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Commons Chamber

Volume 144: debated on Monday 18 July 1921

House of Commons

Monday, July 18, 1921

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

Private Business

East Surrey Water Bill,

Lochaber Water Power Bill,

Lords Amendments considered, and agreed to.

Lee Conservancy Bill,

As amended, considered; to be read the Third time.

Thames Conservancy Bill,

As amended, considered; Amendments made; Bill to be read the Third time.

West Ham Corporation Bill [ Lords ], Read a Second time, and committed.

Ministry of Health Provisional Order (Barnsley Extension) Bill,

Read the Third time, and passed.

Paisley Gas Provisional Order Bill,

Considered; to be read the Third time To-morrow.

Oral Answers to Questions

Questions

Motor Car Duties, France

asked the President of the Board of Trade what duties are payable by anyone desiring to take a motor vehicle to France for a limited period; and whether some arrangement can be come to with the French Government to obviate the necessity for large temporary payments in cases when the stay in France is only of a temporary nature and when there is no intention of disposing of the vehicle in France?

The duty payable on the importation into France of motor cars weighing not more than 2,500 kilograms is 45 per cent. ad valorem for Customs duty and 10 per cent. ad valorem, for turnover tax. When cars are taken to France for a limited period, the duty can be deposited and reclaimed when the owner re-ships his car. Alternatively, the French authorities are prepared to accept, instead of a deposit of duty, a guarantee given by one of the motor associations in this country, which are recognised for the purpose, that the car will be re-exported within a specified time. In the circumstances, I am not aware of any action which His Majesty's: Government could usefully take in the matter.

If it is a fact that when a motor vehicle is taken to France, 55 per cent. of the duty has to be deposited, is there any way of getting round that, and is the right hon. Gentleman aware that the motor associations have withdrawn their facilities recently, and this has given rise to a rather serious situation?

I rather gather that my hon. and gallant Friend's question had its origin in the fact that motor associations have made some change; there is no change, so far as we know, in the French law. In regard to the action of the motor associations, I do not know what I can do in the matter.

Would the French Government be prepared to consider the guarantee of a similar payment given by a private individual to that by an association?

Condensed Milk (Commission Payments)

asked the President of the Board of Trade whether 4s. and 5s. per case was allowed by the Food Ministry as commission to importers and wholesalers engaged in the distribution of supplies of condensed milk; whether this commission was paid on the ordinary case containing 48 tins of 1 lb. each or less; whether he is aware that the present rate charged to cash buyers of quantities as small as 20 or 30 cases is only 6d. a case; upon whose advice was this commission paid; what is the total amount of such commission from the inception of control until 31st March, 1921; and whether the whole of such charges have been added to the cost of the commodity to the poor who are the principal consumers of these goods?

The reply to the first and second parts of the question is in the affirmative. The 6d. a case referred to in the third part is not a commission, but would appear to be the present rate of discount for cash orders. The rates of commission were fixed after consultation with an advisory committee, on which the trade and the Ministry of Food were represented. The total amount of commission paid was approximately ÂŁ1,650,000. The maximum retail prices were fixed to cover all costs of distribution.

Commercial Motor Vehicles

asked the President of the Board of Trade if it is still necessary for tradesmen owning goods-carrying motor vehicles to get permits under the Road Transport Order, 1918, made under the Defence of the Realm Regulation, 2 J.J.J., before they are able to use such vehicles; and how soon the Order will be revoked and the whole staff dismissed?

The answer to the first part of the question is in the affirmative. As to the second, I would refer my hon. Friend to the reply which I gave on 20th June to the hon. Member for Great Yarmouth.

Did the right hon. Gentleman give us any indication in his answer in June that this War Order would be restricted? It is now three years since the War was over?

My hon. and gallant Friend is well aware that this scheme was for periods of emergency as well as war, and we have only just passed through such an emergency.

Anthrax-Infected Brushes

asked the President of the Board of Trade whether, in consultation with the Ministry of Health, he has safeguarded the country against the importation of anthrax-infected brushes?

I have been asked to reply to this question. Samples of imported brushes from various sources have been examined from time to time, but so far only shaving brushes of Japanese origin have been definitely found to be anthrax-infected, and capable of conveying infection to human beings. The further importation of Japanese shaving brushes into this country was prohibited in February, 1920, by an Order in Council, which is still in force.

Is the right hon. . Gentleman taking precautions to see that these brushes do not come through other countries?

Air Raids (Grants Commission)

asked the President of the Board of Trade whether the Grants Commission to examine the claims of sufferers from air raids, referred to by the Lord Privy Seal on 4th May, 1920, has been set up?

I would refer the hon. and gallant Member to the answer given to the hon. and gallant Member for Leith on the 20th ultimo.

Would not the payment of these claims, however good in themselves, increase pro tanto the national expenditure?

Mercantile Marine (Wireless Watchers)

asked the President of the Board of Trade why, in view of the adequate supply of skilled Marconi operators, they permit Class 2 vessels of the mercantile marine to employ wireless watchers who require no skill, and who may qualify in two days; and whether, since their employment is an additional risk to crew, ship, and underwriters, he will cease to permit the employment of wireless watchers for such ships?

The employment of wireless watchers, whose duty is to listen for the distress signal, was authorised by the International Convention on Safety of Life at Sea, and by the Rules under the Merchant Shipping (Wireless Telegraphy) Act, 1919, which were made after consultation with the Merchant Shipping Advisory Committee. Up to the present sufficient cause for altering the Rules has not, in my opinion, been shown, but if a reasoned proposal for their amendment is put forward it will be carefully considered on its merits.

Government Staffs and Offices

Board of Trade

asked the President of the Board of Trade when he will dispense with the services of the nine part-time officers taken over from the Food Controller?

I am unable at present to add to the reply given to the hon. Member on the 9th May last.

Ministry of Munitions

asked the Financial Secretary to the Treasury how many persons lately in the employ of the Ministry of Munitions have been dismissed from 1st April to 1st July; and how many still remain?

The headquarters staff of the Disposal and Liquidation Commission, which is engaged on winding-up the commitments of the late Ministry of Munitions, numbered 2,014 on 1st April, 1821, and 1,748 on 1st July, 1921, a reduction of 266 having been effected during the period between these dates.

Ex-Service Men (Initial Pay)

asked the Financial Secretary to the Treasury what is to be the basis of pay at entry for the successful ex-service candidates who have passed and qualified in the recent examinations for permanent posts in the Civil Service?

Ex-service men who enter the Clerical Class (London) as a result of the recent examinations will receive as initial salary, if previously employed as Grade III clerks, ÂŁ80 per annum, plus bonus, or ÂŁ212 per annum at the current rate of bonus; if previously employed as Grade II clerks, ÂŁ90 per annum, plus bonus, or ÂŁ238 10s. per annum; if previously employed as Grade I clerks, ÂŁ100 per annum, plus bonus, or ÂŁ257 4s. 6d. per annum. Those who were previously employed in a capacity superior to that of graded clerk will receive initial pay varying with the salary of their temporary grade up to a maximum of ÂŁ150 per annum plus bonus, equal to ÂŁ345 per annum in all at current rates of bonus, in cases where the annual inclusive salary in the temporary capacity amounted to ÂŁ400 per annum. The question of the initial salary of candidates entering classes paid upon scales other than the London scale of the Clerical Class is under consideration.

Can the hon. Gentleman say whether the bonus will be paid on the three classes, and what the bonus will be?

The bonus is the same up to 35s. a week, and after that it is the same up to ÂŁ200 a year.

Railway Fares

asked the Financial Secretary to the Treasury if any official in the Civil Service who receives a salary exceeding ÂŁ350 per annum is entitled to claim first-class railway fare when travelling on duty?

Yes, Sir. Many officials are so entitled. The whole question is now under review.

Milk

asked the President of the Board of Trade how much money was received by the Food Ministry as the result of the tax of 2d. per gallon on milk exported from the four south-western counties; how much expense has already been incurred in litigation respecting this tax; and when the matter will be finally closed, in view of the unanimous decision of the Court of Appeal?

I can add nothing to the reply given to my hon. Friend on Tuesday last.

Is the right hon. Gentleman aware that he has not given a reply to the question; it was not answered?

Peace Treaties

Austrian Debts

asked the President of the Board of Trade whether British nationals are being forced to pay moneys due to Austrian subjects, and are being threatened by the British administrator if they fail to do so, whilst Austrian nationals are failing to meet their debts to British creditors because of the plea that the Austrian Government is not in a position to fulfil its obligations in full; and, if these facts are correct, whether further collection of debts due by British nationals to Austrian nationals will cease pending the readiness of the Austrian Government to complete its share of the transaction?

I have nothing to add to the answer which I gave to the hon. and gallant Member on the 11th July.

Is it a fact that British nationals are being threatened because they are not promptly paying these sums?

It depends upon what meaning my hon. and gallant Friend gives to the word "threatened." Certainly we are trying to get the money from them. The amount received from the British debtors here will not be nearly sufficient to pay the sums due to British creditors. After all, the debtors have received value, and they ought to pay.

If the machinery of payment has broken down in Austria are British nationals still going to be pressed?

The Austrians are behind hand without a doubt, and they owe more money to us than we owe to them. There is no question that this money will be used for the payment of British creditors to whom the Austrians owe money; but there is no reason why this money should not be collected. The Austrian Government are trying to do something now, though they are behind hand.

Is it not a fact that the Austrian Government have seized property belonging to British subjects, invested the proceeds of same in Austrian War Loan, which to-day is worthless; what action does the President propose to take in the this matter?

Porto Eose Conference

asked the Prime Minister whether he is aware of the great urgency for holding the Porto Rose conference, for the purpose of abolishing existing restrictions over communications and settling questions with reference to rolling stock, exchange, foodstuffs, coal, post and telegraph between the states of Central and Eastern Europe; what is the reason for the delay and the postponement of the conference; and whether the British Government will make strong representations that it should be held immediately?

The meeting of the conference has now been fixed for September, to suit the convenience of all parties concerned. There is good reason to hope that the delay caused by its postponement till that date will not be prejudicial to the questions which it is hoped that the conference will settle.

German War Criminals (Trial)

asked the Prime Minister whether the Reports of the Leipzig trials have now been translated into English and are available for publication; and whether this House will be given an early opportunity, after such publication, of discussing the results of these trials?

I have been asked to answer this question. I must refer my hon. and learned Friend to the reply given to the hon. Member for South Hackney on the 11th July, and to the reply given to the same hon. Member on the 23rd June.

If a notice of Motion be tabled to-day, extensively signed by Members of all parties in the House, will the Leader of the House allow us to put a further question on Thursday and give us time to discuss it?

No, Sir. Anybody may put a question, but I cannot say that I should be able to give an answer in the affirmative.

Is the right hon. Gentleman aware that the Attorney-General himself said that after the trial of the French list had been disposed of, if there were a general desire in the House for discussion, an opportunity would be given?

There will be an opportunity for discussion. The Consolidated Fund Bill affords an opportunity, but I cannot promise a day.

Can the Attorney-General say when the papers relating to these trials will be available?

asked the Prime Minister whether the Government has now received a communication from the French Government respecting the Leipzig trials of the war criminals and, if so, whether he will communicate its terms to the House?

I have been asked to reply. The answer to the first part of the question is in the negative. The second part does not arise.

Is the Attorney General aware that three days ago in the French Senate M. Briand stated that very strong representations had been made by the French Government to His Majesty's Government?

asked the Attorney-General whether Lieutenant Patzig, the Commander of the German U-boat that sank the hospital ship "Llandovery Castle," is now living at Danzig, as stated in the Press; and, if so, why he has not been arrested and handed over to the German Government for trial?

I am informed that Lieutenant Patzig was until recently a resident of Danzig, which was made a free city, under the Treaty of Versailles, and is no longer a part of Germany. An order of arrest issued by the German Government is not effective in Danzig. I have been unable to ascertain whether Lieutenant Patzig is at present in Danzig or whether he has fled elsewhere.

Will the right hon. Gentleman make inquiries, and take steps to arrest this man?

Have we not the power to go to the city of Danzig and say, "Hand over this criminal for trial," as the Germans have?

I am not prepared to say offhand whether we have or not. The limits of extradition are very narrow. But my hon. and gallant Friend seems to be mixing up two things. What we did at Spa was to undertake, without any intervention on our part, to permit Germany to try certain persons. When that process has come to a conclusion, if we are not satisfied with it, we shall have to take other steps.

Is not Danzig at present under the administration of the Allies, and have not the Allies power to arrest this man and hand him over for trial?

Can any criminal live in Danzig, without anybody having anything to say about him?

Oil Boring (Staffordshire)

asked the President of the Board of Trade whether boring for oil is still being carried on at Chesterton, Apedale, and at Wellington, Staffordshire; whether these operations are being carried out at the Government's expense; and if any results have been obtained during the last four years that the efforts have been made?

It is presumed that the hon. Member refers to the borings at Hardstoft and other sites near Chesterfield and at Apedale and Werrington in Staffordshire which are being carried out at Government expense under the agreement with Messrs. Pearson which was laid on the Table of the House on 23rd October, 1918. The Hardstoft well has been carried to a depth of 3,133 feet and has produced to date 233,855 gallons of high grade crude oil. None of the remaining borings have struck oil in commercial quantities and several of them have been, or will shortly be, closed down. At the remaining points, including Apedale and Werrington, drilling is being continued until a decisive result is reached.

Has it been decided whose property the oil will be when it has been secured?

No.

QUANTITY and VALUE of Dyes, Dyestuffs, and Extracts for Dyeing imported into the United Kingdom, consigned from Germany, registered during the period 1st January to 30th June, 1921.

Import List Description.

Quantity.

Value.

Cwts.

ÂŁ

Intermediate Coal Tar Products used in the manufacture of Dyes (including Aniline Oil and Salt, and Phenyl-Glycine).

1,686

20,218

Finished Dyestuffs obtained from Coal Tar

33,562

694,200

Extracts for dyeing

189

2,576

Total

35,437

716,994

Transport

Motor Vehicles

asked the Minister of Transport if he can hold out any hope for the reduction in the price of petrol and the lessening of taxes and duties on motor vehicles used in the transit of material and goods, thereby stimulating the revival of trade and the lessening of the cost of living?

I regret that I am unable to offer any opinion upon the two matters mentioned by my hon. Friend. The price of petrol is not subject to Government control.

asked the Minister of Transport whether in any future legislation affecting the use of motor vehicles it is proposed to make the carrying of efficient mirrors to enable the driver to detect overtaking traffic compulsory?

I would refer my Noble Friend to the answer, given on 26th May to the hon. Member for Wimbledon, of which I am sending him a copy.

German Dyes (Imports)

asked the President of the Board of Trade the quantity of dyes imported from Germany to this country in the first six months of this year; and the approximate value of such imports?

The answer involves a tabular statement which, with the hon. Member's permission, I will have circulated in the OFFICIAL REPORT.

The following is the answer:

Gainsborough Bridge (Tolls)

asked the Minister of Transport whether he has received a communication from the Lindsey County Highways Committee recommending that the Gainsborough bridge be freed from toll; and whether, if he cannot make a grant out of the Development and Road Improvement Funds Act, as amended by the Roads Act, 1920, he could make a larger grant to the Lindsey County Highways Committee to aid the county council to free this bridge?

The answer to the first part of the question is in the affirmative. A reply was sent to the Lindsey County Council to the effect that the freeing of bridges from toll was not an object towards which the Minister of Transport was empowered to make an advance from the Development and Road Improvement Funds Act, as amended by the Roads Act, 1920. In these circumstances I am afraid that effect cannot be given to the suggestion contained in the last part of the question.

What means can the right hon. Gentleman suggest of freeing this main road of a toll of 1s. 8d. on every vehicle that passes over this bridge, and does he think it is fair to put the whole cost of this road on one town?

I am afraid I cannot suggest a solution of the problem, and I have no money to devote to this purpose.

Commercial Travellers (Week-End Tickets)

asked the Minister of Transport if the commercial travellers' week-end tickets which they enjoyed before the War can be re-issued to enable these persons to get home and spend the Sundays with their wives and families, and increase the traffic and profits of the railway companies?

asked the Minister of Transport whether he will arrange with the railway companies to restore to commercial travellers the same privileges as they enjoyed before the War?

I would refer the hon. Members to the reply given to the hon. Members for Pontypool and Kirkcaldy on the 8th ultimo, copy of which I am sending them. I have asked the railway companies to inform me when they will be prepared to re-introduce this concession.

Will the right hon. Gentleman give friendly advice to the railway companies and use what pressure he can to secure the re-introduction of this concession?

If excursion tickets can now be granted, why cannot this concession be also made?

I prefer to leave this matter to the commercial discretion of the railway companies. I shall not be responsible after the 15th August.

Railways, Capital Improvements

asked the Minister of Transport if he can give an approximate idea of the amount spent on improvements of the embankments and permanent way, on new and repainted rolling stock, on the improvement of stations, etc., while such railway systems were under the control of the Government; and if he can say to what extent the public will be reimbursed for such enhancement of the capital of the companies?

In certain cases sums representing improvements have been included amongst working expenses and charged against the Government. Such items pass under review in my Department, and are challenged when it is thought necessary so to do. I am unable to give details as to amounts spent on capital improvements, as asked for by my hon. Friend.

Solway Viaduct (Closing)

asked the Minister of Transport whether he is aware that the Caledonian Railway Company have closed Solway Viaduct on the ground that the bridge is not safe for heavy traffic; whether abnormal traffic of ore and steel was carried by this bridge for the Government during the War; and whether, in view of the stoppage of a growing trade between England and Scotland by this route, he will take steps to have the viaduct reopened, and, if necessary, repaired?

The answer to the first part of the question is in the affirmative. With regard to the second and third parts, at one time there was considerable pig iron traffic by way of the Solway Junction Railway from the West Cumberland district to places in Lanarkshire, and this traffic, along with iron ore traffic, increased during the War, but it has now fallen off entirely. Should such traffic revive, it could be worked by way of Carlisle and the main line, as could livestock traffic. The renewal of the superstructure of the bridge was under consideration before the War, but it was delayed by the outbreak of War, and the Caledonian Company say that since the Armistice the high prices have been a, deterrent. The railway company add that they will consider the question of repairing the superstructure and reopening the viaduct when the present high cost becomes more moderate.

Train Speeds

asked the Minister of Transport whether the railway companies intend to increase the speed of long-distance journeys to the pre-War standard; or whether the general retarding of railway traffic is to be maintained?

The speed and timing of trains, both on long and short journeys, is a matter which I desire to leave to the commercial discretion of individual railway companies, so far as safety permits.

Season Ticket Holders

asked the Minister of Transport whether, in view of the probable reductions of railway fares next month, he will specially call the attention of the railway companies to the position of season ticket-holders in the London suburban area, and ask that holders of such tickets shall have immediate consideration in any proposed reductions on railway fares?

While I am unable to indicate any date at which general reductions of fares may prove possible, I have no reason to suppose that in any revision the interests of the large body of season ticket holders would not receive careful consideration.

London Street Traffic

asked the Minister of Transport whether his attention has been called to the fact that Leadenhall Street, Princes Street, and Eastcheap, important traffic streets in the centre of the City of London, are now under repairs and are closed to traffic; whether two of these streets are on the direct east to west routes in London; and whether he has any power to control the repairs of such important traffic streets, and to prevent the delays and blockage of road traffic which is now occurring in main London thoroughfares?

I am informed that Leadenhall Street and Princes Street are now under repair and closed to traffic, but that Eastcheap is not. Leadenhall Street does, in fact, form part of an important east to west route through London. The answer to the last part of the question is in the negative.

London, Brighton and South Coast Railway

asked the Minister of Transport whether, in view of the length of time which must necessarily elapse before the arrangements for completing the southern group of railways can take effect, permission could be accorded forthwith to the London, Brighton and South Coast Railway Company to raise the necessary capital and proceed with the scheme for the electrification of their suburban system and their main line to Brighton, Worthing, and Eastbourne?

I beg to refer the hon. and gallant Member to the reply which I gave to a question on this subject asked by the hon. Member for Hanley on the 11th July. The London, Brighton and South Coast Railway have not sought and are not waiting for my permission to raise the capital for and proceed with electrification of additional portions of their line. The London, Brighton and South Coast Railway Act, 1903, gives them power to electrify their line.

Rates, Ireland

asked the Prime Minister whether he is aware that, owing to the quadrupling of local rates in certain parts of Ireland since 1914, the net receipts from property, after payment of Income Tax, is often a minus quantity; and whether the Government propose to take any steps in the matter?

I was not aware of the facts stated in the question. Perhaps the hon. and gallant Gentleman will supply me with any specific information in his possession.

Is it not notorious in this country that people are being taxed on money which never reaches them; and that in the case of tithe-payers the amount may be deducted from the gross income before arriving at the net income? Could not the same principle be applied in the case of rates, so as to exempt money paid away in rates before assessment to Income Tax on the same property?

Licensing Legislation Conference

asked the Prime Minister whether the Government has now received the Report of the Conference on Licensing Legislation presided over by the Attorney-General; and, if so, whether it is intended to introduce a Bill during the present Session of Parliament for the purpose of carrying out the recommendations of the Conference?

I am sorry to say that it has not yet been possible for the Cabinet to consider this question, but I hope to be in a position to make a statement to-morrow or Wednesday.

Far East and Pacific Conference

asked the Prime Minister whether, pending the meeting of the Washington Conference, the Government will make a representation to the League of Nations to the effect that it should suspend its activities in regard to the question of disarmament and the Pacific, with a view to avoiding the possibility of a conflict of views?

I do not think it necessary to make representations to the League of Nations in the sense suggested by the hon. Member. Without doubt the League, in dealing with the question of disarmament, will have regard to the importance of the forthcoming discussions at Washington.

asked the, Prime Minister what reply has been received from the Chinese Government regarding the invitation to attend the coming Washington Conference; and whether China will be represented at all future conferences?

The Chinese Government are understood to have accepted the invitation.

asked the Prime Minister whether India will be represented at the forthcoming Pacific Conference?

The arrangements for the proposed conference have not yet been made.

( by Private Notice )asked the Prime Minister whether there is any foundation for the statement made in the newspaper Press to the effect that the King has intervened directly to "straighten out an entanglement" which had occurred in the negotiations with the Government of the United States regarding the Pacific Conference?

No, Sir. There is no foundation whatever for the statement. It is a pure invention.

Can the right hon. Gentleman say where this report appears, and whether, in view of its being a pure invention involving His Majesty, he proposes to take any action against this newspaper?

Public Expenditure

asked the Prime Minister whether he has received a letter from the Independent Parliamentary Group on the subject of public expenditure; and whether he has considered any of the recommendations contained therein?

The answer to the first part of the question is in the affirmative. The question of public expenditure is constantly engaging the attention of His Majesty's Government, and the particular recommendations in the letter referred to will be considered.

Trade Disputes (Compulsory Arbitration)

asked the Prime Minister whether he has consulted the Dominion Premiers as to the value of compulsory arbitration in industrial disputes; and whether he will set up a voluntary expert committee to report upon the results obtained in the Dominions and to advise how far such arbitration might be practicable in this country?

The answer to the first part of the question is in the negative. I would refer the hon. and gallant Member to the answers given on this subject to my hon. Friend the Member for the West Division of Waltham-stow on the 26th April and 12th May last.

House of Lords (Refoem)

asked the Prime Minister whether any Measure under consideration by the Government for the reform of the House of Lords will include an arrangement for the First Lord of the Admiralty to attend in this House to answer questions of Naval Members and others interested in Admiralty policy?

I would refer the hon. and gallant Member to the reply which I gave on the 7th instant to my hon. and gallant Friend the Member for Finchley.

Government and Press Criticism

Prime Minister's Statement

asked the Prime Minister whether an Order has been issued to refuse official news to certain daily and weekly newspapers in this country; and what is the reason for this discrimination, seeing that official and semi-official information is issued for the benefit of the public and not for the benefit of certain selected newspapers?

asked the Prime Minister whether the Foreign Office has intimated that it will in future give no information to and hold no communication with the "Times" newspaper or its representatives; if so, on what grounds this action has been taken; and whether this ban extends to any other newspaper?

asked the Lord Privy Seal what is the practice concerning information given to the Press by public Departments; and whether any newspapers have recently been struck off the list of those whose representatives are supplied with information?

Official information is rendered available to the Press in two ways. The greater part of it, such as the announcements of Government Departments and communiqué's regarding policy, whether in an official or a semi-official form, is issued to the newspapers through the news agencies as a matter of routine. For some years past, it has also been customary for facilities to be given to representatives of newspapers to visit Government offices, to make inquiries on their own behalf regarding the events of the day. These courtesies are normally extended to all newspapers, without regard to their attitude towards the Government of the day, and the "Times" took full advantage of these privileges. But courtesy should beget courtesy.

I need hardly explain that official information is available to the "Times" through the ordinary agencies. The fullest courtesy has at all times been extended to its representatives. The fact that it has pursued a course of virulent opposition to the Government, and notably to the head of the Government, has not in the least influenced the Government Departments in the civilities extended to its representatives; and personally I have made no effort to induce the withdrawal of a single civility from the "Times," or its associated papers—the "Daily Mail," the "Evening News," and the "Weekly Dispatch."

On Wednesday, the 13th instant, however, the "Times" published a personal attack of a peculiarly offensive and mischievous character upon the Secretary of State for Foreign Affairs, with special reference to some momentous and delicate negotiations on which he was engaged, in pursuance of a policy representing not only the Government of the United Kingdom, but the Prime Ministers of the Dominions and the representatives of India. Such an attack at such a moment seemed to us to fall below all the normal standards of English journalism.

I pass over the question of taste, but it was difficult to pass over an attempt to create a personal prejudice in foreign countries against a British public servant of high repute, at a time when he was charged with most responsible and anxious negotiations on behalf of the whole Empire. It is not too much to say that no reputable British journal of any party would have published such an attack. Fortunately, it is entirely without precedent.

In spite of its record in recent years, the "Times" is still supposed in many circles abroad to represent both educated and official opinion in this country. Here we know it has long ceased to hold that position, but that fact is only gradually becoming known abroad. It is, there- fore, essential that the British Government as a whole should mark strongly its disapproval of such an attack upon the Secretary of State for Foreign Affairs at a critical moment. Official information is, of course, available, as before, to the "Times" but the special favour accorded it by tradition in the past is entirely withdrawn.

Does not the right hon. Gentleman think that the Government took the worst possible way of showing its disapproval, and conveyed the impression that it will only give official news to papers in return for their support? We know it is not so, but is not that the only inference that can be drawn from the action of the Government?

I made it quite clear in my answer that there is no distinction drawn between journals that support the Government and those that do not support it in the facilities afforded to them for information in Government Departments. I do not use the word "challenge," but I invite any journal that regularly opposes the Government to contradict that statement. They are received always with the greatest civility, every information available for publication is always given to them, and their representatives are treated with great courtesy. But this was so great an attack, so far beyond the limits of ordinary fair criticism, made against the Secretary of State for Foreign Affairs when he was conducting most delicate negotiations; it was of a kind that might really imperil the negotiations.

Will the right hon. Gentleman endeavour to defend the right hon. Member for Paisley (Mr. Asquith) and Viscount Grey from attacks in his own newspapers? And when was the head of the Government—the Prime Minister—supposed to be immune from attacks in the Press?

I said specifically that although I had been attacked in the "Times"—as is thoroughly well known—I have never interfered in the slightest degree with any facilities extended to them. I think my hon. Friend might have acknowledged that. I do regard the attacks' on the Foreign Secretary at a juncture of this kind and attacks of this character as being in a totally different category.

Is it not the fact that these facilities are given by public servants at the public expense? Why, therefore, should the right hon. Gentleman differentiate between papers he likes and those he does not like?

That is a very unfair and very improper suggestion. Journals constantly attack the Government, and I am not supposed to like them; but I invite the hon. and gallant Gentleman to point out any single journal attacking the Government from which we have withdrawn any facilities, although their attacks have been constant and insistent. They are attacks upon policy, and are occasionally on the Prime Minister, but then the Prime Minister is here to be attacked.

Peru (Emigeation)

asked the Prime Minister if his attention has been drawn to a propaganda being carried on in the press by Mr. Salomon, the consul-general for Peru, with a view to inducing British workers to emigrate to Peru; and whether, in view of the fact that hundreds of workers and their families have recently returned or are returning from Peru to this country, many of them in a state of destitution through failure to find work, any steps can be taken to warn intending emigrants of the misrepresentations in the propaganda referred to 1

I have been asked to answer this question. My attention has been called to the correspondence in the Press to which the hon. Member refers. I think I can best answer his question by re-stating the facts. Last autumn about 300 British emigrants were induced to proceed to Peru by official promises of free passages and work. Insufficient care was taken in the selection of the emigrants, and a number of unsuitable emigrants were sent out. About 200 appear to have found suitable employment in Peru. About 70 have returned and a further party of about 30 are now on the way back. His Majesty's Government feel that the President and Government of Peru have taken a friendly and right course in admitting the error of judgment made by the late Peruvian Consul-General and in offering ÂŁ2,000 in compensation, but they deprecate Press propaganda of the kind to which the hon. Member refers and trust it will be discontinued. With reference to the last part of the question, I might add that some 500 would be emigrants to Peru were dissuaded from availing themselves of the offer of free passages by the warnings given by His Majesty's Government.

asked the Parliamentary Secretary to the Admiralty whether the claims of British emigrants from this country against the Government of Peru have yet been settled?

I would refer the hon. Member to the answer which I gave to the hon. Member for Kirkcaldy on 14th July last.

Minister Without Portfolio

asked the Prime Minister whether it is intended to appoint another Minister without Portfolio during the present Session of Parliament?

asked the Prime Minister whether he proposes to fill the vacancy in the Government caused by the resignation of the Minister without Portfolio?

How do the Cabinet propose to get on with their work in the absence of the Minister without Portfolio?

Did not the Prime Minister, when dealing with this question, announce that the Government could not do without the Minister without Portfolio till the end of the Session? Seeing that no one is to be appointed to succeed him, what do the Government propose to do?

On a point of Order. This is a very important public question. May I ask—

The supplementary question raises a different point to the answer to the question on the Paper. We are told that no one is to be appointed, although previously we had been informed by the Prime Minister that he could not do without the Minister without Portfolio till the end of the Session. I submit that the House is entitled to know why no one is to be appointed.

Housing

Existing Situation (Inquiry)

asked the Prime Minister whether he proposes to set up any Committee to investigate the existing sitation with regard to house building with a view to preventing a repetition of costly mistakes in future housing undertakings?

I am giving very careful consideration to the whole housing question, and I will certainly bear the hon. Member's valuable suggestion in mind.

Municipal Engineers and Architects

asked the Minister of Health the relative merits or demerits in cost and rapidity of execution in the employment of municipal engineers and architects in the various housing schemes throughout the country; whether sufficient information is available to indicate what percentage professional charges represent in both methods; and if the cost is less where the work has been done by the local surveyor?

As regards rapidity of execution under the two methods, I cannot give any general answer which would be fair to both. As regards relative cost, such figures as I have at my disposal indicate that the percentage cost for professional charges where the local official is employed would be about 1 per cent. on a scheme of, say, 250 houses as compared with something over 2 per cent. where outside professional men are employed.

Government Grant

asked the Minister of. Health whether local authorities who have purchased sites for houses and submitted plans for their construction, but have not yet taken tenders and cannot possibly commence building within six weeks, will have to bear the whole burden of the expense already incurred?

The hon. and gallant Member is under a misapprehension. The statement which I made on Thursday last, that in certain cases where commitments had been entered into I would pay subsidy provided the work of construction is begun within six weeks, referred only to the subsidy to private builders. With regard to the housing schemes of local authorities, expenditure already incurred with the approval of the Ministry, whether in respect of the purchase of sites or otherwise, will rank for Exchequer assistance under the present scheme, which limits the liability of local authorities to the produce of 1d. rate.

Where sites have been purchased with a view to going on, will the local authorities not be allowed to continue?

No, they will not be allowed to continue beyond the limit of 176,000 houses, but any loss by local authorities, either by the rate of interest on loans being raised or by a sale of the site, will fall on the Exchequer and not on the local rates.

Greece and Turkey

asked the Prime Minister whether any fresh developments have occurred in the hostilities between the Greeks and the Turks; and whether His Majesty's Government are affording any assistance either directly or indirectly, to the Greek forces?

The information of His Majesty's Government is identical with that recorded in the Press, namely, that the Greek Army has attacked and has reached Afium-Karahissar. I have stated repeatedly that His Majesty's Government are affording no direct or indirect assistance to the Greek forces.

As I came into the House, this message was given to me as to the progress of the events in Asia Minor. It is from a Greek source:

League of Nations

Functions

asked the Prime Minister whether, in view of the fact that the promotion of peace is, or should be, the chief aim of the League of Nations, the existing League will continue to perform various other functions or whether, in view of the approaching Pacific and Washington conferences, operations will be suspended until the construction or action of the League can be brought into conformity with the results of the conference?

It would be neither desirable nor possible to suspend the general work of the League because questions in which it is interested are being discussed at Washington.

Will the League continue to negotiate the reduction of non- existent armaments in negligible States pending the settlement of this great issue with the great Powers?

As I indicated to the House in the answer which I gave to a question just now, of course the League will take into account any transactions or discussions that take place in the important conference to be opened at Washington.

International Labour Organisation

asked the Undersecretary of State for Foreign Affairs to what extent, if any, has the labour agreement come to by the nations belonging to the League of Nations been carried out; if any action has been taken to secure an international reduction of the hours of labour and the improvement of industrial conditions; and also to what extent, if any, has the United States of America agreed to conform to any arrangements made by other nations?

The agreement establishing the international labour organisation is embodied in Part XIII. of the Treaty of Versailles and has been accepted by members of the League of 'Nations and certain other Governments. Two general Conferences of the organisation have already been held and conventions or recommendations regulating the hours, or otherwise intended to improve the industrial conditions of certain classes of workers, have been adopted and have, in some instances, been accepted and in other cases rejected, or are still being considered by members of the organisation. The United States of America are not under any obligation with respect to the conventions and recommendations adopted.

Mining Eoyalties (Purchase)

asked the Prime Minister whether any, and, if so, what action has been taken, or is contemplated, in respect of the purchase of mining royalties?

I have been asked to reply. No action has been taken, and I am unable to make any statement on the subject at the present moment.

Federal Devolution

asked the Prime Minister whether he will consider the desirability of introducing a scheme of federal devolution for Great Britain during next Session, in order that more time may be available for discussion in this House of matters of Imperial interest?

I do not think that it will be. possible to deal with this subject next year.

May I ask the right hon. Gentleman whether it is not the case that he attended a meeting in Wales not long ago, at which a resolution in favour of devolution was passed, and whether, if he were invited formally to do so, he would attend a meeting in some important centre in England, after he has been to Washington, in order to gauge public opinion in England on this subject?

Lottery Acts (Prosecutions)

asked the Prime Minister whether it is with the authority of the Government that the Attorney-General has, notwithstanding the present state of national finance, entered notice of appeal in connection with certain cases under the Lottery Acts in which he was recently unsuccessful against the Member for South Hackney, although assisted by eminent counsel?

The answer to this question is in the affirmative; and, if the appeals referred to are successful, as they are thought likely to be, it may be reasonably anticipated that both penalties and costs will be recovered. The hon. Member would not, of course, suggest that a case in which he himself is being sued for penalties should be treated in any exceptional way. But it would be an impossible doctrine that counsel for the Crown should in no case advise an appeal, though they perceived good grounds for it and expected it to succeed.

Industrial Assurance

asked the Lord Privy Seal when the Bill dealing with industrial assurance will be introduced?

My right hon. Friend has asked me to reply. As stated in reply to a similar question last Wednesday, I hope to make a statement on this subject shortly.

Imperial Conference

asked the Lord Privy Seal whether, in view of the possibility of a discussion on the League of Nations in this House, he will have circulated as a White Paper the speech of the Lord President of the Council on the League delivered to the Imperial Conference?

If my Noble Friend will move for a copy of the statement he shall have it as an unopposed return.

Ramsgate Harbour

asked the Minister of Transport what is the reason for the charge of ÂŁ1,000 upon the Exchequer this year in respect of Rams-gate harbour; and if steps can be taken to make this harbour self-supporting, as hitherto?

Ramsgate harbour, which belongs to the State, has suffered severely through loss of revenue due to the War. Revenue has not balanced expenditure since 1914, and the reserve fund has now been exhausted. The recent coal stoppage added to the financial difficulties of the harbour, but it is hoped that, by means of the recently increased rates, tolls and charges, falling prices and reductions in staff, revenue will balance expenditure in future years, and be sufficient to repay the temporary advances from the Exchequer.

British Vice-Consul, Reykjavik

asked the Under-Secretary of State for Foreign Affairs why the British consular representative at Reykjavik, in Iceland, is not a British subject; and if he is aware of the importance of the British fishing interests in neighbouring waters to Iceland, and the use made of Icelandic ports by British fishing vessels?

The British Vice-Consulate at Reykjavik is an unsalaried post and, in the absence of any British subject suitable for the appointment, is held by a native of Iceland. The answer to the latter part of the question is in the affirmative.

Do I understand that there is no suitable British subject available for this post, and would it not be worth while to make it a salaried post, with a view to attracting a suitable British subject?

As I have said in my answer, a suitable British subject is not available for the post on the spot. I do not think, in the present state of public finance, that it is either necessary or desirable to convert into a salaried post one which is at present satisfactorily filled by an unsalaried official.

Are there not many ex-officers who would be very suitable for this post, and who could be employed?

Prince Aziz Hassan

asked the Under-Secretary of State for Foreign Affairs what were the reasons for the exile of Prince Aziz Hassan?

The Egyptian Government considered the expulsion of Prince Aziz Hassan necessary in the interests of public security, in view of the leading part which he was taking in mischievous political agitation.

Could the hon. Gentleman give us the modern version of this political agitation?

Russia (Mrs. S. Harding)

36.

asked the Undersecretary of State for Foreign Affairs whether, in view of the fact that Mrs. Stan Harding was encouraged to enter Russia by the Soviet Government, he will state what are the grounds which have made the Government decide that she has no right to the assistance of the British Government in obtaining redress for the injuries which she has admittedly suffered at the hands of the Soviet Government?

The grounds were explained in my reply to the fourth part of the Noble Lord's question of 14th July. I would, however, point out that His Majesty's Government have not decided that Mrs. Harding has forfeited the rights of protection which His Majesty's Government exercise on behalf of all British subjects. It seems clear that Mrs. Harding has no special claim upon the good offices of His Majesty's Government, as she went to Russia on her own responsibility at a time when it was well known that no passport facilities were being given to British subjects for the purpose; she acted on the assumption that the safe conduct of the Soviet Government would be sufficient, and His Majesty's Government cannot be blamed if her assumption proved ill-founded. The question of redress for injuries done to British subjects is no doubt one which will be discussed before completely normal relations are resumed with Russia, pending which it is open to Mrs. Harding and others who have suffered imprisonment and injury, to lodge claims against Russia at the Russian Claims Office, Board of Trade.

Does that mean that Mrs. Harding should lodge her claim and it will be considered by the British Government?

Rabies

asked the Minister of Agriculture whether, in view of the exceptionally hot summer, the public has any reason to apprehend a spread of rabies in dogs?

I am advised that, inasmuch as rabies is a contagious disease which is only transmitted by means of the bite of an infected dog, there is no reason to apprehend an increase in the number of cases of rabies on account of the hot weather.

Corn Production Act

asked the Minister for Agriculture whether, seeing that, in the forms sent to farmers to make claims in respect of wheat and oats under the Corn Production Act, an occupier is required to state the number of the field on which the wheat or oats was grown as shown on the 25-inch scale Ordnance Survey map, and that the small framers in Wales have no knowledge of such maps, and have no facilities for consulting them, he will accept a statutory declaration of the occupier with respect to such matters?

No claims which are otherwise in order will be rejected merely on the ground that the Ordnance Survey numbers of fields are not given.

Houses of Parliament and Cockpit Steps

68 and 69.

asked the hon. Member for the Pollock Division of Glasgow, as representing the First Commissioner of Works, (1) what is the cost of the special measures taken to secure the safety of the House of Commons; whether it is now possible to open both gates of Palace Yard;

(2) if the passage known as Cockpit Steps will now be opened to the public?

The cost of the special measure, as far as my Department is concerned, is ÂŁ268. The First Commissioner will be happy to have the gates and the passage opened as soon as he is advised by the Home Secretary that such a course is considered advisable.

Is the hon. Baronet aware that there is dangerous unrest in St. George's, Hanover Square and other such regions, and that he had better keep the gates shut a bit longer?

Royal Navy

Rosyth Dockyard (Canteen)

asked the Parliamentary Secretary to the Admiralty if he has received any complaint from the Rosyth Workmen's Restaurant Association regarding the closing of the licensed canteen at Rosyth at 1.30 p.m. daily; if he is aware that many workmen at Rosyth live at a considerable distance from the dockyard and would appreciate an opportunity of enjoying the same facilities for refreshments as exist in the vicinity of other dockyards; and whether, seeing that a considerable loss of revenue has resulted from the closing of the canteen, the profits from which are largely devoted to charitable objects, authority can be given for its being open in future from 4.30 p.m. to 5 p.m. daily for the sale of refreshments?

The complaint referred to by the hon. Member relates to the order recently made by the Admiral Superintendent that after the end of the present month the canteen, which is run in connection with the Dockyard dining hall, shall be open only during the dinner time, namely, from noon to 1.30 p.m. The local hours for the sale of liquor are noon to 2.30 p.m., and 6 p.m. to 9 p.m. Under present conditions, it is not considered either necessary or desirable that facilities should be provided to enable employés to obtain liquor after the time for ceasing work in the Dockyard. The fact that the profits are devoted to charitable objects does not out-weigh other considerations. Permission has been given for the continuance of the former practice of opening the canteen in the evening up to the end of the present month, in order to avoid loss on the present stocks.

Royal Fleet Reserve (Gratuity)

asked the Parliamentary Secretary to the Admiralty what are the reasons that have caused the prolonged delay in the decision as to whether a grant of a portion of the Reserve gratuity in cases of death may be made to meet the cases of those Royal Fleet Reservists who received no gratuity for their 20 years' service on account of their not having reached the age of 40 at time of death; and whether he is aware that the delay at arriving at a decision is very prejudicial to the interests of the relatives of the men concerned who have made application to the local war pensions committees?

The question of what concessions could be made to Royal Fleet Reserve men who could not, owing to causes not under their own control, obtain the gratuity, has involved consideration of a number of intricate and detailed financial points both by the Admiralty and by the Treasury and other Departments. As regards this particular aspect of the case, Treasury sanction has been obtained for the award of proportionate gratuities in future in cases where death is not due to causes within the man's own control. The further concession of extending this to men who died before the introduction of these arrangements has not yet been secured, but is still under discussion. As regards the last part of the question, I may say that the majority of the persons concerned are in receipt of dependants' pensions.

Why has a decision in this comparatively simple matter been deferred ever since the Armistice? Has the hon. and gallant Gentleman looked into the causes of the delay, which has really done great hardship?

Chief Education Inspector, Wales

asked the President of the Board of Education whether he intends appointing a chief inspector for Wales; and, if so, whether he will appoint to this important post someone having a thorough knowledge of the Welsh language?

I would refer the hon. and gallant Member to the answer which I gave on Thursday, 7th July, to the hon. Member for Carmarthen, of which I am sending him a copy, and also to my replies to his previous inquiries on this subject, to which I have nothing to add at present. It is, and has been for many years past, the practice of the Board of Education to look for a knowledge of Welsh when making appointments to the Welsh Inspectorate.

Is the right hon. Gentleman aware that the post of Chief Inspector in Wales has now been vacant for some nine months?

What does the right hon. Gentleman intend doing in this matter? The answer I received was that nothing was being done. Does he intend filling this post?

In the absence of my right hon. Friend I will ask the hon. Member to postpone his question.

As Wales has got on so happily for nine months without this extra expense, will the President of the Board of Education consider dispensing with this officer permanently?

Does the right hon. Gentleman realise that Wales is never happy?

STATEMENT of payments into Local Taxation (Scotland) Account for year ended 31st March, 1921.

Source.

Amount.

ÂŁ

s.

d.

(I) Customs and Excise Duties

152,248

5

4

(II) Local Taxation Licences and Estate Duty (Finance Acts, 1894 and 1907)—H.M. Exchequer (Licences)

âś¶ 374,538374,538

0

11

(II) Local Taxation Licences and Estate Duty (Finance Acts, 1894 and 1907)—H.M. Exchequer (Licences) (Estate Duty)

âś¶ 377,300377,300

0

0

(III) Estate Duty (Agricultural Rates, &c. (Scotland) Act, 1896)

181,947

3

2

(IV) Local Taxation Account (Scotland) Act, 1898—H.M. Exchequer

98,466

2

1

ÂŁ1,184,499

11

6

Balances transferred from Grants for preceding year:—

ÂŁ

s.

d.

(II) Local Taxation (Licence and Estate Duty)

1,396

17

0

(III) Estate Duty (Agricultural Rates, etc.)

91,595

18

5

(IV) Local Taxation Account (Scotland) Act, 1898

48,595

9

7

141,588

5

0

ÂŁ1,326,087

16

6

âś¶ Further sums amounting probably to not less than ÂŁ26,000 fall to be paid into the Local Taxation (Scotland) Account for 1920-21 under these subheads, but definite particulars of these amounts are not yet available. Further sums amounting probably to not less than ÂŁ26,000 fall to be paid into the Local Taxation (Scotland) Account for 1920-21 under these subheads, but definite particulars of these amounts are not yet available.

Education Fund

asked the Secretary for Scotland whether the Education (Scotland) Fund is to be reduced by 20 per cent. in the present financial year; and if so, having in view the fact that 10 per cent. of the total expenditure by education authorities is on account of interest and repayment of loans, and 66 per cent. on account of salaries and pensions to teachers, will he state whether the salaries of teachers are to be reduced, or the education rate raised throughout every area in Scotland, or if he considers it possible that education authorities can effect the total necessary economies on only 24 per cent. of their expenditure?

Scotland

Local Taxation Account

asked the Secretary for Scotland what amount was paid into the Local Taxation (Scotland) Account for the last financial year; and from what source, or sources, such amount was derived?

As the reply contains a number of figures, I hope my hon. Friend will allow me to circulate them in the OFFICIAL REPORT.

The following are the figures:

The answer to the first part of the question is in the negative The second part, therefore, does not arise.

Do I understand it is certain we are to have the same amount for the Scottish Education Fund in the forthcoming year—anyhow not less than last year—in spite of the Treasury Minute as to a reduction of Estimates by 20 per cent.?

What my answer implies is that it is not proposed that there shall be any reduction in the grant this year, but as regards next year that is quite another matter.

Is it not a fact that a Minute has gone out to local authorities in connection with reducing the grant this year?

Not in connection with reducing the grant this year, but pointing out the necessity of limiting their commitments in view of a reduction of the grant next year.

In view of the fact that the grant is to be reduced next year, will it not be necessary to take counsel this year in connection with the commitments next year?

How are they to reduce expenditure in accordance with the second part of my question?

Children Boarded Out

asked the Minister of Health the number of children boarded out within and beyond the union in England and Wales on the 1st January, 1921?

The number of Poor Law children boarded out within the union on the 1st January, 1921, was 7,712, and the number boarded out beyond the. union was 1,668.

Local Government (Emergency Provisions) Act

asked the Minister of Health if his attention has been directed to the serious financial loss falling on the poorer Metropolitan boards of guardians by reason of the operation of the Local Government (Emergency Provisions) Act; and, if so, will he introduce a one-Clause Bill which will provide for the placing of the common Poor Fund upon the pre-War basis?

This object will be achieved when the termination of the War is officially declared, and this question is receiving consideration.

Census Enumerators

asked the Minister of Health whether he is aware that men employed upon Census work have not received their full pay, and have been informed that they would have to wait for at least a month to receive the balance due to them; and whether, in view of the fact that a number of men so employed are out of work, steps will be taken to expedite payment in these particular cases?

The remuneration of enumerators comprises both a fixed fee and an additional rate per hundred of the population enumerated. Special arrangements were made for the first time at the recent Census to make payment of the fixed fee immediately after the enumeration had been completed; and enumerators have already received this fee. It will be appreciated that the amount of the balance due cannot be ascertained until the population figures of each enumeration district have been received and checked and the claims of enumerators verified by reference thereto; but every effort will be made to complete the payments as soon as the amounts can be certified.

Old Age Pensions

88, 89, and 90.

asked the Financial Secretary to the Treasury, (1) whether he is aware that old age pensioners who have been offered 3s. 6d. a week additional pension have had their old age pension reduced by 4s., and in consequence the old age pensioners have had to forego the benefit of the increase from the employers; what do the Government intend doing with a view to stopping such treatment of the aged poor;

(2) if the Government have taken note of the fact that there were 24,843 applications for old age pensions declined during the year ended 31st March, 1921, because of the applicants' thrift and personal provision for old age, and that 64,085 old age pensioners received old age pensions reduced by 1s. to 9s. a week because they had endeavoured to provide for themselves of were assisted by friends and employers; and will the Government remove these penalties on the aged poor without further delay;

(3) whether, in view of the fact that the cost of the improvident who become indoor paupers is ÂŁl 3s. 0ÂĽd. a week he will state what steps the Government intend taking to enable the thrifty, aged, and law-abiding Britisher, whose weekly income is limited under the Old Age Pensions Acts to ÂŁ1 a week, including the old age pension, to receive assistance from friends and employers without reduction of or disentitlement to the old age pension?

His Majesty's Government are not prepared to re-open the settlement of this question embodied in the Old Age Pensions Act passed in December, 1919.

Mechanical Lightees Duties

asked the Financial Secretary to the Treasury the yield of the duties on mechanical lighters for the financial years 1919–20 and 1920–21 and for the first three months of the financial year 1921–22, respectively?

Invention Awards (Claims)

asked the Financial Secretary to the Treasury how many of the 188 claims which were awaiting hearing by the Royal Commission on Awards to Inventors on the 2nd May last have now been disposed of; what is the number of claims now outstanding; and when it is expected that the hearing of these claims will be completed?

Since the 2nd May 20 claims have been disposed of; there are now 170 outstanding. It is impossible to make any estimate as to the time which will be occupied in hearing these claims. In this connection, I would refer to my reply of the 4th instant to the hon. Member for East Islington, and I would add that the Judge has arranged to sit during the whole of the week pre- ceding next term in order to deal with a number of exceptionally heavy or urgent cases.

India

Army Officers' Pay

asked the Secretary of State for India what decision has been arrived at with the War Office regarding the adjustment of the pay of those officers of the Indian Army who were retained in the Army on account of the War beyond the date on which they became due to be placed on the retired list?

I have been asked to reply on behalf of my right hon. Friend (Mr. Montagu). Before coming to a decision on this question, my right hon. Friend has found it necessary to consult the Government of India, whose views he has not yet received.

Strikes, Madras

asked the Secretary of State for India whether he has any news of the Madras strikes; whether the Government have facilitated in any way the formation of an Adi-Dravidian trades union or assisted the Adi-Dravidians to break away from their comrades; whether the strike leaders have been threatened with internment; and whether, in view of the serious position, he will recommend the immediate calling together of the Legislative Council of Madras?

My right hon. Friend will circulate in the OFFICIAL REPORT an account of the Madras strikes to supplement from his latest information the details which have already appeared in the Press. As regards the second and third parts of the question, my right hon. Friend has no information, but is making inquiries. As regards the last part, my right hon. Friend understands that Lord Willingdon is himself dealing with the case, and he thinks that my hon. and gallant Friend will share his confidence that His Excellency will take this or whatever action is likely to prove helpful.

My right hon. Friend is quite mistaken. May I ask why the Secretary of State for India is not here?

Why is he never here?

The following is the information promised :

On the 29th June the huts of non-caste mill-workers in Madras were set fire to by caste strikers, and the police and members of the fire brigade were assaulted by the strikers. On the 30th June further incendiarism occurred in the same neighbourhood, and both the police and the fire brigade were more seriously attacked. The mob was dispersed by bayonet charges; no loss of life was reported to me. The total number of huts burnt was 92.

On the 2nd July the Anglo-Indian foreman of the Buckingham Mills was attacked by 40 Mohammedans and Hindus near the mill, was knocked off his bicycle and badly beaten. He was severely wounded in the body, sustained a knife cut in the head, and was left unconscious. Subsequently he made his way to the police station. He has not found it possible to identify his assailants. Two shots were fired by an unseen person at a police patrol which was sent out when the occurrence was reported.

On the 3rd July the Mohammedan driver of the manager of the mills was assaulted by Mohammedans and was chased from the manager's compound to his verandah, where three toes were cut off and his fingers were injured by a knife wound. A police officer discovered him walking in a dazed condition. He is now being detained in hospital.

Unemployment Insurance Benefit

asked the Minister of Labour whether he will introduce legislation to prevent persons with private means of, say, ÂŁ50 a year and upwards receiving unemployment insurance benefit?

As explained in the answer given to my hon. Friend on 6th July, persons with a private income of ÂŁ26 a year or more may obtain exemption if they apply for it. I do not think, however that they should be deprived against their wish of the right of being insured against unemployment.

I quite appreciate the reply which my hon. Friend gave to me previously, but will he reply to the question on the Paper?

Am I not entitled, Mr. Speaker, to ask the hon. Member to give me a reply to the question on the Paper?

If legislation were introduced I take it that it would mean legislation on the basis of excluding the people in question. That would probably be against their will. Therefore, I think the answer given really does cover my hon. Friend's question.

The hon. Member will not introduce legislation. Why does he not say so?

Is not the question, not whether people are entitled to ask to be outside the range of the Act, but rather whether a man in possession of private means is entitled to relief at the cost of the taxpayer?

Ministers' Resignations (Statements)

On a point of Order, and with a view to regularise the practice of Ministers making statements on resignation, may I ask, Mr. Speaker, whether it is not the regular rule for a Minister to obtain the permission of the Sovereign before he makes a statement? In the particular case last Thursday, the resignation of the right hon. Member for Shoreditch (Dr. Addison), I intervened, and you said that I could not ask my question then. I endeavoured to put a question on the Paper addressed to the Prime Minister, and I found that I could not ask the Prime Minister whether the Minister in question had asked the Prime Minister to obtain permission for him to make a statement. It is very obvious that he did not, because the Prime Minister has since written a letter in which he said that he only received the right hon. Gentleman's resignation as he was coming to the House for questions. I submit that it was the invariable practice of Ministers of the Crown who resigned, originally, to preface their remarks with the statement that they had received the gracious permission of the Sovereign. When Mr. Joseph Chamberlain resigned Mr. Gladstone intervened because Mr. Chamberlain was travelling over wider ground and bringing into his explanation not merely the Home Rule question but the Irish Land Act; and Mr. Gladstone said he had received the permission of the Queen only to make a statement in reference to his resignation on the question of Home Rule and not on the Irish Land Act. I submit that it should be the invariable practice of Ministers on resigning to obtain the permission of the Sovereign through the Prime Minister.

The matter is one of constitutional custom. It is the duty of every Minister of the Crown to obtain His Majesty's permission to state his reason for retirement before doing so. In the present case His Majesty has been graciously pleased to approve the course which was taken.

Education (Consolidation) BILL [Lords]

Read the First time; to be read a Second time To-morrow, and to be printed. [Bill 174.]

Orders of the Day

Finance Bill

As amended ( in Committee and on Re-committal ), considered.

NEW CLAUSE.—(Amendment of Section 1 of 6 and Geo. V., c. 11.)

(1) Entertainment Duty, within the meaning of Section one of The Finance (New-Duties) Act, 1916, as amended by any subsequent enactment, shall not be charged on payments for admission to an entertainment as respects which it is proved to the satisfaction of the Commissioners that the entertainment—

(2) In this Section the expression "society" includes a company, institution, or other association of persons, by whatever name called, the expression "agriculture" includes horticulture and livestock breeding, and the expression "live stock" includes animals of any description.—[ Sir R. Horne. ]

Brought up, and read the First time.

I beg to move, " That the Clause be read a Second time."

On a point of Order. There appeared on the White Paper today, for the first time, no fewer than five pages of new Government Amendments with regard to the Finance Bill. Some of it is new matter, and is put forward in such a way that it is not possible to amend it, even by manuscript Amendment. For instance, the Clause now before us is a new Clause, but there is a Clause further on in the name of the hon. Member for Pontypool (Mr. T. Griffiths), dealing with entertainments, which raises points which cannot be incorporated in this Amendment. I would ask the right hon. Gentleman whether he intends to proceed with this Amendment, which we now see for the first time, or whether we are not entitled to the ordinary courtesy of having Amendments to the proposals now made before us in print?

If the hon. Member had attended the Debates on this subject, he would know that the Clauses which we have put down are to meet points which were raised in the course of the discussion in Committee. They are brought forward simply in fulfilment of my pledge, and if they are satisfactory to the Members who raised these points and to the House generally, I cannot see what my hon. Friend's objection is.

The complaint is that these Clauses, however satisfactory to individual Members, only came on the official record on Saturday last, and therefore hon. Members who only returned to their Parliamentary duties to-day, have not had an opportunity of considering these Amendments. Is it not the practice in matters of this kind, especially in reference to Finance Bills, that more notice should be given to Members than merely putting on the official Paper on Saturday, "Clauses which are to be discussed on Monday"?

May I point out that the first three Clauses are practically the same as Clauses which have been on the Paper for many days in my name? The Government Clauses are only putting in better form the Clauses which I suggested in Committee stage and which my right hon. Friend agreed that he would consider.

May I point out that that is not quite the case? One of the most important things in the first Clause is the omission of one of the provisions which were most strongly urged by the hon. Member for Twickenham (Sir W. Joynson-Hicks). The Government have taken out of it some of its most valuable concessions.

I doubt if there is any point of Order which calls for my intervention, but I may say that I have looked carefully through the proposed new Clauses put forward by the Government, and I will endeavour to protect hon. Members in reference to later Clauses, where they raise additional points, particularly the Clause which stands in the name of the hon. Member for Stafford (Mr. Ormsby-Gore)—( "Exemption of exhibitions of art societies from Entertainment Duty " ) —which seems to raise a specific point that does not appear to be included in the first Government proposal.

Do I understand that I am not to move my proposed new Clause as an Amendment to the Clause of the Chancellor of the Exchequer, but as a new Clause?

Yes, that is the method which I propose to adopt. It is to be moved as a separate Clause.

As I have indicated, the object of this Clause is to meet certain objections which were raised in Committee, which seemed to me to be of some substance. One knows that there have been complaints because of the levying of Entertainment Duty on entertainments, which were more or less of an educative character or were for the encouragement of our industries. These were urged with great ability and force by the hon. Member for Twickenham (Sir W. Joynson-Hicks) and by the hon. Member for Birmingham. I do not think that there is any exception taken to what is included in the scope of this Clause. It may be that hon. Members would wish to exempt other forms of exhibition than those to which I refer, but the Clause, as I propose it, ought, I think, to meet with the approval of the House.

May I ask whether this Clause will prejudice the new Clause which comes later on in the name of several members of the Labour party— "Amendment of 6 Geo. V., c. 11, s. 1"? That Clause covers, I think, the same ground as the Clause of the right hon. Gentleman, but. it has a wider scope.

4.0 P.M.

The difference between the Government proposal and the proposed new Clause referred to is the non-inclusion of entertainments of an educational character. That point is raised specifically by the new Clause ( Exemption of Exhibitions of Art Societies from Entertainments Duty ) standing in the name of the hon. Member for Stafford (Mr. Ormsby-Gore). Therefore, if I put that new Clause later on, it will cover both points. I shall, however, be open to hear the hon. Member when we get to the new Clause to which he refers.

The Labour Clause has a very much wider difference than you have mentioned. I believe that it raises the question of the price of admission to children's matinees. I am entirely in agreement with the Government's new Clause, but I also wish to support that which is in the later Clause.

Does that mean all four points, ( a ), ( b ), ( c ), and ( d ) 1 How can we incorporate this new Clause in the name of the Labour party as an Amendment to the Government's new Clause?

Yes, it would be difficult to frame it as an Amendment, but, if it be put to me as a new Clause, I will take it.

That is one reason why I raised my initial point. If you take this as a separate new Clause, then we shall have two Clause covering the same subject, whereas, if we had an opportunity of amending the Government's new Clause, it might all be incorporated in one Clause. Paragraph ( a ) of Subsection (1) of the Government's new Clause is one portion of the exemption which I do not quite understand. It deals with entertainments which are for the benefit of the public health. There is one class of entertainment about which I dare say many hon. Members beside myself have had many representations. The ordinary athletic organisation, which is altogether amateur, lives on its own subscriptions, and by the holding of annual sports, or some form of entertainment in the winter time. I do not think it was ever contemplated, when the duty was originally levied, that it should be charged on that kind of organisation. The interpretation of the words "for the public health" is to be left to the Commissioners. Some alteration will be required to be made in the case of Scotland. The concession, there- fore, all depends upon the interpretation. Could my right hon. Friend tell us whether, in the words "for the public health" is included the type of entertainment which I have specified. When it is a question of an amateur athletic club, will they be exempt from the duty 1

The answer is in the negative. I thing my hon. Friend will see that it could not possibly apply to that form of entertainment. If he reads the two paragraphs together—they must be read together—he will see that they are connected by the word "and." You must have an entertainment which is provided by a society established solely for the purpose of promoting the public health, and consisting of an exhibition of articles which are of material interest in connection with questions relating to the public health. I do not think that by any imagination you could include in these words an exhibition such as my hon. Friend describes.

May I, as the parent of this new Clause, just rise, formally, to thank my right hon. Friend for having accepted it? It arose from a deputation which waited upon the late Chancellor of the Exchequer from the Royal Agricultural Society, and some of the motor manufacturing societies and other traders who hold these large trade exhibitions. The Royal Agricultural Society were very keen that agricultural shows, purely instructive in character, should be exempted, and we were anxious that these large industrial shows should also be excepted. The late Chancellor of the Exchequer agreed, and I thank my right hon. Friend for having carried it out. I should have been glad if he could have considered whether it would not be possible, instead of having the Commissioners of Inland Revenue to decide these, questions, for the Board of Trade to decide whether an industrial exhibition comes within the scope of the duty or not, but my right hon. Friend has met me so kindly that I do not suggest pressing it to an Amendment.

I should like, as representing an agricultural constituency, to thank my right hon. Friend for having acceded to the wishes of the agricultural community by exempting agricultural shows from the Entertainments Duty. It may perhaps come as some little alleviation of the other Bill which is at present being considered upstairs. I should like to ask whether it is perfectly plain that, if for the pleasure of the ladies attending the show we have a band, the Entertainments Duty will still not be applicable. We have had a great many difficulties with regard to that matter. On one occasion, when exemption was not applied for because a band was coming, and the band did not turn up, the duty none the less had to be paid and could not be recovered. I should like, therefore, to ask whether it will be necessary in every case, before the show takes place, to apply for a certificate of exemption, or whether the ordinary law where you are not legally liable to pay a tax will apply; and you need not apply for any exemption. I should also like to ask when it is proposed to put this saving Clause into operation. At present, there are a large number of agricultural shows going on all over the country. July and August are very prolific months, and I do hope that the Chancellor of the Exchequer will see his way to make the Clause retrospective at any rate from 1st July. This very week there is a large show being held in Yorkshire, and there are other shows being held all over the country. I would therefore ask the Chancellor of the Exchequer to make this further concession and to earn the gratitude of all connected with agriculture by making this a retrospective Clause and allowing those holding their shows after 1st July to be exempt from that duty. We have had a very uphill fight with two previous Chancellors of the Exchequer, but I am glad to say that the right hon. Gentleman has now earned our gratitude, and we will try and not forget the benefit given.

Will the right hon. Gentleman tell us how much this concession is going to cost?

I am afraid that I am not in a position to tell my hon. Friend exactly. I do not think that it will be any extravagant sum. It is estimated that it will cost about ÂŁ100,000, but it is a concession which I think can be justified or its merits.

I do not know what a village institute is. It will only cover those things which are denned in the Clause itself. If a trade exhibition be held in a village institute it would undoubtedly be free, but it is upon the, character of the exhibition and not upon the place where it is held that the exemption depends.

Question, "That the Clause be read a Second time," put, and agreed to.

Clause read a Second time.

I beg to move, in Sub-section (1), to leave out the words

"and ( b ) consists solely of an exhibition of the products of the industry, or branch thereof, for promoting the interests of which the society exists, or materials, machinery, appliances, or foodstuffs, used in the production of those products, or of articles which are of material interest in connection with the questions relating to the public health, as the case may be."

It has been represented to me from very important agricultural societies that the words of paragraph ( b ) unduly limit the scope of an exhibition that they could hold without being subject to the duty. If there were anything in the nature of a side show, the exhibition would not come within these words, because it must consist solely of the things mentioned in this paragraph. Therefore, however good the exhibition of cattle and implements might be, if there were any roundabouts for the children or coconut shies or a band they would have to pay the full Entertainments Duty. If this Clause be passed as it stands, all the lighter side of the exhibitions would have to be most rigorously ruled out, or else they would have to pay the duty. That would be a most serious interference with the exhibitions and of no advantage to the Chancellor of the Exchequer. It would cripple agricultural and other exhibitions and would not bring him in any revenue. I submit that it would be quite enough if he provided that this concession should be given where the Commissioners were satisfied that the exhibition was provided by a society established solely for the purpose of promoting the interests of the industry of agriculture, or of any particular manufacture, or some branch thereof, or the public health, and which was not conducted for profit. If the Commissioners were satisfied on all those points, then I submit it would be quite irrelevant because there was some small thing for the amusement of the children coming with their parents to say, "We will insist on imposing the duty."

I am very well aware of the difficulties of the issue raised by my hon. Friend, having discussed it with those who advise me upon such matters. I have tried my very hardest to find some way of meeting this particular case, but, so far as I can see. there is none, save that of entirely repealing the Entertainment Duty. The hon. Gentleman himself was led into a phrase in the course of his speech which gives a complete reply to his argument when he talked about people who went to the shows for the "lighter kind of entertainment." As soon as you get to that, it is quite obvious you are really allowing a "lighter entertainment," to use the hon. Member's own words, to escape from the duty, although it would be subject to the duty if it were given in some other place. It appears to be quite clear that every person who has an entertainment of the lighter kind, and who is compelled to pay duty, would have a, grievance against the imposition of the duty in his own case, while other people who mixed up a display of a serious character with another of a lighter character went free, although the lighter entertainment was the real means of drawing the people. It is impossible to give in upon this matter, because a concession of this kind would be liable to inroads, and would lead to every form of abuse. I should very much like to have found some solution, because I know what the agricultural show in the country is like, and how much it is enlivened by the presence of a band playing music—execrable music in most cases, but none the less helping to brighten the proceedings. I under stand and appreciate the point which the hon. Member raises, but I am quite unable to discover any means of solution on the lines of the view he puts forward.

Do I understand from the explanation of the Chancellor of the Exchequer that when an agricultural show is held it will have to pay this tax simply because a band happens to attend to play music for the benefit of the people there 1 That will mean you cannot have a show with a band at all.

With the permission of the House I desire to retract every single word I said in regard to the Chancellor of the Exchequer. The concession which. he is offering turns out to be really nothing at all. I understood at first after reading this that where a society satisfied the Commissioners that it was a society established solely for the purposes of promoting the interests of agriculture, and not for making profit, it would be entitled to have a band without incurring the tax. You cannot possibly carry on these shows without a band. I do retract what I said previously.

May I, in a formal reply, appeal to the Chancellor of the Exchequer at any rate to consider the insertion of words allowing these societies to employ a band at their shows without becoming liable to the tax? Surely that can be done without any difficulty and without any serious damage to other interests.

As one who probably knows as much about the working of the Entertainment Tax as anybody, I have been vastly amused in the course of this discussion. It was obvious from the first that the original Clause made no concession whatever. I had an example of it on Saturday when I had the pleasure of opening a little allotment holders' show. The local band offered their services and played a few items, and also the National Anthem when the show closed. In such circumstances the Entertainment Tax will be charged. Every single agricultural show of whatever sort, kind, or description in town, or village, or country must have some incidental music. They have always had it, and they must continue to have it, and therefore this contains no concession of any kind. Though I am not interested in this at all, nevertheless I support the proposal for the insertion of some words such as "incidental music," so that this concession may be made a genuine one and not a farce.

I wholeheartedly defend the Chancellor of the Exchequer. I feel that here he has been subjected to an unprovoked attack. I was at one of these shows last year, a well-known show in the Midlands, at which 40,000 people paid 5s. each for admission. There were two or three tents where we could see flowers, but I do not suppose one person in five visited those tents. The attraction was the beautiful place in which the show was held and the variety of side shows provided. People came from great distances, some as far as 200 and 300 miles, in order to be present. Taxation should be placed on luxury, and if there is a luxury which a person can afford to go without, surely it is paying 5s. for the privilege of seeing a series of roundabouts and such shows. That is the sort of tax we should support the Government in enforcing. It is not upon a necessity, and it is not upon a poor man's pleasure, as though it were upon cricket or football. Any person who would go the distance I have mentioned, and pay 5s. for admission, should be able to afford the small additional sum necessary to meet this tax. There are a large number of directions in which the entertainments tax could be extended. There are a large number of things which we do simply and solely for pleasure, and upon which we ought to pay taxes. When the time comes I shall suggest to the Chancellor of the Exchequer the desirability of extending the entertainments tax to Sunday travelling, which is above all else a form of pleasure, and those who indulge in it could afford to pay, if a tax were put upon it. While I hope the Chancellor of the Exchequer will make some attempt to relieve a certain number of bond fide, industrial and trade exhibitions, I think he should not allow exemption in regard to these shows at which amusements are provided, and which are not attended by anybody who cannot afford to pay a small extra charge for admission.

In connection with horticultural shows, is it not a fact that these, after all, and many other, shows, are for the education of the people, and is there an obligation on all such shows to pay the tax?

There must be some misunderstanding about this. I understood the Chancellor of the Exchequer to say that this would represent about ÂŁ100,000.

Is the concession going to cost ÂŁ100,000 with these) exclusions which he has just stated? Even cutting out the bands at agricultural shows altogether from the concession?

That means that no agricultural show will get a concession at all. I have never been at one that has not had a band. I only put that question in order to make the point clear. At the same time it makes me think that the Chancellor of the Exchequer, while professing to give something, is really giving nothing at all.

It appears to me there are all the elements of a compromise here. The Chancellor has very properly endeavoured to protect people who give entertainments in the ordinary way, from being competed with by agricultural shows which hold variety shows in addition to their ordinary exhibitions. In trying to protect these people, and in trying to protect himself, he appears to be shutting out the genuine agricultural society or horticultural society from taking advantage of this Clause, if they have either a voluntary or a paid band to play at their show during an afternoon. It appears to me it would be quite possible for the Chancellor to protect himself with words which would enable him to get the entertainment duty in all cases where a real entertainment is given, and at the same time allow this concession to those societies who merely allow music to be played in their grounds during a show.

I think the House has drifted away from the object of this Clause. Its intention is not to impose a duty against exhibitions which are really for the purpose of encouraging production or any kind of agriculture, or exhibitions of trade resources which aim at educating the people. What is really being put to the House is whether we are prepared to exempt from the Entertainment Duty those who go to agricultural shows, not for the purpose of seeing the livestock there, not for the purpose of seeing how agriculture is being carried on, but merely to enjoy the opportunity of meeting their friends, and taking part in the lighter forms of entertainment which the show society, in order to attract such people, provides. That is really exempting from the duty ready money paid for entertainment, and not for edu- cational objects which this Clause is intended to exempt. If you are going to allow a band, what about an agricultural show which has a party of pierrots as an attractive aside to the main display?

Those who run the pierrots would be there to make profit out of the people.

Might not the promoters of an agricultural show very well engage a party of pierrots as an additional attraction, just as at present they employ a band, and so on with every form of entertainment? My hon. Friend the Mover of the Amendment mentioned two or three others. I think he said "cockshies."

You may have many forms of entertainment provided in the show grounds of an agricultural society, and where are you going to draw the line, and upon what ground are you going to defend yourself against those who are taxed for such forms of entertainment? I think we should be starting on a very slippery slope, on which we could not maintain our feet if once we began concessions on these lines, and I know of no place at which it would be possible to stop. The hon. and gallant Member for Chelsea (Sir S. Hoare) appeared to be rather startled by the large amount of money which was going to be lost to the revenue. He may take it from me that that figure has been made up upon very close calculations. I would also point out to him that, for example, trade shows in this country are carried through without any music or any form of entertainment at all, and are attended by masses of people who go there for the purpose, not of listening to a band, but of seeing what the country is able to produce. If people are genuinely interested in these things—and that is what we wish—I cannot think that the attendance of a band would make all the difference which my hon. Friend suggests.

I think it would help us in considering this new Clause if we knew what the attitude of the Government is going to be towards the Clause put down in the name of the hon. Member for Pontypool (Mr. T. Griffiths). The' case I have in mind is this. Suppose swimming competitions amongst school- children are organised, and a small charge is made for admission, which keeps the society going, but there is no question of profit of any kind, and no entertainment except the performances of the children which the parents go to see. I am informed that in the ordinary course is subject to entertainments duty. Do I understand that under this concession, in its reference to matters connected with public health, such an entertainment would be exempted 1 This is a useful form of public endeavour, and no one makes any money out of it. It would be a great advantage if the right hon. Gentleman could tell use what he is going to do in regard to that proposal.

I should like to join in the appeal just made, because I think the attitude of a good many of us, in voting on this proposed new Clause, will be, to some extent, determined by the attitude of the Government in regard to the Amendment down in the name of the Labour party. In that Amendment there is an important Sub-clause relating to education, and if I had not been informed by you, Sir, that that matter would be allowed to be raised on that Amendment, I should myself, on this proposed new Clause, have suggested the insertion of words protecting purely educational exhibitions. In answer to what has been said by my hon. and gallant Friend opposite (Captain W. Benn) I think he will observe that these two Sub-clauses are conjunctive. The entertainment must not only be provided by a society which is established solely for the purpose, but it must also consist of an exhibition of products—of material products, I understand from that. Therefore, any exhibition such as that referred to by my hon. and gallant Friend would clearly be excluded from the proposed new Clause.

It is impossible for me to give a complete answer in regard to the Clause to which my hon. and gallant Friend the Member for Leith (Captain W. Benn) referred. I would, however, point out that under the present law educational exhibitions are already

exempt, and the question which my hon. and gallant Friend raises is not now at issue. This is an addition to the exemption which already exists in favour of educational exhibitions, and therefore the point is fully met.

Does the right hon. Gentleman lay stress on the word "exhibition" rather than on the word "entertainment"?

No. If it is a. purely educational entertainment it is exempt, but every entertainment that I know of that is going on in London to-day is, in some respects, educational, and, therefore, without excluding nearly every form of entertainment, you could not exempt entertainments on the ground that they were, in some respects, educational. As I say, exhibitions which are for the sole purpose of education are already subject to exemption, and that is carrying the case as far as we can. Upon the question put by the hon. and gallant Member for Leith (Captain W. Benn), my attitude towards the Clause down in the name of certain Labour Members is one of opposition. To a certain extent what they propose is already covered by the law as it stands, and in so far as it exceeds what the ordinary law provides, I am afraid I cannot accept it.

It would be more convenient to dispose of the questions of trade and agricultural exhibitions, leaving the way clear to deal with further matters on the subsequent proposed new Clause. The proposed new Clause now before the House does not deal with children's entertainments, but proposes to remove some of the limitations on industrial or agricultural exhibitions.

Question put: "That the words proposed to be left out stand part of the proposed Clause."

The House divided: Ayes, 228; Noes, 68.

Division No. 253.]

AYES.

[4.38 p.m.

Agg-Gardner, Sir James Tynte

Baldwin, Rt. Hon. Stanley

Bell, Lieut.-Col. W. C. H. (Devizes)

Amery, Leopold C. M. S.

Balfour, George (Hampstead)

Bellairs, Commander Carlyon W.

Armitage, Robert

Banbury, Rt. Hon. Sir Frederick G.

Benn, Sir A. S. (Plymouth, Drake)

Armstrong, Henry Bruce

Barnston, Major Harry

Bennett, Sir Thomas Jewell

Ashley, Colonel Wilfrid W.

Barrie, Charles Coupar (Banff)

Bentinck, Lord Henry Cavendish-

Baird, Sir John Lawrence

Beauchamp, Sir Edward

Betterton Henry B.

Birchall, Major J. Dearman

Hohler, Gerald Fitzroy

Pearce, Sir William

Bird, Sir A. (Wolverhampton, West)

Holmes, J. Stanley

Peel, Col. Hn. S. (Uxbridge, Mddx.)

Blair, Sir Reginald

Hope, Sir H. (Stirling & Cl'ckm'nn'n, W.)

Pennefather, De Fonblanque

Boscawen, Rt. Hon. Sir A. Griffith-

Hope, Lt.-Col. Sir J. A. (Midlothian)

Percy, Lord Eustace (Hastings)

Bowles, Colonel H. F.

Hopkins, John W. W.

Perkins, Walter Frank

Bowyer, Captain G. W. E.

Hopkinson, A. (Lancaster, Mossley)

Perring, William George

Breese, Major Charles E.

Horne, Sir R. S. (Glasgow, Hillhead)

Philipps, Gen. Sir I. (Southampton)

Brown, T. W. (Down, North)

Hunter, General Sir A. (Lancaster)

Philipps, Sir Owen C. (Chester, City)

Bruton, Sir James

Hurst, Lieut.-Colonel Gerald B

Pilditch, Sir Philip

Buchanan, Lieut.-Colonel A. L. H.

James, Lieut.-Colonel Hon. Cuthbert

Pinkham, Lieut.-Colonel Charles

Buckley, Lieut.-Colonel A.

Jeliett, William Morgan

Pownall, Lieut.-Colonel Assheton

Bull, Rt. Hon. Sir William James

Jesson, C.

Pratt, John William

Burn, Col. C. R. (Devon, Torquay)

Jodrell, Neville Paul

Purchase, H. G.

Butcher, Sir John George

Johnstone, Joseph

Raeburn, Sir William H.

Casey, T. W.

Jones, Sir Edgar R. (Merthyr Tydvil)

Raper, A. Baldwin

Cecil, Rt. Hon. Evelyn (Birm., Aston)

Jones, Sir Evan (Pembroke)

Rawlinson, John Frederick Peel

Chamberlain, Rt. Hn. J. A. (Birm. W)

Jones, J. T. (Carmarthen, Llanelly)

Rees, Sir J. D. (Nottingham, East)

Child, Brigadier-General Sir Hill

Joynson-Hicks, Sir William

Renwick, Sir George

Clay, Lieut.-Colonel H. H. Spender

Kellaway, Rt. Hon. Fredk. George

Richardson, Alexander (Gravesend)

Clough, Sir Robert

Kelley, Major Fred (Rotherham)

Roberts, Sir S. (Sheffield, Ecclesall)

Coats, Sir Stuart

King, Captain Henry Douglas

Robinson, Sir T. (Lancs., Stretford)

Cobb, Sir Cyril

Kinloch-Cooke, Sir Clement

Rodger, A. K.

Colfox, Major Wm. Phillips

Lambert, Rt. Hon. George

Samuel, A. M. (Surrey, Farnham)

Colvin, Brig.-General Richard Beale

Lewis, Rt. Hon. J. H. (Univ., Wales)

Samuel, Rt. Hon. Sir H. (Norwood)

Cowan, D. M. (Scottish Universities)

Lloyd, George Butler

Sanders, Colonel Sir Robert Arthur

Craig, Captain C. C. (Antrim, South)

Lloyd-Greame, Sir P.

Sassoon, Sir Philip Albert Gustave D.

Craik, Rt. Hon. Sir Henry

Locker-Lampson, G. (Wood Green)

Scott, A. M. (Glasgow, Bridgeton)

Curzon, Captain Viscount

Lowther, Maj.-Gen. Sir C. (Penrith)

Seddon, J. A.

Davidson, J. C. C. (Hemel Hempstead)

Lyle, C. E. Leonard

Shaw, Hon. Alex. (Kilmarnock)

Davies, Alfred Thomas (Lincoln)

M'Connell, Thomas Edward

Shortt, Rt. Hon. E. (N'castle-on-T.)

Dawes, James Arthur

M'Donald, Dr. Bouverle F. P.

Smith, Sir Malcolm (Orkney)

Doyle, N. Grattan

Macdonald, Rt. Hon. John Murray

Smithers, Sir Alfred W.

Du Pre, Colonel William Baring

Mackinder, Sir H. J. (Camlachie)

Sprot, Colonel Sir Alexander

Edwards, Major J. (Aberavon)

McLaren, Hon. H. D. (Leicester)

Stanier, Captain Sir Beville

Edwards, Hugh (Glam., Neath)

McMicking, Major Gilbert

Stanton, Charles Butt

Elveden, Viscount

Macpherson, Rt. Hon. James I.

Stevens, Marshall

Evans, Ernest

Macquisten, F. A.

Sturrock, J. Leng

Eyres-Monsell, Com. Bolton M.

Maddocks, Henry

Sugden, W. H.

Fell, Sir Arthur

Malone, Major P. B. (Tottenham, S.)

Surtees, Brigadier-General H. C.

FitzRoy, Captain Hon. Edward A.

Manville, Edward

Taylor, J.

Flannery, Sir James Fortescue

Marriott, John Arthur Ransome

Terrell, George (Wilts, Chippenham)

Ford, Patrick Johnston

Martin, A. E.

Thomas, Sir Robert J. (Wrexham)

Foreman. Sir Henry

Mason, Robert

Thomson, F. C. (Aberdeen, South)

Frece, Sir Walter de

Meysey-Thompson, Lieut.-Col. E. C.

Thomson, Sir W. Mitchell- (Maryhill)

Gardiner, James

Mildmay, Colonel Rt. Hon. F. B.

Townshend, Sir Charles Vere Ferrers

Geddes, Rt. Hon. Sir E. (Camb'dge)

Mitchell, Sir William Lane

Tryon, Major George Clement

Gee, Captain Robert

Molson, Major John Elsdale

Waddington, R.

Gibbs, Colonel George Abrahm

Mond, Rt. Hon. Sir Alfred Moritz

Wallace, J.

Gilbert, James Daniel

Montagu, Rt. Hon. E. S.

Ward, Col. L. (Kingston-upon-Hull)

Gilmour, Lieut.-Colonel Sir John

Moreing, Captain Algernon H.

Waring, Major Walter

Glyn, Major Ralph

Morison, Rt. Hon. Thomas Brash

Warner, Sir T. Courtenay T.

Grant, James Augustus

Morris, Richard

Warren, Sir Alfred H.

Green, Joseph F. (Leicester, W.)

Morrison, Hugh

Watson, Captain John Bertrand

Greenwood, Colonel Sir Hamar

Morrison-Bell, Major A. C.

White, Col. G. D. (Southport)

Greer, Harry

Munro, Rt. Hon. Robert

Williams, C. (Tavistock)

Greig, Colonel Sir James William

Murchison, C. K.

Williams, Lt.-Col. Sir R. (Banbury)

Gretton, Colonel John

Murray, Hon. A. C. (Aberdeen)

Williams, Col. Sir R. (Dorset, W.)

Gritten, W. G. Howard

Murray, C. D. (Edinburgh)

Willoughby, Lieut.-Col. Hon. Claud

Hacking, Captain Douglas H.

Murray, Hon. Gideon (St. Rollox)

Wilson-Fox, Henry

Hall, Rr-Adml Sir W.(Liv'p'l, W. D'by)

Murray, William (Dumfries)

Wise, Frederic

Hamilton, Major C. G. C.

Neal, Arthur

Wood, Hon. Edward F. L. (Ripon)

Hannon, Patrick Joseph Henry

Newman, Sir R. H. S. D. L. (Exeter)

Wood, Major Sir S. HIM- (High Peak)

Harmsworth, C. B. (Bedford, Luton)

Nicholl, Commander Sir Edward

Woolcock, William James U.

Harris, Sir Henry Percy

Nicholson, Reginald (Doncaster)

Worthington-Evans, Rt. Hon. Sir L.

Henderson, Major V. L. (Tradeston)

Nicholson, William G. (Petersfield)

Yate, Colonel Sir Charles Edward

Hennessy, Major J. R. G.

Norman, Major Rt. Hon. Sir Henry

Young, E. H. (Norwich)

Hewart, Rt. Hon. Sir Gordon

O'Neill, Major Hon. Robert W. H.

Young, Sir Frederick W. (Swindon)

Hilder, Lieut.-Colonel Frank

Ormsby-Gore, Hon. William

Younger, Sir George

Hills, Major John Waller

Palmer, Major Godfrey Mark

Hinds, John

Palmer, Brigadier-General G. L.

TELLERS FOR THE AYES.—

Hoare, Lieut.-Colonel Sir S. J. G.

Parker, James

Colonel Leslie Wilson and Mr.

Dudley Ward.

NOES.

Barker, G. (Monmouth, Abertillery)

Brown, James (Ayr and Bute)

Grundy, T. W.

Barnes, Rt. Hon. G. (Glas., Gorbals)

Cape, Thomas

Guest, J. (York, W. R., Hemsworth)

Barnes, Major H. (Newcastle, E.)

Carter, W. (Nottingham, Mansfield)

Hall, F. (York, W. R., Normanton)

Barrand, A. R

Clynes, Rt. Hon. John R.

Hallas, Eldred

Barton, Sir William (Oldham)

Collins, Sir Godfrey (Greenock

Halls, Walter

Bell James (Lancaster, Ormskirk)

Edwards, C. (Monmouth, Bedwellty)

Hancock, John George

Benn, Captain Wedgwood (Leith)

Edwards, G. (Norfolk, South)

Hirst, G. H.

Bottomley, Horatio W.

Galbraith, Samuel

Hodge, Rt. Hon. John

Bowerman, Rt. Hon. Charles W.

Glanville, Harold James

Hogge, James Myles

Bramsdon, Sir Thomas

Griffiths, T. (Monmouth, Pontypool)

Irving, Dan

Kennedy, Thomas

Remnant, Sir James

Walsh, Stephen (Lancaster, Ince)

Kenworthy, Lieut.-Commander J. M.

Richardson, R. (Houghton-le-Spring)

Waterson, A. E.

Kenyon, Barnet

Roberts, Frederick O. (W. Bromwich)

Wedgwood, Colonel Josiah C.

Kiley, James Daniel

Royce, William Stapleton.

White, Charles F. (Derby, Western)

Lawson, John James

Sexton, James

Wignall, James

Lowther, Major C. (Cumberland, N.)

Shaw, Thomas (Preston)

Williams, Col. P. (Middlesbrough, E.)

Lunn, William

Short, Alfred (Wednesbury)

Wilson, James (Dudley)

Mallalieu, Frederick William

Spencer, George A.

Wilson, W. Tyson (Westhoughton)

Mills, John Edmund

Sueter, Rear-Admiral Murray Fraser

Wood. Major M. M. (Aberdeen, C.)

Morgan, Major D. Watts

Thomas, Rt. Hon. James H. (Derby)

Young, Robert (Lancaster, Newton)

Murray, Dr. D. (Inverness & Ross)

Thomas, Brig.-Gen. Sir O. (Anglesey)

Myers, Thomas

Thorne, G. R. (Wolverhampton, E.)

TELLERS FOR THE NOES.—

Newbould, Alfred Ernest

Thorne, W. (West Ham, Plalstow)

Mr. A. Williams and Mr. Turton.

Raffan, Peter Wilson

Tootill, Robert

Clause added to the Bill.

NEW CLAUSE.—(Provision as to duty on foreign spirits used for making power or industrial methylated spirits or in manufactures, and as to the allowance in respect of spirits so used.)

(1) Notwithstanding anything in Sub section (5) of Section one hundred and twenty-three of The Spirits Act, 1880, or in Subjection (1) of Section eight of The Finance Act, 1902, imported spirits may be used by an authorised methylator for making power methylated spirits or industrial methylated spirits, or may be received by a person for use in any art or manufacture under the said Section eight, in the case of spirits chargeable with duty at the preferential rate without any payment, and in the case of spirits chargeable with duty at the full rate on payment of the difference between the full rate and the preferential rate.

(2) The allowance of three pence per gallon payable under Section one of The Revenue Act, 1906, and Section eleven of The Finance Act, 1920, in respect of spirits used for making power methylated spirits or industrial methylated spirits or spirits used in any art or manufacture under Section eight of The Finance Act, 1902, shall cease to be payable in the case of imported spirits and shall be increased to five pence in the case of British spirits.

(3) In this Section the expression "imported spirits" means spirits other than British spirits.—[ Sir R. Horne. ]

Brought up, and read the First time.

I beg to move, "That the Clause be read a Second time."

It has been very strongly urged by motor users in this country that the tax on imported spirits is a tax upon the power of the machines which they use. They understood that what was used for the purpose of generating power should not be subject to any tax. For example, the tax was taken off petrol, and they maintained that they should also have had the tax taken off spirit used for motive power. I think they may have exaggerated the promise or the guarantee given them on this matter. It is entirely upon this ground that I came to the conclusion that this exemption should be granted. It is our duty at the present time to try to revive all means of transport in this country. We ought in a matter of this kind to do our best to exempt from duty one of the means by which transport is carried on. Accordingly I have put down this Clause for the purpose of exempting from duty spirit which is used for the purpose of generating power. On the other hand, we have had a duty on spirits used for industrial purposes. I came to the conclusion that it was impossible to exempt spirit used for the purpose of generating power and not at the same time to exempt spirit used for industrial purposes. For one thing, it is impossible when a consignment of spirit arrives at a seaport to know what its destination is going to be, and it will be impracticable to exempt one and not the other.

The same reason operated in connection with spirit used for industrial purposes. You could not tell for which use the spirit was going to be put. Accordingly the Clause proposes to exclude spirit used for either purpose which is imported, keeping always present the preference on spirit produced within the Empire, which will have a preference of 2s. 6d. a. gallon. It is provided in the Clause that the allowance of 3d. shall be increased to 5d. in the case of spirits produced in the United Kingdom,. The explanation of that proposal is this. Under our methods of production of spirit here great restrictions are put upon the British producer which have the result of appreciably increasing his cost of production. This has been recognised in the past and an allowance of 3d. has been granted in order to equalise the cost of manufacture and the conditions of sale with those of the spirits sent into this country from outside. What we are proposing in this Clause is that that 3d. in the previous Act should now be increased to 5d., and it is proposed to keep on that differential tariff in favour of British produce only for the purpose of equalising the conditions as against the spirits of foreign manufacture.

I would like to ask the right hon. Gentleman exactly what the phrase "British spirits" means. Does this include the whole British Empire or only the British Isles?

I am relieved to hear that, because it looked as if this Clause had some preference hidden in it, and if that had been the case I should have been, of course, forced to oppose the right hon. Gentleman in anything of that sort. I have been looking at the Finance Act of 1920, and it seems to me that there is something a little ambiguous here. We are now extending the exemption from duty which was applied to spirits used for transport purposes to spirits used for generating power. Therefore, at a time when the right hon. Gentleman is in great doubt as to where he is going to get revenue from, he is suggesting an exemption of duty to the users of motor spirits and he is supported very clearly by the hon. Baronet the Member for Twickenham, who cheers the Government at a time when we ought to be looking at every penny. The last people who ought to be relieved of taxation are the motor users. I do not mean the motor cyclists and poor people of that sort. I mean the users of motor cars for pleasure as against those who employ motor vehicles for commercial purposes. There is a lot to be said for the exemption of spirits used for commercial vehicles. But I regret that the Government are not able to differentiate. I should have thought it was not beyond their ability to devise some words to make the differentiation. I do not want to go into this, as it is a big subject, but we are letting off the pleasure motor users.

The pleasure user will always take petrol if he can get it. This Clause is not so likely to affect him.

If that is the case I am very glad to hear it. I have only just heard the explanation of the right hon. Gentleman and I want to protest against the remission of taxa- tion from any people who can afford to pay towards the taxation of the country.

I want to ask the Chancellor of the Exchequer one question. Does this include methylated spirits produced in this country, and, if so and it is redistilled, is there to be any change?

There will be no change so far as I know. I am not perhaps so well acquainted with spirits as I ought to be, but of course any spirit which is given the benefit of this exemption must be of such a character that it cannot be used for potable purposes.

5.0 P.M.

I understand that at the present time America practically produces about 80 to 85 per cent. of the petrol that as turned out in the whole of the world's production,' and last year I understand America turned out sufficient motors to absorb practically all the world's supply of petrol. That is a serious position for this country to be in. One of the ways out of the difficulty is the development of power alcohol. The Chancellor of the Exchequer has very wisely in the interests of the motoring industry of this country given an opening for the development and the production of another form of fuel altogether from petrol, which, as I understand, can be produced in very large quantities at a very cheap price. For instance, I am told of one form of power alcohol which can be produced at about 50 per cent. less than the price of petrol. It is the product of South Africa. From that point of view I am very pleased that the Chancellor of the Exchequer has taken this matter into consideration because it is bound to help the development of the motor industry in this country. There is only one point on which I should like to be satisfied, and it is whether the Chancellor of the Exchequer has satisfied himself that the denaturalant which is to be accepted universally will satisfy all quarters.

I want to ask the Chancellor of the Exchequer the same question as on the last Amendment, how much will it cost the Treasury?

The cost in respect of industrial spirit will be ÂŁ40,000. With regard to the cost on motor spirit, I am afraid I cannot form any estimate at all, because there has been, compara- tively, so little used. It is a new venture for the purpose of cheapening motive power.

If I followed the right hon. Gentleman correctly in his explanatory statement, I understand that the duty is not to he levied on imported spirits, and according to the statement just made it will cost the Treasury some ÂŁ40,000. He then went on to explain that there would be a duty on spirits coming from the Continent, and because there is a duty there is to be a preference granted to imported spirits coming to us from the British Dominions. I fail to follow how a preference could be granted to imported spirits if there is no duty.

The point I am anxious to put is that the Chancellor of the Exchequer is to levy a duty on imported spirits which come from the Continent or from America, and if I am correctly informed most of the imported spirits do come from those countries. Therefore, the point put by the Chancellor of the Exchequer will not, I think, fully meet the case made by motor users and by the transport industry of the country. Cannot the Chancellor of the Exchequer endeavour to free power from taxation? Has not the time arrived when power should enter our ports free of duty? I put this point to the Chancellor of the Exchequer, and I hope we may have some reply as to what the concession may cost the Treasury. He has already granted a concession, costing ÂŁ100,000, to individuals who visit particular exhibitions. Cannot he grant this further concession, in the interests of trade or transport, and say that imported spirits, no matter from what country they come, whether from the British Dominions or from Germany or from America, should enter our ports and be used by industry without any further tax or any further trouble?

I desire to thank the Chancellor of the Exchequer and, as the motor industry has been referred to, to thank him on behalf of the motor industry, particularly on behalf of the commercial side. My hon. and gallant Friend the Member for Central Hull (Lieut.-Commander Kenworthy) suggested that this was a concession to pleasure motor-cars. It is nothing of the kind. I want to make that perfectly clear. There is practically none of this Empire-produced spirit introduced into the country at the present time, and pleasure motor-cars do not use a single pint of it, and therefore we shall not get off a penny. What we hope is that if this Clause is passed a new industry will be created in our Colonies which will be able to furnish us with hundreds of thousands of gallons of this particular spirit. It is made in Natal in very large quantities from quite useless prickly pear, and it can be made also in the sugar-producing districts in the Colonies out of the absolutely worthless refuse left over after sugar is produced and distilled. We do want a further supply of motive power. The whole of the carrying industry of the country is gradually developing on to petrol lines through the internal-combustion engine. The roads are becoming more and more utilised by petrol or some other form of internal-combustion engine, but, as my hon. Friend the Member for West Walthamstow (Mr. Jesson) has said, we are in the hands of the great petrol producers in America and in the East. Enough petrol is not being produced for the needs of the country at the present time. We want more motive power. We cannot expect our Colonies to produce this new spirit if they are to be taxed on its import when petrol is let in free. There is now a differential duty against Empire-produced spirit, and the spirit from America, from Borneo, Roumania, or anywhere else is let in free under the arrangements of last year's Act of Parliament, and it is because we want to put our Colonies on the same basis as the great American and other petrol-producing countries that we want this Clause passed. As a strong believer in the Empire I hope that in a few years it will produce a large supply of motor spirit from our own Empire.

Question, "That the Clause be read a Second time," put, and agreed to.

Clause read a Second time.

I beg to move in Sub-section (1), to leave out the words "in the case of spirits chargeable with duty at the preferential rate."

The effect of the Amendment is to make the duty leviable on these spirits from whatever source they come. We have heard a great many arguments to-day, which I think have impressed us all, as to the value of the importation of this spirit for industrial purposes, and the Chancellor of the Exchequer spoke of the need for freeing these raw materials from taxation. All those sentiments found a very hearty response from us on this side; but if that is so, why should we penalise spirits that come from some quarters, which may be the most productive quarters, in the interest of some other places? The thing is essentially a raw material of raw materials, and I commend this Amendment to the House in the interests of the industry of the country.

I do not propose to say more than a word or two on the Amendment. It is one which I should expect the hon. and gallant Gentleman to bring before the notice of the House. Indeed, the principle of this Amendment has been argued ad nauseam on previous occasions, and on the present one I do not think there is anything more to be said. There are very few articles indeed on which we are able to give a preference to the Dominions, and it would be extremely unfortunate in regard to an industry which has every chance of growing up in certain parts of our Empire were we not to take the opportunity of giving it every encouragement in our power, and, accordingly, I am afraid I am not able to accept the Amendment.

I am at a loss to understand where we are. I have listened to the speech made by the hon. Baronet the Member for Twickenham (Sir W. Joynson-Hicks) as to the enormous need of this new spirit for industrial purposes. He pointed out what was happening, and how much users of it required it in both ways. My hon. Friend the Member for West Walthamstow (Mr. Jesson) said the British colonies could make a great deal of it, if they got the opportunity, out of the waste products of sugar. Then the Chancellor of the Exchequer gets up and says "No, the only way I am going to help is by putting a duty on that spirit if it comes from any other place than the colonies." It is not coming from the colonies in any quantity, as I understand—if it is, I should like the Chancellor of the Exchequer to tell us. My hon. Friend who supports the Chan- cellor of the Exchequer says we want it for our industries. Then, in the name of common sense, if you require it, why put a duty on it, wherever it is coming from? That is a perfectly sound argument, and one to which I should like to hear a reply. How can you reconcile the contention that British industry needs it and the colonies can provide it, with saying that industries must be prevented from getting it by putting on a duty, from wherever it comes, until the colonies; can make it? This is commercial finance run mad, and if we go to a Division, I shall support the Amendment.

I think the House is entitled to a little more explanation on this subject. As the matter now stands, imported spirit is to come from the Dominions free of duty, but from other parts it is to be taxed.

What would be the ultimate effect of this particular Clause? The Dominions may be encouraged to develop this particular industry, but at whose expense? Who will pay for the development of this industry? Who will pay for the development of this industry in Mesopotamia? It will be the industry of Great Britain which will be taxed to pay, because at present the price here is determined by the price of the imported spirit which comes from the Colonies and from America; and therefore for spirits which come from Mesopotamia or from our Dominions the price charged will be the price presently being charged for imported spirits from abroad, and, therefore, if this is passed, industry will be taxed, or rather will pay more, for the spirit it requires, and the fortunate shareholders of oil companies or other companies in those distant parts will receive the benefit. I think that will be the ultimate result of this particular Clause. It may be that it is the intention of the. Government to encourage the development of those far distant parts at the expense of the British producer, but when we think of the heavy charges falling on every inhabitant of Great Britain, surely the time has come when this country should say quite distinctly, "Although we are anxious to encourage the develop- ment of those Dominions overseas, it must not be at the expense of industry or even at the expense of the inhabitants of this country."

Question put, "That the words proposed to be left out stand part of the proposed Clause."

The House divided: Ayes, 223; Noes, 68.

Division No. 254.]

AYES.

[5.15 p.m.

Agg-Gardner, Sir James Tynte

Hamilton, Major C. G. C.

Palmer, Brigadier-General G. L.

Amery, Leopold C. M. S.

Hannon, Patrick Joseph Henry

Pearce, Sir William

Armitage, Robert

Harmsworth, C. B. (Bedford, Luton)

Peel, Col. Hn. S. (Uxbridge, Mddx.)

Armstrong, Henry Bruce

Harris, Sir Henry Percy

Pennefather, De Fonblanque

Ashley, Colonel Wilfrid W.

Henderson, Major V. L. (Tradeston)

Perkins, Walter Frank

Baird, Sir John Lawrence

Hennessy, Major J. R. G.

Perring, William George

Baldwin, Rt. Hon. Stanley

Hewart, Rt. Hon. Sir Gordon

Philipps, Sir Owen C. (Chester, City)

Banbury, Rt. Hon. Sir Frederick G.

Hilder, Lieut.-Colonel Frank

Pinkham, Lieut.-Colonel Charles

Barnes, Rt. Hon. G.(Glas., Gorbals)

Hills, Major John Waller

Pollock, Sir Ernest Murray

Barnston, Major Harry

Hinds, John

Pownall, Lieut.-Colonel Assheton

"Beauchamp, Sir Edward

Hoare, Lieut.-Colonel Sir S. J. G.

Pratt, John William

Bell, Lieut.-Col. W. C. H. (Devizes)

Hohier, Gerald Fitzroy

Purchase, H. G.

Bellairs, Commander Carlyon W.

Holbrook, Sir Arthur Richard

Raeburn, Sir William H.

Benn, Sir A. S, (Plymouth, Drake)

Hope, Sir H.(Stirling & Cl'ckm'nn. W.)

Raper, A. Baldwin

Bennett, Sir Thomas Jewell

Hope, Lt.-Col. Sir J. A. (Midlothian)

Rawlinson, John Frederick Peel

Bethell, Sir John Henry

Hopkins, John W. W.

Reid, D. D.

Betterton, Henry B.

Hopkinson, A. (Lancaster, Mossley)

Remnant, Sir James

Bird, Sir A. (Wolverhampton, West)

Horne, Sir R. S. (Glasgow, Hillhead)

Renwick, Sir George

Blair, Sir Reginald

Hunter, General Sir A. (Lancaster)

Richardson, Alexander (Gravesend)

Boscawen, Rt. Hon. Sir A. Griffith-

Hurd, Percy A.

Roberts, Samuel (Hereford, Hereford)

Bowles, Colonel H. F.

Hurst, Lieut.-Colonel Gerald B

Roberts, Sir S. (Sheffield, Ecclesall)

Bowyer, Captain G. W. E.

Jellett, William Morgan

Rodger, A. K.

Brassey, H. L. C.

Jesson, C.

Roundell, Colonel R. F.

Breese, Major Charles E.

Jodrell, Neville Paul

Samuel, A. M. (Surrey, Farnham)

Broad, Thomas Tucker

Jones, Sir Edgar R. (Merthyr Tydvil)

Samuel, Rt. Hon. Sir H. (Norwood)

Brown, T. W. (Down, North)

Jones, Sir Evan (Pembroke)

Sanders, Colonel Sir Robert Arthur

Bruton, Sir James

Jones, J. T. (Carmarthen, Llanelly)

Sassoon, Sir Philip Albert Gustave D.

Buchanan, Lieut.-Colonel A. L. H.

Joynson-Hicks Sir William

Scott, A. M. (Glasgow, Bridgeton)

Buckley, Lieut.-Colonel A.

Kellaway, Rt. Hon Fredk. George

Seddon, J. A.

Bull, Rt. Hon. Sir William James

Kelley, Major Fred (Rotherham)

Seely, Major-General Rt. Hon. John

Burn, Col. C. R. (Devon, Torquay)

King, Captain Henry Douglas

Shortt, Rt. Hon. E. (N'castle-on-T.)

Butcher, Sir John George

Lambert, Rt. Hon. George

Smith, Sir Malcolm (Orkney)

Casey, T. W.

Lloyd, George Butler

Smithers, Sir Alfred W.

Cecil, Rt. Hon. Evelyn (Birm.. Aston)

Lloyd-Greame, Sir P.

Sprot, Colonel Sir Alexander

Chamberlain, Rt. Hn. J. A. (Birm. W.)

Locker-Lampson, G. (Wood Green)

Stanier, Captain Sir Beville

Child, Brigadier-General Sir Hill

Lowther, Col. Claude (Lancaster)

Stanton, Charles Butt

Clay, Lieut.-Colonel H. H. Spender

Lowther, Maj.-Gen. sir C. (Penrith)

Stevens, Marshall

Clough, Sir Robert

Lyle, C. E. Leonard

Stewart, Gershom

Coats, Sir Stuart

M'Connell, Thomas Edward

Sturrock, J. Leng

Colfox, Major Wm. Phillips

M'Donald, Dr. Bouverle F. P.

Sugden, W. H.

Colvin, Brig.-General Richard Beale

Macdonald, Rt. Hon. John Murray

Surtees, Brigadier-General H. C.

Craig, Captain C. C. (Antrim, South)

Mackinder, sir H. J. (Camlachie)

Taylor, J.

Craik, Rt. Hon. Sir Henry

McLaren, Hon. H. D. (Leicester)

Terrell, George (Wilts, Chippenham)

Croft, Lieut.-Colonel Henry-Page

McMicking, Major Gilbert

Terrell, Captain R. (Oxford, Henley)

Curzon, Captain Viscount

Macpherson, Rt. Hon. James I.

Thomas, Sir Robert J. (Wrexham)

Davidson, J. C. C. (Hemel Hempstead)

Maddocks, Henry

Thomson, F. C. (Aberdeen, South)

Davits, Alfred Thomas (Lincoln)

Malone, Major P. B. (Tottenham, S.)

Thomson, Sir W. Mitchell- (Maryhill)

Denniss, Edmund R. B. (Oldham)

Manville, Edward

Tryon, Major George Clement

Doyle, N. Grattan

Marriott, John Arthur Ransome

Turton, Edmund Russborough

Du Pre, Colonel William Baring

Martin, A. E.

Waddington, R.

Edwards, Major J. (Aberavon)

Mason, Robert

Ward, Col. L. (Kingston-upon-Hull)

Elliot, Capt. Walter E. (Lanark)

Matthews, David

Waring, Major Walter

Elveden, Viscount

Mildmay, Colonel Rt. Hon. F. B.

Warner, Sir T. Courtenay T.

Evans, Ernest

Mitchell, Sir William Lane

Warren, Sir Alfred H.

Eyres-Monsell, Com. Bolton M.

Molson, Major John Elsdale

Watson, Captain John Bertrand

Fell, Sir Arthur

Mond, Rt. Hon. Sir Alfred Moritz

White, Col. G. D. (Southport)

FitzRoy, Captain Hon. Edward A.

Montagu, Rt. Hon. E. S.

Williams, C. (Tavistock)

Flannery, Sir James Fortescue

Moreing, Captain Algernon H.

Williams, Lt.-Col. Sir R. (Banbury)

Ford, Patrick Johnston

Morison, Rt. Hon. Thomas Brash

Williams, Col. Sir R. (Dorset, W.)

Foreman, Sir Henry

Morris,- Richard

Willoughby, Lieut.-Col. Hon. Claud

Foxcroft, Captain Charles Talbot

Morrison, Hugh

Wilson, Col. M. J. (Richmond)

Frece, Sir Walter de

Munro, Rt. Hon. Robert

Wilson-Fox, Henry

Gardiner, James

Murchison, C. K.

Wise, Frederick

Gee, Captain Robert

Murray, Hon. A. C. (Aberdeen)

Wood, Hon. Edward F. L. (Ripon)

Gibbs, Colonel George Abraham

Murray, C. D. (Edinburgh)

Wood, Major Sir S. Hill- (High Peak)

Gilbert, James Daniel

Murray, Hon. Gideon (St. Rollox)

Woolcock, William James U.

Glyn, Major Ralph

Murray, William (Dumfries)

Worthington-Evans, Rt. Hon. Sir L.

Grant, James Augustus

Nail, Major Joseph

Yate, Colonel Sir Charles Edward

Green, Joseph F. (Leicester, W.)

Neal, Arthur

Young, E. H. (Norwich)

Greenwood, Colonel Sir Hamar

Newman, Sir R. H. S. D. L. (Exeter)

Young, Sir Frederick W. (Swindon)

Greer, Harry

Nicholson, Reginald (Doncaster)

Younger, Sir George

Greig, Colonel Sir James William

Nicholson, William G. (Petersfield)

Gretton, Colonel John

Norman, Major Rt. Hon. Sir Henry

TELLERS FOR THE AYES.—

Gritten, W. G. Howard

O'Neill, Major Hon. Robert W. H.

Colonel Leslie Wilson and Mr.

Hacking, Captain Douglas H.

Ormsby-Gore, Hon. William

Parker.

Hall, Rr-Adml Sir W.(LIv'p'I. W. D'by)

Palmer, Major Godfrey Mark

NOES.

Barker, G. (Monmouth, Abertillery)

Halls, Walter

Royce, William Stapleton

Barnes, Major H. (Newcastle, E.)

Hancock, John George

Sexton, James

Barton, Sir William (Oldham)

Hirst, G. H.

Short, Alfred (Wednesbury)

Bell, James (Lancaster, Ormskirk)

Hodge, Rt. Hon. John

Spencer, George A.

Benn, Captain Wedgwood (Leith)

Hogge, James Myles

Thomas, Rt. Hon. James H. (Derby)

Bowerman, Rt. Hon. Charles W.

Holmes, J. Stanley

Thomas, Brig.-Gen. Sir O. (Anglesey)

Bramsdon, Sir Thomas

Irving, Dan

Thomson, T. (Middlesbrough, West)

Bromfield, William

John stone, Joseph

Thorne, W. (West Ham, Plaistow)

Brown, James (Ayr and Bute)

Kennedy, Thomas

Tootill, Robert

Cape, Thomas

Kenworthy, Lieut.-Commander J. M.

Walsh, Stephen (Lancaster, Ince)

Carter, W. (Nottingham, Mansfield)

Kenyon, Barnet

Waterson, A. E.

Clynes, Rt. Hon. John R.

Kiley, James Daniel

Wedgwood, Colonel Josiah C.

Collins, Sir Godfrey (Greenock)

Lawson, John James

White, Charles F. (Derby, Western)

Cowan, D. M. (Scottish Universities)

Lunn, William

Wignall, James.

Edwards, C. (Monmouth, Bedwellty)

Maclean, Neil (Glasgow , Govan)

Williams, Col. P. (Middlesbrough, E.)

Edwards, G. (Norfolk, South)

Mills, John Edmund

Wilson, James (Dudley)

Galbraith, Samuel

Morgan, Major D. Watts

Wilson, W. Tyson (Westhoughton)

Glanville, Harold James

Murray, Dr. D. (Inverness & Ross)

Wintringham, Thomas

Graham, R. (Nelson and Colne)

Myers, Thomas

Wood, Major M. M. (Aberdeen, C.)

Griffiths, T. (Monmouth, Pontypool

Newbould, Alfred Ernest

Young, Robert (Lancaster, Newton)

Grundy, T. W.

Raffan, Peter Wilson

Guest, J. (York, W. R., Hemsworth)

Rendall, Atheistan

TELLERS FOR THE NOES.—

Hall, F. (York, W.R., Normanton)

Richardson, R. (Houghton-le-Spring)

Mr. G. Thorne and Mr. T. Shaw.

Hallas, Eldred

Roberts, Frederick O. (W. Bromwich)

Clause added to the Bill.

NEW CLAUSE.—(Provision with respect to duty on licences for male servants.)

(1) A person shall not be deemed to be a male servant for the purpose of the duty charged on male servants by The Revenue Act, 1869, notwithstanding that he is a male servant employed in one of the capacities specified in paragraph (3) of Section nine of the 6aid Act as amended by Section five of The Customs and Inland Revenue Act, 1876, and Section thirteen of The Motor Car Act, 1903, unless the employment in that capacity is also employment in a personal, domestic, or menial capacity.

(2) This Section shall come into operation on the first day of January, nineteen hundred and twenty-two.—[ Sir R. Here. ]

Brought up, and read the First time.

I beg to move, "That the Clause be read a Second time,"

The purpose of this Clause is to bring into consonance the law relating to male servants in England and Scotland, and to do away with difficulties as to who should be included in the term "male servants." In particular, it gets rid of the grievance which has been felt by many people in Scotland that the janitors attached to educational institutions such as the Heriot Watt College, Edinburgh, and people associated with the county councils should have been included in Scotland under the term "male servants." The effect of this Amendment will be to take these officials out of the category of servants and to exempt their employers from the tax in respect of them.

I have been associated with the hon. Member for North Edinburgh (Mr. Ford) in asking the Chancellor of the Exchequer to make such concession, and, accordingly, I think it only proper to thank him for having made it. 1 understand from the explanation of the right hon. Gentleman that the words "personal, domestic or menial capacity" are not held, according to the term, to include the janitors in these establishments. If that is the case, it satisfies the point we brought forward, and I thank him.

Having had the definite assurance that these words will not be construed in any way to interfere with the exemption of those mysterious persons called janitors, I agree with my hon. and gallant Friend opposite that we are perfectly satisfied, and I also desire to thank the Chancellor of the Exchequer.

I am not going to thank the Chancellor of the Exchequer. I do not know that there is much use in speech after speech associating hon. Members with thanks for one particular Amendment. I want to know what this Clause means. I have been trying to understand it, and I cannot for the life of me make out exactly what it does mean. It would be very much better in drafting these Amendments if they were framed so explicitly that they told us what is a male servant. There are references in this Clause to two or three other Acts, and I have taken the trouble to look at these to see exactly what this does mean. The Revenue Act, 1869, gives a long list—with which I will not weary the Chancellor or the House—as to who are and who are not male ser- vants. The Customs and Inland Revenue Act, 1876, limits the definition of male servants by making it obvious that the term only applies to the case of servants living inside. The Motor Car Act, 1903, extends that definition to servants who drive motor cars and presumably live in the house. I think I am correct so far in the interpretation of these three Acts. This Clause states that these people are not to be construed as male servants, "unless the employment in that capacity is also employment in a personal, domestic or menial capacity." It says "or" menial capacity, not "and." I would like to know the meaning of the word "menial." Why has such an adjective found its way into an Act of Parliament passed by this House? Why is any sort of labour so described? I do not know what my hon. Friends of the Labour party think of such an adjective used in this connection.

Then that brings us both in! The adjective is used as an alternative to both personal and domestic labour. The object of this Clause is to do a very simple thing, to exclude janitors in Scottish educational establishments for whom the Government have been charging tax. It seems to me, however, to raise a very much larger question and to put a new interpretation altogether upon service. The hon. Gentleman opposite shakes his head. I hope he will show me where I am wrong. Would it not be very much better to take the original list and add specifically the case of janitors rather than have this definition? I am afraid that this new Clause will create a much wider definition of male servants.

With regard to what the hon. Member opposite has said about previous Acts, the duty on male servants was not confined to those living in the house, but, on the contrary, servants living outside the house came within the definition. This proposal is not confined at all to people living within the house. The reason why I did not pursue the matter as suggested by my hon. Friend was that simply to add another list of exclusions would only raise issues affecting the smaller classes who are not enumerated in the particular definition, and it might result in a grievance to other servants. The difference between the Scottish and English Courts on this point would rather indicate the necessity of defining the matter, because the term "janitor" would not be included in the definition in the English Courts. I thought we ought to bring the two Courts into consonance, which would achieve the required object at the same time.

If this definition gives rise to any difficulty we can alter it afterwards. I agree that in common parlance the word "menial" has rather a derogatory suggestion, and one would not use it unless one was compelled. The reason I have used it is because that is the word the English Courts have used, and if you do not use the same word appearing in their judgments you give rise to a question as to whether it means the same thing. We want to get rid of that trouble. I went further than my hon. Friend (Mr. Hogge) in this matter, and I investigated the derivation of the word, and I find quite the contrary, that originally the word "menial" had no suggestion of anything derogatory. It comes from an old Anglo-Saxon word which conveys no sense of servility, and although we have attached a different significance to the word, I am compelled to use it because the English Judges have used it.

Question, "That the Clause be read a Second time," put, and agreed to.

Clause read a Second time, and added to the Bill.

NEW CLAUSE.—(Power to issue licences for mechanically-propelled vehicles for periods less than a year.)

(1) On and after the first day of January, nineteen hundred and twenty-two, licences under The Finance Act, 1920, in respect of mechanically-propelled vehicles (other than tramcars or vehicles on which a duty of five shillings is chargeable under that Act) may be taken out for such periods of the year and on payment of duty at such rates as the Minister of Transport may by order prescribe:

(2) Proviso ( a ) to Sub-section (2) of Section thirteen of The Finance Act, 1920, and the words "cycle or" in proviso ( b ) to the said Sub-section are hereby repealed.— [ Mr. Hilton Young. ]

Brought up, and read the First time.

I beg to move, "That the Clause be read a Second time."

This Clause has been introduced in order to redeem an undertaking given to the hon. Member for Twickenham (Sir W. Joynson-Hicks) by the Parliamentary Secretary to the Ministry of Transport. The state of affairs as regards the power to issue licences for mechanically propelled vehicles is that they can only be taken out at certain quarters of the year. This leads to much inconvenience to owners of motor cars, and it has been found possible to meet the user in this matter. What is proposed by this Clause is to make a licence in respect to the motor car issuable not only on the formal quarters, but for any, quarter of the year and for any broken part. It is further proposed to extend this new convenience to motor bicycles. That is the general purpose of this Clause. The rest of the provisions in the Clause are of a somewhat specially technical nature. The first Sub-section states how the duty for the broken period is to be calculated. That is in proportion to the part of the year and to the full rate of the duty. The second Sub-section is almost purely technical, and it is necessary to insert it on Report in order to make it impossible that there should be any increase in the charge on a certain limited class of vehicle, because had there been an increase a Money Resolution would have been required. The last Sub-section is necessary to secure the full extension of the concession to motor bicycles.

I regret that no provision is being made under this Clause for persons who want to take out a licence for less than a quarter. I have been in communication with the previous Chancellor of the Exchequer on this matter, because there are certain persons, like naval officers, who frequently get a month's leave, or a period less than three months, who would like to take out a licence for a shorter period. It certainly is a grievance, and I am sorry the period is not being made less. You allow a man to take out a game licence for a couple of days, and there are shorter licences for other forms of sport. Many officers might want a motor licence for a shorter period, and I regret their case has not been considered. After the Clause has been passed I hope the right hon. Gentleman will permit some simplification of it.

I rise to thank my right hon. Friend the Minister of Transport for having put down this Clause. I have only one observation to make upon it. Under the Clause the full annual duty spread over the monthly or quarterly period has to be

"no less proportion than the period for which the licence is taken out bears to a year."

That might leave it to the Minister of Transport to charge an inordinate percentage for three months, seven months or eight months. My original proposal was that the licence should be in proportion to the annual duty, and if it was six months the duty should be six-twelfths, and if eight months, eight-twelfths. I know it will cost the Treasury a little more to issue these licences for the broken period, but I want to ask when the Regulations are being framed that they will not make it an unduly heavy penalty, but only impose just as much as is necessary to cover the extra cost.

I assure my hon. Friend that there is no danger of this provision being used as a means of increasing the licence duty in these cases at all. The reason of giving power to make some increase in respect of the broken period is to meet the slightly increased expense involved. With regard to what the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) has said, I cannot say what the policy of the Minister of Transport may be on this subject. There is no specific limitation for any special period.

Is this not a very clumsy way of doing what the Government intend? In Sub-section ( b ) a reference is made to Sub-section (2) of Section 13 of the Finance Act, 1920. Then that Subsection is immediately repealed. Is it necessary to state what the Government mean by first of all referring to Subsection 2 of the Act, and then in the succeeding paragraph repealing it? What is the object of making it difficult to find out what one ought to do? The Clause is intended to give power to issue licences for mechanically-propelled vehicles for periods less than a year. Under Sub-section (2) of Section 13 of the Finance Act, 1920, it is provided that

"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 5s. is chargeable under this Section) for one quarter of the year only beginning on the first day of January, the 25th day of March, the 1st day of July, or the 1st day of October, and in the case of any licence so taken out the duty shall be 30 per cent, of the full annual duty."

Why cannot you make it plain to a poor man who owns a bicycle or a car what he has to do? You say in paragraph ( a ) of this Clause that the duty shall be—

"no less proportion than the period for which the licence is taken out bears to a year."

He is referred to Sub-section (2) and he has, of course, to turn it up in another Act of Parliament, and he finds that that deals with sidecars, tramcars, and other vehicles. But you immediately repeal that Sub-section in this new Clause. The Government ought to have given hon. Members some time to read the Clause through and to suggest Amendments. If what the Government propose to do is to issue licences for a less period than a year, they should say so. This simply proposes to repeal a Sub-section of another Act, and in the new Finance Bill of 1921 to embody nine lines of this White Paper, which are inserted to refer to a given Sub-section, and then merely to repeal it, seems to me legislation gone mad.

Question, "That the Clause be read a Second time," put, and agreed to.

Clause read a Second time.

I think the Amendment which the hon. and gallant Member for Central Hull has handed in is in order.

I beg to move, in Sub-section (1, b ), to leave out the words "to which proviso ( a ) to Sub-section (2) of Section thirteen of the Finance Act, 1920, applies for any such period as is mentioned in that proviso," and to insert instead thereof the words "for one quarter of the year beginning the first day of January, the twenty-fifth day of March, the first day of July, and the first day of October."

I am sorry to have to move an Amendment in manuscript form. I apologise to the House for having to do so, but hon. Members will understand that this new Clause only appeared on the Order Paper for the first time this morning, and it was consequently impossible to put Amendments down. Paragraph ( b ) of Subsection (1) of this new Clause is altogether unintelligible. I would like to know what hon. Members can be expected to make of these words: That is clear. I defy any ordinary man who is in doubt as to what licence he should take out, to make head or tail of the Clause as proposed by the Government. I am glad the Parliamentary Secretary to the Ministry of Transport is here, and I hope the Financial Secretary to the Treasury will explain to him the point I am raising. It is, after all, purely a matter of drafting, it does not alter what I conceive to be the sense of the Government proposals, and it makes the thing clear to the ordinary person.

Appreciating fully the desire of the hon. and gallant Member to assist, I am afraid what he proposes would not prove very helpful. As the Clause stands, it is clear, but as he proposes to alter it, it would not effect the purpose for which it is designed, and such purpose could not be achieved indeed by any such simple form of words. I gave a very brief explanation of what our desire is in moving the Clause, but I am afraid it did not reach the hon. and gallant Member. The object of the. Clause is simply and solely to protect certain classes of users of these vehicles, and it makes it possible to impose under certain circumstances additional duty in order to meet certain charges. These two classes referred to in Sub-section (3) are persons who take out licences for mechanically-propelled vehicles (other than a cycle, tramcar, etc.), for which they pay a maximum charge of 30 per cent., and the second class are cycle and tramcar licences taken out for the last quarter of the year only, in which case a maximum charge of 50 per cent, is imposed. This is the purpose which the Clause must serve if it is to be in order. I am sorry to say that the clear phraseology introduced in the Amendment of the hon. and gallant Member would not effect that purpose, and we therefore cannot accept his proposal. I hope the House will accept our Clause. There is no unduly involved phraseology in it really, and it is the only way it can be made to achieve a rather technical purpose.

Question, "That the words proposed to be left out stand part of the proposed Clause," put, and agreed to.

Clause added to the Bill.

NEW CLAUSE.—(Belief from Customs duty in case of articles containing spirits if certified by Board of Trade to be essential to British industries.)

(1) If the Board of Trade certify that any article, being an article which contains spirits as a part or ingredient thereof, is essential for the carrying on of some specified art or manufacture, and that it is desirable in the interests of trade that persons carrying on that art or manufacture in Great Britain or Ireland should be enabled to receive that article either without any payment of the duty of Customs otherwise chargeable thereon or on payment in lieu of that duty of a lesser sum, as hereinafter provided, the Commissioners of Customs and Excise may, if they think fit, at any time while the certificate is in force, authorise any person, subject to such conditions as to security or otherwise as they think necessary for the protection of the revenue, to receive that article for the purpose of being used in the said art or manufacture, in the case of an article consigned from and produced or manufactured in the British Empire without payment of any duty, and in the case of any other article on payment of a sum; equal to the difference between the duty of Customs payable on the importation of the article and the duty of Customs which would be payable on the article if it had been, consigned from and produced or manufactured in the British Empire.

(2) A certificate issued by the Board of Trade under this Section with respect to any article may be revoked by the Board at any time, without prejudice to the power of the Board thereafter to issue another certificate with respect to the same article.— [ Mr. Hilton Young. ]

Brought up, and read the First time.

I beg to move, "That the Clause be read a Second time.'

6.0 P.M.

It has been put down by my right hon. Friend with a limited purpose which might nevertheless be capable of certain interesting developments. There is an anomaly in our existing law as regards import Customs duty on the importation of articles containing spirits. Under that law, if the articles are for use in arts and manufactures, and if the spirit introduced in them is pure spirit, then they can be exempted from Customs duty. But if, on the other hand, the articles are such that they are mixtures, and contain other substances, they cannot obtain exemption from the high import Customs duty. This inequality in the existing provisions as regards our Customs law has been found to work with great inconvenience and to the detriment of trade in certain directions. There are certain spirit mixtures which enter this country from foreign countries that are necessary raw material for certain manufactures in this country, and there are some of these spirit mixtures which are produced by secret processes unknown in this country. I may give one instance, a substance which is called pyroxylin, a necessary ingredient in the manufacture of patent leather. It is a mixture containing spirit, but the secret process of manufacture is unknown in this country. In these circumstances the manufacture of patent leather cannot be carried on unless a supply of pyroxylin is is obtained from abroad. Owing to this imperfection in our Customs law—and we practically get all the supply from abroad—the Customs duty is so heavy that if the ingredient used for the manufacture of patent leather in this country in competition with foreign manufactures, the cost of production here becomes prohibited. Owing to that circumstance, the heavy Customs duty practically excludes this raw material needed for the manufacture of patent leather, and although the industry has been started in this country, it has been found to be foredoomed to failure. The purpose of this Clause is to remove that hindrance from the path of industry, and at does it in this manner. It takes power when a strong case is made out for the necessity for the import of such an article to free it altogether from the weight of the import duty on spirits. The machinery provided is that there shall be a certificate from the Board of Trade that the article in question, containing an admixture of spirit, is essential to the carrying on of the specified manufacture; and there is the further provision that it is desirable in the interests of trade that manufacturers in this country shall be able to receive the article free of duty. It will also be seen that later in the Clause there i? a provision whereby the general scheme of Imperial Preference, as dealt with in this Finance Bill, is maintained intact, so that the whole weight of the spirit duty is removed from an article essential to the carrying on of an industry in this country except the 2s. 6d. per gallon which is the preferential duty upon spirits. This Clause has been pressed for, not only by those engaged in the particular industries to which I have referred, but by others who are well acquainted with the potentialities of development in other industries. It will serve a useful purpose in removing an unnecessary hindrance to development in the industries to which I have referred, and possibly in others in the future, and for that purpose I commend it to the House.

I am not quite sure if I have thoroughly grasped the effect of this new Clause. I do not know whether it is a Free Trade Clause, a Protectionist Clause, or a Fair Trade Clause, but, as far as I can make out, it gives to the Government—or rather, to a Department of the Government, namely, the Board of Trade—the power to say, "The House of Commons has imposed a tax upon a certain article. In our opinion it would be advisable if this tax were not imposed, or if its amount were reduced, because certain people have been to us and have told us that it is necessary to have this article for the purposes of their trade; and therefore, without going to the House of Commons, who at our suggestion have put a tax on that article, we think that that tax ought to be reduced.' Without coming to the House of Commons, the Board of Trade can themselves say whether certain people are or are not to pay the duty. That is putting the whole of the taxation into the power of a Government Department. Where are you going to draw the line? The Clause refers to "an article which contains spirits as a part or ingredient thereof," but I presume that every hon. Member of this House gets, like myself, by almost every post, letters from constituents or trade associations pointing out that their particular trade requires the admittance of articles free of tax, or that their particular trade is a key industry, and that articles competing with it should have a tax put upon them. Between those two alternatives, I have always thought myself that the only possible line was to put a tax upon all articles. That seems to be the logical conclusion. The Government, however, have not done that; they have simply put taxes on certain articles; but there is a very strong feeling amongst many people that their particular article should be. excluded from those taxes, and now we begin to make excuses.

In the case of spirits, to begin with, we see that there are certain people who desire to have spirits for the purposes of manufacture, and if they can persuade the Board of Trade that it is necessary that they should have those spirits, either with less duty or free of duty, at once everyone else will ask why should they not be treated in the same way. And what is the answer? It is not necessary to claim that these articles are necessary for use in war. I did not hear the Financial Secretary say that, although it might have been some sort of argument. If that argument is not available, what is an hon. Member to say when a constituent says to him, "My trade requires the admission of a certain article free of tax; you have given it to a rival of mine, who is making something for which he requires spirit; I require iron ore, or some other article, and I do not see why, if my rival has this privilege, I should not have it also, and I require you, unless you desire to lose my vote at the next election, to ask the Government to see that my particular trade gets the same attention as is given under this new Clause." What is the answer?

My hon. Friend says there is no answer, and there really is none. The President of the Board of Trade, at my suggestion, put into the Safeguarding of Industries Bill a Clause which provided that no tax should be imposed without a Resolution of this House, and having enacted that, we now say that after this House has imposed a tax a Government Department shall be able to abrogate it. I am not sure that that is not worse than imposing it. The Board of Trade at the present moment is a very good Department, and the President of the Board of Trade is an excellent person, but we do not know that he is always going to be there. Five years hence, or ten years hence, he may not be President of the Board of Trade. I venture to say that we are doing a very wrong thing if we put it into the power of officials or of a Government Department, whoever they may be, to grant favours to certain people. The moment you do that, you open the door to corruption. It may not occur, and I do not say that it would, at the head, but it comes up through the bottom. Someone gets hold of some person in the office to see that a letter gets to the right quarter. Matters of that sort are certain to occur. 1 sincerely trust, much as it would pain me to vote against the Government, that the House will not accept this Clause.

There has been a good deal of talk about involved and ambiguous Clauses, but it took me some time to realise that this Clause would cover a new Clause which I put down with reference to pyroxylin. I must thank the Chancellor of the Exchequer for this Clause, and, now that I understand it as it has been explained by the Financial Secretary to the Treasury, I find that it does cover my wish as expressed in the new Clause which I have put down. I should, however, like to say as a demurrer that I think it is asking too much of hon. Members of thi3 House, and even of business men, to try to work out the meaning of a Clause of 200 words without a full stop. I spent a whole day trying to find out what it meant, and the impression that I got after reading this long involved sentence was as though a breathless school-child had run into the room to say that her little brother had fallen into a pond. One does not know where it starts or where it ends. What has been said by the right hon. Baronet the Member for the City of London with regard to favouritism might apply to this Clause, but, so far as pyroxylin is concerned, there is an anomaly. I take it that the intention of the Government is that this Clause shall apply to pyroxylin. I do not think that the manufacture of pyroxylin is a secret process, although the Financial Secretary said it was. It is made by the action of sulphuric acid and nitric acid upon cotton waste, the product being then dissolved in ether and alcohol. If pyroxylin comes in from abroad in one receptacle and in the same ship there is a case of undressed calf-skins, the pyroxylin will pay duty and the calf-skins will not. But if the pyroxylin comes in applied to the calf-skins in the form of patent leather—it is the varnish which makes the "patent" on the leather—no duty is paid upon it. This is an anomaly, and, although I agree in the main with what the right hon. Baronet said, in this instance a case can be made out for exempting pyroxylin from the operation of the Customs duty, and I think that that is what is intended by this Clause. I notice, however, that there are a good many hypotheses—

I hope the hon. Member will forgive me for interrupting him, but I did not catch exactly what it was that he thought ought to be exempted. I understood him to say that it was something used in the preparation of leather.

Then does not that strengthen my argument? My hon. Friend, I understand, is interested in leather. He wants something exempted which is going to be of use to him, and other persons interested in other things will require the same.

I will show the right hon. Baronet how it applies. If a certain volume of pyroxylin—which is the film that is put on the calf-skins—is put into a ship, and in the same ship you put calfskins, and bring the two here, duty is paid on the pyroxylin. But if it happens that you bring in the pyroxylin and the calf-skins together in the form of finished leather no duty is payable. If you bring in the pyroxylin in a bottle, or whatever it may be, and let a man in this country put it on the leather, employment is given to that man; but by keeping a duty on it you make it necessary to bring in the two materials as one, in which case labour would not be employed in this country. I agree with what the right hon. Baronet has said about favouritism and about one trade asking for an advantage which another has got, but in this case I think there is something that should be put right. From the last few words of Sub-section (1) of the Clause, I understand that, if the pyroxylin comes from any of our Dominions or Colonies, no duty will be charged upon it, but that if it comes from a foreign country there will be a surcharge of 2s. 6d. per gallon. That, of course, is the principle of Imperial Preference, and I am all for it, but I hope the right hon. Gentleman in charge of the Bill will make that clear to us. The Clause says that on the certificate of the Board of Trade the Commissioners of Customs and Excise may, if they think fit, and subject to such conditions as to security or otherwise as they think necessary, allow the article to be received without payment of duty. It seems to me that there are a great many fences to get over before you get home, and it appears to me that if the authorities should wish to make themselves obstructive they have every opportunity of doing so. With regard to the use of the word "Excise," I presume it is intended that, if this material can be made without any secret process in this country, an Excise Duty will not be put upon it, because, of course, if an Excise Duty were put upon it in this country, a preference would be given to the foreign-made product. Provided that that is not to be done, I think that the Clause will be highly acceptable to the leather trade, and I am very much obliged to the Chancellor of the Exchequer for it.

My mind is always open to reason, and as it is perfectly clear that this Clause is agreeable neither to those who desire legislation in connection with pyroxylin nor to those engaged in other industries, I would ask leave of the House to withdraw it.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Exemption from Income Tax in respect of lands owned and occupied by charities and of profits of trades carried on by beneficiaries of charities.)

(1) Exemption shall be granted—

(2) The exemption granted by paragraphs ( a ) and ( b ) of Sub-section (1) of this Section shall not extend to tax in respect of any rent payable or other annual payment to be made by a charity in respect of the lands, tenements, hereditaments, or heritages, or to any part of those lands, tenements, hereditaments, or heritages which are in the use and enjoyment of a person whose total annual income from all sources, estimated in accordance with the provisions of the Income Tax Acts amounts to not less than one hundred and fifty pounds.

(3) In this Section the expression "charity" means any body of persons or trust established for charitable purposes only.—[ Sir R. Horne. ]

Brought up, and read the First time.

I beg to move "That the Clause be read a Second time."

This Clause has been drafted to meet a case presented to the Committee on the question of charities. Undoubtedly the taxation upon charities at present is of a very anomalous character. The hon. and learned Gentleman (Mr. Inskip) pointed out the extraordinary fact that while a charity escapes taxation upon lands which it lets, it does not escape taxation on land which it itself occupies. Again, the hon. and learned Gentleman (Mr. Rawlinson) pointed out that there were many deserving charities, for instance, organisations which provide playing fields in congested districts in London, which are subject to taxation under very extraordinary circumstances. I have endeavoured in this Clause to meet the various considerations which have been presented by many hon. Members, and I think I have covered all the cases which were raised.

I wish to thank the right hon. Gentleman for meeting what I think the Committee agreed was a great anomaly in the matter of playing fields. I have not been able to lay it before those interested in the matter, but as far as I can see it exactly meets our case. That being so, I shall not move the subsequent Clause which appears in my name. I gather this new Clause will exempt such societies entirely from Income Tax. I do not think it will mean the slightest loss of revenue, because I know quite well that there are a large number of these playing fields which are doing good work around London which would certainly have to shut up this year, and the municipalities would have to open playing fields in the neighbourhood at great expense to the rates. The cost will certainly be saved over and over again to the municipal rates. I can instance a case where the Goldsmiths gave land and we have to pay in Income Tax and rates 20s. in the value of the land. People will not do that. I hope land will in future come in free for this excellent object.

I am entirely in sympathy with what my hon. and learned Friend says, but I should like to know what amount of revenue the Chancellor of the Exchequer expects to lose by this concession.

I cannot tell the exact figure. I will try to get it.

Question put, and agreed to.

Clause read a Second time, and added to the Bill.

NEW CLAUSE.—(Amendment of Rule 3 (c) of the Rules applicable to Cases I and II of Schedule D.)

The proviso to paragraph ( c ) of Rule 3 of the Rules applicable to Cases I and II of Schedule D in The Income Tax Act, 1918, shall have effect as though the words "shall not, unless in any particular case the Commissioners are of opinion that, having regard to all the circumstances, some greater sum ought to be deducted, exceed two-thirds" were therein substituted for the words "shall not exceed two-thirds."—[ Sir R. Horne. ]

Brought up, and read the First time.

I beg to move, "That the Clause be read a Second time."

This Clause is to meet an objection which was raised by the hon. Member (Mr. G. Locker-Lampson) to the present allowance for rent of premises in connection with the assessment of Income Tax. At present the allowance to be made shall not exceed two-thirds of the rent of the premises. The Clause provides that it shall be open to the Commissioners, if they are of opinion that a greater sum ought to be deducted, to make an allowance exceeding two-thirds.

I thank the right hon. Gentleman for the concession.

Question put, and agreed to.

Clause read a Second time, and added to the Bill.

NEW CLAUSE.—(Exemption of superannuation funds from Income Tax.)

(1) Subject to the provisions of this Section and to any regulations made thereunder, exemption from Income Tax shall be allowed in respect of income derived from investments or deposits of a superannuation fund, and, subject as aforesaid, any sum paid by an employer or employed person by way of contribution towards a superannuation fund shall, in computing profits or gains for the purpose of an assessment to Income Tax under Case I or Case II of Schedule D or under Schedule E, be allowed to be deducted as an expense incurred in the year in which the sum is paid:

(2) Income Tax chargeable in respect of an annuity paid out of a superannuation fund to a person residing in the United Kingdom shall, if the Commissioners so direct, be assessed and charged on the annuitant under Case VI of Schedule D instead of being deducted and accounted for under Rule 21 of the General Rules, and tax shall be computed on the full amount of the annuity arising in the year of assessment.

(3) For the purposes of this Section the expression "superannuation fund" means, unless the context otherwise requires, a fund which is approved for those purposes, by the Commissioners, and, subject as hereinafter provided, the Commissioners shall not approve any fund unless it is shown to their satisfaction that—

(4) The Commissioners may make Regulations generally for the purpose of carrying this Section into effect and, in particular, without prejudice to the generality of the foregoing provision, may by such Regulations—

(5) Where at the commencement of this Act there is in force any arrangement between the Commissioners and the persons having the management of a superannuation fund, by which provision is made for allowing any such deductions for the purpose of Income Tax as may be allowed for that purpose under this Section, the arrangement shall, if the fund is approved as a superannuation fund for the purposes of this Section for the year nineteen hundred and twenty-one-twenty-two, be deemed to have ceased to operate as from the sixth day of April, nineteen hundred and twenty-one, and if the fund is not so approved shall cease to operate as from the sixth day of April, nineteen hundred and twenty-two.

(6) In this Section the expression "the Commissioners" means the Commissioners of Inland Revenue.—[ Sir R. Horne. ]

Brought up, and read the First time.

I beg to move, "That the Clause be read a Second time."

This Clause proposes to exempt from tax contributions made by employers and employés to superannuation funds, and, further, the interest or return from investments of superannuation funds. The Inland Revenue authorities have in fact been accustomed to grant allowances in respect of contributions of employers and employés to superannuation funds, but it has never before formed part of an enactment. This would be effected by the proposed Clause. There is, moreover, added for the first time, both in fact and in practice, provision for the exemption from Income Tax of investments of superannuation funds. The rest of the Clause is directed to defining what superannuation funds are, and provides that the approval of the Commissioners must be required and the lines on which that approval is to be obtained.

Question put, and agreed to.

Clause read a Second time, and added to the Bill.

NEW CLAUSE.—(Amendment of s. 39 of 10 & 11 Geo. V, c. 18.)

Section thirty-nine of the Finance Act, 1920 (which increases the Stamp Duty on statements as to the capital of companies from five shillings to one pound for every one hundred pounds), shall have effect and be deemed always to have had effect as though the following Sub-section were inserted at the end thereof:—

(3) If it is proved to the satisfaction of the Commissioners of Inland Revenue, in the case of a company which was registered or otherwise incorporated, or of an increase of capital which was authorised, on or after the twentieth day of April, nineteen hundred and twenty, and before the fourth day of May, nineteen hundred and twenty, that the formation of the company or the increase of capital, as the case may be, had been definitely decided upon before the thirty-first day of January, nineteen hundred and twenty, and that the formation of the company or the authorisation of the increase was temporarily not proceeded with solely in order to comply with the request of His Majesty's Government that no public issue of capital should be made while the subscription lists for Five and three-quarter per cent. Exchequer Bonds, 1925, were open, the Stamp Duty chargeable on the statement of the nominal share capital of the company, or of the amount of the increase so authorised, as the case may be, shall, instead of being charged at the rate imposed by this Section, be charged at the rate in force before the passing of this Act.—[ Sir R.. Horne. ]

Brought up, and read the First time.

I beg to move, "That the Clause be read a Second time."

This proposal arises out of a somewhat curious incident which took place in connection with the issue of 5Âľ per cent. Exchequer Bonds in 1920. The Chancellor of the Exchequer at that time urged that no issue should be put upon the market while this issue of Exchequer Bonds was coming out. It has been represented that certain companies proposing to make an issue at that time kept it back, and for their patriotism they were subjected to a curious penalty. The Stamp Duty, which at that time was 5s. on each ÂŁ100 of capital issued, was raised by the succeeding Budget to 20s. per cent., and a very heavy Stamp Duty had thus to be paid by some of these companies which, if they had issued their capital at the time originally contemplated, they would never have been subjected to. The Committee was very much moved by the considerations presented to it, and I undertook to draft a Clause to meet these circumstances. It is that Clause which I now move.

Question put, and agreed to.

Clause read a Second time, and added to the Bill.

NEW CLAUSE.—(Amendment of Section 56 (1) of 10 and 11 Geo. V., c. 18.)

Sub-section (1) of Section fifty-six of The Finance Act, 1920 (which makes provision for the assessment and payment of Corporation Profits Tax), shall have effect as though there were inserted therein after the words "and shall" the words "unless the Commissioners otherwise direct."—[ Sir R. Horne. ]

Brought up, and read the First time.

I beg to move, "That the Clause be read a Second time."

It was pointed out in Committee that there might be the possibility of hardship under the Corporation Profits Tar if it is incumbent upon the taxpayer, even when he has made an appeal against the imposition of the tax, to make immediate payment of the tax. In practice the Inland Revenue does not use its power harshly. In point of fact, whenever the appeal is made on primâ facie substantial grounds the tax is not exacted. But evidently some apprehension was felt upon the matter, so I agreed to put in, on Report, a Clause which will meet that difficulty.

Question put, and agreed to.

Clause read a Second time, and added to the Bill.

NEW CLAUSE.—(Provision for cases where documents relating to Death Duties have been lost, destroyed, or damaged.)

(1) Where any document in the custody of the Commissioners relating to duty charged or chargeable in respect of any property has been lost or destroyed, or has been so defaced or damaged as to be illegible or otherwise useless, the Commissioners may require any person appearing to them to be accountable or to have accounted for that duty, to furnish to them to the best of his ability such information, particulars, and evidence, including evidence by affidavit, as they may require for replacing that document, and any person so appearing to be accountable shall be liable to discharge all claims in respect of that duty, unless he proves to the satisfaction of the Commissioners that those claims have already been discharged or that he is not accountable for the duty.

(2) The Commissioners shall have all such powers for the purpose of enforcing any requirement made by them under this Section as they had for the purpose of enforcing the delivery of the document which is to be replaced, and all statutory provisions in that behalf, including provisions as to penalties, shall apply accordingly with the necessary modifications.

(3) The Commissioners shall pay to any person complying with any requirement under this Section his reasonable cost of so doing, and if any question arises as to the amount so to be paid as costs the question shall be referred to and determined by a taxing master of the High Court, or in Scotland by the auditor of the Court of Session.

(4) Where the Commissioners are required by any person to issue any document certifying that any duty has been paid or is not payable, or to make any allowance in respect of any duty paid, or to do any act or thing consequent on the payment of duty, they may, where the evidence of the payment of or of non-liability to do duty has been destroyed, refuse, notwithstanding any enactment to the contrary, to comply with the requirement except on proof to their satisfaction that the duty has been paid or is not payable, or that the act or thing required to be done is in the circumstances reasonably necessary, as the case may be.

(5) Where the Commissioners declare that by reason of the loss, destructian, defacement, or damage of any document they are unable to certify that there is no claim for duty in respect of any property, a court may in any proceedings relating to that property, notwithstanding any enactment to the contrary, dispose of that property or the proceeds of sale thereof without making provision for the payment of any duty chargeable in respect thereof.

(6) In this Section, unless the context otherwise requires—

Brought up, and read the First time.

:I beg to move, "That the Clause be read a Second time."

This Clause arises out of an episode which I am sure is fresh in the mind of every member of the House. When the Dublin Customs House was burned recently, a very large number of documents was destroyed, and the authorities have been put in a position of very serious embarrassment. The Clause proposes that the Commissioners shall be entitled to call for a new return on the part of all those who are liable to pay death duty and whose cases come in question during the present period. It provides that a return may be exacted, but that any person who is put to any expense to himself shall be reimbursed. A further provision seeks to reproduce the machinery which is required in order to deal with certain specific provisions which occur in legislation on the Statute Book with regard to death duties, such as the certificate which the Commissioners must provide when properties subject to death duties have been sold, the death duties having, in point of fact, been paid. I am sure the House will see the necessity for this provision in view of the circumstances which have arisen and will accept the Clause.

:I have no doubt this Amendment is right, but it is a very difficult Clause to understand. Am I to understand that if it had not been for the burning of the Dublin Customs House it would not have been necessary?

:Is there no means of placing upon any other responsible parties the cost involved in replacing documents consequent upon the deplorable burning of the Dublin Customs House? As the Clause stands the British taxpayer will pay any increased cost that results from the necessity of having these documents signed or made over again. Is there no other party but the British taxpayer who can be called upon to make it good?

:It is very difficult to answer that question. Certainly there is no way of meeting the difficulty except in so far as the Home Rule Act has already been passed.

Question put, and agreed to.

Clause read a Second time, and added to the Bill.

NEW CLAUSE.—(Extension of s.61 of10 & 11 Geo. V, c. 18, to Corporation Profits Tax.)

Section sixty-one of the Finance Act, 1920 (which makes provision for cases where documents relating to certain taxes have been lost, destroyed, or damaged), shall apply to Corporation Profits Tax and to documents relating to Corporation Profits Tax as it applies to Excess Profits Duty and to documents relating to Excess Profits Duty.— [ Sir R. Horne. ]

Brought up, and read the First time.

:I beg to move "That the Clause be read a Second time."

This is an Amendment making provision in respect to lost documents connected with Corporation Profits Tax.

Question put, and agreed to.

Clause read a Second time, and added to the Bill.

NEW CLAUSE.—(Corporation Profits Tax.)

No Corporation Profits Tax shall be charged in the case of associations not for profit registered under Section twenty of The Companies Act, 1908, being associations formed as limited companies for promoting commerce, art, science, charity, or any other useful object, the profits, if any, being applied to promoting its objects and not to the payment of any dividend to its members. —[ Mr. Rawlinson. ]

Brought up, and read the First time.

:I beg to move, "That the Clause be read a Second time."

The companies or associations I refer to in the Amendment are those registered under Section 20 of the Companies Act, 1908, which are companies formed for some philanthropic purpose and have not the power to make any profit for themselves. The notable illustration is the Toynbee Hall. This is a well-known institution; and there is also the Crosby Hall and other similar institutions and colleges. A large number of women's colleges are in the same position. These institutions have the privilege of being incorporated but are not entitled to make any profit for themselves. There is the case of the Lister Institute for Research, which charges for its services in connection with research and devotes whatever profit it makes to the extension of its scientific work. These institutions have been encouraged to be formed for the purpose of promoting philanthropic objects, such as art, education, and scientific research, and have always been free from certain forms of taxation. I am certain that no hon. Member who voted in favour of the Corporation Profits Tax thought that that would be a charge upon institutions of the kind referred to. These institutions have the privilege of not calling themselves "limited," while ordinary companies registered under the Comanies Act have to call themselves "limited." It transpired, after taking legal opinion, that the profits of these institutions are liable to Excess Profits Duty, and when the matter was submitted to the Chancellor of the Exchequer he said that no doubt the legal opinion was right and that the profits of these companies were liable to the Corporations Profits Tax. Quite apart from the amount of money to be derived from the tax which, in many cases, would be very small, this tax causes an enormous amount of annoyance and expense to these bodies. They have to keep their accounts in somewhat different form. Anything that can be called profit they use not for division among the members, but for the purpose of meeting any deficit that may be incurred in the following year, or for the extension of research and other work in which they may be engaged. In the case of many of these bodies the amount of tax would be very small, but in the case of the Lister Institute it would be somewhat larger. I hope the Chancellor of the Exchequer will see his way to meet me in this matter.

:I beg to second the Motion, and I do so very heartily. The number of institutions affected by this Amendment is very large, although the amount of taxation to be derived from them is very small. These institutions will, however, be subject to considerable inconvenience unless the Amendment is accepted.

:This is obviously a University Clause, because it has been moved by my hon. and learned Friend opposite and supported by my hon. Friend below me, both of whom are University representatives. My hon. Friend the Member for Oxford City (Mr. Marriott) also seems very desirous of speaking in its support. Anything that is moved by my hon. and learned Friend (Mr. Rawlinson) finds in me a supporter, even if I do not understand it, and I do not

quite understand this Amendment. I agree that, the application of this tax is universally inconvenient, not only to university people, but to people who have to make their living out of that which is taxed, whereas the university people only carry on this work for philanthropic purposes. I should be inclined to submit that if this tax is to be altered it should be repealed entirely, so that nobody should be subject to inconvenience from it.

Question put, "That the Clause be read a Second time."

The House divided: Ayes, 105; Noes, 197.

Division No. 255.]

AYES.

[6.40 p.m.

Asquith, Rt. Hon. Herbert Henry

Hallas, Eldred

O'Grady, James

Barker, G. (Monmouth, Abertillery)

Halls, Walter

Perkins, Walter Frank

Barrand, A. R.

Hancock, John George

Ramsden, G. T.

Barton, Sir William (Oldham)

Hayward, Evan

Paper, A. Baldwin

Bell, James (Lancaster, Ormskirk)

Henderson, Major V. L. (Tradeston)

Reid, D. D.

Bottomley, Horatio W.

Hills, Major John Waller

Remnant, Sir James

Bowerman, Rt. Hon. Charles W.

Hinds, John

Rendall, Atheistan

Bowies, Colonel H. F.

Hirst, G. H.

Richardson, R. (Houghton-le-Spring)

Bramsdon, Sir Thomas

Hodge, Rt. Hon. John

Roberts, Frederick O. (W. Bromwich)

Bromfield, William

Hogge, James Myles

Royce, William Stapleton

Brown, James (Ayr and Bute)

Holmes, J. Stanley

Sexton, James

Buchanan, Lieut.-Colonel A. L. H.

Horne, Edgar (Surrey, Guildford)

Shaw, Thomas (Preston)

Cairns, John

Irving, Dan

Short, Alfred (Wednesbury)

Cape, Thomas

Johnstone, Joseph

Spencer, George A.

Carter, W. (Nottingham, Mansfield)

Jones, Henry Haydn (Merioneth)

Swan, J. E.

Clough, Sir Robert

Kennedy, Thomas

Thomas, Rt. Hon. James H. (Derby)

Clynes, Rt. Hon. John R.

Kenworthy, Lieut.-Commander J. M.

Thomas, Brig.-Gen. Sir O. (Anglesey)

Collins, Sir Godfrey (Greenock)

Kenyon, Barnet

Thomson, T. (Middlesbrough, West)

Cowan, D. M. (Scottish Universities)

Kiley, James Daniel

Thorne, G. R. (Wolverhampton, E.)

Craig, Captain C. C. (Antrim, South)

Lawson, John James

Thorne, W. (West Ham, Plalstow)

Craik Rt. Hon. Sir Henry

Locker-Lampson, G. (Wood Green)

Tootill, Robert

Davies, Alfred Thomas (Lincoln)

Lowther, Col. Claude (Lancaster)

Walsh, Stephen (Lancaster, Ince)

Edwards, C (Monmouth, Bedwellty)

Lunn, William

Waterson, A. E.

Edwards, G. (Norfolk, South)

Macdonald, Rt. Hon. John Murray

Wedgwood, Colonel Josiah C.

Elliot, Capt. Walter E. (Lanark)

Mackinder, Sir H. J. (Camlachie)

White, Charles F. (Derby, Western)

Fell, Sir Arthur

Maclean, Neil (Glasgow, Govan)

Wignall, James

Finney, Samuel

Maclean, Rt. Hn. Sir D. (Midlothian)

Williams, Aneurin (Durham, Consett)

Galbraith, Samuel

McMicking, Major Gilbert

Williams, Col. P. (Middlesbrough, E.)

Glanville, Harold James

Magnus, Sir Philip

Wilson, James (Dudley)

Graham, D. M. (Lanark, Hamilton)

Mallalieu, Frederick William

Wilson, Rt. Hon. J. W. (Stourbridge)

Graham, R. (Nelson and Colne)

Morgan, Major D. Watts

Wilson, W. Tyson (Westhoughton)

Graham, W. (Edinburgh, Central)

Murray, Dr. D. (Inverness & Ross)

Wood, Major M. M. (Aberdeen, C.)

Griffiths, T. (Monmouth, Pontypool)

Myers, Thomas

Young, Robert (Lancaster, Newton)

Grundy, T. W.

Newbould, Alfred Ernest

Guest, J. (York, W.R., Hemsworth)

Nicholson, Reginald (Doncaster)

TELLERS FOR THE AYES.—

Hall, F. (York, W.R., Normanton)

Norman, Major Rt. Hon. Sir Henry

Mr. Rawlinson and Mr. Mills.

NOES.

Adair, Rear-Admiral Thomas B. S.

Bentinck, Lord Henry Cavendish-

Colfox, Major Wm. Phillips

Adkins sir William Ryland Dent

Bird, Sir A. (Wolverhampton, West)

Colvin, Brig.-General Richard Beale

Agg-Gardner, Sir James Tynte

Boscawen, Rt. Hon. Sir A. Griffith-

Cory, Sir J. H. (Cardiff, South)

Ainsworth, Captain Charles

Bowyer, Captain G. W. E.

Davidson, Major-General Sir J. H.

Amery, Leopold C. M. S.

Brassey, H. L. C.

Dawes, James Arthur

Armitage, Robert

Breese, Major Charles E.

Denniss, Edmund R. B. (Oldham)

Armstrong, Henry Bruce

Brown, T. W. (Down, North)

Du Pre, Colonel William Baring

Ashley, Colonel Wilfrid W.

Bruton, Sir James

Edwards, Major J. (Aberavon)

Baird, Sir John Lawrence

Buckley, Lieut. Colonel A.

Edwards, Hugh (Glam., Neath)

Balfour, George (Hampstead)

Bull, Rt. Hon. Sir William James

Evans, Ernest

Balfour, Sir R. (Glasgow, Partick)

Burn, Col. C. R. (Devon, Torquay)

Eyres-Monsell, Com. Bolton M.

Barlow, Sir Montague

Butcher, Sir John George

Falcon, Captain Michael

Barnes, Rt. Hon. G. (Glas., Gorbals)

Casey, T. W.

FitzRoy, Captain Hon. Edward A.

Barnston, Major Harry

Chamberlain, Rt. Hn. J. A. (Birm. W.)

Flannery, Sir James Fortescue

Barrie, Charles Coupar (Banff)

Chamberlain, N. (Birm., Ladywood)

Ford, Patrick Johnston

Beauchamp, Sir Edward

Clay, Lieut.-Colonel H. H. Spender

Foreman, Sir Henry

Bell, Lieut.-Col. W. C. H. (Devizes)

Coats, Sir Stuart

Foxcroft, Captain Charles Talbot

Bellairs, Commander Carlyon W.

Cobb, Sir Cyril

Frece, Sir Walter de

Benn, Sir A. S. (Plymouth, Drake)

Cohen, Major J. Brunel

Geddes, Rt. Hon. Sir E. (Cambridge)

Gee, Captain Robert

Manville, Edward

Samuel, Rt. Hon. Sir H. (Norwood)

Gibbs, Colonel George Abraham

Martin, A. E.

Sanders, Colonel Sir Robert Arthur

Gilbert, James Daniel

Mason, Robert

Scott, Sir Samuel (St. Marylebone)

Gilmour, Lieut.-Colonel Sir John

Mitchell, Sir William Lane

Seddon, J. A.

Goff, Sir R. Park

Molson, Major John Elsdale

Shaw, Hon. Alex. (Kilmarnock)

Green, Joseph F. (Leicester, W.)

Mond, Rt. Hon. Sir Alfred Moritz

Shaw, Capt. William T. (Forfar)

Greer, Harry

Moore, Major-General Sir Newton J.

Short, Rt. Hon. E. (N'castle-on-T.)

Greig, Colonel Sir James William

Moore-Brabazon, Lieut.-Col. J. T. C.

Simm, M. T.

Gritten, W. G. Howard

Morning, Captain Algernon H.

Smith, Sir Harold (Warrington)

Hacking, Captain Douglas H.

Morison, Rt. Hon. Thomas Brash

Stanier, Captain Sir Beville

Hamilton, Major C. G. C.

Morrison, Hugh

Stanley, Major Hon. G. (Preston)

Hannon, Patrick Joseph Henry

Munro, Rt. Hon. Robert

Stanton, Charles Butt

Harmsworth, C. B. (Bedford, Luton)

Murray, William (Dumfries)

Stewart, Gershom

Harris, Sir Henry Percy

Neal, Arthur

Sturrock, J. Leng

Hennessy, Major J. R. G.

Newman, Colonel J. R. P. (Finchley)

Sudden, W. H.

Hewart, Rt. Hon. Sir Gordon

Newman, Sir R. H. S. D. L. (Exeter)

Surtees, Brigadier-General H. C.

Hilder, Lieut.-Colonel Frank

Nicholson, William G. (Petersfield)

Taylor, J.

Hoare, Lieut.-Colonel Sir S. J. G.

O'Neill, Major Hon. Robert W. H.

Terrell, George (Wilts, Chippenham)

Hohler, Gerald Fitzroy

Ormsby-Gore, Hon. William

Terrell, Captain R. (Oxford, Henley)

Holbrook, Sir Arthur Richard

Palmer, Major Godfrey Mark

Thomas, Sir Robert J. (Wrexham)

Hope, Lt.-Col. Sir J. A. (Midlothian)

Palmer, Brigadier-General G. L.

Thomson, F. C. (Aberdeen, South)

Hopkins, John W. W.

Parker, James

Thomson, Sir W. Mitchell- (Maryhill)

Horne, Sir R. S. (Glasgow, Hillhead)

Pearce, Sir William

Townley, Maximilian G.

Hunter, General Sir A. (Lancaster)

Pease, Rt. Hon. Herbert Pike

Tryon, Major George Clement

Hurd, Percy A.

Peel, Col. Hn. S. (Uxbridge, Mddx.)

Turton, Edmund Russborough

Hurst, Lieut.-Colonel Gerald B.

Percy, Lord Eustace (Hastings)

Waddington, R.

Jackson, Lieut.-Colonel Hon. F. S.

Perring, William George

Wallace, J.

James, Lieut.-Colonel Hon. Cuthbert

Philipps, Sir Owen C. (Chester, City)

Waring, Major Walter

Jesson, C.

Pinkham, Lieut.-Colonel Charles

Warren, Sir Alfred H.

Jodrell, Neville Paul

Pollock, Sir Ernest Murray

Watson, Captain John Bertrand

Johnson, Sir Stanley

Pownall, Lieut.-Colonel Assheton

White, Col. G. D. (Southport)

Jones, J. T. (Carmarthen, Llanelly)

Pratt, John William

Williams, C. (Tavistock)

Kellaway, Rt. Hon. Fredk. George

Prescott, Major W. H.

Williams, Lt.-Col. Sir R. (Banbury)

King, Captain Henry Douglas

Purchase, H. G.

Williams, Col. Sir R. (Dorset, W.)

Kinloch-Cooke, Sir Clement

Raeburn, Sir William H.

Wilson, Col. M. J. (Richmond)

Lambert, Rt. Hon. George

Raw, Lieutenant-Colonel Dr. N.

Wise, Frederick

Lloyd, George Butler

Rees, Capt. J. Tudor- (Barnstaple)

Wood, Hon. Edward F. L. (Ripon T

Lloyd-Greame, Sir P.

Reid, D. D.

Wood, Sir H. K. (Woolwich, West)

Locker-Lampson, Com. O. (H'tingd'n)

Renwick, Sir George

Wood, Major Sir S. Hill- (High Peak))

Lowther, Maj.-Gen. Sir C. (Penrith)

Richardson, Alexander (Gravesend)

Worthington-Evans, Rt. Hon. Sir L.

Lyle, C. E. Leonard

Roberts, Samuel (Hereford, Hereford)

Yate, Colonel Sir Charles Edward

M'Connell, Thomas Edward

Robinson, Sir T. (Lanes., Stretford)

Young, E. H. (Norwich)

McLaren, Hon. H. D. (Leicester)

Rodger, A. K.

Young, Sir Frederick W. (Swindon)

McLaren, Robert (Lanark, Northern)

Roundell, Colonel R. F.

Younger, Sir George

Macpherson, Rt. Hon. James I.

Royds, Lieut.-Colonel Edmund

Macquisten, F. A.

Rutherford, Sir W. W. (Edge Hill)

TELLERS FOR THE NOES.—

Maddocks, Henry

Samuel, A. M. (Surrey, Farnham)

Colonel Leslie Wilson and Mr.

McCurdy.

NEW CLAUSE.—(Recovery of penalty under s. 44 of 54 & 55 Viet., c. 39.)

(1) Any fine incurred under Section forty-four of The Stamp Act, 1891 (which imposes a penalty on unqualified persons preparing certain instruments), shall, instead of being recoverable in manner provided by Section one hundred and twenty-one of that Act. be recoverable summarily.

(2) Proceedings for the recovery of any such fine as aforesaid shall not be deemed to be proceedings for the recovery of a fine incurred under an Act relating to Inland Revenue, and may, notwithstanding any provision in any Act prescribing the period within which summary proceedings may be brought, be brought at any time within the period of two years next after the commission of the offence, or the period of six months next after the first discovery thereof by the prosecutor, whichever period is the shorter.—[ Sir W. Bull. ]

Brought up, and read the First time.

:I beg to move, "That the Clause be read a Second time."

This Clause is a small improvement in the existing, legal machinery. Under the Stamp Act of 1891 the Board of Inland Revenue have power to prosecute in the case of persons who, not being barristers, solicitors, or possessing other legal qualifications, draw a deed. The Lord Chancellor and everyone who has had to deal with this matter thoroughly approves of the change which is proposed by this Clause, and I understand the Government are willing to accept it. I therefore will not detain the House by explaining the matter beyond saying that the procedure will be much more expeditious if, instead of allowing the Inland Revenue to prosecute as they do at present, the cases covered by this Clause can be dealt with summarily before a magistrate.

:I am willing to accept the Amendment.

Question put, and agreed to.

Clause read a Second time, and added to the Bill.

NEW CLAUSE.—(Qualifications of general commissioners.)

The Third Schedule to The Income Tax Act, 1918, concerning the qualifications of general commissioners shall cease to have effect and all future appointments of persons to act as general or additional commissioners for the purposes of the Income Tax Acts shall be made from practising barristers, solicitors, accountants, or other professional persons with experience of Income Tax matters of not less than ten years' standing, and the provisions of The Income Tax Act, 1918, concerning such commissioners shall be construed accordingly.—[ Mr. G. Locker-Lampson. ]

Brought up, and read the First time.

:I beg to move, "That the Clause be read a Second time."

I hope the right hon. Gentleman will accept this Amendment. I propose that in order to safeguard the interests of the general taxpayer. The present situation is a most unsatisfactory one. The General Commissioners, as I understand, are appointed by the Land Tax Commissioners. I do not know I have ever been in the presence of a Land Tax Commissioner. I I do not know what their qualifications are, but one of their duties is to appoint the General Commissioner, and the only qualification that a General Commissioner is supposed to have is a property qualification, which in these days seems to me to be a very undemocratic condition. I have no doubt that General Commissioners are very public-spirited men, but, with few exceptions, they have no intimate knowledge of the Income Tax law. I do not refer to Scotland, where they have a great deal of information about the Income Tax law, or to a large part of the London area, where the General Commissioners also have a great deal of knowledge of the Income Tax law. But, taking the country as a whole, the General Commissioners have not got any intimate knowledge of Income Tax law. The Surveyor, or the Inspector, as he is sometimes called, of Taxes does practically the whole of the expert work. He practically advises the General Commissioners on appeals and practically advises the additional Commissioners, who are a sub-committee of the General Commissioners, in the work of assessing under Schedule D. My point is that the Commissioners who have to hear appeals from the general taxpayers ought to know their job. They ought to have expert knowledge of Income Tax law, but they are no protection what- ever to the taxpayer. The taxpayer never sees them. Very often he comes in contact with the Surveyor of Taxes, who is a Revenue official, but he practically never comes in contact with the General Commissioners, who are supposed to represent the local taxpayer.

:I ought to have eliminated my right hon. Friend. Very few General Commissioners have the knowledge of my right hon. Friend. It is very different from the days of Peel, when the Income Tax was introduced, because in those days the Income Tax was very small. It was a flat rate and was very simple. In these days the position is entirely different. We have an enormous Income Tax, a graduated Income Tax, abatements, exemptions, reliefs, and the whole matter is most technical and complicated, so complicated that all over the country you have Income Tax agencies who at considerable cost to the taxpayer advise them as to how they stand. This Amendment is not my suggestion. I would not be bold enough to put down an important suggestion like this if it were merely my own, but this Amendment is carrying out the suggestions of the Royal Commission on Income Tax, and I have practically quoted their own words. The Royal Commissioners recommended that the General Commissioners should be chosen from lawyers, accountants, business men, and representatives of the wage-earning classes. They also recommended that there should be no property qualification whatever, but that the only qualification in that respect ought to be that they should be drawn from among the taxpayers themselves. I do not think it is right that the general taxpayer should be absolutely in the hands of the Surveyor of Taxes, who is the Inland Revenue official. In actual working it simply means that he is appealing from the Inland Revenue to the Inland Revenue. That is not right with the Income Tax so high as it is at present. It is also ridiculous that there should be a property qualification in days such as these.

:The hon. Member for Wood Green (Mr. G. Locker-Lampson) has submitted several considerations in connection with the qualifications of General Commissioners that are of great interest, and that, it is not too much to say, would require to be dealt with in due course. But when he says that his proposal is only carrying out the recommendations of the Royal Commission, that is not true in any strictly accurate sense, though in certain particulars that is the case. The Royal Commission dealing with this matter of the qualifications of the General Commissioners made a long series of elaborate recommendations on the subject, dealing with every possible feature of the whole scheme of reorganisation of the body of General Commissioners, their qualifications, and numbers, the status which they should possess, how they were to be appointed and many other matters. Out of that scheme the hon. Member has selected only one single circumstance for inclusion in his Clause, leaving the others to be dealt with at some other time, if at all. May I submit that it would be unsatisfactory to deal with these extremely important and wide-reaching recommendations of the Royal Commission in this piecemeal fashion. The whole matter will require most mature consideration, and possibly an opportunity may occur after consideration of proposing legislation to effect these reforms. But it has to be recognised that the changes referred to have excited the most acute criticism, not to say violent controversy, throughout the country, and I do not think that it would be in the interests of the reform of the law as a whole to deal with it in this special manner.

7.0 P.M.

There are two minor considerations which ought to point to the necessity of rejecting this Clause. In the first place, it departs in a not unimportant particular from the recommendation of the Royal Commissioners. Whether that be the right direction for movement, it is well to notice the circumstances that it excludes, more or less—although they were included by the Royal Commissioners— business men and the representatives of the wage-earning classes. Another effect would be to exclude such readily accessible persons, who have rendered valuable service in the past, as the landowning and retired classes. The effect of the Clause would be quite certainly to impose a quite unworkable condition upon the composition of the body of General Commissioners in the less populous areas. In these areas it would simply mean that those with the qualifications the hon. Gentleman desires would not be found in adequate numbers. If he confines the body of the General Commissioners to those who have special experience in Income Tax he would be very largely confining it to solicitors and accountants, who are occupied in advising their clients, and are thereby disqualified from considering applications in which they are themselves concerned. I fear that the Clause would be unworkable, and it cannot be accepted.

:I think that in moving this Clause my hon. Friend has acted under a misapprehension, as I believe it would be very unpopular to make any change in the composition of the General Commissioners. They are an unpaid body; they are always to be seen, and they are always willing to hear cases. I cannot say the exact number of times we meet in any year, but we certainly meet six or seven times in my part of Wiltshire. We have always received and considered every difficult question, and, in general, this body has had the confidence of Income Tax payers. I am quite certain that if my hon. Friend's Clause were to be passed it would alter the composition of the Commissioners of the City of London, which the inhabitants of the City would regret. You have an unpaid body who are doing their work well, and I venture to say that if you put in solicitors and accountants—quite irrespective of the arguments put forward by the Financial Secretary to the Treasury—you would create dissatisfaction.

:I have read the evidence given before the Royal Commission, and I do not think it bears out what the right hon. Gentleman (Sir F. Banbury) states. As the hon. Gentleman who moved the Clause stated, you have got an intricate system, and what the general public wants is something in the nature of a court of aid to which they can go. Is the right hon. Gentleman, and people like him, a court of aid? If I was in Wiltshire and desired to apply, I would have to motor or take the train to where the right hon. Gentleman was.

:My division is a Petty Sessional Division, and all you would have to do would be to come to the clerk of the Petty Session.

:I have to come to the Petty Sessions and wait until all the drunks and others are dealt with.

:There is no necessity even to go to the Court. You can find out from the clerk.

:I would rather have as my court of aid a solicitor to whom I could go, and on whose windows would be something in the nature of an invitation to come in and get assistance.

:My hon. Friend is mistaken. We sit as a body. We do not sit as a single person, and the only question is whether you shall have county magistrates or professional men. The same procedure would have to be followed in each case.

Question, "That the Clause be read a Second time," put, and negatived.

NEW CLAUSE.—(Repeal of Corporation Profits Tax.)

The whole of the provisions of Part V of The Finance Act, 1920, which relate to the Corporation Profits Tax shall be repealed as and from the thirty-first day of December, nineteen hundred and twenty-one.—[ Sir A. Fell. ]

Brought up, and read the First time.

:I beg to move, "That the Clause be read a Second time."

This is a very important point. The Corporation Profits Tax really hardly came into last year's account because the sum raised was only some ÂŁ600,000. The amount this year is ÂŁ30,000,000, which means practically an additional 6d. on the Income Tax. Each 1d. of the Income Tax produces ÂŁ5,000,000, and this tax being the equivalent of an Income Tax of 6d. in the pound makes the Income Tax 6s. 6d. Of course, if it had been put on the Income Tax there would have been a great outcry. People, before the Budget came in, were discussing the question of whether there would be a reduction in the Income Tax this year. There was a possibility that, by some means or other, there might have been a reduction in the Income Tax, instead of which we find the Corporation Tax is an additional burden. The total of the Income Tax this year is ÂŁ394,000,000 and the Super-tax ÂŁ28,000,000. The Corporation Profits Tax will add ÂŁ30,000,000 to this sum.

I believe there is a great ignorance in the country as to what is the nature of this Corporation Profits Tax. It is a tax of 1s. in the pound on the profit of all limited liability companies, and I believe it is to be extended afterwards to all companies of a statutory nature, although they are exempted at the present time because they have been under the control of the Government. It was no use the Government paying out in one way and paying back in another. These statutory companies have been, therefore, exempt for two years. But this 1s. in the pound tax is on the great troop of limited liability companies, including those of the Argentine and South America, which have had in the past very large profits. These profits are now to be subjected to this additional Income Tax, and the 1s. in the pound falls upon those shareholders who hold ordinary shares. There have been established companies with amounts in debentures and preference shares which, indeed, equal the amount of the ordinary share capital.

The Corporation Profits Tax does not fall upon the debenture holders and preferred shareholders. They receive their income without deduction, except the deduction for Income Tax, so that the whole of the 1s. in the £ on the profits falls upon the holders of ordinary shares, and so, in the case of the companies to which I have referred, that would run into about 2s. in the £. The ordinary shareholders in the great dividend-paying companies which are launched from England will have Income Tax of 6s. in the £ deducted and a further 2s. deducted for Corporation Profits Tax before they receive any share in the profits. It is not absolutely 8s. in the £, because the 2s. is taken off and the 6s. is only on the balance of the profit, which makes it some trifle less—7s. 8d. or 7s. 10d. in the £. For those who pay Super-tax there is also that addition. I believe it formerly required an income of £12,000 a year before one had half taken by the Government, but if you have an income of £8,000 or £9,000 a year you will have half of it taken if it be derived from profits subject to the Corporation Profits Tax. That is a very serious matter, and very few people in the country appreciate it.

I do not think it is understood that there was this immense increase in Income Tax or it would not have gone through as it did. Some will say it is not Income Tax, but that it is on the profits of the companies. I have heard some Members, and some of the Labour party, say that this falls upon great and wealthy corporations, and that they can easily pay the tax. It may fall upon wealthy corporations, but it will fall also upon the smallest corporations. I am informed of the case of a little company which makes a profit of about ÂŁ2,000 a year, which is divided amongst a few shareholders. The Secretary told me they would have to pay 1 per cent. less dividend this year because of the Corporation Profits Tax. In the case of a great and wealthy company this may mean thousands and hundreds of thousands to shareholders, but it falls in exactly the same way on small companies, and it falls in a way which gives no power of getting it back, whatever the income of the shareholder may be. A certain amount is paid on account of the Corporation Tax, before the dividend is declared, and the shareholder cannot afterwards recover any of the portion which has been deducted in that way.

There is another broader and bigger question which I wish to put before the Chancellor. This was not his tax. He is not responsible for it, and I know he will give this the fullest consideration, and see whether it is the best tax that can be placed upon English industry, or whether the amount which he draws from from enterprise and industry in this way is worth all that it involves in other respects. London was the centre of the financial world before the War. Many companies registered in London, whose shareholders were largely resident in other countries. They came here because our law was safe, simple and sound. London was the centre of great financial companies whose operations extended, not only throughout the Empire, but throughout many parts of the world, and companies had head offices in London although they might be operating in Buenos Aires or India. Very large pro- fits were made in London from the fact that such companies had head offices here. I do not mean the payment for big offices, for managers and staffs, but I mean that contracts were turned into English money instead of going to other places abroad. Contracts such as those for engines and rolling stock for great railways in which huge amounts of capital were involved were dealt with here. If these companies had been registerd in Buenos Aires or Paris, or somewhere else. this would not have been the case; but the facilities in London were so great that they registered here.

These companies are considering whether it will not be necessary for them to wind up their head offices in London and transfer them elsewhere. It is very sad to consider that there should be any risk of that immense field of operations and of profits being lost to this country. It may have been noticed that Indian companies have already transferred from London. One is a tramways company which had a London office but drew all its profits from Bombay. It has now ceased to have a London office, and its head office is now in Bombay. They will not stand the 6s. in the pound Income Tax for shareholders residing in Bombay, and they will not stand the possibility of further increase in taxes here, such as this Corporation Tax. There is another company, a big South American mining company, with a large number of French shareholders, who have transferred their head office from London to Switzerland. They have been in this country for many years, and had paid something like ÂŁ3,000,000 in dividends, and their transference is a great loss. Englishen would be patriotic enough to retain these companies in London, but where you have very large parties of Dutch and French shareholders they will say, " How can we stand 6s. in the pound, and then 2s. in the pound Corporation Tax, and then pay our tax in Paris on our incomes there? We must have the company transferred."

Regarding the origin of this tax, I understand that it was first put on in America, and it was put on there because they had a great objection to Income Tax. It is an extremely easy way of raising large sums of money by means of taxing capital, because if you put the tax on before you come to the dividend stage it is the capital that is taxed. It is the simplest way of raising money, and as long as there is no Income Tax there is no objection to it, but when the Income Tax is 6s. in the pound it is a very different tale. The principal reason for applying it here was because it was said that if people came over here to take the benefit of our law they must pay for the benefit. That is perfectly reasonable, but what have you done with these companies? You have not only doubled their registration charges, but have put them up four times. I ascertained the other day by means of a question as to what the charge would be on registering a company, say, of ÂŁ500,000 capital now as compared with before the War. I understand it is now ÂŁ5,050, as compared with ÂŁ1,300. So that the people who come over here for the benefit of our law are already paying very heavily for that advantage. We cannot have it both ways. We cannot say, "It shall be very expensive for you to register a company under the Act, and even if you do register we shall tax you more than the other companies which are not registered."

Shrewd men say that do not believe this country can remain the centre of the financial world if our Income Tax remains permanently above 3s. or 4s. in the pound at the outside. These companies will direct their financial operations in some other way through foreign countries. I do not know how that may be, but I am confident of the fact that you cannot put up the registration fees on these companies to a figure much higher than that of any other country, and then tax these companies by this extra 2s. in the pound. I hope I have given the Chancellor of the Exchequer some facts which will induce him before next year to endeavour to find something better than this, and something which will not be so harmful as I am convinced this is. I have only suggested that it should cease after the end of this year, and he will get his ÂŁ30,000,000 in this year. The companies are all making provision for it and are paying lower dividends in consequence. I do not see that there will be any great harm done this year, but if there is any idea that it is to be taken as a permanency, then there will be a blow struck at the City of London and at this country as a financial centre, from which it will be very difficult to recover.

:I beg to second the Motion. Already hundreds of concerns are moving their offices from England. These are concerns which, while carrying on their business and making their profits in South America, North America, Africa, Asia, and all parts of the world, can be registered for the purposes of limited liability, practically anywhere where the laws are reasonable, and the place of registration convenient. At the present moment the Income Tax in Belgium for companies carrying on business outside Belgium is 2 per cent., which is equivalent to 5d. in the ÂŁ, and that is causing a vast number of concerns to move to Brussels. It is almost as convenient once a month to attend a meeting of a board of directors in Brussels for a large number of people, as it is to attend a meeting in London. The question arises, is it desirable that London should remain the domicile of a vast number of businesses and enterprises whose operations cover many different parts of the world? I venture to urge that it is. There are a vast number of reasons why we should do everything to attract to London all the enterprise and business that we possibly can. See how this cuts at British enterprise and British success in trade! Supposing you go to a man in Rumania who has got a property which he wants to develop, and say to him, "Will you take, in a concern of ÂŁ300,000, one-third in shares of profit? "He asks, "Are you going to register your company in London?" and when you reply in the affirmative he says, "I will not do it." I am speaking from experience in giving this little illustration. A Frenchman comes to him and makes a similar offer, but when he finds out what the Income Tax is in France, he turns down that offer also. A Belgian man comes to him and points out that the Income Tax in Belgium is only 5d. in the ÂŁ and he accepts the Belgian's offer. Belgian financiers get that business and get that undertaking, and the Englishman is cut out, not because he is not willing to pay his own Income Tax and anything imposed on his own profits by the Corporation Tax, but because English law, as it is at present arranged, imposes a tax also upon the part of income which is payable to foreigners.

That is the case with this Corporation Profits Tax in a great deal worse manner than the Income Tax. If a Rumanian's income is taxed in this way he has no means of getting it back, the effect of taxation being imposed in the manner in which it is imposed at the present time, means discriminating against British trade and British enterprise, and is driving into other parts of the world all new enterprises which are brought forward, and which, in other circumstances, would find a domicile here. I suggest that it is not only grossly unfair to tax the profits of a company with British Income Tax and the British Corporation Profits Tax, but it is detrimental from every point of view to British enterprise and British trade that no distinction should be made.

:I am the first to recognise the cogency and force of the arguments put forward by the Mover and Seconder of the Clause which has been proposed. It is perfectly true that the burden of taxation makes it very difficult to carry on business, and puts impediments in the way of enterprise which in the end are detrimental to the prosperity of the country. I cannot remember any occasion on which the whole matter was more appositely stated than by the right hon. Member for Paisley (Mr. Asquith), in dealing with an increase in Income Tax, when he laid down the proposition that every increase in Income' Tax tended to take away from industry the funds which would otherwise go to the fructification of enterprise. So far as I can recall, that was how he stated it, although not in exactly those words. In every case, therefore, what you must try to do, looking at the circumstances in which you find yourself, is to exact as little as possible from those people who are using their funds for the carrying on of enterprises in the country. But you are always confronted; on the other side, with the fact that you must raise enough revenue with which to conduct the business of the country. If you do not provide the business man with a country in which to carry on his trade or industry, the very foundations upon which he bases his enterprise are taken away from him. Accordingly, it is always a very nice balance as between one alternative and the other.

All the arguments with regard to the hardships which are endured by the business men to-day which have been stated by my hon. Friends, have also been stated in regard to other conditions in this country. For example, anyone who heard the speech of my right hon. Friend the Member for Chelmsford (Mr. Pretyman) must have been very greatly impressed with the case which he put forward for remission of the present taxation upon land. It has become almost impossible at the present time for many landowners to carry on the business of the letting and tilling of the land, and all these things have to be taken into account. I am very glad of the suggestion which my hon. Friend made, for he said that by this time next year he hoped I would be in a position to do something in connection with the Corporation Profits Tax, and I assume by that that he recognises it is impossible for me to make any movement in that direction this year. We have got to find the revenue to meet our expenditure, and if we do away at the present time with the Corporation Profits Tax, we are surrendering something like £30,000,000. It is enough for me to say that this is a sum which I cannot afford to lose, and while I readily agree—and shall take into serious consideration the arguments which have been put forward against the Budget of next year—to consider what can be done, at the present time I am quite unable to comply with the suggestion now made.

:I also quite recognise that it is impossible in this financial year to do away with this tax, but I desire to express the hope that we might have some more definite assurance with regard to the future. I think the Chancellor of the Exchequer has misconstrued the objections to this tax, and he dealt very little with the merits of the particular objections which were put forward. In fact, he seemed to be under the impression that the objection to this tax was the common objection to all taxes, that all taxes are injurious to trade and burdensome, and that therefore this tax is resisted in the same way as all taxes are resisted. The objection to this tax, however, is that it is founded on essentially vicious principles of taxation and that it differs from other taxes. It differs, for instance, from the Income Tax, which is fair and impartial all round. This is not a Corporations Tax, it is not a tax imposed upon all corporations in respect of the protection they get by the limited liability Clauses, otherwise it would be imposed upon those corporations which fail to make any profit and which need that protection even more than those which do make a profit. This is an Income Tax, and it is not proper to describe it by any other term. It is an Income Tax which is not applied to all incomes but only to a limited number of incomes, and it is an Income Tax which is not subject to the abatements on small incomes. The person who derives a small income from his ordinary shares in a limited liability company must pay his tax to the full, while he can claim his abatement under the ordinary Income Tax, and, therefore, this tax is objected to because it is an Income Tax on vicious principles applied to some incomes only and not subject to the usual abatements in the case of small incomes. I therefore support the new Clause.

:Like the preceding speaker, I object to this tax because it is not an Income Tax. If it were an Income Tax, if the same money were raised upon the incomes of the country, there would not be year after year this same opposition to the Corporation Profits Tax. It must be realised that it does not fall on debenture shares or preference shares. They escape entirely. Neither does it fall on shareholders in gas companies, or railway companies, or electric light companies, or water companies, and all statutory companies are exempted from the tax. It is an Income Tax falling on some people's incomes, but it is not that I complain of so much as this, that it is specially levied in such a way that the people who pay the tax in the first instance can transfer it on to the consumer. Wherever a monopoly is taxed, as in the case of statutory companies and railway companies, the Corporation Profits Tax is not levied because these companies could not transfer the tax on to the consumer generally. People interested in landed property escape in the same way; they cannot pass the tax on. Wherever it can be passed on, the Corporation Profits Tax is levied, so that while nominally a direct tax, it is actually an indirect tax on the con- sumer, just as much as is the tax on tea, coffee, or sugar. It is an indirect tax which masquerades as a piece of direct taxation. This is more especially so when it falls on co-operative societies, where you have the vices of this tax well shown. It is realised there that it is the consumer that pays, and, consequently, we have among all the co-operative societies a very pronounced opposition to this tax.

To my mind it is quite sufficient that the Corporation Profits Tax is in effect an Income Tax with far more than all the vices of the Income Tax, in that it falls on only a few incomes, in that small incomes cannot get exemption from the tax, and in that it is so arranged as to fall apparently upon Income Tax payers, but actually in such a way that those Income Tax payers transfer it on to the rest of community. The Corporation Profits Tax is treated now by all those companies who pay it as one of the ordinary overhead charges of the business, and they see that the price at which they sell their goods is sufficient to cover the duty. It is no use repeating these arguments year after year, but I want to raise one particular point in order to get an answer from the Chancellor of the Exchequer. As has been shown by the Mover and Seconder, the Corporation Profits Tax tends to drive public companies into a Colonial or Indian domicile. Has he taken any steps, or is he proposing to take any steps, to urge those countries, such as India or our Colonies, to institute a similar tax so as to check this tendency? We are not merely losing Corporation Profits Tax where a company takes up a foreign domicile, but we are losing also to a large extent Income Tax upon the revenues of that company, and it seems only fair that just as companies have to pay Corporation Profits Tax here, the competing companies in India or East Africa or the Crown Colonies should be subject to a similar tax in order that this tendency to change the domicile of a company might be checked and the flow of capital from this country diminished.

:I was one of the few Members who objected strongly to the creation of this new tax when it was first imposed, and I put forward most of the arguments that I have listened to to-day against it. One or two, however, have not been mentioned, and one is that the Chancellor of the Exchequer has said that 6s, in the £ Income Tax was the limit to which incomes should be taxed. This, being a tax on the income of those people who hold shares in limited liability companies, raises their Income Tax above 6s. Therefore, according to the showing of the Chancellor of the Exchequer of those days, and I suppose of the present Chancellor, he is overtaxing Income Tax on the people of this particular class. That is a serious objection. No Chancellor of the Exchequer wants to injure the community, but the right hon. Gentleman must know that he is injuring the community at the present time by this tax. The first principle of any tax is that it should be equal; but this is not equal, because it is only put upon a certain class of people, namely, ordinary shareholders in companies. It may be put upon deferred shareholders in some cases, but many companies have no deferred shareholders. The people upon whom it is most unjustly levied are the small shareholders amongst the working class. Take the Lancashire cotton mills, where an operative has invested the savings of his thrift in cotton shares. If this were to be called an Income Tax, he would be able to get exemption from it altogether if his total income did not amount to £250 a year. But not being called what it really is—an Income Tax —but a Corporation Tax, he has to pay, although his income does not amount to £250 a year. That argument shows the gross injustice of creating an Income Tax and calling it a Corporation Profits Tax and bringing into the net a large number of poor people who ought not to be liable

for Income Tax at all. I shall say no more. The subject has been thoroughly discussed. I shall always oppose the Corporation Profits Tax because it is an unfair and unequal tax which presses hardly upon the people who ought not to pay taxes at all upon the savings of their thrift.

:One would want further information from the Chancellor of the Exchequer as to the effect this Corporation Profits Tax has in driving away from this country many large corporations whose existence was a source of large benefit to this tax. There is the case of the Burmah Corporation, who used to pay large rates and employed a considerable number of people. Is there nothing we can do which will induce such corporations to remain in this country 1 If we can induce them to stay here, and even allow them to escape taxation for a time, it would not be going too far. If they are willing to come into this country and pay ordinary taxation, it is wrong if we compel them to pay this Corporation Tax in addition, and especially so is it the case if this tax drives them away altogether. I know of two or three companies who have gone to Holland and two to Switzerland, and there may be others. If the Chancellor cannot at this moment see his way to exempt all corporations in this country, it should be a serious consideration for him to try to deal with the hard cases in the future.

Question put, "That the Clause be read a Second time."

The House divided: Ayes, 92; Noes, 156.

Division No. 256.]

AYES.

[7.50 p.m.

Balfour, George (Hampstead)

Graham, D. M. (Lanark, Hamilton)

Kiley, James Daniel

Barker, G. (Monmouth, Abertiliery)

Graham, Ft. (Nelson and Colne)

Lawson, John James

Barnes, Rt. Hon. G. (Glas., Gorbals)

Graham, W. (Edinburgh, Central)

Lunn, William

Barton, Sir William (Oldham)

Gretton, Colonel John

Macdonald, Rt. Hon. John Murray

Bell, James (Lancaster, Ormskirk)

Griffiths, T. (Monmouth, Pontypool)

McLaren, Robert (Lanark, Northern)

Benn, Captain Wedgwood (Leith)

Gritten, W. G. Howard

Maclean, Neil (Glasgow, Govan)

Bowerman, Rt. Hon. Charles W.

Grundy, T. W.

McMicking, Major Gilbert

Bramsdon, sir Thomas

Guest, J. (York, W. R., Hemsworth)

Mallalieu, Frederick William

Brown, James (Ayr and Bute)

Hall, F. (York, W. R., Normanton)

Mills, John Edmund

Cairns, John

Hallas Eldred

Morgan, Major D. Watts

Cape, Thomas

Halls, Walter

Murray, Hon. A. C. (Aberdeen)

Carter, W. (Nottingham, Mansfield)

Hancock, John George

Myers, Thomas

Casey, T. W.

Hayday, Arthur

Nall, Major Joseph

Cecil, Rt. Hon. Evelyn (Birm., Aston)

Henderson Major V. L. (Tradeston)

Nicholson, Reginald (Doncaster)

Chadwick, Sir Robert Burton

Hinds, John

Nicholson, William G. (Petersfield)

Clynes, Rt. Hon. John R.

Hirst, G. H.

O'Neill, Major Hon. Robert W. H.

Davies, Alfred Thomas (Lincoln)

Hodge, Rt. Hon. John

Parry, Lieut.-Colonel Thomas Henry

Edwards, C. (Monmouth, Bedwellty)

Hogge, James Myles

Raffan, Peter Wilson

Edwards, G. (Norfolk, South)

Irving, Dan

Ramsden, G. T.

Edwards, Hugh (Glam., Neath)

Kennedy, Thomas

Richardson, Alexander (Gravesend)

Finney, Samuel

Kenworthy, Lieut.-Commander J. M.

Richardson, R. (Houghton-le-Spring)

Galbraith, Samuel

Kenyon, Barnet

Roberts, Frederick O. (W. Bromwich)

Roberts, Rt. Hon. G. H. (Norwich)

Stanton, Charles Butt

White, Charles F. (Derby, Western)

Royce, William Stapleton

Swan, J. E.

Wignall, James

Rutherford, Sir W. W. (Edge Hill)

Thomas, Rt. Hon. James H. (Derby)

Williams, Aneurin (Durham, Consett)

Scott, A. M. (Glasgow, Bridgeton)

Thomas, Brig.-Gen. Sir O. (Anglesey)

Wilson, W. Tyson (Westhoughton)

Sexton, James

Thomson, T. (Middlesbrough, West)

Young, Sir Frederick W. (Swindon)

Shaw, Thomas (Preston)

Thorne, W. (West Ham, Plaistow)

Young, Robert (Lancaster, Newton)

Shaw, Capt. William T. (Forfar)

Tootill, Robert

Short, Alfred (Wednesbury)

Waddington, R.

TELLERS FOR THE AYES.—

Smith, W. R. (Wellingborough)

Walsh, Stephen (Lancaster, Ince)

Colonel Wedgwood and Mr. A.

Spencer, George A.

Waterson, A. E.

Rendall.

NOES.

Adair, Rear-Admiral Thomas B. S.

Glanville, Harold James

Peel, Col. Hn. S. (Oxbridge, Mddx.)

Adkins, Sir William Ryland Dent

Goff, Sir R. Park

Percy, Lord Eustace (Hastings)

Agg-Gardner, Sir James Tynte

Gray, Major Ernest (Accrington)

Perkins, Walter Frank

Ainsworth, Captain Charles

Green, Joseph F. (Leicester, W.)

Perring, William George

Amery, Leopold C. M. S.

Greig, Colonel Sir James William

Pinkham, Lieut.-Colonel Charles

Armitage, Robert

Hacking, Captain Douglas H.

Pollock, Sir Ernest Murray

Armstrong, Henry Bruce

Hamilton, Major C. G. C.

Pownall, Lieut.-Colonel Assheton

Ashley, Colonel Wilfrid W.

Harris, Sir Henry Percy

Pratt, John William

Atkey, A. R.

Herbert, Dennis (Hertford, Watford)

Prescott, Major W. H.

Baird, Sir John Lawrence

Hewart, Rt. Hon. Sir Gordon

Purchase, H. G.

Barnston, Major Harry

Holbrook, Sir Arthur Richard

Rees, Capt. J. Tudor- (Barnstaple)

Barrand, A. R.

Holmes, J. Stanley

Reid, D. D.

Bell, Lieut. Col. W. C. H. (Devizes)

Hops, Sir H. (Stirling & Cl'ckm'nn, W.)

Renwick, Sir George

Betterton, Henry B.

Hope, Lt.-Col. Sir J. A. (Midlothian)

Roberts, Samuel (Hereford)

Birchall, Major J. Dearman

Hopkins, John W. W.

Rodger, A. K.

Blair, Sir Reginald

Hopkinson, A. (Lancaster, Mossley

Roundell, Colonel R. F.

Bowles, Colonel H. F.

Horne, Sir R. S. (Glasgow, Hillhead)

Royds, Lieut.-Colonel Edmund

Bowyer, Captain G. W. E.

Jellett, William Morgan

Samuel, A. M. (Surrey, Farnham)

Brassey, H. L. C.

Jesson, C.

Seddon, J. A.

Breese, Major Charles E.

Johnson, Sir Stanley

Simm, M. T.

Broad, Thomas Tucker

Jones, Sir Edgar R. (Merthyr Tydvil)

Stanier, Captain Sir Beville

Bruton, Sir James

Jones, Sir Evan (Pembroke)

Stanley, Major Hon. G. (Preston)

Buckley, Lieut.-Colonel A.

Jones, G. W. H. (Stoke Newington)

Stewart, Gershom

Bull, Rt. Hon. Sir William James

Jones, Henry Haydn (Merioneth)

Sturrock, J. Leng

Butcher, Sir John George

Jones, J. T. (Carmarthen, Llanelly)

Surtees, Brigadier-General H. C.

Carter, R. A. D. (Man., Withington)

Kellaway, Rt. Hon. Fredk. George

Sutherland, Sir William

Chamberlain, Rt. Hn. J. A. (Birm., W.)

Kidd, James

Taylor, J.

Chamberlain, N. (Birm., Ladywood)

King, Captain Henry Douglas

Terrell, Captain R. (Oxford, Henley)

Clough, Sir Robert

Lewis, Rt. Hon. J. H. (Univ., Wales)

Thomas, Sir Robert J. (Wrexham)

Coats, Sir Stuart

Lloyd, George Butler

Thomson, F. C. (Aberdeen, South)

Cobb, Sir Cyril

Locker-Lampson, Com. O. (H'tingd'n)

Thomson, Sir W. Mitchell- (Maryhill)

Cohen, Major J. Brunel

Lose by, Captain C. E.

Townley. Maximilian G.

Colfox, Major Wm. Phillips

M'Connell, Thomas Edward

Tryon, Major George Clement

Colvin, Brig.-General Richard Beale

Mackinder, Sir H. J. (Camlachie)

Turton, Edmund Russborough

Conway, Sir W. Martin

Macpherson, Rt. Hon. James I.

Wallace, J.

Cowan, D. M. (Scottish Universities)

Macquisten, F. A.

Ward, Col. L. (Kingston-upon-Hull)

Craig, Captain C. C. (Antrim, South)

Manville, Edward

Waring, Major Walter

Davidson, J. C. C.(Hemel Hempstead)

Mason, Robert

Warren, Sir Alfred H.

Dawes, James Arthur

Molson, Major John Elsdale

Watson, Captain John Bertrand

Denniss, Edmund R. B. (Oldham)

Mond, Rt. Hon. Sir Alfred Moritz

White, Col. G. D. (Southport)

Doyle, N. Grattan

Morden, Col. W. Grant

Williams, C. (Tavistock)

Edwards. Major J. (Aberavon)

Moreing, Captain Algernon H.

Williams, Col. Sir R. (Dorset, W.)

Evans, Ernest

Morison, Rt. Hon. Thomas Brash

Willoughby, Lieut.-Col. Hon. Claud

Hannery, Sir James Fortescue

Morris, Richard

Wilson, Lt.-Col. Sir M. (Bethnal Gn.)

Ford, Patrick Johnston

Neal, Arthur

Wise, Frederick

Foreman, Sir Henry

Newman, Sir R. H. S. D. L. (Exeter)

Wood, Hon. Edward F. L. (Ripon)

Frece, Sir Walter de

Nield, Sir Herbert

Wood, Sir H. K. (Woolwich, West)

Fremantle, Lieut.-Colonel Francis E.

Norman, Major Rt. Hon. Sir Henry

Worsfold, T. Cato

Gardiner, James

Palmer, Major Godfrey Mark

Young, E. H. (Norwich)

Gee, Captain Robert

Palmer, Brigadier-General G. L.

Gibbs, Colonel George Abraham.

Parker, James

TELLERS FOR THE NOES.—

Gilbert, James Daniel

Pearce, Sir William

Colonel Wilson and Mr. McCurdy.

Gilmour, Lieut.-Colonel Sir John

Pease, Rt. Hon. Herbert Pike

The following Clause stood upon the Paper in the name of Mr. T'. Griffiths:

(1) Entertainments Duty shall not lie charged for admission to any entertainment where the Commissioners of Customs and Excise are satisfied—

(2) Sub-section five of Section one of the Finance (New Duties) Act, 1916, is hereby repealed.

:With regard to the Clause standing in the name of the hon. Member for Monmouth (Mr. Thomas Griffiths), I would point out that, with the exception of paragraph ( a ), the matters dealt with would more suitably come up at a later stage, in so far as they are not already law.

NEW CLAUSE.—(Amendment of 6 Geo. V, c. 11, Section 1.)

(1) Entertainments Duty shall not be charged for admission to any entertainment where the Commissioners of Customs and Excise are satisfied—

( a ) that the whole of the profits thereof are devoted to philanthropic or charitable purposes.—[ Mr. T. Griffiths. )

Brought up, and read the First time.

:I beg to move, "That the Clause be read a Second time."

8.0 P.M.

I thank you, Sir, for your guidance, and I will deal with paragraph ( a ) alone, because there are several right hon. and hon. Members who want to speak on that portion of the Clause. This Clause is different from the one proposed by the Chancellor of the Exchequer, which deals with a tax on an entertainment which is not conducted for profit. The Clause that I now move deals with an entertainment where the whole of the profits thereof are devoted to philanthropic or charitable purposes. There are some institutions in the country that are very hard hit on account of this Entertainments Duty, and I shall confine myself to a case that happened in my own constituency, as I know there are other speakers who want to deal with this question from other standpoints. In one part of my constituency the workmen have an institution which is called the Workmen's Home. The workmen make their contributions weekly through the office for the purpose of keeping up this institution. They have a library, and there is also a hall attached where concerts are held and lectures are given, and where public meetings are held The people of Llanavon were very anxious to provide a recreation ground, but when the Town Council went into the matter they discovered that it would be a costly item, and would mean a rate of something like 10d. in the pound. Therefore the committee of this workmen's club decided to invite the ratepayers to contribute something towards the institution, so that they would be able to run a cinema show for the purpose of raising money in order to provide this recreation ground. This is one of the rules: I am sure there are other Members who have other cases which they will be able to bring forward to show that performances given by different societies are not given for the purpose of gaining any profits at all.

:I beg to second the Motion. I should like to stress the point made by the hon. Member for Pontypool (Mr. Griffiths) that the whole of the profits are to be divided. The Section in the original Act reads: payment for their work, in either case the Entertainment Tax has to be paid. If we accept the word "profits" it will be quite clear that in such a case as I have mentioned, where the entertainment was for a philanthropic and charitable purpose, there would be no need to pay the tax.

I should like to give another instance of how it works in the area from which I come. We have a very philanthropic gentleman in the musical world, Dr. Kilburn, of Bishop Auckland, who is well known all over the North of England for his interest in choral societies and their development. He has not got anything out of it, he has generally lost money; but he has given his time and services to the development of this side of social life, and has rendered great service to that area. His choirs give concerts and entertainments for the benefit of various charitable and philanthropic institutions, but time after time they have had to bring in special artistes whose expenses have had to be paid—simply their train fares—but in spite of the fact that this gentleman has given his services to the community for the building up of choirs and for the development of the taste for music, and at the same time has assisted charitable and philanthropic undertakings, if an artiste comes in whose expenses have to be paid this entertainment tax is applied. In this new Clause we wish to make it clear that it was not the intention of the House originally, and is not the intention of the House at present, to lay a ban upon the development of things in the civic world of the highest importance.

:I have listened with interested attention to the manner in which the special point in this case has been developed, and as I have listened, there has grown upon me the belief that the provisions of the duty as it stands at present have not, perhaps, been analysed right out into their depths by hon. Members who have supported this Clause. Let me just draw attention to what it is hon. Members are proposing in the rather truncated remains of the present Clause, and how the Clause stands at present. How does it stand? In this way:

I think on examination the House will realise that many of these questions which have been referred to in the course of the Debate by those responsible for this new Clause is really covered by this exemption provision. Where there is this 20 per cent. proviso, it allows, as it were, a concession of 20 per cent. expenses as a reduction. I believe as a matter of fact in administration most of these hard cases are covered by this present proviso. Where they are not there has been some expenditure in connection with the entertainment as to withdraw it from the region of a purely charitable entertainment. Now I come to what is the true reason why it is necessary in the interests of revenue to defend this principle of exempting entertainments of this nature in according with their takings, and not in accordance with their profits. Were we to make a breach in that defence, and to look at profits and not at takings, I think it would be clear to any Member of this House, who has had any experience in the organisation of entertainments of the sort, that you will have made such a breach in the defence of the tax as to drive through not only a coach and pair but wagons enough to carry off the whole of the proceeds of the tax. Where can you draw the line once you abandon the principle of takings, and not profits? Let me show hon. Members the other end of the scale. At that end lies the sort of entertainment for which, of course, no Member of this House would claim consideration. I refer to the bogus charity entertainment got up by the enterprising adventurer who pays himself out of the proceeds of the entertainment 99 per cent. of the takings as salary, remuneration, or fees for his endeavours, and pays the odd per cent. into the nearest poor box, and, therefore, calls it a charity entertainment. That, of course, is an extreme case, but between that and the others referred to by my hon. Friend lies every degree of, as it were, merit, and worthiness. As regards this question of the devotion of the proceeds to charity it is impossible to draw the line at any particular point, and unless you adhere most rigidly to the original principle of the Clause, in which you have regard to takings and not to profits, and give this very reasonable concession of 20 per cent., which I venture to say you will find work extraordinarily well and fair in practice, in order to allow within the limits of exemptions these undertakings which are honestly promoted in the interest of some philanthropic or charitable purpose, you nullify the provision. For these reasons it is impossible that this Clause should be accepted.

:I must confess that the speech to which we have just listened has influenced me considerably, and there are only two points I should like to put. I listened to the speech delivered by the hon. Gentleman opposite (Mr. Lawson) and felt sympathetic towards his point of view, because I wanted to bring forward some specific instances as hard as any he produced. I quite follow that once you depart from the principle of takings and go on to profits, very great difficulties arise. My first point is that I do not think these provisions for exemption of which the Financial Secretary has just reminded the House, are sufficiently well known The other difficulty is a very material one. I was at an entertainment about 3 weeks ago in aid of the Northampton Hospital, and I suppose this kind of entertainment is similar to those from which the hospitals receive a very large percentage of their money. As in this case the villages for 20, 30, or 40 miles around are in the habit of sending patients to the hospital. They organise Saturday afternoon entertainments, and enormous sums of money are raised. I went down to open this particular one, and I was amazed that in one of the very poorest parts of my constituency no less than ÂŁ400 was raised in the afternoon. What was I told by the Secretary? Between ÂŁ80 and ÂŁ90 of that money would go in Entertainments Duty! In this case the entertainment took the character of a dance in which 300 school children were included. They were dressed in favours, and the expense of these had to be borne out of the funds. The Secretary said: "We do not know whether the expenses will amount to more than sufficient to enable us to claim the 20 per cent. deduction." Beforehand, promoters of entertainments of this sort have to decide whether they are going to sell the Entertainments Tax stamps, and they have to apply for the stamps, and in this case they lost a considerable sum of money, because they had not a sufficient local supply of stamps to meet the demand. The point I want to put is this. If the Secretary of a hospital such as this is going to get up an entertainment next year, has he to gamble upon the fact that he will afterwards be able to reclaim the money, or is he to buy the stamps, or is he to undertake the entertainment, and not buy the stamps at all? I should be very grateful if I could have an answer to that, because it seems to me there is a great difficulty in the way of any of these entertainment pro-motors availing themselves of the advice given to my hon. Friend the Financial Secretary in the speech to which we have just listened.

:The speech just delivered by the hon. and gallant Gentleman reminds one that in many colliery districts they have similar experiences in regard to their hospitals. Everybody knows who has any knowledge of mining communities and hospitals that these Saturday afternoon demonstrations should be held, otherwise, without the funds being supplemented in this way, the hospitals would be in a very bad way. The Secretary to the Treasury says he wants some ground upon which he can put his feet before he can agree to this Amendment, and he says it is up to us to suggest something that will be safe. I think the ground should be this. Are these people going to make any personal profit out of it? If that were the test rather than this question of 20 per cent., it would still be a safe procedure with regard to the Entertainments Duty. If the people who are going to give their time to objects of this kind are those to derive no pecuniary advantage, that should be sufficient. The whole of the net receipts after paying expenses ought to go to charitable purposes.

My right hon. and gallant Friend opposite has given a very good illustration. Certain expenses have to be incurred. We do not always get fine days for hospital demonstrations, and on a given Saturday it may be a failure, and yet the same expenses would be incurred for takings amounting to ÂŁ100 as for ÂŁ400. I think the duty under such an arrangement as that is ridiculous. I am quite sure that the Financial Secretary to the Treasury, who is equally interested in these charities, can see that is a position which is often happening. At this time of the year I often go to open these demonstrations on behalf of hospitals. Some Saturdays it is wet and the whole thing collapses, but they have still to pay this 20 per cent. I hope the Financial Secretary to the Treasury will not be adamantine with regard to this Amendment.

:There are instances where a. great hardship is involved in certain entertainments, and I do not think it will be out of place, speaking as one who has had some experience, if I tell the House of one or two instances. I had some connection with a soiree associated with the church in my constituency, and they made a charge of one shilling per head, and although the whole thing was carried out by these people and the food provided and the money was expected to go to a certain fund for the poor, when the entertainment people came forward they said that notwithstanding all this, although you have paid all the expenses and this money has to go to the poor, you must pay the Entertainments Duty. I took the matter up both here and in the village, and the result was that we had to pay the tax. I am quite sure that the Entertainments Duty was never intended to apply to a case like that, because it was for the poor of the district.

There is another case in connection with getting up concerts for charitable purposes which I will mention. When the War was on we got one of the best choirs to come into our town to give a concert in aid of the soldiers and sailors. The first year nothing was charged, but the following years those in charge said, "You must pay the tax." At the end I was compelled to put a big deposit into the hands of the Exchequer before I could arrange for the concert. I had to pay all the expenses myself, and I was not permitted to take anything from the money taken, and not only that, but I had to pay the money direct to the institution and get a receipt before I could get my deposit back.

It never was intended that charitable institutions should be charged with the Entertainments Duty. When there are no profits and the people are giving all their services, then I think it is nothing short of a scandal that we should be asked to pay this duty. In these matters there should be some elasticity so that these people should have the full benefit of the whole thing. I trust the Financial Secretary to the Treasury, if he cannot accept the whole of this Amendment, will do something to alleviate this very great grievance amongst institutions which have to pay the Government a large sum out of money subscribed purely for charitable purposes. I do not think such a duty should be charged at all in those cases when it is clearly proved that the whole of the proceeds are going to a charitable object.

:Whilst I support the object of this Clause, I am afraid the line has been drawn rather too widely. Suppose in a small village or country town a local tradesman thinks he will run a cinema show at a profit. He acquires the lease of a hall and runs the show, and he, perhaps, finds that he may be taking ÂŁ300 a week and his show is costing ÂŁ250 a week to run. Out of that ÂŁ300 the Entertainments Duty amounts to something like ÂŁ70, and after the duty is paid he finds he is running the thing at a loss. What does he do 1 Under this new Clause he will make an arrangement with some local charity. He will innate his costs from under ÂŁ50 to ÂŁ291, and then he will say: "I will pay ÂŁ10 a week to the local charity, and, in fact, where I was losing ÂŁ20 a week I shall be making ÂŁ10 a week." That is possible under the Clause as it is.

I appeal for some concession on the lines of the object of this Clause. In the hard cases which have been set forth by the last speaker the hon. Member paid the Entertainments Duty quite wrongly, and he would have been well advised not to have paid at all. I have had some experience in running entertainments for charitable purposes. The cinema industry is being asked to do it every week and get exemptions from the duty, and there are many ways of doing it. I will give my hon. Friend opposite a tip how to work his show for the hospitals. When you are selling tickets you very often sell a considerable number to people who do not intend to be present. Sometimes they will take ÂŁ1 worth of tickets and they say to you: "You may keep the tickets."

The Entertainments Duty is charged on admissions, and those tickets are sold to people who do not enter, and that money can be put towards the cost of providing the entertainment, and it will help to provide the entertainment. In this way the hon. Member will probably find that he can run that show and cover the costs of his entertainment quite comfortably and not be worried with this tax at all. I was surprised at what was said by my hon. Friend who moved this Clause, because he supported it with an appeal to be allowed to run a permanent cinema for charitable purposes. I cannot help thinking that that has quite a different sound to it. The hon. Member who seconded this Clause and others who have supported it, in talking about occasional entertainments, say that a series of entertainments for a specific purpose once accomplished is finished, but this is a permanent cinema theatre for profit. I am quite sure if it were under the auspices of my hon. Friend it would be run on proper lines; otherwise it might be run on lines such as I have described, the costs being run up within a fraction of the receipts. While I am anxious to support this proposal, I think the best way to accomplish what is aimed at would be to increase the 20 per cent. to 30 per cent., or, at any rate, something more than at present. I do not think that 20 per cent. is sufficient to provide an entertainment. I know in the case of the last one I ran it proved considerably more than 20 per cent., and I got it down by selling ÂŁ20 worth of tickets to people who did not intend to use them, and with this sum helping to pay the costs.

:I, too, have had considerable experience in organising performances at one time or another. I never knew of this 20 per cent. arrangement. I have found that in many places the main difficulty is procuring a hall. The places suitable are very limited in number and one has to take very often the best hall available. It may be very costly for lighting and cleaning, and by the time the proprietor has taken his rent it makes a fairly substantial hole in the 20 per cent. I suggest that in a case like that there should be a little more elasticity with regard to the 20 per cent. in cases where the entertainment is genuinely for philanthropic purposes. I think the Chancellor of the Exchequer might very well extend the principle up to 25 per cent.

:I am sure we are all obliged for the tips we have received how to do it. So far as we on these benches are concerned, we do not want to be taught how to avoid payment of a legitimate tax. We want to be relieved from it, not to avoid it, and we do not want to resort to any of the tricks of the trade in order to get out of it. I have been very much impressed with the two extremes which have been put forward, and it did occur to me that with the wide margin offered those who are responsible could get sufficient protection where the object of the entertainment is genuinely charitable or philanthropic. There may be some frauds, but they can be discovered and dealt with. I am not rising to protest against this tax in the ordinary sense of the word. People who seek pleasure in this way have not, I should say, any very serious or real objection to paying the tax. But coming to the new Clause as submitted here to-day, all of us can associate ourselves with most of the speeches that have been delivered. Take my own constituency as an instance. It is wide and scattered, partly agricultural and partly mining. It has been very much neglected, so far as the entertainment side of the question is concerned. But since the War committees have been formed and associations have been brought into existence for the purpose of raising money to build halls for discharged soldiers and sailors in various places, and in addition to subscriptions raised efforts have been made to get money by means of entertainments.

In connection with the outdoor entertainments, the weather is always an element of danger. Last year because of the wet weather we had many failures. This year, so far, has been extremely fine, and the outdoor shows have done well, but practically every open-air effort last year with which I was concerned proved a failure on account of the wet weather, which practically spoiled every open-air entertainment, with the result that losses were incurred by the promoters. I do not see any difficulty at all in distinguishing genuine and honest attempts for philanthropic and charitable organisations from possible frauds which are almost sure to exist, and those who are responsible can easily discover the fraud. I am not attempting to defend the frauds. All I say is that this subject is worthy of careful consideration.

:The Financial Secretary made out a powerful case for retaining the exemptions as they are at present defined, but as the Debate has continued it has become clear that there are several cases of hardship. I would remind the House that on two occasions this afternoon the Government have granted to charitable societies exemption from Income Tax. In the earlier part of the afternoon it was decided that charities receiving income in respect of land, tenements, etc., should be allowed to receive that income free of Income Tax, and, later on, superannuation funds were exempted from the provisions of the Income Tax Clause. In view of these two decisions already taken by the House, and in view of the universal feeling in every portion of the House, I think that, although it may not be possible to accept the very wide form of words in this Clause, the point put by the hon. Member for Leyton (Mr. Newbould) is deserving of consideration, that the 20 per cent. limit should be increased to 30 per cent.; or, if that be not possible, perhaps some wider form of words could be drafted for the guidance of the Commissioners, so that the Commissioners in different parts of the country, when they come to determine whether the tax is leviable or not, may give attention to the real cases of hardship which the Debate has revealed. Societies of a philanthropic or charitable character should not be taxed by this House, and I am sure it is not the desire of the House that the Entertainments Duty should be levied in the cases to which reference has been made.

Question put, "That the Clause be read a Second time."

The House divided: Ayes, 87; Noes, 165.

Division No. 257.]

AYES.

[8.47 p.m.

Barker, G. (Monmouth, Abertillery)

Halls, Walter

Robinson, Sir T. (Lancs, Stretford),

Bell, James (Lancaster, Ormskirk)

Hancock, John George

Royce, William Stapleton

Benn, Captain Wedgwood (Leith)

Hayday, Arthur

Sexton, James

Bowerman, Rt. Hon. Charles W.

Hayward, Evan

Shaw, Thomas (Preston)

Bramsdon, Sir Thomas

Hirst, G. H.

Short, Alfred (Wednesbury)

Bromfield, William

Hodge, Rt. Hon. John

Smith, W. R. (Wellingborough)

Brown, James (Ayr and Bute)

Hogge, James Myles

Spencer, George A.

Cairns, John

Holmes, J. Stanley

Stanton, Charles Butt

Cape, Thomas

Irving, Dan

Swan, J. E.

Carter, W. (Nottingham. Mansfield)

Jesson, C.

Thomas, Rt. Hon. James H. (Derby)

Casey, T. W.

Kennedy, Thomas

Thomas, Brig.-Gen. Sir O. (Anglesey)

Clynes, Rt. Hon. John R.

Kenworthy, Lieut.-Commander J. M.

Thomson, T. (Middlesbrough, West)

Collins, Sir Godfrey (Greenock)

Kenyon, Barnet

Thorne, G. R. (Wolverhampton, E.)

Davies, Alfred Thomas (Lincoln)

Kiley, James Daniel

Tootill, Robert

Edwards, C. (Monmouth, Bedwellty)

Lawson, John James

Walsh, Stephen (Lancaster, Ince)

Edwards, G. (Norfolk, South)

Lunn, William

Waterson, A. E.

Evans, Ernest

Maclean, Rt. Hn. Sir D. (Midlothian)

Wedgwood, Colonel Josiah C.

Finney, Samuel

Mallalieu, Frederick William

White, Charles F. (Derby, Western)

Frece, Sir Walter de

Mills, John Edmund

Wignall, James

Galbraith, Samuel

Morgan, Major D. Watts

Williams, Aneurin (Durham, Consett)

Glanville, Harold James

Murray, Dr. D. (Inverness & Ross)

Williams, Col. P. (Middlesbrough, E.)

Goff, Sir R. Park

Myers, Thomas

Wilson, Rt. Hon. J. W. (Stourbridge)

Graham, D. M. (Lanark, Hamilton)

Newbould, Alfred Ernest

Wilson, W. Tyson (Westhoughton)

Graham, R. (Nelson and Colne)

O'Grady, James

Wintringham, Thomas

Graham, W. (Edinburgh, Central)

Parry, Lieut.-Colonel Thomas Henry

Wood, Major M. M. (Aberdeen, C.)

Gray, Major Ernest (Accrington)

Raffan, Peter Wilson

Young, Robert (Lancaster, Newton)

Gretton, Colonel John

Ramsden, G. T.

Grundy, T. W.

Rendall, Athelstan

TELLERS FOR THE AYES.—

Guest, J. (York, W. R., Hemsworth)

Richardson, R. (Houghton-le-Spring)

Mr. T. Griffiths and Mr. Neil

Hall, F. (York, W.R., Normanton)

Roberts, Frederick O. (W. Bromwich)

Maclean.

NOES.

Adair, Rear-Admiral Thomas B. S.

Flannery, Sir James Fortescue

M'Connell, Thomas Edward

Adkins, Sir William Ryland Dent

Foreman, sir Henry

M'Curdy, Rt. Hon. Charles A.

Agg-Gardner, Sir James Tynte

Fraser, Major Sir Keith

Macdonald, Rt. Hon. John Murray

Amery, Leopold C. M. S.

Fremantle, Lieut.-Colonel Francis E.

Mackinder, Sir H. J. (Camlachie)

Armstrong, Henry Bruce

Gee, Captain Robert

McLaren, Robert (Lanark, Northern)

Ashley, Colonel Wilfrid W.

Gibbs, Colonel George Abraham

McMicking, Major Gilbert

Atkey, A. R.

Gilmour, Lieut.-Colonel Sir John

Macpherson, Rt. Hon. James I.

Balfour, George (Hampstead)

Green, Joseph F. (Leicester, W.)

Macquisten, F. A.

Barlow, Sir Montague

Gritten, W. G. Howard

Maddocks, Henry

Barnston, Major Harry

Hacking, Captain Douglas H.

Manville, Edward

Barrand, A. R.

Hall, Lieut.-Col. Sir F. (Dulwich)

Mason, Robert

Barrie, Charles Coupar (Banff)

Hamilton, Major C. G. C.

Molson, Major John Elsdale

Bell, Lieut.-Col. W. C. H. (Devizes)

Harris, Sir Henry Percy

Mond, Rt. Hon. sir Alfred Moritz

Bellairs, Commander Carlyon W.

Henderson, Major V. L. (Tradeston)

Moreing, Captain Algernon H.

Betterton, Henry B.

Herbert, Dennis (Hertford, Watford)

Morison, Rt. Hon. Thomas Brash

Birchall, Major J. Dearman

Hewart, Rt. Hon. Sir Gordon

Morris, Richard

Blair, Sir Reginald

Hilder, Lieut.-Colonel Frank

Murray, Hon. A. C. (Aberdeen)

Bowles, Colonel H. F.

Hinds, John

Murray, Hon. Gideon (St. Rollox)

Bowyer, Captain G. W. E.

Holbrook, Sir Arthur Richard

Murray, William (Dumfries)

Brassey, H. L. C.

Hope, Sir H. (Stirling & Cl'ckm'nn, w.)

Neal, Arthur

Breese, Major Charles E.

Hope, Lt.-Col. Sir J. A. (Midlothian)

Newman, Sir R. H. S. D. L. (Exeter)

Broad, Thomas Tucker

Hopkins, John W. W.

Nicholson, Reginald (Doncaster)

Brown, T. W. (Down, North)

Hopkinson, A. (Lancaster, Mossley)

Nield, Sir Herbert

Bruton, Sir James

Horne, Edgar (Surrey, Guildford)

Norris, Colonel Sir Henry G.

Buckley, Lieut.-Colonel A.

Horne, Sir R. S. (Glasgow, Hillhead)

O'Neill, Major Hon. Robert W. H.

Bull, Rt. Hon. Sir William James

Hunter, General Sir A. (Lancaster)

Parker, James

Carter, R. A. D. (Man., Withington)

Jellett, William Morgan

Pearce, Sir William

Chadwick, Sir Robert Burton

Jodrell. Neville Paul

Pease, Rt. Hon. Herbert Pike

Chamberlain, Rt. Hn. J. A.(Birm., W.)

Johnson, Sir Stanley

Peel, Col. Hn. S. (Uxbridge, Mddx.)

Churchman, Sir Arthur

Jones, Sir Edgar R. (Merthyr Tydvil)

Pennefather, De Fonblanque

Clough, Sir Robert

Jones, Sir Evan (Pembroke)

Perring, William George

Coats, Sir Stuart

Jones, G. W. H. (Stoke Newington)

Pinkham. Lieut.-Colonel Charles

Cobb, Sir Cyril

Jones, Henry Haydn (Merioneth)

Pollock, Sir Ernest Murray

Colvin, Brig.-General Richard Beale

Jones, J. T. (Carmarthen, Llanelly)

Prescott, Major W. H.

Conway, Sir W. Martin

Joynson-Hicks, Sir William

Pretyman, Rt. Hon. Ernest G.

Dawes, James Arthur

Kellaway, Rt. Hon Fredk. George

Purchase, H. G.

Denniss, Edmund R. B. (Oldham)

Kelley, Major Fred (Rotherham)

Rae, H. Norman

Doyle, N. Grattan

Kidd, James

Raper, A. Baldwin

Edgar, Clifford B.

King, Captain Henry Douglas

Rees, Capt. J. Tudor- (Barnstaple)

Edwards, Major J. (Aberavon)

Law, Alfred J. (Rochdale)

Reid, D. D.

Edwards, Hugh (Glam., Neath)

Lewis, Rt. Hon. J. H. (Univ., Wales)

Renwick, Sir George

Elliot, Capt. Walter E. (Lanark)

Lloyd, George Butler

Richardson, Alexander (Gravesend)

Falle, Major Sir Bertram Godfray

Lloyd-Greame, Sir P.

Roberts, Rt. Hon. G. H. (Norwich)

Fell, Sir Arthur

Loseby, Captain C. E.

Roberts, Samuel (Hereford, Hereford)

Rodger, A. K.

Sugden, W. H.

Watson, Captain John Bertrand

Royds, Lt.-Colonel Edmund

Surtees, Brigadier-General H. C.

White, Col. G. D. (Southport)

Samuel, A. M. (Surrey, Farnham)

Sutherland, Sir William

Williams, C. (Tavistock)

Scott, A. M. (Glasgow, Bridgeton)

Taylor, J.

Williams, Col. Sir R. (Dorset, W.)

Seddon, J. A.

Thomas, Sir Robert J. (Wrexham)

Wise, Frederick

Shaw, Capt. William T. (Forfar)

Thomson, F. C. (Aberdeen, South)

Wood, Hon. Edward F. L. (Ripon)

Shortt, Rt. Hon. E. (N'castle-on-T.)

Thomson, Sir W. Mitchell- (Maryhill)

Wood, Sir H. K. (Woolwich, West)

Simm, M. T.

Tryon, Major George Clement

Worsfold, T. Cato

Smith, Sir Malcolm (Orkney)

Turton, Edmund Russborough

Young, E. H. (Norwich)

Stanier, Captain Sir Beville

Wallace, J.

Stanley, Major Hon. G. (Preston)

Waring, Major Walter

TELLERS FOR THE NOES.—

Sturrock, J. Leng

Warren, Sir Alfred H.

Colonel Leslie Wilson and Mr.

Dudley Ward.

NEW CLAUSE.—(Amendment of 10 Edw. VII, c. 8, Section 48.)

Section forty-eight of the Finance (1909– 10) Act, 1910 (which provides for a duty on purchases of intoxicating liquor to be supplied in a club), shall have effect as if "threepence " were therein substituted for "sixpence."—[ Mr. R. Richardson. ]

Brought up, and read the First time.

:I beg to move, "That the Clause be read a Second time."

9.0 P.M.

Whatever impression I may be able to make on the Chancellor of the Exchequer, I feel that my case is a just one. I feel convinced that if the right hon. Gentleman had been Chancellor when the tax was first imposed he would never have dreamt of getting the money that he is getting by this tax. It was levied in 1910 for the first time, and the revenue derived from it was in the region of £8 per club. The War came in 1914, and since then the tax has been increased to an enormous extent. Instead of £8 per club they are now getting something like an average of £38. If you take the ordinary working-man's social club the average is something like £83—a taxation which the then Chancellor never hoped to get. One would think that the taxation levied on the beer and spirits supplied to the members of clubs could only increase as a result of increased sales, but that is not the fact by any means, for since 1914 the sales have come down, but despite that fact the tax collected in 1914 from clubs was £63,000, and in 1920 it was £380,000. Clubs are bound by law to prove that they are bonâ fide clubs. They must provide other things than a glass of beer. They must have their reading rooms and libraries, they must do something for recreation, they must do something for the social side of life, and without being told by the Government they do a great deal for the health of the members. The incidence of this tax is making that nearly impossible, and if it is allowed to go on many of them must go under because they will not have the money to do the work the Government says they must do. In 1914 the taxation on beer was 8s. a barrel. To-day it has risen to 100s.; so, instead of paying 2½ per cent. on 8s., as in 1914, we are paying 2½ per cent. on £5 in 1920. Had the right hon. Gentleman been Chancellor of the Exchequer, and known What the incidence of the tax would be so much altered between 1914 and 1920, I think a different system would have been instituted. Spirits, which were 23s. per proof gallon in 1914, are to-day 94s. 6d. and clubs must pay 2½ per cent. of 94s. 6d., as against 23s. But it affects us still further. Clubs have done their level best to educate their people, so that they may become good citizens. We have men at college trying to take in what it is necessary that they should impart to their fellows on coming back. There are men who are studying local legislation and economics, and take every subject which will be of advantage to their fellow workmen, and we are hoping that when they come back to us they will disseminate that knowledge, assisted by the generosity of the clubmen who have sent them to college. Again, we are sending students to the secondary schools—the children of our members who are fitted to take a secondary education—and because there are not enough places for them we are doing our best to aid the children of parents who cannot afford to pay the fees. All these things are being sadly affected by the incidence of this tax, and therefore we urge that the right hon. Gentleman should take these matters into consideration. Still further, these societies are not run for profit, and no profits are divided amongst the members. They spend the whole of what they make in doing good, not only for their own members, but for outside charities as well. The hospitals are very well looked after by them. The balance sheets of the clubs which come under my notice would make interesting reading for hon. Members. Every charitable organisa- tion that comes under their notice secures subscriptions from them. The societies for the Prevention of Cruelty to Children and Animals come under their notice, and money is willingly subscribed. The Churches derive a good deal of money from them. The Salvation Army, Sunday Schools, and Churches of every description have received money at their hands when they have been in dire straits. Many children of parents who could not afford to feed and clothe them have, by the munificence of members of clubs, been fed and clad as well. So that when we do not divide our money, but give it to such objects as these, we claim at the hands of the Chancellor of the Exchequer that something ought to be done to relieve us from the tax.

I plead for yet another section of people. The men who went to France to fight our battles have come home imbued with the spirit of comradeship, and large numbers of them belong to these clubs, and the incidence of this tax is just the line of demarcation between success and failure. Many of them already have gone under, I am sorry to say, because the club, although it supplies a glass of beer or spirits, is to my mind an institution that is absolutely essential to our mining and agricultural communities. The Government have acknowledged that by giving grants to our Village Clubs Association in the past, and I hope they are going to continue to do it. It is a very drab life that many of us live in the country, with drab surroundings, If you take into consideration the houses in which we have to live. If it were not for the clubs drunkenness would be very much on the increase. I shall be told that the ordinary licensed house has to pay licence duty, and that it would be unfair for the club to go free. My reply is that during the War a concession was given to licensed houses. The revenue collected for licences in 1914 was ÂŁ4,432,807, and in 1920 ÂŁ3,727,000. The clubs in 1914 paid ÂŁ63,048, and in 1922 ÂŁ380,000, so that it cannot be said that the clubs have been treated as generously as the licensed premises. Our claim is just, and we ought not to be called upon to pay such an excessive amount of taxation.

:I beg to second the Motion, and I do so with all the enthusiasm at my command. When this question was last debated on the Committee stage, an appeal was made by the Chan- cellor of Exchequer in connection with the Clause which was moved. There is no hon. Member who does not realise the enormous work done by, and the importance of, these working men's clubs. It is the working men's clubs which one has in mind when dealing with this tax. What do we see at present? There are reductions in wages all the way round, and unless we are going to have some concommitant reduction in the cost of the necessities of life, and, therefore, an increase in the purchasing power of the wages, the thing will not be a success. The Chancellor of the Exchequer and many hon. Members may ask whether beer is a necessity of life. [HON. MEMBERS: "Yes."] I agree that it is; but I will put it less clumsily than that. If a man likes a glass of beer, there is no reason on earth why he should not. If I go into any workman's club to-day—and I speak with particularity of my own constituency —I find that the tax paid is six times as great as it was in 1914. The Solicitor-General on the Committee stage never— and I say it with great respect—dealt with the merits of the tax. He never dealt with the fact that it is a tax on a tax. He referred to the way in which clubs were hit less hardly than licenced houses. Surely that is an invidious distinction to make, especially when one remembers that the licence holders to-day are paying less than they did in 1914, whereas clubs are paying six times as much. The Solicitor-General said:

"I am going to plead what I think is really the only justification for a tax at all, and that is that the State wants the money." —[OFFICIAL REPORT, 21st June, 1921; col. 1323, Vol. 143.]

There was no answer to the point we raised. He went on to say:

"At the present time the licence holders suffer a taxation considerably more severe than do clubs. In answer to a question the figures were given the other day by the Financial Secretary to the Treasury. To that extent clubs do enjoy a privilege and advantage over the public house."—[OFFICIAL REPORT, 21st June, 1921; col. 1324, Vol. 143.]

The Chancellor of the Exchequer later on appealed to the Committee on the grounds that the proposal would cost something like £80,000 or £90,000. I suppose that now we are appealing for a reduction of the tax from 6d. to 3d. instead of to 4½d. as on the previous occasion, the sum lost to the State would have to be doubled to make it applicable to the present occasion. Because you want the money you should not appeal to the House to vote the money simply because you are going to get it. You should not ask the House to vote it unless you are going to get it upon a principle which you can justify. This is a tax upon a tax, and that is a principle which cannot be justified. This is the only instance upon which such a tax has been levied. It is true that it has been levied since 1910, and that until 1914 this tax of 6d. in the pound was not felt, because the price of the commodity was then six times less than it is now. If the Chancellor of the Exchequer cannot accept the Amendment, I suggest he should accept the Amendment in the name of the hon. Member for York (Sir J. Butcher) to reduce the tax from 6d. to 4½d.

:There is one aspect of this question which the Chancellor of the Exchequer will not deny, and that is that this tax has worked out in a way that no one anticipated when it was imposed. It was imposed at 6d. in the pound on the consumption of liquor, when liquor was fairly cheap. Whether it was right or not I am not proposing to inquire. What has happened since? The taxation upon liquor has gone up three or four times, perhaps more.

:The working man at his club has not only to pay an enormously increased price for his liquor, but he has to pay a very largely increased amount on account of the tax, by reason of the fact that the liquor costs him more. He does not drink more liquor; so far as I can judge, he drinks less liquor. On the one hand, he pays far more for his liquor, five or six times more, and he has to pay a greatly increased amount in taxation. When my right hon. Friend finds that the tax works out in a manner that no one would have contemplated, and to which no one would have assented if he had contemplated it, he ought to give some relief. At 4 o'clock in the morning on 22nd June, when this Amend- ment came on in Committee, the right hon. Gentleman was challenged to give a precedent for a tax of this sort. I know of no other similar case. The only justification is that we want the money. I sympathise fully with the Chancellor of the Exchequer in this matter, and if he were going to lose some millions of pounds by granting this concession there would be a great deal to be said for declining to accept the Amendment. But when he is going to lose something like. £150,000 under the Amendment of my hon. Friend or £90,000 or something less if the Amendment were accepted in the form in which I proposed it, could he not go some way in the direction of what is reasonable and just? If you could take 1d. or 1½d. off as an admission that the tax is unreasonable, the clubmen would accept it as an instalment of what he may be able to do when times get better. Workmen's clubs are now a part of the settled institutions of this country. This matter chiefly affects workmen. Workmen's clubs to-day are very different from what they were 20 years ago. They are the centre of recreation and of social and very often educational activity. Connected with them are cricket, football, billiards, and very often lectures and things of that sort. Men do not go there mainly to drink. I will therefore urge my right hon. Friend to make some concession which would be an admission that he understands the great hardship involved in this tax and would be an earnest that when times improve and when he has more money he may go somewhat further in relieving this heavy burden.

:This Amendment is an instance of the difficult position in which we are placed. Owing to the financial difficulties of the country taxation is necessary, but whenever it is imposed there is always a certain number of people who say the taxation ought to be reduced in our particular case. The hon. and learned Member for York (Sir J. Butcher) has said that workmen's clubs to-day are very different from what they used to be, that men do not go there to drink, but rather to play billiards and do other things. In that case this Amendment would have no effect. This Amendment would have the effect of allowing a man who wanted something to drink to get it a little cheaper. If he merely went to play billiards and did not want anything to drink the Amendment would not matter.

:I did not say that he went entirely to play billiards, but drinking is not his main object, and, like most other persons in this House, he sometimes combines drinking a glass of beer with other intellectual occupations.

:That is not the point. I was stating what my hon. Friend himself stated a few moments ago. I pointed out that if the individual to whom my hon. Friend alluded went to this Club with the object of having a game of billiards the alteration of this tax would not interfere with him one way or the other. Somebody has got to pay, and is it hard to say to a man, "You are not obliged to pay. If you do not like to pay you need not drink; but if you do drink you have got to contribute something as your share of the burden of taxation imposed upon this country"? Now that we have raised the Income Tax limit this is very largely, except in the case of tobacco and tea, the only occasion which many people contribute anything.

:How many hon. Members opposite use dried fruits? I venture to say not one. Nothing is contributed, with the exception of beer, tea, and tobacco, by a very large number of people, and if they smoked less it would be very much better for their health and for their pockets. Those are the only contributions which are made by a very large number of people to the expenses which the country has to meet. In those circumstances I trust the Government will not give way.

:I support the Clause because I hold the theory that when a genuine body of men combine together to provide the amenities that they cannot provide in their own home, they have exactly the same rights as the man who can provide these amenities in his own home. Looking at the matter from that standpoint, I believe that a body of workmen or any other men who combine in a club in this country to provide certain amenities for themselves without any idea of making profit ought to have with regard to the amenities which they pro- vide, the same liberty and the same treatment as the man who has them in his own home. Feeling that these men have the right to that treatment, and knowing that the man who has his own cellar is not required to pay this tax—

:I decline to be drawn from my philosophy by these loose remarks. Believing, in a word, that when a genuine collection of men combine together to provide reasonable amenities they have the right to make their club their second home, and to have in it every right that a man has in his own home. I shall vote for the Clause. So far as the club which exists purely for drinking is concerned, whether it be a workmen's club or, what is much more likely, a West End club, I would not mind if it were extinguished, but I am thinking of the genuine institution and I believe that the members of such an institution have the same right there as they have in their own home.

:This new Clause seems to be the first real attempt of my Friends in the Labour party to get in with the liquor interest. Hitherto the trade in these islands has been considered the special favourite of the Conservative party. Now my hon. Friends opposite are supporting it themselves. On a question of this sort we should endeavour, if we can, to free our minds from cant. Of all the canting hypocrisy it is possible to imagine the worst is that which says that the vast majority of workmen's clubs in this country are anything whatever but institutions to get round the licensing law. We know that a very large proportion of the workmen's clubs in this country are founded and maintained by brewing companies.

:May I assure my hon. Friend that the union in which I am interested has over two thousand clubs, and has actually refused to take in any club managed by a brewer?

:I say from knowledge of my own district that a large proportion of the clubs are financed by the Trade, and I believe that condition maintains in a large portion of the country. The speaker behind me has stated that taxation is six times what it was before the War. The Income Tax and the Super- tax have risen to a figure very nearly approaching six times. [HON. MEMBERS: "More!"] More in many cases. Again, it is said that these clubs are run for educational purposes; does the House believe that that is the case in any but a small proportion of the clubs? Does the House believe that the education of the people would suffer were members to do without any profit earned on the liquor consumed? That profit, of course, does not always go to the club members. The club members are simply dupes in many cases. I should be the first, if these clubs were really benefiting the working classes, to support them, and to endeavour to relieve them of this particular form of licence duty.

We have heard of the educational value of these clubs; we have heard of the reading rooms, sports, and the charities they support. Will they support these charities any worse, will education be any worse, if they reduce the liquor bills they run up in the course of the year? It is perfectly useless to come here with a voice trembling with emotion, as the Proposer of this Amendment, or to be moved to tears by the hardship and privation cast upon our unfortunate fellows of the working classes because they would have to reduce the consumption of beer by a small amount to make up this tax. It is, to my mind, rank nonsense from beginning to end, and those who would benefit if the Amendment were carried would not be the club members, but simply one particular trade.

:I do not take the severe view which has been expressed by the last speaker. So far as my acquaintance with the clubs of this country goes, and it is considerable. I refuse to take part in any such criticism of the way in which they are managed, or the purposes for which they exist. I recognise them as institutions which have become a permanent part of the life of this country, and I think, instead of condemning them, if there are cases in which condemnation is required—as I am sure there must be, for their members are, after all, human—I think it would be better to improve them than to cast universal criticism on an institution which has spread wide over the land, which almost amounts to a condemnation of the whole of the body of people who resort to what the hon. Gentleman opposite has described as a "second home."

Having said so much about the character of these institutions, I am bound also to say that I agree with some of the remarks made, that taxation has grown upon them in a way in which it has not grown upon public-house licences. The reasons are not difficult to find. In the case of the public-house licence the licence duty is based upon the annual value of the premises. The reason why you have a different form of duty on clubs is that you cannot apply the public-house licence system to the clubs. Supposing you had proposed to tax the clubs according to their annual value, it is perfectly plain you would put the heaviest taxation upon those clubs which have other objects than the drinking bar. The more they provided other things, the worse they would have been taxed. You had to find some other principle of taxation to apply, and in the result it was thought best to tax them upon the basis of the amount of liquor which was purchased, and that they should be taxed on the annual consumption at the rate of 3d. in the ÂŁ. But by Amendments in this House that came to be altered to a tax of 6d. in the ÂŁ upon the amount of liquor purchased. That has had a very anomalous effect as liquor has risen in value. But do not let us get this out of perspective. Everybody who has drunk liquor in a club, in his own house, or in a public-house, has had to pay immensely more for liquor than before the War, so that we are all liable to that disability.

The second point is that it is a tax upon a tax. But it was a tax upon a tax when it was initiated. No one contends that the value of a bottle of whisky, or beer, is intrinsically what is charged for it. Whisky, which is the main product of my native country in the region of liquor, pays I do not know what proportion of duty, but it is enormous in comparison with the intrinsic value of the article. Therefore, this duty was a tax upon a tax from the beginning, and has only become exaggerated as the taxation upon liquor has increased. I do not know whether anybody has yet discovered a better means for the taxation of clubs, but what I wish to put to the House is this: As I have said, I recognise the value of these clubs, but we are in a time when I have been appealed to from the Benches opposite to lower the duty on tea, sugar, and other commodities of necessary consumption, and I have found myself unable to do so. Can I say to the House that I have found an opportunity of reducing the tax on liquor? Quite frankly, I must say to the House that in the position in which I find myself, 1 cannot follow the Mover and the Seconder of this Clause. It is not that I do not appreciate the anomalous position which has been brought about by the taxation imposed upon clubs under present conditions. I realise that to increase that taxation by such a multiple was not within the original contemplation, but in my view the only way in which you can avoid putting a lax upon a tax is to find some other way in which to. tax clubs as distinct from public houses. I for one, believe that the clubs of this country have as members the great body—perhaps that is an exaggeration—but a very large number, of the patriotic citizens of this country. I am perfectly certain, having regard to the difficulty in which we find ourselves, once the matter is explained they will not object for the present to bear part of the burden which we are all sharing in common, and in the meantime I will undertake to address my attention to the possibility of discovering some other way in which taxation may be managed so as to get rid of the difficulty.

:A very little consolation has been thrown out by the right hon. Gentleman in regard to what may be done in the future, but nothing whatever has been said to console the supporters of this Clause, in regard to one of the pressing needs of the clubs at present. I am glad the right hon. Gentleman formally repudiated the general statement made in relation to clubs by the hon. Member for the Mossley Division (Mr. Hopkinson). The sweeping, indeed almost furious, condemnation of clubs indulged in by the hon. Member cannot have arisen from any experience at all, or from anything like close observation of the clubs in his own district, of which district I know something. On the assumption that the hon. Member Is willing to have his education in this respect improved, I hope those concerned will take him in hand and see that he is properly informed. It is true that in many parts of the country the club affords to a large number of the best citizens of the land an escape from what are frequently intolerable town and house conditions. Hundreds of thousands of families in this country are housed in habitations of four rooms each—very often large families. No chance there for a spare room for study; no library; no billiard room; no smoking room— none of that accommodation which is the common property and enjoyment of the more favoured sections in this country. The workman is driven, if he is to live up to anything like the standard set for him, to furnish himself with a club by means of such humble collective action as he can, that he may have opportunities for recreation, for wholesome social intercourse, and also—as I know from visits to these clubs—opportunities for beneficent education. I therefore hope hon. Members, even though financial necessity drives them into the Lobby against this proposal, will not form any wrong impression as to the position of workmen's clubs in this country from what has been said by the hon. Member for the Mossley Division.

I will not call this so much a tax upon a tax as a tax upon a sum which has already been taxed. With that point I do not think the Chancellor of the Exchequer dealt in a satisfactory or sufficient way. I think he will admit that there is no corresponding instance to this particular instance. I do not know of any instance where you first tax a sum in toto and then settle down to tax it in detail. That is really the position in this case. Assume that a club in a year spends upon drink a total of ÂŁ200. On that sum they have to pay what the law exacts in respect of the tax upon the article, and then by the present law, the Chancellor adds a further tax per ÂŁ upon every ÂŁ spent. That is surely an unparalleled way of exacting national revenue, and it is to my mind wholly unjustifiable I think the right hon. Gentleman himself felt that no adequate defence of it could be offered, and therefore has asked us to be content with some promise in respect of the future. It is no use seeking to justify taxes merely upon the ground of sheer necessity. If you are always to allege that the end justifies the means, how many things shall we have to condone, to justify, and to tolerate? Surely some principles of equity and justice must enter, even into the question of getting revenue. I have personal knowledge of a very considerable club in the Manchester area, where something more than ÂŁ200 a year is paid in the form of this tax. I am told that sum formerly went to the support of a convalescent home, and to various charitable and social and educational institutions, to which the members subscribed, for the benefit either of themselves or occasionally of their children. All these institutions have suffered, because the right hon. Gentleman is now taking, for the purposes of the national revenue, the money which formerly was subscribed for these purposes of benevolence. I ask the right hon. Gentleman to return to the subject in the spirit of conceding some part of what is here asked for. I think a case can be made for the dropping of the whole of the tax, but that is not the purpose of the Clause which asks that it should be reduced by one-half. I appeal to the right hon. Gentleman if he cannot see his way to go the whole length, at least to concede something now.

:I am very glad the Chancellor of the Exchequer has gone so far as to admit that this is a perfectly indefensible mode of taxation, and to say that at the earliest possible period he will endeavour to put it upon a basis that will prevent it working, as it does at present, with unanticipated injustice. If a tax is put upon a club, estimated to cost the club in one year £8, and if next year the cost is £38, because meanwhile a tax has been put upon the article which is the basis of the club tax, it is rendered impossible for a club to carry on whose finances are always at a fine point as to whether they will balance or not. It is impossible to carry on that club with any certainty, and that condemns the principle and the basis upon which such taxation is charged. The Chancellor of the Exchequer has got to change it. No one sympathises with the ground of the tax. What the clubs say is this, that this year they are perfectly content that the right hon. Gentleman should admit the principle and redress the grievance next year, but that he should give them some little earnest of the fact that he intends to do so by making a reduction now, however small. I propose to the Chancellor of the Exchequer that as this is 2½ per cent., or 6d. in the pound, he should take off the ½ per cent. as an earnest of his intention to redress the whole grievance next year. My proposal would make a difference of about £70,000. I think the whole tax raises about £380,000, and a ½ per cent. off would mean a reduction of about £72,000. If he does not like to do it that way, he could take 1d. off the 6d., which would be one-sixth, or £63,333. A small reduction of that kind would give an enormous amount of satisfaction to the working classes of this country, and they would feel that this Government, whilst professing to sympathise with them, really mean to do something for them. I appeal to the Chancellor of the Exchequer, even if it were merely a political move, though I do not really put it on that basis, to give this small concession.

:I am going to strengthen the appeal which has been made to the right hon. Gentleman in regard to this tax. He seemed to me rather to avoid the point before the House in his reply. He referred at considerable length to the duty which we must all pay on wines and spirits and beer, but he overlooked the point that this is somewhat in the nature of a licence duty, and far from clubs having a preferential advantage as against the licence holders, the club which has a small membership is really paying more than the licence holder. This is really a duty of 2½ per cent. on turnover. I was engaged last year on the assessment of licensed property in connection with the quinquennial valuation, and the effect of the increased licence duty on the licence holder was that it reduced the monopoly value of the public-house, and, although it has been said that the licence paid by a licence holder last year was less than in 1914, it will be still less this year, because, by reason of the quinquennial valuation, almost every public-house in the Metropolis, without exception, has its monopoly value, or rateable value, reduced, and inasmuch as the licence duty is based on the rateable value of the property, it has this effect, that a house in London doing the same turnover as a club is not paying really more than 2 per cent. licence duty, because the average of a public-house with a small turnover, worked out in the Metropolis, approximated to about 4 per cent. on the turnover, and inasmuch as the licence duty is half, or less than half, it cannot be more than 2 per cent.

There is a widespread belief that the club has a great advantage as compared with the licence holder in regard to licence duty, and the hon. Member for Mossley (Mr. A. Hopkinson) said the clubs were almost exempt, but as a matter of fact, as it operates to-day, with the increased charge, having regard to the Excise duty inflating the cost of beer and spirits, it has had the effect that the clubs are paying a most unfair proportion compared with the licence holders. I urge the Chancellor of the Exchequer to examine the question from that point of view and to look into the result of the last quinquennial valuation in London. If he will do so, he will find such a shrinkage in the monopoly value of public houses that the duty now paid is less in regard to the small house than is paid by the club. Having regard to the amenities of clubs and the importance of fostering them in London and the provinces, I urge the right hon. Gentleman to take that point of view into consideration, and to see whether he cannot now make some small concession.

:Some months ago I had some investigations made in various parts of the country in regard to this question of the taxation of clubs in comparison with licensed houses, and there is no doubt that, as compared with the period before the War, the clubs are much more highly taxed than they were. In regard to the comparison on the basis of the quantity of wines, spirits, and beer purchased and sold, in some cases the club paid rather more than a similar licensed house in the same district, and that generally applied to the smaller clubs doing a small trade in that particular class of goods. On the other hand, I found in other parts of the country that the club paid considerably less than the licensed house. The general result of that investigation, in regard to which I have not now got the exact figures, was that clubs doing a large business in comparison with licensed houses doing a large business, were still paying substantially less. The whole position is one which it is very difficult to deal with. Undoubtedly there is a class of club in this country which is really and substantially a public-house, but on the other hand there are clubs, and a large number of them, such as have been eulogised by hon. Members, and so far as my own knowledge goes, which is not altogether limited, those eulogies refer to a large number of clubs in this country. I would suggest to the Chancellor of the Exchequer that it is a great mistake to allow a serious grievance to rankle in the minds of the large numbers of people who belong to these clubs and that it would be wise on his part to make some concession which would remove this grievance which rankles in their minds to an extent far beyond the amount of money involved.

In the early portion of the Debate, an hon. Member said that the brewers would be very much advantaged if the Amendment were agreed to. Something of that kind was said some years ago, but I can tell the House that a good many brewers have badly burned their fingers over their transactions with clubs. Clubs generally are not financed by brewers, and those clubs which are unsound and shaky and in an unsatisfactory financial position borrow money elsewhere, but clubs which are well managed do not want a loan from anybody, and those brewers who made loans in the earlier days generally found that they were not paid, and so it did not go on. Clubs, generally speaking, stand on their own financial basis and buy their beer, or wines, or spirits on the ordinary trade terms. As regards the remark that clubs have to charge their members more because of the high rates of taxation, I do not think the facts quite bear that out, and I know of cases where clubs are doing a large business and making substantial profits. Though I should not support the Amendment before the House, I would strongly urge the Chancellor of the Exchequer even now to make some small concession, because I do not think that a matter of ÂŁ50,000 or ÂŁ60,000 is really of any account, compared with the satisfaction that such a concession would give.

:I would like to point out, in reply to the argument put forward by the hon. Member for Mossley (Mr. A. Hopkinson), that some of these clubs pay a sum in some cases amounting to a considerable amount as a salary to a person whose duty it is to see that no persons other than members enter the club. In one division, taking 62 workmen's clubs, ÂŁ966 14s. 5d. was paid in doorkeepers' wages alone, whose duty it was to examine the membership card of every person claiming to enter the club. That, I think, rather neutralises the argument of the hon. and gallant Member who has just sat down (Colonel Gretton), because it shows that these are real clubs, although in many cases humble. In this one division they have paid sums varying from ÂŁ22 to ÂŁ171 in their respective clubs, making a total of ÂŁ4,226 1s. 8d. paid in the one division alone from workmen's clubs of this class. The clubs in the constituency which I represent have in addition to their other activities their own libraries. They run all sorts of outdoor activities which tend to reduce the alcoholic habit, if one may say so. These activities have done more by taking the people out of doors and away from the drinking atmosphere than any other influence which has been developed in the last quarter of a century. In addition to that, they go in for educative work and other ameliorative work, and they help their needy members to keep out of destitution. All that is done out of the club's sellings. As the right hon. Member for Miles Platting (Mr. Clynes) has said, this can be by no means compared with the ordinary publican selling for profit, though it can be compared with the co-operative transactions in other spheres, and I suggest that the Chancellor of the Exchequer might consider this in order to meet the ' wishes of those who represent the club system. If you only regard it from the motive of expenditure, it would be a good investment, and the very fact that the members of such clubs know they are being penalised when there is no cause for it, is the very thing to make them think, when they are giving their votes, that they should give their votes against the Government even when otherwise they would not do so.

:We have had most varying theories suggested as to the demand made on the clubs as compared with those made on the public-house and, possibly, they may be misleading. I should like to ask the Chancellor of the Exchequer if he can give us any definite figure as to the amount of licence duty paid in both cases? I know that clubs and public-houses vary in size and dimension, and it is misleading to take one case against another, but perhaps the Chancellor may be able to give us some guidance so that we may see where the injustice, if there is any, exists in this matter.

10.0 P.M.

:I hope the Chancellor will consider and give some indication as to what he is prepared to do to meet the appeals made to him by one hon. Member and another. We are certain to have before long another Licensing Bill. It is in the interests of the public that clubs and licensed houses should be put on balanced, if not identical, lines. As this is the case it is undesirable that there should bee strong and marked division drawn between them in taxation to the disadvantage of either. Those of us who hold that these particular taxes are strongly to the disadvantage of clubs are anxious that that disadvantage should be removed. The only way to make the financial policy consistent is to aim at the approximation and uniformity of treatment in regard to the licence duty.

:There has been a good deal of misapprehension with regard to the actual facts of the case, because of licences being required both for consumption off the premises as well as far consumption on the premises. The only comparison that can be made is for on-licence premises and clubs. The amount of duty paid by clubs in England in connection with the existing duty is ÂŁ40 per annum and the amount paid by public-houses is ÂŁ43 per annum. In Scotland it is ÂŁ15 per annum for clubs and ÂŁ35 per annum for a public-house, so that more is paid in duties at the present time by the clubs in England and in Scotland. I recognise that the increase of club duty has been very much greater than licence duty for public-houses. At the same time I recognise, as one hon. Member has said, that one of the reasons that would make it unwise to deal with this matter at this juncture is that we are likely to have legislation dealing with this whole matter before long, and when that legislation is brought forward we shall have more knowledge as to what is required.

:The right hon. Gentleman in giving the figures for clubs has excluded those minor clubs which are open for drinking purposes only for brief intervals and where there is very little consumption of drink, such as cricket clubs and cycling clubs, and where consequently the profit is reduced below what it ought to be to strike a true percentage. As far as my experience goes the working man's club yields a revenue a good deal above the average suggested by the right hon. Gentleman. I do not wish to travel over the ground which has been well travelled over before But I would like personally to protest against the scandalous attack made earlier in the Debate upon clubs. Any of us who have experience of clubs know that the attack was entirely unjustified. I think I am correct in saying that for it population the borough which I represent, Swindon, probably has more clubs per population than any other part of England, and I am able to say that from statistics it was well down in the list for drunkenness, and I think one is entitled to infer from that fact that the club life in that borough has been conducive to good living. I join with other hon. Members in resisting the Government's attempt to continue this taxation in its present form. I do not think it is any answer to say that every other form of taxation has increased. The increase in all other directions has been deliberately made for the purpose, and properly made, of meeting the increased cost of government in this country, and for that reason I think we are perfectly justified in asking the Government to accept the Amendment.

:I want to direct the attention of the friends of the clubs to this fact. In 1909 those of us who advocated the principle of the club movement felt we had suffered defeat when the clubs had special taxation inflicted upon them. I am one of those who believe that the club, as my hon. Friend (Sir F. Young) has said, is for the working man what the well-to-do person is able to provide for himself. The club movement has been a beneficial movement in this country. I have been a secretary of a working man's club in my time and T should certainly and unhesitatingly repudiate the picture that has been drawn to-night. Undoubtedly there are some clubs guilty of lapses. I have never yet found any body of human beings who were not also liable to lapses. I want the friends of the club movement to realise this. It has become apparent during the course of this Debate that there is a very strong movement in this House towards placing the clubs on a similar basis to the licensed house, and when we get the Bill which is now in course of preparation, we will find, in my opinion, that a further blow is to be struck at the club movement and that there is an intention to place clubs under restriction entirely alien to the club movement with a view not of encouraging but rather to repress that movement. What we have to realise, at any rate, this is the impression made in my mind, is this—when we were compelled in 1909 to submit to this form of taxation being imposed upon clubs, even in its small dimensions at that time and which, as has already been stated in Debate, it was impossible to foresee how anomalous it would work out, the character of the working class club has been entirely changed through this form of taxation and the legislation of 1909. I believe the tendency is to develop further in that direction, and the club as we have known it will cease to be and will simply be a modified form of ordinary licensed premises.

One lesson to be learned from this discussion to-night is for the friends of the club movement to be alert in order that they may preserve one of the remaining: rights of the citizen to co-operate for the purpose and to provide means for social intercourse and of securing a glass of beer or liquor as they have always understood it. My view is that the club movement is one of the truest forms of temperance in this country, and the working men must have some social intercourse. If he has not the club he is bound to go into the public-house, and the public-house requires that he shall continue to spend money. Recognising the character of our people, I have always believed in the club movement as one of the truest forms of temperance. But the point I really want to make was this, that we can see now that underlying the taxation of 1909 and the legislation of that time was an attack on the club movement, an attack which is going to be developed, and which must result in a complete change of the character of the club and the deprivation in my opinion of one of the rights of our people, the right to co-operate for the purpose of furnishing themselves with the amenities of life.

Question put, "That the Clause be. read a Second time."

The House divided: Ayes, 113; Noes, 156.

Division No. 258.]

AYES.

[10.15 p.m.

Ainsworth, Captain Charles

Guest, J. (York, W. R., Hemsworth)

Polson, Sir Thomas A.

Atkey, A. R.

Hall, F. (York, W. R. Normanton)

Rae, H. Norman

Barker, G. (Monmouth, Abertillery)

Halls, Walter

Ramsden, G. T.

Barnes, Rt. Hon. G. (Glas., Gorbals)

Hamilton, Major C. G. C.

Raper, A. Baldwin

Bell, James (Lancaster, Ormskirk)

Hancock, John George

Rees, Capt. J. Tudor- (Barnstaple)

Bell, Lieut.-Col. W. C. H. (Devizes)

Hayday, Arthur

Richardson, Alexander (Gravesend)

Bird, Sir A. (Wolverhampton, West)

Hayward, Evan

Roberts, Frederick O. (W. Bromwich)

Bottomley, Horatio W.

Hennessy, Major J. R. G.

Roberts, Rt. Hon. G. H. (Norwich)

Bowerman, Rt. Hon. Charles W.

Herbert, Dennis (Hertford, Watford)

Roundell, Colonel R. F.

Bowles. Colonel H. F.

Hilder, Lieut.-Colonel Frank

Royce, William Stapleton

Bowyer, Captain G. W. E.

Hirst, G. H.

Samuel, A. M. (Surrey, Farnham)

Brittain, Sir Harry

Hedge, Rt. Hon. John

Seddon, J. A.

Bromfield, William

Holmes, J. Stanley

Sexton, James

Brown, James (Ayr and Bute)

Irving, Dan

Shaw, Thomas (Preston)

Bruton, Sir James

Johnson, Sir Stanley

Short, Alfred (Wednesbury)

Butcher, Sir John George

Jones, G. W. H. (Stoke Newington)

Simm, M. T.

Cairns, John

Kelley, Major Fred (Rotherham)

Smith, Sir Allan M. (Croydon, South)

Cape, Thomas

Kennedy, Thomas

Smith, W. R. (Wellingborough)

Carter, R. A. D. (Man., Withington)

Kenyon, Barnet

Spencer, George A.

Carter, W. (Nottingham, Mansfield)

Law, Alfred J. (Rochdale)

Stanton, Charles Butt

Casey, T. W.

Lawson, John James

Sueter, Rear-Admiral Murray Fraser

Chadwick, Sir Robert Burton

Lloyd, George Butler

Surtees, Brigadier-General H. C.

Clynes, Rt. Hon. John R.

Loseby, Captain C. E.

Thomas, Rt. Hon. James H. (Derby)

Cobb, Sir Cyril

Lowther, Major C. (Cumberland, N.)

Thomas, Brig.-Gen. Sir O. (Anglesey)

Edwards, C. (Monmouth, Bedwellty)

Lunn, William

Thorpe, Captain John Henry

Finney, Samuel

Manville, Edward

Tootill, Robert

Fraser, Major Sir Keith

Mason, Robert

Walsh, Stephen (Lancaster, Ince)

Frece, Sir Walter de

Mills, John Edmund

Waterson, A. E.

Galbraith, Samuel

Mitchell, Sir William Lane

Watson, Captain John Bertrand

Gee, Captain Robert

Morgan, Major D. Watts

Wheler, Col. Granville C. H.

Glanville, Harold James

Morris, Richard

Wilson, Rt. Hon. J. W. (Stourbridge)

Goff, Sir R. Park

Morrison, Hugh

Wilson, W. Tyson (Westhoughton)

Graham, D. M. (Lanark, Hamilton)

Myers, Thomas

Wood, Sir H. K. (Woolwich, West)

Graham, R. (Nelson and Colne)

Newbould, Alfred Ernest

Young, Sir Frederick W. (Swindon)

Gray, Major Ernest (Accrington)

Nicholson, Reginald (Doncaster)

Young, Robert (Lancaster, Newton)

Green, Joseph F. (Leicester, W.)

Norris, Colonel Sir Henry G.

Griffiths, T. (Monmouth, Pontypool)

O'Grady, James

TELLERS FOR THE AYES.—

Gritten, w. G. Howard

Perring, William George

Mr. R. Richardson and Mr. Swan.

Grundy, T. W.

Pinkham, Lieut.-Colonel Charles

NOES.

Adair, Rear-Admiral Thomas B. S.

Evans, Ernest

Molson, Major John Elsdale

Agg-Gardner, Sir James Tynte

Falcon, Captain Michael

Mond, Rt. Hon. Sir Alfred Moritz

Amery, Leopold C. M. S.

Falle, Major Sir Bertram Godfray

Moore-Brabazon, Lieut.-Col. J. T. C.

Armstrong, Henry Bruce

Fell, Sir Arthur

Moreing, Captain Algernon H.

Ashley, Colonel Wilfrid W.

Fisher, Rt. Hon. Herbert A. L.

Morison, Rt. Hon. Thomas Brash

Baird, Sir John Lawrence

Ford, Patrick Johnston

Munro, Rt. Hon. Robert

Balfour, George (Hampstead)

Foreman, Sir Henry

Murray, Hon. A. C. (Aberdeen)

Banbury, Rt. Hon. Sir Frederick G.

Fremantle, Lieut.-Colonel Francis E.

Murray, Dr. D. (Inverness & Ross)

Banner, Sir John S. Harmood-

Ganzoni, Sir John

Murray, Hon. Gideon (St. Rollox)

Barlow, Sir Montague

Gibbs, Colonel George Abraham

Murray, William (Dumfries)

Barnston, Major Harry

Gilmour, Lieut.-Colonel Sir John

Neal, Arthur

Barrie, Charles Coupar (Banff)

Hacking, Captain Douglas H.

Newman, Sir R. H, S. D. (Exeter)

Sarton, Sir William (Oldham)

Hall, Lieut.-Col. Sir F. (Dulwich)

O'Neill, Major Hon. Robert W. H.

Bellairs, Commander Carlyon W.

Harmsworth, C. B. (Bedford, Luton)

Parker, James

Bennett, Sir Thomas Jewell

Harris, Sir Henry Percy

Parry, Lieut.-Colonel Thomas Henry

Betterton, Henry B.

Henderson, Major V. L. (Tradeston)

Pearce, Sir William

Birchall, Major J. Dearman

Hewart, Rt. Hon. Sir Gordon

Pease, Rt. Hon. Herbert Pike

Blair, Sir Reginald

Hinds, John

Peel, Col. Hn. S. (Uxbridge, Mddx.)

Boscawen Rt. Hon. Sir A. Griffith-

Holbrook, Sir Arthur Richard

Pennefather, De Fonblanque

Brassey, H. L. C.

Hope, Sir H.(Stirling & Cl'ckm'nn. W.)

Perkins, Walter Frank

Breese, Major Charts E.

Hope, Lt.-Col. Sir J. A. (Midlothian)

Philipps, Sir Owen C. (Chester, City)

Broad, Thomas Tucker

Hopkins, John W. W.

Pollock, Sir Ernest Murray

Brown, T. W. (Down, North)

Home, Sir R. S. (Glasgow, Hillhead)

Pownall, Lieut.-Colonel Assheton

Buchanan, Lieut.-Colonel A. L. H.

Hunter, General Sir A. (Lancaster)

Prescott, Major W. H.

Buckley, Lieut.-Colonel A.

Jellett, W. M.

Pretyman, Rt. Hon. Ernest G.

Burn, Col. C. R. (Devon, Torquay)

Jodrell, Neville Paul

Purchase, H. G.

Chamberlain, Rt. Hon. J. A.(Birm., W.)

Jones, Henry Haydn (Merioneth)

Raffan, Peter Wilson

Chamberlain, N. (Birm., Ladywood)

Jones, J. T. (Carmarthen, Llanelly)

Reid, D. D.

Child, Brigadier-General Sir Hill

Joynson-Hicks, Sir William

Renwick, Sir George

Churchman, Sir Arthur

Kellaway, Rt. Hon. Fredk. George

Roberts, Samuel (Hereford. Hereford)

Coats, Sir Stuart

Kidd, James

Rodger, A. K.

Colvin, Brig.-General Richard Beale

King, Captain Henry Douglas

Royds, Lieut.-Colonel Edmund

Conway, Sir W. Martin

Lewis, Rt. Hon. J. H. (Univ., Wales)

Sanders, Colonel Sir Robert Arthur

Davidson, J. C. C. (Hemel Hempstead)

Lloyd-Greame, Sir P.

Sassoon, Sir Philip Albert Gustave D.

Davies, Sir William H. (Bristol, S.)

Lowther, Maj.-Gen. Sir C. (Penrith)

Scott, A. M. (Glasgow, Bridgeton)

Dawes, James Arthur

M'Connell, Thomas Edward

Seely, Major-General Rt. Hon. John

Doyle, N. Grattan

McLaren, Robert (Lanark, Northern)

Shaw, Hon. Alex. (Kilmarnock)

Du Pre, Colonel William Baring

McMicking, Major Gilbert

Shaw, Capt. William T. (Forfar)

Edgar, Clifford B.

Macpherson, Rt. Hon. James I.

Shortt, Rt. Hon. E. (N'castle-on-T.)

Edwards, Major J. (Aberavon)

Mallalieu, Frederick William

Smith, Sir Malcolm (Orkney)

Elliot, Capt. Walter E. (Lanark)

Matthews, David

Sprot, Colonel Sir Alexander

Stanier, Captain Sir Beville

Wallace, J.

Wise, Frederick

Stanley, Major Hon. G. (Preston)

Ward, Col. L. (Kingston-upon-Hull)

Wood, Hon. Edward F. L. (Ripon)

Stewart, Gershom

Ward, William Dudley (Southampton)

Wood, Major M. M. (Aberdeen, C.)

Sturrock, J. Leng

Waring, Major Walter

Wood, Major Sir S. Hill- (High Peak)

Taylor, J.

Warner, Sir T. Courtenay T.

Worsfold, T. Cato

Thomas, Sir Robert J. (Wrexham)

Warren, Sir Alfred H.

Worthington-Evans, Rt. Hon. Sir L.

Thomson, F. C. (Aberdeen, South)

White, Col. G. D. (Southport)

Young, E. H. (Norwich)

Thomson, T. (Middlesbrough, West)

Williams, Aneurin (Durham, Consett)

Younger, Sir George

Thomson, Sir W. Mitchell- (Maryhill)

Williams, C. (Tavistock)

Townley, Maximilian G.

Williams, Col. P. (Middlesbrough, E.)

TELLERS FOR THE NOES.—

Tryon, Major George Clement

Williams, Col. Sir R. (Dorset, W.)

Colonel Leslie Wilson and Mr.

Turton, Edmund Russborough

Wintringham. Thomas

McCurdy.

NEW CLAUSE.—(Exemption of certain entertainments from Entertainments Duty.)

Notwithstanding anything contained in the Finance (New Duties) Act, 1916, and the Finance Act, 1917, or the Finance Act, 1919, Entertainments Duty shall not be charged on any club or society which may hold concerts or other entertainments at which no performers are paid and no payment is made for admission.—[ Mr. Mallalieu. ]

Brought up, and read the First time.

:I beg to move, "That the Clause be read a Second time."

I do not know whether the Chancellor of the Exchequer has derived much entertainment from the discussion of the Entertainments Duty to-night. Probably he will say that he has been sufficiently taxed refuting the attacks of those who have been asking for relief on various matters. In the proposal I am making my object is to get a clearer definition of the scope and application of the Entertainments Duty so far as it applies to clubs, societies, or associations which arrange, in the form of concerts, a variety of entertainments incidental to the running of the clubs for which no payment is charged and none of the performers are in receipt of any remuneration. I have often thought that many Acts of Parliament were often interpreted and applied contrary to the intentions of those who framed them and certainly was not the intention of the House which passed them.

Circumstances have been brought to my notice within the last few months as to the application of the Entertainments Duty in a certain direction. Two months ago representations were made to me from various parts of the country that clubs and other associations were being charged the Entertainments Duty because they happen to have informal concerts on their premises for which no charge was made and no payment was offered. I was asked to address to the Chancellor of the Exchequer a question whether such was. the case, and, further, if the Entertainments Duty was being charged on clubs, when indulging in games of billiards, cards, and bowls. The reply of the right hon. Gentleman was that, speaking generally, he did not think the duty was charged under the circumstances mentioned if non-members were not admitted, but every case would have to be taken on its merits, and he would be very glad indeed if I could furnish him with some-instances where these duties wore being charged. I furnished the right hon. Gentleman with instances, and, if I may trespass on the indulgence of the House, I should like to read two letters in which payment of the Entertainments Duty has been demanded under circumstances I have described. The first is addressed to the secretary of a club, and says: tainments Duty was first imposed, that the societies should come within its scope. The fact that it only seems to have been found out this year, and that an attempt is being now made to collect arrears, seems to corroborate that impression. The duty was undoubtedly intended for concerts, theatres, picture palaces, and the like, where people pay to see the entertainment, but now it appears to be proposed to extend it to political gatherings, to clubs, Masonic lodges, musical associations, and similar bodies who, from time to time, hold informal concerts, at which payment is neither taken nor received. What is an entertainment? It is dangerous to attempt to define it, for what may be an entertainment in the eyes of one man may not be entertainment for another. I have in my hand quite a number of letters written by representatives of musical societies throughout the country. The president of one of them writes to me: argumentum ad hominem. If the Chancellor of the Exchequer will forgive me a reference to himself, I might imagine him, having been engaged in his multifarious duties, becoming tired and weary and desiring relaxation. He repairs to his club, and entering, say, the music room, sits down to the piano and begins to touch the Treys. He also lifts up his voice in song. Perhaps he sings: become liable to the Entertainments Duty. I do not say that that was the intention of the framers of the tax originally, but that is how it is being interpreted and applied.

I think the House will understand, from the illustrations I have given, that a great injustice is being inflicted upon many societies. But it goes further than singing. We know what political clubs and social clubs are. They have a great many adjuncts in addition to reading rooms and educational facilities. They have billiard rooms, and it is being seriously contended, in my own district, that while two men may engage in a game of billiards, and if they are alone it is not entertainment, yet if other members come into the billiard room and watch them, it then becomes entertainment, and the club is liable to the Entertainments Duty. I even know of one or two cases in which sums have been paid. That has, certainly, been done under protest, but we know how difficult it is for small associations or clubs to contest the legality of these things with a powerful Government Department, and in many cases they will be content to pay rather than risk the trouble and expense of a contest. The same demand is being made in cases in which members may be watching other members play a game of cards or bowls. It is farcical in the extreme, and not only farcical but very vexatious. I think that, in the first instance, it was never the intention of the Government to bring in clubs and associations of this kind. If, owing to some loophole in the Act, it can be so interpreted, either by the local officials on their own accord or prompted by someone in the right hon. Gentleman's Department, I think it is necessary that we should have a more clear definition of the scope and intention and application of the duty.

:I beg to second the proposed new Clause. I am sure from the cases the hon. Member has given of vexatious administration the Entertainment Tax is doing something which neither the Government nor Parliament ever intended. I hope the right hon. Gentleman will agree to the Clause, so that this vexatious procedure shall be discontinued in the case of innocent amusements for which no charge is made.

:When the right hon. Gentleman replies, perhaps it will be for the convenience of the House if he will inform us how far he intends to go to-night.

:I hope the House will be good enough to allow me to get the new Clauses to-night and the first of the Amendments. The most important Amendments come after that. The remaining new Clauses raise issues which have been considerably talked about already, and some of them, I think, will disappear by reason of the Clauses we have already passed. We will see how we get on, but in the meantime I hope the House will concede me that measure of support. As to the proposed new Clause, I shall forget many of the statements the Mover made in the subsequent part of his speech in view of the flattering accounts he gave of any efforts of mine in the region of song, though it was a fancy picture which I could not recognise. The statements he made show that there is a considerable amount of misapprehension as to the effect of the Entertainments Duty. It may be that there are occasions on which the administration of the law errs on the side of thoroughness, and if there are such incidents I shall be very glad to hear of them, because there is no intention to do anything that is harsh or makes it difficult to conduct those entertainments which it is desired to have. In point of fact there is no such law as the Mover seems to think there is. No Entertainments Duty is payable in cases where the performers are not paid and where no payment is made for admission. My impression is that we mean different things when we talk about paying for admission. What the hon. Member means is that specific payment should be made for admission to a particular entertainment. Many clubs are organised upon the basis that the club subscription includes admission to the building when a regular series of entertainments is being given. In that case the club does not differ in charging admission from an ordinary place of entertainment, or it only differs in this respect, that it charges in advance, as part of the subscription, the price which is to be paid for admission to the entertainment. If my hon. Friend will look at Section 1 (4) of the Finance Act, 1916, which imposed this duty, he will find that it states:

"Where the payment for admission to an entertainment is made by means of a lump sum paid as a subscription or contribution to any club, association, or society, or for a season ticket or for the right of admission to a series of entertainments or to any entertainment during a certain period of time, the Entertainments Duty shall be paid on the amount of the lump sum, but where the Commissioners are of opinion that the payment of a lump sum or any payment for a ticket represents payment for other privileges, rights, or purposes besides the admission to an entertainment, or covers admission to an entertainment during any period for which the duty has not been in operation, the duty shall be charged on such an amount as appears to the Commissioners to represent the right of admission to entertainments in respect of which Entertainments Duty is payable."

That is the law at the present time. The House will observe that it is only in respect of the amount of subscription which can be regarded as being paid in respect of entertainments which are offered as part of the inducements to join the club that any Entertainments Duty can be imposed. If it is shown that the payment of the club subscription does not involve any inducement in regard to entertainments, then no Entertainments Duty would have to be paid. Suppose you find that you have an impromptu concert got up on a particular evening without premeditation, no Entertainments Duty is payable in respect of it: nor, indeed, is any Entertainments Duty payable if the entertainments are more or less regularly given provided that they are not entertainments which are given with such regularity as to lead them to be considered as part of the inducements which bring people to membership of the club. That is how the Entertainments Tax works, and how it is administered. Accordingly, practically all the illustrations which my hon. Friend gave disappear if the Act is properly administered. So far as its administration is concerned, I will take into consideration any instances which may be given.

:I have already read to the House, and have furnished the right hon. Gentleman's Department, with two official letters where a charge is being demanded for these informal concerts.

:I accept what my hon. Friend says, and I will have these cases investigated. The law is as I have described it, and it is unnecessary to put forward any such proposition as my hon. Friend puts in his Amendment. The law does not involve the taxation of any such sporadic or impromptu entertainment. As regards the suggestion that if two men are playing billiards in the way described by the hon. Member, and some persons gather round as an audience, that that game becomes an entertainment liable to duty, I say that to charge Entertainments Duty in that case is impossible. If a, charge is made in such a case it is improperly made, and I shall be very glad to see that the duty is returned if it has been paid. The Entertainments Duty was not intended to have any such ridiculous incidence as my hon. Friend asserts is sometimes the case. So far as these instances are concerned, I will look into them. Meantime, there is no necessity for the proposal which my hon. Friend has made.

:The letters which have been read to us are another illustration of the way in which the bureaucracy are transgressing the law, disturbing the people and making considerable trouble throughout the country. The fact that this tax is being demanded in a way which this House never contemplated is shown by the way in which lodges are taxed, though there is no charge for entertainment, most of the entertainment being provided by members of musical ability, or the worshipful master providing the talent for the evening. The tax, in such case, is oppressive. Speaking on behalf of the Conservative clubs, which I largely represent, nobody supposes that small subscriptions of 5s. a year or 1s. 6d. a quarter could possibly provide anything for entertainments. They are merely imposed to give members a right to go in and read the newspapers. Perhaps the Government are going now to impose a tax for reading newspapers, and it might be a good thing if they did. At any rate, the small subscriptions barely pay the rent of the little club-house or the rooms in which the club is located. Is it seriously suggested that members of these clubs are getting anything substantial in the way of entertainment? The whole thing is a mistake. It ought to be applied exclusively to those places that are run for profit. It ought never be permitted to come into what is practically domestic life. A club is a domestic establishment and belongs to every mem- ber of the club as a community. I do not know that the Government propose seriously to levy Entertainment Duties upon fashionable at-homes. I do not see very much margin between these spontaneous entertainments in a club, which are more or less expected from the programme which the club issues to members at the beginning of the session, whist drives and things of that sort—I do not say anything about dances, as I have not very much sympathy with them because I do not go to them. This is only one of the many pin-pricks which are being administered all over the country by an officious bureaucracy, and the Government do not realise what unpopularity they are encountering in consequence.

:I would not have intervened in this discussion had it not been for the attack made by the hon. and learned Member (Sir H. Nield) on a class of minor officials who are responsible throughout the country for the administration of this tax. I have experience of those officials in some 70 towns in this kingdom, and I must pay my tribute to the fair and courteous way in which they perform the duties. Where cases of excessive zeal occasionally occur, if they are brought to the notice of the superiors, they are dealt with satisfactorily. I was very much surprised to hear the unprovoked attack which arises out of sheer lack of knowledge on the part of the hon. and learned Member (Sir H. Nield). I suggest that if the hon. and learned Gentleman and some others who sit on local municipal bodies exercised the same courtesy in relation to these places of entertainment as is exercised by the Government officials, the entertainments would get on better.

Question, "That the Clause be read a Second time," put, and negatived.

NEW CLAUSE.—(Exemption from Customs duty of pyroxylin and other solutions and mixtures thereof required for the manufacture of patent leather.)

The Commissioners of Customs may make Regulations for exemption from all Customs duties upon importation of pyroxylin and other solutions and mixtures thereof re-quire3 for the production of patent leather.— [ Mr. Arthur Michael Samuel. ]

Brought up, and read the First time.

:I beg to move, That the Clause be read a Second time."

I dare say some of the Free Traders will make a certain amount of play about my asking for a thing of this sort when I am going to vote for the Safeguarding of Industries Bill. My Clause does not contain the vices which the right hon. Gentleman the Member for the City of London held were contained in the Government's Clause. It is a plain sailing statement to exempt pyroxylin, etc. It is a key industry in an inverted form. The position is as follows: If patent leather comes in here in a finished state, it comes in free. If it comes in in its two constituent parts, as leather and pyroxylin, to be finished here it is taxed. A bounty is thus paid on the manufacture of patent leather abroad instead of here. I do not know whether the Chancellor of the Exchequer will be able to give now the relief I ask for, but I hope he will admit that the anomaly does exist and, if he cannot make it right this year, he will take an opportunity to put it right at a future time.

:I beg to second the Motion, and to ask the Chancellor of the Exchequer to consider this question.

:I regret that I cannot accede to the request that the Government should accept this Clause. I have exercised my sympathy with a view to allowing spirit required for particular industrial processes to come in without duty or increased duty. Pyroxylin, which contains spirit, will be to some extent benefited by such a proposal. The Government Clause was objected to because it conveyed to a Government Department that which ought to be in the sole discretion of the House. This Clause suffers from the same difficulty; because it puts in the hands of the Commissioners of Customs the duty of saying whether or not regulations are to be made for the introduction of pyroxylin. It also creates a difficulty by stipulating one particular form of commodity which contains spirit, and selecting it for the subject of special treatment. I do not think that is a form of legislation easy to pass through the House. I had attempted a wider ambit, but with poor success, as

I have succeeded in pleasing nobody. I am afraid I am not in a position to accept the proposal the hon. Gentleman has put forward. I shall keep in view the interests of the trade and industry of this country—not merely the trade to which the hon. Member refers, for there are other forms of industry which may require special treatment.

:I hope the House will not allow itself to be brow-beaten by the Government into sitting to an unreasonable hour, but at the same time it is necessary that these matters should be properly discussed. This Clause affects employment in a British business — the manufacture of patent leather—and I have great sympathy with the hon. Member who moved it. I hope he will press it to a Division. May I ask is it possible for pyroxylin to be made in this country? I presume not. I understand it is a secret process only known in certain countries on the Continent. If we put on this tax, it will be impossible to start the industry here without lengthy and costly research, and perhaps not even then. Here you have the raw material of an important British industry, and I hope hon. Members will be consistent in this matter and support the hon. Member for Farnham (Mr. A. M. Samuel) in demanding that this material shall be admitted free of all duties and restrictions, in view of the serious situation with which we are faced in this country. I have a certain amount of sympathy with the idea that it is mischievous to put such power into the hands of the Commissioners of Customs, and I regret an addition was not made to this Clause making it obligatory to place regulations on the Table of the House. That would meet the constitutional objection. The principle of the Clause, however, is an admirable one, and if the hon. Members who moved and seconded it do not hesitate to divide the House upon it, I am certain they will recover the support of a large body of Members.

Question put, "That the Clause be read a Second time."

The House divided: Ayes, 66; Noes, 196.

Division No 259.]

AYES.

[10.58 p.m.

Barker, G. (Monmouth, Abertillery)

Bramsdon, Sir Thomas

Cape, Thomas

Bell, James (Lancaster, Ormskirk)

Bromfield, William

Carter, W. (Nottingham, Mansfield)

Benn, Captain Wedgwood (Leith)

Brown, James (Ayr and Bute)

Casey, T. W.

Bowerman, Rt. Hon. Charles W.

Cairns, John

Edwards, C. (Monmouth, Bedwellty)

Edwards, G. (Norfolk, South)

Lawson, John James

Spencer, George A.

Finney, Samuel

Lowther, Major C. (Cumberland, N.)

Swan, J. E.

Galbraith, Samuel

Lunn, William

Thomas, Rt. Hon. James H. (Derby)

Glanville, Harold James

Maclean, Neil (Glasgow, Govan)

Thomas, Brig.-Gen. Sir O. (Anglesey)

Graham, D. M. (Lanark, Hamilton)

Maclean, Rt. Hn. Sir D. (Midlothian)

Thomson, T. (Middlesbrough, West)

Graham, R. (Nelson and Colne)

McMicking, Major Gilbert

Thorne, G. R. (Wolverhampton, E.)

Griffiths, T. (Monmouth, Pontypool)

Morgan, Major D. Watts

Tootill, Robert

Grundy, T. W.

Murray, Dr. D. (Inverness & Ross)

Walsh, Stephen (Lancaster, Ince)

Guest, J. (York, W. R., Hemsworth)

Myers, Thomas

Waterson, A. E.

Hall, F. (York, W. R., Normanton)

Newbould, Alfred Ernest

White, Charles F. (Derby, Western)

Halls, Walter

O'Grady, James

Williams, Aneurin (Durham, Consett)

Hayday, Arthur

Richardson, R. (Houghton-le-Spring)

Williams, Col. P. (Middlesbrough, E.)

Hayward, Evan

Roberts, Frederick O. (W. Bromwich)

Wilson, Rt. Hon. J. w. (Stourbridge)

Hirst, G. H.

Roberts, Rt. Hon. G. H. (Norwich)

Wilson, W. Tyson (Westhoughton)

Hogge, James Myles

Royce, William Stapleton

Wood, Major M. M. (Aberdeen, C.)

Holmes, J. Stanley

Sexton, James

Young, Robert (Lancaster, Newton)

Kennedy, Thomas

Shaw, Thomas (Preston)

Kenworthy, Lieut.-Commander J. M.

Short, Alfred (Wednesbury)

TELLERS FOR THE AYES.—

Kiley, James Daniel

Smith, W. R. (Wellingborough)

Mr. A. M. Samuel and Major

Molson.

NOES.

Adair, Rear-Admiral Thomas B. S.

Gee, Captain Robert

Nicholson, Reginald (Doncaster)

Agg-Gardner, Sir James Tynte

Gibbs, Colonel George Abraham

Norris, Colonel Sir Henry G.

Ainsworth, Captain Charles

Gilmour, Lieut.-Colonel Sir John

Ormsby-Gore, Hon. William

Amery, Leopold C. M. S.

Glyn, Major Ralph

Parker, James

Armitage, Robert

Green, Joseph F. (Leicester, W.)

Parry, Lieut.-Colonel Thomas Henry

Armstrong, Henry Bruce

Gretton, Colonel John

Pease, Rt. Hon. Herbert Pike

Ashley, Colonel Wilfrid W.

Gritten, W. G. Howard

Peel, Col. Hn. S. (Uxbridge, Mddx.)

Atkey, A. R.

Hacking, Captain Douglas H.

Pennefather, De Fonblanque

Baird, Sir John Lawrence

Hall, Lieut.-Col. Sir F. (Dulwich)

Perkins, Walter Frank

Balfour, George (Hampstead)

Hamilton, Major C. G. C.

Perring, William George

Banbury, Rt. Hon. Sir Frederick G.

Harmsworth, C. B. (Bedford, Luton)

Philipps, Sir Owen C. (Chester, City)

Banner, Sir John S. Harmood.

Henderson, Major V. L. (Tradeston)

Pinkham, Lieut.-Colonel Charles

Barlow, Sir Montague

Hennessy, Major J. R. G.

Pollock, Sir Ernest Murray

Barnston, Major Harry

Hewart, Rt. Hon. Sir Gordon

Pownall, Lieut.-Colonel Assheton

Bell, Lieut.-Col. W. C. H. (Devizes)

Hilder, Lieut.-Colonel Frank

Pretyman, Rt. Hon. Ernest G.

Bellairs, Commander Carlyon W.

Hinds, John

Purchase, H. G.

Bentinck, Lord Henry Cavendish-

Holbrook, Sir Arthur Richard

Raw, Lieutenant-Colonel Dr. N.

Betterton, Henry B.

Hood, Joseph

Rees, Sir J. D. (Nottingham, East)

Birchall, Major J. Dearman

Hope, Sir H. (Stirling & Clckm'nn'n, W.)

Rees, Capt. J. Tudor- (Barnstaple)

Bird, Sir A. (Wolverhampton, West)

Hope, Lt.-Col. Sir J. A. (Midlothian)

Reid, D. D.

Boscawen, Rt. Hon. Sir A. Griffith.

Hopkins, John W. W.

Richardson, Alexander (Gravesend)

Bowyer, Captain G. W. E.

Hopkinson, A. (Lancaster, Mossley)

Roberts, Samuel (Hereford, Hereford)

Brassey, H. L. C.

Horne, Sir R. S. (Glasgow, Hillhead)

Robinson, S. (Brecon and Radnor)

Breese, Major Charles E.

Hunter, General Sir A. (Lancaster)

Robinson, Sir T. (Lancs., Stretford)

Brittain, Sir Harry

Jellett, William Morgan

Royds, Lieut.-Colonel Edmund

Broad, Thomas Tucker

Jodrell, Neville Paul

Sanders, Colonel Sir Robert Arthur

Brown, T. W. (Down, North)

Johnson, Sir Stanley

Sassoon, Sir Philip Albert Gustave D.

Bruton, Sir James

Jones, G. W. H. (Stoke Newington)

Scott, A. M. (Glasgow, Bridgeton)

Buchanan, Lieut.-Colonel A. L. H.

Jones, Henry Haydn (Merioneth)

Seddon, J. A.

Buckley, Lieut.-Colonel A.

Jones, J. T. (Carmarthen, Llanelly)

Seely, Major-General Rt. Hon. John

Burn, Col. C. R. (Devon, Torquay)

Kellaway, Rt. Hon. Fredk. George

Shaw, Capt. William T. (Forfar)

Butcher, Sir John George

Kidd, James

Shortt, Rt. Hon. E. (N'castle-on-T.)

Carr, W. Theodore

King, Captain Henry Douglas

Simm, M. T.

Carter, R. A. D. (Man., Withington)

Lewis, Rt. Hon. J. H. (Univ., Wales)

Smith, Sir Allan M. (Croydon, South)

Chadwick, Sir Robert Burton

Lloyd, George Butler

Smith, Sir Malcolm (Orkney)

Chamberlain, Rt. Hn. J. A. (Birm. W.)

Lloyd-Greame, Sir P.

Sprot, Colonel Sir Alexander

Chamberlain, N. (Birm., Ladywood)

Locker-Lampson, Com. O. (H'tingd'n)

Stanier, Captain Sir Seville

Churchman, Sir Arthur

M'Connell, Thomas Edward

Stanley, Major Hon. G. (Preston)

Clough, Sir Robert

M'Curdy, Rt. Hon. Charles A.

Stanton, Charles Butt

Coats, Sir Stuart

Mackinder, Sir H. J. (Camlachie)

Steel, Major S. Strang

Colvin, Brig.-General Richard Beale

McLaren, Robert (Lanark, Northern)

Stewart, Gershom

Conway, Sir W. Martin

McNeill, Ronald (Kent, Canterbury)

Sturrock, J. Leng

Coote, Colin Reith (Isle of Ely)

Mallalieu, Frederick William

Sugden, W. H.

Davidson, J. C. C. (Hemel Hempstead)

Manville, Edward

Sutherland, Sir William

Davies, Alfred Thomas (Lincoln)

Marriott, John Arthur Ransome

Taylor, J.

Dawes, James Arthur

Mason, Robert

Thomas, Sir Robert J. (Wrexham)

Doyle, N. Grattan

Matthews, David

Thomson, F. C. (Aberdeen, South)

Du Pre, Colonel William Baring

Mitchell, Sir William Lane

Thomson, Sir W. Mitchell-(Maryhill)

Edgar, Clifford B.

Mond, Rt. Hon. Sir Alfred Moritz

Thorpe, Captain John Henry

Edwards, Major J. (Aberavon)

Moore-Brabazon, Lieut.-Col. J. T. C.

Townley, Maximilian G.

Elliot. Capt. Walter E. (Lanark)

Morden, Col. W. Grant

Tryon, Major George Clement

Evans, Ernest

Moreing, Captain Algernon H.

Turton, Edmund Russborough

Eyres-Monsell, Com. Bolton M.

Morison, Rt. Hon. Thomas Brash

Waddington, R.

Falcon, Captain Michael

Morris, Richard

Wallace, J

Falle, Major Sir Bertram Godfray

Morrison, Hugh

Ward, Col. J. (Stoke upon Trent)

Fisher, Rt. Hon. Herbert A. L.

Munro, Rt. Hon. Robert

Ward, Col. L. (Kingston-upon-Hull)

Ford, Patrick Johnston

Murchison, C. K.

Waring, Major Walter

Foreman, Sir Henry

Murray, William (Dumfries)

Warner, Sir T. Courtenay T.

Foxcroft, Captain Charles Talbot

Nall, Major Joseph

Watson, Captain John Bertrand

Fraser, Major Sir Keith

Neal, Arthur

Wheler, Col. Granville C. H.

Fremantle, Lieut.-Colonel Francis E.

Newman, Sir R. H. S. D. L, (Exeter)

White, Col. G. D. (Southport)

Ganzoni, Sir John

Newton, Major Harry Kottingham

Williams, C. (Tavistock)

Williams, Col. Sir R. (Dorset, W.)

Wood, Major Sir S. Hill- (High Peak)

Younger, Sir George

Williamson, Rt. Hon. Sir Archibald

Worsfold, T. Cato

Wise, Frederick

Worthington-Evans, Rt. Hon. Sir L.

TELLERS FOR THE NOES.—

Wood, Hon. Edward F. L. (Ripon)

Young, E. H. (Norwich)

Colonel Leslie Wilson and Mr.

Wood, Sir H. K. (Woolwich, West)

Young, Sir Frederick W. (Swindon)

Dudley Ward.

NEW CLAUSE.—(Deduction in respect of dependent relatives.)

If a claimant proves that his widowed mother, for whose maintenance he is entitled to a deduction under Section twenty-two, Sub-section (1), of the Finance Act, 1920, is, by reason of old age or infirmity, compelled to depend on the services of a daughter, who resides with her, he shall be entitled to a further deduction of twenty-five pounds, provided the said daughter's income, from all sources, does not exceed fifty pounds a year, and she is maintained at the claimant's expense.—[ Major Henderson. ]

Brought up, and read the First time.

:I beg to move, "That the Clause be read a Second time." The object of the Clause is to find a remedy for what I consider to be an anomaly in Section 22 of the Finance Act of last year. It is possible under that Section for a man, if he maintains his widowed mother, to get a rebate of £25 provided her income does not exceed £50 a year. It is also possible for a widowed lady, if she is of independent means and has a daughter at home to look after her, if she is infirm, to get a rebate of £25 a year. But if that lady is not of independent means and is in poor circumstances, and if her son is maintaining her and she is very infirm and requires the services of her daughter—whom the son is also keeping, as well as his mother—then the son gets only the allowance on account of his mother and no allowance on account of his sister. That is not only an anomaly, but a great hardship, and it is a hardship which hits a great many young men who are doing their best to look after their mothers, who are old and sometimes not in good circumstances. Therefore I do ask the Chancellor to give this matter his most favourable consideration—although I fear he will say, as he has said in regard to similar Amendments, that he cannot make any concession.

:My hon. and gallant Friend will not be surprised when I tell him that the Chancellor of the Exchequer is not able to make any concession on this Clause. What is precisely the case? Under the existing law the taxpayer is allowed a reduction of ÂŁ25 a year in respect of his own if he maintains her. This Amendment proposes that if she is incapacitated there shall be an additional allowance in respect of the services of a daughter. I think it will be found that however much one regrets it, taking it upon a strictly logical basis this proposal is simply to make an allowance upon an allowance. This additional allowance really covers no field of compassionate consideration that is not already covered by the original allowances. But, as has been already stated by my right hon. Friend, in the course of these Debates, there is a wider reason why it is necessary to withhold any further concessions in this direction. As already stated there are fields in which everybody's sympathies are most widely aroused. They were widely aroused amongst the Royal Commissioners who laid down a scheme of personal allowances which are now law, and it was out of those sympathies that the House originally enacted that scheme recommended by the Royal Commissioners in the form in which it at present stands. But once that scheme has been enacted, I do think it will commend itself to the Clause as common sense that it is necessary to draw the line somewhere, and that the great practical consideration is that the taxpayers of the country, the family budget, and so on, should be allowed to get used to the scheme of personal allowances as it exists. It is not in the interest, as it were, of the taxpayer himself, that there should be a constant shifting in this direction. It would be a great gain in this respect in the general sense that we have arrived at finality and that the family budgets will settle down in accordance with the final scheme. I will only remind the House, in conclusion, that there was a very strong reference by the Royal Commission that they had laid down what they considered to be a fair, equitable and even generous scheme of personal allowances. They made a reference to the pressure that has been brought to bear upon them to make further concessions, such as travelling expenses, personal allowances and so on and they pointed out that these claims would differ in degree, and they felt that they could not advise any general relaxation on which tax is levied. Wherever you draw the line there will be always hard cases which move sympathy and touch compassion just over the line, and if you draw the line a little further on, hard cases will be discovered. The practical wisdom is to let things rest.

:I join with my hon. and gallant Friend in suggesting that this Clause be accepted in spite of what has been said by the hon. Member (Mr. Young) who has just replied from the Government Bench. This Clause, as 1 understand it, really applies where the widowed mother is being maintained and where by reason of old age and infirmity she is an invalid and requires attention. There is a daughter prepared to come into the house and attend to her mother.

Undoubtedly, she will do so more sympathetically and kindly than a stranger. The son who is maintaining his mother should be allowed a rebate in regard to that daughter. Surely there are a very small number of such cases, but they are bound to exist, and it would not mean a very large sum of money from the Treasury to meet them. It will be no great hardship upon the Government, but in view of the cases that exist, and these cases mainly occur among the lower middle and working classes, it will mean a very considerable concession. I hope, from the humanitarian point of view, though it is the Budget that is being discussed and a question of taxation, that the Chancellor will give the concession asked.

Question put, "That the Clause be read a Second time."

The House divided: Ayes, 70; Noes, 146.

Division No. 260.]

AYES.

[11.15 p.m.

Barker, G. (Monmouth, Abertillery)

Hannon, Patrick Joseph Henry

Royce, William Stapleton

Barton, Sir William (Oldham)

Hayday, Arthur

Sexton, James

Bell, James (Lancaster, Ormskirk)

Henderson, Major V. L. (Tradeston)

Smith, Sir Allan M. (Croydon, South)

Bentinck, Lord Henry Cavendish.

Hirst, G. H.

Smith, Sir Malcolm (Orkney)

Bowerman, Rt. Hon. Charles W.

Holmes, J. Stanley

Smith, W. R. (Wellingborough)

Bramsdon, Sir Thomas

Hunter, General Sir A. (Lancaster)

Spencer, George A.

Bromfield, William

Kenworthy, Lieut.-Commander J. M.

Sucter, Rear-Admiral Murray Fraser

Bruton, Sir James

Kiley, James Daniel

Swan, J. E.

Cairns, John

Lawson, John James

Thomas, Brig.-Gen. Sir O. (Anglesey)

Cape, Thomas

Lunn, William

Thomson, T. (Middlesbrough, West)

Carter, W. (Nottingham, Mansfield)

McLaren, Robert (Lanark, Northern)

Thorne, G. R. (Wolverhampton, E.)

Casey, T. W.

Maclean, Neil (Glasgow, Govan)

Walsh, Stephen (Lancaster, Ince)

Edwards, C. (Monmouth, Bedwellty)

Maclean, Rt. Hn. Sir D. (Midlothian)

Waterson, A. E.

Edwards, Major J. (Aberavon)

Morden, Lieut.-Col. W. Grant

White, Charles F. (Derby, Western)

Finney, Samuel

Morgan, Major D. Watts

Williams, Aneurin Durham, Consett)

Glanville, Harold James

Murray, Dr. D. (Inverness & Ross)

Williams, Col. P. (Middlesbrough, E.)

Goff, Sir R. Park

Newbould, Alfred Ernest

Wilson, Rt. Hon. J. W. (Stourbridge)

Graham, D. M. (Lanark, Hamilton)

Norris, Colonel Sir Henry G.

Wilson, W. Tyson (Westhoughton)

Graham, R. (Nelson and Colne)

O'Grady, James

Wintringham, Thomas

Grundy, T. W.

Poison, Sir Thomas A.

Wood, Major M. M. (Aberdeen, C.)

Guest, J. (York, W. R., Hemsworth)

Rees, Capt. J. Tudor- (Barnstaple)

Wood, Major Sir S. Hill- (High Peak)

Hall, F. (York, W. R., Normanton)

Richardson, Alexander (Gravesend)

Young, Robert (Lancaster, Newton)

Hall, Rr-Adml Sir W.(Llv'p'l, W. D'by)

Richardson, R. (Houghton-le-Spring)

Halls, Walter

Roberts, Frederick O. (W. Bromwich)

TELLERS FOR THE AYES.—

Mr. T. Shaw and Mr. T. Griffiths.

Jones, Henry Haydn (Merioneth)

Ormsby-Gore, Hon. William

Stewart, Gershom

Jones, J. T. (Carmarthen, Llanelly)

Parker, James

Sugden, W. H.

Kellaway, Rt. Hon. Fredk. George

Parry, Lieut.-Colonel Thomas Henry

Sutherland, Sir William

Kidd, James

Pease, Rt. Hon. Herbert Pike

Thomson, F. C. (Aberdeen, South)

King, Captain Henry Douglas

Pennefather, De Fonblanque

Thomson, Sir W. Mitchell- (Maryhill)

Law, Alfred J. (Rochdale)

Perkins, Walter Frank

Thorpe, Captain John Henry

Lewis, Rt. Hon. J. H. (Univ., Wales)

Pollock, Sir Ernest Murray

Townley, Maximilian G.

Lloyd, George Butler

Pownall, Lieut.-Colonel Assheton

Tryon, Major George Clement

Lloyd-Greame, Sir P.

Pretyman, Rt. Hon. Ernest G.

Turton, Edmund Russborough

Locker-Lampson, Com. O. (H'tingd'n)

Rae, H. Norman

Ward, Col. J. (Stoke upon Trent)

M'Connell, Thomas Edward

Roberts, Rt. Hon. G. H. (Norwich)

Waring, Major Walter

M'Curdy, Rt. Hon. Charles A.

Roberts, Samuel (Hereford, Hereford)

Warner, Sir T. Courtenay T.

Mallalieu, Frederick William

Rodger, A. K.

Wheler, Col. Granville C. H.

Manville, Edward

Royds, Lieut.-Colonel Edmund

White, Col. G. D. (Southport)

Mason, Robert

Samuel, A. M. (Surrey, Farnham)

Williams, C. (Tavistock)

Matthews, David

Sanders, Colonel Sir Robert Arthur

Williams, Col. Sir R. (Dorset, W.)

Molson, Major John Elsdale

Sassoon, Sir Philip Albert Gustave D.

Williamson, Rt. Hon. Sir Archibald

Mond, Rt. Hon. Sir Alfred Moritz

Scott, A. M. (Glasgow, Bridgeton)

Wise, Frederick

Moore-Brabazon, Lieut.-Col. J. T. C.

Seddon, J. A.

Wood, Hon. Edward F. L. (Ripon)

Moreing, Captain Algernon H.

Seely, Major-General Rt. Hon. John

Worsfold, T. Cato

Morison, Rt. Hon. Thomas Brash

Shaw, Capt. William T. (Forfar)

Worthington-Evans, Rt. Hon. Sir L.

Murchison, C. K.

Shortt, Rt. Hon. E. (N'castle-on-T.)

Young, Lieut.-Com. E. H. (Norwich)

Murray, William (Dumfries)

Simm, M. T.

Young, Sir Frederick W. (Swindon)

Nall, Major Joseph

Sprot, Colonel Sir Alexander

Younger, Sir George

Neal, Arthur

Stanler, Captain Sir Beville

Newman, Colonel J. R. P. (Finchley)

Stanley, Major Hon. G. (Preston)

TELLERS FOR THE NOES.—

Newman, Sir R. H. S. D. L. (Exeter)

Stanton, Charles Butt

Colonel Leslie Wilson and Mr.

Nicholson, Reginald (Doncaster)

Steel, Major S. Strang

Dudley Ward.

NOES.

Agg-Gardner, Sir James Tynte

Buckley, Lieut.-Colonel A.

Foxcroft, Captain Charles Talbot

Ainsworth, Captain Charles

Carr, W. Theodore

Fraser, Major Sir Keith

Amery, Leopold C. M. S.

Carter, R. A. D. (Man., Withington)

Fremantle, Lieut.-Colonel Francis E.

Armitage, Robert

Chadwick, Sir Robert Burton

Ganzonl, Sir John

Armstrong, Henry Bruce

Chamberlain, Rt. Hn. J. A. (Birm. W.)

Gee, Captain Robert

Atkey, A. R.

Chamberlain, N. (Birm., Ladywood)

Gibbs, Colonel George Abraham

Baird, Sir John Lawrence

Churchman, Sir Arthur

Gilmour, Lieut.-Colonel Sir John

Balfour, George (Hampstead)

Clough, Sir Robert

Glyn, Major Ralph

Barlow, Sir Montague

Coats, Sir Stuart

Green, Joseph F. (Leicester, W.)

Barnston, Major Harry

Colvin, Brig.-General Richard Beale

Gretton, Colonel John

Bell, Lieut.-Col. W. C. H. (Devizes)

Coote, Colin Reith (Isle of Ely)

Hall, Lieut.-Col. Sir F. (Dulwich)

Bellairs, Commander Carlyon W.

Curzon, Captain Viscount

Hamilton, Major C. G. C.

Bennett, Sir Thomas Jewell

Davidson, J. C. C. (Hemel Hempstead)

Harmsworth, C. B. (Bedford, Luton)

Birchall, Major J. Dearman

Davies, Alfred Thomas (Lincoln)

Hilder, Lieut.-Colonel Frank

Boscawen, Rt. Hon. Sir A. Griffith-

Du Pre, Colonel William Baring

Hinds, John

Bowyer, Captain G. W. E.

Elliot, Capt. Walter E. (Lanark)

Holbrook, Sir Arthur Richard

Brassey, H. L. C.

Evans, Ernest

Hood, Joseph

Breese, Major Charles E.

Eyres-Monsell, Com. Bolton M.

Hope, Lt.-Col. Sir J. A. (Midlothian)

Brittain, Sir Harry

Falcon, Captain Michael

Hopkins, John W. W.

Broad, Thomas Tucker

Falle, Major Sir Bertram Godfray

Horne, Sir R. S. (Glasgow, Hillhead)

Brown, T. W. (Down, North)

Fisher, Rt. Hon. Herbert A. L.

Johnson, Sir Stanley

Buchanan, Lieut.-Colonel A. L. H.

Ford, Patrick Johnston

Jones, G. W. H. (Stoke Newington)

NEW CLAUSE.—(Amendment of s. 69 of Finance (1909–10) Act, 1910.)

From and after the commencement of this Act the words " the cost to him of maintenance, repairs, insurance, and management" where they first appear in section sixty-nine of The Finance (1909–10) Act, 1910, shall for the purposes of interpretation be deemed to include any sums paid to tenants in respect of compensation for disturbance under section ten of The Agriculture Act, 1920, and any statutory amendment thereof.—[ Mr. Pretyman. ]

Brought up, and read the First time.

:I beg to move, "That the Clause be read a Second time."

This new Clause I am obliged to explain because it was not moved on the Committee Stage, the reason being that it was not fully understood that the tax would be payable under those circumstances. Whilst I should be very loth even in the present position of heavy taxation on landed property to ask for any remission of taxation, this is really a question of interpretation and I can hardly conceive that my right hon. Friend can think it right that the Income Tax Act should be so interpreted that a man should be taxed on income which he does not actually receive. This is a case where the owner of land in the exercise of his ordinary rights gives notice to a tenant to quit his farm under the Act passed last session—or rather under Part II of it which is to remain in force—and he has to pay compensation for disturbance, which may amount to either one year's or two years' rent. That rent is remitted; it is not received by the landlord at all, and I suggest that any income tax which has to be paid on any money should be paid by the person who receives the money and not by the person who has to pay it. Supposing a landlord remits altogether his rent in any one year, owing to bad times, he foregoes his year's rental and is not charged income tax upon it. In this case he is obliged by law under an Act passed in the interests of the nation to forego his year's or two years' rent. If a landlord foregoes his rent voluntarily he escapes income tax on it, but if he is compelled by law to forego the rent that he should be taxed on what he does not receive seems to me a very extraordinary proposition.

I believe it is suggested that this compensation should be regarded as capital. I cannot see how it can be so regarded. As far as I can understand the law I gather that in the case of settled property any compensation of this kind would have to be paid by the tenant for life and would not be treated as capital at all. It is simply a reduction of income. What this amendment proposes is that where for the maintenance of the land in the ordinary way this compensation has to be paid under law to the outgoing tenant and therefore the income pro tanto is reduced, that should be included with other deductions which are allowed to be made. I may say that under Section 69 of the Act of 1910 and under a provision in the subsequent Finance Act of 1918, where the owner of land incurs certain necessary outgoings involving a reduction of income for the maintenance and management of the land, he is allowed to deduct those expenses when calculating his income for the purpose of assessment to income tax. Now this is an outgoing which he is compelled to bear and if it is suggested he should have to pay income tax on it, I think there must be some misapprehension. I have stated clearly and plainly the object of my amendment. It is simple. What I ask is not that there shall be any reduction of taxation at all in the present financial crisis in the country, but merely that a man who is already subjected to a crushing rate burden—and the House knows from figures placed before it what the owner of agricultural land is now called upon to pay— we ask merely that a man should not be called upon to pay income tax on a sum which he does not receive. On income received the taxes at present are crushing, if not impossible, and it is really going too far—I would suggest to my right hon. Friend—to impose a tax on sums which are not received.

:The point to which my right hon. Friend has called the attention of the House is one as to the interpretation of the law—an interpretation which could be obtained in the Courts of Law and which requires therefore no such amendment as my right hon. Friend has offered for our consideration. My right hon. Friend suggests that there should be included, in the expenses of maintenance, repairs, insurance and management which the landlord is entitled to deduct in having his income tax assessed, the sums paid to tenants in respect of compensation for disturbance under Section 10 of the Agriculture Act, 1920. The reason for allowing the deduction of costs of maintenance, repairs, insurance and management, is that these are expenses which are necessary to earn the income, and the ordinary law with regard to income tax is that any expenses necessary to earn the income are properly deductible before you reach the amount at which your income is to be assessed. But what is this item which my right hon. Friend suggests should also be deducted? It is payment of compensation to a farmer, under Section 10 of the Agriculture Act, 1920, in respect of disturbance. Is that an expense necessary to earn the income? Upon the answer to that question turns the propriety or impropriety of this Clause. I venture to submit to the House— although really this is a point of law, which ought rather to be pleaded in the courts than in this House—that this compensation for disturbance is not an expense necessary to earn the income. Compensation for disturbance is not payable under the Act in cases in which a tenant of whom, the landlord seeks to get rid is not cultivating according to the rules of good husbandry, or has failed to pay his rent, or has materially prejudiced the interests of the landlord by committing a breach of the tenancy agreement, or is bankrupt, or has refused to go to arbitration on the question of rent. There is only one case in which compensation is paid, namely, that in which the landlord wishes to get rid of his tenant for no assignable reason.

:For no reason which is justifiable except that the landlord wishes to get rid of the tenant. It is only payable in the case of a tenant against whom the landlord can allege nothing as justifiable ground for extruding him except his own pleasure. Obviously compensation paid in such a case is not an expense necessary to earn the income from the land, because the income can be earned by keeping the tenant. If the landlord removes him for a reason of his own, I venture to think, with submission to what the Courts might say, that the real significance of the situation is that, having, presumably, received the rent, he pays it back to the farmer because he has disturbed him in his occupation of the property. I have enumerated the reasons for which, under the Statute, the tenant can be extruded without payment of compensations, and I cannot imagine that, these categories having been exhausted, there is any other reason but the landlord's pleasure which can justify him in putting out a tenant. If he chooses to take that line he must pay compensation. Upon these grounds, and because it is a question of law for decision in the Courts, I venture to think that this Clause should not be accepted.

:Until the last Agriculture Act was passed, compensation to a tenant, was only payable if notice was given for reasons inconsistent with good estate management, but under the last Act compensation is payable if notice is given for reasons consistent with good estate management. The right hon. Gentleman is under an entire delusion and mistake. If he had been on the Committee on the Agriculture Bill he would have heard dozens of arguments showing reasons consistent with good estate management for which notice might be given and compensation still be payable. I should like the right hon. Gentleman to give me a perfectly straight answer to one question. He said that the matter depended on the law courts. Supposing that the Courts were to decide that notice was given for reasons consistent with good estate management, would or would not the sum paid for compensation be allowed as a deduction in assessing the income for tax? Will the right hon. Gentleman answer that?

:I will answer it in the way in which I answered the other question, and I hope the hon. and gallant Gentleman will regard my answer as a straight one.

:The answer to the second question is that it also is for the courts to answer. If the courts consider that a man has been extruded for reasons consistent with good estate management, it is also for the courts to say whether the expense is one which is necessary in order to earn the income of the estate. If their conclusion is in the affirmative, then the amount would be allowed as deductible from income. If, on the other hand, they say that it is not an expense which is necessary in order to earn the income, the answer would be in the negative.

:Then it amounts to this, that the owner of the land, although he may have given notice for reasons consistent with good estate management, can never get this allowance until he has been to the expense of a law suit.

:Surely the hon. Gentleman must understand the position. We differ on a point of law. The only way you can settle that is in the law courts. But it does not mean that every case requires to go to the law courts to be settled. It means that once the matter has been settled, every decision will be given in consequence of that answer.

:The right hon. Gentleman knows that no two cases of notice can ever be on the same footing. Every notice must be different. There must be different circumstances attending every notice given to a tenant, and no decision in the law courts can possibly govern all these cases. Each must be judged on its merits. The right hon. Gentleman says that although this notice may be given for reasons consistent with good estate management, yet this wretched man, who gets no income from the estate, who has given notice for reasons consistent with good estate management, has got to be dragged to the law courts, and if necessary to the House of Lords, before he can know, whether he is to get the allowance from his Income Tax or not. That is an exceedingly unsatisfactory position. I should like to put this case to the right hon. Gentleman also. This sum of money that the owner has to pay is received by the tenant. There is not the slightest doubt that the tenant receives it if the landlord pays it. Can he tell me whether the tenant pays Income Tax on it, because if he does, it is obviously unfair that the landlord should pay Income Tax on it too. If the tenant pays Income Tax on it, will he charge the Income Tax on the landlord and on the tenant in respect of the same sum?

:I am not sure that it is a very good way of conducting debate. This question could be put at other times; and in different places, but the answer is, equally easy. If the tenant receives, in what respect does he receive it? In respect of compensation for disturbance. But that is not something which can be described as income. It is a lump sum in the nature of capital. It does not come within the tenant's income and does not require to be assessed to Income Tax. On the other hand it is plain that the landlord is really paying back to the tenant something that he is assumed to have received from him. You may cross it out as a book entry on one side or the other. But the theory of the situation is that if it is a year's rent that is paid it is paid by the tenant and paid back in respect of compensation for disturbance.

:When the tenant makes out his return for Income Tax and he leaves the farm he will be bound to include the sum he has received from the landlord for this compensation along with unexhausted improvements, and the Income Tax Commissioners will undoubtedly claim that from the tenant. However that may be, it seems to me quite clear that the Income Tax Commissioners will certainly claim from the landlord, unless he carries the case to the Law Courts, and will also claim it from the tenant.

:Owing to the system of rating, taxation and legislation it is impossible to make any income out of land either as tenant or as landlord. In view of the somewhat cynical disposition we have seen of late years and the various cries—"God made the land for the people"—it does not seem to me to be of very great importance Whether we pass this Amendment or not. I should not have risen if it had not been for the ignorance of the Chancellor of the Exchequer of that most important Bill, the great Agriculture Act, 1920. The right hon. Gentleman does not seem to be aware that for the first time that Act laid down that where a landlord desired to get rid of a tenant, and got rid of him, not on unreasonable grounds, as was the case in the 1908 Act, but on grounds consistent with good management of an estate, he had to pay compensation. My right hon. Friend argues that there would only be a few cases in which this will occur. At the present time, with agriculture in such a state, nobody outside a lunatic asylum is going to get rid of a tenant in order to farm the land himself; but with improved trade, and possibly a different Government in power, it may well be that once again landlords may be found who wish to resume possession of their land. For the first time, so far as I know, it was laid down in legislation last year that where a man wishes to resume possession of his land for the purpose of farming it in a manner consistent with good management he has to pay compensation to the tenant; and yet the right hon. Gentleman says that the landlord is not entitled to deduct that amount from his annual bill in respect of Income Tax. So far from there being only a few cases, as suggested by the right hon. Gentleman, in normal cases the thing would occur frequently. Take a young, energetic man who succeeds to property and wishes to farm it himself. He would have to pay compensation to the tenant on resuming possession, he is not entitled to charge and take that into account. If he is allowed to claim on repairs and maintenance, he ought to be allowed to claim in respect of this payment. The whole of the agricultural industry is so hopelessly waterlogged by taxation that my hon. Friends are wasting their time in putting forward the Amendment. A far more drastic method will have to be employed in regard to the land before there is any hope: agricultural wages will have to be brought to an economic basis.

:I do not see why the landowners should ask for something that is not given to any other section of the community. If a man buys a business and pays a goodwill to the vendor, he is not entitled to charge against his profits the price paid as goodwill. If a business firm have sub-let part of their premises and they desire to get back possession of their premises and they pay a certain sum in order to get the tenant to leave, they are not allowed to charge against their profits before they pay Income Tax the amount they have paid as compensation.

:I cannot see why landlords should ask for special treatment, and I hope the Chancellor of the Exchequer will stand firm.

:The hon. Members who have spoken from the other side have regarded the compensation paid to the tenant as a fine upon the landlord for turning out the tenant. That assumption is entirely wrong. I was on the Committee which dealt with this matter, and our view was that the compensation was compensation to the farmer for capital which he has sunk into the land. [HON. MEMBERS: "NO."] Undoubtedly it was compensation paid to the farmer for the capital which he had sunk into the land.

:The analogy is complete. It is a question of capital sunk by the farmer, and it was argued that if we did not provide some means of paying back to the farmer what he had sunk in his land he would starve his land. I do not think it was a fair way of paying back the capital which the farmer had sunk, but it was the way which the Government adopted. It is for unexhausted improvements. [HON. MEMBERS: "No."] I know what I am talking about. Any other course than that now adopted by the Chancellor of the Exchequer would be wrong.

Question, "That the Clause be read a Second time," put, and negatived.

NEW CLAUSE.—(Amendment of s. 12 of 6 ana 7 Geo. V., c. 24.)

Section Twelve of the Finance Act, 1916 (which exempts from entertainments duty payments for admission to certain school entertainments), shall be amended as follows: —

(1) References therein to an educational institution shall be construed as including references to any organisation certified by a local education authority to be established and conducted for the, purpose of providing social or physical training for children or young persons who are attending or have attended schools or educational institutions provided, aided, or maintained by that authority, and the reference therein to persons who are receiving or have received instruction in the school or institution shall be construed as including a reference to persons who are members of the organisation; and

(2)The words "under the age of eighteen years '' shall be substituted for the words " under the age of sixteen years."—( Sir T. Bramsdon. )

Brought up, and read the First time.

:I am willing to accept this Clause.

Question put, and agreed to.

Clause read a Second time, and added to the Bill.

NEW CLAUSE.—(Deduction in respect of daughter acting as housekeeper to widower.)

If the claimant proves that he is a widower, and that a daughter over sixteen years of age gives her full time to the duties of housekeeper, he shall, subject to the other provisions of section nineteen, sub-section (1), of The Finance Act, 1920, be entitled to deduction of ninety pounds in respect of that daughter.—[ Mr. Holmes. ]

Brought up, and read the First time.

:I beg to move, "That the Clause be read a Second time.

This Clause, unfortunately, could not be discussed on the Committee stage of the Bill. On the Committee stage an Amendment was put down to give certain concessions to a man who had a housekeeper taking the place of his deceased wife. The Chancellor of the Exchequer advanced three strong reasons why he could not accept that particular Amendment: First, the Royal Commission on Income Tax had reported against it; second, such an allowance would be subject to abuse, third, it would cost ÂŁ1,500,000 per annum. The proposal which I now make is not subject to any of those objections. I am asking that where a man's wife has died and he has been compelled to require a daughter over sixteen years of age to take up the duties of a housekeeper, he should be allowed the same amount of abatement for her as if he were still a married man. A considerable amount of feeling has been aroused among widowers in the country with regard to this particular case. I put down this Clause because of representations made to me in six or seven cases in my own constituency, but since I put it down in the Committee stage I have been amazed at the number of letters which I have received from various parts of the country with regard to this particular point. The position of the man is this. He has lost his wife and he is compelled to take his daughter, who was probably bringing a considerable sum into the home every week, away from her employment in order that she may take up the duties of the house. Not only does the man lose the contribution from her earnings, but his abatement is reduced from ÂŁ225 to ÂŁ135. In regard to the Amendment moved a short time ago in relation to a widowed mother, the Financial Secretary put forward the view that if he gave way in one case he must give way in others, and that he might get a land-slide. The Financial Secretary said that we must allow things to rest when we have done ample justice, and let people get used to it. I do suggest that in this case we have not done ample justice. The Royal Commission did not apparently think of this case at all. It is not going to cost the Chancellor much money; it cannot possibly cost him more than ÂŁ250,000 per annum. This afternoon, on the first Amendment, it was proposed to give ÂŁ100,000 away to people who attend agricultural shows. I cannot help thinking that the Chancellor was very weak with regard to that Clause, or was it generous? People who pay for entrance to these shows have no idea that they arc also paying a tax, but here, in what my Clause deals with, is a case which comes right home to the man who is taxed. Immediately after losing his wife he discovers he has not merely lost the contribution of his daughter to the home, but that his abatement is reduced from ÂŁ225 to ÂŁ135. While I realise entirely the view of the Chancellor and the Financial Secretary, who want to get finality in these things, I do suggest that there is no case comparable to this one, and that the daughter, in relation to her father, stands in a different position to anybody else. It cannot be quoted as a precedent for giving other concessions, and a sense of injustice will be removed if this concession is given.

12 M.

:I beg to second the Motion. Perhaps I may be allowed to speak more from the human than the economic side. I represent a constituency where the men who get married live with their wives while they are alive, and are constant and true to them in life and death. Therefore they refuse to marry again, and I am sure it is a very admirable thing, and as a consequence these men, usually with large families—and this may be typical of other parts of the country—get their daughters, who are bringing in a considerable amount to the home, to keep the home, and that is a loss. The home is kept going in the same way except that the daughter takes the place of the mother. The home is sacred to the memory of his wife, and surely there can be no valid reason why this man should not have the same exemption as though his wife lived. I am sure the Chancellor of the Exchequer, characterised as he has been tonight by an hon. Member on this side as an intensely human man, will see the force of these arguments and accept this intensely human Clause.

:I am afraid this Clause, though it possesses in the fullest measure those qualities of human attraction which have been referred to by the last speaker, none the lees falls within the number of those Clauses that are breaking up our present system of personal allowances on a tax which my right hon. friend has found it impossible to accept. The point was taken against him by the mover of the Clause that £100,000 had been given earlier in the evening to agricultural shows, but not so indeed. The concession in that respect was not to agricultural shows, important and valuable as they are, but the sacrifice of revenue to which my right hon. friend agreed was made for the immediate, direct, and, as it seemed to the Government, vital purpose of encouraging manufacturing and trade shows in this country. In regard to the particular concession which is now proposed by this Clause, let me remind the House that we have in this region already two allowances. The widower who has young children and who finds it necessary to employ a female relative or another housekeeper to look after them gets a personal allowance at the present time of £45, and throughout these personal allowances it has been the basis upon which the Royal Commission proceeded, and upon which the Government, acting on the recommendation of the Royal Commission, proceeded, to allow this housekeeper allowance only where there are young children to look after. I do not think, as a matter of common sense, it needs to be argued to the House that that case is the one in which the allowance is most necessary. The case now in question, of the widower without young children, deserves, no doubt, consideration, too, but not, I think, in the same measure; it is not so clearly a hard case as the other, in which an allowance is already made. There is another allowance which is already made in this region, and it does go some way towards meeting the most pitiable cases. Under the present system, if a taxpayer by reason of old age or infirmity is compelled to depend upon the services of a daughter, he receives an allowance of £25. This and other examples show that we have already dealt with those cases which might most strongly appeal to compassion, and it is impossible not to come to the conclusion that wise discretion was exercised by the Royal Commission in drawing the line they did. I know the House is wont to exhibit some impatience —perhaps not without a certain amount of reason—against the argument which is constantly repeated as to opening a dangerous door, or, to put it in another form, starting on a slippery slope. There is often a good deal of practical wisdom in that argument. Nothing has exemplified that more clearly than the question of Income Tax personal allowances. Every concession has led to another, owing to the other hard cases, which always lie just over the margin, when one hard case has been brought inside. If we were to break the excellent and salutary rule of confining allowances to cases of personal incapacity or cases where there are young children, and if we were to give a widower an allowance for a daughter when there are no such special circumstances in the case, there is no reason which could be maintained in logic against a similar allowance in respect of other female relatives. Why confine it to a daughter? Why not a daughter-in-law?

:It is a logical argument. What difference can there be in the family circumstances of a widower with a daughter and those of a widower with a grand-daughter, or an aunt, or a daughter-in-law or any other female relative? Those who are accustomed to these discussions know very well the manner in which one concession leads to another. An argument which struck me with great force, in the course of the discussion on a similar Clause in committee was this: What reason of solid substance is there for giving this to a widower rather than a bachelor? [An HON. MEMBER: "He has not got a daughter!"] The daughter in the case of the widower has reached a responsible age, but I need not amplify the argument. Once a departure is made from a single, simple, clear case one could be led on, until the concession would mean a very much larger amount. The mover of the Clause belittled the sum which this concession would cost. The figure which he quoted was fairly accurate. He alluded to it as being "only ÂŁ250,000." I have to remind him that these are not the days in which it is possible to scatter sums like that about.

:I realise that the Government, like the Colonial Secretary's Arab friends, are extremely well-armed and extremely hard up, but I do not think that is any reason for turning down Amendments behind which there are the good cases. The argument of the Financial Secretary for refusing this allowance is that we would have others coming along and asking for the same concession in respect of other relatives. I think the hon. and gallant Member missed the point altogether.

The hon. Member for West Derbyshire (Mr. Holmes) brought forward this Amendment because there are a great many cases of this sort. When the mother dies it is the most natural thing in the world in the ordinary family of small means for the eldest daughter to take on the work of the household and become the little mother of the younger children and the guardian whilst the father is at work. The boys may go out to work and make their way in the world, but the eldest daughter very often sacrifices her life and happiness and throws away her chance of marriage for the sake of the family.

There are many tragic cases of girls who have sacrificed themselves owing to the premature death of the mother of the family, and it is hard that we should be met on this Clause with the argument that it will be extended to an aunt or a daughter-in-law. The case put forward here is the natural sequence in many houses in this country. We really ought to encourage this idea of the eldest daughter taking over the household. It has many natural conditions to commend it Apart from the fact that she is likely to look after the children better than an outsider, there is another reason. The peculiar conditions of industry in this country make it inadvisable to have more women engaged in industry than is necessary. We have a number of disabled men who can do the work in industry much better than women. I am the last to close the door to women in industry, but in the present circumstances if we can do anything to discourage women going into industry and help the disabled men we ought to do it. I accordingly do put this matter forward to the Government with a strong desire that they should accept the Clause.

Question put, "That the Clause be read a Second time."

The House divided: Ayes, 55; Noes, 113.

Division No. 261.]

AYES.

[12.10 a.m.

Barnes, Major H. (Newcastle, E.)

Hall, F. (York, W. R., Normanton)

Scott, A. M. (Glasgow, Bridgeton)

Barton, Sir William (Oldham)

Halls, Walter

Sexton, James

Bell, James (Lancaster, Ormskirk)

Hayday, Arthur

Shaw, Thomas (Preston)

Bentinck, Lord Henry Cavendish-

Hirst, G. H.

Smith, Sir Allan M. (Croydon, South)

Bowerman, Rt. Hon. Charles W.

Kenworthy, Lieut.-Commander J. M.

Smith, Sir Malcolm (Orkney)

Bromfield, William

Kiley, James Daniel

Smith, W. R. (Wellingborough)

Bruton, Sir James

Lawson, John James

Spencer, George A.

Cape, Thomas

Lunn, William

Thomson, T. (Middlesbrough, West)

Carter, W. (Nottingham, Mansfield)

Maclean, Rt. Hn. Sir D. (Midlothian)

Thorne, G. R. (Wolverhampton, E.)

Casey, T. W.

Morden, Col. W. Grant

Walsh, Stephen (Lancaster, Ince)

Edwards, C. (Monmouth, Bedwellty)

Morgan, Major D. Watts

Waterson, A. E.

Edwards, Major J. (Aberavon)

Newbould, Alfred Ernest

Wilson, W. Tyson (Westhoughton)

Evans, Ernest

Pennefather, De Fonblanque

Wintringham, Thomas

Ford, Patrick Johnston

Polson, Sir Thomas A.

Wood, Major M. M. (Aberdeen, C.)

Glanville, Harold James

Raffan, Peter Wilson

Young, Robert (Lancaster, Newton)

Graham, D. M. (Lanark, Hamilton)

Raw, Lieutenant-Colonel Dr. N.

Gretton, Colonel John

Rees, Capt. J. Tudor- (Barnstaple)

TELLERS FOR THE AYES.—

Griffiths, T. (Monmouth, Pontypool)

Richardson, R. (Houghton-le-Spring)

Mr. Holmes and Mr. Charles

Grundy, T. W.

Roberts, Frederick O. (W. Bromwich)

White.

Guest, J. (York, W. R., Hemsworth)

Royce, William Stapleton

NOES.

Agg-Gardner, Sir James Tynte

Greene, Lt.-Col. Sir W. (Hack'y, N.)

Pollock, Sir Ernest Murray

Ainsworth, Captain Charles

Hall, Lieut.-Col. Sir F. (Dulwich)

Pownall, Lieut.-Colonel Assheton

Amery, Leopold C. M. S.

Hall, Rr-Adml. Sir W. (Liv'p'I, W. D'by)

Pretyman, Rt. Hon. Ernest G.

Armstrong, Henry Bruce

Hamilton, Major C. G. C.

Richardson, Alexander (Gravesend)

Atkey, A. R.

Hannon, Patrick Joseph Henry

Roberts, Rt. Hon. G. H. (Norwich)

Baird, Sir John Lawrence

Harmsworth, C. B. (Bedford, Luton)

Roberts, Samuel (Hereford, Hereford)

Balfour, George (Hampstead)

Hennessy, Major J. R. G.

Rodger, A. K.

Barlow, Sir Montague

Hilder, Lieut.-Colonel Frank

Sanders, Colonel Sir Robert Arthur

Barnston, Major Harry

Hood, Joseph

Sassoon, Sir Philip Albert Gustave D

Bell, Lieut.-Col. W. C. H. (Devizes)

Hope, Lt.-Col. Sir J. A. (Midlothian)

Seddon, J. A.

Bellairs, Commander Carlyon W.

Hopkins, John W. W.

Seely, Major-General Rt. Han. John

Bowyer, Captain G. W. E.

Horne, Sir R. S. (Glasgow, Hillhead)

Shaw, Capt. William T. (Forfar)

Breese, Major Charles E.

Hunter, General Sir A. (Lancaster)

Shortt, Rt. Hon E. (N'castle-on-T.)

Brittain, Sir Harry

Jones, Henry Haydn (Merioneth)

Stanley, Major Hon. G. (Preston)

Broad, Thomas Tucker

Jones, J. T. (Carmarthen, Llanelly)

Stanton, Charles Butt

Brown, T. W. (Down, North)

Kellaway, Rt. Hon Fredk. George

Steel, Major S. Strang

Buckley, Lieut.-Colonel A.

King. Captain Henry Douglas

Sugden, W. H.

Carr, W. Theodore

Law, Alfred J. (Rochdale)

Sutherland, Sir William

Chamberlain, Rt. Hn. J. A. (Birm. W.)

Lewis, Rt. Hon. J. H. (Univ., Wales)

Thomson, F. C. (Aberdeen, South)

Chamberlain, N. (Birm., Ladywood)

Lloyd-Greame, Sir P.

Thomson, Sir W. Mitchell. (Maryhill)

Churchman. Sir Arthur

Locker-Lampson, Com. O. (H'tingd'n)

Thorpe, Captain John Henry

Coats, Sir Stuart

M'Connell, Thomas Edward

Townshend, Sir Charles Vere Ferrers

Coote, Colin Reith (Isle of Ely)

McLaren, Robert (Lanark, Northern)

Tryon, Major George Clement

Davidson, J. C. C. (Hemel Hempstead)

Manville, Edward

Ward, Col. L. (Kingston-upon-Hull)

Davies, Alfred Thomas (Lincoln)

Mason, Robert

Ward, William Dudley (Southampton)

Du Pre, Colonel William Baring

Mond, Rt. Hon. Sir Alfred Moritz

Waring, Major Walter

Elliot, Capt. Walter E. (Lanark)

Moore-Brabazon, Lieut.-Col. J. T. C

Wheler, Col. Granville C. H.

Eyres-Monsell, Com. Bolton M.

Moreing, Captain Algernon H.

White, Col. G. D. (Southport)

Falcon, Captain Michael

Murchison, C. K.

Williams, C. (Tavistock)

Falle, Major Sir Bertram Godfray

Murray, William (Dumfries)

Williamson, Rt. Hon. Sir Archibald

Fisher, Rt. Hon. Herbert A. L.

Nall, Major Joseph

Wise, Frederick

Foxcroft, Captain Charles Talbot

Neal, Arthur

Wood, Hon. Edward F. L. (Ripon)

Fraser, Major Sir Keith

Newman, Colonel J. R. P. (Finchley)

Worthington-Evans, Rt. Hon. Sir L.

Fremantle, Lieut.-Colonel Francis E.

Newman, Sir R. H. S. D. L. (Exeter)

Young, Lieut.-Com. E. H. (Norwich)

Ganzonl, Sir John

Nicholson, Reginald (Doncaster)

Young, Sir Frederick W. (Swindon)

Gee, Captain Robert

Ormsby-Gore, Hon. William

Gibbs, Colonel George Abraham

Parker, James

TELLERS FOR THE NOES.—

Gilmour, Lieut.-Colonel Sir John

Pease, Rt. Hon. Herbert Pike

Colonel Leslie Wilson and Mr.

Glyn, Major Ralph

Perkins, Walter Frank

McCurdy.

NEW CLAUSE.—(Income tax allowance for repairs of property)

In assessments under Schedule A the reduction of the amount of the assessment authorised by Rule 7 (1) ( b ) of No. V. of the First Schedule to The Inland Revenue Act, 1918, shall, for the purposes of collection, be increased to one-fourth part of that amount where the rental or annual value of the house or building does not exceed twenty pounds, and one-fifth part of that amount where the rental or annual value exceeds

twenty pounds, but does not exceed forty pounds.—[ Mr. MacCallum Scott. ]

Brought up, and read the First Time.

:I beg to move, "That the Clause be read a Second time."

I have in past years raised the great injustice of the system which then prevailed whereby the owners of house property had to pay their tax not merely on the net income which they derived from their property but also on the sum which they expended on repairs. According to income tax law as it stands now, a landlord or property owner who undertakes the liability for repairs is entitled, according to law to the antiquated, inadequate, I think I may almost call it prehistoric, allowance of one-sixth, to be deducted from the assessed value of the property, for repairs. If it can be proved that over an average of five years the amount expended in repairs is in excess of one-sixth of the annual value then he is permitted to claim back a refund of the income tax which he has paid on the amount by which the cost of the repairs has exceeded one-sixth of the annual value. He pays the tax and he is allowed to claim a refund. That is a fair recognition of the grievance. I would like to call the attention of the Chancellor to the large extent to which this system of paying the tax and claiming refund prevails. The flat-rate allowance is one-sixth. That was the rate before the War, but even then a committee appointed by the Scottish Office reported that the cost of repairs for small property in many cases exceeded, not one-sixth, but one-fourth, and it is notorious that since the War the cost of repairs has at least doubled. An overwhelming amount of house property is small property, and the system which now prevails means that practically in regard to the whole of the house property of the country the owner or landlord pays the income tax— which he is not entitled to pay— and claims it back at a later stage. Look at the cumbersomeness and the costliness of this method which is universal at the present time. The owner has all the expense of keeping accounts and vouchers for five years, and apportioning expenditure between different properties. He has to fill up elaborate returns, and he has to be out of his money for a year. But the owner is not the only person who is put to expense, because the State as well is put to considerable expense. All these claims have to be scrutinised and adjudicated upon and a host of Treasury officials are employed upon this work. This particular grievance came before the Royal Commission which recently reported upon the Income Tax, and they condemned this cumber some and costly method, and they made a recommendation to remove that grievance. The full recommendation is one which cannot be put into operation at once. They recommend that the whole system of paying Income Tax on the cost of repairs and claiming it back again be swept away and that there should be a flat rate allowance for repairs based on the average actual cost of repairs graduated in accordance with the class of property. It would take same considerable time to work out such a scheme because rents are now abnormal and so is the cost of repairs, and it is not easy to arrive at a fair scale. They recommend that until that scale is worked out a temporary scale should be adopted, and the scale in my Amendment is the temporary scale which the Royal Commission has recommended should be put into force until the Government has worked out its full scheme and dealt with the whole question of Income Tax reform as recommended by the Committee.

It simply amounts to this: Instead of an allowance of one-sixth there should be an allowance of one-fourth of the assessed value of all property up to ÂŁ20; between ÂŁ20 and ÂŁ40 the allowance should be one-fifth, and above that amount it should be one-sixth, and there should be no right to claim back any amount paid beyond that. That is not a concession to owners of property; it is only giving them what they are entitled to, and it is removing at the same time a considerable grievance. I claim for them no remission of Income Tax and no special protection of this key industry. I only ask that they should pay an adequate amount on the net income which they derive from their property. The system I recommend has the support of the Royal Commission. It is simple and easy to understand. The State will save by it and it will also do something to promote the supply of houses, and it will do it better than subsidies. It will not lose any revenue. A famous Treasury official once said that with regard to any proposal brought before him, " If it is simple it is right." This proposal is simple, and apart from that it is just and right, and I therefore recommend it to the House.

:I beg to second the Motion. It gives me much pleasure to find myself in agreement with the hon. Member who has just spoken, because I think he has exposed a monopoly. Property owners who have small holdings in house property have, by. the nature of things, been very hardly hit in recent years. I resisted the recent increase of rents, but we must recognise facts. I think that anything we can do to encourage owners to keep their houses in repair, especially now that we are cutting down the building of new houses, should be encouraged, and for these reasons I hope the Government will accept this new Clause.

:I beg to move, "That the debate be now adjourned."

I do so for the purpose of ascertaining what is the intention of the Government. The Chancellor of the Exchequer must be aware that on a Monday hon. Members have travelled very long distances. Many of us have sat on committees, and there are four standing committees meeting at eleven o'clock this morning. I am sure my right hon. Friend does not wish to press the House too hardly in the pursuit of getting this measure through, and he knows as well as I do that a measure of good will in all parts of the House is of very great assistance to the Minister in making progress with his measure. The New Clauses which have been moved and which are now on the Paper emanate from all quarters of the House, and it is only by general consent and agreement that the element of goodwill can be secured. To achieve this end there must be a fair discussion of the Clauses at a reasonable time. I wish to ask the Chancellor of the Exchequer if he will say how far he intends to go to-night? I think he has gone far enough. He has made very good progress with Clauses which, while hot in the ordinary sense of the word contentious, raise a very large amount of division in all parts of the House. He has conducted his share of debate with his usual good temper and skill, and I think, speaking on behalf of Members in all parts of the House, that we have done our share, either by speaking or holding our tongues, in getting business through, and I hope he will see that he has gone as far as he reasonably can.

:I should, of course, desire to consult the Members of the House. I readily acknowledge that there has been no obstruction of any sort from any part of the House, and that the speeches have been directed towards the real substance of the Clauses, with no desire to prevent their rapid passage into law. At the same time, it is perfectly obvious that we must have the Report stage concluded to-morrow. If I were assured in my own mind, or if I could be assured by the House, that we could conclude the Report stage by about midnight to-morrow, I would readily accede to the suggestion of my right hon. Friend. I think it would be an unfortunate thing, now that we are here at half-past twelve, to have two nights late, to rise now and be late to-morrow night. Now that we are here and the late trams have gone we ought to get forward with the business to-night. That I gather to be the general sense of the House, and in the circumstances I hope my right hon. Friend will forgive me, and that the House will not think I am driving them too far, if we carry this matter still further. There are still very many pages of Clauses to dispose of. Once some of them are cleared off we should be in a different position, and on the whole I think we should be better advised to go a little further to-night with a view to being able to rise somewhat earlier tomorrow.

:I hope the Chancellor of the Exchequer or the Leader of the House in endeavouring to get an opinion as to how far Members desire to go will consult the whole Members of the House. One cannot sit long in this House without seeing certain things done behind the Chair which in our humble judgment are certainly dangerous. One has seen already, and one is bound to give expression to the fear, that there has been an endeavour to make an arrangement, but the greatest party that sits on the Opposition benches has not been consulted in the least. I want to take this opportunity of protesting against the procedure that has been adopted; when we desire to adjourn, all parties ought to be consulted with a view to getting good will.

:Has the right hon. Gentleman overlooked the fact that at eleven o'clock this morning there are no fewer than four Grand Committees sitting?

:If this Motion was going to be made, why was it not made half an hour ago, when it would really have been a convenience to Members of the House? As it is, most of us have now lost our trains, and therefore it is only right that we should continue this discussion. I have sat on a Committee to-day and 1 will have to sit on a Committee in the morning, but since we are here I should prefer that we go on rather than sit late to-morrow night. By sitting late we can get through the major part of the Bill. The right hon. Member for Peebles (Sir D. Maclean) said that this being Monday Members have had to travel a long way. "Well, they can always come up, as I do, on a Sunday night in order to attend to their duties, and I hope the Chancellor of the Exchequer will proceed with the Bill.

:I hope the Chancellor of the Exchequer will adjourn the House in accordance with the plea made by the right hon. Gentleman the Member for Peebles (Sir D. Maclean). The hon. Member who has just sat down wants to know why we want to go home. Speaking for myself, I am absolutely exhausted. I am perspiring, and in this state of perspiration no one can do his work efficiently. It would be far better to take an hour or two on Friday afternoon, or even get a day's extension so far as the Recess is concerned, in order to do this work properly. There has been no obstruction at all from this side, and I think that with the good will of both sides of the House we will be able to finish. I will give a guarantee, as far as we of the Labour party are concerned, that there will be no long speeches; we will put no obstruction in the way, and will try to bring the matter to an end to-morrow night, and I think we can easily do it. I have to be here at eleven o'clock tomorrow morning for a Committee, and that will mean getting down here earlier to go through correspondence and get everything ready, and then we shall have to be here to-morrow night as well. We are not doing justice to the country or ourselves by remaining here in this condition. This is the hottest night I ever remember in the House. I have always managed to keep cool here, but I feel the heat to-night, really, and I do appeal to the Chancellor of the Exchequer to let us adjourn now, so that we can put our backs into it to-morrow without any obstruction, and try to finish as nearly as possible at midnight to-morrow.

:If such an arrangement could be come to whereby we could conclude the Report stage by half-past twelve to-morrow night, I think it would be a convenience to a great many of us. To sit up late at night when one has Grand Committees in the morning, especially when those Grand Committees sit such long hours as they do, is really a very considerable, strain upon one. I understand a great many of these Clauses will either not be moved or will take up very little time, and many of us would rather begin fresh to-morrow.

:One consideration I would like to put to the Government is that on the Committee stage a part of this Finance Bill was pushed through the sitting at very late hours. It is not to the public interest that such important matters as these, dealing with taxation, should be discussed in this manner in a tired House when there is no adequate Report stage. When we spend a great deal of time in the early hours over the Committee stage the same procedure ought not to be followed on the Report stage. The Government might quite easily accede to the request that has been made on the assurances that have been given, with general good will and with no desire to obstruct. Members only ask the opportunity to state a case reasonably, to get an answer, and, if necessary, to take a division.

:This is the first time I have presumed to intervene on a discussion of this kind, which, I think, is better left to Members with some experience, but I must add my appeal to those already made to the Chancellor of the Exchequer. I do it partly on this ground, that it was exactly the same hour as this when I found myself dealing with the same matter on the Committee stage of the Bill. I had to do it then under circumstances which were not favourable. I was tired and the House was tired, and now I find it twenty minutes to one again, and I have once more to put this very important matter before the House, and I am not in a physical condition to do it. It is really unfair of the Chancellor of the Exchequer to ask us to go on in the intense heat. I just add my appeal, and I apologise to the House for presuming to intervene in a matter of this sort.

:I wish to meet the desire of hon. Members to the very best of my ability, but what the last speaker has just said gives me an idea of what will happen to-morrow if he wants more time to develop his argument.

:If we can be assured that we can finish to-morrow evening about midnight, I think it will be of advantage to rise as early as possible tonight, but I would ask the House to go on with two or three Clauses on the understanding that we rise at half-past one.

:With your permission, Sir, and the leave of the House, I should like to say one or two words on the matter. If, perhaps, another couple of Clauses were to be taken, and without giving any express undertaking, because there is no use making this attempt as nobody can speak with any confidence for a sufficient body in the House to carry out an undertaking of that kind, I think we might sit until about half-past one to-morrow, and with your permission I am quite willing to withdraw the motion.

:My right hon. Friend is restricting the offer of the Chancellor of the Exchequer a good deal. I do not quite see what he is giving to the Government. The Chancellor of the Exchequer suggested sitting till half-past one to

night on the understanding that we would finish off midnight to-morrow night. If we can have an understanding of that kind, we shall be glad to make it. But I understand that is not accepted, and in fact we are warned there can be no understanding.

:I am not asking my right hon. Friend (Sir D. Maclean) to bind himself for them for whom he cannot speak. But I understood that Members who are now in the House refuse to accept that arrangement. I am afraid if that be so, we cannot give way.

:I think there is some misunderstanding. What I gather my right hon. Friend desires to do is to adjourn now, and he is willing to give the undertaking, but not to sit till half-past one and then to give the undertaking. I am sorry if the arrangement breaks down.

:How can the right hon. Gentleman (Sir D. Maclean) who sits on the Front Opposition Bench, give an undertaking? He represents only a small group in the House.

:May I just correct the hon. Member. I expressly said that I could give no undertaking at all. I hope that futile remark will not be repeated.

Question put, "That the Debate be now adjourned."

The House divided: Ayes, 26; Noes, 109.

Division No. 262.]

AYES.

[12.45 a.m.

Adamson, Rt. Hon. William

Hirst, G. H.

Smith, W. R. (Wellingborough)

Barnes, Major H. (Newcastle, E.)

Holmes, J. Stanley

Thorne, G. R. (Wolverhampton, E.)

Barton, Sir William (Oldham)

Kenworthy, Lieut.-Commander J. M.

Walsh, Stephen (Lancaster, Ince)

Edwards, C. (Monmouth, Bedwellty)

Kiley, James Daniel

Waterson, A. E.

Glanville, Harold James

Lawson, John James

White, Charles F. (Derby, Western)

Graham, D. M. (Lanark, Hamilton)

Maclean, Rt. Hn. Sir D.(Midlothian)

Wood, Major M. M. (Aberdeen, C.)

Griffiths, T. (Monmouth, Pontypool)

Morgan, Major D. Watts

Young, Robert (Lancaster, Newton)

Hall, F. (York, W.R., Normanton)

Newbould, Alfred Ernest

Halls, Walter

Rees, Capt. J. Tudor- (Barnstaple)

TELLERS FOR THE AYES.—

Hayday, Arthur

Royce, William Stapleton

Mr. Cape and Mr. Raffan.

NOES.

Agg-Gardner, Sir James Tynte

Barnston, Major Harry

Bruton, Sir James

Ainsworth, Captain Charles

Bell, Lieut.-Col. w. C. H. (Devizes)

Buckley, Lieut.-Colonel A.

Amery, Leopold C. M. S.

Bellairs, Commander Carlyon W.

Carr, W. Theodore

Armstrong, Henry Bruce

Bowyer, Captain G. W. E.

Chamberlain, Rt. Hn. J. A.(Birm., W.)

Atkey, A. R.

Breese, Major Charles E.

Chamberlain, N. (Birm., Ladywood)

Baird, Sir John Lawrence

Brittain, Sir Harry

Churchman, Sir Arthur

Balfour, George (Hampstead)

Broad, Thomas Tucker

Coats, Sir Stuart

Barlow, Sir Montague

Brown, T. W. (Down, North)

Coote, Colin Reith (Isle of Ely)

Davidson, J. C. C. (Hemel Hempstead)

Kellaway, Rt. Hon. Fredk. George

Rodger, A. K.

Du Pre, Colonel William Baring

King, Captain Henry Douglas

Sanders, Colonel Sir Robert Arthur

Edwards, Major J. (Aberavon)

Law, Alfred J. (Rochdale)

Sassoon, Sir Philip Albert Gustave D.

Elliot, Capt. Walter E. (Lanark)

Lloyd-Greame, Sir P.

Seddon, J.A.

Evans, Ernest

Locker-Lampson, Com. O. (H'tingd'n)

Shaw, Capt. William T.(Forfar)

Eyres-Monsell, Com. Bolton M.

M'Connell, Thomas Edward

Shortt, Rt. Hon. E. (N'castle-on-T.)

Falcon, Captain Michael

M'Curdy, Rt. Hon. Charles A.

Stanley, Major Hon. G.(Preston)

Falle, Major Sir Bertram Godfray

Mallalieu, Frederick William

Stanton, Charles Butt

Ford, Patrick Johnston

Mason, Robert

Sugden, W.H.

Foxcroft, Captain Charles Talbot

Mond, Rt. Hon. Sir Alfred Moritz

Sutherland, Sir William

Fraser, Major Sir Keith

Moore-Brabazon, Lieut.-Col. J. T. C.

Thomson, F. C.(Aberdeen, South)

Fremantle, Lieut.-Colonel Francis E.

Morden, Col. W. Grant

Thomson, Sir W. Mitchell-(Maryhill)

Gee, Captain Robert

Moreing, Captain Algernon H.

Thorpe, Captain John Henry

Gibbs, Colonel George Abraham

Murchison, C. K.

Townshend, Sir Charles Vere Ferrers

Gilmour, Lieut.-Colonel Sir John

Murray, William (Dumfries)

Tryon, Major George Clement

Greene, Lt.-Col. Sir W. (Hackn'y, N.)

Nall, Major Joseph

Waring, Major Walter

Hall, Lieut.-Col. Sir F. (Dulwich)

Neal, Arthur

Wheler, Col. Granville C.H.

Hall, Rr-Adml Sir W.(Liv'p'l. W. D'by)

Newman, Sir R. H. S. D. L. (Exeter)

White, Col. G.D.(Southport)

Hamilton, Major C. G. C.

Nicholson, Reginald (Doncaster)

Williams, C. (Tavistock)

Hannon, Patrick Joseph Henry

Ormsby-Gore, Hon. William

Winterton, Earl

Harmsworth, C.B. (Bedford, Luton)

Parker, James

Wise, Frederick

Hennessy, Major J. R. G.

Parry, Lieut.-Colonel Thomas Henry

Wood, Hon. Edward F. L. (Ripon)

Hilder, Lieut.-Colonel Frank

Pease, Rt. Hon. Herbert Pike

Worthington-Evans, Rt. Hon. Sir L.

Hood, Joseph

Perkins, Walter Frank

Young, E. H. (Norwich)

Hope, Lt.-Col. Sir J. A. (Midlothian)

Pollock, Sir Ernest Murray

Young, Sir Frederick W. (Swindon)

Hopkins, John W, W.

Pownall, Lieut.-Colonel Assheton

Horne, Sir R. S. (Glasgow, Hillhead)

Pretyman, Rt. Hon. Ernest G.

TELLERS FOR THE NOES.—

Hunter, General Sir A. (Lancaster)

Raw, Lieutenant-Colonel Dr. N.

Mr. Dudley Ward and Colonel

Jones, Henry Haydn, (Merioneth)

Roberts, Rt. Hon. G. H. (Norwich)

Leslie Wilson.

Jones, J. T.(Carmarthen, Llanelly)

Roberts, Samuel (Hereford, Hereford)

Question again proposed, "That the Clause be read a Second time."

:The case which has been put undoubtedly has the support of the Royal Commission which dealt with this matter. They, however, put forward an elaborate arrangement for meeting the particular occasions which this Clause is designed to meet. The hon. Member does not profess that he carries out the recommendation oft he Royal Commission, but he provides a temporary make shift to which their report also refers. I would suggest that we do not want such a make shift unless there is a case of extreme urgency. I do not deny that the whole matter ought to be dealt with at some not very remote time, but I suggest that there is no such case of urgency that it ought to be dealt with now. In any case if a man has spent upon repairs more than the one-sixth which is allowed; it is always open to him to make a claim for the actual amount he has spent He is entitled to take the average expended within the last five years and use that deduction instead of the one-sixth. That advantage being always open to him he need suffer no loss if he chooses to take advantage of it as most landlords do. But it may be said that not every landlord has had his property for five years. In practice the period during which a landlord has held his property is taken and an allowance made upon disclosure of the actual amount expended during that period. The hon. Member for Central Hull (Lieut.-Comman- der Kenworthy) made the statement that it was wise at the present time to encourage expenditure on repairs. But I would point out that the last way to encourage expenditure on, repairs is to give a flat rate allowance which the landlord obtains whether he actually spends the money or not. The real way to get expenditure on repairs is to let him show that he has spent more than the allowance given to him. Accordingly I put it to the House that so far from being an advantage to the landlord who is willing to expend money on repairs the new Clause is really an encouragement to the landlord who does not mean to spend any more than he can help, but is willing to take what flat rate he can get. I would, therefore, ask the hon. Member not to press this Clause to a division at the present time.

1.0 A.M.

:This is really a very important question and it has a bearing upon property of all kinds. The real trouble is the five years' average. Dealing with small property the difficulty is to produce accounts for five years, and this Amendment is a way of getting over it. I agree this is a difficult question and it will have to be considered at another time, but I would point out that so far as the State is concerned no real advantage is gained by the five years. If an average for a less period was taken or even if only one year was taken, it would not make much difference to the tax. The House knows that as regards repairs to house property a lot of money may be spent one year, and for five or six years no money at all. When a man has a newly built house it may be that the allowance of one-sixth is quite sufficient. Then one year he has a heavy expenditure, and under the five years' average he still has to pay a large amount of tax, although he has spent the whole of the rent, and even more, on the property. It would be a great advantage to the taxpayer if he really escaped the tax when he spent the money instead of having the five years' average. I suggest that the Chancellor should accept that. Owning house property is a business, and in other businesses actual expenditure in any other year is allowed a deduction in calculating Income Tax, and why the business of owning house property, which is of vital importance to the country, should be put on a different basis, and further that is absolutely necessary, is a thing I can never see or understand, and I do hope that before another year the Chancellor of the Exchequer will realise the importance of the taxation in connection with reality of every description. I hope the Chancellor of the Exchequer will give that undertaking, and that my hon. Friend will not press this Amendment.

:I hope my hon. Friend will press this Amendment to a Division, and if he does so I shall certainly support him. I do not propose to continue the Debate, but I am bound to say the right hon. Gentleman could only deliver the speech he did at any other time than one o'clock in the morning. I have never heard him making a speech which has had so little relevance to the facts of the situation. I am quite sure the slightest reflection will show him the falsity of his argument. During the whole period of the War it was impossible for any repairs to be carried out as the labour was not available for the purpose.

:, No doubt. I think that bears still more upon the argument which I am endeavouring to bring out. During the whole period of the War it was quite impossible to get any repairs executed on any account. From 1918 onwards the cost of repairs was altogether out of proportion to what it had been hitherto. If anybody really did make repairs to property he did so at an enormous cost, and at the present time he is faced with the situation that all his outgoings have enormously increased. I do not take exception to that. The Rent Restrictions Act in March also affected it. It has been impossible for him to raise his prices as other people have raised their prices in other businesses where the costs have gone up. He has been compelled to be content with a small addition to the rent which he has hitherto charged. His rates have doubled in almost every case, and in the present time there can be no doubt, and my hon. Friend who has had great experience in this matter will agree, that the owner of small property has no surplus of income. In these circumstances what is the use of talking to him about the five years' average? The five years' average does not help him in the slightest. If he has really done the repairs necessary which have arisen during the lapse of time during the whole period of the War during which they could not be executed, what happens now is that in addition to his other costs he finds that he has to pay taxation upon the repairs which he has executed.

In these circumstances it appears to me that the matter is certainly one of greater importance this year than it can be next year, and the succeeding years will render this argument more important. One hopes that this question of rating will be dealt with by the Government. The Government have a Committee considering this matter, but it appears to me that certainly this concession should be made now. The last concession which the hon. and gallant Member who spoke before me mentioned we cannot have in this year's Finance Bill. I realise that, but this small concession should, I think, be made now. I think a strong case has been made for it, and I do not think the answer we have received has any relation to the realities of the case. I certainly hope that if no further concession will be offered to us the House will divide, and those who are really anxious that houses should be built in the country will support the Amendment.

:I rise to support the proposal. A large number of what is known as slum property exists and it is an urgent necessity to give owners of such property every possible facility in order to get their property put into a decent condition as it can be and even though it would mean something to the Exchequer the Chancellor of the Exchequer must realise that every shilling in that way may mean the saving of hundreds of pounds in other directions. Those who serve on local authorities know that this dilapidated property present great difficulties. Among the owners whom we go to are many small people who tell us they have

NEW CLAUSE.—(Amendment of 10 and 11 Geo. V., c. 18, s. 52, ss. (2))

Section fifty-two, sub-section (2), paragraph (ii), of The Finance Act, 1920, shall have effect as though the following words were added, namely: "including a department of any society registered under The Industrial and Provident Societies. Act, 1893,

not the money and ask us if we will give them time. For these reasons as well as for the others already given I think that if the Chancellor had an opportunity of making further inquiry he would find there is a great deal in this proposal now before us. I will support the proposal most heartily if it is taken to a Division.

Question put, "That the Clause be read a Second time."

The House divided: Ayes, 23; Noes, 106.

Division No. 263.]

AYES.

[1.8 a.m.

Barnes, Major H. (Newcastle, E.)

Hirst, G. H.

Waterson, A. E.

Barton, Sir William (Oldham)

Kenworthy, Lieut.-Commander J. M.

White, Charles F. (Derby, Western)

Cape, Thomas

Lawson, John James

Williams, C. (Tavistock)

Edwards, C. (Monmouth, Bedwellty)

Newbould, Alfred Ernest

Wood, Major M. M. (Aberdeen, C.)

Foxcroft, Captain Charles Talbot

Royce, William Stapleton

Young, Robert (Lancaster, Newton)

Glanville, Harold James

Scott, A. M. (Glasgow, Bridgeton)

Hall, F. (York, W. R., Normanton)

Smith, W. R. (Wellingborough)

TELLERS FOR THE AYES.—

Halls, Walter

Thorne, G. R. (Wolverhampton, E.)

Mr. Kiley and Mr. Raffan.

Hayday, Arthur

Walsh, Stephen (Lancaster, Ince)

NOES.

Agg-Gardner, Sir James Tynte

Gilmour, Lieut.-Colonel Sir John

Parker, James

Ainsworth, Captain Charles

Greene, Lt.-Col. Sir W. (Hack'y, N.)

Parry, Lieut.-Colonel Thomas Henry

Amery, Leopold C. M. S.

Hall, Lieut.-Col. Sir F. (Dulwich)

Pease, Rt. Hon. Herbert Pike

Armstrong, Henry Bruce

Hamilton, Major C. G. C.

Perkins, Walter Frank

Atkey, A. R.

Hannon, Patrick Joseph Henry

Pollock, Sir Ernest Murray

Baird, Sir John Lawrence

Harmsworth, C. B. (Bedford, Luton)

Raw, Lieutenant-Colonel Dr. N.

Balfour, George (Hampstead)

Hennessy, Major J. R. G.

Rees, Capt. J. Tudor- (Barnstaple)

Barlow, Sir Montague

Hilder, Lieut.-Colonel Frank

Roberts, Rt. Hon. G. H. (Norwich)

Barnston, Major Harry

Holmes, J. Stanley

Roberts, Samuel (Hereford, Hereford)

Bell, Lieut.-Col. W. C. H. (Devizes)

Hood, Joseph

Roundell, Colonel R. F.

Bellairs, Commander Carlyon W.

Hope, Lt.-Col. Sir J. A. (Midlothian)

Sanders, Colonel Sir Robert Arthur

Bowyer, Captain G. W. E.

Hopkins, John W. W.

Sassoon, Sir Philip Albert Gustave D.

Breese, Major Charles E.

Horne, Sir R. S. (Glasgow, Hillhead)

Seddon, J. A.

Brittain, Sir Harry

Hunter, General Sir A. (Lancaster)

Shaw, William T. (Forfar)

Broad, Thomas Tucker

Jones, Henry Haydn (Merioneth)

Shortt, Rt. Hon. E. (N'castle-on-T.)

Brown, T. W. (Down, North)

Jones, J. T. (Carmarthen, Llanelly)

Smith, Sir Allan M. (Croydon, South)

Bruton, Sir James

Kellaway, Rt. Hon. Fredk. George

Stanley, Major Hon. G. (Preston)

Buckley, Lieut.-Colonel A.

King, Captain Henry Douglas

Stanton, Charles Butt

Carr, W. Theodore

Law, Alfred J. (Rochdale)

Sugden, W. H.

Chamberlain, Rt. Hn. J. A. (Birm., W.)

Lindsay, William Arthur

Sutherland, Sir William

Chamberlain, N. (Birm., Ladywood)

Lloyd-Greame, Sir P.

Thomson, F. C. (Aberdeen, South)

Churchman, Sir Arthur

Locker-Lampson, Com. O. (H'tingd'n)

Thomson, Sir W. Mitchell- (Maryhill)

Coats, Sir Stuart

M'Connell, Thomas Edward

Thorpe, Captain John Henry

Coote, Colin Reith (Isle of Ely)

Mallalieu, Frederick William

Townshend, Sir Charles Vere Ferrers

Davidson, J. C. C. (Hemel Hempstead)

Mason, Robert

Tryon, Major George Clement

Du Pre, Colonel William Baring

Mond, Rt. Hon. Sir Alfred Moritz

Ward, William Dudley (Southampton)

Edwards, Major J. (Aberavon)

Moore-Brabazon, Lieut.-Col. J. T. C.

Waring, Major Walter

Elliot, Capt. Walter E. (Lanark)

Morden, Col. W. Grant

White, Col. G. D. (Southport)

Evans, Ernest

Moreing, Captain Algernon H.

Wise, Frederick

Eyres-Monsell, Com. Bolton M.

Murchison, C. K.

Wood, Hon. Edward F. L. (Ripon)

Falcon, Captain Michael

Murray, William (Dumfries)

Worthington-Evans, Rt. Hon. Sir L.

Falle, Major Sir Bertram Godfray

Nall, Major Joseph

Young, E. H. (Norwich)

Fraser, Major Sir Keith

Neal, Arthur

Young, Sir Frederick W. (Swindon)

Fremantle, Lieut.-Colonel Francis E.

Newman, Sir R. H. S. D. L. (Exeter)

Gee, Captain Robert

Nicholson, Reginald (Doncaster)

TELLERS FOR THE NOES —

Gibbs, Colonel George Abraham

Ormsby-Gore, Hon. William

Colonel Leslie Wilson and Mr.

McCurdy.

organised for providing house-building or house-purchase schemes for its members."— [ Mr. Waterson. ]

Brought up, and read the First Time.

:I beg to move, "That the Clause be read a Second Time,"

I understand that the Chancellor of the Exchequer is prepared to accept it. It will place the societies on the same basis as building societies, which have an exemption until December 31st, 1922,

:Cannot we have some explanation of this from the Chancellor of the Exchequer?

Question put, and agreed to.

Clause read a Second time, and added to the Bill.

NEW CLAUSE.—(Alteration of entertainments duty.)

On and after the first day of August, nineteen hundred and twenty-one, in lieu of the entertainments duty imposed by section one of The Finance (New Duties) Act, 1916, as amended by section three of The Finance Act, 1917, section eleven of The Finance Act, 1918, and section seven of The Finance Act, 1919, there shall be charged, levied, and paid on all payments for admission to any entertainment as defined by the Act of 1916 an excise duty at the following rates (namely): —

Where the payment, excluding the amount of the duty,

s.

d.

does not exceed 2½d

0

0½

exceeds 2½d. but does not exceed 5d.

0

1

exceeds 5d. but does not exceed 7½d

0

1½

exceeds 7½d. but does not exceed 10d.

0

2

exceeds 10d. but does not exceed 1s. 3d

0

3

exceeds 1s. 3d. but 'does not exceed 2s. 2d

0

4

exceeds 2s. 2d. but does not exceed 2s. 7d

0

5

exceeds 3s. but does not exceed 3s. 5d

0

7

exceeds 3s. 5d. but does not exceed 4s. 4d

0

8

exceeds 4s. 4d. but does not exceed 5s. 3d

0

9

exceeds 5s. 3d. but does not exceed 7s. 6d.

1

0

exceeds 7s. 6d. but does not exceed 10s. 6d.

1

6

exceeds 10s. 6d. but does not exceed 15s.

2

0

exceeds 15s., 2s. for the first 15s. and 6d. for every 5s. (or part of 5s.) over 15s— [ Mr. Newbould. ]]

Brought up, and read the First time.

:I beg to move, "That the Clause be read a Second time."

I find myself speaking at an even earlier hour than that at which I proposed a similar new Clause on the Committee stage, but this Clause must not be con- fused with the Clause I moved then. It has a similar appearance, but it is a very different thing. It is a much more modest proposal. When I moved a similar Clause in Committee the Chancellor of the Exchequer rejected it on the ground that it would mean a very considerable loss of revenue. I did not agree with him then and I do not agree with him now. I think that it would mean an increase in revenue, and I gave him facts, figures and arguments in support of my contention. I think my case is unanswerable; at any rate, it was unanswered. The attitude of the Chancellor of the Exchequer and his advisors on this matter is rather curious. They say: "We substantially accept your figures, and we think that your arguments are sound." Having accepted my figures and agreed that my arguments are sound, they seem to think there is a snare somewhere and refuse to take any risk. There is certainly no risk in the attitude they maintain. A risk means an element of doubt, and there is no doubt whatever that if the Chancellor of the Exchequer maintains his present attitude the revenue will suffer very considerably. In fact, that is the Chancellor of the Exchequer's case. He says that he cannot afford to sacrifice the present for the future. He says: "I do not care how much it will bring me in in the future, I cannot afford to sacrifice anything to-day." If my proposals are adopted there is a risk, but also a compensating certainty. The Chancellor and his advisers do not dispute the statements I make that the revenue will gradually increase in the future if my proposals are adopted. That is the certainty which I have to offer. The risk is, would the revenue lose much this year, and, if so, how much? The scale in these Clauses represents a risk considerably below that in the Clause I moved on the Committee stage. It is a more modest proposal. My prediction is that there would be a slight fall in the revenue this year-nothing like as much as the Chancellor imagines, because he knows quite well that the bottom has already fallen out of the revenue derived from the tax; that we should get back to normal next year; and that thereafter there would be an increase, gradual but rapidly increasing, as the small, out-of-date, badly-ventilated, badly-constructed cinema theatres which there are in this country to-day were replaced by larger, more comfortable, and thoroughly up-to-date theatres. Unless we can have those theatres, we cannot continue to provide the revenue which the Chancellor is now getting from this tax. I am reluctant to place before the House at this hour all the facts and figures which 1 first put before the Chancellor and his advisers when I introduced a deputation, but I feel it will be necessary to refresh the Chancellor's memory somewhat. I warned the Chancellor that his present attitude would thwart the development of the industry and injure it. In reply to an hon. Member who spoke on the Committee stage, the Chancellor said:

Let me put this very simple question to the Chancellor of the Exchequer. Suppose I have a theatre which takes ÂŁ300 a week; supposing it costs me to run it as economically as I possibly can ÂŁ250 a week, it appears on the face of it that I am making quite a useful profit. Nothing of the sort. Out of ÂŁ300, which is my total takings, the Chancellor of the Exchequer takes upwards in Entertainments Duty of ÂŁ70 approximately, according to the price of the seats charged, out of the ÂŁ300, and I am running that theatre at a loss of ÂŁ20 a week. Is that killing the goose that lays the golden egg; is that taking more money from our industry than it can bear. That is not a hypothetical case; that is a concrete case which I can prove to the Chancellor of the Exchequer or his advisors by giving them access to books. But, what is more, it is not only an example, it is the case of fifty per cent. of the cinema theatres in this country. The Chancellor is taking 50 per cent. of the money that he derives in the, way of Entertainments Duty in cinema theatres, and turning these theatres into losing concerns. Is that killing the goose that lays the golden egg? Is that taking more from an industry than it can bear? I am applying his own test and I am asking him to apply his own test, and he knows thoroughly well that I am telling the truth, because his advisors will tell him how the revenue is falling. We cannot continue to keep these places open very long on this principle. This is not a tax on profits. I do not care how heavily the Chancellor of the Exchequer taxes profits when the country needs it. But do not tax the losses more heavily than you tax the profits. There is one more item in the Chancellor's speech to which I am bound to refer and I am sorry to keep the House at this late hour.

I am forced, unfortunately, into this position, and after all I am speaking for an industry of some importance. The Chancellor of the Exchequer said "On the general argument I would like to point out to the Committee that we had just now precisely the same proposition put to us by every trade and industry. It is said by each industry in turn, if you go on taxing us to this extent you will be depriving us of these sums of money which we have been laying aside for development, and the less we are able to develop, the less revenue you will get in the future. This is the regular stereotyped argument which an industry always puts forward to any Chancellor of the Exchequer." That may be so. But what other industry is taxed on its turnover in this way? What other industry is taxed on its losses more heavily than it is taxed on its profits? What other industry has a tax approximating 28 per cent. of its gross takings, extorted from it before it is allowed one single penny to cover its expenses? The whole question hinges around the number of attendances. The number of attendances to cinema theatres or other places of entertainment is the measure of their prosperity, and when attendances fall one has to look for the reason why. [An HON. member: "Hot weather."] I am not referring to the attendances during these few hot weeks. I am going back to 1919 and earlier if the House likes and trace the fall in the attendances to the real cause. The real cause in the fall of the attendances was the increase in prices. The increase in prices first took place in 1919. I do not say that there were no cases before that, but substantially the whole of the industry found it necessary to increase their prices in order to meet the extraordinary increase in wages, in prices, of films and in running costs generally. From the date when that substantial increase in prices was made the number of attendances began to fall. It is very simple. Go back to your old prices and your attendances will go up. That is not possible and I am going to explain to the House why. When cinemas—the great majority of those in existence in this country—were first built they were built under an entirely different set of circumstances. They were for an entirely different purpose from what iihey are now. In those times the length of the programme was three-quarters to an hour, and seldom exceeded an hour and a quarter and the result was that with a continuous performance we had eight programmes a day. That is what we had, eight complete new audiences a day to see those pictures. In those days the theatres were quite large enough for that short programme. The number of people you could pass through the theatres was large enough to earn money to pay the expenses and leave a very reasonable profit. The length of a single film to-day is about 5,000 feet, the length of the programme is 2½ to 3 hours and the cost of the programme is about £300 against £30 in the pre-war and early war periods. The result of this is that the theatres to-day are not large enough to hold sufficient money to pay the running costs. The only thing to do is to reconstruct those that can be reconstructed or replace them by entirely new theatres. Before the War the theatres in this country compared very favourably with the theatres in the United States. During the War the United States made very rapid progress in reconstruction and they now have some of the finest cinema theatres in the world capable of holding 5,000 people. We have no such thing in this country.

:I go to see the pictures, but I do not want to be one of 5,000. I am not considering you.

:Probably the hon. Member will be able to buy a house cinema apparatus and see his own pictures.

:I was trying, before I was interrupted, to make the point that the cinemas in this country will have to be substantially improved in structure and size if the industry is to continue to prosper. In America they have already done that. They were able to carry out that reconstruction during the War to keep pace with the changed conditions of the films which were shown. As the films increased in length and importance, as the subjects became very much larger, the cinema theatres were rebuilt and enlarged to keep pace with them. In this country during the war and immediately afterwards that was not possible. Now the time has come when we can begin to build at something like reasonable prices, and it is very essential that we should do so without delay. Every penny of revenue which the Chancellor of the Exchequer loses or we should gain by this concession will go into the new construction in order to provide him with additional revenue in the years to come. Not only so, but you will so encourage the exhibitor to go ahead that it will attract an enormous amount of new capital, with the result that within the next year or two new cinemas will spring up and take the place of the insanitary places that now exist. The Chancellor of the Exchequer is looking for a considerable revenue from this tax for many years ahead. We know that this tax was put on as a War measure, but we do not ask that it should be taken off. In the interest of the industry and to help the development of the industry I do ask however for this reasonable concession. The concession I am asking the Chancellor to make is that for every six shillings taken at the box office he should be content to take one shilling. At present, out of every six shillings taken at the box office he takes one shilling and three pence whether the exhibitor makes a profit or not.

The concession is a reasonable one and it will increase the revenue in future years. The Chancellor said in his speech that there was little between us on the figures, but he could not afford to lose a penny this year. He estimates his loss in a full year at ÂŁ2,500,000, but he says that will not apply this year and I told him then that he is going to lose ÂŁ2,500,000 this year in any case; he has probably lost it already. The only possible way to bring the number of attend- ances back so that he will get his revenue is to lower prices, and in the present small theatres you cannot afford to lower prices because their takings will not cover the cost. The longer the Chancellor of the Exchequer delays this natural development of the theatres the longer will he suffer from the rapid and heavy decline in the revenue which he is deriving from the tax. Before he is too late I make this appeal in his own interests as well as in the interests of the industry, and I assure him I am sincerely convinced I am correct. The Chancellor has not attempted to answer any one of these points. Whether my case is unanswerable or not I do not know, but the fact is I remain unanswered.

:There are two salient points to which my hon. Friend has drawn attention which I wish to emphasise. One is that under present conditions the Chancellor is losing revenue. The trade has come forward with proposals which admittedly this year would mean some little loss, but in the years to come there would be a progressive increase of revenue. No one can attempt to gainsay the arguments with reference to the need for larger cinema theatres in this country, because the public have been educated up to' a higher standard. Unless an opportunity is given for the creation of these larger places you will destroy what is a great means of amusement and education for great masses of the people, and ultimately you will destroy a very great source of revenue so far as the country is concerned. My hon. Friend paid a great compliment to those who advise the Chancellor. I am not going to detract from that compliment, but I know that the advisers of a Government Department when once they have made up their minds generally look upon themselves as something in the nature of the laws of the Medes and Persians. I want the Chancellor to get out of that groove and to accept an offer by which the Treasury will increase its revenue in years to come.

:I am grateful to my hon. Friend for reading passages from a speech in which I dealt with these particular proposals, because it will enable me to say less upon this occasion. It is admitted that these proposals would mean an immediate loss of revenue, and I am advised that they would mean a loss of revenue this year of ÂŁ1,500,000. That is a large sum for the revenue to give up in the course of a year which everybody knows is one of the most difficult which has ever confronted this country financially. We have had not only the longest coal strike ever known and the longest drought this country has ever known, which is affecting the revenue every day, but also the most severe depression in trade which this country has ever experienced.

The question is, how are we to meet expenditure if we throw away ÂŁ1,500,000 in the year? That is the problem. To tell me that in the future I shall get other revenue is all very well. I have not the slightest doubt it is a business proposition. It is possible to put something forward of that kind, but we are in the same position with regard to innumerable propositions. If this country at the present time had some ÂŁ100,000,000 for which it had no particular use, it could bring back out of the resources of other parts of the world by that expenditure such sums as nobody would ever dream of, but these opportunities are only offered to humanity in general at a time when money is not to be had for making the experiments, and what my hon. Friend opposite offers is a speculation. He says, you allow this money to remain in the pockets of those who run cinema entertainments. What they will do will be to build far more beautiful palaces in the future and lay out other ground for making even more magnificent places to attract people in the future. I agree if you accept that the cinema show is going to be the only thing in the future and nobody will go to any other place of entertainment that would give it a most rosy appearance. I hope we may find some other method by which this taxation may be levied. There is a suggestion that we may be able to do so by a tax on proceeds rather than individual seats. That may be the way out of the difficulty, I hope indeed it may, but in the meantime I have to get this

year's current expenditure, and I cannot afford to give up ÂŁ1,500,000.

:The Mover of the Clause said a good deal about figures which he had placed before the Chancellor of the Exchequer and his advisers. None of these figures are placed before the Committee, and, therefore, to enter upon these figures and to act as arbitrator between the Proposer and the Chancellor are difficulties which are considerable. As I understand the position, what the Mover desires is that the Chancellor, instead of receiving 1s. from each person who goes to these places, should be content with 6d., and instead of getting one person at 1s. he would get three persons who would each pay 6d., and instead of his losing in receipts it would mean a gain as he would get three sixpences instead of one shilling. That is what I gather from my Friend at the back. In the absence of figures one does find oneself in a difficulty, but is it a fact that he has this year sustained considerable loss in revenue as against some period last year and does that loss represent something like ÂŁ2,000,000? If it does, would not some concession like this help to restrict this fall and add something to the Exchequer? Unless it does this I do not think there is much point in the proposal we are now considering, but if the Chancellor would be content to reduce the charges now made, although the amount was smaller the number of people attending would be greater and the revenue much larger. If there is nothing in that there is no need to go into it. I have no special knowledge myself and I must take the experts' view. Therefore, I am surprised the Chancellor dismissed the subject, so ably stated by my hon. Friend, in such an abrupt manner. Either there is something in the proposition or there is not. I certainly think we ought to have some further information on this matter before we come to a decision.

Question put, "That the Clause be read a Second time."

The House divided: Ayes, 25; Noes, 98.

Division No. 264.]

AYES.

[2.0 a.m.

Barnes, Major H. (Newcastle, E.)

Kiley, James Daniel

Thorne, G, R. (Wolverhampton, E.)

Cape, Thomas

Lawson, John James

Walsh, Stephen (Lancaster, Ince)

Edwards, C. (Monmouth, Bedwellty)

Moore-Brabazon, Lieut.-Col. J. T. C.

Waterson, A E.

Glanville, Harold James

Morgan, Major D. Watts

White, Charles F. (Derby, Western)

Hall, F. (York, W. R., Normanton)

Raffan, Peter Wilson

Wood, Major M. M. (Aberdeen, C.)

Halls, Walter

Roberts, Rt. Hon. G. H. (Norwich)

Young, Robert (Lancaster, Newton)

Hayday, Arthur

Royce, William Stapleton

Hirst, G. H.

Smith, W. R. (Wellingborough)

TELLERS FOR THE AYES.—

Holmes, J. Stanley

Stanton, Charles Butt

Mr. Newbould and Mr. Seddon.

Kenworthy, Lieut.-Commander J. M.

NOES.

Agg-Gardner, Sir James Tynte

Fremantle, Lieut.-Colonel Francis E.

Parry, Lieut.-Colonel Thomas Henry

Ainsworth, Captain Charles

Gee, Captain Robert

Pease, Rt. Hon. Herbert Pike

Amery, Leopold C. M. S.

Gibbs, Colonel George Abraham

Perkins, Walter Frank

Armstrong, Henry Bruce

Gilmour, Lieut.-Colonel Sir John

Pollock, Sir Ernest Murray

Atkey, A. R.

Hall, Lieut.-Col. Sir F. (Dulwich)

Pownall, Lieut.-Colonel Assheton

Balfour, George (Hampstead)

Hamilton, Major C. G. C.

Pretyman, Rt. Hon. Ernest G.

Barlow, Sir Montague

Hannon, Patrick Joseph Henry

Raw, Lieutenant-Colonel Dr. N.

Barnston, Major Harry

Harmsworth, C. B. (Bedford, Luton)

Rees, Capt. J. Tudor- (Barnstaple) .

Bell, Lieut.-Col. w. C. H. (Devizes)

Hilder, Lieut.-Colonel Frank

Roberts, Samuel (Hereford, Hereford)

Bellairs, Commander Carlyon W.

Hood, Joseph

Roundell, Colonel R. F.

Bowyer, Captain G. W. E.

Hope, Lt.-Col. Sir J. A. (Midlothian)

Sanders, Colonel Sir Robert Arthur

Breese, Major Charles E.

Hopkins, John W. W.

Shaw, William T. (Forfar)

Broad, Thomas Tucker

Horne, Sir R. S. (Glasgow, Hillhead)

Shortt, Rt. Hon. E. (N'castle-on-T.)

Brown, T. W. (Down, North)

Hunter, General Sir A. (Lancaster)

Smith, Sir Allan M. (Croydon, South)

Bruton, Sir James

Jones, J. T. (Carmarthen, Llanelly)

Stanley, Major Hon. G. (Preston)

Buckley, Lieut.-Colonel A.

Kellaway, Rt. Hon. Fredk. George

Sugden, W. H.

Carr, W. Theodore

King, Captain Henry Douglas

Sutherland, Sir William

Casey, T. W.

Law, Alfred J. (Rochdale)

Thomson, F. C. (Aberdeen, South)

Chamberlain, Rt. Hn. J. A. (Birm., W.)

Lindsay, William Arthur

Thomson, Sir W. Mitchell- (Maryhill)

Chamberlain, N. (Birm., Ladywood)

Lloyd-Greame, Sir P.

Townshend, Sir Charles Vere Ferrers

Churchman, Sir Arthur

Locker-Lampson, Com. O. (H'tingd'n)

Tryon, Major George Clement

Coats, Sir Stuart

M'Connell, Thomas Edward

Ward, William Dudley (Southampton)

Coote, Colin Reith (Isle of Ely)

Mallalieu, Frederick William

Waring, Major Walter

Davidson, J. C.C.(Hemel Hempstead)

Mason, Robert

Wheler, Col. Granville C. H.

Du Pre, Colonel William Baring

Mond, Rt. Hon. sir Alfred Moritz

White, Col. G. D. (Southport)

Edwards, Major J. (Aberavon)

Morden, Col. W. Grant

Williams, C. (Tavistock)

Elliot, Capt. Walter E. (Lanark)

Moreing, Captain Algernon H.

Wise, Frederick

Evans, Ernest

Murchison, C. K.

Wood, Hon. Edward F. L. (Ripon)

Eyres-Monsell, Com. Bolton M.

Murray, John (Leeds, West)

Young, E. H. (Norwich)

Falcon, Captain Michael

Neal, Arthur

Young, Sir Frederick W. (Swindon)

Falle, Major Sir Bertram Godfray

Newman, Sir R. H. S. D. L. (Exeter)

Ford, Patrick Johnston

Nicholson, Reginald (Doncaster)

TELLERS FOR THE NOES.—

Foxcroft, Captain Charles Talbot

Ormsby-Gore, Hon. William

Colonel Leslie Wilson and Mr

Fraser, Major Sir Keith

Parker, James

McCurdy.

2.0 A.M.

:On a point of Order. I understood that there was an arrangement whereby we were going to adjourn at 1.30. Should I be in order in moving that the Debate be adjourned? It is now two o'clock in the morning.

:A Motion for the Adjournment was moved a short time ago. I could not accept a similar Motion at present.

NEW CLAUSE.—(Amendment of Section 1 of Finance (New Duties) Act, 1916.)

Twopence shall be substituted for one penny in section one, sub-section (5) (c), of The Finance (New Duties) Act, 1916.—[ Mr. Newbould. ]

Brought up, and read the First time.

:I beg to second the Motion.

Question put, and agreed to.

Clause read a Second time, and added to the Bill.

NEW CLAUSE.—(Deductions for mortgage interest to be allowed in case of certain companies for purposes of corporation profits tax.)

(1) Where not less than one-half of the gross income of any company is derived from b ) to sub-section (2) of section fifty-three of The Finance Act, 1920, there shall, in determining the profits of the company for the purposes of corporation profits tax, be allowed a deduction in respect of the interest on any mortgages charged on those lands or tenements, but not including interest on any debentures charged on all the assets of the company.

(2) This section shall be deemed to have had effect as from the commencement of The Finance Act, 1920.—[ Mr. Holmes. ]

Brought up, and read the First time

:I beg to move, "That the Clause be read a Second time."

I hope I shall satisfy the House by stating in a few words what is the object of the Clause, as the Chancellor of the Exchequer has been good enough to say that he will accept it. A large number of companies have invested their money in house property at various times, and have had to raise mortgages upon that property. Under the original terms of the Corporation Profits Tax they had to pay tax on their gross incomes before deducting the interest paid on their mortgages. So far as I have been able to ascertain, these companies earned a gross income of ÂŁ370,000, and paid ÂŁ142,000 in interest on mortgage. They had to pay Corporation Profits Tax on the ÂŁ370,000, although their actual profits were the net amount of ÂŁ228,000. The object of the new Clause is to ensure that they shall only pay Corporation Profits Tax on the ÂŁ228,000 they have actually earned.

:I beg to second the Motion.

Question put, and agreed to.

Clause read a Second time, and added to the Bill.

NEW CLAUSE.—(Temporary exemption from corporation profits tax of the profits derived from public utility companies.)

(1) Where a company owns a controlling interest in, and directs, or is entitled to direct, the management of any public utility company, any profits derived by that company from the public utility company at any time between the first day of January, nineteen hundred and twenty, and the thirty-first day of December, nineteen hundred and twenty-two, shall be, and shall be deemed always to have been, excluded from the profits chargeable with corporation profits tax under Part V. of The Finance Act, 1920.

(2) In this section the expression "public utility company " means such a company as is mentioned in paragraph (i) of the proviso to sub-section (2) of section fifty-two of the Finance Act, 1920.—[ Mr. G. Balfour. ]

Brought up, and read the First time.

:I beg to move, "That the Clause be read a Second time."

This Clause is put down in consequence of an undertaking given by the Financial Secretary in Committee, and as he has been disposed to accept it, I will say no more.

Question put, and agreed to.

Clause read a Second time, and added to the Bill.

NEW CLAUSE.—(Amendment of law as to redemption of land tax.)

(1) The capital sum to be paid under section thirty-two of The Finance Act, 1896, by the owner of any land to the Commissioners of Inland Revenue for the purpose of the redemption of land tax charged on that land shall be a sum equal to twenty-five times, instead of thirty times, the sum assessed on that land, and the rate per annum of the interest to be paid under the said section on unpaid instalments of the capital sum shall be four per cent. Instead of three per cent.:

(2) In sub-section (3) of the said section the words "one twenty-fifth part of such Mr. Pretyman. ]

Brought up, and read the First time.

:I beg to move, "That the Clause be read a Second time."

This matter was debated in Committee and I do not think it necessary to debate it again as I understand that the Chancellor of the Exchequer will accept it.

Question put, and agreed to.

Clause read a Second time, and added to the Bill.

:I beg to move, "That this House do now adjourn."

Before proceeding to move the new Clause which stands in my name, I respectfully suggest that we now adjourn. We regard this as a very serious Motion, as a matter of vital interest to the whole country.

:I said just now that the House decided only a short time ago to go on. Therefore I could not accept that motion.

:May I respectfully remind you, Sir, that we are supposed to be down here at 11 o'clock this morning, and it is impossible for us to carry on the work of the House just now and then be here for Committees in the morning? The whole thing is a scandal, and I protest against it.

:That is just what we discussed a short time ago.

NEW CLAUSE (Reduced customs duties on Sugar)

In lieu of the present Customs duties, drawbacks, and allowance in respect of sugar, molasses, glucose, and saccharine there shall, as from the first day of September, nineteen hundred and twenty-one, be charged, levied, and paid the duties specified in the first column of Part II. of the First Schedule of this Act, and there shall be paid and allowed the drawbacks and allowance set out in Part II. of that schedule.—[ Sir W. Barton. ]

Brought up, and read the First time.

:I beg to move, "That the Clause be read a Second time."

Before moving this Motion I do repeat my protest. I have travelled a long way to get here, and this morning I must be on a Committee at 11 o'clock and again at 2 o'clock. Hon. and right hon. Gentlemen opposite come here in relays from the rooms where they are resting, and in the interests of public business I protest against this outrage. We will now go on—(laughter). Oh, yes, and I hope that hon. Members on this side will see that duty is done. Year after year while I have been a Member of the House we have had motions to repeal the tea duty. If a man was a supporter of the Government he voted against the motion, and if he was a member of the Opposition he voted in favour of it. But this Motion about sugar is not of that kind, and at the present time it is a Motion of the most serious importance. Of late years we have definitely connected the cost of living with wages, and I do not think it is realised how much the cost of living has been affected by taxation. There have been great reductions in wages, reductions which, I think, have been necessary in view of the general economic condition. We have argued that it might reasonably be hoped there would be a fall in the cost of living. Here I should like to ask that we might at least have the attention of the Chancellor of the Exchequer. We come to the House representing our constituencies; and as a rule many Members of the Government do not come here at all unless there is special business affecting their department. In addition to that, I protest seriously that it has become the habit of Members of this Government to indulge in conversation when Members are speaking in the interests of their constituents.

:I trust the hon. Gentleman is not referring to any supposed discourtesy on my part. I have heard all the pearls of wisdom that have fallen from him.

:That form of cynicism may seem clever, but it does not appeal to me in the slightest. I have been in this House long enough to realise that a manner has developed in this Parliament hitherto unknown in the Parliaments I have been in, and I take this opportunity of protesting. I do realise that anybody who in the present circumstances moves a vote for the reduction of taxation does undertake a very great responsibility. I realise that responsibility, and I make no appeal to what I would like to believe is the kind heart of the Chancellor of the Exchequer. I hope the Chancellor has a heart of stone, and I hope he prays every night that it may be turned into a heart of flint, and there is a good deal of evidence that if he does so that prayer is being answered; but my appeal is to the Chancellor qua Chancellor. If you are to maintain the right balance between one class of the community and another you cannot maintain continuously the high taxation which at present exists on our food supplies. Before' the War the tax on sugar was 1s. 10d. per cwt. It is now 25s. 8d., 14 times as much. He keeps telling the public that the cost of living is shown by the Board of Trade returns is 100 something. Here you have a case where by taxation you have increased the tax on sugar to more than double the price of the sugar before the War. It is almost cynical in face of this to say to the working-class population: "We justify reductions in wages, and we desire to point out to you that the cost of living is falling. Our only hope is that the cost of living will fall. I am one of those who take a very serious view of the economic conditions of the country. I believe our only hope is in a series of bountiful world harvests, not only from our land but from our factories. I believe that can only be obtained by continuous thrift, sobriety—

:This does not seem very appropriate to the new Clause before the House. Will the hon. Member please confine himself to the Clause which, I understand, he is about to move?

:The Clause I understand that I am moving is— [ Laughter. ] This is an exceedingly serious subject, and if hon. Members believe that the cost of living is something to be laughed at, I do not agree with them in the slightest. The rate of taxation you are maintaining is something which is totally inconsistent with your profession that the cost of living should be reduced. You have a mechanical element which can only be removed by your will as a Government. To maintain that in your taxation is totally insincere, while, at the same time, you are professing you desire that the cost of living should be reduced.

I have had some figures given me showing the actual effect in the constituency which I happen to represent of the taxation on sugar. It has not been possible for me to get the figures of all the traders in the constituency, but the Co-operative Society there, which is a very large organisation, have given me these figures. In 1914 there was a total consumption of sugar of 43,933 cwts., the amount in value was over ÂŁ46,000 and the taxation ÂŁ4,030. In 1920 by reason of control the consumption had fallen to less than half, 20,900 cwts., the value to over double, ÂŁ96,401, and the taxation on the half quantity had risen from ÂŁ4,030 to ÂŁ26,842. The effect of all these circumstances marks this as a tax which is totally inappropriate to the condition in which we find ourselves. We profess that we are desirous that the common people of the country, shall I say the working people of the country, shall have all the commodities which nature can bring them, harvests, greater productivity, reduction in freights. All these things, we contend, should help them in their conflict with lower wages, yet at the same time you maintain this mechanical effect of high taxation which is totally unjustified.

:I beg to second the Motion. I do not want to make any complaint about the late hour, but as the Government has got into such a muddle I suppose they have to get through somehow. Speaking for myself, I feel quite fresh, and I am prepared to continue. If hon. Members will turn to the Order Paper, they will see a Schedule with which they will be able to compare what we propose by this Amendment for the present duties. I may say for the sake of brevity that we suggest cutting the present Sugar Duty in half. As an example, if hon. Members will take the Excise Duty for sugar of a polarisation of 95 and not exceeding 96, we propose to charge an Excise Duty of 10s. 2d. We maintain this is very reasonable, and for these reasons. In the first place, sugar is absolutely necessary for children. They must have it to thrive upon. That is a medical fact in which the hon. Member for the Western Isles, were he here, would bear me out.

:I am sure the hon. and gallant Member does not want to mislead the House. In the absence of the hon. Member for the Western Isles (Mr. Murray), I think he is going some way to mislead when he says sugar is absolutely essential for children. He is a father and I am not, but I am sure that his children would get on just as well without sugar.

:When doctors disagree who shall decide. I do not wish to make any comparisons, but if I consulted my hon. Friend for the Western Isles I am sure he would bear me out. I am aware that sugar is very essential for children. Perhaps I overstated the case I put forward, but at any rate sugar is necessary for children, and, as my hon. and gallant Friend reminds me, I am a father myself. The second reason is that sugar in some form or another is very necessary to men who give up alcohol—men who have been used to it in large quantities. That is a well-known fact. In the United States of America the bringing in of prohibition has made the consumption of sweet-stuffs, candies, and chocolates go up enormously. They must take in sugar in some form into their bodies, and therefore they need sugar. Thirdly, we have a very important and valuable export trade in articles of food in which sugar is used, and I have been trying to ascertain whether any rebate is allowed. So far I have not been able to find out. Perhaps the Chancellor of the Exchequer, when he comes to reply, will inform us on this point. In my own constituency we have a very important factory for making chocolates and sweets. It is one of the few factories there that is employing all its people full time at good wages. Besides a home market they have a considerable export trade in their famous chocolates and sweets, and they go all over the world. In addition to that trade the English biscuit-makers practically have the monopoly of the biscuit trade of the world. It is a most valuable industry giving great employment and bringing a great deal of wealth to this country. In all these things sugar plays a predominant part, and anything that put up the price now through taxation and customs on sugar must affect our export trade. In these days we hear ad nauseum of the difficulties with which the British exporters are faced in all the markets of the world, and, unless I am mistaken, this halving the customs and excise duties would assist British manufacturers. In other words we would cheapen his raw materials. These are the three principal reasons why I think this Amendment should be accepted. In any case sugar is a necessity for the people and anything that reduces its price helps to reduce the cost of living. Therefore, what we may lose in duty we will gain in other directions.

:It is now about two hours since au attempt was made to secure the adjournment, and during that interval very considerable progress has been made. Might I suggest, therefore, to the Government that when the division has been taken on the present Clause the debate should be adjourned.

:It is quite evident that if we are going to debate this matter the Debate will be a long one because it is a matter that so vitally affects the great masses of the people. I would submit, therefore, that the Debate should be adjourned now and I would ask if you will accept a Motion for the adjourment of the Debate?

:I do not know that I ought to accept a Motion of that sort, after the decision in the negative a little while ago. I could not countenance a Motion for the Adjournment used for obstructive purpose. Meantime, we will hear what the Chancellor of the Exchequer has to say.

:I am ready to agree to what I understand to be the condition suggested, that we should get rid of the Report stage to-morrow evening by 11.30 p.m. and close this evening's work as soon as we take the Division upon the present Clause. If that be the proposal, I am very willing to agree to it.

:I only made my suggestion in the hope that there might be general agreement. As some of my friends do not wish to agree, I do not wish to press it.

:I fear, if that be the situation, we shall be compelled to go on. I should have been very ready to assent to the proposal which I understood was being made from the Front Bench opposite.

:We started on page 1507 and we have reached page 1520, and there are only six more pages to go. This question of sugar is really very important and it ought not to be settled in the small hours of the morning. It ought to have some run to-morrow. With regard to the question of coming to an end to-morrow night, the Chancellor of the Exchequer must realise that there has been no real obstruction. He must realise also that it is not possible to make any sort of bargain, but in view of the progress made to-night he will see that there will be no real difficulty tomorrow if he adjourns now.

:My hon. Friend puts me in a very embarrassing position. As a rule it is possible to arrange to abide by an honourable undertaking. If I have an undertaking that we shall be able to get the Report stage by 11.30 p.m. tomorrow I am perfectly willing to fall in with the suggestion made. In the absence of any sort of arrangement of that kind it is obvious that I would only be jeopardising the Report stage of the Bill, or doing something which would be very inconvenient to the House at large— having another late sitting to-morrow. If I can be assured that we are going to have our Report stage to-morrow by 11.30, or before midnight, I am perfectly willing to come to an arrangement

:The Chancellor of the Exchequer will understand the position in which many of us find ourselves. Many of us have been in a Committee this morning. We have sat in Committee since eleven o'clock this morning, and we have been in the House since. I think the Chancellor of the Exchequer will agree, as has been suggested, that we have made exceedingly good progress with this Bill to-day. He cannot complain that there has been any obstruction. Now the suggestion is that we should adjourn in the midst of the discussion of a question that is of great im- portance. The right hon. Gentleman will recognise that it is difficult for us to give a definite pledge, but he has bad sufficient evidence that we have had no desire to obstruct. He ought to let it rest at that without asking us to say definitely that he will have his Bill by half-past eleven or by midnight to-morrow.

:In view of what has been said, may I move "That the debate be now adjourned."

:I can only entertain a Motion of that kind if I think there is a possibility of arrangement. From what I gather, there is such a chance, and I accept the Motion.

:I was moved by the appeal that has been made, and I would not propose that we should vote on this motion. I am perfectly prepared to abandon the idea of taking a vote on this Clause to-night, provided we can be assured of getting rid of the Report Stage before midnight to-morrow. I know it is difficult to get any binding assurance under such circumstances, but I think I can take the assurance which has been given, for I know that such Members as are present will honour it and that we can rely upon all who are here to do their utmost to make the situation plain to the other Members of the House when they meet to-morrow, and indicate that they would like to see the assurance observed.

:I want to make my position quite clear. I was perfectly willing that we should rise at 1.30, but I see no reason why I should surrender any of my rights to discuss this matter in any way to-morrow. If the Government had agreed to the perfectly reasonable proposition made it would have been far better.

:I trust the hon. Gentleman will be dealt with by those among whom he sits.

:I have no wish that this Debate should be continued late tomorrow night, but I think we have no right and no power to give such an assurance. What the Government ask is that we should give an assurance that no matter what turns up here to-morrow night, we are to give up our right to discuss matters which may be of vital importance to the country. It is a pledge the right hon. Gentleman has no right to ask and we have no right to give.

:The people who have remained here tonight have, I think, the right to make the arrangement. It is not the people who are not here. I ask the hon. Member for Whitechapel (Mr. Kiley) and Central Aberdeen (Major M. Wood), if they think that the Amendments that follow will really keep us after midnight. Furthermore, there is an important Amendment which is to be taken now when discussion is really physically impossible for the majority of Members. If the Chancellor of the Exchequer is met in this matter we will start to-morrow. I really think we have done very well, and I think we can take the responsibility on this occasion, and make a bargain.

Question, "That the Debate be now adjourned," put, and agreed to.

Debate to be resumed 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 Thirteen minutes before Three o'clock a.m.