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Commons Chamber

Volume 241: debated on Tuesday 22 July 1930

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House Of Commons

Tuesday, 22nd July, 1930.

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

Private Business

Private Bills [ Lords] (Standing Orders not previously inquired into complied with),

Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That in the case of the following Bill, originating in the Lords, and referred on the First Reading thereof, the Standing Orders not previously inquired into, which are applicable thereto, have been complied with, namely:

London County Council (Improvements) Bill [ Lords].

Bill to be read a Second time.

Provisional Order Bills [ Lords] (Standing Orders applicable thereto complied with),

Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That in the case of the following Bills, brought from the Lords and referred on the First Reading thereof, the Standing Orders which are applicable thereto have been complied with:

Ministry of Health Provisional Orders Confirmation (Cardiff, Stoke-on-Trent, and Worthing) Bill [ Lords].

Ministry of Health Provisional Order Confirmation (Essex) Bill [ Lords].

Ministry of Health Provisional Orders Confirmation (Torquay and Weymouth and Melcombe Regis) Bill [ Lords].

Bills to be read a Second time Tomorrow.

Private Bills [ Lords] (No Standing Orders applicable).

Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That in the case of the following Bills, brought from the Lords and referred on the First Reading thereof, no Standing Orders are applicable, namely:

Ministry of Health Provisional Order Confirmation (East Dean and United Districts Joint Hospital District) Bill [ Lords].

Ministry of Health Provisional Order Confirmation (Morecambe and Heysham) Bill [ Lords].

Bills to be read a Second time Tomorrow.

Oral Answers To Questions

Trade And Commerce

Cotton And Wool

1.

asked the President of the Board of Trade whether, in view of the fact that the drop in arrivals of raw cotton and wool, measured by bulk as well as value, during the first six months of the present year much exceeds the drop in the inflow of goods manufactured from the same materials, he can state the countries which are thus increasing their import of the manufactured goods mentioned?

During the first half of the current year, the total value of the manufactured articles of cotton and wool imported into this country has fallen in comparison with the imports of the corresponding period of last year. Imports of certain descriptions of goods have, however, increased in quantity, and, taking together all classes of cotton manufactures, including hosiery but excluding made-up garments, the quantities are estimated to have increased on the average by somewhat over 10 per cent., while in the case of manufactures of wool, a similar calculation shows a decrease of quantities of about 3 per cent. I am having particulars extracted regarding the principal countries from which the more important classes of manufactures of cotton and wool have been consigned in increased quantities, and will forward them to the hon. Member as soon as they are available.

Do not these figures show that some form of Protection is absolutely necessary for these industries?

Russian Timber (Imports)

2.

asked the President of the Board of Trade whether he has received from the British Commercial Counsellor in Washington any report regarding the grounds on which an embargo has been placed on Russian timber entering the United States; and, if so, whether he will consider the advisability of taking similar action on these grounds?

I would refer the hon. and gallant Member to the replies which were given to questions on this subject by the right hon. Gentleman the Member for St Marylebone (Sir R. Rodd) on the 14th July, and the right hon. Gentleman the Member for West Woolwich (Sir K. Wood) on the 21st July.

47.

asked the Chancellor of the Exchequer whether, in view of the fact that forced labour, including that of prisoners, is employed in the timber industry in the Soviet Union, he will exercise the powers conferred upon him by the Foreign Prison Made Goods Act and forbid the importation into this country of timber produced within the Soviet Union?

I am advised that the provisions of the Foreign Prison Made Goods Act give no such general power as is suggested in the question. I would point out that before the provisions of the Act can be put into operation it is necessary that evidence be produced to the satisfaction of the Commissioners of Customs and Excise that any particular consignment of goods has been made or produced wholly or in part in a foreign prison, gaol, house of correction or penitentiary. If any such evidence is forthcoming with regard to specific consignments of timber from the Soviet Union it should, in accordance with the Act, be submitted to the Commissioners of Customs and Excise, but I would point out that such evidence must be sufficiently detailed and conclusive to satisfy the Commissioners that any action taken by them would be sustainable if challenged in a Court of Law.

In view of the fact that the right hon. Gentleman said that he has powers under this Act to prevent the importation of timber or other goods produced in any foreign penitentiary, does he assume, by stating that he cannot take action, that these prisoners in Russia are not doing penance?

I do not assume anything of the sort. When the hon. Member sees the answer, he will find that goods must have been produced or made in a penitentiary. As far as I know anything of the facts of the case referred to by the hon. Member, these goods are neither made nor produced in a penitentiary.

Is the right hon. Gentleman aware that his right hon. Friend the President of the Board of Trade has admitted that these goods are produced by prison labour, and that, therefore, the prisoners must be doing penance, and, if they are doing penance, they must be in a penitentiary?

If the goods referred to are made or produced wholly or in part in a penitentiary, then, if the case be laid before the Commissioners of Customs and Excise, they will take action under the Act, but, as I pointed out in the latter part of my reply, the circumstances must be conclusive, so conclusive that if any action is taken it can be sustained in a Court of Law.

Can the right hon. Gentleman say whether the answer that he gave in the first part of his substantive reply is based upon a decision of the Law Officers? Has the matter been put to the Law Officers as to whether or not the Act applies?

50.

asked the Chancellor of the Exchequer whether he will amend the Foreign Prison-made Goods Act, 1897, so as to empower the Revenue to forbid the importation of forced labour by persons other than convicts?

I would refer the hon. Member to the reply given by the Secretary, Overseas Trade Department, on the 18th March last to a similar question by the hon. and gallant Member for Maidstone (Commander Bellairs).

Is the right hon. Gentleman aware that since that date new circumstances have arisen, and that the embargo upon Russian timber, preventing it from going into America, is bound to react upon British labour and to prevent British workmen from doing their work?

Italy (Patent Law)

3.

asked the President of the Board of Trade whether he is now in a position to state what action is being taken in making representations to Italy in connection with the position of British patentees, owing to the failure of the Italian Government to alter their laws in accordance with the Hague Convention of 1925, which became operative as regards Italy on 1st June, 1928?

Steps are being taken to obtain from His Majesty's Ambassador at Rome a report upon the present state of the Italian law as affecting British patentees in connection with the provisions of the Industrial Property Convention of 1925.

Has the right hon. Gentleman been in a position to take any action in this matter?

Yes; I have had inquiry made regarding the specific case which my hon. Friend has mentioned, and I think that probably the best course now would be that he and I should discuss it together.

Dyestuffs (Import Regulation) Act

4.

asked the President of the Board of Trade what communications he has received with reference to the position which will arise when the Dyes Act expires in January next; and whether any representations made are favourable to continuance or otherwise?

The Dyestuffs Industry Development Committee, appointed under Section 2 (6) of the Dyestuffs (Import Regulation) Act, 1920, to advise on the development of the dye-making industry, have recently presented a report, which will be published shortly.

Is the right hon. Gentleman aware that any attempt to extend this Act will be strenuously opposed from these benches?

Representations in both senses have reached me, but a very comprehensive report, as I have indicated, will be available for all hon. Members almost immediately.

In spite of that very fearful threat, will the right hon. Gentleman also take into account the speech recently made by the President of the Colour Users' Association?

Yes; this is a case in which I might say that all relevant considerations will be taken into account.

Printing Presses (Imports)

5.

asked the President of the Board of Trade the number and value of American newspaper printing presses imported into Britain during the 12 months ended to the last convenient date?

The imports of newspaper printing presses are not separately recorded in the trade returns, but are included under the heading of newspaper, letterpress and lithographic machinery and parts thereof, the imports of which, into the United Kingdom, registered as consigned from the United State during the 12 months ended 30th June, 1930, amounted to 2,943 tons, of a declared value of £591,226. These figures do not include type-setting machinery.

Is my right hon. Friend aware that these foreign newspaper presses are being used to print Empire Free Trade newspapers?

Foreign Foodstuffs (Assisted Imports)

8 and 9.

asked the President of the Board of Trade (1) if he will state the amount and value of subsidised foreign foodstuffs imported into this country during 1927, 1928, and 1929, respectively;

(2) if he will state the amount and value of foreign foodstuffs imported into this country under the cost of production in the country of origin during the years 1927, 1928, and 1929, respectively?

Is the right hon. Gentleman aware that it is vitally necessary to get information on these points, in order to deal with the scandal of subsidised imported foodstuffs coming into this country?

Is the right hon. Gentleman continuing his representations to friendly Governments which are subsidising goods, and, consequently, causing dumping in this country?

Would it not be possible for the President of the Board of Trade to get some approximate estimate of the figures involved?

Will my right hon. Friend, at the same time, try to secure similar figures with regard to the quantity and value of goods subsidised and exported from this country?

In Reply to the second supplementary question, we have, of course, a good deal of information on that point in our own returns. In reply to the first supplementary question, I have already given certain information, which is all that can be obtained. As my right hon. Friend knows, it is very difficult to trace what happens in the country of origin.

Russia

34.

asked the Secretary to the Overseas Trade Department whether he has called for any general survey of Russian trade from our Trade Commissioner in Russia; and, if so, how soon he expects to receive it?

35.

asked the Secretary to the Overseas Trade Department whether he will make available to the Members of this House the reports he has received from the Commercial Counsellor at Moscow; and whether he proposes to publish an annual report prepared by the Trade Commissioners?

Reports received from the Commercial Counsellor at Moscow are being and will continue to be treated in precisely the same way as those received from other countries. Any request from Members of this House for commercial information about Russia will, as in the case of any other country, receive special consideration. With regard to the question of calling for a general survey or annual report, I will give the matter my attention as soon as the commercial diplomatic officers have been sufficiently long at their post.

May I ask the hon. Member why it is he is treating Russia like any other country, when his own party thinks that it is something much better?

Government Departments

Patent Office

6.

asked the President of the Board of Trade whether all necessary steps have now been taken to cope with the arrears of work at the Patents Office; and whether applications for patents are now being dealt with without delay?

As a result of the competitive examinations held in April last, 17 assistant examiners are being appointed, of whom 11 have already taken up their duties. With this addition, the total examining staff will number 303, as compared with 239 on 1st January, 1929. The position in regard to the arrears shows a slight improvement as compared with the position last autumn, and, as soon as the very considerable body of new officials have acquired the necessary experience in their work, the applications for patents should be dealt with more expeditiously.

Will the right hon. Gentleman, in addition to doing what he has just said, take immediate steps to cut away the red tape that has been interfering with the present practice in connection with applications in this country?

I think the House will recognise that this is a very large addition to the staff, but, if there are specific points on which hon. Members think there is delay, it would be much better if I had details.

In view of the complaints which have reached him from chambers of commerce, will the right hon. Gentleman take some steps to overtake the arrears of work?

Yes, that has been our object. My reply shows that 64 have been added to the original staff of 239 in 18 months. I am bearing that fact, of course, in mind.

Will the right hon. Gentleman also bear in mind the fact that a great many people object to increasing the Civil Service?

That is quite true, but this work must be overtaken, and there are very great industrial advantages in avoiding delay.

Revenue Officers

52.

asked the Financial Secretary to the Treasury whether, as between revenue officers appointed in the first instance to a particular grade and officers promoted to that grade, seniority is determined according to the date of entry into the particular grade or the date of entry into the Department; and how far, if at all, the rule is subject to variation by the heads of the Department?

I am not clear as to the meaning of the hon. Member's question, and I am therefore writing to him on the matter.

Food Council

7.

asked the President of the Board of Trade whether it is proposed to make any change in the powers and composition of the Food Council; and, if so, whether he can give particulars?

No such change is in contemplation so far as the Food Council is concerned.

Mercantile Marine (Engineers)

10.

asked the President of the Board of Trade what he proposes to do with regard to the request he has received from the Amalgamated Engineering Union that there should be three qualified engineer mechanics on all vessels of over 1,000 tons?

A compulsory requirement that three engineers should be carried on British steam and motor ships over 1,000 tons gross could only be imposed by legislation. So far as I am aware, there is no evidence that such ships do not, in fact, carry an adequate number of competent engineers, and there is, therefore, no reason to amend the Merchant Shipping Acts in this respect.

Is the right hon. Gentleman not aware that, as stated in the question, the Amalgamated Engineering Union approached him on this matter, and put before him the fact that there are ships sailing without the required number of skilled engineers?

Would not legislation on these lines have the effect of still further handicapping British shipping in competition with foreign-owned vessels?

In reply to my hon. Friend the Member for Dumbarton Burghs (Mr. Kirkwood), I have no information of any violation of the law; that is to say, of the Merchant Shipping Act. On the contrary, it appears that additional engineers are very often carried. But, if my hon. Friend has any specific case, I will make immediate inquiry into it. As regards the second supplementary question, we must, of course, comply with the law in this matter, and I do not think that we are at a disadvantage.

Did not the Amalgamated Engineering Union give the right hon. Gentleman stated cases where this was going on?

I could not charge my memory this afternoon as to the exact form of the communication. I understood that it was a general question as to compliance with the Merchant Shipping Act that was raised, but I will look into that and inform my hon. Friend.

British Army

Married Quarters

11.

asked the Secretary of State for War how many families now in married quarters in the British Forces in the British Isles are now waiting for larger quarters of a size appropriate to their families; and what steps he is taking in the matter?

The number of married families of soldiers on the married quarters roll in the British Isles to whom a larger quarter would be allotted were it available is estimated at approximately 2,000. As regards the second part of the question, I would refer the hon. and gallant Member to the reply which I gave him on 8th July.

Cadet Corps

14.

asked the Secretary of State for War whether the withdrawal by the War Office of the official recognition hitherto accorded to cadet corps will debar members of such corps who may be in possession of certificate A from counting the marks attaching to such certificate towards the entrance examinations for the Navy, Army, and Air Force; and, if so, what steps he proposes to take to ensure that members of cadet corps in possession of certificate A will not be placed at a disadvantage compared with boys who have received the same certificate in officers' training corps?

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

Is the position that certificates received by members of cadet corps will rank equally with certificates obtained by cadets in officers' training corps?

The position is that certificate A, which has already been granted, will occupy the same position and have the same force as previously.

Does the right hon. Gentleman mean that members of cadet corps who may obtain Certificate A in the future will be allowed to count their marks? That is the point.

Poison Gases (Experiments)

15.

asked the Secretary of State for War what evidence he has, and how it was obtained, that the experiments conducted at Porton of poison gases on animals show that these gases have the same effects on human beings?

A comparison of the gross and microscopic appearance of the lungs of men killed by irritant gases in France with those of animals exposed to the same substances showed that the injuries were of similar nature and character, and further study of such animals gave evidence of the mode of action of the poisons and their effects on vital organs. It was thus possible, by correlating these experiments with clinical observations on gas patients, to formulate curative treatments. Descriptions and results of this research were published in the medical Press shortly after the War.

Has the right hon. Gentleman any evidence of this since the War, and, if not, how is it possible to find out that the effects on animals are the same as on human beings?

Will the right hon. Gentleman consider testing the efficacy of these gases by experimenting on the hon. Member?

The evidence I have has already been given. Experiments are not continued for the sole purpose of getting to know whether I can justify statements that are made. The evidence given to me is that these experiments on animals led to the alleviation of an enormous amount of suffering during the War.

Recruits Under Age

16.

asked the Secretary of State for War if he will state the number of representations he has received during the 12 months ended 30th June, 1930, from the parents or guardians of recruits that the recruit was under age; and what action he has taken on such representations?

I regret that I am not in a position to give the information for which my hon. Friend asks, without disproportionate labour. In each case sent to me I have had a special report made. The attestation form has been revised in such a way as to leave no doubt that a wrongful declaration of age is a serious offence.

Has the right hon. Gentleman evidence that recruiting officers on occasion advise recruits to give a false age when they attend for attestation?

I have no such evidence, and the attestation form is now drawn in such a way as to make it an equally serious offence for the recruiting sergeant to suggest a thing of that sort.

Every recruiting officer knows the attestation form and knows that the change has been made.

Major Adam

17.

asked the Secretary of State for War whether he will reconsider the case of Major Adam?

This case has been repeatedly considered by successive Secretaries of State, and I am not aware of any fresh grounds for re-opening the matter.

Has not Lord Allenby requested the War Office to reconsider the matter, and is not Major Adam, having been a Member of this House, entitled to further consideration?

I do not remember a letter from Lord Allenby. I have looked up the records down to the time of Lord Haldane at the War Office. The case has been considered over and over again, and I see no ground for re-opening it.

I have gone into it sufficiently to have read about it for hours. If I went into it till I read all the documents, I should be as old as Methusaleh before I finished.

I am aware of no new facts that modify the grounds on which the decision has been arrived at.

If I can produce any new facts, will the right hon. Gentleman give a new inquiry?

Scotland

Pier, Kyleakin

18.

asked the Secretary of State for Scotland what action he proposes to take in view of the failure of the railway company to maintain the pier erected by them at Kyleakin?

I am advised that the railway company is under no statutory obligation to maintain the pier at Kyleakin, and I am not therefore in a position to take any action in the matter.

Tuberculosis

19.

asked the Secretary of State for Scotland if he is satisfied with the accommodation provided by Scottish local authorities for sufferers from tuberculosis; what is the total number of fresh cases notified for 1928 and 1929; what number are receiving institutional treatment; and what number have been recommended for treatment in residential institutions and are not receiving it because of lack of adequate accommodation?

The numbers of new cases of all forms of tuberculosis notified in 1928 and 1929 were 10,885 and 10,262 respectively. The number who received treatment in institutions in 1928 was 7,808. I regret that the corresponding figure for 1929 is not yet available. As regards the last part of the question, no precise information is available, but I may say that the Department of Health for Scotland have no evidence to indicate that any material number of cases are not receiving treatment because of lack of necessary accommodation, but if my hon. Friend has any specific information to the contrary, I shall be glad to have it.

Will the hon. Gentleman consider the advisability of putting these poor sufferers on some of the farms that belong to the estate which was given by the Duke of Sutherland?

Housing

20.

asked the Secretary of State for Scotland the number of subsidy-aided houses completed and ready for occupation in Scotland in 1929 by local authorities and private enterprise respectively; the number of houses erected without subsidy during that year; and if he can estimate the number of houses which will normally be completed in 1930 by local authorities and private enterprise respectively?

The numbers of subsidy-aided houses completed and ready for occupation in Scotland in 1929 by local authorities and private enterprise respectively were 14,316 and 3,924. The number of houses erected without subsidy during that year was 1,275. As regards the last part of the question, I regret that under present conditions I am not in a position to give any reliable estimate of the number of houses that will normally be completed in 1930 by local authorities and private enterprise respectively.

Is it not fairly evident that there will be a very severe drop in the figures?

On the contrary, the facts warrant the assumption that there will be an increase.

21.

asked the Secretary of State for Scotland if he will consider the advisability of empowering local authorities to utilise empty dwelling-houses fit for habitation, or to levy occupiers' rates on all such dwelling-houses which are withheld from occupation?

As regards the first part of the question, I would refer my hon. Friend to the powers which local authorities already possess under paragraph (c) of Sub-section (1) of Section 43 of the Housing (Scotland) Act, 1925, to provide housing accommodation for the working classes by acquiring existing houses suitable for the purpose. The proposal in the latter part of the question would require legislation, as to which my right hon. Friend can give no undertaking.

Does the hon. Gentleman consider that he has adequate powers to deal with housing?

Salmon Fisheries (Seals)

22.

asked the Secretary of State for Scotland what steps the Fishery Board for Scotland are taking to prevent damage to salmon fisheries by the common seal?

The prevention of damage by seals to salmon fisheries is primarily a matter for the proprietors of the fishings or the salmon fishery district boards, some of whom, I understand, offer rewards for the destruction of seals; and the Fishery Board for Scotland have not up to the present found it necessary themselves to initiate any action in the matter.

Will the hon. Gentleman request the Fishery Board to ascertain the actual amount of damage that is done?

If it is being done, cannot the hon. Gentleman say what the result of the inquiry is?

Does not the hon. Gentleman's admission show that the contention of my hon. Friend and myself that these seals break nets is true?

The answer given is only to the effect that the district boards and the proprietors of fishings have in the past actually offered rewards for the destruction of seals. Whether that is advisable or not I offer no opinion.

Why do they ask for seals to be destroyed except that they are doing damage?

Is it not a fact that a great deal of the damage that is supposed to be caused by the common seal is in reality caused by the grey seal, which is protected by law?

Fishery Research

23.

asked the Secretary of State for Scotland if he can give information as to the principal research work carried out during the past year by the research steamer of the Fishery Board for Scotland?

Full information on the subject is given in the Board's Annual Report for the year 1929 which is now in the press.

All that I can say is, that it is now in the press, and I am hopeful that it will be issued very shortly.

Is the information collected by this research vessel to be handed over to the English Ministry of Fisheries so that it may be co-ordinated between the two Departments?

Coal Industry

Workmen's Compensation (Nystagmus)

24.

asked the Lord Advocate whether his attention has been drawn to a case in Scotland in which a colliery company offered employment to a miner, who had suffered from miners' nystagmus and had recovered, upon the condition that he would discharge his rights under the Workmen's Compensation Act in respect of any nystagmus which he might contract in the future; and whether he will take steps to prevent conditions of that kind being imposed upon miners who are seeking employment?

The answer to the first part of the question is in the affirmative. Any agreement whereby a workman contracts that the Workmen's Compensation Act shall not apply, unless made under a scheme certified under the Act, is an invalid agreement and is of no force and effect. It is none the less desirable that workmen should not be subjected to pressure of the kind indicated in the question. I am making representations regarding the matter in the appropriate quarter.

Gas Detectors

26.

asked the Secretary for Mines what the Mines Department are doing in respect of gas detectors being installed in coal mines; and can he say when this will be done?

My hon. Friend is, of course, aware of the extent to which flame safety lamps are used for detecting gas in coal mines and of their efficiency and reliability for that purpose, and I assume his question relates to other supplementary detecting instruments. My Department is closely interesting itself in the development and testing of these devices: and a series of systematic pit trials of one of them has been arranged. The Safety in Mines Research Board are also engaged in carrying out laboratory tests on the same detector. The results will be carefully watched, but it will be some little time before sufficient experience has been gained to allow a definite judgment to be formed.

Have any of these detectors been tested in the natural conditions of the mines, and, also, is my hon. Friend meeting with any opposition from the colliery owners in making the test?

I understand that most of the detectors now before the Department have been tried out in practical circumstances in the pits. As regards the second part of the supplementary question, as far as I know, no opposition has been raised by the colliery owners.

Has my hon. Friend seen a copy of a letter of the 7th December, 1927—

Kent Coalfield (Rescue Station)

27.

asked the Secretary for Mines whether any steps are being taken to secure the erection of a miner's rescue station in the Kent coalfield?

Yes, Sir. I am informed that the site has been selected, the plans approved, tenders accepted, and the work has now been put in hand. I will do everything in my power to expedite completion of the work.

Royalties

28.

asked the Secretary for Mines whether it is proposed to introduce during the present Session the Bill dealing with coal-mining royalties?

No, Sir. It has been realised for some time that, even if this Bill had been introduced during this Session, it could not have made any further progress; and it followed from the Prime Minister's announcement on 25th June, concerning the business to be undertaken during the remainder of this Session, that this was one of the Measures which could not now be introduced during the present Session.

Is it the intention of the Government to introduce this Bill in the next Session if they survive as long?

British South Africa Company (Concession, Bechuanaland)

25.

asked the Secretary of State for Dominion Affairs whether, seeing that Tshekedi, the paramount chief of Bechuanaland, has requested the High Commissioner in South Africa to give formal notice terminating the concession granted by his father, King Khama, nearly 40 years ago to the British South Africa Company, and that the chief and his people have offered to repay to the British South Africa Company the whole of the moneys paid to them for this concession, he will state what action has been taken by the High Commissioner in the matter?

Yes, Sir, a proposal has been made, and I am now in communication with the company.

In considering this matter, will the right hon. Gentleman reconsider the question of the concession about which we have had many promises during the last five or six years.

I should like to have notice of that question, as I do not know its exact connection with this matter.

Post Office

Pillar Boxes (Direction Signs)

29.

asked the Postmaster-General whether any decision has been arrived at by his Department for the purpose of affixing on pillar boxes suitable signs which will indicate the direction of the nearest post office and telegraph office; and can he state what arrangements have been made by the Post Office with reference to this?

Yes, Sir. An order has been placed for the necessary signs to be placed on the top of pillar boxes, and it is hoped that a number of them will be set up within the next few weeks.

Am I to understand from that reply that my hon. Friend has also given this instruction for the Provinces?

Stamp Selling Machines

30.

asked the Postmaster-General the number of stamp selling machines that have been erected in Great Britain on positions other than post offices; whether it is proposed generally to erect these machines on the principal railway stations; has he considered the erection of these machines on positions at present occupied by single telephone kiosks or pillar boxes; and will he give particulars?

Stamp-selling machines attached to telephone kiosks have been provided on about 40 sites away from post offices. Machines attached to pillar boxes will shortly be installed on a dozen sites in the London postal area, and the question of further installations is under consideration. Arrangements have been made to instal machines at London railway termini and at the principal stations in the Provinces.

Transatlantic Telephone Calls

31.

asked the Postmaster-General the number of Transatlantic telephone calls that have passed between the United States of America and Great Britain for the months of April, May, and June, 1930, giving the average duration of each call?

The number of Transatlantic telephone calls between the United States and Great Britain was 546 in April, 676 in May, and 641 in June. The average chargeable duration of these calls was six and a-half minutes each. They were all dealt with by the Post Office Wireless Station at Rugby with its receiving station at Baldock.

In view of the increase which is shown, should not the Post Office consider making a further reduction in the charges which would give them more traffic on these lines?

Does my hon. Friend not consider that the charges even at the present time are rather excessive?

Will the hon. Gentleman take steps to keep Members of his own party up to date occasionally?

Pensions (Auxiliary Postmen)

32.

asked the Postmaster-General whether any time served as auxiliary postmen counted towards pensionable service?

Service as auxiliary postman is part-time and cannot be reckoned for pension.

Facilities, Louth

33.

asked the Postmaster-General whether he has received any representations pointing out that inconvenience has been caused by the lack of facilities for posting letters in the market place in Louth; and whether he will take any steps in this matter?

I am having inquiry made, and I will write to the hon. and gallant Member.

Royal Navy

Dominions And Colonies (Contributions)

36.

asked the First Lord of the Admiralty what contributions were made during the past 12 months by the Dominions and Colonies towards the upkeep of the British Navy?

I would refer the hon. Member to the reply of the 2nd April (OFFICIAL REPORT, cols. 1286–8) to the hon. Member for Devonport (Mr. Hore-Belisha).

Can the hon. Gentleman say whether it is proposed to bring up this matter at the Imperial Conference so that every portion of the Empire may bear its fair share of naval defence?

I think that my right hon. Friend the First Lord dealt with that matter yesterday.

Dockyard Employés (Leave With Pay)

37.

asked the First Lord of the Admiralty whether he will consider granting some proportion of the concession of a week's leave with pay to those dockyardsmen who are discharged and who have completed over 10 months of the qualifying period?

The grant of leave with pay to workmen in Admiralty establishments has been made on the condition that the participants have a minimum of 12 months' service. I am unable to agree to the reduction of this minimum period.

Is he aware that this grant of a week's leave with pay is rendered nugatory when notice of discharge is given just before a week's pay is due?

No, only as far as workmen who have been in the employ of the Admiralty for a period of less than 12 months.

Does the hon. Gentleman not think that the care of those who have been compelled to leave their employment through naval economy should be a first charge on the Treasury?

Unemployment

Devon And Cornwall

41.

asked the Minister of Labour what is the percentage of unemployment in Devonport, Plymouth, the County of Devon, and the County of Cornwall, respectively, as compared with the percentage of unemployment in the country as a whole?

At 14th July, 1930, the number of persons on the registers of Employment Exchanges expressed as percentages of the insured population were as follows: Devonport and Plymouth 14.9; County of Devon 8.9; County of Cornwall 11.6; Great Britain 16.6.

Road Schemes, West Riding, Yorkshire

43.

asked the Minister of Transport the position with regard to schemes of work submitted by the West Riding County Council?

Under the Trunk Road Programme schemes estimated to cost £381,078 have been accepted for grant, and grants have been issued in respect of works estimated to cost £175,889. The programme of other works of improvement and new construction on classified roads, submitted in response to the invitation of July last, includes schemes estimated to cost £973,567. Of these, grants have been issued in respect of schemes estimated to cost £102,030, and further schemes estimated to cost £257,537 have been approved in principle. The remainder of the schemes are being examined.

South Shields

38.

asked the Minister of Labour the number of claims at the South Shields Employment Exchange to unemployment benefit rejected from the coming into force of the present Act to the latest available date on the ground that the applicant was not normally in insurable occupation; and the number of claims rejected at the same Exchange in the corresponding period of last year on the ground that the applicant was not genuinely seeking work?

During the period of 13th March to 9th June, 1930, out of 12,128 claims made at the South Shields and East Bolden Employment Exchanges, 173 were disallowed by the court of referees for that area on the ground "not normally insurable." During the period 12th March, 1929, to 10th June, 1929, out of 9,857 claims made, 142 were disallowed by insurance officers on the ground "not genuinely seeking work," and six cases were recommended for disallowance on the same ground by courts of referees on review after payment of 78 days' benefit.

Can the hon. Member say if it is possible to trace how far these numbers refer to the same set of people each year?

No, I should require notice of that question, but I may draw the attention of my hon. Friend to the fact that, while the bulk of the claims are larger by 3,000, there is very little difference between the "non-insurable" and the "not genuinely seeking work" cases.

Will the hon. Member ask the Minister of Labour whether it would be possible to take certain sample registers, and endeavour to see whether the names are the same, as the matter is very important?

I will draw my right hon. Friend's attention to what the hon. Member has said.

In the case of the figures dealing with those "not genuinely seeking work" 12 months ago, did those figures include the number disqualified in that period for not having a reasonable period in the two years? If not, does not that make the hon. Member's figures even worse?

No, Sir. As I have pointed out in my answer to the question, the comparison is between the "non-insurable" cases and those "not genuinely seeking work."

42.

asked the Minister of Labour the number of persons registered as unemployed in the various principal trades, respectively, at the South Shields Employment Exchange on the last date for which such figures are available, and on the corresponding dates in 1929 and 1928, respectively?

Following is the statement:

Insured Persons recorded as Unemployed at the South Shields Employment Exchange.

Industry.23rd June, 1930.24th June, 1929.25th June, 1928.
Men—
Coal Mining2,6321,4242,079
Shipbuilding and Ship-repairing2,0871,8511,524
Shipping Service1,6441,047969
Dock, Harbour, etc., Service8768911,086
Marine Engineering287200274
Building246249301
Other Industries1,3941,1481,312
Total9,1666,8107,545
Women—
Distributive Trades135139113
Hotel, Club, etc., Service805255
Other Industries1007283
Total315263251

Consultative Committee

45.

asked the Prime Minister whether the proceedings of the Advisory Committee on Unemployment, of which the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) is a member, will be secret?

The Committee referred to is consultative.

Will the proceedings be secret, and, if so, have any arrangements been made for some form of publication?

If every conversation that I have on business with Members with whom I am engaged in this House is to be published, I do not know what would happen.

Is the right hon. Gentleman aware that disclosures have already been made on the subject of this Committee by the Chancellor of the Exchequer and the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George). How is he going to stop that?

As the reply includes a number of figures, I will, if I may, circulate a statement in the OFFICIAL REPORT.

into force the Official Secrets Act, so that his words shall not be published?

Imperial Conference

46.

asked the Prime Minister whether, with the object of mitigating unemployment, it is contemplated that any Minister will undertake this summer a mission to Canada or any other Dominion?

No, Sir. The Imperial Conference will enable His Majesty's Government in the United Kingdom to meet personally representatives of His Majesty's Governments in all the Dominions.

Is the Prime Minister aware that the late Lord Privy Seal went on a visit to various commercial concerns, and could the right hon. Gentleman not spare a Minister to endeavour to repeat that success?

League Of Nations (Minority Petitions)

44.

asked the Secretary of State for Foreign Affairs what are the conditions of receivability of minority petitions by the League of Nations; whether any member of the League has raised the question of receivability; and, if so, concerning which petitions and with what result?

The answer to this question is somewhat long, and I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.

Can the hon. Gentleman say whether it has yet been decided to raise the question of the minorities in the Assembly this year?

My right hon. Friend stated in reply to a question yesterday that that matter is under consideration at the present time.

Following is the answer:

The conditions of receivability of minority petitions, as determined by the Council in September, 1923, are as follows:

  • (a) They must conform to the object of the treaties;
  • (b) They must respect the inviolability of the State of which the minority in question forms part;
  • (c) They must show clearly the source from which the petition proceeds, anonymous petitions being entirely prohibited;
  • (d) They must be drafted in temperate language;
  • (e) They must contain new facts or facts which have not been included in any petition recently submitted.
  • Petitions which do not conform to these conditions are, generally speaking, returned to their senders by the Secretary-General of the League. During the past few years there have been two cases in which the receivability of a petition has been contested by a Member of the League. The first was a petition, dated the 2nd of November, 1927, from certain persons of Ukrainian origin residing in Lithuania, the receivability of which was contested by the Lithuanian Government; the second was a petition received in March, 1928, from some Macedonians resident in Yugoslavia, the receivability of which was contested by the Yugoslav Government. In each case, the Committee of Three, to which the matter was referred by the Council, sustained the objection and dismissed the petition.

    Imperial And International Communications Limited

    51.

    asked the Financial Secretary to the Treasury how many other directorships are held by the Government directors on the board of the Communications Company?

    One of the two directors referred to is also a director of the Bank of England and the other has been Chairman of the British Broadcasting Corporation. So far as I am aware, these are the only appointments held by them apart from the posts which they occupy as directors of Imperial and International Communications Limited.

    Does the Financial Secretary not think that the previous directorships which these gentlemen hold are so very important that, considering the necessity of reducing the personnel in the directorate of the Communications Company, he might appoint directors who do not hold all these directorial offices?

    Housing (Huts, Welling)

    53.

    asked the Minister of Health if he has now received the report of his inspectors who visited the wooden hutments at Welling, Kent, on 9th June; and whether he is aware that these huts are being offered for sale?

    The reply to both parts of the question is in the affirmative.

    56.

    asked the First Commissioner of Works whether His Majesty's Office of Works increased the rents of the Government tenants of the Welling hutments as and when they became vacant; and whether any steps were taken to protect these tenants against excessive increases when they were sold to the present owners?

    The answer to the first part of the question is in the affirmative. As regards the second part, the huts were sold subject to the rights of the tenants in accordance with the usual practice.

    Is the First Commissioner of Works aware that the last Government sold these houses without giving notice to the local authority, and the result is that many tenants are being asked to pay 20s. per week for wooden hutments? [HON. MEMBERS: "Speech!"] I am asking whether the decontrol book in the possession of the First Commissioner of Works was handed over to the new proprietors and is now being accepted in evidence against these tenants? I want to know how they came into possession of it.

    This question has been under discussion between the hon. Member and myself for some considerable time, and I should be much obliged if he will put that question on the Order Paper.

    Calmette Prophylactic Treatment

    54.

    asked the Minister of Health whether he can state the result of the inquiries of the representatives of the Medical Research Council into the death of 20 infants in Lübeck, Germany, following the Calmette prophylactic treatment?

    No, Sir. My right hon. Friend has no information at present beyond that contained in the answer given to my hon. Friend on the 8th instant.

    Census, 1931

    55.

    asked the Minister of Health the date on which it is proposed to take the Census in 1931; and whether any changes are contemplated in the statistical returns to be made?

    My right hon. Friend is still unable to make any announcement with regard to these matters.

    Clerkenwell County Court

    57.

    asked the First Commissioner of Works whether he can make a statement as to the progress of the reconstruction of Clerkenwell County Court?

    Work on the site was commenced in April last, and is now proceeding satisfactorily and according to schedule.

    Surplus Government Property (Disposal)

    49.

    asked the Chancellor of the Exchequer whether the committee set up by him to report on the sale of surplus Government property has yet reported; what land has been sold since July, 1929; and what is the total amount of money accruing to the Exchequer from these sales?

    The answer to the first part of the question is in the negative. With regard to the latter part of the question, I am making inquiry of the Departments concerned, and will inform the hon. and gallant Member of the result in due course.

    Members Of Parliament (Travelling Facilities)

    48.

    asked the Chancellor of the Exchequer whether, in order to encourage civil aviation in this country, the Government will consider allowing Members of Parliament to travel by air to their constituencies with the use of their railway vouchers if they are willing to pay the excess charges involved?

    While I sympathise with the desire of the hon. and gallant Member to further the object which he has in mind, it would not be practicable under the terms of the Parliamentary Vote relating to the travelling expenses of Members to adopt the arrangement which he suggests.

    Egypt

    (by Private Notice) asked the Secretary of State for Foreign Affairs, in view of the increasing gravity of the situation in Egypt, what steps the Government are taking inland there for the safety of foreign subjects?

    His Majesty's Government are fully alive to the obligations of this country under the Declaration of 1922 to ensure the protection of foreign lives and interests. Official information goes to show that the situation is well in hand, and the Egyptian Government have themselves indicated that there is no need for special protective measures for foreigners.

    In view of what has happened, does the right hon. Gentleman propose to leave the offer of the Treaty open?

    Passenger Aircraft (Safety Regulations)

    (by Private Notice) asked the Under-Secretary of State for Air if, in view of the distressing calamity which occurred yesterday resulting in the death of six people, he will tell the House what control the Air Ministry exercises over passenger-carrying aircraft, whether such machines are subject to periodical inspection to ascertain if they are airworthy, how often such inspections are made and if he is satisfied that the regulations are carried out in such a manner as to reduce the risk of accidents to a minimum?

    It is difficult, within the compass of a Parliamentary reply, to summarise the very elaborate and stringent regulations prescribed by the Air Ministry in order to ensure the safety of the passengers and crew of aircraft plying for public service, such as that to which yesterday's most regrettable accident occurred. I may, however, say briefly that the Air Ministry requires such aircraft to be inspected by a competent ground engineer—that is to say, a ground engineer licensed by the Air Ministry after full investigation of his experience and qualifications—within 24 hours of each flight being undertaken.

    Following on this inspection the ground engineer is required to furnish a certificate in writing that the aircraft is safe for flight. The inspection covers not only the machine, but also the engine or engines and instruments. In addition, before the flight actually commences, the pilot or person in charge of the aircraft has to satisfy himself that various requirements have been met, and in particular that the loading of the aircraft is such as to ensure safety in flight; to assist him an actual load sheet has to be completed containing certain prescribed particulars.

    While I am naturally not in a position to make any definite statement in regard to the machine to which the accident occurred yesterday, until the investigation of the Air Ministry's Inspector of Accidents is complete, I may say that I am in general satisfied that the regulations are most strictly complied with, and that everything possible is done by those responsible for the operation of air services to reduce the risk of accidents to a minimum. The remarkably few accidents which have occurred to British aircraft employed on regular air services of recent years is in itself a striking testimony to this fact.

    I should like to take this opportunity of conveying to the relatives of those who have lost their lives an expression of my Noble Friend's and my own most profound sympathy with them in their bereavement, with which I am sure the House as a whole will wish to be associated.

    Can the Under-Secretary of State say whether this was a British-built machine?

    I do not think it was a British machine. A British company was operating the flight.

    Are any regulations issued as to the length of the inspection by the ground engineer?

    I have already said that it is impossible within the limits of a Parliamentary reply to state the whole of the case, but I shall be pleased to give the hon. Member the actual regulations if he wishes to have them.

    Can the Under-Secretary say whether these regulations pertain to an airship leaving foreign places?

    They are the regulations of the British Air Ministry. Obviously, we cannot control flights from other countries.

    Can the hon. Member say whether this was a French or a German machine?

    Business Of The House

    May I ask the Prime Minister how far the Government intend to go with the business on the Order Paper to-day?

    It is the intention to take the first four items on the Order Paper.

    May I ask whether the Prime Minister has any information to give the House regarding the business for to-morrow; whether he has decided to introduce the London Naval Treaty Bill, or whether it will be postponed until the Autumn?

    I have made further inquiries about that Bill, and, in the circumstances, I think it would be very advisable to take it to-morrow, especially after the ratification of the

    Division No. 444.]

    AYES.

    [3.42 p.m.

    Adamson, W. M. (Staff., Cannock)Church, Major A. G.Gray, Milner
    Aitchison, Rt. Hon. Craigie M.Cluse, W. S.Greenwood, Rt. Hon. A. (Colne)
    Alpass, J. H.Clynes, Rt. Hon. John R.Grenfell, D. R. (Glamorgan)
    Ammon, Charles GeorgeCocks, Frederick SeymourGriffiths, T. (Monmouth, Pontypool)
    Arnott, JohnCove, William G.Groves, Thomas E.
    Attlee, Clement RichardCowan, D. M.Grundy, Thomas W.
    Ayles, WalterDaggar, GeorgeHall, F. (York, W. R., Normanton)
    Baldwin, Oliver (Dudley)Dallas, GeorgeHall, G. H. (Merthyr Tydvil)
    Barnes, Alfred JohnDalton, HughHall, Capt. W. G. (Portsmouth, C.)
    Barr, JamesDavies, Rhys John (Westhoughton)Hamilton, Mary Agnes (Blackburn)
    Batey, JosephDay, HarryHamilton, Sir R. (Orkney & Zetland)
    Bellamy, AlbertDenman, Hon. R. D.Hastings, Dr. Somerville
    Benson, G.Dukes, C.Hayday, Arthur
    Bentham, Dr. EthelDuncan, CharlesHayes, John Henry
    Bowen, J. W.Ede, James ChuterHenderson, Rt. Hon. A. (Burnley)
    Bowerman, Rt. Hon. Charles W.Edge, Sir WilliamHenderson, Thomas (Glasgow)
    Broad, Francis AlfredEdmunds, J. E.Herriotts, J.
    Brooke, W.Edwards, E. (Morpeth)Hirst, G. H. (York W. R. Wentworth)
    Brothers, M.Egan, W. H.Hollins, A.
    Brown, C. W. E. (Notts, Mansfield)Elmley, ViscountHopkin, Daniel
    Brown, Ernest (Leith)England, Colonel A.Hore-Belisha, Leslie
    Brown, Rt. Hon. J. (South Ayrshire)Freeman, PeterHorrabin, J. F.
    Brown, W. J. (Wolverhampton, West)Gardner, B. W. (West Ham, Upton)Hudson, James H. (Huddersfield)
    Buchanan, G.Gardner, J. P. (Hammersmith, N.)Hunter, Dr. Joseph
    Burgess, F. G.Gill, T. H.Hutchison, Maj.-Gen. Sir R.
    Buxton, C. R. (Yorks, W. R. Elland)Gillett, George M.Isaacs, George
    Caine, Derwent Hall-Glassey, A. E.Jenkins, W. (Glamorgan, Neath)
    Cameron, A. G.Gossling, A. G.John, William (Rhondda, West)
    Carter, W. (St. Pancras, S. W.)Graham, D. M. (Lanark, Hamilton)Jones, F. Llewellyn- (Flint)
    Charleton, H. C.Graham, Rt. Hon. Wm. (Edin., Cent.)Jones, Rt. Hon. Lelf (Camborne)
    Chater, DanielGranville, E.Jones, Morgan (Caerphilly)

    Treaty yesterday by the United States Senate. Therefore, we propose to take that Bill; and, in view of the debate yesterday, the ground has been so well covered that the consideration of the Bill on Second Reading might be reasonably brief. Might I also say, with regard to the Public Works (Loans) Bill and the Public Works Facilities Bill, which will be the Third and Fourth Orders on the Paper to-morrow, that I understand some representations have been made to the effect that, if the order of these two Bills was exchanged, it would be more convenient to the House. If that is so, that alteration will be made.

    I hope the right hon. Gentleman will see his way to make that alteration.

    The only other question is, what Orders are to be put on the Paper for Thursday? I think that question was left open.

    Motion made, and Question put,

    "That the Proceedings on Government Business be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."—[The Prime Minister.]

    The House divided: Ayes, 239; Noes, 132.

    Jowett, Rt. Hon. F. W.Morley, RalphShort, Alfred (Wednesbury)
    Jowitt, Sir W. A. (Preston)Morris, Rhys HopkinsSimmons, C. J.
    Kelly, W. T.Morrison, Herbert (Hackney, South)Simon, E. D. (Manch'ter, Withington)
    Kennedy, ThomasMorrison, Robert C. (Tottenham, N.)Sinclair, Sir A. (Caithness)
    Kenworthy, Lt.-Com. Hon. Joseph M.Mort, D. L.Sinkinson, George
    Kirkwood, D.Moses, J. J. H.Smith, Ben (Bermondsey, Rotherhithe)
    Knight, HolfordMosley, Sir Oswald (Smethwick)Smith, Frank (Nuneaton)
    Lambert, Rt. Hon. George (S. Molton)Muff, G.Smith, H. B. Lees (Keighley)
    Lang, GordonMurnin, HughSmith, Tom (Pontefract)
    Lansbury, Rt. Hon. GeorgeNewman, Sir R. H. S. D. L. (Exeter)Smith, W. R. (Norwich)
    Law, A. (Rosendale)Noel Baker, P. J.Snell, Harry
    Lawrence, SusanNoel-Buxton, Baroness (Norfolk, N.)Snowden, Rt. Hon. Philip
    Lawrie, Hugh Hartley (Stalybridge)Oldfield, J. R.Sorensen, R.
    Lawson, John JamesOliver, P. M. (Man., Blackley)Stamford, Thomas W.
    Lawther, W. (Barnard Castle)Owen, H. F. (Hereford)Stephen, Campbell
    Leach, W.Palin, John HenryStrachey, E. J. St. Loe
    Lee, Frank (Derby, N. E.)Paling, WilfridSullivan, J.
    Lee, Jennie (Lanark, Northern)Palmer, E. T.Sutton, J. E.
    Lees, J.Parkinson, John Allen (Wigan)Taylor, R. A. (Lincoln)
    Lewis, T. (Southampton)Perry, S. F.Thorne, W. (West Ham, Plaistow)
    Lloyd, C. EllisPethick-Lawrence, F. W.Thurtle, Ernest
    Logan, David GilbertPhillips, Dr. MarionTillett, Ben
    Longbottom, A. W.Picton-Turbervill, EdithTinker, John Joseph
    Longden, F.Pole, Major D. G.Townend, A. E.
    Lovat-Fraser, J. A.Potts, John S.Trevelyan, Rt. Hon. Sir Charles
    Lowth, ThomasPybus, Percy JohnVaughan, D. J.
    Lunn, WilliamQuibell, D. F. K.Walker, J.
    Macdonald, Gordon (Ince)Ramsay, T. B. WilsonWatkins, F. C.
    MacDonald, Rt. Hon. J. R. (Seaham)Rathbone, EleanorWatson, W. M. (Dunfermline)
    McElwee, A.Raynes, W. R.Wedgwood, Rt. Hon. Josiah
    McEntee, V. L.Richardson, R. (Houghton-le-Spring)Wellock, Wilfred
    McGovern, J. (Glasgow, Shettleston)Riley, F. F. (Stockton-on-Tees)Welsh, James (Paisley)
    Maclean, Sir Donald (Cornwall, N.)Ritson, J.Welsh, James C. (Coatbridge)
    Macpherson, Rt. Hon. James I.Roberts, Rt. Hon. F. O. (W. Bromwich)West, F. R.
    McShane, John JamesRomeril, H. G.White, H. G.
    Malone, C. L'Estrange (N'thampton)Rosbotham, D. S. T.Whiteley, Wilfrid (Birm., Ladywood)
    Mander, Geoffrey le M.Rowson, GuyWilkinson, Ellen C.
    Mansfield, W.Salter, Dr. AlfredWilliams, David (Swansea, East)
    March, S.Samuel, Rt. Hon. Sir H. (Darwen)Williams, Dr. J. H. (Llanelly)
    Marcus, M.Sanders, W. S.Williams, T. (York, Don Valley)
    Markham, S. F.Sandham, E.Wilson, C. H. (Sheffield, Attercliffe)
    Marley, J.Sawyer, G. F.Wilson, J. (Oldham)
    Marshall, FredSexton, JamesWilson R. J. (Jarrow)
    Mathers, GeorgeShaw, Rt. Hon. Thomas (Preston)Winterton, G. E. (Leicester, Loughb'gh)
    Matters, L. W.Shepherd, Arthur LewisWood, Major McKenzie (Banff)
    Maxton, JamesSherwood, G. H.Wright, W. (Rutherglen)
    Messer, FredShield, George William
    Millar, J. D.Shiels, Dr. DrummondTELLERS FOR THE AYES.—
    Mills, J. E.Shillaker, J. F.Mr. Charles Edwards and Mr.
    Milner, Major J.Shinwell, E.William Whiteley.

    NOES.

    Acland-Troyte, Lieut.-ColonelChristie, J. A.Henderson, Capt. R. R. (Oxf'd, Henley)
    Ainsworth, Lieut.-Col. CharlesChurchill, Rt. Hon. Winston SpencerHorne, Rt. Hon. Sir Robert S.
    Allen, Sir J. Sandeman (Liverp'l., W.)Cockerill, Brig.-General Sir GeorgeHoward-Bury, Colonel C. K.
    Ashley, Lt.-Col. Rt. Hon. Wilfrid W.Cranborne, ViscountHurd, Percy A.
    Atholl, Duchess ofCrichton-Stuart, Lord C.Hurst, Sir Gerald B.
    Atkinson, C.Crookshank, Capt. H. C.Iveagh, Countess of
    Baldwin, Rt. Hon. Stanley (Bewdley)Culverwell, C. T. (Bristol, West)King, Commodore Rt. Hon. Henry D.
    Beaumont, M. W.Cunliffe-Lister, Rt. Hon. Sir PhilipLaw, Sir Alfred (Derby, High Peak)
    Berry, Sir GeorgeDalkeith, Earl ofLeighton, Major B. E. P.
    Betterton, Sir Henry B.Dalrymple-White, Lt.-Col. Sir GodfreyLewis, Oswald (Colchester)
    Birchall, Major Sir John DearmanDavies, Dr. VernonLocker-Lampson, Rt. Hon. Godfrey
    Bird, Ernest RoyDavies, Maj. Geo. F. (Somerset, Yeovil)Locker-Lampson, Com. O. (Handsw'th)
    Bourne, Captain Robert CroftDugdale, Capt. T. L.Long, Major Hon. Eric
    Bowater, Col. Sir T. VansittartEden, Captain AnthonyMacquisten, F. A.
    Bowyer, Captain Sir George E. W.Elliot, Major Walter E.Makins, Brigadier-General E.
    Boyce, H. L.Erskine, Lord (Somerset, Weston-s.-M.)Margesson, Captain H. D.
    Bracken, B.Everard, W. LindsayMarjoribanks, E. C.
    Braithwaite, Major A. N.Falle, Sir Bertram G.Mason, Colonel Glyn K.
    Brass, Captain Sir WilliamFerguson, Sir JohnMeller, R. J.
    Brown, Col. D. C. (N'th'l'd., Hexham)Fermoy, LordMitchell-Thomson, Rt. Hon. Sir W.
    Buckingham, Sir H.Fison, F. G. ClaveringMonsell, Eyres, Com. Rt. Hon. Sir B.
    Burton, Colonel H. W.Forestier-Walker, Sir L.Moore, Sir Newton J. (Richmond)
    Butler, R. A.Ganzoni, Sir JohnMorrison-Bell, Sir Arthur Clive
    Cadogan, Major Hon. EdwardGilmour, Lt.-Col. Rt. Hon. Sir JohnMuirhead, A. J.
    Carver, Major W. H.Grattan-Doyle, Sir N.Newton, Sir D. G. C. (Cambridge)
    Cautley, Sir Henry S.Gretton, Colonel Rt. Hon. JohnNicholson, Col. Rt. Hn. W. G. (Ptrsf'ld)
    Cayzer, Sir C. (Chester, City)Hacking, Rt. Hon. Douglas H.O'Connor, T. J.
    Cayzer, Maj. Sir Herbt, R. (Prtsmth, S.)Hamilton, Sir George (Ilford)O'Neill, Sir H.
    Cazalet, Captain Victor A.Hammersley, S. S.Ormsby-Gore, Rt. Hon. William
    Chamberlain, Rt. Hn. Sir J. A. (Birm., W.)Hannon, Patrick Joseph HenryPeake, Capt. Osbert
    Chamberlain, Rt. Hon. N. (Edgbaston)Haslam, Henry C.Penny, Sir George

    Power, Sir John CecilSinclair, Col. T. (Queen's U., Belfst.)Wallace, Capt. D. E. (Hornsey)
    Pownall, Sir AsshetonSmith, Louis W. (Sheffield, Hallam)Ward, Lieut.-Col. Sir A. Lambert
    Ramsbotham, H.Smith-Carington, Neville W.Warrender, Sir Victor
    Rentoul, Sir Gervais S.Smithers, WaldronWilliams, Charles (Devon, Torquay)
    Richardson, Sir P. W. (Sur'y, Ch'ts'y)Somerville, A. A. (Windsor)Wilson, G. H. A. (Cambridge U.)
    Roberts, Sir Samuel (Ecclesall)Southby, Commander A. R. J.Windsor-Clive, Lieut.-Colonel George
    Ross, Major Ronald D.Stanley, Lord (Fylde)Winterton, Rt. Hon. Earl
    Ruggles-Brise, Lieut.-Colonel E. A.Steel-Maitland, Rt. Hon. Sir ArthurWomersley, W. J.
    Russell, Alexander West (Tynemouth)Stewart, W. J. (Belfast South)Wood, Rt. Hon. Sir Kingsley
    Salmon, Major I.Sueter, Rear-Admiral M. F.Worthington-Evans, Rt. Hon. Sir L.
    Samuel, A. M. (Surrey, Farnham)Tinne, J. A.Young, Rt. Hon. Sir Hilton
    Sandeman, Sir N. StewartTitchfield, Major the Marquess of
    Sassoon, Rt. Hon. Sir Philip A. G. D.Todd, Capt. A. J.TELLERS FOR THE NOES.—
    Savery, S. S.Tryon, Rt. Hon. George Clement.Major Sir George Hennessy and Sir
    Frederick Thomson.

    Cinematograph Films Act (1927) Amendment

    I beg to move,

    "That leave be given to bring in a Bill to amend the Cinematograph Films Act, 1927."
    The Cinematograph Films Act, 1927, was introduced for the purpose of establishing on a permanent basis the film industry of this country, but I think all those who have studied the situation as it is to-day will agree that it has not only failed in that object but has rendered the situation far more difficult than it would otherwise have been. The position is that the distribution of films in this country is very largely in the hands of American interests, is owned or controlled by them, and they are using their powers with the deliberate object of squashing the development of the British industry in this country. They are using their powers to cause to be produced here films of low quality and a low grade so that when British films are shown in the picture-houses of this country they get the reputation of being "British and bad." That is the deliberate policy of the American controlling interests at the present time, and I am introducing this Bill, with the backing of Members on all sides of the House, in order to try to better the situation and give the film industry in this country an opportunity of developing and of being built up to a high position.

    I think nothing shows the strangle-hold which the Americans have at the present time on the industry in this country more than the fact that nearly all the leading picture houses in the West End are owned or controlled by Americans. The Plaza, the Rialto, the Tivoli, the New Gallery, the Marble Arch, the Carlton, the Capitol, the Empire—they are all controlled by American interests. I believe that we could by a Measure of this kind, force the Americans to come to this country to assist in the establishment of of a very large and prosperous film industry in this country. At present the quota goes from 7½ per cent. in 1929 to 20 per cent. in 1936. The amount is so small that Americans can afford to show bad British pictures without interfering with the performance as a whole. I quite admit that there have been many good British pictures, but, in the main, there have been some very bad ones too. The policy of the Bill is to raise the quota gradually and by stages up to 50 per cent. in 1934. In France the quota is 33 per cent. at present, and in Germany it is 50 per cent.

    I do not think that a Measure of this kind has any relevance to the controversy as to Free Trade or Protection. At any rate, I have no time to deal with that question on the present occasion, but I shall be very glad to go into the matter on the Second Reading, and to consider sympathetically in Committee, any Amendments which may be put forward for making the Bill even more perfect than it is. I will make just this observation on that point. Imagine the situation if all the concert halls were controlled by Americans so that the only singers' voices that could be heard were American voices, or suppose—still more horrible thought—that all public halls where meetings could take place were controlled by Americans and that the only politicians that could be heard in this country were Americans. I think the House will realise that this is a matter that has to be considered on its merits, and from a national point of view.

    There is another point in the original Act which has hampered the development of the industry in this country, and that is the requirement that 75 per cent. of the salaries and expenses in connection with the production of a British motion picture must be paid to or expended upon British personnel. If that requirement were in force in the United States, it would destroy and ruin the American film industry. It so happens that many of the great stars who have to be employed in order to make big successes are not by any means all-British. For instance, if such a provision were in operation in the United States it would be impossible for them to employ such artists as Pola Negri, Clive Brooke, Frank Lloyd, Charlie Chaplin, Lili Damita, Dolores del Rio, and many others. In order that we may have the opportunity of hearing distinguished artists of this kind it is proposed in the Bill that not less than 75 per cent. of the films must have been wholly produced in Great Britain including the photographing, the developing, the cutting, and the titling. There is one other provision in the Bill. It proposes to lay dozen that a sum of not less than £12,000 is to be spent on the production of any one film. That is very important. In the United States at least £30,000 is spent in the production of a good film but the American interests in this country have been producing films at a cost of only £3,000 or £4,000—deliberately and necessarily of a very low quality—in order to stamp them as bad. This provision will, in addition to the others, do a great deal to raise the standard.

    From the propaganda point of view of our national trade this question is important. The American Trade Department has calculated that the films exported from the United States have a selling and advertising value of one dollar per foot, and in the first nine months of last year American trade benefited thereby to the extent of 201,000,000 dollars. There are 40,000,000 to 50,000,000 people visiting the cinemas of the world every day. There are 20,000 picture houses in the United States and 4,000 in this country, and of the films that are seen 90 per cent. are American. From the employment point of view also this matter is important because the film industry in the United States is the third largest in the country, and there exists in this country a unique opportunity for building up on a permanent basis the multi-lingual film industry. The "talkies" have revolutionised the whole position. The Americans have to come to Europe now to get into close touch with the foreign artists whom they must have for speaking purposes. Paris is a possible centre, but London (England) is a far better centre, because you can start here with your English version and you can get at short notice your French, your Spanish, your Italian, your German and your Swedish artists over here. I do urge the House to allow this Bill to be brought in and to receive its First Reading. I believe we can do a great deal to give this country the leadership of the world in the film industry through a Measure of this kind.

    I apologise. No doubt East and West will meet. The hon. Member appealed to us, by the good-humoured way in which he asked for leave to introduce this Bill, but I think the Members of this House have never listened to such a piece of unashamed and unadulterated hypocrisy as the bringing forward of a Measure of this nature at this time. In the first place, the time of the House is being taken up by a Measure whose prospects are equivalent to those of a piece of unchilled meat on the Equator. In the second place, here is a protagonist of all that is understood in those blessed words "Free Trade," and yet as far as we are able to learn, the Measure which he is introducing is the absolute negation of everything that is understood under that term. Are we to welcome the manufacturing output of all other countries and regard the free importation of those products as a great benefit to our people and only to draw the line at the American voice—and thereby to exaggerate those international differences which it is the object of hon. Members opposite to smooth away? The hon. Member holds up to us the prospect that our concert halls, our opportunities of entertainment of any sort, even such entertainment as the political speeches of hon. Members opposite, are to be confined entirely to British products, and that we are to hear British voices first, last and all the time.

    The hon. Member says that the extreme limit is 50 per cent. As far as I can see, that is beyond the limit! What I am concerned to show is that the hon. Member, for reasons no doubt satisfactory to himself, is bringing forward a Measure which is diametrically opposed to all those political views he holds with supreme conviction, and which, whenever he has an opportunity within the limits of order, he is prepared to inflict upon Members of this House in the hope that he will be able to convert them. How are the mighty fallen! We had imagined that the hon. Member for East Wolverhampton was a Free Trader with his colleagues on those benches, and that the pure, unadulterated milk was duly pasteurised as far as he was concerned. Now it has gone sour, and we are all disappointed to see that he has fallen from grace to such depths as to bring forward a Measure of this sort. I do not say that, on the merits of this Bill, I am opposed to it, but I am opposed to a Bill of this nature being brought forward at this time of the Session—

    Is the hon. and gallant Member in order in speaking if he is not opposed to the Bill?

    Question put, and agreed to.

    Bill ordered to be brought in by Mr. Mander, Captain Sir Ernest Bennett, Viscount Elmley, Mr. Lovat-Fraser, Lieut.-Colonel Fremantle, Mr. Horrabin, Viscount Lymington, Sir Stewart Nairne Sandeman, and Mr. Graham White.

    Cinematograph Films Act (1927) Amendment Bill

    "to amend the Cinematograph Films Act, 1927," presented accordingly, and read the First time; to be read a Second time upon Friday, and to be printed. [Bill 245.]

    Children

    I beg to move,

    "That leave be given to bring in a Bill to amend the Law relating to juvenile offenders."
    I am happy to say that this Bill is nonpartisan almost to the last word, and I feel sure that my appeal to the House to allow me to bring it in will not be in vain. It is fair, however, that I should put before the House the main provisions of the Measure. All the contents of the Bill are based largely on the recommendations of the Departmental Committee of the Home Office which reported on the subject in March, 1927. Members of the House, I am sure, will agree with me in one thing, namely, that this Bill is long overdue. The main provisions are these: It is proposed to alter the title and the character of our industrial and reformatory schools, and provide that they shall be very much more than hitherto training grounds and educational institutions for the young persons who are sent there. It is intended, too, that the selection of the particular school to which the offender is to be sent shall be left to the Court. The detention of the child in one of these schools shall be for a minimum period of six months and a maximum of three years. At the present time the minimum is three years and the maximum five. The Secretary of State will be entitled to frame the rules and to transfer children from one school to another in accordance with the bent, desire and moral training required of the child.

    The Bill also provides for raising the age limit of offenders in juvenile Courts from 16 to 17 years—a very desirable proposition so I understand from those who are better qualified to speak on the subject than I am. It will abolish places of detention and substitute remand homes for these children. It will abolish also the registration of convictions in respect of offences committed by children. I ought to explain how very important it is that convictions for trivial offences by children should not be registered. I was a member of the Committee to which I have referred, and found to my astonishment that the registration of a conviction against a child follows him throughout life. In fact, if he tells the truth later on in his career he can neither join His Majesty's Navy, nor emigrate to the Dominions or any of our Colonies, even though the offence may have been the most trivial imaginable. Strangely enough, the same boy can however join the Army. I could never understand why there should be this difference.

    The Bill does something else. It abolishes the death penalty up to the age of 18 years. That was a unanimous recommendation of the Committee. Above all things, I feel sure the House will agree with me when I suggest that the time has arrived for the whipping of children to stop. [An HON. MEMBER: "Why?"] If the hon. Member will allow me, I will explain the reason. The Courts of this country themselves are gravitating towards the total abolition of whipping, as will be seen by the figures I will give. In 1917, there were nearly 5,000 orders for whipping of children. In 1927 the number had declined lo 230, showing that the justices themselves do not like the task of ordering whippings. Whipping a child by an order of the Court differs fundamentally from the same kind of treatment meted out by his parents or schoolmaster. To pay an official to whip a boy, in my view, not only degrades the child, but brutalises the man who does the whipping.

    It may interest the House if I give another set of figures as to sending young persons to prisons in this country. The tendency of the time is definitely against sending any young person to prison at all if that can be avoided, as will be seen by the figures I am about to give. In 1921, there were 3,643 boys under the age of 21 sent to prison. In 1928, the figures had declined to 1,721. The numbers of girls for the same two years were 670 and 328, respectively. I ought to add another word on this issue. It is really a tragedy to find in the last report of the Prison Commissioners that in 1928, the last year for which figures are available, 247 boys and 11 girls under 18 years of age were sent to the prisons of our country. I feel sure that I can appeal to every hon. Member that it is better to do something to prevent these young people going to prison at all. We want, further, in this Bill to prevent the Press either publishing the name, address, photograph or the name of the school of any of these young persons who commit offences against the State.

    We pass on to deal with probation. Probation has been a great success. In fact we want to extend it and make important changes in respect of it. One change that we want to make is this: We are very anxious that there should be no religious test when a probation officer is appointed in any part of the land. I think that a religious teat for this particular post is wrong in prin- ciple, and I trust that the House will allow that, at any rate, this proposal of mine is a very good one. We want also to make a provision whereby a children's court shall not be held in an ordinary Court of Law where adults are tried. We want to have the children tried in a Court limited entirely to children.

    Then we want to secure that only courts of assizes and quarter sessions shall have power to commit to Borstal, and that pending sentence any child or young person under the age of 21 shall be detained at an observation centre. We want to establish these observation centres on the lines of what I saw myself in Belgium. The House will pardon me when I say, that I have always prided myself, and have told my friends in foreign countries that, on the whole, our laws in this country are far in advance of the laws of other countries. In this particular connection, however, we are in some respects very much behind other countries. We want to establish these observation centres, because it is found, in dealing with cases of young persons and children, that they do not always quite understand that they are committing offences against the law. They are totally incapable mentally of understanding what they are doing; in fact, a considerable number are mentally defective, and, consequently, we think that they ought to be sent to these observation centres to be treated physically and mentally.

    There is one other provision, and it is a very important one. There are legal gentlemen who understand this problem very much better than I do, but I gather that it is of extreme importance that we should raise what I would call the age of criminal responsibility. The age, I am told, for centuries past in this country has been seven, and a little chap, as soon as he passes seven years of age, is supposed to understand all the dire consequences that will follow him under the English law if he commits an offence against the State. We want to raise the age, at any rate, by one year, and to say that the age of criminal responsibility shall be eight, and not seven. I have now put before the House what I believe are the main provisions of this Measure, and I venture to suggest that I have to-day advocated the cause of thousands of young people who are not able to speak for themselves. I have no hesitation, therefore, in believing that the House will willingly allow me to bring in this Bill.

    Question put, and agreed to.

    Bill ordered to be brought in by Mr. Rhys Davies, Viscountess Astor, Mr. Foot, Mr. Ede, Sir John Withers, and Mr. Llewellyn-Jones.

    Children Bill

    "to amend the Law relating to juvenile offenders," presented accordingly, and read the First time; to be read a Second time upon Tuesday next, and to be printed. [Bill 246.]

    British Museum Bill Lords

    Read the First time; to be read a Second time To-morrow, and to be printed. [Bill 247.]

    Message From The Lords

    That they have agreed to—

    • Marriages Provisional Order Bill,
    • Salford Provisional Order Bill,
    • Aberdeen Corporation Order Confirmation Bill,
    • St. Helens Corporation (Trolley Vehicles) Provisional Order Bill,
    • Wolverhampton Corporation (Trolley Vehicles) Provisional Order Bill, without Amendment.
    • Manchester Extension Bill, with Amendments.

    Amendment to—

    • Workmen's Compensation (Silicosis and Asbestosis) Bill [Lords], without Amendment.

    Amendments to—

    • Ascot District Gas and Electricity Bill [Lords],
    • Brixham Gas and Electricity Bill [Lords],
    • Middlesex County Council Bill [Lords], without Amendment.

    That they have passed a Bill, intituled, "An Act to confirm a Provisional Order under the Private Legislation Procedure (Scotland) Act, 1899, relating to the East Lothian Western District Water." [East Lothian Western District Water Order Confirmation Bill [ Lords.]

    East Lothian Western District Water Order Confirmation Bill Lords

    Ordered (under Section 7 of the Private Legislation Procedure (Scotland) Act, 1899) to be considered To-morrow.

    Orders Of The Day

    Finance Bill

    As amended, further considered.

    Clause 25—(Valuation For Purposes Of Schedules A And B To Be Made Quinquennially In Great Britain)

    I beg to move, in page 20, line 33, at the end, to insert the words:

    "Provided that no increase of assessment shall take effect in any one year by more than five per cent. in excess of the previous assessment."
    The purpose of this Amendment is very far-reaching. I think everybody in the country will realise that beneath these formal phrases lies one of the most lucrative parts of the right hon. Gentleman's Budget. I am told that it is anticipated that at least £10,000,000 will be realised as a result of this increase of assessment. If the House will forgive me, I will explain very shortly what lies behind this increased assessment. The annual value of real property is an asset both for local and national taxation throughout England, but there is a great distinction between local and national taxation, because the object of the former, the taxation which comes from rates, is to raise a fixed sum for a limited area every year, and therefore it does not very much matter if the rating of property goes up, because the poundage will go down, whereas, on the other hand, in national taxation, which is raised by my right hon. Friend, if the assessment of any property goes up, the effect is immediate. That is the fundamental difference between local and national taxation.

    The rating of property has been left largely to the whim and caprice of the local authorities, and over a great area of this country there has been no reassessment for rates for very many years indeed. On the other hand, for Income Tax purposes, there has lately been in practice a re-assessment every five years, but almost invariably, or at any rate in very many cases, the local taxing authorities followed the assessment of the rating authorities, thereby in practice agreeing to the principle of a single valuation. The consequence is that after the assessments have been raised for rates, as they were by the new valuation, when there comes the new valuation under Schedule A brought forward in this Bill, assessments will immediately go up, sometimes to a very great extent indeed.

    There is one misrepresentation which I should like to contradict at the very outset, which was raised by the Press and by some of the supporters of the right hon. Gentleman opposite. They complimented the right hon. Gentleman in front of me and myself as being exponents of the class war and standing up for the interests of our class. We do not appreciate that sort of compliment on this side of the House. We are not standing up for any particular class, and I shall be able to show that this provision, although it is in principle absolutely right, will, by its sudden imposition, affect not only property owners, Income Taxpayers, and Super-taxpayers, but almost everybody in this country who enters into a contract of landlord and tenant. That can be shown to demonstration, and the only object of this Amendment is to act as a buffer, to prevent immediate injustices arising out of a sudden change.

    In the Committee stage I pleaded particularly the case of the owner-occupier with a fixed income who has bought a property and planned his life with the purpose of remaining in one home which he has purchased, but the right hon. Gentleman opposite swept that consideration aside. He said, "After all, he can always sell his home; he can realise his property and move elsewhere." The right hon. Gentleman did not realise that there is a considerable number of people who do not wish to move from their homes and who are prepared to make many sacrifices to remain in their homes; and my plea for the owner-occupier remains unchanged. I put that one instance, but, of course, there are many other considerations.

    I would like to ask the right hon. Gentleman to reconsider his view. When he thinks he is merely putting on a tax and that there is an end of it, he does not know that the result of his tax reverberates throughout the whole community. An increased assessment coming suddenly will, of course, affect the person who pays Income Tax, and that, of course, is a small class, whom the right hon. Gentleman does not usually consider. He regards them as cows to be milked, as proper prey, and I can understand his particular point of view. It is a well-known Socialist argument, and he has no reason to be afraid of Income Taxpayers and Super-taxpayers at the poll. He will, however, by this increase of assessment, bring into the Income Tax class and the Super-tax class people who were never in before, and therefore he will have just a little more reason to be afraid as regards the votes of the people who will be affected by this sudden change.

    Then, at the other extreme end of the scale, there is the holder of the old age pension under the original Act with a means qualification. The right hon. Gentleman knows very well that there are people who have served their masters faithfully in the past who, under an old system of morals perhaps, an old system of generosity, have been given houses to live in for nothing, or at any rate rent free, or it may be that these houses are their own. They will be re-assessed, so as to bring them outside the old property qualification, and they will be deprived, unless the right hon. Gentleman makes any particular provision to the contrary, of their old age pension under the original Act. If the right hon. Gentleman has an answer to that point, I shall be glad to hear it.

    Again, there will be much greater results than mere direct results from this change, and I would like the right hon. Gentleman to consider the case of the ordinary tenancy of house property. The landlord in almost every case throws upon the tenant the burden of assessment beyond the rent that he pays, and so, if he has an increased assessment, every tenant in this country will have to pay under Schedule A to his landlord, or, if he does not, he will have to pay an increased rent. The right hon. Gentleman may be very unwilling to believe it, but there are many large landlords who build properties for the benefit of the working classes and gain practically no profit whatever for themselves—there was a notable instance only a week ago, in the close neighbourhood of this House—and the result is that if there is an increased assessment, those properties will not be able to be run on the old lines. These large working-class tenement houses will have either to be run at a loss to the landlord, which is not likely, or he will raise his rents, and so this very considerable class of people throughout England will be affected. Working people in working-class tenements will have to pay increased rents, and they will, perhaps, thank the right hon. Gentleman for introducing this provision.

    I have shown, I think, that this will have very far-reaching effects on tenants, and not only so, but that the increased taxation will destroy or affect the value of property which has been acquired by purchase. Every single owner of real property will be affected by this change. In the new Doomsday Book of 1875 it was proved that there were 1,000,000 owners of real property in this country. The ownership of real property in this country is not confined, as many hon. Members opposite think, to a few large property owners who draw upon the strength and wealth of the working classes. The real property of this country, owing to the spread of the building society movement, is owned by millions of people, and they will all be affected by this sudden change.

    I would only ask the right hon. Gentleman to give some effect to the principle which I have expressed in this Amendment, and make the change gradual. It is, after all, a principle which has been applied where local authorities have taken in larger areas. They do not put the increased rates upon the new area at once; they impose a system of graduation, and, therefore, I ask the right hon. Gentleman to consider the very far-reaching effects next year of this new Clause. I ask him to safeguard the interests of property owners and persons who dwell in houses in this country, and if I could produce no other argument to urge upon him, I would urge upon him the unpopularity which will inevitably come upon his head and upon the Government if he does not give effect to the principle contained in this Amendment.

    I beg to second the Amendment.

    It is always a hardship suddenly to be called upon to pay an increase of taxation, especially when that hardship is only falling upon a few and not upon all alike. The whole idea behind this Clause is that there is to be a really substantial increase of taxation upon property owners, and in a great many cases that may work extreme hardship. It will in most cases be an increase not accompanied by any increase of income, because where there has been an increase of income, the assessments have been raised in the past. The cases here that will be hard hit will be cases where there is no increased income to meet the increased taxation, and therefore there will necessarily be a great many cases of hardship. When a change of that kind is being made, I think it is only right that the increase should be graduated in the way suggeested in the Amendment.

    The hon. Member for Eastbourne (Mr. Marjoribanks), who moved this Amendment, succeeded very well in making a mountain out of something much less titan a molehill. It will be remembered that we discussed this question at some length in Committee on a similar Amendment, which the Committee rejected overwhelmingly. One would have imagined, from what the hon. Member said, that some proposal was being introduced, for the first time, of a revolutionary character, a proposal of confiscation that was going to bring hundreds of millions out of the pockets of the poor property owners of this country. The hon. Gentleman made a statement about £10,000,000 but I think he had in his mind 10,000,000 assessments. There are 10,000,000 assessments, and it is estimated that these new assessments for the provinces and for the Metropolis will raise less than £1,000,000, or an average of less than 2s. per assessment, so that the hon. Gentleman has used all his eloquence upon a very small thing. There is nothing in this proposal except that we are assimilating the procedure in London in regard to valuation to that which has been working very satisfactorily in the provinces for many years. That is all that there is in this proposal. It is proposed to ascertain whether any change has occurred in the value of property during the preceding five years, and in many cases, no doubt, there will be a reduction in the assessment while in some cases there will be an increase.

    Speaking during the Committee stage, the hon. Member said that in his own constituency there are cases where property has doubled in its annual value during the period of five years. He instanced cases where property had gone up from £100 to £200 a year. Let us get down to the Amendment of the hon. Member, because a great deal of what he said was of a general character, denouncing the whole system of assessment upon property for Income Tax purposes. He is proposing that there shall not be an increase of more than 5 per cent. in the valuation when the quinquennial valuation takes place. That is perfectly absurd. The purpose of the quinquennial valuation is to ascertain what the value of property is. The hon. Gentleman says that if property is increased by 100 per cent., to take his own illustration, if it is increased from £100 to £200, only £105 shall be taken as the value. Therefore, the property owner is to be relieved of assessment of £95 at the expense of the other taxpayers. I am quite sure that the House will reject this Amendment, just as it rejected the Amendment when it was discussed in Committee. There is not one shadow of justification for such a proposal, and I could never think of accepting it.

    The Chancellor of the Exchequer, with his customary vehemence, dealt summarily with the Amendment. Let me recall what he said in Committee when this proposal was being discussed. My hon. Friend raised the point, which is a very germane point, that if local assessments are wrong, it does not matter very much, because the rate in the £ is the same for all. He said that if the assessable value be low, the poundage rate would be so much higher, and he went on to say that that was not the case with the Income Tax. The right hon. Gentleman said:

    "But is it not? He says that if we raise the assessment we get a larger return and that is quite true, but just as the amount of money needed by the local authority is a fixed sum, so the amount which the Exchequer wants from Income Tax is also a fixed sum."
    We join issue with him wholly and completely upon that point. He went on to say:
    "If the assessments under Schedule A were increased, the yield would be greater and, then, just as in the case of the revenue of the local authority, unless the needs of the national Exchequer were increased there would be provision in that increased yield from Schedule A for a reduction in the general rate."—[OFFICIAL REPORT, 19th June, 1930; col. 718, Vol. 240.]
    He tries to escape from the horns of his dilemma by saying, "unless the needs of the national Exchequer were increased." In the case of the rates of a locality, where you are practically dealing with a single tax, if the basis upon which the rates are levied is low, the rate will be high, and vice versa. In the case, however, of multiple taxes, such as the Chancellor of the Exchequer raises, any particular class of taxpayer does not get any reduction unless the Chancellor chooses to make a reduction in the tax. The Chancellor says that we are making a mountain out of a molehill, and that an increase of only £1,000,000 is involved. Let me point out how much that strengthens the argument which we are bringing forward. This £1,000,000 is to be raised from 10,000,000 assessments, and 50 per cent., by the right hon. Gentleman's own statement, is to be levied on 800,000 assessments alone. That is a very considerable mountain to the 800,000 assessments out of which more than half of the new impost is to be raised. Does not the Chancellor of the Exchequer realise that in the case of the annexation of London by the provinces, Londoners are only asking for the same proposals as in the case of the annexation of a wealthy region in local government should be applied in the case of the annexation of a wealthy region in national government. The points are precisely similar. Step by step the increase which is granted in the case of local government could reasonably be granted in the case of national government also.

    The £500,000 increase which is to be thrown at a single blow upon 800,000 assessments will be a very marked increase, and it will have an injurious effect not only upon the owners, but eventually upon the occupiers in these regions. My hon. Friend's Amendment has been brought forward from the point of view of ordinary reasonable fairness in administration, and in order to graduate the burden when a sudden change in legislation has to be introduced. It is unworthy of the right hon. Gentleman to dismiss it so summarily, and to suggest that it is merely a molehill. It is necessary for us to test the sense of the House once more on this matter. We may have been defeated in Committee, and we may again be defeated on Report, but, sooner or later it will be evident to the sense of the country, and certainly, I am sure, to the sense of the Metropolis, that we are right in the proposal that we are now making.

    As time goes on the arguments of the Chancellor of the Exchequer become quainter and quainter. Very rarely has he given his case away so absolutely as he has done this afternoon He said that he could not possibly accept the Amendment. He poured a certain amount of his well-known scorn on my hon. Friend's Amendment; then, having done that, he as usual completely gave his case away. He generally does it sooner or later, but it was curious how he did it this afternoon. He proceeded to say that my hon. Friend has mistaken £10,000,000 for 10,000,000 assessments. He then had his own nice little sum worked out according to his opinion that the amount gained by the Treasury would be about only 2s. a head. If he takes that 2s. and considers it in proportion to the total amount which will come in to Income Tax under the whole of the assessments, he will see that he has given away entirely his case against this Amendment, because what the Amendment does is to ask that it shall not be raised in any one year by more than 5 per cent.; so that if his arguments are right, obviously, as far as the 5 per cent. which we are asking is concerned, he is being given very much more than he would get under the Bill as it stands.

    He knows perfectly well that he is not getting £1,000,000. That is an estimate put forward for the sake of argument, and he hopes that he has some means whereby he can get a considerable increase in the total amount. I am glad that my hon. Friend has raised this Amendment once more, because there are a large number of people who will find in the course of the next few years a considerable burden imposed on them in this way. It will particularly hit a large number of people who have that quality of thrift which the Chancellor has praised when it suits him. On this occasion it does not suit him. He has shown once again that he is not using this Budget merely as a means of collecting revenue, but for the deliberate purpose of injuring a certain section of the community. I am certain that he will hit a great many more people than he imagines, and when the repercussions come back on to his head, he will find that he has done something the meaning of which he did not realise when he started it. This is the action not so much of the Chancellor of the Exchequer as of the collecting revenue authority in their determination to grind more and more out of the taxpayers.

    Not only will there be the tax to be collected, which I understand will be £500,000 for London alone, but there is the cost of the valuation, which the country should realise will not be a small amount. It has emerged that there will be 800,000 assessments in London alone, and the amount to be raised by the change will be £500,000. I have had some experience of municipal work, and I know that the assessment of different types of property in the Administrative County of London will be no easy task.

    I do not think that this Amendment has anything to do with the cost of valuation.

    Division No. 445.]

    AYES.

    [4.44 p.m.

    Acland-Troyte, Lieut.-ColonelFerguson, Sir JohnMorrison-Bell, Sir Arthur Clive
    Ainsworth, Lieut.-Col. CharlesFermoy, LordMuirhead, A. J.
    Albery, Irving JamesFielden, E. B.Newton, Sir D. G. C. (Cambridge)
    Amery, Rt. Hon. Leopold C. M. S.Ford, Sir P. J.Nicholson, Col. Rt. Hn. W. G. (Ptrsf'ld)
    Atholl, Duchess ofForestier-Walker, Sir L.O'Connor, T. J.
    Atkinson, C.Ganzoni, Sir JohnO'Neill, Sir H.
    Baldwin, Rt. Hon. Stanley (Bewdley)Gilmour, Lt.-Col. Rt. Hon. Sir JohnOrmsby-Gore, Rt. Hon. William
    Berry Sir GeorgeGlyn, Major R. G. C.Peake, Capt. Osbert
    Betterton, Sir Henry B.Gower, Sir RobertPenny, Sir George
    Birchall, Major Sir John DearmanGuinness, Rt. Hon. Walter E.Peto, Sir Basil E. (Devon, Barnstaple)
    Bird, Ernest RoyHacking, Rt. Hon. Douglas H.Power, Sir John Cecil
    Bourne, Captain Robert CroftHamilton, Sir George (Ilford)Pownall, Sir Assheton
    Bowater, Col. Sir T. VansittartHammersley, S. S.Ramsbotham, H.
    Brass, Captain Sir WilliamHannon, Patrick Joseph HenryRentoul, Sir Gervals S.
    Brown, Col. D. C. (N'th'l'd., Hexham)Harvey, Major S. E. (Devon, Totnes)Richardson, Sir P. W. (Sur'y, Ch'ts'y)
    Buckingham, Sir H.Haslam, Henry C.Roberts, Sir Samuel (Ecclesall)
    Burton, Colonel H. W.Henderson, Capt. R. R. (Oxf'd, Henley)Rodd, Rt. Hon. Sir James Rennell
    Butler, R. A.Hennessy, Major Sir G. R. J.Ross, Major Ronald D.
    Cadogan, Major Hon. EdwardHills, Major Rt. Hon. John WallerRuggles-Brise, Lieut.-Colonel E. A.
    Carver, Major W. H.Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.Samuel, A. M. (Surrey, Farnham)
    Cautley, Sir Henry S.Horne, Rt. Hon. Sir Robert S.Sandeman, Sir N. Stewart
    Cayzer, Sir C. (Chester, City)Howard-Bury, Colonel C. K.Savery, S. S.
    Chamberlain, Rt. Hn. Sir J. A. (Birnt., W.)Hunter-Weston, Lt.-Gen. Sir AylmerSinclair, Col. T. (Queen's U., Belfast)
    Christie, J. A.Hurd, Percy A.Smith-Carington, Neville W.
    Colfox, Major William PhilipHurst, Sir Gerald B.Smithers, Waldron
    Cranborne, ViscountIveagh, Countess ofSomerville, A. A. (Windsor)
    Crichton-Stuart, Lord C.King, Commodore Rt. Hon. Henry D.Somerville, D. G. (Willesden, East)
    Croom-Johnson, R. P.Lane Fox, Col. Rt. Hon. George R.Southby, Commander A. R. J.
    Culverwell, C. T. (Bristol, West)Law, Sir Alfred (Derby, High Peak)Stanley, Lord (Fylde)
    Dalkeith, Earl ofLeighton, Major B. E. P.Stanley, Maj. Hon. O. (W'morland)
    Dalrymple-White, Lt.-Col. Sir GodfreyLewis, Oswald (Colchester)Steel-Maitland, Rt. Hon. Sir Arthur
    Davidson, Rt. Hon. J. (Hertford)Locker-Lampson, Rt. Hon. GodfreyStewart, W. J. (Belfast, South)
    Davies, Dr. VernonLocker-Lampson, Com. O. (Handsw'th)Sueter, Rear-Admiral M. F.
    Davies, Maj. Geo. F. (Somerset, Yeovil)Long, Major Hon. EricThomson, Sir F.
    Duckworth, G. A. V.Macquisten, F. A.Titchfield, Major the Marquess of
    Dugdale, Capt. T. L.Makins, Brigadier-General E.Todd, Capt. A. J.
    Eden, Captain AnthonyMargesson, Captain H. D.Tryon, Rt. Hon. George Clement
    Edmondson, Major A. J.Marjoribanks, E. C.Turton, Robert Hugh
    Elliot, Major Walter E.Mason, Colonel Glyn K.Vaughan-Morgan, Sir Kenyon
    Erskine, Lord (Somerset, Weston-s-M.)Mitchell-Thomson, Rt. Hon. Sir W.Ward, Lieut.-Col. Sir A. Lambert
    Everard, W. LindsayMonsell, Eyres, Com. Rt. Hon. Sir B.Warrender, Sir Victor
    Falle, Sir Bertram G.Moore, Sir Newton J. (Richmond)Williams, Charles (Devon, Torquay)

    It will include the valuation of London, for we shall be taking in London a second method of assessment instead of relying on the municipal assessment as has hitherto been the case. We shall have to assess 800,000 properties, and I was told by the Financial Secretary that the cost will be £15,000. I have never accepted the accuracy of that figure. I want to put on record my protest against expenditure for re-assessing by a second system the whole of these assessments, because I believe that beyond raising the £500,000, as the Chancellor has told us, there will be every five years henceforth a much larger sum falling on the taxpayer than has been estimated simply arising out of the additional and unnecessary process of assessment under this Clause.

    Question put, "That those words be there inserted in the Bill."

    The House divided: Ayes, 133; Noes, 253.

    Wilson, G. H. A. (Cambridge U.)Womersley, W. J.TELLERS FOR THE AYES.—
    Windsor-Clive, Lieut.-Colonel GeorgeWood, Rt. Hon. Sir KingsleyCaptain Sir George Bowyer and
    Winterton, Rt. Hon. EarlWorthington-Evans, Rt. Hon. Sir L.Captain Wallace.
    Wolmer, Rt. Hon. Viscount

    NOES.

    Adamson, W. M. (Staff., Cannock)Hastings, Dr. SomervilleMuff, G.
    Aitchison, Rt. Hon. Cralgie M.Hayday, ArthurMurnin, Hugh
    Alpass, J. H.Hayes, John HenryNewman, Sir R. H. S. D. L. (Exeter)
    Ammon, Charles GeorgeHenderson, Right Hon. A. (Burnley)Noel Baker, P. J.
    Arnott, JohnHenderson, Thomas (Glasgow)Noel-Buxton, Baroness (Norfolk, N.)
    Attlee, Clement RichardHenderson, W. W. (Middx., Enfield)Oldfield, J. R.
    Baker, John (Wolverhampton, Bilston)Herriotts, J.Oliver, George Harold (Ilkeston)
    Baldwin, Oliver (Dudley)Hoffman, P. C.Oliver, P. M. (Man., Blackley)
    Barnes, Alfred JohnHollins, A.Owen, H. F. (Hereford)
    Barr, JamesHopkin, DanielPalin, John Henry
    Beaumont, M. W.Hore-Belisha, LesliePaling, Wilfrid
    Bellamy, AlbertHorrabin, J. F.Palmer, E. T.
    Benn, Rt. Hon. WedgwoodHudson, James H. (Huddersfield)Parkinson, John Allen (Wigan)
    Benson, G.Hunter, Dr. JosephPerry, S. F.
    Bentham, Dr. EthelIsaacs, GeorgePethick-Lawrence, F. W.
    Bevan, Aneurin (Ebbw Vale)Jenkins, W. (Glamorgan, Neath)Phillips, Dr. Marion
    Bowen, J. W.John, William (Rhondda, West)Picton-Turbervill, Edith
    Bowerman, Rt. Hon. Charles W.Jones, F. Llewellyn- (Flint)Pole, Major D. G.
    Broad, Francis AlfredJones, Rt. Hon. Leif (Camborne)Potts, John S.
    Brooke, W.Jones, Morgan (Caerphilly)Quibell, D. J. K.
    Brothers, M.Jowett, Rt. Hon. F. W.Ramsay, T. B. Wilson
    Brown, C. W. E. (Notts, Mansfield)Jowitt, Sir W. A. (Preston)Rathbone, Eleanor
    Brown, Ernest (Leith)Kelly, W. T.Raynes, W. R.
    Brown, Rt. Hon. J. (South Ayrshire)Kennedy, ThomasRichardson, R. (Houghton-le-Spring)
    Brown, W. J. (Wolverhampton, West)Kinley, J.Riley, F. F. (Stockton-on-Tees)
    Buchanan, G.Kirkwood, D.Ritson, J.
    Burgess, F. G.Knight, HolfordRoberts, Rt. Hon. F. O. (W. Bromwich)
    Burton, C. R. (Yorks. W. R. Elland)Lambert, Rt. Hon. George (S. Molton)Romeril, H. G.
    Caine, Derwent Hall-Lang, GordonRosbotham, D. S. T.
    Cameron, A. G.Lansbury, Rt. Hon. GeorgeRowson, Guy
    Carter, W. (St. Pancras, S. W.)Lathan, G.Salter, Dr. Alfred
    Charleton, H. C.Law, A. (Rosendale)Samuel Rt. Hon. Sir H. (Darwen)
    Chater, DanielLawrence, SusanSanders, W. S.
    Church, Major A. G.Lawrie, Hugh Hartley (Stalybridge)Sandham, E.
    Cluse, W. S.Lawson, John JamesSawyer, G. F.
    Clynes, Rt. Hon. John R.Lawther, W. (Barnard Castle)Scrymgeour, E.
    Cocks, Frederick Seymour-Leach, W.Sexton, James
    Compton, JosephLee, Frank (Derby, N. E.)Shaw, Rt. Hon. Thomas (Preston)
    Cove, William G.Lee, Jennie (Lanark, Northern)Shepherd, Arthur Lewis
    Cowan, D. M.Lees, J.Sherwood, G. H.
    Daggar, GeorgeLewis, T. (Southampton)Shield, George William
    Dallas, GeorgeLloyd, C. EllisShiels, Dr. Drummond
    Dalton, HughLogan, David GilbertShillaker, J. F.
    Davies, Rhys John (Westhoughton)Longbottom, A. W.Shinwell, E.
    Day, HarryLongden, F.Short, Alfred (Wednesbury)
    Denman, Hon. R. D.Lovat-Fraser, J. A.Simmons, C. J.
    Dukes, C.Lowth, ThomasSimon, E. D. (Manch'ter, Withington)
    Duncan, CharlesLunn, WilliamSimon, Rt. Hon. Sir John
    Ede, James ChuterMacdonald, Gordon (Ince)Sinclair, Sir A. (Caithness)
    Edmunds, J. E.MacDonald, Rt. Hon. J. R. (Seaham)Sinkinson, George
    Edwards, E. (Morpeth)MacDonald, Malcolm (Bassetlaw)Smith, Ben (Bermondsey, Rotherhithe)
    Egan, W. H.McElwee, A.Smith, Frank (Nuneaton)
    Elmley, ViscountMcEntee, V. L.Smith, H. B. Lees- (Keighley)
    England, Colonel A.McGovern, J. (Glasgow, Shettleston)Smith, Rennie (Penistone)
    Freeman, PeterMacLaren, AndrewSmith, Tom (Pontefract)
    Gardner, B. W. (West Ham, Upton)McShane, John JamesSmith, W. R. (Norwich)
    Gardner, J. P. (Hammersmith, N.)Malone, C. L'Estrange (N'thampton)Snell, Harry
    George, Major G. Lloyd (Pembroke)Mander, Geoffrey le M.Snowden, Rt. Hon. Philip
    Gibson, H. M. (Lancs, Mossley)Mansfield, W.Sorensen, R.
    Gill, T. H.March, S.Stamford, Thomas W.
    Gillett, George M.Marcus, M.Stephen, Campbell
    Glassey, A. E.Markham, S. F.Stewart, J. (St. Rollox)
    Gossling, A. G.Marley, J.Strachey, E. J. St. Loe
    Graham, D. M. (Lanark, Hamilton)Marshall, FredStrauss, G. R.
    Graham, Rt. Hon. Wm. (Edin., Cent.)Mathers, GeorgeSullivan, J.
    Granville, E.Matters, L. W.Sutton, J. E.
    Gray, MilnerMesser, FredTaylor, R. A. (Lincoln)
    Greenwood, Rt. Hon. A. (Colne)Middleton, G.Thomas, Rt. Hon. J. H. (Derby)
    Grenfell, D. R. (Glamorgan)Millar, J. D.Thorne, W. (West Ham, Plaistow)
    Griffith, F. Kingsley (Middlesbro' W.)Mills, J. E.Thurtle, Ernest
    Griffiths, T. (Monmouth, Pontypool)Montague, FrederickTillett, Ben
    Groves, Thomas E.Morley, RalphTinker, John Joseph
    Grundy, Thomas W.Morris, Rhys HopkinsTownend, A. E.
    Hall, F. (York, W. R., Normanton)Morrison, Herbert (Hackney, South)Trevelyan, Rt. Hon. Sir Charles
    Hall, G. H. (Merthyr Tydvil)Morrison, Robert C. (Tottenham, N.)Walker, J.
    Hall, Capt. W. G. (Portsmouth, C.)Mort, D. L.Wallace, H. W.
    Hamilton, Mary Agnes (Blackburn)Moses, J. J. H.Wallhead, Richard C.
    Hamilton, Sir R. (Orkney & Zetland)Mosley, Sir Oswald (Smethwick)Watkins, F. C.

    Watson, W. M. (Dunfermline)Wilkinson, Ellen C.Wood, Major McKenzie (Banff)
    Wedgwood, Rt. Hon. JosiahWilliams, David (Swansea, East)Wright, W. (Rutherglen)
    Wellock, WilfredWilliams, Dr. J. H. (Llanelly)Young, R. S. (Islington, North)
    Welsh, James (Paisley)Williams, T. (York, Don Valley)
    Welsh, James C. (Coatbridge)Wilson, C. H. (Sheffield, Attercliffe)TELLERS FOR THE NOES.—
    West, F. R.Wilson, J. (Oldham)Mr. Charles Edwards and Mr.
    White, H. G.Wilson, R. J. (Jarrow)William Whiteley.
    Whiteley, Wilfrid (Birm., Ladywood)Winterton, G. E. (Leicester, Loughb'gh)

    Clause 29—(Annual Value Of Property In London For Purposes Of Income Tax)

    I beg to move, in page 25, line 9, at the end, to insert the words:

    "Notwithstanding anything in this Section or any repeal effected by this Act all rights of appeal given by the Valuation (Metropolis) Act, 1869, with regard to any property to which that Act applies shall continue to remain in force."
    On the last occasion when we discussed this matter we considered the whole question of the relative merits of single and double valuation. The House will remember that by the Act of 1869 a single valuation was established in London both for rates and taxes; the valuation of the local authority was made conclusive for all purposes of the Income Tax Acts. We say this system was of very great advantage to London and ought to have been extended over the whole country, and every commission and every committee which has ever been called upon to inquire into this subject has recommended a single valuation, but here we find a Socialist Government going in for a policy of reaction and extending the system of double valuation in the provinces to London on the plea of securing uniformity. As a matter of fact, however no uniformity is secured, so that the change has not even that advantage, for whereas in the provinces real property is assessed by assessors who are appointed by the General Commissioners, who are an independent and judicial body appointed over and above the tax collector, and having no connection with him, in London the valuers are to be surveyors of taxes, who are the people who assess and collect taxes. In fact, the valuation of the most valuable and most changing property in the world, real property in London, is to be in the hands of the tax collectors at Somerset House. That this is the intention of the Government is obvious from the fact that the Chancellor of the Exchequer estimated £15,000 only as the increased cost of the new machinery.

    It is well known that Somerset House have long desired to get this matter into their own hands. They have long been dissatisfied with the assessments of the local authorities, although there is no reason why they should be dissatisfied, because they were made a party to every assessment by the local authorities and could have appealed to Quarter Sessions or to the Assessment Committees; and the only possible justification for this change is that they have neglected their duties in the past, or that they did not wish to put their case before an independent judicial tribunal. The chief grievance which will result from the change from the single to the double valuation is that the unfortunate taxpayer and the unfortunate ratepayer will have to go to two parallel courts of appeal to decide upon exactly the same subject matter. Every authority upon taxation has agreed that a piece of property is worth so much for the purposes of either rates or taxes; it is the taxes which are different, and not the value.

    The most powerful argument adduced against the conclusive argument which we brought forward on the last occasion was the reactionary argument brought forward by my hon. and gallant Friend the Member for East Fulham (Sir K. Vaughan-Morgan), who is himself a General Commissioner. It was based upon arguments so fallacious that I wish he were here now to listen to what we have to say about it. His argument is that a property has got two values, one for rates and the other for taxes. What argument could be more absurd? He stated a reason which showed, I think, an abyssmal ignorance of the principles on which he himself should administer the high office which he holds. He said, in the first place, that the value of a property for rating purposes depended upon the annual value of the property, taking it year by year and comparing one property with another, whereas he said that for tax purposes the value of the property depended upon the income derived therefrom. That is a distinction without a difference. The hon. and gallant Member brought forward a sad story of how difficult it was to make a compromise between those two principles. The rules under Schedule "A" lay down that it is the annual value and not the rent or income which is the criterion, and that has been established and reinforced by judicial decisions over many years, including the Salisbury House case the other day. It would be monstrously unfair to decide it on what was the income derived therefrom. Supposing that were taken to mean the rent. In London a great deal of property is let at a huge premium and a small rent. You have to take the annual value of the property comparing one property with another and comparing one year with another; and so the argument of my hon. and gallant Friend the Member for East Fulham simply falls to the ground.

    There is the same criterion for each purpose, and the whole justification for double valuation really collapses. But we have a safeguard and a compromise. The right hon. Gentleman has insisted on bringing forward this change. He is obviously adamant upon it, and I think he has himself said that he hopes to raise £500,000 additional revenue. I want him to safeguard the taxpayer in the matter of appeal. I want him to say that there shall be an appeal from the surveyor of taxes to at least Quarter Sessions and, if possible, to the Assessment Committee. I want him to say that these valuable properties, which change from year to year almost out of all knowledge, shall be adjudged by a proper and competent court of law. I want the experts to be cross-examined, so that we can get the real value of the property. Under this Clause there is an appeal to the General Commissioners of Income Tax, of which my hon. and gallant Friend the Member for East Fuham is a notable and ornamental example. You go to the hon. and gallant Member, and he decides the case, as he has told us, with the utmost competence and the utmost care, which I am sure is true, but it has been held that the General Commissioners of Income Tax can take into consideration their own local knowledge of the property, and so the judge is himself to be an expert witness. Or, again, if the taxpayer so desires, he can call for a valuation from a single expert, and that valuation is conclusive and we cannot go beyond it.

    5.0 p.m.

    My right hon. and learned Friend the Attorney-General, whom I saw present a moment or two ago, knows perfectly well that in rating cases the opinion of one particular expert may be of comparatively little value. It can nearly always be shaken by cross-examination. It is essential for a judicial mind, without any special knowledge of the particular property, to consider the evidence brought forward from both sides as to the value of the property. The values in London are changing from day to day. One moment an old building is pulled down and a building of a residential or commercial character is erected on the same site. Under these changing conditions, a most careful examination is necessary to see what these new buildings are worth in regard to taxation in order that justice may be done. I think that we have made out an unanswerable case for this Amendment. The capitalist Press and members of the Socialist party are constantly declaring that London enjoys an unfair advantage in regard to the valuation of property, and it is contended that the Exchequer ought to receive an additional £500,000 every year from this source. London has been enjoying this advantage simply because of its good system, and the Chancellor of the Exchequer now desires to extend to London a bad system in order to create uniformity throughout England. I ask the right hon. Gentleman to accept my Amendment which gives a right of appeal to the citizens of London.

    I beg to second the Amendment.

    We are dealing with a dual method of valuation, one by the overseers and another by the surveyor of taxes. Both those systems aim at the same thing, namely, the ascertainment of a fair annual value for taxation. Having made that valuation, is it not rather unfair to the ratepayer that he should have two different bodies to deal with, because in one case he must go to the quarter sessions and in the other case to the assessment committee. There ought to be one appeal to one tribunal, and that ought to be a legal tribunal. The argument in favour of this Amendment can be put into a nutshell. The whole point is to save the taxpayer two sets of appeals, and allow him to get his rights by going through one set of legal proceedings. The final decision should rest with the legal tribunal, which is accustomed, by long experience, to deal with these questions, and that tribunal should be the quarter sessions. As my hon. Friend the Member for Eastbourne (Mr. Marjoribanks) has already pointed out, this Amendment is a fair compromise. I think every person ought to have the right to support his valuation before an independent tribunal.

    The hon. Member for Eastbourne (Mr. Majoribanks) had a skirmish with me on this question when Clause 3 was before the House. On that occasion, he moved an Amendment and expressed his approval of Clause 3, and at that time he had the opposition of the hon. and learned Member for Altrincham (Mr. Atkinson), who on this occasion has come to the aid of the hon. Member. The hon. Member for Eastbourne has raised a good many points which were touched upon during the Committee stage, and I was rather glad that on this occasion he has spared the Chancellor of the Exchequer, and poured out the vials of his wrath on the head of the hon. and gallant Member for East Fulham (Sir K. Vaughan-Morgan), who attacked most of the arguments which the hon. Member has brought forward to-day. I do not think this Amendment is the proper occasion on which to discuss the merits of a single or dual valuation of property in London. That point has already been settled. This Amendment deals with the one question—what shall be the nature of the appeal from the valuation for Schedule A tax? The point is whether we shall take the form proposed in the Bill, or that proposed by the hon. Member for Eastbourne in addition to the form proposed in the Bill? The hon. Member does not propose to do away with the normal appeal which already exists under the ordinary procedure of Schedule A, but he proposes to add to that the appeal which he suggests in his Amendment.

    This Amendment was put down on Report in the hope that something might be done to meet our case.

    The effect of the Amendment is to give the taxpayer the alternative of two types of appeal. My own opinion is that the taxpayer would not always avail himself of the particular appeal proposed by the hon. Member. The form of appeal in the Bill and that proposed by the Amendment are quite different. We propose to bring the appeal into line with the appeal which exists for Schedule A in other places. Under the procedure in the Bill the taxpayer has a right of appeal to the Local Commissioners. The taxpayer has also the right to ask for an expert valuation. Further, on a point of law, he has a right of appeal to the High Court. That is in accordance with the uniform practice which already exists in the provinces, and works very well there, and it is reasonable it should be applied to London when, in other respects, the valuation for Schedule A purposes is being made uniform throughout the country.

    What does the hon. Member for East-borne propose to substitute for that method? First of all he proposes an appeal to the Assessment Committee and then to the quarter sessions. That is proposed because it is an appeal which already exists for rating purposes and applies in London to Schedule A because that is at present based on the same basis as the valuation for rates. The hon. Member proposes to retain this appeal in the changed circumstances for Schedule A. The hon. Member for Eastbourne says that the taxpayer will avail himself freely of this form of appeal. I am not quite so sure about that. The appeal to the Local Commissioners may be made more cheaply than that to the quarter sessions. An appeal to the quarter sessions may be very expensive because in that case counsel must be employed, whereas if the ratepayer goes before the Local Commissioners he only needs to employ an accountant.

    My opinion is that if this Amendment were carried giving the taxpayer an option he would often revert to the appeal provided under the Bill and would use it in preference to the appeal suggested by the hon. Member. If on the other hand the hon. Member's method were substituted for that in the Bill the taxpayer might find himself aggrieved by the change. The system in the Bill has worked very well in other parts of the country and I see no adequate reasons for making the change suggested. I only wish that the hon. and gallant Member for East Fulham had been present to strengthen the arguments which he used on the last occasion with such determination that he seemed to overwhelm hon. Members opposite. I have done my best to clinch the arguments which have been put forward and I feel quite certain that the House will take the view that the uniform form which the Bill proposes is better than the alternative which has been suggested.

    I am greatly disappointed that the Government are not prepared to accept this Amendment, because it seems to me that there is an unanswerable case in its favour. The Financial Secretary said that the hon. and gallant Member for East Fulham (Sir K. Vaughan-Morgan) had overwhelmed us, but I can assure the right hon. Gentleman that he has not overwhelmed us with the answer he has given to the case which has been put before the House by my hon. Friend the Member for Eastbourne (Mr. Majoribanks). In the provinces the valuation is initiated by the assessor who is an independent person and in London the valuations are made by the surveyor of taxes who is a Government official. We want a uniform appeal between rate valuation and tax valuation. Under the rate valuation, we have now to go to quarter sessions. Why not under the tax valuation? It is exactly the same property that has to be valued. If you take No. 1 in such-and-such a street, that is going to be valued for the purposes of rating. If the owner does not like it, he has to go to quarter

    Division No. 446.]

    AYES.

    [5.18 p.m.

    Acland-Troyte, Lieut.-ColonelBracken, B.Croft, Brigadier-General Sir H.
    Ainsworth, Lieut.-Col. CharlesBrown, Col. D. C. (N'th'l'd., Hexham)Croom-Johnson, R. P.
    Albery, Irving JamesBuckingham, Sir H.Culverwell, C. T. (Bristol, West)
    Allen, Lt.-Col. Sir William (Armagh)Burton, Colonel H. W.Dalkeith, Earl of
    Amery, Rt. Hon. Leopold C. M. S.Butler, R. A.Davidson, Rt. Hon. J. (Hertford)
    Astor, Maj. Hon. John J. (Kent, Dover)Cadogan, Major Hon. EdwardDavidson, Major-General Sir J. H.
    Astor, ViscountessCarver, Major W. H.Davies, Dr. Vernon
    Atholl, Duchess ofCautley, Sir Henry S.Davies, Maj. Geo. F. (Somerset, Yeovil)
    Atkinson, C.Cayzer, Sir C. (Chester, City)Duckworth, G. A. V.
    Baldwin, Rt. Hon. Stanley (Bewdley)Cayzer, Maj Sir Herbt, R. (Prtsmth, S.)Dugdale, Capt. T. L.
    Balfour, Captain H. H. (I. of Thanet)Cazalet, Captain Victor A.Eden, Captain Anthony
    Beaumont, M. W.Chadwick, Capt. Sir Robert BurtonEdmondson, Major A. J.
    Berry, Sir GeorgeChamberlain, Rt. Hn. Sir J. A. (Birm., W.)Elliot, Major Walter E.
    Betterton, Sir Henry B.Christie, J. A.England, Colonel A.
    Bird, Ernest RoyCobb, Sir CyrilErskine, Lord (Somerset, Weston-s-M.)
    Bourne, Captain Robert CroftColfox, Major William PhilipEverard, W. Lindsay
    Bowater, Col. Sir T. VansittartCranborne, ViscountFalle, Sir Bertram G.
    Bowyer, Captain Sir George E. W.Crichton-Stuart, Lord C.Ferguson, Sir John

    sessions. It has also to be valued for the purpose of tax. Why not let the owner also go to quarter sessions on an independent appeal? There might even be in respect of the one house, two appeals, one to quarter sessions and one to the Commissioners, under the Bill as it is now.

    The valuations might be quite different. Both might be made perfectly honesty, of course, but they might be quite different, and, if you want uniformity, you ought to get uniformity in the court of appeal. That is the ordinary way in which administrative acts are reviewed. This is to be an administrative valuation, and there ought to be an appeal to the same court. I suggest that that is fair to the rating authority, is fair to the taxing authority, and is fair to the taxpayer or ratepayer. It saves him, perhaps, a double appeal, for the appeal that has taken place in the one case will probably do for the second case, because, if the value is fixed by the Court of Quarter Sessions, it will probably become the adopted value with the rating authority or the taxing authority as the case may be, and the subject will not be forced to go to the expense of a second appeal. Surely, that is fairer to the authorities and fairer to the individual, and will bring about uniformity and simplification and save expense. The case that has been made by my hon. Friend is an unanswerable case. At least, it has not been answered, and, if the Chancellor of the Exchequer cannot do better, I shall certainly support my hon. Friend in the Division Lobby.

    Question put, "That those words be there inserted in the Bill."

    The House divided: Ayes, 142: Noes, 258.

    Ford, Sir P. J.Macquisten, F. A.Smith-Carington, Neville W.
    Forestier-Walker, Sir L.Makins, Brigadier-General E.Somerville, A. A. (Windsor)
    Ganzoni, Sir JohnMarjoribanks, E. C.Southby, Commander A. R. J.
    Gilmour, Lt.-Col. Rt. Hon. Sir JohnMason, Colonel Glyn K.Stanley, Lord (Fylde)
    Glyn, Major R. G. C.Merriman, Sir F. BoydStanley, Maj. Hon. O. (W'morland)
    Gower, Sir RobertMitchell-Thomson, Rt. Hon. Sir W.Steel-Maitland, Rt. Hon. Sir Arthur
    Grace, JohnMonsell, Eyres, Com. Rt. Hon. Sir B.Sueter, Rear-Admiral M. F.
    Guinness, Rt. Hon. Walter E.Moore, Sir Newton J. (Richmond)Thomas, Major L. B. (King's Norton)
    Hacking, Rt. Hon. Douglas H.Morrison-Bell, Sir Arthur CliveThomson, Sir F.
    Hall, Lieut.-Col. Sir F. (Dulwich)Muirhead, A. J.Titchfield, Major the Marquess of
    Hamilton, Sir George (Ilford)Newton, Sir D. G. C. (Cambridge)Todd, Capt. A. J.
    Hammersley, S. S.O'Connor, T. J.Tryon, Rt. Hon. George Clement
    Harvey, Major S. E. (Devon, Totnes)Ormsby-Gore, Rt. Hon. WilliamTurton, Robert Hugh
    Haslam, Henry C.Peake, Capt. OsbertWard, Lieut.-Col. Sir A. Lambert
    Henderson, Capt. R. R. (Oxf'd, Henley)Penny, Sir GeorgeWarrender, Sir Victor
    Hennessy, Major Sir G. R. J.Peto, Sir Basil E. (Devon, Barnstaple)Wayland, Sir William A.
    Herbert, Sir Dennis (Hertford)Power, Sir John CecilWilliams, Charles (Devon, Torquay)
    Hills, Major Rt. Hon. John WallerRamsbotham, H.Wilson, G. H. A. (Cambridge U.)
    Howard-Bury, Colonel C. K.Rawson, Sir CooperWindsor-Clive, Lieut.-Colonel George
    Hunter-Weston, Lt.-Gen. Sir AylmerRentoul, Sir Gervais S.Winterton, Rt. Hon. Earl
    Hurd, Percy A.Richardson, Sir P. W. (Sur'y, Ch'ts'y)Withers, St John James
    Hurst, Sir Gerald B.Roberts, Sir Samuel (Ecclesall)Wolmer, Rt. Hon. Viscount
    King, Commodore Rt. Hon. Henry D.Rodd, Rt. Hon. Sir James RennellWomersley, W. J.
    Lane Fox, Col. Rt. Hon. George R.Ross, Major Ronald D.Wood, Rt. Hon. Sir Kingsley
    Law, Sir Alfred (Derby, High Peak)Ruggles-Brise, Lieut.-Colonel E. A.Worthington-Evans, Rt. Hon. Sir L.
    Leighton, Major B. E. P.Samuel, A. M. (Surrey, Farnham)Young, Rt. Hon. Sir Hilton
    Lewis, Oswald (Colchester)Sandeman, Sir N. Stewart
    Little, Dr. E. GrahamSavery, S. S.TELLERS FOR THE AYES.—
    Llewellin, Major J. J.Shepperson, Sir Ernest WhittomeCaptain Margesson and Captain
    Long, Major Hon. EricSinclair, Col. T. (Queen's U., Belfst)Wallace.
    Lymington, ViscountSmith, Louis W. (Sheffield, Hallam)

    NOES.

    Adamson, Rt. Hon. W. (Fife, West)Denman, Hon. R. D.Jenkins, W. (Glamorgan, Neath)
    Adamson, W. M. (Staff., Cannock)Dukes, C.John, William (Rhondda, West)
    Aitchison, Rt. Hon. Cralgie M.Duncan, CharlesJones, F. Llewellyn- (Flint)
    Alpass, J. H.Ede, James ChuterJones, Rt. Hon. Leif (Camborne)
    Ammon, Charles GeorgeEdmunds, J. E.Jones, Morgan (Caerphilly)
    Arnott, JohnEdwards, C. (Monmouth, Bedwellty)Jowett, Rt. Hon. F. W.
    Aske, Sir RobertEdwards, E. (Morpeth)Jowitt, Sir W. A. (Preston)
    Attlee, Clement RichardEgan, W. H.Kelly, W. T.
    Baker, John (Wolverhampton, Bilston)Elmley, ViscountKennedy, Thomas
    Baldwin, Oliver (Dudley)Freeman, PeterKinley, J.
    Barnes, Alfred JohnGardner, B. W. (West Ham, Upton)Knight, Holford
    Barr, JamesGardner, J. P. (Hammersmith, N.)Lambert, Rt. Hon. George (S. Molton)
    Batey, JosephGeorge, Major G. Lloyd (Pembroke)Lang, Gordon
    Bellamy, AlbertGibson, H. M. (Lancs, Mossley)Lansbury, Rt. Hon. George
    Benn, Rt. Hon. WedgwoodGill, T. H.Lathan, G.
    Bennett, Capt. Sir E. N. (Cardiff C.)Gillett, George M.Law, A. (Rosendale)
    Benson, G.Glassey, A. E.Lawrence, Susan
    Bentham, Dr. EthelGossling, A. G.Lawrie, Hugh Hartley (Stalybridge)
    Bevan, Aneurin (Ebbw Vale)Graham, D. M. (Lanark, Hamilton)Lawson, John James
    Bondfield, Rt. Hon. MargaretGraham, Rt. Hon. Wm. (Edin., Cent.)Lawther, W. (Barnard Castle)
    Bowen, J. W.Gray, MilnerLeach, W.
    Bowerman, Rt. Hon. Charles W.Greenwood, Rt. Hon. A. (Colne)Lee, Frank (Derby, N. E.)
    Broad, Francis AlfredGrenfell, D. R. (Glamorgan)Lee, Jennie (Lanark, Northern)
    Bromfield, WilliamGriffith, F. Kingsley (Middlesbro' W.)Lees, J.
    Brooke, W.Griffiths, T. (Monmouth, Pontypool)Lewis, T. (Southampton)
    Brothers, M.Groves, Thomas E.Lloyd, C. Ellis
    Brown, C. W. E. (Notts, Mansfield)Grundy, Thomas W.Logan, David Gilbert
    Brown, Ernest (Leith)Hall, F. (York, W. R., Normanton)Longbottom, A. W.
    Brown, Rt. Hon. J. (South Ayrshire)Hall, G. H. (Merthyr Tydvil)Longden, F.
    Brown, W. J. (Wolverhampton, West)Hall, Capt. W. G. (Portsmouth, C.)Lovat-Fraser, J. A.
    Buchanan, G.Hamilton, Mary Agnes (Blackburn)Lowth, Thomas
    Burgess, F. G.Harris, Percy A.Lunn, William
    Buxton, C. R. (Yorks, W. R. Elland)Hastings, Dr. SomervilleMacdonald, Gordon (Ince)
    Caine, Derwent Hall-Haycock, A. W.MacDonald, Rt. Hon. J. R. (Seaham)
    Cameron, A. G.Hayday, ArthurMacDonald, Malcolm (Bassetlaw)
    Carter, W. (St. Pancras, S. W.)Hayes, John HenryMcElwee, A.
    Charleton, H. C.Henderson, Right Hon. A. (Burnley)McEntee, V. L.
    Chater, DanielHenderson, W. W. (Middx., Enfield)McGovern, J. (Glasgow, Shettleston)
    Church, Major A. G.Herriotts, J.MacLaren, Andrew
    Cluse, W. S.Hirst, G. H. (York W. R. Wentworth)McShane, John James
    Clynes, Rt. Hon. John R.Hirst, W. (Bradford, South)Malone, C. L'Estrange (N'thampton)
    Cocks, Frederick SeymourHoffman, P. C.Mander, Geoffrey le M.
    Compton, JosephHollins, A.Mansfield, W.
    Cove, William G.Hopkin, DanielMarch, S.
    Cowan, D. M.Hore-Belisha, LeslieMarcus, M.
    Daggar, GeorgeHorrabin, J. F.Marley, J.
    Dallas, GeorgeHudson, James H. (Huddersfield)Marshall, Fred
    Dalton, HughHunter, Dr. JosephMathers, George
    Davies, Rhys John (Westhoughton)Hutchison, Maj.-Gen. Sir R.Matters, L. W.
    Day, HarryIsaacs, GeorgeMesser, Fred

    Millar, J. D.Roberts, Rt. Hon. F. O. (W. Bromwich)Sutton, J. E.
    Mills, J. E.Romeril, H. G.Taylor, R. A. (Lincoln)
    Montague, FrederickRosbotham, D. S. T.Thomas, Rt. Hon. J. H. (Derby)
    Morgan, Dr. H. B.Rowson, GuyThorne, W. (West Ham, Plaistow)
    Morley, RalphSalter, Dr. AlfredThurtle, Ernest
    Morris, Rhys HopkinsSamuel, Rt. Hon. Sir H. (Darwen)Tillett, Ben
    Morris-Jones, Dr. J. H. (Denbigh)Sanders, W. S.Tinker, John Joseph
    Morrison, Herbert (Hackney, South)Sawyer, G. F.Townend, A. E.
    Morrison, Robert C. (Tottenham, N.)Scrymgeour, E.Trevelyan, Rt. Hon. Sir Charles
    Mort, D. L.Scurr, JohnVaughan, D. J.
    Moses, J. J. H.Sexton, JamesViant, S. P.
    Mosley, Sir Oswald (Smethwick)Shaw, Rt. Hon. Thomas (Preston)Walker, J.
    Muff, G.Shepherd, Arthur LewisWallace, H. W.
    Murnin, HughSherwood, G. H.Wallhead, Richard C.
    Newman, Sir R. H. S. D. L. (Exeter)Shield, George WilliamWatkins, F. C.
    Noel Baker, P. J.Shiels, Dr. DrummondWatson, W. M. (Dunfermline)
    Noel-Buxton, Baroness (Norfolk, N.)Shillaker, J. F.Wedgwood, Rt. Hon. Josiah
    Oldfield, J. R.Shinwell, E.Wellock, Wilfred
    Oliver, George Harold (Ilkeston)Short, Alfred (Wednesbury)Welsh, James (Paisley)
    Oliver, P. M. (Man., Blackley)Simmons, C. J.Welsh, James C. (Coatbridge)
    Owen, H. F. (Hereford)Simon, E. D. (Manch'ter, Withington)West, F. R.
    Palin, John HenrySimon, Rt. Hon. Sir JohnWhite, H. G.
    Paling, WilfridSinclair, Sir A. (Caithness)Whiteley, Wilfrid (Birm., Ladywood)
    Palmer, E. T.Sinkinson, GeorgeWhiteley, William (Blaydon)
    Perry, S. F.Smith, Ben (Bermondsey, Rotherhithe)Wilkinson, Ellen C.
    Pethick-Lawrence, F. W.Smith, Frank (Nuneaton)Williams, David (Swansea, East)
    Phillips, Dr. MarionSmith, H. B. Lees- (Keighley)Williams, Dr. J. H. (Lianelly)
    Picton-Turbervill, EdithSmith, Tom (Pontefract)Williams, T. (York, Don Valley)
    Pole, Major D. G.Smith, W. R. (Norwich)Wilson, C. H. (Sheffield, Attercliffe)
    Potts, John S.Snell, HarryWilson, J. (Oldham)
    Quibell, D. J. K.Snowden, Rt. Hon. PhilipWilson, R. J. (Jarrow)
    Ramsay, T. B. WilsonSorensen, R.Winterton, G. E. (Leicester, Loughb'gh)
    Rathbone, EleanorStamford, Thomas W.Wood, Major McKenzie (Banff)
    Raynes, W. R.Stephen, CampbellWright, W. (Rutherglen)
    Richardson, R. (Houghton-le-Spring)Strachey, E. J. St. Loe
    Riley, F. F. (Stockton-on-Tees)Strauss, G. R.TELLERS FOR THE NOES.—
    Ritson, J.Sullivan, J.Mr. Allen Parkinson and Mr. T.
    Henderson.

    Clause 32—(Estate Duty Where Property Of Deceased Has Been Transferred To Private Company)

    I beg to move, in page 26, line 37, to leave out the words, "whether before or after that date," and to insert instead thereof the words,

    "at any time after the thirty-first day of July, nineteen hundred and eighteen."

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

    Question proposed, "That those words be there inserted in the Bill."

    I beg to move, as an Amendment to the proposed Amendment, in line 2, to leave out the word "eighteen," and to insert instead thereof the word "twenty-seven."

    The Chancellor of the Exchequer, in the Amendment that he has moved, has met us to a very slight extent. In Committee I pointed out that, in the case of a transfer to a company, there would have to be inquiries roving back over a very long period, in order to ascertain whether the company was in fact liable to duty or not under the Act. I sug- gested that there ought to be a limited time—that we ought not to have to rove back for ever. The Chancellor of the Exchequer has now limited the period to 12 years. If, however, there should be a limit at all, it seems to me that a period of 12 years is too long. I thought at first that 12 years might be a period which could be accepted, but, on reflection, I think that it is far too long, and that it would not be at all unreasonable if we were now to ask the Chancellor of the Exchequer to accept three years instead of 12 years.

    That is the effect of my Amendment. I think that the right hon. Gentleman ought to accept it, because, while this is not legislating ex post facto, yet it is in fact legislating with respect to transactions which were perfectly bonâ fide when they were entered into, but which will be made subject to duty by this Bill. Perfectly honest and legal transactions have been entered into up to this very moment, which will in future be penalised by this Bill. It is no use my arguing that you ought not to legislate backwards, but ought to start as from this date, and not consider transactions which took place before; but I would ask that transactions should not be taken into account which took place more than three years ago, because of the difficulty that there will be in carrying on the ordinary business of the country if every transaction may become suspect so many years after it has taken place. The degree of research and the degree of care and the want of confidence which will be generated by a Clause such as this, even with the 12-year limit, is such that it is not worth while, either from the Revenue point of view or from the point of view of the trade of the country, to put such an obstacle in its way.

    I cannot accept the Amendment to the proposed Amendment. I promised to make a concession in Committee, and this Amendment is an illustration of the wisdom of the old saying that if you concede an ell they will demand a yard. There is clearly nothing at all in the right hon. Gentleman's contention about the difficulty of going back for a longer period. He said many of these companies had been formed in perfectly good faith. That may be true in a sense, but still they have been formed for the purpose of avoiding the payment of Estate Duty. There is no doubt about that fact. It is a form of legal avoidance and, ever since this practice began, it has been known that sooner or later Parliament would have to stop it. My predecessor, I believe on more than one occasion, expressed his intention of doing that, and I am not quite sure that in one of his Finance Bills he did not make a moderate attempt to deal with it. When I made the announcement in the Budget speech that I proposed to deal with this matter, he said he would support me in two proposals that I had announced. This was one and the other was the matter of the single premium policy. Those who have followed the progress of the Finance Bill through the Committee stage know the amount and the value of the support I have received from the other side, and their anxiety to help me has been shown by their voting against every one of these Clauses. They have certainly sought to carry out what was declared by Lord George Hamilton on one occasion as being the purpose of the Tory party, and that is to look after the interests of their own friends. It has been known for long that this matter would be dealt with by Parliament, and certainly further back than three years ago the announcement was made that Parliament must deal with it.

    I am speaking from memory. It was in one of his Budget statements. But that is not material, because it has been known for long that sooner or later Parliament must deal with the matter, and, therefore, for a good many years the steps that have been taken to avoid payment have been taken in the knowledge of the warning and the fact that, as soon as Parliament could find time, it would deal with it. I could not, therefore, accept the proposal. It would not be fair to include a company that was formed three years ago and allow one that was formed four years ago to escape. The Bill, as originally drafted, would have included all these matters. I made a big concession to meet the views expressed by the Opposition to the extent of going back for 12 years, and I am not going to extend that.

    I am very sorry the Chancellor of the Exchequer has introduced this quite unnecessary note of acrimony. I am speaking as one who sees ahead on the Order Paper several Amendments in the Chancellor's name to give effect to points on these Clauses about which I addressed questions to the Attorney-General in Committee. We all agree that you have to go some way back, and the very reason the right hon. Gentleman has given is an unanswerable argument for going only three years back, namely, that it is exactly three years ago that the late Chancellor of the Exchequer first made it perfectly plain that these Estate Duty companies were to be attacked. There is every reason, therefore, why three and not 12 years should be selected as the fair date to which this part of legislation should be made retrospective. That is the broad ground, but I should like to make a minor point, and here I address myself particularly to the Attorney-General.

    My right hon. Friend who moved this Amendment raised a point with regard to gifts inter vivos, and the Attorney-General assured the House that it was the intention of the Chancellor of the Exchequer not to interfere with the rule by which gifts made more than three years before death should be immune. My right hon. Friend and I both pointed out to the Attorney-General at the time that the effect of these Clauses might be, though it was said it was not the intention, to extend the time within which gifts inter vivos might be made liable to duty. I want to repeat that, unless you accept this three years limitation of the time before which a transfer to a company shall not become an offending transaction by reason of benefits being received within the prescribed period before the death, you are going to make it possible to hit gifts inter vivos made more than three years before the death. Suppose that a man transfers to a company money or land, or whatever it may be, and, by reason of the accounting period dating back three and three-quarters years before the death, what would otherwise be an innocent transaction becomes an offending transaction. It was said it was not intended that that should be the effect, but it is bound to be the effect in these circumstances unless this three years limit is adopted.

    I am surprised at the ungracious manner in which the Chancellor of the Exchequer has recognised the assistance that has been given from this side. What would have been his position if he had not adopted our suggestion and withdrawn Clause 10 until after the other Clauses had been considered? He would have had his Bill in a glorious muddle. And again with regard to Clauses 29 to 33 inclusive. We have done our best to help in framing a reasonable Budget out of something which neither the Government nor anyone else could understand, and it was owing very much to the Attorney-General, who saw the difficulties with which the Government were faced and recognised them, not in the ungracious manner which the Chancellor now shows, a manner to which we are accustomed from him. I think he may just as well know that, if that is the manner in which he is going to accept suggestions, he is not going to get his Measures through with the harmony and assistance that he might expect, because he does not deserve it. I have no doubt the Attorney-General will recognise the difficulties my hon. and learned Friend has referred to. We do not want to have all sorts of difficulties coming up in the Law Courts, as they will do. If the Chancellor of the Exchequer wishes to do away with the difficulties to which my hon. and learned Friend has referred, I hope the Attorney-General will point out to him the unwisdom of saying that he will not under any circumstances go back less than 12 years.

    In season and out of season, I have always expressed my disgust at retrospective legislation, because you never know how far you are going. When measures have been adopted by Parliament, the people of the country are entitled to know that legislation shall not be upset by later legislation of a retrospective character. I have said that I do not want to lend too much assistance to those desiring to evade taxation, though they have been perfectly justified in the action that they have taken heretofore. The time has certainly arrived when some steps should be taken to prevent the continual leakage of the revenue that is expected from the Death Duties, but for goodness sake do not let us go back for 12 years. It does not seem as though the Chancellor of the Exchequer has given any help in the matter at all. The theory is wrong, and I hope that the Chancellor of the Exchequer will, even at this period, say, "I am prepared to carry out what was my desire, and, having learnt the facts, I recognise that the Amendment which is proposed by the right hon. Gentleman is one which can be accepted." I hope that the Chancellor of the Exchequer will, in his quieter moments, recognise the assistance which has been given to him, and that it is no good saying, "Because I have given an inch, you ask for a yard," and all that sort of thing. When the right hon. Gentleman and his party were in opposition they used to ask for a good deal more than they expected to receive, and I hope that the right hon. Gentleman will yet agree to accept the Amendment which has been moved by my right hon. Friend. I hope that we shall not have any more expressions of dissatisfaction when we have done all that is possible to render help in this important matter.

    I feel that we on this side of the House have some cause to complain of the attitude taken by the Chancellor of the Exchequer in the speech which he has just delivered. I would ask him if, at a moment when he does not feel quite so bitter, he would kindly compare these Clauses as they were originally put into the Bill with the Clauses which are now before the House. They bear no resemblance whatever. I venture to say that the Clauses as they were originally put forward were slipshod and wholly unworkable, and brought in a large number of companies which it was never intended should be brought in at all. I support the Amendment for several reasons. I have no interest in preventing the Chancellor of the Exchequer or any Chancellor of the Exchequer from catching people who so devise their affairs as to escape just Revenue duties. None of us on this side of the House desires to offer any obstruction to a constructive proposal which has that end in view, but the following considerations ought to be urged upon the right hon. Gentleman. First of all, as the result of these Clauses, I think that in the future people will be very careful and circumspect in their dealings with and the transfers they make to, private companies. That is one of the disastrous effects which we see in the Clauses, because they make transactions with private companies very dangerous and very susceptible of being brought within the ambit of the Measure.

    That is all right as regards the future. No doubt in the future those who have dealings with private companies will take care that they are advised so that they can keep outside the Act, and in many cases private companies will not be formed at all, or they will be public companies or partnerships to which transfers are made. But there are many perfectly legitimate transactions which will be caught by these Clauses. Every year you go back brings into the ambit of the Measure a larger number of transactions which were perfectly fair and legal at the time they were entered into. We feel very strongly, that although, possibly, some retrospective period of time may be necessary, it should in any case be the shortest possible period, and should be no longer than the period of time prescribed for gifts inter vivos, that is to say, three years.

    The Chancellor of the Exchequer had really no cause to complain of the attitude taken by this side of the House. As an instance of that, I would point out that even among the Amendments which be is sponsoring to-day are Amendments dealing with matters of copyright and patents which we pointed out to him from this side of the House at the time these Clauses were last under discussion. Arrangements may be so made that persons may not be caught under the Act because transfers will not take place, but it is necessary to consider some of the transactions which may be caught and which have already taken place. Take the case of a man who sells machinery to a company under a hire-purchase agreement. The last payment is made by the company to him just before his death, and at his death he is insolvent. So that it is not a payment for his own use or benefit within the exception made in Sub-section (2, a). In these circumstances, the company is liable to pay Estate Duty, if the Measure means what it says, upon the property so transferred, because it is not a bona fide sale for full consideration.

    This Amendment deals with the question of dates, and that is the only question the hon. and learned Member is entitled to debate.

    With the greatest possible respect, my argument is directed to show that transactions which these Clauses were never intended to catch, bona fide transactions which have nothing to do with evading Estate Duty, will, in fact, be caught by this Clause, and that therefore it is essential—

    We are not discussing the substance of the Clause, but the date upon which it is to begin to operate. The hon. and learned Member must restrict his speech to reasons for or against the suggested date becoming part of the Bill.

    With respect, I bow to your Ruling, Mr. Dunnico, but may I submit this fact in order to point out that the longer you go back, the more anomalous cases you bring into the net of this Clause. Such transactions as have nothing to do with evasion of Estate Duty at all, such as the hire purchase case, and the case which I pointed out on a previous occasion, of a man who transfers a business to his son in order to set him up in business, and the son forms a private company—

    The only question here is whether the proposals shall be retrospective or not. The illustrations the hon. and learned Member is giving of the alleged injustice of the Bill would apply whichever date is accepted.

    I bow to your Ruling, Mr. Dunnico, and I appreciate the force of that argument. We recognise that there must be cases of harshness with which the Treasury can deal under this Clause if the date is retrospective. We recognise that fact, but what we feel is, that as the Clauses are at present designed, they are bound to operate harshly in cases with which it was never intended to deal in this kind of legislation. The least that the Chancellor of the Exchequer can do is to make the date so little retrospective that the fewest possible number of cases are brought within the Act. I support what my hon. and learned Friend the Member for Rusholme (Sir B. Merriman) said, that in any case the date ought to be limited so that there can be no possibility of gifts inter vivos being brought into the operation of the Act. I must express my very great surprise that the right hon. Gentleman the Chancellor of the Exchequer did not congratulate us on this side in allowing him to escape from the ignominy of having to see these Clauses on the Statute Book in the appalling and discreditable form in which they were originally put forward.

    I should not have intervened in the debate on this Amendment had it not been for the speech of the right hon. Gentleman the Chancellor of the Exchequer. It has been a bitter lesson in recent months during the controversy on this Bill to learn that he has no regard for accuracy, but we are entitled at least to expect that he should have regard to facts. When gratuitously in a House which, to say the least of it, is not in an excited condition, he chooses to fling charges of insincerity at Members on this side of the House, he might at least produce accurate facts upon which to make them. He has charged hon. Members on this side with deliberately obstructing the passage of Clauses which are designed to stop that tax evasion which every one of us who does not evade taxes must deplore. Upon what has he based that charge? A very short speech by my right hon. Friend, not in any way attacking the principle of the Clauses, and not in any way destroying his own Amendment, but simply suggesting one date for the purely arbitrary date which the right hon. Gentleman has inserted.

    After all, whatever the Chancellor of the Exchequer may think of it, there are certain logical arguments in favour of the Amendment of my right hon. Friend. The first is that it dates back to the period when an authoritative statement was first made on behalf of the Government of this country that steps of this kind were contemplated, and, sooner or later, would be taken. The second is that three years coincide with that period of three years which has been so long looked upon as the period of safeguard for a gift inter vivos before the death of one of the parties. Therefore, there is more logical support for the date proposed by my right hon. Friend than there is for the date selected by the right hon. Gentleman, which appears to be a perfectly arbitrary one. We are entitled to be answered by arguments. It is possible that the right hon. Gentleman might have been able to give a very good answer, and if he could have shown that so many companies had been formed during this period, he might have arrived at a logical conclusion that the acceptance of this Amendment might have had the effect of ruining the object of the Clause. But he made no attempt to do this. He merely brought forward an entirely inaccurate assertion. He said that Members on this side of the House had deliberately, for the sake of their friends and to protect the taxes of their friends, made every attempt to ruin it. [Interruption.] I am glad to see some signs of life from hon. Members opposite. We do not get many signs that they either appreciate or understand our arguments.

    The right hon. Gentleman mentioned two particular things. The first was the single premium policy, and the second had regard to the Clause we are discussing now. He remembers well the history of the single premium policy, and that he had to withdraw the Clause dealing with this matter before it was put to the decision of the Committee, and he had to reinsert the Clause in an entirely different form. How can he, with any sincerity, Charge hon. Members on this side with having made any attempt to obstruct a Clause which they have not had the opportunity of discussing? With regard to the Clause we are discussing to-day, unfortunately, during the discussion on the Committee stage I was absent through illness, but I read carefully the debates at that time. It is true that the debates were lengthy, but the Clauses, as the Attorney-General admitted, are Clauses of extreme complexity and difficulty. The debate, as far as I could see, was conducted almost entirely by hon. Members of this House learned in the law. It was conducted on a technical basis. It was answered in technical language by the Attorney-General, who made no complaint whatever of ill-treatment by hon. Members on this side. The result has been that a large number of Amendments were put down on Report. I cannot help feeling that speeches such as the right hon. Gentleman has made really make the conduct of business in this House almost impossible, and that if purely technical questions such as this, which call for the closest argument on both sides, are going to be treated in such a spirit, the attacks on the Parliamentary system made by some hon. Gentlemen have some justification.

    6.0 p.m.

    There are one or two things which can be said in support of this Amendment, and which it is absolutely necessary should be said for the benefit of those who will read the report of this debate, even though they may have no effect upon the right hon. Gentleman. Had he simply refused to accept this Amendment in rather a different form, we might not have felt it necessary to press forward so many arguments but I want, in justification of those of us who have tried to improve the Clauses, to point out one or two arguments which have not been used hitherto, and which certainly have not been replied to from the other side. When the Chancellor of the Exchequer proposes to go back a period of 12 years in order to bring companies within this Clause, he is in- dulging in a form of retrospective legislation which is unfair for several very good reasons. At the time, 12 or 10 years ago, when some of these companies were formed, there was no threat or suggestion of legislation of this kind. They were perfectly justifiable transactions, perfectly legal and perfectly proper, and therefore on general grounds it is doubtful whether it is right to rake up these transactions and impose taxation on the death of a man who carried out a transaction of this kind such long time ago.

    I want to point out another reason why it is unfair that the Revenue are endeavouring to get more than they ought to get. The Attorney-General will appreciate the fact that when these companies were formed and these transactions were carried out, a very heavy Stamp Duty was paid. That Stamp Duty was paid on the capital of these companies, and duty was paid on the sales and transfers of property to these companies. These were transactions which, according to the Chancellor of the Exchequer's own argument, would not have been carried out unless there had been a benefit to be obtained by avoiding, in a perfectly legal way, the payment of certain duties. Now the Chancellor of the Exchequer comes along, nearly 12 years after these transactions have been carried out, after heavy sums have been paid for Capital Duty and very heavy sums have been paid for Stamp Duty and, without giving any consideration whatever to these heavy duties, he is endeavouring to impose in respect of these transactions duties for which the property of these persons was not liable at the time when those perfectly legal transactions were carried out.

    Therefore the Chancellor of the Exchequer in going back so far, long before there was any warning that any legislation of this kind would be introduced, is unfairly taking advantage of the heavy Company Duty and Stamp Duty that has been paid and is levying this extra duty without giving any consideration whatever for that extra money which will have been paid to the Revenue in connection with transactions for a legal purpose but which transactions in consequence of the Government's action, have no effect and, from the point of view of the taxpayer, will have been thrown away into the revenues of the country. I hope that we shall get through the rest of the Report stage this afternoon more quickly than we have done in regard to this Amendment, but if we are to do so I hope that the Chancellor of the Exchequer will give us credit for having some good reason, at any rate a reason which is a good one to our mind, if not to his, for the Amendments which we move. In view of the fact that I cannot expect the Chancellor of the Exchequer now to alter his decision, I do wish to point out most

    Division No. 447.]

    AYES.

    [6.6 p.m.

    Adamson, Rt. Hon. W. (Fife, West)Elmley, ViscountLawrence, Susan
    Adamson, W. M. (Staff., Cannock)Freeman, PeterLawrie, Hugh Hartley (Stalybridge)
    Addison, Rt. Hon. Dr. ChristopherGardner, B. W. (West Ham, Upton)Lawson, John James
    Aitchison, Rt. Hon. Cralgie M.Gardner, J. P. (Hammersmith, N.)Lawther, W. (Barnard Castle)
    Alexander, Rt. Hon. A. V. (Hillsbro')George, Major G. Lloyd (Pembroke)Leach, W.
    Alpass, J. H.Gibson, H. M. (Lancs, Mossley)Lee, Frank (Derby, N. E.)
    Ammon, Charles GeorgeGill, T. H.Lee, Jennie (Lanark, Northern)
    Arnott, JohnGillett, George M.Lees, J.
    Aske, Sir RobertGlassey, A. E.Lewis, T. (Southampton)
    Attlee, Clement RichardGossling, A. G.Lloyd, C. Ellis
    Baker, John (Wolverhampton, Bilston)Graham, D. M. (Lanark, Hamilton)Logan, David Gilbert
    Baldwin, Oliver (Dudley)Graham, Rt. Hon. Wm. (Edin., Cent.)Longbottom, A. W.
    Barnes, Alfred JohnGray, MilnerLongden, F.
    Barr, JamesGreenwood, Rt. Hon. A. (Colne)Lovat-Fraser, J. A.
    Batey, JosephGrenfell, D. R. (Glamorgan)Lowth, Thomas
    Benn, Rt. Hon. WedgwoodGriffith, F. Kingsley (Middlesbro' W.)Lunn, William
    Bennett, Capt. Sir E. N. (Cardiff C.)Griffiths, T. (Monmouth, Pontypool)Macdonald, Gordon (Ince)
    Benson, G.Groves, Thomas E.MacDonald, Rt. Hon. J. R. (Seaham)
    Bentham, Dr. EthelGrundy, Thomas W.MacDonald, Malcolm (Bassetlaw)
    Bevan, Aneurin (Ebbw Vale)Hall, F. (York, W. R., Normanton)McElwee, A.
    Birkett, W. NormanHall, G. H. (Merthyr Tydvil)McEntee, V. L.
    Bondfield, Rt. Hon. MargaretHall, Capt. W. G. (Portsmouth, C.)McGovern, J. (Glasgow, Shettleston)
    Bowen, J. W.Hamilton, Mary Agnes (Blackburn)MacLaren, Andrew
    Bowerman, Rt. Hon. Charles W.Harris, Percy A.McShane, John James
    Broad, Francis AlfredHartshorn, Rt. Hon. VernonMander, Geoffrey le M.
    Bromfield, WilliamHastings, Dr. SomervilleMansfield, W.
    Bromley, J.Haycock, A. W.March, S.
    Brooke, W.Hayday, ArthurMarcus, M.
    Brothers, M.Hayes, John HenryMarkham, S. F.
    Brown, C. W. E. (Notts. Mansfield)Henderson, Right Hon. A. (Burnley)Marley, J.
    Brown, Ernest (Leith)Henderson, Arthur, Junr. (Cardiff, S.)Marshall, Fred
    Brown, Rt. Hon. J. (South Ayrshire)Henderson, Thomas (Glasgow)Mathers, George
    Brown, W. J. (Wolverhampton, West)Henderson, W. W. (Middx., Enfield)Matters, L. W.
    Buchanan, G.Herriotts, J.Melville, Sir James
    Burgess, F. G.Hirst, G. H. (York, W. R., Wentworth)Messer, Fred
    Buxton, C. R. (Yorks. W. R. Elland)Hirst, W. (Bradford, South)Middleton, G.
    Caine, Derwent Hall-Hoffman, P. C.Millar, J. D.
    Cameron, A. G.Hollins, A.Mills, J. E.
    Carter, W. (St. Pancras, S. W.)Hopkin, DanielMilner, Major J.
    Charleton, H. C.Horrabin, J. F.Montague, Frederick
    Chater, DanielHudson, James H. (Huddersfield)Morgan, Dr. H. B.
    Church, Major A. G.Hunter, Dr. JosephMorley, Ralph
    Cluse, W. S.Hutchison, Maj.-Gen. Sir R.Morris, Rhys Hopkins
    Cocks, Frederick SeymourIsaacs, GeorgeMorris-Jones, Dr. J. H. (Denbigh)
    Compton, JosephJenkins, W. (Glamorgan, Neath)Morrison, Herbert (Hackney, South)
    Cove, William G.John, William (Rhondda, West)Morrison, Robert C. (Tottenham, N.)
    Cowan, D. M.Johnston, ThomasMort, D. L.
    Daggar, GeorgeJones, F. Llewellyn- (Flint)Moses, J. J. H.
    Dallas, GeorgeJones, Rt. Hon. Leif (Camborne)Mosley, Sir Oswald (Smethwick)
    Dalton, HughJones, Morgan (Caerphilly)Muff, G.
    Davies, E. C. (Montgomery)Jowett, Rt. Hon. F. W.Muggeridge, H. T.
    Davies, Rhys John (Westhoughton)Jowitt, Sir W. A. (Preston)Murnin, Hugh
    Day, HarryKelly, W. T.Nathan, Major H. L.
    Denman, Hon. R. D.Kennedy, ThomasNoel Baker, P. J.
    Dukes, C.Kinley, J.Noel-Buxton, Baroness (Norfolk, N.)
    Duncan, CharlesKirkwood, D.Oldfield, J. R.
    Ede, James ChuterKnight, HolfordOliver, George Harold (Ilkeston)
    Edge, Sir WilliamLambert, Rt. Hon. George (S. Molton)Oliver, P. M. (Man., Blackley)
    Edmunds, J. E.Lang, GordonOwen, H. F. (Hereford)
    Edwards, C. (Monmouth, Bedwellty)Lansbury, Rt. Hon. GeorgePalin, John Henry.
    Edwards, E. (Morpeth)Lathan, G.Paling, Wilfrid
    Egan, W. H.Law, A. (Rosendale)Palmer, E. T.

    clearly the very good reason that we have for objecting to these matters being raked up, in order that duties may be levied upon people who have already paid very heavy Stamp Duty and very heavy Company Duty, for which they will get no consideration whatever in the levying of these Estate Duties on their properties.

    Question put, "That the word 'eighteen' stand part of the proposed Amendment."

    The House divided: Ayes, 273; Noes, 160.

    Perry, S. F.Shiels, Dr. DrummondTinker, John Joseph
    Pethick-Lawrence, F. W.Shillaker, J. F.Townend, A. E.
    Phillips, Dr. MarionShinwell, E.Trevelyan, Rt. Hon. Sir Charles
    Picton-Turbervill, EdithShort, Alfred (Wednesbury)Vaughan, D. J.
    Pole, Major D. G.Simmons, C. J.Viant, S. P.
    Potts, John S.Simon, E. D. (Manch'ter, Withington)Walker, J.
    Price, M. P.Simon, Rt. Hon. Sir JohnWallace, H. W.
    Quibell, D. J. K.Sinclair, Sir A. (Caithness)Wallhead, Richard C.
    Ramsay, T. B. WilsonSinkinson, GeorgeWalters, Rt. Hon. Sir J. Tudor
    Raynes, W. R.Smith, Ben (Bermondsey, Rotherhithe)Watkins, F. C.
    Richards, R.Smith, Frank (Nuneaton)Watson, W. M. (Dunfermline)
    Richardson, R. (Houghton-le-Spring)Smith, H. B. Lees- (Keighley)Wedgwood, Rt. Hon. Josiah
    Riley, Ben (Dewsbury)Smith, Rennie (Penistone)Wellock, Wilfred
    Riley, F. F. (Stockton-on-Tees)Smith, Tom (Pontefract)Welsh, James (Paisley)
    Ritson, J.Smith, W. R. (Norwich)Welsh, James C. (Coatbridge)
    Roberts, Rt. Hon. F. O. (W. Bromwich)Snell, HarryWest, F. R.
    Romeril, H. G.Snowden, Rt. Hon. PhilipWhite, H. G.
    Rosbotham, D. S. T.Sorensen, R.Whiteley, Wilfrid (Birm., Ladywood)
    Rowson, GuyStamford, Thomas W.Wilkinson, Ellen C.
    Salter, Dr. AlfredStephen, CampbellWilliams, David (Swansea, East)
    Samuel Rt. Hon. Sir H. (Darwen)Stewart, J. (St. Rollox)Williams, Dr. J. H. (Lianelly)
    Sanders, W. S.Strachey, E. J. St. LoeWilliams, T. (York, Don Valley)
    Sawyer, G. F.Strauss, G. R.Wilson, C. H. (Sheffield, Attercliffe)
    Scrymgeour, E.Sullivan, J.Wilson, J. (Oldham)
    Scurr, JohnSutton, J. E.Wilson, R. J. (Jarrow)
    Sexton, JamesTaylor, R. A. (Lincoln)Winterton, G. E. (Leicester, Loughb'gh)
    Shaw, Rt. Hon. Thomas (Preston)Thomas, Rt. Hon. J. H. (Derby)Wright, W. (Rutherglen)
    Shepherd, Arthur LewisThorne, W. (West Ham, Plaistow)
    Sherwood, G. H.Thurtle, ErnestTELLERS FOR THE AYES.—
    Shield, George WilliamTillett, BenMr. Allen Parkinson and Mr.
    William Whiteley.

    NOES.

    Acland-Troyte, Lieut.-ColonelDuckworth, G. A. V.Merriman, Sir F. Boyd
    Albery, Irving JamesDugdale, Capt. T. L.Mitchell-Thomson, Rt. Hon. Sir W.
    Allen, Sir J. Sandeman (Liverp'l., W.)Eden, Captain AnthonyMonsell, Eyres, Com. Rt. Hon. Sir B.
    Allen, Lt.-Col. Sir William (Armagh)Edmondson, Major A. J.Moore, Sir Newton J. (Richmond)
    Ashley, Lt.-Col. Rt. Hon. Wilfrid W.Elliot, Major Walter E.Morrison-Bell, Sir Arthur Clive
    Astor, Maj. Hn. John J. (Kent, Dover)England, Colonel A.Muirhead, A. J.
    Astor, ViscountessErskine, Lord (Somerset, Weston-s.-M.)Newton, Sir D. G. C. (Cambridge)
    Atholl, Duchess ofEverard, W. LindsayNicholson, O. (Westminster)
    Atkinson, C.Falle, Sir Bertram G.Nicholson, Col. Rt. Hn. W. G. (Ptrsf'ld)
    Baldwin, Rt. Hon. Stanley (Bewdley)Ferguson, Sir JohnNield, Rt. Hon. Sir Herbert
    Balfour, Captain H. H. (I. of Thanet)Fermoy, LordO'Connor, T. J.
    Beaumont, M. W.Fielden, E. S.O'Neill, Sir H.
    Berry, Sir GeorgeFison, F. G. ClaveringOrmsby-Gore, Rt. Hon. William
    Betterton, Sir Henry B.Ford, Sir P. J.Peake, Capt. Osbert
    Birchall, Major Sir John DearmanGalbraith, J. F. W.Penny, Sir George
    Bird, Ernest RoyGanzoni, Sir JohnPeto, Sir Basil E. (Devon, Barnstaple)
    Boothby, R. J. G.Gilmour, Lt.-Col. Rt. Hon. Sir JohnPliditch, Sir Philip
    Bourne, Captain Robert CroftGlyn, Major R. G. C.Power, Sir John Cecil
    Bowater, Col. Sir T. VansittartGrace, JohnRamsbotham, H.
    Bowyer, Captain Sir George E. W.Gulnness, Rt. Hon. Walter E.Rawson, Sir Cooper
    Boyce, H. L.Gunston, Captain D. W.Rentoul, Sir Gervais S.
    Bracken, B.Hacking, Rt. Hon. Douglas H.Richardson, Sir P. W. (Sur'y, Ch'ts'y)
    Braithwaite, Major A. N.Hall, Lieut.-Col. Sir F. (Dulwich)Roberts, Sir Samuel (Ecclesall)
    Brown, Col. D. C. (N'th'l'd., Hexham)Hamilton, Sir George (Ilford)Rodd, Rt. Hon. Sir James Rennell
    Brown, Brig.-Gen. H. C. (Berks, Newb'y)Hammersley, S. S.Ruggles-Brise, Lieut.-Colonel E. A.
    Buckingham, Sir H.Hannon, Patrick Joseph HenrySalmon, Major I.
    Burton, Colonel H. W.Harvey, Major S. E. (Devon, Totnes)Samuel, A. M. (Surrey, Farnham)
    Butler, R. A.Haslam, Henry C.Sandeman, Sir N. Stewart
    Carver, Major W. H.Henderson, Capt. R. R. (Oxf'd, Henley)Savery, S. S.
    Cautley, Sir Henry S.Hennessy, Major Sir G. R. J.Shepperson, Sir Ernest Whittome
    Cayzer, Sir C. (Chester, City)Herbert, Sir Dennis (Hertford)Smith, Louis W. (Sheffield, Hallam)
    Cayzer, Maj. Sir Herbt, R. (Prtsmth, S.)Hills, Major Rt. Hon. John WallerSmith-Carington, Neville W.
    Chadwick, Capt. Sir Robert BurtonHoare, Lt.-Col. Rt. Hon. Sir S. J. G.Somerville, A. A. (Windsor)
    Chamberlain, Rt. Hn. Sir J. A. (Birm., W.)Howard-Bury, Colonel C. K.Southby, Commander A. R. J.
    Chamberlain, Rt. Hon. N. (Edgbaston)Hurd, Percy A.Stanley, Maj. Hon. O. (W'morland)
    Christie, J. A.Hurst, Sir Gerald B.Steel-Maitland, Rt. Hon. Sir Arthur
    Cobb, Sir CyrilIveagh, Countess ofSueter, Rear-Admiral M. F.
    Cockerill, Brig.-General Sir GeorgeKindersley, Major G. M.Thomas, Major L. B. (King's Norton)
    Colfox, Major William PhilipKing, Commodore Rt. Hon. Henry D.Thomson, Sir F.
    Crichton-Stuart, Lord C.Lamb, Sir J. Q.Todd, Capt. A. J.
    Croft, Brigadier-General Sir H.Lane Fox, Col. Rt. Hon. George R.Tryon, Rt. Hon. George Clement
    Crookshank, Capt. H. C.Law, Sir Alfred (Derby, High Peak)Turton, Robert Hugh
    Croom-Johnson, R. P.Lewis, Oswald (Colchester)Vaughan-Morgan, Sir Kenyon
    Culverwell, C. T. (Bristol, West)Little, Dr. E. GrahamWallace, Capt. D. E. (Hornsey)
    Cunliffe-Lister, Rt. Hon. Sir PhilipLlewellin, Major J. J.Ward, Lieut.-Col. Sir A. Lambert
    Dalrymple-White, Lt.-Col. Sir GodfreyLong, Major Hon. EricWarrender, Sir Victor
    Davidson, Rt. Hon. J. (Hertford)Lymington, ViscountWayland, Sir William A.
    Davidson, Major-General Sir J. H.Macquisten, F. A.Wells, Sydney R.
    Davies, Dr. VernonMakins, Brigadier-General E.Williams, Charles (Devon, Torquay)
    Davies, Maj. Geo. F. (Somerset, Yeovil)Marjoribanks, E. C.Wilson, G. H. A. (Cambridge U.)
    Davison, Sir W. H. (Kensington, S.)Mason, Colonel Glyn K.Windsor-Clive, Lieut.-Colonel George

    Winterton, Rt. Hon. EarlWood, Rt. Hon. Sir KingsleyTELLERS FOR THE NOES.—
    Withers, Sir John JamesWorthington-Evans, Rt. Hon. Sir L.Captain Margesson and Major the
    Wolmer, Rt. Hon. ViscountYoung, Rt. Hon. Sir HiltonMarquess of Titchfield.
    Womersley, W. J.

    Proposed words there inserted in the Bill.

    I beg to move, in page 27, line 10, to leave out the word "total," and to insert instead thereof the word "gross."

    This Amendment deals once more with the question of reasonable remuneration. The case is this. A man transfers a landed estate to a company, but reserves to himself the right to be managing director, and he receives a payment for the work he does which is not excessive but reasonable. That being so, it seems reasonable that the benefit which that payment represents ought not to be struck at by this Clause. In the earlier stages of our debates the Chancellor of the Exchequer said that it was a reasonable point for consideration, and that the real difficulty was how to make a proper allowance for it without at the same time prejudicing the object he had in mind by the Clause as a whole. I suggest that it ought not to be difficult to do this. This is one alternative method; and a second alternative method is suggested by a later Amendment, on page 29, line 11, after the word "payment," to insert the words:
    "such sum as in the opinion of the Commissioners of Inland Revenue (subject to right of appeal under Section ten of the principal Act) represents the value of any services rendered in consideration of the payment."
    The two Amendments offer alternative methods by which it can be done. In the first Amendment I take the gross income instead of the total income, as one way of endeavouring to reach a fair measurement of the amount of work that is to be done in relation to any benefit, and the second Amendment provides a further alternative for determining that reasonable remuneration shall not be struck at by this Clause, while at the same time preserving the object of the Chancellor of the Exchequer not to open the door to evasion under this Bill. It may be that my Amendment to leave out "50 per cent." and insert "one-twelfth" might be considered to impose a charge, but the combination of the two, if the Chancellor of the Exchequer accepts them, would mean that the right hon. Gentleman would be able to meet the point which he himself has said deserves consideration without in any way prejudicing the object of the Clause. If he will work it out, he will see that this method would not open the door to any evasion, and that in some cases it might be stricter than the Clause as it stands at present. The result would be a basis of measurement which would be uniform and justifiable, whereas under the Clause you cannot tell whether a benefit that is allowed is too high or too little. Either of these methods provides that if a man has a benefit which merely consists of reasonable remuneration for the work he does, he should not be struck at, and I hope the Chancellor of the Exchequer will be able to see his way to accept one or the other. For preference, I would suggest the Amendment on page 29, line 11, to which I have referred, but in either case justice is done, and in neither is the object of the Clause prejudiced in any way.

    This Amendment has been on the Order Paper for some time, and, consequently, the Chancellor of the Exchequer and I have had an opportunity of considering it. We are unable to accept it. So far as the actual Amendment is concerned, to substitute the word "gross' for the word "total," the two things are very much the same but for the definition which appears in the Bill. There is not much in the Amendment. It is rather the starting point of a new scheme, and in regard to that scheme our view is that the proper method is to take the free income, that is, the income available for distribution, disregarding what I may call prior charges altogether in the way of debentures or preference shares, and see how much of that free income a deceased person got. If a deceased person received on an average 50 per cent. over the three accounting years, then it is perfectly safe to assume, with the safeguards we have inserted, that it is a tax evasion device which may safely be struck at.

    With regard to the desirability of having a Clause entitling the Commissioners of Inland Revenue to evaluate the services, I would only say that the experience which they have had of doing that under the Excess Profits Duty in the War has made everybody acquainted with the machinery realise how exceedingly undesirable it is. It is almost impossible to arrive at any conclusion. It necessarily results in a hard-and-fast rule-of-thumb being taken, which in many cases is wholly unsatisfactory. I appreciate the reasons which the right hon. Member for Tamworth (Sir A. Steel-Maitland) has advanced, but I have to say that the Chancellor of the Exchequer prefers the machinery we have devised, namely, 50 per cent. of the free income rather than a percentage of the gross income or the total income of the company.

    Amendment negatived.

    Amendments made: In page 27, line 22, after the word "value," insert the words:

    "at the date of the death—(1)."

    In line 22, leave out from the word "transfer" to the word "is," in line 25, and insert instead thereof the words:

    "or
    (2) if the subject of the transfer has been sold or exchanged by the company, either of the subject of the transfer or of the property in the hands of the company which is or represents the proceeds of the sale or exchange."

    In page 28, line 34, leave out the words "personal chattels not yielding income," and insert instead thereof the words:

    "patents or copyrights, or of any moveable tangible property, except money and securities."

    In line 35, leave out the words "of property made," and insert instead thereof the words "where either the deceased or the company is acting."

    In line 40, after the word "than," insert the words:

    "the following payments, that is to say:—(1)."

    Division No. 448.]

    AYES.

    [6.29 p.m.

    Acland-Troyte, Lieut.-ColonelBalfour, Captain H. H. (I. of Thanet)Brown, Col. D. C. (N'th'l'd., Hexham)
    Albery, Irving JamesBeaumont, M. W.Brown, Brig.-Gen. H. C. (Berks, Newb'y)
    Allen, Sir J. Sandeman (Liverp'l., W.)Berry, Sir GeorgeBuckingham, Sir H.
    Allen, Lt.-Col. Sir William (Armagh)Betterton, Sir Henry B.Burton, Colonel H. W.
    Ashley, Lt.-Col. Rt. Hon. Wilfrid W.Birchall, Major Sir John DearmanButler, R. A.
    Astor, Maj, Hon. John J. (Kent, Dover)Bird, Ernest RoyCadogan, Major Hon. Edward
    Astor, ViscountessBoothby, R. J. G.Carver, Major W. H.
    Atholl, Duchess ofBourne, Captain Robert CroftCautley, Sir Henry S.
    Atkinson, C.Bowyer, Captain Sir George E. W.Cayzer, Sir C. (Chester, City)
    Baldwin, Rt. Hon. Stanley (Bewdley)Boyce, H. L.Cayzer, Maj. Sir Herbt, R. (Prtsmth, S.)
    Balfour, George (Hampstead)Braithwaite, Major A. N.Chadwick, Capt. Sir Robert Burton

    In line 40, leave out the word "and," and insert instead thereof the words:

    "the company;
    (2)."

    In page 29, line 1, leave out the word "and," and insert instead thereof "(3)."

    In line 4, at the end, insert the words:

    "(4) Payments of or on account of royalties, not being royalties limited to cease at the death of the deceased."—[Mr. P. Snowden.]

    I beg to move, in page 29, line 11, after the word "payment," to insert the words:

    "and
    (2) such sum as in the opinion of the Commissioners of Inland Revenue (subject to right of appeal under Section ten of the principal Act) represents the value of any services rendered in consideration of the payment."
    I am not going to take up the time of the House by speaking again on this question, but let me say that nothing more unjust, after the remarks of the Chancellor of the Exchequer earlier this afternoon, I can hardly imagine. The Clause as it now stands is ridiculous. I have in my hands the estimate of an estate which might be capitalised in two different ways. In one way it means that the benefit which would be allowed would be £1,500 on a comparatively small estate. Capitalised in a somewhat different way no benefit at all would be allowed, because the income as defined by this Clause is a minus quantity. The Chancellor of the Exchequer has accused us of not trying to amend this Clause. In this particular case it is one of the most ridiculous provisions which can be imagined, and I take this opportunity of saying so.

    Question put, "That those words be there inserted in the Bill."

    The House divided: Ayes, 162; Noes, 272.

    Chamberlain, Rt. Hn. Sir J. A. (Birm., W.)Henderson, Capt. R. R. (Oxf'd, Henley)Reid, David D. (County Down)
    Chamberlain, Rt. Hon. N. (Edgbaston)Heneage, Lieut.-Colonel Arthur P.Rentoul, Sir Gervais S.
    Christie, J. A.Hennessy, Major Sir G. R. J.Richardson, Sir P. W. (Sur'y, Ch'ts'y)
    Cobb, Sir CyrilHerbert, Sir Dennis (Hertford)Roberts, Sir Samuel (Ecclesall)
    Cockerill, Brig.-General Sir GeorgeHills, Major Rt. Hon. John WallerRodd, Rt. Hon. Sir James Rennell
    Cohen, Major J. BrunelHoward-Bury, Colonel C. K.Ruggles-Brise, Lieut.-Colonel E. A.
    Colfox, Major William PhilipHurd, Percy A.Salmon, Major I.
    Cranborne, ViscountHurst, Sir Gerald B.Samuel, A. M. (Surrey, Farnham)
    Crichton-Stuart, Lord C.Iveagh, Countess ofSandeman, Sir N. Stewart
    Croft, Brigadier-General Sir H.Kindersley, Major G. M.Sassoon, Rt. Hon. Sir Philip A. G. D.
    Crookshank, Capt. H. C.King, Commodore Rt. Hon. Henry D.Savery, S. S.
    Croom-Johnson, R. P.Lamb, Sir J. Q.Shepperson, Sir Ernest Whittome
    Culverwell, C. T. (Bristol, West)Lane Fox, Col. Rt. Hon. George R.Sinclair, Col. T. (Queen's U., Belfst)
    Cunliffe-Lister, Rt. Hon. Sir PhilipLeighton, Major B. E. P.Smith, Louis W. (Sheffield, Hallam)
    Dalrymple-White, Lt. Col. Sir GodfreyLewis, Oswald (Colchester)Smith-Carington, Neville W.
    Davidson, Rt. Hon. J. (Hertford)Little, Dr. E. GrahamSmithers, Waldron
    Davidson, Major-General Sir J. H.Llewellin, Major J. J.Somerville, A. A. (Windsor)
    Davies, Dr. VernonLocker-Lampson, Com. O. (Handsw'th)Southby, Commander A. R. J.
    Davies, Maj. Geo. F. (Somerset, Yeovil)Long, Major Hon. EricStanley, Maj. Hon. O. (W'morland)
    Davison, Sir W. H. (Kensington, S.)Lymington, ViscountSteel-Maitland, Rt. Hon. Sir Arthur
    Duckworth, G. A. V.Macquisten, F. A.Sueter, Rear-Admiral M. F.
    Eden, Captain AnthonyMakins, Brigadier-General E.Thomas, Major L. B. (King's Norton)
    Edmondson, Major A. J.Margesson, Captain H. D.Titchfield, Major the Marquess of
    Elliot, Major Walter E.Marjoribanks, E. C.Todd, Capt. A. J.
    Erskine, Lord (Somerset, Weston-s-M.)Mason, Colonel Glyn K.Tryon, Rt. Hon. George Clement
    Everard, W. LindsayMerriman, Sir F. BoydTurton, Robert Hugh
    Falle, Sir Bertram G.Mitchell-Thornton, Rt. Hon. Sir W.Vaughan-Morgan, Sir Kenyon
    Ferguson, Sir JohnMond, Hon. HenryWallace, Capt. D. E. (Hornsey)
    Fermoy, LordMoore, Sir Newton J. (Richmond)Ward, Lieut.-Col. Sir A. Lambert
    Fielden, E. B.Morden, Col. W. GrantWardlaw-Milne, J. S.
    Galbraith, J. F. W.Morrison-Bell, Sir Arthur CliveWarrender, Sir Victor
    Ganzoni, Sir JohnMulrhead, A. J.Wayland, Sir William A.
    Gilmour, Lt.-Col. Rt. Hon. Sir JohnNewton, Sir D. G. C. (Cambridge)Wells, Sydney R.
    Glyn, Major R. G. C.Nicholson, O. (Westminster)Williams, Charles (Devon, Torquay)
    Grace, JohnNicholson, Col. Rt. Hn. W. G. (Ptrsf'ld)Wilson, G. H. A. (Cambridge U.)
    Grenfell, Edward C. (City of London)Nield, Rt. Hon. Sir HerbertWindsor-Clive, Lieut.-Colonel George
    Guinness, Rt. Hon. Walter E.O'Connor, T. J.Withers, Sir John James
    Gunston, Captain D. W.O'Neill, Sir H.Womersley, W. J.
    Hacking, Rt. Hon. Douglas H.Ormsby-Gore, Rt. Hon. WilliamWood, Rt. Hon. Sir Kingsley
    Hall, Lieut.-Col. Sir F. (Dulwich)Peake, Capt. OsbertWorthington-Evans, Rt. Hon. Sir L.
    Hamilton, Sir George (Ilford)Peto, Sir Basil E. (Devon, Barnstaple)Young, Rt. Hon. Sir Hilton
    Hammersley, S. S.Power, Sir John Cecil
    Hannon, Patrick Joseph HenryRamsbotham, H.TELLERS FOR THE AYES.—
    Haslam, Henry C.Rawson, Sir CooperSir Frederick Thomsom and Sir
    George Penny.

    NOES.

    Adamson, Rt. Hon. W. (Fife, West)Carter, W. (St. Pancras, S. W.)Graham, Rt. Hon. Wm. (Edin., Cent.)
    Adamson, W. M. (Staff., Cannock)Charleton, H. C.Gray, Milner
    Addison, Rt. Hon. Dr. ChristopherChater, DanielGreenwood, Rt. Hon. A. (Colne)
    Aitchison, Rt. Hon. Craigie M.Church, Major A. G.Grenfell, D. R. (Glamorgan)
    Alexander, Rt. Hon. A. V. (Hillsbro')Clarke, J. S.Griffith, F. Kingsley (Middlesbro' W.)
    Alpass, J. H.Cluse, W. S.Griffiths, T. (Monmouth, Pontypool)
    Ammon, Charles GeorgeClynes, Rt. Hon. John R.Groves, Thomas E.
    Arnott, JohnCocks, Frederick Seymour.Grundy, Thomas W.
    Aske, Sir RobertCompton, JosephHall, F. (York. W. R., Normanton)
    Attlee, Clement RichardCove, William G.Hall, G. H. Merthyr Tydvil)
    Baker, John (Wolverhampton, Bilston)Cowan, D. M.Hall, Capt. W. G. (Portsmouth, C.)
    Baldwin, Oliver (Dudley)Daggar, GeorgeHamilton, Mary Agnes (Blackburn)
    Barnes, Alfred JohnDallas, GeorgeHamilton, Sir R. (Orkney & Zetland)
    Barr, JamesDalton, HughHarris, Percy A.
    Batey, JosephDavies, E. C. (Montgomery)Hartshorn, Rt. Hon. Vernon
    Benn, Rt. Hon. WedgwoodDavies, Rhys John (Westhoughton)Hastings, Dr. Somerville
    Bennett, Capt. Sir E. N. (Cardiff C.)Day, HarryHaycock, A. W.
    Benson, G.Denman, Hon. R. D.Hayday, Arthur
    Bentham, Dr. EthelDukes, C.Hayes, John Henry
    Bevan, Aneurin (Ebbw Vale)Duncan, CharlesHenderson, Right Hon. A. (Burnley)
    Birkett, W. NormanEde, James ChuterHenderson, Arthur, Junr. (Cardiff, S.)
    Bondfield, Rt. Hon. MargaretEdge, Sir WilliamHenderson, Thomas (Glasgow)
    Bowen, J. W.Edmunds, J. E.Henderson, W. W. (Middx., Enfield)
    Bowerman, Rt. Hon. Charles W.Edwards, C. (Monmouth, Bedwellty)Herriotts, J.
    Broad, Francis AlfredEdwards, E. (Morpeth)Hirst, W. (Bradford, South)
    Bromfield, WilliamEgan, W. H.Hoffman, P. C.
    Bromley, J.Elmley, ViscountHollins, A.
    Brooke, W.Freeman, PeterHopkin, Daniel
    Brothers, M.Gardner, B. W. (West Ham, Upton)Horrabin, J. F.
    Brown, C. W. E. (Notts, Mansfield)Gardner, J. P. (Hammersmith, N.)Hudson, James H. (Huddersfield)
    Brown, Ernest (Leith)George, Major G. Lloyd (Pembroke)Hunter, Dr. Joseph
    Brown, Rt. Hon. J. (South Ayrshire)Gibson, H. M. (Lancs, Mossley)Hutchison, Maj.-Gen. Sir R.
    Buchanan, G.Gill, T. H.Isaacs, George
    Bergess, F. G.Gillett, George M.Jenkins, W. (Glamorgan, Neath)
    Buxton, C. R. (Yorks, W. R. Elland)Glassey, A. E.John, William (Rhondda, West)
    Caine, Derwent Hall-Gossling, A. G.Jones, F. Llewellyn- (Flint)
    Cameron, A. G.Graham, D. M. (Lanark, Hamilton)Jones, Rt. Hon. Leif (Camborne)

    Jones, Morgan (Caerphilly)Morrison, Herbert (Hackney, South)Simon, E. D. (Manch'ter, Withington)
    Jowett, Rt. Hon. F. W.Morrison, Robert C. (Tottenham, N.)Simon, Rt. Hon. Sir John
    Jowitt, Sir W. A. (Preston)Mort, D. L.Sinclair, Sir A. (Caithness)
    Kelly, W. T.Moses, J. J. H.Sinkinson, George
    Kennedy, ThomasMosley, Sir Oswald (Smethwick)Sitch, Charles H.
    Kinley, J.Muff, G.Smith, Frank (Nuneaton)
    Kirkwood, D.Muggeridge, H. T.Smith, H. B. Lees- (Kelghley)
    Knight, HoltordMurnin, HughSmith, Rennie (Penistone)
    Lambert, Rt. Hon. George (S. Molton)Nathan, Major H. L.Smith, Tom (Pontefract)
    Lang, GordonNoel Baker, P. J.Smith, W. R. (Norwich)
    Lansbury, Rt. Hon. GeorgeNoel-Buxton, Baroness (Norfolk, N.)Snell, Harry
    Lathan, G.Oldfield, J. R.Snowden, Rt. Hon. Philip
    Law, A. (Rosendale)Oliver, George Harold (Ilkeston)Sorensen, R.
    Lawrence, SusanOliver, P. M. (Man., Blackley)Stamford, Thomas W.
    Lawrie, Hugh Hartley (Stalybridge)Owen, H. F. (Hereford)Stephen, Campbell
    Lawson, John JamesPalin, John HenryStewart, J. (St. Rollox)
    Lawther, W. (Barnard Castle)Paling, WilfridStrauss, G. R.
    Leach, W.Palmer, E. T.Sullivan, J.
    Lee, Frank (Derby, N. E.)Parkinson, John Allen (Wigan)Sutton, J. E.
    Lee, Jennie (Lanark, Northern)Perry, S. F.Taylor R. A. (Lincoln)
    Lees, J.Peters, Dr. Sidney JohnThomas, Rt. Hon. J. H. (Derby)
    Lewis, T. (Southampton)Pethick-Lawrence, F. W.Thorne, W. (West Ham, Plaistow)
    Lloyd, C. EllisPhillips, Dr. MarionThurtle, Ernest
    Logan, David GilbertPicton-Turbervill, EdithTillett, Ben
    Longden, F.Pole, Major D. G.Tinker, John Joseph
    Lovat-Fraser, J. A.Potts, John S.Townend, A. E.
    Lowth, ThomasPrice, M. P.Trevelyan, Rt. Hon. Sir Charles
    Lunn, WilliamQuibell, D. J. K.Viant, S. P.
    Macdonald, Gordon (Ince)Ramsay, T. B. WilsonWalker, J.
    MacDonald, Malcolm (Bassetlaw)Raynes, W. R.Wallace, H. W.
    McElwee, A.Richards, R.Wellhead, Richard C.
    McEntee, V. L.Richardson, R. (Houghton-le-Spring)Walters, Rt. Hon. Sir J. Tudor
    McGovern, J. (Glasgow, Shettleston)Riley, Ben (Dewsbury)Watkins, F. C.
    McKinlay, A.Riley, F. F. (Stockton-on-Tees)Watson, W. M. (Dunfermline)
    MacLaren, AndrewRitson, J.Wedgwood, Rt. Hon. Josiah
    McShane, John JamesRoberts, Rt. Hon. F. O. (W. Brorrwich)Wellock, Wilfred
    Mander, Geoffrey le M.Romeril, H. G.Welsh, James (Paisley)
    Mansfield, W.Rosbotham, D. S. T.Welsh, James C. (Coatbridge)
    March, S.Rowson, GuyWest, F. R.
    Marcus, M.Salter, Dr. AlfredWhite, H. G.
    Markham, S. F.Samuel, Rt. Hon. Sir H. (Darwen)Whiteley, Wilfrid (Birm., Ladywood)
    Marley, J.Sanders, W. S.Wilkinson, Ellen C.
    Marshall, FredSawyer, G. F.Williams, David (Swansea, East)
    Mathers, GeorgeScrymgeour, E.Williams, Dr. J. H. (Llaneily)
    Matters, L. W.Scurr, JohnWilliams, T. (York, Don Valley)
    Melville, Sir JamesSexton, JamesWilson, C. H. (Sheffield, Attercliffe)
    Messer, FredShaw, Rt. Hon. Thomas (Preston)Wilson, J. (Oldham)
    Millar, J. D.Shepherd, Arthur LewisWilson, R. J. (Jarrow)
    Mills, J. E.Sherwood, G. H.Winterton, G. E. (Leicester, Loughb'gh)
    Milner, Major J.Shield, George WilliamWright, W. (Rutherglen)
    Montague, FrederickShiels, Dr. Drummond
    Morgan, Dr. H. B.Shillaker, J. F.TELLERS FOR THE NOES.—
    Morley, RalphShinwell, E.Mr. B. Smith and Mr. William
    Morris, Rhys HopkinsShort, Alfred (Wednesbury)Whiteley.
    Morris-Jones, Dr. J. H. (Denbigh)Simmons, C. J.

    I beg to move, in page 30, line 38, at the end, to insert the words:

    "(7) Property which is deemed to pass on a death by virtue of the provisions of this section shall, notwithstanding anything in any Act, be an estate by itself, and shall not be aggregated with any other property."
    The object of the Amendment is to insert a Sub-section which provides that when duty is payable under this Clause, the property in respect of which it is payable shall not be aggregated, but shall be an estate by itself. The Chancellor of the Exchequer, as a result of discussions during the Committee stage, has put down an Amendment in exactly the same form to exempt from aggregation property which falls under Clause 33. I hope that it is only by an over sight that the exemption from aggregation was not applied to property passing under Clause 32 as well as that passing under Clause 33. I ought to call attention to the fact that later on, where the Chancellor of the Exchequer has the Amendment to which I have referred, I have put down an Amendment to his Amendment in order to make his Amendment cover not only "this Section," to use the words of his Amendment, but the preceding Section also. Of course, if the Chancellor of the Exchequer or the Financial Secretary is prepared to accept the principle of my Amendment, it is a matter of indifference to us, and it is only a question of draftsmanship as to which is the better way of doing what is intended. But I suggest that if non-aggregation is to be permitted in respect of one of these Clauses, it should be permitted in the case of the other as well. I do not think I can say more unless any objection is made to my proposal. In that event, and if there is any more argument to be given on the subject, I must leave it to my hon. Friends who are supporting the Amendment.

    I beg to second the Amendment.

    I find it rather difficult to understand why on Clauses which are admittedly designed to catch land companies, in the case of land which is settled the Chancellor of the Exchequer should have agreed to non-aggregation, and in the case where the estate is not settled he has apparently omitted to do so. In fairness the condition of aggregation should apply in both cases.

    There should be no objection to accepting the Amendment. The only reason why we have not got the words in is that we are advised, and I think it is the fact, that it is quite plain that there is no aggregation under this Clause, for this reason: The question as to whether you aggregate property or not for the purpose of Estate Duty depends upon Section 4 of the Finance Act, 1894. Broadly speaking, the question is whether the deceased ever had an interest in the property. The House will observe that there is this distinction between Clause 32 and Clause 33: In Clause 33, what is deemed to pass is the property. That being so, it is necessary, since the deceased at one time had an interest in the property, to prevent Section 4 of the Finance Act of 1894, applying, and it is necessary to put in precise words. Hence my right hon. Friend's Amendment. When we come to Clause 32, on the other hand, what is deemed to pass is a hypothetical sum of money which, it is quite plain, the deceased never had any interest in at all.

    We entirely agree with the hon. Member that there should be no difference between Clauses 32 and 33, but having gone into the matter we are satisfied that there is no difference. The only reason why we put the proviso into Clause 33 is that there you have a case of the deceased having had an interest in that which is deemed to pass. The present case is not a case of a person having had an interest in that which is deemed to pass. If any right hon. or hon. Gentleman opposite satisfies me that there is any real ground for doubt in the matter, I can only say that the draftsman naturally does not want to have inserted words which would make it look as if he does not know his law and which appear to be wholly unnecessary. If I am satisfied that there is any real ground for doubting the correctness of what I have said, I shall certainly accept the Amendment, but as at present advised, I say frankly that it seems to me that what I have been told is the law, is the law, and I cannot see any ground for accepting the Amendment. But I am quite willing to listen to arguments.

    If I may speak again by the leave of the House I wish to say that although the argument of the Attorney-General is a very excellent one and one which might well carry the day in the courts, I do not feel that the Clause is by any means so plain in this respect as he thinks. Certainly I think that the draftsman would be absolved from any charge of being foolish or of not knowing his law if he put in these words. I think it would be much safer to insert the words and I venture to press for the acceptance of the Amendment.

    I do not venture to put my opinion against that of the Attorney-General and I confess that, at first sight, his point appears to be right. That was not, however, the view which I took on reading the Order Paper and the Bill itself. If the Attorney-General feels any difficulty from the draftsman's point of view in accepting this Amendment perhaps he would accept the Amendment in the name of the hon. Member for Watford (Sir D. Herbert) to the Chancellor's Amendment on Clause 33—I refer to the proposal to insert after the word "this" in the Chancellor's Amendment the words "or the last preceding," making the Chancellor's proposal read

    "Property which is deemed to pass on a death by virtue of the provisions of this or the last preceding section."
    That Amendment to the Chancellor's Amendment would have exactly the same effect as this Amendment.

    I think it would be highly desirable, because, without wishing to argue the matter, I may say that considerable doubt have been felt on this side of the House as to whether or not our point was covered. I understand that the Government have no wish to do otherwise than accept the spirit of the Amendment. Perhaps they will also accept the words. The alternative form to which I have referred might be rather easier from the draftsman's point of view, but from our point of view it does not matter which Amendment is accepted.

    By leave of the House, since I have been asked a question, may I say that we will accept this Amendment, in this form.

    Amendment agreed to.

    I beg to move, in page 30, line 38, after the words last inserted, to insert the words:

    "Where the total assets of a company, by reference to which a sum of money deemed to pass under this section is calculated, consist to any extent of real property, that proportion of estate duty payable under this section which is applicable to the proportion of such assets consisting of real property may be paid in the manner provided by Sub-section (8) of Section six of the principal Act, as amended by Sub-section (1) of Section eighteen of the Finance Act, 1919, and where any such real property consists to any extent of agricultural property the provisions of Section twenty-three of the Finance Act, 1925, shall apply to the proportion of duty payable under this section applicable to such agricultural property as if the duty were payable directly in respect of such agricultural property."
    The object of this Amendment is simply to secure that Estate Duty in this case shall be payable by instalments, as in the case of estates or agricultural land passing at the death of the present owner. The general effect of this Clause is that where landed estates are conveyed to a company they shall be liable to Estate Duty on the death of the transferor, to the same degree as though they were still his property. I am putting the matter quite broadly. If they are punished to that extent, they ought at any rate to have this compensaion. If they are to pay duty to the same extent, they ought to have the benefit of being able to pay the duty by instalments. I do not wish to labour the point; it is, I think, obviously just, and I trust the Attorney-General will accept the Amendment.

    I am sorry that we cannot accept this Amendment. The House realises that personal property bears duty as from the date of the death. Real property of course differs in that Estate Duty is not payable until a year after the death. Agricultural property is in a still more favoured position because the rate of duty is not so high. What passes under Clause 32 is, of course, a sum of money, and we feel that it is unfair to confer this exceptional privilege—for it is a privilege—upon a sum of money in the case of a company which, on the hypothesis that our Clause is right, is a tax-dodging company. It is for those reasons that we feel that we should not depart from the ordinary law in regard to the liability to duty of personal property as from the date of death.

    Amendment negatived.

    Clause 33—(Estate Duty Where Life-Interest Is Transferred To Private Company)

    I beg to move, in page 31, line 1, to leave out the words "and whether by one or more transactions."

    I submit that these words go far beyond the object of the Clause as expressed in the White Paper. I understand the object of the Clause is to hit transactions in which a tenant for life and a remainder man combine to sell their interest to a company, with the result that on the death of the ex-tenant for life, nothing is deemed to pass and no duty is payable. But as the Clause is drafted at present it may, I submit, give rise to an absurd situation. There may be half a dozen, or a dozen transactions between the original sale by the tenant for life and the purchase by the company. You may have A. the tenant for life, and B. the remainder man, selling to C. and C. reselling to B., and so it may go on through a great number of transactions. As the Clause stands, subject, of course, to the Amendment standing next on the Paper in the name of the Chancellor of the Exchequer—in line 4, at the end, to insert the words:
  • "(a) the transfer was made before the first day of August, nineteen hundred and eighteen; or
  • (b) the property was settled property and the interest of the deceased would in any case have failed by reason of his death before it would have become an interest in possession; or."
  • —and subject also to the proviso dealing with bona fide sales, this position may arise. You may have the absurd result that on the death of the tenant for life the company may have to pay, although it has never had anything at all to do with the tenant for life. There may have been an infinite number of intermediate transactions, and although the purchase by the company may have been for full consideration, if part of that consideration is a payment by instalments or a payment in shares, the company will have to pay on the death of a man of whom they have never heard and with whom they have had no connection whatever. I cannot think that that is the real object of the Clause, and I ask the Attorney-General to agree to the omission of these words.

    I cannot possibly accept the Amendment, and I really think that the horrible consequences which the hon. Baronet foresees are not in the least degree possible under the Clause as it is drawn. We are dealing in this Clause with the case in which the estate has been transferred by the deceased and the person interested in the remainder to or for the benefit of the company. True, the words are "whether directly or indirectly." True, that means to say that if they do it through the intervention of an intermediary that does not get them out of the Clause, but it is quite manifest that if there is a sale, let us say to C, who is not the company at all, the fact that C, thereafter, independently sells or transfers to a company cannot possibly make that transaction a sale or transfer to the company "directly or indirectly" by the tenant for life or the remainder man. That is a quite impossible result. The reason for these words "whether by one or more transactions" is that we are dealing with the case, and only with the case, where both the deceased and the person entitled in remainder have transferred and, manifestly, it is immaterial whether they really append their names to the same piece of paper and transfer by the same instrument, or whether the tenant for life does it by one instrument and the tenant in remainder does it by another. Obviously, that case should be hit. Equally, although there may be one or two transactions in between and although there may be some interval of time, so long as these transactions are all part of a concerted plan, such a transfer by the tenant for life and the remainder man to a company obviously must come within the reach of the Clause. That is why we have inserted these words "whether by one or more transactions" and I could not possibly suggest to my right hon. Friend the Chancellor of the Exchequer that these words should be omitted.

    The explanation of the Attorney-General shows what a mistake it is to make these Clauses date back to cases which have occurred long ago. This is an example of the harm that may result. There is, for example, the case of a man who was the tenant for life of settled property and who has been a spendthrift and has sold his life-interest. You may have in the same family a remainder man also a spendthrift who has sold his reversion. As I understand the statement of the Attorney-General, that life interest and that reversion may separately pass through several hands, being paid for in certain values, and ultimately, at some period in these numerous transactions, the purchaser for value of the life interest gets into touch with the purchaser for value of the reversion. These two together form a company. They may be people who are dealing in these interests in land and engaging in transactions of a semi-speculative nature. They base their purchase price upon what is likely to be the true value, calculated mathematically, after making all arrangements for all Duties which have to be paid and taking into account all the possibilities of avoiding them. These transactions may have been carried out years ago. If this Amendment were accepted, cases of that kind, where those interests have passed through various hands, would escape, as I think they ought to escape if they have taken place years before any legislation of this kind was threatened. I think if the Government insist on refusing this Amendment they are again doing what I describe as an injustice to people who have acted in a perfectly legal and bona fide way, as the law allowed them to act, years before any legislation of this kind was introduced.

    The Attorney-General said that it was necessary to catch these separate transactions which form part of a concerted plan. I agree, but when we were discussing this matter in Committee I pointed out that the words used in this Clause go far beyond that purpose. I gave a case as an illustration, and I gather that the Attorney-General feels that it is a case which ought not to be hit by the Bill. Supposing the owner of a life estate sells to a company without having the faintest idea of the reversion ever getting into the hands of the company. He and the company have entered into a transaction which nobody attacks. The company has simply bought the life estate and, on the termination of that life estate, duty will be payable in the ordinary way. Perhaps years afterwards the company which has been spending money on the development of the property, thinks that it would be wise to acquire the reversion of the estate. They seek out and find the owner of the reversion and buy the reversion from him, without the original tenant for life knowing anything whatever

    Division No. 449.]

    AYES.

    [7.1 p.m.

    Adamson, Rt. Hon. W. (Fife, West)Brown, Rt. Hon. J. (South Ayrshire)Elmley, Viscount
    Adamson, W. M. (Staff., Cannock)Brown, W. J. (Wolverhampton, West)Freeman, Peter
    Addison, Rt. Hon. Dr. ChristopherBuchanan, G.Gardner, B. W. (West Ham, Upton)
    Aitchison, Rt. Hon. Cralgie M.Burgess, F. G.Gardner, J. P. (Hammersmith, N.)
    Alexander, Rt. Hon. A. V. (Hillsbro')Buxton, C. R. (Yorks. W. R. Elland)George, Major G. Lloyd (Pembroke)
    Ammon, Charles GeorgeCalne, Derwent Hall-Gibson, H. M. (Lancs, Mossley)
    Arnott, JohnCameron, A. G.Gill, T. H.
    Aske, Sir RobertCarter, W. (St. Pancras, S. W.)Gillett, George M.
    Attlee, Clement RichardCharleton, H. C.Glassey, A. E.
    Baker, John (Wolverhampton, Bilston)Chater, DanielGossling, A. G.
    Baldwin, Oliver (Dudley)Clarke, J. S.Graham, D. M. (Lanark, Hamilton)
    Barnes, Alfred JohnCluse, W. S.Graham, Rt. Hon. Wm. (Edin., Cent.)
    Barr, JamesClynes, Rt. Hon. John R.Greenwood, Rt. Hon. A. (Colne)
    Batey, JosephCocks, Frederick SeymourGrenfell, D. R. (Glamorgan)
    Benn, Rt. Hon. WedgwoodCompton, JosephGriffith, F. Kingsley (Middlesbro' W.)
    Bennett, Capt. Sir E. N. (Cardiff C.)Cove, William G.Griffiths, T. (Monmouth, Pontypool)
    Benson, G.Cowan, D. M.Groves, Thomas E.
    Bentham, Dr. EthelDaggar, GeorgeGrundy, Thomas W.
    Bevan, Aneurin (Ebbw Vale)Dallas, GeorgeHall, F. (York, W. R., Normanton)
    Birkett, W. NormanDalton, HughHall, G. H. (Merthyr Tydvil)
    Blindell, JamesDavies, E. C. (Montgomery)Hall, Capt. W. G. (Portsmouth, C.)
    Bondfield, Rt. Hon. MargaretDavies, Rhys John (Westhoughton)Hamilton, Mary Agnes (Blackburn)
    Bowen, J. W.Day, HarryHarris, Percy A.
    Bowerman, Rt. Hon. Charles W.Denman, Hon. R. D.Hartshorn, Rt. Hon. Vernon
    Broad, Francis AlfredDukes, C.Hastings, Dr. Somerville
    Bromfield, WilliamDuncan, CharlesHaycock, A. W.
    Bromley, J.Ede, James ChuterHayday, Arthur
    Brooke, W.Edge, Sir WilliamHayes, John Henry
    Brothers, M.Edmunds, J. E.Henderson, Arthur, Junr. (Cardiff, S.)
    Brown, C. W. E. (Notts, Mansfield)Edwards, E. (Morpeth)Henderson, Thomas (Glasgow)
    Brown, Ernest (Leith)Egan, W. H.Henderson, W. W. (Middx., Enfield)

    about it. He has ceased to have any interest in the matter. He has sold his interest in the estate and parted with it for good, and there is no reason why he should be further concerned about the matter. Even the reversioner may not know anything about the sale of the life estate. He gets a price offered for the reversion and he accepts it. Nobody can say that these transactions form part of a concerted plan. They do not form part of a concerted plan, and yet it is clear that together they would be hit by this Clause.

    I urged in Committee that these words should be omitted. I thought and I still think that if the transactions were part of a concerted plan they would be hit at without these words. If they are part of a concerted plan, if they are it truth one transaction, they would be looked at as a whole, and any Court in the wide world would hold that the transaction was one which was hit at by this Clause, without these words "whether by one or more transactions." Certain words have been used here which the Attorney-General is bound to admit would cover a transaction which in no sense forms part of a concerted plan.

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

    The House divided: Ayes, 273; Noes, 151.

    Herriotts, J.Mathers, GeorgeShinwell, E.
    Hirst, G. H. (York W. R. Wentworth)Matters, L. W.Short, Alfred (Wednesbury)
    Hirst, W. (Bradford, South)Melville, Sir JamesSimmons, C. J.
    Hoffman, P. C.Messer, FredSimon, E. D. (Manch'ter, Withington)
    Hollins, A.Middleton, G.Sinclair, Sir A. (Caithness)
    Hopkin, DanielMillar, J. D.Sinkinson, George
    Horrabin, J. F.Milner, Major J.Sitch, Charles H.
    Hudson, James H. (Huddersfield)Montague, FrederickSmith, Ben (Bermondsey, Rotherhithe)
    Hunter, Dr. JosephMorgan, Dr. H. B.Smith, Frank (Nuneaton)
    Hutchison, Maj.-Gen. Sir R.Morley, RalphSmith, H. B. Lees- (Keighley)
    Isaacs, GeorgeMorris, Rhys HopkinsSmith, Rennie (Penistone)
    Jenkins, W. (Glamorgan, Neath)Morrison, Herbert (Hackney, South)Smith, Tom (Pontefract)
    John, William (Rhondda, West)Morrison, Robert C. (Tottenham, N.)Smith, W. R. (Norwich)
    Johnston, ThomasMort, D. L.Snell, Harry
    Jones, F. Llewellyn- (Flint)Moses, J. J. H.Snowden, Rt. Hon. Philip
    Jones, Rt. Hon. Leif (Camborne)Mosley, Sir Oswald (Smethwick)Snowden, Thomas (Accrington)
    Jones, Morgan (Caerphilly)Muff, G.Sorensen, R.
    Jowett, Rt. Hon. F. W.Muggeridge, H. T.Stamford, Thomas W.
    Jowitt, Sir W. A. (Preston)Murnin, HughStephen, Campbell
    Kedward, R. M. (Kent, Ashford)Nathan, Major H. L.Stewart, J. (St. Rollox)
    Kelly, W. T.Newman, Sir R. H. S. D. L. (Exeter)Strauss, G. R.
    Kennedy, ThomasNoel Baker, P. J.Sullivan, J.
    Kinley, J.Noel-Buxton, Baroness (Norfolk, N.)Sutton, J. E.
    Kirkwood, D.Oldfield, J. R.Taylor, R. A. (Lincoln)
    Lambert, Rt. Hon. George (S. Molton)Oliver, George Harold (Ilkeston)Taylor, W. B. (Norfolk, S. W.)
    Lang, GordonOliver, P. M. (Man., Blackley)Thomas, Rt. Hon. J. H. (Derby)
    Lathan, G.Owen, H. F. (Hereford)Thorne, W. (West Ham. Plaistow)
    Law, Albert (Bolton)Palin, John Henry.Thurtle, Ernest
    Law, A. (Rosendale)Paling, WilfridTillett, Ben
    Lawrence, SusanPalmer, E. T.Tinker, John Joseph
    Lawrie, Hugh Hartley (Stalybridge)Parkinson, John Allen (Wigan)Townend, A. E.
    Lawther, W. (Barnard Castle)Perry, S. F.Trevelyan, Rt. Hon. Sir Charles
    Leach, W.Pethick-Lawrence, F. W.Vaughan, D. J.
    Lee, Frank (Derby, N. E.)Phillips, Dr. MarionViant, S. P.
    Lee, Jennie (Lanark, Northern)Picton-Turbervill, EdithWalkden, A. G.
    Lees, J.Potts, John S.Walker, J.
    Lewis, T. (Southampton)Price, M. P.Wallace, H. W.
    Lloyd, C. EllisQuibell, D. J. K.Wallhead, Richard C.
    Logan, David GilbertRamsay, T. B. WilsonWalters, Rt. Hon. Sir J. Tudor
    Longbottom, A. W.Raynes, W. R.Watkins, F. C.
    Longden, F.Richards, R.Watson, W. M. (Dunfermline)
    Lovat-Fraser, J. A.Richardson, R. (Houghton-le-Spring)Wedgwood, Rt. Hon. Josiah
    Lowth, ThomasRiley, F. F. (Stockton-on-Tees)Wellock, Wilfred
    Lunn, WilliamRitson, J.Welsh, James (Paisley)
    Macdonald, Gordon (Ince)Roberts, Rt. Hon. F. O. (W. Bromwich)Welsh, James C. (Coatbridge)
    MacDonald, Rt. Hon. J. R. (Seaham)Romeril, H. G.West, F. R.
    MacDonald, Malcolm (Bassetlaw)Rosbotham, D. S. T.Westwood, Joseph
    Macdonald, Sir M. (Inverness)Rowson, GuyWhite, H. G.
    McElwee, A.Salter, Dr. AlfredWhiteley, Wilfrid (Birm., Ladywood)
    McEntee, V. L.Samuel, Rt. Hon. Sir H. (Darwen)Wilkinson, Ellen C.
    McGovern, J. (Glasgow, Shettleston)Sanders, W. S.Williams, David (Swansea, East)
    McKinlay, A.Sawyer, G. F.Williams, Dr. J. H. (Llanelly)
    MacLaren, AndrewScrymgeour, E.Williams, T. (York, Don Valley)
    McShane, John JamesScurr, JohnWilson, C. H. (Sheffield, Attercliffe)
    Mander, Geoffrey le M.Sexton, JamesWilson, J. (Oldham)
    Mansfield, W.Shaw, Rt. Hon. Thomas (Preston)Wilson, R. J. (Jarrow)
    March, S.Shepherd, Arthur LewisWinterton, G. E. (Leicester, Loughb'gh)
    Marcus, M.Sherwood, G. H.Wright, W. (Rutherglen)
    Markham, S. F.Shield, George William
    Marley, J.Shields, Dr. DrummondTELLERS FOR THE AYES.—
    Marshall, FredShillaker, J. F.Mr. Charles Edwards and Mr.
    William Whiteley.

    NOES.

    Acland-Troyte, Lieut.-ColonelBrown, Brig.-Gen. H. C. (Berks, Newb'y)Culverwell, C. T. (Bristol, West)
    Allen, Sir J. Sandeman (Liverp'l., W.)Burton, Colonel H. W.Cunliffe-Lister, Rt. Hon. Sir Philip
    Allen, Lt.-Col. Sir William (Armagh)Butler, R. A.Dalrymple-White. Lt.-Col. Sir Godfrey
    Ashley, Lt.-Col. Rt. Hon. Wilfrid W.Carver, Major W. H.Davidson, Rt. Hon. J. (Hertford)
    Astor, ViscountessCautley, Sir Henry S.Davies, Dr. Vernon
    Atholl, Duchess ofCayzer, Sir C. (Chester, City)Davies, Maj. Geo. F. (Somerset, Yeovil)
    Atkinson, C.Cayzer, Maj. Sir Herbt, R. (Prtsmth, S.)Davison, Sir W. H. (Kensington, S.)
    Baldwin, Rt. Hon. Stanley (Bewdley)Chadwick, Capt. Sir Robert BurtonDuckworth, G. A. V.
    Balfour, George (Hampstead)Chamberlain, Rt. Hn. Sir J. A. (Birm., W.)Eden, Captain Anthony
    Balfour, Captain H. H. (I. of Thanet)Chamberlain, Rt. Hon. N. (Edgbaston)Edmondson, Major A. J.
    Beaumont, M. W.Chapman, Sir S.Elliot, Major Walter E.
    Berry, Sir GeorgeChristie, J. A.Erskine, Lord (Somerset, Weston-s. M.)
    Betterton, Sir Henry B.Cobb, Sir CyrilEverard, W. Lindsay
    Bevan, S. J. (Holborn)Cockerill, Brig.-General Sir GeorgeFalle, Sir Bertram G.
    Birchall, Major Sir John DearmanCohen, Major J. BrunelFerguson, Sir John
    Bird, Ernest RoyCranborne, ViscountFermoy, Lord
    Boothby, R. J. G.Crichton-Stuart, Lord C.Fielden, E. B.
    Bourne, Captain Robert Croft.Croft, Brigadier-General Sir H.Galbraith, J. F. W.
    Braithwaite, Major A. N.Crookshank, Capt. H. C.Ganzoni, Sir John
    Brown, Col. D. C. (N'th'l'd., Hexham)Croom-Johnson, R. P.Gilmour, Lt.-Col. Rt. Hon. Sir John

    Glyn, Major R. G. C.Mitchell-Thomson, Rt. Hon. Sir W.Somerville, A. A. (Windsor)
    Grenfell, Edward C. (City of London)Mond, Hon. HenrySouthby, Commander A. R. J.
    Gritten, W. G. HowardMonsell, Eyres, Com. Rt. Hon. Sir B.Stanley, Lord (Fylde)
    Guinness, Rt. Hon. Walter E.Moore, Sir Newton J. (Richmond)Stanley, Maj. Hon. O. (W'morland)
    Gunston, Captain D. W.Morden, Col. W. GrantSteel-Maitland, Rt. Hon. Sir Arthur
    Hacking, Rt. Hon. Douglas H.Morrison-Bell, Sir Arthur CliveSueter, Rear-Admiral M. F.
    Hall, Lieut.-Col. Sir F. (Dulwich)Muirhead, A. J.Thomas, Major L. B. (King's Norton)
    Hamilton, Sir George (Ilford)Newton, Sir D. G. C. (Cambridge)Titchfield, Major the Marquess of
    Hammersley, S. S.Nicholson, O. (Westminster)Todd, Capt. A. J.
    Hannon, Patrick Joseph HenryNicholson, Col. Rt. Hn. W. G. (Ptrsf'ld)Tryon, Rt. Hon. George Clement
    Haslam, Henry C.O'Connor, T. J.Turton, Robert Hugh
    Henderson, Capt. R. R. (Oxf'd, Henley)O'Neill, Sir H.Vaughan-Morgan, Sir Kenyon
    Heneage, Lieut.-Colonel Arthur P.Peake, Captain OsbertWallace, Capt. D. E. (Hornsey)
    Hennessy, Major Sir G. R. J.Penny, Sir GeorgeWard, Lieut.-Col. Sir A. Lambert
    Herbert, Sir Dennis (Hertford)Peto, Sir Basil E. (Devon, Barnstaple)Wardlaw-Milne, J. S.
    Howard-Bury, Colonel C. K.Power, Sir John CecilWarrender, Sir Victor
    Hurd, Percy A.Ramsbotham, H.Wayland, Sir William A.
    Hurst, Sir Gerald B.Rawson, Sir CooperWells, Sydney R.
    Iveagh, Countess ofReid, David D. (County Down)Williams, Charles (Devon, Torquay)
    Kindersley, Major G. M.Richardson, Sir P. W. (Sur'y, Ch'ts'y)Wilson, G. H. A. (Cambridge U.)
    King, Commodore Rt. Hon. Henry D.Roberts, Sir Samuel (Ecclesall)Windsor-Clive, Lieut.-Colonel George
    Lamb, Sir J. Q.Ruggles-Brise, Lieut.-Colonel E. A.Winterton, Rt. Hon. Earl
    Leighton, Major B. E. P.Salmon, Major I.Withers Sir John James
    Lewis, Oswald (Colchester)Samuel, A. M. (Surrey, Farnham)Wolmer, Rt. Hon. Viscount
    Llewellin, Major J. J.Sandeman, Sir N. StewartWomersley, W. J.
    Long, Major Hon. EricSassoon, Rt. Hon. Sir Philip A. G. D.Worthington-Evans, Rt. Hon. Sir L.
    Lymington, ViscountSavery, S. S.Young, Rt. Hon. Sir Hilton
    Macquisten, F. A.Shepperson, Sir Ernest Whittome
    Makins, Brigadier-General E.Sinclair, Col. T. (Queen's U., Belfast)TELLERS FOR THE NOES.—
    Marjoribanks, E. C.Smith, Louis W. (Sheffield, Hallam)Sir Frederick Thomson and Captain
    Mason, Colonel Glyn K.Smith-Carington, Neville W.Sir George Bowyer.
    Merriman, Sir F. BoydSmithers, Waldron

    I beg to move, in page 31, line 4, at the end, to insert the words:

  • "(a) the transfer was made before the first day of August, nineteen hundred and eighteen; or
  • (b) the property was settled property and the interest of the deceased would in any case have failed by reason of his death before it would have become an interest in possession; or."
  • I do not want to delay the House, but, I should like to have an explanation or be told that I am right as to the meaning of paragraph (b). This Clause is difficult to construe; it consists of a series of exceptions by which when a transfer has been made to a company, the transferee should be brought within the scope of the Clause. Under paragraph (b) one of these conditions will be where a tenant for life in remainder has predeceased the tenant for life, and therefore the person entitled to the property at the death of the tenant for life is not the tenant for life in remainder but the tenant in tail. I understand that this paragraph is to meet the point raised by the hon. and learned Member for Holborn (Mr. S. Bevan). I should be glad to know if I am right.

    Yes, the hon. Member is quite right, this is to meet the point which the hon. and learned Member for Holborn (Mr. S. Bevan) put in Committee.

    Amendment agreed to.

    I beg to move, in page 31, line 9, to leave out from the word "or," to the word "or," in line 10, and to insert instead thereof the words:

    "other right to receive periodical payments, not being payments on account of purchase money being a capital sum of fixed amount."

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

    Question proposed, "That those words be there inserted in the Bill."

    I beg to move, as an Amendment to the proposed Amendment, in line 2, to leave out from the first word "payments," to the end of the proposed Amendment.

    It will be remembered that one of the points raised in Committee—and I think the Attorney-General agreed—was that where a company contracted to make a capital payment but could not make it in cash all at once, it was necessary to take the disqualification out of this Clause. I am puzzled to make out the effect of these words:
    "not being payments on account of purchase money being a capital sum of fixed amount."
    As I understand these words, the effect is that if the company contract with vendors, that is with the tenant for life and the reversioner to make payments, the sum to be paid in three equal instal- ments, then in that case the whole of the share of the tenant for life will come in under this Clause, and the property will deem to pass on his death, although if he had paid out a fixed sum, or an annuity had been granted to the tenant for life, then the property would not go and would come out of the operation of this Clause.

    We cannot accept this Amendment. We have inserted these words to meet a point raised in Committee. Our object is to see that there must be a capital sum of a fixed amount.

    Amendment to proposed Amendment negatived.

    Proposed words there inserted in the Bill.

    Further Amendment made: In page 31, line 14, after the word "enjoyment," insert the words:

    "(otherwise than under a lease or agreement for a lease at a rack rent)."—[Mr. Pethick-Lawrence.]

    I beg to move, in page 31, line 21, after the word "of," to insert the words:

    "dividends on shares of the company."
    I remember, when this point was raised in Committee, that the Attorney-General argued that because of the Finance Act of 1910, if a tenant for life retained any interest in a property whatsoever after transferring it, then if he transferred it within three years of death, the whole of the property was treated as his, and for that purpose he had to pay Death Duties, but it seems to me very undesirable to put the obligation and the onus of paying duties on a company whenever it is possible to put it on the estate of the deceased. After all, under a later Clause there is a rather complicated method of valuing shares held by a deceased person in one of these companies, under which the value of the shares is related to the assets of the company, and it seems to me that if the tenant for life takes payment in the shape of shares and receives dividends during his life, what should be their value at his death should be the value of the shares as ascertained by that Clause. But what is more important is that the person to be responsible for the payment of the Death Duties in such cases should not be the company, but should be the executors of the tenant for life.

    The whole principle of the Finance Act of 1900 depends upon this, that there must be a complete severance of interest. If that is a good law—and it has been in force for a large number of years—it is manifestly undesirable that people should get round it by a mere device. We intend by this Clause to stop that being got round, and again, therefore, the whole principle which we insist upon is severance of interest. We want to see that the life tenant really has a severed interest, and therefore we say that he must have severed all his interest in the property or

    "any part thereof or of any benefit secured to him, whether by contract or otherwise,"
    and then we make certain exceptions and say:
    "otherwise than in respect or on account of debentures or loans or purchase money."
    No one realises better than the hon. and gallant Member for Oxford (Captain Bourne) that a debenture holder is in a totally different position from a shareholder. The former is merely a person to whom the company owes money, but if a man is a shareholder, by the analogy of the 1900 Act it is idle to say that he washes his hands of all interest in the company. He may be the only shareholder in the company. Consequently, we say that such a man ought to be dealt with under the 1900 Act, and for that reason it is impossible to accept an Amendment which inserts the words proposed by the hon. and gallant Member.

    It is difficult to follow the Attorney-General's argument. He wants severance from the property, and I agree that there is a test there, whether the man still retains an ownership or control as owner in a property which he is purporting to pass over to a company, but the ownership of shares does not entitle him to the benefit of the property in any way. He would have exactly the same rights as any other shareholder in the company, and no other rights, and the hon. and learned Gentleman does not go quite far enough, because there is a lot of transactions which, although they might come within the Act, are bona fide intended to develop an estate which may, for example, want financing. It may want new money so that roads and public services may be given to the estate and a building estate developed. A property of that sort may be financed by outsiders, who may say, "We are not going to give cash for your property, but if you will take shares in the company, we will finance the venture."

    That is highly desirable, but the hon. and learned Gentleman, in refusing this Amendment, is refusing to allow the development of an estate company in the most usual way. He is putting a totally unnecessary obstacle in the way of the development of an estate, and he is doing that in order to be consistent with the Act of 1910. That Act requires severence. I do not object to that—I think that is a reasonable test—but it surely is complete severance if a man transfers his property to a company, even though he gets some shares in that company. If the hon. and learned Gentleman says the man must not have control of that company, he has already provided for that in other Clauses. He is taking now an unnecessary protection, which will be an interference with the ordinary development of a building or other estate.

    Amendment negatived.

    I beg to move, in page 32, line 9, at the end, to insert the words:

    "(3) Property which is deemed to pass on a death by virtue of the provisions of this section shall, notwithstanding anything in any Act, be an estate by itself, and shall not be aggregated with any other property."

    What is the meaning of these words? We have heard about our not assisting the Revenue, but it would appear that this Amendment of the Government's may result in loss to the Revenue, and that the purpose of these words is to invite people to separate up their estates into so many private companies because they will then be charged Estate Duty not on the total of the estate but on the separate amounts, which will not be aggregated together, and therefore will bear duty at a lower rate than would otherwise be the case. That would appear to be the plain meaning of the Amendment, and I ask, for the purpose of enlightenment, whether that is the intention of the Government.

    This is an Amendment which was pressed upon my right hon. Friend in Committee, and it means that he will lose a certain amount of revenue, as the hon. and learned Member opines. That is the object of the Amendment.

    Amendment agreed to.

    Clause 34—(Charge Of Duty And Powers Of Recovery)

    I beg to move, in page 32, line 14, at the end, to insert the words:

    "unless such company be incorporated outside Great Britain and does not carry on business or own property in Great Britain."
    This is one of a number of Amendments in my name and in the names of several of my hon. Friends, all directed to one point, which has been brought to the attention of the Government by myself and others on more than one occasion. If the Chancellor of the Exchequer is prepared to do something in this matter but prefers to do it on the lines suggested by another Amendment, I shall be quite satisfied, but the principle to which this Amendment is directed is one of substantial importance. I am very far from wanting to put any obstacle in the Chancellor's way when he seeks to prevent people avoiding payment of their fair share of taxation by resorting to the medium of companies outside this country, but I am anxious that we should not pass legislation which purports to do something quite impossible and ineffective and which would, at the best, make Parliament appear ridiculous.

    But it is worse than that; it might even conceivably be dangerous. The Chancellor of the Exchequer and the Attorney-General, I know, would agree that if a man formed a company in Switzerland, or the United States of America, or Canada, or South Africa, and that company did nothing that brought it under the jurisdiction of Parliament—that is to say, was not carrying on business in this country and did not own property in this country—it would be quite impossible to get at that company; and, as I say, it is only making Parliament ridiculous to pass legislation that such a company should be chargeable with Estate Duty and, when called upon to do so, should supply in- formation, and, when it did not supply the information, that all its directors should be liable to penalties. We ought to guard against legislation of that kind.

    I go further and say that there is a point of substance beyond that. Perhaps it is not unfair to remind the Chancellor of the Exchequer that what are now the great United States of America were lost to this country by an attempt on the part of this country to tax what was then a British Colony. If these Clauses are passed in their present form, they would purport to enact that a company under the jurisdiction of the Canadian Parliament, and not in any way under the jurisdiction of this Parliament, should be liable under certain circumstances for the payment of Estate Duty under our law, should be liable to supply information, and should be liable to penalties. One can hardly expect that any Government would try to put such a thing into force, but it is highly undesirable that we should even purport to pass legislation affecting companies which are subject to the jurisdiction of our great Dominions overseas and are not subject to the jurisdiction of this Parliament. I believe that I am right in saying—and I shall be interested if the Attorney-General will give me his opinion—that if this Amendment were carried, the Clause would not be in the least degree less effective than it is at the present time. If the Attorney-General could convince me that I am wrong, there might be some grounds for resisting the Amendment in its present form.

    I still hold that some Amendment directed to this particular point ought to be made in the Bill. We have two grounds for it, both of them, I think, sufficiently substantial. One is the question of the dignity of this Parliament, and the other is the question of the possibility that awkward situations might arise. It would be possible that a director of a company entirely outside the jurisdiction of this Parliament, who was a foreigner not liable to the laws of this country, might come over here on a temporary visit, and he would be technically under this Clause. It could be enforced by a common informer, and what is more calculated to cause trouble with a foreign country or one of our overseas Dominions than for a subject of that country to come over here, and to be made the victim of a common informer succeeding in enforcing penalties against him in conection with legislation against the company, with which we have nothing to do, and for which we have no business even to attempt legislation.

    I beg to second the Amendment.

    I do so because I think that this really goes as far as it is possible for this House to go in enforcing the law. I understand that the objection of the Chancellor of the Exchequer to leave out of a later Clause the words "wheresoever incorporated" was that it would be possible to form a company registered abroad which would in fact hold land in this country, and that if a company registered abroad owned property in Great Britain and was not included, the door would be open to a certain amount of evasion. But I suggest that in the case of a holding company with shares which is registered abroad, and whose offices and directors are abroad, it is absolutely impossible for this House to enforce the law, however much we may want to do so. If a man chooses to transfer personal property to a company registered in France, and appoints two of his friends in France to act as directors of that company, there is not a single person who is amenable to any law that we may pass in this House, and it is undesirable that we should put on our Statute Book a law against subjects of another country which we cannot enforce and have no means of enforcing. For that reason, I hope that the Chancellor will accept the Amendment.

    I do not defend the position of a man who makes a holding company of his personal property in another country, and if the Chancellor can devise some method of catching that gentleman and compelling him to contribute his fair share of the taxation of his country I should be pleased, but I do not think he will do it under this Clause. It is a pity to put on the Statute Book legislation against foreign subjects which might lead the country of those subjects to pass legislation against our subjects, and which we cannot enforce in a court of law. This Amendment really gives the Chancellor of the Exchequer all he can hope to achieve, and if he accepts it, he will not be in any way worsened.

    The wording of this Amendment does not matter very much. We have become quite familiar with the purpose which it is intended to achieve, for the hon. Member for Watford (Sir D. Herbert) has taken a great interest in this question throughout our protracted debates on these Clauses. His purpose is to exclude foreign companies, and the main reason that he has put forward is the impracticability or the impossibility of bringing such foreign companies within the jurisdiction of our law. No one would defend the case of a foreign company where the company was registered abroad for the deliberate purpose of securing avoidance of Estate Duty. Upon that we all agree. I do not maintain for a moment, if we keep the words of the Clause as they are, that we shall be able to catch every one of these deliberate evasions. In some cases I think we shall, because there roust be many such companies that will have property in this country in one form or another—

    But I except those expressly. I am not attempting to shut out foreign companies, except those which are not incorporated in this country and have no property in this country or are not carrying on business in this country. It is only those which the Chancellor cannot get at that I want to shut out, and it is those which it would be dangerous to attempt to attack.

    It is quite true that the hon. Member's Amendment is much narrower in its scope than the other proposal he has made, namely, the Amendment to omit the words "wheresoever incorporated." The first of our points is that there may be property in this country. If that property were acquired by the company after the date of the transfer, that case would not be covered by his Amendment.

    The right hon. Gentleman is mistaken. At any time when the duty is payable, if there is property in this country, then it can be done. It is not a question of owning property at the time the Act is passed, but at the time the claim arises.

    That may be so, but I ask the hon. Gentleman to deal with that point later, and I have no doubt that my hon. and learned Friend will respond. I want to deal with the point that the hon. Member for Watford has repeatedly made. It is that it is no use puting words into an Art of Parliament or laying down powers which will be inoperative and cannot be exercised. At any rate, they can do no harm, and there may be cases where they may be quite effective. It is for that reason that we have put the Clause in the form in which it appears in the Bill. There is this to be said also, that the very fact that we have those powers will, I think, act as a warning to those who might be inclined to evade Death Duties by registration of a company abroad. There is considerable value in the Clause merely from that point of view.

    The Chancellor of the Exchequer gave two arguments. The first was disposed of as soon as he read the Amendment. The Clause provides that Estate Duty shall be payable and that in certain cases it shall be a debt due from the company concerned to His Majesty. The Amendment says that that shall not apply if such company be incorporated outside Great Britain, and does not carry on business or own property in Great Britain; that is to say, if the company so incorporated outside Great Britain own any property in this country it would be liable, or if it carried on business in this country it would be liable. It is only in those two cases that you can enforce the law against the company, so that the Amendment of my hon. Friend does not deprive the revenue authorities of any power to enforce the law in cases where they could otherwise enforce it. Then the Chancellor said, "Let us put this Clause in because it can do no harm." My hon. Friend pointed out the harm which it can do. Beside the company being liable, the directors are liable. The director of one of these companies might be a citizen of the United States or a bank nominee—a bank manager or a lawyer in America. He comes over here in the ordinary course of business, and he is suddenly confronted with a claim from the Crown in respect to a transaction the details of which he knows nothing. That is not only a harm, but a position which is bound to lead us into trouble with our own Dominions and with foreign nations.

    It seems to me that again the Chancellor of the Exchequer would be wise to accept a little advice from this side of the House. We have improved his Bill Clause by Clause, notwithstanding his ingratitude, and we want to do it again. He is smiling on this occasion, and I must congratulate him on his smile; it is a fascinating smile. Now that he is in this good humour, cannot he consider this a little more? We are not trying to protect the man who forms a company abroad for the purpose of tax dodging. We are trying to make the Clause a workable Clause and one that will not do harm, because there might easily arise out of this Clause some great scandal through a director of one of these foreign companies being seized over here for debt, and in order to placate the Government of the national whom we had seized we might have to alter the law. We do not want to make that mistake by trying to do something more than is required, something which the Chancellor of the Exchequer can at best recommend by saying that it does no harm, because it is also true to say that it does no good, except, as he says, that it may have some effect in terrorem. At any rate it might do so much harm that the Clause might have to be amended, and we say that he could avoid that by meeting us.

    I appeal to the Chancellor of the Exchequer to have regard to some of the very serious considerations which are raised by this provision in the Bill. On Clause 36 there is an Amendment standing in my name dealing with very much the same point—In page 34, line 19, after the word "incorporated," to insert the words:

    "which shall in respect of any one or more of the three revenue years prior to the death of the deceased person have been charged to Income Tax, under Case I of Schedule D of the Income Tax Act, 1918."
    It may be for the convenience of the House that I should do no more than formally move that Amendment, if it should be called later, and deal with the subject now, both from the point of view of this Amendment and of my own. First I would ask the Chancellor to note the curious result that will follow from the adoption of the words as they appear in the Bill. If hon. Members will turn to Sub-section (4) of Clause 32 they will see the first of the obligations put upon companies that come within the purview of this part of the Bill. It is provided there that the income of a company from any source shall be computed in accordance with the provisions of the Income Tax Acts. In other words, a company which is in no way subject to the jurisdiction either of Parliament, the British Courts or the Inland Revenue Commissioners is to be required to compute its income in accordance with the provisions of the Income Tax Acts. Under the Income Tax Acts the Income of a company is computed according to the source whence it arises. If you have a foreign company with an income derived from England, is that domestic income or is it foreign income? If you have a company incorporated in France deriving income from France, is that income to be deemed to be domestic income or foreign income? If the accounts of a foreign company are to be calculated in all respects in accordance with the provisions of the Income Tax Acts there will be complete topsy-turvydom, because what is domestic income for the purposes of the Income Tax Acts will be foreign income for the purposes of the company, and what is domestic income in the hands of the company will be foreign income for the purposes of the income Tax Acts. It is like Alice in Wonderland.

    That is not the end of the story, for, as the Bill stands, by Clause 34 there is to be created a debt due from the company concerned to His Majesty. In the same Clause there is given to this company, which is outside the jurisdiction of Parliament or the Courts, all the powers conferred on accountable persons by the principal Act. How in the world can you give powers conferred by the principal Act on accountable persons when those accountable persons may be outside the jurisdiction? Really, it cannot be done. Here is one more example of the confusion of mind, the change of mind, that has taken place over the preparation of this whole series of Clauses. The internal evidence makes it quite clear that they have undergone many transformations since they were first drafted, and they have passed through many hands in the course of drafting and have been surveyed by many minds directed to entirely different purposes.

    The Chancellor of the Exchequer and the Attorney-General have told us that the main object sought under these Clauses was to deal with companies formed for the express purpose of evading Estate Duties in respect of land. There have been many discussions on the subject, and the companies in question have even been called land companies. We have proceeded in our discussions largely on the footing that we were dealing with land companies, but we do not need to deal with foreign companies if this is a question of land being transferred to foreign companies, because the mere act of the transfer of land or any interest in land to a foreign company involves complete forfeiture, under the Mortmain Acts, with the result that the State would obtain not Death Duties upon the death of the transferor but the whole property upon the completion of the transaction. Therefore, it is perfectly clear that in relation to foreign companies the Bill cannot be directed to land companies, and yet more than once the Chancellor of the Exchequer and the Attorney-General, in attempting to justify this extraordinary series of Clauses, have emphasised the fact that they were framed for the sole purpose of preventing evasion by the formation of land companies, have stated that if the necessity arose for legislation dealing with a different class of transaction they would have to introduce fresh legislation, because this Bill was not aimed at that end.

    I say that originally it was not in the mind of anyone that the Bill should extend to land companies. Until the last moment, the last hour before the Bill was presented to the House, it was never intended that this provision should attach to any company except those subject to the jurisdiction of this House and the courts of this country. In Sub-section (4) the Commissioners of Inland Revenue may require any company—and that includes a foreign company—to which this part of the Bill applies to furnish them within a certain period with certain particulars, and in default of doing so they are liable to a fine, and in certain events their directors are to be liable to a further fine. Let me draw the Attorney-General's attention to the concluding provisions of this egregious Clause. The British Parliament is conferring upon the Commissioners in respect of foreign companies powers under Section 53 of the Crown Suits Act and, in Scotland, the Succession Duty Act of 1853. These Acts, which relate solely to those within our jurisdiction, are to be applied to companies and persons abroad. If I may say so without being offensive, that is fantastic, and I do not believe the Government can seriously have realised the implications of the words to which they have set their hands.

    The matter goes very much further even than I have indicated. It really is one of the most fundamental Clauses in this Bill, or in any Bill, because this is an attempt on the part of the Parliament of this country to do nothing less than infringe the sovereignty of our Dominions and of foreign States. That is the plain English of it. The Chancellor of the Exchequer shakes his head. He is an old and distinguished Member of this House, and a foremost Member of the Government, and I speak to him with the respect which is due to him, but I say deliberately that he is being misled, or is misleading himself, if he imagines for one moment that anything less than a serious principle of constitutional law is involved in this matter, a serious question of international law and, I would even say, of international relations.

    So far as this provision is concerned, this Bill applies to companies throughout the world, irrespective of the jurisdiction to which they are subject. In a debate in Committee the Chancellor of the Exchequer said of an Amendment which I moved in relation to the taxation of the reserves of a company that it would involve an entirely new departure in relation to Income Tax law, and that for that reason, amongst others, he could not accept it. Here we have an entirely new departure, not only in Income Tax law but in the whole legislation of this country. But let me confine myself to the Income Tax law. It has always been a principle of the fiscal legislation of this country that before any tax or duty could be imposed certain conditions precedent should exist. What are those conditions precedent? One of them is that the person sought to be taxed should be physically within the jurisdiction, should be ordinarily resident within the jurisdiction. Another point as regards Income Tax which is germane to the Amendment standing in my name is that, if control of the company registered abroad is exercised here, if the directing minds of the company are in this country, then as the law stands to-day that company is deemed to be carrying on business in this country and as being ordinarily resident in this country. Those are the provisions with regard to Income Tax, and of course income derived from this country is subject to tax whoever may receive it. Take the Estate Duty, and you will find that the same principles apply. Either a person liable to Estate Duty must be domiciled here, or the property in respect of which duty is sought to be charged must be situated in this country. Both in regard to Income Tax and Estate Duty those two fiscal canons with regard to taxation have to be fulfilled, and by this Clause both those fundamental canons of fiscal legislation may be completely disregarded as far as foreign companies are concerned.

    8.0 p.m.

    The Chancellor of the Exchequer has enunciated a new proposition this evening as regards legislation. It is that it matters not what are the words or the formula or the provisions contained in a British Act of Parliament. They are to be considered merely as a caveat to the world at large, because the Chancellor of the Exchequer has stated in terms to night that he knows that his proposal before the House is in large measure in effective. It will be a sorry day when the British Parliament knowingly and consciously incorporates in an Act of Parliament promises known to be nugatory by their authors. The House of Commons, in its long history, as far as I know, has never yet passed a Bill knowing on the authority of the Minister of the Crown at the moment when he placed the proposal before it, that, even if it was intended to be effective, yet in fact it would not and could not be effective.

    I notice that right hon. Gentlemen and hon. Gentlemen opposite have been merely laughing at the points which have been put with regard to this Amendment by the hon. and gallant Member for North-East Bethnal Green (Major Nathan). I agree with every word and with all the very cogent arguments which have been addressed to the House by the hon. and gallant Member. Like him, and like my hon. Friends behind me, I object to what is sometimes described as "fool" legislation which cannot be enforced. If the Attorney-General is going to address the House, as the Chancellor of the Exchequer indicated that he might, I should like to ask him to tell us categorically whether it is possible to enforce a claim for duty against a company incorporated in the Dominions or some foreign country, which neither carries on business nor has any property in this country If that is not possible, then it is, in my submission, wrong that Parliament should label itself as trying to enforce the impossible.

    I want to deal with this question from another point of view. The Chancellor of the Exchequer said that he wanted to put this proposal on the Statute Book on the chance of being able to enforce it. May I put this case to the right hon. Gentleman. We all know that probate has to be taken out in this country, even by persons of foreign domicile and residence for the purpose of dealing with estates in this country. Take, for example, a resident in one of the Dominions or in a foreign country who dies domiciled there but in respect of part of whose estate probate has to be taken out in this country. An affidavit has to be sworn as to the estate involved. I suggest to the Chancellor of the Exchequer that, if this Clause stands as it is now, he would not merely have the opportunity, but he would be bound to take the opportunity, of demanding that there should be included in that affidavit any transactions of the nature described in these Clauses but carried out by the deceased through the means of a company which had no connection whatever with tax dodging in this country, or anything of the sort, but which was a company incorporated in a foreign State dealing in transactions with the deceased, who was resident in that State, for purposes which had nothing to do with the revenue laws of this country but are the domestic concern of the State in which the transactions took place. If the representatives of the Chancellor of the Exchequer do their duty they will be obliged to insist on the inclusion in the affidavit sworn in this country of all property which would literally come within the words of this Measure.

    I do not care how you look at this question; whether you look at it from the point of view of its being a thing which in this country may be considered to be reprehensible, but as to which the machinery is not sufficient to make it amenable to the jurisdiction of this country—in which case I think it is "fool" legislation—or whether in the course of trying to make it amenable you may be obliged to drag in all sorts of other things. In the latter case in order to give effect to the strict letter of the law, the revenue authorities would be obliged to insist on transactions of this sort which take place entirely outside the jurisdiction of this country being brought within the scope of the Revenue Acts of this country. I hope that the Government will accept the Amendment.

    Under the present law, there are three exceptions in our legislation in respect of subjects of a foreign nation. One is if they come to reside in this country, the second is if they carry on business here, and the third is if they hold property here. Those are the only cases at the present time in which the State has a right to impose obligations on the subjects of other nations. Russia has tried it, but they have now passed a decree dealing with property outside their jurisdiction, and they have no power to legislate in respect of people outside their own country. I would like to put this case to the Attorney-General. Some 10 years ago an American citizen in America transferred American shares to an American company under such circumstances that if it had taken place in England would have come within the provisions of this Clause. Last year that subject became naturalised in this country and he died. He is a person who has entered into a transaction which comes within the wording of this Clause. At once that American company which received those shares 10 years ago would have become liable to certain obligations, and the officials in this country could have demanded certain information and copies of balance-sheets of profit and loss. Those officials would certainly be told by any ordinary managing director to go to a warm place, but, if that director happened to come to this country, he could be sued and made liable to a penalty not exceeding £500. That is the position, and, if that sort of thing can be done under this Bill, then I think it is a very serious mistake to adopt this Clause.

    I do not propose to follow the legal arguments which have been used, because I am quite unable to do so. I should like to tell the Chancellor of the Exchequer the kind of reaction which his speech has produced on the minds of ordinary business men. During these debates I have stated that I am willing at all times to do anything I can to put down tax dodging, but, after listening to the speech of the Chancellor of the Exchequer on this Amendment, the position seems to me like two parish councillors squabbling as to where they should put down the next lamp-post in the street. In replying to this Amendment, the Chancellor of the Exchequer seemed to me to make the most thin and the weakest defence I have ever heard. [Interruption.] That was the reaction that it had on me, and I am justified in saying so, although the Chancellor of the Exchequer and the Attorney-General may laugh.

    It seems to me that in these Clauses the Chancellor of the Exchequer is trying to stop the holes whereby people may escape from certain legal provisions. I claim that we have helped him to do that, but, in view of his words just now, "We want to catch everyone," I would ask him—and this is why I referred to the thinness of his argument—to look at the bigger side of the collection of taxes from the people of this country. Every year £800,000,000 odd is collected—an outstanding example of the way in which the taxpayers have paid up fairly and well during these very burdensome years. I can tell the Chancellor of the Exchequer that, however much he tries to stop the holes, he will not succeed. His attempts will simply sharpen people's wits to try to find more holes. I am not sure whether the Clauses I have been looking at are in the Bill before or after amendment in Committee, but I can tell the right hon. Gentleman that people have already found a passage through Clauses 10, 12, 29 and 33 through which they can drive a coach and four, and it is futile—

    The right hon. Gentleman can come to me, but they will find more holes. It is futile to defend such a Clause. I would ask the Chancellor of the Exchequer, and it is a fair question to ask, how much does he hope to save by this particular piece of legislation? It is futile for him to go on trying to stop these holes when what happens is simply that more holes are made. I was very much impressed by the arguments of the hon. and gallant Member for North-East Bethnal Green (Major Nathan) and of the late Solicitor-General, and I feel that the Chancellor of the Exchequer and the Attorney-General, instead of laughing, should take more dignified notice of this serious matter.

    I am sorry that my right hon. Friend and myself, in laughing at our small jokes, annoyed the hon. Member, but I say frankly that I was struck by the remarkable antithesis between the impression which the debate gave him of a dispute between parish councillors as to where a lamp-post should be put and the impression produced upon him by the speech of the hon. and gallant Member for North-East Bethnal Green (Major Nathan), who seemed to think that Empires and thrones were rocking in the balance. It may be the one or the other, but it cannot be both. Equally, it is sad to think, after all the help which we have received from the hon. Member, and which I gratefully acknowledge, in regard to the drafting of our Clauses, that a coach and four can be so easily driven through them. This I do say, that most certainly a coach and four will be driven through the Clause if we accept this Amendment. I can imagine nothing worse than that this House should put its imprimatur upon the idea that, if anyone wants to get out of this Clause, all that he has to do is to have a foreign company. That is what we should do if we accepted this Amendment.

    In the first place, I do not think that the Amendment as drafted would be at all satisfactory. The condition under Clause 34 is that there is to be a debt due from the company concerned. The words of the Amendment are really words which qualify the type of company which has to owe the debt. They would exclude a company incorporated outside Great Britain and not carrying on business or owning property in Great Britain. It seems to me that, as a matter of construction and grammar—on which any Member is entitled to his opinion, as I am to mine—these words as drafted mean that, if a company is incorporated outside the United Kingdom and owns no property here, and the transferor dies, no debt arises. If thereafter that company does acquire property here, a debt would not suddenly arise so long as the property was held here, and such a company would never owe a debt at all, so that, consequently, we should not be able to deal with such a company, even although it owned and acquired a large block of War Loan, or what you will, since it would not be a company which owned property in Great Britain at the material time, that is to say, at the death of the transferor, which would bring it within the Clause.

    I hope the Attorney-General will forgive me for interrupting him, but I want to save him from wasting time. This is one of a number of Amendments of the same kind which have been put down, and I expressly stated that I was raising the whole question of principle here. I entirely agree that the words would come in much better in a slightly different form in another place, but I venture to say that the Attorney-General is merely wasting the time of the House if he is opposing this Amendment, which we are discussing as a matter of principle, on mere technical points as to whether the Amendment is properly worded here. What we want from him is an answer to the very specific questions which have been put by several Members on this side of the House, including my hon. and learned Friend the late Solicitor-General.

    I was trying to give an answer. The observation which was made by the hon. Member himself, if I remember rightly, was a challenge to me or my right hon. Friend. It was to the effect that, if this Amendment were accepted, we should be in as good a position as we could possibly hope to be in. At the moment I am concerned to show that that statement is wholly inaccurate with regard to a company which has obtained property acquired after the date of transfer. If we accepted this Amendment, we could not deal with such a company at all. It seems to me, as I have said, that the worst thing that we could possibly do would be to advertise, to all those who are minded to tax-dodge, that they had better employ a foreign company.

    If I am asked what remedy we have, and what chance of recovery we have against foreign companies, assuming that they never at any material time held any property here, I would answer thus: Those who have studied international law, and particularly the law as between this country and the Dominions, cannot fail to have had their attention attracted to a tendency which is developing very much, and of which, if necessary, I could give many illustrations—the recent Arbitration Bill, which is actually before the House at the present time, will serve as one—namely, the tendency of the Courts of one country to pay regard to the legislation of other countries. Although I say nothing about the state of affairs as it exists to-day, I do say that he would indeed be a bold man who would suppose that a state of affairs will go on for ever in which this country and the Dominions will do nothing to help

    Division No. 450.]

    AYES.

    [8.25 p.m.

    Acland-Troyte, Lieut. ColonelCulverwell, C. T. (Bristol, West)Little, Dr. E. Graham
    Albery, Irving JamesDalrymple-White, Lt.-Col. Sir GodfreyLlewellin, Major J. J.
    Allen, Sir J. Sandeman (Liverp'l., W.)Davies, Dr. VernonLymington, Viscount
    Allen, Lt.-Col. Sir William (Armagh)Davies, Maj. Geo. F. (Somerset, Yeovil)Macdonald, Capt. P. D. (I. of W.)
    Amery, Rt. Hon. Leopold C. M. S.Dixey, A. C.Maitland, A. (Kent, Faversham)
    Ashley, Lt.-Col. Rt. Hon. Wilfrid W.Dugdale, Capt. T. L.Makins, Brigadier-General E.
    Atholl, Duchess ofEden, Captain AnthonyMerriman, Sir F. Boyd
    Atkinson, C.Edmondson, Major A. J.Mitchell-Thomson, Rt. Hon. Sir W.
    Baldwin, Rt. Hon. Stanley (Bewdley)Erskine, Lord (Somerset, Weston-s-M.)Monsell, Eyres, Com. Rt. Hon. Sir B.
    Balfour, Captain H. H. (I. of Thanet)Everard, W. LindsayMorrison, W. S. (Glos., Cirencester)
    Betterton, Sir Henry B.Fermoy, LordMuirhead, A. J.
    Bevan, S. J. (Holborn)Fielden, E. B.Nathan, Major H. L.
    Birchall, Major Sir John DearmanFord, Sir P. J.Nicholson, O. (Westminster)
    Bird, Ernest RoyForestier-Walker, Sir L.O'Connor, T. J.
    Bourne, Captain Robert CroftGalbraith, J. F. W.O'Neill, Sir H.
    Bowyer, Captain Sir George E. W.Ganzoni, Sir JohnPownall, Sir Assheton
    Bracken, B.Gibson, C. G. (Pudsey & Otley)Ramsbotham, H.
    Braithwaite, Major A. N.Glyn, Major R. G. C.Rawson, Sir Cooper
    Brown, Col. D. C. (N'th'l'd., Hexham)Greene, W. P. CrawfordReid, David D. (County Down)
    Buckingham, Sir H.Grenfell, Edward C. (City of London)Richardson, Sir P. W. (Sur'y, Ch'ts'y)
    Burton, Colonel H. W.Gunston, Captain D. W.Roberts, Sir Samuel (Ecclesall)
    Butler, R. A.Hacking, Rt. Hon. Douglas H.Ross, Major Ronald D.
    Carver, Major W. H.Hammersley, S. S.Ruggles-Brise, Lieut.-Colonel E. A.
    Cautley, Sir Henry S.Haslam, Henry C.Samuel, A. M. (Surrey, Farnham)
    Cayzer, Maj. Sir Herbt. R. (Prtsmth, S.)Henderson, Capt. R. R. (Oxf'd, Henley)Sandeman, Sir N. Stewart
    Chadwick, Capt. Sir Robert BurtonHerbert, Sir Dennis (Hertford)Shepperson, Sir Ernest Whittome
    Chapman, Sir S.Howard-Bury, Colonel C. K.Sinclair, Col. T. (Queen's U., Belfst)
    Christie, J. A.Hunter-Weston, Lt.-Gen. Sir AylmerSmith, Louis W. (Sheffield, Hallam)
    Cobb, Sir CyrilHurd, Percy A.Smith-Carington, Neville W.
    Cockerill, Brig.-General Sir GeorgeJones, Sir G. W. H. (Stoke New'gton)Smithers, Waldron
    Cohen, Major J. BrunelKing, Commodore Rt. Hon. Henry D.Somerville, A. A. (Windsor)
    Croft, Brigadier-General Sir H.Lamb, Sir J. Q.Southby, Commander A. R. J.
    Crookshank, Capt. H. C.Leighton, Major B. E. P.Stanley, Maj. Hon. O. (W'morland)
    Croom-Johnson, R. P.Lewis, Oswald (Colchester)Sueter, Rear-Admiral M. F.

    each other in the matter of tax-dodging by setting up companies. The sooner that day comes, as far as I am concerned, the better. If I am told that our powers to-day are limited, I would say, more power to the Chancellor of the Exchequer's elbow, and may he in a few years' time have wider powers than he has to-day. I certainly should advise him that it would be fatal to do anything which would put a foreign company altogether outside the purview of this Measure.

    I would remind the Attorney-General that one of the established legal principles in this country is that our courts will not recognise or enforce the fiscal legislation of other countries, and, so far as I know, that principle obtains in every one of our Dominions and in every other civilised country in the world. Therefore, the prospect which the Attorney-General held out at the close of his speech, as to an agreement between this country and the Dominions, or between this country and other countries in Europe or elsewhere, is most remote, and one that can never be fulfilled.

    Question put, "That those words be there inserted in the Bill."

    The House divided: Ayes, 119; Noes, 255.

    Thomas, Major L. B. (King's Norton)Waterhouse, Captain CharlesWomersley, W. J.
    Thomson, Sir F.Wayland, Sir William A.Worthington-Evans, Rt. Hon. Sir L.
    Titchfield, Major the Marquess ofWells, Sydney R.Young, Rt. Hon. Sir Hilton
    Todd, Capt. A. J.Williams, Charles (Devon, Torquay)
    Tryon, Rt. Hon. George ClementWilson, G. H. A. (Cambridge U.)TELLERS FOR THE AYES.—
    Turton, Robert HughWindsor-Clive, Lieut.-Colonel GeorgeSir George Penny and Sir Victor
    Ward, Lieut.-Col. Sir A. LambertWithers, Sir John JamesWarrender.

    NOES.

    Adamson, Rt. Hon. W. (Fife, West)Groves, Thomas E.Middleton, G.
    Adamson, W. M. (Staff., Cannock)Grundy, Thomas W.Montague, Frederick
    Addison, Rt. Hon. Dr. ChristopherHall, F. (York, W. R., Normanton)Morgan, Dr. H. B.
    Aitchison, Rt. Hon. Cralgie M.Hall, G. H. (Merthyr Tydvil)Morley, Ralph
    Alexander, Rt. Hon. A. V. (Hillsbro')Hall, Capt. W. G. (Portsmouth, C.)Morris, Rhys Hopkins
    Ammon, Charles GeorgeHamilton, Mary Agnes (Blackburn)Morrison, Herbert (Hackney, South)
    Arnott, JohnHarris, Percy A.Morrison, Robert C. (Tottenham, N.)
    Aske, Sir RobertHartshorn, Rt. Hon. VernonMort, D. L.
    Attlee, Clement RichardHastings, Dr. SomervilleMoses, J. J. H.
    Baker, John (Wolverhampton, Bilston)Haycock, A. W.Mosley, Sir Oswald (Smethwick)
    Barr, JamesHayday, ArthurMuff, G.
    Batey, JosephHayes, John HenryMuggeridge, H. T.
    Benn, Rt. Hon. WedgwoodHenderson, Arthur, Junr. (Cardiff, S.)Murnin, Hugh
    Bennett, Capt. Sir E. N. (Cardiff C.)Henderson, Thomas (Glasgow)Naylor, T. E.
    Benson, G.Henderson, W. W. (Middx., Enfield)Newman, Sir R. H. S. D. L. (Exeter)
    Bentham, Dr. EthelHerriotts, J.Noel Baker, P. J.
    Birkett, W. NormanHirst, G. H. (York W. R. Wentworth)Noel-Buxton, Baroness (Norfolk, N.)
    Blindell, JamesHirst, W. (Bradford, South)Oldfield, J. R.
    Bondfield, Rt. Hon. MargaretHoffman, P. C.Oliver, George Harold (Ilkeston)
    Bowen, J. W.Hollins, A.Oliver, P. M. (Man., Blackley)
    Bowerman, Rt. Hon. Charles W.Hopkin, DanielPalin, John Henry
    Broad, Francis AlfredHore-Belisha, Leslie.Paling, Wilfrid
    Bromfield, WilliamHorrabin, J. F.Palmer, E. T.
    Bromley, J.Hudson, James H. (Huddersfield)Parkinson, John Allen (Wigan)
    Brooke, W.Hunter, Dr. JosephPerry, S. F.
    Brothers, M.Isaacs, GeorgePeters, Dr. Sidney John
    Brown, C. W. E. (Notts, Mansfield)Jenkins, W. (Glamorgan, Neath)Pethick-Lawrence, F. W.
    Brown, Ernest (Leith)John, William (Rhondda, West)Phillips, Dr. Marion
    Brown, Rt. Hon. J. (South Ayrshire)Johnston, ThomasPotts, John S.
    Brown, W. J. (Wolverhampton, West)Jones, Rt. Hon. Leif (Camborne)Price, M. P.
    Buchanan, G.Jones, Morgan (Caerphilly)Quibell, D. F. K.
    Burgess, F. G.Jowett, Rt. Hon. F. W.Ramsay, T. B. Wilson
    Buxton, C. R. (Yorks, W. R. Elland)Jowitt, Sir W. A. (Preston)Raynes, W. R.
    Caine, Derwent Hall-Kedward, R. M. (Kent, Ashford)Richards, R.
    Cameron, A. G.Kelly, W. T.Richardson, R. (Houghton-le-Spring)
    Carter, W. (St. Pancras, S. W.)Kennedy, ThomasRiley, F. F. (Stockton-on-Tees)
    Charleton, H. C.Kinley, J.Ritson, J.
    Clarke, J. S.Kirkwood, D.Roberts, Rt. Hon. F. O. (W. Bromwich)
    Cluse, W. S.Lang, GordonRomeril, H. G.
    Clynes, Rt. Hon. John R.Lathan, G.Rosbotham, D. S. T.
    Cocks, Frederick SeymourLaw, Albert (Bolton)Rowson, Guy
    Cove, William G.Law, A. (Rosendale)Salter, Dr. Alfred
    Cowan, D. M.Lawrence, SusanSanders, W. S.
    Daggar, GeorgeLawrie, Hugh Hartley (Stalybridge)Sawyer, G. F.
    Dallas, GeorgeLawther, W. (Barnard Castle)Scrymgeour, E.
    Davies, E. C. (Montgomery)Leach, W.Scurr, John
    Davies, Rhys John (Westhoughton)Lee, Frank (Derby, N. E.)Sexton, James
    Day, HarryLee, Jennie (Lanark, Northern)Shaw, Rt. Hon. Thomas (Preston)
    Denman, Hon. R. D.Lees, J.Shepherd, Arthur Lewis
    Dukes, C.Lewis, T. (Southampton)Sherwood, G. H.
    Duncan, CharlesLloyd, C. EllisShield, George William
    Ede, James ChuterLogan, David GilbertShillaker, J. F.
    Edge, Sir WilliamLongbottom, A. W.Shinwell, E.
    Edmunds, J. E.Longden, F.Short, Alfred (Wednesbury)
    Edwards, C. (Monmouth, Bedwellty)Lovat-Fraser, J. A.Simmons, C. J.
    Edwards, E. (Morpeth)Lowth, ThomasSinkinson, George
    Egan, W. H.Lunn, WilliamSitch, Charles H.
    Elmley, ViscountMacdonald, Gordon (Ince)Smith, Ben (Bermondsey, Rotherhithe)
    Forgan, Dr. RobertMacDonald, Rt. Hon. J. R. (Seaham)Smith, Frank (Nuneaton)
    Freeman, PeterMacDonald, Malcolm (Bassetlaw)Smith, H. B. Lees (Keighley)
    Gardner, B. W. (West Ham, Upton)McElwee, A.Smith, Tom (Pontefract)
    George, Major G. Lloyd (Pembroke)McEntee, V. L.Smith, W. R. (Norwich)
    Gibson, H. M. (Lancs, Mossley)McGovern, J. (Glasgow, Shettleston)Snell, Harry
    Gill, T. H.McKinlay, A.Snowden, Rt. Hon. Philip
    Gillett, George M.McShane, John JamesSnowden, Thomas (Accrington)
    Glassey, A. E.Mansfield, W.Sorensen, R.
    Gossling, A. G.March, S.Stamford, Thomas W.
    Gould, F.Marcus, M.Stephen, Campbell
    Graham, D. M. (Lanark, Hamilton)Markham, S. F.Stewart, J. (St. Rollox)
    Graham, Rt. Hon. Wm. (Edin., Cent.)Marley, J.Sullivan, J.
    Gray, MilnerMarshall, FredSutton, J. E.
    Greenwood, Rt. Hon. A. (Colne)Mathers, GeorgeTaylor, R. A. (Lincoln)
    Grenfell, D. R. (Glamorgan)Matters, L. W.Taylor, W. B. (Norfolk, S. W.)
    Griffith, F. Kingsley (Middlesbro' W.)Melville, Sir JamesThomas, Rt. Hon. J. H. (Derby)
    Griffiths, T. (Monmouth, Pontypool)Messer, FredThorne, W. (West Ham, Plaistow)

    Thurtle, ErnestWatson, W. M. (Dunfermline).Williams, Dr. J. H. (Llanelly)
    Tinker, John JosephWedgwood, Rt. Hon. JosiahWilliams, T. (York, Don Valley)
    Townend, A. E.Wellock, WilfredWilson, C. H. (Sheffield, Attercliffe)
    Trevelyan, Rt. Hon. Sir CharlesWelsh, James (Paisley)Wilson, J. (Oldham)
    Vaughan, D. J.Welsh, James C. (Coatbridge)Wilson, R. J. (Jarrow)
    Viant, S. P.West, F. R.Winterton, G. E. (Leicester, Loughb'gh)
    Walkden, A. G.Westwood, JosephWright, W. (Rutherglen)
    Walker, J.White, H. G.Young, R. S. (Islington, North)
    Wallace, H. W.Whiteley, Wilfrid (Birm., Ladywood)
    Wallhead, Richard C.Wilkinson, Ellen C.TELLERS FOR THE NOES.—
    Watkins, F. C.Williams, David (Swansea, East)Mr. A. Barnes and Mr. William
    Whiteley.

    Amendments made: In page 32, line 26, leave out the word "of" and insert instead thereof, the words "not exceeding."

    In line 35, after the word "may," insert the word "reasonably."—[ Mr. P. Snowden.]

    Clause 35—(Valuation Of Shares In Private Companies)

    Amendment made: In page 33, line 19, leave out the word "proportional," and insert instead thereof the words "computed by reference."—[ Mr. P. Snowden.]

    I beg to move, in page 33, line 26, after the word "be," to insert the words:

    "the fair intrinsic value to the deceased at the date of death."
    It may be convenient to allow this Amendment to be discussed together with the next Amendment, to insert, at the end of the following line the words:
    "and all other, if any, relevant considerations."
    The two read entirely as one. The Chancellor of the Exchequer and the learned Attorney-General will remember that we had a very long discussion on the points raised by this Amendment on the Committee stage. I am afraid that in the Committee stage occasionally we were not all of us so good-tempered as we have generally been throughout the Report stage, and I am inclined to think that the discussion on this particular point was, perhaps, rather spoilt by heated arguments during the latter part of it. I believe that the Chancellor of the Exchequer and the learned Attorney-General really came to the conclusion that there was some point here which ought to be dealt with and met in some way.

    The learned Attorney-General will remember that I pointed out, as an example of the hardship which might happen under this Clause, the case of an employé of a company who was given shares in a company paying a very large dividend and which, on their intrinsic value, were worth £4 or £5 a share, which his representatives upon his death were bound to dispose of to nominees of the company, a benevolent fund of the company, or something of the kind, at their par value of 20s. Under this Clause, as it stands, that fact could not be taken into consideration. The shares will have to be valued by reference to the value of the total assets of the company, and that particular consideration—a remarkably relative consideration—would not be considered or taken into account at all. If the words in these Amendments are inserted, the Revenue will not lose duty in cases where they fairly ought to get it, and they will be protecting the subject against the chance of a very serious miscarriage of justice. I do not want to say more about the matter, as I have no doubt that the learned Attorney-General remembers what took place on the Committee stage.

    Looking at this Amendment, I am bound to say that I really fail to understand what the effect of it would be. Is it intended—if I may ask the hon. Member for Watford (Sir D. Herbert)—that the value to the deceased has to be assessed at the moment before death or at the moment after death? May I point out what a very great difference it might well make? One of the illustrations which we had given to us was the fact that sometimes shares are granted to a person and the understanding of the arrangement under the Articles is, that as long as that person is alive, the particular share shall be a management share which controls the company. On the death of that person, that share loses its peculiar privileges and sinks down to the level of an ordinary share. Supposing you are to value that share to the deceased at the date of death, all sorts of complications will arise. Valuing it at present, you would undoubtedly have the value as an ordi- nary share only. Under the Amendment of the hon. Member it would be at best very questionable whether you would not have to value it on the assumption that it still had attached to it the right of control. It might impose very great hardship.

    We see no reason to depart from the words we have adopted. We think that the words are better than those of the Amendment. We think, if I may say so, that the words which the hon. Member has inserted in his Amendment are of exceedingly doubtful meaning. Those who are very frequently advising me in these matters have no clear idea as to what may be the effect of it. Although the hon. Member may have some view of what the words mean—he will forgive my saying so—it does not settle the matter. These words are exceedingly ambiguous, and may work very hardly upon the taxpayer. In the circumstances, the Chancellor of the Exchequer cannot possibly see his way to accept these words.

    Amendment negatived.

    I beg to move, in page 33, line 27, at the end to insert the words, "and all other, if any, relevant considerations."

    I said that I would not discuss this Amendment at any length, as I have already referred to it.

    I called upon the hon. Member to move his Amendment in line 35.

    I understood you were going to allow me formally to move the second Amendment which is on line 27.

    I understood Mr. Speaker to say that one Amendment was covered by the other.

    I beg to move, in page 33, line 35, after the word "controls," to insert the words:

    "by ownership in his own name or in the name of a nominee."
    I am rather afraid we shall have the same experience if the learned Attorney-General replies on this Amendment as we had on the last two Amendments, namely, that he will not attempt to answer the serious arguments which we have put forward in favour of the principle of these Amendments. He endeavours to slide off on side issues of no importance, and leaves the real principle at stake absolutely unanswered. I invite him on this Amendment to pursue a different course, and to say something, if he can do so, in answer to the arguments I shall adduce in favour of the principle of this Amendment. I would ask him, instead of sliding off by ridiculing the wording of this Amendment, to give us his opinion on the principle involved, and if he thinks that these words are unsatisfactory, to suggest some revision of words which will meet the point. There is some need for an Amendment of some sort here, and I found my argument upon the actual wording of the Clause in question. It is, apparently, thoght necessary to define what is meant by the "control of a company." The Clause, therefore, says that:
    "For the purposes of this section the control of a company shall be deemed to be in the hands of a person if—
    (a) by virtue of the shares which he controls."
    Now what is the meaning of the word "controls"? I want it to be defined here. We know what the word "owns" means, but the word "controls," unless it is defined in some way or other, may mean all sorts of things. The Attorney-General may have control over my property because of my great love for him and my anxiety to meet his wish to do what he chooses with my property. That would be one form of control. There are other very different forms of control. A man may control shares by virtue of his eloquence at a company meeting, where he turns the votes of the shareholders. That, surely, is not the kind of control that is meant. I would ask the Attorney-General to tell us when he means control of shares whether he means control in any other way than by ownership in the man's own name or in the name of a nominee. If he does mean any other sort of control, I ask that he should add it to the suggested words, in order that we may have a Clause which can be understood. I feel certain that any Judge of the Chancery Division would grumble very much at being asked to say what was the meaning in an Act of Parliament of a man controlling shares, if he was given no sort of indica- tion as to what kind of control was meant. I hope, therefore, that on this occasion our very amateurish attempts at making some improvement in the draft may be met in a kindly spirit by the Attorney-General, and I would ask him to try to improve the wording of the Bill in this particular respect.

    I beg to second the Amendment.

    It seems to me that the Amendment which has been very carefully thought out, would add a little clarity to the Bill. I do not wish to say anything about the way in which the Attorney-General discussed the other Amendment. I realise that he is in great danger of being affected, from the position in which he sits. I know of no other way in which you can control a company except by the ownership of definite shares in the company, or by having the shares in the name of a nominee. I know of no other way in which you can definitely control a company in such a way that the control may be taxable. That is what we are dealing with. It is no good saying that a man can control a company by his eloquence. You cannot tax eloquence. There is no tax on eloquence, fortunately for some of us in this House. I have taken very little part in the debate in connection with company matters, and I am not sure that my feelings are always as expressed on this side of the House; but I do say that, so far as this matter is concerned, we have put down a reasonable Amendment, which defines clearly what are the forms of control which are meant and which do lead to something which can be taxed. For that reason I think that, in the interests of clarity in the Bill, and particularly after the able exposition that we have had of the Amendment, the Government would be well advised to accept the Amendment. I can conceive no reason why the Amendment should not be accepted. Not only would it give clarity to the Bill, but it would be likely to save in the immediate future a vast number of disputes and a great deal of work in the Law Courts.

    I am sorry that on the last two Amendments I completely failed to satisfy the hon. Member for Watford (Sir D. Herbert), or to answer the questions which he put to me. It may be that he is acting under the impression that any question which he asks is unanswerable. Lest that should be so, I would like to advise him to take note of the advice that the hon. Member for Leith (Mr. E. Brown) gave to him that he should cultivate a sense of humour.

    When my sense of humour led me to laugh, a few minutes ago, the Attorney-General protested most unhumorously.

    The hon. Member proposed an Amendment, and the speech which he made is a typical example of the difficulty which anybody has in answering him. He put down an Amendment, which the hon. Member for Torquay (Mr. C. Williams) tells us is a very carefully thought out Amendment, with a perfectly clear legal effect, as he will realise it if he looks at the Amendment, and he then made a speech which bore no relation whatever to the Amendment or to the effect which the Amendment would have. We all know, all of us except the hon. Member for Torquay, that one of the commonest ways—from my experience it is the commonest way—in which control is now exercised is not by the ownership of shares, either in your own name or in the name of a nominee, but by entering into contracts with people who own shares, that those people shall vote in a particular way. It is very common in the City to find a group of people, each of whom owns beneficially a large block of shares, entering into contracts together to follow the method of voting of some particular member. That is a very common way in which a particular member can get control—a control which does not depend upon ownership of shares, but depends upon the fact that he has contracts with other people who own shares. Our Clause in seeking to deal with control says:

    "by virtue of the shares which he controls he has control of more than half the voting power of the company."
    The hon. Member for Watford desires to qualify that by the insertion of the words:
    "which he controls by ownership in his own, name or in the name of a nominee."
    That is to say, he wants to limit it to one particular class of control, the control that springs from ownership, and for some reason he wants to leave out the more common class of control, the control that springs from contracts with other people. That is the Amendment, or the effect of the Amendment, which the hon. Member moved, but the speech which he made borne no relation whatever to that Amendment and did not indicate the kind of control that we are dealing with here. He desires control limited to control by ownership, and that we should not have regard to the control which springs from contracts. My right hon. Friend would not be willing to limit control to control springing from ownership. It seems to him and to me that it matters not one whit from what source the control comes, so long as you have the control there.

    The hon. Member for Watford wants me to define control. I cannot define control. Many ideas may materialise, without one being able to define them. The hon. Member cannot define a heap of sand, but he knows it when he sees it. The hon. Member for Torquay exploded one of the hon. Member's theories, that control comes from eloquence. The

    Division No. 451.]

    AYES.

    [8.56 p.m.

    Acland-Troyte, Lieut.-ColonelEden, Captain AnthonyO'Connor, T. J.
    Albery, Irving JamesEdmondson, Major A. J.O'Neill, Sir H.
    Allen, Sir J. Sandeman (Liverp'l., W.)Erskine, Lord (Somerset, Weston-s-M.)Peto, Sir Basil E. (Devon, Barnstaple)
    Allen, Lt.-Col. Sir William (Armagh)Everard, W. LindsayPownall, Sir Assheton
    Amery, Rt. Hon. Leopold C. M. S.Falle, Sir Bertram G.Ramsbotham, H.
    Ashley Lt.-Col. Rt. Hon. Wilfrid W.Ferguson, Sir JohnRawson, Sir Cooper
    Atholl, Duchess ofFermoy, LordReid, David D. (County Down)
    Atkinson, C.Fielden, E. B.Richardson, Sir P. W. (Sur'y, Ch'te'y)
    Baldwin, Rt. Hon. Stanley (Bewdley)Ford, Sir P. J.Roberts, Sir Samuel (Ecclesall)
    Balfour, Captain H. H. (I. of Thanet)Forestier-Walker, Sir L.Ross, Major Ronald D.
    Balniel, LordGalbraith, J. F. W.Ruggles-Brise, Lieut.-Colonel E. A.
    Betterton, Sir Henry B.Ganzoni, Sir JohnSamuel, A. M. (Surrey, Farnham)
    Bevan, S. J. (Holborn)Gibson, C. G. (Pudsey & Otley)Sandeman, Sir N. Stewart
    Birchall, Major Sir John DearmanGlyn, Major R. G. C.Shepperson, Sir Ernest Whittome
    Bird, Ernest RoyGreene, W. P. CrawfordSinclair, Col. T. (Queen's U., Belfst)
    Bourne, Captain Robert CroftGrenfell, Edward C. (City of London)Smith, Louis W. (Sheffield, Hallam)
    Bowyer, Captain Sir George E. W.Gunston, Captain D. W.Smith-Carington, Neville W.
    Bracken, B.Hacking, Rt. Hon. Douglas H.Smithers, Waldron
    Braithwaite, Major A. N.Hammersley, S. S.Somerville, A. A. (Windsor)
    Brown, Col. D. C. (N'th'l'd., Hexham)Haslam, Henry C.Southby, Commander A. R. J.
    Brown, Brig.-Gen. H. C. (Berks, Newb'y)Henderson, Capt. R. R. (Oxf'd, Henley)Stanley, Maj. Hon. O. (W'morland)
    Buckingham, Sir H.Herbert, Sir Dennis (Hertford)Sueter, Rear-Admiral M. F.
    Burton, Colonel H. W.Howard-Bury, Colonel C. K.Thomas, Major L. B. (King's Norton)
    Butler, R. A.Hunter-Weston, Lt.-Gen. Sir AylmerThomson, Sir F.
    Carver, Major W. H.Hurd, Percy A.Titchfield, Major the Marquess of
    Cautley, Sir Henry S.Iveagh, Countess ofTodd, Capt. A. J.
    Cayzer, Maj. Sir Herbt. R. (Prtsmth, S.)Jones, Sir G. W. H. (Stoke New'gton)Tryon, Rt. Hon. George Clement.
    Chadwick, Capt. Sir Robert BurtonKing, Commodore Rt. Hon. Henry D.Turton, Robert Hugh
    Chapman, Sir S.Lamb, Sir J. Q.Ward, Lieut.-Col. Sir A. Lambert
    Christie, J. A.Leighton, Major B. E. P.Waterhouse, Captain Charles
    Cobb, Sir CyrilLewis, Oswald (Colchester)Wayland, Sir William A.
    Croft, Brigadier-General Sir H.Llewellin, Major J. J.Wells, Sydney R.
    Crookshank, Capt. H. C.Lymington, ViscountWilliams, Charles (Devon, Torquay)
    Croom-Johnson, R. P.Macdonald, Capt. P. D. (I. of W.)Wilson, G. H. A. (Cambridge U.)
    Culverwell, C. T. (Bristol, West)Maitland, A. (Kent, Faversham)Windsor-Clive, Lieut.-Colonel George
    Dalrymple-White, Lt.-Col. Sir GodfreyMakins, Brigadier-General E.Withers, Sir John James
    Davies, Dr. VernonMerriman, Sir F. BoydWomersley, W. J.
    Davies, Maj. Geo. F. (Somerset, Yeovil)Monsell, Eyres, Com. Rt. Hon. Sir B.Young, Rt. Hon. Sir Hilton
    Dixey, A. C.Morden, Col. W. Grant
    Duckworth, G. A. V.Morrison, W. S. (Glos., Cirencester)TELLERS FOR THE AYES.—
    Dugdale, Capt. T. L.Muirhead, A. J.Sir George Penny and Sir Victor
    Warrender.

    type of control is the control which this Clause acknowledges, the control of voting power, and so long as you have that control, whether by ownership, whether by contract or whether you hold your shares in your own name or in the name of a nominee, so long as you have the power to direct the policy of the company by means of votes, that is control, without attempting further to limit the definition. The word which is used in the Clause is not a new one. It is not being used for the first time in an Act of Parliament. It was used by a previous Chancellor of the Exchequer in an Act of Parliament and there has been no criticism of it, so far as I know, and I cannot see why we cannot use the word in that sense. I do not think that any Judge will have any difficulty in coming to a conclusion on the question of fact as to whether a man did or did not control the company.

    Question put, "That those words be there inserted in the Bill."

    The House divided: Ayes, 120; Noes, 258.

    NOES.

    Adamson, Rt. Hon. W. (Fife, West)Haycock, A. W.Noel Baker, P. J.
    Adamson, W. M. (Staff., Cannock)Hayday, ArthurNoel-Buxton, Baroness (Norfolk, N.)
    Addison, Rt. Han. Dr. ChristopherHayes, John HenryOldfield, J. R.
    Aitchison, Rt. Hon. Craigie M.Henderson, Arthur, Junr. (Cardiff, S.)Oliver, George Harold (Ilkeston)
    Alexander, Rt. Hon. A. V. (Hillsbro')Henderson, Thomas (Glasgow)Oliver, P. M. (Man., Blackley)
    Ammon, Charles GeorgeHenderson, W. W. (Middx., Enfield)Palin, John Henry
    Arnott, JohnHerriotts, J.Palmer, E. T.
    Aske, Sir RobertHirst, G. H. (York W. H. Wentworth)Parkinson, John Allen (Wigan)
    Attlee, Clement RichardHirst, W. (Bradford, South)Perry, S. F.
    Baker, John (Wolverhampton, Bilston)Hoffman, P. C.Peters, Dr. Sidney John
    Barr, JamesHollins, A.Pethick-Lawrence, F. W.
    Batey, JosephHopkin, DanielPhillips, Dr. Marion
    Benn, Rt. Hon. WedgwoodHore-Belisha, LesliePotts, John S.
    Bennett, Capt. Sir E. N. (Cardiff C.)Horrabin, J. F.Price, M. P.
    Benson, G.Hudson, James H. (Huddersfield)Quibell, D. F. K.
    Bentham, Dr. EthelHunter, Dr. JosephRamsay, T. B. Wilson
    Birkett, W. NormanIsaacs, GeorgeRaynes, W. R.
    Blindell, JamesJenkins, W. (Glamorgan, Neath)Richards, R.
    Bondfield, Rt. Hon. MargaretJohn, William (Rhondda, West)Richardson, R. (Houghton-le-Spring)
    Bowen, J. W.Johnston, ThomasRiley, F. F. (Stockton-on-Tees)
    Bowerman, Rt. Hon. Charles W.Jones, Rt. Hon. Leif (Camborne)Ritson, J.
    Broad, Francis AlfredJones, Morgan (Caerphilly)Roberts, Rt. Hon. F. O. (W. Bromwich)
    Bromfield, WilliamJowett, Rt. Hon. F. W.Romeril, H. G.
    Bromley, J.Jowitt, Sir W. A. (Preston)Rosbotham, D. S. T.
    Brooke, W.Kedward, R. M. (Kent, Ashford)Rowson, Guy
    Brothers,. M.Kelly, W. T.Salter, Dr. Alfred
    Brown, C. W. E. (Notts. Mansfield)Kennedy, ThomasSanders, W. S.
    Brown, Ernest (Leith)Kinley, J.Sawyer, G. F.
    Brown, Rt. Hon. J. (South Ayrshire)Kirkwood, D.Scrymgeour, E.
    Brown, W. J. (Wolverhampton, West)Lang, GordonScurr, John
    Buchanan, G.Lathan, G.Sexton, James
    Burgess, F. G.Law, Albert (Bolton)Shaw, Rt. Hon. Thomas (Preston)
    Buxton, C. R. (York. W. R. Elland)Law, A. (Rosendale)Shepherd, Arthur Lewis
    Caine, Derwent Hall-Lawrence, SusanSherwood, G. H.
    Cameron, A. G.Lawrie, Hugh Hartley (Stalybridge)Shield, George William
    Carter, W. (St. Pancras, S. W.)Lawther, W. (Barnard Castle)Shillaker, J. F.
    Charleton, H. C.Leach, W.Shinwell, E.
    Clarke, J. S.Lee, Frank (Derby, N. E.)Short, Alfred (Wednesbury)
    Cluse, W. S.Lee, Jennie (Lanark, Northern)Simmons, C. J.
    Clynes, Rt. Hon. John R.Lees, J.Sinkinson, George
    Cocks, Frederick SeymourLewis, T. (Southampton)Sitch, Charles H.
    Cove, William G.Lloyd, C. EllisSmith, Ben (Bermondsey, Rotherhithe)
    Cowan, D. M.Logan, David GilbertSmith, Frank (Nuneaton)
    Daggar, GeorgeLongbottom, A. W.Smith, H. B. Lees- (Keighley)
    Dallas, GeorgeLongden, F.Smith, Tom (Pontefract)
    Davies, E. C. (Montgomery)Lovat-Fraser, J. A.Smith, W. R. (Norwich)
    Davies, Rhys John (Westhoughton)Lowth, ThomasSnell, Harry
    Day, HarryLunn, WilliamSnowden, Rt. Hon. Philip
    Denman, Hon. R. D.Macdonald, Gordon (Ince)Snowden, Thomas (Accrington)
    Dukes, C.MacDonald, Rt. Hon. J. R. (Seaham)Sorensen, R.
    Duncan, CharlesMacDonald, Malcolm (Bassetlaw)Stamford, Thomas W.
    Ede, James ChuterMcElwee, A.Stephen, Campbell
    Edge, Sir WilliamMcEntee, V. L.Stewart, J. (St. Rollox)
    Edmunds, J. E.McGovern, J. (Glasgow, Shettleston)Strachey, E. J. St. Loe
    Edwards, C. (Monmouth, Bedwellty)McKinlay, A.Sullivan, J.
    Edwards, E. (Morpeth)MacLaren, AndrewSutton, J. E.
    Egan, W. H.McShane, John JamesTaylor, R. A. (Lincoln)
    Elmley, ViscountMansfield, W.Taylor, W. B. (Norfolk. S. W.)
    Forgan, Dr. RobertMarch, S.Thomas, Rt. Hon. J. H. (Derby)
    Gardner, B. W. (West Ham, Upton)Marcus, M.Thorne, W. (West Ham, Plaistow)
    George, Major G. Lloyd (Pembroke)Markham, S. F.Thurtle, Ernest
    Gibson, H. M. (Lancs, Mossley)Marley, J.Tinker, John Joseph
    Gill, T. H.Marshall, FredTout, W. J.
    Gillett, George M.Mathers, GeorgeTownend, A. E.
    Glassey, A. E.Matters, L. W.Trevelyan, Rt. Hon. Sir Charles
    Gossling, A. G.Melville, Sir JamesVaughan, D. J.
    Gould, F.Messer, FredViant, S. P.
    Graham, D. M. (Lanark, Hamilton)Middleton, G.Walkden, A. G.
    Graham, Rt. Hon. Wm. (Edin., Cent.)Montague, FrederickWalker, J.
    Gray, MilnerMorgan, Dr. H. B.Wallace, H. W.
    Greenwood, Rt. Hon. A. (Colne).Morley, RalphWallhead, Richard C.
    Grenfell, D. R. (Glamorgan)Morris, Rhys HopkinsWatkins, F. C.
    Griffith, F. Kingsley (Middlesbro' W.)Morrison, Herbert (Hackney, South)Watson, W. M. (Dunfermline).
    Griffiths, T. (Monmouth, Pontypool)Morrison, Robert C. (Tottenham, N.)Wedgwood, Rt. Hon. Josiah
    Groves, Thomas E.Mort, D. L.Wellock, Wilfred
    Gundy, Thomas W.Moses, J. J. H.Welsh, James (Paisley)
    Hall, F. (York. W. R., Normanton)Mosley, Sir Oswald (Smethwick)Welsh, James C. (Coalbridge)
    Hall, G. H. (Merthyr Tydvil)Muff, G.West, F. R.
    Hall, Capt. W. G. (Portsmouth, C.)Muggeridge, H. T.Westwood, Joseph
    Hamilton, Mary Agnes (Blackburn)Murnin, HughWhite, H. G.
    Harris, Percy A.Nathan, Major H. L.Whiteley, Wilfrid (Birm., Ladywood)
    Hartshorn, Rt. Hon. VernonNaylor, T. E.Whiteley, William (Blaydon)
    Hastings, Dr. SomervilleNewman, Sir R. H. S. D. L. (Exeter)Wilkinson, Ellen C.

    Williams, David (Swansea, East)Wilson, J. (Oldham)Young, R. S. (Islington, North)
    Williams, Dr. J. H. (Llaneily)Wilson, R. J. (Jarrow)
    Williams, T. (York, Don Valley)Winterton, G. E. (Leicester, Loughb'gh)TELLERS FOR THE NOES.—
    Wilson, C. H. (Sheffield, Attercliffe)Wright, W. (Rutherglen)Mr. A. Barnes and Mr. Paling.

    Clause 36—(Interpretation)

    I beg to move, in page 34, line 14, to leave out the words "the foregoing provisions of."

    I have had an intimation that the Chancellor of the Exchequer views this Amendment not unfavourably, and therefore I move it formally.

    Amendment agreed to.

    Further Amendments made: In page 34, line 22, after the word "public," insert the words:

    "or, in the case of a company which is about to make an issue of shares to the public, will not, when it has made that issue, have issued to the public."

    In page 35, line 3, at the end, insert the words:

    "(iii) such sum as on a just and fair computation represents any future or contingent liabilities of the company or any liabilities thereof which are uncertain in amount."—[Mr. P. Snowden.]

    Clause 37—(Death Duties On Property Subject To An Annuity Which Has Been Surrendered)

    Amendments made: In page 35, line 27, after the word "or," insert the words "other periodical."

    After the word "payment," insert the words:

    "limited to cease on his death, being an annuity or payment, which was."—[Mr. P. Snowden.]

    Clause 42—(Exemption From Stamp Duty On Receipts)

    Amendment made: In page 37, line 32, leave out the word "exemption," and insert instead thereof the word "exemptions."—[ Mr. P. Snowden.]

    Clause 45—(Temporary Additions To New Sinking Fund)

    I beg to move to leave out the Clause.

    It will be within the memory of the House that this is a Clause which provides for the making good, of a deficit of £14,500,000 in last year's accounts by additional Sinking Fund payments of £5,000,000 this year, £5,000,000 next year and £4,500,000 in the year to follow. I move formally to omit this Clause in order to give Pharaoh one last chance to soften his heart on this matter, which is if so much vital interest to the trade and industry of the country in its present condition. I think the Chancellor of the Exchequer will agree that the matter was not fully discussed in Committee owing to the lateness of the hour, and that it is one of the biggest issues, on the merits, which has to be decided in the Finance Bill. It will, therefore, not be thought inappropriate to devote a few minutes to the subject on Report. It is a momentous issue. Let me make it quite clear that, speaking from these benches, we are not in any way attacking the strength of the arrangements made to maintain the Sinking Fund, or the sanctity of those arrangements. On the contrary, we are ardent champions of the maintenance of a regular scheme of Sinking Fund payments.

    What we are attacking upon this occasion is not the maintenance of the regular scheme of the Sinking Fund, but its exceptional increase. In this issue there is involved no less than the big general question of policy as between the paying off of debt and the reduction of taxation. The first proposition which I would like to assert, on behalf of those who sit on these benches, is this: In the current year the financial requirement of the country is not an exceptional effort to reduce debt, but it is an exceptional effort to reduce taxation. It is our contention that what the nation has done in the way of reduction of debt, under the programme laid down by my right hon. Friend the Member for Bewdley (Mr. S. Baldwin), is adequate, and mere than adequate. It is enough to maintain the credit of this country in the highest degree: but in the circumstances in which we find ourselves this year, caught in the vortex of a storm of world depression, with every source of revenue affected and with all the trade and industry and commerce of the country crying out for relief in order to enable them to meet their foreign competitors, it is little short of irresponsibility to make an exceptional provision for increasing the reduction of debt.

    But I must remind myself that the Chancellor of the Exchequer has supported this particular action by a remarkable argument. On the occasion on which this Clause came up for consideration in Committee he explained the reason why he had made the proposals. They were on the following ground:
    "When you borrow to make up a deficit you are drawing money out of the market and away from industrial purposes. When you pay off debt you pay back money into the industrial market. In the application of this particular proposal the £5,000,000 which will be appropriated for the reduction of the £14,500,000 deficit will go back into the industrial market, and will therefore be available for the extension of induetry."—[OFFICIAL REPORT, 25th June, 1930; col. 1286, Vol. 240.]
    A remarkable passage, deserving almost to become a classic in the text book of fallacies. I do not think that either branch of the proposition could be repeated otherwise than more truly in the opposite sense, and particularly the latter one—the astonishing proposition that you are benefiting industry by taxing it in order to pay off debt. If you are doing so, why stop this refreshing process at £5,000,000? Why not carry it further and increase your provision to £50,000,000? But, indeed, the Chancellor of the Exchequer is not always the victim of this particular form of fallacy. When he was meeting our argument against increasing the Sinking Fund he told us that it must be done in order to put more resources at the disposal of industry but the other day when we were meeting him on another issue—the issue of leaving more resources at the disposal of industry by reducing taxation on the reserves of companies—he told us that ours was a nugatory and a futile proposal because the resources at the disposal of industry were ample in any event.

    Which way is the right hon. Gentleman going to have it? Is he going to maintain the argument which he used on the occasion of the Sinking Fund debate, or is he going to maintain the argument which he used in connection with the taxation of reserves? I am sure that the right hon. Gentleman's passionate attachment to dogma is too great to induce him to try to maintain both. But the issue is wider than that. The issue can be extended to cover another and a most im- portent question of policy in connection with the Sinking Fund. What is the good of continuing to pay off debt when, at the same time, you are compelled to borrow? If there is one policy of wisdom, which has been retained in the traditions of public finance, it is that it is wasteful and deceptive to embark upon an illusory sinking fund policy and to pretend to be paying off debt when, at the same time, you are borrowing against the amount which you are paying off. We had the Government of the day coming down to the House last week with a proposal to increase the demands which will have to be made in future in the way of borrowing capital in respect of the provision for the Unemployment Insurance Fund. Next week we shall be considering the Public Works Loans Bill, the provisions of which will increase future borrowing, I imagine, by £30,000,000 for housing and purposes of the sort. All the time, owing to a misconception which one does not readily detect or drag into the light of day, in connection with the Sinking Fund policy of the country, debt is being increased and then, in his illogical devotion to a Sinking Fund policy, out of which the bottom has been knocked by the facts, the Chancellor of the Exchequer gratuitously insists on imposing this additional burden of £5,000,000 of taxation on the country. That is only possible to an academic financier. It would be impossible or it should be impossible to anyone responsible for the public finances who has his eyes fixed on the realities of the situation.

    To do the Chancellor of the Exchequer justice, I do not think he was giving us the true account of his own activities in the debate to which I have referred. I think he gave then a wholly fallacious explanation of the reasons for his policy of taxation to pay off Sinking Fund. I believe the true reason to be the right hon. Gentleman's devotion to the formal logic of public finance without attention to its realities. There was a technical deficit last year but let us remember that it was not an actual deficit. It was not that we actually overspent on the recurring expenditure and revenue of the year. The deficit was only an unexpected reduction in the settled provision for the redemption of debt. But the right hon. Gentleman becomes hypnotised by the fact that we did not redeem as much debt as we expected and, out of that formalism to which I think he is unduly devoted, he insists on accumulating this unnecessary burden on the shoulders of trade and industry in the following years.

    As regards general policy I believe that it is a gross error to make an exceptional increase of Sinking Fund provision in this year. I wish to make it perfectly clear that we maintain to the utmost the actual programme laid down by my right hon. Friend the Member for Bewdley. What we object to is an exceptional increase of that programme. Apart from that objection we say that the form in which this increase is proposed is mischievous. It tends to keep the debt finances of one year accumulating as a burden upon the following year—a sort of hanging weight. That is one of the greatest errors which you can make in public finance. Sufficient unto the year is the good or the evil thereof. It tends to confusion and mistaken policy to keep the obligations of one year hanging over the next year. They can be dealt with as they come. Write them off and start fresh. Reconsider every year what your situation is, and make your provision in that year to meet the necessities of the year, but do not allow yourself to be confused by the ghosts of the past. There is but one permanent provision that should be observed and that is the maintenance of the Sinking Fund programme. That we support, but this proposal is not the maintenance of that programme. This is a departure from it. This is an actual increase of that programme and out contention is that it may be just as weakening to the literal and accurate maintenance of the original programme, to go in for unnecessary increases of the amount, as to go in for unnecessary diminution. On the widest ground that this is not a year in which to make an increase of the Sinking Fund and on the ground of sound administration of the public finances, that you ought not to allow legal obligations and legal burdens to go on confusing you and accumulating from year to year, this Clause ought to be rejected.

    I think that this Clause ought not to go through the Report stage without someone on this side of the House expressing the doubts and the troubles which we feel about it, though we regard it from a point of view which is rather different from that just stated by the right hon. Gentleman the Member for Sevenoaks (Sir H. Young). We are not in accord with his argument about the very narrow limits of taxation or the extremely deleterious effects on industry of raising this £5,000,000 for the purposes of the Sinking Fund. We believe that those arguments are always extremely exaggerated by hon. Members opposite. Still, of course, there are limits to the taxation which can be imposed in any one year, as the Chancellor of the Exchequer himself has so often told us. It is simply a question of what you can afford and what you cannot afford. We feel that this year at any rate events have shown us that we cannot afford to make an extra £5,000,000 provision for the redemption of debt. Events have shown this very strikingly during the actual passage of this Bill through Parliament, because while it is still before us the Government have had to come down to borrow £10,000,000 and, if events compel the borrowing of £10,000,000, surely it would be wiser to recognise the fact that in those circumstances it becomes merely an empty gesture to pay back or attempt to pay back £5,000,000 at the same time.

    It does not, naturally, very much matter. I suppose it is a little more expensive to do the thing by borrowing £10,000,000 in one way and paying back £5,000,000 in another. No doubt, as I say, it does not very much matter, but still it ought to be an object lessen to us that we have bitten off more than we can chew this year in this matter of debt redemption. However unyielding and unflinching the Chancellor of the Exchequer is, the logic of facts is irresistible. Though he may put his Sinking Fund provision at whatever figure he likes—£10,000,000 or £20,000,000 higher than it is to-day—yet, as a matter of fact, as has been shown quite clearly in the economic situation, difficult as it is, the only result is that he has to borrow in some other place. It has been brought home to us very clearly during this part of the Session that the hard facts of the situation are that this is the last year in which we ought to attempt an exceptional increase in our efforts to pay back debt. I suggest that it is regrettable that we have attempted this exceptional increase, because this £5,000,000 could have been used in other directions. I am not asking, as hon. Members opposite have, that it should have been used for tax reduction. There are many other uses which we on this side feel would have been infinitely preferable to that.

    There are a great many things which we know we have had to forgo and postpone in the programme of our party because the Chancellor has told us again and again that we could not afford them and that we had not the necessary financial resources. Many of these things should have come before this attempt to increase, over the statutory limit, the very heroic provision for Debt redemption that has become part of the law of the land. There are many other things which, in circumstances of such financial stringency, should have come before that, and, above all, we think a thing which should have come before it is expenditure which would itself have reduced the volume of unemployment, because had such expenditure been undertaken in time, and a year ago, it might have made it unnecessary to make the other borrowing for the Unemployment Insurance Fund which has made entirely nugatory this redemption of Debt. We should have escaped altogether—because we should have employed this money in providing useful work—the necessity and the dilemma which we find ourselves in now of repaying with one hand and borrowing with the other. We do feel that events themselves have been very stern logicians, and they show that with this great volume of unemployed labour, which has somehow or other to be provided for and which is after all the root factor of the situation, it is not true economy, but false economy which attempts not simply, as may be necessary, to keep up the statutory Sinking Fund provided for Debt redemption, but arbitrarily to increase it by £5,000,000.

    I should not have ventured to intervene in this debate after the extremely able exposition of the fallacies underlying this Clause in present conditions, made by the right hon. Member for Sevenoaks (Sir H. Young), if it were not that I feel in one or two directions I can add something to strengthen the appeal. The right hon. Gentleman suggested to the Chancellor that he should throw off the cloak of Pharoah in present circumstances. I suggest that national affairs demand that he should now play the part of Joseph, and that being placed in charge of the finances of the nation, he should husband our resources in view of the approaching famine. I would point out that a great many weeks have elapsed since the Chancellor framed his Budget, and therefore we should attach no blame to him if, in the march of events which has been so extremely rapid, he came to the conclusion that what was after all an heroic policy, namely, adding an extra £5,000,000 to the Sinking Fund, is now, under the altered conditions of employment and of the industries and finance of the country, not justified. The policy embodied in the Clause could hardly have been more ably or more directly condemned and exposed than by the speech to which we have just listened from the hon. Member for Aston (Mr. Strachey). In only one thing do I disagree with him, and that is when he suggests that we on this side are asking for the omission or the Clause because we look to get this £5,000,000 in tax reduction. I do not think that is so.

    I suggest that events have happened so rapidly since the Chancellor framed his Budget that it is quite clear that the basis on which he framed it, and on which he thought he had arrived at an equilibrium by the taxes proposed which would give him £5,000,000 in hand to provide for additional Debt redemption this year, has entirely changed. When he made his speech introducing the Budget, it was a gloomy speech and was received as such not only in this House but throughout the country. There was one ray of hope which he gave us at the end of that speech when he said that he believed next year, if he was still in the position of the Chancellor of the Exchequer, he would not have to introduce any fresh taxes. He then saved himself by certain phrases indicating that that was only a promise or forecast if nothing happened to upset the forecast, but events have happened already that have upset the forecast. We know that revenue cannot be coming in, and certainly during the latter months of the year will not be coming in, either from Income Tax or any of the other great sources of revenue, at anything like the rate which the Chancellor must have estimated for three or four months ago. Therefore, if it was the case three or four months ago that on that basis he attempted to make this exceptional provision of an additional £5,000,000 for the Sinking Fund, it seems to me that it is the height of folly in present circumstances to attempt it simply because it has been put into the Bill, and not to recognise the fact that the whole situation of the country has altered since the Budget was introduced.

    It is on that ground, and that ground only, that I venture to add to the plea made by the right hon. Gentleman the Member for Sevenoaks. I would beg the Chancellor not to regard it as any reflection upon his Budget if he were now to agree to the Amendment before the House. On the other hand, he would show the wisdom of the wisest if he were to say, in the completely altered circumstances, that that which was attempted as an heroic policy is now recognised as one which is placing an additional burden upon industry and the employing classes of the country to which they should not be subjected if we are to hope to weather the storm in which we find ourselves.

    The right hon. Gentleman the Member for Sevenoaks (Sir H. Young), who moved the deletion of this Clause, has appeared to-night in a very different character from that by which he has been known to those of us who have been students of his economic writings for a good many years. He spoke of reviving the ghosts of the past. I will spare the right hon. Gentleman the visitation of a number of ghosts which he has created in the past. Nobody has written more strongly than he has about the importance to our national credit of maintaining the Sinking Fund, and nobody has written more strongly also in deprecation of the policy of raiding the Sinking Fund. The right hon. Gentleman repeatedly said that his party were ardent advocates of the maintenance of a reasonable Sinking Fund, and he spoke of the statutory amount of the Sinking Fund as being fixed by what is known as the Baldwin Fund. The right hon. Gentleman has forgotten that the Baldwin Sinking Fund policy is no longer our policy. That was abandoned or superseded by a new policy that was adopted by my predecessor a few years ago under the plan of a fixed debt charge.

    It is quite true that there are certain statutory obligations which require that we should provide something over £50,000,000 a year. One of the justifications for the proposal that I am making in this Clause is that in recent years we have not paid those statutory obligations. We have not even met the Baldwin Sinking Fund requirements. During three of the last five years there have been heavy deficits, and, far from meeting our statutory obligation of £50,000,000 which was set down in the Baldwin Sinking Fund, in 1925 there was £14,000,000 deficit; there was nearly £37,000,000 deficit in the following year—

    I am not dealing with causes; I am merely stating the fact. It is true that there was a surplus in two years, but that was not applied to the reduction of debt, but to the Rating Relief Suspense Account. Then there was, of course, the deficit last year of £14,500,000. May I add that this Clause also suggests that there should be a similar allocation next year of £5,000,000 and one of £4,500,000 in the following year. It would be perfectly open to Parliament to alter that provision next year, and it would be perfectly open to me, should I occupy this position, to come to the House of Commons and to suggest that we should abandon for any year that special provision for making up the deficit. Both the right hon. Gentleman the Member for Sevenoaks and the hon. Baronet the Member for Barnstaple (Sir B. Peto), who supported his proposal, or, shall I say, improved upon the speech of the right hon. Gentleman, because I suppose, the right hon. Gentleman had not presented his points with sufficient force, raised the question of the taxation which would be imposed this year. We have already fixed the amount of taxation for this year, and, therefore, if this Clause were deleted, it could not affect the taxation for this year.

    The right hon. Gentleman who raised this proposal said that the defence I had made was full of fallacies. It may be true, as I remember the right hon. Gentleman opposite said in replying to what I said, that I had taken money by taxation and thereby limited the amount of money available in the industrial market, but it is beyond a doubt that money used to pay off debts goes straight back into the market. The hon. Gentleman behind, who spoke last but one, is a comparatively new recruit to the Labour party, and he probably is not aware of the paramount importance that the Labour party attached in its propaganda for a good many years to this important question of the reduction of Debt.

    I hope the House will not think that I am saying this in any boastful way, as that is far from my thoughts, but I claim that the policy which we have followed has had perhaps the greatest beneficial effect upon trade of anything that has been done in recent years. I am not responsible for the statement, but it is a fact or a statement which is accepted, I find, by practically all the financial newspapers, that a reduction of one per cent. in the Bank Rate is a relief to industry of £10,000,000 a year. I do not say for a moment that the policy of Floating Debt reduction that has been effected by us is wholly responsible for the reduction of the Bank Rate, but I do say—and, if it were necessary, I could produce abundant financial authority from supporters of the party opposite to the effect I have stated—that the reduction of the Bank Rate, if that be so, during the last five months from 6½ per cent. to 3 per cent. has been a benefit to industry to the extent of £35,000,000 a year. [Interruption.] The basis of credit is higher to-day than it was 12 months ago. That may be due to a number of causes, but things would certainly have been worse than they are if it had not been for the fact that we have pursued this policy of debt reduction.

    The other point that has been raised by all the speakers who have taken part in this debate is that I am paying off debt with one hand and borrowing with another. If I was not paying off this debt, the result would be that there would be £5,000,000 more debt. [Interruption.] As a matter of fact, it might be put like this, that there would be a debt of £15,000,000 in place of £10,000,000 if I had not been in office. When the money is paid off and the debt is reduced, the money is available for other purposes; I do not say that it will go to industry, but it will be available for some other purpose to help the extension of credit.

    I quite agree with the Chancellor's sum in arithmetic that if he did not pay off £5,000,000 Debt, there would be £5,000,000 more Debt. What I wished to put to him was that it might save him from having to impose fresh taxation to the amount of £5,000,000 next year if he did not insist on repaying this £5,000,000 this year.

    It is too late to reduce taxation this year. I said just now that it would be perfectly open for Parliament next year to repeal that part of this Clause which would allocate next year £5,000,000 for the reduction of the Debt. It is true that circumstances have altered for the worst since I made my Budget statement. I do not know what they will be next April, but I will say this. I am not going to alter this provision this year, but when I have to consider the financial position of the country in relation to trade and unemployment and the like next year—if I am here, of course—I shall take these relevant facts into consideration. I have often said that it is in times of prosperity that we should make the greatest efforts at Debt reduction, but at other times it must give way to matters of urgency or even of expediency. I do not think that present circumstances justify me in making any change in the proposal as it is embodied in this Bill. I must ask the House to let this Clause pass, with the reservation that, if I am here next year, in considering the financial position, and if I think then that the circumstances are such that we cannot afford to make more than the statutory provision for Debt reduction, I will not hesitate to come to the House and tell them that.

    I would ask the Chancellor of the Exchequer to let orthodoxy give way to expediency and to do it now, and not postpone it until next year. I am not saying he is not orthodox in trying to maintain the Sinking Fund. I agree with the importance of maintaining the Sinking Fund, but when he claims that in the present circumstances his mainten- ance of the Sinking Fund has been the main cause in the reduction of the Bank Rate, he is stretching the point to absurdity.

    The right hon. Gentleman has misunderstood me. I said it was the reduction of the Floating Debt.

    The reduction of the Floating Debt by the Sinking Fund. When he sees his words, he will find that he never used the words "Floating Debt." He was pointing to the beneficial results that his maintenance of the Sinking Fund had, and he said that it was an important cause in the reduction of the Bank Rate, and that by the reduction of the Bank Rate he had given £10,000,000 back to industry. That was his argument, but the reduction was unrelated to his action in the maintenance of the Sinking Fund. He complained that I challenged his statement that when he paid off this £5,000,000 he gave it back to the market. He would have left in the market the sum of £5,000,000 if he had not raised it by taxation; it would have been in exactly the same place. What he has done now is to take it from the market by taxation, and has put it back again into the market by the payment off of the Sinking Fund. Our complaint is that while he is pretending to maintain the Sinking Fund, he is in fact borrowing. Every week now he is borrowing £500,000 for the Unemployment Fund. There is £30,000,000 for local loans, and a large amount, £10,000,000 or £20,000,000, for the Unemployment Fund. He is borrowing at the same time as he is pretending to increase the Sinking Fund, and that we say is wasteful.

    His argument just now was most amusing. He said that if he had not repaid this £5,000,000 to the Sinking Fund, and if he had borrowed £10,000,000, he would have £15,000,000. To put it the other way, if he does not pay off this £5,000,000 to the Sinking Fund, he need borrow only £5,000,000 instead of £10,000,000. He does not understand it evidently, and he does not realise that it is wasteful to borrow and at the same time to pay money off the Sinking Fund. He has to pay all the costs of raising this £10,000,000, out of which he is going to repay £5,000,000 to the Sinking Fund. He admits that since he made his original Budget statement, things have altered and got worse, the revenue is not coming in to the same extent, expenditure is increasing and, instead of having, as he thought he would have after paying off this extra sum on the Sinking Fund, a credit of something like £2,000,000, he is facing the prospect of a deficit and a loss of revenue and an increase of expenditure. Surely expediency, if not orthodoxy, ought to warn him to keep this Fund in hand until at least the end of the year, and until he can see that he has a surplus out of which he can increase the Sinking Fund. This is the year when he is not only maintaining the Debt charge but increasing the Sinking Fund by this £5,000,000 and by another £8,750,000 or thereabouts which he has got as a windfall from reparations. Is that orthodoxy? Surely that is something which ought to give way to expediency. Face to face with a deficit, he is still pretending that he is increasing the Sinking Fund.

    The Chancellor of the Exchequer rebuked my hon. Friend the Member for Aston (Mr. Strachey) for his contribution to this debate, and in so doing appeared to indicate that an abnormally large Sinking Fund was a part of the policy of the Labour party. As one who took some part in the controversy within our party upon that question I very much doubt whether the right hon. Gentleman's claim about party policy can be substantiated. What he had in mind was the fact that under totally different conditions from those which now prevail the Capital Levy for the redemption of Debt was a part of the policy of this party. It was a factor in the party's policy at a time when the £, in 1913 values, was worth about half what it is to-day. At that time it was a policy which commanded support not only on these benches but also, to a large extent, in business circles. That was the moment to make a drastic attempt to deal with the Debt, but that our party some years ago desired, by the instrument of the Capital Levy, rapidly to redeem our Debt is no reason for arguing that a very large Sinking Fund in present conditions would obtain the same result.

    What is the difference in our National Debt position since that day? Since that day, with the acquiesence of the present Chancellor as well as of the right hon. Member for Epping (Mr. Churchill), we have pursued a policy of drastic monetary deflation. That policy was pursued as a result of the recommendations of the Cunliffe Committee, by which the present Chancellor said that he was generally guided in the year 1924. As a result of that deflationary policy the real burden of our National Debt has been more than doubled, and these paltry attempts by a Sinking Fund to meet that enormous increase are neither here nor there. There was something to be said for repaying bondholders in £'s worth half what the £ is to-day, but what is there to be said, from a Labour standpoint, for repaying bondholders in £'s which are worth something like double the £'s which the bondholder lent us?

    10.0 p.m.

    Is this moment, when the £ has so vastly increased in value, when industry is so severely strained, when money is so urgently required for other purposes, the moment of all moments to devote such large sums to the Sinking Fund? Even in the course of the right hon. Gentleman's present administration it appears, on good authority, that the policy of deflation, which continually increases the burden of our National Debt, has been very strenuously pursued. The right hon. Gentleman has preened himself upon the reduction of our Floating Debt by Funding operations. There was a series of very powerful articles in the "Midland Review," the organ of that great bank, which strove to show that the most potent deflationary instrument at present being used in this country was that very process of reducing our Floating Debt for which the right hon. Gentleman has taken such credit to himself this evening, and it has even been suggested that one of the biggest factors of our present abnormal unemployment is the pursuit of that deflationary policy. That is not the only organ of orthodox opinion which takes that view. The "Financial Times," as recently as May last, I think, said the policy of deflation was proceeding apace, the burden of the Debt, by these means, by continually depreciating price levels, being constantly increased.

    What purpose does a slight increase of £5,000,000 in the Sinking Fund serve in conditions like that? It only serves one purpose—yet further to appreciate the gilt-edged securities of those people who have already so great benefited, while industrial securities go down. That is the result of this policy. The whole concentration of Treasury policy for years past, under successive Governments, has been the pursuit of this policy, which benefits the rentier class in this country at the expense of industry in the illusory hope of some great conversion operation. I would suggest that that operation, which lies behind all these Sinking Fund payments, can be achieved in one of two ways. You can get conversion through the general prosperity of your country, through your inherent financial strength, which rests upon industrial prosperity, or you can get it by means of the Treasury policy, by making industrial investment so unprofitable that investors, having no outlet in industry, seek an outlet in gilt-edged securities. That is the policy of conversion through depreciation. But there may be another result of that policy, not perhaps foreseen, that instead of money being lent to the British Government it will be lent abroad, so that the President of the Board of Trade can rise in his place and talk of our financial prosperity by reference to the large foreign loans we float. That may be the effect of this seeking after conversion by a policy of credit restriction and deflation.

    I suggest to the right hon. Gentleman that he might at any rate consider whether by any of these abnormal means it is possible to force down the rate of interest which the present Government has to pay very far below the world level, whether it is not really a world problem which has to be solved through an international medium rather than by any artificial means such as a Sinking Fund in one country or the other? If the right hon. Gentleman tried through international settlements to pursue some solution of what is called the distressed debtor problem, under which people are crowding on the money market from Central Europe and other countries offering, on good security, very high rates of interest, which tend to keep the whole rate of interest throughout the world up, he would better serve the prospects of this country than by a policy which hits industry in order to benefit the rentier class.

    Surely the real way out of our present financial tangle is to pursue on every possible occasion a policy of industrial prosperity, to use every resource we have with which to meet the unemployed problem, and not to repay the £s we borrowed with £s worth at least twice what they were when they were lent to us. All this money could usefully be employed to create live assets for the country, and, after all, a live asset to set on your balance sheet is very nearly as good, and in many ways better than, the repayment of debt. A business faced with a similar problem of either repaying debt or using its finances for the creation of live assets would know which course to pursue, and that seems to me the choice in our national finance. We can either pursue this curious course or repaying debt, with consequences which are very different to-day from those which prevailed when these rules were drawn up in the last century, or we can pursue an expansionist policy of using our resources for improving the industrial stuation. We can achieve by industrial prosperity the financial basis which we are now seeking by other means.

    I am reluctant to differ from the hon. Member about the policy of his party, but I think he is wrong in his facts. I remember the discussions in 1919 and 1920 over the Capital Levy. The idea was propagated by a Member of this House who is now a Member of another place, but when he first brought forward the idea of a war debt redemption levy we were in the War period and the suggestion was made from the Liberal benches. It was not until 2½ years later, after he had gone over to the Labour party, that he succeeded in getting the Labour party to adopt that policy. The hon. Member's recollection of his own party policy is therefore inaccurate. I have listened many times to the eloquent speeches delivered by the hon. Member, once or twice from these benches, when there was only a handful of Members to listen to him pleading for the policy of non-deflation, but he seems to me to raise too many false hopes in the minds of those who listen to him. He argues always as though the money owing to those who hold bonds was borrowed at a time when its value was half what it is now. That is not so.

    It would be interesting to have a return of the amount of the War debt which is now held by people who borrowed the money before 1918–1919, 1920 and 1921. A great deal of the argument of the hon. Member for Smethwick (Sir O. Mosley) falls to the ground, because he fails to understand that money is constantly changing hands. [Interruption.] At any rate, I am entitled to my own view on that point, and, whether I am right, or whether the hon. Baronet is right, in the end the facts will find us out. It is useless pretending that the party opposite has some infallible method of dealing with unemployment. I will only say that if the hon. Member for Smethwick will have an inquiry made by the Treasury as to where this money is now held, in what hands, and what proportion is held by people who hold double what they really borrowed, we should be in a stronger position. With regard to deflation, I remember that I and other members of this party in 1919 and 1920 expressed the opinion that we were much too early in adopting the gold standard, and I have never changed my view on that subject.

    I will not join in the controversies as to whether a drastic policy of debt redemption is the policy of the Labour party. I can only say that I have not heard from Labour platforms that fervent appeal for a large Sinking Fund or the policy of a large redemption of debt put forward. The Clause we are discussing deals with the actual provisions for debt redemption made this year and the constitutional point as to whether it is right to tie the hands of succeeding Parliaments. This Clause makes a provision of £5,000,000 a year for the Sinking Fund. I agree with what the hon. Member for Smethwick (Sir O. Mosley) has said with regard to the importance of the Sinking Fund and its effect on the money market. The Chancellor of the Exchequer must be a little disappointed with the result of his operations of the Floating Debt and the Sinking Fund and its result on the price of gilt-edged securities. An important factor is the difference between the rate at which it is possible to borrow short-dated loans and the rate which has to be paid for long-dated securities. The effect of contributing £5,000,000 to the Sinking Fund on the one hand and the fact that we have such a huge total of unemployed is bound to weight the scales heavily against the possibility of this country borrowing money at a cheap rate.

    The Chancellor of the Exchequer said quite truly that the situation has changed very much for the worse since he introduced this Clause and fixed the Sinking Fund at £5,000,000 for this year. I think most people in the early months of last year would have anticipated some such provision as that with which we are now dealing. Let us now consider for a moment what justification the Chancellor of the Exchequer has for trying to tie the hands of succeeding Chancellors of the Exchequer, or himself, in future years. What has the right hon. Gentleman laid down as his own policy which differs very much from the policy which he put forward when he introduced the Budget. When he introduced a Budget he was like the gamekeeper watching the poachers on this side. The right hon. Gentleman told us of the atrocities which the right hon. Gentleman the Member for Epping (Mr. Churchill) had committed upon the Sinking Fund, and he said that he was not only going to put that matter right, but that he would see that future Chancellors of the Exchequer would not be able to do what the right hon. Gentleman the Member for Epping had done. Of course he was dubbed as honest by those stern sticklers for political honesty. What is the right hon Gentleman going to do? Instead of doing what he told us he intended to do, he now states that

    Division No. 452.]

    AYES.

    [10.15 p.m.

    Adamson, Rt. Hon. W. (Fife, West)Buchanan, G.Gibson, H. M. (Lancs, Mossley)
    Adamson, W. M. (Staff., Cannock)Burgess, F. G.Gill, T. H.
    Addison, Rt. Hon. Dr. ChristopherBuxton, C. R. (Yorks, W. R. Elland)Gillett, George M.
    Aitchison, Rt. Hon. Craigie M.Calne, Derwent Hall-Glassey, A. E.
    Alexander, Rt. Hon. A. V. (Hillsbro')Cameron, A. G.Gossling, A. G.
    Ammon, Charles GeorgeCarter, W. (St. Pancras, S. W.)Gould, F.
    Arnott, JohnCharleton, H. C.Graham, D. M. (Lanark, Hamilton)
    Aske, Sir RobertClarke, J. S.Graham, Rt. Hon. Wm. (Edin., Cent.)
    Attlee, clement RichardCluse, W. S.Gray, Milner
    Ayles, WalterClynes, Rt. Hon. John R.Greenwood, Rt. Hon. A. (Colne)
    Baker, John (Wolverhampton, Bilston)Cocks, Frederick SeymourGrenfell, D. R. (Glamorgan)
    Barnes, Alfred JohnCompton, JosephGriffith, F. Kingsley (Middlesbro' W.)
    Barr, JamesCove, William G.Griffiths, T. (Monmouth, Pontypool)
    Batey, JosephCowan, D. M.Groves, Thomas E.
    Benn, Rt. Hon. WedgwoodDaggar, GeorgeGrundy, Thomas W.
    Bennett, Capt. Sir E. N. (Cardiff C.)Dallas, GeorgeHall, F. (York, W. R., Normanton)
    Benson, G.Dalton, HughHall, G. H. (Merthyr Tydvil)
    Bentham, Dr. EthelDavies, E. C. (Montgomery)Hall, Capt. W. G. (Portsmouth, C.)
    Bevan, Aneurin (Ebbw Vale)Davies, Rhys John (Westhoughton)Hamilton, Mary Agnes (Blackburn)
    Birkett, W. NormanDay, HarryHarris, Percy A.
    Blindell, JamesDenman, Hon. R. D.Hartshorn, Rt. Hon. Vernon
    Bondfield, Rt. Hon. MargaretDukes, C.Hastings, Dr. Somerville
    Bowen, J. W.Duncan, CharlesHaycock, A. W.
    Bowerman, Rt. Hon. Charles W.Ede, James ChuterHayday, Arthur
    Broad, Francis AlfredEdge, Sir WilliamHayes, John Henry
    Bromley, J.Edmunds, J. E.Henderson, Arthur, Junr. (Cardiff, S.)
    Brooke, W.Edwards, C. (Monmouth, Bedwellty)Henderson, Thomas (Glasgow)
    Brothers, M.Edwards, E. (Morpeth)Henderson, W. W. (Middx., Enfield)
    Brown, C. W. E. (Notts, Mansfield)Egan, W. H.Herriotts, J.
    Brown, Ernest (Leith)Elmley, ViscountHirst, G. H. (York W. R. Wentworth)
    Brown, Rt. Hon. J. (South Ayrshire)Forgan, Dr. RobertHirst, W. (Bradford, South)
    Brown, W. J. (Wolverhampton, West)Gardner, B. W. (West Ham, Upton)Hoffman, P. C.

    when next year comes he will consider how the state of industry affects the case and then he will judge as to whether it is expedient to maintain the proposal which he now puts forward.

    The right hon. Gentleman is laying down an obnoxious and innocuous instruction to succeeding Chancellors of the Exchequer and he is treating the Sinking Fund as a kind of fetish. It is entirely a matter of indifference to the right hon. Gentleman that the prosperity of our trade stands for far more than the mere provision of £5,000,000 or £4,500,000 for the Sinking Fund. We say, therefore, that no Chancellor of the Exchequer should lay it down as a principle that so much has to be provided this year or next, irrespective of the conditions of the time, but that every Chancellor of the Exchequer should do what the Chancellor of the Exchequer of to-day has said he will do, that is to say, consider the facts of the moment; and that, on those facts, on the advantages and disadvantages for him, and on those alone, he should form his conclusions for that year, and that year only.

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

    The House divided: Ayes, 258; Noes, 137.

    Hollins, A.Marshall, FredSimmons, C. J.
    Hopkin, DanielMathers, GeorgeSinclair, Sir A. (Caithness)
    Horrabin, J. F.Matters, L. W.Sinkinson, George
    Hudson, James H. (Huddersfield)Melville, Sir JamesSitch, Charles H.
    Hunter, Dr. JosephMesser, FredSmith, Ben (Bermondsey, Rotherhithe)
    Isaacs, GeorgeMiddleton, G.Smith, Frank (Nuneaton)
    Jenkins, W. (Glamorgan, Neath)Montague, FrederickSmith, H. B. Lees (Keighley)
    John, William (Rhondda, West)Morgan, Dr. H. B.Smith, Tom (Pontefract)
    Johnston, ThomasMorley, RalphSmith, W. R. (Norwich)
    Jones, F. Llewellyn- (Flint)Morris, Rhys HopkinsSnowden, Rt. Hon. Philip
    Jones, Rt. Hon. Leif (Camborne)Morrison, Herbert (Hackney, South)Snowden, Thomas (Accrington)
    Jones, Morgan (Caerphilly)Morrison, Robert C. (Tottenham, N.)Sorensen, R.
    Jones, T. I. Mardy (Pontypridd)Mort, D. L.Stamford, Thomas W.
    Jowett, Rt. Hon. F. W.Moses, J. J. H.Stephen, Campbell
    Jowitt, Sir W. A. (Preston)Mosley, Sir Oswald (Smethwick)Stewart, J. (St. Rollox)
    Kedward, R. M. (Kent, Ashford)Muff, G.Strachey, E. J. St. Loe
    Kelly, W. T.Muggeridge, H. T.Strauss, G. R.
    Kennedy, ThomasMurnin, HughSullivan, J.
    Kinley, J.Naylor, T. E.Sutton, J. E.
    Kirkwood, D.Newman, Sir R. H. S. D. L. (Exeter)Taylor, R. A. (Lincoln)
    Lang, GordonNoel Baker, P. J.Taylor, W. B. (Norfolk, S. W.)
    Lansbury, Rt. Hon. GeorgeNoel-Buxton, Baroness (Norfolk, N.)Thomas, Rt. Hon. J. H. (Derby)
    Lathan, G.Oldfield, J. R.Thurtle, Ernest
    Law, Albert (Bolton)Oliver, George Harold (Ilkeston)Tinker, John Joseph
    Law, A. (Rosendale)Oliver, P. M. (Man., Blackley)Tout, W. J.
    Lawrence, SusanPalin, John HenryTownend, A. E.
    Lawrie, Hugh Hartley (Stalybridge)Perry, S. F.Trevelyan, Rt. Hon. Sir Charles
    Lawson, John JamesPethick-Lawrence, F. W.Vaughan, D. J.
    Lawther, W. (Barnard Castle)Phillips, Dr. MarionViant, S. P.
    Leach, W.Potts, John S.Walkden, A. G.
    Lee, Frank (Derby, N. E.)Price, M. P.Walker, J.
    Lee, Jennie (Lanark, Northern)Quibell, D. F. K.Wallace, H. W.
    Lees, J.Ramsay, T. B. WilsonWallhead, Richard C.
    Lewis, T. (Southampton)Raynes, W. R.Watkins, F. C.
    Lloyd, C. EllisRichards, R.Watson, W. M. (Dunfermline)
    Logan, David GilbertRichardson, R. (Houghton-le-Spring)Wellock, Wilfred
    Longbottom, A. W.Riley, F. F. (Stockton-on-Tees)Welsh, James (Paisley)
    Longden, F.Ritson, J.Welsh, James C. (Coatbridge)
    Lovat-Fraser, J. A.Roberts, Rt. Hon. F. O. (W. Bromwich)West, F. R.
    Lowth, ThomasRomeril, H. G.Westwood, Joseph
    Lunn, WilliamRosbotham, D. S. T.White, H. G.
    Macdonald, Gordon (Ince)Rowson, GuyWhiteley, Wilfrid (Birm., Ladywood)
    MacDonald, Rt. Hon. J. R. (Seaham)Salter, Dr. AlfredWhiteley, William (Blaydon)
    MacDonald, Malcolm (Bassetlaw)Sanders, W. S.Wilkinson, Ellen C.
    McElwee, A.Sawyer, G. F.Williams, David (Swansea, East)
    McEntee, V. L.Scrymgeour, E.Williams, Dr. J. H. (Llanelly)
    McGovern, J. (Glasgow, Shettleston)Scurr, JohnWilliams, T. (York, Don Valley)
    McKinlay, A.Sexton, JamesWilson, C. H. (Sheffield, Attercliffe)
    Maclean, Neil (Glasgow, Govan)Shaw, Rt. Hon. Thomas (Preston)Wilson, J. (Oldham)
    McShane, John JamesShepherd, Arthur LewisWilson, R. J. (Jarrow)
    Mansfield, W.Sherwood, G. H.Winterton, G. E. (Leicester, Loughb'gh)
    March, S.Shield, George WilliamYoung, R. S. (Islington, North)
    Marcus, M.Shillaker, J. F.
    Markham, S. F.Shinwell, E.TELLERS FOR THE AYES.—
    Marley, J.Short, Alfred (Wednesbury)Mr. Allen Parkinson and Mr. Paling.

    NOES.

    Acland-Troyte, Lieut.-ColonelCayzer, Maj. Sir Herbt, R. (Prtsmth, S.)Forestier-Walker, Sir L.
    Albery, Irving JamesChadwick, Capt. Sir Robert BurtonGalbraith, J. F. W.
    Allen, Sir J. Sandeman (Liverp'l., W.)Chapman, Sir S.Ganzoni, Sir John
    Allen, Lt.-Col. Sir William (Armagh)Christie, J. A.Gibson, C. G. (Pudsey & Otley)
    Amery, Rt. Hon. Leopold C. M. S.Crichton-Stuart, Lord C.Glyn, Major R. G. C.
    Ashley, Lt.-Col. Rt. Hon. Wilfrid W.Croft, Brigadier-General Sir H.Gower, Sir Robert
    Atholl, Duchess ofCrookshank, Capt. H. C.Greene, W. P. Crawford
    Atkinson, C.Croom-Johnson, R. P.Grenfell, Edward C. (City of London)
    Baldwin, Rt. Hon. Stanley (Bewdley)Culverwell, C. T. (Bristol, West)Gunston, Captain D. W.
    Balfour, Captain H. H. (I. of Thanet)Dalrymple-White, Lt.-Col. Sir GodfreyHacking, Rt. Hon. Douglas H.
    Balniel, LordDavidson, Rt. Hon. J. (Hertford)Hamilton, Sir George (Ilford)
    Beaumont, M. W.Davies, Dr. VernonHammersley, S. S.
    Betterton, Sir Henry B.Davies, Maj. Geo. F. (Somerset, Yeovil)Haslam, Henry C.
    Bevan, S. J. (Holborn)Dixey, A. C.Henderson, Capt. R. R. (Oxf'd, Henley)
    Birchall, Major Sir John DearmanDuckworth, G. A. V.Herbert, Sir Dennis (Hertford)
    Bird, Ernest RoyDugdale, Capt. T. L.Howard-Bury, Colonel C. K.
    Bourne, Captain Robert CroftEden, Captain AnthonyHunter-Weston, Lt.-Gen. Sir Aylmer
    Bowyer, Captain Sir George E. W.Edmondson, Major A. J.Hurd, Percy A.
    Bracken, B.Elliot, Major Walter E.Iveagh, Countess of
    Braithwaite, Major A. N.Erskine, Lord (Somerset, Weston-s.-M.)Jones, Sir G. W. H. (Stoke New'gton)
    Brown, Col. D. C. (N'th'l'd., Hexham)Everard, W. LindsayKing, Commodore Rt. Hon. Henry D.
    Brown, Brig.-Gen. H. C. (Berks, Newb'y)Falle, Sir Bertram G.Lamb, Sir J. Q.
    Buckingham, Sir H.Ferguson, Sir JohnLeighton, Major B. E. P.
    Butler, R. A.Fermoy, LordLewis, Oswald (Colchester)
    Carver, Major W. H.Fielden, E. B.Llewellin, Major J. J.
    Cautley, Sir Henry S.Ford, Sir P. J.Locker-Lampson, Rt. Hon. Godfrey

    Lymington, ViscountRawson, Sir CooperThomas, Major L. B. (King's Norton)
    Macdonald, Sir M. (Inverness)Reid, David D. (County Down)Thomson, Sir F.
    Macdonald, Capt. P. D. (I. of W.)Rentoul, Sir Gervais S.Tinne, J. A.
    Maitland, A. (Kent, Faversham)Richardson, Sir P. W. (Sur'y, Ch'ts'y)Titchfield, Major the Marquess of
    Makins, Brigadier-General E.Roberts, Sir Samuel (Ecclesall)Todd, Capt. A. J.
    Merriman, Sir F. BoydRoss, Major Ronald D.Tryon, Rt. Hon. George Clement.
    Monsell, Eyres, Com. Rt. Hon. Sir B.Ruggles-Brise, Lieut.-Colonel E. A.Turton, Robert Hugh
    Moore, Sir Newton J. (Richmond)Samuel, A. M. (Surrey, Farnham)Ward, Lieut.-Col. Sir A. Lambert
    Morden, Col. W. GrantSandeman, Sir N. StewartWaterhouse, Captain Charles
    Morrison, W. S. (Glos., Cirencester)Savery, S. S.Wayland, Sir William A.
    Morrison-Bell, Sir Arthur CliveShepperson, Sir Ernest WhittomeWells, Sydney R.
    Muirhead, A. J.Sinclair, Col. T. (Queen's U., Belfst)Wilson, G. H. A. (Cambridge U.)
    Newton, Sir D. G. C. (Cambridge)Smith, Louis W. (Sheffield, Hallam)Windsor-Clive, Lieut.-Colonel George
    O'Connor, T. J.Smith, R. W. (Aberd'n & Kinc'dine, C.)Winterton, Rt. Hon. Earl
    Oman, Sir Charles William C.Smith-Carington, Neville W.Womersley, W. J.
    O'Neill, Sir H.Smithers, WaldronWorthington-Evans, Rt. Hon. Sir L.
    Penny, Sir GeorgeSomerset, ThomasYoung, Rt. Hon. Sir Hilton
    Peto, Sir Basil E. (Devon, Barnstaple)Somerville, A. A. (Windsor)
    Pownall, Sir AsshetonSouthby, Commander A. R. J.TELLERS FOR THE NOES.—
    Ramsbotham, H.Stanley, Maj. Hon. O. (W'morland)Captain Wallace and Sir Victor
    Rathbone, EleanorSueter, Rear-Admiral M. F.Warrender.

    Bill to be read the Third time upon Friday.

    Road Traffic (Recommitted) Bill Lords

    As amended ( in the Standing Committee), and not amended on re-committal, further considered.

    Clause 94—(Restriction Or Institution Of Proceedings)

    I beg to move, in page 76, line 27, to leave out the word "or."

    Certain local authority associations have represented that local authorities ought to be in a position to institute prosecutions for offences under this part of the Measure and these Amendments give effect to this request.

    As we have a large number of Amendments on the Order Paper, may I suggest that the hon. Gentleman the Minister of Transport should, where he considers it to be necessary, give us reasons why various Amendments should be passed?

    I am obliged to the right hon. and gallant Gentleman, and, if necessary, that will be done.

    Amendment agreed to.

    Further Amendment made: In page 76, line 27, after the word "police," insert the words:

    "or the council of a county, county borough, or county district." — [Mr. Herbert Morrison.]

    Clause 95—(Transitory Provisions)

    Amendments made: In page 76, line 35, leave out from the word "force," to the end of the Clause, and insert instead thereof the words:

    "for such period and with such effect for the purposes of this Part of this Act as may be provided by the order."

    In line 37, at the end, insert the words:

    "(2) The Minister may revoke, vary, or amend an order made under this section."—[Mr. Herbert Morrison.]

    Clause 97—(Provisions With Respect To The Metropolitan Traffic Area)

    Amendment made: In page 77, line 15, leave out the word "sixty," and insert instead thereof the word "sixty-two."—[ Mr. Herbert Morrison.]

    I beg to move, in page 77, line 17, at the end, to insert the words:

    "and Section seventy-one of this Act in its application to the metropolitan traffic area shall have effect as if the references to a local authority were omitted therefrom."
    This Amendment is related to the question of the Metropolitan traffic area where the Traffic Commissioner will only be responsible for the issue of road service licences in connection with express carriages, that is to say, motor coach services. The provisions under Section 71 with respect to representation being made by a local authority are therefore inapplicable in the London area. Subsection (6) of Clause 98 that provides the power of making orders as to highways to be used by public service vehicles, and the fixing of parking places and stands is to be exercised by the Metropolitan Police in their area, but consultation will, where necessary, take place between the Traffic Commissioner and the London and Home Traffic Advisory Committee, which is representative of the local authorities in the London traffic area.

    Amendment agreed to.

    Further Amendments made: In page 77, line 22, leave out the word "sixty," and insert instead thereof the word "sixty-two."

    In line 29, after the word "aforesaid," insert the words:

    "or gives to the commissioners of any traffic area any directions relating specifically to the London Traffic Area constituted under the London Traffic Act, 1924."

    In line 32, leave out the words "London Traffic Act, 1924," and insert instead thereof the words "said Act."—[ Mr. Herbert Morrison.]

    Clause 98—(Special Provisions With Respect To The City Of London And The Metropolitan Police District)

    Amendments made: In page 79, line 8, leave out the words "with respect to stands and stopping places."

    In page 80, line 17, leave out the words "under this section," and insert instead thereof the words:

    "made by the Minister under the last preceding sub-section."—[Mr. Herbert Morrison.]

    Clause 99—(Application To Scotland)

    Amendments made: In page 80, line 35, at the beginning, insert the words "In the application of section sixty-two."

    In page 81, line 3, after the second word "of," insert the words "section sixty-five and."

    In line 6, at the end, insert the words:

    "(d) The provisions of Sub-sections (4), (5), (6) and (8) of Section eighty-nine shall have effect subject to the provisions of Sub-section (11) of Section one hundred and nineteen of this Act;
    (e) In the application of Section ninety a reference to the council of a county or burgh shall be substituted for any reference to the local authority of a county borough or county district."—[The Lord Advocate.]

    Clause 100—(Power To Run Omnibuses)

    Amendments made: In page 81, line 14, after the word "the," insert the word "traffic."

    In line 16, leave out the word "section," and insert instead thereof the word "Act."—[ Mr. Herbert Morrison.]

    I beg to move, in page 81, line 21, at the end, to insert the words:

    "or
    (c) except with the consent of the authority, on any road vested in a statutory dock authority as such or in a statutory harbour authority as such; or
    (d) except with the consent of the company on any premises (not being part of a highway) belonging to a railway company and adjoining or giving access to a railway station."
    This Amendment is moved to meet representations to the effect that the Commissioners should not be in a position to authorise omnibus services on the private property of dock authorities or railway companies without the consent of the authority or company. That appeared to us to be a reasonable claim.

    Amendment agreed to.

    Clause 101—(Provisions With Respect To Consents To Be Granted By Traffic Commissioners Under This Part)

    Amendment made: In page 82, line 40, leave out from the word "and," to the word "to" in line 41.—[ Mr. Herbert Morrison.]

    Clause 104—(Working And Other Agreements)

    Amendment made: In page 85, line 23, leave out the words "to run vehicles."

    Consequential Amendment made.—[ Mr. Herbert Morrison.]

    Clause 105—(Accounts)

    Amendment made: In page 85, line 26, after the word "authority," insert the words "run public service vehicles."

    Consequential Amendment made.—[ Mr. Herbert Morrison.]

    Clause 107—(Interpretation)

    Amendment made: In page 86, line 30, leave out the words "includes in its constitution," and insert instead thereof

    the words "is so constituted as to include among its members."—[ Mr. Herbert Morrison.]

    Clause 110—(Provisions As To Regulations)

    Amendments made: In page 87, line 12, after the word "made," insert the words "by the Minister."

    In line 20, leave out the words "new regulations," and insert instead thereof the words "a new regulation."

    In line 26, leave out the word "regulations," and insert instead thereof the word "regulation."

    After the word "made," insert the words "by the Minister."—[ Mr. Herbert Morrison.]

    Clause 111—(Forgery, Etc Of Licences And Certificates)

    Amendments made: In page 87, line 39, after the word "lends," insert the word "to."

    In page 88, line 1, leave out the words "within the meaning of," and insert instead thereof the word "under."—[ Mr. Herbert Morrison.]

    I beg to move, in page 88, line 9, to leave out the words "with or without, hard labour."

    The words "with or without hard labour" are being omitted, because if the courts can imprison, the sentence may be with or without hard labour, and it is not necessary to put the words in the Bill.

    Amendment agreed to.

    I beg to move, in page 88, line 38, to leave out the word "previously," and to insert instead thereof the words:

    "the document has been previously returned to him or he has previously been."
    Objection was taken in Committee to Sub-section (4) because as it stands it provides that if a constable has seized a licence or certificate which he believes to be forged, the person from whom the document has been seized must either be charged with an offence or must be summoned to appear before a court of summary jurisdiction to account for his possession of the document. The words that we propose to insert provide that neither of these two alternatives need be adopted if the document is, in fact, returned to the owner. The point was raised by Members of the Opposition in Committee and I promised to give consideration to it.

    Amendment agreed to.

    Clause 112—(Prosecutions And Penalties For Offences)

    I beg to move, in page 89, line 18, to leave out paragraph (a).

    I have always understood that English law assumed that a person was innocent until he is proved to be guilty. [HON. MEMBERS: "Hear, hear!"] I hope to have the support of hon. Members opposite in this Amendment. This paragraph says exactly the reverse. It states that:
    "the owner of the vehicle shall give such information as he may be required by or on behalf of a chief officer of police to give as to the identity of the driver, and, if he fails to do so, shall be guilty of an offence, unless he shows to the satisfaction of the court that he did not know and could not with reasonable diligence have ascertained who the driver was."
    According to this paragraph, if the driver does not give such information as is required by the chief officer of police he is guilty of an offence unless he can prove that he knew nothing about it. That is a very grave departure from the ordinary procedure of our law and the ordinary rules of law. I do not see why the Government should single out the owner of a motor car for this new form of law. It should be for the police to prove that he did know and could have given the information which he ought to have given, not for the law to assume that he is guilty unless he can prove his innocence. This Amendment was moved in Committee and there was really no answer from the learned Solicitor-General. He was courteous and nice, as he always is, and may I say that he assisted us greatly in our deliberations upstairs, but he had no answer to the arguments put forward on this point. This is an alteration of the whole procedure of our law; a man is to be regarded as guilty of an offence unless he can prove that he is innocent. If I can persuade any of my hon. Friends to act with me I propose to divide the House on this Amendment.

    I am surprised that the right hon. and gallant Member should move this Amendment to-night because only a few days ago he agreed with the arguments I put to the House on a somewhat similar Amendment, which proposed to impose a duty upon the owner of a vehicle to give information where the facts led the chief officer of police to suppose that a vehicle was being driven in contravention of the provisions of this Bill with regard to compulsory insurance. The right hon. Gentleman then felt that it was necessary in the interest of the efficient administration of justice, that the owner of a vehicle, who was the person most likely to have the information, should give it in case of a possible contravention of the provisions of this Bill with regard to compulsory insurance. If that was a right and proper position to adopt, how much more proper is it that the owner of a vehicle should give information to the police if he has it in his power, not as to the facts concerning the commission of an offence, but as to the identity of the driver who may have driven away and whose identity may be unknown. We are not asking a man to convict himself at all. We are simply asking the House to say that it is right that where the driver of a vehicle may have knocked down a man and driven away, and may be completely lost to the police, and where it may be obvious that an offence has been committed by someone, one should be able to say to the owner of the vehicle, "Now, we want you to be good enough to tell us whether you know who was the person who was driving your vehicle."

    I submit that such a provision is most necessary if the law, particularly in the case of dangerous driving, is to be made effective. I hope that the right hon. Gentleman may see the matter in the same light as he saw it in the other day. One ought not to be too technical in this matter. There are instances in the law where the presumption of innocence is reversed. If you are found in possession of explosives, the law puts upon you the liability of explaining the innocence of that possession. Otherwise you are guilty of an offence. The man who is in possession of a powerful vehicle is just as much in possession of a dangerous weapon as if he is in possession of an explosive. We are not going as far as that; we are simply saying that if the law is to be effectively and properly administered, it should be the duty of the owner of the vehicle, if he has the information in his possession, to tell the police who was the driver of the offending vehicle.

    Will the learned Solicitor-General answer my simple point? Are you not saving here that a man shall be guilty of an offence unless he proves that he was innocent? You are therefore changing the general law of England?

    I do not think so. What one is doing is asking the man, if he has the information, to give it, as to the identity of the driver. If he has the information and does not give it he would undoubtedly be guilty of an offence. I do not profess to say that in that respect it is not making a change in the law, but, after all, this House has to make changes in the law if the changes are right and proper. I do not admit for a moment that we are enacting a new principle. I have pointed out one instance and I could point out others, notably the case of a person in possession of stolen goods. There the law again imposes an obligation on the defendant to account for the possession. I think the House will be satisfied that where there has been a case of dangerous driving and the driver has gone off in the darkness of the night, it is only right and proper that the owner of the vehicle if he knows who the driver was, should disclose the fact.

    The argument of the learned Solicitor-General is really in strong support of the plea for the deletion of paragraph (a). The Solicitor-General says that it is meet and proper that anyone, such as an owner, having the information shall give that information, and, if he does not give the information, that he shall be guilty of an offence. That is an argument which appeals to me very strongly, and that is that sort of law which I wish to see in the Bill, but paragraph (a) is not carrying out the purpose stated by the Solicitor-General. It puts the onus on the owner of any vehicle to give the name of the driver, and, if he is unable to give it, then he is to be guilty of an offence unless he can prove that he did not know, or, as the more objectionable part of the paragraph runs, unless "he could not with reasonable diligence have ascertained." He may not even know but he will be guilty of an offence unless he can explain away his ignorance. I think the Minister ought to be satisfied with paragraph (b) which provides that

    "any other person shall, if required as aforesaid, give any information which it is in his power to give and which may lead to the identification of the driver,"
    What wider power can the Minister demand? I remember that upstairs we had an argument as to whether under paragraph (a) the Minister was not going further than the ordinary law of the land. One of the arguments advanced was that if a man's wife was driving a car of which he was the owner, then in a Court of Law, under the ordinary law the wife could not give evidence against the husband, or the husband against the wife. Yet the Minister was daring to interfere in domestic relations and bringing in the husband to give evidence against the wife. That was one argument, but there are many others. In Clause 120 there is a definition of an owner as a man in possession of a motor car under a hire purchase agreement. What is the position of a man who owns a car under a hire purchase agreement, if he is riding in that hired car and the driver of the car commits an offence? The hirer of the vehicle is placed in the ambiguous position of having to tell who the driver was, and if he cannot do so of proving that he could not with reasonable diligence have found out. The Government

    Division No. 453.]

    AYES.

    [10.53 p.m.

    Adamson, Rt. Hon. W. (Fife, West)Barr, James,Brooke, W.
    Adamson, W. M. (Staff., Cannock)Batey, JosephBrothers, M.
    Addison, Rt. Hon. Dr. ChristopherBenn, Rt. Hon. WedgwoodBrown, C. W. E. (Notts. Mansfield)
    Aitchison, Rt. Hon. Cralgie M.Bennett, Capt. Sir E. N. (Cardiff C.)Brown, Ernest (Leith)
    Alexander, Rt. Hon. A. V. (Hillsbro')Benson, G.Brown, Rt. Hon. J. (South Ayrshire)
    Ammon, Charles GeorgeBentham, Dr. EthelBrown, W. J. (Wolverhampton, West)
    Arnott, JohnBirkett, W. NormanBuchanan, G.
    Aske, Sir RobertBlindell, JamesBurgess, F. G.
    Attlee, Clement RichardBondfield, Rt. Hon. MargaretBuxton, C. R. (Yorks. W. R. Elland)
    Ayles, WalterBowen, J. W.Calne, Derwent Hall-
    Baker, John (Wolverhampton, Bilston)Bowerman, Rt. Hon. Charles W.Cameron, A. G.
    Baldwin, Oliver (Dudley)Broad, Francis AlfredCarter, W. (St. Pancras, S. W.)
    Barnes, Alfred JohnBromley, J.Charleton, H. C.

    are going further than the law demands. It is true that under the larceny law and the explosives law there is that presumption of crime if a man cannot give a reasonable explanation, but it is against the purpose of the law of the land to add to those examples of throwing the burden of proof from the prosecution on to the defence. The Solicitor-General should really take care to guard the law from the iniquity that we get across the Channel, where a man is put into the dock and has to prove his innocence. It is not a large demand which we are making, and I hope that it will be acceded to.

    I should like to ask why it is necessary to treat the owner of a vehicle in a different way from any other person? The point made by my hon. Friend was that the owner is guilty of an offence unless he can prove that he did not know. Any other person is only guilty of an offence if he does not give the information which it is in his power to give. There is no suggestion that any other person should have to prove it was not in his power to give information. I ask the Solicitor-General why the wretched owner has to prove something that it is not in his power to prove.

    It is because the owner has, after all, a great deal more to do with the car than any other person. It seems reasonable that one should be able to ask him questions direct.

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

    The House divided: Ayes, 246; Noes, 113.

    Clarke, J. S.Kirkwood, D.Raynes, W. R.
    Cluse, W. S.Lang, GordonRichards, R.
    Compton, JosephLansbury, Rt. Hon. GeorgeRichardson, R. (Houghton-le-Spring)
    Cowan, D. M.Lathan, G.Riley, F. F. (Stockton-on-Tees)
    Daggar, GeorgeLaw, Albert (Bolton)Ritson, J.
    Dallas, GeorgeLaw, A. (Rossendale)Roberts, Rt. Hon. F. O. (W. Bromwich)
    Dalton, HughLawrence, SusanRomeril, H. G.
    Davies, E. C. (Montgomery)Lawrie, Hugh Hartley (Stalybridge)Rosbotham, D. S. T.
    Davies, Rhys John (Westhoughton)Lawson, John JamesRowson, Guy
    Day, HarryLawther, W. (Barnard Castle)Salter, Dr. Alfred
    Denman, Hon. R. D.Leach, W.Sanders, W. S.
    Dukes, C.Lee, Frank (Derby, N. E.)Sawyer, G. F.
    Duncan, CharlesLees, J.Scrymgeour, E.
    Ede, James ChuterLewis, T. (Southampton)Scurr, John
    Edge, Sir WilliamLloyd, C. EllisSexton, James
    Edmunds, J. E.Logan, David GilbertShaw, Rt. Hon. Thomas (Preston)
    Edwards, E. (Morpeth)Longbottom, A. W.Shepherd, Arthur Lewis
    Egan, W. H.Longden, F.Sherwood, G. H.
    Elmley, ViscountLovat-Fraser, J. A.Shield, George William
    Forgan, Dr. RobertLowth, ThomasShillaker, J. F.
    Gardner, B. W. (West Ham, Upton)Lunn, WilliamShort, Alfred (Wednesbury)
    Gibson, H. M. (Lancs, Mossley)Macdonald, Gordon (Ince)Simmons, C. J.
    Gill, T. H.MacDonald, Malcolm (Bassetlaw)Sinkinson, George
    Glassey, A. E.Macdonald, Sir M. (Inverness)Sitch, Charles H.
    Gossling, A. G.McElwee, A.Smith, Ben (Bermondsey, Rotherhithe)
    Gould, F.McEntee, V. L.Smith, Frank (Nuneaton)
    Graham, D. M. (Lanark, Hamilton)McGovern, J. (Glasgow, Shettleston)Smith, Rennie (Penistone)
    Graham, Rt. Hon. Wm. (Edin., Cent.)McKinlay, A.Smith, Tom (Pontefract)
    Gray, MilnerMaclean, Neil (Glasgow, Govan)Smith, W. R. (Norwich)
    Greenwood, Rt. Hon. A. (Colne)McShane, John JamesSnowden, Thomas (Accrington)
    Grenfell, D. R. (Glamorgan)Mansfield, W.Sorensen, R.
    Griffith, F. Kingsley (Middlesbro' W.)March, S.Stamford, Thomas W.
    Groves, Thomas E.Marcus, M.Stephen, Campbell
    Grundy, Thomas W.Marley, J.Stewart, J. (St. Rollox)
    Hall, F. (York, W. R., Normanton)Marshall, FredStrauss, G. R.
    Hall, G. H. (Merthyr Tydvil)Mathers, GeorgeSullivan, J.
    Hamilton, Mary Agnes (Blackburn)Matters, L. W.Sutton, J. E.
    Harris, Percy A.Melville, Sir JamesTaylor, R. A. (Lincoln)
    Hartshorn, Rt. Hon. VernonMesser, FredTaylor, W. B. (Norfolk, S. W.)
    Hastings, Dr. SomervilleMiddleton, G.Thomas, Rt. Hon. J. H. (Derby)
    Haycock, A. W.Millar, J. D.Tinker, John Joseph
    Hayday, ArthurMills, J. E.Tout, W. J.
    Hayes, John HenryMilner, Major J.Townend, A. E.
    Henderson, Arthur, Junr. (Cardiff, S.)Montague, FrederickVaughan, D. J.
    Henderson, Thomas (Glasgow)Morgan, Dr. H. B.Viant, S. P.
    Henderson, W. W. (Middx., Enfield)Morley, RalphWalkden, A. G.
    Herriotts, J.Morrison, Herbert (Hackney, South)Walker, J.
    Hirst, G. H. (York W. R. Wentworth)Morrison, Robert C. (Tottenham, N.)Wallace, H. W.
    Hirst, W. (Bradford, South)Mort, D. L.Watkins, F. C.
    Hoffman, P. C.Moses, J. J. H.Watson, W. M. (Dunfermline)
    Hollins, A.Mosley, Sir Oswald (Smethwick)Wellock, Wilfred
    Hopkin, DanielMuff, G.Welsh, James (Paisley)
    Horrabin, J. F.Muggeridge, H. T.Welsh, James C. (Coatbridge)
    Hudson, James H. (Huddersfield)Murnin, HughWest, F. R.
    Hunter, Dr. JosephNaylor, T. E.Westwood, Joseph
    Hutchison, Maj.-Gen. Sir R.Noel Baker, P. J.White, H. G.
    Isaacs, GeorgeNoel-Buxton, Baroness (Norfolk, N.)Whiteley, Wilfrid (Birm., Ladywood)
    Jenkins, W. (Glamorgan, Neath)Oldfield, J. R.Whiteley, William (Blaydon)
    John, William (Rhondda, West)Oliver, George Harold (Ilkeston)Wilkinson, Ellen C.
    Johnston, ThomasOliver, P. M. (Man., Blackley)Williams, David (Swansea, East)
    Jones, F. Llewellyn- (Flint)Palin, John HenryWilliams, Dr. J. H. (Llanelly)
    Jones, Rt. Hon. Leif (Camborne)Parkinson, John Allen (Wigan)Williams, T. (York, Don Valley)
    Jones, Morgan (Caerphilly)Perry, S. F.Wilson, C. H. (Sheffield, Attercliffe)
    Jones, T. I. Mardy (Pontypridd)Pethick-Lawrence, F. W.Wilson, J. (Oldham)
    Jowett, Rt. Hon. F. W.Phillips, Dr. MarionWilson, R. J. (Jarrow)
    Jowitt, Sir W. A. (Preston)Potts, John S.Winterton, G. E. (Leicester, Loughb'gh)
    Kedward, R. M. (Kent, Ashford)Price, M. P.Young, R. S. (Islington, North)
    Kelly, W. T.Quibell, D. F. K.
    Kennedy, ThomasRamsay, T. B. WilsonTELLERS FOR THE AYES.—
    Kinley, J.Rathbone, EleanorMr. Charles Edwards and Mr. Paling.

    NOES.

    Acland-Troyte, Lieut-ColonelBeaumont, M. W.Butler, R. A.
    Albery, Irving JamesBird, Ernest RoyCautley, Sir Henry S.
    Allen, Sir J. Sandeman (Liverp'l., W.)Bourne, Captain Robert CroftCayzer, Maj. Sir Herbt. R. (Prtsmth, S.)
    Allen, Lt.-Col. Sir William (Armagh)Bowyer, Captain Sir George E. W.Chadwick, Capt. Sir Robert Burton
    Amery, Rt. Hon. Leopold C. M. S.Bracken, B.Christie, J. A.
    Ashley, Lt.-Col. Rt. Hon. Wilfrid W.Braithwaite, Major A. N.Croft, Brigadier-General Sir H.
    Atkinson, C.Briscoe, Richard GeorgeCrookshank, Capt. H. C.
    Balfour, Captain H. H. (I. of Thanet)Brown, Brig.-Gen. H. C. (Berks, Newb'y)Culverwell, C. T. (Bristol, West)
    Balniel, LordBuckingham, Sir H.Dalrymple-White, Lt.-Col. Sir Godfrey

    Davies, Dr. VernonLamb, Sir J. Q.Smith, R. W. (Aberd'n & Kinc'dine, C.)
    Davies, Maj. Geo. F. (Somerset, Yeovil)Llewellin, Major J. J.Smithers, Waldron
    Duckworth, G. A. V.Locker-Lampson, Rt. Hon. GodfreySomerset, Thomas
    Edmondson, Major A. J.Lymington, ViscountSomerville, A. A. (Windsor)
    Elliot, Major Walter E.Macdonald, Capt. P. D. (I. of W.)Somerville, D. G. (Willesden, East)
    Erskine, Lord (Somerset, Weston-s-M.)Merriman, Sir F. BoydSouthby, Commander A. R. J.
    Falle, Sir Bertram G.Mitchell-Thomson, Rt. Hon. Sir W.Stanley, Lord (Fylde)
    Ferguson, Sir JohnMonsell, Eyres, Com. Rt. Hon. Sir B.Stanley, Maj. Hon. O. (W'morland)
    Fermoy, LordMoore, Sir Newton J. (Richmond)Thomas, Major L. B. (King's Norton)
    Fielden, E. B.Morden, Col. W. GrantTinne, J. A.
    Fison, F. G. ClaveringMorrison, W. S. (Glos., Cirencester)Titchfield, Major the Marquess of
    Ford, Sir P. J.Morrison-Bell, Sir Arthur CliveTodd, Capt. A. J.
    Forestier-Walker, Sir L.Muirhead, A. J.Tryon, Rt. Hon. George Clement.
    Gibson, C. G. (Pudsey & Otley)Nicholson, O. (Westminster)Turton, Robert Hugh
    Glyn, Major R. G. C.O'Connor, T. J.Vaughan-Morgan, Sir Kenyon
    Gowar, Sir RobertOman, Sir Charles William C.Wallace, Capt. D. E. (Hornsey)
    Greene, W. P. CrawfordO'Neill, Sir H.Ward, Lieut.-Col. Sir A. Lambert
    Gretton, Colonel Rt. Hon. JohnPeto, Sir Basil E. (Devon, Barnstaple)Warrender, Sir Victor
    Gunston, Captain D. W.Reid, David D. (County Down)Waterhouse, Captain Charles
    Hamilton, Sir George (Ilford)Rentoul, Sir Gervais S.Wayland, Sir William A.
    Hammersley, S. S.Richardson, Sir P. W. (Sur'y, Ch'ts'y)Wells, Sydney R.
    Hartington, Marquess ofRoberts, Sir Samuel (Ecclesall)Wilson, G. H. A. (Cambridge U.)
    Haslam, Henry C.Ross, Major Ronald D.Windsor-Clive, Lieut.-Colonel George
    Henderson, Capt. R. R. (Oxf'd, Henley)Ruggles-Brise, Lieut.-Colonel E. A.Winterton, Rt. Hon. Earl
    Heneage, Lieut.-Colonel Arthur P.Samuel, A. M. (Surrey, Farnham)Womersley, W. J.
    Herbert, Sir Dennis (Hertford)Sandeman, Sir N. StewartYoung, Rt. Hon. Sir Hilton
    Howard-Bury, Colonel C. K.Sassoon, Rt. Hon. Sir Philip A. G. D.
    Hunter-Weston, Lt.-Gen. Sir AylmerShepperson, Sir Ernest WhittomeTELLERS FOR THE NOES.—
    Hurd, Percy A.Sinclair, Col. T. (Queen's U., Belfst.)Sir Frederick Thomson and Sir
    Jones, Sir G. W. H. (Stoke New'gton)Smith, Louis W. (Sheffield, Hallam)George Penny.

    Clause 114—(Expenses Of Roads Department)

    I beg to move, in page 90, line 7, at the end, to insert the words:

    "and for the purposes of this sub-section expenses incurred in disseminating knowledge or otherwise informing the minds of the people, with a view to promoting safety on roads, may be treated as expenses incurred in the administration of this Act."
    I hope that the language of this Amendment will commend itself to the House. Hon. Members will know that we are going to have a highway code, and it will be necessary for us to disseminate knowledge about that code so that the general public should know of its provisions and that its principles should be popularised. This Amendment gives us the necessary financial power. It is not proposed, as at present advised, to exercise that power in the direction of newspaper advertisements, and I hope that every Minister will be careful about newspaper advertising which might be an undesirable power for a Minister to exercise.

    I must utter a word of protest against the word "disseminating." I should have thought that the Minister could have found a charming old English word like "spreading" instead of this horrible concoction "disseminating."

    Amendment agreed to.

    Clause 116—(Application Of Fines And Fees Under Part I)

    Amendment made: In page 91, line 18, leave out the words "county or county borough council," and insert instead thereof the words "licensing authority."—[ Mr. Herbert Morrison.]

    Clause 117—(Inland Revenue Licence For Motor-Car Drivers)

    Amendment, made: In page 91, line 33, after "1870," insert the words "and section ten of the Finance Act, 1921."—[ Mr. Herbert Morrison.]

    Clause 118—(Special Provisions As To Scotland)

    Amendments made: In page 92, line 13, at the end, insert the words:

    "(4) Except where otherwise expressly provided the expression 'highway authority' means a county council or the town council of a burgh charged with the maintenance and management of any of the highways therein."

    In line 16, at the end, insert the words:

    "and as if for any reference to a court of summary jurisdiction there wore substituted a reference to the sheriff."

    In line 16, after the words last inserted, insert the words:

    "(5) For the purposes of Section one hundred and fifteen of and the Fourth Schedule to this Act the expression 'local authority' shall mean a county or town comicil."—[The Lord Advocate.]

    I beg to move, in page 93, line 3, to leave out Sub-section (8).

    The terms of this Sub-Section are:
    "It shall be lawful to convict a person of a contravention of Section forty-nine of this Act on the evidence of one witness."
    We object to this provision on the ground that by the law of Scotland one uncorroborated witness is not sufficient for a conviction. This Sub-section refers to Clause 49 of the Bill, which deals with the penalties for neglect of traffic directions. It provides that where a police constable is on point duty or when there are signals or signs to regulate the traffic, any person driving or propelling any vehicle who neglects or refuses to stop the vehicle or make it proceed in a particular line of traffic or to conform to the direction given by the signals shall be guilty of an offence. I do not object in the least to any person who is found guilty of this offence being condigoly punished so far as the law provides, but I object to such a conviction being recorded on evidence which is regarded as insufficient under the law of Scotland. The Scottish law is that if there is no oral evidence or documentary evidence or circumstantial evidence in addition to the evidence of one witness, then a case must be held to be not proved. It is sufficient if there is corroboration by circumstances.

    The Solicitor-General, in dealing last week with an Amendment submitted from the benches behind me proposing that a man arrested for driving a motor car whilst under the influence of drink should have a right to be examined by his own doctor or an independent doctor, resisted it on the ground that a motorist must stand on the same footing as any other member of the community. All we ask here is that a motorist shall stand on the same footing as any other member of the community in Scotland, and shall be judged by the ordinary laws of evidence which prevail in the Scottish Courts. It ought not to be difficult for a policeman on point duty to get some corroboration, either that of another witness or some circumstantial evidence. I am not decrying the valuable public duty performed by policemen regulating traffic, but the law in Scotland is very definite about the uncorroborated witness.

    The Lord Advocate is familiar with Edinburgh and will know that at a number of cross roads there are signal lights and that no policeman is on duty. Under this Clause, however, one unsupported witness, who may be a bystander on the pavement, will be sufficient to convict a motorist. There is also this last point, that it will be impossible to avoid bringing proceedings in any case, because if one uncorroborated witness tells his story that will be enough, if he is believed, to prove the case. The Lord Advocate knows very well that papers come for consideration to the Crown Office in Scotland, aad that if there is not sufficient corroboration it is determined that no proceedings are to be taken, but in these cases, one witness will be enough. If they have such testimony, it will be necessary to institute proceedings. On the whole matter, therefore, I cannot see that there is any reason why motorists should be put on a different footing from other members of the community. It may be that in a small number of cases in Scotland under Statutes one credible witness has been held sufficient to prove an offence. There are a very limited number of such cases. The general law remains that one uncorroborated witness is not enough. There must be corroboration, and I, therefore, appeal to the Lord Advocate not to depart from the ordinary law of his country in this particular instance.

    This is a matter upon which, if my recollection is right, considerable discussion took place during the Committee stage, and the Committee came to the conclusion, without a division, that this Clause which it is now sought to delete should stand part of the Bill. The Government are unable to go back upon the decision which was then taken, and having had opportunities of thinking the matter over since then, I am more than confirmed in the view that I held when this Clause was before the Committee. I think it is important that we should keep in view that the kind of offence for which one witness is deemed to be sufficient by this Clause, is not a crime in the ordinary sense of the term. If you were dealing here with crime I should assent at once, because, as my hon. Friend has said, it is undesirable to depart from the rule, which in general is a fundamental rule, of the law of Scotland that a case should be corroborated so as to have more than one witness. You are not dealing here with crime at all, but with a statutory offence, which is a different thing. [Interruption.] It is not a crime in the ordinarily accepted meaning of the term; it is a statutory offence, namely, the disregard of a traffic direction or of a traffic signal. This provision may involve a certain extension of the law of Scotland in the sense that it creates a statutory offence which is proveable by the evidence of one witness.

    Can the Lord Advocate say whether in the past there has been any difficulty in obtaining a conviction under the law of Scotland where corroborative evidence is necessary?

    I cannot say as regards this particular matter, but we have many statutory offences in Scotland which can be proved by the evidence of one witness only. For example, you have offences under the Game (Scotland) Act of 1772, and also under the Salmon Fisheries Act of 1828, and the Fisheries Act of 1857.

    Yes. If you can convict the poacher on the evidence of one landowner, for my part I cannot see that there is any reason why you should not convict the motorist for breaking the law on the evidence of one policeman. The motorist to-day is a far greater danger to the community than the poacher. There are many other statutory offences for which the evidence of one witness is sufficient. There are certain offences under the licensing laws. You can take away the licence of a publican on the evidence of one witness. There are also offences under the revenue laws. One witness is sufficient under the Excise Act, 1827, and under the Customs (Consolidation) Act, 1875. There are offences under the Roads and Bridges Act, 1878, which are provable by the evidence of one witness. It is quite inaccurate to say that this provision represents some far-reaching and revolutionary change in the law of Scotland. What it does is to extend a principle of the law of Scotland, which has been repeatedly recognised by Parliament, to a particular offence in regard to which a very strong case can be made out for such an extension of the law.

    I do not think it is necessary to detain the House by saying much in justification of this provision. When one reflects that in the City of London alone, during the year ending on the 31st March, 1930, the number of children killed by motor cars was 297, and the number of children injured in the City of London alone was upwards of 10,000—[Interruption.]—I think it is vitally important that it should be possible to convict people who disregard traffic signals, which are imperatively required in the interests of public safety, upon the evidence of one witness. If two witnesses were required, the result would inevitably be that a very considerable proportion of people who ought to be convicted would go scot free. [Interruption.] There may be the very greatest difficulty in getting two witnesses of the disregard of a signal—not because there may not be some person other than cause the other person has not waited, but has gone on.

    It used to be said that it was better that nine guilty men should escape than that one innocent man should be convicted, and that may be so when you are dealing with crime, but when you are dealing with a statutory offence such as the disregard of a signal, there is no the pointsman who observes it, but be-wisdom in the maxim; it is not common sense. Even in the case of crime the wisdom of the maxim was doubted by so eminent a lawyer as Sir James Fitzjames Stephen. When you are dealing with a matter of traffic regulation, the commonsense thing is that it is far better that you should run in your nine guilty people, even if, in the process, now and again an innocent person may be run in. [HON. MEMBERS: "Oh! Shocking!"] We did not hear protests against that doctrine when the landowner was given power to run in the poacher. It may be that you are giving to the police of this country in this particular matter a certain dictatorial power, but for my part, considering the way in which the motorist has over-ridden the rights and the interests of the pedestrian, I, for one, have come to the conclusion that this power is a salutary power, which is required in the interests of the proper observance of traffic directions, and that the House can give its assent to it without sanctioning any departure whatsoever from the well recognised principles of the law of Scotland.

    Policemen often make statements in the Courts that are untrue, and it is utterly preposterous that the liberty of the subject should be dependent upon one witness. I think it is a bad law. The people on the other side made the laws to suit themselves. But the way to cure a bad law is not to put another bad law on the Statute Book. I put it to my Scottish colleagues that they have no right to support a Measure of this kind. It is not a good thing that one witness should be sufficient to convict any prisoner.

    Division No. 454.]

    AYES.

    [11.26 p.m.

    Adamson, Rt. Hon. W. (Fife, West)Brown, C. W. E. (Notts, Mansfield)Egan, W. H.
    Adamson, W. M. (Staff., Cannock)Brown, Ernest (Leith)Elmley, Viscount
    Addison, Rt. Hon. Dr. ChristopherBrown, Rt. Hon. J. (South Ayrshire)Forgan, Dr. Robert
    Aitchison, Rt. Hon. Craigie M.Buchanan, G.Gardner, B. W. (West Ham, Upton)
    Alexander, Rt. Hon. A. V. (Hillsbro')Burgess, F. G.Gardner, J. P. (Hammersmith, N.)
    Alpass, J. H.Cameron, A. G.George, Major G. Lloyd (Pembroke)
    Ammon, Charles GeorgeCarter, W. (St. Pancras, S. W.)Gibson, H. M. (Lancs, Mossley)
    Arnott, JohnCharleton, H. C.Gill, T. H.
    Aske, Sir RobertClarke, J. S.Glassey, A. E.
    Attlee, Clement RichardCluse, W. S.Gossling, A. G.
    Ayles, WalterCocks, Frederick SeymourGould, F.
    Barnes, Alfred JohnCompton, JosephGraham, D. M. (Lanark, Hamilton)
    Barr, JamesDaggar, GeorgeGray, Milner
    Batey, JosephDallas, GeorgeGreenwood, Rt. Hon. A. (Colne)
    Benn, Rt. Hon. WedgwoodDalton, HughGrenfell, D. R. (Glamorgan)
    Benson, G.Day, HarryGriffith, F. Kingsley (Middlesbro' W.)
    Bentham, Dr. EthelDenman, Hon. R. D.Groves, Thomas E.
    Bevan, Aneurin (Ebbw Vale)Dukes, C.Grundy, Thomas W.
    Blindell, JamesDuncan, CharlesHall, F. (York, W. R., Normanton)
    Bowen, J. W.Ede, James ChuterHall, G. H. (Merthyr Tydvil)
    Bromley, J.Edge, Sir WilliamHamilton, Mary Agnes (Blackburn)
    Brooke, W.Edmunds, J. E.Harris, Percy A.
    Brothers, M.Edwards, E. (Morpeth)Hartshorn, Rt. Hon. Vernen

    The point that there should be two or more witnesses is not only supported by the law of Scotland, but it has much more ancient authority, for in the Sacred Book it says, "By the mouth of one witness thou shalt not condemn a man, but by the mouth of two witnesses, or three witnesses, shall a man be condemned." At the same time I agree with what has fallen from the Lord Advocate on this matter, which is not a crime in the serious sense of the word, but is a quite serious offence and one against which we should make provision. All that is said here is that it shall be lawful to convict a person of a contravention of Section 49 of this Act on the evidence of one witness. It does not prevent the court taking into account the whole strength of the case, and without a strong case they are not going to convict, and if there is anything that puts it beyond the reach of controversy that the offence really was committed, although there would be only one man who witnessed it. I do not think the least injustice is done and the whole matter is sufficiently safeguarded. The court will only convict if, notwithstanding the fact that there is only one witness, the case is sufficiently strong to leave no doubt at all in their minds that the offence was committed.

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

    The House divided: Ayes, 220; Noes, 83.

    Hastings, Dr. SomervilleMcElwee, A.Sexton, James
    Hayday, ArthurMcEntee, V. L.Shaw, Rt. Hon. Thomas (Preston)
    Hayes, John HenryMcKinlay, A.Shepherd, Arthur Lewis
    Henderson, Arthur, Junr. (Cardiff, S.)Maclean, Neil (Glasgow, Govan)Sherwood, G. H.
    Henderson, Thomas (Glasgow)McShane, John JamesShield, George William
    Henderson, W. W. (Middx., Enfield)Mansfield, W.Shillaker, J. F.
    Herriotts, J.Marcus, M.Short, Alfred (Wednesbury)
    Hirst, G. H. (York W. R. Wentworth)Marley, J.Simmons, C. J.
    Hirst, W. (Bradford, South)Marshall, FredSinkinson, George
    Hoffman, P. C.Mathers, GeorgeSitch, Charles H.
    Hollins, A.Matters, L. W.Smith, Ben (Bermondsey, Rotherhithe)
    Hopkin, DanielMelville, Sir JamesSmith, Frank (Nuneaton)
    Horrabin, J. F.Messer, FredSmith, Rennie (Penistone)
    Hudson, James H. (Huddersfield)Middleton, G.Smith, Tom (Pontefract)
    Hunter, Dr. JosephMillar, J. D.Smith, W. R. (Norwich)
    Hutchison, Maj.-Gen. Sir R.Mills, J. E.Snowden, Thomas (Accrington)
    Jenkins, W. (Glamorgan, Neath)Milner, Major J.Sorensen, R.
    John, William (Rhondda, West)Montague, FrederickStamford, Thomas W.
    Johnston, ThomasMorgan, Dr. H. B.Stephen, Campbell
    Jones, F. Llewellyn- (Flint)Morley, RalphStrachey, E. J. St. Loe
    Jones, Morgan (Caerphilly)Morrison, Herbert (Hackney, South)Strauss, G. R.
    Jones, T. I. Mardy (Pontypridd)Morrison, Robert C. (Tottenham, N.)Sutton, J. E.
    Jowett, Rt. Hon. F. W.Mort, D. L.Taylor, R. A. (Lincoln)
    Jowitt, Sir W. A. (Preston)Muff, G.Taylor, W. B. (Norfolk, S. W.,)
    Kedward, R. M. (Kent, Ashford)Murnin, HughTinker, John Joseph
    Kelly, W. T.Naylor, T. E.Tout, W. J.
    Kennedy, ThomasNoel Baker, P. J.Townend, A. E.
    Kinley, J.Oldfield, J. R.Vaughan, D. J.
    Kirkwood, D.Oliver, George Harold (Ilkeston)Viant, S. P.
    Lang, GordonOliver, P. M. (Man., Blackley)Walkden, A. G.
    Lansbury, Rt. Hon. GeorgePalin, John HenryWalker, J.
    Lathan, G.Parkinson, John Allen (Wigan)Wallace, H. W.
    Law, Albert (Bolton)Perry, S. F.Watkins, F. C.
    Law, A. (Rosendale)Pethick-Lawrence, F. W.Watson, W. M. (Dunfermline)
    Lawrence, SusanPhillips, Dr. MarionWellock, Wilfred
    Lawrie, Hugh Hartley (Stalybridge)Potts, John S.Welsh, James (Paisley)
    Lawson, John JamesPrice, M. P.Welsh, James C. (Coatbridge)
    Lawther, W. (Barnard Castle)Quibell, D. F. K.Westwood, Joseph
    Leach, W.Ramsay, T. B. WilsonWhiteley, Wilfrid (Birm., Ladywood)
    Lee, Frank (Derby, N. E.)Rathbone, EleanorWhiteley, William (Blaydon)
    Lees, J.Raynes, W. R.Wilkinson, Ellen C.
    Lewis, T. (Southampton)Richards, R.Williams, David (Swansea, East)
    Lloyd, C. EllisRichardson, R. (Houghton-le-Spring)Williams, Dr. J. H. (Llanelly)
    Logan, David GilbertRitson, J.Williams, T. (York, Don Valley)
    Longbottom, A. W.Roberts, Rt. Hon. F. O. (W. Bromwich)Wilson C. H. (Sheffield, Attercliffe)
    Longden, F.Romeril, H. G.Wilson, J. (Oldham)
    Lovat-Fraser, J. A.Rosbotham, D. S. T.Wilson, R. J. (Jarrow)
    Lunn, WilliamRowson, GuyWinterton, G. E. (Leicester, Louahb'gh)
    Macdonald, Gordon (Ince)Sanders, W. S.Young, R. S. (Islington, North)
    MacDonald, Malcolm (Bassetlaw)Sawyer, G. F.
    Macdonald, Sir M. (Inverness)Scurr, JohnTELLERS FOR THE AYES.—
    Mr. Charles Edwards and Mr. Paling.

    NOES.

    Acland-Troyte, Lieut.-ColonelGlyn, Major R. G. C.Roberts, Sir Samuel (Ecclesall)
    Allen, Lt.-Col. Sir William (Armagh)Gower, Sir RobertRoss, Major Ronald D.
    Amery, Rt. Hon. Leopold C. M. S.Greene, W. P. CrawfordRuggles-Brise, Lieut.-Colonel E. A.
    Ashley, Lt.-Col. Rt. Hon. Wilfrid W.Gretton, Colonel Rt. Hon. JohnSamuel, A. M. (Surrey, Farnham)
    Balfour, George (Hampstead)Gunston, Captain D. W.Sandeman, Sir N. Stewart
    Balniel, LordHamilton, Sir George (Ilford)Sassoon, Rt. Ron. Sir Philip A. G. D.
    Beaumont, M. W.Hannon, Patrick Joseph HenryShepperson, Sir Ernest Whittome
    Bourne, Captain Robert CroftHartington, Marquess ofSmith, Louis W. (Sheffield, Hallam)
    Bowyer, Captain Sir George E. W.Harvey, Major S. E. (Devon, Totnes)Smithers, Waldron
    Bracken, B.Henderson, Capt. R. R. (Oxfd, Henley)Somerset, Thomas
    Braithwaite, Major A. N.Heneage, Lieut.-Colonel Arthur P.Somerville, D. G. (Willesden, East)
    Brown, Brig.-Gen. H. C. (Berks, Newb'y)Herbert, Sir Dennis (Hertford)Southby, Commander A. R. J.
    Cayzer, Maj. Sir Herbt. R. (Prtsmth. S.)Horne, Rt. Hon. Sir Robert S.Stanley, Lord (Fylde)
    Chadwick, Capt. Sir Robert BurtonHoward-Bury, Colonel C. K.Stanley, Maj. Hon. O. (W'morland)
    Christie, J. A.Jones, Sir G. W. H. (Stoke New'gton)Titchfield, Major the Marquess of
    Culverwell, C. T. (Bristol, West)Lamb, Sir J. Q.Todd, Capt. A. J.
    Dalrympie-White, Lt.-Col. Sir GodfreyMacdonald, Capt. P. D. (I. of W.)Tryon, Rt. Hon. George Clement
    Davies, Dr. VernonMerriman, Sir F. BoydVaughan-Morgan, Sir Kenyan
    Davies, Maj. Geo. F. (Somerset, Yeovil)Monsell, Eyres, Com. Rt. Hon. Sir B.Wallace, Capt. D. E. (Hornsey)
    Duckworth, G. A. V.Moore, Sir Newton J. (Richmond)Ward, Lieut.-Col. Sir A. Lambert
    Edmondson, Major A. J.Morden, Col. W. GrantWarrender, Sir Victor
    Elliot, Major Walter E.Morrison, W. S. (Glos., Cirencester)Waterhouse, Captain Charles
    Falle, Sir Bertram G.Morrison-Bell, Sir Arthur CliveWells, Sydney R.
    Ferguson, Sir JohnMuirhead, A. J.Windsor-Clive. Lieut.-Colonel George
    Fermoy, LordNicholson, O. (Westminster)Womersley, W. J.
    Fielden, E. B.Oman, Sir Charles William C.
    Fison, F. G. ClaveringPeto, Sir Basil E. (Devon, Barnstaple)TELLERS FOK THE NOES.—
    Forestier-Walker, Sir L.Rentoul, Sir Gervais S.Sir Frederick Thomson and Sir
    Gibson, C. G. (Pudsey & Otley)Richardson, Sir P. W. (Sur'y, Ch'ts'y)George Penny.

    Clause 119—(Power To Provide Parking Places In, Scotland)

    Amendments made: In page 95, line 4, leave out the words "for the use of or."

    In line 9, after the word "under," insert the words "the foregoing provisions of."—[ The Lord Advocate.]

    Clause 120—(Interpretation)

    Amendments made: In page 95, line 28, at the end, insert the words:

    "'Public service vehicle' means a motor vehicle used for carrying passengers for hire or reward other than a vehicle which is a contract carriage within the meaning of this Act adapted to carry less than eight passengers or a tramcar or a trolley vehicle."

    In page 96, line 7, leave out the words "otherwise than upon a highway."

    In line 8, leave out the word "public."—[ Mr. Herbert Morrison.]

    I beg to move, in page 96, line 10, at the end, to insert the words:

    "'Highway authority,' in relation to any road, means the authority (being either the council of a county, the council of a county borough, the council of an urban district, the common council of the City of London, or the council of a metropolitan borough) which is responsible for the maintenance of the road."
    I am moving this Amendment in this new form in order to meet the Amendment which has been put down by the hon. Member for Royton (Dr. V. Davies) and other hon. Members. This is a new definition of "highway authority" in substitution for the one which appeared originally in the Bill. Certain representations have been made by the Municipal Corporations Association and the Urban District Councils Associations, and we have thought fit to meet their point of view. The Amendment which I now move meets their wishes.

    Amendment agreed to.

    Further Amendments made: In page 96, line 20, leave out from the word "and," to the end of line 24, and insert instead thereof the words:

    "for the purpose of proceedings for an offence in connection with any such vehicle against any person other than the driver of the vehicle, the person nominated on that behalf by the department in whose service the vehicle is used shall be deemed to be the person actually responsible unless it is shown to the satisfaction of the Court that the driver only was responsible."

    In line 28, after the word "years," insert the words "of age."

    In line 35, after the word "vehicles," insert the words:

    "owned by the Admiralty, the War Department, or the Air Ministry, and."

    In line 36, after the word "purposes," insert the words "or in the case of vehicles so used."—[ Mr. Herbert Morrison.]

    Clause 121—(Repeals)

    I beg to move, in page 97, line 7, after the word "Act," to insert the words

    "(including any local Act passed at any time in the present Session of Parliament)."
    Several local Acts passed during the present Session of Parliament contain provisions similar to those contained in earlier Acts which would overlap with powers, rights and obligations conferred by the present Bill. The extent of repeal should be saved in respect of the earlier Acts and those passed during the present Session, and this Amendment has been framed with that object in view.

    Amendment agreed to.

    I beg to move, in page 97, line 10, after the word "Act," to insert the words "(otherwise than by Part V thereof)".

    This is to make clear that the existing powers to run municipal omnibuses on certain routes which are possessed by local authorities shall not be taken away from them by Part V of this Bill. That is the sole purpose of the Amendment.

    I suppose there has been consent on the part of other interested parties.

    There are already in existence certain Acts which give local authorities a specific right to run on local routes, and it would not be the intention of the House to take away these rights. The only purpose of the Amendment is to make that clear. I think it will be found that all parties will co-operate with the traffic commissioners in the interests of co-ordination.

    Amendment agreed to.

    Further Amendments made: In page 97, line 11, leave out from the word "repealed," to the end of the Subsection.

    In line 15, leave out the words "(2) Subject as aforesaid," and insert instead thereof the words "Provided that."

    In line 16, leave out the words "or licences granted or certificates issued," and insert instead thereof the words "by the Minister."

    In line 18, after the word "repealed," insert the words:

    "or any licences granted under the Motor Car Act, 1903."

    In line 18, after the word "regulation," insert the word "or."

    In line 18, leave out the words "or certificate."

    In line 19, leave out the word "issued," and insert instead thereof the word "granted."

    In line 20, at the end, insert the words:

    "subject, however, to the following modifications and qualifications."

    In line 21, leave out the words "Provided that."—[ Mr. Herbert Morrison.]

    First Schedule—(Limits Of Speed)

    Amendments made: In page 99, line 14, after the word "not," insert the words "a heavy motor car or."

    In line 16, after the word "is," insert the words "a heavy motor car or is."—[ Mr. Herbert Morrison.]

    Second Schedule—(Provisions As To Applications And Inquiries Under Section Forty-Six)

    I beg to move, in page 101, line 24, to leave out from the word "inquiry," to the end of the paragraph.

    My object in moving this Amendment is to ask the Minister to reconsider the case of an inquiry which is set up by the Ministry to deal with applications under Clause 46. The wording proposed in the Bill is that the person holding the inquiry may refuse to hear any person, if he is satisfied that the views of that person have been adequately stated at the inquiry by some other per- son. If you are to have an inquiry it seems a unique thing to provide that the Board holding the inquiry may, if they think fit, not hear certain evidence. There are plenty of rules of procedure which make it impossible to have repetition of evidence, and any inquiry which is set up and is tactfully conducted could always refuse to hear evidence that is repeated over and over again. But it does seem to me that the rights of petitioners are going to be endangered if in the Bill you say that the person holding the inquiry may absolutely refuse to hear evidence if he thinks it is not necessary. I hope that the Minister will give some assurance that this power will not be abused. If you have an inquiry it is right that the person aggrieved should have a chance of being heard. An important point is that this particular Clause 46 is one of the Clauses that concern every village in the country. It is the Clause which gives the local inhabitants the right to appeal if the amount of traffic through the villages is such as to be a nuisance on the country roads. The whole House feels, I am sure, that there should be some safeguard to local inhabitants, and that they should be protected from an undue amount of traffic where that traffic is dangerous. I hope the Minister will consider whether he cannot modify the provision.

    These words in this Schedule are reproduced from the appropriate Schedule of the Roads Act of 1920, in respect to inquiries and applications for Orders under Section 7 (4) of that Act. These are applications for Orders restricting streets and so on, and clearly there could be witness after witness, person after person, seeking to give evidence which merely repeats the evidence which has been given before. If that were done, it would unduly delay the proceedings, without materially adding to the knowledge of the person conducting the inquiry. Therefore, it is provided that the person conducting the inquiry may refuse to hear any person if he is satisfied that the views of that person have been adequately stated at the inquiry by some other person. The hon. and gallant Gentleman may be sure that, in instructing the officers who are to conduct these in- quiries we shall be careful to inform them that they must not preclude, without careful consideration, any relevant evidence, and certainly they will enter these proceedings in that spirit and will be very careful not to exclude persons whose views have not already been heard.

    Then there is the other consideration, that if they did in fact exclude persons who brought new evidence and new views, we should be liable to actions in the High Court, presumably for not conducting inquiries in a proper manner. Therefore, I think these words should remain in, otherwise inquiries may be protracted and delayed, but the hon. and gallant Gentleman may be sure that, in administration, we shall endeavour to act in the spirit of what he has said and not with any desire to steam-roller people or arbitrarily to exclude them from these inquiries.

    In view of the hon. Gentleman's assurance, I beg to ask leave to withdraw my Amendment.

    Amendment, by leave, withdrawn.

    Fifth Schedule—(Enactments Repealed)

    I beg to move, in page 108, line 33, column 3, to leave out the words:

    "to which Part IV of this Act applies."
    This and the remaining Amendments to this Schedule in my name are all drafting Amendments.

    Amendment agreed to.

    Consequential Amendments made.

    Further Amendment made: In page 110, line 33, at the end, insert the words:

    "7 Edw. VII., C.53.Public Health Acts Amendment Act, 1907Section seventy-eight."
    —[Mr. H. Morrison.]

    Further consequential Amendments made.

    Bill re-committed to a Committee of the Whole House in respect of the Amendments to Clause 118, page 92, line 7, and Clause 119, page 95, line 19, standing in the name of Mr. Secretary Adamson as

    Amendments to be moved on re-committal.—[ Mr. Herbert Morrison.]

    Bill accordingly considered in Committee.

    [Mr. ROBERT YOUNG in the Chair.]

    Clause 118—(Special Provisions As To Scotland)

    I beg to move, in page 92, line 7, after the word "Act," to insert the words:

    "or for the purposes of Part V or of section one hundred and nineteen of this Act."
    This is consequential on the provisions of Part V of the Bill.

    Amendment agreed to.

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

    Clause 119—(Power To Provide Parking Places In Scotland)

    I beg to move, in page 95, line 19, at the end, to insert the words:

    "(10) Where in pursuance of the powers conferred by the foregoing provisions of this section a local authority provide a parking place which may be used by public service vehicles the local authority may, if it thinks fit, by order appoint that, parking place as a station for such vehicles, and where a parking place is so appointed the local authority may—
  • (a) with the consent of the Minister do all such things as are necessary to adapt the parking place for use as a station for public service vehicles and, in particular, provide and maintain waiting rooms, ticket offices, and lavatories and other similar accommodation in connection therewith; and
  • (b) make reasonable charges for the use of, or let on hire to any person, any accommodation so provided; and
  • (c) make regulations as to the use of any such acommodation.
  • (11) The provisions of sub-sections (4), (5), (6), and (8) of section eighty-nine of this Act shall apply to any order under the foregoing sub-section of this section in like friendly way and voluntarily to take sub-section (2) of that section."
    This again is consequential and deals with the powers of the local authorities in connection with parking places.

    Amendment agreed to.

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

    Bill reported; as amended on re-committal, considered.

    I beg to move, "That the Bill be now read the Third time."

    I think the House is generally familiar with the provisions of the Bill, which is probably the longest Bill of the Session. Part I deals with the law relating to the control of motor traffic and, I hope, will be conducive to the safety of the public in connection with the use of the roads. Probably the provision in Part I which has caused the greatest comment is the abolition of the speed limit. I have said that I do not think that that provision, in itself, will make any difference to the existing practice upon the roads, but I would like to appeal to the police authorities and to the magistrates to co-operate with the Home Office and the Ministry of Transport in securing the vigorous administration of the law and to administer firmly the new penalties which are being imposed by the Bill in the interests of public safety. I would appeal also to the motoring public to co-operate with the authorities in a friendly way and voluntarily to take every possible care to reduce the accidents upon the highway. Perhaps in that direction the greatest hope will lie.

    Part II deals with third party insurance, and that is familiar to the House. Part III deals with the amendment of the highway law; it includes provision for a code of conduct upon the highways, which I think will be exceedingly useful and conducive to good conduct; enables us, for the first time, to make grants towards a mobile police force; it enables us to codify notice boards on the highways throughout the country; and gives us powers for the regulation of traffic; and a very important Clause is added, for which some credit is due to the hon. and gallant Member for the Isle of Wight (Captain P. Macdonald) in connection with his own private Bill on the subject, which will give us very much greater powers towards the abolition of toll roads and toll bridges, and with reasonable economy to the local authorities.

    Part IV is the real industrial reconstruction Part of the Bill and, in my judgment, one of the most important pieces of legislation we have passed this Session. It will enable us completely to organise road passenger transport upon a sound basis, both in the interests of the travelling public and of the undertakers themselves, and will secure certain minimum conditions for the work-people engaged in the industry. The scandal of the long hours of labour of certain motor coach drivers, which is dangerous to themselves and detrimental to the public safety, will be stopped, and, for the first time, a condition for the granting of a licence for all public service vehicles will be that they will be required to observe the Fair Wages Resolution of the House of Commons in force on Government contracts for the time being. There are requirements as to the fitness of vehicles, and special provisions are included to meet the case of London.

    My attention has been drawn to the fact that some local authorities are granting licences on a rather wholesale basis at the present time, on the assumption that their functions will come to an end and that it does not matter much what happens. I want to appeal to the local authorities who are licensing authorities to exercise their powers with care and responsibility right up to the time when this Bill will come into force. In any case, if licences are irresponsibly granted or applied for, it must be made perfectly clear that the traffic commissioners will not be bound by the action of licensing authorities in the past, and least of all as regards licences to ply for hire which have been issued during the last few months.

    12 m.

    There is a very important Part of the Bill which is very pleasing to hon. Members on this side of the House who for many years, in company with some hon. Members opposite, have been fighting for the right of local authorities who are transport undertakers to run municipal omnibuses without coming to Parliament for powers in every specific case. That has been a fight for many years, and at last we have brought it to a successful end. There was provision in the Bill as it was introduced into the other House, and although this incorporates part of the Omnibuses Bill, which was introduced by my hon. Friend the Member for Mile End (Mr. Scurr), and was regarded as the really controversial part of the Bill, the curious thing is that in our illogical, but successful British fashion, we inserted that part of the Bill in about three-quarters of an hour in Committee with complete unanimity and after everybody on all sides of the Committee had congratulated each other on their common sense.

    Yes, after reasonable discussion with interests outside and with Members representing various parties, and after concessions had been given and taken on the various sides. These concessions enabled the Opposition to concur with us in what admittedly was something of a Socialistic advance—not the first Socialistic advance which has been supported by hon. Members opposite or even introduced by them. Therefore, we hope that the Bill, as amended, will be passed by this House and will rapidly pass into law with the co-operation of their Lordships' House.

    At this hour I am not going to say more than half-a-dozen sentences. The Minister has touched very aptly upon the chief characteristics of the Bill, and I think that we may, as a House, congratulate ourselves that this is not a party Bill. It is a Bill which represents the collective wisdom of the House as a whole, and it will, I hope, stand the test of time, and be the model of legislation in the next 20 years. It is a happy event that the only really big Bill of this Session should be a non-party Bill. I often think that it is not in the interests of real practical legislation that all parties should spend so much time in bringing in political Bills. Here we have an instance of a Bill which will really make road traffic easier and better. In my concluding sentence, I want to congratulate the hon. Gentleman upon the tactful way in which he has put his Bill through, in which he was so ably supported by the Solicitor-General.

    May I also add my congratulations to the Minister on the passing of a Bill which is a record in many ways. On the Report stage we have had as many Amendments as there are days in the year, and it is the only good Bill that the Government has passed this Session. That is due to the fact that it is a Tory Bill which the Government took over. The only portions of the Bill which we do not look upon as good are the parts which the Minister has put in, and upon which he congratulated himself. It is in many ways an omnibus Bill, because it includes the Omnibuses Bill, the Tolls Bill, and the Bill to prevent the theft of motor-cars. What the Bill does above all—and I think it is right—is that it gives the Minister very great powers to make regulations. Traffic conditions are constantly changing, and, instead of having to come to the House in future, the Minister can do a great deal by regulations.

    There are two questions I want to ask. The Minister has power to bring this Bill into operation on such day or days as he may appoint and he may fix different days for different provisions of the Bill. Does the Minister intend to bring Part I, which abolishes the speed limit, into operation immediately? He must have made up his mind by this time. Part II, which deals with third party risks, may require some little time. Is he going to bring that into operation at the same time or on 1st January? The Part that deals with road service licences, too, may require a little preparation. We ought to have time to prepare for the many changes that may be necessary, and I ask that he should give us fair warning.

    We have to look ahead, and provisions which are good to-day may be out-of-date to-morrow. Our roads are getting more and more congested and one of the most important features under the Bill will be the Road Code. When will that be presented to the House? I believe the Road Code will do more to save life than anything else in the Bill. I hope he will confer with the Minister of Education to see whether it will not be possible to get the Road Code—[HON. MEMBERS: "Set to music!"]—sent to all the schools, so that the children may know and understand the perils of the roads. [HON. MEMBERS: "Agreed!"] I am glad hon. Members agree. This has been the Cinderella of Bills, brought on at a late hour time after time—[Interruption.]— and I think it is unfortunate if we cannot have the opportunity of making a few remarks. [interruption.] The more hon. Members keep on the longer I shall keep on. It is not my fault that it is so late. I have not been talking on the Finance Bill. I hope the Minister will get the Road Code into force as soon as possible and that he will get it spread to all parts of the country, and explained in the schools, so that from earliest youth people may be brought up to understand the dangers of the road. As we know, the Bill is a compromise. The Pedestrians' Association object to certain parts of it, and motorists to other parts. One point to be emphasised is the new offences which are created and the decision that the evidence of only one witness shall suffice. That is a very great danger.

    Then there is the question of the danger from fire in public vehicles. The Minister has told us he has power to make regulations. The danger of fire is of great importance, and I think some provision should have been made to prevent the risk of fire in public vehicles. I have read the Bill through very carefully, and it does not contain a word about the danger of fire. I congratulate the Minister of Transport upon having had the courage to take over a Tory Bill and upon the prospects of bringing it into force.

    I am aware that hon. Members opposite want to go home, but we cannot part with this Bill without saying one or two words in the public interest. The Minister of Transport has, throughout the passage of this Bill, shown every desire to bring about compromises, and he has recognised the good work done by the Royal Commission. There is one Clause to which I desire to draw special attention, and that is the Clause dealing with the regulation of the wages and the hours of workers on the roads. An agreement was arrived at by the representatives of employers and the workers' organisations throughout the country, and it passed through as an agreed Clause. That is a good thing to have happened, and this is the first Bill where a provision of that kind has been put in by the common agreement of workers and employers.

    My own view is that too much attention has been paid to speed, and far too little attention to the control over vehicles. What really happens in the case of accidents through dangerous driving is that vehicles run at a speed which is too great when they have not full control over the vehicle. Young men and young women must learn that they cannot drive over the roads like mad. I am afraid that that will be the real danger. I appeal to the Home Office to realise that, in the initial stages of this Act, it is very essential that the penalties should be exercised with full rigour, and the Home Office should see that at dangerous places a fully qualified constable is placed to report reckless drivers, and run them in. We want to see the Bill operated in an efficient manner. I hope that everybody will see that, when the provisions of the Bill come into force, they will be properly observed and supervised. I congratulate the Minister on the passage of this Measure, and I am glad that he has recognised the responsibilities of the larger undertakings on the roads.

    As one who has given the Minister of Transport as much trouble as any other hon. Member during the discussions in Committee on this Bill, I want to congratulate the hon. Gentleman upon his prospects of getting the Bill through the House. The hon. and gallant Member for Chelmsford (Colonel Howard-Bury) said that this was a Tory Bill, and was the best Measure that the Government had introduced. My own view is that, although the earlier parts of the Bill have a Tory tinge about them, the latter parts dealing with labour are the best, and the Tories have had nothing whatever to do with them. I sincerely trust that we shall not find a great increase in the number of deaths from accidents in consequence of the abolition of the speed limit. I believe that there are about 100 hon. Members who fear that the result will be an increase in the number of accidents, but if the Minister finds that the number increases in consequence of the abolition of the speed limit, I hope that he will take his courage in both hands, and come to the House with a proposal to impose another speed limit.

    The hon. and gallant Member for Chelmsford (Colonel Howard-Bury) will not expect me to go into details now on the points that he raised, but, if he will put a question to me on Wednesday next as to the dates on which the various parts of the Bill will come into operation, I may possibly be able to tell him. I cannot be sure, but I will do my best. I cannot accept his view that the Bill as it now stands is a Tory Bill, or ever was; it is a very different Bill from that which was circulated by the last Government. Municipal omnibuses are there; Part IV is based on an entirely different scheme; fair wages, limited hours, and so on, are there; and I would not like my hon. Friends to be deceived by the hon. and gallant Member's observation, which I do not for one moment accept.

    Question, "That the Bill be now read the Third time," put, and agreed to.

    Bill read the Third time, and passed, with Amendments.

    Isle Of Man (Customs) (No 2) Bill

    Considered in Committee.

    [Mr. ROBERT YOUNG in the Chair.]

    Clause 1—(Repeal Of Lace Duty)

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

    I want to ask whether, as to the date mentioned in Clause 1, the House of Keys or Tynwald was consulted. The date mentioned is the 1st July, 1930, but we are now at a much later date, and I want to ask if they have been consulted as to the operation of this Lace Duty.

    May I ask if the Tynwald, on the 4th July, did decide this? In looking over the records, I cannot find any statement that they decided it, and it would seem that we are now passing something about which the Tynwald has not been consulted.

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

    Clauses 2 (Duties On Spirits), 3 (Additional Duties On Ale And Beer), 4 (Duty On Hydrocarbon Oils), 5 (Continuation Of Certain Duties) And 6 (Interpretation And Short Title), Ordered To Stand Part Of The Bill

    Schedule agreed to.

    I am sorry, but I have now collected the voices. If the hon. Member has any question to ask, he must ask it on the Third Reading.

    Motion made, and Question proposed, "That the Chairman do report the Bill, without Amendment, to the House."

    I want to ask whether it is not a fact that certain articles which are dutiable into this country are not dutiable into the Isle of Man, and, if that be so, what those articles are, and why they are not dutiable into the Isle of Man while they are dutiable into this country.

    Question put, and agreed to.

    Bill reported, without Amendment; read the Third time, and passed.

    Navy, Army, And Air Expenditure, 1928

    Resolutions reported,

    I. Whereas it appears by the Navy Appropriation Account for the year ended the 31st day of March, 1929, that the aggregate expenditure on Nary Services has not exceeded the aggregate sums appropriated for those Services, and that, as shown in the Schedule hereto appended, the net surplus of the Exchequer Grants for Navy Services over the net Expenditure is £160,954 9s. 6d., viz.:—

    £s.d.
    Total Surpluses302,925142
    Total Deficits141,97148
    Net Surplus£160,95496

    And whereas the Lords Commissioners of His Majesty's Treasury have temporarily authorised the application of so much of the said total surpluses on certain Grants for Navy Services as is necessary to make good the said total deficits on other Grants for Navy Services.

    1. "That the application of such sums be sanctioned."

    SCHEDULE.
    No. of Vote.Navy Services, 1928, Votes.Deficits.Surpluses.
    Excesses of actual over estimated gross Expenditure.Deficiencies of actual as compared with estimated Receipts.Surpluses of estimated over actual gross Expenditure.Surpluses of actual as compared with estimated Receipts.
    £s.d.£s.d.£s.d.£s.d.
    1Wages, etc., of Officers, Seamen, Boys, and Royal Marines, and Civilians

    employed on Fleet Services.

    8,858475,68932
    2Victualling and Clothing7,6174634,74434
    3Medical Establishments and Services.2,724624,812169
    4Fleet Air Arm
    5Educational Services4,230197582173
    6Scientific Services24,124837815
    7Royal Naval Reserves104179,30908
    8Shipbuilding, Repairs, Maintenance, etc.:
    Sec. 1. Personnel14,19111616,62148
    Sec. 2. Matériel3,1847340,39402
    Sec. 3. Contract Work9,031151171181
    9Naval Armaments31,9720957,662149
    10Works, Buildings, and Repairs.7,05318056,846137
    11Miscellaneous Effective Services.28,69811115,961710
    12Admiralty Office10,294235,5801111
    13Non-Effective Services (Naval and Marine), Officers.15,32621521910
    14Non-Effective Services (Naval and Marine), Men.22,0087918193
    15Civil Superannuation, Compensation Allowances, and Gratuities.8511801,7091811
    Balances irrecoverable and Claims abandoned.4,22380
    71,4617270,509176182,03449120,89195
    Total Deficits£141,97148Total Surpluses£302,925142
    Net Surplus£160,95496

    II. Whereas it appears by the Army Appropriation Account for the year ended the 31st day of

    March, 1929, that the aggregate Expenditure on Army Services has not exceeded the aggregate sums

    appropriated for those Services and that, as shown in the Schedule hereto appended, the net

    surplus of the Exchequer Grants for Army Services over the net Expenditure is £368,338

    15s. 3d., viz.:—

    £s.d.
    Total Surpluses943,38784
    Total Deficits575,048131
    Net Surplus£368,338153

    And whereas the Lords Commissioners of His Majesty's Treasury have temporarily authorised the application of so much of the said total surpluses on certain Grants for Army Services as is necessary to make good the said total deficits on other Grants for Army Services.

    2. "That the application of such sums be sanctioned."

    SCHEDULE.
    No. of Vote.Army Services, 1928, Votes.Deficits.Surpluses.
    Excesses of actual over estimated gross Expenditure.Deficiencies of actual as compared with estimated Receipts.Surpluses of estimated over actual gross Expenditure.Surpluses of actual as compared with estimated Receipts.
    £s.d.£s.d.£s.d.£s.d.
    1Pay, etc., of the Army344,740111014,61835
    2Territorial Army and Reserve Forces.144,8741993,949166
    3Medical Services24,8031189,86956
    4Educational Establishments12,52411122,259106
    5Quartering and Movements3,167143113,593158
    6Supplies, Road Transport, and Remounts.5,07213510,87480
    7Clothing7,8503022,26160
    8General Stores11,4956923,6151211
    9Warlike Stores118,760188103,38271
    10Works, Buildings, and Lands155,5644168,07426
    11Miscellaneous Effective Services.25,2192646,53138
    12War Office72771113,117152
    13Half-Pay, Retired Pay, and other Non-effective Charges for Officers.9,420179172,897167
    14Pensions and other Non-effective Charges for Warrant Officers, Non-commissioned

    Officers, Men, and others.

    15,2761971,580135
    15Civil Superannuation, Compensation, and Gratuities.531125,159119
    Balances Irrecoverable7,09886
    35,864160539,183171664,12309279,26477
    Total Deficits£575,048131Total Surpluses£943,38784
    Net Surplus£368,338153

    III. Whereas it appears by the Air Appropriation Account for the year ended the 31st day of

    March, 1929, that the aggregate Expenditure on Air Services has not exceeded the aggregate sums

    appropriated for those Services and that, as shown in the Schedule hereto appended, the net

    surplus of the Exchequer Grants for Air Services over the net Expenditure is £158,064

    11s. 9d., viz.:—

    £s.d.
    Total Surpluses485,55813
    Total Deficits327,49396
    Net Surplus£158,064119

    And whereas the Lords Commissioners of His Majesty's Treasury have temporarily authorised the application of so much of the said total surpluses on certain Grants for Air Services as is necessary to make good the said total deficits on other Grants for Air Services.

    3. "That the application of such sums be sanctioned."

    SCHEDULE.
    No. of Vote.Air Services, 1928, Votes.Deficits.Surpluses.
    Excesses of actual over estimated gross Expenditure.Deficiencies of actual as compared with estimated Receipts.Surpluses of estimated over actual gross Expenditure.Surpluses of actual as compared with estimated Receipts.
    £s.d.£s.d.£s.d.£s.d.
    1Pay, etc., of the Air Force180,0612950,84289
    2Quartering Stores (except Technical), Supplies, and Transport.52,854847,02932
    3Technical and Warlike Stores (including Experimental and Research

    Services).

    151,02313713,36043
    4Works, Buildings, and Lands143,20311787,19830
    5Medical Services13,594334,34610
    6Educational Services2,46408674173
    7Auxiliary and Reserve Forces20,03129105198
    8Civil Aviation49,98810011,2471010
    9Meteorological and Miscellaneous Effective Services.1,5321861,97290
    10Air Ministry6,12356138179
    11Half-Pay, Pensions, and other Non-effective Services.13,11819537553
    Balances irrecoverable and Claims abandoned.1,764146
    147,43269180,06129359,109101126,448112
    Total DeficitsTotal Surpluses
    £327,49396£485,55813
    Net Surplus£158,064119

    Resolutions agreed to.

    The remaining Orders were read, and postponed.

    It being after half-past Eleven of the clock upon Tuesday evening, Mr. SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.

    Adjourned at Twenty-four Minutes after Twelve o'Clock.