CUSTOMS AND INLAND REVENUE BILL.—(No. 231).

HC Deb 20 May 1890 vol 344 cc1451-88

Bill considered in Committee.

(In the Committee.)

Postponed Clause 6.

Question again proposed, "That Clause 6 stand part of the Bill."

(9.2.) MR. J. O'CONNOR

When you rose from the Chair, Sir, I was about to call the attention of the Committee to the fact that the proposed tax upon whisky as contained in this clause presses with unequal incidence upon the two sections of the population in Great Britain and in Ireland, and I alluded to the fact that it is a tax on what is essentially an article of Irish manufacture, and this may also be said of Scotland. The duty per proof gallon on beer, the drink of Englishmen especially, is 1s. 8¾d; upon wine, it is 3s. 10d.; on whisky, it is 10s. Now, this is one of the grievances of which we complain, that the alcohol used by the richest of the three countries is taxed in the lightest manner. It is, I believe, a maxim of finance that taxes ought to press heaviest on those best able to bear them, and there can be no doubt that the people of England are, of the population of the three Kingdoms, best able to bear heavy taxation. England is more wealthy, her people are engaged in manufactures and industries of the more profitable kind, and occupy a more favoured position than do the people of Ireland. Yet the national drink of Ireland is taxed nine times more than beer, and three times more than wine. Wine is essentially the drink of the wealthy, yet it is taxed but a third of the rate falling upon the drink of the poorest people. A gallon of whisky costs, I believe, 3s., so that the tax upon it amounts to 333 per cent., and I maintain this is both unfair to producers and consumers. There is another phase of this branch of the question. Beer and wine cannot be adulterated in the same manner as whisky. There is an article introduced into this country called Hamburg sherry, and the importation is allowed with a Customs Duty of 2s. 6d. It contains 42 degrees of spirit of the worst and most deleterious character, and is a mixture of potatoe spirit and water, and yet this deleterious compound is allowed to come into the country with a Customs Duty of 2s. 6d., while on the same quantity of whisky at the same strength we pay 4s. 2½d. But that is not the worst of the case in regard to Hamburg sherry. You cannot adulterate your beer with it or mix it with your wine, but it may be blended with the best whisky produced in Ireland and Scotland, and there is always a temptation to those engaged in the rectification and distribution of spirits to use this deleterious compound to mix with the wholesome spirit, because of the lighter duty paid upon it. Before I part from these facts I wish to point out another anomaly which appears from this Return supplied on the Motion of the hon. Member for Glasgow (Mr. Provand). From this Return I observe that the revenue derived from Customs and Excise Duties on wine and beer in England and Wales amounts to £28,379,567, and that number of pounds sterling about equals the population of England and Wales; that is to say, the amount derivable front Customs, Excise, and licences equals £1 per head of the population. I also find that the amount derivable from these sources in Ireland amounts to £4,689,814, which is exactly equivalent to the number of population, and £1 per head of population. Here is another injustice to the poorer country, in contravention of the maxim I have alluded to, that a tax should fall lightest on the weakest shoulders. These figures should have had the close attention of the Chancellor of the Exchequer, and when he made his proposal for this extra tax Ireland at least should have been exempted. Amendments have been proposed having for their object the exemption of both Scotland and Ireland; but I am confining myself to the question of Ireland, and I maintain these figures afford strong argument for such exemption, as they do for the omission of the clause altogether. If Members would disregard the claims of Party, and study this Return and the incidence of this tax, I am sure they would see the justice of my argument in support of my proposition that the proposal of the Government is unjust in its inception, and particularly unjust in its application to Ireland. One result of this clause of the Bill will be increased adulteration, by water or by the unwholesome spirit I have mentioned. When, in times past, whisky was taxed at only 2s. 8d. per proof gallon, there was no temptation to use bad grain in the manufacture or to adul- terate the spirit; but the increased duty gave rise to the temptation, and by this addition the temptation will be increased. Not content with this increase of duty, you have proposed by legislation, to increase the cost of the dealers' licence, to restrict his hours of sale, and you render his right to renewal of licence insecure; and, as a climax, you add 5 per cent. to the tax on the chief article of his trade. This must inevitably lead to adulteration of the article sold. And now, to turn to another portion of the subject, the effect this proposal will have on an important industry in Ireland. I do not oppose this tax as it affects whisky simply; you impose this taxation on agriculture, the staple industry of the people of Ireland. The farmers of Ireland have many drawbacks, and have many heavy claims upon their agricultural profits. Already you have imposed a tax on the growth of barley of £80 an acre—a crop which is especially suited to the light Soil of Ireland and the conditions of Irish agriculture. I know many parts of Ireland where the soil is suited only for barley and oats, and in those districts are distilleries where the farmers get fairly good prices for their grain, upon which your tax of 10s. a gallon on spirit is equal to £80 an acre. The Chancellor of the Exchequer smiles at this, and probably the right hon. Gentleman has in his mind that the public pay the tax; but if we had a lighter tax we should be able to produce whisky for export trade under more favourable conditions and double our output and our commerce. But you make an additional impost equal to £4 an acre on barley. Hitherto we have been able to maintain our own in the growth of barley; we have had serious competition from Canada and other large grain-growing countries, but notwithstanding, the barley grown in Ireland has had the preference from Irish distillers, and soil and climate are favourable to its perfection. But by this tax you encourage the foreign importation and increase the difficulties of the native grower. But this branch of the subject will be dwelt upon probably by some hon. Member better able to deal with it than I am. It is stated that this additional 5 per cent. tax on whisky is to be used for buying out publicans in Ireland. I should not be in order if I dwelt upon this matter, and I will only express my objection to any publicans being bought out in this manner. In the future, if promised legislation should take effect, we will provide other and more suitable moans of accomplishing this object than the method provided in the Bill. We believe that our publican friends have an equitable right to renewals of licences, and we will find some more equitable means of compensating them than that of adding to the taxation of the principal article of their trade. For these reasons I oppose this clause and shall support the hon. Member for Glasgow, in the belief that the clause is vicious in principle and will work evil to the interests of those I have the honour to represent.

(9.30.) MR. BSSLEMONT (Aberdeen, E.)

I address myself to this clause from a wholly different point of view to that of the hon. Member who has just spoken. So far as Scotland is concerned, we have no desire whatever to press the point that we should, on account of our poverty, be taxed in any way less than those who constitute the taxpayers of the three Kingdoms, and I may state at the outset that, looking at it from our point of view, we have no objection per se to an additional tax upon alcohol. Our objection to the tax is founded on the injustice of the tax to Scotland. We find from statistics that are not contested by the Chancellor of the Exchequer, that although of the three Kingdoms Scotland is the most sober, that is to say, our people take the smallest quantity of alcohol, yet for this small quantity we pay a rate almost equal to that paid by Ireland. We take exception to this clause upon the fundamental ground that it is wrong to utilise Imperial taxation for local purposes. But admitting that there are two purposes for which the money is intended, our contention is that in equity it would be right to give this 6d. a gallon upon alcohol to Scotland; and if the sum raised upon alcohol is insufficient for the purposes of the United Kingdom, it would be just both to Ireland and to Scotland to put an additional tax upon beer and wine and not upon whisky. May I point out that the distillation of alcohol gives the least amount of employment in comparison with any other industry. I had intended making these remarks on the Second Reading of the Bill. I may add that I think the tax is unnecessary in another respect. We have contended that we might dissociate this Bill altogether from the increase of the duty upon alcohol, by putting a duty, if necessary, upon the licences themselves. This would entirely obviate the difficulty we are placed in in taking this money which is raised from the tax upon alcohol, and placing it, as far as Scotland is concerned, to a purpose which is obnoxious to the whole of the Scotch people. Therefore, we contend that even if the tax were necessary for a subsidy for these local purposes, it is entirely unnecessary if we impose the tax equitably for the purposes for which it is intended. In this respect I shall not continue the argument further, because it has been admitted (and the Chancellor of the Exchequer has not denied) that, so far as Scotland is concerned, the amount collected is unjust and inequitable. No one could read the speeches delivered from this side of the House without admitting the justice of the argument that we are taxing the poor man in the interests of the rich; and when we consider the purposes to which this money is to be applied, then this injustice becomes more apparent. Beer is, undoubtedly, consumed by a large class of the people in England who are better able to pay than the Irish taxpayer. As far as I am individually concerned, many of those whom I represent have no objection to this tax in the interests of temperance. But the question is, will it contribute in any large extent to the relief of local taxation? I should be sorry to represent to this House that we object to this tax upon other grounds than that it is inequitable, and that it is altogether unnecessary. The latter point is proved by the evidence of those who are imposing the tax. We are told that it is the direct result of the equalisation of the Death Duties in 1885, when the Conservative Party had in view self interests more than the interests of the poor. Well, the highest form of flattery is imitation. We contend that they are still putting this tax on unfairly, in the interests of the well-to-do, and applying it to purposes which, so far as Scotland is concerned, are obnoxious and extremely objectionable to the great bulk of the people. I shall feel it my duty to support the Amendment of my hon. Friend the Member for the College Division of Glasgow, and to oppose this tax as unfair to Scotland and unnecessary and objectionable in its incidence.

(10.40.) MR. SEXTON

The Preamble of the Bill is the most daring work of fiction I have ever met with in the whole of my Parliamentary career. It recites that— The Commons of the United Kingdom of Great Britain and I inland in Parliament assembled, towards raising the necessary supplies to defray Your Majesty's public expanses, and making an addition to the Public Revenue, have freely and voluntarily resolved to give and grant unto Your Majesty the several duties hereinafter mentioned. With regard to the clause at present before the House, not one word of that is true or resembles the truth. The fact of the matter is that those of the Commons who happen to be in the minority, so far from "freely and voluntarily" giving their votes, have them demanded by force and by Closure, and by all night Sittings. The supplies which the Government are now asking for are not even an addition to the public revenue, for they constitute no part of the Imperial Budget, but are merely local expenses, which have nothing to do with Imperial matters. I need not point out that the few hundred thousand pounds that are to be applied this year represent what will be only a drop in the ocean of an ultimately accruing liability. I protest against the alienation of Imperial revenue in this manner as an evil innovation, and as a dangerous mode of applying Imperial resources. What is the genesis of the clause under discussion? Before the Chancellor of the Exchequer proposed to levy this increased tax upon the United Kingdom, and in a particularly burthensome manner upon Ireland, did he ask himself the question whether the whole contribution of Ireland to the revenue was enough at present? Did he ask—"Is it as much as she can bear?" "Is it too little or is it too much?" No; he never wasted a thought upon the question. He merely said to himself, "I want a million of money for England." Why did he want it? Because he was tormented by the English County Councils, in consequence of the limitation of their resources, owing to his failure to pass the Van and Wheel Tax. We now find ourselves in the position that Ireland is called upon to pay for the Parliamentary reversals of the right hon. Gentleman. Having first obtained as much money as he requires for English interest, he allows Ireland to have the balance. I greatly regret that the' right hon. Gentleman has not consented, pending the establishment of Local Government in Ireland, to strike out this country from the operation of the clause. I can show him in a moment that he might have agreed to suspend the question of fresh taxation in Ireland, pending the introduction of Local Government in Ireland, without any dislocation of his financial scheme. The gross produce of the additional tax to be imposed on spirits and beer would be £1,300,000. Ireland's total contribution would be £151,000, and if the right hon. Gentleman consented to forego the application of the scheme of increased taxation to Ireland, it would only decrease his resourced by £154,000. He would still be enabled to spend £300,000 upon the superannuation of the police, £350,000 upon licences, and to give to the County Councils £356,000. But there are other reasons which justify them in giving their strenuous opposition to the clause. In the first place, out of the money to be raised in Ireland one-fourth will never be given back; secondly, the whole of the remainder of the fund will be appropriated to the purposes of the guarantee under the Land Purchase Bill (if it should ever pass), which we most emphatically condemn; and, in the third place, the sum of £40,000 a year, to be raised by this tax from Ireland, is to be locked up for an indefinite term of years. It is to be placed in the hands of the Commissioners for the Reduction of the National Debt. It is entirely a matter of speculation whether the present Government will ever attempt to pass a Local Government Bill for Ireland, and I shall protest in the most emphatic manner against the raising of £40,000 a year from Ireland to be left for some indefinite number of years in the hands of the Commissioners referred to, until this Government or some successive Government are pleased to pass a measure of Local Government for Ireland. I shall also take exception to the scheme of the right hon. Gentleman, because it has been elaborated without consultation with any Irish Member of Parliament.

*MR. GEDGE (Stockport)

I rise to order. I ask you to rule, Mr. Courtney, that the hon. Member is not now in order.

THE CHAIRMAN

Undoubtedly the hon. Member is diverging from the subject, but not to such an extent that I can rule him out of order. He is only referring to these matters in passing.

MR. SEXTON

I wish to add to what I have already said, with reference to that portion of the scheme dealing with the money to be appropriated for the national teachers, that it is in my opinion a scheme which confers the least possible benefit in quarters where relief is most required. Another point entitled to attention is the contingent injury that will be done to Irish agriculture. It is true that the continual increase in the duty upon Irish whisky has grievously hampered (he cultivation of Irish barley, but the present proposed impost will be a further hardship to the Irish farmer and to those who are dependent upon him, and it will still further grievously burden an Irish agricultural industry which has already a sufficiently hard struggle for life. I protest against any increase of the Spirit Tax in Ireland for any purpose whatsoever, because already the tax is grossly inequitable and oppressive in Ireland. I will go back as far as the year 1852. How did the Spirit Tax stand then? In Ireland it was 2s. 8d. a gallon, and in England 7s. 10d. The present Chancellor of the Exchequer argues that the proposal to differentiate upon the tax on whisky in England and Ireland is not business; but he cannot now see that not so many years ago it was business. For the last forty years Ireland, a country of decreasing population and of decreasing capacity to bear this fiscal burthen, has been the victim of a long and steady course of the most wanton fiscal aggression. In England during those years the tax has been increased from 7s. 10d. to 10s., but in Ireland it has been quadrupled. It was Mr. Disraeli who equalised the tax on spirits in England and Ireland, beer being the drink in England. And what is the result? The poor man who drinks whisky, which is the ordinary drink in Ireland and Scotland, pays six times as much on what he drinks as the man who drinks beer. The Chancellor of the Exchequer taxes alcohol to the utmost limit when he finds it in the whisky. Why does he not tax it to the same extent when he finds it in the wine and in the beer? There ought to be established some equitable relation in the principle of taxation. Upon the Chancellor of the Exchequer's principle that there is no equitable relation between the taxes on the different liquors, he may abolish the tax upon beer altogether, and make the Englishman altogether free; or, on the other hand, he may raise the money now wanted by putting a tax of another shilling on beer. Certainly Englishmen would not tolerate such a tax. Or he might raise the money by putting another shilling on whisky, which would prove intolerable to both Irishmen and to Scotchmen. The Chancellor of the Exchequer is very fond of saying that it is not because people drink hard that he ought to be expected to lighten taxation upon what they drink. The argument would perhaps be sound if it represented the fact, but as it stands it conveys a complete misapprehension. If there is hard drinking any where it must be in England, because the records show that in England the consumption of beer, wine, and spirits is 64 gallons per head; in Scotland it is 4½ gallons per head; while in Ireland it is only 3 gallons per head. If the taxation were fair it would bear some relation to the consumption. But what is it? In England it is 14s. 1d., in Scotland it is 18s. 10d., and in Ireland it is 13s. per head, whereas it really should be, in England 14s. 1d., in Scotland 9s. 4d., and in Ireland only 6s. 3d. So long as the present disproportion exists I shall feel it my duty to continue to protest against this mean, aggressive, and disgreceful fiscal policy, winch weighs down on the two poorer members of the Imperial partnership for the benefit of the richer party. My second reason for my opposition is that the Government have in the present financial year a surplus, out of which they ought to have provided for the purposes to be met by this tax. When the right hon. Member for Edinburgh proposed to increase the tax in 1885, it was to make good a deficit. He had no surplus. But this year the Chancellor of the Exchequer has a surplus of £3,500,000. He might have increased the duty on foreign spirits and raised £200,000. He might have transferred the 3d. a barrel on beer from Imperial to local revenues, and raised £320,000, giving a total of nearly £600,000. In order to make up the requisite £1,300,000, he could have taken £700,000 from the surplus. Ireland has been cheated out of her fair share of the surplus. According to a Return presented to Parliament, Ireland yields about 1–12th of the whole of the Imperial Revenue. The different partners in the United Kingdom ought to have the benefit of the surplus as nearly as possible in proportion to their rate of contribution, which would give Ireland, contributing l–12th of the whole Revenue, £300,000. But this surplus is, according to the Chancellor of the Exchequer, raised in the main from the taxation on spirits, of which Ireland provides one-sixth; so that she is entitled, contributing, as she does, l-12th of the whole Revenue and one-sixth of the entire taxation, to something between £300,000 and £500,000. What does Ireland receive? There is £300,000 for barracks, about which I am very careless. We can always have barracks. There is £120,000 for the Volunteers; but the Volunteers are a forbidden force in Ireland. There is £180,000 for cheapening the postage between this country and India and the colonies; but Ireland's commercial relations with India and the colonies are not very extensive. Ireland's interest in the Plate Duty is nil. Her interest in the Currant Duty is represented by £5,000 a year. The House Duty is a cypher. It is idle to argue as to the contributions to education and police. The cost of the police is great, because it is maintained as an Imperial and Military Force.

*MR. GEDGE

I rise to order. I ask the Chairman to rule that the hon. Gentleman is out of order in discussing these matters on the question whether the Excise Duty on spirits shall be made equal to the Customs Duty.

THE CHAIRMAN

The hon. Gentleman is entitled to use these arguments.

MR. SEXTON

I argue that double as much is taken from Ireland as she can afford. A part of it is spent in Ireland upon Imperial establishments, which are bloated establishments, which are always costly, which are often corrupt, and which are maintained in Ireland at a strength and upon a scale which would not be necessary if the system of government in Ireland were in accordance with the wishes of the Irish people. The only benefit Ireland derives from the surplus is in relation to the Tea Duty. At first I thought this would represent £150,000. But I find by a Treasury Return that the Tea Duty paid in Ireland was about £300,000 a year, the remission of one-third of which would represent £100,000 My last point is what does Ireland contribute, and what is Ireland obliged to contribute, in excess of her real capacity? I should like to guide myself by the light which the Chancellor of the Exchequer will throw on taxation of this kind, and I should like to ask him respectfully whether he has formulated in his own mind any principle to guide him with regard to the relative capacity of the countries, which are partners in the United Kingdom, to contribute to the common purse. We shall have to press the question and get a practical Conclusion upon it. Mr. Giffen has calculated that if you take England and Ireland, and if you test the relative capacity of the two countries to contribute to Imperial taxation by the relative wealth of the two countries, the amounts of amassed capital in England and in Ireland, the capacity of Ireland is only per cent. of the capacity of the United Kingdom. The right hon. Member for Mid Lothian proposed in 1886 that Ireland should contribute l–15th of the imperial Revenue, but I have no doubt the right hon. Gentleman was prepared to consider that provision in his Bill had it reached Committee in a just spirit; but, at any rate, the Irish Members were prepared to argue that the proportion was excessive. I ask attention to the Return of the incidence of taxation of May the 7th. It appears by that Return that England contributes slightly in excess of four-fifths of the whole Imperial Revenue. Ireland contributes 1–12th of the whole. What test does this enable him to apply to ascertain whether or not the contribution of Ireland is fair? I cannot apply the test of indirect taxation, because indirect taxation, though nominally of the same amount in both countries, might be made to press unfairly upon one of them by being directed against one particular article. So that, though the two countries are placed together in fiscal partnership, the whole burden might be placed upon one. This was, I think, a clear and conclusive argument to the fallacy urged that a tax must be fair because it is the same in both countries. The Returns afford a very instructive test in the matter of direct taxation. England contributes 81 per cent. of the whole Imperial Revenue. The Return shows four heads of direct taxation. The first is Probate Duty. By the calculations for the current year England yields to the Imperial Revenue 87 per cent. of the whole Probate Duty. That she yields 81 per cent. to the Imperial Revenue and 87 per cent. of the whole Probate Duty, and therefore her contribution to the Imperial Revenue, judged by the Probate Duty, is light. The second head of direct taxation is Excise Licences. Under this head England contributes 86 percent., and, judged by this, it is plain that her contribution to the whole Imperial Revenue is light. Under the head of stamps the contribution of England is 89 per cent. and her contribution under the head of Income Tax is 87 per cent. These four heads show one concurrent result, that the capacity of England to yield to the Imperial Revenue is greater, as judged by those tests, than her whole contribution—Probate Duty, 87 per cent.; licences, 86; stamps, 89; Income Tax, 87; and her whole contribution, 81. Now, turn to Ireland, and the demonstration is also concurrent and conclusive, but emphatically conclusive, the other way. The contribution of Ireland to the Imperial Revenue is 8 per cent. of the whole of what is her contribution to the Probate Duty, which is a fair test, and means the duty levied upon accumulated wealth left at death by individuals. Ireland's whole contribution under the Probate Duty is only 4½ per cent. The contribution of Ireland under Excise Licences is 4.7 per cent.; under stamps a very fair test of the wealth and prosperity and thriving character of a community, her contribution is only 3.7 per cent.; and, more conclusive than ad, the Income Tax test, Ireland contributes to the Income Tax only 4.4 per cent. If we take these average tests of the capacity of Ireland to contribute to the Imperial Revenue, we have it plainly demonstrated under the four heads that the contribution of England is the lighter tax. If ever the matter is mathematically demonstrated I think it is demonstrated by those figures. Judged by these four tests the contribution of Ireland to the Imperial Revenue is double what it should be. For this reason I object to any increase of the Imperial charge upon Ireland for any purpose whatever. Steps should be taken to reduce the contribution of Ireland to one-half of its present amount, and I ask for a special inquiry into this subject. I claim, as a matter of right, that a Select Committee of this House I be appointed to consider the incidence of Imperial taxation at the present moment in Great Britain and Ireland, and I ask the House to suspend the portion of the proposal in regard to increased taxation, so far as Ireland is concerned, until that Committee has reported whether the present incidence of taxation on Great Britain and Ireland is tolerable or fair, and what steps should be taken if the burden is found to be undue in the case of Ireland to reduce her contribution to such an amount as will appear to be a more just contribution from the relative capacity of each country to contribute to the common purse of the United Kingdom. I can hardly believe that they will venture to support the omission of the clause. I would remind the Committee that we have already passed Clause 4, dealing with foreign spirits, and to that the present clause, dealing with home-made spirits, is a necessary corollary. If Ireland is treated differently from England in this matter she will have to be treated as a foreign country in order to prevent spirits, on which a lower duty has been paid, from being smuggled into this country. The cargoes of Irish ships trading to this country will have to undergo inspection, and the whole process to which foreign vessels are subjected by the Customs Authorities will have to be applied to Irish vessels. With regard to Ireland being overtaxed by direct duties, I would point out that assessed taxes and House Duty are not paid in that country, and that Income Tax is 25 per cent. lower there than in England. ["No !"] As to indirect taxation, the remedy is in the hands of those who pay it. For instance, Guinness's stout is made in Dublin and is a favourite beverage in England, and I would suggest that if Irishmen do not like paying the increased duty on whisky they should drink their own stout. It is not the people who are taxed under the system of indirect taxation, but the commodity, and therefore those who object to the tax have only to refrain from the consumption of the commodity.

*(10.40.) MR. SYDNEY GEDGE

It seems to me that the interesting and elaborate arguments to which we have just listened might have been appropriate to some large proposals dealing with the question of taxation generally, but are hardly pertinent to the clause before the Committee. The point of this clause is to put 6d. per gallon on home manufactured spirits, and, if the clause is Struck out, there will be no extra duty on home manufactured spirits, whilst it will remain on spirits of foreign manufacture. Those who support the Amendment, knowing what its effect will be, in reality become Protectionists, and I should hardly have expected to find a proposal to omit this clause supported by hon. Gentlemen opposite, who pride themselves on being Free Traders. The hon. Member has argued as if spirits were the only drink and whisky the only spirit. The additional duty is to be put on brandy, gin, and rum, as well as whisky, and if the Irish do not like the extra duty upon it, they can avoid payment of this extra taxation by drinking their home manufactured Guinness' stout.

(10.48.) MR. HUNTER (Aberdeen, N.)

Before I say anything in the nature of hostile criticism upon this clause, I wish to say that the one redeeming virtue of the policy of the Chancellor of the Exchequer is, that he recognises in the collection and distribution of these taxes the principle of nationality. It is somewhat remarkable that a gentleman who prides himself upon his antipathy to Separatist tendency, should have introduced the principle into national finance. For the right hon. Gentleman proceeded upon the principle that, in providing assistance to local purposes, he should take not the individual, nor the county, but the unit of the nation; and having ascertained the proportions in which revenue is derived from Scotland, Ireland, and England, he recognised the principle that these nations as nations are entitled to recover in the form of local assistance, as nearly as possible, the sum which they have contributed to the Imperial Exchequer. Under that blessed régime we should have a little annual income of nearly £750,000 in Scotland, which would be most convenient when the time comes, as it will come when we have a separate Legislature as well as a separate finance. One objection I have to the clause is, that the 6d. duty on whisky is imposed on Scotland for purposes which Scotland does not approve, but, on the contrary, reprobates and condemns. In the Division on the Second Reading, we had an opportunity of ascertaining to what extent Scotch opinion supports the views of the Chancellor of the Exchequer. On that occasion, out of 72 Scotch Members, only 23 supported the Government. Therefore, on the threshold of the controversy, we have the principle of nationality recognised, and it follows that the money ought to be distributed according to the opinion of the people of Scotland. A two-thirds majority having condemned the distribution proposed by the Government, only one of two courses is legitimately open to the Government—either to drop the clause as regards Scotland or to agree to distribute the money according to Scotch opinion. The right hon. Gentleman has achieved the almost miraculous feat of rousing the opposition of every class in Scotland. By this clause he has alienated those who drink whisky; by the proposal to compensate publicans he has alienated the Temperance Party; and by giving the money to buy out licences, instead of giving free education, he has alienated all included in the category of the friends of education. The sum given to Scotland—less by £60,000 than it ought to be—is admitted to belong to the people of Scot-land. I have no hesitation in saying that the great majority of the people of Scotland would rather that the £50,000 with which it is proposed to buy out publicans in Scotland were dropped into the sea. I am, therefore, curious to know upon what principle the right hon. Gentleman is first to distribute the money according to nationalities, and then refuse the people of Scotland the application of the money as they desire. I congratulate the Government on having got a splendid cry for the next election. The first cry will be the pensioning of the publicans, and the next will be the cry of spoiling the schools, for the £50,000 is exactly the sum required to complete free education in Scotland, so distributed, you take the money from one class of persons and give it to another, thus robbing Peter to pay Paul. I would point out to hon. Gentlemen opposite that there is no Party so much interested in opposing the sort of legislation which has become the characteristic of the right hon. Gentleman's finance. If you raise taxes merely in reference to the annual expenditure of the nation you have some kind of check on the vagaries of the Chancellor of the Exchequer. But if you adopt the principle of this Bill you adopt a principle which, as it may be applied some day, will be most disastrous to the institution of private property. I know the right hon. Gentleman may contend that hitherto he has been taking money from the masses and giving it to the classes; but a Government may arise that is constituted on a different principle, and they may say that their duty is to fleece the classes in order to relieve the misery of the masses. They will be able to quote this and other Budgets of the right hon. Gentleman as sanctioning the very dangerous principle of using the power of the State for the direct and intentional purpose of taking money out of the pocket of one man and putting it into the pocket of another. The Chancellor of the Exchequer, by a shrug of the shoulders, appears to indicate that he? denies he is taking money from the masses and giving it to the classes. Excepting at the two extremes, the principle of local taxation is extremely fair and just. Then, as to indirect taxation, a man pays in proportion to what he consumes, and, therefore, the taxation falls heaviest on the poor man. It is manifest that, by the enormous extension we have given to the principle of indirect taxation, we are imposing an enormous and excessive burden upon the poorer classes. I, for one, will never vote for the extension of such taxation by a single farthing. I undertake to say that the amount of revenue obtained from spirits and beer alone is more than a fair contribution to the Revenue of the country which the working classes ought to be called upon to make. Therefore, in order to do even-handed justice, we ought to abolish the duty on tea, coffee, tobacco, and dried fruits.

*(11.2.) MR. GOSCHEN

I shall not follow the hon. Gentleman on the general subject of the amount of taxation which ought to be paid by the consuming classes. That is a very-wide subject, upon which I do not propose to embark. But the hon. Gentleman said we are making splendid election cries for the opposite side. He suggests that the Government are spoiling the schools in Scotland by the allocation of this money. But who is it that supplied the funds for making education free in Scotland? The hon. Member and other Scotch Members have forgotten what I, as a Chancellor of the Exchequer, have not forgotten—that Scotland will be entitled to a considerable sum next year when the Government come to deal with assisted education. It will then be seen whether the Government have spoiled the Scotch schools. But I turn from the speech of the hon. Gentleman to the far more important speech of the hon. Member for Belfast. The point of the whole speech of that hon. Gentleman is that Ireland is overtaxed, that her contributions to the Revenue are in excess of what Ireland ought to pay, and that Ireland does not receive back her fair share. The hon. Member wants to know whether the yield from Probate Duty, Income Tax, and stamps is not a fair criterion of the taxpaying capacities of the two countries. Well, it is an element of course, but not the only element. The hon. Member thinks that if the Probate Duty is 88 per cent. in England and 4 per cent. in Ireland it proves that the wealth of England is 88 per cent. and that of Ireland only 4 per cent. According to the hon. Gentleman, if there are in one country 10 individuals who possess £100,000 apiece, and 10 in the other who have only £10,000 apiece, while the rest of the population is very much in the same position in both countries, the proportion of taxation should be as 10 to 1. But it is clear that we cannot take the test only of the upper portion of the population; we must look to the other taxpaying classes. The hon. Member is aware that while the population in Ireland is 12½ per cent., her contributions are only 8 per cent. There are other matters that go to show the wealth of a country besides its contribution to Income Tax. It does not follow that because there is so great a disparity in the wealth of the upper strata of society in England as compared with Ireland, as shown by the Income Tax payments, that the same disparity exists throughout the population generally. Having regard to bank deposits and other indications, it appears that the population of Ireland is well able to contribute its share to Imperial expenses, from which, as in the case of the reduction in the colonial postage, it will benefit as much as the other parts of the Kingdom. [Mr. SEXTON: Ireland has no commerce.] It is not only the commerce of the country that will gain by the reduction of the postage, but it is individual correspondents; it is the poorer classes who have friends in the colonies, and with whom they correspond. The hon. Member spoke of the Tea Duties, and wanted to minimise the benefit which Ireland will get. Ireland will gain precisely in proportion to the tea she consumes. The only real objection Ireland can take is in regard to the House Duty.

MR. SEXTON

I decline to admit that argument. I say you should not, in the first place, exact from her more than her share.

*MR. GOSCHEN

The hon. Member not only said he declined to admit that argument, but I think he denied the force of the argument. I have gone through the Estimates clause by clause, and I shall be prepared to lay a Return on the Table, which, I think I may say, will show that without exception in every class of the Estimates Ireland receives a much larger share of the Imperial Revenue than she contributes. I can give the hon. Member one specimen.

COLONEL NOLAN

How about Museums?

*MR. GOSCHEN

Yes, for public buildings. She receives more than her share. For education she receives 16 per cent. instead of the 12½ per cent. she is entitled to. For school buildings England and Scotland receive 74 per cent. and Ireland 26 per cent.; for reformatory schools England and Scotland receive 73 per cent., whilst Ireland receives 27 per cent. instead of 12½ per cent. And so it goes on in nearly every item. The hon. Member asks that there should be a Committee to review the taxation of Ireland. I will consult my right hon. Friend, and I think we shall be prepared to grant an inquiry into the financial relations of the two countries. I do not want to exclude Scotland, and I think hon. Members from both countries will see that we are anxious to meet them. I cannot pledge myself without further consulting my leader on the subject, but we shall be glad to throw as much light as possible on the financial relations of the two countries. Hon. Members will see at once that it must be a full and proper inquiry, but of course we cannot consent to hang up this additional 6d. until the inquiry is complete. Of course, if the inquiry should show that injustice has been done to any part of the United Kingdom, steps will be taken to afford redress. I trust that, as I have made this statement, hon. Members will not think me wanting in courtesy if I do not enter at greater detail into the other points they have touched upon. The hon. Member for West Belfast has asked on what principle we tax alcohol in whisky more severely than alcohol in beer. It is not a conclusive answer to say that this principle has been accepted by all Governments hitherto, but that is the case, and we could scarcely raise the whole question of the relative taxation of alcohol on this Bill. We hope the imposition of the additional tax will not cause the illicit distillation which the hon. Member seems to fear; and we hope that, by extending the inquiry to the modes in which whisky is made, we shall get rid of any fear that there will be a further deterioration in the materials used in the distillation. I hope hon. Members will see that my proposal is reasonable, and that I have endeavoured to meet them in a spirit of courtesy.

(11.24.) MR. DILLON (Mayo, E.)

I think we have every reason to congratulate ourselves on one result of the masterly discourse delivered by my hon. Friend the Member for West Belfast (Mr. Sexton), a result which we have long sought to achieve, namely, the inducing of the Government to consent to the appointment of a Committee to investigate the financial relations of England, Ireland, and Scotland We are prepared to face such an inquiry, and we believe it will have the very best possible results. I am delighted that an opportunity has at last been afforded me of laying before the Committee my views of the case of Ireland against any increase in the Spirit Duty. My task has been very considerably lessened by the speech of my hon. Friend the Member for West Belfast, who most lucidly went over a great portion of the field I had proposed to traverse myself. The Chancellor of the Exchequer has not satisfactorily answered any of the objections made by my hon. Friend against the distribution of the surplus. One-sixth of the surplus of £1,800,000 was contributed by the Irish people, and, instead of one-sixth, we have got l-35th part, or less than a fifth of what we are entitled to. It is preposterous to suppose that Ireland will obtain much relief from the reduction in the postage to India and the colonies. I should say that hardly any of the letters passing between this country and India come from Ireland. One remark made by the Chancellor of the Exchequer was perfectly astounding. He said that the poorer classes in Ireland were more able to contribute to the taxation than the poorer classes in England. Did anyone ever hear a more preposterous idea exhibiting more ignorance of the position of the two countries? If it be true that there is this shocking, this sad distinction, between the upper classes of England and the upper classes of Ireland, that difference is increased threefold when we come to the poorer classes. I venture to say that if a real inquiry were made before a Committee it would be found that the mass of the labouring people of Ireland are not in a position to pay taxes at all, and that an honest system of taxation would pass them over altogether, for many of them are without the ordinary necessaries of i life. They are not a population which ought to be taxed for Imperial purposes. The present proportion and this I conceive to be an argument against any increase of the Spirit Tax in Ireland—the present proportion between the amount contributed to the Imperial Revenue by Ireland and Great Britain is grossly unfair. I need not go at length into an argument which has been so well set out by my hon. Friend; but as some doubt has been thrown on the question, although there has been no attempt to reply to the argument as a whole, I will quote an authority which I think will be generally accepted. Four years ago no less an authority than Mr. Giffen said— Ireland is overtaxed in comparison with Great Britain. It contributes twice its proper share, if not more, to the Imperial expenditure of this country.' This and the facts with which Mr. Giffen sustains his statement ought to dispose of the question, and I do not propose to say another word in support of the proposition that it is an admitted axiom that Ireland contributes double her just proportion to Imperial resources.

*MR. GOSCHEN

I have not admitted that it is an admitted axiom. It remains a disputed proposition.

MR. DILLON

I do not mean to say the right hon. Gentleman admitted it, but I have quoted high authority for the view we have endeavoured to maintain by argument. Having laid down that proposition I inquire, how has this unequal distribution come about? The machinery by which this has been achieved in an ingenious manner is this Spirit Duty. The fact is, that by the policy of constantly increasing the Spirit Duty, the burden of taxation has been shifted from off the shoulders of the British people on to the shoulders of the unfortunate peasants of Ireland, and the present proposal to increase the Spirit Tax still further is only one more step in a long-continued course of injustice towards the Irish people. What is the history of the Spirit Tax? In 1825 the tax was 7s. in England and 2s. 10d. in Ireland; in 1840 it was 7s. 10d. in England and 2s. 8d. in Ireland; in 1855 it was 8s. in England and 6s. 2d. in Ireland; in 1858 it was 8s. in both countries; and in 1860 it was 10s. in both countries. And note this remarkable fact, which accounts for our persistent opposition to the increase of this tax, that, unlike the Income Tax, once it is increased there is never a reduction subsequently made. We complain that when surpluses occur the Government of this country use them for the purpose of relieving the taxes which weigh on the people of England, while all the time they are increasing those taxes which weigh most heavily on the Irish people. In 1864 there was an important inquiry which, owing to the want of activity on the part of the Irish Members of that day, did not produce the results which might have been expected from it. The facts adduced before the inquiry were most extraordinary. When the Act of Union was passed, the Irish Lords protested against the proportion of taxation which it was sought to impose upon Ireland, and asserted that the utmost Ireland could pay would be in the proportion of one to 13. During the first 16 years after the Union the utmost that the Government of the day, by every form of taxation which human ingenuity could invent, could raise from the people of Ireland was 1–13th of the whole. At that time Ireland had a population of exactly one-half that of Great Britain. At present Ireland's population is one-sixth, while the wealth of Great Britain is threefold higher per head than that of Ireland. From these figures it is clear that Ireland is now paying more than she was at the time of the great wars at the beginning of this century. In 1831 Ireland contributed 1–13th; in 1836, 1–12th; in 1847, the year of the Irish famine, 1–11th; in 1857, 1–10th; and in 1862, 1–9th. When people speak of the poverty of Ireland they should remember that, not only the Irish land system, but this terrible and insupportable taxation is one of the most fertile causes of distress. Taking a period of 50 years, from 1816, the remissions of taxation in Great Britain amounted to £72,000,000, while the new taxes imposed amounted to £35,000,000, leaving a balance of remissions of £37,000,000. In Ireland during the same period the remissions of taxation were £5,488,000, the taxes imposed £4,981,000, leaving a balance of remissions of £507,000, or only £500,000 as compared with £37,000,000 in the case of Great Britain. In other words, there is a balance of remissions in the case of Great Britain of 98.63 per cent., and of 1.37 per cent. in the case of Ireland. Throughout the whole period since the cessation of the great wars the history of the finances of this country displays an almost unbroken course of remission of taxes which weigh heavily on the people of Great Britain, and of increases of taxes which weigh most heavily on the people of Ireland. The consequence is, that Ireland now pays five times as much towards the Imperial Exchequer in proportion to her resources as she did in the time of the great wars. The increases have been made principally upon spirits and tobacco. This year the first duty of the Chancellor of the Exchequer should have been to make some remission of the duty on one or other of these articles, and thereby to redress a monstrous grievance suffered by the people of Ireland. I conclude my observations on this portion of the question by calling the attention of the Chancellor of the Exehequer to the observations he made in 1888. He said— I am always anxious, apart from political differences, which separate us from many of the Irish Members, to do full justice to Ireland from the financial point of view. What has the right hon. Gentleman done since then to do full justice to Ireland from the financial point of view? After that statement we find him repeating the very acts which created that financial injustice and imposing a new tax in spite of the Irish Members. The Chancellor of the Exchequer, when pressed on this point, takes refuge in the argument that we get back taxes to Ireland in extra grants on the Votes in Supply, on light railways, and draining bogs. The Irish Members repudiate that argument. We want fair-play and justice. We do not want to have money wrung out of the poverty of the people by unjust taxation and then cast back to us as an act of charity. We are not allowed to control the education of our children. Perhaps the right hon. Gentleman will say that the money is spent on criminal prosecutions, on Judges, Resident Magistrates, and the Army in Ireland.

*MR. GOSCHEN

I should never use that argument. I believe if we were to withdraw 20,000 men from Ireland it would be regarded as afresh grievance. There is always a remonstrance against withdrawal.

MR. DILLON

I know there is a remonstrance, but a remonstrance was never heard from me. The remonstrance is made by certain traders who make a little money by their presence. If you withdraw your whole garrison, they may go, with my blessing. I say the money spent on the military never brought any good to the country. But putting that question aside, the Chancellor of the Exchequer has used the argument that we get more than our share in the Votes of Supply. Those Votes are offered as bribes to keep our people quiet. We do not want these Votes. If you adjust the taxation between England and Ireland we want to pay our just share towards the taxation of the country. If this is done it will not be necessary to give Ireland any more than her just supply in the future. What the Irish people want is to have the control of their finances beyond what you need for the Imperial Exchequer, and we will make it go further than you can.

(11.55.) MR. J. MORLEY (Newcastle-upon-Tyne)

I think that if any justification were needed for the pertinacity with which last night, or rather, at an early hour this morning, we insisted on the discussion of this clause, that justification would be found in the very important, and, I may say, satisfactory announcement which the Chancellor of the Exchequer has made, speaking, I presume, on behalf of the Government, practically undertaking that this Select Committee is to be appointed, if not this Session, at latest at the beginning of next Session, to consider the vital question of the real nature of the burdens borne by the three Kingdoms. We are amply justified, and I trust that after this nothing will be said about obstruction. Everybody who listened to the extremely able and full speech of the hon. Member for West Belfast must feel how much both Great Britain and Ireland would have lost if that speech had not been made, and this important undertaking had not been got from the Chancellor of the Exchequer. The hon. Member for West Belfast said that on consideration the figure which was fixed in the proposals of 1886 as Ireland's contribution to Imperial charges he believed to be too high. The right hon. Gentleman the Member for Mid Lothian at the time thought that the figure which he proposed was one which would need further consideration in Committee. The Irish Members have made out a primâ facie case for their proposition that Ireland has been unjustly and injuriously treated, and the Chancellor of the Exchequer admits that they have made out a primâ facie case.

*MR. GOSCHEN

I did not say so.

MR. J. MORLEY

The right hon. Gentleman did not say that; but if he did not think something of the kind, is it to be supposed that he would consent to the appointment of a Select Committee? No further justification is needed for the prolongation of the discussion and the opposition to the tax.

*(12.5.) MR. GOSCHEN

I cannot congratulate the right hon. Gentleman upon the way in which he has received the Government's concession. He has mainly made use of it for the purposes of political capital in pointing to it as a justification of the transactions of last night. But I could have made my announcement on behalf of the Government equally well at half-past 12 last night, and there have been ample opportunities before for the interesting speeches which have been delivered during the day, and which might have obviated a good deal of unnecessary argument if delivered before. The right hon. Gentleman assumes that a primâ facie case has been made out; but surely there are many cases where it is simply desirable to clear up a question, and where those who assent to an inquiry are by no means prepared to assent to the allegations made. I entirely deny that a primâ facie case has been made out, but I have long thought it desirable that the sense of injustice which is expressed by Irish Members should be removed.

(12.10.) MR. J. MORLEY

I did not intend to import any unfair spirit into my remarks. My real reason for congratulating the Government on the announcement which has been made is because the first step towards carrying out a Home Rule policy is to obtain a financial adjustment between Great Britain and Ireland which will be accepted by both countries; and such an adjustment can only be arrived at by means of a Select Committee of the House, in which the country will have confidence.

(12.11.) SIR G. CAMPBELL

It is unfortunate that the right hon. Gentleman did not make his declaration at 12 o'clock last night: it might have saved a long Debate.

*MR. GOSCHEN

I might have done so, but you would not allow us to come to the clause.

SIR G. CAMPBELL

As a matter of fact, we did enter on the consideration of the clause, and if the right hon. Gentleman had made his announcement last night we might have been saved 24 hours' wrangle. But on the principle of better late than never, and of not looking a gift horse in the mouth, I, as a Scotch Member, thank the Chancellor of the Exchequer for his concession, and I am sure that the inquiry will show that Scotland pays enormously more than her share to the taxation of the United Kingdom.

(12.12.) COLONEL NOLAN

I do not want to reproach the Chancellor of the Exchequer with want of reason last night now that we find him reasonable to-night, but it appears to me that it does not make much difference so long as we have this extra tax put on. Committee or no Committee, we are to have the tax all the same. But I deny the Chancellor of the Exchequer's argument that Ireland gets a return benefit in the shape of Imperial expenditure. For instance, as regards the Navy, compare the expenditure that occurs in connection with the Navy; no share of this comes to Ireland. There are no large public buildings in Ireland on which we get a share of expenditure, unless you can include police barracks in the description; we have no such institutions as the British Museum, South Kensington Museum, and such-like places. In education we get a slightly better share proportionately than England, but it is only slightly better, and the reason is simple. It was part of the English education policy in giving education of a denominational character to stick the schools close together, not putting a proper distance between them, and hence it was that the extension of education became so expensive. I differ from my hon. Friend the Member for East Mayo, and think we do get some advantage from the expenditure upon the Army in Ireland. I do not mean to say the expenditure is so advantageous as it would be if spent on education; still, we get a certain percentage of the expenditure, though the greater portion of the expenditure is made in England. In Civil expenditure, too, Ireland enjoys but a very limited share, except in expenditure on the judicial system, and this, of course, is the result of the old system of bribery, by means of which the people were governed.

(12.23.) The Committee divided:—Ayes 176; Noes 126.—(Div. List, No. 102.)

*MR. GOSCHEN

We propose to postpone Clause 7; and perhaps hon. Members opposite will allow us to take the remaining clauses, to which I think there is very little objection.

MR. STOREY (Sunderland)

Will the right hon. Gentleman tell us what are the changes he proposes to make in Clause 26?

THE SECRETARY TO THE TREASURY (Mr. JACKSON,) Leeds, N.

There is an Amendment by which it is proposed to add certain words at the end of that clause; but we should prefer to deal with it on the Report stage, and the Amendment is not yet down on the Paper.

Motion made, and Question, "That Clause 7 he postponed," put, and agreed to. Clause 24.

*MR. GOSCHEN

I beg to move, in page 9, to leave out Postponed Clause 24, and insert the following Clause:— Where any person shall die after the pausing of this Act without having made a return of all his profits and gains chargeable to Income Tax with a view to an assessment thereon in due course, an assessment in respect of the profits and gains which arose or accrued to him before his death may be made at any time within the year of assessment, or within four months after the expiration thereof, upon his executors and administrators, and the amount thereof shall be a debt due from and payable out of his estate.

Motion made, and Question proposed, "That the Clause be read a second time.'

MR. T. M. HEALY

I shall be glad to facilitate the Chancellor of the Exchequer in carrying anything reasonable, but I deprecate the manner in which this clause is brought before the House. I do not think that this clause has been sufficiently considered; and as it is not a clause on which the Chancellor of the Exchequer can claim any particular urgency, I trust he will allow it to be postponed until that consideration has been given to it. The right hon. Gentleman is only anxious to bring additional gain to his Department, and in the endeavour to promote this object he has not given due consideration to the position of executors and administrators, whose office, at the best, is a very thankless one. I would suggest that this question ought to be hung up until next year. Unless the right hon. Gentleman agrees to postpone this clause, we must oppose it as a whole. I have no desire that the estates of deceased persons should escape their fair share of this duty; but in this case you practically put a pistol to the head of the executor and call upon him to stand and deliver. The result is, that you may issue an attachment of whatever the form is in England against the executor and send him to gaol. I ask, why do not you make some provision to meet this case? Why should an executor or administrator be sent to gaol? I understand the view of the Government to be that the executor is liable to be sent to gaol. The Chancellor of the Exchequer shakes his head, but I would call his attention to the words of the clause he proposes.

*MR. GOSCHEN

The clause says the amount thereof shall be a "debt due from and payable out of his estate." There are no words in the clause bearing the meaning attached to it by the hon. Gentleman.

MR. T. M. HEALY

I differ from the right hon. Gentleman and assert without hesitation that, according to the clause, the debt is seized on the executor. It says that where any person shall die after the passing of the Act, without having made a return of his profits chargeable to Income Tax, an assessment may be made of those profits at any time within the year of assessment, or four months afterwards, upon his executors or administrators, and the amount thereof shall be a debt due from and payable out of his estate.

*MR. GOSCHEN

Although the hon. and learned Gentleman is aquainted with the law, I have some knowledge of the facts, and I assure him that he is mistaken in his construction of this clause.

MR. T. M. HEALY

I cannot concur in the view of the right hon. Gentleman; but at any rate, if that be his view, he ought to insert something that would make the matter clear.

*THE ATTORNEY GENERAL (Sir, R. WEBSTER) (Isle of Wight

I have no manner of doubt that as the clause now stands the debt can only be recoverable out of the estate; but if the hon. and learned Gentleman can show that I am wrong, we should not object to insert explanatory words, but I cannot imagine any words that would make the law clearer than it is now.

MR. T. M. HEALY

I am no more satisfied after what the hon. and learned Gentleman has stated than I was before, and I ask the Government what point will they gain by all this hurry? Is the debt to be treated as a Crown debt? How is the man who supplies the coffin to bury the deceased person to be situated?

*SIR R. WEBSTER

The tax due on the estate would be a first charge.

MR. T. M. HEALY

It is an extraordinary notion that a man's Income Tax is so sacred an obligation that it is to be treated as a first charge on his estate. I should imagine that the debts which ought first to be satisfied out of an estate are those which he has contracted with John Smith, John Brown, and so forth.

*MR. GOSCHEN

A man's assessment to this tax now ranks before his other debts, and I see no reason why that principle should be altered in the case of a deceased person's estate.

MR. STOREY

There is an old saying "that death quits all scores," and I see no reason why the Chancellor of the Exchequer should pursue debts of this kind into the grave. I, for one, enter my strong protest against this proposal, which will throw great hardship on the smaller class of estates. Take the case of a person receiving £500 a year. He dies and leaves a widow. Upon the death of the person his will is proved. It may be that the £500 is derived from £5,000 or £6,000 of property, and upon that the widow or executor has to pay 3 per cent. into the coffers of the State. That is a very serious charge upon the widow. I am not a lawyer, but I am putting very serious cases of hardship that I have known in my own experience amongst poor people.

THE CHAIRMAN

I can scarcely see how the hon. Member is approaching the subject of the clause.

Mr. STOREY

I think I can approach it. This charge is a new charge. ["No!"] If it has not been charged before, it is a new charge. The charges are serious enough already, and it is unnecessary that we should pursue the dead man in this way. Therefore, if I can only get another Member to tell with me I shall divide against this clause.

*MR. GOSCHEN

This clause is to remedy an omission to make a return. If a millionaire neglected to make a return the hon. Member would not say that his estate should not be called upon to pay. So long as the law with reference to the Income Tax remains what it is, there should be means of meeting and remedying a default.

*MR. CHILDERS

I think that this is a proper proposal. The clause is intended to meet the case of a deceased person who has failed to perform his duty, whether poor or rich, and if I am not mistaken it is proposed in consequence of evasion of duty by one or more people of the latter class.

*MR. CHANCE (Kilkenny, S.)

The assessment is made on the estate of the dead man, and if it is not made on the executors, where is the right of appeal? Who has any locus standi to appeal?

*SIR R. WEBSTER

Distinctly the assessment would be made on the executor, and he would have the right of appeal, but it is not a debt due by the executor.

MR. CHANCE

Does the Crown solemnly say to the executor "you are bound to pay us," and then, "it is no debt of yours?" I ask the Chancellor of the Exchequer whether he will add these words to the clause: "and not from the executors or administrators personally?"

*SIR R. WEBSTER

I have not the slightest objection to add the words, only in my judgment they are absolutely unnecessary. If the hon. Member thinks they are necessary I have no objection to considering them.

MR. CHANCE

I do not in the slightest degree undervalue the opinion of the Attorney General either on this or any other subject. Still, he is not infallible, and many Law Officers have given opinions at that Table which have not been sustained by the Judges.

*(1.0.) MR. GOSCHEN

Many errors are occasioned by entering into arrangements on these points of detail across the Table. I will undertake, before the Report, to consult my Colleagues and those best informed with regard to this tax to see what can be done.

(1.1.) MR. M. HEALY (Cork)

What the right hon. Gentleman has said is fair enough so far as it goes. The Government decided to reject the clause originally in the Bill, and now they give us another one somewhat similar in effect. Why was this?

*(1.1.) MR. GOSCHEN

The alterations we have made have been slight, and have only been made for the purpose of remedying defects which were pointed out to us in the clause.

(1.2.) MR. M. HEALY

There is a distinction between the clause on the Paper and the clause in the Bill. The clause in the Bill provides for a person dying without an assessment, but the clause on the Paper deals with a person dying who has not made a return.

*(1.2.) MR. GOSCHEN

This provision is proposed to remedy an omission. A mistake might be held to have arisen not by the deceased's own default, but the default of someone else, if these words "without having been duly assessed" had remained. The clause now makes it clear that it must have been his own default.

(1.3.) MR. M. HEALY

A form is sent out for a person to fill up and return, and in cases where it is not filled up the Department fills it up itself. That is the rule—not to enforce the penalty, but to estimate the gains of the person who should have made the return, and return him accordingly. I do not know what the new clause means which provides that if a person dies without making a return an assessment can be made on him.

*(1.5.) SIR R. WEBSTER

Supposing a person dies having earned profits to the amount of £2,000, as the law stands he has earned taxable profits; but if he has not made a return his income cannot be taxed. The clause provides that the Commissioners may in such a case assess the profits within the year of taxation or four months thereafter.

(1.6.) MR. CRAIG (Newcastle-upon-Tyne)

A man when he dies may have earned only a third of his annual income. Does the clause mean that his executors are to be called upon to pay Income Tax in respect of the whole year?

*SIR R. WEBSTER

No, no.

(1.6.) MR. FLYNN

A poor man has no protection under this clause against an unfair assessment being made on him. A man earning a small income may have had serious illness and may have been really subjected to loss before his death. His executors may not be able to say whether or not he has made profit, and the result may be that the State may exact an amount to which it is not entitled. I should be sorry to see these classes handed over to the tender mercies of lawyers either in Ireland or England, and I think it a shabby and contemptible thing for the Public Exchequer to come to the widow and orphan—or their executors who are doing a work of Christian charity -and charge in Income Tax an amount more than the estate is worth. I think this clause should be postponed. I would appeal to the Chancellor of the Exchequer and the Attorney General to put their heads together and see if they cannot draft a clause to meet this case.

*(1.12.) MR. GOSCHEN

Our point is that a person who has not made a return should not be put in a worse position than one who has.

(1.12.) MR. A. O'CONNOR (Donegal, E.)

The object of the clause is to enable the Government to recover from executors a tax which, if the deceased had lived, would have been recovered from him, but which cannot be recovered now, because no assessment is made out for the year. But as the clause is worded, it will have this effect: if a man dies without having made a return before the assessment is made the estate is not liable to pay; but if no return at all has been made, then it is liable. What would be the use of this clause in a case where a man dies having made a return before the assessment is made?

(1.14.) MR. JACKSON

If a man during his lifetime makes a return, the assessment follows as a natural course. The executors are proceeded against and the amount is recovered. All that this clause seeks is to do in the case of the man who has not made a return exactly what is done in the case of the man who has made a return.

(1.15.) MR. CHANCE

Would the Solicitor General say whether he shares that opinion? The man who makes a return and dies before assessment will still escape paying the tax. I want to ask the Solicitor General if that is not the case? I say a debt accrues the moment the assessment is made. If a man dies before the assessment is made I challenge anyone to point out a section under which a penny could be charged to the executors.

*(1.17.) SIR R. WEBSTER

Without doubt no assessment could be made, and all this clause does is to enable a charge to be made in the case the hon. Member has alluded to, and which could not be made otherwise.

*(1.18.) MR. BRUNNER (Cheshire, Northwich)

If the claim is not made until after four months from the end of the financial year, the right of the Crown to recover lapses I think.

(1.19.) MR. FLYNN

I must urge on the attention of the Government the case of the poor man who dies suddenly without having made a return, and who may not have made a profit for some time before his death.

*(1.22.) MR. W. H. SMITH

I would appeal to hon. Gentlemen opposite to allow a Division to be taken on this clause. I believe this proposal of the Government is a simple matter of justice to the living as well as to the dead.

(1.23.) MR. T. M. HEALY

I do not think this is contentious matter upon which we should divide. All that we desire is that some reasonable answer should be given to our arguments. I protest against the widow of a professional man being called upon to pay Income Tax in respect of her deceased husband at the old rate. I submit that if this Amendment is inserted, it would go a long way towards soothing the misery of many such widow.

*(1.25.) MR. GOSCHEN

I will promise the hon. Member to consider all these Amendments before Report; but it is essential to have them thoroughly sifted by those who are familiar with such questions.

(1.26.) MR. T. M. HEALY

I feel the strength of the right hon. Gentleman's appeal, and, therefore, on the assurance that the defects we have pointed out will be remedied, if possible, on Report, I will not press my opposition.

Question put, and agreed to.

New Clause read a second time—

1. "(1.) The substance mixed with spirits for the purpose of methylation may be any combination of substances approved for the purpose by the Commissioners; and the term 'methylated spirits' in 'The Spirits Act, 1880,' shall, in lieu of the meaning thereby assigned to it, mean spirits mixed with any substance or combination of substances approved for the purpose of methylation by the Commissioners.
2. "(2.) An authorised methylator may supply methylated spirits in vessels containing not less than a reputed quart, provided that the quantity supplied by the methylator to any one person at a time is not less than five gallons.
3. "(3; In any mixture of methylated spirits with gum resin the quantity of gum resin shall not be less than three ounces in every gallon of the mixture."—(Mr. Jackson.)

(1.28.) MR. CHANCE

Is it intended to prevent the use of certain substances in the manufacture of methylated spirits?

MR. JACKSON

That is so.

(1.29.) DR. TANNER (Cork Co., Mid)

Why should not methylated spirit be supplied in smaller quantities than one quart?

MR. JACKSON

The matter will be considered between this and Report.

Clause added to the Bill.

MR. SHIRESS WILL (Montrose, &c.)

I beg to move the new clause which stands in my name. Clause 25 proposes to relieve the smaller householders of some Inhabited House Duty, but there is a grievance which presses hardly upon small shopkeepers. It is most unfair that the part of a house used for trading purposes should be chargeable with the Inhabited House Duties, and I hope the Chancellor of the Exchequer will be able to see his way to make some concession in the matter.

New Clause— Where a part of any house, being one property, is occupied solely for the purpose of any trade or business, or of any profession or calling, by which the occupier seeks a livelihood or profit, whether the part so occupied communicates directly or not with the rest of the house, such part of the house shall not be taken into account in assessing the amount on which the house shall be chargeable with the inhabited house duties.

Motion made, and Question proposed, "That this Clause be read a second time."—{Mr. Shiress Will.)

*MR. GOSCHEN

I think the clause goes very much further than the hon. Gentleman intends. It is supposed to apply to small shopkeepers, but I think it will apply to large establishments; indeed, I think it would do away with the house tax on shops.

MR. ESSLEMONT

We consider it very hard that a man who lives over a shop should have his shop assessed to House Duty. We can hardly expect the Chancellor of the Exchequer to accept the clause on the spur of the moment, but the right hon. Gentleman will admit that it contains matter for consideration.

MR. CHANCE

May I suggest to the hon. and learned Member for Montrose that he might get rid of a great deal of objection if he limited the clause to premises of an annual value, say, not exceeding £40.

MR. SHIRESS WILL

I would preper to say £60 and under.

*MR. GOSCHEN

I am really unable to go any further than I have done this year.

MR. SHIRESS WILL

Does the right hon. Gentleman hold out any hope that next year he will give consideration to the point?

*MR. GOSCHEN

I cannot say what next year's Budget will bring forth.

Question put, and negatived.

MR. M. HEALY

I beg to move the new clause standing in my name. I do not propose at this hour to enter at length into the subject of the Income Tax. Suffice it to say that the tax was imposed originally as a temporary measure to meet a special strain on the finances of the Empire occasioned through war. Frequent attempts have been made to get rid of the tax altogether. Two years ago the Chancellor of the Exchequer received a deputation of solicitors in England and Ireland, who laid their grievance before him. The right hon. Gentleman received the deputation in a very sympathetic spirit. My clause does not propose to abolish the tax, which I think would be the fairest and best course to pursue, but simply to relieve solicitors from a very unfair imposition. No other profession in the country is subjected to any similar tax. Solicitors are placed under very heavy financial burdens before they can practise. No young man can become a member of the profession for less than £1,000 when the cost of his education is taken into consideration. Of that £1,000 a considerable sum goes to the State in the shape of Stamp Duty. A barrister is put to great expense, but not to the same as a solicitor. The same is the case with a doctor. It certainly lies with the right hon. Gentleman, or other defenders of the tax, to show some good ground why solicitors should be placed in their present invidious position. My proposition is simply that when a solicitor has once paid a tax to the State in the shape of Licence Duty, he should not be assessed to the Income Tax under Schedule D.

New Clause— Any person admitted or enrolled in England or Ireland as an attorney, solicitor, proctor, or notary public, and any person admitted or enrolled in Scotland as a writer to the signet, solicitor, agent, attorney, procurator, or notary public, and any other legally qualified person who carries on business in England or Ireland as a conveyancer, special pleader, or draftsman in equity, and who is obliged by law to take out a yearly certificate, shall be entitled to deduct from any Income Tax payable by him under Schedule D on his annual profits and gains the amount of the duty paid by such person on the annual certificate required to be taken by him.

Motion made, and Question proposed, "That this Clause be read a second time."—(Mr. M. Healy.)

*MR. GOSCHEN

Whatever view I may hold as to the abolition of the tax. I certainly could not assent to anything in the shape of the clause moved by the hon. Member, because, by so doing, I should assent to a new system in our method of taxation.

MR. M. HEALY

I am not prepared to withdraw the clause, but on Report I will move to abolish the tax altogether.

*MR. BRUNNER

If this clause were read a second time, I should ask the Chancellor of the Exchequer to extend it to other people who pay Licence Duty, for I am of opinion that it is a bad system which charges a man for permission to make an honest living.

Question put, and negatived.

Committee report Progress.

*MR. W. H. SMITH

I think there is a general desire that the Committee should be concluded tomorrow, and, therefore, I beg to give notice that I will put down a Motion—[Hon. MEMBERS: "You had better not."] If hon. Members do not desire I should, I will not do so. I only wish to be understood. I believe I am expressing their wishes when I refer to the desire that the Committee should terminate to-morrow night before half-past 5.

MR. SEXTON

It is possible that if you put down a Motion you will occupy with it a considerable part of the time of the House, which would otherwise be occupied with the discussion of the Bill itself.

Committee to sit again To-morrow.

It being after One of the clock, Mr. Speaker adjourned the House without Question put.

House adjourned at five minutes before Two o'clock.