asked the Secretary for Mines if his attention has been called to the inquiry into the death of Horace Turner, who was gassed in Upton colliery on Whit Tuesday; and whether he can make a statement as to whether any prosecution is contemplated?

The evidence given at the inquest and the report of the divisional inspector are being examined, and if the hon. Member will repeat his question next Tuesday I expect to be in a position to reply.

asked the Secretary for Mines when the new code of regulations for mine lighting is to be put into force; and what the effect of these regulations will be?

These regulations were formally made on 1st June, and will be published with an explanatory memorandum in the course of a few days.

The general effect of the regulations will be to facilitate and require a substantial improvement in mine lighting. All safety lamps used at the working face and for other specified work in the face area must satisfy higher standards of candlepower, and these standards must be reasonably maintained in pit service. On haulage roads a carefully controlled extension of fixed electric lights is permitted subject to new conditions designed to ensure safety against the risk of explosion; and whitewashing at junctions, passbyes and other important traffic points, as well as machinery rooms, is made compulsory. Other provisions of the regulations deal with lighting at the surface and at shaft insets and sidings.

One part of the regulations comes into force on 1st July and the other parts on 1st September, except that a period is allowed for the replacement of the large number of safety lamps now in use which fall short of the new lighting standards.

I take this opportunity to express my appreciation of the effective work done in many quarters—some outside the industry itself—which has combined to make possible a measure which I believe will prove to be a notable one in the history of health and safety legislation.

Will the hon. Gentleman tell the House what the standard of comparison is or what period of time is allowed during which the improved standard will come into operation?

The hon. Member had better wait the publication of the regulations for an answer to his first supplementary question. The period allowed for replacement of existing lamps is two years four months from the 1st September; that is, until the 30th December, 1936.

When the Minister is substituting lamps of higher lighting power for lamps of less illuminating power, will be make provision, where electric lamps are substituted for oil lamps, that there is a sufficient number of oil lamps or automatic gas protectors installed?

There are other regulations dealing with that point to be considered.

Has any appeal been made to arbitration by either masters or men?

No, as the time allowed under the law has elapsed.

Will the new system of lighting prevent nystagmus?

That is one of the reasons for it.

asked the Secretary for Mines how many inspections have been made this year at the Arley Mine, Parsonage Collieries, Leigh; and will he give the date of the last one and the conditions prevailing, dry and wet bulb temperature readings?

Four inspections have been made in this seam by His Majesty's Inspectors of Mines during the present year, the latest being on 17th May. On that occasion the temperatures at the face in the deepest part were 104° to 106° dry bulb, 80° to 83° wet bulb. These readings indicate that the air was relatively dry, and its cooling power was found to be good. Efforts are being continued to reduce the temperature of the workings, and work is in progress with a view to improving still further the ventilation at the face.

When the inspector makes an examination does he make any inquiries from the management as to the effect which the temperature has on the men where any men have been overcome by the heat and have to be brought out?

The inspector will take everything into consideration when he makes an examination. Four examinations have been made during the present year.

Is the Minister aware that yesterday a case was heard before the court of referees, in which a man had fainted twice and had to be brought out on both occasions and was once unconscious for two hours; and that the court of referees granted him unemployment pay, which goes to prove that the man was justified in not working in such conditions?

The hon. Member had better put that down.

When they are investigating the effects of higher temperatures in the deep mines, will they also pay special attention to the effect of increased atmospheric pressure on the health of the men?

That is done. There is a committee under a distinguished chairmanship which has given continuous examination to this subject for years, and there are several reports.

Is the number of men affected taken into consideration?

The number of men is very large.

I have a letter here from the secretary of the branch of the Miners' Union, and is it not the case that in this particular mine it is so hot that they cannot get the horses to work right up to the face where this man fainted as a result of the heat?

The factor which is taken into consideration as regards the health of the men is not the dry bulb temperature, but the wet bulb, and, as I have said in previous replies, it is the considered opinion that it is not adverse to the health of the men.

asked the Secretary of State for Dominion Affairs whether he can give the House any information as to the result of the application made by the wool textile industry to the Canadian Tariff Board for a lowering of Canadian import duties on wool textiles?

I understand that the Canadian Tariff Board have not issued any definite findings as a result of their inquiry into the Canadian import duties on certain wool textiles. My right hon. Friend has not yet received the Board's interim report on the subject, but, when he does so, he will send a copy to the hon. Member for his information.

asked the President of the Board of Trade whether his attention has been called to the fact that the Danish Government has refused to grant import licences to Danish nationals who desire to import British goods into Denmark, notwithstanding the large trade balance in favour of Denmark as against Great Britain; and what action has been taken by the British Government in the matter?

The action of the Danish Government in reducing the value of licences for the import of certain United Kingdom goods during the first four months of the present year has already been the subject of representations to that Government.

Can my hon. Friend say what is the result of these representations and whether it does not seem unneighbourly, to say the least, that this embargo should be put on our goods when there is a trade balance in favour of Denmark and we take such a large amount of their agricultural supplies?

All these points are being borne in mind, but we had better wait for the reply.

Was the action of the Danish Government within the four corners of the Trade Agreement?

It is in reference to that point that the representations have been addressed to Denmark.

How long ago did we make representations to the Danish Government?

The representations have not been replied to in full to the satisfaction of His Majesty's Government. I do not know whether there is any point as to the actual date; if so, I will ascertain it and communicate with the hon. Gentleman.

asked the President of the Board of Trade if he can give any information as to the progress of the negotiations with Poland for a trade agreement; and when he anticipates their conclusion?

Commercial negotiations with Poland have not yet begun but it is hoped to start them this month.

asked the President of the Board of Trade whether he proposes to take any action with a view to providing machinery for the more satisfactory definition of trade descriptions?

My right hon. Friend has consulted a number of trade associations on the subject and hopes shortly to introduce a Bill dealing with it. Whilst it is, he fears, unlikely that it will be possible to proceed with the Bill this Session, he is anxious to give the various interests concerned full opportunity of considering its provisions.

asked the President of the Board of Trade if his attention has been called to the sale of pedal-bicycle covers and tubes of foreign origin offered for sale at 6d. each in Birmingham and other centres in the Midlands; and if any steps are being taken to safeguard more adequately the production of these articles in this country?

My right hon. Friend's attention has not hitherto been called to the circumstances referred to. The question of any increase in the protection given to the home industry is, in the first place, a matter for the consideration of the Import Duties Advisory Committee.

Will my hon. Friend have inquiries made to ascertain whether the offer of these covers and tubes at this particular price is a spasmodic action on the part of some foreign country, or is to be continuous in our markets?

Has the hon. Gentleman any power to make such inquiries in view of the existence of the Advisory Committee?

Certainly there is power to make all and any inquiries when a matter is brought to the attention of the President of the Board of Trade, and inquiries will be made to see whether this incident is sporadic and spasmodic or whether it is likely to be permanent. The import of these articles is at the rate of something like 300,000 in a normal year, by contrast with a home production of nearly 7,000,000, so that it is a small import.

Can the hon. Gentleman say what the importation of pocket knives in Sheffield from the same source amounts to?

asked the Financial Secretary to the War Office on what date the appointment of the present military secretary to the Secretary of State for War was made; the date on which he took over his duties and the period for which his appointment has been made; and the date on which the previous holder of the appointment took office, the length of the term of the appointment, and the date on which it was terminated?

The present military secretary was selected, and his appointment announced in the Press, in November, 1933. He assumed the appointment, which is for four years, on 1st June, 1934. His predecessor held the appointment for the usual term of four years from 1st June, 1930.

asked the Financial Secretary to the War Office whether officers, non-commissioned officers, and other ranks borne on the strength of the Territorial Army are at any time permitted to wear the uniform of the political organisation known as the British Union of Fascists?

Officers and other ranks of the Territorial Army, when not undergoing training, are in the same position as civilians with regard to political organisation, except that they may not attend political meetings in military uniform.

Will my hon. Friend bear in mind the unfortunate effect upon public opinion when persons who are known to be Territorials appear in the streets wearing the uniform of a political organisation which is constantly provoking civil disturbance?

Will the Minister inform the House whether it is permissible for military decorations to be worn along with political uniforms, and, if not, will he take the necessary steps to deal with the offenders?

That is another question, of which I ought to have notice.

Will the War Office consider whether any member of the Territorial Force can serve two armies at once?

Will it be permissible for the members of that organisation to distribute the literature of their political party when engaged on Territorial duties?

asked the Secretary of State for Scotland if he is aware that the Fife County Council are violating the Act of 1924 by refusing to exempt the first 7s. 6d. a week of health insurance benefit when assessing the incomes of applicants for relief; and will he take action to compel this local authority to conform to the law, or any other authority which is similarly at fault?

The allegation that Fife County Council were not observing the requirements of Subsection one of Section 105 of the National Health Insurance Act, 1924, was recently brought to the notice of the Department of Health, who are at present in communication with the county council. With regard to the second part of the question I would refer the hon. Member to my supplementary answer on this subject given to the hon. Member for Gorbals (Mr. Buchanan) on the 8th March, of which I am sending him a copy.

Arising out of the first part of the reply, in the event of the Fife County Council not acting according to law, as they are asked to do in a communication from the Scottish Office, what action will the Scottish Office take?

A specific case has arisen with regard to one individual, and where those are the circumstances the proper course is to appeal against inadequate relief, which I understand is the course which has been taken here. With regard to the general subject, perhaps my hon. Friend will be good enough to read the supplementary answer to which I have referred and put down another question if that does not make the matter clear to him.

Can my hon. Friend say what connection the Fife County Council has with Dumbarton Burghs?

If I put down a question for next week, will the hon Gentleman then be in a position to give me an answer?

I think if the hon. Member will read my answer, he will see what the position is.

Would the hon. Gentleman not be more likely to give an answer to an hon. Member who sat for Fife?

asked the Secretary of State for Scotland if he will add to the terms of reference of the newly constituted committee of inquiry into vagrancy in Scotland an instruction that the committee shall ascertain, as far as possible, the percentage of Vagrants, and other persons of the wayfaring classes at present living in Scotland, that are of Irish birth and the percentage that are Scottish born but of Irish parentage, respectively?

My right hon. Friend does not propose to accept my Noble Friend's suggestion.

Is my hon. Friend aware that the population of many poor houses in Scotland at certain seasons of the year comprises 75 per cent. and upwards of persons born in the Irish Free State, and does he not think that requires some investigation?

The present committee has been charged with the investigation of the conditions under which vagrants and other persons of that class are at present living in Scotland, and no doubt if the committee, in the course of their investigation, take the view that it is necessary to obtain information as to the number of vagrants of any particular nationality they will do so.

Are they not all fleeing from de Valera—or most of them?

asked the Secretary of State for Scotland the weight and value of white fish landed at Aberdeen by British and by foreign boats, respectively, in the first five months of 1932, 1933 and 1934?

As the answer involves a table of figures, I propose with the hon. Member's permission to circulate it in the OFFICIAL REPORT.

asked the Secretary of State for Scotland whether he will give particulars of the returns made by local authorities up to date to the Department of Health of the number of houses to be erected during the five years 1934 to 1938, respectively, to replace houses unfit for habitation, to accommodate persons living under overcrowded conditions, and for others of the working classes, such as married persons living with relatives, or in sub-lets or in lodgings, and persons desirous of getting married for whom accommodation is not likely to be available?

According to the returns received from all but eight local authorities in Scotland it is estimated that there will be provided during the five years referred to 44,222 houses to replace unfit houses, 24,160 to abate overcrowding, and 6,299 to meet other needs. In addition 1,002 houses have yet to be allocated among these purposes, making a total of 75,683 houses likely to be provided.

May I ask whether the hon. Gentleman is satisfied with the total?

I am never satisfied with anything short of perfection, and there are still some local authorities whose programmes I am taking measures to try to increase.

asked the Secretary of State for Scotland if he will give an estimate of the financial commitments of the Government under the Housing (Scotland) Act, 1930, for subsidy in replacing houses unfit for habitation; under the Housing (Financial Provisions) (Scotland) Act, 1933, for subsidy in re-housing persons now living in overcrowded conditions; and which would be incurred by the provision of a subvention to local authorities for housing others of the working classes whose needs cannot now be met?

The estimated financial commitments of the Government are £336,950 per annum for 40 years in respect of houses to replace unfit houses approved up to the 8th June under the Housing (Scotland) Act, 1930; and £2,823 per annum for 40 years in respect of houses to abate overcrowding approved up to the same date under the Housing (Financial Provisions) (Scotland) Act, 1933. My right hon. Friend regrets that he is not in a position to give the estimate desired in the last part of the question.

Is it not the case that local authorities in Scotland are not taking advantage of the 1933 Act?

Not very great advantage has been taken of that Act so far as it intends to deal with overcrowding, but my hon. Friend is aware that consideration is being given to the question of further proposals with regard to overcrowding.

asked the Secretary of State for Scotland whether he has considered the resolution from the annual meeting of the Scottish National Housing and Town Planning Committee at Peebles on 2nd and 3rd March regarding the impossibility in Scotland at present of building houses for the working class at reasonable rents and the inadequacy of the annual Government grant to local authorities under the Act of 1933 for housing low wage earners in overcrowded conditions, and urging more Government assistance; and whether he will now recommend an increased Government grant and also submit proposals for renewal of local authorities' activity upon ordinary housing with suitable Government aid?

The answer to the first part of the question is in the affirmative. As regards the second part, my right hon. Friend is at present actively engaged in considering what additional measures are necessary for the provision of further houses to abate overcrowding in Scotland.

Will my hon. Friend give me a reply to the last part of the question, which I think he must have overlooked?

It is not intended to make special provision' by the State for the supply of ordinary houses. Already several local authorities in Scotland are providing such houses without subsidies.

Would there not be plenty of houses in Scotland if the Irish were all repatriated?

asked the Minister of Labour whether it is the intention of his Department that public assistance committees should have discretion to increase by 10 per cent. transitional payments now being made to meet the scale of needs after 1st July assuming the need remains unchanged?

I would refer the bon. Member to the statement made by my right hon. Friend the Chancellor of the Exchequer on 23rd April in the Committee stage of the Unemployment Bill.

Could not my hon. Friend say clearly whether it is the fact that a public assistance committee has those discretionary powers? Would it not relieve a great deal of anxiety?

I hope the hon. Member will read the statement made by my right hon. Friend.

Can my hon. Friend say "Yes" or "No" to the question I put to him?

asked the Minister of Health how many cases on transitional payments in the West Riding County Council have received relief from the public assistance committee with doctors' notes, and how many have received relief without doctors' notes?

The total number of cases in receipt of transitional payments supplemented by poor relief in the administrative county of the West Riding of Yorkshire was 2,121 during the week ending the 10th February, 1934. My right hon. Friend regrets that he has no information as to the numbers in each of the categories mentioned by the hon. Member.

asked the Minister of Labour the position of unemployment in the rural areas of Norfolk, with particular reference to the labour available for hoeing sugar-beet?

The numbers of workpeople registered for employment at local offices in rural areas in Norfolk on the 4th June were 1,545 men, 299 women and 81 juveniles, making a total of 1,925. Of these, 98 were considered suitable for sugar-beet hoeing.

Can the Minister say whether any labour has been imported from outside areas?

I understand that in one case in Norfolk a request was made for men to be brought from Durham, and steps were taken to comply with the request.

Before the hon. Gentleman replies to my question, may I ask if he is aware that I wrote to the hon. Member for Gorbals (Mr. Buchanan) telling him that the question was being asked to-day?

No steps have yet been taken to select any of the members of the Statutory Committee, and there is consequently no foundation for the rumour to which my hon. Friend refers.

I would like to ask the hon. Gentleman, as representing the Ministry of Labour, if anyone has suggested that the hon. Member for Gorbals (Mr. Buchanan) has been officially invited to take part in this Statutory Committee?

Is the Minister aware that, according to the "New Leader" last week, the hon. Member for Gorbals definitely stated at the Merthyr by-election that he had been invited by a representative of the Government to take up this position?

Is not the hon. Member for Plaistow (Mr. Thorne) completely misinformed?

Does the Minister not think that the hon. Member for Gorbals (Mr. Buchanan) would make a very good Member?

I repeat that no steps have been taken to select any members for this Statutory Committee?

May I ask if the statement made in the question is correct, that appointments are to be made by the Trades Union Congress General Council?

Would they not make a very foolish selection?

asked the Minister of Agriculture if he is satisfied that the best possible provision is being made in Wales for the creation of allotments for the unemployed; and, if not, what steps he is taking to stimulate action in this direction?

I have no reason for thinking that the demand for allotments on the part of unemployed persons in Wales is not being met so far as is practicable. If, however, my hon. Friend has any information to the contrary and will let me have the necessary particulars, I will gladly look into the matter.

asked the Chancellor of the Exchequer whether the British Government pledged itself to repay in gold any, or all, of the £500,000,000 borrowed from the United States of America during 1917–18; and, if so, at what notice?

The obligations given by His Majesty's Government were payable in gold dollars, but all provisions of this nature are subject to the United States legislation of 5th June, 1933, under which every obligation is payable in legal tender dollars. The advances referred to were repayable either at very short notice, or, in the great majority of cases, at demand; but, as stated in the reply given to my hon. and gallant Friend on the 5th June, they were funded in 1923.

asked the Chancellor of the Exchequer of he will state the total assistance granted from the British Exchequer, either by grant or remission of duty, to the sugar industries in British Dominions and Possessions since 1918?

The approximate cost to the Exchequer of the preferential abatement of duty on Empire sugar and molasses during the period of over 14 years from the 1st September, 1919, when preference was introduced, to the 31st March, 1934, was £28,853,000. In addition grants amounting to approximately £21,300 have been made from the Colonial Development Fund and the Empire Marketing Fund to certain Colonial Governments for the purpose of sugar research and schemes benefiting the sugar industry.

asked the Chancellor of the Exchequer whether he is aware that it is the practice of inspectors of taxes to issue annually to bankers, solicitors, and others, forms requiring returns to be made of all sums of interest received by them on behalf of clients or customers, and thereafter to issue notices of assessment to Income Tax on such sums; that inconvenience and loss is caused by the fact that such forms are issued only once in each year; and whether he will instruct inspectors of taxes to issue such forms quarterly, and also to authorise the inspectors of taxes at any time on production of certificates of interest collected to assess the Income Tax thereon, and issue notices of assessment and receive payment of the tax?

I assume that the hon. Member refers to the returns required under Section103 of the Income Tax Act, 1918. I am not aware that the existing procedure under which the return forms are issued annually causes inconvenience and loss. Under the provisions of the Income Tax Acts the assessments are made annually, the basis of assessment is normally the amount arising in the preceding year, and the tax is payable in one sum on 1st January. In these circumstances an annual return is clearly appropriate, and I see no reason for any such changes in the law as the hon. Member's proposals would involve.

asked the Chancellor of the Exchequer in view of the confusion which exists regarding land taxation and the unanimity of opinion as to the justice of a tax on increment values, he will take steps to clarify the existing position and introduce legislation to effect an increment values tax?

I cannot make any promise such as my hon. and gallant Friend suggests.

asked the Financial Secretary to the Treasury what sum has been collected since the duty on oats was raised to 3s. a cwt.?

The approximate amount of duty collected on oats in grain from the 13th January, 1934, when the duty was 3s. a cwt. came into operation, to the 30th April, 1934, the latest date to which information is available, is £122,000.

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

The object of the Clause is to lessen the rate of duty where an estate has been insured. At present if you want to insure against Death Duties, the value of the insurance is added in calculating the Death Duties, a most unfair burden as it seems to many of us, and this merely seeks, not to relieve the insurance from taxation altogether but only to tax it on its merits. I want to approach the subject from an agricultural point of view. It is always acknowledged that the Death Duties hit agricultural land even more than any other. I suppose it is the general desire of everyone that future generations should have a fair start free of debt. I suppose that everyone will agree that businesses should not be suddenly crippled by a large amount of capital being withdrawn, that workers dependent on the development of the land should not be thrown suddenly out of a job, and that our countryside should not be impoverished and destroyed as is being done all over the country at present. The lightening of the burden of Death Duties on agricultural land has been approved by successive Chancellors of the Exchequer, including the Socialist Chancellor, but it is still a burden which must stop development and is injuring employment on the land to a far greater extent than is realised. Can we not find some way of insuring against these upheavals? We insure workmen against accident, against old age and against unemployment. Why can we not insure against the causes of unemployments It is, surely, worth considering, and it is in line with much of our legislation to-day.

The five years census of agricultural output just issued by the Ministry of Agriculture shows the state of affairs. It shows the estimated gross rental value, the estimated total capital value of the land and the estimated tenants' capital employed in the land, comparing 1931 with 1925, when the last census was taken. The total capital value of the land, which in 1925 was £815,000,000, is now £645,000,000, or a drop of 21 per cent. Rents were 13 per cent. lower in 1931 than in 1925. If we compare the total tenants' capital employed, we find that £365,000,000 has gone down to £280,000,000, or a drop of 23 per cent. If you add the drop in the capital value of the land, which is nearly all the owners' value, and the capital value of the tenants, it comes to £170,000,000. Is that a situation that we can go on contemplating with equanimity? Of that £170,000,000, we can only accuse the Death Duties of having taken £2,000,000 a year, or about £10,000,000 in the five years. The damage due to the decrease of £170,000,000 in the value of land is almost incalculable. What are people going to do to develop their estates? Is it worth while planting the hillside with trees, and spending money in building cottages and employing labour and so on? Is it worth while when money is given to other people instead of being spent on agriculture? Is not the old labourer, who for generations has been on an estate, in despair for fear the estate should suddenly have to be broken up? This is all the indirect effect of these Death Duties which we desire to minimise.

The suggestion in the Amendment is a very simple one. We should like to see something a great deal bigger. I know that the Chancellor of the Exchequer is very sympathetic towards it. Surely these figures show the effect of the heavy burden of Death Duties in respect of the Chancellor's annual Budget. If he wants to keep up his receipts from Income Tax he must be careful not to overdo it in the way of Death Duties. It has always been the pride of this country that our National Savings Certificates are so well supported by millions of people in this country. The creation of the desire for saving in the minds of the people is a great asset to the Chancellor of the Exchequer. It has been a very great asset in the troubles which we have had to face during the last three or four years. An enormous capital sum is invested in national savings. I desire the question to be looked into, as I think the principle should he supported. If you put away money for a particular object such as Death Duties, even if it is insurance like the National Health Insurance, it should be devoted to the object for which it was put away and not spent for other purposes. This is a sound principle in regard to insurance and national savings, and it would he equally sound for a person to be able to insure against Death Duties.

Personally I much prefer the Clause which was put down in the name of 34 other hon. Members and myself, but as that Clause was passed over, I desire to support the present Clause which is a step in the same direction. The Clause which we put down excluded altogether from Death Duties the amount covered under an insurance policy to pay those duties. This new Clause provides that the amount covered under an insurance policy to pay Death Duties should be treated as a separate estate and should not be aggregated with the main estate. We do not ask the Chancellor of the Exchequer to make the same allowances with regard to Income Tax in the case of the premium paid for these policies to pay Death Duties. The Clause contemplates a special insurance for a special purpose and for no other, and, if necessary, the insurance can be taken out in the name of the Chancellor of the Exchequer. A person who insures against the payment of Death Duties now is doubly penalised. Not only has he to pay a large premium during his life, but on his death the amount of the insurance is added on to his estate, and not only has duty to he paid on the amount of the insurance in addition to the duty on the total of his estate, but very often the extra sum received from the insurance company towards paying the duty puts the estate in a higher category than would have been the case before. Consequently, practically no one takes out insurances of this kind. This is a point which makes it impossible for me to believe that it will cost the State anything if they accept the Amendment. If it had been the habit of people in this country to take out large insurances to pay Death Duties and the State had been accustomed to reap the additional duty on the insurance, it might perhaps have been said that it might involve the State in a loss. That has not been the case. People have not done it because of the penalties that would be inflicted upon them if they did so.

The object of the Clause is to encourage people to take out these insurances so that their estates shall not be broken up as they are to-day. Everybody agrees that it is inadvisable on the part of an individual to live on his capital, and what is true of the individual is equally true of the State, and yet we see week by week and month by month the State taking half, a quarter, or a third of the estate of a deceased person and using it very largely for the day-to-day expenditure of the State. Successive Chancellors of the Exchequer have admitted the evil of this, but nothing has been done. The Amendment on the Paper enables something to be done, for at no loss, or at any rate very trivial loss, to the Exchequer, these levies on capital can be replaced by an annual payment by the individual. My hon. and gallant Friend has dealt at length with the injury which these Death Duties have inflicted on landed property throughout the country. Farms have had to be sold to strangers and old farmers have often been turned out, and staffs generally reduced, thereby causing serious hardship.

While these duties are bad for all businesses and all trades, there is one particular industry which they more seriously affect perhaps than anything else, with the exception of agriculture, and it is tramp shipping. If my hon. Friend the Financial Secretary to the Treasury will refer to his colleague at the Board of Trade, he will find that he will confirm every word of what I am about to say. There is nothing which has so seriously affected tramp shipping in this country, one of our greatest industries, than the Death Duties. It so happens that nearly all the tramp shipping in this country is held either by families or by individuals, and in the past it was their practice to build up reserves so that their fleets could be continually renewed, but, owing to the succession of Death Duties payable by themselves and their families, it has not been possible to accumulate these reserves. Although they have been seriously hit recently by subsidies given to foreign shipping they might have been able to meet this competition if they had been able to provide reserves for the building of new fleets, as they would have done but for the effect of Death Duties. If they had been able to set aside an annual sum out of their profits to meet Death Duties, the tramp shipping of this country would have been in a very different state to what it is to-day. All this could have been obviated by an annual payment to an insurance company.

I submit that insurance against Death Duties will be a benefit not only to the individual family but to the community and to the State. First of all, the Chancellor of the Exchequer would be paid at once on the death of the individual the whole sum from the insurance company without having to wait for years, as is often the case now. The Financial Secretary in refusing an Amendment yesterday said that it was one of the incidents of the system of taxation attaching to Death Duties that you had to fix the value of an estate at the moment of death, and that all sorts of hardships were occasioned because circumstances might occur after the death, as a result of which an estate which was valued at £2,000 at death might only realise £400 or £500 by the time the property came to be sold. That is another difficulty which would be obviated. The family benefits by not having a forced sale of shares, or bonds or business in order to find the Death Duties, and, thirdly, and most important, it would be for the benefit of the community as a whole. I have often heard it suggested by hon. Members opposite that Death Duties are a matter which only concern the rich and the wealthy, and that they do not interest wage earners or the general public. This is a profound mistake, because actually while they are not a very serious hardship on the individual who succeeds to a large estate, he is probably a great deal better off than before, they are an incalculable hardship on a number of people who may be dismissed or who are in some way affected. [Interruption.] It is no use hon. Members objecting; it is a fact; it is an, incidence of this system of taxation.

I think the hon. Member is travelling rather wide of the Clause.

I am trying to show the desirability of the proposal to insure against Death Duty and the harm the present system of taxation creates. However, I will pass from that. My point is that Death Duties are eating into the capital reserves of the State and the State being only the sum total of individuals who compose it, it means that the total capital of the nation is being used up. From the year 1925–26 to 1932–33 no less than £600,000,000 was paid in Death Duties, and during the same period, and largely by the same parties, £2,600,000,000 was paid in Income Tax and Surtax. I suppose the Financial Secretary will tell us again that while he sympathises with the proposal he regrets that he is unable to accept it because it will involve the State in a loss. I hope he will clearly explain how that will be brought about; it has not been explained. If people had been in the habit of taking out this insurance I could understand the State being involved in a loss, but as they have not been doing so I cannot see how it does. It may be said that the Government cannot differentiate between one kind of saving and another, but this is not a saving in the sense that it benefits the family, it is to keep the estate in the same level and not have it broken up. In April of last year a writer in the "Times" put in a startling way the bare effect of these Death Duties. He pointed out that 13 large estates had recently been admitted to probate, the Death Duties on which amounted to £23,500,000.

On a point of Order, may I ask whether it is in order now to discuss the whole effect of Death Duties on a new Clause in Committee stage or whether we are discussing whether insurance should be included in the estate?

I was at the moment about to rise to point out to the hon. Member for South Kensington (Sir W. Davison) that we cannot discuss the whole policy of Death Duties. I think he is entitled to argue that it is a good thing to insure against them, and that the new Clause facilitates it, but that is as far as we can go.

I have made my point, to show how desirable it was that these estates should have been covered by insurance, because then the £23,000,000 would not have been paid out. That is my point. It would have been much better for the State if these large estates had been insured and kept intact, as they would then have continued to pay tax on an annual income of £1,175,000. It is the same thing as in the case of an individual, who might spend £23,000,000 in three or four years and sacrifice £1,175,000 a year. You would call such a person a spendthrift. I am asking the State to behave in the same way as we expect any reasonable individual to behave. If we take a long view there is no class more interested in seeing that Death Duties are insured against than those who make a special claim to look after those who receive benefit from our social services. If you continually reduce these estates——

The hon. Member is again going outside the Clause.

It is a little difficult to keep strictly to the Clause, but as I have made my case fairly clear I will be content. From the point of view of those concerned with maintaining our social services it is clearly advantageous for those services as well as in the best interests of the State to pass such a Clause as this, which will enable those who have to pay Death Duties to insure against them and so avoid the breaking-up of their estates.

I should like to explain to the Committee the reasons why we are moving the new Clause. I support it for several practical reasons. I have followed the profession of a solicitor, and have had to deal with the difficulties of estates where they consist not of liquid assets but of a variety of forms of property, and it is undoubted that the necessity for some such provision as this increases with every increase in the rate of Death Duties. In years gone by it was not a serious matter that an estate should have to meet the withdrawal of a portion of its liquid assets, but, as every year goes by and Death Duties increase, the rate is so great that there is hardly any estate left by a person engaged in agriculture or in business which is so situated on the death of the person that it can with safety to the estate and to the State meet a withdrawal of the liquid funds necessary for the payment of Death Duty.

In the assessment of Death Duties the range of the duties, of course, increases with the value of the estate, but there are provisions whereby certain portions of the estate are not aggregated with the main estate. In other words, if you can separate such portions of the estate from the main body of the estate, you do not thereby increase the rate of duty upon them. If an estate consists of mills, machinery, real estate and property of that kind, in order to make it possible to carry it on, it has to have a certain amount of liquid money. I think that the Committee will see that such a state of affairs must exist in every estate where a person is engaged in business operations, and the same would apply if he were engaged in agriculture. What happen when such a person dies? Immediately there is withdrawn the pillar of support from the estate or business, and, in addition, you withdraw from the estate a tremendous amount, proportionately, of the liquid assets which are necessary to keep the estate going.

I would like hon. Members opposite particularly to notice this, because when a previous speaker was explaining, they seemed rather to dissent from the fact that such a state of affairs could have any hardship upon those connected with an estate. In a business such as I have outlined, in addition to the withdrawal of the pillar of the business through death, there is the withdrawal of a huge amount of liquid cash. Death Duties must always be paid, and, as a rule, when probate is applied for, almost before anyone can handle the estate, sell any portion of the estate or deal with the property Death Duties have to be paid to the Treasury. In the case which I have outlined you get an immediate draft upon the business. In many cases in recent years practically the whole life blood of the business has been withdrawn to meet Death Duties, and in such cases the unfortunate executors and others who have to handle these matters are left with a business or an estate which is denuded of its liquid resources. Difficulties immediately arise; applications have to be made for loans to bankers and others; and payments have to be made to widows, beneficiaries and other persons. Immediately their difficulties arise, and in recent years the heaviness of these duties and the way in which they fall, as I have endeavoured to illustrate to the Committee, have been so serious that business after business has bad to be closed down.

Further, the committee should notice that when the liquid moneys and the life blood of the business are withdrawn in this manner, the remaining assets, which may have had a value coupled with the life blood of the business, immediately become worthless, and, therefore, you get a catastrophe so far as the continuation of business is concerned. I happen to have had a very large experience of this difficulty in the West Riding of Yorkshire, and the position is getting so serious that unless the Treasury are prepared to do something in the nature asked for in this Clause, the conduct of business by private ownership or small companies will be impossible. I cannot go into the other side of the picture as to what would take its place, but that is sufficient for us to consider.

What are we asking in this Amendment to help us out of that great difficulty? I want hon. Members opposite to notice that we are not asking to be put in pocket in any direction, or that an estate should receive any concession in the nature of a gift. We are simply asking that if a person, who knows that there is going to be such a difficulty on his back, and he is a prudent person, he shall have the right to create, in the form of an insurance policy, a sinking fund to provide the liquid cash to meet an immediate obligation on death. I have had such an Amendment in my mind, and brought it to the notice of the Treasury ever since I came to the House, for the reason that the seriousness of it has been so apparent to me. I do hope that the Financial Secretary will not say this afternoon that this is going to cost the Government so much, because I have explained that it cannot on the present basis cost the Government anything. It will apply to policies of insurance after this date, and every new policy will be an addition to the estate as it exists to-day. Therefore, there will be an incentive for persons to take out these policies and, in so far as they do take out the policies, there will be an addition to the estate and an additional duty payable on the amount of the policies. To that extent the Treasury will benefit. The Inland Revenue Department have had before them in recent years sufficient illustration of the terrible disasters which have resulted to businesses and to estates by the immediate payment of these moneys, and if they can help to maintain estates, if, at the expense of the individual owner, they can do anything to mitigate this evil, they ought to do it.

I do not think there is any gentleman engaged in the legal profession or any Member of this House who has experience of the untoward events that may happen, and often do happen, on the death of a person who will be other than in sympathy with this modest proposal. I, myself, would have liked the Treasury to have admitted that the proceeds of any such policies should not be assessable for duty at all. Of course, there may have been an objection to that, but if they do accept this Clause, the Treasury know that any policy so taken out will have to bear some duty. Even small estates nowadays pay a considerable percentage—as much as 10 per cent.—and as the estate gets larger it pays a greater proportion; but if a policy could be taken up for, say, £5,000, even such an amount would pay a considerable duty, and it would encourage the establishment, so to speak, of an inner reserve in every estate to meet this difficulty. The continuation of business and employment would be made far more certain, the maintenance of the level of value of public stocks and shares would be maintained, and the position of the Inland Revenue would be made far easier in the collection of these heavy duties. I beg to support the Clause.

I am very reluctant to oppose my hon. Friends on this new Clause which they have proposed so eloquently. Nevertheless, I feel that its acceptance by the Government would involve an unjustifiable differentiation in the treatment of different testators' estates, where a life policy was taken out in one case or investments accumulated for the purpose of defraying these duties in another case. After all, there are two distinct ways in which a testator should make provision for the Death Duties which he reluctantly anticipates will be paid in a certain event. Having made as nearly as he can some estimate of what duties will be payable on his decease, he should adopt one of the following courses. He should either set aside out of his income every year the requisite amount of money which he may either accumulate on deposit at the bank or invest; or, alternatively, he may take out a life insurance policy payable at death for an amount sufficient to cover the estimated amount of the duties. The life insurance company, assuming the normal expectation of life, accept premiums which they, in turn, invest and accumulate and out of which they have to make profit; so that if a testator in setting aside annual sums invests that money to as great advantage as the insurance company can invest it, he will accumulate as much money, assuming the expectation of life is fulfilled, as the amount payable under an insurance policy.

People will not do that, because it simply increases their Death Duties.

Perhaps my hon. and and gallant Friend will allow me to finish what I was saying, and I will then deal with that point. I think it is perfectly clear that the Committee could not possibly approve a position where of two men of identical -wealth, one decides to make provision by means of annual allocations of income to provide at compound interest for the duties payable, and the other one prefers to pay an equal amount to an insurance company as an annual premium, and when death supervenes the Death Duties should be more in the case of one estate than in the other, when both are leaving an equal amount of money. I am sure that the Committee would not approve of that.

In reply to the point just raised by my hon. and gallant Friend, if the Government, say, on the Report stage, would accept an Amendment or new Clause somewhat on the lines of this one, but giving the same rights irrespective of the nature of the provision which a testator had made for the payment of the Death Duties, I would be entirely with my hon. and gallant Friend, but not as long as that privilege is only to attach to a testator who has taken out a life insurance policy for that purpose. In the absence of some such pronouncement by the Government I am sorry I cannot support the proposed new Clause.

The last speech was extremely interesting but it did not tackle the problem which we have in mind. What we have in mind is not the case of the wealthy man who manages to make large savings in the course of his life. The man we have in mind is the lower middle-class man striving to make a living out of a small business and to provide for his wife and family in the event of his death. The sort of thing which such a man is generally able to do is to purchase a home for his widow and perhaps a small annuity, but he does not realise that on his death she will have to pay Death Duties on the estate—both on the value of her home and on the value of the annuity—that she will probably have nothing whatever out of which to pay those duties and she may have to sell out her home in order to provide the money. On the other hand, it is true that a considerable number of people in this country have the sense to insure against Death Duties.

When people come to take the advice of a lawyer on the matter, they have to be told that they must insure not only for the amount which they think at the moment will cover Death Duties on the estate but for a larger amount. They have to be reminded that the insurance monies will be aggregated with the estate and if the existing value of that estate is on the borderline of one of the graduated stages, then, up will go the rate of duty. Consequently they must insure for a much larger sum than at first appears necessary because they will be called on to pay duty at the higher rate. When they are told all this a large number of them conclude that it is not worth while insuring at all. They take the risk; they do not insure, and the consequences in connection with many of these small estates are such as have been described to the Committee.

There is no doubt, however, that a certain number of people insure today for very large sums, that these insurances are aggregated with the estates, and that the Government get the full amount of duty on the larger sum. If a provision such as this were inserted in the Finance Bill it would encourage a great number of less well-off people to insure. They would be encouraged to do so because it would then cost them less and the result would not be so expensive to the estate. The practical question for the Government is what would they lose. No one can tell until it has been tried, but we submit that everybody in moderate circumstances ought to be encouraged to insure against these duties, for the sake of their own estates, for the sake of the revenue and for the sake of the country. If that encouragement were given, I believe there would be a great increase in these insurances which would prevent an enormous amount of misery to the people immediately concerned and would be, we believe, for the benefit of the State.

I have listened to this Debate with some interest and sympathy. It has not been exactly a personal sympathy because I have never been able to contemplate insuring against Death Duties. The ordinary owner of agricultural land cannot possibly presume to indulge in luxuries of that kind. But I ask the Committee to realise that a very big principle is suggested here and that very large sums would be involved if that principle were adopted. We all know how these duties work and how steeply the rate of duty rises according to the amount of the estate. We know that in the case of very big estates a large proportion is taken in duty. We all know, therefore, that if an estate, on the occasion of a death, were divided into two parts, namely, the part which has been set aside to pay Death Duties and the part which had not been so set aside, and, if those were treated as two separate estates, the amount which the Treasury would lose because of the lower rate of duty applicable to those two estates would be considerable.

We ought to realise, too, that the amount which would be lost by the Exchequer and gained by the individual would be greater, the larger the total estate. The effect of having the estate divided and treated as two separate estates is, indeed, hardly a relief at all to the smaller man but it is an enormous relief to men who leave large fortunes. There is the case of the man who leaves £3,000,000 or £4,000,000. Such cases have occurred recently. On such an estate, £1,000,000 or so might be payable in Death Duties. But if an estate of that kind is to be treated as two estates as a result of insurance against Death Duties, the owner of that estate will promptly take that step, as a sensible man, and the estate of £4,000,000 will be treated as two estates, one of £3,000,000 and the other of £1,000,000 and the loss to the Exchequer will be considerable. A very large principle is involved in this proposal and that ought to be clear to the Committee, before they decide, as well as the relief to the lower middle-class person whose case has been advocated.

I had not meant to intervene in this discussion, but the speech of the right hon. Gentleman the Member for North Cornwall (Sir F. Acland) calls for some comment. In the first place, I consider that his fears as to loss of revenue in the case of large estates are exaggerated. When a certain figure has been reached in the size of an estate there would be no loss to the revenue except in respect of what was directly due to insurance. There would be no loss on the remainder of the estate because it would still be at the highest possible figure which the duty can reach. But the real case against the right hon. Baronet was given by himself in his opening remarks when he said that, as an ordinary agricultural landowner, he had never been able to contemplate insurance against Death Duties. I do not believe that, in practice, the larger estates would get much benefit from this proposal because I do not believe that they could afford the enormous premiums which would be necessary for the required insurance. There might be individual cases, but I do not think they would be numerous. The kind of case that we have in mind in this proposal has been very clearly stated by previous speakers. It is the case of the man who is being charged duty on something which is not realisable at the value at which it is assessed. We believe that there should be some opportunity to guard against that eventuality.

Hon. Members opposite would probably say that if these estates were broken up it would be a very good thing and that if people were turned out of employment in consequence, it would be a necessary evil. We do not take that view. We believe that these estates should be kept together and in good working order in readiness for the time when the hon. and learned Member for East Bristol (Sir S. Cripps) is to take them over. We would hate to hand them over to him in anything other than a sound working condition, and therefore we wish to preserve them. I do not know whether this Clause as worded can be accepted or not, but we believe that something of this sort ought to be done in order to allow for the continuance of businesses and estates on which many people depend and in order to enable those concerned to take a prudent step and to pay these Duties without being penalised.

This discussion has afforded an opportunity to some of my hon. Friends to express their views upon the Death Duties generally and I shall say nothing which would suggest that the incidence of those duties is not a considerable burden. This new Clause is apparently devised for the purpose of minimising that burden and I am concerned rather with the purely practical aspect of the matter and with what would happen under the Clause if it were in operation. I think the Committee are aware by this time of what would happen in those circumstances. The proposal is that insurance monies, in so far as they are used to pay Estate Duty, shall not be aggregated with the whole estate, in other words that there shall be two estates. As these duties are graduated and are on an ascending scale in relation to the size of the estate—the larger the estate the higher the rate of duty—it is plain that if an estate were divided into two parts the duty on each separate part would be at a lower rate than the duty on the two parts together treated as one estate.

If the whole estate were £2,000,000, duty would be paid on £2,000,000, but if the man owning the estate had insured for £1,000,000 extra, in order to pay that duty, he would not have his estate valued at £3,000,000. He would only pay on the £2,000,000—that is all.

I think there is some slight confusion in connection with this matter. Let me give my hon. Friend an instance which will make it plain to him. Take an estate of £1,050,000 which is liable at present to a rate of 40 per cent. giving a charge of duty of £420,000. That is what the Exchequer now receives. If that estate included £355,000 policy money the charge of duty under this new Clause would be on two separate estates, one of £695,000 at 36 per cent. and the other of £355,000 at 30 per cent. giving a duty of approximately £355,000 instead of £420,000 as at present. I hope that case will make it plain to my hon. Friend that the revenue would lose by this method of separating one single estate into two estates.

Would the hon. Gentleman kindly give the Committee the details of the calculation? At first sight, it is difficult to see how a person, out of that income, could pay premiums to that amount.

In order to say what happens in regard to any particular estate of course one would require to have the figures of the actual estate. I am giving one example and the hon. Member may take any other example. When we come to the case of estates of tremendous size of course the proposed new Clause would have no effect at all. Take the case of an estate of £10,000,000 If that estate included £2,250,000 of policy money, the duty would be 50 per cent. on the whole estate but the two separate estates of £7,750,000 and £2,250,000 would each be liable to duty at the rate of 50 per cent. Thus when we reach the very big estates, as has been pointed out, the Clause would have no value at all. In the case of estates below that level the Exchequer would lose every time. It is not a fact, as has been suggested, that these policy moneys are an addition to the estate which would not otherwise have been there. The size of the estate is exactly the same. A man can invest money in insurance or in War Loan or in property. [HON. MEMBERS: "Or spend it!"] It is always possible to avoid Death Duty altogether by spending all one's resources.

They do.

I am dealing with the estate as it now stands, and I think it must be plain to the Committee that by abandoning the principle of aggregation the Revenue would lose. I am in a position to inform my hon. Friends that, if full advantage were taken of this Clause, the loss to the Exchequer would be in the neighbourhood of £20,000,000. That is the closest estimate I can form.

Assuming that it is insured now?

I said "if full advantage were taken of this Clause" and the results that my hon. Friends think desirable were achieved, namely, that persons were insured to the full amount of the duty. If they were in sured for less, the loss to the Exchequer would be less, but in any event it would be considerable.

Has the hon. Gentleman taken account of the number of insurances which are not taken up? If all these insurances were taken up, the Exchequer would get a certain sum of money from the lower rate of Death Duties.

The more persons availed themselves of the Clause and the more they covered their Death Duties by insurance the more we should lose, and we should lose not only on Death Duties, but on Income Tax as well, because a special allowance is made for moneys paid by way of insurance. I do not think there is any escape from the deductions which I have drawn. I have the fullest sympathy with the case put forward by my hon. Friends, but really the general complaint about Death Duties has nothing whatever to do with this Clause, which is a specific proposal, open, as I say, from the Revenue point of view, to the gravest objections. Let us all hope that the time will come when it will no longer be necessary to raise so much revenue from this source.

I beg to move,

"That the Clause be read a Second time."

It is a matter of great regret to me, and, I expect, of even greater regret to the Committee, that the hon. and learned Member for Bridgwater (Mr. Croom-Johnson), whose name is attached to this Clause, is not here to assist us, and that the Noble Lord the Member for Horsham (Earl Winterton), whose name also is attached to the Clause, has only just arrived and is not in a position to open the case for it. It is a matter of some importance and of some legal technicality, and I hope that neither the Committee nor the Financial Secretary to the Treasury will allow it to suffer from inadequate advocacy on my part. In effect, the object of the Clause is to restore the position with regard to the aggregation of property to what it was under the Finance Act of 1894, namely, that there is an exemption with regard to property passing under a disposition, not made by the deceased to some person other than the wife or husband, or a lineal ancestor or lineal descendant of the deceased. As far as I understand it, it means that, provided there is an outside settlement, which has nothing to do with a will, on some person who is neither the immediate predecessor nor the descendant of the deceased, that money, if it ever comes in, should only be charged Death Duty at its normal rate, and should not be affected by the money in the rest of the estate; in other words, that you do not pay duty on something that you do not get.

The case of hardship under the present law is as follows: "A," the tenant for life of an agricultural estate of considerable size charged in 1871 part of this estate with a portion for a younger son, "B," in the form of a rent charge of £9,700 per annum. "B" died in 1933, when £8,200 per annum of the rent charge reverted to "C," the present owner of the settled estates on which it was charged. By reason of aggregation of the principal value of the rent charge of £8,200, "B's" free and other settled estates which pass to his daughter bear an increased rate of at least 5 per cent., or a sum of about £5,000. That, if I understand it correctly, means that in this particular case a man has had to pay an extra £5,000 out of his own pocket, not out of money that has come to him because he has inherited that property, in addition to the duty that he will have to pay on the money that he has inherited. Our contention is that that is in fact paying the duty twice over. I could give the Committee other examples of the hardship involved. There is one, which was given me by the Noble Lord, of a man who had to pay a matter of £900 additional Death Duty for a £200 benefit. The circumstances were peculiar, but it is a perfectly well authenticated case.

The Finance Act of 1894, which, as the Committee will remember, was the first in which the principle of the payment of Death Duties was introduced—a bad day, I venture to think, for the country—had a provision similar to the one which we are now proposing. This was repealed in 1900, and there was substituted a provision that such aggregation should not cause a higher rate of duty than an extra half per cent. That was abolished, for a reason that I have never been able to ascertain, but I have a shrewd suspicion that it was done without realising the consequences, in 1927. Considerable hardship has, as I have said, already been shown under the present system of aggregation. If I am correctly informed—and I speak on this matter subject to correction—the loss to the revenue by the adoption of this proposal would be infinitesimal. I think it is a genuine grievance, and I hope very much that the Minister will see his way either to remedy it now by the acceptance of this Clause, or, if not, to give it his attention and find some suitable words to remedy the grievance, which we believe to be a very real one.

In the course of a long Parliamentary career, I have never spoken before on the question of Death Duties, but, frankly, I am partly responsible for this Clause having been put forward, because of a case which occurred to me. I hesitate to bring it before the Committee. I make no complaint and have no grievance, but the case is so inequitable that I think it should be mentioned. I was asked by a very prominent member of the Law Society, who asked that his name should be kept out of the Debate, to move this Clause, and a number of other solicitors, including many family solicitors who look after the interests of clients who have large estates, were associated with him in asking me to move it. We appreciate that it may not be possible for the Chancellor of the Exchequer to accept it on this occasion, but we hope that the arguments which we put forward, and which I regret are not supplemented by the arguments of my hon. and learned Friend the Member for Bridgwater (Mr. Croom-Johnson), who has had great experience of these cases in a professional capacity, as he is not here to put them forward. We believe that if the change which we suggest—and which I may tell my right hon. Friend has been carefully drafted by the best Parliamentary draftsmen available to a private Member, after consultation with a large number of authorities, not only solicitors, but one or two barristers—were made, the actual detrimental effect from a Revenue point of view would be very small, but it would carry out what we conceive to have been the original intention of Parliament when it dealt wtih Death Duties.

This is not the occasion on which to deal with the whole question of aggregation, and we do not deal with it here. We deal with only one aspect of the problem. My hon. Friend has already given one case of the hardship which arises under the present law, and I would like to give, very shortly, the case in which I was interested. Some time ago a relative of mine died. Under the will of my grandfather, during that relative's lifetime I had to pay him a sum of £200 per annum. Incidentally, though it does not affect the point, I purchased a Government annuity some 10 years ago, and therefore no longer had to bear the actual burden at the time of his death. The value of the annuity, which prima facie ceased, was calculated on a 4½ per cent. basis and agreed with the Inland [Revenue at £4,210 10s. 6d. That value by itself would have attracted Estate Duties at 3 per cent., but by virtue of its being aggregated with the deceased's estate, which did not interest me in the slightest degree—I did not get a penny out of it—it was valued at no less than £23,679, or rather, owing to the deceased's estate being of that amount, the rate of duty was increased from 3 per cent. to 10 per cent., and £421 Estate Duty was thereupon paid—that is to say, almost double what I should have had to pay had the estate been by itself.

But that is not the end of the story. On the 14th January of last year, a further claim for additional Estate Duty was received from the Inland Revenue, on the ground that it had been discovered, with regret, that it would be found necessary to disturb the assessment of 10 per cent., other equitable property having been found to pass under the deceased's will. Again, it did not effect me in the slightest degree. I instructed my solicitor to write back to Somerset House and point out to those always charming and friendly people, that it was regrettable to have to pay this extra amount, as they had already given me a receipt for the amount of Death Duty. With the courtesy which always distinguishes them, they wrote back to say that when one of the Departments of His Majesty's Government gave a receipt, it did not necessarily mean that the subject did not have to pay more money. The result was that the rate of duty was increased from the previous 10 per cent. to 20 per cent., by reason of the value of the further equitable property. I therefore had to pay nearly £900, instead of what I venture to state would have been the true payment of £200 on the value of the estate itself.

I have known of even worse cases. I have not got all the details, so I will not attempt to give them, but I was told the other day of the case of a person who was left £15,000. It was a poor woman, who had very few other means, and who had been expecting this money, which came from a distant relative, for some years, as the relative was very old, but when the relative died, so far from getting £15,000, the whole of it went in Death Duties, owing to the rest of the estate being a very large estate. I showed my own case to a solicitor friend, and he said, "It is a bad case, but not nearly as bad as some that I could give." I realise that we are working to a time schedule, and I do not want to keep the Committee too long, but I would ask my right hon. Friend to give the most careful consideration to this proposal. We do not wish to press the Clause at this stage, but we ask that he should give serious attention to the question of aggregation. It is not right that on the death of a person there should be imposed a burden of this kind, which is inequitable in itself. I am the last person to suggest that the whole principle of Death Duties is wrong; I do not think it is, and I do not mind a high rate of Death Duty, but I do say that aggregation as it now stands is not an equitable principle. I commend the matter to the sympathetic attention of my right hon. Friend.

The case which my Noble Friend has put, with good humour, is a complaint against the aggregation of property in relation to Estate Duty. While I am not called upon to make a defence of Estate Duty or of the principle of aggregation, I should like to explain the theory. The theory is that this is a duty which is leviable upon property as such, without any regard to any beneficiaries of the property. While the case of a beneficiary who is going to receive or has received much less than he would have expected may seem a very hard one—and certainly Members of the Committee will sympathise with my Noble Friend—to give way on that point would be to contradict this fundamental and essential principle of the Estate Duty. When this duty was first imposed it had a provision in it very similar to that which has been described by my Noble Friend. It gave rise to a great deal of criticism at the time, and it was investigated by a very strong committee, consisting of Lord Finlay, Sir R. J. Reid, Lord Haldane, Mr. Pretyman and by Sir Henry Primrose. I should like to quote what that Committee said on this point:

"We must observe that the Act as it stands contains an important modification of its fundamental principle that all property passing on death, whether settled or not settled, should be aggregated to form one estate. By the proviso to Section 4 it is enacted that property passing on the death of the deceased, in which he never had an interest, or which passes under a disposition not made by him to some person other than the wife or husband or persons lineally connected with the deceased, shall be treated as an estate by itself, for the purpose of determining the rate of duty. This provision was designed to protect the family of the deceased from having to pay on the property passing to them at a rate enhanced by the fact that other property passes on the death of the deceased to persons outside the family."

That is exactly the case put by my Noble Friend. They proceeded to say:

"No exception can be taken to the provision for exempting from aggregation property passing on the death of the deceased in which he never had an interest. But the rest of the proviso is so worded as to result in conferring on collaterals or strangers, who take under a disposition not made by the deceased, an exemption from aggregation of this property with the other property of the deceased, quite irrespective of the destination of such other property, or of the existence of any persons such as the proviso was designed to protect. Moreover the proviso presents great practical difficulties in administration, and it introduces considerations of the ultimate destination of property passing on the death of the deceased and of the degree of consanguinity of beneficiaries to him, considerations which are quite foreign to the main principles of the Act."

Accordingly, they recommended that the first thing to do was to repeal the proviso, re-enacting that part of it which exempts from aggregation property in which the deceased never had an interest. That was done, and that is the law to-day and it is in consequence of that recommendation by that strong committee, enacted in 1900, that my Noble Friend has suffered the hardship of which he complains. Seeing that the Amendment would affect this fundamental principle of the Estate Duty, namely, the principle of aggregation, I cannot accept it. So far from the acceptance of the Amendment meaning a trifling expense, I am informed that it would cost me £2,000,000 in a full year.

In view of the statement of the Chancellor of the Exchequer, I beg to ask leave to withdraw the Motion. As we have already stated, we do not wish to press the matter now. It would seem from the statement made by the Chancellor of the Exchequer that we shall have to attack the whole principle of aggregation at a later date.

The next proposed new Clause—(Repeal of lax on mutual profit)—is out of Order, because in certain circumstances it would impose a charge.

This new Clause, which stands in my name and in the names of several of my hon. Friends, has been looked upon as of great importance. I do not want to go against your Ruling, but it appears to me that the new Clause is simply a proposal to return to the status quo.

I am afraid that the hon. Member has overlooked one effect of the new Clause. The result of Section 31 of the Finance Act, 1933, was to bring the various industrial and provident societies within the ambit of the relief granted by Section 34 of the Income Tax Act, 1918, and in certain cases they are able to claim relief. The effect of the Clause is to abolish that power of claiming relief.

I thank you very much.

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

Up to the Finance Act of 1921 the amount of interest on money borrowed to redeem land tax was 3 per cent. In the Finance Act, 1921, the interest was raised to 4 per cent., at which rate it stood in the Finance Act of 1896. This new Clause simply seeks to put the rate of interest back where it was in 1896. I need not enter into the question of land tax, but I would ask the Chancellor of the Exchequer to consider what he said last year to the hon. Member for Kettering (Mr. Eastwood) with regard to a scheme of redemption for the whole of the land tax, which is a very worrying business. It seems to us now that the Conversion Loans, etc., have been brought to a rate of interest from 5 per cent. to 3½ per cent., that loans in respect of money borrowed to redeem land tax should be reduced just as other loan rates have been reduced.

My hon. and gallant Friend in mentioning that the rate of interest was increased in 1921 from 3 per cent. to 4 per cent., omitted to observe that the consideration, which was then 30 years' purchase, was reduced to 25 years' purchase.

I had noticed it, but I did not mention it.

I do not observe that in his proposal to restore the rate of interest to 3 per cent. the hon. and gallant Member proposes to restore the number of years purchase from 25 years to 30 years. If he will consider the two things together I might meet him. Otherwise, this is not a matter for legislation. Inasmuch as the total amount paid in interest on instalments is only about £400 a year and the saving of interest would only be £100 a year, it does not seem worth while to bring forward such an Amendment.