House of Commons
Monday, July 26, 1920
Private Business
Blackpool Improvement Bill,
Hastings Tramways Bill,
Lords Amendments considered, and agreed to.
Dover Harbour Bill [ Lords ] (King's Consent signified),
Bill read the Third time, and passed, with Amendments.
Durham County Water Board Bill [ Lords ],
As amended, considered; to be read the Third time.
Edinburgh Boundaries Extension and Tramways (re-committed) Bill [ Lords ],
As amended, to be considered upon Wednesday, at a quarter-past Eight of the clock.
Manchester Corporation Bill [ Lords ],
As amended, considered; Amendments made; Bill to be read the Third time.
Llanelly Corporation Water Bill [ Lords ],
Royal Bank of Scotland Bill [ Lords ],
Shekleton's Divorce Bill [ Lords ],
Uxbridge and Wycombe District Gas Bill [ Lords ],
Read a Second time, and committed.
Londonderry Corporation Bill,
Ordered, That Standing Orders 84, 214, 215, and 239 be suspended, and that the Bill be now taken into consideration provided amended prints shall have been previously deposited.—[ The Chairman of Ways and Means. ]
Bill, as amended, considered accordingly.
Ordered, That Standing Orders 223 and 243 be suspended, and that the Bill be now read the third time.—[ The Chairman of Ways and Means. ]
Bill accordingly read the Third time, and passed.
Oral Answers to Questions
Food Supplies
De-Control
asked the President of the Board of Trade if, in view of the fall in the values of practically all commodities since Government decontrol and of the prices ruling in this country for wool, sugar, and wheat, he will arrange for de-controlling these prime factors in the cost of living not later than 1st October of this year?
I have been asked to reply to this question. The hon. and gallant Member is incorrect in assuming that the removal of control, wherever attempted, has resulted in an immediate fall in prices. As regards the first commodity mentioned in the question, the immediate effect of the de-control of wool in the early part of last year was a rapid and substantial rise in prices, which did not commence to decline until April, 1920. Prices are still considerably above the last controlled prices. As regards the next commodity, sugar, there is still a world shortage of supplies of 3½ million tons, compared with pre-war production, and I am satisfied that the immediate removal of the present system of control, which economises consumption and restricts competition among purchasers, would not be to the interest of the British consumer. As regards wheat, as far as the British farmer is concerned he will obtain a free market for next year's harvest, but the complete de-control of wheat is not practicable so long as the bread subsidy is continued. The merits or demerits of de-control as regards any commodity depend essentially upon the question of supplies. The policy of the Ministry of Food is to de-control as soon as we are satisfied that supplies at reasonable prices are assured for our own people. Where these conditions are realised absence of control and freedom of competition tends to lower prices. Where there is a shortage of supplies, increased freedom of competition among purchasers has the opposite effect. In some cases the fall in price anticipated at the time of de-control has been realised as the result of better supplies. In other cases prices have risen. As regards home products the necessity of encouraging home production is a factor which receives the fullest consideration at our hands.
Profiteering Act
Soap
asked the President of the Board of Trade when he will publish the findings of the Profiteering Committee appointed to inquire into the price of soap?
The Sub-Committee appointed by the Central Committee under the Profiteering Acts to ascertain whether any combine exists in the soap industry is still taking evidence, and I am at present unable to say when the Committee will be in a position to make its Report.
Sewing Cotton
asked the President of the Board of Trade whether he is now in a position to publish the Report of the Central Profiteering Committee on sewing cotton; if not, whether it will be issued before the Recess; and whether it will be issued in its original form or as modified in consequence of the representations made by Messrs. J. and P. Coats?
I would refer the hon. and gallant Member to the answer which I gave to the hon. Members for West Leyton, Whitechapel, and Consett on the 19th July.
Building Materials
asked the President of the Board of Trade whether he is now in a position to publish the Report of the Central Profiteering Committee on building materials; and, if not, whether it will be issued before the Recess?
asked the President of the Board of Trade whether he can say whether the results of the inquiry into the profiteering in building materials will be published before the Adjournment?
As I informed the hon. Member for East Edinburgh on 19th July, the Sectional Committees investigating building materials have found it impossible to complete their Reports until more detailed statements of costings have been received from the accountants, and while everything possible is being done to expedite the issue of the reports, I am unable to make any definite statement as to the date of their publication.
Can the hon. Gentleman say definitely will it be issued before the Recess?
No, Sir, I cannot.
Central Profiteering Committee (Reports)
asked the President of the Board of Trade why the Report of the Sub-committee of the Central Profiteering Committee was published in a form other than that in which it emerged from the Sub-committee in question?
If the hon. Member will supply me with particulars of the Sub-committee and Report to which his question relates I will cause inquiries to be made, and will communicate the result of the inquiries to him.
asked what precedent exists for the publication of a Report in a form other than that in which it finally left the hands of the body which drew it up?
If the hon. Member refers to Reports issued by the various Sub-committees of the Central Committee under the Profiteering Act, I would remind him that in accordance with the provisions of Section 6 of the Profiteering (Amendment) Act, 1920, the decision whether a report or any part of a report shall be published rests with the Board of Trade. In no instance, however, has any alteration, other than a merely verbal alteration, been made in any report without the Committee which made the report being first consulted; and in all cases in which any alteration of substance has been made, the Committee which made the report has agreed to the alteration.
Has any alteration been made in the Report of the Sub-committee on Sewing Cotton?
I cannot give any further answer, but I will make further inquiries if the hon. Gentleman has any doubt as the accuracy of the reply.
Convictions
75 and 76.
asked the President of the Board of Trade (1) what punishment was inflicted in each of the cases in which convictions for profiteering have been obtained;
(2) whether the penalty of imprisonment has been inflicted in any one of the cases in which convictions have been obtained for profiteering?
On the 30th June last convictions had been obtained and fines imposed in 128 prosecutions under the Profiteering Acts. The following are the particulars of the fines imposed:—In three cases fines of £100; in seven cases fines of £50; in one case a fine of 25 guineas; in 12 cases fines of £25; in one case a fine of £22; in seven cases fines of £20; in one case a fine of £18; in five cases fines of £15; in one case a fine of £12; in 15 cases fines of £10; in one case a fine of £8; in three cases fines of £7; in 35 cases fines of £5; in three cases fines of £4; in five cases fines of £3; in one case a fine of £2 10s.; in thirteen cases fines of £2; in 12 cases fines of £1; and in two cases fines of 10s. In no case has a sentence of imprisonment been imposed.
Ireland
Flax Control
asked the President of the Board of Trade whether it is the intention of the Government to remove all control of price in respect of the 1920 flax crop in Ireland and to permit complete freedom of export?
His Majesty's Government do not propose to extend the control they have exercised over the price of flax in Ireland to the 1920 crop, and I hope it may prove possible to remove the present prohibition on export.
Government Policy
asked the Prime Minister whether, in view of the situation in Ireland, he will take an early oppor- tunity of stating what is the Government's last word with respect to its policy in that country, more especially in the direction of ascertaining whether there is any chance of compromise with the more moderately minded men in the island?
I would refer my hon. Friend to the answer given by the Leader of the House on Monday last to a question by my hon. Friend the Member for Yeovil (Mr. A. Herbert) and to the statement made by the Chief Secretary on Thursday last, to which I have nothing to add.
Trade Union Congress Deputation
asked the Prime Minister whether he has considered opening negotiations with the heads of the Sinn Fein movement in Ireland, with a view to an armistice and an eventual settlement?
asked the Prime Minister whether he will state to the House the nature and effect of the communication which he is stated to have made to the right hon. Gentleman the Member for Derby on the Irish question?
I can add nothing to the statement which I made on Thursday last to a deputation introduced by the right hon. Member for Derby (Mr. J. H. Thomas), a full report of which has been published in the Press. May I just say here that I very much regret that, in my absence, the right hon. Gentleman made a reference to something which had passed at the deputation, it having been agreed that an official report would be published. It may be impossible to receive these deputations unless the understanding which has been always honourably adhered to up to the present be observed—that there should be no communication with respect to the deputation except the agreed report, which is always issued after the deputation.
May I ask whether, in fact, the Government are opening negotiations or pourparlers with any section of opinion in Ireland?
No; I made that quite clear to the right hon. Gentleman when he came to me. I said I regarded him as representing no body of opinion in Ireland.
Martial Law
asked the Prime Minister if the statement made by the Chief Secretary for Ireland that there is to be a determined and organised attempt to establish an Irish Republic by means of murder and intimidation, is based upon special knowledge within the knowledge of the Government; if so, whether it is the intention of the Government to place this information before the House, so that they may be in a better position to discuss the measures about to be introduced to deal with the position in Ireland, and to judge of their adequacy; and if he will state whether the Government have definitely decided not to introduce martial law, even though the present campaign of murder and outrage cannot be checked by the present policy of pacification?
I have been asked to answer this question. I cannot add anything to the statement I made in the House on Thursday last.
Government of Ireland Bill
asked the Prime Minister whether the Government will withdraw the Bill for the Government of Ireland now under discussion by the House, and in its place introduce a Bill to set up a constituent assembly in Ireland to be elected by proportional representation, to which the duty of formulating proposals for the Government of Ireland shall be entrusted?
The answer is in the negative. The Government greatly regret that it has been found impossible to carry the Government of Ireland Bill before the Adjournment, but it is their intention to press it forward with all possible despatch when the House re-assembles.
Disturbances, Belfast
( by Private Notice ) asked the Chief Secretary for Ireland whether he is aware that the whole of the Catholic workers have been driven from their employment; whether these workers will be given full compensation during the time they are out of work; and whether immediate steps will be taken to reinstate them in their employment with adequate protection against further victimisation?
These and other questions have been handed in during the last hour, and I have done my best to get adequate answers. I have no information in my possession other than what has appeared in the Press as to the statement in the first part of the question, but I will make inquiry. The Government cannot assume any liability for compensation in respect of wages in the circumstances indicated, but every protection possible will be given to workers, irrespective of creed.
Is the right hon. Gentleman aware that even in the last two days these workers have been refused reinstatement in their work and that large organised bodies are gathering and preventing them from engaging in their work? What precisely is the position of the Government in regard to these matters?
Is the right hon. Gentleman aware of the condition of affairs in the Falls Division in respect of mills in which a large number of Protestant workers are practically besieged? Moreover, is he aware that in many instances these workers have been seriously maltreated?
May I also ask if it is true that two sailors have been killed in defending a coastguard station in Ireland?
I regret to have to say that two marines were shot in defending the coastguard station. In answer to the question of the hon. Member for the Falls Division of Belfast, I am not aware that all Catholic workers have been debarred from returning to their employment in Belfast to-day. I am aware that in Belfast the most bitter sectarian trouble has been going on for days, and I shall do my best to protect all workers, irrespective of creed.
I should like to ask the right hon. Gentleman whether he can give particulars of the attempts made to fire St. Matthew's Roman Catholic Church at Ballymacarret and the Convent of the Cross and Passion in Bryson Street, Belfast, and what steps he has taken to protect these places, in view of the repeated attempts to burn and destroy them, and what action is being taken to defend Catholic institutes and other buildings in Belfast from attack by these organised mobs?
Can the right hon. Gentleman give the House any information with regard to the murder of a police sergeant while at prayer in church yesterday?
Is the right hon. Gentleman aware that two Protestant churches were attacked and seriously damaged several months ago by Sinn Feiners, who have adopted a most provocative attitude in this respect?
Nobody could be more aware than I am of the bitter sectarian trouble which, as the supplementary questions show, is reflected in this House. The authorities are doing everything in their power, assisted by well-disposed persons of all parties, to prevent public disorder. An attempt was made, at 12.45 a.m. on the 24th, to set fire to the building by use of petrol, oil, and straw which had been collected underneath the ballroom at the rear of the hotel.
You have got the wrong answer.
4.0 P.M.
Yes. I only received notice of these questions within the last hour. I cannot, I am sorry to say, give any fuller details with reference to the fire at St. Matthew's Church or at the Convent of the Cross and Passion in Bryson Street, Belfast. I am aware that these buildings were attacked and that fires were struck, but everything was done, first, to prevent the fire, and, secondly, to extinguish it. I regret that, having received these notices within only an hour, I cannot give further particulars.
Did not these occurrences take place three days ago, and should not the right hon. Gentleman be in a position to give the information to the House? I would have raised these questions on Friday, but there was no Motion for the Adjournment, and I could not do so. [ Interruption. ] If you think that you can howl me down in this way you are mistaken.
Fifty-one police murdered, and not an arrest made!
The hon. Member (Mr. Devlin) has handed in to me several questions. Will he kindly put the next one?
( by Private Notice ) asked the Chief Secretary for Ireland whether an organised mob set fire to the Grand Hotel, Bangor, a holiday home for working women and girls; whether he is aware that the burning of these premises was the result of a deliberate conspiracy; whether warning had been given during the day that the place would be burned; whether a motor car, carrying a patrol of sixteen men arrived fifteen minutes before the fire was discovered; whether nearly 100 women and girls escaped from the burning building owing to the action of the fire brigade and a small band of military; whether the crowd tried to prevent some volunteers from helping to suppress the fire; whether, notwithstanding repeated warning to the authorities that attacks were to be made on this building, no adequate protection was given; whether any arrests had been made, and what steps are being taken now to protect this and other Catholic property in Bangor from destruction?
An attempt was made at 12.45 a.m. on the 24th July to set fire to this building. The attempt failed, as the blaze was noticed immediately and the police, fire brigade, and townspeople succeeded in extinguishing the fire. The total damage done amounted to £200. It had been rumoured that this building would be attacked, and a police patrol was in view of the place when the attack took place. As I have said, the police took part in extinguishing the fire. I have no information about the other statements in the question. Every effort has been made and will be made to give protection to everybody. No arrests have yet been made, so far as I know, for this particular attack, but nearly 200 arrests have been made in the last few days in connection with the outbreaks in the Belfast area.
Is the right hon. Gentleman aware that this is not a sectarian or political institution, but simply an institution to give a holiday to the mill working women and girls of Belfast; whether the military were there until Sunday and were then taken away; whether the staff of the institution were threatened that if they remained they would be murdered, and why the military were taken away?
I have had no notice of that question. At the present time the only questions which can be properly asked are those of which notice has been given to me.
On a point of Order. Am I not entitled to ask, since the military were placed there for the protection of this building, why they have been withdrawn? I think I am entitled to ask that question.
I am not aware that the military have been withdrawn.
I am.
The damage to the building amounted to the small sum of £200, and no persons within the hostel were injured. I agree that there is nothing sectarian, so far as I know, about the building or the inmates. I regret the attack, especially as my hon. Friend is one of the trustees of this hostel, which is doing very beneficent work for the poor girls in that area, but I would remind my hon. Friend that Bangor is not the only part of Ireland where these serious occurrences have taken place, and that the forces of the Crown, both police and military, have a very difficult task to preserve order throughout Ireland.
Is the right hon. Gentleman aware that Bangor is the only place in Ireland where infamous attacks have been made upon women? [HON. MEMBERS: "No!"]
May I, in answer to that last question of my hon. Friend, say that the most infamous attacks on women have been made in the South and West of Ireland.
And the hon. Member said nothing—not a word!
I regret attacks on women or on men, and I am glad to say that no attack was made on any of the inmates of this particular building.
Is the right hon. Gentleman aware that the whole place was covered with petrol, and that the women were got out of the premises shortly before the fire took place?
The hon. Member asks questions on a number of details. The Chief Secretary has already said that he has not the information.
He ought to have it.
A great many people ought to have many things which they have not got.
On a point of Order. May I, as an Irish Member representing the other side, ask a Supplementary Question?
Mr. MacVeagh.
On a point of Order. Having regard to the fact that there has been a long series of most dreadful outrages in Ireland for many months past, what is the particular urgency of these questions which enable them to be put by private notice?
Most of these questions relate to disturbances in Belfast, which, I understand, are still going on, or which, at all events, were still going on yesterday, and they seem to be urgent questions. That is why I allowed them.
Does that ruling mean that any of us will be at liberty at any time to put a question by private notice with regard to an outrage in Ireland?
We have had them almost every day.
I desire to ask the Chief Secretary for Ireland who is in command of the troops in Belfast and what is the general position of Brigadier-General Hackett Pain, who is Chief of the Staff of the Carson army?
The hon. Member has asked a question of which he did not give me notice. He has added words which I should not have passed.
With all respect, I submit that I am perfectly entitled to put the question, because it can be proved, and proved by the records of this House.
The hon. Member submitted to me a question which did not contain the words in the question which he has asked. I should not have passed the question had it contained those words. Therefore, I must request the hon. Member to proceed to the next question.
Do I understand that you refuse to allow me to ask who is in charge of the forces of the Crown in Ulster at the present time?
No; I refuse to allow the hon. Member to ask a question of which he did not give me notice. The Rules of the House say that notice must be given of any question which it is proposed to ask after a Quarter to Four o'clock. The hon. Member has added words which were not in the original question which he submitted to me. I must therefore ask him to proceed to the next question.
I am quite willing to take out the words to which you take exception, and to ask the question without them.
I must ask the hon. Member to proceed to the next question.
Then I decline to put any further questions.
( by Private Notice ) asked the Chief Secretary for Ireland whether the Government are giving their sanction to the enrolment of the so-called Ulster Volunteers, whether such an intervention by a political, sectarian, and armed organisation will not be a serious usurpation of the functions of this Government, and an addition to the already numerous sources of disorder in the north of Ireland, and whether the Government will not immediately suppress any such movement?
I have no knowledge of any enrolment of the Ulster Volunteers.
Has not the right hon. Gentleman, seen the newspapers? Has he not seen in the daily newspapers in this country that the call to report has been issued to these men?
I do not accept as accurate all the reports which I see in the newspapers in Ireland.
Do you accept them if they appear in the newspapers in England?
The hon. Member for the Falls Division (Mr. Devlin) has given me notice that he desires to ask leave to move the Adjournment of the House. Will he do so?
On a point of Order——
The hon. and gallant Gentleman must really allow me to conduct the business.
On a point of Order.
Does the hon. and gallant Gentleman rise to a definite point of Order?
Yes. Was I not entitled in the course of these last questions to put at least one Supplementary Question, having tried many times? May I put it now? Is the Chief Secretary aware, with regard to these sectarian outrages, that the great majority of the Protestant people of Ulster look upon these attacks on Roman Catholic churches and institutions with the most complete disapproval and reprobation?
Yes, that is entirely true, and I have received the greatest support from leaders of all creeds and all parties in the North to assist the authorities in putting down these disturbances.
Does not that prove that it would be better to let the Irish people manage their own affairs?
At the end of Questions.
I beg to ask leave to move the Adjournment of the House for the purpose of discussing a definite matter of urgent public importance, namely, "the grave situation which has arisen in Belfast in consequence of the attacks on the lives and property of Catholics in that city and the surroundings and of the inadequate measures taken by the Government to deal with the situation."
The pleasure of the House not having been signified, MR. SPEAKER called on those Members who supported the Motion to rise in their places, and not fewer than 40 Members having accordingly risen :—
The Motion stood over, under Standing Order No. 10, until a quarter-past Eight this evening.
Questions
Enemy Debts (British Clearing House)
asked the President of the Board of Trade how many persons of all grades, male and female, are employed in the very large range of buildings in Stamford Street and the adjoining thoroughfares, in connection with the Enemy Debts Clearing House and Reparation Claims Department; and whether he will take steps to reduce the operations of these two Departments at the earliest moment after the expiry of the period stipulated by the Peace Treaty so that the range of offices may be vacated, and the cost of offices and staffs, whether borne by the State or by the British creditors, materially curtailed?
The total numbers of the staffs employed on the 15th instant in the Clearing Office for Enemy Debts and the Reparation Claims Department at Cornwall House are as follow:
Will the hon. Gentleman say whether the expenses of this Department will be provided by Germany?
I should like notice of that question.
Is it not a fact that British creditors are paying 2½ per cent. commission towards the upkeep of the staffs of these offices?
I should not like to give an answer offhand. I would rather have the question on the paper.
Closed Factories (Labour Disputes)
asked the President of the Board of Trade if he will state how many factories have actually closed down during the past year through labour troubles?
I have been asked to reply to this question. I regret that the information for which my hon. Friend asks cannot be given, as it is not possible to determine the extent to which labour troubles, as distinct from other considerations, have influenced decisions to close factories.
Trade and Commerce
British Dyes
asked the President of the Board of Trade if he will state the precise words of the communication made by the Government to the synthetic dye-making industry with regard to the fostering of the industry by the prohibition of the importation of synthetic dyestuffs except under licence?
On the 15th May, 1918, the then President of the Board of Trade stated in this House:
"There is a further proposal, and that is that, in order to safeguard this particular industry against the efforts which the great German dye-making firms are certain make after the War to destroy all we have accomplished during the War and to make this industry again subservient to Germany, we will adopt a course which I believe I am right in saying was carefully considered by a Cabinet Committee of the last Government and recommended to and approved by the Government of that day, and which has since been approved by the present Government. It is that importation of all foreign dye-stuffs shall be controlled by a system of licences for a period of not less than 10 years after the War."
The announcement of policy contained in this statement was quoted in the pro- spectus of the British Dyestuffs Corporation, dated the 18th July, 1919, with the approval of the Board of Trade.
May we take it that there has been no subsequent communication on this subject, and that there is no anticipation of legislation in this House?
There was an announcement which appeared in the papers, I think, not many days ago.
I ask for the precise words of that communication. The hon. Gentleman has given me something in 1918.
I am sorry I misunderstood the question. I will try to get an answer to the question just put.
May we take that this control will not be commenced except after legislation by this House?
Does the fact that the announcement was made in the prospectus of the British Dyes Corporation mean that this is binding on the Government?
I take it as an undertaking the Government gave, and that they are bound to observe it so far as they gave it.
Will it be possible to start control without legislation here?
Is it not a fact that at the time the assurance was given it was stated that in all cases where the Government gave financial assistance to the dye industry there should be a limitation of dividends?
I cannot give an answer to that without notice. I cannot say for certain whether it was so in all cases or not.
British Shipping (American Interests)
asked the President of the Board of Trade whether he is aware of any movement in the direction of American interests acquiring British shipping; and whether he will take all necessary steps to prevent British shipping passing from British ownership and control?
I am not aware of any such movement as is suggested by the hon. Member in the first part of the question. The transfer of British ships to foreign flags is governed by the provisions of the British Ships (Transfer Restriction) Acts, and no such transfer can take place for three years after the War, except with the consent of the Board of Trade or of the competent authority in the self-governing Dominions or India in the case of vessels over which they have jurisdiction.
Foreign Toys
asked the President of the Board of Trade whether the imports of foreign toys for the five months, January to May, 1920, amounted in value to £880,000, of which £457,000 represents the imports from Germany and £250,000 imports from Japan; and, if so, whether he will give effect to the undertaking of the late President of the Board of Trade that, if it was evident that a considerable amount of toys was entering this country, he would consider means to check their importation?
According to the information supplied to me by His Majesty's Customs, toys and games (not of rubber or leather) to the value of £866,000 were registered as imported into the United Kingdom during the period specified, of which the consignments from Germany and Japan accounted for £460,000 and £146,000 respectively. The statement attributed in the question to the late President of the Board of Trade is not entirely accurate. The substance of what he said was that if an industry was being overwhelmed by an undue importation of goods at prices altogether below the cost of production here—owing to the collapse of exchanges—the Government would consider means to check their importation. I am watching the situation, having these considerations in view.
Is the right hon. Gentleman aware that it was in answer to a specific question on the subject of toys that the late President of the Board of Trade made the statement referred to; and will the hon Gentleman consider the fact that this is a matter which seriously interferes with the employment of ex-soldiers?
I am aware of that, and my right hon. Friend is considering the question.
How are we to be paid for our own exports if we prevent imports coming into the country?
May I ask when it is proposed to introduce the Imports and Exports Bill, and if by that Bill the import of foreign materials will be controlled?
I should like notice of that question.
Has the hon. Gentleman heard of the date of the introduction of the Anti-Dumping Bill, or any whisper of it?
I have heard many whispers of it, but not the date of introduction?
Is the hon. Gentleman aware that great numbers of people in this country cannot procure toys for their children at the present time owing to the expense?
All relevant considerations will be taken into account.
German Government Bonds
asked the President of the Board of Trade whether British-held unpaid coupons off German Government Bonds, representing interest accrued for the six months 10th July, 1919, to 10th January, 1920, are to be encashed by virtue of Article 296 of the Peace Treaty through the British Clearinghouse, while similar coupons off similar Bonds unpaid for a similar period of six months from 12th July, 1919, to 12th January, 1920, are not to be encashed; if such is the case, since the British Clearing-house is asking for the deposit of British-held coupons falling due not later than 10th January, 1920, will he consider the loss resulting; and will he discuss with the proper authorities the advisability of encashing coupons for the broken period up to 10th January, 1920, so that unpaid coupons falling due up to, say, 1st February, 1920, may not be ruled out for the five and one-third months' unpaid accrued interest?
Under the Treaty, only debts which became payable before or during the War, that is to say, prior to 10th January, 1920, can be preferred through the Clearing-office. It is regretted, therefore, that the course suggested by my hon. and gallant Friend cannot be adopted. Coupons of the description referred to falling due for payment after the 10th January last are payable direct to the holders by the German Government.
Questions
Canadian Cattle Embargo
asked the President of the Board of Trade if there is now an embargo on the importation of Canadian cattle; and, if so, can he state the approximate date of its removal?
The Diseases of Animals Act of 1896 forbids the landing in this country of animals from any country except for slaughter at the port of landing within 10 days. No legislation to amend the above-mentioned Act is at present contemplated by the Government. The only exceptions admissible under the Act are with regard to animals intended for exhibition or other exceptional purpose. In such cases stringent quarantine is enforced.
Coal Production
Price and Wages
asked the President of the Board of Trade whether he can make a statement as to the negotiations with the Miners' Federation with regard to the claims for increased wages and a reduction in the price of coal?
asked the Prime Minister whether the Government have given any reply to the claim of the miners in respect of the increased wages and reduced price of coal; and, if so, what are its terms?
My right hon. Friend has arranged to meet representatives of the Miners' Federation at 4.15 o'clock this afternoon, and I cannot, of course, anticipate the result of that meeting.
Waste Material (Export)
17 & 18.
asked the President of the Board of Trade (1) whether he is aware that the local Coal Controller at Grangemouth has refused to allow the ss. "Pollie" and "Allie" to sail with waste material out with the Coal Controller's control, and that the said steamers are now under demurrage, involving heavy loss to the charterers; whether he will instruct the local controller at the said port to immediately release the said steamers and their cargo;
(2) whether he is aware that 13 ships are lying at Grangemouth on demurrage, and other 12 ships have just sailed light after waiting for cargoes of duff, much of which belongs to landowners who are not coal owners; that the said duff was originally rejected at the pits and binged because it was not coal; and whether he will immediately issue instructions that this export of a waste material, useless in this country, the sale whereof for export is of great advantage to the exchange and trade of the country, shall no longer be hindered at the instigation of the coal exporters?
As regards the first of these questions, I will have inquiries made concerning the cases of the two vessels referred to, and will let the hon. Member know the result. With regard to the second question, I regret that I cannot add anything to the answers I have recently given to the hon. Member.
Is the hon. Gentleman not aware that there is a very large trade in waste material which is not used in this country, and that it is being strangled at the Scottish ports by the local Control Committees, although the material which is loaded in the ships in practically every case comes from waste deposited many years ago which does not in any way affect the coal supply?
I have told the hon. Member in answer to a question that a certain amount of this duff is allowed to be exported and the matter is in the hands of the local Coal and Coke Committees. I cannot say any more than that at present.
Can the hon. Gentleman tell me why this duff, which is rejected at the pit head because it is not coal and which is left lying abandoned, is dealt with at all by the Coal Controller, and why he does not allow this vast quantity of duff, which is perfectly useless, to be exported?
The distribution is in the hands of the local committee. There were difficulties about the export before, because some people took advantage of the permission to export duff and exported what was real coal under the guise of duff. That was the reason why investigation had to be made and control had to be put on.
Why not deal with the people who break the law? This is not coal at all, but duff.
It counts as coal, and as much as possible is allowed to be exported under the direction of the local committee.
Some of it has been lying there for fifty years, and it could not be sold as coal. It is no more coal than sand is.
What is "duff?"
It is pit material rejected.
Questions
Roumania (British Railway Mission)
asked the Prime Minister whether there is a British Railway Mission in Roumania; if so, will he state how it is composed; what are its duties; whether any motor cars are allotted to it; and what is the monthly expenditure involved to the State in connection with it?
There is a British Railway Mission in Roumania consisting of one senior attaché, two attachés, one clerk one interpreter and one chauffeur. Its duties are to supply information to His Majesty's Government in co-operation with His Majesty's Legation at Bucharest in regard to such questions as may arise as to the execution of the clauses of the Peace Treaties dealing with freedom of communication and transit and with territorial and other problems, the transportation aspects of which are frequently of the utmost importance. One motor car is allotted to the use of this Mission. The monthly expenditure involved is £393. The question of reducing the staff and therefore the expenditure is under consideration.
Russia
General Wrangel (Men and Munitions)
asked the Prime Minister whether any men, stores, or munitions have been sent from Batoum to the forces operating under General Baron Wrangel in South Russia and the Crimea; if so, on what dates were these sent; what shipping was used for this purpose; and what were the cricumstances under which this was done?
As I told the House on the 12th of June, with the exception of certain arms destined for the Armenians, no munitions have been despatched to the Black Sea for General Denikin, General Wrangel or any other Foreign force from this country since the 24th January last or from Egypt since the 20th February last. It appears that some of the stores forming part of the final consignment for General Denikin could not be landed at Novorossisk in March and were directed from there to Batoum and subsequently to the Crimea. This was, of course, before the assumption by General Wrangel of the offensive which he undertook contrary to our advice.
On what date were these munitions sent to Batoum?
Why did the right hon. Gentleman tell me exactly the reverse of that the other day?
No, I did not. What I said was that we had sent no munitions from this country after February. As a matter of fact, we have not sent any munitions from this country since January. We sent some from Egypt in February, but I was not aware of that when I made the statement. They were sent to Batoum, and afterwards from Batoum to the Crimea, but that is all that happened, and I am very glad to make that explanation, so that there shall be no misapprehension about it.
I did ask whether munitions had been sent from Batoum to the Crimea, and the right hon. Gentleman said "No" in the Debate.
I agree. I was not aware of that fact, but all I meant was that nothing had been sent from this country, and only machinery had been sent from this country in January that had to be sent to Batoum, and from Batoum onwards. I am very glad of the opportunity to explain this.
May we take it that no more is to be sent without the leave of this House?
It cannot be, because it was under the sanction of this House that it was sent, and that expired on the 31st March; and we certainly should not do so now.
Has the Soviet Government made particular complaint about this, and has the right hon. Gentleman explained to the Soviet Government why this happened?
I am not sure whether they have or not.
Trade Union Leaders (Batum)
asked the Prime Minister whether he has yet any information as to the arrest and deportation of the trades union leaders at Batum by the British military forces?
Certain Labour leaders in Batum who were engaged in Bolshevik intrigue, and were attempting to cause a general strike, were arrested and interned at Chanak, where they are being well treated as political prisoners. Arrangements are now being made for their release. The arrests were made by order of the Military Governor of Batum, who was empowered to take any action he might consider necessary to ensure the proper execution of the duty entrusted to him in the name of the Supreme Council, namely, the security of the town and its inhabitants. With the small force at his disposal, the task of maintaining order in the event of a general strike would have become practically impossible, and the safety of the troops themselves would have been gravely imperilled.
Can the right hon. Gentleman say when this arrest took place, and also whether the military commander there referred the matter home, and asked for an opinion before he took this drastic step?
I do not think I could answer that without notice.
Will the right hon. Gentleman give an assurance that these trade union leaders will not be released until our Naval prisoners at Baku have been released?
That is a question for the Georgian Government. Now that Batum has been handed over to the Georgian Government, we are communicating with that Government as to whether they want them back or not.
Caucasus (Armenians)
asked the Prime Minister what were the reasons which induced His Majesty's Government to bring away the last of the British troops from Batum, and so abandon, to whatever fate may befall them, the Armenians in the Caucasus who maintained a fight as our Allies in those regions throughout the War?
British troops were originally retained in Batum to hold the town in trust for the Allies until a satisfactory solution as to its ultimate disposal should be found. This has now been done, and the town has been handed over to Georgia on conditions which were specially framed with a view to safeguarding Armenian interests.
Is the right hon. Gentleman aware that the retirement of the British has been immediately followed by the joining up of the Russian Soviet force with the Turkish Nationalist force in the South?
That is not our information. I doubt whether that is accurate.
asked the Prime Minister whether General Wrangel has formed a de facto Government; and, if so, whether the Supreme Council of the Allies has made any communication to General Wrangel with regard to the future recognition of that Government?
The answer to the first part of the question is in the affirmative, to the second part in the negative.
How does the right hon. Gentleman reconcile that statement with the one made by M. Millerand in the French Chamber, in which he said that in certain eventualities the Allies would recognise General Wrangel's Government?
I do not think he said so.
I can show the right hon. Gentleman the statement.
Mr. S. Nuorteva
asked the Lord Privy Seal if his attention has been called to the suggestion in the Press that, in the event of Mr. Santeri Nuorteva, the Finnish subject who has been deported from the United States for seditious activities, being assisted to return to his native country, British officers now imprisoned in Russia should be made the victims of reprisals; and if, in these circumstances, he will state what action exactly has been taken by the authorities here with regard to Mr. Nuorteva?
The answer to the first part of the question is in the affirmative. I would, however, point out that there has been no intention on the part of His Majesty's Government to send this gentleman to Finland, as he had himself requested to be despatched to Soviet Russia, via Latvia and Esthonia. This is now being done. A telegram has been sent to the Soviet Government informing them of the facts.
British Prisoners (Baku)
( by Private Notice ) asked the Lord Privy Seal whether he is able to give the House any information as to the fate of the British prisoners at Baku; whether it is a fact that 50 British subjects are confined in one room which is described as a veritable "Black Hole," full of vermin, and that they are fed twice a day with a bucket of soup and black bread, and that there is much illness amongst them, and whether, in view of their extremity, the Government will take immediate steps to secure their liberation and safe conduct out of Russia?
We have no confirmation of this report, but, although Baku is under the jurisdiction of the Republic of Aserbaijan, we are again in communication with the Soviet Government on the subject.
Shall we receive the Russian representatives here before these unfortunate people are liberated?
The hon. Member must give notice of that question.
Turkey
Greek Operations
asked the Prime Minister whether the Government has undertaken any liability, direct or indirect, to provide any grant or loan to the Greeks in connection with their offensive in Turkey?
The answer is in the negative.
League of Nations
Draft Mandates
asked the Prime Minister whether any of the Draft Mandates for any of the mandated territories will be ready in time for their submission to the Council of the League at their forthcoming meeting at San Sebastian?
It is not likely that the Mandates will be ready for submission at the San Sebastian Meeting, the reason being that in the case of the B and C Mandates it is thought desirable to submit them, not piecemeal, but en bloc, and that agreement on some important points remains to be secured; while the A Mandates are not yet in a sufficiently forward condition to admit of their being laid.
Do the great Powers submit mandates to the League of Nations? Is submission the real attitude?
The great Powers are on the League of Nations, and they are only submitting to themselves.
Are we to understand that the next holiday outing of the Allied delegates will be at San Sebastian?
I thought the question referred to the League of Nations, and the League of Nations has to meet somewhere. What does the hon. Member propose?
May I suggest Black-pool?
Germany
asked the Prime Minister when it is proposed to invite Germany to become a member of the League of Nations?
I would refer the hon. Member to the answer which I gave to a similar question on the 24th of June. I cannot forecast a decision which, under the Covenant, must be made by the Assembly of the League.
Will the right hon. Gentleman take the initiative in suggesting to the Assembly of the League that they should now issue this invitation to Germany; and does he not think that if the invitation were now issued, it would greatly strengthen the hands of the German Government in carrying out the Peace Treaty, which, in his own words, they show an earnest desire to do?
The next few weeks will show whether the German Government represents Germany in the declaration it made at Spa that it intends to carry out the Treaty. If Germany shows it is really making an effort to carry out the Treaty, more particularly in regard to disarmament and coal, then I have no doubt at all the Allies will regard very favourably a proposition of that kind, but I think, first of all, Germany must give a clear indication that she is making a real effort.
Aaland Islands
asked the Prime Minister whether he will lay upon the Table Papers in reference to the action of the Council of the League of Nations on the Aaland Islands question?
The answer is in the affirmative.
Questions
Land Purchase
asked the Prime Minister whether, in view of the dropping of the undeveloped land tax, he will consider what other means may be found to make lands available to private persons desiring to use it; and whether, in particular, he will consider the introduction of legislation whereby a would-be user of land may be enabled to bring his claim before a court in the manner at present open to a public body?
Under the Land Acquisition Act powers are now given to local authorities to acquire land for any object which is of public importance.
Does that not mean that the prices to be paid will be higher in consequence?
On the contrary, having regard to the fact that the price of land has gone up, the prices paid under that Act have been exceedingly satisfactory.
Mesopotamia
Arab Tribes
asked the Prime Minister whether, in view of the trouble already experienced with Arab tribes in Mesopotamia, instructions will be issued that no British or British-Indian system of government shall be introduced, but that the Arab inhabitants shall continue to enjoy their immemorial freedom on the payment of a light and easy tribute, no greater than that levied by the Turks, to the Government established by the British in the area which they have undertaken to govern?
I cannot add anything to what has already been said in regard to the policy of His Majesty's Government in this matter.
Will it not be a great pity if money is spent in making ourselves unpopular and the Arabs uncomfortable.
asked the Prime Minister whether any responsible Arabs in Mesopotamia have been consulted as to the formation of an Arab State; whether any Arabs are at present associated with the British Government there; and if he will explain who is responsible for the tragic absurdity of British troops being attacked and killed by Arabs when the policy of the Government is to establish an Arab State?
The answer to the first two parts of the question is in the affirmative. As regards the third part, I would refer my hon. Friend to the reply which I gave him on 22nd July.
Did not General Sir Stanley Maude, in March, 1917, tell the Arabs that the British came there as liberators and not as conquerors, and who is responsible for all this great delay in setting up the Arab State, which has now lasted for three years?
The reason is that the Turkish Treaty has hot been signed. I have explained briefly to the House why we have been unable to bring the Turkish negotiations to an earlier termination. If they had been, I have no doubt the Arab state would have been organised a long time ago.
Is the right hon. Gentleman really aware that British troops are being attacked and killed for the purpose of supporting His Majesty's Government in establishing an Arab State?
I agree it is very absurd, but the responsibility is not ours. It is that either of the Arabs or those who are taking special trouble to mislead them as to our intentions.
Was there anything really to prevent the establishment of an Arab State or a state of government applied by Arabs long before this; in that respect is the International situation really different now to what it ever has been?
There was an agreement arrived at between the Powers when it became quite clear that America was not coming into the Negotiations with regard to the Mandates. The mandate was only assigned to us at the San Remo Conference, before that we had no authority.
Have you done anything?
Does the right hon. Gentleman think it too late to review the whole of our Mesopotamia policy?
I do not think it is necessary to review our Mesopotamia policy, which is to set up an Arab State. This we propose to proceed with at the earliest possible moment. Sir Percy Cox has received instructions from the Government to go there for that express purpose of setting up an Arab State; that has been our policy throughout.
Is the recent publication in the Press of the Anglo-Persian oil agreement at Mosul in conformity with the establishment of an Arab State?
The hon. and gallant Gentleman must give notice of that question.
Revenue
asked the Lord Privy Seal whether, seeing that under British administration the Mesopotamian revenue shows a surplus, there is any, and, if so, what reason against the expenses of the British Army in Mesopotamia being charged upon and paid by Mesopotamia?
It would be premature to discuss the disposal of any supplus before the accounts of the administration during the period of military occupation are finally made up.
May we consider then that there is some possibility of this country getting reimbursement from Mesopotamia?
It would only be reasonable, if the funds are there, that we should be paid for at least the permanent works that have been paid for by this country.
Is there the smallest possibility of a surplus being shown in connection with this civil administration?
I think so, and I hope so.
Will the oil companies pay for the upkeep of our Army?
The hon. and gallant Gentleman knows perfectly well that that has nothing to do with this. Oil will, I hope, be one of the sources of revenue.
Transport
Railway Fares (Increase)
asked the Prime Minister whether he can now give an assurance that the increase of railway fares will not take place before the expiration of one month from the publication of the Report of the Rates Advisory Committee?
asked the Prime Minister if the Advisory Committee on Railway Fares have made their Report; and will the House have the opportunity of discussing this Report before it is put into effect?
asked the Prime Minister if he will reconsider the decision that the increase of passenger fares must come into operation immediately after the Report of the Advisory Committee, but not before 5th August; whether he will undertake that such increase shall not come into operation until 1st October, reserving the right to raise the proposed rates pro rata for the period after that date; and whether he is aware of the nature of the feeling aroused in the country on this matter and that real hardship will be caused, not only to those members of the public who desire to take holidays during August and September, but also to many persons at seaside and other pleasure resorts who may have their livelihood jeopardised by the cancellation of hirings, etc., due to the short notice which has been given of the change?
The report of the Advisory Committee has just been received and is being laid upon the Table to-day, and is also being given to the Press. It is now under the consideration of the Cabinet, and our decision in reference to it will be announced in the House on Wednesday.
May I ask the right hon. Gentleman whether he will give as great consideration as possible to, or a decision which will benefit, those people who have already planned to take their holidays and who would be hard hit?
Will the right hon. Gentleman allow the House to have an opportunity of expressing its opinion on the subject?
I think that question ought to be addressed to the Leader of the House. Certainly, I have no doubt at all that all these matters will be taken into consideration, but I think my Noble Friend had better see the Report of the Committee.
Will the Leader of the House answer my question?
I think it will be wise to wait till we see the Report before we undertake to give a discussion.
Will the Leader of the House undertake that those who applied for return tickets before the actual increase of fares comes into operation shall have the right to apply for and obtain return tickets at the present rates?
I think it would be better to wait and see the decision, but as a matter of fact we have already stated that all return tickets issued before the date of the new rates will be valid.
Will the right hon. Gentleman undertake not to put the decision into effect until the House has had the opportunity, if the House wishes, to discuss it?
Certainly; we cannot put it into effect until our decision is announced. I cannot say more than that.
Does "our decision" mean the decision of the House or the decision of the Government?
The decision of the Government, which the House can always challenge if it pleases.
Does the right hon. Gentleman ask us to wait before moving the Adjournment of the House in order that we may wait till the Report comes?
Yes, obviously the blouse cannot rightly move the Adjournment till it knows what it is moving it about.
Will my right hon. Friend say that he will at least give 48 hours' notice before he puts the decision into effect, if the House wishes it?
I do not think that is a very reasonable request. As a matter of fact, our decision, I hope, will be announced on Wednesday, and the new rates will not be imposed for at least 48 hours after that.
asked the Minister of Transport if he will arrange that any increase in railway fares shall be conditional on the railway companies making a reasonable increase in the allowances to superannuated railway servants?
The increase in fares which is proposed is for the purpose of meeting the deficit which will otherwise fall on the Exchequer. I cannot agree that this increase has any connection with the position of the superannuated servants of the companies.
Railway Companies (Financial Arrangements)
asked the Prime Minister if he will appoint a select Committee of this House to investigate and report on the financial relations between the Government and the railway companies?
It is very desirable that this subject should be thoroughly examined, but the Government do not think that it would be useful in present circumstances to adopt the hon. Member's suggestion.
Motor Chars-A-Bancs (Accidents)
asked the Minister of Transport whether three very serious accidents have recently taken place to motor chars-a-bancs or motor vans carrying a large number of passengers; what casualties were sustained by the passengers involved; whether inquiry has shown that in all these cases there was a failure of brakes, and in two cases possibly inexperience of the driver; and whether he will now institute a special inquiry into the conditions governing the use of such vehicles, with special reference to examination of drivers and vehicles and the suitability or otherwise of the roads used by them, in the interests of public safety?
I have had special inquiries made into the causes of the three accidents referred to in the Noble Lord's question. Three men in all were killed in these accidents and a number of other passengers injured. In each case there appears to have been a failure of brakes, but, so far as I am aware, there is no reason to suppose that any one of the accidents was due to inexperience on the part of the driver. These unfortunate accidents are engaging the closest attention of the officers of the Ministry, and the question of the Regulations connected with the licensing and registration of hackney vehicles is being considered by the Departmental Committee concerned. Legislation would be necessary to deal with the question, and it is hoped to submit comprehensive proposals this autumn.
Railway Traffic (Traders' Tickets)
asked the Minister of Transport whether traders are now able to freely specify the railway company which shall convey their traffic; and, if not, whether he will arrange that the qualification for a trader's ticket shall be calculated upon the aggregate traffic of the trader instead of on the amount actually carried by the railway company issuing the ticket?
The arrangements which were made by the companies during the War as regards the allocation of traffic by certain routes are being continued in the interests of all parties. With regard to the latter part of the question, it is understood that where traffic has been allocated the companies are taking the allocated traffic into consideration when calculating the qualifying amount for the issue of a trader's ticket.
Season Tickets
asked the Minister of Transport whether, in view of the assistance to the commercial community and the economy of time to business interests resulting from the interavailability of season tickets, he will suggest to the Railway Executive Committee the desirability of devising a scheme whereby vouchers or special tickets could be issued by one railway company upon the production at the booking office or elsewhere of a season ticket of another railway company running btween the same places, such vouchers or tickets to be subject to financial adjustments between the companies concerned upon an agreed basis covering the cost involved?
It is already possible to obtain season tickets available by more than one route upon payment of the appropriate charge. If the suggestion of the hon. Member is that the holder of a season ticket available on one route only should on production of that ticket be allowed to travel by another route at reduced fares, I regret that, in the present financial position of the railways, I am unable to accept the suggestion.
Does my right hon. Friend realise that this is not a question of reduced fares to the persons holding season tickets, but of having the alternative of travelling on two railways which would be very convenient?
During the War, when the train service was bad, a special concession was made, but that has now been withdrawn. An additional charge has been made, and the alternative ticket can be obtained.
Nottingham Station
asked the Minister of Transport whether he is aware that the Nottingham Corporation cannot agree to the suggestion made by the Midland Railway Company that public funds should be used to pay the cost incidental to the re-opening of the closed exit of their Nottingham station opposite Trent Street; that the railway company has recently instituted a platform tax which extracts from the public using this station an amount in excess of the cost of reopening the closed exit; and, under these circumstances, will he recommend to the Midland Railway Company that they should meet the wishes expressed by the 18,000 users of this station, and endorsed by the civic authorities and the Chamber of Commerce?
I would refer the hon. Member to my reply of the 12th July. The views of the Corporation of the City of Nottingham on this matter have not yet been communicated to this Ministry.
Split Turns of Duty
asked the Minister of Transport whether he will take steps to have the agreements with the Transport Union providing for the cessation of the split shift revised in order to save at least £1,000,000 per annum and so prevent the raising of fares by the traffic combine against the travelling public?
The agreements under which some number of split turns of duty are worked on the Underground Railways and the omnibuses were only come to with some difficulty, and I do not think that an attempt to increase the number of split duty turns would be successful. I undersand from the companies concerned that it is impossible to estimate the sum involved, but that in any event the figure of £1,000,000 is very largely in excess of the money involved.
Is the right hon. Gentleman aware that the abolition of the split-shift system will involve 25 per cent. more men, and that for part of their time many of these men will be practically unemployed; and, as the arrangement is so unreasonable, can he not arrange with the union to get the men travelling backwards and forwards to their homes to adopt this system?
I will certainly see whether anything can be done by the Ministry of Labour.
Fruit Pickers (Scotland)
asked the Minister of Transport whether specially low railway fares were sanctioned in connection with the transport of fruit pickers in Scotland to the fruit-growing districts; and, if so, can he explain why a similar concession was refused to English growers?
Special fares are in force in connection with the transport of fruit pickers to the Perthshire fruit-growing district. The circumstances in that case are exceptional and the concession has been continued for this year only. The concession cannot be extended to other districts where the same circumstances do not apply, and where the special fares have not been in force for some time.
Is the right hon. Gentleman aware that formerly special fares have been granted, and will he state why such a differentiation should be made now; does the right hon. Gentleman realise that this arrangement will allow the Scotch growers to sell lower than the English?
I do not know that. The reason it was continued was that there were very special circumstances and the concession was not withdrawn last year. Elsewhere the concession was withdrawn some time ago.
Canals
asked the Minister of Transport whether the controlled canal companies have been informed that control will cease on 31st August and that all subsidies will then come to an end; whether he is aware that in the absence of any power to raise their tolls these companies cannot continue to maintain their waterways without a subsidy; and whether he will take possession of their undertakings and direct them to raise their tolls forthwith in accordance with the Ministry of Transport Act?
The answer to the first part of the question is in the affirmative. I am prepared forthwith to take possession of the controlled undertakings under Section 3 of the Ministry of Transport Act for the purpose of setting in motion the machinery provided by the Act for increasing tolls and charges. Under the Act I have no power to authorise such increases until the matter has been referred to the Rates Advisory Committee for their advice and report. The Government is desirous of maintaining the canal undertakings as effective transport agencies, and favourable consideration will be given to applications for advances to enable working expenses to be met until authority to increase tolls and charges can be given. I am hopeful that it will be possible to give this authority before the end of September next.
Is it part of the settled policy of the Ministry to delay decisions on the question of rates until the very last moment; is the right hon. Gentleman aware that when I called attention to this matter three weeks ago I was then told that a definite decision would be taken long before the period of control had expired, and why has the matter been delayed until now, when it is too late to enable the canal companies to raise their tolls?
There is always a difficulty in removing a subsidy, because, naturally, those from whom it is removed object. In this particular case, the canal companies knew some time ago that the subsidy was to come to an end, because it was intimated to them through the Ministry of Transport, that the Government would not take any part in the negotiations which were going on. Obviously, until we saw our way on the question of railway rates we could not decide, because the question was very much affected by the charges levied on canal companies, and it was impossible to come to a decision before. Now that a decision has been come to, the canal companies are being assisted in every possible way. Although the subsidy is to come to an end, it is proposed to continue giving these companies assistance, so that they shall not be financially embarassed, and in order that they may overhaul their arrangements.
Why did he not decide to take possession of these canals some months ago?
It was necessary to postpone the matter until one saw what was going to happen to the railways. Now one can form a fairly accurate judgment whether the canal rates can be raised or not and come to a decision.
Is there any anticipation that the Ministry of Transport propose to take over the canals, seeing that they have made such a howling mess of the railways?
I do not agree with the statement in the last part of the question. We merely take over the canals in a technical sense in order to enable them by law to get their rates up, but there is no intention to take them over.
Will the right hon. Gentleman arrange that the Advisory Committee shall report before the 31st of August?
That rests with the Chairman of the Committee, and he is not under my control.
After the subsidy has ended, does the right hon. Gentleman say that financial help will be given? If so, by whom will it be given and under what authority?
There is no question of increasing the financial assistance, and what has been provided for in the Estimates will amply cover it. It is proposed to bring the subsidies to an end. Then there will be a strict arrangement with the Treasury to give temporary aid to the canals in order to keep them going.
Is that allowable?
Poland
Armistice Proposals
asked the Prime Minister whether the Allied Council, the Council of Ambassadors, or His Majesty's Government received any communication from the Russian Soviet Government with reference to peace with Poland, or with reference to an armistice, or to arbitration with Poland before the Polish army commenced its offensive towards Kieff, or during that offensive; if so, what was its nature; and what reply was sent?
A wireless message of considerable length was addressed on 8th April by the Soviet Government to the British, French, Italian, and American Governments in regard to a proposal for negotiations for an armistice with the Polish Government. The reason for which no reply was sent by His Majesty's Government to this communication was that negotiations were already proceeding on the subject between the Polish and Soviet Governments, the main difference between them being as to the choice of a place of meeting; and it did not seem likely that the renewed intervention at this stage of His Majesty's Government, who had already advised the Polish Government to come to terms, would be attended with practical results.
May I ask whether the Government really received a request for intervention before the offensive by the Poles, and why could not they have done so then and avoided all this bloodshed and danger to Central Europe, in the right hon. Gentleman's own words?
I have already said that the answer is that negotiations were going on at the moment with the Polish Government, and we could not have done anything more than the part we took in January and February in urging the Polish Government to come to terms.
Had we no information from our expensive military missions in Warsaw and Poland that an offensive was likely and was being prepared behind the scenes? Had we no news of that?
No. The news we had was that there was an offensive being prepared by the Bolsheviks.
All the more reason for intervention. Lord R. CECIL: Arising out of the right hon. Gentleman's first answer, when did the British Government advise the Poles to come to terms?
I am not sure that the word "advise" is the right word to apply. One independent Government can hardly give advice to another, but we made it quite clear what our view was upon the matter. Certainly, I think, I first of all made it clear to the Foreign Minister in Paris in January what the view of His Majesty's Government was, and I subsequently saw him here, either at the latter end of January or at the beginning of February, and in order to make quite sure I put it in the form of a despatch and sent it to our Ambassador at Warsaw for communication there to the Polish Government.
Why have Members of the Government repeatedly told this House they were not giving any advice at all?
I said so just now, and I am surprised my Noble Friend overlooked that part of my statement. I said that one independent Government can hardly give advice to another independent Government with regard to what course they should pursue, but we made quite clear what was our view.
In order to set this matter right, will the right hon. Gentleman publish the despatch he sent to Warsaw?
I shall have to consider that and communicate with the Polish Government, but for reasons which I shall indicate later on, I am not sure it can be done at this stage. I will make that clear in answer to another question.
asked the Prime Minister whether any financial arrangement has been come to with the French or other Allied Governments as to the expense of supporting Poland with munitions or personnel?
asked the Prime Minister whether the Russian reply to the British Note re Poland and Baron Wrangel was as stated in the Press of 22nd July; why it was not laid upon the Table before the Debate on 21st July on the Russian and Polish situation; whether the British reply will be communicated to this House; and whether the Polish Government has approached the Russian Government with a request for an armistice?
asked the Prime Minister whether he will now publish the Note received from the Russian Government with reference to the proposed armistice with the Pores, together with the Government's reply to that Note?
asked the Prime Minister whether he has received information from the Polish Government that it has applied to the Russian Government for an armistice?
asked the Prime Minister whether, in the event of the Russian Communist Government invading the territory of our Polish ally, equipment, guns, and ammunition surplus to the requirements of the forces of the Crown on demobilisation will be placed at the disposal of Poland; and is he aware that what Poland needs for her defence is not men but equipment and material?
The situation has been changed since these questions were put down, by reason of the fact that the Soviet Government has now agreed to the request of Poland for an armistice with a view to peace. Negotiations for the armistice have already commenced. Further, yesterday morning an important despatch was received from the Soviet Government, the nature of which I shall state in reply to another question. In these circumstances, I do not think it advisable to discuss by way of question and answer the details contained in those questions, which were put down before the information I have given was received.
Will the right hon. Gentleman reply to the first part of my question 39, as to why the note from the Russian Government was not communicated to the House before the Debate on the 21st July, when it came out in full in the Press the following day? Why were we not told, in view of the importance of this subject?
The answer is a very simpe one—Because we thought it desirable that the negotiations should be completed before the Papers were laid on the Table of the House, and that has always been the practice up to the present. Unfortunately the Press got hold, from some source or another, of this document, or of garbled extracts, and published them. The Government cannot be responsible for that. I have no doubt in my own mind that the best practice would be to allow the negotiations to be completed before you publish one document and before a reply is sent. It would be very much better.
How is it that there are so many leakages of information, and will the right hon. Gentleman give instructions that, so far as possible, information shall be communicated to this House before it is communicated to the Press?
Is it not a fact that this was communicated by the Soviet Government to newspapers which are inimical to this country and in favour of Soviet Government?
I have no doubt at all that this information was communicated by the Soviet Government.
When do the Government propose to lay Papers generally on Russian and Polish affairs?
I think we have published all Papers up to the present. There was a despatch received yesterday, and a reply sent. I hope there wil be no demand for laying that on the Table of the House until the situation is a little clearer.
Will a Blue Book be laid with all this correspondence for the past months?
I will consider that.
( by Private Notice ) asked the Prime Minister whether he can give the House any information as to the latest phase of the Polish-Russian negotiations?
A communication has just been received from M. Tchitcherin stating that the Soviet Government have instructed their Army Headquarters to enter into negotiations for an Armistice and, also, that they accept the proposal of the British Government for a Conference in London, with the object of establishing a definite agreement between Russia and the Powers which are engaged in hostile action against her, or supporting such action, and suggesting that the representatives of the leading Entente Powers should attend this Conference. His Majesty's Government is in communication with our Allies on the latter point, and I hope to meet M. Millerand about it tomorrow. The telegram will be circulated in the OFFICIAL REPORT, and a copy is being sent to the Press.
The following is the telegram referred to:
Reval, 24th July, 1920.
Following from Tchitcherin. Begins:—
The Russian Government expresses its willingness to meet the desire of the British Government as to its proposal to convene a Conference with the purpose of establishing a definite agreement between Russia and other Powers, which participate in hostile actions against her or support such, and is of the opinion that the said Conference ought to be composed of representatives of Russia and of the leading Powers of the Entente. The Russian Soviet Government agree that this Conference should be called together in London. It makes known, at the same time, to the British Government that orders had been given to the military command to meet the Polish parlementaires and to begin with pourparlers relative to armistice and peace. The Russian Soviet Government cannot refrain from expressing its astonishment in view of the demand of the British Government to suspend the trade negotiations after the adoption by the Soviet Government of all its proposals, which were the conditions for the opening of these negotiations, seeing that none of the said proposals has been violated by the Soviet Government. The latter thinks that the establishment of durable peaceful and friendly relations will be extremely difficult if agreements once adopted are violated on the following day or left unheeded or if conditions already accepted are, after the adoptions of agreement supplemented by new and unexpected conditions not stipulated before. The Soviet Government expresses the hope that the British Government will henceforth adhere immutably to the principles laid down in the British memorandum of 1st July and in the reply of the Soviet Government of 7th July, and will in future abstain from any violations of this agreement or from adding to the latter new conditions not provided for therein. The Russian Government on its part, strictly adhering to its declarations as laid down in its Note of 17th July, expects that before the beginning of the above Conference the surrender of ex-General Wrangel and of his military forces will be carried through on the condition of securing personal safety to him, his adherents and the fugitives under his protection, and of the transfer to the Soviet power of all the war material stores, means of communications, and vessels now in his hands.
May I ask whether the negotiations with the Trade Commission from Russia will be re-opened, and whether the new condition laid down by the Government will be withdrawn?
What does the right hon. Gentleman mean by the phrase, "powers that have been engaged in hostilities against the Soviet Government"?
That is not our phrase. It is M. Tchitcherin's phrase, and I am afraid my hon. and gallant Friend must look to another quarter for a reply to that question. I am not quite sure what was meant by the question of the hon. Member for Wednesbury.
I understood that in connection with the negotiations for trade with Russia, and with M. Krassin the Government introduced a new condition appertaining to an Armistice between Poland and Russia, and as a consequence the negotiations were cut off. What I want to know is, seeing that an agreement has been reached for an Armistice, will the trade negotiations be resumed?
His Majesty's Government introduced no new condition, but they felt it would be undesirable that the Soviet delegates should come over here if Russia were advancing into ethnographical Poland and waging war upon the liberties and independence of that country. In that case we certainly felt we could not have these delegates here. That was not a new condition introduced by us. It was a new set of circumstances introduced by somebody else, and we had to adapt ourselves to them. Now that the Russian Government have agreed to an Armistice we can withdraw our objection.
Has not my right hon. Friend seen the statement of M. Litvinoff in which he refers to the introduction of this new condition and complains seriously about it?
I have seen no statement by M. Litvinoff. M. Tchitcherin did refer to it, and the answer given to the House to-day deals with it. We certainly could not receive delegates from the Russian Government if they were marching upon Poland with a view to the destruction of its liberties. It was in the interests of everybody that we should stop them at once rather than send them back when they arrived here. Now I trust it will be quite unnecessary to take that step. Of course, negotiations are proceeding at this moment for an Armistice. I am hopeful of peace. That is what the world wants.
Is it a condition precedent to receiving the Soviet delegates here that all British prisoners in Russia should be released?
I am not sure that all have not been released. That has been dealt with in a question put by my hon. Friend to the Leader of the House. The question is not so easy of solution as seems to be imagined. Baku is in the Republic of Azerbaijam, an independent Republic. To what extent the Soviet Government are controlling it I have no information. But for the moment these men are imprisoned by the Azerbaijam Republic and not by the Moscow Government.
Are there no prisoners in Russia?
Perhaps hon. Members will put any further questions down.
Galician-Polish Frontier
asked the Prime Minister whether he will consult in some way, before coming to conclusions as to the Galician-Polish frontier, the national Ukranian government legally elected in 1918 by the whole population of Eastern Galicia under the presidency of Dr. Eugen Petroussewytch, now in Vienna?
The suggestion of the hon. and gallant Member will be borne in mind.
asked the Prime Minister whether, by the provisions of the Covenant of the League of Nations, the British nation is bound to make war on behalf of the Polish nation if war is made upon the latter nation by a third nation?
I would refer the hon. Member to the terms of the Covenant of the League of Nations, Article 10 of which lays down the obligations of the members of the League in this respect. These obligations do not necessarily include entry into war.
Peace Treaties
Reparations (Geneva Conference)
asked the Prime Minister when the Conference at Geneva to deal with reparations will take place, and who will represent Great Britain at that Conference?
The date has not yet been fixed. Great Britain will probably be represented by the Chancellor of the Exchequer and the Minister without Portfolio.
Notes to Germany
asked the Prime Minister whether he will publish all the notes and protocols to Germany with regard to the execution of the Treaty of Versailles, together with the replies of the German Government?
I will consider the question. The hon. Member must not, however, expect immediate action, as it will be necessary in the first place to obtain the consent of the several Allied Governments who were parties to the despatch of these Notes.
I suppose the right hon. Gentleman means when this can be done?
If all the other Powers consent to it. We cannot publish documents affecting other Powers without their consent.
Coal Deliveries (Germany)
asked the Prime Minister whether the Spa Conference in reducing the monthly deliveries of coal by Germany decided that deliveries not made were to be canclled or postponed?
The German coal deliveries under the Treaty for the six months beginning 1st August have been fixed by the Reparation Commission at 2,000,000 tons a month. These deliveries, if carried out, will satisfy the obligation of Germany to deliver coal under Annex 5 of Part 8 of the Treaty for that period.
asked the Prime Minister whether the question of the reduction of the coal deliveries by Germany was one upon which, in terms of the Treaty, the Reparations Commission is required to be unanimous; and, if so, whether the Commission was unanimous in its view that the monthly coal deliveries should be reduced?
The question whether unanimity is required in regard to any particular decision by the Reparation Commission is, subject to the provisions of the Treaty, one for the Reparation Commission itself to decide in each case, and the Commission, in communicating its decisions to the Allied Governments, does not necessarily communicate the procedure by which they are arrived at. In the present case, however, I am given to understand that, while the question was not regarded as one which, under the provisions of the Treaty, requires a unanimous decision, the decision was, in point of fact, a unanimous one.
asked the Prime Minister whether the Reparations Commission notified the interested Powers of Germany's default in respect of coal deliveries, and made recommendations as to the action to be taken in consequence of such default, in terms of paragraph 17 of Annex II to Part VIII of the Treaty of Versailles; and, if recommendations were made, whether he can state the nature of these recommendations?
The Reparation Commission notified the default in question without making any recommendations as to the action to be taken.
Reparation Claims Department
asked the President of the Board of Trade why the procedure to be followed under Article 297 of the Treaty of Peace has not yet been settled; why forms upon which full particulars of reparation claims covered by Article 297 are not yet ready for issue; and whether, in the interests of economy, he will speed up the British and/or German and/or other national authorities to come to a decision, notwithstanding the fact that the expenses of the large staffs and offices of the Reparation Claims Department are in part, if not in whole, defrayed by British creditors?
Under the provisions of the Treaty of Versailles the procedure under Article 297 of the Treaty has to be settled by the Mixed Arbitral Tribunal, which, unfortunately, is not yet established. I am doing all in my power to have the establishment of this Tribunal expedited, and as soon as it is set up, the forms, which are already in draft, will be submitted for its approval and be issued without delay. The expenses of the staff and offices of the Reparation Claims Department are not defrayed either in whole or in part by British creditors as such, but will be met from public funds.
Questions
Samoa (Chinese Labour)
asked the Prime Minister whether he will lay upon the Table the correspondence between the Imperial and New Zealand Governments as to the indenturing of Chinese coolies in Samoa?
I can only refer to my reply to an identical question on 21st July.
When will my hon. Friend be able to give me a definite reply; when does he expect a reply from the New Zealand Government?
I cannot give a date, but I imagine that the New Zealand Government will reply as soon as possible.
I will repeat the question on Monday next.
Government Departments (Expenditure)
asked the Prime Minister if the Government would afford every facility to a committee consisting of business men and accountants, whose expenses would be borne by private funds, to examine into the cost of the operating of Government Departments, particularly in view of the fact that the taxpayer is not satisfied that he is getting value for that for which he pays, and such a committee would be able to render to the taxpayers as a whole an unbiassed report as to Government expenditure?
I think it desirable to await the findings of the Special Investigation Committees which have recently been set. up before considering the feasibility of the suggestion in the question.
Hungary
asked the Prime Minister whether Hungary, which up to the time of the late War had maintained close friendship with this country, has offered military assistance in the event of the Russian Communist Government persisting in a- policy of aggression to our Allies; and will the help that Hungary can give be accepted?
I am unaware that any such offer has been made.
Agriculture Bill
asked when the Report stage of the Agriculture Bill will be taken?
I am afraid that it will not be possible to take it before the adjournment.
Ministry of Food (Continuance) [Salaries and Expenses]
Committee to consider of authorising the payment, out of moneys provided by Parliament, of any salaries or expenses payable or incurred under any Act of the present Session to continue temporarily the office of Food Controller, and for purposes in connection therewith (King's Recommendation signified), To-morrow.—[ Lord Edmund Talbot. ]
Selection (Standing Committees)
Standing Committee A
Sir SAMUEL ROBERTS reported from the Committee of Selection; That they had discharged the following Member from Standing Committee A: Lieut.-Commander Hilton Young; and had appointed in substitution: Mr. Gregory.
Standing Committee B
Sir SAMUEL ROBERTS further reported from the Committee; That they had discharged the following Member from Standing Committee B: Mr. Gardiner; and had appointed in substitution: Major Godfrey Palmer.
Standing Committee C
Sir SAMUEL ROBERTS further reported from the Committee; That they had discharged the following Members from Standing Committee C: Commander King and Sir Hallewell Rogers; and had appointed in substitution: Captain Ainsworth and Sir Stuart Coats.
Standing Committee D
Sir SAMUEL ROBERTS further reported from the Committee; That they had discharged the following Members from Standing Committee D: Mr. Briggs and Mr. Sugden; and had appointed in substitution: Mr. Lort-Williams and Sir Charles Sykes.
Sir SAMUEL ROBERTS further reported from the Committee: That they had discharged the following Member from Standing Committee D (added in respect of the Trade Union Ballot Bill): Dr. Macnamara; and had appointed in substitution: Sir Montague Barlow.
Standing Committee E
Sir SAMUEL ROBERTS further reported from the Committee; That they had discharged the following Member from Standing Committee E: the Solicitor-General for Scotland; and had appointed in substitution: Sir Arthur Griffith-Boscawen.
Standing Committee B
Sir SAMUEL ROBERTS further reported from the Committee; That they had added the following Thirteen Members to Standing Committee B (in respect of the Resident Magistrates (Ireland) Bill): the Attorney-General for Ireland, Sir Robert Balfour, Mr. Barrand, Mr. Charles Barrie, Mr. James Bell, Captain Wedgwood Benn, Mr. Alfred Davies, Mr. Donald, Mr. Harbison, Major O'Neill, the Solicitor-General for Ireland, Mr. M'Guffin, and Sir Maurice Dockrell.
Sir SAMUEL ROBERTS further reported from the Committee; That they had added the following Fifteen Members to Standing Committee B (in respect of the Pensions Increase Bill): Sir John Baird, Sir Arthur Shirley Benn, Mr. Cowan, Colonel Greig, Mr. Holmes, Sir Clement Kinloch-Cooke, Mr. Macpherson, Mr. Mills, Lieut.-Colonel Morden, Mr. Munro, Sir James Remnant, Mr. Sexton, the Solicitor-General, Mr. Tyson Wilson, and Sir Laming Worthington-Evans.
Standing Committee D
Sir SAMUEL ROBERTS further reported from the Committee; That they had added the following Ten Members to Standing Committee D (in respect of the Protection of Animals Act (1911) Amendment Bill): Sir John Baird, Colonel Burn, Sir John Butcher, Mr. Finney, Mr. Gilbert, Lieut.-Colonel Arthur Murray, Sir Robert Newman, Mr. Newbould, Mr. Tootill, and Sir Alfred Yeo.
Standing Committee E
Sir SAMUEL ROBERTS further reported from the Committee; That they had added the following fifteen Members to Standing Committee E (in respect of the Ministry of Food (Continuance) Bill): Sir Ryland Adkins, Lieut.-Colonel Courthope, Mr. Robinson Graham, Mr. Frederick Hall, Mr. Hogge, Mr. Lyle, Mr. Mitchell, Mr. McCurdy, Sir William Mitchell-Thomson, Mr. Munro, Mr. Remer, Mr. John Robertson, the Solicitor-General for Scotland, Mr. Strauss, and Sir George Younger.
Scottish Standing Committee E
Sir SAMUEL ROBERTS further reported from the Committee; That they had added the following Ten Members to the Standing Committee on Scottish Bills (in respect of the Merchant Shipping. (Scottish Fishing Boats) Bill and the Public Libraries (Scotland) Bill): Mr. Bridgeman, Mr. Broad, Lieutenants Colonel Burgoyne, Sir William Davison, Captain Martin, Mr. Morris, Major Watts Morgan, Mr. George Thorne, Mr. Tillett, and Colonel Leslie Wilson.
Reports to lie upon the Table.
Orders of the Day
Finance Bill
As amended, considered.
NEW CLAUSE.—(Amendment of Section 45 of 10 Edw. VII., c. 8.)
Section forty-five of the Finance (1909–10) Act, 1910 (which provides for the reduction of licence duty in the case of hotels and restaurants);, shall have effect as respects any licence granted for the year commencing on the twenty-ninth day of May, nineteen hundred and twenty, or for a year commencing on any later date, as if for the words "two-fifths" and "one-third," in Subsection (1) thereof, there were, respectively, substituted the words "three-fifths" and "one-half."—[ Mr. Chamberlain. ]
Brought up, and read the First time.
I beg to move," That the Clause be read a Second time."
This Clause is introduced in pursuance of a promise which I made during the Committee stage of the Bill, and I think it does no more than justice to the interests concerned. When the Licence Duties were raised, in the Budget of 1909–10, to a figure very much in excess of anything which existed before, a provision was made for granting relief to those licensed houses in the case of which refreshments played a large part in the receipts, and, I may add, also in the expenses. The Finance Act of 1914 increased the Beer Duty by gradual stages, and the Finance Act of 1915 increased the proportion which the receipts from the sale of liquor might bear to the total receipts without sacrificing the relief. This was done in order that the establishments in question might not suffer because the proportion of their receipts from the sale of liquor was increased, not by reason of increased sales of liquor, but by reason of increased taxation. Since that time nothing more has been done. The maximum to which the Beer Duty was raised by the Act of 1914 only took effect on the 1st April, 1917, and was 25s. per standard barrel. It is now 100s. per standard barrel. The spirit duties also have been raised, both last year and this, and this year the wine duties are raised as well. Accordingly, if no alteration were made in the proportion, the result would be to deprive those establishments of the relief which Parliament intended that they should have—not because they have ceased to merit that relief, but because we have, by our taxation proposals, raised the cost of the liquor sold. I know that the hon. Member for Consett (Mr. A. Williams) was anxious lest we should, possibly, be giving more relief to these establishments than they had before the War, owing to the fact that, while liquor has increased in price owing to taxation, other goods have increased in cost owing to the general rise in prices. That is so, but liquor has increased out of all proportion to articles of food, and I am advised that the proposal embodied in this Clause is not likely to give to any establishment relief which it would not have obtained under the original conditions if all things had remained the same, but that it will prevent establishments which would have got that relief at that time from being deprived of it by what I may call, from this point of view, the accident of increased taxation of the liquor which they are selling, and the corresponding increase in its price.
I do not know that I thoroughly understand this Clause, but may I ask whether it does not impose a charge?
No, it does not impose a charge.
I am much obliged to the right hon. Gentleman for having taken into consideration the point which I raised. I can assure him that I raised it in no contentious spirit, nor from any feeling of hostility to the people who carry on these hotels and restaurants. I only desired that all the circumstances of the case should be taken into consideration. The Chancellor of the Exchequer assures us that that has been done, and I do not desire to raise any opposition to the Clause.
Question put, and agreed to.
Clause read a Second time, and added to the Bill.
Mr. Locker-Lampson.
On a point of Order. In the exercise of your discretion, Mr. Speaker, you have passed over some Amendments standing in the names of some of my hon. Friends, one of which seeks to repeal Imperial preference, and another to make the preference not applicable to mandated territory. I quite agree that these matters were debated at adequate length during the Committee stage, but I should like to ask whether, although it would not be proper to debate these Motions, you would allow us, at any rate, to take a division on them?
If I put the question from the Chair, I could not guarantee that there would be no debate. That is my position.
With regard to that, I do not remember any occasion on which, when an understanding has been arrived at between the Chair and hon. Members of this House, it has been really departed from; and, as we attach considerable importance to every legitimate Parliamentary opportunity of registering our belief in connection with these matters, I hope that you will allow us to take a division.
I should look very foolish if, after I had put the question, someone rose and proceeded to debate it. Can the right hon. Gentleman speak for the whole of the Opposition, including the Labour party?
NEW CLAUSE.—(Exemption in respect of income from scholarships.)
(1) Income arising from a scholarship held by a person receiving full-time instruction at a university, college, school, or other educational establishment, shall be exempt from income tax (including super-tax), and no account shall be taken of any such income in computing the amount of income for the purposes of the Income Tax Acts.
(2) In this Section the expression" scholarship" includes an exhibition, bursary, or any other similar educational endowment.
(3) If any question arises whether any income is income arising from a scholarship held as aforesaid, the Commissioners of Inland Revenue may, on the request of the Income Tax Commissioners concerned, consult the Board of Education.
In the application of this Sub-section to Scotland and Ireland, the Scottish Education Department and the Lord Lieutenant, respectively, shall be substituted for the Board of Education.—[ Mr. G. Locker-Lampson. ]
Brought up, and read the First time.
I beg to move," That the Clause be read a Second time."
In Committee on this Bill, I ventured to put down an Amendment upon which the Chancellor of the Exchequer intimated that he would look favourably, but which was not in proper drafting form. Since then I have had the help of the Government draftsman, and, accordingly, I have put down this new Clause in its present form. The object is to exempt that from the provisions of the Income Tax Acts the income from educational endowments and scholarships. I think that everyone in this House will agree that it is most advisable to do what we can to encourage educational endowments of this description If they are taxed, it not only discourages a possible donor from giving the income, but it also more or less discourages competitors from attempting to obtain the scholarships. Under this Clause, England, Ireland, Scotland and Wales are all benefited—it applies to the whole of the United Kingdom. The Clause also contains the safeguard that, if the Education Department does not consider that the income is properly educational income, it may report to that effect to the Treasury, in which case Income Tax will be charged. Moreover, it only applies to full-time scholars, who spend their whole time in making use of the particular educational endowment in question. As the Government have intimated that they look favourably upon the Clause, I do not think I need further take up the time of the House with regard to it.
I beg to second the Motion.
The sense of the Committee was in favour of this Clause. It seems to me to be a reasonable concession to make, and I am glad to accept it.
Question put, and agreed to.
Clause read a Second time, and added to the Bill.
NEW CLAUSE.—(Amendment of 57 and 58 Vic, c. 30, s. 35.)
Section thirty-five of The Finance Act, 1894, shall be read as if in Sub-sections ( a ) and ( b ) thereof in lieu of the words "one eighth" and "one-sixth," there were respectively inserted the words "one-sixth" and "one-fourth."—[ Mr. Cautley. ]
Brought up, and read the First time.
I beg to move, "That the Clause be read a Second time."
As the House is aware, in fixing the assessment for property tax under what is known as Schedule A, the Act provides that from the gross rental a deduction shall be made for maintenance, repairs, and insurance, amounting to one-eighth of the gross rental in the case of land and farm buildings, and to one-sixth of the gross rental in the case of house property. Those deductions were arranged with the object of arriving at an average net rental, representing the net income which the owner derived from the property, and upon which he should pay Income Tax. It was a rough and ready method, but it really achieved its object, taking the average of a number of years. These deductions were fixed, however, as long ago as 1894, and it is almost unnecessary to point out that, during the last few years the cost of repairs and maintenance has enormously increased. I do not suppose I shall be far wrong if I state that to-day the cost of repairs shows an increase of 200 per cent. as compared with what it was before the War, or certainly with what it was in 1894. The rents are for the most part restricted, or, at any rate, have not gone up in anything like the same proportion. It therefore follows that, if the figures of one-eighth and one-sixth were correct in 1894 and up to the date of the War, they are absolutely insufficient at the present moment, and the argument in favour of the increased allowance which I propose in this Clause is practically unanswerable.
I raised this question last year, and, although the Chancellor met me in a way which is very suitable to large property owners, he in no way met the difficulty of the small property owners, who are really the people for whom I speak. The Chancellor of the Exchequer made the concession last year that, under Rule No. 8 of Schedule A, the owner of property should be able to recover Income Tax on the average cost of repairs and maintenance over a period of five years. That had been granted before last year only in respect of properties of a gross annual value of £12, that is to say, in respect only of very small houses. The Chancellor of the Exchequer last year met me, on a similar Clause which I then moved, by extending the deduction to large property owners and increasing the figure of £12 to the figures then laid down by the Rent Restriction Act. This year, in Committee, he accepted an Amendment further increasing the figures to the rentals fixed by the last Rent Restriction Act, which was passed this Session. It follows, accordingly, that people who own houses in London up to a rental of £105 a year, and in the country up to a rental of £78 a year, can recover any over-payments of Income Tax which they have made after deducting the cost of all the repairs and maintenance which they have incurred over an average of all their property for five years. To that extent, therefore, the large property owners have no grievance under the present Act. They pay, in effect, upon their net rental, which is as it should be. In the case of a populous part of the country with which I am acquainted, however, leasehold is almost unknown, all the property is freehold, and the land is divided up among a large number of small property owners. None of these people have estate agents or clerks to keep these accounts, and cannot possibly prepare a return showing what the house has cost in repairs for the last five years, and the result is that every wear these people are called upon to pay Income Tax on a net revenue which they have never received. It is a gross hardship. People feel it. I do not think the Chancellor of the Exchequer would lose very much if he were to agree to the Clause. There is no logical answer to it, and I cannot believe the House wishes these smaller people to pay taxes on amounts that they never receive. May I give one further illustration which occurred to a neighbour of mine yesterday? A man had a cottage of the rental value of 3s. a week. He painted the outside of it, and the bill for painting, which is only one item of repairs, was £20. I think it was a larger cottage than the ordinary one, but as a rule you cannot get an ordinary workman's cottage painted for under £10, and yet for a house of 4s. or 5s. a week all you are allowed to deduct from the gross rent is one-sixth. On all this class of property the owner is being mulcted and compelled to pay tax on what he has not received. The only effect is that it penalises the good landlord. It is no answer to say the tax ought not to be allowed unless the money is spent in repairs. This is an average for repairs, and this money must be spent, on the average, to keep the property in such condition as to produce the rent.
I beg to second the Motion.
My hon. Friend illustrated his speech by a case which does not support the Clause he has put down, and he used an argument which I think only expressed a part of the truth. I will deal with the argument first. It is within the knowledge of us all that the expense of any given repairs has gone up, as unfortunately, the expense of everything has gone up in recent years, but it is also within the knowledge of most of us that within the area allowed by law, rents are raised to meet these new conditions. There are cases where rents, and the value of land and buildings have risen, and accordingly the flat rate is not a percentage of the same value where the value is open and unrestricted by Statute as it was before the War, but of the new value which confronts us now. With that preliminary observation, may I put before the House what the present law is. There are two forms of allowance which may be claimed. Normally there is an allowance of one-sixth of the annual value in the case of house property, and one-eighth of the annual value in the case of land, including farmhouses and other buildings, irrespective of whether there has been any actual outlay or not. Then in addition to that there is in the case of land, including farmhouses and other buildings, and of houses within the limit of the Bent Restriction Bill as proposed to be amended this Session, the right given to an owner who can show that on an average over the preceding five years, his expenditure on maintenance, repairs, insurance, and management has exceeded the allowance to which he would have been entitled under normal procedure, to claim repayment of Income Tax, Schedule A, on the whole of that excess. I do not quite understand the grudging reception which my hon. Friend gave to the concessions which I have made. It seems to me, as far as smaller property is concerned, that meets their case. Part of the case is that at present the properties are largely out of repair because they could not be repaired during the War, but all through the War they drew their allowance whether they were keeping their properties in repair or not, and therefore they had that money accumulated for the purpose of the abnormal repairs which have also accumulated. In the case therefore of all the rents which are regulated by Statute, they can recover the actual expenditure on an average of five years.
My hon. Friend says they cannot keep their accounts. I think it is not too much to ask that they should keep not very complicated accounts which are necessary for this purpose if they want to claim that relief. After all we put some pressure on the farmer to keep accounts and why are we to legislate for people on the assumption that they are too ignorant or too idle to keep all the accounts that are necessary in order to prove their claim to have actually expended money on repairs. I really think that is not a good claim. We have a right to ask that they should give evidence that they have actually paid away the sums in respect of which they claim relief before we give the relief. That relief covers the case of the cottage which my hon. Friend mentioned where the painting swallowed up two years' rent. The owner of the cottage will be entitled to that relief. Further, no flat rate, in times when all values and expenses are fluctuating, can in itself meet all the cases he has in mind. The flat rate relief would be too little in one case and too much in another. It is only by the production of accounts, by showing what has actually been expended, that you can exactly adjust the relief to the actual labour which it involves. My hon. Friend is probably already aware that the Income Tax Commission made a report upon the subject. Their recommendations are rather elaborate and I could not deal with them in this Bill. I must consider them with the other proposals which will be dealt with in the Revenue Bill. I think the report bears out my contention that it is difficult to arrange for a permanent basis by means of a flat rate in a moment of fluctuating and uncertain values like the present. I have given further relief in respect of the lower classes of property by reason of extending the relief I gave in answer to my hon. Friend's appeal last year to the limits of the new Rent Restriction Bill and I am afraid that is as far as I can see my way to go at present and I cannot accept the Clause.
I am sorry the right hon. Gentleman has not seen his way to accept this reasonable Clause. I think the hon. Member proved his case. If you take a house at £20 a year, your allowance will be £3 6s. 8d., and for five years the arrears will come to some £16 10s. Here is a house which cost £20 to paint alone, and it is just the same all the way round.
Does the hon. Member realise that that is met by the provision that if the owner of a house of an annual value not exceeding £105 in the Metropolitan police district, £60 in Scotland and £52 elsewhere, can show that his average for the preceding five years exceeds his allowance, he can have the full amount allowed?
I am going to deal with that. Where a man has a number of houses, he, has very little difficulty in dealing with them, but where he has only one or two, and a great many of these small people have two or three houses, they are the people the hon. Member is anxious to relieve, and I think they are the people who should be relieved. They are the people who have been suffering very badly during the whole period of the War, and this would give them immediate relief instead of producing their accounts, for five years. There is no doubt that at present the Income Tax people have a great source of income from these people because they do not know how to get it back. This would be one of the methods of meeting that and I appeal to the right hon. Gentleman to consider whether some relief like this should not be given. Where people have large estates, if they do not look after their accounts they ought to be made to. I tried to move this Amendment to the Housing and Town Planning Bill, but I was ruled out of order, and I was only too delighted to see that the hon. Member had taken the question up because it presses very hardly upon small householders. I sincerely hope the right hon. Gentleman will not steel his heart quite so much. I do not think it will affect the result of the Budget very much, but it will give relief to people who own their own houses and one or two others, and who have had an extremely bad time lately, and I think they should be considered. When the Rent Restriction Bill was before the House I had hundreds of letters on this point from people whose repairs were costing them an enormous sum. I know something about repairs, and I can bear out what the hon. Member has said. They are costing, not 200 per cent. but from 300 to 500 per cent. more than they did. Nearly all of it is labour. Wages have gone up from 150 per cent. to 300 per cent., and in addition you have the smaller output and the shorter hours, which add very considerably to the cost. If the Chancellor of the Exchequer could see his way to meet it half way it would be better than not to meet it at all.
I regret that the Chancellor of the Exchequer did not——
I would remind the hon. and learned Member that he has exhausted his right to speak. I thought he had risen to ask leave to withdraw the Clause.
I was under the impression that I had a right to make a second speech. I hope the Chancellor of the Exchequer in his Revenue Bill will take some such steps as I suggest. Under the circumstances I beg leave to withdraw the Clause.
Motion and Clause, by leave, withdrawn.
NEW CLAUSE.—(Continuation of Relief.)
The following Sections of The Income Tax Act, 1918, are hereby continued in force as respects the year 1920–21, that is to say:-
Section of Act. Subject-matter. 43 Relief in respect of diminution of profits or gains due to the war. 44 Relief where income of year falls short of assessed income by more than 10 per cent. [ Mr. Holmes. ]]
Brought up, and read the First time.
I beg to move, "That the Clause be read a Second time."
This deals with two very important reliefs which have been given to Income Tax payers for some years. Both of them were revivals during the War of concessions which were once given but which had been abolished some years before the War. Section 43 of the Income Tax Act, 1918, which the Chancellor of the Exchequer proposes not to re-enact this year may be summarised as follows:—That any person, firm or company whose profits are reduced owing to circumstances attributed directly or indirectly to the War can claim to be charged on the average of the three years ending with the year of the assessment instead of on the average of the previous three years, the proviso being that the amount of the new assessment shall never be less than the profits of the current year. Assuming that a firm makes up its accounts on the 31st December in each year, for the current Income Tax year 1920/21 it will be assessed on the average of the previous three years 1917/18/19, but when the end of 1920 comes that firm if it chooses will have the right of reassessment on the profits of 1918/19/20, the proviso being that the fresh assessment must not be less than the profits for the year 1920. That is a very important relief to the Income Tax payer. It does not give him the right to pay on his actual income, but it brings him nearer to his current year's profit than the more obsolete three years' average does.
Clause 44 of the Income Tax Act, 1918, does not apply to a company or a firm but to an individual. It says that if any individual, who has been assessed or charged to tax for any year of assessment claims and proves that his actual income from all sources for that year is less by more than 10 per cent. than the income on which he has been assessed and charged, that is, on the three years' average, he is entitled to be charged on his actual income and to obtain repayment of the difference. The fairness of that hardly needs to be advocated. It applies to the salaried man employed by private firms, the small trader and so on. It merely indicates that if any individual's income is 10 per cent. less than the income on which he has been assessed on the three years' average he has a right to pay on his actual income. This was discussed on the Committee stage and the Chancellor of the Exchequer replied that he wanted to get rid of all these reliefs. If he had already adopted the recommendations of the Income Tax Commission that the three years' average should be done away with, I could understand getting rid of all the reliefs; obviously these reliefs would no longer be required, but as he is still continuing the three years' average, then in all fairness he should continue the reliefs that have been granted under those rules. When he increased the Excess Profits Duty from 40 per cent. to 60 per cent., he put forward as his reason for doing it that the War was not over really—that people who were making profits at the present time were making them as much as the result of the War as if they had made them in 1916–17. If the right hon. Gentleman is sound in his argument, then in the same way any person who still suffers a diminution of income owing to circumstances directly or indirectly attributable to the War, should have the same reliefs which a man obtained during the period 1914–19. It is impossible for the Chancellor of the Exchequer to ride on two horses at the same time. If he says the War is not over so far as finance is concerned, then he should continue the reliefs which were given owing to circumstances attributable to war. If, on the other hand, he says the War is over, then he has no case for continuing the Excess Profits Duty of 60 per cent.
I beg to second the Motion.
I should like to emphasise the remarks of my hon. Friend as regards Section 44 of the Income Tax Act, 1918. This is an old Section, which was in existence until the right hon. Gentleman (Mr. Asquith) repealed it in 1907. If it was right then it is certainly right now, when the Income Tax is such an enormous burden. One of my right hon. Friend's successors (Mr. McKenna) reintroduced it in 1915, but he did not give the full abatement which was originally given, because the relief that he gave enacted that the profits must have decreased by more than 10 per cent. before a person could obtain any relief. I can see no earthly reason for refusing to give this relief at the present time. Taxation, instead of being reduced now that the War is over, is even higher, or certainly as high. It is higher than it? was at the beginning of the War, and it cannot be maintained that it is just to charge a man Income Tax on income which he has never received. I could quite understand why on the Committee stage my right hon. Friend refused to accept this Amendment. He allowed the Schedule to be amended in order to repeal these two Sections. It appears now that it is necessary to re-enact them, and I trust that he will allow them to be re-enacted. It is only a question of justice, and even if it does cost the Exchequer something, the Exchequer ought not to mind that when there is the question of justice to be considered. It cannot possibly be held that it is right to charge a man 6s. Income Tax on income which he has never received. I should have preferred that we had gone back to the old custom, that where a man found that his income was less than that which he had returned, he should be entitled to a rebate. The Chancellor of the Exchequer is going to get 10 per cent. in any case. Therefore we cannot very well refuse to accept the modest proposal and to allow that which has been law for the last three or four years to continue.
My right hon. Friend (Sir F. Banbury) has, I think, fallen into error in confusing the history and the effect of the two Sections in question. Section 43 of the Income Tax Act of 1918 re-enacts Sections 13 of the Act of 1914, which itself was a revival of Section 133 of the Income Tax Act of earlier years. That Section was deliberately repealed by my right hon. Friend the Member for Paisley (Mr. Asquith) on the Report of a Committee which I appointed in 1915. That Committee was composed of Lord Ritchie, Sir Henry Primrose, Mr. Sydney Buxton (now Lord Buxton), Mr. Cosmo Bonsor, Mr. Arthur Murray, and Mr. William Gayler. The Committee in their Report pointed out that this Section gave a one sided option to the taxpayer and did not give a corresponding option to the Revenue. Accordingly, whenever the three years' average worked out to the disadvantage of the taxpayer he reopened it. He cut out what had been a prosperous year and introduced a bad year. When he had had a good year there was no counter option on the part of the Revenue authorities to strike out the bad year and to bring in the good year. The consequence was that the taxpayer with a fluctuating income could always count his bad years four times over and strike out one of his good years. That being so, the Committee unanimously recommended that that relief should be brought to an end.
Am I right in thinking that if a man made £5,000 in 1915, £6,000 in 1916, and £4,000 in 1918, and he had returned an average above that and got relief, he still would have had to return his actual income in the three years' average, and it would not make any difference to his return, because he always does return his actual income?
I do not know whether my right hon. Friend understands the question. I am unable to follow his argument. The point at issue is simple.
It does not touch the three years' average.
It does touch the three years' average. That is what I am trying to show my right hon. Friend. The effect of what he proposes is to give an option to the taxpayer to strike out a good year and to substitute a bad year, so that the bad year appears once too many and the good year once too few in the average. This option means to the taxpayer, "Heads I win, tales you lose," under which the taxpayer must always gain, while the Revenue will never get what is its due.
There is the proviso that the amount of the fresh assessment shall never be less than the current year's profits. You may substitute a bad year for a good year, but you can never reduce your assessment below the current year's profits. If a man takes advantage of this relief every year he will only pay out every year on his actual profit. In that way the Revenue will always get a tax on the full amount of the man's income.
5.0 P.M.
The section provides, broadly speaking, that where a taxpayer suffers a diminution of profit, which was owing to circumstances attributable directly or indirectly to the War, he should be entitled to have his assessment, which apart from that provision would normally be based on the average profits of the three preceding years, adjusted by the profits of three years, including the year of assessment. The taxpayer is thus enabled to bring into the average a year of low profits instead of an earlier year when profits were higher. That is the Section which it is now sought to restore. Section 44, which my right hon. Friend (Sir F. Banbury) thought was an old Section discontinued by my right hon. Friend the Member for Paisley (Mr. Asquith), was a new section introduced for the special circumstances occurring in the early years of the War. It was a relief connected with those special conditions, and I think the time has come when such special reliefs ought to be abandoned. I do not know whether the hon. Member who moved the new Clause suggests that when a state of war or the conditions of war have ceased, we are to revert in all respects to pre-War conditions. I think it would not be wise to revert to them in all respects, but that is no reason why we should not revert to them where it is obviously the right and natural thing to do.
I trust the Chancellor of the Exchequer will see his way to grant some concession in regard to Section 44 of the Income Tax Act, 1918. The removal of the application of that Section is most oppressive. The right hon. Gentleman has stated that while it was being continued in force it was, as regards the Treasury, a case of "Heads the taxpayers win; tails the Treasury loses." I do not think that is really the case, because when you get an exceptionally good year, which is followed by a bad year of profits, the exceptionally good year goes into the average, and in many cases is continued for a considerable period of time, and then only gives a relief for the one year in which there has been a heavy fall in profits. I do not think the new Clause should be dismissed in the manner in which the Chancellor of the Exchequer has dismissed it, and if the right hon. Gentleman does not see his way to grant some concession, I hope the matter will be pressed to a Division.
Question put, "That the Clause be read a Second time."
The House divided: Ayes, 41; Noes, 196.
Division No. 244.] AYES. [5.8 p.m. Asquith, Rt. Hon. Herbert Henry Hayward, Major Evan Rose, Frank H. Balfour, George (Hampstead) Higham, Charles Frederick Sitch, Charles H. Barnes, Major H. (Newcastle, E.) Hinds, John Steel, Major S. Strang Barrie, Charles Coupar Hogge, James Myles Swan, J. E. Bird, Sir A. (Wolverhampton, West) Irving, Dan Terrell, George (Wilts, Chippenham) Bowles, Colonel H. F. Kenworthy, Lieut.-Commander J. M. Tootill, Robert Bramsdon, Sir Thomas Kiley, James D. Waterson, A. E. Briant, Frank Knights, Capt. H. N. (C'berwell, N.) Wedgwood, Colonel J. C. Brown, James (Ayr and Bute) Lyle-Samuel, Alexander White, Charles F. (Derby, Western) Child, Brigadier-General Sir Hill Maclean, Neil (Glasgow, Govan) Williams, Aneurin (Durham, Consett) Davison, Sir W. H. (Kensington, S.) Maclean, Rt. Hn. Sir D. (Midlothian) Wilson, Capt. A. S. (Holderness) Ford, Patrick Johnston MacVeagh, Jeremiah Frece, Sir Walter de Marriott, John Arthur Ransome TELLERS FOR THE AYES. —— Galbraith, Samuel Nicholl, Commander Sir Edward Mr. Holmes and Sir F. Banbury. Gretton, Colonel John Pownall, Lieut.-Colonel Assheton
NOES. Adair, Rear-Admiral Thomas B. S. Burgoyne, Lieut.-Colonel A. H. Farquharson, Major A. C. Addison, Rt. Hon. Dr. C. Burn, Col. C. R. (Devon, Torquay) Fell, Sir Arthur Agg-Gardner, Sir James Tynte Butcher, Sir John George Fisher, Rt. Hon. Herbert A. L. Ainsworth, Captain Charles Campion, Lieut.-Colonel W. R. FitzRoy, Captain Hon. E. A. Amery, Lieut.-Col. Leopold C. M. S. Casey, T. W. Foreman, Henry Atkey, A. R. Cautley, Henry S. Forrest, Walter Baird, Sir John Lawrence Cayzer, Major Herbert Robin Gange, E. Stanley Baldwin, Rt. Hon. Stanley Chamberlain, Rt. Hn. J. A. (Birm., W,) Gardiner, James Barlow, Sir Montague Chamberlain, N. (Birm., Ladywood) Gibbs, Colonel George Abraham Barnett, Major R. W. Clough, Robert Glanville, Harold James Barrand, A. R. Coates, Major Sir Edward F. Gould, James C. Beckett, Hon. Gervase Coats, Sir Stuart Colliding, Rt. Hon. Sir Edward A. Bell, Lieut.-Col. W. C. H. (Devizes) Cobb, Sir Cyril Graham, W. (Edinburgh, Central) Bellairs, Commander Carlyon W. Cohen, Major J. Brunel Green, Albert (Derby) Benn, Sir A. S. (Plymouth, Drake) Colvin, Brig.-General Richard Beale Green, Joseph F. (Leicester, W.) Benn, Capt. Sir I. H., Bart. (Gr'nw'h) Conway, Sir W. Martin Greenwood, William (Stockport) Bethell, Sir John Henry Cowan, D. M. (Scottish Universities) Greig, Colonel James William Bigland, Alfred Craig, Captain C. C. (Antrim, South) Gritten, W. G. Howard Blades, Capt. Sir George Rowland Craig, Colonel Sir J. (Down, Mid) Hambro, Captain Angus Valdemar Blair, Reginald Curzon, Commander Viscount Henderson, Major V. L. (Tradeston) Blake, Sir Francis Douglas Dalziel, Sir D. (Lambeth, Brixton) Henry, Denis S. (Londonderry, S.) Berwick, Major G. O. Daiziel, Rt. Hon. Sir J. H. (Kirk'dy) Hewart, Rt. Hon. Sir Gordon Boscawen, Rt. Hon. Sir A. Griffith- Dawes, James Arthur Hoare, Lieut.-Colonel Sir S. J. G. Bowerman, Rt. Hon. Charles W. Duncannon, Viscount Hodge, Rt. Hon. John Bowyer, Captain G. E. W. Edgar, Clifford B. Hood, Joseph Boyd-Carpenter, Major A. Edwards, Major J. (Aberavon) Hope, James F. (Sheffield, Central) Breese, Major Charles E. Edwards, John H. (Glam., Neath) Hopkins, John W. W. Briggs, Harold Eyres-Monsell, Commander B. M. Howard, Major S. G. Buchanan, Lieut.-Colonel A. L. H. Falcon, Captain Michael Hunter-Weston, Lieut.-Gen. Sir A. G. Bull, Rt. Hon. Sir William James Falle, Major Sir Bertram G. Illingworth, Rt. Hon. A. H. Inskip, Thomas Walker H. Morrison, Hugh Seager, Sir William Jackson, Lieut. -Colonel Hon. F. S. Mosley, Oswald Seddon, J. A. James, Lieut. -Colonel Hon. Cuthbert Mount, William Arthur Shaw, William T. (Forfar) Jameson, J. Gordon Murchison, C. K. Short, Alfred (Wednesbury) Johnstone, Joseph Murray, Lieut.-Colonel A. (Aberdeen) Sprot, Colonel Sir Alexander Jones, Sir Edgar R. (Merthyr Tydvil) Murray, John (Leeds, West) Stanley, Major Hon. G. (Preston) Jones, J. T. (Carmarthen, Llanelly) Neal, Arthur Stewart, Gershom Joynson-Hicks, Sir William Newman, Colonel J. R. P. (Finchley) Strauss, Edward Anthony Kellaway, Rt. Hon. Fredk. George Nicholson, William G. (Petersfield) Sturrock, J. Leng Kenyon, Barnet Norris, Colonel Sir Henry G. Sutherland, Sir William Kerr-Smiley, Major Peter Kerr O'Neill, Major Hon. Robert W. H. Sykes, Colonel Sir A. J. (Knutsford) King, Commander Henry Douglas Ormsby-Gore, Captain Hon. W. Talbot, G. A. (Kernel Hempstead) Kinloch-Cooke, Sir Clement Palmer, Charles Frederick (Wrekin) Thomson, F. C. (Aberdeen, South) Lambert, Rt. Hon. George Palmer, Brigadier-General G. L. Tickler, Thomas George Law, Rt. Hon. A. B. (Glasgow, C.) Parker, James Waddington, R. Lewis, Rt. Hon. J. H. (Univ., Wales) Pennefather, De Fonblanque Walters, Rt. Hon. Sir John Tudor Lewis, T. A. (Glam., Pontypridd) Pilditch, Sir Philip Ward-Jackson, Major C. L. Lister, Sir R. Ashton Pollock, Sir Ernest M. Ward, Col. L. (Kingston-upon-Hull) Locker-Lampson, Com. O. (H'tingd'n) Pratt, John William Warren, Lieut.-Col. Sir Alfred H. Lorden, John William Preston, W. R. White, Lieut.-Col. G. D. (Southport) Loseby, Captain C. E. Prescott, Major W. H. Wignall, James M'Donald, Dr. Bouverie F. P. Pretyman, Rt. Hon. Ernest G. Williams, Lt.-Col. Sir R. (Banbury) Macdonald, Rt. Hon. John Murray Pulley, Charles Thornton Wills, Lieut.-Colonel Sir Gilbert Macmaster, Donald Purchase, H. G. Wilson, Daniel M. (Down, West) Macnamara, Rt. Hon. Dr. T. J. Raper, A. Baldwin Wilson, W. Tyson (Westhoughton) McNeill, Ronald (Kent, Canterbury) Rees, Sir J. D. (Nottingham, East) Winterton, Major Earl Macpherson, Rt. Hon. James I. Richardson, Alexander (Gravesend) Wood, Sir J. (Stalybridge & Hyde) Macquisten, F. A. Roberts, Rt. Hon. G. H. (Norwich) Yate, Colonel Charles Edward Magnus, Sir Philip Roberts, Sir S. (Sheffield, Ecclesall) Young, Lieut.-Com. E. H. (Norwich) Mallaby-Deeley, Harry Robinson, S. (Brecon and Radnor) Young, Sir Frederick W. (Swindon) Mallalieu, F. W. Rodger, A. K. Young, Robert (Lancaster, Newton) Malone, Major P. B. (Tottenham, S.) Roundell, Colonel R. F. Younger, Sir George Moison, Major John Elsdale Samuel, A. M. (Surrey, Farnham) Mond, Rt. Hon. Sir Alfred M. Samuel, Rt. Hon. Sir H. (Norwood) TELLERS FOR THE NOES. —— Moore-Brabazon, Lieut.-Col. J. T. C Sanders, Colonel Sir Robert A. Lord E. Talbot and Mr. Dudley Morris, Richard Scott, A. M. (Glasgow, Bridgeton) Ward.
NEW CLAUSE.—(Amendment of ss. (3) of s. 38 of 5 and 6 Geo. V., c. 89, with respect to Munitions Exchequer Payments.)
For the purposes of any claim to repayment or set-off under Sub-section (3) of Section thirty-eight of the principal Act (which provides for the repayment of Excess Profits Duty paid and for a set-off against Excess Profits Duty payable), any sum paid by the claimant by way of munitions exchequer payments shall be treated as though it were a sum paid by way of Excess Profits Duty.—[ Mr. Atkey. ]
Brought up, and read the First time.
I beg to move, "That the Clause be read a Second time."
This Clause is one which I moved in Committee in slightly different form. I understand the Government have accepted it in principle, and I therefore content myself with moving that it be read a Second time.
I accept this Clause on behalf of the Government.
Question put, and agreed to.
Clause read a Second time, and added to the Bill.
NEW CLAUSE.—(Decrease in Customs Duties on Sugar.)
In lieu of the present Customs duties, drawbacks, and allowance in respect of sugary molasses, glucose, and saccharin there shall, as from the twenty-second day of September, nineteen hundred and twenty, be charged, levied, and paid the duties specified in the first column of Part I. of the First Schedule to this Act and there shall be paid and allowed the drawbacks and allowance set out in Part II. of that Schedule.—[ Mr. Hogge. ]
Brought up, and read the First time.
I beg to move "That the Clause be read a Second time."
In Committee on the Finance Bill those of us who sit on the Opposition side of the House moved an Amendment dealing with the increased duties on tea and sugar, but we were, of course, defeated. The first of the two new Clauses which stands in my name deals with the decrease in Sugar Duty, and not with the increase, as stated in the margin. I propose for the convenience of the House, if you are agreeable, Mr. Deputy-Speaker, to take the whole discussion on this first new Clause. What we propose is to vary the duty on sugar, and, if hon. Members are interested in the method by which we propose doing this they will find it set out in the accompanying Schedule, which is page 1716 of the White Paper, and which, of course, has to read in connection with this new Clause. What we feel on this side of the House with regard to the Sugar Duty is that it is all the more serious in so far as sugar is so large a food as far as the welfare of the community is concerned. The present duty on sugar is nearly 3d. per lb.; it is, as a matter of fact, 2¾d., and we claim that this article of food is carrying much too large a margin of tax when it is raised to nearly 3d. per lb. The effect of the tax, of course, applies not only to food but to the raw materials of many industries of this country. So far as raw materials are concerned that, again, of course, has its effect upon other foods of the people, such as the large supplies of jams and jellies, which have recently gone up so much in price. The amount of the tax is, in that way, a very heavy burden, not only on the people who purchase their food, but also on the people who manufacture the food, and the consequent unemployment which arises from the lack of sufficient supplies of cheap sugar. With regard to food, what we suggest is the most serious aspect of the increase in the sugar duty is its effect upon the physique of the children. It is, as a matter of fact, well known to every Member of the House, one of the most important foods so far as the children of the country are concerned, and it does seem very strange when the Government on the one hand is concentrating its energies on a Ministry of Health, devoting so much of its time and much of the nation's money to improving the health of the community, that their financial proposals in the Budget should have entirely the opposite effect, one of a deleterious nature, upon the health of the children of the community. I suppose it is well enough known that, if you take the average family throughout the country to be five in number, that, at present, the sugar duty amounts to a tax of 30s. per year on that particular family, so that for that reason alone, for the manner in which it affects the poorer classes there is a case for the reduction of the sugar duty.
There is one interesting fact to be borne in mind, that even the ½ lb. ration of sugar which is now allowed to each person per week per family in the country is not taken up. There is a considerable amount of evidence to show that, owing to the fact that the charge for sugar is nearly 1s. 6d. per lb., in many cases this essential food for the younger members of the family cannot even be bought. Then there is the final reason, and that is the economic incidence of the tax on sugar today. I do not want to elaborate the arguments I used in Committee, but I would remind the Chancellor of the Exchequer, in a different manner, of what he has so far never taken any notice of what we think is a new fact in the incidence of taxation. He will remember that there are a large number of trades in the country in which the wages rise with the cost of living, and, if there is one contributing cause to that more than another, it is the case of sugar. I will remind the Chancellor of the Exchequer of what one of his own colleagues, speaking from that Bench, said. This is quite a modern quotation. The Minister of Food, speaking from the Front Bench on the 6th of May last, said: who pay it now on what they consume. I have tried to show that some people are so poor that they do not absorb the ½ lb. ration to which they are entitled at the moment. It does make things infinitely more difficult if when indirect taxation is raised, as it is in this case, the people to whom it is raised get increased wages, whereas the poorer people are left in the same condition, not only of having to pay an indirect tax on sugar, but of having to pay more for the articles they purchase from the workers whose wages are raised to meet the rise. These two Clauses, one dealing with Customs and the other Excise, in relation to the Schedule are put down in order to give the Chancellor of the Exchequer an opportunity of reducing the tax. The outcome of the Schedule would be that the Sugar Duty would be reduced to Id. in the lb We ask this (1) because sugar is a food, (2) because it is so essential to the poor classes of the community, and (3) because of the peculiar new incidence by which indirect taxation is met
I beg to second the Motion. I do not intend to repeat the arguments he has used. I should just like to touch on a fact which every Member of the House knows, that sugar is an essential food of the people, and that it is an essential factor in producing energy, and therefore a big factor in what people call out for in these times—production, and more production. I know personally that many families are not in a position even to buy the ration allowed for them by the Ministry of Food. Consequently, the members of that family must necessarily suffer through the diminution in the amount of sugar. Another fact not mentioned by my hon. Friend is that the richer people are able to obtain a great deal more than their ration of sugar by the fact that they can purchase sweets ad lib. and also uncontrolled sugar That is not the way with the poorer people. Many of them are bound to their rations, and many of them kept there. In the interests of the health and energy of the people and in the interests of production, I support the proposal.
I think it would be useless to appeal to the hon. Gentleman not to press this Amendment to a Division, and therefore I will not do so. I treat it as a kind of proposal which those in Opposition habitually make and those in office decline to accept. So long as our Budget discussions are continued, there will be Amendments on the present lines upon which the Opposition desire to take a Division. I content myself, therefore, by saying, in the first place, what would be the effect of the Amendment, and, at the same time, to say why I cannot accept it. It would reduce the yield of the duty in the present year by something like £10,000,000, and in a full year by £20,000,000. That is a sacrifice of revenue in respect of this particular tax which I cannot contemplate. I am not suggesting any increase in the tax, and the time has not come when I can accept a proposal for a reduction. The hon. Gentleman who moved used an argument which was put forward in Committee, and to which perhaps at that time I paid insufficient attention. He made the suggestion that since there are certain classes of wages which are now rated by reference to the cost of living, and since sugar is one of the important items in that cost, the price of sugar affects the wages, and that therefore we lose more by retaining the duty than we should gain otherwise by sacrificing it. That argument is one which would carry the hon. Gentleman and his Friends a very long way, as it is an equally good argument for continuing subsidies in the case of anything we now subsidise, and which affects the cost of living, or for introducing new subsidies in order to decrease the cost of living. The Government have not yet succeeded in bringing all subsidies to an end, but our policy has been to discontinue them as rapidly as we could, having regard to all the circumstances of the case, and surely we are right. Surely it is better that the cost of the article should be met by the individual consumer, and his means adjusted by the ordinary play of economic forces rather than that we should maintain an artificial assistance which prevents the play of those economic forces by subsidies from the State. The hon. Gentleman may say that I am speaking of subsidies, but the argument is just as relevant when you apply it to the remission of a tax. A tax may in itself be a good one or a bad one. It may be from the circumstances of the time, and, having regard to all the other taxes, fair or unfair. If it is the position of the Government that, having regard to all those circumstances, it is a fair tax, then to drop it on account of the argument which has been used is equivalent to giving a direct subsidy. I have no doubt that the high price of sugar and of other articles does affect the consumption of those articles by the very poor, but I am equally certain that at the present price more sugar would be bought if that sugar were available. What is much more important from the point of view of consumption than any change we can make is an increase in production to overtake the deficiency arising from the conditions of Central Europe and in Russia, and from the immensely increased consumption by the United States of America since that country went dry. All I can say, speaking purely in the interests of the sugar consumer, is that I trust no other country will go dry until the production of sugar has been very materially increased.
Question put," That the Clause be read a Second time."
The House divided: Ayes, 37; Noes, 201.
Division No. 245.] AYES. [5.37 p.m. Barnes, Major H. (Newcastle, E.) Holmes, J. Stanley Short, Alfred (Wednesbury) Bowerman, Rt. Hon. Charles W. Irving, Dan Sitch, Charles H. Bramsdon, Sir Thomas Kenworthy, Lieut.-Commander J. M. Swan, J. E. Briant, Frank Kenyon, Barnet Tootill, Robert Brown, James (Ayr and Bute) Kiley, James D. Waterson, A. E. Edwards, C. (Monmouth, Bedwellty) MacVeagh, Jeremiah White, Charles F. (Derby, Western) Edwards, John H. (Clam., Neath) Murray, Dr. D. (Inverness and Ross) Wignall, James Entwistle, Major C. F. Newbould, Alfred Ernest Williams, Aneurin (Durham, Consett) Galbraith, Samuel Raffan, Peter Wilson Wilson, W. Tyson (Westhoughton) Glanville, Harold James Richardson, R. (Houghton-le-Spring) Wood, Major M. M. (Aberdeen, C.) Graham, W. (Edinburgh, Central) Roberts, Rt. Hon. G. H. (Norwich) Young, Robert (Lancaster, Newton) Hayward, Major Evan Rose, Frank H. Hodge, Rt. Hon. John Sexton, James TELLERS FOR THE AYES. —— Mr. Hogge and Colonel Wedgwood.
NOES. Adair, Rear-Admiral Thomas B. S. Conway, Sir W. Martin Hunter, General Sir A. (Lancaster) Agg-Gardner, Sir James Tynte Coote, Colin Reith (Isle of Ely) Illingworth, Rt. Hon. A. H. Ainsworth, Captain Charles Courthope, Major George L. Jackson, Lieut.-Colonel Hon. F. S. Atkey, A. R. Cowan, D. M. (Scottish Universities) James, Lieut.-Colonel Hon. Cuthbert Baird, Sir John Lawrence Curzon, Commander Viscount Jameson, J. Gordon Baldwin, Rt. Hon. Stanley Davidson, Major-General Sir J. H. Johnstone, Joseph Balfour, George (Hampstead) Davison, Sir W. H. (Kensington, S.) Jones, Sir Edgar R. (Merthyr Tydvil) Banbury, Rt. Hon. Sir Frederick G. Duncannon, Viscount Jones, J. T. (Carmarthen, Llanelly) Barnett, Major R. W. Du Pre, Colonel William Baring Joynson-Hicks, Sir William Barrand, A. R. Edgar, Clifford B. Kellaway, Rt. Hon. Fredk. George Barrie, Charles Coupar Edwards, Major J. (Aberavon) Kerr-Smiley, Major Peter Kerr Beckett, Hon. Gervase Eyres-Monsell, Commander B. M. King, Commander Henry Douglas Bell, Lieut.-Col. W. C. H. (Devizes) Falcon, Captain Michael Kinloch-Cooke, Sir Clement Bellairs, Commander Carlyon W. Falle, Major Sir Bertram G. Knights, Capt. H. N. (C'berwell, N.) Benn, Sir A. S. (Plymouth, Drake) Fell, Sir Arthur Law, Rt. Hon. A. B. (Glasgow, C.) Benn, Capt. Sir I. H., Bart. (Gr'nw'h) FitzRoy, Captain Hon. E. A. Lewis, Rt. Hon. J. H. (Univ., Wales) Bennett, Thomas Jewell Ford, Patrick Johnston Lister, Sir R. Ashton Bigland, Alfred Foreman, Henry Locker-Lampson, Com. O. (H'tingd'n) Bird, Sir A. (Wolverhampton, West) Forrest, Walter Long, Rt. Hon. Walter Blades, Capt. Sir George Rowland Foxcroft, Captain Charles Talbot Lorden, John William Blair, Reginald Frece, Sir Walter de Loseby, Captain C. E. Blake, Sir Francis Douglas Gange, E. Stanley Lyle-Samuel, Alexander Borwick, Major G. O. Gardiner, James M'Donald, Dr. Bouverie F. P. Bowles, Colonel H. F. Gibbs, Colonel George Abraham Macdonald, Rt. Hon. John Murray Bowyer, Captain G. E. W. Gould, James C. Macmaster, Donald Breese, Major Charles E. Goulding, Rt. Hon. Sir Edward A. Macnamara, Rt. Hon. Dr. T. J. Briggs, Harold Green, Albert (Derby) McNeill, Ronald (Kent, Canterbury) Buchanan, Lieut. -Colonel A. L. H. Green, Joseph F. (Leicester, W.) Macpherson, Rt. Hon. James I. Bull, Rt. Hon. Sir William James Greenwood, William (Stockport) Magnus, Sir Philip Burgoyne, Lieut.-Colonel A. H. Greig, Colonel James William Mallalieu, F. W. Burn, Col. C. R. (Devon, Torquay) Gretton, Colonel John Malone, Major P. B. (Tottenham, S.) Butcher, Sir John George Gritten, W. G. Howard Marriott, John Arthur Ransome Campion, Lieut.-Colonel W. R. Gwynne, Rupert S. Mitchell, William Lane Carew, Charles Robert S. Hambro, Captain Angus Valdemar Molson, Major John Elsdale Casey, T. W. Hanna, George Boyle Moore-Brabazon, Lieut.-Col. J. T. C. Cautley, Henry S. Harris, Sir Henry Percy Morris, Richard Cayzer, Major Herbert Robin Haslam, Lewis Morrison, Hugh Chamberlain, Rt. Hn. J. A. (Birm., w. Henderson, Major V. L. (Tradeston) Mosley, Oswald Chamberlain, N. (Birm., Lady wood) Henry, Denis S. (Londonderry, S.) Mount, William Arthur Child, Brigadier-General Sir Hill Hewart, Rt. Hon. Sir Gordon Murchison, C. K. Clough, Robert Hills, Major John Waller Murray, Lieut.-Colonel A. (Aberdeen) Coates, Major Sir Edward F. Hinds, John Murray, John (Leeds, West) Coats, Sir Stuart Hoare, Lieut.-Colonel Sir S. J. G. Neal, Arthur Cobb, Sir Cyril Hood, Joseph Newman, Colonel J. R. P. (Finchley) Cohen, Major J. Brunei Hope, James F. (Sheffield, Central) Newman, Sir R. H. S. D. L. (Exeter) Colvin, Brig.-General Richard Beale Hopkins, John W. W. Nicholl, Commander Sir Edward Nicholson, William G. (Petersfield) Robinson, S. (Brecon and Radnor) Waddington, R. Nield, Sir Herbert Rodger, A. K. Walters, Rt. Hon. Sir John Tudor Norman, Major Rt. Hon. Sir Henry Roundell, Colonel R. f. Ward-Jackson, Major C. L. O'Neill, Major Hon. Robert W. H. Samuel, A. M. (Surrey, Farnham) Ward, Col. L. (Kingston-upon-Hull) Ormsby-Gore, Captain Hon. W. Samuel, Rt. Hon. Sir H. (Norwood) Warren, Lieut.-Col. Sir Alfred H. Palmer, Brigadier-General G. L. Sanders, Colonel Sir Robert A. Watson, Captain John Bertrand Parker, James Scott, A. M. (Glasgow, Bridgeton) White, Lieut.-Col. G. D. (Southport) Parry, Lieut. -Colonel Thomas Henry Seager, Sir William Williams, Lt.-Com. C. (Tavistock) Pennefather, De Fonblanque Seddon, J. A. Williams, Lt.-Col. Sir R. (Banbury) Pilditch, Sir Philip Sprot, Colonel Sir Alexander Wills, Lieut.-Colonel Sir Gilbert Pollock, Sir Ernest M. Stanley, Major Hon. G. (Preston) Wilson, Capt. A. S. (Holderness) Pownall, Lieut.-Colonel Assheton Steel, Major S. Strang Wilson, Daniel M. (Down, West) Pratt, John William Stewart, Gershom Winterton, Major Earl Preston, W. R. Strauss, Edward Anthony Wood, Sir J. (Stalybridge & Hyde) Prescott, Major W. H. Sturrock, J. Leng Yate, Colonel Charles Edward Pretyman, Rt. Hon. Ernest G. Sutherland, Sir William Young, Lieut.-Com. E. H. (Norwich) Pulley, Charles Thornton Sykes, Colonel Sir A. J. (Knutsford) Young, Sir Frederick W. (Swindon) Purchase, H. G. Talbot, G. A. (Hemel Hempstead) Younger, Sir George Raper, A. Baldwin Taylor, J. Rees, Sir J. D. (Nottingham, East) Terrell, George (Wilts, Chippenham) TELLERS FOR THE NOES. —— Richardson, Alexander (Gravesend) Thomson, f. C. (Aberdeen, South) Lord E. Talbot and Mr. Dudley Ward. Roberts, Sir S. (Sheffield, Ecciesall) Tickler, Thomas George
NEW CLAUSE.—(Rebate of Licence Duty in Scotland.)
Where hours of sale of exciseable liquor are curtailed by Section seven of The Temperance (Scotland) Act, 1913 (3 and 4 Geo. V., c. 33), the holder of a retailer's on-licence in Scotland shall be entitled to a rebate of two-fifteenths of the duty payable by him in respect of his licence.—[ Sir G. Younger. ]
Brought up, and read the First time.
I beg to move, "That the Clause be read a Second time."
When I gave notice of this Clause I was under the impression that the allowance had been granted under the Temperance (Scotland) Act, but I understand it is given under one of the Finance Acts. I would like to ask the right hon. Gentleman whether the rebate granted during the exceptional circumstances of the War in any way affects the statutory relief granted in Scotland under the Temperance (Scotland) Act?
I beg to second the Motion.
The intention of the Clause is to secure to the retailers what they already have by Statute, and we do not wish that to be destroyed by any phraseology in this Bill. On the Committee stage I moved a Clause covering both England and Wales and Scotland, but it was not very kindly treated by the Chancellor of the Exchequer. The Scottish retailers have a further claim. They have had hitherto an allowance on the licence duties, because in Scotland the licensing system is not the same as here. There the licence runs for six days only, and not seven as in this country, and the Scottish retailers are afraid that under this Bill as now drafted they are in danger of losing the rebate on the licence which they have had by Statute for many years. The rebates and allowances given in consideration of the restrictions during the War ought to be endured now while the restrictions are kept on, and it is no argument to say that the War is ended if the restrictions are kept on as during the War.
The Clause deals solely with the case of Scotland, and proposes to give a relief in Scotland which is not given here, which was discussed at the time when the Scottish Temperance Act was passed, which was refused then, and which I could not now give without re-opening the whole of the controversy which was then settled on a compromise basis by the Scottish Temperance Act. But I can give my hon. Friend behind me (Sir G. Younger) the assurance that there is nothing in the Bill as it stands which deprives Scotland of the relief it has had since the early' seventies in respect of the closing of houses on Sunday. That is unaffected by this Bill.
Motion and Clause, by leave, withdrawn.
CLAUSE 3.—(Increased Duties on Spirits.)
"(1) In lieu of the duties of customs payable on spirits imported into Great Britain or Ireland, there shall, as from the twentieth day of April, nineteen hundred and twenty, be charged, levied, and paid in the case of spirits entitled to preferential rates under Section eight of the Finance Act, 1919, the duties specified in the second column of Part I. of the First Schedule to this Act, and in the case of all other spirits the duties specified in the third column of Part I. of the said Schedule, together in either case with the additional duties specified in Part II. of that Schedule.
(2) In lieu of the excise duty payable on spirits distilled in Great Britain or Ireland there shall, as from the twentieth day of April, nineteen hundred and twenty, he charged, levied, and paid for every gallon computed at proof of spirits distilled or manufactured by any other process whatsoever in Great Britain or Ireland an excise duty of three pounds twelve shillings and sixpence, together with the additional duties specified in Part III. of the First Schedule to this Act.
And so in proportion for any less quantity."
I beg to move to leave out the Clause.
I understand, however, the calculation of the increased revenue from the Spirit Duty may affect England, that it certainly very seriously affects the Scottish retailer, because of the difference of the measure by which his whisky is sold. If the apparent margin of profit in England is something like £2 5s. a gallon, and is in Scotland only about £l 1s. or £1 2s., it will be seen that it is going to be rather difficult to carry on. I asked the right hon. Gentleman last time whether the Food Controller would consider the situation from the point of view of some slight alteration in the charge for the particular measure in use in Scotland, and I think that has not been done. I would urge the right hon. Gentleman to see what the situation really is, as I am sure he does not intend unfairly to penalise one section of traders against another; and if it can be shown that there is reasonable ground for complaint in this matter, I trust he will look into it sympathetically.
I beg to second the Amendment.
I must confess at once that I am not familiar with the details of this matter. The retailers are within the jurisdiction of the Food Controller and not of the Chancellor of the Exchequer, and I am afraid that all I can undertake at this moment is that I will ask my right hon. Friend the Minister of Food to look into the facts put by my hon. Friend and see whether he can properly take any action in the matter. I shall be obliged if my hon. Friend will be good enough to put his case in the form of a memorandum and send it to me, and I will make myself the medium of communication with the Food Controller.
Amendment, by leave, withdrawn.
CLAUSE 6.—(Increased excise duty on beer)
"In lieu of the duty of excise payable in respect of beer brewed in Great Britain or Ireland there shall, as from the twentieth day of April, nineteen hundred and twenty, be charged, levied and paid, the following duty (that is to say):—
£ s. d. For every thirty-six gallons of worts of a specific gravity of one thousand and fifty-five degrees 5 0 0
£ s. d. For every thirty-six gallons of beer of an original gravity of one thousand and fifty-five degrees the drawback of 5 0 3
I beg to move to leave out the Clause.
6.0 P.M.
This raises the question of the increased beer duty. The right hon. Gentleman, I am sure, intended only to increase the duty to an extent which he thought would leave a reasonable margin of profit, between the cost of the article and its retail price, but the whole amount of the increased duty was added to the then existing duty, and no allowance of any kind was made for the cost and risk of collection, and no sort of allowance was made for the risk of bad debts, of which I am afraid we are now reaching a period when there will be a good many. It is the first time, I think, that a duty of that kind has been proposed without leaving some kind of margin for these bad debts. The situation is very serious from the point of view of free trade brewers. Take an ordinary brewer turning out 100,000 barrels a year. In such a case the responsibility of the brewer, before the War, was to collect and to guarantee to pay the duty to the extent of about £40,000 a year, but that £40,000 is now converted into £500,000 a year, and that is a comparatively small business, as breweries go. It can be well imagined that any bad debt in cases of that kind is a very serious matter. The Chancellor of the Exchequer has always previously made an allowance for that, and has given a margin between the price actually charged and the duty receivable by the Government, but it has not been done in this case. The right hon. Gentleman justifies the heavy charge on the ground, amongst others, that barley had fallen in price, but brewers have all the barley they want to carry on with to the end of November, and at a very high price, too. Then there have been fresh circumstances since the right hon. Gentleman brought in the Budget in connection with motor transport, as there has been a very heavy increase proposed on motors, and in Scotland rates are very high. How some people are ever going to pay the increased transport and sell at the prices at which they are allowed to sell, I do not know. They cannot do it at with any profit to themselves, and I am afraid that unless material gets cheaper there may be a demand for some alteration either in the selling price or in the scales and categories. I should be sorry to see either. There would be very unpleasant results if the prices were raised to the consumer, and I want to warn my right hon. Friend that I do not think the position is as he really thinks. I am sure he fairly believes he is asking for no more than these traders are able to pay and leave a reasonable margin of profit, and I certainly believe he is not imposing this taxation from what I may call a pussy-foot turn of mind. He is out for revenue, and I am sure he does not want to ruin the trade. I want, therefore, to give the right hon. Gentleman this word of warning. I do not know that I can expect him to alter his duties at this moment, but there is sure to be some demand for a change one way or the other.
I beg to second the Amendment.
I made some remarks on this subject on a previous occasion, and I now wish to refer to a phase of the subject which I did not mention before. This tax is one of the cheapest taxes in the whole gamut of taxation to the Chancellor of the Exchequer in the way of collection. The trader, however, is only allowed one month, and the beer before it reaches the customer is considerably more than a month old, and the retailer has to have some credit. It means that the trader has to be financed for nearly three months. The Chancellor of the Exchequer has the use of the trader's money for a considerable period before he can re collect it it. That is a very severe burden. Since the Committee stage there has been investigation into the cost of materials. So far from these materials being likely to fall in the immediate future, they are likely to rise, and the manufacturer will not have the advantage of the lower-price stock, as last year. There is no doubt this is going to press exceedingly hardly upon the manufacturer and the retailer, but that is not the real crux of the whole matter. This tax is unjust to the manufacturer and the retailer, but it is still more unjust to the consumer. I ask the House to consider whether it is reasonable that one article should be singled out, and that the tax upon it should be raised after the War to a point which is more than thirteen times the pre-War tax on that article. It is putting a peculiarly heavy penalty on the users of a certain article, and I think it is unjust, because with this enormous tax are coupled regulations as to gravity, which force the brewers to turn out a large quantity of inferior beer, which it is very difficult to sell in many districts, because people do not want it. At any rate, if this article is to be taxed at this enormously excessive rate, the brewer should be allowed to supply to the public the beer they want in the quantities they require. That cannot now be done under the Regulations. It is proposed to increase the tax from 70s. to £5. Before the War it was 7s. 9d. per barrel. It was increased during the War to 20s., to 30s., and then to 50s. Since the War it has been increased to 70s., and now it is increased to 100s. I feel bound once again to put in a strong and urgent protest, which I hope will be well supported in this House, against the excessive taxation, and against beer being singled out for taxation such as is not shared by any other article.
The House will have noticed the divergence of opinion between my hon. Friend who moved the Amendment and my hon. and gallant Friend who seconded. My hon. Friend is concerned lest I should unwillingly or inadvertently, or owing to changed circumstances, allow the brewers and the traders generally an insufficient reward for their capital and industry. My hon. and gallant Friend who seconded is not concerned with the brewer, who, he thinks, can get along very well.
No. I expressly supported the argument of my hon. Friend opposite, but what I said was that even a stronger argument was the case of the retailer and the consumer.
My hon. and gallant Friend feels all the sympathy which is felt by my hon. Friend behind me for the various sections of the trade, but even more for the suffering public. As regards some of those sufferings, they do not arise out of the Budget, they are not affected by the Budget, and cannot be relieved in the Budget. The restrictions are no part of the financial proposals. They are part of the present policy in relation to the sale of liquor, and, really, it would be out of order to enter here into a detailed justification of them; nor is it specially my duty to do so. They do not emanate from my Department as a Department, but they emanate from a Cabinet decision, and are to be considered in the light of the Government policy as a whole on the question of the sale and regulation of the sale of liquor in this country. I come to what is more germane to the matter in hand, namely, the consideration of the question whether I originally allowed a sufficient margin of profit to the interests concerned in the production of beer, and whether circumstances, since I made my proposal, have so altered, that if that margin was originally a fair one, it is now an unfair one? I have never yet known traders agree that a tax is what they are able to bear.
I have agreed to every increase of duty up to now.
I know there are reasonable men among them, but I have never known a body of traders to assure the Chancellor of the Exchequer that the taxes he imposed upon them were such as they could easily and fairly be called upon to bear. But I think, if my hon. Friend will agree to go to the Custom House, he will find that the calculations fairly cover the items which he put. There was only one item, I believe, he put which I think is excluded from our calculations, and that is bad debts. The amount of bad debts does depend very largely on the management of a business, and it would not be just to regard the varying fortunes or varying success of the different businesses which are concerned. My hon. and gallant Friend opposite spoke of the length of time during which the brewers were out of pocket by that which they collected on behalf of the revenue authorities. He spoke of their being allowed a month or less. I think he forgets it was raised from one month, and then to two months, and now they are allowed three months before it is payable, under a concession made in 1918. We went into this matter very carefully before we proposed the increase in the present Budget. We put almost all that increase upon the consumer and not the trade. A very small fraction was put upon the trade, and we thought that that small fraction might be borne out of the profits they were making, and which were higher than they were making before the War.
My hon. Friend behind is concerned about the rise in the cost of transport. It was obvious to him, and he showed that he realised, that you cannot adjust the Budget month by month to every factor, which may vary in the course of a year, and I venture to say there has been no such change in the situation as to call for an adjustment. My hon. Friend talked of a reduction in the amount of beer brewed, and my hon. and gallant Friend said that the public were entitled, if they were taxed, to have as much beer brewed as they liked. There are, of course, no restrictions, and, with the increase of duty, I estimated there would be a fall in production, and that with the fall would come an addition to the traders' cost per barrel. But there has been no fall in production. On the contrary, there has been an increase of production over last year for that portion of the year which has already elapsed. Accordingly, the increase charged to the brewer has not yet matured. It will only affect a portion of the year, but he has an amount in hand, owing to the increased profits, due to the fact that the production of beer, instead of falling, as I anticipated, has been larger.
Is that a general figure?
Yes, a general figure for the whole of the country.
Including Scotland?
I cannot say quite about that, but it is for the whole of the country. My hon. Friend mistook my observation earlier as to how the suggested fall in barley would affect the brewers. Assuming that over the bigger portion there would be a fall in the cost of barley, which will be in their favour, of course, it would not be so before next August. Here I agree with him. If there is increased consumption instead of decreased consumption, the mere increase of consumption, if continued at the present rate, would wipe out any additional charge that is likely to be incurred through increased railway rates, and leave a considerable margin. Under these circumstances, I feel that it would be unreasonable to expect me to abandon this proposal, and my hon. Friend behind me obviously feels that himself. But I have no cause for the apprehension expressed by him as to the capacity of the country to bear that increased charge throughout the year.
Amendment negatived.
CLAUSE 8.—(Additional Duty on Cigars.)
In addition to the duties of customs payable on tobacco imported into Great Britain and Ireland, there shall, as from the twentieth day of April, nineteen hundred and twenty, be charged, levied, and paid on cigars a duty of 50 per cent. of the value of the cigars:
Provided that in the case of the duty charged by this Section the preferential rate under Section eight of the Finance Act, 1919, shall be two-thirds of the full rate.
I beg to move to leave out the word "fifty" ["paid on cigars a duty of fifty per cent."] and to insert instead thereof the words "thirty-three and a third."
This is to reduce the ad valorem duty on cigars from 50 per cent. to 33⅓ per cent. It will be within the recollection of the House that I moved in Committee to reduce it from 50 to 20 per cent. The Chancellor then said the Government were not prepared to accept that reduction, but he was disposed to accept a reduction to 33⅓ per cent. I do not propose again to go over the arguments used, and I therefore formally move. Now that the Chancellor has had the opportunity of going into the matter he may be prepared to accept the Amendment. He was convinced, I understand, that there had been an under-valuation or under-declaration in the value of imported cigars, and in all probability he felt the amount which he had budgeted for would be achieved at a lower rate. If that is so, I assume he is satisfied, and I beg to move my Amendment.
Both in respect to champagne and cigars we found that the Customs pre-War returns which were all we had to go upon were inaccurate. Champagne was over-valued; cigars were under-valued. I made the concession I did in respect of champagne not on the merits of the case, but in deference to the strong appeal on behalf of our French Allies. The case for tobacco is rather different, because the value of cigars being higher than anticipated the duty ad valorem would be also higher, and would yield more revenue than I had expected, assuming that it did not affect consumption much beyond the extent for which I had already made allowance. There was a very critical spirit in the House towards the reduction of the duty on champagne. I consented only on the ground that such a concession would be valued by the French, and from a desire not to persist in the actual original proposal of the Budget to carry through a tax which they thought would fall as a special hardship on them. I doubt very much whether that being so the House would be prepared to consider a reduction in the 50 per cent. on cigars unless I could show a convincing case to the House that the duty at so high a figure would so reduce the yield that the lower duty would be the more remunerative of the two. Since I spoke I have gone carefully into the matter, and I do not think that would be true. I think the 50 per cent. duty can be borne and will produce more money than 33⅓ per cent. Having regard to all the circumstances I do not think I should accept the reduction proposed by my hon. Friend. I propose, therefore, to ask the House to continue the duty at 50 per cent.
Amendment negatived.
CLAUSE 11.—(Repeal of Customs Duties on Motor Spirit and Motor Dealers' Licence Duties.)
As from the first day of January, nineteen hundred and twenty-one, customs duties on motor spirit imported into Great Britain or Ireland and the Excise Duty on licences to be taken out annually by dealers in motor spirit shall cease to be chargeable.
I beg to move to leave out the Clause. I want to make it clear that our objection to this tax is not the objection only of those who use pleasure motor-cars, but that of the commercial users as well. It was stated on the last occasion that in making my protest I represented only the Automobile Association. I made it clear on that occasion that we—that is those whom I represented—were in no way desirous of getting out of our share of the taxes, and were absolutely willing, under present circumstances, that we should be taxed for road purposes to the extent of £8,000,000 per annum, and the cost of raising those taxes. I think there was no doubt about that, and I need not emphasise it to-day. But it does seem necessary to make it perfectly clear that the whole motor industry is opposed in this matter to the Ministry of Transport.
The other day I had the honour of introducing a deputation to the Minister. This deputation consisted of representatives of every reputable motor association, the big manufacturing firms, the big manufacturers' associations, felling associations, agents' associations, and, in fact, all who have to do with the construction, manufacture, and sale of motor cars in this country. They represented not merely the pleasure motor cars, but commercial motor cars as well. They were one and all convinced that the Ministry of Transport is making a very grave mistake in this matter. I should also say that with that deputation was a deputation representing British makers, who, unanimously representing the traders of the country, also desired to say that they were convinced that the Ministry of Transport was making a great mistake in this respect.
We sent out at haphazard a questionnaire addressed to the commercial users of motor vehicles throughout the country, and asked them whether they agreed to a tax on petrol or preferred the scheme of the Government. Of between 2,000 and 3,000 copies of this questionnaire we received 1,400 replies. Of these 98 per cent. were against the Government and 2 per cent. in favour. I would just like to tell the House that that kind of people are opposed to the Government, because I want the House to realise that I am not speaking for pleasure motor-car owners only. A large number of shop proprietors in London send out goods in small vans. Firms like Selfridges, Arding and Hobbs, Gamages, and so on. In the world of agriculture we have nearly all the dairy companies sending out the milk to their customers by means of mechanical transport rather then by the old fashion of horses. They are one and all opposed to the Government's scheme. There is a British petroleum company itself, which distributes the petroleum, and there are a large number of brewery companies, Ind, Coope and Sons, and manufacturing firms like those of Howard and Bui lock of Lancashire, Crossfields, and other firms like them. There are coal users, such as the Lancashire Coal Mines Association. There are colliery companies and others. There are shipping agents; the Anchor Line Company, big concerns of various sorts, and the Imperial Tobacco Company. [HON. MEMBERS: "Hear, hear!"] My hon. Friends on the Labour Benches cheer a little too soon. I now give the name of a very important association which perhaps they know, and which will appear to them. I refer to the Wholesale Cooperative society. They are in strong agreement with us. There is the Peterborough Co-operative Society, and a very large number of co-operative societies throughout the country. Many firms use petrol, which figures so much in the public eye at the present time, and I want, therefore, my hon. Friend opposite (Mr. Neal) to realise that there is this very strong feeling. I am authorised by the Society of Motor Manufacturers to say that the present situation is having a very serious effect on the motor industry. I do not think that at this time we want to do anything whatever to stop production in this country. The manufacture of motorcars has received a very serious check, and there are serious reasons to believe that this tax is one of the causes—I do not say "the" cause—which is leading to lessened production of motor-cars in this country at the present time.
Take, for instance, the doctors' side of the question. I think that will appeal to the House. A very large number of doctors, in the country especially, keep two motor cars, the second in case the first car breaks down, or to use when the first is undergoing repair. In one case I was told that the tax would be £53 for each motor car. The effect of that will be that that doctor will have to pay the double tax for using in effect one car, whereas if he paid a a duty on petrol he would be paying a tax according to the use to which he puts the road, or his car. I know it is no use asking my hon. Friend (Mr. Neal) to alter his decision. [An HON. MEMBER: "Why not?"] Because we have already had a Division, and I accept that Division which took place on the last occasion, when there was a large majority in favour of the Government. But I make my protest. I know the present Coalition. I have no hope of getting any very large number to go into the Lobby with me. Therefore I will not waste the time of the House in that way. I merely desire to tell the right hon. Gentleman the Minister that of all the mistakes he has made—and he has not been altogether a successful Minister up to the present—I think this, he will in a year's time find, has been one of the most disastrous he has made.
I beg to second the Amendment.
The hon. Baronet has quoted the names of a number of firms who are opposed to this form of taxation, and amongst them he quoted Selfridge's, as being a large firm of users opposers to this tax. It so happens that some publicity has been given to that statement in advance, and on the 24th of the present month Mr. Cooper, who is a director of Selfridges, wrote to Sir Henry Maybury as follows:—
"We understand that one of our people has expressed his personal opinion on this question. On behalf of Selfridges' Company, Limited, we would like to put on record that we are in favour of a single vehicle tax in preference to a tax on petrol."
The hon. Baronet's opposition in the first instance, was on behalf of the makers and manufacturers of motor vehicles, but it is rather strange that their representative, Mr. Reeves Jeffreys, who was a Member of the Departmental Committee, signed a Report in favour of a single vehicle tax as against a liquid fuel tax, with a reservation asking that it might be 15s. per horse-power, as against £l per horsepower which is now proposed. Motor users other than pleasure motorists have substantially stated that they prefer this form of taxation. I can quote on this point a higher authority because the hon. Baronet (Sir W. Joynson-Hicks) himself, speaking in this House when the Petrol Tax was under discussion in the year 1909, is reported in the OFFICIAL REPORT, and speaking against the Petrol Tax in the course of a long speech said:
"There is a great deal to be said in favour of taxing by horse-power. It is simpler and it is easier."
Later he said:
"I suggest rather seriously that the right hon. Gentleman should tax by unit of horsepower, which would be very much better than jumping from 33 to 40 and then from 40 to 60."
And further on in his speech he said:
"If the right hon. Gentleman would agree to tax by unit of horse power it is perfectly simple when once you have studied the system, because the horse power would be measured under the provisions of the rating of the Royal Automobile Club to a nicety."
That was 11 years ago.
When it is proposed to tax petrol, the right hon. Baronet says tax the vehicle, and when it is proposed to tax the vehicle, he said tax the liquid fuel. I understand that the hon. Baronet does not desire to press his Amendment to a Division, and I will not trouble the House with any further observation.
Amendment negatived.
CLAUSE 12.—(Duty on licences for mechanically propelled vehicles.)
(1) Any Excise Duty which is chargeable at the commencement of this Act in respect of any vehicle which is chargeable with duty as a mechanically propelled vehicle under this Section shall cease to be chargeable as from the first day of January, nineteen hundred and twenty-one, and on and after that date there shall be charged, levied, and paid in Great Britain and Ireland in respect of mechanically propelled vehicles duties of excise at the rates specified in the Second Schedule to this Act.
(2) The duties charged under this Section shall be paid annually upon licences to be taken out by the person keeping the vehicle:
Provided that—
( a ) a licence may be taken out in respect of any mechanically propelled vehicle (other than a cycle, or a tramcar, or a vehicle on which a duty of five shillings is chargeable under this Section) for one-quarter of the year only beginning on the first day of January, the twenty-fifth day of March, the first day of July, or the first day of October,
( b ) where a person commences to keep or use a cycle or tramcar on or after the first day of October in any year, he shall, on delivering a declaration in writing signed by him to that effect, be entitled to take out a licence for that vehicle in payment of one-half of the full annual duty.
(3) The unit of horse-power for the purpose of any rate of duty under the Second Schedule to this Act shall be calculated in accordance with regulations made by the Minister of Transport for the purpose.
(4) No duty shall be payable under this Section in respect of fire-engines, vehicles kept by a local authority while they are used for the purposes of their fire-brigade service, ambulances, or road rollers.
(5) The Minister of Transport may make regulations providing for the total or partial exemption for a limited period from the duty payable under this Section of any vehicle brought into the United Kingdom by persons making only a temporary stay in the United Kingdom.
I beg to move, in Subsection (1), after the word "vehicles" ["in respect of mechanically propelled vehicles"], to insert the words "used on roads."
The object of this Amendment is to limit this taxation to those vehicles which are used on roads. Some criticism was urged during the Committee stage that the taxation might apply to vehicles which were wholly used inside works and factories, and that it might apply to vehicles which did not go outside the works. As the object of this proposal is to provide funds for the upkeep of the roads, it has been thought advisable to limit the tax to vehicles which run upon the roads.
I thought this proposal was intended to apply to vehicles used in the highways. I think the word "roads" might be construed as including roads inside a factory.
If we confine it to highways, I think it would cause some difficulty, and the word "roads" meets our view. It is almost impossible to use "roads" which are not repairable by some public authority.
Surely there are some vehicles which are not commonly used on the roads, but which are sometimes used on them. Some of these vehicles which are ordinarily used in yards are capable of being used on the roads, and if that is so the words chosen are not the happiest. I should have thought it was desirable to insert the word "commonly," so as to read "commonly used on roads."
I think there is a slight ambiguity in this Amendment, and I suggest that the word "public" should be inserted before the word "roads." I prefer the term "highways," which is one with which we are perfectly familiar. I hope my hon. Friend will see the desirability of making some correction which will make absolutely clear what is meant.
I want to emphasise the point which has just been made by my hon. Friend (Mr. Marriott). There may be a road up to the departure platform of a station and the arrival platform and vehicles might be used on those roads. They will not go outside the station, but they may be used on roads outside. I think it would be clearer if the word "public" were inserted. One does not want to be continually having lawsuits on questions arising out of new Acts of Parliament, and I think if the word "public" is inserted it will meet the case.
This point has received consideration, and I think we can agree to accept the suggestion to insert the word "public" before the word "roads." I am prepared to move my Amendment in that form.
Does that cover the whole point? I have in mind works which are separated by a public road where vehicles continually cross the public road Would the Amendment meet cases of that kind? The mere fact of these vehicles crossing the road might be taken as a pretext for taxing them.
Amendment, by leave, withdrawn.
Amendment made: In Sub-section (1), after the word "vehicles" ["in respect of mechanically propelled vehicles"], insert the words "used on public roads." —[ Mr. Neal. ]
I beg to move, at the end of Sub-section (2, a ), to insert the words,
"in respect of such vehicle a licence may be taken out for one half of the year only, beginning on the first day of July, and in the case of any licence so taken out the duty shall be 55 per cent. of the full annual duty."
The effect of my proposal would be to provide for a half-yearly licence for the owners of motor cars. It is provided in the Finance Bill that you must take out a licence for periods of less than a year for three months. I desire to ask the hon. Gentleman whether he could not make a concession so that if it were desired to take out a licence for less than one year a person might take it out for six months. This consideration was pressed upon the Minister of Transport by a large deputation, and I hope the hon. Gentleman will be able to make some slight concession.
I beg to second the Amendment.
The matter which the Noble Lord has mentioned has been fully considered, and I regret that I am not able to meet the view which he has pressed upon me. The Bill provides for a quarterly licence, and also for licences which are taken out in the second part of the administrative year. The proposal of the Noble Lord is that on payment of an extra 5 per cent., that is to say 55 per cent. instead of 50 per cent., there shall be another form of half-yearly licence. One of the great objects of the present Measure is to simplify administration. The cost of administering the Motor Duty is very great, and to meet the view embodied in this Amendment would involve a very large administrative cost. For these reasons I hope my Noble Friend will not press his Amendment.
Amendment negatived.
I beg to move, at the end of Sub-section (5), to add a new Sub-section—
"(6) The Minister of Transport may make regulations providing for the total or partial exemption from the Duty payable under this Section of any vehicle used by a manufacturer or dealer on trial after completion or on trial by an intending purchaser."
I know that the official view is that this point might be dealt with in the Administrative Bill, but I would remind the hon. Gentleman that on the 12th of July, 1920, the Minister of Transport said:
"I am aware of the action taken by the Glamorgan County Council. The proviso under Section 2 (4) of the Motor Car Act, 1903, enabling a County Council to assign a general identification mark to a manufacturer or dealer is purely permissive, and if the power is not exercised by a County Council I am not in a position to intervene."
At present the Minister has not got this particular power, and I am anxious that he should have it. I hope my hon. Friend will accept this proposal.
I hope my hon. Friend will not press this matter. It has received the most careful consideration. It would involve undue administrative expense, and it is difficult to see exactly what form the Regulations would take which the hon. Baronet has in mind. If he can invent any further system by suggesting what form those Regulations should take I will promise to consider the matter between now and the consideration of this measure in another place.
Amendment, by leave, withdrawn.
I beg to move, at the end of Sub-section (5), to add the words:
"Duties in accordance with this Section shall be payable on mechanically propelled vehicles employed by or at the direction of the Minister of Transport, the Secretary of State for War, the First Lord of the Admiralty or their officers, servants or agents."
I should be glad of an assurance from my hon. Friend that these Government cars which dash about the country will contribute equally with private owners to the upkeep of the roads.
This imposes a special charge.
I was not quite sure on that point myself. Do you rule it out of Order?
Yes; it is out of Order.
CLAUSE 17.—(Personal Allowance.)
(1) The claimant, if he proves that for the year of assessment he has his wife living with him, shall be entitled to a deduction of two hundred and twenty-five pounds, and in any other case to a deduction of one hundred and thirty-five pounds.
(2) If the total income of the claimant includes any earned income of his wife the deduction to be allowed under this Section shall be increased by an amount equal to nine-tenths of the amount of that earned income, but not exceeding in any case forty-five pounds.
I beg to move, in Sub-section (1), after the word "him" ["wife living with him"], to insert the words
"or that his wife is wholly maintained by him during the year of assessment and that he is not entitled, in computing the amount of his income for that year for the purposes of the Income Tax Acts, to make any deduction in respect of the sums paid for the maintenance of his wife."
This Amendment, which was discussed on the Committee stage, is designed to remedy what I think was admitted to be a grievance. Certain allowances are already made, but a man may be in a far more unfortunate position in having a wife ill, or in a home, or in a lunatic asylum. I need not go into the details, because the Chancellor of the Exchequer has informed me that he is willing to accept the Amendment.
Will this Amendment cover the one down in my own name and that of the Member for Pontypool (Mr. Griffiths) to add the words "or wholly maintained by him"?
Yes, I accept this wording because it safeguards the Revenue. As a matter of fact, both cases are covered.
Amendment agreed to.
I beg to move, in Sub-section (1), after the words last inserted, to insert the words "or is a householder and is maintaining his mother."
I submit that this is a very reasonable Amendment. It simply seeks to put a young man, who is man enough to stay at home and shoulder the burden of the family after his father's death, in the same position as the father would have been had he lived. There are many such cases. When the Income Tax abatement was reduced from £160 to £130, nothing was more unpopular amongst the workers, because there are so many young men who are carrying on the responsibilities of their fathers, and yet they are penalised by not being allowed the same abatement as the father would have had had he lived. A married man with a wife is allowed £225, a single man is allowed £135. I assume that where there are young children the single man gets the same abatement in respect of them as his father would have done. He gets, as a single man, the abatement of £135, and £45 in respect of the mother, which means £180, or £45 less than the father would have had. I do suggest that this Amendment should be accepted. I will only give one illustration of the class of case with which we wish to deal. I was talking to a man the other day whom I had always thought was a married man. He told me his father was killed in the mine—a class of case which unfortunately very often occurs. His mother was left with him and two young sisters. He felt it his duty to remain at home and not to get married. There are many such; cases where the young man sacrifices himself in order that he may shoulder the family burden. There was considerable feeling on this point when the Income Tax limit was lowered. At that time I was actively engaged with the miners, and I know that their grievance was that there was no allowance for the mothers whom these young fellows were keeping homes for. After considerable agitation £25 was allowed, and then only on the ground that the mother was an invalid. That seems to me a senseless sort of condition, because if the woman is strong and healthy it must be all the better for the family and for the general community. I hope the Chancellor of the Exchequer will accept this Amendment. It was moved in Committee, but in the speeches then delivered by the right hon. Gentleman and by the Financial Secretary to the Treasury, I fail to find any sound reason for its rejection. I do not know what view the Income Tax Commissioners took on this matter when it was laid before them, but I do press the right hon. Gentleman to give way on this occasion.
I beg to second the Amendment.
I am sorry to say I cannot accept the Amendment. It really runs counter to the whole structure of the Bill, and if it is desired to meet this special case it must be done in some other place.
I do not mind really where it is done. If the right hon. Gentleman can suggest a better place I will gladly accept it.
This Clause really deals with allowances. Married couples receive £225; the single man gets an allowance of £135, and those allowances have been made on the recommendation of the Royal Commission and in response to a very wide feeling in this House which I went some way to meet last year, and have gone further to meet in the present year. The hon. Member now proposes that the allowance which was made in respect of married couples by reason of the man having a wife to maintain as well as himself—their incomes being aggregated for the purpose of fixing the charge—should be extended to the single man who is maintaining his mother, although in their case the incomes would not be aggregated as in the case of the married couple. I observe, too, that the relief recommended by the hon. Member would be given only to the unmarried man who supports his mother, and not to the married man who, in addition to his obligation as a married man, also supports his mother. I do not think that is fair, nor, indeed, would it be right. There is a relief given in respect of the maintenance of a mother and of the children of school age, and it would have to be in connection with that relief that any extension should be made. I quite understand that if I were prepared to say I would make it in one of the succeeding Clauses the hon. Member would be satisfied, but I cannot say it. Having made this great advance, I cannot under present circumstances go further in the matter of relief, and while I might well oppose the hon. Gentleman's Amendment on the ground that it is out of place and unfair as between different classes of taxpayers, I cannot buy off opposition by offering to move something in another Clause.
I am afraid a good many hon. Members will be disappointed with the reply of the Chancellor of the Exchequer. He has told us this is not the place in which to move the Amendment, and my hon. Friend replied to that that he does not mind where it is inserted so long as it is put in. The right hon. Gentleman puts forward the point that whereas husband and wife have their incomes aggregated, if this concession were granted, the incomes of the son and of the mother would not be aggregated. Surely if he accepts the Amendment, in another place he can add words providing for such aggregation, for the purpose of arriving at the amount to be charged. Then the right hon. Gentleman said the concession would be unfair to the married man who was supporting his mother. The married man, however, already has his concession in that he has his wife. Obviously he is a householder, and he is in quite a different position to the man who remains single simply for the purpose of supporting his mother. It was suggested when the matter was debated in Committee that there might be several sons contributing to the support of the mother, and that all of them would claim the abatement. But that is absurd from the terms of the Amendment in this case, because the single son would not only have to support his mother, but he would have to be a householder. There is no doubt whatever that these young fellows have given up a great deal in order to look after their widowed mothers, and they feel a certain sense of grievance that they are not treated as well as married couples, and given the same concession as far as Income Tax is concerned. This is not a question of millions. I do not think any estimate has been made of what it would cost the Exchequer in Income Tax, but probably £50,000 would cover it, and if the right hon. Gentleman would accept this Amendment it would remove a very great sense of grievance which a number of men cherish.
7.0 P.M.
I should like to read to the House a letter on this, subject which I have received from one of my constituents. He says:
"Whilst the Finance Act (Income Tax) is being discussed, may I draw your attention to the hardship in my case, and ask your assistance in obtaining relief from the Chancellor of the Exchequer. My mother (aged 84) is not capable of doing the duty of keeping house, so I have to obtain assistance (housekeeper), which costs me about £53 per annum, for which charge on my income (small enough) I apparently can claim no relief. Compared with the allowance granted to a married man with no family, I consider my case a real hardship, as, although I am a single man, I have the same obligations to perform in regard to keeping a home going, and in addition have to obtain and pay for the assistance which is necessary to keep it in proper condition. Trusting you can do something for such cases as these …"
It is a man's own fault if he gets married, but it is not a voluntary act that he is the son of his mother. The mother is there, and there is the obligation on his part to maintain her. I think that is the distinction, and, although the Chancellor, from what he said just now, apparently is not able to accept this Amendment, I think the case is one which certainly ought to be considered by Parliament.
May I appeal to the Chancellor of the Exchequer to take this matter into consideration? As has just been said by the hon. Gentleman (Sir S. Roberts), there is a very grave hardship in many cases where an unmarried son is maintaining his mother. I can speak from personal experience of such cases, as also, I am certain, can other hon. Members. I trust that the right hon. Gentleman may see his way to accept the Amendment, if not in this place, in some other part of the Bill, framing it in such a way as to ensure, as in the present Amendment, that the son shall be a householder, thereby eliminating any possibility of several individuals claiming the abatement. That would place the unmarried son in the same position as the married man with no family, who gets the abatement. From the point of view of justice, at any rate, there is no reason why the unmarried son who is supporting his mother and is a householder should not be entitled to the same abatement as the married man with no family.
I, too, have had a communication with regard to the wife's mother, and it only illustrates the difficulties of any Chancellor of the Exchequer when he once begins to make a concession in any direction by reason of the number of equally hard cases which appeal to the sympathy of all hon. Members. I am sure we can all see that, if there is a relative at all in respect of whom some allowance should be made, it is surely a man's mother; but an equally good case could be made out on the part of a wife for her mother, and the difficulty is as to where to stop, or how far it is to be extended. I think we shall really have to leave in the hands of the Government of the day such a difficult and complicated matter as this, which, as the House will see, leads from one subject to another, and gradually gets wider and more difficult to deal with.
If there is any one member of the community towards whom this House is sympathetic, it would be the widow, especially if she is left with children to maintain; and next to the case of the widow would come that of the young man who has denied himself the luxury of marriage and devoted himself to maintaining the home of his mother. Although the hon. Member (Sir W. Rutherford) who has just spoken referred to the case of the wife's mother, this Amendment, as I understand it, applies to the case of the single man who is maintaining his mother, and, therefore, I do not quite see that the Chancellor would have any such difficulty as is suggested. One appreciates the difficulty in which the right hon. Gentleman is at this moment, but I see no reason why we should not ask him if it is not possible for him to reconsider this matter, and see if we can in any way show our appreciation of and sympathy with the case of the young fellow who takes this burden upon himself. If the right hon. Gentleman can reconsider the matter, I am sure the House will be grateful to him.
I should like also to mention the case of the daughter who is maintaining her mother. One has every sympathy with these cases, but, immediately you begin to give way on a main principle, you are bound, as a matter of justice, to go into other cases. There are probably hundreds of young women who are householders and who are supporting their mothers. Why should you stop at the young man? It only shows the difficulty of the matter.
I would point out that this Amendment is not limited to the case of a widowed mother. It says, "is a householder and is maintaining his mother." I take it that the word "widowed" would have to be added in any event, or it would leave it open to cases in which a father may have deserted the mother and left her to his son to support. There are many contingencies that might arise.
Question put, "That the words 'or is a householder and is maintaining his mother' be there inserted in the Bill."
The House divided: Ayes, 77; Noes, 178.
Division No. 246.] AYES. [7.10 p.m. Barrand, A. R. Brace, Rt. Hon. William Cope, Major Wm. Barrie, Charles Coupar Bramsdon, Sir Thomas Cowan, D. M. (Scottish Universities) Benn, Captain Wedgwood (Leith) Briggs, Harold Davies, Alfred Thomas (Lincoln) Bennett, Thomas Jewell Brown, James (Ayr and Bute) Davies, Sir David Sanders (Denbigh) Bowyer, Captain G. E. W. Cairns, John Edwards, C. (Monmouth, Bedwellty) Edwards, Major J. (Aberavon) Jephcott, A. R. Short, Alfred (Wednesbury) Edwards, John H. (Glam., Neath) Johnstone, Joseph Sitch, Charles H. Entwistle, Major C. F. Jones, Henry Haydn (Merioneth) Steel, Major S. Strang Fildes, Henry Kelley, Major Fred (Rotherham) Swan, J. E. Forestier-Walker, L. Kenworthy, Lieut.-Commander J. M. Sykes, Sir Charles (Huddersfield) Fraser, Major Sir Keith Kenyon, Barnet Taylor, J. Galbraith, Samuel Kiley, James D. Thomson, T. (Middlesbrough, West) Gould, James C. Locker- Lampson, G. (Wood Green) Thorne, G. R. (Wolverhampton, E.) Graham, D. M. (Lanark, Hamilton) Maclean, Rt. Hn. Sir D. (Midlothian) Tootill, Robert Graham, W. (Edinburgh, Central) MacVeagh, Jeremiah Waddington, R. Greenwood, William (Stockport) Murray, Dr. D. (Inverness & Ross) Wallace, J. Gretton, Colonel John Newbould, Alfred Ernest Waterson, A. E. Hallas, Eldred Newman, Sir R. H. S. D. L. (Exeter) Wedgwood, Colonel J. C. Hanna, George Boyle Nield, Sir Herbert White, Charles F. (Derby, Western) Hartshorn, Vernon Norman, Major Rt. Hon. Sir Henry Wignall, James Hayward, Major Evan Norris, Colonel Sir Henry G. Williams, Aneurin (Durham, Consett) Herbert, Hon. A. (Somerset, Yeovil) Palmer, Charles Frederick (Wrekin) Wood, Major M. M. (Aberdeen, C.) Hinds, John Parry, Lieut.-Colonel Thomas Henry Young, Robert (Lancaster, Newton) Hodge, Rt. Hon. John Raffan, Peter Wilson Holmes, J. Stanley Richardson, R. (Houghton-le-Spring) TELLERS FOR THE AYES. —— Hunter, General Sir A. (Lancaster) Roberts, Rt. Hon. G. H. (Norwich) Mr. Tyson Wilson and Mr. Neil Maclean. Irving, Dan Sexton, James
NOES. Agg-Gardner, Sir James Tynte Gibbs, Colonel George Abraham Peel, Col. Hn. S. (Oxbridge, Mddx.) Ainsworth, Captain Charles Gilbert, James Daniel Pennefather, De Fonblanque Astor, Viscountess Glanville, Harold James Perkins, Walter Frank Atkey, A. R. Goulding, Rt. Hon. Sir Edward A. Pollock, Sir Ernest M. Baird, Sir John Lawrence Green, Albert (Derby) Pownall, Lieut.-Colonel Assheton Baldwin, Rt. Hon. Stanley Green, Joseph F. (Leicester, W.) Pratt, John William Balfour, George (Hampstead) Greig, Colonel J. W. Prescott, Major W. H. Banbury, Rt. Hon. Sir Frederick G. Gritten, W. G. Howard Pulley, Charles Thornton Barnett, Major R. W. Hall, Rt. Adml Sir W. (Liv'p'l. W. D'by) Purchase, H. G. Barnston, Major Harry Hambro, Captain Angus Valdemar Raw, Lieutenant-Colonel N. Beckett, Hon. Gervase Harris, Sir Henry Percy Rees, Sir J. D. (Nottingham, East) Bell, Lieut.-Col. W. C. H (Devizes) Haslam, Lewis Reid, D. D. Bigland, Alfred Henderson, Major V. L. (Tradeston) Richardson, Sir Albion (Camberwell) Bird, Sir A. (Wolverhampton, West) Henry, Denis S. (Londonderry, S.) Richardson, Alexander (Gravesend) Blades, Capt. Sir George Rowland Herbert, Dennis (Hertford, Watford) Robinson, S. (Brecon and Radnor) Blair, Reginald Hewart, Rt. Hon. Sir Gordon Rodger, A. K. Blane, T. A. Hoare, Lieut.-Colonel Sir S. J. G. Roundell, Colonel R. F. Borwick, Major G. O. Hope, James F. (Sheffield, Central) Royds, Lieut.-Colonel Edmund Boscawen, Rt. Hon. Sir A. G. Hopkins, John W. W. Rutherford, Sir W. W. (Edge Hill) Breese, Major Charles E. Home, Sir R. S. (Glasgow, Hillhead) Samuel, A. M. (Surrey, Farnham) Bridgeman, William Clive Hume-Williams, Sir W. Ellis Sanders, Colonel Sir Robert A. Buchanan, Lieut.-Colonel A. L. H. Illingworth, Rt. Hon. A. H. Scott, A. M. (Glasgow, Bridgeton) Bull, Rt. Hon. Sir William James Jackson, Lieut.-Colonel Hon. F. S. Seager, Sir William Burn, Col. C. R. (Devon, Torquay) James, Lieut.-Colonel Hon. Cuthbert Seddon, J. A. Butcher, Sir John George Jameson, J. Gordon Seely, Major-General Rt. Hon. John Campion, Lieut.-Colonel W. R. Jones, Sir Evan (Pembroke) Shaw, William T. (Forfar) Carew, Charles Robert S. Jones, J. T. (Carmarthen, Llanelly) Shortt, Rt. Hon. E. (N'castle-on-T.) Casey, T. W. Kellaway, Rt. Hon. Fredk. George Smith, Harold (Warrington) Cautley, Henry S. Kerr-Smiley, Major Peter kerr Smithers, Sir Alfred W. Cayzer, Major Herbert Robin Kinloch-Cooke, Sir Clement Sprot, Colonel Sir Alexander Cecil, Rt. Hon. Evelyn (Birm, Aston) Law, Rt. Hon. A. B. (Glasgow, C.) Stanley, Major Hon. G. (Preston) Cecil, Rt. Hon. Lord R. (Hitchin) Lewis, Rt. Hon. J. H. (Univ., Wales) Stewart, Gershom Chamberlain, Rt. Hn. J. A. (Birm., W.) Lister, Sir R. Ashton Strauss, Edward Anthony Chamberlain, N. (Birm., Ladywood) Lloyd-Greame, Major Sir P. Sturrock, J. Leng Child, Brigadier-General Sir Hill Locker-Lampson, Com. O. (H'tingd'n) Sutherland, Sir William Coates, Major Sir Edward F. Lorden, John William Sykes, Colonel Sir A. J. (Knutsford) Coats, Sir Stuart Loseby, Captain C. E. Talbot, G. A. (Hemel Hempstead) Cobb, Sir Cyril Lowe, Sir Francis William Terrell, George (Wilts, Chippenham) Cockerill, Brigadier-General G. K. M'Donald, Dr. Bouverie F. P. Thomson, F. C. (Aberdeen, South) Cohen, Major J. Brunei M'Guffin, Samuel Thomson, Sir W. Mitchell- (Maryhill) Colvin, Brig.-General Richard Beale Mackinder, Sir H. J. (Camlachie) Tryon, Major George Clement Coote, Colin Reith (Isle of Ely) Macpherson, Rt. Hon. James I. Vickers, Douglas Courthope, Major George L. Maddocks, Henry Ward-Jackson, Major C. L. Dalziel, Sir D. (Lambeth, Brixton) Mallalieu, F. W. Watson, Captain John Bertrand Dalziel, Rt. Hon. Sir J. H. (Kirk'dy) Malone, Major P. B. (Tottenham, S.) Wigan, Brig.-General John Tyson Davidson, Major-General Sir J. H. Marriott, John Arthur Ransome Williams, Lt.-Com. C. (Tavistock) Davison, Sir W. H. (Kensington, S.) Martin, Captain A. E. Williams, Col. Sir R. (Dorset, W.) Dawes, James Arthur Molson, Major John Elsdale Wills, Lieut.-Colonel Sir Gilbert Edgar, Clifford B. Montagu, Rt. Hon. E. S. Wilson, Daniel M. (Down, West) Elveden, Viscount Moreing, Captain Algernon H. Wilson, Colonel Leslie O. (Reading) Eyres-Monsell, Commander B. M. Morrison, Hugh Wood, Sir H. K. (Woolwich, West) Falcon, Captain Michael Mount, William Arthur Worsfold, Dr. T. Cato Falle, Major Sir Bertram G. Murray, John (Leeds, West) Worthington-Evans, Rt. Hon. Sir L. Farquharson, Major A. C. Neal, Arthur Yate, Colonel Charles Edward Fell, Sir Arthur Newman, Colonel J. R. P. (Finchley) Young, Lieut.-Com. E. H. (Norwich) FitzRoy, Captain Hon. E. A. Nicholson, William G. (Petersfield) Younger, Sir George Foreman, Henry O'Neill, Major Hon. Robert W. H. Forrest, Walter Ormsby-Gore, Captain Hon. W. TELLERS FOR THE NOES.— Fremantle, Lieut.-Colonel Francis E. Palmer, Brigadier-General G. L. Lord E. Talbot and Mr. Dudley Ward. Gardiner, James Parker, James Geddes, Rt. Hon. Sir E. (Camb'dge) Pearce, Sir William
CLAUSE 18.—(Deduction in Respect of Relatives taking Charge of Widower's or Widow's Children.)
(1) If the claimant proves that he is a widower and that for the year of assessment a person being a female relative of his or of his deceased wife is resident with him for the purpose of having the charge and care of any child of his, he shall, subject as hereinafter provided, be entitled to a deduction of forty-five pounds in respect of that female relative:
I beg to move in Subsection (1) to leave out the words "he shall, subject as hereinafter provided, be entitled to a deduction of forty-five pounds in respect of that female relative," and to insert instead thereof the words
"or if he proves that he has no female relative of his own or of his deceased wife who is able or willing to take such charge and that he has employed some other female person to undertake the same he shall, subject as hereinafter provided, be entitled to a deduction of forty-five pounds in respect of that female relative or other female person."
This subject was debated in Committee, and my right hon. Friend undertook that if we would submit words which would give effect to the argument then before the House, which would minimise as far as possible the chance of it being said that this provision would cause complications and undesirable connections, he would consider the matter. The words have been so framed as to make it now a question of proof that a man who wants to have this deduction has failed to get a relative of his own or a relative of his deceased wife who will undertake the charge of the children. We have narrowed it by these words to the very narrowest limits, and I understand my right hon. Friend will not offer further objection.
I beg to second the Amendment.
I took a share in the matter when it came before the Committee, and I recognise the consideration shown by the right hon. Gentleman and his desire to meet us if we could provide appropriate words. I sincerely trust he will be able to accept the Amendment.
Is not this rather dangerous? Supposing a man who has separated from his wife, or a widower, has a child, and chooses to live with another woman, he gets £45 reduction of Income Tax because he says this other woman is looking after his child, and his other female relatives are unable or unwilling to look after it. I think we are driving this craze for abatement to an excess which is quite unreasonable. This is solely putting a premium on vice.
This case was pressed upon me in Committee from all quarters. I was unable to accept the words which were then suggested, because of the encouragement which would be given to a class of cases which no one has any desire to encourage. Hon. Members who were interested asked me to consider the matter further, and I said if they bring their minds to bear on the subject and find a form of words to guard against that danger I should be prepared to come to its consideration with an open mind and with a desire to meet them. I cannot say the form of words which is chosen absolutely protects us against giving relief in cases where it is not deserved, but I think substantially it does. There would be hardly any cases open to the objection taken by my right hon. Friend (Sir F. Banbury), and I have felt, even while resisting previous proposals on other grounds, the difficulty of buttressing morality by means of taxation. On the whole, the more we confine ourselves to the business of raising revenue and the less we enter into extraneous objects the better. Under these circumstances I am prepared to accept the proposal. I only wish to say I hope every concession I make will not be used in the same Bill, or a year after, as an argument why I should do more. That is what happened a moment ago. The Amendment on which we have just divided would never have been before the House but for the concessions which I made last year and this year. I hope in making this concession it may be taken to settle the question and will not be made a jumping-off ground for a further Amendment next year.
On behalf of those who are interested in the matter, I thank my right hon. Friend very heartily for meeting what many of us think a very real grievance. My right hon. Friend (Sir F. Banbury) drew a most moving picture of a man who put his wife away, and lived with a woman under circumstances too horrible to think of, and I am sorry he should suggest it. But the Amendment only applies to a widower, so none of these terrible evils which he pictured could possibly arise.
Cannot a widower live with a woman?
No, I think not. There is no more reason to believe a widower would commit the offence which my right hon. Friend imagines in the case of the woman referred to in the Amendment than with a relative of the deceased wife. The picture he drew of a man putting his wife away and using this Amendment to escape taxation is quite impossible.
This Amendment refers to a widower. Am I right in assuming that it will also apply to a widow in similar circumstances?
I think we certainly cannot maintain any distinction between man and woman in similar circumstances. I am not quite certain about the wording as it stands. If that were so, I cannot put it right now.
Amendment agreed to.
CLAUSE 23.—(No relief where individual not resident in the United Kingdom.)
(1) Subject as hereinafter provided, no allowance in respect of earned income, and no deduction from assessable income, shall be given or made, and Income Tax on the first two hundred and twenty-five pounds of the taxable income shall not be chargeable at the reduced rate, under the foregoing provisions of this Part of this Act, and no relief shall be granted under Section thirty-two of the Income Tax Act, 1918, in the case of any individual who is not resident in the United Kingdom:
Provided that the foregoing provision shall not apply in the case of any individual who satisfies the Commissioners of Inland Revenue that he or she—
( a ) is a British subject; or
( b ) is a person who is or has been employed in the service of the Crown, or who is employed in the service of any missionary society or in the service of any native State under the protection of His Majesty; or
( c ) is resident in the Isle of Man or the Channel Islands; or
( d ) has previously resided within the United Kingdom and is resident abroad for the sake of health; or
I beg to move, in Sub-section (1, d ), to leave out the word "health" ["for the sake of health"], and to insert instead thereof the words,
"his or her health or the health of a member of his or her family resident with him or her."
This Clause renders a person liable for Income Tax if he is resident abroad, but there are certain exceptions to that, and one is, if he is resident abroad for the sake of his health. During the Committee stage this question was discussed and my right hon. Friend said he could not accept it straight away, but he would look into the question, and if it was put down for Report he would say whether he would accept it or not. I do not think I am really asking for a further concession. I believe as the law is carried out at present the wife's health is counted as the husband's health. Supposing the wife had to live abroad for the sake of her health; the husband, under existing circumstances, gets the same relief as though he had to live abroad for the sake of his health. This Amendment has merely been put down in order to make it perfectly clear that if a wife or a child has to live abroad for the sake of her health the husband or the father, as the case may be, gets the relief as though it was his own health.
I beg to second the Amendment.
Amendment agreed to.
CLAUSE 26.—(Relief in Respect of Dominion Income Tax.)
(5) Where, under Rule 20 of the General Rules applicable to Schedules A, B, C, D and E, a body of persons is entitled to deduct Income Tax from any dividends, tax shall not in any case be deducted at a rate exceeding the rate of the United Kingdom Income Tax as reduced by any relief from that tax given under this Section in respect of any payment of Dominion Income Tax.
I beg to move, to leave out Sub-section (5).
This Clause has reference to the repayment of sums which have been deducted in respect to Dominion Income Tax. We have at present a curious anomaly. There are two different practices in England and in Scotland due, I understand, to two separate decisions, the one in Scotland being that a preference shareholder is not entitled to a refund or repayment of the amount, and the decision in England being that he is entitled. There was a decision of the House of Lords so late as last Thursday which said a preference shareholder was not entitled to the refund of this amount either on moral or legal grounds. Those are the words which Lord Finlay used in delivering judgment. I therefore move this so as to put the matter on a proper footing, as it appears to me that the Sub-section, as it now stands, would perpetuate the practice which has been adopted in England, which is a wrong one. I hope we may have the practice put on the same footing in both countries.
I beg to second the Amendment.
Although I have subsequent Amendments on the Paper I shall be quite satisfied if this is accepted instead of my own. In fact, I think this goes further than mine does. I think it is necessary for the House to look at this matter a little more closely than it has done so far, because this Sub-section is rendering null and void an extremely important decision of the House of Lords last Thursday upon this matter which concerns practically every company registered in this country and carrying on trading operations in the Colonies. Judgment in the House of Lords was given in the case of the Scottish Union Insurance Company and the New Zealand and Australia Land Co., Ltd. Sub-section (5) of this Bill, paraphrased, means that a company which has paid both Dominion Income Tax and United Kingdom Income Tax must only deduct from the dividends of its shareholders, whether they are preference or ordinary, the net amount of Income Tax paid in the United Kingdom. Therefore, if a company has paid 2s. Income Tax in one of our Colonies and subsequently pays 4s. Income Tax here, instead of deducting 6s. it can only deduct, when paying dividend to both its preference and ordinary shareholders, 4s. in the pound. The case which was dealt with by the decision of the House of Lords last Thursday arose as a result of Section 43 of the Finance Act of 1916, which first dealt with the question of double Income Tax. The insurance company, who were the appellants, were the holders of £10,000 of preference shares in the New Zealand and Australian Land Company. The company carries on business in New Zealand and in practically all the States of Australia. It was assessed to Income Tax in New Zealand, in each of the States of Australia, and by the Commonwealth of Australia, and its remaining profit when they came over here were assessed to the United Kingdom Income Tax. Section 43 of the Finance Act of 1916 on which this case turns says: the Colonial Income Tax belonged to the ordinary shareholders, and that the preference shareholders had no interest in it.
The insurance company brought an action against the land company, saying that they had a right to participate in the concession that had been granted, and that the deduction of tax should have been at the rate of 3s. 6d., and not at the rate of 5s. The Second Division of the Court of Session in Scotland disallowed the claim, and the case went to the House of Lords, where judgment has been given by Lord Finlay, Lord Haldane, Lord Cave, Lord Dunedin and Lord Shaw. Lord Finlay used some very strong language in his judgment. He said that it was the company which had paid the Colonial tax and the United Kingdom tax. The preference stock holders had paid by deduction the United Kingdom tax, but they had not paid the Colonial tax. The Colonial tax was paid by the company, and by it alone. It could not be contended that in paying Colonial tax the company acted as agents for the preference stock holders. He then went on to say: curred. By Sub-section (5) we were tearing up that judgment and saying that the preference shareholders in any company which pays Colonial Income Tax are entitled to the benefits of the rebate. To put it in another way, we were saying to the preference shareholders who are entitled to four, five, or six per cent. as the case may be, "Though you are entitled to six per cent., less tax at the rate of 6s., we are going to give it you less 4s. in the pound," which means that we are giving a higher dividend to the preference shareholders than they have agreed to accept, and we are doing it at the expense of the ordinary shareholders. I will give an example. Let us assume that there is a company which has a capital of £200,000 in five per cent. preference shares, and £100,000 in ordinary shares, and that it carries on business in a Colony, where the colonial tax is at the rate of 2s. in the pound. We will further assume that the company makes a profit of £11,000 before paying out Colonial, or United Kingdom tax. That amount of £11,000, gross, has to pay to the preference shareholders £10,000, which is at the rate of five per cent. on £200,000. That leaves £1,000 for the ordinary shareholders which, on £100,000 of ordinary capital, means one per cent. dividend. The £11,000 profit is subject first of all to a 2s. Colonial tax, which would amount to £1,100. It is then subject to the United Kingdom Income Tax of 4s. in the pound, which amounts to £2,200, leaving £7,700 net to be distributed. If we follow the judgment of Lord Finlay the preference shareholders would receive their £10,000 less 6s. in the pound, which means a £3,000 reduction, leaving £7,000 to be paid over to the preference shareholders. The net amount available for the company with which to pay is £7,700. Therefore, when they have paid £7,000 to the preference shareholders there is £700 left for the ordinary shareholders, which is equal to the sum of £1,000 on the ordinary shares gross, less 6s. in the pound, namely, £700. Therefore, the preference shareholders would get their five per cent. less tax and the ordinary shareholders would get his one per cent. less tax, and everybody would be satisfied.
The Chancellor of the Exchequer then puts in this Sub-section and provides that the preference shareholders are not to have 6s. in the pound deducted from their shares. He says, "The company has only paid 4s. in the pound in the United Kingdom. It has paid 2s. in the Colonies and only 4s. in the United Kingdom. Therefore, I shall only allow the company to deduct 4s. in the £, when it pays its preference dividend." That means, from the example I have given, that from the preference shareholders' dividend of £10,000 only 4s. in the pound is to be deducted, which will be £2,000. Therefore, the preference shareholders would have to receive £8,000. But the company has not got £8,000 net. It has only £7,700 with which to pay the full preference dividend and only one per cent. to the ordinary shareholders. If it has to pay £8,000 it will be £300 short, and would have nothing for the ordinary shareholders. That is grossly unfair to the ordinary shareholders. It is going completely against the judgment that has been given in the House of Lords, and is, in effect, giving to preference shareholders of companies who pay the Colonial Income Tax, a higher rate of dividend than the Articles of Association allow.
May I try to anticipate to a certain extent, as far as I imagine them, some of the objections of the Chancellor of the Exchequer? He will probably say, "If I allow 6s. in the pound to be deducted from the preference shareholders, although the company has only paid to me the net amount of 4s. in the pound, these; preference shareholders, if they are entitled to claim repayment from the Inland Revenue, will claim it at the rate of 6s. in the pound which has been deducted from their dividend, and not at 4s. in the pound. Therefore the Revenue may be in this position, that they have only received actually 4s. in the pound and the preference shareholders are claiming repayment at the rate of 6s." The chief way in which the Chancellor might lose revenue would be in the case of a man who has a large holding in preference shares in a company like this, who has had 6s. deducted by the company and 4s. only has been paid to the Exchequer, who has made a loss in another business, and under the 1890 Act would claim a set-off of the loss made on that other business in respect of the tax deducted from this preference share dividend. Such cases must be very few indeed. In an endeavour to meet that point, I have another Amendment on the Paper. If we pass this Sub-section and put on the ordinary shareholders of companies which are paying Colonial Income Tax the whole of the burden, and do not give them and them alone the concessions which we are now giving with regard to double Income Tax, we shall be doing something which is unjust, and we shall be rendering null and void the very important judgment in the House of Lords.
I am not surprised that this question has been raised or that reference has been made to the judgment in the House of Lords. The point of view of that tribunal is not the point of view on which we can regard the matter here. That the Mover of the Amendment has seen, and he has endeavoured, as far as he can, to meet the objections which naturally occur to him. It is quite clear that the Amendment would cause us to give an abatement of taxation which might be in excess of the taxation we had ourselves levied. That, of course, was never the intention. In order to provide against such a result the hon. Member has put on the Paper two Amendments of his own. One of them would withdraw a relief given by the Bill and the other would involve complicated administrative provisions and actions for which I think his words insufficiently provide. If the House wanted to take that line, they would require to have the machinery worked out with greater detail and to give specific powers to the Commissioners to enforce them. I hope the House will not take that line. One can easily imagine cases where the effect of the hon. Member's proposal would be to give total relief to the ordinary shareholders from Income Tax in this country. Another reason why I hope the hon. Member will not press his Amendment, and why I trust I may be excused from arguing in detail, is that the arrangement embodied in the Bill was a matter of negotiation with representatives of the Dominion Government. The payment of double Income Tax has long been a grievance. It is a difficulty with which none of my predecessors has seen his way to deal, and when the Income Tax Commission was formed we asked them to consider the question and to invite the Dominion Governments to name representatives to, confer with a Committee of the Commission. The result is the solution in the form in which it is embodied in the Bill. I would not like to, make any change without further consultation with the Dominions. Whatever hon. Members may feel as to the arguments adduced in favour of the Amendment, I hope they will accept what I have stated as an overriding argument in the present ease.
I am familiar with the arguments on this subject, because I had much to do with it when I was at the Colonial Office. The statement of the Chancellor of the Exchequer, I am sure, will have weight with everyone in the House. I think, however, that the right hon. Gentleman cannot have observed that in the case of an Amendment which stands in the name of the hon. Member (Mr. Holmes), and is to be moved later, there could be no question of breaking any understanding with the Dominions. In so far as the Chancellor's arguments refer only to the Amendment now under consideration, they hold good, but in relation to the second Amendment his argument does not seem to apply.
The decision of the House of Lords was delivered only two or three days ago, and I do not think it has yet been properly digested. In Scotland and in England companies are following different courses. In Scotland they have deducted from preference dividends Income Tax at the rate of 6s. in the pound, and in some English companies they are deducting Income Tax at the rate of only 4s. 6d. in the pound. That is a most vital point with regard to the value of preference shares as compared with ordinary shares. The matter is worthy of further consideration. The decision of the House of Lords could not have been considered when this Clause was drafted, for that decision had not then been reached.
May I ask in what way my Amendment will conflict with any arrangement reached with the Dominions? It simply raises the question whether preference shareholders or ordinary share holders in a company in this country shall have the advantage of what is proposed.
The whole method embodied in the Bill was part of the agreement to which we came, and I do not think I can make any change at this stage of the Bill, or even this year; but I am ready to look into the matter again. I agree that it is a very difficult problem.
Amendment negatived.
CLAUSE 42.—(Continuance and Increase of Rate of Excess Profits Duty.)
(1) The Finance (No. 2) Act, 1915 (in this Part of this Act referred to as "the principal Act"), shall, so far as it relates to Excess Profits Duty, apply, unless Parliament other wise determines, to any accounting period ending on or after the fifth day of August, nineteen hundred and twenty, and before the fifth day of August, nineteen hundred and twenty-one, as it applies to accounting periods ended after the fourth day of August, nineteen hundred and fourteen, and before the fifth day of August, nineteen hundred and twenty.
(2) Section thirty-eight of the principal Act shall, as respects excess profits arising in any accounting period commencing on or after the first day of January, nineteen hundred and twenty, have effect as if sixty per cent of the excess were substituted as the rate of duty for forty per cent. of the excess, or, in the case of an accounting period which commenced before that date but ends after that date, as if sixty per cent. were substituted for forty per cent. as respects so much of the excess as may be apportioned under this Part of this Act to the part commencing on that date.
In calculating any repayment or set off under Sub-section (3) of Section thirty-eight of the principal Act any amount to be repaid or set off on account of a deficiency or loss arising in any accounting period commencing on or after the first day of January, nineteen hundred and twenty, or, in the case of an accounting period which has commenced before that date but ends after that date, on account of so much of the deficiency or loss as may be apportioned under this Part of this Act to the part commencing on that date, shall be calculated by reference to duty at the rate of sixty per cent.
Any additional duty payable by virtue of this Section in respect of a past accounting period may be assessed and recovered notwithstanding that duty has already been assessed in respect of that period.
(3) In the case of any person who has served during the War as a member of any of the naval or military forces of the Crown, or in the service of a naval or military character in connection with the War for which payment was 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, and who has commenced business for the first time after demobilisation or discharge, line six of Section thirty-eight (1) of the principal Act shall read as if the word "five" was substituted for the word "two."
8.0 P.M.
I beg to move, in Subsection (1), to leave out the words "fifth day of August" ["and before the fifth day of August, nineteen hundred and twenty-one"] and to insert instead thereof the words "first day of January."
We now come once more to the vexed subject of Excess Profits Duty. We have had two long debates on this matter, and while I venture to think our discussions were somewhat prejudiced by a newspaper campaign which enabled the Chancellor to ride off with the spoils, there is no doubt whatever that throughout the whole business community there has been great fear of the results of a continuance of this tax beyond the end of August next. My Amendment is that the Excess Profits Duty shall cease as at the 31st December next. The Bill as it stands carries on the Excess Profits Duty for any accounting period ending before the 5th August, 1921. That has been the custom in each Finance Bill since the Finance (No. 2) Bill of 1915. My Amendment is that Excess Profits Duty shall be charged for all accounting periods up to and including the 31st day of December next, and that after that date no Excess Profits Duty shall be charged. This proposal will in no way affect the Chancellor's revenue for the current year, 1920–21, and only affect to a very slight extent, if at all, his revenue for 1921–22. If, therefore, he accepted this Amendment he would have practically two years to consider whether it was necessary for anything to take its place. He may find that Government expenditure has been so decreased that the Excess Profits Duty can be dropped without affecting the Income Tax or Corporation Profits Tax, and without his having to think of any new tax. The Government have held out to us various promises of reduced expenditure. They have appointed economy Committees to investigate the expenditure of different Departments, and see whether anything can be done in these Departments to reduce expenditure. The Chancellor of the Exchequer tells us that he is daily and weekly endeavouring to persuade his other Departments to cut down their expenditure. To a certain extent expenditure for which the Government is not responsible may be forced upon the country. Last week the Chancellor was apprehensive that, as a result of the situation in Poland, and action the Government might have to take, a large expenditure would have to be thrown upon the Treasury which had not been anticipated at the time he framed his Budget, and which would possibly have not only taken away the whole of his surplus which is to go to the reduction of debt but have involved him in a second Budget for increased taxation. This morning, happily, the news is such as to make one hope that that will not be necessary. At the same time it is necessary to admit that the Government may have expenditure thrown upon them which they have to undertake and which it is beyond their ability to control or to refuse. Every Member of the House, however, is exceedingly zealous in cutting down all Government expenditure to the minimum, and when that is done, and if that is done —it will be better to say "if" rather than "when"—and if the Chancellor of the Exchequer sees any hope of it being done, then I think there is no reason why he should fear to accept the Amendment which I have put on the Paper. His Excess Profits Duty gives him £300,000,000 a year.
I do not know whether the officials at Somerset House have ever worked our, the average time which is taken to settle the assessment for an accounting period, and to obtain the money in respect of that accounting period, but I venture to think it is nine months to twelve months on the average. If a company winds up its accounts on the 31st December in any year, the Excess Profits Duty computation, settlement, and in some cases appeal, and then the final payment of the duty into the Exchequer, does not take place until the following September, or even the following December. Some of us know the difficulties that arise. It is not by firms endeavouring to keep back their accounts or wilfully delaying the assessment by various methods, but simply because there are so many matters that have to be gone into. In the first place, the company has to make up its accounts, and the larger the company, the bigger its ramifications, the higher its profits, the longer it takes to get out its accounts, and, similarly, when these accounts reach the local inspector of taxes, the more points have to be gone into by that inspector, and the more is the opportunity for evasion, and the more closely, therefore, does the inspector of taxes have to scrutinise the accounts, and ask questions with regard to them.
I would like to say, having been the one who first raised the question of evasion in this House, and the ways in which it is sometimes carried out, and having seen a great deal of inspector of taxes in various parts of the country, that they do sometimes, to the annoyance of one's clients, endeavour to probe with the greatest assiduity into every item of expenditure which is shown on the profit and loss account of the firm whose accounts are submitted to them, and in order that they may ascertain whether every expense which has been charged up against that profit and loss account is a fair and proper one, they sometimes, with unnecessary persistence, one feels, ask for particulars and cause a long correspondence. If any suggestion was made in this House by me or by anyone who spoke in the previous Debate which seemed to suggest that there was laxity on behalf of the officials of the Inland Revenue with regard to that matter, I should like to take this opportunity of saying that to my personal knowledge that is not a right charge to make. The reason I ask the House to insert the 31st of December, 1920, is because I fear that by the end of the year we shall have a great deal of unemployment throughout the country. In the Debate on the Committee stage it was suggested, and it was in the minds of most business men already, that in certain towns there are a great number of people unemployed. The Chancellor of the Exchequer was inclined to make light of it, and said that whilst the suggestion was made from this side of the House of unemployment in various parts of the country, his information was quite the contrary, and that in fact employment was better than it had been. At the same time he admitted that there had been some changes in the business world since the Debate on the Budget Speech. I do not know whether the Chancellor has changed his view in any way since the Committee stage, and whether he is still as sanguine that we are not going to have unemployment next winter. So far as the inquiries I have been able to make from various business men from different parts of the country who have been up in London and have discussed this question are concerned, I find wherever one goes, whether it is South Wales, or Lancashire or Yorkshire or the Midlands, there is grave fear everywhere that by the time the winter comes we shall be face to face for the first time for many years with this very grave problem of unemployment. Excess Profits Duty has various evils. One of the principal evils is that it is prevent- ing men starting new businesses. When the Chancellor reduced the duty from 60 per cent. to 40 per cent. he gave a great fillip to the commencement of new businesses. That concession was increased by the fact that a large number of men immediately after the five years were anxious to start business on their own account, and were ready to seize opportunities, and were helped by their friends with capital, so that instead of accepting employment they might start business on their own account, and try to make up for the five years of War which had been taken out of the period of their lives.
It being a quarter past Eight of the clock, and leave having been given to move the Adjournment of the House under Standing Order No. 10, further Proceeding was postponed, without Question put.
Ireland
Disturbances, Belfast
I beg to move, "That this House do now adjourn."
I do not think that there ever was an occasion when a representative of this House rose with feelings of such indignation as those with which I am inspired on this occasion. I endeavoured to-day, in pursuance of my responsible public duty, to call attention to a series of occurrences in Belfast and the North-East of Ulster which ought to have aroused equal anger in the breasts of human men in every part of the House. I regret to say that in discharging my duty to my constituents, and in my endeavour to draw information as to the condition of affairs in Belfast, I was met with nothing but a roar of protest and an outburst almost of abuse from English Members in this House. One would have thought, if there is a spark of chivalry left in the English breast, that there would have been some sympathy not only for the cause but for the representative of that cause. It was the cause of a small minority of people in a great industrial centre protesting against the inhuman treatment to which they were subjected without the slightest justification, and the representative was one of that small band of men who come here to this House in the hope, hoping against hope, that there might be some chance of seeing justice done to men so persecuted, as those men has been persecuted within the last week. But if I had ever hoped for sympathy I hoped in vain, and I do not expect, outside whatever sympathy is given to me by the Labour Members of this House, much sympathy even now, and therefore I shall not be disappointed. Every Member of this House who has read the newspapers during the last few days will have noticed for himself what has been taking place in Belfast. That city has been the storm centre from which the voice of the loyal minority has been heard in the controversies over the Government in Ireland. They drew tears from the hearts of all who feel for minorities when they were claiming to be treated as a minority with the ultimate adjustment of the Irish question. We have seen their true spirit within the last few days, when, taking advantage of their own power as a majority, they have not only waged war upon the liberty of their fellow citizens, who are smaller, considerably smaller, in numbers, but they have vindicated their claim to be treated with kindness and consideration in the settlement of the Irish question by waging one of the most inhuman wars upon the minority within their own city that has ever been chronicled in the history of modern times.
I am not at all sorry that I got very unsatisfactory answers to my questions to-day, because it is quite impossible for these matters to be frankly and clearly discussed by question and answer. Therefore I rejoice that I have the opportunity here to secure the Adjournment of the House, so as to be able to place the true facts of the situation, not before the House—I do not mind that very much—but before that large mass of public opinion in these islands which is not so completely lost to all sense of humanity as those who gave such manifestations of brutality as we witnessed in this House to-day. Within the last few weeks there occurred in the City of Derry a series of incidents culminating in riots. They were very bitter and very violent. There was much loss of property and there was great loss of life, and after it was all over the citizens of Derry came together and, recognising the evil-fruits of this violence in their city, decided to form a conciliation association for the purpose of bringing Protestants and Catholics together, that they might avert a renewal of these occurrences, and that they might combine to create a larger spirit of goodwill and concord in the future. They decided that the 12th July demonstration was not to be held this year. They knew that this demonstration, with all the poisonous influences of those violent diatribes against the faith and nationality of Ireland, would do untold mischief, and in a spirit of tolerant citizenship they decided to suspend their anniversary celebrations, with the result that peace was restored and has been maintained from then till now. That would have been a magnificent example to have been followed in Belfast.
The Nationalists acceded to that course in Derry because the Sinn Fein tactics had failed there.
The hon. Member knows very well that I always answer intelligent observations and even interruptions, but I would ask him to go and gather some intelligence before he interrupts. These gentlemen of Belfast decided that they would have the celebrations in Belfast. No one would have minded that, but in the temper of the province and in the light of what occurred in Derry, with the full knowledge before them of what tie fruits of these demonstrations are, one would have expected that when the demonstration was held the aristocratic leaders of these people would have gone to the demonstration and utilised it for the purpose of preaching peace and goodwill amongst the people. Instead of that, we have the right hon. and learned Gentleman the Member for the Duncairn Division of Belfast (Sir E. Carson) delivering a passionate speech to these followers of his under the intense excitement that always springs from these anniversary proceedings. There was no one troubling the right hon. and learned Gentleman. There was peace all over the province. The spirit of Derry was permeating the whole of the North, but he goes down and tells them they are in tremendous danger, they are face to face with terrible difficulties. They were to be called upon to protect themselves, not in Cork, not in Clare, not in Tipperary, where the Protestants were in an infinitesimal minority, but they were called upon to protect themselves in the great city of Belfast, in which they were so powerful and so overwhelming in numbers. What did he say? He said, "We will re-organise throughout the province the Ulster volunteers." The Ulster volunteers were the architects of all the anarchy that has taken place in Ireland during the last five years. They were the militant force that was to give strength and effective power to the revolt against the spirit of constitutionalism in these islands. They were the masters who taught the South of Ireland that only through armed machinery can you secure what you want, and having secured what they wanted, instead of remaining silent and sorry for all the misery and mischief they had brought on Ireland, and upon these islands, and upon the world, here in the midst of their own locality, in all their power and strength, he tells them that his solution of the Irish problem is to organise the Ulster volunteers, and then he goes on to say, "There may be another siege before long."
The right hon. and learned Gentleman is a very subtle rhetorician. As a rule he means what he says, but he was not very lucid in his declaration that there would soon be another siege. I should have liked him to be in the House this evening in order that I might ask him the question, What did he mean by another siege? But his illiterate followers, less subtle than he is, put their own interpretation upon his language, and they proceeded to show what they meant by it. His followers gathered in the shipyards, and they held a meeting. It was a glorious inspiration that rallied them round the shipyards. At this meeting they decided to drive out all the Roman Catholic workers, numbering two or three thousand. They were for years comrades and friends, common soldiers in the army of industry, agreeing on all the vital things that concern their economic and industrial life, and so they would have worked together for all time, and were working together, if it were not for the inflammatory oration of the right hon. and learned Gentleman, who went on the 12th July, not to preach the gospel of peace and goodwill towards men, but to preach the gospel of hatred and of militarism again; and they proceeded to put into operation the advice he gave them in the form which they understood best, and that was that they immediately gathered together, drew these men out of the works, chased them into the river, and when some of them swam in the river to the other side, they were met on the other side and beaten back into the river. What was their crime? They were Roman Catholics who did not force their religious views upon anybody nor did they ever introduce their religious views. [An HON. MEMBER: "Sinn Feiners!"] No, they were not Sinn Feiners. I do not know who the person was who interrupted with that expression. I am not a Sinn Feiner myself, and never was, but I would like the hon. Member, whoever he was, when he gets a chance, to rise on his feet and do what he never did before, state plainly to the House, is it his idea that even Sian Feiners are to be driven into the river— beaten into the river? [An HON. MEMBER: "Best place for them!"] Really we all know that the hon. Gentleman should be in another place rather than this. I wish now he would go back to the place from whence he came.
I must ask hon. Members to be good enough not to interrupt, and the hon. Member for Belfast to be good enough to address his remarks to me.
Certainly, I will address them to you. The Sinn Feiners have a right to live. They have a right to work. They have a right to discharge their obligations as citizens to themselves and to their families without attack. But the great bulk of these workmen are not Sinn Feiners. As I told the House the other night, they are constituents of mine, they returned me to this House by a majority of nearly 6,000 against the leader of the Sinn Fein party. An hon. Member says, "Would they do it now?" I do not know whether they would or would not, and I do not care. The hon. Gentleman is quite aware that he, and men like him, have not made this House sufficiently attractive for me to desire to remain in it. I hope when I have done with this House I will go to some assembly I believe in more than I do in this place. What happened? The organised mob, having driven the men from the works, invaded the Catholic quarters of the city, as a result of which many lives were lost and hundreds of people injured. Vast numbers of business houses throughout the city were broken into, and the residents driven out in the dead of the night, and their premises looted. I have no doubt that the hon. Member opposite will say a great many of those houses were public houses. That is quite true. There is not a town in the three kingdoms where there are more temperance organisations than in Belfast. There was a temperance demonstration only about a fortnight ago with about 50,000 people in it, and yet this community finds its highest joy in looting public houses and consuming quantities of liquor found therein. They proceeded then to drive the people from these houses, to loot the houses, to consume the liquor, and to create a universal saturnalia in each of these localities. Then they proceeded to attack one of the principal Catholic churches in the city. The first onslaught made on the church was on Thursday night, when a crowd assembled and threw stones at the sacred edifice. They made a determined attempt to gain entrance to the church. They climbed over the railings and they got into the church grounds. It was only at the last moment that the police and military succeeded in saving the building. Then they attacked the presbytery of the church, and they had practically complete hold of this district until the troops arrived.
These gentlemen did not believe in going halfway about their business. They proceeded to attack the convent adjacent to the Church of the Cross and Passion I know something about the work of these devoted nuns in the great city of Belfast. The ordinary teacher in our schools finds his or her task a very laborious one, even when it is well paid, but these good and holy women, who sacrifice their lives, give up all the material things that are worth working for and fighting for, enter into one of these convents and consecrate everything they have to give, and all that is theirs, for the sacred causes of justice, mercy, and pity. They were not free from the attacks of these infuriated members of the loyal minority who, coming fresh from their 12th of July proceedings, had turned up to manifest their devotion to the Union Jack by attacking the institution of these inoffensive and defenceless ladies. Above all things, the work of women of this character is most touching amongst a great working-class community. Wherever they go, their lives, their unselfishness, and their devotion to duty radiate sweetness, light and beauty. And yet, as I say, they were not exempted from the horrors of all this frightful attack which was made upon a community for no other crime than that that community differed from them in religion. I will deal with the question in a moment that it was reprisals because of Sinn Fein. These nuns were not politicians. These clergymen were not politicians. The great bulk of these working men were not politicians. Of the owners of the looted houses few were politicians, and I believe none of them were Sinn Feiners, and yet this war was waged upon them and this maltreatment was meted out to them for the simple reason that they differed from the followers of hon. Members opposite. They proceeded then to Clonard Monastery, and they attempted to attack the Monastery. Perhaps one of the most villainous slanders in connection with this campaign and propaganda was the statement that there was sniping from the spire of Clonard Monastery. That statement has been issued in the English Press. It has been repeated over and over again, and yet yesterday officially it was denied, and I have a telegram from the Rector of that institution to say that there is not the slightest shadow of truth in the statement.
All this went on. In my judgment, the Government were practically doing nothing. I do not think they were very much worried and annoyed at my making that declaration, because I have noticed that when they come to answer questions about this matter in the House of Commons, it is done in a light and an airy way as if of no consequence. It is only reprisals and things of that sort—that is the spirit and temper shown upon the Ministerial Bench in all the dealings with this question. What was the next thing they proceeded to do? I am bound at this stage—and I apologise for it—to introduce a personal note. I have, as many Members of this House are well aware, constituted myself, and have been so regarded, even by the most violent Protestants and Unionist partisans, as the representative of the working-classes of all creeds in Belfast. I have never allowed the question of religion or politics to interfere either with my action or my desire to defend the economic and industrial interests of the toiling masses in that city.
What about your attitude on the education question?
Is that another of the hon. Gentleman's intelligent observations?
Order, order. Will the hon. Gentleman who interrupted kindly learn the Rules of Debate? We will hear the other side of the case presently—not fragmentary interjections.
Amongst the class for whose interests I have most passionately fought are the workingwomen in the mills and factories of Belfast. I was the first to expose the sweating by the masters of the political party who sit opposite. I riveted public attention upon it. I ended it. I improved the conditions, through work in this House and on the platform, to an extent unparalleled in the history of the operations of any Member of Parliament for his people. I was profoundly desirous of helping them and serving them as best I could, and I did not care what was their religion or their politics, and, having got some leisure from Parliament during the last twelve months, I set myself the task of securing for them a holiday home in the watering place called Bangor, near Belfast, where they could go one week during the year and when off work during the 12th of July, and secure for them a well-earned rest and some measure of light and health which they had never enjoyed before. I made a private appeal to friends throughout the country. I secured nearly £20,000 for that scheme. It is a work of which I am proudest of any in all my public life. I never was half or a twentieth part so much attached to purely party political controversies as I am to what I conceive to be the more ennobling task of lifting the defenceless and the oppressed class. This is the result of it. We, as a Committee, purchased the Grand Hotel at Bangor, one of the most beautiful and healthy of all the buildings in that town. We equipped it and endowed it. Then it was handed over by me when I had secured most of the trustees. The building had not been purchased a month until these miscreants were writing party emblems across it. It was no more a purely party affair than is a trade council. Some of the most generous contributions towards the scheme were given to me by leading Unionists and Protestants. It was neither sectarian nor political. There was nothing of that kind within or without its walls. It had committed the cardinal existence that it was brought into existence by me. I complained to the police about this, privately, for I did not want any of the matters to be published in the papers.
When 12th July came round there were 200 girls taking their holidays in that home. I went down and I said, "I want to make an appeal." The overwhelming majority of those present were Catholics. There were very beautiful balconies surrounding the building where they sat during the day. Many of them were decrepit working women. This institution was not brought into existence purely to give young girls a holiday. It was created also for the purpose of taking the workers who were suffering from any organic disease and physically crippled by the crushing effect of the work in the mills and factories to the place to benefit by the stay. They were, I say, sitting out on these balconies, listening to the band. I appealed to them to close the balconies and sit inside for a couple of days while the 12th July celebrations were on. They did as I requested them, though each night a band and orators of the type of the hon. Member who has just interrupted me went down there and harangued those outside and denounced this institution as one of Devlin's Sinn Fein clubs. I wrote to the police authorities and asked them to keep an eye on this building. I said to them that they need not stand around the doors or attract attention, but simply keep an eye and see that nothing was done. I said to the girls, "Stay inside so that even your presence will not provoke these gallant and chivalrous empire makers and empire builders." They did so. We were told that some of these were determined to wreck this building. The fleet visited Bangor. On one of the days when the fleet was there the sailors were allowed a day off. I went to the police authorities to ask protection for the building. When I was there I was told by one of the officers that, "they have been telling the sailors that this is a Sinn Fein club, and advising the sailors to wreck it." The policeman who told me this said that when he heard that he told the sailors that there was not a word of truth in the statement. The English sailors, in reply to this that they were told, said it was one of the most infamous transactions they had ever heard in their lives. On the Friday there were rumours all day in Bangor that the place would be burnt. The girls were warned. The authorities were again not notified. I was not there, but one of the trustees who had stayed at Bangor was there, and, notwithstanding all I have related, there was no protection at all for the building.
Some time after midnight a number of men drove up in a motor car. I thought it was only Sinn Feiners who used motor cars. Within 15 minutes after their arrival a fire broke out. It was discovered that the place had been saturated with petrol, and that the fire had started in the ballroom—because we have a ballroom there. I made up my mind that that establishment should be no mean establishment, and that the woman worker in the mills and factories of Belfast would find herself as well housed and placed as any lady in the land. People in the building smelt the burning, and this alarmed the staff. The staff aroused the inmates. My information is from one of the trustees, and he said that if it had not been for that alarm every woman in that building would have been roasted to death. Some of the people who were drawn by the excitement to the building attempted to help, but they were driven off. It was openly stated on the Saturday morning or the Sunday that if everyone did not clear off they would be murdered. They did clear off. They are now at home, and the Empire is safe! These leaders of the Unionist party in Ulster may be well proud of their achievements in driving thousands of honest, decent, law-abiding working men from their citizen employment in wrecking and looting the houses of innocent citizens and shopkeepers, in sacrilegiously attacking a Catholic church, in trying to burn down a Catholic convent, and in trying to roast working women. They have been roasted long enough by their masters in the mills and factories, and they are now driven out, and the place is left empty. All this is done in the name of the Union, and for Union.
It may be said that, after all the Unionist cannot be held responsible for this. Is the House aware that, long before there was a single murder, of Colonel Smyth or anyone else, the "Belfast Newsletter" has been filled day after day and week after week with appeals to Protestants to dismiss the Catholic workers, and to Protestant people to drive the Catholic traders away out of the city. The Island matter may have been the action of the infuriated mob, drunk with the eloquence of hon. Members opposite, the looting of house may be the sequence of the attempt at destruction, the other events may have been all incidental circumstances of the initial campaign of the "Newsletter." The right hon. Gentleman and its editor sit gaily down and pen these appeals day after day, and publish in the paper the incitement to wage war, not on Sinn Feiners, but upon Catholics.
May I ask the hon. Gentleman if he can quote from any utterance of the "Belfast Newsletter" or any other paper in Belfast which has urged Protestants or anybody else to drive Roman Catholics out of Belfast?
If the hon. and gallant Member reads the "Newsletter," he will get all he wants there.
Quote some of these utterances!
This is done in the form of anonymous letters and everybody knows that they are done in the office. How can you carry on a campaign of this sort unless you have the name given? This is what appeared in the paper to which I have referred: mills and factories, the inhabitants of the hostels, nuns and priests, and the owners of Catholic property, and they must all look to the military agent of the right hon. Gentleman and his friends who have fomented and fostered all this mischief.
I really was horrified to hear the Chief Secretary say the other day that all this was caused by way of reprisals in consequence of the murder of Colonel Smyth. These, letters have been appearing for weeks before Colonel Smyth was murdered. The people who were attacked were not Sinn Feiners at all. What I want to ask the right hon. Gentleman is, does he lay it down that if the murder takes place of a policeman in the South, that the Catholics in the North are to be murdered as a consequence? Is that the morality of the Government, and is that to be the justification? If I thought so I would murder everybody on that Ministerial Bench. I would indeed. What do the English papers say about it? The correspondent of an English paper writes:
May I remind the hon. Member that the Methodist Conference at Cork was attacked at its last? Sitting?
9.0 P.M.
I prefer to take the view of the Methodist organisation from the lay representatives of the Methodist body, speaking with a full sense of responsibility, to the naturally ill-informed statement of the hon. Gentleman opposite. I ask the right hon. Gentleman to-day—and it was the only question to which he gave a definite answer—what compensation is to be made to these working men who are now out of emplowment and who will not be able to secure trade union wages? What compensation do the Government propose to give them for their unemployment, and what steps are to be taken to see that they are reinstated and protection given them when reinstated? Will adequate protection—military protection—be given to the churches and convents and other Catholic buildings in Belfast? Last Sunday the military who had been protecting the hospital were taken away, and, notwithstanding repeated appeals from those responsible, they have not been brought back. Why? I object to the Army of Occupation even in Ireland. I think it is a source of most of the evil and mischief. The right hon. Gentleman may say look at the war going on between Catholics and Protestants. But that is an incidental part of your system. I stated in my speech the other night, and I repeat it now, that the Government in Belfast are encouraging this religious, or rather irreligious, crusade, and they are doing so in order to draw attention away from their own maltreatment on the Irish question. That is the general impression, whether it be true or not.
The military were withdrawn from the protection of a Home the other day and have not been brought back. Again I say I object altogether to the Army of Occupation being there at all. If they were taken out of the country the people would much more effectively settle their own difficulties. [AN HON. MEMBER: "And murder each other!"] It is a fine arrangement which prevails. The military have to be in Ireland to crush the Nationalists, and when Unionists in the other parts of Ireland attack the Catholics they can depend on the military to defend them. That is a splendid arrangement. We desire that that arrangement should be broken through. What I claim is this; you have an Army of Occupation in Ireland. If they are to remain there, if their function is to defend law and maintain (Order, then let them do it impartially, and administer it to all parties equally. Hitherto it has not been an impartial administration. The Chief Secretary shakes his head. He is not in charge of the military; he does not place the forces. He said the other day, and I thought it was a very far-reaching statement, that he would place military men in a certain position and defend them no matter what they did. That was an extaordinary statement for a Minister of the Crown. Probably he was compelled to take up that attitude because of the prospects which then existed of defeating the Government over the Dyer Debate Do I understand that the whole of the forces for the protection of the minority and of the Catholic bodies are to be left under the control of the ex-Commander of the Forces of the right hon. Member for Duncairn as the head of the Provisional Government? Does the right hon. Gentleman expect people in Ireland, and especially Ulster Catholics, to accept mildly and meekly an arrangement by which this bitter partisan and this military functionary who was to lead the rebel army of the Member for Duncairn, is to have them at his mercy?
The hon. Member has put a question. He has asked are the military forces in Belfast under the command and dictatorship of General Hackett Pain. My answer to that is that General Hackett Pain has nothing whatever to do with the militay forces of the country or anywhere else.
Is he not in charge of the police for Ulster?
He is Divisional Commissioner for the Ulster area. He has nothing whatever to do with the military forces, and, as soon as a military command is set up, as it has been in Belfast since the outbreak of these riots, General Hackett Pain and every other policeman has come under the command of the General Officer Commanding.
I do not think the right hon. Gentleman has helped himself by that answer. Everybody knows that when the military forces are called into operation because the police force can no longer operate, a strange military officer naturally would not alone determine the methods by which the military force is to act. He would act on the advice of this gentleman, who, I understand, is in charge of the whole police force in Ulster. Has the House of Commons ever heard anything like that? Will the House believe it? It was only the other day I saw it myself, and I was aghast. De Valera might as well be put in charge of the military forces in the rest of Ireland. I know nothing of this man. I know a short time ago he proclaimed one of my meetings in the county of Tyrone, as he said in order to preserve freedom of speech and to maintain law and order. Brigadier-General Pain occupies the most extraordinary position ever known in constitutional government, and the Government that put him there are engaged in the task of provoking the entire community in Ulster. I never heard a more extraordinary proceeding in my life, that when an institution in which I am interested is in danger, and I ask police or military protection, I must go for it to the military Governor of Sir E. Carson's Provisional Government;, and that is the only way in which I can get satisfaction. We have not heard the last of this.
It is perfectly clear to me that if you want to justify—you have not done it yet and never will do it—but if you want to justify to the mind of any intelligent or enlightened citizen the occupation of Ireland by an army, if you say that you will be the rulers of Ireland, I assert here to the House of Commons to-day that anything more extraordinary in the methods by which you want to convince the people of impartiality I have never heard in my life. Do not repeat the doctrine of reprisals, I beg of you not to repeat that doctrine. It is as dangerous as the other doctrines which have led along the path of anarchy which have created an Ireland aflame with passion that has aroused and is arousing the hatred of the whole civilised world against your rule, and you are adding now to it the policy proclaimed from those Benches of reprisals. Women may be killed, convents may be burned, churches may be wrecked, premises may be looted. Citizens who have nothing to do with political organisations or may have just as they please, are to be told that they are to be the victims of these political passions that have manifested themselves elsewhere in a way that is to be deplored. That is the new doctrine.
If you proceed with it you will hear more about it. Meantime I have discharged my duty, one of the few left to me in this House, of raising this question here on behalf of my constituents. If I do not get satisfaction you will drive these people as you have already driven constitutionalist Nationalists. You have not left a man in Ireland a leg to stand on; you have left three or four here in this House whom you shout at and howl down when we dare to do our duty to our constituents and manifest the same intellectual brutality towards us that your military machine manifests towards our people in Ireland. All I have to say is that when the game is over and when the battle has been won some way or other, or when this has been ended, we at least are satisfied that we have done our duty.
I beg to second the Motion.
My object in seconding is to take the opportunity not as a Sinn Feiner, because I am not a Sinn Feiner, not as a son of Irish parents, but as the responsible head of a trade union that has as its constituent parts members some of them Sinn Feiners, some of them anti-Sinn Feiners, and I want to take this opportunity because of the incidents that are happening in the city of Belfast to-day. I want to corroborate what the hon. Member for the Falls Division has just said. This is not confined only to the Sinn Feiners. It has gone further. This morning I had alarming news from Belfast of my own organisation. Men who have worked together harmoniously for years and years, Protestant and Catholic, on the docks of Belfast, are to-day divided into two hostile sections, the Protestant element, influenced by the 12th July outrage, are to-day driving the Catholic element of the same union from their work at the docks. It will be within the recollection of this House, and my hon. Friend the Member for the Scotland Division of Liverpool will bear me out, that only a very short time ago, when an attempt was made by a section of Sinn Fein in the Liverpool docks, whatever tendency or sentiment I may have towards Ireland, I took the responsibility in this House of denouncing any attempt of any section of the organisation, be they Sinn Feiners, Protestants, Catholics and anti-Home Rulers, of endeavouring to disturb the industrial peace of the city of Liverpool. I now take the same opportunity of denouncing any attempt on the part of any one inside or outside this House of raising that hatred that exists between the two people, members of the one union with different opinions, to the detriment of the industrial benefit of the men that I represent. As to what is happening to-day in Belfast the same thing applies. I want to remind the right hon. Gentleman the Irish Secretary that I and my colleagues on these Benches are persistently setting our faces against any attempt to use the industrial weapon for political purposes. We shall continue to do that, but it is making it very difficult for us to sustain that attitude in the face of what is happening to-day. Only this afternoon I had messages from Belfast to say that the situation there is getting more intense every hour and the spirit that has been raised by these incidents on the 12th July is alone responsible for the dissension and division amongst the members of my own organisation. I noticed when the hon. Member for the Falls Division was speaking that some Members all through his speech had a distinct sneer on their faces.
I do not care.
But I do. I want solemnly to warn them that this kind of thing is going to make it impossible for us to keep industrial peace in this country and elsewhere. The spirit of reprisals will, sooner or later, bring about the very thing that these gentlemen profess they want to keep down. I do not want to detain the House at any length. I only want to put these facts before it. There, was a time in Belfast, and the hon. Member for the Falls Division will remember it, not very long ago, when democratic industrial thought was finding its way even to Belfast. I remember the time, and he will remember it, too, when you could go down to Belfast and in the open square there speak trade unionism and social reform to an audience of thousands. We have had an organisation in Ireland for the last twenty-five years, and every time we have made any attempt or any progress, the same bitter feeling was introduced on the 12th July to break down the organisation that we have built up in Ireland. That thing is going on to-day. I do not profess, and I am not going to attempt, to go into the details or the ethics of the pros and cons of the present Irish controversy. All I do so say is, and I want the right hon. Gentleman the Irish Secretary to take a note of it, that unless something is done, and done speedily, to put an end to this business—I am not much concerned with what shape it takes—we can no longer be responsible, we can no longer take the responsibility for keeping the peace, either on that side or this side of the Channel. It appears to me that, every time we attempt to do something to bring about peace of an industrial character, a deliberate attempt is made to divide the people by means of the very weapons of which the hon. Member for the Falls Division complains. I can scarcely trust myself to say what is in my mind. I will only again appeal to the Irish Secretary, and those who act with him, as speedily as possible to put some machinery in operation to end this horrible business once and for all.
The hon. Member for the Falls Division of Belfast has moved this Motion at great length, and he finished his speech by demanding from the Government military protection for the Roman Catholic workers in Belfast, who, he states, have been and are subject to maltreatment by their Protestant comrades. When I heard him conclude his speech in that way, I could not help wondering what was passing through the mind of the right hon. Gentleman the Member for Derby (Mr. J. H. Thomas), who is sitting there on the Front Opposition Bench. We know that he, as representing the great Trade Union Congress, which passed a resolution the other day in favour of direct action on the Irish issue—we know that he has demanded from the Government the immediate withdrawal of all the troops from Ireland; and yet we have the hon. Gentleman opposite demanding the protection of those very troops for those on behalf of whom he speaks. Of course it is obvious to any man, and I am perfectly certain that the right hon. Gentleman opposite sees it, that, in the present unhappy and deplorable condition of affairs in Ireland, you must keep the British troops, whether they be in the North or whether they be in the South, whether for the purpose of protecting loyal people in the South or for the purpose of protecting Roman Catholic workmen in the North—for any of those purposes and for all of them it is absolutely vital to maintain in Ireland at this moment a British Army of sufficient size to keep the peace in that most distracted country.
I may, perhaps, remind the hon. Member for the Falls Division that it is owing to the action of my right hon. Friend the Member for Duncairn, and of us, his colleagues on this Bench, that there were sufficient troops in Belfast when this outbreak took place. About a month ago we Ulster Members, as the result of all that has been taking place in the South of Ireland, became anxious with regard to the position of affairs in Belfast. We knew that there was a feeling of great unrest among the people of Queen's Island. We knew that both the Unionist party and the Sinn Fein party in Belfast were watching each other, each afraid that there might be some outbreak on the part of the other. With that knowledge in our minds, we Ulster Unionist Members went upon a Deputation to the Prime Minister about a month ago and urged upon him, in view of the critical state of affairs in Belfast, the necessity of sending sufficient troops to that city to preserve law and order incase any unfortunate outbreak should take place. I would point out to the hon. Gentleman opposite that our action in demanding sufficient troops for Befast was taken long before the 12th of July demonstrations, and long before any of the speeches were made of which he complained. Any sensible man must have known—the hon. Gentleman himself, of course, knew perfectly well - that for months past the position in Belfast has been acute, and that it has only been with the greatest difficulty on both sides that order has been maintained. When I heard the hon. Gentle man speak, I could not help thinking to myself what a curious thing it was that he should be moving the Adjournment of the House to-night upon this particular question. He has moved the adjournment of the House in the interest of his coreligionists, who, he considers, are being subject to persecution; and yet, at this very moment, as every hon. Member in this House knows only too well, his Roman Catholic countrymen in other parts of Ireland are being foully murdered day by day. In this morning's paper we have the account—terrible, indeed, it is—of a Roman Catholic police sergeant, as he went in to Mass—as, in fact, he was upon the point of dipping his fingers in the holy water for the purpose of making the Cross upon his chest—at that very moment he, a co-religionist of my hon. Friend, was shot dead. He was foully murdered, and lies dead in the very porch of a Roman Catholic church in the South of Ireland. The hon. Gentleman does not move the Adjournment of the House on that question. He allows his Roman Catholic friends to be murdered day by day in the South of Ireland and never raises a finger to protect them.
That position of affairs has existed for months past, and yet to-day, the moment disturbance breaks out in Belfast, he comes here in the interest of his own constituents and raises this question. The persecution of his co-religionists throughout Ireland at this moment is far greater in the South and West of that country than ever it may have been in Ulster during the last week. I know from my own personal experience that numbers of Roman Catholic workmen in the South and West of Ireland for many months past have been hounded out of their employment because they would not obey the behests of Sinn Fein. A cousin of mine has a farm in a county in the West of Ireland, and he employs a certain number of workpeople. A few months ago, every one of those workpeople—farm labourers—rsceived letters signed by "Rory of the Hills," or some person of that kind, threatening them that if they dared to go back to their work on the morrow, they would have to meet their death. Every one of them stopped work, as, of course, he was bound to do, because in that very district, a few weeks before, a herdsman had been found tied to a tree in a wood, battered to death, with his brains and his blood scattered upon the branches of the tree and upon the grass around. Of course, every one of those men was a Roman Catholic. They wrote to my cousin afterwards and told him that they had been satisfied in his employment, that he had been a good employer, but that they were bound to leave him owing to the terrorism and to the fact that, if they stayed, death would await them at the hands of the great Sinn Fein organisation. And yet all these things may happen and the hon. Member (Mr. Devlin) never raises his voice to protest against them in any degree whatsoever. I deplore the occurrences which have taken place in Ulster during the last week. Retaliation does no good. There were people who clamoured for retaliation during the War with Germany, but it was recognised that the honour of this great country was in better keeping without resort to retaliation. Even more than retaliation do I condemn anything in the nature of a religious war in Ireland. If there is one horror which would leave Ireland desolate, overcome, abandoned to everything, it would be such a catastrophe as a religious war within her shores. I look upon the very prospect of such a thing as the greatest calamity that could possibly exist anywhere in the, world. I look upon it with horror, and I repudiate any such thing as these attacks upon Roman Catholic churches which have, I believe, taken place in Belfast. The great majority of the Protestant population in Ulster are utterly opposed to any such proceedings as that. These attacks upon the churches are carried out simply by the hooligan element in the population, and they have absolutely no sympathy whatever with the great bulk of the Protestant people in the Province.
In discussing these unfortunate riots we must look to see what has been the cause of them. In spite of what the hon. Member may say, there is no doubt in my mind, nor, I think, in the mind of anyone who reads the Irish news at all carefully, that the immediate cause of the rioting in Belfast was that truly deplorable murder of Commissioner Smyth. He was an Ulster Protestant. He and his family came from the very heart of the county of Down. He had served gallantly through the War. He was wounded either five or six times. The first time he was wounded he had his arm amputated and yet went back into the firing line with only one arm, and was wounded four or five times afterwards. No man in the whole history of the War rendered his country more magnificent service as a soldier, and he was foully done to death by a gang of murderers in Cork. That was the proximate cause, but before that, other outrages had occurred which had greatly incensed the feeling of the Ulster people. There had been the murder of a Mr. Redmond in Dublin. He was one of the chief officials in the Royal Irish Constabulary, a man who was well known and well loved in Belfast. That, I think, was the first occasion upon which the feelings of the Ulster people were really strongly incensed against the Sinn Fein organisation. Then we had the murder during the Derry riots of that poor boy, who also served his country during the War, who was on leave. He knew nothing whatever about politics, and cared nothing whatever about Sinn Fein and Unionism or Roman Catholicism and Protestantism, except that he was the son of a prominent Unionist and no doubt if he had any politics he was a Unionist, but politics was not his sphere of life. He was a soldier, and that boy was foully done to death in Derry by members of the Sinn Fein organisation. These things coming one after the other, mounting up during many months, raised an accumulation of feeling throughout Ulster, and much as I deplore it, it would have been almost an incredible and an impossible thing if sooner or later there had not been some outbreak on the other side.
The disturbances which have taken place were not primarily religious. In Banbridge, County Down, the burial place of Colonel Smyth, there were disturbances, but they took the form of a protest on the part of the Unionist population against certain people in the city who, when the funeral cortege of Colonel Smyth was passing through the streets, refused to close their shops or to show any mark of respect to the memory of that gallant gentleman. Those people's businesses were attacked a few days afterwards. They were not attacked because they were Roman Catholics. I do not know even if they were Roman Catholics. They were attacked because, when the body was passing within a few yards of their doors, instead of exhibiting the ordinary marks of respect and closing their shops, they carried on their business as usual and flaunted their disagreement with the views of the bulk of the population, and can you wonder that, under those circumstances, a few days later, after disturbances had broken out in Belfast, the loyal people of that district demonstrated against and even attacked the shops of these people? These disturbances are the outcome of the pent up feelings of months, in view of the long category of Sinn Fein outrages which have taken place. I do not think the Sinn Fein movement, as a whole, is a religious movement at all, in the first place, because the people who are being killed by the Sinn Feiners are essentially Roman Catholic people. The great bulk of those who have been murdered by the Sinn Fein organisation are Roman Catholics and co-religionists of the hon. Member. Secondly, it does not seem to be a religious movement, because these extreme doctrines and these murderous attacks surely must be contrary to the tenets of the Church to which the hon. Member belongs. Surely it cannot be a movement of the Roman Catholic Church. But can you blame the Ulster Protestants for thinking that it is, to a great extent, a movement inspired by the Roman Catholic Church? To a great extent, they do believe it, and I do not think you can blame them. Can you blame the working men of Ulster that they think Sinn Fein is largely a Roman Catholic movement? I do not think so. The reason why they think so is that ever since the Sinn Fein movement began, although in so far as the Sinn Feiners profess any religion at all they are essentially people of the Roman Catholic faith, never on one occasion have the leaders of the Roman Catholic Church taken any steps to denounce the outrages and murders which the Sinn Fein organisation is carrying on.
I will give you the names of a dozen, from Cardinal Logue downwards.
I do not think that what I am going to say will be in any way affected by what the hon. Member has said. I say, and I repeat, that the Roman Catholic Church, as a body, as an organisation, which is all-powerful in Ireland, and to which the great bulk of the population belongs, has never come out into the open and denounced the perfidy of Sinn Fein. There have been, no doubt, individual Bishops of that Church, who on various occasions have denounced murder on principle, and particular murders in detail, but I do not think I can be contradicted when I say that that Church as a whole, the Roman Catholic hierarcy as a body, have never once come out and denounced, as they should denounce if they believe that they are worthy of denunciation, the crimes of Sinn Fein They have not come out and denounced Sinn Fein in the way they came out to combat the attempt to impose conscription in the South of Ireland. They came out as an organisation at that time, and they carried on a campaign which showed the power of which they are capable when they really come out and take up a ques- tion. They have never come out in that sort of way to denounce the crimes of Sinn Fein.
Has there been a meeting of the Protestant Bishops to denounce these attacks on Catholics?
I have no doubt that the Protestant Bishops reprobate and deplore as much as I do, and as much as every decent Protestant in Ulster does, any attacks upon Roman Catholic churches or institutions throughout that province, and I have no doubt they will denounce them. In fact, they have already done so Why, has not the Pope himself come out to denounce the Sinn Fein criminals?
I did not know that you you were anxious about the Pope unless it was to denounce him on the 12th July.
I think the hon. Member's interruptions are a little irrelevant when I am endeavouring as moderately and as fairly as I can to put before the House a particular line of argument. The Pope, the great head of the Roman Catholie Church, never has come out and publicly denounced the Sinn Fein crimes in Ireland.
Is the hon. and gallant Member aware of the speech delivered by Cardinal Logue on his return from Rome in which Cardinal Logue stated that he conveyed a message from the Pope with the hope that the cause for which these men were fighting would not be stained by crime.
Yet Cardinal Logue subscribes to Sinn Fein.
One at a time. Is the hon. and gallant Member aware of that?
I cannot say that I am aware of it, but even if it is true,—I will admit for the moment that it is absolutely true—and even though he may have done that, the Pope has not come out in the way he might have come out in his capacity as the great head of the Roman Catholic Church to denounce these crimes. I will leave that point, except to say this, that after that kind of action on the part of the great leaders of the Roman Catholic Church, can you be surprised that the Protestant working men in Belfast are of opinion that to a great extent the Sinn Fein organisation has the support of the Roman Catholic Church? What a tragedy it all is. We know that Protestant and Roman Catholic in Ireland can live and have lived together, and yet owing to this most dastardly organisation of Sinn Fein——
Why, you were beating Catholics for 50 years.
Owing to this dastardly organisation of Sinn Fein and owing to the bitterness that it has aroused throughout Ireland the possibility of the two religions living together in peace is, I am afraid, very much less than it was a short time ago. We have heard a lot during the debates on the Home Rule Bill about unity. We heard many hon. Members anxiously wishing for a union of Ireland between the North and South, but when the hon. Member (Mr. Devlin) was speaking, and when he was making the most bitter attacks upon the Protestant people in Ulster in regard to the homes in which he is interested in Bangor and other places, I could not help thinking that that spirit did not look very much like unity in the South of Ireland. God knows, unity looks further off at this moment than I ever thought it could possibly look during the whole course of one's lifetime, and if unity never comes it will be because of the depredations of the Sinn Fein organisation which, through its crimes, through its terrible deeds in the South and West of Ireland has created a cleavage—I say it with conviction though I say it with sorrow—between the North and the South greater than there has been for many centuries. The position which faces the Government who have to deal with the Irish question is one of extreme difficulty, and I do not think it has been made any easier by the Motion which the hon. Member has moved this evening.
Every right-thinking man, not only in this House, but in Ulster and throughout the United Kingdom, will deprecate the events which have been taking place during the last few days. I deprecate very much the speech which we have listened to this evening from the hon. Member for the Falls Division (Mr. Devlin). I never heard a more one-sided case than that presented by the Mover of the Adjournment. He did tell us that the Protestants and Roman Catholics of Derry united a few weeks, ago to settle disturbances. It is quite true. Why has that not been done in Belfast? The Protestant denominations of Belfast have united in issuing a manifesto to the citizens requesting them to assist in preserving order, and they are organising ex-service men for patrol duty. In the list of those supporting the effort I have not yet seen the name of a single Roman Catholic clergyman. The rioting has not all been confined to Queen's Island. When Protestant men were returning from their work on Wednesday the cars were held up in the Nationalist quarter and the passengers were stoned by the Nationalists. In the city of Belfast there is no place where there has been fiercer rioting than in the division represented by the hon. Member (Mr. Devlin). We all deplore the desecration of any place of worship, or such places as convents, which are associated with the Roman Catholic religion. The hon. Member told us about a fire, but he failed to tell us that a large number of Orangemen and Unionists living in the locality gave all possible assistance in fighting the flames. Last Saturday, between three and four in the morning, a Unionist club building was set on fire in Belfast. Persons residing near raised the alarm. The ground floor was used as a recreation room for this Unionist club, and the upper part was occupied by a family of seven, including a baby only two weeks old. The hon. Member has not condemned that outrage.
I condemn every outrage.
The hon. Member for St. Helens (Mr. Sexton) talks about disturbances in the docks. I wish to give him the correct version. When these outrages take place there is always retaliation. On Friday last, at some parts of the docks where Protestants were in the minority, they were given a few minutes' notice to cease work. This action was resented at other parts of the docks where the Unionists were in the majority they retaliated and the Nationalists were turned out. The hon. Member twits us here with not going over to Ireland to condemn these outrages. The hon. Member has been over to Ireland. I do not see that he has stopped any of the outrages in the South and West. For him to twit those on this Bench, after what has occurred throughout Ireland for some years past, sounds to me very like Satan rebuking sin.
The debates of last week and this evening demonstrate that mere Motions for the adjournment of the House are not likely to bring peace to Ireland. In spite of all the Government's measures and of all the Debates in this House, we find ourselves faced with the fact that the position in Ireland is getting worse daily. It is growing gradually worse at this moment. The hon. Gentleman opposite reproved the Mover of the adjournment, because he did not bring forward a similar Motion when policemen or soldiers were murdered. So far as we on the Labour Benches are concerned, we shall support the adjournment of the House if it be an outrage against a policeman or a soldier just as much as if the outrage was attempted against a civilian. The situation in Ireland to-day is developing into the worst possible form of race hatred. If religious bitterness is fanned in Belfast or in the North of Ireland, and it results, as it may easily result, in a multiplication of such incidents as those of the past week, then nothing can prevent recrimination and reprisals taking place in the South. Great as is the difficulty of this House in finding a solution of the political problem, if it is compelled to find a solution also of the religious difficulty its task will indeed be much harder. It is, therefore, the duty of all possessing any influence in Ireland, whether North or South, to do everything possible to prevent any extension of the religious quarrel. Reference has been made to a deputation which waited upon the Government about a month before the 12th July with a request that more troops should be sent to the North of Ireland to maintain law and order. No one in any quarter of the House pretends that law and order exists in Ireland. More troops were sent to Ireland. No disturbances whatever took place in the North of Ireland until after the 12th July. I submit, therefore, that it is necessary to look to the speeches delivered on the 12th July.
10.0 P.M.
The hon. Member who raised this point knows as well as anyone how that demonstration was organised and worked up during the week which preceded the 12th July. I was there the whole of the time, and saw exactly what was taking place every day. No outrages and no disturbances took place on the 12th. The trouble occurred after the 12th. That, I think, is a significant fact.
May I, on a point of Order, point out to the hon. Gentleman that the 12th of July demonstrations in Ulster have taken place every year since 1689? He may have been there this year, but they go on just the same every year.
Yes, I know that, and I know there have been occasions when they ought to have been proclaimed, and I think that had they been we would not be faced with the difficulties with which we are faced to-day. It is because I know it perfectly well that I am dealing with that aspect of the situation, and I still repeat that, so far as the rioting in Belfast is concerned notwithstanding the deputation which asked for more troops from the Government, nothing took place, and I repeat again that that justifies the connection between the two incidents. I feel sure it must be, and will be, the Government's intention to prevent either reprisals or any attempt to drive workers, Protestant or Nationalist, from their work, because that must in the very nature of things spread to this part of the country. You cannot have any Union with Members in Ireland with a Protestant or Nationalist who are driven from their work and deprived of earning their livelihood without it inevitably resulting in reprisals on this side as well. I hope the Government will view it from that point of view, but I wish once again to appeal to the House, not merely to debate the incidents that have taken place, not to attach too much importance to rioting, to murder, and to damage, because, after all, the real thing is to try and find a remedy, and I still believe that the Government ought to be able to find a remedy. I do not know whether hon. Members have noticed what happened in Dublin, but I was twitted by my hon. Friend with taking a deputation that asked for withdrawal of the troops. He omitted to mention that in that resolution was also a demand for the Irish people to prevent crime and outrage. The Labour party was quite impartial in their attitude, and they were justified by the incidents in Dublin, and I would ask hon. Members to note this fact that, although there were a number of policemen killed in Dublin this year, from the day that the policemen in Dublin were disarmed there have been no policemen shot or murdered. Now, I ask the House to note the significance of that. We might all denounce outrage as I denounce it, and as every decent man will denounce it, but at the same time it is significant to note that, notwithstanding all the crimes we have heard of in Ireland, the fact remains that since the policemen were disarmed there has been no policeman shot or murdered in Dublin. That at least justifies us in the belief that it is the presence of troops that leads to the reprisals, and, in any case, I do hope that we shall not, day after day and week after week, merely be debating what must inevitably lead to a much more serious crisis, but that the House will recognise that the Bill that we are now supposed to be discussing, that is supposed to be a Home Rule Bill to settle the Irish problem, will never settle the Irish problem. It is abrogating the difficulties. It will be much better to face the situation by a bold policy of at least trusting the people, as we have never done in the past.
This Debate was brought about by moving the Adjournment of the House on a matter of urgent and definite importance, namely, the state of affairs in Belfast, and I shall restrict myself to that matter entirely. All the speakers have deplored the events which have taken place in the Belfast area during the past few days. I share with them the great regret felt at these events, and I can assure the House that, as far as the Irish Government is concerned, whether the mob be Protestant or Roman Catholic, or nothing in the way of religion, it will be dealt with by the Government, through its soldiers and policemen, in exactly the same way, and no one has a right to allege partiality as far as the Government or its officers is concerned in reference to Belfast or any area.
The hon. Gentleman who moved the Adjournment made the statement that the Front Bench took affairs in Belfast in a "light and airy way." There is nothing light or airy about me. In dealing with this Irish problem wires come in every hour, and sometimes two or three an hour, dealing with murder, with burnings, with outrages of every shape and kind. I am sure the House will acquit me of dealing in a "light and airy way" either to-night or at any other time with this question, which is the gravest question that now faces the British Empire, and demands the most urgent solution. The hon. Gentleman also said that the Government was doing nothing in reference to this Belfast trouble. Let me remind the House that during this Belfast trouble we have had there five battalions of infantry, and three other battalions available in Ulster, if required. We have had ships of war near to the city, and we have had 1,156 policemen near by, and, indeed, in the Belfast area itself. We have the assurance of the General Officer Commanding-in-Chief, day after day, and to-night, only two hours ago, I had a message from him saying that he was satisfied that he has adequate forces under his command in Belfast, Bangor, and Banbridge. So that the accusation that the Government is doing nothing, is, in my mind, not justified by the facts. The Government has done everything in its power and, in my opinion, has prevented one of the gravest catastrophes which could befall that part of Ireland, or any other part of the Kingdom.
I am sure the House has great sympathy with the hon. Gentleman (Mr. Devlin) on the fact that the Home for Working Girls in Bangor, of which he was the founder, and which, undoubtedly, does beneficent work to those persons, should have suffered some damage. But I must deal with some of the allegations made by him, because, if I may say so, his enthusiasm for the Home has betrayed him into making certain statements not in accord with the precise facts of the case. He asked, or someone asked, for a police patrol and it was granted.
Two policemen!
Two policemen are quite adequate when in immediate communication with headquarters, and with reserves behind them. They were adequate on this occasion, and saw the fire almost as soon as it started. It was put out immediately; there was not a soul inside or outside the home injured, and the total damage was about £200. I am bound to say my hon. Friend has made out a——
Do you deny any of my allegations? I pointed out the way the premises were treated, and the preparations that were made to fire it with straw and other things.
I do not know what were the preparations of the criminals who tried to fire the premises, but I do know that the protection was such that the damage was reduced to the small sum of £200, and that nobody was hurt. Everything was done, not only by the Police but by the Fire Brigade and by townspeople from both the creeds, who quickly extinguished the fire; and I can assure my hon. Friend that the townspeople feel as indignant as he feels about the burning, conduct which reflects no credit on anybody, but naturally receives the condemnation of all right thinking people.
Now let us take the case of the convent. I agree with him and with everything he says on the beneficent work done by these sisters of mercy throughout not only Ireland, but in other parts of the world; and the attempt to destroy a convent, or any other religious institution, is one of the meanest of all the attempts that could be made. But, after all, the police were alert in reference to the convent. I will read an official report—
They had left the day before.
I am reading the OFFICIAL REPORT—
An attack has been made on one of the Divisional Commissioners of Police, namely, General Hackett Pain. This officer has been Divisional Commissioner for some time. He has not failed in his duty, and I decline myself to remove any officer or to question the ancestry of any officer, political or otherwise, who continues to do his duty to the State. He has nothing whatever to do with the military. General Carter Campbell, now in command of Belfast, has absolute command. I repeat what I said on Thursday last, that when an officer is put in command of an area the sole duty of the Government is to back him up in every way they can, and the prime duty of the Secretary of State is to endorse his conduct here in the House of Commons. I presume that all the officers of the State in Ireland are doing their duty. No other presumption is possible in carrying on the affairs of the Government. The suggestion that General Hackett Pain is the "dictator of Belfast" is a suggestion not founded on fact, and I can assure the hon. Gentleman that there are no "dictators" in Belfast. I am sorry sometimes we have not got a dictator, not only in Belfast, but for the whole of Ireland, who could really dictate. But certainly the Divisional Commissioner of Police in Ulster does not deserve the severe criticism that has been meted out to him. I cannot agree to the principle that the Roman Catholic workers or the Protestant workers in Belfast, who are as yet unable to return to their work, because of these unhappy riots, are entitled to compensation from the State. It must not be forgotten that where the Catholics are in the minority, in certain factories, they have not returned to work. It is also true that where the Protestants are in a minority they likewise have refrained from returning to work.
There is no such place.
This is a report I have just received from Belfast on the facts, and I am convinced it is true. The plain fact is that when these sectarian passions are aroused, the unfortunate minorities in particular premises or places unhappily suffer. The hon. Gentleman suggested that there was a general impression that the Government was encouraging this strife. That is a most unhappy statement to make. There is not a scintilla of truth in it. The Government would be most happy to see sectarian strife hushed for ever in Ireland, or anywhere else in His Majesty's Dominions. It would be the last thing that any Government would do in Ireland to encourage sectarian trouble, but, unfortunately, it requires no encouragement. It seems as deep-rooted as the race is old. I can assure him that the protection of Catholic workers and all other workers will be maintained in Belfast and throughout Ireland to the fullest extent in the power of the Government.
As to the question of reprisals being the policy of the Government, I can assure him that there, again, no such suggestion can be made of this or any other Government. Certainly, any body guilty of any illegal act in Ireland, be he in the force or out of the force, will be dealt with according to the crime that is urged against him. The suggestion that reprisals form a part of the policy is a suggestion not founded on fact, and I would remind the House that the last paragraph of one of the last orders of Colonel Smyth was that officer's condemnation of the policy of reprisals on the two grounds that appeal to every ser vice man, first, that it never attains its end, secondly, that it destroys the force which adopts it. So I hope when the word "reprisals" is used so easily across the floor of the House——
It was you who used it.
No.
What the right hon. Gentleman said was that this was a reprisal for what occurred in the case of; Colonel Smyth.
I never used the word. My statement was that these recent outbursts in Belfast were directly due to the murder of Colonel Smyth. It is a consequence, which is vastly different.
It is worse!
The suggestion that reprisals were carried out by the armed forces of the Crown is contrary to fact. The armed forces of the Crown prevented a massacre, and saved that part of the country from a devastating civil war. There was nothing of reprisal about it. I hope the House is fully alive to the difference. Let us be perfectly clear. The one immediate and inevitable consequence of the murders in Ireland is not only the indignation of all right-thinking Irishmen, but the indignation of the civilised world. What makes the difficulties in Ireland more difficult is the fact that these murders are building up, in this country as well as in other countries, a feeling of indignation which makes it difficult to get an atmosphere in which a settlement can be evolved.
I deplore the riots as I deplore all the misery and crime in Ireland. There have been 18 men and women killed, some 200 wounded, and about 200 arrests have been made by the police and the military. It is the old, bitter, miserable story of senseless sectarian strife. The members of the same trade union, as the hon. Gentleman the Member for St. Helens (Mr. Sexton) pointed out, are now shooting, or trying to shoot, each other. It is only the intervention of the military and the police that prevents them doing so. In any trouble in Ireland the people always appeal to the police and to the British Army for protection. The British Government does its best to supply that protection. In this matter, in spite of certain things said of late, the police and the military have shown the strongest and sternest; impartiality in these affairs. The fire brigades, which are coming more and more into the public eye in Ireland, have carried out the most dangerous and difficult duties with perfect control, and so "between them all" have arrested what at one time threatened to be a most devastating period in the history of the northern part of Ireland.
I myself have implicit confidence in the General Officer Commanding. I am convinced that he, with the troops under his control, have averted a disaster. The hon. Gentleman who moved the Adjournment referred to the Committee set up in Derry after the recent riots there—a Committee composed of the representatives of the different creeds and parties. It has been successful. All the municipal authorities in Ireland have been asked to set up similar committees. Nearly all have refused to consider the question at all. In Belfast and in Derry all the leaders of the parties and creeds united in deploring these outrages. We are all agreed on that, I think. They have united in trying to prevent them. I myself am glad to know, and the House will be glad to know, that you have Orangemen and Nationalists assisting the police and military in keeping the mobs apart during these recent days. The police and the military have the vigorous support of the public behind them in Belfast and Derry, and they have the support of well-disposed men of different sects and different parties. The tragedy of the rest of Ireland lies in the fact that leaders of creeds and parties are oft-times dumb on the question of life and property, and public opinion was terrorised while the murder of policemen, coastguards and soldiers went on. In spite of the deplorable events in Belfast, which we all condemn, at any rate there is a public opinion there drawn from all sections that condemns it and tries to prevent them, and I wish that were true of all parts of Ireland. I wish it were possible for all Irishmen with the pride of a great race and the pluck of white men, to assist the authorities to put down crime.
Let them govern themselves. We are not going to assist a foreign Government.
The hon. Member has just complained that Bangor did not receive sufficient protection.
The right hon. Gentleman is making too much out of Bangor. I distinctly stated that I thought it would be a good thing if the whole of the Army was taken out of Bangor, but if there was to be an army there, it should protect the minority in the North as well as in the South.
If the Army were withdrawn, I think the future of Ireland would be incredibly bitter and sad.
It could not be worse.
I think it could. If there had not been this protection of which I have spoken, there would have been a massacre of thousands. While the Army is there, I assure my hon. Friend that it will be used to the full extent of its power to protect all classes, irrespective of creed, or vocation, or position in Ireland. I will conclude what I have to say by stating that I myself would like to see all Irishmen unite in trying to govern their own country, and as soon as they can unite, I am sure this House and this country will be only too happy to meet their wishes.
rose in his place and claimed to move, "That the Question be now put."
Question put, "That the Question be now put."
The House divided: Ayes, 204: Noes, 47.
Division No. 247] AYES. [10.30 p.m. Adair, Rear-Admiral Thomas B. S. Bridgeman, William Clive Davidson, Major-General Sir J. H. Addison, Rt. Hon. Dr. C. Briggs, Harold Davies, Alfred Thomas (Lincoln) Agg-Gardner, Sir James Tynte Buchanan, Lieut.-Colonel A. L. H. Davison, Sir W. H. (Kensington, S. Ainsworth, Captain Charles Burn, Col. C. R. (Devon, Torquay) Dawes, James Arthur Amery, Lieut.-Col. Leopold C. M. S. Butcher, Sir John George Edgar, Clifford B. Atkey, A. R. Campion, Lieut.-Colonel W. R. Edge, Captain William Baird, Sir John Lawrence Carew, Charles Robert S. Edwards, Major J. (Aberavon) Baldwin, Rt. Hon. Stanley Casey, T. W. Elveden, Viscount Balfour, George (Hampstead) Cayzer, Major Herbert Robin Eyres-Monsell, Commander B. M. Banbury, Rt. Hon. Sir Frederick G. Cecil, Rt. Hon. Evelyn (Birm., Aston) Falcon, Captain Michael Barnett, Major R. W. Chadwick, Sir Robert Farquharson, Major A. C. Barnston, Major Harry Chamberlain, Rt. Hn. J. A. (Birm., W.) Fell, Sir Arthur Barrie, Charles Coupar Chamberlain, N. (Birm., Ladywood) Fildes, Henry Bell, Lieut.-Col. W. C. H. (Devizes) Clough, Robert Fisher, Rt. Hon. Herbert A. L. Benn, Capt. Sir I.H., Bart. (Gr'nw'h) Coates, Major Sir Edward F. Ford, Patrick Johnston Betterton, Henry B. Coats, Sir Stuart Foreman, Henry Birchall, Major J. Dearman Cobb, Sir Cyril Forestier-Walker, L. Bird, Sir A. (Wolverhampton, West) Cohen, Major J. Brunei Forrest, Walter Blades, Capt. Sir George Rowland Colvin, Brig.-General Richard Beale Foxcroft, Captain Charles Talbot Blair, Reginald Cope, Major Wm. Fraser, Major Sir Keith Blake, Sir Francis Douglas Courthope, Major George L. Fremantle, Lieut.-Colonel Francis E. Borwick, Major G. O. Cowan, D. M. (Scottish Universities) Gange, E. Stanley Boscawen, Rt. Hon. Sir A. Griffith- Craig, Colonel Sir J. (Down, Mid) Gardiner, James Breese, Major Charles E. Dalziel, Sir D. (Lambeth, Brixton) Gibbs, Colonel George Abraham Gilbert, James Daniel Locker-Lampson, Com. O. (H tingd'n) Richardson, Alexander (Gravesend) Grant, James A. Loseby, Captain C. E. Roberts, Rt. Hon. G. H. (Norwich) Green, Albert (Derby) Lyle-Samuel, Alexander Roberts, Sir S. (Sheffield, Ecclesall) Green, Joseph F. (Leicester, W.) Mackinder, Sir H. J. (Camlachie) Robinson, S. (Brecon and Radnor) Greenwood, William (Stockport) Macpherson, Rt. Hon. James I. Rodger, A. K. Gregory, Holman Macquisten, F. A. Roundell, Colonel R. F. Greig, Colonel J. W. Maddocks, Henry Sanders, Colonel Sir Robert A. Gretton, Colonel John Mallalieu, F. W. Seager, Sir William Gritten, W. G. Howard Manville, Edward Seddon, J. A. Hall, Rt. Adml Sir W. (Liv'p'l, W. D'by) Marks, Sir George Croydon Seely, Major-General Rt. Hon. John Hanna, George Boyle Marriott, John Arthur Ransome Shaw, William T. (Forfar) Haslam, Lewis Middlebrook, Sir William Shortt, Rt. Hon. E. (N'castle-on-T.) Henderson, Major V. L. (Tradeston) Mitchell, William Lane Smithers, Sir Alfred W. Henry, Denis S. (Londonderry, S.) Molson, Major John Elsdale Stanley, Major Hon. G. (Preston) Herbert, Dennis (Hertford, Watford) Moore-Brabazon, Lieut.-Col. J. T. C. Steel, Major S. Strang Hewart, Rt. Hon. Sir Gordon Moreing, Captain Algernon H. Stewart, Gershom Higham, Charles Frederick Morrison, Hugh Strauss, Edward Anthony Hoare, Lieut.-Colonel Sir S. J. G. Morrison-Bell, Major A. C. Sturrock, J. Leng Hood, Joseph Munro, Rt. Hon. Robert Sutherland, Sir William Hope, James F. (Sheffield, Central) Murchison, C. K. Talbot, G. A. (Hemel Hempstead) Hopkins, John W. W. Neal, Arthur Terrell, George (Wilts, Chippenham) Hopkinson, A. (Lancaster, Moseley) Newman, Sir R. H. S. D. L. (Exeter) Thomson, Sir W. Mitchell- (Maryhill) Home, Edgar (Surrey, Guildford) Nield, Sir Herbert Tryon, Major George Clement Horne, Sir R. S. (Glasgow, Hillhead) Norris, Colonel Sir Henry G. Vickers, Douglas Hume-Williams, Sir W. Ellis Palmer, Charles Frederick (Wrekin) Waddington, R. Hunter, General Sir A. (Lancaster) Palmer, Brigadier-General G. L. Walters, Rt. Hon. Sir John Tudor Illingworth, Rt. Hon. A. H. Parkinson, Albert L. (Blackpool) Ward, Col. L. (Kingston-upon-Hull) James, Lieut.-Colonel Hon. Cuthbert Parry, Lieut.-Colonel Thomas Henry Watson, Captain John Bertrand Jameson, J. Gordon Peel, Col. Hn. S. (Uxbridge, Mddx.) Wigan, Brig.-General John Tyson Jephcott, A. R. Pennefather, De Fonblanque Williams, Lt.-Com. C. (Tavistock) Johnson, Sir Stanley Perkins, Walter Frank Williams, Col. Sir R. (Dorset, W.) Johnstone, Joseph Perring, William George Williamson, Rt. Hon. Sir Archibald Jones, Sir Edgar R. (Merthyr Tydvil) Pinkham, Lieut.-Colonel Charles Willoughby, Lieut.-Col. Hon. Claud Jones, G. W. H. (Stoke Newington) Pollock, Sir Ernest M. Wills, Lieut.-Colonel Sir Gilbert Jones, Henry Haydn (Merioneth) Pownall, Lieut.-Colonel Assheton Wilson, Daniel M. (Down, West) Jones, J. T. (Carmarthen, Llanelly) Pratt, John William Wilson, Colonel Leslie O. (Reading) Kellaway, Rt. Hon. Fredk. George Preston, W. R. Wood, Sir H. K. (Woolwich, West) Kelley, Major Fred (Rotherham) Prescott, Major W. H. Worsfold, Dr. T. Cato Kerr-Smiley, Major Peter Kerr Pulley, Charles Thornton Worthington-Evans, Rt. Hon. Sir L. Kidd, James Purchase, H. G. Young, Lieut.-Com. E. H. (Norwich) King, Commander Henry Douglas Rae, H. Norman Young, W. (Perth & Kinross, Perth) Lane-Fox, G. R. Raper, A. Baldwin Younger, Sir George Law, Rt. Hon. A. B. (Glasgow, C.) Raw, Lieutenant-Colonel N. Lewis, T. A. (Glam., Pontyprldd) Rees, Sir J. D. (Nottingham, East) TELLERS FOR THE AYES. —— Lister, Sir R. Ashton Richardson, Sir Albion (Camberwell) Lord E. Talbot and Mr. Parker.
NOES. Acland, Rt. Hon. F. D. Kenworthy, Lieut.-Commander J. M. Sitch, Charles H. Barnes, Major H. (Newcastle, E.) Kiley, James D. Spencer, George A. Benn, Captain Wedgwood (Leith) Lawson, John J. Swan, J. E. Bowerman, Rt. Hon. Charles W. Lunn, William Thomas, Rt. Hon. James H. (Derby) Brace, Rt. Hon. William Maclean, Neil (Glasgow, Govan) Thomson, T. (Middlesbrough, West) Bramsdon, Sir Thomas Maclean, Rt. Hn. Sir D. (Midlothian) Thorne, G. R. (Wolverhampton, E.) Briant, Frank Malone, Major P. B. (Tottenham, S.) Tootill, Robert Brown, James (Ayr and Bute) Morgan, Major D. Watts Wallace, J. Cairns, John Murray, Dr. D. (Inverness & Ross) Waterson, A. E. Coote, Colin Reith (Isle of Ely) Newbould, Alfred Ernest White, Charles F. (Derby, Western) Edwards, C. (Monmouth, Bedwellty) O'Connor, Thomas P. Williams, Aneurin (Durham, Consett) Entwistle, Major C. F. Parkinson, John Allen (Wigan) Wood, Major M. M. (Aberdeen, C.) Finney, Samuel Raffan, Peter Wilson Young, Robert (Lancaster, Newton) Galbraith, Samuel Richardson, R. (Houghton-le-Spring) Graham, D. M. (Lanark, Hamilton) Scott, A. M. (Glasgow, Bridgeton) TELLERS FOR THE NOES. —— Hartshorn, Vernon Sexton, James Mr. Devlin and Mr. MacVeagh. Holmes, J. Stanley Short, Alfred (Wednesbury)
Question put accordingly, "That this House do now adjourn".
The House divided: Ayes, 42; Noes, 212.
Division No. 248.] AYES. [10.38 p.m. Acland, Rt. Hon. F. D. Hartshorn, Vernon Sitch, Charles H. Barnes, Major H. (Newcastle, E.) Holmes, J. Stanley Spencer, George A. Benn, Captain Wedgwood (Leith) Kenworthy, Lieut.-Commander J. M. Swan, J. E. Bowerman, Rt. Hon. Charles W. Kiley, James D. Thomas, Rt. Hon. James H. (Derby) Brace, Rt. Hon. William Lawson, John J. Thomson, T. (Middlesbrough, West) Bramsdon, Sir Thomas Lunn, William Thorne, G. R. (Wolverhampton, E.) Sriant, Frank Maclean, Nell (Glasgow, Govan) Tootill, Robert Brown, James (Ayr and Bute) Maclean, Rt. Hn. Sir D. (Midlothian) Waterson, A. E. Cairns, John MacVeagh, Jeremiah White, Charles F. (Derby, Western) Devlin, Joseph Morgan, Major D. Watts Williams, Aneurin (Durham, Consett) Edwards, C. (Monmouth, Bedwellty) Parkinson, John Allen (Wigan) Wood, Major M. M. (Aberdeen, C.) Entwistle, Major C. F. Raffan, Peter Wilson Young, Robert (Lancaster, Newton) Finney, Samuel Richardson, R. (Houghton-le-Spring) Galbraith, Samuel Sexton, James TELLERS FOR THE AYES. —— Graham D M (Lanark Hamilton) Short, Alfred (Wednesbury) Mr. T. P. O'Connor and Mr. Newbould.
NOES. Adair, Rear-Admiral Thomas B. S. Gibbs, Colonel George Abraham Nield, Sir Herbert Addison, Rt. Hon. Dr. C. Gilbert, James Daniel Norris, Colonel Sir Henry G. Agg-Gardner, Sir James Tynte Grant, James A. O'Neill, Major Hon. Robert W. H. Ainsworth, Captain Charles Green, Albert (Derby) Palmer, Charles Frederick (Wrekin) Amery, Lieut.-Col. Leopold C. M. S. Green, Joseph F. (Leicester, W.) Palmer, Brigadier-General G. L. Atkey, A. R. Greenwood, William (Stockport) Parkinson, Albert L. (Blackpool) Baird, Sir John Lawrence Gregory, Holman Parry, Lieut.-Colonel Thomas Henry Baldwin, Rt. Hon. Stanley Greig, Colonel J. W. Peel, Col. Hn. S. (Uxbridge, Mddx.) Balfour, George (Hampstead) Gretton, Colonel John Pennefather, De Fonblanque Banbury, Rt. Hon. Sir Frederick G. Gritten, W. G. Howard Perkins, Walter Frank Barnett, Major R. W. Hall, Rr. Adml Sir W. (Liv'p'l. W. D'by) Perring, William George Barnston, Major Harry Hamilton, Major C. G. C. Pinkham, Lieut.-Colonel Charles Barrie, Charles Coupar Hanna, George Boyle Pollock, Sir Ernest M. Bell, Lieut.-Col. W. C. H. (Devizes) Haslam, Lewis Pownall, Lieut.-Colonel Assheton Benn, Capt. Sir I. H., Bart.(Gr'nw'h) Henderson, Major V. L. (Tradeston) Pratt, John William Betterton, Henry B. Henry, Denis S. (Londonderry, S.) Preston, W. R. Birchall, Major J. Dearman Herbert, Dennis (Hertford, Watford) Prescott, Major W. H. Bird, Sir A. (Wolverhampton, West) Hewart, Rt. Hon. Sir Gordon Pulley, Charles Thornton Blades, Capt. Sir George Rowland Higham, Charles Frederick Purchase, H. G. Blair, Reginald Hoare, Lieut.-Colonel Sir S. J. G. Rae, H. Norman Blake, Sir Francis Douglas Hood, Joseph Raper, A. Baldwin Borwick, Major G. O. Hope, James F. (Sheffield, Central) Raw, Lieutenant-Colonel N. Boscawen, Rt. Hon. Sir A. Griffith- Hopkins, John W. W. Rees, Sir J. D. (Nottingham, East) Breese, Major Charles E. Hopkinson, A. (Lancaster, Moseley) Reid, D. D. Bridgeman, William Clive Home, Edgar (Surrey, Guildford) Richardson, Sir Albion (Camberwell) Briggs, Harold Home, Sir R. S. (Glasgow, Hillhead) Richardson, Alexander (Gravesend) Buchanan, Lieut.-Colonel A. L. H. Hume-Williams, Sir W. Ellis Roberts, Rt. Hon. G. H. (Norwich) Burn, Col. C. R. (Devon, Torquay) Hunter, General Sir A. (Lancaster) Roberts, Sir S. (Sheffield, Ecclesall) Burn, T. H. (Belfast, St. Anne's) Illingworth, Rt. Hon. A. H. Robinson, S. (Brecon and Radnor) Butcher, Sir John George James, Lieut.-Colonel Hon. Cuthbert Rodger, A. K. Campion, Lieut.-Colonel W. R. Jameson, J. Gordon Roundell, Colonel R. F. Carew, Charles Robert S. Jephcott, A. R. Sanders, Colonel Sir Robert A. Casey, T. W. Johnson, Sir Stanley Scott, A M. (Glasgow, Bridgeton) Cayzer, Major Herbert Robin Johnstone, Joseph Seager, Sir William Cecil, Rt. Hon. Evelyn (Birm., Aston) Jones, Sir Edgar R. (Merthyr Tydvil) Seddon, J. A. Chamberlain, Rt. Hn. J. A. (Birm., W.) Jones, G. W. H. (Stoke Newington) Seely, Major-General Rt. Hon. John Chamberlain, N. (Birm., Ladywood) Jones, Henry Haydn (Merioneth) Shaw, William T. (Forfar) Clough, Robert Jones, J. T. (Carmarthen, Llanelly) Shortt, Rt. Hon. E. (N'castle-on-T.) Coates, Major Sir Edward F. Kellaway, Rt. Hon. Fredk. George Smithers, Sir Alfred W. Coats, Sir Stuart Kelley, Major Fred (Rotherham) Stanley, Major Hon. G. (Preston) Cobb, Sir Cyril Kenyon, Barnet Steel, Major S. Strang Cohen, Major J. Brunel Kidd, James Stewart, Gershom Colvin, Brig.-General Richard Beale King, Commander Henry Douglas Strauss, Edward Anthony Coote, Colin Reith (Isle of Ely) Lane-Fox, G. R. Sturrock, J. Leng Cope, Major Wm. Law, Rt. Hon. A. B. (Glasgow, C.) Sutherland, Sir William Courthope, Major George L. Lewis, T. A. (Glam., Pontypridd) Talbot, G. A. (Hemel Hempstead) Cowan, D. M. (Scottish Universities) Lister, Sir R. Ashton Terrell, George (Wilts, Chippenham) Craig, Colonel Sir J. (Down, Mid) Locker-Lampson, Com. O. (H'tingd'n) Thomson, Sir W. Mitchell- (Maryhill) Dalziel, Sir D. (Lambeth, Brixton) Loseby, Captain C. E. Tryon, Major George Clement Davidson, Major-General Sir J. H. Lyle-Samuel, Alexander Vickers, Douglas Davies, Alfred Thomas (Lincoln) M'Guffin, Samuel Waddington, R. Davison, Sir W. H. (Kensington, S.) Mackinder, Sir H. R (Camlachle) Walters, Rt. Hon. Sir John Tudor Dawes, James Arthur Macpherson, Rt. Hon. James I. Ward, Col. L. (Kingston-upon-Hull) Edgar, Clifford B. Macquisten, F. A. Watson, Captain John Bertrand Edge, Captain William Maddocks, Henry Wigan, Brig.-General John Tyson Edwards, Major J. (Aberavon) Mallalieu, F. W. Williams, Lt.-Com. C. (Tavistock) Edwards, John H. (Glam., Neath) Malone, Major P. B. (Tottenham, S.) Williams, Col. Sir R. (Dorset, W.) Elveden, viscount Manville, Edward Williamson, Rt. Hon. Sir Archibald Eyres-Monsell, Commander B. M. Marks, Sir George Croydon Willoughby, Lieut.-Col. Hon. Claud Falcon, Captain Michael Marriott, John Arthur Ransome Wills, Lieut.-Colonel Sir Gilbert Farquharson, Major A. C. Middlebrook, Sir William Wilson, Daniel M. (Down, West) Fell, Sir Arthur Mitchell, William Lane Wilson, Colonel Leslie O. (Reading) Fildes, Henry Molson, Major John Elsdale Wood, Sir H. K. (Woolwich, West) Fisher, Rt. Hon. Herbert A. L. Mond, Rt. Hon. Sir Alfred M. Worsfold, Dr. T. Cato Ford, Patrick Johnston Moore-Brabazon, Lieut.-Col. J. T. C. Worthington-Evans, Rt. Hon. Sir L. Foreman, Henry Moreing, Captain Algernon H. Young, Lieut.-Com. E. H. (Norwich) Forestier-Walker, L. Morrison, Hugh Young, W. (Perth & Kinross, Perth) Forrest, Walter Morrison-Bell, Major A. C. Younger, Sir George Foxcroft, Captain Charles Talbot Munro, Rt. Hon. Robert Fraser, Major Sir Keith Murchison, C. K. TELLERS FOR THE NOES. —— Fremantle, Lieut.-Colonel Francis E. Neal, Arthur Lord E. Talbot and Mr. James Parker. Gange, E. Stanley Newman, Sir R. H. S. D. L. (Exeter) Gardiner, James
Finance Bill
Postponed Proceeding resumed on consideration of Bill, as amended.
Amendment proposed to the Bill: In Sub-section (1) to leave out the words "fifth day of August" ["and before the fifth day of August, nineteen hundred and twenty-one"], and to insert instead thereof the words "first day of January."—[ Mr. Holmes. ]
May I ask the Chancellor of the Exchequer how far he intends to go to-night in the discussion on the Bill?
I hope we shall finish the Excess Profits Duty. I will not ask the House to sit late. Then we can take the Corporation Profits Tax Amendments to-morrow.
The Bill as it stands continues the Excess Profits Duty until accounting periods ending on or before 4th August of next year. That is to say, the business community of the country have to look forward to carrying on their business for the next thirteen months subject to the payment of Excess Profits Duty at 60 per cent. unless it is altered in next year's Finance Bill. My Amendment proposes that Excess Profits Duty shall not continue beyond 31st December of this year, or in other words, on 1st January next year every business man throughout the country, whether he is carrying on his business in the form of a company or a firm, whether he is trading with others or trading with himself, will start business that day without the incubus of Excess Profits Duty upon him. A great deal has been said with regard to the effect of the Excess Profits Duty. Probably no one has condemned it in stronger terms than the Chancellor of the Exchequer himself, and it is probably unnecessary for any of us who are speaking about the tax to show its demerits. I will content myself with saying that the Excess Profits Duty has undoubtedly been a contributory cause of high prices. It has caused high prices in two ways. In the first place the trader, knowing that he has to pay the duty, has put it on to the consumer by putting up his price to meet the duty, and in consequence he has got an increased profit himself of 20 per cent. or 40 per cent., according as the tax has been 80 per cent. or 60 per cent. It has been once more a case of passing the tax on to the consumer, and the trader has been able to do it in the last few years in which there has been little or no competition by charging what price he liked. In the second place, the prices have been increased as the result of the Excess Profits Duty, because that duty has caused gross extravagance in all business concerns. There is no incentive to save money. Business men say, "The Excess Profits Duty is 60 per cent.; then there is 6s. Income Tax and Super-tax after that. Why should we trouble about economy when, whatever we do, the Government take most of the money?" That has happened in nearly every business, with the result that expenses have been heavier than necessary, and those expenses have gone on the price and the consumer who purchases the goods has in consequence had to pay more. For these two reasons, first because the tax has been deliberately passed on to the consumer and secondly by the extravagance in business, the Excess Profits Duty has been one of the contributing causes of high prices. Beyond that, the Excess Profits Duty is creating vested interests. It is enabling the old business to score all the time over the new business. The Chancellor of the Exchequer is meeting that, but only to a small extent. Men are refusing to start new businesses because of this impost.
That brings me to the main reason why I suggest that the Excess Profits Duty should cease at the end of this year. I think all of us are aware that unemployment is increasing. Most business men fear that by next winter unemployment will be really serious throughout the length and breadth of the land. When I put this view in Committee the Chancellor of the Exchequer was optimistic, and said his information was that unemployment was decreasing. I have not found any confirmation of that view in any journal, or any conversation I have had with those who are competent to speak. Most business men are of opinion that unemployment will be increasingly serious as the months go on. The Excess Profits Duty has caused many men to shut down schemes for starting new businesses. They believed that the reduction of the duty to 40 per cent. would be followed by a further reduction or by the abolition of the duty, and they had been laying their plans for starting new businesses. The imposition of the 60 per cent. duty came as a bombshell, and caused many men to change their plans and refuse to start new businesses. While the first duty of the Chancellor of the Exchequer is to get revenue, as a Member of the Cabinet he must take into account the possibility of unemployment throughout the country, and if he agrees to get rid of Excess Profits Duty as from the end of this year, he will do something, possibly a great deal, to ward off the danger of unemployment in the winter months. If he tells the commercial men of the nation that as from 1st January next they are not to be subject to Excess Profits Duty, they will be able to spend the rest of the summer and autumn in making plans for starting new businesses. Those plans will be ready by the end of the year, machinery will have been purchased, and employment will be available for thousands of men who otherwise will find themselves without work on 1st January. What does it mean to the revenue? The experience of those who have dealt with Excess Profits Duty has been that on the average it has taken nine to twelve months after the accounting period for the Excess Profits Duty to be paid into the Exchequer. It is not possible that any firm with an accounting period ending on 31st December next would have its computation made, assessment served, and duty paid before 5th August, 1921. Look at 1921–22. The Chancellor of the Exchequer will probably have, on 5th April next, over £300,000,000 of Excess Profits Duty which is due to him but for which the assessments have not been made. He has, therefore, not to consider either this year's revenue or next year's revenue if he accepts my Amendment; he is covered for both those years. Before 5th April next I hope the united wisdom of everyone will have devised a new tax to take its place. The whole House hopes that by the time 1922 comes the Government will have been able to cut down expenditure so that the revenue from Excess Profits Duty will not be required at all. Business men want certainty. They want an opportunity of making their plans for the future. Being jockeyed about from 80 per cent. to 40 per cent. and from 40 per cent. to 60 per cent., so that they do not know where they stand, has undoubtedly caused them to abandon the plans for many new businesses they intended to start.
11.0 P.M.
I beg to second the Amendment.
If the House has heard the arguments there is no question as to which side the weight of argument has been on during this discussion. The Chancellor of the Exchequer himself last year addressed to the House most powerful arguments against the Excess Profits Duty. The only claim he and anyone else has put in favour of it is that it is a bad tax, it is an evil thing, but it is necessary to raise money, and it cannot be done in any other way. It is on that ground that I shall endeavour to meet him. The first thing I would like to draw the attention of the House to is the statement of the White Paper which the Chancellor of the Exchequer issued, which he calls a further Memorandum on the future Exchequer balance-sheet, and in which he gives us another Estimate of the expenditure and revenue in a normal year, and that comes to the sum of £1,029,000,000 and included in that expenditue is a half per cent. sinking fund on the dead-weight debt, and a further £148,000,000 for further debt redemption in addition. I submit that the revenue to meet that expenditure is accounted for on the present basis of taxation without any Excess Profits Duty at all. Well, then, the only condition that is required to abolish this Excess Profits Duty is, apart from other considerations which I shall put forward, that we should get back to this normal year of the Exchequer. I urge there is no reason, and, as a matter of fact, it is imperative for the safety of the country that we should get to this normal year by the 1st of January next. If we look at the figures for the normal year, we will find that the main reduction is in the Civil Service Estimates, which come down from £497,000,000 to £305,000,000. Nearly every item abandoned is in the nature of extraordinary expenditure, such as loans to Dominions and allies and various subsidies, bread and shipping subsidies, coal mines and railways deficiency. There is no excuse for postponing the resumption of this normal year, because the Government have braved an enormous outcry by raising the fares before the holiday season has got going. If that is a determination to get rid of railway subsidies, it is for them to show the same determination in getting rid of other subsidies also, and to cut down the inflated Army and Navy Estimates to the normal expenditure by January the first next. The high burden of taxation on the country is certainly causing high prices. It has a deterrent effect against any economy, private or Government. It is hopeless to expect people to economise when they are taxed so heavily. Most are unable to economise because the normal amount of saving is taken in taxation. Those who can afford it say, "What is the use, when the savings are taken by taxation?" It is obvious that this heavy burden of taxation brings high prices and discourages enterprise, so it is essential to get to the normal year at the earliest possible opportunity. There is no reason beyond the possible claim which may be made, and which I do not accept, that the reduction of the Army and Navy may take a little longer than the first of January next. Even that is a small item compared with the reduction in the Civil Service Estimates. It is shown by the Chancellor that for the normal year he does not need any revenue for the Excess Profits Duty. To bring about the normal year by the 1st January the Chancellor has the sum of £310,000,000 arrears of Excess Profits Duty to fall back upon, and in all his calculations he has never taken this question into consideration. I speak subject to correction when I say that this sum of £310,000,000 will come in in addition to any sums which he has budgetted for as coming from Excess Profits Duty in this year, and that sum is therefore a future asset. I submit he ought to take this large sum of arrears into account. I gave notice of an Amendment to charge interest on the arrears of Excess Profits Duty, but it was ruled out of order on the ground that it amounted to a charge on the subject. Another Amendment of mine was ruled out on the ground that it imposed a charge on the Exchequer, so that I was between the devil and the deep sea. It would not have been out of order for the Chancellor to have proposed to charge interest on arrears, and I submit it is a gross injustice on those who pay promptly to be penalised by the retention of the Duty longer than Would be necessary if everybody paid promptly. I notice in a prospectus of Armstrong, Whitworth and Co. it is stated that the accounts for the year 1916–17–18 have not yet been published owing to the fact that negotiations with various Government Departments have not been completed. The statement continues: have heard no reason against the justice or practicability of such a charge on arrears.
The right hon. Gentleman asks what alternative we have to offer. As far as I am concerned, I submit that a very much better tax, in that it would not provide the same clog on industry and enterprise, would be a flat rate levy on profits beyond a certain percentage. I would exempt a percentage to comply with the pre-War capital which is making a very small return, or capital subject to valuation, not of the Government, but subject to proof, a valuation on the part of the person liable to the levy, up to 6, 7, or 8 per cent. A flat rate levy beyond that amount would be quite productive, and nobody would object to it, while it would remove the very great objection against the Excess Profits Duty that it is preventing people making more than their pre-War standard, that it is also preventing new enterprises and decreasing production and thereby defeating the very object of the tax itself, which is to raise increased Revenue. Apart from this, I submit that on his own showing of the normal year the right hon. Gentleman does not even need an alternative, and that if he takes into consideration arrears, if he reduces expenditure, as he can do, then a very small substitute in the way of a levy such as we have in the Corporation Profits Tax will be amply sufficient for his needs. I would add to the appeal of my hon. Friend and ask the Chancellor if he will not accept this date, to put a date prior to August, say, 31st March, so that the community can know with certainty that this duty is not going to form a permanent part of our financial system. If such a date were fixed, I venture to predict that it would so encourage industry that the revenue in every direction would increase and the dangers of unemployment vanish.
I do not wish to weary the House by going over the arguments which I used the other day in connection with the opposition which I then offered to this tax, but the position has been slightly altered by the Committee stage, and I should like to understand from my right hon. Friend what his real intentions are in regard to the continuance of the tax at 60 per cent. As I understand the Bill, in the form in which it is at present before the House, it imposes a tax at the rate of 60 per cent. until August 4th, 1921, that is, approximately for 20 months. I understood my right hon. Friend to say that the tax should be 60 per cent. for this year, that is for one year, that is, from the 1st January, 1920, and that after this year it should not exceed 40 per cent. In the Bill as at present before the House the tax is 60 per cent. for a period of twenty months, and I should like to know whether that is my right hon. Friend's intention. I think most hon. Members have an idea there was an understanding that it was in the nature of a pledge that the tax should not continue at this higher rate for more than a year. We had pledges during the continuance of the War that the tax was only for the period of the War, but those pledges, unfortunately, have been disregarded. They were pledges by the then Chancellor, pledges which were repeated by the present Leader of the House, and they are, I am sorry to say, disregarded by the Government. But I should like to know whether we are to understand—and I trust my right hon. Friend will definitely answer this question—that the Bill is even now to be amended so that this tax is simply 60 per cent. for one year and 40 per cent. afterwards, or whether it is going to be put through in its present form and to be 60 per cent. for a period of 20 months. I think we ought to have a very clear and explicit understanding on this subject. It is of importance, because this tax has, to a large extent, paralysed industry. I am told that in the City of London to-day issues are being made for new companies which are able to offer a good business proposition to the investing public, and they are unable to obtain any underwriting, and that, except in a very few cases where there is probably a high datum line, they are unable to obtain subscriptions to their issues. This, to my mind, is a matter of the very gravest concern to them all, because it means that enterprise is discouraged. It means that there will be no new development, and that in the coming winter months and the following year we shall have no commercial enterprise, and in its wake unemployment and all the misery and unhappiness which result from that state of affairs.
I am not going over the arguments I used last week, but I do desire to remind the House of the points which I put on that occasion. There is the risk we run of losing the whole of the revenue which is derived from British companies which are carrying on their business abroad. Then the tax is an unjust one. It is being levied on firms. The largest payers to it are the firms with a low datum line, and they are being called upon to pay this tax so as to enable repayment to be made to the firms with a high datum line, who are entitled to repayment under the provisions of the No. 2 Act of 1915. That seems to me very unfair and very unreasonable. On top of it all, what does the tax produce? Less than half of the apparent proceeds; because if the tax were entirely withdrawn you would get an increased yield from your Income Tax, Super-tax, and Corporation Profits Tax, and give that stimulus to industry which, I am perfectly certain, would make up a great deal of the deficiency. A few days ago a White Paper, to which reference has been made, was issued, of income and expenditure in what is called a normal year. I do not know whether, with our expenditure and the adventures to which the Government seem committed, when we are ever likely to get a normal year. But if we ever do get a normal year, we have, according to the statement of the Chancellor, a surplus of £148,000,000 to meet the service of the Debt and redemption. I am told by those who have carefully investigated these figures that the surplus is actually under-estimated, and that it should be £192,000,000. If that be so, the House should exercise greater consideration before imposing this burdensome tax on industry. If the Government insist on this tax being imposed, as in the Bill, for a period of 20 months—not for the year—then I am sure all enterprise and new development will be discouraged, and our country thrown into a grave position of chaos, with resulting bad trade and certain unemployment.
I should like to begin by reassuring my hon. Friend who has just spoken on a point that he is, I am perfectly certain, as familiar with as I am. In each successive Finance Bill the Excess Profits Duty has been continued until August 5 in each following year. The reason that date was fixed was to continue the existence of the tax until such time as the Finance Bill of the following year might become law, and so obviate the risk of any hiatus. The Chancellor of the Exchequer gave an undertaking at the earlier stage of our proceedings that in the event of the Excess Profits Tax being continued he would not propose a higher rate than 40 per cent.
From when?
I am coming to that point. That rate, or whatever rate might be proposed, would be in the Budget of next year, and would take effect following the precedent of each year from the first accounting period of the Excess Profits Duty, from the 1st of January, so that the 60 per cent tax would run for twelve months. We had a good many discussions on this tax and those who are opposed to it have failed so far to defeat the Chancellor of the Exchequer by a direct assault and they are attacking him tonight by a process of sap and mine. The proposal that has been moved by the hon. Member of North East Derbyshire (Mr. Holmes), does not, in fact, help us at all, and I will explain why. Let me remind the House that when the Excess Profits Duty does come to an end it will be necessary to have a good deal of rather complicated legislation adjusting the periods so that the tax may have operated throughout the term of its existence as fairly as can possibly be arranged. If the tax were brought to an end on the 1st January it would be necessary to introduce legislation with retrospective action which is always a difficult and complicated thing to do.
Let me take a point which was made a good deal of by the hon. Member for North East Derbyshire. The hon. Member used two arguments. Firstly, he said, as I understood him, that trade was going to be very bad this winter, and, of course, it stands to reason that the worse trade is the less Excess Profits Duty people will have to pay. Practically the hon. Member says, "If trade is very bad there will be nothing to pay, but take away this tax and business will go up by leaps and bounds." I do not follow the argument, although it may be possible that I have not represented what he said with perfect fairness. The other point which the hon. Member laid stress upon was that if the Excess Profits Duty were abolished the business man would know exactly where he stood. That is exactly what he would not know if the tax were abolished from the 1st of January. I agree that certainty is of the utmost importance to men in business, but to bring it to an end on the 1st of January would plunge them into greater uncertainty. To-day a business man knows that he has to pay 60 per cent. tax for the present year and he has the assurance of the Chancellor of the Exchequer that next year if my right hon. Friend proposes an Excess Profits Duty it will not exceed 40 per cent. Therefore if the tax is continued the business man knows where he stands, and if it comes to an end on the 1st of January he knows that three months in front of him looms the Budget. He knows perfectly well that it will be impossible next year— so far as any human foresight can advise us—to do without either the Excess Profits Duty or a tax which will contribute a substantial amount towards the requirements of that year. He will not know, therefore, what tax will be imposed on him—whether a considerable increase will have to be made in the Corporation Tax or whether the House may not think fit to re-impose the Excess Profits Duty itself. It will make a hiatus for three months in which the commercial community will be in a position of considerable difficulty—it will be a period of complete and absolute uncertainty, and the state of the commercial man will be worse than it is to-day. We have had a good many quotations given us in this House as to what the business community is thinking. I know quite well every section of the community dislikes any tax which has to be put on. Throughout the different stages of Finance Bills year after year every section in turn fights to get what it can out of it. Sometimes they are successful in securing concessions; sometimes they are not. On the whole this year those who have tried to get abatements and concessions may congratulate themselves on a tolerable measure of success. The views of the business community are not always easy to get in this House. I also have had the privilege of having conversations with and receiving communications from the business community, in the same way as others who have spoken with so much vigour against the Excess Profits Duty. Only this day two very curious instances have reached me. I have been told by some business men that much as they dislike the Excess Profits Duty they prefer it to the Corporation Profits Duty. On the other hand I have heard it said by more than one business man—and I hope the House will forgive me if what I say seems to involve a criticism of my colleagues—I have heard it said that the Chancellor of the Exchequer is the only Minister who has a backbone, and they add, "Let him stick to his guns." The Chancellor of the Exchequer throughout this Budget has acted in a way which I am sure the House entirely appreciates. While gladly making such concessions as have been in his power, he has stuck to his guns, and I do not think that at this late stage of the proceedings when we have almost reached the end of the Report, the House can expect him to give way on an amendment of this kind. I hope that after the few remarks I have made—and I have purposely tried to keep as close as possible to the amendment and not to be led away into side issues—the House will think the Chancellor of the Exchequer is right in this attitude, and will support him if necessary in the Division Lobby.
We may all agree that this method of raising income by an Excess Profits Duty is not a scientific plan, and so far, in spite of all appeals to the collective wisdom of the House to devise a better and more economical system, so far not one has been suggested which would enable the Chancellor of the Exchequer to dispense with the Excess Profits Duty. There apparently is no possibility of that up to the present, and I hope the right hon. Gentleman will continue to keep a stiff backbone against these appeals to reduce the Excess Profits Duty, at any rate until a scheme has been evolved which is likely to be more generally acceptable. It is suggested that this is a vicious tax and one responsible for the increase in the cost of living. But what were the conditions that existed before the duty was applied? The cost of living was increasing by leaps and bounds, and because of the effect on the country of wholesale profiteering, the Government was compelled to introduce this duty as a check on those who were responsible for the rising cost of living. These arguments to-night are rather surprising, because we have always been told that the cost of living was due to the workers claiming increased wages. Now we find that it is because of this duty, so that that argument falls to the ground. [HON. MEMBERS: "No!"] Our claims have followed the rise in the cost of living; and the cost of living has risen because the employers have wanted to avoid their obligations to the State. In the absence of the taxation on war wealth, the Labour party have suggested that this duty should be raised, not to 60 per cent., but to 100 per cent., to prevent a further rise in the cost of living. We have suggested that a more scientific way of cutting down the cost of living would be a levy on capital. There are many other levies and taxes which we considered to be unjust. We consider that the taxes upon sugar, tea, coffee, and cocoa are unjust; but when we suggested that they ought to be removed hon. Members went into the Lobby against us. They are always prepared to broaden the basis of taxation so that those who are best able to bear it transfer the burden to those least able to bear it. Those who are liable to Excess Profits Duty are in a position to bear the burden without any danger of going into the Bankruptcy Court. It is suggested that this duty is going to have a damaging influence upon business. We have had circulars from business concerns saying that those who talk of unemployment in the near future are mistaken, and that there never was such a boom and there never were so many orders. We suggest that, instead of this tax, there ought to be a tax on war fortunes. A Committee was appointed to inquire, and the findings of that Committee were that less than 1 per cent. of the community had made fortunes of £4,180,000,000, and over 200 millionaires had increased their incomes during the war by over £200,000,000. I quite agree that it is very essential that there should be economy in every department of the State, but when the proposal was put forward whereby we might, by the tax on war fortunes, have reduced the debt we had to face by over £200,000,000 a year, this House was almost unanimous against carrying out the findings of the Committee. What would happen if the Chancellor of the Exchequer was unable to raise the £300,000,000 which he anticipates? The Government would have again to go to the people who are responsible for raising the cost of living by increasing the prices and borrowing. We hope the Chancellor of the Exchequer will not respond to the appeal, but that he will stick to the Excess Profits Duty of 60 per cent. until the House is amenable to a levy on capital, or to absorb war fortunes, in order to cancel our debt, so that the £300,000,000 from the Excess Profits Duty will be no longer required.
I do not intend to occupy the time of the House more than two minutes. If this is going to a Division I shall support the Government tonight, but I regret, as an individual that the party to which I belong is taking that step. I regret it for a variety of reasons. If I approach this question from the point of view of direct taxation I realise how unjust this tax is. I have personal knowledge of an undertaking, ably carried on before the war, in which the proprietor was putting in as much of his profit as possible for the purpose of developing the industry. The consequence was, that when the war came, he had an extremely low datum line. Since the war that industry has developed marvellously, and, under ordinary conditions, this trade would have had a far greater return than he has been allowed by reason of the Excess Profits Duty. Therefore, it must inevitably be an unjust tax. On the other hand, take the case of a firm where they were taking out of the industry as much of the profits as they possibly could, and purely by accident they happened to have in 1914 an exceedingly high datum line. The consequences are that throughout the war one firm, B as against A, has been able to have profits far beyond those of A. There has been nothing in the nature of the personnel or from the point of view of good management to warrant the distinction. If one approaches it from that point of view one immediately realises that it is a bad tax. But if I come to approach it from the point of view of indirect taxation, and my mind inclines to the idea that it is an indirect tax after all, I do not like it. I readily approve of the point that has been made by the Mover of the Amendment that the tax is passed on from the manufacturer to the retailer and from the retail dealer on to the consumer. In the final analysis of the tax it is borne by the consumer to a very large extent, and for that reason I do not like it at all, and I very much regret that my party has agreed to associate itself with the Government. The working classes are amongst the great body of consumers and they will have more or less to bear the burden of the tax. My party are support- ing it because they say the money must be raised. My own opinion is that if it has got to be raised in this way it will be raised at the expense very largely on the class to which I belong, and it will be saving those who ought to have been made by enactment, I will not say to disgorge their ill-gotten gains—because that is too strong a term—but to return to the State some of the enormous profits which they have derived from the exigencies of the War, and we ought to have in its place a levy upon capital or upon war fortunes which would relieve us of the very great burdens which we are bearing at present. However, against my will, if it goes to a Division, I shall support the Government.
After my hon. Friend's statement, I think it necessary to state why we will support the Government in the imposition of the Excess Profits Duty again this year. We recognise that it is by no means a direct tax, but is only a war expedient, and until such time as we can convince the Chancellor of the Exchequer, or until such time as the Labour Party itself occupies the benches opposite as a Government and can put a proper tax on the people who have the money, we must be prepared to accept such expedients as the Governments in power are prepared to put on the people with the money. It is rather peculiar that we should have the same hon. Members advocating the sweeping out of existence of the Excess Profits Duty as oppose any arguments put forward by the Labour party whether for a levy upon capital or even for a tax upon war fortunes. It is rather significant that the same arguments that we hear to-night are practically identical in form if not in language with the arguments that no capital levy should be imposed and that war fortunes ought not to be taxed.
On a point of Order, Mr. Speaker. As the next Amendment deals with the amount of the tax, is it in order to make speeches on the subject of the tax on this Amendment, which merely affects the date of the tax? That is the only question now.
Strictly speaking the hon. Baronet is right. The only question at issue now is the date at which the tax is to be terminated. But I thought that perhaps it was for the convenience of the House that a general discussion should now take place. I have no doubt that the same arguments will not be used in regard to the later Amendment.
The next Amendment is a specific amendment to reduce the tax. Therefore, the arguments on the next Amendment will be quite different from the arguments on this Amendment.
It is significant that the hon. Baronet did not object earlier, although he has been sitting here for three-quarters of an hour. I was merely putting the point of view of our party, and was going on to point out an argument which was used by the Chancellor of the Exchequer. We have been told by hon. Members to-night that this tax increases the price of goods which have to be purchased by the working classes: but hon. Members seem to have forgotten a statement by the Chancellor of the Exchequer that when the tax was reduced from 80 per cent. to 60 per cent. prices did not fall as they ought to have fallen, and the balance went into the pockets of the individuals who were running the businesses. That may have been a bad argument, but it was true. If you study the Board of Trade figures of the cost of living since the last Budget up to the present time a steady increase will be found in the prices of food-stuffs and all commodities necessary for the lives of the people; and the increased profit has gone into the pockets of the manufacturers and the tradespeople. It is necessary that some tax should be imposed on excess profits. You had the war and you must pay for it. You resisted the War Wealth Levy and the Capital Levy. Do you wish to escape paying for the War? If not, you must pay some way, and if you will not pay it upon the fortunes which many of your class have made you must pay it in Excess Profits Duty. I would welcome an Excess Profits Duty of 100 per cent. That would stop the 40 per cent. which will be left to you under the proposed 60 per cent. duty and would give you no incentive for making excess profits. The working class want to prevent you from having such an incentive. [An HON. MEMBER: "They want higher wages."] The higher wages they earn are simply a part of the wealth they produce. When you consider the indirect taxation that is imposed on the working classes, this excess profits taxation is more than justified. Therefore we shall support the Government. It is an expedient that was brought into operation owing to the War to stop the clamour of the people outside. It has produced large sums of money for the Government and I trust the Chancellor of the Exchequer will stand to his guns and carry this to a division.
I do not want to add anything to what was said by my right hon. Friend, but to make an appeal to the House that we should be allowed to come to a decision upon this question, which we have debated again and again. This is, I think, the fourth debate that we have had upon this proposal, and nothing said to-night will change the vote of anyone. It would be a business-like thing for us to decide the matter now, in view of the further Amendments on the Paper.
May I make an appeal to my right hon. Friend.
The hon. Member has already spoken.
Question put, "That the words 'fifth day of August' stand part of the Bill."
The House divided: Ayes, 160; Noes, 20.
Division No. 249.] AYES. [11.58 p.m. Addison, Rt. Hon. Dr. C. Boscawen, Rt. Hon. Sir A. Griffith- Coats, Sir Stuart Agg-Gardner, Sir James Tynte Bowerman, Rt. Hon. Charles W. Cobb, Sir Cyril Amery, Lieut.-Col. Leopold C. M. S. Breese, Major Charles E. Colvin, Brig. -General Richard Beale Baird, Sir John Lawrence Bridgeman, William Clive Conway, Sir W. Martin Baldwin, Rt. Hon. Stanley Brown, Captain D. C. Coote, Colin Reith (Isle ot Ely) Barlow, Sir Montague Brown, James (Ayr and Bute) Cope, Major Wm. Barnes, Major H. (Newcastle, E.) Buchanan, Lieut.-Colonel A. L. H. Courthope, Major George L. Barnett, Major R. W. Campion, Lieut.-Colonel W. R. Cowan, D. M. (Scottish Universities) Barnston, Major Harry Casey, T. W. Craig, Colonel Sir J. (Down, Mid) Barrie, Charles Coupar Cayzer, Major Herbert Robin Davies, Alfred Thomas (Lincoln) Bell, Lieut.-Col. W. C. H. (Devizes) Cecil, Rt. Hon. Evelyn (Birm., Aston) Dawes, James Arthur Bigland, Alfred Chadwick, Sir Robert Edgar, Clifford B. Bird, Sir A. (Wolverhampton, West) Chamberlain, Rt. Hn. J. A. (Birm., w.) Edge, Captain William Blake, Sir Francis Douglas Chamberlain, N. (Birm., Ladywood) Edwards, C. (Monmouth, Bedwellty) Berwick, Major G. O. Coates, Major Sir Edward F. Edwards, Major J. (Aberavon) Eyres-Monsell, Commander B. M. Loseby, Captain C. E. Sexton, James Falcon, Captain Michael Lunn, William Shaw, William T. (Forfar) Farquharson, Major A. C. Maclean, Nell (Glasgow, Govan) Short, Alfred (Wednesbury) Ford, Patrick Johnston Haddocks, Henry Shortt, Rt. Hon. E. (N'castle-on-T.) Foreman, Henry Manville, Edward Sitch, Charles H. Forestier-Walker, L. Marks, Sir George Croydon Spencer, George A. Forrest, Walter Mitchell, William Lane Sprot, Colonel Sir Alexander Fraser, Major Sir Keith Mond, Rt. Hon. Sir Alfred M. Stanley, Major Hon. G. (Preston) Fremantle, Lieut.-Colonel Francis E. Montagu,' Rt. Hon. E. S. Steel, Major S. Strang Gibbs, Colonel George Abraham Moore-Brabazon, Lieut. -Col. J. T. C. Strauss, Edward Anthony Gilbert, James Daniel Moreing, Captain Algernon H. Sturrock, J. Leng Goff, Sir R. Park Morgan, Major D. Watts Sutherland, Sir William Graham, W. (Edinburgh, Central) Munro, Rt. Hon. Robert Swan, J. E. Green, Joseph F. (Leicester, W.) Murchison, C. K. Thomson, T. (Middlesbrough, West) Greenwood, William (Stockport) Neal, Arthur Thomson, Sir W. Mitchell- (Maryhill) Gretton, Colonel John Newman, Sir R. H. S. D. L. (Exeter) Tryon, Major George Clement Hartshorn, Vernon Norris, Colonel Sir Henry G. Vickers, Douglas Haslam, Lewis Parkinson, John Allen (Wigan) Walsh, Stephen (Lancaster, Ince) Henry, Denis s. (Londonderry, S.) Parry, Lieut.-Colonel Thomas Henry Walters, Rt. Hon. Sir John Tudor Hewart, Rt. Hon. Sir Gordon Peel, Col. Hn. S. (Uxbrldge, Mddx.) Ward-Jackson, Major C. L. Hoare, Lieut.-Colonel Sir S. J. G. Perkins, Walter Frank Waterson, A. E. Hood, Joseph Perring, William George Watson, Captain John Bertrand Hope, James F. (Sheffield, Central) Pinkham, Lieut.-Colonel Charles Wigan, Brig. -General John Tyson Horne, Edgar (Surrey, Guildford) Pollock, Sir Ernest M. Williams, Lt.-Com. C. (Tavistock) Home, Sir R. S. (Glasgow, Hillhead) Pulley, Charles Thornton Williams, Col. Sir R. (Dorset, W.) Jameson, J. Gordon Purchase, H. G. Williamson, Rt. Hon. Sir Archibald Jephcott, A. R. Rae, H. Norman Willoughby, Lieut.-Col. Hon. Claud Johnson, Sir Stanley Raper, A. Baldwin Wills, Lieut.-Colonel Sir Gilbert Jones, Sir Edgar R. (Merthyr Tydvil) Raw, Lieutenant-Colonel N. Wilson, Daniel M. (Down, West) Jones, Henry Haydn (Merioneth) Richardson, Alexander (Gravesend) Wilson, Colonel Leslie O. (Reading) Jones, J. T. (Carmarthen, Llanelly) Richardson, R. (Houghton-le-Spring) Winterton, Major Earl Kidd, James Roberts, Rt. Hon. G. H. (Norwich) Young, Lieut.-Com. E. H. (Norwich) King, Commander Henry Douglas Robinson, S. (Brecon and Radnor) Young, Robert (Lancaster, Newton) Lane-Fox, G. R. Rodger, A. K. Young, W. (Perth & Kinross. Perth) Law, Rt. Hon. A. B. (Glasgow, C.) Rose, Frank H. Younger, Sir George Lawson, John J. Roundell, Colonel R. F. Lewis, Rt. Hon. J. H. (Univ., Wales) Scott, A. M. (Glasgow, Bridgeton) TELLERS FOR THE AYES. —— Lewis, T. A. (Glam., Pontypridd) Seager, Sir William Colonel Sir Robert Sanders and Mr. Parker. Lister, Sir R. Ashton Seddon, J. A. Looker-Lampion, Com. O. (H'tingd'n) Seely, Major-General Rt. Hon. John
NOES. Aciand, Rt. Hon. F. D. Kelley, Major Fred (Rotherham) Palmer, Charles Frederick (Wrekin) Atkey, A. R. Kenworthy, Lieut. -Commander J. M. Rattan, Peter Wilson. Balfour, George (Hampstead) Kiley, James D. Terrell, George (Wilts, Chippanham) Briant, Frank Lyle-Samuel, Alexander White, Charles F. (Derby, Western) Clough, Robert Macquisten, F. A. Fildes, Henry Moore, Major-General Sir Newton J. TELLERS FOR THE NOES. —— Grant, James A. Morden, Colonel H. Grant Mr. Holmes and Major Entwistle. James, Lieut.-Colonel Hon. Cuthbert Newbould, Alfred Ernest
I beg to move in Sub-section (2) to leave out the word "sixty" ["sixty per cent. of the excess"], and to insert instead thereof the word "fifty."
12 M.
In moving this Amendment, the effect of which would be to reduce the Excess Profits Duty from sixty per cent. to fifty per cent. for this year, in the first place I want to assure the Chancellor of the Exchequer that I move this in no spirit of hostility, but rather with a view to removing or mitigating what I believe to be the one bad blot on a budget that he may otherwise, generally speaking, be proud of and because I firmly believe that if it is reduced to fifty per cent. the Chancellor will not be the loser to any considerable extent this year and that he will be the gainer in the future.
The point of the exact percentage which should be imposed in order to make the tax a success has not, I submit, received sufficient consideration. The inherent badness of the tax aroused such a storm of opposition that the Chancellor has been able up to the present to carry it as originally proposed without that sufficient consideration as to percentage. The Chancellor told us recently that the Prime Minister in middle age was not too old to learn; and I hope that the right hon. Gentleman will not be afraid to own to a change of mind in altered circumstances. We have heard in previous debates of the hardship of this tax on small businesses, and for the concessions in that respect we are duly grateful. We also heard a great deal about wealthy firms, and that they were prepared to pay the tax. Those we have not heard so much of are firms, not the very largest and not small, but substantial firms, and particularly those which were engaged during the war on special war work, and who have now had to turn over to a different class of work. In order to do the same amount of business as that which they transacted before the war, such firms have had to at least double their working capital. The result is that numbers of those firms have, perforce, been obliged to put back into their business money really payable to the Chancellor of the Exchequer as Excess Profits Duty. That is the reason why there are such immense sums of Excess Profits Duty in arrear. The firms have not got the money, which in many cases has been sunk in machinery and extensions. If such firms were to be sold up now to pay the duty, fifty per cent. of the amount would not be recovered. What is the effect on the yield of that particular state of affairs.
I do not think in all these Debates I have heard any real reference, or, at any rate, not elaborated, to the very serious point of the claims which are going to be made in future years for rebates. In calculating what the Chancellor of the Exchequer is going to get out of this extra 20 per cent., he has himself estimated the yield for this year at £10,000,000 and for a full year at £100,000,000. You may take off probably at least a third of whatever reduction there might be in the yield of Excess Profits Duty, because the Exchequer would get that in Corporation Profits Tax, Income Tax, and Super-tax, and therefore you have got to deal, for the purposes of the present year, with a sum of this kind:—If you reduce the Excess Profits Duty to 50 per cent., instead of getting £10,000,000 from it you get, not £5,000,000, but probably £7,000,000, leaving only £3,000,000 still to be dealt with, and I venture to suggest that a very large amount of that £3,000,000 will be lost through the rebates which will be claimed for firms who have not made profits during this year. I know of a case in my own constituency at the present moment where one of these firms who were making excess profits and doing a big business during the War owe a sum of £30,000 arrears of Excess Profits Duty. They have no money. The change from war work to peace work has been such a big business with them that it is certain they could not for some years to come, at any rate without an immense expenditure of capital which they have not got, make any very large sum of excess profits beyond their retainable amount. I have been told by those actively concerned in the management of that business that their position is that they are not prepared to go to the risk of paying large sums to get new Capital, and entering upon big and risky business, with the intention of trying to make out of excess profits money to pay these arrears of Excess Profits Duty, when it will obviously pay them better to consolidate and conserve the elements of their business and for some years to come, by doing that, to reduce their profits in such a way that they will pay off that £30,000, not out of excess profits which they will make, but out of rebates which they will claim for the losses during the next few years. I think that is a very serious point which has not been sufficiently brought out in the past.
May I quote another instance to enforce that? Only on my way down to the House while the last Debate was going on on this subject I was stopped in the City by a man who is a director of several large companies of a particular kind. He said, "Go and support the Excess Profits Duty and get it up to 60 per cent." I said, "I am surprised to hear you say that; why do you?" He said, "The higher it is, the more I shall get back in the next few years." That, I think, certainly requires to be taken into consideration. Remember that many of these cases are cases deserving of sympathy in every way. Most of these firms are being managed now by those back from the War. Some of the men who ran these businesses during the War have died or retired, having probably had enough of it to last them for the rest of their lives, and they have left their businesses to their sons, who have come back, and the Government in these cases, by putting on this extra 20 per cent. Excess Profits Duty, will prevent these men, who are back from the War and trying to change these businesses over from a war footing to a peace footing, from carrying on as they would wish or from developing their businesses as they would desire. They will find themselves crushed under the load which is more than they can be expected to carry. The change which has taken place since the Budget was introduced is very considerable in regard to this question of Excess Profits Duty. We have un- doubtedly had a certain slump in respect to investments and securities on the Stock Exchange. Signs are by no means wanting that the abnormal prices which have held for some time past are likely to come down. These abnormal prices, which have resulted in the huge excess profits, and which were the best justification for the duty, have only been made possible by the power of those who held the goods to charge more or less any price they liked for them. It is only by increasing production that you can get those prices down As production increases, the ordinary course of competition will bring about a reduction in prices, which will also bring about a state of affairs where this Excess Profits Duty will not be paid. I suggest most seriously that, since the Budget was introduced in the spring, there have been signs which ought not to be lost sight of as to this change in prices, and as to what is likely to happen before another twelve months has expired.
There is perhaps one other point that deserves special mention. The Chancellor in his last speech, I think, claimed that he was a partner in industry and also that it was of the highest importance that the national credit should stand high in the "world. I would suggest to the Chancellor that so far as he is a partner he is in the position of a sleeping partner, and directly you get the sleeping partner taking more than so per cent. of the profits then the active partner has not much inducement to work. Personally, I feel that a reduction even to 40 per cent. would probably in the end pay as well as the 60 per cent. I feel perfectly certain that the very slight amount which the Chancellor stands to lose by the reduction to 50 per cent. would be made up by the impetus and encouragement it would give to all those men who were doing their very best to try and build up good businesses, and it would have the result of very considerably increasing the amount assessable to Income Tax in future years. May I say in regard to the national credit that that is assured without the 3½ millions which the Chancellor might possibly lose if he were to reduce this tax to 50 per cent. The position of the country among the nations of the world in the matter of national credit depends, not merely upon the national budget, but upon the stability and prosperity of the big firms in this country. I do ask the Chancellor very earnestly, at this latest hour, to consider whether he could not give some encouragement, bearing in mind particularly the cases of these many large and substantial firms which, unless they have some encouragement, are likely to be claimants against this fund rather than payers of tax during the next few years.
I have pleasure in seconding this Amendment.
I would like to take this, the first opportunity I have had, of saying how much I appreciate the way the Chancellor has met cases of hardship in regard to the Excess Profits Duty. I also desire to thank him for the consideration he has given in regard to the subscriptions to universities, charitable institutions, and the like. In regard to this particular Amendment, I would ask him to look upon business men not altogether as his worst enemies, but rather as his best friends. I ask him to consider this in reducing the Excess Profits Duty to 50 per cent. from 60, not as a concession to business men, but because it would really be in the best interests of the Exchequer. I believe if he would reduce the duty from 60 per cent. to 50 per cent. he would receive more money. Business men have as much right to receive encouragement in their business as any working man has to receive increased wages. Members of the Labour party seem to be, voting very freely in increasing taxation. What would they think if a business man, after paying some of his workmen at piece rates, and finding, that they were obtaining rather higher wages than usual, said: "Now then, I shall have to cut down your wages"?
They always do it.
But if they do it is not a point that meets with the approval of hon. Members. Business men require encouragement in just the same way. Another reason is that if the Chancellor could see his way to reduce this tax to 50 per cent. it would encourage employment. There is not the slightest doubt that since this Budget was introduced unemployment has risen. I was surprised to hear the Leader of the House say that was not the case the other day in reply to a question. But in the "Labour Gazette" for July I find there has been a very steady increase in unemployment during the last two months. Two months ago it was about ¾ to ⅞1 per cent., now it is about 1¼ per cent., a decided increase.
There are Members on the Labour Benches who have been submitting that business men have been saying how full their order books were, and what a tremendous boom there is in business at present. I can only speak from what I know, but, in the mill where I work in Oldham, this morning I was looking through the order books, and I can assure the House that we have only sold half a week's work during the last 14 weeks. That does not appear to be very much of a "boom." I think it would encourage employment if business men had more security in regard to the taxes they have to bear. Some hon. Members on the Labour Bendhes—one on the Front Bench in particular—said they would be glad if the tax were to be made 100 per cent., but either they did not know, or did not understand that, if such were the case some men would have to pay 6, 10, or 100 times as much as their neighbours. If that be the idea of what is fair taxation I am sorry for the hon. Member's idea of political economy. Another hon. Member said that if the burden of taxation be increased, it always falls most hardly on the less paid portion of the community. I agree with him entirely, and no tax, in its incidence, has caused more hardship than the Excess Profits Duty, because all the taxes are passed on to the consumer. I cannot understand some hon. Members' political economy when one of their leaders says that the higher the tax the greater the hardship on the poor, and the other says he would be glad if the tax were raised to 100 per cent. I ask the Chancellor of the Exchequer not to make a concession to business men, but in his own interest to reduce this tax to 50 per cent., because I feel that by giving encouragement to business men to work hard, instead of trying to daunt them in business, he would receive more revenue, and it would be better for him in the long run.
I hope that the hon. Gentleman and my hon. Friends who have moved and supported this Amendment will not think me disrespectful if I attempt to answer them very briefly. I am not certain that we have ever directly voted on this particular proposition, but we had it before us on the last occasion when we were discussing this matter in Committee, and I then explained the views of the Government upon it. As regards the argument used by my hon. Friend who moved the Amendment, I think I can say what I have to say in reply very briefly. He thinks that the Government have taken insufficient notice of the effect which the raising of the fate has upon the repayments which may be claimed. Of course the number of cases in which repayments may be claimed and the amount for which they can be claimed are to a large exent dependent on the general conditions of trade, but we have some experience to help us. In framing our estimates of the yield which I anticipate of £100,000,000 from levying this duty at 60 per cent. for twelve months, we make all allowance for the repayments-which on our first experience we are led to anticipate. Then my hon. Friend spoke of the difficulty of some firms or businesses in finding cash to make their payments. He said truly that they need more capital in consequence of the higher cost of labour, raw materials and stock, and that there were businesses which if they were suddenly called upon to meet the whole of their liabilities probably could not do it. We have recognised that. That possibility is recognised in the law as it stands. It is no new thing and I do not think it will be said that the Inland Revenue Authorities, though they are bound to safeguard the revenue and to see that one taxpayer does not shirk his duty, thus throwing an additional burden upon his fellow taxpayer, have acted harshly or unconscionably when firms could show that it was really impossible for them to meet their responsibilities at once. They have used the discretion vested in them to allow such time as may be necessary.
I do not suggest that firms have been unduly pressed in any way. My point was that being in the position in which they are they will prefer to cut down their businesses rather than take any risks in striving for bigger profits in the future.
I am glad that my hon. Friend recognises that the Inland Revenue Authorities are administering their difficult duty fairly and satisfactorily. What he has just said is a matter about which I may be permitted to hold rather different views from him. I regard matters rather differently from him. I have become accustomed by this time to hear opinions expressed in the form that taxes will produce no revenue because the taxpayer will not work or will not buy or will not consume in consequence of the awful exactions of the Chancellor of the Exchequer. These prophecies do not always come true, and though I admit the extreme difficulty of forecasting the course of events in the next twelve months, I think if business men keep their heads and their courage they have nothing to be afraid of. If there is a panic they will have worked themselves up to it and they will have helped to their own misfortune. There is a danger on the one hand of having such a misfortune produced by our con confidence and undue speculation, and when they have recovered from that frame of mind they are likely to be rash and to go to the other extreme and persuade themselves that misfortunes are inevitable and produce the misfortunes themselves. I have only one other word to say in regard to the criticism of my two hon. Friends. I think they exaggerate the effect one way or the other on trade of such a concession as my hon. Friend asks for. I do not believe that reducing the rate from 60 to 50 per cent. would make all the difference between disaster and brilliant success. If this is what the traders of this country and the people of this country subject to Excess Profits Duty desire, it is too late to go for it now. This should have been the proposal which they should have made on the Report stage of the Resolution instead of them setting out to fight the whole thing lock, stock, and barrel. They did not want concessions then and they were not prepared to discuss them. It is not for people who took up that attitude through their representatives to come at the last hour to ask for concessions. I have made very considerable concessions, as I promised I would. I am not saying of my hon. Friend that he took up that attitude at the beginning. I am talking of the main body of taxpayers as they spoke through representative associations. I have made very great concessions. They have been directed to those classes of cases which in the early stages of our discussions were from all sides of the House described as those who suffered most seriously. I was very glad to hear my hon. Friend opposite acknowledge in such handsome terms the effort I made to meet the appeal then made. I have met it in no ungrudging spirit, and I cannot go further than I indicated in the earlier stage. There was an Amendment which would make clear the concessions promised, or to make good the promise I gave in the earlier stages. Beyond that I cannot go. We have threshed this question out again and again.
Not the 50 per cent.
Yes, we had the 50 per cent. on the last occasion this was discussed, not on an Amendment, but in the Debate we had that before us. Surely the subject has been adequately discussed, and it is time now to divide.
I intervene in this Debate not as a member of the trade organisations to which the Chancellor of the Exchequer has referred, or on behalf of the big trusts and combines, and I am glad to be able to pay a tribute to what the Chancellor has done to assist small businesses. What I intervene for is a class of business not a trust, but I would like to commend to the Chancellor the case of a firm brought under my notice which will give the House a very good idea of how the Excess Profits Duty of 60 per cent. would work out in the case of an average firm. This is a firm of three partners whose prewar standard of income was £3,000, which left each partner with a little less than £1,000. For the last year they had more than double that amount of £3,000, but they had demands from their staff for increases of wages which they met, and after they had met the demands of their managers and staff they were met with a net increase of £1,800. That is to say, their pre-war standard of £3,000 increased to £4,800. When they have met the demand for Excess Profits, the increased Income Tax and other figures, each partner will receive over his pre-War standard the magnificent amount of £70. Every one of these partners has had to double his expenditure to maintain his standard of living. In this case the employers had to double the pre-War earnings of their staff, and although they have doubled their profits all they have left is £70. This is how the 60 per cent. will work out in the case of an average firm, not a new concern, or a large trust or combine. I ask the Chancellor whether he does not consider 60 per cent. an excessive amount in a case like that. I would remind the Chancellor that in the earlier stages of the consideration of this matter, though he refused to entertain the removal of the tax altogether, he did not refuse to consider 50 per cent. Even though he did reduce it to 50 per cent. he would not necessarily lose 10 per cent., because he knows, and I am sure his advisers have informed him, he would get an increase from the Income Tax and also, possibly, from the Super-tax. I am sure the Chancellor has also had brought to his notice the cases of firms who have been considering whether they would extend their works and have decided in view of this high figure of 60 per cent., that they could not take the risk. In the past few months decisions of this kind have undoubtedly had a very serious effect upon the possibilities of the expansion of business, and it is therefore with some regret that I hear to-night the determination of the Chancellor not to consider any reduction of the figure of 60 per cent., especially in view of the case of the firm I have just mentioned, who, in spite of having doubled their pre-War profit, will find themselves left with a quite paltry sum. It is regrettable that the Chancellor has not kept his mind more open to deal with the reasonable demand now put forward.
One cannot help admiring the efforts of the hon. Gentleman (Mr. Terrell) on behalf of the cause he represents. He ought to be congratulated, and I am sure he is congratulating himself, on the achievements of himself and his friends, which have not been inconsiderable. All the way through these Debates I have had the feeling that they were not fighting so much for this year as for next year, and I think an examination of the Debates would make it clear that they are not exactly dissatisfied with the promises given so far as next year is concerned. The party with which I am associated will learn a, good deal from this agitation over the Excess Profits Duty. An hon. Gentleman opposite spoke of a "storm of indignation." There has been no "storm of indignation" outside the city, and that storm of indignation was one of the best manipulated movements in this country for some years. Hon. Members have spoken to-night about the incidence of the Excess Profits Duty falling upon the working classes. From what we have heard one would think that the cost of living had been standing still until the Excess Profits Duty was put up as the result of this Budget. The cost of living began to go up by leaps and bounds before there was any Excess Profits Duty, and whether there is an Excess Profits Duty or not the cost of living continues to go up. We do not welcome the Excess Profits Duty, and, as has been said all along, we do not welcome even the consideration of the War Wealth Tax; but we do wish to warn hon. and right hon. Gentlemen in this House that there is such a feeling throughout the country, especially amongst great masses of men who have paid the price during the past six years, that it would be well for this House to examine very closely during the next twelve months the question of the Capital Levy, in order to see if some definite scheme cannot be brought into operation with the object of reducing the colossal debt with which the nation is faced. The hon. Member behind (Mr. Kiley) appealed to the Chancellor to face the question of the new businesses, in fact he based almost the whole of his argument upon the new businesses and the small businesses. I think the Chancellor of the Exchequer has dealt very generously with the people concerned there. As I have said, we do not welcome the decisions of the Chancellor in this matter. As far as this party is concerned, we did not hurry our decision in the matter, because we did not care very much what decision we arrived at, because we knew the indifferent type of tax it was; yet we were compelled in the face of the nation's need to take this rough and ready method of supporting the Chancellor of the Exchequer. We hope that during the next twelve months he will examine very closely the question of the Capital Levy.
Question put, "That the word 'sixty' stand part of the Bill"
The House divided: Ayes, 96; Noes, 36.
Division No. 250.] AYES. [12.48 a.m. Agg-Gardner, Sir James Tynte Gilbert, James Daniel Raw, Lieutenant-Colonel N. Baird, Sir John Lawrence Goff, Sir R. Park Roberts, Rt. Hon. G. H. (Norwich) Baldwin, Rt. Hon. Stanley Green, Joseph F. (Leicester, W.) Robinson, S. (Brecon and Radnor) Barlow, Sir Montague Hartshorn, Vernon Rodger, A. K. Barnes, Major H. (Newcastle, E.) Hewart, Rt. Hon. Sir Gordon Rose, Frank H. Barnett, Major R. W. Hope, James F. (Sheffield, Central) Scott, A. M. (Glasgow, Bridgeton) Barnston, Major Harry Home, Edgar (Surrey, Guildford) Seager, Sir William Boscawen, Rt. Hon. Sir A. Griffith- Home, Sir R. S. (Glasgow, Hillhead) Seddon, J. A. Bowerman, Rt. Hon. Charles W. Jameson, J. Gordon Seely, Major-General Rt. Hon. John Breese, Major Charles E. Johnson, Sir Stanley Sexton, James Bridgeman, William Clive Jones, Henry Haydn (Merioneth) Shaw, William T. (Forfar) Brown, James (Ayr and Bute) Jones, J. T. (Carmarthen, Llanelly) Sitch, Charles H. Campion, Lieut.-Colonel W. R. King, Commander Henry Douglas Stanley, Major Hon. G. (Preston) Casey, T. W. Lane-Fox, G. R. Strauss, Edward Anthony Chamberlain, Rt. Hn. J. A. (Birm., W.) Law, Rt. Hon. A. B. (Glasgow, C.) Sturrock, J. Leng Coates, Major Sir Edward F. Lawson, John J. Sutherland, Sir William Colvin, Brig.-General Richard Beale Lewis, Rt. Hon. J. H. (Univ., Wales) Thomson, Sir W. Mitchell- (Maryhill) Conway, Sir W. Martin Locker-Lampson, Com. O. (H'tingd'n) Tryon, Major George Clement Coote, Colin Reith (Isle of Ely) Loseby, Captain C. E. Walsh, Stephen (Lancaster, Ince) Cope, Major Wm. Maclean, Neil (Glasgow, Govan) Walters, Rt. Hon. Sir John Tudor Cowan, D. M. (Scottish Universities) Mond, Rt. Hon. Sir Alfred M. Ward-Jackson, Major C. L. Craig, Colonel Sir J. (Down, Mid) Montagu, Rt. Hon. E. S. Watson, Captain John Bertrand Dawes, James Arthur Moore-Brabazon, Lieut. -Col. J. T. C. Williams, Lieut.-Com. C. (Tavistock) Edgar, Clifford B. Moreing, Captain Algernon H. Wilson, Colonel Leslie- O. (Reading) Edge, Captain William Morgan, Major D. Watts Winterton, Major Earl Edwards, C. (Monmouth, Bedwellty) Munro, Rt. Hon. Robert Young, Lieut.-Com. E. H. (Norwich) Edwards, Major J. (Aberavon) Neal, Arthur Young, Robert (Lancaster, Newton) Eyres-Monsell, Commander B. M. Newman, Sir R. H. S. D. L. (Exeter) Young, W. (Perth & Kinross, Perth) Falcon, Captain Michael Parry, Lieut.-Colonel Thomas Henry Farquharson, Major A. C. Peel, Col. Hn. S. (Uxbridge, Mddx.) Forestier-Walker, L. Pollock, Sir Ernest M. TELLERS FOR THE AYES. —— Forrest, Walter Pulley, Charles Thornton Colonel Sir Robert Sanders and Mr. Parker. Fremantle, Lieut.-Colonel Francis E. Purchase, H. G. Gibbs, Colonel George Abraham Rae, H. Norman
NOES. Atkey, A. R. Ford, Patrick Johnston Morden, Colonel H. Grant Balfour, George (Hampstead) Foxcroft, Captain Charles Talbot Murchison, C. K. Benn, Captain Wedgwood (Leith) Fraser, Major Sir Keith Pennefather, De Fonblanque Bigland, Alfred Gretton, Colonel John Raffan, Peter Wilson Berwick, Major G. O. Holmes, J. Stanley Richardson, Alexander (Gravesend) Briant, Frank Hood, Joseph Sprot, Colonel Sir Alexander Cayzer, Major Herbert Robin James, Lieut. -Colonel Hon. Cuthbert Steel, Major S. Strang Chadwick, Sir Robert Jones, Sir Edgar R. (Merthyr Tydvil) Talbot, G. A. (Hemel Hempstead) Clough, Robert Kelley, Major Fred (Rotherham) Terrell, George (Wilts, Chippenham) Coats, Sir Stuart Kiley, James D. Wallace, J. Davies, Alfred Thomas (Lincoln) Lister, Sir R. Ashton Entwistle, Major C. F. Lyle-Samuel, Alexander TELLERS FOR THE NOES. —— Fildes, Henry Moore, Major-General Sir Newton J. Mr. Dennis Herbert and Mr. Greenwood.
I beg to move, in Sub-section (3), after the word "of" ["In the case of any person"], to insert the words "a trade or business which is owned or carried on by."
The three Amendments which stand next in my name require to be read together. In the Committee stage of the Bill I accepted the principle of an Amendment moved by the hon. Member for East Islington. It is provided that the general allowance for Excess Profits Duty should be £200, and £500 in the case of new businesses started by demobilised soldiers or sailors. The Amendment excluded anybody who served in the Royal Air Force,
but obviously it should apply not only to a new business, but it should apply also to a business re-started by a man who had served on his discharge. I suggested, in accepting it, that I would bring up suitable words on the Report stage, and these are the words.
Amendment agreed to.
Further Amendment made: In Subsection (3), leave out the words "in the" ["or in the service of"], and insert instead thereof the words, "of the Air Force, or in."—[ Mr. Chamberlain. ]
I beg to move, in Sub-section (3), to leave out the words "St. John Ambulance Association," and to insert instead thereof the words, "Order of St. John of Jerusalem."
This is merely to correct a misdescription. I must ask my right hon. Friend to take my word for it, if he will, for I am Secretary-General of the Order of St. John of Jerusalem. I have moved the same Amendment on a previous occasion in this House, and a colleague of his on the Front Bench accepted it.
I accept the Amendment.
Amendment agreed to.
Further Amendment made: In Subsection (3) leave out the words "who has commenced business for the first time after demobilisation or discharge, line six of Section thirty-eight (1) of the principal Act shall read as if the word 'five' was substituted for the word 'two,'" and insert instead thereof the words
"which was commenced by that person for the first time, or having been wholly discontinued by him during the War or some part of the War, was recommenced by him after his demobilisation or discharge, Sub-section (1) of Section 38 of the principal Act shall have effect as though 'five hundred pounds' were substituted for' two hundred pounds.'"——[ Mr. Chamberlain. ]
CLAUSE 43.—(Amendments as Respects Pre-War Standard in Accounting Periods ending after 31st December, 1919.)
In the application of Part III. of the principal Act to Excess Profits Duty for any accounting period ending after the thirty-first day of December, nineteen hundred and nineteen, the following provisions shall have effect:—
(1)For the pre-War standard of profit there shall, on the application of the taxpayer, be substituted a standard (in this Section referred to as "the substituted standard") of an amount equal in the case of a trade or business which had no pre-War trade year to the statutory percentage on the capital employed in the accounting period, and in the case of any other trade or business to the percentage standard, with the addition in either case of a sum of five hundred pounds in respect of each working proprietor in the trade or business, or widow of such proprietor:
Provided that—
( a ) the amount of the substituted standard shall not as respects any trade or business exceed the sum of seven hundred and fifty pounds in respect of each working proprietor in the trade or
( b ) in computing the profits of a trade or business in any accounting period as respects which the substituted standard is in force, no deduction shall be allowed in respect of the remuneration of any working proprietor; and
( c ) where the accounting period is less than a year the substituted standard shall be proportionately reduced; and
( d ) where a substituted standard has been adopted in the case of any trade or business for any accounting period the provisions of paragraph (4) of Section 26 of the Finance Act, 1917, as amended by this Part of this Act, shall not have effect as regards that trade or business in respect of that accounting period.
In this paragraph—
The expression "trade or business" means any trade or business carried on either by an individual or by persons in partnership or by a private company within the meaning of the Companies (Consolidation) Act, 1908;
The expression "proprietor" means, as the case may be, the individual carrying on the business, any partner in the partnership, or any director of the company owning not less than 20 per cent. of the share capital or stock of the company;
The expression "working proprietor" means a proprietor who has, during not less than one-half the accounting period, worked full time in the actual management or conduct of the trade or business, but no person shall be deemed to be a working proprietor in the same accounting period in respect of more than one trade or business;
The expression "widow of such proprietor" means the widow of a working proprietor where the business is carried on for her benefit and the relief could have been claimed by her late husband had he lived and retained the position in the business which he held before joining the forces:
(2) Any trade or business carried on or owned by a company or other body corporate whose directors have a controlling interest shall, for the purpose of the provisions of the principal Act relating to the statutory percentage as amended by any other enactment, be treated as if it were a trade or business carried on or owned by a body other than a body corporate:
In this paragraph the expression "director" includes any person engaged in the management of the trade or business whose remuneration is provided out of the funds of the trade or business.
I beg to move, in Subsection (1), after the word "the" ["on the capital employed"], to insert the words "average amount of."
1.0 A.M.
The two Amendments in my name require to be read together. In what is known as the principal Act, the Act of 1915, there is a Clause in the Fourth Schedule which reads
Amendment agreed to.
Further Amendment made: In Subsection (1), after the word "the" ["in the accounting period"] insert the word "first."—[ Mr. Holmes. ]
I beg to move, in Sub-section (1), to leave out the words "or widow of such proprietor" ["or widow of such proprietor—Provided that"].
These two Amendments have to be read with the next one standing in my name. They merely put into proper and efficient phraseology a concession I made on the Committee stage.
Amendment, agreed to.
Further Amendment made: In Subsection (1, a) leave out the words "or widow of such proprietor."—[ Mr. Chamberlain. ]
I beg to move, at the end of Sub-section (1, d), to insert a new paragraph—
"( e ) Nothing in this paragraph shall affect the operation of any agreements made between the Food Controller and the owners of controlled flour mills which provide for determining the amount of any payment to be made or received under such agreements by reference to the pre-War standard of profits, and any such agreements shall have effect as if this Act had not passed."
At this stage of the evening I do not propose to explain at any great length this Amendment, but I think I ought to say a word or two about it to the House. This Amendment, which is a matter of comparatively small detail, is one which, in its form, is rather obscure. The machinery of flour mills is worked through a series of identical agreements with the various flour millers of the country, and for the information of hon. Members I have laid a copy of the present scheme on the table, and a copy is in the Library of the House. The material point is this. These agreements provide that the remuneration to the miller shall be based upon the pre-War standard of profit as defined by the Finance Act, with certain modifications. The agreements provided that, in any case where it is considered on the one hand that the remuneration is excessive, or on the other that it is less, a means for review, and, in point of fact, very shortly discussions as regards the review are going to take place. But the House will see by looking at Clause 43, and remember that, in Committee, my right hon. Friend the Chancellor of the Exchequer made a concession to the taxpayer as regards the standard for the assessment of the Excess Profits Duty. That concession was, in effect, that there should be substituted for the pre-War standard of Excess Profits Duty a new standard, called the "substituted standard." Under these circumstances, it is thought desirable, in order to avoid any possible ambiguity, to make clear that concession applies solely to taxation and is not intended to vary in any way existing contracts. In order to make that clear beyond any misunderstanding, I have ventured to move this Amendment.
Amendment agreed to.
I beg to move, in Sub-sectional), to leave out the words
"The expression 'widow of such proprietor' means the widow of a working proprietor where the business is carried on for her benefit and the relief could have been claimed by her late husband had he lived and retained the position in the business which he held before joining the forces,"
and to insert instead thereof the words
"Where any person who served during the War as a member of any of the naval or military forces of the Crown or of the Air Force or in service of a naval or military character in connection with the War, for which payment was made out of moneys provided by Parliament, or in any work abroad of the British Red Cross Society or the Order of St. John of Jerusalem or any other body with similar objects, and was before entering on such service working full time in the actual management or conduct of a trade or business, has died and the trade or business is being carried on for the benefit of his widow, the same standard shall be allowed for the trade or business as would have been allowed under the foregoing provisions of this Section if the deceased person had been a working proprietor during the accounting period."
These words carry out an undertaking given on the Committee stage of the Bill.
Amendment agreed to.
I beg to move, at the end of the Clause, to add a new Subsection—
"(3) In paragraph (4) of Part II. of the Fourth Schedule to the principal Act the words 'during the first accounting period' shall be substituted for the words ' during the accounting period.'"
I have already explained my other two Amendments, which were consequential upon this one.
Amendment agreed to.
CLAUSE 44.—(Amendments of s. 26 of 7 & 8 Geo. 5, c. 31 as respects Accounting Periods ending after 31st December, 1919.)
In the application of Part III. of the principal Act to Excess Profits Duty for any accounting period ending after the 31st day of December, 1919, Section 26 of the Finance Act, 1917, shall have effect as though in paragraph (1) "4 per cent." were substituted for "3 per cent." and as though in paragraph (4) for the words "five hundred pounds" and "two thousand pounds," respectively, wherever those words occur, there were substituted the words "two thousand pounds" and "four thousand pounds," respectively.
Amendment made: Leave out the word "four" ["four per cent."], and insert instead thereof the word "five."—[ Mr. Chamberlain. ]
CLAUSE 45.—(Allowance in respect of charitable contributions.)
Where, out of the profits of a trade or business, any contribution has been made after the sixteenth day of July, nineteen hundred and twenty, to any trust, society, or body of persons in the United Kingdom established solely for the purpose of the relief of the poor or the sick, or for the advancement of education, or for scientific research, there shall, for the purposes of Excess Profits Duty, be allowed, in the computation of the profits of the trade or business arising in the accounting period within which such contribution was made, a deduction in respect of such contribution of an amount not exceeding five per cent. of those profits as calculated for the purposes of Excess Profits Duty (before adjustment for increased or decreased capital and before making any deduction under this Section), and not exceeding twenty per cent. of the amount of such contribution. This Section shall not apply to any contribution which, apart from the provisions of this Section, would be admissible as a deduction from profits for the purposes of Excess Profits Duty.
I beg to move, after the word "of" ["for the advancement of education"], to insert the word "religion."
I will not detain the House more than two or three minutes in making this proposal, which I hope the Chancellor of the Exchequer will accept. I imagine the question is merely an oversight, and I would suggest the insertion of the word "religion" in this Clause by which certain allowances are made to charitable and other institutions. I can hardly imagine that the Chancellor of the Exchequer can have wished that £1,000 for the building of a school would receive some concession and that £1,000, say, for the purposes of a Wesleyan or other church should be excluded. I imagine that money left for science or some other educational object ought not to receive better treatment than that left to societies intended for the religious well-being of the people. I am sure that outside this House there would be strong opinion if this treatment were meted out to these religious societies, as against societies of a secular nature.
I beg to second the Amendment.
The Chancellor of the Exchequer has no objection to the insertion of this word, but there might, I think, be some difficulty in the interpretation.
Amendment agreed to.
I beg to move to leave out the word "five" ["five per cent."], and to insert instead thereof the word "ten."
The Universities for which I speak are grateful to the Chancellor of the Exchequer for the concession that he has already made by the insertion of this Clause, but I have been asked to represent that the concession he makes is probably not likely to produce as valuable an effect as perhaps he hopes it may. As I understand the Clause, supposing a man gives £100,000, which it is not very likely that many will do, out of the profits of his business, or a company gives that amount for any of the purposes defined in the Clause, they will have Excess Profits Duty remitted on £20,000, provided that £20,000 is not more than five per cent. of the total profits of the year. Supposing that the Chancellor of the Exchequer were willing to lose, say, £750,000 on receipts by this remission of taxation, that would mean that Excess Profits Duty would be remitted on £1,250,000. Supposing that £1,250,000 was contributed to these various charitable purposes, it would No Not be remitted unless five times that amount was contributed, that is £6,250,000; so that in order that the revenue should be penalised to the extent of £750,000 it would mean that £6,250,000 would have to be contributed to these charitable purposes. It is thought that any such contribution arising from this remission is exceedingly improbable, and that it is useless to hope for any such large contribution as that to come from the public in consequence of this remission of Excess Profits Duty. The outstanding estimate, as far as I am advised, of what is likely to be contributed to universities and charities in consequence of this remission of Excess Profits Duty is put at £2,500,000, and if the Chancellor of the Exchequer is willing to lose £750,000 in order that we may get £2,500,000, then the two Amend- ments down in my name would meet that situation. The position of the Universities in this: that they must have more money. If they do not get it from the public, they will have to get it from the Chancellor of the Exchequer in some shape or form. By the action of the ordinary economic forces and by the special action of His Majesty's Government in endowing a large number of men who were in the War with the means of receiving university education, universities have had thrown at them practically double the number of students that they have been equipped to educate. The situation is an impossible one. They must have more money. If they do not get it from the public, they will have to come down to the Chancellor of the Exchequer for it. It is impossible to throw students at the universities with whom the universities are unable to deal. When the Government directly subsidises an enormous number of additional students and calls upon the universities to take them in and the universities cannot do it with the funds at their disposal, the situation becomes an impossible one. In Liverpool, one of the universities I have the honour to represent, and in Manchester we were getting along pretty well with our collection of money to enable the universities to do their work until the Budget came on. Then there was a sudden drying up of contributions. We are very sensible of the concession which the Chancellor has made to us, but we do not think that that concession will produce the effect which he, I am sure, desires it to produce. We think that it will be nugatory unless he can see his way somewhat to enlarge it, and I hope it may be possible for him to meet us to some extent in the direction in which these Amendments of mine tend.
I beg to second the Amendment.
I shall speak rather more with regard to the hospitals. My hon. Friend has spoken with regard the the universities. On the Committee stage I put down an Amendment asking the Chancellor of the Exchequer to allow two per cent. of the Excess Profits Tax due to the Government to be paid, or to be allotted by the parties who had to pay the tax, to hospitals or universities or like institutions.
As far as I can gather the feeling of the authorities governing the hospitals, this proposal of the Chancellor of the Exchequer will not save them from destruction. Almost all the Members in this House know from their own experience that the hospitals in their constituencies are in dire stress. It is well known that during the last 50 or 100 years the noblest work in this country has been done by the members of the medical profession, who have given their best services to the hospitals without any remuneration whatever. Now it would be lamentable in my opinion, and in the opinion of all right-thinking people, that the hospitals should come down and either be chargeable to the rates or become a State institution. The feeling of the medical profession, as far as I can gather it, is that all the great feeling they have shown would be killed if the medical staffs in our hospitals became servants of the State, or were paid out of the rates. That would follow at once if hospitals were closed as far as voluntary treatment went. My hon. Friend who proposed this Amendment stated that the universities must have more money or come to an end. Their usefulness would to a large extent be destroyed. It is much more so in the case of the hospitals. Under the proposals that were made on the Committee stage, the Chancellor would be liable to lose £2,225,000 if every man or every firm which had to pay Excess Profits Duty allocated the 2 per cent. to a hospital or a university. This Amendment means that if a man is prepared to give £100 to a university or to a hospital he would be allowed to deduct from his Excess Profits Duty £50, and that would be some inducement to them to come forward with assistance; but I want to say to the Chancellor, who made his proposal with so much éclat, and told us that he was going to do something that no Chancellor had ever ventured to do before, that as far as I can gather the feeling outside the House, the offer will not bring in anything like sufficient money to the hospitals of the country. I trust he will let this proposal go through, because if he does he will not commit the Exchequer to the extent of more than £2,500,000.
I do not know what effect the speeches of my two hon. Friends have produced on the House, but they have convinced me that it is a mistake for the Chancellor to make a concession—[HON. MEMBERS: "No!"]
Other Members do not agree with their point of view at all.
I am glad to hear that. I take first the case of the universities. In anything I may say I do not want to under-rate the work of either the universities or the hospitals. I hope nobody will think that I am without sympathy for the great work they are doing. I have done more for the universities than any other Chancellor. I doubled their grants. I arranged a special sum to put them square after the War. My hon. Friend talks as if we had inflicted a great injustice on the universities by finding them students. He makes no allowance for the fact that we pay fees for all those students, or enable the students to pay, and the universities would not be better off if they were without the students.
Without those extra students, they would be better off.
I have, in fact, for both universities and for hospitals, done what all my predecessors have refused to do, I have allowed a man to make a subscription to them and to charge a part of it to the State—allowed him to take the credit and not to pay the whole of the cash. I said I would do that, under the special and abnormal circumstances both of the Excess Profits Duty, and of the condition of those institutions at the present time, on one condition—that what I proposed was accepted as a settlement. At once one of the representatives of the universities, and I am sorry to say of my University of Birmingham, and one of the representatives of the hospitals, come to make that concession a jumping-off ground. They tell me that it is worthless and ask me for more. I cannot give more, and if I thought, that they represented the views of the hospitals and the universities as a whole, I would ask the House to reverse the concession that I made in Committee.
I feel I must say a word in contravention of what has been said by the Mover and Seconder of this Amendment. I think they have done an ill service to the cause which they have at heart, and I speak as one who has been chairman of an important special hospital for 10 years, and also as a member of the Council of the British Hospitals Association. The Chancellor has every reason to complain of the attitude of hon. Gentlemen when he makes a concession. Immediately he accepts the proposal which has been put forward, those who made the proposal put down Amendments for a subsequent stage, in order to ask for a still bigger concession. Certainly, so far as the hospitals are concerned, and I should think some of the universities as well, the suggestion that their future depends on whether you have 10 or 15 per cent. on this Clause is really absurd. The financial future of the hospitals and, as I say, I believe of the universities too, is dependent on a great many other things—the management, the form of the appeal, and the services which these hospitals and universities give. Not all hospitals are closing. I know some hospitals which are in a good financial position; they took time by the forelock and made provision for the circumstances of the time in which we live. Their future does not depend on whether it is 15 or 10 per cent. on this Clause, and the effect of this demand is to give the impression that we who are responsible for the management of philanthropic institutions are always opening our mouths and asking for State assistance. This is, in fact, asking for State assistance. The Council of the British Hospitals Association and my friend Sir Arthur Stanley have never said that they were dissatisfied with the concession given by the Chancellor of the Exchequer, and I am very glad from the point of view of economy, and from the point of view of the hospitals too, that the Chancellor has not acceded to the request made by my two hon. Friends. Speaking as a hospital chairman of ten years' standing, I desire to say that I am deeply grateful to the Chancellor for the concession he has made, which is quite as much as we can expect.
Question, "That the word 'five' stand part of the Bill," put, and agreed to.
Ordered, "That further consideration of the Bill, as amended, be now adjourned."—[ Mr. Chamberlain. ]
Bill, as amended, to be further considered To-morrow.
The remaining Orders were read, and postponed.
It being after Half-past Eleven of the Clock upon Monday evening, Mr. SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.
Adjourned at Half after One o'clock.