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Commons Chamber

Volume 196: debated on Monday 14 June 1926

House of Commons

Monday, June 14, 1926

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

Private Business

Guildford Corporation Bill,

London County Council (Money) Bill,

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

Abertillery and District Water Board Bill [ Lords ],

Colwyn Bay and Colwyn Urban District Council Bill [ Lords ],

Connah's Quay Urban District Council Water Bill [ Lords ],

Kidderminster and Stourport Tramways Bill [ Lords ],

Margate Corporation Bill [ Lords ],

Reading University Bill [ Lords ],

Worcester Corporation Bill [ Lords ],

Read a Second time, and committed.

Southern Railway Bill (by Order),

Third Reading deferred till Thursday next, at a quarter-past Eight of the clock.

Standing Orders

Motion made, and Question proposed,

"That so much of Standing Order 91 as fixes Five as the quorum of the Select Committee on Standing Orders be read and suspended."—[ Major-General Sir Newton Moore. ]

May I, Mr. Speaker, draw your attention to the fact that it is not Standing Order 91 that we are dealing with here? Standing Order 91 deals with letters. This is paragraph 91 of the Manual of Procedure, dealing with the quorum in the Standing Committee. Consequently, we are not altering Standing Order 91 at all.

This is Standing Order 91 of the Private Business Standing Orders.

Question put, and agreed to.

Ordered,

"That so much of Standing Order 91 as fixes Five as the quorum of the Select Committee on Standing Orders be read and suspended."

Ordered,

"That for the remainder of the Session Three be the Quorum of the Committee."—[ Major-General Sir Newton Moore. ]

Oral Answers to Questions

India

Army Canteen Board

asked the Under-Secretary of State for India whether it is proposed to publish the evidence which was given at the official inquiry into the Army Canteen Board (India); when the Government proposes to announce its decision as to the future of this board; and whether this organisation is still carrying on its operations and incurring further liabilities?

So far as I am aware, there is no formal evidence to be published. The Government of India are being advised in their inquiries by experts who have been kindly lent by the authorities of the Navy, Army and Air Force Institutes, and it is hoped that a decision as to the future will be reached before the end of the year. In the meantime the board is continuing to operate under strict financial control and with the assistance of the experts mentioned.

asked the Under-Secretary of State for India the nature of the charges brought against the seven European members of the Army Canteen Board (India); and how many prosecutions have been brought against any European members of the staff of the board since the inception of the under taking in 1921?

Except in the case of Mr. Pleydell, the late controller, who was convicted for an assault resulting in the death of an Indian coolie, my only information as regards Europeans is that contained in paragraph 10 of the Report. I have certain details regarding the con- viction of three employés of the board, but it is not shown whether they are Europeans. I will give my hon. and gallant Friend these details if he desires.

asked the Under-Secretary of State for India whether the losses which are being sustained by the trading of the Army Canteen Board of India will affect the rebates granted to units in India; and, if so, to what degree?

The rebate has not been dependent on profits, and so far as I am aware units have not suffered in this respect.

Factory Inspection

asked the Under-Secretary of State for India whether the Government of India has received any representations from provincial legislative councils as to the need that is alleged to exist for the appointment of special women factory inspectors; and, if so, whether the Government proposes to take any steps to induce local Governments to make such appointments?

The Government of India have directed the attention of the Provincial Governments to the recommendation of the International Labour Conference of October, 1923, favouring the appointment of women for certain classes of factory inspection work, and have expressed the hope that in the larger Provinces it will shortly prove possible to make an advance in this direction. No report has yet been received of the action, if any, which has been taken by Provincial Governments.

asked the Under-Secretary of State for India whether, in view of the growing industrialisation of India and the urgent need that exists for an efficient system of factory inspection under the control of the legislative councils, it is the intention of the Government of India to bring the subject of labour under a Minister's control on the transferred side of provincial administration?

No, Sir. The subjects to be transferred were settled in 1920 after most careful inquiries by many authorities, including a Joint Select Committee of Parliament, who recommended that no material change should be made before the Statutory Commission had inquired and reported. It is true that the recent Reforms Inquiry Committee considered the desirability of making some slight readjustments between the lists of transferred and reserved subjects, but this was not one of the subjects they considered from that point of view. I cannot admit that the system of factory inspection is lees efficient as a reserved subject than it would be if it were transferred.

Agricultural Courses (Indian Students)

asked the Under-Secretary of State for India what proportion of applicants was selected during the past year for the postgraduate courses in agriculture at Pusa and the special course in animal husbandry at Bangalore; and whether the Government of India proposes to amend the rules for the selection of such candidates, so as to make provision for the training of a larger number of Indian students than is the case at present?

The figures for 1925 have not yet been received. In 1924 there were 32 candidates for the postgraduate courses at Pusa. Six were selected, of whom one did not join and two left early in the year. It is not known how many applications there were for the 15-month course at Bangalore in animal husbandry and dairying which began in January, 1924, but it was completed by five students. There were 21 applications for admission during the second session, and of these two were selected. I have no information regarding the second part of the question, but inquiry will be made of the Government of India.

Steel and Agriculture (Government Assistance)

asked the Under-Secretary of State for India whether he will inform the House of the amount of the subsidy paid by the Government of India to the steel industry under the Steel Industry (Protection) Act during the last financial year and of the amount expended by the Government on agricultural development during the same period?

The accounts showing the exact amount paid in bounties to the steel industry during the last financial year have not yet been received, but the amount for the preceding year was sixty lakhs, and the latest estimate received for 1925–26 is 85 lakhs. The Government of India spent, during 1924–25, 30 lakhs on agricultural development. This is, however, only a fraction of the total Government expenditure in India on agricultural development, as the greater part of such expenditure is charged to Provincial Governments. The Government of Madras, for example, spent during 1924–25 about 16 lakhs.

State of Khaiepur (Administration)

asked the Under-secretary of State for India whether his attention has been drawn to the financial condition of affairs in the State of Khairpur; whether he is aware that the Government of India has sent or loaned Mr. Mahomed, of Bombay, as vazir; that Mr. Mahomed's daffadar has been arrested by the orders of the Mir of Khairpur; that the salaries of the State servants have not been paid for months past; and what steps, if any, it is proposed to take to improve the administration of public affairs in Khairpur?

I have seen reports which indicate that financial and other conditions in Khairpur are a matter for serious concern. I cannot at present say more than that the whole matter is being very carefully considered by the Government of Bombay and the Government of India.

Calcutta Corporation (Mr. F. C. Bose)

asked the Under-secretary of State for India whether he has recently had his attention drawn to any evidence which would justify him in concluding that Mr. F. C. Bose, chief executive officer of the Calcutta Corporation, should be released from confinement in Mandalay gaol as a détenu under the Bengal ordinance; and what decision he has reached in the matter?

No evidence regarding this détenu has been recently seen by my Noble Friend.

Is the Noble Lord aware that on two recent occasions in the Law Courts in Calcutta this détenu has. received large sums by way of damages from newspapers which repeated the allegations on which, presumably, he is detained?

In my private capacity I have seen reports of the trials in question. The hon. Gentleman must not assume, however, that the accusations made in the newspapers were necessarily the same as the charges, which were brought against this gentleman, on which, after they had been considered by the Government appropriate action was taken.

Is the Noble L rd aware that the charges to which he has just referred have never yet been made against this man, and that he is unaware of any charges against him?

No public charges were made against him, because, as the hon. Gentleman is aware, that is not necessary. It would not be possible, in the time which a Minister is presumed to occupy in answering a question, to explain the whole system. Charges have not been made publicly in any Court of law because this gentleman was proceeded against by other methods.

Will the Noble Lord say whether the Government of India have any documentary evidence against Mr. Bose?

I am not prepared to give any more answers on this matter than those I have already given—that, in the opinion of the Government of Bengal in the first instance, of the Government of India in the second, and of my Noble Friend, this gentleman was guilty of the charges brought against him.

Medical Service

asked the Under-Secretary of State for India whether any decision has yet been reached as to the future of the Indian Medical Service; and, if so, if he can give any details as to that decision?

I regret that I cannot at the moment add anything to the reply I gave to the hon. Member for Gower (Mr. D. Grenfell) on the 23rd November last, of which I will send my hon. Friend a copy. My Noble Friend hopes to receive the Government of India's final proposals very shortly.

Legislatures (Representatives)

(for Mr. LANSBURY) asked the Under-Secretary of State for India whether the Government of India propose to act on the recommendations of the Reforms Inquiry Committee as to an increase in the number of representatives in the Indian Legislatures; and, if so, whether action will be taken in the matter before the forthcoming elections?

The Government of India's proposals on this matter are now under my Noble Friend's consideration, and he has not yet arrived at his decision. But I think it probable that some additional seats will be created in the provincial councils before the next election for representatives of Labour and the Depressed Classes, as the Committee recommended.

Kenya

Indentured Labour

12, 13 and 14.

asked the Secretary of State for the Colonies (1) if he can state the procedure which is followed in Portuguese East Africa in the securing of indentured native labour for work in Kenya Colony;

(2) whether any steps are to be taken to ensure that the indentured labour from Portuguese East Africa, to be imported into Kenya Colony under the new Regulations, shall not be pressed or forced in any way; and whether any official protection will be provided for such labour;

(3) what steps have been taken to provide for the moral and material well-being of the indentured labourers whose importation into Kenya Colony has been recently sanctioned by the Colonial Office?

I will deal with these three questions together. No sanction has been given for the importation of indentured labourers into Kenya, and I would refer the hon. Member to the reply given to his previous question on the 8th June.

Stock Thefts

asked the Secretary of State for the Colonies whether his attention has been called to the increas- ing number of cases of cattle stealing by natives from white settlers in Kenya Colony; whether he can give the figures for conviction for the years 1922, 1923, 1924, and 1925, respectively; whether he is aware that only a fraction of the fines imposed are collected and that, in some cases, settlers have had to give up sheep breeding in consequence of the frequency of thefts; and whether he proposes to take any steps to improve the administration of justice in the Colony in this respect?

The information in my possession does not enable me to answer the hon. Member's question in detail, but I understand from a report in the local Press of a debate in the Legislative Council of Kenya on the 16th March that the prevalence of stock thefts has been inquired into by a committee whose report is under consideration by the Colonial Government, and that an amendment of the law is contemplated.

Land Grants

asked the Secretary of State for the Colonies whether he will state on what grounds the case of Lord Delamere has been selected for special investigation from amongst the numerous cases in which accusations of obtaining grants of land by applying in the names of other persons have been brought against residents in Kenya Colony; and why Government resources have been used to enable him to meet the accusations made against him?

The charge of "dummying" alleged against Lord Delamere in the local Press was quoted, not only in the book "Kenya," but also in another place by a Noble Lord, who said:

"We want to know what has been the action of the Colonial Government itself in the matter."

The reason why the Command Paper was confined to the charge against Lord Delamere has already been given in my reply to the hon. Member for Newcastle-under-Lyme (Colonel Wegdwood) on 20th May.

Could the right hon. Gentleman answer the last part of the question, as to why the resources of the Government were used to enable Lord Delamere to meet these accusations?

That is not the case, Lord Delamere is entirely free to meet any charges, but he is concerned here with rebutting charges made against himself and the Government.

Questions

Jamaica (Administration)

asked the Secretary of State for the Colonies if he can state whether the complaints received from residents of Jamaica as to their grievances connected with the labour, police, legal, medical, and postal administration of that island have been now duly considered; and if he will state what steps have been taken or proposals made for remedying them?

I have no knowledge that any such complaints have been received for some time past, but, if they have, I have no doubt that the Governor is inquiring into them.

East Africa Loan Bill

asked the Secretary of State for the Colonies if he is able to state when the East Africa Loan Bill will be submitted to the House?

asked the Secretary of State for the Colonies when it is proposed to introduce the East Africa Loan Bill?

I will answer these questions together. I hope that it will be possible to arrange for the introduction of the Bill shortly.

asked the Secretary of State for the Colonies when the East Africa Loan Bill will be discussed, and if he will provide a large scale map in the Tea Room showing the projected lines of railway before the discussion takes place?

I hope that it will be possible to arrange for the introduction of the Bill at an early date. It is not yet decided what projected railway lines are to be included in the Schedule of the Bill, but as soon as the information is available I shall hope to arrange for a map to be furnished, as desired by the hon. Member.

China

Anti-British Boycott

asked the Secretary of State for the Colonies whether he can report any progress in the negotiations with the Chinese authorities concerned for the removal of the boycott on the trade of Hong Kong?

I am not yet able to add anything to the reply returned to the hon. Member for South-East Essex on the 10th June.

Can the right hon. Gentleman say in whose hands are the negotiations on our side?

British Trade

asked the Parliamentary Secretary to the Overseas Trade Department if he can furnish comparative statistics showing the effect of the disturbances in China on British trade with that country?

As the answer involves a number of figures, it will, with my hon. Friend's permission, be circulated in the OFFICIAL REPORT.

Can my hon. Friend give us any rough idea as to what has been the effect?

Yes. I am pleased to tell my hon. Friend that the exports of United Kingdom produce to China and Hong Kong for the first quarter of 1926 are better than they were in 1923 and better than in 1925, but not quite so good as in 1924. Cotton has done badly, but better than in 1923.

Following is the answer promised:

The following figures show the general trend of our exports to China and Hong Kong in recent years.

1. Declared values of the total exports of the produce and manufactures of the United Kingdom registered as consigned to China and Hong Kong during each of the periods specified.

1923.

1924.

1925.

1926.

Million £'s.

1st Quarter

5·4

7·4

6·5

6·6

2nd Quarter

5·2

7·2

4·6

3rd Quarter

7·6

9·2

4·5

4th Quarter

7·1

5·1

4·1

Annual Totals

25·3

28·9

19·7

Of which Cotton Piece Goods.

10·0

12·6

7·5

2·6 (1st Quarter)

2. Total quantities of cotton piece goods of all kinds manufactured in the United Kingdom registered as consigned to China and Hong Kong during each of the periods specified.

1923.

1924.

1925.

1926.

Million Square Yards.

1st Quarter

49·4

82·7

71·9

62·4

2nd Quarter

46·2

79·1

42·6

3rd Quarter

67·2

77·3

27·9

4th Quarter

72·5

53·5

31·0

Annual Totals

235·3

292·6

173·4

NOTE.—From 1st April, 1923, the above particulars exclude the direct exports, if any, from the Irish Free State to China and Hong Kong.

Salt Revenue

asked the Secretary of State for Foreign Affairs whether, in view of the state of afiairs existing in China of the increasing disregard of international obligations, as evidenced by the breach of the loan agreement relating to the revenue of the salt gabelle, and of the fact that there is not now any central Government existing or any immediate prospect of a central Government whose authority will be universally recognised, he will approach the great Powers who were signatories to the Washington Treaty to secure an exchange of views as to the policy it is now desirable to pursue?

The serious state of affairs in China, and the breaches of international obligations to which the hon. Member refers, have engaged the anxious attention of His Majesty's Government for some time past. The difficulties are greatly increased by the fact that, as there is no central Government, it is not possible to deal with these matters through the ordinary channels. His Majesty's Government have taken full account of these difficulties in the instructions sent to His Majesty's Minister at Peking, who is in close touch with the delegates of the other Powers attending the Tariff Conference, and is also acting in co-operation with the representatives of the Powers more nearly affected by the attack on the salt administration at Tientsin. For the present His Majesty's Government are of opinion that no useful purpose would be served by any more formal consultation with the Powers who were signatories to the Washington Treaty.

asked the Secretary of State for Foreign Affairs the amount of reserve funds in the banks to meet the service of loans guaranteed on the salt gabelle in China; and whether these reserves have been drawn on hitherto?

I understand that these reserve funds, which amounted in 1925 to some 7,000,000 dollars, have not so far been seriously drawn upon, but I am still awaiting more precise details from Peking.

My hon. Friend is quite entitled to ask what is a most reasonable question, but I am ashamed to confess that, without reference, I cannot answer it.

Trade and Commerce

Empire Produce (Marking)

asked the Secretary of State for Dominion Affairs if the question of marking goods as Empire produce or of Dominion origin will be discussed at the forthcoming Imperial Economic Conference?

The policy of His Majesty's Government in this matter is embodied in the Merchandise Marks (Imported Goods) Bill, which was read a Second time in this House on 12th May last. Communications on the subject of this Bill have passed between His Majesty's Government and the Governments of the Dominions, and it will, of course, be open to any of the Governments concerned to bring the matter up for discussion at the forthcoming Imperial Conference, if they so desire.

Trade Barriers (Removal)

asked the President of the Board of Trade whether his attention has been drawn to the setting up by the International Chamber of Commerce of a Committee on Trade Barriers, whose object will be to facilitate the removal or diminution of the obstacles to trade in Europe; and whether he will instruct the British representative on the preparatory Commission of the International Economic Conference to take all possible steps to carry out the policy which is thus supported by the representatives of British and of world commerce?

My attention has not been specially called to the appointment by the International Chamber of Commerce of a Committee on Trade Barriers, but I am, of course, aware of their general views on this subject. The task of the preparatory Committee of the International Economic Conference is to draw up a programme, not to recommend or carry out a policy. Its Members are not representatives of Governments, but persons selected for their expert knowledge. There can therefore be no question of my giving instructions to the British members on the Committee.

Does the general policy of the Government favour the abolition of trade barriers?

Who are the selected persons acting on behalf of Great Britain?

I cannot say now, but they are experts, and I understand they are selected subject to the League of Nations.

Did the Government have regard to M. Loucheur's statement last year that working-class representation should be obtained?

We are well aware of all the representations which have been made by M. Loucheur and others.

Iron and Steel Industry

asked the Prime Minister whether, having regard to the association between the iron and steel trade and the coal trade, and the bearing that an improvement in the iron and steel trade would have on the production of coal in this country, he will again consider, in arriving at any legislation for the coal trade, the question of safeguarding the iron and steel trade?

I would refer my hon. Friend to the answer which I gave on the 17th March, in reply to a question by my hon. Friend the Member for Macclesfield.

Agriculture

Beet Sugar Factory, Kelham

asked the Minister of Agriculture whether he is prepared to state what is debited against the profit-and-loss account of the Kelham beet-sugar factory before the trading profits are determined; and what is the proportion of the trading profits due to the corporation?

As was stated in reply to the hon. Member for Hillsborough on 23rd November last, the British Sugar (Subsidy) Act does not provide for the laying before Parliament of the particulars of the statement of profit and loss of the beet-sugar companies or of any of their financial statements other than the balance sheets. My hon. Friend will, therefore, understand that I cannot give him the information asked for.

Foot-And-Mouth Disease

asked the Minister of Agriculture how the initial outbreak of foot-and-mouth disease at Carluke was traced to imported pig carcases?

In connection with the confirmation of foot-and-mouth disease in the original outbreak on the sewage fields near Carluke, the Ministry's superintending veterinary inspector was instructed to visit any premises in the area connected with the sewage system from which infection might have been conveyed. Among other places he visited the Carluke Bacon Factory, and in the course of his examination of pig carcases newly arrived from Rotterdam, discovered definite lesions of foot-and-mouth disease in some of the carcases. Subsequent examination of other portions of the cargo which had been distributed to other bacon factories revealed further infected carcases.

May I ask whether the Dutch inspectors who disputed the tracing of the source still dispute the fact that the disease was traced to these carcases?

I do not think they disputed that the disease was traced to these carcases at Carluke. I think the right hon. Gentleman probably refers to their statement that these were Belgian carcases and not Dutch. I have no reason to doubt that. The infected Dutch carcases were sent to Carlisle, and came from quite a different ship.

Can the right hon. Gentleman say whether Ayrshire bacon is made from foreign pigs?

Can the Minister tell the House why these carcases were allowed to come in at the ports?

My hon. Friend is no doubt aware that the responsibility for the inspectors of meat imports is with the Inspectors of the Public Health Authority, and it is not, difficult to understand that an inspector with no veterinary knowledge might overlook a disease like foot-and-mouth disease.

Is it not advisable that the inspectors at the ports should have this necessary knowledge?

asked the Minister of Agriculure if he is aware that the Ministry of Agriculture are stopping the landing of all bristles arriving from the Continent; and whether he can inform the House that all brushes containing these bristles have been prohibited from being landed also?

I am advised that the risk of the introduction of foot-and-mouth disease by imported bristles is very small, and on Saturday I arranged, after consultation with the trade, for the issue of licences to individual importers for the importation of bristles, subject to certain conditions which the trade have undertaken to observe, to prevent the introduction of disease. I do not propose therefore to prohibit the landing of brushes.

French Cherries (Impost Restrictions)

asked the Minister of Agriculture whether he has any further information with regard to importations of cherries containing the maggot of the cherry fruit fly?

As I stated in reply to my hon. and gallant Friend the Member for Faversham, on Friday last, 11th instant, I have issued an Order prohibiting the import of French cherries unless accompanied by an official certificate that they have been grown in a, district free from cherry fruit fly. In response to representations which I have received, I have postponed the operation of the Order until midnight to-morrow in order that those concerned in the trade may have due notice of the prohibition.

Has everything been done to push the sale of homegrown cherries?

Home-grown cherries are not yet on the market. I hope that at the period when they do appear on the market the public disgust at maggoty cherries will have ceased and also the French imports.

( by Private Notice ) asked the Minister of Agriculture if he is aware that the short notice of prohibition of importation of fresh cherries from France has considerably inconvenienced importers in Hull, who have not had time to inform packers and prevent shipments already arranged for, and whether he will consider postponing the prohibition until the 22nd June on the understanding that any affected cherries will be destroyed on landing?

In order to meet as far as possible the inconvenience to which the hon. and gallant Member refers, I postponed the operation of the Order until midnight to-morrow. I regret I cannot entertain his suggestion for a further postponement, nor can I entertain his suggestion as to the examination of consignments and the destruction of those found to be infected, since it would not be practicable to detain arrivals of cherries at the port for a sufficient time to enable each lot to be sampled and tested.

Could not this matter be left to the importers, who are as interested as he in seeing that no infected cherries come inland? Cannot they be trusted?

These importers have proved unable to deal with this matter in the past. I am doing all I can to avoid inconvenience, and I have given instructions that the discretion allowed in Article 3 of the Order will be used to allow the importation of cherries which are shown to be free from maggots, and despatched not later than to-day.

Is not this another case in which the Liberal party are advocating the Merchandise Marks Act?

Index Prices

asked the Minister of Agriculture whether he can give a figure showing the increase in the prices paid by the consumer during the first three months of 1926, as compared with the corresponding months of 1911–13, in respect of the commodities covered by the agricultural index number published by the Ministry of Agriculture?

I regret that I am not in a position to furnish this information. The prices collected by the Ministry are wholesale or producers' prices.

Russia

Confiscated British Property (Sale)

asked the Secretary of State for Foreign Affairs whether legislation will be introduced at an early date to prevent the sale in Great Britain by the Russian Soviet Government of confiscated British property; and whether he has recently been urged by the London Chamber of Commerce to introduce legislation on the lines indicated as soon as possible?

As at present advised, His. Majesty's Government do not propose to introduce such legislation. The answer to the second part of the question is in the affirmative.

Is my right hon. Friend aware that Lenin, the late head, of the Soviet Government, had boasted that not only was he out to destroy capitalism in this country and elsewhere, but to make the capitalists pay for their own destruction; and does he think it desirable that the British Government should assist them in the fulfilment of that boast?

Is the right hon. Gentleman aware that Lenin has been dead for a very considerable time?

In reply to my hon. Friend's question, I fear that I do not appreciate its bearing on the question which he put or on my answer.

Does the Foreign Secretary not realise that people owning capital in this country have not only had that capital taken from them, but it has actually been sold in this country with the aid of the British market; and does he think it desirable that the Foreign Office, which represents the foreign interests of British citizens, should take steps to prevent the British market being used for the sale of stolen British goods?

If I thought, or the Government thought, that the remedy proposed by my hon. Friend was an effective remedy to secure redress for injured British citizens, we should not hesitate to employ it, but we do not think that it would serve the interests of injured British citizens, and it raises some awkward questions of international law.

Does the right hon. Gentleman subscribe to the doctrine that the Foreign Office exists solely to represent the foreign possessions of British subjects?

Will the right hon. Gentleman state what his policy is in this matter?

Soviet Officials (Diplomatic Privileges)

asked the Secretary of State for Foreign Affairs if Russian trade union leaders are or have been accorded diplomatic privileges to this country as Russian government officials?

His Majesty's Government have no reason to suppose that the Soviet Government officials to whom diplomatic privilege has been accorded are, or have been, trade union officials. His Majesty's Government take steps to ensure that no person who is persona non grata should be appointed to a diplomatic post in London, but the fact that an official has been a trade union leader would not in itself render him objectionable.

Have the couriers of the Russian trade unions been accorded diplomatic privileges?

I think I answered a question on that subject before, but I should be obliged if my hon. Friend would put it on the Order Paper.

Will the Foreign Secretary say what purpose is served, if any, by the retention of that Embassy and those officials in this country?

Will the right hon. Gentleman say if any other Russian subjects other than the officials of the Russian Soviet Government are accorded diplomatic immunity in this country?

That does not arise out of the question. If my hon. Friend will put a questionn on the Paper asking for the information which he desires I will do my best to answer it.

Petrol (Sale in England)

asked the Prime Minister whether his attention has been called to the fact that petrol belonging to British subjects, which was appropriated by the Russian Soviet authorities without compensation, is being sold in this country; whether he is aware that companies with British names are being utilised by the Soviet commercial representatives to sell the petrol in question; that the corporation of one of our great cities, apparently unaware of the circumstances, have just placed an order for the supply of petrol, originating as above-mentioned, for the next 12 months; and what action the Government propose to take in the matter?

I have been asked to reply. I am aware of the facts referred to in the first two parts of the question, and I have seen statements in the Press to the same effect as the third part. As has already been stated in replies to similar questions, I have no power to prohibit this trade.

Will the hon. Gentleman make representations to the Prime Minister and the Government, in the interests of the trade of the country, and also of the people whose goods have been taken from them, that power should be obtained if there is no power?

Is the hon. Gentleman aware that 95 per cent. of the oil-bearing wells in Russia were the property of the State before?

Questions

Mosul Boundary Treaty

asked the Secretary of State for Foreign Affairs whether he can give the House any details with regard to the Anglo-Turkish Treaty dealing with the Mosul area; whether he is in possession of the official documents on the subject; and when they will be published?

The text of the Treaty has to-day been received from Constantinople, and the necessary steps are being taken to have it translated and laid as a White Paper at the earliest possible date.

Is not this Treaty a satisfactory answer to those critics of the Government who prophesied immediate disaster?

We have so many satisfactory answers to the critics of the Government.

General Strike

Russian Government Payments

Statement by Sir A. Chamberlain

asked the Secretary of State for Foreign Affairs whether any representations have within the last six months been made to the Soviet Government with regard to their activities in this country or in other parts of the British Empire; and, if so, whether any correspondence will be laid before Parliament?

asked the Secretary of State for Foreign Affairs whether he has received any information tracing money sent from Russia for the general strike to the Soviet Treasury; and, if so, what protest he has made or intends to make?

asked the Secretary of State for Foreign Affairs whether he will publish the information which he has received regarding anti-British actions or utterances by officials of the Soviet Government during the recent general strike and the present stoppage in the coal industry; and what action he is prepared to take?

asked the Prime Minister what steps the Government are proposing to take in view of the fact that the donation of money by the Russian Government to one of the parties in the present dispute is an infringement of the Russian Trade Agreement?

In the conversations which I had with the late Charge d'Affaires, I clearly stated that anti-British propaganda here and elsewhere was one of the main obstacles to any improvement in Anglo-Russian relations, and indisposed His Majesty's Government to any fresh negotiations as long as it continued. His Majesty's Government have always felt that the necessary conditions of successful negotiations were, first, acceptance of the ordinary rules of international law by the Soviet Government, and, secondly, an assurance of the good faith of the negotiators such as would be provided by the observance of existing agreements between them. I have in the main been content to state the policy of His Majesty's Government in these general terms and have not considered that any useful purpose would be served by detailed protests in regard to particular instances, but a few days ago—just before I left for Geneva—I instructed His Majesty's Chargé d'Affaires in Moscow to inform the Soviet Government that His Majesty's Government cannot pass over in silence the action of the Soviet Commissariat of Finance in giving special authorisation for the transfer to this country of funds destined for the support of the general strike. He is to point out that the general strike was an illegal and unconstitutional act constituting a serious threat to established order, and that the special action taken by the Soviet Commissariat of Finance in its favour does not conduce to the friendly settlement which the Soviet Government profess to desire of the questions outstanding between the two countries. I will consider the request for papers, and shall be obliged to the hon. Members whose questions refer to this aspect of the matter if they will give me time for consideration.

May I ask whether the Government are carefully weighing up the disadvantages as well as the advantages of the present Trade Agreement with Russia, as indicated by the Noble Lord the Secretary of State for India?

All aspects of the matter are under consideration by His Majesty's Government.

Has the money that has been transmitted been transmitted from Soviet sources, or resources, or was it merely with the sanction of the Financial Commissariat of the Soviet Government?

What is within our knowledge, and was the ground of my protest, is that the stipulations of the law in force have been waived in order to permit the transmission of this money in support of an illegal and unconstitutional strike.

That being so, has not the time come when we ought to do something more than protest against this?

Arising out of the right hon. Gentleman's reply, does he assume that the Russian Government, or the Commissariat of Finance, would take the view of His Majesty's Government with regard to the general strike—[ Interruption ]— and that they could be expected to regard it as anything other than an industrial dispute?

It is not for me to say, I think, what I would expect the Soviet Government to do, but in ordinary relations of courtesy between different nations the Government of one nation would not go out of its way to help support intended for any illegal movement in another country. As regards the question of my hon. and gallant Friend the Member for Hands-worth (Commander Locker-Lampson), His Majesty's Government have already announced, through the mouth of my right hon. Friend the Home Secretary, that they had these matters under consideration, and would make a statement on Thursday. I do not know whether I might say, in general, that, in view of that declaration, I should be glad if I were not pressed with unnecessary questions on the matter to-day.

Further arising out of the right hon. Gentleman's reply, would he not regard the action of the British Government in advancing money to Russian anti-revolutionaries as being illegal from the point of view of the Soviet Government?

Does not the action of the Soviet Government in this particular constitute a direct breach of the Trade Agreement of 1921, and will not my right hon. Friend use his influence to terminate that Agreement?

The question just put to me by my hon. and gallant Friend is one of those questions which I would particularly desire to have deferred until His Majesty's Government can make a general statement.

As the matter will come up again on Thursday, I do not think we need pursue it further to-day.

60 and 61.

asked the Secretary of State for the Home Department (1) whether his attention has been called to the fact that large sums of money have been sent into this country since the termination of the general strike by the Russian Soviet Government, directly or through organisations under its control, which will result in prolonging the coal dispute and the loss of British coal export markets; and whether the Government intend to deal with any future remittances in the same manner as similar remittances sent here during the general strike were dealt with;

(2) what sums of money were sent over to this country during the course of the general strike from Russia, and by whose authority they were returned; what sums of money have been sent over to this country since the termination of the general strike to the Miners' Federation from Russia; and on what dates?

asked the Home Secretary whether he will seek the opinion of the House before the Government exercises its powers to intercept any contributions intended for the relief of the miners' dependants?

As I stated in the answer which I gave to somewhat similar questions on the 10th instant, the whole question of these payments from Russia is being considered by His Majesty's Government, and I hope to make a full statement on Thursday.

Is the right hon. Gentleman aware that the first £25,000 offered to the workers of the country when the general strike was in operation was refused by the General Council of the Trade Union Congress?

Does this money come direct to London or through Paris or some other European city?

Does the right hon. Gentleman propose to take the opinion of the House before he exercises his powers under the Emergency Powers Act?

Certainly not. The Emergency Powers Act confers certain powers on the Secretary of State, and it is his duty to exercise them.

Can the right hon. Gentleman answer that part of my question which deals purely with questions of statistics? Can he say what sums of money have been received, and on what dates?

I propose to make a full statement of all the moneys I have cognisance of on Thursday. I have not the information with me now.

Does the right hon. Gentleman adhere to the statement he made last week that money had been received from the Soviet Government in this country during the General Strike?

Are communications from the Foreign Office to Soviet Russia on matters that affect industrial conditions and questions of law and order in this country communicated to the Home Office?

Does the right hon. Gentleman intend to give us an opportunity of debating this matter?

I said the other, day that is a matter for the Prime Minister and the Chief Whips, and not myself.

Inasmuch as questions have been put on the Paper, could not we press for an answer whether we shall have an opportunity of expressing an opinion and giving a vote before the miners' dependants are deprived of funds from any source?

The hon. and gallant Gentleman must not jump to conclusions as to what the decision of the Government must be. I repeat that the responsibility for carrying out the Regulations is on the shoulders of the Secretary of State, and if I did wrongly, the proper remedy is open to the hon. and gallant Gentleman.

Does not the right hon. Gentleman think we cannot discuss this matter properly by way of question and answer, and could we not have a free and open Debate?

We appear to be doing it rather effectively this afternoon. Still, I will represent that to the Prime Minister.

Is the right hon. Gentleman not aware that certain sums of money in aid of the miners are coming from Belgium, Germany and other countries, and do you propose to prevent that money being sent to the Miners' Federation?

I have said, until the Cabinet arrives at a conclusion I am not able to make a statement.

Will the right hon. Gentleman answer that part of the question which deals with Soviet money prolonging the coal dispute? Does he regard money sent by the Soviet Government to feed miners' children as wrong?

In view of the unsatisfactory nature of the reply of the Home Secretary, I beg to give notice that, at the end of Questions, I shall ask leave to move the Adjournment of the House in order to discuss a matter of urgent public importance.

At the end of Questions

May I ask you, Mr. Speaker, whether, in view of the serious allegations made against the Russian Government, you propose to reconsider your decision as to Parliamentary questions not to apply the rule as to a friendly Power?

I do not think I can act on allegations. I can deal only with facts as they are at the time.

May I point out to you that a Note has already been sent by His Majesty's Government to Moscow in which these allegations are contained, and, as this subject is of immense importance to the constituents of many hon. Members, is it not desirable that we should be allowed to put questions freely upon it?

From time to time there are matters of some controversy between Governments which still remain in what is known as friendly relations. It would be quite impossible for me to sit in judgment on these matters. I must deal with them in accordance with the old practice of the House.

If, as seems probable, the Home Secretary can on Thursday prove his case that the Soviet Government is not either civilised or friendly—

The hon. and gallant Member is not only putting a hypothetical question, he is anticipating. I can take no notice of such questions.

I beg to ask leave to move the adjournment of the House for the purpose of discussing a definite matter of urgent public importance, namely, "the statement of the Home Secretary that the Russian Government sent moneys to this country during the general strike for the purposes of a general strike."

I must ask the hon. Member to await the statement of the Home Secretary on Thursday. If some new departure be then announced, it will be open to him at that stage to move the Motion. At present we have no information to that effect.

On the point of urgency, may I submit that, while this statement stands uncorroborated, it is creating bad blood between two friendly peoples, and therefore there is every reason why its accuracy, or otherwise, should be debated at the earliest possible moment?

That may be so when the facts are placed before us, but it is the greater reason for not aggravating the position until such is the case. The hon. Member had better wait, and perhaps he will renew his Motion on Thursday, after the statement has been made.

You say, Mr. Speaker, that it is a question of fact. Are we to assume from that that the statement of the Home Secretary is really a question of fact?

The point that has been raised on this question, and also on the previous one, is the act of a friendly Power. How far must a foreign Power go before its action ceases to be friendly?

"British Gazette" (Volunteer Workers' Wages)

asked the Chancellor of the Exchequer the amount of wages paid to each class of worker who volunteered for service on the "British Gazette" during the period of the general strike?

In many cases the workers were unpaid volunteers. Of the rest, with the exception of certain technical experts, who were paid at the same rate as they would have received from their normal employers, the payments were based on the scale of wages laid down in the agreements between the various London Printing Trade Unions and the Newspaper Proprietors' Association.

Can the right hon. Gentleman say whether to any person employed on this newspaper any special premium was paid?

Not as far as I am aware, but I cannot answer definitely without notice.

Post Office Refreshment Bar (Voluntary Workers)

asked the Postmaster-General whether he is aware that two Post Office employés, Woods and Ablett, in charge of the Post Office refreshment bar, North Western district office, refused, during the late general strike, to serve two volunteers in that emergency on account of their loyalty in serving the Post Office, ejected them, and insulted them; that a Post Office overseer, R. G. Clarke, on written complaint being made to him, took no action to prevent the victimisation of these men; whether Woods, Ablett and Clarke belong to the union of Post Office workers; and what disciplinary action he is taking in the matter?

The inquiries which I have so far been able to make in this matter do not confirm the account given by my hon. Friend, but I am asking for a further report and will communicate with him later.

Egypt (League of Nations)

asked the Secretary of State for Foreign Affairs what information he has as to the intention of the Egyptian Government to apply for membership of the League of Nations; and what is the attitude of His Majesty's Government to such an application?

I have no information beyond the reported statement in the speech from the Throne at the opening of the Egyptian Parliament that the Egyptian Government intend to apply for membership of the League of Nations. I am not prepared at this stage to define the attitude of His Majesty's Government in circumstances which are still purely hypothetical.

Certifying Factory Surgeons

asked the Minister of Health what is the present procedure in the appointment of certifying factory surgeons by the Home Office; and whether he is satisfied that this procedure is the best calculated to obtain a proficient and efficient medical service?

I have been asked to reply. The appointments in question are made by the Chief Inspector of Factories under Section 122 of the Factory and Work- shop Act, 1901. Vacancies as they occur are advertised in the "London Gazette" and communicated to the medical Press, and applicants are required to give particulars of their qualifications and experience and of any other appointments they may hold. The applications are carefully scrutinised and inquiries made, and, in the case of important districts, arrangements are made for the candidates to be interviewed by one of the medical inspectors. Where there is more than one candidate, the advice of the Senior Medical Inspector is taken. The Chief Inspector is satisfied that under this procedure the best men available are secured, and I have received no complaints.

Are the vacancies advertised also in Edinburgh, or only in the "London Gazette"?

So far as English factories are concerned, only in the "London Gazette."

Is it not the case that you have English people in Scotland carrying on this work, and also Scottish people in England carrying on this work; and is a man debarred merely because of his nationality as to which country he shall practise in?

Not at all. Scotsmen carrying on their work in English factories have the advantage of English domicile.

Coal Trade Dispute

Unemployed Miners (Empire Settlement)

asked the Prime Minister, having regard to the possibility of at least 200,000 or more miners being unable to find employment at the conclusion of the present stoppage in the coal trade, if the Government will immediately prepare a scheme of Empire migration to meet this problem and endeavour to make arrangements for the settlement of these men and their families overseas?

The possibility of affording to miners opportunities for settlement overseas is receiving consideration. I would remind my hon. Friend that no scheme of this nature could, of course, be carried out except with the full approval of the oversea Government concerned.

Will there be included in the right hon. Gentleman's consideration lists of royalty owners who have never been able to find any work? Will he migrate them, too?

Since the admission last week, in reply to a question, that miners made good agricultural workers, instead of going to the expense of conveying men across the world will the Government settle them on the land in this country to grow food?

Is the right hon Gentleman aware that 200,000 miners will not be out of work unless the Government adopt the Samuel Commission's proposals for artificially increasing the selling price of coal and artificially raising the cost of production?

Economy Appeal

asked the Home Secretary whether, in view of the lack of powers to curtail the hours of music and dancing in clubs and restaurants during the present coal stoppage, he will consider issuing an appeal to all patriotic citizens to avoid using fuel and electricity for pleasure and luxury at a time when vital industries are forced to go short of these necessities?

I have been asked to reply. My right hon. and gallant Friend the Secretary for Mines has already issued an appeal, which was both published widely in the Press and broadcast, reminding the public of the urgent necessity for economy in the use of coal, and reminding them that economy in the use of gas and electricity is equally important. He is glad to have this opportunity of renewing it.

Would it not be as well to confer with the Postmaster-General as to showing the bills in the Post Office because, apparently it has had very little effect?

Seeing that for private consumption coal is strictly rationed, will the Minister see that in these places also a similar ration is applied?

Subvention (Distribution)

asked the Chancellor of the Exchequer the approximate detailed amounts of the distribution of coal subvention as to wages, profits, etc.?

I have been asked to reply. The figures are not yet complete, as my right hon. and gallant Friend the Secretary for Mines is still awaiting the trading results of April. As soon as he receives them, he will communicate with my hon. Friend in order that he may repeat his question.

Ascot Races

asked the Minister of Transport whether it is the intention of the Government, in view of the coal situation, to restrict the railway or road transport services to Ascot and other racing fixtures?

asked the Minister of Transport whether his attention has been drawn to the announcement that 16 special first-class non-stop trains are to be run by the Southern Railway Company every day in connection with Ascot races; and whether, in view of the national shortage of fuel, he is prepared to take steps to prevent this?

I have suggested to the railway companies that in view of the need for economy in the consumption of coal they should, so far as practicable, refrain from providing special facilities in connection with race meetings, and I understand that restricted services only are being run for Ascot, as was the case for Epsom. It has not so far been found necessary to restrict the use of road transport, but the whole question of fuel consumption, in view of the stoppage of work at the mines, engages the constant attention of the Government.

Questions

Trade Union Law

asked the Prime Minister whether the Cabinet have yet come to any decision with regard to introducing legislation to remedy the present condition of trade union law?

Flour (Chemical Treatment)

52, 53 and 54.

asked the President of the Board of Trade (1) whether he will consider the introduction of legislation whereby purchasers of flour may ascertain whether they are being supplied with treated or untreated flour;

(2) whether the Departmental Committee who have under investigation the question of the treatment of flour with chemical substances have yet reported; and whether the evidence and their conclusions will be presented to the House?

(3) if he has knowledge whether grain is treated with chlorine gas or other chemicals before as well as after importation into this country?

I have been asked to reply to those questions. The Departmental Committee have not yet reported and until their Report is received it is obviously not desirable to introduce legislation on the subject. My right hon. Friend has no knowledge of grain being treated with chlorine gas or other chemicals either before or after importation.

Education

Deaf Children

asked the President of the Board of Education if he can state approximately the number of vacant places that there are at present in certified schools for deaf children; and if he will call the attention of the local education authorities to this matter for the purpose of having them filled up?

There were, on 31st March, 1925, the latest date for which complete returns are available, 148 spare places in day schools for the deaf, and 251 in residential schools. As regards the second part of the question, I called the attention of local authorities to this matter in December, 1924, and again early in 1925, by Circular 1349, a copy of which I am sending the hon. Member.

School Meals

asked the President of the Board of Education how many local education authorities have appended to the form of application for school meals the paragraph from the Education (Provision of Meals) Act, 1906, which lays down that there shall be charged to the parent in respect of each meal furnished to a child under this Act such amount as may be determined by the local education authority, such amount, in the event of the parent being considered able to pay, being recoverable summarily as a civil debt?

I have no information as to the number of local authorities who adopt this practice, as the form to which the hon. Member refers is not submitted to my Department.

Does not the Noble Lord think this form of application is calculated to deter parents from sending their children to take advantage of these schools?

No one could possibly raise an objection to a local authority informing people of the statutory powers under which it acts.

Will the Noble Lord answer my question? Does he think it will deter parents from sending their underfed children to take advantage of these schools?

It may deter them or it may not, but I repeat it is impossible to regard as improper information given by a local authority to such parents of the limits of the statutory power under which they work.

Aliens

Residences Within Limited Areas

asked the Home Secretary whether he will introduce legislation giving him power to establish limited areas within this country where those aliens may reside who are not recognised as nationals by other countries?

Deportation

asked the Home Secretary whether he will give the number of aliens deported from this country during 1925 and since 1st January, 1926, respectively?

The figures for the whole of last year were 256, and for the first five months of the present year, 71.

David Bacher

asked the Home Secretary whether he is aware that David Bacher, a Russian Communist living in Islington, has been recommended for deportation five times; and, as the Soviet Government has refused to admit him, what steps he proposes to take to get rid of this alien?

The facts of this case are well known to me. It has not so far been possible to effect this man's deportation because no other country will recognise him as a national; but a renewed application is now before the Soviet Government, and I hope that their reply may be received before long, and that it may be favourable.

Is there any way of getting rid of the man? Cannot we deal with him as we deal with a long answer to a question—circulate him?

Will the right hon. Gentleman consider temporarily deporting this man to British Honduras, where they want white population?

Questions

Police Constables (Warrant Cards)

asked the Home Secretary whether police constables on duty, either in uniform or plain clothes, are required to carry warrant cards; and, if so, whether it is their duty to produce such cards for inspection on demand by persons for whose names and addresses the constable has asked?

Constables on duty in plain clothes carry their warrant cards and produce them when necessary to prove their identity as constables. In the Metropolitan Police and some other forces warrant cards are not as a rule carried by constables in uniform.

Is there any reason why a man in uniform should not carry a card, seeing that there are ways of getting hold of a uniform and putting it on improperly?

If the hon. Member has any information of that having occurred, I will consider it, but I have never heard of such a thing.

Death in Prison (Reginald Russell)

asked the Home Secretary whether he is now in a position to make a statement with regard to the circumstances attending the death of Mr. Reginald Russell, in Bedford prison, on 23rd May?

No, Sir. The inquiry was a long and exhaustive one and only concluded on Friday last, and the report has not yet been received.

If I put a question down for Thursday, will the right hon. Gentleman be able to reply?

German Reparation

asked the Chancellor of the Exchequer if the German Republic or the President of the Reichsbank have been in communication with him or the reparation authorities in regard to the possible revision of the Dawes plan?

Before any alteration is made in the Dawes plan, will it be submitted to this House?

Government Departments

Whitley Council (Staff Side)

asked the Financial Secretary to the Treasury whether membership of the staff side of the Whitley Council of the Civil Service is confined to members of the Civil Service; and, if not, how many members outside the Civil Service are included and what are their qualifications?

The answer to the first part of the question is in the negative. Thirteen out of the present 27 members of the staff side are not civil servants. The staff side is appointed by certain groups of Civil Service Associations and the qualification of the above members to sit on the Council is the fact of their appointment by those groups of associations.

Is it not right that only men connected with the service should be on the Whitley Council?

The question put by the hon. Member for Basingstoke (Sir A. Holbrook) is a matter of opinion. I am not sure of the circumstances stated by the hon. Member for North Camberwell (Mr. Ammon).

Industrial EmployéS (Holidays)

asked the Financial Secretary to the Treasury whether he will give further consideration to the position of the industrial employés of His Majesty's Government, who only get four public bank holidays in a year, with a view to giving these employés a reasonable period of annual holiday on full pay for the sake of their health and the efficiency of the Government service?

I would refer the hon. Member to the answer given to him on the 1st March last, to which I have nothing to add.

Will the right hon. Gentleman give further consideration? Is he aware that this is a very considerable grievance, seeing that the Prime Minister promised to give a playground and these people have no holiday at all?

Questions

Australian Zinc Concentrates Contract

asked the Chancellor of the Exchequer the total Government loss on the Australian zinc concentrates contract?

I have been asked to reply. The net loss up to 31st March, 1925, the date of the last completed accourts, was £1,699,603.

Personal Explanation

I desire to ask leave to make a personal explanation. Last Monday, speaking on the Committee stage of the Finance Bill, I made reference to the importation of Lancia motor cars. It appears that some hon. Members of the House, and also some people outside, were under the impression that I was making a charge, if not of fraud, of sharp practice against the importers of the Lancia cars. I desire to make it quite clear that I was making no such charge. I was advocating a change in the law to ensure in every case that the price declared at the Customs should bear some resemblance to the price at which the car reached the consumer. I desire to say something of which I was ignorant when I spoke on Monday last—namely, that the reconditioned Lancia motor chassis, to which I was referring, are sold by the Italian Government, and are not imported by the Lancia Motor Company or the Curtis Automobile Company, who are the sole concessionnaires of that car in this country. I much regret that any remarks of mine should have caused any annoyance or injury to anyone, particularly to those who are interested, and I trust this explanation will put the matter in order.

Selection (Standing Committees)

Standing Committee D

Mr. WILLIAM NICHOLSON reported from the Committee of Selection; That they had added the following Member to Standing Committee D (in respect of the Petroleum Bill [ Lords ], the Coroners (Amendment) Bill [ Lords ], and the Local Government (County Boroughs and Adjustments) Bill [ Lords ]: Major-General Sir Richard Luce.

Standing Committee B

Mr. WILLIAM NICHOLSON further reported from the Committee; That they had discharged the following Member from Standing Committee B: Captain Bullock; and had appointed in substitution: Captain Cazalet.

Reports to lie upon the Table.

Orders of the Day

Finance Bill

Further considered in Committee. [ Progress, 10th June.]

[Captain FITZROY in the Chair.]

CLAUSE 15.—(Duties on betting and on certificates required in respect of bookmakers' business and premises.)

I regret that the Chancellor of the Exchequer is not present at the moment, because I want at the outset to raise a matter to which he alone, I think, is able to reply. At the conclusion of his speech in the Committee stage on Thursday last, he intimated that he was considering the possibility of drastic Amendments to the Clause as it now appears in this Bill. He gave no pledge, but he expressed the hope that he might be able to meet certain representations which had been made to him, and which appeared quite conclusive, that the duty might be found to be injurious in its operation, and perhaps to some extent impracticable in its working. The right hon. Gentleman intimated that if he found it necessary to make Amendments in the scheme he would put them before the House on the Report stage of the Bill. Seven weeks ago to-day the Chancellor of the Exchequer introduced his Budget and first submitted these proposals to the House of Commons. He had, I suppose, given some consideration to this scheme, because he incorporated it in his Budget plans. Seven weeks after the introduction of the Budget he tells the House that he has very grave doubts whether the scheme, as embodied in the Bill, might not be disastrous to this key industry.

On a point of Order. What Amendment is the right hon. Gentleman about to move?

I will come to that in a moment. These are preliminary observations. It is a very extraordinary thing that a Minister in charge of a Bill should give a hint in the Committee stage of such drastic changes as were foreshadowed by the Chancellor of the Exchequer, and if on the Report stage such Amendments are proposed, I submit that it is perfectly futile and foolish for the Committee to consider the Clauses as they are now in the Bill. If the modifications are made later, they will completely change not only the rate of duty but the incidence of the duty. Therefore, I beg to ask whether it would be in order for me to move at this stage that further consideration of the Clauses relating to the Betting Duty be postponed until such time as the Chancellor of the Exchequer is in a position to submit to the Committee his amended proposals. The right hon. Gentleman suggested that he might do so on the Report stage. I understand that under the arrangement of business this week we shall not resume the discussion of the Finance Bill to-morrow. Therefore, there is time between now and the conclusion of the Committee stage of this Bill, for the Chancellor of the Exchequer to formulate and to submit to the House any Amendments that he may have in mind. It would be sheer waste of time for the Committee to continue detailed considerations of proposals which are in the air.

This proposal has taken me entirely by surprise. I had no idea that the right hon. Gentleman was going to raise the point, and I do not know whether my right hon. Friend the Chancellor of the Exchequer has been made aware of the proposal. He happens to be unavoidably prevented from attending at the moment.

It would not be in order now to postpone discussion of Clauses on which we have entered. The correct procedure would be for the right hon. Gentleman to move that I report Progress, and ask leave to sit again.

I think there can be no answer to my point that it would he a sheer waste of time to go on discussing these Clauses without some definite statement of the intentions of the Chancellor of the Exchequer. I am prepared to do whatever will put the matter in order. If I can do so by moving to report Progress, and thereby get the Chancellor of the Exchequer here in order to make a statement to the Committee, then I will adopt that course.

If the right hon. Gentleman moves that I report Progress and ask leave to sit again, I would accept the Motion, but debate on it must be confined to the Question that I report Progress.

I beg to move, "That the Chairman do report Progress, and ask leave to sit again."

I should not, on that Motion, want to repeat what I have said already, but I can give that as a reason why Progress ought to be more reported.

I must ask the indulgence of the Committee, because I have been engaged oh a Cabinet Committee. While I have not heard all that has passed in the last few minutes, I have received an account of it. It was understood on the last occasion when we debated this matter—I am glad to see the Leader of the Opposition present—that the general discussion should take place on the first of the Amendments, and that we were to receive all the other Amendments in the course of the evening. Then after this new announcement had been made—if it were a new announcement—I had a conversation with the Leader of the Opposition across the Floor of the House, and I said that of course I would not press for continuing on the Thursday night, if that were the general wish. The right hon. Gentleman then used language which is no doubt reported in the OFFICIAL REPORT, in which he said that there would be no more discussion on the subsequent Amendments than there would have been if we carried on the Debate that night to a reasonable hour of the night. That is the basis on which we are now discussing this subject. That is the basis which was reached across the Floor of the House by the Leader of the Opposition and myself.

4.0 P.M.

The Committee must keep in view the announcement that I made in the closing passage of my remarks on Thursday night. Let us see, on the merits and in the very brief period that is very properly assigned by our agreement to further discussion, what grounds there are for suggesting that great or decisive change has been forecast by myself. I estimated, on the advice which was given to me, that the 5 per cent. tax, as described in this Bill would yield, in a full year, about £6,000,000. I gave that estimate under all the reserves which are necessary in dealing with what is necessarily a very speculative matter. Since then we have had the opportunity of inspecting the actual books of some of the biggest firms of turf commission agents, and we have now at our disposal information as to the total turnover and volume, which is incomparably more trustworthy than any which was in the possession of the Government or of any Committee of the House of Commons which has examined this matter before. The result is that we estimate that the turnover is probably much nearer £300,000,000 than £200,000,000 a year. That being so, it is clear that we can realise our figure of £6,000,000, which is what we originally considered the industry could safely bear without being completely ruptured, possibly with a somewhat lower rate of duty. Therefore, I feel myself entitled to consider whether some mitigation in the rate of duty may not be permitted, and I have undertaken, quite voluntarily, to do so. There is no doubt whatever about the power of the Government to carry this 5 per cent. tax by an overwhelming majority through every stage; but one is very anxious, in imposing a tax of this kind, not suddenly and violently to upset old-established and long-recognised practices and institutions.

Therefore, providing we can obtain for the Exchequer substantially the same or a somewhat larger sum than we set out to get, I should be prepared in the interval to examine whether the rate can be reduced, and also whether any slight differentiation can be permitted between the rate charged on a bet which is put through on the telephone with a turf commission agent and the rate charged on a bet made by a person who has actually taken the trouble to go to a racecourse, on the ground that in equity some such differentiation might be justified. But all I said was that I would look into this matter between the Committee stage and the Report stage. It is quite clear that there is absolutely no question of the purpose of the Government being altered in any way, or of running the risk of getting anything less than the £6,000,000 on which we have counted and which is the minimum on which all our proceedings are based. It would be quite easy another year, if it were found in practice that £6,000,000 could be reached by a lower rate than 5 per cent., and if it were thought that the industry could bear it, to make, a further advance. Parliament would be perfectly free in the matter. But the point now is that there is no change whatever in the purpose of the Government, which is the raising of at least £6,000,000 by the taxation of betting. That is our purpose, and no alteration will be contemplated or accepted by the Government that does not fully achieve that object. There is, therefore, no recasting of our proposals. I hope with this explanation the right hon. Gentleman will allow us to proceed on the basis of the general agreement reached the other night across the floor and will leave for the Report stage the consideration of the final proposals of the Government, assuming that our investigations enable us to make any alteration whatever.

There is no intention to depart from the agreement made on Thursday night, to which the Chancellor of the Exchequer has referred. The whole of Thursday's sitting was devoted to a general discussion on the understanding that nothing in the nature of a general discussion should take place on any of the subsequent Amendments and to that arrangement we adhere. The point I was raising was something quite different. The right hon. Gentleman was not here when I spoke, but he has, though not wholly, been fairly well informed as to what I said. I said that the suggestion which the Chancellor of the Exchequer made at the end of his speech on Thursday night as to the possibility of proposing certain Amendments to the Clauses on the Report stage had made it altogether futile and a sheer waste of time to continue the discussion on the Clauses as they appear in the Bill, and that was the reason I suggested that the consideration of the betting Clauses should be postponed until the right hon. Gentleman was either in a position to say that he stood by the proposals as embodied in the Bill or until he had other proposals to submit.

The right hon. Gentleman, as I pointed out, has had plenty of time. It is seven weeks since he introduced the Budget, and he probably gave the matter months' consideration before that. There is therefore no excuse at all why we should be asked to go through the farce of passing these Clauses this afternoon and having to wait until the Report stage before the foreshadowed alterations are made. I have been informed by the Chairman that I should not be in order in moving the postponement of the Clauses, and I have therefore moved to report Progress to get some statement from the Chancellor of the Exchequer. We have had the statement. It is not very satisfactory, and it does not remove the ground of complaint which I made; but I do not want to delay the business of the Committee in the least, because there are a number of outstanding matters which we should like to discuss at some length. Therefore, I should be willing to allow the Amendments that were to be formally moved to go through, of course on the distinct understanding that we are going through what is a mere farce.

There is no question of altering the general arrangement. The general principle or discussion, so far as this side of the House is concerned, was disposed of, but the Chancellor of the Exchequer at the conclusion of the Debate made a most important announcement regarding the rate of the tax, and it was on that point that the discussions arose to-day. Let us see where this Committee is getting as the controller of public finance. This is a very peculiar case, perhaps one might say a unique case, because all the machinery of discussion in Ways and Means has been, for well-known reasons, abandoned. Therefore, we have come to this position, that late at night on the Committee stage of the Finance Bill, which is the penultimate stage for the discussion of details, the Chancellor of the Exchequer, the very last speaker, announces an important change in one of his taxes. Then, although he has had the whole of the week-end to consider it, and although he admits that he has been in conference and has calculated the amount and satisfied himself that a reduction can be made, he is not prepared to come down to the Committee and put down his Amendments. Let him and his Amendments in now, and let us discuss them. If he does not do that, we are in the extremely unsatisfactory position of permitting four stages of the taxing Budget to pass this House, and reserving to ourselves, in fact to Parliament, because the House of Lords has no power in the matter, just one stage only in which to consider the real proposals of the Chancellor of the Exchequer. I would suggest to him that as a champion of House of Commons rights he would be better advised to agree to the postponement of these Clauses, or to prepare and hand in to the Table the Amendments he proposes. I suggest this, not on the merits of the tax, but merely in the interests of reserving unimpaired the control of this Committee over the taxes of the year.

I really venture to think that the hon. and gallant Member for Leith (Captain W. Benn) is not doing full justice to the attitude of the Government on this subject. After all, what is the worst that can be said about our action? It is that we have contemplated a certain concession in the proposals of taxation which remain—a possible diminution in the rate of impost, not an increase but a diminution. I stated most clearly the other night that I could give no promise or guarantee, but I have promised between the Committee stage and the Report stage to see whether the result cannot be reached with a somewhat lower rate of duty. To say that it is wrong for a Government to be influenced by debate or by the general process of criticism and examination of a Measure which takes place during its Committee stage is really to strike a much greater blow at the effectiveness of Parliamentary discussion than anything which has ever entered into my head to suggest. In my opinion, it is right that the Government, bringing forward their proposals, should keep themselves continually in touch as far as possible, especially in matters of this kind, with the movements of Parliamentary and public opinion; and, if it be possible that they can achieve their result by some mitigation of the process which is more agreeable and convenient to all parties concerned and that takes place as the result of Parliamentary discussion, that is a vindication of Parliamentary procedure and a compliment to every Member who has taken part in the discussion. The reverse idea that the Government should stick in a hard and adamant fashion to their proposals and carry everything through without any regard to the formation of opinion in Parliament as the result of discussion is really very derogatory to the House. After all, it would have been perfectly open to me to have said nothing on Thursday night, and some people may think that I should have been well advised, whatever the intentions of the Government, to have said nothing on the matter. There was no reason to make any special statement from the point of view of the division at all. This stage of the Bill would then have passed away without any reproaches from my hon. and gallant Friend or the right hon. Gentleman opposite, and we could have put forward our Amendments. [ Interruption. ] I hope the Noble Lady will permit me to proceed.

I was not interrupting, and I do not know to what the right hon. Gentleman is referring.

At any rate, we could have put the Amendments down as is very often done. It would have been perfectly possible to have said nothing on the Committee stage, and, as has been done time and time again by every Government in this country, to have put down some Amendments after the Committee stage and before the Report stage. That is what the Report stage is for. That is what our procedure is designed for. An interval is allowed between the Committee stage and the Report stage for that express purpose. That is all we are doing, and I am sure that the Committee will think that in taking this course and in making this statement, not in a very calculated manner, I have really been endeavouring to take the House fully into the confidence of the Government and to let them know that there is a possibility of our obtaining the identical objective, namely £6,000,000 per annum, with a slightly less severe rate being imposed.

We are not in the least complaining that the Chancellor of the Exchequer proposes to get his revenue by an alteration in the rate of duty. That is not the point of our complaint at all. Let me first say that the Chancellor of the Exchequer cannot fool the Committee into believing that he was influenced by what was said on Thursday afternoon, because he made is quite clear that he has been contemplating for some weeks some possible change in the rate of duty. But I have said all that I need say on this matter, and I do not intend to pursue it. There was a great deal of force in the point made by my hon. and gallant Friend the Member for Leith (Captain W. Benn), that if the Chancellor of the Exchequer had put forward his amended proposals at an earlier stage, we should have had more opportunity of discussing them than will be open to the Committee on the Report stage of the Bill. I, therefore, ask leave, to withdraw the Motion.

Motion, by leave, withdrawn.

I beg to move, in page 10, line 7, to leave out paragraph ( a ).

In accordance with the undertaking which was come to, I move this Amendment formally.

Question put, "That paragraph ( a ) stand part of the Clause."

The Committee divided: Ayes, 237; Noes, 104.

Division No. 277.]

AYES.

4.15 p.m.

Acland-Troyte, Lieut.-Colonel

Crookshank, Cpt. H. (Lindsey, Gainsbro)

Huntingfield, Lord

Agg-Gardner, Rt. Hon. Sir James T.

Curzon, Captain Viscount

Hurd, Percy A.

Alexander, E. E. (Leyton)

Dalziel, Sir Davison

Hurst, Gerald B.

Amery, Rt. Hon. Leopold C. M. S.

Davidson, J. (Hertf'd, Hemel Hempst'd)

Hutchison, G. A. Clark (Midl'n & P'bl's)

Applin, Colonel R. V. K.

Davies, Dr. Vernon

Iliffe, Sir Edward M.

Ashley, Lt.-Col. Rt. Hon. Wilfrid W.

Davies, Maj. Geo. F. (Somerset, Yeovil)

Jackson, Lieut.-Col. Rt. Hon. F. S.

Astor, Viscountess

Davison, Sir W. H. (Kensington, S.)

Jackson, Sir H. (Wandsworth, Cen'l)

Atkinson, C.

Dawson, Sir Philip

Jacob, A. E.

Baldwin, Rt. Hon. Stanley

Drewe, C.

Joynson-Hicks, Rt. Hon. Sir William

Balfour, George (Hampstead)

Edmondson, Major A. J.

Kindersley, Major G. M.

Balniel, Lord

Elliot, Captain Walter E.

King, Captain Henry Douglas

Barclay-Harvey, C. M.

Ellis, R. G.

Kinloch-Cooke, Sir Clement

Barnett, Major Sir Richard

Elveden, Viscount

Lamb, J. Q.

Barnston, Major Sir Harry

Erskine, Lord (Somerset, Weston-s.-M.)

Lane Fox, Col. Rt. Hon. George R.

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

Erskine, James Malcolm Monteith

Lister, Cunliffe-, Rt. Hon. Sir Philip

Bennett, A. J.

Evans, Captain A. (Cardiff, South)

Locker-Lampson, G. (Wood Green)

Betterton, Henry B.

Everard, W. Lindsay

Locker- Lampson, Com. O. (Handsw'th)

Bird, Sir R. B. (Wolverhampton, W.)

Falle, Sir Bertram G.

Loder, J. de V.

Blundell, F. N.

Fermoy, Lord

Looker, Herbert William

Boothby, R. J. G.

Fielden, E. B.

Luce, Major-Gen. Sir Richard Harman

Bourne, Captain Robert Croft

Ford, Sir P. J.

Lumley, L. R.

Bowater, Sir T. Vansittart

Fraser, Captain Ian

MacAndrew, Major Charles Glen

Bowyer, Capt. G. E. W.

Fremantle, Lieut.-Colonel Francis E.

McDonnell, Colonel Hon. Angus

Braithwaite, A. N.

Gadie, Lieut.-Col. Anthony

MacIntyre, Ian

Brass, Captain W.

Ganzonl, Sir John

MacMillan, Captain H.

Bridgeman, Rt. Hon. William Clive

Gates, Percy

Macnaghten, Hon. Sir Malcolm

Briscoe, Richard George

Gilmour, Lt.-Col. Rt. Hon. Sir John

McNeill, Rt. Hon. Ronald John

Brocklebank, C. E. R.

Goff, Sir Park

Macquisten, F. A.

Brooke, Brigadier-General C. R. I.

Gower, Sir Robert

Maitland, Sir Arthur D. Steel-

Broun-Lindsay, Major H.

Grant, J. A.

Malone, Major P. B.

Brown, Maj. D. C. (N'th'I'd., Hexham)

Grattan-Doyle, Sir N.

Manningham-Buller, Sir Mervyn

Brown, Brig.-Gen. H. C. (Berks, Newb'y)

Greene, W. P. Crawford

Margesson, Captain D.

Buckingham, Sir H.

Greenwood, Rt. Hn. Sir H. (W'th's'w, E.)

Marriott, Sir J. A. R.

Bull, Rt. Hon. Sir William James

Grotrian, H. Brent

Mason, Lieut.-Col. Glyn K.

Bullock, Captain M.

Gunston, Captain D. W.

Meyer, Sir Frank

Burman, J. B.

Hacking, Captain Douglas H.

Mitchell, S. (Lanark, Lanark)

Cadogan, Major Hon. Edward

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

Mitchell, W. Foot (Saffron Walden)

Caine, Gordon Hall

Hall, Capt. W. D'A. (Brecon & Rad.)

Mitchell, Sir W. Lane (Streatham)

Campbell, E. T.

Hammersley, S. S.

Monsell, Eyres, Com. Rt. Hon. B. M.

Cautley, Sir Henry S.

Hanbury, C.

Moore, Lieut.-Colonel T. C. R. (Ayr)

Cazalet, Captain Victor A.

Hannon, Patrick Joseph Henry

Moore, Sir Newton J.

Cecil, Rt. Hon. Sir Evelyn (Aston)

Harmsworth, Hon. E. C. (Kent)

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

Chadwick, Sir Robert Burton

Hartington, Marquess of

Morrison, H. (Wilts, Salisbury)

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

Headlam, Lieut.-Colonel C. M.

Morrison-Bell, Sir Arthur Clive

Chapman, Sir S.

Henderson, Lieut.-Col. V. L. (Bootle)

Nall, Lieut.-Colonel Sir Joseph

Charteris, Brigadier-General J.

Henn, Sir Sydney H.

Nelson, Sir Frank

Christie, J. A.

Hennessy, Major J. R. G.

Newton, Sir D. G. C. (Cambridge)

Churchill, Rt. Hon. Winston Spencer

Herbert, S. (York, N. R. scar. & wn'by)

Nicholson, Col. Rt. Hn. W. G.(Ptrsf'ld.)

Churchman, Sir Arthur C.

Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.

Nield, Rt. Hon. Sir Herbert

Clarry, Reginald George

Hogg, Rt. Hon. Sir D. (St. Marylebone)

Nuttall, Ellis

Clayton, G. C.

Holbrook, Sir Arthur Richard

Penny, Frederick George

Cobb, Sir Cyril

Holland, Sir Arthur

Percy, Lord Eustace (Hastings)

Cochrane, Commander Hon. A. D.

Holt, Capt. H. P.

Perkins, Colonel E. K.

Colfox, Major Wm. Phillips

Hope, Capt. A. O. J. (Warw'k, Nun.)

Peto, Basil E. (Devon, Barnstaple)

Conway, Sir W. Martin

Hope, Sir Harry (Forfar)

Peto, G. (Somerset, Frome)

Cooper, A. Duff

Hopkins. J. W. W.

Pielou, D. P.

Cope, Major William

Hopkinson, Sir A. (Eng. Universities)

Pilcher, G.

Couper, J. B.

Hopkinson, A. (Lancaster, Mossley)

Price, Major C. W. M.

Courtauld, Major J. S.

Howard, Captain Hon. Donald

Ramsden, E.

Courthope, Lieut.-Col. Sir George L.

Hudson, Capt. A. U. M. (Hackney, N.)

Rawson, Sir Alfred Cooper

Craik, Rt. Hon. Sir Henry

Hudson. R. S. (Cumberl'nd, Whiteh'n)

Remnant, Sir James

Rentoul, G. S.

Stanley, Col. Hon. G. F. (Will'sden, E.)

Williams, A. M. (Cornwall, Northern)

Rhys, Hon. C. A. U.

Steel, Major Samuel Strang

Williams, Com. C. (Devon, Torquay)

Richardson, Sir P. W. (Sur'y, Ch'ts'y)

Stott, Lieut.-Colonel W. H.

Williams, Herbert G. (Reading)

Ropner, Major L.

Strickland, Sir Gerald

Wilson, Sir C. H. (Leeds, Central)

Ruggles-Brise, Major E. A.

Stuart, Crichton-, Lord C.

Wilson, M. J. (York, N. R., Richm'd)

Russell, Alexander West (Tynemouth)

Styles, Captain H. Walter

Wilson, R. R. (Stafford, Lichfield)

Samuel, A. M. (Surrey, Farnham)

Sueter, Rear-Admiral Murray Fraser

Winby, Colonel L. P.

Sandeman, A. Stewart

Sykes, Major-Gen, sir Frederick H.

Winterton, Rt. Hon. Earl

Sanders, Sir Robert A.

Thomson, F. C. (Aberdeen, South)

Wise, Sir Fredric

Sandon, Lord

Thomson, Rt. Hon. Sir W. Mitchell-

Wolmer, Viscount

Savery, S. S.

Titchfield, Major the Marquess of

Womersley, W. J.

Shaw, Lt.-Col. A. D. Mcl. (Renfrew, W.)

Tryon, Rt. Hon. George Clement

Wood, E. (Chest'r, Stalyb'dge & Hyde)

Shaw, Capt. W. W. (Wilts, Westb'y)

Wallace, Captain D. E.

Wood, Sir Kingsley (Woolwich, W.)

Shepperson, E. W.

Ward, Lt.-Col. A. L. (Kingston-on-Hull)

Wood, Sir S. Hill- (High Peak)

Sinclair, Col. T.(Queen's Univ., Belfst.)

Warner, Brigadier-General W. W

Woodcock, Colonel H. C.

Slaney, Major P. Kenyan

Waterhouse, Captain Charles

Worthington-Evans, Rt. Hon. Sir L.

Smith, R. W.(Aberd'n & Kinc'dine,'C.)

Watson, Rt. Hon. W. (Carlisle)

Spender-Clay, Colonel H.

Wells, S. R.

TELLERS FOR THE AYES. ——

Sprot, Sir Alexander

Wheler, Major Sir Granville C. H.

Colonel Gibbs and Lord Stanley.

NOES.

Alexander. A. V. (Sheffield, Hillsbro')

Hayday, Arthur

Salter, Dr. Alfred

Ammon, Charles George

Henderson, T, (Glasgow)

Scurr, John

Attlee, Clement Richard

Hirst, G. H.

Shepherd, Arthur Lewis

Barker, G. (Monmouth, Abertillery)

Hirst, W. (Bradford, South)

Short, Alfred (Wednesbury)

Barnes, A.

Hore-Belisha, Leslie

Simon, Rt. Hon. Sir John

Barr, J.

Hudson, J. H. (Huddersfield)

Sinclair, Major Sir A. (Caithness)

Batey, Joseph

Jenkins, W. (Glamorgan, Neath)

Sitch, Charles H.

Beckett, John (Gateshead)

John, William (Rhondda, West)

Slesser, Sir Henry H.

Benn, Captain Wedgwood (Leith)

Johnston, Thomas (Dundee)

Smith, Ben (Bermondsey, Rotherhiths)

Bowerman, Rt. Hon. Charles W.

Jones, Morgan (Caerphilly)

Smith, H. B. Lees (Keighley)

Bromley, J.

Jones, T. I. Mardy (Pontypridd)

Smith, Rennie (Penistone)

Brown, James (Ayr and Bute)

Kennedy, T.

Snell, Harry

Buxton, Rt. Hon. Noel

Kenworthy, Lt.-Com. Hon. Joseph M.

Snowden, Rt. Hon. Philip

Cluse, W. S.

Kenyon, Barnet

Spencer, G. A. (Broxtowe)

Connolly, M.

Lawrence, Susan

Spoor, Rt. Hon. Benjamin Charles

Cove, W. G.

Lee, F.

Stamford, T. W.

Dalton, Hugh

Lowth, T.

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

Davies, Evan (Ebbw Vale)

Lunn, William

Thomson, Trevelyan (Middlesbro. W.)

Day, Colonel Harry

MacDonald, Rt. Hon. J. R. (Aberavon)

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

Dennison, R.

Macdonald, Sir Murdoch (Inverness)

Thurtle, E.

Edwards, J. Hugh (Accrington)

Mackinder, W.

Tinker, John Joseph

Evans, Capt. Ernest (Welsh Univer.)

Maclean, Nell (Glasgow, Govan)

Townend, A. E.

Forrest, W.

MacNeill-Weir, L.

Viant, S. P.

Gardner, J. P.

Morris, R. H.

Wallhead, Richard C.

Gillett, George M.

Morrison, R. C. (Tottenham, N.)

Westwood, J.

Gosling, Harry

Naylor, T. E.

Wheatley, Rt. Hon. J.

Graham, Rt. Hon. Wm. (Edin, Cent.)

Oliver, George Harold

Whiteley, W.

Greenwood, A. (Nelson and Colne)

Parkinson, John Allen (Wigan)

Williams, David (Swansea, East)

Grenfell, D. R. (Glamorgan)

Pethick-Lawrence, F. W.

Williams, Dr. J. H. (Llanelly)

Griffiths, T. (Monmouth, Pontypool)

Ponsonby, Arthur

Wilson, C. H. (Sheffield, Attercliffe)

Groves, T.

Potts, John S.

Wilson, R. J. (Jarrow)

Grundy, T. W.

Rees, Sir Beddoe

Windsor, Walter

Hall, G. H. (Merthyr Tydvil)

Richardson, R. (Houghton-le-Spring)

Hamilton, Sir R. (Orkney & Shetland)

Riley, Ben

TELLERS FOR THE NOES. ——

Hardle, George D.

Robinson, Sir T. (Lancs., Stretford)

Mr. Charles Edwards and Mr. Hayes.

Hartshorn, Rt. Hon. Vernon

Rose, Frank H.

I beg to move, in page 10, line 13, to leave out paragraph ( b ).

There are one or two points which have not yet been raised in these discussions, and to which I wish to direct the attention of the Chancellor of the Exchequer on this Amendment. This is the first time in the history of this country that bookmakers have been certified. This leads to a very curious position, inasmuch as we are going to give a man power to set up in a business in which he will receive money which he would not be able to recover at law in the event of any failure to pay on the part of his clients. That, in itself, is surely an anomalous position. I desire, however, to call the Chancellor's attention to a particular instance which came to my notice only a day or two ago, as to the possible effects of this particular provision. It has been said that we have a conflict of evidence on this matter. It is true that, on one side, we have those who are engaged in the industry taking a natural objection to this proposal, as all people will object to having fresh taxes imposed upon them or to being compelled to give statements of a previously undisclosed income. I do not think there is anything in the debating point of the Chancellor who seeks to play off the view of the betting fraternity and the view taken by the Churches from an entirely different angle. Naturally, as I say, there is an objection on the part of those concerned to fresh taxation or to disclosing particulars of revenue or income which have hitherto been secret from the general public. From that point of view, whether the tax affects street betting or not, is not germane to the question. Personally, I think it will not, but it will increase betting among working people and will bring a considerable amount of hardship and trouble into working class homes. This fact was brought home to me the other morning when I went into a small newspaper shop which I visit every day.

I would point out to the hon. Member that we had a general discussion of the subject on Thursday last and, on the present Amendment I think we ought to confine ourselves to the question of whether or not there is to be a duty of £10 a year on these certificates.

I think, Sir, you will find that is precisely the point with which I am dealing. The proposal is that these men should be allowed to take out certificates, and I desire to indicate the effect of that proposal. The newsagent to whom I refer also carries on a betting business. I asked him what would be the effect of the new law in his case, and if it would put him out of the betting business. He said, "No, I think it will make it better for me because, as I understand it, I can now take out a certificate, and it will be much cheaper for me to do that than to disburse money in certain other ways." We all know what obtains in connection with these fugitive bookmakers—

I do not wish the hon. Member to say anything which might be compromising, but is this gentleman carrying on a credit business?

I am coming to that point. I then pointed out to him that the law only applied to credit bookmakers, and he replied, "What is to prevent me from setting up a book and taking credit?" There does not seem to be anything to prevent such a man taking credit from the humbler backers—giving "tick" in fact. I cannot see any answer to that point. He could, at the end of a week or a month, settle up accounts with his clients.

The answer is obvious. He can do that now, and the only thing that stops him is the difficulty of getting payment. If he is not sure that he will be paid, he demands the cash beforehand, and that is illegal. That is the answer.

That confirms the point I am trying to make. People like the man in the small newspaper shop can now take out a certificate which licenses them to carry on this business. The workmen or others who carry on the business will not have to do it in the fugitive manner they do at present, with the result that, whereas the ordinary man of small means now bets on his odd money, he will probably be carried into betting on his whole income, and find himself considerably in debt and commit himself very much further under this system than would otherwise have been the case. That is the real danger which is seen among working class people. The Chancellor of the Exchequer has no knowledge of this sort of thing so far as working class life is concerned, and he does not know the snares and dangers that are there, but anybody who knows working class conditions knows that nowadays, in the forenoon of the day, there are numbers of men who go round selling certain cards giving tips, which are largely bought by workmen and poor women or by men out of employment. There is a temptation in this business being given a greater respectability, and the opportunities, by putting up their bets on tick, for these women to run into greater debt and for men to risk the whole of their wages, will be much more serious than is now the case, and we shall find that we shall probably open out very great possibilities of social trouble during this period. As I see it, the result will be to increase betting among poor people in a very much worse form than is now the case, and it will lay them open to very much greater disaster, so far as their domestic finances are concerned.

I fear also that this will set up a new vested interest, which will have to be bought out at some time or other, and that a fresh problem will arise like that with which we had to deal in connection with the drink traffic. In an oft-quoted speech, the Chancellor of the Exchequer, when he sat in another part of the House, indicated how the party to which he is now attached have been the creatures and are in the hands largely of the drink traffic. If it is going to be to his credit that the party opposite are going to be in the hands of the betting fraternity as well in the days to come, then, while the country is already paying a pretty heavy price for the Chancellor of the Exchequer's genius for remaining in office, it seems to me that we shall be paying a much heavier price in the days to come in the social ills that will arise through the mere carrying into effect of the paragraph the deletion of which I am moving.

I understand that the Chancellor of the Exchequer is considering the question of making a graduated levy on bets according to whether they take place on a course or by credit outside. Is he in a position to say whether he is also considering the case of bookmakers who already have their expenses in going to race meetings? Are they going to pay the same licence as, for instance, the commission agents, who simply keep an office in town and do not incur the same expenses? I do not want a definite answer to that question if the right hon. Gentleman is not ready with it, but I think it ought to be considered. My second question is this: If you are going to make this man pay £10 a year licence and make him also a tax collector, what will be the position when people do not pay up, when they run up bills with him and then bilk him, if I may use such an expression in this Committee? If you make a man pay this licence and also make him collect the tax for you, you may say that you are not legalising him and not putting facilities in his way for incurring bad debts, but you will have to do it presently, for it seems to me that you will be committing an injustice. I oppose the whole tax, but I do not want to see unnecessary injustice committed.

In ordinary Parliamentary language, I can answer the first question of the hon. and gallant Member for Central Hull (Lieut.-Commander. Kenworthy) by saying that the answer is in the negative. There is no intention of making any such graduation as that to which he referred. In regard to his second question, he asked what will happen supposing those who make the bets do not pay up. The answer is presumably that the bookmaker will not make a bet with them again. That is the only sanction they have at present. What we say is: "As long as you are carrying on this business and there is an enormous turnover, notwithstanding the fact that whatever debts are incurred are not recoverable at law, we know very well that the vast majority of these so-called debts of honour are paid." Indeed, I believe, from all that I have heard, that in a great number of cases they are paid rather in preference to debts which are recoverable at law. The only sanction which a bookmaker now has is that he says that, if a man does not pay, that is the last bet he will make with him, and not only with him, but with all the fraternity of bookmakers, who, no doubt, know quite well when a defaulter comes among them. That will not be altered in the slightest degree by the fact that we say that, seeing there is this tremendous business, we think the State should get some of the proceeds. It is a very old way of describing the transaction to say that a fool and his money are very soon parted, and it is a very fair way of expressing it, but if there are so many fools about, and if there is so much money about, and they are being so frequently parted the one from the other, it seems not unfair that the State should get some part of the money which is being parted from the fool. That is all that we are doing here.

The hon. Member for North Camberwell (Mr. Ammon) really, in the greater part of his speech, dealt with the general question which we were discussing the other night, and I do not propose to cover that ground again. There is only one point that he made on which I ought to say something. He appeared to me to be under a misapprehension as to the effect of the certificate which is dealt with in this paragraph, the omission of which he has moved. He thinks that, because it will be necessary for a bookmaker to take out a certificate and to pay £10 for it, in some cryptic manner that will enable him to carry on with greater safety than he does now a system of illegal betting. It will not make any difference whatever, nor will it give him any encouragement which he has not got now to convert his business, if it is now on an illegal footing, into a business on a legal footing. If a bookmaker can do a legal trade and a remunerative trade on a legal basis, he will presumably prefer to do that rather than to run the risk which is involved in carrying on his trade upon an illegal basis. The certificate which he will be required to take out will not alter that in the slightest degree. On the other hand, the class of people with whom a bookmaker does business in the street or by ready money over a counter in a shop will not be any more anxious to do it on a legal basis than they are now, and, therefore, there is nothing in this paragraph which will have any tendency whatever to alter, either for better or for worse, the course of business as it is done between these persons now.

What the bookmakers say is this: A great many of the bookmakers who are doing a legal business want to have themselves clearly differentiated from those who are doing an illegal business, and my own belief is—very different from the opinion commonly expressed in the House—that the effect of this legislation will not be to increase illegal betting, but to diminish it very considerably, and for this reason: Everybody knows that at the present moment the illegal bookmaker and bettor, on the whole, really have the sneaking sympathy of their fellows. Nobody wants to give information to the police about them, and the consequence is that all this goes on without the law being able to intervene to any great extent, but the moment that the legal bookmakers take out their certificates and have to pay £10, it immediately becomes in their interest, in a way that it is not in their interest now, to see that betting is not carried on illegally by those who have not paid, and consequently, if I may use language familiar to hon. Members opposite, the illegal bookmaker will be no longer, as he is now, a comrade, but will become a blackleg, in so far as the legal bookmaker is concerned.

We are all guessing, I admit, upon these possible results, but I think that is a much more likely effect to follow than that illegal betting will be increased and encouraged by this tax. So far as this particular paragraph is concerned, it is really only part of the machinery of collection. Just as you have to have a certificate or a licence for an auctioneer, a street-hawker, and so on, you cannot have machinery by which you exact an Excise Duty upon any commodity, whatever it may be, without having the necessary knowledge of where a business is carried on and by whom, and it is merely as part of the general machinery of collection rather than as a substantive part of the taxation itself that the requirement of a certificate costing £10 appears in this paragraph. It is, therefore, essential for us to keep it, and for that reason it is impossible to accept the Amendment.

I do not quite agree with the right hon. Gentleman in the view that the granting of this certificate will not confer some sort of prestige on the individual, and I think that that really is the gravamen of the charge against this paragraph. The Chancellor of the Exchequer said you do not confer any prestige upon patent medicines by taxing them, and that is true. Nobody can confer prestige on sugar or tea by taxing them, but we are not here taxing a thing, but giving a certificate to an individual. I think that in a way this certificate brings out the objections to the whole tax more than does anything else, because it appears, although the Government deny it, to turn the agent of this particular transaction, which all agree is antisocial and should be restricted as much as possible, into a Government agent, and there is no doubt at all that in doing his trade he will advertise that he is a licensed bookmaker, or a Government bookmaker, holding a Government licence, or use some other words associating himself with the Government of the country, which will give him a prestige he did not possess before. That being so, it is to be supposed that people who might have thought it was not quite right to bet, or who might have had some qualms about betting in the ordinary way, seeing the whole thing put under the ægis of the Government, and seeing the agent of the business made a Government servant, as he will claim to be, may be tempted to go into betting, so I think this paragraph is far more than merely a matter of machinery. In moving the omission of this paragraph, I think my hon. Friend the Member for North Camberwell (Mr. Ammon) is really striking at the most obvious objection to the whole of the Government's betting tax, and I hope he will carry his Amendment to a Division.

I have not said much with regard to this tax, because I feel that a very great deal of cant has been associated with much that has been said about it, but I am opposed to this particular method. Like everybody else who is a sensible man, I want to limit betting as far as possible, because there is the moral obligation involved; but if you are going to have betting let us have it under conditions which are equal between man and man. The hon. and gallant Gentleman who has just been speaking said that if a man is going to be a hawker he must have a hawker's licence, but when a man goes to get a hawker's licence from the Post Office authorities, or whoever they may be, they do not ask him whether he is going to carry on his business by cash or on credit. My opposition to this is that you are not equalising the position at all, because, as the law stands at the present time, it is illegal for the poor man to bet by cash, and, therefore, there is a distinction between one man and another. This proposed law is a form of perpetuating that distinction. If the Government are in any way going to acknowledge betting of any character, they ought to acknowledge it in all classes or in none. So far as betting is concerned, what I got up to say was that I object to this class distinction as between the men who want to bet. If the majority want to bet—and, probably, the majority do want to bet—then, if you are going to have democratic government where the majority must rule, and if you are going to license a man who accepts bets of £5 over the telephone, you ought to give fair play to the other man who wants to bet 1s., so that he may put his bet on with the same safety, legally, as the man who bets £10.

I should like to raise a question in connection with this matter, one affecting my constituency, where there are a good many working-men's clubs, in a few of which they have tape machines. What is the position of these clubs? The members are members of a perfectly legal club. Are the members who make bets in these clubs and use the tape machines to be regarded as bookmakers, and will they have to take out a licence? There is a good deal of betting goes on for small sums in cash which is perfectly legal, but what is to be the case in future if members of the clubs take bets?

Might I inform the hon. and gallant Gentleman that, as far as the working-men's clubs go that come under the Club and Institute Union, they possess no tape machines, as they will not have them.

My hon. Friend speaks with authority, and I am much obliged to him, but I am speaking of certain genuine and well-conducted clubs.

I am not certain whether we are not getting a little away from the question.

I will not pursue the matter, but I thought I should like to give an opportunity to the Financial Secretary to say whether those to whom I have referred come within the purview of this Betting Tax?

Perhaps I may be allowed to give an answer to the hon. and gallant Gentleman. Betting in clubs between members of clubs is perfectly legal, and is not touched by this Bill at all. It only deals with betting with a bookmaker. But you have to be sure that the betting is between members. If one member of a club takes up a certain position in a club and holds himself out to take bets with anyone who cares to bet with him then he would be liable criminally, because he brings himself within the Betting Act, 1853, as he would be using an office or place for the purpose of betting with persons resorting thereto.

I am much obliged to the hon. and learned Gentleman for the reply that he has given to me, but it has not been given from the Government bench, and I should like to know if it represents the Government point of view?

I really do not know whether this is strictly in order, but if the hon. and gallant Gentleman looks at Clause 18, Sub-section (1) he will see that

"the expression 'betting premises' means any premises which are kept or used for the purpose of making, receiving, or negotiating in any manner whatsoever bets on credit.…"

My hon. and learned Friend the Member for East Grinstead (Sir H. Cautley) is perfectly correct in his explanation. As to what exactly is the definition of a bookmaker, I do not know that it would be wise for me to attempt at the present moment to give a definition.

Is there any provision in the Bill that

leads to cancellation of the bookmaker's certificate if he acts illegally?

Certain offences under the Bill would lead to the cancellation of the certificate.

Question put, "That paragraph ( b ) stand part of the Clause."

The Committee divided: Ayes, 264; Noes, 109.

Division No. 278.]

AYES.

[4.53 p.m.

Acland-Troyte, Lieut.-Colonel

Davidson, J. (Hertf'd, Hemel Hempsf'd)

Iliffe, Sir Edward M.

Agg-Gardner, Rt. Hon. Sir James T.

Davies, Dr. Vernon

Inskip, Sir Thomas Walker H.

Albery, Irving James

Davies, Maj. Geo. F. (Somerset, Yeovil)

Jackson, Lieut.-Col. Rt. Hon. F. S.

Alexander, E. E (Leyton)

Davison, Sir W. H. (Kensington, S.)

Jackson. Sir H. (Wandsworth, Cen'l)

Amery, Rt. Hon. Leopold C. M. S.

Dawson, Sir Philip

Jacob, A. E.

Applin, Colonel R. V. K.

Drewe, C.

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

Ashley, Lt.-Col. Rt. Hon. Wilfrid W.

Edmondson, Major A. J.

Joynson-Hicks, Rt. Hon. Sir William

Atkinson, C.

Elliot, Captain Walter E.

Kindersley, Major Guy M.

Baldwin, Rt. Hon. Stanley

Ellis, R. G.

King, Captain Henry Douglas

Balfour, George (Hampstead)

Elveden, Viscount

Kinloch-Cooke, Sir Clement

Balniel, Lord

Erskine Lord (Somerset, Weston-s.-M.)

Lamb, J. Q.

Barclay-Harvey, C. M.

Erskine, James Malcolm Monteith

Lister, Cunliffe, Rt. Hon. Sir Philip

Barnett, Major Sir Richard

Evans, Captain A. (Cardiff, South)

Locker-Lampson, G. (Wood Green)

Barnston, Major Sir Harry

Everard, W. Lindsay

Loder, J. de V.

Bellairs, Commander Carlyon W.

Falle, Sir Bertram G.

Looker, Herbert William

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

Fermoy, Lord

Luce, Maj.-Gen. Sir Richard Harman

Bennett, A. J.

Fielden, E. B.

Lumley, L. R.

Betterton, Henry B.

Finburgh, S.

MacAndrew, Major Charles Glen

Bird, E. R. (Yorks, W. R., Skipton)

Ford, Sir P. J.

McDonnell, Colonel Hon. Angus

Bird, Sir R. B. (Wolverhampton, W.)

Forestier-Walker, Sir L.

Maclntyre, Ian

Blundell, F. N.

Foster, Sir Harry S.

Macmillan Captain H.

Boothby, R. J. G.

Fraser, Captain Ian

Macnaghten, Hon. Sir Malcolm

Bourne, Captain Robert Croft

Fremantle, Lieut.-Colonel Francis E.

McNeill, Rt. Hon. Ronald John

Bowater, Sir T. Vansittart

Gadie, Lieut.-Col. Anthony

Macquisten, F. A.

Bowyer, Capt. G. E. W.

Galbraith, J. F. W.

Maitland, Sir Arthur D. Steel-

Braith waite, A. N.

Ganzoni, Sir John

Malone, Major P. B.

Brass Captain W.

Gates, Percy

Manningham-Buller, Sir Mervyn

Brassey, Sir Leonard

Gilmour, Lt.-Col. Rt. Hon. Sir John

Margesson, Captain D.

Bridgeman, Rt. Hon. William Clive

Goff, Sir Park

Marriott, Sir J. A. R.

Briscoe, Richard George

Gower, Sir Robert

Mason, Lieut.-Col. Glyn K.

Brocklebank, C. E. R.

Grant, J. A.

Meller, R. J.

Brooke, Brigadier-General C. R. I.

Grattan- Doyle, Sir N.

Meyer, Sir Frank

Broun-Lindsay, Major H.

Greene, W. P. Crawford

Mitchell, S. (Lanark, Lanark)

Brown, Maj. D. C. (N'th'l'd., Hexham)

Grotrian, H. Brent

Mitchell, W. Foot (Saffron Walden)

Brown, Brig.-Gen. H. C.(Berks, Newb'y)

Gunston, Captain D. W.

Mitchell, Sir W. Lane (Streatham)

Buckingham, Sir H.

Hacking, Captain Douglas H.

Monsell, Eyres, Com. Rt. Hon. B. M.

Bullock, Captain M.

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

Moore, Lieut.-Colonel T. C. R. (Ayr)

Burman, J. B.

Hall, Capt. W. D'A. (Brecon & Rad.)

Moore, Sir Newton J.

Burton, Colonel H. W.

Hammersley, S. S.

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

Butler, Sir Geoffrey

Hanbury, C.

Morrison, H. (Wilts, Salisbury)

Cadogan, Major Hon. Edward

Hannon, Patrick Joseph Henry

Morrison-Bell, Sir Arthur Clive

Caine, Gordon Hall

Harmsworth, Hon. E. C. (Kent)

Murchison, C. K.

Campbell, E. T.

Hartington, Marquess of

Nall, Lieut.-Colonel Sir Joseph

Cayzer, Maj. Sir Herbt. R. (Prtsmth.S.)

Harvey, G. (Lambeth, Kennington)

Nelson, Sir Frank

Cecil, Rt. Hon. Sir Evelyn (Aston)

Harvey, Major S. E. (Devon, Totnes)

Newton, Sir D. G. C. (Cambridge)

Chadwick, Sir Robert Burton

Headlam, Lieut.-Colonel C. M.

Nicholson, Col. Rt.Hn.W.G.(Ptrsf'ld.)

Chapman, Sir S.

Henderson, Lieut.-Col. V. L. (Bootle)

Nield, Rt. Hon. Sir Herbert

Charteris, Brigadier-General J.

Henn, Sir Sydney H.

Nuttall, Ellis

Christie. J. A.

Hennessy, Major J. R. G.

O'Connor, T. J. (Bedford, Luton)

Churchill, Rt. Hon. Winston Spencer

Herbert, S. (York, N.R., Scar. & Wh'by)

Penny, Frederick George

Churchman, Sir Arthur C.

Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.

Percy, Lord Eustace (Hastings)

Clarry, Reginald George

Hogg, Rt. Hon. Sir D. (St. Marylebone)

Perkins, Colonel E. K.

Clayton, G. C.

Hohler, Sir Gerald Fitzroy

Perring, Sir William George

Cobb, Sir Cyril

Holland, Sir Arthur

Peto, Basil E. (Devon, Barnstaple)

Cochrane, Commander Hon. A. D.

Holt, Captain H. P.

Peto, G. (Somerset, Frome)

Colfox, Major Wm. Phillips

Hope, Capt. A. O. J. (Warw'k, Nun.)

Pielou, D. P.

Conway, Sir W. Martin

Hope, Sir Harry (Forfar)

Pilcher, G.

Cooper, A. Duff

Hopkins, J. W. W.

Power, Sir John Cecil

Cope, Major William

Hopkinson, Sir A. (Eng. Universities)

Price, Major C. W. M.

Couper, J. B.

Hopkinson, A. (Lancaster, Mossley)

Ramsden, E.

Courtauld, Major J. S.

Horlick, Lieut.-Colonel J. N.

Rawson, Sir Alfred Cooper

Courthope, Lieut.-Col. Sir George L.

Home, Rt. Hon. Sir Robert S.

Reid, D. D. (County Down)

Craik, Rt. Hon. sir Henry

Howard, Captain Hon. Donald

Remer, J. R.

Croft, Brigadier-General Sir H.

Hudson, Capt. A. U.M. (Hackney, N.)

Remnant, Sir James

Crookshank, Col. C. de W. (Berwick)

Hudson, R. S. (Cumberl'nd, Whiteh'n)

Rentoul, G. S.

Crookshank, Cpt. H.(Lindsey, Gansbro)

Huntingfield, Lord

Rhys, Hon. C. A. U.

Curzon, Captain Viscount

Hurd, Percy A.

Rice, Sir Frederick

Dalkeith, Earl of

Hurst, Gerald B.

Richardson, Sir P. W. (Sur'y, Ch'ts'y)

Dalziel, Sir Davison

Hutchison, G. A. Clark (Midl'n & P'bl's)

Ropner, Major L.

Ruggles-Brise, Major E. A.

Steel, Major Samuel Strang

Wells, S. R.

Russell, Alexander West (Tynemouth)

Stott, Lieut.-Colonel W. H.

Wheler, Major Sir Granville C. H.

Salmon, Major I.

Strickland, Sir Gerald

Williams, A. M. (Cornwall, Northern)

Samuel, A. M, (Surrey, Farnham)

Stuart, Crichton-, Lord C.

Williams, Herbert G. (Reading)

Samuel, Samuel (W'dsworth, Putney)

Stuart, Hon. J. (Moray and Nairn)

Wilson, Sir C. H. (Leeds, Central)

Sandeman, A. Stewart

Styles, Captain H. Walter

Wilson, M. J. (York, N. R., Richm'd)

Sanders, Sir Robert A.

Sueter, Rear-Admiral Murray Fraser

Wilson, R. R. (Stafford, Lichfield)

Sandon, Lord

Sykes, Major-Gen. Sir Frederick H.

Winby, Colonel L. P.

Sassoon, Sir Philip Albert Gustave D.

Tasker, Major R. Inlgo

Winterton, Rt. Hon. Earl

Savery, S. S.

Thomson, F. C. (Aberdeen, South)

Wise, Sir Fredric

Shaw, Lt.-Col. A. D. Mel. (Renfrew, W)

Thomson, Rt. Hon. Sir W. Mitchell-

Wolmer, Viscount

Shaw, Capt. W. W. (Wilts, Westb'y)

Tinne, J. A.

Womersley, W. J.

Sheffield, Sir Berkeley

Titchfield, Major the Marquess of

Wood, E. (Chest'r, Stalyb'dge & Hyde)

Shepperson, E. W.

Tryon, Rt. Hon. George Clement

Wood, Sir Kingsley (Woolwich, W)

Sinclair, Col. T. (Queen's Univ., Belfst.)

Vaughan-Morgan, Col. K. P.

Wood, Sir S. Hill- (High Peak)

Slaney, Major P. Kenyon

Wallace, Captain D. E.

Woodcock, Colonel H. C.

Smith, R. W. (Aberd'n & Kinc'dine,C.)

Ward, Lt.-Col. A. L.(Kingston-on-Hull)

Worthington-Evans, Rt. Hon. Sir L.

Somerville, A. A. (Windsor)

Warner, Brigadier-General W. W.

Sprot, Sir Alexander

Waterhouse, Captain Charles

TELLERS FOR THE AYES. ——

Stanley, Col. Hon. G. F. (Will'sden, E.)

Watson, Rt. Hon. W. (Carlisle)

Colonel Gibbs and Lord Stanley.

NOES.

Alexander, A. V. (Sheffield, Hillsbro')

Hardle, George D.

Salter, Dr. Alfred

Ammon, Charles George

Hartshorn, Rt. Hon. Vernon

Scurr, John

Astor, Viscountess

Hayday, Arthur

Shaw, Rt. Hon. Thomas (Preston)

Attlee, Clement Richard

Hayes, John Henry

Shepherd, Arthur Lewis

Barker, G. (Monmouth, Abertillery)

Henderson, Rt. Hon. A. (Burnley)

Short, Alfred (Wednesbury)

Barnes, A.

Henderson, T. (Glasgow)

Sinclair, Major Sir A. (Caithness)

Barr, J.

Hirst, G. H.

Sitch, Charles H.

Batey, Joseph

Hirst, W. (Bradford, South)

Slesser, Sir Henry H.

Beckett, John (Gateshead)

Hore-Belisha, Leslie

Smith, Ben (Bermondsey, Rotherhithe)

Benn, Captain Wedgwood (Leith)

Hudson, J. H. (Huddersfield)

Smith, H. B. Lees (Keighley)

Broad, F. A.

Jenkins, W. (Glamorgan, Neath)

Smith, Rennie (Penistone)

Bromley, J.

John, William (Rhondda, West)

Snell, Harry

Brown, James (Ayr and Bute)

Johnston, Thomas (Dundee)

Snowden, Rt. Hon. Philip

Buxton, Rt. Hon. Noel

Jones, Morgan (Caerphilly)

Spencer, George A. (Broxtowe)

Cluse, W. S.

Jones, T. I. Mardy (Pontypridd)

Spoor, Rt. Hon. Benjamin Charles

Clynes, Rt. Hon. John R.

Kennedy, T.

Stamford, T. W.

Connolly, M.

Kenworthy, Lt.-Com. Hon. Joseph M.

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

Cove, W. G.

Kenyon, Barnet

Thomson, Trevelyan (Middlesbro. W)

Dalton, Hugh

Lansbury, George

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

Davies, Evan (Ebbw Vale)

Lawrence, Susan

Thorne, W. (West Ham, plaistow)

Day, Colonel Harry

Lee, F.

Thurtle, E.

Dennison, R.

Lowth, T.

Tinker, John Joseph

Edwards, J. Hugh (Accrington)

Lunn, William

Townend, A. E.

Evans, Capt. Ernest (Welsh Univer.)

Mac Donald, Rt. Hon. J. R. (Aberavon)

Viant, S. P.

Forrest, W.

Mackinder, W.

Westwood, J.

Gardner, J. P.

Maclean, Nell (Glasgow, Govan)

Wheatley, Rt. Hon. J.

Gillett, George M.

Montague, Frederick

Whiteley, W.

Gosling, Harry

Morris, R. H.

Williams, C. P. (Denbigh, Wrexham)

Graham, Rt. Hon. Wm. (Edin., Cent.)

Morrison, R. C. (Tottenham, N.)

Williams, David (Swansea, East)

Greenall, T.

Naylor, T. E.

Williams, Dr. J. H. (Llanelly)

Greenwood, A. (Nelson and Colne)

Oliver, George Harold

Wilson, C. H. (Sheffield, Attercliffe)

Grenfell, D. R. (Glamorgan)

Pethick- Lawrence, F. W.

Wilson, R. J. (Jarrow)

Griffiths, T. (Monmouth, Pontypool)

Ponsonby, Arthur

Windsor, Walter

Groves, T.

Potts, John S.

Grundy, T. W.

Rees, Sir Beddoe

TELLERS FOR THE NOES. ——

Guest, Haden (Southwark, N.)

Richardson, R. (Houghton-le-Spring)

Mr. Allen Parkinson and Mr. Charles Edwards.

Hall, G. H. (Merthyr Tydvil)

Riley, Ben

Hamilton, Sir R. (Orkney & Shetland)

Rose, Frank H.

I beg to move, in page 10, line 17, to leave out paragraph ( c ).

I presume this paragraph is consequential. I object to it on the ground that it is carrying too far that process which is started by licensing a person, of transforming what the general public at large considers a disreputable business into a respectable one. I am wondering whether this Clause which makes it respectable, endows it with a royal coat of arms, or at least some arms indicating the patronage of the Government. On the ground that this paragraph itself will give a halo of respectability to the betting industry, I beg to move.

The hon. Member for Dewsbury (Mr. Riley), in a most engaging way, confessed that his imagination was running away with him. And I think it did so. He seemed to think, because an Excise Duty is to be imposed here, that these places will have a halo cast around them and that they will appear as if they were either royal or Government establishments. I am not aware that anything of the sort takes place with regard to pawnbrokers. They are in exactly the same position, and are no doubt eminently respectable persons, and I have nothing to say against them, but I do not think that anyone imagines there is anything like a halo about them, or that they are royal persons. It is a highly imaginative idea, and there is little substance in the Amendment at all. You cannot have an Excise Duty without knowing where and on whom it is to fall, and it is no more remarkable that the required entry should remain when the

licence is paid than it should in regard to a distillery, a tobacco factory, or where any dutiable article is produced. We cannot accept this Amendment.

Question put, "That paragraph ( c ) stand part of the Clause."

The Committee divided: Ayes, 259; Noes, 111.

Division No. 279.]

AYES.

[5.5 p.m.

Acland-Troyte, Lieut.-Colonel

Drewe, C.

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

Albery, Irving James

Edmondson, Major A. J.

Joynson-Hicks, Rt. Hon. Sir William

Alexander, E. E. (Leyton)

Elliot, Captain Walter E.

Kindersley, Major Guy M.

Applin, Colonel R. V. K.

Ellis, R. G.

King, Captain Henry Douglas

Ashley, Lt.-Col. Rt. Hon. Wilfrid W.

Elveden, Viscount

Kinloch-Cooke, Sir Clement

Atkinson, C.

Erskine, Lord (Somerset, Weston-s.-M.)

Lamb, J. Q.

Baldwin, Rt. Hon. Stanley

Erskine, James Malcolm Monteith

Lister, Cunliffe-, Rt. Hon. Sir Philip

Balfour, George (Hampstead)

Evans, Captain A. (Cardiff, South)

Locker-Lampson, G. (Wood Green)

Balniel, Lord

Everard, W. Lindsay

Locker-Lampson, Com. O. (Handsw'th)

Barclay-Harvey, C. M.

Falle, Sir Bertram G.

Loder, J. de V.

Barnett, Major Sir Richard

Fermoy, Lord

Looker, Herbert William

Barnston, Major Sir Harry

Fielden, E. B.

Luce, Major-Gen. Sir Richard Harman

Bellairs, Commander Carlyon W.

Finburgh, S.

MacAndrew, Major Charles Glen

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

Ford, Sir P. J.

McDonnell, Colonel Hon. Angus

Bennett, A. J.

Forestier-Walker, L.

Maclntyre, Ian

Betterton, Henry B.

Foster, Sir Harry S

Macmillan, Captain H.

Bird, E. R. (Yorks, W. R., Skipton)

Fraser, Captain Ian

Macnaghten, Hon. Sir Malcolm

Bird, Sir R. B. (Wolverhampton, W.)

Fremantle, Lieut.-Colonel Francis E.

McNeill, Rt. Hon. Ronald John

Blundell, F. N.

Gadie, Lieut.-Col. Anthony

Macquisten, F. A.

Boothby, R. J. G.

Ganzoni, Sir John

Maitland, Sir Arthur D. Steel-

Bourne, Captain Robert Croft

Gates, Percy

Malone, Major P. B.

Bowater, Sir T. Vansittart

Gibbs, Col. Rt. Hon. George Abraham

Manningham-Buller, Sir Mervyn

Braithwaite, A. N.

Gilmour, Lt.-Col. Rt. Hon. Sir John

Margesson, Captain D.

Brass, Captain W.

Goff, Sir Park

Marriott, Sir J. A. R.

Brassey, Sir Leonard

Gower, Sir Robert

Mason, Lieut.-Col. Glyn K.

Briscoe, Richard George

Grant, J. A.

Meller, R. J.

Brocklebank, C. E. R.

Grattan- Doyle, Sir N.

Meyer, Sir Frank

Brooke, Brigadier-General C. R. I.

Greene, W. P. Crawford

Mitchell, S. (Lanark, Lanark)

Broun-Lindsay, Major H.

Grotrian, H. Brent

Mitchell, W. Foot (Saffron Walden)

Brown, Maj. D. C. (N'th'l'd., Hexham)

Gunston, Captain D. W.

Mitchell, Sir W. Lane (Streatham)

Brown, Brig.-Gen. H. C. C. (Berks, Newb'y)

Hacking, Captain Douglas H.

Monsell, Eyres, Com. Rt. Hon. B. M.

Buckingham, Sir H.

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

Moore, Lieut.-Colonel T. C. R. (Ayr)

Bullock, Captain M.

Hall, Capt. W. D'A. (Brecon & Rad.)

Moore, Sir Newton J.

Burton, Colonel H. W.

Hammersley, S. S.

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

Butler, Sir Geoffrey

Hanbury, C.

Morrison, H. (Wilts, Salisbury)

Cadogan, Major Hon. Edward

Hannon, Patrick Joseph Henry

Morrison-Bell, Sir Arthur Clive

Caine, Gordon Hall

Harmswortn, Hon. E. C. (Kent)

Murchison, C. K.

Cautley, Sir Henry S.

Hartington, Marquess of

Nall, Lieut.-Colonel Sir Joseph

Cayzer, Maj. Sir Herbt. R. (Prtsmth. S.)

Harvey, G. (Lambeth, Kennington)

Nelson, Sir Frank

Cecil, Rt. Hon. Sir Evelyn (Aston)

Harvey, Major S. E. (Devon, Totnes)

Newton, Sir D. G. C. (Cambridge)

Chadwick, Sir Robert Burton

Headlam, Lieut.-Colonel C. M.

Nicholson, Col. Rt. Hn. W. G.(Ptrsf'ld.)

Chamberlain, Rt. Hon. N. (Ladywood)

Henderson, Lieut.-Col. V. L. (Bootle)

Nield, Rt. Hon. Sir Herbert

Chapman, Sir S.

Henn, Sir Sydney H.

Nuttall, Ellis

Charteris, Brigadier-General J.

Hennessy, Major J. R. G.

O'Connor, T. J. (Bedford, Luton)

Christie, J. A.

Herbert, S. (York, N. R., Scar. & Wh'by)

Penny, Frederick George

Churchill, Rt. Hon. Winston Spencer

Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.

Percy, Lord Eustace (Hastings)

Churchman, Sir Arthur C.

Hogg, Rt. Hon. Sir D. (St. Marylebone)

Perkins, Colonel E. K.

Clarry, Reginald George

Hohler, Sir Gerald Fitzroy

Perring, Sir William George

Clayton, G. C.

Holland, Sir Arthur

Peto, Basil E. (Devon, Barnstaple)

Cobb, Sir Cyril

Holt, Captain H. P.

Peto, G. (Somerset, Frome)

Cochrane, Commander Hon. A. D.

Hope, Capt. A. O. J. (Warw'k, Nun.)

Pielou, D. P.

Colfox, Major Win. Phillips

Hope, Sir Harry (Forfar)

Pilcher, G.

Conway, Sir W. Martin

Hopkins, J. W. W.

Power, Sir John Cecil

Cooper, A. Duff

Hopkinson, Sir A. (Eng. Universities)

Preston, William

Cope, Major William

Hopkinson, A. (Lancaster, Mossley)

Price, Major C. W. M.

Couper, J. B.

Horlick, Lieut.-Colonel J. N.

Ramsden, E.

Courtauld, Major J. S.

Howard, Captain Hon. Donald

Rawson, Sir Alfred Cooper

Courthope, Lieut.-Col. George L.

Hudson, Capt. A. U. M. (Hackney, N.)

Reid, Capt. A. S. C. (Warrington)

Craik, Rt. Hon. Sir Henry

Hudson, R. S. (Cumberland, Whiteh'n)

Reid, D. D. (County Down.)

Croft, Brigadier-General Sir H.

Huntingfield, Lord

Remer, J. R.

Crookshank, Col. C. de W. (Berwick)

Hurd, Percy A.

Remnant, Sir James

Crookshank, Cpt. H. (Lindsey, Gainsbro)

Hurst, Gerald B.

Rentoul, G. S.

Dalkeith, Earl of

Hutchison, G. A. Clark (Midl'n & P'bl's)

Rice, Sir Frederick

Dalziel, Sir Davison

Iliffe, Sir Edward M.

Richardson, Sir P. W. (Sur'y, Ch'ts'y)

Davidson, J. (Hertf'd, Hemel Hempst'd)

Inskip, Sir Thomas Walker H.

Ropner, Major L.

Davies, Dr. Vernon

Jackson, Sir H. (Wandsworth, Cen'l)

Ruggles-Brise, Major E. A.

Davison, Sir W. H. (Kensington, S.)

Jacob, A. E.

Russell, Alexander West (Tynemouth)

Dawson, Sir Philip

Jephcott, A. R.

Salmon, Major I.

Samuel, A. M. (Surrey, Farnham)

Strickland, Sir Gerald

Williams, Herbert G. (Reading)

Samuel, Samuel (W'dsworth, Putney)

Stuart, Hon. J. (Moray and Nairn)

Wilson, Sir Charles H. (Leeds, Central)

Sandeman, A. Stewart

Styles, Captain H. Walter

Wilson, M. J. (York, N. R., Richm'd)

Sanders, Sir Robert A.

Sueter, Rear- Admiral Murray Fraser

Wilson, R. R. (Stafford, Lichfield)

Sandon, Lord

Sykes, Major-Gen. Sir Frederick H.

Winby, Colonel L. P.

Sassoon, Sir Philip Albert Gustave D.

Tasker, Major R. Inigo

Winterton, Rt. Hon. Earl

Savery, S. S.

Thomson, F. C. (Aberdeen, S.)

Wise, Sir Fredric

Shaw, Lt.-Col. A. D. Mcl. (Renfrew, W.)

Thomson, Rt. Hon. Sir W. Mitchell-

Withers, John James

Shaw, Capt. W. W. (Wilts, Westb'y)

Tinne, J. A.

Wolmer, Viscount

Shepperson, E. W.

Titchfield, Major the Marquess of

Womersley, W. J.

Sinclair, Col. T. (Queen's Univ., Belfast)

Tryon, Rt. Hon. George Clement

Wood, E. (Chest'r, Stalyb'dge & Hyde)

Slaney, Major P. Kenyon

Vaughan-Morgan, Col. K. P.

Wood, Sir Kingsley (Woolwich, W.)

Smith, R. W. (Aberd'n & Kinc'dine, C.)

Wallace, Captain D. E.

Wood, Sir S. Hill- (High Peak)

Somerville, A. A. (Windsor)

Ward, Lt.-Col. A.L.(Kingston-on-Hull)

Woodcock, Colonel H. C.

Sprot, Sir Alexander

Warner, Brigadier-General W. W.

Worthington-Evans, Rt. Hon. Sir L.

Stanley, Col. Hon. G. F.(Will'sden, E.)

Waterhouse, Captain Charles

Stanley, Lord (Fylde)

Watson, Rt. Hon. W. (Carlisle)

TELLERS FOR THE AYES. ——

Stanley, Hon. O. F. G. (Westm'eland)

Wells, S. R.

Captain Viscount Curzon and Captain Bowyer.

Steel, Major Samuel Strang

Wheler, Major Sir Granville C. H.

Stott, Lieut.-Colonel W. H.

Williams, A M. (Cornwall, Northern)

NOES.

Alexander, A. V. (Sheffield, Hillsbro')

Hamilton, Sir R. (Orkney & Shetland)

Rose, Frank H.

Ammon, Charles George

Hardle, George D.

Salter, Dr. Alfred

Astor, Viscountess

Hartshorn, Rt. Hon. Vernon

Scrymgeour, E.

Attlee, Clement Richard

Hayday. Arthur

Scurr, John

Barker, G. (Monmouth, Abertillery)

Hayes, John Henry

Shaw, Rt. Hon. Thomas (Preston)

Barnes, A.

Henderson, Rt. Hon. A. (Burnley)

Shepherd, Arthur Lewis

Barr, J.

Henderson, T. (Glasgow)

Short, Alfred (Wednesbury)

Batey, Joseph

Hirst, G. H.

Sinclair, Major Sir A. (Caithness)

Beckett, John (Gateshead)

Hirst, W. (Bradford, South)

Sitch, Charles H.

Benn, Captain Wedgwood (Leith)

Hore-Belisha, Leslie

Slesser, Sir Henry H.

Broad, F. A.

Hudson, J. H. (Huddersfield)

Smith, Ben (Bermondsey, Rotherhithe)

Bromley, J.

Jenkins, W. (Glamorgan, Neath)

Smith, H. B. Lees- (Keighley)

Brown, James (Ayr and Bute)

John, William (Rhondda, West)

Smith, Rennie (Penistone)

Buxton, Rt. Hon. Noel

Johnston, Thomas (Dundee)

Snell, Harry

Cluse, W. S.

Jones, Morgan (Caerphilly)

Snowden, Rt. Hon. Philip

Clynes, Rt. Hon. John R.

Jones, T. I. Mardy (Pontypridd)

Spencer, George A. (Broxtowe)

Connolly, M.

Kennedy, T.

Spoor, Rt. Hon. Benjamin Charles

Cove, W. G.

Kenworthy, Lt.-Com. Hon. Joseph M

Stamford, T. W.

Dalton, Hugh

Kenyon, Barnet

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

Davies, Evan (Ebbw Vale)

Lansbury, George

Thomson, Trevelyan (Middlesbro., W.)

Day, Colonel Harry

Lawrence, Susan

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

Dennison, R.

Lee, F.

Thorne, W. (West Ham, Plaistow)

Edwards, J. Hugh (Accrington)

Lowth, T.

Thurtle, E.

Evans, Capt. Ernest (Welsh Univer.)

Lunn, William

Tinker, John Joseph

Forrest, W.

MacDonald, Rt. Hon. J. R.(Aberavon)

Townend, A. E.

Gardner, J. P.

Mackinder, W.

Viant, S. P.

Gillett, George M.

Maclean, Nell (Glasgow, Govan)

Westwood, J.

Gosling, Harry

Montague, Frederick

Wheatley, Rt. Hon. J.

Graham, Rt. Hon. Wm. (Edin., Cent.)

Morris, R. H.

Whiteley, W.

Greanall, T.

Morrison, R. C. (Tottenham, N.)

Williams, C. P. (Denbigh, Wrexham)

Greenwood, A. (Nelson and Colne)

Naylor, T. E.

Williams, David (Swansea, East)

Grenfell, D. R. (Glamorgan)

Oliver, George Harold

Williams, Dr. J. H. (Llanelly)

Griffiths, T. (Monmouth, Pontypool)

Pethick-Lawrence, F. W.

Wilson, C. H. (Sheffield, Attercliffe)

Groves, T.

Ponsonby, Arthur

Wilson, R. J. (Jarrow)

Grundy, T. W.

Potts, John S.

Windsor, Walter

Guest, Haden (Southwark, N.)

Rees, Sir Beddoe

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

Richardson, R. (Houghton-le-Spring)

TELLERS FOR THE NOES. ——

Hall, G. H. (Merthyr Tydvil)

Riley, Ben

Mr. Allen Parkinson and Mr. Charles Edwards.

Motion made, and Question put: "That the Clause stand part of the Bill."

The Committee divided: Ayes, 263; Noes, 114.

Division No. 280.]

AYES.

5.15 p.m.

Acland-Troyte, Lieut.-Colonel

Barnston, Major Sir Harry

Brass, Captain W.

Albery, Irving James

Bellairs, Commander Carlyon W.

Bridgcman. Rt. Hon. William Clive

Alexander, E. E. (Leyton)

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

Briscoe, Richard George

Alexander, Sir Wm. (Glasgow, Cent'l)

Bennett, A. J.

Brocklebank, C. E. R.

Applin, Colonel R. V. K.

Betterton, Henry B.

Brooke, Brigadier-General C. R. I.

Ashley, Lt.-Col. Rt. Hon. Wilfrid W.

Bird, E. R. (Yorks, W. R., Skipton)

Broun-Lindsay, Major H.

Atkinson, C.

Bird, Sir R. B. (Wolverhampton, W.)

Brown, Maj. D. C. (N'th'l'd., Hexham)

Baldwin, Rt. Hon. Stanley

Blundell, F. M.

Brown, Brig.-Gen. H.C. (Berks, Newb'y)

Balfour, George (Hampstead)

Boothby. R. J. G.

Buckingham, Sir H.

Balniel, Lord

Bourne, Captain Robert Croft

Bullock, Captain M.

Barclay-Harvey, C. M.

Bowater, Sir T. Vansittart

Burman, J. B.

Barnett, Major Sir Richard

Braithwaite, A. N.

Burton, Colonel H. W.

Butler, Sir Geoffrey

Henn, Sir Sydney H.

Pielou, D. p.

Cadogan, Major Hon. Edward

Hennessy, Major J. R. G.

Pilcher, G.

Caine, Gordon Hall

Herbert, S. (York, N. R., Scar. & Wh'by)

Power, Sir John Cecil

Cautley, Sir Henry S.

Hoare, Lt.-Col. Rt. Hon. Sir S J. G.

Preston, William

Cayzer, Maj. Sir Herbt. R. (Prtsmth. S.)

Hogg, Rt. Hon. Sir D. (St. Marylebone)

Price, Major C. W. M.

Cecil, Rt. Hon. Sir Evelyn (Aston)

Hohler, Sir Gerald Fitzroy

Ramsden, E.

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

Holland, Sir Arthur

Rawson, Sir Alfred Cooper

Chamberlain, Rt. Hon. N. (Ladywood)

Holt, Capt. H. P.

Reid, Capt. A. S. C. (Warrington)

Chapman, Sir S.

Hope, Capt. A. O. J. (Warw'k, Nun.)

Reid, D. D. (County Down)

Charteris, Brigadier-General J.

Hope, Sir Harry (Forfar)

Remer, J. R.

Christie, J. A.

Hopkins, J. W. W.

Remnant, Sir James

Churchill, Rt. Hon. Winston Spencer

Hopkinson, Sir A. (Eng. Universities)

Rentoul, G. S.

Churchman, Sir Arthur C.

Hopkinson. A. (Lancaster, Mossley)

Rice, Sir Frederick

Clarry, Reginald George

Horlick, Lieut.-Colonel J. N.

Richardson, Sir P. W. (Sur'y, Ch'ts'y)

Clayton, G. C.

Home, Rt. Hon. Sir Robert S.

Ropner, Major L.

Cobb, Sir Cyril

Howard, Captain Hon. Donald

Ruggles-Brise, Major E. A.

Cochrane, Commander Hon. A. D.

Hudson, Capt. A. U. M. (Hackney. N.)

Russell, Alexander West (Tynemouth)

Colfox, Major Wm. Phillips

Hudson, R. S. (Cumberl'nd, Whiteh'n)

Salmon, Major I.

Conway, Sir W. Martin

Huntingfield, Lord

Samuel, A. M. (Surrey, Farnham)

Cooper, A. Duff

Hurd, Percy A.

Samuel, Samuel (W'dsworth, Putney,)

Cope. Major William

Hurst, Gerald B.

Sandeman, A. Stewart

Couper, J. B

Hutchison, G. A. Clark (Midl'n & P'bl's)

Sanders, Sir Robert A.

Courtauld, Major J. S.

Iliffe, Sir Edward M.

Sandon, Lord

Courthope, Lieut-Col. Sir George L.

Inskip, Sir Thomas Walker H.

Sassoon, Sir Philip Albert Gustave D.

Craik, Rt. Hon. Sir Henry

Jackson, Lieut.-Col. Rt. Hon. F. S.

Savery, S. S.

Croft, Brigadier-General Sir H.

Jackson, Sir H. (Wandsworth, Cen'l)

Shaw, Lt.-Col. A. D. Mel. (Renfrew, W.)

Crookshank, Col. C. de W. (Berwick)

Jacob, A. E.

Shaw, Capt. W. W. (Wilts, Westb'y)

Crookshank, Cpt. H.(Lindsey, Gainsbro)

Jephcott, A. R.

Shepperson, E. W.

Dalkeith, Earl of

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

Sinclair, Col. T. (Queen's Univ. Belfst)

Dalziel, Sir Davison

Joynson-Hicks, Rt. Hon. Sir William

Slaney, Major P. Kenyon

Davidson, J.(Hertf'd, Hemel Hempst'd)

Kindersley, Major G. M.

Smith, R. W. (Aberd'n & Kinc'dine.C.)

Davies, Dr. Vernon

King, Captain Henry Douglas

Somerville, A. A. (Windsor)

Davies, Sir Thomas (Cirencester)

Kinloch-Cooke, Sir Clement

Sprot, Sir Alexander

Davison, Sir W. H. (Kensington, S.)

Lamb, J. Q.

Stanley, Col. Hon. G. F. (Will'sden, E.)

Dawson, Sir Philip

Lister, Cunliffe-, Rt. Hon. Sir Philip

Stanley, Lord (Fylde)

Drewe, C.

Locker- Lampson, G. (Wood Green)

Stanley, Hon. O. F. G. (Westm'eland)

Edmondson, Major A. j.

Locker-Lampson, Com. O.(Handsw'th)

Steel, Major Samuel Strang

Elliot, Captain Walter E.

Loder, J. de V.

Stott, Lieut.-Colonel W. H.

Ellis, R. G.

Looker, Herbert William

Strickland, Sir Gerald

Elveden, Viscount

Luce, Major-Gen. Sir Richard Harman

Stuart, Hon. J. (Moray and Nairn)

Erskine, Lord (Somerset, Weston-s.-M.)

MacAndrew, Major Charles Glen

Styles, Captain H. Walter

Erskine, James Malcolm Monteith

Macdonald, Capt. P. D. (I. of W.)

Sueter, Rear-Admiral Murray Fraser

Evans, Captain A. (Cardiff, South)

McDonnell, Colonel Hon. Angus

Sykes, Major-Gen. Sir Frederick H.

Everard, W. Lindsay

Maclntyre, Ian

Tasker, Major R. I.

Falle, Sir Bertram G.

Macmillan, Captain H.

Thomson, F. C. (Aberdeen, South)

Fermoy, Lord

Macnaghten, Hon. Sir Malcolm

Thomson, Rt. Hon. Sir W. Mitchell-

Fielden, E. B.

McNeill, Rt. Hon. Ronald John

Tinne, J. A.

Finburgh, S.

Macquisten, F. A.

Titchfield, Major the Marquess of

Ford, Sir P. J.

Maitland. Sir Arthur D. Steel-

Tryon, Rt. Hon. George Clement

Forestier-Walker, Sir L.

Malone, Major P. B.

Vauahan-Morgan, Col. K. P.

Foster, sir Harry S.

Manningham-Buller, Sir Mervyn

Wallace, Captain D. E.

Fraser, Captain Ian

Margesson, Captain D.

Ward, Lt.-Col. A. L. (Kingston-on-Hull)

Fremantle, Lt.-Col. Francis E.

Marriott, Sir J. A. R.

Warner, Brigadier-General W. W.

Gadie, Lieut. -Col. Anthony

Mason, Lieut.-Col. Glyn K.

Waterhouse, Captain Charles

Ganzoni, Sir John

Meller, R. J.

Watson, Rt. Hon. W. (Carlisle)

Gates, Percy

Meyer, Sir Frank

Wells, S. R.

Gault, Lieut. -Col. Andrew Hamilton

Mitchell, W. Foot (Saffron Walden)

Wheler, Major Sir Granville C. H.

Gibbs, Col. Rt. Hon. George Abraham

Mitchell, Sir W. Lane (Streatham)

Williams, A. M. (Cornwall, Northern)

Gilmour, Colonel Rt. Hon. Sir John

Monsell, Eyres, Com. Rt. Hon. B. M.

Williams, Herbert G. (Reading)

Goff, Sir Park

Moore, Lieut.-Colonel T. C. R. (Ayr)

Wilson, Sir C. H. (Leeds, Central)

Gower, Sir Robert

Moore, Sir Newton J.

Wilson, M. J. (York, N. R., Richm'd)

Grant, J. A.

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

Wilson, R. R. (Stafford, Lichfield)

Grattan-Doyle, Sir N.

Morrison, H. (Wilts, Salisbury)

Winby, Colonel L. P.

Grotrian, H. Brent

Morrison-Bell, Sir Arthur Clive

Winterton. Rt. Hon. Earl

Gunston, Captain D. W.

Murchison, C. K.

Wise, Sir Fredric

Hacking, Captain Douglas H.

Nall, Lieut.-Colonel Sir Joseph

Withers, John James

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

Nelson, Sir Frank

Wolmer, Viscount

Hall, Capt. W. D'A. (Brecon & Rad.)

Newton, Sir D. G. C. (Cambridge)

Womersley, W. J.

Hammersley, S. S.

Nicholson, Col. Rt. Hn. W. G. (Ptrsf'ld.)

Wood, E. (Chest'r, Stalyb'ge & Hyde)

Hanbury, C.

Nield, Rt. Hon. Sir Herbert

Wood, Sir Kingsley (Woolwich, W.)

Hannon, Patrick Joseph Henry

Nuttall, Ellis

Wood, Sir S. Hill-(High Peak)

Harmsworth, Hon. E. C. (Kent)

Penny, Frederick George

Woodcock, Colonel H. C.

Hartington, Marquess of

Percy, Lord Eustace (Hastings)

Worthington-Evans, at. Hon. Sir L.

Harvey, G. (Lambeth, Kennington)

Perkins, Colonel E. K.

Harvey, Major S. E. (Devon, Totnes)

Perring, Sir William George

TELLERS FOR THE AYES. ——

Headlam, Lieut.-Colonel C. M.

Peto, Basil E. (Devon, Barnstaple)

Captain Viscount Curzon and Captain Bowyer.

Henderson, Lieut.-Col. V. L. (Bootle)

Peto, G. (Somerset, Frome)

NOES.

Alexander, A. V. (Sheffield, Hillsbro')

Barker, G. (Monmouth, Abertillery)

Beckett, John (Gateshead)

Ammon, Charles George

Barnes, A.

Benn, Captain Wedgwood (Leith)

Astor, Viscountess

Barr, J.

Broad, F. A.

Attlee, Clement Richard

Batey, Joseph

Bromfield, William

Bromley, J.

Hirst, W. (Bradford, South)

Scurr, John

Brown, James (Ayr and Bute)

Hore-Belisha, Leslie

Shaw, Rt. Hon. Thomas (Preston)

Buxton, Rt. Hon. Noel

Hudson, J. H. (Huddersfield)

Shepherd, Arthur Lewis

Cluse, W. S.

Jenkins, W. (Glamorgan, Neath)

Short, Alfred (Wednesbury)

Clynes, Rt. Hon. John R.

John, William (Rhondda, West)

Sinclair, Major Sir A. (Caithness)

Connolly, M.

Johnston, Thomas (Dundee)

Sitch, Charles H.

Cove, W. G.

Jones, Morgan (Caerphilly)

Slesser, Sir Henry H.

Dalton, Hugh

Jones, T. I. Mardy (Pontypridd)

Smith, Ben (Bermondsey, Rotherhithe)

Davies, Evan (Ebbw Vale)

Kennedy, T.

Smith, H. B. Lees- (Keighley)

Day, Colonel Harry

Kenworthy, Lt.-Com. Hon. Joseph M.

Smith, Rennie (Penistone)

Dennison, R.

Kenyon, Barnet

Snell, Harry

Dunnlco, H.

Lansbury, George

Snowden, Rt. Hon. Philip

Edwards, J. Hugh (Accrington)

Lawrence, Susan

Spencer, G. A. (Broxtowe)

Evans, Capt. Ernest (Welsh Univer.)

Lee, F.

Spoor, Rt. Hon. Benjamin Charles

Forrest, W.

Lowth, T.

Stamford, T. W.

Gardner, J. P.

Lunn, William

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

Gillett, George M.

MacDonald, Rt. Hon. J. R. (Aberavon)

Thomson, Trevelyan (Middlesbro. W.)

Gosling, Harry

Macdonald, Sir Murdoch (Inverness)

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

Greenall, T.

Mackinder, W.

Thorne, W. (West Ham, Plaistow)

Greenwood, A. (Nelson and Colne)

Maclean, Neil (Glasgow, Govan)

Thurtle, E.

Grenfell, D. R. (Glamorgan)

Montague, Frederick

Tinker, John Joseph

Griffiths, T. (Monmouth, Pontypool)

Morris, R. H.

Townend, A. E.

Groves, T.

Morrison, R. C. (Tottenham, N.)

Viant, S. P.

Grundy, T. W.

Naylor, T. E.

Westwood, J.

Guest, Haden (Southwark, N.)

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

Wheatley, Rt. Hon. J.

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

Oliver, George Harold

Whiteley, W.

Hall, G. H. (Merthyr Tydvil)

Pethick-Lawrence, F. W.

Williams, C. P. (Denbigh, Wrexham)

Hamilton, Sir R. (Orkney & Shetland)

Ponsonby, Arthur

Williams, David (Swansea, East)

Hardle, George D.

Potts, John S.

Williams, Dr. J. H. (Llanelly)

Hartshorn, Rt. Hon. Vernon

Rees, Sir Beddoe

Wilson, C. H. (Sheffield, Attercliffe)

Hayday, Arthur

Richardson, R. (Houghton-le-Spring)

Wilson, R. J. (Jarrow)

Hayes, John Henry

Riley, Ben

Windsor, Walter

Henderson, Rt. Hon. A. (Burnley)

Rose, Frank H.

Henderson, T. (Glasgow)

Salter, Dr. Alfred

TELLERS FOR THE NOES. ——

Hirst, G. H.

Scrymgeour, E.

Mr. Allen Parkinson and Mr. Charles Edwards.

Clause 16 ( Supplemental provisions as to betting duty ) ordered to stand part of the Bill.

CLAUSE 17.—(Penalties, disqualifications, etc.)

I beg to move, in page 13, line 5, to leave out Subsection (2).

The Motion which I am proposing is to leave out the Sub-section which provides that any person

My purpose in moving the Amendment is to call attention to the very drastic and, as we think, dangerous power which it is here sought to give to an officer, who is not necessarily a police constable, to arrest without any warrant at all any person doing either or both of these acts. There is a number of cases in which powers are conferred on police constables and, in certain cases, on other persons to arrest without warrant, but the old Common Law has always taken the view that, normally, in cases of misdemeanour or of suspected misdemeanour, a warrant should be obtained from the proper authority as a protection for the liberty of the individual. When we are creating a new revenue law, it is a grave matter to subject so large a class of persons to the very serious liability of being arrested without any warrant or authority at all except the suspicion of the officer in charge. If the Committee will look at the definition of officer which is contained in Clause 18, they will see that an officer is defined as: b ) of this Sub-section, fails to produce a bookmaker's certificate on being duly required in accordance with the provisions of any Regulations made under this Bill. The Regulations are not in the Bill itself, and at the time when we are asked to give this great power we do not know what those Regulations are going to be. It may well happen that a person who leaves his certificate at home by inadvertence may find himself arrested on a warrant by an over zealous officer who is not necessarily even an officer of Customs and Excise. I submit we ought to proceed with great care in encouraging what undoubtedly is a tendency in our present legislation to do away with the old common law protection of a warrant, and to increase the powers of individuals who are not even police constables to arrest without a warrant. In the Street Betting Act, 1906, dealing with offences which presumably are much more serious than merely failing to produce a bookmaker's certificate, power to arrest without a warrant is limited to a constable. Subsection (2) of Section I of that Act says:

I know it will be said that there are on the Statute Book already several laws which enable arrests to be made without warrant. Reference will probably be made to the Revenue Act, 1862, which enables constables and officials of the Inland Revenue to arrest people without warrant found selling cards contrary to the Revenue provisions; to the Pedlars Act, 1871; to the Hawkers Act, 1888; and to other Statutes dealing with pawnbrokers. The difference between those Acts and the present Measure is that in those cases people are to be arrested for specific offences against the Revenue, whereas here they are to be arrested for disobedience to uncertain Regulations which will not be made till this Bill becomes law. It is said that they will suffer enormously in their professional reputation as bookmakers, and even the Chancellor of the Exchequer has said that they occupy a certain position which will be seriously jeopardised. It is the tendency of modern bureaucratic legislation to invest in civil servants the right to use the power of imprisonment and arrest which our common law has always thought unwise to give to such people, and therefore, such a power should be very jealously watched. Whenever the power is being given to arrest anybody without a warrant, the House should always watch the matter very jealously. This is new legislation.

Let us go through with the rest of the provisions against breaches of this Regulation which are contained in this Act and then let us hear if the Chancellor of the Exchequer is able to satisfy the House that the absence of a warrant has made this legislation ineffective; then there will be a case for considering the point. We are dealing with an entirely new kind of legislation in a case where we have no reason to suppose that there will be any great attempt at evasion. Why not proceed, first of all, without these great powers, and see if there is any serious evasion, and then the Chancellor of the Exchequer can come again and ask for increased powers. I contend that these powers are not necessary and that they are not asked for with any real intention of strengthening the hands of the revenue officers, but as the result of a bad habit. The power to give people the right to arrest without warrant is something which grows by what it feeds upon. I therefore move that this unnecessary, illiberal and undesirable power be omitted from this Clause.

The hon. and learned Gentleman who has just sat down rather led the Committee to believe that in this Sub-section we were embarking upon a new and extremely dangerous inroad upon the fundamental liberties of the British Constitution.

The hon. and learned Gentleman's argument altered its course as his speech proceeded. In the first part of his speech he criticised very much an unnecessary departure from the regular and common practice of the criminal law of the country, and it was only when he had made that point with his customary clarity that he proceeded to give the answer to it by saying that he knew there were a certain number of revenue cases in which the power to arrest without warrant was permitted. The offence is one against the revenue, and the procedure for protecting the State against the Revenue offence is a common procedure which has been adopted in these cases. The hon. and learned Gentleman thought it right to safeguard this argument in that way, but I would like to point out that there are a great many precedents in reference to the power of arrest without warrant, and it has not been confined to police officers but has been extended to Revenue officers as well in the course of their duty in the collection of revenue.

I will give the Committee some instances. Section 146 (4) of the Spirits Act, 1880, enables an arrest without warrant for hawking spirits or for selling spirits without a licence. Sections 144 and 145 of the Spirits Act, 1880, confer the same power in regard to unlawfully removing spirits. This power was given by a Liberal Government under Mr. Gladstone in his palmy days after he had been returned by a large majority.

When I said it was "illiberal," I did not mean it had any connection with Liberalism.

I hope the hon. Member below the Gangway will recognise that he is only separated by the difference between a big and little "L." There are many precedents for this power of arrest without warrant both in Custom and in Excise Law. Take, for example, Section 116 of the Illicit Distillation (Scotland) Act, 1822, for engaging in illicit distillation. Then there is Section 25 of the Illicit Distillation (Ireland) Act, 1831, for unlawfully removing or carrying any spirits, still, still head or worm. There is also Section 179 of the Customs Consolidation Act, 1876, for crews of craft used for smuggling. Another instance is to be found in Section 186 of Customs Consolidation Act, 1876, for importing prohibited goods, for harbouring uncustomed goods, or for being concerned in fraudulent evasion of Customs Duties. The same power of arrest without warrant is provided in Section 190 of the Customs Consolidation Act, 1876, for signalling to smuggling vessels. The same power is provided for under the Gun Licence Act, 1870, for carrying a gun without a licence and refusing to furnish the name and address of the owner. There is also an instance provided by Section 6 (3) of the Hawkers Act, 1888, for hawking without having a proper licence in force or not immediately producing a proper licence on demand. A similar power of arrest is given under Section 13 of the Tobacco Act, 1842, for hawking tobacco or snuff. I think I have now indicated that we are not making any serious inroad by this proposal upon the long-established liberties of the subject. I should like to point out that this particular Sub-section in the Bill does not stand by itself, but it has to be read together with the context of the rest of the Measure.

Clause 15, Sub-section (3) of this Bill prescribes the conditions under which a revenue ticket is required, and when that position has been established then only can this particular Sub-section apply to such person who requires a revenue ticket. Supposing two or three persons are gathered together in a town or elsewhere making bets among each other, that does not require them to take out a certificate and they are not involved or affected by this legislation; but if a person in a town or elsewhere makes a practice of making a book and is definitely conducting the function of a bookmaker, he must protect himself by taking out a certificate and issuing a* revenue ticket, and it is only under such circumstances that he will come under this plan.

Is it clear that the words "any person" restrict the Clause to the class of persons which the right hon. Gentleman has just described?

I am advised that that is so. The revenue ticket is required for those who carry on the work of bookmaking. It is essential that the revenue should be safeguarded, and that the bookmaker should be protected from the kind of competition which is provided for in the Measure. I must say that the House for a long period of years, extending over the greater part of the nineteenth century, has conferred the power of arrest without warrant upon Customs officers or constables, and in nine cases out of 10 it would be the Customs officer who would normally exercise the power. Therefore, I do not see why anyone should at the present time resist a proposal supplying the same well-understood and long-decided procedure to people with sufficient credit and means to be in a position to make a book and to encourage people to resort to them in order to bet, or why these people should not be subjected to the same reasonable measure of summary control which the House has applied in similar cases in the past.

The only comment I should like to make on the right hon. Gentleman's speech is that he does not appear to me to have addressed himself to the real issue. The point really is, Is the revenue going to suffer if the right hon. Gentleman foregoes these powers? It is no use saying that there are many precedents. There are many precedents for arrest without warrant, but the right hon. Gentleman must show, if he extends a thing which in itself is objectionable, that he is compelled to do so by the need for securing revenue, and he has not attempted to show that. He never addressed himself to the real issue, that he would lose revenue unless he had this power. If he can prove that, I think the case is altered, but otherwise I shall vote for the Amendment.

It is not only the Revenue that is affected. Obviously, racecourse betting will be largely affected. If people cannot be arrested if they are found making books all over the racecourse, it will affect the Revenue, and the same is true of credit betting, where people will make books on a large scale unless some means of checking it are provided. The Revenue has its rights, and the House must protect them, but, in addition, there is the question of ordinary justice to people who are paying the tax, who are applying for certificates and conforming to the Regulations. They have the right to be protected against the unfair competition of people who illegally and improperly escape their liability by carrying on their business in some roundabout way. Although the Revenue is certainly involved, there is also the question of fair treatment of those bookmakers who wish to obey the law—as the overwhelming majority will—and pay the dues which are required of them.

I must confess that I am at a great disadvantage as compared with my right hon. Friend, because, unlike him, I am colossally ignorant of the machinery of betting; but I confess also that I am not entirely impressed by the list of authorities and precedents which he

has just quoted to the Committee. It is perfectly true that this principle, to which the hon. and learned Member for South East Leeds (Sir H. Slesser) takes exception, has been admitted in respect of offences which are very well known and very familiar. Not for the last 10 years, not even for the last 20 years, but for a much longer period, these offences, to which my right hon. Friend made allusion, have been notorious and well-established offences against the revenue laws of this country, but I do think there is some substance in the point raised by the hon. and learned Gentleman opposite, that you are here, by this Bill, creating a new class of offence—you are, not only introducing the taxation of betting, but you are making certain acts in connection with it offences against the criminal law. That being so, I think it is not wholly unreasonable that those who are to become subject to this law should have due notice in regard to its operation. I quite agree with the hon. and learned Gentleman opposite that, if it be found, in the course of the next 12 months or so, that these offences cannot be checked without the powers for which the Chancellor of the Exchequer is asking in this Clause, I, for one, should be perfectly prepared then to give him the powers which he seeks. But I am a little uneasy—it may be said that it is constitutional pedantry on my part—I do not at all like the idea of infringing the liberty of subjects, by a provision such as this which it is sought to insert in this Bill. I should have thought it would have been not unreasonable at any rate during the initial period of the operation of this new law to require the issue of a warrant before arrest. I do not know whether the hon. and learned Gentleman is going to press this matter to a Division, but, speaking for myself, I am glad that, on behalf of a very well-established principle of law, the protest has been made.

Question put, "That Sub-section (2) stand part of the Clause.'

The Committee divided: Ayes, 265; Noes, 114.

Division No. 281.]

AYES.

[5.50 p.m.

Acland-Troyte, Lieut.-Colonel

Applin, Colonel R. V. K.

Balniel, Lord

Agg-Gardner, Rt. Hon. Sir James T.

Ashley, Lt.-Col. Rt. Hon. Wilfrid W.

Barclay-Harvey, C. M.

Albery, Irving James

Atkinson, C.

Barnett, Major Sir Richard

Alexander, E. E. (Leyton)

Baldwin, Rt. Hon. Stanley

Barnston, Major Sir Harry

Alexander, Sir Wm. (Glasgow, Cent'l)

Balfour, George (Hampstead)

Bellairs, Commander Carlyon W.

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

Grenfell, Edward C. (City of London)

Nuttall, Ellis

Bentinck, Lord Henry Cavendish.

Grotrian, H. Brent

O'Neill, Major Rt. Hon. Hugh

Betterton, Henry B.

Gunston, Captain D. W.

Penny, Frederick George

Bird, E. R. (Yorks, W. R., Skipton)

Hacking, Captain Douglas H.

Percy, Lord Eustace (Hastings)

Bird, Sir R. B. (Wolverhampton, W.)

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

Perkins, Colonel E. K.

Blundell, F. N.

Hall, Capt. W. D'A. (Brecon & Rad.)

Perring, Sir William George

Boothby, R. J. G.

Hammersley, S. S.

Peto, Basil E. (Devon, Barnstaple)

Bourne, Captain Robert Croft

Hanbury, C.

Peto, G. (Somerset, Frome)

Bowater, Sir T. Vansittart

Hannon, Patrick Joseph Henry

Pielou, D. p.

Brass, Captain W.

Harmsworth, Hon. E. C. (Kent)

Power, Sir John Cecil

Brassey, sir Leonard

Hartington, Marquess of

Preston, William

Bridgeman, Rt. Hon. William Clive

Harvey, G. (Lambeth, Kennington)

Price, Major C. W. M.

Briscoe, Richard George

Harvey, Major S. E. (Devon, Totnes)

Ramsden, E.

Brocklebank, C. E. R.

Headlam, Lieut.-Colonel C. M.

Rawson, Sir Alfred Cooper

Brooke, Brigadier-General C. R. I.

Henderson, Lieut.-Col. V. L. (Bootle)

Reid, Capt. A. S. C. (Warrington)

Broun-Lindsay, Major H.

Henn, Sir Sydney H.

Reid, D. D. (County Down)

Brown, Maj. D. C. (N'th 'l'd., Hexham)

Herbert, S. (York, N.R., Scar. & Wh'by)

Remer, J. R.

Brown, Brig.-Gen. H.C. (Berks, Newb'y)

Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.

Remnant, Sir James

Buckingham, Sir H.

Hogg, Rt. Hon. Sir D.(St. Marylebone)

Rentoul, G. S.

Bullock, Captain M.

Hohler, Sir Gerald Fitzroy

Rice, Sir Frederick

Burman, J. B.

Holland, Sir Arthur

Richardson, Sir P. W. (Sur'y, Ch'ts'y)

Burton, Colonel H. W.

Holt, Captain H. P.

Ropner, Major L.

Butler, Sir Geoffrey

Hope, Capt. A. O. J. (Warw'k, Nun.)

Ruggles-Brise, Major E. A.

Caine, Gordon Hall

Hope, Sir Harry (Forfar)

Russell, Alexander West (Tynemouth)

Cassels, J. D.

Hopkins, J. W. W.

Rye, F. G.

Cautley, Sir Henry S.

Hopkinson, Sir A. (Eng. Universities)

Samuel, A. M. (Surrey, Farnham)

Cayzer, Ma). Sir Herbt. R. (Prtsmth. S.)

Horlick, Lieut-Colonel J. N.

Samuel, Samuel (W'dsworth, Putney)

Cazalet, Captain Victor A.

Home, Rt. Hon. Sir Robert S.

Sandeman, A. Stewart

Cecil, Rt. Hon. Sir Evelyn (Aston)

Howard. Captain Hon. Donald

Sanders, Sir Robert A.

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

Hudson, Capt. A. U. M. (Hackney, N.)

Sandon, Lord

Chamberlain, Rt. Hon. N. (Ladywood)

Hudson, R. S. (Cumberl'nd, Whiteh'n)

Sassoon, Sir Philip Albert Gustave D.

Chapman, Sir S.

Huntingfield, Lord

Savery, S. S.

Charteris, Brigadier-General J.

Hurd, Percy A.

Scott, Sir Leslie (Liverp'l, Exchange)

Christie, J. A.

Hurst, Gerald B.

Shaw, R. G. (Yorks, W.R., Sowerby)

Churchman, Sir Arthur C.

Hutchison, G. A. Clark (Midl'n & P'bl's)

Shaw, Lt.-Col. A. D. Mcl.(Renfrew, W.)

Clarry, Reginald George

Iliffe, Sir Edward M.

Shepperson, E. W.

Clayton, G. C.

Inskip, Sir Thomas Walker H.

Slaney, Major P. Kenyon

Cobb, Sir Cyril

Jackson, Lieut.-Col. Rt. Hon. F. S.

Smith, R. W. (Aberd'n & Kinc'dine, C.)

Cochrane, Commander Hon. A. D.

Jackson, Sir H. (Wandsworth, Cen'l)

Smithers, Waldron

Colfox, Major Wm. Phillips

Jacob, A. E.

Somerville, A. A. (Windsor)

Conway, Sir W. Martin

Jephcott, A. R.

Sprot, Sir Alexander

Cooper, A. Duff

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

Stanley, Col. Hon. G. f. (Will'sden, E.)

Cope, Major William

Joynson- Hicks, Rt. Hon. Sir William

Stanley, Lord (Fylde)

Couper, J. B.

Kindersley, Major Guy M.

Stanley, Hon. O. F. G. (Westm'eland)

Courtauld, Major J, S.

King, Captain Henry Douglas

Steel, Major Samuel Strang

Courthope, Lieut. -Col. Sir George L.

Kinloch-Cooke, Sir Clement

Stott, Lieut.-Colonel W. H.

Craik, Rt. Hon. Sir Henry

Lamb, J. Q.

Strickland, Sir Gerald

Croft, Brigadier-General Sir H.

Lister, Cunliffe-, Rt. Hon. Sir Philip

Stuart, Hon. J. (Moray and Nairn)

Crookshank, Col. C. de W. (Berwick)

Locker-Lampson, G. (Wood Green)

Styles, Captain H. Walter

Curzon, Captain Viscount

Locker-Lampson, Com. O. (Handsw'th)

Sueter, Rear-Admiral Murray Fraser

Dalkeith, Earl of

Loder, J. de V.

Sykes, Major-Gen. Sir Frederick H.

Dalziel, Sir Davison

Looker, Herbert William

Tasker, Major R. Inigo

Davidson, J.(Hertf'd, Hemel Hempst'd)

Luce, Major-Gen. Sir Richard Harman

Thompson, Luke (Sunderland)

Davidson, Major-General Sir John H.

Lynn, Sir R. J.

Thomson, F. C. (Aberdeen, South)

Davies, Dr. Vernon

MacAndrew, Major Charles Glen

Thomson, Rt. Hon. Sir W. Mitchell-

Davies, Sir Thomas (Cirencester)

Macdonald, Capt. P. D. (I. of W.)

Titchfield, Major the Marquess of

Davison, Sir W. H. (Kensington, S.)

McDonnell, Colonel Hon. Angus

Tryon, Rt. Hon. George Clement

Dawson, Sir Philip

MacIntyre, Ian

Vaughan-Morgan, Col. K. P.

Drewe, C.

McLean, Major A.

Wallace, Captain D. E.

Edmondson, Major A. J.

Macmillan, Captain H.

Ward, Lt.-Col. A. L.(Kingston-on-Hull)

Elliot, Captain Walter E.

Macnaghten, Hon. Sir Malcolm

Warner, Brigadier-General W. W.

Ellis, R. G.

McNeill, Rt. Hon. Ronald John

Waterhouse, Captain Charles

Elveden, Viscount

Macquisten, F. A.

Watson, Rt. Hon. W. (Carlisle)

Erskine, Lord (Somerset, Weston-s.-M.)

Malone, Major P. B.

Wells, S. R.

Erskine, James Malcolm Monteith

Manningham-Buller, Sir Mervyn

Wheler, Major Sir Granville C. H.

Evans, Captain A. (Cardiff, South)

Margesson, Capt. D.

Williams, A. M. (Cornwall, Northern)

Everard, W. Lindsay

Marriott, Sir J. A. R.

Williams, Herbert G. (Reading)

Fairfax, Captain J. G.

Mason, Lieut. -Colonel Glyn K.

Wilson, Sir C. H. (Leeds, Central)

Falle, Sir Bertram G.

Meller, R. J.

Wilson, M. J. (York, N. R., Richm'd)

Fermoy, Lord

Meyer, sir Frank

Wilson, R. R. (Stafford, Lichfield)

Fielden, E. B.

Mitchell, W. Foot (Saffron Walden)

Winby, Colonel L. P.

Ford, Sir P. J.

Mitchell, Sir W. Lane (Streatham)

Windsor-Clive, Lieut.-Colonel George

Forestier-Walker, Sir L.

Mond. Rt. Hon. Sir Alfred

Winterton, Rt. Hon. Earl

Foster, Sir Harry S.

Monsell, Eyres, Com. Rt. Hon. B. M.

Wise, Sir Fredric

Fraser, Captain Ian

Moore, Lieut.-Colonel T. C. R. (Ayr)

Withers, John James

Fremantle, Lieut. -Colonel Francis E.

Moore, Sir Newton J.

Wolmer, Viscount

Gadie, Lieut.-Col. Anthony

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

Womersley, W. J.

Ganzoni, Sir John

Morrison, H. (Wilts, Salisbury)

Wood, E. (Chest'r, Stalyb'dge & Hyde)

Gates, Percy

Morrison-Bell, Sir Arthur Clive

Wood, Sir Kingsley (Woolwich, W.).

Gault, Lieut. -Col. Andrew Hamilton

Murchison, C. K.

Woodcock, Colonel H. C.

Gibbs, Col. Rt. Hon. George Abraham

Nall, Lieut.-Colonel Sir Joseph

Gilmour, Lt.-Col. Rt. Hon. Sir John

Nelson, Sir Frank

TELLERS FOR THE AYES. ——

Grant, J. A.

Newton, Sir D. G. C. (Cambridge)

Major Hennessy and Captain Bowyer.

Grattan-Doyle, Sir N.

Nicholson, Col. Rt. Hn. W. G.(Ptrsf'ld.)

Greene, W. P. Crawford

Nield, Rt. Hon. Sir Herbert

NOES.

Alexander, A. V. (Sheffield, Hillsbro')

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

Rees, Sir Beddoe

Ammon, Charles George

Hall, G. H. (Merthyr Tydvil)

Richardson, R. (Houghton-le-Spring)

Attlee, Clement Richard

Hamilton, Sir R. (Orkney & Shetland)

Riley, Ben

Baker, J. (Wolverhampton, Bilston)

Hardle, George D.

Rose, Frank H.

Barker, G. (Monmouth, Abertillery)

Hartshorn, Rt Hon. Vernon

Salter, Dr. Alfred

Barnes, A.

Mayday, Arthur

Scurr, John

Barr, J.

Hayes, John Henry

Shaw, Rt. Hon. Thomas (Preston)

Batey, Joseph

Henderson, Rt. Hon. A. (Burnley)

Shepherd, Arthur Lewis

Beckett, John (Gateshead)

Henderson, T. (Glasgow)

Short, Alfred (Wednesbury)

Benn, Captain Wedgwood (Leith)

Hirst, G. H.

Sinclair, Major Sir A. (Caithness)

Broad, F. A.

Hirst, W. (Bradford, South)

Sitch, Charles H.

Bromfield, William

Hore-Bellsha, Leslie

Slesser, Sir Henry H.

Bromley, J.

Hudson, J. H. (Huddersfield)

Smith, H. B. Lees (Keighley)

Brown, James (Ayr and Bute)

Jenkins, W. (Glamorgan, Neath)

Smith, Rennie (Penistone)

Buxton, Rt. Hon. Noel

John, William (Rhondda, West)

Snell, Harry

Cluse, W. S.

Johnston, Thomas (Dundee)

Snowden, Rt. Hon. Philip

Clynes, Rt. Hon. John R.

Jones, Henry Haydn (Merioneth)

Spencer, George A. (Broxtowe)

Connolly, M.

Jones, Morgan (Caerphilly)

Spoor, Rt. Hon. Benjamin Charles

Cove, W. G.

Jones, T. I. Mardy (Pontypridd)

Stamford, T. W.

Dalton, Hugh

Kennedy, T.

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

Davies, Evan (Ebbw Vale)

Kenworthy, Lt.-Com. Hon. Joseph M.

Thomson, Trevelyan (Middlesbro. W.)

Day, Colonel Harry

Kenyon, Barnet

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

Dennison, R.

Lansbury, George

Thorne, W. (West Ham. Plaistow)

Duncan, C.

Lawrence, Susan

Thurtle, E.

Dunnico, H.

Lee. F.

Tinker, John Joseph

Edwards, J. Hugh (Accrington)

Lowth, T.

Townend, A. E.

Evans, Capt. Ernest (Welsh Univer.)

Lunn, William

Viant, S. P.

Forrest, W.

MacDonald, Rt. Hon. J. R. (Aberavon)

Westwood, J.

Gardner, J. p.

Mackinder, W.

Wheatley, Rt. Hon. J.

Gillett, George M.

Maclean, Neil (Glasgow, Govan)

Whiteley, W.

Gosling, Harry

Montague, Frederick

Williams, C. P. (Denbigh. Wrexham)

Graham, Rt. Hon. Wm. (Edin., Cent.)

Morris, R. H.

Williams, David (Swansea, East)

Greenall, T.

Morrison, R. C. (Tottenham, N.)

Williams, Dr. J. H. (Llanelly)

Greenwood, A. (Nelson and Colne)

Naylor, T. E.

Wilson, R. J. (Jarrow)

Grenfell, D. R. (Glamorgan)

Oliver, George Harold

Windsor, Walter

Griffiths, T. (Monmouth, Pontypool)

Parkinson, John Allen (Wigan)

Young, Robert (Lancaster, Newton)

Groves, T.

Pethick-Lawrence, F. W.

Grundy, T. W.

Ponsonby. Arthur

TELLERS FOR THE NOES. ——

Guest, Haden (Southwark, N.)

Potts, John S.

Mr. Charles Edwards and Mr. B. Smith.

Clause ordered to stand part of the Bill.

CLAUSE 18 (Interpretation and extent of Part II) ordered to stand part of the Bill

CLAUSE 19.—(Income Tax and Super-tax for 1926–27.)

The Amendment standing on the Order Paper in the name of the hon. and gallant Member for Leith (Captain W. Benn) and other hon. Members—in page 14, line 32, after the word "shillings," to insert the words

"except in the case of persons whose incomes do not exceed five hundred pounds per annum, whose standard rate of Income Tax shall be at the rate of three shillings"—

is out of place. It should come as a, new Clause.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

6.0 P.M.

On this Clause, which re-enacts all the Regulations and enactments relating to Super-tax and Income Tax for another year I want to call atten- tion to a matter which may be of advantage to the Treasury and convenience to the Super-tax payer. I refer to the question of prepayment of Super-tax under discount. Income Tax paid in advance of due date has been allowed to be paid under discount of 2½ per cent., and, although without the full force of law this has been extended to Super-tax, but because it has not been legally enacted, this provision has never been placed upon the Super-tax claim forms. Therefore the great body of Super-tax payers have not known that they have this right. I see the Noble Lord the Member for Shrewsbury (Viscount Sandon) asked a question last week of the Chancellor of the Exchequer:

These payments of Super-tax in many cases are very large and the Super-tax return is usually made in May or June, and it is quite possible that a Super-tax payer having funds at his disposal, say, at the commencement of July, would be perfectly willing to hand them over to the Treasury under a reasonable discount in anticipation of his liability on 1st January. Of course, all Super-tax is not paid on 1st January, and after 1st January, of course, there will be no discount.

The Treasury might well have been in possession of considerable sums, allowing for it only 1 per cent. less than the rate at which they were borrowing on temporary loans, and by granting this small allowance for six months they might have the benefit of the sums prepaid for at least eight, possibly nine months. I think it would certainly be a convenience and would save trouble to the Super-tax payer. At present, if he has funds at his disposal, say, in July, and does not want to part with them, as he will have to pay to the Special Commissioner on 1st January or soon after, he will deposit them at the bank. Why should not the Treasury occupy the position of the bank? Why on earth the Treasury should not take advantage of getting the money I cannot say. I wanted to put this point before the Financial Secretary because it is a pity to dismiss it as a trivial matter, because it has not been generally known and the discount offered has not been adequate. That being so, and as I believe there is really money in this for the Treasury and considerable convenience to the Super-tax as well, I hope before Report stage the right hon. Gentleman will see his way to put down the small Amendment which will be necessary, and instead of wiping off this possible source of profit to the Treasury, legalise the position.

I desire to call attention to a matter which I understand the Financial Secretary to the Treasury has been considering for some time. It is with reference to sums of Income Tax and Super-tax that escape taxation altogether, through bank deposits not being subject to taxation at the source. At the Royal Commission in 1920 an official witness from the Board of Inland Revenue estimated the losses as something between £5,000,000 and £10,000,000. There were other witnesses who declared that about £100,000,000 escaped during the war years and one witness suggested that £100,000,000 of income escaped assessment annually, but that figure was not at all accepted by the Commissioners. Whatever the figure may be, there is no doubt that large sums of money escape taxation every year. This fact has been within the knowledge of successive Governments since 1920. For six years nothing whatever has been done to close up the holes and I have suggested by questions during the past 12 months that one source through which a very considerable sum of money evades taxation is banking deposits, where the interest is not taxed at the source. In 1915 the Chancellor of the Exchequer of the day endeavoured to have these bank deposits taxed at the source, but because of objection taken to the form of his Motion by some hon. Members behind him he withdrew the proposal and said he would amend it and bring it forward in a revised form next day. The next day has not so far arrived. For 11 years there has been no attempt whatever to ensure that the owners of money on deposit in banks shall pay their just and due share of the national taxation.

I know there are technical difficulties even placed in the way of those who desire to pay their fair share of taxation. For example, if a man draws his interest, or has it added, even two days after 6th April, he has not to pay tax upon it in the succeeding year, but in the next year again, and even then only If the sum remains and has not been transferred or invested elsewhere. One can readily see, without being a financial expert, without knowing all the intricacies of this very difficult matter, and even allowing for the greatest possible honesty, these Regulations open up avenues toy which honest men can with a shrug of their shoulders evade paying their just share of taxation in so far as that taxation could be levied upon bank deposits. It seems to me there is no department of the business life of the country where Income Tax could be more easily levied than in the banks. You have skilled, capable men there who are used to dealing with accounts. These are the cases where taxation should be deducted at the source. For the life of me I cannot understand how it is that successive Governments tolerate the absence of any effective check on the taxation of bank deposits, and how they allow the banks year after year to pay out this interest and deduct no Income Tax when there is no check whatever on the sums paid in interest upon these deposits. I trust the Financial Secretary will see that the holders of these deposits are made to pay the taxation which Parliament decrees ought to be paid by every taker of unearned increment.

I also wish to deal with a matter of what is in effect evasion. It is evasion of Super-tax by the shareholders of companies. The matter has on many previous occasions had attention drawn to it and I believe the Chancellor of the Exchequer in succeeding years has devoted a good deal of thought to the question, and I am sorry that in the present Bill nothing is proposed to be done. The point I am referring to is the differential advantage which companies have over private firms in the matter of Super-tax. When a firm with partners makes a profit, it is deemed to be divided amongst the partners, who accordingly pay not only Income Tax through the firm but also Super-tax on those profits which are deemed to be divided among them. When you come to a company it is true it pays Income Tax not only upon the part which it divides among its shareholders as dividends, but also upon that part of its profits which it puts to reserve, but the part that it puts to reserve entirely escapes Super-tax.

The time was when this was realised and an attempt to equalise things between firms and companies was made by the imposition of a Corporation Tax. As the difficulties were great in imposing Super-tax upon shareholders of companies in respect of undivided profits, some set-off against that advantage which a company had over a firm was obtained by the imposition of a Corporation Tax. The Corporation Tax was obviously a very inequitable way of meeting that difficulty because it fell upon all the shareholders alike whether they were well to do or were men of poor means, and it fell upon all companies alike. It was found to be a very inadequate substitute for what it was intended to do, and it has, I think quite rightly, been repealed, and now no longer operates.

The original difference between companies and firms still remains, and it is increasing, owing to the form of evasion which it easily presents to those who want to escape the payment of Super-tax. Let me give one possible example. A company makes a profit of £100,000. It divides £70,000 in dividends and puts £30,000 to reserve. As far as the £70,000 paid in dividends to shareholders is concerned, Income Tax is deducted before it reaches them. In addition, the individual shareholders pay Super-tax on their quota of the £70,000, including it in their respective incomes. As far as the £30,000 is concerned which the company puts to reserve, that pays Income Tax, but it escapes Super-tax. It is that £30,000 put to reserve with which I am dealing.

I should like to draw attention to the very large extent of this escape from Super-tax. In one of the Reports of the Commissioners of Inland Revenue, I think it was the 64th Report in 1920–21, after accounting for something between £500,000,000 and £600,000,000 of income belonging to Super-tax payers, there was an item of £250,000,000 which had not been divided among individuals. In that Report it was stated that roughly two-thirds of the amount, or about £180,000,000, was accounted for by amounts put to reserve by companies. In that year, perhaps an exceptionally good year for companies, something like £180,000,000 escaped Super-tax.

Would all that be liable to Super-tax if it had been distributed? The bulk of it would not have been so liable.

The hon. Member is a little premature; I was going to deal with that point. The question arises how far that amount would be liable to Super-tax. The hon. Member for Reading (Mr. H. Williams) suggests that the bulk would not be liable. On reflection I think he will see that it is the other way round.

I think the hon. Member will see that, if that amount had been paid as dividend, it would have formed part of the income of the shareholders, and in this country industrial investments mainly belong to the payers of Super-tax.

That is undoubtedly the case. Now that Super-tax is fixed as payable by persons with an income of over £2,000, it will be found, if the hon. Member works it out, that the bulk of the investments in companies belong to the payers of Super-tax. I do not think the Financial Secretary to the Treasury will deny that.

The hon. Member can put forward his point against it later, but I do not think the Financial Secretary to the Treasury will deny that the great proportion of those investments are held by Super-tax payers.

The hon. Member challenges me. I have not given any attention to the point at the moment, and I am not in a position either to affirm or deny it.

I was not expecting to be challenged by the hon. Member opposite. However, the point is not material.

I cannot put an argument in figures from memory. The point is immaterial as far as my direct argument is concerned. My firm conviction is that the major part of in- vestments in companies belongs to Super-Tax payers. But in any case a considerable part of the £180,000,000 put to reserve escapes Super-Tax in this way. A practice has been growing up recently which brings this point more and more into question, because in putting the money to reserve, some companies are not content with leaving it as such to swell the value of the shares already held, but have taken to dividing it among the shareholders in some form of bonus. In some cases it takes the form of a bonus ordinary share, in others a bonus preference share, and it has sometimes taken the form of a bonus debenture. Whether it be an ordinary share, a preference share, or a debenture, it is a negotiable security, and can be sold. Some companies have gone further and made the debentures definitely redeemable in a certain number of years, and there is no reason why these debentures should not be redeemable at the end of one year, in which case the evasion by this method would become more and more plain because the company, wishing to spare its shareholders the payment of Super-tax on their dividends, has only to turn the larger part into reserve, and pay debentures, and make the debentures redeemable at the end of twelve months, or even a shorter period, and the shareholders have practically the same position as if the money had been divided direct in the form of dividends, and through this particular machinery they avoid payment of Super-tax.

No, I cannot give instances where debentures have been redeemable in one year, but I have shown that, whether they be redeemable in one year or not, they can be sold, and the shareholders can obtain the money. There has been springing up a practice recently of giving debentures, redeemable in a short number of years, and there is no reason why that principle, if not checked, should not be so extended as to become an absolute evasion. Whether the money be divided or not, I would like the Financial Secretary or the Chancellor of the Exchequer to tell us what is the attitude of the Treasury towards the whole of this question. It is clear that from the equitable point of view, a great deal of possible revenue does escape their meshes in this way. The hon. Member for Salford North (Mr. Radford) and other hon. Members opposite have an Amendment in the form of a new Clause—( Super-tax on undistributed Income of certain companies )—dealing to some extent with this matter, though from a slightly different aspect. I do not know whether that Clause will be in Order. I should like to know from the Financial Secretary or the Chancellor of the Exchequer whether that Clause will be accepted, or whether they have in mind some other way of meeting this difficulty.

It is not one set of persons who are affected: it does not merely affect advantageously those persons who evade taxation, but it is a disadvantage to other persons who have to pay. If the Chancellor of the Exchequer had set before him one definite amount that he wanted to raise by Super-tax, this would mean that other payers of Super-tax would be paying too much, because these particular people were escaping from paying. On the other hand, if the Chancellor fixes in his mind the rate of the Super-tax, then the evasion on this large part of the profits of a company is a burden upon the whole of the taxpayers of the country, and a very considerable burden.

Suppose for the sake of argument that the whole of this amount was liable to Super-tax in the same proportion as the £500,000,000. It would mean that as £180,000,000 of money has escaped it would be an additional one-third, which would bring in something like £20,000,000. It is true that the whole would not be liable to Super-tax, but hon. Members must remember that where a person is liable to Super-tax, this additional income will all pay at the highest rate which the person pays. Therefore, the addition of one-third to the income of the Super-tax payers would result in considerably more than one-third being added to the actual taxpayer. Making all allowances, I think it will be found that the extra tax that would be paid would be well over £10,000,000, and it would not be far short of £20,000,000. I hope we shall have from the Financial Secretary a state- ment of what is proposed to be done in the future to meet this evasion, which creates a burden upon other taxpayers. To repeat, it is the case of those who, in the ordinary course, or deliberately, evade a tax which would have to be paid in the case of a firm, but which is not paid in the case of the shareholders of a company.

The hon. Member asked me what we propose to do as to the new Clause which has been put down by some of my hon. Friends. I am sorry that I am not in a position to tell him exactly at the present time.

I allowed the discussion to go on, because it appears to me that that new Clause will be out of order, and will not come up for discussion. Therefore, I allowed the hon. Member to proceed with his argument.

In any event, I could not have given him any further information upon that point. Speaking generally in reply to what he has said, and it also applies to a certain extent to what was said by the hon. Member for Dundee (Mr. Johnston), both hon. Members have dealt with the question of evasion, and have given examples in which they think their ingenuity has enabled them to discover cases of serious evasion which are going on. I do not say that what I am going to say is a complete answer, but I will deal with the matter as far as I can. We can congratulate ourselves that we have far the most efficient collecting agents for taxation of any country in the world. Those who have been, even for a short time, in contact with the machinery of taxation in this country will agree with me—I am sure that the Chancellor of the Exchequer and the Financial Secretary to the Treasury in the Labour Government will agree with me—that on the whole, even if it can be proved that in one place or another a certain amount of evasion is successfully carried on, one must be surprised at the efficiency and completeness of the collection, having regard to the extraordinary complexity of Income Tax and the industry and property on which it is levied. On the whole, it is surprising that the evasion is not even greater than it is. I am afraid that whatever we do, however perfect we make the machinery—we may always hope to minimise evasion by adopting methods where we discover that evasion has taken place—we can never hope to arrive at such a complete method of collection that there will be no evasion at all.

A certain amount of evasion is unavoidable, and of course it follows that the evasion is likely to be greater in amount and more ingenious in its method in proportion to the weight of the burden of taxation imposed on the taxpayer. The very weight of taxation as it is at present, and has been since the War, stimulates, and necessarily Stimulates, all the ingenuity of the taxpayer, with his legal adviser, not to do anything which is illegal or which is necessarily a discredit to them, but to find out methods, such as the hon. Member has discovered in connection with company law, by which within the four corners of the law they can pay less taxation than it is intended perhaps they should pay.

I do not think it necessarily follows. It all depends on how it is done. There is nothing dishonourable in a man paying only what he is actually and legally liable to pay, and our ingenuity here as lawmakers ought to be to construct Acts of Parliament in such a way as will spread the net wide enough and not allow anybody through. I do not know of a Finance Act which has passed through this House in which some Clause or other is not devoted to the particular purpose of amending and altering the law in order to deal with some case which had been discovered. The hon. Member for Leicester West (Mr. Pethick-Lawrence) referred particularly to two distinct points. One was that the reserve fund of companies are not liable to Super-tax, and the other, and quite a different point, was that by certain methods of issuing bonus shares or debentures an evasion of Income Tax has been going on.

No, I recognise that companies pay Income Tax in every case, but by putting a large sum to the reserve, or by giving debentures or bonus shares, the shareholders may escape Super-tax.

I was about to say that when the hon. Member was challenged by the hon. Member below the Gangway to say whether he knew of a case in which this had been done, he said he did not know of any. I am able to support him. If it is legal to do this I do not see why, quite honourably, it may not be done under Company Law. To a certain extent it is being done, and it is causing some misgiving at the Treasury. We are very anxious to deal with it. But it is not always quite easy to see how it is to be done, and one of the difficulties in regard to this so-called method of evasion is that it is extremely difficult to construct a Clause which will be any better than the existing law or to devise perfect machinery for carrying it out. Therefore, we want two things. We want to have a full experience of the methods which are being employed, if anything in the nature of evasion is taking place, and then we want most careful consideration as to how it is to be dealt with in the Finance Bill of the year. I am not able to tell the hon. Member for Leicester that we are in a position to deal with the particular cases he has brought before the notice of the Committee. I can only say that we are perfectly alive to them. The speech he has made will be carefully considered and may be of some assistance to us, in which case I should like to express my acknowledgment to him; but I cannot give an undertaking that in this Bill we can devise the necessary machinery for stopping that particular hole.

The hon. Member for Dundee (Mr. Johnston) dealt with a different point. His chief point was the question of putting on a tax at the source on bank deposits. He could not imagine why that was not done. He did not mention the figure of £100,000,000 in that connection, because that, of course, would be to very much overstate the case. I should like to tell the hon. Member why it is that we do not resort to this particular way of taxing this source of income. The hon. Member seemed to think that in some way the Inland Revenue Department were not only very benevolent to the taxpayer, but that they often put difficulties in the way of the taxpayer who was willing to pay. That is certainly a view of the Inland Revenue Department which is not common in this country. They are usually, though very unfairly, regarded as the legitimate historical successors of the publicans and sinners who, a long time ago, were held to be responsible for everything that was bad. They are not open to censure on the ground of being unwilling to collect taxation. They show every possible zeal and an immense ability in tracing every source of income available. I do not think we should get more revenue by taxing bank deposits at the source. There may be exceptions, but the vast bulk of the deposits left at the banks are of very small amounts. If they were taxed at the source what would be the result? We should have innumerable claims at the Inland Revenue of people saying, "I am below the level of assessment for Income Tax. I have a deposit of £10 or £20, or whatever it may be, at my bank, and I have had so much deducted for Income Tax. Here is the certificate. I want repayment of the amount." I doubt very much, having regard to the extra cost of collection, to say nothing of the trouble and inconvenience that would be involved, whether in the end we should get a net addition to the present revenue.

Does not that difficulty also apply to every public company which is compelled now to deduct Income Tax at the source?

It does to a certain extent, and no doubt it causes a great deal of trouble and inconvenience to the Inland Revenue Department and also to the taxpayer, but that is no reason why we should extend a system of that sort into a source of revenue where we know we shall be met by the particular difficulty on a very much wider scale. I have no reason to suppose that there is any large amount of dishonesty or evasion on the part of those who have any bank deposits. They make a return, and although I cannot deny that this may be the source of a certain amount of evasion, which is unavoidable no matter what you do, I do not believe it is a large source of evasion or dishonesty or that any large amount of income is lost on account of it. I am sorry that both hon. Members opposite, in raising these points, have brought them forward on the question of the Clause standing part of the Bill, because I had no idea these particular points would be raised. If they had brought them before the Committee in the form of Amendments or new Clauses, assuming they would have been in order, I should have been able to give them a more satisfactory answer from their point of view. It is only from that point of view that I regret this, because I recognise they have raised substantial points which should be treated with careful and respectful attention. The only other point was that raised by the hon. Member for Barnstaple (Mr. B. Peto) on the question of anticipating the payment of Super-tax under discount. I cannot give him any reply at the moment. It is not a subject with which I pretend to be familiar, and it is clear it involves a very marked and serious change in the collection of the tax, but I think I can promise him that we will consider the point very carefully. If he wants a fuller answer and will raise the matter on Report stage, I hope to be able to give it.

My two hon. Friends behind me have undoubtedly raised points of very great importance in in regard to evasion of Income Tax and Super-tax, and, while we have listened with great attention to the Financial Secretary to the Treasury, it cannot be disputed that his reply has been on purely general lines. I have a great deal of sympathy with the Financial Secretary, because the two questions have been raised without notice, and necessarily without notice. It is well nigh impossible to put any Amendments on the Order Paper of the House raising an issue of this kind which do not increase or extend the charge, and consequently hon. Members are out of Order and are at a serious disadvantage in conducting a Debate. There is an opportunity on the question of the Clause standing part of the Bill for again recalling briefly one or two of the outstanding issues in this matter of evasion. The hon. Member for Dundee (Mr. Johnston) quoted the Report of the Royal Commission on Income Tax, and he made it perfectly plain that the £100,000,000, the amount which was believed to have been lost to the revenue of this country, was a sum which was spread over a period of four years and included Excess Profit Duty for the period immediately surrounding the War.

But the point before the Committee is this, that in the opinion of very well-informed people, submitted to the Royal Commission on Income Tax, we were losing between £5,000,000 and £10,000,000 a year by evasion. No doubt that sum would fall, according to some authorities, to be written down a little in the terms of present-day values. But I doubt that very much indeed. From all the investigations that some of us have made, I am satisfied that we are losing, at the very least, anything between £5,000,000 and £10,000,000 a year, and quite clearly that is a sum which ought to be obtained by the Revenue in justice to the taxpayers at large. The Financial Secretary has not really met the question before the Committee. I will not say anything on the point raised by the hon. Member for West Leicester (Mr. Pethick-Lawrence), because that is a separate issue, and there may be opportunities later of discussing the Super-tax problem. But, taking the point raised by my hon. Friend the Member for Dundee (Mr. Johnston), there was specific reference to treating the interest on bank deposits and accounts in the Report of the Royal Commission on Income Tax.

What in effect did that Royal Commission say? It made a specific recommendation that there should be the right to call upon the banks to state whether an account was in fact held at the bank at all. That is the plain and specific recommendation. Witnesses urged, if I remember aright, that there should be access to the bank accounts themselves for the purpose of getting at all the facts, but, of course, there was a great deal of objection to that course. People argue always that a bank account is a highly confidential document, and when it gets overdrawn it is even more confidential. That point was put, and eventually the Royal Commission confined itself to the proposal that if the parties did not put up the information to the assessing authorities, regarding the resources that they had, there might be recourse to the High Court or some other tribunal for the purpose of compulsory access to the bank accounts. But the Royal Commission also indicated that there was a very considerable amount of evasion in this way. That turned on the fact that a great deal of the interest added to the accounts was not in law annual interest and was not subject to the tax deduction. The Royal Commission therefore said that there should be agreement between the Inland Revenue authorities and the banks and kindred institutions for the purpose of working out some kind of scheme for dealing with this form of evasion.

As we have very often said from this side of the House, the things in the Royal Commission's Report which cost money or were in the nature of concession to the taxpayers, have very largely been applied, and most of them were necessary in the interests of small taxpayers, but that only to a limited extent has this House since 1919 applied the recommendations of the Commission which sought to improve the structure of Income Tax and to prevent evasion. Here is a Government with a vast majority, which walks into the Lobby behind any proposal which the Government chooses to put forward. There is no doubt that they would do so even if the Chancellor adopted this scheme. It is not a thing that can be done by a Government with a precarious majority, or by a minority Government, because there are sharp divisions of opinion. Here you have a matter in which, if the Government would make up its mind, it could deal with a situation of real importance. The Financial Secretary to the Treasury has not said a single word about this essential part of the Royal Commission's Report, and, accordingly, I think that my hon. Friend's complaint is well founded. It is of vital importance that the Committee should understand that in the absence of the adoption of these recommendations we are year by year losing anything between £5,000,000 and £10,000,000 in the aggregate, and a very substantial sum on the specific point which my hon. Friend has raised.

I want to raise one point in regard, not to the evasion, but to the imposition of Super-tax. Before passing to that, however, may I say one word in reference to the argument of my right hon. Friend the Financial Secretary in answer to the hon. Gentleman opposite who raised the question of bank deposits? I take it that my right hon. Friend's answer was in effect this: That if you carried out the recommendation which is apparently desired by the hon. Member for Dundee (Mr. Johnston), you would be deducting from a vast number of small deposit accounts Income Tax to which those deposit accounts were not liable. I understand that it is really a question of the balance of advantages to the Inland Revenue, as between the procedure which is at present adopted and that which is recommended by the hon. Member for Dundee. I do not want, and I should not be in order, to go into the controversial point, but for the purpose of illustration, may I cite this? I presume it is well known to the hon. Member for Dundee that the profits which are earned by co-operative societies, and which are liable to Income Tax, are not as a matter of fact subject to Income Tax deduction at the source. The co-operative societies are alone, or almost alone, as far as I know, in being permitted—I do not know whether by law or by arrangement with the local assessors and collectors of Income Tax—to adopt this course. Those who are liable to Income Tax, and who derive profits from co-operative societies, are of course compelled to make their own assessments in the ordinary way, but the tax is not, any more than Bank deposits, deducted at the source.

It seems to me that the argument which has been put forward by my right hon. Friend the Financial Secretary is exactly on all fours with the argument put forward by the officials of the cooperative societies. They say, in effect, that these profits belong in the main to very small people, and that it would not be worth while for the Inland Revenue to collect Income Tax on those very small profits, and that, therefore, they permit this arrangement to be made, throwing upon the individual taxpayer the responsibility of making his assessment of any profits which he may derive from cooperative societies. I am not entering on the broad question of whether or not co-operative societies should be subject to Income Tax. I am simply pointing out that as a fact on their invested funds co-operative societies are not compelled to deduct Income Tax, like other private companies and joint stock companies.

I rose, however, not for the purpose of making this reply to the hon. Member for Dundee, but rather to raise another point in connection with Super-tax. I do not want to anticipate what it may be proper to say on a later Clause with regard to the very important change which is introduced into this Finance Bill, by which profits under Schedule "D" will henceforth be computed, not on the three years' average, but on the income or profits of the year preceding assessment. It is a change which I very cordially welcome. The point which I want to make on this Motion is this: I very much regret that when the Chancellor of the Exchequer was introducing into the tax machinery of this country this considerable and important change, he did not carry the matter a stage further and go into the question of attempting to assimilate Super-tax to Income Tax altogether. It seems to me that the changes which we are to discuss under a later Clause ought to have been accompanied by other reforms in Income Tax procedure, which some of us think are long overdue. Among those I will mention only one—the unmeaning distinction between Super-tax and Income Tax. It is an enormous burden of trouble on the payers of Super-tax that they should be compelled to make their returns for Super-tax on one year and their returns for Income Tax on another. It is not only the inconvenience, it not only involves immense labour to the individual taxpayer, but in a not inconsiderable number of cases it involves actual loss to the taxpayer and illegitimate gain to the Exchequer.

The sort of case that I have in mind is this: When there is in any particular year the transference of an investment from one class of security to another—it may even be the transference of an investment from one category of war loan to another—such a transference may, and, as a matter of fact, does, involve the payment in one single year of two amounts of Income Tax from the same body of capital, although only one income has in the one year been derived from it. It is an acknowledged dilemma; it is well known to Income Tax and Super-tax officials, and I suspect it is very well known to the Financial Secretary. But from that dilemma, involving very gross injustice in some cases to the individual taxpayer, there can be, I am afraid, no means of escape, so long as the incomes from different classes of securities are assessable in different years. It seems to me that the proper remedy is plain—to have a single year of computation for income from all sources, and on that income to pay a single tax, whether it be termed Income Tax or Super-tax. The present method not only involves an injustice to the taxpayer, but I am certain that it tends to obscure from the man in the street the very large contributions to the revenue which are made by the richer taxpayers for the upkeep of the State. I very much hope that my right hon. Friend the Financial Secretary will represent to the Chancellor of the Exchequer the point which I am endeavouring to make.

7.0 P.M.

I remember in conjunction with my right hon. Friend who then sat for the City of London, making this point as strongly as I could when my right hon. Friend the Member for West Birmingham (Sir Austen Chamberlain) was at the Treasury as Chancellor of the Exchequer and he was good enough to admit, as far as I remember—I do not think he admitted it publicly, but he was good enough to admit it—that there was a substantial grievance to be remedied, and he was kind enough to summon one of the officials from the Super-tax Department to discuss the point with my right hon. Friend the then senior Member for the City of London and myself. I think it was admitted that there was a substantial grievance, but the only mitigation for that grievance which the officials could suggest to my right hon. Friend was this, that it was perfectly true that you might be subjected to this grievance as long as you lived but it would all come straight the year after your death. I confess that seemed to me to be only a very moderate measure of comfort to those of us who hoped to be alive for some little time to come. I hope I have made my point clear to the Financial Secretary to the Treasury, and I venture to ask he will continue to convey the sense of it, if he has grasped it, to the right hon. Gentleman the Chancellor of the Exchequer.

There is a subject quite different from either of those mentioned so far to which I want to draw the attention of the Committee and that is to express my regret that the Government have not seen their way, in proposing the re-imposition of the Income Tax and Super-tax charges, to make an alteration in the benefits which have been given to certain classes and to consider afresh the whole problem of the difference between the earned and unearned incomes which are liable to this taxation. In looking at the Amendment on the Paper, which I understand is out of order, but which stood in the name of the hon. and gallant Member for Leith (Captain W. Benn), I notice that he mentions incomes of £500. It does seem to me that when you look at the taxation which is imposed by the proposals now before the Committee upon incomes of £500, and when you compare what it involves in the case of a man who has no responsibility in the way of wife and children on the one hand—

I think I ought to say I only ruled the proposal out of place, and not out of order. The proposal can be made as a new Clause.

I understand that, at the moment at any rate, it is not coming on, but I only referred to it because it was in connection with that Amendment that I had been looking up some figures dealing with incomes of £500. A man with an earned income of £500 a year and a wife and two children, pays Income Tax amounting to £16 a year, but a man with unearned income of £500 and no wife or children pays £50. It seems to me, if extra taxation is needed, a man receiving £500 and having no work to do might surely bear heavier taxation. What is needed at present is to lighten the burden borne by the man with family responsibilities.

If you look at the Annual Return of the Commissioners of Inland Revenue and take the figure which is the lowest one mentioned there, namely, incomes of £2,000, and if you compare the man who is earning it with the man who has a fortune which brings him in £2,000—taking the responsibilities in this case of a man who has a wife and three children—you find the first man pays £309 a year and the man who is receiving this income from investments pays only £354. Many a man has made his way and risen to a position where he is earning £2,000 a year, but he has a very small amount of capital. He may be a man in the professions, a legal man or a doctor, and he may have a wife and three children to support. Many of them are educating their children. Under the present system it is practically impossible for the children of the poorer classes to rise to the position of a doctor or other professional man. [An HON. MEMBER: "No, there are any number!"] It is practically impossible, and I venture to assert that it will be found to a large extent that is so. The men who enter the professions come from what is termed the middle class. Eight out of 10 come from that class. I am not condemning the system, but only pointing it out and saying how absurd it seems to me that the abatement of taxation is made so exceedingly light in the one case as compared with the other.

If a man who has an invested income of £2,000 dies, most of it goes to his family. In the other case I have mentioned there is nothing to prove he has even any investments at all, and he has to make provision for his wife and children. Under the present scheme we only make an allowance of £50 between those two men, and it does seem to me that the whole of our present system wants to be revised. If we are going to have taxation of this kind and a difference in regard to income and so forth, I think a far larger share could be thrown on to those people who are fortunate enough to have invested incomes, such as the amounts which are given in this table rising from £2,000 a year up to many tens of thousands a year; and, if any relief is given, it ought to be given, beginning certainly at the lowest class, to those men making £400 or £500 a year, especially if they have a wife and have children attending schools.

If we turn to the case of the single person, with £2,000 a year, we find this man pays £349 a year. The fortunate possessor of investments bringing in £2,000 a year, which may have come from his father, is only charged £50 more than the man who has made his position and receives £2,000 a year. When you compare the figures with regard to earned and unearned income it is most unsatisfactory. When you look at the exceedingly small allowance to those who have children to educate the position is even worse, because, after all, the allowance that is made at present—the figure for the first child is £36 and £27 for each subsequent child—is exceedingly small; and in granting the enormous relief from this kind of taxation which has been granted in the last few years—something like £125,000,000 less is being received to-day than would have been received if the taxation had been left at the higher figure at which it used to stand—and in making these allowances I cannot think why the Government have not seen that the present figures are inequitable as between the man with the large investments and the man who is making his money in the business world, and also as between the single man and the man who has large family responsibilities. The whole question of Income Tax and Super-tax and its relationship to the great masses of workers is another problem that I do not wish to touch upon at this moment, but it does seem to me, looking at the way in which the charges are made—and I think the allowances ought to be made on a different footing—that they are exceedingly unsatisfactory. I do regret that the Government have not had any proposals to make which would alter the system of abatements and the difference between these two classes of taxpayers to which I have referred.

I am sorry that the hon. Gentleman who has just spoken did not examine the documents from which he was reading more carefully. I presume he was reading from page 105 of the Report of the Commissioner of His Majesty's Inland Revenue. He will see that the table he has quoted from, dealing with the financial year 1924–25, relates to the position as it was left by the Budget introduced by the right hon. Gentleman the Member for Colne Valley (Mr. Snowden). If the hon. Member will examine last year's financial statement which was issued at the time of last year's Budget, he will find that certain changes were made. The abatements in respect to earned incomes was increased from one-tenth to one-sixth, and the tables he has been quoting from are two years old. If he will get last year's tables he will find the exact position. I think there is something in his case, but the real case is not the one he has made out. The reason I got up was to deal with the somewhat extraordinary statistics put forward by the hon. Member for West Leicester (Mr. Pethick-Lawrence), who told us that the Super-tax payers owned all the shares in the public companies.

I did not say that. I said the bulk of the investment were held by the Super-taxpayers.

Nobody precisely knows who owns what in this country, and we can only deduce these things in a somewhat roundabout way. By studying this same document, I find that, broadly speaking, one half of the income payable in this country is brought under review by the Inland Revenue Commissioner. The great bulk of the wage-earning incomes and small salaries are not brought under review at all. Something roughly about one-half is brought under review—a sum of about £2,300,000,000. Of that, about £1,350,000,000 is income derivable from land and capital, and the income of the Super-taxpayers is £500,000,000. Let us see what happens. We have got income from land and capital of £1,350,000,000 and the total income of the Super-taxpayer, if I may repeat it, is £500,000,000. If it be the case that these people, who between them have an income of £500,000,000, own the bulk of the shares of the industrial companies, then I am forced to the conclusion that the Super-taxpayers cannot own any land nor any houses nor any War Loan, nor any foreign securities of any kind whatsoever. The hon. Gentleman may be right, and I may be wrong in denouncing his statement. I interrupted him at the time, and I apologise for it. He may be right that the bulk of the shares in this case are held by Super-taxpayers. If he is right, then what I want to know is, who owns all these other things with an annual valuation of at least £850,000,000. I really think he ought to look at the statistics again. I did not want it to go forth from this House that the concentration of wealth was as the hon. Member represents it, because my own experience shows me there is a very wide distribution of shareholders. The old story upon which the party to which the hon. Member belongs has been built up of the rich getting richer and the poor getting poorer is undiluted nonsense. It was so, at the time when it was first quoted, and it is just as wrong now as it was then, and it is just as wrong as all the other tags of the Socialist party. They have done duty for 50 years; most of them are not true, and when they are cited here it is our duty to contradict them.

I should like to remind the Committee that the precise proportion of company shares held by Super-taxpayers is irrelevant to the main argument which I made. The point I was making was that this was a means by which Super-tax was legally evaded to a large amount, and it was very important that the Treasury should, look into the matter and see whether this could not be recovered.

But on the precise point on which the hon. Member for Reading (Mr. H. Williams) interrupted me and which he has since attempted to prove, I have here the 68th Report, and it so happens that the actual division of Income Tax and Super-tax payers according to their forms of income, is not shown in the Report. What is shown is the capital wealth of those persons who have died. The third column of the classification of assets on page 30 shows the amount of property held in the form of stocks and shares in joint stock companies by persons-possessed of various sums of total wealth at the time of death. The total amount of property left at death in this particular year and in that particular form of property was £151,000,000. Of that, persons who died worth over £40,000 held £84,000,000, and persons who died worth less than £40,000 held £67,000,000. I think it must be perfectly clear that persons who died worth over £40,000 would be Super-tax payers. A few might not be, but practically all would be, and thus people who are on the face of it Super-tax payers had £84,000,000 as. against £67,000,000 held by others who are not necessarily on the face of it Super-tax payers. But we must remember that many of those people who do not hold enough wealth to be on the face of it Super-tax payers are nevertheless so in fact. A great many people who have something less than £40,000 of property have in addition earned income which brings them into the category of Super-tax payers. Now the persons who died worth between £20,000 and £40,000 each held between them £20,000,000.

In view of the fact that £84,000,000 as against £67,000,000 is held by persons who must be Super-tax payers, and that there is £20,000,000 more held by persons, many of whom are Super-tax payers, and that even of the remainder some are Super-tax payers, I think my position is perfectly justified. [HON. MEMBERS: "Oh!"] Hon. Members may not be capable of following a perfectly clear argument, but to those who are capable of doing so, I say my contention is justified. I never claimed that the whole of these investments were held by Super-tax payers; I claimed that the bulk were so held, and I have shown that it considerably exceeds one half. Personally, I think it is probably about two-thirds, and that is quite sufficient to justify the statement I made and to cover the general line of argument which I adopted.

The hon. Gentleman has made a mistake which is only too common among people who draw all their conclusions on this subject from a study of what happens in the distribution of the wealth of those who die. One has always to remember that people who die and leave a great deal of wealth are, as a rule, elderly people, and that the distribution of wealth among the elderly, is entirely different from the distribution of wealth among the more active section of the population. That is where the hon. Gentleman, like many others who have written books on the subject, has gone astray.

Question, "That the Clause stand part of the Bill," put, and agreed to.

Clauses 20 ( Provision as to making of claims, etc., under proviso to Section 24 (1) of Finance Act, 1920), and 21 ( Provisions of Section 18 of Finance Act, 1925, to be permanent ) ordered to stand part of the Bill.

CLAUSE 22.—(Income Tax computed on profits of previous period to be charged though no profits in year of assessment.)

Motion made, and Question proposed, "That the Clause stand part of the Bill."

May I ask for some explanation of this Clause, which appears to be one of some importance? Unless I am mistaken, the Clause arises out of the recent case of Whelan v. Henning and I should like the Financial Secretary to the Treasury to give the Committee some information regarding it.

The right hon. Gentleman is quite right in saying that this Clause arises out of the case to which he referred. I do not know exactly what the right hon. Gentleman would like me to deal with in this Clause, but as the Committee probably is not familiar with that case, I will deal with it as shortly as possible. Where a tax is computed on the profits of the previous period, it is by this Clause to be charged, although in the year of assessment there are no profits. That was the point in the case to which the right hon. Gentleman has referred. Where there are no profits in the year of assessment, the party concerned, of course, gets the benefit of that in the following year, but in the year of assessment, if there happen to, be no profit, he shall not on that account be relieved from tax. This Clause covers rather more ground than was dealt with in the case before the House of Lords. It covers not only income from foreign investments, but also income from trades, professions and vocations, and also miscellaneous profits, such as profits from mines, railways, gasworks and so on, the profits of market gardeners, and so forth. It is necessary to make this Clause wider than would have been required merely to deal with the point raised in the case of Whelan v. Henning, because hitherto the practice and understanding of the law dealing with these larger classifications were quite settled.

If a case of this kind were again to come before the Courts, a Court might feel itself bound by analogy to follow the decision of the House of Lords, even though the case before them might not be strictly speaking on all fours with the case of Whelan v. Henning. The Court might feel that the analogy of that case required them to follow it in any case which might be brought before them, and in consequence this Clause is drawn so as to make clear the forms of income that are concerned. The person to whom this provision applies will not be able to claim relief under Rule 3 of the Miscellaneous Rules, on the ground that the absence of profit in the year of assessment is a specific cause giving him relief under that Rule. Therefore, the purpose of the Clause is really to clarify and simplify the law and to secure the Revenue in all cases of that class. It does not alter in any retrospective way the law as laid down by the House of Lords. But it provides that in future the Revenue shall be safeguarded against an extension of the principle of that decision over a much wider field.

The right hon. Gentleman has explained the object of this Clause, and if I understand him aright, its main object is simple enough, although the language employed is—perhaps necessarily—rather involved. I see my right hon. and learned Friend the Attorney-General by the side of the Financial Secretary, and I shall be glad to be reassured by him on one point. If I understand the argument correctly, broadly speaking, up to the present it has been a principle of Income Tax law that a man is not called upon to pay Income Tax in respect of his income from a given source, if in the year in question that source has dried up. Take the instance which first raised this trouble in the Law Courts. There are cases where a man's assessment of income in a given year is based on his profits drawn from a given source in the preceding year, and the consequence would therefore be—or might be—that in year 1, he had a particular source of income, say an investment in Treasury Bills, and he would not have to pay tax on it because his tax was assessed on his income of the previous year, and in the year 2, if at the critical moment he had got rid of the investment, he would not be taxed on it, because the source had dried up. Theoretically, therefore, he might be continually dodging in and out of the tax—though I admit that it is an extremely theoretical case. He might in the even years have no source of this kind and in the odd years have the investment. I quite agree that whatever the correct exposition of the Incom Tax law may be that is an absurd result, and I am not surprised that efforts should be made to prevent this and analogous cases from arising. But it is a very serious proposition that a man should pay Income Tax in a year when the source of his income has dried up, and I would like to be reassured by the Attorney-General as to whether this Clause may not have the effect of making a man pay Income Tax for more years than he has income.

Let me take an instance which appeals to most citizens, who have that painful interest in the Income Tax which consists in receiving assessments from time to time and wondering when they are going to pay. Take the case of the three years' average, as it has been hitherto. I know, of course, it is proposed to alter that, but for the present I will take four years, calling the years 1, 2, 3 and 4. Supposing a man at the beginning of year 1 starts in business or in a profession. In the first year, by a provision of the Income Tax Acts as they are now, he has to pay Income Tax, even in respect of his initial year. In year 2, he will pay a tax based on something which he earned in year 1. In year 3, he will pay Income Tax on the average of years 1 and 2. When you come to year 4, assuming he continues his business or profession, you get the ordinary three years' average operating and he is taxed on the average of years 1, 2 and 3, but he will only pay tax in those four years one after another if he has been carrying on his business for four years with greater or less success, and I should like to be quite sure whether this change that is proposed in this Clause could possibly have the result of calling upon people to pay Income Tax for more years than there has been a source of income. It is all very well to say that a man should not escape tax because the source has dried up, but that is not a reason for making him pay tax for four years when he has only had a particular income for three years. Possibly one of the right hon. Gentlemen opposite will make that point clear. I quite see the reason for making a change in the Income Tax law which does not relieve a man from the paying of tax for the purely technical reason that his source of income has dried up, especially if it is one of those cases of a source drying up intermittently and then coming on again, but I want to be quite certain that the change proposed is not a change which is going to expose the taxpayers—

I speak with some diffidence in a matter so complicated as this, but it appears to be dealt with in Clause 28, among the provisos.

I think it is in proviso (i) of Clause 28. It appears to be dealt with there.

I am sorry if I have delayed the Committee without cause, but assuming that that particular point is thoroughly safeguarded, the principle that a man should not escape tax in a given year merely because of the purely artificial circumstance of a source having dried up appears to me to be a principle with which probably the Committee will agree.

Perhaps I can reassure my right hon. and learned Friend the Member for Spen Valley (Sir J. Simon). I am familiar with his case of years 1, 2, 3, and 4 in another, place. Clause 22, as my right hon. and learned Friend well understands, is directed, not to cases in which a source has ceased to exist, but only to cases in which, in the year of assessment, while the source continues, the profits arising from that source happen to cease, and as you, Mr. Chairman, have pointed out, we have, in Clause 28, a provision as to what shall happen when the source itself ceases to belong to the taxpayer in the year of assessment. I think, therefore, the Committee may feel quite safe with the assurance that the only purpose of this Clause is to provide that where a source continues but the profit ceases in a given year, that fact shall not, in effect, let the taxpayer off twice over, namely, once in the year of assessment, because in that year he makes no profit, and again in the year after the year of assessment, because in that year he is assessed by reference to his profits in the preceding year.

Question, "That the Clause stand part of the Bill," put, and agreed to.

CLAUSE 23.—(Relief from double taxation in respect of British Income Tax and Irish Free State Income Tax.)

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Members of the Committee have only to look at these Clauses to realise their importance, and there is no doubt that this Clause 23, dealing with the question of double taxation between the Irish Free State and this country, is a matter to which the attention of the Committee should be directed. The Government have circulated in a White Paper the exact terms of this agreement, which has been the subject of negotiation for some time, but there are two questions that I should like to ask. First of all, I should like to ask the Government whether they have arrived at any exact estimate of the sacrifice of revenue under this Clause, and, secondly, what is to be the nature of the tribunal they propose to set up for dealing with cases in dispute. Hon. Members will know that in other times we have been trying to arrive at agreement, not only with countries within the British Empire, but also with foreign countries, in the matter of double Income Tax, and there has been agreement as regards shipping, with, I think, foreign countries and also now with the Dominions themselves. The Committee ought to know whether the agreement before us now is to be a kind of model for a general scheme for dealing with this problem of double Income Tax, not only within the Empire itself, but also as regards foreign countries, and the Government ought now to be in a position to say what sacrifice of revenue, if any, is going to fall upon Great Britain under arrangements of this kind. Of course, I entirely agree that there must be an arrangement of this nature if double Income Tax is to be avoided, but it so happens that in an entrepôt country like our own, many of us entertain fears that, on balance, we shall lose revenue.

I am trying to find out exactly what the figure is, in order to answer my right hon. Friend, but I must do so from memory. He asked whether the effect of the arrangement as between the two countries would impose any burden upon this country. I must give the figure from recollection, but I think I am not far wrong when I put it at £200,000. I think the loss to the British Exchequer on the arrangement as between the two countries is about £200,000.

The right hon. Gentleman has not said what kind of tribunal he proposes to set up under this arrangement to deal with the disputes. That is a matter of importance, because this relief from double Income Tax is, as he knows, capable of very wide expansion.

That is a matter, as the right hon. Gentleman will see in the agreement, to be arranged between the two Governments as the cases arise. It is stated in the agreement that the tribunal shall be such as the Governments may agree among themselves, so that they may arrange any form of arbitration. It might possibly be the Joint Exchequer Board, which, as the right hon. Gentleman knows, is the standing tribunal for dealing with financial matters as between the Irish Free State and this country, but if the Governments choose to have an ad hoc tribunal for the purpose, it is always open to them to do so.

Question, "That the Clause stand part of the Bill," put, and agreed to.

Clause" 24 ( Income Tax on dividends payable out of public revenue of Northern Ireland ) ordered to stand part of the Bill.

CLAUSE 25.—(Provisions in connection with appeals.)

The following Amendments stood on the Order Paper, the first in the name of Sir HENRY BUCKINGHAM and others, and the second in the name of Mr. H. WILLIAMS and another.

(1) In page 17, line 16, to leave out the words "grounds of the appeal," and to insert instead thereof the words

"general grounds of the appeal without prejudice to the raising of further points upon the hearing of the appeal."

(2) In page 17, line 16, at end, to insert the words

"but nothing in this Section shall prevent additional grounds of appeal being taken into consideration by the Commissioners if advanced by or on behalf of the appellant before or during the hearing of the appeal."

I think I owe an apology, or at any rate an explanation, to the Committee for having placed on the Order Paper so many Amendments dealing with this Clause and others to follow it, but I beg to assure the Committee that it is not done from any desire to be meticulous, contentious, or obstructive, but having paid some attention to the Clauses which follow this Clause, I am anxious, if I can, to do something to help my right hon. Friend the Chancellor of the Exchequer in this matter, and to enable him to effect the change he is proposing thoroughly and with due regard to justice to the taxpayer. The first Amendment standing in my name is an interesting one, and I am glad to think that the Chancellor of the Exchequer is prepared to accept it, or a very similar one. The object of this Clause is two-fold. One object is to secure a better method of obtaining payment on account of Income Tax, and the other is to make it statutory that Income Tax payers shall be obliged to specify the grounds of their appeal. I understand there have been a good many cases of Income Tax payers who have simply lodged an appeal in order to gain time, so that they would not have to pay their Income Tax as promptly as they would otherwise have to do, and, of course, I am sure that it is the desire of every Member of the Committee to prevent that sort of thing.

The only object of my Amendment is to prevent the Income Tax payers who have real cause for objecting to an assessment being prejudiced at the hearing of their case before the Income Tax Commissioners. As the Clause now reads, it might be argued that if any Income Tax payer has not specified the whole of the grounds of his appeal, he might be prevented from urging any other ground besides those mentioned at the hearing of the appeal. I understand that the Chancellor of the Exchequer considers the suggestion a reasonable one, and he has informed me that, if I will alter the words of my Amendment to a slight extent, he will accept it. May I, therefore, move the Amendment in the words which I believe will be accepted?

I take it that the other hon. Members whose names are down to the first Amendment will accept such an alteration.

I beg to move, in page 17, line 16, at end, to insert the words:

"Provided that if, on the hearing of the appeal, the appellant desires to go into any ground of appeal which was not specified in the notice"—

I understood the hon. Member desired to move the words down on the Paper in the name of the hon. Member for Reading (Mr. H. Williams).

I will admit them if no objection is taken, but, of course, the Committee is hardly seized of them.

I do not think I could admit them if any objection be taken. It is a manuscript Amendment, which has not been seen either by the Chair or by the Committee, but if no objection be taken, I will admit it.

On the point of Order. Perhaps I might say that the intention is to accept in principle the Amendment which my hon. Friend the Member for Guildford (Sir H. Buckingham) was moving, similar also to that in the name of my hon. Friend the Member for Reading (Mr. H. Williams), but the wording of it was thought not to be quite apt, and words have been substituted which, I think, carry out exactly the proposal, but which use language which is more effective to achieve that purpose. There is no real change in the meaning of the language, and it is only a proviso which, as my hon. Friend will read it to the Committee, secures that the fact that the grounds of the appeal omit a particular ground shall not prevent the Commissioners from taking it into consideration if the omission was not wilful or unreasonable.

When we saw this Amendment on the Order Paper, we had a preliminary objection to it as wandering over a wider ground and also as raising fresh points at some later date and being opposed to the general desire to get a definite conclusion on matters of that kind, but I think I may say for hon. Members on this side that if the object is merely a variation of the words in the sense that the Attorney-General has suggested, we shall offer no objection to the consideration of the Amendment now.

I beg to move, in page 17, line 16, at the end, to insert the words:

"Provided that if on the hearing of the appeal, the appellant desires to go into any ground of appeal which was not specified, in the notice, and the omission of that ground from the notice was in the opinion of the Commissioners hearing the appeal, not wilful or unreasonable, those Commis- sioners shall not, by reason of anything in this Sub-section, be precluded from allowing the appellant to go into that ground, or of taking into their consideration."

We on this side of the Committee will put no obstacle in the way of any taxpayer who thinks he has a grievance being able to put it forward, but it will be observed that the Amendment now proposed by the hon. Gentleman—and doubtless the Attorney-General will note this in his reply—does not specify sufficiently that the point of objection is one of substance, or anything of that sort. Is it desirable to insist upon this point unless it is something of important character?

This is an Amendment which we are prepared to accept, as it really does safeguard the position of the taxpayer, without imposing any undue burden upon the revenue. As the Committee will realise, the object of the Clause is twofold. First of all, it is to prevent people from putting down merely frivolous appeals, and thereby holding up payment of the tax meanwhile. That is, of course, met by the first part. Secondly, the object is to ensure that some notice should be given to the revenue as to the grounds upon which the appeal is being brought forward so that they may have notice of it. The objection which this Amendment was designed to meet was the objection that has just been put by my hon. Friend to the Clause, that it might be held that failure to include particular grounds of appeal would preclude the Commissioners altogether from taking it into account, although the omission was entirely inadvertent and excusable; and that that might operate harshly against the taxpayer, and more especially against the man who had not had legal or professional advice in the early stages of the appeal; then later, when he got before the Board of Commissioners, he might be shut out on the grounds that he had not given the proper notice. In order to avoid that, it is suggested that if a particular ground is omitted, that fact shall not, in itself, prevent the Commissioners taking the appeal into account, if, in their opinion, the omission was neither a wilful nor an unreasonable one: that is to say, if there were reasonable grounds for making a mistake; if the thing was not done intentionally or wilfully, the mere fact that a taxpayer has made a mistake in his notice is not to preclude the Commissioners from taking the objection into account if they think it is a reasonable objection. I think that is not an unfair provision in the interests of the taxpayer. For that reason my right hon. Friend the Chancellor of the Exchequer is prepared to accept it.

This, I think, is a very reasonable proposal, because any person who has had experience of this particular kind of dispute—and no one has had more experience than the right hon. Gentleman the Attorney-General—knows very well that it constantly happens, not only in cases where the appellant has not every professional and legal help, but also in cases where he has been very fully served, that when the case comes to be argued out, that the real ground of the appeal turns out to be not quite correctly stated. Where I should, however, have hesitation about this Amendment would be this—though the hon. Gentleman opposite naturally takes what he can get, it is a great thing to find the Government Bench agreeing with you—is to whether the word "unreasonable," without any question, will cover the cases. The Attorney-General gave us the words "inadvertent" and "excusable," but I do not quite know what is meant by these.

There are a very considerable number of people who forget to specify in the correct technical and legal language the ground of their appeal. Of course, it will be very well known to Members of this Committee that for many years past the notices have borne a foot-note in the following terms:

"On giving notice of appeal you should state the ground of the appeal."

One imagines that the object of the provision which has been inserted in the Finance Bill of this year is to legalise what has previously been merely a direction. That direction, so far as my information goes, has been obeyed by the general body of taxpayers who desire honestly to fill in their papers. There may, of course, be cases where the object of the notice of appeal put in has been simply to delay payment of the tax. There may be such cases, but so far as my information goes, those cases have been few; in the case of people without professional or legal advice those cases are not at all numerous. The Amendment which we are now presenting to the Committee—and I am very glad indeed that the Government are going in substance to accept it—will simply prevent a genuine case of appeal being refused a hearing on the ground of the technical objection taken by the Inspector of Taxes. One could well imagine that the Inspector of Taxes might take the point that the appellant could not be heard on any particular point which was outside the grounds specified in the notice of appeal. I am not very greatly concerned with the case of those payers of Income Tax who have full legal and professional advice. But there are a considerable number of small taxpayers who are without that help, and who make a perfectly genuine appeal, but for lack of the knowledge that the other taxpayers have are unable precisely to specify the technical grounds of their appeal. I hope, therefore, the Committee will accept this Amendment.

The word "unreasonable" was used by my hon. Friend, but is not "unreasonable" a very elastic phrase? I cannot help thinking that the Attorney-General might perhaps be able, desirous as he is of attaining the object of this Amendment, to consider that point. Perhaps between now and the next stage, the Attorney-General will see if the protection given to the taxpayer is that we are all desirous of seeing. I agree with the hon. Member for York (Sir J. Marriott) that we want to protect these people so far as we possibly can. The right hon. and learned Member for Spen Valley (Sir J. Simon) said that many of these people, perhaps, had not taken legal advice early in the proceedings, and therefore, in many of these cases, whilst everyone is desirous of rendering whatever assistance may be, the insertion of the words proposed, might perhaps just keep out the desired help. Perhaps the right hon. and learned Gentleman will consider the matter, and see what other word or words were desirable.

Amendment agreed to.

Question, "That the Clause, as amended, stand part of the Bill," put, and agreed to.

Clause 26 ( Transfer of certain property from Schedule A to Schedule D ) ordered to stand part of the Bill.

CLAUSE 27.—(Method of computing profits under Schedule D.)

I beg to move, in page 18, line 39, at the end, to insert the words:

8.0 P.M.

Some time ago I asked a question in the House as to the number of assessments made respectively under Schedule D and Schedule E, also the number of additional assessments made under these Schedules, and also the number of claims made under them. I was told that the information I required was not available. At the same time I have every reason to believe that the number of assessments made under Schedule E are immensely larger than those made under Schedule D, and also that the number of additional assessments and of repayments made under Schedule E are something enormous. I maintain that if it is admitted that Schedule E shall be assessed on the previous year, the same as Schedule D is going to be, we shall do away with all the enormous expense and trouble caused by the vast mass of additional assessments and repayments at the present time. We all know that the actual year is looked on as the ideal basis for assessing Income Tax, but we also know through our experience of attempting to assess Income Tax on the actual year that it is an ideal impossible to achieve. In a great many cases Schedule E to-day in practice is not assessed on the actual year but on the previous year. This arises because Schedule E applies principally to salaries and uncertain forms of income like commissions. It is often utterly impossible to estimate even a salary, which varies from the beginning of the year to the end, and it is quite impossible to assess commissions. Therefore, the result is that an enormous number of extra assessments and repayments have to be made during the course of the year, which gives rise to an enormous amount of trouble and great expense to the inland revenue departments.

I have every reason to think that were inspectors of taxes to be consulted on this matter they would agree with the proposal in the Amendment, and would give anything to do away with assessments under Schedule E on the basis of the current year. I cannot expect the Chancellor of the Exchequer to accept this Amendment as it stands. It would be unreasonable to do so, because I know that, if accepted as it stands, he would say that with regard to assessments under Schedule E on the previous year it would be absolutely necessary to introduce a series of more elaborate Amendments, for which there is not time this year. But, until we get all our various Schedules based for assessment on the previous year, we can never arrive at the general simplification and co-ordination of Income Tax generally. I hope, therefore, that the learned Attorney-General has not been instructed to turn this matter down with a plain negative, but that he will undertake to tell the Chancellor of the Exchequer of the remarks I have made, and that he will, undertake that during the course of the coming year the larger question of trying to arrive at a basis for assessment will be considered.

I hope the Chancellor of the Exchequer will lend a sympathetic ear to the Amendment moved in such forcible terms by my hon. Friend the Member for Guildford (Sir H. Buckingham). I am quite sure that if he will consult the officials of the Inland Revenue in this matter, he will find that there is from their point of view an immense body of opinion in favour of making some change in the direction in which this Amendment points. It is in the interest, first of all, of simplicity. I have already said that it is a matter most highly to be desired that we should get all our assessments on to a single year, whether they are under Schedule E or under Schedule D, or whether they are Super-tax, and that there should be a single taxable and assessable year making for simplicity. We have not only got in mind the improvement that would be effected in simplicity, but we suggest that it would also be from the point of view of the Exchequer and the Inland Revenue an immense economy. No one not concerned in the administration of these Acts can have any idea of the vast number of cases an assessor has to revise in consequence of these provisions.

The simple purpose of this Amendment is to get from the Government an assurance that they will, as soon as they can, attempt to put Schedule E on the same basis with regard to assessment as Schedule D is to be under the Finance Act of this year—that is to say, that the liability of the taxpayer should be computed on the year preceding the year of assessment. Schedule E deals1 with offices or employments, annuities, pensions, stipends, all salaries, fees, wages, and perquisites, and is made on the actual liability in the year of assessment. In 1922, all employés formerly assessed under Schedule D were transferred to Schedule E. That enormously strengthens the case for the present proposal. It seems impossible to obtain exact figures, but my information is that, as far as figures can be obtained, probably 75 per cent. of the total number of people assessed are under Schedule E. As I understand it, the main argument for the change which is proposed in this year's Finance Bill for making a single year assessable for Schedule D would also apply in the case of Schedule E. You would obtain the advantage of uniformity if you took the same year for Schedule E and Schedule D. I am perfectly well aware that the Royal Commission did go into this question, and I am perfectly free to admit that they said: That was six years ago, and we now have a change heading in the direction hoped for by the Royal Commission. From the theoratical point of view, the year of assessment appears to be the natural and ideal year, but in practice the year of assessment has been a total and absolute failure Assessment must, in the first instance, necessarily be based on the preceding year. If the total emoluments of the taxpayer do not change, trouble does not arise; but in the very numerous cases where they are paid partly by salary and partly by commission, where there are extra emoluments or where the salary itself may increase or decrease, then an additional reduction or increase on the first assessment has to be made.

There is this further point to be considered. Since 1922 the employés of all traders and firms have been assessable under Schedule E. Naturally bonuses and commissions largely depend on the state of trade. I do not think it will be. any exaggeration to say that hundreds of thousands of additional assessments have to be made annually. In practice, however, the selected year is generally the year preceding assessment. The very simple purpose of this Amendment is to make the practice conformable to the law or the law conformable to the practice, and to take a very important step towards simplification and economy.

I differ from the two hon. Members who have just addressed the Committee, in hoping that the Government will not give the sympathetic response on this proposal for which they have pleaded. I think the Chancellor of the Exchequer and the learned Attorney-General will agree that it is important that the Committee should be perfectly clear as to what is the real nature of this proposal. The Clause now under consideration marks a very important departure in Income Tax administration in that it proposes to wipe out the system of three years average and replace it by taking the year preceding the year of assessment, or as it is called for short, the previous year. That is a change for which there has been considerable support for many years, mainly on the ground that it was desirable, in collecting Income Tax, that we should go as near as possible to the actual time in which the income is made and have a certain simplicity of administration and that it would also help to keep down the arrears that have been characteristic of recent times. So far it is in line with the recommendations of the Royal Commission. But let the Committee observe what the hon. Member for Guildford (Sir H. Buckingham) proposes. He leaves the Clause as it stands in the Bill, but he proposes to make a very great alteration in the whole system under Schedule E, and to take everything else out of Schedule E back into Schedule D, in other words, to transfer everything from Schedule E to the year preceding the year of assessment. As has been pointed out, Schedule E is devoted to fixed salaries, emoluments and income of that kind, which is more or less well known in advance, and which is at the present time taxed on the basis of the year of assessment. Apparently the two hon. Members who have made this proposal have come to the conclusion that by practically abolishing Schedule E and putting everything on the basis of assessment for the preceding year they are going to simplify the structure of the Income Tax; but many of us who have been more or less in touch with these problems for a long time are by no means satisfied that that would be the result. The hon. Member for York (Sir J. Marriott) quoted what was said in the Report of the Royal Commission regarding the preceding year as the basis of assessment, but altogether ignored that part of the Report which paid a very warm tribute to the system of working on the year of assessment itself. It is true that that was advocated as the ideal basis, but we are not going to gain anything in Income Tax administration by wiping out one part of the ideal basis, Schedule E, and trying to lump everything under the preceding year.

The argument which was employed by the Royal Commission for not laying down the year of assessment as the practically general basis—so far as it could be general, excluding profits of businesses—was that in the transition year the sacrifice of revenue, in view of the enormous sums we receive from Income Tax, would be so great that no Chancellor of the Exchequer could stand up to the proposition, unless he had safeguarded his proposal by a great mass of provisional asessments. That difficulty, of course, is not a final difficulty, but we all have to admit that, for the time being, seeing that we are raising £350,000,000 a year from Income Tax and Super-tax, it is a very real difficulty, and at the moment I do not quite see a way of meeting it. In any case that ought not to make it a step to the abolition of Schedule E. The proper course to take is to work this new system of the preceding year, as it is now presented to us, to the very best of our ability, but never to forget that the ideal system is to take the year of assessment, and that, so far from its being necessary to recede from that, we can move towards it in future. The only class of business which is not really susceptible of treatment in that way is that relating to commercial and other undertakings, who probably for as many years ahead as we can see, must be taxed on this basis of the preceding year.

Hon. Members have, in point of fact, exaggerated the gains which would follow from the abolition of Schedule E. Under any system there must be some adjustment, with repayment to be made later, but an analysis of the whole system shows that we should be well advised to keep as near as possible to the Schedule E basis of assessment, that is, the year of assessment. One great advantage of doing that is that you are taxing a man at the time when the income is earned, when there is the closest relationship between the tax and the ability to pay, when administration of the tax so far from being more difficult, is really easier, and when, above all, you are helping to keep down arrears of tax—a very hard thing to overtake. Bad as this Government is, we must, of course, under any Government protect the revenue, and accordingly I trust that the Government will resist this proposition, because it is really contrary to the spirit of all that the Royal Commission intended, and I am perfectly certain that it is bad Income Tax administration.

We must all sympathise with the object which my hon. Friend the Member for Guildford (Sir H. Buckingham) explained as being the purpose of his Amendment. He moved it in order to attain, as he thought, greater simplification, and, therefore, to approach more nearly to the perfect collection of Income Tax. But I should be misleading my hon. Friend if I were to assure him that those responsible for the Revenue would regard this step as a step in advance at all. They would, in fact, regard it, and do regard it, as a step in the wrong direction. When my hon. Friend the Member for York (Sir J. Marriott) was explaining to us what the Royal Commission had said as to the ideal method of collection, he quoted a passage with regard to Schedule D, but he did not quote a passage which deals with this precise point. What the Income Tax Commission said with regard to putting Schedule E assessments on the basis of the preceding year was this:

I would like to remind my hon. Friend that his ideal of unification would not be achieved if we were to put back Schedule E to the preceding year, because apart from Schedule E there are numbers of cases in which the basis of assessment is the actual year's profits, and not the preceding year's profits. It applies to the whole of Schedule C and the bulk of Schedule A, it applies to all dividends taxed at the source, it applies to interest, and it applies to that very large class in number, although the amount involved here many not be so great, the whole of the manual wage earners of the country, who probably more nearly approximate to the Schedule E assessment than taxpayers under any other of the Income Tax Schedules. For all these reasons the Government, while they entirely sympathise with the object with which the Amendment is moved, and share to the full the desire which has been expressed for unification and simplification, cannot accept this Amendment, because they do not regard it as a step in the direction of that unification which is sought.

I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

The Amendment standing in the name of the hon. Member for Reading (Mr. H. Williams), in page 19, line 1, at the end, to insert the words:

"( a ) In the case of Income Tax chargeable under Schedule D in respect of the profits or gains of any trade, profession, or vocation the tax shall be computed on the full amount of the profits or gains of the year ending on that day of the year immediately preceding the year of assessment on which the accounts of such trade, profession, or vocation have been usually made up, or, if there is no such day, on the full amount of the profits or gains of the year preceding the year of assessment,"

is not in order, because that question is covered by Clause 32 and it should have been moved as an amendment to that Clause.

I beg to move, in page 20, line 16, to leave out from the word "the" to the second word "he" in line 21, and to insert instead thereof the words of the penultimate or ante-penultimate years are less than the average of the six years preceding those years. That is rather a difficult undertaking and I think the Clause is rather a clumsy one. Obviously the Inland Revenue must be protected against granting the privilege of the continuation of the average in cases where a real hardship is not being inflicted. Therefore, I suggest the clumsy method suggested in this Clause is not satisfactory and I will point out that it does not carry out what is aimed at and defeats its own ends.

I will quote two typical cases of what might happen under the Clause as it stands. If a man makes £6,000 during 1926 and in the two previous years, the penultimate and the ante-penultimate, he makes £2,000 and £3,000, respectively, he has satisfied the first condition of this Clause and has shown that his last year's profits are larger than the penultimate and ante-penultimate years. Then he has to show the average for the six years previous to that. If it turns out to be an average of £10,000, such a man, although the general average of his profit during nine years is larger than his profits of the previous year, is able to satisfy the authorities that the £6,000 during 1926 is exceptionally large, and he benefits under this Clause.

If you take a second case, of a man who also makes £6,000 in his last year and in the penultimate and ante-penultimate years, £2,000 and £3,000, and the average of the previous six years is only £1,000 or even shows a loss, he can satisfy the first condition although not the second condition, and yet nobody can say that a profit of £6,000 made in the last year is not exceptionally large compared with the average of £1,000 or even a loss in the earlier years. Under this Clause it is quite possible that the man who does not deserve the privilege will get it, and a man who does deserve it will not get it. I suggest that by my Amendment the man who shows that the profits of the preceding year are larger than the average of the three preceding years should be considered to have given a sufficient test.

I shall probably be told that this is too narrow a margin and does not give sufficient proof that the profits of the preceding year are very much larger than the profits of the earlier years. I think an average of six years might be taken as a fair test as to whether the profits of the preceding years are exceptionally large as compared with previous years. I do not know whether my right hon. Friend will be able to consider my suggestion, but I hope he will do so, and although he may have some other suggestion to make I feel perfectly certain that under the Clause as it stands the object that the Revenue has in view will be defeated, and considerable injustice will be done to people who deserve this privilege and on the other hand those who do not deserve the privilege may get the benefit of the Clause.

I cannot accept the Amendment which has just been moved by my hon. Friend, and I suggest that he should accept the Clause as it stands. I have given most careful consideration to this suggestion, as I have to all the other proposals which the hon. Gentleman has made, some of which we have been prepared to meet him in part. This Clause carries out a very carefully considered recommendation of the Royal Commission, and it really is a very fair provision for the purpose for which it is intended. Let me shortly explain what that purpose is. As the Committee knows, we are making the change from the three years' average to the basis of the previous year, and it is recognised, and the Royal Commission recognises, that the transition from one system to the other might in some cases involve a hardship. I think it is quite clear to anyone who reads the Report of the Royal Commission that, taken as a whole, they were rather against the idea that it was necessary to deal with the transition period at all. Eventually they decided that there must be quite exceptional cases of hardship, and that where those really exceptional cases of hardship were found it might be necessary to deal with them, and they suggested the method which we have adopted.

Obviously, if, at the end of the three year period coinciding with the change of system, there were one or two years, or even one year, of very low profits—exceptionally low profits—which would pull down the average for the three years, it might be unfair to go suddenly on to the basis of the previous year, and take no account of that lowering of the average, which, but for the change, would have given a benefit to the taxpayer in the year of assessment. Therefore, the Royal Commission said that, when you find one of these two years so abnormally low, so exceptionally low, then you should apply this machinery; and then the question was, what is the test of abnormal lowness, of exceptional lowness? Obviously, you cannot get any scientifically accurate test of a thing of that sort; it is a matter of broad justice and common sense. Therefore, the Commission suggested that, as a ready and, on the whole, fair test as to whether one of these years was sufficiently exceptionally low to justify exceptional treatment, should be whether or not one of them was lower than the average of the profits for the whole of these six years previous to that. That seems to be a very fair test. If in a business you get a period of about six years with a given average level of profits, and then you suddenly get a year which is lower than that average of six years, it is fair to say that that is abnormal and exceptional in that business, and that it would be unfair in the circumstances not to give the same benefit to the taxpayer which he would have got from those low profits if we had not happened at that very moment to make a change in the system. I do not believe, myself, that there is any fairer way, on the whole, of dealing with these exceptional cases.

The proposal that my hon. Friend makes, quite apart from any question of loss, would not, I think, be at all a fair test, but it has, from the point of view of the revenue, one very fatal disadvantage. I am sorry to say that, if we were to adopt my hon. Friend's proposal, it would cost us something like £10,000,000, and, therefore, it is quite obvious, apart from any other consideration, that it is out of the question for me to encourage my hon. Friend to go on with his suggestion. For the reason, however, which I have given, apart altogether from that, and even if no loss would be involved in accepting my hon. Friend's proposal, I honestly do not believe that it offers on the whole any fair test of the exceptional circumstances in the business justifying exceptional treatment—and I lay great emphasis on that—taking it out of the ordinary run of businesses which, according to the Royal Commission, are not entitled to any consideration at all. Therefore, I hope my hon. Friend will not think it necessary to press his proposal further, but that he will, perhaps reluctantly, see the necessity of abiding by the Clause as it stands, and will not quarrel with me for not accepting his Amendment.

Very reluctantly, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause ordered to stand part of the Bill.

Clause 28 ( Provisions as to charge of tax under certain cases of Schedule D ), ordered to stand part of the Bill.

CLAUSE 29.—(Provisions as to discontinuance of trades, etc.)

I understand that the hon. Member for Guildford (Sir H. Buckingham) does not desire the Amendment standing in his name and those of other hon. Members, in page 22, line 42, at the end to insert the words,

"Provided that in no case a taxpayer shall be required to pay Income Tax upon profits larger than the actual profits for the last two years of trading."

No, Sir.

Clause ordered to stand part of the Bill.

CLAUSE 30.—(Amendment of Rule II of Rules applicable to Cases I and II of Schedule D.)

I beg to move, in page 23, line 37, to leave to the word "two," and to insert instead thereof the word "twelve."

This Clause provides that, in cases of changes of partnership under certain conditions, Income Tax shall be assessed upon the new partnership as though it were a new business, provided that notice of the change be given to the inspector of taxes within two months of the change taking place. My Amendment would substitute 12 months' notice for two months' notice, for the following reasons. If notice be not given within two months, then, as I read the Clause, the new partnership would lose any benefit that there might be under the Clause, and would find itself assessed on the profits of the previous year of the old partnership. I am aware that ignorance of the law is no excuse, and it may be said—I do not know what my right hon. Friend is going to say—that, if the new partnership omit to give notice within two months, they are guilty of carelessness and must bear the result, that is to say, when the next assessment comes along upon the previous year's profits of the old partnership, they will have no remedy, and must pay upon the basis of those profits. I do not, however, think that any reasonable person could say that a taxpayer is guilty of any carelessness if Tie omits to appreciate, tucked away in the middle of a long Clause, these two simple words "two months," although, as the result of not seeing them, he would lose the benefit attaching to the Clause.

Therefore, I want the period to be 12 months, and for this reason. The first time the new partnership will realise that they are assessed for Income Tax on the profits of the previous year of the old partnership will be when they receive notice of their next assessment. That may be in two months, or three months, or any number of months after the new partnership is formed, but certainly it could not be more than 12 months, and that is why I venture to suggest 12 months as the fairest and most suitable period, so that they may have actual notice of the fact that the new charge is being made at the time when the new assessment is made upon them. I do not know whether my right hon. Friend may be going to suggest that he will make it three, or four, or any particular definite number of months, but, if he does, I am afraid it does not help my point in the least, because, unless the time be extended to cover the period of the next assessment, the new partnership will not have an opportunity of realising the benefit that it is possible to obtain under this Clause.

My hon. Friend in his concluding words did not encourage me towards a conciliatory attitude, and I am not at all sure that I feel inclined to make him any offer at all. I cannot quite accept his idea that in these cases, at all events, those engaged in partnership businesses will be entirely unconscious of what is affirmed in the Finance Act of the year. I do not profess to have anything approaching the knowledge of business my hon. Friend has, but I have a higher idea of the business capacity of the industrial mercantile world than to think that large businesses knowing, as every- one in the country will know, that a very far-reaching change has been made in the principle of the assessment to Income Tax, these words, which will affect them in an important way, will never be brought to their notice except by the receipt of an assessment. I cannot help believing the vast majority of business people are already considering, just as my hon. Friend, who represents very large interests, is himself considering, the exact bearing of the legislation we are now engaged upon, and I do not believe they are in the least likely to be taken unawares.

The reason I cannot accept the idea of 12 months' notice is this. Under this Clause we provide for a certain contingency which may be dealt with by an agreement between a number of people interested in a business—those who before a certain date and those who after a certain date are interested in the business—and they have an important option to exercise. The question is the length of notice that it is reasonable and fair that they should be called upon to give as to whether or not they will exercise that option. The option is given them in order to decide, on the change in the circumstances of the business, certain facts with regard to their own business. It is not given, as my hon. Friend seems rather to assume, in order that they may have the clearest knowledge of which way will suit them best from the point of view of paying the tax. We do not want to give these businesses a sufficiently long period so that they may wait to see how the cat jumps. We do not want them to delay exercising their option so that they will always in each case exercise it against the interests of the Exchequer, so that according to circumstances one partnership will exercise it one way because they will not pay so much taxation, and another will exercise it in exactly the contrary direction because by doing so they will save a certain amount of tax. The Exchequer would lose all round in that way. What they can be called upon to do is to give a reasonable length of time in which to give notice as to which principle they are going to act upon whether it benefits them qua taxpayer or does not. I said I was not encouraged to make any offer. I am not absolutely wedded to two months, though I certainly should not accept 12 for the reason I have given, but if my hon. Friend will be in any way, I will not say satisfied, but conciliated, by the offer of three months instead of two I should be glad to give it him. If on the other hand he takes up an absolutely non possumus attitude and says 12 months or nothing, I shall have to ask the Committee to support me in retaining the Clause as it is.

There is one point I want to emphasise. This notice has to be given by all those engaged in a trade, business or vocation. In many cases, especially in Colonial businesses, where there is a resident partner, say, in Auckland, or Melbourne, or Valparaiso, or somewhere where letters take four or five weeks to arrive, it is quite impossible for notice to be received from an individual resident on the other side of the world in the two months which were originally put down. I do not want to haggle with my right hon. Friend for a month but, if he would make it four months, that would give reasonable time for those resident partners at the other end of the world to be communicated with. It takes five weeks each way, and I think if he would spring an extra month it would meet those cases.

I am very easily conciliated, and I am conciliated to this extent, that every additional month will give a few more people a chance of being assessed during that period. I do not think my right hon. Friend was quite fair in suggesting that I wanted to give them a chance of seeing how the cat would jump. Under the Clause it is a right which they are to enjoy. It is only a question whether it is right or wrong that a taxpayer who omits to give notice should jeopardise the right of which he is undoubtedly possessed and in consequence be penalised. I forgot at the moment to bring forward my strongest argument.

Perhaps, as what I have said has been effective in inducing the right hon. Gentleman to offer to extend the two months to three, what I am going to say may induce him to spring a month or two more. Under one of the Schedules the old Clause dealing with what is called "specific cause" is repealed. Under the old specific cause Clause one of the specific causes which could be urged and accepted by the Commissioners for the purpose of reducing the assessment from an average of three years to the actual year's trading was a change of partnership. Under this Bill that privilege entirely goes and the privilege in the Clause we are discussing takes its place. Under this specific cause Clause there was no limit of time at all. It was left entirely to the Commissioners to decide whether or not there was a specific cause. Their attention is particularly drawn to the fact that a change of partnership shall be considered a specific cause, so when I ask for 12 months I was not asking for anything that was not in the old specific cause Clause, and I hope if the right hon. Gentleman will not accept the whole period of 12 months, which is giving the taxpayer nothing more than he already enjoys, he will spring to six months.

Amendment negatived.

I beg to move, in page 24, line 20, at the end, to insert the words:

"Provided always that where any person is the proprietor of, or partner in, any trade or business and—

This question of continuing a calculation of loss from one year to another appears to me to be very satisfactory as regards a one-man or private business. According to my reading of the Act—I may be wrong—it appears that the privilege of continuing these losses from year to year, for a period of six years, as provided in Clause 30, Sub-section (2), will not apply if the proprietor of the business dies, or if he handed over his interest to his family whilst he was still alive, or if the proprietor of a business turns it into a limited company, although they themselves may be the sole shareholders and, following heavy losses, there is a reconstruction of the company. We have tried to design an Amendment that will meet this particular case. Whether or not the Amendment is perfect, I am not prepared to say. My object is to ask the Financial Secretary to the Treasury to go into the question and see whether something cannot be done on behalf of this particular section of the trading community, on the Report stage. We are only by this Amendment carrying out the recommendations of the Royal Commission, which stated:

"Where there is a succession to a business we think that the tax payable should continue to be calculated as if there had been no succession, unless the result of the change is one which warrants the Commissioners in determining that a new business has been set up at the date of the change; in that event the old business should be treated as having been discontinued on the same date."

The Amendment is designed to carry out this recommendation. If the Financial Secretary to the Treasury will look into the matter between now and the Report stage, I shall be satisfied and will withdraw the Amendment.

9.0 P.M.

This is an important Amendment and has been very carefully considered. I am advised that my hon. Friend the Member for Reading (Mr. H. Williams), in whose name the Amendment stands, has raised a question here which must be considered. We recognise that there is a substantial point involved, which will require to be dealt with one way or another; but I do not think it would be any use my saying that we can give a definite answer upon it so soon as the Report stage. Might I suggest to my hon. Friend that, as he is aware, the whole of this change-over from one system to another does not become operative during the year upon which we have now entered. It does not begin until this time 12 months. While we recognise the importance of the point raised, it is quite clear to us that the way in which this Amendment is drafted would not be the right or best way of effecting the object which my hon. Friend has in view. We are quite willing to give the most careful consideration to the point raised by the Amendment before the end of the present year, and that will be in ample time. We can decide in the course of the present year, when we have gone into the matter very fully, whether we agree with the hon. Member, and how best to provide for carrying it into effect. While I cannot give any definite pledge as to what the result of that consideration will be, we shall be prepared to deal with the matter, if we think it necessary to deal with it, in the Finance Bill of next year. Considering how important the point is, my hon. Friend will agree with me that this is the most satisfactory way of dealing with it.

What I have said applies to the two other Amendments on this subject, one standing in the name of the hon. Member for Reading, on Clause 31, page 26, line 29, at the end to insert the words sary. I hope my hon. Friends will be content with that undertaking.

In view of what has been said by the right hon. Gentleman, I beg leave to withdraw the Amendment, which was moved on my behalf by the hon. Member for Grimsby (Mr. Womersley). The whole problem is very difficult and complicated. The Royal Commission made certain recommendations. The right hon. Gentleman and his Department apparently take a different view. There is a difficult problem to be solved, and having regard to the very kind way in which the right hon. Gentleman has treated the matter, I think that those who hold the view that I do are perfectly safe in letting the matter go now, because the Act will not operate for another year, and next year's Finance Bill will be appropriate. In view of what the right hon. Gentleman has said, I not only beg leave to withdraw this Amendment, but I shall not move my Amendment to Clause 31.

Although the Amendment stood in the name of the hon. Member for Reading, it was moved by the hon. Member for Grimsby, and he must ask leave to withdraw.

I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause ordered to stand part of the Bill.

CLAUSE 31.—(Relief in respect of certain losses.)

In view of what was said by the Financial Secretary to the Treasury, I do not propose to move my first Amendment to this Clause, to which he referred. I beg to move, in page 25, line 20, to leave out the word "six."

The object of this Amendment is to take out the limit which is placed upon carrying forward a loss against profits. Under the Clause, the loss can be carried forward against profits for six years subsequent to the loss. If the loss exceeds the profits, there will be no Income Tax to pay, and as long as the loss exceeds the profits, provided that it is not carried forward after the six years, no Income Tax will be paid. Why should a limit of six years be placed upon carrying forward the loss? Under the existing system a loss can only be carried forward for three years, but I fail to see why, if the Government take Income Tax upon all profits, the whole of the losses sustained by a business should not be carried forward until those losses are extinguished by the profits. This is already done in the case of depreciation of plant and machinery. There is no limit of six years placed upon the period over which you may carry the percentage allowed for depreciation. You may carry it on until such time as you have written off all your machinery, but in the case of a trading loss you cannot carry it forward for more than six years. I really cannot see why the Treasury should not give way on this point and allow all losses to be written off against profits until they are extinguished.

I cannot accept this Amendment, and I do not think from the point of view of fairness it should be carried. Under the existing system there is no power to carry forward losses as against gains beyond the three years comprised in the three years' average period, and the only question is: What is it fair to do now in order to give a reasonable equivalent under the proposed change? The only reason we have made it six years is not because there is any sanctity in the number six, but because that is the figure mentioned by the Royal Commission as not only fair, but as generous as well. My hon. Friend I do not say is greedy, but is so ambitious that he wants to do away with the six years. There is to be no limit, and a man who makes losses is to be able to carry them forward against any possible future gains for I do not know how long. That is contrary to anything that has hitherto been found in the Income Tax law. The six years which we are allowing for the purpose of carrying forward is not only quite a fair provision, but a very generous equivalent to those who are in any way unfortunate in respect of the change which has been made, and I must ask the Committee to support the Clause as it stands.

I seem to be rather unfortunate in my dealings with the Financial Secretary. I ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause ordered to stand part of the Bill.

CLAUSE 32.—(Period of computation of profits and gains.)

I beg to move, in page 27, line 21, after the word "against" to insert the words

"any decision of the Commissioners of Inland Revenue under Sub-section 1, paragraph ( b ) of this Section, or."

The object of this Amendment, which is a manuscript one, is to give the same right of appeal as is accorded against the decisions of the Inland Revenue authorities under Sub-section (2) of this Clause. As I read this Clause there is no right of appeal against a decision of the Commissioners of Inland Revenue under paragraph ( b ) of Sub-section 1 of this Clause. It is provided that the Commissioners of Inland Revenue shall decide what period of 12 months shall be deemed to be the year the profits or gains of which are to be taken to be the profits or gains of the year preceding the year of assessment. This is in a case where there are no accounts for a period of one year, or where more than one account has been made up for the year. I agree that the Commissioners of Inland Revenue should, in the first place, have the right to decide what shall be taken as the accounting period, but I think there ought to be some right of appeal. It is a dangerous thing for this old power to be vested in the Inland Revenue Commissioners. I do not suggest that they abuse their privilege, but I think it is right that whatever decision they come to there should be a right of appeal.

I cannot at this moment accept this Amendment, because it has only reached me within the last few moments. I have not had time to consider it, and I must ask the indulgence of the Committee because I have not the assistance of the Chancellor of the Exchequer who is engaged on very important business elsewhere. All I can do is to say that the Amendment shall be carefully considered before we reach Report stage, but I cannot, of course, give any pledge as to how we shall deal with it then.

May I explain that the only reason the Amendment was handed in very late was because another Amendment in my name was ruled out of Order, and I had to reconstruct the Amendment in order to put it in order. I accept the statement of the Financial Secretary that he will look into this matter before Report stage. I am convinced that we have a strong case, and when he comes to consider it he will accept the Amendment.

Amendment, by leave, withdrawn.

I beg to move, in page 27, line 24, after the word "the" ["the Special Commissioners"] to insert the words "general or".

This Clause fixes the dates for accounting periods. One appreciates the necessity of accounting periods being fixed, but I maintain that the fixing of the accounting period is no reason at all for increasing the powers of bureaucracy. This power which the Commissioners of Inland Revenue are seeking under this Clause, is taken bodily from the Excess Profits Duty Regulations—not a very happy hunting ground in view of the enormous number of difficulties and the litigation that have arisen out of them. I should have preferred that the General or Special Commissioners should have had the authority under this Clause to fix the accounting period, because, obviously, the right people to fix the accounting period are not a central board at Somerset House but the local Commissioners, who are fully alive to the local and trade requirements of any particular firm in its own district. I can understand, though it is very much against the grain to confess it, that there are cases where it is desirable to have a decided opinion expressed upon some matter where a general rule is required dealing with cases such as charities, the interpretation of charities and such like all over the country, and to have a central body to adjudicate on such matters; but it seems to me absurd that the Inland Revenue Commissioners should decide what are to be the dates of accounting periods of different firms all over the country. Surely the right people to do that are the General, or, if necessary, the Special Commissioners.

I do not know whether the Financial Secretary sees eye to eye with me in the matter, but I hope that he will accede to my request that there shall be an appeal from this bureaucratic body to the General or Special Commissioners. At present there is only an appeal from Cæsar to Cæsar. You can appeal from the Inland Revenue Commissioners to the Special Commissioners, who are not the same body, but paid servants of the same body, and good and desirable and honest servants. It is like appealing from the captain to the mates. I hope that the General Commissioners will have the right to hear appeals under this Clause.

My hon. Friend wonders whether I see eye to eye with him on this matter. I am afraid that I do not agree with what he said with regard to the duties imposed upon the Commissioners of Inland Revenue under Sub-section (2). But I am not going to emphasise my disagreement with him, because I am prepared to accept the Amendment. I do not think there is any objection to the appeal to the General or Special Commissioners, and, as my hon. Friend attaches importance to that, I accept the Amendment.

Amendment agreed to.

Clause, as amended, ordered to stand part of the Bill.

Clauses 33 ( Apportionment of Profits ), 34 ( Consequential and minor Amendments ), and 35 ( Construction and commencement of Part IV, and Repeal ), ordered to stand part of the Bill

CLAUSE 36.—( Provisions for limiting further assessments or claims in respect of Excess Profits Duty, 11 and 12 Geo. 5, c. 32.)

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Before we pass this Clause, I wish to ask the Minister whether he can give us any idea of the nominal amount of money that is due to and still unpaid to the Treasury by those who are liable to Excess Profits Duty? Can he let us know the amount of the claims that are at present being made for repayment under Excess Profits Duty? How long it is possible for firms to put their losses against the profits that they had previously made, and why is it that these cases are still not settled? I agree entirely with the recommendation that it is impossible to continue allowing firms to put in claims, but it would be of interest to the public generally if we could have a little light thrown upon the whole position. Sometimes very large figures are quoted as the amount of money not paid as Excess Profits Duty, and the Committee would like to be satisfied that those who ought to have paid are not escaping payment by allowing the matter to slide from year to year. In the Estimates for this year the Chancellor of the Exchequer was to receive £2,000,000 from Excess Profits Duty. Would the Minister tell us what is the total sum he is expected to obtain? Two years ago, although the Chancellor of the Exchequer expected to receive £4,000,000, the sum actually received was only £700,000.

I am afraid I am not in a position to give the exact figures of the amounts outstanding. Of course, if I had had notice that this point was going to be raised, I would have endeavoured to give satisfaction to the hon. Member by finding out and giving him the information. It is a very large sum which is nominally outstanding, but, unhappily, I do not think it is a very large sum which is likely to come into the Treasury. There are all sorts of claims and counter claims and difficulties which are likely to reduce the amount.

As to the point which he raised as to the legal position, I think I can answer that. He asks for what period it was that losses could continue to be set off against preceding profits. That period, I am glad to say, has long since elapsed. You can only set off losses incurred during the accounting period, and the Excess Profits Duty period came to an end, at latest, I think it was, on 30th June, 1921. Therefore, it is only losses which had come in before that date which can be set off or made the subject matter of any claim for a return of Excess Profits Duty. The reason why there are so many outstanding claims is partly because of the complexity and number of the accounts which have to be dealt with and the very large figures involved, and partly also because they cover the war period when many accounts were not properly got out by the companies themselves. These involve very great delay and a very great deal of investigation and work by the accountants employed by the Treasury in order to ascer- tain what the profit figures were and, as the hon. Member undoubtedly knows, the calculation itself is not a very simple one from the accountancy point of view. We have to get the standards of profit and the pre-war standards of percentage varying in each year, and to apportion the losses and profits between the respective years, and the calculation is often an intricate and difficult one. I am told that there are between 70,000 and 80,000 cases within the scope of the duty in all, and only 2,800 out of those cases are under appeal or still uncertain, so that although there has been, unfortunately, though necessarily I think, a considerable amount of delay, the hon. Gentleman will see that the matter is being tackled with all possible diligence, and that the Somerset House authorities are doing all in their power to bring to an end what has undoubtedly been a very protracted calculation.

May I ask, with reference to these large sums of money that the Attorney-General speaks of, whether we are to understand these profits never really existed, or that on investigation it has been discovered that the figures estimated were too high, or that the profits did exist and were lost, and whether in the ordinary course they would be written off? Are we to understand that the profits were made and that before the profits were paid in the companies have been wound-up or have failed and that therefore the money cannot be recovered?

I am afraid the answer is that both of those cases exists. There are some cases undoubtedly where, on investigation, it has been ascertained that the profits were over estimated. There are others where, although the profits have not been over estimated, there have been subsequent losses which have to be set off against the previous profits. Unfortunately there are undoubtedly other cases where big profits were made during the War years and which, before the Excess Profits Duty had been ultimately ascertained, they were more than wiped out by the losses, so that the companies have gone into liquidation and lost all the money they had and generally a good deal besides. All these three classes of case exist and it is because it is essential in everybody's interest that there should be some finality that provision is being made in this Finance Bill that there shall be an end to the period of the re-opening of accounts.

Has the Attorney-General now got the figures of the cases for which I asked? I do not know whether they have been given to him.

No, that was the only figure I had.

Question, "That the Clause stand part of the Bill," put, and agreed to.

CLAUSE 37.—(Provision as to the deduction of Income Tax in computing capital for purposes of Excess Profits Duty.)

I beg to move in page 31, line 12, at the end, to insert the words

Let us suppose that there is a company which has been assessed in past years, since the Excess Profits Duty was imposed for Income Tax. The amount of Income Tax charged, was, let us say, £450,000 for the year 1918–1919, ending on 5th April, 1919, and the assessment was made in November, 1918. The company, I suppose, might have objected, and the appeal might have been taken some considerable time afterwards. I submit that it is clear that until that appeal has been heard and determined the company owed no Income Tax to the revenue. That, I believe, is the law as it stands. In this particular case, which, I suggest, the company had taken stock of that £450,000, and would have used it as ordinary trading capital, and used it for making profits until, in fact, the decision of the Income Tax assessment was confirmed. The return for Excess Profit Duty of such a company, I submit, can rightly include that amount of money, and it makes a considerable difference to any business which might have been holding that view. I suppose I am right in saying that the revenue authorities have quite recently said that in such cases the £450,000 would not be the company's capital on 1st January, 1919. This, I believe, was contested, and, in fact, it was the result, I presume, of referring this question to the Law Officers which caused the Treasury to insert this Clause in the Finance Bill to-day, I submit it has been proved that such action in the past was legal, and it is not fair and not equitable that because any firm or company should have taken a perfectly legal action in this respect in the past that we in this House to-day should be asked to carry legislation which is retrospective right back to 1914.

I am afraid this is a technical question which I may not have made very clear, but it does appear to me that if any firm is in law correct in taking this course, which has been taken in the case I know of, it is extraordinarily hard on such a firm or business that to-day they should be compelled to go back to 1914 in the revision of their case. Briefly, it means this, that a company which may have come under the operation of this Clause may have arranged their finances so that the Income Tax was regarded as their own property and own capital during the question of the decision. The result is a large readjustment of their finances is necessary In order to meet this retrospective legislation. I can quite understand the right hon. Gentleman saying, "I cannot go back on this Clause because, if I did so, an enormous number of companies, who had not realised what the law was in the past, might make claims." But in order that that contingency might be avoided and that there might be no considerable loss to the Treasury, I submit these words should be added, because then the Treasury would suffer only a very small loss, and I hope on the ground of equity the proposal will be considered. If my right hon. Friend cannot give way now, perhaps he will reconsider the question before the Report stage, and in that case I do not propose to press the Amendment.

I cannot wholly accept my hon. and gallant Friend's description of what we are doing in this Clause. In one sense it may be described as retrospective, but, really, in principle, it is not so much retrospective as declaratory. What we are doing here is to put into this Clause an interpretation of the law as it has always been understood and administered throughout 10 years' experience of this particular duty. It is laid down that in the computation of capital for the purpose of arriving at the duty payable, Income Tax is to be deducted as a debt, and the only question which arises is at what juncture does the Income Tax payable become a debt. My hon. and gallant Friend's case was that a company or partnership might have a large sum to pay in Income Tax. If an assessment were made of that amount and if, for some reason, an appeal were entered against the assessment, the contention of my hon. and gallant Friend was that it was quite wrong to treat that amount of Income Tax as a debt for the purposes of Excess Profits Duty until that appeal had been heard and determined. It is quite possible, strictly speaking, that that may be the law of the future under decisions which have been given, but the question which we have to decide is, "Is it right because the law in the future may be so declared, having regard to the law as we have understood it and as everybody has understood it and acted upon it without question for 10 years—not merely the Inland Revenue but the trading community—is it right, that we should now run the risk from the point of view of the Exchequer, of some new decision which would enable innumerable cases to be reopened and the assessments gone into afresh and perhaps very large claims made against the Exchequer which nobody would have ever dreamed of making had there not been a new interpretation of the law as is now suggested?" There can be no suggestion that in what we are doing there is any unfairness to anybody in the trading community. We are not doing anything which takes them by surprise or goes contrary to the principles upon which, hitherto, they have always acted. All we are doing is to make a declaration that the law is to be taken as it has been acted upon and to decide that the Treasury is to be safeguarded in those cases, while no sort of unfairness, as I say, is done to the taxpayer or the trading community.

My right hon. Friend mistakes what I said about the effect of the Amendment when he referred to the possibility of an enormous number of cases arising. I specifically suggested that there would be no fresh claims as from the introduction of this Finance Bill, and the Amendment would exclude any claims thereafter. The whole idea is to include only such companies or firms as have made claims previously.

I think my hon. and gallant Friend will realise that, whatever the result intended, the Amendment would lead to inequity and injustice as between corresponding taxpayers. What we are dealing with here is the question of the Income Tax for a particular year which is to be deducted. Let us say that two firms have assessments both of £400,000; one accepts and accordingly there is a debt which has to be deducted. Another appeals, quite without any foundation. Unfortunately there is often considerable delay in hearing appeals, but ultimately the appeal is dismissed and the assessment confirmed. Is that right or fair to the firm which did not launch an appeal? Both were assessed in the same way and at the same time, but, because one lodged an empty and unsuccessful appeal, is that company to be better treated under the Excess Profits Duty than its neighbour who did not so waste the time and money of the Revenue? I would also remind my hon. and gallant Friend that if the appeal were successful then, by the express provision of the Clause to the extent to which the appeal was successful the assessment would be reduced.

Amendment, by leave, withdrawn.

Question, "That the Clause stand part of the Bill," put, and agreed to.

Clauses 38 ( Interpretation of Part VI ) and 39 ( Amount of new Sinking Fund (1923) for 1926–27) ordered to stand part of the Bill.

CLAUSE 40.—(Amendment as to sum to be paid into Road Fund.)

As we have now reached the stage which was arranged as the limit for the business on the Finance Bill to-day, I think this would be a convenient opportunity at which to report Progress.

Motion made, and Question, "That the Chairman do report Progress, and ask leave to sit again," put, and agreed to.—[ Mr. McNeill. ]

Committee report Progress; to sit again upon Wednesday.

Electricity (Supply) Acts

Resolved,

"That the Special Order made by the Electricity Commissioners under the Electricity (Supply) Acts, 1882 to 1922, and confirmed by the Minister of Transport under the Electricity (Supply) Act, 1919, in respect of the urban district of Barry, in the county of Glamorgan, which was presented on the 22nd day of April, 1926, be approved."

Resolved,

"That the Special Order made by the Electricity Commissioners under the Electricity (Supply) Acts, 1882 to 1922, and confirmed by the Minister of Transport under the Electricity (Supply) Act, 1919, in respect of the borough of Denbigh and the rural district of St. Asaph (Denbigh), in the county of Denbigh, and the rural district of St. Asaph (Denbigh), in the county of Flint, which was presented on the 22nd day of April, 1926, be approved."

Resolved,

"That the Special Order made by the Electricity Commissioners under the Electricity (Supply) Acts, 1882 to 1922, and confirmed by the Minister of Transport under the Electricity (Supply) Act, 1919, in respect of the borough of Pwllheli and the rural district of Lleyn, in the county of Carnarvon, which was presented on the 22nd day of April, 1926, be approved."

Resolved,

"That the Special Order made by the Electricity Commissioners under the Electricity (Supply) Acts, 1882 to 1922; and confirmed by the Minister of Transport under the Electricity (Supply) Act, 1919, in respect of the burghs of Alva and Tillicoultry and the parishes of Alloa (excluding the burgh of Alloa), Alva, Clackmannan, Dollar (excluding the burgh of Dollar) and Tillicoultry, in the county of Clackmannan, the parishes of Airth, Logie (excluding the burgh of Bridge of Allan), Saint Ninians, and Stirling (excluding the royal burgh of Stirling), in the county of Stirling, the royal burgh of Queensferry, the burgh of Whitburn, and the parishes of Abercorn, Dalmeny, Ecclesmachan, Kirkliston (except the part thereof which lies south-east of the River Almond), Livingston, Uphall (excluding the Uphall special lighting district), and Whitburn, the county of West Lothian (formerly the county of Linlithgow), and for the amendment county of Linlithgow), and for Falkirk District Electric Lighting Order, 1912, which was presented on the 22nd day of April, 1926, be approved."—[ Colonel Ashley. ]

The remaining Government Order were read, and postponed.

Adjournment

Resolved, "That this House do now adjourn."—[ Major Cope. ]

Adjourned accordingly at Twelve Minutes before Ten o'Clock.