back to this, it is too important a matter to decide right off, and it is quite clear that, although the Chancellor of the Exchequer may have some words now, he had not got them an hour ago, and therefore they must be somewhat hurried. This is so important to the interests of the whole trade of the community that I do urge it is not a subject to be disposed of in a way which cannot be got back to, in this hurried manner. Really I think, after the very pleasant manner in which it has been discussed, and the determined effort made on all sides, after accepting matters of principle, to try and debate all the different details, giving every credit to the Government to meet all our views in the way they have done, I do think, now that we have come to this extremely important point, which affects the whole produce of the world coming to this country, we should not hurry through with it to-night. We have heard to-night statements made by commercial men—
The hon. Member is not keeping to the Question before the House.
I am bound to say that I think the right hon. Gentleman's statement of the law was wrong.
The hon. Member is not speaking to the Motion before the House, which is the Adjournment of the Debate.
It was because I thought the right hon. Gentleman's statement of law was not right that I wanted the Attorney-General or some other Law Officer of the Crown to be here. If the Debate goes on I will explain why it was wrong. On this important point I think we should have a Law Officer present to tell us what the law is. The Chancellor of the Exchequer said one thing, and we have had different views expressed as regards the question of the Income Tax on commissions. I think we ought to adjourn that point in order that we may have the benefit of one of the Law Officers of the Crown.
I wish my hon. Friend could see his way to accept the Motion for the Adjournment of the Debate. If he does accept it I am sure that he will be meeting the wishes of the whole House. There is another reason which makes it very desirable that this Debate should be adjourned. To-day very serious allegations were made against some hon. Members of this House which they are very anxious to have an opportunity of dealing with, and unless the Debate is adjourned they will not have that opportunity. I feel sure that my right hon. Friend would be meeting the general wishes of the House by accepting this Motion.
Of course, if my hon. Friend is correct that it is the general wish of the House to adjourn the Debate I will not stand in the way of hon. Members.
Question, "That the Debate be now adjourned," put, and agreed to.
Debate to be resumed to-morrow (Tuesday).
Education (Small Population Grants)
Resolution reported,
"That it is expedient to authorise the suspension in connection with the present War of the Grants payable under paragraph (2), of Section nineteen of the Elementary Education Act, 1876, and the Education Code (1890) Act, 1890, and the provision out of moneys provided by Parliament of other Grants in lieu thereof."
May we have this Resolution explained?
It was very fully explained on the Committee stage by my right hon. Friend.
Resolution agreed to.
Bill ordered to be brought in upon the said Resolution by Mr. Arthur Henderson, Mr. Herbert Lewis, and Mr. Gulland.
Education (Small Population Grants) Bill—"to suspend in connection with the present War the Grants payable under paragraph (2) of Section nineteen of the Elementary Education Act, 1876, and the Education Code (1890) Act, 1890, and to provide for the payment of other Grants in lieu thereof." Presented accordingly, and read the first time; to be read a second time To-morrow, and to be printed. [Bill 166.]
The remaining Orders were read and postponed.
Union of Democratic Control
Memorial Hall Meeting
Whereupon Mr. SPEAKER, pursuant to the Order of the House of the 3rd February, proposed the Question, "That this House do now adjourn."
I want to draw attention to a reply that was given to a question which I addressed to-day to the Undersecretary of State for War. His reply was of a nature that prevented my being able to put any supplementary questions, because it was filled with a series of state- ments which challenged correction, and it was impossible at Question Time to do that effectively. I asked the Under-Secretary a question with regard to the participation of soldiers wearing His Majesty's uniform in the break-up of a meeting organised by the Union of Democratic Control in the Memorial Hall on 29th November. I think, as I was one of the organisers of the meeting, as I was present at the meeting, and as I was on the platform during the proceedings, that I may give very briefly an account of the meeting. The meeting had been organised for some weeks, and the opposition was first of all brought together by Mr. Blumenfeldt, of the "Daily Express," in a series of articles against the Union of Democratic Control, containing a number of false allegations and personal attacks upon the members, and always calling attention to the particular date of the meeting and asking readers to note the date. This series of articles culminated in a special article by a man called Glover, who went out of his way to attack members of the Union and make a very scandalous statement about them, putting into their mouths words which they had never used. This series of articles was obviously written with a view of getting people to go to the meeting for the specific purpose of breaking it up. That in itself would be, I quite agree, insufficient proof, because these articles, as the Home Secretary pointed out in reply to a question I asked some few days ago, all of them very skilfully avoided actually inciting to violence; but there are other proofs of organised opposition. The chief of these is the issue of forged tickets. Forged tickets were issued in great quantities. If the right hon. Gentleman desires to see specimens of them, I have some of them with me. Although they are very skilfully forged, and certainly could not be detected in the rush at the door, it does not require a detective to see that they are actually imitation tickets. With these imitation tickets, which were issued in great quantities, some outside the hall and some previous to the meeting, a large number of people entered the hall with the express purpose of breaking up the meeting. The soldiers were banded together by the organisers with a view to disturbance. Another proof of the organised opposition is the fact that the soldiers after they had taken possession of the platform drew from under their coats posters bearing various mottoes printed in large scarlet letters. These posters and the tickets—neither of which could have generated spontaneously—are very clear proof of a distinct organised opposition. Three gentlemen seem to have had chiefly the organisation of the opposition. They were the editor of the "Daily Express," Mr. Glover, who I am told is an official of the Anti-German Union and who wrote one of the articles in the "Daily Express" and took the chair at the meeting, and Captain Parsons, whose name appears in many of the accounts, who is well known as a Trafalgar Square recruiting speaker, and therefore is presumably in the pay of the Parliamentary Recruiting Committee.
No.
I accept that correction from my hon. Friend. As he is a prominent recruiting speaker, I thought he might be employed by them. He is called Captain Parsons in the accounts, and I know nothing more of him. But all this shows that the opposition was organised, and that is my first point. The next point is were the soldiers used by the organisers? That is also perfectly clear. The tone of my right hon. Friend's reply showed that he resented any attack on the soldiers. I made no attack, and if he had read my question carefully he would have seen that. The soldiers who were at the meeting took the whole matter perfectly good-humouredly. They were young fellows out for a lark, and nothing more. What I objected to, and the point which the right hon. Gentleman should have met more seriously, was the fact that there are people who are utilising His Majesty's soldiers for the purposes of disturbance. That, I think, is very hard on the soldiers. I am sorry they have not a better champion at the War Office than the right hon. Gentleman.
I will now come to the right hon. Gentleman's reply, which many hon. Friends of mine who are not in sympathy with my view or action have characterised to me as deplorable, both in tone and in its contents. I have seldom seen in so short a compass so many misstatements made. I do not suppose for a moment that the right hon. Gentleman was conscious that he was being made the channel for a seires of misstatements. I must tell him, as one present at the meeting on the platform, that practically every sentence of his reply is untrue. His official, the Assistant Provost-Marshall of the London District, has made careful inquiries. There was one source at which he might have inquired in reference to it, and that was the organisers of the meeting, but, apparently, he made no inquiries of them. He says he fails to find that there was any organised opposition by means of forged tickets. I have disposed of that already. I am willing to show the right hon. Gentleman the forged tickets. He, apparently, was in the hall. He says that the doors were completely closed, so that it was a question whether soldiers or other persons could enter without tickets. I think that is quite possible. He says he fails to find any evidence of any organised steps having been taken. Evidently he has not made inquiries in the proper quarter. Then he expresses indignation against the attack made on the Army, and he says:—
Was anybody from the War Office there?
I think the right hon. Gentleman ought to have had the good taste and, if I may say so at the same time, the tact to have omitted that part of the reply that was supplied to him. It is rather a cheap sneer and an official repetition of a very scandalous allegation that has been made against me and some of my colleagues with regard to being associated with Germans and receiving German money. There is no German member of the Union of Democratic Control, there was no German present there that night, there was no Teutonic accent to be heard. This particular allegation, if I may say so, gives the whole of the right hon. Gentleman's answer away, and makes it the worthless document it is. I want to allow the right hon. Gentleman time to make, perhaps, some further explanation.
When a body of citizens of this country, in a time of great national stress, are endeavouring to the utmost of their ability to try to keep a sane opinion, trying to promote sane views, and to the utmost of their ability are serving their country in what they deem to be a patriotic manner, it no doubt may arouse the opposition of those who prefer more ostentations forms of patriotism. But we are accused of being pro-Germans. There are only two forms of pro-Germans—those who desire the Germans to win this War, and I do not believe there is a soul in the length and breadth of the land who desires that, and the other pro-German is a man who desires to see saddled upon this country German methods, German militarism, German suppression of free speech, and what I may characterise as German Zabernism. I am surprised that the right hon. Gentleman should have taken the opportunity to attack us in this manner by an answer the accuracy of which he had only one official to guarantee, and which, I think, I have successfully shown is entirely inaccurate from beginning to end.
I should like to say quite definitely and without any reserve to the House, with reference to the statement which was made in that answer about myself, it filled me with amazement when I heard my name mentioned. The right hon. Gentleman never communicated with me. He knows I am on the telephone and, as a matter of fact, I was here a considerable time before the House sat. I do not want to take up time, but I want to state the matter definitely. He stated that I gave instructions to a steward. I beg the House to believe me that I never spoke to a steward. But that may pass as a technicality. I make this further statement, that I never in the course of the conversation which I had on the platform used such an expression as was attributed to me. I was speaking privately and in a conversational tone with two hon. Members of this House, and with whom I was in conversation during the whole time. Not only did anything I said not provoke the trouble, but, as a matter of fact, before I got upon the platform the beginnings of the row had already commenced. These things were not in my mind. The only conversation I had with anybody about anyone concerned in the trouble was with two soldiers, and it was a most friendly and quiet conversation carried on in such a way that no one sitting next to us could have heard it at all. I wish to associate myself with my hon. Friend that the talk of the soldiers was not what we complained of. It was the people who took hold of the soldiers and used them for their base purposes. I regret that I cannot make my statement lengthier or I would have dealt with certain other points, but on this personal point I wished to make the statement I have made without reserve, without equivocation, and without anything except the desire to tell precisely the truth to hon. Members of this House.
May I say as quickly as I can that I frankly regret that I did not communicate with the hon. Member (Mr. Ramsay Macdonald), but I hope the House will believe me that I had very little time between the arrangement of the question and the answer and the meeting of this House, and I completely forgot and I offer him my apologies. I would say in answer to my hon. Friend (Mr. Ponsonby) that I know nothing at all about the organisation of the "Daily Express." I think my hon. Friend is acting, and has acted throughout this campaign, in a manner which seems to him to be a proper and a patriotic manner, although it is not a manner which recommends itself to most people in this House and outside. I think there is great reason for safeguarding the interests of free speech, and I hope I should be the last person in this House to say anything which would encourage any movement among hooligans or worse people for the suppression of public meetings and free speech. But I want to read the information which I was able to get in the time at my disposal, namely, the report of the officer, the Assistant Provost-Marshal, who furnished the report to us. He was sent there to see what was going on. This is the report:—
"Pursuant to instructions received from General Staff, London District, I proceeded to the Memorial Hall, Farringdon Road, on the 29th ult., for the purpose of attending the meeting of the 'Union of Democratic Control,' as advertised.
I was in plain clothes, and reached the hall about 6.30 p.m., an hour before the meeting was to commence. Attracted by the large number of military around the hall waiting for admission, I visited each of the entrances in turn to ascertain what special arrangements had been made for the accommodation of soldiers. I was informed by the stewards of the meeting that they would be admitted by ticket in the same way as the general public. I visited the hall also, and ascertained that the military would be at liberty to sit anywhere, no special places being reserved for them and it was quite clear, from what the stewards told me, that they expected a considerable number of soldiers to be present.
At about 7.20 p.m. the speakers proceeded to take their places on the platform, and, by degrees, the public and soldiers were admitted to the hall. I again visited the various entrances to ascertain whether the checking of tickets by the stewards was being strictly carried out, as I had heard that a good many of the military might try and get in without them. It was obvious that many soldiers were never even asked for tickets, and if they were forged as stated the rapidity with which they were handed in and collected rendered any examination thereof impossible.
At about 7.30 p.m. the hall was quite full; the meeting appeared to be about to commence. There were no signs of disturbance or noise among the soldiers then seated in the hall, and it was not until one of the stewards who, as a result of a whispered message from the platform by Mr. Ramsay Macdonald. proceeded to the fifth row of seats in the body of the hall and there attempted to remove four or five Colonial soldiers who appeared to be friends of a civilian who was seated among them. At the same time an individual on the platform, whose name I could not ascertain, but whom I could easily identify, said in a lord voice, sufficient to be heard by the military, 'Let that accursed military element be got rid of before we start,' or words to that effect, and almost in the same breath three or four stewardesses, with collection boxes, who not only appeared to be Teutonic, but could be classified as such from their accent, passed similar remarks quite audibly.
The soldiers whom the stewards tried to eject quite quietly argued that there was no reason for such action, and they resented the manner in which they had been singled out for removal, as they were perfectly quiet and orderly. As this argument became heated there was a good deal of resentment shown on the part of some of the military in other parts of the hall; instead, however, of withdrawing tactfully and leaving the soldiers alone, as advised by one or two civilians in the hall, the stewards, reinforced by others, and assisted by stewardesses, increased their efforts to try and remove the soldiers referred to, as well as others; and in the end, by their foolish and indiscreet action, gave rise to the disorder which eventually led to the platform being cleared by the military and civilians en masse, and finally taking possession of the hall and removing the organisers of the meeting wherever they could be found.
In each case the utmost consideration was shown for those ejected, and it was clearly pointed out to them by the military concerned that they had brought such treatment on themselves solely by their own folly in trying to disparage the military who, in common with others, had come to hear what was said and certainly showed no intention of creating disorder had they not been insulted, as stated, and left alone by the organisers of the meeting.
It is true that the disorder increased considerably, and but for the extraordinary tact displayed by the inspectors of the City Police on duty, as well as the constables under their command, there might have been considerable damage done both to person and property. The organisers of the meeting were eventually advised to leave the hall to enable the police to prevail upon the military to retire quietly and allow it to be closed. As the hall was being cleared by the police I spoke to several prominent civilians (who made it quite clear that they were strong trade unionists themselves) who had already addressed the soldiers, and they all agreed with me that the behaviour of the military, in spite of the extreme provocation they had received at the hands of the stewards and stewardesses, was, under the circumstances, worthy of all praise.
I examined the tickets held by one or two of the stewards, which had been collected by them at the doors, and could see no signs of forgery in their preparation as stated, and it appeared to me to be an easy thing for anybody without a ticket to enter the hall, for there must have been passing into each door scores of persons whom the stewards could not see, and certainly could not approach to ask for their tickets, and, in many cases where this appeared, quite possible, the stewards were quite indifferent about the matter; I myself entered and wandered all over the building, and passed at least a dozen stewards at the various entrances of the hall and building, and was never even questioned as to my motives, and it was impossible for anyone to have known that I was on plain-clothes duty for the occasion.
It is my sincere opinion that had the military not been provoked by the stewards, and had the proposed speakers on the platform confined themselves to non seditious talk, the meeting could have been held as intended, and even then I feel sure the civil police on duty would have dealt with any cases of inflammatory language without the necessity of interference by the military."
I am sorry I cannot read the rest of the report. In the light of that report, how could I give any other answer than that I gave? I much regret that I have injured my hon. Friend's feelings. I had no intention of doing anything of the kind. I had to back up my military, whom I hope I shall never desert in any matter of this kind when any allegation is made against them.
It being Half-past Eleven of the clock, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at Half after Eleven o'clock.